<DOC>
[107 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:88571.wais]


                                                        S. Hrg. 107-971
 
                 REFORMING THE FBI IN THE 21ST CENTURY

=======================================================================

                                HEARINGS

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                   MARCH 21, APRIL 9, AND MAY 8, 2002

                               __________

                          Serial No. J-107-69

                               __________

         Printed for the use of the Committee on the Judiciary



88-571              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
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                       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

                              ----------                              

                        THURSDAY, MARCH 21, 2002
                    STATEMENTS OF COMMITTEE MEMBERS

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.    22
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......     4
    prepared statement...........................................    52
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
    prepared statement...........................................    54
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....    18

                               WITNESSES

Chiaradio, Robert J., Executive Assistant Director for 
  Administration, Federal Bureau of Investigation, Department of 
  Justice, Washington, D.C.; accompanied by Bob Dies, Chief 
  Technology Officer, Federal Bureau of Investigation, and Bill 
  Hooten, Assistant Director for Records Management, Federal 
  Bureau of Investigation........................................     9
Fine, Glenn A., Inspector General, Department of Justice, 
  Washington, D.C................................................     6

                       SUBMISSIONS FOR THE RECORD

Chiaradio, Robert J., Executive Assistant Director for 
  Administration, Federal Bureau of Investigation, Department of 
  Justice, Washington, D.C., prepared statement..................    28
Fine, Glenn A., Inspector General, Department of Justice, 
  Washington, D.C., prepared statement...........................    36
Mueller, Robert S., III, Director, Federal Bureau of 
  Investigation, Department of Justice, Washington, D.C., 
  statement......................................................    57

                         TUESDAY, APRIL 9, 2002
                    STATEMENTS OF COMMITTEE MEMBERS

DeWine, Hon. Mike, a U.S. Senator from the State of Ohio.........    64
Durbin, Hon. Richard J., a U.S. Senator from the State of 
  Illinois.......................................................    75
Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.    64
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......    66
    prepared statement...........................................   105
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.    61
    prepared statement...........................................   107

                               WITNESSES

Senser, Kenneth H., Assistant Director, Security Division, 
  Federal Bureau of Investigation, Department of Justice, 
  Washington, D.C................................................    89
Szady, David, Assistant Director, Counterintelligence Division, 
  Federal Bureau of Investigation, Department of Justice, 
  Washington, D.C................................................    86
Watson, Dale, Executive Assistant Director for Counterterrorism/ 
  Counterintelligence, Federal Bureau of Investigation, 
  Department of Justice, Washington, D.C.........................    91
Webster, William H., Milbank, Tweed, Hadley and McCoy, LLP, 
  Washington, D.C................................................    65

                         QUESTIONS AND ANSWERS

Responses of Kenneth Senser to questions submitted by Senator 
  Grassley.......................................................   100

                       SUBMISSIONS FOR THE RECORD

Senser, Kenneth H., Assistant Director, Security Division, 
  Federal Bureau of Investigation, Department of Justice, 
  Washington, D.C., prepared statement...........................   113
Szady, David, Assistant Director, Counterintelligence Division, 
  Federal Bureau of Investigation, Department of Justice, 
  Washington, D.C., prepared statement...........................   125
Webster, William H., Milbank, Tweed, Hadley and McCoy, LLP, 
  Washington, D.C., prepared statement and attachment............   130

                         WEDNESDAY, MAY 8, 2002
                    STATEMENTS OF COMMITTEE MEMBERS

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah, 
  prepared statement.............................................   241
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.   135
    prepared statement...........................................   243
Thurmond, Hon. Strom, a U.S. Senator from the State of South 
  Carolina, prepared statement...................................   265

                               WITNESSES

Mueller, Hon. Robert S., III, Director, Federal Bureau of 
  Investigation, Department of Justice, Washington, D.C..........   139
Thompson, Hon. Larry D., Deputy Attorney General, Department of 
  Justice, Washington, D.C.......................................   137

                         QUESTIONS AND ANSWERS

Response of the Department of Justice to a question submitted by 
  Senator Leahy (December 23, 2002)..............................   172
Responses of the Department of Justice to questions submitted by 
  Senators Leahy and Feingold (April 11, 2003)...................   175
Responses of the Department of Justice to questions submitted by 
  Senators Leahy and Feingold (July 10, 2003)....................   206
Responses of the Department of Justice to questions submitted by 
  Senator Leahy (July 17, 2003)..................................   238

                       SUBMISSIONS FOR THE RECORD

Mueller, Hon. Robert S., III, Director, Federal Bureau of 
  Investigation, Department of Justice, Washington, D.C., 
  prepared statement.............................................   248
Thompson, Hon. Larry D., Deputy Attorney General, Department of 
  Justice, Washington, D.C., prepared statement..................   258


 REFORMING THE FBI IN THE 21ST CENTURY: LESSONS FROM THE OKLAHOMA CITY 
                              BOMBING CASE

                              ----------                              


                        THURSDAY, MARCH 21, 2002

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                   Washington, D.C.
    The Committee met, Pursuant to notice, at 9:34 a.m., in 
room SD-106, Dirksen Senate Office Building, Hon. Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Hatch, Grassley, Specter, and 
Sessions.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good morning. Please, all the witnesses 
come up and take a seat. I want to thank the witnesses from the 
FBI for their cooperation in agreeing that everybody will sit 
at the table.
    We have this situation where the Republican Leader, 
exercising his rights under the rules, has objected to any 
committees being more than 2 hours into the session. But this 
is an extremely important issue, one that the American people 
and the FBI are quite concerned about, how we deal with the 
FBI's readiness to meet the law enforcement challenges of not 
only today but of tomorrow, too.
    We began oversight hearings last summer, and I think this 
is extremely important because the FBI is facing some 
unprecedented challenges. Also, under the new legislation we 
passed, they have unprecedented powers and we want to make sure 
in a democratic society that we balance those. We also want to 
make sure that the FBI is able to do all the things necessary 
to protect this great Nation.
    It is the committee's responsibility to ensure that the FBI 
is as great as it can be, and this series of oversight hearings 
is a fundamental part of that. We will consider the FBI's 
production, and it was actually belated production, as the 
important and thorough report by the Inspector General revealed 
this week, of the Oklahoma City documents. Also, we will look 
at the question of the destruction of some of them.
    What is troubling to me in that report, actually more 
troubling than the belated production or the destruction, is 
the conclusion that senior FBI personnel failed to notify 
either the prosecutors on the case or high-ranking Justice 
Department officials, including the current FBI Director, 
Robert Mueller, who was then serving as the Acting Deputy 
Attorney General, about the belated document production 
problems until 1 week before the scheduled execution date for 
Timothy McVeigh.
    I am concerned about that because the trial had been a 
textbook trial of how to do things right on both the 
prosecution side and the defense side. After the millions of 
dollars spent on that trial, to suddenly find a glitch like 
this that could have derailed the whole process is very 
troubling.
    The Inspector General's report revealed that the 
destruction of relevant FBI documents was not disclosed to the 
court or the prosecutors on the case or the defense until after 
Timothy McVeigh's execution. I agree with the conclusion in the 
Inspector General's report that the court and defense counsel 
should have been informed of the FBI's destruction of 
documents, in addition to being given the belated documents, 
while McVeigh's stay of execution was being litigated. It is 
unlikely that any of the destroyed documents, if produced, 
would have changed the outcome of the case, but that does not 
excuse the FBI's conduct.
    The observations of the presiding judge in the case are 
illuminating. He described the FBI as ``an undisciplined 
organization or organization that is not adequately controlled 
or that can't keep track of its information.'' In denying the 
request for a stay of execution, he noted ``It is the function 
others to hold the FBI accountable for its conduct here, as 
elsewhere.''
    The report raises three significant issues for this 
committee's review, as we are one of the ones that the court 
meant should look into this. First, there are structural and 
management problems at the FBI which need fixing. You can't 
blame a computer or filing system when senior FBI agents in 
charge of the Oklahoma City bombing case are aware of document 
production problems almost 5 months before the scheduled 
execution.
    FBI headquarters officials were aware nearly 3 months 
before the scheduled execution, but did not disclose these 
problems to the FBI director, to senior Justice Department 
officers, or to prosecutors on the case until a week before the 
scheduled execution. It is hard to blame those who are in 
charge when they don't get the information.
    I am afraid it is an example of a ``circle the wagons'' 
mentality. If you learn about a problem, you can't bury your 
head in the sand and hope it goes away. And you can't contain a 
problem under the cloak of secrecy; it just aggravates it.
    We will look to Director Mueller to consider appropriate 
administrative action against the FBI managers who did not 
promptly tell FBI headquarters or Justice Department officials. 
But the silver lining in the Inspector General's report is the 
conduct of two lower-level employees who, in contrast to the 
managers, did the right thing.
    The FBI financial analyst and the intelligence research 
specialist who first discovered the document production problem 
in January 2001 informed their superiors in the chain of 
command, but did not go around them. As the report notes, ``the 
FBI could do well to use this as an opportunity to help remedy 
a longstanding FBI problem--the belief among FBI employees that 
bringing problems to management's attention only results in 
problems for the employee.''
    Second, the information management and technology problems 
at the FBI substantially contributed to the belated document 
production. We are all relieved that the Inspector General 
found no intentional misconduct, but the report documents a 
number of fundamental flaws in the handling of information by 
the FBI that contributed to the failure to produce documents in 
the Oklahoma City bombing case: ``antiquated and inefficient 
computer systems;'' ``inattention to information management;'' 
``inadequate quality control systems;'' misfiling, mislaying or 
losing documents; failure by field offices to follow correct 
procedures. The litany of problems is startling and that is why 
I want to hear from the FBI what is going to happen on this. 
Mr. Dies, I am glad you are here on that.
    I appreciate, and I think most members on this committee 
appreciate the efforts of the director to correct the 
management and information management problems at the FBI. I 
hope he appreciates the fact that congressional involvement can 
help achieve that.
    In the Emergency Supplemental Appropriations Act passed in 
January, Congress, with my support, gave the FBI $745 million, 
with more than $417 of that dedicated to computer and 
information technology. We are poised to give another $245 
million. That would amount to $1 billion infusion of funds into 
the FBI, or a 25-percent budget increase since September 11.
    Now, we are giving more powers, we are giving more money, 
but the quid pro quo is that the problems will be fixed. This 
committee cannot authorize more money, will not authorize more 
money, nor will the Appropriations Committee appropriate it if 
the problems are not being fixed.
    Finally, we have to apply the lessons of Oklahoma City to 
the challenges facing the FBI in fighting terrorism because 
Oklahoma City, the problems there, the problems before 
September 11, can be problems today, on March 21. There is 
nobody in this room who would ever assume that we have seen our 
last domestic terrorism or international terrorism attack 
within the shores of the United States. We are sitting in a 
building that is just yards away from one of the buildings 
probably targeted in the September 11 attacks. So we have to 
look at this.
    There are parts of the Inspector General's report that are 
chilling. They raise the critical question of whether the same 
flaws hampered the FBI's sharing of counter-terrorism 
information before the September 11 terrorist attacks.
    I know there are some in the Congress who don't want us to 
look into the question of whether mistakes were made prior to 
September 11. I would say that those feelings are not shared by 
the heads of the FBI, Director Mueller and others. They have 
been very open with me that we will look at the problems of 
sharing information.
    Right now, it is fair to conclude that the FBI does not 
know what it knows. That is the problem. You have got all this 
information, but if you can't know what you know, it is not 
going to help us. If the information is sitting locked up 
somewhere, it is not going to help. If it is material that 
hasn't been translated, it is not going to help. If it is 
material that hasn't been distributed, it is not going to help.
    The Inspector General's report demonstrates the need for 
enactment of S. 1974, the Leahy-Grassley FBI Reform Act, to 
charter the authority of the FBI's Inspector General to review 
allegations of FBI misconduct and to strengthen FBI information 
management and technology and to protect FBI whistleblowers.
    I will put the rest of my statement in the record. We will 
continue these oversight hearings, and I do want to extend my 
appreciation for the cooperation I have received from the FBI 
in going forward on this. It is a lot different than a few 
years ago, what the cooperation would be.
    [The prepared statement of Senator Leahy appears as a 
submission for the record.]
    Chairman Leahy. Senator Hatch?

