S. Hrg. 107-447 OVERSIGHT OF THE FBI ======================================================================= HEARINGS before the COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS FIRST SESSION __________ JUNE 20 AND JULY 18, 2001 __________ Serial No. J-107-27 __________ Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 2002 ____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman EDWARD M. KENNEDY, Massachusetts ORRIN G. HATCH, Utah JOSEPH R. BIDEN, Jr., Delaware STROM THURMOND, South Carolina HERBERT KOHL, Wisconsin CHARLES E. GRASSLEY, Iowa DIANNE FEINSTEIN, California ARLEN SPECTER, Pennsylvania RUSSELL D. FEINGOLD, Wisconsin JON KYL, Arizona CHARLES E. SCHUMER, New York MIKE DeWINE, Ohio RICHARD J. DURBIN, Illinois JEFF SESSIONS, Alabama MARIA CANTWELL, Washington SAM BROWNBACK, Kansas JOHN EDWARDS, North Carolina MITCH McCONNELL, Kentucky Bruce A. Cohen, Majority Chief Counsel and Staff Director Sharon Prost, Minority Chief Counsel Makan Delrahim, Minority Staff Director C O N T E N T S ---------- WEDNESDAY, JUNE 20, 2001 STATEMENTS OF COMMITTEE MEMBERS Page Durbin, Hon. Richard J., a U.S. Senator from the State of Illinois....................................................... 16 Feingold, Hon. Russell D., a U.S. Senator from the State of Wisconsin...................................................... 13 Feinstein, Hon. Dianne, a U.S. Senator from the State of California..................................................... 8 Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa. 10 Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah...... 6 Kohl, Hon. Herbert, a U.S. Senator from the State of Wisconsin... 18 Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont. 1 McConnell, Hon. Mitch, a U.S. Senator from the State of Kentucky. 60 Schumer, Hon. Charles E., a U.S. Senator from the State of New York........................................................... 15 WITNESSES Bromwich, Michael R., former Inspector General, Department of Justice, Washington, D.C....................................... 29 Danforth, John C., former United States Senator from the State of Missouri, St. Louis, Missouri.................................. 19 Fine, Glenn A., Inspector General, Department of Justice, Washington, D.C................................................ 23 Rabkin, Norman J., Managing Director, Tax Administration and Justice Issues, General Accounting Office, Washington, D.C..... 39 Webster, William, Senior Partner, Milbank, Tweed, Hadley and McCoy, LLP, Washington, D.C.................................... 25 WEDNESDAY, JULY 18, 2001 STATEMENTS OF COMMITTEE MEMBERS Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa. 93 Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah...... 99 Kohl, Hon. Herbert, a U.S. Senator from the State of Wisconsin... 156 Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont. 63 WITNESSES Dies, Bob E., Assistant Director, Information Resources Division, Federal Bureau of Investigation, Washington, D.C............... 77 Kelly, Raymond W., Senior Managing Director, Bear Stearns, New York, New York and former Commissioner, U.S. Customs Service... 72 Kiernan, Patrick J., Supervisory Senior Resident Agent, Federal Bureau of Investigation, Washington, D.C....................... 133 Perry, Frank L., Supervisory Senior Resident Agent, Federal Bureau of Investigation, Washington, D.C....................... 128 Roberts, John E., Unit Chief, Office of Professional Responsibility, Federal Bureau of Investigation, Washington, D.C............................................................ 114 Senser, Kenneth H., Acting Deputy Assistant Director, Security Programs and Countermeasures, Federal Bureau of Investigation, Washington, D.C................................................ 83 Werner, John, Blue Sky Enterprises of North Carolina, Inc., Cary, North Carolina................................................. 121 ------ QUESTIONS AND ANSWERS Questions from Senators Leahy and McConnell for Senator Danforth. 144 Questions from Senator Leahy for Norman Rabkin................... 145 Responses of John C. Danforth to questions submitted by Senators Leahy and McConnell............................................ 146 Responses of Norman J. Rabkin to questions submitted by Senator Leahy.......................................................... 148 Responses of William H. Webster to questions submitted by Senator Leahy.......................................................... 149 SUBMISSIONS FOR THE RECORD Ashcroft, Hon. John, Attorney General of the United States, memorandum, June 20, 2001...................................... 152 Federal Bureau of Investigation: John E. Collingwood, Assistant Director, Office of Public and Congressional Affairs, letter, June 20, 2001............... 153 Louis J. Freeh, Director, memorandum, August 15, 2000........ 154 Hatch, Hon. Orrin G., Major Accomplishments of FBI Director Louis J. Freeh, 1993-2001, summary................................... 160 Walker, Samuel, Department of Criminal Justice, University of Nebraska at Omaha, Omaha, Nebraska, statement.................. 156 OVERSIGHT: RESTORING CONFIDENCE IN THE FBI ---------- WEDNESDAY, JUNE 20, 2001 U.S. Senate, Committee on the Judiciary, Washington, DC. The Committee met, pursuant to notice, at 1:05 p.m., in room SD-226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, Chairman of the Committee, presiding. Present: Senators Leahy, Feinstein, Feingold, Schumer, Durbin, Hatch, Grassley, and Sessions. OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE STATE OF VERMONT Chairman Leahy. Good afternoon. The Judiciary Committee will begin oversight hearings on the Federal Bureau of Investigation today. Oversight of the Department of Justice, of which the FBI is a part, is among this Committee's most important responsibilities, and there has never been a greater need for constructive oversight of the Bureau. The FBI has long been considered a crown jewel of law enforcement agencies. Unfortunately, today it has lost a lot of its earlier luster. Unfortunately, the image of the FBI in the minds of too many Americans is that this agency has become unmanageable, unaccountable and unreliable. Its much-vaunted independence has been transformed for some into an image of insular arrogance. I think this is unfortunate because of the extremely dedicated men and women in the Bureau, many who do work at the finest possible level. But we now have an historic window of opportunity to examine the present state of the FBI and help guide constructive reforms to make the Bureau more effective, better managed and more accountable. The current FBI director has announced his resignation. No successor has yet been named, and so this is a particularly appropriate time for us to take stock and think about how we should plan for the FBI in the 21st century, and also what guidance this Committee might give to the new director, whoever he or she may be. I would hope that these hearings will help the members of this Committee prepare for the new director's confirmation hearings. We had invited Director Freeh here today to thank him for his public service and to hear from him what his advice would be to his successor. I thought it would be appropriate to begin these hearings by acknowledging all the positive contributions he has made during his last 8 years. I also wanted to get his assessment of the problems that remain. When I spoke to him last week, he explained that he would not be able to attend. In recent years, we have seen case after case where the FBI has fallen short, and sometimes far short of the high standards of professionalism and integrity that we expect of our Nation's premier law enforcement agency. Last month, a veteran FBI agent was indicted for allegedly selling some of this country's most sensitive classified information to the Russians. According to the indictment, it is claimed spying went on for more than 15 years before the FBI detected the source of major security breaches and intelligence losses, despite numerous red flags that pointed to him. We learned from press reports today that just last week a support employee of the FBI in Las Vegas was arrested for allegedly selling sensitive investigative material to organized crime for over a year. In the Oklahoma City bombing case, the FBI revealed only a few days before the defendant was scheduled to be executed that it had violated its discovery obligations by failing to turn over thousands of pages of documents to the defense. While the trial judge later ruled that this violation did not undermine the defendant's conviction or death sentence, the trial judge noted that it was up to others to hold the FBI accountable for its conduct. Whatever questions the belated document production raised about the efficacy of the FBI, the trial judge concluded that the integrity of the adjudicative processes leading to the verdict and death penalty were sound. The judge said, ``There is a great deal of difference between an undisciplined organization and an organization that is not adequately controlled that can't keep track of its information. Those are not the questions here. We are not here for the purpose of trying the FBI.'' But the Oklahoma City bombing case is only the most recent one in which the FBI has violated its disclosure obligations. In 1995, a Subcommittee of the Judiciary Committee, under the leadership of Senators Specter and Kohl, held hearings on the tragic events at Ruby Ridge. The Subcommittee report, in which I joined, found that the FBI had willfully and repeatedly failed to abide by discovery rules and had irreparably damaged the Government's presentation of evidence at the criminal trial, causing a Federal judge to impose contempt sanctions. We have also seen cases such as those of Wen Ho Lee, Richard Jewell and Tom Stewart, in which the FBI improperly leaked information about an ongoing criminal investigation. More than that, these premature leaks about suspected criminals may focus attention on the wrong persons and allow the real culprits to escape detection. We saw this after the Centennial Olympic Park bombing in July 1996, during the Summer Olympic Games. The FBI was making it very clear to the country that they had the right person, had him under surveillance, and so and so forth, and then finally acknowledged a series of mistakes. They had the wrong person. By then, the person they eventually charged had fled the area. Tom Stewart was paid $6 million in damages last year as a result of the FBI wrongfully releasing damaging information that he was a criminal suspect. Wen Ho Lee's suit is still pending. Of course, we know the amounts of money paid following Ruby Ridge. Serious questions have been raised about the FBI's use of informants. There have been cases in which FBI agents have allegedly leaked confidential law enforcement information to criminal informants, and then the informants use that as a way to flee. In a case in Boston, I think one of the most egregious matters, the FBI allegedly allowed two innocent men to spend decades in prison for a murder that the FBI knew had been committed by one of its informants. In a case in New York, an FBI agent allegedly leaked information in a Mafia case about the imminent arrest of a confidential informant's son, who then fled. Everybody on this Committee knows the tremendous things that the FBI has done to protect and preserve the people of this country and to uphold our laws. But when we see these kinds of failures and mistakes, it is no wonder that public confidence has weakened in the FBI. According to a recent Gallup poll, only 38 percent of Americans have a great deal or quite a lot of confidence in the FBI. Twenty-three percent of those polled had very little or no confidence in the FBI. Confidence in State and local police is substantially higher, with about 60 percent of Americans having a great deal or a lot of confidence. An erosion of public trust threatens the FBI's ability to perform its mission. Think of the effect it will have on judges and juries and people who must rely on the FBI. Think of what happens when FBI agents perform forensic and other critical work for law enforcement and we cannot trust them. We have allocated to the FBI millions, even billions of dollars in increased funding because we wanted to have it become one of the world's leading crime-fighting agencies. Simply throwing money is not enough; we must do the oversight necessary. We are not here to find ways to tear down the FBI, but to find ways to restore confidence in it. There are many irresponsible critics of the FBI who promote their conspiracy theories on Internet web sites and in the popular media. Fortunately, the great majority of American citizens have too much sense to believe in this. The FBI is a national asset, and we should help it function effectively. We should not overlook the brave men and women, many of whom put their lives on the line for us all the time, from the FBI. We often forget the far greater number of cases where the FBI does its job quietly, professionally and without public fanfare, as we focus on those where they don't. Any constructive criticism of the FBI as an institution is not meant in any way to disparage its agents' sacrifices on our country's behalf. Our efforts must be, and I am confident will be bipartisan. During the past several weeks, Senators on both sides of the aisle have expressed their concern about the present state of the FBI. They have talked about various legislative proposals to address the problems they have identified, both Republicans and Democrats have. So it is not an issue of either political party; it is an issue of the future security of our country. We have to ask ourselves, who polices the FBI? Our focus is the mechanisms that currently exist for overseeing the activities of the FBI, and we should identify any gaps there. We have an outstanding panel here today. Most are known to each member of this Committee. They all have familiarity and expertise with different aspects of the oversight process, and we will hear from them because our goal is to restore the luster, the effectiveness and the professionalism of this law enforcement agency and make it a crown jewel of not only our law enforcement agencies but those throughout the world. [The prepared statement of Senator Leahy follows:] Statement of Hon. Patrick J. Leahy, a U.S. Senator from the State of Vermont Today, the Judiciary Committee begins oversight hearings on the Federal Bureau of Investigation. Oversight of the Department of Justice, of which the FBI is a part, is among this Committee's most important responsibilities. There has never been a greater need for constructive oversight of the FBI. The FBI has long been considered the crown jewel of law enforcement agencies. Today, it has lost some of its earlier luster. Unfortunately, the image of the FBI in the minds of too many Americans is that this agency has become unmanageable, unaccountable and unreliable. Its much vaunted independence has transformed, for some, into an image of insular arrogance. We now have an historic window of opportunity to examine the present state of the FBI and help guide