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26–823pdf 2006

S. HRG. 109–667

FIELD HEARINGS FISCAL YEAR 2007

HEARINGS

BEFORE THE

COMMITTEE ON THE BUDGET 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

January 16, 2006—CHALLENGES IN ADDRESSING THE 

METHAMPHETAMINE CRISIS

June 1, 2006—BUDGET IMPLICATIONS OF MEETING VETERANS’ 

HEALTH CARE NEEDS

June 2, 2006—THE IMPACT OF FEDERAL FUNDING ON HIGHER 

EDUCATION

August 30, 2006—BUDGET IMPACT OF CURRENT AND PROPOSED 

BORDER SECURITY AND IMMIGRATION POLICIES

(

ii

COMMITTEE ON THE BUDGET 

JUDD GREGG, New Hampshire, Chairman 

PETE V. DOMENICI, New Mexico 

CHARLES E. GRASSLEY, Iowa 

WAYNE ALLARD, Colorado 

MICHAEL ENZI, Wyoming 

JEFF SESSIONS, Alabama 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

JOHN ENSIGN, Nevada 

JOHN CORNYN, Texas 

LAMAR ALEXANDER, Tennessee 

LINDSEY O. GRAHAM, South Carolina 

KENT CONRAD, North Dakota 

PAUL S. SARBANES, Maryland 

PATTY MURRAY, Washington 

RON WYDEN, Oregon 

RUSSELL D. FEINGOLD, Wisconsin 

TIM JOHNSON, South Dakota 

ROBERT C. BYRD, West Virginia 

BILL NELSON, Florida 

DEBBIE STABENOW, Michigan 

JON S. CORIZINE, New Jersey 

SCOTT GUDES, Majority Staff Director 

MARY NAYLOR, Staff Director 

iii

C O N T E N T S 

HEARINGS 

Page 

Jamuary 16, 2006—Challenges in Addressing the Methaphetamine Crisis ...... 1

June 1, 2006—Budget Implications of Meeting Veterans’ Health Care Needs .. 131

June 2, 2006—The Impact of Federal Funding on Higher Education ................ 181

August 30, 2006—Budget Impact of Current and Proposed Border Security 

and Immigration Policies ..................................................................................... 257

STATEMENTS BY COMMITTEE MEMBERS 

Ranking Member Conrad ................................................................................ 1, 131, 181

Senator Allard .......................................................................................................... 257

WITNESSES 

Kenneth R. Buck, Weld County District Attorney ............................................ 347, 349

Wallace Buckingham, Past Commander Department of North Dakota 

AMVETS ............................................................................................................... 176

Birch P. Burdick, Cass County State’s Attorney................................................... 28, 30

Paul Cullinan, Chief of Human Resources Cost Estimates, Cngressional 

Budget Office .................................................................................................... 288, 292

Tony Gagliardi, Colorado State Director, National Federal of Independent 

Business ............................................................................................................ 350, 352

Bruce Gjovig, Director and Entrepreneur Coach UND Center for Innovation ............................................................................................................................. 223

Gerald H. Groenewold, Director, Energy and Environmental Research Center, 

University of North Dakota ..................................................................................... 209

Bob Hanson, Commissioner, North Dakota Department of Veterans’ Affairs............................................................................................................................ 142

John D. Hanson, Member National Legislative Committee, Veterans of Foreign Wars of the United States ............................................................................... 166

Dr. Alice L. Hoffert, Associate Vice President for Enrollment Management, 

University of North Dakota ..................................................................................... 216

Helen Krieble, President and Founder, The Vernon K. Krieble Foundation..................................................................................................................... 353, 356

Karen E. Larson, Deputy Director of the Community Healthcare Association 

of the Dakotas....................................................................................................... 60, 65

Dr. Barry Milavetz, Associate Vice President for Research, University of 

North Dakota ............................................................................................................ 199

Governor Bill Owens, Governor, State of Colorado........................................... 268, 274

Paula Presley, Commander, El Paso County Sheriff’s Office........................... 343, 346

Robert Rector, Senior Research Fellow, The Heritage Foundation ................. 302, 306

Sebastian Roll, National Vice-Commander, The American Legion.......................... 155

Dean A. Ross, Valley City Chief of Police .............................................................. 36, 39

Dan Rubinstein, Chief Deputy District Attorney and Mesa County Meth 

Task Force Executive Board Member ............................................................. 339, 341

Wayne Stenehjem, North Dakota Attorney General............................................. 12, 16

Dan Stenvold, VVA ...................................................................................................... 172

Mayor Ed Tauer, Mayor, Aurora, Colorado ....................................................... 332, 335

Keith A. Ternes, Interim Chief of Police, Fargo Police Department.................... 32, 35

Warren Tobin, Past Department Commander of the Disabled American Veterans Department of North Dakota ........................................................................ 147

Logan Tong, Student, University of North Dakota ................................................... 235

Rod Trottier, BIA Police Chief, Belcourt, North Dakota............................................. 50

Karin L. Walton, Director of the North Dakota Higer Education Consortium 

for Substance Abuse Prevention...................................................................... 114, 117

Page

iv

Dr. H. David Wilson, Vice President for Health Affairs and Dean at the 

University of North Dakota ..................................................................................... 194

Drew Wrigley, US Attorney, Department of Justice ................................................... 23

Dr. Delore Zimmerman, President CEO Praxis, Inc. and Director, Coordinating Center of the Red River Valley Research Corridor.................................... 231

QUESTIONS AND ANSWERS 

Questions submitted by Senator Allard along with responses from Paul 

Cullinan ......................................................................................................... 364

Questions submitted by Senator Sessions along with response from Paul 

Cullinan ......................................................................................................... 369

(1)

CHALLENGES IN ADDRESSING THE 

METHAMPHETAMINE CRISIS 

MONDAY, JANUARY 16, 2006

U.S. SENATE, COMMITTEE ON THE BUDGET, Washington, DC. 

The committee met, pursuant to notice, at 2:03 p.m., in the Prairie Rose Room, North Dakota State University, 1401 Administration Avenue, Fargo, North Dakota, Hon. Kent Conrad, presiding. 

Present: Senator Conrad. 

Also present: Senator Dorgan. 

Staff present: Shelley Amdur, Peggie Rice, and Cathy Peterson. 

Senator CONRAD. Let me call this hearing of the Senate Budget 

Committee to order. Let me just indicate the rules under which we 

are proceeding. This is a formal hearing before the Senate Budget 

Committee. Are you able to hear? 

[Chorus of noes.] 

Senator CONRAD. Can you hear me now? Did that do it? 

[Chorus of yeses.] 

Senator CONRAD. Hallelujah. This is a formal hearing before the 

Senate Budget Committee and so we will operate under the rules 

of the Senate Budget Committee. That means we have a witness 

list that will be recognized for their testimony. We ask those in the 

audience not to register either agreement or disagreement with the 

statement of witnesses. And after we have had a chance to hear 

the testimony of witnesses, we will then open it up for those in the 

audience for their questions or their comments or if someone wants 

to provide additional testimony. 

I want to begin with the mayor of Fargo, Mayor Bruce Furness. 

Mayor Furness has been long active in the issues of taking on drug 

abuse and specifically the threat of methamphetamine. Mayor 

Furness. 

Mayor Furness. Power, there we go. Thank you, Senator Conrad. 

And my purpose is quite simple, simply to welcome you to our community for this hearing. This is a very important hearing and we 

thank you for having this hearing in our community and in our 

metropolitan area. Methamphetamine is a huge problem I think everybody in this room is aware of and that’s why we’re all here. It 

is somewhat discouraged of our society and you’ll hear expert testimony this afternoon about the situation here in our area. 

We’ve tried to take a proactive stance in this community. We had 

a—kind of a general awareness, kind of an open house situation, 

back in May of last year in which we had about 45 hundred people 

come and then we did that again in about 6 months later at the 

2

Fargo Dome in which we had about 5,000 people come, so I think 

it’s fair to say there is interest and concern among the general population about this problem. 

At those events, I was impressed with the number of young people that were there by themselves. I was impressed with the number of families that came together trying to understand this problem and just the general awareness and concern that people expressed at that time. 

It’s a cause of—methamphetamine is a cause of many of our 

crime problems in our city. It is tied to the homicides that we have 

had. It’s part of a public health problem as well as a police problem, and one of the issues that we have been working with as a 

city is the cleanup of meth labs, so once again it’s a huge, huge 

problem. 

It’s probably one of the most important hearings that you will 

conduct in this area. We’re making some progress, as I think will 

be explained by Attorney General Stenehjem, in terms of what’s 

going on in North Dakota and hopefully you’ll understand and have 

a much better appreciation of what the scope of this problem is in 

our community as a result of these hearings. So thank you once 

again for being here. We really do appreciate it. 

Senator CONRAD. Thank you so much. Mayor Furness, thank you 

for your leadership on these issues. I also want to recognize distinguished members of our audience who are with us today, including 

former Governor George Sinner. Thank you, Governor Sinner, for 

being here. 

Also, Judge Rodney Webb, U.S. District Judge. Thank you, Rodney. 

Senator Larry Robinson, State Senator Larry Robinson, who 

founded the Robinson Center, which is so important to recovery. 

Senator Judy Lee, Senator Richard Brown, Representative Kim 

Koppelman, Representative Kathy Hawken, Representative Pam 

Gulleson. 

We also have with us Tim Mahoney, a City Commissioner. I 

want to recognize all of them and thank them for being here. We 

also have with us Jeff Behrman, the resident agent in charge for 

the Federal Bureau of Investigation. Thank you for being here as 

well. 

There are many other distinguished people in the audience. I 

won’t go through all of them because of time, but I do want to 

thank everyone for participating in this hearing, and I think all of 

us understand the extraordinary threat meth represents to our 

family and to our communities and how important is it that we 

confront it. 

Let me indicate that the reason for this hearing is very simple. 

As we went through the legislative process last year, we soon saw 

that other parts of the country are not as sensitive to the meth 

threat as is the Midwest. We found, as we battled for resources to 

combat meth, that our colleagues, especially on the East Coast, just 

did not have the same sense of urgency that those of us especially 

from the Midwest feel. 

In talking to my colleagues, I was asked as a ranking member 

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ator Judd Gregg, the chairman of the committee, for allowing me 

to conduct this hearing. 

Just so you know, within the Senate that’s an unusual thing to 

have the chairman of the committee allow the ranking member to 

conduct a hearing. That is very gracious by Senator Gregg. He and 

I have had a very positive working relationship. He understands 

how serious the threat is to the people that I represent and indeed 

to the country, so I especially want to thank Senator Judd Gregg 

for this opportunity. 

I also want to thank my colleague, Senator Dorgan, for joining 

me here today, and after I have made an opening statement, he 

will make a statement as well, and then we will go to our first witness, and our first witness will be the Attorney General of the 

State of North Dakota, Wayne Stenehjem. 

With that, I want to welcome all of our witnesses today. This is 

an important issue, one that requires our urgent attention. Make 

no mistake about it, methamphetamine is a crisis. It is a serious 

problem in North Dakota and it is a growing problem across the 

country. 

In the Senate, I have worked on this issue for almost a decade. 

In 1998, I secured the inclusion of North Dakota in the Midwest 

High Intensity Drug Trafficking Area, making Federal antidrug 

trafficking funding available to our State. I also worked to prevent 

the elimination of Byrne Grants and convinced the Drug Enforcement Agency to open an office in western North Dakota. 

I have also supported prevention efforts and helped secure 4.2 

million dollars for Minot State’s Rural Meth Education Project, a 

project that Senator Dorgan has played such a critical role in pursuing. Most recently I helped create the Senate Antimeth Caucus 

to organize a bipartisan group of Senators. I am proud to say as 

of today, 48 of the 100 Senators have joined the Antimeth Caucus, 

but we all know more needs to be done. 

It really struck me as we went through the process this year of 

how some of our colleagues just did not see meth as an urgent matter. They recognized that it was a problem in more rural parts of 

the country, but they were not feeling the threat and so the importance of this hearing today. 

The Antimeth Caucus is focused on educating our colleagues 

about this critical matter in order to motivate them to act and to 

act now. The goal of this hearing is to explore the partnership 

among Federal, State, and local governments in combating the 

problems brought on by methamphetamine. In particular, we will 

explore what have the Federal, State, and local governments done 

so far. 

Two, what are the unmet needs in North Dakota? That is, are 

communities getting the resources that they need to combat this 

growing threat. 

Three, given the budget constraints at all levels, can we be 

smarter and more cost-efficient in our response. Over the past decade, the emergence of methamphetamine as an accessible, inexpensive, and highly addictive drug outside of urban areas is proven an 

enormous problem for large parts of the United States. Methamphetamine use has especially hit very hard rural communities. 

4

In a recent survey released by the National Association of Counties, 87 percent of the responding law enforcement law agencies indicated an increase in meth-related arrests compared to 3 years 

ago. In North Dakota, we saw a 91 percent increase in arrests.

Let us go to the second chart, if we could. Simply looking at the 

number of users or arrests doesn’t tell the whole story. The meth 

crisis has put an enormous strain on small communities and I have 

heard this all across the State of North Dakota.


26823.001
5

Law enforcement agencies are not only charged with tracking 

down manufacturers and users of meth, they are also impacted by 

increases in violent crime due to the violent tendencies of methamphetamine users and, by the way, I remember very clearly law 

enforcement people telling me their worst nightmare is to confront 

a meth user. 

Social services have increased case loads. The health care system 

is strained by treating meth users. The manufacturer of meth 

leaves behind a toxic stew of contaminants that continues to be 

dangerous long after production has stopped, and State and local 

corrections facilities face higher health care and other costs for incarcerating meth users and that doesn’t even begin to get at the 

human toll. 

Many of us have seen these before and after photos. They are 

stunning images of the physical damage caused by meth. Imagine 

what is happening to their bodies on the inside. These pictures are 

truly stunning, these before and after pictures. This one a year and 

a half after being on meth. A person is devastated. 


26823.002
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This person, 3 months after starting a meth addiction and this 

woman two and a half years later. Absolutely destroyed. 

That is not to say we don’t have challenges to overcome even 

though progress has been made. That is why we are meeting together here today. Here is some of the recent headlines from a 

North Dakota newspaper showing how serious this problem has become in our State.


26823.003
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26823.004
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One headline, ‘‘Busts fall but meth use high,’’ ‘‘Students’ drug 

use sobering, indeed,’’ ‘‘60 percent of jail inmates thought to be connected to meth.’’ Think of that, 60 percent of jail inmates connected 

to meth. ‘‘Task force losing one officer in 2006.’’ On and on it goes, 

stories of vicious assaults by meth addicts.


26823.005
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Congress has repeatedly overcome opposition to funding many of 

the programs that State and local governments have told us are 

important to combating meth. Let me just go over in 2005 Byrne/

JAG funding was at 529 million dollars. The President’s request for 

1906 was zero. 

The COPS Program was funded at 499 million dollars in 2005, 

the President recommended lowering it to 22 million dollars. 

Juvenile Justice Programs funded 359 million dollars in 2005, 

the President proposed no funding. 

Drug courts were at 42 million dollars in 2005. There the President proposed an increase to 70 million dollars. 

Weed and Seed, 61 million in 2005, the President proposed just 

about that amount. 

High Intensity Drug Trafficking Areas funded at 227 million in 

2005, the President proposed cutting it by more than half. So the 

total in 2005 we were at 1.7 billion dollars. The President recommended cutting that to 252 million. Congress did not accept the 

President’s recommendation, instead funded these programs at 1.4 


26823.006
10

billion dollars, still less than 2002 but far more than the President 

proposed.

Let me just say this is a matter that involves all of our communities. I have been in towns where people have told me their own 

child have been diagnosed as meth addicts and people have told me 

it is destroying their families. I take this as seriously as any threat 

to our State that we see now or even on the horizon. 

Over and over people have come to me across North Dakota, people in law enforcement, people who have tried to deal with addicts 

through treatment, others in the community, just concerned citizens who have said they are appalled by what they are seeing. 

Last night I was in Grand Forks, North Dakota, and people told 

us that in the community they are seeing children virtually abandoned by parents who are meth addicts. Situations in which kids 

had to go to the neighbors to get something to eat because there 

was no food in the refrigerator and their parents were not parenting. 

People told us last night in Grand Forks you have to share the 

message here of how serious a threat this represents to our comVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 C:\DOCS\26823.TXT SBUD1 PsN: TISH

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munities and to our families and really that is what this hearing 

is about, to try to communicate to our colleagues how serious this 

is and that we must take more aggressive steps to confront it. 

With that, I want to call on my colleague, Senator Dorgan, for 

his opening statement. 

Senator DORGAN. Thank you very much and thanks to all of you 

for being here. I think the point with respect to Senator Conrad’s 

hearing, and I am pleased to join him, is the first step in determining the resources available to address these issues. 

The first step is in the development of the budget to find out how 

much in resources will be devoted to which functions, and in the 

U.S. Senate the two people that are key to that are the chairman 

and the ranking member and that is Senator Judd Gregg and Senator Kent Conrad, and so it is appropriate, especially in January 

as we begin to think about the budget process where our Senator 

will play such a key role, think about the resource needs and what 

we need to do, particularly in rural States, to address this issue 

and so, Kent, thank you for the priority on this. 

Let me just mention that meth, as most of you know, is what’s 

called a synthetic stimulant. It is distributed under many different 

names, crank, speed, crystal, sold in powder perform commonly but 

it has been distributed in tablets or crystals as well. 

Meth was originally synthesized by the German and used by the 

Nazi regime for the Luftwaffe pilots, among other things, and also 

to provide to German soldiers to create more aggressiveness. 

Addiction to meth sets in after only a few doses. In fact, meth 

hooks about 40 to 60 percent of the first-time users and that describes how deadly this drug is. Forty to 60 percent of the first-time 

users are hooked on this drug and the relapse rate for meth addicts 

that undergo treatment is somewhere between 70 and 80 percent. 

Meth users are essentially ingesting a poison. They become paranoid, they become violent. Their teeth fall out. They cannot stop 

using. Nobody knows more about this than law enforcement because they see it every day and every night and they confront it. 

The Department of Drug Enforcement, the DEA, Drug Enforcement Agency, at one point we had a forum here in North Dakota. 

Senator Conrad and I and Congressman Pomeroy have worked to 

create at Minot State University a Rural Methamphetamine Education Demonstration Program and it has been very successful over 

now about 4 years and to begin developing outreach, not only for 

information but for law enforcement training. 

As we did that, we had a forum with Dennis Whitaker, who is 

a senior DEA official, Drug Enforcement Agency official, and he 

came to North Dakota to talk about this meth crisis and he 

brought some pictures along that I, too, will show you a series of 

pictures of one woman and it left quite an impact on me. 

I know that the Attorney General was there and others of you 

were there as well, but let me show you a woman who during 7 

years of taking meth. This is from the Drug Enforcement Agency. 

This is a woman in Florida. She began taking meth at about this 

point and was arrested and let me show you the second photograph. 

The second photograph is about half a year later, and let me 

show you the third photograph. And, finally, the fourth photograph 

12

and the fifth photograph and the last photograph. This over a 7-

year period a woman addicted to methamphetamine. It destroys 

lives. 

The interesting thing about this deadly drug is that rural areas 

are seeing this drug move in very quickly. In North Dakota, I believe we have found people cooking methamphetamine in ice fishing houses, in abandoned farm homes. We have rural areas where 

not many people live and there are abandoned buildings, and law 

enforcement finds that that is conducive to people who want to go 

someplace out in a remote area and cook some drugs. 

Aside from marijuana, meth is the only widely abused illegal 

drug that can be easily produced by the actual abuser. And my understanding is about $100 worth of materials can cook about $1,000 

worth of methamphetamine and so this started very quickly in 

rural States. 

And in North Dakota in 1999, not many years ago, there were 

17 meth lab busts in North Dakota. 2004 is the last year for which 

I have figures and perhaps the attorney general can update us on 

that. 1999, 17 meth lab busts in our State. In 2004, 260 meth lab 

busts in our State. 

And I think that the map that Senator Conrad has included on 

the big screen shows what has happened in rural States, large 

States, States where you have rural populations widely distributed, 

and the movement of the production of methamphetamine and, 

therefore, the addiction to methamphetamine into those very areas. 

So let me conclude again by saying I think it is really important 

to have the first step in the process in the Congress, that is the 

budget step, to determine priorities, for Senator Conrad to host 

these hearings. Because if we don’t get the priorities right at the 

first step, law enforcement does not have the resources in the subsequent steps throughout the year to do the drug busts, to deal 

with the drug addiction, to do all the other things necessary to address this problem so, Senator Conrad, thank you inviting me here 

with you today. 

Senator CONRAD. Thank you, Senator Dorgan. I appreciate very 

much. I will call the first witness, who will be Attorney General of 

North Dakota, Wayne Stenehjem. Wayne Stenehjem has a long history of public service in North Dakota. He served in the North Dakota House of Representatives, he was a State Senator, elected Attorney General of the State of North Dakota. He has been very focused on the methamphetamine threat in North Dakota. 

A number of months ago when we were deciding to hold this 

hearing, I talked to the attorney general and asked if he would be 

the lead witness to help make the case of how serious the threat 

is and very graciously he agreed so, Attorney General Stenehjem, 

thank you very much for being here today and please proceed. 

STATEMENT OF WAYNE STENEHJEM, NORTH DAKOTA 

ATTORNEY GENERAL 

Mr. STENEHJEM. Thank you very much, Senator Conrad and also 

Senator Dorgan, for being here. I want to tell you before I commence that I appreciate the opportunity. We’ve all had to visit 

about this problem and the issues as it affects North Dakota both 

in—here in North Dakota and on visits out to Washington. 

13

I know you understand the extent of the problem here. I hope 

that through the Meth Caucus that you will succeed in helping to 

get the same information out to your colleagues, because I think 

there are some of them who really do need to become aware of the 

extent of the problem. 

North Dakota is in the midst of a methamphetamine crisis. In 

a relatively short period of time, this extremely addictive drug has 

ruined the lives of thousands of men, women, and children in 

North Dakota. The devastating effects of meth are evident even in 

the smallest communities, and the impact of meth addiction is 

being felt across the State, stretching thin the budget of both local 

and State government agencies. 

You, Senator Conrad and Dorgan, have mentioned the statistics 

in North Dakota. You can see them on the chart behind me. I think 

it should be possible to see it. In 1997 is when we had our first 

meth lab in North Dakota and in 2003 we were up to 297. 

The impact on State resources has been overwhelming. For instance, in 2004, the North Dakota Department of Corrections reported that over 60 percent of the inmates at the penitentiary were 

either addicted or at least had used methamphetamine. We had to 

build a new women’s prison in southwest North Dakota to deal 

largely by and large, overwhelmingly, with meth addiction. 

What has North Dakota done to combat methamphetamine? The 

State has added three criminal investigators at the Bureau of 

Criminal Investigation and one forensic scientist position at the 

North Dakota Crime Lab, both of which are part of my office, increasing my agency’s budget by more than $513,000. 

We introduced the North Dakota Retailer Meth Watch Program 

to train retailers to help identify suspicious drug-related purchases. 

Implemented the Commission on Drugs and Alcohol Abuse, to 

study substance abuse in North Dakota. After a series of public forums across the State, and studies involving State, local, and tribal 

agencies, the commission recommended more aggressive laws to restrict precursor ingredients, additional options for addiction treatment, enhanced criminal penalties, protections for children exposed 

to controlled substances, and an appropriation to reimburse specialized SWAT teams. 

We enhanced criminal penalties; for example, child 

endangerment, brought felony penalties for exposing children to 

meth, to the meth manufacturing process. 

We’ve expanded the definition of deprived child to make it easier 

to remove children from dangerous homes. 

We provided mandatory prison terms for armed drug offenders, 

made it a criminal offense to ingest controlled substances. 

Treatment is the second prong. We provided flexibility under 

group insurance plans for treatment needs that are unique to meth 

addiction and provided mandatory treatment of up to 18 months 

for first-time drug offenders in lieu of a criminal sentence, which 

is a program awaiting Federal grant funding which has been up 

until now denied. 

We’ve provided coordination at the local level of treatment providers and State and local agencies who address the unique needs 

of children exposed to the manufacture and use of meth in their 

homes and to bring children [sic) to justice. 

14

One of the unique things that we have done in North Dakota 

that has yielded positive results, perhaps the first good news we’ve 

seen, is the restriction on pseudoephedrine. Pseudoephedrine is the 

key ingredient in many cold medicines. It’s the one ingredient you 

have to have to manufacture methamphetamine. 

We restricted products and require that they be kept behind a 

counter or that only one package be displayed and that under constant video surveillance. The purchaser has to provide identification. They can buy no more than two grams of the product in a single purchase and it includes the liquid and the gel-caps as well. 

Purchasers must be over 18 and they have to show, as I mentioned, a government-issued ID card and the retailer has to maintain a log of each purchase and show it to law enforcement when 

they come to ask for it. 

I want to show you, if I could go to the next chart, the dramatic 

impact we have seen in North Dakota’s meth lab problem as a result. This is where we were headed. The red chart, the red bars, 

show where we were in 2004. We were on our way to yet another 

record year of meth labs, probably over 360, about one meth lab in 

North Dakota every day. 

Then on June 1, our new law took effect and, Karin, if you will 

show the next. The new restrictions took effect and the result was 

immediate and dramatic, and you can see that the number went 

down in the first month by 62 percent. By November and December, we had one and two meth labs in the entire State in those 

months respectively. The result shows that we can reduce and the 

reductions are better than 90 percent. 

States have not—States that have not enacted restrictions on 

pseudoephedrine precursors have experienced a disturbing new 

trend, meth cooks traveling from restricted States to buy or steal 

the pseudoephedrine they need to keep cooking meth. 

In fact, that is exactly what happened in western Minnesota 

after North Dakota’s first law took effect. Cooks in Grand Forks, 

Fargo, and other communities in North Dakota simply crossed into 

Minnesota, South Dakota, Montana and, yes, to Canada to buy or 

steal what they needed to keep cooking. 

But home-grown meth labs are only a smart part of the problem. 

In fact, approximately 90 percent of the meth in North Dakota 

comes from out of State, not from these local meth labs. They come 

from ‘‘super labs’’ in California and Texas, for example, and increasingly especially from outside the United States, particularly 

from Mexico. Our drug agents and local law enforcement agencies 

are working to stem the flow of meth coming into the State. 

The Federal Government’s assistance and support in our fight 

against meth is essential. In particular, the need to change both 

the funding levels and the allocation formula for the Edward Byrne 

Memorial Justice Assistance Grant is crucial. 

In fiscal year 2004, North Dakota received a total of 2.4 million 

dollars under Byrne Grant and LLEBG funds. Under the JAG program, which was the combination, North Dakota in 2005 received 

just 1.2 million dollars. 

And for fiscal year 2006, North Dakota will receive only 

$730,000. As a result of combining these two programs into JAG, 

North Dakota has seen a 70 percent decrease in funding. This reVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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duction will dramatically affect our ability to keep our nine tasks 

forces across the State operational, and I know the two Senators 

know this but I mention it because I want it in the record as we 

have worked on this, but I want it emphasized in the record that 

this is the impact that it is having in North Dakota. 

Not only are funds reduced but the JAG formula allocates half 

of the funds based on population and the other half based on crime 

statistics. The formula, therefore, penalizes low-population States 

like North Dakota that have successfully kept violent crime rates 

low. It is imperative that both the funding level and the formula 

be changed to ensure that the basic needs of rural States like 

North Dakota are met. 

As a result of the dramatic increase in meth activity in North 

Dakota, High Intensity Drug Trafficking Area funds have been 

used to bolster our ability to fight meth. Historically, our State has 

received approximately $575,000 annually to partially support the 

work of investigators, forensic scientists, and a prosecutor. 

The solution to the meth problem in this State and across the 

country is a continued partnership among Federal, State, and local 

resources. The most important steps to combat the methamphetamine manufacture and use are as follows in my opinion: 

Enact nationwide restrictions on sales of pseudoephedrine precursors. I know there is legislation pending. It was originally part 

of the Patriot Act that ran into the obstacles that it did, but I’m 

told that that legislation will be given priority early on this year. 

I can’t overemphasize that in the States that have enacted restrictions like we have, Oklahoma, Iowa, you name it, they’ve all seen 

similar reductions in the number of meth labs. 

Address the importation of meth and meth precursors from outside the United States. We can’t do that here in North Dakota. A 

lot of—the bulk of the pseudoephedrine comes from southeast Asia, 

works its way up into Mexico. Only the Federal Government can 

deal with it on that level. 

And, finally, fully fund the Justice Assistance Grant, including 

an appropriations floor, for rural States such as North Dakota. 

Again I appreciate Senator Conrad here, coming here for this important subcommittee meeting in North Dakota, and I look forward 

to continuing to work with you to tend the tide of this horrible, horrible drug. 

[The prepared statement of Mr. Stenehjem follows:]

16


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Senator CONRAD. Thank you very much. Let me just start by 

asking you the question that we get from our colleagues, who have 

been opposed to Federal resources or those who have advocated 

deep cuts. They say to us look, Senator, this is not a Federal responsibility. This is a matter for State and local law enforcement. 

This is a State and local problem and State and local units of government have to produce the resources to combat. The Federal 

Government has big deficits, growing debt. 

And the other point they make is, look, we put this money out 

across the country and some law enforcement has used it to buy 

new leather jackets and they have used it to buy equipment that 

was seen as unnecessary. What would you say to those who make 

the argument this isn’t a Federal obligation? 

Mr. STENEHJEM. It is a Federal obligation and it’s a partnership, 

as I mentioned. The State and local agencies have invested enormous amounts of money from law enforcement, additional personnel, to the prisons, to the treatment programs, to the foster 

homes where children are increasingly being found in homes where 


26823.011
20

meth is being manufactured or used. Those have strained State 

and local resources to the breaking point. 

The Federal Government has a responsibility as well. This is a 

problem of national significance, both because of the importation of 

the drugs from outside the United States but because we’re all in 

this problem together, and the key thing that any government is 

obliged to do is to take care of the safety of its citizens, and that 

means that all of us must work together to make sure that we 

make this—this State and this nation as safe as we can, and that 

means eliminating the scourge of all drugs and in particular this 

one. 

Senator CONRAD. Let me ask you the second part of the question, 

which is the assertion by some that money has been used by the 

States in an inappropriate way. Can you tell us how in North Dakota Federal funds have been used? 

Mr. STENEHJEM. I certainly can and I’m proud of the way that 

we have invested that money in North Dakota. None of it has been 

wasted. We used the bulk of the Justice Assistance Grant in North 

Dakota for a variety of things, but one of the chief things that we 

do is to fund the nine narcotic task forces that exist all across the 

State of North Dakota and that makes probably 90 to 95 percent 

of the drug arrests that are made. 

We have a track record that I think is exemplary and typical of 

what—the way all North Dakotans are. Our law enforcement officers work hard. They work overtime and are dedicated to their mission and I do not see, nor have I heard any talk in North Dakota 

of, any of the funds that have been utilized here being wasted. I 

think we invested wisely and spent it appropriately. 

Senator CONRAD. To your knowledge, has any of this funding 

been used for office parties, as has been an allegation? Has any 

money been used to buy new leather jackets for troopers or police 

officials? To your knowledge, has any of this money been used in 

a way that could be held up to ridicule or questioned as wasteful? 

Mr. STENEHJEM. If that were the case, Senator, it certainly 

would have been brought to my attention and I would have taken 

action. Just the opposite is true. I know of a number of law enforcement officers who work overtime—who work overtime in ways that 

is not compensated because they believe that they need to get a 

handle on this problem. I couldn’t be prouder of the local and State 

law enforcement officers that we have. I have never heard anything 

but good comments about the hard work that they do. 

Senator CONRAD. How much money, Mr. Attorney General, do 

you believe should be on the Federal Government’s shoulders to 

provide in this fight in a State like ours? If you were going to give 

a ballpark estimate of what are the resources necessary to effectively combat the scourge of meth in North Dakota, what share of 

that should come from the Federal Government? 

Mr. STENEHJEM. Well, for openers what I would like to see invested in North Dakota is the 2.4 million dollars in the Justice Assistance Grant that North Dakota has historically received. That 

would be a good start. We also are going to need Federal assistance 

in treatment programs, because those are very expensive, and 

while they can be successful, the typical 30-day intensive outpatient treatment mode doesn’t work so well for meth. You need to 

21

have long-term residential or at least closely supervised treatment 

program. I don’t have a figure for that. 

If I walked out of here with a commitment that the U.S. Congress would appropriate the $2.3 million dollars that we have historically received under the JAG funding, together with continued 

involvement with the HIDTA program, I would be pretty happy. 

Senator CONRAD. Let me ask you this. In terms of the High Intensity Drug Trafficking Areas, has that funding been important to 

North Dakota? 

Mr. STENEHJEM. It has been essential to North Dakota. As I 

mentioned, we fund our agents and chemists at the State crime 

lab. Understand that when you make an arrest you also have to 

prove the case when you get into court and that means you need 

to have scientists, and I’ll tell you that the forensic scientists at our 

crime lab are overstretched. They are working on a serious back 

lab log. They work overtime as well simply to produce the information that we need to get into court and so then also one prosecutor, 

who works in conjunction with the Federal system and also is employed directly by my office. 

Senator CONRAD. And how much money are you getting under 

the High Intensity Drug Trafficking Areas? 

Mr. STENEHJEM. I think it’s about $535,000. 

Senator CONRAD. And if you were told that you were going to 

face a cut of more than half in that program, which is what the 

President recommended, what would be your message to those who 

might think that was a good idea? 

Mr. STENEHJEM. Well, the message is the message I’ve told you 

on several occasions. We need them. These are—and I’m not asking 

simply for the Federal Government to come in here and take care 

of all of the funding for our program. We have invested mightily 

here in North Dakota on all the levels that I had talked about. 

We’ve stretched our resources to the breaking point. We’re only 

asking that the Federal Government also be a part of the partnership. 

Senator CONRAD. Do you have an estimate of how much the 

State is spending to combat meth? 

Mr. STENEHJEM. Well, the amount that the State of North Dakota is spending—spends on all drugs is well in the hundreds of 

millions of dollars when you talk about the penitentiary, the treatment program, social services. You know, you name all of those 

things, the price tag is enormous. 

Senator CONRAD. I want to thank you. I think it’s very important 

to get this on the record. Senator Dorgan. 

Senator DORGAN. Just one question. Are there any circumstances 

or is there significance to our international border with respect to 

the movement of materials for the purpose of producing meth? 

Mr. STENEHJEM. There’s no question that in my mind that the 

poorest border both on the north and the south of the United 

States is a prime place where drugs can be brought across. There 

are—and I know, Senator Dorgan, you’re well aware of this. You 

can go 50 to 60 miles between—between border entry, legal border 

entry, stations, and I have no doubt certainly here in North Dakota 

and I know for a fact in Idaho and Washington high-tech operations exist for bringing drugs in from outside the United States. 

22

Senator DORGAN. But let me ask you specifically about Canada, 

because we share the long border with Canada. You talk about the 

action taken here in the State legislature in North Dakota. Have 

our neighbors to the north, have the providences, taken similar action and, if so, can you describe it? 

Mr. STENEHJEM. Yes. After we enacted our legislation in North 

Dakota, I traveled to Regina and to Winnipeg. In Regina, the premier had a four-providence task force meeting to talk about this 

very problem. I also went to Winnipeg to talk to my counterpart 

from Manitoba and to tell them that what I suspect will happen 

if they do nothing, is what happened in Minnesota and in Montana 

and South Dakota, our cookers will travel there to buy the precursor ingredients or, worse, our cookers will simply move up there. 

And I suggested to them that they would be wise in looking at 

what we did and as a result they did. They have enacted restrictions in Saskatchewan and Manitoba that I know of specifically. 

Senator DORGAN. Thank you very much. 

Senator CONRAD. Let me thank the attorney general. Thank you 

for your testimony. 

Mr. STENEHJEM. My pleasure. 

Senator CONRAD. Thank you also for your advice to us and others 

who might testify here today. We certainly appreciate the effort 

that you went through to be of assistance to us. 

Mr. STENEHJEM. My pleasure. Thank you, Senator. 

Senator CONRAD. Thank you. 

I want to call the second panel: Drew Wrigley, the United States 

Attorney for North Dakota; Birch Burdick, the State’s Attorney for 

Cass County; Keith Ternes, the Assistant Chief of Police in Fargo; 

Dean Ross, the Chief of Police for Valley City; and Rod Trottier, 

the Chief of Police for the Bureau of Indian Affairs stationed in 

Belcourt. 

While they are coming to the witness table, I also want to acknowledge the presence of Senator Carolyn Nelson. Senator for 

Nelson is here. Thank you. The West Fargo Chief of Police, Arland 

Rasmussen, is here as well. I am told that Gary Wolsky, the CEO 

and President of Village Family Services is with us; Peggy Gaynor, 

the Director of Counseling and Disability Services at NDSU; Larry 

Anenson, the Health Educator here at NDSU; Gary Fischer, the 

Director of the NDSU Wellness Center. Welcome. 

Barbara Lonbaken, the Associate Dean for Student Wellness; 

Kathy Thoreson, the Vice President of Family Services of Lutheran 

Social Services of North Dakota; Bill Lopez, the Executive Director 

of ShareHouse Substance Abuse Treatment Center; Andi Johnson, 

the Director of Operations at ShareHouse; Connie Stevens, the Program Director of ShareHouse; and Grant Benjamin. Is Grant here? 

I believe Grant was here as one point. Grant is the DARE Officer 

at Discovery Junior High and somebody who has been a very good 

advisor to us with respect to these issues. 

With that, I am going to turn to our witnesses. Drew Wrigley has 

been the U.S. Attorney for North Dakota since 2001. He’s been on 

the prosecuting side of this issue and has special perspectives that 

the committee is eager to hear. Welcome, Mr. Wrigley. 

23

STATEMENT OF DREW WRIGLEY, U.S. ATTORNEY, 

DEPARTMENT OF JUSTICE 

Mr. WRIGLEY. Thank you, Senator. Nice to be here. Well, thank 

you, Senator Conrad and Senator Dorgan. If I could I am going to 

start out, if I might, by reciprocating the invitation to be here 

today to invite you to our offices at some point either in Fargo or 

in Bismarck to meet with our staff, and we would like to show you 

around over there. I know you’ve been there in the past, but I 

would like to extend that. 

We had Representative Pomeroy come by here in the last year; 

and so when it works out. I know you’re busy when you’re here, 

but when it works out to stop by for coffee, we would like to have 

you, my staff and I. 

So thanks again for the opportunity to sit down with you today 

and discuss our perspective in the U.S. attorney’s office. As you 

know, there was some wrangling last week about whether I could 

have a statement or not and apparently I can’t have a statement, 

so I have some note cards instead. I’m going to discuss those points 

and then I’m going to kind of cut it short because I would like to 

answer whatever questions that you have, but we do appreciate the 

opportunity. 

Our perspective is a little different sometimes as a Federal prosecutor and that makes sense when you look at sometimes the perspective of a neighborhood versus the city versus the State versus 

a region and then nationally, of course, it’s going to be different. 

Just last week there was a round-robin discussion between the 

U.S. attorneys—oh, I’m sorry. How is that? Is that better? OK. Just 

last week there was a roundtable discussion with the U.S. attorneys on the e-mail. All 94 of us were going around talking about 

what is the No. 1 drug problem in your district? I said districts. 

Some States, like Oklahoma, have three. Here in North Dakota it’s 

one but so we refer to them as districts. 

And it was different across the country, and I think your map is 

very telling for a couple of important reasons. One is: you look at 

the gray area there, heroine is still the No. 1 narcotic being trafficked in those areas, and then you see the red where methamphetamine by and large—and this follows very closely, by the way, the 

discussion we had with U.S. attorneys. 

I think if you look to some of these, Minnesota, I think if U.S. 

Attorney Tom Heffelfinger were here right now he would say, hey, 

we’re turning red and if Michigan—I’m sorry, if Wisconsin were on 

there, half of the State would say we’re turning red and the eastern 

half would say cocaine and crack still, so this is a—I think a very 

accurate representation, but it’s changing. I know there’s a reference that you understand that as well. 

One thing I would like to point out wherever I talk and address 

these issues that overall I think we need to keep focused on that 

we’re fighting with addiction, not meth addiction but just addiction 

of any kind, and that marijuana and alcohol remain far and away 

the most addicted substances that we deal with, maybe not most 

addictive but the most prevalent substances we deal with. They do 

the most damage here in North Dakota and around the Nation and 

we have to remain focused on that issue because there is a different perspective in each pocket around the country. 

24

And so in North Dakota right now we’re experiencing this and 

there’s no questioning it, but I always call on people ‘‘don’t forget.’’ 

I—sometimes you’ll hear people say, well, at least I found out this 

about my kid, but I’m so thankful that he’s just using marijuana, 

but then they go to the next step. 

I see Mayor Furness here. You and I have spoke about this issue 

many times. We have to remain focused on the fact we don’t want 

our young people to be addicted. We want them to stay away from 

dangerous substances and I appreciate that we’re talking about 

methamphetamine here today, but I always let people know there’s 

hope on this narcotic and others. There’s a lot of hope and there 

are times that I talk to people and you think they think, you know, 

4 weeks from now everybody—I’ll use Mayor Furness as my example—everyone will be using because it’s so addictive. 

It’s as though Mayor Furness is going to be using methamphetamine. Well, it is very dangerous. It needs to be addressed, but 

people need to recognize that there is hope. 

Right now in the United States 5 percent of the population, 5 

percent of the population, will say that they have ever tried methamphetamine. Point 3 percent of the population will say that they 

are—they have used methamphetamine in the last month. 

That’s a scary statistic when you look at all the people that represents and the danger they are to law enforcement and we all 

know that well, but it offers hope when we have gatherings like 

this. 

I had a conversation, Senator Conrad—I don’t like to admit this 

very often-—with your chief of staff a couple years ago. We were 

chatting about this issue and I’ve spoken with Senator Dorgan, 

yourself and members of your staff on the issue to say: what kind 

of things can be done? And let me complement you. 

This is the kind of thing to raise the awareness to let people 

know that it’s a serious issue and then to speak credibly on it so 

that we aren’t trying to scare people into thinking like I said about 

the Mayor Furness example, but they know that there can be hope. 

They should gather hope from these numbers and the light that 

you shed on it. I appreciate very much and I’ve appreciated the 

conversations with you and with your staff over the last couple 

years and so those statistics are there and they are real. We need 

to talk about those numbers. 

Other numbers that we need to talk about, I think, are the meth 

lab numbers. They are troubling in North Dakota and anywhere 

else because of the ecological damage that can be done. They are 

troubling and—and people that are engaged in public policy in our 

State that need to be aware of them, but we need to be aware of 

the fact that in North Dakota a couple of years ago when we were 

in the hundreds of labs, people in the front lines of law enforcement would say maybe 5 percent of methamphetamine is made in 

North Dakota. 

Now they will say, almost universally they tell me, maybe 2 percent of methamphetamine being used in North Dakota is made in 

North Dakota. States like Missouri had a point when they were 

saying 40 percent of the methamphetamine is being made in Missouri, so they have much larger labs. Now, though, you’ve seen a 

major shift. 

25

In the last years since I became U.S. attorney in November of 

2001, I have not seen a single case, not one significant trafficking 

case that we have prosecuted, not one, where the methamphetamine was being made in North Dakota. It is a trafficking problem. 

People are bringing large quantities of methamphetamine into 

North Dakota from outside. A significant problem. 

And—and Birch and the chiefs and on down the line they can tell 

you about the problem being on the receiving end of that. It’s no 

less dangerous, but we need to be talking about those facts for 

what’s going on in the State and so I commend the State folks who 

have been addressing the issue because it is so dangerous. 

I think there was an explosion and fire in Grand Forks just in 

the last 5 months. It’s very dangerous in apartment buildings or 

hotels where the people are making methamphetamine. 

I just want to be sure we’re clear, though, about the quantity 

that is being made in the State of North Dakota, so it’s an important issue but maybe for a little different reason than some people 

might imagine. 

I’m glad that Mr. Burdick is here today. We worked hand in 

glove on so many issues, whether it’s firearms, Internet crime, 

child pornography. And narcotics is no different for our offices and 

the other State attorneys around the country. 

Just so everyone is aware, if a person—in the State of North Dakota, you have 53 State’s attorneys offices and you have one U.S. 

attorney’s office. It becomes incumbent upon us to work well with 

our—to play well in the sandbox and it’s those relationships that 

we enjoy very much. 

If I’m painting broad brush, the difference might be dealing with 

retail level narcotics trafficking and use and then wholesale level. 

People bringing in massive quantities. We like to think of those 

cases as coming more within the view of the Federal Government 

and U.S. attorney’s offices. But it wouldn’t be possible if the State’s 

attorney’s offices weren’t working selflessly on the issues and they 

say hey, Drew, we heard about this case. Contact the people in Bismarck, contact the folks in Fargo to say we’re working on this case 

and we think this one might want to be kicked up a ways. 