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Hatch. Well, thank you, Mr. Chairman. I apologize 
for being a little late. I had to introduce the Assistant 
Secretary of the Treasury.
    Chairman Leahy. Wearing that tie?
    Senator Hatch. Yes, wearing my modest tie here.
    Chairman Leahy. This is how you tell the liberals from the 
conservatives on this committee. You will notice my dark tie.
    Senator Hatch. The conservatives are so boring.
    Mr. Chairman, I would like to start off by stating 
unequivocally that I consider the FBI to be one of the finest, 
if not the finest, law enforcement agencies in the world. But 
those who justifiably we hold in great regard also bear a great 
responsibility.
    Last spring, we were all disappointed to learn that in the 
process of turning over millions of pages of documents to the 
defendants who were responsible for blowing up the Murrah 
Federal Building in Oklahoma City, the FBI had inadvertently 
failed to produce some documents. This is a mistake that never 
should have happened in litigation.
    Fortunately, with respect to Timothy McVeigh and Terry 
Nichols, there was no basis for arguing that any of the 
documents that were not produced would have altered in any way 
the outcome of their trials. Next time, we may not be so lucky. 
I am therefore committed to doing everything necessary to 
ensure that these types of mistakes do not ever happen again.
    The Department of Justice Inspector General has now 
completed a thorough and comprehensive review to determine how 
these documents fell through the cracks and how such mistakes 
can be eliminated in the future. And before I go on, I would 
like to acknowledge Glenn Fine, the DOJ Inspector General, for 
the fine work performed by you, Mr. Fine, and your staff. This 
report is clear. It is thorough and well-organized, and it 
should serve as a model for future investigative reports.
    There is much good news in the IG report. First, and most 
importantly, there is nothing in the report that does anything 
that calls into question the validity of the convictions or the 
sentences imposed on Timothy McVeigh or Terry Nichols. While I 
recognize that the guilt or innocence of these men was not the 
focus of the IG's report, I nevertheless take comfort from the 
fact that the IG uncovered no information that would even 
suggest that these men were not the perpetrators of the 
horrible crimes for which they were justly convicted. We must 
not forget that these men were captured, brought to trial and 
convicted for blowing up a Federal building and murdering more 
than 160 men, women and children through the hard work and 
through the dedication of FBI agents and personnel.
    Second, I am gratified to learn that the Inspector General 
determined that the FBI had not purposefully sought to withhold 
these documents from the defense. The Inspector General found 
that in the midst of producing more than a million pages of 
materials, some 1,033 documents were not turned over, and that 
the failure to produce these documents was simply the result of 
human error, not misconduct or misfeasance or malfeasance on 
the part of the FBI.
    Finally, I have been pleased to learn that under the 
vigorous direction and leadership of Director Robert Mueller, 
the FBI has already begun implementing many of the IG's 
suggested reforms. I applaud the IG for your thorough report, 
and I urge the FBI to continue its commitment to overhauling 
and upgrading its records management systems.
    Let me make a final point. When the FBI does its job well, 
we rarely hear about it. There is no way to tell how many 
terrorist plots against the United States have been averted 
simply because of the existence of the FBI's counter-terrorist 
capabilities.
    When the FBI does make the news, it is overwhelmingly for a 
job well done. It may be the perpetrator of a rape who has been 
identified and incarcerated because the FBI laboratory has 
matched his DNA to evidence found at the crime scene. Or 
perhaps a malicious computer virus has been detected by the FBI 
and traced back to a cyber criminal operating in a foreign 
country.
    It is this positive record of effectiveness and efficiency 
that makes it so newsworthy when the FBI fails to perform its 
duty with the degree of care and professionalism that we have 
come to expect. And as a result, many times we make a lot more 
fuss about these matters than the matters that very few people 
know very much about that are successes.
    As a United States Senator, I consider it to be one of my 
most solemn responsibilities to ensure that the awesome powers 
our law enforcement agencies have are exercised in a 
responsible fashion; that is, in a way that inspires confidence 
in our citizens and does not unlawfully infringe on our 
cherished liberties. I know that my colleagues on both sides of 
the aisle also feel the weight of this responsibility.
    Oversight hearings such as the one we are holding today are 
important and I look forward to the testimony of the witnesses 
today. But based on my review of the IG's report, the written 
testimony submitted by the witnesses, and my own knowledge of 
what Director Mueller has accomplished during his short tenure 
as director, I am persuaded that the FBI is taking the 
appropriate steps to address the shortcomings in records 
management that were revealed by the Oklahoma City bombing 
case, and thereby maintain its position as one of the world's 
most effective law enforcement agencies.
    So, Mr. Chairman, I appreciate your holding these hearings 
and I want to thank you for your efforts here today.
    Chairman Leahy. Thank you.
    Our first witness will be Glenn Fine, who is the Inspector 
General of the Department of Justice. He is a graduate of 
Harvard Law School, a Rhodes Scholar, and a former Federal 
prosecutor. He served as the director of the Special 
Investigations and Review Unit, and now has served under two 
Attorneys General. I know on this one, he has done extremely 
thorough and detailed work.
    I know that you put your own Director of Special 
Investigations, Suzanne Drouet, in charge of the Oklahoma 
documents matters, and I think that shows the importance you 
gave to it. We will put the whole report in the record, but I 
do want to hear from you, Mr. Fine, and then we will go to each 
of the other witnesses.

 STATEMENT OF GLENN A. FINE, INSPECTOR GENERAL, DEPARTMENT OF 
                   JUSTICE, WASHINGTON, D.C.

    Mr. Fine. Thank you. Mr. Chairman, Senator Hatch, members 
of the Committee on the Judiciary, I appreciate the opportunity 
to appear before the committee this morning to discuss the 
Office of the Inspector General's report on the belated 
production of documents in the Oklahoma City bombing case.
    The disclosure of these documents just 1 week before the 
scheduled execution of Timothy McVeigh raised serious questions 
as to whether the FBI had intentionally failed to disclose 
documents to the defense before trial, and why the failure to 
produce documents had occurred. Because of the importance of 
these issues, the OIG expended significant resources to 
investigate the circumstances surrounding the belated 
disclosures.
    The OIG team of attorneys, special agents and auditors was 
led by an OIG attorney whom Chairman Leahy just described, who 
is a former Federal prosecutor. The team conducted 
approximately 200 interviews of FBI and Department employees. 
On Tuesday of this week, we issued a 192-page report detailing 
our findings.
    In sum, our investigation found that widespread failures by 
the FBI led to the belated disclosure of more than 1,000 
documents in the OKBOMB case. We traced the failures to a 
variety of causes, including individual mistakes by FBI 
employees, the FBI's cumbersome and complex document handling 
procedures, agents' failure to follow FBI policies and 
procedures, inconsistent interpretation of policies and 
directives, agents' lack of understanding of the unusual 
discovery agreement in the case, and the tremendous volume of 
material being processed within a short period of time.
    The failures were not confined to either the FBI field 
offices or the OKBOMB task force. Both share responsibility. 
However, we did not find that any FBI employees intentionally 
withheld from the defense documents they knew to be 
discoverable.
    Our report criticizes most severely several senior FBI 
managers for how they responded when they became aware of the 
belated documents problem. The issue was first discovered in 
January 2001 as part of a routine archiving process by two 
conscientious analysts in the FBI's Oklahoma City field office.
    These two analysts found copies of documents that had not 
been turned over to defense attorneys and materials sent by the 
offices to Oklahoma City. Yet, the senior managers to whom they 
reported the problem failed to adequately manage the document 
review process and failed to set any deadlines for completing 
the project.
    Most troubling, the managers failed to notify FBI 
headquarters or the prosecutors in the case until the beginning 
of May, 1 week before McVeigh's scheduled execution. We believe 
their failure to take timely action to resolve or report the 
problem was a significant neglect of their duties and we 
recommend that the FBI consider discipline for these failures.
    Let me now turn to the question of why the documents were 
not produced before trial. We were able to determine a number 
of factors that contributed to the belated disclosures.
    First, the FBI's system for handling documents is 
inordinately complex. Documents are stored in many different 
locations. Various data bases are used to track the documents, 
and information is placed on different types of forms that are 
handled in different ways.
    Second, despite instructions to send everything to the task 
force, some agents failed to send documents because they deemed 
the information as insignificant to the OKBOMB investigation.
    Third, some employees incorrectly assumed that other 
employees had sent the documents in.
    Fourth, it appeared that many field offices did not follow 
instructions from the OKBOMB task force to search their files 
and ensure that all investigative activity had been properly 
documented and sent to the task force.
    We found that the task force also shares responsibility for 
documents not being disclosed. For example, we found that 
documents sent to the task force were lost or placed in the 
wrong file drawer.
    We carefully examined the allegation that the Government 
intentionally withheld documents it knew to be discoverable 
from the defense. We questioned FBI employees and former 
employees, analyzed circumstantial evidence, and investigated 
documents the defense alleged showed that the Government 
intentionally withheld exculpatory evidence. We concluded that 
the evidence did not support a finding that Government 
personnel withheld evidence it knew to be discoverable.
    We also examined the actions of the FBI after the belated 
documents were publicly disclosed in May 2001. FBI officials at 
headquarters incorrectly placed blame on the FBI's computer 
system and FBI field offices, when the fault lay both with the 
field offices and the task force. In addition, we saw many 
untimely and inaccurate responses from the field offices to the 
directives in 2001.
    The issues encountered in this case shine light on several 
of the FBI's longstanding problems: antiquated and inefficient 
computer systems, inattention to information management, and 
inadequate quality control systems. The FBI has both a paper 
and an electronic information system in place, neither of which 
is reliable. Although the belated documents issue was presented 
as a discovery problem, the FBI's troubled systems are likely 
to continue to impede its ability to perform its mission.
    In our report, we detail many recommendations to help 
address the problems we found. Following are highlights of some 
of the recommendations.
    First, the FBI needs to foster an attitude throughout the 
entire agency that information management is a critical part of 
the FBI's mission. It is not the glamorous part of the mission, 
but it is an essential part. Unless the FBI as an institution 
ensures that sufficient emphasis is placed on managing the mass 
of information it collects, problems will persist.
    Second, FBI automation systems must be reliable and user-
friendly and they must integrate data bases that are used for 
many different functions throughout the FBI.
    Third, the FBI must simplify its document handling process. 
The FBI's current system requires paper documents to move 
through multiple steps and locations, creating many 
opportunities for them to go astray. The FBI also should reduce 
the mind-boggling variety of forms it uses.
    Fourth, the FBI must provide increased training on its 
automation systems in document handling. They should be 
required core skills for FBI employees, including agents and 
supervisors, and refresher training also should be required.
    In conclusion, the significance of this case is much 
broader than the impact of the problem in the OKBOMB 
investigation. The FBI has known about these problems for some 
time either because the OIG has discussed them in other reports 
or because the FBI has found them through its own reviews. But 
until recently, the FBI has made insufficient efforts to 
correct these deficiencies.
    FBI employees need and deserve better computer systems and 
support. As the tragic attacks of September 11 revealed, the 
FBI will continue to be faced with cases of the scale and 
dimension of OKBOMB, and the lessons learned from it will 
continue to be important.
    To adequately fulfill its responsibilities in major cases, 
as well as in smaller ones, the FBI must significantly improve 
its document handling and information technology. This requires 
a sustained commitment of resources and effort, but the FBI 
must make this commitment if it is to avoid the serious 
problems that occurred in the OKBOMB case.
    That concludes my statement and I would be pleased to 
answer any questions.
    [The prepared statement of Mr. Fine appears as a submission 
for the record.]
    Chairman Leahy. Thank you, Mr. Fine. One of the reasons why 
I and many others have been urging the administration to do 
what they can to speed up this ability to pull up information 
is because, as I said earlier, I worry when the FBI doesn't 
know what it knows. They have information that might stop a 
terrorist bombing or might stop something from happening, but 
if they don't know it is there, it doesn't help.
    The rest of the panel will be Mr. Bob Chiaradio, who is the 
new Executive Assistant Director for Administration.
    I believe you used to head the Tampa office. Is that 
correct?
    Mr. Chiaradio. Yes, sir.
    Chairman Leahy. Bob Dies is the Chief Technology Officer, a 
former IBM executive who was very helpful to the committee last 
summer. Bill Hooten is the new Assistant Director for Records 
Management. He recently came to the FBI from a private sector 
position at SAIC.
    A vote has started, and we will recess for about five or 6 
minutes so that we can go over and vote because I don't want to 
interrupt the testimony of any of the three of you. I will come 
right back and we will begin the testimony of the remaining 
three and then go to questions.
    I should note that Mr. Chiaradio will be the one who will 
testify, and Mr. Hooten and Mr. Dies will be there to answer 
questions, as they have for the committee before.
    Thank you.
    [The committee stood in recess from 10:01 a.m. to 10:19 
a.m.]
    Chairman Leahy. Thank you for your patience.
    Mr. Chiaradio, would you please go ahead?