constructive reforms to make the Bureau effective, better managed, more accountable. The current FBI director has announced his resignation. No successor has not yet been named. This is a particularly appropriate time for us to take stock and think about how we should plan for the FBI of the 21st century. I would hope that these hearings as will help the Members of this Committee prepare for the new Director's confirmation hearings as well as apprise the nominee of the challenges that confront us all. We had invited Director Freeh here today to thank him for his public service and to hear from him what his advice would be to his successor. I thought that it would be appropriate to begin these hearings by acknowledging all the positive contributions that he has made during the last eight years. I also wanted to get his assessment of the problems that remain. He explained to me when we spoke last week that he was unavailable due to illness in his family. We regret that family illness has prevented him from joining us here this afternoon, and wish his family good health. In recent years we have seen case after case where the FBI has fallen short--and sometimes far short--of the high standards of professionalism and integrity that we expect of our nation's premier law enforcement agency: Last month, a veteran FBI agent was indicted for allegedly selling some this country's most sensitive classified information to the Russians. According to the indictment, his alleged spying went on for more than 15 years before the FBI detected the source of major security breaches and intelligence losses, despite numerous ``red flags'' that pointed to the defendant. According to the public complaint and indictment in the case, these ``red flags'' included a 1986 wiretapped conversation between the defendant and a KGB officer in the Soviet embassy; the confession of a convicted American spy, Earl Pitts, who warned about another ``mole'' within the FBI and specifically named the defendant; the report of an FBI analyst, who also warned of a ``mole'' within the FBI, but whose warnings were not credited; and the defendant's own suspicious financial situation and use of FBI computers. We learned from press reports today that last week, a support employee of the FBI in Las Vegas was arrested for allegedly selling sensitive investigative material to organized crime for over a year. In the Oklahoma City bombing case, the FBI revealed only a few days before tile defendant was scheduled to be executed that it had violated its discovery obligations by failing to turn over thousands of pages of documents to the defense. While the trial judge later ruled that this violation did not undermine the defendant's conviction or death sentence, the trial--judge noted that it was tip to others to hold the FBI accountable for--its conduct. Whatever question the belated document production raised about the efficacy of the FBI, the trial judge concluded that the integrity of the adjudicative process leading to the verdict and death penalty were sound. He said: ``there is a great deal of difference between an undisciplined organization or organization that is not adequately controlled or that can't keep track of its information--those are not the questions here. We're not here for the purpose of trying the FBI.'' The Oklahoma City bombing case is only the most recent one in which the FBI has violated its disclosure obligations. In 1995, a Subcommittee of the Judiciary Committee, under the leadership of Senators Specter and Kohl, held hearings oil the tragic events at Ruby Ridge. The Subcommittee report, in which I joined, found that the FBI had ``willfully and repeatedly failed to abide by discovery rules,'' and had ``irreparably damaged the government's presentation of evidence at the criminal trial,'' causing a federal judge to impose contempt sanctions against the government. We have also seen cases such as those of Wen Ho Lee, Richard Jewell and Tom Stewart in which the FBI has improperly leaked information about an ongoing criminal investigation. This is a deeply serious issue that troubles all who are concerned with protecting the integrity of our justice system and the constitutional rights of our citizens. More than that, these premature leaks about suspected criminals may focus attention on the wrong persons and allow the real culprits to escape detection, to the detriment of our public safety and national security. For example, the criminal who committed the Centennial Olympic Park bombing in July 1996, during the Summer Olympic Games, remains at large. On occasion, these leaks result in substantial verdicts against the government for which we taxpayers foot the bill. Tom Stewart was paid S6 million in damages last year as a result of the FBI wrongfully releasing damaging information that he was a criminal suspect. Wen Ho Lee's lawsuit against the government is still pending. Serious questions have also been raised about the FBI's use of informants. There have been cases in which FBI agents have allegedly leaked confidential law enforcement information to criminal informants, which the informants then used to commit crimes or to flee. In a case in Boston, the FBI allegedly allowed two innocent men to spend decades in prison for a murder that the FBI knew had been committed by one of its informants. In a case in New York, an FBI agent allegedly leaked information in a Mafia case about the imminent arrest of the confidential informant's son, who then fled. This list of failures and mistakes has seriously weakened public confidence in the FBI. According to a recent Gallup poll, only 38 percent of Americans have ``a great deal'' or ``quite a lot'' of confidence in the FBI, and 23 percent of those polled had very little or no confidence ill the FBI. Confidence in state and local police is substantially higher, with about 60 percent of Americans having ``a great deal'' or ``quite a lot'' of confidence in these other law-- enforcement forces. This erosion of public trust threatens the FBI's ability to perform its mission. Citizens who mistrust the FBI will he less likely to come forward and report information about criminal activity. Judges and jurors will be less likely to believe the testimony of FBI witnesses. Even innocent or minor mistakes by the FBI in future cases may he perceived in a sinister light that is not warranted. Since FBI agents perform forensic and other critical work for many law enforcement agencies on the federal, state and local levels, the repercussions of this lapse in public confidence in the FBI has rippled far beyond just federal criminal cases. To many of us in Congress, this is a particularly troubling situation. For years, we have almost never said no when the FBI has asked us for new resources. We have allocated to the FBI millions of dollars in increased funding because we all wanted to see it remain the world's leading crime-fighting agency. It should be obvious now that simply throwing more money at the FBI is not the answer. The time has come when this Committee must exercise its oversight responsibilities and take a hard, thorough and nonpartisan look at the FBI to determine what has gone wrong and what can be done to fix things. But as we go about this process, there are several things that we need to bear in mind. First, our purpose in holding these hearings is to find ways to restore confidence in the FBI, not to tear it down. There are many irresponsible critics of the FBI who promote their conspiracy theories on Internet Web sites and in the popular media. Fortunately, the great majority of the American people have too much common sense than to believe them. The FBI is a vital national asset, and we need it to function effectively. Second, we must not overlook the fact that the FBI is staffed by many brave, dedicated men and women who risk their lives protecting the interests of this country and the safety of its citizens. While we are constantly reminded of the cases where things have gone wrong, we often forget the far greater number of cases where the FBI does its job quietly, professionally and without public fanfare. Any constructive criticism of the FBI as an institution is not meant in any way to disparage its agents' sacrifices on our country's behalf. Finally, our efforts must be, and I am confident will be, bipartisan. Over the past several weeks, senators on both sides of the aisle have expressed their concern about the present state of the FBI and discussed various legislative proposals to address the problems they have identified. This is not a Democratic or Republican issue. The future security of our country is far too important. The question at the center of our first hearing is this: Who polices the FBI? Our focus is the mechanisms that currently exist for overseeing the activities of the FBI, and we intend to identify any gaps and problems that currently exist in FBI oversight, determine the status of oversight investigations that are currently underway and begin to formulate ways that oversight can be improved. We are extremely fortunate to have with us an outstanding panel of distinguished witnesses who have familiarity and expertise with different aspects of the oversight process. I look forward to hearing from them about how this process works now and how we can make it work better to ensure that mistakes are acknowledged, constructive recommendations for reform are adopted, and intentional misconduct is adequately punished. Our goal is to restore the luster, the effectiveness and the professionalism of the crown jewel of law enforcement agencies. Chairman Leahy. I turn to my good friend, the senior Senator from Utah. STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE OF UTAH Senator Hatch. Thank you, Chairman Leahy. I would like to thank you for convening this hearing. The Federal Bureau of Investigation, of course, is the preeminent law enforcement agency in the world. It plays an essential role in our criminal justice system, and its ability to investigate crimes and find out the truth is unmatched anywhere in the world. There are millions of cases that the FBI has handled. I think we can always single out a few where it hasn't handled them very well, but that is probably true of, I believe, any organization. It may even be true of the U.S. Senate. I doubt it, but you never know. That said, there are serious issues concerning the operation of the FBI that must be addressed in a thoughtful, substantive, and proactive way. The American people rely on the protections provided by the fine men and women at the FBI and deserve the best possible performance that the FBI can deliver. Unquestionably, there is always room for improvement in the operation of the Bureau. The FBI, in conjunction with the Justice Department, simply must adhere to the highest standards of conduct in its investigations, in its use of informants, and in the fulfillment of its discovery obligations. It is important, however, to keep the current problems at the FBI in perspective. The men and women of the FBI are dedicated professionals to whom we owe a great debt of gratitude. They solve difficult and important cases everyday. Despite the serious problems that exist, the fact remains that the FBI solved the Oklahoma City bombing, the World Trade Center bombing, and the terrorists attacks in East Africa, among the literally hundreds of thousands of others that do not get the same profile in the press. I might add that we don't see headlines about some of these great things that they do because they are not emphasized. When was the last time you saw a headline where the FBI stopped terrorist organizations in very serious attempts to spread biological and other types of chemical weapons, weapons of mass destruction? But they have. Chairman Leahy has expressed a desire to do a series of oversight hearings on the FBI. I fully support him in this effort and commend him for his prompt attention to this matter. This Committee's oversight responsibilities are an important element of our system of constitutional checks and balances. I think it needs to be emphasized that, in my opinion, the focus of the oversight must be to improve the FBI and prepare it to be even more effective in the 21st century. Confidence in the FBI and in the criminal justice system generally is necessary for our system of governmental law enforcement to operate effectively. I believe we must vigorously and constructively examine the current managerial issues and focus on how to build a better FBI. In particular, I believe we should look critically at the culture of the FBI and how it is or is not effectively integrated with the Justice Department. I also believe that as we proceed through this essential oversight process, we must continue to be careful to respect the existence of ongoing criminal investigations, especially some of these high-profile, important investigations. We have to be very careful to respect the existence of inspector general investigations and, of course, all national security issues. Our Committee is best suited to a vigorous examination and debate of the policy issues involved and less equipped to perform the intensive factual examinations already underway in the open criminal and IG investigations. I look forward to working with Chairman Leahy and other members of this Committee to ensure thorough oversight of the Bureau, while continuing to be sensitive to the investigations and national security concerns of some of the active matters at the Bureau. In the end, I believe that any constructive oversight and development of future reforms at the FBI must address two key issues: one, a permanent oversight mechanism, and two, a mechanism through which outside experts can bring their expertise and objectivity to bear on the possible solutions to the problems that exist at the FBI. As to the first issue, there are various proposals, ranging from improvements to the Justice Department's Inspector General and its ability to perform oversight at the FBI, to the establishment of a separate inspector general exclusively for the FBI. I look forward to working with my colleagues in evaluating these ideas, although I generally favor working within the Justice Department structure. On the second issue, I have announced that I have been working with Senator Schumer to develop a bipartisan, expert blue-ribbon commission to do a strategic, thorough review of the FBI and make recommendations for its improvement. I commend Senator Schumer for his leadership on this issue and look forward to working with him and our distinguished chairman, Senator Leahy, to see that this legislation is enacted. The Schumer-Hatch legislation would create a commission which would be able to bring outside, objective expertise to bear on the issues that currently challenge the FBI. The inspector generals are great at doing factual investigations, but they are not designed to do strategic, long-term recommendations on these important policy and managerial issues. The blue-ribbon commission can fill that gap. It is bipartisan, objective, and focused upon solutions, not headlines. I welcome our witnesses either today or in the coming days to provide