U.S. GOVERNMENT PRINTING OFFICE

62–766 cc WASHINGTON : 2000

S. HRG. 106–632

DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

ON

H.R. 4690

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED AGENCIES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2001, AND FOR

OTHER PURPOSES

Department of Commerce

Department of Justice

Department of State

Federal Communications Commission

Nondepartmental witnesses

Securities and Exchange Commission

Printed for the use of the Committee on Appropriations

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

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
(II)

COMMITTEE ON APPROPRIATIONS

TED STEVENS, Alaska, Chairman

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

PETE V. DOMENICI, New Mexico

CHRISTOPHER S. BOND, Missouri

SLADE GORTON, Washington

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

JON KYL, Arizona

ROBERT C. BYRD, West Virginia

DANIEL K. INOUYE, Hawaii

ERNEST F. HOLLINGS, South Carolina

PATRICK J. LEAHY, Vermont

FRANK R. LAUTENBERG, New Jersey

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

STEVEN J. CORTESE, Staff Director

LISA SUTHERLAND, Deputy Staff Director

JAMES H. ENGLISH, 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

ERNEST F. HOLLINGS, South Carolina

DANIEL K. INOUYE, Hawaii

FRANK R. LAUTENBERG, New Jersey

BARBARA A. MIKULSKI, Maryland

PATRICK J. LEAHY, Vermont

ROBERT C. BYRD, West Virginia

(ex officio)

Professional Staff

JIM MORHARD

KEVIN LINSKEY

PADDY LINK

DANA QUAM

CLAYTON HEIL

LILA HELMS (Minority)

SONIA KING (Minority)
(III)

CONTENTS

THURSDAY, FEBRUARY 24, 2000

Page

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

TUESDAY, FEBRUARY 29, 2000

Department of Justice: Office of the Attorney General ........................................ 45

THURSDAY, MARCH 2, 2000

Department of State: Secretary of State ................................................................ 117

TUESDAY, MARCH 7, 2000

Department of Justice:

Immigration and Naturalization Service ........................................................ 183

Federal Bureau of Investigation ...................................................................... 215

Drug Enforcement Administration .................................................................. 215

TUESDAY, MARCH 21, 2000

Federal Communications Commission ................................................................... 289

Securities and Exchange Commission ................................................................... 323

Departmental witnesses:

The judiciary ..................................................................................................... 337

Independent agencies: The Asia Foundation ................................................. 365

Nondepartmental witnesses:

Department of Justice ...................................................................................... 371

Department of Commerce ................................................................................ 398

Department of State ......................................................................................... 421

Independent agencies ....................................................................................... 425

(1)

DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED

AGENCIES APPROPRIATIONS FOR FISCAL

YEAR 2001

THURSDAY, FEBRUARY 24, 2000

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

The subcommittee met at 11:02 a.m., in room SD–124, Dirksen

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

Present: Senators Gregg and Hollings.

DEPARTMENT OF COMMERCE

OFFICE OF THE SECRETARY

STATEMENT OF HON. WILLIAM A. DALEY, SECRETARY

ACCOMPANIED BY:

LINDA J. BILMES, CHIEF FINANCIAL OFFICER AND ASSISTANT

SECRETARY FOR ADMINISTRATION

DEBORAH K. KILMER, ASSISTANT SECRETARY FOR LEGISLATIVE

AND INTERGOVERNMENTAL AFFAIRS

ELLEN BLOOM, DEPUTY CHIEF OF STAFF

BARBARA RETZLAFF, DIRECTOR, OFFICE OF BUDGET

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

I understand Senator Hollings will be coming a little later.

We are honored to have the Secretary of Commerce with us.

Mr. Secretary, rather than our taking your time with opening

statements, please proceed with your statement.

OVERVIEW OF SECRETARY DALEY’S STATEMENT

Secretary DALEY. Thank you very much, Mr. Chairman.

Let me say that I am very pleased to be here to present our Commerce Department’s budget for the new fiscal year, and let me first

thank you, Mr. Chairman, and the members of the subcommittee

and all of your hardworking staffs for the support and counsel

which you have all given us over the last 3 years. This will be our

last visit together, so I look forward to working with the subcommittee, obviously, to make this one of the best ever.

As you know, we are in the longest economic expansion in our

Nation’s history. As a result, we are in an era of unprecedented

budget surpluses. Obviously, our goal is to try to continue this for
2

many years to come, and we are requesting a budget that covers

our everyday chores, from taking the Census to advancing U.S.

trade and protecting our marine resources. But we are also requesting $875 million in new strategic investments that will help us do our jobs better and at the same time

prepare us for the future. These investments are not only consistent with President Clinton’s priorities, but in my opinion, they

reflect many of the priorities of you in Congress. All told, our budget calls for $5 billion next year, which is down

37 percent from last year’s $8.5 billion, but of course, the decline

is because the bulk of the work of Census 2000 will be done in the

current fiscal year. I might add that we are on track for completing

the Census on time.

To complete the work, we are requesting $393 million in fiscal

year 2001 for the processing and distributing of the data and also

for closing down the hundreds of local Census offices. To be honest,

we have prided ourselves in this Department for keeping the lid on

our budget, and aside from the Census, our core budget has remained fairly constant at about $4 billion for the last few years.

But the time has come to invest in the future so we can continue

delivering high-quality services to the American people. In my

opinion, this is a very prudent budget that, despite the increases,

will pay dividends in the long run. I would like to briefly highlight

some of our proposals.

E-commerce is the growth engine of the future. We have never

seen anything like it before. But this revolution is definitely not

without challenges. All of us got a wake-up call a few weeks ago

that showed how vulnerable the Internet can be to cyber attacks.

Obviously, it is smart business to make sure we have tighter security so we can maintain public confidence in the Internet. So we

are proposing $76 million to work on this problem.

To fully exploit the Internet’s potential, everyone needs to be plugged into the revolution, so we are seeking $175 million to help

narrow the digital divide and also help promote e-commerce. This

money would be used to increase computer use in the home, to triple NTIA’s Technology Opportunities Program, and also to install

high-speed Internet technology in rural communities and in the

very distressed urban areas.

As we all know, accurate measurement of the economy is an absolutely vital Government function, so we are seeking $29 million

for tracking e-commerce growth and for enhancing our statistical

infrastructure.

We also want $54 million to promote economic development in

our Native American communities; $28 million for minority-serving

institutions to help them educate more scientists and engineers;

and $10 million as part of a Government-wide effort to revitalize

communities throughout the Mississippi Delta.

For NOAA, which makes up the lion’s share of our budget, we

are requesting nearly $2.8 billion. This includes $376 million in

new money for protecting our environment. Much of this supports

the President’s Land Legacy Initiative, which is one of the greatest

efforts to save natural resources since Teddy Roosevelt was President. So we are asking for resources to set up a new Cultural Impact Assistance Fund and increase the grants in our Coastal Zone
3

Management Program. We are also requesting $60 million so we

can honor our commitment to the 1999 Pacific Salmon Agreement.

Predicting the weather and maintaining the largest non-military

fleet of satellites in the world are our key priorities, so we are requesting increases in those areas.

This will once again be another banner year for trade. We are requesting $72 million for these programs. Bringing China into the

WTO obviously would help us reduce our trade deficit by opening

many markets in China that are now closed to U.S. exporters. By

granting China permanent normal trade relations and bringing

them into the WTO, we would have the opportunity to gain better

access to many markets, from agriculture to telecommunications.

As a member of the WTO, China for the first time will have to

play by global trade rules. Given the sheer volume of our trade

with China and other nations, especially in Asia, we need more resources to remain effective at enforcing our trade laws and agreements that are already on the books. We are requesting $21 million

for that purpose.

To be frank, how can we expect the American people to support

those of us who agree that more liberal trade is good for us if they

see that we are not doing a good job at enforcing and policing existing agreements? We can trust our trading partners, but we must

verify that our trade deals are being lived up to. There is also $16 million for promoting environmental exports and exports by small manufacturers. We are also proposing $30

million to help communities adjust when a plant closes due to

trade or other economic shocks.

The last area I would like to mention, Mr. Chairman, is management. Without a doubt, the number one challenge for our Government in the years ahead is to find ways to deliver our basic services more efficiently. Over the past few years, we have made improvements at Commerce, from producing clean financial statements for all of the bureaus to improving security. But in the 21st

century, Government must be E-ready. For several years now, we

have asked for money to rewire our building with optical fiber so

we can be a fully digital Department. With fiber, our network

would operate 10 times faster than it does today. Ten years ago,

people could wait overnight for an urgent letter, but to get the job

done for the taxpayers, people need the information delivered instantly to their computers.

As the first Commerce Secretary of this, the Internet century,

and if I may say, the longest-serving Commerce Secretary of this

century, I strongly urge the subcommittee to provide the $6 million

we need to rewire this building. I believe it is essential to the future effectiveness of the Department.

Finally, we are requesting funds for a number of critical building

projects, notably, NOAA and the Census Bureau.

PREPARED STATEMENT

Mr. Chairman, that completes a brief outline of our 2001 budget

request. Again, it has been an honor to appear before your subcommittee and to engage with you and your staff, and I would like

to thank you once again and also thank the men and women of the

Department of Commerce for the support that they have given me
4

in the last 3 years as we have gone through the budget process;

our CFO and all the people who have worked so hard in our budget

department not only to get me ready, but to get this budget put together to effectively present to you.

Thank you, Mr. Chairman.

[The statement follows:]

PREPARED STATEMENT OF WILLIAM A. DALEY

Good morning. I am pleased to be here to present the Commerce Department’s budget for the new fiscal year.

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

all your hardworking clerks for the support and counsel over these past three years.

This will be our last year together, so I look forward to working with the Subcommittee to make it one of the best ever.

As you all know, we are in the middle of the longest economic expansion in our

nation’s history. As a result, we are in an era of unprecedented budget surpluses.

And I think all of us want this to continue for many years to come.

We are requesting a budget that covers our everyday chores, like taking the Census, advancing U.S. trade, and protecting marine resources. But we also are requesting $875 million in new, strategic investments that will help us do our job better, and prepare for the future.

In my opinion, these investments are not only consistent with President Clinton’s priorities, but they also reflect many of your priorities in the Congress. All told, our budget calls for $5 billion next year, down 37 percent from this year’s $8.5 billion budget. Of course, the decline is because the bulk of the work for Census

2000 is being done right now, in the current fiscal year. I might add that we are

on track for completing the Census on time, which in no small measure is due to

the support of the Congress. For that we thank you. To complete the work, we are requesting $393 million in fiscal year 2001, for processing and distributing the data, and for closing down local census offices.

To be honest, I have prided myself on keeping a lid on our budget. Of course, we

have had to request substantial sums to cover the Census. But our core budget has

remained fairly constant at about $4 billion for the last few years.

But the time has come to invest in the future: for promoting exports and enforcing

our trade laws, for delivering high quality services, and for helping communities adjust to economic forces.

In my opinion, this is a very prudent budget that, despite the increase, will pay

big dividends in the long run.

Let me briefly highlight some of our proposals.

First are investments for accelerating the E-Commerce Revolution. Obviously, ECommerce is the growth engine of the future. We’ve never seen anything like it before. In my three years as Secretary, I have watched it grow from hardly a decimal

point in world economic statistics, to what will be a trillion dollar business in a few

years.

But this revolution is not without its challenges. All of us got the wake up call

a few weeks ago that showed how vulnerable the Internet is to cyber attacks. President Clinton’s meeting with industry, and your Subcommittee hearing last week,

clearly underscore the need for tighter Internet security. While our information

economy is strong and resilient, we must work together with the private sector to

develop solutions to these problems.

Obviously, it is good business practice to do so to make sure that public confidence

in our economy remains.

In our budget, we are proposing $76 million to work on the problem, including

$50 million for an institute to begin Internet security R&D. It will be housed at

NIST and will involve the private sector.

To fully exploit the Internet’s potential, everyone needs to be plugged into the revolution.

So we are seeking $175 million to help narrow the digital divide, and to promote

E-Commerce.

We are requesting: $50 million for NTIA to increase computer use in the home;

a tripling in NTIA’s Technology Opportunities Program to $45 million; and $23 million for EDA to install broadband technology in rural communities and distressed

areas, where high-speed Internet access is as vital as good roads and bridges.

As we are often reminded—accurate measuring of the economy is an absolutely

vital government function. So we are seeking $29 million for tracking E-Commerce

growth, and for enhancing our statistical infrastructure.
5

Next, we are seeking $54 million to promote economic development in our Native

American communities. Turning things around for Native Americans is a key goal

of President Clinton’s New Markets program.

We also are requesting $28 million in new funding for Minority Serving Institutions to help them educate more scientists and engineers. NOAA and NIST will administer the funding.

Another community struggling to move ahead is the Mississippi Delta region,

where unemployment rates are double and triple the national average. We are asking Congress for $10 million as part of a government-wide effort to revitalize this

multi-state area.

As you know, NOAA makes up the lion’s share of our budget. We are requesting

nearly $2.8 billion for NOAA.

Let me highlight a few of the new investments we’re requesting. There’s $376 million in new money for protecting the environment. Much of this supports the President’s Lands Legacy initiative, which is one of the greatest efforts to save our natural resources since Teddy Roosevelt was President.

We will be working on a number of fronts. There’s $100 million for a new Coastal

Impact Assistance Fund, and a $93 million increase in Coastal Zone Management

grants.

Our marine resources are a top priority. Your support on this is extremely important as we negotiate with other nations, and work to protect these resources.

We are requesting $60 million so America can continue to honor its commitment

to the 1999 Pacific Salmon Agreement. We also want a $10 million increase for our

National Marine Sanctuaries, which is nearly double what we received this year.

In other areas, we request: $12 million to expand efforts to stop declines in a

number of endangered species; and $10 million to help fishermen deal with overfished waters.

Predicting the weather and maintaining the largest non-military fleet of satellites

in the world are key priorities. We are seeking $100 million to finish modernizing

the National Weather Service, and for maintaining our satellite systems.

And we need $28 million as part of a multi-year effort to improve forecasts of El

Nin ̃ o, and other climate events.

In the area of trade, we are requesting $72 million. Despite our past successes

in expanding trade, we still have a nagging deficit. Obviously, one of the main reasons for that is our strong economy, and strong demand for imports. But in my opinion, we can do more to help shrink the deficit.

Bringing China into the WTO obviously would help. A quarter of humanity lives

in China, but many of their markets are now closed to exporters.

By granting China permanent normal trade relations, we would gain better access

to many markets... from agriculture to telecommunications. And as a member

of WTO, China for the first time will have to play by global trade rules.

To make sure that it does, we also are requesting $21 million to get more aggressive about enforcing our trade laws, and our agreements with other nations. Last

year, we did a great job on steel dumping. But given the sheer volume of our exports

and imports, we need more resources to remain effective.

To be frank, how can we expect the American people to support us on trade, if

they see we aren’t doing a good job of policing our agreements?

We can trust our trading partners, but we must verify that our trade deals are

being lived up to. So, for the first time, we plan to put trade compliance people in

China, Japan, and Korea. This alone will help with about half the trade agreement

problems businesses face.

There’s $16 million, also, for promoting environmental exports, and exports by

small manufacturers. And we are proposing $35 million to help communities adjust

when a plant closes due to trade, or other economic shocks.

The last area I want to mention is management. Without a doubt, the number

one challenge for government in the years ahead is to deliver services more efficiently. One way of doing that is making government e-ready.

For several years now, we have asked for money to re-wire our building with optical fiber, so we could become a truly Digital Department. With fiber, our network

would operate ten times faster than it does today. Ten years ago people could wait

overnight for an urgent letter. But to get the job done today, people need the information delivered instantly to their computers.

As the first Commerce Secretary of the Internet Century—and the longest serving!—I strongly urge the subcommittee to provide the $6 million we need to rewire

the building. It is absolutely essential.

We also are requesting funds for a number of critical building projects, notably

for NOAA and the Census Bureau.
6

We are very big on other good management practices. In the last two years, we

have improved security for our workers, property and information. And for the first

time, we have received clean financial statements from all the bureaus. And, we

need to continue to implement PTO’s reforms passed last year.

And, finally, let me add that as part of a supplemental request, we now have a

plan on the table to close down NTIS, which has become outdated by the Internet.

In my opinion, our plan would maintain public access to the scientific and technical

information NTIS distributes, and minimize the impact a closure would have on federal workers.

Mr. Chairman, that completes my brief outline of our 2001 budget request.

I am prepared to answer your questions.

Senator GREGG. Thank you, Mr. Secretary.

We have appreciated your forthrightness before this committee

over the last couple of years and have enjoyed working with you.

I think you may be a little premature in your estimation that you

will not be before the committee again. There may be other issues

that come up that we would love to hear from you on, and hopefully, we will have a chance to do so.

HOME INTERNET ACCESS PROGRAM (HIAP)

I would like to focus initially on all the various initiatives in, for

lack of a better word, the e-commerce area. It appears to be sort

of a shotgun approach where almost every agency has thrown in

a few million and in some cases, tens of millions of dollars, of requests and put ‘‘e-commerce’’ on them. It almost looks like it is an

IPO exercise, where you change the company’s name and put

dot.com behind it and ask for a filing which gets you all sorts of

money in the marketplace.

What I would like to do is try to sort out what you are proposing

here and especially sort it out in the context of what other agencies

are doing to the extent that there is overlap.

Let us begin with the home Internet access proposal which as I

understand is $79 million of new grants for home Internet access

along with information infrastructure grants. Maybe you could explain that and explain it in the context of the Universal Service

Fund which has been set up and is funded by $1 billion already,

which deals with schools and libraries, some of which spins off into

this area.

INTENT OF HIAP

Secretary DALEY. The $50 million that we are requesting for the

home Internet access program is intended to supply low-income

families with connections, training, and the support which would

be necessary for full involvement in today’s information economy.

Senator GREGG. Let me stop you there. I heard the Vice President give a speech in which he said it was a new civil right—a new

civil right—that people should have access to the Internet. Is that

the policy of the administration, that this is a civil rights issue?

DIGITAL DIVIDE

Secretary DALEY. I think that if you look at what has happened

with our society and this divide, what we have phrased the ‘‘digital

divide,’’ there is no question that there is a growing gap between

our races on the accessibility and the use of this extremely important technology for people’s futures. There is no question that if
7

you are not capable of using these technologies—and there are very

few, if any, businesses left where you do not need some level of

competence at the computer and computer skills—it is going to be

very difficult to keep up with the rest of our economy.

Senator GREGG. Are you planning to put physical hardware in

homes, or are you planning to educate people?

Secretary DALEY. It is not about putting hardware into homes.

We obviously hope that the hardware ends up in the homes, because the fact of the matter is that if there is—one thing that our

digital divide study showed was not only that this gap is widening,

but where there is accessibility, people will take advantage of that;

whether it is in the schools, as the E-rate has given us now in I

think 90 percent of the schools, or the libraries, people will take advantage of that.

There is no question that the marketplace is moving toward trying to get—— Senator GREGG. What are you going to do with the $50 million?

Are you going to put hardware in the homes?

Secretary DALEY. No. It is going to be a combination of working

with community organizations to get training and to get hardware

into communities. Whether it is actually put in the home or not,

it would seem to me, Mr. Chairman, that that would not be a step

within the program, to actually put hardware in the homes.

Senator GREGG. You are going to use it to train people at the

local community level in how to teach people?

Secretary DALEY. And have community organizations that can— hopefully, we can bring hardware and capabilities to them, so people can access through those organizations the use of these technologies.

Senator GREGG. Walk me through this. I am a person of low income. How am I going to interface the Commerce Department’s $50

million? How are our paths going to cross?

Secretary DALEY. We will interface within an organization at

your community level—not with the Department coming into your

home or coming face-to-face with you. This is a program that we

will work with Government——

Senator GREGG. So this is going to be a new initiative with, like,

the CAPS agencies to go out as part of their initiative, which is

today basically involved with nutrition and housing; they are now

going to, in addition, have an Internet education portfolio?

Secretary DALEY. Many local organizations are already doing

that. We had a digital summit and were visited by over 800 organizations, companies and community organizations, civil rights organizations, which very much believed that at the very local level,

their organizations have got to be providing for their people the

technologies and the training. Basically, we will deal with those organizations.

Senator GREGG. So this is not actually going to get to the lowincome person. This is going to get to the bureaucracy that is in

existence already that allegedly works with the low-income individuals.

Secretary DALEY. Well, I would say that our goal and our plan

would be to get this to the people and not have it lost in between

the Department and that low-income person. That is the goal, and
8

we would hopefully structure it in a way that we would not have

that sense when the program is reviewed by you.

Senator GREGG. This is an exploding technology. We do not know

where it is going. There are some who would argue that people who

have a television set today will have a computer tomorrow and will

have Internet access tomorrow. My question is with this dramatic

explosion in technology, which we have no idea where it is going

to end up—we are just in the infancy stage of it—why do we think

that the Federal Government with $50 million is going to be able

to accomplish what the marketplace is probably going to accomplish on its own by simply creating the demand and having a technology where the prices are dropping so radically that it is available to most people anyway who have a TV? And most people in

America do have a TV even if they are extremely low-income.

Secretary DALEY. As you say, Mr. Chairman, it may end up

where your TV is your unit. I doubt it would be the TV that you

and I have in our homes today.

Senator GREGG. It probably will be, with a cable box on top of

it.

Secretary DALEY. It may be. But it has been pretty obvious that

in this explosion, there have been a lot of people left out by the private sector. And to allow that group to grow and to continue to be

ignored by the private sector will make this gap and this divide

that we have seen over the last couple of years even worse.

Senator GREGG. Unfortunately, there are a lot of people in our

society who are left out of a lot of different areas. I would start

with education. We have an educational system that is failing a

large number of people, and we do have an obligation to try to improve that.

It seems to me to be the creation of a new program the purpose

of which is to find a home in order to address a political statement

versus a substantive problem. I do not yet hear that there is a program here to back this up that is going to do much more than just

send a bunch of money out to a bunch of different advocacy agencies which have in some instances been successful, and in some instances, simply have bureaucratic funding mechanisms. So I have

very serious reservations about this, but we can go on to another

topic, because, obviously, we may have some disagreement there.

I will turn to my ranking member for whatever statements he

wants to make and questions he wants to ask.

Senator HOLLINGS. Thank you, Mr. Chairman.

I am intrigued also by the idea of having a computer as a civil

right. The Vice President made that statement just recently at

Morgan State in Maryland, and said that every home ought to have

a computer. And then we have the Secretary of Commerce come up

here and start it.

We believe in the schools and libraries, and we put that program

in with respect to the Telecommunications Act of 1996, and we got

the education feature to connect every school and every library

across America, and we are still working on that. But as far as a

civil right, I can take you to places in South Carolina that do not

have indoor toilets, or telephones, or TVs, much less a computer.

This thing could grow like Topsy.
9

I will go along with the $19 million to help the small and medium manufacturing firms with technical assistance and e-commerce, or the $10 million for the export initiative targeted at small

and medium-sized manufacturers. Those kinds of things are fine,

but the other $100 million in here for EDA and some other grants

and whatever it is, I am going to be at the end of the phone ringing, saying I want one of those grants—you have a $1 billion program—that is a foot in the door, and I do not know where you stop

that, to get everybody a computer and get it all interconnected.

COASTAL IMPACT ASSISTANCE FUND

Specifically, I am mainly interested in NOAA. You are building

up a Coastal Impact Assistance Fund, which could really take care

of the Coastal Zone Management State grants. In fact, that is the

part of the State grants that takes care of an oil spill where you

have exploration. But you have $100 million sitting around there,

and then you cut the NOAA fleet. We have one vessel in there, and

we are supposed to get another one, but you have eliminated that,

and you have more or less eliminated NOAA’s budget; you just

leave it level-funded when we have over 100 lawsuits. Environmental groups are gathering the country around now to shut down

the fisheries, and we have all these lawsuits backed up, and we

cannot get the information, you cannot get the ships out there, you

cannot back up your position. So they have enjoined them, and

they are withholding, and what you are really doing is starting the

Department of Commerce as a sort of grant program, leaving out

the research and the expertise necessary for the fisheries and

oceans programs there—as the longest-lasting Secretary of Commerce in this century.

Can’t we just transfer that $100 million Coastal Impact Assistance Fund, just sitting down and not doing any drilling, but the environmentalists are drilling us—they are closing down the fisheries. We have all of these lawsuits backed up, and you do not even

give us the money to do the work, so we have an incompetent

NOAA. So they say, well, let us abolish that anyway. Many a Secretary has come along and tried to abolish NOAA because they do

not understand it, and they never really support it strongly. I see

that here in this particular budget request.

What is your response?

Secretary DALEY. First of all, Senator, I firmly believe that

NOAA is an integral part of this Department. It is not a side

thought of mine. I have spent a tremendous amount of time on

NOAA issues and on fish issues. There is no question about it. I

am sued repeatedly. I do not think there is an amount of money

that you could appropriate that would slow down the number of

lawsuits that we get, many of which are justified and many of

which are not.

DELAY OF NOAA FLEET

We have a strong effort within NOAA to repair the depletion of

the fisheries throughout our country, and as you know it is from

Alaska all the way down and around and back up to New Hampshire that we have problems with just about every fishery. On the

issue of the fleet, we have delayed the second boat because of a
10

problem on putting the procurement program together with the

Navy, and the Navy has backed out on working with us on that

second ship, so we have delayed, but we have only delayed the

plans for that second ship, and we believe that by the fourth quarter of 2000, the award for the first ship will be done, and hopefully,

shortly into next year, we will move forward on the plans. But the

only reason the second one is delayed, Senator, is because of the

difficulties we had with the Navy as a procurement agent; so we

have had to bring it back in.

NOAA LAWSUIT

Senator HOLLINGS. Mr. Chairman, I would hope the committee,

rather than starting a new, $100 million Coastal Impact Assistance

Fund, with money just sitting around, where we do have these lawsuits and are we not responding to them because we do not have

all that fisheries information—we have fisheries responsibilities, as

you describe, around the continent, but we are not responding, and

we need an additional research vessel rather than starting a new

Coastal Impact Assistance Fund, which is the Coastal Zone Management Act’s original intent anyway. So we have the money there,

and another $93 million, but I just cannot see that.

TOURISM

Jumping to tourism, I see $4.5 million for an—and listen to this

one—International Trade Administration’s Cultural Heritage Community Development Export Initiative. You have somebody from

the Pentagon who has gotten loose in your Department; I can tell

you that right now.

Senator GREGG. Does that have an acronym?

Senator HOLLINGS. I do not know. I cannot get that many

initials——

Senator GREGG. ‘‘ITRAVEL’’ or ‘‘IFLY’’?

Senator HOLLINGS. Yes, ‘‘ITRAVEL,’’ or whatever the heck it is.

I have just come from a primary, and I spent $5 million trying

to get reelected the year before last, and I can tell you that Governor Bush spent $10 million in my State, because I had no time

buys, and I did not have any mailings, plus the telephones, so I do

not know what $4.5 million is going to do for trade.

NATIONAL TECHNICAL INFORMATION SERVICE (NTIS)

How about the Technical Information Service, NTIS—you have

taken $4.5 million out of the Advanced Technology Program to

close down a service that is privately rendered up in Vermont. We

had that with the rural information band, the WIC Program. In

Commerce years back, we had the argument with Barron’s that if

you paid $1,000 a year, you could get it privately, but we had too

many small businesses that did not have $1,000 to subscribe, so we

put it in, and the Technical Information Service has worked out extremely well. I know that with the Internet, everybody has advanced, but everybody, as you say in the early part of your request,

does not have it. Small businesses do not have it, and many, many

others do not have it, and they do not have the infrastructure. So

it seems to me that rather than take it out of the Advanced Tech-
11

nology Program, we could just continue that, Mr. Chairman, rather

than closing it down.

Mr. Secretary, would you comment, please?

Secretary DALEY. Senator, obviously, Congress a few years ago

changed the structure of that and the focus of it and directed it to

be self-sufficient. It then had to become competitive with the private sector, which is very difficult.

NTIS FUNCTIONS TRANSFERRED TO LIBRARY OF CONGRESS

There is no question that there is a public purpose of parts of the

NTIS that should be and we have encouraged that they be taken

over by another agency, primarily the Library of Congress if that

would work. There has been a Library Commission that has made

recommendations, and we appreciate the work with them, but the

fact of the matter is that for that organization to be competitive the

way Congress wanted them to be, they were going to be in violation

of the anti-deficiency laws. We took the steps believing that there

are functions of that organization that, as I say, should continue,

but they should not necessarily continue in the Commerce Department, and that is why we recommended that the important functions that you have stated be moved to somewhere else, but

that——

Senator HOLLINGS. To the Library of Congress, to just store the

information there.

Secretary DALEY. Basically, that is what their function would be,

right, because they cannot compete—— Senator HOLLINGS. The scholars can find it, but I do not believe

any businessman has ever been caught over at the Library of Congress.

Secretary DALEY. Well, not too many of them were being caught

at our organization when they were being charged—for example,

Senator, if I could, the NTIS, when we did our digital divide report,

was costing somebody, a general citizen, $20-some if they went to

NTIS to get that report, and they could go on the Internet and get

it for nothing. That showed that their business plan was somewhat

flawed.

IIP VERSUS ATP

Senator HOLLINGS. At the new Institute for Information Infrastructure Protection at NIST, Mr. Secretary, you have research for

computer security technology. Why not at the Advanced Technology

Program, where you have matching funds? This is an outright

grant. You have four universities in it, and the probability is that

rather than attracting other universities, they know how to make

out the grant applications, they have the expertise, so you are just

going to finance it at four universities and not extend it to the

other universities, on the one hand; and on the other hand, for the

industries that would be getting into it on a maximum basis with

new technologies, you have that established program, the ATP,

rather than just starting an outright grant of $100 million—excuse

me—I think it is $50 million.

Secretary DALEY. It is $50 million that we are requesting, Senator. We believe that NIST, with their expertise and their scientists actively working with the universities and with the private
12

sector, can be the most efficient way to do this as opposed to

through the ATP program. The ATP program has been effective, no

question about it, with some long-range, high-risk investments. We

believe, based upon not only the incidents of 2 weeks ago, but just

an overall feeling, that the security of our infrastructure is most

important to be protected; that the NIST scientists and their

unique relationship with the private sector and with universities

can create a program that will be extremely helpful to the Government long-term. ATP, as we also know, has been a controversial

program at times, and you have continued to fund it at a level that

we believe is quite adequate. But NIST and their expertise, we believe, for this problem of Internet security, is uniquely qualified.

ELIMINATION OF TEXTILE PROGRAM

Senator HOLLINGS. And on the International Trade Administration, I see that you have eliminated the textile program, but you

have put one in for Native Americans. I have worked with the Bureau of Indian Affairs and Native Americans, and that $22.5 million—when you start getting into that Bureau and take a formative

program that is more needed now than ever. In the early days,

under President Kennedy, we had to have hearings and a finding

by the Cabinet that the particular item involved, before the President could take emergency action, was important to the national

security. So the Secretary of Commerce, with Defense and State,

Treasury and Labor, had Cabinet hearings and findings. In May of

1961, then President Kennedy put his seven-point program out,

and that has worked extremely well until you folks came with that

white tent and all those Republicans underneath it to ship all the

industry down to Mexico. I have lost 33,300 textile jobs. Look at

the Bureau of Labor Statistics—it is probably more now; that is an

old figure. But in my little State [South Carolina], we have lost

33,300 textile jobs.

Now, the only way that we can sustain an industry important to

the national security as was found back under President Kennedy

is with this particular cooperative research with private industry

and the Government and the textile program. So, rather than

eliminate that, I would hope that the $22 million—I will talk to

Senator Inouye, and I am sure he can help the Bureau of Indian

Affairs get that moving, if that is really what you are interested

in—but I would hope we could maintain the textile program.

Do you have any comment on that?

NATIVE AMERICANS

Secretary DALEY. We have not eliminated our textile programs.

On the issue of the Native Americans, Senator, as you know, they

have had an economic situation that has been unparalleled with

any other group of citizens, no question about it. As you mentioned,

many of the textile workers in your State and other States have

suffered over the last number of years by virtue of not only

NAFTA, but by virtue of the global competition which has become

extremely fierce in the textile industry. That is something that is

real, and we are sensitive to it, and we are attempting to keep the

opportunities for those workers in other areas, and as your State

has experienced such an explosion in other job opportunities, quite
13

frankly, that is not equalled or even matched in many other States

and surely not on the Indian reservations. Our program with Native Americans is to try to address, through EDA, a horrendous situation where their unemployment and their economic opportunities

are much, much less than any group of people, especially those in

a State as vibrant as yours, even though that industry, no question

about it, has been terribly challenged over the last couple of years.

NATIONAL TEXTILE CENTER

Senator HOLLINGS. Well, I will look at it again, but there is no

provision for the National Textile Center or for the T-squared, the

one they have at NC State. You did not request any money there.

I will yield, Mr. Chairman, and thank you.

RESCISSION CRITERIA

Senator GREGG. I want to follow up on one of Senator Hollings’

questions relative to NOAA. It seems to me that NOAA took a disproportionate hit when the 0.38 percent cut was made across the

board, as compared, for example, to Census. I am wondering why,

following up on Senator Hollings’ concerns about the way the base

budget of NOAA has been treated in the budget proposal. I also

agree with his concern that the base NOAA budget appears to be

getting short shrift here for initiatives which are basically grant

initiatives, which I also support, but which I think has to be done

in the context of a strong base budget. Why did you, in allocating

that cut, hit NOAA so hard in comparison with the Census?

Secretary DALEY. Well, the Census took a hit of about $5 million,

as opposed to if it were straight across the board, they would have

taken somewhere around $11 million. That, as we all know, is an

effort which has been very controversial, one that we believe is

moving forward, one that, however, is a massively difficult task to

undertake and will be over at the end of this year, the vast majority of it, and to give them a hit of the extra $6 million would have

been a difficult thing for them to take—pardon me, I have just

been told that it was $16 million, not $11 million, and I apologize.

We did exempt some of our most essential programs like the National Marine Sanctuaries Program, and we cut every other program except the Census by the 0.38 percent that the Congress indicated. It was determined that Census would have to have some

flexibility on where to take this money. And then we cut the other

earmarks of Congress by about 7.5 percent. There were a number

of earmarks in NOAA, and that may be the reason why they took

a little larger percent of hits than other bureaus; they have more

earmarks and more programs that were susceptible. But we tried

to exempt some of our more critical, as I said, programs, like National Marine Sanctuaries and others that we exempted. We had

a policy that was really the same and consistent with all the other

departments and other actions by Secretaries.

Senator GREGG. I understand that the flexibility was given to

you. Actually, I would have taken it out of Census. In fact, Census

has a huge amount of money, and I suspect it is going to end up

with more money than it needs if it does the program effectively;

that would have been the more practical place to apply the cut.
14

NATIONAL SECURITY COUNCIL

On the critical infrastructure issue, can you give us a little background here? It seems to me that you are basically being a front

organization for the National Security Council. A lot of the money

that comes to you is being funnelled back to the NSC, and the NSC

is managing those dollars.

My question to you is what type of control do you have over these

dollars, which are basically under the direction of the NSC, which

you are basically getting or desiring to get?

Secretary DALEY. First of all, we believe strongly that we play a

unique role in this whole debate of trying to protect our——

Senator GREGG. I accept that. I accept the premise that business

would rather deal with you than with the FBI in developing systems for protecting infrastructure. What I do not accept necessarily

is the idea that you should be a front organization for the Security

Council.

Secretary DALEY. Well, I do not think we are a front organization

for them. I think we play a unique role, no question about it, along

with our role working closely with the business community. There

is, no question, a national security/law enforcement piece to this

that is constant, and we all kind of interrelate. So I do not deny

that there is a national security role in this——

Senator GREGG. Who is responsible for the funds—who is responsible for the funds under the control of the National Security Council—you or Clarke [ed. Dick Clarke, National Coordinator for Security Infrastructure Protection and Counterterrorism]?

Secretary DALEY. We are.

Senator GREGG. Who is making the decisions on how the money

is spent?

Secretary DALEY. We make it in conjunction with Clarke.

Ms. BILMES. Senator, I would just say that out of our $76 million

request for CIP [Critical Infrastructure Protection] funding, there

is only $3 million in our request which goes to the CIAO [Critical

Infrastructure Assurance Office]. We have $60 million at NIST

[National Institute of Standards and Technology], $6.3 million at

NTIA [National Telecommunication and Information Administration] for our lead agency responsibilities, $2.2 million at PTO [Patent and Trademark Office], $4 million at NOAA [National Oceanic

and Atmospheric Administration], and there is a $3.5 million request at BXA [Bureau of Export Administration], of which $3 million goes to the CIAO. So it is a very small portion of our request

which is at issue here.

Senator GREGG. Well, there is some disagreement over that, so

what I would like to get from you, to the extent that you can get

it to us, would be an overlay of different accounts that are being

used in your Department which are at the discretion of the National Security Council—not only in your Department, but I would

like to get it in all the departments, so we can get a sense of where

this money ends up when we give it to you. Does it end up on your

desk, or does it end up on somebody else’s desk whom we have no

jurisdiction over and no oversight control over, which is obviously

our concern.
15

We have a vote on, and I do not want to have you sit here until

I come back, but there are a number of other issues which I do feel

need some explanation, so we will send you some specific questions

on those areas.

I also have reservations about this IIIP [Institute for Information

Infrastructure Protection] program, very significant reservations

about what its directive is going to be, and how it is going to coordinate, and whether it is going to overlap with other initiatives

in other agencies. I do not want to see us get into a situation where

we are creating another power center on the issue of terrorism and

the issue of cyber crime. I want to make sure everybody is coordinating here—that is a big concern that I have with the budget as

presented.

We also have other concerns with NOAA. I happen to agree with

your idea on NTIS—although obviously, Senator Hollings has some

reservations about it, I think you are making the right move there.

And I am not sure where we are going with public broadcasting.

It appears that this could be opening the door to a fairly sizable

effort, and I would like to get some idea as to what is the projected

cost that we are going to be asked to put up in order for PBS to

go digital, and what is the contribution that we are going to get

from the Corporation for Public Broadcasting to offset this. In other

words, are we going it alone, or will there be some matching funds

coming out of the Corporation for Public Broadcasting?

Those are some of the issues, and of course, I have a continuing

concern with ATP [Advanced Technologies Program]. There appears to be a fairly significant carryover in ATP, and I am wondering why we need any new dollars in that account, considering

the carryover that is coming at us.

ADDITIONAL COMMITTEE QUESTIONS

Those are some of the specific issues, and we will probably ask

you to respond in writing, or perhaps you and our staff can go over

them.

Secretary DALEY. We will cooperate quickly, Mr. Chairman, and

we will get the answer to your question on the CIAO and the critical infrastructure funding to you very quickly.

Senator GREGG. I appreciate that.

[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

PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

Question. Doesn’t the request for $79.5 million in new grants for ‘‘Home Internet

Access’’ and Information Infrastructure Grants really duplicate what is being done

through the schools and libraries program as well as other initiatives throughout

the Government?

Answer. Neither program duplicates other Federal initiatives. Each plays a

unique role in addressing different aspects of the digital divide.

Home Internet Access

The Home Internet Access program focuses on the issue of affordable access to

the Internet. The goal of the program is to increase the number of low-income families that have access to the Internet in their homes. Other Federal programs do

focus on the access issue, but with very different approaches. The E-Rate program,
16

which is administered by the Schools and Libraries Division of the Universal Service Administrative Company, provides affordable access to advanced telecommunications services for all eligible schools and libraries in the United States. The ERate provides discounts on telecommunications services, Internet access, and internal connections. This program helps schoolchildren gain access to the Internet in

their schools and helps the general public gain access through their local libraries.

However, neither the E-Rate nor any other Federal programs attempts to increase

the number of low-income families that can use the Internet in their homes.

Technology Opportunities Program

The TOP focuses on a different aspect of the Digital Divide—the issue of nonprofit

and public sector applications of the Internet and other emerging telecommunications and information technologies. Through TOP grants, rural and other under

served communities demonstrate how to provide better services to their residents.

TOP grantees use technology to help police identify suspects, to enable home-bound

individuals to receive medical care remotely, to help sick children stay in touch with

their classes, to help rural communities develop worker skills, and to help neighborhood organizations prevent urban decline.

For example, in 1997, TOP provided funds for the Virtual Campus of New Hampshire to extend the delivery of online course work, counseling, evaluation and assessment, and training for technical positions in such industries as biotechnology,

telecommunications, and electronics. The goal of the project is to apply interactive

Internet technology as a means of extending technical education that will lead to

productive employment for under served populations in New Hampshire. New

Hampshire residents are able to participate in the online courses at access points

on our college campuses and four additional pilot sites—a public library, a high

school, a public housing complex, and a community outreach center. In addition to

access to basic courses, students are able to use the Internet to interact with mentors in a variety of technology-based industries.

The TOP plays a unique role by supporting demonstration projects that serve as

national models for other communities to follow. By supporting, evaluating, and

showcasing these projects, TOP helps all communities to see what is possible, what

works and what doesn’t. As a result, when those institutions invest in computers,

software, local area networks, and Internet connections, they will be able to do so

wisely and efficiently.

NTIA has safeguards to ensure that the TOP does not duplicate the efforts of

other Federal programs. Each year, the NTIA Administrator uses the ‘‘avoidance of

redundancy and conflicts with the initiatives of other Federal agencies’’ as a selection factor in making final grant award determinations. Program staff consult with

staff at approximately 30 other Federal agencies to ensure that TOP grants do not

duplicate any of their efforts.

With specific reference to the E-Rate program, note that in the 1999 fiscal year,

TOP gave no grants to K–12 schools and only one grant to a public library. In addition, language in the TOP’s fiscal year 2000 appropriation places clear restrictions

on eligible costs for applicants that are recipients of Universal Service Fund discounts. The statute provides:

That notwithstanding any other provision of law, no entity that receives

telecommunications services at preferential rates under section 254(h) of

the Act (47 U.S.C. 254(h)) or receives assistance under the regional information sharing systems grant program of the Department of Justice under

part M of Title I of the Omnibus Crime Control and Safe Streets Act of

1968 (42 U.S.C. 3796h) may use funds under a grant under this heading

to cover any costs of the entity that would otherwise be covered by such

preferential rates or such assistance, as the case may be.

Finally, a 1999 GAO study confirmed that there were no instances of duplication

among any Federal programs, including TOP, that allow educational institutions to

use funds for technology investments.

EDA INTERNET ACCESS

Question. Has the Department looked at some of the creative ways states are wiring their towns without a major expenditure of funds? For example, in some states,

prison inmates have been wiring schools and facilities. Why should EDA be giving

out grants for this purpose? Shouldn’t this be a state and local responsibility?

Answer. EDA is just beginning to look at some of the creative ways states and

local governments are using to install fiber-optic cable in schools and other facilities.

It will give full and fair consideration to various types of proposals that economically

distressed communities propose for installing the necessary and appropriate infra-
17

structure, including equipment, that is needed for the deployment of broadband,

high-speed Internet access. Since EDA’s program responds to local needs and plans,

and given that the primary focus of the e-commerce initiative is to assist distressed

communities, and thereby their existing businesses, industries and institutions, become more technologically and globally competitive, EDA anticipates that it will

fund a broad array of creative, public-private partnerships that are based on locallydeveloped strategies and that will assure that America’s distressed communities are

connected to the Internet.

While the wiring of schools is important, this initiative will be focused primarily

on the external infrastructure and facilities that are needed beyond the walls of

schools, libraries, etc., in order to connect the whole community, and primarily the

businesses of the community, to the global markets of commerce and trade. Given

the speciality of this type of construction and equipment, e.g., wireless technology,

we anticipate that various type of systems and public/private partnerships will be

used to provide broadband deployment in a variety of distressed communities that

EDA’s program is designed to serve.

Just like other types of infrastructure—water and sewer systems, industrial

parks, highways and bridges, port facilities, skill training facilities—state and local

governments have the primary governmental interest in their construction, operation and maintenance however, some communities, especially economically distressed communities, can’t do it alone, they need help in financing their infrastructure systems because their tax base and general revenues won’t support the full

funding at the local level.

CRITICAL INFRASTRUCTURE PROGRAM

Question. Can you outline and defend the Department’s request for funds in fiscal

year 2001 under the Presidential Decision Directives 62 and 63.

Answer. Emerging threats such as weapons of mass destruction (WMD) and cyber

attack challenge traditional concepts of national security. Although the Department

of Defense plays a key role, the leadership for protecting the Nation from these

asymmetric threats rests with civilian agencies such as the Department of Commerce, the Department of Justice, and the Federal Emergency Management Agency

because of their authorities and resident expertise. A comprehensive defense demands the participation of many agencies, including those involved in law enforcement, foreign affairs, health and emergency services, and more. The Administration

has worked to define, strengthen, and coordinate each agency’s contribution to this

effort.

Two Presidential Decision Directives (PDDs) provide strategic direction. PDD–62

created a new and more systematic approach to fight the emerging threat of WMD,

clarify and coordinate the mission of the U.S. agencies charged with defeating terrorism. PDD–63 called for a national effort to assure the security of critical infrastructures. Both PDDs clarify the roles and responsibilities of the many U.S. agencies involved in the wide range of programs necessary to defend against WMD and

protect our infrastructure. The Administration developed more specific guidance for

agencies in its ‘‘Five-Year Interagency Counter-Terrorism Plan’’ and its ‘‘National

Plan for Information Systems Protection’’ which includes the establishment of the

U.S. government as a model of information security, and the development of a public-private partnership to defend our national infrastructures. The PDD–63 missions

are of particular concern to the Department of Commerce.

Presidential Decision Directive (PDD)–63

Pursuant to the PDD–63, the Critical Infrastructure Assurance Office (CIAO) was

established on May 22, 1998. PDD–63, titled ‘‘Critical Infrastructure Protection,’’ directs that a National Plan Coordination Staff (the CIAO) be formed to coordinate

the government and industry-wide efforts to implement the provisions of the PDD.

The CIAO coordinates the overall effort to write the National Plan for Information

Systems Protection (The Plan), helps agencies identify their dependencies on critical

infrastructure, conducts coordination on national education and awareness efforts,

and assists the national coordinator with legislative and public affairs. Necessary

follow-on actions to Version 1.0 of The Plan include the overarching strategy for government and industry cooperation relating to protecting infrastructures, development of a process to identify critical government systems, interdependencies between government systems, and dependencies of government systems on private sector systems.

The CIAO has initiated a partnership and outreach program to engage (1) the

critical infrastructure industries as supported by the lead agencies, (2) the business

risk management communities, (3) the mainstream business community (including

support for the National Infrastructure Advisory Council), (4) state and local govern-
18

ments, and (5) selected audiences representing the general public, including Congressional staff education. It has also developed a methodology for determining

which programs within an agency are critical, determining the interdependencies

between agencies, and the dependencies of these programs on private sector infrastructure. This methodology worked successfully in a pilot program in the Department of Commerce, and will be conducted at other agencies in the near future. Further, the CIAO is sponsoring a national education and awareness program targeted

toward increasing public understanding and participation in protection efforts. The

focus of the program will be to better inform the public about vulnerabilities resulting from interdependent networks, as well as facilitate methodologies to enhance

academic opportunities relating to computer ethics and information security.

Question. Can you provide additional information about total funds requested by

the administration throughout the Government under the blanket of these presidential directives? Can you point to any law that authorizes these activities?

Answer. There has been much interest expressed in the overall Government-wide

efforts to implement the mandates of PDD–62 and PDD–63. With respect to the latter, many Federal agencies have developed their own specific requirements and

have submitted funding requests for Critical Infrastructure Protection (CIP) activities accordingly. Overall, funding to combat terrorism has steadily increased over

the past four years—up 40 percent to $9.1 billion—while funding for new missions

such as WMD preparedness and CIP has doubled in that time. The fiscal year 2001

Budget proposes increases for each of these areas, bringing WMD defense to $1.6

billion and CIP to over $2 billion. These funds enhance ongoing efforts and launch

new initiatives to strengthen our ability to deter and respond to attacks. Attached

is a matrix reflecting Government-wide CIP funding by Department.

PDD–63 reflects a Presidential decision about how to organize the Executive

Branch to respond to critical infrastructure protection. In issuing PDDs, the President relies on his constitutional authority and existing statutory authority. Agencies

use existing authorities to carry out activities covered by PDD–63. This decision was

validated by the fiscal year 1999 Omnibus Appropriations bill, Public Law 105–277,

where Congress appropriated money for this activity.

FUNDING FOR CRITICAL INFRASTRUCTURE PROTECTION BY AGENCY 1

[In millions of dollars]

Department

Fiscal year—

1998

Actual

1999

Actual

2000

Request

2000

Enacted

2001

President’s

Budget

Agriculture ............................................................. 0.70 1.22 3.10 2.51 17.89

Commerce .............................................................. 9.35 21.81 43.18 17.75 92.10

Education .............................................................. 3.59 4.45 5.23 5.23 2.51

Energy .................................................................... 1.50 3.60 47.22 21.98 45.30

EOP ........................................................................ 0.05 0.58 0.48 0.48 0.56

EPA ........................................................................ 0.12 0.24 0.08 0.08 2.30

FEMA ...................................................................... .................... .................... 0.80 0.80 1.47

GSA ........................................................................ .................... 3.00 8.40 .................... 15.40

HHS ........................................................................ 21.85 14.39 22.11 22.11 27.60

Interior ................................................................... 1.29 1.60 2.65 2.65 1.83

Justice ................................................................... 25.61 54.09 63.80 44.02 45.51

NASA ...................................................................... 41.00 43.00 66.00 66.00 61.00

National Science Foundation ................................ 19.15 21.42 32.85 26.65 43.85

National Security ................................................... 974.56 1,185.22 1,314.94 1,402.94 1,458.91

Nuclear Regulatory Commission ........................... .................... 0.20 .................... .................... 0.25

OPM ....................................................................... .................... .................... 13.65 2.00 7.00

Transportation ....................................................... 20.33 24.88 53.50 50.68 99.34

Treasury ................................................................. 22.91 48.89 83.22 76.22 87.03

Veterans Affairs .................................................... .................... .................... 17.33 17.33 17.39

Grand Total .............................................. 1,142.00 1,428.57 1,778,54 1,759.42 2,027.25

1 Includes Protection of Federal Infrastructure and Assistance/Outreach to Private Sector.

NIST/INFRASTRUCTURE PROGRAM

Question. Mr. Secretary, this subcommittee will once again be faced with an extremely tight allocation and we must make sure that in creating new initiatives to

protect our Nation’s Critical Infrastructure that no duplication in effort occurs.
19

There are many agencies such as the FBI, NSA, CIA and others who are currently

operating information infrastructure programs. Will this I3P project overlap any current government efforts?

Answer. Institute for Information Infrastructure Protection (IIIP) will not duplicate any government information infrastructure protection programs. The complex,

extensive problem of information infrastructure protection requires close cooperation

and assignment of responsibilities among several Federal agencies, and a close partnership between the private sector and government. The unique role of the IIIP will

be to fund longer-term R&D (typically 3 years to 5 years) to develop solutions for

protecting the Nation’s information infrastructure against possible future threats, as

both the infrastructure and the threats become more sophisticated, complex, and extensive.

No other Federal agency conducts such a program. As noted in the President’s National Plan for Information Systems Protection, ‘‘in R&D and other key technical

areas, neither the private sector market demands nor agency mission objectives

fully meet the Nation’s requirements.’’ The Institute will help fill this gap by supporting R&D that companies and government agencies will use to develop new products and services to protect America’s information infrastructure.

In designing the IIIP, NIST worked closely with President’s Committee of Advisors on Science and Technology (PCAST), Office of Science and Technology Policy

(OSTP), National Security Council (NSC), and Federal agencies to ensure that IIIP’s

mission and role complements efforts in other agencies and the private sector, and

fills critical gaps in current information infrastructure protection programs. PDD

#63 and the National Plan for Information Systems Protection clearly and strongly

identify the need for continuing R&D to develop information security solutions to

protect the Nation’s information infrastructure against current and future threats:

‘‘The Federal Government shall, through its research, development and procurement, encourage the introduction of increasingly capable methods of infrastructure

protection.’’

PDD #63 assigns lead responsibility for coordination of R&D to OSTP: ‘‘OSTP

shall be responsible for coordinating research and development agendas and programs for the government through the National Science and Technology Council.’’

The plan for the Institute was developed in consultation with OSTP and NSC to

help meet the Nation’s information infrastructure R&D needs. This plan allows I3P

to meets its objectives of working effectively and productively with the many public

an private sector organizations concerned with information infrastructure protection.

The IIIP will complement the information security roles of other Federal agencies

without duplication. For example, PDD #63 assigns DoJ/FBI with the lead responsibility for law enforcement and internal security, including deterring attacks against

critical infrastructures. The IIIP will not have any direct role in law enforcement

or deterring attacks, but will fund R&D to develop new generations of information

security solutions that DoJ/FBI, other agencies, and the private sector could use to

prevent and respond to future cyber-threats.

Question. Could you please explain how duplication will be avoided and how cooperation and information sharing between agencies will work?

Answer. As stated above, NIST designed the IIIP in close consultation with

PCAST, OSTP, NSC, and other Federal agencies to ensure that the new Institute

will fulfill its mission without duplicating the work of other Federal agencies. An

interagency process exists to coordinate existing and planned Federal agency critical

infrastructure protection R&D. This process, which has operated for two years, culminates in a coordinated R&D agenda, which will be available to IAP to ensure that

the Institute’s R&D does not overlap other Federal agency R&D programs. And

NIST will continue working closely with Federal agencies, private sector leaders,

and the Institute to keep it focused on its core mission and avoid duplication of efforts.

Sharing research results from Institute-supported projects will be crucial to the

success of the program, and IIIP will ensure that both Federal agencies and the private sector are fully informed of IIIP information. Classified information (including

descriptions of strategic vulnerabilities) will not be publicly shared but will be

shared with Federal agencies and other cleared organizations as appropriate.

Question. What types of standards are being discussed and how will establishing

standards protect our critical infrastructure? What criteria will NIST use to determine who will receive grants from the Institute?

Standards

Answer. The goal of III is not to develop standards, although III-supported work

may lead NIST and other government agencies to develop standards, best practices,
20

and guidelines for both Federal and private sector information infrastructure protection.

NIST has requested a separate $5 million appropriation (‘‘C.P. Research and Development’’) to work with the private sector on developing standards, measurements, best practices, and guidelines for various information security applications,

including cryptography, security management, best security practices, and security

of supervisory systems that control building environments, manufacturing, provision

of utilities, and other tasks. The C.P. Research and Development initiative is not

directly related to IIIP. However, it is likely that III-funded R&D will become the

basis of new standards, best practices, and guidelines developed by NIST, other

agencies, and the private sector.

Examples are appended of the types of information security standards and best

practices work that NIST conducts for reference. But such work will not be funded

by IIIP.

Criteria for project selection

Projects will be funded through merit-based competitions open to U.S. companies,

consortia, research institutions, universities, and non-profit organizations. All proposals will be peer-reviewed by teams of information technology and security experts. Proposals will be evaluated on criteria including technical merit, track record

of the proposers, fit to the mission and goals of the IIIP, and anticipated impact on

National information security.

The Institute will support research in areas that are identified in close consultation with those in the private sector who manufacture, own, operate, and use information technology. The research will be conducted by those best qualified to carry

it out, whether they be in private companies, universities, government laboratories,

or other research facilities. Given the close and continuing relationship with the private sector that the Institute will have to maintain, the Administration is currently

engaged in intensive discussions with representatives from the private sector and

academia on the precise organizational structure and operational procedures for the

Institute. The private sector Partnership for Critical Infrastructure Security is also

providing its recommendations.

IIIP expects that most proposals will be funded for approximately 3 to 5 years,

with funding provided on an annual basis contingent upon successful yearly reviews

of project progress.

ADDENDUM: EXAMPLES OF NIST INFORMATION SECURITY STANDARDS, MEASUREMENTS,

AND BEST PRACTICES.

Recent Work and Ongoing Programs—Key Examples

Security ‘‘Best Practice’’ guidance identification, development, and dissemination.

Provide guidance to other agencies on how to protect their systems against hackers.

Publish guidance documents that aid industry and government in securing their

computers.

Identifying trends in the discovery of vulnerabilities in order to guide industry in

the prevention of the most common types of flaws.

Creation of a database of threats to public computer systems that points to appropriate countermeasures.

Web site that provides industry and government with computer security information on a broad variety of subjects.

Research and Development Activities—Key Examples

NIST has underway R&D activities designed to enhance the security of the Internet and the national information infrastructure in the following areas: network architectures that resist denial of service and other forms of attack; automated testing

of systems and network elements for security flaws; and secure protocols and automated testing methods for both the current and the Next Generation Internet

(IPSE).

The Advanced Encryption Standard (ES)

Standardization of interfaces to efficient and secure encryption algorithms to protect e-commerce and government transactions.

Securing electronic commerce activities through Public Key Infrastructure (P.I.)

and P.I.-Enabled Applications.

More efficient and effective methods by which to evaluate the security of commercial products against known and emerging threats.

Mobile agent systems to ensure secure use in e-commerce applications.
21

Advanced access control architectures to allow efficient and effective control of organizational resources.

Use of smart cards to enable higher security in e-commerce applications.

Healthcare Security Project.

NAP Security Specification Tool Project.

NAP Telecommunications Security Project.

Infrastructure Development and Protection

These activities are helping establish the security services needed within the

broader national information infrastructure (including the Internet) to combat hacking and other misuse.

Government P.I. Pilots

Validation of commercial cryptographic modules against the NIST Federal standard (over 100 products validated).

Work with industry and government to promote the development of a private sector IT security testing program within the United States.

FedCIRC—Development and piloting the concept and operational requirements

for a government-wide computer incident response capability. Now operational

under GSA Common Criteria Evaluation and Validation Program.

ATP

Question. ATP carried forward into fiscal year 2000 $24.5 million for grants it

could not make in the previous fiscal year. For fiscal year 2001, the Department is

requesting an additional $65 million for new grants. Mr. Secretary, what is the status of the funding provided in previous fiscal years earmarked for new grants? Answer. ATP was not able to award all of the $66 million appropriated for new

awards in fiscal year 1999. The balance carried over into fiscal year 2000 and the

Conference Report for the fiscal year 2000 appropriation provided that these funds

be used for this fiscal year’s mortgages. ATP will award $50.7 million in new awards

in fiscal year 2000 with its fiscal year 2000 appropriation.

Question. What confidence do you have that the additional funding for grants you

are requesting will be expended in the fiscal year it is appropriated?

Answer. The ATP has aggressively expanded its outreach program in fiscal year

2000 to help potential proposers, particularly small businesses, understand the ATP

selection criteria and competition structure and how to write a good proposal. As

a start, the ATP held its National Meeting in November providing several opportunities to learn more about these issues. It was a huge success with about 1,000 participants. The ATP has also intensified its state outreach effort in fiscal year 2000,

engaging the 50 governors, state technology councils, economic development organizations and university research parks. In addition, ATP has revised its outreach materials to improve their clarity. ATP expects to award $50.7 million of new awards

in fiscal year 2000 and $65 million of new awarded as requested in fiscal year 2001.

NATIONAL TECHNICAL INFORMATION SERVICE

Question. Mr. Secretary, what is the status of your proposed legislation to cease

NTIS operations? What contingency plans has the Department developed in the

event that authorization legislation is not approved?

Answer. The Department’s proposed legislation has been submitted to Committee

and Subcommittee staffs. The proposed bill has not yet been introduced on the floor.

We are urging both the Senate and the House to consider passing the legislation

in conjunction with our fiscal year 2000 Supplemental Request of $4.5 million in

transfer funds from NIST.

If our proposed legislation is not approved, NTIS is mandated to continue its functions and activities as a fee-funded entity. Under this scenario, NTIS would continue to operate, but would struggle to remain solvent.

Question. Mr. Secretary, it has been alleged to us that line offices in ITA are being

assessed for funds to cover the costs of the agency’s execution direction—despite an

appropriations line item for that purpose—could you tell us or report back to us

whether this is the case?

Answer. No, this is not the case. All funds to cover the costs of operating ITA’s

executive direction function (the offices of the Under Secretary, Deputy Under Secretary, Public Affairs, and Legislative and Intergovernmental Affairs) come from

ITA’s executive direction line item appropriation.

RESEARCH IN SUPPORT OF THE AGENCY’S PROGRAMS

Question. The increases in the fiscal year 2001 budget are not supporting the

basic mission of the agency or increased research in support of the agency’s pro-
22

grams, for example fisheries management, a major problem nationwide. Can you

comment on any concerns you may have about the failure to increase funding for

NOAA’s research nationwide?

Answer. The requested funding increases for fiscal year 2001 are within the stated mission goals of NOAA, i.e. environmental stewardship and prediction. In addition, the President’s budget request does include increases for research, particularly

in climate, mariculture, weather research, and Sea Grant. NOAA’s request for fiscal

year 2001 will begin to address some areas of critical infrastructure to enable research to continue in the future.

EMPHASIS ON FUNDING PROGRAMS

Question. Is not there too much emphasis on funding assistance programs in specific areas to the detriment of other areas of the country?

Answer. In order to further our environmental stewardship and assessment missions, NOAA strives to allocate funds in a consistent manner to address National

and regional needs. Our fiscal year 2001 budget seeks a balance in funding programs by dividing resources equitably across the country, either through a formulabased approach or based on specific needs in the region.

Various assistance programs, such as the Coastal Zone Management Program, address the needs of the majority of eligible coastal states and territories (33 of the

35 coastal states and territories).

NOAA, at times, also acts in response to natural and environmental disasters and

directs funds to specific areas of the country. For example, funding is requested as

emergency spending in fiscal year 2000 to provide assistance to Connecticut, New

York, Florida, North Carolina, Washington, Oregon, and Georgia. Assistance is necessary as a result of recent hurricane and declared fishery disasters. Our fiscal year

2001 request as well includes funds to address the outbreak of harmful algal blooms

experienced in specific regions of the country, hypoxia in the Gulf of Mexico, and

restoration of the South Florida Ecosystem.

PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

Question. Has the Department had discussions with the Corporation for Public

Broadcasting (CPB) about digital conversion and how realistic it is to expect all stations nationwide to be broadcasting digitally by 2003?

Answer. NTIA has had continuing discussions with the Corporation for Public

Broadcasting about digital conversion. These discussions have addressed the system

as a whole but have not addressed the status of individual stations. The Administration’s goal and the industry’s goals are the same; we want to ensure that all public

television transmitters are converted to digital by fiscal year 2003. As a whole, the

public television stations are making great efforts to meet the deadline. At this

point, it appears that the primary obstacle to meeting the 2003 deadline is the raising of the hundreds of millions of dollars required to complete the process.

PTFP recently received detailed digital conversion proposals from over 100 of the

175 public television licensees. These stations are requesting over $200 million in

funds that would be matched by over $260 million in non-Federal funds. The Federal amount requested includes $100 million for fiscal year 2000 and the balance

for future years. Based on industry demand for grants, we believe that if funding

is available, public stations will be able to meet the FCC’s schedule. Congress and

the Administration must deliver the Federal share of funding in order to accomplish

the conversion in a timely manner.

Question. How much is the Corporation for Public Broadcasting funding the conversion? Is all assistance for equipment conversion expected to come from the PTFP

program, or is CPB requesting funds to assist stations?

Answer. The Administration has requesting $450 million for the digital conversion

initiative which includes $355 million for PTFP and $95 million for CPB covering

fiscal years 1999–2003. Funding through PTFP will primarily be for the basic equipment necessary to pass through and transmit a digital signal. The Administration

envisions that funding through CPB will be for digital program production, development, and distribution. CPB has an appropriation of $10 million in fiscal year 2000

that requires authorization from Congress and is requesting $85 million for CPB

over fiscal year 2001–2003 as part of the initiative.
23

QUESTIONS SUBMITTED BY SENATOR PETE V. DOMENICI

BEA’S E-COMMERCE INITIATIVE

Question. Mr. Secretary, it is crucial that policymakers have the most accurate

economic data possible. This is particularly the case for budgeting. We use Bureau

of Economic Analysis (BEA) data for constructing our baseline. If this data is off,

it can have an enormous effect on our numbers.

Here’s an example. Last year, there was a notable upward revision to BEA’s wage

and salary data. If this represents persistent under-measurement, federal tax revenues would be understated by more than $70 billion over the next 5 years. This is

enormous.

I’d like to close by making an observation. Yesterday, Chairman Greenspan said

spending on economic data is one of the few types of spending he supports unreservedly. I concur and believe it is very important that BEA receives its full budget

request this year—for both ongoing operations and its new e-commerce initiative.

I believe the potential dividends would be enormous.

I am concerned that BEA’s data responsibilities are becoming even more difficult,

in light of ongoing changes in our new economy. I understand that you have proposed an initiative to enhance BEA’s understanding and measurement of e-commerce. Could you tell me a bit about this?

Answer. In recognition of the growing complexities of the economy, BEA proposed

a multi-year project to update and improve its statistical accounts. Due to budgetary

constraints, BEA is behind schedule in its plan to update and improve its economic

accounts and incorporate e-business into them. As a first step to identifying e-business, BEA will update these accounts. In fiscal year 2001, BEA will develop new

Gross Domestic Products (GDP) computer processing systems that fully incorporate

recent e-business-related improvements in the GDP accounts. This will include new

measures of computer software, new measures of electronic and other banking services, and expanded chain index information. These improvements will provide the

infrastructure needed to accurately account for e-business. In addition, BEA will

begin to address gaps in key e-business-related components of GDP, gross domestic

income, quality-adjusted prices, and international trade, improving its ability to

measure e-business and alleviating some of the serious problems plaguing the GDP

and other economic accounts.

EFFECT OF NOT FUNDING E-COMMERCE INITIATIVE

Question. What will happen if BEA doesn’t get the $3 million in e-commerce funds

it has requested for fiscal year 2001?

Answer. In order to maintain the quality of the GDP and trade statistics, BEA

would have no choice but to either decrease the frequency at which it reports updates, such as the quarterly GDP data that now is updated every month, or delay

the collection and production of other data, such as foreign direct investment data

for U.S. and foreign multinationals.

LACK OF INCREMENTAL FUNDING FOR QUALITY IMPROVEMENTS

Question. Since the Boskin Initiative in the early 1990’s, has BEA received any

incremental funding to allow it to maintain the quality of the GDP statistics in the

face of the unprecedented economic growth and the explosion of e-commerce we’ve

seen since then?

Answer. No, BEA has not. Its funding has decreased in real terms since 1993,

putting real resources this year at roughly the level provided in 1992. With about

70 percent of its funding going to personnel costs and half the remainder to computer support, BEA is now undergoing a hiring freeze to ward off a projected budget

deficit in the current year.

MAINTAINING STANDARDS WITHOUT BUDGET INCREASES

Question. Given that BEA has experienced shrinking real budget resources since

1993, how can it have kept up with the impressive standards of the Department

of Commerce as the prototype ‘‘Digital Department?’’

Answer. In past years, BEA eliminated several lower-priority programs—including leading indicators, pollution abatement and control, and regional projections—

and reallocated those resources to its core economic accounts programs. That enabled BEA to continue making progress, albeit at a slower pace than originally expected, in its plan to improve GDP and the other economic accounts. Now only its

core programs remain. Although its web-site dissemination of GDP and other data

is often praised, that dissemination is not at the state-of-the-art level. For example,
24

the massive ‘‘benchmark revision’’ release of updated GDP accounts in October 1999

(a once-every-5-years event) revealed critical weaknesses in both the estimation and

dissemination software on which BEA relies. The $3 million budget increase for fiscal year 2001 is necessary for BEA to overcome these problems.

FUNDING FOR DATA ON GLOBAL ECONOMY

Question. Demands of the newly globalized economy of the 1990’s have brought

the need for more economic data. For example, the IMF has promulgated requirements for more-detailed data on international capital flows; and the Bank for International Settlements is calling for more data on financial derivatives. Has BEA been

provided funding to respond to those new demands?

Answer. Although, BEA has not been provided with additional funding to respond

to those and other calls for new data, BEA has responded by employing its resources

to meet the request. This is not, however, a long term response and additional resources will be needed to continue this level of reporting.

EMERGENCY OIL AND GAS LOAN PROGRAM

Question. Last year the Congress enacted the Emergency Oil and Gas Loan Guarantee Program. Applicants were given less than 6 weeks during the holiday season

to find a bank and process a loan under the program. Not surprisingly, only 19 companies seeking $56 million were able to complete all of the necessary paper work

in this short period of time.

Does the Board intend to modify the regulations in order to attract applications

from more small oil and gas producers and service companies?

Answer. As background, the Emergency Oil and Gas Guaranteed Loan Program

Act was signed into law on August 17, 1999. The Guarantee Loan Board issued the

program regulations 60 days later on October 18, 1999. In recognition of the program’s ‘‘emergency’’ designation, the Board established a ten-week application window which ran from October 18, 1999 to December 30, 1999. However, when alerted

by outside stakeholders that potential applicants needed more time, the Board twice

extended the application deadline, first to January 31, 2000, and then subsequently

to February 28, 2000 to allow additional applicants to apply. In total, the application window has been open for over four months. At the close of the February 28

application deadline, the Board had received 23 applications requesting $68.2 million.

Specifically, in current market conditions, the Board has no intention of substantially modifying the program’s regulations. The Board will, however, consider

amending the regulations if market conditions change and additional application

windows are opened. Any such adjustments, however, will be made in keeping with

the Congressional mandate to provide support for sound, quality commercial transactions. It is the position of Board staff that the primary challenge for the program

is not the content of the current regulations, it is the ability to attract qualified

lending institutions.

Question. Is the Board processing the applications received to date and when does

the Board expect funding of those applications?

Answer. All applications to the program will be reviewed and processed functionally at the same time. This ‘‘batch-processing’’ approach is set up in order to balance

all applications and allocate guarantees based on comparative credit quality. Board

staff initiated the review process on the applications when received and expects to

have formal responses ready within 60–90 days of the final application deadline.

The Board understands the urgency associated with the application requests and

will work diligently to respond in a timely fashion.

Question. Why didn’t the Board process the applications received by the 1/31/00

deadline?

Answer. All applications will be reviewed and processed functionally at the same

time in order to balance all applications and allocate guarantees based on comparative credit quality.

Question. Many small companies have had difficulty identifying banks which are

interested in making smaller loans (i.e. less than $25 million)?

Answer. A necessary ingredient to the success of this type of program is the involvement of the funding party, the commercial banks. It became clear to Board

staff early into the process that most of the more significant and experienced domestic-energy lending institutions were not interested in participating. This was due to

a combination of declared factors, among others: the $10 million loan size limitation;

newness of and unfamiliarity with the program (the ‘‘fear of the unknown’’); a reluctance to deal with any government program; the requirement to retain risk on a
25

pari passu basis with the government. As a result, it has become very difficult for

potential borrowers to find willing and able lenders.

Question. Is the Board willing to simplify the process and assist companies in

identifying participating lenders?

Answer. Board staff has attempted to engage the energy lending bank market

through industry meetings, face-to-face visits and liaisons through trade associations. Despite these ongoing efforts, there remains a rather clear lack of enthusiasm

to participate.

PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

Question. Secretary Daley, I am pleased to see that the Administration’s fiscal

year 2001 budget does not again propose to terminate or significantly reduce funding for the Public Telecommunications Facilities Program (PTFP), which provides

grants to public radio and TV stations for equipment. The PTFP program was funded at $15.25 million in fiscal year 1997; Congress provided $21 million for each of

fiscal year 1998 and fiscal year 1999, and $26.5 million is approved for this year.

Mr. Secretary, I have been a longtime supporter of the PTFP because it is an important source of funding to rural states like New Mexico. PTFP grants enable local

broadcasting stations to provide quality programming to populations that are generally under served.

The budget includes $110.1 million for PTFP for fiscal year 2001, an increase of

$83.5 million above 2000. The request represents a quadrupling of the program with

the significant increase to assist broadcasters with the purchase of digital equipment as we approach the 2003 conversion date. The Subcommittee approved a $5.5

million increase for this year to assist in this conversion, but also to assist rural

broadcasters not yet ready for conversion to digital technology. How is the Department implementing the Committee’s guidance for this year?

Answer. NTIA is committed to preserving the current public television services

provided by analog stations during the transition to digital technology, especially

those stations in rural areas. The program will continue to fund the replacement

of obsolete equipment with the current appropriations. Over the past decade, however, broadcast technology has made an almost complete transition to digital. As a

result, NTIA’s funding of equipment to maintain current services almost always results in the purchase of broadcast equipment which is digital or digital compatible.

Current technology also allows stations to purchase a broadcast transmitter which

broadcasts both an analog and digital signal. Nevertheless, NTIA continues to support the purchase of pure analog equipment when such equipment is required to

maintain existing broadcast service.

NTIA’s budget anticipates considerable demand for digital conversion projects

during this fiscal year because of the mandatory date for conversion to digital transmission for all television stations. Rural stations, however, lack the large populations to raise the private funds necessary to convert to digital technology. The difficulty in obtaining matching funds for the conversion of stations in rural areas is

being addressed by the PTFP program.

To ensure that the needs of rural areas are satisfied, several grant policies for

the PTFP program have been revised to assist rural stations and their conversion

projects. For example, NTIA grant policy now recognizes that many small (often

rural) public television stations will have difficulty in raising local funds for digital

television conversion projects. Therefore, as part of the PTFP application process for

fiscal year 2000, NTIA will permit small stations to qualify for 67 percent Federal

funding for their digital conversion projects. This level of Federal funding is significantly greater than the norm of 40 percent for digital conversion projects funded by

the PTFP.

For fiscal year 2000, NTIA instituted the acceptance of multi-year applications for

digital conversion projects. The acceptance of multi-year applications will assist

smaller public television stations who cannot raise the local portion of their project

in a single year or who need more time to complete their digital conversion projects.

Multi-year applications will permit stations to spread out their digital conversion

project over several years so they can complete their digital conversion projects as

they raise local funds.

NTIA is also permitting all stations to include equipment replacement as part of

a digital conversion project. This change will help stations to begin their digital conversion projects through phased upgrade of their facilities.

In many rural states, public television stations are operated by state agencies or

state universities. Several state legislatures have appropriated funds to assist the

public television stations in their state with their digital conversion projects. State

funds often must be obligated by the end of the fiscal year, and NTIA has revised
26

its policies so that state or local matching funds obligated during the current fiscal

year for digital conversion will remain eligible for Federal funding in future phases

of multi-year projects.

NTIA also set July 1, 1999, the start of many state fiscal years, as the applicable

date for which local funds could be expended towards applications submitted for the

fiscal year 2000 grant cycle.

NTIA believes that these actions will greatly assist public television stations serving rural areas in completing their digital conversion projects as well as preserving

analog service during the transition.

Question. How is the $26.5 million approved for this year being allocated?

Answer. PTFP’s grant applications were received in February and awards will be

made in September. At this point, it is not possible to anticipate how the funds will

be allocated. NTIA does not allocate grant funds, for specific types of projects, until

it can review the applications taken as a whole and respond to station needs as contained in their requests. During the most recent cycle, NTIA awarded almost 80 percent of the $21 million in fiscal year 1999 funds to television grants, almost all of

which purchased digital equipment. The remaining 20 percent were awarded to

radio and distance learning projects.

Question. How much of the $5.5 million increase is being devoted to digital conversion? Was any of this funding used to assist rural broadcasters not yet ready for

digital conversion? Answer. NTIA anticipates that most of the additional $5.5 million will be devoted

to digital conversion projects. NTIA will ensure that the needs of rural stations are

met to preserve their analog service and help them begin the transition to digital

service. The budget increase that is requested and changes to the program’s fiscal

year 2000 grant round will help stations from rural areas in meeting the digital conversion mandate.

Question. The budget justification documents indicate that the Administration ex- pects the additional $83.5 million ‘‘to continue... assisting broadcasters with the

purchase of digital broadcasting equipment needed to meet the Federal mandate to

convert to digital transmission by 2003.’’ Am I correct that the Administration’s budget supports the basic PTFP program at approximately the existing level of

$26.5 million for the next fiscal year?

Answer. The Administration’s request for the PTFP program, both the base program and the additional funds, supports its traditional mandate—to extend public

broadcasting service to unserved areas and to strengthen the capability of existing

public radio and television stations—and assist stations with the rapid transition to

digital formats called for by the 2003 time limit. Over the past decade, broadcast

technology has made an almost complete transition to digital. As a result, NTIA’s funding of equipment to maintain current services almost always results in the purchase of broadcast equipment which is digital or digital compatible. The additional

funds are necessary to ensure that all stations purchase the basic equipment necessary to meet the Federal Communication Commission (FCC) time line for broadcasting a digital signal.

Question. How much does the Administration budget assume will be needed for

the administrative costs for the ongoing PTFP program?

Answer. The PTFP program would require $2.5 million to adequately administer

the grant program in fiscal year 2001 at the fiscal year 2000 budget level. The fiscal

year 2001 budget includes $4.1 million (less than 4 percent of the budget) to administer the PTFP grant program. This level of funding is required as the program expects a large increase (more than 80 percent) in the number of applications to be

reviewed and in the ongoing oversight of the grants awarded.

Question. Are those funds included in the salaries and expenses account for NTIA,

or are they assumed to come out of the overall $25 million provided for PTFP

grants?

Answer. Funds to administer the program are included as a separate line item

in the appropriation for the PTFP account. In fiscal year 2000, PTFP was appropriated $26.5 million, which included $1.8 million for program administration.

NTIA’s salaries and expenses account does not include funding for PTFP’s administration.

Question. The Administration again proposes that PTFP work ‘‘in coordination

with the Corporation for Public Broadcasting (CPB),’’ on digital conversion. Originally, the Administration proposed that the digital conversion program be funded

through CPB. What is the rationale for providing these funds through PTFP rather

than the larger CPB?

Answer. For the past several years, NTIA has worked closely with the CPB and

other national public broadcasting organizations to assist public television with conversion to digital broadcasting. The Administration initially proposed for fiscal year
27

1999 that CPB manage the entire digital transition program. The Administration,

however, transferred the funding for transmission equipment from CPB to PTFP in

the fiscal year 2000 budget to ensure that grants are awarded on PTFP’s competitive (need- and merit-based) basis rather than CPB’s formula-based allocation.

PTFP has a proven record of assisting public broadcasters with facilities purchases. For over 35 years, the program has funded projects that extended the delivery of public telecommunications services to over 95 percent of the American public

and strengthened the capabilities of existing public television and radio stations.

Over the past six years, the PTFP program has been funding digital equipment as

part of public television’s and radio’s funding requests.

In the 2001 Budget, the Administration has retained funding for the digital transition program in both the PTFP and CPB budgets for fiscal years 2001–2003. The

Administration still expects CPB and PTFP to work together in helping public

broadcasting complete the transition.

Question. The budget also proposes advanced appropriations of $110 million in fis- cal year 2002 and $87.5 million in fiscal year 2003 for the digital conversion program. Is the Administration’s current estimated cost for public broadcasters to make the transition from analog to digital broadcasting the $307.6 million proposed in

this budget, or are there other costs associated with this initiative?

Answer. The Administration’s budget for public broadcasting’s digital conversion initiative includes $307.6 million for PTFP and approximately $85 million for CPB

covering fiscal years 2001–2003. The PTFP program has been assisting stations

with their digital conversion, and at this stage in the digital conversion process, the

additional $392.6 million for Federal support is reasonable. The Administration’s initiative estimates that it will cost public television stations over $700 million to

meet the FCC’s May 2003 time line to begin digital broadcasts. Accordingly, stations

will contribute several hundred million dollars to match PTFP’s planned funding.

Question. Does the budget request anticipate that PTFP in making grants for digital conversion will include public broadcasting entities other than those participating in the PTFP program?

Answer. All public television stations in the United States are eligible to apply

to the PTFP program for Federal matching funds and we anticipate that, over time,

all stations will use the PTFP program to assist with their digital conversion.

Question. These grants have been characterized as ‘‘competitive,’’ but this year the

budget also indicates that these grants will also have to be matched. What criteria

does the Department plan to use in making these awards competitively? What is

the anticipated matching requirement?

Answer. The PTFP program has always been a competitive grant program that

required matching funds from grant recipients for equipment replacement projects.

Under its authorizing legislation (47 U.S.C. 390–393), PTFP can award no more

than 75 percent of the eligible project costs for equipment projects.

The criteria that the Department of Commerce uses to make awards are contained in the PTFP Final Rules as published in the November 8, 1996 Federal Register (Vol. 61., No. 218, page 57966) as supplemented in the fiscal year 2000 Notice

of Availability of Funds published in the December 23, 1999 Federal Register (Vol.

64, No. 246, p. 72225). These documents are made available to all potential PTFP

applicants through the Internet or by printed copy.

The process for selecting digital conversion awards can be briefly summarized as

follows:

—Digital conversion applications are placed into one of three priority categories

based on the availability of a digital public television signal or the cooperative

efforts of stations;

—the applications are then reviewed by a panel of at least three peer reviewers

on the basis of six evaluation criteria: applicant eligibility, financial and technical qualifications, project objectives, urgency, and participation in the project

by minorities and women;

—the program also receives input from: staff and technical assessments, State

Single Point of Contact offices, state telecommunications agencies, a national

advisory panel composed of representatives of major national public broadcasting organizations, and public comments; and

—NTIA then determines awards by applying selection factors, which include the

panel and staff reviews, type of project, priorities, whether the applicant has

any current NTIA grants that might affect the proposed project, geographic distribution of awards, availability of funds, whether the FCC is prepared to issue

a required authorization and the degree to which the slate of applications,

taken as a whole, satisfies the programs purposes as stated in the Final Rules.

The matching requirement is based on a station’s ability to raise local funds. In

the Notice of Availability of Funds mentioned earlier in this answer, NTIA estab-
28

lished a three step matching requirement for digital conversion projects. As part of

its revisions in the PTFP application process for fiscal year 2000, NTIA will permit

smaller stations, primarily in rural areas, to qualify for 67 percent Federal funding

for their digital conversion projects if they can demonstrate hardship. These stations

must demonstrate that annual cash revenues for the previous four years is less than

$2 million or the project costs are greater than the applicant’s average annual cash

revenue for the previous four years. This level of Federal funding is significantly

greater than the 40 percent Federal funding which will be the norm for digital conversion projects funded by the PTFP. NTIA will encourage other stations to reduce

their reliance on Federal funds by awarding additional credit on the scores of applications that only request matching Federal funds of 25 percent or less. The Notice

of Availability of Funds, however, pledges that NTIA will ensure that there is an

acceptable balance between stations that request a 25 percent Federal share and

those requesting 40 percent or 67 percent.

QUESTIONS SUBMITTED BY SENATOR ERNEST F. HOLLINGS

CENSUS 2000

Question. Is the Commerce Department taking any steps to get reimbursed from

the contractor who made such a grievous error, or at least a reduced rate?

Answer. The Department of Commerce is not taking any direct steps with this

incident. The Government Printing Office (GPO) is investigating this incident because the work was performed under a GPO contract issued on behalf the Department. When GPO completes its investigation, we fully expect the GPO will take the

appropriate steps, which may include reducing the payments under the contract.

GPO recently sent a letter to the contractor requesting a written explanation of why

the defect occurred and indicated the Government may reduce the invoice billing.

Question. Is there any quality control system within the federal procurement system to identify this contractor with this major error?

Answer. We have been told that the GPO will take this incident and the results

of their investigation into account in considering future print work awards. In a recent letter to the contractor, the GPO requested a written explanation of why the

defect occurred and the steps being taken to assure that this problem will not reoccur in future procurements.

Question. Will the same contractor be conducting additional mailings for the census in the future?

Answer. In addition to printing the advance letter, the contractor did complete

other Census 2000 printing work, including the experimental forms, the Update/

Leave Short Form (Spanish) for Puerto Rico, the Update/Leave Short Form

(English), and other language short forms. We have sampled these other products

and no similar defects were found. This printer is not scheduled to do any future

Census 2000 printing.

QUESTIONS SUBMITTED BY SENATOR DANIEL K. INOUYE

DEPARTMENT OF THE INTERIOR’S MARINE RESOURCE ROLE

Question. The Department of the Interior is continuing its efforts to expand its

role in the conservation and management of marine resources. While I appreciate

the additional financial resources the Interior Department is willing to dedicate to

this effort, particularly in the area of coral reefs, I am concerned about Interior’s

efforts to exert exclusive jurisdiction over these resources to the exclusion of the Department of Commerce.

For example, the Interior Department is urging the President to issue an Executive Order to extend Interior’s jurisdiction around the Northwest Hawaiian Islands,

which are part of the Northwest Hawaiian Islands Refuge Complex administered by

the Fish and Wildlife Service, out to twelve miles. I understand that the Interior

Department is considering superseding the Commerce Department’s jurisdiction

under the Magnuson-Stevens Act over fishery resources by prohibiting commercial

fishing activities in these areas. The Interior Department’s proposal has major implications beyond just the Northwest Hawaiian Islands (NWHI). Some would argue

that this is the first step toward dismantling the National Marine Fisheries Service

(NMFS). I would like to know the extent of your involvement in these discussions

and the position you are taking on Interior’s efforts to expand its jurisdiction over

marine resources.
29

Answer. There has been ongoing discussions in Hawaii and in Washington D.C.

about the Interior Department’s interest in extending management authority

around the NWHI. NOAA (e.g., Magnuson-Stevens Act, National Marine Sanctuaries Act, and Marine Mammal Protection Act) have serious concerns with the

concept, both because it could conflict with Commerce Department’s exclusive fishery management jurisdiction under the Magnuson-Stevens Act and because the

same conservation objectives can be achieved using the existing authorities of the

Department of Commerce and the Management Council. Imposing an additional and

potentially conflicting authority for managing living marine resources could negatively impact marine resource access and management.

Both the Department of Commerce and the Department of the Interior are discussing ways to improve management of living resources in the NWHI. For example,

the WPFMC is committed to implementing a comprehensive Coral Reef Ecosystem

Fishery Management Plan for the NWHI. The plan development process has involved all interested agencies and constituent groups, including the U.S. Fish and

Wildlife Service (USFWS). Imposing a different management regime under a new

management authority at this time could seriously damage progress towards constituent consensus on the conservation and management of important resources in

this area.

Background: The Department of the Interior has responsibility for two National

Wildlife Refuges (NWR) in the region. The Northwest Hawaiian Islands NWR was

designated in 1909 and consists of 1,766 acres of emergent land and 610,148 acres

of submerged lands; Midway Atoll NWR was established initially as an overlay refuge in 1988 to assist the Navy in managing its unique wildlife resources, and transferred to the USFWS in 1996. Midway Atoll NWR includes 1,549 acres of emergent

land and 296,820 acres of submerged lands. A significant portion of the refuge submerged lands are within the 0 to 3 mile state jurisdiction. For the most part, the

USFWS has not had fishery management expertise or activity in the NWHI. A limited catch and release recreational fishery has been allowed in the Midway Atoll

NWR since tourism activities began there. Until recently, USFWS also had very limited coral reef activities in the refuges, but has recently added a coral reef expert

to its Hawaii staff and advertised several additional positions.

Under the Endangered Species Act, NMFS has responsibility in the NWHI for the

protection of the endangered Hawaiian monk seal and threatened and endangered

sea turtles when they are in the water as well as other marine mammals under the

Marine Mammal Protection Act. Commercial and recreational fisheries are currently

managed under three Fishery Management Plans (FMPs): the Crustacean and Lobster, Bottomfish, and Precious Coral. NMFS, through its Honolulu Laboratory, has

been the main scientific presence doing coral reef and fisheries research in the

NWHI since the formation of NOAA in the 1970s.

While NOAA exercises fisheries management jurisdiction over managing living

marine resources in the three to two hundred mile U.S. exclusive economic zone,

NMFS and USFWS have collaborated constructively on a number of non-management related activities in the NWHI. A recent example is the NWHI debris cleanup which was led by NMFS but included significant collaboration by the State of

Hawaii, Coast Guard, USFWS, and the Center for Marine Conservation and National Ocean Services (Hawaii Humpback Whale National Marine Sanctuary).

NMFS, USFWS and other partners have proposed new joint monitoring activities

on reefs in the NWHI in fiscal year 2001. NMFS values this collaborative relationship.

The Marine Mammal Commission, the Monk Seal Recovery Team, and the NMFS

Office of Protected Resources have identified a number of issues related to existing

and planned fisheries that should be addressed to enhance the recovery of the endangered monk seal and ensure the continued protection of the NWHI outstanding

coral reef resources. These include additional no-take reserve areas where fisheries

are excluded. NMFS believes that the necessary actions could be taken by the Western Pacific Fishery Management Council under existing authority of the MagnusonStevens Act.

ENVIRONMENTAL IMPACT STATEMENT BACKLOG

Question. I am very concerned about the National Marine Fisheries Service’s

(NMFS) backlog of Environmental Impact Statements (EIS). In some cases, the

NMFS’s failure to complete EIS’s in a timely manner has led to court ordered closures of fishing areas, causing great economic hardship on domestic fishermen.

What is the Department doing to ensure that the most critical of these EIS’s are

completed? What additional resources are needed to assist you with these efforts?
30

Answer. Through NMFS, the Department of Commerce is working to complete or

revise a number of Environmental Impact Studies, including some for Northeast

scallops, west coast salmon fisheries, Alaskan groundfish, and in the western Pacific, along with Environmental Impact Studies for pelagic fish, bottom fish, crustacean fisheries, and coral reef ecosystems. The fiscal year 2001 request continues our

current level of effort for these activities.

ECONOMIC ASSISTANCE TO FISHERMEN

Question. What options are available to provide economic assistance to fishermen

who are economically harmed by the closures resulting from NMFS’s inability to

complete EIS’s in a timely manner?

Answer. Under programs administered by such Federal agencies as the Economic

Development Administration, Small Business Administration, the Department of

Labor, impacted fishermen or communities may qualify for various types of economic assistance. NMFS currently does not have programs or funding to provide direct economic assistance to fishermen for losses from a fishery closure due to an incomplete or insufficient Environmental Impact Study.

SHARK FINNING

Question. Similarly, I would like to know what options may be available to assist

fishermen who are economically harmed by the Commerce Department’s policies

which lead to area closures or the prohibition of certain fishing practices, such as

shark finning.

Answer. As in the response to the previous question, there are Federal programs

within the Economic Development Administration, Small Business Administration,

Department of Labor, etc. that could assist fishermen and affected communities as

a result of necessary prohibitions on certain types of fishing through loans, job retraining, community planning, or other forms of direct assistance. In addition, the

fiscal year 2001 request includes a new $10 million Fisheries Assistance Fund within NOAA that is available to communities around the Nation. The funds would support buyouts and cooperative research and management.

QUESTIONS SUBMITTED BY SENATOR FRANK R. LAUTENBERG

EFFECT OF E-COMMERCE INITIATIVE ON SMALL BUSINESS

Question. Secretary Daley, I understand that you have created a package of new

initiatives which are designed to accelerate the e-commerce revolution for our small

business owners. Could you elaborate on how this initiative will improve the efforts

of America’s small business owners to compete in the e-commerce driven economy?

Since this initiative covers various bureaus within the Department of Commerce,

each bureau that is affected follows:

Census

Answer. The e-commerce market is estimated to be worth more than $300 billion

annually. During calendar 2000 the Census Bureau will publish quarterly estimates

of retail sales occurring over the Internet. Although there are many large nationwide retailing companies in the United States, it is still a fact that most retailers

are small businesses. The Census Bureau data will give small retailers a reliable

indication of the magnitude of Internet selling, thereby helping them determine

whether they might enter into retailing over the Internet. During calendar 2000, the

Census Bureau will also collect data on Internet activities through its annual surveys of retailing, wholesaling, manufacturing, food and accommodations, and the

services sector. Results of these surveys will be released in early 2001. While much

of the attention to e-commerce has focused on business to consumer activity, it is

widely recognized that the largest share of e-commerce will occur in business to

business activity. The Census Bureau data will give small businesses benchmark

measures of a broad range of e-commerce activities. This information should help

small businesses contemplating entering e-commerce craft strategies about how to

operate in the Internet world.

Census Bureau plans include a $8.5 million initiative to fund a comprehensive

electronic business measurement program. This new program will keep Census economic statistics accurate and relevant, demonstrate to the business community and

policymakers that our programs are responding to fundamental changes in our economy, improve the quality of BEA’s National Income and Product Accounts, reduce

business reporting burden by 5 percent in fiscal year 2002 and 10 percent in fiscal
31

year 2003, and cut Economic Census data collection and processing costs by $4 million in fiscal year 2003.

Bureau of Economic Affairs

Funding for the e-commerce initiative will enable Bureau of Economic Affairs

(BEA) to improve and update its GDP and other economic accounts and to provide

a more accurate and comprehensive picture of economic activity, including e-commerce. BEA’s national, regional, and international accounts provide business people,

as well as governments and households, with the essential economic information

they need to make informed decisions. Our initiative will allow us to better monitor

and understand the impacts of e-commerce on small businesses, thereby, providing

government officials with the information they need to make better policy decisions

concerning small businesses.

Minority Business Development Agency

First, the Minority Business Development Agency (MBDA) is demonstrating leadership to the minority business community by using e-business practices in its internal and external operations. Because MBDA has Internet and extranet capabilities,

the Agency is able to provide both MBDA staff and the minority business community information resources to function more effectively. In addition, an advanced information technology infrastructure of hardware and software supports electronic

communications and transactions among staff, field offices, grantee organizations

and the public.

MBDA also is using information technology as the primary mechanism for creating and distributing services to minority businesses. An e-commerce course has

been developed for minority executives. Desktop software is available in selected

business development centers to provide sophisticated market research.

E-commerce tools that are being made available to support MBDA’s e-business

practices are: —The Phoenix-Opportunity databases which provide electronic matching of minority businesses with market opportunities; —The Virtual Business Centers which are online one-stop information sources for

growth industries in aquaculture, international trade, franchising and manufacturing technology; —The Resource Locator which uses geographic information systems technology to

quickly find business development organizations in a local area; and —The Emerging Minority Marketplace, which is a series of reports, maps and research tools about the fast growing minority population as a lucrative market

for minority firms.

Patent and Trademark Office

The Patent and Trademark Office (PTO) supports improvements in our e-commerce economy, including efforts of America’s small business owners, by offering

free access to patent and trademark information via the PTO web site. PTO currently offers more than two terabytes of science and technology covering all patents

issued since 1976 and more than 100 years of marketing creativity covering all

pending, registered, abandoned, canceled, and expired trademarks via its web site.

In fiscal year 2001, we will begin expanding web site offerings to ultimately provide

additional U.S. patent text and image data from 1790 to 1975. One of the primary

benefits of this proposal is that the public will have access to the same data base

content as patent examiners, thereby, giving individuals the opportunity to search

for patent and trademark information themselves. This brings access to patent and

trademark information closer to citizens and businesses who need such information

to make important business and investment decisions to successfully compete in the

global economy.

International Trade Administration

The President’s fiscal year 2001 budget for International Trade Administration

(ITA) includes an Increasing Manufacturers Exports Through E-Exporting increase

request totaling 12 FTE and $10,000,000. ITA’s Trade Development (TD) and U.S.

& Foreign Commercial Service (US&FCS) units will work together to carry out the

programs included in this initiative.

TD’s portion of this increase will fund an outreach effort to Small- and MediumSize Exporters (SMEs) to create an awareness of the opportunities e-commerce presents and to assist them to establish a web-based presence in the international marketplace. This increase will also underwrite e-commerce public/private partnerships

under the umbrella of our highly successful Market Development Cooperator Program. Thirdly, this increase will fund the development and maintenance of a web

site which will include a comprehensive database of import taxes, tariffs and other
32

regulatory data to help U.S. manufacturers determine product pricing, anticipate

and comply with foreign market entry requirements and expedite international business transactions.

This increase request builds upon pilot work that has been undertaken within

base resources. Currently, to assist SMEs to take advantage of e-commerce, TD is

working with one of our Market Development Cooperator Program grantees, the

Software and Information Industry Association, to plan domestic and international

e-commerce outreach efforts. These joint activities will take the form of seminars

directed at SMEs that will foster business-to-business exports using e-commerce.

Internationally, we plan to conduct a series of trade missions to selected markets,

with e-commerce suppliers as the participants. These missions will be coordinated

with US&FCS staff at the respective posts.

TD is in the process of developing new market intelligence reports, including

Internet use and e-commerce applications, that will review information technology

markets in countries in Europe, Latin America, Asia and Southern Africa. These reports will cover key conditions affecting the uptake of e-commerce in overseas markets and identify the best e-commerce export markets for U.S. firms, particularly

SMEs. The reports will cover issues such as national cyber laws and regulatory regimes, and highlight potential barriers to electronic commerce, such as network

pricing and bandwidth issues.

In order to help SMEs export to countries where English is not a native language,

we are working through a contractor to host a multilingual web site that will have

company and product profiles of several domestic software and telecom SMEs covered. The first languages will be English, German and Spanish. The site will allow

foreign business visitors to register and then contact the companies through specially designated officials at the respective U.S. SMEs. This structure will also allow

performance measures to be captured.

ITA is also actively working on a wide range of policy issues aimed at ensuring

that unnecessary regulatory requirements do not stifle the growth of e-commerce.

This includes active efforts in multilateral fora such as the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD),

Asian-Pacific Economic Cooperation (OPEC), the Free Trade Area of the Americas

(FTAA), and on a bilateral basis. This policy work will benefit all U.S. firms, especially SMEs.

The US&FCS budget requests will enable ITA and its units to address challenges

facing prospective SME manufacturer exporters. The advent of global connectivity

and e-commerce have created a new globalized business environment in which any

company with an Internet presence is a potential exporter. The objectives of these

projects are to reach out to smaller and less-experienced businesses, create an

awareness of the export assistance resources available, and assist those firms that

have an interest in exporting but require additional business sophistication. These

projects use a mix of traditional and web-based outreach strategies to reach new clients and provide them with the information and international context they require,

as well as basic ‘‘starter’’ approaches to help them proceed internationally.

National Institute of Standards and Technology

Research indicates that small businesses have not strategically embraced e-commerce. Over 50 percent of all supply-chain participants are small businesses, making it extremely important to trading partners that small firms be capable of using

e-commerce technology. Many experts predict that companies will likely fail if they

do not strategically transform their business processes to include e-commerce. In addition, a 1999 survey by the National Association of Manufacturers (NAM) revealed

that although 80 percent of smaller manufacturers have a web site, 75 percent do

not use the Internet for any direct sales. It also noted that over 50 percent of smaller manufacturers use the Internet less than 5 hours a week. This funding initiative

will assist small manufacturers adopt e-business by doing the following:

Manufacturing Extension Partnership (MEP) will develop and implement an outreach and adoption program. The MEP outreach program will focus on business-tobusiness e-commerce—the largest and fastest growing sector of e-commerce, expected to surpass $3 trillion annually by 2003.

The principal focus of the outreach program is the addition of approximately 200

information technology professionals to work at MEP centers throughout America

helping small businesses adopt e-business practices. These e-commerce outreach

field agents will help small businesses learn about e-commerce opportunities and

challenges, and provide hands-on training and assistance, utilizing both internal

and external resources, in all aspects of e-commerce, from the basics of Internet

communications to designing e-commerce websites to integrating complex information systems. The field agents will help small businesses understand the broad
33

range of commercial e-business solutions provided by the private sector and make

informed and appropriate choices among different private sector solution providers.

The additional field agents will help the MEP centers provide a range of services

through individual consultations with companies and group seminars and workshops.

To expand the reach and impact of the field agents, MEP will also work with

USDA’s Extension Service and SBA on its e-commerce outreach program. MEP will

develop, produce, and distribute at least 600,000 copies of an e-commerce jump start

kit to small businesses across the Nation. The jump start kit will contain fundamental information to help small businesses—many of them struggling with the

fundamentals of information technology and not even having Internet access—begin

the process of adopting e-business practices. The MEP centers, bolstered by additional information technology field agents, will help the small businesses make the

next steps toward e-business success after the companies have become familiar with

e-commerce issues through the jump start kits.

MEP will also begin work on a series of e-commerce adoption kits providing more

advanced information and e-business solutions. The adoption kits will be focused by

industry sector, addressing the specific standards and interoperability issues within

that sector for increasing levels of business-to-business e-commerce adoption, creating true supply chain integration.

The combination of jump start and adoption kits for initial broad outreach with

the hands-on help from the expanded MEP center staff provides a powerful combination of nationwide coverage and focused individual assistance.

National Telecommunications and Information Administration

The NTIA increase of $2 million is proposed for enhancing the environment of

broadband (wireless and wire line) technology. NTIA’s Institute for Telecommunication Sciences will provide broadband technology research and standards development to the successful commercialization and widespread deployment of the Next

Generation Internet (NGI)—including the economical deployment of broadband capabilities in rural and disadvantaged areas. While the deployment and operation of

the NGI will be a private sector responsibility, the U.S. Government has a significant role in the development of the enabling technologies and assuring universal access. As stewards of the Federal spectrum allocation and experts in spectrum- and

network-related research, NTIA must provide the tools that support the information

and communication needs of our public education, safety and health officials as well

as facilitate opportunities for small businesses to compete in the world economy.

The Broadband for the Next Generation Internet effort will focus on improving the

quality and performance of current services so that advanced Internet, voice, and

video services are available for all Americans.

In addition, NTIA’s Technology Opportunities Program grants include model

projects of how communities are using such networks to build economic strength

and to improve their quality of life. These projects provide the opportunities and

know-how for small businesses to flourish in the new economy.

DIGITAL DIVIDE

Question. The number of Americans who increasingly use the Internet as an economic and information tool continues to increase. What steps is the Commerce Department taking to narrow the ‘‘digital divide’’ between Americans who enjoy this

new and powerful medium and those who continue to be left out?

Answer. The Department of Commerce’s Falling Through the Net report, which

has gained widespread attention, describes a gap that separates those who have access to telecommunications—through computers, the Internet, and other telecommunication services—and those who do not. It found that those who are lowincome, Black and Hispanic, living in rural areas, and single-parent households are

less likely to have access to the information tools that are now essential for finding

a job, acquiring new skills, starting a small business, or getting lower prices for

goods and services.

The Commerce Department is committed to closing the digital divide. The Administration’s pro-competitive policies, as advocated in Department of Commerce filings

with the Federal Communications Commission, have helped to spur private investment in the infrastructure and new technologies and to reduce the price of computers and the Internet.

The NTIA will produce the Falling Through the Net report on an annual basis

($400,000), so that the digital divide can be monitored over time. In addition, NTIA

promotes ‘‘universal access’’ to the Internet through its Technology Opportunities

Program ($45 million) and the Home Internet Access program ($50 million), which

will assist under served families connect to the Internet. In addition, NTIA will
34

work with U.S. industry and other public agencies to conduct research and establish

standards to support low-cost options for deployment of broadband capabilities in

rural and disadvantaged areas ($2 million).

The Economic Development Administration’s program ($23 million) to deploy

broadband capabilities in distressed areas will provide public works grants to build

the infrastructure needed to access the Internet in under served communities.

These programs combined with the myriad of private sector initiatives are helping

to close the digital divide.

CHINA—INTELLECTUAL PROPERTY

Question. China may soon ascend to the World Trade Organization and Congress

will have to decide whether to grant Permanent Normal Trade Relations to China.

Perhaps one of the most important issues affecting American business will be the

protection of American intellectual property. What strategies are in place to protect

our intellectual property interests as we participate in the new markets of China

and other emerging economies?

Answer. We are already preparing for the monitoring and enforcement effort required to ensure China and other trading partners abide by the World Trade Organization (WTO) commitments in intellectual property protection. The President’s fiscal year 2001 budget requests Congress to appropriate $22 million for new compliance and enforcement resources at the Commerce Department, Office of the U.S.

Trade Representative, Department of Agriculture and other branches of government

with enforcement responsibilities. China WTO compliance will be a prominent feature of this enhanced monitoring and enforcement effort.

At the Commerce Department, we plan to triple Commerce’s China office in size

and to increase our Trade Compliance Center’s resources as well. We plan to assign

compliance staff to be posted in China, both to work with U.S. businesses and with

the Chinese government. We plan an extensive monitoring effort of China’s WTO

accession protocol. For example, we plan to designate specific individuals in Washington and at our embassy in Beijing responsible for specific parts of the agreement—someone will be responsible for monitoring the intellectual property aspects

of the agreement. We will work closely with United States Trade Representative

(USTR) and the interagency process, to enhance participation in WTO committees

in Geneva overseeing WTO implementation to ensure that when our monitoring effort finds problems, these problems can be acted upon immediately, including initiating WTO consultations or WTO dispute settlement as necessary. All these plans

are contingent upon Congressional approval of this part of the President’s budget

request.

We will involve U.S. exporters, large and small, in our monitoring efforts through

trade associations, District Export Councils, our Commerce Department and SBA offices around the country, the U.S.-China Business Council, the American Chambers

of Commerce in China, labor organizations, and other non-governmental organizations. We will have a China compliance hotline on the web. This endeavor is intended to identify and resolve every possible compliance violation.

We will continue to use the full range of U.S. trade laws, including Special 301,

to ensure that U.S. technology-based and creative industries are guaranteed adequate and effective intellectual property rights protection, and fair and equitable

market access, worldwide. Under Special 301, the Executive Branch must identify

annually those countries that deny adequate and effective protection for intellectual

property rights or deny fair and equitable market access for persons that rely on

intellectual property protection. Countries that have the most onerous or egregious

act, policies or practices and those that have the greatest adverse impact (actual or

potential) must be designated as Priority Foreign Countries. This year’s annual review process is currently underway.

In the past, China was identified as a Priority Foreign Country under Special 301,

resulting in several Section 301 investigations. Section 301 has also been an effective tool to address unfair Chinese practices affecting U.S. exports of products that

rely on intellectual property protection. Before our Intellectual Property Agreements

in 1992 and 1995 and the enforcement action in 1996, China was one of the world’s

largest producers and exporters of pirated products. Today, China has improved its

legal framework, and has substantially eliminated the illegal production and export

of pirated music and video CDs and CD–ROMS. China’s active enforcement efforts

continue with a renewed campaign initiated last fall.

China has committed to implement the Trade Related Aspects of Intellectual

Property Rights Agreement (TRIPS) immediately upon its accession to the WTO,

without a transition period. TRIPS requires that a country make available enforce-
35

ment measures and sanctions adequate to deter further infringing activity, thus, increasing our leverage for intellectual property rights enforcement.

The United States will strengthen its enforcement capabilities through the multilateral nature of the WTO. The WTO will apply a multilateral review mechanism

to monitor the implementation of all of China’s commitments, including intellectual

property protection. In previous disputes over Chinese compliance with agreements,

notably those over intellectual property protection, the United States had to act

alone. With China in the WTO, we will be able to work with 134 other members,

many of whom will be concerned about the same issues we raise and all of whom

will have the legal right to challenge China’s implementation practices and seek redress.

QUESTIONS SUBMITTED BY SENATOR BARBARA A. MIKULSKI

DIGITAL DIVIDE

Question. The Commerce Department did an excellent job in showing that a digital divide exists in America. Your report ‘‘Falling Through the Net’’ showed that

the digital divide is still widening—especially for those communities that are currently isolated or falling behind. For example, your report showed that 46 percent

of white households own computers—only 25 percent of Hispanic household’s own

computers. What is the role of the Department of Commerce in ensuring that no

American is left out or left behind in the new technologically based economy?

Answer. The Commerce Department is committed to closing the digital divide.

The Administration’s pro-competitive policies, as advocated in Department of Commerce filings with the Federal Communications Commission, have helped to spur

private investment in the infrastructure and new technologies and to reduce the

price of computers and the Internet.

The NTIA will produce the Falling Through the Net report on an annual basis

($400,000), so that the digital divide can be monitored over time. In addition, NTIA

promotes ‘‘universal access’’ to the Internet through its Technology Opportunities

Program ($45 million) and the Home Internet Access program ($50 million), which

will assist underserved families connected to the Internet. In addition, NTIA will

work with U.S. industry and other public agencies to conduct research and establish

standards to support low-cost options for deployment of broadband capabilities in

rural and disadvantaged areas ($2 million).

The Economic Development Administration’s program ($23 million) to deploy

broadband capabilities in distressed areas will provide public works grants to build

the infrastructure needed to access the Internet in under served communities.

These programs combined with the myriad of private sector initiatives are helping

to close the digital divide.

Question. What are your priorities in the budget to achieve this goal?

Answer. The Department of Commerce’s priorities to achieve the goal of closing

the digital divide include: $50 million for a public/private partnership grant program

at the Department of Commerce to expand home access to computers and the Internet for low-income families; $45 million to triple the Department of Commerce’s

highly successful Technology Opportunity Program which promotes innovative applications of information and communications technology for under served communities; $23 million through programs at the Department of Commerce’s Economic

Development Administration to accelerate private sector deployment of broadband

networks in underserved urban and rural communities; $2 million at NTIA to conduct research and establish standards to support low-cost options for deployment of

broadband capabilities in rural and disadvantaged areas; and $400,000 for NTIA to

produce the Falling Through the Net survey annually to track the digital divide.

CENSUS

Question. The 1990 census counted only 98.4 percent of the population—this was

the first year since 1940 in which coverage did not improve. The undercounting of

the minority population was the largest ever. Those who are undercounted include:

people with language difficulties; neighborhoods who don’t trust outsiders or the

confidentiality of the census; people who work more than one job and are rarely

home; and non-traditional housing arrangements (extended families, roommates,

borders, etc.). What are you doing to ensure that the census reaches those populations that have been undercounted in the past?

Answer. In fact, the problems in 1990 were even more serious. The 1990 Census

missed about three percent of residents and double counted or otherwise miscounted

almost 1.5 percent for a net undercount of 1.6 percent. From the beginning of the
36

planning process for Census 2000, the Census Bureau has focused on the vital importance of partnerships with state, local, and tribal governments, along with the

crucial partnerships we are able to form at the community and neighborhood level.

For Census 2000, we have designed the most robust partnership program in census

history in order to reach out to those populations that are often undercounted. The

Bureau has now almost 100,000 partnerships in place including, for example, a

group of school children in Georgia that have raised their own money to promote

the census by renting a billboard.

Because language is perhaps the most challenging barrier for a significant number of those in historically undercounted populations, Census 2000, questionnaires

are printed in five languages in addition to English, is the most multi-lingual census

in history. We also offer multi-lingual assistance for these five languages over the

phone via a toll free number, for those people who need it. Foreign language guides

are also available for 49 languages, and questionnaire assistance centers will be located in areas where we expect language to be a barrier to enumeration. Assistance

is also available as part of the Telephone Questionnaire Assistance (TQA) program—an easily accessible, customer-friendly service that we believe will be an effective part of our strategy to address the undercount issue in these populations.

When we first launched the TQA program it proved to be in higher demand than

the Bureau had anticipated, and we did have difficulty managing the volume of

calls. This initial difficulty has been overcome.

In addition to unparalleled efforts in the partnership programs, we are instituting

the first-ever paid advertising campaign for Census 2000. This effort, designed in

partnership with the advertising firm Young and Rubicam and its partners, includes

a national media campaign with prime-time television (both broadcast and cable),

radio and print media, and outdoor advertising. Through its partners, Young and

Rubicam has also designed an advertising effort specifically targeted to historically

undercounted populations on the national, regional, and local level. The local effort

uses community news outlets, posters, flyers, and mass transit advertising. Further,

Census 2000 has designed an early educational message targeted to hard-to-enumerate populations and a second national campaign designed to increase public

awareness of the non-response follow-up operation.

SUITLAND FACILITIES

Question. I would like to discuss the condition of the Census and NOAA facilities

at the Suitland Federal Center in Maryland. The current condition of these building

poses serious health and safety risks for thousands of federal employees. They are

ridden with asbestos and there are high levels of lead in the water so that employees have to use bottled water for drinking and don’t know if its safe for them to

wash their hands.

In addition, these buildings are over 60 years old and have received little maintenance during the past several years. Roof leaks and floods from old pipes are not

an uncommon occurrence, and ceiling tiles, possibly contaminated with asbestos fall

down on employees desks.

As you know, the Census Bureau employs over 4,000 employees at the Suitland

facilities and is the sixth largest employer in Prince Georges County. The Bureau

is extremely disadvantaged by having to carry out its work in substandard,

unhealthy conditions. Likewise, NOAA’s National Environmental Satellite, Data,

and Information Service (NESDIS) and its Satellite Operations Control Center, cannot complete their mission within these buildings.

In fiscal year 2000, there was $3 million for NOAA to plan and design a new facility and report language to direct Census to come up with a long-range plan for its

facilities. NOAA’s budget for fiscal year 2001 includes an advance appropriation for

$15 million for fiscal year 2002 when NOAA will be able to begin construction on

the new facility. Census’ budget for fiscal year 2001 includes $3.3 million to plan

and design the rehabilitation of their facilities. Both NOAA and Census have responded separately.

SUITLAND FACILITIES—CENSUS

Question. Do you agree that the current condition of the Census and NOAA facilities at the Suitland Center endanger the health and safety of the federal employees

who work there?

Answer. Current conditions at the Federal Center in Suitland, Maryland have deteriorated to the point that constant monitoring is required to be sure that employee

safety and health are not endangered. For example:

—Remedial action by GSA has failed to correct the contaminated water sources

thus, bottled water is being and will continue to be provided for building occu-
37

pants. Problems with the water are expected to persist until the entire system

is replaced.

—Census is engaging an independent environmental firm to conduct periodic air

sampling in problem areas throughout the buildings where antiquated ventilation systems do not provide adequate air circulation resulting in numerous complaints of respiratory problems. Also, microbial problems have been identified

in a number of areas as a result of leaking or improperly functioning heating/

cooling equipment.

—Ineffective heating and cooling systems have caused extreme temperatures in

numerous locations resulting in employee health issues. The extreme temperatures divert employee attention from assigned work resulting in lost productivity. Power outages often result when electric space heaters are used to provide relief to areas where the heating system is inadequate.

—The periodic rupture of water and steam pipes has caused considerable flooding

resulting in temporary relocation of employees. The repair and cleaning of affected areas results in further disruption of work and lost productivity.

—A recent sewage pipe leak in one of the buildings could have caused serious

health affects from methane gas and/or bacteria from waste, and pigeon infestation has been reported in a number of locations within the buildings.

—The facilities have been subject to repeated flooding during rainstorms because

of leaking roofs and poorly drained building expansion joints. The numerous attempts to patch the roof have been unsuccessful and problems will continue

until the facility is fully renovated and the roof replaced, not patched.

SUITLAND FACILITIES—NOAA

Yes, we agree the space NOAA occupies at the Suitland Federal Center, Federal

Building No. 4 (FB) poses a significant health and safety concern for all Federal employees who work there. The space has significant asbestos problems. In addition

to the asbestos concerns, water-testing results confirmed the presence of a harmful

substance in the water (coliforms), thereby, warranting the use of bottled water for

human consumption. Due to the age of the facility, numerous roof leaks and other

building system failures constitute threats to NOAA’s critical infrastructure activities housed in the building. DOC, NOAA and GSA are diligently working to assure

safe utilization of the building until the replacement building is complete.

SUITLAND FACILITIES—CENSUS

Question. Do you agree that the replacement or rehabilitation of these buildings

should therefore be a top priority for the Department of Commerce?

Answer. Yes. GSA publicly stated that remedial action to correct contaminated

water sources has failed and that bottled water will remain in the buildings until

such time as a new facility/water system is provided.

PCBs recently were detected in machinery, just four months after a GSA survey

indicated that the buildings had no equipment containing PCBs.

While these situations are being addressed and pose no immediate hazard, they

contribute to an overall sense of unease with the work environment which is shared

by managers and employees.

In addition, the necessary removal of asbestos in one of our major buildings has

disrupted workplaces, and contributed to low morale. And the Asbestos Management Plan implemented by GSA to prevent further asbestos contamination has seriously impeded our mission by hampering our ability to access telecommunications

wiring, install new equipment, and to troubleshoot.

SUITLAND FACILITIES—NOAA

Yes, we agree that the replacement or rehabilitation of these buildings should be

a top priority for the Department of Commerce. In fact, both NOAA and GSA have

designated this new NOAA building as a high priority with a target completion date

of fiscal year 2004. In addition to the obvious health and safety concerns, the operational requirements for the National Environmental Satellite, Data, and Information Service (NESDIS) are not being met. This facility is an impediment to all employees working for NESDIS and its Satellite Operations Control Center, making it

difficult for them to complete their mission. The GSA has determined that the construction of the new satellite operations facility is #3 on their priority list.
38

QUESTIONS SUBMITTED BY SENATOR PATRICK J. LEAHY

Question. Last year, when the Department of Commerce first proposed closing the

National Technical Information Service (NTIS), initial cost estimates ranged from

$1.35 million to $9.1 million. Now, the Administration has requested $4 million in

the supplemental for fiscal year 2000. Can you provide the Committee with an explanation of how you calculated this final figure? Will there be any additional funds

required to complete the closure? Answer. The Administration has requested a $4.5 million supplemental transfer

from NIST to NTIS. This figure represents the estimated cost of closing NTIS and

transferring the collection of scientific and technical information to the Library of

Congress, assuming the Department is allowed to begin the closure and transfer

process in midyear. The later in the fiscal year that Congressional approval is given,

the less time the Department has for placement of employees while minimizing reductions-in-force. Timely action is needed by Congress for the closure and transfer

to be accomplished for $4.5 million and be effective by October 1, 2000.

Question. In the past, I voiced my concerns that the World News Connection paid

subscription database service provided by NTIS competed directly with on-line subscription products produced by private companies. I oppose subsidizing a government service which competes directly with services provided by the private sector.

However, NTIS also provides the Federal government with the unique service of acting as a clearinghouse for scientific, technical, and other business-related materials.

How do you intend to ensure that this important function of NTIS is preserved?

Answer. The Department’s proposal will transfer the NTIS collection and bibliographic database to the Library of Congress. In addition, the plan will ensure that

Federal government agencies provide the Library with electronic copies of future

documents as well as maintain such information on their own web sites for at least

three years. The Library will be responsible for the maintenance and upkeep of the

collection and bibliographic databases. In addition, the centralized Federal Depository Library System would be continued and actually strengthened under our plan

by creating incentives for the chief information officers of each executive agency that

produces materials for the scientific, technical, and engineering (STE) collections to

notify the archivist and superintendent of documents of the availability of these

products. The chief information officer would have to report to Congress on their

agency’s compliance with these requirements.

Question. I understand that, in the absence of NTIS, Commerce will direct each

Federal agency to post its own documents on the web for a period of at least three

years. Many Federal agencies are already posting these documents. Do you have an

assessment of which federal agencies are equipped to handle the posting of documents on its own web site? How do you intend to ensure that the agencies comply

with this directive? How did you arrive at the time of only three years and how will

individuals locate documents that have been removed after three years?

Answer. The Department has not conducted an assessment of which Federal agencies are equipped to handle the posting of documents on its own web site. Under

our proposal, each agency that produces STE information must supply that information in a timely manner to the Library of Congress for permanent access, and, to

the extent possible, must provide that information through a compatible electronic

format. In addition, each agency will make its STE information available to the public for at least three years through online dissemination. The agencies’ compliance

with this directive will be ensured by requiring that each chief information officer

of each executive agency that produces materials for the STE collection report annually to Congress on his/her agency’s compliance. The Library will be responsible for

the maintenance and upkeep of the collection and, thus, would be the source of documents that have been removed from the web site.

E-COMMERCE REVOLUTION

Question. I am pleased to see that the President’s budget request includes a $175

million initiative to accelerate the e-commerce revolution. It is my understanding

that part of this initiative will be directed towards helping small manufacturers become e-commerce ready. Please provide me with details on how this funding will

benefit small manufacturers. The three bureaus that are affected have responded

as follows:

NIST

Answer. Research indicates that small businesses have not strategically embraced

e-commerce. Over 50 percent of all supply-chain participants are small businesses,

making it extremely important to trading partners that small firms be capable of

using e-commerce technology. Many experts predict that companies will likely fail
39

if they do not strategically transform their business processes to include e-commerce. A 1999 survey by the National Association of Manufacturers (NAM) revealed

that although 80 percent of smaller manufacturers have a web site, 75 percent do

not use the Internet for any direct sales. It also noted that over 50 percent of smaller manufacturers use the Internet less than 5 hours a week. This funding initiative

will assist small manufacturers adopt e-business by doing the following:

—Manufacturing Extension Partnership (MEP) will develop and implement an

outreach and adoption program. The MEP outreach program will focus on business-to-business e-commerce—the largest and fastest growing sector of e-commerce, expected to surpass $3 trillion annually by 2003.

—The principal focus of the outreach program is the addition of approximately

200 information technology professionals to work at MEP centers throughout

America helping small businesses adopt e-business practices. These e-commerce

outreach field agents will help small businesses learn about e-commerce opportunities and challenges, and provide hands-on training and assistance, utilizing

both internal and external resources, in all aspects of e-commerce, from the basics of Internet communications to designing e-commerce websites to integrating

complex information systems. The field agents will help small businesses understand the broad range of commercial e-business solutions provided by the private sector and make informed and appropriate choices among different private

sector solution providers. The additional field agents will help the MEP centers

provide a range of services through individual consultations with companies and

group seminars and workshops.

—To expand the reach and impact of the field agents, MEP will also work with

USDA’s Extension Service and the Small Business Administration on their ecommerce outreach programs. MEP will develop, produce, and distribute at

least 600,000 copies of an e-commerce jump start kit to small businesses across

the Nation. The jump start kit will contain fundamental information to help

small businesses—many of them struggling with the fundamentals of information technology and not even having Internet access—begin the process of

adopting e-business practices. The MEP centers, bolstered by additional information technology field agents, will help the small businesses make the next

steps toward e-business success after the companies have become familiar with

e-commerce issues through the jump start kits.

—MEP will also begin work on a series of e-commerce adoption kits providing

more advanced information and e-business solutions. The adoption kits will be

focused by industry sector, addressing the specific standards and interoperability issues within that sector for increasing levels of business-to-business ecommerce adoption, creating true supply chain integration.

—The combination of jump start and adoption kits for initial broad outreach with

the hands-on help from the expanded MEP center staff provides a powerful

combination of nationwide coverage and focused individual assistance.

Addendum: Examples of NIST information security standards, measurements, and

best practices

Recent Work and Ongoing Programs—Key Examples

Security ‘‘Best Practice’’ guidance identification, development, and dissemination:

—Provide guidance to other agencies on how to protect their systems against

hackers

—Publish guidance documents that aid industry and government in securing their

computers

—Identifying trends in the discovery of vulnerabilities in order to guide industry

in the prevention of the most common types of flaws

—Creation of a database of threats to public computer systems that points to appropriate countermeasures

—Web site that provides industry and government with computer security information on a broad variety of subjects

Research and Development Activities—Key Examples

NIST has underway R&D activities designed to enhance the security of the Internet and the national information infrastructure in the following areas:

—System and network architectures that resist denial of service and other forms

of attack

—Automated testing of systems and network elements for security flaws

—Secure protocols and automated testing methods for both the current and the

Next Generation Internet (IPSec)

—The Advanced Encryption Standard (AES)
40

—Standardization of interfaces to efficient and secure encryption algorithms to

protect e-commerce and government transactions

—Securing electronic commerce activities through Public Key Infrastructure (PKI)

and PKI-Enabled Applications

—More efficient and effective methods by which to evaluate the security of commercial products against known and emerging threats

—Mobile agent systems to ensure secure use in e-commerce applications

—Advanced access control architectures to allow efficient and effective control of

organizational resources

—Use of smartcards to enable higher security in e-commerce applications

—Healthcare Security Project

—NIAP Security Specification Tool Project

—NIAP Telecommunications Security Project

Infrastructure Development and Protection

These activities are helping establish the security services needed within the

broader national information infrastructure (including the Internet) to combat hacking and other misuse.

—Government PKI Pilots

—Validation of commercial cryptographic modules against the NIST Federal

standard (over 100 products validated)

—Work with industry and government to promote the development of a private

sector IT security testing program within the United States

—FedCIRC—Development and piloting the concept and operational requirements

for a government-wide computer incident response capability now operational

under GSA

—Common Criteria Evaluation and Validation Program

MBDA

MBDA’s request is to expand the Phoenix Database. The Phoenix and Opportunity Databases electronically match minority business capabilities with contract

and other opportunities. The Phoenix Database consists of minority-owned firms

that register their capabilities online through the MBDA website. The Opportunity

Database permits any individual or institution including small manufacturing centers to register procurements or other business opportunities online. The system will

automatically match firms with opportunities and provide follow-up tracking. The

databases became operational in fiscal year 1998 and are now populated with more

than 40,000 firms. For the short history of the system, the results have been positive.

State and local governments have many available opportunities to enrich the business community. MBDA is seeking the participation of these governments to increase the database population of registered opportunities and vendors. By recruiting state and local governments to participate, the accompanying databases containing minority vendors will result in the expansion of the Phoenix database by

250,000 names. MBDA’s in-house computer program is designed to permit data

entry personnel in MBDA’s five regional offices to call and confirm information from

these businesses and update the records with electronic mail addresses.

Limited resources and the physical absence of MBDA in many parts of the country have necessitated a system to make accessible business information to the national minority business community.

International Trade Administration

The President’s fiscal year 2001 budget for ITA includes an Increasing Manufacturers Exports Through E-Exporting increase request totaling 12 FTE and

$10,000,000. ITA’s Trade Development (TD) and U.S. and Foreign Commercial Service (US&FCS) units will work together to carry out the programs included in this

initiative.

The US&FCS is ITA’s first line of outreach to SMEs and provides assistance to

SMEs through its network of domestic and foreign offices. Through the 2001 budget

requests, the US&FCS is intending to both broaden its outreach and enhance its

assistance to SMEs primarily through e-commerce initiatives. The US&FCS works

with all SMEs and helps them determine if and where export opportunities exist

for their products and/or services.

—E-commerce is the foundation of the US&FCS request because it is a genuinely

new and transforming method of service delivery that responds directly to the

many historical and structural reasons SME manufacturers do not aggressively

pursue international markets. These reasons include: geographic distance, travel costs, additional time and cost perceived for international transactions, dif-
41

ficulty in identifying and evaluating overseas business partners, perceived risk,

habitual focus on the local U.S. market, and cultural barriers and differences.

—E-commerce, is an ideal medium in which to expand services to small and medium-sized businesses and increase exports. E-commerce provides the needed

support to the US&FCS’s unique global network capacity with an information

technology system that provides an expansive and effective client management

database, office automation support, and a worldwide electronic mail network

that links all field offices and headquarters. The US&FCS website is now being

upgraded to include on-line ordering and delivery of products and services, automated market research and trade lead distribution and easier access to counseling and assistance. E-Commerce type products include:

—a virtual trade show, E-Expo, which already has nearly 700 clients and has

received 90,000 hits on the Internet from around the world since its launch

in September 1999;

—a push technology project to push key market information to 200 SMEs that

first provide a customize interest profile of markets and sectors they wish to

penetrate overseas;

—Video Gold Keys which allow companies in different countries to communicate

on desktop computers. Video Gold Keys offer a low cost, low risk opportunity

to meet trade partners overseas, a particularly critical concern for small companies;

—Webcast programs, which are broadcast over the Internet and are designed

to target the information needs of U.S. manufacturing exporters. Webcasts

can be ‘‘on-demand’’ events—meaning that they are available 24 hours—7

days a week for viewing by interested companies; and

—global satellite video-conferences such as Video Market Briefs and E-Commerce Export Seminars.

—The US&FCS budget request will enable ITA and its units to address challenges facing prospective SME manufacturer exporters. The advent of global

connectivity and e-commerce have created a new globalized business environment in which any company with an Internet presence is a potential exporter.

The objectives of these projects are to reach out to smaller and less-experienced

businesses, create an awareness of the export assistance resources available,

and assist those firms that have an interest in exporting but require additional

business sophistication. These projects use a mix of traditional and web-based

outreach strategies to reach new clients and provide them with the information

and international context they require, as well as basic ‘‘starter’’ approaches to

help them proceed internationally.

—The US&FCS will host, with assistance from our partners and other units within ITA, a series of conferences to promote export assistance programs and services, disseminate information on how e-commerce is affecting exporting and

making it easier for the small manufacturer to communicate knowledge of the

benefits of exporting (e.g., greater profits, job creation, increased plant/resource

utilization), and instill a global perspective to SMEs.

Our Trade Development unit will fund an outreach effort to small- and mediumsize exporters (SMEs) to create an awareness of the opportunities e-commerce presents and to assist them to establish a web-based presence in the international marketplace. This increase will also underwrite e-commerce public/private partnerships

under the umbrella of our highly successful Market Development Cooperator Program. Thirdly, this increase will fund the development and maintenance of a web

site which will include a comprehensive database of import taxes, tariffs and other

regulatory data to help U.S. manufacturers determine product pricing, anticipate

and comply with foreign market entry requirements and expedite international business transactions.

TD is in the process of developing new market intelligence reports, including

Internet use and e-commerce applications, that will review information technology

markets in countries in Europe, Latin America, Asia and Southern Africa. These reports will cover key conditions affecting the uptake of e-commerce in overseas markets and identify the best e-commerce export markets for U.S. firms, particularly

SMEs. The reports will cover issues such as national cyber laws and regulatory regimes, and highlight potential barriers to electronic commerce, such as network

pricing and bandwidth issues.

In order to help SMEs export to countries where English is not a native language,

we are working through a contractor to host a multilingual web site that will have

company and product profiles of several domestic software and telecom SMEs covered. The first languages will be English, German and Spanish. The site will allow

foreign business visitors to register and then contact the companies through spe-
42

cially designated officials at the respective U.S. SMEs. This structure will also allow

performance measures to be captured.

ITA is also actively working on a wide range of policy issues aimed at ensuring

that unnecessary regulatory requirements do not stifle the growth of e-commerce.

This includes active efforts in multilateral fora such as the WTO, the OECD, APEC,

the FTAA, and on a bilateral basis. This policy work will benefit all U.S. firms, especially SMEs.

EDA INTERNET ACCESS

Question. As part of the $175 million initiative, the Administration proposes to spend $23 million to deploy high speed, broadband Internet access in distressed

urban and rural communities. How does the Department intend to distribute those

funds among the states and local areas? If there is a competitive grant process,

what will be the criteria? Does the Department have any plans to give senior citizen

communities priority consideration for funding?

Answer. EDA will implement the e-commerce initiative using its existing Public Works and Economic Development Program authority. All $23 million of the initiative funding will be allocated to EDA’s regional offices, for project invitation, selection and distribution, using EDA’s existing Public Works allocation formula. Additional factors such as broadband Internet access availability in rural and intercity

areas and interest (or lack of interest) by private service providers may also be considered in making this allocation.

Funding will be available to all entities eligible under EDA’s current economic distress criteria, based on unemployment, per capita income, and other special need.

Special emphasis, however, will be placed on mitigating broadband Internet access

gaps as characterized by the ‘‘digital divide.’’ Proposals will have to arise out of a

local planning process, including processes developed for other Federal programs.

EDA headquarters will set policy for the initiative and, as part of its normal oversight of the regions, review projects selected to make sure they are appropriate for

the demonstration, but we do not anticipate a headquarters role in the project selection process itself.

EDA has no plans to give senior citizens priority funding consideration; funding

prioritization will be based on existing program criteria (i.e., levels of economic distress) regardless of other demographic characteristics. EDA’s programs, including

the proposed e-commerce initiative, are geared toward creating long-term economic

development opportunities and diversified local economies.

DIGITAL DIVIDE

Question. I understand that the Administration proposes to spend $50 million on

a Home Internet Access initiative for a new grants program that would provide lowincome individuals and families with access to the Internet and training. Please provide me with details on how the Department intends to implement this program.

Answer. The Administration has proposed a new $50 million Department of Commerce pilot program to expand access to computers and the Internet for low-income

families, and to give these families the skills they need to use these new Information Age tools effectively. The goal of the Home Internet Access Program (HIAP) is

to increase the number of low-income families that have access to the Internet in

their homes.

NTIA will disburse Federal funds as competitive grants to intermediate organizations—non-profit entities; state, local, and tribal governments; and colleges and universities—to develop local programs for providing home-based access to families in

need. The grants will require non-Federal matching funds.

This new program will build on the lessons of the highly successful Technology

Opportunities Program (TOP). In particular, the HIAP will be designed around two

of the hallmarks of the TOP program; locally-driven solutions and public-private

partnerships. NTIA’s experience has shown that the most creative, innovative, and

effective solutions come not from the Federal government, but from local communities. Therefore, NTIA will challenge low-income communities—both rural and

urban—to devise solutions that best reflect their circumstances and best meet their

needs. NTIA’s experience has also shown that strong partnerships and broad community support are key ingredients in sustaining information technology projects.

The HIAP will encourage community-based partnerships and partnerships among

local organizations, academia, and private industry. In order to demonstrate the

local and private sector commitments, NTIA will require applicants to provide

matching funds. In keeping with the formulas that have proven successful in the

Public Telecommunications Facilities (PTFP) and TOP programs, applicants will be

required to provide a 50 percent (1:1) match, unless extraordinary circumstances
43

warrant a Federal share of up to 75 percent of the total project cost. In addition,

NTIA is considering requiring that significant portions of the matching funds come

from private businesses and co-payments from the individuals that receive home

Internet access.

The list of allowable uses for the awarded funds is still under discussion. As a

general guideline, costs must relate to the provision of the hardware, software, telecommunications services, training, and user support necessary to provide effective

and efficient Internet access to eligible households. NTIA will also allow grant recipients to expend funds on project administration, evaluation, and reporting of results.

NTIA will not provide direct subsidies to individuals. Because NTIA will encourage communities to innovate and experiment, NTIA will not rule out the possibility

that a grant recipient would be allowed to provide direct subsidies. In that event,

NTIA would take the necessary steps to ensure that subsidies were used for the

purposes of establishing and maintaining home Internet access.

Finally, NTIA will use the data from the Falling Through the Net survey to target

the program’s resources and as an ongoing performance measurement tool. The survey data will identify the communities and populations most in need of assistance,

initially and on an ongoing basis.

SAFE HARBOR AGREEMENT ON PRIVACY

Question. Please provide me with details on the Administration’s progress in

reaching an agreement with the European Union on privacy and personal data sharing and the implications of this tentative accord for America’s businesses. Will this

agreement apply to information collected by Web sites? How will this agreement impact trade between the United States and the EU?

Answer. The European Union (EU) Directive on data protection prohibits transfers of personal data to third countries such as the United States unless adequate

privacy protection is provided. Because we recognized that disruptions in personal

data transfers could have serious implications for commerce between the United

States and Europe, we started an informal dialogue with the European Commission

two years ago to try and bridge gaps between our different approaches to privacy

protection. Working with the Commission, we developed the concept of the safe harbor, under which U.S. companies that wish to would be able to decide voluntarily

to participate in the safe harbor and do so by self-certifying to the Department of

Commerce.

The U.S. Department of Commerce and European Commission have reached a

tentative agreement on implementation of the proposed safe harbor. The agreement

bridges the differences between the EU and U.S. approaches to privacy protection

and ensures adequate privacy protection for EU citizens’ personal information.

We are still working with the European Commission to determine the length of

the implementation period and how to properly integrate U.S. national privacy legislation into the safe harbor. The Department of Commerce has requested an adequacy finding for the Gramm, Leach, Bliley Act and the Fair Credit Reporting Act.

The Department of Commerce is also consulting officials within the U.S. Government. A meeting with private sector and consumer groups to review the agreement

was held on Friday, March 3, 2000. The European Commission is presently consulting with the Member States.

Application to Web Sites

With the safe harbor arrangements, the Department of Commerce is providing

guidance for companies that do business in Europe. U.S. Internet companies that

collect information from Europe may also rely on this guidance. We have, however,

explicitly left open the difficult questions raised by the Internet of jurisdiction and

applicable law.

Trade Impact between the U.S. and the EU

With the safe harbor accord we are providing industry on both sides of the Atlantic with the certainty and predictability that is needed to run their businesses. It

eliminates the need for prior approval from the appropriate EU Member State to

begin data transfers, and is expected to offer a simpler and lower-cost alternative

to compliance with the Directive, which should benefit small and medium enterprises in particular. This accord will allow billions of dollars of trade to continue

unimpeded by our different approaches to privacy.
44

SUBCOMMITTEE RECESS

Senator GREGG. Our next hearing is with the Department of Justice on Tuesday at 10 a.m., in SD–192.

I thank you, Mr. Secretary for your time. Have a good day.

Secretary DALEY. Thank you.

[Whereupon, at 11:45 a.m., Tuesday, February 24, the subcommittee was recessed, to reconvene at 10 a.m., Tuesday, March 2.]
(45)

DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED

AGENCIES APPROPRIATIONS FOR FISCAL

YEAR 2001

TUESDAY, FEBRUARY 29, 2000

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC.

The subcommittee met at 10 a.m., in room SD–192, Dirksen Senate Office Building, Hon. Judd Gregg (chairman) presiding.

Present: Senators Gregg, Domenici, Hutchison, Campbell, Hollings, Lautenberg, and Mikulski.

DEPARTMENT OF JUSTICE

OFFICE OF THE ATTORNEY GENERAL

STATEMENT OF JANET RENO, ATTORNEY GENERAL

OPENING REMARKS

Senator GREGG. We will start. I know that Senator Hollings is

probably on his way. I am sure he is on his way, as are a number

of other members who are going to participate in this hearing. But

in order to move it along, so we do not take an overabundance of

the Attorney General’s time, I think we will begin.

Rather than having opening statements, we would like to hear

from the Attorney General.

ATTORNEY GENERAL RENO OPENING REMARKS

Attorney General RENO. What I would like to do is thank you,

both of you, and you too, Mr. Morhard. We have done an awful lot

in 7 years, Mr. Chairman. And it has been, as I said 2 weeks ago,

an opportunity to work together, and I just appreciate your leadership, your constructive opposition to some of my ideas.

I just think we have an extraordinary chance in this country, the

next couple of years, and that is for once and for all end the culture

of violence in this country. We will never eliminate it, but based

on what we have done, I think if we continue we can do that. And

I pledge to you, wherever I am, that I am going to be pursuing that

effort.
46

PREPARED STATEMENT

Senator Campbell, I just salute you for your leadership on Indian

issues, and I hope we can work together in this session to make

some real meaningful difference on the reservations and in Indian

country.

So why do you not ask me questions?

[The statement follows:]

PREPARED STATEMENT OF JANET RENO

Mr. Chairman and Members of the Subcommittee, it is a pleasure once again to

appear before you to present the President’s budget request for the Department of

Justice.

This is likely my last appearance before this panel. These hearings have been a

model for the oversight process, and I want to take this opportunity to thank you

for the partnership you have forged with me, the federal law enforcement community and our state, county, and local counterparts. We have worked together to improve our Nation’s justice system and to address the very real crime problems that

have plagued our neighborhoods and communities.

Since 1993, funding for Department of Justice programs has grown by 92 percent,

including a $3 billion increase for grants to state and local criminal justice agencies.

The overall increase in funding has paid for additional federal agents and prosecutors, put cops on the beat in our neighborhoods, expanded prison capacity, provided

new crime-solving tools, improved technology, funded innovative approaches to

fighting crime, worked to secure our Nation’s borders, and helped to train and equip

first responders to address the threat of terrorism.

Your commitment to the Department and its programs has had an impact. For

the 7th consecutive year, our crime rate has fallen—for every type of crime and in

every region of the Nation. Our communities are safer than they were 7 years ago.

Yet, there is still much work to be done and new challenges to confront. This morning I would like to leave you with my thoughts about the direction we must take

to prepare for these new challenges.

The President’s fiscal year 2001 budget request recognizes the need for continued

vigilance against crime. It includes $23.4 billion for the Department—an increase

of $1.8 billion above fiscal year 2000—to combat gun violence, enhance community

law enforcement, curb the cycle of drugs and crime, battle cybercrime, respond to

the threat of terrorism, secure our borders, and fund new prisons.

COUNTERTERRORISM AND FOREIGN COUNTERINTELLIGENCE

Preventing terrorism and thwarting foreign espionage are among the most serious

challenges facing our Nation today. The Department of Justice is the lead federal

agency in the fight against terrorism. Your Subcommittee has worked with us to

provide the necessary tools to address this threat and to ensure that the Department is able to carry out this very important responsibility.

In fiscal year 2000, with your support, we established the National Domestic Preparedness Office (NDPO). You also provided significant guidance in the development

of a blueprint laying out NDPO’s role as a central coordinating office and information clearinghouse for federal assistance programs to state and local communities

with the goal of integrating and streamlining government assistance. Our blueprint

represents a deliberate, conservative effort that people will understand and support.

You also helped us to establish the Office for State and Local Domestic Preparedness Support, within the Office of Justice Programs, and to develop a process for

equipping and training state and local first responders to prepare them to handle

a terrorist incident.

The fiscal year 2001 budget request builds on the infrastructure that is now in

place in the Department to address terrorism and includes a $119.6 million increase

to fight terrorism and combat hostile intelligence activities.

We are requesting an increase of $15 million for the Counterterrorism Fund, established in response to the Oklahoma City bombing, bringing the total 2001 request for the Fund to $25 million. This funding is used to address unforeseen expenses incurred in countering, investigating, or prosecuting terrorism; to finance reward payments; and to restore the operational capacities of offices damaged by terrorist acts.

Our fiscal year 2001 request includes funding for some of the most important activities that the FBI will undertake in the future. Included are increases of $35.3
47

million for the counterterrorism/counterintelligence activities of the FBI. Specifically, we are asking for $19.1 million and 138 positions to enhance the FBI’s ability

to conduct national security investigations and thwart hostile intelligence services

operating in the United States; $3.1 million and 55 intelligence analysts to engage

in strategic intelligence analyses; $5 million to continue counterterrorism research

and development related to explosives detection and forensic science; $3.5 million

for Weapons of Mass Destruction preparedness activities, including $2.9 million for

a chem/bio helpline and hotline; $2.9 million to support state and local bomb technician training at the Hazardous Devices School at Redstone Arsenal, AL; $1.1 million

to plan and provide security for the 2002 Winter Olympic Games to be held in Salt

Lake City; and $600,000 to provide additional contract guard services for 3 additional FBI field offices.

Identifying threats to our national security is a unique federal responsibility, and

one which the FBI must be equipped to meet. With your help, I am hopeful that

we can come out of this appropriations process leaving the FBI well equipped to

meet the challenges terrorism presents.

Assuring that we are able to respond to threats of terrorism whenever and wherever they occur must include providing the FBI with adequate prosecutor expertise

in the Criminal Division and the U.S. Attorneys’ offices. Balance is critically important in the criminal justice system. The very best agent or investigator will find his

efforts thwarted if unable to request and receive specialized legal support in times

of crisis. I cannot stress too strongly how important it is that increased resources

for law enforcement agencies be accompanied by resources for our important litigation responsibilities as well. Without sufficient litigation support, the system will

break down.

The Department’s counterterrorism request also includes $185 million for the Office of Justice Program’s domestic preparedness efforts, an increase of $33 million.

I anticipate that the President will direct the transfer of primary responsibility for

the Nunn-Lugar-Domenici Domestic Preparedness Program from the Department of

Defense to the Department of Justice, effective on October 1, 2000. In anticipation

of this transfer, we are requesting $31 million for the costs associated with providing first responders with classroom training, various levels of practical exercises,

and equipment and training aids to prepare for nuclear, biological and chemical incidents. We also request $17 million for OJP’s counterterrorism technology programs.

We also request counterterrorism enhancements for OJP of $9 million for a Law

Enforcement Training program; $6 million to provide technical assistance to state

and local communities for domestic preparedness; $3 million to expand the First Responder Equipment Acquisition program, and $2 million to expand operations at the

Center for Domestic Preparedness at Fort McClellan, AL.

We request an increase of $1 million and 10 positions for the Department’s Office

of Intelligence and Policy Review (OIPR). This office is responsible for reviewing all

requests for surveillance or searches under the Foreign Intelligence Surveillance

Act. FISA applications have grown by over 80 percent since 1992, and a 1999

amendment to the FISA statute (50 U.S.C. 1801 et.seq.) expanded the types of authorized FISA applications that OIPR must review to include pen register and trap

and trace device surveillance.

Finally, for the Criminal Division, we seek increases of $210,000 for the Office of

Enforcement Operations to address victim assistance needs related to the Pan Am

103 case and provide the capacity for future terrorist-related victim assistance. In

addition, this would allow the Criminal Division to keep pace with witness service

demands and would improve its ability for special administrative measures aimed

at isolating, for investigative purposes, those indicted and convicted for terrorist-related offenses.

We are seeking $92,000 to support the Criminal Division’s Terrorism and Violent

Crime Section’s work related to the Five-Year Interagency Counterterrorism and

Technology Crime Plan, the latest update which I will transmit to you in the next

few days. This increase will fund 1 position to provide the coordination and planning

that is necessary among the Department and other agencies that participate in the

development and annual updates of the Plan.

COMBATING CYBERCRIME

The improvements in information technology and the development and proliferation of the Internet have expanded our horizons, literally putting knowledge at our

fingertips and changing the way we think and do business. The Nation’s information

infrastructure—the banking system, the stock market, the electricity and water supply, the telecommunications network and critical government services—rely on com-
48

puter networks. These systems are the foundation upon which our society functions;

and by virtue of our growing dependence on computers, they are increasingly the

target of criminals at home and abroad. As greater numbers of people develop proficiency in manipulating electronic data and navigating computer networks, and as

worldwide access to the Internet continues to expand, the opportunity for

cybercrime increases rapidly.

Two weeks ago, Director Freeh and I came before you to discuss cybercrime and

the recent attacks against popular on-line Internet sites including Yahoo, Amazon.com, ebay, E-Trade and others. As I told you at that time, we need a long-term

coordinated strategy to deal with cybercrime. I will work with you to develop and

implement a five-year plan that will focus our existing and future resources to react

and prevent cybercrimes by forging partnerships that include sharing expertise,

training, equipment and technology among federal, state and local law enforcement

officials. The strategy must address the challenges we face, both here and abroad.

The problems demand personnel and expertise at all levels—in both the investigative and prosecutorial sides—the latest cybercrime fighting equipment, and educating our young people and others about the responsible use of the Internet. And,

we must accomplish this in a manner that respects and upholds our cherished privacy and freedoms.

We appreciate your interest in and support for our requests to address

cybercrime. In fiscal year 2000, you provided a total of $107.4 million in funding

for efforts underway in the Department’s Criminal Division, the FBI, DEA, U.S. Attorneys Offices, and the Office of Justice Programs. We seek to establish a permanent cadre of experts dedicated to preventing computer crime and to prosecuting

those responsible. In fiscal year 2001, the President’s budget includes an additional

$37 million to continue the fight against cybercrime. This request will serve as the

baseline for future efforts. It will improve our capacity to address the challenges

that high technology presents, and it will shape our ability to cope with crime in

the future.

Our 2001 request includes cybercrime increases totaling $12 million for the FBI—

$11.4 million to expand the Computer Analysis and Response Teams (CART) and

to further develop the Automated Computer Examination System (ACES), a software tool that expedites the computer forensics process by scanning files from seized

computers to identify known format and executable program files; and $612,000 for

personnel to support a joint FBI-Customs Service Intellectual Property Rights Center to enhance our Nation’s ability to investigate and prosecute intellectual property

rights crimes by sharing information among agencies.

CART teams are the forensic investigators in a computer world. CART personnel

provide the specialized expertise needed to extract data from computers and network systems, conduct forensic examinations, and provide on-site support to criminal investigations that require computers as evidence. The FBI has a total of 142

trained CART examiners who supported approximately 2,000 cases during 1999. By

2001, the requirement for forensic examinations is expected to more than double the

number required in fiscal year 1999. To keep pace with this expanding workload,

we seek an additional $8.6 million and 100 additional CART examiners and $2.8

million to further develop ACES.

For the Office of Justice Programs, the 2001 request includes $15.75 million, including $8.75 million to expand training initiatives at the National White Collar

Crime Center for state and local law enforcement and regulatory agencies; $6 million to develop regional forensic computer labs; and $1 million for the Bureau of

Justice Statistics to collect computer crime and cyber fraud statistics to measure the

magnitude and consequences of computer crime.

Our new initiative to develop regional forensic computer labs recognizes the need

to establish computer expertise at the state and local level. It also addresses the

need for training and backup resources so that state and local law enforcement can

successfully conduct investigations and prosecutions of computer crimes in their jurisdictions. These labs will build on a concept that we have found to be highly successful and one which has, as its foundation, an approach involving partnership and

information sharing among federal, national, state and local organizations and agencies. One model that we have for this new program is the Regional Computer Forensic Laboratory in San Diego, California. This lab brings together expertise from

state and local representatives and government personnel, including the FBI, and

serves as a resource for the San Diego area to solve crimes involving complex computer forensics.

To ensure that there is balance within the system and adequate litigation resources to support our cybercrime investigations, we are requesting additional funding for the United States Attorneys and the Criminal Division.
49

For the U.S. Attorneys, the fiscal year 2001 budget includes $8 million to investigate and prosecute cybercrimes and to enable the vigorous prosecution of child pornography cases, including those cases involving the use of the Internet. The fiscal

year 2001 request will bring total U.S. Attorneys funding availability for cybercrime

to $12.7 million.

For the Criminal Division, we seek an additional $586,000 for the Computer

Crime and Intellectual Property Section (CCIPS). CCIPS acts as a link for federal,

state, local and foreign agencies seeking guidance on how to respond to the threat

of cybercrime/cyberterrorism. In addition, the fiscal year 2001 budget includes

$560,000 for the Criminal Division to stay abreast of technological changes and developments and to target those who use computers, computer bulletin board systems

and computer online services to traffic in child pornography.

We believe our fiscal year 2001 request provides balanced and responsible approaches to addressing this growing threat. The tremendous growth in the Internet

and the interconnectivity of our information infrastructure means that Congress,

law enforcement, industry and the private sector must all work together as never

before. Computers bring the world closer together and create new bonds of understanding. However, they can provide criminals with tools to conceal their identity

and greater access to those who seek to cause harm. Crimes perpetrated via the

Internet can reach a larger and more accessible pool of victims which can encircle

the globe. The Internet has made it easier for wrongdoers to find each other, to congregate, to socialize, and to create an online community of support and social reinforcement for their antisocial behaviors. We welcome your assistance and persistence in this battle for the future.

COMBATING GUN VIOLENCE

The Department’s fiscal year 2001 budget includes an increase of $215.9 million

to continue our vigorous efforts to pursue those who violate our gun laws and to

provide state and local law enforcement with assistance and technology to solve and

prosecute gun crimes. Although gun violence has dropped, and gun prosecutions

have increased, we must do more to stem the tide of gun violence. Every day, 89

people are shot and killed in America; and every year, in addition to the immeasurable costs of human suffering, gun violence costs the American people $20 billion

in medical care, public service, and lost productivity. These costs are unacceptable.

Those who use guns to commit crimes must be swiftly and severely punished. At

my direction, United States Attorneys—working within their communities—have

put together innovative plans to reduce gun violence. For fiscal year 2001, our budget requests an additional $14.5 million and 163 positions for the United States Attorneys to bolster firearms prosecutions and to build on the successes of pilot

projects such as Operation Ceasefire in Boston, MA and Project Exile in Richmond,

VA. Last year, you earmarked $7.125 million for intensive firearms prosecution

projects. I hope that this year you will provide additional resources to enhance our

firearms prosecution projects throughout the country.

Recognizing that the majority of gun prosecutions must occur at the state and

local levels, we are requesting $190 million in new funding for the Community Prosecution program. We propose that $150 million of this increase be used to hire or

redeploy 1,000 local prosecutors to combat gun violence through intensive local enforcement initiatives.

In addition to punishing those who commit gun crimes, we must do all we can

to stop gun violence before it occurs. Our 2001 budget includes an increase of $40

million for programs aimed at preventing gun violence. This includes $10 million

for the Office of Justice Programs (OJP) to develop and test ‘‘smart gun’’ technologies; $10 million to be made available within the Byrne Discretionary Grant

program to support local media campaigns that help spread the word about gun violence; and an increase of $10 million from within current Juvenile Justice funding

to expand innovative Partnerships to Reduce Juvenile Gun Violence. Also within

OJP, we are requesting $10 million to reimburse state and local law enforcement

agencies for the cost of destroying weapons, rather than reselling them and recouping costs. This is not a ‘‘gun buyback’’ program, but it will help prevent weapons

seized or used by law enforcement from being circulated back into the community.

As with fingerprints, every firearm has unique characteristics—a ‘‘gun print’’—

that can be captured, electronically stored and compared to other gun prints

through the use of ballistics technology. Ballistics technology enables law enforcement to link one or more seemingly unrelated crimes to a single firearm. At the

present time, both the FBI and the Bureau of Alcohol, Tobacco and Firearms (ATF)

in the Treasury Department operate separate ballistics imaging systems, but an

agreement has been reached to integrate these two systems, using the best features
50

of each, to establish a single National Integrated Ballistics Information Network

(NIBIN). This new system will improve law enforcement’s ability to identify crime

guns. For fiscal year 2001, the Department is requesting $1.4 million for the FBI

to provide the communications infrastructure required to implement NIBIN. In addition, we are seeking $10 million through OJP to provide assistance to help state

and local law enforcement input data into their ballistics systems and reduce their

backlogs. Funding is requested in Treasury’s budget to upgrade state and local ballistics systems.

IMPROVING COMMUNITY LAW ENFORCEMENT

Our 2001 budget continues the Department’s commitment to improve community

law enforcement efforts and to build closer relationships between law enforcement

and the communities they serve.

We seek an additional $740 million for the Community Oriented Policing Services

(COPS) program, for a total of $1.3 billion in fiscal year 2001. The COPS request

includes an increase of $225.3 million for the Public Safety and Community Policing

Grants program, of which up to $50 million will be used to fund law enforcement

officers who will work in police/prosecutors’ offices. We have also requested $190

million, as I mentioned earlier, to expand funds for community and local prosecutors. I regard the expansion of community law enforcement to include community

prosecutors as the single most important lynchpin of further crime prevention.

We request an increase of $220 million, for a total of $350 million, to provide state

and local law enforcement with the latest crime fighting technologies, This includes

$199 million for the Crime Identification Technology Assistance program; $70 million for upgrades to criminal history records; $50 million to improve forensic labs

and to reduce the convicted offender DNA sample backlog; $10 million for crime

mapping technologies; $10 million in base funding for National Institute of Justice’s

(NIJ) Technology Centers; $6 million for regional forensic computer labs; and $5

million for continued base funding for the NIJ DNA Research Development program.

We seek $70 million for community crime prevention programs to address youth

and school safety, including $5 million to fund a value-based program between

youth and police, $30 million for school-based problem solving partnerships, and $35

million for the Safe Schools/Healthy Students program; $20 million for a police integrity training initiative; $5 million for a COPS police diversity recruitment initiative; and $5 million for citizen problem-solving academies that will provide citizens

with tools to work collaboratively with policing agencies.

The Office of Justice Programs supports a number of new, innovative, and exciting programs to assist communities in addressing crime and public safety concerns.

I am particularly excited about a pilot project known as the Strategic Approaches

to Community Safety Initiatives (SACSI) that is underway in five cities—Indianapolis, IN; Memphis, TN; New Haven, CT; Portland, OR; and Winston-Salem, NC.

SACSI experiments with a new way of doing business that makes heavy use of statistical data and information analysis, boosts the U.S. Attorney’s role as a community problem solver and uses researchers to serve as navigators to ensure that the

crime-fighting approaches taken are supported by the data. In fiscal year 2001, we

are requesting an additional $10 million to expand SACSI.

In Indianapolis, under the SACSI umbrella, law enforcement agencies from the

federal, state, and local levels came together with community groups to form the Indianapolis Violence Reduction Partnership (IVRP), with the goal of reducing homicides, bringing the community into the problem-solving process and improving communication among federal, state, and local law enforcement. The Indianapolis Division of the FBI, as a participating member of the IVRP, shares intelligence data and

provides technical oversight to the state and local intelligence gathering community.

The IVRP is an example of the benefits that accrue from SACSI projects involving

cooperation, coordination, and collaboration between law enforcement at all levels

and the community, as well as the importance of incorporating sound research and

analysis into problem-solving. The IVRP team analyzed data for every homicide that

occurred in Indianapolis and Marion County, IN in 1997 and 1998, identified common elements and developed a strategy that included community intervention with

offenders on probation or parole. Initial results show that homicides were down 36

percent for the first 6 months of 1999, as compared to the same period a year earlier.

I have visited the Indianapolis project, and I can tell you that the work they are

doing there holds great promise for the future. SACSI brings community organizations and law enforcement together to create new, effective and lasting relationships

across agencies and disciplines, using local data, crime control theory, street level
51

information, and organizational capacities to attack problems and develop solutions.

It is a wise investment.

Other enhancements requested for OJP community law enforcement programs include $15 million for a new Building Blocks initiative to address delinquency and

crime; an $8.5 million increase for Weed and Seed; $5 million earmarked for NIJ

from within the Drug Courts program and JJ formula grants for dependency courts

to address child abuse and neglect; $5 million for the NIJ to conduct family violence

research and evaluation; $2 million to develop protocols and guidelines for investigative and forensic sciences; and $1 million to begin developing a new Justice Online

Information Exchange system.

For the U.S. Attorneys, we are requesting $3.98 million to support the operations

of the D.C. Superior Court by funding investigative resources to augment work performed by the Metropolitan Police Department and $172,000 to expand the Short

Term Witness Protection program.

BREAKING THE CYCLE OF DRUGS

One of the most pressing criminal justice challenges we will face as a Nation in

the next few years is the reentry of offenders into society upon their release from

prison. We have nearly 2 million Americans incarcerated, two-thirds of them in

state and federal prisons. This year, nearly 570,000 inmates will return to communities across the country. Unfortunately, many of them will return home with the

same problems they had when they entered prison. And as a result, two-thirds of

all returning offenders will be rearrested within three years of release. This is unacceptable. We must have programs in place to break the cycle of drug use and its

consequences and to provide support services to help these former offenders successfully reenter their communities. Our fiscal year 2001 budget addresses these needs.

Our request includes $75 million for OJP’s Zero Tolerance Drug Supervision program. This initiative will provide discretionary grants to states, units of local government, Indian tribes, and state and local courts for comprehensive drug testing

and treatment programs. Of the total, $25 million will be devoted to a new Offender

Re-entry Grant program, which along with $35 million from the COPS program, will

provide a total of $60 million to combine surveillance sanctions and support services

in ways that afford increased protection to communities that experience unusually

high returns of inmates.

The re-entry grant program addresses a problem that will impact all of us. It will

help to manage the reintegration of prisoners into society and to minimize public

safety risks while maximizing productive activity. This new program includes funding for re-entry partnerships in our communities that enhance monitoring and follow-up and strengthen support systems. The program includes funding for ‘‘re-entry

courts’’ modeled after our highly successful Drug Courts program. The re-entry court

would oversee an offender’s return to the community after release from prison or

jail, while on probation or parole. It would use its authority to apply graduated

sanctions and positive reinforcement in much the same way that drug courts do.

The message of the court would be—work with us, stay clean, stay out of trouble,

get a job, and we will help you in those efforts. But if you come back testing positive

for drugs, if you commit further crimes, if you violate the conditions of your release,

you’re going to face a more serious punishment, every step of the way.

Also included in the fiscal year 2001 request is funding for other drug prevention

programs, including $20 million for the Office of Juvenile Justice and Delinquency

Prevention’s (OJJDP) Drug Prevention Demonstration program; $50 million for

OJP’s Drug Courts program, an increase of $10 million above last year; $5 million

to expand NIJ’s Arrestee Drug Abuse Monitoring System (ADAM); $4.5 million for

OJP’s national demonstration initiative on alcohol and crime; $4.4 million to evaluate OJJDP’s Comprehensive Strategy for Serious Violent and Chronic Juvenile Offenders program; and a $2 million increase for the Residential Substance Abuse

Treatment program, bringing the total available for this program to $65 million.

In addition to its drug prevention efforts, the Department is requesting a total

of $1.73 billion for drug enforcement activities, including an increase of $3.1 million

and 18 positions to support DEA’s Special Operations Division (SOD) investigations

along the Southwest Border and to establish a money laundering/financial investigative unit within SOD. SOD is a multi-agency program aimed at dismantling entire

national and international trafficking organizations. It includes participation from

the DEA, FBI, IRS, U.S. Customs Service and the Criminal Division in the Justice

Department.

An increase of $389,000 and 5 positions is requested to enhance the Criminal Division’s international drug money laundering and forfeiture activities and to support
52

the increasing number of new wiretaps relating to narcotics enforcement arising

from initiatives such as SOD.

ENHANCING DETENTION AND INCARCERATION

The Department’s detention and incarceration requirements continue to grow. In fiscal year 2001, we are requesting increases totaling $1.1 billion to meet our detention, incarceration, and prisoner transportation needs.

Federal Bureau of Prisons

As a result of tougher sentencing guidelines and mandatory minimum sentences,

the abolition of parole, and significant increases in law enforcement, we have seen

our federal prison population more than double since 1990. We project that the current population will increase by another 50 percent by 2007. To meet this projected

demand for prison bedspace, for the Bureau of Prisons, we are requesting a 2001

appropriation of $4.4 billion and advance appropriations in buildings and facilities

for 2002 and 2003. This funding will reduce overcrowding and accommodate future

growth, including absorption of D.C. sentenced felons and long-term INS detainees.

The request seeks program increases of $874.5 million this year.

For the Salaries and Expenses account, our increases include $80 million and

1,404 positions to activate 4 new facilities. These activations are needed to address

the 53 percent overcrowding rate in high security prisons, to house District of Columbia felons, and to add much needed pre-trial detention beds. In addition, we are

requesting $13.1 million to open 6 low security facilities; $8.1 million to begin the

initial purchase of equipment for 2 federal prison facilities scheduled to activate in

the first half of 2002; $84.5 million and oversight positions for an additional 6,000

contract beds (above the current year 6,000 beds for long-term criminal alien detainees and D.C. inmates); and $7.4 million to increase inmate participation in GED,

English proficiency, special education and vocational training programs.

For BOP Buildings and Facilities, we request a total of $835.6 million for 2001,

including a program increase of $681.3 million for the full construction costs of 6

prisons, 2 associated with the absorption of INS long-term detainees, as well as the

site and planning costs for 5 new facilities.

I would call your attention to and ask your support for our proposal to provide

advance appropriations for fiscal years 2002 and 2003 to ensure that we have adequate facilities to house an expanding prison population. Advance funding will accelerate and bring certainty to our construction program. We ask that you provide an

advance appropriation of $791 million in fiscal year 2002 to fund the construction

costs of the 5 facilities for which we are seeking site and planning money in 2001.

Similarly, we ask that you provide site and planning funding in 2002 for 5 new facilities, which would require advance appropriations of $535 million for construction

in 2003.

Thus, our budget request for the Buildings and Facilities appropriation includes

a total of 17 new prisons over the next 3 fiscal years. Without the new prisons in

this request, over-crowding will reach an unmanageable 94 percent in our penitentiaries and 74 percent in our medium security facilities by 2007. With this proposed

funding, we estimate overcrowding will be reduced to approximately 30 percent system-wide.

Detention Trustee

Our detention requirements are becoming an increasingly large portion of the Department’s annual budget request, with funding located in several different appropriations accounts within the Department. In an effort to better manage these growing detention resources, we are proposing to create a Detention Trustee who will

report to the Deputy Attorney General and be responsible for managing detention

resources within the Department. While we have not moved detention funding from

the various components’ accounts, it is anticipated that the Detention Trustee would

exercise oversight of detention resources and operations. Our budget request includes 6 positions and $26 million in the new Detention Trustee account; $25 million is available without limitation to meet unanticipated costs associated with the

care, maintenance, detention and repatriation of illegal aliens held outside the continental United States.

Immigration and Naturalization Service

The Department’s request for INS Detention needs includes increases of $92.5

million for 1,000 additional contract beds to detain and remove criminal aliens. This

includes 82 new juvenile beds and funding for transportation and to implement detention standards. Also requested are increases of $24.8 million for detention facility

construction to continue the multi-year southwest border initiative at critical deten-
53

tion locations in El Paso and Port Isabel, TX; El Centro, CA; and to improve facilities in Florida. The proposed reauthorization of Section 245(i) of the Immigration

and Nationality Act is expected to provide $37.5 million to replace one-time detention resources made available as part of the fiscal year 2001 appropriation, to support the increase in the number of juvenile detention beds, and increase the number

of Justice Prisoner Air Transportation (JPATS) movements.

United States Marshals

For the United States Marshals Service, our request seeks an increase of $64.4

million in the Federal Prisoner Detention account to fund costs associated with approximately 9.53 million contract jail days, a 8 percent increase above the 2000

level. The detainee population has grown considerably over the last few years due

to significant increases in apprehensions by our growing law enforcement personnel

in the FBI, DEA, and INS Border Patrol. In fiscal year 2001 the average daily population is expected to reach 38,531.

In addition to the needs of the Federal Prisoner Detention program, the fiscal year 2001 budget request includes increases of $35.7 million for the U.S. Marshals

Service to handle the increased workload generated by staff increases in other federal law enforcement agencies, to provide the personnel and equipment necessary

to ensure new courthouses and new courtrooms in existing facilities can open on

schedule and with adequate security to handle increased prisoner movements and

to increase security in the District of Columbia Superior Court cellblock.

The work of the U.S. Marshals Service is uncontrollable in nature in that the organization must meet the requirements of the federal courts and of our federal investigators and prosecutors. The Marshals Service cannot control the number of

threats facing our federal judiciary, nor can it control the number of prisoners that

come into its custody.

Office of Justice Programs

Funding is requested, within the Prison Grants program, for the Cooperative Agreement Program ($35 million) and for detention facilities in Indian country ($34

million).

ENFORCING OUR CIVIL RIGHTS LAWS

The Justice Department is our Nation’s chief enforcer of civil rights laws. Through

the enforcement efforts of the Civil Rights Division, the U.S. Attorneys offices, and

the FBI, the Department seeks to protect the civil rights and liberties guaranteed

to ALL Americans.

The fiscal year 2001 budget requests a total civil rights enforcement budget of $107.8 million. For the Civil Rights Division, alone, this represents an increase of

$16 million for civil rights funding—19 percent more than the fiscal year 2000 en- acted level of $82.2 million, and 41 percent more than the fiscal year 1999 enacted

level of $69.3 million.

This year marks the 10th anniversary of the Americans with Disabilities Act

(ADA). The increased resources will enable the Civil Rights Division to fund new

initiatives to further implement the ADA. This funding will also allow the Division

to continue prosecuting criminal civil rights cases; promote compliance with our Nation’s laws that prohibit discrimination in housing, lending, voting, education, and

employment laws; protect the rights of institutionalized persons; and expand investigations and prosecutions of cases involving ‘‘pattern or practice’’ of police misconduct.

The Community Relations Service (CRS) plays a pivotal role in civil rights issues

through the delivery of conciliation and conflict resolution services. Included in the

request for enhanced civil rights resources is an increase of $2.35 million and 30

positions (15 conciliators and 15 administrative staff) to enable the Community Relations Service to deploy professional conciliators to communities threatened by racial tensions, community conflict, and unrest. Within the Office of Justice Programs, we are seeking increases totaling $5.9 million for programs addressing police use of force, hate crimes, and for statistical programs that will look at police-initiated traffic stops; felony case processing to determine if there is a disparity in the way a defendant is treated based on their race;

and the victimization of people with disabilities.

SECURING OUR BORDERS

The Immigration and Naturalization Service is charged with enforcing immigration laws by securing our Nation’s borders from illegal immigration and expediting

the legal flow of commerce and people into the United States. The fiscal year 2001

budget request for INS supports the immigration goals and strategies of improving
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customer service, facilitating legal immigration while deterring illegal immigration,

and removing criminal and other illegal aliens from the United States. The fiscal

year 2001 budget request seeks a total of $4.8 billion for immigration-related activities.

For the Border Patrol, we are requesting an increase of $52 million to add 430

new Border Patrol agents. These new agents will bring Border Patrol staffing to

more than 9,800 agents by the end of the fiscal year, representing an increase of

about 147 percent over the 1993 staffing level of 3,965 agents.

The 2001 request recognizes the difficulties INS encountered in recruiting agents in a tight labor market and seeks an additional $69.9 million for a Border Patrol

and Immigration Inspector Pay Reform package. Of the total, $56 million is requested from appropriated resources, and $13.9 million will come from user fees.

The initiative would upgrade the journeyman grade levels for the Border Patrol and

inspectors from GS–9 to GS–11. It would also modify the overtime provisions for

Border Patrol agents, making them eligible for Law Enforcement Availability Pay.

We are hopeful that pay reform, coupled with more aggressive recruitment and hiring initiatives, will improve our ability to recruit and retain agents. Our Border Management request includes an increase of $20 million to support

force-multiplying technology efforts by expanding the Integrated Surveillance Intelligence System. This technology provides agents with the ability to monitor the border from remote sites, thus increasing the efficiency and safety of our agents. In addition, $22.3 million is requested for 269 Immigration Inspectors to staff 3 new ports

of entry in Texas, to handle increased workload associated with the expedited removal process at land ports of entry, and to provide additional staff at international

airports. The Department also plans to dedicate $5 million from the Assets Forfeiture Fund Super Surplus to continue efforts to evaluate the possible integration

of INS’ IDENT fingerprint system with the FBI’s IAFIS system. For Border Patrol construction, we are seeking an additional $51.3 million to construct and maintain Border Patrol stations and sector headquarters to accommodate

the growth that has occurred in the Border Patrol.

In fiscal year 1999, INS met its naturalization goal of completing more than 1.2

million naturalization applications, and the agency is on target to meet its fiscal

year 2000 goal of processing 1.3 million applications and achieving a nationwide average processing time of 6–9 months to naturalization.

To support the provision of immigration services, the Department is proposing ad- ditional resources totaling $152.3 million. Of this amount, $80 million will be derived from the establishment of a new Premium Processing Fee that will permit

business applicants to choose expedited processing of their applications for a $1,000

fee.

Of the total receipts to be generated by this new fee, $25 million will be used to process business applications and to increase our anti-fraud efforts, and $55 million

will be deposited into a new Immigration Services Capital Investment Account. This

new account will fund immigration service and benefits initiatives, targeting backlog

reductions, through system and infrastructure upgrades. The budget also requests

$34.8 million in appropriated resources for backlog reduction efforts in other immigration benefit programs and to capitalize the new Capital Investment Account and

$37.5 million in receipts derived from the proposed reauthorization of Section 245(i).

We are requesting $10.1 million to strengthen INS’ financial management operations by hiring additional staff at INS’ Burlington, VT Debt Management Center

and the Dallas, TX Finance Center; adding staff to respond to increased demands

at the Administrative Service Centers; and to address staffing requirements in the

Legal Proceedings program.

When resources are added to INS, they reverberate through other Justice agencies, resulting in increased workload for agencies such as the Executive Office for

Immigration Review (EOIR) and the United States Attorneys who must prosecute

many immigration cases. To ensure balance in the system, the Department is requesting enhancements for these agencies.

For EOIR, our request includes an increase of $5 million to meet an estimated

increase of 10,000 cases in its Immigration Judge caseload and an increase of 1,200

cases in its appellate caseload.