STATEMENT OF ROBERT CHIARADIO, EXECUTIVE ASSISTANT DIRECTOR FOR 
ADMINISTRATION, FEDERAL BUREAU OF INVESTIGATION, DEPARTMENT OF 
   JUSTICE, WASHINGTON, D.C.; ACCOMPANIED BY BOB DIES, CHIEF 
 TECHNOLOGY OFFICER, FEDERAL BUREAU OF INVESTIGATION, AND BILL 
  HOOTEN, ASSISTANT DIRECTOR FOR RECORDS MANAGEMENT, FEDERAL 
                    BUREAU OF INVESTIGATION

    Mr. Chiaradio. Thank you. Good morning, Chairman Leahy, 
members of the committee. We appreciate the opportunity to be 
here to discuss the myriad of things we are doing in response 
to the issues properly identified by Inspector General Fine. We 
also appreciate this committee's longstanding interest in our 
ongoing efforts to rebuild our antiquated information 
infrastructure.
    We commend Inspector General Fine and his staff for a 
thorough, objective, and independent examination of these 
issues. His report is instructive and his recommendations 
constructive. Because his findings go to the very heart of how 
we conduct one of our core functions, Director Mueller has had 
the report made available to all employees and has made it 
recommended reading for all FBI management and supervisory 
personnel. Its lessons will be part of our training and its 
relevance and importance will live far beyond today.
    Last May, then-Director Freeh outlined for Congress the 
massive nature of the OKBOMB investigation and the virtual 
flood of documents and information created during this course. 
He also expressed regret that our shortcomings pertaining to 
the records had overshadowed the enormity of the sacrifices and 
accomplishments of those agents who successfully investigated 
this case.
    He candidly admitted that, ``We simply have too little 
management attention focused on what has become over time a 
monumental task. The seemingly mundane tasks of proper records 
creation, maintenance, dissemination and retrieval have not 
received the appropriate level of senior management attention. 
This episode demonstrated the mundane must be done as well as 
the spectacular.'' He then outlined a number of steps that the 
Bureau had embarked upon to fix some of these shortcomings.
    On Tuesday, Director Mueller stated that ``Sound records 
management and document accountability are at the heart of the 
FBI's ability to support investigations and prosecutions with 
information integrity. There can be no doubt about the 
accuracy, completeness, and proper disclosure of the records we 
compile during our investigations and used by prosecutors in 
the support of prosecutions. The ability to maintain, access, 
and retrieve documents is critical to our mission and equally 
critical to protect the rights of those charged with crimes. It 
is also fundamental to robust information-sharing capacities, 
both functions which we are readily enhancing. In short, 
records management and integrity are core functions that demand 
the same level of attention and accountability as any function 
we undertake. It must be a part of the Bureau's culture.''
    As Inspector General Fine outlined for you, there are host 
of contributing factors. The methods we use to record and 
retrieve information are too complex. Our automated case system 
was not very effective in identifying information or supporting 
the investigation. Our technology was inadequate. We lacked a 
true information management system, and what we do have is not 
user-friendly. Many of our employees lack the training 
necessary to be fully engaged in an automated environment, and 
a host of other issues as well.
    But what we thought when this issue first surfaced and what 
we believe now has been confirmed by Mr. Fine. This is not a 
computer glitch. Although a more robust system would have 
helped, it is a management and cultural issue which must be 
forthrightly confronted.
    We can add technology, simplify our procedures, and 
dramatically reduce the opportunities for human error. Doing 
those things are relatively simple. What we must do and what we 
are doing is recognizing information management as the core 
function that it is. At all levels, we must lead the Bureau 
back to where the function is accepted as second nature. We 
must put in place the structures and automation that fully 
support this core function, and we must inculcate in every 
employee, ourselves included, that this new way of doing 
business is the only way acceptable. We must improve our 
records management practices, not simply automate what we have 
been doing for decades.
    We are taking specific actions to address each concern 
raised by the Inspector General and a number of significant 
steps are well underway to overhaul our Bureau-wide records 
management capabilities to increase accountability for 
compliance with established record procedures and to put in 
place the training and skill sets necessary to bring about full 
acceptance of a near-paperless environment.
    Borrowing a little from what my boss has said, with the 
help of the Congress we have restructured to recognize that the 
creation, maintenance, use and dissemination is a core function 
that must be fully supported by management as a priority.
    We have created a Records Management Division to ensure 
executive direction and full-time oversight over all records 
policies and functions, consolidating all records operations to 
ensure consistency, thoroughness and accountability. A 
professional records management expert, Mr. William Hooten, 
here with us today, has been hired from the private sector to 
run that division. He has been charged with modernizing our 
enterprise-wide records systems, developing comprehensive, 
enforceable policies and procedures, and to ensure records 
integrity. He is also charged with putting in place those 
quality control mechanisms that will detect anomalies and 
problems early on.
    It is critical that we manage information, not just the 
systems that support our records. Congress has funded, and we 
are implementing, extensive agency-wide training aimed squarely 
at reforming our culture to one that exploits and incorporates 
technology in our everyday way of doing business.
    Director Mueller is personally providing the leadership for 
this. We have retrained our employees on proper document 
production, management and retrieval, and the importance of 
records management as a core function. There will be continuous 
training over the course of an employee's career.
    Of course, basic to any modern system of records is a 
modern information technology system, and modernization of our 
information technology, as this committee knows, is one of our 
top priorities. We are making sustained progress in this area. 
Congress has approved funding for the FBI to upgrade technology 
and infrastructure for organizing, accessing, analyzing and 
sharing information throughout the FBI and beyond.
    We are replacing the now antiquated automated case system 
in favor of a multimedia, near-paperless virtual case file, 
with significant improvements and capabilities that greatly 
reduce the possibility that future documents will be misfiled, 
lost, or otherwise fail to be produced. The new system will 
dramatically decrease the potential for human error, both 
automatically doing many functions now done by manual 
intervention and by substantially reducing the number of 
opportunities for problems to occur that are inherent in our 
current systems.
    This new case file document management system, designed 
with substantial input from street agents, will be of benefit 
in greatly simplifying the records creation and maintenance 
processes, being user-friendly, and allowing us to manage leads 
much more effectively.
    The FBI's computer network is being completely revitalized 
to provide a data warehousing, collaborative environment, 
instead of application stovepipes. The creation of data 
warehouses and ample supporting networks provide easier and 
more robust access and sharing of information, and results in 
integrated data bases. The need for ad hoc crisis software 
applications will be eliminated. Private sector support which 
will allow commercial software and professional scanning, 
indexing and storage of documents is being used to move us 
rapidly out of the paper environment that was so vexing in the 
OKBOMB investigation.
    All of these systemic changes and many others, including 
everything Mr. Fine recommended, are critical components to 
what must be a sustained agency-wide effort. These things are 
as important to protecting rights as how we execute warrants 
and testify in court. The challenge is great, especially the 
challenge of changing the culture. We believe we are on the 
way.
    Finally, although his exhaustive investigation found no 
evidence of any intentional effort to withhold information from 
defense counsel, the Inspector General's report also criticizes 
actions of certain FBI personnel. We are reviewing these 
criticisms and will move quickly to take any appropriate 
disciplinary action. In the end, there must be accountability.
    At this time, I am prepared to present a brief 
demonstration on the prototype of the virtual case file that is 
currently in development or answer any questions, as the 
Chairman would like.
    Chairman Leahy. I assume throughout all that you are doing 
the appropriate firewalls, depending upon classification and 
that sort of thing.
    Mr. Chiaradio. Absolutely. Within the branch created by 
Director Mueller in my area of responsibility is a new Security 
Division. Integral to this new system will be overlays and 
internal security, external security and the like.
    Chairman Leahy. Go ahead with your demonstration.
    Mr. Chiaradio. Mr. Chairman and members, I have circulated 
before my testimony this morning four charts which I will refer 
to in the presentation as slides.
    The first slide is basically a virtual case file. What we 
would have is a sign-in screen. The IG found that ACS was so 
difficult to use that many agents and supervisors had abandoned 
their effort to use it. In fact, they would rather rely on 
secretaries and administrative personnel.
    Our current system is 1970's and 1980's technology, green 
screen emulators with F key functionality. For example, it 
takes more than a dozen screen entries just to enter one 
document and upload it into the system. The virtual case file 
is designed to operate in a browser-based technology, point and 
click, user-friendly, things that we are using today in our 
everyday lives. The presentation will be more intuitive.
    Security will be essential, as the chairman asked, as an 
integral component. Access will be password-controlled, roll-
based authorities, possessed of robust features for document 
management control, auditing unauthorized access, the things we 
found with the Hanssen investigation.
    We will have system-wide activity approval logs which will 
track documents where they have been throughout the process 
from creation into the final system, through what approval 
processes they travel.
    Chairman Leahy. You will also be able to follow, then, who 
was picking these documents up, too?
    Mr. Chiaradio. Absolutely. The system will be able to show 
us who may have printed a document, who looked at a document, 
where the document is. When it is needed for discovery, it will 
be in one place. It can't be misfiled. It can only be printed 
or burned onto a CD and transmitted to the defense or to the 
prosecutors.
    We have a case document access review, where the agents 
will be responsible to go in on their own on a certain that 
will be designed that they go in and they see who footprinted 
into their case, who was supposed to be in there and who not, 
with the responsibility to elevate those concerns when found.
    I will take you to the second slide. Once we would sign 
into a case, a case agent would now see----
    Chairman Leahy. Incidentally, this kind of thing you are 
talking about--I am sure Judge Webster's review people are 
probably looking at, too, I would hope.
    Mr. Chiaradio. Ken Sensor, the Assistant Director in the 
Security Division, has had a series of meetings with Judge 
Webster and his committee.
    Chairman Leahy. Thank you.
    Mr. Chiaradio. On the second page, on the slide, we were 
getting to a case file management system. Typically, this would 
be the prototype of what an agent would see when they logged in 
in the morning. Although the paper obviously doesn't reflect 
it, there is a red arrow circling up in the top case. That is 
going to be indicative to a case agent or an investigative 
employee that something new has happened in their case. A lead 
has come in from another office, a serial has been sent to 
them, a supervisor has sent instructions. There is not a 
chance, again, for human error. We are trying to minimize at 
every opportunity where human intervention is necessary, to 
have automation and technology assist us.
    What we would see here is the ability to track leads, to 
control documents, to know when there is a document and 
activity has taken place in the case. The virtual case file 
will be interactive, intuitive processes, the ability to see 
one's case and lead assignments on a screen, rather than in 
paper folders or in drawers or in file cabinets, intuitively, 
again, to point and click to a file in your area of interest.
    We would, for example, in this case click onto the first 
case and bring you to slide three, and this would be what was 
going on in this particular case. Again, that arrow or that 
spinning red notification would show you that what had happened 
in that case was a photo spread had come in, which is something 
that we don't have in ACS. We don't have the ability to put in 
any scanning or multimedia. It is only documents that we may 
create in our own environment, nothing external from another 
agency, for example, no ability to put a picture in.
    During the 9/11 attacks, shortly thereafter, I was the 
agent-in-charge in Tampa and headquarters wanted to send us 
pictures of the 19 hijackers. They couldn't use our 
infrastructure to do that. It had to be put on a CD-ROM and 
mailed to me.
    Chairman Leahy. Also, I would think that you could do that 
in a hurry. Another part that is helpful is so many times it is 
frustrating. You hear on the news, whether it is the FBI or the 
chief of police in a major city or somebody like that will say 
there has been this terrible crime. We have the description and 
artist's sketch of such-and-such a person, and whoever is 
reporting the news is talking about it and I think the average 