us with their views and recommendations on improving this particular legislation. I welcome all of the witnesses here today, good people, and I look forward to hearing from each and every one of you. This is a distinguished panel, and I will work with the Chairman to constructively pursue this important oversight project. Thank you, Mr. Chairman. Chairman Leahy. Thank you, Senator Hatch. We have had some good effects of just having the hearings. We have had one response from the Department of Justice and the FBI. The FBI has written a letter promising better cooperation with the GAO, one of the things I raised with them. The Attorney General has asked the Deputy Attorney General to conduct a comprehensive review of the FBI. Both of these things are welcome, and I will put that correspondence in the record. I turn to the distinguished Senator from California. STATEMENT OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM THE STATE OF CALIFORNIA Senator Feinstein. Thanks very much, Mr. Chairman, and let me join with the Ranking Member in thanking you for holding these hearings. Mr. Chairman, I believe that every member of this Committee, on the Republican side and on the Democratic side, has a deep and abiding respect for the Federal Bureau of Investigation. I think we have seen time after time, under the most difficult of circumstances, in major criminal events, the energy, the creativity and the experience really prove to enable an arrest to be made. I think it is a very important and critical institution in our Government. However, I have noticed a couple of things, and I am not going to read; I am just sort of going to talk about what I feel. I have seen in this very professional culture a kind of arrogance creep, and that arrogance puts itself forward in different situations. I went through the Ruby Ridge hearings, I went through the Waco hearings. I saw where the Washington aspect of the FBI can essentially duck in a major event and the SAC takes the responsibility for what might happen. So I recognize that there is a precarious balance. But I have seen a few things just in the popular press that have really concerned me, and let me just lay out, because everybody knows about this, the Monica Lewinsky case, where FBI agents held that young woman for a long period of time without allowing her to have counsel, and as a product she was terrified. That wasn't necessary. Why do it? That is the first instance. Another instance was in the Wen Ho Lee case. I think Mr. Bromwich has suggested that it is almost impossible to imagine that such unprecedented charges, the first ever criminal charges under the Atomic Energy Act, would have been made if Mr. Lee had not been previously targeted by the FBI. Then there was the reported conduct during the interrogation of Wen Ho Lee, when he was compared to the Rosenbergs, and the insinuation was that if he didn't cooperate he would go the way of the Rosenbergs. If, in fact, that happened, it is not professional conduct of well-trained law enforcement officers, I don't believe. I have also seen instances of leaking information, and I don't think that is professional conduct either. Let me give an example. During the World Trade Center case, it is my understanding that one of the defendants, without a lawyer, set up a meeting with prosecutors and FBI agents to negotiate for a lighter sentence. At that meeting, it is reported that the defendant incriminated another terrorist defendant, a person suspected of helping bomb our embassies in Kenya and Tanzania who was then under arrest and awaiting trial. The substance of that secret meeting was then leaked practically verbatim to the New York Times, which ran a lengthy article on October 22, 1998. So, in other words, the New York Times ran a story about one defendant's attempt to gain a lighter sentence by offering uncorroborated allegations against another defendant, and did so while that second defendant was still awaiting trial. So I think disclosures like that, whether it is a question of management, whether it is a question of constant in-service training, to me are wholly improper. That even hit closer to home last week when a Federal judge ruled that a Justice Department official--and I don't know whether this was FBI or Justice--may have leaked information in the Newark Star Ledger, in violation of Federal grand jury secrecy rules. I would like to just quickly read from that opinion. ``In the March 6, 2000, Star Ledger article, submitted by Senator Torricelli, information regarding the issuance of grand jury subpoenas to Committee fundraisers and donors is attributed to a senior Justice Department official, who was later described as speaking on the condition of anonymity. The attribution clearly satisfies the second prong of the Lance test''--that is the test for determining whether the movant has made a prime facie case for showing a violation of grand jury secrecy rules--``because officials in the Justice Department, of which the task force was a part, qualify as persons covered by Rule 6(e)'s secrecy provisions.'' Now, of course, we don't know who that senior official in the Justice Department is, but these again, I think, are things that show a kind of arrogance, if you will, creeping into how you handle individuals and how you handle case material. So I am going to ask some questions--all of you are very distinguished and very knowledgeable--about what you might do to handle that. Thanks, Mr. Chairman. Chairman Leahy. Thank you very much. Senator Grassley. STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE STATE OF IOWA Senator Grassley. ``Restoring Confidence in the FBI'' is a particularly good title for this hearing because confidence is what truly goes to the heart of the issue that we are here to discuss today. My father taught me the FBI could do no wrong, but I think confidence in the FBI, particularly the presumption of integrity, has been shaken. There is no question that for too long the FBI has broken faith with the American people. The time for meaningful and lasting reform is now, and it is up to us to help the FBI regain the trust and confidence of the American people. As an advocate for FBI reform, what often gets lost in my comments is the respect that we must all have, and I have, for the thousands of men and women who are serving their country well as FBI employees. But the FBI management is broken, and this does a real disservice to the hard-working agents on the street. Now, at long last, we have consensus for reform. Reform should be structured around three areas: accountability, jurisdiction and leadership; accountability through the enhancement of executive and congressional oversight, jurisdiction through the streamlining of the FBI's investigative responsibilities, and leadership through the selection of a new director with an appetite for reform and the wherewithal to accomplish it. The issue of accountability is the most important part of the reform effort. The FBI is buried under a mountain of evidence proving that it cannot police itself. The culture within the FBI is so entrenched that there can be no way of changing it without introducing an element of independent oversight. There are many options, but at this time I believe the option that we should choose is to enhance the existing structure of the DOJ Inspector General as the more viable course to take. This is a position that I have been advocating since the FBI Crime Lab investigation in 1997. I am hesitant to create an entirely new inspector general bureaucracy in the FBI that may only serve to isolate and insulate the Bureau further from the rest of the law enforcement community. It is exactly this notion of privilege and separateness that helps to feed the Bureau's culture of arrogance. With regard to jurisdiction, many of you may remember the Webster Commission. I am pleased that Judge Webster is here. One of the recommendations of that commission was to expand jurisdiction of the FBI and that the DEA and the ATF should be folded into the FBI. Here today, sitting in the wake of the Hanssen and McVeigh fiascoes, it seems to me that is not a viable option. It couldn't be clearer that the FBI has simply become too unwieldy to be effectively managed. The answer to the problem at the Bureau will not be found in increasing its jurisdiction, nor will the concerns of the American people be addressed by creating a de facto national police force. The history of congressional response to the FBI's problems has usually been that the FBI ends up with a bigger budget, more program jurisdiction, and the director walks out of this room with a nice pat on the back. I believe that the FBI will become a more efficient and accountable organization through the narrowing of its investigative focus. Finally, with an opening for the Director of the FBI, this gives us a real opportunity. President Bush will be naming that new director, and that person needs to make changes. This person needs to change the kind of culture that places publicity and image before basics and fundamentals. This person needs to change the kind of culture that holds press conferences in high-profile cases before all the facts are in. We have seen the consequences of this approach in cases such as Richard Jewell, Wen Ho Lee, and the TWA 800 investigation. The new director needs to change the kind of culture that suppresses dissent and discourages independent oversight. Director Freeh once stated the following with regard to the FBI: ``We are potentially the most dangerous agency in the country if we are not scrutinized carefully.'' I agree, so let us now get down to the business of helping the FBI and its new director regain trust and confidence from the American people. [The prepared statement of Senator Grassley follows:] Statement of Hon. Charles E. Grassley, a U.S. Senator from the State of Iowa Mr. Chairman, Senator Hatch, colleagues, and distinguished guests; today, we highlight the issue of FBI oversight. As most of you know, I have been a long-time advocate of the need for enhanced FBI oversight and I am very pleased to be able to address this distinguished group on this vitally important issue. I would like to begin by saying that the title of today's hearing, ``Restoring Confidence in the FBI'', is particularly appropriate because the word ``confidence'' is what truly goes to the heart of the problem we are here to discuss today. All of the public institutions in this country have a moral contract with the American people. This contract--deceptively simple in design balances the trust of the American people with the performance of those entrusted to their service. I grew up--the son of a farmer--with a whole generation of people believing the FBI could do no wrong. My father taught me to be proud of the FBI. But now that confidence--that presumption of integrity--has been shaken. Let there be no question, for far too long, the FBI has broken faith with the American people. When our public servants fail in their performance, then they lose the trust and confidence of the American people--and the moral contract is broken. The time for meaningful and lasting reform is now. It is up to us to rewrite and restore that moral contract, and to help the FBI regain the trust and confidence of the American people. As an ardent advocate of the FBI reform, what often gets lost in my comments is the respect that I have for the thousands of men and women serving their country as FBI employees. My criticisms should in no way minimize the great sacrifices that our honest and hardworking FBI agent and support personnel make every day for our country. But these men and women--as do the American people--need and deserve an organization that has integrity and credibility. The FBI management system they are working within is broken, and this does a real disservice to the hardworking agents on the street. For too long the FBI has grown essentially unchecked by any meaningful oversight. The result has been the development of a pervasive atmosphere of arrogance. This cloud of arrogance permeates the every day activities of the Bureau and shows contempt for any public or private entity that dares to question its motives or performance. And, perhaps more importantly, this cloud of arrogance also shows contempt for those within the FBI organization who are brave enough to sound the alarm. I sponsored the Whistleblower Protection Act in 1989, yet to this day, the FBI has failed to adequately protect FBI agents who speak up about management problems. Now, at long last, it appears we have a consensus for reform. We can agree, at least, something must be done. I would like to suggest that the plan for reform should be structured around three areas: Accountability, Jurisdiction, and Leadership. Accountability, through the enhancement of executive and congressional branch oversight; Jurisdiction, through the streamlining of the FBI's investigative responsibilities; and Leadership, through the selection of a new Director with an appetite for reform and the wherewithal to accomplish it. First, I would like to address the important issue of accountability. Here, I believe, is the most vital part of the reform effort. Let it be understood, the current system involving the FBI's Office of Professional Responsibility cannot be allowed to continue as is. The FBI is buried under a mountain of evidence proving that it cannot police itself. The culture within the Bureau is to stifle dissent and to marginalize those who would expose waste, fraud and abuse. Senior management places a higher value on maintaining image rather than rooting out wrong. This attitude is so entrenched in the culture of the FBI that there can be no way of changing it without introducing an element of independent oversight. The two most prominent options being discussed are to either create an independent Inspector General of the FBI, or to enhance the existing powers of the Inspector General of the Department of Justice. Either of these options would bring a much-needed element of oversight and accountability to the FBI that is not there today. But, at this time, I would argue that the option to enhance the existing structure of the DOJ Inspector General, a position I've taken since the FBI Crime-Lab investigations in 1997, is the more viable course to take for the following reasons. First, there is already a structure in place at DOJ. While some have argued that the size and importance of the FBI and the sensitivity of their operation calls for a separate IG, I would argue differently. As part of the Department of Justice, the FBI should be treated as such, and should not be accorded any special treatment. And, I am hesitant to create an entirely new bureaucracy that may only serve to isolate and insulate the Bureau further from the rest of the federal law enforcement community. It is exactly this notion of privilege and separateness that helps to feed the Bureau's culture of arrogance. In addition to the enhancement of the powers of the DOJ IG, I would advocate some additional provisions, such as: the addition of whistleblower protection provisions; clarification on the provisions for agency, departmental, and