For the U.S. Attorneys, we are seeking an additional $3.8 million and 48 positions

to complement enhancements provided to INS over the last 4 years. The increase

will permit the U.S. Attorneys to aggressively enforce our immigration statutes by

prosecuting illegal aliens, including aliens who, after deportation, attempt to reenter

or remain in the U.S. illegally; alien smugglers and smuggling organizations; and

those who produce, distribute, or sell false identification.

State and local governments are also impacted by increased federal immigration

enforcement. The 2001 budget includes a requested increase of $15 million for the
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State Criminal Alien Assistance program (SCAAP) which reimburses state and local

governments for the cost of incarcerating criminal illegal aliens. With the proposed

increase, total funding for SCAAP in fiscal year 2001 will reach $600 million.

FIGHTING CRIME THROUGH TECHNOLOGY

The increased sophistication in technology has made significant changes and improvements in the way we work and live. Just as society as a whole has become

dependent on new technologies, so too has law enforcement. When I came to the Department in 1993, I found a crumbling technological infrastructure, and I have

worked hard to improve the tools available to our agents and prosecutors. We have

come a long way in the last 7 years, but there is still much to be done.

Our 2001 budget includes an additional $358 million for federal information resources management software and hardware, wiretapping systems, cryptology

equipment, DNA collection efforts, on-going research and development projects and

data driven crime control strategies.

Communications Assistance for Law Enforcement (CALEA)

The Communications Assistance for Law Enforcement Act of 1994, (Public Law

103–414) authorizes the Attorney General to reimburse telecommunications carriers

for costs associated with modifying digital equipment installed before January 1,

1995, in order that court-authorized wiretaps may be performed.

The Department has recently submitted a fiscal year 2000 reprogramming proposing to use up to $100 million in Assets Forfeiture Super Surplus funds to continue reimbursing the telecommunications industry for certain costs associated with

modifying their networks. We urge your support of this reprogramming. In addition,

for fiscal year 2001, we are seeking an increase of $105 million for the Department’s

CALEA activities, bringing total funding to $120 million. Recognizing the contribution of CALEA to national security, an additional $120 million for CALEA is also

requested in the Department of Defense.

The budget request for the FBI in 2001 includes $2.1 million to test and verify

the technical solutions proposed by manufacturers under CALEA.

Drug Enforcement Administration

For DEA, the budget request includes technology enhancements totaling $57.5

million. Included within this total is $56 million and 2 positions to continue deployment and support the operational requirements of DEA’s primary office automation

infrastructure, FIREBIRD; and $1.5 million to enhance the El Paso Intelligence

Center’s (EPIC) Information System. The EPIC information system distributes and

analyzes sensitive intelligence data on worldwide drug movements and organizations.

Federal Bureau of Investigation

We have made significant improvements in the FBI’s automated systems over the

last few years. In fiscal year 1999, three new critical information systems became

operational. The National Instant Background Check System (NICS), used to perform automated Brady Act background checks for gun purchases, came on-line in

November 1998. In July 1999, the FBI’s NCIC 2000 and Integrated Automated Fingerprint Identification System (IAFIS) became fully operational. Despite these advancements, there is much that still needs to be accomplished to bring the FBI into

the 21st Century in terms of its technology requirements.

For fiscal year 2001, we are requesting a total of $104.7 million for FBI technology initiatives. Our request includes $40.8 million in new funding for the Information Sharing Initiative; $25.3 million and 4 positions for digital collections systems; and $10 million from the Assets Forfeiture Fund Super Surplus to support

a multi-year automated information initiative to store and manage lawfully collected

electronic surveillance intelligence and evidentiary material among FBI field offices.

In addition, $14.3 million is requested to fund the annual lease costs associated with

the Justice Consolidated Network’s ATM circuits. For counter encryption activities,

we are seeking $7 million to provide the tools necessary to intercept encrypted communications, when permitted by court order. And, we are seeking $5.3 million and

5 positions to implement a federal offenders DNA database and $2 million to provide digital body recorders in all field offices.

Narrowband Communications

Federal agencies are required by law to make more efficient use of their radio

spectrum, the National Telecommunications and Information Administration in the

U.S. Department of Commerce has issued regulations to require all federal spectrum

users to narrow by one-half the bandwidth used to transmit radio signals. Our fiscal
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year 2001 request includes an increase of $88.6 million to accelerate the necessary

equipment upgrades to comply with the new requirements. The Department’s narrowband communications account consolidates the needs of all DOJ federal law

enforcement agencies to achieve efficiencies of scale in the acquisition of this new

technology. Total funding requested for narrowband efforts in fiscal year 2001 is

$205 million.

PROTECTING AMERICAN INDIAN AND ALASKAN NATIVE COMMUNITIES

The fiscal year 2001 budget includes $173.3 million to fund the third year of our

Indian Country Law Enforcement Initiative begun with the support of this Subcommittee in fiscal year 1999. The request represents an increase of $81.8 million

above the fiscal year 2000 enacted level.

Our Indian Country Law Enforcement Initiative will improve public safety for the

residents of American Indian and Alaskan Native communities by increasing the

number of law enforcement officers on Indian lands, providing equipment, expanding detention facilities, enhancing juvenile crime prevention and improving the effectiveness of tribal courts. While violent crime has declined nationally for the 7th

consecutive year, it is on the rise in many Indian communities. American Indians

are the victims of violent crimes at more than twice the rate of all U.S. residents.

The Federal Government has unique law enforcement responsibilities in Indian

communities. In order to fulfill these responsibilities and to fight violent crime effectively, both the Justice Department and the Department of the Interior’s Bureau of

Indian Affairs must have a full spectrum of criminal justice resources to promote

public safety.

For Indian Country programs within the Office of Justice Programs, the fiscal

year 2001 budget request includes $10 million to establish a new Zero Tolerance

and Drug Intervention program for alcohol and substance abuse; $15 million for the

Tribal Courts program; $20 million for Title V Juvenile Justice incentive grants for

local delinquency prevention to serve Indian youth by developing, enhancing, and

supporting tribal juvenile justice systems; $8 million for a new Tribal Youth Mental

Health and Behavior Problems Initiative; $8 million for a new Indian Alcohol and

Substance Abuse Diversion program to develop strategies and services to break the

cycle of alcohol and crime; $5 million to establish Sexual Assault Nurse Examiner

Units to gather evidence in prosecuting sexual offenders; $6 million for a Tribal

Criminal and Civil Legal Assistance program for criminal and civil legal services

support and for criminal and legal assistance curriculum development and training

at tribal colleges; $34 million within the Prison Grants program for the construction

of detention facilities; $2 million for a new Tribal Criminal Justice Statistics Collection program; and $5 million for a new Police Corps program to provide advanced

educational opportunities for police in Indian country.

Within the COPS program, we are seeking $45 million for additional law enforcement officers, equipment, and training in Indian Country and $5 million for an Indian Country Forensics Laboratory to augment tribal forensic capabilities.

For Department of Justice agencies, the Indian Country request includes $4.6 million for the FBI to fund 31 victim/witness coordinator positions in Indian Country,

contracts for evidence forensic exams, and Safe Trails Task Force overtime costs;

$4.7 million and 60 positions for the United States Attorneys to augment current

investigative and prosecutorial efforts in Indian Country; and $932,000 to establish

a permanent Office of Tribal Justice under the Associate Attorney General.

LEGAL REPRESENTATION, ENFORCEMENT OF FEDERAL LAWS AND DEFENSE OF U.S.

INTERESTS

As the Department’s responsibilities and caseload continue to expand, we are

seeking additional resources to prosecute unlawful activities and protect the interests of the American people in court. As I noted earlier, balance in the criminal justice system is vitally important. Without adequate litigators to handle the caseload

that is generated by increased investigative resources, our system breaks down and

the interests of the American people are compromised.

The fiscal year 2001 budget includes increased resources to enable the Department to perform its role as the Nation’s litigator. Specifically, the request includes

a program increase for the Antitrust Division of $20.95 million from fee revenue to

provide for the hiring of additional staff. This is critical if merger enforcement is

to keep up with the accelerating number and complexity of merger deals being proposed and the rapid technological change currently affecting American markets. It

will also help address an increasing number of civil non-merger matters, and handle

an expanding international workload, including large global criminal cartels from

which the Division has obtained $1.4 billion in criminal fines in just the past two
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years. This additional funding will help ensure that America’s marketplace remains

the most freely competitive and innovative in the world.

For the Criminal Division, we are seeking $1.2 million and 14 positions to support

the Division’s fight against international crime.

For the United States Attorneys, an increase of $5.74 million is requested to prepare for and defend civil lawsuits against the United States and to promote the effective defense of lawsuits through training and efficient use of resources in order

to protect public funds and programs, policy initiatives, and statutes. Congress established the Judgment Fund, a permanent indefinite appropriation, to pay settlements and judgments against the United States. Disbursements from the Judgment

Fund are increasing. In 1995, payments from the Fund totaled $300 million. By the

end of 1997, nearly $1 billion was paid out of the Fund. The civil defensive litigation

of our United States Attorneys helps to prevent losses from the United States Treasury and is a wise investment.

For the Environment and Natural Resources Division, we are seeking an increase

of $1.15 million and 8 attorneys to support the Division’s efforts to defend federal

programs and regulations and $988,000 to expand the Division’s civil enforcement

caseload.

The 2001 request for the Tax Division includes increases of $2 million to expose

and attack the use of illegal tax evasion offshore schemes, prosecute and combat the

use of illegal domestic trusts, and provide automated litigation tools.

For the Office of Legal Counsel (OLC), our request includes $93,000 and 1 position to assist OLC in its review of legal documents to implement Presidential decisions or transmit Presidential requests in emergency situations.

The Justice Department strongly endorses the use of alternative dispute resolution (ADR) to resolve conflicts which reduce costly litigation and requests an additional $1.31 million in fiscal year 2001 to promote the use of ADR to resolve conflicts and establish a full operating budget for the Office of Dispute Resolution, and

to disburse funding to appropriate litigating components to pay ADR costs. In addition, we are requesting $1 million for the Fees and Expenses of Witnesses appropriation for ADR expenses.

OTHER CRIME-FIGHTING INITIATIVES

In addition to the special initiatives that I have outlined above, the fiscal year

2001 request includes $86.1 million for other important enhancements.

For the FBI, we are requesting $12 million and 48 positions for Health Care

Fraud Enforcement; $6.5 million and 4 positions to provide essential training resources to fully utilize the FBI Academy space to provide technical and analytic

training to agents and other professionals; $5 million to contract for additional linguist support so that investigators can analyze intelligence in foreign languages;

$2.1 million for additional criminal confidential case funds to pay for costs associated with undercover operations; and $1.9 million for environmental and safety related construction efforts at the FBI Academy firing range.

To support our United States Attorneys, the fiscal year 2001 budget includes enhancements of $12.1 million to provide the information technology equipment and

staff to support large case document files, e-mail among U.S. Attorneys’ offices and

other Justice Department components and general office automation needs; and $5

million to support efforts by the U.S. Attorneys to ensure the payment of child support to custodial parents.

An increase of $3.9 million and 24 positions is requested to enhance DEA’s financial and resource management oversight functions. In fiscal year 1999 at Congress’

direction, the Department undertook a comprehensive budget and financial review

of DEA. A report was provided to the Committees on Appropriations in July 1999,

which recommended a series of management reforms to be implemented by DEA.

This requested increase will ensure that DEA will be able to fund ongoing needs

for their federal financial system and become fully compliant with accepted federal

financial management practices. Similarly, we are requesting $1.42 million and 32

positions to provide the U.S. Marshals Service with the capability to improve its financial operations, increase financial oversight and policy compliance, and provide

daily systems maintenance and support to its accounting system.

In the Office of Justice Programs, we are requesting additional resources totaling

$22.3 million for a number of important initiatives, including the Domestic Violence

Victims’ Civil Legal Assistance program, the Public Safety Officers Dependants Education Assistance program, a new International Crime Research program, a national

study tracking the justice system’s handling of domestic violence cases; an On-line

Collection and Analysis of Information initiative to begin converting paper-based

collections of administrative data from state and local units of government to an
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Internet-based, paperless collection; and to improve the management and administration of OJP and COPS programs.

Finally, we are seeking an appropriation of $13.7 million to support the mission

of the Radiation Exposure Compensation Act, which provides monetary compensation for specific diseases to underground uranium miners, persons who participated

onsite in atmospheric nuclear tests or individuals downwind of the Nevada Test site.

CLOSING

As we enter the 21st Century, criminal schemes are more technical and sophisticated than ever. Our response as the Nation’s leader in law enforcement must be

swift and proportionate. To ensure such a response, we must expand our on-going

efforts to improve the performance of our programs and achieve the results that the

American people rightfully expect. Soon, you will be receiving a copy of our 1999

Accountability Report, which includes our annual performance report. And, along

with our budget request, I have submitted a summary performance plan for the entire Department that highlights the strategies, goals, indicators and resources we

will employ to accomplish our mission in fiscal year 2001.

Mr. Chairman, I appreciate the support you have given to me and the Department

of Justice over the last 7 years. We have made tremendous progress and I am committed to working with you during the remainder of my tenure as Attorney General

to prevent waste and duplication and ensure that we are using our limited federal

resources in the best possible manner so that we improve performance, meet our

very broad mission, and build on the progress that we have made to date.

Thank you. I look forward to answering any questions you may have.

Senator GREGG. That is very generous of you. We have had our

differences, but we have also had our agreements. I have enjoyed

working with you, Madame Attorney General. On issues where we

have agreed I think we have made great progress. On issues where

we have disagreed we have disagreed cordially, and I have appreciated that.

NATIONAL DOMESTIC PREPAREDNESS OFFICE

One of the issues that we have agreed on, clearly, is counterterrorism, and the issue of how we address counterterrorism has been

a priority of yours. It has been a priority of mine. It has been a

priority of this committee, Senator Hollings, Senator Campbell, for

3 or 4 years now, and I think we have made progress.

But in that vein, we still have a long way to go, as you both

know. One of my concerns is about the National Domestic Preparedness Office, which I personally saw as being the opportunity

to give the first responders especially a one-stop shopping location.

In other words, if you are a State emergency management director,

if you are a specialist in terrorism in New York City—which is

probably not a good example, because they are way ahead of everybody else—but if you are a specialist in terrorism assigned in some

other city that is not yet up to speed, this was to be the office

where you could come and be given not only substantive advice but

substantive support.

It was also to be the office, and is to be the office, and I do not

put it in the past, it is to be the office that coordinates the national

effort, to a great degree, brings the various agencies into one central location, and allows us to have an effective coordinated response to our efforts first to get ready to respond to a terrorist

event. But if the terrorist event occurs, to be able to handle it.

My concern is that the office seems to be a bit adrift. In fact,

having just been started, it does not seem to be up and running

yet at a level of strength that it should be. I am a little concerned
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that its mission is already being diluted, and I would be interested

in hearing your thoughts on where this is going.

Attorney General RENO. First of all, fear not, I am absolutely,

unequivocally committed to it. But you quite rightly raised some

questions early on and you considered the reprogramming. You

wanted us to make sure that we had heard from the stakeholders

in the community, and the authorization for it was some time in

coming as you satisfied yourself that we were going in the right direction.

It has been 3 months now since you gave the signal. We followed

up, as you directed, with the blueprint. And I think the blueprint

spells out very clearly where we are and what we want to do.

Senator GREGG. On that point, do you think there is any reason

that any of the agencies, whether it is the FBI or anybody else,

should not presume that the blueprint is still the managing document for the purposes of national domestic——

Attorney General RENO. The blueprint is the managing document.

Now, in that regard, you made a statement. It is the National

Domestic Preparedness Office. And what we saw was that it would

be a coordinator. What was the latest equipment? What was the

best training? How could we best prepare? A one-stop shop so that

they did not have to go different places to find out about different

procedures, training, equipment, the latest developments in the

whole area.

But it was not meant to be operational in the sense of response

in terms of the terrorist act, and we spell that out in the blueprint.

But we are committed to it and I want to work with you. We have

enjoyed the opportunity to work with you, and I had determined

that reprogramming dollars, and you should get the reprogramming request soon, is not a trivial matter. It has taken more time

than I had anticipated.

Senator GREGG. I know they are not the physical responding

agency, but they are the agency which a State would look to to figure out how to respond.

Attorney General RENO. The way I see the National Domestic

Preparedness Office is it would have every bit of information. Here

is my overall vision of where we should be going. Every State

should have a State emergency preparedness plan, that we should

automate and develop a capacity to know where the hospitals are,

where the backup hospitals are, what the key assets are, who the

key people are, what the major transportation routes are, and everything that should be considered.

This same organization would have the latest information with

respect to equipment, what had become obsolete, what had been

learned from a recent exercise, and that we would be able to exchange that information in an appropriately prompt manner.

At the same time, what to do is going to depend on how people

have planned together at the State and local level; and how to respond, in terms of the particular type of weapon, is going to depend

on the facts and circumstances of the time, and that is going to

have to be judged by the people on the ground.
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CDC, DOD, HHS INVOLVEMENT WITH NDPO

Senator GREGG. So far, as I understand it, neither DOD [Department of Defense] or HHS [Department of Health and Human Services], which have responsibility for a large amount of the chemical

attack or the biological attack response capability, certainly CDC

[Centers for Disease Control] and the chemical weapons specialist

at the Defense Department, have not detailed anyone to the office.

Attorney General RENO. As I indicated, it took some time to

get——

Senator GREGG. Do you expect them to detail someone?

Attorney General RENO. I certainly do.

Senator GREGG. And you expect those individuals to have a significant role? I mean, they are not going to be more than just low

level folks? They are going to have a role in actually being able to

carry some weight?

Attorney General RENO. Here is what we are doing. For example,

we met recently in New York with public health experts on the

issue of biological weapons, because it has become clear from our

stakeholders meetings and from meetings with first responders

around the country, that the issue of bioterrorism is a singularly

unique problem. We tend or had tended to link bio and chem together, but biological weapons present new issues.

There was concern expressed and I met with the Secretary and

her staff and CDC to develop a working relationship between the

Bureau and HHS in terms of how we prepare to identify the pathogen involved if there is a biological weapon used, to recognize that,

unlike a chemical weapon or nuclear weapon, the dispersion or the

distribution of the weapon or the use of the weapon would not be

known immediately, and it would begin to be evident in ways that

it might be masked as an epidemic of some disease or something

like that.

These are issues that we are addressing. And as we develop the

information, as we develop it through research and work with academia, this will be made available through NDPO across the nation

in a way that can be used by all.

Senator GREGG. I guess my question was more, have you for example, talked to the Secretary of Defense and the head of CDC, to

see if they are going to send somebody over to NDPO who has really got some clout?

Attorney General RENO. I have not talked to them yet, because

I do not have the thing up and running yet.

Senator GREGG. But you plan to? Is that the intention?

Attorney General RENO. I do.

NDPO FACILITY

Senator GREGG. And the physical location of the facility, where

is that going to be?

Attorney General RENO. As we were going through this process,

and before you had authorized the NDPO, there was an attempt to

rent space. And I think you were somewhat concerned by the increase in the space, and I was concerned.

Senator GREGG. That was actually the House of Representatives.
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Attorney General RENO. Then I am mistaken, because I got word

that you were concerned. At any rate, I was concerned and there

is space at the FBI building, and I think we should use that first

and make sure that we use the resources that we have as wisely

as possible. And then as necessary, expand it.

Senator GREGG. I do think it makes sense to have it linked to

the FBI physically.

Attorney General RENO. You have seen the situation over there.

The more I can keep that together around the SIOC—the Strategic

Information Operations Center.

Senator GREGG. I think that makes a lot of sense.

Attorney General RENO. And I am trying.

Senator GREGG. If we can help with that, tell us.

I have a lot of other questions but we have a lot of other members here, and so to give everybody an opportunity we will try to

limit the first round of questions to 7 minutes or so.

Senator Hollings has arrived. Do you have an opening statement?

DECLINE IN CRIME

Senator HOLLINGS. Madame Attorney General, what happens is

that I have watched over the years many an Attorney General

come and go. And for some 33, going on 34 years now, crime has

risen, except under your administration as Attorney General. So I

wanted to note for the record that 71⁄2 years I think in a row that

crime rates have fallen.

Is that in your statement?

Attorney General RENO. I make reference to it.

Senator HOLLINGS. Tell somebody you better get it and put it in

your statement, because that is a dramatic result. There is no

question that it is in every type of crime. And violent crime, in and

of itself, has fallen some 24 percent. So I commend you for that and

comment you for more or less restoring the integrity of the Attorney General’s office.

CERTIFICATION OF MEXICO

Now having given you the good government award, Attorney

General Reno, are you going to give Mexico the good government

award one more time? I mean, if you are, evidently you have not

read this morning’s paper. Have you got a subscription to the

Washington Post?

Attorney General RENO. Yes, sir. My father taught me never to

believe everything I read in the newspaper, and he was a reporter

for the Miami Herald for 43 years.

Senator HOLLINGS. I believe you believe the fellow is dead, do

you not? The chief of police of Tijuana?

Attorney General RENO. I do.

Senator HOLLINGS. David Dow, the ambassador down there, he

said that Mexico was the headquarters for narcotrafficking crime

in this world, just as Sicily was for the Mafia. And that is exactly

what I am finding. Constantine, the head of the DEA, said last

time—I am leading up, of course, to this March certification here

in several days—please give your utmost attention to that and let

us not play this game that we are on top of it because we have got
62

a meeting down there, because when you meet with them you are

meeting with the criminals.

There is not any question in my mind it permeates everything

about that government when, as they said in the morning paper,

they take over as the chief of police they send you first a bag of

money. And if you do not accept that, then they send you a bag

with a gun in it.

When is that certification due, do you know?

Attorney General RENO. My understanding is that the President

must make certification decisions by the first of March.

Senator HOLLINGS. Have you made a recommendation?

Attorney General RENO. I do not discuss what I have recommended to the President.

Senator HOLLINGS. Would you recommend to me, and this committee then? What would you recommend about Mexico?

Attorney General RENO. Senator, you know that if I told you

that, then it would be in the context of what I was recommending

or not recommending to the President and he——

Senator HOLLINGS. Not necessarily. We have had many a Cabinet officer tell us one thing and tell the President another.

Attorney General RENO. Well, I try not to do that, Senator. Can

I say something about the credit you gave me?

Senator HOLLINGS. Yes, ma’am.

DECREASED CRIME RATES

Attorney General RENO. You were not here, and I would like to

give you some of the credit and the committee some of the credit,

and an awful lot of wonderful people all over this country. I am not

sure that I should be getting good government awards.

But I do think that the experience that we have had in the last

7 years, as I alluded to earlier with the Chairman, we have an extraordinary opportunity, ladies and gentleman. We can continue

our efforts at reducing crime. We can avoid complacency, which is

what tends to happen when crime rates go down. We can continue

the mixture of efforts of good solid, fair enforcement, intervention,

prevention, and aftercare and follow up. And we can once and for

all end the culture of violence in this country. This country is still

far too violent a nation.

In the time I have remaining—I think this is the last hearing I

will probably have before this committee but I will be working with

you in the months remaining. I want to do everything I can to continue that effort and to expand it in Indian Country, Senator

Campbell. But we have a wonderful opportunity because this committee has been great to work with. You just do it the right way.

Senator HOLLINGS. Well, Chairman Gregg has done an outstanding job and it has been a pleasure to work with him, and I

agree with you.

INDIAN COUNTRY

Let me ask you about the Bureau of Indian Affairs, because we

just had the Secretary of Commerce up. You can tell when election

time comes around, whoopee for the Indians. We have got millions

over in the Commerce Department all of a sudden for Indians. And
63

now we have got an $82 million increase in here for the Indians.

That is for a total of $173 million.

And yet you have got the Bureau of Indian Affairs, and they are

increasing, it appears to me, for the same thing. Have you checked

that out?

Attorney General RENO. Yes, and I am going to tell you on that,

Senator, that it is not election time for me. When I was about 10

years old, an old man walked into the yard and he was covered

with mud. And he said I see you have two Jeeps and my Jeep is

stuck in the mud out in the Everglades, would you come pull me

out? And Daddy and I went and pulled him out. And he was a Firestone tire salesman. He had big super balloon tires and he knew

the Everglades like the back of his hand. And he had the Sippy

Super Suction Snakebite Kit because he had gotten bit so often,

and he attached it to the windshield wiper.

About 2 weeks later he called my mother and he said I have got

a problem on the Indian reservation, babies are dying and sick.

There is an epidemic of something and we do not know what it is,

and they need pumps and blankets. And my mother wrote a story

that appeared in the paper and got a lot of goods and medicine and

the like. And the Indians have been my friends ever since, not just

in election time. I do not even know when election time is, in terms

of my relationship with the Indian community.

And when I came to Washington, I was concerned that the Federal Government, historically, had not done its job with respect to

its trust relationship in Indian Country. As violent crime has come

down in the rest of the nation, it has not come down in Indian

Country. And I am dedicated to doing everything I can to work

with the Bureau of Indian Affairs, to make sure that we do what

is right by people in Indian Country.

When you talk about proliferation, I think the Justice Department, respectfully, and I do not mean to be boasting, but I think

we know better how to do things from a Federal law enforcement

perspective than the other agencies.

Senator HOLLINGS. There was a wonderful doctor named Dr. Arnold Schaefer from Nebraska who headed up the United States Department of Public Health, that did surveys. I happened to ask him

about the hunger in America. And he said they had surveys in 32

countries but never in the United States.

So we gave him 5 years and $10 million. And he came back and

he had the report that we had 12 million hungry. And working on

the thousands of reports that we had over the country to do something about it, the Nixon Administration sent all those reports

down to the CDC, Communicable Disease Center in Atlanta, and

told them do not communicate. That problem has been solved. We

had hunger in the days of Christ. We are going to have hunger in

the days when you and I are dead and gone.

And told Dr. Schaefer not to say anything about it and he could

get reappointed. But if he said otherwise, he was going to get disappointed. So he did say and he was disappointed, and he went up

and got a special study of Indian hunger and study of health. He

got it out of the United States Army. It is very interesting how this

government works.
64

But going into the Indian reservations, he found the chief cause

for Indian fatality and illness and everything else was alcoholism

and diabetes. They had nothing to do.

I got with Senator Montoya and found out, at that particular

time, that we were paying out $25,000 for each Indian. Now we

have proliferated. Indians have really gotten conjugal here in the

last 20 or 30 years because of the casinos. Everybody I run into in

South Carolina wants to get up a tribe and open up a casino.

But we have put millions and millions in there, and now you

have got crime, and we find the millions we are paying for everything from education, health care, crime control, whatever else, on

the reservation, these chiefs somehow take the money and it does

not get down. It is like delivering lettuce by way of a rabbit.

We have got to do something about Indian affairs, but I say Mr.

Chairman, we cannot get into that. One question about the Border

Patrol before my time is up.

BORDER PATROL

Is it the case that they do not have any need for any more Border

Patrol agents? I notice that by the request that is made by the INS

on the Border Patrol, that they are not asking for any really additional Border Patrol agents. Whereas, you are only going to hire,

in other words, 430 when Congress said hire 1,000 new agents

down there on the one hand.

And then, as you are looking at up, Attorney General Reno, with

respect to the pay, I had a note somewhere where they are going

to take them from a GS–7 to a GS–11. That will give them more

pay. But then you come around and, instead of giving uncontrollable overtime provision, they lose that pay. So I am trying to

check into make sure I am giving them an increase in pay. We are

not paying these Border Patrol agents anything, to really speak of.

They can get a good job elsewhere. We just underpay and expect

everything of them, to risk their lives and otherwise.

Fine, let us put them up to a GS–11, but do not take away the

overtime.

Attorney General RENO. Senator, first with your remarks about

Indian Country. We are going to do everything we can to make

sure our money is well spent. And we are going to do it in a comprehensive way.

And Senator, if you saw some of those young people and the

great work that they are doing, you would be really proud. There

is such a spirit, and what we need to do is work with them to fulfill

our trust responsibilities. I am committed to doing that, and I am

committed to doing it in a way that money is spent wisely.

With respect to the Border Patrol, I share your commitment to

the issues with respect to the Border Patrol, and to the need to enhance border security. I believe that more agents are needed along

the border. But rather than asking just for new agents, the fiscal

year 2001 budget request also seeks border technology, which enhances each agent’s force along the border.

In addition, INS is having difficulties hiring new agents with the

economy as good as it is, and some of these isolated areas where

they have to serve, it has been difficult. But we are going to con-
65

tinue our effort and continue to try to provide a balanced effort of

technology and people power along the border.

With respect to the issue of pay reform, we continue to believe

that in order to make significant inroads in recruitment and retention, a fundamental change is required. Those changes include upgrades to the GS–11 level, providing eligibility for law enforcement

availability pay and recruitment bonuses. I think, from all that I

have heard, this will be the package that is, first of all, fairest, and

secondly, competitive.

Senator HOLLINGS. Thank you, Mr. Chairman.

Senator GREGG. Thank you, Senator. Senator Campbell?

INDIAN COUNTRY

Senator CAMPBELL. Thank you, Mr. Chairman.

First of all, Attorney General Reno, as this may be the last time

you appear before this Committee, I want to commend you on your

years of public service.

Anybody that runs for office, or anybody that serves in your capacity, has to take a lot of heat, as you probably know. And you

have. So I wanted to thank you for those years and certainly the

reduction of crime in America, in my view, has been at least partly—and a good part—related to your efforts and your leadership.

So I want to thank you for that.

Senator MIKULSKI. Senator Campbell, I want to be associated

with those remarks. I think they were well stated, and I would like

to be associated with them.

Senator CAMPBELL. Thank you.

Let me talk maybe about Indians a little bit, since you mentioned

it and since our ranking member also mentioned it. You simply

cannot turn around things in a culture that has been in the form

of a forced dependency for 130 years. If you look at all the numbers, as you know, Madame Attorney General, whether it is unemployment of 60 and 70 percent, with its high school dropout, death

by violence, fetal alcohol syndrome, housing, hunger, diabetes, as

you mentioned, all of those things. You multiply what is happening

in America by anything from four and five up to maybe 10 times,

and you get what an average Indian person has to live with on a

reservation.

That cannot be fixed in just a matter of days. And it cannot be

fixed simply by providing more money without some very clear efficient uses of the money, particularly in self-help programs.

I hope I do not offend any people of color in the room, but I will

tell you that I can take you to places in South Dakota where Indians are regularly called prairie niggers in the most vulgar sense

you can imagine. And if they go to stores in some towns, they are

followed because everybody knows they steal.

So I have no problem at all with the emphasis you have put in

trying to help reduce crime on Indian reservations. And I had a

couple of questions about it, too.

One, I sent you a letter about half a year ago. It was regarding

a poster that had been sent to me from South Dakota advertising

‘‘Indian hunting season.’’ I do not know if you remember that or

not, but it was really a mean poster. It talked about how you could
66

go out and kill Indians for sport, how you could hunt them down

like jackrabbits or coyotes or something of that nature.

I received the Department response in January indicating you

had referred that to the FBI. I was wondering, I have not heard

anything from the FBI. Have you heard anything back at all from

them about pursuing how that was printed and disseminated?

Attorney General RENO. I have not heard back. One of the things

that we have got to make sure that we are careful about is First

Amendment issues. We look at all of these issues very carefully,

and I was advised that there may be no basis for action.

Senator CAMPBELL. You mean, people can print fliers advocating

killing somebody else under First Amendment?

Attorney General RENO. Wait, Senator. And I said what?

Senator CAMPBELL. That is what I would have said.

Attorney General RENO. I said at least we have to follow up to

see what the facts are. So we are doing that, and I have not heard

what the conclusion is.

Senator CAMPBELL. Well, when Louis Freeh [ed: Director of the

Federal Bureau of Investigation] appears before this committee, I

will ask him, but I did want to ask you if you had heard anything

about it.

Attorney General RENO. Neither of us should really comment on

what we found or what the status is.

TRIBAL LAW ENFORCEMENT

Senator CAMPBELL. I appreciate that.

Let me go on then to something else that Senator Hollings did

allude to. That is the problem we have with some of the tribes that

are on the Mexico border is that, as I understand it, there is much

more freedom to move back and forth through holes in the fence

on reservations than most people realize in America, and certainly

more than any of us would support. I wanted to ask you about

that.

Does the Department include tribal law enforcement departments when you are talking about people coming across our borders illegally?

Attorney General RENO. Do you mean tribal law enforcement?

Senator CAMPBELL. Yes. Does the Attorney General’s office work

with tribal law enforcement to try and decrease that?

Attorney General RENO. To increase tribal law enforcement in

dealing with illegal immigration?

Senator CAMPBELL. Yes.

Attorney General RENO. I cannot point to specific instances, but

I am sure that the Border Patrol works with tribal law enforcement on a regular basis. What I would like to do, Senator, is make

sure that I have an accurate answer for you, in terms of what precisely we have done.

[The information follows:]

TRIBAL ENFORCEMENT

Several Indian reservations are located on or near the border with Mexico. Two

of the tribes on these reservations, the Kickapoo Tribe in Texas and the Tohono

O’odham Nation in Arizona, have territory adjacent to the border. The Blackfeet Indian Nation in Montana and the Akwesasne/St. Regis Reservation in upper New

York State have territory adjacent to the border with Canada. Several other tribes
67

are located on reservations near the borders but do not own land directly adjacent

to the borders.

Law enforcement activity conducted by Border Patrol agents on Indian lands is

limited primarily to enforcing immigration laws. Border Patrol agents have authority to access, without warrant, any private lands located ‘‘within a distance of twenty-five miles from any external boundary [of the United States] but, not dwellings

for the purpose of patrolling the border, to prevent the illegal entry of aliens into

the United States’’ (8 U.S.C. 1357(a)(3)). The authority of Border Patrol agents to

go onto private land without permission or without warrant beyond the 25-mile border area is governed by the Fourth Amendment rule against unreasonable searches

and seizures. Those reservations with borders passing through them present a challenging working situation for our agents. Border Patrol agents enforce immigration

law on borders intersecting Indian lands by coordinating and cooperating with tribal

law enforcement.

The Border Patrol has a long tradition of striving to maintain good working relationships with tribal authorities and tribal police departments. Border Patrol agents

working in these areas strive to respect Indian lands and authority when entering

onto reservations. Reports from the field reflect an overall cordial to good working

relationship with their tribal counterparts. Reports from Border Patrol stations

along the southern and northern borders indicate that the degree of cooperation between them and the tribal law enforcement in their respective areas depends largely

upon the current tribal police chief. Tribal governments, which choose their own police chiefs, often dictate the kind of relationship that will be maintained with U.S.

counterparts. The process of building these relationships is an ongoing and timeconsuming process for Border Patrol agents. Also, other internal and external factors, not related to law enforcement, often affect this working relationship.

In addition, Border Patrol stations near Indian reservations have received intelligence concerning smuggling of illegal aliens, narcotics, and contraband on these

lands. There is growing concern over the amount of such smuggling. Depressed

economies, diminished personal opportunities for residents of reservations, and the

proximity to the border create an environment that fosters smuggling. With limited

manpower and difficulties patrolling on some Indian lands, the Border Patrol faces

a continuing challenge in performing its duties and maintaining control in these

areas. The Border Patrol will continue to do its part in meeting the challenges

caused by sensitive issues and situations beyond its control by continually trying to

build and maintain solid working relationships with tribal law enforcement along

the borders.

RESOLVING ISSUES IN INDIAN COUNTRY

Senator CAMPBELL. Okay. Well, you got into all kinds of things,

and so did Senator Hollings, dealing with a snake bite, alcoholism,

and everything else. But there is no question that the alcoholism

problem on reservations is high. I know that, even though some of

them have what are called dry reservations. And more people get

snakebit out of bottles than they do by snakes unfortunately.

When you have a depressed economy, a depressed people, and

high alcoholism, you are going to have a lot of escapism through

everything from violent crime to you name it, but I know you are

aware of that.

Attorney General RENO. But what is happening is very exciting

because we had a group come to the Justice Department, at our invitation, to discuss alcohol in Indian Country and determine what

would be the appropriate steps to take. The studies that they had

done indicated, first of all, that it was not genetic or inherent. And

I think everybody should understand that. Much of it arises from

a sense of hopelessness. Where can they pursue job opportunities

while living in distant reservations, being one of the factors?

What is exciting is that when a tribe comes together, when it has

resources, when it can deal with the issue, they are having some

success. I think we can build on that and again, working together,

make a difference, making sure that Senator Hollings is satisfied
68

that we are not wasting money. I am very encouraged by what we

can do and very encouraged at the spirit of the tribes that we have

been working with.

Senator CAMPBELL. Well, I am concerned about it, too, and I am

not into wasting money. But unfortunately, a lot of the Federal regulations make it almost impossible for tribes to be able to expand

their opportunities, as you probably know. Casinos, in some cases,

have done that, but only about one out of ten is really profitable.

A number of them have already gone into receivership, as you

probably know. The casinos surely are not the answer.

COPS IN SCHOOLS

Let me get away from that, if I can. Let me just ask you about

the COPS in Schools program. I introduced the legislation that established the COPS in Schools program. It was signed into law October 27, 1998 by the President. And certainly, I thank Chairman

Gregg for really going to bat for that bill, and all the members of

this committee who really helped with it.

But I did want, as my last question in this round, to ask you how

is the COPS in Schools program going? Because as you know, unfortunately, I introduced it before Columbine and it certainly did

not help there. But I understand that more schools are availing

themselves to police being resource people in the schools. Do you

know how that is working?

Attorney General RENO. I do not have statistics for you. All I

have are anecdotes that it is working beautifully. When you have

a police officer in the schools whom the kids and the administration and the teachers can work with, it is one of the most effective

partnerships that can be built in a neighborhood or a community.

And from that, so much more can come after school and in the

evening.

Police officers can be key in teaching kids to resolve conflicts

without knives and guns and fists. They can become mentors. And

they can become problem solvers. When the police officer is trusted

in the community, people will come and give him tips that solve

some of the more serious crimes.

It is an excellent way, done right, to build a community and

bring a community together, rather than split it apart.

Senator CAMPBELL. I would like to know if you can find the number, how many resource officers have been placed. I think this committee would appreciate that number.

Attorney General RENO. You will get that.

Senator CAMPBELL. I know that not many schools were particularly interested before Columbine, and that a number of our

schools in Colorado are now.

Thank you, Mr. Chairman, I will relinquish the mike.

[The information follows:]

NUMBER OF RESOURCES OFFICERS PLACED IN SCHOOLS

More than 9,900 COPS officers are working to some capacity in local schools.

More importantly, of the 2,200 full-time COPS in Schools officer grants funded to

date, over 307 officers have been placed on the beat to work full-time in local schools

and an additional 70 are in training.
69

2001 FUNDING FOR COPS IN SCHOOLS

Senator GREGG. On that point, Madame Attorney General, we

cannot find any funds in this budget request that came up for

COPS in Schools. This committee funded that aggressively last

year but there is no money in here specifically allocated for that.

There is $80 million in a general statement for school violence, but

that is not specifically to this account.

Attorney General RENO. Let me check on that, Mr. Chairman,

and understand exactly where we are at.

More than 9,900 of the 60,000 cops that had been put on the

streets, to date, are working in local schools.

Senator GREGG. About one out of six is working in schools as volunteer time?

Attorney General RENO. That is correct.

[The information follows:]

The COPS Office derives authority and funds for the COPS in Schools (CIS) program through the existing Universal Hiring Program. Therefore, within the total

amount of hiring funds requested ($422,286,000) in the President’s Budget, COPS

will continue to provide grants to localities to hire School Resource Officers, according to the demand for these grants.

Senator GREGG. Thank you. Senator Hutchison?

BORDER PATROL

Senator HUTCHISON. Thank you, Mr. Chairman.

Madame Attorney General, the Illegal Immigration Reform Act

of 1996 is very clear. It states that the Attorney General, in each

of fiscal years 1997, 1998, 1999, 2000, and 2001 shall increase by

not less than 1,000 the number of positions for full-time active duty

Border Patrol agents in the INS.

This year you requested, in your budget, 1,000. But in fact, the

President has come back with 430. In fact, in only one of 5 years

did the President actually request 1,000 agents and in none of

those years did you actually produce 1,000.

I think the lack of emphasis of this Administration on keeping

illegal activity from coming across our southern border is appalling.

I share the view of many on this committee about your integrity.

But the lack of emphasis on Border Patrol is a lapse for which we

are paying dearly.

In fact, it is estimated that $10 billion in illegal drugs has come

across our border in the last year. One billion dollars was apprehended. So the other $9 billion is somewhere in our country.

I want to ask you a direct question. We included an amendment

in this appropriation bill in language that said if we did not hire

1,000 new Border Patrol agents, as was required, by June of this

year that the money would be used for an increase in pay for nonsupervisory agents serving at the GS–9 level to the GS–11 level.

I wanted to ask you what is the progress of hiring this year. And

do I have your commitment that this pay raise will be made in

June if you have not reached the 1,000 goal?

Attorney General RENO. First of all, let me address your earlier

comments. I appreciate your comment about my integrity but I

think I have just been blamed for all the drugs and the illegal activities. If I am responsible for it, I accept the responsibility.
70

But I think what we have been able to do in reducing crime

might be a good model for what we can do along the borders, both

southern and northern. When I came into office I found an agency

that had been sorely neglected. It did not have resources. It did not

have cars, in some instances, for Border Patrol agents. It did not

even have radios in some instances. Others did not have vests.

We have built the Border Patrol significantly in these last 7

years. We have reduced crime in some of the areas along the border, and we have tried to deal with these issues. I think it is important that we look at the whole history and work together to try to

address these problems.

BORDER PATROL PAY REFORM VERSUS PAY RAISE

Now with respect to the issue of pay, we have proposed a comprehensive pay reform. I think the best way to do that is to work

together to try to develop that. And I will commit to doing that,

and I will commit to coming by and talking with you and doing everything we can to do it the right way.

Senator HUTCHISON. Will you comply with the intent of Congress

that the GS–9 level will go to GS–11 in June if you do not reach

the 1,000?

Attorney General RENO. I would be happy to check and see and

come by and tell you what I can and cannot commit to.

Senator GREGG. Senator, on that point could I just get a clarification? Because Senator Hollings asked the same question and I

thought it was a good question. Are you offsetting the pay increase

from GS–9 to GS–11 by eliminating overtime?

Attorney General RENO. But it is starting in October. It is not

June.

Senator HUTCHISON. But Madame Attorney General, our provision last year said if you did not have the 1,000 by June, the

money that would not be spent that we allocated for the 1,000

would go for the pay raises. That is for this year. That is in lieu

of the October effect of the 2001 budget.

Attorney General RENO. As I have said, my understanding is

that that is report language. What we have proposed is a comprehensive pay reform package. What I would like to do is sit down

with you, go over what you propose, go over what the comprehensive pay reform package is, and see how we can do it as wisely as

possible.

Senator HUTCHISON. Madame Attorney General, it was report

language. But the absolute intent of Congress was for the money

that you could not spend that is in our budget in June, if you were

not going to be able to spend it on hiring new agents, that it would

immediately go to the GS–9 increase up to GS–11. Because we

know we have retention problems with this level of employee.

And we, as a Congress, directed you to do that. Why would you

consider it necessary to wait until October when we have not met

the 1,000 goals yet in your administration?

Attorney General RENO. I will be happy to address it and get

back to you and see just what should be done. And if I think that

the pay reform package best meets the needs of reducing attrition,

attracting the best people, maintaining the Border Patrol in the

best way possible, I will come talk to you about it.
71

Senator HUTCHISON. Madame Attorney General, obviously you

are not going to—— Attorney General RENO. I am not trying to be obstinate, I

just——

Senator HUTCHISON [continuing]. Keep the word today that we

have given you clear mandates to keep. I cannot, in my wildest

imagination, imagine what could be more important for the expenditure of the funds that we have allocated for hiring 1,000 new Border Patrol agents, if that money is not going to be spent mid-year,

that you would not take the step directed by Congress for you to

take, which would be a bold statement that border control is important in this administration, when you have all the evidence that illegal drugs and illegal immigration is occurring in droves.

I understand that you are clearly not going to give us your word

today.

Attorney General RENO. You do not want me to give you my

word today because if I had given you my word, Senator, and I

backed off on it, I would want you to really speak sharply to me.

Senator HUTCHISON. How about giving us your word today and

keeping it?

Attorney General RENO. What I have found is that it is better

not just to react, but to sit down, look at it, come talk to you, hear

you, and then tell you what I can and cannot do. And then if I tell

you I am going to do something, you ought to expect me to do it.

Senator HUTCHISON. Madame Attorney General, you have been

directed by Congress, as of October 1 of last year, that this is a priority, that if you did not have the hiring by June 1, that this is

where we believe the money should go to address retention problems in the Border Patrol. It is not like I sprung this on you this

morning. This has been part of the bill that you have been living

with since last October.

Attorney General RENO. And what I am suggesting is my understanding that that was report language. I would just like to sit

down and give you my reasons for it after I have reviewed everything, and then try to do what I say I am going to do.

Senator HUTCHISON. With all due respect, Madame Attorney

General, report language is the will of Congress, and I would hope

that you would comply with it, even if you will not agree to comply

with it this morning.

Attorney General RENO. Well, I am going to do my best to do

what I think is right and I am not trying to be obstinate with you.

I am just trying not to make snap judgments when we have tried

to carefully think about a pay reform package.

And Senator, I bet you do not know any other—you talk about

a commitment to border issues. I bet you do not know any other

Attorney General that has been to the border as much as I have,

or who has tried to back up the Border Patrol as much as I have.

They do a great job and we are going to do everything we can to

give them the resources, not just on the southern border but the

northern border, to do the job.

Senator HUTCHISON. Madame Attorney General, I think the

record of this administration is abysmal on our southern border.

We have given you a directive for 5 years to hire 1,000 new Border

Patrol agents. And when I asked Doris Meissner if we were giving
72

incentives for Spanish language proficiency, she said no because we

have teaching classes in the INS to teach people basic Spanish.

That is outrageous, when we have so many people who would be

qualified and could hit the ground running. We did not even test

on the border. We required people to go up to Dallas and Fort

Worth to have the testing for Border Patrol. These are things that

we brought up because we heard it from the base down on the border, where we had the most resources.

I just have to say that I think success in meeting the mandate

of Congress to increase Border Patrol by 5,000, when Barry McCaffrey says we need 20,000 and we are not halfway there, I do not

think the record stands for itself. I do not think this is a surprise,

you have had 6 months to comply with the June 1 deadline to raise

the GS–9 to GS–11. And I just hope you will consider it.

Senator GREGG. We are going to have to move on.

Attorney General RENO. Senator, there are 150 percent more

agents on board now than there were in 1993.

Senator HUTCHISON. Woefully short.

Senator GREGG. We are on to Senator Lautenberg.

Senator LAUTENBERG. I am going to defer, if I may Mr. Chairman, for one moment that I have promised to Senator Mikulski.

REMARKS OF SENATOR MIKULSKI

Senator MIKULSKI. I thank the Senator from New Jersey.

Madame Attorney General, I have to leave to be with Governor

Glendenning, who is hosting a meeting with all of the governors

with the members of the Senate. But I could not leave today without thanking you. Thanking you for the outstanding job you have

done as Attorney General, the service you have provided to the Nation, the excellent team that you have had working with you, and

I do know that we are safer, our streets are stronger, our borders

are stronger than when you took office.

So I just wanted to take this opportunity to thank you, wish you

Godspeed, and lots of good health.

Attorney General RENO. Thank you very much, Senator. It has

been a pleasure to work with you.

Senator GREGG. Senator Lautenberg?

REMARKS OF SENATOR LAUTENBERG

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

Attorney General Reno, I am glad to see you. You and I are in

the senior class and we will be graduating with this term. It is

kind of the end of our relationship at the U.S. Senate campus.

I know that all of us feel that you leave having compiled an illustrious and distinguished record and I commend you for your tenacity and for your ability to get the job done. The statistics only serve

to substantiate the views that we have of the job that you have

done. I admire so much the fact that you seem so even-tempered

through it all. I am not sure that if some of us were on that side

of the table, the volume of response, and perhaps the acidity of the

language might have changed. I commend you for that, as well.
73

GUN VIOLENCE

I want to get onto a question about gun violence. In your statement, you point out the fact that there are still 33,000, approximately, gun deaths a year in this country, far, far too many, and

especially if you compare us to other societies around the world.

One wonders why we cannot do better there. We keep on thinking,

at least I speak for myself here and I am sure for many of my colleagues, I keep thinking that we have seen the ultimate outrage,

the ultimate assault on our families and our children and our sensibility. You would think that that would turn into a positive legislative response instead of the old saw that says guns do not kill,

people kill. It is so trite and so unbelievable.

And yet, we cannot seem to move sensible gun legislation in this

country. The Second Amendment does not say that you can buy an

unlimited number of guns or that you can store them any way you

want. There are no specifics about what you have to do with the

guns, and we have every right therefore, to adopt reasonable gun

safety measures even if one said okay, take the Second Amendment

as it is. But at least we are going to make sure that if you want

to buy one of those things you have to have a background check.

The thing that I have worked on so hard was closing the gun

show loophole. Rather than for the gun lobby to come in and say

okay, look, this is not going to hurt us. It is not going to do anything to diminish our love of guns or our support for gun ownership. Just common sense. So instead of trying to cooperate, the response is always negative, some ridiculous response that says that

we want to take away everybody’s gun.

There may be some people who would like to do that, but we

know that that is improbable, if not impossible.

I want to ask you this. Do you hear from police officers, Federal

law enforcement people, people who are working in the field, people

who are out there working to enforce the law, do you hear from

them about the gun show loophole?

Attorney General RENO. In these last months and year, I have

heard from a whole range of people about the gun show loophole,

and I appreciate your leadership in trying to close it.

Senator LAUTENBERG. I thank you. Again, I am still trying to

fathom what it is that prevents the gun lobby from simply saying

yes, go along with this. Why the urgency to get that gun immediately, especially from unlicensed dealers. You could be a member

of the 10 most wanted list, go up to the counter, put your money

down, and no one will ask you a question, not one question. With

regard to the terrible tragedy at Columbine, Robin Anderson, recently testified before the Colorado legislature that she went with

Klebold and Harris to a gun show and they looked for gun dealers

who they knew would not ask them one question about who they

were or anything like that. She said it was too easy to buy guns.

What in the world can possibly be wrong with background checks

at gun shows?

Attorney General RENO. We have kept guns out of the hands of

criminals through the checks that have been run. Why they should

not be run with respect to gun show situations is beyond me.
74

THE BRADY LAW

Senator LAUTENBERG. What do you think would happen if law

enforcement was limited to even shorter periods for background

checks? Let us say 24 hours to conduct criminal background checks

on gun buyers? Would that impair their ability to run even the

most cursory check?

Attorney General RENO. The Brady Law now currently allows

law enforcement up to 3 business days to complete a background

check on a prospective gun buyer. This is very important. But it

does not mean that all buyers have to wait 3 days.

In fact, about 75 percent of gun buyers wait less than 3 minutes,

and 95 percent of all gun buyers have their checks completed in

less than 2 hours. But for a very small number of gun buyers,

about 5 percent, that 3 days can make a significant difference.

Senator LAUTENBERG. And if we were to reduce that, because I

have seen complaints registered by the FBI and by the BATF that

if we were to shorten this period—as it is there are a number of

people who escape through the loopholes now with shorter periods

for background checks, the number of prohibited people getting

guns would go up substantially.

In your view, are stronger laws necessary to reduce juvenile

crime? Are stronger gun laws necessary? Or is it simply a cultural

thing, in your judgment?

Attorney General RENO. I am not sure I understand.

Senator LAUTENBERG. The statements that so often come out are

that we should just enforce existing laws, we do not need to create

more laws. Does that make sense to you?

Attorney General RENO. Those people suggest, I think, that they

would rather see the crime committed and then somebody take action, rather than trying to prevent it from happening in the first

place. And I think sensible approaches to the purchase and use of

guns can prevent, as we have seen what the Brady Law can do, can

prevent guns from getting into the hands of people who are not

lawfully entitled to have them.

Senator LAUTENBERG. I close, Mr. Chairman, and thank you for

your indulgence, with a statement about the law that I authored

to take guns away from domestic abusers and the battle that we

had, and the names that I was called. We have stopped about

33,000 people, since that law has been on the books, from getting

guns because of spousal abuse. We have the trauma that a child

experiences when a mother typically, or a girlfriend, has a gun

pointed at their head.

Thank you, Mr. Chairman.

BORDER PATROL PAY RAISE

Senator GREGG. Before I turn to Senator Domenici, I would just

like to note that I would like to work with Senator Hutchison, Senator Hollings, and I am sure other members of this committee, on

this Border Patrol issue. Should there be a supplemental, I would

think we would want to put in the supplemental language directing

that the pay raise begins on June 1 and that it not be offset by the

overtime issue.
75

Senator HUTCHISON. Thank you very much, Mr. Chairman, I appreciate that.

Senator GREGG. Senator Domenici?

RIO ARRIBA COUNTY

Senator DOMENICI. Thank you, Mr. Chairman.

Madame Attorney General, first, I want to thank you for the

joint effort that you involved your department in with regard to

Northern New Mexico and the black heroin scourge that existed in

a county up there called Rio Arriba County. As a result of the effort, a very large arrest has taken place of open heroin dealers. The

community is much calmer. They are working on some long-range

plans. I just hope that whomever you have that is looking at that

would continue to look at it and continue to have some cooperation

with state, FBI, and other agencies.

I did not bring it to you because I wanted to bring a county in

New Mexico to get special attention, but rather it was a county

where more deaths were occurring because of black tar heroin,

more overdose deaths, than anyplace in America. I thank you for

that.

Attorney General RENO. Senator, I thank you for doing it because what we have learned there, as we are learning across the

Nation, when we approach something from a comprehensive point

of view, whether it be meth getting a toehold in a new community,

or something such as what occurred in New Mexico, and go after

it in terms of vigorous enforcement, but develop long-range plans

that can address treatment issues as well. It can be extremely successful and I thank you for your leadership.

SOUTHWEST BORDER DRUG PROBLEM

Senator DOMENICI. Madame Attorney General and fellow senators, I was asked by the judges from the Federal districts that include California, Arizona, New Mexico, and Texas, to attend a conference they held in Albuquerque, New Mexico. That conference

was held because they wanted to discuss and bring to the public

attention, and to your attention and other officials, that 30 percent

of all of the criminal indictments are taking place in those four

States. Of all America, because of the pressure on the drug pushers

and the like, those four States are getting 30 percent of the Federal

crime indictments and prosecutions.

Clearly, they are not equipped, either at the court level in terms

of sufficiency of judges, or the marshal level, or in incarceration on

an interim basis by the Marshals Service, to handle such a huge

caseload. The more we put pressure on, the more we follow the lead

of Senator Hutchison and others, and put more people guarding

our borders and making arrests, the more these four districts feel

this inordinate pressure from having to try cases beyond their capacity.

I would like very much, since you do have some extra money in

the budget, the President asked for some, I would ask you to look

at those four areas. It is not New Mexico specifically, but Arizona

has a terrible problem, the Texas courts have an enormous problem, so does California. We need somebody looking at setting some

priorities.
76

Otherwise, what is going to happen is we are going to continue

to put the pressure on, and then in a couple of years they are going

to be saying they cannot try any of them, or they can only try 10

or 15 percent. This is a rather serious problem. I wonder if you

know about it? And if you do, are you working on it? And if you

do not, would you?

Attorney General RENO. Yes, we do know about it, because we

are the ones that have increased the filings. Alan Bersin was the

head of the Southwest border, he was my representative down

there, and he designed the system. So we initiated it to try to deal

with the issues that we share a concern for.

We have got to plan all the way down the line to do it, because,

as we are successful in the courts, then we will see an increase in

the prison population.

But the other thing we have got to really focus on, as well, is

that it is not just the Southwest border, in terms of illegal aliens,

in terms of drug smuggling. It is the country, and we have got to

make sure that we have got a balance, based on drug related

crime, and crime related to illegal aliens.

Senator DOMENICI. I understand that, but I just think it is relevant to our Nation that 30 percent of all of the criminal trials are

occurring there. Regardless of what it ought to be, they are there.

I do not think they have the capacity to handle them. I hope we

will be looking at it, and I hope you will be looking at it.

Attorney General RENO. We have looked at it very carefully, and

we are trying to do everything we can.

INDIAN JUDICIAL SYSTEM

Senator DOMENICI. Senator Campbell, I was not here when you

spoke of the criminal justice system, or lack thereof, on Indian reservations. I want to tell the Attorney General, I went to Indian

Country, in particular Navajo country, to look at their judicial system as part of a 2-day trip to the largest Indian tribe in America.

I would challenge anybody that is concerned about Indian justice

and the Indian courts, to go look at what the largest Indian tribe

in America has to house its judiciary. We are expecting them to

have a court system. We pay a little bit of money for a court system. It is evolving.

Senator Hollings, if you went down there and said where does

your Supreme Court sit and where does your District Court sit for

jury trials, you would be absolutely amazed at the kind of facilities

they have. They are no more symbolic of what justice ought to be

and hold something out to people. They are little huts and little

buildings that have been added. Jury trials are held in a quonset

hut–type facility that, in America, we would immediately say that

is exactly the wrong symbol to give about the importance of justice,

to have such second-rate facilities.

So I know there is more money in this year’s budget for those

kinds of things. I wonder if you would just take a look, as you answer some of my specific questions, at what is going to be done in

Navajo country with reference to their court system, which I think

is in desperate need.

I will submit the other questions as to specifics that I would like

to ask, about how you are allocating resources in the court system.
77

Attorney General RENO. Thank you, and I will get back to you

on specifics for Navajo country. But you will see, in our budget request, a significant increase requested for law enforcement in Indian Country.

Senator DOMENICI. We did not get quite what we asked the

President. We had a big meeting with him and we got less of an

increase, but we got something like a $90 million increase for

criminal justice.

[The information follows:]

IMPROVEMENTS TO JUDICIAL SYSTEM IN INDIAN COUNTRY

There is a severe lack of resources for law enforcement in Indian Country. Many

of the 1.9 million Indians living on or near Indian lands do not receive even minimal

law enforcement services. Indian communities lack sufficient trained law enforcement personnel, have few adequate jails, and face chronic under-funding of their

justice systems.

The impact of strengthening tribal justice systems is far-reaching. It benefits Native Americans in Indian Country and raises the level of respect for their adjudicatory role with Indians, non-Indians, and state and Federal judges. Tribal justice systems are essential mechanisms for resolving civil and criminal disputes and family

problems arising on Indian lands. Strong tribal justice systems also encourage the

development of, and investment in, Indian land by Indians and non-Indians. Moreover, interaction with Federal and state judges on Indian issues will improve communication and coordination between jurisdictions, which are intimately connected,

but know very little about each other. Informed decisions by tribal, Federal and

state judges are essential in the delivery of justice for Indian people and others residing on Indian lands.

In the 2001 President’s Budget request, OJP proposes the following initiatives:

Indian Tribal Courts.—In both 1999 and 2000, $5 million has been appropriated

for the Tribal Court Program. In 2001, a $10 million enhancement is requested for

this program, bringing the total program level to $15 million. This program is designed to provide resources for the necessary tools to sustain safer and more peaceful tribal communities by focusing on juvenile and family issues, as well as non-traditional approaches to justice, enhancing the administration of civil and criminal

justice on Indian lands, and encouraging the implementation of the Indian Civil Act

by tribal governments. While promoting greater cooperation among tribal, state, and

Federal justice systems, this program assists tribal justice systems to coordinate

programs and services within its tribal structure with law enforcement, victims

services, treatment providers and others. Tribal Courts also assists with technology

development to ensure that tribal justice systems can communicate within the tribal

and non-tribal justice community. Just as in other parts of the country, crime has

spread on reservations at a rapid rate, thereby increasing the need for criminal adjudication in tribal courts.

Tribal Criminal and Civil Legal Assistance.—$6 million is requested to develop

and enhance the legal services provided to Indian tribes through a mix of program

funds, training and technical assistance, and program research and evaluation. The

$6 million requested will provide for the following:

$4.5 million, for the Tribal Criminal and Civil Legal Assistance Program, will provide Indian tribes, tribal consortia, and private/non-profits legal services organizations serving a reservation-based constituency resources to develop or enhance their

capacity to provide criminal and civil assistance.

$1 million, for discretionary grants to the 31 existing Tribal Colleges to create,

develop and enhance a 2-year curriculum on paralegal studies, law advocate studies,

indigenous justice systems or other areas directly related to criminal and civil legal

assistance.

$500,000 will support a variety of activities, such as, training and technical assistance, research and evaluation, and data collection.

RADIATION EXPOSURE COMPENSATION PROGRAM

Senator DOMENICI. My last question has to do with something

way over on the other side of the spectrum, the radiation exposure

compensation program. Believe it or not, you have a big hand in

that also, along with all these other things we are talking about.
78

We are being asked to put $7.2 million into the radiation exposure compensation trust fund. Will you just generally tell me, why

do we need that now? Last April, I would just add, you finalized

additional regulations under that exposure act, for which $21.7 million was requested by the administration. Why do we need this urgent amount at this point?

Attorney General RENO. Here is what I understand. We project a trust fund shortfall of approximately $7.2 million, as noted. We

requested the $21.7 million. That request assumed implementation

of regulation changes and enactment of statutory changes similar

to those proposed by the administration in 1997. Congress appropriated $3.2 million. The $3.2 million appropria- tion plus carry forward from 1999 and interest provided $11.8 million in availability. Payments of about $19 million are projected,

assuming about 228 awards will be approved in the year 2000. The

resulting shortfall is the estimated $7.2 million.

The conference report accompanying the fiscal year 2000 Appropriations Act stated that the administration has expanded the

number of claimants, through the issuing of regulations when Congress has not chosen to do so through the normal legislative process. No additional funding is provided to cover the claims of the individuals provided for.

Congress took these actions because it mistakenly assumed the

Department of Justice modified the regulations in order to circumvent the legislative process. In fact, the modifications did not

expand the program beyond Congressional boundaries, nor create

a new category of claimant. The changes were made to keep the

program in line with the current consensus of medical opinion.

Congress delegated to the Attorney General the authority to issue

regulations in Section 6 of the Radiation Exposure Compensation

Act. Because the regulations carry the force and effect of law, the

program cannot legally distinguish those claims that can only be

approved under the original regulations, as was suggested in the

act, in the report.

Senator DOMENICI. I have about six more specific questions, but

I will submit them on that issue. I will just close by submitting

three written questions.

We are asking questions about the Government Performance and

Results Act of every subcommittee, because there is no use having

put that on the books and then not get some actual results, in

terms of objective analysis. So I have some questions about that,

and also about the expenditures that you have for the first responder training program. It is easy to forget about, but if we have

one of these national disasters, we will be asked what happened to

the first responder program.

So I am wondering whether you are allocating the money correctly, and I have a few questions on that issue.

Attorney General RENO. Thank you, sir.

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

Senator GREGG. Thank you, Senator.

First responder is a big issue and this committee has tried to be

very sensitive to that, and we certainly want to work with the Senator from New Mexico to make sure, if he has got some concerns,

that we follow up on them.
79

ELIMINATION OF MAJOR GRANT PROGRAMS

I want to address quickly here the COPS program, because first

off, as I look at the budget as it was presented to us, there are

some fairly significant reductions in what this committee has traditionally funded in order of law enforcement to assist local law enforcement agencies.

For example, the local law enforcement block grant is not funded

at all. That is a $500 million item. The juvenile accountability incentive block grant is not funded at all, and that is a $250 million

item. And the State Prison Grants programs is funded $75 million,

and that is a $686 million item. That means you are talking somewhere in the vicinity of $1.3 billion in funding that has traditionally been going to local agencies.

I guess my first question is why did you eliminate those?

Attorney General RENO. First of all, I would like to just take a

personal moment to tell you that I am the one, perhaps more so

than anybody else, that is not going to forget about first responders. I have a nephew who has been a city of Miami fireman for a

year now, and I have seen some of the circumstances. And I will

assure that for as long as I am here, I am not going to forget first

responders.

With respect to State and local, the juvenile accountability

grants and the law enforcement block grant, what we have tried

to do, in general terms, is react based on principles of federalism,

recognizing—and I think most everybody on the committee would

agree—that State and local law enforcement should not be dependent in a permanent way on the Federal Government, but that it

should be able to operate independent and perform its functions

based on State revenue and State resources and local resources.

Where the Federal Government can play a very important role

is addressing emergency situations, addressing new ideas, to try

them out, to see if they work. Examples being the drug court, the

COPS program, to use the monies as wisely as possible to ensure

that we are able to evaluate what is done with the money and

make sure that we are spending it as wisely as possible.

COPS BUDGET

Senator GREGG. Let me stop you there. If that is the case, if that

is the philosophy behind the cuts, then I guess my question is why

give the COPS program a significant increase? The appropriated

funds last year for the COPS program were $595 million. You have

asked for a $740 million increase in appropriated funds for the

COPS program.

The National Police Chiefs Association has made it fairly clear.

Now we have reached the 100,000 COPS on the street last May,

so the 100,000 commitment has been reached. You talk to the police chiefs, and they will say very bluntly, and in fact I think it is

their public policy right now—I may be wrong, but I do not believe

I am misquoting it—their public policy is that they do not need

more officers on the street funded by the COPS program.

What they need is the technology assistance and the capacity to

get the officers already there skilled, through training and technology so that they can fight crime.
80

So I guess my question is, if your logic is that you should not be

undertaking local responsibility, and you view LEA [Law Enforcement Assistance], Byrne grants, and the prison grant program as

local responsibility, and if you have local police officers saying what

they want for local responsibility is things like LEA and Byrne,

which both address the technology and the training issue, then

why would you come forward with a request that significantly increases the COPS program, which is putting police officers on the

street, which is the ultimate local responsibility?

Attorney General RENO. I have been hearing from some other

people, if you have not been hearing, that people still need COPS

in order to address the issues.

Senator GREGG. Is this not a local responsibility, COPS? Is not

putting a police officer on the street the ultimate local responsibility, which you just said was not an appropriate action for us to

pursue in these other accounts?

Attorney General RENO. I think on a permanent basis. But as I

said earlier, Senator, we have a chance to end the culture of violence in this country, not to let up until we really turn this around,

not let up until we develop a capacity in this nation to deal with

violence so that we are on the equivalent with most other large nations in the world, large industrial nations.

We are trying to do it wisely. For Indian Country, that has not

had an opportunity, we are trying to address the issues there,

which go to personnel needs. For the school resource officers, we

are trying to address that through the universal hiring program.

We are trying to use it as wisely as we can. And we have also increased technology funding from $230 million in fiscal year 2000 to

$350 million in fiscal year 2001. We are working with the International Association of Chiefs of Police, and other police organizations, to make sure that we use the technology as wisely as possible, to avoid duplication, to avoid fragmentation, and to make

sure that we are linked in terms of communication, in terms of information exchange, and in terms of the capacity to use DNA for

the remarkable tool that it is.

INCONSISTENCY IN FUNDING GRANT PROGRAMS

Senator GREGG. I appreciate all that, but I do not think it gets

to the underlying question, which is there is an inconsistency here.

Not only are you suggesting that we hire more police officers, above

the 100,000 which were originally proposed, but now you are suggesting we start a community local prosecutor’s office and we start

hiring local prosecutors and police officers.

And yet, at the same time, you are saying we should not be funding LEA, block grants, Byrne grants, and prison grants, which are

all part of the continuum of law enforcement. There is a disconnect

here.

It seems to me that you are initiating something like 19 new programs under the COPS program, the community investigators,

prosecutors.

Attorney General RENO. There is not a disconnect, because what

we are trying to do is to show that the experience with community

policing can be enhanced and that, as a project for a community,

let us look at community prosecution. Let us see what we can do
81

when a community is given enough resources in a focused way to

see what happens when a neighborhood knows who its prosecutor

is, knows the judge, knows the police officer, knows the probation

officer, and works together with them in building trust to bring a

community to a safer situation and to a less divisive situation.

And I am not suggesting the Federal Government should fund

the community police officers forever and ever, nor am I suggesting

that they fund community prosecutors or community police officers.

But these are examples of what we can do to show that something

works. Or maybe it will not work and we scrap it.

Senator GREGG. Let me just make this policy point. You have

eliminated three of the major funding streams that run to the local

police force. You have increased and created a brand new initiative

in the area of the COPS program, not only in adding more cops

above what was originally requested, but adding this community

prosecutors program and 19 other programs on top of that.

And at the same time, you have not funded the Border Patrol.

The 3,000 we originally requested is now, I do not know how far

behind you are, but you have reached maybe half of that. And we

need more than that. We need more than the 3,000. And that is

a Federal responsibility. Protecting our borders is a Federal responsibility.

So if you are going to use your logic on LEA and Byrne and State

prison grants, we should use it on COPS, and we should probably

take all this money that is being proposed here, new program

money, and put it into the Border Patrol, which is a Federal responsibility. We are not doing well there and fully fund the Federal

Border Patrol. Fund them so that they are adequately paid. GS–

11, grade 11 is not even an adequate level.

As a result, I am thinking, and this is just something I am germinating. I am thinking maybe I will accept your LEA numbers

and when the police officers come to me and complain I will say,

hey, it is an administration decision. Maybe I will accept your

Byrne number and when they come to me I may say, hey, this is

the administration position. And I may even accept your prison

grant program and when the governors come to me, who I am

going to see in a few minutes, I will say that was the administration’s decision.

At the same time, I may say we are not going to do any of these

new programs. We are going to fund the COPS program in the way

it was supposed to be. And let us really put some serious money

into the Border Patrol where it should be, which is a Federal responsibility, and follow your logic to its appropriate conclusion.

Attorney General RENO. I like the way you take my logic, but I

take it a different way. So let us look at it from the point of view

of how we can hire the Border Patrol, how we can keep them, how

we can train them, how we can deal with it, and I will work with

you in every way possible to achieve that.

Senator GREGG. Senator Hollings.

HIRING BORDER PATROL AGENTS

Senator HOLLINGS. Let me, Madame Attorney General, get this

record clear because you indicate you intend to hire 1,800 agents

this year. Only 430 positions are for the 1,000 authorized and fund-
82

ed for the year 2000. The money is there, as Senator Hutchison has

pointed out. And 600 of those positions are for the positions authorized and funded back in fiscal year 1999. So the remaining 770 positions are for attrition.

How do you justify proposing only to hire 430 for the year 2000

when Congress directed you to hire 1,000? I think that is what

other senators want to know and what I would like to know.

Attorney General RENO. What we are faced with is the fact that

it is very difficult to find people who want to go out to the border,

or go to lonely spots along the border, in a time of very low unemployment, in a time where they can find jobs in other places. We

are constantly trying to review our recruiting procedure to see

what can be done along those lines.

Senator HOLLINGS. Well, you start them off at a GS–7, at

$28,000. That is one of the obvious reasons you cannot get them.

Why they are able to hold on to any of them is this overtime pay,

what we call administrative uncontrollable overtime provision.

That is fine. But when you try to buck them up to a GS–11 and

give them almost $42,000, I am told that you are then going to lose

the law enforcement availability pay provisions which eliminates

that overtime. In reality, they could actually lose money from the

switch, rather than make more money.

Can you look into that, or respond now? Maybe the Assistant [ed:

Assistant Attorney General Stephen Colgate] here knows the actual fact, but that is what I am told, that they are going to end

up, when it sounds better, they are going to go up to a GS–11, they

are going to be eliminating the overtime and so they are not going

to get as much.

Attorney General RENO. Senator, my understanding of the pay

reform package provides not only for the upgrade to GS–11, not

just for the availability pay, but also for a special factor that will

adjust for the administratively uncontrollable overtime. I would

like for Mr. Colgate to come by and show you just what is involved,

so that you will feel comfortable with it.

Senator HOLLINGS. Well, the reality is that we are getting an administration some day that will put in a Marshall Plan for Mexico.

There is not any question, Mexico is our friend, our neighbor, our

responsibility. We have been going over the same drill year in and

year out. They bring in these presidents and the American Enterprise Institute gives them the outstanding industrialists of the year

award, and everything else like that, whoopee for NAFTA. And

they end up as a fugitive from justice.

The whole thing is crooked. Under NAFTA they are making less

pay. We have lost jobs there. It is corporate corruption galore down

there, as well as the crime. And so it will continue on. You just

smooth over that 2,000 to hire enough Border Patrolmen until you

get some basic change in the Mexican government down there. It

is going to cost money and it is going to take money that I am willing to spend. But rather than spend it down there to finance Wall

Street, because that is what we did when they devalued the peso,

the $12 billion went down to Mexico and then back on up to Wall

Street and they got no advantage or improvement from it.
83

ATTORNEY OVERTIME

Talking about the retirement, though, in pay, we have got almost

a cancer, I think, in these assistant U.S. attorneys. They have got

9,000 attorneys who have joined in a suit for overtime. Can you tell

the assistant U.S. attorneys that they come for public service and

not to make money?

We Senators know how to make money. We can get out and

make more. I have had two leave my staff in the last year, making

$400,000 and $500,000, so we know how to go and make money.

We get these bright young folks that come in, they get the experience, they are willing to try cases and everything else, but now we

have got almost a tenure. We passed a bad law back in 1988 and

gave them tenure and of the thousands of assistant U.S. attorneys,

you have got a bunch of them just sitting around and worrying

about overtime.

We put in, under the leadership of our chairman here, a ban for

1 year of that overtime pay. I think we ought to make it permanent

and maybe repeal that 1988 statute, so we will take away the tenure maybe.

Senator GREGG. That makes sense. Maybe we ought to put them

on an hourly basis and ask them to punch in and punch out, if that

is the way they approach the job.

Senator HOLLINGS. Well, they are that intelligent. They would

know how to punch in and punch out. You would not get any work

out of them.

COPS IN SCHOOLS PROGRAM

The school resource officers, Madame Attorney General, that

came from the local experience. We found in schools, for example,

in my backyard where we had about 800 and all kind of offenses

and drugs and what have you, that we hired a deputy sheriff to go

out there and teach classes. And then he associated in the afternoon with the athletic program. Before long, he became a sort of

a school hero, and instead of 800 potential violators, we had 800

potential enforcers of the law because all they had to do is make

a motion and whatever it is, somebody bringing a knife on the campus that did not involve the student to that extent, and it worked.

And we put $125 million in it. And now you eliminate it. Why?

Attorney General RENO. My understanding is that the COPS office expects to continue to fund school resource officers through its

COPS in Schools program in the year 2001.

Senator HOLLINGS. Well, I am like the chairman, we will have

to look at that one.

Attorney General RENO. Senator, it ties in with the whole concept of building a community capacity to deal with crime. And it

makes good sense. And it is the partnerships that we are talking

about.

Senator HOLLINGS. Thank you.

ATTORNEY OVERTIME

Attorney General RENO. Mr. Chairman, may I just say something? I cannot talk about the overtime litigation, but I can talk

about the assistant United States attorneys who serve the people
84

of this country. They work long hours. They care deeply. They are

excellent lawyers. And I have not seen examples of many of them

sitting around.

They do a really wonderful job for this country. They are very

special. And I cannot let this time go by without acknowledging the

great work that they do.

Senator HOLLINGS. I would like to reiterate, they ought to get a

job up here in the Senate, and know how to really work.

Attorney General RENO. Senator, from what I have seen, I would

praise the Senate staff in the same way.

Senator HOLLINGS. And they are not suing for overtime.

Senator GREGG. Not yet.

Attorney General RENO. You probably would not let them.

Senator HOLLINGS. You have got it.

Senator GREGG. Senator Campbell.

Senator CAMPBELL. Mr. Chairman, now that we know how to

really work, I wonder if I could ask Senator Hollings to send me

a memo on where these $500,000 jobs are when I get out of here.

GROWING PRISON POPULATION

I read with interest almost all of your testimony, Madame Attorney General, while our other committee people were asking questions. Let me start just by making a small social commentary you

have heard me preach about before. I am sure you understand it,

too, from reading your testimony.

Our prison population has doubled in 10 years. In your testimony, in fact, you say this year 570,000 people will get out of prison, starting on page 19. You know as well as I do that twice that

many will be going into prison. In fact, probably 70 or 72 percent

of the ones that get out are going to go back in. A lot of it is related

to drugs, and you have alluded to that in testimony and in private

conversations, too.

I have said this before, I do not know how we are ever going to

reduce that cycle and reduce that supply until we get to what we

have talked about. That is somehow we have got to decrease the

demand. As long as the demand is there, it will get here some way.

It will come in on boats or drop out of airplanes or come through

underground like moles or something.

But I am glad you appreciate that because you have mentioned

things along that line. I think it is really a sad commentary, and

I know that the Attorney General’s office is not supposed to be running social programs, but I think it is really a sad commentary that

so many communities in America have seen prisons as a form of

economic development. We have them competing with each other to

see where a prison is located. It just seems there is something

wrong with that, when we think of America being the beacon of

freedom, and yet we have got more people going into prisons than

anyplace in the world, in fact.

But I do not want to pursue that, frankly. My question had nothing to do with that, I just wanted to mention that in commentary.

CYBERCRIME

In the last few weeks we have seen on the news endless stories

about these hacking of the web-based businesses. I understand it
85

has increased a great deal, by roughly 40 percent or so in this last

year. I know you and Louis Freeh are working on a 5 year plan

to develop some kind of program to combat cybercrime. Your budget this year has $37 million in it to hire 159 prosecutors and

launch 10 computer forensic labs around the country. I applaud

you for that.

But my question was that, you just mentioned, we are having so

much trouble getting people in the Border Patrol, as an example.

Is it realistic to believe that we can create and fill 159 new positions on top of the vacancies that already exist? The other part of

that question is what are we doing to be more competitive with private firms in order to be able to recruit the type of people that can

do this highly technical work?

Attorney General RENO. The answer is exactly what the chairman said at the last meeting that he called especially to address

this issue of cybercrime. The greatest single challenge we face is

how do we attract people who have the know-how, both legal and

technical, to deal with the issue. The administration has addressed

it through a scholarship program that is similar to ROTC. For a

bachelor’s degree you commit to the government for a certain number of years. That will be one way to do it.

It is going to be a very difficult challenge but we are going to do

everything we can to meet it. And I will tell you that this, as I told

the chairman, is probably one of the most important issues that

law enforcement will face for many, many years to come. How we

address it now is going to influence how people, I think, react to

the Internet. Do they have confidence in it? Do they believe that

their privacy can be protected? Do they believe it will work? Do

they believe that they will not be victims of it, as opposed to beneficiaries of it?

We are committed to doing everything that we can, but you have

touched on what I think is one of the most difficult issues of all.

DIFFICULTIES IN HIRING

Senator CAMPBELL. I applaud you and I wish you well, but I will

tell you, when you see our bright young university graduates coming out, that can hire on to engineering firms, with the kind of

skills that it takes to be a hacker for $50,000 and $60,000 a year,

we are not going to get them to come into government service for

$20,000 or $25,000. It is as simple as that.

I think Senator Hollings has brought that up. If we are going to

pay the best, we have got to pay the best salaries.

Attorney General RENO. I just want to point out to you, I have

been impressed, for example, with FBI agents that I have met. One

was a trauma surgeon and decided to become an FBI agent. Another was a newscaster. People, I think, appreciate the opportunity

to serve and to serve the people of this country. Fortunately, we

have some wonderful people, both in the Bureau and in the Department of Justice, who have the know-how and want to put it to use

for the American people.

I would like to suggest something to you all. Some people say to

me how can you stand public service when you get cussed at,

fussed at, and figuratively beaten around the head. This committee

never does it to me. You kind of encourage public service, as far
86

as I am concerned. You disagree with me on an awful lot and we

agree on an awful lot.

But if we could establish a tone where people thought that public

service was done the way it is done in this committee, I think we

would be a lot further down the line.

Senator CAMPBELL. We have a few surgeons that have given up

their practice to come into the Senate, as you know, and the House,

and I certainly applaud them. But when you talk about these

youngsters, so much depends on how much they are going to get

paid, because they have got a life to live and a family to feed, too,

in many cases.

I just think that you are going to have difficulty filling those positions unless we offer some pretty big incentives.

Attorney General RENO. Do not let young lawyers hear you say

that, because when I graduated from law school I could not find a

job that paid very much money. And I was appalled at what my

colleagues in law school were receiving when they were hired on

Wall Street.

Senator CAMPBELL. If they could see you today.

Attorney General RENO. Well, they had a reception for me and

they said you know, we envy you the opportunity at public service.

You understand how important and how rewarding it is.

Senator CAMPBELL. Thank you, Mr. Chairman.

Senator GREGG. You certainly, Senator Campbell, touched a very

important issue which is how do we adequately compensate for

these technology skills that are so critical? Not only to law enforcement, but we see this in the Department of Commerce with NIST

and the agencies there. These folks are in great demand, and we

are capitalists and a market oriented society, and the government

is going to have to react to that, and we are going to have to structure something.

PLAN COLOMBIA SUPPLEMENTAL

My last question to you, Madame Attorney General, deals with

this Colombia supplemental. I noticed that of the supplemental

that is being requested for Colombia, which is a $1.6 billion supplemental, only something like $3 million of it is under the control of

the law enforcement agency responsible for drug enforcement in

this country, DEA. I guess my question is to what extent was DEA

in the loop on this? To what extent was the FBI in the loop on this?

If they were in the loop, why are they not players? Should they not

be players in one of the most massive undertakings this country

has ever considered in the area of trying to stop drugs in a foreign

country, and the production of drugs, which is the responsibility of

the DEA and the FBI to a degree?

Attorney General RENO. I checked with Donny Marshall [ed: Administrator for the Drug Enforcement Administration] this morning to make sure that what I say accurately represents what he believes, and he said that he was involved and DEA was involved

throughout the considerations. He said he supports the plan. He

might have done it differently, but he thinks that the expenditures

that are provided for are important. And I think it presents a balanced approach, balanced in terms of investments that have been

made before and investments that need to be made now.
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Senator GREGG. What is DEA’s role? For $3 million out of $1.6

billion, my sense is that it is minor, to say the least.

Attorney General RENO. I think we need to do everything we can

to support the Colombian national police, and he and I are committed to doing that. But what we have now is success in terms

of arrests in Colombia. We need to work with Colombian authorities to build institutions, to ensure that once the arrest has been

made that there are further processes in terms of investigation,

prosecution, conviction, appropriate sentence served.

The way the plan is designed is to try to achieve that.

Senator GREGG. I would just say, looking at it as an observer,

that if you took $1.6 billion and we were to put it into the Border

Patrol, the DEA, and the detention capabilities of INS and the Bureau of Prisons, I think we would have a heck of a lot bigger impact on drugs coming into this country than what is going to happen by spending $1.6 billion to buy six Blackhawk helicopters to be

flown around in Colombia.

It just seems to me that it is not the most effective use of our

resources, in light of there being a crying need which we have already highlighted here in the area of Border Patrol, DEA, which

we have not really gotten into, and detention, which we also have

not gotten into.

Senator HOLLINGS. Along that line, Mr. Chairman, Madame Attorney General, we have gotten an experience, and we have got to

double check it and make sure. I will never forget under President

Carter, as the First Lady Rosalynn was going to go to Colombia

and had a little talk all prepared in Spanish and what have you,

but they thought the piece-de resistance would be to send two helicopters down there to help them enforce law. I opposed it and opposed it and finally gave in.

The bottom line, the two helicopters went down there and it went

to what I guess would be their defense minister, who turned out

to be the head of the cartel. Instead, they were telling us how it

was going to help. We were going to have such big law enforcement. We were going to have those choppers, we could get up on

the mountain, we could just end all drug activity in the country of

Colombia.

The fact of the matter is, we facilitated, accelerated, and increased the drug activity. And when you talk of helicopters, you

have just got the country of Mexico sending them back, the Huey

helicopters. They were too expensive to run, on the one hand, and

they could not operate and keep them up and maintain them.

So we have sent a bunch of them down there and we have got

a lesson already learned, so we had better be awfully careful how

we just find a problem and say put in x millions of dollars and that

problem is solved. We do not seem to learn anything.

Attorney General RENO. That is one of the reasons, Senator, that

in terms of the law enforcement and administration of justice side

of the coin, I think we have got to build it carefully. And that we

cannot just focus on arresting people if we do not have the capacity

to prosecute them, to get them convicted, and to get them imprisoned for a sentence that meets what they did.

Senator HOLLINGS. Thank you, Mr. Chairman.
88

Senator GREGG. Madame Attorney General, we want to thank

you for your courtesy over the years. It has been a pleasure to work

with you. You have been generous in your comments, so let us be

generous in ours also. I have personally enjoyed very much working with you. I think we have made tremendous strides.

Attorney General RENO. Well, it is not over yet, Mr. Chairman.

Senator GREGG. I noticed you said you did not plan to be here

again. We may have you again.

Attorney General RENO. If you do, it will be my pleasure.

Senator GREGG. We have got some issues, especially the Border

Patrol and Internet, that we might want to take up with you.

ADDITIONAL COMMITTEE QUESTIONS

In any event, this hearing is completed but there will be questions submitted for the record.

[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

COPS PROGRAM

Question. The COPS program reached its goal of putting 100,000 COPS on the

street on May 12, 1999, and as originally authorized, the program is scheduled to

terminate at the close of fiscal year 2000. How do you justify the program’s continuation and expansion when its stated goal has been reached and violent crime rates

continue to fall?

Answer. The 21st Century Policing Initiative directs federal resources to the most

pressing local law enforcement needs by building on the success of the COPS program and adding up to 50,000 additional officers to the street. It takes the philosophy of community policing to the next level. By engaging the entire community in

the fight against crime and funding community prosecutors as well as officers, we

are helping create an infrastructure to sustain our progress into the next century.

Every major law enforcement group—representing labor and management alike—

and the Conference of Mayors strongly supports the continued funding for the COPS

program.

With American communities safer than they have been in decades, now is not the

time to pat ourselves on the back and go home. Crime is still too high. The continuation of the COPS program would serve to reinforce this progress by funding muchneeded officers, vital technologies, innovative crime prevention strategies, and valuable training and technical assistance.

Question. The Administration’s new goal is to hire 150,000 officers by 2005. Can

you tell me how many officers you believe would be the right number?

Answer. We are focused on funding up to 50,000 additional officers between now

and 2005. The demand for COPS grants has not diminished over the last 5 years,

and we have no reason to expect that it will do so anytime soon. Just last year,

over 250 law enforcement agencies applied for funding for the first time. There are

still neighborhoods that have not benefited from the recent drop in crime.

Question. Do you need authorization language for any of the new programs you

have requested?

Answer. All of the programs that are requested under the COPS appropriation in

the fiscal year 2001 budget request would be authorized with the passage of the Administration’s proposed 21st Century Policing Initiative bill.

COMMUNITY PROSECUTION

Question. The President’s budget request asks for $200 million to establish a Community Prosecutors Hiring Program. Within that amount there is $150 million to

hire 1,000 community prosecutors to target gun-related violence in DOJ-determined

‘‘High Gun Violence Areas.’’ What are ‘‘High Gun Areas’’ and how will they be determined?

Answer. Since 1999, a total of $15 million has been appropriated under COPS and

administered by the OJP’s Bureau of Justice Assistance (BJA) for the Community
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Prosecutor Program. In fiscal year 1999, $5 million was appropriated and awards

were announced for the planning, implementation, and enhancement of community

prosecution programs around the country. In fiscal year 2000, $10 million was appropriated and will be awarded to other jurisdictions for the planning, implementation, and enhancement of their community prosecution programs.

In fiscal year 2001, an increase of $190 million is requested to establish a Community and Local Gun Prosecution Initiative bringing the total funding level to $200

million. These funds are requested under COPS and will be administered by OJP.

OJP proposes to make discretionary grants to state, local and tribal prosecutors’ offices to increase substantially the number of prosecutors interacting directly with

members of the community and to encourage local prosecutors to reorient their emphasis to tough enforcement at a community level. Of the total, $150 million would

be used to hire 1,000 gun prosecutors for urban, suburban, and rural communities

that are experiencing gun violence. These prosecutors will focus on gun-related

crime. High gun violence areas are those areas—whether urban, suburban or

rural—which are impacted by gun violence. OJP will reserve funds for jurisdictions

with populations of less than 50,000.

Question. How was it determined that 1,000 prosecutors is the right number?

Answer. As a result of the Administration’s successful efforts to put an additional

100,000 police officers in communities across the nation, we are experiencing an increase in the prosecutorial workload of the criminal justice system. This burden is

largely felt in local communities where prosecution resources are limited. This initiative attempts to bridge the gap by providing additional prosecution personnel at

the local level to encourage and facilitate community partnerships to address the

unique local criminal problems.

MISSING AND EXPLOITED CHILDREN’S PROGRAMS (MECP)

Question. My first question is whether the current funds appropriated to the

MECP are sufficient to carry out all the activities and programs necessary to support missing and exploited children, their families, and the agencies that serve this

population?

Answer. Since the Missing Children’s Assistance Act was enacted in 1984, OJJDP

has maintained a national leadership role in providing training and technical assistance to law enforcement and other service providers involved on the front line in

assisting missing and exploited children and their families. This training, for the

most part, is not available to law enforcement practitioners through other sources.

While current funding is sufficient to maintain existing programs, the significant increase in the numbers of new law enforcement officers on the streets today, and the

critical need for informed action and accurate reporting of all categories of crimes

against children, funding beyond current levels would allow the MECP to enhance

current training and technical assistance programs to reach more law enforcement

practitioners. It would also allow expansion of our training and technical assistance

program into new areas.

Question. If additional funds were appropriated to the MECP, what types of programs and activities would these funds support?

Answer. Additional funds would provide for the expansion of existing training and

technical assistance programs to the field. The Department currently has all training slots for fiscal year 2000 filled. We typically have as many applicants on waiting

lists as we have in the actual training programs. Additional funding would allow

us to reach many more of these law enforcement practitioners.

Second, additional funding would allow the MECP to expand program offerings

into new training areas related to missing and exploited children and their families,

including training for law enforcement, parents, prosecutors, and the judiciary on

international parental abduction to enhance the United States’ response to the recovery and return of these children. The MECP could conduct new research on missing, runaway, and throwaway children as needed, along with research on the growing problem of child prostitution. As many states and localities are adopting child

fatality review teams, multi-disciplinary training could be conducted to assist these

practitioners in implementing that concept. Additional funding would also assist

MECP in increasing the number and quality of related publications and developing

new publications in areas such as international parental abduction and hand guides

for law enforcement on investigating child homicides.

Question. What would be the cost of these activities?

Answer. Additional funding needed for all activities would be approximately $5

million.
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Question. If additional funds were appropriated, would OJJDP commit those

funds to the newly formed Child Protection Division with the emphasis placed upon

increased training for law enforcement?

Answer. Yes, all activities of the old MECP have already been consolidated into

the new Child Protection Division (CPD). Any additional funding would be administered by that Division with an emphasis on state and local law enforcement needs

as discussed in our response to the first question.

VOCA LEGISLATION

Question. The Victim’s of Child Abuse Act (VOCA) provides funds to support child

abuse training programs for prosecutors and judicial personnel as well as funds to

support children’s advocacy centers. One constituent group that is clearly absent

from the legislation is state and local law enforcement. Because state and local law

enforcement are integral partners in the effective resolution of child abuse cases,

does the Office of Juvenile Justice and Delinquency Prevention believe that state

and local law enforcement should be included in the VOCA legislation?

Answer. We believe that the training and technical assistance needs of state and

local law enforcement could appropriately be included in the VOCA legislation. In

cases of crimes against children, law enforcement responders often ‘‘make or break’’

a criminal investigation of the perpetrator before a prosecutor or judge is even

aware of the case. Their initial investigative actions are key to the effective prosecution of the perpetrator and the protection of the child. Their knowledge and ability

to effectively investigate crimes against children is at least equal to that same requirement for prosecutors and the judiciary.

Question. If VOCA funds were allocated for training for state and local law enforcement agencies, how would these activities be used in relationship to the current

activities that are offered by OJJDP through the Missing and Exploited Children’s

Program?

Answer. As indicated above, the activities of the MECP have been consolidated,

through reorganization, into the new OJJDP Child Protection Division. Additional

funding would allow the new CPD to increase the number of offerings of existing

training programs to state and local law enforcement and to enhance the overall

training effort with the development of needed new programs.

Question. How would OJJDP, the Missing and Exploited Children’s Program and

the Child Protection Division insure that these funds complemented and supported

the current training and technical assistance programs?

Answer. To insure that purpose is met, the Department suggests that language

in any amendment to VOCA require that the funds be administered by OJJDP for

the purpose of expanding and enhancing missing and exploited children training

and technical assistance programs for state and local law enforcement.

QUESTIONS SUBMITTED BY SENATOR PETE V. DOMENICI

RIO ARRIBA COUNTY BLACK TAR HEROIN PROBLEM

Background: Attorney General Reno, I want to begin by thanking you for all that

you have done in the last year to help address the black tar heroin problem in

northern New Mexico.

It was at the hearing last year that you and I first discussed this issue, and the

record will reflect that your response to my request for help was immediate, comprehensive and extremely helpful. On behalf of the citizens of Rio Arriba County,

thank you.

Within a few weeks after our discussion here, Senator Gregg was generous

enough to hold a field hearing on the issue in Espanola, New Mexico. You sent out

your deputy, Laurie Robinson, who did a great job engaging with the state and local

leaders and identifying the problems that the community faced in trying to address

this problem. I understand that Ms. Robinson will soon depart her post at DOJ, and

I wanted to relate to you how much I appreciated her help as well.

Within months, your staff returned to New Mexico and consulted with state and

local leaders. They formulated a comprehensive plan to address the problem, which

emphasized community-based law enforcement, treatment and prevention. In this

committee, we targeted prevention resources for the Boys and Girls Club and an

after-school program in Rio Arriba. The State of New Mexico dedicated funds for

treatment. And, law enforcement did a great job.

Soon after the field hearing, federal FBI, DEA and ATF agents, along with state

law enforcement officials, rounded up more than 50 individuals involved in the drug
91

trade in northern New Mexico. Indictments were handed down, and there have been

numerous guilty pleas already.

News reports out of Rio Arriba County indicate that the streets are quieter, the

drug trade has been suppressed, and the community is on its way to healing itself

after decades of drug abuse.

Of course, we haven’t solved the drug problem in northern New Mexico. I hope

that you’ll pledge to continue to work with me throughout the remainder of your

time at DOJ as the need arises to ensure that Rio Arriba stays on the path toward

reducing its drug problem.

Question. I am interested in your Department’s recommendation about a second

phase of help for the county, including any follow-up prevention or law enforcement

efforts we might undertake to make sure that our efforts of the past year do not

go to waste.

Answer. At the March 30, 1999, hearing in Espanola, Laurie Robinson, the then

Assistant Attorney General of the Office of Justice Programs (OJP), emphasized the

importance of government agencies and service providers collaborating with each

other, working in partnership with the community, and embracing a balanced and

coordinated approach to crime prevention, control and community empowerment. As

a result of this hearing, in August 1999, a report was published that outlined a

technical assistance action plan to support and sustain efforts to respond to the illicit drug and crime issues in Rio Arriba County. The centerpiece of this plan was

the Community Health and Justice Council, which would provide a shared infrastructure of federal, state and county stakeholders in order to provide a unified response to crime and substance abuse problems in Rio Arriba County. In addition,

OJP, in partnership with the Substance Abuse and Mental Health Services Administration, the National Institute on Drug Abuse, the National Institute of Corrections, and Project SEARCH, committed technical assistance resources. OJP also

committed to fund two drug court extensions, regional drug free coalition building

efforts, and a community prosecution planning project.

Phase II of this effort is well underway. The technical assistance response team

is scheduled to visit Rio Arriba during mid-May to follow-up on the recommendations outlined in the August 1999 report. The response team has three objectives:

(1) assess the status of the Rio Arriba Community Health and Justice Council; (2)

conduct follow-up interviews with key government and community stakeholders to

reassess their commitment in efforts to address identified substance abuse prevention and treatment needs; and (3) track the status of several OJP initiatives to facilitate implementation of the report’s programmatic and technical assistance recommendations.

FIRST RESPONDER TRAINING PROGRAM

Background: The Department of Justice has requested a total of $29 million to

support the National Domestic Preparedness Consortium—$15 million for the headquarters at Fort McClellan, Alabama, and $14 million to be shared equally ($3.5

million each) by the four training partners—New Mexico Tech; the University of

Texas; Louisiana State University; and the Nevada Test Site. Fort McClellan is

again proposed for an increase—$2 million for the purposes of installing a computer

system and to provide a student tracking system. The actual training partners are

held to a freeze level, while the Administration proposes additional resources for

technical assistance, law enforcement training, and research and development.

Question. Ms. Reno, the Office of Justice Programs funds domestic first responder

training at several sites of the Domestic Preparedness Consortium. Request for

funding for Fort McClellan’s program continue to increase, while more first responders are actually being trained at the university sites. Wouldn’t the Department

maximize the budget by providing more training at the most cost-effective sites?

Answer. Each member of the National Domestic Preparedness Consortium

(NDPC), along with the Office of Justice Programs’ (OJP) other training partners,

have individual strengths of critical importance to the emergency responder community. For example, the New Mexico Institute of Mining and Technology’s (NMI) explosives expertise, and the availability of live agent training at the Center for Domestic Preparedness (CDP), both represent unique assets central to a robust, and

comprehensive domestic preparedness effort. At each NDPC site, training is offered

in the most effective and efficient manner possible given the unique training products provided. When judging the value of this training, the unique nature of members’ facilities, assets, and training provided to the emergency responder community

must be taken into account. In fact, the emergency responder community has specifically indicated the value of such individual strengths as NMI’s explosives exper-
92

tise, and the CDP’s live agent training. In the same manner, all NDPC facilities

play a unique and critical role in OJP’s overall domestic preparedness effort.

Question. First responder travel is a necessary expense. Heretofore, the Department has deducted travel expenses from funds appropriated to the Domestic Preparedness Consortium, instead of reimbursing first responders from Department of

Justice funds. To maximize the funds spent on actual training, would it make sense

for the Subcommittee to designate travel funds for first responder use?

Answer. First responder travel is a necessary expense associated with training.

These travel expenses, however, are provided for within the training budgets for

each of the NDPC members. Student travel is integrated as a component of overall

per student training costs. Separating out travel funds for all first responders being

trained is an artificial distinction, and would have no real effect other than to complicate the administration of such funds, and create inefficiencies in the development of NDPC member budget plans. Building travel costs into per student training

costs allows each NDPC member the flexibility to maximize its resources when developing training and budget plans. Creating a single ‘‘first responder travel fund’’ would cause each NDPC member to have to compete for available travel funds for

its students with other NDPC members.

Question. The training of first responders is a primary issue of readiness as the

Department of Justice takes the agency lead on counterterrorism for the Federal

Government. What has the Department accomplished through the First Responder

training initiatives over the past 2 years?

Answer. OJP’s first responder training program was initiated with the development of the Firefighter and Emergency Medical Services training course in fiscal

year 1997. Since that time, however, programmatic efforts and available funding

have increased dramatically. Over the course of the past 2 years, OJP has developed

a comprehensive, robust domestic preparedness program, created the Office for

State and Local Domestic Preparedness Support (OSLDPS) to administer it, and organized that office and its programs based on recommendations obtained from the

state and local emergency response community through a variety of needs assessments and stakeholder conferences. OSLDPS focuses its preparedness efforts in four

functional areas: provision of grants to support equipment procurement, training,

exercises, and technical assistance. OSLDPS is engaged in a continual outreach effort to the state and local community to elicit feedback and guidance on its program

execution. Since 1998, OSLDPS has developed and implemented programs to provide $87.5 million in grants to state and local jurisdictions for the procurement of

specialized response equipment and the development of state-wide strategic plans

for domestic preparedness; organized a comprehensive training program utilizing existing expertise and national assets to enhance the capabilities of state and local jurisdictions and response agencies in responding to WMD terrorism; undertaken the

planning of the TOPOFF exercise, a major national-level WMD exercise; and created

a focused technical assistance program to respond directly to the needs of individual

jurisdictions.

Question. How many local law enforcement and fire and medical personnel have

been trained?

Answer. OSLDPS trains approximately 46,000 students under its Metropolitan

Fire and Emergency Medical Services basic awareness training program annually.

In 1999, OSLDPS trained 1,156 emergency responders at the CDP and 1,672 at the

other NDPC institutions. Further, OSLDPS is working with other training providers, including but not limited to Pine Bluff Arsenal for the provision of equipment sustainment training, the National Sheriffs Association, and the National

Guard Bureau.

Question. What is the status of equipping these first responder training teams?

Answer. A key element of OSLDPS’ efforts to assist state and local jurisdictions

in enhancing their ability to respond to WMD terrorism is the provision of grants

for the procurement of critical emergency response equipment. Such equipment will

enable fire departments, law enforcement agencies, emergency medical services, and

hazardous materials response units to enhance their response capabilities in state

and local jurisdictions to incidents of domestic WMD terrorism. Numerous needs assessments have consistently highlighted these jurisdictions’ need for specialized

equipment in order to meet the requirements presented by WMD incidents. In fiscal

year 1998, OSLDPS provided $12 million in grants to 41 local jurisdictions for the

procurement of specialized response equipment, including personal protective, chemical/biological detection, decontamination, and communications equipment. In fiscal

year 1999, OSLDPS will provide an additional $31 million to 157 local jurisdictions,

as well as $33.8 million to the 50 states, for the procurement of such equipment.

An additional $8 million will be provided to the 50 states for the development of

Three-Year Statewide Strategic Domestic Preparedness Plans, which will guide the
93

use of future funding. To date approximately 115 of the 157 local jurisdictions receiving grants in fiscal year 1999 have been funded under the fiscal year 1999

County and Municipal Domestic Preparedness Support Equipment Program.

LAW ENFORCEMENT IN INDIAN COUNTRY

Question. Attorney General Reno, the Administration continues to focus on the

law enforcement situation in Indian Country, and promotes cooperation between the

Bureau of Indian Affairs (BIA) and the Department of Justice agencies. In fiscal

year 1999, this Subcommittee provided $88.7 million through various Department

of Justice programs to enhance law enforcement in Indian Country, and for this

year another $91.5 million. This year, the budget includes an additional $82 million

as part of this joint initiative with the Department of Interior and BIA to address

public safety on Indian lands. First I’d like to turn to the funding for tribal courts

and its implementation. The tribal courts have received $10 million over the past

two years. How have these funds been allocated to tribal courts?

Answer. In each 1999 and 2000, $5 million has been appropriated for the Tribal

Court Program. This program, which is part of the broader DOJ Indian Country

Law Enforcement Initiative, is designed to provide grant resources on a competitive

basis to support the development, enhancement and continuing operation of tribal

judicial systems. The goal of this program is to provide resources and assistance to

tribes to sustain safer and more peaceful communities by focusing on juvenile and

family issues, as well as non-traditional approaches to justice, enhancing the administration of civil and criminal justice on Indian lands, and encouraging the implementation of the Indian Civil Act by tribal governments.

The 1999 Tribal Court Program plan was approved in May 1999. The grant solicitation process began in June 1999, and applications were due March 8, 2000. BJA

is currently reviewing these applications and expects to begin awarding grants in

May 2000.

In 2000, BJA plans to award additional planning, implementation, and enhancement grants, as well as provide technical assistance. Tribes that have completed the

planning process (either with BJA assistance or on their own) are eligible for implementation grants in 2000. Tribes that received 1999 planning grant will receive priority for these implementation grants. After Congressional approval of the 2000

plan, BJA anticipates soliciting applications in July/August 2000.

Question. Congress also approved $34 million in each of 1999 and 2000 through

the State Prison Grants program to help with the addition of detention facilities in

Indian Country. How is the Department expending these funds? What is the analysis of need for these facilities across the nation?

Answer. The 1999 appropriation for the construction of adult and juvenile detention facilities in Indian Country was $34 million. In 1999, OJP awarded the following projects on a competitive basis:

Three Affiliated Tribes of Fort Berthold (ND) .................................... $2,000,000

Native Village of Barrow (AK) .............................................................. 6,000,000

San Carlos Apache Tribe (AZ) .............................................................. 2,158,550

Confederated Tribes of the Colville Reservation (WA) ....................... 4,579,550

Pueblo of Zuni (NM) .............................................................................. 2,334,000

Northern Cheyenne Nation (MT) ......................................................... 3,482,629

Oglala Sioux Tribe (SD) ........................................................................ 1,327,659

Rosebud Sioux Tribe (SD) ..................................................................... 6,100,770

Shoshone Paiute Tribe (NV) ................................................................. 2,862,132

Red Lake Band of Chippewa (MN) ....................................................... 574,870

Nisqually Indians (WA) ......................................................................... 371,473

Technical Assistance .............................................................................. 900,000

For 2000, OJP remains committed to assisting tribal governments in building

comprehensive and effective law enforcement and public safety systems to provide

the foundation for healthy communities. We believe it is critical to continue to support initiatives that were funded in 1998 and 1999 in order to address appropriately

the myriad problems experienced in Indian country including, but not limited to the

following: violent crime, domestic violence, child abuse, aggravated assaults, and

violent crime strongly correlated with alcohol abuse.

In 2000, $34 million is available on a competitive basis and will be awarded as

follows:

—$24 million to tribes that demonstrate the greatest potential for successful development and implementation of their comprehensive crime control strategy

and who have determined the most appropriate facility consistent with the
94

characteristics of their offender population. Of the $24 million, approximately

$1 million will be needed for technical assistance. —$10 million to the Salt River Pima Maricopa Indian Community for construction

of an adult/juvenile facility. Salt River submitted an application in response to

the OJP/CPO solicitation for proposals for 1999 BIA Designated Tribes, however, resources were not available to fund the project fully. The Attorney General has committed $10 million in 2000 for the construction of a facility.

The need for culturally appropriate correctional facilities remains great throughout Indian Country as demonstrated by the response to the OJP/CPO 1999 Program

Guidance and Application Kits. In 1999, OJP received 33 applications requesting a

total of $100.3 million. Because of limited funding, OJP was able to fund only 6 of

the 33 projects totaling $31.8 million. The total amount of unfunded projects in 1999

was $68.5 million. Furthermore, BIA has done independent assessments in Indian

Country that substantiate the need for approximately $180 million in new construction.

Question. The Initiative also has received $75 million to assist Indian tribes and

pueblos with the hiring of additional law enforcement officers, to purchase equipment, and to train new and existing officers. What is the status of obligating these

funds? How did the Department decide to implement this portion of the initiative? Answer. In fiscal year 1999, COPS received $35 million for the improvement of

law enforcement capabilities on Indian lands. With that funding, COPS developed

the Tribal Resources Grant Program (TRGP). With this program, the COPS Office

attempted to meet the most serious needs of law enforcement in Indian communities

through a broadened, comprehensive hiring program that offered a ‘‘menu of options’’ from salary and benefits for new police personnel to funding for law enforce- ment training and equipment for new and existing officers. This $35 million program focused on tribal communities, many of which have limited resources and are

affected by high rates of crime and violence, and was meant to enhance law enforcement infrastructures and community policing efforts in these communities.

Funding provisions under the TRGP included 3 years of salary and benefits for

new police officers, as well as funding for law enforcement training and basic standard issue equipment, ranging from bullet-proof vests and uniforms, to firearms,

portable radios and funding for background investigations. Funds were also available for law enforcement training and equipment for existing officers. Training included basic and specialized police training at a state academy or the Indian Police

Academy in Artesia, N.M., as well as community policing, grants management, and

computer training. Departments were also able to request funding for other types

of department-wide law enforcement equipment and technology. In addition, $7.3 million of the $35 million went toward the CIRCLE Project

which was a Department of Justice collaborative effort to assist Indian Tribes. It

involved multiple components of the DOJ working together to address the equipment, training, technical assistance, and hiring needs of three specific tribes.

In fiscal year 2000, COPS received $40 million for tribal assistance programs and

will award grants under the Tribal Resources Grant Program 2000. This program

has been designed with the same parameters as the fiscal year 1999 TRGP.

The funding allocated in fiscal year 1999 has been obligated. The application

deadline for the fiscal year 2000 program was May 5, 2000, and funding for fiscal

year 2000 will not be obligated until all applications have been received.

Question. A total of $22.5 million was approved for the Office of Juvenile Justice

and Delinquency Prevention (OJJDP) for programs to combat tribal youth crime.

What is the status of this program? What types of programs does the Department

plan to fund with these dollars? What indication is the Department getting as to

the nature of this problem in Indian Country and the need for resources?

Answer. In 1999, $10 million was appropriated for OJJDP’s Tribal Youth Program. Of this amount, 10 percent ($1 million) was used by OJJDP to support research, evaluation and statistics, and $200,000 to provide direct technical assistance

and training for tribal programs. Additionally, $600,000 was designated to support

the Comprehensive Indian Resources for Communities and Law Enforcement (CIRCLE) project and $330,000 to support the activities of the Volunteers for Tribal

Youth (VTY) program. Through a solicitation and peer-reviewed process, the Tribal

Youth Program (TYP) provided funds for comprehensive delinquency prevention,

control, and juvenile justice system improvement for American Indian youth to 34

grantees in fiscal year 1999 totaling approximately $7.9 million. Individual grants

range from $75,000 to $500,000 for a 3-year project period. Federally-recognized

tribes applied directly to OJJDP for grants. Inter-tribal coalitions and Alaskan Native villages were also eligible to apply. OJJDP made funding eligibility determinations for grantees based on the Bureau of Indian Affairs (BIA) tribal service populations numbers.
95

In 2000, $12.5 million was appropriated for the Tribal Youth Program. Of this

amount, 10 percent ($1.25 million) will be to support research, evaluation and statistics, and $250,000 to provide direct technical assistance and training for tribal

programs. Additionally, $600,000 has been designated to support the CIRCLE

project for a second year. Through another competitive solicitation process in 2000,

TYP will provide funds for comprehensive delinquency prevention, control, and juvenile justice system improvement for American Indian youth. The same funding

structure, project period and eligibility criteria will be used as in 1999 for TYP. A

separate competitive solicitation focusing on mental health and delinquency for

American Indian youth will also be issued in 2000, and will have the same funding

structure, project period and eligibility criteria as the TYP juvenile justice program.

Provided below are the types of tribal youth programmatic activities funded. A

strong cultural component is tied to all of these activities.

—Category I—Reduce, control, and prevent crime both by and against tribal

youth.—Acceptable activities include but are not limited to: Identification of risk

factors; community needs assessments; family strengthening; truancy reduction;

drop-out prevention; parenting; anti-gang education for young children; conflict

resolution; bullying; child abuse prevention; gang reduction strategies for children and youth; and youth gun violence reduction.

—Category II—Interventions for court-involved tribal youth.—Acceptable activities

include but are not limited to: Graduated sanctions; restitution; home detention,

foster and shelter care; community service; improved aftercare services; teen

courts; and mentoring.

—Category III—Improvement to tribal juvenile justice systems.—Acceptable activities include but are not limited to: Training for juvenile court personnel, including judges; intake assessments; model tribal juvenile codes; advocacy programs;

gender-specific programming; probation services; and aftercare programs.

—Category IV—Prevention programs focusing on alcohol and drugs.—Acceptable

activities include but are not limited to: Drug and alcohol education; drug testing; substance abuse counseling; peer counseling; family substance abuse counseling.

Nature of the Problem

The 2.3 million American Indians and Alaska Natives in the United States represent just under one percent of the total population, but a recent nationwide Bureau of Justice Statistics (BJS) survey finds that American Indians are victimized

by violent crime at a rate more than twice that of the general population. Past testimony by tribal leaders regarding higher rates of homicide and gang violence corroborates information gathered by the FBI, BIA, U.S. Attorneys, and tribal police.

Of the 6,002 Indian country cases opened by the FBI between 1994–97, 83 percent

were either violent crimes or involved child physical or sexual abuse. Violent crime

by juvenile offenders and Indian youth gangs is on the rise in many Indian communities. The number of Indian youth in Bureau of Prisons (BOP) custody has increased by 50 percent since 1994. Given the unique nature of federal jurisdiction

in Indian country and the rise in juvenile crime, 67 percent of the youth in the

BOP’s custody were American Indian, as of December 1998. Demographics may contribute to the problem of juvenile delinquency and violence in Indian country. The

median age of American Indians is 24.2 years compared with 32.9 years for other

Americans. On many reservations, roughly half of the population is under 18 years

of age, again showing the need for increased attention to juveniles within Indian

country.

Question. Finally, would the Department please provide the Subcommittee with

a summary of the funding proposed to be allocated under the Indian Law Enforcement initiative in fiscal year 2001?

Answer. The following chart provides the requested information.
DEPARTMENT OF JUSTICE FISCAL YEAR 2001 PRESIDENT’S BUDGET—INDIAN COUNTRY LAW ENFORCEMENT INITIATIVE

Component Item Re

Federal Bureau of Investigation ......................................... 31 pos. (victim/witness coordinators) and funds for contracts for evidence forensic exams and Safe Trails

Task Force overtime.

1 $4

United States Attorneys ...................................................... 60 pos. (33 Assistant U.S. Attorneys, 27 support) to augment current investigative and prosecutorial efforts in Indian country. 1 4

Criminal Division ................................................................ 1 pos. to augment analysis of Indian law enforcement issues ........................................................................ 

Office of Justice Programs ................................................. Drug Testing and Treatment Program for alcohol and substance abuse testing and treatment in Indian

country.

1 10

Tribal Courts Program to assist tribal government in the development, enhancement, and continuing operation of tribal judicial systems. 2 15

Title V Incentive Grants for Local Delinquency Prevention to serve Indian youth by developing, enhancing,

and supporting tribal juvenile justice systems.

2 20

Tribal Youth Mental Heath and Behavior Problems Initiative for youth support services to address the

needs of native youth with mental health, behavioral, or alcohol and substance abuse problems.

1 8

Indian Alcohol and Substance Abuse Diversion Program to develop strategies and services to break the

cycle of alcohol and crime.

1 8

Sexual Assault Nurse Examiner Units for gathering evidence for use in prosecuting sexual offenders .......... 1 5Tribal Criminal and Civil Legal Assistance Program for criminal and civil legal services support and for

tribal colleges criminal and legal assistance curriculum development and training.

1 6

State Correctional Grant Program for the construction of detention facilities in Indian country .................... 34Tribal criminal justice statistics collection ........................................................................................................ 1 2Office of Tribal Justice to establish a permanent office under the Associate Attorney General ...................... 

Police Corps Program to provide advanced educational opportunities for police in Indian country ................ 1 5

Community Oriented Policing Services ............................... Grants to Tribes for additional law enforcement officers, equipment, and training. (12 positions, 4.5

FTE).

4 45

Indian Country Forensics Laboratory to augment tribal forensics capabilities ................................................. 1 5

TOTAL ..................................................................... .............................................................................................................................................................................. 173

(Total Increase) ................................................................... .............................................................................................................................................................................. (81

1 New.2 $10 million increase.3 $7.5 million increase.4 $5 million increase.
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RADIATION EXPOSURE COMPENSATION PROGRAM

Background: Last year, the Administration requested $21.7 million for the payment of claims under RECA with the assumption that pending regulations would

be finalized and that Congress would enact one of the bills expanding the program.

While the regulations did go into effect in April, during conference on the CJS Appropriations bill, the conferees approved only $3.2 million and stated in report language only that no additional funding was provided to cover the claims under the

new regulations. Thus, there is now a shortfall of $7.25 million to pay anticipated

claims in fiscal year 2000, and the Department of Justice estimates that fund balances will be exhausted in May or June with the effect that approved claims will

not be paid.

In addition, the Department tells staff that the fiscal year 2001 budget request

of $13.7 million is also insufficient to pay anticipated claims in the amount of $2.3

million needed.

Question. Ms. Reno, you are aware of my longstanding interest in implementation

of the Radiation Exposure Compensation Program, which I authored and for which

I have sought sufficient funding to fulfill its purpose of compensating those who

have sustained injury as a result of the United States open-air nuclear testing and

uranium mining activities in the 1950s through 1970s.

In fiscal year 2000, the Congress appropriated $2 million to administer the Radiation Exposure Compensation Program, and $3.2 million for the Radiation Exposure

Compensation Trust Fund from which payments are made. At the time, an estimated $8 million was available in the Fund from which to pay approved claims. Yet,

my staff tells me there is a shortfall in the Fund to pay anticipated claims in the

current fiscal year to the tune of $7.25 million.

Answer. It is important to understand that it is difficult to predict accurately the

number of awards and payments that will be made in a given year. The estimates

depend upon a variety of factors including, but not limited to: (1) the number and

distribution of new filings across the three categories of claimants, (2) the extent

to which the applicants meets the eligibility criteria and (3) the pace at which applications are processed. Most of these factors are outside our control. Accordingly, our

estimates are subject to change over time.

Question. Will you please explain why the Radiation Exposure Compensation

Trust Fund needs an additional $7.25 million in fiscal year 2000 to pay valid

claims?

Answer. The 2000 President’s budget requested a $21.7 million appropriation for

the Radiation Exposure Compensation Trust Fund. The request assumed: (1) implementation of regulatory changes and (2) enactment of statutory changes similar to

those proposed by the Administration in 1997. The regulatory changes were implemented in April 1999, but no statutory changes were enacted. Congress appropriated $3.2 million for 2000. This appropriation, plus $8.4 million carried forward

from 1999 and estimated interest provide $11.8 million in availability. Payments of

about $19 million are projected, assuming about 228 awards will be approved in

2000. The resulting shortfall is estimated at $7.25 million.

The 228 awards projected in 2000 are comparable to the 227 awards approved in

1999. The projection takes into account that the modified regulations will be in effect for a full year, compared to just 5 months in 1999. In particular, awards to miners, who are most affected by the regulatory changes, are expected to increase from

114 in 1999 to 130 in 2000. Awards to downwinders and onsite participants are expected to decline slightly.

Question. Last April the Administration finalized additional regulations under the

Radiation Exposure Compensation Act (RECA). Of the $21.7 million requested by

the Administration in its fiscal year 2000 budget, how much of the request was associated with the new regulations?

How much was associated with the assumption that Congress would enact

changes to RECA through statutory changes?

Answer. When the 2000 President’s budget was developed in January 1999, it assumed that: (1) statutory changes would be implemented about April 2000, (2) regulatory changes would be implemented as soon as February 1999, (3) $8.3 million

would be carried forward from 1999 and (4) interest would total $563,000. An appropriation of $21.7 was requested to make expected payments of $30.6 million. Of the

$30.6 million estimate, about $16 million was associated with the statutory changes

and about $14.6 million was associated with the Program under the modified regulations—including a rough estimate that $3 million would be needed in connection

with the regulatory changes.

Question. Of your current estimates of the number of claims to be paid in the current fiscal year, can the Department tell the Subcommittee how many are associated
98

with the changes by regulation? How many claims overall does the Department expect to pay in fiscal year 2000? In fiscal year 2001?

Answer. When approving claims, we do not determine whether the claim also

would have qualified under the original regulations. Thus, we do not have an accurate basis upon which to make an estimate of the number of claims paid in 2000

associated with the changes. We have made a rough estimate of the impact of one

significant change, which revised the definition of ‘‘non-smoker’’ to include any uranium miner who ceased smoking at least 15 years prior to the diagnosis of a compensable disease. A review of previously denied miner claims indicated that about

317 miners may qualify for compensation valued at $31.7 million under the revised

‘‘non-smoker’’ regulation. In 1999, about 21 miner awards valued at $2.1 million

were approved based on the change. The remaining 296 miners who may qualify

will likely be processed over the next 2 to 3 years. The number in any given year

will depend on when potential applicants choose to apply.

As noted above, the 2000 President’s budget estimated payments of $14.6 million

in 2000, absent statutory changes. Over a year has elapsed since those estimates

were made. Today, 2000 payments are estimated at $19 million (despite availability

of $11.8 million). These estimates are considerably higher than projected in the 2000

President’s budget, as a result of several, interrelated factors: —Exclusive of the impact of the regulatory changes, award estimates in the 2000

President’s budget were extrapolated from 1998 data trends. The current estimates take into account significant increases from 1998 to 1999: (1) total approvals grew almost 50 percent, from 153 to 227; (2) awards to miners nearly

doubled, from 59 to 114; and (3) the overall approval rate rose from 42 percent

to nearly 62 percent. One explanation for the higher approval rate is that far

more comprehensive data on miner work histories is available now, compared

with earlier years of the Program. —The 2000 President’s budget was based on speculation about the impact of the

modified regulations; we now have a 10-month history. New filings have more

than doubled since the changes were implemented. Beforehand, an average of

22 claims were filed per month in 1999. Afterwards, an average of 46 claims

have been filed per month. The growth was likely spurred by outreach efforts

surrounding the regulatory changes and publicity concerning several bills to

amend the Radiation Exposure Compensation Act. As more and more of the new

filings are reviewed in 2000, it is reasonable to expect that the number of

claims approved in 2000 will be on par with 1999 approvals. —When the 2000 President’s budget was developed, the proposed regulation to

amend the definition of a ‘‘non-smoker’’ was expected to apply only to miners

who developed primary cancer of the lung. Subsequently, the final regulation

was expanded to also include miners who developed non-malignant respiratory

disease. Since the vast majority of awards to miners are based on claims that

document non-malignant respiratory disease, this expansion portends additional

approvals.

It is unlikely that the level of approvals in 1999 and projected for 2000 will be

sustained over the long term. Accordingly for 2001, awards are projected to decline

by about 10 percent. Exclusive of the projected 2000 shortfall, payments in 2001 are

estimated at $16.2 million—although the budget pending with Congress requests

$13.7 million. We expect to approve about 205 awards, but the request level will

cover payouts for only 170 awards. Assuming interest of about $200,000, we would

need $16.0 million instead of the $13.7 million we are requesting in 2001.

Question. Congress has appropriated more than $200 million to the Trust Fund

established under the Radiation Exposure Compensation Act.

How many claims has the Department approved and how much has been spent

out of the Trust Fund to pay these claims?

Answer. From the inception of the Program in April 1992 through February 2000,

the Department has approved a total of 3,302 claims valued at over $244 million.

Question. What is the current balance in the Trust Fund with which to pay claims

during fiscal year 2000? When does the Department estimate that balances available to the Trust Fund will be exhausted and the federal government will no longer

be able to pay claims in fiscal year 2000?

Answer. Of the $11.8 million available in the Trust Fund in 2000, as of February

29, 2000, a total of $8.1 million had been paid out or had been committed for awards

approved, but not yet paid. Just $3.7 million was available to pay for awards approved in the 7 months remaining in the fiscal year.

The Trust Fund could be depleted in the April to June timeframe. Once the Trust

Fund has been exhausted, claims will continue to be adjudicated. Letters will be

issued to qualifying claimants stating that, although the criteria for approval have

been met, no payment can be made until additional funds have been appropriated.
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Question. Would you please provide the Subcommittee with updated information

on the number of claims approved for payment from the Trust Fund, the average

amount of the claims approved, the number of claims denied, and the general reason

for denial of these claims?

Answer. Through February 2000, a total of 3,302 claims were approved—with an

average value of $73,983—and 3,500 claims were denied. Claims are denied if one

or more of the following eligibility criteria are not met: disease, exposure and identification of the proper party to file a claim. Downwinder and onsite participant

claims are most frequently denied for failure to establish a compensable disease.

Most uranium miner claims are denied because documentation does not establish

exposure to the requisite amount of radiation during the course of underground uranium mining employment.

Question. For the record would you please provide the Subcommittee with a

breakdown of the types of claims approved or disapproved (childhood leukemia,

other downwinder, onsite participants or uranium miners), the number of claims

currently pending and the amounts disbursed by type of claim paid?

Answer. The following table lists, by category, the total value of the awards approved by the Radiation Exposure Compensation Program, as well as the number

of claims and appeals received, approved, disapproved and pending at the end of

February 2000.

RADIATION EXPOSURE COMPENSATION PROGRAM APRIL 1992–APRIL 2000

Value of

Awards

Claims

Received

Initially

Approved

Initially

Disapproved

Appeals

Received

Appeals

Approved

Appeals

Disapproved

Ending/Pending

Claims Appeals

Childhood Leukemia ... $1,100,000 41 22 19 9 .............. 9 ............ ............

Other Down-winder .... 78,070,000 2,898 1,540 1,258 212 22 185 100 5

Onsite Participant ...... 13,431,106 983 180 738 155 15 133 65 7

Uranium Miner ........... 151,691,500 3,269 1,422 1,623 331 101 217 224 13

Total .............. 244,292,606 7,191 3,164 3,638 707 138 544 389 25

Question. For my use, would you please provide this same information specifically

for claims from New Mexico, including the total claims received, the total claims approved, the total claims denied and the total claims pending?

Answer. With respect to claims for which the primary claimant resides in New

Mexico, the Department has approved 396 claims and appeals, with a total value

of over $39 million. The following table lists, by category, the value of the awards

and the number of claims and appeals received, approved, disapproved, and pending

at the end of February 2000.

RADIATION EXPOSURE COMPENSATION PROGRAM—NEW MEXICO APRIL 1992-FEBRUARY 2000

Value of

Awards

Claims

Received

Initially

Approved

Initially

Disapproved

Appeals

Received

Appeals

Approved

Appeals

Disapproved

Ending/Pending

Claims Appeals

Childhood Leukemia ... $50,000 1 1 .............. ............ .............. .............. ............ ............

Other Down-winder .... 250,000 18 5 12 2 .............. 2 1 ............

Onsite Participant ...... 600,000 34 7 25 6 1 5 2 ............

Uranium Miner ........... 38,134,500 1,076 348 645 117 34 75 83 8

Total .............. 39,034,500 1,129 361 682 125 35 82 86 8

Question. The request for the payment of claims for fiscal year 2001 totals $13.7

million. Is this amount sufficient to pay anticipated claims for that year? Why didn’t

the Administration request the full amount needed to fund the Program in 2001?

Does this assume that there will be any further changes either regulatory or statutory in the Radiation Exposure Compensation Program?

How many claims are projected to be filed and processed under current law in

the upcoming year?

Answer. As noted above, the 2001 request, $13.7 million, is an estimated $2.3 million short of requirements. The Department of Justice prepared its 2001 budget for

OMB review prior to the enactment of the 2000 appropriation. The 2001 request

was based on an ‘‘anticipated’’ appropriation for 2000. When the OMB budget was

prepared, the House mark provided no new funding for the Trust Fund, identifying

carryover of $8.3 million that would be available in 2000. The Senate mark was
100

$20.3 million. The Department believed at the time that the Senate mark was the

most likely scenario for 2000 and prepared its OMB request of $13.7 million based

on this assumption. OMB approved the full request. While the Department received

more funds from OMB during the appeals process, they were only sufficient to fund

a limited number of high-priority programs.

The 2001 request assumes that the current RECA statute and the regulations as

modified in April 1999 will be in effect; no further changes are assumed.

The following projections are based on the current statute and regulations: In

2000, we estimate that about 539 claims and appeals will be filed and that 378 will

be processed. In 2001, we estimate that about 365 claims and appeals will be filed

and that 379 will be processed.

Question. Does the Administration have any long-range estimates as to the number of claims that might be filed under the Radiation Exposure Compensation Act

under current law and regulations?

Answer. No. It is difficult to estimate with certainty the number of claims that

might be filed under the Radiation Exposure Compensation Act. The difficulty is

compounded because claimants who have been denied compensation are permitted

to file up to three times. Further, the Department continues to work to identify potential claimants, and to make information about the existence of the Program readily available to larger numbers of Americans through outreach efforts. For example,

last spring we sent notification of the Department of Justice’s modified regulations

to over 3,200 individuals, including formerly-denied claimants, advocacy groups and

attorneys. In November 1999, our website went ‘‘on-line,’’ providing information

about the Program and making e-mail communication available to the public. This

year alone, hundreds of individuals have visited the website.

Interest about the Program has also been generated outside the Department. During January and February 2000, the Public Health Service’s National Institute for

Occupational Safety and Health (NIOSH) notified approximately 12,000 former uranium miners and their families of the results of two NIOSH mortality studies involving white and Navajo uranium miners. The notification letter included information about the Program. Finally, this summer, several staff members will travel to

many of the affected communities to provide information about the Program and the

regulatory changes.

EVALUATION OF RESULTS—EXPENDITURES FOR STATE AND LOCAL ASSISTANCE

Background: While it is clear that good evaluation information is difficult to obtain. Each of the tasks involved—measuring outcomes, ensuring the consistency and

quality of the data collected, establishing the causal connection between outcomes

and program activities, and separating the influence of extraneous factors—raises

formidable technical or logistical problems that are not easily resolved. Thus, evaluating program impact generally requires a planned study and, often, considerable

limited by their ability to make useful links between budget requests and performance goals and to clearly explain how programs will achieve goals. A number of the

Crime Act or the Byrne discretionary grant awards appear to have been made only

on the basis of supposed benefit, and little empirical data has been advanced to support the continuation of these programs let alone the expansions proposed in the

21st Policing Initiative.

Question. In the last seven years, the DOJ has awarded billions of dollars for

state and local assistance. Beginning with 1993’s Police Hiring Supplement program

and later the COPS program, and then continuing through such program examples

as drug courts and violence against women, the development of many of these programs was permitted on the basis of a deference to the executive branch’s initiatives. Nonetheless, there was a clear expectation that these programs would be evaluated. Consistent with this expectation, millions of dollars were directed to the National Institute of Justice to evaluate these programs.

Of these model or experimental programs, what solid evaluation results can you

cite that these programs did anything beyond employ consultants? How have results

led to program modification or termination, or conversely were used to validate a

program so as to lead to its replication?

Answer. The National Institute of Justice (NIJ), in partnership with program offices in the Office of Justice Programs (OJP) and the Office of Community Oriented

Policing Services (COPS), has undertaken a broad and varied evaluation agenda involving most program initiatives implemented under the 1994 Crime Act. Some of

these projects, such as the COPS National Evaluation, comprise comprehensive

evaluations of a major Crime Act Title. Others, such as the Drug Courts evaluation

are narrowly focused on one part of a program office’s activity. In addition, NIJ uses

a research and evaluation strategy designed to capture the outcomes of criminal jus-
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tice innovation by local programs funded through Crime Act program offices. Where

possible, process information and preliminary findings are used to refine and modify

Crime Act programs, and to make recommendations for future changes. A few examples are provided below.

In partnership with the COPS Office, an evaluation of the Chicago Alternative Policing Strategy program found that, on average, citizens in neighborhoods where

community policing was implemented improved in their perception of police in comparison to communities without community policing programs. Residents in neighborhoods with community policing were more optimistic about future policing trends

and were more satisfied with police responsiveness to neighborhood problems. These

results have been replicated in places like Aurora, Joliet, IL and Tempe, AZ, and

have been used to make informed modifications to programs, and to further facilitate implementation of effective community policing programs across the country.

The NIJ and COPS cooperated in funding direct analytical support to local police

departments through the Locally-Initiated Research Partnership (LIRP) program.

LIRP provides another example of how research can be used to directly inform policy and assist in policy development. NIJ and COPS have funded over forty partnerships between police departments and researchers to enhance analytic and strategic

planning capabilities in local police departments. Working together, partners identify and analyze local crime issues, and develop strategies to effectively address

identified problems. Topics effectively addressed in planning at the local level

through the LIRP’s program include community policing implementation, domestic

violence, unreported crime, crime mapping and analysis, performance evaluation,

multi-lingual capability, and the use of the Internet for police/citizen communications.

For instance, the partnership between the Berkeley, CA Police Department and

the East Bay Public Safety Corridor Partnership developed a preliminary risk assessment tool for police to use in making decisions about appropriate interventions

based on the risk of recidivism. This Domestic Violence Safety Assessment/Supplemental Report is used by the Berkeley Police Department in all domestic violence

cases and assists officers in assessing whether a case needs special attention.

A partnership between six sheriffs’ offices in the State of Florida and the University of Florida trained sheriffs patrolling neighborhoods in communication skills; established a permanent partnership that allowed the members to identify needs to

pursue funding; trained sheriffs on using research to guide practice; evaluated the

impact of the training by interviewing citizens and provided police with a guidebook

on effective communication practices; and set up a mechanism to expand the research partnership.

In a partnership between Northeastern University and the Boston Police Department, police members were guided through a strategic planning process that resulted in the creation of 16 neighborhood teams to identify salient issues in their

areas and develop and implement strategies. Benefits of the partnership included

increased visibility of police, greater involvement by community members in controlling crime and disorder, and improved relationships between police and the community.

In cooperation with COPS, NIJ continues to examine a wide range of issues pertaining to the implementation of community-oriented, and problem-solving policing.

Research findings have been continuously applied since the beginning of the COPS/

NIJ collaboration. For instance, the evaluation of the Boston Ceasefire project documented a way in which researchers and practitioners may work in partnership to

develop data-informed strategies to reduce youth gun violence. Through this partnership the Boston group developed strategies that reduced homicide and victimization by 60 percent and serious gang violence in the targeted area became a rare

event. As a result, the approach used in the Ceasefire Project is being replicated

across the country in cities such as Minneapolis, MN, Baltimore, MD, Los Angeles,

CA, Stockton, CA, Lowell, MA, Bronx, NY and High Point, NY.

The success of this research/practitioner partnership approach has prompted further development of similar programs like Strategic Approaches to Community Safety Initiative (SACSI). Currently in five pilot communities, researchers are teaming

with local decision makers and practitioners to identify and analyze local problems,

develop and implement policies and strategies, and tailor these interventions to

crime problems at the local level.

The Drug Court Program Office (DCPO) also has actively encouraged both local

drug court evaluation efforts and national research through the NIJ. As another example of research leading to program modification and innovation, research results

suggest incentives to be an effective means of reducing drug use. Also, results from

a study of the experimental drug treatment/drug court program in the District of

Columbia Superior Court demonstrate that sanctions should be consistently and im-
102

mediately applied in order to enhance their impact. With these findings, drug courts

have implemented policies to provide both timely sanctions and incentives as a

means reducing drug use and program violations.

To further study the effectiveness of this specialized type of court, NIJ awarded

two research grants examining 4 of the older drug courts in the country. First phase

reports of these evaluations have been recently submitted and findings show specialized drug courts are working to reduce substance abuse. Both studies examined rearrest rates of drug court participants. In Portland, OR, the median time to re-arrest for drug court participants was 104 days, compared to 51 days for those who

‘‘never entered’’ and 29 days for those who ‘‘never attended’’ the drug court program.

In Las Vegas, NV, the median time to re-arrest for drug court participants was 94

days, compared to 52 days for their counterparts. Analysis over a 12-month period

showed that re-arrest rates are lower among drug court participants; and, drug

court participants are rearrested later when compared to those not participating in

the drug court (who are most often rearrested in the first month). Similar results

were also found in a second study indicating that recidivism rates decline and the

time to re-arrest increases with drug court participation. Effective program modifications and refinements such as these have been disseminated through educational

and technical assistance provided by the DCPO and the National Association of

Drug Court Professionals.

As another example, NIJ’s evaluation of the Violence Against Women’s office

funded, Services, Training, Officers, Prosecutors (STOP) program demonstrates the

importance of a coordinated community response, and the impact of victims’ services

as a response to the serious problem of violence against women. Preliminary results

show increasing numbers of women victims of violence are being served, and more

perpetrators of domestic and sexual violence are being arrested and convicted as a

result of STOP programming. Results from a 1999 survey of programs indicate that

the percentage of domestic violence victims served increased annually for 85 percent

of agencies providing domestic violence data. Similarly, the percentage of sexual assault victims served increased with STOP funding for 86 percent of the agencies

providing sexual assault data. In one program site, the U.S. Attorney’s Office in

Washington, DC increased the rate of cases charged and tried by 76 percent, and

dramatically increased the rate of cases resulting in conviction by 324 percent.

Based upon results like these, the Administration has proposed that Violence

Against Women Act-II include provisions to promote collaboration, to add specific

types of program activities to be funded, to make distribution of funds more flexible,

to lengthen the time frame for spending STOP dollars, to expand funding to include

sexual assault projects, to promote projects for women from under-served communities, and to develop better data and evaluation systems among other recommendations.

Because measuring and documenting the ongoing program activities and outputs

is a priority, NIJ requires all grantees to regularly report on all evaluation efforts.

In this way, NIJ helps to facilitate the continuing improvement and refinement of

criminal justice practice and policy by striving to provide empirically-based evaluation findings in a timely fashion. In many cases, OJP programs are attempting to

alter the very foundation of criminal justice practice, and these program efforts

often require a longer time frame for adequate evaluation of outcomes and impact.

Since these long-term outcomes are at least as important as short-term effects,

many of these evaluations initiated with the Crime Act are on-going.

NIJ recognizes that practitioners and policy-makers need up-to-date evaluation

findings and research results. Whenever preliminary findings from these evaluations have become available, NIJ uses dissemination vehicles such as the annual research and evaluation conference, Research in Progress seminars, and Research Preview publications and lectures. In these ways, NIJ strives to inform policy-makers

and practitioners while still preserving the integrity of the evaluation design and

guarding against forming premature conclusions or promulgating findings not yet

supported by the data or the design of the evaluation.

GPRA—MANAGING FOR RESULTS—IS DOJ BUDGET INFORMATION CREDIBLE?

Background: As a key element, credibility of agency performance information is

understood through a set of best practices. To be credible, this set must include a

clear description of how the agency verifies and validates performance information.

We can also recognize credible information if an agency’s plan describes data limitations, including actions used to compensate for poor quality or missing data, as well

as the implications of data limitations in terms of assessing performance. While it

is understood that developing sharp performance information is a difficult process,

there is little excuse for lack of reliability of financial information. This is troubling
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when, for example, considering the problems with the stewardship of the COPS program and its grant awards.

Question. The credibility of performance information remains a problem since

agencies have: (1) offered limited indications that data are reliable; (2) failed to

identify the actions needed to compensate for weak data; or (3) neglected to compensate for the impact on implications for decision making caused by weak performance data and protect against these data limits. The DOJ was one of four agencies

that GAO has determined to have credible performance information. Congratulations. However, on February 4, 2000 the GAO noted that as required under the

Chief Financial Officer’s Act, the audit opinion for DOJ’s fiscal year 1998 Financial

Statement contained the following disclaimer from the auditor: ‘‘The auditor does

not know if the financial statements are reliable in all material respects.’’

Given that reliable financial information is the basis for decision making and

oversight of performance within any agency, how troubling is this disclaimer? What

needs to be done to insure timely, complete, accurate financial information?

Answer. On March 1, 2000, GAO and OMB were notified that DOJ received a

‘‘qualified opinion’’ from the auditors on the fiscal year 1999 DOJ Financial Statement. Of the 10 DOJ entities audited, 9 received unqualified or ‘‘clean’’ opinions,

while 1, the INS, received a qualified opinion based on difficulties supporting deferred revenue and intragovernmental accounts payable data. The overall qualified

opinion means the auditors, except for the cited INS items, found that the DOJ financial statement presented reliably and fairly, in all material respects, the financial position of the Department. This was a significant improvement in financial

data reliability over the fiscal year 1998 disclaimer.

DOJ senior leadership recognizes that reliable financial data is a cornerstone for

decision making and accurate performance measurement. The fiscal year 1998 disclaimer was extremely troubling, and DOJ components implemented aggressive and

detailed corrective action plans to resolve the weaknesses cited in the audit. While

the fiscal year 1999 audit opinion was an improvement over fiscal year 1998, DOJ

components will again be implementing detailed corrective action plans to address

remaining weaknesses. These plans will be pursued aggressively and monitored

closely by the Attorney General and senior component management as DOJ works

towards an overall clean opinion for the fiscal year 2000 audit.

GPRA—MANAGING FOR RESULTS—LINKING DOJ COMPONENT BUDGET RESOURCE

REQUESTS AND GOALS

Background: In its July, 1999 review, ‘‘Agencies Fiscal Year 2000 Performance

Plans,’’ GAO commented that most of the annual performance plans do not sufficiently address how agencies will use their human capital to achieve results. Specifically, the report charges that few of the plans explain how the agency will build

and maintain the human capital necessary to achieve performance goals. Although

recruitment and training are addressed generally by agencies, GAO concluded that

the failure to integrate human capital planning with the systematic integration of

mission and program planning (one of the characteristics of a high performance organization) is a ‘‘very serious omission.’’

Question. Agency plans to use resources and strategies to achieve performance results are often limited by their ability to make useful links between budget requests

and performance goals and to clearly explain how programs will achieve goals. For

example, the GAO characterized the failure to strategically develop human capital

to achieve results as a government-wide problem.

What strategies has DOJ put in place to develop human capital necessary to

achieve results?

Answer. The fiscal year 2001 Summary Performance Plan reflects our efforts in

the area. The plan identifies the resources dedicated to the achievement of each

strategic and annual goal. This includes human capital as well as the skills those

individuals require and the IT systems upon which they depend to achieve stated

objectives and targets. The plan also identifies, by annual goal, the significant training required by not only by our staff but others including state and local enforcement regulators and other service providers. This typically includes training in

areas of high risk or new technology and includes training in law enforcement;

counter-terrorism efforts to respond to terrorist attacks using chemical, biological,

or nuclear weapons, referred to as first responder training; and training in missing

and exploited children. While these do not focus on individual DOJ staff development (which would be inappropriate for this document) they reflect our role as a

federal leader in developing the human capital required to achieve results for these

areas. Furthermore, DOJ conducted an informal assessment of our staffing and recruitment and found one area that warranted Departmental oversight; border patrol
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agents. As a result, targeted performance was developed for this area and is included in our plan.

In addition, we are revising our DOJ Strategic Plan, which is due to the Congress

in September 2000. We will be including strategies to address human capital development in our revised plan.

CASELOADS IN FEDERAL COURTS

Question. Madam Attorney General, 2 weeks ago, I spoke to a group of federal

judges in Albuquerque from all 4 Southwest border states—California, Arizona, New

Mexico and Texas.

As you must be aware, our border courts are swamped—these 4 districts handle

30 percent of the entire federal criminal caseload pertaining to illegal drugs and illegal immigration.

I understand that the President’s Budget requests increases for the U.S. Attorneys, the Marshals Service, and other resources, including for the federal courts.

Does the Department have an overall plan to address these resource needs to be

sure that the federal system can handle the increasing caseload that is generated

by our investment in law enforcement personnel and equipment?

Answer. The Department is concerned about the rising caseload in the border districts. We have considered these needs in developing our 2001 budget request. For

USAs, we are requesting 48 positions (27 attorneys), 24 workyears and $3,844,000

to complement the additional INS resources and to address a projected increase in

the number of immigration cases filed. The USMS is requesting $10,345,000 and

194 positions to handle the increased court security and prisoner workload that will

result from staffing increases in other law enforcement agencies. The USMS is also

requesting 43 positions and $2,063,000 to augment staff in districts where exceptional growth in the prisoner population has eclipsed the growth in the USMS workforce, principally along the Southwest Border.

In addition, the Department’s Detention Planning Committee (DPC), which is

chaired by the Deputy Attorney General and includes heads of the Department components, is responsible for the Department’s Detention Plan. This committee meets

periodically to resolve detention issues, and oversees the Detention Plan revisions.

The DPC also directs various working groups that address current and future

bedspace needs. The Detention plan calls for strengthening coordination of the law

enforcement and prosecutorial role in detention to predict more accurately the impact on detention and to identify, track and assess bedspace needs.

We are also requesting $1 million for the creation of a Detention Trustee, who

will report to the Deputy Attorney General, to improve our detention management

department-wide. The Detention Trustee will focus on four areas: (1) managing the

$25 million we are requesting for the detention and removal/repatriation of illegal

aliens apprehended outside the continental U.S.; (2) contract management for all

USMS and INS contracted detention space; (3) financial management of USMS and

INS detention resources; and (4) implementing detention health and safety standards. The Trustee will also ensure that detention needs are considered along with

any new enforcement or prosecutorial initiatives.

Question. For example, our federal court in Las Cruces, New Mexico handles 65

percent of all the federal criminal cases in New Mexico, yet it has no full-time sitting judge. It is also in dire need of another Assistant U.S. Attorney, more U.S. Marshals, and more pre-trial and administrative personnel.

Will you pledge that the Department will target a significant portion of these additional resources to the Southwest border courts to help address this backlog?

Answer. As you correctly point out, the Southwest border is the source of a very

large percentage of our overall criminal caseload. And when one considers just the

immigration caseload, an even larger majority of these cases originate along the

Southwest border. In determining the appropriate geographical allocation of new Assistant United States Attorneys, we follow a very detailed, analytical process whereby the competing needs of all the districts are taken into account and the most deserving districts are selected to receive the new resources. Because it is important

to safeguard that proven, analytical process, we would not want to commit at this

point to a specific geographical allocation, before we have had the opportunity to

consider all the facts. However, it is very likely, given the caseload numbers that

we have mentioned, that a significant portion of the new attorney positions would

be allocated along the Southwest border.

BIENNIAL BUDGETING—TIME-CONSUMING NATURE OF ANNUAL PROCESS

Background: The process to produce an annual budget takes almost 3 years: (1)

nearly 1 year to put together the President’s budget; (2) another year for Congress
105

to legislate the budget; and (3) the final year to actually execute the budget. Today,

an agency manager is in the process of working on three different annual budgets.

That manager is executing the fiscal year 2000 budget, he is preparing testimony

and support materials for the fiscal year 2001 budget, and he will shortly begin

preparation on the President’s fiscal year 2002 budget.

I am very pleased to see that, for the second year in a row, the President’s budget

supports biennial budgeting and appropriating.

Question. Can you describe the steps involved in the process for developing a

President’s budget?

Answer. The Department of Justice develops its President’s budget in three main

parts:

Component Request to the Department:

—Component develops budget estimates and presents them to the Attorney General

—The component request is reviewed by the Justice Management Division and

recommendations are made to the Attorney General and Departmental management

—The Attorney General and Departmental management make final decisions for

submission to the Office of Management and Budget (OMB)

Departmental Request to OMB:

—The Department provides budget estimates to OMB

OMB provides a passback of approved levels the Department provides OMB with

an appeal of the passback levels the Department policy level and OMB management

or White House (and, if necessary, the President) negotiate to arrive at budget levels

(President’s Request) for submission to Congress

President’s Request to Congress:

—The Department presents a final budget request to Congress

Question. Congress seems to be constantly working on the budget. Are the agencies and OMB also constantly working on the budget?

Answer. OMB and the Department’s budget offices spend a considerable amount

of time preparing, formulating, presenting and executing three budget cycles, concurrently, for most of any given fiscal year. At the present time, the Department

is developing fiscal year 2002 estimates, presenting the fiscal year 2001 budget to

Congress, and executing the fiscal year 2000 appropriation.

The Department’s program and policy offices spend the majority of their time implementing programs and projects passed by Congress, and executing the appropriated budget.

Question. Do you think that under the current budget process there is a preoccupation with budget projections and resource allocation as opposed to actually

running programs and reviewing how they are operating?

Answer. Program and policy offices within the Department spend the majority of

their time implementing programs and projects passed by Congress, and executing

the appropriated budget. The budget offices provide an oversight role on all budgetary matters for the programs of the Department. This enables the program and

policy offices to manage their programs, within Congressional intent and budget

constraints.

Question. Can you describe how your job as the head of a major cabinet department would change if we moved to a system of biennial budgeting and appropriations?

Answer. The Department strongly supports reforms to improve the efficiency and

effectiveness of the Federal Government. We believe that biennial budgeting offers

a management tool with potential to enhance our performance. The primary benefit

to a 2-year budget would be that the Department would be allowed more time to

implement and manage projects, and provide long-range planning and oversight of

programs. However, in order for biennial budgeting to work, Congress must afford

agencies the flexibility to respond to changing and unforseen circumstances that

may arise as a result of the time lag between budget years. Mid-cycle reviews would

have to occur, with possible supplementals to the appropriations bill. If this process

becomes too cumbersome with excessive negotiations and supplementals, then the

time saved, essentially, would be lost.

QUESTIONS SUBMITTED BY SENATOR MITCH MCCONNELL

TOBACCO LITIGATION

Question. Price increases resulting from any damage award in the federal lawsuit

against the tobacco industry would cause a decline in the demand for cigarettes.
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Price increases resulting from the settlement of the state health care reimbursement

suits have already led to a 45 percent decline in burley tobacco quota and an 18.5

percent decline in flue-cured tobacco quota. Have you estimated the likely declines

in domestic tobacco quotas if the government prevails in the tobacco lawsuit?

Answer. We have not prepared any such estimates. The litigation filed by the Federal Government—United Sates v. Philip Morris, Inc., et al.—was brought under the

Medical Care Recovery Act (MCRA) and the Medicare Secondary Payer Act (MSP)

to recover money spent by the Federal Government on smoking-related health care

costs, and under the Racketeer Influenced and Corrupt Organizations Act (RICO)

to obtain equitable relief, and to prevent and restrain certain unlawful conduct.

Issues related to the effect that potential recoveries by the United States may have

on tobacco domestic tobacco quotas are not presented by the case.

That does not mean that the concerns of tobacco farmers are not shared by the

Administration. Indeed, as the Administration has said on numerous occasions, it

is committed to protecting tobacco farmers and their communities. As you know, the

Administration fully supported the $5 billion settlement to compensate tobacco

farmers, which was agreed to by the states and industry last year. Second, the

President signed and supported the fiscal year 2000 Agricultural Appropriations

bill, which provides $328 million to compensate tobacco farmers who had quotas reduced in 1999, and we also note that the Agricultural Risk Protection Act of 2000

includes $340 million for tobacco farmers in fiscal year 2001. And in the context of

the pending litigation, the Administration supports legislation that would ensure

that an adequate portion of any recovery the Department may obtain is used to ensure the financial security of tobacco farmers and their communities.

Question. Have you estimated the economic and other effects on tobacco farmers

of a government victory in this lawsuit?

Answer. No. See response above.

Question. Have you estimated the economic effect on communities in which tobacco is grown if the government prevails in the tobacco lawsuit?

Answer. No. See response above.

Question. Please provide any documents relating to your responses to the above

questions.

Answer. For the reasons above, the Department has not performed any analyses

of the type that you have requested, and therefore has no documents responsive to

this request.

Question. The Justice Department’s request for $20 million in fiscal year 2000 for

tobacco litigation was denied. How is the Department funding its ongoing efforts in

that litigation?

Answer. During the appropriations process, Congress made clear that the Department could use existing funding sources to support its litigation effort, which seeks

to recover billions of dollars for the American taxpayer. Indeed, Senator Judd Gregg,

Chairman of the Commerce, Justice, State Appropriations Subcommittee, stated in

a colloquy on the Senate floor on July 22, 1999:

While the Committee was unable to provide new funding [for the tobacco

litigation] as the Administration requested, nothing in the bill or the report

language prohibits the Department from using generally appropriated

funds, including funds from the Fees and Expenses of Witnesses Account,

to pursue this litigation if the Department concludes it has merit under existing law.

In the same colloquy, Senator Durbin stated:

I think the record is eminently clear that the Department of Justice has

the authority to move forward on tobacco litigation without any limitation

whatsoever from this legislation.

Accordingly, the Department is drawing on funding sources that it regularly uses

to support litigation on behalf of the United States. In particular, the Justice Department is using base funding provided to the Civil Division ($1.8 million) and

funds from the Health Care Fraud and Abuse Control account ($4 million), which

are used in cases that seek to protect, among other things, the Medicare trust fund.

Department funding for tobacco litigation currently planned for fiscal year 2000 totals $5.8 million.

In addition, as the Department has done in other significant cases, we have obtained agreements from three client agencies—the Departments of Defense, Veterans Affairs and Health and Human Services—to reimburse the Department for up

to $7.95 million in total. Congress expressly authorized such reimbursements agreements in Section 109 of the fiscal year 1995 Commerce, Justice, State appropriations bill, which stated:
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Notwithstanding 31 U.S.C. 3302 or any other law, in litigation involving

unusually high costs, the Department of Justice may receive and retain reimbursement for salaries and expenses, for fiscal year 1995 and thereafter,

from any other governmental component being represented in the litigation.

DOD, VA and HHS are being represented in the cigarette litigation; indeed, damages recovered under the theories advanced in the litigation will flow in large measure directly to those Departments for the provision of health care. This approach

is consistent with a 1998 Sense of the Congress, where Congress went on record to

urge the Attorney General to pursue a federal suit to recover the costs of tobaccorelated damages from the cigarette companies. In the Transportation Equity Act for

the 21st Century, Public Law 105–178, Congress passed the following language:

It is the sense of the Congress—(1) that the Attorney General or the Secretary of Veterans Affairs, as appropriate, should take all steps necessary

to recover from tobacco companies amounts corresponding to the costs

which would be incurred by the Department of Veterans Affairs for treatment of tobacco-related illnesses of veterans.

Congress further expressed its view that funds recovered in such a suit should

be used to fund VA health care for veterans made ill by tobacco use.

These agency reimbursement agreements are discussed in more detail in the responses below. If the agency reimbursements are unavailable, and absent any other

funds being made available, this litigation could not proceed.

Question. The Justice Department has not requested any money in its fiscal year

2001 budget for tobacco litigation. There is, however, a line-item request for $4 million in the Department of Health and Human Services (HHS) budget in the Public

Health and Social Services Emergency Fund. Why is this request in the HHS budget and not in the Justice Department budget?

Answer. The Administration plans to spend up to $26.2 million for tobacco litigation in fiscal year 2001. This estimate is based on anticipated agency reimbursements totaling $12 million, including $4 million from the Department of Health and

Human Services (HHS), $4 million from Department of Defense (DOD), and $4 million from the Department of Veterans Affairs (VA). The remaining $14.2 million will

be funded out of the Department’s base budget request which is pending Congressional approval and the Health Care Fraud and Abuse Control Act (HCFAC) Trust

Fund. Specifically, $10.4 million will be allocated from the HCFAC, and $1.8 million

will be provided from the Civil Division’s base funds. Additionally, we estimate

using up to $2 million from the Fees and Expenses of Witnesses appropriation to

fund potential expert witness expenses.

Since the enactment of Section 109, the Civil Division has depended heavily on

agency reimbursements, particularly for high-stakes cases that require a substantial

dedication of resources. Indeed, the Department has relied on this provision to obtain from client agencies more than $338 million for litigation that has a potential

liability to the Federal Government of more than $36 billion, and for litigation that

could return billions more to the Treasury of the United States. The reimbursements we receive fund personnel, automated litigation support, alternative dispute

resolution, and consultant services that are critical to meeting discovery requirements and preparing for trial.

In the case of the Department’s litigation against the cigarette companies, U.S.

v. Philip Morris, Inc., et al., we have received funds from three of the agencies on

whose behalf it was brought: HHS, VA, and DOD. The litigation seeks to recover

funds that these agencies have paid to cover the costs of treatment for tobacco-related illnesses under programs including: Medicare, the Veterans Health Administration (VHA), the Civilian Health and Medical Program for the VA (CHAMPVA),

the Civilian Health and Medical Program for the Uniformed Services (CHAMPUS),

TRICARE, and the Federal Employees Health Benefits Act (FEHBA).

The Department of Justice (DOJ) consulted with these agencies during the development of the cigarette litigation. These agencies supported the filing of the suit,

and continue to support the litigation in active cooperation with DOJ. In light of

the billions of federal dollars spent each year on cigarette-related diseases, we believe that these agencies and the federal taxpayers will recoup their investment in

this litigation many times over.

Question. Has HHS provided any funding or support to assist in its prosecution

of the tobacco lawsuit in fiscal year 1999 or fiscal year 2000?

Answer. In fiscal year 1999, HHS did not provide the DOJ with any funding to

support the cigarette litigation. As in other litigation involving Medicare and other

HHS programs, HHS personnel did assist the Department in developing the litigation, primarily by providing the Department with access to relevant HHS informa-
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tion. Whenever the Department of Justice litigates on behalf of an agency, we must

necessarily work closely with agency staff who have access to relevant information,

primarily those individuals involved in the matters at issue in the litigation and attorneys in agency general counsel’s offices. In the cigarette litigation, the Department is seeking to recover funds expended by HHS to treat cigarette-related illnesses. As the agency that incurred the costs, HHS possesses the information needed to document these expenditures.

In fiscal year 2000, in addition to the type of assistance outlined above, HHS has reimbursed the Department $2.65 million for costs incurred in pursuing this litigation.

Question. If so, how has HHS provided this assistance to the Department of Justice? Has HHS made any direct payments to the Department of Justice? Have HHS

personnel provided support for the Department of Justice? Has HHS retained outside consultants or contractors to provide support?

Answer. See response above. As far as the DOJ is aware, HHS has not hired any

outside consultants or contractors to support our litigation efforts.

Question. How much has this support totaled, in time and estimated dollars expended?

Answer. We have no records that would indicate the time or money expended by

HHS personnel to assist the Department, other than the reimbursement payment

outlined above.

Question. Please provide a detailed breakdown of these expenditures.

Answer. We estimate that we will use the entire fiscal year 2000 reimbursement

from HHS for litigation consultants. This year, these services will be aimed primarily at establishing an empirically-sound mechanism for measuring damages.

Other than that, we do not have records that would indicate other expenditures by

HHS to assist DOJ in this litigation.

Question. What program items in HHS’s budget were used to provide funds for

tobacco litigation support for the Department of Justice?

Answer. The DOJ does not have information regarding the source of the funds

provided by HHS in support of cigarette litigation.

Question. Are there any other funding requests for tobacco litigation in the Administration’s budget? If so, please specify the specific budget(s) and the amount(s)

of the request.

Answer. There are no funding requests for cigarette litigation in fiscal year 2001

from any sources other than those identified in the response above.

Question. The Administration requested $20 million for fiscal year 2000 for to- bacco litigation but apparently requested only $4 million for tobacco litigation in fiscal year 2001. Why the dramatic decrease?

Answer. As outlined in more detail in the response above, the Administration’s fiscal year 2001 budget request for cigarette litigation totals $26.2 million.

Question. Do you plan to submit a reprogramming request for fiscal year 2000 for

tobacco litigation?

Answer. The Department has no plans to submit a reprogramming request for the

cigarette litigation in fiscal year 2000.

Question. Will the Administration seek additional funds for tobacco litigation in

the fiscal year 2000 supplemental appropriations?

Answer. The Department has not sought additional funds for the cigarette litigation in the fiscal year 2000 supplemental appropriation.

Question. How much has the Department spent to date on the tobacco lawsuit?

Answer. As of May 9, 2000, the Civil Division had filled 26 positions and spent

$3.9 million in connection with the cigarette lawsuit.

Question. Did any of the personnel currently working on the tobacco lawsuit formerly work on any of the criminal investigations of the tobacco industry? Are they

able to make use of any of the information gained in those investigations?

Answer. No personnel working on the lawsuit previously worked on any criminal

investigation of the tobacco industry. The litigation filed by the Department was developed without any access to information obtained during the course of the Department’s criminal investigation against the tobacco industry.

Rule 6(e) of the Federal Rules of Criminal Procedure prohibits any government

attorney who is not involved in a grand jury proceeding from having access to that

grand jury information absent a court order.

Question. To date has the Department hired any consultants or contractors or

counsel to assist the Department in the tobacco lawsuit?

Answer. The Department has entered into contracts to assist the Department in

the development of its litigation. Information on one of those contracts, a legal consulting arrangement with the law firm of Robins, Kaplan, Miller & Ciresi, L.L.P.

(Robins, Kaplan), is outlined below. Because litigation is currently on-going, and the
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Department is relying on consultants to assist in the lawsuit, to provide detailed

information on these consultant activities and expertise on the public records could

prove damaging to the interests of the United States. Such information would not

be available to other parties in the litigation.

In addition, the presiding judge in the cigarette litigation, D.C. District Court

Judge Gladys Kessler, has issued an order requiring the parties to pay for the services of a court approved neutral, whose job it is to assist in the development of a

pre-trial case management plan. Information on the Department’s share of the funding of this court approved neutral is also outlined below.

Question. If so, please provide: the names of such consultants, contractors or counsel; the dates on which they were retained; the terms of their retention, including

any caps on the compensation that such consultants, contractors or counsel may receive either in total or on an hourly basis, and the length of time they are expected

to be retained; the specialties or expertise that each such consultant, contractor or

counsel has, and why this specialty or expertise is required to enable the government to prevail in this case.

Answer. The Department entered into a contract for legal consulting services with

the law firm of Robins, Kaplan, Miller & Ciresi L.L.P. (Robins, Kaplan) to provide

assistance the Department in the development of our potential litigation against the

major cigarette companies. This included assistance in gathering and analyzing evidence, developing potential litigation strategies, and conducting other similar activities. The Robins, Kaplan firm represented the state of Minnesota and Blue CrossBlue Shield of Minnesota in their litigation against the major cigarette companies.

The contract was entered into on April 5, 1999, and ended on June 30, 1999. Pur- suant to the contract, Robins, Kaplan was compensated at the rate of $75 per attorney hour, substantially below the firms’ normal billing rates. The total cost paid under this contract, which ended on June 30, 1999, was $50,113.34. This figure includes both attorney time ($28,023.75) and reimbursement of costs ($22,089.59).

(The contract had an outside cap on total compensation of $81,670; that cap was

not met.)

In addition, pursuant to a court order, the DOJ and the other parties to the current cigarette litigation are paying for the services of a court approved neutral. The

parties selected Donald H. Green of Pepper Hamilton, LLP. Retained last January,

he is experienced in complex litigation as well as alternative dispute resolution. Mr.

Green is assisting the parties in developing a pre-trial case management plan. After

the pending motions have been resolved, he will likely be used to assist in planning

the discovery phase. He is being compensated at $360 per hour. The Department

is paying 50 percent of his hourly rate, or, $180 per hour.

Question. Have any other federal agencies provided funding or assistance to the

Department of Justice (including any legal, paralegal, expert or technical services

or cooperation by government employees, contractors or others) in connection with

the tobacco lawsuit? If so, please identify those agencies, the nature of the funding

or assistance, and the estimated cost of providing that assistance.

Answer. Yes. Discovery in the cigarette litigation is likely to involve the production of documents from numerous federal agencies. Judge Kessler has ordered the

Federal Government to preserve its tobacco-related documents. In addition, pursuant to the informal discovery process ordered by Judge Kessler, the Department and

the cigarette company defendants have begun discussions concerning the scope of

documents that the defendants are likely to seek in discovery. Accordingly, federal

agencies with such documents have provided assistance to the Department in complying with the court’s order and preparing for discovery in the case. In addition,

agencies such as DOD), VA, and the Office of Personnel Management (OPM), which

have paid for the medical care of beneficiaries suffering from cigarette-related diseases, have assisted the Department by providing the Department access to information necessary to develop the case. Such assistance is regularly provided to the

DOJ in other cases. The DOJ does not have any records that would indicate time

expended by agency personnel on the litigation.

As discussed in our response to the second question above, the HHS has entered

a reimbursement agreement with the Civil Division which will fund up to $2.65 million. In addition, the DOD and VA have entered into agreements with the DOJ to

reimburse Justice for a portion of the costs incurred to bring this litigation. Each

agency is providing the Department with a reimbursement of $2.65 million. These

reimbursements were arranged primarily to fund the fiscal year 2000 costs we estimate in connection with the pretrial phase of the litigation. The Division expects

to incur significant expenses for the services of consultants skilled in damage assessment as well as individuals or firms possessing expertise in medical specialities.

A portion of our Automated Litigation Support costs arising from discovery activities

will also be funded through these reimbursement agreements.
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LITIGATION AGAINST FIREARM MANUFACTURERS

Question. The Department of Housing and Urban Development has proposed that

litigation be filed against firearm manufacturers on behalf of various public housing

authorities. Has the Department of Justice engaged in any evaluation or analysis

of the possibility of a lawsuit by the Federal Government or by any recipients of

federal funds against firearm manufacturers?

Answer. Following the filing by private parties of several suits against the gun

industry, the Department of Justice, at the request of HUD, reviewed possible litigation against the gun industry in late 1998.

HUD is not filing or planning to file litigation, in its own name or on behalf of

any agency of the Federal Government, against the nation’s gun manufacturers to

recover costs spent to address gun-related violence in public housing. DOJ is not filing or planning to file such a suit on HUD’s behalf.

The Administration indicated that certain Public Housing Authorities (PHAs) may

bring litigation against gun manufacturers. The PHAs are not federal entities, but

are separate legal entities organized under state laws that can sue and be sued. For

that reason, if the PHAs choose to sue gun manufacturers, the Justice Department

would have no role in the litigation. Accordingly, the Justice Department has not

expended its resources to examine the merits of such a suit.

Question. How much activity—expressed in time and estimated dollar expenditures—has the Department of Justice devoted to possible litigation against the firearm manufacturers?

Answer. As stated above, the Department has no plans to bring litigation against

the firearms industry. As you know, the Administration has engaged in discussions

with certain gun manufacturers to discuss policies the manufacturers can adopt to

improve the safety of their products, and keep their products from falling into the

hands of criminals, and has entered into an agreement with one manufacturer,

Smith and Wesson. The Justice Department has always played a leading role in developing the Administration’s views on gun policy, and we will continue to do so.

Our contribution, however, has been limited to a policy role.

QUESTIONS SUBMITTED BY SENATOR BEN NIGHTHORSE CAMPBELL

METHAMPHETAMINE TRAFFICKING

Question. In Colorado, particularly the Western Slope and Grand Junction, the

methamphetamine problem has been described as ‘‘beyond crises.’’ Can you please

tell the Committee what type of resources the Department plans on devoting to

fighting the meth problem? What are your plans for working with the Drug Enforcement Administration (DEA) to fight this problem?

Answer. In fiscal year 2000, the Community Oriented Policing Service (COPS) is

providing $1 million to the Rocky Mountain Methamphetamine Initiative in Colorado. This funding will be used for additional law enforcement officers and to train

local and state law enforcement officers on the proper recognition, collection, removal, and destruction of methamphetamine. COPS is currently working with DEA

and the Bureau of Justice Assistance (BJA) to administer this funding and provide

technical assistance, if necessary.

DEA has provided clandestine laboratory safety certification training to 55 state

and local police officers and 18 DEA agents in the State of Colorado over the past

5 years. Each of these officers were issued over $2,000 in specialized clandestine

laboratory safety equipment. In addition to the 55 Colorado officers who graduated

from DEA’s 1 week Clandestine Laboratory Safety Certification School, numerous

officers have been provided annual clandestine laboratory re-certification training.

This training is mandated by the Code of Federal Regulations (CFR—1910.12), and

allows the officers to maintain their current certification status. DEA will continue

to provide this basic and re-certification training to law enforcement personnel in

the State of Colorado, this year and in the years to come.

DEA recently distributed $63,000 to the Denver Field Division for the acquisition

of additional specialized clandestine laboratory safety equipment (i.e., air purified

respirators, air monitors, nomex fire-resistant ballistic vests, etc.) for DEA special

agents and task force officers who participate in clandestine laboratory raids. It is

anticipated that another $63,000 in funding for this type of safety equipment will

also be provided to the Denver Field Division before September 2000. In addition,

DEA recently purchased two new clandestine laboratory safety trucks for utilization

within the Denver Field Division.

The State of Colorado will also continue to benefit from programs specifically

aimed at addressing the statewide methamphetamine trafficking problem. DEA’s
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Operation Velocity and Operation Backtrack provide funding and investigative support to the field for methamphetamine investigations, clandestine laboratory investigations, and investigations involving rogue chemical companies that divert methamphetamine precursor chemicals for illegal use. Both of these programs are currently supporting cases in Colorado.

Question. The DEA is planning on opening a new office in Grand Junction, Colorado, which will be an off-shoot of the Glenwood Springs office. What impact will

the office have on the Western Slope of Colorado? How many agents should be assigned to that office?

Answer. DEA opened a Post of Duty (POD) in Grand Junction in March 1999, and

plans have been approved to upgrade this office to a Resident Office. DEA currently

has two special agents in the Grand Junction POD, which is co-located with a state

and local HIDTA task force. As part of the Grand Junction upgrade, DEA will move

four special agent positions from its Glenwood Springs Office (thereby reorganizing

Glenwood Springs to a POD) to Grand Junction in an effort to address drug trafficking issues in the Western Slope region of Colorado more fully.

DEA agents in Grand Junction currently participate in the 14-member Grand Valley Joint Task Force, which includes law enforcement officers from the MESA County Sheriff’s Office, the Grand Junction Police Department, and the Colorado Highway Patrol.

The Grand Valley Joint Task Force has investigated 28 cases, resulting in 247 arrests. The following case summaries exemplify the close collaborative relationship

between DEA and state and local law enforcement on the Grand Valley Joint Task

Force.

—A methamphetamine case which resulted in the arrest of 25 defendants, the seizure of 5 pounds of methamphetamine, 1 kilogram of cocaine and $60,000 in

cash. Further coordination with the Immigration and Naturalization Service

(INS) resulted in the arrest of nine illegal aliens.

—The intelligence gathered as a result of this case enabled DEA’s Los Angeles

Field Division to initiate five Title III wiretaps, resulting in the seizure of three

methamphetamine laboratories. These seizures were traced to an important

Mexican methamphetamine group working along the Southwest border, and led

to 7 arrests and the seizure of 41 gallons of methamphetamine solution, the

equivalent of 160 pounds of methamphetamine.

The addition of four special agent personnel to DEA’s upgraded Grand Junction

Resident Office will allow the agency to expand its investigation of major methamphetamine traffickers operating within the Western Slope region and increase

the agency’s participation in programs like the Grand Valley Joint Task Force.

QUESTIONS SUBMITTED BY SENATOR FRANK R. LAUTENBERG

DRUG TREATMENT/OFFENDER REENTRY PROGRAM

Background: As you know, there are now more than 1.8 million people in our prisons and jails. A recent study indicates that at some point this year the population

of prisoners will increase to 2 million.

Studies also show that more than 80 percent of the prison population has some

kind of substance abuse problem. But many prisoners are not being treated for their

drug problem. According to the Office of National Drug Control Policy, only about

15 percent of all state inmates complete substance abuse treatment before their release. Each year, 500,000 offenders are released without adequate drug treatment.

So we wind up with a cycle of drug use and crime. Prisoners who have not received drug treatment get back on the streets and commit crime.

Madame Attorney General, the Department’s budget request includes funding for

a number of programs that will help prisoners get drug treatment and assist their

return to society. There is $171 million in additional funding for drug treatment

programs; $75 million for grants to help states and localities implement drug supervision programs; $65 million for the Residential Substance Abuse Treatment Program; and $60 million for an Offender Reentry Program which will fund partnerships between law enforcement entities and community leaders to better prepare

communities to handle inmates reentering society.

Question. How far will these funds go in providing drug treatment to all of the

prisoners who need it? If 85 percent of prisoners are not getting drug treatment,

we have a long way to go.

Answer. Of the estimated 1.4 million offenders currently housed in our nation’s

prisons and jails, over 80 percent are substance abusers and, therefore, candidates

for some sort of intervention. It is well established that the need for residential sub-
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stance abuse treatment outpaces the Federal Government’s ability to provide it— for example, during 2000, OJP’s Residential Substance Abuse Treatment (RSAT)

program estimates it will provide drug treatment services to 20,000 inmates. However, it should be noted that OJP’s training and technical assistance activities continue to do much in the way of educating state and local criminal justice agencies

on the value comprehensive substance abuse treatment, lessons learned, and best

practices.

Recent studies demonstrate that drug-dependent individuals who receive comprehensive treatment decrease their drug use, decrease their criminal behavior, increase their employment, improve their social and interpersonal functioning, and

improve their physical health. When compared to substance abusers who voluntarily

enter treatment, those coerced into treatment through the criminal justice system

are just as likely to succeed.