Most cases will begin with the initial contact of—by a prosecutor 

of some low-level confidential informant, the next the execution of 

a warrant and some person sitting there and they’re scared out of 

their mind and they’re talking to Keith Ternes. He’s nasty and so 

they say I want to cooperate. I want to help. 

And that’s where most—the most important thing happens. Because if we’re looking at a 95 to 98 percent problem with trafficking, we have to go up that food chain and that’s only possible 

if the local and State authorities are focused on doing just that, as 

opposed to making a case themselves, sometimes saying let’s get 

the feds involved in this, let’s get it to grand jury. 

And that’s one thing I want to talk about. The grand jury process 

has been critical. It is imperative to getting people to come into the 

grand jury to testify under oath. Sometimes they’ll say ‘‘I’m not 

going to testify.’’ ‘‘There’s nothing you can do’’ and then we say, 

‘‘well, there is actually—we’re going to immunize you and then you 

have to go talk to Judge Webb if you decide you still don’t want 

to testify;’’ and that’s unpleasant. 

26

In the last years we’ve prosecuted, I think, something along the 

lines of four times the number of perjury and obstruction of justice 

cases of people refusing to testify in the grand jury or lying in the 

grand jury. Those are things that, you know, people don’t get too 

excited about that. Sometimes they feel bad. Make the guy’s, you 

know, aunt testify again them? Yes, we did. 

We’re going to do everything we can to exert pressure on people 

to testify about these organizations that they have knowledge of. 

That’s been a critical component in the Federal response to these 

drug trafficking organizations, getting the people with some knowledge to go forward and give up the information, so that we can 

take the case out to California, to Washington, to Oregon and 

where they are producing large quantities of methamphetamine. 

That’s the grand jury. 

Another thing that happens important in the Federal cases is 

that we see things are designated as OCDETF. I know the Senators are certainly familiar with that. That’s a federally funded 

program that we sort of hang our hat on. 

Every significant trafficking organization that we prosecuted in 

the last years is a case that Jeff Behrman, his troops around the 

State and others, have made into what we call an OCDETF case. 

That’s a click-in that says now it’s been designated as OCDETF. 

It’s done on a regional basis out of St. Louis but there are also 

State and locals involved with whether we are going to designate 

a case as OCDETF. 

Once it is, then the OCDETF program’s funded federally and 

that’s I know a separate little discussion here but it’s—we need to 

discuss everything. That pays the overtime. That’s going to pay the 

other costs associated when we have agents flying out to Washington working with the authorities out there or if they are flying 

out to California, wherever, Nevada. You know, those costs all 

come from the OCDETF funding, so if those matters come before 

you, I don’t know. 

We discussed—I can’t discuss budget matters that—except to say 

OCDETF has been critically important on some of the cases. I 

would be glad to answer questions, if you have, about particular 

cases but that then relieves the State and locals from having to pay 

overtime for their folks and travel, and also it puts with them the 

purview of Federal authorities where I think the use of grand jury 

and then just our—our multiregional and multijurisdictional approach of being able to work with the other U.S. attorney’s offices 

throughout the county can all be kicked in to address what I think 

is really the white elephant in the room, the large trafficking organizations. 

I have several examples. Like I said, I would be glad to get into 

them if they become relevant as we go along. I think it’s troubling 

as you look in the last years, not only in the narcotics cases, as 

Federal prosecutors we have tripled as far as number of defendants. We have tripled the number of defendants prosecuted in the 

last 4 years federally. 

Now, I know that doesn’t say, well, drug traffic has tripled in 

North Dakota. I think we brought more of those cases into the Federal system through the cooperation of our State prosecutors and 

27

we have brought more of them in, and so I know that that doesn’t 

address overall but, nevertheless, that number is there. 

That’s tripled the significance and we’ve had in those years the 

first ever Federal mandatory life sentences for drug traffickers. It 

is not—it’s not a day that people sit around the office giving highfives when a 26-year-old drug dealer goes away for the rest of his 

life. We have convicted the person, but it’s sobering, but it’s necessary. 

Those are cases that we think have had an impact and we want 

to do everything that we can to increase the price of narcotics in 

North Dakota, not only as monetarily but also the price of doing 

business as a narcotics trafficker in North Dakota. Because, after 

all, it should be all of our objectives to create the market forces 

that will impose a recession and then ultimately a depression in 

narcotics trafficking in North Dakota. 

I’m naive enough to think that that’s a real possibility, not just 

because we live in a—you know, somewhat more of a rural, quiet 

setting but because we have excellent cooperation between Federal, 

State, and local authorities. That’s been critical, I think, in the last 

years. 

One last thing if I might, Senator. I don’t want to filibuster this 

thing, but I would—I would point out one other disturbing trend 

and that’s the use of firearms and the presence of firearms in so 

many of our cases. The Congress has funded—just one thing I will 

say. The Congress has funded Project Safe Neighborhoods in the 

last years and that has been critically important. 

I saw again this year just the other day that that number is significantly enhanced. I couldn’t give you the percentages, but we appreciate that. Those dollars go to work with hand in glove to Federal, State, and local authorities to increase firearms prosecutions 

for the drug dealers, spousal abuse people, felons, and a host of 

others that nobody wants carrying firearms and we prosecuted 

those cases. We doubled it the first year in Project Safe Neighborhoods. Around the country, those cases are up 68 percent and they 

are significant sentences. 

In the Federal system, our sentences are lengthy and they are 

certain. They serve the sentences without the possibility of parole, 

and we believe that that provides a stinging deterrent to this—for 

purposes of this hearing narcotics trafficking but then also be carrying a firearm, which I think we all see as a disturbing trend upward. Thankfully the uptick in violence has not followed that in a 

perfect parallel, but I just don’t know how it won’t in the years 

ahead. Those cases are important and we appreciate very much the 

support for the Project Safe Neighborhoods and the firearms cases. 

Senator CONRAD. And thank you for your testimony. I want to 

make clear the wrangling that the U.S. attorney mentioned wasn’t 

between us and his making a statement here today. 

Mr. WRIGLEY. No. No, no at all. 

Senator CONRAD. The wrangling involved the U.S. Justice Department that was reluctant to have a U.S. attorney testify at a 

budget hearing, and we understand, you know, the way that works, 

but we thought it was very important to have the U.S. attorney 

here, and I think we have benefited very much by having our U.S. 

attorney testify, because this really is a matter of a partnership beVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
28

tween State authorities, Federal authorities, local authorities, and 

so we very much appreciate your being here. We appreciate the fact 

that ultimately the justice department relented and agreed that 

our U.S. attorney could testify. 

Next we want to call on Birch Burdick, who is our State’s Attorney in Cass County, who has witnessed directly meth lab abuse 

and how serious it is in our community. Thank you very much, 

Birch, for being here and please proceed with your testimony. 

STATEMENT OF BIRCH P. BURDICK, CASS COUNTY STATE’S 

ATTORNEY 

Mr. BURDICK. Thank you, Senators Conrad and Dorgan. In November of 2004, three guys lured another guy into an apartment 

to discuss a drug debt. That debt was worth a few hundred dollars. 

At the end of the evening, those three bludgeoned the fourth to 

death with a hammer. That—that case took place not in New York 

City and not in Chicago. It took place just three blocks from my 

home and a few blocks from the campus where we’re meeting right 

now. 

It’s evidence of the nature of violence that comes with drugs and 

particularly with meth because those three folks indicated that 

they had been using meth that night. Thankfully it’s not a common 

occurrence here but it’s not unique either. 

Some statistics for you. As Cass County’s State’s Attorney, my office handles everything from traffic tickets to murder, and I’ve seen 

the greatest growth over the last several years in our drug cases. 

Since 2000, our drug cases have doubled in number and in the last 

year, in 2005, we had over 1,100 cases. The North Dakota legislature has responded to this concern by increasing the severity level 

of drug crimes and implementing significant penalties and the attorney general discussed those. 

For example, every meth charge is a felony. There is no misdemeanor meth charge. If you, for example, posses 50 grams of 

methamphetamine, which is about the size of a (indicating) golf 

ball, that will entitle you to exposure to a life imprisonment penalty as a maximum. Facing ever more aggressive prosecution and 

incarceration, defendant’s efforts to contest these charges, of 

course, have increased and so I increased our staff from one fulltime attorney working on drugs to three. They do nothing but drug 

cases, and I formed them into a dedicated drug team with dedicated support staff to go with them. 

Yet the impact on our criminal justice system can’t be measured 

by the drug charges alone. As you know, it may lead to things like 

increased robberies, burglaries, thefts, assaults, domestic violence 

and, as was mentioned earlier, murder, but it’s not just the impact 

on the criminal justice system. 

A particularly disturbing impact of meth use is its contribution 

to child abuse and neglect, and kids exposed to meth at home have 

related medical issues but our understanding of the long-term effects of those medical issues is uncertain at this point. Here and 

around the country social service agencies have seen a significant 

increase in their case loads as a result of meth use in homes and 

so their out-of-home placements for children have increased. 

29

A recent study here in the Cass County area indicated that at 

least 34 percent of the social services cases had some direct tie to 

methamphetamine use. This drug complicates and, in fact, 

lengthens the possible reunification of children with their families, 

and if it’s possible to reunite those two together, the recidivism 

issue that goes with methamphetamine, the relapse into use, may, 

in fact, neutralize the value of reunifying those and we have to pull 

the children out again altogether. 

In addition, we may, in fact, prosecutor those parents for endangering their child, and the attorney general mentioned that there 

have been new laws passed with regard to that and we are implementing them here. 

We have had as a result of Byrne Grant funding in the past a 

drug task force that’s local to our area and it includes the local law 

enforcement agencies and our State’s attorneys office, and the 

funding that came with that has helped support a half of one drug 

prosecutor. That’s a half of the three that we now have there is 

supported by that funding. 

It’s not a lot of funding, but it’s very welcome and needed. It 

buys time in the courtroom, time to prosecute these cases, and time 

to go after the drug assets that are accompanying those cases and 

pull them back from the users and abusers and put them back into 

our justice system. 

Beyond incarceration, we’ve also made some progressive efforts 

to deal with low-level drug offenders. We have here a juvenile drug 

court and an adult drug court, which concentrate on treatment and 

rehabilitation for users who are not dealers and manufacturers. 

There’s been some talk about the treatment needs. We know in 

the addictive meth world treatment is extremely important in helping to reduce recidivism and recidivism is a particular problem 

with meth use. Unfortunately, the treatment that we’ve seen in 

speaking with enforcement providers is often long in duration and 

good results may be tough to achieve absent incarceration or inpatient treatment and so the cost of that treatment is very high. And 

while the public and private efforts to address that treatment are 

growing, they don’t seem to be nearly enough. 

There are some additional aspects on the system besides the 

jails, the prosecutors, the police, and the foster care system. It 

tears at the very fabric at the lives of the drug users and all those 

people that they come in contact with. Not only does it drain their 

financial assets, not only do they forfeit their liberty and endanger 

their health, but they lose their careers and leave their families to 

fend for themselves. 

And while we may be unable to gauge, another potential impact 

of drug use that concerns me what are these drug users’ children 

doing when they have to face the choice about drug use, given the 

kind of footsteps that they’ve had to follow? 

Law enforcement has made, and continues to make, real inroads 

in cutting down labs, but as we know the borders of our State that 

show so boldly on a Rand McNally map mean nothing to the passage of drugs, and we’ve seen a lot of those drugs come from Texas, 

from California, the Pacific Northwest. We believe they are coming 

from Canada, again originally from Mexico as well, and so this is 

a blend of concerns. 

30

It’s a shared responsibility between law enforcements and the 

courts here in North Dakota and at the Federal level, and it’s with 

that responsibility, that shared responsibility, that we ask Congress to consider the assistance it provides to the States. 

That Byrne Grant funding has been important to us and I thank 

you for your focus and Senator Dorgan’s focus on meth in the past 

and in coming here today. I urge you and the rest of Congress to 

consider increasing the funding levels that are available to State 

and local agencies for combating the meth problem and then for 

helping us seek and implement treatment solutions in our State. 

That assistance, through increased grants and programs, is needed 

and is a valuable investment in our communities. 

[The prepared statement of Mr. Burdick follows:]


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Senator CONRAD. Thank you very much. Thank you for a special 

perspective from a State’s attorney. 

Next we’ll go to Keith Ternes, the Assistant Chief of Police in 

Fargo, who has been named the interim chief beginning on January 23rd. Congratulations, Keith, on that announcement. 

Mr. TERNES. Thank you. 

Senator CONRAD. We look forward to hearing your testimony and 

what it is like to be in the front lines. 

STATEMENT OF KEITH A. TERNES, INTERIM CHIEF OF POLICE, 

FARGO POLICE DEPARTMENT 

Mr. TERNES. Well, first on behalf of law enforcement in both 

Fargo, West Fargo, Cass County, and really the immediate surrounding area, I want to thank both of our Senators for taking the 

time out of your schedule to come here to Fargo to address such 

an important issue. 

You know, as the world contemplates and discusses the possibility of pandemic associated with the medical phenomena of the 

bird flu, we in America law enforcement continue to discuss the 


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real pandemic presently infiltrating our communities in the form of 

methamphetamine. 

Addressing the issues surrounding methamphetamine use has 

quickly found its way to the top of the priority list for police administrators across the country. Because of its association with criminal activity beyond just drug crimes, law enforcement agencies recognize the need to remind vigilant in our fight against meth, but 

with our already limited resources it is becoming more and more 

difficult to stay ahead of this problem. 

The Fargo Police Department presently has a total of 127 sworn 

officers to police a community that is rapidly approaching a population of 100,000 residents. Of these 127 officers, seven are specifically dedicated to investigate drug trafficking and other narcoticsrelated crimes. But as you’ll see, the ever increasing number of 

meth-related cases calls for my consideration of dedicating even 

more officers and more resources to the fight against meth. 

In 2002, the Fargo Police Department investigated 132 meth-related cases, including seven cases where the drug was being manufactured in a laboratory. 

In 2003, 160 meth-related investigations were conducted and 

four labs were discovered, and in 2004, 230 cases were investigated 

and seven labs uncovered. 

Last year, 354 meth-related investigations were conducted; however, no labs were associated with any of these cases. The good 

news appears to be that the laws associated with the over-thecounter sales and the securing of the precursors used to manufacture meth appear to have had an impact on the viability of setting 

up makeshift meth labs here in Fargo, but the near tripling of 

meth-related investigations over the past 4 years is staggering and 

a solid indication that the problems associated with meth are far 

from resolved. 

Senator CONRAD. Can I stop you right there? I tell you as I have 

been listening it really struck me the attorney general showed how 

the discovery of meth labs is down dramatically since the law 

passed here and you have had new tools to deal with the precursors. That is the message that I heard from part of the attorney 

general’s testimony, but it would not be right, would it, for people 

to conclude from that the problem has been reduced, because really 

what I hear you saying is the actual investigations for meth violations has gone up dramatically, even though the number of meth 

labs being discovered in our State is down dramatically. 

Mr. TERNES. Yeah, there’s no question about that, Senator. I 

think clearly with the leadership of the North Dakota legislature 

we have taken the steps necessary to make it more difficult to 

manufacture this stuff, but what that’s done to some extent is it’s 

displaced the problem where it’s being made and the number of 

users continues to go up at a phenomenal pace. 

Senator CONRAD. And where do you think the stuff is coming 

from? 

Mr. TERNES. Well, I don’t think there’s any question that quite 

a bit of the methamphetamine that we see come into Fargo-Moorhead comes from clearly out State and probably out on the West 

Coast. Fargo being right at the intersection of two major interstate 

34

highways makes for a fantastic place for traffickers to bring the 

methamphetamine into our community. 

Senator CONRAD. So that really does make it in part a Federal 

responsibility, doesn’t it? 

Mr. TERNES. Well, I don’t think there’s any question, and as has 

already been pointed out, I think on both a State and local level 

we are dedicating the resources necessary to address this issue on 

a local level, but it transcends that. The meth problem is clearly 

being transported into our area. 

Senator CONRAD. All right. 

Mr. TERNES. I think the bad news in all of this, however, is that 

both violent crime and property crime is clearly on the rise in the 

Fargo area as a result of methamphetamine use. Last year in the 

Fargo-Moorhead area, in an area that on average has between one 

and two homicides occur here every year, we had two homicides 

occur in a relatively short period of time and both were as a direct 

result of persons either using or otherwise trafficking in methamphetamine. 

Burglaries and thefts are also on the rise here in Fargo. Many 

have a direct connection to methamphetamine. Defendants, suspects, and informants in many of these cases acknowledge using 

the proceeds from the sale of stolen property to either purchase and 

in some cases redistribute methamphetamine. 

Law enforcement agencies in and around Fargo, and really 

throughout North Dakota, continue to need the support, financial 

and otherwise, of our elected officials in order for us to continue 

our efforts toward addressing the problems associated with methamphetamine. 

The collaborative efforts that law enforcement agencies across 

the region are currently engaged in continue to be an extremely effective strategy. However, it’s going to take more than just simple 

cooperation, and the sharing of the already existing resources that 

we have, to make a real impact on this methamphetamine crisis. 

[The prepared statement of Mr. Ternes follows:]

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Senator CONRAD. Thank you very much, Chief. We appreciate 

you being here very much. 

Next we will hear from Dean Ross, who is the Chief of Police in 

Valley City. I know, Dean, that you had a scheduling conflict so especially appreciate your being here today. Dean has a special perspective because he represents a smaller town. 

Mr. ROSS. That’s correct. 

Senator CONRAD. One that has serious resource issues in combating the threat of meth. Thanks again for being here. 

STATEMENT OF DEAN A. ROSS, VALLEY CITY CHIEF OF 

POLICE 

Mr. ROSS. Thank you. And I think no matter what the scheduling conflict is I think this subject is so important that we have 

to be here, and I appreciate the fact that both Senators are here 

and they’ll share this information with anybody in Washington. 

First of all, I think we’ll wake up the senators and representatives on the East Coast eventually because it’s spreading their way 

and they are going to see the devastating impacts that the drug 


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has had on their areas as well as it already has on ours, so they’re 

going to see this impact shortly. 

Now, I don’t think the East Coast people are slower than we are. 

It’s just that they seem to like cocaine a lot better at this point apparently, but meth is going to get there, there’s no doubt about it, 

and it’s the most—in my career, it’s the worst drug that has ever 

hit the market. It’s no question unequivocally the worst. 

Senator CONRAD. And why? 

Mr. ROSS. Because of the devastating and violent effects that the 

meth has and the severe addictive qualities that it has on the people. I think that the violence that we’re seeing—I mean we—Valley 

City lies under the radar when it comes to violent crime, and we 

fly under the radar on a lot of things, but we’re not under the 

radar anymore. We’re above the radar. We’re right in line. We’re 

being red right now because in April of 2003 we suffered a triple 

homicide and it was meth related and another fourth attempt was 

made on a fourth individual. 

Meth paraphernalia and meth was found at the residence, so 

now you’re talking a town of 7,000 people who’s having the devastating effects that are being transpired around the Nation apparently, but people say it shouldn’t happen here. It is wrong. It is 

happening here, and I think 2 months later we had a brother shoot 

his own brother in the street. Meth paraphernalia was found there. 

So 2003 was probably the worst year in the—not probably. It was 

definitely the worst year in Valley City’s history as far as violent 

crime. 

In between that now though, a 22-year-old young, robust male 

that’s—thinks he’s being chased by a police helicopter. Well, obviously I put in for a police helicopter in my budget, but they don’t 

give me one. So it turns out it’s a medical chopper that’s coming 

in to do an airlift to Fargo, but he thought he was actually being 

chased by this police chopper. The unfortunate sad ending to this 

is he swallowed the meth that he had with him and it burst in his 

stomach. 

And in a small town you see there’s a lot of variety of things you 

do as well. My wife and I transported this young man down to the 

autopsy in Bismarck and that is not a situation that you ever want 

to deal with. 

So the people on the East Coast, the Congressmen, the representatives, the senators, the representatives, they will wake up 

to the fact, and what we’ve done is we’ve actually—we brought people in. I mean we brought them in from California telling us that 

we need long-term care. That’s what they are telling us. We need 

at least a year-long program to treat the meth addicts because 

short-term care doesn’t work. 

What also we’ve done we’ve brought in speakers. We’re doing 

more community awareness. We brought a pastor in from Minnesota telling how his son shot himself right in front of him, broke 

into a—broke into their gun cabinet and shot himself and killed 

himself. So this is a tragedy. I mean this drug is—like I said, it’s 

the worst one, but what are we going to do about it? 

We’re building a jail in Valley City. We’re building a multicounty 

jail. I mean but is that the answer? Definitely not. Incarceration—

I think our senator from Valley City has done a very good job in 

38

starting to get the State legislature to look at the Robinson Recovery Center. It’s a $500,000 project to throw into the mix where I 

just have information from him where we can—who can submit 

names for this because that 20-bed facility is going to fill up in just 

no time. It will be full by the end of the month from what I understand. 

So that—that’s one of the things, but more—more important another statistic we’re flying by is one of the charts that you showed 

and that is the loss of our drug task force agent. Now, he’s sitting 

out in—in the audience, Joe Gress is, and he’s losing his job in 12 

days. We have 12 days to utilize him because of funding cuts that 

were put on by the Federal Government. 

Now, we—we are already sharing. I know your question, Senator 

Conrad, was what are the States and cities doing? Well, we’re—we 

increased our share of the funding level to 35 percent of that drug 

task force officer. He only earns 22 hundred dollars a month. He’s 

not a very high-paid officer. You know, they should be earning a 

lot more than that, but they are willing to go out there and do the 

job for 22 hundred dollars a month. We’re funding 35 percent of 

that and the Byrne/JAG grant is funding the rest. 

I haven’t seen any abuse in the system. You can tell your colleagues back in Washington that I haven’t seen any abuse in the 

system in our State anyway as far as what Attorney General 

Stenehjem related to. I haven’t seen any leather jackets. My guys 

want leather jackets, but we aren’t buying them for them. So, anyway, there’s been no abuse that I’ve seen. 

I have put together a program, you know, a situation where community awareness is very important. They are burning down garages in our city, they are burning down garages in other areas. 

This is a devastating drug that has long-lasting impacts for all of 

us and what’s the answer. 

You know, in addition to the drug task force that we’re going to 

lose, a lot of the funding also goes to abused persons outreach centers in the State, and as you know as I’ve described, meth—this 

meth violence wasn’t only that. It was also domestic abuse violence 

that goes with that and that’s a part of the funding that that goes 

for, too, with that Byrne Grant that we are affiliated with in North 

Dakota, so now you’re taking out both of this—both of these. 

If you zero out that line item, that’s going to be my big push for 

your office, both of yours, to get that at a funding level that is not 

based on the formula as Attorney General Stenehjem pointed out 

but it’s based on a floor in there that North Dakota would receive 

their fair share and that’s so critically important. 

Senator CONRAD. What would you say to my colleagues who say 

look. This is not a Federal responsibility. This is a State and local 

responsibility and besides that this is just money that is being 

wasted. You give it to these local police department and they are 

spending it in inappropriate ways. How would you answer that? 

Mr. ROSS. Well, I would say, you know, there’s checks and balances in regard to all of that spending and there’s have to be—

there’s an audit of the situation where you can look at that and say 

what are they spending that on. 

And I happen to sit on a Byrne Grant committee in Bismarck 

and we are—we very—we scrutinize each and every grant that 

39

comes through and we scrutinize to see what they spend the money 

on so——

Senator CONRAD. To your knowledge, has any of this money been 

spent frivolously? 

Mr. ROSS. No, not at all. Not at all. Not in this State. I can’t 

vouch for other States but certainly not North Dakota. I think it’s 

been—that’s been our crutch to keeping this drug task force going 

in the State. 

Just think. At the end of 2006 with no money left for any drug 

task force across the State, there’s going to be a lot of law enforcement officers looking for work and there’s going to be a lot more—

the enforcement aspect isn’t going to be there because a lot of daily, 

routine patrol is very important in catching them, but continuing 

with the flow of the investigation is done basically mainly by the 

drug task force people. 

Senator CONRAD. OK. Thank you. Anything you want to——

Mr. ROSS. Thank you for your time. 

[The prepared statement of Mr. Ross follows:]


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Senator CONRAD. Well, you have been really an excellent witness. 

Thank you very much. 

Next is Rod Trottier, the Chief of Police with the Bureau of Indian Affairs stationed at Belcourt. Welcome. Thank you very much 

for being here. 

STATEMENT OF ROD TROTTIER, BIA POLICE CHIEF, 

BELCOURT, NORTH DAKOTA 

Mr. TROTTIER. Thank you very much. I’m very honored to be 

here, Senator. It’s something relatively new to me that I’ve never 

done before, so I am honored and look forward to it. 

Good afternoon. My name is Rodney Trottier. I’m a member of 

the Turtle Mountain Band of Chippewa. I work for the Bureau of 

Indian Affairs Office of Law Enforcement Services. I’m the Chief of 

Police of the Turtle Mountain Band of Chippewa Reservation located in north central North Dakota. I have served in this position 

since December 1999. 

I have had the privilege of serving as a law enforcement officer 

in various jobs for approximately 30 years. During this time, I’ve 


26823.028
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seen many challenges faced by the communities that I serve as a 

law enforcement officer. The Turtle Mountain Band of Chippewa is 

a small land base compared to many other Indian country jurisdictions. While there are only about 140,000 acres of trust land, there 

are over 11,000 tribal Indians that come under my jurisdiction. We 

have a relatively large population living in a relatively small area. 

According to our recent Bureau of Indian Affairs report, the unemployment rate is roughly 68 percent. Unemployment and related 

social problems have contributed to the trafficking, manufacturing, 

and use of methamphetamine and other illegal drugs. Over the 

past 10 years, I have never witnessed a threat to our community 

as great as the one posed by the use of methamphetamine. 

Use of methamphetamine has contributed to an increase—increased criminal activity, including aggravated assaults, domestic 

violence, burglaries, theft, and traffic facilities. In recent years, my 

officers have executed numerous search warrants, which have resulted in the recovery of stolen property that was destined to be 

traded for methamphetamine. 

My police department has a great relationship with the Turtle 

Mountain Band of Chippewa on law enforcement matters. We recently through the tribe was able to obtain funding for two tribal 

drug investigators and the tribe then assigned these officers to 

work with my department. 

These two additional positions have allowed us to conduct a 

proactive approach toward the investigation of methamphetamine 

and other illegal drugs. This partnership has been very beneficial 

and effective in the enforcement of tribal, State, and Federal laws. 

These two positions were also hired under the Byrnes funding. 

We have also forged effective partnerships with the United 

States attorney’s office; the Drug Enforcement Agency; the Federal 

Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms 

and Explosives; the State of North Dakota’s branch of criminal investigation; and county law enforcement officials. Due to our proximity to the Canadian border, we also work very closely with the 

United States border patrol and the Royal Canadian Mounted Police. 

I am proud of our accomplishments during these past several 

years. Because of the strong effective partnerships that we have developed, many criminals have been successfully convicted in tribal, 

State, and Federal courts. Law enforcement efforts have resulted 

in many significant seizures of methamphetamine and some drug 

dealers from our reservation are now serving very long sentences 

in Federal prison. 

Had it not been for the proactive partnership with our fellow law 

enforcement agencies, these accomplishments may not have occurred. Despite our best efforts, methamphetamine remains a significant threat to our proud community. 

One of the most disturbing tends we are seeing is an increase in 

the number of child abuse complaints which are being reported. We 

have committed law enforcement staff to work with child welfare 

officials in situations where the reported abuse is related to illegal 

drugs. 

According to child welfare stats for our reservation, in 2005 there 

were approximately 677 abuse and neglect reports filed and of this 

52

amount 207 were related to illegal drugs. Examples of the types of 

reports made include parents using illegal drugs and neglecting 

their children, children using drugs, and highly toxic methamphetamine labs located in homes where children are present. 

Perhaps the most tragic have been several recent reported cases 

of infants being born already addicted to methamphetamine. Due 

to the increasing alarm due to the harmful effects it is having on 

the reservation, our tribal officials have declared war on methamphetamine. The Bureau of Indian Affairs Office of Law Enforcement Services recognizes the seriousness of the methamphetamine 

epidemic in Indian country. 

Last Friday our national deputy director, Christopher Chaney, 

expressed to me his concern about this threat. On a national level, 

the Officer of Law Enforcement Services is forging ahead with 

more effective partnerships with the DEA, FBI, and other Federal, 

tribal, State, and local law enforcement agencies in order to combat 

methamphetamine. 

Methamphetamine does not care whether it is located on reservation or off reservation. It does not care whether the victims are Indian or not. I firmly believe that we must not allow a safe haven 

for drug dealers in any part of our State. Methamphetamine affects 

all communities in North Dakota and you must work together to 

fight this epidemic. 

In the spirit of community policing, I am committed to making 

sure that our citizens are informed about our activities to protect 

them. I will be implementing a weekly police report on our local 

FM radio station where we will report weekly crime stats. We will 

end each short program representing issues of concern and will encourage public input. 

Additionally, I will be initiating a tip line so that people can provide anonymous tips to the police. I know the public has a lot of 

information that will assist us in our battle against methamphetamine. This simple process will give citizens a safe and confidential 

avenue to report criminal activity. 

I am dedicated to public service for our community and will be 

working hard to fight methamphetamine. The citizens of Turtle 

Mountain Band of Chippewa are resilient and proud. Working together we will overcome the menace cased by this dangerous drug. 

Again, thank you. 

Senator CONRAD. Thank you very much for your testimony. 

I just wanted to briefly ask each of the witnesses three questions. 

One is to characterize the seriousness of the threat. In terms of 

drugs, is this the most serious threat that you confront? How would 

you characterize the threat that we face with meth? 

The second question I would like to ask each of you do you have 

the resources that you need? 

And the third is have you seen waste of taxpayer dollars in pursuing those who traffic meth, those who are meth users, and other 

criminal activity associated with meth? So those are the three 

questions I would like each of you to address. 

We will start with the U.S. Attorney, Mr. Wrigley. If you could 

tell us seriousness of the threat, do you have the resources you 

need, have you seen waste of taxpayer dollars. 

53

Mr. WRIGLEY. Thank you, Senator. As to the issue of the seriousness—and I hope everyone appreciates when I put the statistics out 

there before it wasn’t to say that they weren’t serious. It’s just to 

say it’s something to get our arms around and I feel confident 

about, but in terms of being with people who have this addiction—

I’m going in my tenth year as a prosecutor, I’m going on my fifth 

as U.S. Attorney—I haven’t seen anything like it. 

I had a case—I tried a case last summer where we had eight or 

nine witnesses that were—several came from the wrong door into 

the courtroom. I mean they were all defendants in custody, some 

others were not in custody but they had addiction problems of their 

own and dealing with people who fought in some cases to overcome 

addiction, others who are still in the grip of it. In terms—I’ve not 

seen anything like it either for the—especially the people addicted 

to narcotics. These folks, I think, are the most dangerous. Thank 

you. 

Senator CONRAD. Resources. Have you have the resources you 

need? 

Mr. WRIGLEY. In our office—you know, it’s been interesting as 

you mentioned before and I know Attorney General Stenehjem 

mentioned too. You know, we do have a time where resources are 

becoming a challenge at the Federal, State, and local level. In our 

office in the last years—I’m not criticizing the Congress. I’m just 

pointing out—we’ve seen a diminution of those resources somewhat 

cut each year. I seem to recall that I mentioned Congress cut the 

President’s request for DOJ. It was in my notes but it’s possible I 

never have to that. 

During that timeframe, our caseload has skyrocketed and so 

we’ve had to find ways. Thankfully the judges here in North Dakota and the Federal system have been amenable to us using 

videoconferencing so we’ve saved a lot of time on travel so we get 

more time back. We save money so we can put those resources into 

other—other things. 

And so at a time when we’ve tripled, almost tripled, not quite but 

almost tripled, our caseload, there has been somewhat a reduction, 

so I won’t be able to believe that we are, you know, somehow short 

in those regards. The department has been very supportive of our 

efforts here in the North Dakota U.S. Attorney’s office and I know 

that’s one subset of what you’re addressing, but to address that 

we’ve—we feel we’ve been supported well to the challenge. 

Senator CONRAD. And have you seen a waste of taxpayer dollars? 

Mr. WRIGLEY. No, I—I haven’t, but I—I sure would echo what 

Attorney General Stenehjem was pointing out and the chiefs and 

State’s Attorney Burdick and the others are—are talking about 

with respect to fraud. I think any of us if we had seen these things 

we would have discussed it. We would have brought it to the folks 

that needed to have that addressed to them. No, I have not seen 

it. 

Senator CONRAD. OK. 

Mr. WRIGLEY. I never can say what does or doesn’t exist everywhere, but I’ve certainly not—I think we do things like you do in 

a lot of areas just more efficiently. 

Senator CONRAD. Birch, seriousness of the threat, do you have 

the resources you need, have you seen taxpayer dollars wasted? 

54

Mr. BURDICK. As to the seriousness, I think the breath of the impact both that it has on the individual and on their extended family and friends and the growing, exponential growing, nature of 

this, the trends upwards are so high that I don’t think that we 

have a crime that is as serious for those reasons alone, and the 

ability to back away from it to solve the problem because of the addictive nature of the drug makes it the most serious, I think, that 

we’ve have. 

As for resources, we’ve been applying considerable resources toward the drug prosecution effort but in some sense costs us in 

other areas. The more people we apply toward drugs, then we are 

taking them from other resources. I think maybe the resources are 

most important as far as law enforcement but, you know, as we 

give more resources to law enforcement, they produce reports and 

where do they come? To Drew and to me and so we’ve have to do 

something once we get them. 

As for a waste of taxpayer dollars, I’ve seen no dollars putting 

leather coats in closets. I’ve seen it put in investigator’s feet on the 

street and prosecutors in the courtroom and that’s it. 

Senator CONRAD. OK. Keith. 

Mr. TERNES. Well, first to speak to the seriousness of the issue, 

I think—I think we’ve all readily acknowledged the threat that this 

poses to our communities as a whole. Somebody mentioned earlier 

that, you know, this is a public health issue. It’s a public safety 

issue, it’s a child welfare issue. 

And so the whole issue of methamphetamine is the threats in the 

areas of threat that it poses to our individual communities is—is 

overwhelming, and I don’t think it holds any boundaries whatsoever. 

But let me just speak just for a second just from the threat just 

from the line level police officer, because I don’t think—at least in 

my 19 years of law enforcement, I don’t think that there has been 

another issue that I’ve seen that has posed the threat to police officers as this one does. 

The violence associated with meth, the guns associated with 

meth, the people that are using and trafficking in meth are desperate people, and the safety threat that they pose to the officers 

investigating in these cases is really beyond anything that I think 

we’ve seen as a law enforcement community in North Dakota by 

far. 

The resources—and I can only speak to the Fargo Police Department. You know, I indicated that I have seven officers right now 

that are specifically dedicated to tackle the meth problem. Staffing 

and personnel is always going to be a challenge in an organization 

our size, but when we are confronted with some of the issues as 

we are now—as an example in the last four or 5 years, really in 

the wake of 9/11, the Fargo Police Department has continuously 

struggled to maintain staffing, if for no other reason than the fact 

that we have so many people that have military obligations. 

And as we sit here today, I have upwards of eight officers that 

are fulfilling those military obligations, so basically I’ve lost the 

staff that I have assigned to my narcotics unit. 

And so from a personnel standpoint, we—we have struggled. We 

are struggling today. We will continue to struggle to have the perVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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sonnel necessary to tackle this issue, and I can only reiterate what 

others have said, and that is in terms of waste I have seen no evidence whatsoever that suggests that agencies who have been provided with financial support have wasted it in any way, shape, or 

form. 

Senator CONRAD. OK. Dean. 

Mr. ROSS. Well, as I said earlier, I believe that the seriousness 

of the threat is absolutely extreme category. It’s the worst that it’s 

ever been in my career in law enforcement. I said that before and 

I can’t say it enough and I’ll say it again, over and over and over 

again, because it is the worst drug that’s hit the market. 

And for the reasons that are—for not only the reasons of how addictive it is, but there’s always violence that goes with it it seems 

like. Whether it be you can—a simple thing like syringes that are 

laying around in the home for the kids to—when we’ve conducted 

search warrants, there are syringes laying in the homes. 

When I have—everyone I started a scrapbook on what our police 

officers took away for firearms. I never—I had never done that before. It’s always gun related also. You go into a house and there’s 

always weapons. There’s always weapons in the home and for that 

reason alone, plus it’s killing people. I mean how much more extreme can it be? I mean other drugs have done that. Meth has by 

far surpassed all of those in my opinion. As far as the resources, 

very clearly our community shares a drug task officer. Like I said, 

we’re losing ours and we have shared this with Stutsman County 

and some other surrounding counties because of the regional concept that we have more people available. We have one in Valley 

City, but that would give us a utilization of like four. I mean we’re 

sharing the costs and putting it into a pot and making it work. 

And if I go to my city commission, we have one person under the 

COPS Universal Hire Program. That is the retention period of 1 

year that we need to—in order to—I mean I know that when this 

time limit is up I’m going to have to fight to keep my one officer 

on that COPS Program after that retention period. 

And beyond that, our—you know, you look at our city, a smaller 

community. We have 45 percent tax-exempt property and people 

are bellowing about how—our property taxes the way it is. So I 

think that we face a major issue in resources as far as if we can’t 

get the Federal funds to—I mean I’m not saying that the city 

wouldn’t go along with it. They are very cooperative in the fact that 

they will share the cost, but I’m not sure that they’ll bear the 

whole cost and that’s the sad part. They are putting some costs forward through—into the jail facility as I said. 

And as far as waste, unequivocally no. There is—I have seen no 

waste. When—when on the Byrne committee, they’ve gone down to 

eliminating everything besides basically personnel and the costs 

that are associated with it on the grant, on the grant funding. 

When you go to the task force, they’ve taken extreme cuts on everything other than personnel. I mean they want the bodies out there. 

That’s what they want. They don’t get anything else, but they get 

paid for the bodies. That’s what it’s all about. 

Senator CONRAD. OK. Rod. 

Mr. TROTTIER. Thank you. I think that the serious threat is—in 

my opinion it’s still the greatest demand. We talked earlier about, 

56

you know—and it’s fantastic, you know. We have to brainstorm, 

you know, with this thing constantly. I mean the bad guys are out 

there trying to find ways around, you know, defeating law enforcement. I think we just have to keep going. We have to try to figure 

out their new ways. 

We cut it down to where the meth labs—and I agree with the attorney general in that. Even in our area, we’ve seen very few meth 

labs. At one point I think 4 years ago we were rated third in the 

State of North Dakota in that particular area for the amount of 

meth labs. It’s real hard-pressed but the demand is still very 

strong, and as long as that demand is there, they’re going to get 

it. 

I—I think that—you know, they always say it’s a poor man’s 

drug, but I think the accessibility of that particular drug is a lot 

easier than having to go beyond our exterior boundaries of this 

country to get it, such as cocaine and heroine and that type of 

thing. 

I think the super labs I think are alive and well and they are 

growing and I really think that what I spoke about earlier and I 

think everybody I think the theme here is always partnership because of the resources being so tight. That’s the theme. We’re going 

to have to work together. There can’t be any boundary lines, even 

as far as Canada is concerned. 

As far as the latter two, I guess I’m not in a position to answer 

those questions. I can speak on behalf of the tribe I think. On behalf of two positions that I have employed under the Byrnes funding and the tribe in and of itself actually, I think, put in a good 

amount matching on that particular fund this year, but even that 

with the cuts that had to come down we’re only going to have those 

two gentlemen probably until September and we’ve had them about 

10 years and they’ve done an excellent proactive work for us and 

I really hate to see them gone in September. Thank you. 

Senator CONRAD. Waste? 

Mr. TROTTIER. No, I don’t see no waste. As with Chief Ross, I 

was on the Byrnes committee myself about 4 years ago, served 1 

year on it, and, you know, it—I mean the money was tight. It 

was—you know, it was cut a little bit every year and you had to 

do the best with what you had. I am not aware of any waste. 

Senator CONRAD. Senator Dorgan. 

Senator DORGAN. Well, thank you very much. This has been a 

really interesting panel with different perspectives on the same 

issue and let me just say I think I speak for Senator Conrad, having watched his work on this as well. I think the Byrne Grant Program has been just one of the most successful programs we have 

had out there. It allows local enforcement folks to describe their 

priorities and use these funds with minimum strings attached and 

use them to address the significant priorities they have, so I think 

it is a program that works. It makes no sense to be cutting that 

program. 

Senator CONRAD. I want to talk to you just a moment about victims because meth users can come in all shapes and sizes and ages, 

and I had a forum in which a young mother from a community in 

northern North Dakota talked about her high school son, outstanding quarterback on the high school football team, became adVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
57

dicted to meth and it just literally destroyed him. In and out of 

prison. It was just a horrible story to hear. 

I want to ask you about methamphetamine in high schools in 

North Dakota and then methamphetamine in colleges, and the reason I’m asking the question I think, you know, while the consumption of meth is a crime, there is also a victim here with respect to 

young people and others who are addicted to this deadly drug. 

And I assume that most of you would say there are far too few 

opportunities for addiction treatment in our State and across the 

country, but let me ask you if I might, particularly in law enforcement, perhaps Drew and Birch as well, what about high school? 

What about kids? At what level are we seeing meth and hearing 

about addiction to meth? 

Mr. ROSS. Well, I think from our standpoint we’re seeing it—it 

started out as a drug that was predominantly the 30- to 40-yearolds, right in that area, were using it. That age limit has gone way 

down very fast. We’ve now had juvenile referrals on 14-year-olds 

that are using it too. So what used to be the drug of—it seemed 

like they took from cocaine they were using now and they are 

changing to meth, but the age limit is going way down. We have 

from 14 to 15. 

Our age of people that we have actually caught with the drug is 

from 14 to 80. So there’s an 80-year-old out there and I thought 

they would know better but apparently they don’t either. So we’re 

hitting—we’re hitting a wide spectrum, but age is progressively 

going down and that’s the scary part. It really is. 

Senator CONRAD. Chief Ternes. 

Mr. TERNES. Well, again I think the good news is this, and that 

is we have an officer in each of the public high schools and the junior highs here in Fargo; and although we do see some drug activity 

in the school setting, it’s minimal at this particular point. However, 

I agree with Chief Ross that this drug knows no bounds in terms 

of rich or poor, old or young. I think that’s due primarily to accessibility and really it’s fairly cheap to purchase. 

But in terms of how it’s currently affecting our—our young people, as I mentioned earlier our property crimes are on the way up 

and substantially so because teenagers, young adults, who, you 

know, aren’t making or aren’t involved in high-paying jobs, at least 

at this point, are basically—those are the people that are breaking 

into cars, stealing stereos, stealing whatever they can find and 

turning around and selling those things and then using the proceeds to go ahead and contribute to their meth habit. 

So there’s no question that, you know, of the three or 400 cases, 

meth investigations, that we’re involved in a significant number of 

those do involve young adults in our community and, you know, if 

we don’t find a way to provide them with an out in the form of 

some type of treatment, that situation is never going to get any 

better. 

Senator CONRAD. And finally let me just ask perhaps Drew and 

Birch as well. If the relapse rate for meth addicts is somewhere between 70 and 80 percent following treatment, at least that is what 

we are told, it is such a deadly addictive drug that the relapse rate 

is weigh up there, 70, 80 percent. If that is the case, is there any 

expectation that we can effectively address this problem without 

58

substantially more treatment opportunities available for meth addicts? 

Mr. BURDICK. Senator, I think the treatment is critical. A survey 

that was done at the United States Counties indicated that they 

put—meth users fit into two profiles, one, high school and collegeage students and white and blue-collar workers in the 20 to 30 age 

and working in the rural and emerging urban areas. 

Our information doesn’t seem to indicate anything different than 

that very thing. We have, as I indicated, focused on implementing 

both juvenile and adult drug courts here to help focus on that and 

to help realize that it’s not just punishment for the—for the sort 

of low-level users of drugs. 

You want to get them a measure of punishment but also some 

treatment to get them off—off the drug and hopefully stay off the 

drug, and the fact that it’s such a problem to relapse just concentrates how much attention we need to focus on the treatment 

aspect of it. 

So I would agree that is where we need to be spending money, 

both on figuring out what the appropriate treatment programs are 

and figuring out how to develop and deliver those within our communities. 

Mr. WRIGLEY. Thank you, Senator. Again, our perspective is a little bit different here, not because it disagrees but because it’s just 

a different perspective. When I—when I first became U.S. attorney, 

then Attorney General Ashcroft and the President in a few meetings with U.S. attorneys since then, closed and open door, have directed the U.S. attorneys into this administration to really focus on 

the trafficking cases to where we are—in our office here in North 

Dakota we don’t prosecute anybody who isn’t part of a significant 

trafficking organization. 