American sits there saying, well, put the sketch up so we can 
see it.
    Also, in those cases where you have got something and the 
Bureau determines that it makes some sense to let the press 
know this, you can immediately disseminate it to hundreds of 
outlets, thousands of outlets, if need be.
    Mr. Chiaradio. Absolutely. The virtual case file is one 
part of Trilogy, and Trilogy is the big project that the 
Congress has funded for us. By this summer, we hope to have 
deployed to the field the robust network, the desktops, the 
hardware, and the presentation software. This notion of Trilogy 
is in a development stage now called joint application design 
with the contractors and the users.
    An important point to add about the virtual case file with 
respect to multimedia capabilities is the chairman's comment is 
we don't know what we know. We don't know what we know because 
a lot of the information we obtain and we collect in our files 
remain in a paper format. They are externally generated. They 
sit in file cabinets.
    The multimedia capabilities of the virtual case file will 
give us the ability to bring that information into a digital 
format into data warehouses, to be able to access it, to be 
able to work against it with robust search engines and the 
like.
    The FBI's current document management system requires paper 
through multiple procedures and steps. The IG had found that 
and it was replete through his report. The quote was that it 
was ``mind-boggling,'' the variety of forms. What we are doing 
in the virtual case file development is eliminating to a great 
extent the forms in our investigative cases. We are getting 
down to one form.
    We are going to obviate the need to have multiple reporting 
and stovepiping of applications by designing on the front end 
what we may need as an organization and not have to create 
automation to compensate for forms that were designed in the 
1930's, the 1940's and the 1950's. We need to not just 
automate, but we need to revitalize the way we do our business.
    We would have this project, virtual case file, delivered, 
certified and accredited for some months. In the interim, under 
the direction of Mr. Dies, and also our Information Resources 
Division, we are going to do some things to ACS.
    We are going to collapse those 15 screens to upload a form 
down to 2 or 3. We are going to get our work force trained and 
start to get them ingrained in a culture of using this new 
technology for our organization anyway--the point-and-click, 
the Web-basing. So by the time we turn on our virtual case 
file, we will be prepared.
    We have a robust training program put in place not only on 
the hardware deployment but on the software deployment. We have 
about $20 million set aside to do enterprise-wide training to 
get our organization prepared.
    The last thing I will show on slide four is just an example 
of the photo spread, things that we can't do today, have 
multimedia, simply just transfer a photo spread of Mohammed 
Atta, as I just gave you a graphic anecdotal example of what 
happened when I was running the Tampa field office.
    ACS will allow full-text retrieval. It would be very time-
consuming before we had this to even get anything out of ACS. 
You might not even know what you are looking for. The search 
engines that are available today to search my name--you would 
have to have all of the letters in almost exactly the right 
order to even know if I was in your system.
    We are working with the intelligence community, with the 
Mormon Church on some of the search engines they use for 
genealogy review and research to put a more robust search 
engine in there so we can pick out information that may be in 
our data bases; foreign names, for example, as a good start.
    The most important thing is to get our data bases together. 
With this virtual case file and the data warehousing that we 
are going to create, we are starting with the five most 
critical investigative applications. We have about 42 that have 
been created as work-arounds to a bad system.
    Some of those investigative warehouses--the need for them 
will be obviated by what we are doing with these five new data 
base consolidations into one warehouse. The others are going to 
be addressed after Trilogy in future appropriations requests 
and in future efforts by our Information Resources Division.
    I can answer any questions or I could go further. There are 
many features that we have in this prototype, but I wanted to 
just give you a few examples of how accurate Inspector General 
Fine's report was on our shortcomings and how we will use every 
possible thing we can as far as technology to minimize the 
opportunity for human error. But that is not the final answer. 
We need to do more. We need to do more culturally. We need to 
do things in our organization to put an emphasis on this, on 
the importance of data management.
    [The prepared statement of Mr. Chiaradio appears as a 
submission for the record.]
    Chairman Leahy. You have so many superb men and women in 
the Bureau who are well-trained. They go through intensive 
training, as you know, and I want them to feel that when they 
are there what they are doing is actually being paid attention 
to, and if they are involved in cases, they are going to be 
heard.
    Technology is not the only answer, of course, but if you 
have technology that really brings the Bureau together rather 
than balkanizing it, that is extremely important. But then you 
have to do what Mr. Fine's report points out. You have also got 
to go to the basic culture of the Bureau to make sure that as 
you break down the walls, you really want everybody in.
    If I could, I would like to go back to the Inspector 
General. I want to make sure I understand the sequence of 
events correctly, and I was reading through the material last 
night.
    In January, the potential discovery problem is first 
brought to the attention of the senior FBI official who was 
running an entire FBI field division. From that time until May 
7, the FBI conducts a search in most every field office in the 
U.S. for documents which were not turned over. Memos were being 
sent. Documents were being shipped to Oklahoma City and 
analyzed there. Supervisors are flying in from Dallas to review 
the materials; they have meetings. So there is a wide-scale 
operation going on in the Bureau. As it is proceeding, 
documents are being discovered that people in the FBI suspect 
may not have been turned over to the defense, even though they 
should have been.
    Now, I am assuming this is an ongoing process. All of these 
documents didn't simultaneously appear the morning of May 6. So 
am I right that it essentially happened over a 5-month period 
and no one in the FBI even mentioned this potential problem to 
either the prosecutors who were working with them on the 
McVeigh case or to officials in the Department of Justice?
    Mr. Fine. That is correct. No prosecutor, no one in the 
Department of Justice knew about this issue until May 7.
    Chairman Leahy. What does that say about the atmosphere in 
the FBI and how you would deal with these kinds of problems?
    Mr. Fine. I think that is not a good atmosphere. When we 
talked to the inspector in charge, Mr. Defenbaugh, and asked 
him why he didn't expose the potential problem, he had a number 
of reasons, including he wanted to research the problem, he 
wanted to ensure that he was thorough. But when we asked him 
why didn't you tell somebody in the Justice Department, a 
prosecutor, that you had a potential problem so that they could 
deal with it, one of the answers he gave was I didn't want it 
to leak out, I didn't want to cry wolf.
    That, to me, discloses not a good relationship that you 
could not tell a prosecutor and let the prosecutor provide 
guidance on the appropriate way to deal with this potential 
issue, even if you think you may find documents later on. We 
believe that the Department of Justice and the prosecutor 
should have been notified, and should have been notified early.
    Chairman Leahy. Well, I would think so because I know then-
Director Freeh, like Director Mueller today, both of them are 
people who want the rules followed. Whether they agreed or 
disagreed--I am not saying they did disagree, but whether they 
agreed or disagreed with the court's ruling on discovery, I 
don't think there is any question that former Director Freeh 
and current Director Mueller would want those rules carried 
out.
    There is no question in my mind that Attorney General 
Ashcroft, just as his predecessor, Attorney General Reno--if 
there was an order for discovery, they would want it carried 
out. What worries me is that somebody down the chain puts the 
Attorney General and the FBI director and the court and 
ultimately the public in a difficult position.
    Did any of the people you dealt with in the FBI accept 
responsibility for their actions or inactions, as the case may 
be?
    Mr. Fine. We found actually a notable and distressing lack 
of accountability, particularly on this issue. When we were 
talking to the people involved, they would say that it was 
somebody else's job to notify the prosecutors; it was somebody 
else's job to ensure that the review of the documents was done 
in an expeditious way.
    One person kept saying, well, I was just a consultant to 
the problem, or I was in the problem and I was out of the 
problem. We believe that many of them should have taken 
responsibility and ensured that the process was reviewed 
quickly; if there was a problem, in fact, and that the 
prosecutors in the Department of Justice and FBI headquarters 
be notified. And none of them took the appropriate actions, in 
our view.
    Chairman Leahy. The reason I ask these questions is not to 
beat up on the FBI by any means. In this case, the Timothy 
McVeigh case, all the accounts I have read of it--and I have 
talked with the prosecutors involved with it. Obviously, when I 
was prosecuting cases, I never had anything that horrendous. No 
prosecutor has ever had anything that horrendous prior to that 
time and we hope that they don't again.
    I looked at that case as a textbook of the way a case 
should be run. You had a judge who knew what he was doing who 
was in control of the case. You had highly qualified defense 
attorneys, highly qualified prosecutors, and a case of enormous 
importance to the United States. It was handled well, and I am 
convinced of the defendant's guilt. There is no question in my 
mind from everything that I have read about it that he was 
guilty; no question that the law was followed appropriately on 
the sentencing phase and death penalty phase. All of that was 
done very, very properly.
    What I worry about is something like this, where there is a 
mistake and somebody saying I don't want to tell anybody, and 
it may end up jeopardizing that whole thing. You know as a 
former prosecutor in a case like that it would be the most 
difficult thing in the world to re-try that case. You could do 
it, but it would be twice as hard to re-try a case, usually, 
that it is to try it in the first place.
    I worry about whether these kinds of mistakes in the 
handling of documents and information might be the same kinds 
of flaws that hampered the FBI's sharing of counter-terrorism 
information internally and with other agencies prior to 
September 11.
    You state in your report on page 176, ``The tragic attacks 
occurring on September 11, 2001, demonstrate that the FBI 
continues to be faced with cases of the scale and dimension of 
Oklahoma City, and the lessons learned from the Oklahoma City 
case continue to be relevant. Though Oklahoma City occurred 
over 6 years ago, the FBI's document management process remains 
generally unchanged, as does the technology on which it 
relies.''
    You further point out that the failure to manage 
information properly has important implications for the FBI's 
ability to share information, both with prosecutors and other 
law enforcement agencies, which you state is even more 
important in the wake of September 11. I happen to agree with 
you. I am very, very worried that these other agencies don't 
have it.
    Do you think that these problems that you found hampered 
the ability of the FBI, our premier investigative arm in this 
country, from being able to adequately share counter-terrorism 
information prior to September 11?
    Mr. Fine. I think the FBI is in the business of gathering, 
storing, tracking, analyzing and sharing information. If they 
don't have adequate technology and information systems to be 
able to do that, I think it does hamper them.
    I can't say what happened in the September 11 cases, but 
the vulnerabilities that we found in the OKBOMB case, I 
believe, have significant impact and effect on its abilities 
throughout major cases, as well as in smaller cases. So I do 
believe that these issues affect everything the FBI does.
    Chairman Leahy. Thank you. Everybody agrees that given the 
current state of the FBI's information and computer technology, 
in one sense the FBI does not know all that it knows. Does 
anybody disagree with that?
    [No response.]
    Chairman Leahy. Now, I talked to the Attorney General last 
November and I told him he was right to focus the Department of 
Justice and the FBI on protecting America from further 
terrorist attacks. I am glad to see that that focus was 
emphasized after September 11, but if you are going to plan 
effectively for the future, you have to know what worked or 
didn't work in the past.
    I have asked the Attorney General to consider an internal 
review of the FBI's counter-terrorism performance prior to and 
bearing on the attacks of September 11 to see if there are any 
lessons that we might learn there. I asked the FBI director 
last October to preserve all the FBI's records and information 
so that such a review could be conducted, even if we found 
areas where mistakes were made. It won't surprise you to know 
that Director Mueller said, of course.
    Would that kind of review be useful?
    Mr. Fine. I think reviews are useful to determine the 
lessons learned, the problems that occurred, and how to prevent 
it from happening in the future. I hope that this review is 
helpful in the information technology field. I believe other 
kinds of reviews can have important effects and help in the 
future. So I do believe that what we do, what the inspector 
generals do, performs a useful function.
    Chairman Leahy. Does anybody want to add to that?
    [No response.]
    Chairman Leahy. I will turn to Senator Sessions.

