FinCEN is a relatively small agency with a fiscal year 1997 budget of about $23 million and an onboard staffing level (as of December 1997) of 162 employees. FinCEN does not initiate or carry out any investigations on its own. Rather, by serving as a central source for financial intelligence information and analysis, FinCEN supports the investigative and prosecutive efforts of numerous law enforcement authorities. These include federal agencies, such as the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), IRS, and the Customs Service; state police departments and attorney general offices; local police departments and district attorney offices; and others, including applicable foreign authorities. In supporting these law enforcement entities, FinCEN administers the largest financial transaction reporting system in the world, which is based on recordkeeping and reporting requirements mandated or authorized under the BSA, as amended. To supplement the BSA-related financial database, FinCEN procures access to a variety of commercially maintained databases, such as Autotrack and Lexis/Nexis, which can be used to locate individuals, determine asset ownership, and establish links among individuals, businesses, and assets. Moreover, through specific written agreements, FinCEN can access the investigative-case databases of various federal law enforcement agencies (e.g., DEA and the Customs Service). Further, FinCEN maintains an internal database of the cases or requests it has supported and the related products it has generated. This internal database enables FinCEN to help law enforcement agencies coordinate their efforts. Appendix II contains additional information about the databases used by FinCEN. Using these financial, commercial, and law enforcement databases, FinCEN provides five principal types of support. Historically, tactical support in response to law enforcement requests for data and analysis has been a mainstay of FinCEN’s various products and services. Tactical products can be database extracts on a single subject or detailed, in-depth analyses of the financial aspects of major criminal organizations. According to a FinCEN official, routine requests for tactical support are handled on a first-come, first-served basis, with federal, state, and local requests treated equally. The official added that FinCEN can respond to tactical requests requiring immediate attention (e.g., terrorism cases) within 24 hours and sometimes as quickly as 2 to 3 hours. At times, FinCEN may also provide off-site support to investigative teams or task forces working complex cases. Further, FinCEN provides tactical support to assist other types of cases, including classified, terrorism, and grand-jury investigations. As the name implies, rather than focusing on individual cases, FinCEN’s strategic support is designed to provide federal and state law enforcement officials with intelligence analyses and reports on longer term or more broadly scoped topics. An example is the analysis of trends, patterns, and fluctuations in currency flows to and from Federal Reserve banks to determine any money-laundering implications. Also, as part of its strategic efforts, FinCEN has developed a “case lab” unit to assist law enforcement agencies in addressing large-scale money-laundering activity, such as that conducted by drug cartels. According to FinCEN’s Strategic Plan (1997-2002), the agency’s overriding objective over the next few years will be to construct a viable model for determining the magnitude of money laundering. FinCEN’s artificial intelligence support is designed to help identify subjects (i.e., individuals and businesses) possibly involved in money laundering and other types of financial crimes. This support relies on computerized technology designed to identify suspicious transactions by reviewing and correlating (i.e., grouping or linking) currency transaction reports required by the BSA. FinCEN has used this technology to self-generate investigative leads as well as to respond to specific requests. In the former instances, FinCEN’s policy is to forward its results to the appropriate law enforcement agency for consideration. A fourth type of support is on-site tactical self-help (called a “platform concept”), whereby FinCEN encourages and trains agents and analysts from federal law enforcement and regulatory agencies to access the BSA financial database and commercial databases (accessible at FinCEN) to conduct their own research and analysis. FinCEN provides office space and database access for these personnel, who use FinCEN resources on a full- or part-time basis and work only on cases for their respective agencies. Most platform users do not have direct access to law enforcement databases or suspicious activity reports. A FinCEN official explained that (1) interagency agreements usually prohibit platform users from accessing law enforcement databases and (2) most federal agencies that use suspicious activity reports have their own access to the reports. When requested, a FinCEN employee will check these databases for platform users. Finally, the fifth type of support is off-site tactical self-help (called “Project Gateway”)—a joint effort between FinCEN and the IRS