And where our standard might adjust a little bit our thresholds 

would mainly be in Indian country where we have that predominant responsibility that a State’s attorney might have elsewhere, 

so we see some adjustments there, but by and large these are significant traffickers. 

They are members of a conspiracy, but I think you raise a really 

important point on this, the issue of—and it’s not lost on anybody 

up here—of the victimization, recognizing we’re dealing with victims a lot of times. 

I know Attorney General Stenehjem and others who have talked 

about this issue in North Dakota have always coupled it in with 

the idea of treatment and recognizing that we have an obligation 

on demand reduction. That’s not something maybe the prosecutors 

talk about every day of the week, but boy do we realize that in this 

one if we’re going to do these market things I discussed before, that 

demand has to be addressed and I—if I could just briefly point out. 

I had a trial last summer where in my closing comments I was 

addressing the fact that we had quite a cast of characters and one 

of the young women was just—I mean she was sort of a mess and 

the jury had heard all sorts of things, and I let them know at the 

end in my closing remarks that the events that they were now familiar with might not make that victim the mother of the year. She 

had been an addict and she had all sorts of other issues going on, 

but the defendant’s criminality was clear. 

59

In that case, Senator, the defendant, there was testimony, went 

to her to get her to continue to deal for him. He opened his pants. 

He forced that young woman to strip naked and to perform an oral 

contact on him, and he threatened to then beat her if she did not 

follow his precise instructions with what to do with the natural 

consequences of that act. 

He then tossed a small bag of methamphetamine at her and told 

her, you know, you’re going to continue to deal for me. All of which 

is noxious enough, but when you add in that she was 7 months and 

visibly pregnant, it was just about more than the people in the 

courtroom could take. That’s—you know, I’m not going to say that’s 

a common circumstance, but things like that that make all of us 

in law enforcement that have been watching this for years sort of 

sit back and think. 

Well, what I said in the beginning is also true. Numbers of people, alcohol and marijuana affects more, but when you get down to 

the individuals who hinder that thing, that kind of a circumstance, 

I wish it were completely rare but it’s not. 

Senator CONRAD. I know we are running behind but, Rod, could 

you just finally point out on the reservation from the perspective 

of the BIA at what age are you seeing meth use? 

Mr. TROTTIER. Just like the previous chiefs—chiefs have said, it’s 

about the same age. We’re seeing it younger and younger all the 

time. One of the biggest things that we’re seeing in law enforcement is the community is being so desensitized by it. You know, 

I don’t know if that’s the proper word to use, but we’re seeing more 

police officers assaulted, we’re losing respect of these young people, 

teachers, parents. 

Unfortunately, we have an area where we have a lot of single 

mothers raising children and they’ve—they’ve lost control, 13, 14-

year-olds, and that’s been a big issue that we’re seeing and it puts 

such a huge, huge emphasis on all the people serving programs in 

our community to some respect raise them families and children. 

It’s getting to the point where—as a matter of fact, I’m trying to 

schedule a meeting with about 30 plus individuals here—people 

serving programs—hopefully this month, and I’m hoping to get everybody indoors so we can explain how meth is affecting each and 

every one of our programs just on the reservation. 

At the very least if it falls through at the end of the day, at least 

we’ve had an opportunity to hear what every one of us the problems we’re having and hopefully if I can keep them in there that 

afternoon and we can maybe funnel them down to some sort of resources that we can all pool together within our own community to 

try to combat this, whether it be education, you know, juveniles. 

I’m on the road constantly in my car. We have no local facilities 

and the tribal court is sending these young people—I bet I’m on the 

highway three or four times a week in and out of the State and 

it’s just very difficult. Thank you. 

Senator CONRAD. Thank you. I want to thank very much this 

panel. I appreciate very much your taking the time to be here and 

present what I think is very important testimony. And I must say 

the things I have heard from law enforcement and from prosecutors 

about the toxic nature of this drug and how absolutely devastating 

and destructive it is to families and communities I do not think we 

60

face a bigger threat than meth. It is just a disaster and we have 

to do everything we can to take it on. 

I thank each and every one of you for testifying and what you 

do every day to be part of this fight. Thank you very much. 

Mr. WRIGLEY. Thank you, Senator. 

Mr. BURDICK. Thank you. 

Senator CONRAD. Our third panel is made up of Karin Walton, 

the Program Director of the North Dakota Higher Education Consortium for Substance Abuse Prevention, and Karen Larson, the 

Deputy Director of the Community HealthCare Association of the 

Dakotas, formerly the Director of the Division of Mental Health 

and Substance Abuse Services in the North Dakota Department of 

Human Services. Thanks very much. Both Karens. Karen and 

maybe it is Karin. 

Ms. WALTON. It’s pronounced ‘‘Karen.’’

Senator CONRAD. You pronounce it ‘‘Karen.’’ Thank you very 

much the two of you for being here. I appreciate it. You know, one 

of the great issues is can we treat people? Can we treat them effectively and successfully, and so I am delighted that the two of you 

are here. 

Karen Larson, again the Deputy Director of the Community 

HealthCare Association of the Dakotas, formerly the Director of the 

Division of Mental Health and Substance Abuse Services, has 

worked in the field for, as I understand it, over 25 years, and she 

is someone that can tell us about effective meth treatment options 

as well as remaining challenges. Thank you. 

STATEMENT OF KAREN E. LARSON, DEPUTY DIRECTOR OF 

THE COMMUNITY HEALTHCARE ASSOCIATION OF THE DAKOTAS 

Ms. LARSON. Thank you very much, Senator Conrad and Senator 

Dorgan. It’s my pleasure and my honor to continue to stay involved 

in this particular aspect of my career, even though I have moved 

on to a much broader based level of health care. I constantly keep 

in mind that primary health care involves treatment for substance 

abuse as well as mental health treatment and so it’s a wonderful 

chance for me to talk with you. 

You know, I—I’ve been a lifelong resident of North Dakota. I’m 

a registered nurse. My background in addiction has involved being 

Director of Nursing at Heartview back in the old days of it being 

a pretty well-known 91-bed inpatient treatment facility. 

I wish that it and a lot of our other inpatient treatment facilities 

were still viable and present, but we do have 25 residential treatment programs in the State of North Dakota among our licensed 

treatment providers and I’ll talk to you a little bit about that. 

You know, one of the things I think that we have to recognize 

when it comes to treating methamphetamine addiction—and I believe this to the very depths of my being—is that when I first 

began working in the treatment field we basically ascribed to what 

I call, ‘‘When all you have is a hammer, everything looks like a 

nail.’’

Back in 1979 when I began working in treatment, we basically 

followed what is known as the Minnesota model for giving—for providing treatment, groups, lectures, some individual therapy, a 

61

strong emphasis on the 12-step model of recovery and exposure of 

patients to the 12-step programs so that they could continue with 

that. Aftercare was added also. 

But we also know now through terrific research that’s been done 

by the National Institute on Drug Abuse. In the words of Alan 

Leshner, who is the former head of NIDA, ‘‘no matter what the 

drug, is a brain disease and it matters greatly that we understand 

that.’’

Now, in that context when I began in 1979, the predominant 

drug of choice certainly that entered Heartview was alcohol. We 

were seeing some marijuana. In the 1980’s we saw some, a mini 

explosion, but nothing to the depth that we’ve seen with methamphetamine, of cocaine with some of the oil field expansion that 

took place at that time. 

We have been ill prepared in this State to really face and address 

the real issues of an illicit drug entering the State and causing the 

damage that it has caused. It has taken the State of North Dakota 

by complete surprise, because I think we believe that we have been 

immune to all of those nasty street drugs and at least it isn’t drugs 

when our kids were drinking. 

We also know that there are some very, very important pieces of 

research that are supporting this chronic progressive fatal disease 

as it pertains to methamphetamine or any other addiction. We 

need to understand and we know through a longitudinal piece of 

research that the best treatment is matching the person and their 

symptoms and their drugs of choice—more often than not more 

than one drug of choice—to the right type of treatment, for the 

right length of time, at the right intensity. 

Now, that takes us far away from the belief that everybody has 

to go through the same kind of treatment in order to recover, and 

it takes us into much more appropriate diagnosis treatment and 

followup. We also know that this is a chronic relapsing disease, addiction itself is, (methamphetamine, particularly) because of the 

complete damage that is done during usage to the production of 

and availability of certain brain chemicals that cause us to think 

straight, to behave appropriately, and to feel good. 

One of the processes of addiction is that once you complete and 

interfere with the production of those brain chemicals your brain 

forgets how to produce them so you need to go to the external product, methamphetamine, to continue to find that feeling of wellbeing. 

We also know that one of the problems that we failed in the addiction treatment community and that has had a devastating effect, 

particularly with methamphetamine, has been the reimbursement 

of treatment for shorter and shorter periods of time. 

It’s been interesting as we have really been able to scientifically 

relate the nature of the chronic relapsing nature of addiction and 

particularly of methamphetamine addiction, is that on conversely 

we have seen a reduction in the reimbursement and the reduction 

in funding for treatment of the appropriate length of time. 

Unfortunately, I think what has happened for many people and 

especially those in the private sector, who rely on third party or 

self pay, is that we see approval for the lowest level of treatment 

available if the person has never had treatment before and what 

62

we have developed is what I call a ‘‘fail first’’ kind of approach to 

treatment. 

That does contribute to the amount of relapse that we’re seeing 

because we have not placed the person in the appropriate level of 

care for the appropriate length of time. We have placed them in the 

level of care that can be paid for. 

I think it’s also important to know that we do have research 

based principles of what constitutes effective treatment. Not only 

does the 12-step model continue to work, but we also know that 

there are certain individuals for whom a much more cognitive approach is appropriate and we also know that it is important to understand the acute withdrawal and the post-acute withdrawal syndrome that happens, especially as you’re detoxifying from the effects of methamphetamine, before you move into a fully formed addiction treatment program that is requiring you to think, learn, 

and retain information. 

The National Institute of Drug Abuse does have on its Web site 

and there is attached to my testimony a listing of those principles 

of effective treatment. I would submit to you there are some that 

are particularly important to pay attention to when it comes to 

methamphetamine. 

Treatment for methamphetamine addiction has to be readily and 

easily accessible, and I’m sure that most law enforcement people 

will tell that that sometimes is a real struggle. Treatment must be 

available in licensed treatment facilities that do have the ability to 

address the unique needs of clients with methamphetamine addiction. 

Treatment needs to be available in corrections facilities, either 

directly offered by those facilities or through a contract with a local 

treatment provider, so that the symptoms and needs of that individual can be addressed as soon as possible. Indeed, drug courts 

and corrections-based treatment have demonstrated that ‘‘coerced 

treatment’’ is effective, which again is really flying in the face of 

some long-held beliefs of 25 years ago. 

Treatment must address both the acute withdrawal phase, and 

the post-acute withdrawal phase which generally will last for up to 

2 weeks. Acute withdrawal with methamphetamine is more emotional and behavioral than it is physiologically challenging, unlike 

that withdrawal from alcohol. The post-acute withdrawal and initiating abstinence phase, generally can last anywhere from 6 months 

up to a year. You heard talked about earlier today that year-long 

treatment might well be the need if that person’s symptoms do require that kind of attention. 

Now, I’m not telling you that somebody has to be in an inpatient 

facility for a year. What we do know is that it is important to help 

people be able to move back toward more normal lifestyle through 

step-down, step-up kinds of treatment so that they can attempt to 

try living straight in less restrictive environments. 

Treatment approaches must be research based. We have gone 

past the conventional wisdom and the experimental nature of treatment as it evolved, and much to North Dakota’s credit I think we 

have a huge and long history of very, very excellent treatment and 

treatment provider credentialling that we cannot dismiss, but we 

63

need to continue to develop that in light of this methamphetamine 

issue. 

The Matrix Model is one that has been funded by NIDA has been 

deemed to be quite effective it certainly utilizes a number of the 

principles of treatment that most of the treatment providers in 

North Dakota utilize. 

Senator CONRAD. Can you tell us what the Matrix Model is? 

Ms. LARSON. The Matrix Model is a model of treatment that was 

basically developed for those who were stimulant abusers and, of 

course, methamphetamine is in the stimulant category. It began, 

however, with cocaine and crack and has been applied with great 

success to the methamphetamine-addicted people. 

Actually, it is an outpatient model, but it is also very, very 

adaptable to a residential model, and residential treatment is more 

of a social model of treatment, less heavily reliant on medical input 

and medical personnel. It includes a lot of case management, oversight, supervision, and understanding the phases of recovery and 

so actually the case manager will work very closely with the client 

to make sure that they are getting up, getting to their meetings, 

getting to their lectures, to their group therapy sessions, also learning in a habilitation way new skills that they probably never had 

in the course of their addiction. How do you balance a checkbook, 

how do you responsibly apply and interview for a job, all of the necessary living skills that people are not very prepared to do when 

they leave treatment. 

They also rely very heavily on using not only the Minnesota 

model—the 12 steps do figure into this—but they also use a cognitive approach that help people learn how to think and do critical 

thinking. ‘‘If I do this, this will happen’’; and this is an extremely 

important element of methamphetamine treatment and recovery so 

that the addicted person has the ability over time to learn to kind 

of do some self-talk and to understand that the cause and effect, 

the behavior versus the consequence, that relates to their lives as 

well as to their addiction and their illness. 

It also does concentrate very heavily on understanding the nature of craving that takes place. I would say in no other drug do 

we see so such physiologically-based craving for taking that drug 

being so overwhelming that it almost supersedes all of the executive functions of the brain that makes sense to you or I. People will 

just do things that don’t make any sense to us because their craving is so profound. Part of that is related again to the fact that 

their brain chemicals are not being produced and the craving kicks 

in. 

I’ve talked a little bit about the habilitation and also about the 

step-up and step-down aspect of treatment. That has to be a component of methamphetamine treatment so that people can begin to 

learn how to live sober outside of the confines of a residential program. 

We are very, very fortunate at this time that the North Dakota 

legislature did provide some funding to begin a residential methamphetamine addiction treatment program. That contract was provided to ShareHouse here in Fargo. ShareHouse has a long, long 

history of providing excellent residential care to people with really 

profound addictions to a lot of different substances. It’s named the 

64

Larry Robinson Recovery Program and that is a credit to Senator 

Robinson’s championing of funding for this program. 

I think that one of the things that will be the most important—

and I know Bill and Andi are here. I was just telling them how excited I am because they are going to be providing us with some outcome and some basic clinical research that tells us in using the Matrix Model in combination with the residential treatment program 

what kind of outcomes they are seeing, what kind of needs they are 

seeing in addition even to what—what their contract will allow 

them to do, so we’ll have some actual field research that will really 

help us immeasurably. 

Now, that’s one specialized methamphetamine addiction treatment program. All of our licensed addiction treatment providers, of 

which we have well over 70 in the State of North Dakota, some of 

them offering very limited and low-level care, do know and understand how to treat methamphetamine addiction. The real issue is 

adequate reimbursement to pay for the kind of treatment that people need. 

We are fortunate in the State of North Dakota that private insurance, especially those group insurances, do provide for some reimbursement for addiction treatment. The State’s public funding 

basically relies on the Substance Abuse Prevention and Treatment 

Block Grant that comes from Health and Human Services and also 

from some State funding. 

One of the problems that I did note during the time that I was 

the Director of the Division of Mental Health and Substance Abuse 

is that that Substance Abuse Prevention and Treatment Block 

Grant funding was somewhat static. We were grateful for it, but 

that quite a lot of additional funding was put into demonstration 

grants that lasted three to 5 years. In many instances every time 

the grant went away, the program went away because there was 

no way of sustaining the funding. 

And while I’m a true advocate for research-based effective treatment, I also see that there is a necessity for us to be sure that we 

have adequate funding both on the public side of things as well as 

on the private site of things. Addiction and methamphetamine addiction is no different, are significant public health problems, and 

we need to have adequate resources so that we can provide the 

treatment. 

The chronic relapsing nature of this illness, whether it’s methamphetamine or other substances, means that we have to restyle 

how we approach the length of our involvement with people and be 

able to intervene quickly whenever a relapse takes place. 

I always use the example that if I were taken to the hospital 

today diagnosed as a diabetic, taught all the things that I was 

going to need to manage that illness, would you expect I never had 

to darken the doorway of the health care system again? Absolutely 

not. I make the same case when it comes to addiction and in particularly to methamphetamine addiction. 

[The prepared statement of Ms. Larson follows:]

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Senator CONRAD. Thank you very much. Really excellent presentation. 

And now Karin Walton, Program Director of the North Dakota 

Higher Education Consortium for Substance Abuse Prevention. 

That is a mouthful. 

Ms. WALTON. Yes, it is a mouthful. 

Senator CONRAD. She has extensive experience as a licensed addiction counselor. Welcome. 

STATEMENT OF KARIN L. WALTON, DIRECTOR OF THE NORTH 

DAKOTA HIGHER EDUCATION CONSORTIUM FOR SUBSTANCE ABUSE PREVENTION 

Ms. WALTON. Thank you, Senators Conrad and Dorgan. Thank 

you for the opportunity to be here today, and for the record, I am 

Karin Walton, the Director of the North Dakota Higher Education 

Consortium for Substance Abuse Prevention. This is a new initiative in addressing college substance abuse in North Dakota and 

we’re very excited about that. 


26823.090
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I appear before you today to talk about drug prevention, and I 

believe that my testimony is very timely and will support what has 

been shared in other testimony today and also will bring to the 

table possibly a challenge or a call to action. 

A recurring discussion revolves around the types of approaches 

that are most effective in reducing drug use and its related problems. Traditional approaches have focused on individuals. That is, 

providing interventions or treatment to those who are at highest 

risk or educating youth to resist peer pressure or fining and arresting those who break the law. 

However, these approaches alone have not proved evidence to 

support changes in behavior or appear to produce only temporary 

results rather than long-term behavior changes. So because of this, 

there’s the need to identify other ways to understand prevention 

strategies. These individually based approaches may be complemented by a broader individual—or a broader—excuse me—environment; therefore, increasing the likelihood of long-term reductions in methamphetamine use and related problems. 

The environmental management approach supports the need for 

prevention efforts to focus on health issues in a broader context. 

There cannot be the focus on just one aspect of prevention, but prevention in a collaborative effort at the local, State, and Federal 

level. 

Senator Conrad, it is important to be reminded that young people are individuals who rarely wake up one morning who say, ‘‘I’m 

going to use methamphetamine,’’ and they don’t go from Little 

League Baseball to big league drugs overnight. 

Tobacco, alcohol, marijuana, and inhalants, these are the drugs 

that children usually use first and are called gateway drugs because children learn to accept and embrace the high. They use 

drug-attainment skills and drug-taking habits and learn how to lie, 

cheat, sneak, and steal to get the drugs. 

And once a young person gives himself or herself permission to 

use any harmful drug, it is so much easier the next time to do the 

same and the next time after that and so on. So the use of any 

gateway drug is a strong predictor for future use of other drugs. 

Thus, preventing any use of any gateway drug by any young person 

is absolutely critical. 

It’s also important to remember that it’s not just meth, not just 

alcohol, not just marijuana, or not just tobacco. Rather we need the 

identification of a broader societal problem across all substances. 

For instance, when we do meth prevention, we are also doing tobacco prevention, other drug prevention, alcohol prevention, crime 

prevention, STD prevention, injury prevention, violence prevention, 

sexual assault prevention, and the list goes on and on. 

Prevention efforts require a focus on understanding and preventing child and adolescent health and behavior problems. It 

seeks to identify risk and protective factors for health and behavior 

problems across multiple domains, to understand how these factors 

interact in the development of prevention of problem behaviors and 

then to test comprehensive prevention strategies, which seek to reduce the enhancement of strengths and protective factors in families and schools, peer groups and communities. 

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And I would like to direct your attention to the guiding principles 

for prevention in my written testimony, which outline the elements 

of effective prevention programs according to the National Institute 

of Drug Abuse. 

One of the chief lessons taught by nearly two decades of prevention research is the need for a comprehensive approach, one that 

not only addresses the specific educational needs of individuals but 

also seeks to bring about change at the institutional, community, 

and public policy level. 

This approach is grounded in the firmly established principle 

that the decisions that people make about alcohol and other drugs, 

including meth, will be shaped by the physical, social, economic, 

and legal environment that in turn can be shaped by a committed 

group of prevention and health advocates, governmental leaders, 

higher education officials, State administrators, law enforcement, 

city leaders, medical personnel, teachers, parents, students and 

many, many others. 

This comprehensive approach represents and supports a shift in 

thinking about prevention, however. It suggests new leadership 

roles for State administrators, campus officials, community members, parents and students as they attempt to reduce problems associated with alcohol and other drugs. 

Clearly, addressing the methamphetamine epidemic and the related consequences in North Dakota is not something that one entity can handle alone. We’ve heard that today. Top administrators, 

especially State leaders, must exercise their leadership to help 

build strong coalitions to protect our communities. 

In order to accomplish this, however, there need to be resources 

available to continue the efforts that have been successful in North 

Dakota in reducing access to producing the products that contribute to the manufacturing of meth, increased law enforcement to 

support penalties for possession, and the development of affordable 

treatment. 

I respect your insight, Senator Conrad, to the fact that getting 

rid of labs doesn’t get rid of the drugs. We didn’t—we learned our 

lesson really well in the 1930’s during the prohibition of alcohol. I 

think 10,000 people in New York City went through treatment in 

the last year of prohibition, so I appreciate your leadership, Senators Conrad and Dorgan, for bringing this important crisis to the 

Federal table. Thank you. 

[The prepared statement of Ms. Walton follows:]

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Senator CONRAD. Thank you very much. I am going to call on 

Senator Dorgan for any questions he might have of this panel and 

then I will close it out with my questions, and so I would turn to 

Senator Dorgan for his questions. 

Senator DORGAN. I do not have a question but your testimony, 

the description of these programs and the description of the problem and some of the solutions, is really excellent. I really appreciate hearing new things and I do think there are victims here. 

We talk about users but that there are victims here, and the key 

words are prevention and treatment and we can do a lot of things, 

but if someone is dreadfully addicted to this devastating drug and 

we don’t help, we don’t find a way to help that person shed that 

addiction, all of the other problems that result from continued use 

and the behavior of continued use will inevitably show up on our 

doorstep the next day, the next week, the next month. 

The work that you do is probably less noticed then and less discussed then the work of law enforcement and prosecutors, but it is 

critically important work and Senator Conrad and I and others in 


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the Congress have felt that you have to also devote substantial attention to this issue of addiction. 

I think our prosecutors talked about that as well because for 

them it becomes a revolving door of people in and out. So I just 

want to thank you both for coming and thank you for waiting a 

long time to testify, but your testimony was well worth it. Thank 

you very much. 

Senator CONRAD. Thank you, Senator Dorgan. You know, I think 

one of the most important messages that can come out of this panel 

is the notion that it is hopeless to treat people is not right. It is 

not hopeless. It is difficult and it is challenging to treat people effectively but the fact is there are treatment regimes that are proven to be successful. Am I right in that assertion? 

Ms. LARSON. Senator Conrad, you’re absolutely correct, and earlier on in the methamphetamine crisis as it was occurring, we’ve 

had a lot of talk and a lot of conventional wisdom, well intended 

as it was, is that there’s no recovery, there’s no hope, and there’s 

no possibility, but thanks to the efforts of the National Institute on 

Drug Abuse, thanks to the efforts of treatment providers who were 

willing to really kind of back up and kind of rethink how—how 

they delivered treatment, we know that there are people who are 

in recovery. 

I think that one of the things that’s so important for all of us to 

understand is that like all chronic relapsing progressive diseases is 

that people do relapse, whether it’s alcoholism, whether it’s other 

drugs of abuse, whether it’s other chronic illnesses. That those illnesses have a life of their own characterized by remission and exacerbation, and what we need to do is to have a treatment system 

that is really, really able to move in as early as possible to understand the dynamics of relapse and impending relapse and to intervene early, rather than waiting until people are really at the bottom of——

Senator CONRAD. So even if somebody relapses, that isn’t hopeless either. 

Ms. LARSON. Absolutely not. Absolutely not. 

Senator CONRAD. They may have several relapses. Doesn’t mean 

that you can’t recover. 

Ms. LARSON. Right. 

Senator CONRAD. A couple of things that you said, Karen Larson, 

that I wanted to followup on. One is you talked about a cognitive 

approach. That a cognitive approach might be more successful with 

some. What does that mean, a cognitive approach? 

Ms. LARSON. Well, the cognitive approach to treatment is really 

based on the fact that as a part of the addictive process, and even 

indeed in some other behaviors that lead to criminality and lead 

to criminal behavior, really are the result of errors in thinking. 

And I remember hearing a particular presentation from a social 

scientist out of California, who talks about people with sociopathy 

and the inability to kind of—

Senator CONRAD. Think straight. 

Ms. LARSON. Or think straight but also to discern right and 

wrong, and errors in thinking mean that you are not able to understand that if you take a particular action it is going to lead to particular consequences and so the cognitive approach to treatment, 

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which is woven into the Matrix Model, for instance, really works 

very hard at helping clients to learn how to think differently, to 

apply different solution, problem-solving approaches to their lives 

so that they in turn can learn how to make better choices when 

they are on the outside. 

Senator CONRAD. The second thing that you said that really 

caught my attention was this notion of craving. You know, I have 

referenced conversations we had in Grand Forks last night about 

parents who really abandon their children. I mean they are not 

feeding them. They are not caring for them. They have just basically abandoned their kids. You know, that goes against such deep 

parental feelings. What is going on that could lead somebody to do 

that? 

You talked about this overwhelming craving. So how do you deal 

with that? Are there drugs that people take or what is done to offset that powerful craving that these people experience? 

Ms. LARSON. Well, first of all, you have to get people into treatment and again understand the brain biology that you have lost 

the ability to produce dopamine and serotonin and other 

endorphins, and those are the things that make you and I feel well, 

be in balance, to be able to function normally. 

Senator CONRAD. To have a sense of well-being? 

Ms. LARSON. Absolutely. 

Senator CONRAD. So what do you do about that here? 

Ms. LARSON. As a result of that as you take that drug away, you 

have somebody who is in the acute phase going to go into real 

crash mode. The only effective medication approach that we have 

to date, as it pertains to methamphetamine, is to use some lowdose antidepressants in the early acute phase of withdrawal to try 

and balance out some of that. 

Senator CONRAD. Offset that. 

Ms. LARSON. Right. 

Senator CONRAD. I see. Do you give them serotonin? 

Ms. LARSON. Well, unfortunately, we don’t have the ability to 

give them those chemicals to replace those chemicals. They are naturally occurring in the brain function and right now there’s a tremendous amount of research underway for pharmaceutical kinds of 

supports to all kinds of addictions but for methamphetamine, unfortunately, there isn’t anything in particular yet in replacement. 

Senator CONRAD. So it is only antidepressants or something that 

can in some way tamp down that? 

Ms. LARSON. Right. 

Senator CONRAD. OK. I wanted to ask you both what is the single most important thing the Federal Government can or should do 

in terms of treatment, because that is basically what this hearing 

is about. My colleagues on the Budget Committee, their responsibility is to divvy up the pie. Where are the resources going to go? 

What is the message that we need to deliver to them about what 

the Federal Government could or should be doing on this front? 

Ms. LARSON. Well, there is always the need for more funding for 

adequate treatment, and by that I mean that we have to get away 

from this—I like to say that what we’ve haveten into in terms of 

treatment for this disease is that we are treating a long-term 

chronic disease as though it’s an episodic acute event. 

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And so we need to actually do some work in understanding the 

number of people who need the longest length of treatment and 

then perhaps less treatment using the principles, using the understanding of symptomatology, using the findings of Project Match, 

which is the longitudinal study on outcome versus types of treatment, but then we also need to, I think, very, very seriously address in the Substance Abuse Prevention and Treatment Block 

Grant whether there is adequate funding for treatment and whether some of what is seen as not the demonstration project treatment 

does need to be diverted into the more long-term funding for 

States. 

Most people, especially with methamphetamine addition, lack 

any kind of resource to be able to pay for that treatment. Some 

people do have private insurance. Most of that is limited in the 

length of stay that is often needed. 

So we need to be sure that there are enough funds that allow the 

kinds of treatment that will ensure the best outcomes in the long 

run. We have to—I think that if we were able to provide long 

enough treatment and treatment involvement, even if it is almost 

a once-a-week drop-in after six, seven, 8 months of treatment for 

the person who is making good progress, that in the long run we 

would see a reduction in overall costs to the system than it is costing us to provide that kind of treatment. 

Senator CONRAD. So the notion is that you get somebody and you 

have an acute treatment and then they emerge and it is over, you 

are done with them, that is just the wrong model? 

Ms. LARSON. It is. 

Senator CONRAD. What you are saying is, yes, you have to treat 

them acutely, but then you have to followup and that may be a 

very long life enterprise. 

Ms. LARSON. And, Senator Conrad, I think that one thing that 

I would very much like to see and it didn’t happen while I was 

working in the division but was beginning to be talked about. I 

think we see some of it emerging in the—in the Robinson Recovery 

Center is the funding of something called therapeutic community. 

And therapeutic community is really a residential approach to 

treatment that does take the person to the point of self-sufficiency 

where they are working as they are involved in treatment, and I 

know ShareHouse has done some of that approach for quite some 

time but it, really embraces the person to learn how to live normally without drugs or alcohol. I would like to see us be able to 

have funding for more of that. 

Senator CONRAD. OK. Karin Walton, what would you say is the 

single most important thing the Federal Government can or should 

be doing with respect to treatment? 

Ms. WALTON. Funding is always the key answer to that and, you 

know, in the area of prevention, which I’m testifying in support for 

today, it’s usually the lowest funded area. At the same time, you 

cannot measure prevention alone. We can only measure how it impacts enforcement and treatment, and as those numbers go up and 

down, then we’re looking at whatever prevention efforts have 

helped to impact that. 

You know, I believe a strong State infrastructure will equal Federal funding. North Dakota has not received Federal funding from 

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several grants, Expansion Grants, Access to Treatment Grants, the 

Statewide Initiative Prevention Framework Grant, and we’re talking millions of dollars. There is also one other one that I can’t—

I’m not recalling. 

Ms. LARSON. Methamphetamine Grant. 

Ms. WALTON. Methamphetamine Grant that we have not received funding, you know, despite some of the statistics that we 

have compared to—to national. And when we look at the funding 

that is cut for law enforcement and treatment, that’s going to impact the entire realm of prevention as well, so I think it’s very important. 

Senator CONRAD. Let me just tell you that that map tells a big 

part of the story in terms of funding. I tell you, you know, we started this methamphetamine, antimethamphetamine, caucus and it 

was really striking. We have almost a totally different reality. I 

come home. The thing that people talk to me about, threat of methamphetamine. 

My colleagues from those States that are in gray and the light 

brown it is just almost not on their horizon. It is not on their experience. It is not what people are talking to them about, and we 

have these discussions and debates on a number of committees, 

both the Appropriations Committee and the Budget Committee, 

and our colleagues from the East almost thought it is a made-up 

deal, you know. That was kind of their reaction. That this is just 

a way of funnelling funding to more rural parts of the country. 

That’s kind of the way they looked at it. 

You know, they do not hear anything about methamphetamine. 

What are you talking about? So that is why this hearing is important, and I think it also very important this message that treatment and prevention are a very important part of this overall effort. In fact, ultimately I have now concluded we are not going to 

be successful only focusing on law enforcement prosecution. 

If we do not treat these people over time and treat them successfully, this problem is not going away. It is not even going to be dramatically decreased because this is such a vicious, vicious drug. 

And prevention, if ever there was a case an ounce of prevention is 

worth a pound of cure, this is probably it. 

Somehow we have to get the message out to people do not even 

try this stuff for God’s sake. It is so destructive. It is so damaging, 

and you may not only take yourself down, you may take your family down and you may take your children down. 

You know, I just had somebody a week ago come to my office in 

Washington, and he was involved in education in North Dakota, 

and he said I am seeing something that is so alarming because I 

am seeing women with children increasingly go to meth, and 

whether it is from boredom or what is causing people to try it I do 

not know, but he said it really is alarming and the people get on 

this stuff and they quit taking care of their kids. 

Now, that is serious, serious business, and, you know, in my experience there is almost nothing more powerful than a mother’s attachment to her children. You know, that is deep in the genetic 

code, and it tells you something about the really horrible affect of 

this drug when a mother would abandon her children. 

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So this is something we have to get across to people. For God’s 

sake don’t take this stuff, don’t try it, and that’s just something we 

have to as a society try to send a very clear signal on. 

Again I appreciate very much your taking the time to provide 

testimony to the committee. With that we’ll adjourn the hearing of 

the Senate Budget Committee. 

[Whereupon, at 4:37 p.m. the committee was adjourned.] 

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SENATE BUDGET COMMITTEE PUBLIC HEARING REGARDING BUDGET IMPLICATIONS OF 

MEETING VETERANS’ HEALTH CARE NEEDS 

THURSDAY, JUNE 1, 2006

U. S. SENATE, 

COMMITTEE ON THE BUDGET, 

Fargo, North Dakota 

The public hearing was held at 2:30 p.m. at North Dakota State 

University in the Prairie Rose Room. 

Present: Senator Kent Conrad, Bob Hanson, Warren Tobin, Sebastian Roll, John Hanson, Wally Buckingham, Dan Stenvold, and 

James Mueller. 

Staff present: Jim Esquea. 

OPENING STATEMENT SENATOR KENT CONRAD 

SENATOR CONRAD. Let me bring this hearing before the Senate 

Budget Committee to order. Let me thank all of you for being here. 

Let me thank the witnesses in advance for their testimony here 

today, and let me indicate that I believe this hearing is critically 

important to lay on the formal record once again the justification 

for the funding needs for our nation’s veterans. 

All of us know there has been over the last 12 months some significant controversy with regard to especially veterans’ health care 

and the proper and appropriate funding level. I deeply regret that 

within the other body what has always been the case was not permitted this year. And that is, the testimony of some of our most 

respected veterans’ organizations on the question of what the needs 

were of their membership. 

I see that as a significant breach, and I hope in some small part 

that this meeting, this hearing, will once again indicate the profound respect we have for our nation’s veterans in the Congress of 

the United States and that we are taking very seriously the recommendations of those groups who once again have provided an 

independent budget, one that is an objective assessment of the 

needs of our veterans. Not one driven by any political agenda but 

one that is based on need. That I think is critically important to 

remember. 

Last night I had the privilege, along with General Haugen, of 

presenting Woodrow Wilson Keeble’s family with the medals that 

he earned in the Second World War and in Korea. He was in Guadalcanal. He was in some of the fiercest battles, including the last 

major offensive in the Korean War. 

He is the most heavily decorated North Dakota veteran. He is 

somebody that won the Silver Star, two Bronze Stars, four Purple 

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Hearts, the Distinguished Service Cross. He is truly a remarkable 

man. 

In one confrontation, he personally took out four machine gun 

men and then proceeded to take out seven other enemy combatants 

all in one engagement. He is now under consideration for the 

Medal of Honor, and I was able to announce last night that the 

Secretary of the Army yesterday has recommended that he receive 

the Medal of Honor. That, of course, is this nation’s highest military award. 

North Dakota has a very proud tradition of service. North Dakota has produced ten Medal of Honor award winners, more than 

any other State with the exception of New York, and in truth one 

of New York’s should have been one of ours, Teddy Roosevelt, who 

if anybody was able to ask him he would tell you his life and experience in North Dakota is what contributed to his conduct on the 

battlefield. 

So we have a proud tradition and it goes beyond medal of award 

winners. Today, North Dakota ranks No. 1 in National Guard 

membership per capita and at various times has ranked No. 1 in 

per capita National Guard mobilization during the wars in Iraq 

and Afghanistan. And with all of these men and women in harm’s 

way, we have had many, too many, make the ultimate sacrifice. 

Tonight I will be at a memorial service for a young man who 

paid the ultimate sacrifice in Iraq. Tomorrow there will be a funeral here in Fargo. So we ask much of our men and women in uniform and it is our duty to provide them with the proper training, 

knowledge, equipment, and ultimately the health care that they 

have been promised. 

Let me join veterans in expressing deep concern over the news 

just this past week as we learned that personal data, names, dates 

of birth, Social Security numbers, of millions of veterans were comprised by our own Federal Government. USA Today headlines tells 

it all: Data on 26.5 million veterans stolen. Now veterans will be 

saddled with the extra burden of monitoring their bank accounts 

and credit cards to make certain someone hasn’t stolen their identity.

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The Department of Veterans Affairs failed in assuring that this 

sensitive data was protected. I find this regrettable and those who 

are responsible should be held to account. 

We must also ensure proper funding for veterans health programs. Let’s go to that second slide, Jim. 

Since 1999, enrollment in veterans’ health care programs has increased 79 percent. Let me say that again because I think this is 

lost on some of my colleagues and they must understand. Enrollment in veterans’ programs has increased by 79 percent. So one of 

my colleagues said, well, funding is up substantially. Yes, funding 

is up but funding is not up as rapidly as enrollment is up and not 

up as rapidly as demand for resources is up. 

This is the critically important point that needs to be explained 

and that is one reason we are holding this hearing today to make 

on the record, and let me once again indicate this is a formal hearing before the Senate Budget Committee and this becomes a part 

of the official record. 

In 1999, as this chart shows, 4.3 million veterans signed up for 

health benefits. That number jumped to 7.7 million last year. The 


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veterans who seek care from the VA are aging, have lower incomes, 

and require more complex medical care. On average a veteran who 

receives health care from the VA will use the VA system ten times 

over the course of a year.

Let’s go to the third chart if we could, Jim. 

More veterans not only need medical care but they generally 

have a tough time making ends meet. I am strongly opposed to proposals in the administration’s budget concerning veterans’ health 

care. 

The budget proposed to cut veterans discretionary funding by 10 

billion dollars over 5 years. 

Two, to impose a $250 enrollment fee on Priority 7 and 8 veterans, resulting in VA treating 200,000 fewer veterans. Let me just 

say when veterans signed up, when they came into the service, nobody said to them there were going to be different categories. Nobody said to them some would get treated one way and some would 

get treated a different way. That was not the promise that was 

made, and we have an obligation to keep the promise and the 

promises that were made. 


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No. 3, the administration to propose increasing the drug co-payments from $8 to $15 for Priority 7 and 8 veterans. 

And, fourth, to suspend enrollment of new Priority 8 veterans 

into the VA health care system altogether.

Those were the proposals we received from the administration. 

The administration has pursued spending and tax policies that 

have now put us at record levels of deficit and debt. Because of 

these deficits, the Congress is under tremendous pressure to make 

substantial cuts in spending, but funding cuts in veterans programs are a bad idea. 

Let’s go to the fourth chart if we could. 

In North Dakota, there are special challenges to providing the 

best possible medical care to veterans. Some of these issues include 

limited availability of specialized care, long distances to reach care 

centers. 

Fifty percent of our State’s vets live over 100 miles from the 

nearest city-based center. You know, this is different than in more 

urban parts of the country and those differences have to be recognized and respected.


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Let us go to the fifth chart if we could, Jim.


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There is good news. Here is a list of just some of the accomplishments we have achieved in Washington for our veterans here in 

North Dakota. 

$12 million to improve the Fargo VA Medical Center. This has 

been a special passion of mine. Ever since my Uncle Curry was in 

the VA Medical Center here and I visited him on one very hot July 

day and it was over 100 degrees on his ward, and I thought to myself if I was ever in a position to somehow improve this condition 

I would do everything I could to change it. 

1.6 million dollars to fund transitional housing for homeless veterans and five new outpatient clinics for veterans that are completed or in development. And those five are in Williston, Dickinson, Jamestown, Devils Lake, and Grand Forks. 

The commitment that we have from the VA now is that three of 

these clinics will be open before the end of this year. I am delighted 

by that. This has also been a long-term project.


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I look forward to the testimony of the witnesses here today. 

Among the issues I hope you will address are what are the biggest 

challenges you see in providing North Dakota veterans access to 

timely and quality medical care and given our budget constraints 

what should the priorities be? 

Thank you all for being here. Again I want to emphasis this is 

a formal hearing under the rules of the U.S. Senate and so the 

rules that are applied in Washington will apply here. That is we 

request that nobody indicate either their agreement or disagreement with any statement of the witnesses. The witnesses should 

feel completely unencumbered and feel that they have the absolute 

right to express themselves fully and honestly without fear of retaliation. 

I thank again the witnesses for being here. I am going to turn 

to our first panel and, Bob Hanson, thank you so much for being 

here. I appreciate very much you have taken the time to participate. This is important to us that we have the very best record that 

we can construct here today because it will be based on this record 


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that we are able to meet the complaints of some who have said we 

should reduce the funding that we have proposed. 

With that, Commissioner Bob Hanson, the Commissioner of Veterans Affairs for North Dakota. Welcome. 

MR. HANSON. Thank you, Senator, and it’s certainly an honor to 

be here and share ideas, concerns, and perhaps some of the solutions. 

I think your hearing here today is just another example of what 

we in North Dakota have come to expect from you because of your 

continued concern for the welfare of our veterans. And on behalf 

of the State’s nearly 60,000 veterans and their families, we appreciate it. 

The VA’s mission, as I’ve been told, is to care for the veteran and 

their family, and the proposed budget for veterans’ health care and 

associated needs does not, as it appears to me, live up to the VA’s 

mission. However, it is somewhat of an improvement over past 

budgets. 

First, let me make it clear on the record that the Fargo VA’s 

Medical and Regional Centers, benefits centers, are two of the finest, most caring, concerned, and efficient VA entities in the entire 

United States. 

They truly care for the veterans and the veterans especially who 

utilize the Fargo system. I have the highest respect for the staffs 

here and the work they do. 

The concerns that I will express today are not associated in any 

manner with staff at the Fargo VA Regional facilities, but they are 

directed toward issues and policies, not individuals, and especially 

not the Fargo VA. 

My concerns basically are seven areas, mandatory funding, access for health care for veterans in rural States, cooperative agreements/veterans convenience, eligibility for care, and providing the 

necessary care with the best professionals in the field and comfortably reimbursing veterans for their travel costs. 

Now, I fully realize that many of the issues I’m bringing forward 

will not be funded at this go-around and but we hope something 

will happen in the future. 

First of all, mandatory funding. I don’t think there’s a veteran 

in this country who wouldn’t agree that this is probably the top priority that needs to be addressed. Caring for the health care needs 

of our veterans is, in my mind, the cost of war. A cost of war which 

will continue until such time as there are no longer any more veterans. It’s a price we as a nation pay for peace and it must be 

treated as such. 

Some of us are allowed through the door, while others are shut 

out. Mandatory funding of health care for all veterans, for all veterans, is necessary and I am hoping it will be a priority concern 

of Congress and the administration regarding Veterans. But, above 

all, the reason for it is because it is the right and proper thing to 

do. 

Access is my second concern. It’s no secret that veterans in rural 

States do not have the access to VA health care as those in more 

populated States. The VA is addressing this issue through the use 

of community-based outreach clinics and outreach clinics, and 

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kota veterans will have access to three new outreach clinics opening in three different geographical areas in our State by the end 

of this fiscal year, two more, like you said, coming on board by the 

end of next fiscal year. 

And we appreciate the work that VISN 23 has done and the 

Fargo VA individuals have done for helping this come to fruition. 

However, it’s still common for veterans to travel 300 miles or more, 

one way, to receive care at the Fargo VA, which leads me to my 

next concern. 

That’s cooperative agreements and veterans’ convenience. As primary care is becoming more accessible in our State, we must seek 

the same for specialty care. 

I’m at a loss to understand why a North Dakota veteran must 

travel hundreds and even thousands of miles to receive VA care 

when the same care is available in their local community at a good 

facility, health care facility, there or at a nearby community. 

For example, I was told of a cardiac patient who went to the 

emergency room in a western North Dakota hospital, a well-known 

hospital. He was admitted to the emergency room and was then required to be transferred to a VA hospital over 1,260 miles away in 

St. Louis, which is because that was the closest VA bed available. 

That is not looking out and caring for the veteran or his family. 

Another example I was told about involved a veteran from central North Dakota who was sent to the Minneapolis VA to have one 

of his knees x-rayed. Now, why do we send someone to Minneapolis? 

Another example is a good friend of many of ours, an Agent Orange victim, had cancer in Minot, was required to come to Fargo 

for his treatment virtually every week while the same care could 

have been given in Minot. Life is precious and the time that one 

has left when you know that you don’t have a lot of time shouldn’t 

be spent having to mess with government bureaucracy and I think 

we can do better. 

I would encourage the establishment of more cooperative agreements with medical facilities throughout the State so a veteran 

would not have to travel great distances to receive the care to 

which they have earned and to which they are entitled. 