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM THE STATE 
                           OF ALABAMA

    Senator Sessions. Thank you, Mr. Chairman. I really have 
the greatest respect for the FBI. I have worked with them for 
quite a number of years and seen the integrity and dedication 
of the agents, their intelligence and ability and training.
    The judge said they are not disciplined. I think for the 
most part FBI agents are disciplined, but it is not a perfect 
situation. Mr. Fine, I think you are touching on the good and 
the bad there.
    Director Mueller, I believe strongly, has the kind of 
experience to understand just this problem. He has been a big-
time prosecutor of criminal cases all his life. He is a career 
prosecutor. He admires the FBI agents that he has worked with, 
and I have asked him about it. But I also believe he would 
understand how to avoid this kind of thing happening in the 
future. For that, I am very grateful that we have him at this 
time because it is time to confront some of the problems in the 
FBI and try to get past those.
    Your report, Mr. Fine, seems to touch on that. Your answer 
to Senator Leahy's questions were, I think, candid and 
noteworthy and important.
    Mr. Chairman, I love the FBI and I believe it is the 
premier law enforcement agency. You are correct. They are 
accountable to this Congress and to the American people, and 
this is the best way that the American people will have 
confidence in it, to have public hearings and talk about the 
problems. We should do that, and I salute you for going forward 
with this review.
    There are good things, I think, here that maybe a lot of 
people didn't notice. It didn't surprise me at all. I think I 
understood precisely how this problem with the McVeigh case 
happened. It was not intentional, as you found. As a matter of 
fact, there would be no real motive in terms of hurting the 
defendant for an FBI office in Miami to fail to send in an 
insignificant document to the prosecutors in Oklahoma City, 
would there, Mr. Fine?
    I mean, it was inadvertence and lack of attention to detail 
rather than some attempt to compromise the prosecution or hurt 
Mr. McVeigh's chances.
    Mr. Fine. As I stated, we didn't find any intent on 
anybody's part to withhold discoverable documents that they 
knew to be discoverable from the defense. It was a wide range 
of documents. Many of them were utterly useless and 
insignificant. There were documents in virtually every field 
office. It was a widespread failure that we found. We did not 
find it to be an intentional failure.
    Senator Sessions. What happened was in that court, that 
judge looked at that prosecutor and issued an order about what 
would be disclosed. It was a broad disclosure order that 
required documents and any interviews relating to the case, I 
assume, to be disclosed.
    Mr. Fine. Actually, Senator Sessions, it was an agreement 
by the Government and the defense for this broad discovery.
    Senator Sessions. But essentially it was backed up by the 
order of the court. Is that correct?
    Mr. Fine. I believe the court did recognize it and order 
it, but it was entered into by the Government. The reason they 
did that was to ensure that the defense got the evidence, to 
show that there would be fair access to the evidence, and also 
to try and avoid discovery disputes.
    Senator Sessions. Well, you make a good point because I am 
not sure under the strict rules of evidence all these documents 
would have been admissible, Mr. Chairman. Mr. Fine makes a good 
point. In fact, they probably were not. What happened was the 
prosecutor voluntarily agreed to what we refer to as an open 
case file. We will give you all documents, all interviews 
related to the case.
    What was the language they actually used?
    Mr. Fine. The language was never written down. This was an 
agreement entered into by the prosecution and the defense and 
it was never memorialized in writing. But there was as clear 
understanding that all FBI 302s--that is, records of 
interviews, inserts, 1-A documents, evidence and other things--
had to be turned over to the defense or made available to the 
defense.
    Senator Sessions. So then a directive went out from the 
Oklahoma City investigative team to every FBI office in 
America, because this was such a big case and it impacted the 
Nation and leads were being run in every office in America, to 
send in all your information. Some of them did and some of them 
did not, and that is what caused the problem fundamentally?
    Mr. Fine. Fundamentally, that is what happened. There were 
many directives sent to the field offices saying send in 
everything you have on the OKBOMB case, and we found that in 
many cases those offices didn't. And in many cases, they did 
send it in and it was lost at the task force.
    Senator Sessions. Now, on the negative thing here to the 
FBI, I have sensed on occasion--and I will ask if you found it 
here--do you think some of the people who got those inquiries 
and those telexes to send in information said this is not 
discoverable stuff, we don't really have to turn this over, I 
am not sending it in? Do you think that possibly was in the 
back of some people's minds, even though the prosecutors and 
the judge and the defense counsel were expecting all documents 
to come in?
    Mr. Fine. Yes, we found that. We found that some agents 
used what they thought was their discretion to say this is 
irrelevant, non-pertinent, and it doesn't need to be sent in. 
But we found that they should not have done that, that they 
were specifically directed to send in everything and let the 
task force decide what had to be turned over. So, yes, that did 
happen.
    Senator Sessions. Sometimes, people get to thinking instead 
of following the direction of their bosses, and that can be 
dangerous if you don't know all the facts in the case, as 
obviously here. So that really compromised the case, I would 
suspect, that kind of mentality, inadvertence or whatever.
    All the documents--and how many were produced? Was it a 
million?
    Mr. Fine. There were millions of documents made available 
to the defense. There were 27,000, I believe, memoranda of 
interviews. I think there were 13,000 pieces of evidence. There 
were millions of hotel receipts, motel receipts, rental car 
receipts that were being tracked and made available.
    Senator Sessions. And many of them, as it turned out, had 
absolutely nothing to do with the case.
    Mr. Fine. That is what the judge found.
    Senator Sessions. I remember when I first began as a 
prosecutor we had a great prosecutor in the South District of 
Alabama. The FBI knew him and he was renowned. His name was 
Ruddy Favre. They have named one of the rooms in the Federal 
U.S. Attorney's office now for Ruddy. He died a number of years 
ago.
    He would tell all young agents this: don't' you worry. If 
there is an error in this case, do not cover it up. Come and 
tell me as soon as possible and I will take care of you. He 
said that because he believed that there was almost a zero 
tolerance for any error in the FBI. The young agents were 
afraid that if they had made a mistake, if they told it, their 
careers could be ruined. They could be adversely disciplined 
for some decision in a complex matter that they hadn't had 
experience with and it would compound the error.
    Do you think there is a culture afoot in the FBI that still 
makes agents reluctant or fearful about coming forward at the 
earliest possible date if they may have made an error, even an 
unintentional error?
    Mr. Fine. Yes, I think it exists to come extent. I don't 
believe it is all over the FBI, but I think that attitude is 
present.
    I remember testifying at a hearing before this committee 
last year at which Senator Danforth made that very point. He 
said the big problem is not the mistake, it is the failure to 
disclose the mistake. That is what he thought the FBI should 
focus on, ensuring that people who make mistakes feel free and 
come forward and disclose those problems. I agree with that.
    Senator Sessions. To me, that is a problem we need to get 
beyond. You don't want to accept lack of highest possible 
standards. You don't want to accept mistakes on a regular 
basis, but you also want people to let you know. The official 
spokesman for the FBI in the official arena, the courts, is the 
United States Attorney.
    Do you think that the agents could have been more 
forthcoming and could have been more cooperative with the 
prosecutors in the case on these subjects?
    Mr. Fine. Well, I think in the case itself I don't have a 
comment on that. I believe that the FBI--and I want to point 
this out: This should not diminish the enormous efforts of the 
FBI in investigating OKBOMB and bringing to to a successful 
prosecution, including the person that we criticize, Mr. 
Defenbaugh.
    He was the inspector in charge of that investigation and he 
deserves wide credit for the way he handled that investigation. 
We criticize strongly how he handled the problem when the 
belated disclosures came forward. He did not disclose that 
potential problem and we think he should have at an early 
stage. I don't think he intended to cover it up completely. I 
think eventually he was going to tell about it if all of the 
research confirmed there was a problem. We think, though, he 
should have disclosed that problem very early on.
    Senator Sessions. Well, I think you are correct. I know 
Danny Defenbaugh and I know he is a good man. He gave his life 
to the FBI and his country, and I believe he was working with 
just incredible tirelessness to make this case successful. I am 
sure it is a great embarrassment and painful for him to have 
this event--after all the things that they did successfully in 
the case, have this event come back and cause a problem.
    He did delay some reporting it. What was it, a month or 2 
months?
    Mr. Fine. No. From the end of January, when the problem was 
initially disclosed, it went to about March, when it was very, 
very clear that they had not been able to find the documents 
and that there was a significant number of problem documents. 
And he did not disclose it until May 7.
    Senator Sessions. May 7, and that was shortly before the 
execution date?
    Mr. Fine. The execution date was May 16.
    Senator Sessions. So they decided to do their own internal 
review to make absolutely certain that this had to be 
disclosed. When they realized that it had to be, they did so, 
but late?
    Mr. Fine. Well, the conscientious employees that I 
described, the two analysts, when they get the documents, they 
disclosed it to their supervisors, including Mr. Defenbaugh, 
and they went forward with their review. But even by March, it 
was clear that there was a problem with the documents and they 
continued their review until every single document had been 
analyzed and reviewed in this very time-consuming and laborious 
process.
    That happened at the end of April, and so they were finally 
mailed to Mr. Defenbaugh on May 7 and he disclosed it then. But 
in our view, his failure to disclose the potential problem 
earlier was a significant neglect of his duties.
    Senator Sessions. I would agree. I think there was a delay 
there, an unfortunate delay. It was not held too late in the 
sense of the case. He did do it before the execution date, but 
there was very little time. It should have been done sooner.
    Thank you, Mr. Chairman. I have gone over my time.
    Chairman Leahy. I gave you extra time. It is an important 
point. We all recall that because they had been so late in 
reporting this, the Attorney General had to delay what had been 
the scheduled execution date in that case to have it reviewed. 
I said at the time I thought the Attorney General did the right 
thing. I also know in my private conversations with him he was 
not happy to have been put in that position. He had no problem 
in doing what was the right thing to do, but he was not very 
happy that when they started knowing about this early in the 
year that nobody had come forward.
    Senator Grassley has been at several other meetings, and 
this is an area where he has not only enormous expertise but 
has been heavily involved. I appreciate him stepping out of his 
other hearing and I would yield to him.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. Well, I thank you, Mr. Chairman, for 
doing that, and I want to thank you on this issue and a lot of 
other issues for your cooperation with me, and particularly 
your leadership on the bill that we recently announced.
    First of all, I want to take the time to commend General 
Fine. I don't know you very well, but I want to get well 
acquainted with you. I think this report and the work that you 
have done on the FBI investigation, the McVeigh documents, et 
cetera, have been worked the way that inspector generals ought 
to work.
    I say that not only from my observation, but I have a 
former employee who has been observing inspector generals' work 
for a long period of time. He is no longer in my office, but he 
made a very positive comment to me about your work, and I kind 
of use that as a standard of judging some of the work. So I 
think I not only want to commend you for this report, but I 
think for doing what inspector generals should do.
    The most important, key point there is independence, and if 
sometimes you don't feel you have the independence that I think 
inspector generals ought to have and I think that the law 
allows you, I hope you will let me know.
    I think you have proven through this work to be genuine 
watchdogs. I think you have hit home the need for the FBI 
reform bill that was introduced by the chairman and me, and 
this would codify, as you know, the Inspector General's 
authority to investigate the FBI.
    I would turn to Mr. Chiaradio and the rest of you, and bear 
with me if I am asking something that you have answered before, 
because I would like to hear it from you again. So maybe we 
need to followup with some dialog.
    First, it was unclear to me, in the comments of the FBI and 
the Department of Justice officials this week, whether the FBI 