congressional notification; and clarification on the provisions for agency and/or departmental interference in IG investigations. Further, Congress needs to better fulfill its constitutional responsibility of oversight. One way this could be improved is through the creation of a Subcommittee within the Committee on the Judiciary that would be directly responsible for FBI oversight and would complement the reporting structure already in place. There has also been a proposal for an, ``FBI Review Commission'', which would undertake a comprehensive review of the FBI in its entirety and make recommendations for congressional action. I had an opportunity to see a draft outline of this Commission's mandate and I was very impressed. But I have to express some reservations about the idea for the following reasons. First, as I mentioned earlier, the time for reform is now. We already know what is wrong with the Bureau. If we wait eighteen months for a commission to make recommendations, we may very well lose the momentum for reform that we have right now. In this age of 24-hour news cycles, the public will soon lose their appetite for FBI reform, Congress will move on to other issues, and the FBI will continue to operate as before. We cannot afford to wait to make these important changes. Secondly, if past results are any guarantee of future performance, the history of FBI commissions don't inspire much confidence in their ability to effect change. As a matter of fact, the end result has usually been that the FBI ends up with a bigger budget, more jurisdiction, and the Director walks out with a nice pat on the back. However, in order to take advantage of some of the good ideas presented within this proposal, perhaps it would make sense to allow the new Inspector General entity to follow through on this study, and conduct a comprehensive review of the FBI as part of their initial directive. Next, I would like to address the issue of FBI jurisdiction. As many of you may remember, the Webster Commission on the Advancement of Federal Law Enforcement, convened in part due to Waco and Ruby Ridge, actually recommended the expansion of the FBI--that the DEA and the ATF should be folded into the Bureau. Here today, sitting in the wake of the Hanssen and McVeigh fiascos, I think even Judge Webster would have to admit the folly of that notion. It could not be any clearer that the FBI has become too big and too unwieldy to be effectively managed. The answer to the problems within the FBI will not be found in increasing their jurisdiction; nor will the concerns of the American people be assuaged by creating a de facto national police force. The expansionist philosophy of the FBI only serves to feed their culture of arrogance. To be sure, even though the FBI is already overburdened with jurisdiction, it is fiercely protective of its current turf, while continuing to move like the Pac Man into new areas. Yet, it has been proven time and again that the FBI cannot maintain effective partnerships with our public and private sectors. It doesn't need more jurisdiction, it needs less. Let the Bureau continue to operate in its core areas such as counter-intelligence, counter-terrorism, and organized crime. But, I believe the FBI will become a more efficient and accountable organization through narrowing its investigative focus and sharing its disparate jurisdictional responsibilities with other law enforcement agencies. Finally, I want to address the matter of leadership. With an opening for Director of the FBI comes an opportunity. President Bush will be naming a new Director, and that person needs to make changes. I've sent a letter to the President, asking him to pick a new Director who understands the problems with the FBI management culture and is committed to restoring public confidence. This person needs to change the kind of culture that places publicity and image before basics and fundamentals. This person needs to change the kind of culture that holds press conferences in high-profile cases before the investigation is complete and all the facts in. We've seen the consequence of this approach in celebrated cases such as with Richard Jewell, Wen Ho Lee, and the TWA 800 investigation. The American people deserve an FBI that doesn't make these kinds of mistakes. But more importantly, the American people deserve an agency that is honest and forthright about their errors. So, finally, our new Director needs to change the kind of culture that suppresses dissent and discourages independent oversight. Director Freeh once stated the following with regard to the FBI; ``We are potentially the most dangerous agency in the country if we are not scrutinized carefully.'' I couldn't agree more. So, let us now get down to the business of helping the FBI, and its next Director, regain the trust and confidence of the American people. Chairman Leahy. I thank the Senator from Iowa, and would note that he has been very consistent in looking at these issues over the years and has been very constructive in his criticism. The Senator from Wisconsin, Senator Feingold. STATEMENT OF HON. RUSSELL D. FEINGOLD, A U.S. SENATOR FROM THE STATE OF WISCONSIN Senator Feingold. Thank you, Mr. Chairman, for calling this hearing. I would ask that my full statement be placed in the record. Chairman Leahy. Without objection. Senator Feingold. The issue of Federal Bureau of Investigation oversight is timely because of obviously some specific recent cases, but it would be significant and welcome at any time as an opportunity to examine the role of the FBI in the relationship of the U.S. Government to the American people. Let me join in the praise that others have indicated for so much of what the FBI does. I recently ran into a number of FBI people at the Milwaukee airport and could tell that it was a tough time for them, and expressed my positive feelings about many things that it does. But the most immediate reasons for this hearing are a series of setbacks for the FBI in recent years. Some of the others have been listed, but I just have to mention again the missing McVeigh documents, the Hanssen case, the Wen Ho Lee case, the years-late production of the tapes in the Birmingham bombing, the problems in the FBI Lab, Richard Jewell and the Olympic bombing, and charges of racial bias in promotions at the FBI are some that come to mind. Director Freeh is understandably not here due to important personal concerns. I wish he were here because he is best equipped to illuminate our examination of FBI oversight. I hope that his eventual successor is here or at least listening to this hearing because his successor will be in the best position to help us further determine what changes in FBI oversight are needed and to lead the FBI in embracing these changes. For today, the immediate objective is to understand the state of oversight of the FBI and to determine what changes may be necessary in the oversight process. In particular, I would like to hear from the witnesses on a few matters. What is the current range of oversight mechanisms to which the FBI is subject and the status of the various inquiries now underway? How did it come to pass that the FBI and DEA are not as immediately subject to the scrutiny of the Department of Justice Inspector General, as are other agencies and offices at the Justice Department? What is the rationale for that arrangement and is it justified? Is it fair to assume that any of the recent troubles at the FBI may have been caused by deficiencies in oversight of the Bureau? Is there anything unique to the history, culture and mission of the FBI that makes it less accommodating of vigorous oversight? Finally, how can the Senate be most constructive in carrying out its oversight responsibilities with respect to the FBI? I welcome the witnesses and look forward to their testimony. Thank you, Mr. Chairman. [The prepared statement of Senator Feingold follows:] Statement Of Hon. Russell D. Feingold, a U.S. Senator from the State of Wisconsin Mr. Chairman. Thank you for calling this hearing today. The issue of Federal Bureau of Investigation oversight is timely because of some specific recent cases, but it would be significant and welcome at any time as an opportunity to examine the role of the FBI in the relationship of the United States government to the American people. The most immediate reasons for this hearing are a series of setbacks for the FBI in recent years--we have heard the list: the missing McVeigh documents, the Hanssen case, Los Alamos and the Wen Ho Lee case, the years-late production of the tapes in the Birmingham bombing, problems in the FBI lab, Richard Jewell and the Olympic bombing, charges of racial bias in promotions at the FBI. It's a familiar, if troubling, list, but also familiar are the storied successes throughout the history of the FBI, from the days of Prohibition era gangsters and bank robbers to the pursuit of the agents of our adversaries in the Cold War, to the great drug busts of recent decades and the continuing effort to contain organized crime and the threat of international terrorism. And there can be no question that the FBI remains an outstanding and effective law enforcement agency. Maybe the greatest triumph of the FBI has been the terrorist attacks that never happened. While the FBI over the years has had its lapses in respecting the civil liberties of some Americans, perhaps the greatest achievement of the Bureau has been that it has done so well in solving crime and foiling conspiracies while operating in a nation that so respects individual liberty. So there is something that at first seems incongruous about the recent problems we have heard, and the FBI we grew up admiring. But perhaps the admiration, even awe, that many have felt toward the FBI is related to the inadequacy that may exist in FBI oversight. Perhaps it accounts for the uniquely limited oversight regime to which the FBI is subject. Perhaps it accounts for the reality that the FBI apparently is seen by most of the public and perhaps some in the Bureau itself, as having an identity virtually separate from the Department of Justice of which it is a part, and remote from the authority of the Attorney General, to which the FBI Director and all FBI personnel ultimately report. Perhaps it is reflected in the occasional hesitance of Congress and even Presidents to question the actions of the FBI and its leaders. Director Freeh understandably is not here today, due to important personal concerns. I wish he were here, because he is best equipped to illuminate our examination of FBI oversight. I hope that his eventual successor is here, or least listening to this hearing, because his successor will be in the best position to help us further determine what changes in FBI oversight are needed, and to lead the FBI in embracing those changes. But for today, the immediate objective is to understand the state of oversight of the FBI and to determine what changes may be necessary in the oversight process. In particular, I want to hear from the witnesses about a few questions: what is the current range of oversight mechanisms to which the FBI is subject and the status of the various inquiries now under way; how did it come to pass that the FBI and DEA are not as immediately subject to the scrutiny of the Department of Justice Inspector General as are other agencies and offices at the Justice Department. What is the rationale for that arrangement? Is it justified? is it fair to assume that any of the recent troubles at the FBI may have been caused by deficiencies in oversight of the Bureau? is there anything unique to the history, culture and mission of the FBI that make it less accommodating of vigorous oversight? how can the Senate be most constructive in carrying out its oversight responsibilities with respect to the FBI? I welcome our witnesses and look forward to their testimony. I may have further questions for them individually. Thank you Mr. Chairman. Chairman Leahy. Thank you. The Senator from New York. STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR FROM THE STATE OF NEW YORK Senator Schumer. Thank you, Mr. Chairman. I want to thank you for your quick and immediate leadership in holding this important hearing. I want to begin by emphasizing that I consider myself a longtime supporter of the FBI. It is the No. 1 law enforcement agency in the world. We have to make sure it stays that way. I have also been a supporter of my fellow New Yorker, Director Freeh. He has done an excellent job in many areas, particularly in pursuing terrorist cases and instilling integrity at all levels of the Bureau. But, Mr. Chairman, sometimes you owe it to a friend to look him in the eye and tell him the hard truth, and that truth is this: the FBI has made mistake after mistake after mistake. And many of us are wondering now if those are random mistakes or there is not something deeper. From Richard Jewell to Wen Ho Lee, from the Crime Lab to the McVeigh documents, from rogue informants to Robert Hanssen, serious questions are now dogging the FBI. Just this morning, there are reports that an FBI security expert sold classified lists of witnesses and informants to the mob and other targets of criminal investigation in my State of New York. There have been several examinations of some of the incidents I have mentioned over the last few years, and each has shed light on a particular episode and spawned particular suggestions, but none have looked at the whole picture. It is high time to step back and take a comprehensive look at the Bureau from top to bottom. Has the FBI's culture become too insular and unresponsive to warning signs? Has the phenomenal growth of recent years made it even harder to bring about change? Whatever it is, the public is watching and they are beginning not to like what they see. Poll after poll shows confidence in the FBI plummeting, and that is dangerous for an agency that needs the cooperation of average citizens, that needs to recruit informants, that needs to persuade judges and juries in court, an agency we all need to be in tip-top shape. So, Mr. Chairman, in order to give the FBI the thorough and systematic review that it badly needs, Senator Hatch and I are introducing the FBI Reform Commission Act today. The bill will set up a blue-ribbon commission of law enforcement experts to look at all aspects of the FBI. It will determine whether all the FBI really needs at this point is a tune-up or, as many fear, a more fundamental overhaul. This kind of deep and thorough oversight is very much needed. We don't want to look at each individual case, except to see whether they form a pattern of why things went wrong. Congress can do very good oversight into specific issues, but this kind of thorough, top-to-bottom review can only be done by a group of experts who devote their full time to it. You know, Mr. Chairman, when one reaches a certain age, your physician will tell you, instead of the annual checkup, it is time to look at you inside out, top to bottom, and see what might be wrong. It is now that time for the FBI. So, specifically, the blue-ribbon commission will function outside the FBI and will analyze the way the FBI