I would encourage a review of the current reimbursement rate of 

11 cents per mile but, you know, that’s not really true either because there’s a $3 deduct for each way. 

My next issue that I have concerns about is eligibility for care. 

I don’t believe access to VA health care benefits should be selectively applied to veterans. Veterans, for example, in our State veterans’ home are denied access to any VA health care, primary VA 

health care, or prescriptions simply because they are a resident of 

a veterans’ home. 

It’s also my belief all Category 8 and all of the categories, all 8 

categories of veterans, should not only be eligible for VA health 

care benefits but also should receive VA health care benefits if they 

so desire. The inclusion of these veterans for VA health care benefits is only fair. 

The next one is providing necessary care using the best in their 

selected field. Every war is different, including the current one. 

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ical and mental, are going to have long-lasting effects, which in 

some cases will never be cured. We must commit to providing these 

individuals with the best professional, most compassionate, and 

easily accessible care available. We need a strong commitment, 

funding commitment, for our Vet Centers program. 

Our North Dakota Vet Centers are doing an excellent job of helping our veterans in need with the resources they have. Our mental 

health units need to be adequately staffed to provide veterans with 

timely access and care. 

The VA should be funded at a level allowing the continual development of, and allowing for, the kind of adaptive equipment and 

vehicles which meets the needs and desires of our younger veterans. The prosthetics and sensory aids services and rehabilitation 

services at our Fargo VA are outstanding in assisting the veterans, 

but it is important we do all in our power to stop the growth of 

homeless veterans as well. 

One of our goals as a nation should be nothing less than to make 

sure no veteran shall ever go homeless. Our Fargo VA has an outstanding Homeless Veteran Program with a committed staff second 

to none. 

Believe it or not, I understand my proposals will cost some 

money, lots of money. However, the commitments that have been 

made by our nation’s veterans deserve no less, and we all need to 

look to the future for the possibilities to meet their needs. 

The independent budget has been forthright and pretty much on 

target. The preparers of these budgets have worn, or are wearing, 

the uniform of our nation’s armed forces, and I encourage you and 

your colleagues to listen closely to those who prepare this budget. 

These individuals know firsthand the needs of our nation’s veterans. 

The last issue I feel must be addressed by Congress is the identity theft problem. News released today stated the stolen data also 

included, in many cases, phone numbers and addresses. This serious security breach needs to be handled in a swift, responsible 

manner in the best interests of the veteran. As of now supposedly, 

supposedly, no medical records were compromised. I’m hoping that 

this is true and that measures have been and are being taken, if 

not already in place, to keep the same type of theft from occurring. 

The veterans have fulfilled their commitment. It’s now time for 

the United States of America to fulfill their own commitment. I 

would like to end my presentation with this veteran’s quote that 

I came across recently. ‘‘The military taught me how to kill. But 

not how to forget.’’ We must not forget our veterans. Thank you. 

[The prepared statement of Mr. Bob Hanson follows:]

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SENATOR CONRAD. Thank you, Commissioner Hanson, for that 

very compelling and important testimony, and I thank you for providing it to the Senate Budget Committee. 

Warren Tobin, the outgoing Department Commander of the Disabled American Veterans and the Stutsman County Veterans Service Officer is also here to testify. 

Warren, thank you so much for taking the time to come here. 

I want to again emphasis to people who are here that this becomes part of the formal record of the Senate Budget Committee 

and will be used in the discussions and the debate that will follow, 

both in the conference committees of the budget and in the floor 

debate on the question of the appropriate level of funding and the 

priorities for that funding, so this testimony here today has a critical importance. 

It assumes an even greater importance because of the unfortunate circumstances where very respected organizations, veterans’ 

organizations, were prohibited and prevented from testifying in 

what I deeply regret occurred in the other body, but we’re having 


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a chance here for those veterans’ organizations to be heard and to 

lay on the record the vital needs of our veterans. 

Warren, thank you for being here. 

MR. TOBIN. Thank you very much, Senator, Mr. Chairman, and 

Members of the Committee. 

On behalf of Disabled American Veterans, DAV, Department of 

North Dakota, I wish to express my deepest appreciation for the 

opportunity to present testimony for this committee’s hearing on 

the budget implications of meeting veterans’ health care needs. 

Mr. Chairman, I understand my written testimony is already 

available for record, and with your concurrence I would like to 

present oral testimony to amplify the written record. 

SENATOR CONRAD. Without objection Mr. Tobin. As history has 

demonstrated, the discretionary funding of VA programs, primarily 

in the health care arena, has resulted in shortfalls. Over the years, 

policymakers have instituted ‘‘temporary’’ measures to help in reducing areas where the health care is underfunded. 

For example, a few years ago, temporary co-payments for medical 

appointments and prescriptions were instituted to help pay for the 

cost of VA medical care. 

These so-called temporary measures have obtained a permanent 

status and, approximately, 3 years ago these payments were increased due to the increasing costs of providing for health care. 

Even with increased payments from sick and disabled veterans, 

funding needed over the years has not kept pace with medical inflation, let alone the increased demand for services as your chart 

indicated. 

The enrollment for VA medical care increased 161 percent between fiscal years 1996 and 2005. Funding, however, only increased 34 percent during that same period when adjusted to 1996 

dollars. 

My home county in Stutsman County is no exception. In 2000, 

the VA spent approximately 1.6 million for medical care and in 

2004 expenditures were a little over 2.1 million dollars. This is an 

increase of 32 percent in the 4-year period for which the data is 

available and not enough to cover the increased demand for services and the medical inflation. 

Last year, the administration submitted an amendment to its fiscal year 2006 budget request to address an additional 1.9 billion 

funding shortfall. As depicted by this funding amendment, the 

areas requiring additional funding reveal fundamental changes in 

both the practice of medicine and the age of the veteran population 

seeking health care from the VA. 

Such changes must be addressed by Congress and the VA to ensure, among other things, the best stewardship of our taxpayer dollars, the maintenance of the VA’s high quality of medical care, the 

provision of that medical care be provided in a timely manner, and 

the accessibility to that care by sick and disabled veterans. 

Access to VA medical care is a primary concern to North Dakota 

veterans and many veterans across the country. As a County Veterans Service Officer, an important duty I have is to assist veterans in obtaining access to the VA medical and health care. 

I’m a coordinator for our Jamestown DAV van, which is a portion 

of the DAV Transportation Network, and I’m occasionally a volunVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00150 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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teer van driver. I’m extremely—I’m extremely proud of North Dakota’s DAV transportation program. Last year, our State’s volunteers spent 10,238 hours driving 2,528 veterans across 255,608 

miles. Our program ranked second only to New Mexico averaging 

101 miles driven per veteran served. 

I would like to take this opportunity to share with you just a few 

examples of transportation and access, which will help you understand the importance of this issue. We are anticipating the opening 

of an outreach clinic in three communities this year. These clinics 

would provide primary and mental health care to our historically 

underserved veteran population in a more efficient and effective 

manner. 

The veterans in my area are eagerly anticipating the opening of 

a Jamestown outreach clinic. This clinic will help veterans in my 

local area with primary care needs. 

However, we are concerned that no decision has been made regarding inpatient services when VA is well aware that 63 percent 

of the over 55,000 North Dakota veterans far exceed the 60-mile 

driving distance to Fargo VA Medical Center. Furthermore, 68 percent must drive 120 miles or more to receive tertiary care. 

We still anticipate having many veterans traveling to specialty 

care clinics at the Fargo VA Medical Center and throughout the VA 

network. One of my colleagues in the northwestern portion of the 

State tells me that there is a veteran who must travel from his 

home to Iowa City, Iowa, for neurological treatment. That is a distance of approximately 1,000 miles one way. 

I would add to that example the circumstances surrounding the 

travel of two of my county’s veterans. 

Both of these veterans frequently need treatment at the St. Paul 

VA Medical Center for service-connected conditions, and I think 

Mr. Hanson mentioned my first one, and that individual, that veteran, is employed full time and for a 15-minute or 30-minute appointment must take a day of sick leave from his job. 

On one occasion, he took a day of sick leave and drove 700 miles 

round trip for an x-ray of his knee. No other activity that day was 

either needed or required or scheduled. 

In the second instance, the veteran has extreme difficulty walking and his vision is impaired. For him an appointment at the VA 

St. Paul Medical Center requires two bus tickets, one for himself 

and one for his seeing companion, a 10-hour bus ride each way and 

at least 2 days away from home. By the way, this gentleman is 82 

years old and this is quite a hardship on him. 

Recognizing that VA medical facilities are unable to provide specific treatment and cannot provide treatment economically due to 

geographic inaccessibility, current law allows certain veteran patients to be authorized to receive treatment from non-VA health 

care providers at VA expense. 

Specifically, current law limits the VA in contracting for private 

health care services to instances where the VA facilities are incapable of providing necessary care for veterans, when VA facilities are 

geographically inaccessible to a veteran for necessary care, where 

medical emergency prevents a veteran from receiving care in a VA 

facility, to complete an episode of VA care, and for certain specialty 

examinations to assist the VA in adjudicating disability claims. The 

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VA also has authority to contract for services in VA facilities for 

scarce medical specialists. 

Beyond these limits, there’s no general authority in the law to 

support any broad contracting for populations of veterans. The judicious use of fee basis privileges is what I’m talking about is one 

method to improve access to specialty and tertiary care. 

In recent years, we have seen a trend to limit the issuance of fee 

basis cards, privilege cards, to recall cards from disabled veterans 

that have already been issued and to deny the bills for care for authorized users at the Fargo VA Medical Center. 

I was not given the specific figures on that, but I was told by my 

fellow Stutsman Service Officers and we know of several hundreds 

of cases of this happening in the last two or 3 years. 

The DAV’s position on contracted or fee-based careis well-known. 

The DAV believes that the best course for most enrolled veterans 

in VA health care is through the continuity of care in facilities 

under the direct jurisdiction of the Secretary of Veterans Affairs. 

For the past 25 years or more, our organization has consistently 

opposed a series of proposals seeking to contract out or to privatize 

VA health care to non-VA providers on a broad basis. Ultimately, 

these ideas were rejected by Congress. 

We believe such proposals ostensibly seeking to expand VA 

health services into broader areas serving additional veteran populations at less cost, or providing health care vouchers enabling veterans to choose private providers in lieu of VA programs, in the 

end will only dilute the quality and quantity of VA services for all 

veteran patients. 

We believe the VA contract care for eligible veterans should be 

used judiciously and only in specific circumstances so as not to endanger VA facilities’ ability to maintain a full range of specialized 

inpatient services for all enrolled veterans, particularly while the 

VA is operating in a resource constrained environment. 

We further believe that the VA must maintain a critical mass of 

capital, human, and technical resources to promote effective, highquality care for veterans, especially those disabled in military service and those with highly sophisticated health problems, such as 

blindness, amputations, spinal cord injury, or chronic mental 

health problems. 

In closing, the members of the DAV of North Dakota sincerely 

appreciate the committee for holding this hearing and for its interest in improving benefits and services to our nation’s veterans. We 

deeply value the advocacy this committee has demonstrated on behalf of America’s service-connected disabled veterans and for their 

families. 

This concludes my testimony and I would be happy to answer 

any questions you may have. 

[The prepared statement of Warren Tobin follows:]

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SENATOR CONRAD. Thank you very much, Warren. I think it is 

very important for this to be a part of the record and I very much 

appreciate your taking the time to be with us today. 

We are also joined on the first panel by Seb Roll, the National 

Vice Commander of The American Legion. Seb, I appreciate you, 

too, joining us and providing your testimony. Please proceed. 

MR. ROLL. Thank you. Senator Conrad, it’s an honor for me to 

appear before you to present The American Legion’s view of VA 

health care. The American Legion has a proud tradition of advocating on behalf of America’s veterans. This testimony reflects our 

continued commitment to ensuring VA is capable of meeting its obligations to all of America’s veterans and their families. 

Each generation of veterans has earned the right to timely access 

to quality health care and transitional programs available through 

the Department of Veterans Affairs. The American Legion will continue to work to ensure that VA is indeed capable of providing 

‘‘care for him who shall have borne the battle for his widow and 

his orphan.’’


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With young service members continuing to answer the nation’s 

call to arms in every corner of the globe, we must now, more than 

ever, work together to honor these sacrifices. As veterans of Operation Enduring Freedom and Operation Iraqi Freedom return 

home, they are turning to VA not only for health care but also for 

assistance in transitioning back to the civilian world. 

VA must be funded at levels that will ensure that all enrolled eligible veterans receive quality health care in a timely manner. As 

National Vice Commander of this great organization, I stand ready 

to work with you to accomplish this task. 

VA budget. Recent revelations that VHA’s budget requests for 

fiscal years 2005 and 2006 contain shortfalls in funding came as no 

surprise to The American Legion. After visiting VA medical facilities across the nation, we knew that the funding recommendations 

we presented last year more accurately matched the actual budgetary needs of the VA than the President had recommended or 

Congress enacted. 

The American Legion thanks Congress for ensuring the emergency supplemental appropriations to cover these shortfalls so that 

the VHA is not forced to further ration care and delay much needed maintenance and acquisition. VA medical care must be adequately funded in order to ensure facilities are staffed, equipped, 

and maintained at a level that will allow all veterans to be treated 

in a timely manner. 

The VA is now in the process of establishing outreach clinics in 

Jamestown, Dickinson, and Williston. While we are certainly appreciative of the efforts you and the rest of the congressional delegation have made to bring these clinics to reality, we have concerns. First and foremost is the funding mechanism. We understand that the funds to open and operate these outreach clinics will 

come from existing funds within the VISN. 

At a time when the entire VA system is woefully underfunded, 

we find it disconcerting that this VISN will now have to redirect 

funds from its existing facilities in order to fund the outreach clinics. This is simply another example of why there needs to be mandatory funding of the VA health care system. 

Proposals to improve the VA budget by charging veterans an annual enrollment fee and increased co-payments for prescription 

drugs is not the solution to inadequate funding. Balancing the VA 

budget on the backs of veterans and their families is wrong. Neither is preventing previously eligible veterans from enrolling for 

the VA health care the solution. 

The American Legion adamantly believes that closing VA’s doors 

to a select population of veterans is wrong. Ensuring VA is funded 

at levels that allow all eligible veterans to receive care is the solution. Assured funding. In an effort to provide a stable and adequate 

funding process, The American Legion fully supports assured funding for the veterans medical care. 

Under the current discretionary funding method, VA health care 

funding has failed to keep pace with medical inflation and the 

changing needs of the veteran population. 

VA has been forced to ration care by denying services to eligible 

veterans. VA had to forgo the modernization of many of its faciliVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00157 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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ties and the purchase of necessary state-of-the art medical equipment. 

VA is subjected to the annual funding competition for limited discretionary resources. 

Additionally, the current discretionary funding process leaves VA 

facility administrators without a clear plan for the future. 

The American Legion strongly supports legislation that would establish a system of capitation-based funding for the VHA. 

Annual funding would be without fiscal year limitations, meaning that any savings VHA realized in the fiscal year would be retained rather than returned to the treasury, providing VHA with 

incentives to develop efficiencies and creating a pool of funds for 

enhanced services, needed capital improvements, expanded research and development and other purposes. 

The Veterans Health Care Administration is now struggling to 

remain its global preeminence in 21st century health care with 

funding methods that were developed in the 19th century. No other 

modern health care organization could be expected to survive under 

such a system. The American Legion believes that health care rationing for veterans must end. It is time to guarantee health care 

funding for all veterans. 

Medicare reimbursement. The American Legion believes that 

Congress should allow VA to bill, collect, and retain third-party reimbursement from Medicare on behalf of Medicare-eligible veterans 

treated for allowable nonservice-connected medical conditions. 

Nearly all veterans pay into Medicare for their entire working 

lives. However, when they are most likely to need medical services 

from the hospital system designed specifically for them, they must 

turn elsewhere because VA cannot bill Medicare. This is wrong, 

and it is something that Congress can and should correct. 

Additionally, all third-party reimbursements, co-payments, and 

deductibles should be added to the budget, not counted as an offset 

against it as they are received by treatment of nonservice-connected medical conditions. 

The American Legion firmly believes that making VA a Medicare 

provider and designating VA medical care as a mandatory funding 

item within the Federal budget would enable VA to fulfill its mission to care for those who have borne the battle. 

CARES. Over the past 4 years, The American Legion has carefully followed the progress of the Capital Assets Realignment for 

Enhanced Services process. We have participated at each stage of 

the process by gathering information on VA medical centers 

throughout the country to make certain medical services were not 

ignored in an attempt to downsize the VA health care system. We 

did this with the help of Legionnaires at both the department and 

post levels who care about the quality and timeliness of medical 

care for veterans. 

To successfully implement the CARES decision, VA has estimated that it will require an infusion of 1 billion per year for the 

next 6 years, with continuing substantial infrastructure investments well into the future. The CARES implementation must take 

into consideration the VA’s role in emergency preparedness, organizational capacity for special emphasis programs like mental health, 

long-term care, and homeland security. 

153

Funding for CARES construction, estimated at approximately 6 

billion when plans were announced in May of 2004, has failed to 

be provided in the Federal budget. 

The American Legion has supported CARES on three conditions. 

One, that veterans are included in the decisionmaking. Two, that 

funding be provided and, three, that the end result is better health 

care for veterans. The American Legion asserts that now is certainly not the time to reduce VA facility capacity when there are 

more than 500,000 newly discharged veterans from active duty 

after service in Iraq and Afghanistan. Nearly 150,000 of these new 

veterans have poured into the VA health care system, which led to 

the 1.5 billion shortfall in VA funding last year. 

Increased need for PTSD services. Senator Conrad, another key 

issue of concern is The American Legion’s dedication to ensuring 

that VA is capable of meeting the mental health care needs of both 

the current population of veterans seeking care and the new generation of veterans returning from Iraq and Afghanistan. 

As the Global War on Terror continues, casualties are mounting 

and the ability of the Nation to take care of those who have fought 

bravely continues to be tested. 

We must not fail. History has shown that the cost of war does 

not end on the battlefield. Service members do not all suffer from 

obvious injuries such as amputations, gunshot wounds, and other 

severely disabling conditions. The estimation has been as high as 

30 percent of those serving in Operations Enduring Freedom and 

Iraqi Freedom will suffer the hidden wounds of traumatic stress 

and other psychiatric conditions due to combat exposure and the 

rigors of the battlefield. 

VA’s special committee on PTSD was established 20 years ago to 

aid Vietnam veterans diagnosed with PTSD. Since its establishment, the committee has made many recommendations to the VA 

on ways to improve PTSD services. 

A February 2005 GAO report pointed out that the VA delayed 

fully implementing the recommendations of the special committee, 

giving rise to questions regarding the VA’s capacity to treat veterans returning from military combat who may be at risk for developing PTSD while maintaining PTSD services for veterans currently receiving them. 

In September 1904, GAO also reported that officials at six of 

seven VA medical facilities stated that they might not be able to 

meet an increased demand for PTSD services. Additionally, the 

special committee reported in its 2004 report that sufficient capacity is not available within the VA system to meet the demand of 

new combat veterans and still provide services to other veterans. 

The additional support being provided nationwide by the Vet 

Centers is proving invaluable in assisting veterans. The mission of 

the Vet Centers is to seek out veterans suffering life readjustment 

problems related to their combat experience or as a result of sexual 

assault or harassment while on actual duty—active duty. 

Vet centers serve veterans and their families with professional 

readjustment counseling, community education, outreach to special 

populations, and work with community organizations. Today, 206 

Vet Centers are located in communities throughout the United 

States, District of Columbia, Puerto Rico, Guam, and the United 

154

States Virgin Islands. 65 percent of the 737-member clinical staff 

are veterans and of those over 40 percent are combat veterans. 

Vet Centers are an invaluable resource to veterans and the VA. 

Given the protracted nature of current combat operations, repeated 

deployments, and the importance of retaining experienced combat 

servicemen and women in an all volunteer military, it is essential 

to promote the readjustment of servicemen and women and their 

families. The American Legion continues to be an unwavering advocate for Vet Centers and their most important mission. 

Over the past 3 years, the Legion’s System Worth Saving Task 

Force has completed site visits at every VAMC. During these visits, 

we took special notice of mental health services provided and the 

ability of the facilities to balance the current demand for care along 

with the recently returning veterans who are now turning to VA 

for mental health treatment. 

Like the GAO report, we found that many facilities were increasingly concerned with their ability to handle an increasing mental 

health workload. 

Our site visits revealed a critical shortage in the funding of VA 

health care. A number of facilities reported having to convert capital improvement dollars to health care dollars in order to meet the 

service demands of the current veteran patient population. The 

shifting of these funds has resulted in the delay of needed infrastructure repairs resulting in huge maintenance backlogs at facilities. 

Theft of veteran data. Frankly, Senator Conrad, it is incomprehensible that millions of veterans and their family members are 

now at great risk of identity theft due to the actions of the VA’s 

employee. While this may not appear on the surface to be directly 

related to health care, it is. 

First and foremost, we have to ask how the VA will maintain the 

integrity of a veteran’s health care record. With the information 

that was stolen, a person could assume the identity of a veteran 

and simply secure VA health care services or, worse yet, gain access to veterans’ medical treatment records. 

Someone with the right information could request a copy of a veteran’s VA health care record. How in the world is the VA going to 

know that they aren’t releasing those records to someone who has 

stolen the veterans identity? I doubt they can and that is very disturbing. 

As you know, Senator, many of our veterans suffer from some 

type of mental disorder, such as PTSD, STD, depression, and so 

forth. The theft of these records has caused them immeasurable 

anxiety and may never be able to be taken care of. Why in the 

world has nobody been fired at the VA over this? Our veterans 

have suffered enough already and now, because of some VA employee’s negligence, they are suffering again. 

Senator Conrad, this nation crossed a new threshold on September 11, 2001. American’s sense of invulnerability was forever 

changed by a newly emerging global threat. The need for a strong, 

forward thinking national defense has become paramount. In the 

face of this new threat, the Nation once again turned to a generation of young men and women dedicated to the defense of our freedoms and liberties. With that dedication comes a national obligaVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00160 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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tion to ‘‘care for him who shall have borne the battle and for his 

widow and his orphan.’’

Together we can work to ensure that a strong, forward thinking 

Department of Veterans Affairs will be available to provide for this 

new generation of veterans. 

The brave men and women who are serving in our armed forces 

in Iraq and Afghanistan and throughout the world deserve no less. 

Thank you. 

[The prepared statement of Sebastian Roll follows:]


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SENATOR CONRAD. Thank you. That is very important testimony. 

We appreciate it very much. I just wanted to say on the last point 

that Mr. Roll made, we do have now the resignation of Michael 

McLendon, the deputy assistant secretary, who learned of the burglary within hours of the crime but did not immediately tell topranked officials. I have been told the deputy assistant secretary for 

policy, this gentleman has resigned. 

The assistant secretary for policy and planning has been placed 

on administrative leave, so finally there are some actions to hold 

accountable to those. It was totally inexplicable as to why this man 

took these files to his home. 

You know, what kind of security policy is in place that would 

allow millions of files to be taken out of secure VA headquarters, 

taken to the personal home of someone? For what purpose was that 

done and what security procedure is in place that would ever allow 

such a thing? And now we learn the information today that not 

only in many cases not only names and social security numbers but 

also now we find out that the phone numbers and addresses. 


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It is unbelievable and everyone who is responsible for this has 

to be held to account and that should be the standard that we 

apply. Those who are responsible, not only the person who took 

those home he has to go and he is going. He is being removed, but 

in addition to that anybody who allowed a policy to be in place in 

which records could be taken from the headquarters, that is just 

unacceptable. That is irresponsible and those are people who ought 

to all be removed. 

Let me ask you a set of questions that I would like each of you 

to answer because they are important for the record of the Senate 

Budget Committee. No. 1, I would ask each one of you do you support the independent budget levels called for by the joint work of 

veterans organizations? 

Commissioner Hanson, would you support the independent budget levels? 

MR. HANSON. Senator, yes, I would. I think it’s a good start. It’s 

better than what the administration has proposed; although, I 

think it should be a building block because we have so much more 

to do. 

SENATOR CONRAD. Well, that is a very good point. I want to say 

I want to commend the organizations that have come up with the 

independent budget. I mean I have special responsibility for budgeting to my colleagues. I know how much work, extraordinary 

amounts of work, go into preparing these budgets, and for these 

veterans organizations to take on the task themselves to produce 

an independent budget I think deserves special consideration, and 

I just want to thank them publicly for what they have done. 

Warren, would you support the budget levels called for in the 

independent budget? 

MR. TOBIN. Senator, on behalf of Disabled American Veterans 

nationally, that we—we are—our organization is part of crafting 

that document and has signed on and certainly we fully support 

the independent budget. 

SENATOR CONRAD. I appreciate that. 

Seb, would you speaking on behalf of The American Legion support the budget levels called for in the independent budget? 

MR. ROLL. I’m sure we do. I don’t know how many hours and 

days that The American Legion, Department of American headquarters, spends on this budget, but through the years I’ve always 

felt that we were more accurate than anybody else on the budget 

process about what the American Legion has set up for a budget, 

what is needed in years to come. Absolutely. 

SENATOR CONRAD. I want to just say that I believe that is the 

case. You know, some have said, well, that is gold plated. No, it’s 

not gold plated. I mean I think honestly you could justify several 

billion dollars more given the extraordinary demands on the system. 

Let me just say I have been doing some research on what we are 

finding from Afghanistan and Iraq. For those who have sought care 

from the VA, 37,618 have been diagnosed with a psychiatric disorder. 37,618. 

Close to 1,300 have been diagnosed with psychiatric disorders, 

classified as having symptoms of posttraumatic stress disorder, 

PTSD, which many of you referred to in your testimony. 

161

I have heard repeatedly from officials in the veterans organizations and Veterans Administration Hospitals that they do not have 

sufficient resources to deal with these very large numbers of people 

who come back deeply troubled so that has to be addressed, and 

I am glad that each of you talked in your testimony about that 

issue. 

The second question I want to ask each of you because again this 

is critically important for the record. As you know in the Federal 

budget, there are two types of funding, there is discretionary funding and there is mandatory funding. Discretionary funding is precisely that. It is discretionary. Congress appropriates those funds 

every year and the results are dependent on the appropriations 

process. 

Mandatory funding is precisely that. It is mandatory. It is based 

on the need and the funds are provided to meet the needs. So, for 

example, social security is a mandatory program. All of those who 

qualify for social security get the compensation that is provided for 

under law. 

Medicare is a mandatory program. All those who are eligible get 

the service levels and the benefits that are outlined in the law. It 

is not dependent on the amount of appropriations provided for by 

the Congress every year. 

As all of you know, veterans medical care is under discretionary 

funding. My argument with my colleagues is that while it is classified as discretionary, it is not discretionary. It ought to be mandatory. It ought to be required because the promise has been made. 

The question is are we going to keep the promise or not? If our 

intention is to keep the promise, then the funding ought to be described as mandatory. It is not a discretionary matter on whether 

we are going to keep this promise or not. It is not discretionary. 

I would just ask each of the witnesses in turn do you support a 

mandatory funding criteria for veterans funding? 

Commissioner Hanson. 

MR. HANSON. Senator, absolutely! I think if one sort of compares 

it to at least the veterans of my era there was nothing discretionary about whether we were going to go to war or not. We were 

drafted and it was mandatory, and it’s like our servicemen now 

who are serving in the guard. If their unit is called, it’s mandatory. 

They don’t have the discretion to say I don’t want to go. 

I think that it is just absolutely necessary to be mandatory. 

There is nothing discretionary in my mind about providing health 

care to our veterans. 

SENATOR CONRAD. Warren? 

MR. TOBIN. Thank you, Senator. I would like to confirm what 

was in my written and oral testimony that definitely the DAV is 

highly supportive of mandatory funding under various criteria for 

our VA health care and for other VA programs and certainly with 

emphasis on the disabled veterans. 

SENATOR CONRAD. And, Seb? 

MR. ROLL. Well, Senator, I feel the VA has been short on budget 

since the existence of the VA. I have never known where they had 

an excess dollar and I think we are going to stay that way until 

we have mandatory funding. 

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SENATOR CONRAD. Well, I thank you for that. It is very important that this be on the record because, as you know, this is a continuing controversy. 

The third question I would like to put to each of you and that 

is the question of Medicare reimbursement. It seems fairly 

straightforward to me. The question is should veterans who are 

Medicare eligible, who are in the VA system, should the VA system 

be able to get Medicare reimbursement just as any other health 

care provider would be able to do? 

Commissioner Hanson, what would your answer be? 

MR. HANSON. Absolutely! 

SENATOR CONRAD. Warren? 

MR. TOBIN. Yes. Our organization is in support of VA being able 

to get reimbursement through the subvention program for Medicare. 

SENATOR CONRAD. And, Seb? 

MR. ROLL. Senator, I fully support it. I just want to mention that 

I live 110 miles from Bismarck and I’m on Medicare, but I like the 

VA doctors. I like the VA system, so I feel as long as I’m willing 

to drive 110 miles to come and see the doctor of my choice my 

Medicare should go to that doctor. 

SENATOR CONRAD. All right. I thank you all for those answers. 

Before I call the second panel, I would ask each of the witnesses 

if there is anything that they would like to add for the purposes 

of the record, and before I ask you to respond, I would just say to 

each one of you I think you have provided very important testimony to this committee. I personally appreciate your taking the 

time to come and provide these views to the committee. That is 

very helpful to the Budget Committee to have this information and 

I hope will be used in an effective way in the debate to come. 

Commissioner Hanson, anything that you would want to add? 

MR. HANSON. No, Senator. I think either you or the others here 

explained everything to my satisfaction and I agree with everything that has been said. 

SENATOR CONRAD. Warren, anything you would want to add? 

MR. TOBIN. I believe that the record has already covered everything that I would want to say today. 

SENATOR CONRAD. All right. Thank you very much. 

And, Seb? 

MR. ROLL. Yeah, I think I want to cover a little bit that wasn’t 

quite covered in here. You know, it makes a person feel bad. I had 

a young Iraqi soldier come up to me the other day on Memorial 

Day and he said, Seb, you know, I feel really bad because I got 

wounded over in Iraq and I got a 30 percent disability he says and 

I still serve in the National Guard and he says now they want to 

take that 30 percent away from my guard pay. 

It was sad. It’s sad when you hear this from a young soldier. 

It’s—it’s—how do you answer a young soldier that way? It’s—you 

just thank him for his service and let’s hope some of this gets better and I just said, well, we’re trying to change that and I said let’s 

hope our government sees and does better for you on that. 

SENATOR CONRAD. Very good. Thank you. I thank this entire 

panel. I appreciate very much the contributions each of you have 

made here today. 

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Let me now call the second panel, John Hanson representing the 

North Dakota Veterans of Foreign Wars. He’s the Legislative Commander for the Veterans of Foreign Wars. Wally Buckingham from 

AMVETS and the North Dakota Administrative Committee on Veterans Affairs and Dan Stenvold, the State President of Vietnam 

Veterans of American. Again welcome to the three of you. I very 

much appreciate your attendance. I also want to recognize that the 

National VFW Commander is here, James Mueller, from O’Fallon, 

Missouri. 

MR. MUELLER. Yes, sir. 

SENATOR CONRAD. Thank you very much for being here, and at 

the end of this panel if you would like to say anything for the 

record, we would certainly welcome that. 

MR. MUELLER. I thank you for that opportunity. I appreciate 

that. 

SENATOR CONRAD. You bet. 

With that, then we will turn to the second panel and we will 

begin with John Hanson, North Dakota Legislative Commander for 

the Veterans of Foreign Wars. Welcome, John. It is nice to have 

you here. 

MR. HANSON. Thank you, Senator Conrad. I would like to thank 

you for the invitation to submit testimony for this important hearing on veterans’ health care legislation. The VFW is this nation’s 

largest organization of combat veterans, with over 2.3 million men 

and women across the country and in our auxiliaries. 

We are happy to support Senate Bill 1537 that would establish 

six centers for Parkinson’s disease research and two Centers of Excellence for Multiple Sclerosis. 

VA research has been at the forefront of many medical breakthroughs and increased emphasis on preventing, treating, and curing these two diseases is extremely important. This legislation 

would consolidate system-wide research done on those conditions 

and would help streamline research and, perhaps, improve effectiveness. Since a large number of highly qualified doctors are 

drawn to the VA, in part, for the ability to conduct world-class research, these centers could help recruitment. 

We should also keep in mind that any benefits and breakthroughs these centers would generate would not just affect this 

nation’s veterans, but all of American. It’s a win-win for everyone. 

Senator Conrad, I would like to thank you for being a cosigning 

for Senate Bill 2433, which recognizes the growing problems that 

many rural veterans face and offers an ambitious solution. Section 

2 could create an Assistant Secretary for Rural Veterans within the 

VA. 

Section 3 would mandate demonstration projects for improving 

access to care in rural areas by creating partnerships with other 

government agencies and private health care providers. 

And Section 4 would create a specific pilot program to improve 

care for veterans in highly rural or geographically remote areas. 

Section 5 would improve the travel reimbursement for veterans 

to VA facilities. 

And Section 6 would create from one to five Centers of Excellence 

for rural health research, education, and clinical activities. 

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We appreciate the intent of this comprehensive legislation. As a 

nation-wide organization, many of our members face the problems 

that this legislation aims to solve. 

We strongly support Section 5, which would increase the travel 

reimbursement for veterans seeking care at VA facilities. This is 

badly needed as the mileage rate has not been increased in many 

years, and the deductible means that most veterans receive no 

travel assistance at all. This section would increase the rate to the 

fair rate provided to Federal employees. It is the proper thing to 

do. 

We have several concerns, however, with sections 3 and 4. While 

we understand that in some areas it is the only alternative, we are 

concerned that this bill’s reliance on fee-based care is overly broad 

and that it would adversely impact the VA’s budget and its ability 

to provide care to all veterans. Although we completely agree that 

more must be done to help these underserved veterans, relying primarily on fee-basis could be a dangerous precedent and shirks the 

VA of its responsibility to care equally for all veterans. 

We feel that many of the problems faced by rural veterans are 

wrapped up in larger funding problems that the VA has encountered in the last few years. Although we appreciate—appreciative 

of the budget increases, sufficient funding has not been provided 

for all veterans seeking care. Proper funding, we believe, would fix 

some of these problems. 

We happily support Senate Bill 2005, Healing the Invisible 

Wounds Act. This legislation, which aims to improve mental health 

services for veterans, especially those in the National Guard. 

Section 2 mandates that any decision the VA makes to change 

regulations for posttraumatic stress disorder would require the notification of Congress and a 6-month wait before implementation. 

Section 3 mandates counseling and readjustment services for National Guard members returning from a combat theater. 

Section 4 increases the funding for Vet Centers to be used on 

counseling and readjustment services. 

We strongly support Section 2. With the VA’s ill-fated PTSD review fresh in our memory, as well as the investigation about the 

Institute of Medicine lingering, it seems the VA is predisposed to 

weakening veterans’ benefits with respect to PTSD. This is an intolerable situation that does more to harm veterans by attaching 

a stigma and discouraging those who truly need help from receiving the care and benefits they need to lead productive lives. 

Sections 3 and 4 are some important parts of meeting the needs 

of veterans. Despite VA’s recent actions, we must encourage more 

veterans to avail themselves of VA services. VA’s mission is to 

make veterans whole, and effective mental health treatment is an 

important part of that. 

By actively screening returning National Guard members, we can 

efficiently help those who need treatment and assist them as they 

transition back into daily life. 

War certainly is difficult, and the types of conflict our men and 

women are facing are unique. We need to ensure policies are in 

place that are adaptable to the current needs of veterans, and this 

legislation is a step in that direction. 

165

VFW is glad to support Senate Bill 2736. This legislation would 

create at least five VA centers for rehabilitation for veterans with 

amputations or prosthetic devices. At a time when war dominates 

the headlines, it is clear that it is necessary. 

Thanks to improvements in technology, many servicemen and 

women are surviving blasts and injuries that would have killed 

them many years ago, but their survival is coming at a heavy physical price. The VA has been long on the forefront of prosthetics and 

amputation research, but the current conflicts are greatly increasing demand for these types of services, which allow these service 

members to easily transition back into productive society. Losing a 

limb is not a death sentence, and the uplifting examples that so 

many men and women provide is powerful evidence of that. 

The VFW we also support Senate Bill 2753, which would authorize a $10 million grant program for caregiver assistance to expand 

services available to veterans for noninstitutional care services. 

As the veterans’ population ages and as there continues to be reticence to fully fund long-term, institutional care, these types of assisted services, such as adult day health care and hospice care, will 

prove to be invaluable. 

We are pleased to support Senate Bill 2762 where this legislation 

makes some needed changes in how the VA provides long-term 

care. 

Section 2 of the legislation would require the VA to report to 

Congress prior to making changes to the per diem program used 

to help fund State homes and the long-term care they provide. 

State homes are an integral part of VA’s total long-term care process, and requiring this report will hopefully prevent the elimination 

or reduction of these critical payments for budget-based reasons. 

We cannot pinch pennies while the number of veterans needing 

services of these kinds of essential services climbs. 

Section 3 would require VA to provide medications for veterans 

with service-connected disabilities regardless of whether they reside in a VA facility or a State home. While we continue to oppose 

VA using State home beds to supplant its statutory obligation to 

provide long-term care, it only makes sense that, if the VA is going 

to use State home beds in this way, it affords them the same benefits. It is, in short, part of the full costs of care. 

And Section 4 would still allow VA to treat certain health care 

facilities as State homes for purposes of providing long-term care 

to veterans. In rural or remote areas, especially, this could be helpful to VA. We support the concept, but we must watch to ensure 

the same levels of care are being provided and that vigorous oversight is maintained to ensure that the facilities are up to VA’s high 

standards. 

Mr. Chairman, I think you for the opportunity to provide testimony. 

[The prepared statement of Mr. John D. Hanson follows:]

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SENATOR CONRAD. Thank you, John, for that very excellent testimony. 

Next we’ll hear from Wally Buckingham, who represents 

AMVETS and North Dakota Administrative Committee on Veterans Affairs. Welcome, Wally. Thank you for being here. 

MR. BUCKINGHAM. Thank you, Senator Conrad, for asking me to 

attend this meeting today. 

I appreciate your holding this hearing in North Dakota. 

The budget for veterans’ health care and associated needs appears to me to be inadequate. I will share some of my concerns. 

Without a doubt the major concern facing VA health care is the absolute need for mandatory funding. It is my belief that the mandatory funding could result in less dollars being spent over a long period of time. Veterans deserve to know that health care will be 

available now and in the future. 

I have a lot of concern about veterans in western North Dakota 

who travel long distances to receive health care. Can you imagine 

getting up in the morning and getting in a van and they say, ‘‘Settle down now and relax. In 6 hours we’ll have you to your doctor.’’ 


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That has to be unbelievable! These clinics are a step in the right 

direction but I think got a long ways to go. 

I’m a veteran of World War II and I have lived through five 

wars, and there’s no doubt that we are going to continue to have 

wars and we’re going to continue to have a larger increase of veterans, and mandatory funding is the only way we’re going to take 

care of those veterans. 

PTSD, among other things, the new veterans of today are much 

more disabled than they ever were in any other war and they are 

going to take a lot of care for many years. PTSD is nothing new. 

In World War II they had it but they called it different things, like 

shell shock and battle fatigue and everything else, and it takes a 

lot of care. 

I volunteer at the VA hospital and I see those veterans every day 

up there and I have for like 10 years. The care is much better than 

it was 5 years ago, a lot better, but they got a lot further to go. 

Those—the staff at the VA hospital give better care than any 

hospital I have ever been in. They are outstanding, but they have 

to have funds if they are going to keep to operate. 

I think that I’m probably more proud of that VA hospital than 

any other place I’ve ever been. If you go up there and look, the 

rooms are beautiful. It’s a beautiful building and it has really made 

a difference, but we have to have more mandatory funding, and 

that’s about all I have to say. 

I would just like to see mandatory funding and no more categories. We don’t need categories. When I went into the service in 

World War II, they didn’t ask you what category you were. 

SENATOR CONRAD. There is almost something un-American about 

it. I agree with that. 

MR. BUCKINGHAM. Thank you. 

SENATOR CONRAD. Thank you very much, Wally. Dan, welcome. 

Good to have you here. 

MR. STENVOLD. Thank you, Senator. It’s good to be here. 

I would like to thank you for the opportunity to be here and I 

would also like to extend greetings from my national president, 

John Rowan, to you and your wife. He knows you both well he 

says. 

SENATOR CONRAD. He does indeed. 

MR. STENVOLD. I asked our president what I should talk about 

today and he told me to represent VVA the way I always have and 

to have fun with it. 

I can’t talk about the billions in dollars that are needed for VA 

funding because they are just too many zeros in a billion for me 

to comprehend, but what I can talk about is the personal problems 

that veterans are having in this State because of the lack of funding. I also want to talk about the problems that I personally had. 

I left Vietnam in 1971 after serving three tours with the Army 

artillery. At that time, I thought my fighting days were over. Then 

about 3 years ago, Agent Orange started to take over my body and 

the battles began. It was a 3-year process for me to get the health 

care I needed, but I’m one of the lucky ones. I got it. 

I have several friends whose names are on the wall in DC, but 

I have lost more friends to Agent Orange and PTSD. Friends like 

Tom Laferty from here in Fargo, John Coyne from Minot, both 

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highly decorated Marines from the Vietnam war. Both lost their 

fight with Agent Orange and both had to fight the VA for everything they got, which was too little too late. 

Bob was talking about John, because I talked to his wife and she 

said I could use his name, but John is the veteran that had to drive 

from Minot to Fargo for his chemo and his radiation treatments. 

He always said the biggest slap in the face from the VA was the 

11 cents paid for his mileage. He called it a joke. 

There’s a veteran—I’m from Park River. There’s a veteran in 

Park River by the name of Dave Daley. He’s a Gulf War veteran. 

On the good days, he can walk with one cane, on a bad day it’s either two canes or he stays in bed. He has Gulf War Syndrome. He 

shakes so bad that he has a hard time feeding himself or drinking 

water from a glass. 

He fought the VA to get help. At first the VA said it was other 

medical problems not related to his military service. Then there 

was no funding for Gulf War Syndrome. After 3 years of fighting, 

he’s now getting the help that he needs. 

I have a letter in my possession from the family of Dennis 

Borgen from Lakota, North Dakota. He retired from the Navy after 

28 years of military service. He had a massive stroke in March of 

2001 while in Reno, Nevada. 

His family wanted him moved back to Lakota where he is a patient at the Good Samaritan Center right now. He just found out 

that because he didn’t spend 3 days in the hospital in North Dakota before being admitted to the Good Samaritan Home in Lakota 

he now owes CHAMPUS/TRICARE something like $87,000 that he 

doesn’t have. He needs our help and I hope something can be done 

for him and his family. 

Senator, I could go on and on with stories like this, but I think 

you get the picture. The VA system is broke in more ways than 

one. It’s not getting the funds it needs to take care of the veterans 

and the whole system, according to a lot of veterans, is not veteran 

friendly. There’s no excuse for a two, three, or 4-year wait for some 

veterans to get the health care or help that they need. 

Why can’t our government just live up to its promises it made 

to us before we put on the uniform of this great nation? We have 

homeless veterans in the streets. We have children that go to bed 

hungry every night. There are thousands of veterans that need 

health care and they are not getting it because there are no funds 

available. Yet we send billions of dollars out of this country to 

countries all over the world very day. 

We send it to countries that hate us with a passion. I don’t get 

it. Let’s start taking care of our own, forget about always be politically correct and do what’s right for a change. 

[The prepared statement of Dan Stenvold follows:]

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Thank you, Senator. 

SENATOR CONRAD. Thank you. That was just excellent. Just excellent. I appreciate so much the testimony of this panel. 

I would like to ask you the three questions I had asked the previous panel, and I do this and I know some of you already have 

said very clearly in your testimony your answers to these questions, but I hope you will understand I am trying to create a record 

here that we can refer to very simply in debate and discussion and 

that is why I ask these questions once again. 

First of all with respect to the independent budget, John, would 

you support the levels of funding called for in the independent 

budget? 

MR. HANSON. Yes, I would. 

SENATOR CONRAD. And, Wally? 

MR. BUCKINGHAM. Yes, I would. Definitely! 

SENATOR CONRAD. Dan? 

MR. STENVOLD. VVA nationally does. 


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SENATOR CONRAD. So it is very clear all three witnesses on this 

panel have said unequivocally and clearly that they support the 

levels of funding provided for in the independent budget. 

On the second question, would you support making VA funding 

mandatory rather than discretionary? John? 

MR. HANSON. Senator Conrad, mandatory funding is the only 

way to go. Discretionary you never get there, and when you set it 

right where you need it, then you know you’re going to have it. 

SENATOR CONRAD. Very well. Wally? 