has really taken responsibility for the main cause of McVeigh 
document problems, and that is obviously and quite simply human 
error. The problem was more than just a terrible filing system 
and old computers.
    I don't want to rehash the whole report, but it pointed out 
problems and mistakes at the top level at headquarters all the 
way down to field agents. So I want to make sure that, first, 
you agree with the IG that human errors up and down the FBI 
chain were the main cause of this problem.
    Mr. Chiaradio. Senator, absolutely. Through my remarks and 
through some of the conversations we have had here today, it is 
clear that we have a cultural change as much as we have 
anything. Technology and technology upgrades will absolutely 
assist us in minimizing the opportunity for human error, but as 
an organization we need to change. We need to get to the sense 
of urgency and the attention to detail, as Director Freeh said, 
in the mundane as much as the spectacular.
    I can tell you from the 6-months that I have served 
directly under the leadership of Director Mueller that he not 
only believes that, but I believe he believes it. He has had 
two separate meetings now with all of our special agents-in-
change where I have heard his comments to that audience, where 
he expects accountability, he expects people to admit their 
mistakes, come forward quickly with them and move on and 
correct them.
    He is inculcating that into the organization to every 
person in the organization, and I believe that he is making 
that difference. It is a leadership issue, Senator. It starts 
with the director and it comes through all of us, and I believe 
we are on our way to that.
    Senator Grassley. My second question deals with the 
National Infrastructure Protection Center. I am going to refer 
to it, as I think everybody does, as NIPC. I ask you 
particularly because of your being an expert on technology, so 
I would like to ask you about the director's plan for the FBI 
to swallow up NIPC by putting it in the Criminal Division.
    I hope that you know that NIPC is supposed to share 
information with the private sector and issue warnings about 
threats. The private sector has some concern about NIPC, and 
particularly concern about that move. So why does the FBI want 
to turn an information analysis and warning center into a 
support office for criminal investigation?
    Mr. Chiaradio. Senator, I talked to the director about this 
issue this morning at our seven o'clock staff meeting in 
anticipation of your question. The director has made no 
decision with respect to the NIPC. He has authorized me at this 
point and at other times to let you know that he values your 
opinion. Clearly, he will not make any final decision without 
coming to see you.
    Senator Grassley. Thank you. I think I have made clear that 
I think it is a mistake. I will be glad to listen to that, but 
I hope you come around to the point of view that I have.
    I understand that you are training new and current agents 
in computer and recordkeeping with what is referred to as back 
to basics and other things, but I would like to know how these 
new policies will be enforced. What I really would like to have 
you answer is, first, specifically what kinds of accountability 
measures there are for the FBI as a whole and individuals in 
the FBI. And, second, how are you going to make sure that the 
FBI doesn't have the same human error mistakes that led to the 
problems with the McVeigh documents?
    Mr. Chiaradio. To answer the first question about what 
mechanisms are in place, we have cumbersome manuals of 
operation, administrative and investigative. I believe that was 
part of the Inspector General's findings that we have too 
complex a recordkeeping system.
    What we are planning on doing and what the director has 
recognized and has organized, too, is a separate records 
management division, consolidating our functions, our policies 
and practices, where they have been sprinkled through the 
organization, bringing in an expert from the outside, and Mr. 
Hooten is here with us today, charging him with putting 
together a consolidated and more enforceable procedure on how 
we maintain, process, and otherwise retrieve and handle our 
information management; also, with the technology that we are 
hoping to develop and we are developing through Trilogy, 
minimize at every possible turn the point of human error or the 
intervention of human beings into a process and get technology 
to where that can be done.
    We cannot completely eliminate the possibility for human 
error. We can't run as an organization of just computers. We 
are an organization of 28,000 strong, but to every extent we 
can possibly minimize the opportunity for error through 
technology, we will.
    As far as our training, part of that development will be 
on-time and just-in-time training with our new systems. We have 
set aside upwards of $20 million between our hardware 
implementation and rollout and our software implementation and 
rollout just for the training of the work force to make sure 
that they know what they are supposed to do and how they are 
supposed to get it done.
    The remedies for failing to do that are administrative, and 
they are also performance-related; someone doesn't get a good 
report card on their performance. What we are trying to do, as 
we are reviewing now the findings of the Inspector General, is 
looking at the more serious allegations when it has to do with 
the issues that were raised in that report objectively by our 
Office of Professional Responsibility and take appropriate 
action. The director is prepared to look objectively at what 
the Inspector General has found, look at the details behind his 
work and take appropriate action on personnel where necessary.
    Senator Grassley. My last point would be more of a 
statement than a question. I hope that I can ask you to convey 
to Director Mueller when you see him that I would expect to see 
him take some action against the worst individuals who made the 
worst mistakes in this McVeigh paper case which the Inspector 
General has investigated so thoroughly.
    I am going to assume the best and believe that he will take 
such action because he promised so quickly in January to force 
FBI officials to repay the Government for attending the 
retirement party of one of the retirees on the taxpayer's dime. 
So I hope to see some swift action in this case as well. 
Everyone at the FBI certainly needs to know that personal 
accountability carries consequences.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you very much. Again, I thank you for 
the amount of time you have spent on this, not just now but 
over the years, in fact, and I appreciate that.
    Especially now that we are down to the last few days of a 
session, if you look at the list of committees meeting, every 
one of us is sitting in about four different committees, and I 
appreciate the senior Senator from Iowa taking the time to come 
over here for this.
    We will keep the record open for questions from others. I 
will put some of my own questions in the record and I think we 
can finish up on just a couple I have.
    Mr. Hooten, in the IG report, as I read it, one of the 
recommendations is that the general counsel review the FBI's 
policy regarding the destruction of documents while a case is 
pending. I have to imagine that you have warehouses full of 
documents, so you have got the management and other questions.
    But in the Corporate and Criminal Fraud Accountability Act, 
which I introduced to respond to the Enron-Arthur Andersen 
debacle--and I am not in any way tying that connection, but 
what made me start thinking about these document things is the 
Majority Leader and Senators Durbin, Harkin and myself are 
trying to close the loopholes on the destruction of documents 
by people in the financial services business, for the obvious 
reasons in this particular case, but for others. It makes me 
think that we want to make darn sure that we, the Government, 
are way above any question of reproach in the same area about 
document retention.
    Does the FBI have a clear policy on the destruction of 
documents while a case is pending?
    Mr. Hooten. Senator, I think I have been there nine or 10 
weeks now, so I am learning to.
    Chairman Leahy. Aren't you glad to be here?
    Mr. Hooten. I am, sir. I am very honored to be here, quite 
frankly.
    There are a couple of parts to the answer to this question. 
The first one is we do indeed have a lot of things that we need 
to destroy that are trash, quite frankly, extra copies of 
things, things that relate to things that have been destroyed 
50 years ago. We just don't know what we have. I think you said 
that correctly. So that is one thing. We do need to get rid of 
that because that helps us be more efficient all the way 
through.
    But the other thing is, with the new systems we will 
employ, we will know what we have and we will know when we have 
extra copies. We will know the retention period of certain 
kinds of documents. We have over 300 different classifications 
of records. Each one has a different kind of retention period, 
and so some we keep for 10 years, some we keep for 30 years, 
and so on. Some we accession to the National Archives at the 
end of a certain period, some we keep forever, others we can 
destroy at a certain time.
    I am finding a variety of ways to manage that now. One of 
my roles is to try and get that down into a very simple, very 
manageable way by using technology. It is the only way we can 
do it. It is just too big a job to be able to really monitor, 
be able to destroy the things we legally must destroy at the 
times we need to, be able to keep those things we need to keep, 
and be able to know what we have got and what we don't have.
    Chairman Leahy. But do you agree with me that especially on 
pending cases that such a uniform policy is vitally important?
    Mr. Hooten. Absolutely, sir.
    Chairman Leahy. I would feel that we must have something 
that both prosecutors and defense attorneys can say here is the 
rule; we know what is there and what it will be and we can go 
forward.
    Mr. Dies, if I could ask you--having Senator Grassley here 
makes me think about this. We have worked together to craft S. 
1974, the FBI Reform Act. We want the FBI director, whoever is 
the FBI director, to have the most effective law enforcement 
and counter-intelligence agency he can.
    Long after I am gone or you are gone, or anybody else, or 
currently here in the Senate or in the administration or 
anything else, we are still going to face terrorism threats. We 
are still going to have people that are going to break the law, 
and I think that we want to make sure in the 21st century that 
we are able to respond as well as we can to keep the highest 
standards of our own constitutional history, and so forth.
    Do you have a feeling or a position on S. 1974, the Leahy-
Grassley Act?
    Mr. Dies. I believe it is under review by the Department of 
Justice. A large part of it isn't in my field of expertise. The 
part of it that is that relates to information management--
frankly, I thought you had both creative and constructive ideas 
in there, and I would hope you are successful in getting these 
enacted.
    Chairman Leahy. Does anybody else want to add anything? Mr. 
Fine?
    Mr. Fine. I would like to add that the provision of your 
and Senator Grassley's bill that codifies the jurisdiction of 
the Office of the Inspector General over the FBI and the DEA is 
an important provision and we support that. We believe that it 
should be in the law so that people know it will continue and 
that another Attorney General, whatever he or she decides, 
knows that it is the law that the Inspector General has full 
authority throughout the Department of Justice. We support 
that.
    Mr. Chiaradio. Senator, in the other areas, again, the 
Department has not passed a comment on that.
    Chairman Leahy. I understand.
    Mr. Chiaradio. But we clearly have some things we are 
interested in in there that are very constructive, especially 
the SES disciplinary process, some things with our police 
force, and we are looking forward to seeing how the final Act 
comes out.
    Chairman Leahy. Well, we will continue to work with you. 
Everybody has respect for the FBI and our Department of 
Justice. We just want it to work because the threats are lot 
different than when the FBI started or anything else. We are 
not dealing with bank robber who hops in a 1930 Ford and goes 
running down a back road and you hope that maybe you can get 
the word to the sheriff in the next county to block him.
    We are dealing with money, information and everything else 
being transmitted instantaneously around the world. Our threat 
is not so much today that we are going to have some army march 
against us or an air force fly against us. We are far too 
powerful for that. It is not going to happen.
    I worry a lot more about a dozen well-committed people, who 
could care less what the penalties because they attempt to die 
in the attempt anyway, who drive a dirty bomb down Pennsylvania 
Avenue or across the Triborough Bridge or into Century City, in 
Los Angeles, or anywhere else. That worries me a lot more, and 
we want to be able to catch them. And as we have found 
tragically enough in the last few years, terrorists can be 
home-grown or they can be from abroad.
    And during that time, we will still have all the fraud 
cases and the major criminal cases, and we just want to make it 
work. We have certainly shown no hesitation to give money from 
the Congress, and we feel no hesitation to give you new powers. 
But with that money and those new powers comes the requirement 
for us not only to do our oversight, but for you to use it the 
best way you can. The four of you have a great deal of respect 
on both sides of the aisle here from the members, and utilize 
that and keep us posted.
    I appreciate very much your being here, and we stand 
adjourned.
    [Whereupon, at 11:20 a.m., the committee was adjourned.]
    [Submissions for the record follow.]
    [Additional material is being retained in the Committee 
files.]