Moreover, studies suggest that, not only do treatment interventions work, they

are cost-effective. In 1994, the RAND Corporation reported that drug treatment is

the most cost-effective drug control intervention. Another 1994 study examined

CALDATA, a comprehensive drug and alcohol treatment program in California, and

concluded that for every dollar invested in drug treatment, taxpayers saved $7. This

savings was attributable to decreased use of drugs and alcohol and the resulting reduction in costs related to crime and health care.

One major lesson we have learned is that leveraging the coercive power of the

criminal justice system to provide substance treatment and impose sanctions

against the offender is effective in breaking the cycle of substance abuse and crime.

This is evident in the success of OJP’s Residential Substance Abuse Treatment

(RSAT) program, which provides formula grants to states for drug testing and treatment, and the Drug Court program, which provides discretionary grant funding for

planning, implementing and enhancing of state and local drug courts, which provide

specialized drug treatment and rehabilitation for non-violent substance abusing offenders. To help bridge the funding gap, in 2001, OJP requests $75 million to establish the Zero Tolerance and Drug Intervention Initiative, which will provide discretionary grants to state, local and tribal governments to institute comprehensive

drug testing and treatment programs. Local and tribal governments are expected to

be the largest beneficiaries as very little state funding ‘‘flows through’’ to local and

tribal jails. All three of these programs fall under the Administration’s ‘‘Stop

Drugs—Stop Crime’’ Initiative.

Compounding the problem, are the estimated 500,000 inmates who will return to

communities this year. Historically, two-thirds of this population are rearrested for

new crimes within three years. Reentry programs, such as the proposed $60 million

Community Supervision Initiative: Project Reentry, would provide resources to assist in preparing offenders for transition from prison to the community by addressing critical self-sufficiency issues including substance abuse and mental health problems, and job readiness and placement.

The Department continues to leverage available funding to provide state and

locals with the necessary building blocks to implement comprehensive offender drug

testing and treatment interventions. By utilizing the federal resources provided,

state and local communities can create broad partnerships that use their combined

resources to implement comprehensive drug treatment programs and maximize the

number of offenders reached.

Question. Also, can you give us some additional information on the Offender Reentry Program? What types of assistance will that program provide?

Answer. The focus of the Offender Reentry Program is to help communities address the public safety challenges posed by state and federal prisoners returning to

the community. The Initiative would enable states and local communities to create

broad partnerships that will use their combined resources to provide the necessary

combination of surveillance, sanctions, incentives, and support services to provide

increased protection to both urban and rural communities that experience a high

percentage of returning inmates.

In 2001, a total of $145 million is requested for Project Reentry, which will be

administered through a joint partnership between DOJ’s Office of Justice Programs

(OJP), the Department of Labor (DOL), and the Department of Health and Human

Services’ Substance Abuse and Mental Health Services Administration (SAMHSA).

Of this amount, OJP would administer $60 million in program funding, the DOL

would target $75 million to develop a broad range of pre- and post-release job training and placement and other programs in the same communities, and SAMHSA

would dedicate $10 million in substance abuse and mental health treatment to support these efforts.

Central to OJP’s efforts is helping communities ensure that offenders are prepared for their return to communities through adequate planning and monitoring
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prior to and following release in such critical areas as employment and substance

abuse testing and treatment. Our efforts also focus on helping to prepare communities for returning offenders by supporting the analysis of reentry statistics and development of adequate supervision and support systems. Offender reentry plans

would be developed at both the individual and community levels, and would draw

upon and coordinate the resources of criminal justice agencies (i.e., institutional corrections, probation, parole, and police) as well as community resources (i.e., employment, treatment, family, business, and faith-based organizations).

Specifically, OJP’s $60 million would provide for the following:

The Reentry Partnerships Initiative ($40 million) focuses on developing broad governmental and community partnerships to oversee the development and implementation of offender as well as community reentry plans, including the use of graduated sanctions and incentives and enhanced offender supervision mechanisms to

keep offenders on track. Funding could be used to hire community safety officers—

community corrections (probation/parole) officers—to work with offenders while still

incarcerated and to help supervise offenders in the targeted neighborhoods as well

as to hire case managers who would work in partnership with police and community

leaders to develop the necessary support network to ensure successful transition to

jobs and treatment. Funds could be also used for drug and alcohol testing and treatment, community planning and analysis, developing appropriate progress tracking

tools, convening victims panels, and other surveillance and service efforts.

The Reentry Courts Initiative ($10 million) focuses on creating court-based oversight programs for returning offenders that would use the authority of the court not

only to develop and monitor offender reentry plans and to apply graduated sanctions

and incentives, but also to draw in other essential partners such as community corrections, local law enforcement, and a full range of service providers to help supervise and support the offender reentry process. Patterned after successful drug

courts, reentry courts would create judicial oversight of returning offenders to promote positive offender behavior.

The Juvenile Reentry Initiative ($5 million) would help states develop an intensive juvenile transition support program to address the public safety concerns and

needs of youth in custody of the juvenile justice system. Local juvenile justice agencies, juvenile correctional agencies, juvenile courts, parole agencies would work in

partnership with community-based service providers, law enforcement agencies, and

state and local Workforce Investment Boards to develop and implement a comprehensive juvenile reentry program with an emphasis on job training and placement services as well as educational, treatment, and family support.

Research and Development ($5 million) would be used to track the progress of the

Reentry Partnerships and Reentry Courts and to improve program content. NIJ

would undertake a series of coordinated activities that will inform state and local

efforts over time. NIJ would also sponsor research on a range of issues relating to

reentry programs, including drug and alcohol testing and treatment outcomes, the

ability of transition programs to prepare offenders for return to the community, the

effects of family and community ties on job performance and compliance with release conditions, and the attitudes of the business community toward returning offenders as employees. NIJ will evaluate the results of this information as well as

a cross section of the projects funded under the joint Justice/Labor/HHS initiatives.

These results will be communicated rapidly to participating programs through cluster conferences, information dissemination to the field, and a national teleconference.

DEATH PENALTY

Question. In recent years, a number of death row inmates have used DNA testing

to prove that they were innocent. Since 1976, when capital punishment was reinstated, 610 people have been executed. During the same time, 85 people have been

found innocent and were released from death row. They were not freed on some

technicality, there were freed because DNA evidence proved that they did not commit the crime. So, for every seven executions, one innocent person has been wrongly

sentenced to death. That is a very disturbing statistic.

These findings have renewed concerns about the death penalty. The American Bar

Association has called for a moratorium on executions. George Ryan, the Governor

of Illinois, has announced a moratorium on executions until a study of the death

penalty system in that state is completed.

According to the most recent Department of Justice report, there are 19 prisoners

facing a death sentence in the Federal Prison System. Are you confident that the

federal death penalty system is being administered properly with adequate protections for defendants?
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Answer. Yes. Before a decision is made to seek the death penalty, the potential

capital case is the subject of extensive Department review, which includes the evidence to support a determination of guilt and the aggravating and mitigating factors. In addition, federal capital defendants have the assistance of highly qualified

and experienced counsel at trial and all subsequent stages of review.

CHEMICAL SAFETY INFORMATION, SITE SECURITY AND FUELS REGULATORY RELIEF ACT

Question. I have a question about the implementation of the Chemical Safety Information, Site Security and Fuels Regulatory Relief Act (Public Law 106–40).

This measure was signed into law on August 5, 1999, after significant consultation with the Department of Justice and the Environmental Protection Agency. The

law requires the Administration to prepare within 1 year regulations governing the

distribution of off-site consequence analysis information, collected pursuant to section 112(r) of the Clean Air Act, or to allow full public access to that information

under the Freedom of Information Act. We agreed that the development of those

regulations would be informed by an assessment of the increased risk of terrorism

due to Internet access to this information and by an interim report designed to inform Congress on the vulnerability of stationary sources to criminal and terrorist

activity.

The negotiators were assured by Department of Justice and Administration representatives that this time line could be followed and that the interim site security

report would cost approximately $200,000–$500,000. Recently, however, I was informed that the necessary funds are more accurately $7 million and that those

funds are not readily available. I am concerned that the interim report produced by

August 5, 2000 may not fully discuss the site security issues identified in the law,

and that it may instead be a scoping study for the final report due in 2002. Clearly

this would be unacceptable. If there is a security threat to the nation’s chemical facilities, our constituents would surely want us to spend no more than one year assessing it. I am also concerned that the regulation promulgated under the law may

be imbalanced and possibly biased against the public’s right to know, including

more severely limiting local access to useful information than Congress intended.

Does the Department agree that its responsibility under the law is to produce by

August 5, 2000 an interim report with its findings to date, rather than merely to

produce a scoping study for the final report?

Answer. The Department of Justice agrees that the Chemical Safety Information,

Site Security and Fuels Regulatory Relief Act (Public Law 106–40) requires that the

Department submit an interim report that includes, at a minimum: (a) ‘‘the preliminary findings’’ of the 3 year report required by section 3(a)(H)(xi)(I) of Public Law

106–40; (b) ‘‘the methods used to develop the findings,’’ and (c) ‘‘an explanation of

the activities expected to occur that could cause the findings of the report . . . to

be different than the preliminary findings.’’ The Department intends to comply with

the statute’s requirements.

Question. Exactly how much has been accomplished towards completion of the interim report? Has the Department identified funding, through reprogramming or

other means, necessary to complete the interim report by August 5, 2000?

Answer. The fiscal year 2000 President’s budget did not request, nor did the fiscal

year 2000 Appropriations Act contain, any funding to conduct the study upon which

the final (3 year) and interim (1 year) reports must be based. The Department submitted to the Congress a request for reprogramming of $750,000 from the

Counterterrorism Fund for a contractor to conduct the study. The Senate has objected to this proposal as an inappropriate use of the Fund. Accordingly, although

the Department stands ready and willing to undertake the study, we are not able

to begin it until a source of funding is identified. The Department is continuing its

efforts to identify a source of funding for this study.

Question. Has the Department designated a single accountable individual who

will oversee completion of the interim report by August 5, 2000?

Answer. All three of the Department’s leadership offices (i.e., the Office of the Attorney General, the Office of the Deputy Attorney General, and the Office of the Associate Attorney General) are involved in oversight of this project. Day-to-day oversight of the contractor who will perform the study and will draft the interim report

will be the responsibility of the National Institute of Justice in the Office of Justice

Programs.

Question. At what stage of development is the regulation?

Answer. The proposed regulation was published in the Federal Register on April

27, 2000. A public hearing was held on May 9, 2000, and the public comment period

will extend until June 8, 2000.
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SUBCOMMITTEE RECESS

Senator GREGG. We will be hearing from the Secretary of State,

Madeleine Albright, on Thursday at 9:30. Thank you very much.

[Whereupon, at 11:41 a.m., Tuesday, February 29, the subcommittee was recessed, to reconvene at 9:30 a.m., Thursday, March

2.]

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DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED

AGENCIES APPROPRIATIONS FOR FISCAL

YEAR 2001

THURSDAY, MARCH 2, 2000

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC.

The subcommittee met at 9:30 a.m., in room SD–192, Dirksen

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

Present: Senators Gregg, Stevens, Domenici, Hollings, Lautenberg, and Mikulski.

DEPARTMENT OF STATE

SECRETARY OF STATE

STATEMENT OF HON. MADELEINE K. ALBRIGHT, SECRETARY OF

STATE

Senator GREGG. We can begin the hearing. We certainly appreciate the fact that the Secretary has joined us today. We look forward to hearing her testimony on the State Department appropriations.

I will skip my opening statement.

Senator HOLLINGS. I will skip mine.

Senator GREGG. So we will go right to the Secretary.

Secretary ALBRIGHT. Good morning, Mr. Chairman, Senator Hollings.

Over the past 7 years I have testified before you many times and

it has always been a pleasure and I think we have managed to get

a lot of work done together. In prior years I have summarized my

written statement in order to allow plenty of time for questions but

this year, with your permission, I will summarize my summary.

BUDGET REQUEST

The President’s budget request for fiscal year 2001 is essentially

for current services, with significant increases only for security and

U.N. peacekeeping. For State program accounts, we are seeking a

little under $3.2 billion, primarily for Diplomatic and Consular Programs. This reflects our successful reorganization and our effort to

make effective use of limited personnel resources. It will also enable us to further upgrade our communications and further im-
118

prove the customer services provided by our Consular Affairs Bureau.

The President’s request for Embassy Security and Construction is a little more than $1 billion for the next year and $3.5 billion

in advanced appropriations through 2005. These requests are vital

and I urge you to support them.

One of the most depressing charts I have seen shows our foreign

building appropriations from 1983 until the present. There is a

spike at one end to reflect the aftermath of the embassy bombings

in Beirut and there are spikes at the other end reflecting the embassy bombings in Africa and our subsequent joint efforts to increase resources, and in between it is a virtual flat line.

Together, we must ensure that such a lull never happens again.

Fortunately, with the President’s leadership and with your help,

we have substantially accelerated the replacement and repair of

higher-risk embassies and consulates. We have hired new security

personnel, enhanced perimeter security, instituted an effective new

surveillance detection program at most of our posts, and taken

many other measures. This is good but not sufficient.

As the threats against U.S. interests change, we must ensure our

ability to meet them. And these challenges include not only terrorism but also organized crime, drug cartels, money-laundering,

cybercrime, and espionage.

SECURITY

In this environment, security must always be a priority and we

must respond in a comprehensive manner to threats, both old and

new. To this end, I will explore creating the position of Under Secretary of State for Security, Counterterrorism and Law Enforcement. In preparation, I am directing our Assistant Secretary for

Diplomatic Security, David Carpenter, to lead a review of the Department’s structure for addressing these issues and to make recommendations for a more effective organization. In so doing, he

will consult closely with Ambassador Michael Sheehan, our

counterterrorism coordinator, and other senior officials.

Our goals, in keeping with the recommendations of the Crowe

and Kaden panels, are to clarify lines of authority, improve coordination, and assure that a single high-ranking officer can speak for

the Department on security questions.

Senators, as you know, many of the international problems and

threats we face require the cooperation of others. One means we

use to secure such cooperation is through the United Nations and

other international organizations, and I ask your support again

this year for our CIO [Contributions to International Organizations] account, which pays our share of the costs of those organizations in which we participate.

U.N. PEACEKEEPING

And I ask your backing for our fiscal year 2001 and emergency

supplemental requests for U.N. peacekeeping. As the subcommittee

knows, U.N. peace operations provide America with a vital third

option between simply walking away from destabilizing conflicts

and intervening ourselves. And this year we especially need your

support for four relatively new operations.
119

In the Democratic Republic of the Congo, an observer mission

has been authorized to monitor and assist in implementing parts

of the Lusaka cease-fire agreement. In Sierra Leone, the United

Nations is helping to implement a peace agreement ending a brutal

civil war. In East Timor, the United Nations is leading an international effort to maintain order, enable refugees to return and

prepare the region for independence. And in Kosovo, the United

Nations is a partner with KFOR in laying the groundwork for democracy based on increased tolerance and respect for the rule of

law.

Mr. Chairman and members of the subcommittee, I want to emphasize how important it is that you support the President’s supplemental and fiscal year 2001 requests for these and other U.N.

peace operations. The choice is stark. We can walk away from conflicts and suffering in Africa, the Balkans, and East Timor or we

can do our part to address them. No one is asking America to bear

the lion’s share of the burden in any of these places.

With the subcommittee’s help, we have worked hard to make

U.N. peace operations more efficient and effective and Ambassador

Holbrooke and I are doing all we can to persuade our counterparts

to reduce our official assessment for peacekeeping missions. For

years we have briefed you monthly on every development related

to these operations and the United States has voted for each of

them. I will speak plainly. Failure to support this necessary funding request would reduce our international standing at a critical

time. It would diminish prospects for peace and democracy in areas

that have been ravaged by conflict and where people look to us for

help. It would do grave damage to the instrument of U.N. peacekeeping and thereby place even greater pressure on our own armed

forces. And it would undermine our diplomatic efforts to reduce

U.S. assessments.

So I urge you to support the President’s request and help us to

help the United Nations preserve and build peace. That is the right

vote for our own interests and for the values our citizens cherish.

Before concluding, I want the subcommittee to know that I enthusiastically support the bipartisan initiative now under way to

name the State Department building in honor of former Senator

and President Harry Truman. This is appropriate because the Truman name is synonymous with strong leadership and strong leadership is what American foreign policy is all about.

PREPARED STATEMENTS

Mr. Chairman, in the weeks ahead I am sure that we will have

differences over details, but I very much hope for your support and

that of every member of the subcommittee for the fundamental objectives of our budget request. Thank you. Ready for questions.

[The statements follow:]

PREPARED STATEMENT OF MADELEINE K. ALBRIGHT

Good morning, Mr. Chairman and members of the Subcommittee. I am pleased

to be here to testify on behalf of President Clinton’s fiscal year 2001 budget request

for the Department of State and related programs.

Let me begin by thanking this Subcommittee for the strong bipartisan support we

have received from you in years past for our operational and security requirements.

Because of the terrorist threat, ongoing international political ferment, and the de-
120

mands of new technology, meeting these needs is an ever-changing and growing

challenge.

I recognize that it may be harder back home to justify the costs of a new office

building in Tunis or a peacekeeping mission in Kosovo, than a new courthouse or

weather facility here in the United States. But this Subcommittee understands that

diplomacy is often our nation’s first line of defense, and that the personnel in our

diplomatic posts serve our citizens broadly and well.

Our Foreign Service, Civil Service, and Foreign Service National personnel contribute every day to America—through the dangers they help contain; the crimes

they help prevent; the deals they help close; the rights they help protect; and the

travelers they just plain help. They have earned our praise. They deserve our support.

Moreover, our overseas missions host representatives from more than 30 U.S.

Government agencies, including from the Departments of Justice and Commerce.

These facilities are home to America’s team, and should be well-designed, modern

and secure.

This year’s budget request looks to the future based on lessons from the past. It

is primarily a current services budget, but includes significant increases in security

and United Nations peacekeeping which I will discuss in detail. And it reflects recommendations contained in two recent reports. The first (the Crowe Report) was

issued last winter by the Accountability Review Boards established after the 1998

Embassy bombings in Nairobi and Dar es Salaam, and chaired by Admiral William

Crowe. The second (the OPAP Report) was released in November by the Overseas

Presence Advisory Panel, chaired by Mr. Lewis Kaden.

Three years ago, when I first testified as Secretary of State, I said that any framework for American leadership must include measures to control the threats posed

by nuclear weapons and terror; to seize opportunities for settling regional conflicts;

to maintain America as the hub of an expanding global economy; and to defend

cherished principles of liberty and law.

I said further that our key alliances and relationships were at the center of that

framework. For these are the bonds that hold together the entire international system. When we are able to act cooperatively with other leading nations, we create

a convergence of power and purpose that can solve problems and spur progress

around the globe.

This framework will continue to guide our foreign policy in the year 2000. Our

priorities include an even stronger NATO, with ever more robust partnerships, still

open to new members, developing new capabilities and preparing for new missions.

We will promote a healthy, open, and growing world economy whose benefits are

shared more widely both among and within nations, and where American genius

and productivity receive their due.

We will work in consultation with Congress, our allies, and others to respond effectively to the perils of proliferation and the promise of arms control.

We will focus attention on our complex relationships with Russia and China, adhering to core principles, while seeking to advance common interests.

We will strive with our partners to build peace in Kosovo and integrate all of

Southeast Europe—including Serbia, when the time is right—into the continent’s

democratic mainstream.

We will act resolutely to support peace in key regions such as the Middle East,

Central Africa, Northern Ireland and the Aegean.

We will continue our efforts to enhance stability on the Korean Peninsula and to

ease tensions in South Asia.

We will strive for even greater cooperation along our borders with Canada and

Mexico.

And we will work to strengthen democratic institutions worldwide, including in

the four key countries of Colombia, Indonesia, Nigeria and Ukraine.

These and other tasks may seem disparate, but each relates to our vision of a secure and prosperous America within an increasingly stable and democratic world.

And each is supported by accounts that fall within the jurisdiction of this Subcommittee.

Accordingly, I ask that you support the President’s budget request in its entirety.

We need every penny. And I make this request knowing that most of the funds I

am asking for will be spent next year or beyond, under a new Administration. So

my urging has nothing to do with parties or personalities; but it has everything to

do with the success of American foreign policy, and the safety and productivity of

those who serve America in our diplomatic posts at home and abroad.
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STATE PROGRAMS

Diplomatic and Consular programs

Overall, the President’s fiscal year 2001 budget request for direct appropriations

for the State Programs accounts is $3.198 billion, primarily for Diplomatic and Consular Programs.

These appropriations, together with various service-related fees, support America’s diplomatic presence at more than 250 embassies and other posts in more than

160 countries. These posts provide the eyes, ears and voice for American foreign policy in furthering a panoply of U.S. interests. And they serve as our nation’s early

warning system against potential crises and threats.

Our fiscal year 2001 budget request reflects the successful integration of USIA

and ACDA into the Department of State. I am extremely grateful for the leadership

shown and the example set by Under Secretary for Management Bonnie Cohen,

Senior Adviser for Arms Control and International Security Affairs John Holum,

and Under Secretary for Public Diplomacy and Public Affairs Evelyn Lieberman

throughout the restructuring process. The result is a U.S. foreign policy that is more

effective, comprehensive and coordinated.

At the same time, I must be frank and say that reorganization does not—at least

in the short term—save money. On the contrary, it involves significant administrative costs related to equipment, training and the movement of offices and people.

Its fundamental purpose is to improve the overall quality of service we provide to

the American people.

We already see benefits from bringing U.S. foreign policy professionals under one

roof; integrating arms control, nonproliferation and public diplomacy experts into

State bureaus; and eliminating duplication of effort. In the long run, I am sure we

will reduce expenditures from what they would have been without reorganization.

Our fiscal year 2001 request for Diplomatic and Consular Programs would enable

us to continue operations at current levels, with small increases for enhanced training and improved compliance monitoring of labor and environmental standards. The

request for Worldwide Security upgrades in this account is $410 million. Of this,

$328 million reflects recurring costs associated with the security improvements initiated after the Africa embassy bombings. The remainder includes $66 million for perimeter security initiatives and $16 million to hire an additional 162 security professionals.

On personnel, Mr. Chairman, we are holding our own. During the past two years,

we have been able to hire enough people to replace those who left, but not to recover

fully from prior reductions. We appreciate the new positions related to security that

were funded, but still find our personnel resources stretched very thin. And we face

the challenge of recruiting and retaining outstanding talent in an extremely competitive job market. This is a serious problem, which is related to our overall need

to provide adequate levels of compensation, benefits and working conditions for our

people.

Training is another area where we are trying to make up for lost time. I was dismayed to learn last year that a substantial number of our personnel taking assignments abroad were doing so without the requisite training. Moreover, crisis management training had been reduced to zero in order to save money. Under Secretary

Cohen and her team are working hard to reverse these trends. In April, a new

school of Management and Executive Leadership will open. Training is back up. And

crisis management has resumed.

Mr. Chairman, as you are aware, our Consular Affairs Bureau performs critical

services for our mutual constituency, the American people. And with your help, we

are continuing to improve those services.

In the coming year, we will strive to further upgrade our equipment replacement

programs, strengthen document integrity, expand public outreach, streamline immigrant visa processing, increase interagency data sharing as we move towards a more

seamless border security program, and do even more to ensure the prompt and secure delivery of more than seven million U.S. passports.

As I have pointed out before, the retention of user fees is absolutely critical to

the success of our efforts. So I thank you again for legislation allowing the Department to retain Machine Readable Visa fees through fiscal year 2001 and to charge

and retain an affidavit of support fee.

I would also like to take this opportunity to urge the Congress to extend and even

make permanent the nonimmigrant visa waiver program. This program has provided all the benefits I believe Congress intended, including increased travel, tourism and business. Last year, seventeen million foreign nationals from visa waiver

countries contributed an estimated $91 billion to the U.S. economy.
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Capital Investment Fund

Our request for the Capital Investment Fund for fiscal year 2001 is $97 million.

This amount, when combined with an estimated $63 million in Expedited Passport

fees, will support our efforts to continue upgrading our information technology and

communication systems. I note here, Mr. Chairman, that since 1997, the percentage

of State Department employees with Internet Access has risen sharply, which

means that the world’s premier foreign policy institution is finally getting on the

right side of the ‘‘digital divide.’’ We have also retired the last of our outmoded

Wang classified systems and generally improved our information technology infrastructure.

Our budget includes $17 million from the Capital Investment Fund to develop and

deploy inter-agency information platforms at about 45 overseas posts. This reflects

a recommendation from OPAP and will create a single unclassified global communications system to serve all U.S. agencies with an overseas presence. The Department will set the standards for this platform in cooperation with other agencies, but

each agency will be responsible for funding its own costs associated with the platform’s use.

Mr. Chairman, I would like to elaborate a bit on the OPAP report and our response to it.

As you know, last year, I appointed a panel, chaired by Lewis Kaden, to review

our overseas operations and build on the excellent work of Admiral Crowe and the

Accountability Review Boards. The OPAP included distinguished representatives

from the government and private sector. Its mission was to recommend criteria for

the location, size and composition of overseas posts, taking into account factors such

as our foreign policy goals, and our security and resource needs.

I am indebted to Chairman Kaden and the members of his Panel for their hard

work and for their recommendations, of which I know the Subcommittee is aware.

I particularly welcomed the Panel’s stress on the urgency of improving our capital

plant; the importance of investing in human resources; and the indispensable nature

of universal representation, which is our on-the-ground diplomatic presence around

the world.

I also agreed strongly with the Panel’s focus on the need to assure stronger interagency teamwork under our Chiefs of Mission abroad and the President and Department of State here at home.

At the President’s request, I am directing an interagency effort to respond to the

Panel’s recommendations by assessing whether we have the right mix of staff at our

overseas missions. We are beginning with a series of pilot reviews in selected posts

to help us develop criteria for a comprehensive review. I have been in touch with

my Cabinet colleagues on this matter, Mr. Chairman, and have urged them to engage actively. This project is a major part of our effort to manage effectively, further

improve security, and produce a better team effort in meeting the needs of our citizens in the 21st Century.

Before moving on, Mr. Chairman, I want to recall my testimony before you last

year in which I said that the Department of State was working hard to prepare for

Y2K. That turned out to be an understatement. We made a herculean effort. Although unique in one sense, Y2K was a dramatic example of the kind of technologically-related challenge we may face repeatedly in the years ahead. And I think

it is fair to say that the Department passed with flying colors.

We had the job of coordinating the activities of all U.S. agencies overseas. We established a ‘‘weather vane’’ system to detect and try to prevent problems in other

countries. We ran a successful worldwide test using the Internet prior to the event.

And we were on full alert to respond to crises as the new Millennium dawned.

Although some may now question whether all the preparations were needed, I

would much rather respond to those questions than the ones I would be facing if

we had failed to act and the worst predictions had come true. I believe we acted

wisely and well, and I appreciate the resolute backing we received from this Subcommittee.

Finally, Mr. Chairman, I want you to know that I enthusiastically support the bipartisan initiative now underway to name the main State Department building in

honor of former President Harry Truman. I hope you will agree this honor is richlydeserved. President Truman blazed a trail that Administrations of both parties have

since followed in exercising strong international leadership in defense of freedom,

on behalf of prosperity, and in service to values of democracy and human rights that

Americans cherish. His name is synonymous with strong leadership. And strong

leadership is what American foreign policy is all about.
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Embassy Security, Construction and Maintenance (ESCM)

Our fiscal year 2001 request is $1.079 billion. This reflects our ongoing need to

correct deficiencies and improve security in our overseas infrastructure.

Mr. Chairman, I know you agree that we have a responsibility to do all we can

to enable personnel in U.S. diplomatic missions to do their jobs both professionally

and safely. This cannot occur on the cheap.

One of the most depressing charts I have ever seen shows our foreign building

appropriations from 1983 until the present. There is a spike at one end to reflect

the embassy bombings in Beirut and the Inman Panel recommendations that followed. There are spikes at the other end reflecting the embassy bombings in Africa

and the Crowe report and our joint efforts to increase resources. In between is a

virtual flat line.

Together, we must ensure that such a lull in necessary and prudent construction

never happens again. Security is an around-the-clock, around-the-calendar proposition. It requires more than a short-term sense of urgency, but rather long-term

habits of vigilance and preparation. We need a steady stream of resources and a

good, comprehensive plan for investing them in the protection of our people.

Since becoming Secretary of State, I have been constantly concerned with the

need to protect the security of both the people who work at our diplomatic missions,

and the classified information we handle in America and abroad.

These have been among our highest priorities, and I believe we have made good

progress. The 1998 bombings gave added urgency to our efforts. And the appointment of David Carpenter, a career law enforcement professional, as Assistant Secretary of State for Diplomatic Security, has helped us to intensify our security programs on every front.

For example, with the help of this Subcommittee, we have substantially accelerated the replacement and repair of higher-risk embassies and consulates.

We have hired new security personnel, whose ranks had been allowed to decline

in earlier years for budgetary reasons.

We have developed a global risk management plan, enhanced perimeter security,

hired more local guards, adopted a rigorous escort policy, strengthened computer

safeguards, provided thousands of security briefings, and instituted an effective new

surveillance detection program at most of our posts. In addition, I recently asked

Assistant Secretary Carpenter to perform a top-to-bottom review of the Department’s security practices.

Overall, we have made a strong start on implementing the recommendations of

the Crowe and OPAP Reports, which focus on protecting those who work in our diplomatic posts.

All this is good, but not sufficient. As the threats against U.S. interests change,

we must ensure that the Department of State has the best practices and structures

to meet them.

These challenges include, but are broader, than the risk of a terrorist bomb. They

include the full range of perils posed by international lawlessness, including organized crime, drug cartels, state and non-state sponsored terrorism, money laundering, cyber-crime, and espionage. Often such threats are linked, as international

criminal gangs seek to exploit weaknesses by profiting from a combination of illicit

activities.

These challenges pose a substantial and increasing foreign policy threat. They are

part of our bilateral diplomatic agenda with virtually every country. They are a

major focus of our efforts in regional and global institutions. They affect the kind

of work we do, the kind of equipment we must procure, the kind of procedures we

must follow, and the kind of facilities we must build. They are a day-to-day preoccupation of mine. And they all fall under the general heading of security against

unconventional threats.

In this environment, it is not only prudent but essential to make security considerations a part of everything we do, and to deal with old and new threats in a more

comprehensive way.

Accordingly, I will explore creating the position of Under Secretary of State for

Security, Counterterrorism and Law Enforcement. In preparation, I am directing

Assistant Secretary Carpenter to lead a review of the Department’s structure for addressing these issues and to make recommendations for a more effective organization. In so doing, he will consult closely with Mike Sheehan, our Counterterrorism

Coordinator, and other senior officials.

Our goal is to find the most effective way to meet the recommendations of the

Crowe and Kaden panels that the Department clarify responsibilities, encourage

better coordination and assure that a single high-ranking officer is accountable and

can speak for the Department on security questions.
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In addition, the President is requesting $647.6 million to support the third year

of our multi-year effort to construct secure diplomatic facilities. This request includes $500 million to continue our program of relocating posts, where necessary.

These funds provide for the design or construction of facilities in Capetown, Damascus, Rio de Janeiro, Sofia and Yerevan. It will also support construction of new oncompound facilities for USAID in Kampala and Nairobi. Further, the request includes $134 million to upgrade perimeter security at other highly vulnerable posts.

I will be frank, Mr. Chairman, and say that the cost of some of our larger projects

can produce a bit of ‘‘sticker shock.’’ However, I am assured that the costs are justified given security demands related both to the kind and locations of buildings we

need; the required use of American contractors; and our desire to build facilities

that can support full inter-agency teams. This Subcommittee has been very supportive of building requests in the past. And we would, of course, be happy to brief

you in detail on the specifics of the projects included in our budget for next year.

The President is also requesting $3.35 billion in advanced appropriations for the

years 2002–2005 to ensure a sustained multi-year construction program for secure

new embassies and consulates. I ask your support for these essential requests.

Members of the Subcommittee, given our concerns about security, it would be easy

to overlook the non-security related infrastructure needs that are addressed in the

fiscal year 2001 request. For example, we still require resources for ongoing maintenance of our facilities and decent housing for our colleagues overseas.

Some of these needs can be met by the sale of existing property. But most cannot.

This year’s request reflects sound planning to match our most immediate needs with

available resources.

Educational and Cultural Exchange Programs

Mr. Chairman, public diplomacy advances U.S. interests by helping others to understand our society, culture and values.

It can also be a very practical tool for influencing events. During the conflict in

Kosovo, for example, our Internet Assistance Initiative helped us to manage data

generated by the massive humanitarian effort, while also aiding refugees in locating

loved ones who had become separated. More recently, we used public diplomacy to

warn against a breakdown of the constitutional order in Ecuador.

Since USIA merged with the Department last October, we have benefitted greatly

from the unique skills and perspective its employees have brought to our foreign

policy.

In fiscal year 2001, the President is requesting $225 million for a key component

of our public diplomacy, which is our international exchange activities, including the

world-renowned J. William Fulbright Educational Exchange Program.

This request also includes funding for the State Department’s International Visitors Program, which has been remarkably successful at identifying world leaders

early in their careers.

For example, Korean President Kim Dae-jung visited in 1965 as an opposition

parliamentarian, and has often commented on the strong, positive impression he

formed of our country during that time. And in 1986, a young British Parliamentarian named Anthony Blair viewed a job training program in West Virginia, visited

a family farm in Kansas and studied state politics in Colorado and California.

Other past participants in the program include Chancellor Schroeder of Germany,

Prime Minister Jospin of France, President Kuchma of Ukraine, President Demirel

of Turkey, President Narayanan of India, President Abdurrahman Wahid of Indonesia, President de la Rua of Argentina, Prime Minister Mocumbi of Mozambique,

and both President Sampaio and Prime Minister Guterras of Portugal. All told,

more than three dozen current heads of state or government are former participants

in the International Visitors Program.

LEADING THROUGH INTERNATIONAL ORGANIZATIONS

Contributions to International Organizations (CIO)

Mr. Chairman, one of the realities of the modern era is that many of the international problems and threats we face as a nation simply cannot be dealt with effectively through our actions and policies alone. Quite often, we will need the help and

cooperation of others.

This reality was recognized more than half a century ago when our predecessors

led in creating the United Nations and a variety of other international organizations

in which our country now participates. Not all of these organizations have been as

well-managed or effective as we would like. In a few cases, we have even withdrawn

from active membership. But in most cases, our participation has served our national interests and those of our citizens.
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The CIO account provides the funds we need to meet our assessments to these

international organizations, consistent with U.S. statutory restrictions. The President’s request for the coming fiscal year is $946 million.

In 2001, for the first time in years, we are not requesting U.N. arrearage payments for either the CIO or peacekeeping accounts. This reflects the prior appropriation of funds sufficient to fulfill the terms of legislation authorizing arrearage

payments tied to certain additional U.N. reforms and changes.

With the Department’s strong support, Ambassador Holbrooke and Assistant Secretary Welch are working to gain support within the U.N. and among its members

for the reforms required. It is encouraging that one of the conditions for releasing

funds was met during the recent General Assembly session, when the U.S. candidate for the U.N.’s budget oversight panel was elected.

As I have said in previous years, I appreciate the Subcommittee’s support for an

effective and well-managed United Nations, in which the United States is both leading the way and meeting its obligations. We have not yet fully put that combination

together, but we continue to move in the right direction.

The CIO account funds U.S. participation in forty-seven international organizations, including the U.N. These organizations contribute in a multitude of ways to

our safety and quality of life.

For example, in the U.N. itself, we have a security stake in the multilateral sanctions that help to contain and restrict Iraq’s military options. We have a political

interest in U.N. efforts to encourage the peaceful resolution of disputes in strategic

areas such as the Aegean. We have a legal and moral interest in seeing that those

who committed crimes against humanity in Rwanda and the Balkans are brought

before the U.N. war crimes tribunal. We have a humanitarian interest in U.N. programs that save children, fight disease, promote human rights and care for refugees.

The U.N.’s many sister organizations perform vital functions, as well. The International Atomic Energy Agency (IAEA) helps protect Americans from the dangers

of nuclear proliferation.

The World Health Organization (WHO) helps study, contain and prevent disease

and health problems, keeping our own and other societies more secure. For example,

WHO works with USAID to slow the spread of HIV/AIDS, which is causing incalculable human suffering and creating new obstacles to development in many countries,

especially in Africa and South Asia.

The Food and Agriculture Organization makes trade in agricultural products safer

and more predictable, while its disease control programs protect American agriculture from massive potential losses.

The International Labor Organization promotes respect for human rights and core

labor standards all over the world. It is a crucial partner in America’s effort to ensure that global trade is fair as well as free.

In addition, this account funds our assessments to numerous other institutions,

such as the North Atlantic Treaty Organization and the Organization of American

States, which contribute to America’s leadership and interests in key regions of the

world.

International Peacekeeping Activities (CIPA)

I also ask your support for the President’s request for $738.7 million for the CIPA

Account. This is a substantial, but not unanticipated, increase over the current year.

I can think of no other area of foreign policy in which our consultations are as regular and detailed.

We have also learned by experience, Mr. Chairman that, by its very nature, fluctuations in this account will occur as peace operations begin, expand, build down

and complete their work. This lack of predictability can be frustrating to budget

planners, but there is simply no way to freeze demand for international peacekeeping, no responsible way to set an artificial ceiling on our financial contributions,

and no appropriate alternative to judging our interest in such operations on a case

by case basis.

The funding level we are requesting for fiscal year 2001, coupled with our supplemental and reprogramming requests for 2000, reflect a level of U.N. peacekeeping

activity higher than that of the most recent years, but far below the numbers we

saw earlier in the last decade. The current level of just over 14,000 U.N. peacekeepers (excluding civilian police) compares to more than 78,000 in 1993. Next

year’s requested appropriation for CIPA compares to more than $1 billion in each

of fiscal years 1994 and 1995.

The record of U.N. peacekeeping is mixed. Successes in countries such as Namibia, El Salvador and Mozambique must be weighed against failures in Somalia

and Rwanda. But both the United Nations and the United States have learned a

lot during the past decade about how to plan, organize and manage such operations.
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At our insistence, the Security Council now exercises far greater care in authorizing

missions, defining mandates, selecting commanders and recruiting troops.

Of course, the United States does not look to U.N. peacekeeping to defend its vital

interests, nor can we expect the U.N. to be effective where the decisive application

of military force is required. But the rationale for supporting well-conceived and designed U.N. peace missions is compelling.

Under the right circumstances, U.N. peacekeeping can separate adversaries,

maintain ceasefires, enable refugees to return home, and create conditions under

which political reconciliation may occur.

This provides America with a vital third option between simply walking away

from destructive and destabilizing conflicts, and intervening ourselves. U.N. peacekeeping enables us to influence events without assuming the full burden of costs

and risks. It lends the weight of law and world opinion to causes and principles we

support. And the more able the U.N. is to end or contain conflict, the less likely

it is that we will have to deploy our armed forces. Currently, only one out of every

forty U.N. military observers is an American, and none of the U.N. troops.

Our CIPA request includes funds to pay our assessments for 14 U.N. peace operations. The majority of these are not new and are either level or declining in size.

I would like to focus my testimony on four recently-initiated operations.

The first is in the Democratic Republic of the Congo (DRC). Last week, the Security Council voted to approve a mission consisting of 500 military observers and a

protection and support force of about 5,000 troops. These observers will monitor implementation of the Lusaka Ceasefire Agreement, assist with the disengagement of

troops at certain locations, and help the newly-created Joint Military Commission

develop mechanisms for further implementing the Agreement.

The Security Council continues to insist, with our support, that the deployment

of this force depends on the willingness of the parties to cooperate with it, respect

its security and grant it access. It is encouraging that the leaders of all the nations

involved in the conflict have welcomed the Security Council decision, and pledged

their cooperation.

I have described the conflict in the DRC as Africa’s first world war. It now involves six countries and Congolese and Rwandan armed rebel groups. To date, compliance with the Lusaka Agreement has been inconsistent. And success of the U.N.

peace operation is uncertain. But the purpose of the mission is the right one, which

is to create a reliable monitoring mechanism so the parties can begin to overcome

their mistrust of one another. Deployment of additional observers would also remove

any excuse for the regime in Kinshasa not to cooperate with a National Dialogue

aimed at resolving the DRC’s internal conflicts.

The DRC is a large country, with vast natural resources, and a strategic location

within the heart of Africa. Without U.N. help, it faces the prospect of a prolonged

and many-sided war that could spur a humanitarian disaster and possibly renewed

campaigns of genocide.

No one is asking America to solve the conflict or intervene to end it. The expanded U.N. mission will not even include U.S. troops. But we are being asked to

do our part in supporting the framework for peace embodied in the Lusaka agreement. The cost is significant. But it is far less costly—in blood, treasure and to our

interests—than allowing this war to drag on and on.

The second operation I would like to discuss is in Sierra Leone. Here, the U.N.

is assisting in the implementation of last July’s Lome’ Agreement to end a brutal

civil war. Stability in Sierra Leone would contribute greatly to West Africa’s social

and economic prospects. But stability will not be possible without security, which

continues to be threatened by rebels who have not yet fully demobilized or disarmed.

Recent problems encountered by U.N. peacekeepers in Sierra Leone should not obscure the progress that has been made. The overall ceasefire between the Revolutionary United Front and the government has held. More than 11,000 combatants—

a quarter of the estimated total—have begun the disarmament process. Humanitarian groups are providing assistance in some areas, and we are pressing the rebels

to allow these groups greater access to the interior. In Sierra Leone, as in the DRC,

the U.N. recognizes it cannot impose peace. The parties must meet their obligations.

Last October, I went to Sierra Leone where I met at the Murray Town Amputee

Camp with some of the victims of the war. I was surrounded by women, men and

mostly children, who had lost hands, arms, feet or legs to machetes. These are not

scars that heal. And the people in the camp are the lucky ones, for they have survived and are receiving at least rudimentary care. Mr. Chairman and members of

the Committee, I know if you had been there you would not even have to ask whether America has an interest in preventing more vicious fighting in Sierra Leone.
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A third U.N. mission I ask you to support is in East Timor. This is a region where

peacekeeping lessons from the past have been applied and responsibilities appropriately shared. Last August, a multinational force led by Australia and Thailand

restored order after pro-integrationist forces reacted with violence to the passage of

a referendum for independence. The U.N. Transition Administration was then assigned responsibility for overseeing recovery and working with the East Timorese

to prepare for their new status.

The United States has a strong political and diplomatic interest in seeing East

Timor evolve into a viable and democratic nation. We also have a humanitarian interest in seeing that refugees are able to return safely, the missing are accounted

for, and security is maintained.

Last but not least, I urge your continued support for the U.N. mission in Kosovo,

a mission performing an extraordinarily difficult but essential task. Here again, lessons from the past are being applied. The military heavy lifting is being handled

not by the U.N., but rather by the NATO-led KFOR troops. The job of the U.N. mission is to oversee civilian administration until the people of Kosovo are able to assume that responsibility themselves.

From the outset of the conflict in Kosovo last March, our goal has been to enable

the people of this region to live peacefully, democratically, and without ethnic strife.

A beginning has been made, but the legacy of authoritarianism and repression cannot be erased overnight.

Further progress in Kosovo is an essential part of our overall strategy, in partnership with our allies, to encourage the integration of Southeast Europe into the continent’s democratic mainstream. Nothing would do more than success in this effort

to enhance the future stability of Europe, and to reduce the likelihood that American forces may one day again be required to face combat in this region.

In summary, Mr. Chairman, I ask your support for our full fiscal year 2001 request for CIPA. I know it is tempting to try to attach more and more conditions

to this account. But I must tell you that withholdings, delays, and refusals to pay

for particular operations have a significant cumulative impact on our ability in New

York to influence the shape and scope of these operations. Moreover, it is certainly

not helpful to Ambassador Holbrooke in his efforts to persuade other countries to

reduce our share of U.N. peacekeeping assessments to 25 percent if we are not even

paying the 25 percent we acknowledge as our share.

I believe this Subcommittee deserves a great deal of credit for the improvements

in the way U.N. peacekeeping decisions are made, and operations planned. So I

hope you can now support the important and improved U.N. peacekeeping program

you helped to shape.

FISCAL YEAR 2000 SUPPLEMENTAL REQUESTS

In addition to our fiscal year 2001 request, the President is seeking $624.5 million

in supplemental appropriations this year to promote peace and stability primarily

in Kosovo and Southeast Europe. Of this, $373.6 million is from this Subcommittee’s

accounts.

The request includes $239 million from the ESCM account to fund secure facility

and other construction in Pristina, Sarajevo and Tirana, and to meet other securityrelated construction needs.

It includes $24 million for enhanced diplomatic, public diplomacy and security activity related to Kosovo and the surrounding region.

It includes $107 million to pay additional assessments for U.N. peacekeeping operations, particularly in Kosovo and East Timor.

And it includes $3.6 million to establish a Fulbright program in Kosovo and to

expand exchanges in regional and frontline states.

The substantive justification for most of these funds has been discussed above

with reference to the fiscal year 2001 budget, and I will not repeat it here. I will

stress, however, how important it is that these supplemental funds be approved.

We have made it clear to our allies and partners in Europe that they must bear

the lion’s share of assistance to Kosovo and efforts to integrate Southeast Europe.

They have agreed and have pledged far more than the United States has towards

these goals. But stability in the Balkans is one of the key objectives of U.S. foreign

policy at this point in history. We believe it is critical to realizing our vision of a

democratic and stable Europe, where wars simply do not happen.

Our presence in the region, in facilities that are adequate, accessible and secure,

is indispensable if our goals are to be achieved. At the same time, we must meet

our obligations to the U.N. peace missions both in Kosovo and East Timor.

I hope we will have your support for these necessary supplemental funding requests.
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CONCLUSION

Mr. Chairman, the annual budget debate in Washington typically revolves around

issues that relate to the appropriate role of the federal—as opposed to state and

local—governments in such areas as education and health care. But since the days

of Thomas Jefferson, the conduct of diplomacy and the protection of our national security have been among the Federal Government’s most basic tasks.

These are Constitutional responsibilities that simply cannot be delegated or

privatized. It is our job, here in our nation’s capital, to formulate plans for protecting American interests, and to come up with the resources to make those plans

work.

There is no question that it costs money to counter modern terrorists; calm regional disputes; promote America’s economic interests; protect U.S. citizens; and

spread the gospel of freedom. But these costs do not begin to compare to the ones

we would incur if we stood aside while conflicts raged, terrorists struck, financial

turbulence reigned, democracies unraveled and weapons of mass destruction spread

unhindered around the globe.

In the weeks and months ahead, I am sure that we will have differences over details. But I very much hope that we will have the support of every member of the

Subcommittee for the fundamental objectives of this budget request.

I know that you will act with America’s best interests in mind. I feel confident

that when you do, you will bear in mind both the many challenges in our future

and the best bipartisan traditions of our past. And I look forward to working with

you to carry the best of those traditions into the century ahead.

Thank you.

PREPARED STATEMENT OF JACQUELYN L. WILLIAMS-BRIDGERS, INSPECTOR GENERAL,

OFFICE OF THE INSPECTOR GENERAL

Mr. Chairman and Members of the Subcommittee: Thank you for providing me

with this opportunity to submit a statement for the record on the fiscal year 2001

budget request of $29,502,000, for the Office of Inspector General (OIG). This request funds the activities of the OIG to include audits, investigations, and inspections of worldwide operations and programs of the Department of State (Department) and international broadcasting under the Broadcasting Board of Governors

(BBG). I am pleased to discuss the work of my office in the context of OIG’s strategic plan.

I have also included with this statement a consolidated list of our reports and

memoranda for work in fiscal year 1999. These products are listed under each of

our four strategic goals and located in an appendix to this document.

OIG BUDGET

The Office of the Inspector General’s fiscal year 2001 budget request is

$29,502,000, an increase of 7.7 percent over our fiscal year 2000 enacted level of

$27,382,000. This is a modest request that seeks funding for inflationary increases

and for 10 security positions authorized and funded in the fiscal year 1999 Emergency Supplemental Appropriation, but for which funding was not included in our

fiscal year 2000 appropriation. Our fiscal year 2001 request is only 3.5 percent

above our fiscal year 1999 enacted level, which included the funding for these 10

security positions.

The major challenge facing OIG is the erosion of our funding base and the elimination of our fiscal year 1999 Emergency Supplemental Appropriation funding. The

lack of adequate budgetary resources jeopardizes our ability to oversee and monitor

the Department’s use of over $2 billion in security funds appropriated over the past

two years.

My office has been virtually straightlined since fiscal year 1996. With the exception of the fiscal year 1999 Emergency Supplemental Appropriation funding, OIG

has not received an increase to its annual appropriation since that time. Over the

last 5 years we have absorbed the cost of all inflationary increases, as well as the

cost of mandatory requirements such as Law Enforcement Assistance Pay and Chief

Financial Officer Act audits. This has resulted in a delay or suspension of planned

work.

The effective erosion of our budget base could have costly consequences. During

fiscal year 1999 OIG received $1 million in supplemental funding for oversight of

the Department’s nearly $1.5 billion security supplemental. The Department also received an additional $742 million in fiscal year 2000 for more construction and security enhancements. While some of the Department’s security supplemental funding
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will be spent over the next 5 to 8 years as new embassies are designed and built,

less than $170,000 of OIG’s supplemental funding remains and this will be fully expended by the end of fiscal year 2000. The Department is moving ahead with planning, and being encouraged by the Congress, to increase new embassy construction

from two to three new chanceries at any given time to more than 30. Such a significant investment of the Department’s resources should be monitored and overseen

by OIG. The loss of our security supplemental funds, however, will make it extremely difficult for us to oversee adequately the expenditure of the Department’s

security funds.

The $1 million we received in the fiscal year 1999 Emergency Supplemental Appropriation, although insignificant compared to the amounts appropriated for the

Department, allowed OIG to expand substantially its program of security oversight

inspections and audits. With these funds we were able to recruit and hire 10 senior

security specialists and establish a new Security Enhancements Oversight Division

to evaluate security in interim facilities and the construction of new embassies overseas. With other personnel funded by the security supplemental, we established an

inspection team to conduct limited-scope security inspections in conjunction with our

regular post management inspection. These inspections have identified numerous

security vulnerabilities that would not have been identified without the addition of

security specialists to the inspection teams.

In addition to security inspections, we refocused OIG assets to conduct five audits

involving the Department’s tracking and use of security supplemental funds. Audits

are in progress on two of the Department’s highest priority security enhancement

programs—the overseas wireless program and the surveillance detection program—

which consume approximately $220 million of the security supplemental. However,

fiscal year 2000 funding constraints have forced us to curtail and postpone some

needed work.

While the increased emphasis on physical security oversight commanded considerable OIG resources during fiscal year 1999, OIG also continued oversight work in

other threat areas. We conducted broad fieldwork on counterintelligence awareness

to identify continuing vulnerabilities with Foreign Service national (FSN) employee

access to unclassified information and telecommunications systems. OIG also completed a comprehensive review of the Department’s handling of classified information, an audit that raised alarms about the potential threats from unescorted foreign

visitors to the Department well before the discovery of a Russian monitoring device

in a seventh-floor conference room.

I strongly believe that the United States Government has received considerable

benefits resulting from the initiatives we began with the $1 million in security funds

appropriated to OIG in fiscal year 1999. We will continue those initiatives in fiscal

year 2000, but the lack of continued funding for at least the new positions funded

initially with emergency supplemental funds has forced hard choices and has impacted our ability to sustain the expanded security oversight established in fiscal

year 1999.

We have already made hard choices in fiscal year 2000. We have instituted a hiring freeze and have cut back significantly on training and travel for our staff. We

have reduced the size and number of our post management inspection teams, and

five posts have been eliminated from our upcoming inspection schedule. Travel for

our compliance staff has been curtailed, and our inspectors cut short their inspections during the fall inspection cycle.

We have reduced our security audit staff, which increases the amount of time required to complete and limits the scope of our security audits. We have reduced our

intelligence oversight staff, which limits the number of post inspections that we can

support and limits the scope and increases the amount of time needed to conduct

sensitive intelligence audits.

We have deferred or cut back on the scope of some audits with high potential cost

savings for the Department. For example, we have deferred reviews of the Department’s overseas financial management system, contracting for local guard services,

and the overseas purchase card program. We have scaled back our plans to review

the FSN payroll system. We will be forced to cut back on our oversight program for

Federal assistance to nongovernmental organizations (NGOs); an area with a long

history of large amounts of questioned costs. During fiscal year 1999, OIG issued

seven reports with questioned costs of approximately $9 million. We believe that,

with adequate funding we could save the government as much as $30 million. Unfortunately, we cannot devote the necessary resources to this area.

As the Department’s Inspector General, I recognize the need for prudent government spending. Five years of what is effectively a straightlined budget base, however, makes it difficult for OIG to effectively carry out our mandated requirements.
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I ask that you provide us the modest increases included in our fiscal year 2001

budget request.

IMPROVED CONDUCT OF FOREIGN RELATIONS

Taken as a whole, OIG activities provide a broad overview of the Department’s effectiveness in implementation of foreign policy and use of the full range of diplomatic and public diplomacy tools including international broadcasting. Through the

inspections of overseas missions and domestic bureaus and in-depth audits of selected issues, we assessed the conduct of foreign relations, particularly the skills and

capabilities of senior management and the availability and use of appropriate structures, authorities, and processes. Examples of OIG work in this area include inspections of Embassy London and Embassy Dublin and reviews of Radio Marti broadcast

content, the Border Biometrics program, and intelligence oversight.

In the coming year, OIG will inspect and audit the effectiveness of policy and program formulation and implementation; intelligence reporting and oversight; results

monitoring and assessment; and, mission leadership and management.

Post Management Inspections

OIG assesses the implementation of U.S. foreign policy and the diplomatic readiness of Department elements through management inspections of all overseas posts

and domestic bureaus and offices. Such inspections address all aspects of post operations including bilateral relations, executive direction and management, the conduct of public diplomacy, consular operations, diplomatic readiness, administrative

support, and management controls. Additionally, our embassies are in a unique position as a global platform to address emerging public diplomacy issues. The inspections of Embassy London and Embassy Dublin are two such examples.

Embassy London.—Embassy London represents a unique platform for projecting

U.S. views to European and other regional and global audiences. Much is already

being made of these possibilities, particularly in the economic and commercial sectors. More can be done, however, to address the emerging global agenda including

environmental, science and technology concerns. To be effective in this role, however, the Department must devote greater attention to the qualifications of those

assigned to key positions at the Embassy. Multifunctional and public diplomacy

skill, familiarity with global issues, and experience in multilateral diplomacy, including NATO and the European Union, must be given greater weight in the assignment process.

Embassy Dublin.—Support for the peace process in Northern Ireland remains the

predominant U.S. concern in Ireland. The U.S. presence in Ireland should both reflect the importance the United States attaches to the relationship and be tailored

to the tasks that need to be performed to promote the relationship the United States

seeks with the Republic beyond the peace process. Embassy Dublin is not now prepared—nor are preparations being made—to assume the much broader responsibilities associated with the future bilateral agenda. To this end, Embassy Dublin

should conduct a missionwide review of the resources needed to advance U.S. interests in Ireland in the post-peace process era. USIS Ireland does not, however, have

the resources to carry out its public diplomacy role effectively. Core public diplomacy

functions are not being performed; outreach tends to be ad hoc, is not guided by a

functioning distribution and records system, and is not coordinated missionwide.

Without additional resources, opportunities will continue to be lost.

Radio Marti Broadcast Content

Last year we reported on our examination of internal review practices and external oversight procedures to ensure that Radio Marti adheres to the Voice of America

(VOA) charter, the U.S. International Broadcasting Act of 1994, and journalistic

standards. As part of this review, the BBG, in consultation with OIG, contracted

for a panel of independent journalists to evaluate a sample of 1998 Radio Marti

broadcasts, to assess whether they adhered to VOA broadcast standards. The independent panelists identified problems with balance, fairness, objectivity, and adequate sourcing that impacted the credibility of the programs they reviewed particularly the live broadcasts. The panelists also identified problems affecting the professionalism of the broadcasts including packaging (e.g., intermingling news and opinion), presenting news stories in a confusing manner, and using poor judgment in

the selection of stories. The independent panelists largely confined their comments

to journalistic values and did not address the question of whether Radio Marti

broadcasts are ‘‘consistent with the broad foreign policy objectives of the United

States.’’ OIG recommended that the BBG establish policies and procedures so that

future evaluations can assess whether the foreign policy requirements of U.S. international broadcasting are being met.
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This year, we can report that, in response to our recommendations, the BBG and

the International Broadcasting Bureau (IBB) required the Director of the Office of

Cuba Broadcasting, to set forth a specific plan of action to ensure that Radio Marti

broadcasts meet commonly accepted standards of journalism and the specific requirements set forth in the VOA charter. For example, IBB proposed to establish

a training program, fund focus groups to determine public response to programming,

and plans to conduct semi-annual program reviews of Radio Marti. In addition,

BBG’s fiscal year 2000 appropriation requires it to submit to Congress a report on

how it will respond to OIG’s recommendations on Radio Marti by March 31, 2000.

OIG is currently reviewing BBG’s draft report and will continue to monitor compliance with our recommendations.

Border Biometrics Program

Border security continues to be a key national interest goal and strategic foreign

policy objective for the Department. As we reported last year, the border crossing

card (BCC) is designed to be used in lieu of a passport and visa by Mexican nationals who travel frequently across the Mexican border into the United States. Over

the years, the BCC became susceptible to counterfeiting and alteration. The Illegal

Immigration Reform and Immigrant Responsibility Act of 1996 required that a biometric identifier (such as a fingerprint or handprint) be incorporated into any border

crossing identification card. The Department of State and the Department of Justice, Immigration and Naturalization Service (INS), are working to implement the

Border Biometrics Program, also known as the Laser Visa Program, by September

2001.

Our inspection of the BCC program (ISP/I–99–12) revealed many problems that

jeopardize the timely implementation of the program and compromise its intent to

enhance border security. While the Department has complied with the majority of

the 13 recommendations resulting from that report, there are two that require assistance from Congress before they can be implemented. The first involves the need

for supplemental laser visa card production by the Department. Currently, all cards

are produced by INS facilities, which are not able to produce sufficient quantities

required by statute. It is my understanding that the Department is seeking approval to fund a pilot project to produce the cards in Mexico City.

The second unresolved recommendation from this inspection relates to the urgent

need to expand and upgrade the criminal record databases used to adjudicate laser

visas. We determined, in conjunction with our inspection of the BCC program, that

the INS Automated Fingerprint Identification System (IDENT) database being used

to process laser visa applications is of minimal value. We understand that the Department of Justice subsequently came to the same conclusion and now plans to

phase out the IDENT system by merging it into the much larger Federal Bureau

of Investigation (FBI) fingerprint database. Creating an electronic abstract, i.e., foreign nationals only, from this huge database for transfer to computer systems compatible with those being used by INS and the Department will be a massive undertaking. Current estimates, we understand, are that it will take 3 to 5 years and cost

the Department of Justice as much as $400 million. This new, expanded biometric

database would make it possible to begin implementing plans for issuing a new generation of biometric-based, smart card type nonimmigrant visas at all consulates

abroad.

Intelligence and Law Enforcement Oversight

Strengthening chief of mission authority over expanding embassy programs has

been a key objective under the OIG’s strategic goal. The importance of this OIG objective is also reflected in the number of recommendations to enhance ambassadorial

authority made by the Overseas Advisory Presence Panel in November 1999. OIG’s

Intelligence Oversight Division has concentrated its efforts on improving chief of

mission oversight and coordination of intelligence and law enforcement activities. In

Washington, the OIG has worked closely with both State Department’s Bureau of

Intelligence and Research (INR) and members of the intelligence community to ensure that new ambassadors as well as deputy chiefs of mission are well trained in

their oversight and coordination responsibilities. In response to OIG recommendations made in an earlier review of the bureau’s coordination functions, INR significantly improved its new ambassadors’ orientation program. In addition, INR, with

strong OIG endorsement, published a handbook for ambassadors detailing their full

responsibilities for intelligence and law enforcement oversight along with well-considered guidance on how to exercise these responsibilities.

Our oversight reviews conducted over the past year showed that chiefs of mission

are well versed in their responsibilities and that overall coordination of activities

was working well. OIG made recommendations on how to strengthen oversight and
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at two missions we recommended that the Department clarify responsibilities where

jurisdictions apparently overlapped. At two embassies, our recommendations established unambiguous chief of mission responsibilities for organizations that had questioned chief of mission oversight authority. OIG has also commended missions

where the chief of mission’s personal engagement has contributed to such coordination and we have promoted their activities as ‘‘best practices.’’ OIG has also continued its close working relationships with other Inspectors General working jointly on

such issues.

With the significant expansion abroad of Federal law enforcement activities, OIG

has broadened its review of chief of mission oversight of law enforcement and incorporated a detailed study of these responsibilities in each post management inspections. While chiefs of mission are generally discharging their responsibilities well,

some were less well prepared for law enforcement oversight than they were for intelligence oversight. OIG reviews have also revealed the need for law enforcement

officials assigned abroad to be better trained in their responsibilities to the chief of

mission as established in the November 1996 memorandum of understanding between the Secretary of State and the Attorney General and Secretary of Treasury.

We have been especially concerned with improving coordination of law enforcement

activities at missions where the law enforcement official is not a resident. Two recent oversight reports found uncoordinated law enforcement visits had complicated

bilateral relations and jeopardized other liaison contacts. The ongoing implementation of our recommendations has shown that law enforcement objectives can be met

without jeopardizing other national interests.

Details of our 19 fiscal year 1999 reviews in this area are summarized in OIG

classified semiannual reports.

BETTER ALIGNMENT OF FISCAL AND HUMAN RESOURCES WITH U.S. FOREIGN POLICY

PRIORITIES

OIG activities supporting this strategic goal focus on the Department’s budget and

human resource allocation processes, the mission and bureau performance plan

process, and verification and validation of Department performance measures. These

activities draw on reviews of performance plans conducted in the course of inspections of overseas missions and domestic bureaus of the Department. In addition,

OIG auditors include verification and validation of relevant performance measures

in the scope of selected audits.

In 1999, OIG work in this area has included assessments of issues resulting from

the consolidation of the Department of State, length of overseas tours of duty, training and career development, staffing for overseas security initiatives, and continued

oversight of the Departments’ implementation of the Results Act.

Department of State Consolidation

OIG has yet to observe any significant cost reductions or avoidances as a result

of consolidation. Such savings may lie in the future, as employee attrition permits

a more rational distribution of resources, and as economies of scale (such as may

result from consolidated information management systems) become realities.

OIG inspections conducted during the first quarter of fiscal year 2000 found that

it is too soon to reach definitive conclusions about the impact of the consolidation

of the United States Information Agency (USIA) with the Department of State. We

have observed no significant negative impact upon the public affairs activities at our

missions abroad. In most cases, public diplomacy already was well integrated with

other elements of foreign policy implementation.

From an administrative perspective, the planning for consolidation was a good investment, and resulted in a smoother transition than would have been possible otherwise. Nevertheless, many posts were not well informed on matters affecting

former public affairs officers (PAO). For example, there have been instances of confusion regarding whether former PAO’s should retain some of the support provided

previously as heads of agency, such as dedicated vehicles, etc. At some posts, there

have been morale problems among FSN employees who have been moved to different, sometimes lower graded, positions despite ‘‘save pay’’ provisions. In some

cases these employees believe they were not fully and accurately informed as to the

changes in their positions resulting from consolidation.

Also, we have observed exceptional instances where USIS employees with administrative skills, who could have been reassigned to general administrative duties, instead have remained in public affairs sections, but with fewer responsibilities. In

contrast, however, some embassies have made very creative use of former USIS employees, e.g. assigning them to consular section positions where their information

and communication skills will be used to good advantage.
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Tours of Duty

Several studies conducted by the Department and other groups have recommended increasing the amount of time employees spend in overseas assignments.

As you know, OIG also reviewed and reported on the Department’s tour-of-duty policies and practices in 1999. OIG recommended that the Department increase the

number of 3-year tours and establish 4-year tours. This would enable the officers

at a given post to maximize the experience gained in-country in their current position and reduce costs associated with shorter tours. The Appropriations Committees

agreed with the OIG report and directed that the Department implement all of the

report recommendations no later than January 1, 2000 and report on this issue no

later than January 15, 2000.

In its March 8, 1999 comments on our draft report, the Bureau of Personnel stated that ‘‘The OIG and a number of others have properly noted that longer tours of

duty are more productive and less costly for the Government.’’ The comments went

on to note, however, that longer tours would increase difficulties in staffing hardship posts. In its February 7, 2000 response to our final report, the Bureau of Personnel now states that there is little if anything to be gained, either financially or

in productivity, from longer tours. We are currently analyzing the Department’s responses and await its final report to Congress on this issue. In accordance with various studies done over the past decade, we continue to believe that longer tours represent a best practice among the foreign affairs agencies and that they would have

positive financial and productivity impacts for the Department. We look forward to

discussing this issue with you and with the Department in the coming months.

Diplomatic Readiness

Department of State leadership professes to believe in training for its officers and

staff, but continues to ignore this important function. Consequently, the institution

has not demonstrated a serious and sustained commitment to training and career

development. For example, only recently has the Department taken tentative steps

to put in place a strategic program that integrates work force planning with development requirements. Consequently, many, if not most Foreign Service employees

perceive no relationship between training and career advancement (other than foreign language training) and, hence, many seek to avoid training and other developmental experiences as detrimental to their careers. Tying training firmly to promotion, tenure, and assignment would improve the situation dramatically. Until

training is seen as a valued commodity, much of the State Department’s infrastructure for training, such as its National Foreign Affairs Training Center (NFATC), formerly known as the Foreign Service Institute, will remain a valuable but underutilized resource.

The NAFTC does an impressive job of providing training opportunities for those

employees of the Department of State and other agencies who wish to take advantage of them. It is handicapped, however, by the lack of commitment by the Department’s top management to training and by an employment culture that consequently does not value training. The inspection of NAFTC found that the training

center had developed measurable objectives for training and had done a good job

developing performance indicators to track progress. However, OIG recommended

that NAFTC develop and implement a plan to obtain feedback from graduates and

their supervisors to allow for a more complete baseline of customer satisfaction data.

OIG noted that the training center was doing a commendable job in response to the

consolidation, but that information management resources should be expanded and

some course materials and teacher training should be updated and improved.

Staffing for Overseas Security

The Department is making considerable progress in hiring, assigning, and training new security personnel. The fiscal year 1999 Emergency Supplemental Appropriations authorized and funded 391 new positions to help address staffing shortages in support overseas security, of which 337 were in the Bureau of Diplomatic

Security (DS). DS used innovative recruiting methods to successfully hire candidates

from liberal arts colleges and universities to fill security officer and security engineer positions and to increase opportunities for minorities. DS has also established

a new position, security technician, to maintain and repair technical security systems overseas. All DS positions have been filled, and 105 of the security positions

have been deployed overseas. Others are in training or have domestic assignments

supporting the overseas positions. Training for regional security officers has been

lengthened to include training in bomb detection, the use of the new equipment purchased with the emergency supplemental funds, and new security programs such as

surveillance detection.
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Oversight of the Government Performance and Results Act of 1993

The Government Performance and Results Act of 1993 (Results Act) requires that

agencies set goals for program performance and measure results against those goals

to help improve Federal programs and to increase accountability. As noted in OIG

congressional testimonies and statements in early 1999, the Department’s fiscal

year 1999–2000 Performance Plan represents an improvement over the previous

version. However, as OIG and the General Accounting Office (GAO) have noted, the

plan ‘‘does not provide a complete performance picture for all strategic goals.’’ The

Department is currently working with Office of Management and Budget (OMB) to

develop a plan that provides more complete performance information. In addition,

the Department notified GAO in July 1999 that it does not formally prioritize its

national interests or strategic goals, since U.S. interests and progress in any one

part of the world at any one time may reflect a different order from other parts of

the world.

In the past few years, while recognizing shortcomings in its overall strategic planning documents, the Department has emphasized its development and use of postlevel planning documents, known as mission performance plans (MPP’s) as a communication and management tool. Our ongoing work has found that MPP’s can be

an important tool for improved communication and coordinated planning among the

many agencies present at our embassies. However, the MPP process has lost momentum because headquarters is generally not using the MPP’s to set priorities, allocate resources, or measure posts’ performance. We plan to work with the Department’s strategic planning team over the next few months to streamline the MPP

process while keeping the positive aspects of the planning process and the plans

themselves.

OIG audits and inspections have also addressed the need for better performance

information in the Department in selected areas. An audit on the Department’s support of U.S. business abroad (99–CI–021) found performance measures lacking and

identified areas on which performance goals could be based including resource statistics, output statistics, professional qualifications, experience and training of commercial officers and foreign national employees, accomplishments, and customer satisfaction. An OIG inspection of the Department’s training center (ISP/I–99–16) reported that the center could obtain a more complete baseline of customer satisfaction data by developing and implementing a plan to obtain feedback from the graduates and their supervisors. An ongoing OIG audit of the Department’s efforts to

reduce trade barriers in the telecommunications industry has found that the strategic and performance plans are not effective in assessing the Department’s progress

in this area.

The Department agreed to explore more useful telecommunications performance

indicators relative to the strategic goal of opening foreign markets and to improvements in the coordination and consistency among the various performance planning

and measurement activities. However, the Department also noted the difficulties of

establishing measurements and setting universal priorities for this and other program areas.

MORE EFFECTIVE, EFFICIENT, AND SECURE OPERATIONS AND INFRASTRUCTURES

Much of our work under this strategic goal relates to the Department’s challenge

of ensuring that our personnel and facilities overseas are protected from harm. In

addition to our regular operations, OIG will continue this year to provide oversight

of the nearly $1.5 billion emergency supplemental appropriations received by the

Department for security enhancements overseas. Examples of our work in this area

included an interdisciplinary review of the Department’s management of the emergency appropriations for worldwide security upgrades, information security worldwide, access to our diplomatic facilities overseas, protection of classified documents

at the Department, the Department’s program to protect foreign dignitaries and

missions, oversight of the Moscow chancery construction, reviews of programs carried out by the Department through various assistance instruments, and real property management and maintenance.

Worldwide Security

Ensuring the safety and security of U.S. personnel and facilities overseas continues to be a paramount concern for the Department. My office has devoted significant time and resources to overseeing the Department’s use of emergency supplemental and other funding to enhance security and continues to provide recommendations to the Department to improve security in the immediate and long

term.
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1The OIG ‘‘duck and cover’’ recommendation was included in Admiral William J. Crowe’s ‘‘Report of the Accountability Review Boards on the Embassy Bombings in Nairobi and Dar es Salaam,’’ issued January 1999.

In 1999 my office established an interdisciplinary team of auditors, inspectors and

investigators to provide more effective oversight of the Departments’ management

of the fiscal year 1999 emergency supplemental appropriations. The objectives of our

work are to assess the Department’s management controls and systems that account

for and manage the emergency funds, recruit and train security and administrative

personnel, procure goods and services to enhance security, and evaluate the Department’s efforts to strengthen physical security overseas including the rebuilding of

Embassies Dar es Salaam and Nairobi.

In the year following the bombing in East Africa, my office evaluated the Department’s efforts to protect official Americans at 42 embassies. As can be seen in the

following chart, the lack of a 30-meter setback is the most prevalent deficiency we

found. However, combined with the lack of anti-ram perimeter walls and windows

that have been sufficiently protected, a major, long-term construction effort is required. For those items, such as improving the local guard force or improving the

lighting at a chancery, which the Department can do without constructing new

chancery, actions are generally underway to correct the deficiency.

Adequate Percent Inadequate Percent

Setback ................................................................. 9 21 33 79

Perimeter Walls ..................................................... 13 31 28 67

Windows ................................................................ 14 33 27 64

Chancery Walls ..................................................... 16 38 23 55

CCTV/Lighting ....................................................... 21 50 19 45

Compound Access Control .................................... 20 48 17 40

Vehicle Inspections ............................................... 24 57 17 40

Safe Haven ........................................................... 24 57 16 38

Public Access Control ........................................... 31 74 10 24

Local Guard Force ................................................. 34 81 6 14

The Department initially questioned the OIG’s September 1998 recommendation

for a new imminent danger alarm system providing warning for embassy employees

to ‘‘duck and cover’’ in the event of a vehicle bomb attack threat. The Department

subsequently accepted the recommendation.1 OIG’s embassy inspections contributed

to more effective and rapid implementation of the alarms while also stressing the

need for timely, frequent duck and cover drills, especially at missions lacking setback. The Department also implemented dozens of other OIG recommendations to

minimize security vulnerabilities, details of which are summarized in the OIG classified Semi-Annual Report.

Although a program of sustained capital investment is essential to ensure the security of the diplomatic infrastructure in the future, such a program will not immediately alter the circumstances of personnel overseas. Even a major construction

program will leave the majority of missions vulnerable to some threats for several

years. My office has attempted to focus on measures that can be taken in the near

term to reduce those vulnerabilities.

Our work has found that while the current facilities for Embassies Dar es Salaam

and Nairobi are more secure than at the time of the August 7, 1998 bombings, both

embassies still faced problems at the time of our May 1999 security evaluation. Embassy Dar es Salaam lacked sufficient emergency electrical power for security systems such as exterior security lights, alarms, and vehicle barriers. My office identified the need at Embassy Nairobi to reduce the risk of exposure presented by the

placement of large glass windows in the front of the interim chancery building and

provide a secondary exit point from the compound. Subsequent to our inspections,

the Department corrected the emergency power problem at Embassy Dar es Salaam

and the large glass windows have been replaced at Embassy Nairobi. While these

interim facilities are significantly more secure than the previous facilities, they are

at best a temporary solution because they are too small to house all official Americans at post. New chanceries are planned for Nairobi and Dar es Salaam. Money

has been appropriated and contracts have been signed. The main objective is to

build new chanceries that meet security standards and are of adequate size to house

all official Americans.
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2Office of Inspector General Status Report, ‘‘Review of Fiscal Year 1999 Emergency Supplemental Appropriations,’’ (00–OIG–001).

We also found that the Department has established systems that are capable of

appropriately accounting for and managing the emergency appropriations that are

obligated and liquidated domestically. However, we identified several issues relating

to reporting and accounting for the funds that we have recommended that the Department address. Our review of the systems in place to account for the emergency

appropriations obligated overseas is ongoing.

Thus far, our findings reveal that, overall, the Department has done many things

well. The direct involvement of the Under Secretary for Management and the Security Oversight Board has been instrumental in the Department’s effective use of

emergency supplemental funds. This senior level attention has provided focus for

the overseas security enhancements and fostered coordination among the different

bureaus. Our first report of our findings was published in January 2000.2 Additional

reports will be published as we continue our review.

Information Resources and Security

Some of the most difficult security issues to correct deal with information security.

In many ways, improving information security may be a bigger challenge than improving physical security because many of the fixes involve the behavior of personnel. To correct identified vulnerabilities requires senior management leadership,

technically qualified staff, money, and a desire to do things differently. For example,

in our November 1999 audit report on overseas telephone system security, we found

that the Department was spending $61 million to upgrade its overseas telephone

systems, but was not focusing on improving the security aspect of the systems. Furthermore, the Department needs to establish plans to modernize telephone security

overseas and request the resources needed to act on the report recommendations to

improve telephone security and protect sensitive information.

OIG has realigned its resources to focus on emerging information technology

issues. My office has consolidated its information technology and security efforts and

created a single Information Resources and Security Management Division (IRSM)

in the Office of Audits. This division will address emerging issues of congressional

interest in five areas: information management, telecommunications, information security, information technology human resources, and information warfare.

Access to Diplomatic Facilities Overseas

As part of our review of DS’s overall management of card access control systems

at overseas posts, our office completed a review of the system in Germany and Luxembourg this last year. The system in these countries was intended to control access

to diplomatic facilities, to reduce the cost to DS for the local guard program, and

to provide a model for possible worldwide use. Recommendations were made with

regard to vulnerabilities identified by our office.

In November 1999, we also issued our report on the bureau’s overall management

of card access control systems at overseas posts. Several organizational elements of

the bureau are involved in managing card access control systems used at U.S. posts

abroad. However, no single office or element has been designated with lead responsibility for managing those systems. As a result, important policy requirements were

not applied, or were not adequately applied, in the management of those systems.

The bureau could significantly improve the management of card access control systems by: designating a single office to be primarily responsible for managing distinct

card access system activities, including system planning, installation, administration, and maintenance; assessing the risks, costs, and benefits of using card access

control systems before acquiring such systems; acquiring and using only those systems approved by the bureau; and, focusing greater attention on computer security

aspects of those systems.

Protection of Classified Documents at State

OIG evaluated the effectiveness of Department policies and procedures for protecting classified documents at the Main Department of State headquarters facility

in Washington, D.C. Although the Department has programs in place to evaluate

individuals’ trustworthiness and need to handle classified information, improvements to enhance the level of security awareness and controls to prevent unauthorized disclosures are needed. The report highlighted the following specific problems:

—very highly classified documents relating to intelligence reporting are not safeguarded in accordance with government regulations;
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—significant numbers of foreign nationals are permitted unescorted access to the

Department—uncleared individuals are not always escorted in areas where classified information is handled, processed, stored, and discussed; —administrative actions taken to discipline employees are ineffective in correcting

poor security practices; and —unit security officers are not well informed about security requirements and do

not have the authority to enforce security requirements.

OIG recommended that the DS be designated as the organization responsible for

protecting sensitive compartmented information (SCI) and that the bureau enhance

physical and procedural measures required to safeguard such information. DS officials agreed with OIG’s findings and recommendations. INR agreed that security

policies are not being sufficiently enforced, but did not agree to designate DS as the

cognizant security office for the protection of SCI. Additionally, the Department has

since issued a notice regarding a visitor escort policy.

The Protective Services Program

OIG evaluated the effectiveness of DS’s protective services program. The principal

focus of the audit was protection provided to visiting foreign dignitaries and foreign

missions in the United States.

DS has successfully defended dignitaries and missions from attack, and client organizations provide positive feedback on DS’s performance. However, improvements

are needed to enhance the protective services program to correct the following

vulnerabilities: —DS shares its protection responsibilities with the Secret Service and other law

enforcement agencies, causing some operational deficiencies and inconsistencies; —the Department has not systematically determined which foreign dignitaries

should receive DS protection in the United States; —improvements are needed in the process by which DS develops and disseminates threat information to protective details; —the lack of defined policies and procedures caused inconsistencies in the operation of some details, particularly with respect to preparatory briefings and

midnight shifts; and —effective protection was hindered by low DS staff levels excessive overtime, and

inadequate procedures to ensure that agents assigned to protective details were

capable of fulfilling all responsibilities.

OIG made recommendations to effect the needed improvements in the protective

services program. DS and other Department officials generally concurred with the

OIG’s findings and recommendations, except for the recommendation to initiate legislative action to centralize all protection activities for foreign missions into DS.

Moscow Chancery

The Moscow Oversight Team (MOT) provides the Inspector General, senior Department officials, and congressional oversight committees with current information

on the construction of the secure chancery facilities in Moscow and makes timely

recommendations to improve the security aspects and contract administration of the

project. Since 1995, MOT has made semiannual onsite evaluations of the project,

flagging problems on which the Department could take immediate action, rather

than letting the problems escalate. The last onsite evaluation took place in October

1999 and resulted in 21 recommendations addressing master planning for the transition to the secure chancery, counterintelligence, technical security programs, accreditation reporting, and secure warehouse operations. The Department is taking

action to correct the deficiencies identified in the report.

During April 2000, MOT will conduct its final evaluation of the secure chancery.

This visit is intended to confirm that previously identified security deficiencies have

been corrected and to ensure that security is not compromised during the move from

the existing office building into the new facility. The move is currently scheduled

for May 2000. In addition, MOT will ensure that the procedures and personnel are

in place to maintain the extensive security systems in the new chancery.

Broadcasting Facilities

OIG also extended its security oversight to the BBG’s engineering components and

broadcasting networks which has resulted in recommendations for substantial improvements in security preparedness at overseas as well as domestic facilities. These

recommendations have been endorsed by the BBG and corrective actions are under

way.

Grants Management and Transfers

The Department annually expends more than a billion dollars for a variety of programs carried out through assistance instruments such as grants, cooperative agree-
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ments, and transfers; however, it does not use standardized grant systems, policies,

or procedures to manage these programs. Previous OIG audits identified insufficient

monitoring and oversight of grantees; unauthorized, unallowable, and unsupported

costs; internal control weaknesses; or noncompliance with applicable regulations associated with these awards. For example, OIG found that the handling of a building

sale and immediate rental of that same building by a grantee, the Institute for

International Education, did not comply with Office of Management and Budget

(OMB) requirements, resulting in about $4 million in questioned rental costs over

the life of the lease. In other cases, we questioned about $3 million when grantees

did not properly document or use Federal funds for authorized purposes. In these

cases, the grantees involved were the American Council for Learned Societies ($1.1

million), the Washington Workshops Foundation ($.9 million), and the Institute for

International Education ($1 million for indirect cost rates).

The managing and monitoring of the recipients of these funds has become more

critical because of OMB guidelines revised in 1996. As a result, the majority of Department’s grantees are no longer required to have annual financial audits. Furthermore, ongoing legislative and other governmental initiatives will affect how the Department manages grants and monitors non-governmental organizations in the future. On November 20, 1999, for example, the President signed Public Law 106–107,

the Federal Financial Assistance Management Improvement Act, which requires the

Department to streamline and simplify the application, administrative, and reporting procedures for Federal financial assistance programs. OIG is working with the

Department to establish a common system, including electronic processes, wherein

a non-Federal entity can apply for, manage, and report on the use of funding from

multiple Federal financial assistance programs.

Improving Real Property Management and Maintenance

A significant open OIG audit recommendation in the area of property resulted

from our 1993 audit ‘‘Maintenance and Repair of Buildings Overseas’’ (3–PP–014).

The audit recommends the Department develop a system to identify and monitor

the worldwide backlog of maintenance and repair deficiencies, including determining

an acceptable level for the backlog and periodically updating the backlog for corrective action taken, additional deficiencies identified, and improved cost estimates.

Since 1988 the Department has reported rehabilitation and maintenance of real

property overseas as a material weakness in the Federal Managers’ Financial Integrity Act Report. Over OIG’s stated objections, the Department’s Management Control Steering Committee recently closed this weakness on the basis that all conditions had been met with the exception of the backlog which cannot be brought down

to zero due to funding issues. Although significant improvements have been made

in correcting this weakness, we believe that more needs to be done. The Department

needs to better define what is an ‘‘acceptable’’ level for the backlog to rehabilitate

and maintain facilities and also provide a baseline that will address the costs to reduce the backlog to an acceptable level. We believe that armed with this information

the Department can best identify those properties that may be more prudent for disposal in lieu of the high costs to rehabilitate and provide long-term maintenance.

We plan to closely monitor Department efforts in this area.

As I reported in my statement to the Subcommittee last year, my office has continued to advise the Department of excess, underutilized, or obsolete real properties

identified in our inspections and audits at overseas posts. The Department evaluated 172 properties that OIG categorized as excess, underutilized, or obsolete at the

time of the inspection or audit. Of these, the Department plans to dispose of 65, an

additional 17 warrant further study, and the remaining 90 will be the subject of dialogue between the Bureau of Administration’s Office of Foreign Buildings Operations (A/FBO) and the regional bureaus. These reviews will be used by the Department to better manage its real property assets.

GREATER ADHERENCE TO FUNDAMENTAL PRINCIPLES GOVERNING PROFESSIONAL AND

ETHICAL CONDUCT

OIG is mandated to prevent and detect waste, fraud, and mismanagement. Specific allegations or other information indicating possible violations of law or regulation are investigated by OIG special agents supported by experts from other OIG

offices as appropriate. During fiscal year 2001, OIG continues to focus on promoting

increased awareness of standards of conduct and accountability among agency and

OIG employees, contractors, and other appropriate audiences, including representatives of foreign governments who have requested OIG assistance on this issue. As

part of these efforts, results from audits, inspections, and investigations will be

highlighted and recommendations made to reduce areas of vulnerability and opportunities for misconduct.
139

OIG also will work proactively, in consultation with targeted audiences, to improve adherence to standards of accountability by ensuring that employees are informed of and understand the standards specific to their professional and ethical

conduct. Accordingly, OIG will work with the foreign affairs agencies to improve

their programs for educating employees on standards of accountability and fundamental principles governing programmatic accountability and ethical conduct.

Investigative Process

My office makes every effort to review complaints as quickly and efficiently as

possible. Upon receipt of a complaint or allegation regarding fraud, waste, abuse or

mismanagement, one of the following actions takes place: a criminal investigation

or preliminary inquiry is initiated; the matter is referred to management officials

who have the authority and jurisdiction to investigate or resolve the issues; or the

matter is filed without action because none is warranted. A preliminary inquiry is

initiated when vague, non-specific information is received and a few inquiries are

needed to develop more facts to justify a criminal investigation or resolve it. If a

preliminary inquiry is opened, special agents have 45 days to develop that additional information or resolve and close the preliminary inquiry.

If a criminal investigation is opened, special agents must present the facts of the

case to the appropriate United States Attorney’s Office, or other prosecuting authority, within 90 days of the case opening. In the event the prosecution of the case is

declined, special agents have 45 days from the date of the declination to close the

case, initiate civil proceedings, or commence work on administrative remedies.

These policies and procedures were implemented in order to reduce the amount of

time it takes to complete investigations, particularly those involving Department

employees.

In addition to our efforts to reduce the amount of time to complete employee investigations, OIG has also instituted a policy of issuing Case Notification Letters

(CNL) to employees at the conclusion of investigations. Our established policy and

procedure requires that at the conclusion of an investigation when no action is anticipated being brought against a subject a CNL will be forwarded directly to the

Subject. In rare cases, when the evidence is inconclusive, a CNL may not be provided to the employee. At the discretion of OIG management, it may also be deemed

appropriate to forward a CNL to Department officials.

Proactive Outreach Development

The Office of Investigations is developing training for outreach and fraud awareness and prevention. The training will be based on actual cases and tailored to the

particular employee group being addressed. Initially, two programs will be developed: one oriented to the needs of contracting officers with A/FBO and the other towards the Bureau of Financial Services (FMP) financial officials. The A/FBO training will cover indicators of contract fraud and will discuss completed criminal cases

involving schemes perpetrated against the Department.

Visa Fraud

Each year, millions of individuals apply for passports and visas at the more than

230 U.S. embassies and consulates throughout the world. Attempts to falsify, alter,

or counterfeit U.S. visas or passports, or to obtain genuine documents by fraudulent

means are a constant problem both within the United States and overseas. In 1999

a majority of work performed by the Office of Investigations was in visa fraud and

passport investigations. Statistics representing all investigative cases opened in my

office for fiscal year 1999 are indicated in the following table.

FISCAL YEAR 1999 STATISTICS FOR CASES OPENED

Allegation Type No. of Cases Percent of Cases

Visa Fraud/Passport Fraud ............................................................................ 29 39

Employee Misconduct ..................................................................................... 11 15

Contract/Procurement Fraud .......................................................................... 4 5

False Statements/Claims ............................................................................... 8 11

Theft ............................................................................................................... 14 19

All Other ......................................................................................................... 9 12

Total .................................................................................................. ........................ 100
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In 1999, the Office of Investigations, working with other U.S. law enforcement

agencies, conducted a number of investigations that resulted in criminal charges

against individuals and companies who were operating large-scale schemes to provide fraudulent U.S. visas to paying customers. Several of these cases have involved

fraudulent H1–B visas, which are issued legitimately only to individuals with particular skills needed by a particular company in the U.S.

One investigation determined that a foreign national living in New Jersey had operated a company for several years that sold fraudulent H1–B visas, which were

then used to obtain social security cards. Most of the customers were foreign nationals living illegally in the U.S. After a jury trial, the seller was convicted of multiple

felony counts of visa fraud and was sentenced to 55 months in prison. The seller

is also subject to deportation after completion of the sentence.

Another investigation developed evidence that an immigration consultant in California had operated companies through which she arranged for numerous foreign

nationals to enter the United States on H1–B visas, based upon false certifications

that they had entered into contracts for high-skill employment with companies in

the U.S. The immigration consultant was indicted on felony charges of visa fraud

and alien smuggling and was arrested. An attorney associated with the consultant

was also charged. Disposition of these charges is pending. It is anticipated that

there will be additional charges against other individuals.

In another investigation, it was determined that individuals in Virginia, Florida,

and Kentucky, cooperating with citizens of a Central European country, had conspired to obtain fraudulent visas and to smuggle numerous people into the United

States to work on cleaning crews for retail stores. These workers would usually

enter the country on tourist visas, obtained based upon false statements. Upon arrival, the workers were frequently provided with fraudulent H1–B visas and then

used the visas to obtain social security cards. Several individuals involved in the

operation of this scheme have entered guilty pleas to criminal charges in this case,

and charges against others are pending. One of the higher level individuals in the

operation, a foreign national who resided in Florida, has pleaded guilty to money

laundering and has agreed to cooperate in providing evidence against others.

Another investigation in Virginia developed evidence that foreign nationals residing illegally in the United States were being provided with fraudulent H–1B visas.

The individuals were then being transported from the New York/New Jersey area

to Social Security offices in Virginia in order to obtain social security cards based

on the fraudulent visas. Five persons entered guilty pleas to criminal charges. Three

of these individuals agreed to voluntary departure from the United States, while the

other two agreed to provide information regarding the higher level organizers of this

scheme.

In addition to conducting cases involving fraudulent H–1B visas, the Office of Investigations also continued to pursue evidence of other types of visa fraud. An investigation conducted jointly with the INS determined that a naturalized United States

citizen living in Hartford, Connecticut had operated a scheme to arrange marriages

of convenience for aliens living illegally in the United States, and for others who

wanted to come to this country. Immigrant visas were obtained based on documentation of these fraudulent marriages. The principal subject and 10 other individuals were indicted on visa fraud and other charges. The principal subject, after entering a guilty plea, was sentenced to 5 months in prison and a fine. Several other

individuals also pleaded guilty and received lesser sentences.

And, finally, in a case that developed recently, an FSN investigator employed by

INS at an embassy in Asia was arrested on charges of extortion, based upon evidence that he had solicited payments in return for approving an asylum petition.

Approval of this petition would lead to issuance of a visa. The subject was indicted

subsequent to being arrested and remains in custody pending resolution of the

charges.

This concludes my statement. I look forward to working with your subcommittee

in the coming months.

APPENDIX

OIG REPORTS AND MEMORANDA ISSUED FOR WORK IN FISCAL YEAR 1999

MISSION: IMPROVED IMPLEMENTATION OF FOREIGN POLICY

Improved Conduct of Foreign Relations

Taken as a whole, OIG activities provide a broad overview of the Department’s

effectiveness in the implementation of foreign policy and in the use of the full range

of diplomatic and public diplomacy tools including international broadcasting.
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3The inspection of Embassy Jakarta, Indonesia was bifurcated due to political instability in

the region.

Through the inspections of overseas missions and domestic bureaus, and on in-depth

audits of selected issues, we assessed the conduct of foreign relations, particularly

the skills and capabilities of senior management and the availability and use of appropriate structures, authorities, and processes. In the coming year, OIG will inspect and audit the effectiveness of policy and program formulation and implementation; intelligence reporting; results monitoring and assessment; and, mission leadership and management.

Audits:

Activities Supporting the International Law Enforcement Academy, Budapest,

Hungary (99–CI–005)

Department of State Support for U.S. Business Abroad (99–CI–021)

International Law Enforcement Coordination and Oversight (99–CI–027)

Policies and Procedures for Ensuring that Radio Marti Broadcasts Adhere to Applicable Requirements (99–IB–010)

Border Biometrics (Laser Visa) Program (ISP/I–99–12)

American Council of Learned Societies Supporting the Vietnam Fulbright Economic Teaching Program (99–CG–026)

Cyprus Fulbright Commission (USIA–99–CG–017)

Post Management Inspections:

Management Inspections of Embassies and U.S. Information Service:

—Embassy Singapore and USIS Singapore (ISP/I–98–44)

—Embassy Kuala Lumpur and USIS Malaysia (ISP/I–98–01)

—Embassy Tokyo and USIS Japan (ISP/I–99–04)

—Embassy Bujumbura and USIS Burundi (ISP/I–99–07)

—Embassy Lilongwe and USIS Malawi (ISP/I–99–10)

—Embassy Cairo and USIS Egypt (ISP/I–99–11)

—Embassy Jakarta and USIS Indonesia (ISP/I–99–15 and ISP/I–99–02) 3

—Embassy Tel Aviv and USIS Israel (ISP/I–99–18)

—Consulate General Jerusalem and USIS Jerusalem (ISP/I–99–19)

—Embassy Kathmandu and USIS Nepal (ISP/I–99–21)

—Embassy Colombo and USIS Sri Lanka (ISP/I–99–22)

—Embassy New Delhi and USIS India (ISP/I–99–23)

—Embassy Santo Domingo and USIS Dominican Republic (ISP/I–99–24)

—Embassy London and USIS United Kingdom (ISP/I–99–27)

—Embassy Dublin and USIS Ireland (ISP/I–99–28)

—Embassy Bucharest and USIS Romania (ISP/I–99–29)

Inspections of Embassies only:

—Embassy Kampala, Uganda (ISP/I–99–05)

—Embassy Kigali, Rwanda (ISP/I–99–06)

—Embassy Harare, Zimbabwe (ISP/I–99–08)

—Embassy Lusaka, Zambia (ISP/I–99–09)

—Consulate Lyon, France (ISP/I–99–25)

Compliance Follow-Up Reviews:

—U.S. Mission to NATO, Brussels, Belgium (ISP/C–99–03)

—Embassy Hanoi, Vietnam (ISP/C–99–13)

—Embassy Rangoon and USIS Burma (ISP/C–99–14)

—Embassy Mexico City and Constituent Posts and USIS Mexico (ISP/C–99–17)

—Embassy Moscow and Constituent Posts and USIS Russia (ISP/C–99–20)

Other Office of Inspection Reviews:

—Management Controls for Small Embassies (ISP/I–99–26)

—Border Biometrics Program (ISP/I–99–12)

Inspector General Testimony and Statements for the Record:

Testimony, Major Management Challenges for the Department, House Committee

on Government Reform, Subcommittee on National Security, Veterans Affairs, and

International Relations, February 25, 1999.

Testimony, Major Management Challenges for the Department, Senate Committee

on Foreign Relations, Subcommittee on International Operations, March 4, 1999.

Statement for the Record, OIG Budget Request, House Committee on Appropriations, Subcommittee on Commerce, Justice, State, the Judiciary, and Related Agencies, March 10, 1999.
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4The OIG review of the fiscal year 1999 Emergency Supplemental Appropriations was conducted through August 31, 1999. 5 A major portion of the work that resulted in the ‘‘Audit of Overseas Telephone Security Management’’ was accomplished in fiscal year 1999.

BETTER ALIGNMENT OF FISCAL AND HUMAN RESOURCES WITH U.S. FOREIGN POLICY

OIG has built a Results Act component into selected audits, inspections, and security reviews to assess the performance goals and measures. Areas of OIG coverage

included overseas security vulnerabilities, financial management, Y2K remediation

efforts, telecommunications, and property management. OIG established a plan to

review and report on the efforts of the Department and Broadcasting Board of Governors to develop and use performance measures and will verify and validate selected data sources for such measures.

OIG work includes:

—Review of Tours of Duty (99–SP–013) —Inspection of FSI (ISP/I–99–16) —Inspection of Consulate Lyon (ISP/I–99–25) —Consular Fraud Prevention Programs (99–CI–028)

Inspector General Testimony:

—Nonimmigrant Visa Fraud, House Committee on the Judiciary, Subcommittee

on Immigration and Claims, May 5, 1999. —Best Practices and Standards of Performance in an OIG, Council of the District

of Columbia, Committee on Government Operations, May 19, 1999.

More Effective, Efficient, and Secure Operations and Infrastructures

OIG security oversight inspections were expanded to include low and medium

threat posts, in addition to those with high and critical threat ratings. The new division of Security Enhancements Oversight is reviewing the fiscal year 1999 Emergency Supplemental Appropriations. In addition to embassy security and Y2K preparedness, OIG post inspections reviewed executive direction, policy implementation, public diplomacy, consular operations, diplomatic readiness, and administrative operations. Audit reviews included export licensing process, law enforcement coordination, consular antifraud programs, and the protection of classified information

at the Department. International broadcasting reviews included Radio Marti’s adherence to the applicable broadcast standards.

Security Reviews:

Review of Fiscal Year 1999 Emergency Supplemental Appropriations (00–OIG– 001) 4

Security at Embassies Dar es Salaam and Nairobi (SIO/E–99–50)

Protective Services (SIO/A–99–29)

Moscow Oversight Status Reports (SIO/M–99–31, SIO/M–99–31)

Special Documents Program (SIO/Z–99–40)

Card Access Control System in Germany and Luxembourg (SIO/A–99–01)

Protection of Classified Documents at State Department Headquarters (SIO/A– 99–46)

Security Audit of Overseas Telephone Security Management (SIO/A–00–01) 5

Security Inspections:

—Embassy Nassau, The Bahamas (SIO/I–99–01) —Embassy Sarajevo, Bosnia-Herzegovina (SIO/I–99–17) —U.S. Diplomatic Posts in the Bureau of Western Hemisphere Affairs (SIO/I–99– 18) —Embassy Madrid, Spain (SIO/I–99–21) —Embassy London, United Kingdom (SIO/I–99–24) —Embassy Lisbon, Portugal (SIO/I–99–25) —Embassy Dublin, Ireland (SIO/I–99–26) —Embassy Reykjavik, Iceland (SIO/I–99–27) —Embassy Copenhagen, Denmark (SIO/I–99–28) —Embassy Zagreb, Croatia (SIO/I–99–34) —Embassy Kuala Lumpur, Malaysia (SIO/I–99–35) —Embassy Brussels, Belgium, USMEU, and NATO (SIO/I–99–36) —Embassy Luxembourg (SIO/I–99–37) —Embassy Prague, Czech Republic (SIO/I–99–41)

—Embassy Valletta, Malta (SIO/I–99–42)

—Radio Free Europe/Radio Liberty Prague, Czech Republic (SIO/I–99–43)

—Embassy Oslo, Norway (SIO/I–99–44)

—Embassy Stockholm, Sweden (SIO/I–99–45)

Security Follow-Up Reviews:
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6OIG’s Y2K activities extended from fiscal year 1998 through fiscal year 2000.

—Embassy Islamabad, Pakistan (SIO/C–99–09)

—Embassy New Delhi, India (SIO/C–99–10)

—Consulate General Hong Kong (SIO/C–99–19)

—Embassy Ankara, Turkey (SIO/C–99–23)

—Embassy Beijing, China (SIO/C–99–30)

—Embassy Santo Domingo, Dominican Republic (SIO/C–99–51)

Year 2000 Information Management Review: 6

Y2K Interim Memorandum 1 (6/17/98)

Year 2000 Interim Memorandum 2, Analysis of Key Y2K Issues (8/20/98)

Year 2000 Interim Memorandum 3, Analysis of Telecommunications Issues (10/16/

98)

Y2K Certification of USIA Systems (2/8/99)

Y2K Readiness of Affiliates Used by International Broadcasters (management letter)

Inspector General Testimony and Statements for the Record concerning Y2K:

Testimony, The Year 2000 Computer Problem: Global Readiness, Senate Special

Committee on the Y2K Technology Problem, March 5, 1999.

Testimony, The Year 2000 Computer Problem: Global Readiness and International

Trade, Senate Special Committee on the Year 2000 Technology Problem, July 22,

1999.

Testimony, The Year 2000 Computer Problem: Global Readiness, House Committee on International Relations, October 21, 1999.

Statement for the Record, Year 2000 Computer Problem, House Committee on

Ways and Means, February 24, 1999.

Statement for the Record, The Year 2000 Computer Problem: Global Readiness,

Senate Special Committee on the Year 2000 Technology Problem, October 13, 1999.

Office of Audits:

Consular and International Programs Division:

—Interagency Review of Export Licensing Process (99–CI–018)

—Consular Fraud Prevention Programs (99–CI–028)

Financial Management Division:

—Florida Regional Center (99–FM–002)

—U.S. Department of State’s Consolidated Financial Statements (99–FM–003)

—ICASS Financial Statements Fiscal Year 1997 (99–FM–004)

—Foreign Service Retirement and Disability Fund Financial Statements for Fiscal

Year 1998 (99–FM–014)

—Department of State 1997 and 1998 Principal Financial Statements (99–FM–

031)

—ICASS Program’s 97–98 Financial Statements (99–FM–032)

Property Management and Procurement Division:

—Real Property Advisory Board (99–PP–006)

—Acceptability Review Process Within the Bureau of Diplomatic Security (99–PP–

030)

Contracts and Grants Division:

—United States Educational Foundation, Pakistan (99–CG–001)

—National Endowment for Democracy (99–CG–007)

—Indirect Cost Rates Proposed by the Institute of International Education

(USIA–99–CG–015)

—Sale and Leaseback Arrangement Proposed by the Institute of International

Education (USIA–99–CG–016)

—Review of Planning and Management of Lisbon Expo 98 (USIA–99–CG–019)

—Fiscal Year 1999 Indirect Cost Rate AIT (99–CG–022)

—Malaysian-American Commission on Educational Exchange (USIA–CG–99–024)

—Claimed Costs Under USIA Awards to the Washington Workshops Foundation

(99–CG–025)

—Accounting for Increased Visa Fees of the AIT (99–CG–029)

—Nonfederal Audits of Nonprofit Institutions (various desk reviews)

International Broadcasting Division:

—RFE/RL Administrative Practices (99–IB–012)

—Office of Cuba Broadcasting’s Administrative Practices (99–IB–023)

Inspector General Testimony:
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—Oversight of Security at U.S. Missions Overseas, House Committee on International Relations, Subcommittee on International Operations and Human

Rights, March 12, 1999.

—Export Licensing Process for Munitions and Dual-Use Commodities, Senate Governmental Affairs, June 23, 1999.

GREATER ADHERENCE TO FUNDAMENTAL PRINCIPLES GOVERNING PROFESSIONAL AND

ETHICAL CONDUCT

OIG is mandated to prevent and detect waste, fraud, and mismanagement. Specific allegations or other information indicating possible violations of law or regulation are investigated by OIG special agents supported by experts from other OIG

offices as appropriate.

Audits:

Report on Inquiry into Former Contractor Allegations (99–PP–008)

Unreasonable Contractor Profit on an Asbestos Abatement Project (99–PP–009)

Report on Inquiry into Contractor Allegations (99–PP–011)

Review of Planning and Management of Lisbon Expo 98 (USIA–99–CG–019)

Inspector General Testimony:

Allegations of Visa Fraud and Other Irregularities at the U.S. Embassy in Beijing,

House Committee on Government Reform, July 22, 1999.

EMBASSY CONSTRUCTION

Senator GREGG. Thank you, Madam Secretary. Let me begin

where you began, which is the issue of construction of embassies

and facilities around the world where we are trying to respond to

the various reports we have had. This committee has aggressively

pursued a plan of trying to refurbish and rebuild the embassies so

that we would have adequate security for our personnel.

I am looking at a chart, and I suspect you do not have it. It is

a fairly discouraging chart. It is a chart of construction projects

which are going on in approximately 25 different embassies around

the world and the funds that have been provided and the funds

that are still to be provided. It is a $1.5 billion price-tag and the

average price, as I figure it, on these embassy construction projects

is somewhere in the vicinity of $90 million. They range from a low

of $7 million in Kingston, which is extremely low compared to the

average, to the typical construction site cost. Sarajevo is at $100

million, Sofia at $82 million, Abidjan at $86 million, Abu Dhabi at

$54 million, Rio de Janeiro at $90 million, Sao Paulo at $103 million, Berlin at $150 million, Beijing at $275 million, Seoul, South

Korea at $184 million.

These are stunning numbers, and I do not know what to do

about them. I do not suspect that you have much that you can give

me that will be constructive to the issues, but how can we be

spending what amounts to about $90 million on the average for a

physical facility in many countries where you can almost buy the

country for that amount? In Sarajevo, $104 million; you must be

able to buy most of downtown Sarajevo today for $104 million.

The numbers for the construction costs of these facilities are

staggering. I recognize that a lot of this is driven by American law,

which is our law, which says that you have to use American contractors. The security needs in Beijing, for example, are unique and

we have had serious problems on all sorts of levels in Beijing in

trying to build the building. Then the Berlin problem is that our

ambassador there seems to have fallen down on his job rather dramatically in his ability to get approvals.
145

Obviously, this committee is totally committed to trying to make

sure that we address the facility needs of the State Department.

This has been a priority of ours. But at these prices, we are not

going to be able to address a whole lot of facilities.

I have two levels of questions. Can you give us any thought on

how we can get some control over these construction costs, number

one? And number two, can you give us any thought as to whether

or not we can start moving to a hub approach with some of these

embassies so that if we are going to build a $100 million embassy

in Nairobi, that that can be used as a center and then we build

much smaller facilities in the surrounding countries, which do not

have as many people or as large an economic impact potentially on

our relationship with them?

Secretary ALBRIGHT. Mr. Chairman, I agree with you. When I

looked at these costs it was sticker shock. I mean they are remarkable amounts for embassies. And I have gone back to our folks on

this to try to explain better why this happens, and there are a

number of reasons.

One is that we obviously have to acquire larger pieces of land in

order to have the proper setbacks and this can be costly where they

are in particular cities.

Also, the security standards now on these buildings, the cost is

phenomenal in terms of the kinds of glass you have to use and various things—a lot of it has to do with having secure buildings.

The other, as you pointed out, are things that have to do with

our law, that we have to use American contractors and U.S.-origin

materials and getting them to places in sealed carriers so that

there is no tampering with them. Every part of this is an expensive

process.

You and I and other members of the subcommittee, we have

talked about the fact that we have a prime responsibility to make

sure that our people are safe in these places, and this is what it

amounts to. I have asked them to scrub and rescrub these numbers

because I had the same feeling you did about it, and all I can tell

you is that I am told that this is what it costs.

I think the question we have to answer is how do we make sure

that the buildings are the kind that Admiral Crowe says we have

to have and that Lou Kaden and his committee say we have to

have and be able to afford them?

Now, on the German question, I defend Ambassador Kornblum

on this. Part of the problem here is that we have wanted our embassy to be in a prime historic location near the Brandenburg Gate,

where it is a little hard to get the proper setbacks when that is

their main thoroughfare. So that has been one of the problems.

In each of these cities there is a specific problem that has to be

dealt with and we are very happy—happy is the wrong word—we

will go through with you what the various costs are and where they

are.

On the question of hubs, the Nairobi embassy is, in fact, being

rebuilt to serve as a regional hub so that a lot of the technology

and things that are necessary for the support of an embassy in the

whole region will be done out of there.

We are also trying something different in some places which are

American presence posts, the way Ambassador Rohatyn has
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thought up in France, where you send one or two people into a city

where the structure for them is not that complicated, and yet there

is an American presence primarily for business purposes and consular.

I do happen to believe strongly in the concept of universality because while some country may not seem as important as another

for one reason or another, ultimately it is important for Americans

to be there. And, as you know, the embassy serves as a platform

also for a lot of other agencies to serve with us.

What I am doing now is to systematically go through the recommendations out of the Kaden and Crowe reports, to right-size

those embassies so that the agencies are all working together and

we have the right mix of people in them.

But I agree with you that the cost of the embassies is very high,

and I think we have to keep asking ourselves why. My answers are

the land, the security, and the fact that we must use American contractors and materials.

Senator GREGG. Well, I appreciate that, and your answer was

pretty much the answer I expected to get. I guess what I would like

to think about is how we could put some system in place that

would give us an independent review of the construction costs by

people who are in the construction business. I am thinking of

maybe setting up, or I would be interested in your thoughts—setting up a blue ribbon panel that would be a volunteer group who

would be specialists in construction—leading architects and leading

construction individuals from across the country who do not do

international construction, so there would not be conflicts, and

have them be a platform where we could get an analysis of whether

or not these costs are in the correct ballpark. I mean, we can send

GAO in, I suppose, and ask them to look at each one of these embassies, but I am not sure that that is the system.

What I am trying to think of is some systematic way—if we could

put in some sort of system in place so that we could get a feel that

if there is something that we do not have to do or some way to do

this more effectively, we can do it. The big problem here is we have

192 embassies that we have to address or something like that, and

at this rate of price, we are simply never going to get them all

done. We are going to end up with maybe the high-priority ones

being done but unfortunately, the targets end up being places like

Abu Dhabi or someplace that we did not expect.

Secretary ALBRIGHT. I think it would be very useful to have a variety of people advising. I think the Secretary of State ultimately

needs to have control over decision-making on this.

Senator GREGG. Oh, absolutely.

Secretary ALBRIGHT. But I do think it would be useful. We have

American architects designing these buildings, trying to make

them fit into their country.

I agree with you that we should develop some system of getting

better advice on it.

Senator GREGG. Well, we have this review board that looks at intelligence activities. It is an independent group of private citizens.

It is done as volunteers.

Secretary ALBRIGHT. FIPIAC [President’s Foreign Intelligence

Advisory Board], yes.
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Senator GREGG. I am thinking maybe you set up a group like

that that looks at embassy security and construction so that you

have both the expertise on the security side and the expertise on

the construction side. I do not want another level of bureaucracy

that makes things take longer and increases costs, but I do want

to have somebody we can go to and have an analysis done that is

fair and objective as to whether these prices are reasonable and

whether we can afford them.

Secretary ALBRIGHT. I think we should look at some mechanism.

And if I might at this point explain why we are actually asking for

advance appropriations on this, which I know is not one of your favorite activities, because I think that this would help us in terms

of letting contracts for a number of buildings at the same time and

to try to figure out a longer-range plan for them.

So those two things together, I would be very pleased to work

with you on.

Senator GREGG. I am becoming more sympathetic to advance appropriations in this area, actually, which is something I was not.

I want to talk about other issues but I want to turn to my colleagues and give them a chance.

Senator HOLLINGS. Thank you, Mr. Chairman, and I apologize to

you and our distinguished Secretary because we have the hearing

upstairs on the mergers of these communications folks and I am

going to have to leave.

But getting right to the point, the Secretary has far more important things to turn her attention to. What you and I ought to do

is just start a hearing on this request and tell them to bring up

a carpenter and whoever else it is and go down chapter and verse.

We know about construction and we know about costs and we are

going to have to vote for it.

You get one of these super-duper panels, it is just like the superduper panel of Inman and now we have the one of Crowe, and I

have seen more waste as a result of it. You go down to Costa Rica,

which should not have been a problem at all, but they have the

Crowe protection. They have a $1 million wall around the facility

down there and an anti-tank trap, and they do not have a tank in

Costa Rica.

I have seen us sell off good properties, namely Rio. I fought that

for 20 years. We have sold off the finest facility in the world because, well, the capital is going up to Brasilia and so we sell it off.

Now we are trying to build a $94 million one. And 200 miles further, in Sao Paulo, we are trying to build a $103 million one. That

is not going to happen.

So what we really need to do is you and I can set up a hearing

and get our staff to work on it and we can clear up this thing because it is going way beyond these multi-million-dollar facilities

and all the things about the setbacks and land. We just sold off

Bermuda. We had enough land there to take all the facilities that

we needed and the residences and put them on that fine tract. That

Bermuda installation was given to us practically, so we sell it and

we put the representative there now, the consul, in a facility that

we pay $25,000 a year rent.

There is no continuity or grasp for policy that anybody could support, so I will go along with your commission, but that is just pass-
148

ing the buck. We can get at it, because we are going to have to vote

for it right now.

PEACEKEEPING

Otherwise, let us get to the peacekeeping. Madam Secretary, we

have nine of them and we are going to add four more; is that right?

We have peacekeeping at Golan Heights, Lebanon, Iraq, Kuwait,

Western Sahara, Bosnia-Herzegovina, Cyprus, Haiti, Georgia, and

Pakistan. We are going to now add Kosovo, Sierra Leone, East

Timor, and the Congo.

Two questions. One, there is no peace and otherwise, the policy.

When I say there is no peace, it is obvious in certain places where

they talk about peace that there is not any. Otherwise, when you

get a policy in Kosovo itself, you have a request for a permanent

facility there, like we are going to have partitioned, separate

Kosovo. I understand the State Department minions heard that

Senator Gregg and I were not going to approve it, so you have it

over in foreign operations. A permanent facility, yet you talk of a

multi-ethnic society under Belgrade.

So we have a mixed policy and we are sending a signal that no,

it is not going to be mixed; we are going to have a separate Kosovo.

I could go down the list. Sierra Leone, where we have war criminal tribunals up in Bosnia and places of that kind and yet we take

those who help bring about the revolt and we are trying to set

them up down there. And when I say no peacekeeping, I just got

the release here whereby the rebels took nearly 500 rifles and four

armored personnel from the peacekeeping Guinean battalion that

was on its way to keep the peace.

I mean this thing is going to get into a national debate and we

are going to have to have a national policy. It is all over the lot,

$100 million facilities on Inman or Crowe now. And otherwise coming along in Kosovo, I cannot tell what the policy is. Could you respond, please?

Secretary ALBRIGHT. Yes. First of all, let me just describe our

Kosovo policy, which is that we won the war, and I think it is now

important to win the peace, a peace in which the Kosovars would

have self-government with a great deal of autonomy, leaving for

later what its final status would be, and where there are institutions in which minority rights are respected.

And what is happening through the UNMIK [ed. United Nations

Mission in Kosovo], the U.N. peacekeeping process, is setting up

that civilian administration, getting local police trained, getting

schools set up, election registration, working on joint administrative bodies where the Serbs and the Kosovars work together.

No one has worked on this will ever tell you that it is easy, but

it is necessary. I believe that having stability in the Balkans is important for stability in Europe and, therefore, for the United

States.

The facility in Pristina is actually in your bill, but it is important

because we are going to be moving Americans into that region to

do difficult work for a long period of time.

I would just like to make the following statement about security

in the embassies. I know it is a lot of money but I had to go to

Nairobi and Dar es Salaam and look at buildings that were com-
149

pletely destroyed and go and visit families of those who had died

and go and visit the Kenyans in hospitals as a result of that. I

think we have a responsibility, if we are going to have our people

abroad, which I think is a sine qua non, that they are in safe and

secure buildings.

Nobody wants to make them gold-plated, and I would welcome

you going through this, but I think we do need to understand that

life is different and unfortunately, the beautiful embassies that I

love that are in the middle of cities are no longer safe. That is the

problem.

On the other peacekeeping operations, we are living in a world

that no longer is in tight blocks the way it was during the Cold

War. There are conflicts everywhere. Some of them are of great importance to the United States because of where they are located

geographically and some of them are because of the horrors that

can happen in humanitarian ways. I do not know any American

who can sit and watch people being macheted to death or starving

or in a position where they are killing each other.

And the peacekeeping operations are a great deal for the United

States. They are in areas where we do not want to do it all by ourselves and for 25 percent of the cost, with forces primarily from

other countries—most of these peacekeeping operations do not have

Americans in them—I think we get a very good bargain.

I believe the United States cannot turn its back on what is happening in Congo or in Sierra Leone or East Timor or Kosovo, for

that matter.

Senator HOLLINGS. Thank you, Mr. Chairman.

Senator GREGG. Senator Mikulski.

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

And Madam Secretary, I am going to welcome you to this hearing and just say a few—I will submit an opening statement for the

record but first of all, I am so proud of you, and I am so proud of

the job that you have done, and I certainly hope that the next

President retains you as Secretary of State so we can continue the

foreign policy leadership we have had.

I will not turn this into a New Hampshire primary but I am——

Senator GREGG. I have been through one. That was more than

I needed.

Senator MIKULSKI. I believe you have brought extraordinary competency and experience to your post. You understand the elements

that transform the world. Most of all, you have put American values into action. You have used your communication skills here and

abroad and you have worked tirelessly to bring security and peace

to an ever-changing world. So I think we are very grateful for what

you have done.

I will not add to the embassy building discussion. I think cost is

a factor, but so is security. You talk about Nairobi and your visits

there and where there were the terrible attacks on our embassy.

Many of the Foreign Service officers live in the State of Maryland and I am very conscious of their safety. We often say a grateful nation will never forget when we hand out our flags at those

funerals but I feel the way we do not forget is to make sure it does

not happen again. Make prudent use of taxpayer funds but know

that the real security needs to be maintained.
150

Let me go to a couple of questions in my time. First of all, I like

this pamphlet: ‘‘You Probably Never Think of Us.’’ This is great. It

should go everywhere, and we want to thank you for that.

WAR CRIMES TRIBUNAL

I would like to ask a question about the issues related to—Senator Hollings raised the peacekeeping issues but I wonder if you

could share with me something on the war crimes tribunal because

one of the most important aspects is being able to follow up in

terms of the U.S. plan to continue to give funds to war crimes tribunals.

Would you share with us your thoughts on that? This is something that the women of the Senate have worked with Senator

Specter and Senator Gregg and Senator Hollings on.

Secretary ALBRIGHT. Yes. First of all, I am very proud of the fact

that when I was Ambassador to the United Nations, we were able

to set up the war crimes tribunal. Originally it was set up for

Yugoslavia and then widened to Rwanda. The purpose of it really

is that in order for there to be reconciliation ultimately in any of

these countries, it is important that individual guilt needs to be assigned so that the collective guilt can be erased.

The tribunals themselves, I think, are operating well in terms of

the numbers of indictees and people who have stood trial.

I know that the women in the Senate have been very interested

in this. I had formed this very strong caucus when I was ambassador in New York with six other women—we were known as the

G–7—in New York and we managed to get women judges on the

war crimes tribunal, one of whom was an American, Gabrielle

McDonald, because so many of the crimes had been committed

against women. When rape was finally seen as a crime of war, that

was a very important step forward.

So the war crimes tribunals are now working actively. Trials are

going on. They operate in The Hague and they continue to need our

funding. I believe they are a very new and important part of how

the international system works. I will get you the exact numbers

of indictees.

Senator MIKULSKI. Thank you very much. I know this is something again that Senator Specter convened some conversations with

the chief judge of the war crimes tribunal. We have really enjoyed

the support of the men of the Senate as we have really looked at

war crimes in a way that really reflects the brutality that is done

to civilians.

CYPRUS

I want to ask another question related to policy. This is an issue

that has been going on for many Presidents, which is the Cyprus

question. I know when Ambassador Holbrooke took it on as a special envoy, we thought his significant muscular approach to diplomacy would help resolve this issue. And I wonder now—yet there

is one more meeting; there is one more process, and yet Cyprus remains divided. I wonder what you think are, number one, the prospects for a settlement, and number two, if there is anything we

should be doing to encourage and facilitate that.
151

Secretary ALBRIGHT. Well, the Cyprus issue has been with us for

a long time and one of the peacekeeping operations is the one that

is there, UNFICYP [United Nations force in Cyprus]. I think many

of you have been to Cyprus and you have seen the island divided

by the green line and on one side it looks like technicolor and on

the other, black and white.

At the current stage, we have gone back and forth in the kinds

of talks that are most useful and it turns out sometimes muscular

diplomacy is not the kind that works; sometimes it does. And I

think that we are now involved in different kinds of talks, which

are proximity talks, under the auspices of the United Nations— they just finished a set in Geneva. There is going to be another set

of talks in May in New York. We continue to be facilitators in trying to get a comprehensive settlement.

The United Nations and the parties have agreed not to engage

in any public discussion about the talks and I think frankly that

is helpful because they are moving forward. We support that approach and we are going to keep working with both parties in this.

Senator MIKULSKI. Do you think we can get this done before the

end of the Clinton Administration?

Secretary ALBRIGHT. I wish, but I cannot make a prediction on

it because it is one that we all care about a great deal but it depends on how these talks go. We wanted to have 1997 be the year

of Cyprus and this is one of those long-running unfortunate conflicts—but we are working hard on this, Senator.

Senator MIKULSKI. Thank you very much. Madam Secretary, I

could ask lots of questions. We have a vote. I am going to yield

back any time I have in the interest of maybe accommodating Senator Lautenberg.

Secretary ALBRIGHT. Thank you for your kind words, Senator Mikulski.

Senator GREGG. Senator Lautenberg.

Senator LAUTENBERG. I, too, want to issue kind words, Madam

Secretary. I join with Senator Mikulski in expressing my admiration for a job extremely well done under very difficult circumstances. And it is not your fault, but it seems that the portfolio

continues to expand, both in magnitude and in dispersion. It does

not get easier.

One of the things that I think we are obliged to do is to make

sure that we take care of the people that we send abroad to represent us, and the CJS Subcommittee funds some of the most important, and often overlooked, elements of the international affairs

budget.

The one thing we have to look at, and I really do respect the inquiry of the chairman, in terms of the costs for doing these things

because I think it ought to be aired. I do not know that we can

come to a conclusion before we really do an in-depth analysis, but

I know one thing, that the human values, costs for life, the fathers,

mothers, brothers, sisters that we send to represent us I think is

not terribly different than those that we send to represent us on

the battlefield.

The one thing we do, and I take great pride in it, is we rarely,

rarely send our troops anywhere without the infrastructure necessary to protect them, even down to the nutrition, you name it.
152

And we make mistakes. These are huge, complicated exercises. But

the intent is always to provide the best in terms of security that

we can.

And frankly, I have to tell you something. I do not see it much

different with diplomatic personnel abroad. When we ask people— this is a great personal sacrifice in almost every case. People do it.

They do it, I think, zealously, fully committed to their responsibilities, proud to represent their country, but it is a significant personal inconvenience—separation from families, et cetera.

And I think the least that we ought to do is make sure that we

do whatever we can to protect their lives and their well-being.

Now, I was recently in Australia and I went through Embassy

Row there. By the way, if anyone wants to be an ambassador, that

is one incredible place to have to live. It is a very nice embassy facility. But the fact of the matter is that if you look at that Embassy

Row and you see the countries represented there, a lot of these

structures are what I would call magnificent. And if we want a

bare bones American presence in places, I think we have to think

of the consequences. We are a great, powerful Nation in the world

but it does not mean that we have to throw our money away. And

maybe we have to review our policies about what kind of companies we bring in to construct these facilities.

Are there still prohibitions, Madam Secretary, against native

personnel for nonsensitive jobs in our embassies?

Secretary ALBRIGHT. Well, we have Foreign Service nationals

that work in our embassies who are doing a lot of different work.

In terms of the contracting, I think we have to be exceptionally

careful, depending upon where we are.

Senator LAUTENBERG. But there are no limitations on the number of—— Secretary ALBRIGHT. Of Foreign Service Nationals—— Senator LAUTENBERG. Yes.

Secretary ALBRIGHT. No. I mean they are some of our best workers.

Senator LAUTENBERG. I thought that for some time we were really trying to shy away from employing local folk because of concerns

about security.

Secretary ALBRIGHT. It depends on the job and the country.

Senator LAUTENBERG. Well, in any event, I hope that we will be

able, Mr. Chairman, to support these programs. All the questions

are legitimate about cost but I remember the Moscow embassy and

the not-so-funny joke that happened there when we rebuilt and we

rebuilt with the same weaknesses that the original facility had and

spent a ton of money.

One cannot deny the threats that come from terrorist activity, be

it against our embassies in Dar es Salaam or Nairobi or against

important facilities and structures within this country, like in

Oklahoma City or the Trade Center. These are very real threats

and I do not think we dare take them lightly.

So I encourage you, Madam Secretary, to continue to make the

case as you so skillfully do, and the value of these that goes beyond

simply and not excluding the dollars and cents side of the thing.

So I think the case has to be made for the value of that impression,

that marketing facility, that home, that structure that stands as
153

sovereign American territory. I think we have to be exceptionally

careful there.

Mr. Chairman, I ask unanimous consent that my full statement

be included in the record and I would ask simply this.

[The statement follows:]

PREPARED STATEMENT OF SENATOR FRANK R. LAUTENBERG

Mr. Chairman, thank you for holding this hearing to aid our consideration of the

fiscal year 2001 budget request for the State Department.

The CJS subcommittee funds some of the most important and often overlooked

elements of the international affairs budget:

The costs of personnel and operations for the State Department and our embassies and consulates abroad, embassy security and construction, contributions to

international organizations and peacekeeping, exchange programs, international

broadcasting, and other important organizations such as the National Endowment

for Democracy.

The Overseas Presence Advisory Panel, in its excellent report, has made a number of important recommendations to improve State Department operations. I hope

you will be able to assure us, Madam Secretary, that you are taking these recommendations seriously and will put many into practice.

America’s diplomats are truly our first line of defense, helping to shape the global

environment, foster positive changes, and avert conflicts where possible. We need

to ensure that our Foreign Service Officers are selected and trained well, at every

stage of their careers, and have the tools and resources they need to function effectively.

While I may raise questions focused on areas where I believe we could do better— like training, personnel management, and the effective use of embassy construction

funds—I want to assure you at the outset that I believe you have managed the State

Department well and I am inclined to support your budget request.

Mr. Chairman, I look forward to hearing from the Secretary and engaging in a

thorough consideration of the State Department budget request.

Thank you.

KOSOVO AND BOSNIA

Senator LAUTENBERG. In Kosovo, as in Bosnia, we just cannot

seem to establish a multi-ethnic society. The violence between the

groups is so obvious. I am concerned about escalation or resumption of military conflict there.

Is there anything more you think we can do to help bring these

people together besides simply providing security services?

Secretary ALBRIGHT. I will answer but can I just say one more

thing about the diplomats? I think people have a sense that our

diplomats are out there in striped pants at receptions. Basically, as

I travel around, these are very hard-working people who often live

in substandard conditions. When I was in Moldova, our ambassador there was washing dishes in the bathtub.

There are some big, fancy places that are great but there are an

awful lot of places that are not. Our diplomats are the first line of

defense and I really appreciate your comparing them to the military because I think that they deserve that kind of comparison and

that kind of treatment. I invite people to come down and look at

our memorial wall in the State Department of the number of diplomats that have died in the service of our country.

On the question of Kosovo, first of all, let me talk about Bosnia

because I think that there, there is movement toward increasing

multi-ethnic cooperation. The various central institutions are working.

And then as you know, in Croatia, they have just had democratic

elections and chose a democratic prime minister. The fact that they
154

are elected there is going to have an effect on Bosnia because President Tudjman supported the Bosnian Croats in a separatist way so

that they would not be part of the federation. What has happened

is that President Ejup Ganic and Prime Minister Rachanhar are

talking about not supporting them and encouraging them to be a

part of the federation, as well as saying that the Serbs that fled

out of Croatia would be welcomed back. So that itself sends a very

important signal.

In Kosovo, what the civilian administrator is trying to do there

is to create more and more of the joint kinds of administrative

councils and start registration for elections so that the minorities

will be respected in various areas. I think the word multi-ethnic is

harder to talk about for Kosovo because the Serbs are really a minority there, so it is a matter of respect for minority rights.

But I think we have to push on projects where they work together or schools where they learn together, and that is the purpose of the civilian implementation and for which we are asking

money in the Kosovo supplemental.

Senator LAUTENBERG. I will close with just a reminder. Whenever I hear people ask the question, ‘‘Are we to be the policemen

of the world?’’ and ‘‘How long will we have to be there?’’ it is an

obvious but sometimes necessary reminder that we are in Japan 50

years later, in Germany 50 years later, South Korea, 50 years

later, and we are there for a reason. We are not there because it

is fun to serve in these places that far away from home. It is a

tough task. But we have an interest, a national interest, in making

sure that these areas remain stable.

And so it is going to be. If you are a leader, you are a leader.

And when you have a leadership responsibility, you have to fill it

in ways that are not always so obvious. And ours, I think, is to

make sure that the American presence is there to say we are going

to follow through on our commitments.

Once again, my commendation, Madam Secretary. You and I are

in the twilight of our careers here but I just heard Senator Mikulski ask you to continue. She may need the permission of the next

President, but other than that.

Secretary ALBRIGHT. Thank you, Senator.

Senator DOMENICI. Madam Secretary, it is nice to be with you.

Secretary ALBRIGHT. And with you, Senator.

INTERNATIONAL LAW ENFORCEMENT ACADEMY

Senator DOMENICI. I am going to start with a couple of parochial

issues and then move to a couple of others. First, I want to say to

you that there is a personal frustration of significant magnitude between your Department, the Justice Department and this Senator

regarding the International Law Enforcement Academy, called

ILEA. I just want to say, you know, we instructed the State Department that that facility should be placed at the facility in

Roswell, New Mexico.

I met with Eric Holder for an hour 5 or 6 months ago and with

people from your shop and they were going to work something out.

I imagine they were worried about this hearing, so within the last

couple of days they have sent me a letter. The letter, as I see it,

did not accomplish much. It certainly is not acceptable. But it took
155

5 months for that letter and they are hounding my office for an answer within hours.

Well, there is no answer other than that is not what we intended

and that will not work. I do not expect you to tell me how it is

going to work but I just want to remind you that we did struggle

up here and we did suggest that it be located there in a complex

that is surplus for all intents and purposes, and rather decent. I

believe something has to be worked out, and I would just ask you

one more time whether you and the Justice Department and Eric

Holder as their negotiator could go back to the table and try to get

us something that is more acceptable. I hope you would do that and

I await your answer.

Secretary ALBRIGHT. I will try, Senator. They have really worked

on this and I think that the proposal that they made is one that

we thought would go toward meeting what you wanted, that we intend to train U.S. police for U.N. civilian police missions there and

anticipate 500 to 700 trainees a year at a cost of $3 to $5 million

at that place.

But if this does not meet your—— Senator DOMENICI. It does not.

Secretary ALBRIGHT. Okay.

Senator DOMENICI. I would like very much to consider that today

you are saying you will try.

Secretary ALBRIGHT. I will, sir.

Senator DOMENICI. Let me just ask about one more item that is

parochial with reference to my State and Louisiana and then I will

move away from that.

ANTITERRORISM ASSISTANCE PROGRAM

I would like to raise an issue with you that is not directly under

the jurisdiction of this subcommittee, but I will not be able to ask

you the question elsewhere. It has to do with the anti-terrorism assistance program. It has been extremely successful in training over

7,000 law enforcement security officials from over 40 countries in

techniques and theories of combatting terrorism.

Now, to provide the necessary logistical support and extensive

training and the ranges that go with it, Louisiana State University

has partnered with their Academy for Law Enforcement and with

the New Mexico Institute of Mining and Technology and their expertise in terrorism. I would like to note that the State Department’s anti-terrorism assistance program has benefited, from what

I can tell, substantially from the infrastructure investments made

by these institutions.

Now, will the Department of State continue, if this program is

needed, to take advantage of these sites for training under the

ATAP program?

Secretary ALBRIGHT. I know that we have benefited, sir, but I

cannot answer the question. I will get back to you on it.

Senator DOMENICI. All right. And while we are at it, I will pose

two others. What is the current training schedule? And another

one: the subcommittee has not yet received the full budget request

in the form of budget justification as to what is proposed for ATAP

in the 2001 budget. I wonder if we could have that.

Secretary ALBRIGHT. We will get that to you.
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Senator DOMENICI. Thank you very much.

WORLD TRADE ORGANIZATION AND CHINA

I wanted to ask a question because I have not heard your views

yet and it is obvious around here that it is the basic discussion regarding the WTO [World Trade Organization] and China. With the

white paper and the rather startling statements about the right to

use force if necessary to bring about reunification in Taiwan, how

do you and the President expect Congress to delink trade from this

threatening behavior?

Will the administration push a vote on permanent normalizing

of the relations with China—this is the second question—if Europeans have not come to an agreement with China? Would you answer the first one first, however?

Secretary ALBRIGHT. Sure. First of all, let me—I think we have

to separate out what it is we are trying to do with China. We believe that it is important to engage with them. Even though we disagree on a whole host of issues, they are a major power not only

in the region but increasingly globally, and it is essential that we

carry on a, as I have called it, a multi-faceted relationship with

them. So for national interest reasons, I think it is essential to deal

with them.

For economic reasons, we believe that permanent [Permanent

Normal Trade Relations] PNTR is important. They have access to

our market. We want to have access to theirs and we think that

the WTO deal that was negotiated very painstakingly is good for

U.S. exports and for our workers and for farm interests. It just

seems fair that if they can be in our market, we should be in

theirs.

We believe that the timing is important to get this done early.

And the truth is that there will at some stage be a European deal

and I think that whoever—the way the WTO works, you get the

best deal if you are a part of it. And we think that we have a good

deal that the Europeans probably will not be able to get beyond,

but we should work this on our timing, is the sense that I have.

I know that a lot of people have concerns about the human rights

issues in China. We have sponsored a resolution in the U.N.

Human Rights Commission to condemn China and I think that

that makes our point very clear. I also think that for those who

care about human rights, the opening to China through trade and

business is another way to make our points known.

On the issue of the white paper, I think that we have made quite

clear that the issues between Taiwan and China have to be resolved peacefully. Our concern over what they have said is we reject the use of force as far as dealing with that issue and we think

that the Chinese statement is counterproductive to creating the

kind of atmosphere which is necessary for cross-strait dialogue to

go forward. We have made that point quite clear to the Chinese.

Senator DOMENICI. Let me ask, do you think the white paper

states a position regarding Taiwan and the use of force that is different from China’s position heretofore?

Secretary ALBRIGHT. They have basically said before that they

want to resolve it, that they do not have a lot of time and they
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have, at various times, made clear that they have not given up the

use of force.

I think part of the issue here is the timing of this—it was difficult to determine why they did this at this time. We see their

statement as counterproductive, but we have pressed them on the

idea that the resolution of this has to be peaceful.

Senator DOMENICI. I assume you have evaluated the situation on

the Hill as being more affected by the statements in the last white

paper regarding Taiwan than any other single issue. I think, from

what I feel around the Senate, the Senate might have a stronger

position toward approving PNTR. There are a few who would be

natural to approving it under their normal trade positions that are

not doing it, and it is because of the Taiwan situation.

I assume you know that and you know that about the House.

Secretary ALBRIGHT. Yes. I think, Senator, the very important

point here, and I know that it is hard to do, is to keep these issues

separated. The WTO accession is, we believe, something that works

in our favor and is worth doing for the national and economic interests that I have stated. And it brings China into the WTO rule system, allows us to bring trade disputes to that mechanism, and it

is an advantage to us.

It does not mean that we are not concerned about Taiwan and,

as you know, the Taiwan Relations Act does, in fact—we have obligations in that, which we will continue. But I think for those who

are trying to link these subjects, they should be looked at separately.

Senator DOMENICI. I have a series of questions regarding the proposed Counterterrorism and Security Training Center. I will just

submit those and if you would answer them, I would appreciate it.

Secretary ALBRIGHT. We shall do that, yes, sir.

Senator DOMENICI. And then regarding the year 2000 across-theboard reduction, albeit small, I have a series of questions for you

to answer for the record as to what you actually did in effecting

that across-the-board reduction on projects and accounts and I will

detail what I would like. I hope you would expedite your answers.

Secretary ALBRIGHT. We shall do that.

Senator DOMENICI. I note the presence of the chairman of the full

committee and whatever other questions I have, I will submit for

the record.

Secretary ALBRIGHT. Thank you, Senator.

Senator STEVENS. Madam Secretary, thank you very much for

your courtesy meeting with me on other matters. I just dropped by

to thank you for that courtesy. I have no questions right now.

USIA AND ACDA MERGER

I do think we have some problems because of the merger of USIA

[United States Information Agency] and ACDA [Arms Control and

Disarmament Agency] in terms of your Department. I hope we can

talk about that sometime. It does appear that—let me put it this

way—it is something I do not want to get into too deeply right now

but your Department has 18,000 employees, a secretary, a deputy

secretary, six under secretaries, a counselor, 37 assistant secretaries or assistant secretary-equivalents and 94 deputy assistant

secretaries.
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Justice, that has four times the budget and seven times the employees, has considerably fewer people on the executive supervisory

level than you do. I am not saying that we should mandate any

more than a review of it, but I do think that it calls for review to

see whether or not that structure that is in State now of such a

top-heavy senior policy-maker group is warranted in view of the

consolidation of those agencies with yours.

It is something we should look at and not get into any kind of

political wrangling about it, I am sure. If you add the additional

ambassadors-at-large and special representatives, coordinators and

special advisors to that list, it is a considerable number of senior

executives in the system, and that has a lot to do with the funding

problems of your Department, we think.

Secretary ALBRIGHT. Well, if I might say first of all, on USIA and

ACDA coming in, it has been remarkably important and good because having public diplomacy as a part of our daily policy activities has been essential in this world of information exchange.

And in terms of having ACDA inside, I think that as we talk

about the threats that face this country, proliferation is the number one threat to us and I think that having ACDA central to the

workings of the Department is essential.

In terms of the numbers, we currently have a review process in

place for various bureau requests for assistant secretaries and deputy assistant secretaries and we have an internal process of justification for the reasons that you have mentioned.

But in terms of comparing us to the Justice Department, there

are now, I think at this moment, 187 countries in the United Nations. This is a large world with many countries and many subdivisions and we need to have officers that are capable of dealing with

specific countries.

I would also state that whereas for 50 years we handled the

world in terms of the red versus the red, white, and blue, we now

have many countries that we must deal with individually and understand them better and I have a problem, frankly, that we often

do not have enough Foreign Service officers to do the job.

Then there is another whole thing that is happening. I think

there are certain countries or certain functions where we have been

legislated to have a special advisor or we need to have a special

negotiator.

So I would agree with you that in looking at charts, it looks like

a proliferation of top people, but I would be happy to justify them

with you because I think that we need them while going through

our own process of review, which we are doing.

Senator STEVENS. I am not indicating at all that we are going to

take any action through this committee, as far as I am concerned,

but I do think that the management structure of the Department

is very top-heavy in terms of the division of the money that you

have available. I know, and we have spoken about this, that your

Department has not had the increases it should have but with that

management structure—the money that you do have available is

going to the top side too much.

I think you ought to create a process whereby the structure is

reviewed and some of those positions are eliminated and put more

people into the process of being Foreign Service officers rather than
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assistant secretaries. Each of those assistant secretaries has a separate staff and it becomes a management problem, I think, in

terms of the money that is available.

Again, I just raise it from the point of view of an examination

of the departments covered by this bill. The division of money in

your Department, the management is significantly different than

the other two.

But I wish you bon voyage and success in your trip.

Secretary ALBRIGHT. Thank you.

EMBASSY SECURITY AND CONSTRUCTION

Senator DOMENICI. I have one last question.

The President’s request for embassy security and construction is

spread out over fiscal year 2000 to fiscal year 2005 and it totals

$4.7 billion. The Crowe Report has a list of recommendations and

it states that ‘‘The Department should look specifically at reducing

the number of diplomatic missions by establishing regional embassies.’’ That is a quote from the report.

While no one, including this Senator certainly, is asking you to

dramatically cut corners with reference to security for our diplomats overseas. I am on your side in terms of that. If we are going

to err, we ought to err on spending more, rather than less. But this

report recommends that we reevaluate all the embassies that we

have worldwide and decide which ones we really do need, in light

of the suggestions made in the report.

I would just ask, are there ways to reorganize some of the diplomatic efforts? Is that effort moving forward, since the receipt of the

report?

Secretary ALBRIGHT. Yes and no. Let me just say this. We have

an additional report done by Louis Kaden on overseas presence.

That report recommends universality of representation and the importance of right-sizing missions in every part of the world.

As you know, the embassies serve as platforms for other agencies

abroad. The right-sizing effort is to try to make sure that we have

the right mix of people in various embassies. And I am working

with my Cabinet colleagues to make that happen.

We also are looking at regional hubs that would be able to do a

lot of the support work, technology being what it is. As Nairobi has

been rebuilt, it is rebuilt to be a hub for East Africa and we are

looking at cost savings in that regard.

The other innovation that I think is most useful, that Ambassador Rohatyn in Paris has come up with, is to have these presence

posts where there are one or two people; for instance, Lyon was the

first one he came up with, so that we have some representation

there for business purposes.

So we are doing a review of what is the appropriate way to represent America in the 21st century.

SERVICE DELIVERY

Senator DOMENICI. I would just add by way of observation, to the

extent that your Department is service-oriented and there are

many things beyond service that you do—service to people, service

to institutions—the revolution that is occurring in the United

States and the world in terms of how productivity has increased in
160

the delivery of services is clearly known by everyone. That is one

of the reasons America is succeeding with such sustained growth—

we have high productivity increases in service businesses in America.

I would just suggest that such an evaluation of the service delivery in the State Department might be appropriate, also. It may be

that we are not moving ahead fast enough with new technology, as

fast as a major international institution in business that has 43 offices and has to serve 26 countries I just suggest that we do not

want the State Department to lag behind in terms of increasing the

productivity of your workers through innovation.

Secretary ALBRIGHT. I thank you for that, though I have had

some of the most fascinating discussions with people who are in the

lead in technology, and given the way that our appropriations process works and getting new computers and all that, there is no way

that we can keep up with the private sector. It is quite stunning.

You know, we just killed our last Wang computer a couple of years

ago.

So this is a serious issue and one of the questions that I spoke

with one of the CEOs of one of these amazing companies is whether we should not be leasing things or doing something so that we

can stay ahead of the curve. But we are trying to use it. Our visa

systems are automated. We have websites. We do all the kinds of

things we can.

Senator Mikulski pointed this out. I hope you will look at your

book in terms of things that we are doing as a service department.

Thank you.

Senator DOMENICI. Let me just close by saying some of us are

trying to get 2-year appropriation bills. That would help some. For

some of the equipment we probably ought to have 5-year budgets,

but we are not going to get there. We will have a major argument

this year and we might get 2-year appropriation bills and 2-year

budgets, which I think add a little bit to the capacity to be flexible.

Secretary ALBRIGHT. Well, we are asking for some advance appropriations in the building part because it makes it easier for us

to have multiple contracts and to try to buy land ahead of time and

try to take advantage of some of this. That is the reason for asking

for that. Thank you.

Senator DOMENICI. Good luck in your trip.

Secretary ALBRIGHT. Thanks a lot.

Senator DOMENICI. Thank you, Mr. Chairman.

Senator GREGG. Thank you, Senator Domenici.

Actually Senator Domenici and Senator Stevens asked two of the

questions I was concerned about. So following up on this technology

issue, we have in this committee tried to improve the technology

capability of the agency. Maybe you can give us an update as to

where you think you stand.

Secretary ALBRIGHT. Well, I think that we have made major

progress on this in terms of moving things forward. We are working off of the recommendations of the Kaden Report, the OPAP

[Overseas Presence Advisory Panel] Report, and trying to apply

knowledge management at overseas posts, use of Internet and

Internet-like technology, the development of common information
161

technology platforms. We continue to work on this. We have made

progress but we have to make more.

I can get you—I will get Under Secretary Cohen to provide you

with some more detailed information.

E-MAIL

Senator GREGG. What is the status of e-mail in the agency? Do

you yet have the capacity to communicate with people out in the

field?

Secretary ALBRIGHT. We do, but part of our problems always are

how do you do this with classified information and how you keep

classified and unclassified separate.

Senator GREGG. I understand. Well, we are still very interested

in making sure you are on the cutting edge of technology to the extent you can be. So if you have concerns, we need to know about

them because I think you will find the committee sympathetic.

Secretary ALBRIGHT. Thank you.

STAFFING

Senator GREGG. I also want to echo what Senator Stevens said

about staffing. We looked at this huge chiefs-versus-Indians situation and it does seem like there is an awful lot of chiefs and maybe

not enough Indians. You probably need a lot more Indians, a lot

more folks out there in the field than what you have, and a fair

amount of the costs are being absorbed by the large overhead of the

central office.

Obviously you have responded to that but it remains a concern

for not only the chairman of the full committee but for myself. Do

you have anything else you want to say on that?

Secretary ALBRIGHT. I know that you have been interested particularly in what is purportedly my office, which it really is not.

The Office of the Secretary, for instance, currently has 380 positions but only 17 of them are the ones that are affiliated with me

specifically. The Office of the Secretary has increased by three

since 1990.

So part of what the numbers are that surround the Office of the

Secretary generally is the Operations Center and the Secretariat.

Our Operations Center is up 24 hours a day, deals with every single problem that the world has to deal with. We are getting a letter

to you that goes into even greater detail on all of this.

Senator GREGG. You do not see that there would be some advantage maybe in reducing senior staff, which as Chairman Stevens

mentioned, is very high compared to other agencies, in exchange

for getting more junior staff on board, people out in the field?

Secretary ALBRIGHT. I think frankly we need both. All I can tell

you is that the under secretaries—I do not know which one you

would eliminate and I am asking for a new one or exploring the

possibility of an under secretary for security, for all the obvious

reasons.

And I think if you look at the list in terms of what needs to be

done, these are people that, given the complexity of the issues that

now are foreign policy, are highly important. I mean we have to

deal with the proliferation and technology issues. We have to deal

with the variety of human rights and global issues, such as climate
162

control. We have to deal with economics on a daily basis and with

political issues. We have to manage the department.

So that is what the top layer is and I think the assistant secretaries are then assigned according to functional or regional bureaus.

It is a big world with a lot of problems, and I think we have to

make sure we have the right mix. And I do go through this review.

We have a corporate board, so to speak, of the top people who are

reviewing the issue of the assistant secretaries and the deputy assistant secretaries.

But it is very much on our minds. I mean we are not into proliferation of people, but there clearly is a proliferation of activities

and the number of things that now are part of a foreign policy

agenda.

Senator GREGG. That is sort of Parkinson’s rule, though, right?

Secretary ALBRIGHT. But I think that you would not want us, for

instance, not to be involved in negotiations on open skies or on

hush kits or biotech food or human rights reports. I mean these are

all issues that now are foreign policy issues in one form or another.

We did not ask to have export licenses come back to the State Department but now review that on a case by case basis. There is a

whole host of technical issues that are now part of foreign policy,

and that takes people.

Senator GREGG. It is possible, as Senator Mikulski suggested,

that you may continue to be Secretary of State throughout this millennium but assuming you are not and assuming you are heading

into your last year, I would be interested—not now but as you reflect on how the Department could be changed, improved, adjusted.

I would be interested in that, structurally and operationally. It

would be very useful to us to have that sort of reflection.

Secretary ALBRIGHT. I would like to work on that with you. I

used to say, and I guess it was kind of presumptuous at the beginning of my term, to say that I was going to be the last Secretary

of State of the 20th century. I made that and I actually am the first

of the 21st.

I think that what I have been working on very hard with the

State Department is to create a department that is ready for the

21st century. We have gone through a lot of changes. I think the

reorganization that we did with all of your help has been useful

and important and we have to keep the process going. I mean it

is not ever a done deal. So I can assure you that we are reviewing

it and I will continue to do so.

Senator GREGG. It was Secretary Daley who said he was the

longest serving secretary of the 21st century.

TAIWAN AND CHINA

Just one last question for my own personal thoughts and background. What do you see happening—and this is nothing to do with

the operational side—what do you see happening with this Taiwan

and China situation?

Secretary ALBRIGHT. Well, I think that it is obviously one that

we are watching very carefully, but we have made quite clear to

the Chinese that we expect the Taiwan situation to be resolved
163

peacefully. That has been something that they had signed onto and

that should not change.

We have obligations under the Taiwan Relations Act. We will obviously continue to carry those out, and in our various dealings

with the Chinese, which are quite extensive, make very clear to

them that anything but a peaceful resolution of this issue is not acceptable.

Senator GREGG. Well, recent comments by members of the Chinese government appear to be very belligerent toward Taiwan and

even toward the United States. Do you view them that way?

Secretary ALBRIGHT. Well, I think that we have to assess the

context in which they are being given. We obviously are concerned,

but some of it has to do with elections in Taiwan, some with internal issues in China. China is a country that is examining its role

in the world. They have had as an agenda to get pieces, by getting

Hong Kong and Macau.

Taiwan has been a huge issue to them. It has come up in every

single discussion I have had with them over the years. They are

clearly much more aggressive about saying that Taiwan is a part

of China than they were like 4 years ago. But they know that the

only acceptable course here is a peaceful reunification and it has

to be through a peaceful dialogue. We have made that point clear.

Senator GREGG. You do not think they would ever use force?

Secretary ALBRIGHT. They know that it would be of the gravest

consequence to the United States.

Senator GREGG. Did we miss an opportunity in not agreeing to

WTO status for them a year and a half ago when the premier was

here?

Secretary ALBRIGHT. I think that there was not an agreement at

that stage, but there is now, and I think that we would miss a

huge opportunity if we did not give them permanent trading status

now because that is the way to make sure that we have access to

their markets, that they become a part of the international rulemaking system.

And while there was not a deal, we felt, last year, there is a very

good, painstakingly negotiated deal now, and I hope very much

that we can get permanent trading status done as soon as possible.

ADDITIONAL COMMITTEE QUESTIONS

Senator GREGG. Well, we appreciate your time, Madam Secretary. It is generous of you to come, and we will continue to work

with you on these issues and enjoy that opportunity.

[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 PETE V. DOMENICI

INTERNATIONAL LAW ENFORCEMENT ACADEMY (ILEA)

Question. Are you aware that Congress mandated in last year’s Foreign Operations bill that the Western Hemisphere ILEA ‘‘shall’’ be located at Roswell? Are

you aware that this is the third year in a row that language was included in the

Foreign Operations bill?

Answer. I am aware of the language in the fiscal year 2000 Foreign Operations

bill directing that the Western Hemisphere ILEA be established at Roswell. I am

also aware that in the previous years, as Congress focused on the future of the
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deBremmond Training Center and location of the Western Hemisphere ILEA, nonbinding language on this issue was included in the respective Foreign Operations

bills and reports.

Question. Does your Department intend to comply with the law? If so, when? If

not, why not?

Answer. The Department of State intends to comply fully with the law and has

taken concrete steps toward that end. INL funded a Treasury assessment of remodeling deBremmond, conducted by the Office of Artesia Operations (OAO) on January

11, 2000. A comprehensive, although preliminary, report of this assessment has

been forwarded to Senator Domenici’s office. The Department currently is engaged

in productive discussions with members of Congress and their staff regarding Senator Domenici’s and Congressman Skeen’s detailed proposal to establish an ILEA

for the Western Hemisphere in Roswell which would rely on a consortium of academic institutions for technical and administrative support. Once an agreement is

reached, the Department is prepared to begin work on the project immediately.

Question. Will you examine this alternative proposal, share it with your staff and

ask them to work with us this year in a timely manner to get this problem resolved?

Answer. Department staff and principals have reviewed your proposal and are

fully prepared to work hard to get this problem resolved. We believe we are in a

position to establish the type of academy in Roswell you describe in your recent proposal. We look forward to hearing from you regarding our proposal to broaden the

focus of the academy to include worldwide candidates from all ILEAs around the

globe.

Question. In concert with the Department of State, Louisiana State University

(LSU) and the Louisiana State Police Academy (LSPA) have used discretionary

funds to accomplish estate acquisition and construction activities designed to maintain existing facilities, and to meet the needs of an expanding ATA program. For

example, the State of Louisiana has recently purchased 1,400 acres of land at a cost

of $3.5 million for installation of ranges for the ATA program. It has provided land

and site preparation funds for the construction of a specialized firing range.

NMT has also invested its discretionary funds in the ATA program. It is in the process of a $5 million construction program to provide expanded billeting space for

ATA participants. It has spent over $100,000 to upgrade explosives ranges, and to

convert explosive ranges to small arms firing ranges. NMT has set aside over 5,000

acres of land to be available for ATA as maneuver space for ATA field training.

Lastly, NMT has made available the extensive explosives ranges operated by its Energetic Materials Research and Test Center for use by the ATA program.

The Department of State has also fully supported this cost sharing approach, and

used its funds to invest heavily in the training infrastructure for the ATA program.

At the LSPA facilities in the vicinity of Baton Rouge, the DOS has invested over

$400,000 for the construction of a close combat firing facility (‘‘shoot house’’), with

the land and site preparation costs paid for by the State of Louisiana.

In short, the benefits by use of the Cooperative Agreement between the Department of State and the state organizations of Louisiana and New Mexico have indeed

materialized. The total of the individual investments by each party to the ATA

training infrastructure has been funded in a first rate training complex and training

program that could not have been funded by a lone participant.

The State Department Antiterrorism Assistance Program has benefited from substantial infrastructure investment made by these host institutions. Will the Department of State continue to take advantage of these sites for training under the ATAP

program?

Answer. ATA has financed much of the infrastructure improvements that have

been implemented at these host institutions over more than ten years of program

training activity. For those not directly financed, ATA has indirectly subsidized

their construction through indirect cost rates and by utilizing improvements made

by host institutions. The training site of the New Mexico Institute of Mining and

Technology (NMT) at Socorro, NM will continue to be the exclusive site for ATA’s

presentation of the Rural Border Operations course, because it offers a unique rural

training environment that cannot be replicated in the Washington, D.C. area.

It should be noted, however, that NMT was already planning to build new

billeting to support other training programs supported by DOD and the international scientific community. ATA will not be the exclusive beneficiary of this new

construction.

The purchase of a 1,400 acre site in Louisiana was not meant solely for ATA purposes. The existing training facility near Baton Rouge was forced to close due to encroachment of residential areas, and a new site had to be purchased to replace it.

Question. What is the current training schedule?

Answer. The detailed schedule for the balance of calendar 2000 is attached.
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[CLERK’S NOTE.—The attachment was not suitable for production in the record.]

Question. The Subcommittee has not yet received the State Department’s full

budget request in the form of the budget justification documents. What is proposed

for ATAP in the fiscal year 2001 budget?

Answer. In fiscal year 2001, the State Department has requested a total of $68

million for the Anti-terrorism Assistance (ATA) program: $38 million for the training program and $30 million for the Center for Anti-terrorism and Security Training.

Question. What is the ‘‘Counterterrorism and Security Training Center?’’ Is it an

existing, operating facility or a proposed new center for the State Department?

Answer. The Center for Anti-terrorism and Security Training, or CAST, is a center to be established in the Washington, D.C. area that will bring under one roof

the majority of the State Department’s Anti-terrorism Training Assistance (ATA)

programs, which train foreign officials at 7 different locations throughout the United

States. Additionally, it could provide facilities at additional expense for the Diplomatic Security Services’ (DSS) in-service training program, which is currently conducted at 5 locations.

Bringing ATA and DSS training together will improve the interaction between DS

agents and their foreign counterparts, and it will enhance the ability of both groups

to protect more effectively U.S. personnel and facilities overseas. CAST is not an existing facility. The total cost of the CAST, depending on the site selected, will be

between $30 million to $50 million.

Question. Where is the State Department currently conducting most of its training?

Answer. The State Department provides training for foreign security officials in

anti-terrorism methods under the Anti-terrorism Training Assistance program

(ATA) at 7 different locations throughout the United States, including Georgia, Louisiana, New Mexico, Virginia, Washington, D.C., and Oklahoma. The Diplomatic Security Service trains U.S. Diplomatic Security Agents at five different locations in

the Washington, D.C. area.

Question. What has changed to drive the relocation of training?

Answer. Several factors are driving the State Department’s effort to consolidate

its Anti-terrorism Training Assistance program (ATA) under one roof at the proposed Center for Antiterrorism and Security Training (CAST).

The proliferation of terrorist groups and their increasing operational sophistication means the United States must increase its preparedness and capability to combat terrorism abroad. The core mission of the ATA program is to train foreign security services in securing U.S. personnel and embassies in host countries and in protecting Americans living and traveling abroad. This is our first line of defense

against terrorism overseas.

To meet these challenges, the State Department needs to increase its ATA training program from approximately 2,000 students per year to about 3,000 students

per year. This increase will require the State Department to manage ATA more efficiently and effectively.

ATA training is conducted at 7 locations throughout the United States. The State

Department does not have first right use at any of the facilities where it conducts

ATA training. As a result, some countries must wait up to two years to receive

training at existing locations because training space and facilities are very limited.

Training space is at or near full capacity at the 7 sites currently being used by

ATA. DSS cannot accommodate the requirement for adding approximately 1,000

ATA students per year with existing facilities. Moreover, course costs at many of

the current ATA training sites include overhead charges and/or tenant fees of up

to 20 percent. These costs reduce substantially the number of students the Department can train each year under the ATA program.

The Diplomatic Security Service is also stretched to capacity at its own in-service

training facilities in the Washington D.C. area. The State Department therefore proposes to establish CAST in the Washington, D.C. area to train most ATA students

and to provide DSS with facilities for in-service training. Training ATA students

and DS agents at a centralized facility in the Washington area will result in management efficiencies and cost savings.

CAST also will foster senior-level interaction between foreign security officials and

U.S. counter-terrorism and law enforcement officials located in Washington, D.C.

This interaction cannot be accomplished while ATA training is dispersed at seven

locations throughout the United States outside Washington. This interaction builds

political will and strong working relationships between U.S. and foreign security officials, which are crucial to deterring and preventing terrorist attacks, and effectively managing terrorist incidents.
166

ATA students will also benefit from interaction with U.S. law enforcement agencies and military units which share responsibilities for securing U.S. personnel and

embassies overseas. Training ATA students at the CAST in the Washington, D.C.

area will allow foreign security officials to interact with Washington agencies, such

as DS agents who are responsible for security at U.S. embassies, with Marine Corps

Security Detachment units which guard U.S. embassies, and with other agencies responsible for dealing with terrorist threats abroad.

Under ATA’s current training facility locations ATA students do not have the opportunity to interact with U.S. law enforcement agencies, who are responsible, like

their host-country counterparts, for securing U.S. personnel and embassies overseas.

Question. Can the current providers support more training?

Answer. Through current arrangements, additional instructors can be provided.

However current facilities have little remaining capacity.

The Department of Energy’s Nonproliferation and National Security Institute

(NNSI).—The temporary arrangement with DOE was made to alleviate a facility

shortfall until a centralized training facility can be established.

NMT, Socorro, NM.—The facilities at this location are adequate for current and

future requirements.

Question. Are you absolutely sure the current training provider(s) cannot provide

more training capacity?

Answer. Yes. As previously stated, our primary need is to access dedicated training facilities to meet our increasing training needs. Contractors can provide additional instructors, but existing facilities constrain additional training capacity.

Question. Can you show the proposal will be cost effective by some cost comparison/analysis?

Answer. Because of the combined redundancy of administrative and logistical support resources at the existing training facilities, it will be more cost effective to provide these functions at a centralized facility. Additionally, the maintenance and operation of a single facility (such as utilities, custodial, and overhead), will be more

efficient with a consolidated facility.

Question. Do the current site(s) have the capability to conduct training JanuaryDecember?

Answer. Yes, the current sites have the capability to conduct training year round,

weather permitting.

Question. Can the proposed site conduct training January-December?

Answer. Yes, the proposed site will be able to conduct year-round training.

Question. Have your existing training providers failed to provide training because

of inclement weather or some other reason?

Answer. Weather can be a problem for all locations. In our experience, there have

been rare occasions where training has had to be suspended or delayed.

Question. What is the current community infrastructure support for the training

program i.e. community welcome, social activities, local community organization

support, police agencies support, shopping and entertainment activities? Compare

this with your proposed site. Can you assure us that community support will be enhanced by the relocation?

Answer. ATA has experienced outstanding community support at all training locations. Initial contacts with the state and local community at the consolidated sites

under consideration indicate that they are prepared to provide a quality support environment.

Question. Who currently provides instruction for your courses? Who will provide

instruction at the proposed consolidated training center? Are you adding Full Time

Equivalents (FTEs) for the consolidation proposal? What will you do if the program

receives funding cuts in three or four years?

Answer. With the exception of the official government agencies, all training is conducted by contractors. No change is contemplated for the consolidated training center.

Question. Can you compare salaries of support personnel for Baton Rouge and

Socorro as compared to your proposed location?

Answer. The majority of ATA costs for support personnel at Baton Rouge, LA and

at Socorro, NM are based on existing contractor arrangements. The proposed Washington location will be supported by a combination of existing direct-hire Department of State employees and contractors. By centralizing the ATA program in the

Washington area, the State Department will gain cost savings by eliminating the

need for some contractor personnel and by consolidating the duties of other personnel. Centralization will also allow ATA to gain cost savings by eliminating redundant administrative costs that are the result of operating 7 centers nation-wide.

Question. We understand that the Department of Justice has a program at Fort

McClellan. Using that as a model, have you done any cost comparisons for your pro-
167

posed site versus the existing sites? I would think that the bottom line for this subcommittee is to get the training, not just new infrastructure to maintain.

Answer. Cost comparisons have been prepared for the Fort McClellan Justice

Training Center ($17.9 million) and Indian Head ($23.2 million). This comparison

was conducted for training start-up costs only and excluded infrastructure repair

costs. The Fort McClellan Justice Training Center (JTC) will require additional investment in infrastructure, which includes repair of water, plumbing, and electricity

systems, as well as asbestos abatement and renovation of classrooms and dormitories. Additional capital construction costs are required for specialized training

facilities.

Fort McClellan’s distance from Washington would prohibit utilization by the Diplomatic Security Service and other agencies, who intend to co-locate their training

programs with ATA. ATA could conduct training at the JTC, but ATA capacity and

effectiveness would be diminished.

Question. In last year’s Consolidated Appropriations Act for Fiscal Year 2000

(Public Law 106–113), the President and the Congress agreed to an across-the-board

reduction of 0.38 percent in discretionary programs as part of an effort to ensure

that spending in fiscal year 2000 did not dip into the Social Security surplus. We

were successful in that effort, but in the process the Department of State had to

reduce program spending by $25.4 million in fiscal year 2000.

It appears from the Administration’s report on the implementation of the acrossthe-board reduction that most offices and programs within the Department took a

part of the reduction with 60 percent coming from two accounts—Diplomatic and

Consular programs (¥$10.6 million) and the Contributions to International Organizations (¥$4.7 million). Another $2.8 million was taken out of Embassy Security,

Construction, and Maintenance.

Madame Secretary, would you please provide the Subcommittee with the program,

project, and activity details underlying the across-the-board reductions in each program?

Answer. The International Affairs budget absorbed a total rescission of $86 million, approximately $72 million of which was cut from accounts under my direct purview, including both foreign assistance and State Department operations. Because

all of the programs in the International Affairs budget urgently need funding, the

0.38 percent rescission was applied equitably to most accounts. There are a few exceptions where accounts/programs had been a critical part of the final negotiations

between the White House and Congress on appropriations bills. These programs

were exempted or protected, with cuts made elsewhere within an account to permit

this. Those exemptions include: Funding for Wye implementation; U.N. arrears;

Funding for embassy security within the buildings and State operations accounts;

and Population funding.

The following table reflects the distribution of the across-the-board rescission:

[Dollars in millions]

ACCOUNT

Fiscal Year

2000 Enacted

Level

Rescission

International Organizations & Programs (IO&P) ............................................... $183.00 0.70

Development Assistance/Child Survival/DFA ..................................................... 1,943.00 8.29

AID Credit Programs .......................................................................................... 8.50 0.01

AID Operating Expenses ..................................................................................... 520.00 1.04

Inspector General (USAID) .................................................................................. 25.00 0.05

Freedom Support Act (FSANIS) ........................................................................... 839.00 3.19

International Disaster Assistance ...................................................................... 202.88 0.87

Support for Eastern European Democracy (SEED) ............................................. 535.00 2.03

Voluntary Peacekeeping Operations (PKO) ......................................................... 153.00 0.58

Economic Support Fund (ESF) ........................................................................... 2,815.10 22.91

International Military Education & Training (IMET) .......................................... 50.00 0.19

Foreign Military Financing (FMF) ....................................................................... 4,795.00 6.01

Nonproliferation, Anti-Terrorism, Demining & Related Programs (NADR) ......... 216.60 0.82

Inter-American/African Foundations (appropriated in DA) ................................ [19.40] [.07]

Migration and Refugee Assistance & ERMA ..................................................... 637.50 2.42

International Narcotics and Crime .................................................................... 305.00 1.16

State Programs .................................................................................................. 2,903.83 10.92

Educational & Cultural Exchanges .................................................................... 205.00 0.85
168

[Dollars in millions]

ACCOUNT

Fiscal Year

2000 Enacted

Level

Rescission

Other State Programs ........................................................................................ 63.52 0.26

Security & Maintenance of U.S. Missions ......................................................... 742.18 2.82

Contributions for International Peacekeeping Activities ................................... 500.00 1.90

Contributions to International Organizations .................................................... 885.20 4.70

U.N. Arrearage Payments ................................................................................... 351.00 .....................

Related Appropriations (e.g., Asia Foundation, NED) ........................................ 54.38 0.23

Total, Fiscal Year 2000 Appropriations ................................................ 18,934 .....................

Total Rescission .................................................................................... 71.95 71.95

Question. What was the maximum reduction taken from any program, project or

activity?

Answer. Generally, the 0.38 percent cut was applied equitably to most accounts.

In order to accommodate the few exempted accounts/programs, such as Wye implementation and U.N. arrears, cuts were made to other programs within an account

to permit this, with no account sustaining more than a 0.81 percent cut.

Question. Did the Department follow the provisions of the Consolidated Appropriations Act that no program, project, or activity could be reduced by more than

15 percent?

Answer. Yes. The rescission was applied to the overall account level, with no account absorbing more than a 0.81 percent cut. There were a few exceptions where

accounts/programs were exempted or protected, with cuts made to other programs

within an account to permit this. Those exemptions include: Funding for Wye Implementation; U.N. arrears; Funding for embassy security within the buildings and

State operations accounts; and Population funding.

Question. Did the Department follow the guidance of OMB that: reductions should

be taken from the least critical funding available to the agency; reductions should

be considered from funding above the President’s request; no reductions should be

taken that would require reductions-in-force (RIFs); and agencies should make targeted recommendations rather than across-the-board funding cuts?

Answer. I took OMB’s guidance under consideration when I decided how to distribute the rescission. But I did not follow every aspect of the guidance.

First, I do not know of any budget accounts I would call ‘‘least critical.’’ All of our

funding is urgently needed for pursuing a host of American interests, from fighting

narcotraffickers to immunizing children, to negotiating trade agreements to benefit

U.S. business.

Second, the overall appropriation for Function 150 was less than the President’s

request. Moreover, only a very few accounts were increased over the President’s request, and these were in areas such as assistance to Southeast Europe, or counternarcotics assistance, where funding was needed.

For this reason, the 0.38 percent rescission was applied equitably to most accounts under my direct purview, including both foreign assistance and State Department operations. In accordance with OMB’s guidance, we took steps to ensure that

reductions in operating accounts would not result in RIFs of Department personnel.

There are a few exceptions where accounts/programs were exempted or protected,

with cuts made elsewhere within an account to permit this. Those exemptions include funding for Wye implementation; U.N. arrears; funding for embassy security

within the buildings and State operations accounts; and population funding.

CHINA AND WTO MEMBERSHIP

Question. How do you and President Clinton expect the Congress to delink trade

from China’s threatening behavior in the world?

Answer. We cannot predict China’s future behavior, but deciding in advance that

China will inevitably be a foe is a prescription for a self-fulfilling prophecy. Alternatively, China’s integration into rules-based institutions of the international community, such as the WTO, make it more likely that China will become a responsible

member of the international community and play a constructive international role

in the future.

We appreciate the concern that many members of Congress have with regard to

China’s intentions toward Taiwan. Senior Administration officials, in Washington
169

and Beijing, have reinforced our abiding interest in the peaceful resolution of crossStrait differences. We have said that we reject the use of force or the threat of the

use of force to resolve the Taiwan question. We have stated again our policy in the

Taiwan Relations Act that we ‘‘consider any effort to determine the future of Taiwan

by other than peaceful means . . . A threat to the peace and security of the Western Pacific area and of grave concern to the United States.’’ We have urged China

and Taiwan to take steps that foster dialogue, reduce tensions and promote mutual

understanding. It is obvious that any aggressive military move by China would have

a devastating impact on U.S.-China trade and economic relations, in addition to any

other consequences.

We have also restored direct dialogue between our two militaries to promote better understanding of our intentions. In December, the Deputy Chief of China’s People’s Liberation Army General Staff was in Washington for defense consultative

talks. In early March, CINCPAC Commander Admiral Blair visited China. We want

to use the military-to-military dialogue to ensure that there are no misperceptions

of our intentions or our capabilities.

We believe that we must engage with China on important issues of both economic

security and national security. In that regard, China’s accession to the WTO—oneway concessions opening China’s markets to America’s farmers, businesspeople and

service providers—will be a positive development reinforcing our economic prosperity.

Specifically, with regard to PNTR, the President submitted a bill to Congress on

March 8 to extend normal trade relations to China on a permanent basis. The President will certify that when China becomes a WTO contracting party, ‘‘the terms and

conditions of China’s accession to the WTO are at least equivalent to those agreed

between the United States and China on November 15, 1999.’’ We are confident that

when the bill is considered on its merits, Congress and the American people will

realize that it is in the interest of the United States to pass PNTR. Only in this

way will we be able to enjoy the full benefits of China’s accession to the WTO.

Our broad agenda in China is designed to pursue American interests and to effect

change there. Trade and the WTO—along with our resolute across-the-board engagement to ensure American security—will help reinforce trends toward a more

open society in China.

Question. Will the Administration push a vote on permanent normal trading status for China if the Europeans have not come to an agreement with China over its

WTO membership.

Answer. The President has stated his intention to work with the Congress to extend permanent normal trading status to China as soon as possible. The President

submitted a bill to Congress on March 8 to extend PNTR and said he would certify

that when China becomes a WTO contracting party, ‘‘the terms and conditions of

China’s accession to the WTO are at least equivalent to those agreed to between

the United States and China on November 15, 1999.’’ Whatever final report is sent

by the China Working Party Group to the WTO Council in Geneva later this year

will therefore only improve our excellent bilateral agreement, which was made public on March 14. Thus, we believe when the bill is considered on its merits, the Congress and the American people will realize that it is in the interest of the United

States to pass PNTR. Only in this way will we be able to enjoy the full benefits

of China’s accession to the WTO.

EMBASSY SECURITY

Question. The President’s request for Embassy Security and Construction is

spread out over the 2000 to 2005 period and totals $4.7 billion.

The Crowe Report, in its list of recommendations, states ‘‘The Department should

look specifically at reducing the number of diplomatic missions by establishing regional embassies.’’

While no one is asking you to cut corners on providing security to our diplomatic

overseas, this report clearly recommends reevaluating all embassies and facilities

we have world wide and decide which ones we need.

Are there ways to regionalize some of our diplomatic efforts?

Answer. As a follow-on to the Accountability Review Boards chaired by Admiral

Crowe, the Overseas Presence Advisory Panel (OPAP)—of which Admiral Crowe

was also a member—looked at the possibility of a greater use of regional embassies.

OPAP, however, did not itself make a specific recommendation on regional embassies. Instead, the panel concluded that ‘‘a universal, on-the-ground overseas presence is more critical than ever to the nation’s well-being.’’

The Department of State strongly concurs with that conclusion. As OPAP confirmed, policy functions are best carried out through face-to-face interaction. We be-
170

lieve it is critical to retain the general principle of universality, except in limited

circumstances.

The Department continues to pursue the regionalization of support functions either overseas (e.g., the Frankfurt Regional Support Center) or in the United States

(e.g., the Fort Lauderdale Regional Center, the Portsmouth National Visa Center,

the Williamsburg Diversity Lottery Center, and the Charleston Financial Service

Center).