MR. BUCKINGHAM. Yes, unless the veterans are not a part of the 

other citizens. If mandatory funding is needed for Medicare, why 

isn’t it needed for the veterans care? It seems to me like it should 

be the same Senator Conrad. You know, I think I will use that 

quote or that question that you have just asked in the debate. I 

think that sums it up as well as anybody could. 

Dan? 

MR. STENVOLD. And VVA nationally supports mandatory health 

care for veterans. 

SENATOR CONRAD. Well, I think you for that. 

The third question is the question of Medicare reimbursement. 

Should VA be able to get compensation from Medicare for providing 

health care coverage to those who are both Medicare eligible and 

eligible for VA benefits? 

John? 

MR. HANSON. Senator Conrad, I agree they should support the 

Medicare reimbursement. I’m not quite ready to go that far yet, but 

I do hope they support that Senator Conrad. All right. Wally? 

MR. BUCKINGHAM. Yes, I very much support it. 

SENATOR CONRAD. Thank you very much. 

And, Dan? 

MR. STENVOLD. Yes. So does VVA. 

SENATOR CONRAD. Well, I appreciate that from the three of you. 

Let me just say that I have not asked questions that are non-budget related questions. I have made a statement here with respect to 

what happened in the Veterans Administration with the theft of 

these records. I have not asked questions about that because that 

is not in the jurisdiction of this committee, but I want you all to 

know the reason that I have not asked questions is because that 

is not strictly in the jurisdiction of the Budget Committee, but I 

think that all of us have indicated in one way or another how concerned we are about this theft. 

I must say when I heard it I could not believe it. Honestly, I 

thought it had to be some kind of a mistake. How could it be possible that an employee at whatever level would have the authority 

to take to his personal residence over 25 million records? How 

could that conceivably be possible? And if any of you want to comment on that separately, you are welcome to do that Mr. Stenvold. 

I would like to ask a question, Senator. According to anything I 

could find on the Internet, right now we have approximately 25.2 

million veterans that are alive and yet they said when those 

records were stolen it was everybody that was released from the 

military after 1975. That doesn’t make sense. The math does not 

add up. 

175

SENATOR CONRAD. No, the math does not add up, and I can only 

assume that the press reports were in error. 

MR. STENVOLD. OK. 

SENATOR CONRAD. And I would say I would not be shocked with 

press reports being in error, having been subjected to a number of 

errors of reporting in my career. 

Wally. 

MR. BUCKINGHAM. I have no comment other than the fact I was 

released before 1975, so I’m not real nervous. 

SENATOR CONRAD. John, anything? 

MR. HANSON. Well, Senator, on that one, too, I was out of the 

military before 1975 but still again, you know, it’s pure shock at 

how it could ruin the lives of so many people, you know, depending 

on what information was actually released and what’s going to happen to it and where is it going to go to and what are people going 

to do with it once they receive it. 

SENATOR CONRAD. Well, I want to say this; that very dedicated 

law enforcement is on the trail. FBI, I have been assured, has assigned some of their top people to this matter and we all hope and 

pray that these records are recovered and they have not been tampered with, they have not been used. 

I think we all can conjure up a worse-case scenario, but I think 

we all have to hope that law enforcement is able to get these 

records back. 

I would ask each of the witnesses if there is anything they would 

like to add for the record? 

John, anything that you would want to add? 

MR. HANSON. Yes, I would. I was down at the VA 2 weeks ago 

for an appointment. I know usually the appointments only last only 

ten or 15 minutes, and if anybody had one 2 weeks ago on Wednesday, I’m sorry I took your appointment away from you, but going 

to the VA and sitting down with the doctor my experience in the 

past 15, 20 minutes. Two and a half hours later I looked at my 

watch and I said, ‘‘Do you have any other people to see today?’’

I was really happy that we actually sat down and got down to 

the point of what we’re getting to and was really shocked, and my 

wife said, ‘‘You spent all that time at the VA?’’

And I said, ‘‘Yes, I did.’’ And I said it’s turning around and they 

are coming back, and I know a lot of that is thanks to getting funding and being able to support us, and I would like to thank you 

for supporting North Dakota and the veterans of North Dakota. 

Thank you. 

SENATOR CONRAD. Thank you, John. 

Wally, anything that you would want to add? 

MR. BUCKINGHAM. No, I have nothing to add. 

[The prepared statement of Wallace Buckingham follows:]

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SENATOR CONRAD. Dan? 

MR. STENVOLD. I have been fortunate that this is my sixth year 

as President of VVA and our national headquarters are in Silver 

Springs. When I go out there, I hear nothing but great things about 

you and your two other colleagues from North Dakota about supporting veterans. That means a lot to us. 

SENATOR CONRAD. Well, thank you. I appreciate that more than 

I can say. Many of you know that my wife is one of those people 

who ran away from home and joined the Navy and served during 

the Vietnam era and claim——

MR. STENVOLD. Shawn has a membership card for her for VVA. 

She’s——

SENATOR CONRAD. And you know she spent a lot of time at 

NDSU at the vet club and you know that, but she became an intelligence photographer and she had a marvelous experience in the 

Navy. It is something she is intentionally proud of and, of course, 

my uncles all had proud records of service as so many North Dakotans have, and we are proud of your service and we respect very 


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much what our veterans have done. Thank you so much. I thank 

this panel. 

And I would say now again I want to indicate we are especially 

pleased to have the National Commander of the VFW in our presence, Mr. James Mueller. I hope I am pronouncing that correctly. 

MR. MUELLER. That’s fine, sir, yes. 

SENATOR CONRAD. Who is from O’Fallon, Missouri, if I’m not mistaken. 

MR. MUELLER. That’s right, sir. 

SENATOR CONRAD. If you would like to come to the witness table, 

we would welcome your testimony. I can tell you this is a special 

treat to have you in our presence. We are delighted that you are 

here. 

MR. MUELLER. Thank you, Senator. First of all, I would like to 

express my deep appreciation for taking time out of your busy 

schedule to come here today, too, and for what you do for our veterans. 

Right now we have World War II veterans. We have 3.5 million 

World War II veterans that are left and that’s going to change dramatically over the next 5 years. There’s going to be a lot of care 

demanded of the VA with our older veterans getting up in age 

where they are 82 and 87 years old and also with our young soldiers coming back from Iraq and Afghanistan. 

When I served in Vietnam, because of what happened over there, 

I made a promise and a pledge that if I made it back that I would 

do whatever I could to serve veterans and their family and that 

and I didn’t know it was going to lead me to this position. 

When I came back, I joined my local post and we visited the VA, 

and going over everything else I really had a problem going into 

the spinal injury ward, and for awhile I couldn’t go back because 

I felt like I couldn’t do enough to help our veterans and what they 

are going through. I realize you can’t give up because they need our 

help and I want to thank you for your sincere efforts on what you 

do and what our fellow comrades do out here. 

First of all speaking for the VFW, I have a problem sometimes 

understanding how the VA works and what it does. On some occasions it will treat and give different care and in different hospitals. 

I can’t see why one hospital will treat a patient and the other VA 

facility will not. 

For example, like in St. Louis, they’ll treat—they will not treat 

tendinitis there but you go to Columbia and they will treat and 

they can recognize tendinitis up there. 

The VFW very much supports the independent budget process 

and I think over the last couple years I think the independent 

budget process fund by what’s been reported here are more accurate on some of those things and, yes, the VFW supports mandatory funding and, yes, we support Medicare reimbursement. 

I’m glad to see that you’re coming here to take time to listen to 

the veterans of North Dakota. There is a lot of problems that are 

taking place and especially with rural health care issues. 

I’m glad to see that the CARES programs is going to be having 

five clinics to cut down on some of the travel. It’s an undue burden 

for our veterans to have to travel so far and spend so many hours 

178

when some of these are in such poor health, so I thank you about 

what’s been doing on that part of it. 

I would like to address a little bit about what’s taking place in 

the break of security of the VA, and I know you’re not here just 

to hear a lot of that, but it’s incomprehensible that this took place, 

like you said for an employee to take this home, but what’s more 

hard to understand is that the Secretary of the Veterans Affairs 

was not informed of this until almost 3 weeks after it happened 

and the FBI was not called in. 

I too—I agree on the letter that I sent to the secretary, hand delivered, that called for people to either be fired or held accountable 

for what’s done, and I would ask and I would hope that Congress 

does that. 

What I have a problem now is that there’s not information forthcoming from the VA regarding what is in those records. Does it affect people before 1975? There’s no information being put out. I understand that the VA was supposed to notify the veterans, but I 

understand that they haven’t done that because they don’t have 

enough envelopes to send out to do this. We need to hold them accountable and hold their feet to the flames for this breach of contract and that it never happens. 

At a time in our history in the United States when we have 

such—since 9/11 terrorism done, we need to be more accountable 

to everybody and be more careful on security data what’s handed 

out. I feel it’s been a lack of leadership by the VA on this information. 

I again thank you for taking the time to be here, what you do, 

what position you hold, and taking care of our veterans and I 

thank you very much for that. 

SENATOR CONRAD. Well, let me just say that it is an honor to 

have you at this hearing. It is an honor to have you in North Dakota. 

MR. MUELLER. It’s a pleasure. 

SENATOR CONRAD. I hope that we have extended our warmest 

North Dakota welcome to you. 

MR. MUELLER. I look forward to visiting this weekend with comrades from the VFW. 

SENATOR CONRAD. Well, it is wonderful that you are here. Let me 

just conclude by saying there are so many things that are inexplicable about this loss of records. What you have said is really 

completely unacceptable; that the secretary himself was not informed for weeks and as a result law enforcement not informed. 

I mean everybody knows in law enforcement getting the information as rapidly as possible is the best thing to being able to solve 

a crime. That weeks went by, you know, that leaves the trail a lot 

colder than it might otherwise have been. 

MR. MUELLER. Yes, it does, sir. 

SENATOR CONRAD. And, honestly, I think the response of the VA 

thus far and I have acknowledged now that one man is being removed, another man has submitted his resignation, another is on 

administrative leave, that’s not enough to me for a breach of this 

magnitude. 

I think the secretary himself should be held accountable and responsibility for a leadership failure of stunning proportion, and I’m 

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not saying that he played any direct role, but he is the man in 

charge. The man in charge ought to be held to account for the policies that were in place that would have allowed such a breach to 

occur. How is it conceivably possible? 

I used to be a tax commissioner for the State of North Dakota. 

We would never have allowed anybody to take the tax file of the 

State of North Dakota home. In your wildest imagination nobody 

would think they could do such a thing. 

Well, again I thank you. I hope I pronounced your name correctly. Is it Mueller? 

MR. MUELLER. Yes, Mueller. 

SENATOR CONRAD. Do you pronounce it that way? 

MR. MUELLER. Sir, I would just wish that the VA would come 

forward with more information on this of what’s taken place. We’ve 

gotten a lot of calls and I’m sure some of the other comrades out 

there who’s affected. 

I had one lady call me and wanted to know about her World War 

II dad, who is 87 years old. If somebody calls and they say they 

are from the VA, should he give out information? I think the VA 

needs to come forward with more information of what’s taking 

place and how to handle it, and to expect our veterans then to do 

their own credit checks I think is unacceptable. 

I think the VA, which is ultimately the government, should stand 

some of the cost of this and be responsible for some of this. 

SENATOR CONRAD. Well, I think you make a very powerful point. 

Let me just for the record read into the record that the civil servant, the senior career data analyst who lost the information and 

took it home, has now been terminated. 

That Michael McLendon, the deputy assistant secretary for policy, has submitted his resignation and will leave the department at 

the end of this week. 

That Dennis Duffy, who is the acting assistant secretary for policy and planning, has been placed on administrative leave. That 

those actions have all been taken. I don’t find them sufficient. 

Clearly all of those actions were necessary but they are not sufficient. 

This is a breach of really a stunning proportion, and you are 

quite right in terms of information. We have just gotten more information today that tells us, as I have indicated, that not only social 

security numbers and birthdays but now they have added the additional information just received today that phone numbers and addresses as well. I hope that this isn’t another one of these cases 

where the information dribbles out and we find even more serious 

things. 

I pray that we don’t find persons, people’s, individual medical 

records are at risk of revelation as well. Very stern action has to 

be taken because you’ve got to hold people to account. You have to 

send a very clear signal that this is unacceptable and people will 

be held accountable. 

MR. MUELLER. Sir, before I go, just recently on the budget when 

I testified up on the hill, there’s also talk about cutting 149 employees out that adjudicate claims. 

Right now we have a backlog of over 880,000, and to do that I 

think is unacceptable. That is making people wait longer and 

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longer to help get benefits when they so desperately need it and everything else, and I think that’s one thing I wanted to include in 

my remarks about that, about trying to cut back on employees that 

handle and adjudicate claims. With the backlog that we have on 

claims, it is take two and 3 years to get some of these claims processed and that. 

SENATOR CONRAD. Well, I thank you very much for raising that 

issue. It is obviously very important when you cut back on the 

number of people who adjudicate claims you cut back dramatically 

on the claims that final determinations are made. 

MR. MUELLER. Yes. 

SENATOR CONRAD. Now, that means people are in effect denied 

what they legitimately are entitled to simply because of delay. 

Again, thank you so much. It has been an honor to have you here 

and I appreciate all the witnesses today. 

I think the testimony has been excellent. I think we have 

strengthened the record of the Senate Budget Committee in a significant way here today. Thank you very much and this will bring 

to an end this hearing of the Senate Budget Committee. 

[Whereupon, at 4:10 p.m. the hearing was adjourned.] 

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SENATE BUDGET COMMITTEE PUBLIC HEARING REGARDING THE IMPACT OF FEDERAL 

FUNDING ON HIGHER EDUCATION 

Friday, June 2, 2006

U.S. SENATE, 

COMMITTEE ON THE BUDGET

Grand Forks, North Dakota

The public hearing was held at 2:30 p.m. at the University of 

North Dakota at the Energy and Environmental Resources Center 

building. 

Present: Senator Kent Conrad, Dr. David Wilson, Dr. Barry 

Milavetz, Dr. Gerald Groenewold, Dr. Alice Hoffert, Mr. Bruce 

Gjovig, Dr. Delore Zimmerman, Logan Tong, and Gary Moore. 

Staff present: Shelley Amdur.

OPENING STATEMENT OF SENATOR KENT CONRAD 

SENATOR CONRAD. The hearing will come to order. I thank you 

all for being here. I would like to indicate that this is an official 

hearing of the Senate Budget Committee and so we will be under 

the rules of the Senate just as if we were in the hearing room in 

Washington. 

That means when witnesses testify that we have no outside interference and no indication of support or disagreement with the 

statements of the witnesses. We want witnesses to feel that they 

have the absolute right to express their views fully and freely without fear of intimidation or reaction. 

I want to indicate that this hearing was deemed necessary because we are now in conference between the House and the Senate 

to work out the budget for next year, and we have heard from a 

number of our colleagues that they wanted more evidence in the 

record as to the tangible benefits of higher education. What difference is higher education making in the economic lives of the people in our country? 

I thought there is no better place to come than right here to the 

Energy and Environmental Research Center at the University of 

North Dakota to make the case in the official record, as to the tangible benefits on higher education and the difference it is making 

for the economic opportunity in our communities, in our States, 

and in our country. That is really what this hearing is focused on. 

And, it is happening at a critically important moment. Because the 

House has now taken action on its budget. The Senate took action 

on its budget some months ago. 

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We are now in what is called the conference period; that is, when 

the conference committee, and I am a member of that committee, 

works out the differences between the House proposal and the Senate proposal. That is why I think this hearing takes on a special 

importance. 

Let me first indicate that when I was growing up, I was raised 

by my grandparents. My parents were killed when I was young. My 

grandmother was a school teacher, and I have told this story before 

on this campus. Gerry has heard it. My grandmother was about 

five feet tall and we called her Little Chief. We called her Little 

Chief because she commanded respect, and she commanded respect 

because of her character and her determination. I do not think in 

my life I ever met anybody with a more profound respect for education. 

She was a school teacher. She had graduated from University of 

Minnesota, and also went to college in New York. At a time when 

very few woman had the opportunity or the privilege to get a degree and even education beyond that, that was a rarity. She had 

such a profound respect for education. 

She always used to tell us in our household there are three priorities. No. 1 is education, No. 2 is education, No. 3 is education, and 

we got the message. 

My cousins and my brothers, 13 of us in our generation, every 

single one of us has an advanced degree. And, it was because of 

the absolute determination of my grandparents that that happened. They were people of middle-class means, but they set aside 

funds to help everybody get an advanced degree because they believed that’s the way you had the greatest chance of taking advantage of your God-given talent. My grandmother was right about 

many things and she was certainly right about that. 

One of the things we need to emphasis is that investing in a 

first-class educational system is one of the very best ways we can 

take advantage of opportunity in this country. If we are going to 

remain the world’s leader, we have to be the leader in education, 

in research, and in training our workforce. We will not remain No. 

1 if we are not number one in education, in training, in research, 

and in developing an entrepreneurial spirit. 

We know, it does not take a school to form an entrepreneurial 

spirit. We have seen lots of examples of people who are great entrepreneurs who did not have advanced education. But what we do 

know is that we need that entrepreneurial spirit matched with people who do have advanced training and advanced education. It is 

that kind of partnership that sparks economic opportunity. 

Let me turn now to just a number of slides that we think it are 

important to get in the record. First, the annual Federal investment at UND has grown substantially since 2001, rising from $45 

million in 2001 to $66 million in 2005. These are Federal dollars 

well spent.

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Let us go to the second slide. The Federal investment at UND 

makes up a significant portion of the University’s total budget. 

From 2001 to 2005, UND received over $290 million in Federal assistance, which was about 20 percent of its total budget during that 

period of time.


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Let us go to the third slide. The breakdown of those Federal dollars was as follows: $154 million for grants and contracts, $94 million in targeted Federal funding, and $42 million for student aid.


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Let us go to the next slide. North Dakota has received significant 

Federal investments in education. I might add that NDSU has also 

had a very significant, even larger, share of its budget coming from 

Federal sources because it is a land-grant university.


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While there have been significant Federal investments, it is important to remember that students are still struggling to afford 

higher education. Average tuition and fees at 4-year public colleges 

and universities have increased substantially over the last few 

years, climbing from just over $3,760 in the 2001–2002 school year 

to almost $5,500 in the 2005–2006 school year. I am hearing from 

many sources as I go across the State that that is putting increasing pressure on students and their families. 

I think it is undeniably the case, especially for those families who 

have a number of children. We all know that tuition and fees do 

not cover the full cost of someone’s education for a year. All of the 

other attendant costs are added to it, and this is creating growing 

pressure on the students and their families. 

Let us go to the next slide. At the same time, the budget that 

has been proposed by the President for the next year proposes to 

freeze the maximum Pell Grant award at $4,050 for the fifth year 

in a row. That I think most objective observers would say is simply 

inadequate. If we don’t provide more assistance, many students 


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simply will not be able to afford an advanced education or they will 

have to interrupt their education in order to secure more funds.

Let me go to the sixth slide. We must decide as a society what 

we value, what is really important to us and where we want our 

Federal dollars invested. I would argue that the proposal from the 

administration to freeze the maximum Pell Grant award, while 

leaving in place and continuing tax cuts for the very wealthiest 

among us, represents the wrong priorities for our nation.


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Let me just put in perspective the comparison here. The cost for 

the tax cuts for those earning over $1 million a year in 2007, the 

tax cuts for just that group, will cost over $41 billion for that year 

alone. It is stunning, $41 billion for just the tax cuts for those earning over $2 million a year. 

By comparison, it would cost 1/20 of that amount to fund the 

maximum Pell Grant award at $4,500 instead, of the proposed 

freezing it for the fifth year at just over $4,000. 

Let’s go to the final slide. These are proposals that are in the 

President’s budget for higher education for next year. In addition 

to freezing the maximum Pell Grant award for the fifth year, the 

budget from the administration freezes funding for other key student aid programs, including Supplemental Educational Opportunity Grants, Work-Study, and TRIO Student Support Services.


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In addition, the budget before us eliminates not just cuts, funding for TRIO Upward Bound and Talent Search, Perkins Loans, 

Leveraging Educational Assistant Partnerships, for GEAR-UP, 

Teacher Quality Enhancement Grants, Byrd Honors Scholarships, 

and vocational education. All of those programs are zeroed out. No 

funding. 

Now, these are choices that are going to be made in the next 

weeks in Washington. What are our values? What are the things 

that we hold dear? What are the things that are important? I am 

known in Washington as a deficit hawk, somebody who believes 

that deficits do hurt us in the long-term and that, over time, it is 

critically important for us to balance our budget. But within that 

context, I believe education should be our top priority because I see 

it as an investment in our future. 

If we aren’t the best trained and the best educated, we will not 

long remain the strongest nation in the world. So that’s the challenge before us. What are our priorities? What are the things we 

value, and what are the things we are going to invest in? 


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With that, I want to turn to our very distinguished panel. I have 

asked all the witnesses be made a part of one panel. If somebody 

needs to leave, as I know that there are many pressing things people have to do after you’ve testified, we would certainly understand 

that. 

Let me welcome this panel, Dr. David Wilson, Vice President for 

Health Affairs and Dean of the School of Medicine and Health 

Sciences; Dr. Barry Milavetz, the Associate Vice President for Research at the University of North Dakota; Dr. Gerry Groenewold, 

the Director of the Energy and Environmental Research Center; 

Dr. Alice Hoffert, the Associate Vice President for Enrollment Management; Mr. Bruce Gjovig, the Director and Entrepreneur Coach 

for the Center For Innovation and Director of Technology Incubator 

and Rural Technology Center; and Dr. Delore Zimmerman, the 

President and CEO of Praxis, Incorporated, of Grand Forks. 

We also are joined by two TRIO students, Logan Tong and Gary 

Moore. Gary is a veteran. We are delighted to have them. We are 

delighted to have all of the witnesses. 

We would like to start with Dr. Wilson. We have asked each of 

you to hold your testimony to 7 minutes or thereabouts. We are not 

going to be too strict about that, but we would very much like to 

have your testimony and then be able to ask questions when all 

have provided their testimony. 

With that, a special welcome to you, Dr. Wilson. Thank you for 

being here. 

DR. WILSON. Thank you, Senator Conrad. 

Senator Conrad and Members of the Committee, my name is Dr. 

H. David Wilson. I am the Vice President for Health Affairs and 

Dean at the University of North Dakota School of Medicine and 

Health Sciences. I’m pleased to have the opportunity to submit this 

testimony to the committee. 

The University of North Dakota, the School of Medicine and 

Health Sciences, Grand Forks, and this region would not be the 

same without the tremendous impact our Federal support has upon 

all of us. The economic impact of UND upon this region is about 

one billion dollars. At the outset, let me thank you, Senator 

Conrad, for your personal hand in helping to accomplish this. 

The ability to secure Federal dollars allows our university to attract and maintain outstanding teachers, scientists, and other 

scholars to make for an intellectually stimulating university and 

community. The university then helps to produce the future physicians, lawyers, business tycoons, teachers, nurses, scientists, and 

other talented people to make a better, more vibrant North Dakota, 

America, and world. 

The Federal support that has come to the School of Medicine and 

Health Sciences has been essential to achieving our track record of 

helping to meet the health care work force needs of the State. 

Looking across the State, the school has produced over 45 percent 

of North Dakota physicians, 91 percent of physical therapists, 62 

percent of occupational therapists, 45 percent of clinical laboratory 

scientists, 88 percent of the cytotechnologists, and 75 percent of the 

physician assistants for our State. 

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As impressive as this is, we know we can and need to do an even 

better job in the future to help ensure a strong, stable health care 

delivery system for our State. 

I want to focus on just a few Federal initiatives that greatly benefit the medical school. 

The ability of our school to compete for EPSCoR dollars from the 

Federal and State government has allowed us to attract and give 

startup money to new scientists for our school. Without those dollars, we could not compete with the more wealthy States and put 

together competitive research labs for North Dakota. Today, we 

have recruited some of the best and brightest scientists and they 

are successful. 

To give you just one example, because of EPSCoR money, we recruited Dr. Mike Ebadi, one of the foremost Parkinson’s disease researchers in the world. He then recruited five outstanding young 

neuroscientists, again greatly assisted with EPSCoR funds. 

This led to a new sophisticated neuroscience research laboratory 

devoted to neurodegenerative diseases followed by a 10 million dollars COBRE (Centers of Biomedical Research Excellence) research 

project focusing on diseases like Alzheimer’s disease, Parkinson’s 

disease, and other related conditions. 

I must point out that about 75 percent of these moneys from the 

Federal Government helped to attract postdoctorate level research 

technicians and other people and provide good jobs and people that 

end up benefiting our community not only with their tax dollars 

but also with their intellectual capacity making this a better place 

to live. 

Our Center for Rural Health is heavily dependent upon Federal 

support. With these Federal funds, the center has 15 programs that 

reach the far corners of the State. The State of North Dakota is affected by these moneys. The center also operates national projects, 

including the highly successful Rural Assistance Center, which 

serviced over a quarter of a million visits to its Web site this last 

year alone. 

The Rural Assistance Center, the only such facility in the nation, 

serves as a repository for all information related to rural health 

and other areas for our entire country. It has been utilized by individuals in several foreign nations as well. I want to thank you personally, Senator, for working hard to help maintain funding for 

these vital units. 

Our Center for Health Promotion and Prevention Research is another example of Federal support doing great things for our State 

by developing models that promote health and will be useful not 

just for North Dakota but for other rural States; in fact, for every 

State in the union. 

Dr. Vogeltanz-Holm and her colleagues are working in eight 

schools across North Dakota assessing third graders to encourage 

our youth to eat properly and exercise to avoid obesity, a major 

problem in our nation, and their project is working. They are also 

working with youth to choose not to smoke and to avoid dangerous 

drugs like methamphetamines. 

I would like to quote from a summary of one representative 

school, the Burlington North Dakota Elementary School. And I 

quote, The great news is that after only 1 year of CATCH, the 

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name of this program, our children have increased their knowledge 

about healthy eating, increased their consumption of fruits and 

vegetables, and their level of vigorous daily physical activity. They 

have also decreased their consumption of fats and sweets and the 

number of our children in the overweight category has also decreased from 20.9 percent to 13.3 percent; however, there is still a 

lot of room for improvement. Our children need to be eating more 

fruits and vegetables every day and some need to limit the time 

they spend in front of the television or playing video or computer 

games, end quote. 

While we have excellent federally supported initiatives underway, I do not want you to return to Washington thinking that all 

is well in North Dakota. We understand the difficult choices Congress must make when it comes to the budget, but the wrong 

choices, which you’ve pointed out, will make it much more difficult 

to adequately address our State’s health care needs in the longterm. 

The loss of Title VII dollars and other needed support is a crisis 

for us and, frankly, for the nation. Ensuring a competent and adequate supply of health care professionals is critical. Let me give 

you just one example and I could share many. 

The President’s fiscal year 2007 budget zeroes out the Geriatric 

Education Centers Program. North Dakota was just recently added 

to the small set of Geriatric Education Centers across the country. 

Having just completed our first year of this 5-year initiative that 

involves training health professions programs across the State, the 

Federal program is now slated for termination. 

This means we will lose over 1.7 million dollars that could have 

helped to bring better care and research needed for our elderly population. Given the graying of America, this is the wrong time to be 

pulling funds from programs designed to train health professionals 

in geriatrics. 

There is also a set of rural-specific safety net programs that are 

at risk of being terminated, yet are critically important to North 

Dakota. These programs, managed by the medical school, put resources directly into the health infrastructure of North Dakota’s 

rural communities. 

For example, the Rural Hospital Flexibility Grants Program supports quality improvement and emergency services among other efforts and, like the GEC program, is slated to be eliminated. When 

quality of health care has taken on such significance in terms of 

our ability to measure and improve the care that patients receive, 

we need to ensure that our rural hospitals and communities aren’t 

left behind. In fact, this is an area where significantly more resources to support information technology and staff education are 

extremely important. 

We are also concerned about the decline of rural representation 

on the Medicare Payment Advisory Commission. Given the influential nature of MedPAC’s recommendations to the Congress, we 

need to ensure that an appropriate number of people at the table 

understand the strengths and challenges of delivering health care 

in rural communities. 

We’ve seen a recent erosion of that much needed voice for rural 

health and inadequate representation can put our rural health care 

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systems in North Dakota, and other States similar to us that are 

highly dependent upon adequate Medicaid reimbursement, at risk. 

With regards to special populations, our INMED program is a 

national model of success in attracting and educating American Indians into medicine. A loss of $500,000 for the INMED program 

has markedly reduced the number of Native American high school 

students and middle grade students that we can bring to our campus during the summer to encourage them, No. 1, to go to college 

and, No. 2, to choose medical careers. 

This loss occurs in spite of the fact that when it comes to health 

care, the American Indians are one of the most underserved populations in the nation. With these and other programs that I don’t 

have time to mention, I’m sure it’s clear we have a lot at stake. 

You mentioned the problem with tuition, and I can tell you while 

medical school tuition is still below average for our region, we’ve 

had to increase it to now a bit over $18,000 per year. It’s projected 

that our incoming class of medical students for this fall when they 

graduate will have a debt of $125,000 or thereabouts to contend 

with. 

I can tell you this makes it increasingly difficult to attract students to go into family medicine and other low-paying specialties 

like pediatrics. I’m a pediatrician, and I think that makes it very 

difficult for us particularly to serve the rural health care needs of 

the nation. 

In closing, on behalf of the School of Medicine and Health 

Sciences and the entire university, I thank you again for the opportunity to submit this testimony to the committee and we would 

welcome any questions that you may have. 

[The prepared statement of Dr. H. David Wilson follows:]

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SENATOR CONRAD. Thank you, Dr. Wilson, for an excellent testimony. It is exactly what I am looking for here today. I think you 

have provided substantiation in a very clear and compelling way of 

the contribution that Federal dollars are making for the institution, 

and the contribution the institution is making to the State. 

The testimony you provided in terms of the number of physicians 

in our State that come from the university, as well as all the other 

health professionals, is precisely what our colleagues are looking 

for. 

With that, I welcome Dr. Milavetz, the Associate Vice President 

for Research. 

DR. MILAVETZ. Senator Conrad and Members of the Committee, 

my name is Dr. Barry Milavetz and I am the Associate Vice President for Research at the University of North Dakota. I’m pleased 

to have the opportunity to submit this testimony to the committee. 

The Vice President for Research, Dr. Peter Alfonso, is unable to 

testify today because of a prior commitment. 

I would like to briefly discuss the important role that Federal 

funding plays in research at the University of North Dakota and 


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also its economic impact on the five State North Central Region encompassing North Dakota. 

I will do this by sharing with you a short PowerPoint presentation. 

As you indicated before, sponsored programs at the University of 

North Dakota have increased from approximately 45 million dollars 

in fiscal year 2001 up to about 80 million dollars in fiscal year 

2005. And of that, approximately 38 million dollars in 2001 and 

now 60 million dollars in 2005 comes from Federal funds. 

We also track, however, sponsored programs through expenditures, and although the curves are essentially the same, the actual 

dollars vary somewhat. It looks on this curve as if we had a bad 

year in 2005 and, in fact, that is more apparent than real. We 

track numbers monthly and I can tell you—I’m very happy to tell 

you, in fact—that this year looks like it’s going to be a banner year 

in part due to the help of our senators. We are very close to having 

$100 million dollars in sponsored programs this year. If not a hundred, we will be very close to it. 

As you pointed out——

SENATOR CONRAD. That has a nice ring to it, right? 

DR. MILAVETZ. It does. 100 million dollars is nice. 

As you pointed out—and we track these numbers also year by 

year—approximately 70 to 75 percent of year to year actually is 

Federal dollars. 

The economic impact of this research dollars is tremendous, both 

at UND, within the city, North Dakota, and the North Central Region. The bottom line is that approximately 80 million dollars of research done through the University of North Dakota comes out to 

be about 163 million dollars in total economic output. That includes 

about 1,584 jobs, of which about 724 are right here on campus. 

As a legislator, I’m sure you’re interested in knowing that that 

also equates to about 5.9 million dollars in State and local taxes 

and about 25 and a half million dollars in Federal taxes, not inconsequential amounts. 

One of the programs I would like to emphasize is the EPSCoR 

program. EPSCoR is an acronym. It stands for Experimental Program to Stimulate Competitive Research. It was initiated through 

the National Science Foundation in the early 1980’s. It has now 

grown to include a number of other Federal agencies, including the 

NIH, NASA, DoD, and DoE as well as others. As you can see here 

these are the present awards to the University of North Dakota 

from each one of these agencies. It’s quite a substantial sum of 

money. 

The EPSCoR program is particularly important to us because 

what it’s primarily designed to do is to build infrastructure, and it 

does this by building infrastructure in terms of hardware and as 

well as building infrastructure through the development of human 

resources. It builds hardware by supplying equipment, startup 

packages, faculty seed grants, graduate student assistantships, all 

of which contribute directly to being able to do research. 

It also supplies equipment so that we can set up centers. One of 

the centers that we have here on campus is called the Sunrise 

Project, which is for sustainable energy. It has also allowed us to 

build a high-performance computing center. 

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The development of human resources is also significant because 

it allows us to give undergraduate students that come from smaller 

colleges, including tribal colleges, the opportunity to do research. 

This is an opportunity that they otherwise would not have. 

I’ll briefly discuss a couple of the more successful aspects of this 

program. Through North Dakota EPSCoR, we have been able to 

hire 100 researchers in North Dakota. 

That is not just at UND. It also includes NDSU, but the overall 

program is very effective in that way. 

I also point out the EPSCoR program benefits all education in 

the State of North Dakota. It’s not just at the two flagship universities. And also equally important over 550 graduate students and 

over 675 undergraduate students have had the opportunity to do 

scientific research through this program. 

I just briefly would like to mention a couple of the major research projects presently being funded by the Federal government. 

Within the College of Arts and Sciences—and this is actually a 

joint project also with the School of Engineering—we have the Sunrise Project, which is a sustainable energy research project, primarily targeting things like alternative energy sources, use of biodiesel, biojet fuel. That’s funded to the tune of about 2 million dollars. 

Within the School of Engineering, there are also programs in 

special coatings and a new award that was just received about 2 

months ago to develop remote sensing with real time video cameras 

on UAVs and things like target acquisition that’s being funded to 

the tune of about 6.7 million dollars. 

The School of Aerospace Sciences is becoming a Center of Excellence for UAVs. They recently received an award of one million dollars. 

Within the School of Medicine, as Dean Wilson has pointed out, 

there’s approximately 35 million dollars that’s focused on the area 

of neurosciences. This is a good example of the synergism that the 

Federal Government awards allow us to undertake. We have a neuroscience building. Within that building, we have a PET scanner, 

a positron emission tomography scanner and a cyclotron to make 

the radioisotopes necessary for the PET scanner. And also with in 

COBRE and INBRE awards, we can hire the faculty members, 

postdocs and graduate students to actually do the research. 

As Dean Wilson pointed out, this research primarily is targeted 

for neurodegenerative diseases, such as Parkinson’s disease and 

Alzheimer’s disease, but it also has a major focus on addiction, primarily cocaine addiction. 

Within the School of Nursing, I’m very happy to report, we have 

been awarded a building grant. The photograph is an architect’s 

rendering of the new building. The Northern Plains Center for Behavioral Research, that’s going to be a multidisciplinary research 

center for primarily nursing but also aviation and psychology. 

And, finally, I’ll just mention the Northern Great Plains Center 

for People and the Environment was recently awarded—actually 

it’s about a year now, a year ago—a 32 million dollar grant to fund 

what was formerly the National Sciences Foundation’s DC–8 Flying 

Research Platform, which is now being flown out of the University 

of North Dakota. 

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On behalf of the Vice President for Research at the University 

of North Dakota, I thank you again for the opportunity to submit 

this testimony to the committee and would welcome any questions 

that you may have. 

[The prepared statement of Dr. Barry Milavetz follows:]


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SENATOR CONRAD. Thank you very much. That was very important testimony and, again, it was right on point with respect to 

what we are seeking to get here today, which is specifics. You have 

provided them in significant detail, and they will be very useful. I 

appreciate it very much. 

Dr. Groenewold, welcome. Thank you for hosting us for this hearing of the Senate Budget Committee. I think this is a first to have 

a formal hearing of the Senate Budget Committee at this location, 

so thank you very much. 

MR. GROENEWOLD. Thank you. Senator Conrad and Members of 

the Committee, my name is Gerald Groenewold, and I am the Director of the Energy & Environmental Research Center at the University of North Dakota. I’m very pleased to have the opportunity 

to submit this testimony to the committee. My comments will be 

largely focused on research and ultimately technology commercialization, standing back a bit initially and looking at it from a 

fairly broad perspective. 

From the dawn of civilization, humans have been experimenting 

and accumulating knowledge to ensure their survival and improve 


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their lives. Today, we are continuing that time-tested practice in 

organized scientific research supporting our goals and aspirations. 

Research is absolutely inseparable from societal values and institutions: in other words, to set priorities, to make informed choices, 

and to realize progress. The great strength of a representative democracy and a market economy is freedom of choice. However, this 

choice can only be exercised effectively where there are good 

choices to be made and choice is exercised wisely. 

As Mark Twain once said and I think it’s relevant here. ‘‘There 

is nothing more frightening than ignorance in action.‘‘

In an ever increasingly and technological complex society, these 

choices and decisions are becoming more and more difficult; thus 

the need for practical focused research has never been greater and 

promises to increase into the foreseeable future. 

I believe that the Federal Government has a fundamental and 

ever increasingly critical role in the support of research. Research 

is a shared responsibility of both industry and society at large, represented by government. In a market economy, industry without 

government support cannot be expected to invest large amounts of 

money in researching the technologies needed by society, many of 

which will not reach commercial application because of technical 

and financial risks. 

Research supported by industry alone typically results in the development of a select group of technologies that minimize risk 

while still advancing the developing company’s competitive advantage. These marginal advances in technology can then be marketed 

under patent protection to provide incremental improvements in 

cost and efficiency with guarantees to the user. Advances under 

this model are so gradual that they cannot address national policy 

and technological priorities. 

On the other hand, commercialization of new technologies is the 

responsibility of industry guided by clear and consistent government policies. 

It is my hope, and that of everyone at the EERC, that Federal 

funding for research at our nation’s universities can be significantly enhanced. However, there is a critical caveat. I believe, we 

believe, that if our nation is to address essential policy and technological issues in a timely manner we must significantly enhance 

our focus on practical market-driven research, which emphasizes 

government/industry partnerships. 

The EERC represents a unique model that integrates Federal 

and industry funding for technology development from basic applied research through engineering development, demonstration, 

and commercialization, sometimes called RDD&C. 

EERC and its Federal and private sector partners have built a 

closely coupled relationship between the frontiers of scientific 

knowledge, technology development, and commercial practice that 

provides practical market-driven solutions to critical barrier issues 

impeding the development and commercialization of the truly advanced technologies that achieve quantum improvements and in 

various technological areas. 

An essential feature of the EERCs model is that industry buys 

into the early stages of research and development to ensure the activities are market-driven. 

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As a result, industry partners have a vested interest in the intellectual property and an incentive to then demonstrate and commercialize the technology. It’s my hope that the EERCs model can be 

replicated throughout our nation. 

I’d like to give a few examples of our model and what it is doing 

and why the Federal investment is so critical. 

In the last 19 years, we have had nearly 900 clients here. They 

have come from 47 countries and all 50 States. 

The key to EERC’s that business development has been the Federal dollar, which has been utilized to leverage cofunding through 

partnerships with a wide variety of clients from all over the world. 

Seventy plus percent of our clients are repeat customers. 

We have ten Centers of Excellence here. None would be here 

without the Federal cornerstone funding. That is the cornerstone 

that has allowed us to grow through the co-funding and partnerships to develop critical Centers of Excellence, which are in most 

cases second to none in this country, in some cases the world. 

Last fiscal year, we had 405 active contracts here. 

Eighty-three percent were with private sector partners, but the 

majority of the funding was still Federal. The Federal funding is 

critical to bring the private sector partners here and thus develop 

relationships and joint ventures, which lead to very practical technology development. 

Last year, last fiscal year, 69 percent of our proposals were funded. That’s a very high success ratio, one of the highest I know of 

in the country. It’s because the work is very practical. It is all market-driven. 

This year to date during fiscal year 1906, and we have about a 

month left, we have 415 active contracts, the total value of those 

contracts is 132 million dollars thus far this year. 

The world is noticing. Last year we had almost seven million hits 

on our Web site, 6,983,000 or something like that. We are currently 

employing about 300 people, 286, 19 positions advertised right now, 

18 are new. We fully anticipate being near 500 to 550 in five years. 

If we sustain the growth rate we’re at right now—and this is our 

fourth consecutive record year—we will be providing employment, 

direct and indirect, for approximately 1,200 people in the greater 

Grand Forks area within 2 years. 

None of that, none of that, would be possible without the Federal 

cornerstone funding. Currently we have 18 technologies in the 

EERC Foundation, which are moving toward commercial deployment. We signed an agreement with a company in New Jersey last 

week, and I’m looking at another agreement next week. 

SENATOR CONRAD. Can I stop you on that point, because I know 

from conversations I just had with my colleagues, that it is of special interest to them. Can you just repeat the testimony you just 

provided? As I heard you say it, you have 18 technologies that are 

in the EERC Foundation and they are ready for commercialization. 

DR. GROENEWOLD. That’s correct. They are moving—they are 

moving toward commercialization. Technically they are ready. The 

corporate partners are in discussions with us. In almost all cases 

we have corporate partners who are interested in the technology. 

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SENATOR CONRAD. Are any of them technologies that you could 

talk about or are they in a stage where you can give an idea of 

what kinds of technologies? 

DR. GROENEWOLD. Senator Conrad, I can. I can give you an idea. 

Yes, I can, Senator. It’s a wide range of technologies focused on 

new, innovative, extremely clean energy production technologies, 

including remote site power generation. There are number of environmental control systems, in particular mercury control, things 

such as that, that are in those packages. 

SENATOR CONRAD. That is very useful because it is exactly what 

my colleagues have asked me to bring back, specific examples of 

how Federal investment is impacting the economy in a positive 

way, and, with energy so much the focus now, that is of special interest to my colleagues. 

How are Federal dollars affecting practical solutions to the energy challenges the country faces? 

MR. GROENEWOLD. We have a requirement that every Federal 

dollar be leveraged with nonFederal funds and it can’t be in-kind. 

It has to be in cash. That is necessary in our definition of peer review—someone in the private sector voting with their dollars for 

what we are doing. So what needs to be understood is that process 

in that there is, in the initial stages of research, what I would call 

basic applied research, and the only entity that tends to support 

that kind of work is the Federal Government. The federal government has a unique and fundamental role, no pun intended, to support the more fundamental, the more basic research. 

You’re familiar with our Cooperative Agreement with DOE. We 

voluntarily, in 1989, broke that agreement into two pieces, a basic 

applied piece, Federal money only, looking at new ideas and concepts that might have commercial potential. The ones that look 

really promising and have significant commercial potential, we 

then take to a joint venture program. We bring in joint venture private sector partners. 

So in all cases the Federal—the initial Federal funding, if you 

will—the starter kit, is the catalyst that has initiated every one of 

those programs. 

SENATOR CONRAD. And, without it, I assume none of these technologies would be advancing to a commercialization stage. 

DR. GROENEWOLD. I don’t know if I could say none would, Senator, but, Senator, I am doubtful. I’m doubtful. 

SENATOR CONRAD. Would some have made it on their own because of private sector support? 

DR. GROENEWOLD. In some cases, but generally the private sector 

is reluctant, my testimony indicated earlier, to fund that kind of 

work. 

SENATOR CONRAD. One might say that at the very least, without 

Federal support, these technologies would not be at the same stage 

of development and ready for commercialization. 

DR. GROENEWOLD. In all sincerity, Senator, I think we would be 

almost a decade behind in almost all of them . 

SENATOR CONRAD. A decade behind? 

DR. GROENEWOLD. A decade, uh-huh. 

For clarification, commercialization of energy and environmental 

technologies is a long-term process. We consider ten years to be 

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typical for taking a good idea to commercial deployment. That’s 

pretty fast. Once in awhile it’s less. So with the hesitance on the 

part of the private sector alone to invest in high risk research, 

many of these things probably would never happen or, if they had, 

it would be much later. 

SENATOR CONRAD. OK. 

DR. GROENEWOLD. Anyway, in summary, it is my belief that enhanced Federal investment in practical market-driven research, development, demonstration, and commercialization is the cornerstone of a successful and dynamic future for our country. The 

EERC is a proud partner in these efforts and looks forward to facilitating further advancement in this regard. 

I leave you with a quote from H.G. Wells. ‘‘Human history more 

and more becomes a race between education and catastrophe.‘‘ 

Education, in the broadest sense of the term, must win. Federal investment in knowledge is fundamental to achieving that goal. 