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   REFORMING THE FBI IN THE 21ST CENTURY: THE LESSONS OF THE HANSSEN 
                             ESPIONAGE CASE

                              ----------                              


                         TUESDAY, APRIL 9, 2002

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                   Washington, D.C.
    The Committee met, Pursuant to notice, at 10 a.m., in room 
628, Dirksen Senate Office Building, Hon. Patrick Leahy, 
Chairman of the Committee, presiding.
    Present: Senators Leahy, Grassley, DeWine, Hatch, Durbin, 
and Kyl.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good morning, Senator Grassley, and I have 
been told Senator Hatch will be joining us.
    This is just another in a series of hearings, I think each 
one, though, of some significance. Since last summer, we have 
been holding regular oversight hearings on the future of the 
FBI and sort of the idea of how they prepare for the challenges 
of the 21st century. Actually, today's hearing is a stark 
reminder that some of the challenges facing the FBI are as old 
as the republic. We focus on the role of the FBI as a protector 
of the highly classified secrets that are really the crown 
jewels of our national security.
    We are, I think, extremely fortunate that Judge Webster is 
here today. He has a great deal of credibility on both sides of 
the aisle, credibility that is earned, which is, of course, the 
best kind. The report by the commission chaired by him 
demonstrates the vulnerability of the FBI in fulfilling its 
basic function of protecting our secrets. The American people 
depend more than ever on the FBI to protect it against 
terrorism, as we should and as the FBI knows we do, and that 
vulnerability has to end.
    It is this committee's responsibility to ensure the FBI 
becomes as great as it can be. This series of FBI oversight 
hearings is an important part of the process, as is the 
legislation that Senator Grassley and I have introduced to 
implement many of the FBI reforms recommended by Judge 
Webster's commission.
    The treason of former FBI Supervisory Special Agent Robert 
Hanssen was a shocking revelation, not only to all Americans, 
but also to the thousands of dedicated FBI agents and personnel 
who work around the clock and in far-flung places around the 
globe to make this country a safer place to live and raise our 
families. I know many of those men and women. I know how hard 
they work. I know the enormous sacrifices they go through, both 
themselves and their families, and I think how badly hurt they 
feel by what former Supervisory Special Agent Robert Hanssen 
did.
    I believe Attorney General Ashcroft was right to ask Judge 
Webster and other outside experts to evaluate the FBI's 
security programs in light of the Hanssen espionage case. This 
report is as thorough as it is chilling. The findings are not 
academic. They have important implications for the FBI's 
operations in the post-September 11 era.
    At least one of the significant deficiencies and security 
risks documented in the Webster commission report are the 
result of new policies adopted in response to the September 11 
attacks. Unfortunately, these new policies were done without 
proper consultation with security experts and raise problems of 
their own.
    The commission's findings and recommendations are crucial 
to the FBI's efforts to fight terrorism and protect national 
security, as will be the recommendations of the skillful 
Justice Department Inspector General, who is investigating 
other aspects of the Hanssen matter for report later this year.
    The report is another wake-up call to the FBI, but I worry 
that when some of these wake-up calls come, the institutional 
reflex has been to hit the snooze button and that has to 
change. With the oversight series of hearings which we began 
last year, we want to help the FBI break the pattern. I blame, 
to some extent, the Congress. We have taken basically for 
decades a hands-off policy toward the FBI and not done the kind 
of oversight that we should do, which is why I began these 
oversight hearings within weeks of becoming chairman. Working 
with the Attorney General, who feels that we should be doing 
it, and the Director of the FBI, who feels the same, and 
others, this committee wants to help them ensure that the FBI 
learns from past mistakes and becomes all the Nation needs it 
to be.
    The Webster report exposes within the FBI what the report 
calls a pervasive inattention to security, which has been at 
best a low priority in recent years. It describes an FBI where 
computers so poorly protect sensitive material that the FBI's 
own agents refuse to put important information on the FBI's 
official system. It paints a picture of the FBI where employees 
are not adequately trained in basic document security practices 
and where there is little analysis of security breaches.
    The Webster commission found not one or two problems, but 
serious deficiencies in most security programs it analyzed 
within the Bureau, and that when compared with best practices 
within the intelligence community, ``FBI security programs fall 
far short.'' It is an FBI security system that does not work, 
and there are three key findings from that report that we have 
to look at.
    First, the commission found that Robert Hanssen's 
activities merely brought to light broader and more systemic 
security problems at the FBI. For instance, Hanssen's ability 
to mine the FBI's computer system for national secrets for more 
than 20 years--20 years--points to a serious weakness in 
information security. Hanssen himself said that any clerk in 
the Bureau could have done the same, and yet he was promoted to 
sensitive FBI positions where he was entrusted with our most 
sensitive national secrets during a time when he was a paid 
Soviet spy. That is a problem. His ability to copy highly 
sensitive material and take it in and out of the building, and 
nobody stopped him, nobody asked, and nobody followed up.
    Second, the commission found that the best way to protect 
information is not to shut down information flow completely, 
either within the FBI or from the FBI to outsiders. Indeed, 
that type of reaction is inimical both to a free society and to 
effective law enforcement. Instead, the Webster Commission 
found the FBI needs to do a better job with what is known as 
defense-in-depth security, find out what is truly sensitive and 
then protect that.
    Finally, and most disturbing, the commission found that the 
systemic problems which allowed Robert Hanssen to compromise 
national security for so long are not ancient history but still 
permeate. Most alarming to me, the commission found that 
decisions since September 11 have resulted in substantial 
sensitive source material from FISA surveillance being made 
generally accessible on the FBI's computers to FBI personnel 
and then inadequately protected.
    This not only presents a security risk which has to be 
corrected ``as soon as possible,'' but it is the kind of breach 
that could create some real constitutional problems. We want to 
be able to prosecute those who are involved in terrorism or 
playing terrorism against us. Judge Webster knows, a former 
judge and FBI Director who understands prosecutions as well as 
anybody in this room, when you get such a prosecution, you want 
it to stick.
    I am afraid that some of these mistakes could allow 
loopholes to be created where we could not do that and we have 
to fix that. We have to fix it. We have to make sure that if we 
are going to be prosecuting somebody, we can make it stick. We 
have to make sure that we have done enough so that when 
somebody has sensitive information, they are willing to give 
sensitive material and know that it is going to be kept that 
way.
    I am one of the ones that helped write the USA PATRIOT Act 
that gave the FBI new surveillance power and the Webster report 
raises some very serious concerns in my mind.
    I get the impression that part of the Hanssen case, there 
was a circling of the wagons. Unfortunately, if the enemy is 
inside the circle, that does not do you much good and we have 
got to get outside that circle and attack the problems. I think 
Director Mueller has already taken some steps in the right 
direction and I commend him for that.
    One common sense proposal in the report stands out, 
establish a system under which security lapses at any one 
particular agency can lead to improvement throughout the entire 
intelligence community and thus have a coherent national 
policy. In fact, the commission specifically cites a proposal 
for such national security program that I made 16 years ago 
when I was Vice Chairman of the Intelligence Committee and 
Judge Webster was FBI Director. We made that report after the 
horrendous year of the spy, with Walker, Whitworth, Howard, 
Pollard, Chin, and other spies detected here. So these are 
things that we should be looking at.
    We find that most departments and agencies other than the 
CIA did not implement the requirements that were adopted after 
the Ames case. Not much has been done since Hanssen's arrest 
over a year ago. We do not go into the financial background as 
they should be. These are things that have to be improved.
    Back on the security issue, in 1997, the Justice Department 
Inspector General's report on the Aldrich Ames spy case 
specifically warned the FBI needed to develop and maintain a 
better recordkeeping system for tracking top secret documents, 
some of the very things Mr. Hanssen later stole. I wonder if 
then FBI agent and Russian spy Hanssen read the IG report, he 
knew that he could go on just as he did before, and this would 
end up in a filing cabinet somewhere. We cannot do that. That 
is why Senator Grassley and I have introduced S. 1974 to change 
that.
    I have a much longer statement which I will place in the 
record, but those are some of my concerns.
    [The prepared statement of the Chairman appears as a 
submission for the record.]
    Chairman Leahy. Senator Grassley, do you wish to say 
something?

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. I think you said everything that can be 
said on the subject. I think we ought to take advantage of this 
opportunity to thank Judge Webster for his excellent and 
thorough report on these security problems at the FBI. The 
results of the commission's review are almost painful and I do 
not think we need to belabor the revelations and problems it 
found because I think that we are all familiar with them by 
now.
    I would say that this is all the more disconcerting, 
though, because the FBI missed a number of pretty plain signs 
over the years that Robert Hanssen was up to no good. Just one 
of these instances should have sparked a very thorough 
investigation, the hacking software found in his computer. Yet, 
even as these instances piled up for more than a decade, no one 
could connect the dots. This cost the FBI and our nation 
tremendously. Hanssen was able to sell top secret information 
that damaged national security and led to the death of several 
people.
    I hope that the FBI works to adopt the recommendations in 
this report, and I know that the FBI reform bill that Senator 
Leahy and I have authored will address some of the security 
issues at the Bureau. I am happy to see the Webster report 
includes some of the bill's provisions, and just one of them 
would be the establishment of a cadre of career security 
professionals.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Did you wish to say anything?

STATEMENT OF HON. MIKE DEWINE, A U.S. SENATOR FROM THE STATE OF 
                              OHIO

    Senator DeWine. Mr. Chairman, very briefly, I just want to 
thank you for holding this hearing, and Judge Webster, it is 
good to see you again. We appreciate your service to our 
country and your continued service with this very, very good 
report.
    Mr. Chairman, I am looking forward to Judge Webster's 
testimony and the testimony of the other witnesses. I would 
just make one comment before we start, and that is that these 
recommendations will do no good if they are not implemented, 
and these recommendations will do no good if they are not 
funded. I think we kid ourselves if we did not realize that 
this was going to cost money.
    It seems to me that the followup, the logical followup to 
Judge Webster and his commission's good work is for the FBI to 
very quickly do the cost analysis and to come to the U.S. 
Congress, come to the American people and be very, very candid 
and say, this is what it is going to cost. You make the 
decision as far as public policy, but we need to acknowledge 
that this is what the cost is going to be, because if we do not 
do that, we are not being honest with ourselves, and quite 
candidly, we are never going to be able to implement the 
recommendations that the Judge has made.
    So I thank the Judge, and Mr. Chairman, thank you.
    Chairman Leahy. Thank you very much.
    Judge Webster, the floor is yours.

 STATEMENT OF HON. WILLIAM H. WEBSTER, MILBANK, TWEED, HADLEY 
                AND MCCOY, LLP, WASHINGTON, D.C.