Question. I have been a proponent of changing our budget process in Washington

so that we move to a two-year budget cycle. My hopes would be that we could concentrate more in the off-year on oversight activities, something that seems to be

lacking as we devote more and more time to the appropriations process.

How do you think biennial budgeting would affect the State Department and the

spending and operations of the foreign affairs apparatus?

Answer. I am open to exploring the adoption of biennial budgeting practices, and

it may yield some benefits for the Department. On the plus side, we would gain a

better sense of how much money would be available over a longer period of time

(24 months) for managing the Department and our posts abroad. This would likely

benefit our planning and management efforts.

However, biennial budgeting would not remove the need for mid-year supplementals in order to respond to unanticipated contingencies. Supplemental requests

and budget amendments have become a fact of life in the international affairs area,

where we have very little contingency funding to respond to emergency opportunities and threats.

I am more concerned about the level of resources we are appropriated rather than

changes in the timing of when funds are appropriated. The biennial concept will not

work unless we seek and are appropriated adequate and realistic funding levels for

the work we know we must do.

QUESTIONS SUBMITTED BY SENATOR BEN NIGHTHORSE CAMPBELL

INTERNATIONAL EDUCATIONAL AND CULTURAL EXCHANGE

Question. The fiscal year 2001 budget proposed only $3.1 million for overseas advising. The fiscal year 1999 appropriated amount was $3.2 million, and the fiscal

year 2000 estimate was only $3.07 million. Overseas educational advising is a network of USIA-supported offices where prospective foreign students interested in

American higher education can secure information about pursuing educational opportunities in the United States. These centers are important elements of public diplomacy as they serve as gateways for ensuring a continued flow of students to the

United States.

As you know, other countries are competing aggressively to attract international

students to their universities, and last year, Prime Minister Tony Blair made an official statement highlighting the U.K.’s plan to capture a larger share of the foreign

student market.

Given our nation’s interest in maintaining its leading role in attracting foreign

students to our universities and institutions, can you tell us why State Departmentsupported overseas advising centers, which serve as gateways for ensuring the flow

of foreign students to the United States, are provided with only level funding?

Answer. We share the view that overseas advising centers make a critical contribution by encouraging students from other countries—often destined to become

the future leaders of their countries—to undertake university studies in the United

States. These students represent a major source of income to the United States; according to the most recent U.S. Department of Commerce figures, education is the

fifth largest U.S. service export amounting to more than $8 billion and resulting in

over 100,000 U.S. jobs. Even more importantly, the experiences of these students

while they are in the United States inform their understanding of our country, our

society, our culture, and our policies for the rest of their lives.

The Administration has attached high priority to educational advising, and to

international exchange programs in general, as a tool in support of the Department’s conduct of international relations. However, with very limited resources for

all international relations activities, we have had to set priorities. The Administration’s fiscal year 2001 request for overseas educational advising activities will enable us to sustain these programs at their current levels. We hope in the future to

have adequate resources for all of these important programs.
171

MIAS AND ISRAEL

Question. Can you please provide me an update of how these efforts to assist

Israel are proceeding?

Answer. The United States continues to pursue every serious lead to ascertain the

fate of IDF MIAs Zachary Baumel, Yehuda Katz and Zvi Feldman.

We deeply sympathize with the pain of all the families of the missing soldiers and

with their determination to continue the search for their sons. We will continue our

efforts to help them.

We are in close contact with the Israeli Government and the families of the MIAs

to help resolve this important issue. The President and I have raised this issue repeatedly with officials at the highest levels in Syria and with senior Palestinian officials.

DEVELOPMENTS IN BELARUS

Question. I remain concerned over violations of the principles of democracy,

human rights, and the rule of law in Belarus under the authoritarian leadership

of Aleksandr Lukashenka. The opposition in Belarus deserves our support as they

seek to overcome the legacy of Communism and authoritarianism and build a democratic society. In a particularly disturbing development, several prominent opposition leaders have simply disappeared.

Lukashenka has undertaken a series of measures designed to suppress Belarus’s

opposition. Peaceful public protests and demonstrations have been broken up by the

authorities and independent opposition newspapers are under constant pressure

from the government.

Of the resources available for the NIS countries, why has the Department allocated so little to support those programs aimed at strengthening independent media,

human rights, civil society, independent trade unions and the democratic opposition

in Belarus?

Are there funds from regional programs that the Department could make available this year for these purposes?

Answer. The Administration places a high priority on democracy-building assistance to Belarus. In fiscal year 1999, over two-thirds of the U.S. Government’s $12.36

million Belarus assistance budget was devoted to such programs—over $8 million.

A substantial portion of this assistance was provided in the form of small grants

directly to non-governmental organizations (NGOs), independent media outlets and

other democratically oriented organizations. The remainder supported capacitybuilding training and exchange programs in areas such as NGO development, political party-building and independent media.

For fiscal year 2000, the U.S. Government’s democratic and economic reform programs for the NIS have had to take an overall cut of $120 million due to the underfunding of the Administration’s NIS assistance request by 19 percent, increased earmarks, and substantial funding being provided for the Expanded Threat Reduction

Initiative (ETRI). As a result, the U.S. Government’s Belarus assistance budget is

expected to decrease by approximately $4.7 million. However, we are working closely with U.S. NGOs and other donors to ensure that independent media and other

advocates for democratic change in Belarus continue to receive the support that they

so urgently need. In addition, the State Department’s Bureau of Democracy, Human

Rights and Labor is in the process of identifying a limited amount of its own funding from its Human Rights and Democracy Fund for use in Belarus.

ANTI-CORRUPTION INITIATIVE

Question. Has the Department developed a strategy for advancing an anti-corruption initiative within the OSCE? Is the Department working with representatives

of the business community and other interested NGOs to gain support for such an

initiative?

Answer. Yes, the Department has developed a strategy to advance an

anticorruption initiative in the OSCE. The Istanbul Summit, at U.S. initiative, directed the Permanent Council to consider how the OSCE can contribute to this

issue. On March 3, a strong U.S. interagency team gave a comprehensive presentation on the results of Vice President Gore’s February 1999 Global Forum on Fighting Corruption to a working group established by the Permanent Council for this

purpose. We are working with the present and prospective Chairmen-in-Office to assure that corruption issues are fully and appropriately examined in OSCE seminars,

meetings and its Economic Forum. The Department of Commerce is participating

actively in this initiative, and we are consulting with interested NGOs. A member

of the board of the U.S. national section of Transparency International was a public
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member of our delegation to the 1999 OSCE Review Conference. Corruption is increasingly recognized as a significant challenge to the core purposes of the OSCE,

and helping members to control and combat corruption is becoming an important

continuing element of OSCE activities.

Question. Is the U.S. working closely with the Romanian Government to advance

an anti-corruption initiative within the OSCE framework?

Answer. Yes. On March 28–29, Romania will host a regional forum on fighting

corruption to be attended by 15 governments from Central, East and Southeast Europe. All are OSCE members, and we expect their regional meeting will help advance attention to corruption in the OSCE. The U.S. provided some funds to help

Romania meet costs of this conference. A strong interagency working-level U.S.

team will travel to Bucharest to observe this meeting, and Vice President Gore is

sending a message of support. This meeting follows the February 1999 Washington

Global Forum on Fighting Corruption, and will help prepare for the Second Global

Forum in the Netherlands in May 2001, which the U.S. will cosponsor. Romania

also participates in the Anti-Corruption Initiative of the Stability Pact, to whose development the U.S. contributed. Our bilateral assistance programs include significant anticorruption activities. As the prospective OSCE Chairman-in-Office for 2001,

Romania has indicated that it will actively promote OSCE attention to problems of

corruption. We will continue to consult closely with and support these OSCE activities on this subject.

Question. The FBI has played an important role in promoting cooperation among

the countries of southeastern Europe in combating organized crime. This is a matter

that has direct implications for law enforcement here in the United States given the

extensive network of organized criminal elements, including those located in that region and elsewhere in the OSCE region. How is the Department supporting the Bureau’s international operations, including those in southwestern Europe as well as

the International Law Enforcement Academy in Budapest?

Answer. The FBI, at State Department request, has participated in U.S. interagency and international assessments of organized criminal activity in Bosnia and

Kosovo. Such assessments add to available information needed to address organized

crime and its effect on the United States. The FBI has been very supportive of our

foreign policy goals in the region and has provided expertise in crime scenes,

forensics, and organized crime to assist special investigations in Bosnia and Kosovo.

The FBI serves as the lead U.S. agency at the International Law Enforcement

Academy (ILEA) in Budapest and provides a special agent as the resident director.

Since opening its doors in 1995, ILEA Budapest has trained over 4,500 criminal justice professionals and law enforcement officers from 26 countries. In addition to providing funding, the Department coordinate support to ILEA Budapest through an

interagency steering group, composed of representatives from the Departments of

State, Justice, and Treasury, to provide policy guidance and set program priorities.

ILEA is funded by the State Department.

OSCE MISSIONS

Question. Has the Department developed a strategy for closing down OSCE missions or are these activities turning into permanent outposts of the OSCE?

Answer. The Department has introduced a proposal at the OSCE to establish a

procedure for the orderly transformation and termination of missions. The OSCE

Mission mandates are reviewed for extension by the Permanent Council every six

months on average. Our goal is to focus attention on the review process, formalize

the discussion, and ensure that participating States carefully evaluate whether conditions in the host country have improved sufficiently to warrant a change in Mission size or its mandate.

In June 1999 the OSCE Mission to Ukraine was closed and replaced with a smaller project coordination center. More recently, the OSCE’s Skrunda Radar project,

which had successfully overseen closure of a highly sensitive former Soviet military

installation in Latvia, was shut down in December 1999. The OSCE also reached

consensus in March 2000 on reducing the staffing level for the Croatia Mission from

250 to 225, with additional reductions anticipated when further improvements are

noted. This action was in direct response to positive declarations and tangible actions taken by the new Croatian government in improving refugee returns and expediting citizenship claims. The U.S. is now exploring how the OSCE can acknowledge

progress made by the Baltic States in meeting their OSCE commitments.

Question. Nearly a decade after the OSCE Mission to Estonia opened, what, if any

aspects for the Mission’s mandate have not been fulfilled?

Answer. The mandate of the OSCE Mission in Estonia calls for the promotion of

integration and better understanding between the communities in Estonia. The pri-
173

mary focus of the Mission is to evaluate the inclusion of the sizeable Russian-speaking minority in terms of citizenship, language usage, social services and employment.

The Government of Estonia has made considerable progress in promoting the social integration of the Russian-speaking minority. It has fulfilled the thirty recommendations made by the OSCE High Commissioner for National Minorities, although implementing legislation remains outstanding in several areas, including

language. A national social integration program has been developed but not yet promulgated. We believe a continued OSCE presence is required, in a modified form

and for a limited time, to monitor implementation of these remaining issues, and

to ensure an accurate, objective assessment of the process of social integration,

which affects regional stability.

INTERNATIONAL POLICE FORCE IN KOSOVO

Question. Are our European allies providing their share of resources and personnel to accomplish these and similar tasks in Kosovo?

Answer. Our European partners are providing substantial contributions to the

U.N. International Police forces.

According to the U.N., as of March 23, European members of OSCE had pledged

1,645 officers (38.7 percent of the total number pledged) of which 1,145 had already

been deployed (42.5 percent of the forces deployed).

To address the lack of judges, UNMIK promulgated a regulation 2000/6, which

authorizes the appointment of international judges and prosecutors. UNMIK is now

in the process of appointing a small number of international judges and prosecutors.

Foreign contributions in this area will remain limited, as the legal experts sought

need to have a basic knowledge of FRY law and FRY legal procedures.

As of March 22, only two international judicial personnel were acting in Kosovo

(one American and one Swede).

We have urged our European partners to deploy their force more quickly and to

consider additional support for police and judicial system.

Question. Can you provide the Committee with a breakdown of commitments of

personnel and resources for Kosovo operations by each NATO country and those actually provided?

Answer. Attached is a chart describing pledges and commitments of NATO countries as of March 23.

This chart is based on data provided by the U.N., which change quite often.

CONTRIBUTIONS TO UNIP/KOSOVO 1 FOR NATO MEMBER STATES

Countries Pledge Current

Strength

Pledge of

Special Police 1

Belgium ......................................................................................... 5 5 ....................

Canada .......................................................................................... 100 92 ....................

Czech Rep ...................................................................................... 6 6 ....................

Denmark ........................................................................................ 20 26 ....................

France ............................................................................................ 78 78 ....................

Germany ......................................................................................... 420 268 ....................

Greece ............................................................................................ 15 .................... ....................

Hungary ......................................................................................... 10 10 ....................

Iceland ........................................................................................... 2 2 ....................

Italy ................................................................................................ 82 45 ....................

Luxembourg ................................................................................... .................... .................... ....................

Netherlands ................................................................................... 50 1 ....................

Norway ........................................................................................... 25 15 ....................

Poland ............................................................................................ 25 9 115

Portugal ......................................................................................... 70 25 ....................

Spain ............................................................................................. 41 35 115

Turkey ............................................................................................ 29 49 ....................

UK .................................................................................................. 60 60 ....................

US .................................................................................................. 550 489 ....................

1 Total authorized UNIP forces is 4,718 of which 3,593 CIVP0L and 1,225 Special Police.
174

UNITED STATES-EUROPEAN UNION HUSHKIT DISPUTE

Question. In April 1999, the European Union passed legislation that would introduce a number of restrictions on the use of aircraft equipped with ‘‘hushkit’’ noise

reduction devices within the EU. This regulation raises several major areas of concern for the U.S.—primarily that this initiative will undermine the International

Civil Aviation Organizations’s (ICAO) role as the premier standard-setting body for

aviation technical and environmental matters, and that the proposed regulation is

based on a design standard, which discriminates against U.S. manufacturers while

it protects European aircraft.

For over two years the U.S. has taken every possible step to express our concerns

over this new rule, to no avail. Although they have agreed to delay implementation,

the EU has refused to withdraw the regulation. Negotiations have reached an impasse.

Are you considering an Article 84 relief petition at ICAO to counter unfair EU

restrictions on the use of ‘‘hushkits’’ for U.S. civil aviation? Have you informed the

EU? Where does this stand?

Answer. Negotiations with the EU have reached an impasse. Therefore, the USG

decided to initiate a proceeding against European Union member states under Article 84 of the 1944 Convention on International Civil Aviation (the Chicago Convention) to establish that the hushkit regulation violates the Convention, and to force

its withdrawal. We filed our case with ICAO on March 14.

We have stated to the EU and to ICAO that we are prepared to agree to a suspension of the Article 84 proceedings if the EU suspends implementation of the hushkit

regulation. We are awaiting the EU’s response.

Our goal in filing the Article 84 case was to bring this issue back under the purview of ICAO, where it belongs. Noise standards should be negotiated multilaterally,

and ICAO is the internationally recognized standard setting body for aviation technical and environmental matters.

We are committed to the development of new noise standards within the ICAO

framework and are prepared to work with the EU and other ICAO member states

to ensure their implementation.

QUESTIONS SUBMITTED BY SENATOR FRANK R. LAUTENBERG

LIBYA/PAN AM 103

Question. Recent press reports suggest the Administration is considering easing

U.S. sanctions against Libya. Would you agree that U.S. sanctions should not be

eased until and unless Libya has met all the conditions set out in the U.N. resolution for lifting of sanctions, including payment?

Answer. Consistent with U.N. Security Council resolution 1192, U.N. sanctions

against Libya were suspended immediately upon notification by the U.N. Secretary

General to the Security Council that the Lockerbie bombing suspects had arrived

in the Netherlands for the purpose of trial before a Scottish Court in the Netherlands. Pursuant to UNSC Resolutions 731, 748, 883 and 1192, there are other issues

that must be addressed before U.N. sanctions can be permanently lifted. They are:

payment of appropriate compensation; Libyan acceptance of responsibility for the actions of its officials; renunciation of support for terrorism; and cooperation with the

investigation and the trial.

Along with other UNSC members, we will address the question of lifting U.N.

sanctions in accordance with the relevant Security Council resolutions. Permanent

lifting of the sanctions would require action by the Council. We believe the Libyan

government can and must meet the requirements provided for in the relevant UNSC

resolutions. If it does so, we would support lifting U.N. sanctions.

U.S. unilateral sanctions are distinct from U.N. sanctions and, in fact, pre-date

the Lockerbie bombing. They were imposed in 1986 by executive order under the

International Emergency Economic Powers Act in response to an unusual and extraordinary threat to the national security and foreign policy of the United States

posed by the policies and actions of the Libyan Government.

We are not currently considering lifting U.S. unilateral sanctions. In order to do

so, we would insist, first, that Libya comply with U.N. Security Council requirements, including the compensation requirement. In addition, we would expect Libya

to cease opposition to the Middle East Peace Process, which would be concrete evidence that it has ended its support for Palestinian rejectionist groups, and stop aggravating African regional conflicts.

Given Libya’s history of support for terrorist activities and intervention outside

its borders, we will proceed with caution.
175

U.N. DUES

Question. Last year, we adopted the Helms-Biden legislation authorizing payment

of part of our U.N. arrears. I, for one, believe the United Nations is critical to advancing U.S. interests and values, so we shouldn’t continue to jeopardize our leadership there by making unrealistic demands. How are the conditions in the HelmsBiden legislation being received in New York? What progress have we made in

meeting these requirements?

Answer. Our most pressing Helms-Biden issue is revision of the U.N. assessment

rate scales. We are working to mobilize the entire U.N. membership in an agenda

for comprehensive scale reform aimed at creating a flatter, more objective system.

Many Member States share our concern about the anomalies and inequities embedded in the current assessment methodology. Our efforts are focused on getting major

players at the U.N. to recognize that financial responsibilities are part and parcel

of playing a leadership role at the U.N. While certain of the least developed countries are not in a position to shoulder an additional dues burden, there are many

other U.N. Members that can and should pay more. Our proposals address this

problem in a transparent and fair way, and are aimed to ensure that all countries

with the capacity to pay are contributing their fair share. Along with other senior

Department staff, I have been raising this issue with senior foreign officials at every

opportunity, and Ambassador Holbrooke and his team have been meeting with 5– 6 delegations per day to explain our proposals and urge their support. This is complemented by a similar mobilization for scale reform in capitals through our embassies. Our message seems to be getting across, and while it is too early to predict

the ultimate outcome, we are cautiously optimistic about effecting significant change

to the assessment system.

We are also making good progress on other Helms-Biden provisions. Last year,

the U.S. regained a seat on the U.N.’s Advisory Committee on Administrative and

Budgetary Questions, allowing us to participate first-hand in review and recommendations on budgetary and other administrative proposals. There has been

progress at the U.N. on program evaluation, one of our major goals. We have also

achieved critical successes in three major U.N. specialized agencies—the Food and

Agriculture Organization, International Labor Organization, World Health Organization—where zero nominal growth budgets have been adopted, and where we are

working with Member States and the organizations’ Secretariats to move forward

in the areas of internal oversight and program evaluation. There is more work to

be done, but we continue to work toward implementation of these reforms which

will make these organizations more effective and allow us to pay our arrears, and

to do so in a way which enhances rather than erodes our relationships with the organizations and Member States.

OVERSEAS PRESENCE ADVISORY PANEL RECOMMENDATIONS

Question. The Overseas Presence Advisory Panel made a number of excellent recommendations. I understand the Department will soon submit a written report to

Congress on how it is following through on those recommendations. I would be

grateful if you could give us a preview of what the Department is doing, or plans

to do, on the basis of the Kaden panel’s report. In particular, what are you doing

to strengthen training for Foreign Service Officers at every level, including training

in personnel and resource management? What are you doing to ensure that we have

the right number of people with the right skills and responsibilities—from State and

other agencies—at our overseas posts? How are you planning to strengthen the role

of Ambassadors in overseeing U.S. relations with host countries?

Answer. The Department of State’s March 14 report to the Congress describes our

overall response to the OPAP report’s recommendations (copy attached). In answer

to your specific questions, we offer the following.

In response to the OPAP report and other management reports written in recent

years, State’s Foreign Service Institute (FSI) has undertaken a number of new initiatives to ensure that employees have access to comprehensive leadership and management training programs throughout their careers. A major keystone was the creation of a new Leadership and Management School on October 1, 1999. This new

school serves as the agency locus for programs covering the gamut of leadership and

management skills for the first-time supervisor, for managing crises, leading teams,

and managing change, to leading embassies and consulates overseas as Consuls

General, Deputy Chiefs of Mission and Ambassadors. FSI also has published the

Leadership and Management Training Continuum, which provides a blueprint for

developing leadership and management skills, identifying which courses are appropriate for each career level and the Civil Service competencies and Foreign Service

precepts they address. The Continuum has been distributed widely, both domesti-
176

cally and overseas. Management training modules also are incorporated in courses

throughout the FSI curriculum, beginning with the junior officer orientation program and extending through various tradecraft training programs. In addition, leadership skills are emphasized in the DCM/Principal Officer Seminar, Ambassadorial

Seminar, and Senior Seminar. A significant portion of our training initiatives are

focused on mid-career personnel, preparing them for the senior level responsibilities

they must be prepared to assume.

State and other agencies have formed an interagency committee that is looking

at how to implement OPAP’s right-sizing recommendations. The committee has

begun to conduct pilot programs at our missions in the following countries: India,

France, Georgia, Jordan, Mexico, Nigeria, and Thailand. The purpose of the pilots

is both to make recommendations for right-sizing these missions and to develop decision criteria that can be applied universally. The target date for completion of the

pilot program exercise is June 2000. We plan to request additional funding in fiscal

year 2002 and beyond to conduct right-sizing reviews and then proceed, on an interagency basis, with recommendations for right-sizing all agencies’ staffing at all posts

on the schedule proposed by OPAP: half within two years, and the balance in the

subsequent three years.

OPAP’s recommendations on Chief of Mission authority are commendable objectives which the Department of State will pursue. Given the time required to complete interagency review, coordination, and clearance, however, we will defer new

documentation outlining COM responsibility and authority until next year, when it

can be carried out as part of the normal transition to the new administration.

REPORT PURSUANT TO SECTION 607 OF THE ADMIRAL JAMES W. NANCE AND MEG DONO- VAN FOREIGN RELATIONS AUTHORIZATION ACT, FISCAL YEARS 2000 AND 2001, AS EN- ACTED IN THE CONSOLIDATED APPROPRIATIONS ACT FOR FISCAL YEAR 2000, PUBLIC

LAW 106–113

REPORT ON OVERSEAS PRESENCE—MARCH 2000

Introduction

Pursuant to section 607 of the Admiral James W. Nance and Meg Donovan Foreign Relations Authorization Act, Fiscal Years 2000 and 2001, as enacted in the

Consolidated Appropriations Act for Fiscal Year 2000 (Public Law 106–113), the Department of State is providing this report on the results of the Department of

State’s review of the report of the Overseas Presence Advisory Panel (OPAP).

The issues that OPAP addresses are familiar. Well before the report’s release, the

Department of State was working to adapt our foreign policy institutions to a new

era in which the international political landscape has changed, security threats are

unpredictable, many federal agencies are represented overseas, and the use of modern technology is essential. We have responded by undertaking an historic reorganization of the foreign affairs agencies, placing increased stress on the protection of

our employees and their families, improving training, upgrading communications,

emphasizing public diplomacy, and reaching out to groups—such as OPAP—for

independent advice.

The Department welcomes OPAP’s emphasis on the urgency of improving our

overseas mission infrastructure and capital plant, the importance of investing in

human resources, and the indispensable nature of universal representation. We

strongly agree with the Panel’s focus on the need to ensure stronger interagency

teamwork under chiefs of mission (COMs) abroad and the President and the Secretary of State at home.

OPAP makes recommendations in eight areas: Security; Right-sizing America’s overseas presence; Capital needs; Human resources and training; Information technology; Consular services; Administrative services; and Ambassadorial authority.

This report outlines the Department’s response in each area. It also provides supplemental information to address the specific elements required in section 607(b)(2)

of the Act.

Although this report reflects only the Department of State’s views and actions,

OPAP’s recommendations affect all USG agencies operating overseas. Improving the

effectiveness and efficiency of our overseas operations must be an interagency effort,

and will require as well the support of the White House and the Congress.

Security

OPAP fully endorses the recommendations of the Accountability Review Boards

(ARBs) that looked at the August 1998 bombings of the U.S. embassies in Nairobi

and Dar es Salaam. This includes the need worldwide for approximately $1.4 billion

annually over 10 years for sustaining capital improvements, security upgrades, and

maintenance.
177

The Department of State accepted the ARB recommendations after their 1999 release and welcomes OPAP’s endorsement of them. We continue to make solid

progress toward full accomplishment of the ARB recommendations. We support

OPAP’s call for a ‘‘pro-security culture,’’ including the recognition that security is

the responsibility of all employees from every agency and expanded security training

for employees and their families.

The President’s fiscal year 2001 budget request for the Department of State seeks

over one billion dollars for post security initiatives, including $500 million for new

diplomatic facility construction (of which $50 million is for USAID), $200 million for

additional steps to protect existing buildings from terrorist attack, and $344 million

for maintaining and enhancing operational security.

Right-Sizing America’s Overseas Presence

OPAP recommends creating a process ‘‘to right-size our overseas presence, reduce

the size of some posts, close others, reallocate staff and resources, and establish new

posts where needed.’’ Right-sizing would be carried out by a new, permanent Interagency Overseas Presence Committee chaired by the Department of State.

The right-sizing recommendations are a critical element in implementing an overarching framework to guide the allocation of interagency staff and resources in U.S.

diplomatic and consular posts. The President supported these recommendations in

a February 10 statement on OPAP:

I have asked the Secretary of State to lead a cabinet committee to implement the Panel’s recommendations regarding rightsizing. This process will

look at the full range of agency staff who serve in U.S. missions abroad,

and make recommendations about the appropriate levels and skills with

which we should staff our embassies in the new century.

In line with that, State and other agencies have formed an interagency committee

that is looking at how to implement right-sizing. As of early March, the committee

has begun to conduct pilot programs at the following posts: Amman, Jordan; Bangkok, Thailand; Lagos and Abuja, Nigeria; Mexico City, Mexico; New Delhi, India;

Paris, France; and Tbilisi, Georgia.

The purpose of the pilots is both to make recommendations for right-sizing these

posts and to develop decision criteria that can be applied universally. The target

date for completion of the pilot program exercise is June 2000. We plan to request

additional funding in fiscal year 2002 and beyond to conduct right-sizing reviews

and then proceed, on an interagency basis, with recommendations for right-sizing

all agencies’ staffing at all posts on the schedule proposed by OPAP: half within two

years, and the balance in the subsequent three years.

Capital Needs

OPAP recommends major changes in the way the U.S. Government builds, renovates, maintains, finances, and manages our overseas diplomatic facilities.

To address the issues raised in the OPAP report, we have established an interagency Overseas Facilities Working Group, chaired by the Department of State. It

will identify and implement secure facility solutions for our representatives overseas. The working group’s functions are to translate right-sizing decisions into facilities requirements and to examine the resources needed to support the facilities requirements of every agency present at a mission. The working group will serve as

a permanent body to address overseas facilities support needs. It will promote improved coordination and cooperation in planning, designing, and constructing or reconstructing new and rehabilitated facilities. It will also explore alternative financing mechanisms, including direct appropriations, capital rent, and the use of working capital funds.

Human Resources and Training

OPAP’s recommendations on human resources echo the results of the 1999 ‘‘War

for Talent’’ report prepared for the Department of State by McKinsey and Company.

The Department continues to pursue a variety of initiatives focused on recruitment,

promotion, quality of life issues, and training. For example, to broaden and diversify

the pool of Foreign Service Officer candidates, we have implemented a pilot Alternate Examination Program; and we have revised assignment policies for new tandem (i.e., married couple) hires. We have adopted revised time-in-class and timein-service rules and new language regulations. We are also piloting a 360 degree

performance review system to be used in the assignment process. To address Foreign Service spousal employment needs, we have negotiated 126 bilateral work

agreements with other countries and have issued new regulations governing homebased businesses overseas.
178

We have expanded the range of training programs. For example, we have established a School of Leadership and Management Training at the Foreign Service Institute (FSI); we have expanded ‘‘distance learning’’ that permits employees to receive training in the field as well as at FSI; we are providing foreign national employees with more professional training; and we are mounting an outreach program

to make other agencies aware of the training we can offer their employees and families as they prepare for their overseas assignments. Further, we agree with OPAP

that all employees and their family members—regardless of employing agency—

must receive required security training before reporting to post for an overseas assignment.

The President’s fiscal year 2001 budget includes $3 million to support OPAP-related training initiatives. Increased training in line with OPAP’s recommendations

will require additional funding in fiscal year 2002 and beyond.

Information Technology

The thrust of OPAP’s information technology (IT) recommendations is to put all

overseas USG employees from all agencies on common unclassified and classified

computer and telecommunications platforms.

As part of the right-sizing effort, we have established an Interagency Technology

Subcommittee, chaired by the Department of State’s Chief Information Officer, with

membership drawn from those Cabinet Departments that have a significant foreign

affairs presence overseas. The subcommittee will propose ways to apply Knowledge

Management to facilitate the sharing of vital information at overseas posts, to develop a common IT platform for all agencies at overseas posts, and to apply Internet

and Internet-like technology to support interagency collaboration and communication with the public. The subcommittee will define operations requirements, select

specific enabling strategies, and identify the funding required to implement those

strategies.

In cooperation with the subcommittee, State will conduct an IT pilot at two posts

to demonstrate how a common platform would work. We intend to select those two

posts from among those which actively participate in the right-sizing effort. The

President’s fiscal year 2001 budget includes $17 million in support of the recommendation for a common information technology platform. While the Department

will establish the appropriate backbone for a common platform, each agency at post

will be responsible for purchasing its own equipment.

Consular Services

OPAP recommends increased staffing flexibility covering consular positions to

meet surges in service demand; permanent retention by the Department of State of

all fee-generated consular revenue, uncoupled from the Department’s overall obligation authority; continued improvements in customer satisfaction; and an expanded

best-practices program.

We welcome OPAP’s proposal that State retain all fee-generated consular revenue.

We will discuss the OPAP fee retention recommendation with appropriate congressional members and committees, with a view toward proposing legislation in fiscal

year 2002 if practicable.

State is also studying OPAP’s recommendation to transfer the control of consular

positions overseas from the regional bureaus to the Bureau for Consular Affairs.

This is an issue that we have previously considered. There are good arguments both

for retaining the current organizational structure and for moving the positions to

the control of Consular Affairs. We have not yet made a decision on the final disposition of this recommendation.

The Bureau of Consular Affairs continues to pursue the customer service initiatives and the best-practices program already underway at the time the OPAP report

was prepared. We take enormous pride in noting that Consular Affairs is ranked

in the top quintile of customer satisfaction by the American public, as tracked by

the National Partnership for Reinventing Government Review Initiative. We welcome OPAP’s support for these efforts.

Administrative Services

The OPAP report’s recommendations on administrative services call for the aggressive use of technology, the regionalization of support functions, and a larger role

for foreign national employees.

The Department of State agrees with the thinking underlying these recommendations. The implementation committees looking at right-sizing, technology, and

human resources and training will consider each of these recommendations as it affects their portion of the whole in the course of their work.
179

Ambassadorial Authority

OPAP makes several recommendations related to chief of mission (COM) authority, including reform of the mission performance planning (MPP) process, an enhanced interagency role for deputy chiefs of mission (DCMs), and greater flexibility

in the organizational structure of diplomatic posts.

These are commendable objectives which the Department of State will pursue.

Given the time required to complete interagency review, coordination, and clearance, we will defer new documentation outlining COM responsibility and authority

until next year, when it can be carried out as part of the normal transition to the

new administration.

Supplemental Information

This section responds to section 607(b)(2) of the Foreign Relations Authorization

Act, fiscal years 2000 and 2001, as enacted in the Consolidated Appropriations Act

for Fiscal Year 2000 (Public Law 106–113), which requested specific information not

otherwise covered in the report.

Closing diplomatic facilities for security reasons

‘‘(A) Specify whether any United States diplomatic facility should be

closed because—(i) the facility is highly vulnerable and subject to threat of

terrorist attack; and (ii) adequate security enhancements cannot be provided to the facility; (B) in the event that closure of a diplomatic facility

is required, identify plans to provide secure premises for permanent use by

the United States diplomatic mission, whether in country or in a regional

United States diplomatic facility, or for temporary occupancy by the mission

in a facility pending acquisition of new buildings.’’

The Department reviews the security situation in individual countries on an ongoing basis and temporarily closes posts as circumstances warrant. Currently operations are suspended at two U.S. embassies for security reasons: Mogadishu, Somalia; and Khartoum, Sudan. The Somalia Liaison Office and Khartoum Embassy Office operate out of Nairobi, Kenya.

Immediately after the 1998 bombings in Nairobi and Dar es Salaam, the Secretary of State commenced a review of the security situation of overseas posts, requesting revised threat assessments and inviting recommendations on security improvements from all chiefs of mission worldwide. Soon thereafter, the Department

formed and led interagency security assessment teams. Equipped with technical experts and the most up-to-date information, these teams were dispatched to a carefully selected group of our most vulnerable posts around the world to conduct indepth security reviews and make specific recommendations. As a result, security at

posts worldwide was upgraded immediately and operations at the embassy in

Dushanbe were suspended for more than a year. Physical security recommendations

were provided on site to officials at all posts visited.

The Department used the 1998–1999 reviews, together with information from

State regional bureaus and other sources, in its plans for upgrading or replacing facilities overseas. Funding was included in the fiscal year 1999 emergency security

appropriation and the fiscal year 2000 budget to begin this process. As mentioned

earlier, the President’s fiscal year 2001 budget request for the Department of State

seeks over one billion dollars for post security initiatives, including $500 million for

new diplomatic facility construction ($50 million for USAID), $200 million for additional steps to protect existing buildings from terrorist attack, and $344 million for

maintaining and enhancing operational security.

Exploiting technology for staffing efficiencies

‘‘Outline the potential for reduction or transfer of personnel or closure of

missions if technology is adequately exploited for maximum efficiencies.’’

The Department has established a CIO level Interagency Technology Subcommittee to examine how best to exploit technology for maximum efficiencies, including potentially permitting the reduction or transfer of personnel. This subcommittee will work closely with the interagency right-sizing committee as it conducts its reviews of overseas staffing.

Regional missions

‘‘Examine the possibility of creating regional missions in certain parts of

the world.’’

The Department strongly concurs with the OPAP conclusion that ‘‘a universal, onthe-ground overseas presence is more critical than ever to the nation’s well-being.’’

We continue to pursue the regionalization of support functions either overseas (e.g.,
180

the Frankfurt Regional Support Center) or in the United States (e.g., the Fort Lauderdale Regional Center, the Portsmouth National Visa Center, the Williamsburg

Diversity Lottery Center, and the Charleston Financial Service Center). As OPAP

confirms, however, policy functions are best carried out through face-to-face interaction. We believe it is critical to retain the general principle of universality, except

in limited circumstances.

Special Embassy Program

‘‘In the case of diplomatic facilities that are part of the Special Embassy

Program, report on the foreign policy objectives served by retaining such

missions, balancing the importance of these objectives against the wellbeing of United States personnel.’’

The Special Embassy Program (SEP) is designed to permit the United States to

maintain a limited presence in locations where policy priorities and resource limitations preclude the need or justification for a larger embassy. This is not to say our

presence in these places is unimportant. SEP posts advance important foreign policy

priorities, consistent with the strategic goals outlined in the International Affairs

Strategic Plan and reflected in each post’s Mission Performance Plan (MPP) and

available resources.

There are currently 56 SEP posts. After the demise of the USSR, it was the policy

of the Administration to open new posts in the region immediately. Fourteen of the

SEP posts fall into this category—places where we may have only three or four policy objectives (compared to the 10 or more at most larger posts) but which are in

some ways more critical than those at larger posts. These are not the only SEP

posts with limited but important objectives. The SEP list includes Wellington, New

Zealand; Reykjavik, Iceland; Luxembourg; Vientiane, Laos; and Doha, Qatar, for example.

American staffing levels at SEP posts range from one position (Grenada) to 31

(Yerevan), with a limit of 35 U.S. Direct-Hire positions, including both State and

other agencies. While some of the SEP posts are small because of the hardship and

danger, many are small because of limited objectives. Where danger and hardship

are an issue, tours may be unaccompanied, to minimize exposing larger numbers to

security risks.

American Presence Posts

‘‘Examine the feasibility of opening new regional outreach centers, modeled on the system used by the United States Embassy in Paris, France,

with each center designed to operate—(i) at no additional cost to the United

States Government; (ii) with staff consisting of one or two Foreign Service

officers currently assigned to the United States diplomatic mission in the

country in which the center is located, and (iii) in a region of the country

with high gross domestic product (GDP), a high density population, and a

media market that not only includes but extends beyond the region.’’

Since the release of the OPAP report, the Department has opened three more

American Presence Posts (APPs) in France in addition to Lyon: Bordeaux, Lille, and

Rennes. We also have completed the congressional approval process to open an APP

in Toulouse. We have opened these posts through shifting personnel and funding

from the Embassy in Paris, and providing for the requisite additional funding. Our

experience to date is that the practical requirements of opening an APP preclude

the possibility of doing so at no additional cost to the US Government.

The U.S. mission in France is one of the pilot posts the interagency right-sizing

group will look at this spring. Over time, we anticipate that this effort will examine

candidates for APP status in other countries as well.

Conclusion

The OPAP report addresses a number of serious, long-standing issues with how

the USG operates at American embassies and consulates abroad. Some can be addressed in the short term. Indeed, in many cases the Department already had initiatives underway prior to the report’s release. A long-term commitment of resources,

however, is essential if we are to improve the way the U.S. Government operates

overseas. The Department of State’s commitment by itself will be insufficient.

Achieving the changes and improvements the OPAP report proposes will require the

active involvement of the White House, the Congress, and all other departments and

agencies. We are confident that we have put in place the initial framework that will

permit us, as part of the larger interagency and USG-wide effort, to address the full

range of OPAP initiatives over the next several years.
181

Question. It seems like every year we face a challenge for funding for the NED

[National Endowment for Democracy]. In my view, in the post-cold war world, with

so many nations in flux, and so many opportunities to foster democracy, human

rights and the rule of law, we have more need than ever for the NED. Would you

agree?

Answer. Absolutely. The NED plays a critical role in supporting grass roots democracy groups around the world.

I have been close to NED for a number of years—in the past as a Board member

of both NED itself and of NDI. I am very familiar with the important work it does

in carrying out its principal mandate of democracy-building.

Through its four core grantees, NED is able to build upon and expand the linkages between these organizations and their counterparts overseas. Without the

funding these core grantees receive from NED, they would be unable to carry out

many of their activities overseas. The focus of these programs is on the democracybuilding national interest of the United States.

Let me also note that the core grantees contribute approximately $7 million to the

NED-funded programs they carry out.

QUESTIONS SUBMITTED BY SENATOR BARBARA A. MIKULSKI

Question. What progress has been made in securing Israel’s position in the Western European and Others Group [WEOG] and in becoming eligible to serve on the

U.N. Security Council?

Answer. Israel’s exclusion from the U.N.’s regional group structure is unfair and

inconsistent with the principle of sovereign equality of member states enshrined in

the U.N. Charter. Correcting this injustice remains a priority for the Administration. Participation in the regional group structure is a critical element in any member’s effective participation in United Nations activities. Consequently, Administration officials, including the President and Vice President, have repeatedly engaged

the other members of WEOG to bring this issue to closure.

Enormous progress has been made and was reported in detail recently to the Congress in the annual report on this issue. We have secured EU agreement on Israeli

participation in the WEOG at the expert and political director levels. We now plan

to coordinate in New York and capitals with the other WEOG members to finalize

the implementing details that will allow Israel to assume its rightful place as a participant in the regional group structure. Throughout these efforts, we have coordinated closely with appropriate Israeli authorities and will continue to do so.

We hope to bring this matter to a successful conclusion within the next several

months and will keep the Congress informed of our progress.

Question. I understand that member countries of the Western European and Others Group need to agree unanimously on Israel’s ability to join the group. What is

the Administration doing to address Malta’s objection?

Answer. Decisions within the WEOG are made by consensus. The Administration

has made numerous interventions with all WEOG members to bring the issue of offering Israel temporary membership in the Group. The Administration was successful in its efforts with the EU and is now working to bring this issue to closure with

the remaining WEOG members.

Like some other WEOG members, Malta raised concerns regarding the need to

agree on the modalities for Israel’s participation as a temporary WEOG member.

Working closely with the appropriate Israeli authorities, we are fully confident that

mutually acceptable conditions will be agreed upon shortly to address those concerns.

SUBCOMMITTEE RECESS

Senator GREGG. The next subcommittee hearing will be on March

7 at 10 a.m. We will have the FBI, DEA, and the INS.

Secretary ALBRIGHT. Thank you very much, Mr. Chairman.

[Whereupon, at 10:50 a.m., Thursday, March 2, the subcommittee was recessed, to reconvene at 10 a.m., Tuesday, March 7.]

(183)

DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED

AGENCIES APPROPRIATIONS FOR FISCAL

YEAR 2001

TUESDAY, MARCH 7, 2000

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, Domenici, Hutchison, Campbell, Hollings, Inouye, and Lautenberg.

Also present: Senator Kyl.

DEPARTMENT OF JUSTICE

IMMIGRATION AND NATURALIZATION SERVICE

STATEMENT OF DORIS MEISSNER, COMMISSIONER

Senator GREGG. We will begin the hearing. We appreciate everyone’s attendance. We thank Commissioner Meissner.

I will not be doing an opening statement. Did you have an opening statement?

Senator HOLLINGS. No, thank you, Mr. Chairman.

Senator GREGG. Then we will go directly to your statement, Commissioner.

INS COMMISSIONER MEISSNER’S OPENING REMARKS

Ms. MEISSNER. Good morning. Thank you, Mr. Chairman, Senator Hollings, members of the subcommittee, for the opportunity to

appear before you today to discuss the President’s fiscal year 2001

budget request for the Immigration and Naturalization Service.

Over the past 7 years we have forged a very productive partnership that has allowed us to build a more effective, more efficient

INS. At times, we have had our differences but we have never lost

focus on our shared goal: strengthening the enforcement of immigration laws at our borders and in the Nation’s interior while improving the delivery of services to legal immigrants.

It has been an honor to serve as the Commissioner of the Immigration Service during this time of remarkable growth and rapid

change and to work with this committee and the Congress to address the challenges that have been created by this growth and by

these changes. Together we have achieved unprecedented success
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in both enforcement and services, making today’s INS vastly different from the agency of 7 years ago and not merely a bigger agency but also a better one, much, much better. That is because this

Administration and Congress have worked diligently since 1993 to

reverse decades of neglect that left the Nation’s immigration system in disrepair and INS unable to fulfill its responsibilities to the

American people.

Our shared commitment to improving INS has been backed with

an unparalleled influx of resources and investments that we have

maximized by supporting the new resources with comprehensive,

coherent strategies.

Nowhere is this more evident than in the area of border management, especially along the Southwest border. The fiscal year 2001

budget will enable INS to solidify and continue to build on this

foundation. Our $4.8 billion budget request is more than triple our

1993 funding level. It will add 1,305 new positions, allowing INS

to grow to more than 33,100 positions by the end of fiscal year

2001, or almost double our size in 1993.

BORDER PATROL

Of the $532.2 billion that is requested for new initiatives in fiscal year 2001, more than $160 million would go to strengthen the Border Patrol. Nearly a third of the new personnel would be Border

Patrol agents, whose ranks we are seeking to expand by 430 at a

cost of $52 million. Another $50.3 million will support new Border

Patrol construction requirements, while $20 million will be spent

to continue deploying the remote video surveillance systems. Additionally, we are seeking $40.9 million to implement a comprehensive pay reform package for Border Patrol agents that would

address salaries, overtime, and other critical compensation issues.

We are committed to moving this package forward because it will

both compensate current agents in a manner consistent with their

expanded duties and enhance INS’s ability to retain and recruit the

Nation’s best and brightest for the Border Patrol. It has the added

benefit of being a better value than the existing pay structure,

which is important to this committee, as well as to taxpayers.

Under Chief Gus de la Vena’s leadership, this $160 plus million

investment in the Border Patrol will be as sound as it is substantial. His experience and vision have been pivotal in transforming

the Border Patrol into not just the biggest uniformed Federal law

enforcement agency, but also one of the best. This is illustrated

most clearly by our record in restoring the rule of law to some of

the most chaotic areas along the Southwest border.

In 1993, there was no comprehensive plan for controlling our

2,000-mile frontier with Mexico. As a result, illegal immigrants and

illicit drugs crossed the border relatively undeterred while legal

traffic entering the country encountered interminable delays at

ports-of-entry. We have responded by developing a multi-year

Southwest border strategy to establish and maintain a border that

works, one that thwarts the illegal entry of people and contraband

while facilitating the flow of legal immigration and commerce.

To support our strategy, we have been deploying record numbers

of new personnel. By the end of the current fiscal year, for example, we expect to have about 9,000 Border Patrol agents on-board
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or almost 135 percent more than in 1993. We have backed these

new agents with substantial state-of-the-art equipment and technology.

Our aim was to gain control of traditional illegal immigration

corridors along the border with Mexico, beginning in El Paso and

San Diego. More recently, we are seeing the impressive results of

Operation Rio Grande in South Texas and New Mexico, and Operation Safeguard in Arizona. During the first 2 years of Operation

Rio Grande, apprehensions in Brownsville fell by more than 160

percent and the number continues to decline, falling another 45

percent so far this fiscal year.

Operation Safeguard has produced similar results, with apprehensions in Nogales, once the busiest illegal crossing corridor in

the State, falling 32 percent last year and another 44 percent in

the first quarter of this year. We are now focussing on the Douglas

Nocho corridor, where the number of agents increased by nearly 25

percent in 1999.

Effective border enforcement also includes ports-of-entry, where we are requesting $22.4 million to hire 269 additional immigration

inspectors, as well as $28.9 million to institute pay upgrades from

GS–9 to 11 for all inspectors, as well. This will, among other

things, allow us to more fully integrate enforcement activities at

ports-of-entry with our efforts between those ports. This link has

been vital to the success of our Border Patrol strategy and it will

be strengthened with the opening of three new ports-of-entry in

Texas this year, which these new positions will support.

The enforcement strategy we have been fielding extends to the

Nation’s interior, where last year we began implementing enforcement priorities that concentrate on removing criminal aliens and

investigating alien-smuggling and other criminal violations. I look

forward to working with you to refine the strategy further and to

build a northern border strategy based on a foundation of interagency cooperation and bi-national coordination.

We also need to further strengthen our capacity to detain and remove aliens who have committed serious criminal offenses. Since

1994, the number of criminal aliens in INS detention has quadrupled to more than 12,000, while the number of criminal aliens we

have removed from the country reached 63,000 last year, more

than double the number removed in 1994. We are requesting additional personnel and facilities to build on these successes in fiscal

year 2001, as well.

IMMIGRATION SERVICES

With regard to immigration services, we have demonstrated that

given the resources, we can develop effective strategies here too,

and produce impressive results. These improvements have

strengthened the balance that is needed between our service and

our enforcement functions. Our top priority has been revitalizing

the Nation’s citizenship program and with your considerable support, we began by restoring integrity to the naturalization procedures.

Then, last year, we began reducing a historically high application

backlog. Having completed more than 1.2 million naturalization applications, double the number in 1998, we have fulfilled our com-
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mitment to cut the average processing time in half, reducing it

from an average of 28 months to an average of 12 months. This

year we expect to cut that wait time in half again, returning to the

standard of 6 months, where we are committed to stay.

To sustain this success in naturalization and to replicate it in

other service areas in fiscal year 2001, the budget proposes a new

Immigration Services Capital Investment account. This account,

separate from our Examinations Fee account, would mark the first

time that INS would have a fund earmarked strictly for infrastructure improvements and reducing application backlogs.

For fiscal year 2001, the $127 million provided by the Capital Investment account and the $807 million from our examinations fee

account would allow us to maintain the 6-month processing time

for naturalization applications that we expect to achieve this year.

We would also be able to process 600,000 adjustment of status applications, double the number we completed last year.

Some of the funding for the new account would come from a direct appropriation and some from a proportion of the requested reauthorization of a permanent 245(i) adjustment of status program.

However, the largest contribution, $55 million, would be generated

by a newly proposed Premium Service Fee for business-related applications. This voluntary $1,000 fee would guarantee business

processing within 15 days, except for certain complex cases, such

as the EB–5s. We are confident that this new fee would create a

win-win-win situation for all concerned; that is, businesses, legal

immigrants and American taxpayers.

Since 1993, we have witnessed the highest numerical level of immigration in our Nation’s history and INS has faced extraordinary

demands to modernize and grow. These demands show no sign of

abating. Our task now is to consolidate the gains of the past 7

years, complete the work yet unfinished, and leave the Nation’s immigration structure in a sound condition. I look forward to working

with you and the Congress to achieve this.

PREPARED STATEMENT

Thank you very much, Mr. Chairman, and I am happy to answer

your and the subcommittee’s questions.

[The statement follows:]

PREPARED STATEMENT OF DORIS MEISSNER

INTRODUCTION

Thank you Mr. Chairman, Senator Hollings, and Members of the Subcommittee

for the opportunity to appear before you today to discuss the President’s fiscal year

2001 budget request for the Immigration and Naturalization Service (INS). It’s important to view this last INS budget request made by the Administration as building upon the accomplishments achieved during the last seven years. With this budget, the Administration will have increased INS funding by 219 percent since fiscal

year 1993. Congress’ support and their investment of resources have enabled INS

to strengthen the Nation’s immigration system—from how we enforce the immigration laws to how we deliver services to our customers.

I would like to convey to the Subcommittee my thanks. It has been an honor and

privilege to serve as the Commissioner of INS, and to work with this committee at

a time of real growth and change. Our joint efforts have played a major part in

changing the way that Americans think about immigration. Major corridors along

our Southwest border are quiet as a result of our determination to stem the flow

of illegal migration. Equally as important, the United States is welcoming unprece-
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dented numbers of new, eligible immigrants to our shores to join us in building this

great nation.

It is critical that we continue to build on this success. The President’s fiscal year

2001 budget request for INS continues a multi-year border enforcement and service

improvement strategy. In total, the fiscal year 2001 request is $4.8 billion, composed

of $3.266 billion in appropriated accounts and $1.544 billion from fees. This budget

represents an 11-percent ($523.2 million) increase over fiscal year 2000 and adds

1,305 new positions, allowing INS to grow to more than 33,100 positions by the end

of fiscal year 2001. With this budget, we continue our commitment to improving customer service, facilitating legal immigration, deterring illegal immigration, and removing criminal and other illegal aliens from the United States.

ENFORCEMENT

The Administration appreciates the support and resources Congress has provided

during the past seven years which have enabled INS to expand its immigration enforcement programs.

Border Enforcement

In the past seven years INS has achieved more in the area of border enforcement

than had been achieved in decades. These achievements are a testament to the strategic approach to address the enforcement problems on the Southwest border. Prior

to 1993, no comprehensive plan existed to control the 2,000-mile Southwest border.

Ill-equipped Border Patrol agents and Inspectors were at times overwhelmed by

aliens who stormed the border and ports-of-entry. Illegal immigrants often came

freely into the country, undeterred by the federal officers who were charged with

controlling their access to the United States. Additionally, legal traffic entering the

country was subjected to interminable delays at ports-of-entry due to the low level

of staffing at these ports.

To bring integrity and safety to the Southwest border, we developed a comprehensive, multi-year strategy, based on the concept of a border that works; one that deters illegal migration, drug trafficking, and alien smuggling, while facilitating legal

migration and commerce. To achieve the goals of this strategy, the Administration

requested and received high levels of personnel and resources.

The President’s fiscal year 2001 budget continues to build on what we have achieved. It includes $164.2 million and 699 new positions to enhance INS’ border

management strategy. It strengthens enforcement efforts by funding 430 additional

Border Patrol agents—more than double the fiscal year 1993 level. These additional

Border Patrol agents will be critical to our efforts to expand integrity and safety to

the borders, thereby improving the quality of life in border communities. In an environment of budget constraints and clear limitations, this budget reflects an increase

in new agents that is achievable, while focusing on pay reform to enable INS to recruit and retain agents. The increase of 430 agents will bring the number of agents

up to approximately 9,000, which represents a 127 percent increase over the fiscal

year 1993 level of 3,965 agents.

INS has worked extremely hard over the last few years to meet the challenges

of hiring and retaining Border Patrol agents. A strong economy, offering opportunities in the private sector, has enticed many who may have considered a career in

the Border Patrol. Retention is affected when experienced veteran Border Patrol

agents leave, attracted by the private sector or by other opportunities in law enforcement offering more lucrative financial rewards. After impressive hiring successes in fiscal year 1997 and fiscal year 1998, averaging 1,020 net new agents per

year, in fiscal year 1999, INS was able to hire 1,126 new Border Patrol agents— a net increase of 369 new agents after attrition.

We have taken action to address recruitment and retention problems. In January

2000, INS implemented a signing bonus program where new recruits are paid two

thousand dollars upon the successful completion of the Border Patrol Academy

training program. Through our National Recruitment Program (NRP) we are advertising extensively via the Internet, through the use of ‘‘banner ads,’’ and the placement of job postings on various Internet sites such as monsterboard.com,

Jobs4Police.com, JobDirect.com and JobTrak.com. In addition, there are 200 Border

Patrol recruiters who conduct local and targeted recruitment in every state. These

teams are responsible for attending local college and military recruitment fairs, conducting open houses, and placing local ads and public service announcements.

Through the NRP, the Border Patrol will attend over 500 recruiting events this

year.

To recruit new agents, improve retention, and reduce attrition, the President’s fiscal year 2001 budget proposes upgrading the journeyman level Border Patrol agent

position from a GS–9 to a GS–11. This upgrade recognizes that the nature of Border
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Patrol work has evolved to the point that agents routinely use advanced technology

in the performance of their duties, just as investigators and intelligence agents do.

The President’s fiscal year 2001 budget seeks $40.9 million to fund this element of

pay reform for Border Patrol agents, as well as change overtime compensation so

it is more consistent with other Federal law enforcement agencies.

Border Patrol agents are assisted and made more effective by investments in

state-of-the-art technology. Technological improvements have played a key role in

the success of INS’ enforcement and facilitation functions.

The fiscal year 2001 budget requests $20 million to expand the deployment of Remote Video Surveillance Systems, the camera portion of the Integrated Surveillance

Intelligence System (ISIS). The ISIS system extends the efficiency and effectiveness

of the line-watch Border Patrol Agents on both the Northern and Southwestern borders. Where deployed, the system detects illegal aliens and drug smugglers, thus

permitting agents to respond to incursions knowing in advance what awaits them.

The ISIS system with night and day surveillance cameras, used in conjunction with

ground sensors, is linked to central controller centers so that Border Patrol agents

can be dispatched with more strategic information about targets. False alarms are

reduced, and officer safety and law enforcement effectiveness are increased immensely. In locations in Arizona, New Mexico, and Texas, this technology has had

a dramatic effect on border control and management and increases the safety of officers who must respond to incursions. The proposed combination of new Border Patrol agents and surveillance technology will permit INS to gain control over larger

portions of the border.

In fiscal year 2001, INS is also requesting $50.3 million to support new Border

Patrol construction. This request will provide $41.7 million for the construction of

ten Border Patrol facilities. An additional $4.5 million is being requested for the

planning, site development, and design work required for construction of seven new

facilities in future fiscal years. The record increases in Border Patrol staff have far

outpaced INS’ ability to provide adequate housing. These resources will allow us to

continue to address space requirements and accommodate the growth in Border Patrol while providing our staff with safe and humane facilities.

The fiscal year 2001 budget also maintains INS’ focus on facilitating legal immigration by funding an additional 269 Immigration Inspectors, a 62 percent increase

over the 1993 level. As a result of the dual focus on enforcement and facilitation,

INS has been able to enhance its enforcement capabilities while reducing wait times

for those seeking to cross the border legally at ports-of-entry. The positions included

in the President’s budget will enable us to staff, and meet established inspection

times at new international airport terminals that are scheduled to be fully operational during fiscal year 2000 and fiscal year 2001. The positions will also support

new port-of-entry openings in fiscal year 2000 in Eagle Pass, Los Tomates, and Laredo in Texas, and ensure that INS will be sufficiently staffed for peak travel times

in the primary inspection lanes at these new ports. Additionally, 28 of these positions will handle increased workload at land border ports related, in part, to the

expedited removal process.

The President’s fiscal year 2001 budget also seeks $28.9 million for an upgrade

for Immigration Inspectors of the journey level from GS–9 to GS–11. This reform

recognizes the increased knowledge requirements and enhanced authorities and responsibilities of each inspector’s position imposed by the Illegal Immigration Reform

and Immigrant Responsibility Act of 1996. These responsibilities include the ability

to remove aliens attempting illegal or fraudulent entry in to the United States. Pay

reform for Immigration Inspectors will put INS in the strongest position to recruit

new inspectors and retain experienced ones.

The border management strategy has proven that deterrence really works. We

have implemented the strategy, corridor by corridor along the Southwest border—

including Operation Hold the Line in El Paso, Operation Gatekeeper in San Diego,

Operation Safeguard in Tucson, and Operation Rio Grande in McAllen and Laredo.

Initially, these operations produce a higher level of apprehensions. This phenomenon is a direct result of the increase in agents and technology deployed. However, as the operation becomes fully implemented and the Border Patrol gains control, the deterrent in that area leads to a sharp decline in apprehensions. The benefits from these operations are clear: Operation Gatekeeper in the San Diego Sector

realized a decrease in apprehensions from 44 percent of total apprehensions along

the Southwest border in fiscal year 1993, to 12 percent in fiscal year 1999, a twentyfive year low; Operation Hold the Line in El Paso produced a decline in apprehensions as a percentage of the total along the Southwest border from 24 percent to

7 percent during this same time period. Moreover, our border operations have also

contributed to enhancing the quality of life for those who live along the Southwest
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border, as evidenced by falling crime rates in Laredo, Brownsville, San Diego, and

elsewhere.

Our strategy to control the border has been extended to the McAllen Border Patrol Sector, the home of Operation Rio Grande. Apprehensions in the sector declined

by 14 percent in January 2000 from those in January 1999, and are on target to

reduce total apprehensions for fiscal year 2000 in the sector by 22 percent from fiscal year 1999’s level. Projected declines in apprehensions for fiscal year 2000 from

fiscal year 1999, at specific stations in the McAllen Sector are as follows: Brownsville Station, the heart of Operation Rio Grande, was down 46 percent for the month

of January 2000, and is down 47 percent for the fiscal year; Port Isabel Station was

down 40 percent for the month and 35 percent for the fiscal year; Harlingen Station

achieved a 36 percent decrease for the month and is experiencing a 35 percent decrease for the fiscal year; and Kingsville Station, which covers the Sarita Checkpoint, and which was once the busiest corridor for alien traffic in the McAllen Sector, was down 20 percent for the month and is down 31 percent for the fiscal year.

At the same time, Mercedes, McAllen, and Rio Grande City, which are upriver from

the main targeted area, are all showing increases in apprehensions indicating that

there is a very noticeable shift of alien traffic due to Operation Rio Grande.

Furthermore, in the McAllen Sector, apprehensions of Other Than Mexicans

(OTMs) seem to also be decreasing. McAllen encountered 813 OTMs in December,

but only 569 in January. This number is significant because December has historically been a slower month than January.

One area of concern in the McAllen Sector is in narcotics trafficking and interdiction. We have been making record seizures and are 36 percent above the value of

narcotics seized in fiscal year 2000 for the same period in fiscal year 1999, even

though the number of cases remains almost the same. In fiscal year 1999 we realized an all time record year for narcotics seizures in the McAllen Sector, and it appears 2000 will be even higher. We remain optimistic that we can have an impact

on the narcotic traffickers by forcing them to move out of the area or, preferably,

change occupations.

In June 1998, INS launched a Southwest border-wide public safety initiative designed to educate migrants about the severe dangers associated with illegal crossings and to assist those who are in danger. The initiative was developed in cooperation with the Mexican government and state and local officials in border communities. In fiscal year 1999, Border Patrol rescue efforts saved 1,042 persons in 200

rescue incidents. This initiative realized a 21 percent decrease in drowning deaths

and a 41 percent decrease in heat-related deaths when comparing fiscal year 1999

to fiscal year 1998.

Under Operation Safeguard, Tucson Sector has been concentrating its efforts in

certain targeted zones in the Douglas and Nogales areas. In the first quarter of fiscal year 2000, compared to the last quarter of fiscal year 1999, targeted zones in

Nogales experienced an overall 44 percent decrease in apprehensions. Attempted entries have also declined during the period in these targeted zones.

In developing and implementing our border management strategy, we have always sought to integrate the activities between the ports-of-entry with those at the

ports. We recognize that facilitation of legal cross-border traffic of people and goods

is vital to the nation’s economy. However, these ports are also the potential entry

points for criminals and contraband. Thus, INS seeks to work cooperatively with

other Federal agencies, and in so doing has achieved impressive results.

In fiscal year 1999, Immigration Inspectors encountered more than 525 million

applicants for entry into the United States (115 million at the northern land border,

319 million at the southern land border, and 91 million at air and sea ports-ofentry). Currently, there are more than 4,900 Immigration Inspectors staffing America’s ports-of-entry. More than 500 of these inspectors are located on the Northern

border, 1,485 are located at ports along the Southwest border, and 3,044 are located

at air/sea ports throughout the United States.

Over the last five fiscal years, the total number of people applying to enter the

United States at its ports-of-entry has risen approximately 9 percent. In the course

of inspecting these applicants, we have identified a 20 percent increase in the

amount of document fraud. We have also increased enforcement actions, such as vehicle seizures 100 percent while increasing alien smuggling apprehensions at the

ports 117.5 percent.

In August 1998, the Attorney General and the Secretary of the Treasury launched

the Border Coordination Initiative (BCI). The BCI is a comprehensive effort by Federal agencies to create seamless immigration and narcotics enforcement through facilitation processes at and between border ports of entry, from Brownsville to San

Diego, over the next five years. Currently, the BCI involves INS and the U.S. Customs Service. However, during fiscal year 2000, we intend to involve other Federal
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agencies including the Coast Guard, the Department of Agriculture, the Federal Bureau of Investigation, and the Drug Enforcement Administration. In fact, the U.S.

Coast Guard now has a full-time BCI Coordinator who is working with INS and

U.S. Customs Service counterparts.

None of these accomplishments would have been possible without the continued

support of the Subcommittee.

Interior Enforcement

Interior enforcement is an essential complement to the Administration’s overarching immigration enforcement strategy. INS’ formal Interior Enforcement Strategy was presented to staff of the Appropriations Subcommittee in January 1999.

The Strategy established the following priorities: identify and remove criminal

aliens and minimize recidivism; deter, dismantle and diminish smuggling or trafficking of aliens; respond to community reports and complaints about illegal immigration and build partnerships to solve local problems; minimize immigration benefit fraud and other document abuse; and block and remove employers’ access to undocumented workers. And, as you requested, we are rewriting and resubmitting the

interior enforcement strategy to focus on alien removals as the end outcome measure. We have drafted an Addendum which clarifies the Subcommittee’s requested

changes to the strategy.

Detention and Removal of Illegal Aliens

We have enhanced our ability to identify and disrupt criminal enterprises that engage in egregious violations of human rights and immigration law and strengthened

our capacity to detain and remove aliens who have committed serious criminal offenses. The number of criminal aliens in detention has quadrupled from about 3,300

in 1994 to more than 12,000 today, while the number of criminal aliens removed

doubled from 30,000 in 1994 to 62,800 last year.

The President’s fiscal year 2001 budget requests $78.9 million to increase detention space in fiscal year 2001 by 1,000 average daily state and local detention bed

spaces. These resources are required to continue to comply with the mandatory detention requirements of IIRIRA. The request includes 25 Deportation Officers, 67

Detention Enforcement Officers, and 17 support positions to sustain the 1,000 average daily bed spaces.

In fiscal year 1999, INS utilized 442 high cost average daily juvenile bed spaces.

The President’s fiscal year 2001 budget requests $8.5 million to fund 120 critically

needed juvenile detention bed spaces nationwide, bringing our average daily juvenile bed level to 562 bed spaces in fiscal year 2001. These resources will also fund

detention vehicles and other support equipment, as well as seven Deportation Officers, three Detention Enforcement Officers, and one Procurement Analyst to manage the cases, transport the detainees, and implement removals of these alien juveniles.

In fiscal year 1999, INS increased its use of the Justice Prisoner and Alien Transportation System (JPATS) to move aliens to available detention space and to remove

them from the United States. JPATS, created in 1995 by the U.S. Marshals Service

and INS, is an air transportation system to transfer or repatriate federal prisoners

and detainees. The President’s budget for fiscal year 2001 includes $10 million to

fund an increase of more than 16,000 air movements. In fiscal year 1999, INS utilized 60,000 air movements to relocate, remove, and repatriate aliens. INS plans to

increase to 72,000 movements in fiscal year 2000 so that INS can progress toward

its projected need of 85,000 total air movements in fiscal year 2001.

INS has begun to implement a set of detention standards in some of the largest

state and local facilities from which it rents detention beds. The President’s fiscal

year 2001 budget requests $8.6 million, 40 Deportation Officers, 37 Detention Enforcement Officers, and three Procurement Officers to continue to implement this

program into 100 more of these state and local facilities, and maintain a minimum

level of standards for INS detainees. Through this initiative, we will be able to provide the same standards to our detainees who are housed in State and local facilities that we provide to our detainees who are housed in INS facilities. Our initiative

to establish and maintain a set of minimum services for detainees originates with

a fundamental belief held by INS, the Department of Justice, and public interest

groups that INS should provide a minimum of proper and humane treatment for

its detainees.

The President’s fiscal year 2001 budget requests $8 million for 18 Deportation Officers and 32 program specialists to improve INS’ use of the National Crime Information Center (NCIC) system, an FBI-operated database used to track criminals.

INS is required by the NCIC covenants to enter the qualifying records related to

wanted criminal aliens and deported felons into the NCIC database and maintain
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the active records on a regular basis. With the tremendous growth in the number

of records that qualify for entry, INS has been hard pressed to enter all of those

records qualifying for entry within the mandated 24-hour period. Included in this

initiative are resources for alien detention, the installation of NCIC terminals and

connections at INS District offices, detention vehicles, travel costs, and alien removals. The additional staff that is part of the request will allow INS to better coordinate the daily use of NCIC, validate the quality of records, confirm the accuracy of

the data, respond to ‘‘hits’’ on INS records in NCIC, and take custody, transport,

detain and remove aliens apprehended by other law enforcement agencies. The request for detention facilities construction is $26.8 million. Of this, $10.4

million will enable INS to expand the Port Isabel SPC in the Rio Grande Valley

with completion estimated in fiscal year 2002. An additional request for $9.5 million

will expand the administration and court facilities at the Krome SPC in Miami; $.8

million is requested to upgrade the San Pedro SPC in Los Angeles. The request includes $4.1 million for the planning, site development, and design work required to

support three detention projects scheduled for future construction. Finally, we are

requesting an additional $2 million to provide for repair and alterations at other existing INS detention facilities.

The removal of criminal and other deportable aliens is the first priority of INS’ comprehensive Interior Enforcement Strategy, and serves as a key performance

measurement of the strategy. In fiscal year 1999, we continued to emphasize removing deportable aliens from the United States, achieving 178,168 final order removals

(62,838 criminal removals and 115,330 non-criminal removals of which 89,267 were

expedited removals).

INS removed a total of 19,798 criminal aliens through the Institutional Removal

Program (IRP) in fiscal year 1999, an increase of approximately 46 percent over fiscal year 1998. As you know, the IRP involves identifying, processing, and obtaining

a decision on deportable inmates prior to their release from Federal, state and local

institutions. The IRP’s facilitation of the prompt removal of deportable inmates once

their criminal sentences are complete saves resources that would otherwise have to

be used by INS to keep the criminal aliens in its custody through the entire legal

process. INS also obtains orders on, and removes, an additional 4,326 criminal

aliens within one day of release from institutions. These ‘‘fast-track’’ and traditional

IRP removals totaled 24,124 in fiscal year 1999. Our IRP removal goal for fiscal

year 2000 is 25,700 criminal aliens; we are well on our way to achieving this goal—

during the first quarter of fiscal year 2000, the IRP reported 5,763 removals.

In fiscal year 1999, we removed 10,055 criminal aliens from the Federal IRP

(9,179 obtained their orders in pre-release hearings, 876 received their orders within

one day following release). We are now working with the Bureau of Prisons to increase the efficiency of the Federal program in order to improve the number of

aliens who receive a final order before, or on the day after, release from Federal

prison. Additionally, by December 31, 1999, INS had completed installation of 15

of the 20 video teleconferencing sites approved by Congress. These sites are expected to play a significant role in speeding up removals.

Additional tools used to maximize the efficiency of the IRP program include full

use of administrative removal and reinstatement of prior orders of removal. These

types of proceedings can be completed without a hearing before an Immigration

Judge, reducing the time needed to process an alien for removal. As a result of these

tools, there is an expectation that the average length of stay in detention will decrease giving INS the capacity to detain more criminal aliens.

Investigations

I am pleased to report to the Subcommittee that INS accomplished higher than

planned numbers of large-scale criminal cases in fiscal year 1999. We presented

seven major inter-regional smuggling cases and 1,967 principals for prosecution, 378

large-scale fraud cases and 636 principles for prosecution, and 182 criminal cases

against employers of unauthorized aliens.

As you directed, INS established Quick Response Teams (QRT), in fiscal year

1999, to work with law enforcement officers at the State and local level in areas

specifically identified as having a growing illegal immigration problem. QRTs are

made up of special agents and detention enforcement officers deployed to INS District Offices and selected cities to coordinate detention and removal operations. The

teams are not independent organizations within INS, but are part of the present organizational enforcement structure. We expect to see the dividends from the investment in QRTs during fiscal year 2000. Indeed, with the opening of the first QRT

office on September 1, 1999, there has been a progressive increase in the number

of requests for assistance from State and local law enforcement agencies. Additionally, the number of apprehensions made by QRTs has increased each month since
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September. In Savannah, Georgia, and in Raleigh-Durham, North Carolina, QRTs

have already responded to local law enforcement calls, in separate incidents, leading

to the arrests of two illegal aliens from Mexico who were each wanted there for murder; one was removed and transferred to Mexican custody, the other is pending removal. Additionally, at least three criminal cases have been accepted for prosecution

including individuals being prosecuted for fraudulent document vending, alien

smuggling, and re-entry after deportation of an individual with a prior narcotics

conviction.

As of January 31, 188 of the 200 QRT officers have been selected with 161 having

entered on duty at their QRT locations. Four of the new QRT facilities have been

opened with the remaining 26 in the construction process. All of the QRT locations

are staffed by a sufficient number of officers, and many are responding from temporary office space to requests for assistance by local law enforcement agencies.

The QRT training program is underway with the fifth training class currently in

session at the Federal Law Enforcement Training Center in Glynco, Georgia. It is

anticipated that the majority of QRT training classes will be completed by April

with a final class for the outstanding selections to take place in July. There will

be nine, two week sessions. All QRT officers will attend. Additionally, several officers who supervise QRTs from District offices will also attend the training sessions.

The two-week training session contains training on professionalism, enforcement authorities, QRT mission and objectives, self-defense techniques, updated computer

training, media training, and constitutional law.

IMMIGRATION SERVICES

To sustain the efforts and successes of Immigration Services in fiscal year 2001,

INS’ budget estimates $807 million for the Examinations Fee Account, funded solely

through the collection of fees from applicants. It also projects $127.3 million in a

new account, the Immigration Services Capital Investment Account (ISCIA). With

these resources, INS projects tentative goals of completing 1.05 million naturalization applications and 600,000 adjustment of status applications in fiscal year 2001.

The fiscal year 2001 budget proposes a voluntary Premium Service Fee of $1,000

for business cases, which will guarantee a decision to approve, deny, or notify the

petitioner that additional documentation or information is required within 15 days.

This fee will not apply to complex cases such as EB–5s. This voluntary fee will provide businesses with an option to expedite the regular processing of business cases

which currently take from 60 days to more than one year, depending upon the form

type and the service office. INS is unable to meet the demand for expeditious service

to the business community without adversely impacting work on relative petitions

and document applications. The Premium Service Fee will ease this situation and

enable INS to address both the business and immigrant communities’ needs for INS

service. We see this voluntary fee as a ‘‘Win-Win’’ solution for all concerned, that

is, businesses, immigrants, and the American taxpayer.

INS estimates that for fiscal year 2001, the proposed Premium Service Fee could

generate approximately $80 million in additional revenue. Of the $80 million generated, about $25 million would be dedicated to providing both the expedited service

for businesses, and benefit fraud deterrence. The remaining $55 million would be

applied to backlog reduction and capital investment items, such as infrastructure

improvements, that will benefit all of INS’ customers and help reduce the applications backlog.

The primary purpose for establishing the ISCIA account is to address ongoing infrastructure needs that are not currently covered by application fees. This marks

the first time INS would have a dedicated fund, separate from the Examinations

Fee Account (which is funded solely through application fees) that draws on other

funding sources to pay for key service related initiatives. The ISCIA will be funded

a total of $127.3 million from three sources. The first source would be $55 million

from the voluntary Premium Service Fee (just discussed); the second source would

be $34.8 million in direct appropriations; and the third source would be $37.5 million from the re-authorization of a permanent 245(i) adjustment of status program.

The Administration estimates that the re-authorization of the 245(i) adjustment of

status program, which provides relief for some immigrants already in the U.S., to

be $75 million. The budget proposes that half of the 245(i) receipts would support

immigration services with the remaining used for detention purposes.

The funding in the ISCIA would be used solely for funding infrastructure improvements and addressing immigration benefit backlogs. Initiatives would include

supporting systems upgrades, enhancing fingerprint storage and retrieval, and supplying more status information to customers through mechanisms such as INS’ new

nationwide toll-free information phone service.
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The resources requested for Immigration Services in the President’s fiscal year

2001 budget will enable INS to continue to build upon its success in the area of

services.

Naturalization

In fiscal year 1999, INS achieved its goal of naturalizing more than 1.2 million

new American citizens. This was a 105 percent increase over the number of applications completed in the previous fiscal year. The agency is on track to meet its fiscal

year 2000 goal of completing 1.3 million naturalization applications. If naturalization applications are received as projected in fiscal year 2000, INS will meet its commitment to cut the nationwide average application processing time down to six to

nine months by the end of the year.

In fiscal year 1994, INS had less than 300,000 pending naturalization applications

and receipts totaled less than 600,000 during the fiscal year. Over the next four

years, INS received almost five million applications, and approached two million

pending applications by the end of fiscal year 1998. Last year, INS reduced the

number of pending cases by 500,000 and halved the national average projected processing time for naturalization cases from 28 months to 12 months.

During this period of tremendous growth, INS has faced the challenges of unprecedented increases in workload while adding staff and improving the integrity of the

naturalization process. To meet these challenges, INS began to re-engineer the way

it was doing business—one that focused on three areas: integrity and standardization, backlog reduction, and communication.

Since 1997, INS has ensured the integrity of the naturalization process by establishing Naturalization Quality Procedures (NQP). INS established Quality Assurance positions in the field to institute quality in every District office. INS authorized

121 quality assurance analyst positions in fiscal year 1998, putting at least one

quality assurance professional, who reported to both Field Operations and the Office

of Internal Audit, in each District office.

In fiscal year 1998 and fiscal year 1999, INS focused on improving the fingerprint

program. INS standardized methods of making fingerprints thereby reducing rejection rates and turnaround times. INS, through the introduction of Application Support Centers (ASCs), collocated fingerprint offices and mobile routes and established

fingerprint locations that are convenient to customers and provide high quality

prints. Before ASCs, the FBI rejected up to 40 percent of the fingerprints submitted

by INS for background checks and response times sometimes exceeded 60 days. In

fiscal year 2000, the reject rate has plummeted to 5 percent and turnaround time

is less than 21 days.

INS has improved the process further by shifting preliminary review and processing of files to the Service Centers in order to allow officers more time to adjudicate cases. In this direct mail approach, all naturalization cases are sent first to

a Service Center where Immigration Information Officers conduct a complete file review prior to shipping cases to the District offices for interviews.

INS has also worked hard to develop an automated case tracking system for nationwide distribution. INS’ CLAIMS-4 system, which began operation in some INS

offices in fiscal year 1999, now allows for standardized case tracking of naturalization cases and is being installed across the Service.

INS has been looking for new ways to achieve significant backlog reduction

throughout fiscal year 1999 and fiscal year 2000. To achieve this, INS field offices

and Service Centers have developed individual goals, plans, and accountability

standards required to reduce the backlog of naturalization cases and now adjustment of status cases. INS staff increased from 1,401 adjudication and naturalization

field positions in fiscal year 1994 to 2,517 positions in fiscal year 2000.

Expanded contacts with its customers and the community will ensure INS can

provide better service. INS has implemented a nationwide National Customer Service Center (NCSC), in Corbin, Kentucky, that provides 24-hour automated service

and access to Customer Service Representatives and Immigration Information Officers Monday through Friday (naturalization applicants may now use the NCSC to

notify INS of a change of address). INS has expanded its relationships with immigration advocates, local officials, and community-based organizations.

Timely delivery of accurate information is critical to INS and was sorely missing

in the past. In order for INS to perform its missions effectively, personnel must have

complete and up-to-date information whenever an individual becomes the focus of

a benefit or enforcement activity. INS officially dedicated a National Records Center

(NRC) on February 25, 2000, as a part of the Immigration and Naturalization Services Records and Processes Improvement Design Project (RAPID). The NRC will

help move INS’ records and information delivery service and management into the

21st century. The NRC will benefit both INS’ internal and external customers by
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improving data integrity and electronic database quality, consolidating and accounting for all paper holdings, giving customers a single place to go for files, centralizing

records support operations, and controlling records processes and the maintenance

of electronic data. The Center became operational and started receiving files from

the more than 80 File Control Offices on November 15, 1999, and expects to take

delivery of the last of the over 20 million files, truly becoming INS’ central records

repository, by the end of fiscal year 2001.

Finally, INS has utilized the Internet and published a guide in order to assist applicants with questions on the naturalization process. INS’ naturalization website

and pamphlet, ‘‘A Guide to Naturalization,’’ have provided accessible but comprehensive information on eligibility for naturalization and the application procedures to the public. INS now provides readily available information on how to apply

for naturalization, an eligibility worksheet, and access to automated tests for history

and civics. Customers are better served by increasing the information available and

by eliminating the need for many applicants to stand in line at a field office.

Adjudications

INS has also positioned itself to take on other immigration benefit caseloads, particularly adjustment-of-status (I–485) applications and reduce unacceptable backlogs. In fiscal year 2000, the agency plans to complete 500,000 adjustment of status

applications—a 67 percent increase from the number of applications completed during the previous fiscal year. INS is also addressing the need to replace the several

hundred thousand Alien Registration Receipt Cards (‘‘green cards’’) that will expire

this year by developing new procedures to reduce INS field office workload and applicant wait time for replacement cards. INS has made great strides in achieving

solid results with the resources provided by Congress in fiscal year 1999 and fiscal

year 2000.

Our goal and emphasis has been to provide maximum value. We intend to capitalize on our successes and intensify our focus on service. Although many re-engineering efforts are still ‘‘in progress,’’ they have already brought about many qualitative improvements in the delivery of services. This trend will continue as re-engineering efforts mature.

Re-engineering, innovation, and use of smart technology solutions are essential

management concepts that INS has embraced to continue its pursuit to provide the

best level of customer service. During fiscal year 1999, INS introduced a new Internet site to the public. The new site allows users to: (1) receive answers to the most

frequently asked questions, (2) currently download most INS forms, with all of them

on line within the next few months, (3) receive sample naturalization test questions,

and (4) provide the latest news via immigration press releases. In fiscal year 1999,

INS recorded 4.5 million Internet user interactions. In fiscal year 2000, INS is averaging 500,000 downloaded forms per month, and 550,000–650,000 user sessions per

month at an average on-site time of 19 minutes per session.

PROFESSIONALISM AND INFRASTRUCTURE

For fiscal year 2001, INS requests $10.1 million to continue improving the institutional development and infrastructure needed to sustain the enormous growth in the

workforce over the last seven years. In 1993, 30 percent of our positions were ‘‘support positions’’ and 70 percent were ‘‘mission positions.’’ Now, our ‘‘support positions’’ are only 24 percent of the total. We must increase support positions and infrastructure if we are to adequately support core missions.

Included in this initiative is a request for 50 positions (34 attorneys and 16 support personnel) to address understaffing in the Legal Proceedings Program. The program provides the full range of legal support for the Service, including representing

INS before the Immigration Courts and the Board of Immigration Appeals. In addition, our attorneys (1) represent the Service in labor-related cases, including Equal

Employment Opportunity, Merit Systems Protection Board, and Federal Labor Relations Act matters, (2) represent the Service in tort claims filed against the agency,

(3) represent the Service in contested naturalization and denaturalization hearings,

(4) provide legal assistance in the formulation and implementation of regulations,

(5) advise and represent the Service in special interest and other sensitive cases,

(6) issue legal opinions in novel and complex matters, (7) provide legal advice to the

Commissioner and other INS officials, (8) provide training on immigration law to

agency officers, and (9) represent the Service in employer sanctions and conveyance

seizure litigation. The success of the Service is intrinsically tied to the effectiveness

of its legal representation.

The lack of a sufficient number of INS attorneys has coincided with a dramatic

increase in both the number and the percentage of aliens granted relief from removal by Immigration Judges. According to statistics provided by EOIR, the number
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of aliens granted relief from removal increased by 414 percent between fiscal year

1994 and fiscal year 1999.

INS is also requesting 60 positions to support Financial and Debt Management

Services. Plainly put, these are positions for the people who pay our bills, administer bond receipts, and ensure deposits are promptly made and accounted for. They

are essential to the administration of this agency and will help us improve our overall financial management performance, including ensuring we receive an unqualified

audit opinion on our financial statements.

In 1996, the Department of Justice’s Management Division issued a report which

in part stated that ‘‘the overall decline in INS’ staffing in almost every major administrative activity suggests a disturbingly weak administrative infrastructure which

has been hard pressed to support the agency’s mission effectively.’’ With your help

and support, we can begin to address this serious shortcoming.

RESTRUCTURING

Over the past few years, the Administration worked in a close and bipartisan

manner with Congress to improve INS’ operations. In the same vein, the Administration today remains committed to addressing systemic problems, particularly

those related to INS’ dual and inter-related missions of service and enforcement.

These systemic problems include competing priorities, insufficient accountability between field offices and headquarters, overlapping organizational relationships, and

lack of consistent operations and policies.

The Administration’s principles for a successful restructuring are that immigration enforcement and service missions must have separate and clear lines of authority at all levels, from the field to headquarters, and that the immigration agency

must be led by a single executive with the authority and resources to integrate immigration policy, standards, and management operations.

This single executive, appointed by the President and confirmed by the Senate,

is essential to maintain an appropriate balance between enforcement and services,

while ensuring a coherent and coordinated national immigration policy. To be effective, this official must have the statutory authority and appropriate staff to direct

operations and supervise key integration and oversight functions, such as legal

counsel, financial management, policy, and communications.

CONCLUSION

The fiscal year 2001 request will ensure INS has the personnel and tools needed

to carry out an effective immigration strategy. I look forward to continuing to work

with the Subcommittee. With your support, we can carry forward the improvements

made and continue to address problem areas and ensure the agency’s integrity. I

want to work with you as we continue our mutual efforts to make this nation’s immigration system the best that it can be.

This concludes my formal statement on the fiscal year 2001 budget request for

INS. I would be happy to answer any questions which you, Mr. Chairman, and

Members of the Subcommittee may have.

NATURALIZATION BACKLOG

Senator GREGG. Thank you, Commissioner. I appreciate your testimony.

You went through a little bit on the illegal alien issue and the

citizenship issue, Citizenship USA, which was a disaster, as we all

know, and which you have attempted to correct.

I guess my question is where do we stand on the backlog? You

did mention that briefly but give us a full explanation of where we

stand on the backlog. And can we expect, as we go into this next

election cycle, that we are going to see another huge explosion of

citizens being registered without having been adequately vetted?

Ms. MEISSNER. Well, you made reference to the procedures in the

naturalization program. That was and continues to be our most important objective; that is, the integrity of the naturalization process, the quality assurance procedures that we have put into place

and the continuing validation that those quality procedures are

working.
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We have established quality assurance and integrity in naturalization that has been validated by outside audits three times,

and continues to be validated by ongoing audits.

Our efforts to reduce the backlog began last year. It is a 2-year

backlog reduction effort in naturalization. We completed 1.2 million

naturalization applications last year and reduced the waiting time

from more than 2 years to what is now an average of 1 year. The

second year of that backlog reduction, which has been supported

with funding by the Congress last year and this year, is under way.

We are on track with this year’s naturalization production goals.

Every office has a production plan. It is carefully monitored in connection with the proper procedures being used, and we expect that

we will eliminate the backlog this year.

Senator GREGG. My question was, are we going to see a huge

bubble, as happened before the last presidential election, coming

out of your office in new citizens being registered who have not

been adequately vetted?

Ms. MEISSNER. We have no expectation that there will be any

change in the numbers from what I have presently given you. We

have no reason to believe that there will be a bubble of applications. In fact, the numbers of applications being filed are declining.

We set our production goals 2 years ago and are holding to those

goals and have no intention to change them.

Senator GREGG. So we can anticipate that at least in this presidential election we are not going to have an effort by the immigration agency to deliver us a large new group of citizens who end up

being felons?

Ms. MEISSNER. There will be no alteration from the plans that

we are presently explaining to you and there will be no diminution

in attention paid to the integrity of the naturalization process.

Senator GREGG. Well, that wasn’t the case during the last presidential election, Commissioner, and we certainly hope that it will

not be repeated. We will take you at your word at this time, but

we are going to monitor that very closely because we do not have

a whole lot of confidence, quite honestly, in your agency on this

issue.

CRIMINAL ILLEGAL ALIENS

Now, I also understand, and we have experienced this a fair

amount, that a number of people have been released from prison

or from detention that have gone on to commit crimes—illegal

aliens. What is the status of the illegal aliens that have been released from detention who have been convicted or are presently expected to be charged with committing crimes?

Ms. MEISSNER. We are operating under mandatory detention requirements that were passed in the 1996 immigration law. When

we have criminals, aliens who have committed crimes, we are mandated to detain them and we do detain them. Somewhere between

60 and 80 percent of our bed space is devoted to criminal aliens,

in conformance with those requirements.

We hold them until we can return them to their country. Those

who we cannot return, and there are some from countries such as

Vietnam, Cambodia, Laos, Cuba, where their countries will not

take them back, we work aggressively with those countries to get
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them to accept return. In fact, we have a delegation right now in

Southeast Asia negotiating with the Vietnamese to begin to accept

their nationals in return.

When we release people from detention, if they commit other

crimes or if they are returned to their country and somehow manage to get back to the United States, we again would apprehend

them, detain them. Recidivism is a problem. There is no question

that recidivism for criminals is a problem not only in the immigration system; it is a problem across the board in law enforcement.

But our first priority in enforcement away from the border is criminal aliens—arresting and returning criminal aliens. Those numbers

continue at a very steep level of increase.

Senator GREGG. How many criminal aliens then, just so I can get

a sense of the numbers that we are dealing with here, have you

released?

Ms. MEISSNER. I would not be able to give you a number of criminal aliens that we have released. We release people only when they

have completed their sentences, when we are returning them, or

when they have shown that they are not a danger to the community or a danger of flight.

Senator GREGG. Well, of the criminal aliens released, how many

have been arrested again in the United States?

Ms. MEISSNER. That is a number that we are analyzing right

now. When that number is complete and that analysis is complete,

I will be happy to provide it to you. I do not have it with me.

Senator GREGG. Well, can you give us a ballpark?

Ms. MEISSNER. The question is how many have committed crimes

after we have released them?

Senator GREGG. That is correct.

Ms. MEISSNER. We have looked at a sampling in order to determine what the incidence of criminality of recidivism, repeat recidivism is, and I can get that number for you. As I say, I do not have

it.

What I can tell you is that we have——

Senator GREGG. Well, are we talking 100? Are we talking 1,000?

Are we talking 5,000, 10,000, 50,000?

Ms. MEISSNER. Overall in the criminal justice system, close to

two-thirds of the people who are released from prison commit subsequent crimes.

Senator GREGG. Well, not if they are illegal aliens, they do not.

If they are illegal aliens, they are not theoretically released back

into our culture.

Ms. MEISSNER. No, they are returned to their country and we

have, as I said, doubled the number of people, criminal aliens, that

we have returned to their country. Our primary objective with

criminal aliens is to return them. But it is also the case that some

do re-enter and some commit subsequent crimes.

Senator GREGG. And my question is what is that number? A

small number? A large number? What are we dealing with here?

Ms. MEISSNER. I think that it is a substantial number and it is

consistent with the behavior of criminals released in other circumstances. In other words, the fact that one is an illegal alien

does not substantially reduce or increase the possibility for subsequent criminality.
198

Senator GREGG. I do not really think that is a very good excuse

though, for the management of the individual, to be very honest

with you. That does not seem to me to be a way to excuse the activity, but I will be interested in hearing what the number is.

[The information follows:]

REPORT ON CRIMINAL ALIENS WHO COMMIT CRIMES AFTER RELEASE

On February 28, 2000, the attached summary on criminal aliens released from detention was provided to the House Judiciary Committee in response to its subpoena

on criminal aliens released from INS detention. The attached report was also provided to the Senate Committee on Appropriations on March 8, following the Commissioner’s testimony before the Committee.

Following the initial release of this summary, INS initiated a limited review of

the physical alien files (A-files) pertaining to some of the aliens included in the reported population. Based on a preliminary review of these A-files, discrepancies between the data contained in the INS database and information contained in the

physical A-files became apparent. Upon further review, it was determined that the

methodology used to identify responsive cases from INS’ databases may have inadvertently included non-criminal alien data in the document responses and analysis

submitted to the committee.

The Department has contracted with KPMG for a review of the methodology used

in retrieving the data. On April 19, 2000, INS and Justice Management Division

held an introductory meeting with the KPMG contractors assigned to the project to

initiate the review. The project’s Statement of Work provides that KPMG will: review the methodology that INS previously implemented in its initial data collection;

make recommendations for improving the methodology if appropriate, and validate

the results of any subsequent data analysis by the INS following the accepted methodology. Following this meeting, the KPMG contractors initiated their assessment

of the initial methodology used by the INS. This review is ongoing. At this time,

given the ongoing review of possible recommendations to improve the methodology,

the INS cannot determine when any subsequent data run will be completed and

when the results of the analysis will be available. The Department is aggressively

approaching this review and hopes to obtain the results within 3 months. This time

line, again, will be determined by the requirements of the methodology for the subsequent data analysis, which have not been recommended by KPMG at this time.

The INS will provide monthly status reports to the Appropriations Committees of

the House and the Senate on the KPMG review.

FEBRUARY 28, 2000.

IMMIGRATION AND NATURALIZATION SERVICE RESULTS OF HOUSE JUDICIARY

COMMITTEE SUBPOENA ON CRIMINAL ALIENS RELEASED FROM DETENTION

The Department of Justice has gathered and analyzed the immigration and criminal records of certain groups of aliens in connection to a subpoena from the Committee on the Judiciary. The first group of these records relates to criminal aliens

that were released from Immigration and Naturalization Service (INS) detention

and either returned to the community or given an order of voluntary departure. The

second group of records relates to aliens that were admitted to the United States

through primary inspection at an airport.

Recidivism is one of the most serious problems in enforcement. This exercise resulted in a 37 percent rate of recidivism for criminal aliens released from INS custody. While the rate varies greatly for specific populations, the findings from this

project are in keeping with general recidivism rates. The INS release criteria attempt to minimize this risk whenever possible. The INS has increased detention capacity greatly over the last five years and focused efforts on removing criminal

aliens and border enforcement. To this end, the INS removed approximately 245,000

criminal aliens between October 1994 and May 1999. In addition, we are attempting

to maximize the amount and quality of information that an officer on the ground

has to make a determination with regard to release, including through IDENT/

IAFIS interconnectivity.

The Department’s response to this subpoena relied heavily on the Immigration

and Naturalization Service and the Federal Bureau of Investigation (FBI). The INS

worked with the Bureau of the Census to develop methodologies for answering questions raised by the subpoena; the methodologies were reviewed and approved by the

General Accounting Office. The U.S. Customs Service assisted with data for the airport admissions.
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Aliens released from detention

Between October 1, 1994 and May 31, 1999 the INS had over 300,000 criminal

aliens in detention. During this period the INS released 35,318 criminal aliens from

custody. The Department and INS place the highest value on protecting public safety. Criminal aliens may be released under several conditions; including after an immigration judge sets bond for an alien or orders release on recognizance or supervision, after review of the case by INS indicates that the alien is not a flight risk

or danger to the community and the detention space is needed for more serious

criminals, on an order of voluntary departure, or because an immigration judge

granted some form of relief to the alien or terminated the proceedings against the

alien.

A search of INS databases indicated that the INS had FBI numbers, indicating

an arrest history, on 23,295 of the released aliens. The INS did not have FBI numbers on the remaining 12,023 aliens. The FBI produced criminal histories (rap

sheets) on the aliens with FBI numbers who had an update on their rap sheet after

the date of release from INS detention. Those 18,454 histories were reviewed by INS

investigative officers who determined that 8,658 aliens were arrested for a crime

after release from INS detention. The officers checked the histories for the disposition of the most serious subsequent crime. As agreed with the Committee, those

crimes and dispositions have been classified into the discrete categories of violent

crimes, drug-related crimes, and non-violent crimes. Violent crimes include homicide, assault, sexual assault, kidnapping, and robbery. The criminal histories often

do not distinguish between levels of a crime, e.g., between homicide and attempted

homicide. Assault includes crimes ranging from simple assault to aggravated assault

with a deadly weapon.

The following table summarizes the type of crime and the disposition of the case

if known. Only the most serious crime is included in this table; some aliens had

multiple charges or arrests on multiple dates.

Total Nonviolent Drug violent

Total arrests ................................................................. 8,658 4,412 2,870 1,376

Convicted ...................................................................... 4,264 2,270 1,489 505

No disposition ............................................................... 4,394 2,142 1,381 871

Since a large proportion of the rap sheets provided by the FBI did not include

information on the disposition of the case, INS agreed to draw a random sample of

116 of the cases without a known disposition. The purpose of the sample was to develop an estimate of the number of convictions. The INS officers traced the records

of the sampled cases to determine disposition. The results indicated 72 cases with

convictions, 24 cases still pending and 20 cases with dismissals, nolle pros, or acquittal. Therefore an estimate of the number of convictions among the cases without

disposition is 2,709 plus/minus 379. The estimate of cases still pending is 903 plus/

minus 318.

The arrest rate among the 23,295 aliens for whom the Department had FBI criminal histories is 37.2 percent. The number of convictions (including the estimate from

the sample) is 6,973 plus/minus 379. The rate of arrest and conviction among the

23,295 aliens is 30 percent plus/minus 1.6 percent.

There is considerably less information about the 12,023 aliens for whom the INS

did not have FBI numbers. The INS drew a random sample of 400 cases from the

records of these aliens. That sample was investigated by the INS’ Law Enforcement

Support Center (LESC). Using name and date of birth checks, the LESC found 67

possibly responsive records; an arrest rate of 16.8 percent plus/minus 3.6 percent.

However, the Department believes that this lower arrest rate is attributable to the

uncertainty and difficulty in using only name and date of birth checks with this population. Therefore, the Department believes that the arrest and conviction rates

among these aliens is the same as the rates among those aliens that had FBI numbers.

The INS compiled the records of subsequent actions taken by the INS after the

initial release from detention. Of the 8,658 aliens who were arrested after release,

3,396 were removed from the United States at least once and there were a total of

4,646 removals among these aliens indicating multiple removals of some aliens

(2,767 aliens were first removed after the arrest and 629 aliens were removed before

the arrest and had illegally reentered the United States).
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Aliens admitted through primary inspection at airports

The INS worked with the Customs Service to develop a list of the approximately

19 million aliens admitted through airports in fiscal year 1998. The list contained

information on name, date of birth, and date of entry. Because the list was too large

to investigate every admission, the Department and the Committee agreed that an

exploratory sample of the admissions would be investigated. The INS drew a simple

random sample of 10,000 aliens. The names and dates of birth of these aliens were

processed by the FBI using a ‘‘sounds-alike’’ system for determining name matches.

After eliminating records that did not match the name and date of birth exactly,

the INS determined that 4 aliens among the 10,000 had a criminal history with convictions before and after entry.

The small number of ineligible admissions uncovered by this sample indicates

that a more complex sampling strategy would be needed to obtain an estimate for

the entire population of admissions with a reasonable level of precision. The samples would need to be larger and they will need to be executed over long periods

of time.

CAPITAL INVESTMENT ACCOUNT

Senator GREGG. You mentioned that you have a new fee system

you are going to put in place to capitalize this capital investment

account. A capital investment account you plan to use for the purposes, as I understand it, of capital activity but also for the purposes of actual operating activity in the area of approving various

items, such as citizenship papers and visas? Is that what you were

going to use this for?

Ms. MEISSNER. This is a proposal, in the budget, to recognize

that processing fees, the fees that we get from applicants, along

with capital investment are extremely important if we are to provide the service that is necessary.

The capital fund would be intended primarily for capital investment in automation, new phone capabilities, case tracking, and additional service center capabilities. It would also be used for backlog reduction in the adjustment of status.

Senator GREGG. You are going to fund this with a fee that people

will have the option of paying if they want to get their approvals

done in a more prompt way?

Ms. MEISSNER. Yes, our proposal is that we would have a voluntary fee for business applications that, according to our estimates, would generate about $80 million, of which $25 million

would be put into additional staff to be able to handle business applications within 15 days. The remaining $55 million would be devoted to infrastructure so that we can accelerate the level of technology, automation and backlog reduction from what we are able

to do with the current fee structure.

Senator GREGG. So essentially you are going to tell an applicant

that if they are willing to pay $1,000, they can get their application

processed in 15 days but if they are not willing to pay $1,000, it

may never reappear?

Ms. MEISSNER. No, that is not correct. The premium fee would

be along the lines of expedited service that one gets from Federal

Express or from the Passport Office. The idea is to provide 2-week

turnaround service for business applicants who are willing to pay

the $1,000 and add the staff that would be required to do that. It

would not take away from the attention given to the non-$1,000

payers. What it would do is make money available that would

allow for upgrading the entire infrastructure of the services area
201

of the INS’s work so that all applicants would be able to get better

service over the longer term.

At the present time, we are simply unable to make the infrastructure improvements as quickly as we need them, from the fees

that are paid with our applications.

Senator GREGG. But the actual cost of doing this 15-day event

would be about a third of what the fee is going to be.

Ms. MEISSNER. That is correct. The fee would pay for the 15-day

turnaround, but would also provide a revenue source that would

improve the processing for everybody over a 2-to 3-year period.

Senator GREGG. Senator Hollings.

NATURALIZATION BACKLOG

Senator HOLLINGS. Thank you, Mr. Chairman.

Ms. Meissner, the record, having a 2-year backlog in naturalization is not a success. We have had a 232 percent increase in your

budget and we were supposed, by the millennium—everybody kept

talking about the millennium and now that we are here, they do

not even mention it—by the millennium we were supposed to be rid

of the backlog and we are still talking about a 2-year backlog.

BORDER PATROL

But let me ask specifically about the Border Patrol. Now, we authorized 1,000 agents and I have looked at your budget here and

you really only provide for 430. You talk the talk but do not walk

the walk. You talk about 1,800, but 600 of the agents that we were

supposed to have hired last year; now you are talking really of

1,800 but only employing 430 for this year, so we are substantially

behind on this Border Patrol.

And we all know up here with respect to the economy and the

high employment, it is not as easy, but the military goes to the

high schools. You could go to the high schools in New Mexico and

you can get some good Spanish-speaking high school graduates and

put them on overnight, send them to Charleston to the school or

the school there in New Mexico. But I find that in the schools, the

classes are cut back from 29 to 20. You are cutting back on the

classes.

You are talking about the great successes and how they are all

coming on but we did that talk last year and we ended up 600 shy.

Now you are talking about 1,800 this year and really asking for

only 430.

What gives? Cannot we get some people employed?

Ms. MEISSNER. Well, we, as you know, have had a very aggressive hiring program for 5 or 6 years. We met our hiring goals for

4 years in a row. It has been a very aggressive effort.

Last year, fiscal year 1999, we faltered. We ran into a labor market that was very unyielding for us. As a result, we have made a

wide series of changes that have increased our applicant pool substantially. We are continuing to increase the applicant pool. But we

did fall behind last year and we need to make that up.

The applicant pool is now 30 percent more than it was last year

at this time. We have attracted between 11,000 and 12,000 more

people as qualified applicants as we have put these changes into

place. We began in January to offer a hiring bonus, as well as to
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make some alterations in the scoring of our tests so that we have

widened the number of eligible people that we can attract. We have

a pay reform package proposal in this budget that we hope to be

able to move forward with, which will create additional ability to

retain people in the Patrol, as well as recruit. So this has been a

major effort of very high priority to the Service.

The class schedules have been filled so far but we have a very,

very ambitious trajectory coming in the next 6 months that we

need to be able to meet. We will do everything that we can.

Senator HOLLINGS. How can you call that an ambitious trajectory

when you are cutting back from 29 to 20? You are going in the

other direction. You talk about the aggressiveness, how you are

going to bring them in at a GS–11 rather than a GS–9, but then

you cut down the overtime pay. So the amounts that they would

get initially paid, then they cut back on overtime, so they are not

getting any more, so that is not aggressive.

Ms. MEISSNER. No, actually the overtime proposal that we are

making increases the salary for the Border Patrol and it creates a

greater amount of overtime that counts toward retirement than the

current system. So it is a much more advantageous system for the

GS–9s that are currently in the Border Patrol that are the working

level.

CHARLESTON CASE

Senator HOLLINGS. Ms. Meissner, I have a question on a case

that we had down there in Charleston. This young student at the

College of Charleston, her mother won the immigration lottery. I

understand your staff was informing you about it. I have been almost to the top, the next person under you on this particular case,

and what happens is they win the lottery and they then have to

apply within a year and she applied and her application was misplaced, lost for 3 months. The agent admitting to the 3-month loss

then asked for the expedited treatment by the INS to get her in

under the terminal date of October 18 and that was totally ignored.

So the agent, knowing it was lost and asking for expedition, which

would have easily had her processed and admitted, instead, she got

it in 18 days later and, as a result, now her entire family is here

from the Ukraine but she is going to be shipped back to the

Ukraine.

In contrast, for example, her sister was in the Ukraine. The

State Department handled it there and her sister got in. And

through no fault of her own, she is appearing before the judge here

and trying to explain this but she is getting no cooperation.

Can you help us in this particular case?

Ms. MEISSNER. I have just become aware of this case and I will

take a look at it and I will do everything that I possibly can. If I

could get back to you on that, I would appreciate it so that I can

become familiar with it.

Senator HOLLINGS. Please get back to us. Do everything you can.

Just correct your mistake, the department’s mistake, not hers.

Ms. MEISSNER. I do understand. I do understand the issue.

[The information follows:]
203

STATUS OF THE CHARLESTON CASE

There have been discussions with Senator Hollings’ staff on this matter. The Immigration and Naturalization Service (INS) is currently in the process of researching this case. Once the case is completely researched, INS will provide the Senator’s office with the full details of the agency’s findings.

Ms. MEISSNER. Senator, if I could just say though on the naturalization point that you made earlier, the backlog reduction program that we presented to the Congress was always a 2-year backlog reduction program for naturalization. Last year was the first

year. We met the goals. This year is the second year. We intend

to meet the goals this year and that will complete the backlog reduction. But that is what was always foreseen and that was what

was shared with the Congress and the way in which the funding

was provided.

Senator HOLLINGS. Thank you, Mr. Chairman.

Senator GREGG. The tradition of this committee is that we recognize people in order of arrival, except whenever the chairman of

the full committee is nice enough to join us and we recognize him

upon his arrival. So I recognize the chairman.

MISSING PERSON

Senator STEVENS. You are very kind. I do have another meeting

going on, and I came over specifically for one question and I would

like to put one question, in the record.

Ms. Meissner, I learned only yesterday about a young Upik person, a young man from Chukotka in Russia who was arrested in

Nome, Alaska, while visiting relatives in Gambell. He was placed

in an INS facility in Seattle. His name is Vladimir Skhaug’e. He

was listed as Vladimir Schaulir. He had family in Gambell and corresponded with them until 1999. At that time he told his family he

was asking for asylum. In the spring of 1999 the family lost contact

with him and was told through a lawyer who they contacted that

he had been sent back to Russia. Since then, neither his family in

Alaska nor his family in Russia has heard from him. They do not

know if he was released to Russia, to whom he was released or if

he was released at all.

On behalf of the committee, I would like to ask for this family

what is the status of his person? I have his number from the INS

service. If he was sent back to Russia, when was he sent? To whom

he was released? What authorities, that is—and is there is any

other relevant data that may help find this young man? He, admittedly, came to our country illegally but it was because he had family in our State, and they are very worried about him. I would appreciate it very much if you could get us a reply.

[The information follows:]

On September 5, 1997, Mr. Skhaug’e was arrested by local law enforcement authorities in Nome, Alaska for public drunkenness. He was subsequently interviewed

by INS officers. During that interview, it was determined that Mr. Skhaug’e had

overstayed his visitors visa. He was subsequently charged for violation of Sec.

237a(1)(b) of the Immigration and Nationality Act. He was transferred to INS in Seattle, Washington, where he was presented for deportation proceedings.

On December 9, 1997, Mr. Skhaug’e was ordered deported by an Immigration

Judge. He appealed this decision to the Board of Immigration Appeals (BIA). On October 6, 1998, the BIA dismissed Mr. Skhaug’e’s appeal and ordered him deported.

On January 28, 1999, Mr. Skhaug’e was deported to Russia through the port of

Anchorage, Alaska, on Aeroflot Airlines to Moscow (Aeroflot Flight No. 854). Since
204

he was in possession of a valid passport and his medical or criminal problems were

not sufficient to warrant counselor notification or any special arrangements with

Russian officials, Mr. Skhaug’e was escorted only as far as the port-of-entry in Anchorage where he was placed on the flight to Russia.

Senator STEVENS. I will submit some questions for the record if

I may.

Senator GREGG. Certainly.

Ms. MEISSNER. I will be happy to follow up on that. Thank you,

Senator.

Senator GREGG. Senator Campbell.

ILLEGAL IMMIGRATION VIA COLORADO

Senator CAMPBELL. Thanks, Mr. Chairman.

Madam Commissioner, it was noted with interest the statistics

you gave, the drop in statistics in the illegal immigrants in Bisbee,

Nogales and several other places, but my view is that that does not

mean they are still not coming.

The problem I think we face is when you add agents and you add

pressure in Texas and California and Florida, they just go the path

of least resistance, and our State is becoming one of the paths of

least resistance.

On January 24th a load of 17 illegal immigrants were packed

into a van, that crashed on a lonely road in a valley in Colorado,

killing three. Just a day after that another van loaded with, I believe, 22 illegal immigrants, crashed in Southern New Mexico, killing one. So clearly some of these lightly traveled roads are becoming major conduits for illegal immigrants.

I know you are aware of that and you have assigned more agents

to Colorado, but in doing so, a strange kind of phenomenon has

started. Maybe you are already aware of it but your agency is going

to expand in Durango, Grand Junction, and Glenwood Springs, Colorado. I note with interest in those town’s newspapers that groups

are forming to oppose this increased INS presence. I never thought

I would see the day when people form in some kind of concerted

effort, saying that we should not allow the INS to expand in their

communities. I thought we were all on the same side of this and

would like to see a reduction in illegal immigration.

The people that are opposing the INS coming into Grand Junction, Durango, and Glenwood Springs seem to be in two factions.

One is the people that need workers—the ranchers and the farms

and small businesses and so on that cannot get workers at a time

when there are so many jobs out there. And the other group, has

some racial overtones. They are saying that we should not expand

the INS because they are going to add more pressure just to people

of Hispanic origin.

I would like to know your thoughts on those two things that I

had never seen before the last couple of years and also your intentions. Are you intent to expand the offices in those communities?

Ms. MEISSNER. Absolutely. Those resources are very important

and they have been needed in these areas for exactly the reasons

that you are describing. They are seeing some changing patterns

and we are seeing smugglers resorting to far more dangerous tactics, putting people at risk in rickety, unsafe vehicles in large numbers, and there have been too many of the kinds of highway disas-
205

ters that you are describing. We need to confront that and we need

to——

Senator CAMPBELL. Well, I am on your side on this. I think you

ought to expand it and I appreciate you doing that, but I would like

to know how the INS is going to react to some of those concerns

that seem to be coming up in the communities.

Ms. MEISSNER. These community concerns do arise and I think

that it is very important that we be able to address them and open

the kind of dialogue with communities that we have been very engaged in in many parts of the country. I think the border communities in particular understand how aggressively we try to keep

lines of communication open.

In this particular case with these new resources that you are getting in Colorado, as well as similar ones in other parts of the country, I think we need to clarify with local law enforcement and with

the communities what the respective roles of local law enforcement

and INS enforcement are, how we will be able to reduce criminality

and abusive practices in their communities, what kind of cooperation we are able to give. I think a lot of it is dialogue and public

education.

Senator CAMPBELL. Do you have some kind of an outreach program?

Ms. MEISSNER. Absolutely.

Senator CAMPBELL. You have been through this before in other

towns?

Ms. MEISSNER. Yes, but I am glad that you raised it with me. I

am sure that our people, locally, are aware of this but I will make

certain that they are pursuing the outreach in the way that we expect.

INDIAN RESERVATIONS

Senator CAMPBELL. I would appreciate that.

Just one other related question, too, and that is in Arizona and

New Mexico, particularly Arizona, we have some Indian reservations that are right on the border, as you know. I have had people

tell me that they pretty much go back and forth any time they

want through holes in the fence from Mexico onto some of the reservation ground.

How does your agency interact with tribal officials? In fact, some

of them tell me that it is their relatives who go back and forth.

Ms. MEISSNER. Well, Indian reservations are a very special area,

as you know. I mean they are sovereign and they span the border,

both on the United States-Mexico border and, in some cases, on the

United States-Canadian border. We work with tribal officials as

closely as we can. I would have to tell you, though, that Indian reservations tend to be a source of enforcement difficulty.

Senator CAMPBELL. Has there been an increase in the number of

illegal aliens coming through reservation border ground?

Ms. MEISSNER. Yes. And obviously Native Americans have specific documents that they are able to use in order to move back and

forth. We increasingly will find ourselves having to work in much

closer coordination with these areas as other parts of the border become more carefully controlled, to prevent this from being a weak

spot.
206

Senator CAMPBELL. Thank you.

Thank you, Mr. Chairman.

Senator GREGG. Senator Domenici?

MEXICAN IMMIGRANTS

Senator DOMENICI. Thank you, Mr. Chairman.

You know, recently there has been a number of articles about

where the immigrants from Mexico who are coming across our border are going, in spite of your efforts, in spite of our money, by the

hundreds and hundreds of thousands, and it is most interesting.

For those who thought they would stay over in Arizona or New

Mexico or even Texas, what a surprise. They are found all over the

South now. We have some communities in the Carolinas, in Georgia where the addition of Mexican immigrants is skyrocketing. The

immigrants are not there by the hundreds; in some medium-sized

communities in the South there are thousands.

Frankly, I am not here to tell you that we know how to stop that,

that we have some magic that we want to impose on you through

our appropriation process. It is my guess that if the census were

accurate, and I do not believe it will be, that we would find that

over the last 5 or 6 years—I do not want to say a sieve—but I really believe there has been little impact on Mexican immigrants coming to the United States and finding a place to stay and go to work.

Frankly, the employers in America are using them, working them,

paying them, and they are sending huge amounts of money back

to Mexico.

I do not know when it will reach a point where it is just too

many and too much, but it is getting close. I mean America has almost lost control of its borders.

Senator CAMPBELL. If my friend would yield just a moment, the

accident, the wreck with the 17 illegal aliens that I talked about

that was in Colorado, they were on their way to Florida. The authorities questioned them and they had come up through New Mexico. There was little resistance, but they were all heading for Florida and had jobs waiting for them on farms.

Senator DOMENICI. I just want to make the point. I have three

specific questions but, frankly, it would appear to me that some

very, very high-level discussions between Mexico, even though they

are sovereign and everybody acknowledges that, and the United

States about this issue would be in order. With a border the size

we have, there is no way the Border Patrol is going to keep this

from happening.

I tell you, when it comes to enforcing our laws that we have put

on the books, all of the border agencies are having difficulty managing the process. I do not know why that is. Maybe it is just too

massive a job. But you have been trying for a number of years to

get your agency under control and maybe it is a little better today,

maybe a lot better than it was 4 years ago, but any outside observation is that it has a long way to go in terms of just accomplishing

what we want it to accomplish. None of us—I am not convinced

that if we were doing it perfectly—know how to prevent massive

immigration from Mexico, so long as they are so poor and there are

so many opportunities in this country. It is just one of the most at-
207

tractive human instincts that is taking place that it is hard for us

to consider because none of us have been in that position.

DETENTION ISSUES

Now if you want to comment on that you are welcome to, but I

want to talk about what is happening on the border. It appears to

me that everything on the border, from the Federal district courts

to where the U.S. Marshals have facilities to incarcerate people

waiting for trial are all so overloaded that it is almost to a situation of emergencies. I want to just talk about one and that has to

do with how are we incarcerating the illegals that we arrest that

are either awaiting trial or awaiting deportation. I would ask you

if you would supply the committee for the record with an entire

analysis of the border and how much capacity we have and where

we are putting these people in jail.

I want you to know that in my State we are not very rich and

we do not have a lot of jobs. Still some of our rural counties have

high unemployment and the immigrants understand that. They are

not staying in those areas, other than for agriculture. They are

going to your State. They are going over to the other States near

you. They are going to Georgia. They are going to Colorado.

I think we have to know who we are putting the burden on, what

local governments we are putting the burden on for incarceration

and jail. I am going to stay right on that, and I want to tell you

one county in New Mexico with a community called Deming, the

county of Luna, which is very poor. They spent $350,000 last year

housing people for the Federal Government in the areas of which

I am speaking.

Now, we need some relief. We either need the government to

build some detention facilities, or they have to reimburse these

poor counties along the border that are housing them. You have

$78 million in your budget for that kind of activity, to either reimburse and/or build some interim facilities.

Now I think with the crisis being what it is that we need to know

from you, and I ask the chairman if we could ask—about the game

plan for using that $78 million. Where are you going to put it? Who

is going to benefit? How are we going to help counties like Luna?

I am sure there are counties and cities in Arizona. If we are going

to appropriate that money, we need to know what you are going

to do with it, and I would ask that you tell us in detail how you

are going to use that on the border to alleviate the situation. Is

that a fair question, Mr. Chairman?

Senator GREGG. Absolutely.

Senator DOMENICI. It may take a little time but I really think we

ought to know, and maybe we do not have enough money at $78

million to do the job.

[The information follows:]

DETAINING ILLEGALS AWAITING TRIAL OR DEPORTATION

The total Immigration and Naturalization Service (INS) Detention and Deportation (D&D) enacted budget for fiscal year 2000 is $878.6 million, which is used to

detain, remove, and deport aliens. Funding is also used to support the 18,535 average daily detention beds within the D&D program. The D&D program uses Service

Processing Centers, contract facilities, joint INS/Bureau of Prisons federal facilities,

and state/local facilities to detain those aliens subject to deportation, exclusion or
208

removal proceedings who are likely to abscond, or whose freedom at-large would

clearly present a danger to public safety and security until they are ready for removal.

INS is requesting $119.5 million in additional program funding for the D&D program in fiscal year 2001, which includes $82 million in appropriated funds. These

resources will be used as follows:

—$16 million to enhance the National Transportation System.—This funding, including $5.6 million in the Breached Bond Detention account, will fund 16,000

additional domestic and repatriation Justice Prisoner and Alien Transportation

System Fund (JPATS) movements, thus enabling the INS to fund a total of

85,000 JPATS movements in fiscal year 2001.

—$8 million to Enhance Juvenile Bed Space.—Funding of $3 million will provide

11 additional full-time Juvenile Coordinators in 11 districts. This initiative,

when fully implemented in fiscal year 2002, will result in the removal of 190

additional juvenile aliens supported by 38 average daily beds funded with Salaries and Expenses resources. In addition, $5 million from the Breached Detention account will increase the number of juvenile detention beds by 82 beds in

fiscal year 2001.

—$52 million to Increase Funding for State and Local Bed Space.—This initiative

will facilitate the removal of an additional 10,000 illegal aliens. It will also add

1,000 new detention beds enabling INS to reach an average annual funded bed

level in fiscal year 2001 of 19,702.

—$9 million for Detention Standards for Intergovernmental Service Agreements

(IGSAs).—Because INS is compelled to rapidly expand IGSA utilization in a

vast and varied number of non-Federal facilities, INS cannot rely on obtaining

IGSA bed space that is always completely compliant with INS’ detention standards. This funding is requested to continue the implementation plan funded in

fiscal year 2000 in which the INS will administer, implement and maintain detention standards with a dedicated staff and funding for upgrading IGSA facilities.

—$8 million to Improve Utilization of the National Crime Information Center

(NCIC).—This funding will be used to expand NCIC data entry to address a serious backlog of inputting INS’s Criminal Alien Records into the Nationwide

database. These resources will also be used to improve and expedite INS capability to locate aliens on the Wanted Persons File and the Deported Felon File,

track stolen property, and obtain criminal history records.

—$27 million to Maintain the fiscal year 2000 Detention-Bed Level.—The fiscal

year 2000 appropriation provided a considerable enhancement for the Detention

program, $26 million of which was funded by one-time recoveries from the Violent Crime Reduction Fund. The budget request proposes the use of $27 million

from 245(i) receipts to replace the $26 million available in fiscal year 2000.

Without these resources, INS would have to reduce its number of detention beds

by almost 1,000.

Additionally, in the fiscal year 2001 President’s Budget, the Office of Justice Programs is requesting $600 million for the State Criminal Alien Assistance Program

(SCAAP). SCAAP is a payment program designed to provide federal assistance to

states and localities for the costs of incarcerating certain criminal aliens who are

being held as a result of state and/or local charges or convictions. States and localities with correctional facilities that incarcerate, for 72 hours or longer, persons accused or convicted of either a felony or 2 misdemeanors that occurred prior to or

resulted in the current custody, are eligible to apply for SCAAP funding.

CAPITAL INVESTMENT ACCOUNT

Senator DOMENICI. Secondly, I do want to criticize your national

budget a little bit. You know, the President of the United States

had the latitude to put an awful lot of new programs in his budget.

I do not think he is going to get very many of them, and I am not

talking about whether we will increase education spending; that is

a different issue. The President has scores of brand new programs

in his budget.

Now why in the world do we have to charge businesses a bonus

to get expedited treatment at the border, this new thousand dollar

club? I am not for that. Frankly, I think it is an admission that

we are not doing our job right, unless you can convince me that it
209

is not. I think we ought to improve the entire process, not just that

for a businessman who desperately needs it, and we ought to cut

that huge waiting time down some way.

Secondly, any user fees that the President puts on on the border

and then uses in this budget seems to me you have to make a great

case for user fees or they should not be put on. I mean if you have

brand new programs you are starting, why do you not pay for the

border activities of this Nation before you start new programs? I

think it is a very simple and fundamental question. I know where

I come down and I frankly believe I could convince 75 Senators

that before we start new programs we have to beef up your programs. We have to make sure you have the money you need.

BORDER PATROL RECRUITMENT

Now on the recruitment, could I ask a question? Are you now recruiting, working hard to recruit people who are bilingual, Hispanics, Mexican-Americans who speak two languages? It would appear to me that if that is not a big part of it, it is a shame and

I would be surprised if you are not doing that but I would like to

know. Is it successful? How do you measure it? Would you answer

that one, please?

Ms. MEISSNER. Shall I go back to the first one on detention?

Senator DOMENICI. Just answer that last one.

Ms. MEISSNER. Okay. Absolutely, bilingual recruitment is very

fruitful for us. We talked last year about doing recruitment closer

to the border and that is among the changes that we have made.

We are doing substantial testing now in border communities all

along the border—Harlingen, Laredo, El Paso, Las Cruces, Tucson—and we are finding very substantial numbers of bilingual people that are applying.

In fact, more than a third of the Border Patrol is Hispanic. We

are the largest Hispanic employer in the Federal Government. Recruiting in border communities, where our work is well known and

where there are high numbers of Hispanic residents, is a very productive recruitment source for us.

Senator HUTCHISON. Could I interrupt for one second on that

point?

Senator DOMENICI. Certainly.

Senator HUTCHISON. Are you giving bonuses for people who are

already proficient in Spanish?

Ms. MEISSNER. We do not give bonuses for people who are already proficient in Spanish. What we have done is changed the

point scoring on the testing that we do for qualified applicants.

Among the changes that we have made is that those who speak

Spanish and have language facility now get extra points toward

qualification for the Border Patrol, which widens the pool of applicants of bilingual people that is available to us. That is working

very well.

DETENTION

Senator DOMENICI. Thank you for that.

Now would you go back and respond if you care to——

Ms. MEISSNER. May I respond on the detention point in particular?
210

Senator DOMENICI. Yes.

Ms. MEISSNER. Detention has been of extreme importance to the

INS. We began this buildup with about 6,000 detention spaces. We

are now up to 18,000. It has been a very substantial growth in bed

space. This budget has in it money for another 1,000 bed spaces.

And we actually house close to 300,000 people in those bed spaces

every year because of the turn-over that takes place.

Now the vast share of that growth has been in reimbursements

to State and local facilities because we use State and local facilities

widely throughout the Southwest. When we run out of space in a

place like Deming and our space that is available to us to reimburse in New Mexico is quite small, we house people in El Paso

and in other places in Texas where we have a considerable amount

of space that we reimburse.

Our needs for detention do exceed what is available, but we also

have made very, very substantial growth. In fact, it is greater

growth than in most of the other occupational areas of the Service.

I will look at the Deming situation to see whether the proper reimbursement is taking place because we do reimburse regularly.

PREMIUM PROCESSING FEE

Ms. MEISSNER. Now on the business fee, all of our adjudications

processing is based on fees that applicants pay. All we are suggesting here is that we have a voluntary higher fee in order to

make capital available for infrastructure that will create a better

base and more automated mechanism for all of our application

processing.

We also are asking for some appropriated funding. We are asking

for a mix of a premium fee and appropriated funding and another

penalty fee in order to put together the bundle of money that is

needed to really move this agency to a modern processing regime.

We have had such a struggle to try to put into place because the

only source of revenue that we have had has been the fee money

until the last 2 years when the Congress did appropriate money for

naturalization backlog reduction. We can show you the results from

that appropriation. We have made our targets and we will make

them this year.

REIMBURSING COUNTIES FOR INCARCERATIONS

Senator DOMENICI. Mr. Chairman, might I make the point and

ask both you and Senator Hollings to consider it, as we prepare to

mark up? I really believe we ought not let the Federal Government

impose on any county, not only on the border but anywhere in the

country, county or city jails—we should not be burdening them

with our incarceration needs without reimbursing them. When it

gets to be as big a burden as it is for some of these counties—I

mean they are giving up hope on us.

The United States Marshals, let me tell you, they are having difficulty because they are the ones in charge of these prisoners and

they are having an awful hard time because they do not even know

where to take them sometimes. I will tell you there are marshals

that have to drive 100 or 150 miles with these prisoners because

we do not have facilities. I think we ought to pay some real atten-
211

tion to that because that is an absolutely unrealistic burden on

local facilities.

Senator GREGG. We will be happy to look at that. I would note

to the Senator that we put a large amount of money into the

SCAAP program. Last year I think we put $650 million in the

SCAAP. It goes back to the States, and they can use it, basically,

as an unfettered block grant. A lot of the States, unfortunately, do

not use it to reimburse the local communities for illegal alien incarceration but rather, use it for local law enforcement or anything

else they want to use it for.

So maybe we should put some restrictions on the SCAAP money,

that the first call on the SCAAP money must be to reimburse local

communities who bear incarceration burdens as a result of taking

illegal aliens. So we might want to put some restriction on the

SCAAP money.

Senator DOMENICI. I am willing to look at it.

Senator GREGG. I do not know what New Mexico does, but I do

know that California uses this essentially as a block grant and as

a result, I am not even sure that the money ends up in the illegal

alien account in California. I think it ends up in the general law

enforcement account.

Senator DOMENICI. Thank you.

Senator GREGG. Senator Hutchison.

BORDER PATROL AGENTS

Senator HUTCHISON. Thank you, Mr. Chairman.

Mr. Chairman, first and foremost I want to thank you and Senator Hollings for being so supportive of the efforts that we have

made on this committee to stick to our commitment and our priority to increase the number of Border Patrol agents.

The head of the drug czar’s office, Barry McCaffry, has urged us

to go toward a goal of 20,000 Border Patrol agents in our country.

Congress has responded to that by trying to have 1,000 new agents

each year and yet we only have 7,700 Border Patrol agents on the

Southwest border and the administration has requested funding for

1,000 only once since we have passed the law in 1997.

Now I think that is appalling, and I know that Commissioner

Meissner has tried to go with the 1,000, but the administration has

come back each year with less than 1,000 and unfortunately, this

year is one of those, where there are 430 in the Border Patrol

agent hiring category.

I am very concerned that in a conversation I had with the Attorney General last week before this committee she indicated that it

was an option to increase the pay, the level from GS–9 to GS–11

if we did not hire the number of Border Patrol agents, the 1,000,

by June 1.

I do not consider that an option. I consider it a mandate. The

language in last year’s appropriations bill was very clear. It was

not a choice; it was a mandate. And the reason that it was a mandate is because this committee has had to get narrower and narrower in directing the administration on the issue of Border Patrol

agents because we have tried to give general guidelines; we have

given them money; we have done everything we know how to do.

And finally last year we said if the money is not spent for more
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Border Patrol agents, it has to be spent upgrading the pay for the

people who are there, because we know we have a retention problem. So I thank the committee for the support but I have to say

I am very disappointed in this year’s budget.

I want to ask you, Commissioner Meissner, if there is any question that you are going to give the increases on June 1 that are

provided for in this committee’s bill from last year, if there is any

question that you are going to give those raises on June 1, as mandated by Congress.

Ms. MEISSNER. We understand the language to be a mandate and

we understand the language to require those upgrades if the hiring

has not been completed to the level that the budget calls for.

In this budget that the Administration has put forward, we have

asked for the funding to cover those upgrades, so it is in the funding proposal for 2001. We consider it very important for, as you

said, both retention and recruitment and in recognition of the complexity of the work that the Border Patrol carries out.

We believe it is also extremely important that that upgrade be

done in the context of an overall overtime reform. We appreciated

your time in talking about this yesterday. I hope that we can work

with you and with the committee to do both the upgrade and the

overtime reform because that is better for the agents and better for

the taxpayer, ultimately, if we can put together the entire package.

Senator HUTCHISON. Well, let me say that the Attorney General

did call me yesterday and she said it is their intention to comply

with that language, as well. And I do not think we can count on

some kind of supplemental that will change the law. Perhaps there

will be one, but I do not think we can count on it.

So I am going to just ask you to start looking for the best way

to assure that those raises go into effect on June 1, as we have directed and as both you and the Attorney General have said you believe is the law that you are required to implement.

I want to work with you on the pay reform that you described

to me yesterday. As I understand it, it looks quite reasonable and

I do hope that we can enact that October 1, but not in lieu of the

June 1 relief that would give our agents the absolute understanding that we appreciate the hard job they are doing and we

want them to be compensated as other law enforcement agents are

that have similar responsibilities.

So we will work on October 1 but not in lieu of June 1. So we

just have to work through that in the best way that we can to

make sure that that retention is the goal, June 1, as we put in the

law last year.

Secondly, I want to say I am pleased that you are now testing

on the border, which is a suggestion that we made to try to increase the pool of applicants, and I am glad that that is working.

I would also just ask you to look at something that we have

talked about before and that is bonuses for Spanish language proficiency. I would like for you to look at whether you could save

money for hiring Spanish teachers and put that into recruitment

bonuses for people who are proficient in Spanish and might be better able to hit the ground running on the Border Patrol.

And last but not least, I just want to say that Senator Kyl had

to leave. He was here because, of course, he is very concerned
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about the increase in activity on the Arizona border. Half of the

drugs and illegal immigrants coming into the United States from

Mexico flow through Texas, chiefly from McAllen, Laredo, and Del

Rio sectors. Two of Mexico’s four biggest drug cartels—the Gulf and

the Juarez cartels—operate directly across from communities in

Texas.

So we cannot let up. Four hundred thirty new agents is not

enough. It is not sufficient, and I do not want to micromanage your

agency and neither does Senator Gregg and neither does Senator

Hollings, nor does Senator Campbell and nor does Senator Domenici or Senator Kyl, but we are frustrated because we have been

very clear in the mandates. And I think the agency has been hampered by an administration that is putting its priorities elsewhere

and by a lack of creativity in recruiting and retaining.

So I hope that we can continue to work together because we are

not succeeding. And as long as we have a continued influx of illegal

immigrants, and we have just heard stories that are unacceptable,

I would associate myself with Senator Domenici’s remarks regarding incarceration of illegal immigrants and the cost to my State,

just as Senator Domenici’s State. It is unacceptable. We have got

to step up to the plate with the Federal responsibility to have the

integrity of our borders. That is one of the very few purely Federal

responsibilities that we have and we are not meeting the test because we have an administration that is looking at other things

that are not a Federal priority, that are State priorities.

So I would just ask you to relay to the President and to the Attorney General that we want to do the Federal job that we are responsible to do and that is have integrity on our borders so that

illegal drugs do not go through these cartels into all parts of our

country and so that we get control of illegal immigration on our

borders. We are giving you the resources to do it, and we just ask

you to please adhere to the mandates that we have given this agency and go forward with 1,000 new Border Patrol agents and start

making up for lost time in not putting enough front-line Border Patrol agents on our borders all the way across, to stop this flow of

illegal activity.

Thank you, Mr. Chairman.

Senator GREGG. Thank you.

We do have Director Freeh and Acting Administrator Marshall

still to testify this morning. Are there other folks who have further

questions?

EQUIPMENT FOR BORDER PATROL

I did have one point I wanted to make, Commissioner, following

up on what Senator Hutchison just said. This committee last year

was very specific about wanting money spent on new equipment for

the Border Patrol. The committee has been informed by the chief

of the Border Patrol that they do not intend to spend the money

on the equipment that the committee directed them to.

If that occurs, this committee is going to take that very seriously

and there may be no chief of the Border Patrol anymore, or at least

funded by this committee. But I can assure you that the directives

of this committee in the area of equipment, in the area of hiring

Border Patrol, in the area of enforcing our borders, are going to be
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complied with. We do have the final say in this exercise and the

fact that this administration has flaunted the desire of Congress to

beef up the Border Patrol, beef up its capability to take action on

the border and has ignored the efforts of this Congress to try to increase Border Patrol activity is something that we take very seriously.

So we are less than impressed with the response of the Border

Patrol to our request.

Ms. MEISSNER. Senator, could I please respond to that?

Senator GREGG. Yes.

Ms. MEISSNER. The question of technology for the Border Patrol

is essential. Technology is absolutely essential. We have said from

the outset that our efforts with the Border Patrol have to be a combination of people, equipment, and technology. We have asked for

technology in every budget; the committee has been very generous

in funding technology. We stand by that and we want to put as

much money into technology as we possibly can.

The earmark that the committee made last year of $22 million

for technology is an earmark that we will comply with. I think that

the conversations that took place at the staff level, we were talking

past each other. We need the technology, and we will identify the

technology. We gave you a report last year, and we would like to

update it based on more information that we have at the present

time. I think that what we want to be able to do is work with you

on the best kinds of technology and technologies that we know

work and are effective. It is particularly important as we go into

the more remote areas, which is the case now on the southern border and will be the case as we accelerate on the northern border.

So I would hope that I could provide you with the understanding

and the clarification, here, that our commitment to technology is

unfailing. I have strong confidence in the chief’s judgment on the

overall direction of the Border Patrol, as well as the kind of technology that is helpful and that our agents use effectively. If we

could please work together on this, I think that we can come up

with a technology package that meets everybody’s needs and the

Congress’s wishes.

Senator GREGG. That would be good. This committee has been

committed to funding an expansion of the Border Patrol not only

in personnel but in detention capability and in facilities and in

equipment, and we are totally committed to continuing to fund

that. We intend to aggressively fund that but when we fund it, we

do expect the money to be spent on those efforts and not to be put

into other functions.

So we would be happy to work with you on that and hope that

we can reach a common purpose.

Ms. MEISSNER. I hope so and I believe we will be able to. I appreciate that.

Senator GREGG. Thank you.

Senator DOMENICI. Mr. Chairman, could I submit two questions

in writing?

Senator GREGG. Certainly.

Senator GREGG. Thank you, Commissioner.
(215)

FEDERAL BUREAU OF INVESTIGATION

STATEMENT OF LOUIS J. FREEH, DIRECTOR

DRUG ENFORCEMENT ADMINISTRATION

STATEMENT OF DONNIE R. MARSHALL, ACTING ADMINISTRATOR

REMARKS OF SENATOR GREGG

Senator GREGG. We are going to turn now to and hear both Acting Administrator Marshall of the DEA and Director Freeh. We

will ask them both to appear before the committee at the same

time to expedite their time so that we do not unnecessarily hold

them up.

First let me welcome Administrator Marshall. This is his first

appearance before the committee, and we appreciate his stepping

into the shoes of Administrator Constantine. We know that he will

continue the excellent job that has been done at DEA.

Of course it is always a pleasure to have Director Freeh before

the committee.

Again, I have no opening statement. Do you have an opening

statement?

Senator HOLLINGS. No, thank you.

Senator GREGG. And to expedite your time, gentlemen, if you

want to submit your statements and go to questions, that would be

great. Or if you want to make your statements, that is fine, also.

We will begin with you, Director Freeh.

OPENING STATEMENT OF FBI DIRECTOR FREEH

Mr. FREEH. Senator, I will just make a very brief statement with

your kind invitation.

Senator Hollings, good morning.

My statement is well prepared. I do not want to take any of the

committee’s time to repeat it. Let me just make several points.

SUPPORT OF THE FBI’S MISSION

First of all, let me thank you, Mr. Chairman and Senator Hollings and this committee, for what has really been historical and

extraordinary support for the FBI’s mission. I know that, first-hand

since September of 1993, in all the areas where we protect our

country and the people who live here, as well as around the world,

whether those be counterterrorism issues, organized crime issues,

drug trafficking issues, pedophiles on the Internet, terrorists, or espionage, this committee particularly has given the FBI and the

country the tools, the technology to make those assets force-multipliers, as the spies and terrorists have done with technology. And

your particular support and attention to infrastructure issues, to

tools and skills, to analytical capabilities has been absolutely out-
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standing and I want to just thank all the members of the committee for that.

We face a lot of challenges ahead of us. After 61⁄2 years leading

the FBI, I guess my greatest concern is not the quality of the people who serve our country. We have, as you know, over 99,000

young men and women who have applied to be FBI agents and we

are honored and delighted with that. Most of them are qualified to

perform the job. I am glad that I was an FBI agent in 1975. I do

not think I could get into the FBI right now. I would not hire me

if I were applying in the competitive pool that we have, that we

are really blessed with.

So we are always going to have the people. We have the individuals dedicated to the things that are critical to protect our democracy and our values. I am not worried about that. I am worried

about the technology. I continue to be concerned about our competency to work in the venues where we now work, which are computer venues, and high-tech venues. There are analytical worlds

where we find ourselves, with people able to do the job but not in

every case the tools and technology. And, as I said, I am extremely

thankful to this committee for the support that you have given us.

I guess my message, finishing up my sixth year is that we cannot

fall down on the technology job, that those tools and skills that you

have given us have a short shelf-life. Technology and software in

some cases, as you know, gets rewritten every 18 months. So we

cannot stop or fall down on the job of technology support, or tools

and skills and the analytical and technical ability to do our job. I

am very concerned for that and I just would make that my theme

and that is certainly reflected in our initiatives.

Of the eight initiatives that we asked for consideration for the

2001 budget, really only three of them are operational: counterintelligence, counterterrorism, and a violent crime initiative. The

other five go to infrastructure, investigative support, technology,

analytical ability, and Law Enforcement Services. I think that is

the margin that we have to maintain if we are going to stay active

and competent in the 21st century.

PREPARED STATEMENT

So thank you very much and I would be pleased to answer any

of your questions.

Senator GREGG. Thank you, Director.

[The statement follows:]

PREPARED STATEMENT OF LOUIS J. FREEH

Good morning, Mr. Chairman and members of the Subcommittee. Once again, I

am pleased to discuss the fiscal year 2001 budget request for the Federal Bureau

of Investigation (FBI). It is a privilege to be joined by Donnie Marshall, the Acting

Administrator for the Drug Enforcement Administration, and Doris Meissner, the

Commissioner for the Immigration and Naturalization Service.

The work of the FBI, whether it is catching criminals, drug traffickers, terrorists,

and spies; providing training, investigative assistance, and forensic and identification services to our law enforcement partners; or developing new crime-fighting

technologies and techniques, is made possible by the strong support of this Subcommittee. On behalf of the men and women of the FBI, I thank you.
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OVERVIEW OF FISCAL YEAR 2001 BUDGET REQUEST

For fiscal year 2001, the FBI is requesting a total of $3,280,749,000 and 25,635

permanent positions (10,752 agents) for its Salaries and Expenses and Construction

appropriations. This request includes direct program increases totaling 360 new positions, including 65 new agents, and $165,692,000 for eight budget initiatives:

Counterintelligence; Information Collection, Management, and Analysis; Training;

Investigative Support; Counterterrorism; Violent Crimes; Technology/Cyber Crimes;

and Law Enforcement Services.

In addition to direct funded resources, the fiscal year 2001 budget request assumes a total of 3,586 reimbursable positions (1,076 agents) and 3,453 workyears.

For fiscal year 2001, the Administration is proposing to implement a user fee to pay

for the costs of operating the National Instant Criminal Background Check System

(NICS). The FBI estimates that the NICS program will require a total of 642 positions and workyears to operate, at a cost of $71,552,000, which would be provided

by fees. This amount includes funding to implement a program of notifying appropriate State or local law enforcement when an ineligible person attempts to purchase a firearm. Under the auspices of the Interagency Crime and Drug Enforcement (ICDE) program, the FBI would be reimbursed for a total of 981 positions (592

agents) and $112,468,000 for FBI drug and gang-related task force investigations

and operations. Pursuant to the Health Care Insurance Portability and Accountability Act of 1996, the FBI will receive $88,000,000 in fiscal year 2001 to fund 776

positions (445 agents) for health care fraud enforcement.

COUNTERINTELLIGENCE

Despite the fall of the Iron Curtain and the emergence of democracy in many of

the countries formerly under the rule of communism, the threat posed to U.S. national, military, and economic security from foreign countries remains significant.

Investigations in this area have become more complex as the focus of foreign intelligence services have expanded from traditional Cold War traditional military-related targets to new areas, including technology, intellectual property, and economic

activity. The FBI continues to work closely with the intelligence community to identify and reduce the presence of hostile intelligence services in the U.S. To keep pace

with the changing counterintelligence threat to the U.S., the FBI is proposing a

counterintelligence initiative that would provide an additional $19,115,000 and 138

positions (63 agents) for this mission-critical area.

INFORMATION COLLECTION, MANAGEMENT, AND ANALYSIS

To be successful, the FBI must have the capacity for collecting, storing, managing,

analyzing, and disseminating case and intelligence information on a timely basis to

its own investigative personnel, as well as other federal, State, and local law enforcement and the intelligence community. Existing systems and capacities must be

upgraded to meet increased investigative demands. New technologies also present

opportunities for making for effective and timely use of case information and intelligence currently being collected. For fiscal year 2001, the FBI is requesting a total

of $74,227,000 and 74 positions to enhance its information collection, management,

and analysis capacities.

Digital Collection Systems.—Since 1968, the Congress has provided the FBI and

other federal law enforcement agencies with authorities that can be used under certain conditions during investigations of criminal activities to conduct electronic surveillance, including the interception of voice and data communications. Authorities

governing the conduct of electronic surveillance in national security investigations

were passed by the Congress in the Foreign Intelligence Surveillance Act. These authorities carefully balance each citizen’s Fourth Amendment rights under the Constitution with law enforcement’s mission to protect national security and maintain

public safety.

For fiscal year 2001, the FBI is requesting an increase of $25,300,000 and four

positions to begin a multi-year project for replacing existing analog-based collection

systems in each of its 56 field offices with new digital collection systems. The new

digital systems will use both off-the-shelf commercial and specially-developed technology. Digital technology presents the means for obtaining higher quality and

clearer recordings, which, in turn, will allow the FBI to improve the processing,

translation, dissemination, and analysis of materials. New digital systems would

also be compliant with digital-based solutions being implemented by the telecommunications industry under the Communications Assistance for Law Enforcement Act (CALEA) of 1994. Within a few years, analog access to conduct court-authorized intercepts of communications will disappear.
218

Additionally, the fiscal year 2001 budget proposes an allocation of $10,000,000

from the Department of Justice Assets Forfeiture Fund Super Surplus, if available,

for a multi-year initiative for storing, archiving, and managing lawfully collected

electronic surveillance intelligence and evidentiary materials. This database would

facilitate integration of electronic surveillance data with the FBI’s Information Sharing Initiative.

Information Sharing Initiative.—The underlying information technology infrastructure of the FBI is not adequate to meet either the present-day or near-term

information technology needs and capacities of the FBI’s criminal investigative and

national security programs. To establish the requisite information technology infrastructure and develop the data processing, analysis, and dissemination capacities

considered essential to satisfy criminal investigative and national security requirements, the Information Sharing Initiative strategy was developed.

To date, Congress has supported the FBI by making $80,000,000 available for investment in the Information Sharing Initiative strategy, including $20,000,000 in

fiscal year 2000 and $60,000,000 in fiscal year 1999. Consistent with Congressional

instructions, none of these funds have not been obligated. The FBI continues to consult with the Congress to obtain the necessary concurrence for the Information

Sharing Initiative strategy. The fiscal year 2001 budget proposes an investment of

$60,000,000 for the Information Sharing Initiative, consisting of $20,000,000 in base

funding and $40,000,000 in new funding. Additionally, $838,000 is requested to hire

15 new computer specialists to support equipment installation and operations.

Language Services.—FBI investigations are increasingly affected by international

criminal activities and emerging criminal enterprises and alliances that transcend

national boundaries. The FBI’s success in preventing international crime groups

from establishing criminal operations in the U.S., as well as investigating those

criminal activities that do occur, depends upon the capability to translate both foreign language conversations recorded during court-authorized electronic surveillance

and records, documents, and other materials obtained during the course of an investigation.

In addition to employing a cadre of translators, the FBI uses the services of contract linguists for short-term, mission-critical criminal and national security investigations. Contract services are especially critical for supporting an increasing number of FBI cases involving less commonly spoken languages. The FBI has not been

able to translate all of the recorded audio conversations and documents it has obtained during investigations. To provide more timely translation services for investigations, the fiscal year 2001 budget proposes an increase of $5,000,000 for contract

translation services.

Intelligence Analysts.—The FBI Strategic Plan recognizes the key role and importance of intelligence in each of its criminal investigative and national security programs. To maximize the use of existing intelligence resources and to develop the

necessary integrated intelligence capacity needed for the future, the FBI recently

consolidated criminal and national security intelligence analysts under the management of the Investigative Services Division at FBI Headquarters. An aggressive initiative to enhance FBI analytical capabilities, the Intelligence Capabilities for the

Millennium (ICAP-2000), is being undertaken to establish standardized core skills

and competencies and to develop a training curriculum for analysts. In addition to

enhancing the capabilities of existing analysts, there is a need for additional analysts to support investigators at the field level with case, or tactical, intelligence and

national program managers at FBI Headquarters with strategic intelligence.

To improve its analytical capabilities, the fiscal year 2001 budget proposes an increase of $3,089,000 to hire 55 new Intelligence Research Specialists (IRS) for national security investigations. Twenty eight (28) IRSs would be allocated to FBI field

offices to assist case agents through the development of tactical analysis and 27

IRSs would be assigned to FBI Headquarters to support national program managers

through the development of strategic analysis.

TRAINING

The FBI’s ability to respond to the difficult and complex challenges from crime,

threats of terrorism, and hostile intelligence services, requires a well-trained workforce that possesses the skill sets needed to be effective in their jobs. The importance of training in today’s law enforcement environment is further heightened by

the rapid pace of technological change and the changing scope of the FBI’s investigative mission. In April 1999, the FBI adopted a comprehensive policy for the continuing development and training of FBI employees that emphasizes the importance

of training and continuous learning. Under this new policy, all FBI Agents and support employees are now required to obtain the equivalent of no fewer than 10 hours
219

of developmental training annually, and over a 3-year period, not less than 50 hours

of developmental training. The FBI will use traditional ‘‘classroom’’ training at the

FBI Academy, distance learning, specialized training from vendors, and computerbased, interactive technology to assist employees in satisfying this requirement. For

fiscal year 2001, the FBI proposes increases totaling $8,395,000 for training programs, technology, and firearms range modernization.

FBI Academy Training.—The FBI’s primary training venue is the FBI Academy,

located at Quantico, Virginia. With the recent opening of the Justice Training Center, the FBI has regained approximately 20 percent of the Academy’s dormitory capacity that was previously allocated for the Drug Enforcement Administration. This

equates to being able to provide one-week of training to an additional 7,000 FBI employees. To make full use of the training and dormitory capacity of the FBI Academy, an additional $2,800,000 is required to pay for the travel of 7,000 additional

FBI students. Without this additional funding, the FBI will not be able to use the

FBI Academy at its full capacity level.

Interactive Multi-media Courses.—Not all FBI training requirements can be satisfied with one approach to training. Rather, a combination of classroom, distancelearning, and computer-based, multi-media instruction packages are needed to meet

the varying needs and schedules of both training programs and individual students.

Technology-based training methods provide an opportunity to deliver training to employees with a high degree of effectiveness, yet at a substantial cost savings over

traditional ‘‘on-site’’ training.

The FBI believes interactive, multi-media technology offers the potential for meeting training needs in several areas, particularly through self-paced courses on core

topics such as informant development, interviewing and interrogation, and case

management. An initial CD–ROM based multi-media course, ‘‘Interview and Interrogation,’’ has proven very successful and has been incorporated into the New Agent

training curriculum. The course is also used by more experienced field agents to refresh their knowledge and skills. The FBI has made copies of the course available

to all federal, state, and local law enforcement. Funding totaling $1,500,000 is requested to prepare four additional interactive, multi-media courses on the topics of

Informant Development, Basic Criminal Investigation, Leadership and Management, and Ethics.

Development of Analytical Capabilities.—The FBI cannot achieve the goals of its

strategic plan without a substantial improvement in the skills and expertise of its

existing analytical cadre. All investigative program managers have cited weaknesses

in analytical capability as a key shortfall in their ability to undertake proactive investigations and identify emerging groups and crime trends. To correct these shortfalls and assure quality analysis, all FBI analysts must achieve a high standard of

professional skill and expertise.

In recognition of this situation, the FBI has begun a multi-year initiative, the Intelligence Capabilities for the Millennium (ICAP-2000), to overhaul the existing analytical infrastructure. The development and implementation of a comprehensive,

standardized training program is a central component of this effort. For fiscal year

2001, an increase of $1,000,000 is requested for analytical training programs. This

funding will allow the FBI to provide analysts with basic training in FBI investigative programs and techniques, analytical thinking, briefing techniques, report writing, and critical analytical technologies, such as telephone analysis. Additionally,

analysts would be afforded advanced training in specialized areas and substantive

issues, such as money laundering, narcotics trafficking, denial and deception techniques, and foreign area studies, that will enhance individual areas of expertise and

knowledge.

Specialized Training.—FBI criminal and national security investigations often depend upon the use of sophisticated technical equipment, systems, and techniques

that gather evidence of illegal activities and/or intelligence information on planned

activities. Each FBI field office requires specially trained personnel—Technically

Trained Agents and Electronic Technicians—who support the use of these systems

and techniques during investigations and surveillances.

The current complement of Technically Trained Agents is being stretched thin by

both increasing operational requirements and the loss of experience due to recent

retirements, reassignments, and promotions. Additionally, due to the fast-pace of

changes in technology, both Technically Trained Agents and Electronic Technicians

require an on-going program of technical instruction. This specialized instruction is

provided at both the Engineering Research Facility located at the FBI Academy and

through commercial sources. An increase of four positions and $1,195,000 is requested in fiscal year 2001 for FBI Technically Trained Agents and Electronic Technicians training programs.
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FBI Academy Firearms Range Modernization.—With the support of the Congress,

the FBI has undertaken a plan to modernize the FBI Academy Firearms Ranges.

The existing ranges need modernization to increase capacity, minimize environmental impact, and improve the safety of FBI and Drug Enforcement Administration firearms training. With funding previously provided, the FBI has completed an

environmental assessment, developed a master plan for the project, and completed

architectural engineering and design. Remaining funding available will also allow

us to compete a contract for construction of three 25-yard all-weather ranges, a

stress obstacle course, and lead abatement.

For fiscal year 2001, an increase of $1,900,000 is requested to continue the FBI

Academy Firearms Range Modernization project. This funding would allow the FBI

to continue lead abatement and construct an ammunition storage facility. This facility would replace two existing, makeshift storage facilities that do not comply with

existing Department of Defense safety standards, which is a requirement due to the

location of the ranges at the U.S. Marine Corps Base, Quantico.

INVESTIGATIVE SUPPORT

The Investigative Support budget initiative address increased funding requirements for the daily basic operational requirements of field investigators and FBI

Headquarters. The fiscal year 2001 budget proposes increases totaling $20,534,000

for four key items: telecommunications services, criminal case operations funds, digital body recorders, and program management support for implementation of the

Communications Assistance for Law Enforcement Act (CALEA) of 1994.

Telecommunications Services/ATM Circuits.—The FBI operates a telecommunications infrastructure that was designed in 1991 to support the Systems Network

Architecture (SNA)/token ring network. This network currently serves over 600 separate FBI locations and has been maintained with few changes. This design is illsuited to supporting electronic case files that, under the proposed Information Sharing Initiative (ISI), will include imaged documents, video/voice segments, and intelligence analyses. To satisfy the requirement for increased bandwidth for transmitting images, video, and voice, the FBI is migrating to the Asynchronous Transmission Mode (ATM) adopted by the Department’s Justice Consolidated Network (JCON).

For fiscal year 2001, the FBI is requesting an increase of $14,334,000 to begin

the acquisition of ATM circuits to support its telecommunications network. For fiscal year 2001, the FBI intends to provide ATM circuits for key network concentration sites, large field offices, FBI Headquarters, the FBI Academy, the Clarksburg,

West Virginia, fingerprint card processing center, and larger resident agencies. The

migration to ATM circuits is being staged with the implementation plan for the ISI

project.

Criminal Case Funds.—The FBI Strategic Plan recognizes the importance of gathering, analyzing, and disseminating intelligence and of focusing investigative efforts

against criminal activities with a regional, national, or international nexus. Information supplied by informants and cooperating witnesses often serves as the predicate for these types of major, long-term investigations. Criminal organizations of the

type, scope, and complexity investigated by the FBI have both the illicit wealth and

intense loyalty (maintained by fear of violent reprisal) that frustrate traditional law

enforcement investigative efforts. To counter this challenge, the FBI requires funding for a range of case operational costs, such as the lease of telephone lines to conduct court-authorized interceptions of communications, the rental of off-site space,

lease of covert vehicles, witness protection expenses, and covert travel by undercover

agents, informants, and cooperating witnesses.

For fiscal year 2001, the FBI requests an increase of $2,100,000 for criminal case

operating funds and the purchase of information.

Digital Body Recorders.—Audio recordings of conversations between or among

subjects of a criminal investigation and informants, undercover agents, or cooperating witnesses often provide clear evidence of an individual’s involvement in illegal

activities. These recordings are made in strict compliance with existing guidelines

and statutes. The evidence obtained from consensual-monitoring is used extensively

in court to demonstrate the complicity of a person in a criminal activity. The investigative environment in which this investigative technique is used presents a high

risk to the personal safety of the person wearing a recording device. New digital

technology allows for much smaller and less conspicuous devices, as well as improvements in recording clarity and capacity. Additionally, digital devices are less

susceptible to commercially-available countermeasures technology used by criminals

to detect the presence of these devices.
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The FBI is requesting an increase of $2,000,000 to replace existing analog body

recorder devices with newer digital devices.

CALEA Implementation Support.—The Attorney General has delegated to the FBI

responsibility for managing the implementation of the CALEA. The FBI has adopted

a three-phase approach toward achieving CALEA compliance. Phase One consists of

working with telecommunications manufacturers and carriers to describe law enforcement’s technical capability and capacity-related electronic surveillance needs.

Phase Two consists of resolving and finalizing the legal and regulatory issues regarding implementation. Phase Three consists of ensuring CALEA compliance by

working with carriers as solutions are deployed, assisting carriers as Systems Security and Integrity rules and procedures are adopted, and seeking enforcement

against carriers for noncompliance. These phases remain consistent regardless of

the specific telecommunications technology being pursued. The FBI’s current focus

is on achieving the deployment of CALEA solutions for wireline, cellular and

broadband Personal Communications Systems (PCS) technology.

By fiscal year 2001, emerging technologies service providers of Enhanced Specialized Mobile Radio, two-way paging, and Mobile Satellite Service will have grown

and possibly exceed the number of cellular and PCS carriers today. These technologies fall within the scope of the CALEA and require adherence to law enforcement technical and capacity requirements. The fiscal year 2001 budget request includes an enhancement totaling $2,100,000 for CALEA implementation support activities, including support for the Law Enforcement Technical Forum, facilities operations, and travel related to consultation, standards, regulatory, and solution development activities.

COUNTERTERRORISM

The United States continues to face a serious, credible threat from terrorists both

abroad and at home. The number of groups and individuals capable of carrying out

a terrorist act has increased over the past several years. Of particular concern to

the FBI are groups and individuals for which political or religious beliefs constitute

sufficient motivation for carrying out a devastating terrorist act.

To deal effectively with domestic and international terrorism, the FBI must concentrate on both prevention and response. The FBI’s counterterrorism strategy is focused upon five inter-related elements to build and maintain an operational capacity

for identifying, preventing, deterring, and investigating terrorist activities. First, the

FBI must have the capacity to respond to acts of terrorism committed in the U.S.

and abroad when those acts are directed against the U.S. government or its interests. Second, the FBI must have the capacity to receive, react to, and disseminate

counterterrorism information. Third, the FBI must develop its internal capacities to

support proactive counterterrorism programs and initiatives. Fourth, the FBI must

have the capacity to establish and maintain sound and productive relationships with

other domestic and foreign law enforcement and intelligence counterparts. Fifth, the

FBI must have the capacity to use all of the necessary assets and capabilities of

the FBI and other U.S. government agencies to support and initiate complex investigations and operations against domestic and international terrorists and terrorist

organizations. For fiscal year 2001, the FBI is requesting increases totaling

$13,100,000 to improve and enhance existing counterterrorism initiatives.

Weapons of Mass Destruction Preparedness.—At the forefront of U.S. government

counterterrorism planning and preparation efforts is the threat of chemical and biological terrorism. Internationally, there is credible intelligence that terrorist organizations are attempting to acquire a capability for weapons of mass destruction. Domestically, a growing number of individuals acting alone and splinter elements

within extremist groups have obtained or attempted to develop and employ chemical, biological, or radiological materials. Within the spectrum of terrorist threats,

the FBI continues to believe the actual threat of a chemical or biological terrorist

attack to be low; however, the consequences of such an act could be devastating. To

continue on going efforts to prepare for a terrorist event using weapons of mass destruction, the FBI is requesting an increase of $3,500,000.

The National Domestic Preparedness Office (NDPO) was established to serve as

the focal point for federal efforts in support of the State and local emergency responder community. The NDPO, which is managed by the FBI and is staffed by representatives from other federal agencies and State and local detailees, is organized

around six program areas: planning, training, exercises, equipment/research and development, information sharing and outreach, and public health and medical services. For fiscal year 2001, an increase of $563,000 is requested by the FBI for NDPO

principal stakeholder and functional area conferences.
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Funding is proposed in the fiscal year 2001 budget for the Department of Justice

to assume responsibility for several activities currently being performed by the Department of Defense under the auspices of the Domestic Preparedness Program. The

budget proposes that the NDPO assume responsibility for the Chemical and Biological Helpline which provides emergency responders and planners across the United

States with information on a non-emergency basis to plan, mitigate, and prepare for

the effects of a chemical or biological terrorist incident. The cost of assuming

helpline operations is $731,000. Additionally, the Weapons of Mass Destruction Operations Unit within the Counterterrorism Division at FBI Headquarters would assume responsibility for the Chemical and Biological Hotline operated by the National Response Center. The hotline receives incident information and provides technical assistance during a suspected or actual chemical or biological incident. The

cost of assuming hotline operations is $2,206,000.

2002 Winter Olympics Preparation.—The 2002 Winter Olympic Games have been

designated a National Special Security Event. Consistent with responsibilities for

intelligence collection and crisis management contained in PDD–39 and PDD–62,

the FBI is working with the United State Secret Service and other federal, State,

and local law enforcement and consequence management agencies to plan for security and public safety issues for the 2002 Winter Olympic Games that will be hosted

by Salt Lake City, Utah.

For fiscal year 2001, the FBI requests increases totaling $1,100,000 for 2002 Winter Olympic Games preparation. This funding will support planned interagency

training exercises, the acquisition of telecommunications and related equipment for

a joint interagency operations/intelligence center, and specialized cold weather

equipment.

Hazardous Devices School.—The Hazardous Devices School is the only formal domestic training school for State and local law enforcement to learn render safe and

bomb disposal operations. Located at Redstone Arsenal, Huntsville, Alabama, the

school is managed by the FBI Laboratory. The Hazardous Devices School is the only

location where bomb technicians receive basic training and certification in accordance with standards established by the National Bomb Squad Commanders’ Advisory Board. After receiving initial certification, technicians are required to be recertified every three years.

For fiscal year 2001, there is a need to train 1,335 students at the Hazardous Devices School. To provide that level of training, the FBI requires an increase of

$2,900,000.

Counterterrorism Research and Development.—In fiscal year 1998, the Congress

made available $10,500,000 to the FBI under the Attorney General’s Counterterrorism Fund to initiate several research and development activities, including

$5,000,000 for explosives detection and counterterrorism projects, $2,500,000 for

data exploitation projects, $1,000,000 for cyber training curriculum development and

training at the FBI Academy, and $2,000,000 to establish a partnership with the

Southwest Surety Institute.

For fiscal year 2001, the FBI requests an increase of $5,000,000 to continue and

expand counterterrorism research and development projects initiated with fiscal

year 1998 funding.

VIOLENT CRIMES

The focus of the Violent Crimes budget initiative for fiscal year 2001 is on improving federal law enforcement services in Indian Country. Native Americans and others living in Indian Country are not sharing in the decline in violent crimes that

is occurring in countless other American communities. The homicide rate in Indian

Country remains three times greater than the national average. Crimes against

children, including sexual and physical assaults, continue to plague Indian Country.

Youth gangs present a threat to public safety. Drug trafficking is becoming a major

problem. Thirty-two FBI field offices have some degree of investigative responsibility

in Indian Country, ranging from exclusive jurisdiction—19 field offices—to concurrent federal and state jurisdiction. For fiscal year 2001, the FBI is requesting an

increase of $4,639,000 and 31 Victim/Witness Specialists to improve its services to

Indian Country.

Safe Trails Task Forces.—The FBI has adapted its successful Safe Streets Task

Force concept to maximize the use of limited FBI, local, tribal, and Bureau of Indian

Affairs staffing to address significant violent crime problems in Indian Country. The

first Safe Trails Task Force was established in 1995 by the Phoenix Field Office to

work on the Navajo Nation in Arizona. Presently, the FBI sponsors 10 Safe Trails

Task Forces in Gallup, New Mexico; Carson City, Nevada; Green Bay, Wisconsin;

Flagstaff, Arizona; Monticello, Utah; Riverton, Wyoming; Rapid City, South Dakota;
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Tucson, Arizona; Phoenix, Arizona; and Glasgow, Utah. These task forces are staffed

by 31 FBI Agents, 2 Bureau of Indian Affairs criminal investigators, 49 tribal police

officers, and 19 local police officers.

In some areas, an obstacle to full-time participation by a local or tribal law enforcement agency is a lack of funding for overtime and related costs. For fiscal year

2001, the FBI requests an increase of $634,000 for the overtime costs of State and

local law enforcement participation on FBI-sponsored Safe Trails Task Forces.

Indian Country Forensic Examinations.—The investigation and successful prosecution of crimes committed in Indian Country depends, first, upon investigators

identifying and collecting evidence at crime scenes and, second, the timely examination and analysis of evidence. To address a growing workload of forensic examinations resulting from Indian Country investigations, and to improve the timeliness

of results of forensic examinations to investigators and prosecutors, the FBI entered

into a contract with the Arizona Department of Public Safety Laboratory for the examination of evidence collected at Indian Country crime scenes by agents assigned

to our Phoenix Field Office. This arrangement has proven highly effective and successful.

For fiscal year 2001, the FBI proposes to expand this program to include three

additional field offices—Salt Lake City, which covers Utah, Idaho, and Montana;

Minneapolis, which covers Minnesota, South Dakota, and North Dakota; and Albuquerque, which covers New Mexico. The estimated annual cost for these three additional contracts is $1,405,000.

Indian Country Victim/Witness Services.—Among the most significant obstacles

for the FBI and other law enforcement investigating crimes in Indian Country is

overcoming the reluctance of Native American victims and witnesses to cooperate

in the criminal justice system. Cooperating with the criminal justice process can

often present a hardship to Native American victims living in Indian Country. Victims and witnesses of violent crimes in the Indian Country often live long distances

from the offices and courtrooms of government attorneys, magistrates, and judges,

where they must appear as participants in the judicial process. For example, a resident of the Turtle Mountain Indian Reservation must travel 600 miles round-trip

to testify before a Federal Grand Jury in Minot, North Dakota. A child sexually

abused on the Fort Peck Reservation in Montana must be transported 350 miles to

Billings for a medical examination and evaluation. Victim/witness services, such as

assistance with transportation, overnight lodging, and preparation of impact statements for sentencing, which are readily available to many citizens in urban, suburban, and rural communities are not accessible to those living in Indian Country.

Through its Victim/Witness Assistance Program, the FBI is working to build confidence and cooperation in Indian Country. Presently, the FBI employs four Victim/

Witness Specialists who are assigned to resident agencies covering Indian Country.

While few in number, these individuals are contributing in a positive way. An FBI

Victim/Witness Specialist in Billings, Montana, has helped the U.S. Probation Office

implement an adult and juvenile sex offender treatment program on three area Indian reservations. She is also assisting the Crow Sex Offender Registration committee draft tribal legislation to register all sex offenders on the reservation. Victim/

witness specialists assist FBI Agents by assisting in arranging for medical treatment, trial preparation, transportation to/from trials and other proceedings, and securing services to which they are entitled. For fiscal year 2001, the FBI requests

an increase of $2,600,000 to hire 31 additional Victim/Witness Specialists for assignment to FBI Resident Agencies serving Indian Country.

TECHNOLOGY/CYBER CRIMES

In recent years, technological advances have fundamentally changed the way of

life in this country. Computers and networks allow millions of individuals to access

on a daily basis a broad range of information services, databases, commerce, and

communications capabilities that were previously unavailable. A combination of reduced cost for computer technology and increased storage capacity allows the accumulation, storage, and management of large amounts of information by individuals

on personal computers and peripheral devices. Most FBI investigations, especially

those in organized crime, drug trafficking, crimes against children, white-collar

crime, counterintelligence, and counterterrorism are encountering the use of computer technology to facilitate illegal activities. As a result, the FBI must develop the

investigative and forensic capacities and capabilities to deal with the use of computer technology by criminals and others to commit crimes or undermine national

security.

For fiscal year 2001, the FBI’s Technology/Cyber Crimes budget initiative proposes increases totaling 108 positions (2 agents) and $18,983,000 to enhance exist-
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ing capabilities in three cybercrime fighting areas: data forensics, counterencryption,

and Intellectual Property Rights investigations.

Data Forensics.—One of the fastest growing demands from investigators and prosecutors is for assistance by the FBI Laboratory Computer Analysis and Response

Team (CART) program for forensic examination of evidence obtained from computers and computer storage media. The data forensic process has three distinct

phases: (1) acquisition, which involves recognizing and seizing electronic data of an

evidentiary value from a computer, computer storage media, or computer network;

(2) examination, which is the process of documenting the evidence, then locating,

identifying, and extracting the pertinent data; and (3) presentation, which requires

the formatting of relevant and technical evidence for use by investigators and prosecutors.

The FBI’s capacity for performing CART examinations is not keeping pace with

the demand for CART assistance. In fiscal year 1999, the FBI was only able to satisfy 1,900, or 54 percent of the 3,500 requested CART examinations, resulting in a

backlog of 10.1 months. By fiscal year 2001, the FBI projects the demand for assistance will increase to 6,000 requests. Compounding the growth in the number of requests for assistance is a significant increase in the amount of data to be examined.

Recently, hard disk drives have nearly doubled in storage capacity annually, from

4.3 gigabytes in 1997 to 8.4 gigabytes in 1998 to 17 gigabytes in 1999. It is expected

that hard disk drives of between 60 and 80 gigabytes will be available by the end

of 2000. As the capacity of storage media grows, the amount of time needed to perform forensic examinations also increases. Without additional CART examiners and

data forensics examination tools, the FBI will be unable to provide support to field

investigators and prosecutors.

Building a CART program capacity that will be able to deal with the demand for

data forensics will require a commitment that includes hiring, training, and equipping additional examiners. To initiate such a commitment in fiscal year 2001, the

FBI is requesting $8,571,000 to hire, train, and equip 100 new CART examiners for

assignment to field offices (83 positions) and the FBI Laboratory (17 positions). Additionally, the FBI is requesting an increase of $2,800,000 to continue the development of the Automated Computer Examination System (ACES). ACES is used

by CART examiners to automatically scan and review personal computer files for

their format and type. Computer operating systems and applications software are

continually upgraded and modified by industry. Similarly, the FBI must be able to

upgrade ACES to keep pace with these changes, otherwise, ACES will lose its value

as a forensic technique. The FBI intends to provide ACES to all FBI field offices,

as well as other federal, State, and local law enforcement as part of an effort to

build data forensics capacities at all levels of law enforcement.

Counterencryption.—The widespread use of digitally-based technologies and the

expansion of computer networks incorporating privacy features and capabilities

through the use of cryptography presents a significant challenge to the continued

ability of law enforcement to use existing electronic surveillance authorities. The

FBI is already encountering strong encryption in criminal and national security investigations. In 1999, 53 new investigations encountered encryption. The need for

a law enforcement cryptanalytic capability is well documented in several studies, including the National Research Council’s 1996 report entitled, ‘‘Cryptography’s Role

in Securing the Information Society.’’ The report recommends high priority be given

to the development of technical capabilities, such as signal analysis and decryption,

to assist law enforcement in coping with technological challenges.

The Administration supports the enhancement of a centralized law enforcement

capability within the FBI for engineering, processing, and decrypting lawfully intercepted digital communications and electronically stored information. For fiscal year

2001, the FBI requests an increase of $7,000,000 to further develop an initial operating capability that will allow law enforcement to obtain plain text and meet the

public safety challenges posed by the criminal use of encryption. With this funding,

the FBI intends to work with existing national laboratories and other government

agencies to ensure all existing resources are used in executing processing functions.

This approach will prevent duplication of effort. Additionally, the FBI plans to acquire necessary computer hardware, software tools, technical expertise, and services

to develop capacities in four counterencryption program areas: (1) analytical engineering; (2) signal analysis research; (3) counterencryption deployment; and (4) industry-assisted technology transfer.

Intellectual Property Rights.—Currently, the U.S. is the world leader in the development of creative, technical, and intellectual property. The U.S. economy is increasingly dependent on the production and distribution of intellectual property. Intellectual property right infringement includes both violations of the Economic Espionage Act as well as traditional copyright and trademark violations. A growing per-
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centage of intellectual property right violations now have an Internet element. Web

sites can be accessed that allow individuals to distribute and download pirated materials, resulting in substantial losses to U.S. companies that invest millions of dollars in product development.

For fiscal year 2001, the FBI is requesting an increase of 8 positions (2 agents) and $612,000 to help staff an interagency Intellectual Property Rights Center. The

center, which is expected to become operational in 2000, was conceived by the FBI,

Department of Justice, and United States Customs Service, to improve the coordination of intellectual property rights investigations and to enhance the exchange and

analysis of intelligence on these types of activities. All government agencies having

responsibility for intellectual property rights matters, including the Office of the

U.S. Trade Representative, the Patent and Trademark Office, and the Copyright Office, will be invited to participate.

LAW ENFORCEMENT SERVICES

For fiscal year 2001, the FBI is requesting an increase of 5 positions and $6,699,000 for its Law Enforcement Services budget initiative.

Federal Convicted DNA Offender Database.—All 50 states have enacted legislation

that requires blood samples to be taken from felons convicted of various qualifying

offenses. DNA profiles from these blood samples are entered into the Combined

DNA Identification System (CODIS). Presently, individuals convicted of comparable

offenses in federal courts, military courts, and the District of Columbia are not required to submit blood samples. Consequently, these populations of violent criminals

who may be released back into our communities, including those convicted of sexual

assaults against children, are not in the CODIS. As a result, when a law enforcement agency compares DNA recovered at a crime scene against CODIS, the database will not contain samples from persons who may be logical suspects because

DNA profiles from federal, military, and District of Columbia offenders are not

available.

Funding totaling $5,335,000 and 5 positions are requested to implement the Federal Convicted Offenders DNA Database, which was authorized by the Anti-Terrorism and Effective Death Penalty Act of 1996. Implementation of this database

requires clarifying legislative authority, which has been submitted to the Congress

by the Department of Justice. This funding would allow the collection and processing of DNA samples from an estimated 20,000 individuals currently incarcerated

after being convicted in federal, military, and District of Columbia courts of qualifying offenses.

National Integrated Ballistics Identification Network (NIBIN).—In December

1999, the FBI and the Bureau of Alcohol, Tobacco, and Firearms (BATF) entered

into a Memorandum of Understanding for joint agency implementation of the

NIBIN, a single federal ballistics imaging system. NIBIN will combine the best features of the BATF Integrated Bullet Identification System and the FBI DRUGFIRE

system. Under the provisions of the agreement, the FBI is responsible for the nationwide NIBIN communications network and connectivity between system sites and

the national network. BATF is responsible for NIBIN hardware and software development and installation, training, security, maintenance, user protocols and support, and quality control. This joint, integrated approach to ballistic imaging will

benefit all federal, state, and local law enforcement agencies by ending the competition between systems and providing law enforcement with enhanced crime-fighting

technology from the FBI and BATF.