On behalf of the EERC, I thank you again for the opportunity to 

submit this testimony to the committee and welcome any questions. 

[The prepared statement of Mr. Gerald H. Groenewold follows:]

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SENATOR CONRAD. Thank you very much. It was very useful testimony to the committee and especially timely given the discussions that are underway. 

Dr. Alice Hoffert, the Associate Vice President for Enrollment 

Management. Welcome. 

DR. HOFFERT. Thank you. 

SENATOR CONRAD. It is good to have you here. 

Please proceed with your testimony. 

DR. HOFFERT. Thank you. Senator Conrad and Members of the 

Committee, my name is Dr. Alice Hoffert, and I’m the Associate 

Vice President for Enrollment Management at the University of 

North Dakota. I’m pleased to have the opportunity to submit this 

testimony to the committee. 

The purpose of the University of North Dakota, the reason we 

exist, is to provide students with high-quality, accessible, and affordable educational programs through the doctoral and highest 

professional degree level and to serve the public through high-quality research and public service programs linked to learning. 


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In order to meet this purpose, this university is committed to 

preparing students to lead rich, full lives, and to enjoy productive 

careers and to make meaningful contributions to society by providing them with a high-quality educational experience solidly 

grounded in the liberal arts. 

The mission of enrollment management at the University of 

North Dakota is to achieve and maintain a student recruitment, 

enrollment, retention, and completion rate that’s appropriate for 

this university. 

In order to met this mission, the Federal partnership and financial support for both Student Financial Aid and the Trio Programs 

are critical components. 

The mission of Student Financial Aid is to provide need-based financial assistance to students who otherwise would be able to—unable to attend the university. 

During this past year, 67 percent of UND’s student body received 

financial aid. It is not possible to meet the needs of students and 

this mission without the Federal investment of funding provided 

for Student Financial Aid. 

The largest source of student aid at the University of North Dakota is the Federal Government. Last year the the Federal Pell 

Grant program alone provided over 6.6 million dollars for over 26 

hundred low-income students at this university. 

In addition, the Federal Supplemental Educational Opportunity 

Grant Program provided almost a million dollars for 1,300 students. Additional Federal student aid was made available in the 

form of over one million dollars for the Federal Work-Study Program, which allowed almost 3,000 students to work in and off-campus programs. As a result of the Federal Carl D. 

Perkins Loan Program, almost 4 and a half million dollars in student loans were provided to over 2,400 of our students. 

SENATOR CONRAD. Let me just stop you there, because we have 

a proposal from the administration to eliminate Perkins loans. 

What would be the consequence of that? 

DR. HOFFERT. If that program were eliminated, this past year 

the collections that resulted from that program, over 4 and a half 

million dollars went to student loans. The federally insured student 

loans are not keeping pace in any way to provide the revenue that 

our students need in order to continue their education. 

So the Perkins loan for 2,400 of our neediest students allowed 

the institution to provide dollars we wouldn’t otherwise be able to 

provide, and those are the students who don’t have many other options. Our Perkins dollars are used for our neediest students. 

SENATOR CONRAD. Do you have any sense of how many of those 

students you would lose if the Perkins Loan Program was eliminated as the administration has proposed? 

DR. HOFFERT. Let me answer it a different way. If I were a needy 

freshman student at the University of North Dakota, I would need 

about $13,000 to go to school for 1 year. 

SENATOR CONRAD. 13,000? 

DR. HOFFERT. 13,000 to cover my cost of attendance. 

In order to do that, the Federal Pell Grant limitations, the 

SEOG, the Supplemental Educational Opportunity Grant, limitations——

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SENATOR CONRAD. Of course, that’s being frozen. 

DR. HOFFERT.—would not come one-fourth of the way to meet 

that cost. Then I can borrow money from the Federal Stafford Program, which is a tremendous program, but as a freshman I would 

only be able to borrow $2,625. 

How would I pay for the rest of those dollars that I need for that 

education? 

As a low-income student, I obviously wouldn’t have those resources myself, nor would my family have those resources. So what 

we would be saying to these students then, and it’s a public policy 

issue, we would be saying you do not have the right to access an 

education at this university or at most universities or most colleges. 

SENATOR CONRAD. That’s a pretty sobering assessment. Of these 

2,400 students, do you think some significant number of those students would not be able to come here if Perkins were eliminated? 

DR. HOFFERT. I would assure you that would be the case. These 

students would not be eligible to borrow alternative loans on their 

own. Those alternative loans are based on their credit or their credit history, which they are unlikely to have any, or their families, 

which again by definition of being low-income students they 

wouldn’t have access to. 

SENATOR CONRAD. Remind me of what the Stafford limit goes to 

in the second year. 

DR. HOFFERT. For freshman and sophomore it’s—for freshman 

it’s 2,625 and I apologize for not knowing the numbers beyond that. 

It is minimal. 

SENATOR CONRAD. Is it stepped up? 

DR. HOFFERT. It is. 

SENATOR CONRAD. So it is somewhat of a step-up? 

DR. HOFFERT. It is for sophomores, juniors, and seniors. 

SENATOR CONRAD. I trust the staff can get that for us to remind 

me what it is. I have seen those tables, but it would helpful for me 

to have what happens the second, third, and fourth years. Obviously, we have people who are already going to school here and it 

would be extremely unfortunate if we had people that were already 

in school, perhaps doing well in school, and they couldn’t continue 

their educations because these loan funds were not available. 

DR. HOFFERT. Thank you. The University of North 

Dakota’s commitment to low-income, first generation students is 

demonstrated by our participation in all five of the federally funded 

TRIO Programs. The TRIO Programs were established by the Federal Government to ensure equal educational opportunity for all 

Americans regardless of race, ethnic background, or economic circumstances. 

As one of the TRIO Programs, Federal funds are provided to the 

UND Talent Search Program to serve low-income, first generation, 

potential college students in targeted public middle schools and 

high schools in eastern and southern North Dakota and northwestern Minnesota. 

In addition, Federal funds are made available to the UND Upward Bound Program to serve high school students from northern 

and central North Dakota and eastern Minnesota during the academic year as well as with a summer program. 

214

UND’s Educational Opportunity Center Program is also federally 

funded and it exists to help residents of the northern half of North 

Dakota and a portion of northwest Minnesota enroll in the college 

of their choice. The UND Student Support Services Program receives funds in order to increase retention and graduation rates of 

eligible UND students and to foster an institutional climate that is 

supportive of the success of low income, first generation college students and individuals with disabilities. 

The purpose of the Federal funds received for the UND Ronald 

E. McNair program is to prepare undergraduates (juniors and seniors) who are first generation and low-income students or who are 

from a group underrepresented at the doctoral level for graduate 

studies. 

This is accomplished by providing opportunities to define goals, 

engage in research, and to develop the skills and student/faculty 

mentor relationships vital to success at the doctoral level. And as 

you mentioned earlier, all of those programs are zeroed out in the 

President’s budget. 

And while it’s important to understand the affected programs 

and recognize how critical the receipt of Federal student aid and 

TRIO Programs funding are to the University of North Dakota, the 

full message is best delivered through the voices of our students. 

One student who received Federal financial aid and participated in 

the TRIO Programs recently wrote, ‘‘The McNair Program helped 

me find my dream job.’’

Another wrote, ‘‘I came back to college as an older than average 

college student, a single mother with four children on food stamps, 

WIC, and housing assistance. I was also a first generation college 

student majoring in mathematics. It was obvious I couldn’t support 

my family as a dental assistant, and I had always dreamed I could 

get my degree and teach. I quickly realized I had a lot of learning 

to do, and with the help of Student Support Services was able to 

get the tutoring I needed to finish my degree. All of us have things, 

people, and events that shape us, and for me it was the TRIO Programs.’’

Still another wrote, ‘‘The feeling I have, after finally attaining a 

graduate degree, is hard for me to express; although I dreamed of 

it for so many years; I never believed it would be possible for me. 

I am the first member of my family to have finished a graduate degree; so it is also a very big deal for them.’’

I would suggest the words of a particular student sum the value 

of Federal funding provided in the forms of financial aid and TRIO 

Programs. This student dropped out of high school when she 

turned 17. Eight months later she found herself pregnant and 

without a high school diploma. She received her GED and realized 

that she had more potential than she thought. 

With her daughter—when her daughter was a year old, she went 

to the TRIO Programs Educational Opportunity Center to find out 

what she had to do to get into this university. With their help, she 

was admitted to the University of North Dakota. 

She writes, ‘‘Since I’ve started attending UND, I feel like I’m 

really doing something to change my life and working toward my 

goal. Now I have moved back to my parents’ home and my family 

or friends watch my daughter while I attend school full time. I no 

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longer receive government assistance and I’m working part time. 

Because of all the support I have from family, friends, and other 

organizations like EOC, I’m able to pursue my dreams and fulfill 

my potential. Going to college was something that didn’t seem realistic a few years ago. Now I know I can do it. I am so blessed to 

have so many opportunities here and I am really grateful for all 

the supportive people in my life.’’

Entire families are also impacted by the partnership between the 

Federal Government and schools such as the University of North 

Dakota. One student wrote, ‘‘Upward Bound and McNair have provided the tools for me to complete and surpass my goal of reaching 

a bachelor’s degree. Out of nine children in my family, four attended Upward Bound and one attended Indians into Medicine 

Program. Of the five, two have master’s degrees, one has an associate’s degree, and I have a Ph.D. I’m the first person who graduated 

from our reservation high school and tribal community college to 

receive a Ph.D. If not for the efforts of the TRIO people and their 

belief in me, I am sure I would not be where I am today.’’

These are the voices of students who have benefited from the 

Federal funding, which has provided the financial means and necessary programs to help make their dreams become realty. It 

doesn’t get any better than this, and our delegation from North Dakota has stood firmly behind education and access to education. In 

a while you’ll be hearing from two of our TRIO students and you’ll 

hear their own voice as well. 

And for this opportunity on behalf of the University of North Dakota, I thank you again for the opportunity to submit this testimony to the committee and would welcome any questions that you 

may have. 

[The prepared statement of Dr. Alice L. Hoffert follows:]

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SENATOR CONRAD. Thank you, Dr. Hoffert. That was very powerful testimony. 

Mr. Gjovig, thank you so much for being here and we look forward to your testimony. 

MR. GJOVIG. Thank you. Senator Conrad and Members of the 

Committee, my name is Bruce Gjovig and I serve as Director and 

Entrepreneur Coach of the UND Center for Innovation. The center 

works with innovators and entrepreneurs to launch new ventures 

and commercialize new innovations and technologies. 

We have helped launch over 420 ventures since 1984, resulting 

in more than 100 million dollars in venture investment, creating 

something over 4,000 new jobs in the State. Now the center has received five national awards for excellence in innovation and entrepreneurship, and the Forbes Princeton Review ranked UND number 14 on the top 25 listing of America’s Most Entrepreneurial Colleges. 

I am pleased to have the opportunity to submit this testimony to 

the committee. My testimony will focus on the importance of Federal funding for economic development through higher ed, specifiVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00225 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH

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cally how Federal funds are important in growing entrepreneurs 

who are vital to our State and nations’s future. 

Our success is due in large part because of Federal funds, period. 

The center has raised 26 million dollars for buildings and outreach 

programs over the years and 6 and a half million or 28 percent has 

come from EDA, SBA, HUD, USDA, and energy funds. Three and 

a half million dollars of HUD funds built our first tech incubator. 

Senator Conrad, I want to again publicly thank you for advocacy 

and support in our grant proposals in that whole process. 

EDA and HUD provided 20 percent of the funding for our second 

incubator and the Ina Mae Rude Entrepreneur Center was the first 

Center for Excellence designated under the new State program. 

Federal funds made these world-class buildings possible. This infrastructure will serve the entrepreneur community for decades. 

We have used Federal funds to secure a four to one match, including leverage of 11 million dollars from successful entrepreneurs 

supporting the next generation of entrepreneurs and innovators. 

Federal funds prime the pump to attract other funding. We have 

bootstrapped the building of a nationally recognized and ranked entrepreneur center with a lot of help from key friends, especially our 

Federal partners and successful entrepreneurs. 

Besides infrastructure, the Federal Government provides vital 

funds for outreach initiatives, projects and programs so we can connect the talent, technology and training of the university to entrepreneurs and economic developers. The center has received funds 

from EDA, USDA, SBA, and energy to provide assistance to 

innovators who could not otherwise afford assistance in any other 

way. 

Two Federal programs are the largest source of seed capital for 

innovations in the world. They are the SBIR and STTR programs 

and the 11 Federal agencies dedicating two and a half percent of 

the outside R&D budget for R&D with small businesses. SBIR provides over 4,600 awards each year worth over 2 billion dollars. 

Since 1983, small tech firms have secured 60,000 awards worth 

more than 12 billion to fund innovative research with small companies. Over the past 15 years, 31 North Dakota firms have received 

more than 23 million in SBIR awards. SBIR has provided key innovation funding to such North Dakota companies as AGSCO, Killdeer Mountain Manufacturing, Meridian Environmental Technologies, Microbeam Technologies, Phoenix International, Sioux 

Manufacturing, Harvest Fuels, Technology Applications Group, 

CEO Praxis, and many more. 

The research would not have been done in these firms without 

SBIR funds and in some cases the company would not have survived without SBIR funds. North Dakota would be much poorer 

without these tech ventures. 

North Dakota ranks 47th of the 50 States in population, but 49th 

in the number of SBIR proposals submitted. However, North Dakota ranks number 4 in conversion of SBIR proposals at 27 percent, thus we rank number 37 in total SBIR awards. We are fighting above our weight, but we also know we can do better with more 

proposals coming from more companies. 

A key to North Dakota’s success is these two SBA programs for 

SBIR rural outreach, and they are the SBIR Rural Outreach ProVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00226 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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gram (ROP) and the Federal and State Technology Partnership, 

also called FAST. They provided competitive grants to the bottom 

25 States to increase participation and competitiveness in the SBIR 

program. 

Two and a half million dollars of funding, a modest amount for 

these outreach programs, was discontinued after fiscal year 1904. 

Several senators urged the SBA to restore cuts in ROP in their—

in fiscal year 1905 and 1906 budgets. 

Several senators sent a letter to SBA and I quote. These programs are critical to the cultivation of technology and high-tech 

small businesses through increased participation in the SBIR and 

STTR programs in rural and underutilized States. In the past, 

firms located in a relatively small number of States have been 

more successful in securing SBIR and STTR awards, but the FAST 

and ROP programs have helped small businesses in every part of 

the country compete effectively for SBIR projects. These awards not 

only provide R&D dollars to small high-tech firms, but they encourage technical advancement, improve overall productivity, increase 

economic growth and create jobs. Eliminating these important initiatives is unwarranted and unwise. 

I could not have said it better myself, so I didn’t. 

The center received several SBA ROP grants between 50,000 and 

100,000 dollars per year. With that money, with less than 100,000 

dollars per year in Federal funds, we brought in more than two 

million dollars a year in SBIR awards to North Dakota, a return 

of 20 to 1. 

The few years we did not secure a SBA grant for SBIR outreach, 

the number and quality of the SBIR proposals dropped precipitously. There was a direct correlation. Congress needs to restore 

these SBIR outreach funds if they are serious about innovation in 

rural States and before we eventually become a divided nation of 

haves and have-nots of innovation in business. 

We have accessed several other Federal programs to build viable 

innovative ventures. Please refer to my handout for a listing of 

other useful Federal programs, but let me say that public and private investment is the mother’s milk of innovation and entrepreneurship. That investment is too often too scarce, and it is vital. 

Congressmen Dan Manzullo of Illinois and Earl Pomeroy of 

North Dakota recently introduced H.R. 5198, the Access to Capital 

for Entrepreneurs Act of 2006. 

This legislation would create a 25 percent investment tax credit 

for individual angel investors to invest in qualified small business. 

The credits would be available for investments up to $250,000 in 

an entrepreneur venture. Your support of this legislation would be 

greatly appreciated. 

On the last page of my handout, I list ten reasons why Federal 

support of higher education is so important. 

Here they are. 

No. 1, creates critical infrastructure such as buildings, labs, incubators, tech parks, entrepreneur programs, and other infrastructure. 

No. 2, it develops our talent pool and their potential. Human and 

intellectual capital are vital to a knowledge, technology, and innovation-based economy. 

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Three, it supports graduate students and enhances undergraduate education as it helps recruit, educate, and retain talent 

from North Dakota and around the world. 

No. 4, develops research centers of excellence. 

No. 5, funds vital outreach to innovators connecting the university to entrepreneurs and investors. 

No. 6, provides critical seed funding for high risk R&D, SBIR, 

and startup funds. 

No. 7, attracts State and private investment through a match in 

leverage, thus priming the pump. 

No. 8, keeps North Dakota and America competitive by creating 

new ventures, new industries, new economic engines. Think of the 

innovations alone that are going to come out of UAV. 

No. 9, lays the groundwork for future innovation and success. 

Basic research leads to applied research, leads to innovation, which 

leads to new industries. 

And, ten, it keeps our mature industries, like energy, ag, and 

manufacturing, competitive through innovation. 

On behalf of the State’s entrepreneurs and the UND Center for 

Innovation, thank you again for the opportunity to submit this testimony to the committee and I would welcome many questions you 

may have. 

[The prepared statement of Mr. Bruce Gjovig follows:]

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SENATOR CONRAD. Thank you very much, Mr. Gjovig. For the 

North Dakota based the companies that you have listed, AGSCO, 

Killdeer Mountain Manufacturing, Meridian Environmental Technologies, Microbeam Technologies, Phoenix International, Sioux 

Manufacturing and the rest, how important would you say Federal 

funds have been to those companies’ success? 

MR. GJOVIG. In at least 80 percent of them, they were essential 

and critical. Without them, there would probably be no company. 

Another 20 percent they would have been limping along. They 

would not be the company they are. They probably would not have 

the innovation and technology they have but they probably have 

some survivability, but many of them just simply wouldn’t exist 

without SBIR, and they certainly wouldn’t be the growing and vital 

companies that they became. 

SENATOR CONRAD. If you were able to speak directly to my colleagues that are on the conference committee—and you know how 

it works in Washington, you have you been there—what would you 

say? We often have a very brief moment to make an impression on 

our colleagues. 


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In the conference committee, we will be dealing with every budget issue. We will be dealing with the war in Iraq. We will be dealing with veterans’ funding. We will be dealing with Social Security. 

We will be dealing with Medicare. We will be dealing with every 

aspect of Federal funding, funding for the parks of the nation, law 

enforcement, FBI, CIA, and all the rest. 

If you were to have just a brief moment to impress upon my colleagues, who are skeptical about whether or not Federal funds are 

actually producing tangible results, what would you say to them to 

convince them? 

MR. GJOVIG. I would let them know that since World War II half 

of the technical innovation in this country has come from the Federal funding. You can directly trace back to the Federal fundings 

from World War II and we are alone the superpower and the dominant power in the world because of innovation and technology, and 

that can be traced right back to the Federal incentives and taking 

those high-risk funds from the very beginning. 

And it’s the magic of America in combining this research and 

technology with an entrepreneur and innovative spirit, and the 

other programs are—by itself doesn’t get the job. You need the D, 

you need the C as Gerry so often talks about, and that in combination is what has created the dynamic economy we have. 

And we can’t afford the work. We don’t have a great economy 

and we can’t fight a great war unless we have the innovation so 

much provided by the companies and universities that—that are 

part of this country. 

SENATOR CONRAD. Thank you. I think that is a very good answer. 

Hopefully, when I use it with some of my colleagues, it will be effective. 

MR. GJOVIG. You don’t have to attribute it either. 

SENATOR CONRAD. I thank you for that. 

Dr. Zimmerman, thank you so much for being here, and we look 

forward to your testimony. Good to have you here. 

DR. ZIMMERMAN. Senator and Members of the Committee, my 

name is Delore Zimmerman and I’m president CEO Praxis, Incorporated. We are an economic strategy and development company 

here in Grand Forks and Fargo. 

As Bruce said, we are an SBIR winner, an eight-time winner actually over the last 10 years. The program has enabled us to do 

things we never could have done without the Federal funding and 

to penetrate new markets across the country, so I think the SBIR 

program I would say it’s the fastest shipping Federal fleet. That’s 

how I would put it. 

But I want to thank you for holding this hearing today on the 

impact of Federal funding on higher education. The United States 

has always relied heavily on the innovation of its people to compete 

in the world marketplace and our nation’s universities and colleges 

play a key role in that part of our competitiveness. 

They are very important innovation-generating institutions. 

We face a serious fiscal environment in our country today, but 

there is no wisdom, absolutely none, in cutting investments in 

higher education. A world-class knowledge and learning infrastructure is a very vital part of competing in a global, knowledge-driven 

economy. 

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A strong higher education system is critical to developing and 

nurturing an informed citizenry and sustaining a robust democracy. 

I would like to briefly highlight three areas in which I think 

higher education plays a key role. One, our nation’s standard of living; two, our economy’s competitiveness and productivity; and, 

three, our people’s quality of life. 

There is a proven and strong relationship between the economy’s 

development and use of science and technology and its standard of 

living. Research by the Milken Institute, for example, shows that 

75 percent of the variability in a State’s per capita income can be 

accounted for by its ability to convert its science and technology assets into economic development. Our higher education system, at 

this point, has been a tremendous economic generator of a middle 

class, but other countries are making strides to rival what we have 

worked very hard to build. 

On this front there is really good news in North Dakota. The 

most recent National Science Foundation’s Science and Engineering Indicators for 2006 shows that we rank second in terms of academic R&D per $1,000 of gross State product. And, in a complete 

shift from the past, we rank fourth today, not 40th, in terms of 

technology startups as a percentage of total business, which is a 

fundamental turnaround from the last decade. 

North Dakota’s recent ranking among the States as having the 

third highest growth in per capita income, I believe, reflects our determined efforts in the last few years to better utilize the assets 

of our universities and colleges for creating new economic opportunity. 

Our universities and colleges, along with our K through 12 

schools, are also important assets in creating a skilled work force, 

and here again the returns are substantial. Research by the National Bureau of Economic Research has shown that a 10-percent 

increase in workforce education results in almost an 8.5 increase—

18.5 percent increase of productivity in manufacturing and almost 

a 13 percent increase in nonmanufacturing industries. 

A comparable investment increase of 10 percent increase in investment and equipment yields a three percent gain in productivity, so that means that the marginal value of investing in 

human capital is about three times greater than that for machinery, and I oftentimes think that we’ve become too enamored with 

the technology and don’t pay enough attention to the human capital dimension, which depends almost entirely on higher education. 

There are, of course, benefits to our society of higher education 

for which mere numbers and statistics are inadequate. People educated in the humanities, the sciences and the arts, are more likely 

to participate in civic affairs of their community, State, and country. 

They have a greater appreciation of other cultures and international events. Advancements in science at our universities and 

colleges have resulted in tremendous benefits for the health and 

well-being of Americans and people almost everywhere around the 

world. 

Equally important I think it’s important to mention that the people that work in our institutions of higher education are tremenVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00236 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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dous assets to our communities and region. Oftentimes they are the 

leading force and the driving force behind the economic development of an area. 

I currently serve as a private sector member of the North Dakota 

Higher Education Roundtable and we have recently, and unanimously, recommended that higher education’s budget comprise no 

less than 21 percent of the upcoming of the total State budget. A 

comparable commitment at the Federal level I think would be a 

wise investment in our nation’s future. 

In closing, higher education in this country has always been a 

gateway for people to a better life and the return on investment for 

our country has been substantial in so many ways, both economic 

and social. In that case, I think our most prudent course of action 

is to increase that. 

[The prepared statement of Dr. Delore Zimmerman follows:]


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SENATOR CONRAD. Thank you, Delore. 

DR. ZIMMERMAN. Thank you, Senator Conrad. 

SENATOR CONRAD. Excellent testimony and, again, right on point 

with what we are trying to achieve here today. Let me ask you the 

same question I asked Mr. Gjovig. If you had just a few sentences 

and you’re in the heat of the conference committee, I can tell you 

it gets rather intense in there, and you’re facing a very skeptical 

colleague, who says, Senator Conrad, this is just a waste of 

money—this is nothing but gilding the lily—which I had a colleague say to me in a recent meeting about higher education spending, what would your rejoinder be? 

MR. ZIMMERMAN. I would say that the Federal government is allowing research and development on things that would not be done 

on the private sector at this point. With the nature of extreme capitalism, if you want to call it that right now, lower cost, higher 

value added, these sorts of things just aren’t being done because of 

the timeframe that returns are happening, so the Federal funding 

is just so important to make these—to get these things started. 


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SENATOR CONRAD. And what is the consequence of the failure to 

get them started? 

MR. ZIMMERMAN. Well, we’ll continue to fall behind in some of 

these areas. 

SENATOR CONRAD. As a nation? 

MR. ZIMMERMAN. Yes. 

SENATOR CONRAD. So what are the implications? We are the 

most powerful nation in the world, the richest nation in the world. 

We see China coming up very rapidly. Our indebtedness to the 

world has skyrocketed. 

We have doubled what we owe the rest of the world in five years, 

more than doubled. So that means we now owe the Japanese almost $700 billion. We owe the Chinese approaching $300 billion. 

We owe the Caribbean Banking Centers almost $100 billion. We 

owe the South Koreans almost $50 billion. 

How central is higher education to our ability to continue to be 

the most powerful country in the world? 

MR. ZIMMERMAN. Well, there’s a lot of people who claim that our 

higher education system is our No. 1 asset and I would not dispute 

that. 

SENATOR CONRAD. Thank you very much. I appreciate your testimony and the testimony of all of the others. If any of you who have 

already testified have something else that’s pressing, we would certainly understand if you need to leave at this time. 

I’m going to conclude with testimony from two TRIO students 

that are with us today, Logan Tong and Gary Moore, a Veterans 

Upward Bound student. 

Logan, welcome. 

MR. TONG. Thank you, Senator. I’m 20 years old and I’m a sophomore at the University of North Dakota, and it was only Wednesday of this week that I found out I would be talking to you all 

today, so forgive me if I stutter. 

I’m up here to tell you a two-party story about my experiences 

with life, education, and the ever-important pursuit of happiness. 

To begin, I was born to two lower-middle, working-class parents, 

neither of whom had more than a high school education. They both 

worked very hard to ensure I was comfortable. Yet despite their efforts, I was still an anxious child. 

And though my father had a very strong work ethic, he found 

himself in the tight grip of addiction, self-medicating a physical disability with alcohol and drugs. For as far back as I can remember, 

every would-be meaningful moment I spent with my dad was while 

he was intoxicated. 

No one, including my mother, would acknowledge he had a problem. Mom was off depressed and always in denial about my dad’s 

unhealthy habits. She enabled him, and I continued to grow up 

with less than attentive parents. From as early as the first grade, 

I spent my afternoons and summers without proper supervision or 

daycare, due to the fact that my parents simply could not afford it. 

As I’ve already mentioned, I was a very anxious kid. 

That anxiety manifested itself into physical pain throughout my 

head and neck. It affected me daily, to the point where school was 

no longer an option. I couldn’t last a day without getting a major 

headache. 

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By my fourth year in high school—

SENATOR CONRAD. I can tell you that a lot of my days in Congress are like that. 

MR. TONG. By my fourth year in high school, I had only earned 

9 of the 24 credits required to graduate. 

My childhood caught up with me and I had to make a decision. 

I dropped out of high school in order to pursue a GED. That’s 

when my development with the federally funded TRIO Programs 

began. I studied for my GED in the Grand Forks Adult Learning 

Center, and once a month an advisor from TRIO would visit the 

center to give presentations on very topics, including higher education, technology, personal finance, and other services TRIO has 

to offer. 

For those who don’t know, TRIO Programs helps perspective and 

current college students use their available resources to succeed. 

From middle school to those pursuing their Ph.D., TRIO has a far 

and effective reach for young people who might not otherwise grasp 

that they can excel in college. 

I spent a year studying for my GED exams, and I proudly received my diploma and salutatorian honors in May of 2004. Still 

though, my involvement with TRIO was just starting. I used the 

next year to volunteer and get involved with TRIO Programs. I 

mentored high school students through TRIO’s Upward Bound Program and spoke about my struggles to middle school classrooms 

with a fellow TRIO student. 

In August 2005, I started classes at the University of North Dakota. I earned a 4.0 GPA in my first semester and was placed on 

the dean’s lift. TRIO helped me all the way. I couldn’t have done 

it without them, nor would I have thought to even try. 

I’m proud to say that my involvement with TRIO continues and 

hopefully will for many years in one way or another. I’ve even 

taken a summer tutor/advisor job with TRIO’s Upward Bound Program. They were kind enough to let me take the afternoon off to 

do this. I’m excited that there is an opportunity for students to 

overcome even more challenging obstacles than I faced and still 

have a good chance to succeed. I’m grateful for the opportunity to 

give back to such an altruistic program. 

In the future, I hope to continue with TRIO by applying for the 

Ronald E. McNair Postbaccalaureate Program, a program designed 

to help those planning to earn their master’s degree or Ph.D. 

Two years ago, I was what seemed like a liftime away from just 

graduating high school. College never crossed my mind. Without 

the Federal funding required to offer TRIO Programs and Pell 

Grants, I wouldn’t be here in front of you all. I wouldn’t be able 

to tell you that I am succeeding. 

It is my sincere hope that the decisionmakers will hear not only 

my story but countless other stories of success shaped by government-funded agencies like TRIO, agencies that offer people the 

help they need and foster the dreams that so many dismiss as unattainable. These programs are a crucial element to a brighter future, a future that everyone can enjoy and take part in. Past, 

present, and future generations will all benefit from support of 

these programs. Thank you. 

[The prepared statement of Logan Tong follows:]

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SENATOR CONRAD. Thank you very much, Mr. Tong. You are a 

very impressive young man. I can’t think of a better example of 

why a program like the one you have benefited from should not be 

eliminated, and I hope very much I can share this story with some 

of my colleagues. 

MR. TONG. Please do. 

SENATOR CONRAD. It is very powerful. 

Gary, welcome. It is good to have you here. 

MR. MOORE. Thank you, sir. I’m Gary Moore. 

Approximately a year ago, I retired after serving 26 years in the 

United States Air Force. I’m married. I don’t know why she stuck 

with me but for 24 years she has been with me and we also have 

two sons, one of whom is working in pursuing his degree and my 

youngest son, who is currently a United States Army cavalry scout 

serving his second deployment in southwest Asia. 

Approximately—or through that 26 years I served two tours out 

at the Grand Forks Air Force Base, totaling up to 14 years, voluntarily mind you. 

SENATOR CONRAD. We are glad to have had you there. 


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MR. MOORE. And the last eight and a half years of my service 

was as a uniformed First Sergeant. 

Prior to retiring, you know, my wife came up to me and she said, 

‘‘Gary, what are you going to do when you grow up?‘‘ You know, 

this was about a year before I retired. I decided I wanted to go into 

social work. 

Well, I knew I needed formal education for that. 

After I retired and going through the Veterans Administration, 

I’m also a disabled vet. They’re taking care of the funding for my 

schooling, but there’s more to it than just funding. I’ve got to be 

able to learn the information, learn the—obtain the knowledge to 

be able to perform these duties. That’s where Veterans Upward 

Bound came in. 

First thing, they conducted an assessment. I found out something 

I already knew, my math was horrible. I also found out that for 26 

years I had been writing like I was in the military, not in the 

studying world, and, ladies and gentlemen, let me tell you there’s 

a big difference. 

Personally like I said, you know, I was a disabled vet. Could I 

physically go to school every day? Could I do this? And also a nontraditional student, which I’m finding has a definition of basically 

not 19. You know, there’s a lot of things, you know, that go through 

your head at this point. 

How did Veterans Upward Bound help me out? The first thing 

that Colleen Rude did is she put me into 20-plus hours of handson math and English schooling, training, education. At this point 

today, I now understand why you want to add numbers and letters, 

algebra. I never got it before, but now I’m getting it. 

A lot of writing. I now write in paragraphs instead of bullet 

statements, and this morning I met with my social worker advisor 

and she assured me that I will get more training as I go on with 

my degree. 

SENATOR CONRAD. Gary, would you be willing to have a consultation with my communications director right after this? I have been 

trying to convince him that this paragraphing is a good idea. 

MR. MOORE. I can help you with your bullets, sir. 

SENATOR CONRAD. OK. 

MR. MOORE. Additionally and probably the most important 

part—I mean don’t get me wrong. Math and English were solid. It’s 

good knowledge and it’s ongoing, but the most important part was 

probably the counseling, the formal and informal part, transitional 

counseling. 

You know, a lot of us in Veterans Upward Bound Programs are 

retiring, some are separate—separated troops after four or 8 years. 

This is a different world out here that you live in than what we 

are used to, and if you don’t believe me, go out there to that base 

for about 30 days and do what they do and see if that’s different 

from what you’re used to. 

They do the transition counseling with us. They would counsel 

us on the civilian world, just things that—you know, why are we 

doing this, and Colleen and her folks there would explain it to us, 

would guide us through it. 

Most importantly was how to survive academiaville, college. You 

know like I said, a year ago I walked around at the Grand Forks 

238

Air Force Base and I had 19 year olds, 20 year olds, 21 year olds, 

my airmen, referring to me as First Sergeant, Shirk, Top, sometimes sir. I walk around here and these same 19, 20, 21 year olds 

take the phone away and go ‘‘Dude.‘‘ That’s a little different, your 

know. Colleen and her folks exposed us to those things. 

All right. And the last part of it is the veteran interaction we are 

supposed to give each other. We all have that bond and those 

things, you know, help you through this. Has Veterans Upward 

Bound made a difference? I will tell you today there are graduates 

of Veterans Upward Bound going through the engineering program. 

In fact, a couple of my former troops said we could sit there between the three of us. We couldn’t get one plus one equals three, 

two, four. Well, he’s out here going through the engineering program through the heavy math and science programs. 

I have other friends that have completed the physician assistance 

programs here that are out there and they are doctoring folks. 

Other students are graduates of Veterans Upward Bound. They 

have gone on to programs for underwater welding, who are out 

there as entrepreneurs in the business world. 

For me personally I’m pursuing my degree in social work, actively pursuing it. I’m doing well. My outlook is bright, my confidence is high, and honestly because of Veterans Upward Bound 

myself and veterans that have come before me and those that are 

going to be coming behind me we owe a debt of gratitude to Veterans Upward Bound because it’s helping us pay back society or 

contribute in a greater manner to society. 

Thank you very much. 

SENATOR CONRAD. Thank very much. That was just terrific. I tell 

you I could not be more pleased with the testimony we have had 

here today. I came here with a goal and hope that we would receive 

testimony that would help us in the very tough fight that is to 

come. And, believe me it is as tough a fight as I have ever seen 

because of the budget that has been set up and partly because of 

the extraordinary war funding costs that have been brought to us 

in what are called supplemental appropriations bills. 

The war costs were not budgeted for. There was no warning 

given to the Congress that the administration was going to come 

and ask for nearly $100 billion. That’s a stunning amount of 

money, even to the Federal government, and that has soured the 

atmosphere quite dramatically in the budget world in Washington. 

As you can imagine, people are scrambling as to how we are going 

to pay for all these things, which it is made more difficult by the 

fact that we are now running very large budget deficits and adding 

very substantially to our national debt. This year with the budget that has been proposed, $600 billion, 

will be added to the debt in 1 year. That is truly stunning when 

the debt is in the range of $8 trillion overall and you add $600 billion in 1 year. Over the next 5 years of this budget, $3 trillion will 

be added to the debt. Over the previous 5 years, we added $3 trillion to the debt. 

You can see these are stunning increases, and they are leading 

to dramatically increased budget pressure. That is what is happening and different people have different priorities. Some of my 

239

colleagues are saying higher education is nice but it is not essential. They say the war, that is essential; and rebuilding after 

Katrina and Rita, that is essential. On the other hand, higher education can be cut; people will have to borrow more money but somehow they will get through. 

I think today we have received testimony that will help persuade 

at least some of our colleagues that higher education is much more 

than a nice thing. It is much more than one of those things you 

would like to have but do not need to have. As I see, it if we do 

not invest resources in education, America is going to slip in its position in the world. We have already slipped financially. We have 

now become the biggest debtor nation in the world. We owe more 

money than any other country. And, I think the biggest, the single 

biggest, mistake we could make is not to continue to invest in education, technology, and research because that is the one place we 

continue to lead and it is what allows us to be the most powerful 

nation in the world and the richest nation in the world. To give up 

that edge, I think, would be a profound mistake, and I believe I 

have heard here today very strong evidence for that position. 

I want to thank each and every one of you for your testimony 

here today. The Senate Budget Committee thanks you for your contributions. 

You know, the Senate Budget Committee has already completed 

its work for the year in terms of hearings on the budget in Washington. But given the fact that we are going into a conference committee and what we are hearing from some of our colleagues, I 

thought it would be critically important to have today’s hearing so 

that we would have fresh evidence to bring to this fight. I want to 

especially thank you for your excellent testimony. 

I know here we are on a beautiful Friday afternoon. 

I think some people in the audience here would have preferred 

to be on the golf course perhaps. I very much appreciate your taking the time to be here and provide these insights and the committee thanks you as well. 

With that, we adjourn this hearing. 

[Whereupon, at 4:06 p.m. the hearing was adjourned.]

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BUDGET IMPACT OF CURRENT AND PROPOSED BORDER SECURITY AND IMMIGRATION POLICIES 

WEDNESDAY, AUGUST 30, 2006

U.S. SENATE, 

COMMITTEE ON THE BUDGET, AURORA, COLORADO

The Committee met, pursuant to notice, at 2:30 p.m., in Aurora 

City Council Chambers, 15151 East Alameda Parkway, Hon. 

Wayne Allard, presiding. 

Present: Senator Allard. 

Staff present: Scott Gudes, Majority Staff Director, Jennifer 

Pollom, Majority Staff, Samuel Donoghue, Majority Staff, and Ryan 

Smith, Senator Allard’s staff. 

OPENING STATEMENT OF SENATOR WAYNE ALLARD 

SENATOR ALLARD. We’re going to go ahead and call the Budget 

Committee hearing to order. 

I just want to take a moment here to inform those of you who 

have taken interest in this hearing to understand the hearing rules 

of a Senate Committee. 

Now, first of all, we don’t allow demonstrations in a Senate Committee Hearing, and we would ask that there will be no demonstrations from the audience. 

We hear strictly from two panels today, and we will ask the first 

panel to make 10-minute statements and then there will be a question and response period from the Committee. 

Even though we will ask our panel members to give a limited 

statement to the Committee, their full statement will become a 

part of the record. 

The Senate Budget Committee Field Hearing is on the Budget 

Impact of Current and Proposed Border Security and Immigration 

Policies. 

Good afternoon. It is my pleasure to welcome you to this Senate 

Budget Committee Hearing on the Budget Impact of Current and 

Proposed Border Security and Immigration Policies. 

I want to thank each and every one of you for attending today. 

Today’s hearing is the realization of what I’ve been saying for several months: it is time that we take this debate out of Washington 

and place it squarely in the hands of the American people—where 

it belongs. 

Taking the debate to the citizens of Colorado serves two purposes. First and foremost, it will allow Coloradans a voice in the 

debate, and second, it is an opportunity for Coloradans—myself inVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00263 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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cluded—to study the impact of proposed legislation on the future 

of this country. 

I thank Chairman Judd Gregg for calling this important hearing. 

While this is a hearing of the Budget Committee, and thus on 

the budgetary impact of legislation, the underlying policies we are 

examining—immigration—happens to be one that evokes strong 

emotions from people on both sides of the debate. 

As a United States Senator, it is my responsibility to see through 

the cloud of emotional rhetoric that often blurs a debate and do 

what is in the best interest of the United States and the citizens 

of Colorado. 

The principle which I have relied on to guide me through the debate is simple: the rule of law. While America is a nation of immigrants, she is also a nation of laws. Immigration laws are no exception. 

To me, upholding the rule of law means securing our borders, 

stepping-up interior enforcement, and not rewarding those who 

have broken our law, especially at the expense of those who are 

abiding by the law. 

While there has been considerable debate with my colleagues 

who disagree with me on that point, one aspect of the debate that 

I do not believe has received the attention it deserves is the impact 

on the budget of our Federal, State, and local governments. 

As a member of the Senate Budget Committee, it is my duty to 

ensure that the budget aspect of all legislation receives the attention it deserves—including immigration. 

This aspect is particularly important for the American people to 

understand because ultimately, as taxpayers, will bear the financial burden. 

Toward that end, in May of this year I raised a budget point of 

order—a tool that allows a Senator to require a closer look at the 

long-term budget impact of legislation—in response to an immigration proposal being considered on the Senate floor. 

While that inquiry brought some needed attention to the impact 

on the Federal budget, the U.S. Congress has not had sufficient opportunity to hear from our Nation’s communities who are at the 

front lines of the immigration debate. 

From law enforcement to education to health care, State and 

local governments bear many of the costs associated with inadequate border security and interior enforcement. 

Rich Jones and Robin Baker of Colorado’s Bell Policy Center estimate the costs of providing federally mandated Government services to Colorado’s approximately 250,000 illegal immigrants is 

nearly $225 million per year. 

Another group, Defend Colorado Now, estimates the cost to Coloradan’s to be in excess of $1 billion per year. 

While estimates vary, one thing is for certain: Federal immigration policies have real and profound impacts on States and communities, many of whom struggle to meet the demand for services 

from their current populations. 

Indeed, with the looming retirement of the baby boomers, even 

the Federal Government is grappling with how to pay for its existing obligations. 

259

To give you an example of how serious the issues is, by 2030 the 

cost of just three entitlement programs—that’s Social Security, 

Medicare and Medicaid—alone will exceed the total cost of Government today. 

And if you’ll look up on the screen, you will notice a chart there 

that shows that in 25 years, spending on just those three entitlement programs will exceed the total cost of the entire Federal Government today. That is under current law.

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The next slide that we put here for you shows the mandatory 

spending, what’s accounted for only a small fraction of the budget, 

today had accounted for nearly two-thirds of all Federal spending, 

and is expected to grow even more.

The one-third is where we have the discretionary spending, and 

that’s where a lot of the debate is in the media, and they talk about 

Congress’ spending, it’s all in discretionary spending. It’s not in the 

majority of the budget, which is the two-thirds that you see growing there at a tremendous rate. 

To put this in perspective, the chart shows that outstanding Government promises is larger than the total net worth of every citizen, and then all taxes that are collected in U.S. history.


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With entitlement programs already consuming the majority of 

the budget, the Senate bill would make millions more eligible for 

benefit programs in the next 10 years. This chart shows the increase in the number of Medicaid beneficiaries alone.


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Then the next chart shows what happens with new Social Security beneficiaries in each year, and then the chart showing up now 

shows more on what we see as far as Medicare growth in beneficiaries.


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Now, these are all charts and figures that have been put together 

by the Congressional Budget Office. The Congressional Budget Office is a nonpartisan agency that serves Members of Congress, giving them budget information that they need to make decisions regarding the Nation’s budget. 

The next chart that we have up here, as you can tell, put all 

these programs together, and we see an alarming growth in programs over the next 10 years, before millions more will be legalized 

after the 10 years.


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The testimony that we’ll be receiving today, I think it’s worth 

mentioning, that the CBO expert that will be testifying carries the 

first 10 years, and then we will be hearing testimony from the Heritage Foundation, which will go beyond the 10-year period. 

And that is important as far as the Senate legislation is concerned, because it begins to take different action after the 10-year 

period that would have an impact on your budget. 

These staggering statistics exacerbate the need to take an especially close look at proposed changes to our immigration policy that 

have the potential to increase the population by millions and increase spending by hundreds of billions of dollars. 

This month, the Department of Homeland Security reported that 

11 million illegal immigrants lived in the United States at the beginning of this year. 

Significantly, the Department of Homeland Security reports that 

the number has grown by nearly a half million people each year 

since the beginning of this century. 

This number tells me that our first priority should be to secure 

the border. Without properly securing our borders, we remain vulVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00272 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH

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nerable not only to illegal immigration, but also to those who wish 

to harm America, such as criminals, drug traffickers or terrorists. 

The House and, earlier this year, the Senate both passed immigration bills purporting to address the immigration population. The 

cost of implementing each, as calculated by the Congressional 

Budget Office, is shown here on this chart.

The House-passed bill focuses on securing the border. The Senate 

bill, while addressing border security, also grants citizenship to 

millions of illegal aliens who already are here and untold millions 

more who have yet to enter the country. 

The Congressional Budget Office estimates that 24 million people 

will obtain legal status under the Senate bill in just the next two 

decades. 

Scholars, such as Mr. Robert Rector, who we will hear from 

today, believe that number is vastly understated and is actually 

closer to 60 million. 

My colleagues and fellow members of the Committee, notably Jeff 

Sessions, earlier this year released an impact analysis showing a 


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potential increase of 217 million immigrants, or 66 percent of today’s population over the same period. 