monitors itself, whether outside oversight is needed, how it manages information and conducts investigations, and other issues. The commission will then recommend to the President and the Congress systematic reforms that are necessary. They will be appointees of the President and of the Majority and Minority Leaders of both Houses. As longtime friends and supporters of the FBI, Senator Hatch and I believe this is the best way for the Bureau to puts problems behind it and begin rebuilding the public trust. Every bureaucracy needs an in-depth, critical examination every few decades, and that moment has arrived for the FBI. In the end, finding and fixing the problems at the FBI won't just leave the Bureau better off, it will leave all of us better off, and we have to begin that process now. Chairman Leahy. I thank the Senator from New York. When he mentioned those of a certain age, I leaned over to Senator Hatch and I said I am not sure which one of us he is referring to, but I know it couldn't be Senator Hatch because he looks much younger. The Senator from Illinois. STATEMENT OF HON. RICHARD J. DURBIN, A U.S. SENATOR FROM THE STATE OF ILLINOIS Senator Durbin. Thank you very much, Mr. Chairman, and thanks for scheduling this hearing. It is timely, and I am glad we have a chance to consider the serious issue before us. Though not altogether pleasant, it is an important assignment. People have referred to the public opinion polls, and they are pretty clear that an organization that enjoyed universal respect has now come under fire and Americans have many questions about the leadership at the FBI. That shouldn't take away from the thousands of special agents and other staff people who literally get up every day, put on a badge and put their lives on the line for America, fighting terrorism and combatting drugs and organized crime, and the long agenda of responsibilities we have given to the Federal Bureau of Investigation. Yet, despite the Bureau's many accomplishments, we continue to see a litany of embarrassing blunders. They have been recounted over and over in these introductions--the loss of 4,000 pages of critical material for the McVeigh trial, the situation involving Wen Ho Lee, the whole question involving Richard Jewell at the 1996 Atlanta Olympic Park bombing, the information that has come out from Boston involving FBI agents withholding informant reports that would have aided the defense of Joseph Salvati, who spent 33 years in prison for the 1965 murder of Edward Deagan, and then on February 20 of this year the chilling disclosure that one of its own, Agent Robert Hanssen, had operated undetected within the agency as a Soviet mole for 15 years, or even longer. Are these merely coincidences? Some have noted they are only a handful of instances in an agency which deals with thousands of challenges every single day. I think that I would like to speak to the fact that we collectively hope that it is not just a matter of time before another incident of ineptness percolates to the surface, calling into serious doubt the agency's adherence to values that Director Freeh recounted when he was before this Committee a few years back. The cover story of a recent U.S. News and World Report asks squarely ``What Is Wrong with the FBI: Cracking the Case.'' It is time we get that question answered and we get our Nation's No. 1 investigative force's house back in order. What is so troubling is that the issues that we are addressing today didn't just materialize. Take a look at two headlines from Time magazine: ``The weight of the evidence: the case against McVeigh is strong, but the mess at the FBI and the babble of witnesses make it vulnerable''; and the second one: ``The FBI: the gang that couldn't examine straight.'' The importance of these two headlines is the fact that they appeared in Time magazine on April 28, 1997, 4 years before the disclosures which were of such great embarrassment to the FBI and so startling to the American people. Those headlines 4 years ago really could have been headlines leading to today's hearing. We have known for a long time that there are things that need to be changed in the FBI. I think we all understand the legacy of J. Edgar Hoover. It was a legacy which exulted independence from political oversight. In fact, Mr. Hoover's tactics have been well documented when it came to dealing with Congress. He held Congress at bay because of the information that he had collected, but in holding the political officials at bay, he also held at bay political accountability, and that is why we are here today. This morning, Senator Arlen Specter and I introduced legislation to create a separate inspector general for the FBI. I notice that one of the witnesses here has characterized it a little differently than the way we wrote it. This inspector general would be under the supervision of the Attorney General, like the Inspector General for the rest of the Department of Justice. What we have found in our investigation is that the Hoover legacy and the current leaders at the FBI have created a fortress mentality that has really held away the type of oversight that we demand of every Federal agency. I don't believe that we can assault that fortress without putting someone behind the gates. That is an inspector general working full-time, as we have an inspector general in 57 other Federal agencies. If the model doesn't work here, how is it working in other agencies? I think it is an important question we need to ask and answer. I applaud the idea of a commission to look in depth at many different things that might be considered, but it is an ad hoc approach which will give us guidance. What we need is a person on the ground, in the agency, accountable to the Attorney General as well as to Congress, reporting on ways to make this agency more effective. Thank you, Mr. Chairman. Chairman Leahy. Thank you very much. I don't see any other Senators here. I will put a statement by Senator Kohl in the record. [The prepared statement of Senator Kohl follows:] Statement of Hon. Herbert Kohl, a U.S. Senator from the State of Wisconsin A little less than six years ago, the Director of the Federal Bureau of Investigation appeared before the Judiciary Committee to address concerns about the F.B.I.'s actions during Ruby Ridge. I was the ranking Democrat on that important investigation. During the course of that inquiry, we found widespread problems within the F.B.I. and made a number of suggestions for reform ranging from the way the F.B.I. trains its snipers to the way it handles documents. In light of the recent problems with the McVeigh prosecution, one section of the report has immediate relevance: ``The Subcommittee is concerned that, even today, officials of the FBI may not be fully cognizant of their constitutional duty and statutory obligations with regard to criminal discovery. . . .We expect the FBI to improve the education of its agents in this regard. ``The Subcommittee asks the FBI to institute programs to improve the quality of its response to criminal discovery demands, including attention to the organization, coordination and monitoring of discovery requests and responses.'' We should be very concerned that the F.B.I. has not succeeded in addressing all of the concerns raised in the report almost six years ago. The problems were serious then, and the mishandling of documents in the McVeigh case demonstrates a continuing and perplexing lack of organization. What else is going on at the F.B.I.? How many other concerns have been given short shrift? Of course, this hearing concerns much more than the F.B.I.'s ability to comply with their criminal discovery responsibilities. None of those issues, however, is more important to public confidence in the F.B.I. than the agency's capacity to observe the most basic rules of criminal procedure. This problem potentially infects every federal criminal case. As we learned during the Ruby Ridge hearings, overseeing and investigating the F.B.I. is not easy. But when done well, it can be productive and effective. The first principle of F.B.I. oversight must be that our goal is to improve and respect this vital agency--not to attack or destroy it. F.B.I. agents are dedicated and hardworking individuals who have a lot to be proud of. I look forward to what can be done to instill public confidence in the Bureau. Chairman Leahy. We will leave the record open for statements by any other members of the Committee who couldn't be here. Gentlemen, I thank you for being patient. This is matter of some concern; I think the fact that, again, we have heard from people on both sides of the aisle who want to look into this. We are fortunate to have Senator John Danforth here. He is currently a senior partner at the St. Louis law firm of Bryan Cave. Senator Danforth was asked by former Attorney General Reno to lead an investigation into the events at the Branch Davidian compound in Waco. Last July, he issued an interim report on that. On a personal note, I would say that I had the pleasure of serving with Senator Danforth for 18 years here in the Senate. We joined hands on a number of issues, traveled together, did a number of things together, and he is one of the most respected people we have had in the Senate in either party. Glenn Fine is the current Inspector General of the Department of Justice. He was appointed to that office in December of last year. He has been with the IG's office since 1995. Attorney General Ashcroft has commissioned Inspector General Fine to conduct investigations on the reasons behind the FBI's belated document production in the Oklahoma City bombing case and whether the FBI knew or should have known about alleged spy Robert Hanssen's espionage activities. I have discussed both of those issues with the Attorney General. I know of his concern and I know of his respect for Mr. Fine, which we join in. Our next witness would then be Judge William Webster. Judge Webster is currently a senior partner with the Washington law firm of Millbank Tweed. Judge Webster has a distinguished record of public service. He was a member of the Eighth Circuit Court of Appeals. He was director of both the FBI and the CIA, I think the only person who has held both of those positions. Most recently, in the wake of the apprehension of Robert Hanssen, Attorney General Ashcroft and FBI Director Freeh asked Judge Webster to chair a blue-ribbon commission to examine the Bureau's internal security procedures. Judge Webster is well known to all here in the Senate and has high regard and respect from all members of the Senate. Michael Bromwich is currently a litigation partner in the Washington and New York law offices of Fried Frank. Mr. Bromwich was Inspector General of the Department of Justice from 1994 to 1999. During his tenure, he conducted numerous investigations on topics ranging from the FBI Crime Lab issues that we have talked about earlier today, to the Aldrich Ames affair, to the handling of classified documents in the campaign finance investigation. Our final witness is Mr. Norman Rabkin, who is the Managing Director of the General Accounting Office's Office of Special Investigations. He has on several occasions conducted investigations into FBI activities. Senator Danforth, would you lead off, please. STATEMENT OF JOHN C. DANFORTH, FORMER U.S. SENATOR FROM THE STATE OF MISSOURI Mr. Danforth. Mr. Chairman, thank you very much. Mr. Chairman, I was special counsel in the Waco investigation, and to me one of the lessons of the Waco investigation is the importance of candor and openness in the FBI, in Government in general, and the ability to admit mistakes, when people make mistakes or know of mistakes, and to come forward and be able to talk about them and correct those mistakes. The situation before I became special counsel was this: in the summer of 1999 Time magazine had a poll and the poll said that 61 percent of the American people believed that the FBI started the fire at Waco. Now, when 61 percent of the American people believe such a dire thing as that Federal agents started a fire that killed some 80 people, that is a real breakdown in public confidence in their Government. That is why I believed that the Waco investigation was so important. We looked into some very dark charges that had been made against the FBI, that the FBI started the fire, that FBI agents fired guns into the complex when the building was on fire to pin people into it. In our investigation, which lasted 14 months and cost $17 million, we proved with absolute certainty that these dark thoughts about the FBI were definitely not true. There was no real evidence to support these charges, and there was overwhelming evidence to prove the negative that they didn't happen. So the question is how could it be that 61 percent of the people of our country believed that the FBI did these things? What happened was this: right after the tragedy at Waco, that same afternoon the FBI in its statement said that no pyrotechnic tear gas devices were used at Waco that day. Subsequently, that same statement was repeated a number of times. It was repeated in testimony before the House by both Attorney General Reno and then-FBI Director Sessions. Sitting in the room behind both General Reno and Director Sessions was the commander of the Hostage Rescue Team, and this person was the person who gave the instructions to fire pyrotechnics that morning and he did not correct the witnesses. Now, in fact, the use of pyrotechnics that morning had nothing to do with the start of the fire, absolutely nothing. The pyrotechnics were fired 4 hours before the fire broke out and they were aimed at a concrete structure 75 feet away from the complex. So it had no effect at all, but a misstatement was made and nobody corrected it, including the person who gave the command to use the pyrotechnics. And it was not known until more than 6 years after the tragedy that pyrotechnics had been used. Then, after it became known, of course, the public reaction, or a lot of the public said, well, we have been fooled, we have been lied to; something happened and we didn't know about it. They suspected the worst. That was the story of Waco, and that is what triggered the breakdown in public confidence and that is what led to this very extensive investigation that we conducted. I believe that there was a lack of candor on the part of the FBI and on the part of the Justice Department over a period of 6 years. I don't think it was a cover-up of a bad act. I think it was basically trying to cover embarrassment. Somebody made a mistake in a statement, and mistakes aren't permitted and let's not admit to mistakes, so let's not say anything to set the record straight. I believe that really is the lesson of Waco. I have in my written testimony, and I could provide for the Committee more examples of during the course of the investigation where the FBI was less than forthcoming in providing information to my investigators. That is true, but I think it is also a sign of the more general problem, and that is that there is a lack of openness and a lack of willingness to say, well, we are a Bureau that makes mistakes and therefore we don't want