Under the agreement, BATF will replace existing DRUGFIRE systems, subject to

the availability of funds. BATF plans to replace 10 DRUGFIRE units in 2000, 73

in 2001, and 68 in 2002. During the transition period, the FBI will continue to support DRUGFIRE systems not yet replaced and NIBIN communications requirements. For fiscal year 2001, the FBI requests an increase of $1,364,000 for NIBIN

connectivity. The FBI is using its existing nationwide Criminal Justice Information

Services—Wide Area Network (CJIS-WAN) as the communications backbone for

NIBIN.

RELATED DEPARTMENTAL FUNDING REQUESTS

Mr. Chairman, I would like to highlight several requests for funding included

within other Department of Justice programs that are considered important to FBI

initiatives and programs.

Telecommunications Carrier Compliance Fund.—Within the General Administration appropriation, a total of $120,000,000 is proposed for the Telecommunications

Carrier Compliance Fund (TCCF). These funds, along with another $120,000,000

proposed by the Administration under the Department of Defense, will support on-
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going efforts to implement the Communications Assistance for Law Enforcement Act

of 1994 (CALEA).

In September 1999, the FBI, Department of Justice, Ameritech Services, Inc., and

Nortel Networks, Inc. entered into the first software right-to-use license agreement

covering one wireline switching platform. Additionally, a license fee for three other

switching platforms was agreed to by Nortel Networks. Under the right-to-use

agreement, Nortel Networks will grant a CALEA software license to other carriers

at no charge for all switches of the same platform type installed or deployed before

January 1, 1995. The FBI and the Department of Justice have reached an informal

agreement, subject to the availability of funds, with AG Communications, Lucent

Technologies, Motorola, and Siemens relative to nationwide right-to-use licenses.

When considered cumulatively, the switching platforms of these five manufacturers

account for approximately 90 percent of the historic lawfully-authorized electronic

surveillance activity conducted by federal, state, and local law enforcement.

State and Local Bomb Technician Equipment.—Within the funding proposed for the Office of Justice Programs (OJP), $10,000,000 is included to continue an FBI

Laboratory-managed program of equipping State and local bomb technicians. Congress provided a similar amount for this program in the fiscal year 2000 appropriation. In fiscal year 1999, the Department of Justice provided $25,000,000 from the

Working Capital Fund for the effort. Continuation of funding for this program will

ensure State and local bomb squads are properly equipped to deal traditional improvised and explosive devices, as well as the initial response to devices that may be

used by terrorists or others to release chemical or biological agents. This initiative

compliments the State and local bomb technician training and accreditation program that the FBI Laboratory provides at the Hazardous Devices School, Redstone

Arsenal, Alabama.

Grants for NIBIN, DNA Backlog Reduction, and Regional Data Forensic Laboratories.—Also, requested under Community Oriented Policing Services (COPS) program is $10,000,000 for grants to reduce the backlog of ballistic evidence in state

and local agencies for entry into the NIBIN system, $15,000,000 for grants to reduce

the backlog of DNA profiles for entry into the FBI’s national CODIS database, and

$6,000,000 for grants to establish regional data forensic laboratories. These proposals are related to several on-going FBI Laboratory initiatives for improving State

and local crime-fighting and forensic capabilities.

LEGISLATIVE PROPOSALS

Mr. Chairman, the fiscal year 2001 budget requests includes two general provisions proposed by the FBI, including: danger pay authority and foreign cooperative

agreement authority.

Danger Pay.—Section 109 would extend to the FBI the same authority that the

Drug Enforcement Administration (DEA) currently enjoys for authorizing danger

pay for personnel assigned to high risk overseas locations. For the FBI, this is both

a pay equity issue for FBI Agent assigned to DEA Country Offices and a recognition

of the increased threat facing FBI personnel performing extraterritorial investigations in foreign locations due to our counterterrorism responsibilities. At times, FBI

personnel are deployed to overseas locations where, due to the nature of our work,

they face a threat or hostile environment that does not always extend to all members of the United States diplomatic team in a particular country. This authority

would allow me to address those situations. This authority has been requested by

the Administration in each of the past three budgets.

Foreign Cooperative Agreements.—Section 110 would allow the FBI to credit to its

appropriation funding that is received from friendly foreign governments for that

country’s share of joint, cooperative projects with the FBI. This authority would facilitate projects with friendly foreign governments, especially in support of our national security mission. The authority was first proposed by the Administration last

year, was adopted by the House, but did not make its way into the final Conference

bill.

SUMMARY

Mr. Chairman, the budget proposed for the FBI for fiscal year 2001 addresses several of the critical resource needs identified through our Strategic Planning process.

These important investments will allow the FBI to meet the investigative and technological challenges we face as the FBI enters the 21st Century. These investments

will also enable us to develop the core competencies that will allow us to be successful in investigating crimes, protecting national security, developing and sharing

technical and forensic expertise, and working better with our State, local, and international law enforcement partners.
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Congress, and this Subcommittee in particular, has been extremely generous of

its financial support for the FBI over the past several years. Our successes in the

field, whether they be preventing pedophiles from luring children over the Internet,

to bringing terrorists from foreign lands back to the U.S. to stand trial for their actions, to protecting our nation’s critical infrastructure from cyber attacks, to fostering greater cooperation with foreign law enforcement through new Legal Attache ́

Offices, were made possible because of your support for the FBI. As we look forward

to fiscal year 2001, I am hopeful that we can continue to depend upon your support.

Again, I thank you for this opportunity to appear before the Subcommittee.

STATEMENT OF ACTING ADMINISTRATOR DONNIE R. MARSHALL

Senator GREGG. Administrator?

Mr. MARSHALL. Mr. Chairman, Senator Hollings, committee

members, thank you very much for the opportunity to appear here.

This is my first budget hearing before this committee. As you

know, I have been nominated for the position of Administrator and

I will be attending Senate confirmation hearings, so I hope that it

will not be my last appearance before this committee.

I want to thank the committee, as Director Freeh did, for your

support. We have had some outstanding successes over the years

in DEA and I know that those successes would not have been possible without the support of this committee and each and every one

of the members here.

DRUG TRAFFICKING PATTERNS

As I assume the leadership of DEA, I want to ensure that DEA

maintains and enhances our effectiveness as the only drug law enforcement agency that focusses solely on the drug problem. In so

doing, I want to ensure that DEA is in a position to undertake a

greater degree of intelligence-driven targeting, and that we maintain our ability to adapt to the changing drug trafficking patterns

in this country. One of the trends that I would like to discuss very

briefly is the changing pattern of drug trafficking in this country.

We see that the organizations that control the drug trafficking

into our country are too often headquartered outside the United

States, beyond the reach, traditional reach, at least, of U.S. law enforcement. They have to have operatives in this country and they

do send operatives into each and every city, town, community in

this country in order to import their drugs and their violence.

One particular change that we have seen in a recent study—actually DEA has noticed this trend for a couple of years now and

it is confirmed now by a recent study by the Center on Addiction

and Substance Abuse at Columbia University—is the invasion of

drugs into smaller and medium-sized cities across this country.

The CASA study showed that drugs are just as available in small

towns today in America as they are in larger towns and it also

showed that eighth-graders, in particular those in rural America,

are 79 percent more likely to use methamphetamine, 75 percent

more likely to use crack cocaine, 52 percent more likely to use cocaine, and 26 percent more likely to use marijuana than their bigcity eighth-grade peers.

Now what this means is that DEA has to also adapt to these

changing demographics in order to have the maximum impact on

the criminal organizations that are operating in this country. And

in order to ensure that adaptability, one of the first things that I
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did upon assuming the position as Acting Administrator was to

begin to establish a 5-year strategic plan, which would allow us to

readily adapt to changing situations, which would allow us to institute greater intelligence-driven targeting, which would allow us to

target the leadership of all these organizations and which would

allow us to most effectively use our limited resources to investigate,

indict, arrest, and convict the leaders of these organizations.

In my complete written statement for the record I have outlined

a number of successes that we have had in the last couple of years.

I hope that the committee members will have a few minutes to review those successes. I will not go into them in the interest of time.

BUDGET INITIATIVES

We have three budget initiatives in our request this year. The

first is the Intelligence Initiative and that is in keeping with my

goal and my desire to conduct greater intelligence-based targeting

of the major drug trafficking organizations. The second initiative is

our Domestic Enforcement Initiative and I think that will go a long

way toward allowing us to better tactically attack the drug-trafficking organizations, particularly with regard to the Southwest

border and with regard to financial investigations. And finally, the

third initiative that we have submitted is an Infrastructure Initiative. A good portion of that goes to enhance our Firebird system,

which is basically the carrier for all of our intelligence systems and

our administrative information systems.

PREPARED STATEMENT

I hope that we can get the support of the committee on those initiatives and again I want to thank you for your past support. In

the interest of time I will conclude my formal statement and we

can move to questions and answers if it pleases the committee.

[The statement follows:]

PREPARED STATEMENT OF DONNIE R. MARSHALL

Mr. Chairman, Members of the Subcommittee: I appreciate the opportunity to appear before you today to discuss the fiscal year 2001 budget request of the Drug

Enforcement Administration (DEA). Before providing the committee with an overview of our agency operations and summary of our fiscal year 2001 budget request,

I would like to take this time to express my sincere gratitude for the ongoing support of this Subcommittee and entire U.S. Senate. Without your support, DEA could

not continue to effectively meet the growing challenges posed by increasingly sophisticated and dangerous international drug trafficking organizations which operate

with impunity throughout the global community. Your ongoing efforts work to send

a message to these traffickers that their assault on the citizens of this nation will

not be taken lightly and that we will continue to fight to ensure that our streets

remain safe for generations to come.

MISSION AND APPROACH

The mission of the Drug Enforcement Administration (DEA) is to enforce the Controlled Substances laws and regulations of the United States and to bring to the

criminal and civil justice system those organizations involved in the growing, manufacturing and/or distribution of controlled substances destined for the United States.

The DEA also recommends and supports non-enforcement programs aimed at reducing the availability of illicit controlled substances on both domestic and international markets. To accomplish this mission, DEA works with international, federal, and state and local law enforcement partners to target and immobilize the organizations of major drug traffickers operating at all levels of the drug trade.
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Because DEA is the only single-mission federal agency dedicated to drug law enforcement, the agency has, over the years, developed the ability to direct resources

and manpower to identify, target and dismantle drug organizations headquartered

overseas and within the United States. DEA’s strategy to successfully accomplish

these goals is straightforward, requiring that the agency’s resources and manpower

be focused on all three levels of the drug trade: the international, national/regional

and local levels. Each of these categories represents a critical aspect of the drug continuum which affects communities across the nation.

The 9,000 dedicated men and women of the DEA are committed to improving the

quality of life of the citizens of the United States. The agency directs and supports

investigations against the highest levels of the international drug trade, their surrogates operating within the United States, and those traffickers whose violence and

criminal activities destabilize towns and cities across the country. These investigations are intelligence-driven and frequently involve the cooperative efforts of numerous other law enforcement organizations.

DEA’s strategy to successfully impact drug trafficking at all levels of operation is

flexible and reflects the constantly-changing nature of the drug trade. In concert

with the Department of Justice and the Office of National Drug Control Policy

(ONDCP), DEA has crafted an innovative and effective program to keep pace with

developments and shifts in the drug trafficking spectrum and bring both national

and international drug traffickers to justice.

DRUG TRAFFICKING THREAT TO THE UNITED STATES

The heads of the most powerful drug trafficking organizations impacting the

United States today are based in Mexico and Colombia. Believing they are safe from

the U.S. justice system, they tightly control their operations by directing a large

number of surrogates who carry out orders on U.S. soil. These operatives are responsible for the vast majority of the cocaine, heroin, methamphetamine and marijuana trafficking taking place in U.S. communities. Surrogates answering to drug

lords based in Mexico also produce methamphetamine, both in that nation and in

the U.S., particularly in California. These producers and traffickers are responsible

for over 75 percent of the methamphetamine that is available in U.S. communities

today.

Traffickers based in Mexico pose a significant threat to the United States because

of their power, influence and dominant status in the drug trade. Where at one time

traffickers from Colombia controlled the vast majority of cocaine trafficking, traffickers from Mexico today are responsible for transporting cocaine into and throughout U.S. markets. The heads of organizations based in Colombia rely almost entirely

on traffickers from Mexico to transport and distribute cocaine while they direct operations from the safety of their headquarters in Cali or Bogota. In one recent case

entitled Operation Millennium, the director of a powerful Colombian organization

wrongly believed that by distancing himself from his organization’s U.S. operations,

he would make himself immune from indictment.

The major organizations based in Mexico—the Arellano-Felix organization, the

Amezcua Contreras brothers, the Amado Carillo Fuentes group and the Caro

Quintero organization—all have a demonstrable negative impact on the United

States. The leaders of these groups are routinely indicted in U.S. judicial districts

for drug trafficking offenses committed on U.S. soil.

In recent years, these traffickers have become more prominent in the drug trafficking trade within the U.S. They are responsible for manufacturing methamphetamine in Mexico and California and trafficking it to cities such as Des Moines,

Boise, Atlanta and Salt Lake City. Major organizations based in Colombia and Mexico also rely on surrogates from Mexico to move multi-ton quantities of cocaine

across the United States, including locations on the East Coast.

While traffickers from Mexico have a direct impact on drug trafficking trends in

the United States, it is important to note that many major traffickers are still operating from Colombia where the cocaine and heroin trade are centered. The largescale production of Colombian heroin has created major U.S. markets for this high

quality product. In 1998, the latest year for which we have statistics, South American heroin comprised 62 percent of the heroin seized by federal authorities and

analyzed by DEA’s Special Testing and Research Laboratory. Cocaine production

has also increased dramatically since 1994, and it is possible that Colombian cocaine

yield may be as much as three times that of previous estimates.

None of the major drug traffickers headquartered overseas could operate without

the assistance of national and regional drug trafficking organizations which are responsible for trafficking huge quantities of drugs into U.S. communities. These organizations are comprised of a network of operatives who transport, store and dis-
230

tribute drugs throughout the United States and whose activities are directed by

drug lords based in foreign countries. In many cases, national and regional drug

trafficking organizations are comprised of numerous cells whose directors are responsible for specific tasks such as communications, financial matters and/or logistics. These cell heads are sent to the United States for a period of time to carry

out the business mandates of the top drug lords and are given specific tasks to accomplish. The national and regional drug syndicates have infiltrated many states

and communities, bringing with them the crime and violence once limited to major

urban areas. A survey of recent DEA investigations revealed that over 400 investigations stemming from Operations Reciprocity and Limelight involved drug traffickers from foreign countries who had set up operations in various cities across the

United States.

Local violent drug trafficking organizations also operate across the United States

and are responsible for eroding the quality of life in many American communities.

Previously centered in major urban areas, violent drug trafficking groups are now

part of the landscape in smaller cities and rural areas. Fueled in large part by

methamphetamine production and trafficking, violent drug trafficking organizations

are now affecting the crime rates in smaller cities such as Spokane, Washington and

Cedar Rapids, Iowa. While these local, violent groups appear to be unrelated to the

large international drug trafficking organizations headquartered overseas, it is important to note that all of the cocaine and heroin that is trafficked by these groups

is produced overseas and transported to the United States for eventual distribution

on the local level.

DRUG ABUSE IN AMERICA—THE CHANGING DEMOGRAPHICS

Although drug abuse among young people increased significantly over the past

decade, recent statistics indicate that this trend may be stabilizing. Even with this

positive trend, there continues to be sobering news brought to our attention daily

regarding the state of drug use in smaller cities and rural areas, fueled by the proliferation of methamphetamine production and trafficking, and the increased availability of cheap, high-purity heroin from Colombia.

Although there has been a decrease in violent crime in major cities due to vigorous law enforcement efforts, similar reductions in the violent crime rates of smaller cities, suburban and rural areas have not been realized. In fact, many smaller

cities are now confronting the same problems that larger urban areas faced a decade

ago. While 1998 violent crime rates decreased (¥9.5 percent) in cities having populations between 250,000 and 999,999, significantly smaller decreases took place in

suburban counties (¥5 percent) and rural areas (¥2 percent). Between 1997 and

1998, violent crime rates actually increased in a number of mid-sized communities.

A recent reported released by the Center on Addiction and Substance Abuse at

Columbia University (CASA), indicates that eighth graders living in rural America

are 79 percent more likely than their urban counterparts to use amphetamines, including methamphetamine. They are also 75 percent more likely to use crack cocaine, 52 percent more likely to use cocaine and 26 percent more likely to smoke

marijuana than young people in major urban locations.

The report also states that according to recent surveys, it is as easy for young

people in rural areas and small cities to obtain drugs as it is for their urban counterparts. Additionally, from 1990 to 1998, smaller cities experienced significantly

more drug violations than larger cities; for instance, cities with populations of

25,000 to 50,000 people had three times as many drug violations as larger cities.

In cities with fewer than 10,000 residents, the level of drug violations was six times

higher than that found in larger cities.

The media has reported the tragic results of increased drug use in cities like

Plano, Texas Orlando, Florida and Elkton, Maryland. Smaller cities are generally

unable to meet the demands for social services and treatment placed on them when

a methamphetamine or heroin epidemic hits. Additionally, law enforcement agencies

are often unprepared to address the full range of issues associated with methamphetamine lab cleanups and investigations.

In the end, all three facets of the drug trafficking trade—the international, national/regional and local levels—are interrelated and interdependent. As these different echelons of the drug trade in each of these levels work together, it is essential

that our nation’s the law enforcement response address all three of these levels simultaneously.

DEA’S STRATEGY

In order to meet the enormous challenges posed by internationally-based narcotics

traffickers and their surrogates within the United States, DEA has developed an ef-
231

fective five-year strategic plan which makes use of the agency’s unique skills and

limited resources to achieve the maximum impact against international, national/

regional and local drug traffickers through the use of intelligence-driven investigations.

DEA’s strategy takes into account the current drug trafficking situation affecting

the United States and identifies the characteristics and vulnerabilities of all three

levels of the drug trade, responding to each of these levels simultaneously:

International Targets.—This category is comprised of trafficking organizations

based in foreign countries that are the primary source of supply for their surrogates

within the U.S. Through DEA’s International Operations program and the efforts

of the agency’s Special Operations Division (SOD) and numerous field divisions

throughout the country, DEA effectively targets these organizations and their members.

National/Regional Targets.—These organizations operate domestically throughout

the United States and are responsible for distributing drugs from international and

domestic sources to U.S. communities. In many cases, these groups report directly

to major drug lords overseas. They also operate on a national or regional basis, supplying several markets. The vast majority of DEA’s cases fall into this category and

investigations against members of these organizations are generated and supported

by every DEA office in the United States.

Local Initiatives.—Criminal organizations operating at the local level generally

deal in smaller quantities of drugs and are responsible for providing these drugs to

users within the United States. Through local enforcement initiatives such as the

Mobile Enforcement Team (MET) program, DEA works with state and local counterparts to identify and immobilize these organizations and to arrest the most violent

members of these groups.

Using this strategy, DEA has successfully targeted significant traffickers and organizations in each of these categories. Over the past several years, major cases tied

to each of these categories have resulted in the arrest of thousands of major violators.

International targets

Operation Millennium.—Less than one month after the successful conclusion of

Operation Impunity, an operation aimed at the highest level of the drug trade operating within the U.S., an important international law enforcement operation made

headlines. Operation Millennium, a one-year operation designed to dismantle a Colombian-based transportation consortium believed to be responsible for supplying

between 20 and 30 tons of cocaine per month to the United States and Europe, resulted in the arrest of more than 30 drug traffickers and money launderers, including alleged high-profile trafficker Alejandro Bernal Madrigal, and Fabio Ochoa. The

operation also resulted in the seizure of over 13,000 kilograms of cocaine. Critical

to the success of the operation was the unprecedented level of cooperation between

DEA, the Colombian National Police, the Fiscal General of the Republic of Columbia, the U.S. Attorney’s Office in Miami and the Justice Department’s Criminal Division.

Operation Juno.—Initiated after the seizure of approximately 386 kilograms of

liquid cocaine concealed in a shipment of frozen fish destined for the United States,

Operation Juno, which began in September 1996 and concluded in August 1999, was

unique in that for the first time in drug enforcement history, the U.S. government

set up an undercover brokerage firm to aid in intercepting drug dollars destined for

the Colombian black market. Operation Juno resulted in over 40 arrests, the seizure

of $10.0 million and warrants against 59 bank accounts at 34 U.S. banks and 282

accounts at 52 foreign banks. Monies in these targeted accounts were believed to

total another $16.0 million. The investigation also resulted in the seizure of 3,601

kilograms of cocaine and 106 grams of hashish oil.

Operation Columbus.—Concluding in October 1999, Operation Columbus was a

multi-national, regional enforcement effort involving Colombia, Venezuela and Panama, and the island nations of the Caribbean. This operation focused on air, land

and maritime interdiction, eradication and clandestine airstrip denial. The final arrest and seizure statistics for Operation Columbus were unprecedented for this region, resulting in more than 1,290 arrests, as well as the seizure of 900 kilograms

of cocaine and nine kilograms of heroin. Over 38 weapons, 26 vehicles, 27 vessels,

three laboratories and one aircraft were also seized. In addition, 1,097 metric tons

of marijuana were eradicated. In the end, Operation Columbus struck a solid blow

against the operations of Caribbean-based drug trafficking groups.
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National/regional targets

Operation Impunity.—This two-year international investigation concluded in September, 1999, and resulted in the arrest of 109 individuals, including three major

drug trafficking cell heads, linked to the Mexican-based Amado Carillo Fuentes organization. The operation was coordinated by DEA’s Special Operations Division

(SOD) which headed a combined investigative center involving the DEA, U.S. Customs Service, FBI and IRS. Besides substantially hindering the trafficking organization’s ability to move cocaine and other drugs into, and around, the United States, Operation Impunity succeeded in seizing $19.0 million in U.S. currency, another

$7.0 million in assets and well over 12,434 kilograms of cocaine and 4,800 pounds

of marijuana.

Operation Heartland.—Beginning in October 1997, this investigation targeted the

Martin Chavez Organization, a multi-pound methamphetamine and marijuana importation and distribution operation that was responsible for transporting marijuana and methamphetamine from Mexico into the United States via the Juarez/

El Paso, Texas corridor to the Oklahoma City, Oklahoma area. Over the next several years the scope of this investigation spread to include DEA offices in Fresno

(California), El Paso (Texas), Dallas (Texas) and Des Moines (Iowa). Information obtained as a result of the investigation resulted in the seizure of 47 pounds of methamphetamine, 525 pounds of precursor chemicals, 1,378 pounds of marijuana,

$47,500 in U.S. currency and the arrest of 22 individuals. Additional indictments

were anticipated, including one for Chavez—currently a fugitive.

Mario Ibarra Sanchez Investigation.—The Mario Ibarra Sanchez Organization

was in charge of transporting and distributing large quantities of methamphetamine, amphetamine, heroin and cocaine for trafficking organizations operating in

both Mexico and the United States. On November 11, 1998, DEA conducted an investigation, in conjunction with several state and local law enforcement agencies,

that resulted in the issuance of nine federal search warrants and 10 federal arrest

warrants against members of the Sanchez organization. Those arrested included the

cell leader and a significant methamphetamine laboratory operator based in Mexico.

The investigation ultimately resulted in the seizure of 65.5 pounds of methamphetamine, 30.4 pounds of black tar heroin, 106.3 pounds of amphetamine, 154.0 pounds

of cocaine and $156,600 in U.S. currency.

Omaha, Nebraska RET Deployment.—In September 1999, the Des Moines Regional Enforcement Team (RET) deployed to Omaha, Nebraska to assist in a methamphetamine investigation. A court-authorized wire intercept was initiated on two

cellular telephones utilized by the targeted organization. As a result of these efforts,

the Omaha District Office, along with the Des Moines RET, identified individuals

in Juarez, Mexico; El Paso, Texas; and Los Angeles, California, who were directly

linked with the transshipment of cocaine, marijuana and methamphetamine to

Omaha, Nebraska, for distribution purposes. On October 20, 1999, a Federal Grand

Jury in Omaha, Nebraska indicted 19 individuals, 17 of whom were arrested. This

indictment included the arrest of the primary targets, along with others, effectively

dismantling the targeted organization in Omaha. Additionally, this investigation resulted in the seizure of six kilograms of cocaine; one pound of methamphetamine;

200 pounds of marijuana; and, $22,000 in U.S. currency. Evidence gathered during

the intercept of telephones utilized by the targeted organization continues to be exploited for use in investigations in California, Texas, Nebraska, and Mexico.

Operation Trinity.—In October 1997, DEA, FBI, Customs and DOJ initiated Special Enforcement Operation Trinity, a joint strategy designed to target the primary

domestic trafficking organizations that are controlled by criminal leaders in Colombia, Mexico and the Dominican Republic. The primary phase of Operation Trinity

concluded on September 25, 1998; no new investigations were accepted after July

1998. At this time 220 cases were still active. Preliminary figures for all Operation

Trinity investigations include over 1,260 arrests, with drug seizures totaling 12.8

metric tons of cocaine, 63,370 lbs. of marijuana, 3,178 lbs. of methamphetamine, 127

lbs. of heroin, 108 lbs. amphetamine and over 137,600 pseudoephedrine tablets.

Asset seizures from the case total over $59.2 million in U.S. currency, $1.2 million

in assets and 132 vehicles.

Operation META.—Operation META, which concluded in December 1997, targeted a major U.S. methamphetamine-trafficking organization that was supplied by

the Amezcua-Contrera group from Mexico. This investigation combined the efforts

of DEA, FBI, other federal agencies and state and local agencies from 17 U.S. cities

in nine different states. It resulted in the arrest of 121 members of the trafficking

ring and the seizure of 133 pounds of methamphetamine, 1,765 pounds of marijuana

and 1,100 kilograms of cocaine. During the META raids, agents discovered and dismantled three methamphetamine labs that were each capable of producing more

than 300 pounds of methamphetamine at a time. Operation META seizures were
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especially important because they alerted the law enforcement community to the

growing methamphetamine problem in the United States.

Southern Frontier.—In recent years, DEA has undertaken several successful operations in support of the agency’s Southern Frontier Initiative. Operation Zorro II,

Operation Reciprocity and Operation Limelight, each of which relied extensively on

numerous court-ordered wiretaps that were coordinated and monitored by area law

enforcement, collectively resulted in the arrest of 156 individuals and the seizure

of over 22,000 kilograms of illegal drugs and over $35.0 million.

Local initiatives

Mobile Enforcement Team Program.—As a response to the overwhelming problem

of drug related violent crime which has plagued communities and neighborhoods

across the United States, DEA’s Mobile Enforcement Team (MET) program was created in early 1995 as a means of dismantling drug organizations by securing the

conviction and incarceration of those individuals dealing drugs and causing violence

in these communities. Recent examples of MET program successes include the following: —Phoenix, Arizona.—From July 1998 until March 1999 the Phoenix Field Division MET worked closely with the Northern Arizona Street Crimes Task Force

in targeting the Colimas and Costillo drug-trafficking organizations. The Colimas organization was responsible for supplying street-level dealers with multiple-pound quantities of methamphetamine. The Costillo organization, a

polydrug trafficking group, had a reputation for extreme violence; some of its

members had criminal histories, which included armed robberies, home invasions, assault, sex crimes, and child abuse. Using confidential sources, the MET

was able to successfully infiltrate these two organizations and severely disrupt

their operations. The nine month deployment, resulted in the seizure of seven

operational and three dismantled methamphetamine labs, 44 grams of heroin,

22 pounds of marijuana, 500 dosage units of LSD, 40 weapons, 18 motor vehicles, and $16,292 in U.S. currency. In addition, The MET secured 86 arrests,

including the arrests of two primary targets: Jose Francisco Colimas and Ricardo ‘‘Duke’’ Castillo. —Brownwood, Texas.—At the request of local police, DEA’s Dallas Division MET

deployed to Brownwood, Texas from October 1998 to March 1999 in an effort

to combat narcotics-related violence problems within this community. The five

month deployment resulted in 22 federal indictments and 19 state arrest warrants. The initial sweep resulted in 38 arrests (20 federal and 18 state). In response to the operation, the Brownwood District Attorney stated, ‘‘This DEA

MET deployment was significant in getting important drug dealers off the

street and making a major impact in the community. This is a perfect example

of what happens when all parties cooperate and collaborate towards a common

goal.’’ —Warren, Ohio.—At the request of the local police chief, DEA’s Detroit Division

MET deployed to Warren, Ohio from January to May 1999 in an effort to target

a significant increase of crack cocaine trafficking and related violence within

this community. The primary deployment targets were members of a violent

drug distribution organization operating in Warren. This five month deployment

resulted in the arrest of 16 individuals (11 arrested on state charges that include mandatory sentences upon conviction); the execution of six search warrants; and, the seizure of 650 grams of crack cocaine. In addition, $8,100 in U.S.

currency was seized, along with nine weapons including two semi-automated

handguns with laser sights and seven rifles. In addition, the primary targets

of this deployment were also arrested.

FISCAL YEAR 2001 BUDGET REQUEST

In an effort to support DEA’s evolving drug strategy through both ongoing and

developing agency operations, in fiscal year 2001 we are requesting additional programmatic resources through three primary budget initiatives: our Domestic Drug

Enforcement Initiative, Intelligence Initiative, and Infrastructure initiative.

Funding requested through DEA’s Enforcement Initiative includes 18 positions

(11 Special Agents) and $3.1 million for the agency’s Special Operations Division.

SOD-coordinated investigations enable DEA and its drug law enforcement counterparts to attack the command and control infrastructures of major drug trafficking

organizations at their most vulnerable point—their lines of communication. In order

for these organizations to operate effectively within the global community, extensive

coordination and communication between all echelons of their operations is required. DEA’s main weapon in thwarting the communications infrastructures of

these organizations is the use of Title III wiretap investigations. As DEA addresses
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emerging drug threats, requests for Title IIIs and intelligence assistance are expected to increase dramatically. In order to meet these requests, DEA requires additional resources for SOD investigations along the Southwest Border and for SOD’s

Financial Investigations program. Enhancements requested for fiscal year 2001 include nine positions (six Special Agents) and $1.671 million to coordinate additional

multi-division Title III investigations along the Southwest border and nine positions

(five Special Agents) and $1.429 million to establish a Money Laundering and Financial Investigations Section within SOD, providing DEA with national oversight

and coordination on Title III money laundering investigations.

DEA requests a total of $1.5 million through the agency’s Intelligence Initiative.

Intelligence driven investigations represent the best means of quickly and efficiently

targeting, investigating and dismantling major drug trafficking organizations. Our

Intelligence Initiative focuses exclusively on providing DEA’s intelligence program

with the tools necessary to address all facets of the agency’s investigative requirements. Further development of DEA’s drug intelligence and information sharing capabilities is vital to efforts to maximize federal, state, and local anti-drug assets.

The resources requested through this initiative will provide DEA with additional

support for drug intelligence operations through further development of DEA’s El

Paso Intelligence Center Information System (EIS). This system, which collects, distributes and analyzes reported data on worldwide drug trafficking trends and drug

organization operations, is critical in the facilitation of information sharing with

other federal, state and local law enforcement agencies.

Finally, DEA requests a total of 26 positions and $59.957 million through the

agency’s Infrastructure Initiative. DEA’s dynamic enforcement and intelligence missions continue to place great demands on the agency’s key operational support programs. As such, critical investments in technology for projects such as the agency’s

FIREBIRD office automation system and financial management system are essential to the successful performance of drug law enforcement. In fiscal year 2001 DEA

is requesting two positions and $55.908 million to fully support the Operations and

Maintenance (O&M) and Technology Renewal requirements of the agency’s FIREBIRD office automation system and 24 positions and $3.957 million to enhance the

agency’s financial and resource management oversight capacity. Without these additional resources, DEA will not be able to continue to effectively provide necessary

support for the growing number of Special Agents, Intelligence Specialists and Task

Force Officers working actively to identify, target and dismantle drug trafficking organizations around the globe.

This concludes my presentation of DEA’s fiscal year 2001 budget request. I would

be happy at this time to take any questions the Committee Members may have regarding DEA operations, programs or requested budget enhancements.

METHAMPHETAMINE REQUEST

Senator GREGG. Yes, thank you, Administrator. I appreciate that.

In looking over your budget specifically, I notice there was not

a request for methamphetamine initiatives, which has been a fairly

high priority of this committee and, I thought, of the agency over

the last few years.

When you submitted your request to OMB, was there a methamphetamine request in there?

Mr. MARSHALL. Senator, we have enjoyed, with your support,

funding increases in methamphetamine issues over the last several

budget years, and this year we did submit a request for an additional, I believe it was 187 positions and $43.7 million to target

methamphetamine issues in this country, to provide clandestine

laboratory clean-up, and training to other law enforcement agencies. The Department of Justice supported this request and submitted it to OMB.

Senator GREGG. How many was that?

Mr. MARSHALL. 187 positions, 108 special agent positions, $43.7

million.

Senator GREGG. And that was eliminated by OMB, I presume?

Mr. MARSHALL. That is my assumption, sir.
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1 A total of 18 positions (11 special agents) and $3.1 million is provided for SOD in the President’s fiscal year 2001 budget submission. The remaining SOD program requirement is 23 positions and $10.965 million.

FUNDING FOR OTHER DEA INITIATIVES

Senator GREGG. I have to tell you, I looked at your budget and

I said something is missing here. What other requests of significance were eliminated?

Mr. MARSHALL. Well, DOJ approved a heroin initiative and

money-laundering initiative, a Special Operations Division initiative, a bit larger initiative on our infrastructure and our intelligence and I would be able to submit all of the details of those for

the record if you would like.

Senator GREGG. I would appreciate that. What would be the appropriate amount that was involved in those accounts?

Mr. MARSHALL. It looks like one initiative was on the order of

$75 million, another initiative on the order of $32 million, and another on the order of $76 million.

Senator GREGG. These were all for the purposes of fighting the

drug war?

Mr. MARSHALL. Yes, they were.

[The information follows:]

DEA FISCAL YEAR 2001 UNFUNDED BUDGET REQUEST

Total Enhancement Request

513 positions (248 special agents) and $185,257,661.

Includes items requested in DEA’s fiscal year 2001 OMB budget request as well

as selected items from DEA’s fiscal year 2001 Congressional request.

None of the individual items requested in this document should be provided to

DEA if it would require a reduction to the agency’s existing base program resources.

Initiative I: Strategic Domestic Enforcement

Total includes: 412 positions (242 special agents) and $75,839,464 to implement

DEA’s Strategic Domestic Enforcement Initiative, a comprehensive, multi-faceted

enforcement approach designed specifically to combat the surrogates of major drug

trafficking organizations operating within the U.S. and their command and control

centers based throughout the world. —187 positions (108 special agents) and $43,706,839 to comprehensively target

methamphetamine production and trafficking organizations operating in the

United States. Resources will be used to increase DEA’s investigative capabilities, enhance training efforts and provide the funding necessary to safeguard

America’s communities from the potential health and environmental threats

posed by clandestine laboratories. Total includes: 169 positions (104 special agents) and $17,807,392 to enhance domestic methamphetamine enforcement efforts; 10 positions and $21,845,000

for clandestine laboratory cleanup; and 8 positions (4 special agents) and

$4,054,447 to enhance DEA’s clandestine laboratory training program. —85 positions (50 special agents) and $8,852,274 to combat drug trafficking organizations operating along the United States’ Southern Frontier, including the

Southwest Border and the Caribbean Corridor. —85 positions (51 special agents) and $8,930,029 to target major heroin trafficking organizations operating in the United States and fund the completion

of DEA’s five year heroin enforcement plan.

—32 positions (20 special agents) and $3,385,454 to strengthen DEA’s program

management functions and field enforcement capabilities in the field of drug related financial investigations and money laundering. The request will fund the

establishment of two Regional Financial Investigations Groups (RFIG’s) based

in New York and Los Angeles.

—23 positions (13 special agents) and $10,964,868 to support DEA’s Special Operations Division (SOD) operations.1

Total includes: 4 positions (3 special agents) and $926,336 for SOD related

methamphetamine enforcement efforts; 7 positions (4 special agents) and
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2 $2.0 million of this total is requested by DEA for MERLIN in its revised Plan Colombia submission. 3 $2.5 million of this total is requested by DEA for NEDRS in its revised Plan Colombia submission. 4 If the requested $600,000 for NDPIX is provided, DEA asks that this funding be recurred

in the outyears. 5 A total of $1.5 million is provided for EPIC EIS in the President’s fiscal year 2001 budget

request for DEA. The remaining EIS program requirement is $1.8 million. DEA asks that if provided, this funding recur in the outyears. 6 A total of 2 positions and $56.0 million is requested for DEA’s FIREBIRD system in the fiscal year 2001 President’s budget request. DEA’s remaining FIREBIRD program deployment requirement is 4 positions and $30.1 million.

$1,094,509 for SOD related Latin America and Caribbean enforcement efforts;

9 positions (6 special agents) and $1,351,885 for SOD related Europe and Asia

enforcement efforts; and 3 positions and $7,592,138 to provide critical linguist

support of Title III investigations through the Interagency Crime and Drug Enforcement (ICDE) program.

Initiative II: Intelligence

Total includes 76 positions (44 Intelligence Specialists) and $32,778,627 to provide

vital investigative support in identifying, developing, and exploiting the information

and intelligence necessary to enhance the effectiveness of drug law enforcement.

—10 positions (3 special agents; 5 Intelligence Specialists) and $4,937,000 to develop an Academy for Drug Intelligence (ADI) that will provide criminal and

drug intelligence analytical training to federal law enforcement agencies and

where appropriate, state, local and foreign agencies.

—2 positions and $12,371,866 to accelerate the installation of DEA’s MERLIN intelligence system into the agency’s remaining domestic division, district and

resident offices.2

—5 positions (4 Intelligence Specialists) and $6,447,785 to enhance DEA’s Narcotics Enforcement Data Retrieval System (NEDRS) project in support of the

agency’s Special Operations Division.3

—54 positions (40 Intelligence Specialists) and $5,314,311 to provide dedicated intelligence staff and support to High Intensity Drug Trafficking Areas (HIDTA),

which are playing a major role in interagency drug law enforcement cooperation

throughout the United States.

—$600,000 to meet expanded federal, state and local participation in DEA’s National Drug Pointer Index (NDPIX) information system.4

—$1,800,000 to operate, maintain and enhance DEA’s El Paso Intelligence Center’s (EPIC) Information System (EIS).5

—$750,000 to continue the conversion of DEA’s investigative records to an electronic format by the end of 2001, thereby allowing direct, desktop access to the

agency’s complete investigative records.

—5 positions and $557,665 to expand DEA’s Computer Forensics Program, working to heighten DEA’s intelligence collection and case support activities and

allow the agency to better identify and target major drug violators.

Initiative III: Infrastructure

Total includes 25 positions (14 Technical/Clerical) and $76,639,570 to provided

critical support to DEA’s enforcement operations.

—4 positions and $30,100,000 to achieve full deployment of DEA’s FIREBIRD office automation system by the end of CY 2001 and establish sufficient infrastructure funding to support the system at expanded levels.6

—$16,000,000 to address DEA’s Permanent Change of Station (PCS) requirements.

—$10,500,000 for the purchase of a twin-engine plane for DEA’s Mexico City

Country Office and a twin-engine helicopter to support DEA operations in the

Bahamas.

—15 positions (3 special agents) and $1,477,294 to enhance DEA training programs and infrastructure at the newly completed Justice Training Center at

Quantico, Virginia.

—$3,878,000 to enhance DEA’s laboratory equipment base and refresh the agency’s equipment inventory in line with accepted industry standards.

—4 positions and $1,403,732 to fully implement an Automated Fingerprint Identification System (AFIS) in DEA’s field drug laboratories.

—2 positions and $13,380,544 to enhance DEA’s Personnel Security Section to ensure compliance with all of the agency’s background investigation requirements.
237

COLOMBIA SUPPLEMENTAL

Senator GREGG. In the proposal that came to us, the Colombia

supplemental, which was a $1.6 billion initiative, the purpose of

which was to send helicopters to Colombia and do other things

within Colombia to eradicate drug activity, I noticed that the DEA

role in that was about $3 million. Is that right?

Mr. MARSHALL. By my count it is something on the order of between $5 and 6 million.

Senator GREGG. Of the $1.6 billion?

Mr. MARSHALL. Yes, sir.

Senator GREGG. I guess the question arises, and you may not

want to answer this but I would be interested if you do and I understand if you do not, but as the premier drug-fighting agency, as

the people primarily charged with the portfolio of addressing fighting drugs, how can you have an initiative where we are going to

spend $1.6 billion and end up with your agency representing less

than one-half of 1 percent of the dollars being spent?

Mr. MARSHALL. Well, there are some other funding items in this

plan for the Department of Justice and I understand that about

$40 million is going to the Department of Justice. Those are for

such things as multilateral investigations, prosecutors, victim witness programs, and training for the judiciary. We are currently discussing with the Department of Justice how DEA can access some

of that money.

We did get, I think, the couple of main things that we wanted

in this bill, and that was to support our intelligence operations, targeting operations in the country of Colombia with the Colombian

National Police. I do support Plan Colombia. I do recognize that the

Colombian National Police in our bilateral investigations with

them have been a critical component of our successes overseas.

They have been wonderful allies and we need to continue to support them and we have to find ways to continue to work these multilateral investigations.

So I would hope that in the future we could find ways to enhance

our relationship even more, beyond the $40 million that is in Justice appropriation for Colombia.

Senator GREGG. I understand that but I am just thinking in the

order of priorities. It appears that about $200 million of the requests which you prioritize for fighting drugs did not come forward.

And yet we received a $1.6 billion supplemental for fighting drugs

in Colombia and most of that is going to flow to some defense contractor, who is going to sell them some helicopters. From my standpoint I am not sure we get the return that we get when we give

your agency the support it needs; for example, methamphetamines,

which is something that is a really high priority for States like

Missouri and Colorado, and I suspect New Mexico. The problem

has not really gotten as severe in the Northeast as it has in the

West, and it is certainly significant.

Senator Hollings?

Senator HOLLINGS. Can I question both of them?

Senator GREGG. Yes.
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DRUG TRAFFICKING IN MEXICO

Senator HOLLINGS. Mr. Marshall, that is the main thing. Are

drugs on the increase or decrease in Mexico?

Mr. MARSHALL. Well, I think that right now the traffic through

Mexico accounts for the vast majority of drugs coming into this

country from foreign sources. I would have to say that it is on the

increase at this point.

Senator HOLLINGS. Well, bless you. I backed Constantine and

now I would be delighted to back you because I think you speak

the truth. It just amazed me that the administration at the first

of this month certified Mexico on the decrease, that they are fully

cooperating with the United States, and Constantine just told the

New York Times we know who the leaders of the cartel are and

everything else, but we cannot get any cooperation to bring them

to justice. They shoot or kill the chief of police at Tijuana. We are

digging up bodies over there at Juarez and Matamares and other

places. It just gets worse and worse and yet we keep certifying it

as a wonderful thing.

This place here in Washington is Alice in Wonderland. We call

a deficit a surplus. Thirty years we have said that Taiwan was not

sovereign but a part of China. Now we threaten to defend it as sovereign. The freedom to buy an office is the freedom of speech and

a deficit is a surplus and an increase is a decrease, according to

the White House.

FBI-CIA COORDINATION

Mr. Freeh, let me ask you about the coordination that you have

with George Tenet and the CIA because I have investigated on the

Hoover Commission both the FBI and the Central Intelligence

Agency and they were extreme competitors, jealous, arresting each

other, spending a lot of time, money and agents spying on each

other to get the case first and everything else like that.

That is why I sort of hesitate going over to Prague, Seoul, Santo

Domingo, Nairobi, Amman, and Bucharest. Do you have a good

working relationship with the Central Intelligence Agency?

Mr. FREEH. Senator, we have an excellent relationship not just

on the director-to-director level but on the institutional and operational levels. You are absolutely right. That is not a historical

phenomenon. In fact, it is a recent development, I would say within

the last 5 or 6 years. I cannot think of better cooperation.

If I could go into some details, perhaps not at this session, but

talk about some of the operations which have been directed against

subjects like Usama Bin Laden and Kasi—who was brought back

to the United States for the murder of CIA employees. During the

recent events over the millennial period, the FBI and the CIA operated in lock-step around the world, to the benefit of our country

and our friends. We are very, very pleased with that and I do not

think you will find a better relationship institutionally or individually.

We have a lot of FBI officials who are over at the CIA in key decision-making positions. George Tenet has some of his senior officers at the FBI with line authority in counterterrorism programs.

We have a regular series of liaisons and coordinations between our
239

chiefs of station overseas and our legal attache ́s. The chiefs of station will tell you that they need the legal attache ́s presence to supplement their mission, which is one mission, the mission of protecting the country. I do not think you will find that coordination

working better in terms of fugitive cases, preventing cases in terms

of terrorism, finding people, bringing them back here, and sharing

information. I am very pleased with the relationship.

Senator HOLLINGS. It is a practical problem because those who

are willing to give us information in that world are not necessarily

Sunday school teachers. If you have a terrorist who has given us

information, who rules? Do you arrest him, get him, or do we keep

getting the information from the terrorist?

Mr. FREEH. With respect to terrorism, the first objective is to prevent an act of terrorism, and second, to apprehend and bring the

individual back. We have brought back people like Shirosaki, who

committed crimes against the United States nearly 15 years ago.

We have brought back 12 major terrorism fugitives into the United

States in the last 4 years so they can be prosecuted here. It is our

primary objective to find them, bring them back here and have

them taken to a court of justice.

CRIME PROBLEM IN SOUTH KOREA

Senator HOLLINGS. Do you have terrorists or Mafia activity out

of Seoul, Korea? I see some of the places there that I understand,

but I am rather surprised that you have that kind of activity coming out of Seoul, Korea that would require a legate.

Mr. FREEH. We have several cases, cases around the United

States where Korean-Americans and Korean nationals are involved

in organized criminal enterprises. That is not a new phenomenon.

We have a huge amount of economic crime and fraud, which has

connections between Korea and the United States. There is a very

strong overlap of jurisdictional interest in not only organized crime

areas but white collar crime areas—fraud areas, and smuggling, including the smuggling of drugs and narcotics, which Mr. Marshall

could talk about. So there are a lot of things that occupy us together.

Just to go back to your earlier question about the necessity for

agents overseas, there are only 113 FBI agents overseas. That is

to cover literally the world. And the return the United States gets

on that investment is immense. In fact, just in today’s papers you

will see two stories. One is the successful result of an FBI investigation in Thailand which located a fugitive, a man who had been

convicted over 10 years ago for two rapes in the State of Minnesota, arrested because of the FBI’s presence and activities overseas, and who will be brought back to serve the rest of his sentence.

Also, in the People’s Republic of China, arrests were made as a

direct result of the FBI activity of people who are charged with the

murder of five people in Boston several years ago.

So this is the kind of reach and capacity that the FBI’s very

small presence gives us overseas.

[Subsequent to the hearing, the following clarification was provided:]
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CLARIFICATION ON AGENTS OVERSEAS

The FBI currently has 35 active Legal Attache ́ offices overseas on every continent

except Antarctica. These offices are within our U.S. embassies. As of March 16,

2000, the 35 offices were staffed by 154 FBI employees, of which 90 are agents.

In a March 29, 2000, letter to the Hill, the FBI proposed a reprogramming/reallocation of resources to increase the Legal Attache ́ presence overseas to 186 FBI

employees, of which 112 would be agents.

Senator HOLLINGS. Thank you very much.

Thank you, Mr. Chairman.

FBI LABORATORY MODERNIZATION

Senator GREGG. Senator Domenici.

Senator DOMENICI. Thank you, Mr. Chairman.

Director Freeh, I want to commend you on a couple of things that

have been accomplished in the last few years; one, the modernization of your crime laboratory with the new director that, incidentally, you personally chose. For those who wonder what kind of a

person the FBI chose to be the director of their crime laboratory

and turn it around and put it back where it is world renown, he

chose a former director of Los Alamos National Laboratory, a physicist.

Senator HOLLINGS. Oh, I thought it was a Chinaman.

Senator DOMENICI. No, a physicist, and he has done a great job

and, frankly, it is just the right kind of work for him. I never did

look at him that way but they did in terms of his great scientific

prowess and organizational ability. I think he has been a real

asset, and I assume you think your laboratory is doing much better, right?

Mr. FREEH. It is, Senator, thanks to him and the support we

have gotten here. The accreditation was very important but his scientific leadership, which we have never had before in 90 years, is

really well felt.

HEROIN PROBLEM IN NORTHERN NEW MEXICO

Senator DOMENICI. To both of you I want to thank you for some

work you did, your predecessor did and the FBI did, along with

other Justice Department people, in a very poor county in my State

named Rio Arriba County where we were leading the United States

by far in per capita overdose deaths from black tar heroin. Up in

this poor part of New Mexico black tar heroin had almost taken

over. There were families involved in it for two or three generations

and the overdose deaths in our hospitals were the highest in America. A real effort was put forth jointly and 50 people were arrested.

They are all, many of them, pleading guilty day by day, and we

could not have done that if you had not indicated an interest after

we called it to your attention.

I am sure things are still going on there because the communities are getting a lot more interested in positive things so I want

to, on the record, thank the Federal Government. That effort was

a good one. Both of you told your groups to get involved, they did

and did a great job. Thank you for that.

I want to submit some questions to you with reference to

counterterrorism and some other things. I do not want to ask them
241

now but I am sure that you and your people will answer them and

we will read them.

NATIONAL LABORATORY PROTECTION

I want to focus just a minute on Wen Ho Lee from a different

perspective. The Wen Ho Lee situation and the entire evaluation

of the laboratory system, the nuclear weapons laboratory system

that ended up with the indictment of Wen Ho Lee clearly indicated

that the FBI offices that are close to the laboratories of Los Alamos

and Sandia, two of the biggest, that those FBI offices were very

undermanned for a long period of time. As a matter of fact, much

of the resources were turned to drugs instead of anti-terrorism and

crime in the laboratories.

Now you recognized that during the investigation and without

details, could you assure us that you have fixed that situation? I

mean if you are going to police an institution that has great American secrets that, if stolen, could be dangerous, you have to be in

a position to do that at Los Alamos, Sandia, and Lawrence Livermore National Laboratories, I would assume. I assume you have

come to that conclusion and are doing something about it?

Mr. FREEH. Yes, Senator, we have come to that conclusion and

we are doing something about it. In addition to the 60 agents

which this committee, directed to be allocated to the major national

laboratories, particularly the weapons laboratories, that has been

done. Those people are present. They also have the analytical support necessary, both in the field and headquarters, to support that

effort.

The other response, which is perhaps more important in terms

of long-term significance is the counterintelligence structures within the Department of Energy and the laboratories, which I think

by everybody’s concession were fairly well broken for some period

of time, despite many efforts, including your own, to build that up

over many, many years.

The counterintelligence structures now within the Department of

Energy, we are very, very pleased to not only observe them but to

participate with them. A lot of the counterintelligence officers, including Mr. Curran, who is the departmental director, are former

FBI counterintelligence specialists. The resources and the organization that have been put into that structure, we think are very, very

formidable.

The other changes that you and your colleagues have made with

respect to the organization of the department I think are also part

and parcel of strengthening not only counterintelligence capabilities but preventing compromises.

We ask for in the 2001 budget an increase, one of the few personnel increases we do ask for, is in the area of counterintelligence—personnel, analytical ability, technology. All of that will be

applied and as long as we all pay attention to that situation, it will

not fall again into disrepair.

Senator DOMENICI. Thank you very much.

Thank you, Mr. Chairman. I will submit the other questions.

IMPROVING THE BORDER PATROL

Senator GREGG. Senator Hutchison.
242

Senator HUTCHISON. Thank you, Mr. Chairman.

I would like to ask both of you if you believe that the Border Patrol and the DEA and the FBI are working together in an optimal

way in sharing information and in coordinating, where necessary.

Clearly, Border Patrol is supposed to be for illegal immigration control but because that is so often the same operation that includes

illegal drugs, it has become a dual function. But the question is

have they been able to undertake the dual function effectively in

your opinion? And if not, or even if so, how could that be improved?

Mr. MARSHALL. From the DEA standpoint, I think for the most

part they have been able to undertake the dual function effectively.

And the reason I believe that is, is because we have had an onging

dialogue with the Border Patrol in terms of what our working relationship should be and who handles what particular issues. When

they make a seizure of drugs, we have agreements worked out for

when DEA pursues the investigation, when the case should be referred to Customs or when, the Border Patrol themselves actually

handle the initial investigation.

In some cases we have actually exchanged personnel and co-located our offices. I believe that what we have done is provide a

broad framework on how we generally interact between the two

agencies. We also have given our, Special Agents in Charge for

DEA the leeway to adapt those guidelines as necessary. And I

think for the most part we do have a very productive, workable relationship.

Senator HUTCHISON. So you are saying that there are not jurisdictional problems, but are there also ways that there could be a

more effective use of both agencies?

Mr. MARSHALL. Well, I think, when you are talking about two

large organizations like this, that there is always room for improvement but from my perspective, I believe the relationship is working

very well.

CREATION OF BORDER PATROL ENFORCEMENT ORGANIZATION

Senator HUTCHISON. Well, let me just say this. Some of us have

talked—Certainly Senator Gregg has been very creative in this

area but we have talked about whether there should be a Border

Patrol enforcement organization where instead of having two different agencies—the DEA and the Border Patrol—that there would

be one enforcement agency that would combine the functions.

Do you have any opinion about whether that would be more effective or if it would create problems that we are not seeing?

Mr. MARSHALL. Well, it may fix some coordination problems. My

impression would be that it may fix coordination problems particularly between the Border Patrol and Customs. It also may create

other problems.

Again I think on balance, we have an effective working relationship with both of these agencies and we believe that we are able

to get through most of these problems fairly easily.

IDENT-IAFIS INTERGRATION

Senator HUTCHISON. Director Freeh, I know that FBI is less

front-line in this area but I know there is coordination with information. Do you have any views on whether there could be a more
243

effective Border Patrol agency in some way coordinating better or

perhaps creating a different agency?

Mr. FREEH. You know, I think there are certainly some significant things we can do under existing structures and jurisdiction to

improve the overall efficiency and capability of the government. I

mean one aspect is fingerprint identification, which this committee

has paid particular attention to. INS has an IDENT system which

is distinctly different than the FBI’s IAFIS system. Remarkably,

these two systems grew up at the same time.

We are now in the process, under this committee’s directive, to

study the integration of those two systems so the two-finger identification, which is done by a Border Patrol agent, can have some relevance to the 34 million prints that we have in our IFIS database.

That connection is not currently available within the Department

of Justice. We are looking at that now. There are four studies that

are being done at a cost of $5 million and we are confident that

integration can be made. That will be an extraordinary improvement in our ability to protect the borders of the country and determine who should come in and who should not come into the United

States.

Also, there are a lot of things we can do under existing structures, short of combining and reforming agencies, which, in my experience, is very disruptive.

Senator HUTCHISON. Combining is very disruptive?

Mr. FREEH. Yes, combining two separate agencies would be, I

think, very disruptive.

Senator HUTCHISON. And you think trying to work within the

structures we have now and doing the things that you have just

said are being done is the better approach than to try to have one

single more enforcement-oriented agency?

Mr. FREEH. Yes, that would be my recommendation.

Senator HUTCHISON. Thank you, Mr. Chairman.

Senator GREGG. Senator Lautenberg.

REDUCING THE CRIME AND VIOLENCE RATES

Senator LAUTENBERG. Thanks, Mr. Chairman.

My apologies for not having been here to hear the testimony of

these widely respected witnesses. I commend you, including Ms.

Meissner, for the job that has been done in getting the crime rate

down to the lowest point since 1973. The violent crime is at its lowest rate since 1993. The murder rate is down 25 percent since

1993.

Director Freeh, you and I have a soft spot for New Jersey, this

is not to suggest that you put more resources into New Jersey, but

I know the people at the agency there and they are very cooperative, they work hard and diligently. There is a project under way

now, as I am sure you know with the BATF to get a common file

on ballistics information.

So I think that everybody deserves a measure of credit for having

reduced the crime and violence rate.

GUN SHOW CHECKS

There is one loophole, however, that you and I have discussed

and you know very well that I have been an advocate of closing the
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gun show loophole, which permits unlicensed dealers to sell guns

without background checks. If Usama-Bin-Laden got into the country, he could go up to one of those dealers and buy a gun and would

not get asked a question. No one would be checking his background

or anything like that. That is how outrageous it is.

As a matter of fact, I was reminded by my staff this morning of

an incident that is going around right now that the NRA has accused me of wanting to shut down gun shows. They took it, they

said, from a transcript of a press conference we had on denying

children access to guns in the household. We watched the transcript today and it is very specific. It says ‘‘Close the gunshow loophole.’’ In their memo, their bulletin is out there saying Lautenberg

wants to close gun shows. So they are always ready to distort these

things to make a point.

And I would ask you this. You are aware that we have prevented

some 470,000 people from getting guns under Brady. And you know

that I was the author of the law to prevent guns from falling into

the hands of domestic spousal abusers. That domestic violence gun

ban has prevented 33,000 abusers from getting guns.

So Director Freeh, what might be the effect of having this gun

show loophole that permits people to buy guns, no questions asked.

Recently we heard the testimony of Robin Anderson, the young

woman who in Colorado appeared before the legislature there and

testified that she went around with Harris and Klebold, the two

fellows who committed the murders. She said she helped them go

around a gun show to find gun dealers that would not ask any

questions.

Can you tell us if you see an effect of having this loose purchase

of guns in terms of our trying to fight crime and cut down on violence?

Mr. FREEH. Senator, my very strong view is that the more information, the more authorized information we are allowed to have in

that database, the better job we are going to do protecting people.

You cite the instant check background system which this committee has funded. Of the 11 million checks, 100,000 were disallowed. Not only are there over 3,000 violators of domestic violence orders; there are over 2,700 fugitives.

So obviously the more information in that database, the better

job we will have protecting people. It is like the Federal DNA database, which is one of our requests for the next year. We would like

to include in there—we need authorization from the Congress, in

addition to some funding—we would like to include in there 20,000

convicted felons in the Federal system who relate, in some cases,

directly to our crimes against children program. We would like to

have them in the database. Not having them in the database is a

huge deficit in terms of our ability to protect people.

Senator LAUTENBERG. Is it not also true that the FBI, with regard to background checks, has released some data that say that

some people escaped being prohibited from getting guns because

there was not sufficient time to check their background?

Mr. FREEH. I think the figures show more than several cases in

that category.

Senator LAUTENBERG. Last year it was something like 1,100,

wasn’t it?
245

Mr. FREEH. I can get you the numbers but it is a significant

number.

[The information follows:]

FIREARM RETRIEVALS

Transactions exceeding the three business day time limit were caused by the lack

of arrest dispositions being available in the automated state criminal history

records. During the period November 30, 1998, through February 23, 2000, there

were 4,683 occasions where information was received after the three business days

demonstrating a purchaser was prohibited, and it was determined that the firearm

had been transferred to the purchaser, thus necessitating local law enforcement or

BATF having to retrieve the firearm(s) from the person(s) purchasing the firearms.

The FBI, through Point of Contact conferences, Advisory Policy Board meetings,

Clerk of Court conferences, and letters to state representatives hold discussions to

stress the importance of states keeping complete and updated criminal records to

provide to the National Instant Criminal Background Check System (NICS). Based

on the first year of operation, it is clear that the ability of the NICS to stop prohibited persons from acquiring firearms would be improved by: More time to complete

checks when records are not electronically available; a means to help states with

the cost of performing as a Point of Contact state; a means to assist state courts

with the costs of seeking disposition information; and additional funds for National

Criminal History Improvement Program to improve NICS ability to obtain final disposition information.

When the FBI determines that Federal Firearms Licensee (FFL) has already

transferred the firearm to an individual determined by the NICS to be a prohibited

person, the FBI notifies both the BATF and local law enforcement where the firearm was sold (or where the purchaser lives, if different), that a prohibited person

received a firearm.

USER FEE FOR GUN CHECKS

Senator LAUTENBERG. Another thing that has come up; that is

the question of whether or not people who go through the national

instant checking system should not have to pay a fee for that process. I very much favor it. There are 11 million requests. Is that 11

million requests a year or that have gone on since——

Mr. FREEH. Since it was inaugurated.

Senator LAUTENBERG. Since the system was established. And I

know that if you want to apply for a license, fishing license, et

cetera, you pay a fee.

Mr. Chairman, I think we ought to be recovering some of the

costs that these users put upon us. I do not know whether you discussed that in your testimony but if you have, then we will not

hold the rest of the committee, but if you have not, would you give

me a comment on that, please?

Mr. FREEH. Certainly. The system requires funding next year of

approximately $72 million, which includes the 642 employees who

work exclusively on these background checks. The administration’s

proposal, of course, again asks for a user fee. I really do not have

a strong position on that. What we need in the FBI is the funding

and the funding source is a matter, certainly, within the decisionmaking of the Congress and the Administration. I pay license fees

for licenses in several States, including New Jersey, and that is a

commonly accepted method to raise appropriate revenues for enforcement purposes. But I really do not have a view on it. We just

certainly would hate to see this program not get funded, given the

remarkable success that it has had.
246

GUN RETRIEVAL NOTICES

Senator LAUTENBERG. I did not place enough reliance on my staff

because as I look down here I see that between November 30, 1998

and June 15, 1999, the FBI failed to block about 1,700 gun sales

to prohibited purchasers—criminals—because it did not have

enough time to conduct the background checks. So the FBI then

had to issue gun retrieval notices and law enforcement people had

to try to track down the weapons that these people had bought

through an insufficient system.

WAR CRIMES ASSISTANCE

Director Freeh, the FBI has contributed considerable expertise in

forensic medicine to support investigations from U.N. War Crimes

Tribunals in former Yugoslavia and people travel to Bosnia and

Kosovo to help identify and preserve evidence of war crimes and

crimes against humanity.

Now, that is an important role for the FBI in helping to achieve

justice. How can we assure that the agency is ready to support the

existing war crimes tribunals for Yugoslavia, Rwanda, and similar

investigations in other parts of the world? Is that a responsibility

that we can take and complete?

Mr. FREEH. It is a very grave responsibility and I think, of the

many decisions I have made in almost 7 years, that was probably

one of the ones that I am most proud of. We sent, as you very graciously described, two enforcement teams to Kosovo, approximately

60 personnel per team, to work under absolutely horrific conditions. In fact, we were the largest team representing all of the

countries that did contribute some resources. Our team went there

and on two separate occasions did, in the words of the chief prosecutor, Carla del Timbel, an absolutely extraordinary job identifying dozens of victims, excavating sites. In one particular case, the

agents excavated a well where 18 members of a family ranging

from 2 years of age to 90 years of age were murdered and thrown

in. We received reimbursement for all of those activities from the

State Department, except for our personnel costs.

I think the United States needs to have that capability. I think

we should be available and anxious to supply that type of very

unique forensic experience whenever required. We do not need and

have not asked for a particular funding source for that but I would

ask for leave of the committee, as we did before we made these deployments, to allow us to undertake those missions where requested. I cannot think of anything more important for the FBI to

do.

Senator LAUTENBERG. Thank you very much.

Mr. Chairman, I would ask unanimous consent to put my full

opening statement in the record.

Senator GREGG. Certainly.

[The statement follows:]

PREPARED STATEMENT OF SENATOR FRANK R. LAUTENBERG

I want to thank Director Freeh, Commissioner Meissner, and Acting Administrator Marshall for appearing before the Subcommittee today.

Each of our witnesses has important crime-fighting responsibilities, and I want

to commend them for their respective roles in helping to make our streets safer. The
247

overall crime rate is the lowest it has been since 1973. Violent crime is down 27

percent since 1993.

The murder rate is down more than 25 percent since 1993. In my home state of

New Jersey, crime is at its lowest level since 1972. The hard work of our FBI, DEA,

and Border Patrol agents has made a significant difference, and we appreciate your

leadership on that front.

Of course, there is still much work to be done. I am particularly concerned about

the gun violence that continues to take a terrible toll on our nation. Every year,

more than 30,000 people are killed. Each day, the lives of 13 children are cut short

by gun fire.

The situation would be much worse without the National Instant Criminal Background Check System (NICS) which helps to keep guns out of the wrong hands.

Since it went into effect in 1994, the Brady law has stopped more than 470,000

criminals and other prohibited purchasers from getting guns.

That number includes 33,000 domestic violence abusers who were prevented from

getting guns as a result of the Domestic Violence Gun Ban I authored. Director

Freeh and all of the FBI agents who work so hard on that system deserve our

thanks.

We should support the NICS system by allowing the FBI to charge a user fee.

There is no reason why American taxpayers should subsidize gun ownership. If you

want to buy a gun, you should bear the cost of showing that you are legally permitted to own it.

Drug-trafficking also continues to be a major problem. Cocaine, heroin, marijuana,

and methamphetamine flow too easily into our country, particularly across the

Mexican border. Coordinated efforts between your agencies and state and local law

enforcement, such as the Southwest Border Initiative, are a good step forward in

trying to stop drug-trafficking.

And there are other challenges we must grapple with in the 21st century. We

must continue to be vigilant against terrorism both domestic and international.

Additionally, advances in computer technology have made all of our lives easier,

but have also provided new opportunities for criminals. We need to provide appropriate resources so that law enforcement can keep pace with cyber-criminals.

On the issue of immigration, I am proud of our country’s legacy as a land of opportunity and sanctuary for people around the world. Certainly, we need to have

immigration policies that provide an orderly system for people coming to the United

States, but our policies should always be guided by compassion so that we do not

cause additional hardship for families who are already in desperate circumstances.

Again, I thank Director Freeh, Commissioner Meissner, and Acting Administrator

Marshall for appearing before us today. I look forward to hearing about their budget

requests for fiscal year 2001, and discussing those requests during the question and

answer period.

Senator GREGG. Did you have further questions?

Senator LAUTENBERG. No.

NATIONAL DOMESTIC PREPAREDNESS OFFICE

Senator GREGG. When can we expect to get the reprogramming

for the NDPO?

Mr. FREEH. We should have it at the Department of Justice, I am

told, within a week, Senator, and up here immediately after that,

as soon as it clears through OMB [the Office of Management and

Budget].

[The information follows:]

The National Domestic Preparedness Office reprogramming was submitted to

Congress on March 31, 2000.

Senator GREGG. What is the status of the State and local advisory groups?

Mr. FREEH. The State and Local Group Advisory has not been

fully constituted or assembled. It is being done now as we speak,

now that the NDPO has the authorization to proceed, and I hope

to have that up as quickly as possible. It is a critical element obviously to that function being credible.
248

ADDITIONAL COMMITTEE QUESTIONS

Senator GREGG. Well, as you know, it is very important and,

hopefully, it can be done as soon as possible.

Mr. FREEH. I pledge to do it as quickly as I can.

[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

USER FEE INCREASE

Question. Once again the Administration is requesting a $2.00 fee increase in the

Immigration User Fee. Congress rejected the same request last year because the

INS failed to provide the justification.

Can you provide the justification that would warrant an increase?

Answer. In March 1997, the INS Office of Budget conducted a comprehensive review of the Immigration User Fee Account (IUFA) to develop and utilize a more consistent and reliable cost accounting methodology for determining the adequacy of

the current fee. The study found that the current user fee of $6.00 was adequate

to cover costs through fiscal year 1998, but because of increasing costs, from the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 mandates among

them (such as expedited removals and automated entry/exit control system), the revenues collected (new receipts) in fiscal year 1999 were not sufficient to cover all of

its operating costs. Carry forward funding from fiscal year 1998 was used to make

up for the shortfall in funding.

To recover a portion of the increasing IUFA costs, the Administration proposed

to lift the User Fee exemption from cruise ship passengers. In fact, the Administration first proposed lifting the exemption in fiscal year 1995. Fiscal year 2000 Congressional action did not remove the exemption for cruise ship passengers, which

translated into costs of approximately $20 million without any offsetting cruise ship

receipts for every year the exemption remains in effect. Fiscal year 1999 Conference action permanently transferred $29.5 million in requirements from base Salaries and Expenses funding to the IUFA. The combined

impact of not lifting the cruise fee exemption and transfer of the $29.5 million over

two years has adversely affected INS’ ability to cover its base operations. As a result, INS has been forced to cover its IUFA operating costs by relying on carry forward revenue. Relying on carry forward revenue in fiscal year 1998 and fiscal year

1999 creates a very cautious spending environment for the IUFA in fiscal year 2000

and establishes deficits in the outyears.

Question. What are the costs associated with the Inspection process that warrant

a $2.00 increase?

Answer. The fiscal year 2000 financial plan for the User Fee Account is predicated

upon a reprogramming notification that is currently pending. The reprogramming

requests an increase from the fiscal year 2000 IUFA authorized level of

$446,151,000 to $487,000,000, representing an increase of $40,849,000 or 1.1 percent over the fiscal year 1999 budget. With the reprogramming of these funds, INS

will temporarily preempt a potentially severe reduction in airport-related services

in fiscal year 2000. Even with the approval of the fiscal year 2000 Immigration User

Fee Reprogramming, Immigration User Fee program costs will continue to far exceed new revenues. During fiscal year 2000, prior year carry forward funds will be

almost depleted, leaving an estimated $4,889,000 to carry forward into fiscal year

2001. This is insufficient to cover services that the INS must provide for fees already collected. Hence, in fiscal year 2001 and beyond, the solvency of the account

will be in jeopardy.

The fiscal year 2001 budget request includes language that would increase the

current Immigration User Fee for air passengers (and transoceanic cruise passengers) by $2.00, to $8.00, and would lift the cruise ship exemption (affecting nearly 99 percent of cruise fee passengers) and institute a $8.00 cruise ship fee. The

cruise fee would be collected from passengers whose journey originates in Mexico,

Canada, the United States, a territory or possession of the United States, or any

adjacent island to the United States. The proposed cruise ship fee would not apply

to immigration inspection at designated ports-of-entry of passengers arriving by

Great Lakes international ferries or Great Lakes vessels on the Great Lakes and

connecting waterways, when operating on a regular schedule. Revenue from both of

these fee increases is assumed in the fiscal year 2001 President’s budget request.
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In fiscal year 2001, a total budget of $529,103,000 is requested for the Immigration User Fee Account (IUFA). This spending level includes two enhancements: (1)

upgrading of the journey grade of Immigration Inspector positions from GS–9 to

GS–11 and (2) hiring of 154 new Immigration Inspectors to staff the opening of new

international airport terminals including a new terminal at San Francisco.

Without an increase in the fee and elimination of the cruise ship exemption, INS

may be forced to reduce services in fiscal year 2001. The likely result of this service

reduction would be longer waiting times at airports and an inability to carry out

certain airport-related initiatives in the Inspections, Detention and Deportation, Intelligence and Data and Communication Programs.

Question. INS has virtually the same process for air passengers that it had in

1987 when the fee was first established.

Rather than ask for a fee increase, what actions has INS taken to redesign its

work process or to reduce the costs of your operation?

Answer. The inspection process has been updated and modernized through the

use of technology that allows for facilitation of bona fide travelers and identification

of malafide travelers. Advance Passenger Information is being used by Passenger

Analysis Units to screen passengers in advance of their arrival thus allowing for the

increased identification and apprehension of immigration violators and recidivist

travelers and the facilitation of bona fide travelers. This initiative has been undertaken with the cooperation of the airline industry. Regrettably, neither the quantity

nor quality of the data currently provided is sufficient to allow radical redesign of

the present process without introducing unacceptable risks to national security.

The cost of developing, refining and implementing new technology for facilitation

of travel has exceeded the monies generated from the current user fee. Expansion

of international airports has necessitated an increase in staff and use of technology

to maintain the current level of services.

Question. INS has suggested that the increase in passenger volumes will increase

the need for additional program funding. Why? If passenger volumes are increasing,

then, as a matter of course, shouldn’t the amount of money paid in the form of user

fees increase in direct correlation?

Answer. Despite a projected increase in passenger volumes, the additional revenue will not be sufficient for the INS to recover the cost of statutorily-mandated

User Fee activities. Two factors are responsible for this situation.

Increasing passenger volumes affect both sides of the revenue and expenses equation. Rising passenger volumes also contribute to higher cost requirements. More

passengers will mean that a greater number of inspectors will be needed as well

as higher overtime requirements to maintain existing processing standards. Higher

passengers volumes may also mean a greater number of passengers who might have

to be detained, and these detention costs are very costly to the account.

In addition, the account is required to fund services for which no revenue is generated. The current user fee of $6.00 continues to offset the costs required to inspect

millions of cruise and air passengers that are presently exempt from paying the

user fee. Resources are expended to conduct these inspections which would otherwise generate additional revenue to help offset the costs attributed to the workload.

In addition, costs have been transferred from the Salaries and Expenses account—

$29.5 million was shifted to the User Fee Account in fiscal year 1999 alone.

The IUFA has relied on carry forward amounts for the past three fiscal years to

cover its base operations, it is expected that severe program reductions are imminent. For these reasons, INS requests an IUFA fee increase for air passengers of

$2.00, to $8.00, and requests that the cruise ship exemption be lifted and replaced

with legislative language that would institute a $8.00 cruise ship fee.

Question. INS has proposed to reduce services at ports of entry if their User Fee

increase request is not granted. Air carriers collect, collate and transmit data required by the INS on an increasing percentage of passengers arriving in the United

States on behalf of the INS. Airports provide facilities at no costs to the inspecting

agencies. The airlines and the airports supplement INS staff at ports of entry with

personnel to direct and control passenger traffic, provide translation services and

law enforcement security for the federal inspection facilities. These are costs directly

borne by the airline industry.

Why does the INS seek to penalize the airline industry, when it should be seeking

to work in partnership to develop better, faster and safer ways of inspecting individuals entering the United States?

Answer. The INS seeks to work with the airline industry, not to penalize it, both

to facilitate legitimate travel and to address fraud and other abuses. We have established a Carrier Affairs Office to provide training to the industry, we have entered

into Memoranda of Understanding to mitigate fines, and we work in partnership

with the industry in many joint working groups.
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The INS has no immediate plans to reduce inspection services, however the current fee will soon be unable to keep pace with the costs incurred in performing inspections services at the nation’s air and sea facilities. Congress has noted in recent

comments on the INS account that it faces a crisis due to costs exceeding receipts,

the recurring use of carryover to meet annual requirements, and the inability to satisfy long-term resource requirements. Lacking an adjustment in the existing fee

level, the unfavorable balance between revenues and operational demands will eventually result in degradation of airport services. Impact on INS operations may include: reduction in the ability to meet the Congressionally-mandated 45-minute wait

time; inability to staff newly-constructed airport facilities; reduced INS participation

in anti-smuggling operations; and reduced INS/United States Customs Service enforcement work on Passenger Analysis Units and the scripted Advance Passenger

Information project to intercept criminal aliens.

Question. Many suggestions have been made by the airline industry to improve

the efficiency and effectiveness of current INS procedures to avoid the need to increase the User Fee. These include (1) reviewing the current pre-clearance and preinspection programs to analyze their impact on staffing efficiencies; (2) allowing domestic blocking of certain low-risk international flights which would relieve the impact of traffic at ‘‘peak’’ times; (3) reviewing existing program and regulations requiring the collection and transmission of passenger data to explore opportunities

to further automate existing programs such as the Advance Passenger Information

System (APIS) and INSPASS; and (4) combining border management initiatives to

reduce the number of personnel required to maintain an effective border management program, including cross training, shared data opportunities and the exploration of risk based inspection procedures.

Has INS considered any of these suggestions in reviewing their budget for this

year? If not, why not?

Answer. (1) The use of pre-clearance and pre-inspection processes has limited utility. Internal INS reviews have indicated that these procedures are not cost effective

in all instances. Additionally, establishment of new locations to conduct such operations is subject to agreement on the part of host countries to allow U.S. law enforcement activity in their territory and agreement with affected airports to make

adequate facilities available. Both of these conditions have created barriers to the

expansion of this program.

(2) The systematic bypassing of Federal Inspection Service (FIS) agencies by airlines by allowing domestic blocking of certain flights would be an open invitation

to fraud and smuggling. The INS experience has indicated that organized smuggling

groups are very adept at adapting their operations to perceived weaknesses in the

INS and other FIS agency screening processes. A clear example of this was seen in

the 1990’s when large numbers of passengers with no documents arrived at certain

U.S. airports where inadequate detention facilities were available.

(3) The INS realizes that the airline industry supports the APIS and INSPASS

systems. We are conducting a thorough review of the current procedures in place.

Once this review is complete, we will be in a better position to consider other procedures and the future of the program.

(4) The INS is working closely with other FIS agencies and with the Federal Aviation Authority, the U.S. Coast Guard, and other groups to ensure that there is a

seamless and efficient process for travelers as they enter the United States while

maintaining the security of our borders. Data is already shared among FIS agencies

and additional opportunities to coordinate our operations more closely are constantly being explored through initiatives such as Port Quality Improvement Committees and Passenger Analysis Units.

INSPASS

Question. INSPASS was first implemented in 1993—seven years ago. Five years

later, according to the INS Internet site, INS processed 222,000 people through it,

or less than one-third of 1 percent of arriving passengers.

Is this true?

Answer. Yes. INSPASS is still a pilot program. Although popular with the industry, the INS is still addressing a number of important issues, some of which were

identified by the Department of Justice’s Office of the Inspector General in its draft

report of July 1999. More importantly, the INS is conducting a full review of the

role of automated inspections in general and INSPASS in particular to determine

whether these processes offer cost effective alternatives to traditional staffed inspections.

Question. In the February 16, 2000, Federal Register notice on the status of the

Immigration User Fee Account, INS suggested that INSPASS was a measure that
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was being used to expedite the inspection process. Where the program is in place,

the expedited service is working well. Yet INS is asking once again for over 150

more airport inspectors and requesting to increase inspector pay by $29 million, but

no where does INS say that they are going to make things easier, faster, or better

for the traveling public, especially returning US citizens.

If this is true, why has INS under-funded the program for the last several years?

Why are no expansions of this program included in this year’s budget request?

If INSPASS is not the right technology, is INS developing something new? If not,

why not?

Is there a reason why Congress shouldn’t mandate the installation of INSPASS

units at all U.S. airports?

Answer. For the past 2 years, the INS has been considering an INSPASS regulation that would charge a fee to cover funding if this process becomes part of our

standard operating procedure at airports. This would fund the program in part. In

addition, in 1999 the Department of Justice Office of Inspector General (OIG), as

a consequence of its recent audit, recommended the INS not expand the INSPASS

to additional locations until significant and expensive revisions could be made in the

enrollment and validation system components. More recently, a complete analysis

of system benefits and costs has been undertaken so that a better-informed decision

may be made.

The INS recognizes that current INSPASS technology may no longer be the right

technology but the INS does not have the funding available to leverage newer technology. A congressional mandate requiring installation of INSPASS systems at all

major airports would not be helpful without the appropriation of funds to develop

an alternative technology for use in the INSPASS process and the appropriation of

funds for deployment of the systems after development has been completed.

Question. Back in November 1998, the airline industry was told that Honolulu,

Seattle and Dulles were the next sites to be developed. To date, only Dulles has

come on line—even though the equipment has been bought for Honolulu and Seattle.

It is now March 2000. What is the delay in having the program installed at Honolulu and Seattle?

What about future sites that were originally promised, such as Dallas/Ft. Worth,

Newark and Houston?

Answer. For fiscal year 2000, INS does not have the necessary funding to support

and maintain the systems at Honolulu and Seattle and to concurrently address the

OIG’s recommendations on improvement and enhancement of the system before expansion. Currently, there are no plans to expand to additional sites; until the INS

has completed its assessment of the INSPASS concept and current technology; until

adequate funding has been identified; and until the INS has fully complied with the

OIG’s recommendations.

SERVICE ENHANCEMENTS

Question. Most airlines today provide INS with Advance Passenger Information

data.

How does INS use this information to aid the processing of passengers?

Why is INS the only Federal Inspection Agency still requiring a primary inspection or examination for every passenger entering the United States?—despite the

Advance Passenger Information provided by the airline?

Answer. The provision of data to the INS and other Federal Inspection Agencies

itself does not address fraud, counterfeiting, misrepresentation, false claims or the

use of documents by look-alikes. Examining every arriving passenger at primary inspection points to ensure proper documentation and review of travel documents for

imposters and possible fraud is necessary to maintain the security of the United

States and prevent the entry of terrorists and others who are inadmissible by statute.

The information is used to expedite the processing of bona fide air travelers substantially by eliminating the need for an inspector to perform a full primary computer query and as an enforcement tool by providing ports-of-entry with advance notification of arriving passengers who are the subjects of lookouts.

The INS, by agreement with the other FIS agencies, conducts the initial primary

inspection for all agencies. This allows both the U.S. Customs service and the Animal and Plant Health Inspection Service to employ alternative inspection processes

to achieve their missions.

Question. The INS intercepts only about one maleficent claim to U.S. citizenship

for about every 10,000 passengers examined.

What is INS doing to accelerate U.S. citizen clearance?
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Does INS measure clearance times for U.S. citizens only—and, if not, why not?

Answer. The INS has experimented with Accelerated Citizen Examination (ACE),

an oral declaration of citizenship by U.S. citizens on selected arriving flights. This

has been useful but lacks an adequate mechanism to address risks fully. Also, passport readers have been installed at the major airports and returning U.S. citizens

with passports and lawful permanent residents with resident cards are processed

quickly. Additionally, the INS has experimented with fully automated inspections

using the INSPASS process that is used mostly by U.S. citizens.

Clearance times are collected at each site and are used to determine staffing levels at each location. INS is mandated to clear all flights within 45 minutes, and

those flights that are participants in the API program are being cleared within 30

minutes. During the first two quarters of fiscal year 1999, 97.1 percent of all flights

were cleared within the required 45 minutes.

Question. Many airlines today use electronic tickets and self-service devices

(SSD’s) to enable passengers to complete the check-in process without having to see

an agent.

Is INS looking at similar technology for processing frequent flyers?

Answer. The INS Passenger Accelerated Service System (INSPASS) is an automated system that can significantly reduce immigration inspection processing time

for authorized travelers. INSPASS combines automation with a hand geometry biometric image to validate the claimed identity of an individual. Eligible frequent

travelers may enroll in the program at any INSPASS enrollment office.

Arriving at a port-of-entry, the traveler proceeds to an INSPASS inspection queue.

There, the person inserts a card issued to them at enrollment to an INSPASS kiosk,

similar to automated bank teller devices. Responding to messages on the kiosk’s

touch-screen display, travelers are prompted to enter their flight number (certain

persons only) and to place their hand on a hand geometry reader. Screen prompts

are used to achieve correct alignment of the hand with the hand reader. The kiosk

software automatically compares the live scan of the traveler’s hand geometry biometric to the image captured at enrollment. If the traveler’s identity is validated

by this comparison, an I–94/receipt of his inspection is printed by the kiosk that directs the traveler to proceed to U.S. Customs inspection. If this check is not successful, a screen message refers the traveler to an immigration inspector in a nearby

inspection booth. Processing time of 15 to 20 seconds are typical, and times as low

as 11 seconds have been observed at existing INSPASS kiosks.

Automated inspection kiosks are not staffed. There are presently over 45,000 active participants. More than 300,000 admissions have been made at INSPASS kiosks since 1995. Immigration inspectors have conducted more than 10,000 compliance checks of INSPASS admitted persons with no fraud found.

INSPASS is operational at nine international airports: Detroit, Los Angeles,

Miami, Newark, New York City (JFK), San Francisco, Washington, D.C. (Dulles),

Toronto, and Vancouver.

STAFFING

Question. INS uses a Work Analysis Model (WAM) to allocate inspector staffing.

Are all airports staffed at the same percentage of the WAM?

Answer. INS attempts to maintain all airports at roughly the same percentage of

the WAM. However, yearly traffic growth or decreases at some airports can significantly alter the percentages from one year to the next. Another factor, which impacts on our ability to maintain equitable percentages, is the availability of new

staff. If we do not receive airport staffing increases, we are not able to maintain

an equitable staffing percentage at airports that are experiencing substantial

growth. Therefore, airports may be roughly be staffed at the same percentage in one

year and not in the next, due to the above mentioned factors.

Question. How does INS ensure that all airports have their fair share of inspector

staff?

Answer. We use the Workforce Analysis Model (WAM) to assist us in the deployment of new resources. The model attempts to move all ports as close to the servicewide percentage as possible.

Question. What percentage of all airports inspectors are part-time during the summer peak?

Answer. The use of part-time inspectors, that is, the use of other than permanent

fully-trained professional officers as inspectors, is problematic for the INS. This

practice developed before the introduction of user fees as an expedient to meet the

need for staffing when air traffic growth was outstripping the ability of the INS to

address this growth through the normal budgetary process. This practice has continued at a small number of airports and seaports to address unique circumstances,
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including minor increases in traffic during certain high travel periods. Currently the

INS has approximately 300 part-time inspectors available to work out of a total user

fee funded workforce of 3,084.

Question. What is INS doing to maximize the use of part-time inspectors to cover

high volume periods?

Answer. The INS is considering whether it truly serves the best interests of the

traveling public, the airline industry, and the nation to continue relying on less than

fully-trained professional officers to deliver critical inspection services. Though an

analysis of use patterns we have determined that the greatest use of part-time inspectors occurs at locations where traffic volume doesn’t fully warrant the use of full

time inspectors, for example, at locations where flights are not scheduled on a daily

basis. We are trying to identify how to meet the staffing needs of these locations

in an efficient manner without the undue reliance on part-time officers.

QUESTION SUBMITTED BY SENATOR TED STEVENS

ANCHORAGE DISTRICT OFFICE EXPANSION PROJECT

Question. I am told that the Immigration and Naturalization Service has experienced an explosion in growth over the past few years and that many of INS’ physical locations are inadequate for the needs of the districts. In my state, the owner

of the building the INS uses in Anchorage has been holding space vacant for an INS

expansion for 2 years. The INS currently occupies the 1st and 3rd floors while the

2nd floor remains vacant. The owner of the property has been loyal to the INS and

appreciates their commitment to Alaska, however, she cannot be expected to hold

an entire floor of her building vacant while INS headquarters sits on the district’s

request for additional space. It hinders the INS’ ability to do their jobs effectively

in Alaska and it is causing a financial hardship on a local property owner who is

committed to working with INS.

What is the INS doing to address the problem of inadequate spacing and physical

resources for those Districts that have had significant growth recently and when can

we expect INS to approve the space request for the Anchorage Office so that we can

put this property owner’s uncertainties aside?

Answer. Since fiscal year 1996, the Immigration and Naturalization Service has

experienced a dramatic increase in hiring. This increase has generated a significant

increase in office space requirements. Currently, there are over 120 space actions

in the Lease Acquisition Program, requiring over $136 million to complete. The INS

has developed a priority list for all space requirements, based on various criteria.

The Anchorage District Office expansion project is included on this unfunded priority list. Based on current funding levels, it is expected that the Anchorage District

Office expansion project will be initiated in fiscal year 2003.

QUESTIONS SUBMITTED BY SENATOR PETE V. DOMENICI

OPERATION AND MAINTENANCE CENTER FOR INS ISIS SYSTEM

Question. Director Meissner, the Administration has proposed $38 million in the

President’s budget for continued procurement and deployment of the Integrated Surveillance Intelligence System (ISIS).

This force multiplying technology has been helpful in deterring illegal border

crossings and has increased the safety of Border Patrol officers who respond to these

crossing incidents.

I understand that this $38 million request will fund the deployment of approximately 100 new ISIS sites along the border.

What is the current state of the ISIS system along the southwest border?

Answer. The Remote Video System (RVS) component of the Integrated Surveillance Intelligence System (ISIS) began initial deployment in May, 1998. To date, 91

RVS sites have been deployed operationally, 8 of which are located in New Mexico,

38 in Arizona, 44 in Texas, and 1 in California.

Question. Does the INS have the resources it needs to continue deployment of this

system?

Answer. There are sufficient resources to proceed with approximately 60 more

ISIS RVS installations during fiscal year 2000. We have a multi-year deployment

plan, however the number of deployments in fiscal year 2001 and beyond is contingent upon future funding levels. As the ISIS system grows, a greater amount of its

funding must be devoted to operations and maintenance, therefore, the requested

funding is critical for the continued growth of the system.
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Question. When do you expect that the ISIS system will be completed along the

southwest border?

Answer. Based on site locations defined during the initial 1996 RVS Requirements

Survey, a preliminary estimate of 353 RVS were identified for the southwest border.

Of these, 91 RVS installations have been completed to date. Dependent upon the

level of funding received, it is anticipated that the remaining 262 sites will be installed by the end of fiscal year 2003. It is noteworthy that wherever RVS systems

have been deployed and become operational, sector requirements for RVS sites have

changed significantly. As the word of the success of the RVS systems spreads, more

requirements for systems are identified. For example, one southwest sector indicated an increase from an initial number of 75 sites to 330 sites. In order to update

and formalize these requests, a new RVS survey will be implemented in third quarter of fiscal year 2000 to establish a new requirements baseline.

Question. Would the INS benefit from a centralized Operations and Maintenance

Center for this system in the southwest?

Answer. Due to increased funding since 1996, U.S. Border Patrol inventories of

infrared camera, night vision, sensor, and other types of equipment have grown substantially. This equipment is utilized to effectively monitor the integrity of U.S./

Mexican and U.S./Canadian national boundaries for purposes of border control. The

increase in magnitude of new equipment and the influx of new technology mandates

the establishment of an optimal operational maintenance schedule for these systems. Presently, Operation and Maintenance (O&M) for ISIS RVS systems is being

accomplished primarily through the use of contract personnel. U.S. Border Patrol

technical personnel at facilities in the San Diego and El Paso sectors perform infrared camera maintenance. Analysis indicates that a better, more cost effective maintenance posture can be attained with the establishment of a single consolidated center to respond to and service the entire southwest border rapidly and efficiently.

The establishment of an O&M Center would mean an immediate release of presently assigned facility personnel back into the U.S. Border Patrol technician pool.

In addition, there will be an improvement in maintenance operations and control,

and establishment of a single repair depot for infrared and thermal cameras, low

light Color Cameras, Night Vision devices, Sensors, and Microwave communications

equipment. Also, a Calibration and Standards Center, which is not presently available, could be established.

The O&M Center will reduce repair turnaround time for IR cameras from 3

months to only days, will allow Mobile Technical Units to be deployed to augment

the support personnel and assist the sectors as designated and for emergency situations. (These Mobile Technical Units are fully equipped assistance vehicles manned

by engineering and technical personnel.) This O&M Center will also serve as: 24

hour ISIS Help Desk Center; Training and Testing Center for INS and U.S. Border

Patrol agents and technical personnel; Replacement Facility for equipment storage

and staging that would negate the need for each sector to order from many different

vendors; Data Collection and Reporting Facility enabling centralized collation of

equipment repair histories and maintenance information; and, Consolidated Inventory Tracking and Records Keeping Center for the U.S. Border Patrol.

With establishment of the O&M Center centralized O&M funding will occur. This

mechanism will allow streamlining of maintenance funding processes and provide

clear audit trails for U.S. Border Patrol technical programs. It will allow economies

of scale cost savings and benefits for U.S. Border Patrol maintenance programs and

will serve as a Center of Excellence facility for the Department of Justice.

Question. How is the system maintained currently?

Answer. The ISIS system is currently being maintained primarily by contract personnel employed by International Microwave Corporation, the primary vendor and

installer, and with the use of extended warranties. U.S. Border Patrol technical personnel have received training to provide lower echelon maintenance on the system,

as well.

Question. How much would a centralized O&M facility cost?

Answer. Initial costs for startup of a centralized maintenance facility are estimated to be in the $1.5 to $2.5 million range. Follow up costs, once the Center is

fully equipped and operational, and is performing the functions and activities outlined and delineated above, are estimated to be approximately $7 million per year.

At present, O&M for ISIS RVS systems is accomplished primarily through the use

of contract personnel. Although a training program to ensure in-house maintenance

competency for U.S. Border Patrol technical personnel has been established, the increase in magnitude of new electronics equipment to assist the U.S. Border Patrol

in its border control mission, coupled with the overall shortage of available technical

support personnel, clearly indicates a need to augment the technical work force

through the use of contract personnel. Additionally, two separate maintenance facili-
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ties, both manned by scarce U.S. Border Patrol technical support personnel, are

being utilized to maintain the Border Patrol’s Infrared camera inventory. Consolidation of these three functions into a single O&M Center, centrally located to best

service the southwest border, would benefit INS by the immediate release of the

technical personnel back to U.S. Border Patrol, cessation of duplicate activities, release of the existing facilities, an increase in the types and classes of technical services and maintenance activities able to be provided to the U.S. Border Patrol, and

cost savings enabled by avoiding duplication of efforts.

Question. How does the Border Patrol monitor ISIS sites to determine when repairs are needed?

Answer. A 24-Hour ISIS Help Desk has been established to respond to calls for

repairs and other types of assistance required by the U.S. Border Patrol to maintain

operational status. U.S. Border Patrol personnel familiar with ISIS equipment are

trained to operate it, log any equipment malfunction or failure, and notify the ISIS

Help Desk directly or through their appropriate chain of command. Once noted, an

analysis and appropriate response is made. This response could range from simple

telephonic assistance to assignment of technical or engineering personnel to effect

repairs.

DETERMINING RESOURCE NEEDS FOR DEPORTATION PROCEEDINGS

Background: In its January 2000 options review, GAO recommended that INS

consider developing a workload analysis model to help the INS determine resource

needs for completing IHPs on all eligible aliens, and giving priority to completing

the IHPs for aliens serving aggravated felonies.

GAO estimates that hundreds of those releasees were serious felons, who should

have been placed in removal proceedings while in prison and taken into INS custody

upon release. Some of these releasees were subsequently rearrested for new crimes,

including felonies.

GAO concluded that even when INS determined that an alien was potentially deportable and should be placed into removal proceedings, INS did not complete the

IHP for at least half of such cases in each year. As a result this failure to complete

the IHP before prison release, INS incurred substantial avoidable detention costs estimated at $40 million annually.

Question. The INS’ Institutional Hearing Program (IHP), now called Institutional

Removal Program, is the main vehicle used by the Department of Justice for placing

aliens who are incarcerated in state and federal prisons into deportation proceedings

so that they can be deported expeditiously upon release from prison. GAO has determined that, during 6-month periods in 1995 and 1997, INS failed to identify nearly

2,000 potentially deportable aliens before they completed their prison sentences, resulting in their release into communities across the United States before their risk

to public safety was determined. This also has resulted in substantial detention

costs that could have been avoided.

What strategies has INS put in place to resolve the IHP failure?

Answer. As noted in the question, the first data collection period that the General

Accounting Office (GAO) used to evaluate the Institutional Removal Program (IRP)

was January through June 1995. This was five years ago, before INS had even implemented most of the enhanced IRPs. The more recent data collection period was

three years ago, January through June 1997. Although most of the enhanced IRPs

were in place at that time, we were not seeing the full benefits because inmates

processed up front were, for the most part, still serving their sentences. Since that

time, INS has made significant improvements in the IRP.

One major strategy employed by INS to improve the IRP focused on elimination

of an interview backlog. The backlog consisted primarily of inmates who were already in prison serving sentences when enhanced IRPs were implemented, and who

were not, therefore, interviewed by INS at intake. Backlogs in the major state IRPs

were eliminated last year.

We have also improved our work measures to reflect the work done in the IRP

more accurately. In addition to the traditional IRP removals (aliens who received

an order of removal while incarcerated), we now count criminals whose removal was

ordered on the day of, or the day after release from incarceration. The IRP removal

statistics shown below are indicative of the improvements we have made.
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Order Prior to

Release

Order w/in 1

Day of Release

Fiscal year:

1998 IRP Removals ....................................................................................... 13,545 1,345

1999 IRP Removals ....................................................................................... 19,842 4,335

2000 IRP Removals (4 months) ................................................................... 6,814 1,559

LAW ENFORCEMENT IN INDIAN COUNTRY

Question. How much of the proposed $82 million increase in Indian law enforcement funding will go to the FBI? Answer. The FBI is requesting $4.639 million for Safe Trails Task Force overtime,

contracts for forensic exams and 31 victim witness specialists.

Question. Two of the FBI initiatives—the Safe Trails Task Forces and the Victim

Witness services have been key to your efforts in Indian Country. What have the

10 Safe Trails Task Forces accomplished in the 2 years they have been operating

in Indian Country (one is in Gallup, New Mexico)?

Answer. The first Safe Trails Task Force (STTF) was implemented in the Flagstaff Resident Agency of the Phoenix Field Office to work on the Navajo Nation in

Arizona in 1994. Currently there are 11 STTFs based in Gallup, NM; Carson City,

NV; Green Bay, WI; Rapid City, SD; Phoenix, AZ; Flagstaff, AZ; Tucson, AZ; Monticello, UT; Glasgow, MT; Lander, WY; and Bend, OR.

These STTFs have successfully obtained numerous indictments and convictions in

Indian Country (IC). The following chart details the 1999 accomplishments of the

eight STTFs that were operating during the entire year. Not included are task

forces started during 1999, which do not have full-year statistics.

Location of Task Force 1999 Information

and Indictments

1999 Arrest and

Locates 1999 Convictions

Gallup, NM ......................................................................... 57 58 49

Carson City, NV ................................................................. 12 10 4

Green Bay, WI .................................................................... 9 10 4

Rapid City, SD ................................................................... 2 2 1

Flagstaff, AZ ...................................................................... 71 87 28

Tucson, AZ ......................................................................... 7 20 12

Monticello, UT .................................................................... 6 155 9

Glasgow, MT ...................................................................... 7 2 7

TOTALS ................................................................. 171 344 145

The STTFs have allowed law enforcement agencies in IC to avoid duplication and

thereby maximize the use of limited FBI, tribal and Bureau of Indian Affairs (BIA)

personnel resources to investigate significant IC violent crime problems of mutual

concern and responsibility. The STTFs ensure that violent crime cases in IC are approached in a shared and cooperative effort in spite of complex jurisdictional issues

inherent in IC. The STTFs also enable tribal criminal investigators to learn FBI investigative practices that can be applied in non-STTF matters.

Question. What will the FBI accomplish with the $4.6 million and 31 Victim Witness Specialists that you have requested in the fiscal year 2001 budget? Is this a

key part of the federal effort to enhance law enforcement in Indian Country? Why?

Answer. The $4,639,000 will be used by the FBI to contract forensic examinations

for Indian Country (IC) in 3 more states ($1,405,000), hire and train 31 Victim Witness Specialists (VWS) who will be assigned to IC Resident Agencies (RAs)

($2,600,000) and provide overtime for state, local and tribal police officers assigned

to Safe Trails Task Forces (STTFs) ($634,000). These are all key parts of the federal

effort to enhance law enforcement in IC.

The FBI has criminal jurisdiction in IC for major crimes under the IC Crimes Act

(18 U.S.C. 1152), the IC Major Crimes Act (18 U.S.C. 1153) and the Assimilative

Crimes Act (18 U.S.C. 13). Thirty-two FBI field offices have some degree of investigative responsibility in IC, ranging from exclusive federal jurisdiction—19 field offices—to concurrent federal and state jurisdiction. The Violent Crime Control and

Law Enforcement Act of 1994 expanded federal criminal jurisdiction in IC in such

areas as guns, violent juveniles, drugs and domestic violence. Because of the FBI’s
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unique responsibility in IC, enhancements are key to improving federal law enforcement’s efforts in IC.

Contract Forensic Exams.—Violent crime cases for which the FBI has jurisdiction

in IC (e.g., murder, aggravated assault and sexual assault of adults and children)

involve biological evidence requiring forensic examinations, the results of which are

often needed before arrests are made and indictments obtained. The FBI Laboratory

cannot currently provide timely turnaround for forensic examinations of evidence

from IC violent crime cases. At times this results in IC cases being dismissed because of the Speedy Trial Act. Although the Laboratory’s cadre of qualified examiners is expanding, it will likely remain insufficient to provide acceptable turnaround time for all IC cases until at least 2002.

As a result, many FBI IC field offices send evidence to either commercial or state

laboratories for examination. The FBI entered into a contract with the Arizona Department of Public Safety (AZ DPS) in April 1998 for examinations of IC cases for

the Phoenix field office. This contract was necessary because the state legislature

had ordered the laboratory to stop performing examinations in federal cases without

payment for services.

The additional funding will allow the FBI to enter into contracts with state labs

to examine IC forensic evidence for Minneapolis, Albuquerque and Salt Lake City

field offices. Phoenix and these 3 field offices cover 77 percent of the FBI’s work in

IC. With these contracts, the FBI will be able to ensure a uniform level of forensic

service that meets Speedy Trial Act requirements for its major IC offices.

Victim Witness Specialists.—FBI special agents currently provide victim witness

services in IC. However, because their primary responsibility is to conduct investigations, they rarely can provide more than minimal assistance. Because of this, the

FBI requests 31 VWS for its Victim Witness Assistance (VWA) Program to work in

26 RAs to better address the needs of the victims of violent crime in IC. For most

of IC, federal law enforcement is the only protection that victims have from violent

crime. Violent crime rates in IC are significantly higher than in the rest of society.

Since sexual/physical abuse of children is one of the largest crime problems in IC,

a high percentage of the victims in IC are children. Many children in IC are either

victims of, or witnesses to, the most horrible violent crimes imaginable—homicides,

rapes and aggravated assaults. Due to severe alcoholism in IC, many victims suffer

from fetal alcohol syndrome or other serious mental health needs. They also live in

the most impoverished conditions in the United States. As a group, residents in IC

also have one of the lowest education levels in the United States. As a result, these

victims and witnesses need help to understand the judicial process and to be available for court proceedings.

Many families in IC reside away from population centers and do not have reliable

means of transportation to travel the lengthy distances to the offices and courtrooms

of government attorneys, magistrates and judges in which they must appear as participants in the judicial process. Currently, the agents provide the transportation.

The VWSs will be able to provide this service, allowing the agent to spend more

time on investigations.

Other duties of a VWS in IC include, but are not limited to, social service referrals, providing transportation to medical facilities, and emotional support follow-up.

In most cases, the VWS assists the link between the FBI and the United States Attorney’s Office.

A VWS can also enhance the FBI’s ability to communicate and develop rapport

with the Native American community. With a trained VWS, the FBI has the ability

to bridge the gap between the social, legal and investigative issues relevant to Native Americans. With 31 VWSs assigned to IC RAs, a Native American victim will

have more information about the investigation and the overall legal process.

Safe Trails Task Force.—STTFs are key to federal efforts to ensure that violent

crimes in IC are approached in a shared and cooperative effort, in spite of complex

jurisdictional issues inherent in IC. When tribal or BIA officers work together with

FBI agents in STTFs, all parties benefit tremendously. The FBI agents receive

credibility and legitimacy on the reservation, because they are in an STTF with Native American officers. The FBI agents are more effective and safer in IC when they

work with tribal/BIA officers on STTFs because they can benefit from the Native

American officer’s knowledge of the local community and culture. The tribal and

BIA officers benefit because they learn FBI investigative techniques and procedures.

Because tribal, BIA, and FBI investigators all grow professionally from the STTFs

and STTFs maximize the use of limited resources, the STTFs serve to enhance law

enforcement services in IC.

However, in some areas of IC, an obstacle to the full-time participation of tribal

law enforcement officers on STTFs is the lack of tribal financial resources to pay

overtime to its investigators. For some tribal law enforcement agencies, diverting
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limited financial resources to pay overtime to a full-time STTF participant decreases

the resources available to the agency to provide other necessary policing services to

the tribal community it serves. In order for the FBI and tribal law enforcement

agencies to take advantage of pooling limited personnel resources, funding to pay

overtime for tribal criminal investigators to participate full-time on the STTFs is

critical.

Question. A third component of the FBI program in Indian Country is support of forensic examinations. The request of $1.4 million would add three additional field

offices, including one in Albuquerque. What have these offices contributed to improving law enforcement in Indian Country? Answer. The $1,405,000 request would allow the FBI to contract with accredited

state and local laboratories to conduct forensic examinations for Indian Country (IC)

cases from the FBI’s Minneapolis, Salt Lake City and Albuquerque field offices. The

FBI already has a contract with the Arizona Department of Public Safety Laboratory to conduct forensic examinations for IC cases from the FBI’s Phoenix field office, which is the FBI’s second largest IC field office.

The Minneapolis, Salt Lake City and Albuquerque field offices are, respectively,

the FBI’s first, third and fourth largest IC field offices. Together, they accounted for

61 percent of the FBI’s IC cases opened between fiscal year 1994 and fiscal year

1999. Out of a total of 8,620 FBI IC cases opened between fiscal year 1994 and fiscal

year 1999, Minneapolis opened 3,032 cases (35 percent); Salt Lake City opened

1,285 cases (15 percent) and Albuquerque opened 952 cases (11 percent). If the

Phoenix field office is included, these 4 field offices opened 77 percent of the FBI’s

IC cases during this time period. Because these 4 field offices do the majority of the

FBI’s investigations in IC, they are in the greatest need of contracts for forensic

services in order to comply with Speedy Trial Act requirements and provide adequate service for IC.

With respect to improving law enforcement in Indian Country, the Minneapolis,

Salt Lake City and Albuquerque field offices operate Safe Trails Task Forces

(STTFs). These STTFs have been successful in maximizing the use of limited FBI,

tribal, Bureau of Indian Affairs (BIA) and local personnel and resources to target

violent felonies in IC.

Additionally, the Minneapolis, Salt Lake City and Albuquerque field offices sponsor training for tribal, BIA and local officers working in IC. These classes include

Law Enforcement Safety and Survival, Crime Scene Processing, Crimes Against

Children, Basic Death Investigations, and Advanced Death Investigations.

All three field offices have increased personnel resources dedicated to IC investigations. Between 1997 and 1999, the FBI’s Minneapolis field office added 12

agents while the Salt Lake City and Albuquerque field offices each added 9 agents

to IC work.

The Salt Lake City Division hired two victim witness specialist with funding from

the Department of Justice’s Office for Victims of Crime. These specialists provide

victim witness assistance on Indian reservations in southern Utah and south-central

Montana.

Question. Finally, would the Department please provide the Subcommittee with

a summary of the funding proposed to be allocated under the Indian Law Enforcement Initiative in fiscal year 2001?

Answer. Homicide and violent crime rates on Indian lands are rising, even as

crime rates in the rest of the country fall. The fiscal year 2001 budget proposes an

additional $82 million to fund public safety programs on Indian land. The money

is to be used to increase the number of fully trained and equipped police officers

in Indian country; improve the quality of the criminal justice system, including

courts and detention facilities; enhance substance abuse programs; and combat tribal youth crime. Budget highlights include:

Office of Justice Programs

$10,000,000 for OJP’s Indian Tribal Courts Program, bringing total funding to $15

million. This increase will fund many new grants to plan, maintain, and enhance

tribal courts.

$10,000,000 for the tribal portion of OJP’s Zero Tolerance Drug Supervision Program. This initiative will provide discretionary grants to tribes for comprehensive

drug testing and treatment programs and to implement graduated sanctions for individuals within the criminal justice system.

$8,000,000 for an Indian Alcohol and Substance Abuse Diversion Program. Of this

amount, $6.5 million will be used for grants to support tribal detention or probationbased projects to divert offenders who abuse alcohol and drugs to detoxification and

halfway houses. Currently, many tribal criminal justice systems have minimal referral services available for court-mandated activities. The remaining funding will be
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used for training, technical assistance, research, evaluation, and data collection efforts.

$8,000,000 to provide 57 Indian tribes with resources to develop or enhance programs to address tribal youth with mental health, behavioral, or alcohol and substance abuse problems. Additional funds will pay for a variety of training, technical

assistance, research, evaluation, and data collection efforts.

$6,000,000 for Tribal Criminal and Civil Legal Assistance. Of this total, $4.5 million will be used to provide Indian tribes, tribal consortia, and private/non-profit

legal service organizations serving a reservation-based constituency with the resources to develop or enhance their capacity to provide criminal and civil legal assistance. Another $1 million will be used to provide discretionary grants to the 31

existing Tribal Colleges to create, develop and enhance a two-year curriculum on

paralegal studies, law advocate studies, indigenous justice systems or other areas

directly related to criminal and civil legal assistance. The remaining funding will

be used for training, technical assistance, research, evaluation, and data collection

efforts.

$5,000,000 to fund sexual assault nurse examiner (SANE) units in Indian Country, which will gather the evidence necessary for prosecuting sexual offenders. This

funding will be used for a pilot project that would establish SANE units at 10 tribal

sites.

$2,000,000 to conduct a national census of tribal criminal justice agencies and related statistical activities. These efforts will offer a systematic understanding of how

criminal matters are adjudicated and disposed of on Native American lands. $12,500,000 for Title V Incentive Grants for Local Delinquency Prevention (an in- crease of $7.5 million) and the Police Corps Program (an additional $5 million).

These funds will support tribal juvenile justice systems and will provide additional

training for tribal police officers.

Community Oriented Policing Services

$5,000,000 for funding, training, and equipping additional Tribal uniformed offi- cers (for a total of $45 million).

$5,000,000 for grants to tribal authorities to improve their general forensic capabilities. This is part of the COPS request for crime fighting through technology.

United States Attorneys

$4,699,000 and 60 positions (33 attorneys) to support innovative, communitybased strategies aimed at reducing overall violent crime, violent gangs, and juvenile

crime on Indian reservations.

Federal Bureau of Investigation

$2,600,000 to hire and equip 31 Victim Witness Specialists (VWS) who would be

assigned to resident agencies on or near Indian Country. The specialists will identify and assist all victims and witnesses of federal crimes in which the FBI is the

primary investigative agency. $1,405,000 for contracts with 3 accredited, full-service state crime laboratories to

conduct forensic exams on Indian Country evidence gathered in the Minneapolis, Albuquerque and Salt Lake City field offices, which have accounted for 61 percent of

Indian Country cases in the past 5 years.

634,000 for overtime for tribal, state and local full time non-federal law enforcement officers on 10 to 12 Safe Trails Task Forces (STTFs). In many areas, a significant obstacle to participating on STTFs is the limited budgetary resources of tribal

agencies to compensate officers for overtime.

General Administration

$932,000 and 8 positions within the Office of the Associate Attorney General

(OASG) to institutionalize the Office of Tribal Justice (OTJ) as an integral, ongoing

component of the Department. The Justice Department has significant responsibilities towards Indian Country, supporting the development of strong tribal law enforcement, tribal courts, and institutions of self-government.

Criminal Division

$70,000 and 1 position to assist the Criminal Division in continuing its role in

developing the Presidential Initiative to Improve Law Enforcement in Indian Country and to ensure that the Justice Department will have an effective voice in law

enforcement and policy matters in Indian Country.

COUNTERTERRORISM TECHNOLOGY R&D—FBI

Question. Director Freeh, in your testimony on page 12 you highlight the $10.5

million Congress appropriated in the fiscal year 1998 Commerce, Justice, State, and
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the Judiciary Appropriations bill to initiate several counterterrorism research and

development programs, including a partnership with the Southwest Surety Institute. The fiscal year 2001 budget includes a requested increase of $5 million to continue and expand these projects.

Director Freeh, can you provide the Subcommittee with a status report on what

the FBI has accomplished through its counterterrorism R&D program which the

Congress funded at $10.5 million in fiscal year 1998?

Answer. The 1998 Justice Appropriations Act provided the FBI with $10.5 million

from the Attorney General’s Counterterrorism (CT) Fund for counterterrorism research and development (R&D). The funding was applied to the following programs:

—$2 million was designated for a cooperative agreement with the Southwest Surety Institute (SSI) for the development and delivery of training courses to degree students and for counterterrorism-related operational and support services

at consortium institutions. Under this agreement, 12 task-orders were agreed

to between the FBI and SSI. SSI either has completed or is scheduled to complete all of these projects by September 2000.

—$5 million was allocated for explosives detection/forensic science. The FBI initiated 17 CT R&D projects with the Department of Energy (DOE) and 11 CT

projects with industry and academia in a variety of explosives detection and forensic science areas. Please see the attached chart, Status of FBI Laboratory

Counterterrorism Research and Development Projects, for a summary of the

counterterrorism projects that were funded with 1998 CT Fund resources.

—$2.5 million was used for the development of data exploitation tools. The FBI

utilized $1.3 million to develop the Automated Computer Examination System

(ACES). ACES provides a standardized computer evidence tool to scan thousands of files for identification of known format and executable program files.

As of March 1999, ACES development was completed and FBI examiners began

training with the system. The remaining $1.2 million was utilized to develop

systems and techniques for conducting Title III and Title 50 interceptions on

computer networks.

—$1 million was designated for developing training programs to provide investigators in the FBI and other federal, state, and local law enforcement personnel, with the training and expertise needed to detect and prevent computer

intrusions. Funding is being utilized to secure the assistance of industry and

academic experts to design and help deliver these programs, and for expenses

associated with the training sessions.

Question. What initiatives currently underway does the FBI plan to continue if

Congress approves the $5 million requested to continue and expand these projects?

Answer. The FBI would like to begin Phase II efforts for the following R&D

projects that were initially funded in 1998: Explosives Damage to Metal; Handheld

Explosives Detector; Standoff Explosives Detection by Microwaves; 3-D Imaging and

Ranging; Serial Number Restoration; Trace Botanical Analysis; Statistical Treatment of Class Evidence; Institutional Knowledge Preservation; Fluorescent

Superglue; Mitochondrial DNA Sequencing; and Facial Reconstruction. Please see

the attached chart for additional information on these projects.

STATUS OF FBI LABORATORY COUNTERTERRORISM RESEARCH AND DEVELOPMENT PROJECTS

[As of April 25, 2000]

Project Description of Deliverables Deliverable Due Status

MANPADS Expert Forensic System.Integrated Resource Database and Investigator’s Guidelines.4/99 Delivered.

Handheld Ion Mobility Spectrometer.Handheld Ion Mobility Explosives Detector .............................. 4/99 Delivered.

Explosives Damage to Metals ........ Metallographic Examination Procedures for Explosives Debris.9/99 Delivered.

Standoff Explosives Detection by

Microwaves.

Proof of Principle Microwave-Based Explosives Detector ........ 1/00 Delivered.

3-D Imaging and Ranging ............ Handheld Crime Scene 3-D Measurement and Imaging System.1/01 On-Target.

Serial Number Restoration ............. Metallographic Non-Destructive S/N Recovery Methods .......... 9/99 Delivered.

Elemental Profiling of Metals as

Evidence.

Laser Ablation ICP/MS Metal Fragment Analysis Procedures .. 9/00 On-Target.

Statistical Treatment of Class Evidence.Enhanced ‘‘Match’’ Criteria Statistical Procedures ................. 6/00 On-Target.
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STATUS OF FBI LABORATORY COUNTERTERRORISM RESEARCH AND DEVELOPMENT PROJECTS—

Continued

[As of April 25, 2000]

Project Description of Deliverables Deliverable Due Status

Enhanced Trace Evidence Discrimination.Fiber Dye Identification Methods by Capillary Electrophoresis.6/00 On-Target.

Small Robotic Vehicle Evaluation .. Small Haz-Mat Crime Scene Robotic Vehicle .......................... 9/99 Delivered.

Solid Phase Micro Extraction ......... Solid Phase Micro Extraction Field Test Kit and Procedures ... 4/99 Delivered.

Trace Botanical Identification ....... Grass Stain ID using Hypervariable Chloroplast DNA ............. 9/00 On-Target.

Degradation of Drugs in Embalmed Tissue.Identify Post-Mortem Drug/Formaldehyde Reactions ............... 9/00 On-Target.

Automation of MtDNA .................... Laboratory Robotics for Automated MtDNA Analysis ............... 3/00 Delivered.

Crime Scene Reconstruction .......... 3-D Video Crime Scene Documentation Software .................... 6/00 On-Target.

Active Thermography for S/N Restoration.Thermal Imaging Equipment for Serial Number Restoration .. 5/00 On-Target.

Veterinary Science Resources ........ Compilation of National Veterinary Resources ......................... 9/99 Delivered.

Institutional Knowledge Preservation.Subject Matter Expert-Tacit Knowledge Preservation .............. 6/00 On-Target.

Vulnerability Attacks Research ...... Study of Vulnerability Attacks .................................................. 3/00 Delivered.

Rapid DNA Profile Identification .... Raman Spectral Database of Hazardous Materials ................. 6/00 On-Target.

Sem X-Ray Spectral Database ...... SEM X-Ray Spectral/Digital Image Database Software ........... 12/99 Delivered.

Raman Spectral Database ............. Raman Spectral Database of Hazardous Materials ................. 12/99 Delivered.

Development of Distance Learning

Modules.

Crime Scene Management Web-Based Training ...................... 2/00 Delivered.

Latent Fingerprints in Blood .......... Chemical and Spectral Enhancement of Bloody Latents ........ 12/99 Delivered.

Flourescent Cyanoacrylates ............ Polymerization Studies and Colored Superglue ........................ 9/99 Delivered.

Database of 5,000 MtDNA Sequence.Database of 5,000 MtDNA Samples ......................................... 9/00 On-Target.

Facial Reconstruction .................... Computerized Facial Reconstruction Software ......................... 6/00 On-Target.

First Responder Web-based Training.Contaminated Individuals/Evidence Handling ......................... 1/00 Delivered.

Question. What are the new areas of R&D that will be addressed with the $5 million in appropriations?

Answer. If the $5 million is appropriated in fiscal year 2001, the FBI would initiate new projects in the following areas:

Polymer Sensors for Explosives.—A private industry R&D initiative has discovered

that the ability of polymers to fluoresce is inhibited in the presence of an explosive

molecule. To date, this effect occurs on polymers when in the presence of as few as

one explosive molecule among a trillion other molecules (i.e., one part-per trillion

sensitivity). This R&D effort would pursue forensic and law enforcement uses of the

technology.

Explosives Yield Computer Modeling from Observed Physical Damage.—During

the development of explosives to be manufactured, current engineering computer

models predict explosive damage to materials surrounding their detonation based

upon a known explosive charge. When investigating the terrorist or criminal use of

explosives, computer models that can predict the explosive charge based upon the

damage to materials surrounding the detonation are needed. This effort may address this need and be suitable for inclusion in existing Technical Support Working

Group (TSWG) efforts.

Soil Profiling by Molecular Technology.—The forensic identification of soil may be

enhanced through the identification and characterization of the molecular

deoxyribonucleic acid (DNA) present from plant, insect, or animal life even if the

soil has been exposed to biological or chemical warfare agents. This project would

further examine this theory.

Field Instrument Evaluation.—The Department of Energy has developed portable

analytical instrument technology for use in the analysis of hazardous materials at

crime scenes. This project would further identify, adapt and modify such instrument

needs for the law enforcement community. Examples of items to be evaluated include the ability to conduct hand held molecular DNA analysis and portable gas

chromatography.

Robotic Vehicle Enhancements.—Phase I of this effort delivered a small ‘‘Rattler’’

robotic vehicle. Phase II of this project would be a related, but new effort to enhance

the sensor, mobility and manipulative capabilities of small robotic vehicle(s). This
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project would focus on vehicles developed by the Sandia National Laboratory for the

survey, sensing and collection of physical evidence from hazardous crime scenes.

Digital Image Evidence Authentication.—The FBI’s Questioned Documents Unit (QDU) currently incurs a $500 per day cost to develop forensic images on 70 mm

film. The QDU would prefer to replace its film images with digital images, but the

proper authentication of digital images or recovered digital data requires precise

protocols and rigorous storage requirements in order to authenticate they have not

been tampered with. This effort would explore digital watermarking and

steganography as means to authenticate digital photographs.

Spectral Characterization of Toners and Ink.—This project would develop a valid

procedure for the spectral comparisons of colored toners and inks used to produce

forgeries of secure documents.

Taggant Development.—The tagging, tracing and marking of documents and other

valuable items is often a challenge in certain special operations. This project would

examine two private industry R&D initiatives, which have developed new chemicals

to deal with this problem. The first initiative uses compounds know as upconverting

phosphors to mark inks, toners, papers, chemicals, and even explosives for later

identification. These compounds require simple, but specific detection methods. The

second initiative proposes to develop a series of photoreactive dye-polymers, which

can be incorporated into paper or the toner of ink cartridges and can change

spectroscopic properties if exposed to the bright light of laser scanner or photocopy

machines.

Automated Forgery Detection.—This effort would provide for testing, evaluation,

analysis, and a report on technologies available for automated forgery detection of

ransom and bank robbery notes.

Computer-Aided Hair Microscopy.—The microscopic comparisons of hair samples

require considerable experience and is time consuming. As an analysis aid, this

project would explore digital video capture and microscopic video image comparison

methods in order to reduce the number of non-matched hair specimens.

Robotic Manipulator Arms.—This effort would develop robotic tactile manipulator

arms and 3-D visions systems. The FBI accepted delivery of prototype robotic platforms designed by the U.S. Military in 1998 and a small robot from Sandia National

Laboratory in 1999 for testing hazardous crime scene materials. Though the robots

offer maneuverability with precise control, light-weight tactile manipulator arms

(like those developed for tele-surgery) are needed for this task. The development of

3-D vision systems would enable the robot operator to work at a safe distance from

the crime scene without experiencing vision deficits.

Daubert/Frye Database.—This project would develop an automated means of collecting, storing, and evaluating data related to traditional class evidence (hairs, fibers, toolmarks, etc.) for court cases. The forensic association (matching) of traditional class evidence is increasingly being challenged due to recent judicial rulings.

National Automotive Image Database.—This project would examine the potential

to connect a search engine to an auto image warehouse to assist law enforcement

in enhancing witness descriptions when developing automobile identifications. The

Wieck Corporation operates an image warehouse in support of the automotive industry and provides vehicle images to trade publications and the media.

DNA Chip Design Evaluation.—The Massachusetts Institute of Technology proposes to evaluate the design criteria necessary for the adaption of commercial microDNA technology for forensic applications in decreasing the time required for sequencing mitochondrial DNA (mtDNA) and analyzing molecular DNA samples.

3-D Facial Modeling from 2-D Photos.—The recognition of individuals in 2-D

photos, surveillance, or video tapes may be enhanced through the use of 3-D facial

reconstruction from the 2-D image. This Phase I effort would explore and demonstrate a number of techniques for this 3-D image.

Automation of DNA Processing.—This project would enhance, improve and extend

an unattended, automated, robotic method for the analysis of mtDNA and molecular

DNA. Automation of DNA analysis would assist in the rapid, high priority efforts

to identify victims of terrorist events.

Question. Do you anticipate utilizing the expertise of the Southwest Surety Institute in the second round of funding for these R&D Activities?

Answer. The cooperative agreement entered into between the FBI and SSI is a

task-order contract that is valid for a 5-year period, 1998–2003. The FBI continues

to work with SSI to identify additional task-orders suited to the expertise of the consortium and, subject to the availability of funding, will draw upon the resources and

capabilities of SSI.

The selection of initial R&D projects in 1998 was based upon responses to a broad

agency announcement issued by the FBI Laboratory. None of these initial projects

were tasked to the SSI. Many of the projects proposed for funding under the $5 mil-
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lion request would continue work started by national laboratories and other entities.

New projects proposed were selected from among those submitted in response to the

1998 broad agency announcement and will be based upon specific proposals from national laboratories and other entities.

FBI DEVELOPMENT OF DOMESTIC TERRORISM DIVISION

Background: The development of terrorism as a major threat and the need to

meet it with increased funding and personnel has provided a solid budgetary base

for the Bureau that promises to continue developing. While it is reasonable to consider such incidents as Oklahoma City and the 1996 Atlanta Olympic games as domestic terrorism, the Bureau has used this rationale to take over the investigations

of scores of crimes that are just that—crimes—with no hint of a greater plot for domestic violence. Meanwhile, the Bureau’s failure with respect to the investigation

of Chinese spying on the nation’s nuclear labs or its insistence—despite significant

evidence to the contrary—that TWA Flight 800 was a terrorist incident rather than

a mechanical failure, gives pause to the idea that we should continue to endorse the

Bureau’s expansion of the Division, or even its reorganization into ‘‘spy-catching and

domestic terrorism’’ functions. As Dan Thomasson wrote (11/17/99-W. Times): ‘‘The

concern in law enforcement . . . is that a large number of agents now will have

nothing more to do than to seek out potential terrorism and deal with it no matter

under whose bed they believe they have found it.’’ The FBI must provide parameters

to define the problem and appropriate actions; otherwise, permitting the Bureau to

justify anything it does under the guise of preventing it is too sweeping a concession

of power.

Question. In November, the FBI announced that it would separate the functions

of counterintelligence and anti-terrorism, placing each under an assistant director

who would first report to the Bureau’s deputy director and then to you—the Director. Missing from the announcement was a useful definition of what constitutes domestic terrorism. This permits the Bureau to now enter into any case, no matter

how small, and in practical terms means that hundreds of agents can now enter into

any number of crime scenes that once belonged to a variety of agencies. Worse, this

could create circumstances in which the Bureau’s agents, in the name of counterdomestic terrorism, poke into the activities of any organization deemed subversive,

no matter how innocuous it really was.

What constitutes the Bureau’s definition of domestic terrorism? Has the Bureau

established clear guidelines about the decision was made to into a case it has

deemed one of domestic terrorism?

Answer. The FBI defines terrorism as ‘‘. . . the unlawful use of force or violence

against persons or property to intimidate or coerce a government, the civilian population, or any segment thereof, in furtherance of political or social objectives.’’ The

FBI further categorizes terrorism as either domestic or international, depending on

the origin, base, and objectives of the terrorist organization. In this context, domestic terrorism is the unlawful use, or threatened use, of force or violence by a group

or individual based and operating entirely within the United States or Puerto Rico

without foreign direction and whose acts are directed at elements of the U.S. Government or its population, in the furtherance of political or social goals.

Effective March 1, 1973, jurisdictional guidelines were adopted by the Attorney

General and published in the United States Attorney’s Bulletin on April 13, 1973

governing investigations of violations of the federal explosives control statute found

in Title 18, Sections 841–848. These guidelines clarified jurisdiction for the FBI, the

Bureau of Alcohol, Tobacco and Firearms, and the U.S. Postal Inspection Service.

The guidelines state that the FBI will exercise primary jurisdiction over all Section

844 violations perpetrated by terrorist/revolutionary groups or individuals unless

otherwise directed by the Department of Justice.

In connection with the execution of investigative activities, the FBI refers to these

existing guidelines to govern decisions to initiate investigations of domestic terrorists and to manage crisis incidents involving terrorist attacks. These guidelines provide guidance for all investigations by the FBI of crimes and crime-related activities.

This means that all white collar, drug, violent crime, organized crime and domestic

security/terrorism investigations must conform to these guidelines, while investigations involving foreign counterintelligence and international terrorism matters are

subject to separate guidelines. Specifically, the Attorney General’s Guidelines on

General Crimes, Racketeering Enterprise and Domestic Security/Terrorism Investigations serve as a means to ensure that FBI investigations are performed with

care to protect individual rights and confined to matters of legitimate law enforcement interest.
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FIRST RESPONDER TRAINING

Background: Director Freeh, I continue to believe that our federal law enforcement agencies must push to train as many first responders as we can. These are

our local law enforcement, fire, and emergency medical personnel who are likely to

be first on the scene of a terrorist attack.

As the lead agency for counter-terrorism efforts by the Federal Government, you

are critical to the coordination of our federal efforts in this regard. I am most familiar with the Nunn-Lugar-Domenici program which is training state and local responders in 120 major cities, and the National Domestic Preparedness Consortium

headquartered at Fort McClellan, Alabama, which is working with training partners

to expand this effort to other cities and towns.

Question. Could you provide the Subcommittee with your assessment of federal

efforts to prepare state and local law enforcement and emergency personnel to respond to potential terrorist attacks?

Answer. Significant accomplishments have been made with respect to preparing

state and local law enforcement and emergency personnel to respond to potential

terrorist attacks. The FBI, in conjunction with other federal agencies such as the

Department of Defense, Federal Emergency Management Agency, the Justice Department’s Office of Justice Programs, and others, will continue to provide state and

local emergency personnel with the resources necessary to fully prepare and respond

to terrorist attacks.

The Hazardous Devices School (HDS), managed by the FBI’s Bomb Data Center,

is the only formal domestic training school for state and local law enforcement to

learn safe and effective bomb disposal operations. The purpose of the HDS is to prepare civilian public safety bomb technicians to locate, identify, render safe, and dispose of improvised hazardous devices, including those containing explosives, incendiary materials and materials classified as weapons of mass destruction (WMD). In

1998, 838 state and local bomb technicians were trained, along with 1,467 in 1999.

The HDS anticipates training over 1,450 state and local bomb technicians in 2000.

In addition, the Interagency Board for Equipment Standardization and Interoperability, which is co-chaired by the FBI and Department of Defense, and staffed and

supported by federal, state and local emergency responders, has created, and annually updates, a standardized equipment list to assist responders in determining

what type of equipment is needed to adequately prepare for and respond to WMD

incidents.

Question. How many local law enforcement and fire and medical personnel have

been trained?

Answer. Since 1997, the Office of State and Local Domestic Preparedness Support

(OSLDPS), Office of Justice Programs (OJP), which is the lead federal agency for

providing training to civilian emergency responders, has trained approximately

45,000 students under its Metropolitan Fire and Emergency Medical Services basic

awareness training program. Additionally, since 1998, OSLDPS has trained nearly

5,000 emergency responders at the National Domestic Preparedness Consortium institutions. Of this total, approximately 2,125 have been trained at the Center for

Domestic Preparedness CDP, 1,720 at Texas A&M, 520 at New Mexico Tech, 275

at Louisiana State University, and 270 at the Nevada Test Site. Further, OSLDPS

is working with other training providers, including but not limited to, Pine Bluff Arsenal for the provision of equipment sustaining training, the National Sheriffs’ Association, and the National Guard Bureau.

Training the nation’s public safety bomb technicians at the Hazardous Devices

School (HDS) is one of the FBI’s priorities. In 1998, we trained 838 state and local

bomb technicians, 1,467 in 1999, and we plan to train over 1,450 in 2000. The FBI

has been able to increase the output of HDS, hire more instructors, provide additional courses (including the Weapons of Mass Destruction course), and provide

equipment to bomb technicians upon their certification through funding provided by

Congress since 1998. Our future training is dependent upon continued support of

the HDS. The FBI’s $2.9 million request for the HDS would provide permanent base

funding to replace one-time enhancements from the Attorney General’s Working

Capital and Counterterrorism Funds.

Question. An important part of readiness is not only the training but the equipping of these forces. What has the Federal Government achieved with regard to

equipping these teams with the tools they need to respond to a variety of potential

attacks?

Answer. Through the OSLDPS’ Equipment Grant Program, state and local jurisdictions have been provided with federal funds to equip emergency response teams

with the equipment necessary to respond to a WMD incident. In addition, as

touched upon above, the Interagency Board for Equipment Standardization and
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Interoperability has created and annually updates a standardized equipment list to

assist responders in determining what type of equipment is needed to prepare adequately for and respond to WMD incidents. Such equipment will enable fire departments, law enforcement agencies, emergency medical services, and hazardous materials response units to enhance their response capabilities in state and local jurisdictions to incidents of domestic WMD terrorism. Numerous needs assessments have

consistently highlighted these jurisdictions’ need for specialized equipment in order

to meet the requirements presented by WMD incidents. In fiscal year 1998,

OSLDPS provided $12 million in grants to 41 local jurisdictions for the procurement

of specialized equipment, including personal protective, chemical/biological detection, decontamination, and communications equipment. In fiscal year 1999, OSLDPS

provided an additional $31 million to 157 local jurisdictions, as well as $33.8 million

to the 50 states, for the procurement of equipment. A further $8 million will be provided to the 50 states for the development of Three-Year Statewide Strategic Domestic Preparedness Plans, which will guide the use of future funding. Last year, the FBI was provided a one time increase of $25 million through the

Working Capital Fund to equip state and local bomb technicians. To date,

$22,038,371 has been obligated to purchase SRS–5 Search Suits [$5,927,200], X-Ray equipment [$9,289,852], multi-gas and lower limit detectors [$4,400,000], computers

and printers [$1,200,000], and CABO–LE databases and upgrades [$1,221,319] for

each certified bomb squad across the country.

The suits are utilized to provide balanced protection for personnel performing improvised explosive device searches as well as chemical/biological explosives hazards.

The detectors are useful in identifying low vapor pressure and highly volatile, toxic

organic compounds such as nerve agents and pesticide residues. Portable X-Rays

provide real-time, in-place diagnostic examinations of suspected explosive devices.

The computers and databases will allow all accredited bomb squads access to Law

Enforcement On-Line to discuss specific problems, receive law enforcement updates,

and access to the FBI’s Bomb Data Center publications and statistics on-line. The

databases serve as a CD–ROM format reference tool for chemical and biological warfare and terrorist threats.

Question. What is the Department doing to fully utilize existing facilities and expertise in First Responder Training for Weapons of Mass Destruction?

Answer. The FBI continues to use the Hazardous Devices School, which is located

on Redstone Arsenal, Huntsville, AL, to train state and local bomb technicians. The

facilities were originally used to store supplies for the Army, however, when the FBI

took over bomb-related training for civilians in 1971, the Army allowed the FBI to

use those facilities for classroom training. The FBI uses the facilities while reimbursing the Army for overhead and maintenance costs.

In addition, the Office of Justice Programs is utilizing existing training institutions through the National Domestic Preparedness Consortium (NDPC) to provide

a range of WMD training courses to state and local emergency responders. NDPC

members include Louisiana State university, New Mexico Institute of Mining and

Technology, Texas A&M University, Nevada Test Site, and the Center for Domestic

Preparedness. Training courses include direct delivery awareness level training for

law enforcement and fire and Emergency Medical Services personnel, to advancedlevel specialized courses taught at the Consortium sites involving the use of live

chemical agents, explosive materials, and other unique training assets.

Question. What more should the Federal Government be doing to prepare for potential terrorist incidents? Does the Administration’s cybercrime initiative address

this issue?

Answer. The recent terrorist interdictions in Washington State, and Vermont, as

well as events in Jordan, Pakistan, and other countries, underscore the continued

vulnerability of the United States to terrorism, both at home and abroad. This continuing threat, as well as the events surrounding the millennial period, has indicated areas in which the FBI’s counterterrorism capabilities must be improved. Specifically, these needs include:

—Strengthening FBI international and domestic law enforcement partnerships.

—Closing the technology gap that exists between terrorists and law enforcement

agencies by improving the FBI’s capacity to provide technical support to

counterterrorism investigations requiring court-approved interception of communications. The FBI must also expand and accelerate its conduct of

counterterrorism-related research and development projects.

—Improving FBI intelligence collection, analysis, and dissemination capabilities

by enhancing its translation capacities and the FBI’s ability to process applications for surveillance and searches authorized by the Foreign Intelligence Surveillance Act. Training for intelligence analysts is also needed to enhance caselevel tactical analysis for investigators. Moreover, the FBI’s corps of trained sur-
266

veillance specialists must be expanded so that more field offices have an organic

capacity to monitor the activities of terrorists.

—Strengthening the FBI’s operational capabilities by ensuring that agents are

adequately equipped to address Olympic safety, security, and critical incident

response requirements. Finally, as the FBI has been targeted by terrorist

threats, several field office locations require additional guard services to ensure

the existence of a safe work environment for all FBI employees.

The FBI’s 2001 cybercrime initiative as presented in the President’s 2001 budget

submission addresses this issue. In the 2001 cybercrime initiative, the FBI requests

100 positions (83 field and 17 FBIHQ) and $11,371,000 for the Computer Analysis

Response Team. In addition, the FBI requests $7,000,000 for counter-encryption

technology. These enhancements are designed to help the FBI deal with the current

and future projected backlog of computer forensic examinations, and to counter the

use of encryption by criminals and terrorists to conceal evidence of criminal communications and information. Since timely computer investigations provide significant

information pertinent to critical national security investigations, and since the Attorney General’s Five-Year Counterterrorism and Technology Crime Plan identified

the development of decryption capability to facilitate the use of evidence in court

as a top requirement, it is clear that the President’s 2001 cybercrime initiative does

take significant steps to improve our nation’s capability to respond to and investigate terrorist incidents.

RIO ARRIBA COUNTY BLACK TAR HEROIN PROBLEM

Background: Judge Freeh, Mr. Marshall—I want to begin by thanking you for all

that you and your agencies have done in the last year to help address the black

tar heroin problem in northern New Mexico.

Judge Freeh, you and I discussed this issue privately last year, and the record

will reflect that your response to my request for help was immediate, comprehensive

and extremely helpful. On behalf of the citizens of Rio Arriba Country, thank you.

Mr Marshall, your predecessor, Tom Constantine, was equally responsive. I am

sure that in your work as the Deputy Administrator, you were aware of the problem

in new Mexico as well.

Soon after the field hearing Senator Gregg held in Espanola, New Mexico on this

issue last year, federal FBI, DEA and ATF agents, along with state law enforcement

officials, rounded up more than 50 individuals involved in the drug trade in northern New Mexico. Indictments were handed down, and there have been numerous

guilty pleas.

News reports out of Rio Arriba County indicate that the streets are quieter, the

drug trade has been suppressed, and the community is on its way to healing itself

after decades of drug abuse.

Of course, we haven’t solved the drug problem in northern New Mexico. I hope

that you’ll pledge to continue to work with me throughout the remainder of your

tenures to ensure that Rio Arriba stays on the path toward reducing its drug problem.

Question. I am interested in your recommendations about a second phase of help

for the county, including any follow-up enforcement ideas to make sure that our efforts of the past year do not go to waste.

Answer. The FBI and DEA remain committed to addressing the drug problem in

Northern New Mexico through joint sophisticated and comprehensive investigations

with state and local authorities. A continued commitment to combine resources of

federal, state and local agencies is critical to achieving long-term success in addressing the larger organized crime and drug problem in Northern New Mexico, including

Arriba County.

Currently, the FBI, DEA and state and local law enforcement are involved in two

projects. The first effort focuses on a metropolitan area serving as a trans-shipment

point for heroin being smuggled by the Naryit Mexico trafficking organization. The

second effort centers on another Northern New Mexico locale, like Rio Arriba, where

both heroin and cocaine trafficking and consumption are an entrenched crime problem.

Intelligence efforts will continue to monitor any resurgence of drug activity in Rio

Arriba and all counties in New Mexico. Through the continued collection, analysis

and dissemination of criminal intelligence, all law enforcement agencies will be able

to better assess and monitor the drug trafficking patterns. The exploitation of criminal intelligence among all agencies will allow investigators the ability to devise and

employ efforts to combat any detected upsurge of heroin trafficking.

DEA is currently researching the feasibility of deploying the El Paso Field Division Mobile Enforcement Team (MET) into Rio Arriba County. The MET would put
267

approximately 10 DEA agents, plus state and local officers in the area for a concentrated 60-day period. During that time, the MET would target, disrupt and/or

dismantle a specific drug organization responsible for the distribution of heroin in

Rio Arriba County. This response will send the message to traffickers and citizens

that DEA will remain vigilant in Rio Arriba County.

The El Paso Field Division also will send the Division Demand Reduction Coordinator and Training Officer into Rio Arriba County to determine how DEA can be

most effective in reducing the demand for narcotics and helping local citizens cope

with the continuing effects of drug abuse and addiction. DEA has scheduled a Basic

Drug Investigation School for state and local officers. This school will be held in

New Mexico during the third quarter of 2000, and approximately 10 state and local

officers from the Northern New Mexico Region have been invited to attend. In an

effort to better serve the area of Northern New Mexico, DEA is exploring the feasibility of stationing two Special Agents in Santa Fe, New Mexico.

QUESTIONS SUBMITTED BY SENATOR DANIEL K. INOUYE

FBI TRACKING OF JEWELRY THEFT

Background: You received three letters from jewelers in Hawaii expressing concern about this growing trend. A letter was sent to the Director on February 3, to

request information on the federal efforts to protect this industry. A response has

not yet been received. This is an effort to bring this issue of concern to your constituents to the Director’s attention.

Question. This fall, a number of national publications published articles about the

growing trend of increased robberies and violence committed against retail jewelers

and traveling jewelry salespeople. According to reports, there are criminal gangs

who threaten this industry. It is my understanding that the average loss in this

type of crime is $355,000. Is your agency tracking these crimes?

Answer. In 1992, the FBI developed the Jewelry and Gem (JAG) initiative to combat the increasingly violent victimization of jewelry retailers and traveling salespersons. As part of this initiative, the FBI’s Major Theft/Transportation Crimes Unit

(MT/TCU) established a computerized JAG database of jewelry thefts/robberies as

reported to the FBI by its field offices, law enforcement agencies and the jewelry

industry. Since jewelry theft gangs travel throughout the United States to locate

and victimize retail stores and traveling salespersons, the database was developed

to assist law enforcement in linking seemingly disparate crimes involving similar

modus operandi and suspect descriptions. Through this database, located at FBI

Headquarters, the FBI collects and analyzes reports of jewelry thefts nationwide

and disseminates information to federal, state and local law enforcement agencies

to assist in their investigations. The JAG database is also used to calculate yearly

jewelry theft statistics produced by the FBI.

In analyzing jewelry theft data from the past few years, the FBI has not observed

a significant change in either the frequency or character of crimes committed

against ‘‘on-premises’’ jewelry retailers. This is consistent with crime data compiled

by jewelry industry security representatives which show no significant change in the

number of jewelry retail robberies from 1998 to 1999, nor the percentages of robberies involving physical contact or injury. Moreover, according to industry statistics, there was a decrease in dollar losses associated with on-premises retail thefts/

robberies from 1997 to 1999 ($117.5 million to $57.6 million).

In contrast, over the past few years, there have been substantial increases nationwide in both the frequency and levels of violence associated with thefts/robberies of

traveling salespersons, particularly in metropolitan Los Angeles, Chicago and

Miami. Jewelry industry statistics show a 35 percent increase in the number of ‘‘offpremises’’ thefts/robberies of traveling salespersons nationwide from 1998 to 1999

(240 reported cases to 323), with a dollar loss increase during this period from $32.6

million to $61.5 million. In 1999, the average loss sustained by traveling salesperson

victims was $358,307. Significantly, FBI data show that, for all incidents involving

traveling salespersons, there was a 30 percent increase in the level of violence from

1998 to 1999.

Generally, the character of criminality against traveling salespersons has changed

over the past few years from a distraction/larceny modus operandi to a violent,

confrontational style that often involves sophisticated surveillance, multiple armed

subjects and physical assault. These crimes are believed by the FBI to be almost

exclusively committed by organized South American Theft Groups, often composed

of illegal aliens using false identification.
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FBI EFFORTS TO COMBAT THIS CRIMINALITY

Question. Can you describe for me your efforts to combat this growing trend?

Answer. In addition to creation of the JAG database, which the FBI recently demonstrated at the International Association of Chiefs of Police Conference in Charlotte, North Carolina, the FBI maintains regular and close contact with the Jewelers’ Security Alliance (JSA) and other industry representatives. Together with the

JSA, the FBI has periodically sponsored regional conferences and training specifically related to jewelry theft investigations, including strategy and coordination conferences of law enforcement agencies investigating particular jewelry theft groups.

Further, the FBI conducts regular in-service training for special agents and local investigators involved in major theft matters, with particular blocks of instruction on

jewelry and fine art theft.

Consistent with its Major Theft National Investigative Strategy, the FBI has established a multi-agency Safe Streets-style Task Force concentrating on jewelry

theft in Los Angeles, the metropolitan area that has experienced the highest number of jewelry thefts/robberies and incidence of violent confrontations. Ad hoc task

forces are developing in other FBI field offices to address this problem.

VICTIM WITNESS ASSISTANCE PROGRAM

Background: The FBI’s Victim Witness Assistance Program was established to ensure FBI conformity with the federal victims rights law. The addition of 31 trained

victim and witness specialists (VWSs) will enable the FBI to increase the type and

quality of services provided and give the FBI the ability to bridge the gap between

the social, legal and investigative issues relevant to Native Americans who are not

accustomed to participation in the federal judicial system.

The Federal Government is primarily responsible for investigating major crimes

in Indian Country. Last year the Bureau of Justice Statistics issued a disturbing

report that the rate of violent victimizations among American Indians aged 12 or

older was more than twice the rate for the entire nation.

With 31 VWSs assigned to Indian Country, more Native American victims will

have more information about the investigation and the overall legal process. Liaison

within reservations communities would be strengthened, cases presented for prosecution would be much stronger and the entire judicial system would perform more

effectively as a result of the involvement of trained VWSs.

In addition, the 31 VWSs would allow for agent time that is currently being used

to provide victim and witness assistance to be returned to investigative work. For

instance, many families in Indian Country reside away from population centers and

do not have reliable means of transportation to travel lengthy distances to participate in events that require victim or witness attendance. Currently, in most instances, it is the FBI agents who provide the transportation. The VWS is capable

of providing these services, thus allowing the FBI agents to focus their attention on

conducting other investigations.

Question. You have requested funding for 31 victim witness specialists (VWSs) for

the FBI’s Victim Witness Assistance Program pursuant to the Indian Country Law

Enforcement Initiative. Why is there a special need in Indian Country?

Answer. Unlike urban centers, Indian Country (IC) presents a situation where

high levels of poverty, a lack of public transportation and extreme rural isolation

converge. The result is victims and witnesses of violent crime in IC rarely have reliable transportation and often live long distances from the offices and courtrooms of

the government attorneys, magistrates and judges in which they must appear as

participants in the judicial process. FBI special agents have traditionally provided

transportation. It is not unusual for an agent working in the Minot, ND, Resident

Agency (RA) to travel more than 700 miles round trip to transport a victim of a

crime on the Turtle Mountain Indian Reservation to Fargo, ND, to testify before the

grand jury. A child sexually abused on the Ft. Peck Reservation in Montana must

be transported 350 miles to Billings for a medical examination and evaluation necessitating making arrangements for an overnight stay, lodging and meals—logistics

which seem insurmountable to a parent or care giver who does not often leave the

reservation. As a result, it is the agents who have been providing the transportation

and making the lodging arrangements.

IC is a unique part of the United States. Cultural differences such as IC residents

being unfamiliar with the operations of a bank and thus unable to cash a reimbursement check for witness expenses are not unusual. The VWS provide a bridge

between victims or/and witnesses and the predominate cultures surrounding the reservations.

The intent of the recent Presidential Initiative for the enhancement of law enforcement in IC was to increase the delivery of law enforcement services in IC. As
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more investigative matters are initiated with the addition of law enforcement resources, greater numbers of victims and witnesses also become part of the process.

It is critical that the proper personnel, both investigative and victim witness, are

in place to accomplish the goals of the Presidential Initiative. In addressing the

need for additional investigative resources, a greater need for victim witness resources has naturally been created.

The FBI currently has 4 VWSs assigned to Indian Country, two of whom are

funded through DOJ’s Office of Victims Crime. These VWSs have helped the FBI

in its commitment to overcome IC mistrust of the Federal Government through the

building of positive relationships. The VWS in the Billings, MT, Resident Agency,

represents the FBI at Crow and Northern Cheyenne Child Protective Team meetings, and is an active member of the Crow Sex Offender Registration committee. Because of her work, the Native American community is beginning to view the FBI

as having not only an investigative function but expressing a genuine concern for

the victims.

HIGH INTENSITY DRUG TRAFFICKING AREAS PROGRAM

Background: Hawaii was designated a High Intensity Drug Trafficking Area

(HIDTA) last June. Given the obvious problem of drug use in Hawaii that lead to

this designation, this question is designed to bring the drug problem in Hawaii to

the attention of your colleagues on the Subcommittee. Your wish list will include

a request for funds to fight clandestine methamphetamine labs in Hawaii. Despite

this HIDTA designation, a grant request from Hawaii for Byrne Discretionary

grants to fight clandestine labs was rejected.

Question. The Office of National Drug Control Policy has designated 31 areas as

HIDTAs where federal, state and local agencies are working together to reduce the

harmful impact of drug trafficking. Can you share with the Subcommittee your

thoughts on the effectiveness of this program and DEA’s role in this effort?

Answer. The mission of the HIDTA program is to reduce drug trafficking activities in the most critical drug trafficking areas of the country, thereby lessening the

impact of these areas on other regions of the country. The HIDTA program strengthens America’s drug control efforts by intensifying the impact of drug control agencies through the development of partnerships between federal, state and local drug

control agencies in designated regions and by creating effective systems for them to

synchronize their efforts.

Since the original designation of 5 High Intensity Drug Trafficking Areas in 1990,

the HIDTA program has expanded to 31 areas of the country, including 5 partnerships along the Southwest Border. The Drug Enforcement Administration (DEA)

has traditionally played a critical role in the success of the HIDTA program and will

continue to do so in the future. To date, DEA has over 280 Special Agent positions

dedicated to the HIDTA program.

The 31 established HIDTAs act as a significant force multiplier for drug law enforcement efforts across the United States. In recent months, DEA and the FBI have

been working with ONDCP to develop policies and guidelines to standardize the

mission, functions, management, and infrastructure of the individual HIDTA intelligence components.

DEA does not currently provide intelligence analytical support for the HIDTA program. However, the agency has developed plans for the addition of DEA intelligence

personnel to HIDTA Intelligence Centers by fiscal year 2002. The addition of these

personnel will work to bring an interconnected national intelligence network to the

HIDTA’s as well as effective DEA intelligence programs to support HIDTA efforts.

With an infusion of DEA intelligence analytical resources, guidance, and experience,

the HIDTA intelligence program will become part of the nationwide effort to develop

effective mechanisms for the collection and sharing of intelligence information,

which can be applied in the enforcement arena.

Question. Last June, Honolulu, Hawaii was designated a High Intensity Drug

Trafficking Area. Has there been a significant reduction in drug related crime since

this designation? What has been done since the HIDTA designation to combat this

problem? What can you recommend be done to improve the effectiveness of this program?

Answer. On June 15, 1999, the Hawaii HIDTA was formally approved and provided partial funding through the fiscal year 1999 appropriation. According to

ONDCP, first year expenses for HIDTAs are largely associated with programmatic

administrative start-up costs, with little emphasis placed on operational results.

This being the case, it is too early to comment upon the Hawaii HIDTA’s effectiveness and/or any reduction in area drug related crime. Statistics from established
270

HIDTAs throughout the United States have historically indicated a reduction in

drug related crimes following implementation of HIDTA programs.

ONDCP reports that with the resources thus far provided for the Hawaii HIDTA,

a Hawaii HIDTA Director has been hired; Budget, Intelligence and Facilities Subcommittees have been established; liaison has been established with other HIDTAs

on the West Coast by visiting several existing HIDTAs in order to gain insight on

proper and successful management techniques; an updated drug threat assessment

has been conducted enabling the identification of current drug trafficking trends

and organizations; joint training on the latest drug interdiction techniques, technology, and legal issues is being conducted with all participating HIDTA law enforcement agencies; and acquisition of a Hawaii Airport Task Force site at or near

the Honolulu International Airport, in conjunction with the Hawaii HIDTA, is in

process.

ENFORCEMENT OF THE ILLEGAL IMMIGRATION REFORM AND IMMIGRANT

RESPONSIBILITY ACT

Question. In last Sunday’s Washington Post, there was an article about the enforcement of the Illegal Immigration Reform and Immigrant Responsibility Act. I

would like to submit the article for the record. The article examines an unintended

consequence of our immigration reform efforts whereby children adopted from other

countries by American families are being deported to the countries of their births

because of criminal convictions that occurred when the adopted children are adults.

These individuals who are eligible for naturalization are being deported to countries

where they have no relatives and often have no language skills.

I am concerned by this article and would like to better understand the extent of

this problem. How many children were admitted to the United States for the purpose of adoption last year? How many legal permanent residents were deported last

year who had been admitted into the United States for the purpose of adoption?

Answer. During fiscal years 1997 and 1998, 12,596 and 14,867 orphans were

adopted abroad respectively. The INS does not track the number of people deported

for criminal convictions who were originally admitted to the United States as adopted orphans.

Question. I would also like to know whether the INS tracks children admitted to

this country for adoption and to what extent the INS encourages parents to naturalize their adopted children?

Answer. The INS does not track the activities of children admitted to this country

for adoption. The INS does publish information regarding the naturalization process

in a publication called ‘‘A Guide to Naturalization.’’ The information is also available

on the INS’ web site. INS is also very active in holding special naturalization ceremonies for adopted children such as the ceremonies held by the Buffalo District Office near the Fourth of July each year.

Question. I would also like to ask you about the proposed rule 1991–99 which

would authorize the collection of fees by private organizations for fees levied to fund

the INS student-tracking system. I know that a request has been made to delay implementation of this regulation until the Congress can act to remove this requirement. If you are not disposed to delay the implementation, what support services

do you intend to provide to the private groups charged with collecting government

fees?

Answer. The INS recognizes that proposed rule 1991–99 has raised serious concerns in the academic and exchange program communities. As you know, section

641(e) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996

provides that ‘‘an approved institution of higher education and a designated exchange visitor program’’ collect and remit the proposed fee to the Attorney General.

The proposed rule follows the statutory language and recognizes these two groups

of institutions as designated fee collectors. The INS believes that the most effective

way to address the concerns raised by some Members and the regulated community

is through a legislative amendment. In order to facilitate this effort, the INS and

the Department of State are working jointly to finalize suggested amendments to

the statutory language. The concerns of the Members, as well as those of the educational institutions, will be taken into consideration as INS drafts the amendment.

The INS seeks to provide a rule that best serves all those affected in the most

reasonable manner. Until the INS has achieved that goal, and anticipating congressional action on this issue, the INS will suspend the publication schedule for the

final rule.
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QUESTIONS SUBMITTED BY SENATOR BARBARA A. MIKULSKI

EXTERNAL AUDIT OF ADMINISTRATIVE AND OPERATIONAL PERFORMANCE

Question. Has the INS had an external audit of administrative and operational

performance during your tenure? If so, please submit an executive summary of the

findings (by date) stating what you learned and the actions you have taken. If not,

why not and what have your internal analysis demonstrated?

Answer. Both the Department of Justice’s Office of Inspector General (OIG) and

the General Accounting Office (GAO) have conducted reviews and audits of administrative and operational performance of INS. In total, they have issued over 100 final

reports relating to the INS. The OIG’s reports included 691 recommendations, of

which 111 remain open. The GAO reports contained 88 recommendations, of which

26 are open. The materials related to these reports are very voluminous. Therefore,

we have attached a list of the final reports and ongoing reviews. We have also included a discussion of the highlights of the reviews that are of high interest to the

agency. Should there be particular interest on any of the reports, we would be

pleased to supply further information on any of the materials.

OFFICE OF INSPECTOR GENERAL REVIEWS

Since January 1991, the OIG has issued 101 final reports relating to INS. These

final reports contained over 694 recommendations of which INS has taken the necessary action to close 559. The OIG’s coverage has been extensive, and has covered

several administrative functions and many INS programs. The OIG currently has

10 ongoing audits or inspections within the Service.

The INS Collection of Fees at Land Border Ports of Entry: The OIG initiated this

audit because of two separate OIG investigations into the theft of fee monies at land

Ports of Entry had identified significant discrepancies in the management controls

over fee collections. The February 2000 audit confirmed that controls and procedures currently in place allow opportunities for loss or theft of fee monies without

detection at each step in the fee collection process. Consequently, INS managers

could not determine the total amount of fees that should have been collected based

on the applications processed.

Voluntary Departure: Ineffective Enforcement and Lack of Sufficient Controls

Hamper the Process: The OIG conducted an assessment in July 1999, on how INS

district officers and the Executive Office for Immigration Review immigration judges

implement voluntary departure. The OIG report found weaknesses in conducting

criminal history checks, tracking alien departures, and overall enforcement of voluntary departure orders.

Fingerprint and Biographical Check Services Provided by the Federal Bureau of

Investigation (FBI) to the Immigration and Naturalization Service: The OIG reported in March 1999, that INS did not reconcile payments against its requests for

fingerprint and name checks conducted by the FBI. This occurred because INS had

no system to track and account for all of the fingerprint and biographical check requests submitted to, or the results received from, the FBI. As a result, during fiscal

year 1996 and fiscal year 1997, INS paid approximately $7 million for unclassifiable

and duplicate fingerprint cards, processed incomplete or inaccurate fingerprint

checks for thousands of INS applicants, and did not detect a potential FBI underbilling of approximately $800,000. For name checks, the audit identified approximately $220,000 that INS incurred unnecessarily for duplicate requests. However,

the audits also identified over $230,000 for services rendered by the FBI but not

charged to the INS. This latter amount is offset by about $563,000 of charges not

supported adequately by the FBI.

Follow-up Review INS Management of Automation Programs: The OIG reported

in March 1998, that INS has not managed its automation program adequately. As

a result, the OIG initiated a follow-up review. The July 1999 report determined that

INS still did not manage its automation programs adequately during fiscal years

1995 to 1997. Specifically, (1) estimated completion dates for some automation

projects had been delayed without explanations for the delays, (2) costs continued

to spiral upward with no justification for how the funds are spent, and (3) projects

were nearing completion with no assurance they will meet performance and functional requirements.
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OFFICE OF INSPECTOR GENERAL REPORTS

Date Report Title Rept. No. No. of

Recs

No.

Open

02/18/00 Border Patrol Efforts Along the Northern Border ................................................ I–2000–04 ... 2 1

02/10/00 The Immigration and Naturalization Service Collection of Fees at Land Border

Ports of Entry.

00–05 .......... 12 11

10/14/99 Year 200 Efforts at the Immigration and Naturalization Service ...................... 00–01 .......... 4 0

09/29/99 Inspection of Cruise Ship Exemption .................................................................. I–99–13 ....... 0 0

09/23/99 INS Annual Financial Statement Fiscal Year 1998 ............................................ 99–27 .......... 25 18

08/30/99 INS and Executive Office of Immigration Review Affirmative Action Program .. 99–23 .......... 4 1

08/08/99 Follow-up Review; INS Management of the Automation Programs .................... 99–19 .......... 17 14

05/14/99 Non-Tax Delinquent Debt in the DOJ Performed at the Request of the PCIE ... 99–16 .......... 1 0

04/12/99 INS’ Selection of Advanced Card Technology ..................................................... 99–08 .......... 2 2

03/31/99 Fingerprint and Biological Check Service Provided by the FBI and the INS ..... 99–13 .......... 5 5

03/31/99 Inspection Memorandum Report: Review Contract COW–6–C–0038 of the

Vera Institute of Justice.

I–99–04 ....... 0 0

03/31/99 The Potential Fraud and the INS’ Efforts to Reduce the Risks of the Visa

Wavier Pilot Program.

I–99–10 ....... 3 0

03/31/99 Voluntary Departure: Ineffective Enforcement and Lack of Sufficient Controls

Hamper the Process.

I–99–09 ....... 5 5

03/31/99 INS’ Timeliness in Inspecting Passengers Arriving at U.S. Airports .................. 99–10 .......... 11 9

03/01/99 Sale and Leaseback of Detention Facilities ....................................................... 99–07 .......... 2 1

02/12/99 Accuracy of Adjudications and Naturalization Data in the Performance Analysis System of the INS.99–03 .......... 3 1

09/30/98 Naturalization Fingerprint Process ...................................................................... I–98–27 ....... 0 0

09/22/98 Inspection of Border Patrol Drug Interdiction Activities on the Southwest Border.I–98–20 ....... 10 1

09/14/98 Asset Forfeiture Program Management Letter Report Fiscal Year 1997 ............ 98–24 .......... 0 0

09/14/98 Asset Forfeiture Program Management Letter Report Fiscal Year 1996 ............ 98–23 .......... 0 0

09/14/98 Immigration and Naturalization Service Annual Financial Statement Fiscal

Year 1997.

98–22 .......... 29 6

09/01/98 The Department of Justice’s Joint Automated Booking System Laboratory ....... 98–28 .......... 0 0

08/11/98 Follow-up Inspection of the Management of Delivery Bonds in the INS ........... I–98–18 ....... 6 2

07/31/98 The Immigration and Naturalization Service’s Customer Management Information System (CMIS).I–98–19 ....... 1 1

07/07/98 Controls Over Certificates of Naturalization (Phase II) ...................................... I–98–14 ....... 8 3

05/29/98 Property Management and Financial Statements ............................................... 98–14 .......... 1 0

03/31/98 Inspection of Immigration Officer Training ........................................................ I–98–07 ....... 3 1

03/31/98 INS Refugees, Asylum and Parole System .......................................................... 98–11 .......... 5 0

03/25/98 INS Management of Automation Programs ......................................................... 98–09 .......... 12 0

03/24/98 Review of the INS’ Automated Biometric Identification System ........................ I–98–10 ....... 8 1

02/19/98 Controls Over Certificates of Naturalization (Phase I) ....................................... I–98–02 ....... 5 0

01/26/98 Asset Forfeiture Program Management Letter Report Fiscal Year 1995 ............ 98–03 .......... 1 0

12/12/97 Ammunition Storage at INS Facilities ................................................................. I–98–05 ....... 2 0

08/01/97 INS Annual Financial Statement Fiscal Year 1996 ............................................ 97–22A ........ 23 5

05/09/97 Immigration User Fee Remittances ..................................................................... 97–17 .......... 3 0

09/30/97 Violent Crime Reduction Trust Fund Management Letter Report Fiscal Year

1995.

97–15B ........ 6 0

03/31/97 Violent Crime Reduction Trust Fund Annual Financial Statement Fiscal Year

1995.

97–15A ........ 13 0

03/01/97 INS’s Workforce Analysis Model .......................................................................... 97–10 .......... 7 5

09/04/97 Monitoring of Nonimmigrant Overstays .............................................................. I–97–08 ....... 4 4

01/28/97 Administratively Uncontrollable Overtime (AUO) in DOJ ..................................... 97–09 .......... 4 2

01/07/97 Contracting for Detention Space ......................................................................... 97–05 .......... 3 0

01/07/97 INS Replacement of Resident Alien Identify Cards ............................................ 97–06 .......... 6 0

01/03/97 Fuel Purchases by BOP, FBI, and INS ................................................................ 97–03 .......... 1 0

01/02/97 Selected Financial Transactions for Operation Alliance INS Imprest Fund, El

Paso, Texas.

97–04 .......... 4 3

9/96 Status of Immigration and Naturalization Service’s Financial Management

Corrective Action Plan as of June, 30, 1996.

96–22 .......... 0 0

09/30/96 INS Document Fraud Records Corrections .......................................................... I–96–09 ....... 1 0

08/19/96 American Express Charge Card Use in DOJ ....................................................... I–96–10 ....... 0 0

08/16/96 INS Border Patrol Management of Aviation Operations ..................................... 96–20 .......... 8 0

05/31/96 Inspection of Efforts to Combat the Harboring and Employment of Illegal

Aliens in Sweatshops.

I–96–08 ....... 4 0

05/28/96 INS Forecasting for the Fee Accounts ................................................................. 96–13 .......... 7 0
273

OFFICE OF INSPECTOR GENERAL REPORTS—Continued

Date Report Title Rept. No. No. of

Recs

No.

Open

03/29/96 Inspection of DOJ Drug Free Work Place ............................................................ I–96–07 ....... 4 0

03/29/96 Inspection of INS’ Deportation of Aliens After Final Orders Have Been

Changed.

I–96–03 ....... 5 2

2/96 Status of Immigration and naturalization Service’s Financial Management

Corrective Action Plan as of September 30, 1995.

96–04 .......... 0 0

10/17/95 Inspection of the Influx of New Personnel .......................................................... I–96–01 ....... 0 0

09/27/95 Inspection of the INS Background Reinvestigation Program ............................. I–95–09 ....... 3 0

09/26/95 INS Select Enforcement Activities ....................................................................... 95–30 .......... 7 1

08/18/95 Administration of Disciplinary Action in INS ...................................................... I–94–01 ....... 0 0

09/15/95 Organized Crime Drug Enforcement Task Force Operations in DOJ ................... 95–31 .......... 0 0

07/27/95 INS Operations Jobs Pilot .................................................................................... 95–25 .......... 4 0

06/30/95 Inspection of the Systematic Alien Verification for Entitlements Program

(SAVE) in INS.

I–92–20 ....... 10 0

03/30/95 Procurement Activities for the US Border Patrol Air Operations ........................ 95–12 .......... 7 0

03/30/95 Cash Collections at Districts and Ports in INS .................................................. 95–10 .......... 7 0

03/30/95 INS Passenger Accelerated Service System Pilot Program ................................. 95–08 .......... 9 0

11/28/94 Audit of INS Breached Bond Detention Fund Annual Financial Statement for

Fiscal Year 1993.

95–3A .......... 5 0

11/28/94 INS Fee Accounts and Breached Bond Detention Fund Management Letter Report for Fiscal Year 1993.95–2B .......... 31 0

11/28/94 Audit of INS Fee Accounts Annual Financial Statement Report for Fiscal Year

1993.

95–2A .......... 13 0

10/25/94 Process for Imposing Visa Fines in INS ............................................................. I–93–15 ....... 4 0

08/12/94 Accounts Receivable of the INS Fee Accounts ................................................... 94–30 .......... 4 0

06/23/94 INS Employment Authorization Document Program ............................................ I–94–07 ....... 10 0

06/02/94 Fee Related Contract Activities in INS ............................................................... 94–24 .......... 0 0

05/27/94 Case Hearing Process in the Executive Office of Immigration Review .............. I–93–03 ....... 0 0

04/26/94 INS Collection of Carrier Fees ............................................................................. 94–22 .......... 5 0

04/15/94 Ammunition Purchases by DOJ Bureaus ............................................................. I–93–04 ....... 2 0

04/11/94 INS Enroute Inspections ...................................................................................... 94–19 .......... 8 1

03/31/94 INS’ National Automated Immigration Lookout System II .................................. I–93–08 ....... 11 0

02/16/94 Alien Fingerprint Requirements in the INS ......................................................... I–93–13 ....... 2 0

10/27/93 INS Fee Accounts Annual Financial Statement Report Fiscal Year 1991 .......... 93–01A ........ 16 0

09/30/93 Inspection of the Management of Delivery Bonds in the INS ............................ I–92–25 ....... 21 0

09/30/93 INS Preinspection of US Bound Travelers Program ............................................ 93–16 .......... 3 0

09/30/93 Land Border Inspection Fee Program .................................................................. I–93–02 ....... 0 0

09/29/93 Injury and Disability Compensation Program within the DOJ ............................ I–92–23 ....... 0 0

09/23/93 Cash Collections at Service Centers in the INS ................................................. 93–20 .......... 16 0

09/17/93 Fee Accounts Management Letter Report Fiscal Year 1992 .............................. 93–14B ........ 11 0

09/01/93 Computer Risk Analysis and Contingency Planning ........................................... 93–17 .......... 5 0

07/27/93 Immigration Services and Special Benefits for Which Fees Have not Been Established.93–15 .......... 4 0

06/29/93 INS Fee Accounts Annual Financial Statement Fiscal Year 1992 ...................... 93–14A ........ 14 0

04/22/93 Controls over Funds and Valuables of Aliens .................................................... I–92–26 ....... 12 0

03/31/93 Database Controls at INS ................................................................................... 93–11 .......... 6 0

03/31/93 Transit Without Visa Program in INS .................................................................. I–92–27 ....... 6 0

03/26/93 Procurement Activities ......................................................................................... 93–08 .......... 24 4

01/26/93 Inspection of Detention Facilities in INS ............................................................ I–92–18 ....... 5 0

12/21/92 Controls Over established User Fee Accounts in the INS .................................. 93–03 .......... 6 0

12/10/92 INS Fee Accounts Management Letter Report Fiscal Year 1991 ........................ 93–01B ........ 11 0

07/31/92 Security of Controlled Documents and Stamps at INS ...................................... I–91–13 ....... 2 0

01/31/92 Overtime in the INS Inspection Program ............................................................ 92–1 ............ 5 0

12/23/91 Employee Assistance Program within DOJ .......................................................... I–92–02 ....... 2 1

03/29/91 Value Engineering Program in the DOJ .............................................................. 91–08 .......... 7 0

09/23/91 Immigration and Naturalization Firearms Policy ................................................ 91–15 .......... 27 0

09/17/91 Training for Inspectors in INS ............................................................................. I–91–15 ....... 7 0

07/17/91 Security of Controlled Documents and Stamps in INS ....................................... I–91–13 ....... 2 0

02/25/91 INS Phoenix District ............................................................................................. I–91–07 ....... 13 0

02/05/91 Fiscal Year 1989 INS Financial Closeout ........................................................... 91–05 .......... 13 0

01/07/91 INS Blaine Sector ................................................................................................ I–91–06 ....... 21 0

Total Recommendations ......................................................................... ...................... 691 111
274

OIG REVIEWS IN PROGRESS

OIG Draft Reports

Audit of I–94 Computer Security. Announcement Date: 4/08/99. Draft Date: 5/11/

00.

Inspection—Review of Automated Inspection Systems (SENTRI). Announcement

Date: 8/30/98. Draft Date: 4/14/00.

Ongoing OIG Reviews

Audit of Property Management II. Announcement Date: 3/05/99.

Audit of the Immigration and Naturalization Service Institutional Removal Program. Announcement Date: 3/25/99.

Audit of Deferred Inspections at Airports. Announcement Date: 6/1/99.

Audit of the Immigration and Naturalization Service’s Pre-clearance Operations.

Announcement Date: 6/1/99.

Audit of the Immigration and Naturalization Service’s Airport Detention Facilities.

Announcement Date: 6/1/99.

Audit of Fiscal Year 1999 Annual Financial Statement of the DOJ. Announcement

Date: 6/9/99.

Inspection of the Immigration and Naturalization Service’s Inspection Activities at

Sea Ports-of-Entry. Announcement Date: 6/22/99.

Inspection of the Carrier Affairs Program. Announcement Date: 6/22/99.

Follow-up Inspection of Influx of New Personnel. Announcement Date: 11/16/99.

Inspection—INS’ Document Fraud Records corrections (Follow-up). Announcement

Date: 3/08/00.

Inspection—INS’ Anti-Smuggling Units. Announcement Date: 4/25/00.

Inspection—Retrofitting of Border Patrol Vehicles (Bastrop, TX). Announcement

Date: Supplemental to Follow-up Inspection of Influx of New Personnel.

Fiscal year 2000 OIG Workplan

Audit of Cash Collections Within the DOJ.

Audit of INS/Department of State Data-share Project.

Fiscal Year 1999 Financial Statement Audits.

Audit of INS Management of Privatization.

Audit of INS Procurement Management.

Inspection of INS’ Complaint Process.

Inspection of Transit Without Visa Program (Follow-up).

Inspection of Treatment of Children Held in INS Custody.

GENERAL ACCOUNTING OFFICE REVIEWS

In January 1991, the General Accounting Office issued its report, Immigration

Management: Strong Leadership and Management Reforms Needed to Address Serious Problems. Since then, GAO has published 98 subsequent reports related to immigration policy, operational matters, and management issues. Twenty-six of these

reports contained recommendations for corrective actions, most of which are being

or have been implemented.

Since January 1, 1995, the GAO has increased its coverage of INS operations.

Major GAO reports issued during the past year have focused on the Attorney General’s strategy to deter illegal entry into the U.S., Southwest Border strategy enforcement activities, employee corruption on the Southwest Border, and INS initiatives to increase the number of new Border Patrol agents, as directed by the Illegal

Immigration Reform and Immigration Responsibility Act of 1996.