Make no mistake about it, legal immigration can be a good thing. 

As I said earlier, America is a nation built on the spirit and hard 

work of immigrants. Recognizing that truth, last year America invited more than one million new permanent immigrants—far more 

than any other country. 

Because America is admired the world over as the land of opportunity, an untold number of the world’s six billion people want to 

come to the United States in pursuit of that opportunity—and understandably so. Because we cannot possibly accommodate them 

all, we are forced to make tough choices. It is imperative that we 

make those decisions well informed ones. 

Today is a unique opportunity to hear from experts in the field 

as well as State and local officials who are on the front lines of immigration policy. 

We will hear from two panels today. The first panel is compromised of our own Governor Owens, Paul Cullinan of the Congressional Budget Office, and Robert Rector, of the highly respected 

Heritage Foundation. 

Sitting on our second panel are Mayor Ed Tauer, Dan Rubinstein 

of the Mesa County Meth Task Force, Helen Krieble of the Krieble 

Foundation, Paula Presley of the El Paso County Sheriff’s Office, 

Tony Gagliardi of the National Federation of Independent Business, and Ken Buck, Weld County District Attorney. 

Before we begin with our panels, I would like to take a moment 

to thank each of the groups and concerned citizens that contacted 

my office with an interest in this hearing. The overwhelming outpouring of interest demonstrates just how important this issue is 

to Coloradans. 

Because we could not accommodate everyone at the witness 

table, I am inviting people in the audience to submit written statements, which I will bring with me back to Washington. 

Thank you again for coming. 

With that, I’d like to welcome our first panel. Governor Owens, 

thank you for your time today and your leadership on this issue. 

I’d like to begin with you, Governor. 

STATEMENT OF GOVERNOR BILL OWENS, GOVERNOR, STATE 

OF COLORADO 

GOVERNOR OWENS. Mr. Chairman, thank you very much. And 

Senator, I appreciate this opportunity to represent the State in 

terms of this discussion. I particularly appreciate—it’s good to see 

you again. Senator Allard and I served together. 

I am not a rookie at appearing before the Senator. When he was 

Chairman of Senate State Affairs in the State Senate, I appeared 

before you a number of times, so it’s good to be with you again, 

Senator. 

You know, thank you for holding this Field Hearing on a very 

important subject. I believe that the purpose of this hearing, which 

is to better, perhaps, refine the costs associated with illegal immigration, it’s a very important purpose. And, again, I appreciate the 

invitation to testify. 

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I have with me today a number of the members from my Cabinet 

who are most involved in this issue. 

I’d like to particularly recognize Marva Livingston Hammons, 

who is Executive Director of the Department of Human Services. 

Also, Steve Toole, who is Executive Director of the Department 

of Health Care Policy and Finance, as well as Michael Cooke, who 

is Executive Director of our Department of Revenue. 

While many of our departments are involved with and impacted 

on the issue of immigration, these three professionals are perhaps 

those who are most in the front lines. 

You know, as we’ve learned here, Senator, in Colorado, while 

there are very real costs associated with illegal immigration, it’s 

very difficult for a number of reasons to specifically quantify these 

costs. 

I think efforts such as this hearing will help all of us identify 

better and understand the fiscal impacts of the challenges that we 

face, not only at the State level, but also at the Federal level. 

It is clear that State and local governments do incur significant 

costs related to illegal immigration, often due to Federal mandates, 

often due to Federal law that requires that certain things be provided or, in fact, prohibit us from making sure that these services 

are only given to people who are here illegally. 

There are obviously significant costs associated with education. 

In Colorado, as you remember from your legislative days, about 42 

cents out of every State general fund dollar goes to K–12 education. 

And many of the students in our classrooms are here as a result 

of illegal immigration. 

We’re not allowed to ask the questions regarding whether they’re 

here illegally or whether their parents are, but we know from a 

number of sources that there are, in fact, and as a humane State, 

that we provide education. We know that there are large numbers 

of students who are educated in Colorado who are here either illegally themself or were born to moms and dads who themselves are 

here illegally. 

The Federation for American Immigration Reform recently estimated in Colorado that the cost of educating students here illegally 

in 2004 was $235 million. That’s an annual figure, almost a quarter of a billion dollars for students who are here illegally. 

FAIR further estimates that the cost to educate the U.S.-born 

children of illegal immigrants, and these are the children who are 

citizens themselves but their parents were here illegally, was $329 

million. 

Well, that means that the sum of those two numbers, it’s about 

a half a billion dollars by FAIR’s estimate that we spend annually 

in the State of Colorado to educate children who are here illegally 

or children of parents who are here illegally. 

The concern is that while we may have 250,000 persons here illegally today, that number has been extrapolating -expanding quickly. We aren’t able to precisely put a number to how much each 

year, but as you mentioned, U.S. estimates are a half million more 

per year every year since 2000 nationally. Colorado is about 1 percent of the national population, so you can see that it’s a significant 

number here in Colorado. 

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Another area in which we can very precisely quantify the costs, 

involves the Corrections Department, Public Safety. We’re able to 

identify the impact to our State Correctional System for housing 

those who are here illegally who are convicted of crimes and who 

are, in fact, put in our Corrections System. 

In Colorado prisons today, we have about 950 persons in our system who are here illegally and who, upon release, will be detained 

by Federal authorities for likely deportation. 

At a cost of about $27,000 per prisoner, the annual cost to taxpayers to house these offenders is more than $25 million. 

Another example involves Medicaid. Half of all Medicaid costs 

are paid for by the State, another half are paid for by the Federal 

Government. 

A report prepared in Colorado by our legislature’s Joint Budget 

Committee, found that 41 percent of all Medicaid births in Colorado are to non-citizens. Forty-one percent of the children born 

with the assistance of Medicaid, paid for by Medicaid, are born to 

non-citizens. Those individuals could be here legally or illegally, 

but they are not U.S. citizens; most of them are actually here illegally. 

That equates to about 8,500 births annually at a cost of about 

$3,500 per birth that the taxpayers of Colorado are paying, just in 

terms of Medicaid births. That comes to about $30 million a year 

we’re paying for these more than 8,500 babies who we do pay for 

in terms of Medicaid. These are real numbers and they’re real costs 

to taxpayers. Illegal immigration is one of the driving forces involved in these costs, and this cost is, again, increasing. 

There are some that think that 250,000 persons in a State the 

size of Colorado isn’t a real problem. Well, if 250,000 persons here 

illegally isn’t yet a problem, is half a million? Is three-quarters of 

a million? Because right now, what we’re seeing is these numbers 

increasing, we believe, significantly on an annual basis. 

The Pew Hispanic Center estimates that a quarter of a million 

illegal immigrants are already here in Colorado. Colorado is fifth 

in the Nation out of the 50 States in terms of the number of persons here illegally on a per capita basis. 

Only four States: California, Nevada, Arizona, and Texas, have 

a higher percentage of illegal immigrants impacting their State and 

local services. 

At this point, I believe it’s important for me to emphasize that 

I’m not advocating that we stop providing services such as emergency health care. I have often said that we have to approach this 

issue of illegal immigration in a humane and caring manner, and 

as you said earlier, we are a nation of immigrants, but we’re also 

a nation of laws and the challenge we face is how to square those 

two concepts. 

But my point is, that the most effective way to lower the costs 

associated with illegal immigration is to decrease the number of 

those coming across our borders illegally. 

What we need to do is slow that rate of growth and to finally 

slow the number of persons who are illegally coming across the borders of the United States. 

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Just as Congress has been wrestling with this issue, so are the 

States. At our recent Special Session of the Legislature, I believe 

we’ve made some significant progress. 

I was particularly pleased by the passage of House bill 1023, considered to be the toughest law dealing with illegal immigration 

passed anywhere in the country to-date. 

House bill 1023, which took effect August 1st, provides that State 

and local governments shall not provide public benefits to those individuals 18 years of age or older who are here illegally. This includes grants, welfare, housing, and unemployment. 

The key to our new law is the verification process. Before an individual receives any of these public benefits, they must prove their 

citizenship through a three-step process. 

First, to produce secure photo identification; second, complete 

and sign an affidavit which, under penalty of law, if they sign that 

affidavit, under many cases, if they sign it and it’s not correct, they 

can be deported; and third, if the applicant is not a U.S. citizen, 

the individual’s immigration documents must be confirmed through 

the Federal SAVE program. 

This process, we believe, will help ensure that only individuals 

lawfully present in the United States receive public benefits. 

One of the tasks mandated by House bill 1023 was the development of a temporary waiver process, effective until this coming 

March. Under this process, individuals who are here lawfully and 

entitled to benefits, but who do not have one of those required 

forms of identification, won’t fall through the cracks. 

Michael Cooke, the Executive Director of the Department of Revenue, was charged with developing and implementing the emergency rules for this waiver process. She has done an outstanding 

job. She has been closely tracking the implementation of this process, and has provided me with the following data. 

This information was compiled during the first 4 weeks that 

House bill 1023 has been in effect. 

So far, 71 waivers have been processed by the Department of 

Revenue. These individuals couldn’t produce one of the required 

forms of identification, but through Departmental research, we believe they are here illegally. 

However, the Department has also found 125 cases in which the 

applicants appeared to be using fraudulent forms of identification. 

We’ve referred these 125 cases to the Bureau of Citizenship and 

Immigration Services for further investigation. 

But perhaps most interesting is this statistic: Thus far, we’ve 

had more than 1,600 applicants who have been able to provide any 

valid form of verifiable identification, and the Department of Revenue has been unable to determine their status. 

We have asked these 1,600 individuals to return to the Department and provide us the additional information that we require to 

prove that they’re citizens. However, thus far, they have not. 

Director Cooke believes that most of these individuals simply 

were trying to take a chance to see if they could get through our 

system and get the Federal benefits. We don’t believe that most of 

these individuals are, in fact, citizens and this is a significant step. 

She also notes that the Revenue Department has seen a high 

number of questionable birth certificates. So many, in fact, that the 

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Department’s emergency rules had to be amended to no longer 

allow birth certificates as an acceptable form of identification for 

benefit agencies. 

In the first 3 weeks the 1023 was in effect, we found more than 

150 seemingly fraudulent birth certificates presented to the Department in an effort to obtain a State identification card. 

I believe this should raise a serious question, both at the State 

level as well as at the Federal level, about accepting birth certificates alone as a way to verify a person’s identity. 

Over the last few years, many States have seen birth certificates 

stolen. We’ve seen the theft of blank paper birth certificates, and 

we’re now seeing some of these going through the process in a way 

to get Federal benefits, because they’re filled out, they’re sold and 

re-sold, and then presented to a State like Colorado trying to get 

State and Federal benefits. 

We’ve seen one particular county in Texas where we now check 

those birth certificates very carefully, because we’ve seen so many 

fraudulent certificates from this one county. We’ve seen the same 

thing happen from Puerto Rico. 

Since the passage of 1023, we’ve experienced an exponential 

growth in the presentation of these counterfeit documents. This is 

something, Mr. Chairman, that I hope the Committee would carefully consider, especially since under the Deficit Reduction Act of 

2005, a birth certificate is one of the federally approved forms of 

identification that may be used to apply for or renew Medicaid benefits. 

So, if you have a birth certificate, you can apply for Medicaid or 

you can renew Medicaid. We believe that birth certificates are not 

by themselves a verifiable, and should not be a verifiable, form of 

identification. 

Interestingly enough, we also have seen the same problem with 

Federal passports. We found passport holders who have two passports in two different names. It’s because the Department of State 

does not require proof of a legal name change in order to get a second passport in a different name. 

Even if an applicant cannot provide documented evidence of identity, a passport will still be issued based upon a signed affidavit 

from an identifying witness who is a U.S. citizen and who has 

known the applicant for at least 2 years. 

So I believe, in fact, the Federal Government should tighten up 

its own rules to help us at the State level enforce these Federal requirements. 

Also, a Federal law, the Deficit Reduction Act, is hampering our 

enforcement of House bill 1023. The Deficit Reduction Act actually 

prohibits States from imposing their own identification requirements in order to obtain Medicaid benefits, and the list of allowable 

federally accepted forms of identification is far more expansive 

than we have in Colorado. 

So at the Federal level, you’re far more expansive in terms of the 

identification that you take compared to what the State of Colorado 

now takes. 

As I mentioned, the list includes birth certificates and passports, 

and yet we can’t narrow that list, based on our experience, with the 

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fraudulent passports we’re seeing at the Federal level, the fraudulent birth certificates that we’re seeing from around the country. 

The same problem exists involving food stamps. Federal law requires that the identity of the applicant must be verified, but it 

also says, and I quote, that ‘‘no requirement may be imposed for 

a specific type of identification document.’’ So a State can’t say that 

you have to have a driver’s license or a birth certificate or anything 

specific, because the Federal Government says that ‘‘no requirement may be imposed.’’

This is actually a recipe for fraud in food stamps; it’s one I’d ask 

that you look at in terms of changing Federal law. 

States should have the right to require specific forms of identification for these programs, and I would ask you, Senator, to consider helping us provide that flexibility and hope that this Committee will take the lead in proposing these changes. 

State and Federal agencies have a duty to develop identification 

verification programs that are consistent, and if a weak link exists 

it’s going to be exploited by those who want to perpetuate fraud. 

You know, the technology does exist to make all of our documents secure and verifiable. In Colorado, we know this first-hand. 

The Colorado driver’s license today is recognized as one of the three 

most secure driver’s licenses out of the 50 States in the country, 

according to a recent study done by George Washington University. 

Our driver’s license features a ghost image of a photograph, we 

process it through a facial recognition system, and, Senator, what 

this means is if you go into one area and get a driver’s license, 

come back 6 months later in a different office and try and get a 

driver’s license, we put you against our data base, facially recognized data base of points, high probability you won’t be able to get 

that second driver’s license based only on the photo we take of you 

where we measure hundreds of points around a face to make sure 

that you’re not able to come in and get that second driver’s license 

using a false name. 

In addition, we require the birth certificates and all of those 

other documents. So, it is possible, and I would encourage the Federal Government to tighten its standards. And I know how concerned you are about this issue. 

Finally, the Federation of Americans for Immigration Reform has 

urged other States to follow Colorado’s lead in terms of passing a 

bill similar to House bill 1023. 

In a letter I received from FAIR shortly after we passed 1023, 

it States that this ‘‘legislation is significantly stronger than any 

passed anywhere else in the country to-date,’’ and it said, and I 

again quote, ‘‘this is a much needed enhancement of the State’s 

role in ensuring that illegal aliens do not continue to drain taxpayer coffers.’’

I appreciate again, Senator, your holding this hearing in Colorado. I know you have a number of other distinguished panelists 

you’re going to be hearing from. 

Later this afternoon, you’re going to be hearing from Helen 

Krieble, who is going to address an issue that I have some background in, in terms of a Colorado-based plan to not only secure our 

borders, but also provide after-background checks, a way for people 

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to work here legally for jobs for which there are not Americans 

willing to work. 

I would particularly ask you to pay attention to our friend Helen 

Krieble’s testimony. 

And the problems associated with illegal immigration, I believe, 

are fixable. But finding and enacting the solution will require a 

partnership between the Federal Government and the States. 

Meetings such as this will help us forge that partnership. 

Senator Allard, thank you very much for your courtesy in hearing from me this afternoon. 

[The prepared statement of Governor Owens follows:]


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The red light that has now been pulled off the podium, the green 

light indicates, and then when the red light starts flashing, you’re 

past 10 minutes. 

So, Mr. Paul Cullinan, who is with the Congressional Budget Office, you specialize in human resource cost estimates, and we’re 

anxious to hear from you, Paul. 

STATEMENT OF PAUL CULLINAN, CHIEF OF HUMAN RESOURCES COST ESTIMATES, CONGRESSIONAL BUDGET OFFICE 

Mr. Cullinan. Thank you, Mr. Chairman, thank you for this opportunity to be before your Committee to discuss the budgetary and 

economic implications of immigration and border security policies. 

I ’ll try to summarize my remarks fairly quickly. The major 

points I’d like to make are that immigration reform and border enforcement can have significant effects on Federal revenues and 

spending. 

For example, the Congressional Budget Office just recently estimated the Senate-passed immigration bill, S. 2611, and determined 


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that Federal mandatory spending would rise by roughly $48 billion 

over the next 10 years, and revenues, assuming a technical change 

in the language, would climb by about $44 billion. 

In addition, the bill authorizes $81 billion in additional spending 

that will subsequently go before the Appropriations Committees for 

their approval. 

Changes in immigration policy can have significant or measurable effects on labor markets and the economy. In CBO’s estimation, the immigration bills that have been before the Congress 

this year could affect economic growth, but most of those effects 

would be relatively small. 

A rise in immigration can improve Social Security finances, depending on what the mix of immigrants is. But, again, the Social 

Security financing shortfall is much larger than what can be resolved through an increase in immigration at the levels that are 

foreseen in the recent legislation. 

And, tightening border security and enhancing workplace compliance with immigration and labor laws will require future Congresses to devote significantly larger amounts of resources to those 

activities. 

My written testimony has a brief description of some of the major 

aspects of the bills. I’ll pass over that. 

The effects of immigration policies on the Federal budget are 

really quite complicated and uncertain, and as a result, difficult to 

estimate. 

The uncertainties surround a number of factors: One, data on the 

immigrant population, particularly the illegal immigrant population, are very difficult to arrive at. Much of that is done through 

statistical imputations or matching, and we don’t have information 

directly as we would from administrative records on many of those 

individuals. 

Second, many of the behaviors we have to evaluate are difficult 

to predict in advance, either for the immigrants and workers themselves, or for the employers. 

For example, how will employers respond to the proposed guest 

worker program in the Senate bill? 

That largely follows on to my next issue: the way the administrative structures and enforcement procedures are developed is critically important to what the ultimate budgetary outcomes are going 

to be for these changes in policy. 

CBO’s review of the literature indicates that, in general, immigration tends to result in favorable outcomes at the Federal level 

but unfavorable outcomes at the State and local levels. 

That’s largely because these individuals tend to have lower 

wages than the native-born population and tend to have more children. Thus, they end up receiving more in Federal benefits typically, or State and local benefits and services, than native-born individuals, and their lower wages tend to mean that they will pay 

fewer taxes. 

Over time, the addition of their children to the work force may 

or may not offset some of these additional costs at the front-end. 

It depends, again, on the actual characteristics of the immigrant 

population. 

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The Joint Committee on Taxation (JCT) and the Congressional 

Budget Office recently estimated the Senate bill. The direct spending, that is, for things that would happen without further legislative action as a result of the bill, again, was $48 billion over 10 

years. 

More than half of those costs came from refundable tax credits, 

which are estimates provided by the Joint Committee. 

If the Act was amended to fulfill its intent, at least as far as the 

Judiciary Committee Staff indicated to us, it would also raise revenues by $44 billion over the period. There is a glitch in the language, at least in terms of JCT’s evaluation. 

And, again, there are even more costs to be appropriated, assuming the bill is enacted and the Congress comes forward and actually appropriates those moneys. 

As you pointed out in your opening remarks, the CBO and JCT 

estimates have two potentially major limitations for issues such as 

immigration reform. 

First, they are 10-year estimates. That is the structure under 

which we have been estimating all of the legislation before the 

Congress for the last decade or so. 

Immigration’s effects are going to be felt for decades to come, so 

it’s very important to have some assessment of the longer view of 

things. 

The second thing is that we are assessing what this piece of legislation does, and that is limited to the direct effects on Medicaid, 

food stamps, the refundable tax credits, and other mandatory programs. 

The reason I point that out is that the larger number of immigrants could very easily encourage the Congress and State legislatures to have to put more resources on the table than currently are 

provided under statute. 

For instance, in the Medicaid program, benefits for the uninsured 

are largely paid out of disproportionate share payments, and those 

are very close to their caps. Therefore, Congress would have to 

come in and raise those caps if it was to provide more funding for 

those activities. 

As I mentioned before, immigration policy can have an effect on 

Social Security. CBO and the Social Security Administration model 

these changes. In general, a level increase in immigration tends to 

be favorable for the system. 

The Social Security Administration estimates that about oneeighth of the shortfall in the program would be eliminated by an 

increase of 400,000 in net immigration. 

It also estimated S. 2611, and it shows about half as large an effect for that bill. But, again, these are very sensitive estimates; the 

mix of immigrants according to their age, education, earnings capacities, family characteristics, will make a difference. 

One other aspect of the immigration policies we see before us is, 

at least in the Senate, a path for a legalization of those who are 

currently here and undocumented. 

Many of those people already pay Social Security taxes, but they 

have paid them on Social Security records that can’t be linked to 

them, in essence, and therefore, if they were to become legalized, 

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we would not get as much revenue off of those new, legal employees as we would from a new immigrant, per se. 

We’re already getting a sizable fraction of those revenues, so the 

legalization for those individuals, from a Social Security standpoint, would not be favorable. 

With regard to macroeconomic effects, and I’ll just summarize 

very quickly, an increase in the labor force, we’re assuming about 

two and a half million additional workers under the Senate bill—

would raise revenues according to the Joint Committee and, in fact, 

if we followed through with a more robust analysis, it would have 

an even larger effect on the economy, and therefore on revenues, 

as well. 

Finally, on border security and workplace compliance, one of the 

issues that I think we need to keep in mind is that nearly half of 

the people who are here illegally came via a legal mechanism and 

basically overstayed their visa. Border security by itself may only 

be addressing those who are coming here illegally, not those who 

come legally but stay beyond the expiration of their visa. 

Another aspect is that border security might have the inadvertent effect of actually encouraging people who are here illegally 

to stay. If it’s harder for them to get back into this country, then 

they may decide that they won’t leave at all. In particular, with regard to Mexico, there has been a significant amount of return migration, cycling in, cycling out. 

The other aspect is that enforcement through the employment 

verifications may be a very significant factor in this. If illegal workers can’t find employers to hire them because of much more stringent employment verification, then their reason for coming and 

their reason for staying would be diminished. 

So I’ll be happy to answer any questions you may have. 

[The prepared statement of Mr. Cullinan follows:]

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Senator ALLARD. Thank you very much. Next we have on the 

panel Robert Rector, a Senior Research Fellow with the Heritage 

Foundation. Welcome, Robert. 

STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH 

FELLOW, THE HERITAGE FOUNDATION 

Mr. Rector. Thank you. Thank you for having me here. 

I ’m going to speak today about the fiscal costs of low skill immigration with specific reference to the Senate-passed immigration 

bill S–2611. 

To kind of put the whole thing into perspective, we need to understand that over the last 20 years or so, the United States has 

imported some 11 million high school drop-outs from foreign countries, and that an addition of 11 million high school drop-outs from 

abroad basically has the same sort of fiscal, social, and economic 

effect that you would have if you added 11 million high school 

drop-outs born, say, in Kentucky. There’s no difference. 

And if we want to argue that this is, in fact, been a good thing, 

I often sort of jokingly say, ‘‘Well, if this is such a good thing, why 


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don’t we encourage native-born Americans to drop out of high 

school and then we’ll have all of these positive fiscal effects?’’

The simple reality is that the addition of 11 million high school 

drop-outs has an enormous effect in increasing poverty in the 

United States and increasing Government spending, and this is not 

offset by taxes because these people earn so little that they pay relatively little in Federal, State, and local taxes. 

Specifically, the Senate-passed bill S–2611 would grant amnesty 

and citizenship to some 10 million illegal aliens, 50 to 60 percent 

of whom lack a high school degree. 

We expect that a full quarter of those 10 million amnesties that 

are given, would be fraudulent, just as they were 20 years ago with 

the Simpson-Mazzoli bill. 

The net fiscal cost of this, once you grant citizenship, they become eligible for a much wider array of Government services and 

benefits, and the net fiscal impact of that would be a cost of around 

$20 billion a year from the amnesty alone. 

In addition, now, those don’t show up right away, because they 

don’t become citizens until about 11 years after the passage of the 

bill, but the long-term costs are what is really important. They’re 

very quite substantial. 

In addition, once these illegals are given amnesty and they become citizens, they have the right to bring their parents in from 

abroad, and the parents, after a period of time, also become eligible 

for Federal welfare benefits. 

So potentially, if you give amnesty to 10 million people, that’s potentially 20 million poor grandparents that could be brought in, 

most of whom could be eligible for Medicaid. Medicaid for the elderly costs about $10,000 per person per year, 

so if even three million out of those 20 million potentially eligible 

parents came here, got onto Medicaid, you’d be talking about costs 

in the out years of perhaps $30 billion a year. 

In addition, the bill has a now trimmed down, but still fairly substantial, guest worker program, which would bring in more low 

skill workers and their dependents, possibly about eight million of 

those over 20 years, and the cost of those individuals, based on assuming that they would pay the same in taxes and receive the 

same in benefits as native-born individuals with the same education and skill levels, cost is about $20 billion a year. 

Now, if I could just in general talk about the overall effects of 

immigration, I have a chart up here that shows that currently in 

the United States, immigrants and their children comprise about 

one out of four poor people in the U.S. 

And the reason for that is that of these immigrant households, 

close to one-third of them are headed by individuals that do not 

have a high school degree, and this is a recipe, as among the native-born, for poverty. 

And you can compare this to the native-born households. We’re 

only about 11 percent of them are headed by people that don’t have 

a high school degree. 

In the past, immigrants coming into the United States actually 

had education and skill levels better than the native-born population, but we’ve very much abandoned that trend in the last two 

decades or so. 

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So if we could go forward here. Now we’re looking at poor children. 

Again, of all of the poor children in the United States, about a 

quarter of them are children in immigrant families, and we have 

the same thing here among these immigrant children, close to 40 

percent of them reside in homes where the immigrant parent does 

not have a high school degree. 

Now, if we could just move forward here kind of quickly, a very 

important study of this; in fact, the most thorough study of the cost 

of immigration was done by the National Academy of Sciences. And 

what they found was that over the lifetime, the net fiscal cost of 

an immigrant without a high school degree, this would be their 

Government benefits minus all taxes paid in over the course of a 

lifetime, each of those immigrants costs the U.S. taxpayer around 

$89,000. 

And this is an underestimate, because it does not include the 

costs of educating their children, which would also be totally paid 

for under this analysis, by the U.S. taxpayer. If you put in the cost 

of educating the children, it’s roughly double that. 

So let’s see what the implications of that would be, that if we 

have a cost of $89,000 per high school drop-out immigrant, and we 

have close to 11 million of these immigrants which we’ve brought 

into the country over the last 20 years, the total cost of this over 

the lifetime of these immigrants is going to be close to $1 trillion. 

If you add in the costs of educating their children, it will be closer to $2 trillion; all of this cost borne directly by the hard-pressed 

American taxpayers. 

The simple fact of the matter is that these individuals absorb 

Government services, they receive welfare and other benefits, and 

they pay very little in taxes, because that’s the nature of our system. 

We have a very generous system to support low-skill, nativeborn, Americans because we’re a generous society. What we’re really confronting here is whether we can afford that similar level of 

generosity for large numbers of millions and millions of people coming here from the Third World. And the simple answer is, ‘‘No, of 

course we cannot.’’

This is a recipe for fiscal disaster, and in fact, these costs, if S–

2611 were passed, the costs will begin to pile in at precisely the 

point at which the Social Security system starts to significantly get 

into financial trouble. 

Now, if I could just briefly focus a little bit on some specific costs 

to show how these costs accumulate and why some estimates of the 

costs of immigration, low-skill immigration, are very low. 

The total cost of means-tested welfare spending in the United 

States, Federal and State; this would be Medicaid, food stamps, 

public housing, EITC, et cetera, is $583 billion last year. 

Now, if we just perform a simple calculation, the whole population of the United States is around 300 million people, so let’s divide the $583 by roughly 300 million people, and we get a total per 

capita welfare cost in the United States of around $2,000 per person. 

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Now, that’s an arbitrary number, because it includes everyone in 

this room and most people don’t get this welfare spending, which 

is targeted on the poor and the near-poor. 

But it’s a good benchmark to try to estimate what, in fact, the 

cost would be of giving citizenship or bringing in large numbers of 

low-skill immigrants who are going to have significantly higher per 

capita welfare costs. 

Now, this takes that same number, but here we’ve divided it out 

based on the education level of the head of the household, be it an 

immigrant or a non-immigrant household. 

And if we look at high school drop-outs, and bear in mind that 

half of the illegals are high school drop-outs, a third of all immigrants are high school drop-outs, the per capita cost here is around 

$4,400 per family member per year within those households. 

And if we were to move forward here, again, now if we look at 

the education distribution of current illegals in the United States 

and apply these normal welfare costs which accrue according to 

educational levels, we would find that once the illegal immigrants 

are given amnesty and they achieve full citizenship, which they 

would under S–2611, the total cost per family member, not per immigrant, but the total cost per family member, would be around 

$3,000 per year, so around $12,000 for a family of four. 

Now, the CBO estimates are coming in at almost one-tenth that, 

at around $400 per year. They’re just way, way lower than the actual fiscal outlays under the welfare system. In fact, at $400 per 

year, that’s a welfare per capita cost that’s less than that of college 

educated Americans. 

And part of the reason for this is that CBO is forced to limit its 

analysis to the first 10 years of the bill, when most of the illegal 

immigrants who would get amnesty wouldn’t qualify for a lot of 

these benefits. 

But these benefits begin to come piling in in the later years of 

the bill. 

So the reality is that the actual cost of low-skill immigrants are 

much larger than anyone anticipates. 

The National Academy of Sciences is very clear that immigration 

and the fiscal and economic impacts of immigration depend completely on the skill level of the immigrants that you’re bringing in. 

If you bring in immigrants with a college education, they will pay 

substantially more in taxes than they will take out in Government 

services. 

However, in the last 20 years or 30 years, we have gone in exactly the opposite direction and focused on bringing in very lowskill immigrants. They pay very little in taxes, and will absorb 

large amounts of Government services. 

The Senate Immigration bill sort of solidifies that process by 

granting citizenship to most of the illegals that are currently here, 

and then creating a process where even more low-skill immigrants 

would be brought in in the future. 

I would say that if you looked across the globe, you would find 

probably a billion people who would love to come and live in the 

United States and live in our society, and we can’t obviously let all 

of those people in. 

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What that does mean, is that we can be very selective in terms 

of the people that we do and do not admit into the United States. 

And I would say given the enormous pressures already on the 

taxpayers of the U.S., given the enormous deficits that we see in 

the future of Government spending, we should have a very clear 

policy that those people which we select, the small number that are 

given the opportunity to come to the United States, should be people that are a net benefit to the U.S. taxpayer, rather than those 

that will impose a net cost on the taxpayer. 

Unfortunately, our current immigration system is working in the 

opposite direction, and the Senate bill will make it much worse. 

Thank you. 

[The prepared statement of Mr. Rector follows:]


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Senator ALLARD. Thank you both for your testimony. 

Governor, you’ve made a lot of suggestions here to the Congress 

and to this Committee as to what could be done to help deal with 

the problem of illegal immigrants. 

What is the perhaps most single important thing we could do to 

stop the problem from getting worse here in the State of Colorado? 

Governor Owens. Mr. Chairman, thank you. On specific bases, 

what you could do is give us more power to set standards in terms 

of identification, in terms of making sure that current Federal law, 

which says that benefits can only go to citizens, that we can actually help implement that law. 

Right now, our hands are tied because while Federal law says 

that these programs are only for citizens, Federal law doesn’t allow 

us to actually ask the questions to ascertain whether somebody is, 

in fact, a citizen. 

Obviously, on a macro level there is the question of doing a better job to make sure that people can’t literally walk into the United 

States at will, while at the same time making sure that we have 

procedures in place to allow us to have those people, as Mr. Rector 


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suggested and others have, who, in fact, benefit our country, benefit our economy, add in fact value to this country, that we have 

a system to allow them to come in legally. 

So that’s the conundrum, and if you don’t do a better job at the 

border, nothing we do in terms of reforming the visa system or the 

programs that allow us to have people move to this country legally 

will work, because people will still walk around that program by 

coming across, you know, any of our borders on foot. 

Senator Allard. Would you agree with Mr. Cullinan’s comments 

that the Federal Government, as far as illegal immigrants coming 

in, is affected in a different way than what State and local governments are? 

Governor Owens. Senator, I did hear Mr. Cullinan say that, and 

noted it, that there is a different cost at the Federal level for illegal 

immigration than at the State and local level, and we actually do 

pay, in some ways, the bills are paid here in terms of K–12 education. 

Again, there’s a Federal law that says that children shall be educated, and that’s the humane and civil way to run a society. 

However, we have some urban districts in this State where estimates from within the district, from the district itself, are that 

about a third of its children are either here illegally or, in fact, 

their parents are. 

That’s a significant cost to State and local taxpayers, as are the 

other costs that I discussed earlier in my testimony. 

So, yes, there is a significant cost. I think that Mr. Rector and 

Mr. Cullinan have also pointed out that sometimes, in fact, there’s 

tax income, as well, though I concur with what I believe their position was, that many times it’s not equal to the costs. 

Senator Allard. Mr. Cullinan, you are directed by the Congress 

under your Congressional Budget Office guidelines to estimate 

budgets out for 10 years, is that correct? 

Mr. Cullinan. That’s correct. 

Senator Allard. And, now, under the bill that we passed out of 

the Senate, the first year that somebody here illegally could be 

granted citizenship would be how far down? 

Mr. Cullinan. Let’s see, I believe it’s the 11th year or thereabouts. 

Senator Allard. The 11th year. 

Mr. Cullinan. So they are basically outside of the window. The 

costs for those—that class of immigrant that’s in the Senate bill is 

largely attributable to additional citizen children of those illegal 

immigrants. 

Senator Allard. So and then when they become full-fledged citizens, then they qualify for these benefits, and as a result of that, 

do you believe that your figures beyond 10 years underestimate the 

costs of these programs? 

Mr. Cullinan. If we were to go beyond 10 years, definitely the 

costs would escalate. 

But I do want to point out that not everyone would choose the 

citizenship route, as well. It appears as if a significant portion of 

those who were legalized back in the Immigration Reform and Control Act (IRCA) period did not, in fact, pass through to citizenship. 

329

Senator Allard. So do you think a substantial number would not 

pursue citizenship, or just a few, or do you dare speculate on that? 

Mr. Cullinan. The experience with IRCA, I believe, is that fewer 

than half of those did so within the first 10 years of being able to 

naturalize. 

Senator Allard. OK. On your testimony, Mr. Rector, you had different figures than what the Joint Budget Committee, or the Congressional Budget Office testified to. What would you attribute that 

to? 

Mr. Rector. Well, just to clarify one point. For most welfare programs, you don’t have to be a citizen. You have to have been here 

as a resident for 5 years. It’s only Supplemental Security Income 

where you have to be a citizen. 

So they don’t have to be citizens, but they do have to have been 

legal permanent residents for 5 years. 

I would say the No. 1 difference would be that—well, that I’m estimating costs that are going to accrue about 15 years out. In fact, 

all of the costs in this bill come in the 11th year and afterward, 

and therefore, to have a budget analysis that’s restricted to the 

first 10 years, doesn’t tell you squat about the fiscal impact of this 

bill, OK? 

So, they become citizens in the 11th year or they become eligible 

for welfare, that’s when all of these things will start to pile on. 

Secondly, I’m using all of—there are over 80 Federal means-tested programs. I have them all in my model to produce these costs. 

CBO is using a much smaller number of programs. 

I also have the State and local. The State and local governments 

are required, I know you’re very happy, they’re required to contribute to all of these wonderful Federal welfare programs. I have 

those mandatory State costs in there, as well. 

Also, I don’t know how they estimated, I mean, you have to correct, as the National Academy of Sciences does, when you’re modeling this, you have to correct for the under-reporting that occurs 

in, for example, census data bases and so forth so that you get up 

to the real total spending, which if you don’t make that correction, 

you come out with way below what’s actually being spent. 

I think those are the major differences, but again, I think that 

we need to understand that if, for example, you take someone who 

is here legally, it’s a family of four. That type of family doesn’t pay 

any Federal Social Security taxes if they have incomes below 

$25,000 a year because they get the earned income tax credit and 

the refundable child credit that wipes out their entire Social Security contribution. 

A family typically in the U.S. doesn’t pay any Federal income 

tax, OK, if they make less than $40,000 a year. Meanwhile, we 

have this $583 billion dollar means-tested welfare system, it’s 5 

percent of the gross domestic product, essentially is taxed out of 

the upper-middle class and distributed in the form of cash, food, 

housing, free medical care, down to the lowest income one-third of 

the population. 

The problem with the Senate bill and with immigration, as it’s 

currently constructed, is we’re adding people to the low end of this 

equation who are by nature not taxpayers or they pay very little, 

but are very large recipients of this massive transfer system. 

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A lot of times, people say, ‘‘Oh, you know, well we used to have 

lots of immigration in the past, and that wasn’t so much of a problem.’’ I would emphasize that, again, immigrants in all previous 

historical periods, the immigrants have had skill levels at least 

equal to or superior to those of the natives. So they were raising 

the skill level in the population, not lowering it. 

But also, if you look at the peak of the late last great migration, 

say around 1900, we didn’t even have a Federal income tax let 

alone a massive Federal income tax that comes in each and every 

year that’s designed to take away from the upper end of the income 

spectrum and re-distribute massive resources into less affluent people. 

Again, there’s a reason that we do that, but there’s also a reason 

why, if you try to do that to an unlimited flow of people that are 

very poorly educated coming here from Guatemala or Mexico, that 

that would, in fact, be financially ruinous for the American taxpayer. 

Senator Allard. And back to you, Mr. Cullinan. Mr. Rector said 

he incorporated a greater number of means-tested programs than 

you do in your study. I don’t know whether you’ve looked at his 

study or not, but would you agree with that and why the difference? 

Mr. Cullinan. There are several elements of that. There is a set 

of programs which are not part of our analysis because they’re 

under the discretionary portion of the budget. That’s not the bulk, 

but there is a significant share—for instance, the housing assistance, WIC, a number of programs like that—that are funded annually out of appropriations and are not considered mandatory spending. 

Thus, the direct effects of the bill, to increase the number of potentially eligible for those programs, doesn’t directly affect the costs 

of those programs. 

However, it is in all likelihood that the Congress will come back 

and consider changing the levels of resources provided to those programs. When that happens, we will be attributing those costs to 

that bill, not to this bill. 

Senator Allard. Do you see any shortcomings in the formula that 

Mr. Rector used to estimate costs, just off the cuff? I don’t know 

how closely you’ve looked at his methodology. 

Mr. Cullinan. We’ve looked at it, and in fact, some of the material from the earlier estimates that he did along with his colleagues 

at Heritage. 

We did consider some of those things and modified some of our 

technical assumptions when we did the estimate for the Senatepassed bill. 

I haven’t really looked in great detail as to those programs that 

are in there and what are not. 

One thing I would point out, though, is that the bill has a major 

increase in the number of employment-based visas, as well, and 

takes some high-tech people or highly educated people out from underneath the numerical limits themselves. 

So, you’ve got some of the bill that’s going toward high-skill people, and two big pieces are going toward typically much lesser 

skilled people, the legalization aspect and the guest worker aspect. 

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Senator Allard. Would you agree, Mr. Rector, that your figures 

are much greater because you encompass more in your analysis 

than what Mr. Cullinan did? 

Mr. Rector. Yes, and also he does suffer under this handicap of 

being restricted to the first 10 years——

Senator Allard. Yes. 

Mr. Rector.—which we both agree is kind of meaningless, because all the fiscal impacts come later. 

Senator Allard. Which is the standard policy of the Senate, we 

treat all legislation the same, and you’ve got to draw the line somewhere. In this case, we drew 10 years, which tends to distort the 

figures a little bit because of that, yes. 

Mr. Rector. And that is particularly true for the two sets of the 

two groups I just mentioned, in that they are, in fact, have a longer 

lead time to get to the State at which they would be potentially eligible for benefits. 

It’s 11 years for the—at a minimum—for the legalization folks. 

It is a minimum of nine, I think, years for the guest workers, because they can’t apply for LPR status, Legal Permanent Resident 

status until after the fourth year. 

So both of those groups, the costs associated with those groups, 

are going to be beyond the 10-year window. 

Mr. Rector. As you’ve heard me say before, this is the way that 

the Government grows. You guys never go out and say, ‘‘Hey, tomorrow why don’t we spend $50 billion extra,’’ you know. 

We create Government growth by creating the conditions under 

which Government is going to grow in the deep out years, and 

that’s exactly what this bill does. 

It is, in fact, I’ve worked on welfare for 20 years, this is the largest expansion of the U.S. welfare system in the last 20 or 30 years. 

You’d have to go back to the creation of Medicaid to find an expansion that’s larger than this, although it doesn’t show up for the 

first 10 years. 

It is true also that the bill does largely un-acknowledge, permit 

increases in immigrants, highly skilled, college educated, immigrants. And there’s a general consensus that they are a fiscal positive; the taxes they will pay exceed the benefits. 

But, what I would say is if high skill immigrants are a positive 

and low skill immigrants are a strong negative, and we say, ‘‘OK, 

so that’s a good deal,’’ that’s sort of like a stock broker saying to 

you, ‘‘I’ve got two stocks: One’s going to make money, the other is 

going to lose money, why don’t you buy both of them?’’

I would say that’s not a really good idea, that what we ought to 

do is have an immigration policy that brings in people that, in fact, 

are not a net drag on the taxpayer and avoid those who are going 

to be a net drag on the taxpayer, and also avoid those who are 

going to impose additional social costs, such as increased crime. 

Senator Allard. I want to thank this panel for your testimony. 

You’ve been very helpful. 

What happens with the Committee is that we may submit questions to you after this hearing, and we would ask that you respond 

back within 10 days, if you would, please. We would appreciate 

that, and we’ll make it a part of the record. 

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And so I want to thank the panel. Mr. Governor, I want to thank 

you for being here. Paul, thank you, and Robert, thank you both 

for being here and coming to Colorado to share your expertise with 

us. 

The second panel we’ll now call up, and the make-up of the second panel will be Mr. Ed Tauer, Mayor of Aurora, Colorado; Mr. 

Dan Rubinstein, Chief Deputy District Attorney, Mesa County; Ms. 

Helen Krieble, President and Founder of the Vernon K. Krieble 

Foundation; Ms. Paula Presley, Commander in the El Paso County 

Sheriff’s Office; Tony Gagliardi, Colorado State Director of the National Federation of Independent Business; and Mr. Ken Buck, 

Weld County District Attorney. 

OK, we’ll now have the Committee come to order. 

I’d like to start with Mayor Tauer and at the very start thank 

you, Mayor, and the city of Aurora for allowing us to use this very 

fine facility and for providing the security and the comforts of home 

for those who have come here to testify. 

Mr. Tauer, we are limiting members on this panel to 5 minutes, 

and would ask that you summarize your testimony in 5 minutes. 

There will be a light on the podium right here in front of me, and 

when that turns red, then that’s an indication. It will turn yellow, 

indicating you’re getting close, and then red indicates you’re past 

5 minutes. 

Now, we’re not going to gavel you down, but we would ask you 

to be sensitive to that, and I might, in the context of things, politely remind you that your time is expiring. 

So, Mr. Tauer, you now are recognized. 

STATEMENT OF MAYOR ED TAUER, MAYOR, AURORA, 

COLORADO 

Mr. Tauer. Senator, I think we’ll have to treat those lights much 

as we do a photo red light in the city. Somebody is going to complain, but overall it ends up with a good result. 

First, Senator, we want to thank you for having this hearing 

today. 

We think that it’s really critical to the citizens of Colorado, and 

we hear literally every day from our citizens about concerns about 

illegal immigration, and we think it’s just a terrific thing that 

you’re coming here and that you can hear from local officials and 

State officials about the impact that this has on our communities. 

We recognize that there are a lot of impacts; some economic impacts, social impacts. And you’ve just heard from three people in 

the first panel who talked about what a lot of those impacts are. 

I’m going to limit our testimony to something much more specific, and that is trying to address some of the specific impacts on 

local government budgets. 

So we recognize that there are a lot of things that we won’t be 

talking about, but we think it’s important to include in the debate 

what is the impact of illegal immigration on our local communities. 

The first thing we want to talk about is something that you’ve 

already heard, which is that it’s very difficult to pinpoint what are 

the exact impacts of illegal immigration. 

As the Governor mentioned a little while ago, in our school districts, we’re specifically prohibited from asking the immigration 

333

status of students or their parents. The result of that is that you 

have to make assumptions when you try and assess costs. 

We have to do the same thing in our city. When we look at impacts of illegal immigration on our budget, we have to look at what 

does the Census Bureau tell us the general population of illegal immigrants is in Colorado, and then use that and extend that into 

Aurora to see what our impacts would be. 

So, the numbers that we’re going to talk to you about are our 

best reasonable estimates available. But the truth is that nobody 

can say specifically ‘‘here is the exact number’’ on either the cost 

or revenue side, and in the impact to local governments. We have 

to make assumptions in order to give you some numbers. 