anybody to look at us. This is not a uniform position within the Bureau. Director Freeh was very forthcoming in helping us, and a number of agents were. The Hostage Rescue Team that participated in the events of April 1993 were very open in describing exactly what happened. I think it is important to recognize that we can't tar everybody with a brush here. But there certainly were people within the FBI who were less than forthcoming, and it complicated our investigation and it was part of a general problem. Now, Mr. Chairman, my red light is on and I promise you I won't speak for more than a minute, but I do want to say this as we are looking at the FBI. If I am correct that the problem is a lack of willingness to correct mistakes and be open about mistakes, it is very important that we as a country do not create a mind set where mistakes are just intolerable and where they are so unforgivable that the natural reaction is I am not going to let you know about them. I think that is what happened in the Waco case. I think it happened right after the disaster and I think it happened during our investigation, where people did not want to come absolutely clean and where they wanted to hide the ball because they were afraid of being humiliated. I really believe it is important that we make a clear distinction between mistakes which all of us are going to make and we encourage people to come clean, and the real expose material which is the subject matter of a lot of hearings and a lot of investigative reporting. The FBI did not do anything that was dark at Waco, but some of its people were afraid to come forward with the truth for fear of embarrassment, and that is what created the breakdown in public confidence. [The prepared statement of Mr. Danforth follows:] Statement of John C. Danforth, former U.S. Senator from the State of Missouri After 14 months of exhaustive investigation, costing the taxpayers $17 million, I am absolutely convinced that the FBI had nothing to hide about Waco. The FBI did not do the dark things some people suspected. Agents did not cause the fire that killed scores of Branch Davidians. Agents did not fire guns into the complex. The evidence exonerating the FBI is overwhelming on these points. Evidence implicating the FBI is non-existent. Yet, some FBI personnel and some Justice Department lawyers were not forthcoming in reporting the events at Waco, and some FBI personnel were not cooperative with my investigation. Lack of openness and candor caused and then complicated my investigation. And, far more important, lack of openness and candor undermined public confidence in government. On August 26, 1999, a Time magazine poll indicated that 61 percent of the public believed that federal law enforcement officials started the fire at Waco. That is what I mean by undermined public confidence in government. Absolutely no evidence supported this terrible belief. Its principal cause was lack of openness and candor by some people in the Justice Department and some people in the FBI. Beginning on the day of the fire, the FBI and the Justice Department insisted that no pyrotechnic tear gas rounds had been fired at Waco. This was an innocent but mistaken assertion. An FBI agent had fired three pyrotechnic rounds at a target 75 feet away from the Branch Davidian complex, four hours before the fire started. The firing of pyrotechnic tear gas rounds had no bearing on the tragedy that followed. Some FBI and Justice Department officials who knew of the pyrotechnic rounds were not forthcoming in setting the record straight. Had they come forward with the truth, there would have been no cause for believing there was any implication with the fire. Instead, when the public learned that pyrotechnics had been used and not disclosed, 61 percent assumed the worst. My thoughts about why people who knew the truth didn't tell the truth are speculative, but I would bet a lot that I'm correct. I think that the motive is not to hide evil deeds, but to avoid embarrassment. A long standing value of the FBI is not to embarrass the FBI. Mistakes are embarrassing, so, rather than admit them, cover them up. Late in April, 1993, the Hostage Rescue Team commander who had authorized the use of pyrotechnics sat silently through the Congressional testimony of Attorney General Reno and FBI Director Sessions without correcting their mistaken statements suggesting that pyrotechnics had not been used. To have corrected the FBI's previous denial about pyrotechnics might have embarrassed the Bureau. In 1996, an FBI attorney neglected to transmit information about the use of pyrotechnics to a Justice Department attorney. I think that her negligence was an embarrassment to her, perhaps something that would jeopardize her career. So she began lying about her negligence to my investigators. The irony is that attempts to cover up embarrassment cause embarrassment to the Bureau, and destroy public confidence as well. It is important to keep things in perspective. Every instance of failure to produce records isn't a cover-up or an intentional effort to avoid embarrassment. In the Waco investigation, we examined 2.3 million pages of documents. In major cases such as Ruby Ridge, Waco and Oklahoma City, hundreds of FBI agents are involved, and all of them are generating paper. I am sure that systems for managing information can be improved, but I am sure that there will always be a drawer somewhere or a box somewhere with something in it. So I would caution against a standard of perfection. However, it was clear in the Waco investigation that at least some people in the FBI were cavalier or resistant in turning over evidence to outsiders. Until September, 1999, the FBI denied the existence of Forward Looking Infrared (FLIR) tapes containing audio evidence of the approval of pyrotechnics. The government did not turn them over during the criminal trial of surviving Branch Davidians, nor in response to a Congressional request in 1995, nor in response to specific FOIA requests from 1995 to 1997. Then, in late August, 1999, the FBI located at HRT headquarters a previously undisclosed FLIR tape. On September 1, 1999, two more tapes mysteriously appeared in an FBI file cabinet. To say the least, the FBI was cavalier in not producing this evidence. Days after the tragic fire, FBI agents attempted to disable by gunshot a pyrotechnic projectile found at the scene. Obviously this was evidence that pyrotechnics had been used. One of the supervising agents on the scene took notes of this event; however, instead of keeping his note pad describing this event in his office with his other notes, he kept it in the attic of his home. A second supervising agent repeatedly and implausibly told our investigators that he had no recollection relating to pyrotechnic tear gas at Waco. It's important to recognize that FBI agents who actually participated in the tear gas insertion were completely forthcoming in describing what happened, including the use of pyrotechnics. Also, Attorney General Reno, Deputy Attorney General Holder and Director Freeh clearly called for cooperation with my investigation. Similarly, notwithstanding our problems with the General Counsel's office of the FBI, I believe that the General Counsel himself, Larry Parkinson, was trying to be helpful. But, while many were willing to help, others kept information from us. The FBI's Office of General Counsel was not as cooperative as its head. Convinced that certain individuals were withholding information from our investigators, we threatened to obtain a search warrant, and sent 11 agents and three lawyers to the Office of General Counsel to search its files. I believe that, within the FBI, there are strong pressures to resist divulging information to outsiders. Soon after I was appointed Special Counsel, my office realized that we would need a liaison with the FBI who would be the contact person for our investigation. Deputy Special Counsel Ed Dowd asked FBI Supervisor Special Agent John Roberts if he would be interested in this role, having been told by Postal Inspectors that Roberts had done an excellent job with the Ruby Ridge investigation. According to Dowd, Roberts didn't want to act as liaison, claiming that working with our office would hurt his career in the FBI. Supervisor Special Agent Patrick Kiernan, a lawyer who teaches ethics at the FBI Academy, became our liaison, and did an excellent job. Kiernan has told me that he believes that people within the FBI have retaliated against him for assisting my investigation, and that he has filed the appropriate referrals with the FBI's Office of Professional Responsibility. Whether or not the concerns of Roberts and Kiernan about their careers are well founded, the fact that they have those fears indicates to me that there is a culture within the FBI of noncooperation with inquiries from outside the Bureau and of protecting those within the Bureau from criticism. People have suggested several ways to improve the FBI including the creation of an Office of Inspector General or a Blue Ribbon Commission. These may be good ideas. But my own belief is that the only way to correct a cultural problem is to change the culture. This means that there must be a persistent message that the role of the FBI is to protect the country and the Constitution, not to protect the FBI from criticism, and that lack of candor and openness hurts the FBI and destroys public confidence as well. It is a message that must come from the top: from the President, from the Attorney General and from the Director of the FBI. It must be heard on the first day a new agent arrives at the FBI Academy, and it must be repeated every day until retirement. And because it is human nature for today's enthusiasms to become tomorrow's forgotten resolutions, it is important that Congress put in place a permanent system for overseeing the FBI. And if there is an ``old boys network'' of FBI officials who create and enforce a closed culture within the Bureau, it is important to replace these people. Otherwise, any reform would be sure to founder on everyday resistance from within. I would not humiliate them. I'm sure they believe that what they are doing is for the best. But I would replace them. I would give them farewell parties and effusive thanks, and I would send them on their way. Finally, it is important for all of us--Congress, the media, the public--to acknowledge our own responsibilities for the lack of openness we lament in government. When public officials fear that the disclosure of their mistakes would lead to personal humiliation and professional ruin, it is understandable if they prefer concealment to candor. By confusing the discovery of human error with the sensationalism of exposes, we help create a mentality in government where the first law is self-preservation. If we really believe that making mistakes is not as bad as hiding mistakes, then it is our responsibility to keep that in mind and express it in words. Chairman Leahy. Thank you very much, Senator. Mr. Fine. STATEMENT OF GLENN A. FINE, INSPECTOR GENERAL, DEPARTMENT OF JUSTICE, WASHINGTON, D.C. Mr. Fine. Mr. Chairman, Senator Hatch, and Members of the Committee on the Judiciary, I appreciate the opportunity to appear before the Committee this afternoon to discuss the work of the Department of Justice's Office of the Inspector General, and in particular our oversight work in the FBI. Let me begin by providing a brief overview of the structure and staffing of the OIG. The OIG was established by the Inspector General Act Amendments of 1988, a decade after inspector generals were created for many other Federal executive branch agencies. The OIG is an independent within the Department that, by statute, reports both to the Attorney General and to Congress. The OIG has a staff of approximately 360 investigators, auditors, inspectors, program analysts, attorneys and support staff. The OIG investigates criminal and administrative misconduct by Department employees, and conducts independent audits and evaluations of Department programs and financial statements. The OIG's jurisdiction to investigate misconduct in the Department is limited, however. When Congress created an Inspector General in the Department, it permitted the Department's Office of Professional Responsibility, known as DOJ OPR, as well as the FBI's Office of Professional Responsibility and the DEA's Office of Professional Responsibility, to continue to exist outside of the OIG. In 1994, an Attorney General order set out the respective authority of each office to investigate misconduct in the Department. In general, under this order, DOJ OPR has the authority to investigate misconduct of DOJ attorneys acting in their capacity to litigate, investigate, or provide legal advice. FBI OPR and DEA OPR have the authority to investigate allegations of misconduct by employees of their agencies. The OIG has the authority to investigate other allegations of misconduct throughout the Department and its components. The OIG may only undertake investigations in the FBI and the DEA when the Attorney General or Deputy Attorney General specifically authorizes us to do so in a particular case. During the past several years, the OIG has received such authority to conduct a number of investigations in the FBI. My written statement provides a more detailed overview of these investigations, which includes the FBI's performance in uncovering the espionage activities of former CIA Officer Aldrich Ames and a review of allegations of improper and inadequate practices in the FBI Laboratory. The Attorney General has recently assigned to the OIG two sensitive investigations relating to the FBI. The first concerns the alleged espionage activities of FBI employee Robert Hanssen. Shortly after the FBI Director announced Hanssen's arrest, the Senate Select Committee on Intelligence and the Attorney General asked the OIG to examine the Department's performance in the Hanssen case. We have assembled a 10-person team of attorneys, special agents, analysts and support staff, several of whom worked on the OIG Ames review. Our review of the Hanssen matter will build on our already substantial base of knowledge about the FBI's performance in uncovering espionage during the period of Ames' spying, a period that overlapped in part with when Hanssen allegedly was supplying classified information to the Soviets. In the Ames review, we produced a lengthy report describing deficiencies in the FBI's performance in determining the cause of the unprecedented and catastrophic losses suffered by both the CIA and the FBI in their Soviet intelligence programs. Our intention in the Hanssen investigation is to provide a similarly detailed report that thoroughly examines the FBI's performance in preventing, detecting and investigating Hanssen's alleged espionage. The second matter we are currently investigating is the FBI's belated production of documents in the Oklahoma City bombing cases. On May 11, the Attorney General asked the OIG to investigate the circumstances surrounding this belated production of documents. We immediately assembled an investigative team of OIG employees, consisting of 5 attorneys, 2 