Fourteen GAO reviews of INS activities are in progress, including a review of the

processing of aliens’ applications and petitions for immigration benefits, information

technology practices, the H1–B non-immigrant visa program, alien smuggling, and

the admissions of aliens who may be eligible to be granted asylum.

INS Management: Follow-up on Selected Problems [GAO/GGD–97–132]. This report continues GAO’s previous analyses on INS management issues. In 1991, GAO

reported that INS was experiencing severe management problems in a variety of

areas. The 1997 report concluded that, although INS had made progress in addressing some management problems, many management issues still required attention.

Specifically, the GAO pointed out that INS employees needed clear guidance on implementing the immigration laws by issuing updated policies and procedures manuals and by establishing clear channels of communication within the INS organizational structure. The report also noted that INS had selected a new financial management system without focusing first on conducting an analysis of its business

processes.
275

1 Illegal Immigration: Southwest Border Strategy Results Inconclusive; More Evaluation Needed, GGD 98–21, December 1997.

Since the issuance of that report, INS has made considerable progress in addressing GAO’s’ concerns. An Office of Restructuring, established in the Office of the

Commissioner in response to both Administration and Congressional initiatives, is

addressing among other issues, these GAO concerns. With regard to the new financial system, the INS has continued to refine system implementation plans in a way

that mitigates risks and implements the system in an incremental manner. In July

1999, the INS developed a revised implementation plan that extends the planning

horizon out to fiscal year 2001.

Southwest Border Strategy Enforcement Activities. The report states that INS is

continuing to implement the Southwest border strategy by allocating additional personnel, increasing the time Border Patrol agents spend on border enforcement activities, and attempting to identify the appropriate quality and mix of technology

and personnel needed to control the border. The report also states that data on the

interim effects of the strategy continue to be limited. Finally, the GAO reiterates

the recommendation in its original review of the Southwest border strategy 1—that

a comprehensive and systematic evaluation of the strategy would help provide information about its effectiveness. This follow-up report concludes that the studies funded by INS are too limited at this time to make a comprehensive and systematic

evaluation of the strategy’s effectiveness.

Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien Employment

Exist. This report is the second of six planned reports on the Attorney General’s

strategy to deter illegal entry into the U.S. and focuses on employment issues related to unauthorized aliens. The report concludes that the INS faces significant obstacles to reducing unauthorized alien employment because the process can be circumvented or easily thwarted by fraud. The GAO made two recommendations to the

INS relating to outreach programs for employers and clarifying the criteria for opening investigations suspected of criminal activities.

Border Patrol Hiring: Despite Recent Initiatives, Fiscal Year 1999 Hiring Goal

Was Not Met. This report points out that INS initiatives to increase the number of

new Border Patrol agents as legislatively mandated did not meet the overall goal

of increasing agents on board by not less than 1,000 in each fiscal year from 1997

through 2001. The report notes that although the recruitment program yielded increases in fiscal years 1997 and 1998, the increase of only 369 agents in fiscal year

1999 caused the Service to experience a net hiring shortfall for the three-year period

ending September 30, 1999. The report included one recommendation for the Department suggesting that the INS survey why applicants are withdrawing from the

hiring process at key junctures late in that process.

GAO REPORTS ON INS

Date Report Title Rept. No. No. of

Recs

No.

Open

12/17/99 Border Patrol Hiring: Despite Recent Initiatives, Fiscal Year 1999 Hiring

Goal Was Not Met.

GGD–00–39 ........... 1 1

10/19/99 Immigration Benefits: Second Report Required by the Haitian Refugee

Immigration Fairness Act of 1998.

GGD–00–25R ......... .......... ..........

07/30/99 Aviation: Issues Associated with the Theft of Stock Used to Create Airline Tickets.RCED–99–219 ....... 0 0

06/23/99 Welfare Reform: Public Assistance Benefits Provided to Recently Naturalized Citizens.HEHS–99–102 ....... 0 0

06/07/99 Crime Technology: Federal Assistance to State and Local law Enforcement.GGD–99–101 ......... 0 0

05/10/99 Illegal Immigration: Status of Southwest Border Strategy Implementation.

GGD–99–44 ........... 0 0

04/21/99 Immigration Benefits: Applications for Adjustment of Status Under the

Haitian Refugee Immigration Fairness Act of 1998.

GGD–99–92R ......... 0 0

04/14/99 Acquisition Reform: Review of Selected Best-Value Contracts ................ NSIAD–99–93-R .... 0 0

04/02/99 Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien

Employment Exist.

GGD–99–33 ........... 2 1

03/30/99 Drug Control: INS and Customs Can Do More to Prevent Drug-Related

Employee Corruption.

GGD–99–31 ........... 4 4

03/26/99 Visa Issuance: Issues Concerning the Religious Worker Visa Program ... NSIAD–99–67 ........ 0 0

03/24/99 INS Budget: Overhiring and Decline in Revenues Have Created Fiscal

Stress.

AIMD–99–129 ........ 0 0
276

GAO REPORTS ON INS—Continued

Date Report Title Rept. No. No. of

Recs

No.

Open

12/31/98 Child Support Enforcement: Issues in Establishing an Instant Check

System for Child Support Orders.

AIMD–99–43R ....... 0 0

10/16/98 Criminal Aliens: INS’ Efforts to Remove Imprisoned Aliens Continue to

Need Improvement.

GGD–99–3 ............. 0 0

09/30/98 Firearm Safety Locks: Federal Agency Implementation of the Presidential Directive.GGD–98–201 ......... 0 0

09/10/98 H–2A Agricultural Guestworker Program: Experiences of Individual

Vidalia Onion Growers.

HEHS–98–236R ..... 0 0

09/28/98 INS User Fee Revisions: INS Complied with Guidance but Could Make

Improvement.

GGD–98–197 ......... 1 1

09/03/98 Drug Control: Information on High Intensity Drug Trafficking Areas Program.GGD–98–188 ......... 0 0

07/22/98 Immigration Statistics: Guidance on Producing Information on the U.S.

Resident Foreign-Born.

GGD–98–155 ......... 0 0

06/30/98 Federal User Fees: Some Agencies Do Not Comply with Review Requirements.GGD–98–161 ......... 0 0

06/09/98 Immigration Statistics: Information Gaps, Quality Issues Limit Utility of

Federal Data to Policymakers.

GGD–98–164 ......... 5 5

06/09/98 Immigration Statistics: Status of the Implementation of National Academy of Sciences’ Recommendations.GGD–98–119 ......... 0 0

05/28/98 Assessment of Contractor’s Review of INS’ Analysis of a Random Sample of Recently Naturalized Aliens.GGD–98–131R ....... 0 0

03/31/98 Financial Audit: 1997 Consolidated Financial Statements of the United

States Government.

................................ .......... ..........

01/19/98 Budget Issues: Inventory of Accounts with Spending Authority and Permanent Appropriations, 1996.OGC–98–23 ........... 0 0

12/11/97 Illegal Immigration: Southwest Border Strategy Results Inconclusive;

More Evaluation Needed.

GGD–98–21 ........... 1 1

12/01/97 H–2A Agricultural Worker Certification Program ....................................... HEHS–98–20 ......... 1 1

11/19/97 Illegal Aliens: Extent of Welfare Benefits Received on Behalf of U.S.

Citizen Children.

HEHS–98–30 ......... 0 0

11/05/97 Customs and Border Patrol: Resources Needed for Reopening Rail Line

from Mexico-U.S. Border into the United States.

GGD–98–20 ........... 0 0

09/30/97 Customs Service: Information on Southwest Border Drug Enforcement

Operations.

GGD–97–173 ......... 0 0

09/30/97 Departments of Justice and Treasury’s Pre-Seizure Planning and Seized

Business Management.

GGD–97–19R ......... 0 0

09/30/97 Federal Labor Relations: Survey of Official Time Used for Union Activities.GGD–97–182R ....... 0 0

07/22/97 INS Management: Follow-up on Selected Problems .................................. GGD–97–132 ......... 7 4

07/17/97 INS Employment Verification Pilot Project ................................................. GGD–97–136R ....... 0 0

07/15/97 Criminal Aliens: INS’ Efforts to Identify and Remove Imprisoned Aliens

Need to be Improved.

T–GGD–97–154 ..... 6 4

06/30/97 Relocation Travel: Numbers and Costs Reported by Federal Organizations for Fiscal Year 1991-Fiscal Year 1995.GGD–97–119 ......... 0 0

06/27/97 Subscriptions and News Clippings: Expenditures and Related Information Reported by Federal Organizations.GGD–97–99 ........... 0 0

06/16/97 Internet and Electronic Dial-up Bulletin Boards: Information Reported

by Federal Organizations.

GGD–97–86 ........... 0 0

06/04/97 INS Criminal Record Verification: Information on Process for Citizenship

Applicants.

GGD–97–118R ....... 0 0

05/22/97 Hong Kong’s Reversion to China: Effective Monitoring Critical to Assess

U.S. Nonproliferation Risks.

NSIAD–97–149 ...... 0 0

05/20/97 Alien Applications: Processing Differences Exist Among INS Field

Units.

GGD–97–47 ........... 6 6

05/01/97 Multilateral Organizations: U.S. Contributions to International Organizations for Fiscal Year 1993-Fiscal Year 1995.NSIAD–97–42 ........ 0 0

04/11/97 U.S. Currency: Treasury’s Plans to Study Genuine and Counterfeit U.S.

Currency Abroad.

NSIAD–97–04 ........ 0 0

03/10/97 Hispanic Employment Best Practices ........................................................ GGD–97–46R ......... 0 0

01/06/97 Foreign Physicians: Exchange Visitor Program Becoming Major Route to

Practicing in U.S. Underserved Areas.

HEHS–97–26 ......... 0 0
277

GAO REPORTS ON INS—Continued

Date Report Title Rept. No. No. of

Recs

No.

Open

10/21/96 Vietnamese Asylum Seekers: Refugee Screening Procedures Under the

Comprehensive Plan of Action.

NSIAD–97–12 ........ 0 0

03/14/96 Border Patrol: Staffing and Enforcement Activities .................................. GGD–96–65 ........... 0 0

02/26/96 Federal Fugitives: More Timely Entry on National wanted Person File is

Needed.

GGD–96–64 ........... 3 0

12/11/95 INS’ Efforts to Develop and Implement an Information Technology Investment Strategy.AIMD–96–26R ....... 6 0

11/29/95 INS Border Crossing Cards ........................................................................ GGD–96–25R ......... 0 0

09/26/95 Illegal Immigration: INS Overstay Estimation Methods Need Improvement.PEMD–95–20 ......... 1 1

09/18/95 Cuba: US Response to the 1994 Cuban Migration Crisis ........................ NSIAD–95–211 ...... 0 0

08/21/95 Law Enforcement Support Center: Name Based Systems Limit Ability to

Identify Arrested Aliens.

AIMD–95–147 ........ 7 0

07/25/95 Illegal Aliens: National Net Cost Estimates Vary Widely .......................... HEHS–95–133 ....... 0 0

06/08/95 INS: Information on Aliens Applying for Permanent Resident Status ...... GGD–95–162FS ..... 0 0

05/02/95 Federal Fugitive Apprehension: Agencies Taking Action to Improve Coordination and Cooperation.GGD–95–75 ........... 0 0

03/10/95 Border Control: Revised Strategy is Showing Some Positive Results ...... T–GGD–95–92 ....... 0 0

03/07/95 Information Integrity: Using Technology to Determine Eligibility to Work

and Receive Benefits.

T–AIMD–95–99 ...... 0 0

02/08/95 INS: Update of Management Problems and Program Issues .................... T–GGD–95–82 ....... 0 0

02/02/95 Welfare Reform: Implication of Proposals on Legal Immigrant’s Benefits.HEHS–95–58 ......... 0 0

10/05/94 INS: Management Problems and Program Issues ..................................... T–GGD–95–11 ....... 0 0

11/28/94 Illegal Aliens: Assessing Estimates of Final Burden on California .......... HEHS–95–22 ......... 0 0

12/29/94 Border Control: Revised Strategy is Showing Some Positive Results ...... GGD–95–30 ........... 0 0

12/22/94 INS Fingerprinting of Aliens: Efforts to Ensure Authenticity of Aliens’

Fingerprints.

GGD–95–40 ........... 2 0

11/27/94 Equal Employment Opportunity: INS’ Equal Employment Opportunity

Program.

T–GGD–95–41 ....... 0 0

07/07/94 INS Drug Task Force Activity: Agencies Supportive of INS Efforts ........... GGD–94–143 ......... 0 0

05/11/94 Nonimmigrant Visas: Use of Visas by Alien Artists, Entertainers, and

Athletes.

NSAID–94–147 ...... 0 0

04/12/94 INS User Fees: INS Working to Improve Management of User Fee Accounts.GGD–94–101 ......... 2 1

12/10/93 Border Management: Dual Management Structure at Entry Ports Should

End.

T–GGD–94–34 ....... 0 0

10/05/93 INS’ EEO Progress in DC/LA ...................................................................... GGD–94–10R ......... 0 0

09/29/93 Benefits for Illegal Aliens: Some Program Costs Increasing, but Total

Cost Unknown.

T–HRD–93–33 ....... 0 0

08/05/93 Illegal Aliens: Despite Data Limitations, Current Methods Provide Better

Population Estimates.

PEMD–93–25 ......... 6 2

07/15/93 Assessing EEO Progress at INS ................................................................. GGD–93–54R ......... 0 0

06/30/93 Immigration Enforcement: Problems in Controlling the Flow of Illegal

Aliens.

T–GGD–93–39 ....... 0 0

06/30/93 Customs Service and INS: Dual Management Structure for Border Inspections Should be Ended.GGD–93–111 ......... 1 0

06/16/93 INS Corrective Action Against Special Agents .......................................... GGD–93–46R ......... 0 0

05/17/93 Information on Black Employment at INS ................................................. GGD–93–44R ......... 0 0

04/26/93 Intercountry Adoption: Procedures are Reasonable, but Sometimes Inefficiently Administered.NSIAD–93–83 ........ 6 0

03/30/93 Immigration Issues: Making Needed Policy and Management Decisions

on Immigration Issues.

T–GGD–93–18 ....... 0 0

10/26/92 Nonimmigrant Visas: Requirement Affecting Artists, Entertainers, and

Athletes.

NSIAD–93–6 .......... 0 0

08/05/92 Border Patrol: Southwest Border Enforcement Affected by Mission Expansion and Budget.T–GGD–92–66 ....... 0 0

06/25/92 Immigration Control: Immigration Policies Affect INS Detention

Efforts.

GGD–92–85 ........... 1 0

04/28/92 Immigration and the Labor Market: Nonimmigrant Alien Workers in the

United States.

PEMD–92–17 ......... 0 0

04/09/92 Refugees: US Processing of Haitian Asylum Seekers ............................... T–NSIAD–92–25 .... 0 0
278

GAO REPORTS ON INS—Continued

Date Report Title Rept. No. No. of

Recs

No.

Open

04/08/92 US Customs Service: Concerns About Coordination and Inspection

Staffing on the Southwest Border.

T–GGD–92–29 ....... 0 0

04/03/92 IRCA-Related Discrimination: Actions Have Been Taken to Address

IRCA-Related Discrimination, But More is Needed.

T–GGD–92–21 ....... 0 0

01/23/92 Immigration Control: The Central Address File Needs to be More Accurate.GGD–92–20 ........... 0 0

01/10/92 Immigrant in Indiana: Northwest Indiana Compared to Other Parts of

the State.

GGD–92–32FS ....... 0 0

11/27/91 U.S.-Mexico Trade: Survey of U.S. Border Infrastructure Needs ............... NSIAD–92–56 ........ 0 0

09/23/91 Refugee-Related Issues in Turkey and the Soviet Union .......................... T–NSIAD–91–35 .... 0 0

07/11/91 Soviet Refugees: Processing and Admittance to the United States has

Improved.

NSIAD–91–245 ...... 0 0

07/10/91 Efforts to Improve Reception of Foreign Visitors at U.S. Airports ............ T–NSIAD–91–42 .... 0 0

06/24/91 Immigration Management: Actions Being Taken, But Problems Remain.

T–GGD–91–48 ....... 0 0

05/16/91 U.S.-Mexico Trade: Concerns About the Adequacy of the Border ............. NSIAD–91–228 ...... 0 0

04/24/91 Immigration Management: Strong Leadership and Management Reforms

Needed to Address Serious Problems.

T–GGD–91–23 ....... 0 0

03/28/91 Border Patrol: Southwest Border Enforcement Affected by Mission Expansion and Budget.GGD–91–72BR ...... 0 0

03/21/91 Refugee Assistance: U.S. Contributors for the 1980s .............................. NSIAD–91–137 ...... 0 0

03/08/91 International Trade: Easing Foreign Visitors’ Arrivals at U.S. Airports .... NSIAD–91–6 .......... 0 0

01/24/91 Financial Management: INS Lacks Accountability and Controls Over its

Resources.

AFMD–91–20 ......... 0 0

01/23/91 Immigration Management: Strong Leadership and Management Reforms

Needed to Address Serious Problems.

GGD–91–28 ........... 15 0

12/11/90 Drug Interdiction: Funding Continues to Increase but Program Effectiveness is Unknown.GGD–91–10 ........... 0 0

09/27/90 Information Management: Immigration and Naturalization Service Lacks

Ready Access to Essential Data.

IMTEC–90–75 ........ 3 0

08/06/90 Immigration Services: INS Resources and Services in the Miami District.GGD–90–98 ........... 0 0

07/18/90 Foreign Visitor Facilitation ......................................................................... T–NSIAD–90–56 .... 0 0

06/27/90 IRCA Anti-Discrimination Amendments of 1990 ....................................... T–GGD–90–51 ....... 0 0

06/27/90 Federal Appropriation for State Legalization Impact Assistance Grants .. T–HRD–90–43 ....... 0 0

05/25/90 Criminal Aliens: Prison Deportation Hearings Include Opportunities to

Contest Deportation.

GGD–90–79 ........... 0 0

05/09/90 Soviet Refugees: Processing and Admittance to the United States ........ NSIAD–90–158 ...... 1 0

04/11/90 Refugee Program: The Orderly Departure from Vietnam .......................... NSIAD–90–137 ...... 0 0

03/30/90 Immigration Reform: Employer Sanctions and the Question of Discrimination.T–GGD–90–31 ....... 0 0

03/29/90 Immigration Reform: Employer Sanctions and the Question of Discrimination.GGD–90–62 ........... 0 0

Total .............................................................................................. ................................ 88 26

GAO REVIEWS IN PROGRESS

GAO Draft Reports

U.S. Mexico Border: Better Planning, Coordination Needed to Handle Growing

Commercial Traffic (711420). Announcement Date: 11/5/98. Ongoing GAO Reviews.

Software Change Control Process (511685). Announcement Date: 2/4/00 (entrance

not yet held).

Use of the MD 600N Helicopter as a Patrol Aircraft by the San Diego Border Patrol (1836421). Announcement Date: 2/1/00.

Haitian Refugee and Immigration Fairness Act of 1998 (3rd review) (183637). Announcement Date: 1/21/00.

INS’ Processing of Aliens’ Applications & Petitions for Immigration Benefits

(183640). Announcement Date: 12/3/99.

Enforcement of Legal Provisions Relating to Tax-Motivated Expatriation (268910).

Announcement Date: 12/6/99.

Federal Agencies’ Training Programs (410506). Announcement Date: 11/19/99.

INS’ Information Technology Practices (511176). Announcement Date: 11/10/99.
279

2Performance Analysis System data through the end of March, the most recent data available.

Efforts of Commonwealth of Northern Mariana Islands to Improve Immigration

and Customs Procedures (182082). Announcement Date: 9/21/99.

H1–B Nonimmigrant Visa Program (205503). Announcement Date: 8/31/99.

INS Fee Deposit Practices(183636). Announcement Date: 8/30/99.

Alien Smuggling (183630). Announcement Date: 5/13/99.

Extent to which Federal Funds and Other Federal Resources Were Used to Support

the Olympic Games in Los Angeles, Atlanta, and are planned for Salt Lake City

(240348). Announcement Date: 3/16/99.

Admissions of Aliens Who May Be Eligible to Be Granted Asylum (183628). Announcement Date: 2/25/99.

Admissions of Aliens Who May Be Eligible to Be Granted Asylum (183627). Announcement Date: 2/25/99.

NATURALIZATION BACKLOGS

Question. What is the current backlog of cases at the Vermont Service Center?

Please specifically state the number with an analysis of the backlog by center.

Answer. A table of data 2 listing the total volume of cases currently pending at

all of the service centers is attached. This table also breaks out by service center

the volume of cases currently pending for the major benefit programs, including Applications to Adjust Status (Form I–485), Immigrant Petitions for Alien Workers

(Form I–140), Petitions for Alien Relatives (Form I–130), Petitions for Non-immigrant Workers (Form I–129), and Applications for Naturalization (Form N–400).

Question. What is the current backlog of cases at other service centers?

Answer. Information on pending case volumes for all service centers is contained

in the attached data table.

Question. What are the average processing times at the Vermont Service Center?

Answer. For applications and petitions that are processed to completion at the

service centers, the filing date of the oldest pending application or petition is listed

in the attached data table. Naturalization applications are filed with the service centers but processed to completion at the district offices after interviews. The projected

processing time for naturalization applications is listed by district office in a separate table.

Question. What has been the growth of petitions filed with the INS Service Centers in the past 7 years? Provide the number of petitions, by type, by center, in each

year.

Answer. The attached data table lists the volume of applications and petitions received at the service centers in total and for the major benefit programs for fiscal

year 1993 through fiscal year 2000 to date.
SERVICE CENTER WIDE GROWTH IN RECEIPTS—MARCH 2000

Pending as

of March

2000

Oldest Application or Petition Fiscal Year 2000TD 1999 1998 1997 1996 1995 1994 

Servicewide:

Total Applications ................................ 2,337,507 ...................... 1,901,775 3,795,701 3,457,507 3,299,213 2,845,555 2,298,766 2,278,110 I–485 (All) ........................................... 334,513 ...................... 164,304 201,917 127,134 120,370 38,592 29,498 24,215 

I–140 ................................................... 57,738 ...................... 42,842 78,786 67,319 68,580 60,621 50,947 46,156 I–130 ................................................... 389,762 ...................... 217,895 370,535 568,936 612,961 544,047 507,465 564,793 I–129 ................................................... 110,083 ...................... 369,737 494,210 375,082 301,731 260,266 263,062 292,318 N–400 .................................................. 622,914 ...................... 199,315 724,989 594,568 629,773 442,608 1,308 2,849 

California SC:

Total Applications ................................ 828,576 ...................... 437,133 1,084,950 960,550 977,225 802,787 593,710 579,770 I–485 (All) ........................................... 30,957 Dec. 1998 .... 13,315 13,882 19,298 20,327 1 23 918 I–140 ................................................... 26,416 Apr. 1999 ..... 10,227 22,190 14,370 16,208 14,074 12,206 11,935 I–130 ................................................... 178,846 Jan. 1998 ..... 70,864 124,352 203,394 207,868 171,516 172,043 187,709 

I–129 ................................................... 36,159 Feb. 2000 ..... 82,298 112,752 73,165 62,348 60,737 62,394 67,285 N–400 .................................................. 193,135 ...................... 63,229 274,568 210,924 226,021 140,982 0 0 

Nebraska SC:

Total Applications ................................ 543,957 ...................... 517,243 847,494 762,908 645,098 556,772 546,537 536,794 I–485 (All) ........................................... 189,650 Aug. 1998 .... 83,053 87,271 21,761 13,790 0 4 879 I–140 ................................................... 10,449 July 1999 ..... 7,407 13,283 11,457 13,262 13,550 14,307 13,087 I–130 ................................................... 57,186 Jan. 1999 ..... 43,036 59,966 90,209 84,525 69,540 69,077 75,412 I–129 ................................................... 16,488 Feb. 2000 ..... 56,815 89,783 70,274 62,277 59,462 80,334 87,441 N–400 .................................................. 107,752 ...................... 36,267 111,702 83,449 67,553 37,014 1,308 2,849 

Texas SC:

Total Applications ................................ 344,208 ...................... 428,918 821,665 704,461 684,109 569,044 485,439 431,519 I–485 (All) ........................................... 39,936 Dec. 1998 .... 37,979 59,370 42,647 45,213 25,109 17,502 10,612 I–140 ................................................... 552 Jan. 2000 ..... 8,616 13,194 13,683 12,540 7,576 2,732 127 I–130 ................................................... 65,721 Dec. 1997 .... 43,752 80,594 116,739 139,612 108,936 125,269 119,461 I–129 ................................................... 15,228 Feb. 2000 ..... 100,204 94,820 66,940 43,652 25,833 7,541 67 N–400 .................................................. 127,674 ...................... 40,342 135,533 92,365 124,978 107,875 0 0 

Vermont SC:

Total Applications ................................ 620,766 ...................... 518,481 1,041,592 1,029,588 992,781 916,952 673,080 730,027 
I–485 (All) ........................................... 73,970 Sep. 1998 .... 29,957 41,394 43,428 41,040 13,482 11,969 11,806 I–140 ................................................... 20,321 Sep. 1999 .... 16,592 30,119 27,809 26,570 25,421 21,702 21,007 I–130 ................................................... 88,009 Jan. 1999 ..... 60,243 105,623 158,594 180,956 194,055 141,076 182,211 

I–129 ................................................... 42,208 Feb. 2000 ..... 130,420 196,855 164,703 133,454 114,234 112,793 137,525 N–400 .................................................. 194,353 ...................... 59,477 203,186 207,830 211,221 156,737 0 0 
282

PROJECTED PROCESSING TIME—MARCH 2000

District

I–485s

Total for Last

3 Months

Completions

Average of

Last 3

Months Completions

Pending

Projected

Processing

Time

Central Region:

Chicago ........................................................ 5,114 1,705 47,317 28

Dallas ........................................................... 3,151 1,050 26,931 26

Denver .......................................................... 1,470 490 8,400 17

El Paso ......................................................... 1,501 500 15,132 30

Helena .......................................................... 232 77 1,369 18

Harlingen ..................................................... 1,114 371 12,288 33

Houston ........................................................ 1,580 527 43,857 83

Kansas ......................................................... 1,904 635 3,547 6

Omaha ......................................................... 348 116 4,797 41

San Antonio ................................................. 1,306 435 10,447 24

St. Paul ........................................................ 737 246 2,568 10

Eastern Region:

Atlanta ......................................................... 3,240 1,080 21,851 20

Baltimore ..................................................... 1,919 640 2,999 5

Boston .......................................................... 6,512 2,171 14,458 7

Buffalo ......................................................... 910 303 1,272 4

Cleveland ..................................................... 877 292 4,344 15

Detroit .......................................................... 1,681 560 5,520 10

Miami ........................................................... 11,193 3,731 48,698 13

Newark ......................................................... 5,083 1,694 26,028 15

New Orleans ................................................. 1,569 523 8,793 17

New York City .............................................. 12,110 4,037 86,280 21

Philadelphia ................................................. 2,193 731 5,568 8

Portland, ME ................................................ 321 107 264 2

San Juan ...................................................... 596 199 4,244 21

Washington, DC ........................................... 1,148 383 12,661 33

Western Region:

Anchorage .................................................... 169 56 229 4

Hawaii .......................................................... 645 215 1,099 5

Los Angeles .................................................. 20,578 6,859 110,560 16

Phoenix ......................................................... 2,966 989 30,502 31

Portland, OR ................................................ 1,859 620 4,773 8

Seattle .......................................................... 1,991 664 5,002 8

San Francisco .............................................. 10,687 3,562 70,736 20

San Diego .................................................... 2,913 971 26,884 28

Servicewide Total 1 .................................. 137,916 45,972 1,003,931 22

1 Servicewide totals include Service Center data.

PROJECTED PROCESSING TIME—MARCH 2000

REGION DISTRICT

I–485 Comps for the Last 3 Mos I–485

Pending 3/

1/1/2000 2/1/2000 3/1/2000 Sum 1/2000

COR ................................................ CHI ...... 1,509 1,800 1,805 5,114 47,317

COR ................................................ DAL ...... 960 976 1,215 3,151 26,931

COR ................................................ DEN ..... 412 437 621 1,470 8,400

COR ................................................ ELP ...... 298 520 683 1,501 15,132

COR ................................................ HEL ...... 58 72 102 232 1,369

COR ................................................ HLG ..... 404 413 297 1,114 12,288

COR ................................................ HOU ..... 554 461 565 1,580 43,857
283

PROJECTED PROCESSING TIME—MARCH 2000—Continued

REGION DISTRICT

I–485 Comps for the Last 3 Mos I–485

Pending 3/

1/1/2000 2/1/2000 3/1/2000 Sum 1/2000

COR ................................................ KAN ..... 576 544 784 1,904 3,547

COR ................................................ OMA ..... 87 136 125 348 4,797

COR ................................................ SNA ..... 592 351 363 1,306 10,447

COR ................................................ SPM ..... 287 233 217 737 2,568

EOR ................................................ ATL ...... 847 1,132 1,261 3,240 21,851

EOR ................................................ BAL ...... 523 664 732 1,919 2,999

EOR ................................................ BOS ..... 2,362 2,333 1,817 6,512 14,458

EOR ................................................ BUF ..... 257 343 310 910 1,272

EOR ................................................ CLE ...... 449 265 163 877 4,344

EOR ................................................ DET ...... 508 357 816 1,681 5,520

EOR ................................................ MIA ...... 2,283 3,946 4,964 11,193 48,698

EOR ................................................ NEW ..... 1,556 1,699 1,828 5,083 26,028

EOR ................................................ NOL ..... 229 761 579 1,569 8,793

EOR ................................................ NYC ..... 2,352 4,511 5,247 12,110 86,280

EOR ................................................ PHI ...... 818 690 685 2,193 5,568

EOR ................................................ POM ..... 50 169 102 321 264

EOR ................................................ SAJ ...... 114 165 317 596 4,244

EOR ................................................ WAS ..... 456 274 418 1,148 12,661

WOR ............................................... ANC ..... 89 62 18 169 229

WOR ............................................... HHW .... 242 218 185 645 1,099

WOR ............................................... LOS ...... 6,228 7,459 6,891 20,578 110,560

WOR ............................................... PHO ..... 899 889 1,178 2,966 30,502

WOR ............................................... POO ..... 594 647 618 1,859 4,773

WOR ............................................... SEA ...... 725 640 626 1,991 5,002

WOR ............................................... SFR ...... 3,401 3,214 4,072 10,687 70,736

WOR ............................................... SND ..... 975 934 1,004 2,913 26,884

Total ................................. ............. ................ ................ 40,608 ................ 669,418

I–485 Comps at SC

COW ............................................... ESC ..... 407 1,029 1,817 3,253

COW ............................................... NSC ..... 683 1,713 3,135 5,531

COW ............................................... SSC ..... 5,652 6,039 6,896 18,587

COW ............................................... WSC ..... 185 299 444 928

Subtotal ............................ ............. ................ ................ 12,292 ................

Total ................................. ............. ................ ................ 52,900 ................

I–485 PENDING AT SC

RDATE REGION DISTRICT Expr1

01–Mar–00 ..................................................................................................... COW .... ESC ..... 73,970

01–Mar–00 ..................................................................................................... COW .... NSC ..... 189,650

01–Mar–00 ..................................................................................................... COW .... SSC ..... 39,936

01–Mar–00 ..................................................................................................... COW .... WSC ..... 30,957

Subtotal ............................................................................................. ............. ............. 334,513

Total .................................................................................................. ............. ............. 1,003,931
284

N–400s Projected Processing Time—March 2000

[In months]

Projected

Processing

District Time

Central Region:

Chicago ............................................................................................................ 18

Dallas ............................................................................................................... 12

Denver ............................................................................................................. 11

El Paso ............................................................................................................. 11

Helena .............................................................................................................. 8

Harlingen ......................................................................................................... 11

Houston ........................................................................................................... 21

Kansas ............................................................................................................. 9

Omaha ............................................................................................................. 20

San Antonio ..................................................................................................... 8

St. Paul ............................................................................................................ 10

Eastern Region:

Atlanta ............................................................................................................. 13

Baltimore ......................................................................................................... 6

Boston .............................................................................................................. 10

Buffalo ............................................................................................................. 7

Cleveland ......................................................................................................... 18

Detroit .............................................................................................................. 16

Miami ............................................................................................................... 18

Newark ............................................................................................................ 12

New Orleans .................................................................................................... 14

New York City ................................................................................................ 11

Philadelphia .................................................................................................... 12

Portland, ME ................................................................................................... 20

San Juan ......................................................................................................... 9

Washington, DC .............................................................................................. 11

Western Region:

Anchorage ........................................................................................................ 13

Hawaii ............................................................................................................. 8

Los Angeles ..................................................................................................... 10

Phoenix ............................................................................................................ 14

Portland, OR ................................................................................................... 11

Seattle .............................................................................................................. 7

San Francisco .................................................................................................. 15

San Diego ........................................................................................................ 11

Servicewide Total 1 ...................................................................................... 12

1Servicewide totals include Service Center data.

Note: Projected Processing Time: Projected processing times are computed based on the current level of pending applications and the average level of completions during the last 3 months.

This measure may not correlate to future waiting times actually experienced by applicants since

projected processing times are computed based on past completion levels, and do not consider

the effect of planned improvements on completions. Projected processing times may vary significantly from month to month and from the average waiting time.

PROJECTED PROCESSING TIME—MARCH 2000

REGION DISTRICT

N–400 Comps for the Last 3 mos N–400

Pending 3/

1/1/2000 2/1/2000 3/1/2000 Sum 1/2000

COR ................................................ CHI ...... 3,645 4,291 5,690 13,626 79,600

COR ................................................ DAL ...... 3,760 1,720 1,734 7,214 28,460

COR ................................................ DEN ..... 1,026 883 850 2,759 10,006

COR ................................................ ELP ...... 1,494 1,168 1,511 4,173 14,892

COR ................................................ HEL ...... 205 99 124 428 1,176

COR ................................................ HLG ..... 773 783 1,994 3,550 13,148

COR ................................................ HOU ..... 2,642 2,580 2,297 7,519 53,330

COR ................................................ KAN ..... 451 914 602 1,967 5,924

COR ................................................ OMA ..... 50 233 348 631 4,156
285

PROJECTED PROCESSING TIME—MARCH 2000—Continued

REGION DISTRICT

N–400 Comps for the Last 3 mos N–400

Pending 3/

1/1/2000 2/1/2000 3/1/2000 Sum 1/2000

COR ................................................ SNA ..... 1,434 742 1,759 3,935 10,937

COR ................................................ SPM ..... 299 686 765 1,750 5,584

EOR ................................................ ATL ...... 1,974 2,344 2,630 6,948 29,119

EOR ................................................ BAL ...... 1,270 1,488 1,980 4,738 9,297

EOR ................................................ BOS ..... 3,538 3,844 1,930 9,312 30,332

EOR ................................................ BUF ..... 459 663 775 1,897 4,199

EOR ................................................ CLE ...... 383 372 476 1,231 7,217

EOR ................................................ DET ...... 955 1,280 528 2,763 14,837

EOR ................................................ MIA ...... 6,927 3,446 5,071 15,444 93,042

EOR ................................................ NEW ..... 4,330 5,076 6,540 15,946 65,702

EOR ................................................ NOL ..... 645 740 688 2,073 10,014

EOR ................................................ NYC ..... 20,512 17,782 18,000 56,294 201,873

EOR ................................................ PHI ...... 1,006 990 1,601 3,597 14,152

EOR ................................................ POM ..... 27 42 27 96 644

EOR ................................................ SAJ ...... 126 440 233 799 2,376

EOR ................................................ WAS ..... 1,092 1,347 1,766 4,205 15,278

WOR ............................................... ANC ..... 60 99 72 231 986

WOR ............................................... HHW .... 663 419 310 1,392 3,801

WOR ............................................... LOS ...... 5,991 24,706 33,144 63,841 204,717

WOR ............................................... PHO ..... 1,799 2,072 2,141 6,012 28,061

WOR ............................................... POO ..... 676 701 609 1,986 6,967

WOR ............................................... SEA ...... 1,501 1,505 1,535 4,541 11,172

WOR ............................................... SFR ...... 8,939 9,534 11,888 30,361 149,868

WOR ............................................... SND ..... 2,390 2,435 2,888 7,713 29,152

Total ................................. ............. ................ ................ ................ ................ 1,160,019

N–400 Comps for Last 3 Mos at SC

COW ............................................... ESC ..... 0 0 0 0

COW ............................................... NSC ..... 1 40 1 42

COW ............................................... SSC ..... 0 0 0 0

COW ............................................... WSC ..... 0 0 0 0

Total ................................. ............. ................ ................ ................ 42

N–400 PENDING AT SC

REGION DISTRICT 3/1/2000

COW .................................................................................................................................. ESC ..... 41

COW .................................................................................................................................. NSC ..... 10,173

COW .................................................................................................................................. SSC ..... 0

COW .................................................................................................................................. WSC ..... 0

Total .................................................................................................................... ............. 10,214

Total .................................................................................................................... ............. 10,214

INFORMATION TECHNOLOGY INFRASTRUCTURE

Question. Have you (INS) performed a systems analysis to identify what operating

and administrative procedures and equipment each office needs?

Answer. From an information technology (IT) standpoint, INS has conducted systems analyses of office automation requirements at each site worldwide. Between
286

1995 and 1998, INS accomplished the Technology Infrastructure Project (TIP). During this project we established state-of-the-art office automation capabilities and

network connectivity for INS employees at over 800 INS locations worldwide. IT infrastructure covers the gamut of IT capability from the personal computer on the

employee’s desk through the servers, routers, local area network (LAN), and the

wide area network (WAN).

The TIP process consisted of close coordination with the appropriate personnel at

each site and completion of the following steps:

—Initial Information Gathering.—A questionnaire was sent to each site that collected information including the number of people at the site, the number of

floors the site covered, and the IT equipment currently in use. The questionnaire also identified user needs, network upgrades and any mission-critical system in use.

—Pre-Site Survey.—The information provided in the questionnaire was then given

to a pre-site survey team that visited the site and did an onsite physical security assessment and a telecommunications assessment. The team also identified

any physical building issues, and remodeling and furniture requirements. From

this information, a site-specific Implementation Plan was developed that included LAN and cable plant design, facilities requirements, application requirements, office automation requirements, a training plan, and a post-deployment

support plan.

—Acquisition & Logistics.—With the information provided in the Implementation

Plan, an Acquisition Plan was developed and resulted in procurement of the

equipment, communications, and support services required for installation.

—Site Preparation and Modification.—Furniture and space modifications were accomplished to include installation of additional electric outlets, completion of environmental control modifications, completion of structural or building modifications for cable plant, ordering and installation of locally controlled communications lines, and resolution of security issues.

—Cable Plant Installation.—The cabling components were installed.

—Hardware and Software Integration.—Servers and workstations were configured

to site-specific requirements to include user IDs, work groups, print queues,

communications capabilities, and windows configuration. The equipment was

tested to ensure component interoperability, software interoperability, and LAN/

remote access communication capability. In addition, a guide was drafted for

the local system administrator that provides complete information on the equipment and system installed. Additionally, all equipment was recorded in the INS

Asset Management Information System.

—Hardware and Software Installation.—Upon arrival onsite, the installation

team reviewed and tested the cable plant installation, received shipments from

the Integration and Test facility, completed setup of the training facility, installed and tested computer room components, upgraded equipment, installed

and tested workstations and printers, migrated or rehosted office automation

applications and text and data files, updated the Implementation Plan and the

inventory, completed acceptance testing, and determined disposition of excess

equipment. Post-installation documentation was also completed during this

phase.

Upon completion of the TIP initiative, INS instituted a very similar process for

deployment of mission and business-related applications used service-wide. We work

closely with application developers to identify the effect that deployment of the application will have on the infrastructure. We test each application to assess the impact it will have on workstations and servers, and the impact of the additional traffic on the LAN and WAN. We also identify system upgrades that will be required

to support the application. At that point, we begin coordination with the sites to

which the application will be deployed and follow a process very closely aligned with

the TIP process to accomplish deployment of the application.

And finally, in order to keep INS in step with the extraordinarily dynamic information technology industry, we have instituted a ‘‘refresh’’ initiative that, once

again, mirrors the TIP process. This initiative focuses on upgrading the sites with

the oldest infrastructure so they can be fully integrated with the newer technology

being deployed not only by the program offices to support newer applications, but

also as part of the Modular program that provides workstations and infrastructure

support for the increasing INS employee population.

TECHNOLOGY INTEGRATE

Question. What is the agency’s plan to update and integrate the technology

throughout the agency? What is the time line for this plan?
287

Answer. INS recognizes the need to upgrade immediately and eventually replace

CLAIMS 3, the main case management system in use at the four service centers

for all but naturalization applications. The Immigration Services Division (ISD) is

finalizing a 3-step process to upgrade and integrate its technology. This initiative

also includes analysis of office equipment requirements.

In the first phase of this process, ISD installed new file servers at the service centers to improve and standardize the operation of CLAIMS 3 at all four centers in

August 1999. ISD is currently in the process of upgrading these servers to ensure

peek performance and upgrading the CLAIMS 3 software.

In the second phase of this process, ISD has conducted an infrastructure study

of technology at the service centers. The purpose of this study was to identify standard system configurations for the four service centers, including cabling, servers,

software, hardware, and printer needs. This study was completed in mid-April 2000,

and identified approximately $11.5 million in replacement costs.

In the final phase of this process, ISD has begun to plan development of a replacement case management system for deployment to all service centers and district offices. This project is expected to take 3 to 5 years to implement.

In addition to the initiative to upgrade and replace CLAIMS 3, INS is near the

end of its effort to deploy CLAIMS 4, the replacement case management system.

CLAIMS 4 tracks only naturalization applications, and currently does not integrate

this function with any other case management system. INS began converting all offices to CLAIMS 4 in fiscal year 1998. CLAIMS 4 has already been deployed to all

four service centers, and will be deployed to all district offices but the Los Angeles

District by the end of fiscal year 2000. ISD expects to complete deployment of

CLAIMS 4 to the Los Angeles District Office by December 2000.

SUBCOMMITTEE RECESS

Senator GREGG. Thank you, gentlemen. We appreciate your time.

Mr. FREEH. Thank you, Mr. Chairman.

Senator GREGG. We appreciate your efforts.

[Whereupon, at 11:58 a.m., Tuesday, March 7, the subcommittee

was recessed, to reconvene subject to the call of the Chair.]

(289)

DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED

AGENCIES APPROPRIATIONS FOR FISCAL

YEAR 2001

TUESDAY, MARCH 21, 2000

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC.

The subcommittee met at 10 a.m., in room S–146, the Capitol,

Hon. Judd Gregg (chairman) presiding.

Present: Senators Gregg and Stevens.

FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF WILLIAM E. KENNARD, CHAIRMAN

ACCOMPANIED BY ANDREW FISHEL, DIRECTOR, OFFICE OF THE MANAGING DIRECTOR

Senator GREGG. I think we are all set to get started here, and

we welcome the Chairman of the FCC. It is always a pleasure to

have him before the committee.

I am going to forego opening statements and, Chairman, you are

welcome to say whatever you wish.

Mr. KENNARD. Thank you very much, Mr. Chairman. As always,

it is a pleasure to appear before you and before this committee. I

very much appreciate this opportunity to present for you today the

FCC’s fiscal year 2001 budget proposal.

I wanted to outline a summary of our budget estimates and give

you an update on the activities of the Commission, particularly

with regard to the implementation of the Telecommunications Act

of 1996. I will also present you with a clear picture of our accomplishments during the past year and what we anticipate our agenda to be for the next year.

The last time I appeared before this committee, as you may recall, I presented you with a blueprint for the FCC for the 21st century, and I also want to present you today with a report card, if

you will, on my efforts to implement that blueprint.

But before I discuss those items in detail, I wanted to take a moment and thank you and this subcommittee for the support that

you have given the FCC during my tenure as Chairman. You, in

particular, Mr. Chairman, have been very, very supportive of our

mission. You have a great understanding of the role of the FCC in

this changing telecommunications environment and, frankly, the
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importance of the sector to our economic growth. And so I wanted

to emphasize how much we appreciate your support of our agency.

We are very much involved in a transitional period in telecommunications today. We are transitioning the agency from an

era of monopoly regulation to an era of competition. It has been a

very exciting undertaking, and we are well on our way to making

that transition.

I would like to briefly outline our funding needs for the next fiscal year. We are not requesting funds for any additional staff at the

FCC. Our staffing levels have remained constant throughout my

tenure. We are requesting a 2001 budget of $237,188,000. That includes FTEs to be funded from both the direct appropriations and

our auctions resources. That amount, $237 million, represents a

$27 million increase over the fiscal year 2000 appropriation. That

is a 13 percent increase. Most of that is attributable to uncontrollable cost increases, and when you break it down, most of the increase is attributable to rent, salary, and increases for our information technologies program.

Most of those funds will come from regulatory fees. The total

amount to be collected from regulatory fees would increase from

approximately $185 million in fiscal year 2000 to $200 million in

fiscal year 2001.

As you are aware, the FCC also has requested authorization to use $5.8 million in excess regulatory fees from previous years to

support our fiscal year 2000 information technology needs.

Now I would like to give you a brief update on the FCC’s activities and what is happening in the marketplace generally. We have

worked very, very hard during my tenure to implement the Telecommunications Act of 1996. The Act has played an important role

in helping us transition to a more competitive marketplace. Congress gave us some very important tools to make that transition.

On the fourth anniversary of the Act, in February of this year,

I presented a report on the telecommunications sector, which I

would like you to have. Basically, it surveys what is happening in

each of the areas of the telecom sector, and as you will see in that

report, all of the economic indicators are way up. We are seeing

tremendous growth in every sector of this business. We have seen

just in the last year to 18 months the ‘‘.com’’ explosion as Americans wake up to the power of the Internet in their lives. And it is

very interesting when you look back at the period of time when the

1996 Act was being debated and written in 1995. Another seminal

event happened that year, and that was the decision by the National Science Foundation to allow commercial use of the Internet.

And those two events taken together—the passage of the Act and

the privatization, if you will, of the Internet—really is responsible

for this explosion in competition and technology.

We are now entering what I believe to be a very, very exciting

period as we move into the broad band Internet age, as people

want more and more high-speed access to the Internet.

When I woke up this morning, I was listening to WTOP radio,

and I heard an advertisement for high-speed Internet access, and

it was sort of interesting to me to hear terms that were so arcane

and inside our little world here in the Beltway like DSL and T1

lines being advertised and entering the public lexicon. And I think
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that that really shows how much change we have seen just in the

last 5 years or so.

The next challenge, of course, is to get to a point when people

are not talking about bandwidth per se; that is, that when Americans have so much bandwidth in their lives that it becomes just as

commonplace as the dial tone or a 110-volt electric outlet. And that

is really our goal, to keep this investment pouring into our networks, both wireless and wireline, so that Americans have as much

bandwidth as they need, and at the same time, of course, making

sure that those networks are built out ubiquitously so that people

in rural areas and in inner-city areas get access. We also must ensure that there is a safety-net, universal service, so no one is left

behind.

I am pleased to report that this year many of the uncertainties

surrounding the implementation of our Act has settled down. The

courts have settled most of the jurisdictional challenges to our implementation of the Act, and we are really moving into a period

now where a lot of investment is flowing. This year is going to be

an exciting year for wireless. The Internet will move to a wireless

platform this year as more and more people access the Internet

over little networked wireless devices like Palm Pilots. That in my

view will democratize the Internet and make it accessible to more

and more people at higher speeds. So that is going to be exciting,

but it also creates a great responsibility on our agency to manage

the spectrum so that there is sufficient bandwidth available for

those wireless devices.

I also wanted to give you today a report card on the implementation of our strategic plan which I presented to you 1 year ago. This

basically gives a status report on our progress in meeting the challenges that we set out for ourselves in that strategic plan.

PREPARED STATEMENT

So, again, Mr. Chairman, I am delighted to appear before you

today and give you this status report, and, again, thank you for

your continuing support of the agency and its mission.

[The statement follows:]

PREPARED STATEMENT OF WILLIAM E. KENNARD

Mr. Chairman, Ranking Member, and members of the CJSJ Subcommittee, I appreciate this opportunity to appear before you today to discuss the Federal Communications Commission’s (FCC) fiscal year 2001 Budget. Today I will provide you with

a summary of our fiscal year 2001 Budget Estimates, discuss the ongoing changes

initiated by the Telecommunications Act of 1996, and present you with a clear picture of our accomplishments during the past year, our agenda for the current year,

and outline plans for the future. At this time, I would also like to announce that

I am releasing today my Report Card on Implementation of the Draft Strategic

Plan—‘‘A New FCC for the 21st Century.’’

PARTNERSHIP FOR THE FUTURE

Before I discuss our budget and goals with specificity, I would like to take a moment to thank this Subcommittee for its support during my tenure as Chairman of

the FCC. Because of your efforts and the outstanding work of your staff, the FCC

has been able to forge ahead with its efforts to upgrade its facilities and improve

its ability to serve the public. I recognize that in the past you have supported funding for the FCC that exceeds even the Administration’s requests. Your determination to provide sufficient funding demonstrates a special commitment to America’s

future. Let me emphasize that I share this commitment.
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We stand together on the front step of the third millennium—ready to venture

up and swing open the door to our future. If the past is prologue, this next century

will see accelerating and phenomenal change. Just as our ancestors living at the

turn of the last century could never have imagined zooming along a vast array of

super concrete byways and computer highways, we have not yet begun to imagine

the achievements of our descendants.

We all play a critical role in determining what new goals will benefit our children

and our children’s children. Communications technology is the engine of their century. It is the basis for fueling the economy, encouraging invention and bringing the

world closer together. We all want our legacy to be one of investment in this future.

We all want to be remembered for giving the next generation an edge in the future.

The Federal Communications Commission is poised to assume its role as market

facilitator in building the infrastructure of the future. Our primary mission is to

promote competition in communications, protect consumers, and support access for

every American to existing and advanced communications services.

In five years, we expect the U.S. telecommunications markets to be characterized

predominately by vigorous competition that will greatly reduce the need for direct

regulation. The advent of Internet-based and other new technology driven communications services will continue to erode the traditional regulatory distinctions between different sectors of the telecommunications industry.

Congress gave us the Telecommunications Act of 1996, and in doing so, cemented

a partnership for establishing a new pro-competitive, deregulatory model for communications policy. Now it is time to reassess our core policy functions, structure

and processes, and fund the changes that will shape our future. New competitors

and technological innovation currently are transforming telecommunications markets. History has shown that markets that have been highly monopolistic often do

not naturally become fully competitive. History also has shown that domestic markets that have been protected from foreign competition do not naturally become

open to global competition.

As I said, the past is prologue. Nevertheless, we can always alter the remainder

of any story and create our own future. We must work together to promote competition, open markets, and increase technological innovation. We must continue to protect and empower consumers as they navigate the new world of telecommunications.

Together we can achieve the twin goals of the 1996 Act: a fully competitive marketplace and access for every American to current and future advanced communications

services.

Pursuing these strategic objectives will require the identification of clear goals

and the continued execution of my Draft Strategic Plan, ‘‘A New FCC for the 21st

Century.’’ As we accomplish our transition goals, we will set the stage for a competitive environment in which communications markets look and function like other

competitive industries. We turn to you for your support again this year to help us

continue to transform our agency, adapt to new and emerging technologies, and ensure that future generations will benefit equally from these changes.

AN AFFORDABLE FUTURE: THE FISCAL YEAR 2001 BUDGET REQUEST

The FCC as we know it today will be very different both in structure and mission

as we evolve to meet the challenges of the future. Increased automation and efficiency will enable the FCC to streamline its licensing activities, accelerate the decision making process, and allow the public faster and easier access to information.

The FCC will be a ‘‘one-stop, digital shop’’ where form filing and document-location

are easy and instantaneous. The FCC will continue consolidation along functional

lines so that its structure is more consistent with convergence.

In order to follow through on this agenda, the FCC will require a fiscal year 2001

budget of $237,188,000 and a staff ceiling of 1,975 full-time equivalent (FTEs). This

includes FTEs to be funded from appropriations and auctions resources. These numbers reflect a total increase of $27,188,000 or approximately 13 percent over the fiscal year 2000 Appropriation. Uncontrollable cost increases to fund proposed government-wide pay raises, rent increases and other inflationary increases constitute 47

percent of the total requested increase in funds. Specifically, our request includes

$6.8 million for mandatory salary and benefit increases, $5.1 million for increases

Rent and Operating Fees, and $.9 million for Consumer Price Index adjustments in

contract services.

Programmatic increases to accomplish the Commission’s comprehensive information technology strategic plan initiatives comprise the remaining portion of the requested funds for fiscal year 2001. This amounts to $14.4 million for information

technology (IT) enhancements. Since the automation enhancements will directly

benefit the industry served by the Commission, this increase should be paid for by
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an increase in regulatory fees. Approximately 80 percent of the requested IT funding

increase will be used for maintenance and life cycle replacement of our existing systems. The remaining 20 percent or $3 million will be used to promote competition

through better tracking of consumer issues and complaints and better manage the

use of the nation’s airwaves in the public interest. Without adequate automation

funding, the Commission will be unable to carry out its basic functions of awarding

licenses to applicants for communications services, overseeing the implementation

of new services for the public, and reviewing and updating existing rules and regulations. In view of the importance of these services to the economy of the United

States, this investment in technology is critical.

The total amount to be collected from regulatory fees would increase from $185,754,000 in fiscal year 2000 to $200,146,000 in fiscal year 2001. As you are

aware, the FCC also has requested authorization to use $5.8 million in excess regulatory fees from previous years to support our fiscal year 2000 IT needs.

PAST ACCOMPLISHMENTS BUILD A SUCCESSFUL FUTURE

The telecommunications industry in the United States is, to date, a great success

story. We have worked hard to implement the 1996 Act and effectuate the changes

necessitated by a continually evolving marketplace. We have promoted competition

across converging technologies and throughout the telecommunications marketplace.

When I began my tenure as Chairman, we had to finish writing new rules to comply with the 1996 Act and the Supreme Court still had to pass on major sections

of the law. Reports of the 1996 Act’s premature death were rampant. Persistence

paid off. We worked together to properly implement the 1996 Act, and with your

support, we managed to make the telecommunications marketplace more viable and

better equipped to face the future.

As a result, the world is not the same as it was in 1996. The telecommunications

industry has grown since then, creating 230,000 new jobs and generating $57 billion

more revenues. Revenues in communications services, which include all telephone

services, radio, cable and broadcast television, and certain other services, have

grown by $7 billion from 1996–1998, a growth of 17 percent in real terms. That figure does not include the rapid growth in sales of communications equipment—telephone headsets, central office switching equipment, etc.—where revenues have

grown $26 billion, 24 percent, between 1997 and 1999. With the growth in output,

employment in the communications equipment and services industries has grown by

$.2 million during the past four years.

During the past year, the FCC’s staff has strived to implement common sense

rules and programs to enhance the industry’s growth, and defend those rules already in place. From wireless auctions to broadcasting and international, our staff

has handled more applications and more public participation in telecommunications

issues than ever before. Our aggressive implementation of the 1996 Act is generating new classes of competitors, new industries and lower prices.

Making a More Competitive Environment

Our most important work has been in realizing the goals of the 1996 Act to

achieve competition and universal access to new services. To that end, we adopted

rules and initiated rulemakings to eliminate barriers to entry in domestic telecommunications markets. The FCC implemented the local competition provisions of

the 1996 Act, including: (1) revised unbundling rules in response to the Supreme

Court remand in Iowa Utilities Board; (2) strengthened collocation rules; and (3)

pricing flexibility which also included a Notice of Proposed Rulemaking on whether

competitive local exchange carrier access rates should be regulated. We also expect

to complete action on two Access Reform Proceedings during the second quarter of

this year.

The FCC approved Bell Atlantic’s application under section 271 of the 1996 Act

to provide long distance service in New York after determining that New York’s

local service markets are open to competition. During the past month, the FCC negotiated a consent decree to address Bell Atlantic’s problems processing its competitors’ orders. This enforcement action promotes local competition by ensuring that

consumers will have additional choices and lower rates through expanded local competition.

We also initiated proceedings to gather information on (1) the status of deployment of advanced telecommunications capabilities; and (2) the deployment of

broadband facilities and the development of local competition. The FCC’s staff

forged ahead with determined speed to complete rulemakings on advanced services

in the areas of loops, LATAs, DSL resale, and line sharing.

Benefits to consumers in the long distance and local phone markets are an important achievement and priority. Domestic long-distance rates dropped nearly 56 per-
294

cent in real terms since 1984, saving consumers about $200 billion. Some companies

are offering services for as low as five cents per minute.

On the international front, we are less than two years into the implementation

of the WTO Agreement and the FCC’s August 1997 Benchmarks Order and we have

already started to see dramatic results. These policies have increased liberalization,

privatization, and competition, which have led to significantly lower international

accounting rates. In turn, that has led to lower international calling rates. In 1996,

the year just prior to Benchmarks and the WTO, the average price of an international long distance call originating from the United States was 74 cents per

minute. By 1998, it fell by 25 percent to 55 cents per minute, and finally to the current average of less than 55 cents per minute. By the time that Benchmarks is fully

implemented in 2003, we expect to see much deeper reductions in international calling rates. Moreover, prices on competitive routes have fallen even more dramatically. For example, rates on the U.S.-U.K. route are as low as 10 cents per minute.

Sometimes success is measured not so much by what we do, as what we decide

not to do. The FCC’s ‘‘hands-off’’ policy toward the Internet has helped fuel tremendous growth in this industry. Over 40 percent of American households have Internet

access. In 1998, the U.S. Internet economy was a $633 billion market, accounting

for nearly 8 percent of the nation’s economy and 4.8 million jobs. Electronic commerce, which will be 90 percent business-to-business, is projected to be a trilliondollar activity in the next three to five years.

Accessible Services for All Americans

We want everyone to have a piece of the Internet’s potential, which is why we

have established a framework and funding mechanism for ensuring that all of our

country’s schools and libraries are connected and that rural health care has access

to information technology. We also have worked to ensure that those individuals living on Native American lands will likewise reap the benefits of this new technology.

When the FCC’s staff was not busy passing and implementing rules that would

enhance the delivery of telecommunications services to the public or upgrading our

systems and eliminating backlogs, we were working with Congress to study cutting

edge issues like rural broadband rollout. We participated with rural Senators in two

special hearings, here in Washington and in North Dakota, to study rural

broadband rollout technologies and encourage their implementation throughout the

United States.

We also convened the Federal-State Joint Conference on Advanced Telecommunications Services (Joint Conference) on October 8, 1999, to further the vision of section 706 of the Telecommunications Act of 1996. Patterned on a resolution by the

National Association of Regulatory Utility Commissioners (NARUC), the Joint Conference joins federal and state forces to encourage the deployment of advanced telecommunications services to all Americans.

Safeguarding the Integrity of the Auctions Process

One of our most important accomplishments during the past year is the judicial

recognition of the integrity of the auctions process in the NextWave case. The Second Circuit has demonstrated that the application of common sense—the very same

common sense displayed by this Subcommittee and the Senate Budget Committee—

ensures that the auctions process will be a workable method for licensing the spectrum in the future.

I cannot emphasize enough the importance of the Second Circuit’s holding in this

case. Auctions will play an especially critical role in ensuring that sufficient spectrum is available to meet the needs of the growing digital economy. We have witnessed an explosion of telecommunications services since auctions began. In 1993,

there were 15 million wireless phones in America. Today, there are 80 million. We

have seen subscribership increase four-fold and the average wireless bill drop by 40

percent during this period. Moreover, wireless is taking over parts of the Internet.

Already we are able to use portable devices like laptops and Palm Pilots to accomplish tasks that once required us to remain hooked to a hard line tether. Wireless

represents mobility and access for new groups of people.

Over the past six years we have completed 24 auctions with over 1,800 qualified

bidders participating. Most of these bidders were qualified and worked hard to bring

service to the public. Unfortunately, there are those who tried to obtain the spectrum and then not pay a fair price for it. If we want to build upon our past auctions

successes; we have to ensure that the system is fair and predictable. That is why

I support using the legislative process to prevent future abuses of the auctions system. I commend this Subcommittee for its past efforts in this regard and I respectfully request that you again consider language that would prevent bankrupt licenses

from using the bankruptcy court to shirk their obligations to the American taxpayer.
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Addressing the Influx of Transactions

The increasing number of licensees and changing market forces have dramatically

increased the number of transfer/assignment applications processed at the Commission. Some bureaus have experienced extreme growth in the number of applications

processed during the past four years and most of the bureaus saw a significant increase in the number of applications processed. The Wireless Telecommunications

Bureau approved 23,889 license transfers in 1996. In 1999, this number jumped to

40,879. The Mass Media Bureau’s Audio Division processed 3,869 license transfer

applications in 1996 and 4,951 in 1999. In the last year prior to passage of the 1996

Act, Audio Services only processed 1,866 transfer and assignments.

Most of these transfers have been processed quickly and efficiently, with little fanfare. Recently, the FCC has been faced with the challenge of how to facilitate the

review of major transactions while ensuring that the public interest is met in an

era of increasing consolidation and convergence. Some have been more complex and

deserving of a hard look to protect the interests of the American consumer—SBC/

Ameritech, MCI/Worldcom, Airtouch/Vodafone, Direct TV/Primestar—all of these

mergers consumed Commission resources, but were worth the careful study. In the

end, our job is to protect the consumer and under the 1996 Act that you passed,

promote competition. We would be remiss in our duty to you and the American public if we did not expend the time and effort that it takes to ensure that these mergers comply with our statutes and rules.

Responding to congressional calls for improving the system for handling mergers,

I directed FCC General Counsel Christopher Wright to assess the Commission’s merger review process, and hire appropriate staff for addressing concerns raised by

the crush of applications and their growing complexity. The result is a Transactions

Team, which has already initiated the process for improving the way that we handle

mergers. The Transaction Team has moved fast to address the concerns of the public, licensees and Members of the House and Senate. Already, the Transactions

Team has identified areas of concern and moved to find workable policy solutions.

They are working to ensure that our merger review process is transparent, efficient

and predictable. They have established a web page and held a public forum on

March 1, 2000.

Improving licensing processing—whether for transfers and assignments or applications for service—has been a key ingredient of our work during the past year. We

are nearing completion on the implementation of a Universal Licensing System that

provides streamlined electronic filing capabilities for most wireless services. Now potential licensees can obtain their applications and a wide range of other forms over

the Internet, and file them back within minutes.

Electronic filing capabilities also are available in the other bureaus as well: Common Carrier, International, and Mass Media. All routine common carrier Local Access Transport Area modifications are now immediately placed on public notice and

are accessible electronically through the Commission’s Digital Index. We also implemented an electronic tariff filing system that permits incumbent ILECs to submit

federal tariffs and associated documents via the Internet.

Meeting Daily Challenges with Innovative Solutions

The need for a fast response to increased use of telecommunications services

means that the FCC must find new and innovative solutions to a broad range of

problems. For instance, just last week, the Commission released new rules to confront the issue of the rapid telephone number consumption by allocating telephone

numbers in a more efficient, predictable and orderly fashion. Competition in telecommunications markets is partially dependent upon fair and impartial access by

all telecommunications carriers to telephone numbers. After careful study, we adopted new policies to reduce the need for new area codes, avoiding the inconvenience,

costs and confusion associated with changes in area codes for consumers and businesses.

While our work during the past year is too voluminous to print here in detail,

I would like to highlight a few special projects. In the past year, the FCC has:

—Technology Advisory Council.—Established as a means by which a diverse array

of recognized technical experts selected from a variety of interests such as industry, academia, government, citizens groups, etc. can provide advice to the

FCC on innovation in the communications industry.

—Public Safety.—National Coordinating Committee, CALEA, and E911: ensured

that our public safety and law enforcement bodies had the tools necessary to

ensure our safety throughout the country.

—Assistance to other Nations.—Set out in great detail the way our country’s telecommunications system is regulated and made this available to other countries

that are in the process of establishing independent telecommunications systems.
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—Helped Disabled Americans.—Adopted rules to ensure access for persons with

disabilities under Section 255, and increased access to the communications network by the 54 million Americans with disabilities.

—Restructuring of FCC.—Redesigned the Commission to establish two new ‘‘onestop-shopping’’ bureaus—Enforcement and Consumer Information Bureaus—

rather than having their responsibilities spread throughout the Commission.

—Y2K.—With the determined coordination of Commissioner Michael K. Powell,

the FCC assisted the rest of the country in ringing in the new millennium free

of computer glitches and ready to correct any that did occur.

BACK TO THE FUTURE

We have worked hard in the past year to bring the Commission into the present,

and our pace will not slacken during the current year. I am releasing today a Report

on the Implementation of the Draft Strategic Plan that we submitted to Congress

in August 1999. My goals were to create a model agency for the digital age, promote

competition in all communications markets, promote opportunities for all Americans

to benefit from the communications revolution, and manage the electromagnetic

spectrum in the public interest. Since introducing the plan, we have met with a

wide range of interested parties to effectively gauge the response to our goals. We

spoke with experts from academia, consumers, industry representatives, state and

local government representatives and many of your staffs to discuss the future and

our mutual goals. My first priority in the coming year is to continue keeping the

promises outlined in the Strategic Plan.

Be assured that we will continue to move toward a digital agency—a user-friendly

and electronic environment where consumers and licensees alike feel comfortable

communicating directly with the agency via online services or old-fashioned phone

calls. This goal is our first one in our Implementation Report Card, and I know that

success in this area is a certain sign that we are using our funding wisely and appropriately.

Our aspirations for the future do not end there, because we are, after all, an agency dedicated to serving the public in a variety of ways. We have a wide range of

futuristic goals in our Report Card, and I intend to work hard to follow through on

the report’s promises. Let me plot out what I call the ABC’s of our current goals

for the year.

First, ‘‘access.’’ The E-Rate program is bringing its second successful year to a

close, and now provides connectivity for one million public school classrooms. This

program is a down payment on our children’s futures, and on the skills needed to

keep our high-tech economy going. One of my highest priorities is to funding E-rate

program to wire the nation’s rural and urban schools and libraries to the Internet.

I want to continue promoting access to the digital tools and services for the 54 million Americans with disabilities [video description, TTY Access, TRS]. This year, the

Commission adopted EO rules to help shatter glass ceilings and pave the way for

the employment of more women and minorities at radio and television stations. The

Commission also has issued a Notice of Inquiry on the public interest obligations

of digital television licensees. We hope that this Notice will initiate a national dialogue on how America’s broadcasters can best serve the public in the transition to

digital television.

Second, ‘‘broadband rollout.’’ The Commission will continue its active role in

speeding the delivery of high-speed Internet access to every business and home in

America. We will take all necessary steps to keep the nation’s broadband infrastructure open to competition. We will track the deployment of broadband in the marketplace to maximize the use of this new technology. We will auction new spectrum

to bring innovative services to the marketplace and the wireless web to consumers.

As part of the broadband rollout, The 706 Joint Conference is holding six field

hearings in coming months to gather information on the status of deployment of advanced telecommunications capability to all Americans. These field hearings will

focus on two goals in particular. First, the Joint Conference will seek information

on to what extent data is available at the state level on the status of deployment

of advanced services. Second, the Joint Conference will seek examples of ‘‘best practices’’ of successful deployment in communities. Some communities have found creative ways to bring high speed Internet access to areas that were previously underserved. For example, a community may speed deployment by bringing many potential users of advanced services together, thereby aggregating demand to increase

their buying power. A compilation of creative efforts, or best practices, will provide

guidance to communities in other states to speed deployment of advanced services.

We have set up Federal-State Joint Conference field hearings in a variety of locations: Anchorage Alaska on April 12, 2000; South Sioux City, Nebraska on April 19,
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2000; Lowell, Massachusetts on May 22, 2000; Miami, Florida on June 9, 2000; and

Cheyenne, Wyoming on June 23, 2000. When I think about these locations, I cannot

somehow think about the convergence of the past, present and future of our country.

It is somehow fitting that Lowell, Massachusetts, which saw the advent of the industrial revolution, will host a field hearing to discuss the future of telecommunications technology.

Finally, let me address the ‘‘C’’ in my ABC’s, ‘‘competition.’’ This Subcommittee

has my commitment to continue working toward full and open competition. I will

encourage the protection of consumers by giving them the information they need to

navigate an increasingly complex telecommunications marketplace. I personally will

review the findings of the Transaction Team to ensure that all mergers now pending

and filed in the future will receive fast, efficient and flexible handling. We will make

DTV compatible with the nation’s cable networks. We will reform access charges to

make more equitable phone billing and pricing practices. We will promote competition in local and long-distance markets that will give consumers lower rates, better

services, and more choices.

CONCLUSION

Together, and with full funding of our request, we will work toward implementing

the Strategic Plan—‘‘A New FCC for the 21st Century’’ to create a faster, flatter,

more functional agency in an era of convergence. I appreciate your support for making this plan a reality, and also for supporting our request to use excess regulatory

fees from past years to meet this year’s IT needs. It is time to transform the FCC

into a paperless, electronic agency. More importantly, it is time to ensure that the

future includes providing access to communications services to all Americans. I believe that we share the same concerns and goals about the future. Together, we can

ensure that our third millennium telecommunications infrastructure is a proud legacy.
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Senator GREGG. Thank you, Mr. Chairman. I appreciate your testimony and appreciate the work you have been doing and your

Commission has been doing in this really incredibly important area

for America’s future. You represent the cutting edge of the prosperity of our Nation, obviously, and our capacity to be successful

as a Nation is in large part going to be defined by our success in

technologies which you oversee. I strongly support your efforts to

minimize regulation of the Internet. I think that has been a very

appropriate approach.

There are, however, some issues that I just want to take up with

you. First is your resource situation. Do you have enough resources

to do the job at the FCC? Is your budget request that you sent to
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us adequate? Did OMB [Office of Management and Budget] reduce

it in any way that you felt was inappropriate? And if so, tell us.

EXCESS REGULATORY FEES

Mr. KENNARD. Well, from where I sit, we can always use more

resources. Our major challenge right now—and this is something

that you have been quite supportive of—is our efforts to get funds

released from excess regulatory fees that we have collected. As you

are probably aware, in prior years we collected about $5.8 million

in excess regulatory fees, which we were anticipating being able to

use for this fiscal year. And, of course, you were very supportive

in allowing us to reprogram those fees, but we have some discussions ongoing with the House to see if we can get those funds released.

Looking forward to 2001, we believe that the amount of money

that we are requesting will be appropriate. It will be a stretch, particularly given the anticipated filing of a number of applications by

the Bell companies to get into long distance this coming year, and

also with increased numbers of merger applications. But I believe

we can make do.

TECHNICAL STAFFING LEVELS

Senator GREGG. How about staffing? Are you finding it difficult

to maintain technical staff, as some of our other agencies are? Or

are you not finding that to be a problem as a result of the pay levels?

Mr. KENNARD. It is very difficult. It is particularly difficult for

the FCC because some years ago we were able to attract lawyers

and economists and engineers who could easily double or triple

their salaries by going into the private sector. Now they are getting

offers to go into the private sector and not just double or triple

their salaries. They are being offered stock options to make them

multimillionaires. And it is very difficult to compete in that economy.

Senator GREGG. Is there anything this committee can do to assist

you in that area?

Mr. KENNARD. Well, we have certainly watched with great interest the efforts of Chairman Levitt of the SEC to try to address this

problem, and I would be very pleased to have a discussion with you

about how we might stem the outflow of staff into the private sector by being able to pay them more.

Senator GREGG. Well, we are interested in pursuing those avenues. I feel strongly that our Federal regulatory agencies, which

are technically oriented such as yours, need to have staff that are

technically capable. If you have staff that don’t understand the

technologies that they are supposed to regulate, you end up with

a problem.

Mr. KENNARD. We would be delighted to have some further discussions with you on that.

Senator GREGG. We sure would be open to that.
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C-BLOCK LICENSES

There are a number of issues which this committee has paid

some attention to, one of which is the spectrum auction issue and

the C-block specifically. Can you give us a brief summary of where

that stands?

Mr. KENNARD. Certainly. We are still involved in attempting to

allow the FCC to re-auction the C-block licenses that are currently

in the bankruptcy court. We are awaiting a decision by the Second

Circuit Court of Appeals which hopefully will allow us to proceed

with a re-auction of the C-block licenses in the summer.

Again, I want to tell you how much we appreciate the support

that you have given us in this effort, the opportunity to appear before you in the Senate Finance Committee a few months ago, and

also the work of your staff in supporting our efforts to be able to

reclaim these licenses that rightfully belong to the American public

and have them re-auctioned. It is very, very important.

Senator GREGG. Just to put this in perspective, the company that

originally won this bid agreed to pay $4.3 billion. Is that correct?

Mr. KENNARD. Yes.

Senator GREGG. And that company then paid approximately $500

million as a down payment?

Mr. KENNARD. That is correct.

Senator GREGG. And then it filed bankruptcy.

Mr. KENNARD. Yes.

Senator GREGG. And in the bankruptcy, its creditors and as part

of its reorganization plan, it alleged it should own the spectrum

which it had won with the bid without further funds being paid.

Mr. KENNARD. That is correct.

Senator GREGG. So instead of $4.3 billion, the attempt was to

buy the spectrum for $500 million.

Mr. KENNARD. An additional $500 million, right. They were seeking to have the bankruptcy court write down—in effect, write down

their debt to a total of about $1 billion.

Senator GREGG. Then the bankruptcy court, on appeal, it was determined that the FCC and the American taxpayer owned the spectrum, and that it was not an asset of the bankruptcy court or of

the bankruptcy estate, correct?

Mr. KENNARD. That is right.

Senator GREGG. So now it is back in your hands under the decision of—was it the Second Circuit?

Mr. KENNARD. Yes. Actually, the bankruptcy court. The determination of the bankruptcy court was appealed to the Second Circuit, and the Second Circuit affirmed the FCC’s regulatory authority to reclaim the licenses after the default.

Senator GREGG. Which is reasonably logical since it is the taxpayers’ asset, and I don’t believe any private citizen has the right

to take the assets of the Government.

Mr. KENNARD. Exactly right.

Senator GREGG. I mean, that is almost black letter law, as I recall. You can’t have adverse possession against the Government or

bankruptcy possession against the Government.
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So presently the taxpayers own it, and as I understand it, there

has been a request to stay the auction again by the original bankrupt estate, correct?

Mr. KENNARD. Yes, that is right. The company called NextWave,

which is what I call the bankrupt licensee, is still fighting our efforts to reclaim the licenses in the Second Circuit. They have gone

back to the bankruptcy court where they have been able to get favorable rulings, and the bankruptcy judge stayed our July auction.

We went to the Second Circuit. The Second Circuit allowed us to

go forward and prepare for the July auction pending the outcome

of a Writ of Mandamus, which is still pending before the Second

Circuit. We hope to get a ruling soon.

But it is really important that we go ahead with this July auction, not just because of what is happening just in the C-block and

the ability to reclaim for the American taxpayer the value of those

licenses but, more importantly, for the auction process. It is very

important that when people come before the FCC and promise to

pay for a license that belongs to the Federal Government that they

pay. Otherwise, that license should be reclaimed. It belongs to the

American public.

Senator GREGG. Now, I understand that the bankrupt estate,

NextWave, has offered, at least publicly through advertising, to pay

the full $4.3 billion now. However, if it goes back to auction, would

you presume that $4.3 billion would be the price that the American

taxpayers would get for this?

Mr. KENNARD. I expect that the American taxpayers would get

significantly more than that in a re-auction, and I base that on a

couple of things.

One, over the pending months of this bankruptcy proceeding, another company known as NexTel, not to be confused with

NextWave, was prepared to make a hostile tender offer for

NextWave, to buy its principal asset, which is the licenses, and was

prepared to pay $8 billion for those licenses.

We have also seen some reports out of Wall Street from analysts

who follow the wireless industry that have estimated that in a reauction these licenses would be sold for anywhere from $6 to $10

billion. So we think that the money, which would be a windfall to

NextWave if they were able to retain these licenses, rightfully belongs to the American public.

Senator GREGG. So we are talking here about somewhere between $2 and $5 billion that the taxpayer would lose if NextWave

was allowed to come in and pay its original price, which it was unwilling to pay to begin with and went into bankruptcy court to try

to reduce to $1 billion.

Mr. KENNARD. That is correct.

Senator GREGG. So we are not talking small change.

Mr. KENNARD. No. This is real money.

Senator GREGG. This is real money and significant amounts of

dollars, obviously. So when we see an ad in the newspaper that

says that they are willing to pay $4.3 billion and that that is great

generosity on their part, what they are really saying is they are

willing to come in and pay $4.3 billion, turn it around and make

maybe a $4 billion profit.

Mr. KENNARD. That is correct.
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Senator GREGG. All at the expense of the taxpayer.

Mr. KENNARD. Correct.

SPECTRUM CAP

Senator GREGG. Now, in the auctioning of spectrum, there is this

issue of designated entities and the spectrum cap. Do you anticipate that the FCC will take any action to grant waivers in the area

of the cap or spectrum capacity?

Mr. KENNARD. It is hard for me to say at this point. We have a

number of petitions before us seeking waivers of the spectrum cap

and also waiver of the designated entity rule, and I really haven’t

decided yet. I want to study the record and talk to a number of people both inside and outside the agency before I make a determination.

Senator GREGG. Wouldn’t it increase considerably the number of

bidders participating if neither of those limitations were in place?

Mr. KENNARD. That is probably true, but we would have to balance that against the statutory mandate in Section 309(j) of the Act

which gives us auction authority to ensure that there are opportunities for participation by small businesses. So it is going to be a

balancing act that we are going to have to look at.

Senator GREGG. When we are talking these dollars, we are really

not talking small business, are we?

Mr. KENNARD. No, and that is going to be one of the considerations, clearly.

Senator GREGG. You were talking about—— Mr. KENNARD. I think we are talking smaller versus larger. I

think that is where it breaks out.

Senator GREGG. You know, when you get over $1 billion, I am

not sure—small business is something in New Hampshire. When you are over $1 billion, you are not dealing with many companies

in New Hampshire.

Mr. KENNARD. Well, we hope to have some bidders from New

Hampshire as well, Mr. Chairman.

LOW-POWER FM RADIO SERVICE

Senator GREGG. If you do, it will be interesting.

The low-power license issue—National Public Radio, I see, has

put in a complaint about this question, which is interesting. As you

know, I personally have some concerns about this. Maybe you could

tell us your thoughts on this.

Mr. KENNARD. Certainly. Well, Senator, first of all, the goal of

having a low-power FM radio service is to meet the tremendous demand by nonprofit organizations to access the airwaves and speak

to their communities, and there has been a huge outpouring of interest in this rulemaking from churches, from schools, from universities, from governments.

We believe that a low-power FM radio service can be accommodated without causing harmful interference, and we have watched

the debate closely here in the Congress and, of course, before the

FCC, and, frankly, there has been a lot of misinformation that is

swirling around this issue—misinformation by incumbent broadcasters who are creating all sorts of horror stories that low-power

FM is going to create lots of destructive interference.
303

We at the FCC are charged by you with policing the airwaves

against interference, and during my tenure as Chairman, I have

shut down more pirate radio stations operating illegally than any

Chairman in history. So I have a record of and a commitment to

making sure that there is not harmful interference on the airwaves. We have an expert engineering staff. We have done the

studies. We have determined that we can have a low-power FM

service without causing destructive interference.

Now, it may cost some additional competition to incumbents, but

based on the Telecom Act, competition is a good thing. We ought

to have more voices over the airwaves. So I would invite the opportunity to meet with you and your staff and present to you our technical studies so that we can demonstrate that low-power FM is not

going to create the sort of interference nightmare that some of the

incumbents have been saying.

And having practiced before the FCC 12 years before I came to

the FCC almost 7 years ago, I have seen a history of incumbents

trying to frustrate the introduction of new voices and new technologies. And if we buy into these arguments that we should never

have more voices on the airwaves, we will be playing into the same

scare tactics, the same fears that were brought to the FCC to try

to stop cable television in the 1970s and even to stop the direct

broadcast satellite industry in the 1980s and 1990s.

Nobody wants competition in their backyard, but these are small,

nonprofit groups. They are not even going to be competing for advertising revenues. So this should not be seen as a threat to the

incumbent commercial broadcast industry. This should be seen as

a complement.

And I am aware of the concerns of National Public Radio. I have

met with their president, and NPR, of all organizations, they understand the need for more nonprofit voices on the airwaves. And

we will try to assure them that this service is not going to create

destructive interference to their members. And I am confident that

we can do that, and I would like the opportunity to try to convince

you as well.

Senator GREGG. We are joined by the chairman of the committee.

Senator STEVENS. Good morning.

Mr. KENNARD. Good morning, Mr. Chairman.

Senator GREGG. Does the chairman want to ask some questions?

Senator STEVENS. Go right ahead.

MERGERS

Senator GREGG. What is the status of monitoring mergers that

might affect the Internet? Are you doing anything in that area such

as MCI, Sprint?

Mr. KENNARD. Yes, that particular merger is still pending before

us. That is not a merger per se that I would say affects the Internet. It really has to do with the merger of two long-distance companies and whether that merger is in the public interest. And we are

in the midst of developing a record on that and will probably be

deciding soon.

Senator GREGG. Mr. Chairman?

Senator STEVENS. Thank you. I am sorry to be a little late and

to have missed your statement, Mr. Chairman.
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Senator GREGG. That is quite all right.

Senator STEVENS. I had to attend a little convention that is meeting here.

UNIVERSAL SERVICE

You and I have had talks about universal service.

Senator GREGG. Yes.

Senator STEVENS. And you know how I feel about those funds,

that they are ratepayer funds. That concept really was developed

following an initiative of Senator Inouye and myself when we tried

to find some way to average the costs of telephone service to Alaska and Hawaii. But the interstate rate pool came out, and it really

was a system that was developed by the carriers to provide ubiquitous service, and it worked.

I was surprised to find that there is a growing feeling that these

funds should be deposited in the Treasury. That would be the same

as calling them a tax. They have not been a tax, and I think we

have all opposed such a tax. As a matter of fact, if that happens,

we set such a precedent that we are liable to have to start taxing

the Internet and a lot of other things and none of us wants that.

I think we want to find some way to work out an arrangement so

that we can have support from whoever provides telephony for the

service to those areas which cannot really afford it. I have talked

to Steve Case [chairman of AOL] and Mr. Levin [chairman of Time

Warner] had a meeting at the Commerce Committee. They agreed,

and they are willing to work on such a concept for all developing

communications.

But what do you believe? Do you believe these should go in the

Treasury? Do you think they were tax monies?

Mr. KENNARD. No, I don’t. As you point out, universal service has

been very successful for our country, vital to our telephone networks, and for decades it has been administered by a non-Federal

entity, the National Exchange Carriers Association, through a system of inter-carrier transfers with the funds being held outside the

Treasury. And that system has worked very well for our country

for decades.

I think the confusion arose after the enactment of the 1996 Act

when the Office of Management and Budget included the universal

service fund as part of the United States budget as Federal funds.

We are working closely with the Congressional Budget Office and

OMB and Treasury to try to get a clarification on this because we

feel that the system has worked well for decades as classifying

these as non-Federal funds. We hope that Treasury and OMB will

confirm to us, notwithstanding this confusion in the 1996 Act, that

the fund can continue to be administered in the present manner as

non-Federal funds outside of the Treasury.

Senator STEVENS. Well, I think all of us from rural areas would

applaud you on that stand. I hope that we get a decision from them

that makes sense. I want you to know I stand ready to take whatever action is necessary to preserve the independence of that fund

because I think that is the only way it can work. It is a business

judgment of what is needed and not a tax that could ever be increased and diverted off into other areas.
305

Now, we had some disagreement about what happened in terms

of the schools and libraries, but that has worked, and it really

hasn’t expanded the demand. I think we have sort of buried our

hatchet on that one. We believe it was necessary, and it is now

something totally ingrained in the system. But to have it become

a tax and be treated as a tax, it will affect the conduct of this committee in many ways if it continues.

Mr. KENNARD. Well, you would be a very powerful ally in this effort, Mr. Chairman, and I would appreciate your help on this.

Senator STEVENS. I would be pleased to help in any way that you

think we can help, and I know I speak for Senator Inouye, too. Our

States have benefited from this concept, and we are now in the

21st century with everyone else. We want to go ahead with everybody else. And I was really pleased to have the commitment of

AOL/Time Warner that they would work with us and make certain

that this concept would not be lost with whatever develops in the

future.

SECTION 271 PETITION

This is not really my bailiwick, necessarily, but you have put

fines now on Bell Atlantic for the failure to comply with your decision regarding their 271 petition, as I understand it. This was for

failing to switch local customers to their competitors in New York,

as I understand it.

Mr. KENNARD. Yes, sir.

Senator STEVENS. Were those actions that led to the fines pending before the 271 petition was approved?

Mr. KENNARD. No. This was an issue that arose shortly after the

filing—the grant of the 271 application. We had been monitoring

throughout the pendency of the application the way that Bell Atlantic had established a system to cut over lines and to provide

lines for DSL. And the action that we took recently was a recognition that the platform for provisioning these lines to competitors

was not as stable as we would like. And so we imposed some fines

for the inability of Bell Atlantic to get into compliance on time, and

we are monitoring them closely to make sure that this platform

stabilizes. If it doesn’t stabilize, then more action may be warranted.

Senator STEVENS. Well, I understand the Department of Justice

has raised concerns about SBC in the Texas region, and they have,

I believe, an application pending. Don’t you think that should be

a condition of the granting of the 271 petition to comply with the

1996 Act before they get the 271 approved?

Mr. KENNARD. Well, I assure you, Mr. Chairman, that the FCC

is not going to grant a 271 application unless we can be assured

that the market is open and competitors have meaningful access to

compete. And, of course, that is what we are grappling with right

now with the SBC application to determine whether that record

demonstrates that SBC has sufficiently opened its market to competitors. We haven’t made a decision yet.

Senator STEVENS. I am pleased to hear you say that. I hear people criticizing the 1996 Act all the time, but I think it is working.

Mr. KENNARD. So do I.
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Senator STEVENS. And I think that the way it works is through

effective enforcement, and so I congratulate you.

LOW-POWER READING SERVICES

I was visited the other day by members of the blind community

from my State, and they had some questions about the low-power

FM issue. Are you conducting tests to see that the low-power reading services that are made available to the blind and visually impaired are not interfered with by local signals?

Mr. KENNARD. Well, before authorizing the low-power FM service, our engineers conducted tests. There were also tests submitted

in the record, and the FCC was able to determine, before voting on

that new service, that it would not cause harmful interference to

any incumbent service, including the radio reading service.

Senator STEVENS. Well, it is my understanding they are going to

use low-power for their reading services and that they feel that

they are being interfered. But, in any event, I hope that you are

looking into that. I am hearing from public radio they don’t really

like the low power. Is there a conflict coming there that we don’t

understand?

Mr. KENNARD. I believe that there is a lot of fear because this

is a new service, and I am confident, though, that once these stations are licensed and people actually begin living with them in

their communities, a lot of this fear will dissipate.

We have had low-power stations in this country in the past, and

we know that they can co-exist with full-power stations. This is not

a new experimental technology. We have been living with the FM

band for many, many years in this country. Now, we know how

those signals propagate. We know how low-power stations operate.

And I am confident that once these stations get licensed and people

start to listen to them and enjoy them, they will realize that they

can co-exist in harmony with other stations.

Senator STEVENS. How are they themselves going to be monitored so that they don’t interfere with existing signals?

Mr. KENNARD. They will be monitored like any other broadcaster.

They will have a license, and they will have to operate consistent

with the parameters of their license; and if they don’t, they will

have to——

Senator STEVENS. But you have to have a listening post within

the parameter of their low power, and I understand that is not

going to be possible.

Mr. KENNARD. To have—I am sorry, sir.

Senator STEVENS. You have to have a listening post within the

parameters of the low power to know whether they are interfering,

don’t you?

Mr. KENNARD. No, they will be operated just like the full-power

FM stations. They will have a license. They will have to operate

within their licensed parameters, and if they don’t, then it is an enforcement issue. And the FCC has field offices that periodically

monitor different radio markets to make sure that everyone is abiding by the rules, and they will be treated just the same as fullpower stations.

Senator STEVENS. My last question. I know that Senator Gregg

has got a bill on that, as a matter of fact, dealing with low power.
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Senator GREGG. Yes. We have discussed it.

Senator STEVENS. You have already. Sorry for coming in late.

Senator GREGG. No. It is good to go over it again.

CROSS-OWNERSHIP RULES

Senator STEVENS. This last one is sort of a strange one to bring

up with you in some ways, but I come from a State that almost all

of its local newspapers have now been acquired by people who live

outside of our State, and much of the over-the-air media, cable

media, is still owned by local people.

As the newspapers started to fail, I believe that the cross-ownership ban led to their demise as a local influence because they were

sold off. I don’t know if you saw this enormous article in the Wall

Street Journal about the cross-ownership ban.

Mr. KENNARD. Yes, I did see that.

Senator STEVENS. I understand that you are proceeding with

rulemaking on this. Is that correct?

Mr. KENNARD. Well, we have—— Senator STEVENS. Cross-ownership.

Mr. KENNARD. We have existing cross-ownership rules, and

under the Telecom Act, we are required to review those rules every

2 years, and we are in the process now of reviewing all of our ownership rules in that context.

Senator STEVENS. Well, I urge you to go to rural America and review it. I think it has always been reviewed in the megapolis areas

where there are enormous newspapers and enormous chains. It is

my feeling that local newspapers have gone practically underground because they did not have the ability to move out and have

cross-ownership in their area. There is still a deep feeling, as the

article points out, by some Members of Congress against it. But as

we see what has developed as we get into more and more competition within the media, no one could have dreamed of what we have

got now. The people who have the local cable television or radio

stations have a great interest in having another outlet for their capabilities, and there is a savings to be had in merging the newsrooms of local TV and the local newspaper. I think this cross-ownership ban has hurt rural America. I would urge you to really get

some people to study that so that we can see if you can’t modify

it in the megapolis areas, or at least give some leeway in rural

America so that we can have the continued local ownership of these

things. You know, it is a strange thing when you start losing the

page in the papers that covers Boy Scouts and Girl Scouts and

other things. All everybody ever reads is the bad news from the

rest of the world instead of the good news from home. We would

very much like to see some leeway or local ownership in rural

America if it cannot be modified as a whole.

Mr. KENNARD. We will certainly look at that, Senator.

Senator STEVENS. It is nice to see you, and I want to extend to

you and the chairman of the subcommittee another invitation to

come up and conduct a little marine research this year.

Mr. KENNARD. It would be delightful. Thank you very much.

Senator STEVENS. Thank you very much.

Senator GREGG. Thank you, Mr. Chairman.

Mr. KENNARD. Thank you.
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ADDITIONAL COMMITTEE QUESTIONS

Senator GREGG. Thank you. Get us some ideas, if you have some,

on the staffing.

Mr. KENNARD. We certainly will.

[The following questions were not asked at the hearing, but were

submitted to the Commission for response subsequent to the hearing:]

QUESTION SUBMITTED BY SENATOR TED STEVENS

Question. More and more of my colleagues are talking about your review of mergers or imposing a time limit on your ability to review them. What are you doing

to address these concerns? What pending mergers do you have that have been reviewed for over six months and when can we expect them to be resolved?

Answer. In the years since passage of the 1996 Amendments to the Communications Act, there has been a substantial increase in the number of mergers among

companies holding licenses or authorizations issued by the FCC. The FCC must approve the transfers of these licenses and authorizations under the public interest

standard set forth in the statute. In response to the increased burden of more numerous applications, the importance of the FCC’s review to implementing the purposes of the Communications Act, and concerns expressed by Congress, applicants,

and the public, the FCC has taken several steps to explain and improve its process

for reviewing applications and requests relating to mergers. —At the direction of the Chairman, a Transactions Team has been established

within the Office of General Counsel with the responsibility to ensure that the

agency’s review process relating to proposed mergers is efficient, consistent,

transparent, and predictable. —The Team collected information within the agency, met with members of the

Communications and Antitrust Bar and with representatives of public interest

groups, and held a Public Forum on March 1, 2000, during which it presented

and asked for comment on proposals to make the process more transparent and

speedy while maintaining fairness and ensuring sound results. —Those steps include a proposed timeline for reviewing merger-related applications that identifies the stages and mechanics of the review process and is calculated to complete processing in even the most complex cases within 180 days

of public notice of the application, as long as applicants provide the necessary

information and do not substantially revise the application at a late stage. —The Transaction Team also established a site on the world wide web that contains more detailed information on its purpose, activities, and proposals and

through which the public can obtain specific information on the status and

progress of applications related to specific major mergers. The Transaction

Team site may be reached easily from the FCC home page at http://www.fcc.gov. —Comments on the proposals were due March 28, 2000, and are currently being

reviewed. —Web pages applying the proposed timeline to specific mergers have been established for two major recent proposed mergers—MCIWorldcomm/Sprint and

AOL/TimeWarner as examples and experiments. —The Transactions Team is also taking steps to facilitate coordination among the

various Bureaus at the Commission that have jurisdiction over different types

of licenses and authorities that may be involved in a single transaction, and to

increase coordination and minimize with other governmental agencies (primarily the Department of Justice and the Federal Trade Commission) that have

jurisdiction over the transactions under the antitrust laws.

—As to implementation, many of these steps can be taken without the need for

or delay associated with formal rulemakings, and are being implemented, at

least on an experimental basis, as soon as practical with respect to pending

transactions, to the extent that they appear to provide greater efficiency, transparency, and predictability. The Transaction Team expects to provide constant

information on its progress on its web page, and will periodically provide reports and public notices of significant changes or revisions. After appropriate

experience has been gained, a rulemaking may be considered to implement

changes that have proved valuable and successful.

The mergers with related applications that have currently been pending before

the FCC for more than six months generally involve special circumstances, and the

Commission expects to address them expeditiously. For example, applications related to the proposed merger of Bell Atlantic and GTE, although originally filed in
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1 Application by Bell Atlantic New York for Authorization Under Section 271 of the Communications Act To Provide In-Region, InterLATA Service in the State of New York, CC Docket No.

99–295, Memorandum Opinion and Order, FCC 99–404, (December 22, 1999), at ¶ 446 (Bell Atlantic New York 271 Order), appeal pending sub nom. AT&T Corp. v. FCC (D.C. Cir. filed Dec.

27, 1999) (No. 99–1538). 2 47 U.S.C. § 271(d)(6)(A). 3 Bell Atlantic New York 271 Order at ¶ 450.

late 1998, were put on hold at the request of the applicants until the end of January, 2000, so that the applicants could develop a proposal to bring the transaction

into compliance with Section 271 of the Communications Act. The January proposal

has since itself been revised and is currently being discussed by the applicants, the

Commission, and other parties in an effort to resolve these issues. Applications relating to the proposed merger of AT&T and Media One, which were originally filed

in July of 1999, were substantially revised in late November, 1999. Applications relating to the proposed Sullivan Broadcasting Co. Inc./Sinclair Broadcasting Group,

Inc. merger pending before the Video Services Division of the Mass Media Bureau

were substantially modified in November, 1999, upon the effective date of new agency rules, and are heavily contested.

Applications relating to a significant number of proposed transactions (approximately 25) involving holders of radio station licenses have been pending for over six

months. The proposed mergers to which these applications relate generally would

significantly increase concentration in local radio markets and present special problems arising from a combination of the relaxation of absolute numerical limits on

ownership in the 1996 Act and the Commission’s definition of the ‘‘market’’ in these

situations. These levels of concentration raise concern about competition and diversity, and several of these transactions are under investigation by the Department

of Justice. The FCC has devoted substantial time to address the underlying issues

and anticipates taking action to address these issues within the next two months.

In the meantime, the Commission is undertaking to address and resolve, to the extent it can, the circumstances of particular cases that have been pending for an extended time.

QUESTIONS SUBMITTED BY SENATOR ERNEST F. HOLLINGS

Question. The FCC recently determined that the local phone market in New York

is open to competition and granted Bell Atlantic authority to enter the long distance

market in New York. Since that time, Bell Atlantic has entered a consent decree

with the FCC agreeing to pay fines because it has not been able to provide service

to its competitors as required under section 271. What actions can the FCC take

to ensure that Bell Companies do not provide substandard service after obtaining

section 271 authority? What processes does the FCC have in place that will allow

it to effectively enforce its section 271 orders? While the FCC has used fines as an

enforcement tool, what other enforcement tools are at the FCC’s disposal to ensure

quick compliance with section 271?

Answer. The Commission has various options available to it to ensure that Bell

Operating Companies (‘‘BOC’’ or ‘‘BOCs’’) maintain the openness of their local markets to competition following the Commission’s grant of authority to provide in-region interLATA service under section 271 of the Communications Act of 1934, as

amended. The Commission is committed to aggressive, fair and rapid enforcement

of the post-entry requirements using all means at its disposal. As the Commission

previously stated in authorizing Bell Atlantic’s section 271 application, ‘‘[s]wift and

effective post-approval enforcement of section 271’s requirements . . . is essential

to achieve Congress’s goal of maintaining conditions conducive to achieving durable

competition in local markets.’’ 1

Section 271 includes specific language allowing the Commission to take enforcement action to ensure that a BOC continues to comply with the requirements of section 271 following Commission approval. The Commission is authorized to take such

action if, at any time after approval of the application, the Commission determines

that a BOC ‘‘has ceased to meet any of the conditions required for such approval.’’ 2

After ‘‘notice and an opportunity for hearing,’’ the Commission may: (i) issue an

order to such company to correct the deficiency; (ii) impose a penalty on such company pursuant to title V; or (iii) suspend or revoke such approval. The Commission

has determined that section 271’s hearing requirement does not require formal,

trial-type evidentiary proceedings before an administrative law judge.3 Rather, the

Commission has stated that a paper proceeding is sufficient to satisfy this requirement.
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4Due to inflation adjustments, the maximum for each violation or each day for a continuing

violation is now $110,000 and the maximum total forfeiture amount for a continuing violation

shall not exceed $1.1 million.

The strongest enforcement mechanism available to the Commission is found in

section 271(d)(6)(A)(iii), which authorizes the Commission to suspend or revoke section 271 approval. If the Commission determines that a BOC has ceased to meet

any of the market opening conditions specified in section 271, the Commission could

elect to issue a ‘‘stand-still’’ order prohibiting the BOC from enrolling additional

subscribers for its interLATA service and from all marketing and promotion of

interLATA service. Such a stand-still order would effectively freeze the BOC’s interLATA subscriber base as of the date of the order and could remain in effect

until such time as the record is sufficiently clear that the BOC has fully corrected

the problem. In extreme cases, it also could revoke the BOC’s authority to provide

interLATA service altogether.

Additionally, the Commission may assess forfeitures against non-compliant BOCs

in accordance with section 271(d)(6)(A)(ii). Such a penalty would be assessed by the

Commission pursuant to Title V of the Communications Act. Section 503(b)(1)(B) allows the Commission to assess a forfeiture penalty against any person who has willfully or repeatedly failed to comply with any of the provisions of the Communications Act or any rule, regulation or order issued by the Commission. The Commission, upon determining that this type of enforcement action is warranted, could elect

to issue a notice of apparent liability to the allegedly non-compliant BOC and allow

the BOC to respond in writing, in accordance with section 503(b)(4), or conduct a

formal forfeiture hearing before an administrative law judge in accordance with section 503(b)(3). The amount of any such forfeiture penalty is limited by section

503(b)(2)(B) which provides that a common carrier may be liable for a forfeiture penalty not to exceed $100,000 for each violation or each day for a continuing violation,

except that the total forfeiture amount for a continuing violation shall not exceed

$1,000,000.4

A third section 271 enforcement avenue available to the Commission allows the

Commission to issue an order requiring a non-compliant BOC to correct any deficiencies pursuant to section 271(d)(6)(A)(i).

In addition to its section 271(d)(6) enforcement powers, the Commission continues

to have its pre-existing enforcement powers, including its authority under sections

206–209 of the Communications Act. For example, the Commission maintains the

ability to resolve formal complaints filed by competitors affected by the allegedly

non-compliant BOC’s actions and, among other things, to award damages if warranted. Pursuant to section 271(d)(6)(B), the Commission is required to review formal complaints properly alleging section 271 violations within 90 days.

In order to evaluate the post-grant performance of BOCs that have received section 271 authorization, as well as to initiate or recommend enforcement action

where appropriate, the Commission’s Enforcement Bureau has established a section

271 enforcement team. The primary functions of the team are: (1) to review complaints and other information from interested persons regarding post-grant ‘‘backsliding’’ by BOCs whose applications are approved; (2) to undertake or recommend

swift and effective enforcement action where appropriate; and (3) to act as the point

of contact within the Commission for persons wishing to provide information regarding possible ‘‘backsliding’’ by BOCs. The team is headed by the Deputy Chief of the

Enforcement Bureau and includes senior attorneys and auditors from the Enforcement Bureau as well as the Common Carrier Bureau.

One of the core objectives of section 271 as well as the entirety of the Telecommunications Act of 1996 is to increase significantly the competition in the local

telephone markets. The Commission has various mechanisms available to it to ensure that the BOCs, after gaining section 271 approval, maintain the openness of

their local service markets. The Commission is committed to the vigorous and efficient enforcement of the conditions of the BOC entry into the interLATA market

and will not hesitate to utilize the tools at its disposal to accomplish this objective.

Question. In Congress, we have heard from a number of licensees who are frustrated by the amount of time it takes the FCC to conclude its review of mergers.

What is the FCC doing to ensure greater transparency and efficiency in its merger

review process? When will the FCC implement its proposed merger review guidelines? What if any mergers have been pending before the FCC for more than 6

months?

Answer. In the years since passage of the 1996 Amendments to the Communications Act, there has been a substantial increase in the number of mergers among

companies holding licenses or authorizations issued by the FCC. The FCC must approve the transfers of these licenses and authorizations under the public interest
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standard set forth in the statute. In response to the increased burden of more numerous applications, the importance of the FCC’s review to implementing the purposes of the Communications Act, and concerns expressed by Congress, applicants,

and the public, the FCC has taken several steps to explain and improve its process

for reviewing applications and requests relating to mergers. —At the direction of the Chairman, a Transactions Team has been established

within the Office of General Counsel with the responsibility to ensure that the

agency’s review process relating to proposed mergers is efficient, consistent,

transparent, and predictable. —The Team collected information within the agency, met with members of the

Communications and Antitrust Bar and with representatives of public interest

groups, and held a Public Forum on March 1, 2000, during which it presented

and asked for comment on proposals to make the process more transparent and

speedy while maintaining fairness and ensuring sound results. —Those steps include a proposed timeline for reviewing merger-related applications that identifies the stages and mechanics of the review process and is calculated to complete processing in even the most complex cases within 180 days

of public notice of the application, as long as applicants provide the necessary

information and do not substantially revise the application at a late stage. —The Transaction Team also established a site on the world wide web that contains more detailed information on its purpose, activities, and proposals and

through which the public can obtain specific information on the status and

progress of applications related to specific major mergers. The Transaction

Team site may be reached easily from the FCC home page at http://www.fcc.gov. —Comments on the proposals were due March 28, 2000, and are currently being

reviewed. —Web pages applying the proposed timeline to specific mergers have been established for two major recent proposed mergers—MCIWorldcomm/Sprint and

AOL/TimeWarner as examples and experiments. —The Transactions Team is also taking steps to facilitate coordination among the

various Bureaus at the Commission that have jurisdiction over different types

of licenses and authorities that may be involved in a single transaction, and to

increase coordination and minimize with other governmental agencies (primarily the Department of Justice and the Federal Trade Commission) that have

jurisdiction over the transactions under the antitrust laws. —As to implementation, many of these steps can be taken without the need for

or delay associated with formal rulemakings, and are being implemented, at

least on an experimental basis, as soon as practical with respect to pending

transactions, to the extent that they appear to provide greater efficiency, transparency, and predictability. The Transaction Team expects to provide constant

information on its progress on its web page, and will periodically provide reports and public notices of significant changes or revisions. After appropriate

experience has been gained, a rulemaking may be considered to implement

changes that have proved valuable and successful.

The mergers with related applications that have currently been pending before

the FCC for more than six months generally involve special circumstances, and the

Commission expects to address them expeditiously. For example, applications related to the proposed merger of Bell Atlantic and GTE, although originally filed in

late 1998, were put on hold at the request of the applicants until the end of January, 2000, so that the applicants could develop a proposal to bring the transaction

into compliance with Section 271 of the Communications Act. The January proposal

has since itself been revised and is currently being discussed by the applicants, the

Commission, and other parties in an effort to resolve these issues. Applications relating to the proposed merger of AT&T and Media One, which were originally filed

in July of 1999, were substantially revised in late November, 1999. Applications relating to the proposed Sullivan Broadcasting Co. Inc./Sinclair Broadcasting Group,

Inc. merger pending before the Video Services Division of the Mass Media Bureau

were substantially modified in November, 1999, upon the effective date of new agency rules, and are heavily contested.

Applications relating to a significant number of proposed transactions (approximately 25) involving holders of radio station licenses have been pending for over six

months. The proposed mergers to which these applications relate generally would

significantly increase concentration in local radio markets and present special problems arising from a combination of the relaxation of absolute numerical limits on

ownership in the 1996 Act and the Commission’s definition of the ‘‘market’’ in these

situations. These levels of concentration raise concern about competition and diversity, and several of these transactions are under investigation by the Department

of Justice. The FCC has devoted substantial time to address the underlying issues
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and anticipates taking action to address these issues within the next two months.

In the meantime, the Commission is undertaking to address and resolve, to the extent it can, the circumstances of particular cases that have been pending for an extended time.

Question. In the merger review context, there have been legislative proposals to

curtail the FCC’s public interest review authority. I am a strong supporter of the

FCC’s public interest authority. In your opinion, why is it important that the FCC

maintain its public interest authority?

Answer. The FCC’s authority and responsibility to review applications related to

proposed mergers under the public interest standard is particularly important in the

context of today’s communications industry. Since the 1996 Act, the industries licensed by the FCC have experienced a wave of consolidation that is unprecedented,

at least since AT&T constructed its monopoly position in the early development of

telephone service that led to decades of regulation. The FCC provides the only forum

in which applications related to these mergers (which have generated a substantial

amount of interest and comment from the public) can be reviewed in the context

of a public proceeding, governed by the Administrative Procedure Act, with a written decision explaining the results.

The public interest standard applied by the FCC in its review has a long pedigree

as a useful and flexible device for such review. Although flexible, the standard is

not without content. To the contrary, the FCC’s recent decisions in major merger

cases have tied the standard to the provisions of the Communications Act and the

agency’s regulations implementing that Act. The standard is not limited to remedying specific violations of the Commission’s existing rules, however, and this provides important flexibility. Innovation in these industries is occurring at a frantic

pace. Businesses and markets are changing rapidly as new technologies replace old

and brush aside old models. This innovation is both the product and the source of

healthy competition, which allows the agency to reduce and avoid direct government

regulation. But the threat posed by innovation to existing firms can create strong

incentives to take defensive steps to block competition or raise barriers to innovation or market entry. Mergers can both promote efficiency and competition and

make defensive actions easier. The public interest standard allows the FCC in a

public proceeding to examine the impacts of proposed mergers, and determine

whether the merger will promote or endanger the goals of the Communications Act.

Those goals include not only enhancing (not merely preserving) competition, but also

maintaining diversity and encouraging the rapid and broad deployment of new technologies to all Americans. The advantages of a flexible public interest standard anchored in the express policies of the Communications Act over fixed rules that often

require years to propose and adopt are readily apparent in the rapidly changing environment of today’s communications industries. It is difficult enough to keep up

with challenges of rapid change today even with the public interest standard. Without this standard, efforts to protect and preserve the goals of the 1996 Communications Act in an era of rapid consolidation would be severely impaired.

Question. Many countries made WTO commitments to open their telecommunications markets to foreign competition. But several countries appear to be having

difficulty fully implementing their WTO commitment. For example, U.S. carriers recently highlighted implementation problems with Mexico, Canada, South Africa,

Peru, and Japan. What steps have the FCC affirmatively taken to enforce open markets abroad? Please provide specific examples of problems, solutions, and resulting

behavior.

Answer. The FCC has a unique role to play in the process of ensuring that foreign

markets are open to U.S. telecommunications companies, as many countries look to

the FCC as a model independent regulator and to the FCC’s regulations as models

for the introduction of competition into telecommunications markets. The FCC’s activity in promoting competition in other countries generally falls into two categories:

(1) engaging in discussions with and providing technical assistance to foreign telecommunications regulatory bodies; and (2) providing input for U.S. government comments in select critical proceedings of foreign telecommunications regulatory bodies.

The FCC has extensive and regular contact with telecommunications regulators

and other government officials around the world. These contacts take the form of

formal bilateral meetings, informal talks and side discussions at various international meetings. Through its International Visitors Program, the FCC has hosted

approximately 400 officials from 100 countries in 1999 alone. These contacts provide

the FCC an opportunity to offer technical assistance to countries seeking to introduce competitive reforms as well as to urge the resolution of specific problems. We

highlight below FCC efforts to establish contacts and address competitive concerns

in the specific countries about which you inquire.
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Mexico

The FCC has a long-standing working relationship with the Mexican telecommunications regular, Comisio ́n Federal de Telecomunicaciones (Cofetel), characterized by ongoing discussions on a variety of issues of concern to the United States,

including: establishing cost-oriented interconnection rates; issuing regulations to

allow resale in Mexico; preventing anti-competitive actions by the dominant carrier,

Telmex; issuing dominant carrier regulations that would apply to Telmex; and creating a transparent, nondiscriminatory universal service program.

Chairman Kennard discussed these issues with his Mexican counterpart, Mr.

Jorge Nicolin, the Chairman of Cofetel, during a recent visit to the United States

by Mr. Nicolin. Chairman Kennard also expressed concerns with Mexican policies

to Mr. Nicolin’s predecessor and to the Chairman of Telmex, Mr. Carlos Slim Helu.

Chairman Kennard recently participated in a panel at the recent Latin American

Telecommunications Summit (LATS) on interconnection at which Mexican regulators were present. FCC staff have had frequent contact with their counterparts

at Cofetel, including meetings in July 1999 that focused on universal service issues.

At that meeting, an FCC expert presented U.S. concerns with Mexico’s universal

service program. Adoption of a non-discriminatory, transparent universal service

program is critical to Mexico’s plans to adopt cost-oriented interconnection rates. In

addition, FCC staff have frequent contact with Cofetel staff at various meetings of

the regional organization, Inter-American Telecommunications Commission

(CITEL).

Cofetel has taken some important steps towards addressing concerns raised by

the FCC, although much work remains to be done. On March 28, 2000, Cofetel announced that they would be issuing dominant carrier regulations that will apply to

Telmex, the former monopoly provider of telecommunications services in Mexico.

CITEL, under the direction of FCC staff working as a rapporteur, has adopted ‘‘best

practice’’ guidelines for interconnection. These CITEL best practice guidelines provide valuable and influential guidance to countries throughout Latin America, including Mexico, on an issue of critical importance to promoting competition.

Germany

The FCC has frequently engaged the German telecommunications regulator,

Regulierungsbehoerde fu ̈ r Telekommunikation und Post (RegTP), in discussions on

issues of concern to the United States regarding the German telecommunications

regulatory framework, including: excessive licensing fees; the transparency of cost

data; and controlling the anti-competitive billing and collection practices of the dominant carrier, Deutsche Telekom.

Chairman Kennard raised these issues in a meeting with Chairman Scheurle of

RegTP in September 1999. FCC experts also held two days of tutorials for RegTP

in April 1999 on a variety of topics of concern to new entrants. In November 1999,

an FCC economist worked with RegTP staff on cost modeling issues and the use of

protective orders to safeguard proprietary data while still providing opportunity for

public scrutiny and comment. In March 2000, the U.S. government, with FCC participation, held bilateral negotiations with RegTP and the German Ministry of Economics. FCC staff have also met with officials from Deutsche Telekom (DT), the

former monopoly provider of telecommunications services, to discuss issues of competition, resale, interconnection and regulatory transparency. The FCC has also engaged the European Commission on competition issues in Germany and elsewhere

in Europe. Finally, the FCC coordinated the submission of U.S. government comments in the 1999 EU Communications Review as well as the EU consultation on

unbundled local access.

RegTP has issued a number of important pro-competitive decisions addressing

such issues as number portability (April 1998), pre-selection (June 1998), interconnection pricing (May 1999) and leased lines (September 1999). In February 1999,

RegTP required a one-third reduction in the rates charged by Deutsche Telekom for

competitors to use DT’s unbundled local loop connections. In December 1999, RegTP

announced a nearly 25 percent decrease in interconnection rates and expressed

plans to lower further interconnection rates this year. In March 2000, RegTP announced that they will be reviewing and, if appropriate, adjusting their high licensing fees. Finally, the European Commission is closely reviewing German telecommunications regulatory policy and may recommend changes this year.

Canada

AT&T has recently raised concerns regarding the universal service funding obligation on competitive long distance carriers in Canada. The Canadian telecommunications regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), denied a petition from AT&T and others requesting that the method-
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ology used to determine universal service obligation be modified. This issue is presently pending on appeal before the Canadian Cabinet. CRTC also has indicated that

it plans to review the methodology in the near future. The FCC assisted the Office

of the United States Trade Representative (USTR) in drafting a letter to the CRTC

raising potential concerns with the Canadian universal service program. The FCC

and USTR are closely monitoring the ongoing CRTC and Cabinet review of the universal service program and based on the results of this review, will determine

whether additional action is warranted.

In addition to cooperating with USTR to address concerns about Canada’s universal service program, the FCC has met with Canadian officials on a number of

occasions to discuss competition issues. The most recent of these meetings was in

September 1999, when Chairman Kennard and senior staff met with senior officials

of the CRTC to discuss a broad range of telecommunications issues and to promote

cooperation between the two commissions.

South Africa

The FCC has long had a close working relationship with the South African Telecommunications Regulatory Authority (SATRA). To formalize that relationship,

Chairman Kennard signed a work plan with SATRA in August 1999, in which the

FCC agreed to provide SATRA technical assistance in matters of telecommunications regulatory policy. On several occasions since, FCC staff have met with key

officials from Telkom South Africa, the Independent Broadcasting Authority and the

South African Department of Communications to discuss a wide range of issues, including telecommunications regulation, broadcast regulation, satellite issues, spectrum allocation, numbering and competition policy.

AT&T has recently raised the concern that Telkom, the dominant carrier in South

Africa, refuses to provision circuits to AT&T, in violation of a SATRA directive. FCC

staff have participated in several videoconferences with South African government

officials in an effort to resolve this situation. In addition, FCC staff will provide

input into the submission of U.S. Government comments in the current SATRA regulatory proceeding that could contribute to a resolution of this issue.

Peru

Bell South has recently raised a concern with the high level of local interconnection rates charged by the dominant carrier, Telefo ́nica de Peru. The FCC has

worked with the Peruvian telecommunications regulator, Organismo Supervisor de

Inversio ́n Privada en Telecomunicaciones (OSIPTEL) since its inception on a series

of issues relating to the introduction of competition. With the introduction of full

competition in Peruvian telecommunications late last year, OSIPTEL must now ensure that interconnection rates are cost-based. OSIPTEL is looking to the FCC for

guidance in meeting this obligation. In addition, Chairman Kennard recently signed

a work plan with OSIPTEL in March 2000, in which the FCC agreed to provide

OSIPTEL technical assistance in telecommunications regulatory policy matters.

At the recent meeting of the Latin American Telecommunications Summit

(LATS), Chairman Kennard met with Chairman Kunigami of OSIPTEL as well as

other top Peruvian officials to discuss the Bell South complaint. Kennard also held

an in-depth seminar with one quarter of the staff of OSIPTEL on issues relating

to interconnection and the establishment of an independent, effective regulator. We

are hopeful that our ongoing dialogue with key individuals at OSIPTEL will result

in a reduction in interconnection costs in that market. FCC staff have recently met

with Peruvian officials to discuss tariff regulation, market entry and competition

issues, benchmark issues and international simple resale (ISR).

Japan

The FCC has had numerous regulator-to-regulator discussions with the Japanese

Ministry of Posts and Telecommunications (MPT) on a broad range of regulatory

issues of key concern to the United States, including dominant carrier regulation,

interconnection, universal service and competition policy. The FCC has also met

with representatives from Keidanren, a major Japanese business organization which

advises MPT, to discuss issues such as regulatory independence and safeguards

against anti-competitive behavior. Recently, a major focus of talks has been on the

high interconnection rates in Japan of the dominant carrier, Nippon Telegraph and

Telephone (NTT). The FCC participated in recent deregulatory talks with Japan,

hosted by USTR. Interconnection issues were a major topic of those talks.

Japan recently committed to reducing its interconnection fees to a cost-oriented

level by 2003. The FCC will continue to engage its counterparts at MPT on interconnection issues and other competition policy concerns.
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Israel

Through a series of bilateral meetings, the FCC urged the Israeli government to

end a discriminatory policy that imposes a higher access fee on international calls

to and from the United States. Recently, Israel committed in a letter to the United

States to eliminate this discriminatory practice by December 31, 2001.

Question. Tribune recently announced plans to purchase the Los Angeles Times

Mirror. This acquisition if approved, will result in Tribune owning television stations and newspaper properties in the same market in violation of the FCC’s broadcast newspaper crossownership rules. The integrity of the broadcast crossownership

rules will be undermined by this merger if the FCC does not act to ensure that the

merger complies with its broadcast-crossownership rules. The FCC adopted its

newspaper cross ownership rule in 1975 and the rule was upheld by the Supreme

Court in 1978. I have been a strong supporter of this rule because it ensures that

the public receives diverse information by preventing major media outlets from

being owned by the same entity. I believe the FCC should implement its cross ownership rule with respect to the Tribune-Times Mirror merger and correct the procedural rule that suggests that the FCC wait until a renewal application is filed prior

to considering the issue.

Please advise me of what steps you intend to take to deal with this problem so

that the substance of the cross-ownership rule will not be undermined by the FCC’s oversight with respect to properly updating its procedural rules. When will the FCC

conclude a proceeding to bring the Tribune-Times Mirror merger into compliance

with its broadcast-newspaper cross ownership rules and close the procedural loop

hole in its rules?

Answer. In the Second Report and Order in Docket 18110, 50 FCC 2d 1046 (1975),

the Commission stated that the newspaper/broadcast cross-ownership rule it was

adopting in that proceeding would apply to new ownership patterns however created, whether by initial application and construction or by acquisition. In cases

where a daily newspaper was acquiring a local broadcast station, the Commission

would be able to act promptly with regard to the prohibited combination as part of

its consideration of the assignment application that would have to be filed by the

newspaper’s owner and the seller of the broadcast property. However, because the

Commission does not regulate newspapers, it would have no similar opportunity to

assess the merits of the proposed merger in cases where the broadcast licensee was

purchasing a local daily newspaper. Accordingly, in the Second Report and Order

the Commission determined that if a broadcast station licensee were to purchase

one or more daily newspapers in the same market, it would be required to dispose

of its stations there within 1 year or by the time of its next renewal date, whichever

is longer. If the newspaper is purchased less than a year from the expiration of the

license, the Commission continued, the renewal application may be filed, but it will

be deferred pending the sale of the station, if necessary, until the year has expired.

At the time this provision was adopted the license period for broadcast stations was

three years. Accordingly, in cases where the broadcast licensee acquired a local daily

newspaper, it would have at the least one year in which to divest or, at most, three

years.

Subsequently, however, Section 307(c) of the Communications Act was amended

to extend the license term for broadcast stations to eight years. The Commission,

to date, has not changed its retention policy with regard to broadcast stations’ acquisitions of local newspapers to take into account this expanded license term. The

Tribune/Times Mirror merger demonstrates that this policy is in need of review.

Under the existing policy, Tribune will be able to maintain at least three local newspaper/broadcast combinations—combinations which our rules provide are contrary to

the public interest—until the relevant broadcast station licenses come up for renewal in six or seven years. If the newspaper/broadcast cross-ownership provision

is to remain a vital part of our ownership rules, it seems clear that the extended

period of common ownership now permitted as a result of unrelated changes to

broadcasters’ license terms should be remedied. Accordingly, I intend to discuss with

my colleagues what action might be appropriate to address this anomaly.

QUESTIONS SUBMITTED BY SENATOR DANIEL K. INOUYE

Question. I would like to commend the FCC for generally supporting the important universal service mandates found in Section 254(g). The Commission’s continued adherence to these statutory mandates is vital to ensure that all Americans—

including those in noncontinguous or remote areas—benefit from increased competition in the provision of interexchange telecommunications services. What is the status of proceedings dealing with the rate integration mandates of Section 254(g)?
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Answer. The Commission’s commitment to principles of geographic rate averaging

and rate integration is reflected in orders dating from at least 1972. Congress codified these principles for the first time in 1996 by amending the Communications Act

of 1934 to include section 254(g). The Commission promulgated rules to implement

section 254(g) in its August 1996 First Report and Order on geographic rate averaging and rate integration. Under these rules, carriers generally are obligated to use

the same basic rate structures and to offer the same general calling plans to all of

their customers for interstate long-distance services, regardless of the U.S. state,

territory, or possession in which the customers are located, or whether they are in

rural or urban areas. Thus, interstate long-distance calls of similar distance, duration, and time of day should cost the same for all of a carrier’s customers. Carriers

accomplish this by ‘‘averaging’’ their interstate long-distance rates between low-cost

(often urban) areas and high-cost (often rural) areas, and by ‘‘integrating’’ off-shore

points such as Hawaii, Alaska, Puerto Rico, and the Virgin Islands into their domestic rate schedules.

Because the Commission had implemented a geographic rate averaging and rate

integration policy through its orders before the 1996 Act, carriers already were obligated to provide averaged and integrated rates in all states, Puerto Rico, and the

U.S. Virgin Islands at the time of the August 1996 order. In light of Congress’ codification of the policy, however, the Commission began with the August 1996 order

to ensure that all U.S. territories and possessions with more than de minimis

amounts of telecommunications traffic were rate integrated. The Commission has

determined that no further steps are required to ensure implementation of rate integration for U.S. territories or possessions other than Guam, the Northern Marianas,

and American Samoa. Although rate integration is not yet fully implemented in

Guam and the Northern Marianas, the Commission observed in a July 1997 order

that subscribers already were enjoying substantially lower rates than they experienced prior to the 1996 order. The Commission’s efforts to integrate American

Samoa require it to address a variety of issues, including: (1) privatization of the

government run telephone company and its division into separate local and long-distance entities; (2) provision of equal access arrangements to interstate long-distance

providers; (3) participation of American Samoa in the North American Numbering

Plan; and (4) inclusion of the local telephone company in the National Exchange

Carrier Association (NECA). American Samoa’s rates were fully integrated into the

NECA tariffs as of July 1, 1999.

In construing section 254(g), the Commission has held that that a carrier must

integrate its rates for a particular service across all its affiliates. The Commission

also has held that rate integration now applies to all interstate, interexchange services, including those offered by satellite and Cellular Mobile Radio Service (CMRS)

providers. In October 1997, the Commission stayed the affiliate rule as applied to

CMRS carriers, and in April 1999 the Commission sought comment on how to implement the rate integration requirement for CMRS. The Commission intends to

issue an order addressing these issues in August 2000. In the meantime, a challenge

to the Commission’s conclusion that rate integration applies to CMRS providers is

pending before the United States Court of Appeals for the D.C. Circuit, with argument scheduled for April 2000. Also at issue in the appeal is application of the affiliate rule to wireline carriers.

Question. In the context of the FCC’s efforts to reform the interstate access charge

system, the possible geographic deaveraging of interexchange rates charged to endusers has been raised. What steps do you contemplate to assure that any reform

of the interstate access charge system will not undermine Section 254(g)’s geographic averaging requirements or lead to unreasonable disparities in the interexchange rates charged to consumers in urban areas and those in remote or noncontiguous areas?

Answer. The Commission is currently considering adoption of a proposal made by

a coalition of local and long-distance companies (the ‘‘CALLS proposal’’) that would

permit local telephone companies to deaverage the flat monthly subscriber line

charge (SLC) paid by end users on a limited basis. Nothing in the CALLS proposal

permits interexchange carriers to charge higher rates to customers in rural or high

cost areas, as prohibited by section 254(g). Further, the CALLS proposal would place

absolute caps on the SLC and expand universal service giving all carriers, including

competitive carriers, explicit interstate universal service support for providing service in higher cost areas. According to proponents of the CALLS proposal, the SLC

caps and the expanded explicit universal service support would help to assure that

consumers in rural, insular and high cost areas continue to have access to telecommunications and information services that are reasonably comparable to those

services provided in urban areas, and at reasonably comparable rates. The Commis-
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5 In the Matter of Policies and Rules for the Direct Broadcast Satellite Service, Notice of Proposed Rulemaking, 13 FCC Rcd 6907 ¶ 34 (1998).

sion will keep universal service principles in the forefront in evaluating the CALLS

proposal.

Question. I would like to commend the Commission for its attention to the need

for securing DBS and DTH service for Hawaii, notwithstanding that the process has

not gone as swiftly as was expected. It is my understanding that the Commission’s

rules and rulings require DBS operators such as EchoStar and DirecTV to provide

DBS service to the State of Hawaii. For example, the rules obligate EchoStar and

DirecTV to serve Hawaii from their newer orbital positions and satellites that were

authorized after January 1996. Would you advise the Committee when the Commission expects its licensed DBS operators to actually begin providing service to the

State; what actions the Commission [is] considering to ensure that this service is

initiated expeditiously; and what steps are contemplated to assure that the State

of Hawaii receives DBS and DTH (Direct-To-Home) services like those received in

the Continental United States, as these services evolve?

Answer. The Commission recognizes the importance of establishing DBS as a competitor to cable in the multi-channel video programming distribution market in the

state of Hawaii and has worked hard to ensure that DBS service providers include

Hawaii in their service plans. By way of background, in the 1995 Revision of the

Rules and Policies for the Direct Broadcast Satellite Service, Report & Order, 11

FCC Rcd 9712 (1995) (DBS Auction Order), the Commission adopted geographic

service obligations for the state of Hawaii which require DBS licensees licensed

after January 19, 1996 to provide service to Hawaii as well as Alaska upon commencement of operations, where technically feasible. In its DBS Auction Order, the

Commission found that service to the state of Hawaii is technically feasible from

the 110° W.L. and 119° W.L. orbital locations (both of which can provide full

CONUS coverage) and that all four western DBS orbital positions (148, 157, 166

and 175 degrees W.L.) offer appropriate platforms for such service. In 1998, the

Commission initiated a Notice of Proposed Rulemaking addressing the DBS rules

and, among other things, requested comment on its geographic service rules.5

Specifically, we asked if there are other steps the Commission should take to ensure delivery of service to Hawaii and Alaska. This proceeding is still pending. Additionally, the International Bureau has had discussions with representatives from

the states of Hawaii and Alaska and other interested parties concerning this issue.

The International Bureau met EchoStar in late April 2000. Additionally, the International Bureau will meet DIRECTV and representatives of Hawaii and Alaska in

June 2000 to discuss the issues involved and to determine the actual extent of DBS

service to these states.

Based on our current information, the following describes our understanding of

DBS service provided in Hawaii. EchoStar Satellite Corporation, which operates the

DISH Network, is authorized to provide service from the 110°, 119°, and 148° orbit

locations and currently has satellites at the first two locations. DIRECTV is authorized to provide service from the 119° W.L., 110° W.L. and 101° W.L. orbit locations.

EchoStar filed a letter on December 17, 1999, informing the Commission of its plans

to provide service to Alaska and Hawaii from its satellites located at 110° W.L. and

119° W.L. The Commission put this filing on public notice and has received comments. In its letter, EchoStar states that the EchoStar 5 satellite that was launched

in September 1999, has recently commenced partial operations after undergoing successful in-orbit testing and that EchoStar is in the process of bringing its full capacity on line. EchoStar states that Hawaii will have at least fifty video channels in

addition to targeted local channel offerings provided from this satellite located at

110° W.L. EchoStar was granted temporary authority to move its EchoStar 4 satellite to 119° W.L. where EchoStar asserts that it will enable residents of Hawaii

to receive enhanced service from that location. EchoStar states that from the 119°

W.L. location it will be able to provide more than 60 channels of core cable type

programming to Hawaii and Alaska. EchoStar states that it also intends to serve

Hawaii from its 148° W.L. orbit position when it launches a new satellite to that

location. EchoStar’s original plans to serve the State of Hawaii from 148° were delayed due to technical problems as described in its request for declaratory ruling.

According to DIRECTV, it expects to serve Hawaii in the near future but has not

announced a specific date.

The Commission is committed to ensuring that DBS providers serve the states of

Hawaii and Alaska. To that end Commission staff is working on a number of

projects to meet this objective. The staff will carefully consider all comments filed

in the EchoStar proceeding, the Notice of Proposed Rulemaking, and the outcome
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of the meetings with representatives of Hawaii and Alaska and DBS operators to

determine whether DBS providers are meeting their geographic service obligation.

QUESTIONS SUBMITTED BY SENATOR FRANK R. LAUTENBERG

Question. I believe that we must do all we can to address the digital divide between those of us who enjoy the benefits of electronic commerce, and those who remain outside of these opportunities. Specifically, I would like to know how many

schools the E-Rate program has connected to the Internet over the past year and

what impact the Internet has had on students?

Answer. In Internet Access in U.S. Public Schools and Classrooms 1994–99, the

National Center for Education Statistics (NCES) estimates that, between October

1998 and October 1999, approximately 5,752 public schools gained access to the

Internet. According to NCES, 89 percent of all public schools, or approximately

85,322 public schools, had at least one connection to the Internet in 1998. By 1999,

95 percent of all public schools, or approximately 91,074 schools, had gained access

to the Internet, a 6 percent net increase. The NCES report also notes that some

300,000 classrooms were newly connected to the Internet during this same time period. While not all of these gains are attributable to the schools and libraries universal service support mechanism (also known as the E-Rate), I must observe that

over $2 billion has been disbursed to public schools for internal connections purposes in the program’s first two funding years (November 1998 to June 2000).

For evidence of the effect Internet connections have had on students, I draw your

attention to a publication produced by the Education and Library Networks Coalition (EdLiNC), entitled E-Rate: Connecting Kids & Communities to the Future. This

publication contains numerous stories of communities that have benefited from the

program. In Aniak, Alaska, for example, the Kuspuk School District has been able

to wire all of its school buildings and install satellite-based Internet connections at

every school as a result of the $41,000 in first year funding that it received through

the E-Rate program. Thus, the Yupik Eskimo children residing in the district’s eight

villages, none of which are accessible by road, can now utilize the Internet’s resources. Another example comes from the Houston Independent School District,

which received $19.6 million in E-Rate funding in the program’s first year. Houston

ISD used this funding to help develop a network for its various campuses and create

an exchange of information between local schools in math and science. A final example comes from New Jersey, where the Atlantic County Library System received

$100,000 in E-Rate funding to connect half of the county’s public and private schools

and 20 libraries with flat-rate access to the Internet.

Question. Chairman Kennard, you are aware that Congress continues to debate

the merits of Permanent Normal Trade Relations for China. The President has identified PNTR as key to creating opportunities for American businesses and American

workers. I would like for you to comment on the potential impact PTNR will have

on the American telecommunications industry. For example, how will PNTR and the

WTO legal framework protect the intellectual property interests of the American

telecommunications industry?

Answer. You have asked for my comments on the potential impact that granting

‘‘permanent normal trade relations’’ (PNTR) to China would have on the U.S.

telecom industry. As I’m not an expert on trade matters, I rely on my colleagues

William Daley and Charlene Barshefsky to comment on the general issue of PNTR

and China. I can tell you that experts at the FCC have looked at the deal that

USTR negotiated with China and believe that it offers significant commitments in

the areas of value-added and basic services. With regard to the issue of IPR, about

which you have specifically asked, I must confess that it is not an area in which

the FCC has expertise. I believe it would be more appropriate to address your question to the Patent and Trademark Office (PTO) or to USTR.

Question. Access to telecommunications opportunities are a cornerstone of your

tenure at the FCC. Low-power FM radio and broadcast EEO rules attempt to increase the accessibility Americans have to the airwaves or to the industry. Could

you evaluate the FCC’s progress thus far on these two initiatives?

Answer. The Commission has made great progress in authorizing a new LPFM

service and implementing its new EEO rule. On January 20, 2000, the Commission

issued a Report and Order authorizing two new classes of noncommercial LPFM

service designed to serve very localized communities. The new rules adopted by the

Commission limit LPFM to LP 100, with power from 50–100 watts and a service

radius of about 3.5 miles; and LP10, with power from 1–10 watts and a service radius of about 1 to 2 miles. The rules impose station separation requirements between new LPFM and existing radio stations on co-, first and second adjacent and
319

intermediate frequency (IF) channels. The Commission opted not to impose third adjacent channel separation requirements because the engineering data and tests in

the proceeding demonstrated that 100 watt LPFM service will not cause unacceptable levels of interference to existing radio stations separated by three channels. A

20-kilometer buffer has been added to the separations for protecting co-channel and

first adjacent channel full-service stations. This buffer will provide increased protection and flexibility for existing and subsequently upgraded full-power FM radio facilities. Eligibility for new LPFM facilities is limited to noncommercial entities. The

Report and Order stated that a noncommercial service will be the best way to bring

additional diversity to broadcasting and serve local community needs in a focused

manner with LPFM service. —With respect to the licensing process for LPFM, on March 17, 2000, the Mass

Media Bureau announced that 100 watt LPFM applications will be accepted in

a five-stage national filing window. A copy of the Public Notice is attached. Further information on LPFM may be easily obtained from the FCC home page at

http://www.fcc.gov. The fifty states, the District of Columbia, and the remaining

jurisdictions have been divided into five groups, and all LPFM applicants proposing to locate transmitters in a particular state or jurisdiction must file in

the five-day filing window for that state or jurisdiction. The order in which the

five different groups will be opened for applications was determined on March

27, 2000 by lottery. The first group consists of Alaska, California, District of Columbia, Georgia, Indiana, Louisiana, Maine, Mariana Islands, Maryland, Oklahoma, Rhode Island, and Utah. A copy of that Public Notice listing the states

and jurisdictions comprising each group and the order in which the groups were

placed by the lottery is attached. The Commission expects to issue a Public Notice announcing the first five-day filing window for the first group of states and

jurisdictions at the end of April, thirty days before the first day of the filing

window, which will be at the end of May. For additional information, please

refer to http://www.fcc.gov.

With respect to EEO, on January 20, 2000, the Commission adopted new equal

employment opportunity (EEO) rules that reaffirm the Commission’s long-standing

anti-discrimination rule and require broad outreach to all qualified job candidates

for positions at radio, television and cable companies. The Report and Order prohibits discrimination on the basis of race, religion, color, national origin or gender.

The effective date for the new EEO rules is expected to be April 17, 2000, assuming

that the Commission receives by that date OMB approval for the information collection requirements contained in the rules. The new rules respond to the D.C. Circuit

Court of Appeals decision in 1998 in Lutheran Church Missouri Synod v. FCC (Lutheran Church), which held that certain aspects of the Commission’s previous broadcast EEO outreach requirements were unconstitutional.

The new rules require broadcast licensees and cable entities to widely disseminate

information about job openings to all segments of the community to ensure that all

qualified applicants, including minorities and women, have sufficient opportunities

to compete for jobs. The new rules do not require broadcasters to hire any particular

applicant. The Commission also amended its EEO rules applicable to cable entities,

including multichannel video programming distributors, to conform them, as much

as possible, to the broadcast EEO rule.

The Report and Order gives a broadcaster significant flexibility in designing its

EEO program. Broadcasters may implement two supplemental recruitment measures: (1) sending job vacancy announcements to recruitment organizations that request them; and (2) selecting from a menu of non-vacancy specific outreach approaches, such as job fairs, internship programs, and interaction with educational

and community groups. Alternatively, if a broadcaster or cable entity believes it can

accomplish broad outreach without these supplemental recruitment measures, it

may design its own outreach program and must maintain records concerning the recruitment sources, race, ethnicity and gender of applicants so it can monitor the effectiveness of its outreach efforts. The Report and Order continues to allow religious

broadcasters to establish religious belief or affiliation as a job qualification for all

station employees.

As in the past, broadcast stations with fewer than five full-time employees and

cable entities with fewer than six full-time employees will not be required to demonstrate compliance with the EEO program requirements. However, all other broadcasters must place an annual EEO report in their public file detailing their outreach

efforts and must file a Statement of Compliance every second, fourth and sixth year

of the license term certifying compliance with the EEO rule. In addition, all television stations and radio stations with more than 10 full-time employees must submit their annual EEO reports to the Commission midway through the license term

and at renewal. At these times, the Commission will review the station’s outreach
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efforts. Cable entities will be required to submit their annual EEO public file reports as part of the supplemental information required by statute to be filed every

five years.

The Commission also reinstated the requirement that broadcasters file annual

employment reports, which was suspended by the Commission following the Lutheran Church decision and retained the requirement that cable entities file annual

employment reports. The Commission will use the information in the annual employment reports only to monitor industry employment trends and prepare reports

to Congress.

PUBLIC NOTICE—DA 00–621, MARCH 17, 2000

FCC ANNOUNCES FIVE-STAGE NATIONAL FILING WINDOW FOR LOW POWER FM

BROADCAST STATION APPLICATIONS

The Mass Media Bureau announces the establishment of a five-stage national filing window for 100 watt low power FM (LPFM) applications. The five-stage filing

window approach is designed to ensure the expeditious implementation of the LPFM

service and to promote the efficient use of Commission resources.

The FCC has divided the fifty states, the District of Columbia, Puerto Rico and

the remaining jurisdictions into five groups, each comprised of ten states and at

least one other jurisdiction. All LPFM applications proposing to locate transmitters

in a particular state or jurisdiction must file in the filing window for that state or

jurisdiction. Applicants in states and jurisdictions in each of the five groups will be

permitted to file LPFM applications during a designated five-day filing window.

The five groups are as follows:

I: Connecticut, Illinois, Kansas, Michigan, Minnesota, Mississippi, Nevada, New

Hampshire, Puerto Rico, Virginia, Wyoming.

II: American Samoa, Colorado, Delaware, Hawaii, Idaho, Missouri, New York,

Ohio, South Carolina, South Dakota, Wisconsin.

III: Alabama, Arkansas, Guam, Kentucky, Massachusetts, Montana, Nebraska,

New Mexico, North Carolina, Pennsylvania, Washington.

IV: Arizona, Florida, Iowa, New Jersey, North Dakota, Oregon, Tennessee, Texas,

U.S. Virgin Islands, Vermont, West Virginia.

V: Alaska, California, District of Columbia, Georgia, Indiana, Louisiana, Maine,

Mariana Islands, Maryland, Oklahoma, Rhode Island, Utah.

On March 27, 2000, the FCC will select through a random process the first application group. The selection will be held on March 27, 2000 at 10:00 a.m. in the Commission Meeting Room, 445 12th St. S.W., Room TW–C305.

The dates of the first filing window will be announced by Public Notice at least

30 days prior to the first day of the window.

The order of the filing windows in which the four subsequent groups’ applications

will be accepted will also be determined on March 27, 2000. Tentatively, filing windows will follow each other at three-month intervals. However, the Bureau may reduce or increase the amount of time between filing windows as we gain experience

with this new service and filing approach. The dates of the four subsequent filing

windows will be announced by Public Notice at least 30 days prior to the first day

of each window.

The composition of each group is designed to ensure the equitable distribution of

LPFM station licenses in three ways. First, every part of the country is represented

in each group. Every state or jurisdiction will have a one in five chance of being

selected for the first filing window. Second, each group is balanced by market size

in that each group contains several of the top fifteen markets. Finally, all of the

states in each group are separated geographically, thus eliminating the potential for

conflicting proposals across state lines.

By the Chief, Mass Media Bureau.
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NEWS

MARCH 27, 2000.

FCC LOTTERY TODAY DETERMINES ORDER FOR ACCEPTING APPLICATIONS FOR LOW

POWER FM RADIO STATION LICENSES

ACTUAL DATES OF FILING WINDOWS TO BE ANNOUNCED IN LATER PUBLIC NOTICE

Washington, DC—The FCC today held its low power FM lottery to determine the

order in which it will accept applications for this new radio service.

The lottery determined that the applicants from the following group of states will

be the first to be accepted: Alaska, California, District of Columbia, Georgia, Indiana, Louisiana, Maine, Mariana Islands, Maryland, Oklahoma, Rhode Island, Utah.

The Commission will take applications during a five-day filing window that will

be announced in a subsequent Public Notice to be issued at the end of April, 30 days

prior to the first day of the filing window, which will be at the end of May.

As he kicked-off the lottery process, FCC Chairman William E. Kennard, said,

‘‘Today we begin a process that offers access to the airwaves to many Americans—

such as members of schools, churches, minority groups, public safety agencies, volunteer fire departments and other local community groups. I look forward to the

FCC’s soon receiving applications from many groups that, through these shortrange, low power radio stations, will have a voice to serve their local communities.’’

Commissioner Gloria Tristani said, ‘‘My grandfather, the late U.S. Senator Dennis

Chavez, taught me that one of the most important things we can do as public servants is to give a voice to the voiceless. That’s why low power radio is so important.’’

The Commission will be accepting applications in five groups. Evenly divided

within those five groups are the 50 states, as well as U.S. possessions and territories.

The following is the order, also determined by lottery today, for processing applications from applicants in the remaining state groups:

No. 2.—Connecticut, Illinois, Kansas, Michigan, Minnesota, Mississippi, Nevada,

New Hampshire, Puerto Rico, Virginia, Wyoming. (Public Notice July 2000; filing

window: August 2000).

No. 3.—American Samoa, Colorado, Delaware, Hawaii, Idaho, Missouri, New

York, Ohio, South Carolina, South Dakota, Wisconsin (Public Notice October 2000;

filing window: November 2000).

No. 4.—Arizona, Florida, Iowa, New Jersey, North Dakota, Oregon, Tennessee,

Texas, U.S. Virgin Islands, Vermont, West Virginia (Public Notice January 2001; filing window: February 2001).

No. 5.—Alabama, Arkansas, Guam, Kentucky, Massachusetts, Montana, Nebraska, New Mexico, North Carolina, Pennsylvania, Washington (Public Notice

April 2001; filing window: May 2001).

The actual dates for the filing windows in each state grouping will be announced

in subsequent Public Notices.

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SECURITIES AND EXCHANGE COMMISSION

STATEMENT OF ARTHUR LEVITT, CHAIRMAN

ACCOMPANIED BY JAMES M. McCONNELL, EXECUTIVE DIRECTOR

INTRODUCTION

Senator GREGG. Mr. Chairman, we welcome you to the committee. We will forego opening statements on our part, and you tell

us what you wish.

OPENING REMARKS

Mr. LEVITT. Just briefly, we face today a confluence of extraordinary forces, market growth, and the development of online trading, market structural changes which provide enormous challenges

for the Commission. We believe that the increased funding in the

President’s budget will give us the kinds of resources we need in

a number of areas, including disclosure operations, examinations,

and technical infrastructure.

There are really two areas that dominate the Commission’s agenda: the impact of the Internet, which is evolving today, and the extraordinary losses in terms of personnel that the Commission is experiencing. It is bad enough to lose them to the private sector, but

we are losing them to other financial regulatory agencies. And at

this time, when we have merged these functions, it becomes particularly difficult for our people who must work closely with the

Fed and the Comptroller’s Office and other financial regulators to

see staff there earning more money, and the consequence of that

is we are losing staff to them.

PREPARED STATEMENT

With respect to Internet fraud, we see new kinds of fraudulent

schemes emerging. We are asking for a minimal amount more than

this year; the $12.5 million we received in fiscal year 2000 was a

very important first step. We hope to use our resources effectively.

So aside from fixed costs in our IT program, we are requesting a

small increase in Internet funding. In general, this is the thrust of

what we are about, and I would be glad to answer any questions

that you might have.

[The statement follows:]

PREPARED STATEMENT OF ARTHUR LEVITT

Chairman Gregg, Ranking Member Hollings, and Members of the Subcommittee:

I appreciate this opportunity to testify in support of the Securities and Exchange

Commission’s (SEC or Commission) fiscal 2001 budget. When I spoke before you last

year, I described a market environment that was characterized by unprecedented

volume, tremendous growth, increasing complexity, and globalization. I also indicated that the SEC would need multi-year increases in budget and staffing to meet

these demands. These same forces and the increasing use of new technologies continue to dominate our markets and needs today.
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1See Adam Zagorin, Taking Stock Scams Offline, Time Magazine, March 13, 2000. 2See Rebecca Bickman, What now? The growth in online investing heralds all sorts of changes

in the near future, Wall St. Journal, June 14, 1999. 3See ONLINE BROKERAGE: KEEPING APACE OF CYBERSPACE, Report of Laura S.

Unger, Commissioner, U.S. Securities and Exchange Commission, November 1999. This Report

is available online at http://www.sec.gov/oursite/wotsacro.htm.

Recent advances now permit a variety and combination of services that blur the

distinction between markets, intermediaries, and service providers. Electronic Communication Networks (ECNs) are challenging traditional trading floors. The nation’s stock exchanges are considering shedding their long-held membership status. Online

trading is empowering retail investors. Institutional trading has increased the demand for greater liquidity, anonymity, and even new trading venues. Market participants are demanding more: twenty-four hour trading, immediate execution of orders, and lower costs.

It is against this backdrop that the President’s fiscal 2001 budget request seeks an appropriation for the SEC of $422.8 million, 12 percent above the Commission’s fiscal 2000 spending level of $377 million. This $422.8 million request will fund

3,037 staff years, an increase of 77 staff years (2.6 percent) over our current staffing

levels. Our funding request covers $15.6 million in mandatory and inflationary expenses, $15 million to reinstitute special pay authority, $10 million for information

systems, and $5.2 million for new staff. Additional staffing for our law enforcement

activities will better enable us to detect and take action against fraudulent securities activity on the Internet and other online information services, as well as respond to continued growth and change in electronic forms of communication.

Assuming we are able to retain the necessary staff in fiscal 2001, this request will

provide the Commission with the resources necessary to responsibly fulfill our mission of protecting investors and maintaining our markets’ integrity. In particular,

it will allow the Commission to: —continue combatting fraudulent conduct on the Internet; —provide effective oversight of the increasingly complex activities of regulated entities, including examining on-line and day trading activities; —further implement a formal inspection cycle program of the increasing number

of alternative trading systems; —continue focusing on financial accounting frauds, earnings management practices, and developments in domestic and international accounting, independence, and auditing matters; —meet the anticipated workload stemming from the increasing number of mergers resulting from the convergence of the gas and electric markets and the

globalization of the utility industry; —update and improve prospectus requirements for variable insurance products; —develop a tailored disclosure document for unit investment trusts; and —strengthen its technological infrastructure to support the agency in its three

most rapidly growing areas: electronic forms, document and records management, and market data and analysis tools.

In requesting the funding to support these activities, however, I must focus on

two specific areas that are dominating the Commission’s agenda: the Internet and

our inability to retain qualified staff. Without bringing these factors into our discussion of the SEC’s budget needs, I believe we would fail to give a clear picture of

how we plan to meet the challenges that lie ahead, including protecting investors

and maintaining the integrity of our markets.

THE CHALLENGES OF THE INTERNET

The Internet is having a profound effect on the way investors participate in the

capital markets and on the Commission. By the end of this year, there will be nearly 5.5 million domestic online brokerage accounts 1, with 20 million expected by

2003.2 During the first quarter of 1999, nearly one in six equity trades was placed

through online brokerage accounts. For retail investors, the percentage of trades executed via the Internet is even higher. A November 1999 report by SEC Commissioner Laura S. Unger notes that more than one in three trades by retail investors

are effected online.3 These numbers will only increase as a greater percentage of investors avail themselves of the economies of online trading.

Moreover, the Internet has changed the way investment research is conducted.

The Internet affords retail investors easy access to all kinds of information, both

fact (real-time stock quotes, SEC filings, and corporate news releases) and opinion

(newsgroup or message board postings, Internet mailing lists, analysts’ reports,

website discussions, and chat rooms). Entire Internet communities—some with their

own celebrity spokespersons—have grown up around particular industries, tech-
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4See http://www.siliconinvestor.com (viewed March 14, 2000).

nologies or issuers, providing an incubator for investment ideas, and a forum for

competing viewpoints. One of the most popular Internet message board services, for

example, has over 13.2 million investment-related messages available for its patrons’ viewing.4

INTERNET AND SECURITIES FRAUD

While the Internet has brought significant benefits to investors, it also has created significant dangers for the unwary. The Internet, coupled with the greatest bull

market in history, has brought millions of relative novices to the markets, while also

providing simple, effective, and anonymous ways for unscrupulous people to defraud

them. A single mass e-mail, or ‘‘spam,’’ sent through the click of a mouse, can more

easily and cheaply reach investors than hundreds of cold calls from an old-fashioned

boiler room. The use of digital media also can lend fraudulent material an air of

credibility. Someone with a home computer and knowledge of computer graphics can

create an attractive, professional-looking website, rivaling that of a Fortune 500

company.

In the earliest days of the Commission’s Internet fraud program, the frauds that

prevailed online were simply electronic versions of scams that had long been conducted through paper newsletters, mass organizational meetings, and orchestrated

telephone solicitations. Principal among these were: stock manipulations, offerings

frauds, and illegal touts. We continue to witness these scams, particularly manipulation, with too great a frequency on the Internet. For example, on March 2, 2000

the Commission brought a settled manipulation case against several Washington,

D.C. area law students. We allege that one of the students created a website that

he used to drive up the short-term price of four stocks. According to the complaint,

the student inflated the short-term price for each stock by as much as 700 percent.

By trading in advance of his stock recommendations, the student generated over

$345,000 in total profits for himself, his mother, three of his law school classmates,

and two of his friends.

As the Internet has evolved, however, so too has Internet fraud. New fraudulent

schemes have begun to emerge, such as: momentum trading websites, day trading

recommendation websites, recommendation scalping, imposter message board

frauds, and messages that appear to be misdirected. These scams often result in sizable investors losses. One purported pyramid scheme offered through the Internet,

for example, raised more than $150 million from over 155,000 investors before the

Commission shut it down. In another action, a popular online stock touter, whom

the Commission recently charged with improperly trading ahead of his stock recommendations to the detriment of his subscribers, maintained a website with 3,800

paying members.

SEC APPROACH

The Commission’s ongoing program to fight Internet securities law violations is

a team effort, in which every Division and Office plays a significant part. Since it

is charged with uncovering, investigating and litigating Internet cases, however, the

lead role in combatting online fraud is played by the Division of Enforcement. The

SEC brought its first Internet enforcement action in 1995. While the amount of any

fraud is impossible to quantify with precision, based on our surveillance and the

number of complaints we receive, Internet securities fraud is on the rise. To date,

the Commission has filed approximately 120 Internet actions—most in the last two

years—alleging securities law violations by hundreds of persons and entities.

In July 1998, as a result of the Internet’s growing importance and the rising incidence of Internet fraud, a formal Office of Internet Enforcement (‘‘OIE’’) was created

within the Enforcement Division. OIE began serving primarily as a coordinator of

the Commission’s Internet program and as a liaison with other regulatory and

criminal law enforcement agencies at the federal, state, and local levels.

Between the spring of 1999 and the present, OIE has grown from three to 13 attorneys, with experience and expertise in a wide variety of areas pertinent to Internet enforcement. OIE’s current functions include:

—identifying areas for surveillance and conducting surveillance,

—analyzing the complaints we receive from our online Enforcement Complaint

Center (‘‘ECC’’),

—formulating investigative procedures,

—coordinating Internet initiatives,

—conducting staff and outside law enforcement training,

—engaging in special projects,
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—ensuring staff compliance with federal communications privacy statutes and applicable laws, and —working on Internet matters for the entire Commission.

Alongside OIE is the so-called ‘‘Cyberforce’’—approximately 240 Commission attorneys, accountants, and investigators nationwide—whose purpose is to conduct

regular Internet surveillance. Cyberforce members dedicate a portion of their work

week to surfing the Internet, developing leads for potential enforcement cases. The

Cyberforce also participates in coordinated surveillance projects both within the

SEC and with other federal agencies, such as the law enforcement ‘‘surf days’’ or- chestrated over the past three years by the Federal Trade Commission.

COMMITTEE RESPONSIVENESS

With the vital support of this Committee and Chairman Gregg, the Commission

has made immediate strides in its Internet initiatives. In November 1999, the Commission received a fiscal 2000 appropriation that provided an additional $7 million

over our request which supplemented a reprogramming of an additional $5.5 million

specifically to combat Internet fraud. These funds are being spent both to augment

the staff investigating online securities law violations and otherwise studying aspects of the electronic marketplace, and to supplement and improve the technological systems that support those staff members. Already the Commission has

turned these dollars into tangible additions to its Internet program. We have created 92 positions for our Internet fraud program with these funds. Seventy-five of

these positions have been assigned to our Division of Enforcement and 17 have been

assigned to aid other offices and divisions in their Internet-related efforts. In addition, staff currently is evaluating contractor proposals to provide technological assistance in our surveillance of the Internet, in response to a request for proposals

that we issued in January.

Most of the new Enforcement staff will spend all of their time investigating and

prosecuting Internet fraud. Among these 75 positions, 23 have been allocated to our

headquarters in Washington, D.C. and the remaining 52 positions to our regional

offices throughout the country. The 17 positions allocated to the other divisions and

offices will be used for a variety of purposes, including bolstering our inspections

and examinations of regulated entities operating online, developing policies for the

securities industry’s use of the Internet, and furthering investor education and assistance. These additional resources no doubt better equip us to prosecute Internetrelated securities fraud and keep the Internet safe for investors.

As the Commission enters the new millennium, profound changes are drastically

reshaping the securities industry, and compelling the agency to reassess traditional

approaches to its mission of investor protection. In order to fulfill that mission, the

SEC must be forward-looking, strive to anticipate issues and challenges, and welcome new ideas and new strategies for meeting those challenges. The $12.5 million

we received in fiscal 2000 for combatting Internet fraud was a critical first step in

this direction. We intend to build on our past achievements, refine those practices

that continue to serve us well, and introduce new methods that will make us even

more responsive to changes in law and technology. Equally important, we intend to

work responsibly with the resources we have been given. For this reason, aside from

fixed costs and our information technology program, we have requested only a minimal increase above our fiscal 2000 level to fund our Internet activities in fiscal 2001.

We also are requesting only a small increase in Internet funding because we cannot

do more without being able to retain and recruit staff, which brings me to the second issue we would like to discuss today.

STAFFING CRISIS

The SEC is in the midst of a serious staffing crisis. On February 24, I wrote a

letter to you, Committee Chairman Stevens, Ranking Member Byrd, and the Congressional leadership alerting you to our inability to retain staff. This problem goes

to the very heart of the agency’s ability to oversee the nation’s growing securities

markets and to protect America’s savers and investors. In the last two years, the

Commission has lost 25 percent of its attorneys, accountants, and examiners. (In fiscal 1999, we lost 13.5 percent of our attorneys, 16.8 percent of our accountants, and

9.9 percent of our examiners.) Our overall attrition rate was 13 percent—nearly

twice the government-wide average, and our largest regional office alone lost a devastating 20 percent of its attorney workforce.

The Commission is losing staff before they become fully productive because we

cannot pay them enough. In a world where first-year associates are routinely making six-figure salaries in Washington, D.C. law firms, the salaries the SEC can provide simply are not competitive to attract and retain a sufficient number of talented
327

5The Commission recently contracted for a study comparing the significant disparity between

SEC salaries and what the private sector offers for the same line of work. We would be happy

to share the results of that study if you think it would be helpful in highlighting the magnitude

of our problems.

professionals to reduce high turnover, let alone to fill open positions. While we fully

recognize that the SEC cannot match the higher salaries offered by brokerages, law

firms, self-regulatory organizations, and other securities-related businesses, something needs to be done to narrow the pay gap and reduce the turnover problems

we face.5 Practically every day at least one of my senior managers comes to me expressing his or her frustration in not being able to keep tomorrow’s leaders.

EFFECT ON THE COMMISSION

Our current level of turnover and inability to attract qualified staff is threatening

our ability to oversee the nation’s securities markets and to respond in a timely

manner to the changing events and innovations in our markets by: —hampering our ability to bring cases to trial and disrupting the continuity we

need when pursuing cases; —hindering us from responding to changing markets in a timely fashion, including through targeted de-regulatory efforts; —limiting our institutional memory, which is a crucial component of our longterm effectiveness as a regulator; and —lowering employee morale, which in turn reinforces the staffing crisis.

We also become less productive. SEC staff work hard and well to handle the Commission’s increasing, and increasingly complex, workload. The time that our managers and senior staff can devote to this workload is, however, reduced by the time

it takes to recruit and train new staff. The SEC conservatively estimates that it

takes approximately two years for new staff to become fully productive. During this

period, new staff are actually a drag on the efficiency of the agency because they

are still moving up the learning curve. If these staff leave just as they become fully

productive to the agency, we do not recover our substantial investment in training

them. That is a loss not only for us, but also for the investing public and our markets.

RETENTION EFFORTS

Over the past several years the Commission has explored virtually every available

approach to keeping staff longer. In 1992, we petitioned and received from the Office

of Personnel Management the authority to pay the majority of our attorneys and

accountants approximately 10 percent above their base pay. While special pay was

a step in the right direction, it proved to be a short-term solution. This is because

staff that receive special pay do not receive the government-wide locality increase

each year, which means that their special pay becomes less valuable over time (it

is now almost entirely superseded by locality pay) and hence becomes less effective

as a retention tool. In addition to our special pay authority, which the President’s fiscal 2001 budget requests the funds to reinstate, the Commission has used retention allowances and economist special pay to help alleviate our retention problem.

While all of these tools have proved somewhat effective when targeted to specific

staff and situations, we believe they are incapable of providing the broad relief that

we need to combat the Commission’s losses and treat all staff fairly.

RECRUITMENT

The SEC also is facing a problem recruiting attorneys and accountants. We have

used recruitment bonuses where possible, but have not met with much success. A

typical first-year associate in a top-tier New York or Washington D.C. law firm

makes at least double the salary of a comparable staff attorney at the SEC. The

costs of three years of law school leave most graduates entering the job market with

significant amounts of student loan debt. It is not difficult to understand why the

private sector looks so appealing.

Our problem is even worse for accountants, who need to be experienced when they

walk in the door. This is of particular concern in an era where financial fraud and

earnings management has been on the rise. Experienced accountants are difficult

to find and expensive to hire because their ability to analyze complex financial

statements is highly prized. We do not have the luxury, if you can call it that, of

being able to take someone directly out of school. The Commission has attempted

to ameliorate this problem by developing an ‘‘in-service’’ placement program that allows certain Securities Compliance Examiners to be reassigned as accountants if

they meet specific criteria, but even this effort has fallen short. In fact, last year
328

only 46 percent of our available accountant positions were filled. The Commission

needs the ability not only to keep staff longer, but also to bring them to the Commission in the first place.

PARITY WITH THE BANKING REGULATORS

Another real concern the Commission has about staff salaries is the effect of the

landmark Gramm-Leach-Bliley Act of 1999 (‘‘GLBA’’). By allowing securities firms,

banks, and insurance companies to affiliate with one another, GLBA requires increased coordination of activities among all the financial regulators. Even more so

than in the past, Commission staff will work side-by-side with their counterparts

from the banking regulatory agencies, like the Federal Reserve, the Office of the

Comptroller of the Currency, and the Federal Deposit Insurance Corporation

(‘‘FDIC’’). However, we cannot match the salaries that these regulators pay.

Since all of the federal banking regulators are exempted from the standard government-wide pay schedule established under the civil service laws, they are able

to provide their staffs with appreciably more in compensation and benefits than we

can. While the maximum salary for a second-year attorney at the SEC, for example,

is $66,000, an FDIC attorney with similar levels of experience, technical skills, and

responsibilities can be paid as much as $91,000. This is a significant drain on morale. It is difficult to explain to SEC staff why they should not be paid at similar

levels, especially when they are conducting similar oversight, regulatory, and examination activities. It is one thing for staff to make salary comparisons with the private sector, but quite another for them to see their government counterparts making

anywhere from 24 to 39 percent more than they are. Moreover, the Commission has

already seen several staff leave to take positions with these agencies, primarily because of pay. Unless we are put on equal footing, this trend will continue and most

likely intensify.

Given the complexities of our markets and the new business affiliations we are

likely to see, the SEC believes it is most beneficial to have all the financial regulators working together from the same starting point. Towards that end, the Commission believes that providing our staff with pay comparable to the banking regulatory agencies would significantly help in extending the tenures of key employees

and help the Commission attract sufficient staff in the first place.

THE AGENCY AND ITS STAFF

The SEC should be a place where highly motivated people come to perform public

service and hone their skills, both before entering the private sector and after a

stint in the private sector. Such career paths speak highly of the Commission’s professionalism and the industry’s regard for the agency and its staff. However, the

Commission should be able to keep staff for a minimum of three to five years before

they leave, and show existing staff how much their efforts are valued. The SEC can

ill afford to have its future walk out the door. Moreover, we need to ensure that

the Commission has the staffing resources to meet the significant regulatory challenges that lie ahead as technology in general, and the Internet in particular, continue to re-shape our markets.

PROPOSALS TO PROVIDE RELIEF

The President’s fiscal 2001 budget request includes $15 million to reinstitute 10

percent special pay for certain attorneys and accountants. As I stated before, we

previously had this authority and used it in conjunction with recruitment bonuses,

retention allowances, and other retention tools. However, we do not believe that

bringing back special pay will be sufficient to resolve our staffing problem. A legislative solution that would provide the Commission with the same pay authority as the

banking agencies is vital. I have been discussing our need for pay relief with the

Banking Committee and the Administration. I hope we can all work together to attract and keep the best possible professionals at the SEC. I cannot emphasize too

strongly the importance of this issue as it relates to our mission of protecting investors and ensuring market integrity.

CONCLUSION

The Commission applauds the support that this Committee has given us to respond to the changing face and form of our nation’s securities markets. Our fiscal

2001 request for $422.8 million will go a long way toward enabling the Commission

to fulfill its mission of protecting investors and maintaining the integrity of our

markets as they continue to dramatically change. In addition, we are dedicated to

making the Internet a safe medium for investors and are grateful for the support
329

that this Committee has given us in helping pursue this objective. At this time, our

most significant challenge is to ensure that the Commission maintains the skills,

abilities, and expertise necessary to address the tremendous and competing demands presented by the industry with which we work. For this reason, we look forward to working with you to obtain the fiscal 2001 funding level we need and the

pay authority essential to keeping the people necessary to fulfill our mission of

keeping our nation’s securities markets the safest, fairest, and most liquid in the

world.

INTERNET FRAUD

Senator STEVENS. I have got to get back.

Senator GREGG. Go ahead.

Senator STEVENS. May I just ask one question? That is, how

much of this is allocated to Internet fraud? I think we are all hearing more and more about that.

Mr. MCCONNELL. We have a total in the year 2000 of $12.5 million, and new money was added. That is in our base for 2001. But

that is only sort of the tip of the iceberg. We have about 200 staff

people or more that are working on Internet cases.

Mr. LEVITT. And a special division within the Enforcement Division that does nothing but Internet cases. That has grown from

just a handful to approximately 14 full-time employees.

Senator STEVENS. Is it well known that you have some remedy

for people who may be injured, that you will investigate it and

bring some of those people to justice?

Mr. LEVITT. I think we have brought 170 Internet-related cases,

so that I think word is getting out there. I can’t say that we can

convince the public that we have total control of this because we

are experimenting with new kinds of technologies to surveil the

Internet. Our people are gaining experience, but there is so much

of it out there that the best way to approach it, we believe, is to

try to identify the kinds of cases that represent the greatest

amount of fraud and bring them and publicize them aggressively.

Senator STEVENS. Do you think this is the kind of thing that

compels a beef up of the Better Business Bureaus at the local level?

I don’t know anyone out my way who is watching fraud. I don’t

think our local district attorneys and only fraud enforcement people

have the capability to keep track of Internet fraud.

Mr. LEVITT. We see the greatest amount of interest and help in

this coming from the State securities regulators. They are beginning to focus on this aggressively, and working with them we feel

is a very constructive way of helping the public.

Senator STEVENS. I have to get out of here, but keep us informed.

We are on the Commerce Committee together. I think we would

like to get involved in that. Internet fraud is going to get bigger

and bigger because there are just too many people who really don’t

know too much about computers trying to get into the Internet

business. We are very interested in that.

Thank you very much, Mr. Chairman.

RESOURCES FOR INTERNET FRAUD ENFORCEMENT

Senator GREGG. Thank you, Mr. Chairman.

Let me reinforce the chairman’s comments. As far as I am concerned—and I am sure this whole committee is concerned—we

want to give you all the resources you need in order to adequately
330

address the Internet, or anything else you have to address. In my

opinion, resources should not be an issue with your agency, not

only because you generate a huge amount of fees, which means you

are running a fairly considerable surplus with the Treasury, but

second because, as we have discussed before, the integrity of the

capital markets is critical to the prosperity of this Nation. So you

tell us what you need, and we will try to meet those requests.

PAY PARITY FOR SEC STAFF

Mr. LEVITT. I really appreciate your continuing support of this effort. Our greatest, our most compelling need at this point is the

ability to get pay parity for our employees, and it has been so frustrating in terms of the way the process works. We have to bring

on board not just this committee but also the House Commerce

Committee, also the White House, and meanwhile we have employees watching every bit of testimony, every nuance of staff members

in these different agencies that impact this decision. And in the

meantime, they are being seduced by offers from other financial

regulators as well as from the private sector.

Senator GREGG. Well, it is my understanding that we are going

to have in our bill a package that your agency is developing to address pay parity. We are just going to put it in the bill and appropriate and authorize around that.

I don’t think you are going to have any problems on the Senate

side on this issue. Maybe there are issues on the House side.

Maybe there are issues at the White House. As far as I am concerned, this is critical. We may use your package as a demonstration because there are other agencies similar to yours, such as the

FCC, that have the same problem.

We have tried to address a different approach with the FBI, for

example. They have very serious problems over there with keeping

technology personnel.

SEC’S FISCAL YEAR 2001 BUDGET REQUEST TO OMB

The chairman asked you about Internet fraud. You have obviously got a division that is up and running. When you put your request into OMB, was there any adjustment of the request in this

area, or are you getting what you think you need?

Mr. MCCONNELL. They reduced it slightly to accommodate the

special pay rate increase. They reduced the staffing slightly to accommodate that. But it was by and large as we requested.

Senator GREGG. Maybe you could get us the numbers that you

are actually requesting.

ELECTRONIC MARKET DEVELOPMENT

Do you expect the New York Stock Exchange and the NASDAQ

to merge? If so, what does that mean?

Mr. LEVITT. I don’t see the likelihood of that occurring in the

short term. The NASDAQ appears intent with going ahead with

their private placement. If you asked me to look ahead over the

course of the next 5 years, I think it is a distinct possibility that

major U.S. markets, in an effort to combat what I believe would be
331

growing electronic markets all over the world, will very seriously

consider formal affiliations of one kind or another, in my judgment.

Senator GREGG. Do we need any securities law restructuring to

address this electronic market development?

Mr. LEVITT. I think the market itself will bring about these

changes. I am just hopeful that the kind of arcane governance

structure that our two major markets employ with using—needing

membership votes, with an ownership structure that in many instances is not even in the industry, I hope that they can be persuaded that they have to reinvent themselves to compete against

profit-making enterprises that can adjust to change with greater

flexibility and shorter time frames. If they don’t, I think there is

a real chance that our major markets could lose a substantial part

of their order flow to new electronic markets and new exchanges

that are developing all over the world.

Senator GREGG. Would you give me an example of an electronic

exchange that you see represents a potential out-year threat?

Mr. LEVITT. Well, I think some of the electronic markets that are

applying to us for exchange privileges—Archipelago is one. There

are three electronic markets that want to become exchanges here

in this country. There are some springing up in Europe. We read

today in the paper about three major European markets that will

be restructured as for-profit operations. Frankly, I think the forprofit model is far better able to compete than the membership

model. They are focusing on the right things. They are allowing

market forces to operate in a way which will stimulate competition

and innovation. And I wish our markets could think and operate

in that fashion. It is very difficult.

Senator GREGG. This won’t affect registration, will it?

Mr. LEVITT. I don’t think so. I think that that is a different issue.

Registration will be impacted by accounting rules, whether we are

able to embrace and harmonize the accounting rules which will enable more companies and foreign domains that have different accounting structures to list on U.S. exchanges. We are doing everything we can to force that to happen.

THE INTERNET AND FILING REQUIREMENTS

Senator GREGG. To what extent is the Internet being used as a

disclosure vehicle in the area of filing requirements with the SEC?

Mr. LEVITT. I think the Internet on balance is an enormously

positive vehicle to inform investors, to provide information of all

kinds to enable companies to use it to raise capital themselves. We

are going to see more of that, used as a trading device where customers can develop their own strategies. Our own EDGAR system

will enable companies to file for offerings.

On the other side, of course, it provides a vehicle for fraud, and,

in my judgment, the best way to arm American investors is not

necessarily to think that regulation alone can do that, but to try

and educate investors to be wary of the dangers of this, and, in a

market as heated as our present market is and where investors are

becoming much more emotional than intellectual about their decisions, that task is a huge task.
332

INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS

Senator GREGG. Is there a formally structured international relationship between the various securities and exchange commissions

around the world, the key ones, Hong Kong and Europe?

Mr. LEVITT. There is a formal organization called IOSCO, the

International Organization of Securities Commissions, which over

the years has become more and more like a United Nations. Because of that, we have formed an organization or an informal gathering of Tokyo, the United Kingdom, Germany, Italy, France, and

Hong Kong that meets generally on a quarterly basis. What is really important about that is that if there is a systemic problem that

develops anyplace in the world, I know that I can trust my Hong

Kong counterpart and my Tokyo counterpart knows that he can

trust me, and that exchange of information is about the best thing

we can do to protect against systemic problems. That is going on,

and I think it is a very effective protection for not just our markets

but for the globalized markets that have developed.

DECIMALIZATION

Senator GREGG. How successful have the exchanges been in getting ready for a cyber event of a terrorist type?

Mr. LEVITT. Well, a major cyber event coming down the pike is

decimalization, and I think the industry, having come through the

year 2000 successfully, is probably going to be ready for the July

target date. The NASD [National Association of Securities Dealers,

Incorporated] has asked us to delay that because of the unprecedented volume they are experiencing. The New York Stock Exchange has told us that they probably will be ready. I think it

would be confusing to American markets to allow one of them to

convert to decimals and the other not, so we are in the process now

of surveying the markets to determine when all of them will be

ready to move to decimalization, which I think is a critically important factor to be accomplished as quickly as possible. It would save

American investors money.

SEC PREPAREDNESS FOR CYBER ATTACKS

Senator GREGG. How about the potential for a cyber attack which

was meant to disrupt the exchanges, a terrorist type of attack?

Mr. LEVITT. All of the exchanges have security programs and

backups. Some use so-called tiger teams to test for vulnerability. I

believe that more work has to be done, but I think that, having run

one of those institutions myself, I know that they are focusing resources on that and developing backups, which I think is critically

important.