Detroit Computing Center, which receives and processes financial information reported under the BSA (e.g., currency transaction reports). Using custom-designed software, designated state and local law enforcement officials have direct, on-line electronic access to BSA records, including suspicious activity reports. These designated officials also conduct Gateway queries for other law enforcement agencies in their state and can also request information from the Autotrack commercial database. According to a FinCEN official, Gateway users have direct access to suspicious activity reports primarily because state and local law enforcement agencies do not have their own access to the reports. Further, through Gateway, FinCEN can “alert” or notify one agency that another agency has or had an interest in the same investigative subject (individual or entity). Each state’s access to Gateway is free of charge (except for telephone charges). While the types of products and services offered by FinCEN have expanded, the volume of tactical, strategic, and artificial intelligence reports has decreased over the past several years. While the reasons for the decreases varied, one significant factor cited by FinCEN was that it assigned fewer staff to support these activities. Since 1995, law enforcement officials have increased their use of FinCEN’s platform concept and Project Gateway to conduct their own research and analysis. FinCEN has been providing tactical support to the law enforcement community since the agency was established in 1990. As figure 1 shows, the volume of law enforcement requests to FinCEN for tactical support increased significantly from calendar year 1991—the first full year of operation—to 1995. However, from calendar year 1995 to 1997, the volume of requests decreased by approximately 38 percent. According to a FinCEN official, one primary reason for the decrease in the number of tactical requests was that, in recent years, FinCEN stopped accepting certain types of requests—such as requests involving background checks for employment or security clearance purposes—that did not directly support law enforcement functions. For example, FinCEN stopped supporting certain IRS and U.S. Postal Inspection Service investigations in 1996. As a result, FinCEN’s 1997 workload was reduced by approximately 3,300 cases. The official told us that FinCEN’s expertise is not needed to conduct these types of inquiries and that, as a result, FinCEN has made efforts to encourage agencies to conduct these types of research on their own or by using FinCEN’s platform concept or Project Gateway, as applicable. The official told us that FinCEN stopped accepting certain types of requests to compensate for reductions in staff assigned to provide tactical support. As figure 2 shows, from October 1994 to October 1997, the total number of staff (federal and contractor) responding to requests for tactical investigative support decreased from 77 to 40. Of this total, the number of federal staff (i.e., FinCEN employees and detailees from other agencies) decreased from 53 to 19. According to the FinCEN official, although the agency’s overall staff levels have remained fairly constant over the years, many tactical staff have been reassigned to support FinCEN’s expanded mission, which includes (1) responsibility for promulgating BSA regulations and (2) a leadership role in international efforts to combat money laundering. The official also told us that several tactical staff were reassigned in March 1997 to support FinCEN’s new Office of Research and Analysis. According to FinCEN officials, FinCEN also began to contact requesters in 1995 to determine specifically what type of data and analysis was needed. These contacts included determining which databases had already been researched (outside of FinCEN), which databases FinCEN should research, and what type of report should be provided (e.g., a database extract or an analytical report). The officials told us that, before 1995, FinCEN’s tactical support staff would generally research all of the financial, commercial, and law enforcement databases the agency could access. Further, over the past 2 years, an increasing number of tactical reports consisted of database extracts versus reports that contained detailed analysis. According to FinCEN officials, the percentage of tactical products that contained detailed analysis decreased from approximately 25 percent in calendar year 1996 to about 10 percent during calendar year 1997. According to FinCEN’s Strategic Plan (1997-2002), the agency intends to provide better tactical support to its customers by increasing the number of FinCEN analysts capable of performing complex research and analysis. As with tactical support, FinCEN has been providing strategic support to the law enforcement community since 1990. As shown in figure 3, the volume of strategic reports issued by FinCEN has decreased from a high of 23 in 1992 to 1 in 1997. According to a FinCEN official, fewer strategic reports were generated in recent years because (1) FinCEN assigned fewer staff to support strategic projects and (2) the products often did not provide the type of information law enforcement officials needed to do their work.