special agents, 2 auditors, a paralegal and support personnel. The team is led by an experienced former Federal prosecutor who is the head of the OIG unit that conducts special investigations. As of this date, the team has requested and reviewed numerous FBI documents, and conducted more than 70 interviews of personnel from FBI headquarters, Main Justice, Oklahoma City, and 6 FBI field offices. I do not believe it appropriate to discuss the evidence that OIG team is finding at this stage of the investigation. However, I can describe the scope of our review. The OIG's investigation focuses on why the documents were produced late, the reasons for the delay, whether the FBI acted in a timely fashion upon learning that the documents had not been produced, and any systemic problems that this matter reveals about the FBI's handling of discoverable documents. We have done a considerable amount of work in this investigation. However, we intend to conduct many more interviews. Although we do not intend to interview FBI personnel at all 56 FBI field offices, we intend to fully investigate a sample of FBI offices and survey others to determine what happened with the documents in those offices. We plan to issue a detailed report of our investigation as expeditiously as possible. Finally, I want to note one important issue that the OIG has been struggling with over the past several years. The resources provided to the OIG have not kept pace with either our increasing responsibilities or the Department's explosive growth. In fact, due to budget constraints, the OIG's workforce has been cut by 100 employees within the past 2 years. Resource limitations aside, however, the OIG has a proven track record of conducting high-quality, independent oversight of Department programs and operations. Moreover, on the limited number of occasions when we have received the authority, the OIG has produced comprehensive reports that have identified serious systemic weaknesses in FBI programs and provided constructive recommendations for improvement. That concludes my oral statement, Mr. Chairman, and I would be pleased to answer any questions. Chairman Leahy. Thank you, and your full statement, of course, will be made part of the record. Judge Webster. STATEMENT OF WILLIAM WEBSTER, SENIOR PARTNER, MILBANK, TWEED, HADLEY AND MCCOY, LLP, WASHINGTON, D.C. Judge Webster. Thank you, Mr. Chairman. I am pleased to have an opportunity to be here this morning. I am not sure in which incarnation you wish me to speak. I would like to clarify one thing that may be confusing. Senator Grassley referred to the Webster Commission. That was a commission established by this Congress to conduct a 2-year study on the advancement of Federal law enforcement. We made certain recommendations at that time. I agree with Senator Grassley that the issue of consolidation is probably not a good one to advance at this level of uncertainty, but I want to say only in respect to that that we did so because there are now 148 Federal agencies with law enforcement responsibilities. We have gone in the Federalization of crime from half a dozen at the founding of our country to over 3,000 Federal crimes, including unlawful conduct at a rodeo. There are very important Federal crimes, but there are also a lot of---- Chairman Leahy. Not a big issue in Vermont, I want to say. Judge Webster. I am sure it isn't, Mr. Chairman. The FBI is now handling an inventory of 800,000 cases. It calls for the kind of look that we conducted and, of course, the kind of look that you are going to conduct. I would like to take just a minute out of my time to reminisce briefly about the circumstances when I came to office 23 years ago. We were in the wake of the so-called ``black bag'' jobs, the Church Committee report, and other reviews of Federal law enforcement and intelligence community activities. I was given 68 agents to consider disciplining as a result of those activities, discovering in the process that in the wake of the Supreme Court decision in 1972, not one single thing was done by the Bureau or the Department of Justice to educate the special agents as to the change in law in regard to the need for warrants in domestic security cases. There was a lot of concern. When I was sworn in, President Carter took pains to say that he knew of no other organization that had as much impact upon public confidence in Government than the FBI, that when the FBI did well, people felt good about their Government. I think what was unwritten and unsaid at that point in time was that when it didn't feel good about the FBI, it didn't feel as good about its Government. It is important, I think, for management to understand that. There were days of so-called plausible deniability, a new term I learned when I came to Washington. I said you have to understand there is no such thing in this agency as plausible deniability. Only the President of the United States may claim plausible deniability in international affairs, and you hurt the director when you do not tell him that you have a problem so that he can assist in dealing with it. I believe that to be true today. I also remember that we will go through cycles in which two separate cries will seek dominance. One is leave us alone, don't interfere with our privacy, don't intrude. The other one is why don't you do something about all this crime and the threat of terrorism and other things. And it is the job of the Bureau to balance that, and I believe over time its record has been very good in that respect. I might also say two other things that I used to say more times than people liked to hear that each of us carries the reputation of the other around in his pocket. It was something that people needed to be reminded of when they thought about doing things such as Senator Danforth described. It does not help the agency when people do not remember the proud record that it has and the importance of preserving it, and the reputations of the very gallant men and women who stand in our place every day of our lives. Finally, one other thing and then I will proceed to what I think my role is today, and that is I think that the FBI has enjoyed a very objective disciplinary system and has never hesitated to discipline when disciplinary reasons were apparent. On the investigative side, the facts are developed. The investigator, just as the FBI does in relation to the United States Attorney's office, does not prosecute. He turns the matter over to the Office of Professional Responsibility, which then makes recommendations based upon an effort to be a consistent pattern of discipline. So I think you will find, regardless of what direction you go in respect to future oversight, that the FBI has not shrunk from dealing with issues of discipline; in fact, wish to have it. I see I have pushed the light too far for my own good. Chairman Leahy. Take whatever time you need. Judge Webster. Thank you. I would like to tell you a little bit about I have been asked to do by the Attorney General and Director Freeh, and that is to look into the internal security procedures of the Federal Bureau of Investigation in the wake of the Robert Hanssen case. I might say that Inspector General Fine and I have met on two occasions to make sure that we were cooperating and not working against each other and would appropriately share information that would be helpful to you and to their own responsibilities. I define our mission in this shorthand way. We are not investigating the Hanssen case. We will learn, we will be informed by what we get from the inspector general and from other sources. But our mission, I think, is to reduce the time between defection and detection. It is that simple. No one should be allowed to function as a traitor in the Federal Bureau of Investigation, much less anywhere else, for 15 years. The problem everyone understands is that we can't preclude someone turning sour in the midst of his career, but we can make every effort to be sure that we recognize that change of attitude and purpose, and do so in the best possible way without destroying the morale and the trust and the bond that exists within the FBI. The FBI has accepted, for example, in drug testing intrusions on privacy interests for the greater good, the example to be set, and so on. We are looking at that and we are looking to see how it would be done. Well, what have we done and where are we? I have established a very excellent staff to tackle and break down the assignments, and I would like to just list those to you, but also not only mindful of the fact that a former director of the FBI has been asked to head this commission--incidentally, Director Freeh asked me to take this on even before he made the arrest of Robert Hanssen, subject to the approval of the Attorney General which came immediately afterwards. I have asked as an oversight commission--I don't want to engage them in all the work that is involved, but to look at what we are doing, to look at what I am doing and to tell me where we ought to be doing things differently, or more or less, and to assess our judgments. I have asked, and they have agreed to serve, former Secretary of Defense and Minority head of the Senate Intelligence Committee, William Cohen; former Secretary of the Army Clifford Alexander; former Speaker of the House Thomas Foley; former Trade Representative and a very distinguished public official, Carla Hills; Robert Fisk, former special prosecutor in New York; and former Attorney General Griffin Bell. I hope that they will insist on the level of credibility that will convince you that whatever we are able to come up with is worth listening to. Now, we have divided our task into four basic areas. Personnel security. We have a task force working on key issues, including the use of the polygraph, the adequacy of background investigations and how seriously they are taken, and means of indicia of defection. We have a task force on document security which will address and is addressing the collection, control, dissemination and destruction of classified information, particularly SCI and FISA information, and the adequacy of ``need to know'' assessments. I might add that we were immediately given a package of all of the known rules and regulations in this area by the FBI upon my appointment. Third, organizational security. We are undertaking a comparison of security policies and practices in various other agencies, the FBI and the other intelligence community activities, to see what can be learned elsewhere, and the security, training and education areas. And, fourth, we have a task force on information systems security, and that was specifically mentioned by the Attorney General. We are looking at the adequacy of security protections for classified computer and telecommunications systems. We are looking at the adequacy of the audit trail capabilities, the implementation of automated trip wires, the detection methods, ways that we can have electronic librarians that will recognize when someone who doesn't belong in a particularly highly classified area is walking around. I have a staff now of approximately nine attorneys, headed by Michael Shaheen, a distinguished former head of the Office of Professional Responsibility at the Department of Justice. Most of our staff members are assigned and seconded to us from other agencies of Government. I have also asked Russell Bremer, and he has been working with me. He was a former general counsel at the CIA. He worked with me at the FBI on the 68 agent cases, and I have asked him to assume major responsibility on the polygraph issues and the use of polygraph as a vetting process, which prior to the Robert Hanssen case did not exist, except on an entry-level basis. I could list all of them. They are absolutely outstanding, and we have some 17 investigators, experts and consultants from other agencies of the Government and the military. We have made a good deal of progress. We have conducted many interviews. We have been meeting with the other agencies and with officials in the FBI, including Neil Gallagher, who heads the National Security Division. We have been coordinating, as I said, with Inspector General Fine. We have coordinated with the Hanssen prosecution team in order not to step on their work and thereby create issues of privilege, and so forth. We have briefed the Attorney General and the Deputy Attorney General, and we have tried to work out and are working out the problems that come from having the application of FACA, the Federal Advisory Committee Act, and its implications for us so that we can have our closed meetings and deal with highly classified information. Chairman Leahy. I think as you said, Judge Webster, nobody is shocked to find that the Russians or any other group, including some friendly to us, may try to get somebody to defect or to spy for them or provide material. What has been shocking to this Committee--and a number of members of this Committee also serve on the Intelligence Committee--what is shocking is why it took so long to detect them. We will be very anxious to see what you come up with on that. We will, of course, continue to ask questions here and try not to bump into what you are doing. I am not trying to witch- hunt in the Bureau, but I am just trying to make sure that we don't have another situation like this. If somebody is leaving, as the press has reported, warning signals all over the place and doesn't get caught, I worry what we are doing about catching somebody who shows a little bit more finesse. Judge Webster. Well, we have one here. We have what I call a 500-year flood, and we will learn from that. Chairman Leahy. I hope so. Judge Webster. I think it would be naive to assume that we will never have another defection. Chairman Leahy. Of course, we will have more, but we can have better---- Judge Webster. We can be prepared. Chairman Leahy. Yes. Thank you. Mr. Bromwich. STATEMENT OF MICHAEL R. BROMWICH, FORMER INSPECTOR GENERAL, DEPARTMENT OF JUSTICE, WASHINGTON, D.C. Mr. Bromwich. Thank you, Mr. Chairman, Senator Hatch, members of the Committee. I am currently partner in the Washington, D.C., and New York offices of the law firm of Fried, Frank, Harris, Shriver and Jacobson. Before joining the firm in 1999, I had spent 13 of the previous 17 years in public service, first as a Federal prosecutor in both New York and Washington, and for the last 5 years, from 1994 to 1999, as the Inspector General for the Department of Justice. While I was Inspector General, the office conducted a number of significant reviews of the FBI, including in-depth investigations of the FBI Laboratory, the FBI's role in the Aldrich Ames affair, and the FBI's problems in handling classified information during the campaign finance investigation. I welcome the opportunity to be here today to testify about the important and very timely subject of oversight of the FBI. My prepared testimony reviews in some detail the history of the past decade relating to FBI oversight and some of the challenges and frustrations we at the OIG faced during my tenure. I am submitting that statement for the record. In this brief statement, I will focus on the theme of this