Senator GREGG. Are they coordinating with the cyber infrastructure efforts that are going forward on the Government level, such

as the FBI?

Mr. LEVITT. Yes. Yes, they are.

Senator GREGG. So that is a coordinated effort?

Mr. LEVITT. Yes.
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1See ONLINE BROKERAGE: KEEPING APACE OF CYBERSPACE, Report of Commissioner

Laura S. Unger of the Securities and Exchange Commission, November 1999, at pp. 3–4 (citing

research of CS First Boston and U.S. Bancorp Piper Jaffray). 2 Ibid. n. 4 at p. 125 (citing research of Forrester Research, Inc.).

SECTION 31

Senator GREGG. Is there anything you want to tell us about Section 31, or should we just omit that?

Mr. LEVITT. Well, the various recommendations on Section 31

have to run the gamut, as you know, of getting through this committee and through administration approval and trying to coordinate with the bill that Senator Gramm has introduced and the bill

that will emerge from the House Commerce Committee.

We are trying to be sensitive to all of the concerns that various

parties have as this bill plays out, so we are not waving a flag at

this point, not charging ahead. We are trying to work with all elements and trying to preserve pay parity, which appears to be an

element of all proposals.

CONCLUDING REMARKS

Senator GREGG. Anything else?

Mr. LEVITT. Just to express my deepest and most sincere appreciation for your sensitivity and your understanding and your willingness to focus on the needs of American markets and investors.

Senator GREGG. Well, you do a wonderful job for us, and we appreciate it. And you have a superb agency, and we want to make

sure it stays that way. So whatever we can do to help, we are willing to put our oar in the water.

Mr. LEVITT. Thank you very much.

Senator GREGG. Thank you, Mr. Chairman.

[The following questions were not asked at the hearing, but were

submitted to the Commission for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY SENATOR FRANK R. LAUTENBERG

Question. Mr. Chairman, the Internet has revolutionized the way Americans invest in our capital markets. Over the past year, traditional brokerages have transformed their businesses from telephone consultations between brokers and investors

to online investing where the mouse and the computer modem have become the

method for trade. What steps have you taken to reassure online investors that they

will be protected from dishonest brokerages and fraudulent trading operations?

Answer. The brokerage industry clearly has embraced digital technology. A November 1999 report by Commissioner Laura S. Unger estimated that over 160 brokerage firms offered their customers the ability to trade securities online; 1 Internet

experts have predicted that half of all retail trades will be executed online by the

end of next year.2 The Commission generally views the evolution of the brokerage

industry and its adoption of new technology as positive developments, providing investors greater, more cost-effective access to the capital markets. The Commission

is mindful, however, that the ease of access offered by online trading creates potential dangers for novice investors. The Commission is working diligently to keep

apace of the ongoing changes in the industry, and to protect investors from these

pitfalls.

As a part of this effort, we have taken steps to gather information about online

brokerage firms and their practices. Between April and June of 1999, the Commission’s Office of Compliance Inspections and Examinations (OCIE) conducted 38 special-purpose examinations of online brokerage firms. At the time of this sweep, the

38 firms represented about 25 percent of the online brokerage industry. The staff

selected for examination a cross-section of the industry, including major brokerage

houses and small boutique firms. These examinations gave the staff a comprehen-
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3 ‘‘Report of Examinations of Day-Trading Broker-Dealers,’’ Office of Compliance Inspections

and Examinations, U.S. Securities and Exchange Commission, February 25, 2000 at p.2. 4 In the Matter of All-Tech Direct, Inc., et al., Admin. Proc. File No. 3–10150 (February 22,

2000); In the Matter of Investment Street Company, et al., Admin. Proc. File No. 3–10151 (February 22, 2000). 5SEC v. Douglas W. Colt, Civil Action No. 1:00CV00423 (D.D.C. March 2, 2000). 6 In the Matter of Kenneth Terrell, et al., Admin. Proc. File No. 3–10154 (March 2, 2000). 7http://www.sec.gov.

8The Commission’s website contains a number of useful resources for investors seeking to

educate themselves about the benefits and hazards of online trading. Among these are transcripts of talks by Chairman Arthur Levitt, Jr. concerning ‘‘Plain Talk About On-line Investing’’

(May 1999) and ‘‘On-line Trading’’ (January 1999) (both available through the Enforcement Division’s web page of Internet-related announcements, http://www.sec.gov/enforce/intrela.htm), as

well as the Office of Investor Education and Assistance’s informative web page concerning ‘‘The

Internet and Online Trading,’’ available at http://www.sec.gov/consumer/jneton.htm (updated

September 30, 1999).

sive picture of how online firms operate and the problems they and the investors

who use them face. The examinations also enabled the Commission’s staff to identify

areas of potential regulatory concern.

Similarly, from October 1998 through September 1999, OCIE conducted an examination sweep of 47 registered broker-dealers providing day-trading facilities to the

public. Findings from this day-trading sweep are published in the Commission’s ‘‘Report of Examinations of Day-Trading Broker-Dealers,’’ dated February 25, 2000,

which was recently presented to the Senate Permanent Subcommittee on Investigations by OCIE’s Director Lori Richards. While the day-trading sweep did not reveal

widespread fraud,3 examiners found some indications of significant regulatory violations that warranted referrals to the Commission’s Enforcement Division. These referrals related to potential net capital, margin and lending disclosure violations, and

have already resulted in several enforcement actions, including actions against AllTech Direct and Investment Street Company. The cease-and-desist proceedings

against these two day-trading firms charged violations of federal margin lending

provisions.4

In addition to identifying regulatory violations, we also have detected fraud in the

form of false advertising. Certain firms have overstated the successes their clients

have enjoyed, in an effort to entice new clients to trade through them. Last month,

the Commission filed and settled civil fraud charges against David A. Rudnick and

his company, DynamicDaytrader.com, an Internet website that provided real-time

stock recommendations to day-traders on a subscription basis. The Commission’s

complaint alleged that Rudnick and his company violated the antifraud provisions

of the federal securities laws by, among other things, posting significantly inflated

claims of investment returns on stocks the site recommended. The Commission obtained an injunction against further violations of the antifraud provisions by

Rudnick and his company, as well as disgorgement of $40,107 in subscriber membership fees plus prejudgment interest and a $15,000 civil monetary penalty against

Rudnick’s company. We think this case, and others like it, sends a strong message

that the Enforcement Division will take quick and decisive action to halt activities

intended to deceive online investors.

The Commission’s Enforcement Division continues to monitor, investigate and,

where appropriate, prosecute perpetrators of all types of online investment fraud,

including frauds perpetrated by individuals and entities outside of established firm

structures. For example, the Commission recently sued a group of individuals who

reaped illegal profits by improperly trading in advance of online recommendations.5

Through statements published on the stock recommendation site Fast-Trades.com,

the defendants manipulated the price of several featured securities, leaving investors with serious losses. The Commission in settlement obtained a final judgment

permanently enjoining the scheme’s principal architect from further manipulative

conduct, and a cease and desist order barring four other defendants from future violations of the federal antifraud provisions.6

As I have often said, the best defense against this kind of online fraud is a welleducated investor. Consequently, we have enlisted our Office of Investor Education

and Assistance in an agency-wide effort to spread the word on the risks presented

by online investing. The SEC’s popular Internet website 7 contains a wealth of information on this topic.8 In addition, we have incorporated discussions of day-trading

and online trading into the numerous Investor Town Meetings at which members

of my staff and I discuss investment topics with the public. One such meeting recently was held online, giving everyone with a computer the opportunity to attend

and hear the Commission’s cautionary discussion of the potential dangers of Inter-
335

net investing. Ultimately, the best way to protect online investors is by helping to

educate them, and we continue to work aggressively toward that goal.

In summary, the Commission intends to keep abreast of the latest innovations in

electronic brokerage, to monitor firms that conduct online operations, to assess the

risks presented to investors and, where regulatory or enforcement action is warranted, to move decisively to address wrongdoing.

Question. Over the past year, several organizations and Wall Street have made

an effort to increase access to capital for minority owned businesses and financial

services firms. What efforts do you think will be most effective at increasing opportunities for minorities in the securities industry?

Answer. The SEC believes that the primary key to increasing opportunities for

minorities in the securities industry is education; in particular, promoting the benefits of investing and careers in the securities industry. Towards this end, the Commission has pushed Wall Street firms to mentor students, increase recruitment activity at colleges and universities with large minority enrollments, increase business

activity with minority owned firms, and provide financial services in under serviced

areas. The Commission intends to keep this issue in the forefront and develop new

initiatives to attract minorities to the securities industry.

SUBCOMMITTEE RECESS

Senator GREGG. If there is nothing further, the subcommittee

will stand in recess.

[Whereupon, at 10:58 a.m., Tuesday, March 21, the subcommittee was recessed, to reconvene subject to the call of the Chair.]

(337)

DEPARTMENTS OF COMMERCE, JUSTICE, AND

STATE, THE JUDICIARY, AND RELATED

AGENCIES APPROPRIATIONS FOR FISCAL

YEAR 2001

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

DEPARTMENTAL 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 2001 budget request for programs within the subcommittee’s jurisdiction.]

THE JUDICIARY

PREPARED STATEMENT OF JOHN G. HEYBURN, II, CHAIRMAN, COMMITTEE ON THE

BUDGET, JUDICIAL CONFERENCE OF THE UNITED STATES

INTRODUCTION

Mr. Chairman and Members of the Subcommittee, I want to thank you for giving

me the opportunity to testify on the judiciary’s fiscal year 2001 budget request. It

is a pleasure to return for my fourth appearance before you and the other members

of the subcommittee.

With me today are Judge Robert C. Broomfield of the United States District Court

for the District of Arizona, who is also a member of the Budget Committee; Leonidas

Ralph Mecham, Director of the Administrative Office of the United States Courts,

and a member of the Judicial Conference Executive Committee; and Judge Fern

Smith, the Director of the Federal Judicial Center, who is appearing before you for

the first time. Last year the Chief Justice and Board of the Federal Judicial Center

selected her to succeed Judge Zobel as Center Director. Judge Smith has been a federal district judge since 1988.

Before addressing our fiscal year 2001 request, I would like to first express my

sincere appreciation to you, Mr. Chairman, the Members of the Subcommittee, and

your dedicated staff, for the thoughtful consideration you have given the judiciary’s

budget requests and other needs throughout the year.

BUDGET OVERVIEW

The judiciary’s fiscal year 2001 budget is a very modest request considering rising

caseloads. We request a $363 million increase in obligations, or 8.5 percent over the

fiscal year 2000 level. The majority of the request ($258 million or 6.0 percent)

funds base adjustments to continue current operations. The remainder ($105 million

or 2.5 percent) would provide some additional resources to courts experiencing workload increases, especially those on the southwest border, which are in a crisis situation. A detailed explanation of our fiscal year 2001 request is included as an Appendix.

The courts have experienced a dramatic increase in overall workload, particularly

in the criminal area over the last four years.

—Criminal filings increased 28 percent;
338

—Criminal defendants filed increased 23 percent;

—Criminal Justice Act representations increased 21 percent;

—Pretrial services reports to the courts increased 24 percent; and

—Offenders under supervised release increased by 12 percent.

However, as the following chart indicates, because of funding constraints, funded

court support staff required to handle this tremendous growth in workload has actually declined during this period. At a time when Congress continues to provide more

resources to the Department of Justice, overall funded court staff are declining by

3 percent from 20,732 work units in fiscal year 1998 to 20,092 in fiscal year 2000.

For fiscal year 2001, we are asking Congress to provide for a funded court support

staffing level of 21,681. This is only 5 percent above fiscal year 1998 funded levels,

a very modest increase when compared to the 28 percent increase in criminal filings. The majority of the staffing increase is for probation and pretrial services officers to handle the growing criminal workload, especially on the southwest border.

SOUTHWEST BORDER CRISIS

We need additional funding for all courts experiencing growing workloads. Those

funds are most needed along the southwest border. The districts of Arizona, California Southern, New Mexico, Texas Western, and Texas Southern have experienced

an explosion of criminal workload over the past few years. These increases are attributed to increases in law enforcement resources at the border. Over the last five

years, the number of border patrol agents increased by 99 percent; INS agents, 93

percent; and DEA agents, 155 percent.

Not surprisingly during that time period, the criminal caseload in the five border

districts, mostly drug and immigration cases, has exploded, increasing by 122 percent. Criminal case filings in these border courts, as a percentage of total criminal

cases filed, have steadily increased each year from 16 percent of the national total,

to the current level of 27 percent. As the following chart indicates, total criminal

case filings in the five border courts have more than doubled, from 7,280 to 16,180.
339

The workload on the southwest border is directly affected by increases in the resources of the Department of Justice (DOJ). For fiscal year 2001, DOJ has requested

even more FBI, DEA, and INS personnel, as well as a 3 percent increase in U.S.

Attorney staff. Even if Congress provides DOJ with no additional increases in personnel, the workload will still remain at extraordinarily high levels in the courts

along the border.

Because of limited funding availability, overall funded staffing levels declined in

the last two years. Nevertheless the Judicial Conference took unprecedented steps

to recognize the dramatic and disproportionate increase in workload along the

southwest border. For the past two years, we have made across-the-board cuts to

nationwide court allotments in order to provide some immediate, albeit partial, relief to these five border districts and other courts with extraordinary workload

growth.

These staff increases for the border districts were not without cost. During the

period when funded staff for the southwest border courts grew by 11 percent, the

remaining courts throughout the country had to operate with a 4 percent reduction

in funded staff. I would note that total workload outside the southwest border was

not declining—there was a 12 percent increase in criminal caseload during this

time. Some districts experienced much more dramatic increases. For example, criminal filings in Utah increased 84 percent, Illinois Southern increased 82 percent,

Iowa increased 49 percent and Kentucky Eastern increased 33 percent. Our judicial

system cannot continue to operate effectively by ‘‘robbing Peter to pay Paul’’, particularly where doing so does not fully address Paul’s needs.

Over the past several years the Congress has chosen to make enforcement of our

drug and immigration laws a high priority. The law enforcement personnel you have

funded are doing their jobs as evidenced by the explosion in the criminal caseload.

We now have an imbalance in the system that only Congress can address.

The long-term solution is to fully fund the judiciary’s modest budget request for

fiscal year 2001. Under our system of distributing funds to the courts according to

work measurement formulas, a fully funded budget will direct available resources

to the southwest border courts, which are experiencing the greatest workload

growth. This will allow courts to staff up to a level that will:

—allow probation and pretrial services officers to adequately supervise federal offenders and defendants, including conducting substance abuse screening, and

prepare thorough reports that form the basis for federal sentencing. Along the

southwest border, probation officers have reduced their supervision of criminal

felons released from prison in order to write the presentence reports required
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for criminal trials. Presentence defendants are being supervised by telephone

rather than personal visits because of the crushing workload.

—decide civil and bankruptcy cases in a more timely manner. In civil cases there

has been a 12 percent increase in the median time from filing to disposition

over the last few years.

—avoid delays that result in increased costs for private citizens and the government.

U.S. Marshals

Another serious problem along the southwest border is the shortage of deputy

U.S. marshals and detention space. While these resources are not part of our budget

request, we know that the Department of Justice is requesting a modest eight percent increase for the Marshals Service and a 13.8 percent increase for federal prisoner detention. I would ask that you give that request every consideration.

We are concerned about the level of security on the southwest border. In many

instances you will find a group of 10 or 12 prisoners being escorted into a courtroom

by 1 or 2 deputy marshals. This is a tragedy waiting to happen. The marshals in

these districts must be provided additional resources.

In addition, the lack of adequate space is creating considerable problems for the

marshals, our probation and pretrial services officers, and federal defenders. The

lack of space is resulting in the release of some individuals awaiting trial who might

otherwise be detained. This jeopardizes public safety. Those who are detained are

often placed in facilities hundreds of miles away, creating access problems for attorneys and security and transportation problems for the marshals. Additional detention space, closer to the courts, is sorely needed.

DEFENDER SERVICES

Resource needs in defender services are directly related to criminal filings and

dramatic workload increases, especially along the southwest border, apply to this account as well. The defender services appropriation fiscal year 2001 requested increase of 9 percent in obligations is consistent with the 9 percent increase requested

in the salaries and expenses account.

In addition to the $16 million in inflationary increases for salaries and expenses,

a $10 million net increase is needed to handle a workload increase of 3,700 representations. This increase is partially offset by a projected reduction in the average

annual cost-per-representation due to a change in the overall case mix, which will

result from a higher number of less expensive immigration cases.

A critical component of the defender services request is $11 million to increase

the hourly rates paid to private panel attorneys from $70 per hour for in-court time

and $50 per hour for out-of-court time to $75 per hour for both in and out-of-court

time. This $75 per hour rate was authorized fourteen years ago. While we appreciate the $5 per hour rate increase that Congress approved for fiscal year 2000, it

is only the second such increase in fifteen years. Despite your good efforts, I am

compelled to point out that the current rates still do not even cover average overhead costs for a lawyer.

The urgent need for this rate increase is evidenced by the statement of Chief Justice William H. Rehnquist, who for the second year in a row, is raising the issue

in his Year-End Report on the Federal Judiciary. In the 1999 Year-End Report, the

Chief Justice states, ‘‘Inadequate compensation for panel attorneys is seriously hampering the ability of courts to recruit and retain qualified panel attorneys to provide

effective representation.’’ The Chief Justice ‘‘* * * respectfully ask(s) Congress to

make adequate compensation for panel attorneys a high priority, and to fund the

Defender Services appropriation at a level sufficient to pay the $75 rate.’’ I am here

to emphasize that request.

COURT SECURITY

Providing adequate security for all citizens who enter courthouses is of utmost

concern to the judiciary. The fiscal year 2001 request includes a seven percent increase for court security. In addition to inflationary increases, $2.3 million is requested for 72 additional court security officers, primarily for new or renovated facilities; $2.3 million is requested to replace outdated security systems and equipment; and $3.9 million is requested for the first year of a four-year program to acquire narrowband capable digital radios, as mandated by the National Telecommunications and Information Administration Organization Act.
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COST CONTAINMENT

As you know, Mr. Chairman and members of the subcommittee, the judiciary

takes very seriously its responsibilities to use the resources Congress provides in the

most efficient manner possible. For the last several years we have undertaken a judiciary-wide effort to find ways of doing more with less. The Optimal Utilization of

Judicial Resources Report that we sent to your subcommittee in February is a compilation of our initiatives. I would just like to summarize some of the major efforts

we have underway. —The use of technology has contributed significantly to the judiciary’s ability to

do more with less. The judiciary is following a multi-year plan to equip courtrooms with a variety of technologies, which can result in reduced trial time and

lower litigation costs. The distance learning program continues to expand

through the use of the Federal Judicial Television Network and video conferencing technology. —Containing rent costs of court facilities remains one of the judiciary’s highest

administrative priorities. A comprehensive management assessment of its space

and facilities program should be completed later this year. This independent review will evaluate the effectiveness and efficiency of the judiciary’s facilities

program and make recommendations for future facilities planning, budgeting,

and management. —In September, the judiciary completed a year-long study of the use of judicial

officer resources. The study identified ways to improve management of available

resources that might mitigate future requests for additional Article III judgeships. The recommendations include sharing information among courts and

chief judges, more effective use of visiting judges, and providing assistance to

courts with particularly high workloads.

CONTRIBUTIONS OF THE ADMINISTRATIVE OFFICE

The work of the Administrative Office of the United States Courts is critical to

the judiciary’s functioning effectively. The Director of the Administrative Office

serves as the chief administrative officer for the federal courts. The agency provides

a broad range of management, program, and administrative services to the courts.

It supports the Judicial Conference of the United States and its network of committees in determining judiciary policies, and it implements those policies on behalf of

the Conference.

An important Administrative Office responsibility is supporting, coordinating, and

implementing the Judicial Conference’s numerous efforts to reduce costs and manage resources most efficiently. The various cost containment efforts I just summarized, as well as all of those listed in the Optimal Utilization Report, are only possible because of the efforts of the Administrative Office. Without the Administrative

Office, the savings and cost avoidance initiatives of the judiciary would not have

materialized.

In the interest of continuous service improvement, the Administrative Office is

currently conducting or overseeing, in connection with Judicial Conference committees, an unprecedented number of strategic studies of judiciary programs and operations. In addition to the space study mentioned previously, an expert consulting

firm is considering the future information technology needs of the courts, how the

judiciary can take advantage of new technologies to meet these needs, and how the

judiciary can best organize and manage resources to carry out its information technology program.

An independent study of the court security program will consider whether there

are ways to provide adequate security to the judiciary more efficiently or effectively,

and outside experts will conduct a strategic assessment of the probation and pretrial

services system to make recommendations to ensure the future quality and success

of these important programs. Work measurement studies have been completed recently and the results are being used to develop new staffing formulas for the appellate, district, and bankruptcy courts, as well as probation and pretrial services offices.

The fiscal year 2001 budget request for the Administrative Office is a seven percent increase in obligations over this year, less than what is requested for the

courts. In addition to inflationary increases, $1.4 million is requested to bring the

Administrative Office back to the level of service funded in fiscal year 1999. In order

to devote as many resources as possible to continue staffing at the level necessary

to support the courts, last year the Administrative Office took sizeable cuts in critical non-personnel programs. Funding is needed for deferred contractual services in

support of core Administrative Office financial and information technology systems,

such as the Central Accounting System and Data Communications Network. In ad-
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dition, staffing will be restored to provide the courts with technical assistance in the

probation, pretrial services, and court administration programs. These staff will assist the courts in improving program operations.

I urge the Committee to fully fund the Administrative Office’s budget request. The

Administrative Office is not a ‘‘Washington headquarters’’ agency. It is integral to

the judiciary’s ability to do its core work. The judiciary could not continue to function effectively without the support provided by the Administrative Office. A very

modest increase in funding for the Administrative Office will ensure that the Administrative Office can continue to provide program leadership and administrative

support to the courts, and lead efforts for the courts to operate efficiently.

FEDERAL JUDICIAL CENTER

In 1999, the Center provided education to over 37,000 in the judicial system, and

over 90 percent of them used no travel funds. I want to recommend strongly that

the Subcommittee approve full funding of the Center request. It is only 7.8 percent

over the 2000 level and, if granted, would put the Center only slightly over its highwater mark early in the 1990s. The request is limited to the normal adjustments

to the base budget except that the Center is not even requesting inflationary adjustments for travel, and for eight positions to help provide education through the Federal Judicial Television Network, which the Center manages for the entire judicial

branch, and through the judicial branch’s intranet, the J-Net.

The work that the Center does is absolutely essential to the judicial system and

to the public. The Center’s expertise was key to the success of the recent conference

of federal judges along the Mexican border to search for solutions to the crisis in

their courts. We count on the Center to keep us informed of statutory developments,

and how the appellate courts are interpreting statutes, such as those governing prisoner litigation.

The Center, as Judge Smith can explain, is working closely with the U.S. Sentencing Commission to avoid duplication of effort while keeping judges and probation officers informed about guideline developments, including through jointly sponsored satellite broadcasts. As we get more cases with complicated scientific and

technical evidence, we rely on the Center to provide us the tools we need to help

manage this litigation.

Finally, the Center has long been a leader in helping courts adopt less expensive

alternatives to traditional litigation when appropriate, and is using its alternative

dispute resolution expertise to help implement the 1998 Alternative Dispute Resolution Act.

SENTENCING COMMISSION

Because the U.S. Sentencing Commission is not testifying before the subcommittee, I would like to say a few words in support of its appropriation request.

You may recall that throughout the appropriations process for fiscal year 2000,

there was substantial uncertainty as to the financial requirements of the Commission because there was a complete absence of voting commissioners. As a result, the

Commission’s budget was reduced to $8,468,000 for fiscal year 2000, an 11 percent

decrease from fiscal year 1999 and the lowest appropriation for the agency since fiscal year 1994. As I am sure you know, a full complement of seven voting commissioners was appointed in November 1999, and the agency is fully operational once

again.

The new commissioners face an extraordinarily heavy workload due to the extended absence of commissioners. During that period a significant backlog of crime

and sentencing related legislation accumulated that must be addressed by the Commission. These items cover a wide range of criminal conduct of great concern to Congress and others, including intellectual property infringement, sexual offenses

against children, firearms offenses, crimes committed by electronic means, and

methamphetamine trafficking offenses. The newly minted Commission has made addressing these items its first priority, however it is severely hampered by staffing

shortages that have gone unaddressed. A de facto hiring freeze instituted during the

absence of commissioners, coupled with the agency’s normal attrition rate, has reduced the current staffing levels by 20 percent from that of fiscal year 1998.

With this background in mind, the Commission requests funding of $10,600,000

for fiscal year 2001, the same as requested last year. The Commission requests adequate funding merely to restore its staffing and operations back to a level that approximates fiscal year 1998, the last year in which it had a fully functioning Commission. Without these additional resources, the Commission and its staff will be

unable to respond adequately to all of its statutory responsibilities.
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JUDGES’ COLA

I wanted to touch very briefly on the issue of cost of living adjustments (COLA)

because I know it is one that will be addressed by the congressional leadership. We

are grateful that Congress approved a COLA for 2000 for Members of Congress, senior executive branch officials, and judges. The Judicial Conference strongly endorsed

a COLA for 2000 and continues to support one for 2001. We are hopeful that Congress will allow the mechanisms of the 1989 Ethics Reform Act to work, and that

all top government officials will be provided a COLA in fiscal year 2001.

It is important that such a pay adjustment be allowed to occur. The judiciary is

deeply concerned about the growing disparity in pay between the federal and private sectors. Recent media reports indicate that on the east and west coasts, top

law school graduates can almost immediately earn salaries comparable to the pay

of members of Congress and district judges, and that many lawyers no more than

several years out of law school can find jobs with successful law firms at salaries

higher than the Speaker of the House and Chief Justice. The upward trajectory of

associates’ salaries reflects increasing competition among businesses for the best

and the brightest. This past fall, the Congressional Budget Office concluded that the

pay and benefits of members of Congress, judges, cabinet officers, and members of

the Senior Executive Service are less generous than those of executives at large and

medium sized private firms. If the pay gap between the federal government and

other employers continues to widen, the judiciary and the political branches may

find that they are unable to compete for the most talented individuals.

CERTIFYING OFFICER

There is one final issue I would like to address before concluding my remarks.

It is not a funding issue, but rather a substantive issue that affects the way the

judiciary manages its resources. In our budget request, we have included as a general provision, statutory language that provides court personnel the authority to

manage their fiduciary responsibilities in the same way as the Executive Branch.

Under current law the clerk of the district court, as disbursing officer, is personally liable for the propriety of payments made for all the court units in the judiciary.

However, since the district clerk is the only person now liable for the propriety of

payments, all paperwork for all payments must be forwarded to the district clerk.

This is very inefficient. With the legislative change that we are proposing, other key

officials in the courts can become certifying officers. This is necessary because with

budget decentralization and the new accounting system that is being implemented

nationwide, each court unit head (e.g., bankruptcy clerk, chief probation officer, circuit librarian) will have the ability to make his or her own payments. These officials

would certify and be held liable for payments being proper in their respective offices,

just as the district clerk is now. This authority will eliminate a substantial volume

of paperwork that otherwise has to be forwarded to the district clerk for each payment.

CONCLUSION

Mr. Chairman and members of the subcommittee, this concludes my statement.

I would be pleased to respond to any questions you may have.

APPENDIX

SUMMARY

The fiscal year 2001 appropriation request for the Courts of Appeals, District

Courts and Other Judicial Services totals $4,217,821,000, an increase of

$452,075,000 over our fiscal year 2000 appropriation level. In addition to appropriated funds, the judiciary utilizes other funding sources to supplement our appropriations. Included in these sources of funding are fee collections, carry forward of

fee balances from prior years, and the use of no-year funds. When all sources of

funds are considered, the increase in obligations for fiscal year 2001 is only

$355,878,000 or 8.7 percent.

Of the $355,878,000 increase in obligations, 72 percent ($256,922,000) is adjustments to the fiscal year 2000 base primarily associated with inflation, pay increases

and GSA rental payment increases. The remaining 28 percent ($98,956,000) is needed to respond to increased to requirements for security, magistrate judges, federal

defender offices, and to fund additional court staff required to process growing workload. The request for the principal programs are summarized below.
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SALARIES AND EXPENSES

The salaries and expenses of circuit, district, and bankruptcy courts and probation

and pretrial services offices account for most of our request. A total of

$3,712,374,000 is required for this activity, $306,535,000 over fiscal year 2000 estimated obligations. Funding totaling $211,078,000 is expected to be available from

other sources including fee collections and carry forward balances to offset the S&E

requirement. This leaves an appropriation need of $3,501,296,000, of which

$2,602,000 is to be derived from the Vaccine Injury Trust Fund. Over 71 percent of the $306,535,000 increase ($216,644,000) is needed to fund adjustments to the fiscal year 2000 base for pay increases for courts support staff

($118,967,000); pay increases for judicial officers ($22,414,000); GSA space rental

costs ($63,216,000); inflationary increases for operating costs ($10,718,000); information technology increases ($13,062,000); and reductions in non-recurring costs

(¥$11,733,000).

The remaining 29 percent ($89,891,000) will fund 9 additional magistrate judges and their staff ($3,764,000); 1,255 FTEs to return court staffing to fiscal year 1999

service levels ($82,670,000); and space alterations required to install courtroom technologies ($3,457,000). The additional magistrate judges are needed to provide an effective, yet less costly, way of providing help to Article III judges to handle the

growing volume of civil and criminal cases facing the courts. The additional court

staff will allow the courts, particularly probation and pretrial offices, to process the

courts’ growing workload. The alteration funds will allow courtroom technologies

equipment to be installed in existing courtrooms.

DEFENDER SERVICES

A total of $444,068,000 is required for the Defender Services program to provide

representation for indigent criminal defendants in fiscal year 2001. Of this amount,

$440,351,000 is requested in direct appropriations, and $3,717,000 is expected to

carry forward from fiscal year 2000. The total requirements for fiscal year 2001 are

$37,086,000 or nine percent over the fiscal year 2000 projected obligations of

$406,982,000.

Most of the increase ($36,486,000) is needed for adjustments to the fiscal year

2000 base for inflationary and workload increases. Included in these adjustments is

an increase of the non-capital hourly panel attorney rate to $75 for all districts beginning April 1, 2001. Also included is a $9,700,000 net increase associated with a

workload increase of 3,700 additional representations in fiscal year 2001. The remaining increase ($600,000) will fund the start up costs of two new federal

defender organizations. The Congress and the Judicial Conference have urged the

judiciary to establish more federal defender organizations as an alternative to using

panel attorneys in districts where this would be appropriate.

FEES OF JURORS AND COMMISSIONERS

For the Fees of Jurors program, a total of $60,821,000 is required. The total re- quirement for fiscal year 2001 is $2,179,000 lower than the estimated fiscal year

2000 obligations. This reduction is the result of a projected decrease in juror days.

COURT SECURITY

For the Court Security program, a total of $215,353,000 is required. This is a $14,436,000 increase over estimated fiscal year 2000 obligations. Adjustments to

base include increases of $5,971,000 for inflationary and contractual cost increases;

funding to annualize the costs for 120 new court security officers (CSOs) partially

funded in fiscal year 2000; increased hourly rate payable to CSOs; and a reduction

for non-recurring fiscal year 2000 equipment expenditures.

The remaining increase of $8,465,000 includes funding 72 additional CSOs to provide a security presence in existing, new and renovated facilities housing a full-time

judicial officer ($2,267,000); providing narrowband capable digital radios

($3,910,000); and upgrading security systems and equipment at probation and pretrial offices ($2,288,000).

PREPARED STATEMENT OF LEONIDAS RALPH MECHAM, DIRECTOR, ADMINISTRATIVE

OFFICE OF THE U.S. COURTS

INTRODUCTION

Mr. Chairman and Members of the Subcommittee, it is an honor to once again

testify before you on the budget requirements for the Administrative Office of the
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U.S. Courts (AO). Chairman Gregg, it has been a privilege to work with you, Mr.

Hollings and all of the members of this subcommittee.

I would like to take a moment to recognize the excellent staff work you receive

on this subcommittee. While your staff does keep us on our toes, their questions and

suggestions are always well thought out, appropriate and appreciated. I believe we

have benefitted from their scrutiny and hopefully the budget products we have developed in turn have assisted you as well.

I would also like to thank you for your efforts to provide an increase to the AO

for fiscal year 2000. Although modest in size, given the fiscal difficulties that you

faced last year we fared much better than many agencies and for that I am appreciative. I know administrative functions are easy targets in times of fiscal constraint. The fact that you saw fit to increase the budget of the AO indicates that

you recognize that our role is vital to the operations of the entire judiciary.

60TH ANNIVERSARY

1999 marked the 60th anniversary of the AO and gave us an opportunity to reflect on how the role of the AO has changed over this relatively brief period of time

in our history. From its beginnings where it provided services to a population of approximately 2,500 to one that now numbers more than 30,000, the AO stands beside

the courts to provide necessary resources and program support to fulfill its critical

mission. Sixty years after its origin, the AO has become a model for foreign judicial

systems wishing to establish their own administrative support system.

The AO was created in 1939 to eliminate the separation of power issues raised

by the Department of Justice’s handling the judiciary’s administrative needs. Sixty

years later, judicial independence and service continues to be the guiding principles

that govern and influence AO operations. Whether launching a new accounting system or developing the latest spending plan, we remain focused on ensuring that the

judiciary is equipped to perform its proper and necessary role in our system of government.

ADMINISTRATIVE OFFICE BUDGET REQUEST

The AO’s request for fiscal year 2001 totals $71,350,00 in direct obligations. This represents an increase of $4,924,000 or approximately 7 percent over anticipated fiscal year 2000 direct obligations. The AO’s budget request for fiscal year 2001 essentially provides for current services with modest increases to restore AO operations

to its fiscal year 1999 levels. This is consistent with the funding request for the

courts and will allow the AO to keep up with its ever increasing workload. Eighty

percent of the requested increase is necessary to fund uncontrollable adjustments

to base such as pay and benefit increases and inflationary changes. Although we are

grateful that you were able to provide the AO a modest increase for fiscal year 2000,

the increase was not sufficient to fully fund program operations at their continuing

service level.

Much of the increase requested will be devoted to improving the services provided

to the courts. We will provide more technical support to probation and pretrial services programs, court administration programs, and the development of automated

systems which support court administrative functions. We will focus on conducting

program and efficiency reviews that will assist the courts in areas such as securing

witness protection materials; electronic monitoring; creating pretrial services offices

in the courts; developing new case management programs and systems; improving

financial management; and developing strengthened contracting procedures and regulations.

SOUTHWEST BORDER

The AO’s role in the judiciary does not stop at administrative support. We are affected by everything that impacts the courts. For example, the tremendous workload

increase in districts along the southwest border that you have been hearing so much

about, and will continue to hear much about, has also had an impact on the AO’s

workload. It falls on the AO to try to stay ahead of the curve and assess and—to

the extent we can—lessen the havoc created in the courts. No office within the AO

is immune from involvement. Our Statistics Division must make a special effort to

keep track of the new U.S. attorneys that are added to the border districts so that

they can predict how many additional cases will be brought and when we should

expect to see them. The people in finance must carefully review the judiciary’s financial situation and develop a way to provide these areas with financial resources

to assist with the crisis while at the same time balancing the needs of the other

89 judicial districts, most of whom are also seeing workload increases. Our court

services section has had to come up with ways to help in the short term by devel-
346

oping and managing a system that would allow judiciary staff from other districts

to take short-term assignments in these districts to ease some of the workload burden while it tries to find long-term solutions. And our judges program has come up

with ways to assist the judges by taking advantage of technology and having judges

in other districts handle some cases through videoconferencing or through visiting

arrangements.

This is just an example of how the AO must be responsive to judiciary concerns.

It is an agency-wide effort, but it drains resources from what is already a staff that

is stretched very thin from years of increasing workload without commensurate increases in staff.

AO RESPONSIBILITIES

One of the primary responsibilities of the AO is to provide staff support and counsel to the judicial conference and its committees. In addition, the AO provides a

broad range of legislative, legal, management, administrative, and program support

services for the federal courts. We are responsible for collecting data and preparing

over 100 different statistical tables. In addition to developing the judiciary’s budget

request and national financial plan we assist almost 400 court units with developing

and executing their individual spending plans. We process all personnel and payroll

actions—almost 400,000 in 1999 alone—and manage the benefit program for over

30,000 judiciary employees. We are engaged in several major studies designed to improve court operations. We are responsible for all national automation applications

and manage the development of new ones, which may number 15 or more at any

one time. We inform, educate and audit the courts on judicial conference policies

and other operating procedures.

I am fortunate to have a staff of hardworking people who are dedicated to the

role of the judiciary in our system of government. However, we do all of the work

I mention, and a tremendous amount more, with a modest amount of people. The

consequence is that a vast amount of knowledge on specific judiciary topics is vested, in many cases, in only one individual. This situation keeps us holding our breath

and hoping retirements or lucrative offers from outside the AO do not rob the AO

of its knowledge base. This point is made clear in the following chart, which shows

how the AO’s resources, both funding and staffing, have been declining for the past

three years, with our 2001 request reflecting a 10 year low.

The AO continues to be a model of efficiency, when compared to other administrative support organizations. AO staffing as a percentage of judiciary staffing is less
347

than 3 percent, while the staff in the Department of Justice’s Management and Administration accounts represents more than 5 percent of DOJ total staff.

ACCOMPLISHMENTS

For the past several years, the funding received by the judiciary has not allowed

the courts to grow to the level required to keep pace with their increasing workload.

Because of this, the AO has been increasingly called upon to help in developing new

systems and programs for the courts that will allow them to continue to provide

quality services in spite of the fact that workload increases faster than resources.

The AO is continuing to work at improving services to the courts and to the public.

The federal judiciary accomplishes its constitutional mission with a small portion

of the nation’s budget and resources, less than two-tenths of 1 percent. Increasingly

tight funding demands have required the AO to make more efficient use of existing

resources. By taking advantage of new technologies, improving communication, and

placing increased emphasis on long range planning and budgeting, the AO continues

to be innovative in providing support services to the judiciary. I would like to take

a few minutes to describe some of our accomplishments as well as some ongoing activities and efficiency efforts that the AO has coordinated. Additional examples of

our economy and efficiency efforts is contained in our annual report entitled ‘‘Optimal Utilization of Judicial Resources.’’

Resource Management

The constrained funding the judiciary has experienced over the past several years

has strengthened our resolve to take a longer-term view of our resource needs and

to consider the future impact of today’s financial and programmatic decisions. The

AO is spearheading a number of initiatives that focus on ensuring that our future

programs achieve the judiciary’s goals in a cost-effective way.

Long-Range Planning and Budgeting.—The AO has been working with Judicial

Conference committees to strengthen the connections between program planning

and budgeting to identify strategic planning issues, and to analyze their future impact on the Judiciary’s mission, operations, and resource needs. In February 1999,

the Conference’s Executive Committee established a new long-range planning group,

made up of Conference committee chairs, to consider planning needs and issues. The

group meets semi-annually. Topics covered in the 1999 sessions included assessing

past and future trends in the judiciary’s workload, budget, and personnel.

AO staff are assisting the Conference committees with identifying strategic issues

and identifying and analyzing possible courses of action in order to recommend new

approaches and policies. Strategic issues will be addressed within the context of the

judiciary’s core values and mission in addition to considering economy and efficiency.

Work Measurement Initiative.—For twenty years, funding needs for court support

staff have been determined based upon staffing formulas. These formulas provide

an objective means to consider workload factors, such as the number of cases filed,

and equitably determine the amount of staff funding needed in each district. While

the current formulas, which were developed in the early 1990s, have worked very

well in determining the staffing resource increases or decreases needed from year

to year, they have become outdated and do not address the impact changing times

have had on staffing needs.

Under the overall leadership of the Judicial Conference Committee on Judicial Resources, the AO is updating the formulas. New staffing formulas for allotting funds

to the courts are being developed that will reflect new work requirements, the impact of technology, and changes in work processes that have been implemented in

recent years. After the new formulas are completed, work changes and resource requirements will continue to be studied so that formulas can be revised regularly to

reflect new work or operational changes.

Financial Management Improvement Program (FMIP).—In 1999, the AO introduced the FMIP. This program is aimed at: elevating the overall financial skills

level of AO and court personnel; providing an ongoing training program for the

courts in appropriations law, budget decentralization, and internal controls; designing financial process improvements and assisting the courts in implementing them;

modernized automated financial systems such as our new accounting system and

the Criminal Justice Act payment system replacement; and, updating and maintaining financial policies contained in the Guide to Judiciary Policies and Procedures.

Major Studies

The AO is committed to developing, refining, and providing the best possible support to court programs. Agency staff were engaged in several major studies in 1999

aimed at improving court operations. Although the studies themselves are being
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performed by outside contractors, a lot of AO staff resources are required in the development and awarding of the contract, as well as providing information to and

working as a liaison between the contractors and the courts. I am confident that

the results of these studies will be better service to the courts and the taxpayers.

Space and Facilities.—In 1999, the AO contracted with Ernst & Young to conduct

a comprehensive program and management assessment of the judiciary’s space and

facilities program. The main purpose of this study is to evaluate and develop recommendations on the effectiveness and efficiency of the space and facilities program. The study will address: organizational relationships, roles and authorities;

long-range planning process; courtroom needs; U.S. court design guidelines; facilities

management policies; and, funding and budget mechanisms. Ernst & Young will recommend strategies for achieving program objectives, improving processes, and containing costs.

Probation and Pretrial Services.—The AO has received proposals from a number

of outside contractors in our efforts to conduct a comprehensive assessment of the

probation and pretrial services system. The assessment will address a number of

important issues raised by a confluence of increasing responsibilities, changing federal criminal populations, and constrained budgets. The broadest issue is whether

there are ways to accomplish the system mission more effectively through changes

in functions, policies, management systems, processes, organization, assignment of

responsibilities, resources, operational approaches, statutes, or regulations.

Information Technology Program.—The AO also is involved in a study to assist

the judiciary’s rapidly expanding information technology program. The assessment

will focus on: the judiciary’s short and long-range information technology needs and

objectives; projected changes and enhancements in information technology in the

marketplace and how best to position the judiciary’s information technology program to take advantage of new technologies to meet current and future requirements; and, alternatives for organizing and managing resources to carry out the judiciary’s information technology program effectively.

Court Security.—Meeting the security needs of the judiciary is a vital but increasingly costly requirement. Although it comprises slightly less than 5 percent of total

judiciary expenditures, court security has been the fastest growing component of the

judiciary’s budget. The AO contracted for an independent assessment of how security services are provided to the judiciary. The study will review: exterior and interior physical security of federal courthouses and multi-tenant facilities; the need for

after-hours or 24-hour security coverage; courtroom security during civil and criminal proceedings; the court security officer program, including contract administration, staffing formulas, and wage determination procedures; alternative approaches

of providing guard services; and the need for background checks on judiciary employees.

The proposed study will determine if there are alternative ways to provide adequate security to the judiciary more efficiently and more effectively.

Training Needs.—In 1998, the AO, Federal Judicial Center and U.S. Sentencing

Commission jointly contracted with a private consulting firm to assess training

needs for the judiciary and AO employees. The contractor is analyzing, documenting

and prioritizing training needs, and it is preparing a training plan that will serve

as a road map for the development of future training programs. The final training

plan and a comprehensive report will be presented to the Committee on Judicial Resources for consideration in June 2000. This is the first comprehensive study of

training needs undertaken by the judiciary.

Communication Improvement—Use of Technology

As court responsibilities and caseload expand, the growth rate of the AO has not

kept pace with the judiciary as a whole. This has forced us to identify creative and

at times non-traditional approaches to work and to strengthen existing lines of communication with the courts and the public through a variety of media, as well as

reaching out through informational and training programs.

J-Net.—For internal communications, the judiciary uses an ‘‘intranet’’. The AO

maintains a site on this intranet, called the ‘‘J-Net’’, which is helping to achieve savings in paper and postage costs as it disseminates greater amounts of information

in place of paper documents. The site is visited more than 5,000 times weekly by

judiciary employees looking for reports, statistics, manuals, and other documents.

More than 140 court units now have some type of information published on the JNet, which was redesigned in 1999 to provide easier access to court information.

Internet.—The AO manages and coordinates policies and procedures related to

Internet access. Dissemination of court information to the public via the Internet

saves time and money. Many courts receive fewer calls regarding office hours, directions to the court house, and questions concerning local rules. The judiciary also
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uses the Internet for research and acquisition activities. The AO also maintains an

Internet site which contains statistical information, proposed changes to the federal

rules, employment information and more.

FJTN—Training and Education.—The Federal Judicial Television Network

(FJTN) is the judiciary’s nationwide broadcast network. The FJTN currently broadcasts to approximately 270 court locations and will eventually be available in 285

locations. The FJTN became an integral part of the judiciary’s training efforts in

1999 through its distance-learning programs. One of the greatest benefits of the network is the ability to reach a multitude of sites. Live broadcasts also are using

‘‘push-to-talk’’ capability, which allows viewers to ask questions during the broadcast.

AO staff are converting training programs traditionally offered in a classroom setting to a format using the television network. The FJTN has allowed the AO to deliver high-quality training programs to a larger audience at reduced costs compared

to traditional classroom instruction. The AO now broadcasts over 80 hours of live

and taped educational and information programming per month to sites throughout

the judiciary. Our partners, the Federal Judicial Center and the U.S. Sentencing

Commission, combine to broadcast an additional 50 hours per month. Recent programs that have been broadcast include: Federal Retirement Benefits for Court Personnel; Security for Judiciary Computer Users; Introduction to Case Management

and Electronic Case Filing; and Pretrial Services Investigations and Reports Training.

CONCLUSION

Mr. Chairman and members of the subcommittee, I hope I have met my goal of

impressing on you the wide array of responsibilities vested in the AO. Our role goes

far beyond administrative support. Although we are not a headquarters office, we

must be knowledgeable of all of the judiciary’s operations. For every issue that affects the judiciary, every new piece of legislation that expands federal jurisdiction,

every Administration initiative that impacts federal law enforcement, every congressional request for information, there is some person at the AO who must quickly

master the subject and render expert advice. I am proud of our record of accomplishment and service to the courts and the American public. I plan on doing everything

in my power to continue not only to this by granting the modest increase I am seeking for fiscal year 2001.

PREPARED STATEMENT OF HON. FERN M. SMITH, DIRECTOR, FEDERAL JUDICIAL

CENTER

Mr. Chairman and Members of the Subcommittee: My name is Fern Smith. I have

been a U.S. district judge since 1988 and director of the Federal Judicial Center

since July 1999, following my selection by the Center Board to succeed Judge Rya

Zobel.

The Center is grateful for the 1.2 percent increase it received this year, especially

in light of the tight circumstances confronting you.

This statement summarizes our 2001 request and then describes our work in

these areas:

1. Using distance learning technology to provide education to the federal courts.

2. Helping the southwestern border courts and other courts develop education to

attack critical problems.

3. Helping judges implement statutes on prisoner litigation and other matters.

4. Analyses of federal court structure and procedures.

5. Cooperation and coordination with the U.S. Sentencing Commission.

6. Education and research to implement ADR programs.

7. Helping courts manage complex scientific and technical lawsuits and other aspects of modern federal litigation.

2001 REQUEST: TO ENHANCE EDUCATIONAL TECHNOLOGY

We request an appropriation of $19,337,000, a 7.5 percent increase in obligations

for adjustments to base and for eight automation and video positions in order to expand the reach of our training programs through greater use of educational technology. Granting the full 7.5 percent increase would produce a 2001 appropriation

just 2 percent over the Center’s 1992 appropriation, the highest granted to date. The

eight positions we request are the same positions that Judge Zobel sought last year.
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1The Center’s 2001 request was unanimously approved by the Center Board, which the Chief

Justice chairs. I have also discussed our request with the Judicial Conference’s Committee on

the Budget, the Administrative Office, and with the Sentencing Commission. A joint Judicial

Center-Administrative Office committee was created several years ago to coordinate plans and

avoid duplication or even its appearance.

I have reviewed the request closely to assure myself that the request is responsible

and well-grounded.1

We request no increase in travel funds—no programmatic increase and not even

the standard inflationary increase. We anticipate Center travel spending in 2000 to

be 40 percent, or $2.1 million, less than in 1995. Likewise, the number of participants in our travel-based programs continues to decrease—by roughly a third since

1995.

Although our spending for travel-based education has declined sharply, our training population is increasing. FTEs in the courts have increased by 15 percent since

1995, and the courts are seeking funds in 2001 for 1,255 additional, much needed

court staff. Personnel hired pursuant to these requests, particularly the almost 700

probation and pretrial services officers, will need FJC orientation training and then

continuing education throughout their careers. Furthermore, as explained throughout my statement, the courts’ training needs are themselves becoming more complex

because the work of the courts is becoming more complex.

We are thoroughly committed to distance education for the great bulk of our

training: Over 90 percent of the participants in Center training use little or no travel. But distance education still requires resources, including personnel sufficient to

do the job.

Four of the eight positions we request are to rebuild our video staff, which operates the Federal Judicial Television Network (the FJTN) and produces educational

videos. The FJTN began broadcasting in 1998; last year it broadcast over 1,400

hours. The Center video staff operates the FJTN teletraining studio, which we built,

programs the transmission to the satellite uplink, and produces and disseminates

the monthly broadcast schedule. We manage the network not just for Center broadcasts (including those we produce with the Sentencing Commission) but also for

those of the Administrative Office, allowing operational efficiencies and saving resources elsewhere in the judicial branch.

However, even with the major responsibility of running the network for the third

branch, our video staff must continue to design, film, and edit the educational videos

that increasingly make up parts of the Center’s FJTN broadcasts. It must also continue to produce videos essential for our judicial orientation programs and for court

use in local educational seminars.

Operating the network and continuing to produce educational videos have imposed a serious strain because we have been able to increase our video staff only

by one and a half positions, extracted from other personnel sources. Four additional

positions will allow us to update our judicial orientation videos, some of which are

almost ten years old, meet demands for additional videos, and consider broadening

the FJTN broadcast day to accommodate the western time zones.

We also request four positions to expand other Center technology-based educational services. Satellite broadcasts, while important, are only one of the non-travel education technologies now used for education in both government and business.

The four automation positions we request will let us expand the number of on-line

computer conferences we provide the courts, place more interactive training tools on

the J-Net (the federal judiciary’s internal intranet), convert to the web our training

tutorials that are now on CD–ROM and computer disc, and develop inventory, ordering, and distribution services for Center educational publications and videocassettes.

CENTER SERVICES AND ACTIVITIES

To help put our request in perspective, the rest of my statement describes the

range of Center services and activities, all of which promote a more efficient and

effective federal court system. By way of overview, in the 1999 calendar year, the

Center

—provided 906 educational programs for more than 37,000 federal judge and

court staff participants, either directly or through Center educational materials

used in courses arranged by individual courts and taught by court employees.

These are employees the Center has trained to lead the courses in addition to

their regular duties. The great majority of this education and training involved

little or no travel.
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—completed, primarily for committees of the U.S. Judicial Conference, 23 major

research and evaluation projects, continued work on 31 others, and responded

to many other requests for short-term research assistance.

—produced or updated 53 educational programs for live or videotaped satellite

broadcast or distribution on videocassette.

—broadcast more than 1,400 hours of educational and informational programs

from the Center and from the Administrative Office over the FJTN.

—completed 8 curriculum packages and training guides.

—answered some 2,000 information requests from judges, court staff, and others.

—hosted seminars or briefings for almost 430 judges and officials from some 70

countries.

A more detailed discussion of our activities follows.

Using distance learning technology to provide education to the federal courts

In 1999, over 90 percent of the participants in Center-sponsored educational programs, and in locally sponsored training events that employ Center materials and

services, used distance education methods, including satellite broadcasts. Distance

education saves time and money while meeting proliferating education and training

needs throughout the courts. Asynchronous distance education—that is, education

available on demand from the Web or videocassette—provides education when the

judge or court employee needs it to help resolve a new and special problem. As these

educational needs become more diverse, and as judges and staff become ever busier,

the importance and cost effectiveness of web-based training, manuals, and various

forms of video education becomes all the more apparent. We use numerous needs

assessment methods to determine how distance education can increase federal court

productivity and efficiency.

Federal Judicial Television Network

The FJTN has been operating for almost two years from Center-operated studios,

in the Thurgood Marshall Building, that now broadcast to over 270 federal court locations that the Administrative Office has equipped with satellite antennas. The

quality of FJTN operations testifies to the skill of the Center video staff, especially

given the strain I described above. The Center’s reputation has spread outside the

judicial branch. Representatives from the private and public sector (most recently

the Justice Department) have visited the Center’s FJTN operations to learn how to

develop similar satellite networks.

This month we will broadcast nine new programs and eight programs that were

broadcast in earlier months. These programs will be rebroadcast several times during the month so that judges and court staff can use them at times that suit their

schedules.

The Center’s programming on the FJTN enhances the knowledge and skills of

court personnel on subjects that are difficult to accommodate through traditional

methods, at least in the large numbers broadcast technology allows for. Center programs have helped many probation and pretrial services officers learn basic occupational Spanish, learn how to reduce the risk of recidivism by channeling defendants

and offenders to education and employment opportunities, and learn how to deal

with substance-abusing defendants and offenders by understanding the scientific

bases for dependency and their ramifications. One program, for example, featured

Dr. Alan Leschner of the National Institute on Drug Abuse describing Advances in

Drug Abuse and Addiction Research. An annual FJTN orientation for new federal

law clerks provides them consistent, nation-wide instruction on their ethical responsibilities and teaches them economy in drafting. Most of these programs are interactive, allowing users to participate in the programs through the ‘‘Push-to-Talk’’

microphone technology, as well as through faxes and call-ins.

Center FJTN broadcasts also help local court managers use training effectively.

Recent broadcasts have provided managers information on how to use the concept

of ‘‘competencies’’ in human resource management and court training and how to

use ‘‘structured on-the-job training’’ techniques.

The Center broadcasts its FJTN video magazine Court to Court several times a

year to inform court managers of economies devised by colleagues around the country. Court to Court was a finalist in the national ‘‘Telly Awards’’ competition for

non-network video programs, as was a Center program that explains judicial procedures to court interpreters.

We are replacing anecdotal information with better estimates of the viewership

of FJTN programs—original broadcasts, rebroadcasts, and those that court personnel tape for later viewing. Since July, we have conducted a sophisticated

viewership study designed by Center survey research experts using randomly selected samples of FJTN downlink sites. This project will yield data to help deter-
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mine the FJTN’s most economical uses. Once the project has yielded sufficient data

to merit reporting, we will gladly make them available.

Videoconferencing

The Center also makes extensive use of two-way videoconferencing for meetings

and for training programs for small numbers of participants. Since 1998, Center

personnel have managed over 100 videoconferences for the Center and a like number for the Administrative Office. The Sentencing Commission has also used this

service, as have some federal courts.

Web-based education

The Center is using its website extensively to provide education and information

to the courts and to promote access to our resources by the general public. In September 1998, the Center, in collaboration with the Administrative Office, produced

the first web-based interactive tutorial for the judicial branch. It helps court staff

prepare reimbursable work authorizations (RWAs) for facilities renovation, repair,

and building services. It is a multipart application with an on-line self-testing tutorial on all aspects of creating and managing an RWA as well as tools to create, file,

and archive them. We had earlier developed a tutorial to teach court personnel the

rules of civil procedure, and now also have a more extensive tutorial on the bankruptcy rules. In addition, through its website the Center sponsors moderated on-line

computer conferences—a form of asynchronous distance education—that participants join from their desks. We have sponsored 52 such conferences since 1997.

FJTN broadcast schedules, program descriptions, and written materials for some

programs are available on-line, often weeks before they are available in print. Many

Center publications and other educational products are on line.

We have recently redesigned our website to make it the most complete and accessible research and educational resource available to federal court personnel. Training specialists in courts throughout the country can use this site to take advantage

of the experiences of their colleagues in other courts and circuits. The site identifies

trainers in other courts who have dealt with particular problems and allows users

to pose questions to them, view other courts’ training events databases, and obtain

electronic copies of resource materials that others have developed. An operations exchange group lets managers and employees pose or answer questions or locate resources about court operational issues.

For the public, the Center’s Internet site includes 50 Center publications. Last

month we opened our Federal Judicial History website, which the Center developed

pursuant to its statutory mandate to conduct and encourage programs on the history of the federal courts. This electronic reference source about the development of

the federal judicial system is the most comprehensive such resource available in any

form, providing users ready answers to many of the most frequently asked questions

about the history of the federal courts. The biographical database of federal judges

is the first complete list of life-tenured judges who have served since 1789; its query

feature yields answers to many questions about those who have served on the federal bench and about the changes in the make up of the federal judiciary over its

200 year history and in more recent times. The Landmark Judicial Legislation section includes 21 of the most important statutes determining the organization and

administration of the judiciary, with essays describing congressional deliberations.

The site also lists all chairmen of the Senate and House Judiciary Committees since

1813.

Training products for in-court use

The Center makes available over 50 self-study guides, computer-assisted instructional programs, and ‘‘training packages’’ that it has designed for court managers

to use in building training into their human resource programs. In 1999, over

15,500 participants in locally sponsored programs used these resources, in-district

with no or minimal travel. A few examples of the subjects available for local court

education are: —a video-based program to help clerk’s office personnel understand how to assist

lawyers and the public without giving advice of a legal nature; —programs to help court managers and staff increase productivity through modern business practices of process improvement, quality service, and team-based

management; —training packages with desk references to help probation and pretrial services

officers make financial sanction recommendations and work with mentally-disturbed defendants and offenders;

—a computer-assisted training program on a Center-developed statistical model

that helps probation officers determine the likelihood of recidivism during an

offender’s term of supervision.
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Helping the southwestern border courts and other courts develop education to attack

critical problems

The Center provides judges and court managers the education and training resources they need to develop their own knowledge and skills in critical problem

areas, as well as develop the knowledge and skills of the court staff that report to

them. The Center works regularly with numerous advisory committees and ad hoc

planning groups to determine what judges and court personnel need and to provide

training programs, curriculum packages, video broadcasts and cassettes, and on-line

services that meet those needs in the most cost effective manner. Here are some

specific examples:

The Southwest Border Conference

Illegal immigration and drug importation have created a crisis in federal courts

along the Mexican border in the Fifth, Ninth, and Tenth Circuits. Last May, Fifth

Circuit Chief Judge Carolyn King asked the Center to help design a workshop

where federal judges in her circuit could learn from each other techniques to cope

with the extraordinary crush of litigation and to discuss candidly the costs and benefits of various measures that judges have developed. The workshop was expanded

to include the border district judges in the Ninth and Tenth Circuits and held last

month in Albuquerque, with a keynote address by Senator Domenici. As one judge

put it, this meeting let ‘‘the frontline soldiers in our war on border crime’’ share

ideas on how to deal, and how not to deal, with the changing contours of border

court problems.

This workshop was a coordinated effort by the judicial branch. The Administrative

Office arranged funding, and Center education experts worked with the planning

committees of judges of the three circuits to design a program of maximum benefit,

based on our experience in designing all manner of practical educational exchanges

for judges that save the courts both time and money.

Electronic case filing

As courts convert from paper to electronic filing, they must prepare the bar for

this change. At the request of one of the courts that is preparing to receive filings

electronically, the Center developed on-line tutorial, in collaboration with that court,

to show attorneys how to file pleadings and other case-related materials electronically. We are developing a similar tutorial in collaboration with a bankruptcy court.

Both tutorials will be available as templates for other district and bankruptcy

courts.

Helping bankruptcy courts’ public information functions

Many people who seek to use the bankruptcy process are unfamiliar with it, especially those not represented by counsel. Bankruptcy clerical personnel face substantial burdens in answering the questions posed by these potential users, many of

whom do not speak English. To help the bankruptcy courts’ clerical personnel, the

Center is creating a combined video-print information package in English and other

major languages that each bankruptcy court may use to provide much of the information that the court staff would otherwise have to provide on a person-by-person

basis.

Helping judges implement statutes on prisoner litigation and other matters

Educational programs are needed to help judges and court staff stay abreast of

both the responsibilities that Congress gives them and the evolution of case law interpreting that legislation.

Criminal cases and prisoner litigation

The 1996 Prison Litigation Reform Act and Anti-Terrorism and Effective Death

Penalty Act created new requirements for federal judges in reviewing lawsuits filed

by prisoners objecting to the conditions of their confinement as well as habeas corpus petitions filed by prisoners seeking review of their convictions. Also, Congress

has authorized the death penalty for a growing number of federal crimes, which has

created a complex set of procedural challenges to ensure a trial that is fair both to

the government and the defendant.

Starting with a pre-FJTN, 1996 satellite broadcast, the Center has made a major

effort to help judges and court staff with the effective management of prisoner civil

rights, habeas corpus and death penalty litigation. For example:

—Nine Center programs last year for district and magistrate judges included a

total of over 30 hours of instruction and analysis about the two 1996 statutes

and related subjects. And at the request of the Third Circuit, the Center conducted a two-day program devoted entirely to capital habeas cases in the cir-
354

cuit; in addition to federal judges, nearly 200 prosecutors, defense counsel, and

state judges attended at no cost to the Center. —The Center also broadcast an FJTN update on the Prison Litigation Reform Act,

with special emphasis on sections governing exhaustion of remedies, filing fees

and costs, termination and stays of prospective relief, attorney’s fees, physical

injury requirement, three strikes provisions and screening requirements. —Later this year, the Center will release, probably through its website, the first

part of a two-part resource guide for judges on managing death penalty litigation. Part 1 deals with federal prosecutions; part 2 provides guidance on federal

habeas review of state death penalty cases. Both will help judges manage the

costs of death penalty litigation.

Early this summer the Center will broadcast a two part program for federal

judges on managing federal death penalty cases, tapes of which will serve as

ready references for judges assigned such cases.

These efforts build on the death penalty litigation clearinghouse that the Center has maintained for several years, through which federal judges assigned

death penalty cases may obtain copies of pretrial orders, jury charges, and other

documents developed by judges who have handled these cases, along with audio

and videotapes of Center educational programs. —We have assisted the Administrative Office in evaluating the Judicial Conference’s Criminal Justice Act supervising attorney pilot project to help courts

manage CJA responsibilities. Next year, the Center will present to the relevant

committees of the Judicial Conference our analysis of this project’s impact.

The Center’s Manual on Recurring Problems in Criminal Trials, now in its fourth

edition, is a standard reference work for judges on the appellate case law governing

criminal proceedings. It is heavily used for training federal prosecutors as well. The

Justice Department has printed 7,000 copies of the 4th edition and distributes it in

its classes.

Other case law updates on the FJTN

The Center uses the FJTN and traditional judicial seminars to keep judges informed about new appellate case law, knowledge that is essential for an efficient

judicial system. Each July, our FJTN review of the U.S. Supreme Court term alerts

judges and their clerks to the decisions most likely to affect federal judges’ daily

works. Last month we broadcast our first bankruptcy law update, which followed

an earlier FJTN program on agricultural bankruptcies and regional FJTN circuit

bankruptcy law reviews.

Analyses of federal court structure and procedure

Center research analyzes the impact of statutory and rules provisions to help the

courts, Judicial Conference committees, and in some cases Congress, determine

whether to consider alternative approaches.

The Center works closely with the Judicial Conference Standing Committee on

the Rules of Practice and Procedure, and with the four Advisory Committees, to

analyze the operation of the rules and help the committees determine where amendments may be needed to promote more efficient and fair litigation. Recent analyses

included studies of document-production burdens, an analysis of district and appellate practices that require disclosure of financial interests of parties in federal cases,

and a study of five states’ court procedures for court-ordered mental examinations

of defendants in capital cases. We will soon present information on the use of special

masters in complex civil litigation to the Judicial Conference’s Advisory Civil Rules

Committee.

The Center completed an evaluation of digital audio recording technology for the

Court Administration and Case Management Committee, a technology now approved by the Conference as a method for taking the official court record.

The Center will release this year a source book of case-management procedures

used in the thirteen federal appellate courts, in response to the observation in the

judicial branch’s Long Range Plan that ‘‘the processes by which appeals are actually

decided in each circuit are generally not well known, and they have not been sufficiently studied.’’ A conference of chief circuit judges and circuit executives, arranged

by the Center and held last week in connection with the meeting of the Judicial

Conference, allowed exchange of information about chief circuit judges’ court and

circuit management practices. This conference was similar in purpose to the conferences that the Center regularly presents for chief district judges and chief bankruptcy judges.

Ninth Circuit structure

The Center provided research and analysis for the statutory Commission on

Structural Alternatives for the Federal Courts of Appeals. The commission pre-
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sented its legislative recommendations late in 1998 for changes in the Court of Appeals for the Ninth Circuit and in appellate structure generally. This year, the Center published the Commission’s working papers so that Congress and other interested parties can readily review the underlying Judicial Center data, and other materials, with which the Commission worked and that helped shape its recommendations.

Cooperation and coordination with the U.S. Sentencing Commission

Congress, in creating the Sentencing Commission, directed it to work with the

Center to avoid duplication of effort in training and research. Commission representatives have long been an integral part of the faculty for our orientation programs for new federal judges and probation officers. We have worked with the Commission, the Judicial Conference Criminal Law Committee and its staff, and the

U.S. Bureau of Prisons, to arrange periodic sentencing policy institutes as one

means for the Commission to get the views and experiences of federal judges about

the guidelines, which they apply on a daily basis. To help the Commission use the

FJTN to broaden its educational reach, the Center has included Commission components in its own broadcasts, including Perspectives, the Center’s periodic FJTN educational news magazine for probation and pretrial services officers.

Shortly after the new commissioners were sworn in this year, the commission

chair, Judge Diana Murphy, Commissioner John Steer, and top commission staff

met with top management of the Center to ensure continued close coordination. Earlier this month, the FJTN broadcast the first of three joint Center-Commission programs on the Sentencing Guidelines. Sentencing and Guidelines: Departure Analysis explained statutes, decisions, and guidelines provisions concerning departures,

provided a ‘‘departure roadmap’’ of the Supreme Court’s case law departure analysis, and presented hypothetical fact patterns to illustrate upward and downward

departures within the Guidelines. The Center and Commission will continue their

FJTN partnership and explore additional uses of the FJTN, as well as use of the

videoconferencing equipment for informal hearings.

Education and research to implement ADR programs

The 1998 Alternative Dispute Resolution Act directs each federal district court to

provide alternative dispute resolution (ADR) to every civil litigant. Since the late

1970s the Center has played the leading role in helping federal courts implement

mediation, arbitration, and other alternative methods to reduce the time and cost

of litigation and to improve the process. Recent examples include our sourcebooks

on ADR in district and appellate courts, which tell federal courts how other courts

are using ADR techniques, and analyses of several trial and appellate level ADR

methods. The Center also provides judicial education in alternative dispute resolution techniques to federal trial judges, and this year agreed to make future mediation training programs we provide for U.S. magistrate judges available to the

Court of Federal Claims special masters who adjudicate claims under the statutory

National Vaccine Injury Compensation Program.

Given the 1998 ADR Act’s call for the Center to help in implementing the statute,

shortly after passage we broadcast an FJTN program to familiarize courts with the

Act and its requirements. Last December, we presented a conference for the statutorily required ADR administrator in each district court. Because of the Center’s

reputation in the ADR area, the highly regarded Hewlitt Foundation, which has

long promoted alternative means of resolving disputes, provided the funds for this

conference through a donation to the statutory Federal Judicial Center Foundation.

To further help the courts in implementing the 1998 Alternative Dispute Resolution Act, the Center will publish a guide for judges to help them select and manage

cases in ADR.

Helping courts manage complex scientific and technical lawsuits and other aspects

of modern federal litigation

Orienting new judges to their roles and responsibilities is a core Center function.

For a federal judge, however, learning is a continual process. Rapid changes in

science and technology, in particular, are affecting the courts’ work.

Judicial education about science and technology

The Supreme Court, in Daubert v. Merrell Dow Pharmaceuticals (1993) and its

progeny, and Markman v. Westview Instruments, Inc. (1996), has greatly expanded

federal judges’ responsibility to assess the reliability of scientific evidence offered in

federal litigation, including but not limited to patent cases. Judicial education in

these areas is often most effective when judges meet face to face with faculty and

colleagues, as they did at Center programs last year on intellectual property and

on developments in human genetics and other scientific topics.
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Distance education, however, is also important in this kind of education. Thus, the

Center is publishing this year the second edition of its Reference Manual on Scientific Evidence (with a Foreword by Justice Stephen Breyer). The Manual, which

will be available on our Website (and to private publishers) to facilitate access by

attorneys, will help bench and bar deal with scientific and technical evidence efficiently and effectively.

We are also working with the Board of Editors of the Center’s Manual on Complex

Litigation to produce a fourth edition of this standard reference work. The new edition will take account, among other things, of the changes created by recent case

law and other developments in class actions and mass tort litigation. A basis for

this work is the three expansive analyses of the mass torts phenomenon that the

Center provided the Judicial Conference’s Advisory Committee on Civil Rules and

its Working Group on Mass Torts. These analyses formed a large part of the materials in the Working Group’s report to the Chief Justice.

Private publishers, of course, may produce their own versions of Center publications for sale to the public and the bar. The Center encourages these sales, along

with sales through the Government Printing Office, because pretrial and trial proceedings are likely to be more efficient when bench and bar have access to the same

basic reference material. One of the leading legal publishers recently reported that

the top ten titles that it sells to federal agencies include its editions of the Center’s Manual for Complex Litigation and Reference Manual for Scientific Evidence.

Finally, later this year we will broadcast a six part series on science in the courtroom. The first three parts will deal with the scientific principles of DNA research

and their application in patent cases. The second three parts will be about toxicology and epidemiology and their application in mass tort cases.

Court-appointed experts

At the request of the American Association for the Advancement of Science, the

Center is evaluating the Association’s demonstration project that provides the

names of scientists and other professionals to serve as court-appointed experts. To

help the Judicial Conference evaluate the results of funds it provided for a national

panel of court-appointed scientists in the national breast implant litigation, the Center has recently completed a detailed analysis of the process and suggestions for improving it.

Assessing the effect of technology on the litigation process

Technology increasingly pervades the work of the federal courts. Two Center

projects are helping the courts adapt to these changes. One project involves how the

pretrial discovery process copes with information stored in electronic records, many

in archaic and unreadable formats. The Center is documenting the extent of this

problem, so that the Rules Committees can consider whether rules changes are in

order.

A second project covers the increasing use by attorneys of computer simulations,

video depositions, and other technology for presenting evidence. Recognizing the

Center’s reputation with federal judges, the not-for-profit National Institute for

Trial Advocacy (NITA) offered in January to work with the Center to prepare, for

Center dissemination, a manual for judges describing various courtroom technologies and identifying how to permit their use in ways that are consistent with

fairness and efficient case management. (NITA, headquartered at Notre Dame Law

School, was founded almost thirty years ago by judges and litigators to promote ethics, candor, civility, and judicial economy in litigation.) This manual is part of a

larger Center project to identify how electronic evidence technologies are used and

to examine whether the current procedural and evidence rules are adequate to handle this development. It will join some ten other Center manuals that provide judges

ready reference for problems that confront them.

Education about international and foreign law and management of

transnational litigation

The Center, pursuant to statute, has long provided briefings and occasional seminars for judges of foreign countries on United States law and practice. (Center appropriations are not used for the direct costs of these programs.) Foreign interest

in U.S. legal institutions is a product of the globalization of law, commerce, and

crime, as is the specific interest of many foreign judges in creating an agency like

the Federal Judicial Center.

By the same token, and at a growing pace, events outside our borders are influencing litigation in federal courts, and such influence will grow. For example, treaties to which the United States is a signatory are part of the body of law that federal judges apply. As U.S. treaty obligations grow, judges will need to know about

them. Additionally, the globalization of both commerce and crime brings foreign par-
357

ties and agents into federal litigation. These entities will have varying levels of familiarity with, and willingness to embrace, federal judicial procedural rules and

norms. Litigation over intellectual property is only one example of this development.

Judges also report increasing difficulty in gaining access to evidence and witnesses

on foreign soil.

These challenges of transnational litigation, however, will not affect federal courts

uniformly. Judges will vary considerably in their need for education to manage and

decide cases involving foreign parties and extra-territorial law. As with other new

problems, however, when they need help, they will need it quickly—not once a seminar is scheduled. This is another area in which educational technology will help us

meet varying judicial education needs. The Center is exploring how to adapt its

growing familiarity with asynchronous judicial education to provide individual

judges education to deal effectively with transnational litigation at the time the

need arises.

Mr. Chairman and Members of the Committee: Thank you again for your continued support of the Center and your encouragement for our development of the full

range of educational technologies. You have played an important role in helping the

personnel of the federal courts stay current in a rapidly changing world. I would

be pleased to try to answer any questions you may have, either during the hearing

or by written submission.

PREPARED STATEMENT OF HALDANE ROBERT MAYER, CHIEF JUDGE, UNITED STATES

COURT OF APPEALS FOR THE FEDERAL CIRCUIT

Mr. Chairman, I am pleased to submit my statement to the Committee for this

court’s fiscal year 2001 budget request.

Our 2001 budget request totals $19,533,000. This is an increase of $2,688,000 over

the 2000 approved appropriation of $16,845,000. Forty one percent of the requested

increase, $1,089,000, is for mandatory, uncontrollable increases in costs. The remaining increase of $1,656,000 is for funding of additional positions and renovation

of our courtrooms.

Request for Program Increases

$1,656,000 of our fiscal year 2001 request would cover the costs of five statutorily

authorized positions for technical assistants for the court’s legal staff, four additional positions for the office of the Clerk of Court, and funding to upgrade the Federal Circuit courtrooms. Further justification for these increases follows.

Funding for Five Technical Assistants ($600,000).—The court is requesting five

technical assistants in addition to the three now working in the Office of the Senior

Technical Assistant and the positions provided in our fiscal year 2000 budget. Under

the provisions of 28 U.S.C. § 715(d) the court may appoint technical assistants equal

to the number of judges in regular active service. The five technical assistants requested here, plus those currently on board, will give the court one technical assistant for each active judge position.

The technical assistants do research and assist the court and all of its judges in

addressing technical aspects of appeals, maintaining consistency in precedential

opinions, and otherwise fulfilling the court’s mission. Technical assistants must

have not only a law degree but also a background in science or engineering because

of the significant number of highly technical intellectual property appeals handled

by the court. This court has exclusive jurisdiction over patent appeals from district

courts and the Patent and Trademark Office. These appeals often are most difficult

and time consuming, and involve complex issues at the forefront of biotechnology,

computer engineering, pharmacology, and other areas of science and engineering.

Funding for additional positions in the office of the Clerk of Court ($156,000).—

The court also is requesting funds to hire four full-time positions in the Clerk’s Office. These positions are needed to keep pace with the court’s growing jurisdiction

and increasing caseload. There is now only one secretary in the Clerk’s Office. Another secretary position is needed to assist the chief deputy clerks and to insure that

secretarial functions for the entire office, now exclusively provided by the secretary

to the Clerk, are available whenever required. A systems manager position is needed because the complexity of the Clerk’s database management system has grown

beyond the competence of the nontechnical staff to maintain as extra duties. Two

deputy clerk positions are needed, one position for a calendar/deputy clerk to alleviate the calendar functions now performed by the chief deputy clerk as an extra

duty, and one position for a records manager to develop a records management system now required to keep pace with the large increase in the permanent records
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which the court has accumulated since its creation, and which must be maintained

and preserved. Funding for Courtroom Renovations ($900,000).—The court is requesting $900,000

for use to update the three Federal Circuit courtrooms. This courthouse opened in

1967. With the exception of replacement carpet, there have been no renovations or

upgrades performed in our courtrooms.

The funding will be used to update courtrooms, furniture, renovate counsel rooms,

and upgrade the security of the Judges’ benches. Funds also will be used to improve

electronic capabilities in the three courtrooms. The courtrooms’ lighting fixtures require upgrading and modernization, and the courtrooms need to be rewired for computer use, modern recording equipment, and improved technology. This is a onetime cost and would be reflected as a nonrecurring expense in our 2002 budget request.

I would be pleased, Mr. Chairman, to answer any questions the Committee may

have or to meet with Committee members or staff about our budget requests.

PREPARED STATEMENT OF GREGORY W. CARMAN, CHIEF JUDGE, UNITED STATES

COURT OF INTERNATIONAL TRADE

Mr. Chairman, Members of the Committee: Thank you for allowing me this opportunity to submit this statement on behalf of the United States Court of International Trade, which is a national trial-level federal court established under Article

III of the Constitution with exclusive nationwide jurisdiction over civil actions pertaining to matters arising out of the customs and international trade laws.

The Court’s budget request for fiscal year 2001 is $12,506,000, which is $535,000

or approximately 4.5 percent more than the $11,971,000 provided for in the fiscal

year 2000 appropriation. The request will enable the Court to maintain current

services and provide funds for pay adjustments for judicial officers and court personnel, and inflationary increases in travel costs, rent, postage, contract rates, supplies, equipment, services, telephone usage and acquisition of law books.

I would like to specifically point out that the Court is only requesting, as it has

for over five years, standard inflationary adjustments to base. The Court has relied

on vacancies and savings from its conservative approach to spending to provide for

implementation of important new initiatives, including technological upgrades.

The Court’s fiscal year 2001 request includes funds for finalizing and supporting

the reorganization plan of the Case Management Section that was initially developed and implemented in fiscal year 2000. The reorganization specifically addresses

three goals of the Court’s Long Range Plan: ensuring that the judges, members of

the bar and the public are provided with quality assistance by the staff; increasing

efficiency and reducing opportunities for delay in case processing and management;

and implementing the Case Management and Electronic Case Files System (CM/

ECF) of the Administrative Office of the United States Courts. To this end, the fiscal year 2001 request includes funds for filling vacant positions and for maintaining

and supporting several projects from fiscal year 2000, specifically: a networked

record management and tracking system for all case records; a new switched 10/100/

1000mbps LAN infrastructure network; video conferencing; and a new laser system

that allows for more reliable and faster access to the DCN. The fiscal year 2001 request also includes funds for the support and maintenance of the Court’s security

system upgrades, implemented in fiscal years 1999 and 2000.

In fiscal year 1996, the Court made the decision to deposit funds into the Judiciary Information Technology Fund (JITF) to address the long-term technology needs

of the Court and to establish a viable network infrastructure. Funds were deposited

into the JITF in fiscal years 1996, 1997, 1998 and 1999.

In fiscal year 1999, the Court developed a five-year plan to support the Court’s

future needs and to harness technology to enhance its services to the Court family,

the bar and the public. The plan includes several new projects: the implementation

of the Administrative Office’s Case Management and Electronic Case Files System

(CM/ECF) that will create a seamless electronic environment by combining an integrated case management system with electronic filing, document imaging and scanning; the replacement of the Court’s present CD–ROM tower, which is used for legal

research, with a higher capacity model; the replacement of older category 3 wire

with enhanced category 5 wire and the installation of additional data tap runs for

public access terminals; the design and acquisition of a new phone system that will

improve and expand the Court’s telecommunications system; the implementation of

a Court Intranet Web server to facilitate sharing of Court information and expand

in-house training in the utilization of automation and technology; and the acquisition of an automated comprehensive management software package for library ac-
359

quisitions, cataloging and circulation. The Court anticipates that these systems will

be fully operational by the end of fiscal year 2004. The continuation of fiscal year

2000 projects and the implementation of these new initiatives will enable the Court

to continue to build its needed infrastructure and operate efficiently and effectively

in the 21st Century.

I would like to reaffirm that the Court has always been conservative in its appropriation requests and will continue, as it has in the past, to conserve its financial

resources through sound and prudent personnel and fiscal management practices.

The Court’s ‘‘General Statement and Information’’ and ‘‘Justification of Changes,’’ which provide more detailed descriptions of each line item adjustment, were submitted previously.

If the Committee requires any additional information, we will be pleased to submit it.

PREPARED STATEMENT OF DIANA E. MURPHY, CHAIR, UNITED STATES SENTENCING

COMMISSION

INTRODUCTION

Mr. Chairman, members of the Committee, thank you for the opportunity to submit a statement on behalf of the United States Sentencing Commission’s fiscal year

2001 appropriation request. As you know, on November 15, 1999, a full complement

of seven voting commissioners was appointed to the Commission, and I am proud

to serve as Chair of this important agency. We take our new responsibilities so seriously that we met the day after our appointment in Washington, D.C., for two days

and adopted a very ambitious agenda we hope to accomplish this amendment cycle.

As a group, we bring a great deal of experience and several different perspectives

to our new job. We look forward to strengthening the good working relationship with

Congress and others in the federal criminal justice community. Among the seven

voting and two non-voting members of the Commission, five of us are federal judges,

three of us have prosecutorial experience, two of us have criminal defense experience, two of us formerly were police officers, several of us have had prior experience

working as congressional staff, and one of us has spent a number of years as general

counsel for the Commission.

Our appointment ended an extended and unprecedented period of more than a

year, during which time the Commission was without any voting commissioners.

Unfortunately, these vacancies have had the effect of significantly decreased appropriations for the Commission and have created staffing shortages that have gone

unaddressed. During the appropriations process for fiscal year 2000, there was substantial uncertainty as to the requirements for the Commission due to the commissioner vacancies. As a result, the Commission’s budget was reduced to $8,468,000

for fiscal year 2000, an 11 percent decrease from fiscal year 1999 and the lowest

appropriation for the agency since fiscal year 1994.

Regrettably, the cutback comes at a time when the agency bears an extraordinarily heavy workload due to the extended absence of commissioners and the

many legislative directives that await Commission implementation. During that period, of course, the Commission could not fulfill its most important ongoing statutory

responsibility under the Sentencing Reform Act, that is, to update and promulgate

amendments to the sentencing guidelines for federal offenders. As a result, a significant backlog of crime and sentencing related legislation has accumulated that must

be addressed by the new Commission.

In light of the circumstances we face, the Commission requests an appropriation

of $10,600,000 for fiscal year 2001, the same as requested last year. This funding

level is the bare minimum necessary to enable the Commission to restore staff levels

to that of fiscal year 1998, the last year the agency had a fully functional Commission in place, and to fulfill all of our many statutory responsibilities. Without an

adequate budget, we cannot effectuate the will of Congress as expressed in a number of important legislative items that await Commission implementation. Since our

November 15, 1999, appointment, we have undertaken a very full agenda in this

abbreviated amendment cycle, addressing many legislative directives and circuit

conflicts in guideline interpretation. We are hard at work and hope that Congress

will reaffirm its belief in the mission of the Commission and its confidence in us

by restoring the Commission’s funding to an adequate level.

RESOURCES REQUESTED

The Commission’s budget request is for $10,600,000. The Commission now has 20

percent less staff than in fiscal year 1998, and nearly 70 percent of the requested
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increase ($1,487,000) is for restoration of personnel. More than 30 percent of the requested increase ($595,000) would fund adjustments needed to pay employees to

continue current operations; these are mandatory adjustments in salaries and benefits and slight inflationary increases ($78,000) in some non-personnel expense categories.

The amount needed to restore our ability to function effectively is made up of ‘‘Adjustments to Base.’’ —$595,000 is requested for pay and benefit cost adjustments —$78,000 is requested for inflationary increases for non-personnel operating expenses —$1,487,000 is requested for restoration of personnel

—($28,000) for one less compensable day.

The requested amount is an increase of $2,132,000 from the Commission’s fiscal

year 2000 appropriation, but that appropriation was an anomaly from previous

years and came at a time when the Commission had no voting commissioners. In

terms of total obligations, the agency has a funding level of $9,553,000 for fiscal

year 2000 by combining the appropriations with remaining carryover money earmarked for this fiscal year. Compared to this figure, the fiscal year 2001 request

represents an increase of only $1,047,000 (approximately 11 percent) over resources

available in fiscal year 2000.

JUSTIFICATION

Sentencing Reform Act Requirements

The Commission was created under the Sentencing Reform Act of 1984 as a permanent, independent agency within the judicial branch. Congress gave the Commission a dual mission. The most urgent at the time was to establish federal sentencing

policies and practices that (i) serve four purposes of sentencing: just punishment,

adequate deterrence, protection of the public from further criminal conduct, and rehabilitation of offenders; (ii) provide certainty and fairness in sentencing; and (iii)

avoid unwarranted sentencing disparities among similarly situated offenders.

The Commission was organized in October 1985, and in just 18 months, established the first comprehensive set of determinate sentencing guidelines ever created

for the federal judicial system. The federal sentencing guidelines became effective

on November 1, 1987, for offenses occurring on or after that date, and since their

implementation have been used to sentence more than 400,000 defendants. The

Commission believes that the federal sentencing guidelines have advanced the goals

of Congress as expressed in the Act by providing certain, fair, and markedly more

uniform punishment for similar offenders, which in turn has strengthened the ability of the criminal justice system to combat crime.

The Sentencing Reform Act also assigned to the Commission another mission critical to the federal criminal justice system: to serve as an expert agency on federal

sentencing matters. To fulfill this ongoing mission, the Commission was given continuing responsibility and authority in many areas, including—

(1) establishing sentencing policies and practices that assure that the purposes of

sentencing are met, that provide certainty and fairness in meeting those purposes

of sentencing, that avoid unwarranted sentencing disparities while maintaining

enough flexibility for individualized sentences when those are warranted, and that

reflect advancements in our knowledge of human behavior as it relates to the criminal justice process;

(2) developing means to measure the effectiveness of sentencing, penal, and correctional practices in meeting the purposes of sentencing;

(3) promulgating and updating sentencing guidelines for federal offenders;

(4) monitoring the performance of probation officers regarding sentencing recommendations, including application of the guidelines;

(5) issuing instructions to probation officers concerning the application of the

guidelines;

(6) establishing a research and development program within the Commission to

serve as a clearinghouse and information center for information on Federal sentencing practices;

(7) consulting with federal courts, departments, and agencies in developing, maintaining, and coordinating sound sentencing practices;

(8) systematically collecting data from studies, research, and the empirical experience of public and private agencies concerning the sentencing process;

(9) publishing data concerning the sentencing process;

(10) systematically collecting and disseminating information concerning sentences

actually imposed on more than 55,000 cases sentenced in the Federal district courts

each year (and on about 1,000 appellate decisions on sentencing) and the relation-
361

ship of those sentences to the factors judges are required to consider under 18

U.S.C. § 3553(a);

(11) systematically collecting and disseminating information regarding the effectiveness of sentences imposed;

(12) conducting seminars and workshops around the country to provide continuing

studies for people engaged in the sentencing field;

(13) conducting periodic training programs for judicial and probation personnel

and other persons connected with the sentencing process;

(14) studying the feasibility of developing guidelines for juvenile offenders;

(15) making recommendations to Congress on changes that might be made to statutes relating to sentencing, penal, and correctional matters that would help to carry

out effective, humane, and rational sentencing policy;

(16) holding hearings and calling witnesses to assist the Commission in the exercise of its powers and duties;

(17) recommending any changes in prison facilities that may be necessary because

of the sentencing guidelines; and

(18) performing any other functions necessary to permit federal courts and others

in the federal criminal justice system to meet their responsibilities in the sentencing

area.

Newly Appointed Commissioners Face Critical Backlog of Legislation

Although the Commission staff was able to carry out many of these important

statutory duties during the extended absence of voting commissioners, the agency

could not amend the sentencing guidelines to implement recently enacted crime and

sentencing-related legislation. As a result, the newly appointed Commission faces a

significant backlog of legislation that waits review and implementation by the agency. The newly minted Commission has made addressing these items its first priority

for the current guideline amendment cycle, which ends May 1, 2000.

The legislative matters that await Commission action cover a wide range of criminal conduct that is of great concern to Congress and other members of the federal

criminal justice system:

—Intellectual Property Offenses.—In response to the No Electronic Theft (‘‘NET’’)

Act of 1997, the Commission released a staff report on the NET Act and recently requested and received public comment on three alternative proposals

that would amend the copyright and trademark infringement guideline to ensure that the guideline is sufficiently stringent to deter such offenses and that

it provides for consideration of the retail value of the infringed item. The Commission continues to analyze and develop possible amendments to the guideline

and, pursuant to the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999, must promulgate a temporary emergency amendment in response to the NET Act by April 6, 2000.

—Telemarketing Fraud.—In response to the Telemarketing Fraud Prevention Act

of 1998, the Commission promulgated temporary amendments to the guidelines

that provide for three separate sentencing enhancements for fraud offenses that

involve mass marketing, a large number of vulnerable victims, and the use of

sophisticated means to carry out the offense. The Commission must review and

repromulgate the emergency amendments as permanent amendments by May

1, 2000, or they will expire by November 2000.

—Telephone Cloning.—In response to the Wireless Telephone Protection Act of

1998, the Commission recently released a staff report on cell telephone cloning

and requested public comment on proposed options for amending the guidelines

to provide an appropriate penalty for these offenses.

—Identity Theft.—In response to the Identity Theft and Assumption Deterrence

Act of 1998, the Commission recently released a staff report on identity theft

and requested public comment on amending the guidelines to provide an appropriate penalty for each offense under 18 U.S.C. § 1028 (relating to fraud in connection with identification documents).

—Protection of Children.—In response to the Protection of Children from Sexual

Predators Act of 1998 and certain provisions of the Omnibus Consolidated and

Emergency Supplemental Appropriations Act of 1998, the Commission has recently released a staff report on sexual offenses against children and requested

public comment on a number of options for amendments to the guidelines pertaining to certain sexual abuse offenses and distribution of child pornography.

Possible amendments being considered include an enhancement for use of a

computer in connection with a sexual abuse offense against a minor and misrepresentation of an offender’s identity in connection with such an offense.

—Methamphetamine Trafficking.—Although the Methamphetamine Trafficking

Penalty Enhancement Act of 1998 contains no directive to the Commission, the
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Commission recently released a staff report on methamphetamine trafficking

and requested public comment on an amendment to the guidelines’ drug quantity table that would account for the increased penalties for manufacturing, importing, or trafficking in methamphetamine imposed by the Act. The Act reduced by one-half the quantity of methamphetamine required to trigger various

mandatory minimum sentences in the drug statutes. —Firearms Offenses.—In Public Law 105–386, Congress amended 18 U.S.C.

§ 924(c) to create a tiered system of sentencing enhancements, (each with a

mandatory minimum and presumed maximum) in cases in which a firearm is

involved in a crime of violence or drug trafficking offense. The pertinent minimum sentence in that tiered system is dependent on whether the firearm was

possessed, brandished, or discharged. The Act also changed the statutory definition of ‘‘brandish.’’ These legislative changes will require a number of amendments to the guidelines, including amendments that incorporate the tiered statutory sentencing scheme into the guideline pertaining to Section 924(c). In response to this new legislation, the Commission recently released a staff report

on firearms offenses and requested public comment on a number of proposals

for amending the guidelines. The Commission also is undertaking a longer term

comprehensive examination of the firearms and explosives guidelines to make

them more internally consistent with other similar guideline provisions and to

generally improve their operation.

Circuit Conflicts.—In addition to these legislative items, a large number of conflicts among the United States Circuit Courts of Appeal regarding interpretation of

the guidelines accrued during the absence of voting commissioners. In Braxton v. United States, 500 U.S. 344 (1991), the United States Supreme Court unanimously

acknowledged that the Commission has the initial and primary task of eliminating

conflicts among the circuit courts with respect to statutory interpretation of the

guidelines. Accordingly, the Commission has set addressing a limited number of the

most significant conflicts as another priority for the current guideline amendment

cycle.

This amendment cycle the Commission is working on circuit conflicts regarding

(i) the circumstances for which a court may downward depart from the sentencing

guideline range for aberrant behavior; (ii) whether the enhanced penalties in § 2D1.2

(Drug Offenses Occurring Near Protected Locations or Involving Underage or Pregnant Individuals) apply only when the defendant is convicted of an offense referenced in that guideline or, alternatively, whenever a defendant’s relevant conduct

included drug sales in a protected location or involving a protected individual; (iii)

whether the enhancement in the fraud guideline for violation of a judicial or administrative order, injunction, decree, or process applies to falsely completing bankruptcy schedules and forms; (iv) whether sentencing courts may consider post-conviction rehabilitation while in prison or on probation as a basis for downward departure at resentencing following an appeal; and (v) whether a court can base an upward departure on conduct that was dismissed or uncharged as part of a plea agreement.

Other Crime Legislation.—In fiscal year 2001, in addition to completing any carryover items from the items listed above, the Commission hopes to expand its policy

development to include responding to other crime legislation pertaining to nuclear,

chemical, and biological weapons, specifically the Chemical Weapons Implementation Act of 1998, and the sense of Congress expressed in the National Defense Authorization Act for Fiscal Year 1997. The Commission is planning to conduct a comprehensive review of the guidelines pertaining to importing and exporting nuclear,

biological, and chemical weapons to determine whether any amendments to the

guidelines are warranted. The Commission hopes to complete this work in 2001.

Economic Crime Guidelines.—Also in fiscal year 2001, the Commission hopes to

complete a comprehensive reassessment of the economic crime guidelines that was

begun by the last Commission. Economic offenses account for more than a quarter

of all the cases sentenced in the United States federal district courts. The prior

Commission had received from the Federal Judiciary and the Department of Justice

testimony and survey results that indicated that the sentences for these offenses

were inadequate to punish appropriately defendants in cases in which the monetary

loss was substantial. After approximately one year of data collection, analyses, public comment, and public hearings, the Commission developed a comprehensive ‘‘economic crime package’’ designed to revise the loss tables for fraud, theft, and tax offenses in order to impose higher sentences for offenses involving moderate and large

monetary losses. Related amendments would consolidate the theft, fraud, and property destruction guidelines and clarify the definition of loss for selected economic

crimes. Working in conjunction with the Criminal Law Committee of the Judicial

Conference, the Commission conducted a field test of the proposed loss definition by
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surveying federal judges and probation officers and applying the new definition to

actual cases. Among the findings from the field test, more than 80 percent of the

judges stated that the proposed loss definition produced results that were more appropriate than the current definition.

The Commission expects that the groups interested in the economic crime package

(e.g., the Department of Justice, the Criminal Law Committee of the Judicial Conference, and the American Bar Association) will renew their recommendations that

this package be a top priority for 2001. Accordingly, the Commission has planned

an Economic Crimes Symposium in October 2000 to further advance sentencing policy development and knowledge with respect to economic crimes.

Restoration of Personnel Needed to Meet Statutory Duties

Fulfilling all of the agency’s responsibilities has been extremely difficult recently

because of the absence of voting commissioners for more than one year, which has

had the unfortunate effect of decreased appropriations and have created staffing

shortages that have gone unaddressed. Beginning in the first month of fiscal year

1999, the Commission was without any voting commissioners and this status continued through the first quarter of fiscal year 2000. In anticipation of a significant reduction in funding as a result of this unfortunate status, and the uncertainty about

when the vacancies would be filled, the Acting Staff Director for the Commission

determined it prudent to institute a de facto hiring freeze. The hiring freeze, coupled

with the agency’s normal attrition rate, has reduced the current staffing levels from

that of fiscal year 1998 by twenty percent.

The Commission has coped with the austere budget and staffing shortages in

large part by extending deadlines for policy development projects beyond the annual

guideline amendment cycle ordinarily used by the Commission to timely implement

crime legislation. In so doing, the Commission has been able to maintain its routine

training, research, monitoring, and publications schedule throughout the year. However, this was a short-term measure that was made possible only by the anomaly

of not having any voting commissioners for more than one year. Now that a full

complement of commissioners is in place, policy development deadlines can no

longer be prolonged and, in fact, must be shortened in order to address the backlog

described above in a timely manner.

While the commissioners work to reduce the backlog of unimplemented crime legislation and to consider the policy development reports prepared by staff, the human

resource needs of the agency will increase as the routine annual amendment cycle

is reestablished, new policy initiatives are identified by the reconstituted Commission, and new crime legislation is enacted by Congress. Indeed, there is pending legislation relating to juvenile justice, firearms offenses, and certain drug offenses,

which, if enacted, would require significant Commission resources to implement. In

order to become a fully functional agency that performs all of its statutory functions

in an exemplary manner, a restoration of personnel is necessary, particularly in the

following areas:

Reestablishment of Statutorily Required Research and Monitoring Functions

The Commission maintains a comprehensive, computerized data collection system

which forms the basis for its clearinghouse of federal sentencing information. This

comprehensive database is the basis for the Commission’s monitoring and evaluation of guidelines application, for many of its research projects, and for responding

to the hundreds of data requests received from Congress and other criminal justice

entities each year.

In fiscal year 1999, the Commission received court documents for more than

55,000 cases sentenced under the Sentencing Reform Act between October 1, 1998,

and September 30, 1999. For each case, the Commission extracts and enters into

its comprehensive database more than 260 pieces of information, including case

identifiers, sentence imposed, demographic information, statutory information, the

complete range of court guideline application decisions, and departure information.

The Commission also tracks final opinions and orders, both published and unpublished, in federal criminal appeals. The Commission gathered information on more

than 6,000 appellate court cases in fiscal year 1998 and now has an appeals dataset

containing information on more than 38,000 appeals. Information captured in this

database includes district, circuit, dates of appeal and opinion, legal issues, and the

court’s disposition. The appeals database informs the Commission regarding the frequency with which specific guideline issues are appealed, informs Congress and the

criminal justice community about court action related to the guidelines, and enables

the Commission to identify and, where appropriate, resolve circuit conflicts pertaining to application of the guidelines.
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The Commission continues to see a substantial increase in the number of cases

sent to the agency that must be entered into its comprehensive database. The current data entry organizational structure and physical facilities were designed to accommodate approximately 35,000 to 45,000 cases annually. However, for the past

three years, the agency has received more than 50,000 case files, with a projected

caseload of 56,000 for fiscal year 2001. Funding for three vacant data entry positions

is requested to process these cases. In addition, the Commission requests funding

to fill a key vacancy, the Chief Data Quality Analyst position, and to provide for

an additional junior Data Quality Analyst position, in order to preserve the integrity

of its comprehensive database.

The Commission continues to advance its statutorily directed research and information dissemination. Each year since the inception of the guidelines, the Commission has published an updated Guidelines Manual and an Annual Report and accompanying Sourcebook of Federal Sentencing Statistics which serve to inform and

advance knowledge of sentencing in the criminal justice community. In recent years,

the Commission launched two new publications, Guide to Publications and Resources and The Year in Review, and continued to add a variety of publications and

sentencing data to its popular Internet web site.

Working with the American Society of Criminology, the Commission recently prepared and presented a number of research papers on important topics of current interest such as federal and state counterfeiting offenses in the computer age, federal

sentencing practices for immigration offenses, prison verus alternative confinement,

and the effects on federal sentencing of the changing mix of policies, crimes, and

criminals. Commission staff have identified a number of future research projects

that for consideration, including an analysis of sentence proportionality under the

guidelines, the violent offense guidelines, the effectiveness of criminal history assessment within the guidelines, classifying offender function in drug trafficking offenses, patterns in offender recidivism under the guidelines, and the effectiveness

of offender incapacitation under the guidelines.

The ability of the Commission to continue its important research, however, is imperiled by a depletion of its research staff. During this recent period of attrition,

a significant portion of the intermediate tier of researchers and all of the lower tier

research associates left the agency. Thus, the Commission requests funding to fill

three Research Associate and three Junior Research Associate positions, as well as

the critical position of Director of Research. Without the funding necessary to fill

these key positions, the agency’s ability to critically analyze sentencing patterns and

practices, to respond to inquiries about the effectiveness of sentencing policies, and

to assess the impact of proposed guideline amendments and new sentencing related

legislation will be severely limited.

Maintaining the Agency’s Statutory Commitment to Sentencing Education

The Commission continues its commitment to providing high quality training and

assistance to judges, prosecutors, probation officers, and defense attorneys as required by the Sentencing Reform Act. In 1999, Commission staff provided training

on the sentencing guidelines to more than 2,500 individuals at 47 training programs

across the country, including ongoing programs sponsored by the Commission, the

Federal Judicial Center, the Department of Justice, the American Bar Association,

and other criminal justice agencies. The Commission also maintains a telephone

HelpLine service to answer case-specific guideline application inquiries from federal

judges, probation officers, prosecuting and defense attorneys, and law clerks. The

Commission responds to approximately 250 such inquiries each month. If the Commission is not provided sufficient funding to restore personnel in other areas of the

agency, its quality of training will suffer because its training staff may have to be

utilized for more pressing projects as they arise.

To further expand the availability of training and information sharing, the Commission has joined the Federal Judicial Center and the Administrative Office of the

U.S. Courts in launching a satellite television network to provide cutting-edge programming on sentencing-related issues to an even broader audience. The Commission makes a regular contribution to a news series for probation and pretrial services designed to update officers on important information regarding the Commission

and its activities. In 2001, the Commission plans to increase its involvement in the

delivery of training via the television network as a cost-effective means of

supplementing its existing training efforts.

As part of its efforts to reach out to organizations that are not yet familiar with

the organizational sentencing guidelines’ emphasis on compliance, self-policing, and

crime reporting, the Commission and the Ethics Officer Association (EOA) in 1999

jointly sponsored a series of day-long regional forums about implementing these

guidelines. The EOA is a non-profit peer organization comprising ethics and compli-
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ance officer representatives of for-profit and non-profit organizations. Its primary

objective is to share ‘‘best practices’’ for ethics and compliance programs among

members through peer-to-peer networking, library services, and educational efforts.

The Commission tentatively has scheduled an Organizational/Corporate Guidelines

Symposium in October 2001 to advance further its efforts in this important area.

Informing Congress

Each year the Commission also informs Congress’s legislative deliberations by responding to hundreds of congressional requests for assistance. These inquiries, both

written and oral, include requests for federal sentencing and criminal justice data,

analyses of proposed legislation, explanations of guideline operation, technical assistance in drafting legislation, and Commission publications and resource materials.

With a full complement of new commissioners in place, the agency expects its

overall activity will intensify, and requests from Congress and the public will greatly increase. As a result, the Commission needs to improve its congressional liaison

activities and requests two positions for this effort.

Rebuilding Administrative Support

Beginning in fiscal year 1996, the Commission began a long range software upgrade to the automation system used to maintain its sentencing database. This work

is substantially complete. During the recent period of attrition, however, the agency’s lead programmer retired, leaving a contractual relationship with Oracle Corporation as the only guard against a systems failure. If a major failure should occur,

it would cause a work stoppage involving approximately 30 data entry employees,

possibly over an extended period of time. Therefore, the agency requests funding to

hire an automation technician/programmer as well as a lower level database administrator to maintain the new system.

Also as part of its statutory duty to serve as a clearinghouse of sentencing related

information, the Commission maintains a highly specialized collection of sentencing

related literature that has been built up over the past ten years. That important

collection has gone unattended (other than by intermittent temporary services) since

the the agency’s librarian and assistant librarian resigned during the period with

no commissioners. The agency requests funding to fill these two positions in order

to maintain the integrity of its collection.

Other administrative positions that require filling include a support position

shared by two offices, the Legislative and Public Affairs Offices, and a personnel

specialist in the Human Resources Office.

Filling all of these requested positions would not require revising the Commission’s full time equivalency ceiling of 108 employees. Rather, the Commission merely seeks the restoration of funds for currently existing but vacant positions.

SUMMATION

In sum, the Commission is asking for sufficient funding so that we can perform

our many statutory obligations and fulfill our important role in combating crime by

maintaining an effective, certain, and fair sentencing system.

INDEPENDENT AGENCIES

THE ASIA FOUNDATION

PREPARED STATEMENT OF WILLIAM P. FULLER, PRESIDENT

Mr. Chairman: Thank you for the opportunity to submit testimony supporting The

Asia Foundation’s fiscal year 2001 budget request. The Foundation is grateful for

the support that the Congress and this Committee have provided over the years.

I appreciate the opportunity to outline The Asia Foundation’s programs and our

future plans to meet the challenges and opportunities facing Asia. We believe that

our programs demonstrate how a small, independent organization can advance

American interests in the Asia-Pacific region.

We are pleased that the Administration has endorsed the work of The Asia Foundation by requesting an appropriation of $10 million for fiscal year 2001. This modest increase would enable the Foundation to resume program activities that were

reduced as a result of the substantial budget cuts which the Foundation sustained

beginning in fiscal year 1996. Most importantly, the increase would enable the

Foundation to expand its support to Asian organizations that are positioned to play

key roles in regional democratic and economic reform efforts.
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OVERVIEW

Let me put the work of the Foundation into context. Asia is the most rapidly

changing region in the world, and one in which the U.S. has a diverse range of political, economic and security interests. As the region recovers from the recent economic crisis, continued governance reforms and the establishment of predictable

legal systems are essential for sustained growth and open trade and investment. At

the same time, the region faces increased security concerns, including tension on the

Korean Peninsula; the possibility of conflict between India and Pakistan; strained

relations between China and Taiwan; and the potential for domestic instability in

Pakistan and Indonesia. The dramatic emergence of democracy in Indonesia, constitutional reform efforts in Thailand, and the recent election in Taiwan underline

the opportunities and challenges facing those who support democracy.

We believe that The Asia Foundation, building on its 46 years of on-the-ground

experience, is well positioned to advance U.S. interests in a complex and dynamically evolving region. In the recently enacted State Department bill, The Asia Foundation was authorized to be funded at a level of $15 million for fiscal year 2001.

This action was a vote of confidence in the Foundation’s performance and underlines

the magnitude of needs and opportunities facing the region.

In the past the Committee has praised and encouraged the Foundation’s grantmaking role and we remain faithful to that mission. We make strategic, sequential grants to steadily build the capacity of key institutions, develop leaders,

and move critical policies forward. Foundation assistance supports training,

consultancies, technical assistance, and seed funding for new organizations—all

aimed at promoting reform, enhancing Asian capacity, and strengthening relations

with U.S. institutions.

No other American nonprofit organization working in Asia can match the Foundation’s years of on-the-ground experience and breadth of contacts. The democratic development processes underway in several countries in Asia—including Thailand, the

Philippines, Korea, Taiwan, and most recently Indonesia—is in part the fruit of the

investments that the Foundation has made over time in support of individuals and

institutions committed to reform. Democratic leaders who benefitted from Asia

Foundation grants in earlier years include the President of Indonesia, the newlyelected Vice President of Taiwan, the Korean Ambassador to the U.S. (also a former

Prime Minister of Korea), and the Speaker of the Mongolian Parliament.

THE ASIA FOUNDATION’S UNIQUE CONTRIBUTION: THE INDONESIA EXAMPLE

An example of the value of The Asia Foundation’s sustained involvement in the

region is Indonesia. The Foundation is acknowledged by both the Administration

and many members of Congress as the leading American organization presently active in Indonesia. Over the years the Foundation has supported hundreds of nongovernmental organizations (NGOs), formal government institutions, and future

leaders. With the fall of President Suharto, the Foundation was ready to immediately undertake activities to address the needs of new reformers in government.

Program activities included support for the design and implementation of a massive

voter education campaign prior to the parliamentary election; assistance to large

Muslim organizations and coalition groups for inter-ethnic and inter-faith programs

that aim to avert community conflict, and support for human rights and legal aid

organizations.

Many of the investments made in human resource development over the years

have proved particularly important. These include relationships established with

President Abdurrahman Wahid and Attorney General Marzuki Darusman—both

former Foundation grantees. The Foundation’s Representative, a specialist on Indonesia and Islam, served as a resource to the U.S. government as plans were shaped

to provide support to Indonesia through USAID and other agencies.

But it was its appropriated funding that made it possible for the Foundation to

quickly initiate programs supporting democratic reforms and to provide support for

conflict resolution in troubled areas such as Aceh and Irian Jaya; for human rights

and legal aid in East Timor prior to and following the referendum; and for important seed grant funding for new NGOs in a rapidly changing political environment.

The following examples of Foundation program support for key Indonesian organizations provide a sense of the scale of its election programs and its capacity to deliver.

The Foundation supported

—training and development of the largest contingent of domestic election monitors—over 123,000 in 26 provinces;

—the creation of a national network of 200 NGOs, including Islamic and other

religious organizations, which helped provide voter education information to the

public; and
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—the publication of 23 million voter education booklets and leaflets; production

of 2,000 radio and television broadcasts, and the design and distribution of over

500,000 training manuals for election monitors.

These programs reached an estimated 115 million voters and were credited with

contributing to a free and fair election.

Looking ahead, the Foundation’s program plans for Indonesia include an increased focus on law and legal reform as areas of critical importance to national political and economic development. In addition, the Foundation will continue to support efforts to reform policies affecting small and medium-scale enterprise development, the sector of the Indonesian economy that is so vital for employment. The

Foundation will also continue to support human rights and conflict resolution in

troubled areas of the country.

THE ASIA FOUNDATION’S CORE OBJECTIVES

As illustrated by the preceding examples of Asia Foundation investment and program impact in Indonesia, the Foundation’s overall core objectives are central to

U.S. interests in the Asia-Pacific region. The Foundation’s priorities remain consistent:

—Democracy, Human Rights and the Rule of Law.—Strengthening democratic institutions and encouraging the development of an active and informed non-governmental sector; advancing the rule of law; and upholding fundamental rights,

including protection of women.

—Open Trade and Investment.—Supporting open trade, investment, and economic

policy reform at the regional and national levels;

—International Relations.—Promoting regional and international dialogue on security, regional economic policy, and environmental and human rights issues

aimed toward more cooperative relations in the region.

The following examples illustrate the ways in which Foundation programming in

key areas contributes to sustainable impact and the advancement of U.S. interests

in the region.

Democracy and Human Rights

The Asia Foundation has supported the development of democratic institutions

and civil society and efforts to advance public understanding and enforcement of

human rights. For example:

—The Foundation has contributed to the development of parliaments in 16 countries in Asia through technical assistance, training members and staff, facilitating interaction with the nongovernmental sector, and developing parliamentary capacity to scrutinize budget proposals and other executive functions in

Thailand, Mongolia, and Indonesia.

—The Foundation is the single largest supporter of the nongovernmental sector

in all of the Asian countries in which we operate. In the last five years, we have

supported over 1,000 local NGOs to make essential contributions to a vibrant

civil society and to encourage public participation, transparency, and accountability in the policymaking process. Foundation support has contributed to the

establishment of new NGOs that have quickly made a mark, such as Thailand’s

Women and the Constitution Network, which played a critical role in ensuring

that the new Thai Constitution included provisions for increased public participation in rights enforcement and public policy making. It has also contributed

to the formation of an NGO network in Pakistan, which includes over 50 community based organizations that mobilize citizens to improve governance and

social service delivery.

—With the trend toward devolution of political and administrative powers to the

sub-national level, local governance and decentralization programs are a priority for the Foundation. Examples of Foundation support include training and

public education on village elections in China; improvements in the capacity of

local elected officials in Indonesia to conduct budget analysis and draft legislation on taxation and revenue generation; and strengthening the role and accountability of locally elected bodies in Bangladesh in financial management,

public accounting, and community needs assessment.

—The Foundation has supported the development of human rights organizations

throughout the region. Examples include human rights awareness, education,

and monitoring programs in Indonesia, Cambodia, Thailand, the Philippines,

and Sri Lanka. Foundation support for the regional Working Group for the Establishment of an ASEAN Human Rights Mechanism promotes public dialogue

on the importance of establishing regional standards and institutional mechanisms to promote and protect human rights.
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With a $10 million appropriation, the Foundation would strengthen and expand

its programs in local governance and human rights. New local governance initiatives

would include training for village council members in Cambodia; fiscal management

training for provincial and local assemblies in Indonesia; devolution programs and

public hearings on decentralization in Pakistan; and reform efforts which aim to improve the transparency, accountability, and responsiveness of public institutions in

Korea. Additional funding would also allow the Foundation to expand its human

rights programming, including the development of more effective human rights education methodologies and increased collaboration among human rights organizations

at the regional level.

Law

In a recent speech at a conference on ‘‘Democracy and the Rule of Law in a

Changing World Order’’ at the Library of Congress, Senator Orrin Hatch urged: ‘‘As

we support programs developing the legal institutions necessary for the rule of

law . . . [w]e must have the foresight to commit the time and resources necessary

to achieve these ends.’’ He praised The Asia Foundation for its contribution to this

effort and for the value of its sustained presence on the ground in Asia: ‘‘For example, The Asia Foundation is America’s preeminent non-governmental organization in

this field. With support from Congress, it has established on-the-ground programs

necessary to nurture rule of law institutions throughout Asia.’’

The Asia Foundation is committed to the development of sound and predictable

legal systems. Foundation grants and technical assistance support improved judicial

administration, legal education and professional development, community legal assistance programs, alternative dispute resolution, and law reform. The following examples illustrate the scope of Foundation legal programming:

—In China, where the government faces increased external and internal pressure

to reform the legal system and adopt international compliance standards, the

Foundation was one of the earliest supporters of legal reform efforts. Since

1998, the Foundation has supported Chinese efforts to improve the performance

of local government institutions and processes by regularizing administrative

procedures and creating greater scope for citizen participation and redress.

Other programs target the grassroots and policy levels to work toward more responsive administrative regulations, and support efforts to develop laws and

regulatory provisions for the delivery of legal aid and popular legal education.

—In the Philippines the Foundation has supported a variety of legal and judicial

reform efforts. We presently support the efforts of alternative law groups to

monitor and report on judicial performance, undertake legal advocacy on juvenile justice, conduct family court reform studies and alternative dispute resolution, and promote the continued development of public interest law.

—With Foundation support, the Ministry of Justice in Sri Lanka has established

community-based Mediation Boards that operate in most districts of the country. The Boards hear over 100,000 cases per year. Mediation has proven time

and cost effective, helping to reduce pressure on an overburdened formal court

system.

In the coming year the Foundation plans to promote law reform efforts in Indonesia through support to the new National Law Commission, the Consortium for

National Legal Reform, and other public and private institutions established under

the new government. A $10 million appropriation will enable the Foundation to expand its legal program initiatives in other parts of the region, including implementation of constitutional reforms in Thailand; enterprise and other commercial law

reforms in Vietnam, and legal literacy in Bangladesh, Cambodia, China, Indonesia,

Mongolia, Pakistan, the Philippines, Sri Lanka, Thailand, and Vietnam. The Foundation also plans to expand its regional counter-corruption activities.

Open Trade and Investment

The Asia Foundation’s economic programs support the development of policies and

institutions needed for open trade and investment. In particular, they help address

the political and governance factors that contributed to the regional economic crisis.

—In Indonesia, Foundation support enabled the Jakarta Stock Exchange to

launch a corporate governance program to toughen financial disclosure requirements for listed companies.

—Foundation support for policy reforms affecting Indonesia’s small and medium

enterprise (SME) sector in Indonesia includes unprecedented participation by

SME owners in discussion of regulatory and other problems in fourteen provinces; studies of the costs and distortions imposed by levies, licenses and fees;

and provision of information about credit.
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—In the Philippines, the Foundation supported two milestone activities in the

field of information technology: a study on the challenges facing partnerships

between Philippine and American high-tech firms; and a widely-distributed policy publication ‘‘Breaking Barriers: Liberalizing the Philippine Information

Technology Industry.’’ —In Cambodia, a Foundation program helped women market vendors in Phnom

Penh to obtain small loans and more effectively engage with local regulatory authorities in reducing intimidation and collection of arbitrary fees and improving

sanitary and other working conditions in the crowded markets. —The Foundation also supported regional organizations such as APEC and the

private sector Pacific Economic Cooperation Council (PECC) that are committed

to open trade. For example, in cooperation with PECC the Foundation supported workshops on regional economic monitoring; training in banking supervision for central bank officials in cooperation with the San Francisco Federal

Reserve Bank and other institutions in the region; and studies on the role of

competition policy and corporate governance.

Programs plans for fiscal year 2001 include a series of roundtable discussions and

studies in Vietnam on measures to speed up Vietnam’s economic development and

economic integration; expansion of SME policy reform initiatives in Indonesia, Bangladesh, Sri Lanka, and Korea; and cooperation with China’s Development Research

Council on law reforms that will facilitate more rapid development of new enterprises. The latter is expected to cover improvements in corporate governance, accountability and transparency, and better legal protection of property rights.

International Relations

The Asia Foundation’s programs in international relations reflect the unique capacity of the Foundation to promote increased understanding of different cultural

and foreign policy perspectives through regional and international dialogue. Foundation programs advance and complement more formal diplomatic efforts in the fields

of democratization, human rights, regional economic policy, and security concerns,

and help to strengthen human resources and institutional capacity in the field of

foreign policy. For example: —In cooperation with the Asia Center at Harvard University, the Foundation supports a series of trilateral meetings in Japan, and China. The meetings promote

greater mutual understanding of regional security issues among participating

nations. —The Foundation supports fellowships for mid-level officials of China’s Ministry

of Foreign Affairs to study at the Fletcher School of Law and Diplomacy, the

Johns Hopkins School of Advanced International Studies (SAIS). —The Foundation will continue its support for the Council for Security Cooperation in the Asia Pacific (CSCAP) as a useful vehicle for Track Two dialogue on

evolving regional security structure. —As part of its support for regional human rights initiatives, the Foundation will

continue to host annual meetings of an informal working group of human rights

practitioners. The meetings provide an opportunity for participants to explore

common issues such as impunity and to develop plans for the use of information

technology to facilitate exchange between human rights organizations and promote regional advocacy initiatives. —Through its ‘‘America’s Role in Asia Project,’’ the Foundation is bringing together a diverse group of distinguished American and Asian foreign policy specialists to consider America’s future role in the Asia-Pacific region.

In the coming year, the Foundation hopes to undertake several activities. These

include a fresh program of support for U.S.-China dialogue and exchange programs;

cross-straits exchanges to promote greater dialogue and mutual understanding between China and Taiwan; a bilateral conference to discuss the future of the U.S.-

Indonesia relationship since the installation of the new government in Jakarta; and

meetings in Seoul between U.S. and South Korean officials on policies concerning

the Korean Peninsula. With a $10 million appropriation, the Foundation will expand regional and sub-regional activities focusing on security, economics, and

human rights issues.

CONCLUSION

As the preceding examples of our work emphasize, the Foundation is a field organization that supports local Asian groups and projects, while at the same time maintaining close links with the U.S. foreign policy community. Working through 13 offices in the Asia Pacific region, including China, Hong Kong, and Taiwan, the Foundation strengthens the capacity of local institutions and supports reform efforts.

Through our offices, we identify and establish relationships with creative, reform-
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minded individuals who seek to advance the same goals and interests to which we

are committed.

The Foundation is first and foremost a grant-making organization. We are efficient, maintain a low overhead, and ensure that the majority of our resources are

dedicated to financial and technical support projects in Asia. We are not a research

organization or academic institution, nor are we Washington based.

An appropriation of $10 million will allow the Foundation to undertake programs

to address key development challenges and opportunities. Public funding is essential

to our mission for many reasons. While the Foundation remains committed to expanding private funding, the flexibility and reliability that public funding lends to

the Foundation’s efforts is critical. As an organization committed to American 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 funding is almost always tied to specific projects (as are the

USAID funds for which the Foundation competes) and does not replace public funding, either in scale or flexibility. The Foundation does not solicit or accept private

funds that might compromise our fundamental commitment to support U.S. interests in Asia. Moreover, the flexibility afforded by U.S. government appropriated

funds enables the Foundation to quickly respond to fast-breaking developments and

program opportunities, as demonstrated by our 1999 support for electoral and other

democratization initiatives in Indonesia. It also enables the Foundation to work in

countries such as China and Pakistan that are of high priority to the U.S. but where

USAID and other official U.S. assistance agencies do not operate. The Asia Foundation continues to be a model of public-private partnership and a resource which complements official foreign policy efforts.

In closing, Mr. Chairman, I have cited a few examples of the many Asia Foundation program activities that we consider central to U.S. economic, security, and

other interests in a region of vital importance that will continue to experience

change in the years ahead. We believe that our programs merit a $10 million appropriation for fiscal year 2001, consistent with the President’s request.

As you and your colleagues know, budget constraints have resulted in significant

reductions in the Foundation’s annual appropriation since fiscal year 1996 and the

Foundation has received static funding for the last three years. Even the requested

level of $10 million is below the $15 million the Foundation was appropriated for

a decade prior to fiscal year 1996. We have worked hard to manage our budget, reduce staff and expenditures, and increase our efficiency, as well as to diversify our

funding sources. We have maintained our regional presence through our 13 offices

in Asia, and ensured that the maximum possible amount of appropriated funds are

dedicated to on-the-ground program activities. Nevertheless, this constrained level

of funding has precluded the Foundation from meeting the needs faced in the region

as described. Additional funding is necessary. I assure you that if the Congress appropriates the full $10 million request, the Asia Foundation will use those funds efficiently and effectively in undertaking the critical program activities that I have described.
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NONDEPARTMENTAL WITNESSES

DEPARTMENT OF JUSTICE

PREPARED STATEMENT OF THE NATIONAL, COORDINATED LAW-RELATED EDUCATION

PROGRAM

Dear Mr. Chairman: I am Lee Arbetman, the Coordinator of the National, Coordinated Law-Related Education Program. I am submitting this testimony on behalf

of Youth for Justice, the National, Coordinated Law-Related Education Program

(LRE). We respectfully request the Subcommittee’s appropriations support for fiscal year 2001 at a level of $1.9 million, the same level of funding that LRE received

for fiscal year 2000.

LRE/Youth for Justice is committed to involving young people in each state directly in identifying and implementing solutions to this nation’s epidemic of violence. The program’s approach is to teach young people about the law so that they

can lead their lives within the law. In the last decade, the National Program has

reached millions of at-risk children and trained thousands of teachers, juvenile justice counselors and law enforcement officials.

Law-Related Education, despite its name, has nothing whatsoever to do with legal

or pre-legal training. The National, Coordinated Law-Related Education Program

has a proven record of success in juvenile delinquency and violence prevention. Lawrelated lessons reach at-risk children and juvenile offenders in school and juvenile

justice settings in both urban and rural environments. Youth for Justice meets its

goals by developing and maintaining strong, viable LRE centers in each state. The

National Program leverages a tiny federal investment, $1.9 million in fiscal year

2000, many times over in private sector and state and local money and in in-kind

support from the criminal justice and juvenile justice communities.

The program has two components. The first component of the program is Intervention. This part of the program operates primarily in various kinds of juvenile

justice facilities. In settings ranging from detention centers to training schools and

after-care, Law-Related Education Programs help youth develop problem-solving,

conflict resolution, and communication skills in the context of engaging lessons that

focus on personal responsibility.

The second component, Prevention, operates primarily in elementary and secondary schools. When you visit a school involved in this program, you are very likely

to see a teacher, a judge, a lawyer, the town’s police chief, a law student or a probation officer working with a class of students. In some of the best Youth for Justice

classrooms, police officers co-teach with classroom teachers on a daily basis.

Your home state of New Hampshire continues to be a national leader in adopting

Law-Related Education for use as both a prevention and intervention program. Approximately 12,000 students and 140 teachers benefited from LRE’s 1999 Fall Conference. In 1999, 250 attorneys and judges visited 20,000 students in 208 schools

throughout the state as part of the Lawyer in Every School program. In addition,

forty-one teams of students competed in the expanded 1999 New Hampshire Mock

Trial Competition.

Through the State of Hawaii’s association with the National Program, the Hawaii

State Judiciary and non-profit Hawaii Friends of Civic and Law-Related Education

have expanded Parents and the Law (PAL), a program providing legal information

to teen and at-risk parents. Last year, PAL reached over 450 at-risk parents at

twenty-seven sites including schools, corrections settings, and social service agencies. Assistance from the National, Coordinated LRE Program will also benefit the

state’s efforts to curb youth violence in school settings. Through program funding,

the Hawaii State Judiciary staff have received training and materials to implement

a three-part curriculum devised to stem violence and hate speech in Hawaii’s public

and private schools.

The State of Kentucky is another national leader in the adoption of LRE programs. During the last fiscal year, approximately 89,500 juveniles from the Kentucky juvenile justice system and the Kentucky school system participated in LRE

programs. Of the approximately 46,000 juveniles entering the Kentucky juvenile jus-
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tice system during the last fiscal year, half of those juveniles participated in LawRelated Education programs. In addition, every judicial district in Kentucky has a

fully operational LRE court diversion program.

South Carolina continues to build upon its already extensive LRE program. For

example, South Carolina worked with the Governor’s Community Youth Councils to

introduce the idea of using LRE programs in non-traditional settings including

after-school programs. South Carolina also hosted a statewide safe schools conference and plans to hold its next Youth Summit in April. High school students attending the Youth Summit will focus on a variety of issues such as school violence,

hate crimes, and teen suicide. South Carolina also plans to expand its regional middle school mock trial competitions and will host this year’s National High School

Mock Trial Championships.

On December 3, 1999, Vermont held another successful Youth Summit at the

Vermont Law School in South Royalton, with more than 100 students and teachers

participating. Presenters included many professors and students from the Law

School. The interactive topics included Drafting Curfew Laws and the Fourth

Amendment.

Mr. Chairman, thanks to the continued commitment of this Subcommittee, Youth

for Justice, the National, Coordinated Law-Related Education Program has built a

vital, cost effective program serving the needs of youth throughout our nation. This

program:

—Involves young people in every state in identifying and implementing solutions

to the nation’s epidemic of violence;

—Promotes research-based educational programs that strive for safe, disciplined

and drug-free schools and communities;

—Teaches young people acceptable ways to resolve conflicts;

—Fosters constructive attitudes towards authority figures, such as parents, teachers and police officers;

—Provides young people with meaningful opportunities to serve their communities;

—Promotes understanding of and reasoned commitment to the rule of law along

with tolerance for varied points of view in a free and diverse society; and

—Helps young people understand the democratic process and develop the critical

thinking, decision-making, and problem solving skills to enable their full participation in that process.

LRE/Youth for Justice uses technology as a cost-effective way to expand its reach

by providing up-to-date information to the LRE field. For example, LRE has posted

a planning guide for its Youth Summits on the World Wide Web as well as free competition mock trials. The National LRE Program also provides technical assistance

to state LRE centers to demonstrate how they can use technology to link teachers

and community volunteers throughout the state.

Youth for Justice is committed to providing leadership in the national effort to

stop the outrage of violence committed by and perpetrated against this nation’s

youth. We have the capacity to involve young people directly in helping to identify

and implement solutions. With the support of Congress, Youth for Justice is refocusing all programs to reflect the nation’s growing concern about violence committed by and against young people in our schools and communities.

—Law-Related Education focuses on violence prevention. Last Spring, thousands

of young people from both the school and juvenile justice settings again gathered with public officials to participate in Youth Summits designed to help develop public policy to help prevent violence by and against youth. During this

fifth season of summits, thousands of young people are taking a close look at

the problem of violence by and against youth.

—Law-Related Education is an extraordinarily effective prevention program, but

it is also an extraordinarily effective intervention program—Law-Related Education reaches juvenile offenders in school settings as well as halfway houses,

detention centers, and other non-school settings.

—While Law-Related Education targets at-risk children, it does so not just in

urban settings but also in suburban and rural environments.

THE NATIONAL LAW-RELATED EDUCATION PROGRAM

The National, Coordinated Law-Related Education Program is comprised of five

not-for-profit corporations, each of which is recognized nationally and internationally as a leader in the field of law and civic education: The American Bar Association’s Special Committee on Youth Education for Citizenship; the Center for Civic

Education; the Constitutional Rights Foundation; Street Law, Inc.; and the Phi

Alpha Delta Public Service Center. By combining their expertise and experience as
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teachers, school administrators, juvenile justice professionals, attorneys and professors, these five organizations have successfully administered a nationwide program

in which they have:

—Established and maintained an effective network of delinquency prevention law

and citizenship projects in all fifty states, the District of Columbia and Puerto

Rico, so that accurate information and effective materials can be efficiently distributed and widely used without costly replication of research and development

efforts;

—Provided training and technical assistance to the state projects in this network

so that federal funding effectively leverages public and private funding appropriate to each state;

—Established innovative law and citizenship programs for at-risk youth in urban,

rural and suburban communities;

—Developed and field-tested quality, research-based curricular materials for children—kindergarten through grade twelve—in public and private schools, juvenile detention centers, after-school programs and court-related diversion programs;

—Organized special initiatives on violence prevention, drug prevention, juvenile

justice and urban education, publishing materials and sponsoring training

events nationwide; and

—Mobilized thousands of volunteers with expertise in law, public policy, drug and

alcohol abuse prevention, juvenile justice and other areas.

We at the National, Coordinated Law-Related Education Program acknowledge

with pride the participation of dozens of organizations and thousands of individuals

from the education, legal, law enforcement, judicial and juvenile justice organizations. The Program has had assistance from the executive branch and strong bipartisan support in Congress for the outstanding delinquency prevention programs and

materials it has developed and implemented.

In addition, it is a particular source of satisfaction to note that similar partnerships have been developed in most of the states participating in this network. A

small amount of federal support has provided the impetus to attract funding from

local organizations, agencies and foundations as well as large numbers of volunteer

hours. One important goal of this Program is to continue to provide the support and

technical assistance necessary to enable all of the states to build their own public/

private partnership networks, effectively leveraging a small amount of federal assistance to build strong, well-funded local and state programs.

EVALUATIONS OF LAW-RELATED EDUCATION

For the past two decades, researchers have consistently reported that law-related

curricula and instruction make a positive impact on youth, when compared with traditional approaches to teaching and learning law, civics and government.

The Office of Juvenile Justice and Delinquency Prevention has noted that evaluations of Law-Related Education Program have been ‘‘encouraging... confirming

the previous findings that such education serves as a significant deterrent to delinquent behavior’’. Eighth Analysis and Evaluation of Federal Juvenile Delinquency

Programs, U.S. Department of Justice, OJJDP, p. 60 (1985). The Twelfth Analysis

and Evaluation of Federal Juvenile Delinquency Programs published in 1988 similarly states, ‘‘[A] national study suggests that Law-Related Education, when properly implemented, can reduce the tendency to engage in delinquent behavior.’’

A 1993 study of a Law-Related Education diversion alternative in Kentucky’s Designated Court Worker Program showed both improved perceptions of the police and

a low recidivism rate (10.5 percent after one year).

A review of the research in Law-Related Education and related fields (including

scholarly papers, dissertations, journal articles and book chapters) conducted by Dr.

Jeffery W. Cornett and published on April 1, 1997 in monograph form concludes

that LRE programs have a positive effect on student knowledge about law and legal

processes, and about individual rights and responsibilities. In addition, the report

concludes that there is evidence that LRE programs have a positive influence on

student attitudes and behavior. Research studies indicate that effective LRE programs have improved juveniles’ attitudes toward the justice system and toward authorities. Research findings also indicate a link between particular LRE programs

and youth who, as a result of Law-Related Education, exhibit more law-abiding behavior and commit fewer delinquent acts.

In 1998, the National, Coordinated Law-Related Education Program released impact data from demonstration programs in Los Angeles, Chicago and Washington,

D.C. showing the positive effect that Law-Related Education can have on the highest at-risk youth. This data was the culmination of a three-year effort to test the
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impact of Law-Related Education on at-risk youth in the most challenging environments.

In Santa Clara, California, the Fresh Lifelines for Youth (FLY) program, which

incorporates Law-Related Education, Mentoring, and Social Needs Assessment, has

been found to have a significant impact on the behaviors of at-risk youth. At-risk

youth, ages 12–17, are referred to the program by a probation officer, juvenile court,

school officials, or a neighborhood accountability board. The program strives to improve knowledge, problem-solving skills, attitudes, and behaviors. A recent evaluation of forty FLY participants found that the participants’ negative behaviors decreased by 75 percent while their positive behaviors increased by 32 percent. Participants’ skills regarding problem solving, critical thinking, and managing conflict

also significantly improved.

The National Program has a unique and remarkable record of achievement. Continued support for the National, Coordinated Law-Related Education Program is

crucial for the following reasons:

—First, without congressional support it is clear that Law-Related Education will

die.

—Second, the federal government and, in particular, the Congress, has made a

substantial investment over more than a decade in the creation of a National,

Coordinated Law-Related Education network and infrastructure including coordinating organizations in every state.

—Third, only a national program will undertake national initiatives that benefit

the entire country, such as national training; national technical assistance;

state financial assistance; new program and curriculum development such as

Law-Related Education’s highly successful and acclaimed Youth Summits; and

the replication of successful state programs and the avoidance of unsuccessful

pilot programs.

—Fourth, federal money is seed money used to sustain a national program which

raises approximately seven times the federal support through state legislative

support, private donations and in-kind support.

For all of these reasons, the National, Coordinated Law-Related Education Program is seeking earmark support at the $1.9 million level.

We thank you, Mr. Chairman and the members of this Subcommittee, for your

support over all these many years and we ask for your continued support.

PREPARED STATEMENT OF THE NATIONAL CONSORTIUM FOR JUSTICE INFORMATION

AND STATISTICS

Dear Chairman Gregg: The Membership Group of SEARCH submits this testimony seeking appropriation support for our National Technical Assistance and

Training Program in the fiscal year 2001 Byrne discretionary program appropriation

for the Bureau of Justice Assistance (BJA), U.S. Department of Justice (DOJ). The

National Technical Assistance and Training Program received an appropriations

earmark in fiscal year 2000 in the amount of $1.5 million. We respectfully submit

this testimony to request funding at the $2 million level for fiscal year 2001.

SEARCH is a nonprofit criminal justice organization governed by a Membership

Group comprised of one gubernatorial appointee from each of the 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. For over 30 years, we

have dedicated our efforts to assisting state and local justice agencies combat crime

and administer justice through the effective and responsible use of information and

identification technologies.

SEARCH’s National Technical Assistance and Training Program provides no-cost

assistance to all components of the state and local criminal justice system with respect to the development, operation, improvement and/or integration of all types of

justice information systems. This significant program not only helps state and local

agencies work more efficiently and effectively through the use of advanced information technology, but it also creates the foundation for a national information infrastructure for justice systems.

SEARCH is experiencing an explosive growth in demand for the program. In

1999, we provided a 30 percent increase in the number of technical assistance efforts as compared to 1998. We expect to experience at least an additional 30 percent

increase in technical assistance provided in 2000. There are a number of reasons

for this demand, including the success of grant programs such as the Edward Byrne

Memorial State and Local Law Enforcement Assistance Program and the Local Law

Enforcement Block Grants Program, which have provided seed money for justice information systems automation and integration. Also impacting the demand for

SEARCH technical assistance and training services is the critical need of the na-
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tion’s criminal justice agencies to share complete and accurate information quickly,

which is manifested in their efforts to integrate and connect justice information systems.

We want to commend BJA and its fine, professional staff. Working in partnership

with SEARCH, BJA has provided strong, national leadership to create opportunities

for information systems training and technical assistance for state and local criminal justice officials.

Technical Assistance Program

SEARCH provides technical assistance via written correspondence, telephone consultations, electronic mail, and/or through an Internet Web site, and when the needs

of agencies require, SEARCH provides technical assistance on-site or at our National Criminal Justice Computer Laboratory and Training Center in Sacramento,

California.

In-house Technical Assistance

Under fiscal year 2000 funding, SEARCH will respond to hundreds of telephone

calls and emails requesting assistance. The nature and scope of in-house technical

assistance varies considerably, but can involve the following: providing technical

consultations on the planning, implementation or operation of automated systems,

such as network configurations, software installations and technical innovations;

conducting in-depth research; making referrals to appropriate resource providers;

and answering questions on a wide range of justice automation topics.

SEARCH has also taken advantage of the Internet to expand the reach of its technical assistance program. SEARCH’s Web sites are specifically designed so that justice agencies can immediately access information on a variety of technical issues related to justice information management. The Web sites offer virtual libraries of information to justice practitioners, including published articles, documents and white

papers; references to other justice agencies using particular technologies; interactive

discussion forums where practitioners can share information with peers and experts;

databases of technology acquisition documents such as requests for proposals; and

links to other justice technology resources and information.

On-site Technical Assistance

The Technical Assistance Program also provides on-site assistance to agencies

throughout the nation that are predominantly nonautomated or lagging in automation, or that have special automation needs. Since the program’s inception, SEARCH

has provided technical assistance to scores of agencies in every state, representing

all components of the criminal justice system. The majority of technical assistance

is completed within one month, consists of site visit(s) by staff, and concludes with

the issuance of a formal report setting forth findings and recommendations.

Selected Examples of Assistance

The following illustrates just a few examples of SEARCH technical assistance in

the past year and the broad range of agencies receiving assistance.

New Hampshire.—SEARCH provided input on and review of software applications

under consideration by Cheshire County as part of its plans to upgrade its jail information management system. The county had called the system review meeting in

part to explore the possibility of participating in a joint jail management system

procurement. Representatives of Merrimack and Belknap counties also participated

in the meeting. In addition, SEARCH reviewed the request for proposals (RFP) prepared by the Cheshire County House of Correction for a new automated system.

This activity was a follow-up to technical assistance SEARCH provided earlier in

1999 to the New Hampshire Administrative Office of the Courts and State Police

on a project to integrate the information systems of all criminal justice system participants in the state.

Alaska.—SEARCH helped the State Department of Public Safety by reviewing its

summary needs assessment document—which addresses a migration plan for the

Department’s law enforcement and repository applications—and issuing a report of

findings and recommendations. SEARCH also helped the University of Alaska-Fairbanks with forensic computer issues and the Anchorage Police Department with

identifying users on a multiuser, multichannel Internet chat network.

Colorado.—At the request of the Board of Executive Directors of the Colorado Bureau of Investigation (CBI), SEARCH conducted several site visits to assess the current information technology status of CBI. Staff is helping the CBI design a series

of management reports to assess critical performance measures of key systems and

resources. Staff also conducted a preliminary assessment of the CBI fingerprint

identification capability in order to assist CBI in achieving greater efficiency in this
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area. Staff also assisted the Denver District Attorney’s Office on cybercrime issues

relating to on-line fraud and tracking email and Internet addresses.

Hawaii.—SEARCH worked with the Hawaii Criminal Justice Data Center in the

Attorney General’s Office to assist in organizing for statewide integrated systems

development. The long-term integration effort will include the systems used by state

and local courts, corrections, law enforcement, prosecution, probation, parole and

community supervision agencies. SEARCH provided recommendations regarding

general planning issues and approaches.

Kentucky.—SEARCH is working with state agencies in Kentucky on planning for

statewide integrated justice information systems. At the request of Kentucky’s Chief

Information Officer and state justice officials, SEARCH met with the Uniform

Criminal Justice Information System Committee to develop the concept for statewide integrated justice systems and is establishing project ‘‘next steps.’’ At the local

level, SEARCH provided information to the Jefferson County and Louisville police

departments regarding their efforts to plan for a new records management information system that is integrated between the departments and with other city and

county agencies. Staff also provided guidance to the State Police on Internet crime

investigation issues.

Maryland.—The Baltimore Criminal Justice Coordinating Council has sought

SEARCH’s assistance in efforts to develop a strategic plan for integrated information systems.

New Jersey.—SEARCH visited the Millville Police Department to assist in its efforts to upgrade hardware and software, implement mobile computing, upgrade

radio systems, integrate a crime mapping system, and tie into the state Automated

Fingerprint Identification System (AFIS). SEARCH made recommendations for improvement, and helped the Department define the scope of and objectives for the

project. As part of a long-term assistance project, SEARCH is also working with the

New Jersey Department of Law and Public Safety on a major systems design, development and implementation plan. SEARCH has reviewed an RFP, and will assist

in developing a formal business plan, reviewing technical documentation and automation solutions, and reviewing—and making recommendations on—network security plans. In other assistance, SEARCH helped the Rockland County Sheriff’s Department with software issues, and provided information on hard drives to the New

Jersey State Enforcement Board.

New Mexico.—SEARCH is a member of an Office of Justice Programs (OJP)

‘‘Technical Assistance Response Team’’ for Rio Arriba County. OJP is working to

create an infrastructure to support a ‘‘balanced and comprehensive approach to reduce substance abuse and control associated crime’’ in this target area. SEARCH

is scheduling site visits to the justice agencies in the jurisdiction as part of an expected long-term technical assistance effort. In addition, SEARCH is working with

the Bernalillo County Metropolitan Criminal Justice Coordinating Council on its effort to integrate justice systems within the county and the City of Albuquerque, as

well as integrating those local systems with state and federal justice agencies.

SEARCH also assisted the New Mexico Attorney General’s Office with an Internet

fraud case and provided information on federal justice funding legislation to representatives of the University of New Mexico Justice Information Sharing Project.

South Carolina.—The State Law Enforcement Division, which is interested in establishing a computer crime analysis unit, contacted SEARCH for assistance.

SEARCH provided the agency with assistance regarding task force and laboratory

operations, software requirements and other issues involved in setting up such a

unit. SEARCH also helped the agency by reviewing specifications for forensic computers and providing advice on hard drive issues.

Texas.—SEARCH made several site visits to Tarrant County as part of an effort

to integrate justice information within the county, regionally and with state justice

systems. SEARCH also helped the El Paso County Sheriff’s Department with hard

drive issues; the El Paso County District Attorney’s Office with hard drive and

email trace information for a child pornography case; the FBI’s Houston Field Office

with tracing an Internet Provider address; and the state with issues related to localto-state AFIS connectivity. In an upcoming assistance, SEARCH will assist with developing a strategic plan for migrating the Harris County integrated justice information systems to a Web-based system.

Vermont.—In an upcoming weeklong site visit, law enforcement investigators in

Vermont will attend SEARCH’s ‘‘The Investigation of Computer Crime’’ training

course, which is designed to provide participants with an understanding of computer

technology, its application to criminal endeavors, and the issues associated with investigating computer crimes. In addition, representatives of Vermont State law enforcement, corrections and court agencies, and an organization representing local
377

prosecutors and sheriffs, received SEARCH training on strategies for successfully

planning and implementing integrated justice information systems.

Integration Technical Assistance

There is a pressing need to provide more extensive, long-term assistance to states

and/or agencies within states to address the technically complex and sophisticated

planning, design and implementation issues associated with developing integrated

or consolidated information systems within and between justice agencies; and to assist these jurisdictions in developing state-, county- or citywide plans for justice information systems and technology and criminal records improvements. In response,

SEARCH provides a limited number of agencies with technical support for extended

periods of time, including multiple on-site visits, research and, oftentimes, complementary training sessions. During such a project, SEARCH often works with a

variety of justice agencies, including police departments, courts, and prosecutor, probation, parole, corrections and other case management agencies.

This type of on-site assistance typically involves helping a state or agency establish an automated justice information system; evaluate and plan for statewide integration of existing systems; or enhance, expand or implement a computerized criminal history repository program. SEARCH is providing such long-term technical assistance to agencies in Arizona, Arkansas, California, Iowa, Massachusetts, Michigan, Minnesota, Montana, Nebraska, North Carolina, Virginia and Wisconsin and,

as previously noted, in New Hampshire, Hawaii, Kentucky and Texas. In fiscal year

2001, SEARCH expects to provide on-site technical assistance to more than 40 justice agencies.

National Training Program

Since its inception, SEARCH’s National Technical Assistance and Training Program has trained more than 22,500 criminal justice officials from every state in the

use of computers and other information technologies. In fiscal year 2000, SEARCH

will train more than 2,000 state and local criminal justice officials across the nation,

both on-site at agencies and at SEARCH’s National Criminal Justice Computer Laboratory and Training Center in Sacramento, California. In Spring 2000, SEARCH

will implement a mobile training center that uses a variety of laptops and other mobile equipment to provide our training at more sites nationally.

Training courses focus on the development, use and implementation of information technology in justice agencies, including investigating computer crime; techniques for seizing and examining microcomputers as evidence; and conducting Internet crime investigations (both basic and advanced courses). During fiscal year 2000,

SEARCH also developed two new courses: The Investigation of On-line Child Exploitation and Basic Local Area Network Investigation.

Staff from justice agencies in Alaska, Colorado, Hawaii, Maryland, New Hampshire, New Jersey, South Carolina and Texas were among those who attended our

training this fiscal year. SEARCH conducted our ‘‘Investigation of Computer Crime’’

course in a number of states, including Colorado, and is scheduled to do so this

Spring in Texas and Vermont. In addition, in fiscal year 2000, SEARCH held a firstof-its-kind combined technical assistance/training exercise for attendees of our ‘‘Advanced Internet Investigations’’ course. During the exercise, attendees undertook a

full penetration attack to test the security of a large state automated justice system.

National Cybercrime Training Partnership

During the past four years, the Computer Crime Unit of the DOJ, in conjunction

with the National White Collar Crime Center, has conducted a federal-level project

to define how to best train and equip the nation’s criminal justice investigators and

prosecutors to deal with computer crime. The organizing agencies invited SEARCH

and other key justice agency training organizations to participate in a series of

meetings to discuss the mission and functional objectives of computer crime training

for state and local justice practitioners. The Partnership continues to identify needs;

develop new, advanced training courses; and set standards for national justice training courses in the area of curbing computer crime.

Technical Assistance and Training Program Materials

SEARCH’s National Technical Assistance and Training Program also includes the

preparation, publication and national dissemination of materials and reports that

assist criminal justice agencies in acquiring and using computers and other information technology. For example, SEARCH publishes quarterly Technical Bulletins that

identify and evaluate information systems and technologies that have existing or potential application in criminal justice management.
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Conclusion

Without question, federal support for the National Technical Assistance and

Training Program makes a vital contribution to the war on crime. For a modest federal investment, leveraged many times over by state and local funds, a critical contribution is made to the ability of state and local criminal justice agencies to provide—and to share—timely, accurate and compatible information for use in apprehending, prosecuting and sentencing offenders.

Accordingly, we respectfully request that the Subcommittee act to ensure fiscal

year 2001 funding of SEARCH’s National Technical Assistance and Training Program. We thank you, Mr. Chairman, the members of your Subcommittee and the

Subcommittee staff for your continued support.

PREPARED STATEMENT OF THE NATIONAL RECREATION AND PARK ASSOCIATION

Dear Mr. Chairman: We write to share the views of the National Recreation and

Park Association on selected fiscal year 2001 appropriations for the U.S. Department of Justice. We respectfully request that this statement be included in the

record.

The National Recreation and Park Association is a not-for-profit organization of

some 25,000 citizens, professionals and public and private institutions involved primarily with public park and recreation systems and services. These individuals and

agencies provide an array of prevention and intervention discretionary time activities for children and youth from all backgrounds and circumstances, including and

especially those in high-risk environments. Many recreation services also emphasize

specialized programs that focus on gang and substance abuse prevention, development of employment skills, and tutoring and mentoring, in addition to traditional

recreation programs. Because of their multidisciplinary, community-based approach,

recreation services reach many individuals often alienated from other settings or

providers.

The Department of Justice, particularly the Office of Juvenile Justice and Delinquency Prevention (OJJDP), administers several authorities that could potentially

aid local park and recreation agency efforts to deter youth from behaviors or circumstances that put them at risk. Local park and recreation agencies, whose principal mission is creative programming during non-school hours and vacation periods,

are generally eligible for OJJDP funds and use Title II B and Title V grants to provide recreation-as-prevention programs. With the reauthorization of the Juvenile

Justice and Delinquency Prevention Act still undetermined, the continued availability of these funds through the appropriations process is critical.

RECOMMENDATIONS

While local public park and recreation services are supported principally by local

general funds, many public recreation-as-prevention programs are stronger today

because of activities aided by federal and state funds. We urge increased national

investment in public community-based crime prevention efforts that positively engage children and youth.

Because the JJDPA has expired, ‘‘authority’’ for funds and setting of priorities

rests principally with the respective appropriating committees. This process appears

to encourage the practice of earmarking funds for specific organizations or projects,

at least some of which have narrow impact and serve a limited number of youth.

Earmarked funding for the Office of Juvenile Justice and Delinquency Prevention

escalated from $18 million in fiscal year 1999 to some $38 million in fiscal year

2000. This practice makes it increasingly difficult to fund the most innovative programs, which would likely be discovered in an open competitive process. The department and OJJDP should be given discretion to support projects with the highest

probability of success. Assistance should be sufficiently flexible to allow states and

localities to address conditions specific to their environments. We encourage the

Subcommittee to give priority to competitive funding for effective and innovative

youth development and prevention initiatives.

The President’s budget request for fiscal year 2001 includes $272 million for juvenile justice programs, including level funding for Title II B formula grants to the

states—$89 million—and for Title V incentive grants for local delinquency prevention programs—$95 million. We urge the Subcommittee to consider additional funds

for prevention and formula grants to reflect the growing understanding that prevention is a key element of a balanced approach to reduce crime. Fiscal year 2001 appropriations for discretionary grants and formula grants should be commensurate

with documented needs. As with reauthorization, funding for prevention programs

should be given priority and not diminished in favor of punitive programs and ini-
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tiatives. We recommend that the Congress invest at least $250 million in Title V

programs.

Furthermore, programs funded by public fiscal resources should be available principally through competitive public processes with local recipients having the authority to pass through funds to private providers when the scope and quality of services

will be enhanced and when service efficiencies will result. Increasingly, it seems, the

appropriations process provides direct appropriation of public resources to certain

private entities. We urge the Subcommittee to reconsider this practice, emphasizing

instead public services and public-private partnerships. Public recreation agencies

are among the most aggressive of all local service providers in terms of outreach

and collaboration, and the enclosed publication, Promise and Progress: Recreation

and Police Partnerships for Youth, highlights several local actions that illustrate

this point.

WHY INVEST IN PUBLIC RECREATION?

Recreation-as-prevention programs should be considered central components of

crime prevention strategies. Public recreation professionals and citizen volunteers

are on the front lines, with over 85,000 public park and recreation sites in some

5,000 municipal and county systems, and another 20,000 state and interstate sites.

Public recreation services typically focus on the age cohort most prone to crime—

youth ages 10 to 17—during the hours when crime peaks—between 3 and 8 p.m.

The services and sites counter the combined impact of boredom and the too-frequent

absence of positive, caring role models. They are effective alternatives to more costly

actions typically associated with adjudication and incarceration, and often lead to

many positive secondary benefits (i.e. health promotion, community building and social development). Notwithstanding this record of achievement, many public programs cannot be expanded or go unfunded because of financial constraints. In these

situations, federal assistance and support are critical.

The following examples illustrate how principally local and state public funds

have been invested in resources and services yielding direct community benefits.

—In Bowling Green, Kentucky, the Parker Bennett Community Center has

partnered with the local housing authority to serve high-risk youth ages 6–16.

Students at Parker Bennett Elementary School who have participated in the

community center’s supervised programs have increased their state aptitude

(KERA) scores 45 percent.

—In 1997, the recidivism rate for all of the diversion programs offered through

the Phoenix, Arizona, Parks, Recreation and Library Department’s At Risk

Youth Division was 14.2 percent (six months) and 22.4 percent (one year). Program administrators anticipate further reductions with changes to the city’s

recreation-based Curfew Diversion Program.

—In 1993, the City of Charlotte and Mecklenburg County, North Carolina, Park

and Recreation Department developed an array of programs and activities for

people who reside in various shelters and others referred from Travelers Aid.

Since July 1993, more than 9,000 people have participated in the programs and

activities, 30 percent of who have been children.

—In Cincinnati, Ohio, city and federal officials directly attribute a 24 percent drop

in the number of criminal incidents to the Winton Hills late-evening recreation

initiative.

—Project PRIDE in Santa Ana, California, supplements education and human

services with traditional recreation activities to ‘‘teach young people the skills

they need to remain gang free, drug free and in school.’’ City administrators estimate the annual cost per person at $41.67, based on an average of 12,000 participants in five programs.

—Some 8–10 youth each month are diverted from the juvenile court system

through the Street Outreach Program in Olympia, Washington. The success of

the program relies heavily on the public recreation agency’s staff.

—The KIDCO Program in Tucson, Arizona, responds to the growing number of

‘‘latchkey’’ kids. It serves over 3,000 children and youth and has recently contributed to a 52 percent decrease in reported crime.

We believe our recommendations are sound and well within the nation’s fiscal capacity to address. I have asked Barry Tindall, director of Public Policy, and Heather

Sidwell, policy associate, to be available to you to provide additional information or

to answer questions. Both may be reached at 202/887–0290.
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PREPARED STATEMENT OF THE CITY OF GAINESVILLE, FLORIDA

Mr. Chairman: On behalf of the City of Gainesville, Florida, I appreciate the opportunity to present this written testimony to you today. The City of Gainesville is

seeking federal funds in the fiscal year 2001 Commerce, Justice, State and Judiciary

Appropriations bill to assist with an innovative Joint Communications Technology

Project the City is undertaking to improve public safety.

Joint Communications Technology Project

The City of Gainesville is seeking $5.4 million for a joint communications technology project to enhance public safety. The goal of this effort is to facilitate communication between our urban area public safety agencies through the use of systemwide communications software and technology upgrades. The City and Alachua

County have initiated a joint communications system for the future. The impact for

the entire region is considerable, since this county serves as the regional center for

much of rural north Florida’s medical care, disaster management, and criminal justice services.

The agencies involved in this project are: Alachua County Government (14 internal user agencies), Alachua County Sheriff (includes Corrections Facility and Civil

Division); Cities of Gainesville (8 internal user agencies), Archer, Newberry, High

Springs, Alachua, LaCrosse, Waldo, Melrose, Hawthorne, and Micanopy; School

Board of Alachua County, Santa Fe Community College, University of Florida,

Gainesville-Alachua County Airport Authority, Gainesville Regional Transit and

Gainesville Regional Utilities (electric, gas, water, wastewater, telecommunications).

To continue the Joint Communications Technology Initiative to the next step requires the purchase of enhanced software and new equipment. The urban area public safety agencies will need the following:

—Mobile Lap Top Computers/Data Terminals for urban area public safety agencies ($4.8 Million)

—Crash Reporting Software for urban area law enforcement agencies ($120,000)

—System-Wide Communications Software ($200,000)

—Geographical Information System (GIS) Software and WEB Software ($280,000).

In order to meet the needs of our urban area public safety agencies, a three-phase

project is proposed.

Phase I

During this phase the agencies would purchase sufficient lap top computers for

installation in each operational vehicle. Included with the purchase of the lap tops

will be a mount for installation, installation cost, a wireless communication device,

and network system software. Additionally, the Gainesville Police Department will

initiate a new WEB page in preparation for mapping software for the Internet. The

goals of Phase I will be to (1) Equip all public safety vehicles with lap tops that

can communicate with the department’s communication software, (2) Establish an

in-office GIS system, (3) Create a mapping resource to be used by management to

effectively deploy resources.

Phase II

During this phase the urban area law enforcement agencies would purchase additional software and conduct extensive training to use the mobile lap tops to write

police incident and crash reports. The goals of this phase will be to add the second

use of report writing to the utilization of the lap top computers and to incorporate

additional ‘‘data layers’’ from partner agencies into the GIS system.

Phase III

During this phase the law enforcement agencies would purchase additional GIS

software to allow the mobile lap tops the capability to enter and use the GIS information provided by the multiple user agencies. Also during this phase, we would

develop a method of displaying the appropriate GIS information (Crime Maps) over

the Internet for use by other governmental agencies and the public.

The need for the addition of lap top computers to this system is partially driven

by the Federal Government’s ‘‘re-farming’’ of radio frequencies through the Federal

Communications Commission. Due to this ‘‘re-farming’’ and the high cost of radios,

law enforcement agencies will no longer have radios mounted in department vehicles. Radios ‘‘mounted’’ in vehicles traditionally have a much higher wattage output

and therefore are more reliable and robust than portable radios. Additionally, portable radios can be lost or damaged during emergency incidents. This creates a critical need for an alternative means for officers to be able to communicate with the

dispatch center. Mobile lap top computers with the additional communication and

software components can become the secondary means of communication utilizing
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the infrastructure currently being developed for the Alachua County Joint Communication Center.

The use of lap top computers can fulfill the critical need for a second communication device, and at the same time help accomplish several other public safety objectives, including in-car computer aided dispatch, automated report writing and the

use of a GIS (Crime Mapping, etc.).

Result #1 Mobile Computer Aided Dispatch

Utilizing lap top computers as in-car computer aided dispatch terminals significantly increases public safety officers’ communications ability. Computers used in

this manner can perform many important tasks.

First, the computers can send and receive information between the officer and the

dispatcher, including calls for service. Non-emergency calls are forwarded from the

dispatcher to the appropriate unit without the need to transmit the information verbally over the radio, thus saving ‘‘air-time’’ for use in emergency situations. This

also improves the reliability of the information communicated and virtually prevents

the need for the information to be repeated. This also decreases the need for additional dispatchers even when the number of calls for service increases.

Secondly, officers and supervisors can find the location of other officers and check

on their current status. This eliminates the need for officers to request this information from a dispatcher and gives all members of the agency a complete picture of

the availability of officers for calls for service. Officers can also refer to information

about calls that have not yet been dispatched in addition to information regarding

previous calls for service.

Third, officers can communicate vehicle-to-vehicle. The computers can be used to

send messages from one officer to another. This also eliminates the need for officers

to waste ‘‘air-time’’ for less important transfer of information.

Fourth, law enforcement officers can conduct FCIC/NCIC checks on wanted persons and stolen vehicles without having to tie up a dispatcher. This allows officers

to check a large number of persons and vehicles, which will significantly increase

the number of people who are arrested for warrants and the number of recovered

stolen vehicles. A single dispatcher can only handle 1 request at a time, while the

computer system, can handle numerous request all at the same time.

Result #2 Mobile Automated Report Writing

Area law enforcement officers currently hand write law enforcement reports that

are manually filed. A small portion of that report is then entered into a computer

database at some later date. This method of capturing the information for reports

is antiquated and causes a number of problems.

Problem #1.—The time lapse between when a report is started and the time that

is entered into the computer makes the information less useful than it would be if

it were immediately entered. This time lapse prevents any practical analysis of the

information to be used for effective management of resources.

Problem #2.—The information in a report can only be retrieved by removing the

report from a file folder. Record’s personnel spend an enormous amount of time

copying, retrieving and re-filing reports. In fact, copies of each report that is generated by law enforcement personnel must be made for other parts of the department, including crime analysis, detectives, intake, etc. before the report can even

be filed. Reports must also be copied for other agencies including the State Attorney’s Office, the Public Defender and private attorneys. Reports are also generated

for private citizens and law enforcement personnel who are going to court. Whenever a copy of a report is requested, a records technician must hand search for the

report, copy it, and then return the report to the file. Normally the entire report

is copied and forwarded, even if the person only needed a specific portion of the report. This time spent on requesting reports and completing those requests is a wasted resource. Once filed, electronic reports could be forwarded to anyone electronically and could be printed by any department member anywhere in the department.

Problem #3.—The amount of storage space required to house all of the completed

law enforcement reports is immense. As a result, for example, reports are only kept

at the police department for 3 years. The reports are then removed from the file

one at time by a records technician. The reports are then re-filed in a new folder

and transported to a storage warehouse. Any report over three years old, must be

retrieved from a storage company warehouse. This storage company is located several miles from the police department and must be accessed several times a month,

further wasting valuable resources. Electronically filed reports take up virtually no

space at all and can be electronically backed up for security purposes and stored

on some form of optical disk. This would eliminate the need for an entire room to

store reports.
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Problem #4.—Handwritten reports that require duplicate information must each

be completed one at a time. Electronic reports can be created that will take the captured data and fill in the data on subsequent or additional report forms. Therefore

when a person is arrested an officer would only be required to enter the suspect’s

personal information 1 time. Today, an officer might be required to enter the information on several report forms, including the original report, a sworn affidavit, a

vehicle tow sheet, a forfeiture request, an ATF firearms report, etc. Thus filing the

reports electronically would save the officers significant time needed to complete a

report.

Problem #5.—Many handwritten reports are nearly illegible and have numerous

spelling and grammatical errors. Some of the current report forms are also 4 or 5-

part NCR paper. Usually only the first one or two copies of the NCR forms are legible. Filing reports electronically would drastically reduce the number of spelling

and grammatical errors, it would allow officers to easily correct errors in reports,

and it would eliminate the need for NCR paper.

Result #3 Geographical Information System (GIS)

For years Law Enforcement Agencies have tracked crime using pin maps to geographically show where crimes were occurring. This method of tracking crime has

become impractical and too time-consuming for all but the smallest of law enforcement agencies. The advent of computerized geographical information programs, like

‘‘ArcView’’ has enabled law enforcement agencies to return to the pin map method

of displaying crime patterns, but in a much more effective manner. Additionally,

mapping programs can contain several hundred data layers that can be utilized by

numerous public and private agencies. The following objectives are examples of how

a GIS system will enable us to use the information immediately entered on mobile

lap top computers.

—Electronic Pin Maps.—Once a GIS system is established, all reports that are

generated will be mapped in several formats. Maps will be generated for calls

for service. This enables agencies to properly decide where to deploy their limited resources. Electronic pin maps also can be made time sensitive as well as

location sensitive. Officers working various shifts can identify hot spots by time

and location. A hot spot during the day, may not be a hot spot at night, or visa

versa. Additional maps can be generated for UCR (Unified Crime Reports)

crimes, Crime Analysis identified crimes, and calls verified by Florida State

Statutes. Information that is not immediately available is of little or no use

when it is entered at a later date.

—Management of Resources Utilizing Computer Statistics.—Many law enforcement agencies have begun to use a method of management which utilizes crime

data. Law Enforcement supervisors are being held accountable for the level or

increase in crime in their assigned geographical area. The Gainesville Police Department has begun the process of dividing the City into districts. Each District

Commander will be held responsible for the criminal activity and the utilization

of resources in that geographical area. GIS information will be used to manage

the department’s limited resources.

—WEB Mapping.—Sharing the information gathered in an effective manner is another key component to this process. Many of the Law Enforcement Agencies

in Alachua County currently have a WEB site on the Internet. In the future,

crime maps developed by the GIS system will be used to display maps over the

Internet. Maps will be made available to other law enforcement and governmental agencies and the public at large.

—Integration with other Agencies.—In order for a geographical information system

to be truly effective, it requires the cooperation of several agencies. GIS systems

with hundreds of layers of data can be a useful tool for all the cooperative agencies. Law Enforcement personnel will be able to view maps and aerial or satellite photographs of any given area of the city. Crime data and analyses can

be placed on top of those maps and/or photographs at specified points that will

be available to all users. Law enforcement personnel will provide numerous layers of data to the system and will in return be able to access the layers from

other agencies. Alachua County already has begun the process of developing a

GIS and the Gainesville Police Department is currently working with the University of Florida to develop a method of converting data to a format used by

‘‘ArcView’’.

In closing, federal support is critical for this initiative. It is our hope that the Subcommittee will give our request every consideration throughout the fiscal year 2001

appropriations process.
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PREPARED STATEMENT OF THE ALACHUA COUNTY BOARD OF COMMISSIONERS, ALACHUA COUNTY, FLORIDA

Mr. Chairman: Thank you for allowing the Alachua County Board of Commissioners to present written testimony before your Subcommittee regarding the County’s Comprehensive Management of Drug-Involved Offenders Initiative. Alachua County is seeking $2.5 million to develop a comprehensive, coordinated approach to

the management of substance-abusing and addicted offenders in the community.

The County’s Public Safety Coordinating Council which convenes regularly to address ways to manage the local jail population, anticipates that in the next few

years, Alachua County, like many other communities, will be faced with the need

for additional jail space. Prior to building costly jail beds, Alachua County would

like to fully realize all possible alternatives.

A comprehensive plan to manage substance involved offenders is an innovate approach that could prove to be an effective keystone to alleviating jail overcrowding

by reducing recidivism rates and the incidence of drug-related crime. Current treatment sources are inadequate to meet the needs of this population. This pilot project

includes a cost-benefit analysis to compare the long-term benefit of a comprehensive

treatment model versus an incarceration/incapacitation model. The impact for the

entire region is considerable since the County serves as the regional center for much

of north Florida’s medical care and criminal justice services.

Alachua County has many advantages which makes it an ideal site for this pilot

program. The County has long served as a model and a resource for criminal justice

alternative programs in the State of Florida. Many Florida pretrial release and alternative sentencing programs consulted with Alachua County’s Court Services Department as they developed similar services for their counties. The Alachua County

Drug Court was one of the first 25 Drug Courts in the nation and has also served

as a model for their Florida Drug Courts. Court Services Department staff are active in state-wide organizations that provide a network to exchange information and

share innovations. Alachua County was also recognized as a leader by the Florida

State Legislature’s Advisory Council on Intergovernmental Affairs in its 1993 report, Intergovernmental Relations in Local Jail Finance and Management in Florida—A Comprehensive Report. Further, the community linkages in Alachua County

and the array of programs provided under one umbrella in Alachua Court Community Services Department provide a unique opportunity to demonstrate the impact

of a comprehensive effort.

Alachua County has supported innovative alternative methods of managing offenders for almost 25 years. The County currently funds a Department of Court

Services which includes a comprehensive array of alternatives including: Pretrial

Services; County Probation; Community Service; Drug Court; Work Release Facility;

and A Residential Treatment Program for Drug Addicts.

In fiscal year 1999, these programs completed more than 7,700 pre-trial release

investigations, monitored more than 1,000 defendants on pre-trial release, supervised 1,100 probationers and coordinated more than 3,500 cases where community

service work has been required by the Court. In addition, the Drug Court will treat

and monitor 100 addicted offenders per day, the Work Release Program will house

50 sentenced offenders and/or pretrial defendants per day. Metamorphosis, the

County’s residential treatment program, will serve 17 volunteer and court ordered

addicts each day in a therapeutic community.

In addition to the Court Services programs, Alachua County had 280 individuals

being supervised by the Florida Department of Corrections on drug offender probation during fiscal year 1998. A ‘‘snap shot’’ of individuals arrested in a one-month

period between July 1998 and August 1998, shows that 36 percent of the 231 felony

defendants who were not released at first appearance were in custody in Alachua

county on drug related charges.

A coordinated continuum of services targeting substance abusing offenders across

the criminal justice spectrum would further reduce the incidence of drug-related

crime throughout the County. The program will include continuing judicial supervision of nonviolent offenders with substance abuse problems and administration of

sanctions and services including: (1) mandatory drug testing during any period of

supervised release or probation; (2) substance abuse treatment; (3) probation or supervised release which could include prosecution, confinement, or incarceration for

noncompliance with the program’s requirements; and (4) offender management and

aftercare services to prevent relapse, such as vocational job training, job placement

and housing placement.

The County has an existing array of programs which could serve as the framework of a comprehensive system. There is strong support for alternative programs

within the judiciary and from other local criminal justice officials. The County also
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has a long-standing history of cooperation among agencies. In addition, the University of Florida is located in the community and could serve as a partner in evaluating the success of this program. The expected benefits are national, and could

hopefully be replicated at reasonable cost.

We hope that your Subcommittee will find Alachua County’s Comprehensive Management of Drug-Involved Offenders Initiative worthy of your support. Thank you

for your consideration.

PREPARED STATEMENT OF THE CITY OF MIAMI BEACH, FLORIDA

Mr. Chairman: Thank you for giving the City of Miami Beach the opportunity to

submit testimony before your subcommittee regarding a critical law enforcement

technology initiative. The Miami Beach Police Department is seeking federal funding in order to acquire available technology for the purpose of providing a significant

enhancement in the delivery of public safety services to the community. The unique

status of the City of Miami Beach as an international destination has taxed the

Miami Beach Police Department’s ability to provide public safety services to residents and visitors utilizing the typical funding sources available to a medium sized

municipality. Funding assistance would be utilized to acquire the following technology: —Equip every officer in the field with wireless enabled laptop computers. Officers

would have immediate access to both strategic and tactical crime analysis enabling them to provide directed community based policing services to residents.

Enhanced communications would also enable a coordinated tactical deployment

and response to disaster and other emergency events. The efficiency of field officers would be significantly improved providing residents and visitors with increased public safety services. —Develop and acquire the infrastructure necessary to provide real-time, online

public access to crime reports, crime statistics, crime maps and other such information to residents in order to develop a closer partnership and a coordinated

community-police response to crime at the neighborhood level. —Develop the local infrastructure to provide enhanced two-way crime/suspect

analysis and information exchange with law enforcement agencies throughout

the State of Florida utilizing the existing statewide Criminal Justice Network

(CJNET). With the acquisition of this capability, the ability of criminals to successfully victimize residents and avoid detection by crossing jurisdictional

boundaries will be significantly reduced.

The City is seeking $1 million in federal support through the fiscal year 2001 Justice Appropriations Bill, under its COPS Technology Assistance account, Office of

Justice Assistance account, or any other program account within the Department of

Justice that might be appropriate for funding this project.

We hope you will find this critically important project worthy of your support.

Thank you for your consideration.

PREPARED STATEMENT OF THE CITY OF NEWARK, NEW JERSEY

NEWARK SPORTS AND ENTERTAINMENT PROJECT

Mr. Chairman and members of the Subcommittee, thank you for giving us the opportunity to submit testimony about a project under your jurisdiction that is critical

to the people of Newark, New Jersey. Newark is truly at a crossroads: we are a City

with all of the problems of many major urban centers, but we are also a City with

vast potential. We have begun to turn the corner—there is a renewed vitality and

sense of optimism in Newark.

A major economic development initiative that will create a professional sports and

entertainment complex in downtown Newark is being planned by a consortium of

private businesses, nonprofit representatives and the City administration. As this

new economic development initiative is evolving from preliminary to concrete plans,

there is a unique opportunity for an important downtown facility linked to a key

transit hub. The synergy of a major occupant that is committed to investment in

community development and opportunities for upgrading the center city retail and

economic environment makes this an attractive and singular proposal.

This project will use the attraction of a major league sports franchise to locate

a state-of-the-art arena as a key cornerstone for development. The mission of this

project is to harness the momentum initiated by the successful 1997 opening of the

acclaimed New Jersey Performing Arts Center (NJPAC), and 1999 opening of Newark’s minor league baseball stadium, and create a vibrant, state of the art sports
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and entertainment district in downtown Newark. It will be a catalyst to the evolving

creation of a vibrant downtown corridor—as development continues with strong anchors, integrating several elements. These include NJPAC, the Gateway complex of

modern office buildings, the refurbished Newark Penn Station, a waterfront development along the Passaic River which is under construction by the U.S. Army Corps

of Engineers, and a minor league baseball stadium where the Newark Bears began

to play last summer. A new light rail system is in final design, and will ultimately

be the spine along which these projects are arrayed.

The Newark Sports and Entertainment Center master plan includes development

of approximately 1.4 million square feet of office space. The preliminary plan consists of a covered multi-purpose sports arena with 19,000 seats, ancillary parking,

a new television production and broadcast complex, up to 2 million square feet of

new commercial and retail space, including hospitality facilities. The sports and entertainment center will provide superior access to a broad customer base, create sizable, measurable, bankable fiscal benefits for the taxpayers of New Jersey, and will,

consistent with the commitment of the New Jersey State Plan, ‘‘steer development

from environmentally sensitive zones and back into urban areas.’’ As the project creates a destination location—which will create new incremental spending—it will

help to revitalize New Jersey’s oldest and largest city and establish a new sports

paradigm linking professional athletes to the youth of the state.

The Newark Sports and Entertainment Center is expected to draw nearly two

million people to the city each year. The estimate includes those attending sporting

events, family entertainment shows like the circus, concerts and other attractions.

In addition, the development of the Newark Sports and Entertainment Center will

act as a catalyst to the increased demand for and opening of restaurants, shops, hotels and small service businesses that meet the needs of patrons. Local corporations,

small businesses, city residents, and local employees are expected to benefit from

the Newark Sports and Entertainment Center through improved quality of life, better entertainment and retail options for is current workforce, and improved job opportunities. Although the direct and indirect employment to be gained from this

project is still the subject of further analysis, it can safely be estimated that at least

5,000 jobs in construction, ancillary services and direct employment will be created.