The first thing that I want to talk about is the impact on a typical Colorado community’s budget, using Aurora as an example, but 

as I talk to other mayors and city council members from around 

the State, our experience is really typical of what you’d see in any 

community. 

I’m not going to talk to you about things like parks and recreation budgets, translators, code enforcement people, things like 

that. I want to limit our comments really to public safety. 

If we look just at what does it cost for our police and fire departments to respond to the needs of illegal immigrants in our community, we are looking at something over $5 million every year. 

That’s a significant part of our budget, and we’re looking at that 

we could have easily a couple hundred, if you look at all of the impacts, including schools, a couple hundred teachers and police officers additional for our citizens if it weren’t for these impacts. 

But just for public safety alone, we’re looking at over $5 million. 

Last year, we detained over 2,000 illegal immigrants. Those costs 

do not include the cost of prosecution or the cost of detaining people in our State prison system. 

When we look at K–12 education, you’ve heard from a couple of 

people that it’s difficult to get those exact numbers. And what 

we’ve used is, looking at English as a second language populations 

in our communities, and the Governor told you a few minutes ago 

that in some communities in Colorado, those numbers are as high 

as a third. 

Our numbers are a little lower than that, and we did not assume 

that all of those are either illegal or they are children of illegal immigrants. 

But still, just looking at a very conservative number of 25 percent of the ESL kids in Aurora, we’re still looking at over $20 million that the taxpayers of Aurora are paying to educate those children. 

And that’s conservative, compared to the numbers that they Governor gave you, which I think was a total of, I think, $500 million 

across the State. 

So those impacts on local communities are very real. 

When we look at health care, we talked to both of the hospitals 

in Aurora, and between those two hospitals, this doesn’t include 

clinics or doctor visits, just to those hospitals, the emergency care 

was approaching $10 million a year. 

Those are very real impacts to our community. 

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One of the things that we hear very often is, ‘‘Well, don’t illegal 

immigrants pay taxes, so doesn’t that balance it all out?’’

In the first panel, they went into a lot more detail than I’m going 

to about that that’s not necessarily true, but to kind of support 

some of the things that they were saying, I’d like to give you a few 

anecdotal stories. 

One of the things that we see consistently, not just in Aurora, 

but across the Front Range, is where often illegal immigrants come 

in and have multiple families living in what is designed to be a single-family residence. 

The result of that is you have many more people on a given property that’s paying property taxes than you might typically have for 

U.S. citizens in the same income bracket. 

The result is you have less property taxes per student going into 

those schools. So, is it true that indirectly, even if they’re renting 

they’re paying property taxes? Yes. Is that often less than it might 

be for some other family in the same economic circumstances? 

That’s true, as well. 

We also have to look at that city government in Colorado is 

largely driven by sales tax. If you have people who are sending 

large portions of their income out of the country, that’s money 

that’s not being spent in our local economy, and sales tax that isn’t 

being generated for our local governments. 

What this means is that in Colorado we have local communities 

that have very real costs, and those costs are significant. 

Without concrete data, we can still look at reasonable assumptions that would say that the taxes generated by illegal immigrants 

are typically not supporting all of the costs associated with illegal 

immigrants. And that’s consistent with what you heard in the first 

panel. 

There are a lot of contributions that immigrants, both legal and 

illegal, make in our community, and Senator, you’ve made that 

point before. We’re not trying to judge that. We’re only looking at 

what is the budgetary impact on our local communities, both to 

local governments and to schools. 

Typically, the budget impact is that the costs, we believe, based 

on what we’ve been able to determine, exceed the taxes that are 

paid in. 

Senator, the local communities in Colorado would like to be your 

partner. We believe from our citizens’ comments that this is the 

No. 1 issue that citizens in Colorado are concerned about. 

The local communities in Colorado would like to be a part of developing the answer, and we would like to ask that those local impacts are included in the discussion that we have in Washington. 

Again, Senator, we thank you. I know there’s a lot of people for 

you to hear from today, so I’m going to wrap up my remarks and 

I’ll stay and answer any questions that you have. 

[The prepared statement of Mr. Tauer follows:]

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Mr. TAUER. Thank you. 

Senator Allard. And thank you for your hospitality. 

Mr. Rubinstein, you’re Chief Deputy District Attorney of Mesa 

County. Your community has had a real problem with the 

methamphetamines, and you have a Meth Task Force because of 

the methamphetamine problem. 

And your testimony that I read over, had a considerable amount 

of information in it about dealing with the problem on the Western 

Slope. 

During your 5 minutes, I hope you can tie that a little more in 

closely with the budget events and how that affects budgets in your 

law enforcement and what you’re trying to deal with, and why you 

think that affects budgets and why illegal immigrants is a part of 

that. 

You have 5 minutes. 


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STATEMENT OF DAN RUBINSTEIN, CHIEF DEPUTY DISTRICT 

ATTORNEY AND MESA COUNTY METH TASK FORCE EXECUTIVE BOARD MEMBER 

Mr. Rubinstein. Absolutely. Thank you, Senator, for having me. 

I want to start by saying that we accept the numbers that the 

Drug Enforcement Administration is giving us that 60 percent of 

the methamphetamine that’s coming into our area is coming in 

from Mexican drug organizations operating outside of the United 

States; 20 percent is coming from Mexican drug organizations operating inside the United States; and the other 20 percent is coming 

from elsewhere. 

I want to talk a little bit about the violence that we’ve seen in 

Mesa County, and that’s going to tie in greatly with some of the 

costs. A lot of the issues I’m going to talk about are related to border issues and some immigration, as well. 

Over the last few years, we’ve seen a huge increase in methamphetamine-related violence. In 2005, Jamie Birch was shot by a 

22 year old man over a $300 drug debt from a prior methamphetamine deal. 

In October of 2005, a young man was murdered execution-style with a shot to the forehead at point blank range for $600 owed 

from a prior meth deal. 

The victim in that case had earned an athletic scholarship, but 

never made it because he spiraled downward as a result of methamphetamine before going to college. 

We are currently prosecuting a first degree murder case as a result of that incident. And 2 weeks ago, the person we’re prosecuting, his father was sentenced to 38- years in prison as a result 

of his own drug dealing and possession with intent to distribute 

cases. 

Shortly after that murder took place, the young man was taken 

out to the desert north of Grand Junction and shot six times. The 

two shooters in that case did so because they believed, falsely, that 

that individual had cooperated with law enforcement in the earlier 

murder case. By the grace of God, that gentleman survived. 

All of this terrible violence is representative of what we’ve seen 

and it’s a pattern we’re attempting to break. 

In 2005, our Drug Task Force seized seven guns. In the first 

months, the first 7 months of 2006, we’ve already seized 52 guns. 

In 2005, our Drug Task Force arrested 111 people related to 

methamphetamine. We’ve already arrested 112 in the first 7 

months of this year. 

Thanks to some visionary leadership by our DA’s office, the Sheriff, the police chief, the county commissioners and the city council, 

we have had an unprecedented response to this, but it has been 

very costly to us. 

We successfully ran a wire tap, which was extremely expensive, 

and it resulted in the arrest of now 44 people. That briefly hampered the supply of methamphetamine coming into Mesa County. 

In 2005, we had seized 58- pounds. Thus far in 2006, we have 

seized 25 1/2, so we’ve slowed it just to the pace of last year, whereas the other numbers have greatly increased. 

When we were searching for the murder suspect and the two 

shooters in the retaliation murder, we learned about some enforceVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00345 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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ment efforts. Both of those manhunts stretched over several days, 

and we learned that assigning patrol teams to work heavily the 

meth sub-culture not only caused us to locate those individuals, but 

caused a huge decrease in the property crimes that we learned 

were related. 

We had previously connected the 190 percent increase in property crimes in Mesa County between 2000 and 2004 to the rise in 

methamphetamine. 

This confirmed that to us, and as a result of that, we have created a special Street Crimes Unit specifically to target that. That 

unit costs us an additional half million dollars a year, which we 

would not otherwise have spent had we not been trying to get a 

handle on the meth problem locally. 

We estimate the cost of a mother with children, who goes into 

the Department of Human Services system, to cost between 

$200,000 and $300,000. That is the cost for DA’s, judges, public defenders, jurors, police, sheriffs, and that’s just on the criminal side. 

On the dependency and neglect side, as well, we have to employ 

county attorneys, Department of Human Services workers, put kids 

into foster care, do drug and alcohol counseling for the parents, 

mental health counseling for the kids, and there’s a lot of collateral 

services that go into that. 

A recent example of this is in June of 2006, two illegal immigrants were arrested for drug trafficking of methamphetamine. 

They had three pounds of methamphetamine on them and $57,000 

in cash. 

They sat in the Mesa County Jail at a cost to us of $52.40 per 

day. As a result of immigration holds, they were not eligible to 

bond out. And we also put their four children, ages one, three, 13 

and 14, into the Department of Human Services’ custody in foster 

care, at a cost to us of $10,000—over $10,000 per year. 

We estimate the—well, there was 745 immigration holds in Mesa 

County in 2005 on a variety of charges, and because of the immigration hold, they don’t post a bond. 

When we did our white paper to do the study to create our Meth 

Task Force, we found that 49 percent of our jail inmates were in 

possession of methamphetamine at the time they were arrested, 

and 79 percent of them were high at the time they were arrested. 

In summary, Senator, we know that the drugs are not being 

manufactured locally in Mesa County. We know this because out 

methamphetamine labs have greatly reduced, and we attribute 

that to effective legislation, both on the Federal and the State level. 

And the pseudoephedrine is not available, and that is the main ingredient in methamphetamine. 

What we also know is that methamphetamine has caused us 

more violence and more problems than anything else in Mesa 

County history, and we ask the Federal Government’s assistance 

on that. 

Thank you for your time. 

[The prepared statement of Mr. Rubinstein follows:]

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STATEMENT OF PAULA PRESLEY, COMMANDER, EL PASO 

COUNTY SHERIFF’S OFFICE 

Ms. Presley. Thank you, Senator. My name is Paula Presley, and 

I’m a commander with the El Paso County Sheriff’s Office, and I’d 

like to talk a little bit this afternoon about the impact that illegal 

immigration has on local law enforcement. 

The increase of immigration in the last few years carries a significant price tag for local law enforcement agencies, which is, of 

course, then passed on to the taxpayers in those communities. 

From the initial contact with law enforcement officers on the 

street, to the deputy working a ward in a detention facility, the 

burdens and the costs are increasing. 

Patrol deputies and police officers often contact these immigrants 

on the street, and spend a considerable amount of time trying to 

confirm their identity or ascertain citizenship. 

Often this is only confirmed if and when that individual is taken 

into custody and incarcerated in one of the detention facilities. 


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This process can be extremely time consuming as some of these 

individuals use a variety of aliases, specifically those who have 

been incarcerated in the local jails numerous times. 

If they are not incarcerated, confirmation of their identity may 

never occur and they may continue to live and work in the communities across Colorado without any legal status, as well as commit 

crimes in those communities. 

If the person is taken into custody and incarcerated on State or 

Federal charges, identity is more often than not confirmed through 

fingerprint identification. 

Immigration and Customs Enforcement is notified if the person 

is foreign-born, so the process of citizenship can be confirmed or denied. 

ICE may then place a hold on an individual; however, will not 

start deportation procedures until current criminal charges receive 

a disposition, or, in El Paso County’s case, the bond is set for those 

charges and the bond is posted. 

The posting of the bond and subsequent deportation raises a variety of concerns for local law enforcement and the victims in many 

of these crimes. 

If the bond is posted and the hold is placed by ICE, the person 

will be transferred to ICE for potential deportation. 

A bond deportation, often the bond is recovered by whoever posted that bond; whether it’s a local bond agent or family member, 

and that is statutorily permitted and the agent or family member 

suffers no financial loss. 

Often, the charges, then, are dismissed upon confirmation of the 

deportation. 

To give you an example of this, last year, in 2005, June 9th, a 

defendant in El Paso County was arrested for unlawful distribution 

and manufacturing of schedule two, and a bond was set for 

$10,000. 

On August 21st, the defendant’s bond was posted by a local bond 

agency. On the 22nd, he was released to an ICE agent, and on September 6th, he was ordered to be deported, and subsequently deported on September 8th. 

On November 28, 2005, the defendant’s case was dismissed due 

to deportation. Unbeknownst to the courts at that time, and of 

course local law enforcement, the defendant was back in the county 

and committed a kidnaping and assault with a deadly weapon on 

November 25th—three days prior to the dismissal of his original 

case. 

The warrant was not issued until December 19, 2005. Of course, 

that defendant didn’t face any penalty for the first case, and a warrant was issued and was still at large the last time I checked for 

the second case. 

If the person elects voluntary deportation, they may suffer no 

penalty for returning to the United States, or for the previous 

criminal offenses if the charges have been dismissed. 

This could also occur as a result of some type of plea bargain in 

the court system. 

If there is an order of deportation, then, of course, entry into the 

country can be a felony. 

345

We also have a problem with defendants posting a bond post-conviction, pre-sentence. So they’ve been convicted of a crime, they’re 

yet to be sentenced, and a bond is still set. 

If the defendant posts a bond, then of course, they can evade a 

sentence. 

An example of this, which was provided to me by one of our local 

judges in the Fourth Judicial District, is as follows: 

On November 21, 2005 a defendant pled guilty to a class four felony possession of more than one gram of cocaine. The plea agreement called for a cap of 4 years in prison. After the plea, the defendant asked the court to reduce his bond; it was set in the 

amount of $25,000. 

The court refused to reduce the bond, and sentencing was set for 

January 23, 2006. On December 24, 2005, a cash bond was posted 

in the amount of $25,000 by a family member. 

A pre-sentence investigation report was done, recommending a 

prison sentence based on the facts of the case, which included large 

amounts of drugs, money, and a firearm. 

But at the time the PSR was prepared by the probation department, ICE had already removed this defendant to Aurora. 

He failed to appear on January 23, 2006 and a warrant was 

issued for his arrest. The People indicated the defendant had been 

deported to Mexico. 

The person who posted the cash bond appeared on January 26th, 

and he indicated that the defendant was never released to him 

after he posted the bond, because he was picked up by ICE, and 

that he had no ability to get him back from Mexico. 

The court reviewed several cases; two of which I have here, People versus Gonzalez and People versus Escalera, and those cases 

allow basically the bond to be returned. 

The end result was the defendant has violated the Colorado law 

and successfully avoided a prison sentence. He’s released to Mexico, 

and the posted cash bond was then returned to his family member. 

In El Paso County, how this affects us on a daily basis is that 

we incarcerate an average of 90 to 95 inmates on a daily basis with 

immigration holds. Criminal offenses range from violent crimes to 

traffic charges; over 50 percent of these inmates have felony 

charges; 24 percent are drug-related and 24 percent of those are 

violent crimes. 

The costs for housing and room and board only is what I’m talking about here, and basic—very basic—medical care averages about 

$35 per day per inmate for an annual price tag for El Paso County 

in excess of $1.2 million. 

And depending upon the individual defendant, that could reach 

$1.9 million. 

Approximately $100,000 of this is reimbursed, leaving the county 

and the taxpayers to assume the rest of the liability. 

These costs are not inclusive and do not include on-going medical 

and dental treatment, transporting an inmate to and from court, 

court security, prosecution, court costs, or any other additional staff 

time and attention outside basic housing. 

We are one of the largest detention facilities in the State of Colorado. There are 25 wards in that facility with 1,599 beds, and these 

particular inmates comprise—if you were to look at the numbers—

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an entire ward, which requires around-the-clock security of a deputy, one deputy at least, and that amounts to about $600 per 24 

hour period. 

That doesn’t include, again, medical expenses, intake and release 

processing, or any other additional expenses outside of basic housing. 

With the increase in the population of the illegal immigration, 

specifically in El Paso County, additional law enforcement staff 

time is needed to address these problems before they are arrested 

and before there is incarceration, because this then, once they are 

incarcerated, creates a significant financial burden on the taxpayers. 

Thank you, Senator. 

[The prepared statement of Ms. Presley follows:]


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Now, I want to call on Mr. Ken Buck, who is the Weld County 

District Attorney. Welcome, Ken. 

STATEMENT OF KENNETH R. BUCK, WELD COUNTY DISTRICT 

ATTORNEY 

Mr. Buck. Thank you. I appreciate the opportunity to speak 

today on this very important issue, Senator. 

I also want to thank you for your work and that of your colleagues in the Senate for including the amendment in the Homeland Security Appropriations bill which will fund the study on the 

need and cost of an ICE office in Greeley. 

I note that earlier this week during one of the gubernatorial debates, both candidates endorsed this idea, and in fact, Bill Ritter 

talked about the frustration that a district attorney has by putting 

illegal immigrants who have committed felonies back on the streets 

of our community. 

Illegal immigration affects our entire country on all levels, from 

the Federal to the State to the local. And as Weld County District 

Attorney, I not only see the problems illegal immigration brings to 


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our State every day, but also the high costs that our citizens are 

forced to pay. 

The monetary burden that illegal immigration places on our law 

enforcement agencies, our court systems and our prison systems, 

rises each year. 

The Weld County Sheriff’s Department spent $1.6 million last 

year to house inmates out-of-county, because our jails have a 20 

percent over-population rate. 

According to the Sheriff’s Department, 12 percent or more of the 

jail population was comprised of undocumented foreigners. 

Only a small portion of the illegal immigrants that are in our 

jails are deported by the Immigration and Customs Enforcement 

Agency. 

The cost of illegal immigration on our education system is one 

that we as a society will pay for years to come. It is no secret that 

our children, especially those in the Greeley-Evans School District 

Six, are facing numerous problems with the education system. The 

district was recently placed on the State watch list. 

One such problem is, indeed, a language barrier. An average of 

20 percent of district six children in kindergarten through sixth 

grade are monolingual, Spanish speaking only. 

The danger this reality presents is simple: It puts more stress on 

the system, it is a true no-win situation. 

Like many other rural counties, including Mesa County, my colleague from Mesa County, Weld County is facing a crisis with 

meth. Neighborhoods and towns are seeing the devastating effects 

of this drug, and the violent activities that surround it. 

Ninety percent of the meth in Weld County comes through our 

southern border. This is a study that was done by the Weld County 

Drug Task Force. 

If we leave that border open, we can expect to see this trend not 

only continue, but also increase. 

In 2002, the Weld County Drug Task Force cleaned up 63 meth 

labs, and in 2005 only six meth labs, which is a strong indicator 

that the meth is coming from outside. And based on the type of 

meth, it is believed it’s coming from Mexico. 

The most devastating and unnecessary cost of illegal immigration is the loss of life. In May 2005, a wife lost her husband and 

a little girl lost her father. The true tragedy of their loss is that 

it could have been prevented. 

Damien Campos, a Mexican immigrant, in this country illegally, 

had slipped through the justice system several times. When he was 

arrested in Weld County following a drunk driving accident which 

killed his passenger, Damien had numerous aliases and several 

false forms of identification. 

Prior to the fatal accident, he had six drunk driving convictions, 

but wasn’t tagged by immigration officials for deportation until 

after he killed Marcos Martinez. 

Through the use of false documents and aliases, Damien slipped 

through the system, and consequently was free to drink and drive 

again and again. 

The reality is that until ICE receives the resources and funding 

needed to do their job effectively, illegal immigrants who commit 

349

serious crimes will fall through the cracks and people will continue 

to be at-risk. 

We must close the border, Senator, and enforce the laws already 

in existence in this country regarding immigration, and we must 

make sure the agencies that are created to help control illegal immigration are provided with the resources they need to do their job 

well. That should be the only cost we are willing to pay to confront 

this problem. 

Thank you. 

[The prepared statement of Mr. Buck follows:]


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Mr. Gagliardi? 

STATEMENT OF TONY GAGLIARDI, COLORADO STATE DIRECTOR, NATIONAL FEDERATION OF INDEPENDENT BUSINESS 

Mr. Gagliardi. Thank you, Senator. My name is Tony Gagliardi, 

and I’m the Colorado State Director for the National Federation of 

Independent Business. 

On behalf of NFIB, I’d like to thank you for inviting small and 

independent business to the table to discuss this important issue. 

NFIB is the State and Nation’s leading small business advocacy 

group; a non-profit, non-partisan organization founded in 1943. 

NFIB represents the consensus views of its 600,000 members in 

Washington and all 50 State capitals. 

In Colorado, NFIB represents 12,000 members. 

Before I get into my testimony, I’d like to just talk a little bit 

about the impact of small business. 

Small business comprises 92 percent of the businesses in existence in the United States, and employs over half the work force. 


26823.275
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Small business truly is the engine that drives this Nation’s economy. 

A survey of NFIB members from across the country by our research foundation regarding immigration issues, found that over 90 

percent of small business owners see illegal immigration as a serious problem, but are divided on which solution best addresses the 

issue. 

However, there is no doubt NFIB firmly believes that employers 

who knowingly hire illegal workers should be prosecuted to the 

fullest extent of the law. 

Seventy percent of NFIB members surveyed ranked problems 

surrounding the immigration issues as very serious or serious, and 

86 percent say it should have a very high or high priority for Congress and the Administration. 

According to the small business owners surveyed, 47 percent said 

the single most important reason illegal immigration constitutes a 

problem is the cost of illegal immigrants to taxpayers and local government. 

Other reasons receiving significant concern regarding immigration were national security and threat of terrorism, and job loss 

and depressed wages for Americans. 

Illegal immigration has a negative effect on NFIB members, especially those in the construction and labor trades. Roofing and 

painting operations seem to generate the most complaints. Members report that they are at a severe disadvantage when employers 

knowingly use illegal workers and use a low wage standard for the 

purpose of contracting work at less than the standard rates. 

This situation also has negative effects on Federal, State, and 

local governments in terms of underpayment of taxes or no payment of taxes. Services provided to illegal workers additionally add 

to the costs. 

As individual States continue in attempts to address illegal immigration at the local level, the legal and legislative costs are underwritten by the legitimate taxpayer, and a large portion of these 

taxpayers are small business owners. 

Increasing penalties for employers who knowingly hire illegal 

aliens was supported by 78 percent of the small business owners 

surveyed. 

Small business owners would consider verification of an ID used 

by an employee to prove eligibility to work a moderate burden; 

however, the burden could be reduced by a workable and reliable 

verification authorization system that would certify document authenticity. 

This avenue must be examined and the cost benefit must be 

seen. 

On behalf of the 12,000 NFIB Colorado members, I sincerely appreciate the opportunity to appear before you, and welcome the 

membership of NFIB as a resource. 

[The prepared statement of Mr. Gagliardi follows:]

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Ms. Helen Krieble, President and Founder of the Vernon K. 

Krieble Foundation, you’re next, Ms. Krieble. 

STATEMENT OF HELEN KRIEBLE, PRESIDENT AND FOUNDER, 

THE VERNON K. KRIEBLE FOUNDATION 

Ms. Krieble. Thank you very much, Senator. I request that my 

formal comments be entered into the record; they have been submitted. 

Senator Allard. They are so ordered to do that. 

Ms. Krieble. I also want to thank you. I noticed that our other 

Senator said that comments and commentary from people in Colorado could not possibly be important to discussions in Congress. I 

am very honored that you think otherwise, and thank you so much. 

Senator Allard. You’re welcome. 

Ms. Krieble. The American people have said over and over again 

in polls that they want three things: They want border security, 

they want a sensible, workable, legal guest worker program, and 

they do not want amnesty. 


26823.288
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I am a employer of guest workers. I understand the problems associated with that; it’s very visceral for me. 

There is no way for a worker from Mexico to get an H2B visa. 

H2B visas are applied for by employers, and then, if they are 

granted, you usually have rounded up some workers to receive 

them. But an individual cannot apply for those H2Bs. 

The guesstimate is that in Colorado there is probably a need for 

150,000 H2B entry-level worker visas. There are approximately 

67,000 issued for the entire United States, and it costs at least 

$1,000 a worker, if you’re a small employer, to go through the endless bureaucratic layers that it takes to actually acquire an H2B 

visa. Anywhere during that process you can be told that you have 

passed the quoto for a visa. There is no refund on all the money, 

and you cannot get a legal worker. 

People such as me have a choice, if you are outside of that quota; 

of hiring illegals or closing the doors of your business and firing all 

of your U.S. citizen workers, because without entry level workers, 

you often can’t run your business. 

The estimate is that every entry level worker provides three and 

a half jobs for American citizens. If you were making a widget, and 

you can export your company to a country that does have entry 

level workers, you will. I’d love to see an analysis of the cost of that 

to the American economy which is not considered when they’re 

talking about a guest worker program. 

We have learned from many statistics that when a legal guest 

worker program that is efficient and workable is put in place, the 

number of people trying to cross the U.S. border illegally sinks. 

In this case, the belief is that 85 to 90 percent of the people coming across our borders illegally are not a security threat. What they 

want is work. 

I would like to say up front that we do not, in our policy, believe 

that a guest worker should be on the path to citizenship. Citizenship is very serious, it is a separate program, anybody in the world 

can apply for a green card or citizenship, go to the end of that line 

and go through the process. If you’re a guest worker, you can do 

that. The Government doesn’t need to give you permission to apply 

to be a U.S. citizen. 

What the guest worker program is for, or the temporary worker 

program, is for is work, and I think that people who want to come 

here and work for jobs that are going begging, should be accommodated. 

What we would like to offer to the debate on the Federal level, 

is a private sector market-oriented implementation of a guest worker program that will cost the Federal Government very little and 

reduce the number of people pouring across our borders illegally 

many of whom do not wish to be citizens, to 10 or 15 percent of 

the number we have now. This reduces the people who are coming 

across our borders illegally, to people who, one, don’t want work, 

or two, are criminals. We need 100 percent security against those 

people. 

They will no longer be camouflaged by good people who simply 

wish to work in the United States. 

So, from there what we are saying is that a temporary worker 

program should be determined, the numbers, by the market itself. 

355

The jobs that are going begging in the United States should be able 

to be posted, after they’ve been advertised to U.S. citizens at private American employment agencies, licensed by the Government 

and located outside of our borders. Workers, foreign workers, who 

wish to fill those jobs should be able to apply for them with no 

intermediary, at the employment agency. 

Employment agencies are masters of matching jobs with workers. 

They would run the applicant through a security check like a gun 

shop does, and they would be licensed to issue smart cards, such 

as your MasterCard, which cannot be copied or cheated on in any 

way which you can use in the smallest little village in Turkey with 

great security. 

We know how to issue smart cards. Those smart cards could 

have on it whatever the Government would like; foreign workers’ 

picture, their fingerprints, the job they’ve taken, the agency that 

issued that job, how to reach the job, how to reach the agency when 

the card expires. A person goes then immediately to the job. It 

eliminates two terrible disincentives which are the layers of bureaucracy and the cost of going through all of those Federal and 

local bureaucracies, and the quota, which means you have a very 

big chance of not getting a guest worker visa anyway. Furthermore 

no private person can apply for them outside of our borders in the 

H2B category. 

So, again, our program is private sector, market driven, at almost zero cost to the American taxpayer, because the costs of the 

smart card and the data base will be picked up by the employment 

agencies as a cost of doing business. They will be able to charge 

a fee to both the applicant employee and the applicant employer. 

When this happens—remember this has nothing to do with citizenship—any guest worker who would like to be a citizen and have 

the benefits of a citizen and a green card worker, must go to the 

end of the immigration line. 

But now, look at your security at the border. You are easily able 

to secure the border because you will only have 10 percent of the 

people now trying to cross and no person seeking just a legitimate 

job in the United States will be sneaking across the border unless 

they’re criminals. So you don’t need to beef up the border, you don’t 

need billions of dollars for walls or thousands more Federal employees. The people and technology we already have at the border 

we’ll then be able to deal with it, and in the interim of the transition, the National Guard is marvelous because they don’t become 

permanent Federal employees and they can be returned home 

when they are no longer needed. 

And finally, I would just like to comment on punishment. We are 

focused on punishing people, both people who wish to get a good 

job in the U.S., filling jobs that are going begging, and employers, 

when there is no legal path for either employers or potential employees to make a match. Becoming a criminal when you’re going 

to close your business and starve your own family without entry 

level workers, and be punished for it when you can’t get a legal 

worker, is not right. 

So, I hope that with economics at the heart of this, you will see 

that our plan requires very little extra money, and I hope Congress 

will look very carefully before it leaps head long into what I conVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00361 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
356

sider to be an abyss of another massive buildup of Federal bureaucracy and a massive buildup of Federal expenditure that is required 

by both the House bill and the Senate bill. It isn’t necessary and 

it won’t solve the problem. 

And so in our program, the market determines the numbers of 

guest workers; no job, no guest worker. Understand that. Only if 

there’s a job going begging does a guest worker get the visa. Private business implements it, and the border can be credibly secured at very little expense. 

I hope that you will have faith in the American people who deal 

with these problems day-by-day as business people and in the 

workers who would like to come and work in our country, and that 

you will give this plan a careful review, as it deserves. Thank you. 

[The prepared statement of Ms. Krieble follows:]


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Now we’ll go into a period of questions, and for you, Mr. Mayor, 

both you and the Governor mentioned something to the effect, and 

I just want to verify this with you, that there are many programs 

that you deal with, say, that you only provide to citizens, but yet 

Federal law prevents you from asking the question directly to them 

whether they’re a citizen or not. Is that correct? 

Mr. Tauer. To the best of my knowledge, yes, Senator. I think 

the best example that we’ve talked about is the schools. It makes 

sense, as the Governor pointed out, to have a program where we 

educate children, and that’s an undeniable good thing. 

But in this case, the bottom line is that local communities are 

footing the bill for our leaking Federal border and our school districts are not allowed to let people in or keep them out, and they’re 

not even allowed to ask ‘‘are you or are you not here legally.’’ And 

I think that’s the best example. 

There are other programs that the counties administer, as well. 

We don’t have that many programs in the city that are actually social-type programs, but our partners tell us about quite a few of 

those. 


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So, yes, Senator, that’s true. 

Senator ALLARD. What is the proper role of cities in addressing 

the problems associated with illegal immigration, in your view? 

Mr. Tauer. Well, Senator, I know that you get asked loaded questions from time to time, so it’s probably only fitting that you get 

to ask one in return. 

You know, I think that that’s something that we need to work 

out together. I don’t think that it’s a great idea for us to say, ‘‘this 

is the role.’’

I think that we do need to be partners, and let me give you an 

example, and it goes along with what Ms. Presley was saying a 

while ago. 

We recently had a case where we apprehended a criminal. As 

you’ve been told many times, ICE has very limited resources. 

Because that criminal was a repeat felony offender, we were able 

to work with ICE and get them deported. That criminal was re-arrested in Colorado committing a crime less than 4 weeks later. 

So, I think that we do need to carry our share, which is to work 

with the immigration authorities when we encounter illegal immigrants, especially and particularly those that are a public safety 

threat. 

But we also need the Federal Government to have a working system that lets us address those, so I think that the key is we need 

to be a partner, but I don’t know that our resources are well spent 

until we have an answer at the Federal level. 

I’d love to say that we can answer it, but the truth is neither the 

State of Colorado nor any of our local communities, I believe, can 

effectively be using our resources until we also have that Federal 

answer. 

Senator Allard. You quoted a number of figures, for example, I 

think you quoted $5 million every year out of your law enforcement 

budget. I don’t know whether you have that figure available—what 

the total figure is, but it would be interesting if we could get a percentage of the total law enforcement budget or $5 million out of 

what size budget that happens to be. 

Mr. Tauer. That’s about 5 percent of our budget, Senator, and 

that includes all public safety, which includes courts as well as fire. 

We believe that’s a very, very conservative number, and so we 

erred on the side of being conservative. I think that you could 

make arguments that would estimate that that number would go 

up by 50 percent. 

Again, the difficulty is that if, for example, if we give somebody 

a traffic ticket, we can suspect that they’re here illegally, but the 

ability to determine concretely if they’re here illegally is just simply 

absent. 

And so we have to make estimates on some of those things and, 

in this case, we estimated about 5 percent, which is consistent with 

what the Census Bureau says is the percentage of Colorado’s population that is here illegally. 

Senator Allard. Now, education here in the Aurora area is $25 

million cost you think to illegal immigrants, is that correct? 

Mr. Tauer. Illegal immigrants and children of illegal immigrants, 

and we believe that’s very conservative. 

360

Senator Allard. What percentage of the costs on that are we looking at? 

Mr. Tauer. You mean the total school district costs? 

Senator Allard. Yes. 

Mr. Tauer. I can have that to your office by tomorrow morning. 

Senator Allard. If you can share that, it would be helpful. 

Mr. Tauer. We used that on—we determined that on the basis 

of 25 percent of the English as a second language students in our 

two school districts. 

Senator Allard. I see. 

Mr. Tauer. And our best information from talking to others 

around the State is that that’s consistent across the State of Colorado. 

Senator Allard. OK. And then on health care, you used the figure $10 million. And what percentage of the budget is that, or what’s 

the total, if you know? 

Mr. Tauer. Senator, that came from our two hospitals, and I’d be 

happy to get that for you, as well. 

Senator Allard. That would be helpful if you could. 

Mr. Tauer. Yes, sir. 

Senator Allard. Thank you. Ms. Presley, I think you stated 90 to 

95 illegal aliens a day are housed in your holding facility, is that 

correct? 

Ms. Presley. That’s correct, Senator. 

Senator Allard. And if you know that a person is here illegally, 

present in the United States, what’s getting in the way of them 

being deported from your holding facility? 

Ms. Presley. Often the local charges or the State charges that 

they’re here on. They are initially arrested, certainly, on some type 

of crime, and you know, if they’re able to post a bond, then of 

course they can deport quicker. But if they are not, then of course, 

the process is a little bit more lengthy as far as prosecuting them 

for that particular crime. 

So that’s really what’s holding them there is they either post a 

bond and then deportation can begin, or their local crime or their 

State crime, there has to be a disposition on it prior to deportation. 

Senator Allard. Has the immigration service been responsive 

when you’ve notified them, when you run into illegal immigrants? 

Ms. Presley. Yes, Senator. In our jurisdiction they are very responsive. To give you an idea, we actually have an agent in our facility almost on a daily basis, because we’re housing so many illegal 

immigrants there. 

So, in any given week, probably four out of the 5-days, we have 

an agent that has been to our facility at some point during the day 

dealing with that population. 

Senator Allard. Mr. Rubinstein, you’ve talked about the methamphetamine problem that you’re having there in Mesa County, 

and do you agree with the testimony from Mr. Buck, who has stated that he believes that nearly all the methamphetamine is coming 

in from outside our borders and a good percentage of that is meth 

labs on the other side of the Mexican-American border? 

Mr. Rubinstein. I do, Senator. The number that was given by Mr. 

Buck was that it was 90 percent was coming from the southwest 

border. The most recent numbers I had gotten from the Drug EnVerDate 0ct 09 2002 09:52 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00366 Fmt 6601 Sfmt 6601 C:\DOCS\26823.TXT SBUD1 PsN: TISH
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forcement Administration was that it was 80 percent from Mexican 

drug organizations, but part of that number was drug organizations operating inside the United States in the southwest region of 

the country. 

So I’m not sure if Mr. Buck’s testimony was that it was in the 

southwest border outside of our country. I certainly don’t dispute 

his numbers. The numbers I’ve received from the Drug Enforcement Administration, I think, were conservative; both what I’m 

hearing from DEA and from Mr. Buck are consistent with the information we’re getting. 

One thing I can tell you is that we do not seize enough labs. We 

have a pretty good community of businessmen who report to us 

about pseudoephedrine sales. There is no way the methamphetamine that we’re seizing is being manufactured in Mesa County. 

It’s being manufactured in super labs. 

The labs that we’re finding are manufacturing no more than an 

ounce. Super labs in Mexico can manufacture up to 100 pounds a 

day, so the ability to bring in pseudoephedrine into Mexico and 

manufacture there is much easier than it is, thanks to Federal and 

State legislation. 

Senator Allard. I had a physics professor that said to analyze a 

problem sometimes you must carry it to extremes. Let’s suppose 

that we could put in place a policy that stopped all illegal immigration. Just for hypothetical purposes, what do you think would happen with your methamphetamine supplies in Mesa County? 

Mr. Rubinstein. I can give you a similar example. When we took 

down the wire tap and arrested the 44 people, we saw a slight increase in attempts to manufacture locally. The price also went up. 

So what occurs as a result of—and when you say stopping illegal 

immigration, I think it’s really from our perspective, from a law enforcement perspective, securing the border from the drugs coming 

across is really somewhat of a separate issue than the immigration 

side of it. 

There is certainly immigration issues that come into play with 

jail overcrowding, but securing the border and stopping the methamphetamine from coming across, I think that would do a large 

part in drying up the supply long enough for us to do the other 

things that our task force is charged with doing; that is, prevention 

and treatment and trying to get those who are currently addicted 

off the drug, and those who are high risk, keep them from using. 

Senator Allard. Mr. Gagliardi, what tools do businesses need to 

verify that the people they hire are legally in this country? I’ve 

been a small businessman myself, and we’ve heard previous testimony that, you know, you use a birth certificate and that’s easily 

forgeable. 

Use a driver’s license, and Colorado has a driver’s license that’s 

difficult to forge, but many States it’s not that difficult. Or you use 

Social Security numbers. Two of those three is what you use as a 

businessman to verify that they are here legally. 

What other tools do small business people need to make sure 

that their new hires are legally in this country? 

Mr. GAGLIARDI. Senator, when it comes to verification of employment documents, and currently small business owners, as you well 

know, complete the I–9 comprised of three columns. You either use 

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one out of column A or one out of column B and one out of column 

C, and usually—and you are absolutely right. It usually comes 

down to the driver’s license and the birth certificate. 

My members I’ve spoken with, once again, would consider—I 

have had members tell me they have used the on-line verification, 

and have not been able to get through, that it has not worked for 

them. 

Senator Allard. This is on-line verification provided by Social Security? 

Mr. Gagliardi. Yes. 

Senator Allard. Is that correct? 

Mr. Gagliardi. Yes, sir. 

Senator Allard. Are they put on hold, or what? 

Mr. Gagliardi. They just can’t access it. 

Senator Allard. I see. 

Mr. Gagliardi. They just can’t access it, that’s why our stand at 

NFIB is if we are going to use a verification system, and it’s going 

to be available to business, it needs to be reliable and it needs to 

be working at the pleasure of the employer. We’re the ones who 

have to take the responsibility for making sure we are hiring illegal workers—or hiring legal workers. 

Senator Allard. Very good. Ms. Krieble, I find your plan very fascinating, and that’s the Pence Plan, I believe. 

Ms. Krieble. I would say about 80 percent of what I believe 

should happen is in the Pence-Hutchison Plan. 

Senator Allard. When people review what you’ve said, the question that comes up is how do you assure them that worker that you 

bring here into this country is going to go back to the country from 

whence they came? In other words, are you sure that they’re truly 

going to be temporary workers in this country? 

Ms. Krieble. Sir, if it was regularly and easily possible to hire 

verifiable legal workers with a smart card that anybody can swipe 

so that there’s no process except that (we know the technology is 

there) and we know it can be done efficiently and inexpensively, if 

there was a regular supply of people who would fill your jobs that 

are a guaranteed legal, and there was a penalty for hiring an illegal, why would you hire an illegal person? 

I’ve never yet met an employer who really wants to hire illegals, 

so not only would these people find that they cannot get a job if 

they do not have a legal guest worker permit, the new people who 

are coming in, but the illegals already here would find that the 

market for illegals in the job market would dry up and they would 

have to find a way outside the borders of the country, make an appointment so it’s a 2-hour visit, get a smart card, run through national security. If you’ve never committed a crime, you can be back 

to a job with a letter from your employer that you’re employed. 

So, there is no human incentive or advantage to be an illegal 

anymore. 

Senator Allard. I agree with you that the technology is there, 

that we can probably use a smart card. The printing office for the 

Government has put together a visa that has biometrics on it and 

a lot of the things that you talked about that you can’t—that’s specific to the individual that gets that visa. 

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I guess it’s going to require some technology to use that card, to 

get that information. Do you think a businessman would have that 

technology if they came in to work for him, a job where he could 

run that through a system or something and get that verified? 

Ms. Krieble. We have already proved that the technology is 

there. 

Senator Allard. Yes, that’s my point. 

Ms. Krieble. And that you can—that a card can be created that 

can do these things. 

Senator Allard. Yes. 

Ms. Krieble. It is absolutely non-duplicatable, in which anybody 

can get a swiping machine, like we have—most businesses have for 

MasterCards——

Senator Allard. Sure. 

Ms. Krieble.—and other things. It would be just that easy. 

Senator Allard. That cost to the business, though, I mean, I’ve 

been a businessman, you know, you look at those costs. 

Ms. Krieble. But that cost would be the same as running 

MasterCards, and the advantages would be enormous and you’re 

on the right side of the law. 

Senator Allard. Well I hope you’re right on the cost. But that is 

one issue that’s brought up, I agree we have the technology and 

your point that you’re making is that if we have fines that are 

steep enough on the employer, why would they hire anybody unless 

they can verify it, and if they have a smart card, and it’s going to 

work because nobody is going to bother to hire that illegal person, 

and he has no choice but to return back to the country from which 

he came. 

Ms. Krieble. Enforcement is very, very important to make this 

system work. But once again, I go back to the fact that if you make 

it impossible for people to be legal, you really shouldn’t punish 

them if they go to the illegal side. 

Make it easy and efficient through the private sector to be legal, 

and then you will solve your problem. 

Senator Allard. Now, your plan is different from the immigration 

bill that we passed in the Senate. 

Ms. Krieble. Yes, sir. 

Senator Allard. And the fact that what we have in the Senate, 

passed out of Senate, actually has amnesty, because it leads to citizenship, but your plan does not have amnesty, is that correct? 

Ms. Krieble. There should be no citizenship track from a guest 

worker program. We have a citizenship track. The Declaration of 

the United States says that all people—the Declaration of Independence, are created equal under the law. 

To take a large body of people who have broken our laws and giving them a jump up against all decent individuals in the immigration line, is not right. They are perfectly welcome to apply at any 

time, but they go through the same process in the same way in the 

immigration line. 

Senator Allard. We’ve run out of time. And I want to thank this 

panel for their testimony. 

I want to thank the audience for their courteousness and complying with our Senate rules while you listened to the testimony 

here this afternoon. 

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I would ask the panel to respond to any questions that may come 

from the Committee, within 10 days, if you would, please. If there’s 

some followup questions, we would very much appreciate that because it would get us the information in time for it to be considered 

during our deliberations here in September. 

Thank you for your testimony, and with that, there’s one other 

thing that I need to do and that is I need to enter into the record 

the Bell Policy Center Study, which my staff picked up at a meeting last night. 

And this, the reason we’re entering it in the record, has a lot of 

figures in it dealing with the budget, and I think it’s important 

that it be a part of the record. 

And with that, we will declare the Budget Committee adjourned. 

[Whereupon, at 4:40 p.m., the Committee was adjourned.]

ANSWERS TO QUESTIONS SUBMITTED

Responses to Questions for the Record from Senator Allard Regarding

Testimony by Paul Cullinan, Chief, Human Resources Cost Estimates Unit, Congressional Budget Office, Before the Committee on the Budget, August 30, 2006

1a. Under S. 2611, all of the estimated 12 million illegal immigrants in the United 

States will become eligible for citizenship. What government benefits are illegal immigrants eligible to receive?

Undocumented immigrants are not eligible for most major federal benefit programs. However, a few programs provide benefits to individuals regardless of their 

immigration status, provided that they meet certain income and other requirements. 

Those programs include emergency Medicaid; the National School Lunch Program; 

the School Breakfast Program; the special supplemental nutrition program for 

women, infants, and children (WIC); and other federal food assistance and shortterm disaster relief programs. (In addition, all taxpayers, regardless of their immigration status, are eligible to receive refundable tax credits if they qualify for them.)

1b. What additional benefits would the current illegal immigrant population become eligible to receive upon being granted citizenship? What is the cost per-beneficiary for each of these benefits for the most recent fiscal year?

Citizenship is not a requirement for most federal benefit programs. Under the 

Personal Responsibility and Work Opportunity Reconcilation Act of 1996, immigrants who are ‘‘qualified aliens’’-refugees, asylees, or legal permanent residents 

(LPRs)-are eligible to receive benefits. Most LPRs are also subject to a five-year 

waiting period before they can receive benefits. In addition, they must meet a program’s income and other requirements.

Undocumented immigrants who attained LPR status under S. 2611 would become 

eligible for several major federal benefit programs, whose eligibility requirements 

and benefit levels are described below. Those individuals would also become eligible 

for a number of other benefit programs (for example, Temporary Assistance for 

Needy Families, Social Services Block Grants, and child care assistance), but those 

new participants would have little impact on spending for those programs over the 

2007-2016 period because the programs have fixed funding, place more restrictions 

on the eligibility of noncitizens, or are not expected to see a significant increase in 

spending until after 2016.

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