hearing, which is restoring confidence in the FBI. These last several months, as has been noted by many of the members, have been extremely difficult ones for the FBI and for those who care about public confidence in it. In the past month, we have heard about an FBI that is allegedly out of control, fails to respect the rights of criminal suspects and defendants, and is characterized by a cowboy culture more concerned with newspaper headlines than justice. Recent polls have demonstrated that, and the damage to the Bureau's reputation. I think that the ``out of control'' rhetoric and suggestions about its culture are overstated, and in any event are not very helpful in understanding the dimensions of the problems or in arriving at solutions. For the most part, the men and women of the FBI have chosen careers of public service and committed themselves to the noble calling of Federal law enforcement. They do their jobs and they do them well, but the problems cannot be ignored or dismissed. I share with this Committee the view that one of the principal means for restoring confidence in the FBI is to ensure that it is subject to adequate oversight. I believe the principal tool for upgrading the amount and quality of oversight over the FBI is to strengthen the Justice Department's Office of the Inspector General. At present, its ability to perform comprehensive and aggressive oversight is limited by jurisdictional limitations and resource shortfalls. The Justice Department may not, at his own initiative, conduct investigations of misconduct among personnel at the FBI without the permission of the Attorney General or the Deputy Attorney General. I am aware of no similar limitation that exists for any other IG. This means that the FBI, arguably the most powerful agency in the Federal Government, is currently subject to less oversight than any other agency. A bill in the House to change that system in 1997, following the OIG's FBI Lab and Ames reports, died, and Attorney General Reno would not change the situation herself. Although my prepared testimony explains the genesis of the limitation on the OIG's jurisdiction in historical and institutional terms, it makes no sense any longer, assuming it ever did. Lifting the existing jurisdictional limitations will not cause the Justice's OIG to insert itself into sensitive intelligence and law enforcement activities. The concerns about interfering with the ability of the FBI to carry out its critical law enforcement and counterintelligence responsibilities are overblown. The IG Act already gives the Attorney General the authority to block any IG investigation or audit if he or she determines that the activity will interfere with an important function or activity. To my knowledge, that provision has been used only once, when Attorney General Reno and I had an honest disagreement about the relative importance of the OIG's crack cocaine report, on the one hand, and an ongoing narcotics investigation on the other. So the mechanism exists currently to block the OIG from taking specific actions, but there is accountability built into the system because Congress must be notified of the Attorney General's action. It does not happen under a cloak of secrecy. The more important issue is ensuring that the Justice OIG has the resources necessary to do its job. Authority without the resources is a ticket to frustration and failure. The OIG never possessed the resources necessary to meet its responsibilities during my tenure, and its current condition is far worse, after the substantial cutbacks over the past 3 years. Congress obviously has the power and should seize the opportunity to remedy this serious deficiency. It is time for Congress to restore the strength of an agency that has been weakened in an arbitrary and irrational way. Addressing the problem of insufficient oversight over the FBI, two distinguished members of the Senate and this Committee, Senators Specter and Durbin, have proposed creating a separate IG for the FBI. The strength of such a proposal is that it recognizes the problem and suggests an institutional mechanism, presumably backed with sufficient funding. But I believe that it reaches, respectfully, the wrong conclusion. One problem is that it reinforces the separateness of the FBI. Among the problems we have seen in recent years, in my judgment, is an FBI that at times has been only nominally part of the Justice Department. While such a strategy may have been useful to the Bureau in some respects, it is fundamentally inconsistent with the appropriate role of the FBI and counter to its long-term interests. The creation of a separate IG for the FBI underscores its separateness and thus, in my judgment, moves in the wrong direction. Second, I doubt the creation of an FBI IG would address the crisis in public confidence that currently affects the FBI. Seven or 8 years ago, it was sometimes very difficult to persuade people that the Justice Department IG was sufficiently independent to perform aggressive oversight over all aspects of the Department, including the FBI. Over time, it earned legitimacy and credibility because of specific examples of oversight, including the investigations of the FBI mentioned earlier in my testimony. That same legitimacy would be much harder for an FBI IG to claim because it would have to start from scratch and it would reside within the FBI. Third, the creation of a separate IG for the FBI risks further confusing the already confused institutional configuration relating to FBI oversight. There also would be the practical and logistical difficulties of creating a brand new institution. Where would the personnel come from, from within the FBI? If so, how can Congress and the public be assured of its independence? If from the outside, it will takes months, if not years, for skilled and experienced personnel equal to the task to be hired. We cannot wait that long. And what would happen when, as is frequently the case, the specified piece of oversight requires the examination of not simply FBI personnel, but also the actions of prosecutors or other Justice Department personnel with whom the FBI personnel work? Presumably, a joint effort of the FBI IG and the Justice Department IG would be required. This adds coordination problems on top of investigations that are already substantively complex and difficult. In short, I agree with the impulse behind the proposal to create a separate IG for the FBI; that is, to enhance the level of oversight over the FBI. But I believe the fuller and more prompt realization of those objectives can be achieved through full funding of the Justice Department's OIG and through eliminating the current restrictions on that office's ability to perform oversight. Chairman Leahy. What you are saying, in effect, is if there is going to be a Justice Department IG, the IG should be for everybody in the Justice Department. Mr. Bromwich. That is exactly right, Mr. Chairman. Chairman Leahy. And everybody in the Justice Department should be treated the same, and that includes the FBI. Mr. Bromwich. That is exactly right. Chairman Leahy. Thank you. Mr. Bromwich. Just finishing up, in the process of doing the FBI Lab investigation, we learned that the FBI had long resisted opening itself to the entity responsible for accrediting crime labs throughout North America. In discussing this with the forensic scientists who were members of our investigative team, I learned unfortunately that this was part for the course. They told me that in the exchanges between personnel from the FBI Lab and from other labs, the FBI was there to impart knowledge and wisdom rather than to receive it, and the FBI did not act as though it had anything to learn from others. That attitude--some describe it as institutional arrogance--has deprived the FBI, of lessons to be gained from mutual exchanges with other law enforcement agencies and other large and complex organizations. The backwardness of the FBI's computer systems and recordkeeping practices are at least in part the product of resisting the advances in technology that swept through the rest of the organizational world some time ago. Although mutual exchanges with other institutions may not generally be regarded as a form of oversight, the FBI can benefit immeasurably from opening itself to outstanding influences of various kinds. This would reflect a humility and a willingness to learn from others that the Bureau has too often seemed to lack. Opening itself up will help the Bureau to overcome its debilitating insularity and embrace the outside world in a constructive manner. Mr. Chairman, that concludes my prepared testimony. I would be happy to answer any questions. [The prepared statement of Mr. Bromwich follows:] Statement of Michael R. Bromwich, Former Inspector General, Department of Justice, Washington, D.C. Mr. Chairman, Senator Hatch, members of the Committee: I am currently a partner in the Washington D. C. and New York offices of the law firm of Fried, Frank, Harris, Shriver & Jacobson. Before joining the firm in September 1999, I spent 13 of the previous 17 years in public service, first as a federal prosecutor in New York and Washington, and for the last five years, from 1994 to 1999, as the Inspector General (IG) of the Department of Justice. During the time I served as Inspector General, the Office of the Inspector General (OIG) conducted a number of significant reviews of the FBI, including in- depth investigations of the FBI Laboratory, the FBI's role in the Aldrich Ames affair, and the FBI's problems in handling classified information in the campaign finance investigation. I am pleased to be here to testify about the important and timely subject of oversight over the FBI. I think it might be most useful for me to address some of the recent historical issues relating to FBI oversight. First, I will describe the state of oversight over the FBI and the institutional configuration relating to such oversight when I arrived at the Department at the end of 1993. Second, I will describe the experiences - the challenges and frustrations - I experienced during my five-year tenure as IG as they relate to FBI oversight. Third, I will describe what I view as the central oversight issues that need to be considered by this Committee, including the recent proposal to create a new and separate inspector general within the FBI. I should add that my review of the events described in this statement is based on my best recollection rather than on any comprehensive review of the relevant documents. I. Background The Inspector General Act of 1978 (IG Act) established inspectors general in cabinet level agencies and many independent agencies, accelerating a movement to create independent audit, program evaluation, and investigative agencies in the executive branch and continuing a trend that had begun in the early 1970s. A number of agencies, including the Treasury and Justice Departments, were not included in the 1978 law. Although there were multiple reasons for the omission of the Justice Department from the scope of the original Inspector General Act, the principal arguments were that the Justice Department already had an internal affairs-type entity the Office of Professional Responsibility (OPR), which had been established by Attorney General Levi in the mid-1970s--and that there were separation of powers-related concerns about putting an independent inspector general, with reporting responsibilities to the Congress, in the department headed by the Attorney General (AG), the nation's chief law enforcement officer. For these reasons and others, the Justice Department OIG was not created until 1988, when Congress passed the Inspector General Act Amendments of 1988. The Justice OIG was set up through the consolidation and amalgamation of elements of the Justice Department, including units and personnel drawn from the DEA, the Marshals Service, the Immigration and Naturalization Service (INS), the Bureau of Prisons, and the Justice Management Division. The Justice Department OIG opened its doors in the spring of 1989 with an acting inspector general. The Senate confirmed the first Justice Department inspector general in the latter part of 1990. The legislation that created the OIG provided it with audit and program review authority that was virtually unlimited, including over the FBI. In practice, as I learned when I arrived, the FBI made life both difficult and unpleasant for OIG personnel engaged in work involving the FBI. Because doing work in the FBI was so timeconsuming and frustrating, because there was a general lack of cooperation from FBI personnel, and because OIG personnel were more knowledgeable about other components of the Department than about the FBI, the OIG did fewer audits and less program evaluation work in the FBI than I would have liked. OIG professionals turned their attention to parts of the Justice Department where they could do their jobs more effectively and have something to show for it. As to investigations, the scope of the OIG's investigative authority over FBI personnel and DEA personnel was controversial and confusing almost from the outset. In addition to the OIG and OPR, there were the two other internal affairs arms in the FBI and DEA-FBI-OPR and DEA-OPR--whose existence was left undisturbed by the statute and by the creation of the OIG. The statute suggested a particular division of responsibilities, although the combination of the statute and the legislative history made clear that the Attorney General retained substantial discretion in allocating matters within this institutional hodgepodge. Because the statute made the scope of the OIG's investigative jurisdiction uncertain, there was need for some form of clarification. In 1992, the Deputy Attorney General issued an order to clarify matters. The order, known as the Terwilliger Order, generally gave the jurisdiction over attorneys and law enforcement personnel to the Justice Department's OPR, even though it lacked the manpower to do a credible job in that regard. This did nothing to solve the problem, but it served to diminish the stature of the OIG within the Justice Department. One factor in this early history that helps explain the failure to provide any investigative oversight over the FBI was the general hostility of the Department, including the FBI, towards the creation of the OIG and the seeming desire to marginalize it. This was reflected in what I found when I arrived at the Department in late 1993--that the OIG had not been fully accepted by the rest of the Department in the first four years of its existence. This was not attributable to any deficiencies on the part of the OIG but, instead, was the result of what appeared to be an attempt to marginalize it. Nor was the notion taken seriously that the OIG could conduct investigations into significant matters involving complex law enforcement and national security issues. When the possibility of my becoming the Justice Department's Inspector General was initially raised with me, the then-Deputy Attorney General stressed his concern about the ability of the Department to conduct major, credible internal investigations into matters of subs