A unique aspect and public benefit of this project is the establishment of a foundation to benefit inner-city youth in New Jersey. Community Youth Organization

(CYO) has been formed by the largest investor in the ownership group of the NJ

Nets. CYO will be a partner in the profits of the team, and is committed to investing

its profits in children, people and businesses in Newark. This significant contribution responds to a documented need for activities that help at risk youth. The NJ

Nets already sponsor a wide variety of community programs, including the Sprite

Junior Nets League, Kids Stuff, basketball-court renovation programs, and a host

of other charitable and holiday events. The proposed sports and entertainment center will likely include educational forums as well as television studios available for

youth tours and programs.

The total population of the region in a 25-mile radius of Newark—excluding New

York—is 5,088,656, and includes New Jersey’s five most populous cities. In an approximate 10 mile radius of Newark, the population is 2.1 million with a median

family income of $54,683. This contrasts with Newark’s population of 265,000 and

median income of half that of residents in the 10 mile radius.

Currently approximately 100,000 workers are located in Newark. A recent survey

of Newark’s mid-day population found 266,000 local residents, 52,000 non-resident

workers and 24,000 non-resident students. The six colleges and universities in the

city have over 45,000 students and faculty. Newark is also home to major corporations, including Prudential Insurance, Continental Airlines, Blue Cross/Blue Shield

of NJ and Public Service Electric and Gas. This concentration of people with discretionary income for entertainment and dining will be encouraged to use this significant purchasing power in the City of Newark.

Fully one-quarter of the population of the country either lives within, or is easily

accessible to Newark. We are only 8 miles west of New York City, within 100 miles

of Philadelphia, and only a four hour drive or 1 hour flight away from Boston and

Washington. Our location is enhanced by ready access to transportation connections,

via rail, sea, air and nine major interstate and state highways. Newark’s Penn Station, a stop on the Northeast Corridor for Amtrak as well as New Jersey Transit

trains and buses from throughout the State, is only a short walk from the proposed

sports and entertainment complex. There is an additional rapid and inexpensive rail

connection to New York City via the train system known as the PATH. Newark

International Airport, the ninth largest airport in the U.S. and one of the fastest

growing in the country, serving 31 million passengers each year. It is now extremely
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close to downtown via automobile or bus, and will soon be directly accessible by a

rail connection to the airport monorail system.

Newark, however, also suffers from an unusually high number of tax exempt

properties as the host community for the aforementioned large publicly operated facilities including six colleges, public hospitals, a major airport, ocean cargo handling

and major water and waste management operations. The dearth of ratables has

posed and hardship of the residents and homeowners of Newark. The city will immediately benefit by the presence of the Newark Sports and Entertainment Center,

as it will pay property taxes on land that is currently city-owned or underutilized.

The ownership group for a major league sports franchise has indicated the ability

to contribute approximately $200 million of private funds toward the anticipated

$300 million project cost. The gap in financing will be filled with a combination of

tax-exempt revenue bonds (subject to debt limits), user fees and grants related to

the job generating abilities and economic development potential of the project. The

City plans to use proceeds from parking and hotel taxes to subsidize the project.

Public funds are expected to be utilized for site acquisition and off-site infrastructure improvements. The project area includes a large tract of vacant land and underutilized buildings which is under consideration for declaration as an ‘‘Area in

need of Redevelopment’’ under the Redevelopment statutes of the State of New Jersey. This Committee’s endorsement of an allocation of $15 million in funding

through the Economic Development Administration for site acquisition and project

construction is respectfully requested.

The consideration of this committee is deeply appreciated. Newark, New Jersey

is looking forward to your support of this exciting project and its innovative partnership.

PREPARED STATEMENT OF THE CITY OF GAINESVILLE, FLORIDA

Mr. Chairman: On behalf of the City of Gainesville, Florida, I appreciate the opportunity to present this written testimony to you today. The City of Gainesville is

seeking federal funds in the fiscal year 2001 Commerce, Justice, State and Judiciary

Appropriations bill to assist with the following innovative projects the City is undertaking: (1) an East Side Community Recreational Facility for recreational and other

programs and services to serve at-risk youth and their families and a substantial

population of low income citizens in the surrounding area; and (2) the Depot Avenue

Project to enable economic redevelopment in a downtown setting, including also improving stormwater treatment, developing park facilities, enhancing alternative

transportation and restoring an urban wetland.

East Side Community Recreation Center Project

The City of Gainesville is seeking a funding strategy for a multi-purpose community-based recreational facility on the east side of our city. The site for this project

is in one of our highest poverty and minority-populated areas. Once completed, the

center will provide a wide range of programs and opportunities to at-risk youth and

their families. It will also provide needed facilities and services for the substantial

population of low-income elderly in this area of our community, as well as to all our

community.

This is a public/private initiative estimated to cost $2.2 million. Funding has been

received or pledged in the amount of $1.5 million. The initiative is being led by a

grassroots partnership of business leaders, community leaders, professionals and interested/concerned citizens who have organized themselves as the East Gainesville

Park Development Group.

The public agencies involved in this effort include the City of Gainesville, Alachua

County, the School Board of Alachua County, and the University of Florida. So far,

the project has received considerable financial support or pledges from the City, the

County, and private individuals. The University of Florida has pledged to provide

coaches and mentors. Additionally, the School Board of Alachua County has expressed an interest in this facility to help meet its own recreational facility shortfalls.

The plan for this project is based on the need to provide recreational facilities for

families and on the desire to provide our youth with such advantages as leadership

skills, team participation skills, and computer skills as well as opportunities to participate in physical and mental exercise, arts and crafts, and social activities, and

to receive mentoring and after school tutoring. The educational component will include after school tutoring sessions, computer, anger management, life skills, and

teen parenting and pregnancy prevention classes. Parental involvement will be encouraged for all activities.
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The facility will be sited on a 36-acre parcel of land zoned for park use. The site

amenities will include a multipurpose building (estimated at 6,500 square footage

in area), serving as a learning resource center and community center. The facility

will house the computer lab with computers promised by IBM, and rooms for after

school homework and tutoring. Accommodations for indoor recreational and cultural

programs will also be provided. The active outdoor amenities will include an interactive water fountain play area, playground and tot lot, picnic areas, two softball

fields, two soccer/football fields, three basketball courts, one-quarter mile track,

three-quarter mile jogging/fitness trail, one-quarter mile interpretive nature boardwalk and a concession facility. The City of Gainesville will own and operate the park

and improvements.

Depot Avenue Project

The Depot Avenue Project is intended to enable economic redevelopment in a

downtown setting, to extend park facilities, to support alternative transportation, to

improve stormwater treatment, and to restore a small urban wetland in Gainesville.

Funding for this project are being pursued on several fronts. Gainesville is working

in partnership with the U.S. Environmental Protection Agency through the

Brownfield Pilot Program and the Sustainable Communities Program; the U.S.

Housing and Urban Development Agency through the EDI Program; the Florida Department of Environmental Protection through the Brownfield Pilot Program; the

Florida Communities Trust through the Preservation 2000 Program; the Florida Department of Transportation through the Transportation Enhancement Program; the

St. Johns River Water Management District for technical support; the City of

Gainesville’s Regional Utilities contamination cleanup program; and the City of

Gainesville’s Stormwater Management Utility Program.

The project includes:

Depot Avenue.—The reconstruction of approximately two miles of Depot Avenue

from SR 331 to US 441. The project is intended to address current safety and capacity issues and includes the construction of two travel lanes, turn lanes, curbs, sidewalks and landscaped medians. Depot Avenue is located adjacent to the existing

Depot Avenue Rail-Trail, which is an 8 foot wide asphalt trail. It alternately connects residential areas, commercial areas, and industrial land uses along its length.

The redesign of the road will address these varying conditions and will also provide

for the involvement of the neighborhood residents it serves.

Depot Avenue traverses Gainesville from west to east, approximately one-half

mile south of, and parallel to, SR 26 (University Avenue). Its western terminus is

at the eastern edge of the campus of the University of Florida and its associated

student housing development, and its eastern terminus is at SR 331 in Southeast

Gainesville. It skirts the southern edge of downtown Gainesville at its mid-point,

and its intersection with SR 329 (Main Street) is considered to be the southern

‘‘gateway’’ to Downtown. (Estimated cost is $4 million.)

Transportation Center.—The City of Gainesville’s RTS Transportation Center is

located on the north side of Depot Avenue directly south of the core of Downtown

Gainesville. The Transportation Center is a multi-modal transportation hub for the

Regional Transit System, Greyhound, Amtrak and the Bicycle Commuter Facility.

(Estimated cost is $3 million. Partial funding, $1.2 million has been provided by the

Federal Transit Agency. Therefore, the City is seeking $1.8 million to complete this

project.)

Historic Depot.—On the south side of Depot Avenue across from the Transportation Center is the Old Gainesville Depot, which has been recently acquired by the

City for restoration. The Old Gainesville Depot was built in 1907, and was placed

on the National Register of Historic Places in 1996. The City of Gainesville was

founded as a rail hub linking Fernandina Beach on the east coast of Florida to

Cedar Key on the west coast in the mid-1800’s and uses a train symbol as its official

seal. (Fully funded through state and local sources.)

Stormwater Park.—The City’s proposed 22-acre Stormwater Park will serve as the

stormwater management facility for the Depot Avenue Project as well as a large

portion of the central downtown area. This facility will remove existing contamination, provide for full treatment of stormwater to the property owners in the service

area and eliminate the need for future redevelopment in the central area to provide

on-site stormwater treatment facilities. Additionally, the stormwater basin is envisioned to provide treatment for some of the underground petroleum plumes that

exist in the area. (Total estimated cost is $10 million for construction. Land acquisition is being jointly funded by the Florida Communities Trust and the City of

Gainesville. Design services are jointly funded by the U.S. EPA, Florida DEP and

the City of Gainesville. Partial funding is available from the City’s stormwater utility and the Florida Department of Transportation.)
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In closing, federal support is critical for each of these initiatives. It is our hope

that the Subcommittee will give our requests every consideration throughout the fiscal year 2001 appropriations process.

PREPARED STATEMENT OF THE AMERICAN PUBLIC POWER ASSOCIATION

The American Public Power Association (APPA) is the national service organization representing the interests of over 2,000 municipal and other state and locally

owned utilities throughout the United States. Collectively, public power utilities deliver electric energy to one of every seven U.S. electric consumers (about 45 million

people), serving some of the nation’s largest cities. The majority of APPA’s member

systems are located in small and medium-sized communities in every state except

Hawaii.

We appreciate the opportunity to submit this testimony in support of fiscal year

2001 appropriations for the Federal Trade Commission and the Antitrust Division

of Justice.

The electric power industry is in the midst of sweeping and dramatic change, with

a record number of proposed mergers, increasing significantly in the last two to

three years. The industry experienced little competition in the past, except for franchise competition between investor-owned utilities (IOUs) on the one hand and publicly and cooperatively owned utilities on the other. During this transitional period—

as this important, closely regulated industry moves towards increased competition—

sufficient resources are necessary so that the two federal antitrust agencies can adequately perform merger assessments.

The Department of Justice Antitrust Division and the Federal Trade Commission

play a critical advisory role along with the Federal Energy Regulatory Commission

(FERC) with respect to antitrust monitoring and enforcement in the electric utility

industry.

Important lessons have been learned through the deregulatory experiences of the

airlines, cable, and telecommunications industries. As the electric power industry

begins the transition from regulation to competition, those lessons must inform the

policies and process that will guide, and ultimately determine, the structure of a deregulated electric power industry. There is no need to start at the bottom of the deregulation learning curve, or to repeat the mistakes made in other industries.

Mergers among electric utilities are likely to have a profound effect on the development of competition in the electric industry. In fact, because utility mergers will

determine the basic structure of the electric power industry, they actually have the

potential to define (or preclude the development of) the competitive landscape. The

recent wave of electric utility mergers certainly will increase concentration in the

industry, as the number of firms that are legally and practically capable of providing electric service declines through consolidation. Largely for the same reasons,

the structural impacts of such mergers will likely be permanent. What is not known

is whether mergers of incumbent electric utilities and/or other wholesale power suppliers, collectively or individually, are on balance procompetitive or anticompetitive.

Specifically, there are a number of unknowns about electric utility mergers:

—Whether an increase in concentration will produce associated efficiencies;

—Whether any efficiencies that do result will be passed on to consumers in the

form of lower electric rates, or instead be passed on to shareholders, or used

to build diversified empires;

—Whether an increase in concentration will simply serve to fortify existing market power to exclude new entrants, drive out new entrants through price competition and mergers, purchase existing competitors, or gouge consumers.

As the mixed deregulatory experiences of other industries demonstrate, these are

not questions that can be accurately answered in the absence of actual market data.

The pressure placed on DOJ’s Antitrust Division and the FTC will be enormous as

we search for the answers to these and many more questions.

We are at a critical juncture in the history of our antitrust laws. After a full generation of decline, antitrust enforcement is making a comeback. In response to the

unprecedented wave of mergers that has overtaken the U.S. economy in the last few

years, the Administration recently proposed substantial increases in the budget of

the Justice Department’s Antitrust Division and the Federal Trade Commission.

The restructuring of many industries, the concurrent revolution in international

trade and international competition policy, and the emergence of serious competitive

problems in the evolving high tech industries have also made the task of antitrust

enforcement more challenging and requiring a larger commitment of resources. Robert Pitofski, Federal Trade Commission Chairman, recently pointed out during a

speech to a group of antitrust lawyers, that with the business community’s request
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for a level of restructuring never asked for before, his department has seen a tripling of FTC merger reviews.

Moreover, the wave of mergers has made antitrust enforcement a great bargain

for the public. Since funding for the Antitrust Division and FTC comes out of a special fund consisting of fees paid by companies applying for merger approval, antitrust enforcement pays for itself. Under the Administration’s budget proposal, no

money comes from the General Fund of the Treasury. In addition, criminal and civil

penalties attained by the agencies bring millions of dollars into the Treasury, and

consumers are saved untold millions by the agencies’ successes in promoting and

maintaining competition.

APPA supports the Administration’s fiscal year 2001 budget request of $134 million for the Antitrust Division, an increase of $25 million over the fiscal year 2000

funding level, and $166 million for the Federal Trade Commission, an increase of

$40 million or nearly 35 percent over fiscal year 2000 requested levels.

We urge you to approve the Administration request.

PREPARED STATEMENT OF THE CITY OF NEWARK, NEW JERSEY

Mr. Chairman and members of the Subcommittee: Thank you for giving me the

opportunity to submit testimony about a project under your jurisdiction which is

critical to the people of Newark, New Jersey. Newark is truly at a crossroads: we

are a City with all of the problems of many major urban centers, but we are also

a City with vast potential. We have begun to turn the corner—there is a renewed

vitality and sense of optimism in Newark. But we are also still ravaged by the problems associated with the illegal drug trade.

The Newark Police Department has developed an innovative program, called Operation NITRO—Narcotics Interdiction To Reduce Open-air Drug Markets—to address the complex issues associated with the sale of drugs and their effect on the

City of Newark. It is a narcotics enforcement augmentation program designed to improve the quality of life by reducing the incidence of illegal drug trafficking through

aggressive anti-crime operations. A supplemental federal allocation of $2 million is

respectfully requested to meet the specialized facility and equipment needs for the

ambitious and important project summarized herein.

It is well established that drugs drive crime! The COMSTAT process—Newark’s

computerized statistical tool—has revealed that an estimated 80 percent of the

crime in Newark is drug related. The communities’ primary issues are the open

street sales, violence associated with the drug trade, and the proliferation of weapons and their use by drug enforcers during street robberies. Inherent in the drug

trade is the violent nature of the criminal element associated with trafficking. A significant portion of the drug traffickers have been identified as having violent criminal histories, and most have previously failed to appear in court to answer for their

crimes. The single most significant impact law enforcement can have toward reducing the illegal drug trade is through a sustained presence; dismantling criminal enterprises by targeting the infrastructure and profit associated with drugs.

Operation NITRO is a concentrated effort designed to address long-term operations through collaborative strategies with identified outcomes and interim measures. It is a Department element composed of carefully selected and specially

trained police officers and supervisors using covert, non-traditional means to suppress drug-related street crime. The synergy of enforcement and apprehension operations will result in a valuable, encouraging and worthwhile contribution to public

safety.

Elements include proactive street-level narcotics enforcement; search warrants for

mid and upper-level drug trafficking networks; asset seizure through civil enforcement; neighborhood problem solving through community interaction; special drug

courts to provide differential treatment for offenders; enhanced involvement from

the corrections community to enforce probation and parole violations, and high visibility fear reduction. These efforts will produce a synergistic effect in dealing with

persistent offenders by effecting arrests, empowering residents, seizing assets, and

controlling the environment conducive to crime. The citizens of Newark will be reassured that crime control and quality of life are paramount issues for the Newark

Police Department.

The enforcement segment consists of non-uniformed officers being placed into

areas where the incidence of narcotics trafficking is greatest. Teams of officers will

conduct stakeouts, surveillance, buy/bust operations, search warrants, and streetlevel enforcement tactics. The apprehension segment consists of teams of uniformed

officers stabilizing neighborhoods by conducting follow-up operations in response to

intelligence and leads garnered from outside sources, arresting persons wanted on
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outstanding warrants, and community empowerment via focus groups and neighborhood interaction.

Each of these tactics will be used in response to particular crime/victim/location

patterns. The primary source of information will come from the community, bolstered by crime and quality of life data supplied the Performance/Crime Analysis

Unit to the COMSTAT process. Secondary sources will be outside agencies (e.g.,

Essex County Prosecutor’s Office, FBI Fugitive Task Force, other law enforcement

agencies) and informants. Each will provide specific, detailed data on the types of

crimes and perpetrators sought. The primary goal will be to reduce the incidence

of drug-related street crime through the effectuation of quality arrests.

The elements of Operation NITRO combine to formulate a cohesive plan, which

takes into account the range of Police staffing, facilities, equipment, and outreach

needs. Detailed plans have been devised for: —Organization and Administration.—The administrative structure and organizational placement, including staffing levels. —Deployment and Tactics.—Deployment strategies and street tactics, also, the integral nature of Crime Analysis and the data supplied via COMSTAT. —Confrontation and Arrest.—Guidelines for confrontations between NITRO personnel and uniformed members of the Department. Emphasis will be placed on

plainclothes recognition, quick identification and the actions to be taken by both

the challenging officer and the challenged officer. —Facilities and Equipment.—The physical location and equipment needs of the

program. —Special Considerations.—The methods for maintaining integrity of team members, and legal issues will be explored, including the issue of entrapment. Also,

program advertising and public support. —Implementation.—A project time line depicting implementation and milestones.

NITRO will perform two primary functions: plainclothes street surveillance of

identified hot spots, and uniformed operations. Officers can assume disguises to

adapt to the landscape in order to provide themselves with the anonymity and freedom of movement to pursue identified or suspected drug dealers undetected, and

maintain watch unnoticed at probable crime locations. These tactics are designed to

result not only in quality arrests but also in the interruption of drug transactions

and the prevention of injury to citizens. Care must be taken, however, to avoid the

hazards inherent in this type of work.

Two or three modules will generally be assigned to high-incidence neighborhoods

within the four commands. Target Zones (TZ) will be established based upon the

crime analysis data. All operations will take place within the TZ under the direction

of the module supervisor. Specific deployment tactics will further be determined by

the scope of the problem in an identified neighborhood. The success of each operation depends, to a great deal, on the imagination and resourcefulness of the module

personnel. When a narcotics operation is put in effect, each module will have a minimum of eight members. All members will be encouraged to use their skills in their

apprehension efforts, but are reminded to use only those tactics which would be considered constitutionally legal. Considerable classroom instruction and role playing

should be conducted on entrapment and other constitutional issues. Careful planning, adequate communication, proper role playing and an efficient back up team

are also required. Though potentially hazardous, these operations are a most rewarding means of apprehending street criminals and reducing the incidence of

crime.

An emerging concept that should be employed to produce lasting solutions is a

crime control feature known as crime prevention through environmental design

(CPTED). CPTED principles employ engineers and urban planners to permanently

alter the landscape in an effort to redesign a neighborhood. Such measures include

rerouting traffic, establishing flow control (one-way streets), permanently curbing

streets and vacations. Preliminary discussions have taken place with the Department of Engineering who have been very cooperative in assisting the Police Department with this endeavor.

The element of plainclothes surveillance requires officers who are highly skilled

in the art of observing suspicious or out-of-the-ordinary circumstances. Surveillance

tactics are instituted once observations of this sort are made, and may last anywhere from a few minutes to several hours. Similarly, buy/bust operations, reverse

operations and long-term undercover operations necessitate patience and the investment of time if the results are to be productive. Training in surveillance will be conducted to provide officers with the proper skills for conducting these delicate matters. This approach will increase the likelihood of arrest, the probability of prosecution for a felony, the chance of a felony conviction, and the length of the term for

those sentenced.
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In an effort to fulfill their objective of effecting high quality arrests while maintaining a low injury rate, NITRO will promulgate guidelines for confrontation and

arrest. The primary focus is to prevent injuries arising from narcotics operations,

and mistaken identity issues. Because of the size, diversity, and youthful nature of

the Department, many experienced officers and inexperienced officers are unfamiliar

with each other. Since safety is paramount, the need to quickly identify plainclothes

personnel cannot be overstated. As part of the required training, a series of safety

precautions will be discussed to alleviate most of the problems associated with confrontations.

There are two special considerations of the utmost importance to NITRO administrators: legal defensibility of operations and integrity. The primary legal concern for

the Police Department is the legal defense of entrapment. If procedures excessively

lure or seduce suspects in their conduct as decoys, an apprehended criminal may

have the defense of entrapment. In brief, entrapment will be a valid defense where

criminal intent in the mind of the accused was implanted there by the officer, and

where active police conduct encouraged the crime. The NITRO Task Force will provide extensive training, literature, and role playing to avoid these mishaps. Detailed

tactical guidelines will be promulgated as part of the operating procedures governing the unit.

As with any plainclothes police operation, the susceptibility of corruptive practices

by officers and supervisors is possible. Operation NITRO will pride itself on being

corruption-free with a reputation for bribery arrests. NITRO administrative personnel will set the perspective for the team by personal example. A great deal of

energy will be channeled into integrity control, and ethics will be the major thrust

for the integrity campaign. NITRO will constantly be on guard to prevent its members from participating in shakedowns, abusing their authority, engaging in brutality, using racial/ethnic slurs while effecting arrests, and other illegal or improper

practices. Complaints will be monitored and RAMS reports will be generated quarterly to audit the team.

While the plans for a corruption-free environment are ambitious they are not

meant to unduly restrict the effectiveness of the team by creating paranoia in personnel. Nor are they meant to curtail the activities or initiative of creative officers.

The element of undercover integrity testing is an option that should be discussed

at length with the Police Director and the Division Commander of Internal Affairs.

Advertising and public support for any Police Department initiative are critical

to the program’s success. The Newark Police Department will publicize Operation

NITRO through radio and cable TV public service announcements, handouts and

posters placed throughout the city in all police Districts, public and private schools,

public libraries and at community meetings. The Citizen’s Police Academy will be

utilized to promote this initiative by focusing upon direct contact with the community. The advertising campaign will augment the establishment of Community Advisory Councils (CAC). CAC’s are intended to foster a cooperative and positive police/

community partnership. Working together, the police and the community will design

strategies specific to local neighborhoods and create a no-tolerance attitude towards

illegal drug activity.

The assistance of this committee in enabling the implementation of this comprehensive project will be deeply appreciated by the citizens of Newark, New Jersey.

The improvement of the quality of life in our neighborhoods which will be brought

about by Project NITRO will aid in the renaissance of our City. We thank you for

your consideration.

IMMIGRATION AND NATURALIZATION SERVICE, FEDERAL BUREAU OF INVESTIGATION,

AND DRUG ENFORCEMENT ADMINISTRATION

PREPARED STATEMENT OF THE NATIONAL BORDER PATROL COUNCIL OF THE

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

The National Border Patrol Council, representing approximately 9,000 employees,

appreciates the opportunity to present its views concerning appropriations for the

U.S. Border Patrol for the forthcoming fiscal year.

NEW BORDER PATROL AGENTS

Illegal immigration remains out of control, and is a serious concern for most

Americans. Unfortunately, the Administration’s budget proposal for fiscal year 2001

fails to take this problem seriously, requesting only 430 additional Border Patrol

Agent positions, even though the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 mandated the addition of 1,000 new agents for next fiscal
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year. The National Border Patrol Council urges that the full complement of new

Border Patrol agent positions be funded.

PAY REFORM

The Administration’s pay reform package consists of four major parts: (1) Upgrading the Border Patrol journeyman agent grade from General Schedule (GS) grade

9 to grade 11; (2) replacing the current overtime system, Administratively Uncontrollable Overtime, with Law Enforcement Availability overtime, and the elimination of Fair Labor Standards Act overtime; (3) Paying Special Salary Rates to all

Border Patrol agents in General Schedule grades 5 through 11 to supposedly offset

the loss of FLSA overtime; and (4) paying a $2,000 hiring bonus to new Border Patrol agents.

The National Border Patrol Council supports upgrading the journeyman pay level

for Border Patrol agents. Currently, only about one-third of the workforce is at the

GS–11 level. Although the average agent currently achieves this level within three

years after entering on duty, this time frame would be longer if attrition were not

as high and if fewer new agents were being hired. The proposed accelerated and

automatic promotion process should enhance retention. Serious consideration should

also be given to upgrading other critical occupations within the Border Patrol, such

as Detention Enforcement Officers and Law Enforcement Communications Assistants.

The payment of a hiring bonus is also supported by the National Border Patrol

Council, although it believes that the I&NS should exercise the authority granted

under 5 U.S.C. § 5754 to pay retention allowances of up to 25 percent of base pay

to existing employees, who are leaving the Border Patrol at an alarming rate.

The National Border Patrol Council strongly opposes the overtime provisions of

the Administration’s pay reform proposal, which would increase the overtime hours

and reduce the overtime earnings of all Border Patrol law enforcement personnel,

greatly exacerbating an already unacceptably high attrition rate. Although labeled

as ‘‘pay reform,’’ certain provisions of the Administration’s proposal represent a

giant step backward, removing deserving employees from the coverage of the Fair

Labor Standards Act and causing them to work more overtime hours for less pay.

Although the proposal is being promoted as a benefit for such employees by placing

their overtime pay on par with that of criminal investigators, it fails to mention that

the provisions would not grant basic pay parity, leaving Border Patrol agents one

to two grades ($7,777 to $16,659 per year) behind criminal investigators, and Detention Enforcement Officers even farther behind.

The current Administratively Uncontrollable Overtime (AUO) system is designed

to compensate Border Patrol employees for all unscheduled overtime hours worked,

and is paid at a rate of 25 percent of basic pay (assuming an employee averages

9 or more hours of AUO per week). This is augmented by Fair Labor Standards Act

(FLSA) overtime, which roughly makes up the difference between the 25 percent

and time and one-half. Overtime payments under the FLSA help reduce incentives

for agencies to force employees to work large amounts of overtime by requiring them

to fairly compensate employees for all overtime hours worked. The proposed Law

Enforcement Availability (LEA) overtime is also 25 percent of basic pay, and is designed to compensate employees for 2 hours of overtime per day, but provides absolutely no compensation for hours in excess of that amount. Under LEA, all overtime

hours that are not scheduled in advance of the administrative workweek are considered unscheduled overtime. Unlike AUO, LEA allows agencies to schedule overtime

that is within their administrative control. Even those overtime hours that are

scheduled in advance of the administrative workweek under LEA are paid at a rate

far below time and one-half, as such overtime payments are limited by statute at

time and one-half the rate of a GS–10 step 1 (unless it would cause the employee

to be compensated at less than their hourly rate of pay, in which case they are compensated at their hourly rate.) For employees receiving AUO, FLSA roughly makes

up the difference between this amount and true time and one-half.

The proposed Special Salary Rate of about 10 percent would only result in parity

with the current compensation of employees if they work 10 or fewer hours of overtime per week. Employees who work more than 10 hours of overtime per week

would receive less money than they currently receive for working such hours. Most

Border Patrol law enforcement personnel in fact currently work more than 10 hours

of overtime per week. It is also important to note that the Special Salary Rates

would not apply to GS–12 Border Patrol pilots or to Detention Enforcement Officers

at any pay grade. These employees would receive thousands of dollars less each

year, yet would be required to work more overtime hours.
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Furthermore, unless the Attorney General raises the Special Salary Rates every

year by an amount equal to the locality increases received by other employees, Border Patrol employees receiving such pay would lose money, as employees can only

receive the greater of a Special Salary Rate or locality pay increase, but not both.

In light of the fact that the I&NS and Attorney General have failed and refused

to provide a foreign language bonus of 5 percent to Border Patrol employees since

the passage of the Federal Law Enforcement Pay Reform Act of 1990, it is highly

unlikely that the Attorney General would provide annual Special Salary Rate increases. It can readily be seen that the proposed overtime compensation system would provide a major incentive to managers to force employees to work large amounts of

overtime. In fact, since the passage of the original LEA statute, Criminal Investigators assigned to the Border Patrol have seen a marked increase in the number of

overtime hours they actually work, in addition to countless hours they are required

to be available for work.

FOREIGN LANGUAGE DIFFERENTIALS

Although the Federal Law Enforcement Pay Reform Act of 1990 (Public Law 101–

105) authorized agencies to pay a foreign language differential of up to five percent

of basic pay to any law enforcement officer who possesses and makes substantial

use of one or more foreign languages in the performance of official duties, the I&NS

continues to refuse to pay its employees for such skills. It should therefore be compelled to include such payments in its budget. Foreign language award payments

should be directed to be included with regular salary payments on a bi-weekly basis

in order to ensure that the money is not diverted to other purposes.

DISCIPLINARY ACTIONS

The provision authorizing and directing the Attorney General to impose disciplinary action pursuant to policies and procedures applicable to employees of the Federal Bureau of Investigation for certain violations should not be applied to bargaining unit employees, who are covered under the Civil Service Reform Act of 1978.

In this regard, it is noteworthy that the I&NS’ proposed implementation of such policy for the current fiscal year excludes members of the Senior Executive Service, the

very group whose actions gave rise to this language. Moreover, the proposed implementation also defines ‘‘department leadership’’ to include all members of the Senior

Executive Service within the I&NS, which includes numerous field managers.

TRANSFER OF FUNDS BETWEEN PROGRAMS

The proposal to allow the Attorney General to transfer funds between the ‘‘Enforcement and Border Affairs’’ and ‘‘Citizenship and Benefits, Immigration Support

and Program Direction’’ programs is ill-advised, and should be eliminated.

OVERTIME LIMITATIONS

The National Border Patrol Council supports the proposal to leave the annual

overtime cap at $30,000, but allow for exceptions in circumstances where the Commissioner determines that enforcing the overtime cap would harm enforcement or

service activities.

VEHICLES

The National Border Patrol Council also supports the proposal to allow the use

of funds without limitation (within the limits of the Enforcement and Border Affairs

appropriation) for equipping, maintaining, and making improvements to the infrastructure and the purchase of vehicles for police-type use.

FACILITIES

The $51 million proposed for construction, repair, renovation and maintenance of

Border Patrol facilities is inadequate, as many of the existing facilities were only

designed to accommodate a fraction of the employees currently assigned to such offices.

PERCENTAGE OF SUPERVISORS

The I&NS continues to ignore the recommendation of the National Performance

Review to reduce by half the percentage of its employees who are supervisors, and

intends to expend significant amounts of money hiring large numbers of additional

supervisors. This wasteful plan will considerably decrease the number of personnel
394

available to actually enforce our nation’s immigration laws. Accordingly, the I&NS

should be directed to comply with the aforementioned recommendation.

PREPARED STATEMENT OF LOCAL 511, PROFESSIONAL EMPLOYEES OF THE IMMIGRATION AND NATURALIZATION SERVICE OF THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

PRELIMINARY STATEMENT

Local 511, professional employees of the Immigration and Naturalization Service

(INS), American Federation of Government Employees (AFGE), respectfully requests

that Congress provide an additional appropriation in the amount of $10 million to

upgrade the salaries of the INS attorneys and fund the INS attorney payroll budgetary shortfall occasioned by insufficient funding of established attorney positions.

NECESSITY FOR AN ADDITIONAL SALARY APPROPRIATION

It is imperative that the INS attorneys secure long overdue and well-deserved salary increases because it has become very difficult for the INS to attract and retain

attorneys qualified with the requisite specialized knowledge to effectuate Congressional mandates and to handle the ever-increasing complexity of the immigration

laws and process. Each year, the INS loses out on qualified employee candidates to

the private sector, other Federal agencies and other legal divisions within the Department of Justice, primarily because of the discrepancy between INS salaries and

the salaries paid to attorneys by such sector, agency and/or division. On average,

the INS is compelled to offer both entry level and experienced attorney positions to

about three candidates before the position is filled. Clearly, this evidences the fact

that the candidates deemed to be the most qualified by the INS are seeking positions elsewhere. Further, the INS continuously loses its most experienced, welltrained personnel, the attorneys most able and effective in handling the sophisticated litigation envisioned by much of the recent legislation. The INS, Office of General Counsel, has approximately 500 attorneys. In the last nine years, approximately 316 out of the 500 attorneys resigned from the INS. Statistically, this represents almost 65 percent of the agency’s legal team. The long-term effect of such

a high attrition rate on the agency’s effectiveness in fulfilling its mission is incalculable.

Over the last four years, there have been sweeping changes in Immigration Law.

A salary increase for INS attorneys is a necessary corollary to the substantially increased knowledge requirements and responsibilities required of INS attorneys in

the enforcement of such new legislation. The increase is essential as incentive to attract and retain qualified, competent attorneys specializing in Immigration Law, experienced in the more sophisticated Immigration Law enforcement, so as to enable

the Service to implement the comprehensive immigration reforms set forth in the

Illegal Immigration Reform and Immigrant Responsibility Act of 1996, as well as

the Congressional mandates enunciated in other related immigration laws.

BACKGROUND

What we do

INS attorneys provide a full range of legal support, including core responsibilities

for representing INS before the Immigration Courts and the Board of Immigration

Appeals (BIA). INS attorneys support expanded enforcement activities, increased arrests, criminal alien removal programs, Institutional Removal Programs, anti-smuggling efforts, conveyance seizures, expedited removal proceedings and mandatory detention and removal of illegal aliens. The attorneys also administratively impose

civil liabilities upon employers who employ unauthorized, illegal aliens in the

United States.

In addition to these core responsibilities, INS attorneys handle sensitive ‘‘special

interest’’ litigation. Special interest litigation involves cases that are brought to the

attention of INS Headquarters through a request for the initiation of proceedings

by the FBI or other law enforcement agencies. There are several different types of

cases within the special interest immigration category including: (1) ‘‘terrorist’’ cases

or other cases in which the law enforcement agency desires to have the alien removed from the United States such as when the alien is a fugitive from another

country; (2) ‘‘national security’’ cases as defined under the Immigration and Nationality Act (INA); (3) ‘‘terrorist-related’’ cases, where the alien is not charged with

being a terrorist but is believed to be involved in terrorist activity; and (4) ‘‘high

profile’’ cases which are cases that are likely to generate national media or congres-
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sional attention such as the Elian Gonzalez case. INS attorneys handling these

cases are specially trained and often, require upgraded (Top Secret) security clearance because of their use of classified information. Of significance, is the fact that

they coordinate their litigation with other law enforcement agencies and branches

of the Government so as to assist in the removal of aliens that are believed to be

involved in terrorist activity, national security issues and/or crimes committed in

other countries. This type of litigation benefits not only the individual law enforcement agencies but the United States on a national level as well.

Another major category of cases now handled by INS attorneys, are Federal

denaturalization cases. In appropriate instances, INS attorneys prepare and institute proceedings in the United States District Courts to seek the denaturalization

of citizens who obtained their very precious naturalized citizenship and corresponding benefits through illegal procurement or procurement by willful concealment or misrepresentation of a material fact. The INS attorneys handling these

cases work in conjunction with the United States Attorney’s Offices and the Office

of Immigration Litigation, from whom they receive very specialized training.

In recent years, Congress has changed the face of Immigration Law. In 1996

alone, the Immigration Laws were changed twice in the form of the Antiterrorist

and Effective Death Penalty Act of 1996 and, again, as the Illegal Immigration Reform and Immigrant Responsibility Act of 1996. By the adoption of this legislation,

Congress sought to protect and secure our borders against the flow of illegal immigration and the accompanying problems such as crime, drug trafficking, alien smuggling and increased demand on social services and local law enforcement agencies.

In addition to increased Border Patrol personnel, the law also provided for

stepped up enforcement by INS attorneys, more specifically, new provisions were enacted regarding the removal of illegal immigrants—especially the criminal aliens—

already in the country as well as to speed the removal of illegal immigrants who

arrive at our airports and streamline the process for deporting those who are apprehended. Due to Congressional emphasis on lowering crime, lowering the cost of imprisoning illegal immigrants and providing greater public safety, INS attorneys involved in the prosecution and enforcement of immigration laws, are now required

to have specialized knowledge in state and Federal criminal laws, as well.

Furthermore, Congress has recently enacted legislation such as the Nicaraguan

Adjustment and Central American Relief Act of 1997, which together with the

amended Federal Regulations to Article 3 of the United Nations Convention against

Torture and Other Forms of Cruel, Inhuman or Degrading Treatment or Punishment and stepped up assertion of the International Religious Freedom Act, have

served to further expand the role of INS attorneys in the removal of illegal immigrants as well as the need for specialized, sophisticated knowledge of Immigration

and other related areas of the law.

Pay discrepancy

The U.S. Army Manpower Analysis Agency recently completed a comprehensive

review and documented the inadequate staffing needs in part, of the INS attorneys,

in a 600-page report. The resources provided by Congress provide funding and positions for only a portion of the total documented attorneys needed to accomplish the

task.

In addition to the amounts contained in the INS budget to remedy the serious

understaffing of the Legal Proceedings Program, an additional appropriation is

sought to upgrade the salaries of the INS attorneys. This appropriation is essential

to provide competitive salaries in order to attract and retain qualified, competent

attorneys specializing in Immigration Law, so as to enable the Service to implement

the comprehensive immigration reforms set forth in the new and increasingly complex immigration laws.

In the Office of General Counsel, INS, there are only two SES positions. The remainder of the approximately 500 attorneys positions fall within the GS–905 category and are paid salaries within the GS–11 through GS–15 range. Shockingly, the

average INS attorney salary is Grade 14, Step 3, or $70,381. Even more shocking

is the fact that the General Counsel Budget only provides funding for attorneys at

an average of Grade 14, Step 1, or $65,983. This causes a significant annual payroll

budgetary shortfall in the amount of approximately $4 million (for which part of the

requested additional appropriation is sought).

The INS attorney salaries are not competitive with salaries in the private sector,

other Federal agencies and/or divisions within the Justice Department, and/or with

the United States Attorney’s Offices. That the INS attorney salaries are not comparable to the private immigration bar, is evident from the Equal Access to Justice

Act, 28 U.S.C. Section 2412. Private attorneys who handle immigration proceedings,

in appropriate cases, are awarded fees in the amount of approximately $134.31 per
396

hour or $279,000 per year based upon their ‘‘specialized knowledge’’. ($125.00 per

hour statutory cap adjusted by the current Consumer Price Index for urban consumers as of October 1999, to $134.31 per hour.) This rate may be adjusted upward

for those attorneys deemed to possess ‘‘even more specialized knowledge’’. Thus, the

INS attorney salaries that average about $70,381 are well below the market rate

of their counterparts in the private bar.

The salaries of INS attorneys, particularly, non-supervisory senior attorneys are

also not comparable to that of other Federal agency attorneys such as experienced

BIA Attorney-Advisors or the United States Trustees, who are funded for and average salaries in the GS–15 range. The salary range for GS–15 for 2000, is $77,614

through $100,897, this is well above the average INS attorney salary. Similarly, the

INS salaries are below the other senior litigation positions within other divisions

of the Justice Department as well. The salary range for attorney positions in the

following Department of Justice Divisions are funded for and average within the

GS–15 range: Anti-trust; Criminal; Civil; Civil Rights; Environment and Natural

Resources and the Tax Division.

Finally, the United States Attorneys and Assistant United States Attorneys, who

are not paid on the GS Scale, also make substantially more money than INS attorneys. The United States Attorneys are paid on their own pay scale that ranged for

2000 to a maximum of $122,400. It should be noted that INS attorneys assist the

United States Attorney’s Offices by preparing litigation reports and, in some instances, by sitting second chair in the United States District Court immigration litigation cases. In addition, INS attorneys are now handling much of the work traditionally handled by the Assistant United States Attorneys in the area of judicial

denaturalization. A few years ago, there was some consideration given to shifting

INS attorneys to the United States Attorney’s pay scale. However, to date, no initiatives have been made in this regard.

CONCLUSION

On Monday, February 7, 2000, the Administration released the proposed budget

of the United States Government for fiscal year 2001. The proposed budget included

a request for pay reform to upgrade the salaries of Border Patrol and Inspections,

in acknowledgment of increased knowledge requirements and enhanced responsibilities. This same rationale would easily support pay reform for the INS attorneys,

who along with their other aforesaid duties, advise and assist the Border Patrol and

Inspections units.

Accordingly, for all these reasons, we respectfully request that Congress provide an additional appropriation in the amount of at least $10 million to upgrade the salary of INS attorneys and fund the INS Attorney payroll budgetary shortfall. The

details of any enabling legislation could be addressed between us at a later, mutually convenient date.

Mr. Chairman, we look forward to working with you and the other members of

the subcommittee on fiscal year 2001 CJS Appropriations Bill. If you have any questions, please feel free to contact the Local 511, c/o Janice Montana, Chair, Salary

Committee, by telephone at 973–645–3091 or in writing at 76 B Troy Drive, Springfield, New Jersey 07081.

PREPARED STATEMENT OF THE NATIONAL IMMIGRATION AND NATURALIZATION

SERVICE COUNCIL, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

On behalf of the members of the American Federation of Government Employees,

and its National Immigration & Naturalization Service Council, and on behalf of my

16,000 colleagues in the Immigration and Naturalization Service (I&NS) I would

like to thank you for scheduling this hearing. I am pleased to be able to provide

testimony regarding the proposed fiscal year 2001 budget for the Immigration &

Naturalization Service.

INS’ law enforcement and service responsibilities continue to grow more complex.

The Service continues to process ever more quickly the increasing numbers of applicants for admission to the United States. We have reduced backlogs and adjudicated

more applications for benefits under the Immigration & Nationality Act, and we arrest and deport more criminal aliens, and make more drug seizures every year. We

perform all these missions in an environment growing ever more dangerous and

contentious with a workforce that is not growing as fast as the workload it faces.

Despite these facts the men and women of the I&NS care deeply for the country

they serve and the mission they are charged to perform.

We have a number of concerns regarding the Administration’s budget proposal for

the I&NS. We believe that insufficient resources are directed toward enforcement
397

of the I&NA in the interior and at the ports of entry, and that additional Inspectors

need to be hired to insure Inspector safety especially on the land borders where officers are frequently forced to work alone.

We are also concerned because the Administration seeks no additional funding for

its interior enforcement programs. Interior enforcement is the Service’s red headed

stepchild. INS is presently filling only one of every two vacancies in its Investigations Program. The Administration seems to see no need for additional Investigations resources. The Administration also proposes no increases in resources for its

Deportation Program. The Administration is proposing steps to address its inability

to hire sufficient Border Patrol Agents. We applaud those actions. But the need for

increased staff does not end at the border. We must remember Immigration enforcement does not end at the Border, and effective enforcement and service programs

demand that sufficient support personnel also be hired. We also believe that additional adjudicators needed to be hired to continue to eliminate backlogs in the adjudications programs and insure the appropriate care is taken in the exercise of the

Service’s adjudications functions.

I&NS faces great difficulty in filling certain positions, particularly in the Border

Patrol. Similarly, I&NS Inspections is not properly graded and many Inspectors

seek positions in other branches of the Service. The Administration is now attempting to address pay disparities and while we fully support the Administration’s proposal to provide funding to increase the full performance grade level for Immigration Inspectors and Border Patrol Agents to GS–11 we have concerns regarding certain aspects of the Service’s other Pay Reform Proposals. We have analyzed the

agency’s other pay reform proposals as they will impact Border Patrol Agents, Pilots, Deportation Officers and Detention and Deportation Officers and we find that

they are flawed. We oppose the Administration’s overtime pay reform proposals.

While the grade related proposals improve pay for entry level Border Patrol Agents

and Inspectors the overtime related proposals will decrease pay for more senior pilots, deportation officers and Border Patrol Agents. Cutting the pay of senior officers

will not make these occupations more attractive.

The loss of income will average some $4,500 for Deportation Officers and Detention and Deportation Officers, who I represent, for example. The negative impact on

other officers will be similar or greater. Clearly, the Administration’s ‘‘pay reform’’

proposals need to be reworked lest they totally demoralize INS’ law enforcement

workforce. It makes no sense to offer some employees a hiring bonus while cutting

compensation for overtime others are required to work as a result of staffing shortages.

We know that the Congress is concerned about improving morale and training for

all of INS’ officers and in improving INS overall effectiveness. Nonetheless we believe it counterproductive to reduce compensation provided employees because they

are required to work overtime. The administration’s proposals to change the way

employees are compensated for overtime work amount to nothing more than asking

them to work more hours for less money.

One important aspect of pay reform not addressed in the Administration’s budget

proposal is the law enforcement officer status of Immigration Inspectors. In addition

to the pay reform proposal for Immigration Inspectors now proposed by the Administration, we urge the Committee to support extension of law enforcement retirement coverage to Immigration Inspectors, as part of Inspections Pay Reform.. A proposal now pending before the Congress would accomplish this.

Briefly, H.R. 1228 would expand the provisions of Section 8336(c), Title 5, U.S.

Code to cover Immigration Inspectors. The hazardous duty retirement provisions of

that statute provide that officers working in certain occupations may retire at age

50 with twenty years of service under the Civil Service Retirement System, or at

any age after 25 years of service if they are covered under the Federal Employee

Retirement System. The early retirement provisions are intended to promote the

maintenance of a young and vigorous workforce in the covered occupations. Employees covered under the statute contribute toward their pensions at rates higher than

do non law enforcement employees. The law also provides for mandatory retirement

at age 57 for employees who have completed twenty years of covered law enforcement service. Real pay reform for INS Inspectors must address both pay and retirement issues, as the Administration itself now recognizes.

Thank you for this opportunity to submit this testimony for the record.
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DEPARTMENT OF COMMERCE

PREPARED STATEMENT OF THE AMERICAN INDIAN HIGHER EDUCATION CONSORTIUM

INTRODUCTION

Mr. Chairman and Members of the Subcommittee, on behalf of this nation’s 32

American Indian Tribal Colleges, which comprise the American Indian Higher Education Consortium (AIHEC), we thank you for the opportunity to share our fiscal

year 2001 funding requests regarding the United States Departments of Commerce,

Justice and State.

Under the Department of Commerce programs, we will address five specific areas:

—We request that the Subcommittee fully support the President’s Budget Request of $45 million for the Technology Opportunities Program (TOP) to help in narrowing the Digital Divide in Indian Country. —We request that some funding for the New Markets initiative be specifically directed to the Tribal Colleges to complete a five-year technology infrastructure

strategic plan with a detailed cost assessment. This critical step in planning

will allow the Tribal Colleges to further address the much-needed economic development issues of tribal communities. —We strongly urge support of a new $28 million program designed to build math,

science and technology capacity at Tribal Colleges and other Minority Serving

Institutions. —We urge Subcommittee to support the Economic Development Administration’s

efforts to address the chronic unemployment and poverty in our reservation

communities and to include report language that would foster partnerships between the EDA and the Tribal Colleges.

—We request support and expansion of the Internal Trade Administration (ITA)

initiative to help Native Americans enter new markets and increase cultural

heritage tourism as part of their communities’ economic development plans.

Tribal Colleges often serve as the tribal archive and community centers and are

a logical catalyst for attaining the economic development goals of both the ITA

and tribal communities.

Under the Department of Justice programs, we request that the Subcommittee

fully support and build upon the President’s budget recommendation of $1 million

for a Tribal College Law Enforcement Training Initiative. This program would support training for law enforcement curricula—especially important to the Tribal Colleges due to the high rate of crime on American Indian reservations. Specifically,

we request that this project be increased to a level of $5 million.

This statement will cover two areas: First, it will provide some background on the

Tribal Colleges and second, it will provide justifications for the above funding requests.

BACKGROUND ON TRIBAL COLLEGES

In the 1960s, dismal statistics concerning the American Indian experience in education brought tribal leaders to the realization that only through local, culturallybased education could many American Indians succeed in higher education and help

bring desperately needed economic development to their isolated and underserved

communities. The Tribal College movement began more than 30 years ago as a very

sound and well thought-out solution to this problem. In the late 1960s and early

1970s, the first Tribal Colleges were chartered by their respective tribal governments, to be governed by boards of local tribal people. These first colleges were

started, with little money and a lot of determination, in abandoned and even condemned government buildings and old trailers, using three-legged desks, wood

crates for shelves and typewriters with missing keys. In 1972, the first six fledgling

tribally-controlled institutions came together to form the American Indian Higher

Education Consortium. Today, AIHEC is a cooperatively sponsored effort and integral support network for 32 member institutions in the United States and one in

Canada.

Tribal Colleges and Universities now serve more than 25,000 students from more

than 250 federally recognized tribes and are located in 12 states. Tribal Colleges

offer primarily two-year degrees, with some colleges offering four-year and graduate

degrees. Together, the colleges represent the most significant development in American Indian education history, promoting achievement among students who would

otherwise never know educational success. All of the Tribal Colleges are fully accredited, with the exception of four institutions that are accreditation candidates.

Despite our successes, Tribal Colleges remain the most poorly funded institutions

of higher education in this country, and although conditions at some have improved
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substantially, many of the colleges still operate in trailers, cast-off buildings, and

facilities with crumbling foundations, substandard and exposed wiring and leaking

roofs. In spite of such a fragile existence, Tribal Colleges are bringing advanced

technology to Native communities and partnering with high technology firms to

build an American Indian information technology workforce. For example, Dine ́ College, serving the Navajo Nation in Arizona and New Mexico, has joined Coconino

Community College and Grey Hills High School in a partnership with IBM to develop, prepare, and retain an American Indian workforce in jobs related to the high

tech/computer industry. But programs such as this represent only a first step. In

response to a recent query from the Senate Indian Affairs Committee, AIHEC surveyed the Tribal Colleges to determine the status of technology infrastructure at the

nation’s Tribal Colleges. The results revealed that the 21 responding colleges estimated a cost of $4,650,000 to be brought up to speed with current technology. Expanding this average indicates that the 32 colleges in the United States would require a minimum of $8,000,000 to be brought safely into the first phase of the new

technology era.

Our core operations funding, which is authorized under the Tribally-Controlled

College or University Assistance Act and funded through the Department of Interior

appropriations bill, remains grossly inadequate. Despite an increase in our appropriation of $4 million in fiscal year 2000, the Tribal Colleges’ appropriation of $3,433

per Indian student (ISC) is dramatically less than the average per student revenue

of mainstream two-year institutions and falls far short of the authorized level of

funding currently $6,000 per Indian student. In addition, due to the location of the

majority of Tribal Colleges on federal trust territory, states have no obligation and

in most cases, do not fund the Tribal Colleges. In fact, most states do not even fund

the institutions for the non-Indian students who attend our colleges. The non-Indian

enrollment at the Tribal Colleges is approximately 20 percent.

Tribal Colleges serve as a vehicle to accomplish what centuries of paternalism and

outside experimentation have failed to do: We are enabling American Indians to succeed and regain self-sufficiency. Paramount to achieving this goal are the innovative

teaching philosophies of the Tribal Colleges, and the fact that our graduates live

and work on the reservations and impact others by giving back to their communities

serving as role models and leaders. This ‘‘ripple effect’’ can be seen in increased community pride, the increased importance of succeeding in elementary and secondary

school, and in Tribal College graduates implementing creative and effective solutions for their communities’ problems. Today, approximately one in five American

Indians live on a reservation. Past federal policies of relocation and neglect of these

trust territories have left once proud Indian communities in abject poverty. The logical alternative to this lose-lose situation is demonstrated by the Tribal Colleges.

Through the Tribal Colleges and Universities American Indian communities are

being effectively developed, residents can move off the welfare rolls and into gainful

employment, lowering taxes for all Americans while providing critical services to

these historically under served areas. It would be tragic not to expand the modest

investment in, and capitalize on, the human resources that will help open new avenues of economic development specifically through enhancing Digital Opportunity

and thereby narrowing the Digital Divide.

JUSTIFICATIONS

Given the needs outlined above and the reality of an ever-expanding Digital Divide, the Tribal Colleges request support for the following programs and initiatives

within the Department of Commerce.

Technology Opportunities Program (TOP).—We urge you to support the proposed

$45 million funding level for the Technology Opportunities Program (TOP). This

program is designed to promote access and the necessary infrastructure to bring

high tech opportunity to all Americans. The TOP program is ideally suited to helping the Tribal Colleges meet the needs of their isolated rural communities through

innovative technology. Lac Courte Oreilles Ojibwa Community College (LCOOCC) in

Hayward, Wisconsin, plans to submit an exciting TOP proposal this year on behalf

of several Tribal Colleges. LCOOCC proposes upgrading the existing satellite link

system to a supercomputing grid that would create a wide area network for as many

as 12 Tribal Colleges, initially. Students, faculty and staff at these colleges would

be able to access software and the Internet on a high performance T1 line. The success of this promising proposal to bring high tech capability to Indian Country depends in part on the Tribal Colleges’ ability to fully participate in programs such

as TOP. A substantial barrier to full participation is matching requirements. We request report language in the appropriations bill that would waive the program’s

matching requirement for the Tribal Colleges.
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New Markets Initiative.—In 1999, the Department of Health and Human Services

(DHHS) funded an initial assessment of the current technology capacity at the Tribal Colleges and Universities. The results of the study, released last September, were

eye opening. Nearly one-third of the Tribal Colleges were found not to be Y2K

ready. The results also clearly identified critical areas of technology infrastructure

enhancement as a top priority.

Funding for a Tribal College—New Markets Initiative would assist the Tribal Colleges turning the Digital Divide into ‘‘Digital Opportunity’’ for the isolated communities where most colleges are located. To begin accomplishing this goal, our institutions would engage in a two-step process. The first step would be the development

of a comprehensive 5-year technology infrastructure plan and cost assessment of its

implementation, which began last year with the DHHS Y2K study. The second step

would focus on convening a national, high-level meeting of public and private sector

organizations interested in promoting Internet connectivity for Indian Country. Participants would include private industry, foundations, federal agencies and other

partners who could assist Tribal Colleges in securing funds from a wide array of

sources to bring digital opportunity and economic development to Indian Country.

We urge the Subcommittee to direct the Department of Commerce to work with the

President’s Board of Advisors on Tribal Colleges and Universities to convene this

important meeting.

This process of partnering with the private sector is already underway at some

Tribal Colleges. For example, Salish Kootenai College (SKC) in Pablo, Montana has

an ‘‘Internet access partnership’’ with BigSky Net, a regional Internet provider.

Under the agreement, SKC permits BigSky Net to house Internet server equipment

on its campus, and in return, SKC students and faculty get unlimited Internet access at no cost (except for a monthly T–1 data connection fee from Pablo to Kalispell, Montana). Additional funding would enable more Tribal Colleges to participate in such programs and partnerships, further enhancing our efforts to meet the

goals of our collective missions: to bring higher education and economic development

to tribal communities.

Building Math, Science and Technology Capacity at the Tribal Colleges and other

Minority Serving Institutions.—The Commerce Department is proposing a program

to spur the interest of minority students in the field of science critical to the mission

of the National Oceanic and Atmospheric Administration (NOAA) and the National

Institute of Standards and Technology (NIST). We urge you to support the full funding of this $28 million program designated for Minority Serving Institutions.

Economic Development Administration (EDA).—The EDA is charged with providing assistance to economically distressed areas and regions to alleviate conditions

of ongoing unemployment and underemployment. Contributing to the economic development of American Indian reservations is an essential goal of the Tribal Colleges. We strongly support the commitment of the EDA to strengthen its efforts to

assist American Indian tribes by providing capacity building and developing finance

and infrastructure projects needed to enable our communities to be more effective

and competitive in economic development efforts, as stated in the fiscal year 2001

budget recommendation sent to Congress. We request report language that will expand this program to include partnerships with Tribal Colleges to enable our institutions to further address the chronic unemployment and poverty that plague reservation communities.

International Trade Administration (ITA).—The ITA has targeted Native American Economic Development as a priority in fiscal year 2001. The ITA intends to

assist Native Americans in their efforts to use cultural heritage tourism as part of

economic and community development plans. The Tribal Colleges are currently pursuing partnerships with USDA, US-AID, Interior and the private sector to bolster

international programs, tourism, trade, and outreach to other indigenous peoples.

For example, Haskell Indian National University, Lawrence Kansas, recently received a partnership grant from US-AID to work in the Altai (Siberia) region of Russia. The Native American economic development program of ITA could partner with

the Tribal Colleges to enhance the work that has already been started by the Tribal

Colleges.

Department of Justice—Office of Tribal Justice.—Tribal Colleges play an intricate

part in the education system that supports tribal justice on Indian reservations.

Nearly one-third of the Tribal Colleges currently offer justice related programs. The

President’s budget recommends $1 million to support tribal law enforcement and

law related education and training at the Tribal Colleges. We urge the Subcommittee to build upon this recommended level and create a $5 million Tribal College Law-Related Education Initiative.

Existing nationally certified law enforcement programs at Tribal Colleges, such as

United Tribes Technical College in Bismarck, North Dakota, offer specialized cur-
401

riculum that provides a stronger educational foundation and promotes a heightened

sense of awareness. These curricula require students to take courses in psychology

and sociology and classes in administration. One model program is at Fond du Lac

Tribal and Community College in Cloquet, Minnesota, that offers both Associate of

Applied Science and Associate of Science degrees in Law Enforcement. The Fond du

Lac programs can be completed in two years and incorporate direct field experience

and a multicultural environment into its coursework better preparing graduates for

working in the field.

We believe that the additional funding to the Tribal Colleges for tribal law enforcement and law-related education and training will allow our institutions to continue and expand on-going programs of training better law enforcers, legal personnel, court and judicial staff, and tribal government officials in a manner that

meets state and national standards while, addressing important and unique cultural

needs.

CONCLUSION

In light of the justifications presented in this statement and the overwhelming

evidence that without an insurgence of educational and technology centered opportunity the Digital Divide will widen in rural America, we urge the Subcommittee

to increase funding for Tribal Colleges to help bring economic development to Indian

Country. Fulfillment of AIHEC’s fiscal year 2001 request will strengthen the mission of our colleges and the enormous, positive impact our institutions have on our

communities and will help ensure that we are able to properly educate and prepare

thousands of American Indians for the workforce of the 21st century. Without Tribal

Colleges to serve as the means for moving from welfare to work, much of the reform

accomplished by the Congress will fail throughout Indian Country. As demonstrated

in these remarks, Tribal Colleges have been extremely responsible with the federal

support they have received in the last 19 years. It is important that the Federal

Government now capitalize on its investment. As the 1997 Carnegie Report on Tribal Colleges stated, ‘‘Now, as strongly as ever, we repeat our conviction that Tribal

Colleges deserve continued support. Their value has been proven, but their vision

is not yet fulfilled’’ (Native American Colleges: Progress and Prospects, Carnegie

Foundation for the Advancement of Teaching, 1997). Our institutions have proven

themselves to be a sound federal investment, and we ask for your continued support.

Thank you.

PREPARED STATEMENT OF THE ALACHUA COUNTY BOARD OF COMMISSIONERS, ALACHUA COUNTY, FLORIDA

Mr. Chairman: Thank you for allowing the Alachua County Board of Commissioners to present written testimony before your Subcommittee regarding a major

economic initiative for which the County seeks your support under the Department

of Commerce Economic Development Administration.

Alachua County is seeking federal funds to assist with expanding its collaborative

neighborhood revitalization program. This collaborative program includes the

Alachua County Community Services Department, Office of Code Enforcement,

Alachua County Sheriff and Alachua County School Board. The Alachua County

Commission requests $2.3 million in federal funding to expand this successful revitalization model to other neighborhoods. The process would include additional community needs assessments, increased educational, training and job readiness opportunities, mobilization of community resources and community empowerment for sustainability of neighborhoods throughout Alachua County. The funding will also support additional Sheriff’s deputies at a level needed to provide adequate and intensive law enforcement, and community policing activities to the expanded Partner

areas. Following is a background on this initiative.

In 1993, the Sheriff’s Office made a request to the Board of County Commissioners for assistance due to the spiraling crime rate in southwest Alachua County.

The Sheriff’s Office reported that 57 percent of its 911 calls came from an area that

had only 3.2 percent of the population. This area was identified as consisting of the

five following neighborhoods: Clayton Estates, Majestic Oaks, Tower Oaks, Cedar

Ridge and Sugarfoot. In addition to the disproportionately high crime rate, it was

determined that there were inadequate community services, a high percentage of

absentee landlords, a lack of concern by most residents, in concert with the physical

appearance of the neighborhoods steadily deteriorating.

In fiscal year 1994, the Alachua County Commission provided funding for a Program Manager to staff the Partner’s for a Productive Community (PPC) Program.
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The PPC was launched as a strategic planning effort based on three goals: to establish neighborhood-based services, to develop public/private partnerships and to focus

on prevention. The success of this project depended upon the coordinated efforts of

the Sheriff’s Office, the Courts and the Department of Community Services. The objectives of the Sheriff’s Office were to reduce the number of calls from the area and

to develop trusting relationships with the residents interested in improving their

community. The objectives of the Courts were to help with the swift prosecution of

cases brought forth and to increase personnel in key areas. The objectives of the Department of Community Services through a Program Manager were to develop and

implement a needs assessment, to assess social services needs in accordance with

the results of the assessment, to develop a community council comprised of owners,

tenants and property managers. This project would be a multi-agency strategy to

stabilize, revitalize and sustain these five neighborhoods.

Community Improvements

Since fiscal year 1995 accomplishments include: free community day care for 75

children, 30 community day care slots, eight in-home day care slots, establishment

of a medical clinic provided by the Alachua County Health Department, the creation

of 30 new jobs by the Early Progress Center, reduction in 911 calls from 57 percent

to 14 percent of total calls, the overall increase in property values for four of the

five neighborhoods. The provision of seasonal recreation programs for children in

the targeted communities by the Y.M.C.A. In 1996 the PPC received the National

Association of Counties’ Achievement Award in recognition for distinguished and innovative contributions to improving and promoting county government. Additionally,

an award was received from the League of Women Voters for outstanding community service.

New activities include community forums on landlord and tenants issues, welfare

reform and subjects determined to be germane in the effort to educate and revitalize

this community. Steps have been taken to establish 4–H Clubs in the communities

to provide positive learning and character building experiences for youth. It is also

being proposed to implement adult literacy classes, computer training, General Education Diploma preparatory training and a One Stop Program to provide employment opportunities. A community health fair was conducted with numerous agencies involved in providing immunizations for area children as well as the dissemination of information on health and safety issues. Three major and three mini neighborhood cleanups were completed. Through diligent efforts of the Office of Codes Enforcement, Alachua County government has reduced the number of abandoned and

vandalized buildings from five to two.

The sustaining factor within this community is the formally organized Partner’s

for a Productive Community Council. The Council is the guiding force that deals

with issues and determines unmet needs. It has become incorporated and has received a donation of space (estimated to be worth $5,000.00 per year) which will

house the organization as well as the Center for Community Services.

Finally, in December 1999, Alachua County received Official Recognition (OR)

from the Executive Office of Weed and Seed for two of the neighborhoods being

served by the Partners for Productive Communities Program. There is no funding

associated with this recognition. This OR will further strengthen the long-term efforts to improve the quality of life in these neighborhoods.

We hope that the Subcommittee will find this critically important project worthy

of your support. Thank you for your consideration.

PREPARED STATEMENT OF THE AMERICAN SOCIETY OF MECHANICAL ENGINEERS

Mr. Chairman and Members of the Subcommittee: The National Institute of

Standards and Technology (NIST) Task Force of the Council of Engineering, and the

Council on Codes and Standards, of the American Society of Mechanical Engineers

(ASME International), is pleased to have this opportunity to provide written testimony on the fiscal year 2001 NIST budget request.

ASME is the premier organization for promoting the art, science and practice of

mechanical engineering in the world. It conducts one of the world’s largest technical

publishing operations, holds some 30 technical conferences and 200 professional development courses each year, and sets many industrial and manufacturing standards. This testimony represents the considered judgment of the ASME NIST Task

Force and the Council on Codes and Standards, and is not necessarily a position

of ASME as a whole.

Mechanical engineers have a long-standing professional interest in the engineering, technology, development, and innovation that influence the economic well being
403

of the nation. The ASME NIST Task Force and the Council on Codes and Standards

have worked with NIST and thus recognize NIST as one of the key government

agencies that contributes to the development and application of technology.

ASME has long supported the mission of NIST, which is to promote U.S. economic

growth by working with industry to develop and apply technologies across a broad

spectrum of areas appropriate for the civilian industrial sector, and to develop and

maintain world class capabilities in metrology and standards. NIST’s technical programs are unique because they foster government and industry cooperation through

cost-sharing partnerships that create long-term investments based on engineering

and technology. These programs are aimed at providing the technical support necessary to our nation’s future economic health.

Measurement and Standards

The fiscal year 2001 budget request would provide $332.3 million for the Measurement and Standards Laboratories, a 17 percent increase over the current fiscal year.

The Task Force supports this increase. The laboratories provide U.S. industry with

critical technical information through their work in developing new measurement

methods, testing techniques, data evaluation, and standards. NIST laboratories also

serve as the U.S. reference point for measurements with counterpart organizations

throughout the world. The fiscal year 2001 appropriation for the Measurement and

Standards Laboratories will support further development of critical measurement

technologies, methods, and services needed by the U.S. to promote technological

progress, improve products and services, and enhance international competitiveness.

The Department of Commerce, working through NIST, continues to provide essential support to the private sector’s efforts to assist federal agencies in meeting the

provisions of The Technology Transfer and Advancement Act of 1995 (Public Law

104–113), which requires the federal government to use private sector voluntary

consensus standards. In some cases, this has proven to be a challenging enterprise

for both the standards development organizations and the federal agencies. Although the process of converting from government standards to voluntary consensus

standards is well underway, we continue to look to NIST and the congressional

oversight committees to encourage this effort and to monitor the progress made to

date.

The ASME continues to support NIST’s efforts to elevate U.S. participation in the

international standards development process. Such efforts must include continuing

support for U.S. representation on the international standards bodies (ISO and

IEC). Without adequate representation on these bodies, the nation’s trade interests

will be severely compromised.

For the laboratories to continue developing and providing the state-of-the-art

measurements that underpin U.S. industrial performance, NIST requires facilities

that will enable it to deliver the best possible measurement system. The Task Force

supports the request of $35.9 million for the critical repair, maintenance, and safety

upgrades at NIST’s facilities in Maryland and Colorado.

Extramural Programs

The fiscal year 2001 budget request would provide $339 million for NIST’s Extramural programs. These programs are true public/private partnerships that require

cost sharing by the private sector and focus on investments that are expected to provide broad-based benefits to the economy. These on-going programs, the Advanced

Technology Program (ATP) and the Manufacturing Extension Partnership (MEP),

are merit-based, and closely evaluated. The Task Force believes that the ATP and

MEP are good for the nation’s economic well being and the health of the U.S.

science, engineering, and technology enterprise. The ATP provides cost-shared funding to industry for high-risk research and development projects with potentially

broad-based economic benefits for the United States. The Task Force supports the

President’s request for $175.5 million in fiscal year 2001 for ATP to promote industry’s ability to undertake technologically challenging initiatives that have broad economic promise. When combined with anticipated carryover and prior year recoveries, the request will permit approximately $65 million for new awards in fiscal

year 2001.

The ASME NIST Task Force also supports the $114.1 million request for the

MEP, which will permit NIST to continue providing the federal share of funding

needed to support an existing network of centers serving smaller manufacturers in

all 50 states, the District of Columbia, and Puerto Rico. With its fiscal year 2001

base funding, MEP will work to increase the capabilities and effectiveness of MEP

centers, collect and evaluate performance and impact data, and further develop the

electronic networking and information capabilities of the MEP system to strengthen

communications.
404

Cooperative technology programs such as the ATP and MEP have been catalysts

in bringing government, industry, and universities together to enhance the economic

competitiveness of the nation. These programs are needed to improve the transfer

of new discoveries in science and engineering to innovative technologies, global quality practice, and profitable manufacturing capabilities on the shop floor.

New Initiatives

The fiscal year 2001 NIST budget request also contains a number of initiatives

that recognize the nation’s economy is being driven in large part by recent advances

in information technology (IT), which today provides an essential foundation for the

nation’s economic growth and national security. However, this critical IT infrastructure could leave the nation vulnerable to disruptions caused by natural disasters,

human error, equipment failures, and purposeful attacks.

The fiscal year 2001 NIST budget request reflects NIST’s participation in the recently launched National Plan for Information Systems Protection. The Task Force

supports the budget request for $60 million in new funding to protect the nation’s

critical information infrastructure. Of the total amount, $50 million would be allocated to fund the launching of the Institute for Information Infrastructure Protection (I3P), a public-private partnership program to support research and technology

development to protect critical information and telecommunications infrastructures

from attack or other failures. An additional $5 million would allow NIST to develop

new measurements, standards, test methods and guidelines to better protect IT elements of the nation’s critical infrastructures (e.g., security engineering and system

architecture, advanced cryptography through a Critical Infrastructure Protection

(CIP) Research and Development effort). The remaining $5 million would enable

NIST to strengthen the security of federal computer systems to resist attempted

cyber-terrorism and to recover from security breaches and to make that expertise

available to other federal agencies through the formation of a CIP Expert Review

Team.

Current forecasts indicate that business-to-business e-commerce transactions will

continue to grow rapidly. This trend will have broad economic impact by lowering

production costs and raising productivity throughout the economy. Businesses are

increasingly using e-commerce for a wide range of critical processes throughout the

supply chain. The continued growth of these practices will require new

infrastructural tools and capabilities. The Task Force supports the request for $14

million in new funding to collaborate with the private sector to build the new infrastructure for an e-commerce economy.

The Task Force also supports the request for $46.3 million to expand the technology horizon through the development and measurements and standards needed

to promote active pursuit of long-range opportunities to ensure that the U.S. economy will benefit from the next major wave of technological advances. This budget

proposal would fund initiatives in nanotechnology and combinatorial science, two

areas with bright prospects for rapid progress and the potential to deliver significant returns to the U.S. industrial and national economies.

The fiscal year 2001 NIST budget request also includes $15.5 million to fund a

three-pronged approach to increase the number of highly skilled scientists and engineers through increased partnerships with minority-serving institutions and expansion of the NIST/National Research Council Postdoctoral Research Fellowship Program. The Task Force supports this effort to provide a continuous supply of technical expertise and well-trained people that are vital to the continued success of a

national economy driven by high-tech successes.

Thank you for your consideration of our views on the fiscal year 2001 NIST budget request.

LETTER FROM KEVIN KLOSE, PRESIDENT AND CEO, NATIONAL PUBLIC RADIO

FEBRUARY 24, 2000.

The Honorable JUDD GREGG,

Chairman, Commerce-Justice-State Subcommittee, Senate Appropriations Committee, 146A Capitol Building, Washington, DC.

DEAR CHAIRMAN GREGG: Thank you for the opportunity to comment on a fiscal

year 2001 appropriation for the Public Telecommunications Facilities Program

(PTFP) at the National Telecommunications and Information Administration

(NTIA), part of the U.S. Commerce Department. On behalf of National Public Radio

(NPR) and the hundreds of public radio stations it represents, I respectfully submit

this letter and attached statement for the hearing record.
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Each week, nearly 20 million Americans listen to the programming offered by

public radio stations. Since its founding exactly 30 years ago this week, NPR and

its Member stations have become an indispensable source of news, information, cultural and educational programming in this country. Critical to the success of public

radio is the PTFP program.

With sufficient resources, public radio stations nationwide will be able to enhance

their technical infrastructure, thus enabling stations to better serve the American

public. Furthermore, as public broadcasting expands into the digital universe, NPR

and its Member stations are eager to work with you to encourage the continued

growth and survival of public radio and television. But without active support by

Subcommittee Members, those resources may remain beyond the grasp of our Member stations. The time for reinvestment in public broadcasting is now.

Public broadcasters support the Administration’s request for a $110 million federal appropriation for PTFP. This recommendation is further outlined in the attached supporting statement. Public broadcasters seek a fiscal year 2001 $110 million PTFP funding level to

maintain and expand existing service. PTFP support is essential to the vital role

public stations play in their communities. PTFP is a matching grants program for

public broadcasting stations, radio reading services for the blind and other non-profit telecommunications entities. All PTFP dollars go directly to local stations, assisting them in the purchase of equipment to extend their signals into un-served and

under-served areas, replacement of outmoded equipment and upgrade of facilities.

It is an excellent public-private partnership.

Public broadcasters urge the Subcommittee to appropriate $110 million to PTFP

for the conversion to digital broadcasting. Public broadcasting faces a daunting challenge in its conversion to digital technology. The estimated cost to the entire public

broadcasting industry is $1.7 billion. Public radio stations are facing an estimated

$70 million in digital broadcast-related costs: an estimated $11 million to help stations defray tower dislocation costs and maintain analog broadcasts and $60 million

to assist in public radio’s own conversion to digital transmission standards.

With additional funding for PTFP, public broadcasters nationwide will be supported in their efforts to sustain local programming, encourage community discourse, and present ideas while adapting to the rapidly evolving digital world. Public radio is one of the best sources of local programming in light of the consolidation

in the radio marketplace.

Again, thank you for your long-standing commitment to our nation’s public broadcasters and the citizens and communities they serve.

Sincerely,

KEVIN KLOSE,

President and CEO.

PREPARED STATEMENT OF THE NATIONAL PUBLIC RADIO

INTRODUCTION

NPR is a private, non-profit corporation that produces and distributes award-winning programming such as Morning Edition, All Things Considered, Performance

Today, Car Talk and Jazz Profiles. NPR is also a membership organization comprised of noncommercial, educational radio stations that are locally licensed and

controlled. Moreover, Member stations design their own formats—combining locally

produced programming with offerings from NPR and other programming sources.

Each station’s format is crafted to provide the best service for its respective community.

Thank you for the opportunity to comment on the Public Telecommunications Facilities Program (PTFP). PTFP distributes federal grants to public stations that

must be matched by the local community. Congress has invested in the construction

and upgrade of local public broadcast facilities through PTFP since 1962 and it is

the only capital grants program for public broadcasting stations. The fundamental

element underlying federal support is the importance Americans place on public

broadcasting programming and services.

PUBLIC BROADCASTING ACCOMPLISHMENTS THROUGH PTFP

The Program Links Rural & Un-served Areas With the Greater Community.—

PTFP especially benefits rural areas and states like Kentucky, Alaska, New Mexico

and Colorado where topography or sheer size makes it difficult for people to receive

a public radio signal. Translator/booster facilities, or auxiliary broadcast facilities,

typically serve sparsely populated areas that often lack a sufficient economic base

to support a full service station. These facilities are usually established only as a
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result of the community’s desire to receive first or additional public radio service,

and are funded through federal and/or state grants or as a result of modest capital

campaigns funded by the future listeners. In rural and other under-served areas,

with relatively fewer radio and television signals available, translators have a

heightened meaning to public radio listeners.

According to the Commerce Department, the 1998 and 1999 grants to public radio

stations included projects expanding American’s access to public radio to more than

628,000 people who presently do not receive any such signal. Communities to receive a first public radio service because of the 1999 grants include Cape May, New

Jersey; Jackpot, Nevada; and Mojave, California.

For instance, KNAU–FM in Flagstaff, Arizona and the Grand Canyon Association

(a private, nonprofit group dedicated to providing information about the Grand Canyon) received a 1999 PTFP grant to bring service to Grand Canyon, Arizona. A

3,000-watt station will be established, capable of producing local programming. The

new station will cover an 8,000 square mile area, including part of a Native American reservation, and bring public radio service to 4,300 permanent residents and

nearly five million visitors each year. The community does not have the economic

base to support a full station. The 3,000-watt station will bring the outside world

to Grand Canyon via KNAU–FM, as well as provide an outlet for local programming.

PTFP Will Permit Replacement of Translators with Full Powered Origination

Service.—As expressed by the Subcommittee and the Congress, there is a need to

better serve rural and other under-served areas as well as un-served communities.

PTFP funding can assist stations in converting their secondary translator/booster facilities to primary full powered facilities capable of local producing programming. As

a result of these upgrades, rural and under-served communities will be able both

to receive and to produce locally responsive programming.

PTFP Assists in Maintaining and Upgrading the Existing Infrastructure.—Sustaining the public broadcasting system is a key PTFP goal, and the replacement of

aging, obsolete equipment is a critical concern for stations. Public radio is in need

of continued financial support because the infrastructure is aging and in many cases

obsolete. Much of the equipment is old and must be replaced. Unfortunately, much

of the equipment is so old that replacement parts are no longer available. For instance, public radio station KCAW–FM in Sitka, Alaska, received a 1999 grant for

$29,700 to replace a failing 18-year old transmitter. The typical life-span of a transmitter is 12–15 years.

Similarly, KRWG–FM in Las Cruces, New Mexico received a 1999 grant for nearly

$14,000 to replace an old, worn-out studio-to-transmitter link (STL) and audio processor with a digital STL and compatible digital processor. The grant will allow

KRWG–FM to continue serving approximately 263,000 people.

A $27,895 PTFP grant will enable New Hampshire Public Radio to improve the

broadcast quality of the state network by replacing the obsolete and failing transmitter at repeater station WEVH–FM in Hanover. The project will also replace recording and playback equipment at WEVO–FM in Concord. New Hampshire Public

Radio serves a population of over 900,000 people.

The PTFP program also support radio reading services that help combat the isolation of blind and elderly disabled people nationally. The radio reading services predominantly rely on public radio’s FM subcarrier channels. In 1999, a grant was

made to extend the service area of the Iowa Radio Reading Information Service

(IRRIS) in Des Moines, Iowa. The project will acquire satellite up-link and downlink equipment to enable IRRIS to provide its service to Iowa City, Cedar Falls, and

Sioux City, Iowa. The grant will also purchase a supply of the special receivers

needed by the visually handicapped in those communities to utilize the service.

About 1,000 visually handicapped people will receive service in the added communities.

A significant increase in the PTFP appropriation is necessary to enable public

radio to meet the challenges posed by an aging infrastructure and expanding service

to un-served and under-served areas.

DIGITAL CONVERSION

Today’s new technology will soon become tomorrow’s standard operating equipment. Public radio and television can realize its future through the assistance of a

$110 million PTFP appropriation. In fact, this increase in federal support through

PTFP will greatly enhance the success of local stations to attract state and private

funders necessary to convert radio and television stations to a digital standard.

Public Radio’s Digital Future.—Digital radio transmission technology promises to

deliver compact-disc-quality sound free of interference to listeners. Digital produc-
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tion and transmission conversion will enable public radio stations to produce and

deliver programming using a far more efficient process than exists today. It may

allow listeners and users to experience a variety of new services such as the ability

to search program formats, scan selective programs as well as read music lyrics and

song titles.

The FCC has initiated a rulemaking to permit public comment on the various digital radio standards being proposed. The frontrunner standard in the U.S. is InBand, On-Channel (IBOC). This conversion is expected to take place in the near future.

Public radio stations are already converting their production facilities to digital

because analog equipment and parts are being phased out in the radio industry.

Digitizing stations increases operational efficiency and decreases operating costs.

For instance, WKYU–FM in Bowling Green, Kentucky has four personal computerbased digital workstations, digital editors and DAT machines. The digital

workstations allow for a more efficient and money-saving process to edit programming.

Also, PTFP funding for digital production equipment mean that stations will not

have to rely as heavily on real-time evening, weekend and overnight staff. Stations

can eliminate the need to purchase and store audio-tape. In sum, these efficiencies

are realized through PTFP.

PTFP Will Ameliorate Impact Of DTV Transition On Public Radio.—Public radio

stations face significant challenges and opportunities afforded by the digital revolution. A federal mandate directing television stations to convert to digital will affect

public radio stations as well.

Nearly 40 percent of NPR member stations lease space on television-owned towers. As television stations convert to digital, they are adding new digital transmitting antennas to their existing towers that enable them to launch digital broadcasts.

Meanwhile, television is also required to maintain their existing transmission equipment on towers so as to continue an analog service. In many cases, the additional

television equipment will force public radio stations off shared towers.

DTV-related costs to radio are estimated to exceed $11 million. In large part, the

actual costs will depend on the actions of other commercial and public television and

radio stations. Nevertheless, PTFP grants act as critical catalysts, helping stations

raise the matching funds from their communities to pay for new towers and other

capital needs.

Public Television Must Meet A Year 2003 Digital Deadline.—Public television is

currently making the transition to digital television (DTV). It is a daunting challenge to meet the congressionally mandated conversion to DTV by 2003. The stakes

are high for public television: any station that does not make the conversion deadline will be forced to surrender its license—essentially to go off the air. PTFP will

assist television in its digital conversion.

CONCLUSION

A $110 million PTFP appropriation is critical to public broadcasting and its listeners. Public radio needs Subcommittee Members’ support for PTFP to address the

myriad analog and digital needs of both public radio and television. Again, your support will ensure that PTFP is adequately prepared to meet present and future challenges.

PREPARED STATEMENT OF THE UNIVERSITY OF MIAMI

Mr. Chairman, I thank you and the Members of the Subcommittee for this opportunity to submit a statement for the Record on behalf of my colleagues at the University of Miami and its Rosenstiel School of Marine and Atmospheric Science.

Founded in 1925, the University of Miami is the largest private research university in the Southeastern United States and the youngest of 23 private research universities in the nation that operate both law and medical schools. Through its 14

colleges and schools, 1,915 faculty instruct 13,715 students in more than 110 areas

of undergraduate study and 162 disciplines for graduate study.

The Rosenstiel School is recognized as one of the premier academic oceanographic

research facilities in the world and ranked among the top six nationally (by number

of faculty, funded research volume, and graduate program size). Located on a 16-

acre tract on Virginia Key in Miami’s Biscayne Bay, the Rosenstiel School provides

the only subtropical marine research facility in the continental United States, and

is adjacent to and coordinates daily with the national NOAA lab and research facility.
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The Rosenstiel School because of its unique location—the Gulf Stream is immediately offshore; just to the south lies a vast expanse of the only living coral reef

off the shores of the continental United States; and just to the east the Florida-Bahamas Carbonate Platform—is a unique resource for the nation, as well as for Florida and the southeast region.

There are close to 100 recognized scientists, researchers, and educators at the

Rosenstiel School who collaborate closely with other Florida institutions and whose

distinct expertise is vital in addressing critical national, regional, and Florida natural, environmental, and climatic challenges.

First, Mr. Chairman, I salute you and the Committee for your continuing leadership and commitment to programs especially helpful to Florida. Everyone in Florida

applauds your continuing interest and support for the South Florida ecosystem

project, for NOAA’s investment in ocean observation and coastal zone monitoring,

and for NOAA’s improved forecast capability for severe storm and hurricane landfall. Respectively, these projects seem to be leading to a new understanding of the

Everglades-Florida Bay relationship and health, improving the health and safety of

Florida’s coastal communities, and improving NOAA’s general forecasting capability.

Also, Mr. Chairman, your and the Committee’s interest in projects seeking to improve our understanding of coral reef habitats as well as the health of coral reef

communities is having a dramatic impact on South Florida’s tropical reef system

and is especially noteworthy.

The Rosenstiel School of Marine and Atmospheric Science has long been recognized as a major national research institute focusing on the living coral reef as a

unique and critical national and international resource, critical to the vitality and

health of the marine life and coastal marine environment of Florida and the southeast. Florida’s coral reefs are the only living coral reefs off the continental United

States. The environmental, climatic, and man-made challenges to and stress on

these precious resources are extensive. To preserve and protect our reefs requires

the organization and coordination of the broadest range of talent and resources.

The Rosenstiel School has committed to a major investment of its resources and

seeks to enlist a broad range of Florida, regional, and national expertise to coordinate the most advanced and productive research that will ensure the protection of

living coral reefs. The Rosenstiel School is seeking to continue and expand its National Center for Atlantic and Caribbean Coral Reef Research begun in fiscal year

1999, a parallel to the Hawaii-based and focused effort. Together, these centers will

provide a balanced, focused, critical scientific mass brought to bear on these precious, unique, and vanishing natural resources.

Coral reefs are the only ecosystems on Earth constructed entirely by the secretions of a complex assembly of marine animals and plants. They are economically

important resources for humans as sources of food, medicinals, building materials,

and coastal protection. They are especially invaluable, in our increasingly crowded

world, for the spiritual relief they provide the millions of people that journey to visit

them each year. Unfortunately, changes in water quality due to coastal development, environmental changes potentially related to global climate change, and overexploitation of coral reef fisheries resources, are contributing to world-wide coral

reef deterioration at an alarming pace, especially in the Caribbean region. U.S. coral

reefs in Florida are down-stream of the entire Caribbean coral reef system, and are

thus dependent on Caribbean reefs for larval recruits and maintenance of fisheries

stocks. Florida reefs could also be affected by pollutants released into marine waters

by other nations in the region, and from our own rivers via discharges into the Gulf

of Mexico.

The National Center seeks to coordinate U.S. coral reef policy and research, and

assemble major national and international initiatives pertaining to coral reefs. The

Center fosters organization and collaboration within the U.S. scientific community,

leads the development of a new level of understanding of the processes and environmental conditions necessary for the establishment, survival, and sustainable use of

coral reef ecosystems for the public. The initial focus is on problems faced by coral

reefs in Florida and U.S. possessions in the Caribbean region (Puerto Rico and the

U.S. Virgin Islands), and also to coordinate these efforts with those of coral reef researchers within the Caribbean region, in recognition of the importance of larger

scale relationships between coral reef systems within the Inter-America Seas.

This Center invites nation-wide participation of scientists with expertise in coral

reef research, and involves scientists from related disciplines. In addition, scientists

from Federal and State agencies with coral reef research interests, such as the

NOAA Florida Keys National Marine Sanctuary, EPA, and USGS are anticipated

to participate. The specific functions of the National Center for Atlantic and Caribbean Coral Reef Research are:
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—To identify major gaps in our knowledge of coral reef function that impair our

ability to conserve and manage coral reefs, and to provide leadership in organizing the scientific community to develop research initiatives to close these

gaps;

—To work with agency and legislative representatives, as well as private sources,

to develop the funding basis needed to execute the research initiatives;

—To interact with managers at the local to national levels, in order to facilitate

the transfer of information from the scientific to the managerial communities;

—To provide accurate, but non-technical, syntheses of information to the public

so that they can be better informed about important management issues about

coral reefs.

We seek to continue the effort to establish a targeted and broadly constructed

southeastern regional focus that can parallel and complement the well-funded and

structured approach the Congress has established in the state of Hawaii. The longterm implementation strategy would involve all of the core Florida institutions and

agencies already working, along with the Rosenstiel School, on one or more components of the overall reef challenge.

For fiscal year 2001, we seek $3.5 million through NOAA for the National Center

for Atlantic and Caribbean Coral Reef Research housed at the University of Miami

Rosenstiel School of Marine and Atmospheric Science. Joined by colleagues at Nova

University in Fort Lauderdale on the Atlantic coast, and at the University of South

Florida in Tampa on the Gulf coast, this public-private enterprise will bring together in an unprecedented way multi-disciplinary research from across Florida to

study this important aspect of our state and region. The effort represents an investment for the future health and well being of the economically and esthetically beautiful tropical reef system.

Mr. Chairman, we understand fully what a difficult year this will be for you and

the Committee. However, we hope that you can and will accede to our request to

support the National Center for Atlantic and Caribbean Coral Reef Research. The

results of the Center’s work will make important contributions to the national effort

to save our endangered coral reef communities.

Thank you.

PREPARED STATEMENT OF THE NATURE CONSERVANCY

Mr. Chairman, I appreciate the opportunity to submit testimony on the fiscal year

2001 budget for the National Oceanic and Atmospheric Administration (NOAA).

The Nature Conservancy is an international, non-profit organization dedicated to

conserving biological diversity. Our mission is to preserve the plants, animals, and

natural communities that represent the diversity of life on Earth by protecting the

lands and waters they need to survive. We have more than a million individual

members, more than 1,500 corporate members, and programs in every state and in

20 nations. We have protected more than 11 million acres within the United States

and Canada, and have helped local partner organizations preserve millions more

overseas. Additionally, we own the largest private system of nature preserves in the

world.

Since 1950, The Nature Conservancy has maintained a strong focus on land-based

habitats. However, in the past decade, we have recognized the gap created in our

mission by not focusing on critically important and productive marine habitats, particularly shallow-water habitats such as estuaries, coral reefs, mangroves, and

seagrass beds that are heavily affected by human activities. We are aware that

coastal areas and oceans contain biodiversity rivaling tropical rain forests. Yet as

a nation we have focused little attention on their conservation.

As a result, The Nature Conservancy is escalating its focus on near-shore marine

sites using the sound science, strong public and private partnerships, ecosystem approach, and site-based conservation that has proven effective throughout our fiftyyear history of working on the land. We are cooperating with public and private

partners to develop a ‘‘conservation blueprint’’ that will identify the terrestrial and

marine sites, at several scales, that if conserved will protect the nation’s full array

of plants, animals, and natural communities for the long-term.

Several NOAA programs have proven especially successful at combining effective

management, good science, and community involvement to achieve tangible and

lasting conservation results. These programs will also facilitate the process of conserving many sites identified by the Conservancy’s conservation blueprint. These

programs include: National Estuarine Research Reserve System, National Marine

Sanctuaries, Habitat Restoration, Coral Reef Conservation, and Salmon Recovery.
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National Estuarine Research Reserve System

National Estuarine Research Reserves exist in Alabama, Alaska, California, Delaware, Florida, Georgia, Maine, Massachusetts, Maryland, Mississippi, New Hampshire, New York, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South

Carolina, Texas, Virginia, Washington, and Puerto Rico. These twenty-five ‘‘living

laboratories’’ have achieved success on a modest budget. However, National Estuarine Research Reserve System (NERRS) funding levels have not kept up with needs

created by additional sites, acres, and responsibilities. Appropriate funding for the NERRS ($12 million for operation; $8 million for procurement, acquisition, and construction) will ensure that the system continues to receive national-level coordination and vision. It will also permit reserves to implement baseline management, research, education, and stewardship activities within

surrounding communities; acquire land and conservation easements to buffer impacts of development; and expand the number of sites in the future. Finally, the

funding will enable each reserve to update ecological profiles, establish graduate fellowships, and provide technical training to coastal decision-makers.

As manager of more than 1,300 preserves across the nation, we appreciate and

support the request to increase NERRS funding to strengthen management, improve research, and increase community involvement. Estuaries serve as ‘‘nature’s water treatment system,’’ providing flood control, storm damage protection, recreation, and habitat for species to spawn, nurse and live. The Conservancy is actively

working in several reserves from Great Bay in New Hampshire to Apalachicola Bay

in Florida and Kachemak Bay in Alaska. We know first hand that the NERRS has

successfully implemented science programs to inform communities about how coastal ecosystems function, how humans affect them, and methods for improving their

condition.

National Marine Sanctuaries

The Nature Conservancy supports NOAA’s request for $35 million to fund the National Marine Sanctuary Program. The $10 million increase in funding would build

upon baseline operational improvements made at sanctuaries over the past several

years—and would guarantee continuity and enhancement of the program’s successful educational, community outreach, research and monitoring, cultural resource

management, and resource damage response efforts. Additional funding would also

expand enforcement and technical capacity. Management plans could be updated

and science programs would be improved at existing sanctuaries, and ‘‘new frontiers’’ in the deep ocean would be explored. Finally, part of the increase would fund

a nationwide study to better understand the socioeconomic importance of marine

sanctuaries.

National Marine Sanctuaries embody some of the world’s most diverse and extraordinary ecosystems. The twelve sanctuaries established since 1972 protect

18,000 square miles of ocean waters. They aid in the recovery of endangered marine

animals; increase knowledge of the ocean through research; and enlarge a stewardship ethic among citizens. Where appropriate, uses such as recreation, commercial

fishing, and shipping are also often encouraged.

The Conservancy’s most extensive experience with this program has been with the

Florida Keys National Marine Sanctuary, established to stem threats to the ecological health of the coral reef ecosystem. In cooperation with the state of Florida and

an Advisory Council (representatives from commercial and recreational fishing; the

dive and boating industries; public interest organizations; scientific and educational

organizations; and the public) the Sanctuary developed and is implementing a comprehensive management plan. The plan focuses on solutions for problems related to

stormwater runoff, inadequate sewage treatment, marinas, live-aboards, landfills,

hazardous spills, and pesticides. In just two years, it is showing promising results.

Habitat Restoration

Coastal ecosystems are powerful drivers of the United States economy, with more

than 180 million people visiting the coasts annually. Tourism, recreation, fishing,

and other industries require healthy coastal habitats and clean waters. Yet harmful

algal blooms, polluted beaches and waters, contaminated shellfish beds, and diseased coral reefs are signs that human activities are degrading valuable coastal resources.

The Nature Conservancy strongly supports NOAA’s coastal habitat restoration

and conservation efforts. $4 million for Fishery Habitat Restoration would ensure

continued work with communities, in partnership with public and private organizations, to restore vital coastal habitats including wetlands, salt marshes, seagrass

beds, mangroves, anadromous fish spawning areas, and coastal rivers. Much of the

$2 million increase in funding would strengthen NOAA’s Community-Based Restora-
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tion Program that together with national partners, has reached out and funded local

habitat restoration projects that are developed, implemented, monitored, and maintained by communities. This program not only has leveraged funds through national-level partnerships, but has also leveraged a conservation ethic across the nation.

Additionally, $11.8 million for Habitat Conservation would ensure the NOAA Restoration Center’s continued effectiveness at restoring estuaries, anadromous fish

habitat, and other natural resources injured by human activity and hazardous materials. The Center has also advanced the science and technology of coastal habitat

restoration and transferred it to the public and private sectors. The additional funding of $1.9 million would enable the Center to implement more restoration; increase

and improve technical assistance to stakeholders; develop duplicable ‘‘best practices’’; improve monitoring; and meet a growing demand for habitat restoration nationwide.

Coral Reef Conservation

Coral reef ecosystem health has declined severely all over the world in recent decades. The combined effects of global climate changes and human activities have put

coral reefs at great risk. Now is a critical time for taking action to protect the

world’s coral reefs before the tragedy becomes irreversible. As a result, the Conservancy’s programs in the Florida Keys, the United States Virgin Islands, and other

Caribbean Basin and Pacific Islands have been working actively with governmental

and non-governmental partners to protect these fragile systems.

The Nature Conservancy supports the critical and time sensitive activities that a $10 million increase in funding for coral reefs would enable. These activities are

also supported by the United States Coral Reef Task Force (22 federal agencies,

Governors of 7 states, territories, or commonwealths with coral reef responsibility,

and many non-governmental organizations) and include comprehensive mapping

and monitoring of coral reefs; research into ecological processes upon which reefs depend; expansion and strengthening of federal, state, and territorial coral reef Marine

Protected areas and no-take ecological reserves; regulation of coral reef species

trade; enhanced international activities; integration of human activities; and public

education.

The Nature Conservancy strongly supports implementation of the National Action

Plan for Coral Reef Conservation. If funded adequately, this comprehensive scientifically-based program will protect and restore coral reefs in the United States and

its territories. It will also serve as a model in coral reef protection as well as in

intergovernmental coordination, and will set an example for promoting similar initiatives in the rest of the world.

Salmon Recovery

Because salmon travel from the sea to a stream’s headwaters—passing cities, developments, farms, and forests before they spawn and die—focusing on what they

need to survive forces us to take on a landscape approach that benefits many other

species dependent upon cool, clear water. This approach also helps forests and freeflowing rivers that prevent flooding, clean the air and water, stop erosion, and provide places to hike, fish, and experience nature.

Habitat destruction, over-appropriation of water rights, pollution, stream

blockages from hydropower and other developments, and over-harvesting have all

played a role in the precipitous decline of many salmon species from historic levels.

Adequate funding to conserve and recover salmon ($55.4 million for Endangered

Species Act Recovery Planning; $100 million for the Pacific Coastal Salmon Recovery Program; $60 million for the Pacific Salmon Agreement) would further critical

scientific research and monitoring, spur new partnerships and cooperative efforts,

enable more recovery plans, and enforce protections under the Endangered Species

Act. It would also create significant opportunities for the states, local and tribal authorities, and private landowners to accelerate protection efforts.

Finally, history has demonstrated that vast amounts of money can be spent on

restoration and recovery of habitat that could have been protected at significantly

less cost to the taxpayer, and with better environmental results, before the systems

were altered and degraded. It is time to make tough choices about where fish can

be successfully recovered, but it is even more important to focus on functioning systems with healthy habitats and salmon populations. These decisions should be

based on the existing watershed analyses and plans, and connected to the priorities

emerging from NOAA’s essential fish habitat work.

Conclusion

Thank you for the opportunity to submit these remarks. Conservation of coastal

waters is challenging. Many marine habitats cannot be purchased and set aside for
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conservation. Instead, we must conserve, restore, and acquire critical coastal areas;

research stresses to systems; improve water quality; maintain freshwater inflows;

and sustainably manage marine resources and habitat. The Nature Conservancy

looks forward to working with NOAA, other federal agencies, state and local governments, non-governmental organizations, and the private sector to ensure the longterm protection and sustainable use of our productive and diverse coastal waters.

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 2001

funding request of $250,000 from the National Oceanic and Atmospheric Administration (NOAA) for CCOS as part of a Federal match for the $8.6 million already

contributed by California State and local agencies and the private sector. NOAA is

currently under contract for approximately $700,000 to use state-of-science instrumentation to measure surface and aloft winds and temperatures. This request will

partially replace funding already spent for NOAA’s participation in CCOS.

Ozone and particulate matter standards in most of central California are frequently exceeded. In 2003, the U.S. Environmental Protection Agency (U.S. EPA)

will require that California submit SIPs to for the recently promulgated, national,

8-hour ozone standard. It is expected that such SIPs will be required for the San

Francisco Bay Area, the Sacramento Valley, the San Joaquin Valley, and the Mountain Counties Air Basins. Photochemical air quality modeling will be necessary to

prepare SIPs that are acceptable to the U.S. EPA.

Central California Ozone Study (CCOS) is designed to enable central California

to meet Clean Air Act requirements for ozone State Implementation Plans (SIPs)

as well as advance fundamental science for use nationwide. The CCOS field measurement program will be conducted in 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.

CCOS includes an ozone field study, a deposition 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 six main components:

—Developing the design of the field study (task already underway)

—Conducting an intensive field monitoring study, scheduled for June 1 to September 30, 2000

—Developing an emission inventory to support modeling

—Developing and evaluating a photochemical model for the region

—Designing and conducting a deposition field study

—Evaluating emission control strategies for the next ozone attainment plans.

CCOS is directed by Policy and Technical Committees consisting of representatives from Federal, State and local governments, as well as private industry. These

committees, which managed the San Joaquin Valley Ozone Study and are currently

managing the California Regional Particulate 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 $8.6

million for the field study. In addition, CCOS sponsors will provide $4 million of inkind support. The Policy Committee is continuing to seek additional funding ($9.0

million) for a future deposition study, data analysis, and modeling. 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).

There is a national need to address national data gaps and California should not

bear the entire cost of the addressing these gaps. National data gaps include issues

relating to the integration of particulate matter and ozone control strategies. The

CCOS field study will take place concurrently with the California Regional Particulate Matter Study—previously jointly funded through Federal, State, local and private sector funds. Thus, CCOS is timed to enable leveraging of the efforts for the

particulate matter study. Some equipment and personnel can serve dual functions

so that CCOS is very cost-effective. From a technical standpoint, carrying out both

studies concurrently is a unique opportunity to address the integration of particu-
413

late matter and ozone control efforts. CCOS will also be cost-effective since it builds

on other successful efforts including the 1990 San Joaquin Valley Ozone Study. To

effectively address these issues requires federal assistance, and CCOS provides a

mechanism by which California pays half the cost of work that the federal government should pursue.

For fiscal year 2001, our Coalition is seeking funding of $250,000 from the National Oceanic and Atmospheric Administration (NOAA). Extensive meteorological

data collected as part of the field study can be used by NOAA to improve its meteorological forecasting abilities. CCOS will provide a new database to evaluate the

U.S. western boundary conditions of weather forecasting models. Meteorological

data will be collected in both an ozone field study and an atmospheric deposition

study. In addition, CCOS includes atmospheric airflow research. Data will be collected on sea breeze circulation, nocturnal jets and eddies, airflow bifurcation, convergence and divergence zones, up-slope and down-slope flow, and up-valley and

down-valley air flows. This research will provide fundamental data needed to understand air flows over complex terrain and has national applicability.

Thank you very much for your consideration of our request.

PREPARED STATEMENT OF THE NORTHWEST INDIAN FISHERIES COMMISSION

Mr. Chairman, and Honorable Senators of the Committee, I am Billy Frank, Jr.,

Chairman of the Northwest Indian Fisheries Commission (NWIFC) and on behalf

of our member tribes I would like to thank you for the opportunity to offer written

testimony concerning the Department of Commerce fiscal year 2001 appropriations

that pertain to Pacific Salmon Recovery funding needs.

SUMMARY OF FISCAL YEAR 2001 APPROPRIATIONS REQUEST

In general, the Northwest Indian Fisheries Commission supports the Administration’s appropriation request presently before the Subcommittee. We also support additional clarification language by the Committee pertaining to several issues. Specifically, we support the following:

—$100 Million for the Pacific Coastal Salmon Recovery Program in the Lands

Legacy Initiative, with a set-aside of 10 percent ($10 million) to affected tribes

for their management responsibilities. A specific allocation of the set aside for

the Northwest Indian Fisheries Commission of $8 million is requested.

— $60 Million for the Pacific Salmon Agreement consistent with the recently

signed treaty annexes.

—$3 Million for a Displaced Tribal Fishers Program.

—Support Additional ESA Program Funding to National Marine Fisheries Service

(NMFS) and Earmark $530,000 for National Marine Fisheries Service and Tribal/NMFS ESA Task force.

INTRODUCTION

Twenty-six years ago, the U.S. v. Washington case was decided by the federal

court system. This decision, respecting the treaty rights of our member tribes, propelled major changes in fisheries management in the Pacific Northwest. These

changes have not only fundamentally altered the legal, political, social and economic

institutions of the State of Washington, but have also fostered a nationwide quest

for tribal self-determination and self-governance led in part by the Northwest tribal

leadership. These parameters affect both the way tribes perform fisheries management, as well as how we approach the federal system during the budget appropriations and legislative processes.

TRIBAL PROGRAMS ARE ORGANIZED BUT UNDERFUNDED

We have made great strides in institutionalizing tribal management consistent

with tribal values, treaty rights and federal court decisions. We have developed

great professional capabilities and policy respect as we proceed through the various

processes. We are efficient and effective, but we have significant unmet needs. While

we have efficiently organized our tasks and have assigned responsibilities between

the tribal community to extend our collective efforts, the management obligations

are many. New and highly difficult complexities abound, many have been precipitated by the demands of the Endangered Species Act.
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RECENT ENDANGERED SPECIES ACT SALMON LISTINGS HAVE SIGNIFICANTLY AFFECTED

TRIBES AND NORTHWEST MARINE FISHERIES SERVICE

In late February, 1999, a number of species of Pacific Salmon were ‘‘listed’’ by the

National Marine Fisheries Service as ‘‘threatened’’ under the terms of the Endangered Species Act (ESA). This ESA listing process has triggered a cascading chain

of events, which have or will result in significant changes to harvest, hatchery, and

habitat practices for the region and its inhabitants.

Tribes will be affected by this federal process. As fishers, the listing raises serious

questions about the status of the stocks and poses a threat to the opportunity for

these individuals to continue to harvest this salmon, a treaty secured resource. As

governments, the ESA process now places inordinate demands upon the tribes as

co-managers of the resource. Biological Reviews, Listing Decisions, Conferencing,

Assessments, Opinions, Consultation, and Recovery Planning are just a few of the

series of loops tribes will now be forced to participate in just to ensure their treaty

protected fisheries. The tribes harvest opportunities and management certainty

have been placed into severe jeopardy by these actions. Continued and expanded

tribal funding to fulfill these federal mandates is essential.

Additional funding is also needed for the National Marine Fisheries Service so

that they can actively participate in the many ESA functions that exist in the Pacific Northwest. NMFS is the key Federal agency charged with implementing the

Act and requires additional funding to properly discharge their trust responsibilities

to the tribes. We would like the Subcommittee to earmark $530,000 for a Tribal/

NMFS ESA Task Force that brings tribal and NMFS technical and policy representatives together to implement the Act and trust responsibilities.

It is partly for these reasons that the tribes have worked very hard over the years

to bring about positive and effective change in resource management. Unfortunately,

events have overtaken tribal efforts, and new obligations are upon us.

$100 MILLION FOR THE PACIFIC COASTAL SALMON RECOVERY WITHIN THE LANDS

LEGACY PROGRAM WITH A 10 PERCENT ($10 MILLION) TRIBAL SET ASIDE

Tribes were greatly appreciative of the Committee’s efforts to include Pacific

Coastal Salmon Recovery funding in last year’s appropriation. We have long advocated for such a concerted partnership approach between federal, state, local and

tribal governments to save the Pacific Salmon.

This year we are happy to support the Administration’s funding request of $100

million to continue this effort through the Lands Legacy Initiative.

For many years, the tribes have sounded alarms about the declining status of the

salmon resource caused in part by past state and federal policies. Tribes have actively participated in the implementation of the Northwest Forest Plan. Tribes have

also worked diligently with the federal and state governments in implementing the

Pacific Salmon Treaty and other conservation efforts. In local processes, tribes have

begun to link their work with county and city governments to develop watershed

recovery strategies. Connections between tribes and private interests, including the

timber industry, environmental community, and volunteer organizations are in

place, and expanding regularly. But for all of these efforts, tribes are in need of additional financial resources. Tribes need a consistent source of funding that allows

them to actively work salmon restoration efforts. That is why a continued set aside

for the tribes is essential. We support a 10 percent, or $10 million, set aside for the

Pacific Coastal tribes for salmon restoration work. We also seek a specific allocation

of $8 million from this amount for the Northwest Indian Fisheries Commission for

the work described below.

As noted earlier, treaty tribes in western Washington have court-affirmed fisheries co-management authority and responsibility for salmon. This co-management

relationship is well defined and institutionalized and has been recognized in harvest

and hatchery management activities for many years. These same courts have recognized that without healthy habitat for salmon, the treaty right would not be fulfilled. This collection of rights places the tribes in a principal management role with

the State of Washington to ensure that the salmon resource is managed wisely for

the benefit of all.

This obligation for sound resource management weighs heavily on the tribes as

more than three-quarters of the state is affected by several Endangered Species Act

(ESA) listings, with many of the remaining areas experiencing declining levels of

many salmon species. Salmon recovery will affect every resident of the state.

For tribes to take on these additional efforts and responsibilities, it is essential

that we have adequate funding to fill new technical and policy positions. What follows is a general summary of tribal needs. Because the salmon recovery efforts vary

greatly between watersheds, tribal needs also vary from one another. However, ad-
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ditional tribal funding needs for capacity enhancement and technical analysis can

generally fit into the following categories. These include: —Infrastructure and Capacity for Policy and Planning —Technical Assistance, Regional Coordination, and Integration.

TRIBAL INVOLVEMENT IN SALMON RECOVERY IS ESSENTIAL, BUT REQUIRES INCREASED

MANAGEMENT CAPACITY

Each tribe has an existing fisheries management program, and will utilize its program as a base for salmon recovery efforts. Fiscal year 2000 budget funding has increased each tribe’s ability to engage in salmon restoration activities and programs.

This increased capacity has enabled the tribes to dedicate necessary staff and policy

attention to work through various reviews, listings, consultations, rule developments, and conservation planning processes that have already begun as the National Marine Fisheries Service moves forward with legal requirements under the

Endangered Species Act. Moreover, this infrastructure has also provided the tribes

with additional capabilities to work through the various salmon restoration projects

and activities that are under way within the region, which are detailed more fully

in the ‘‘Regional Integration and Technical Assistance’’ section that follows.

TRIBES WILL BRING TOGETHER REGIONAL INTERESTS THROUGH TECHNICAL ASSISTANCE, COORDINATION, AND INTEGRATION THAT SUPPORTS SALMON RESTORATION

A coordinated tribal effort is necessary on a variety of ‘‘statewide’’ and ‘‘regional’’ issues facing the tribes and the State of Washington. Using the expanded capacity

described above, tribes and their policy and technical staff will dedicate time and

effort toward developing salmon conservation and recovery planning processes that

are essential to salmon restoration.

Tribes, along with the State of Washington, will develop comprehensive species

management plans for coastal river systems, Puget Sound chinook, Hood Canal

summer chum, and Lake Ozette sockeye salmon. They will also work on conservation concerns for coho salmon, which in some areas are listed by NMFS as a ‘‘can- didate’’ species for potential listing in the future.

Tribes will develop new hatchery genetic guidelines, stock productivity models,

fishery guidelines and standards for local salmon recovery. Tribes will update the

Salmon and Steelhead Stock Inventory (SASSI) and will complete the Salmon and

Steelhead Habitat Inventory and Assessment Project (SSHIAP). These two data systems integrate stock status and habitat information, essential knowledge for effective salmon restoration and protection activities. SSHIAP is also an essential component for long-term habitat monitoring programs, including that of the recently enhanced forest practices program.

To make these activities complete, however, requires coordination and integration

of the tasks at a number of levels. In some cases, special studies and assessments

must be done. In other cases, regional and/or case-area-wide coordination must

occur to ensure project completion.

This broad array of activities will allow the maximum flexibility for locally driven

processes to determine which activities are most important for each watershed. This

is essential as the current status of habitat inventories, wild stock assessments and

hatchery impacts in each watershed are highly variable.

The following is a partial list of salmon restoration projects and activities that

may be conducted: —Watershed assessments, including habitat conditions, in-stream flow studies,

water quality and quantity analysis pertaining to salmon productivity; —Develop/design projects to address limiting factors; —Compliance monitoring for regulatory components of salmon recovery;

—Habitat monitoring;

—Stock monitoring; and,

—Adaptive management monitoring, research, assessment and application.

It must be recognized that tribes also anticipate accessing various funds that are

available to state governments for active watershed restoration and protection

projects. These funds would come from monies provided by the subcommittee to

state governments. In many cases, tribes will be in the best position to protect and

preserve habitat through the purchase of riparian habitat. In other cases, tribes will

have the best expertise and infrastructure in place to effectively complete restoration projects.

PACIFIC SALMON AGREEMENT REQUIRES FURTHER FUNDING

Many new demands have been placed on the United States and Canada as a result of the new 1999 Pacific Salmon Agreement. The Administration has proposed
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a funding package of $60 million for fiscal year 2001 for two endowment funds and

to support a License Buyback Program. The two endowment funds, partially funded

in fiscal year 2000, will be administered by the Pacific Salmon Commission for habitat, stock enhancement, science and salmon management initiatives in both countries. The License Buyback Program will be used by the State of Washington to reduce fishing licenses and gear targeting sockeye salmon.

These funds are essential in order to implement the Agreement. Clearly, there

have been very significant harvest reductions taken by the tribes as a result of this

new Agreement. Unfortunately, harvest reductions alone will not bring back the

salmon. These new funds will provide resources to the two countries to target a multitude of recovery efforts that are complimentary to the harvest reductions.

TRIBAL FISHERS BEAR A HUGE BURDEN, AND FUNDS SHOULD BE FOUND TO SUPPORT

THEM WHILE SALMON RECOVERY OCCURS

Tribes are very concerned about our displaced fishers. Unemployment rates on

some reservations, which depend heavily on salmon fisheries now seriously curtailed

due to low stock abundance, are as high as 80 percent. We would like the Committee to consider an extension of the successful federal ‘‘Jobs In the Woods’’ Initiative of the Northwest Forest Plan which utilized unemployed loggers. This program

could be expanded for specific inclusion of tribal fishers. New funds for ‘‘fishers support’’ should also be found to ensure that tribal fishers could continue to make boat

payments and leases during these low abundance periods. These funds could be earmarked from within the existing Department of Commerce budget, so long as they

become available to the Tribal Fishers. It is expected that this program would cost

about $3.0 million per year for the next decade.

CONCLUSION

We strongly urge the Committee to provide $100 million in funding for Pacific

Salmon Recovery through the Lands Legacy Initiative. We ask the Committee to

support the use of $10 million of these funds for use by the Pacific Coastal Tribes.

Language directing $8 million of these funds to the Northwest Indian Fisheries

Commission will enable us to actively engage in all phases of salmon recovery efforts in western Washington. These monies would be carefully managed to ensure

results and accountability.

The new Pacific Salmon Agreement requires $60 million during fiscal year 2001

to build up the endowment funds and to buyback gear and vessel licenses. A new

initiative to support displaced tribal fishers and ameliorate their financial burden

will cost $3 million.

We thank you for your consideration of our request. We are available to answer

any questions.

PREPARED STATEMENT OF THE UNIVERSITY CORPORATION FOR ATMOSPHERIC

RESEARCH

On behalf of the University Corporation for Atmospheric Research (UCAR) and

the university community involved in weather and climate research and related

education, training and support activities, I submit this written testimony for the

record of the U.S. Senate Committee on Appropriations, Subcommittee on Commerce, Justice, State, The Judiciary and Related Agencies.

This year UCAR, a university membership consortium composed of 63 North

American institutions that grant the Ph.D. in atmospheric, oceanic, and related

sciences, celebrates its fortieth anniversary of scientific discovery and university

partnerships. The UCAR mission is to support, enhance, and extend the capabilities

of the university community, nationally and internationally; to understand the behavior of the atmosphere and related systems and the global environment; and to

foster the transfer of knowledge and technology for the betterment of life on earth.

UCAR is a non-profit, Colorado-based corporation that manages and operates the

National Center for Atmospheric Research (NCAR) and the UCAR Office of Programs (UOP). It is supported by the National Science Foundation (NSF) and other

federal agencies including the National Oceanic and Atmospheric Administration

(NOAA), the National Aeronautics and Space Administration (NASA), the Department of Energy (DOE), the Environmental Protection Agency (EPA), the Department of Defense (DOD), and the Federal Aviation Administration (FAA). 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 38 international universities and laboratories.
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On behalf of this country’s atmospheric sciences community, we urge the Com- mittee to support the overall proposed budget of $2.90 billion for the National Oceanic and Atmospheric Administration (NOAA) for fiscal year 2001. This is an increase of $446 million over fiscal year 2000. The activities of NOAA provide a comprehensive approach to understanding the atmospheric and oceanic systems of the

earth and to implementation of programs that save American lives, money and

property. The weather and climate data collected by NOAA satellites, ships, ocean

buoys, aircraft, and other instrumentation provide the foundation on which atmospheric sciences research is based. Support of this agency should be maintained at

the highest possible levels during this era of rapid scientific discovery and intense,

global economic competition. Within NOAA, we would like to comment on the following specific programs:

National Weather Service (NWS)

We urge the Committee to support the overall proposed amount of $710.2 million for NWS for fiscal year 2001. This is an increase of $53.2 million over fiscal year

2000. The work of the NWS protects life and property, enhances the national economy, and provides a national information database and infrastructure used extensively by the university community for research purposes. The proposed fiscal year

2001 budget enables the NWS to continue to make available critical weather and

climate-related data, to improve weather prediction accuracy and warning lead

times and to work to decrease weather related fatalities.

Advanced Hydrologic Prediction System (AHPS)

Within the NWS Operations and Research budget, we urge the Committee to support the proposed fiscal year 2001 amount of $1.0 million for continued national implementation of AHPS. This is a slight increase over fiscal year 2000. AHPS is a

real time modeling and data analysis system that will significantly improve flood

forecasting and water management in flood-prone areas such as the Mississippi and

Ohio River Basins. This system will save lives and property by providing river stage

forecasts one-to-two months in advance, a great improvement on the several days

advance notice now available.

Advanced Weather Interactive Processing System (AWIPS)

Under NWS Systems Acquisition in the Operations, Research and Facilities (ORF)

account, we urge the Committee to support the proposed fiscal year 2001 amount

of $38.6 million for AWIPS Operations and Maintenance. This is a $6.6 million increase over fiscal year 2000 that will provide operations and maintenance for the

fully deployed network of 152 AWIPS systems. This interactive computer system,

the cornerstone of the recently completed NWS modernization and restructuring, integrates for the first time all meteorological and hydrological data, and all satellite

and radar data. AWIPS is a critical source of data for the research community and

enables the NWS to issue far more effective weather warnings and forecasts in a

very efficient manner. Under NWS Systems Acquisition in the Procurement, Acquisition and Construction (PAC) account, we urge the Committee to support the proposed fiscal year 2001 amount of $17.3 million for AWIPS. This is a $1.36 million

increase over fiscal year 2000 to continue development of AWIPS software. When

integrated with NEXRAD Product Improvement technology, this new software will

allow NWS forecasters to extend tornado warning lead time from an average of 11

minutes to 16 minutes and improve the accuracy of severe storm forecasts by over

20 percent.

Radiosonde Replacement Network

We urge the Committee to support the fiscal year 2001 request of $7 million for

replacement and modernization of the upper air radiosonde network. This represents a very slight increase over fiscal year 2000 funding to support a network

that provides critical upper air observations that are the principal data source for

all weather forecasts and for much research. Funding will allow the NWS to replace

antiquated computers, continue software development, and procure critical surface

instruments.

Co-Operative Observer Network

We urge the Committee to support the requested increase of $2.3 million in fiscal

year 2001 to sustain and modernize the volunteer operated Cooperative Observer

Network. The network’s 11,000 weather observation sites are used to maintain the

country’s climate record and to provide data to NWS local field offices and to university laboratories. In a recent report, the National Research Council recommended

taking immediate steps to modernize this ailing, critical network. We look forward

to seeing progress on this task during the next five years.
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National Centers for Environmental Prediction (NCEP)

NCEP is comprised of nine centers within the NWS, all working together toward

the common goal of using data for weather predictions and seasonal forecasts in

order to save lives, protect property, and create economic opportunity. Weather

Service field offices, other government agencies, research universities, and private

meteorological services rely on NCEP’s products. Many of the forecasts that reach

the public via media outlets originate at NCEP. In recent years, the centers have

been supported inadequately. Funding comes primarily from the NWS ORF account

under Central Forecast Guidance, with a sizable percentage from Atmospheric and

Hydrological Research. Both of these lines have recommended increases for fiscal

year 2001. We urge the Committee to support NCEP at the highest possible levels

through support for the Central Forecast Guidance request of $38 million and the

Atmospheric and Hydrological Research request of $3.07 million.

Office of Oceanic and Atmospheric Research (OAR)

We urge the Committee to support the OAR PAC account request of $11 million

which is an increase of $6.0 million over fiscal year 2000. This increase will provide

additional infrastructure to advance climate and weather forecast modeling, to improve access to space-based and ground-based data holdings, and to create a system

to efficiently manage high volumes of global change data critical to the scientific

community.

However, we believe that the OAR activities supported by the ORF account are

inadequately funded and urge the Committee to increase funding to $317.8 million

from the current request of $307.8 million for the ORF account. OAR supports a

world-class network of scientists and environmental research laboratories as well as

partnerships with academia and the private sector in order to provide the sound

science upon which decision makers can frame effective regulations to solve environmental problems. It conducts the research and technology development necessary to

improve NOAA’s weather and climate services, solar-terrestrial forecasts, and marine services. During the past 10 years, the purchasing power of the OAR labs has

decreased by approximately 50 percent as costs associated with inflation and technological advances have far outpaced funds allocated. The fiscal year 2001 request

level continues this trend with only a 2.1 percent increase over the fiscal year 2000

Revised Enacted Amount of $301.4 million. Erosion of the research base has occurred at a time when society’s demand and economic need for the OAR labs’ information services have increased dramatically in such areas as predictions of El Nin ̃ o/

La Nin ̃ a events, tropical storm intensity, flooding and drought. To realize the full

OAR potential benefit to society, additional funding of $10 million should be allocated in fiscal year 2001 to support OAR’s critical mission of conducting the scientific research, environmental studies, and technology development needed to

broaden our understanding of Earth’s environmental systems. Some of OAR’s most

important research efforts conducted with universities include the following:

U.S. Weather Research Program (USWRP)

The USWRP, an interagency program authorized by Congress in 1992, was first

mentioned in NOAA’s budget in fiscal year 2000. Although the request of $2 million

for fiscal year 2001 represents an increase of 100 percent over fiscal year 2000, it

falls far short of the $12.5 million recommended in the Congressionally mandated

implementation plan. The USWRP research community is poised to make significant

gains in prediction capabilities regarding heavy precipitation and hurricane landfall

location and intensity, the disaster relief savings of which would be many times the

initial research cost investment, not to mention the value of lives saved. Last fall’s

hurricane season, with hundreds of miles of coastline needlessly evacuated and lives

lost to poorly predicted inland flooding, demonstrates clearly the need for additional

research as does the very costly missed forecast for this January’s east coast snow

storm. We urge the Committee to provide the USWRP with at least $4.5 million for

fiscal year 2001. This is $2.5 million above the requested amount of $2 million for

fiscal year 2001.

Since the USWRP is an interagency program the goals of which advance the

NOAA mission, we would suggest that NOAA take the lead in collaborating with

the National Science Foundation (NSF), the National Aeronautics and Space Administration (NASA), and the Department of Defense (DOD) to ensure appropriate support from these agencies.

Climate Observations and Services Initiative

This new line item will provide $28.0 million to meet the growing demand for

timely data and information about climate variability, climate change and trends in

severe weather events. Based on recommendations from recent National Research
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Council reports, this initiative will allow repair of deteriorating data and observational systems as well as support new observations and infrastructure. We urge the

Committee to support the fiscal year 2001 recommended funding of $28.0 million,

$24.0 million of which is within the OAR ORF account, for the new Climate Observations and Services Initiative.

Climate and Global Change Program

We urge the Committee to support the $67.1 million proposed budget for Climate

and Global Change, a small increase over the fiscal year 2000 budget. This program

is an integral part of the interagency U.S. Global Change Research Program

(USGCRP) and addresses an important aspect of global change—understanding the global climate system. The increase of $493,000 will be used to improve the regional

specificity and detail of climate forecasts, essential progress to advancing our understanding of the Earth’s climate.

National Environmental Satellite, Data and Information Service (NESDIS)

For several years we have been concerned about the proposed level of funding in

the NESDIS ORF budget. This ORF account is divided into support for the Satellite

Observing Systems and the Environmental Data Management Systems. The Satellite Observing Systems provide services in designing, developing, and operating civilian satellite systems for the purpose of observing ocean, and atmospheric conditions and the sun. These are observational tools critical to improving our knowledge

of the complex environmental systems in which we live. The rich data collected by

these systems is then acquired, processed, analyzed, archived and disseminated

through the Environmental Data Management Systems to commerce, industry, agriculture, science and engineering, the general public, and government at all levels.

While the Satellite Systems function collects data, the Data Management Systems

function makes those data useful and available. Both sides of the equation are of

equal importance, but we feel that funding for the data management side is continuing to erode.

Funding for the Environmental Data Management Systems line is proposed to de- crease from $52.3 million in fiscal year 2000 to the requested $44.7 million. Within

the NESDIS ORF account, we urge the Committee to support Satellite Observing

Systems at the requested $63.4 million (up from $52.3 million in fiscal year 2000)

and we urge the Committee to increase Environmental Data Management Systems

funding from the requested $44.7 million (down $7.5 million from fiscal year 2000)

to an amount that accounts for inflation and shores up insufficient base funding in

order to allow adequate care of a very important national database.

Minority Serving Institutions

We urge the Committee to support the requested $17.0 million to fund NOAAwide educational training relationships through partnerships with a consortium of

Minority Serving Institutions (MSIs). This program is budgeted within NOAA’s Program Support ORF account. In order to have a productive scientific workforce now

and in future years, the pool of qualified applicants must be as diverse as the population at large. Under-representation of minorities in earth science disciplines is a

serious issue that must be addressed by multiple programs across multiple agencies

and institutions. We believe that NOAA’s Minority Serving Institutions initiative

should be fully funded for the current and future benefit of the entire scientific community and the country.

On behalf of UCAR, I want to thank the Committee for the important work you

do for U.S. scientific research, education, and training. We appreciate your attention

to the recommendations of our community concerning the fiscal year 2001 budget.

PREPARED STATEMENT OF THE YUKON RIVER DRAINAGE FISHERIES ASSOCIATION

ABSTRACT

The Yukon River Drainage Fisheries Association (YRDFA) requests a reauthorization of a $500,000 appropriation to the YRDFA for salmon habitat and stock restoration projects, to conduct research on the marine bycatch of salmon and to assess

salmon productivity in the marine environment. Funds would be transferred to the

YRDFA through a National Oceanographic and Atmospheric Administration/National Marine Fisheries Service grant.

YRDFA’S CURRENT RESEARCH EFFORTS

In the fiscal year 2000 budget Congress authorized a $500,000 appropriation to

YRDFA for ‘‘habitat restoration, monitoring projects, stock assessments and bycatch
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research.’’ YRDFA is currently developing the final list of projects to be carried out

with this appropriation and finalizing grant award paperwork with the National

Marine Fisheries Service. YRDFA’s current research plans for the year 2000 are divided into four objectives:

—Stock origins, migration patterns and marine productivity of Bering Sea chinook

salmon

—Habitat restoration of Yukon River drainage salmon streams

—Stock restoration through instream incubation technology

—Chinook smolt productivity analysis and outmigration.

Stock origins, migration patterns and marine productivity of Bering Sea chinook

Analysis is focusing on scales from chinook collected by observers in the Bering

Sea trawl fisheries from 1997–1999. The first year of the study would involve processing observer program samples, getting baseline scales from agencies, digitizing

baseline scales, and developing and testing classification models. The second would

focus on digitizing and analysis of observer program samples and report writing.

Chinook data from NPAFC high seas cruises and other sources will also be examined.

Anticipated primary results are: identification of trawl salmon bycatch into broad

regional stock groupings, e.g.: western Alaska, central Alaska, southeast Alaska/

British Columbia that will enable managers to adjust trawl fishing effort to avoid

stocks that are having conservation problems. Likely secondary results are improved

understanding of migration patterns and marine productivity (i.e., ocean survival

rates) of Bering Sea chinook that will enable managers to better forecast returns

of adult chinook salmon and to assess impacts of changing ocean conditions (temperature, food supply, etc.) on chinook stocks.

Habitat restoration of Yukon River drainage salmon streams

Efforts will focus on improving access of chinook and chum salmon to spawning

and rearing areas currently impeded due to historical mining activity. Methods

would include realignment and regarding of stream channels, streambank reclamation, floodplain modification, construction of fish habitat structures and enhancement of fish passage to access spawning and rearing habitat. Likely project locations

include Sourdough, Ruby, Faith and Hope Creeks, the Birch Creek watershed and

the Minook Creek watershed. As part of this effort YRDFA will also work with local

miners—many of who still have active claims in these areas—to educate them on

the importance of protecting and restoring fisheries habitat.

Stock restoration through instream incubation technology

Habitat restoration activities such as those described above as well as USFWS

and BLM efforts to build an access channel around the FE dam (Davidson Ditch)

on the Chatanika River will open up new areas for salmon. In some cases, however,

salmon spawning in these areas would benefit from a ‘‘jump-start’’ through the use

of instream egg incubation boxes to greatly improve winter egg-fry survival rates.

YRDFA will also survey other road-connected streams for possible installation of incubation boxes to serve as demonstration projects and feasibility tests. Additional

streams to be surveyed include the Nenana, Delta, Chena, Salcha and Goodpaster.

Chinook smolt productivity analysis and outmigration

Trapping of juvenile chinook near the Chena River flood control dam and other

streams will enable us to gain a better understanding of their overall health and

to collect baseline data which will enable fishery managers to make better forecasts

of salmon returns in future years. While the database on the number of adult

spawners has been steadily improving since 1994, little data is available, other than

that collected by USGS, on egg-to-fry survival rates and general health of smolt and

juvenile salmon. In addition to the Chena River YRDFA will attempt to survey select index streams in different sections of the drainage such as the lower Yukon and

the Koyukuk River.

So as to maximize the effectiveness of research dollars YRDFA will be working

closely with various agencies and researchers. Cooperating entities include the Alaska Department of Fish & Game, the U.S. Fish and Wildlife Service, the Bureau of

Land Management, the U.S. Geological Service and the University of Washington,

School of Fisheries.

FISCAL YEAR 2001 REQUEST

For fiscal year 2001 the YRDFA requests a reauthorization of $500,000 in funding. If these funds were received YRDFA would be able to:
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—restore additional habitat and expand salmon restoration efforts in the upper

Yukon and Tanana drainages especially in the Tofty mining area. Every spawning ground restored would help to reclaim the biological and genetic diversity

of Yukon salmon stocks. As with the fiscal year 2000 appropriation YRDFA will

be working closely with the Bureau of Land Management and the Alaska Department of Fish & Game, Habitat Division.

—analyze chinook bycatch data from the 2000–2002 fishing seasons. These data,

when coupled with the 1997–1999 data currently under analysis, will enable

managers to structure groundfish fisheries to avoid salmon stocks of concern.

—better predict future returns of salmon through analysis of inter-annual growth

of juvenile salmon and analysis of marine productivity. YRDFA will examine

ocean conditions (temperature, food supply, etc) and correlate these conditions

with indicators of the at-sea survival rates of salmon.

Budget estimates for this request if fully funded are as follows: YRDFA staff support—$120,000, Habitat and stock restoration—$100,000, Chinook bycatch analysis—$130,000; Marine productivity assessment—$150,000.

CLOSING STATEMENT

In summation our research funding request aims to fill information gaps not addressed by current agency research plans. Yukon River salmon are a vital resource

to more than 14,000 Alaska residents in 42 different communities. The annual

wholesale value of the commercial salmon fishing industry approaches $10,000,000.

Yukon River chinook and fall chum salmon also spawn in Canada and are currently

the subject of negotiations between the two countries.

Our research program will aid significantly in the management of this resource.

Thank you for this opportunity to submit written testimony.

DEPARTMENT OF STATE

PREPARED STATEMENT OF NEW YORK UNIVERSITY

Thank you for allowing New York University (NYU) to submit testimony on behalf of the International Center for Democratic Public Service. NYU is requesting

$5 million for the technological and communications facilities to link its training

and resources to public servants in other nations.

Through its Robert F. Wagner Graduate School for Public Service, NYU has established itself as the leader in training international public servants for democratic

public service. The Wagner School, working with leaders of international NGOs and

U.N. officials, has implemented a unique new program that provides focused and

practical education and training for managers of international development, advocacy and relief programs. The list of countries where we already have had in impact

include: Ukraine, Georgia, Mozambique, Slovak Republic, Astonia, Romania, Latvia

and Lithuania. The University is now looking to centralize and focus its efforts in

this area by establishing a new International Center for Democratic Public Service.

As a first phase, the University has identified a technology/communications hub

as central to the goal of linking public servants throughout the globe to the faculty

and resources of NYU. The goal is access to the full range of distance learning technologies including digital televideo and data transmission, satellite communications,

and internet services, including video for faculty and students. To reach its goal,

NYU will reach out to both private and public sources for funding and will draw

on other sectors of the University, such as law and business.

We hope you will find this project worthy of your support.

PREPARED STATEMENT OF THE UNIVERSITY OF MIAMI

Mr. Chairman and Members of the Subcommittee, I appreciate the opportunity

to present this testimony and to seek your support in fiscal year 2001 for two

projects at the University of Miami. First, a timely and new initiative, the Cuba

Transition Project in the Institute for Cuban and Cuban-American Studies and,

next, continuing support for a unique national resource, the Dante B. Fascell NorthSouth Center.

The Cuba Transition Project

The University of Miami is poised to play an important role in a Cuba transition

because of its location, programs, material and human resources, language capability, and historical association with Cuba. The Institute for Cuban and Cuban-
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American Studies is the coordinating body for all University activities on Cuba. It

manages the Cuba On Line database, the only database of historical and contemporary information on Cuba and is the secretariat of the Association for the Study

of the Cuban Economy (ASCE), which brings together the most highly qualified

economists worldwide studying the island.

The Cuba Transition Project is designed to provide policy makers, analysts, and

others with accurate information, incisive analysis, and practical policy recommendations. The Cuba Transition Project is designed to be adaptable to the constantly changing circumstances of Cuba reality and of U.S.-Cuban relations. Its

work can be divided into five major areas: (1) research; (2) task forces; (3) study

groups; (4) publications; and (5) professional development and education. Through

the Institute for Cuban and Cuban-American Studies, the Project will include offices

for research, facilities for conducting briefings and seminars, a website that will include a searchable database, and a distance learning component.

The Project’s programs will be clustered in three phases: pre-transition, transition, post-transition. The emphasis during the first phase is on current conditions,

critical issue areas, planning, and emergency aid. Programs are addressed primarily

by Project researchers, task forces, study groups, and publications. Programs and

briefings are directed primarily at congressional staff, officials, policy makers, analysts at multi-lateral and international agencies, and non-governmental organizations. Programs related to the transition phase combine the analytical work of the

first phase with the practical necessities of an ongoing process of political, economic,

and social transition. The target audience of the programs will eventually incorporate individuals resident on the island involved in the issue areas that the are

focus of the Project. The main focus during the post-transition period will be on professional education, retraining, academic exchange, and distance learning. The basic

mission of the Project remains the same during the three-step program: aiding and

accelerating the transition from a centrally planned economy and communist partystate control to a free-market democracy.

For fiscal year 2001 we seek $10 million from the Subcommittee through the Department of State to establish, develop and implement the Cuba Transition Project

at the Institute for Cuban and Cuban-American Studies at the University of Miami

The Dante B. Fascell North-South Center

Next, we seek your continued support for the Dante B. Fascell North-South Center. As you know, the Center has long enjoyed bicameral and bipartisan support and

in fiscal year 2001 as in past years, from the Administration. The Fascell Center’s

mission is to promote better relations and to serve as a catalyst for change among

the United States, Canada, and the nations of Latin America and the Caribbean.

My colleagues there conduct programs of research, public outreach, education, training, and cooperative study. It publishes and disseminates policy-relevant information on the Americas. The programs and activities also foster linkages among academic and research institutions, NGOs, governmental institutions both civilian and

military, and philanthropic and private sectors throughout the Americas.

We are convinced that such a mission is fundamental to the national interest. Informed and balanced analysis and improved understanding of our neighbors in the

Western Hemisphere provide us great opportunities to enhance our economy, expand our jobs, and learn of risks before they reach threatening proportions. The

United States has long equated stability in the region with its own security interest.

The maintenance of that stability today requires a sophisticated partnership among

the countries of the Hemisphere. It also demands continually new approaches in

U.S. policy.

Fulfilling a singular role in inter-American affairs, the Center’s programs produce

nonpartisan, policy-relevant analysis and discussion of key issues directly affecting

the lives and well being of U.S. citizens. Unlike partisan institutes and advocacy

groups, the Center engages vital inter-American issues such as trade, investment,

competitiveness, security, corruption, civil-military relations, institutional reform,

drug trafficking, immigration, and the environment from the perspective of the public good. Unlike academic institutions, the Center devotes its efforts toward publishing accessible and relevant analyses for diverse audiences, including legislators,

government officials, NGOs, and the private sector. Our goal is to find viable solutions to the problems confronting the nations of the Western Hemisphere.

The Center is a reflection of the belief that the nation benefits when the great

issues of the Western Hemisphere are analyzed and debated by private sector and

nongovernmental groups under the auspices of a neutral forum. Governments cannot successfully convoke and organize nongovernmental opinion, and academic institutions have a different mandate. As a respected, independent, public policy institution—fully cognizant of the special responsibilities attached to its federal funding—
423

the Center has served this function successfully. It is crucial that business people,

professionals, and nongovernmental organizations have a trusted, nonpartisan policy center that can assist them in exchanging opinions and bringing their views to

the attention of policymakers.

The North-South Center’s activities are rooted in democratic values, transparent,

efficient and effective government, market-driven economic prosperity, environmentally sustainable development, and social justice. Recent events have made the

Center’s work and the values it promotes all the more relevant to the American people. While maintaining a commitment to its core mission and shared values, the

Center is also responding to new threats and opportunities. With its wide array of

linkages with government, business, labor and other civil society actors in the Americas, the Center is actively engaged in developing partnerships and new approaches

to tackling the complex problems remaining before the region.

The Center receives financial contributions from a variety of government agencies,

private foundations, corporations and individual donors. Such contributions are directed toward specific programs and projects, and do not normally cover core operations and overhead costs. Congressional appropriations for core staff and operations allow the Center to fulfill its congressional mandate while supporting efforts

to increase funding from other sources. Over the past year, the Center has been

making appropriate responses to an independent evaluation of its programs and operations completed in November 1998. In addition to the refocusing of research and

outreach projects into areas with greater potential for private funding, the Center

is also engaged in the development of an international advisory board.

Advancing Market Reforms and Democratic Development

In the Latin American and Caribbean context, one key set of problems is clustered

around the question of how to advance and deepen market reforms, while assuring

that citizens share broadly in their benefits and are cushioned from the harshest

effects of the accompanying adjustment process. Center researchers engage these

concerns through ongoing research and policy analysis of trade and economic integration (Free Trade Area of the Americas), studies on addressing poverty and inequality through enhanced human capital accumulation and institutional reforms,

empirical studies of sectoral performance (e.g., textiles, tourism), surveys of shifts

in corporate strategies, and examination of the effects of restructuring on patterns

of migration and immigration. A second set of problems relates to weaknesses and

flaws in the region’s democracies. Chief among these are weaknesses in political

representation, failures in the rule of law, and unresolved issues in civil-military relations. The Center will continue to address these through research on civil society

participation and the role of political parties, analysis of judicial reform, and study

of the lingering influence of the military in domains beyond those typical of civilianled democracies. This last area is further embedded in the Center’s overall work on

inter-American security issues, which includes narcotrafficking. A third set of issues

relates to environmental concerns and their integration into a broader vision of sustainable development. Here, the Center pursues program activities that look into

the means of achieving environmentally sustainable trade and ways of instituting

new regimes of environmental law. The Center will also continue to contribute to

the framing of new understandings of the linkage between environmental stresses

and human security.

Building Human and Institutional Capacity

One of the most pressing challenges facing Latin American and Caribbean countries is the development of human resources and institutions capable of maximizing

the benefits of free markets and democracy. The shift toward market incentives requires the development of the corresponding capacity to provide the regulatory

mechanisms and public information functions necessary for avoiding market failures

and suboptimal service delivery. To contribute toward this need, collaborative practical training and education seminars in capacity building will be a central focus of

the North-South Center. These activities address such areas as new public-private

partnerships in social services, the enhancement of consumer safety and standards,

the strengthening of laws related to environmental stewardship, and human resource training in telecommunications, banking, port management, and public security. The Center’s collaborative endeavors in capacity-building also serve to extend

and deepen its ties with local institutions and organizations throughout Latin America and the Caribbean that work in these professional fields and issue-areas. Building on the successes of these projects in 1999, the Center plans to expand into new

areas (including telecommunications, energy and banking regulation) in order to develop human resources and institutions in support of free markets and democracy.
424

The New Public Diplomacy

The Dante B. Fascell North-South Center conceives of and implements its outreach programs in the context of a clear recognition of the growing significance of

strengthening civil societies throughout the hemisphere. As a consequence, the Center will continue its role as a facilitator and catalyst for public dialogue, actively

seeking to bring together civil society organizations, including representatives from

the private sector, to generate ideas and offer recommendations that both enhance

the agenda of policy options for public officials and deepen the level of democratic

participation in the policy process. Having developed a widely recognized track

record of significant contributions to the Summit of the Americas process since its

inception in Miami in 1994, the Center will continue to seek out expertise from civil

society to monitor and evaluate the implementation of Summit commitments in advance of the Summit of the Americas III in Canada in 2001. Similarly, the Center

will continue its series of Diplomatic-Private Sector Roundtables in Washington,

which provide a forum for frank discussion of emerging and high-priority policy

issues.

The publications of the Dante B. Fascell North-South Center Press serve as the

most effective and enduring means of disseminating the research results and policy

recommendations produced by the Center. The Press produces a focused set of publications, including peer-reviewed books, the North-South Agenda Papers, NorthSouth Issues Reports, North-South Update (a short policy brief issued biweekly to

government officials and key policy analysts), and timely white papers aimed to provide input to the Summit of the Americas process. The Press ensures that all Center

books, papers, policy briefs, and reports adhere to the highest standards of quality,

style, and accessibility. In 2001, the Dante B. Fascell North-South Center will seek

to increase the number of its publications appearing in Spanish and Portuguese.

Today’s Agenda of New Opportunities and Lingering Problems

Mr. Chairman, the interdependence between our neighbors in the Western Hemisphere affects the daily lives of our citizens more than any other region of the world.

More Americans fly south to Latin America and the Caribbean each year than to

either Europe or Asia. Policy decisions on such inter-American concerns as immigration, drug trafficking, and transborder pollution have immediate impacts on the

quality of life of U.S. citizens. Trade with Latin America and the Caribbean will

soon surpass that of Europe and Japan combined. The financial stability of countries like Mexico and Brazil has significant ripple effects in global markets and farreaching implications for U.S. exporters. The North-South Center engages these

issues by providing ideas, analysis, and policy options that will support our nation’s

interests.

There are many reasons to be optimistic about the region’s future. The nations

of the hemisphere have made remarkable progress in recent years in terms of market reform and democratic governance. Inflation is down, trade and investment are

up, and free and fair elections have become the order of the day in most countries.

Yet, many of the nations of the Western Hemisphere are still burdened by enduring

historical legacies, and many societies are still negotiating the difficult passage from

old problems to new paths of development. Latin America remains the region of the

world with the greatest gap between rich and poor and the tension between intractable poverty and steady but modest growth presents a constant challenge for the

hemisphere’s governments and political leaders. In the past year, this has been particularly true in the Andean nations, where a problematic constitutional reform

process has taken place in Venezuela; concerns have been raised about abuses by

the executive in Peru; a disturbing, albeit limited, coup has occurred in Ecuador;

and the effort to halt the drug trade and bring about reconciliation in Colombia has

taken on dramatic proportions. All of these developments are indications of how tenuous the progress to date in the region can be. For fiscal year 2001, we seek $1.75

million, the continuation funding requested by the Administration.

Mr. Chairman, we recognize that this will be another difficult year. However, we

hope that you and your colleagues on the Subcommittee will find it possible to support these two important initiatives that deal with issues of crucial importance to

U.S. citizens, the Cuba Transition Project and the Dante B. Fascell North-South

Center.
425

INDEPENDENT AGENCIES

PREPARED STATEMENT OF THE UPPER MISSISSIPPI RIVER BASIN ASSOCIATION

The Upper Mississippi River Basin Association (UMRBA) is the organization created 19 years ago by the Governors of Illinois, Iowa, Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating the five states’ river-related programs

and policies and for collaborating with federal agencies on regional issues. As such,

the UMRBA has an interest in the budget of the Maritime Administration.

Of particular concern to the UMRBA is funding for MARAD Operations. The

President’s fiscal year 2001 budget proposal includes approximately $32 million for

this account. Among other things, the MARAD Operations budget supports research

and development efforts, which help advance ship design, construction, and operations. For example, MARAD funding has been used to support the design of prototype mooring buoys used on the Upper Mississippi River. Such buoys allow tows to

tie up safely while awaiting lockage, thus avoiding environmental damage that

might be caused by mooring to the shoreline. Funding for research and development

efforts such as these is critical to the safety and efficiency of commercial navigation

on this nation’s inland waterway system.

In addition, the MARAD Operations account supports MARAD field offices on the

inland waterway system, such as the office located in St. Louis, Missouri. The St.

Louis office is situated at the confluence of the Mississippi, Missouri, and Illinois

Rivers, on which move much of the Midwestern grain destined for international

markets. Such field offices are essential for MARAD to maintain its involvement in

an increasingly wide variety of interagency and interstate river management issues.

The UMRBA supports adequate funding for the Maritime Administration’s Operations account.

PREPARED STATEMENT OF THE LOVELACE RESPIRATORY RESEARCH INSTITUTE

It is proposed that the Small Business Administration support the start-up operational costs of a technology-based incubator in Albuquerque, New Mexico to assist

in the attraction, admission, incubation and graduation of technology based companies that create new and better jobs for New Mexicans.

The Business Technology Group

In the fall of 1997, Dr. Robert Rubin, CEO and President of the Lovelace Respiratory Research Institute (LRRI) convened a broad coalition of community leaders,

representing the core Central New Mexico business and educational institutions.

The subject of the meeting was to consider ways to help improve the future economic stability of the area, given the change of focus to the national laboratories,

which form a critical economic base for the area. The outcome was the formation

of a new technology based incubator to attract companies to New Mexico, and assist

the formation of companies to commercialize technology coming from the national

laboratories, the University of New Mexico (UNM) and LRRI.

LRRI and UNM merged its incubator (Albuquerque Technology Incubator), along

with other private efforts to incubate companies, into the Business Technology

Group (BTG). The initial steps to form BTG continued throughout 1998, and DOE

through its Office of Community Worker Transition, provided $100,000 as initial

funding to assist in the formation of BTG.

The initial founder’s intentions proved to be well founded. BTG has accomplished

in its first year, what most similar incubators accomplish in their fourth or fifth

year of operation. The BTG aim and strategies are working. BTG has forty-one technology-based companies housed in its three campus locations. There are approximately five others waiting for consideration to join BTG. This initial cadre of companies forms the critical mass for graduating successful technology based companies

that provide New Mexicans with new and better jobs.

One problem does continue to exist.

There is an urgent need to provide a small and effective staff that will better utilize volunteer services to support the incubatee companies and to build an infrastructure of services to accelerate the growth of these start-up companies.

Current Status

BTG’s ability to provide superior technical facilities and equipment makes it nationally competitive to attract high potential technology based entrepreneurs. BTG’s

founders formed a public/private venture, providing the following non-cash inducements for companies to join BTG:
426

1The Investment Company Institute is the national association of the American investment

company industry. Its membership includes 8,021 open-end investment companies (‘‘mutual

funds’’), 496 closed-end investment companies and 8 sponsors of unit investment trusts. Its mutual fund members have assets of about $6.728 trillion, accounting for approximately 95 percent

of total industry assets, and over 78.7 million individual shareholders. Many of the Institute’s

investment adviser members render investment advice to both investment companies and other

clients. In addition, the Institute’s membership includes 402 associate members which render

investment management services exclusively to non-investment company clients. A substantial

portion of the total assets managed by registered investment advisers are managed by these Institute members and associate members.

—Created 120,000-sq. ft. of subsidized superior laboratory and manufacturing

space and 35,000-sq. ft. of office space with total annual savings to incubatees

amounting to $104,800. —Immediate access to office equipment, furnishings and superior laboratory

equipment valued at $450,000 and use of umbrella coverage under existing regulatory permits: Machine shops, large storage areas and high-bay working

areas; Animal care for scientific studies; Radiation control and chemical waste

treatment facilities; and Electrical and wet laboratory facilities. —Annually, over 5,000 volunteer hours, which at the rate of $50 per hour

amounts to $250,000 of professional, administrative and technical assistance. —Currently, total private non-cash contributions approach $840,000 per year. —BTG companies currently provide 200 technology-based jobs.

In conclusion, the BTG concept is working. It is at a critical stage for growth into

a long-term viable institution that plays a critical role in the development and diversification of New Mexico’s economy. New Mexico is a wonderful place in which to

live. Its economy is below national averages in most or all indicators. BTG is working to improve this economic condition. We request $400,000 in start-up funding to

bring stability to BTG. Mr. Chairman, and members of the Committee, we respectfully thank you for your consideration of our request.

PREPARED STATEMENT OF THE INVESTMENT COMPANY INSTITUTE

The Investment Company Institute1 appreciates this opportunity to submit testimony to the Subcommittee in support of the fiscal year 2001 Appropriations request

for the Securities and Exchange Commission (SEC). The Institute would like to commend the Subcommittee for its past efforts to assure adequate resources for the

SEC.

Mutual funds are an integral part of the U.S. economy and have become one of

America’s primary savings and investment vehicles. More than 78 million investors

in over 48 million U.S. households own mutual fund shares today and, since 1990,

the percentage of U.S. retirement assets held in mutual funds has more than tripled. Moreover, most mutual fund investors are ordinary Americans; the median

household income of fund shareholders is $55,000. These millions of average Americans deserve continued vigilant regulatory oversight of mutual funds. For this reason, sufficient funding of the SEC should be a priority. The Institute urges Congress

to provide appropriations at a level sufficient to ensure the SEC’s ability to fulfill

its regulatory mandate.

The Administration’s fiscal year 2001 budget proposes SEC funding at a level of

$422.8 million. The Institute supports this level of funding to sustain the SEC’s operations, especially those of the Division of Investment Management, which regulates the mutual fund industry. While we are also pleased that the fee rate for registration statements and other filings pursuant to Section 6(b) of the Securities Act

of 1933 has decreased in accordance with the National Securities Market Improvement Act of 1996, we remain concerned that SEC fees will generate revenues significantly in excess of that required to fund SEC operations. In the current fiscal year,

for example, it is anticipated that Section 6(b) fees will generate revenues of more

than one billion dollars, while the SEC’s budget is $367 million. The Institute has

supported and will continue to support adequate financial resources to provide effective regulatory oversight of mutual funds, but we also believe that the fees should

be reflective of their intended purpose, that is, to offset the costs associated with

the activities of the SEC.

Adequate financial resources are essential for the SEC to continue its effective

regulatory oversight of the securities markets and to carry out important investor

protection and awareness initiatives. Such resources will enable the SEC to complete its many important initiatives, which include, among other things, finalizing

significant rule proposals on fund governance issues, developing new rules for mutual fund advertising, and addressing disclosure of after-tax returns.
427

The SEC will also be conducting routine and special inspections of investment advisers and fund companies, continuing its review of fund prospectuses and fund profiles under the new disclosure rules, and responding to projected increases in the

number of interpretive requests, shareholder letters, and exemptive relief requests

submitted by investment management participants.

Moreover, the SEC will address significant equity market structure issues, such

as decimalization, concerns over market fragmentation and after-hours trading, and

will respond to the many challenges new developments in technology will bring. Finally, the SEC will continue its ongoing investor education initiatives.

These initiatives will benefit the millions of Americans invested in mutual funds

and are integral to fulfilling the SEC’s mission of protecting investors and maintaining the integrity and the efficiency of the nation’s securities markets.

Equally important to having adequate financial resources to fulfill these initiatives is the SEC’s ability to maintain adequate staffing resources. To this end, we

believe that it is essential that the SEC be able to combat the high attrition rate

of its professional staff, which, over the last two years, has resulted in a loss of 25

percent of its attorneys, accountants and examiners. Accordingly, we support the

SEC’s retention initiative, which would raise staff compensation to levels comparable with the banking regulatory agencies. We believe the proposed increases

would go far in raising employee morale, thus enhancing the SEC’s recruitment and

retention efforts. Attracting and retaining qualified staff obviously are necessary in

order for the SEC to fulfill its mandate.

We appreciate your consideration of our views.

(i)

LIST OF WITNESSES, COMMUNICATIONS, AND

PREPARED STATEMENTS

Page

Alachua County Board of Commissioners, Alachua County, Florida, prepared

statements ........................................................................................................ 383, 401

Albright, Hon. Madeleine K., Secretary of State, Department of State .............. 117

Prepared statement .......................................................................................... 119

American Indian Higher Education Consortium, prepared statement ............... 398

American Public Power Association, prepared statement .................................... 388

American Society of Mechanical Engineers, prepared statement ........................ 402

Bilmes, Linda J., Chief Financial Officer and Assistant Secretary for Administration, Office of the Secretary, Department of Commerce .............................. 1

Bloom, Ellen, Deputy Chief of Staff, Office of the Secretary, Department

of Commerce ......................................................................................................... 1

California Industry and Government Central California Ozone Study (CCOS)

Coalition, prepared statement ............................................................................. 412

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, questions submitted by .......................................................................................................... 110, 170

Carman, Gregory W., Chief Judge, United States Court of International

Trade, the judiciary, prepared statement .......................................................... 358

City of Gainesville, Florida, prepared statements............................................ 380, 386

City of Miami Beach, Florida, prepared statement .............................................. 384

City of Newark, New Jersey, prepared statements.......................................... 384, 389

Daley, Hon. William A., Secretary, Office of the Secretary, Department of

Commerce ............................................................................................................. 1

Prepared statement .......................................................................................... 4

Domenici, Hon. Pete V., U.S. Senator from New Mexico, questions submitted

by......................................................................................................... 23, 90, 163, 253

Fishel, Andrew, Director, Office of the Managing Director, Federal Communications Commission .......................................................................................... 289

Freeh, Louis J., Director, Federal Bureau of Investigation, Department of

Justice ................................................................................................................... 215

Prepared statement .......................................................................................... 216

Fuller, William P., President, The Asia Foundation, prepared statement ......... 365

Gregg, Hon. Judd, U.S. Senator from New Hampshire, questions submitted

by.................................................................................................................. 15, 88, 248

Heyburn, John G., II, Chairman, Committee on the Budget, Judicial Conference of the United States, the judiciary, prepared statement ..................... 337

Hollings, Hon. Ernest F., U.S. Senator from South Carolina, questions submitted by ............................................................................................................ 28, 309

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, questions submitted

by................................................................................................................ 28, 267, 315

Investment Company Institute, prepared statement ........................................... 426

Kennard, William E., Chairman, Federal Communications Commission ........... 289

Prepared statement .......................................................................................... 291

Kilmer, Deborah K., Assistant Secretary for Legislative and Intergovernmental Affairs, Office of the Secretary, Department of Commerce ................. 1

Klose, Kevin, President and CEO, National Public Radio, letter from ............... 404
Page

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Lautenberg, Hon. Frank R., U.S. Senator from New Jersey ............................... 72

Prepared statements.................................................................................... 153, 246

Questions submitted by ...................................................... 30, 111, 174, 318, 333

Leahy, Hon. Patrick J., U.S. Senator from Vermont, questions submitted

by ........................................................................................................................... 38

Levitt, Arthur, Chairman, Securities and Exchange Commission ...................... 323

Prepared statement .......................................................................................... 323

Local 511, Professional Employees of the Immigration and Naturalization

Service of the American Federation of Government Employees, prepared

statement .............................................................................................................. 394

Lovelace Respiratory Research Institute, prepared statement ............................ 425

Marshall, Donnie R., Acting Administrator, Drug Enforcement Administration, Department of Justice ............................................................................ 215, 227

Prepared statement .......................................................................................... 228

Mayer, Haldane Robert, Chief Judge, United States Court of Appeals for

the Federal Circuit, the judiciary, prepared statement .................................... 357

McConnell, James M., Executive Director, Securities and Exchange Commission ........................................................................................................................ 323

McConnell, Hon. Mitch, U.S. Senator from Kentucky, questions submitted

by ........................................................................................................................... 105

Mecham, Leonidas Ralph, Director, Administrative Office of the U.S. Courts,

the judiciary, prepared statement ...................................................................... 344

Meissner, Doris, Commissioner, Immigration and Naturalization Service, Department of Justice .............................................................................................. 183

Prepared statement .......................................................................................... 186

Mikulski, Hon. Barbara A., U.S. Senator from Maryland .................................... 72

Questions submitted by ........................................................................ 35, 181, 271

Murphy, Diana E., Chair, United States Sentencing Commission, the judiciary, prepared statement ...................................................................................... 359

National Border Patrol Council of the American Federation of Government

Employees, prepared statement .......................................................................... 391

National Consortium for Justice Information and Statistics, prepared statement ...................................................................................................................... 374

National Immigration and Naturalization Service Council, American Federation of Government Employees, prepared statement ........................................ 396

National Public Radio, prepared statement .......................................................... 405

National Recreation and Park Association, prepared statement ......................... 378

National, Coordinated Law-Related Education Program, prepared statement .. 371

New York University, prepared statement ............................................................ 421

Northwest Indian Fisheries Commission, prepared statement ........................... 413

Reno, Janet, Attorney General, Office of the Attorney General, Department

of Justice ............................................................................................................... 45

Prepared statement .......................................................................................... 46

Retzlaff, Barbara, Director, Office of Budget, Office of the Secretary, Department of Commerce ............................................................................................... 1

Smith, Hon. Fern M., Director, Federal Judicial Center, the judiciary, prepared statement ................................................................................................... 349

Stevens, Hon. Ted, U.S. Senator from Alaska, question submitted by........... 253, 308

The Nature Conservancy, prepared statement ..................................................... 409

University Corporation for Atmospheric Research, prepared statement ............ 416

University of Miami, prepared statements ....................................................... 407, 421

Upper Mississippi River Basin Association, prepared statement ........................ 425

Williams-Bridgers, Jacquelyn L., Inspector General, Office of the Inspector

General, prepared statement .............................................................................. 128

Yukon River Drainage Fisheries Association, prepared statement ..................... 419
(iii)

SUBJECT INDEX

DEPARTMENT OF COMMERCE

OFFICE OF THE SECRETARY

Page

Additional committee questions ............................................................................. 15

ATP ........................................................................................................................... 21

Census ...................................................................................................................... 35

Census 2000 ............................................................................................................. 28

China—intellectual property .................................................................................. 34

Coastal impact assistance fund .............................................................................. 9

Critical infrastructure program .............................................................................. 17

Department of the Interior’s marine resource role ............................................... 28

Digital divide ............................................................................................... 6, 33, 35, 42

E-commerce:

Initiative:

BEA’s .......................................................................................................... 23

Effect of not funding ................................................................................. 23

Effect of on small business ....................................................................... 30

Revolution ......................................................................................................... 38

EDA Internet access................................................................................................ 16, 42

Emergency Oil and Gas Loan Program ................................................................. 24

Environmental impact statement backlog ............................................................. 29

Fishermen, economic assistance to ......................................................................... 30

Global economy, funding for data on ..................................................................... 24

Home Internet Access Program (HIAP) ................................................................. 6

Intent of ............................................................................................................. 6

IIP versus ATP ......................................................................................................... 11

Incremental funding for quality improvements, lack of ....................................... 23

National Security Council ....................................................................................... 14

National Technical Information Service (NTIS) ................................................... 10, 21

Functions transferred to Library of Congress ................................................ 11

National Textile Center ........................................................................................... 13

Native Americans .................................................................................................... 12

NIST/infrastructure program .................................................................................. 18

NOAA:

Delay of fleet ..................................................................................................... 9

Lawsuit .............................................................................................................. 10

Programs, emphasis on funding ...................................................................... 22

Research in support of the agency’s programs ............................................... 21

Overview of Secretary Daley’s statement .............................................................. 1

Public Telecommunications Facilities Program............................................. 15, 22, 25

Rescission criteria .................................................................................................... 13

Safe harbor agreement on privacy ......................................................................... 43

Shark finning ........................................................................................................... 30

Standards, maintaining without budget increases ............................................... 23

Suitland facilities ..................................................................................................... 36

Census............................................................................................................... 36, 37

NOAA ................................................................................................................ 37

Textile Program, elimination of .............................................................................. 12

Tourism ..................................................................................................................... 10
Page

iv

DEPARTMENT OF JUSTICE

DRUG ENFORCEMENT ADMINISTRATION

Additional committee questions ............................................................................. 248

Border Patrol:

Enforcement Organization, creation of ........................................................... 242

Improving the ................................................................................................... 241

Budget initiatives .................................................................................................... 228

Budget request:

DEA fiscal year 2001 unfunded ....................................................................... 235

Fiscal year 2001 ................................................................................................ 233

Colombia supplemental ........................................................................................... 237

DEA:

Initiatives, funding for other ........................................................................... 235

Strategy ............................................................................................................. 230

Drug abuse in America—the changing demographics .......................................... 230

Drug trafficking:

Patterns ............................................................................................................. 227

Threat to the United States ............................................................................. 229

High Intensity Drug Trafficking Areas Program .................................................. 269

Methamphetamine request ..................................................................................... 234

Mexico, drug trafficking in ...................................................................................... 238

Mission and approach .............................................................................................. 228

FEDERAL BUREAU OF INVESTIGATION

Additional committee questions ............................................................................. 248

Agents overseas, clarification on ............................................................................ 240

Budget request, overview of fiscal year 2001 ........................................................ 217

Counterintelligence .................................................................................................. 217

Counterterrorism ..................................................................................................... 221

Technology R&D—FBI ..................................................................................... 259

Crime and violence rates, reducing the ................................................................. 243

FBI:

Development of Domestic Terrorism Division ................................................ 263

Jewelry theft:

Tracking of ................................................................................................. 267

Efforts to combat this criminality ............................................................ 268

Laboratory modernization ................................................................................ 240

Mission, support of the ..................................................................................... 215

FBI-CIA coordination .............................................................................................. 238

Firearm retrievals .................................................................................................... 245

First responder training .......................................................................................... 264

Gun:

Retrieval notices ............................................................................................... 246

Show checks ...................................................................................................... 243

User fee for checks ........................................................................................... 245

Heroin problem in northern New Mexico .............................................................. 240

High Intensity Drug Trafficking Areas Program .................................................. 269

IDENT-IAFIS intergration ...................................................................................... 242

Indian Country, law enforcement in ...................................................................... 256

Information collection, management, and analysis .............................................. 217

Investigative support ............................................................................................... 220

Law enforcement services ....................................................................................... 225

Legislative proposals ............................................................................................... 226

National Domestic Preparedness Office ................................................................. 247

National laboratory protection ................................................................................ 241

Related departmental funding requests ................................................................ 225

Rio Arriba County black tar heroin problem ......................................................... 266

South Korea, crime problem in ............................................................................... 239

Technology/cyber crimes .......................................................................................... 223

Training .................................................................................................................... 218

Victim Witness Assistance Program ...................................................................... 268

Violent crimes .......................................................................................................... 222

War crimes assistance ............................................................................................. 246

IMMIGRATION AND NATURALIZATION SERVICE

Administrative and operational performance, external audit of ......................... 271
Page

v

Anchorage district office expansion project ........................................................... 253

Border Patrol ....................................................................................................... 184, 201

Agents ................................................................................................................ 211

Equipment for ................................................................................................... 213

Recruitment ...................................................................................................... 209

Capital investment account................................................................................ 200, 208

Charleston case ........................................................................................................ 202

Status of the ...................................................................................................... 203

Criminal illegal aliens ............................................................................................. 196

Immigration and Naturalization Service results of House Judiciary Committee subpoena on criminal aliens released from detention .................... 198

Report on Criminal Aliens Who Commit Crimes After Release ................... 198

Deportation proceedings, determining resource needs for ................................... 255

Detaining illegals awaiting trial or deportation .................................................... 207

Detention .................................................................................................................. 209

Issues ................................................................................................................. 207

Enforcement ............................................................................................................. 187

Illegal Immigration Reform and Immigrant Responsibility Act, enforcement

of the ..................................................................................................................... 270

Illegal immigration via Colorado ............................................................................ 204

Immigration services........................................................................................... 185, 192

Incarcerations, reimbursing counties for ............................................................... 210

Indian reservations .................................................................................................. 205

Information technology infrastructure ................................................................... 285

INS ISIS system, operation and maintenance center for ..................................... 253

INSPASS .................................................................................................................. 250

Mexican immigrants ................................................................................................ 206

Missing person ......................................................................................................... 203

Naturalization backlog............................................................................... 195, 201, 279

Premium processing fee .......................................................................................... 210

Professionalism and infrastructure ........................................................................ 194

Restructuring ........................................................................................................... 195

Service enhancements ............................................................................................. 251

Staffing ..................................................................................................................... 252

Technology integrate ............................................................................................... 286

User fee increase ...................................................................................................... 248

OFFICE OF THE ATTORNEY GENERAL

Additional committee questions ............................................................................. 88

American Indian and Alaskan Native communities, protecting .......................... 56

Attorney overtime .................................................................................................... 83

Biennial budgeting—time-consuming nature of annual process ......................... 104

Border Patrol ........................................................................................................... 64, 69

Hiring agents .................................................................................................... 81

Pay raise ............................................................................................................ 74

Pay reform versus pay raise ............................................................................ 70

Borders, securing our .............................................................................................. 53

Caseloads in Federal courts .................................................................................... 104

CDC, DOD, HHS involvement with NDPO ........................................................... 60

Chemical Safety Information, Site Security and Fuels Regulatory Relief Act ... 114

Civil rights laws, enforcing our .............................................................................. 53

Community prosecution .......................................................................................... 88

COPS Program ......................................................................................................... 88

Budget ............................................................................................................... 79

In schools program........................................................................................... 68, 83

In schools, 2001 funding for ............................................................................. 69

Counterterrorism and foreign counterintelligence ................................................ 46

Crime:

Decline in .......................................................................................................... 61

Decreased rates ................................................................................................. 62

Through technology, fighting ........................................................................... 55

Crime-fighting initiatives, other ............................................................................. 57

Cybercrime ............................................................................................................... 84

Combating ......................................................................................................... 47

Death penalty ........................................................................................................... 113

Detention and incarceration, enhancing ................................................................ 52

Drug treatment/Offender Reentry Program .......................................................... 111
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Drugs, breaking the cycle of ................................................................................... 51

Evaluation of results—expenditures for State and local assistance .................... 100

Firearm manufacturers, litigation against ............................................................ 110

First Responder Training Program ........................................................................ 91

GPRA:

Managing for results:

Is DOJ budget information credible? ....................................................... 102

Linking DOJ component budget resource requests and goals ............... 103

Grant programs:

Elimination of major ........................................................................................ 79

Inconsistency in funding .................................................................................. 80

Gun violence ............................................................................................................. 73

Combating ......................................................................................................... 49

Hiring, difficulties in ............................................................................................... 85

Indian Country ........................................................................................................ 62, 65

Improvements to judicial system in ................................................................ 77

Law enforcement in .......................................................................................... 93

Resolving issues in ........................................................................................... 67

Indian judicial system ............................................................................................. 76

Law enforcement, improving community ............................................................... 50

Legal representation, enforcement of Federal laws and defense of U.S. interests ........................................................................................................................ 56

Methamphetamine trafficking ................................................................................ 110

Mexico, certification of ............................................................................................ 61

Missing and exploited children’s programs (MECP) ............................................. 89

National Domestic Preparedness Office ................................................................. 58

Facility ............................................................................................................... 60

Plan Colombia supplemental .................................................................................. 86

Prison population, growing ..................................................................................... 84

Radiation exposure compensation program .......................................................... 77, 97

Resources officers placed in schools, number of .................................................... 68

Rio Arriba County .................................................................................................... 75

Black tar heroin problem ................................................................................. 90

Southwest border drug problem ............................................................................. 75

The Brady law .......................................................................................................... 74

Tobacco litigation ..................................................................................................... 105

Tribal enforcement .................................................................................................. 66

Tribal law enforcement ........................................................................................... 66

VOCA legislation ..................................................................................................... 90

DEPARTMENT OF STATE

SECRETARY OF STATE

Additional committee questions ............................................................................. 163

Anti-corruption initiative ........................................................................................ 171

Antiterrorism assistance program .......................................................................... 155

Belarus, developments in ........................................................................................ 171

Budget request ......................................................................................................... 117

China and WTO membership ................................................................................. 168

Cyprus ...................................................................................................................... 150

E-mail ....................................................................................................................... 161

Embassy:

Construction ...................................................................................................... 144

Security ............................................................................................................. 169

And construction ....................................................................................... 159

Foreign relations, improved conduct of .................................................................. 130

International educational and cultural exchange ................................................. 170

International Law Enforcement Academy......................................................... 154, 163

International organizations, leading through ....................................................... 124

Kosovo:

And Bosnia ........................................................................................................ 153

International police force in ............................................................................. 173

Libya/Pan Am 103 ................................................................................................... 174

MIAs and Israel ....................................................................................................... 171

More effective, efficient, and secure operations and infrastructures .................. 134

OIG budget ............................................................................................................... 128

OSCE missions ......................................................................................................... 172
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Overseas Presence Advisory Panel recommendations .......................................... 175

Peacekeeping ............................................................................................................ 148

Professional and ethical conduct, greater adherence to fundamental principles

governing .............................................................................................................. 138

Security ..................................................................................................................... 118

Service delivery ........................................................................................................ 159

Staffing ..................................................................................................................... 161

State programs ......................................................................................................... 121

Supplemental requests, fiscal year 2000 ............................................................... 127

Taiwan and China ................................................................................................... 162

U.N.:

Dues ................................................................................................................... 175

Peacekeeping ..................................................................................................... 118

U.S. foreign policy priorities, better alignment of fiscal and human resources

with ....................................................................................................................... 132

United States-European Union hushkit dispute ................................................... 174

USIA and ACDA merger ......................................................................................... 157

War crimes tribunal ................................................................................................ 150

World Trade Organization and China ................................................................... 156

FEDERAL COMMUNICATIONS COMMISSION

Additional committee questions ............................................................................. 308

An affordable future: The fiscal year 2001 budget request .................................. 292

Back to the future .................................................................................................... 296

C-block licenses ........................................................................................................ 300

Cross-ownership rules ............................................................................................. 307

Excess regulatory fees ............................................................................................. 299

FM radio service, low-power ................................................................................... 302

Low-power reading services .................................................................................... 306

Mergers ..................................................................................................................... 303

Partnership for the future ....................................................................................... 291

Past accomplishments build a successful future ................................................... 293

Section 271 petition ................................................................................................. 305

Spectrum cap ............................................................................................................ 302

Technical staffing levels .......................................................................................... 299

Universal service ..................................................................................................... 304

SECURITIES AND EXCHANGE COMMISSION

Banking regulators, parity with the ...................................................................... 328

Commission, effect on the ....................................................................................... 327

Committee responsiveness ...................................................................................... 326

Decimalization ......................................................................................................... 332

Electronic market development .............................................................................. 330

International organization of securities commissions ........................................... 332

Internet:

And filing requirements ................................................................................... 331

And securities fraud ......................................................................................... 325

Fraud ................................................................................................................. 329

Resources for fraud enforcement ..................................................................... 329

The challenges of the ........................................................................................ 324

Introduction .............................................................................................................. 323

Opening remarks ..................................................................................................... 323

Proposals to provide relief ....................................................................................... 328

Recruitment .............................................................................................................. 327

Retention efforts ...................................................................................................... 327

SEC:

Approach ........................................................................................................... 325

Fiscal year 2001 budget request to OMB ....................................................... 330

Preparedness for cyber attacks ....................................................................... 332

Staff, pay parity for .......................................................................................... 330

Section 31 ................................................................................................................. 333

Staffing crisis ........................................................................................................... 326

The agency and its staff .......................................................................................... 328

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