    Mr. Webster. Thank you very much, Mr. Chairman. Thank you 
for the opportunity to testify before the committee on behalf 
of the Commission for the Review of FBI Security Programs. I am 
going to keep my opening remarks brief because the commission's 
true statement is its report, which I have submitted and which 
you have.
    In March 2001, Attorney General John Ashcroft asked me to 
chair the commission at the request of FBI Director Freeh. The 
request came in the light of the newly discovered espionage of 
FBI Special Agent Robert Hanssen. Over the course of 22 years, 
Hanssen gave the Soviet Union and Russia vast quantities of 
national security information of incalculable value.
    The depth of Hanssen's betrayal is shocking, but equally 
shocking is the ease with which he was able to steal classified 
material. Usually, Hanssen collected the material during his 
normal daily routine, gathering up classified information that 
crossed his desk or arose in conversation with colleagues.
    The commission concluded that internal security has often 
been a low priority at the Bureau, frequently trumped by 
operational needs. Security training has been almost 
nonexistent and agents usually take on security duties as 
collateral responsibilities with every incentive to return to 
investigative operations full time.
    Although it is impossible to eliminate intelligence efforts 
directed against our national security, the commission 
attempted to recommend changes in FBI security programs that 
will minimize the harm those who betray us can do. The changes 
should also shorten the time between the defection of these 
individuals and their detection.
    Most globally, the commission recommends that FBI security 
programs be consolidated in an Office of Security, reporting to 
the Director. In addition to changes in Bureau policy, we also 
recommend that a system be established whereby security lapses 
in a particular intelligence entity lead to improved security 
measures throughout the entire intelligence community.
    Mr. Chairman, I would like to acknowledge the support 
afforded by the Department of Justice and the unstinting 
cooperation of FBI Director Mueller and Bureau personnel at all 
levels. The commission also noted the many steps the Bureau has 
taken to improve security in the light of Hanssen's treason.
    Finally, I would like to recognize the dedication of our 
professional staff and my colleagues on the commission, the 
Honorable Clifford Alexander, the Honorable Griffin Bell, the 
Honorable William Cohen, the Honorable Robert Fiske, the 
Honorable Thomas Foley, and the Honorable Carla Hills.
    At this point, Mr. Chairman, I would like to depart from my 
formal statement to add a few words of my own on a personal 
note and then I would be happy to respond to your questions.
    I am painfully aware that some of Robert Hanssen's 
activities took place intermittently when I was Director of the 
FBI, and while I worked hard to strengthen its 
counterintelligence capabilities to detect and capture the 
spies of hostile countries targeted against us, in hindsight, I 
took our own internal security procedures for granted and I 
share in that institutional responsibility. In fact, I raised 
that issue when I was asked to assume this responsibility and 
was assured that my perspective from 9 years at the FBI and 
four-and-a-half years at CIA would be useful.
    So with the authority of the Attorney General, I asked six 
distinguished Americans of unquestionable probity to serve with 
me as commissioners, and they have joined me in the conclusions 
of this report. I wanted this to be an honest report, and I 
believe that we have produced one.
    This report, Mr. Chairman, is not intended to reflect 
adversely on the integrity and dedication of the many thousands 
of men and women who have served their country in the FBI. 
Indeed, its purpose is to disclose the security vulnerabilities 
that could have been far more devastating had not the spirit of 
fidelity, bravery, and integrity been alive and well for all 
but a minute number of employees who betrayed their trust.
    I think we owe it to the men and women of the FBI who serve 
today and will serve tomorrow to address these vulnerabilities 
in ways that will best protect our country and yet permit the 
FBI to function fully and effectively in its many 
responsibilities for the protection of us all.
    Now, Mr. Chairman, I would be happy to respond to your 
questions.
    Chairman Leahy. Thank you very much, Judge Webster. 
Incidentally, that statement is also typical of your own candor 
and the credibility you have established in this town.
    Senator Hatch has joined us, and traditionally, I do want 
to give him an opportunity to make an opening statement.

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Hatch. Thank you, Mr. Chairman.
    I want to commend you, Judge Webster, for the excellent 
work you have done every day you have been in this town in so 
many ways and especially for your findings and for your work 
here. Again, everybody in this town knows that you are a person 
of immense integrity, and so are the others who have worked 
with you on this report.
    But over the course of the last year, we have become 
acutely aware of the damage that FBI Special Agent Robert 
Hanssen has done to our national security. Over 22 years, 
beginning in 1979 and continuing until his arrest in 2001, we 
are told that Hanssen gave the Soviet Union and Russia 
substantial amounts of vital information affecting the United 
States security.
    When Mr. Hanssen's activities were discovered, we all 
questioned whether his ability to jeopardize our nation's 
security was due to deficiencies in the FBI's internal 
security. Commendably, Attorney General John Ashcroft and then-
Director Louis Freeh responded quickly to the crisis by 
appointing Judge William Webster to lead a thorough and 
independent review of the FBI's internal security programs.
    This commission has now completed its task, and it is 
apparent from its extensive, well-written report that the 
commission was very meticulous in its investigation. The 
Webster Commission's comprehensive study will guide the FBI as 
it undertakes the critical task of transforming its internal 
security programs.
    I want to commend you, Judge Webster, the commissioners who 
served with you, and your staff for diligent work in compiling 
this report. I want to acknowledge in particular George Ellard, 
who was Senator Biden's chief counsel on this committee for his 
service as general counsel on this commission. Our nation owes 
a debt of gratitude to Judge Webster and the members of his 
able team for their dedication and for their thorough and 
important review.
    Reforming a multi-faceted institution like the FBI is no 
easy task. As the Webster report points out, an inherent 
tension exists between the Bureau's law enforcement function, 
which is grounded in shared information, and its intelligence 
function, which, by necessity, must be grounded in some degree 
of secrecy. Conflicts between operational and security 
objectives are common. The recommendations contained in the 
Webster report appear to strike a workable balance between 
these obviously competing objectives by advocating reforms that 
will increase the Bureau's security without jeopardizing its 
efficiency in the law enforcement area.
    I am pleased to learn that under the leadership of Director 
Mueller, and immediately before him Director Freeh, the FBI has 
examined its security programs and has already incorporated 
many of the security reforms the Webster commission has 
recommended. Most significantly, the FBI has established an 
independent security division led by an assistant director 
whose role is to plan and implement the FBI's security 
programs. As the Webster commission suggested, consolidating 
the FBI's security functions into a central office will not 
only increase the Bureau's focus on security matters, it will 
also ensure greater security coordination within the FBI.
    In addition, the FBI has improved the security of its 
information systems, instituted frequent polygraph examinations 
and access reviews, and developed a comprehensive security 
education awareness and training program. So we look forward to 
the FBI continuing to incorporate all of the reforms 
recommended by the Webster commission, as the Bureau has 
indicated it will.
    I want to take a moment to commend Director Mueller and his 
team. Director Mueller has been on the job only 7 months, and 
during virtually his entire tenure, he has been coordinating 
the FBI's response to the September 11 attacks. I am sure I am 
not alone in my admiration for the institutional reforms 
Director Mueller has already managed to accomplish under these 
trying conditions and circumstances. I believe, as a newly 
installed Director, Mr. Mueller should be allowed to implement 
his reforms, and as I know he is aware, to be accountable for 
the results.
    As I have said on countless other occasions, the FBI is one 
of the finest law enforcement agencies in the world. We have 
learned, however, we cannot let our respect for the FBI as an 
institution or for the many hard-working agents who are often 
asked to put their lives on the line blind us from the fact 
that the FBI has, on occasion, come up short of our 
expectations and that, indeed, is a serious matter.
    We must keep in mind, however, as the Webster commission 
has noted, the FBI is not the only governmental entity that has 
been betrayed by one of its trusted employees. The General 
Accounting Office has reported that between 1982 and 1999, 80 
Federal Government and contractor employees were convicted of 
espionage. That is an astounding number. As the Webster 
commission observes, with the exception of the Coast Guard, 
since the 1930's, every U.S. agency involved in national 
security has been penetrated by foreign agents. In this 
information-driven age, the FBI and all governmental entities 
must learn from their own mistakes and from those of one 
another to ensure that our nation's security is not jeopardized 
and that it is protected.
    I applaud Director Mueller for the significant steps he has 
taken in his brief tenure to address the FBI's security 
shortcomings. I have the utmost confidence that he will 
continue to capitalize on the Webster commission's study to 
improve the Bureau's security programs. In the months ahead, I 
look forward to hearing more about the FBI's progress, and I am 
convinced that under the able leadership of Director Mueller, 
the FBI will remain the world's standard in law enforcement.
    I want to pay special tribute to our committee chairman for 
holding these hearings and for showing the great interest that 
he has in these matters. This is important stuff.
    Again, Judge Webster, I just want to thank you on behalf of 
the American people for all the work you have done through all 
these years and for all the help that you have given this 
committee through all these years and for all of the great 
suggestions that you have made, not just in this report, but in 
the past, as well. You have been a real asset here in 
Washington and in our country and I just wanted to personally 
pay my own personal tribute to you.
    Mr. Webster. Thank you very much, Senator.
    Senator Hatch. Thank you, Mr. Chairman.
    [The prepared statement of Senator Hatch appears as a 
submission for the record.]
    Chairman Leahy. Thank you.
    Judge as you know, the Leahy-Grassley FBI Reform Act has a 
number of provisions on FBI security. One creates an FBI 
security career program. Another authorizes counterintelligence 
polygraph screening with, I think, pretty good safeguards 
against misuse. The third formalizes improved pay for the FBI 
police force that guards its buildings. The fourth requires a 
report to Congress on FBI's computer security. And a fifth, and 
this is something that Senator Grassley has spent years 
emphasizing, provides enhanced whistleblower protection in the 
FBI.
    Would these provisions be helpful in carrying out the kind 
of recommendations you have made in your report?
    Mr. Webster. Mr. Chairman, I believe that all of those 
suggestions which are incorporated in your bill offer promise 
for greater security and greater attention to security and 
greater understanding and training of security within the FBI. 
If I am not mistaken, I think there is also a passage asking 
the Inspector General of the Department to make a 
recommendation to you with respect to whether he or someone 
reporting to him should function as a special Inspector General 
for the FBI. I do not know the answer to that one, but I will 
follow that with a great deal of interest.
    Chairman Leahy. Thank you. The USA PATRIOT Act gave the FBI 
new electronic surveillance powers, some very significant, many 
of which will sunset in 4 years. I raise this because obviously 
the question of whether they sunset or not is going to depend 
upon how they are utilized. I made clear, though, at the time 
of the passage that this committee is going to have to do some 
very extensive oversight of how these laws are carried out.
    Your report actually is one of the very first chances for 
an independent body to evaluate the FBI in the post-September 
11 situation, and your report talks about the FBI's decision to 
place highly sensitive FISA, or the Foreign Intelligence 
Surveillance Act, information on the computer system. This is a 
system that is generally, as I understand, accessible to all 
FBI personnel during the same time as they were telling 
Congress they want to be entrusted with more powers under FISA 
because the information would be kept so close held and so 
specific that we could allow an expansion in FISA, this very 
extraordinary type of wiretap and search authority, something 
that we have allowed only under very limited carve-out.
    The FBI asked for more of it, saying this would be kept 
very, very closely. And yet, we find that they have put a lot 
of that on the computer system that just about everybody in the 
FBI could get hold of.
    You gave them a poor grade in handling that. First, you say 
that the FBI's action under September 11 presented a security 
risk to FISA information, which should be corrected as much as 
possible. And second, even though it was not the focus of your 
commission, which you said had a couple of circuit judges on 
it, former Attorney General, former U.S. Attorney, independent 
counsel. You are a former U.S. Attorney, circuit judge, FBI 
Director, and CIA Director. You criticize the FBI's handling of 
FISA material because it raises potential issues of 
constitutional law and, therefore, could hinder the Bureau's 
ability to construct cases that could be prosecuted.
    I have a lot of prosecutors that tell me, and I happen to 
agree with them, that we want to get these terrorists. We want 
to prosecute them. We want to convict them. But we do not want, 
because the procedures run foul, to see the case get thrown 
out.
    So what has been the reaction of the rest of the 
intelligence community to the FBI posting of FISA information 
in this kind of a data base?
    Mr. Webster. Mr. Chairman, I cannot really speak for the 
reactions of the other members of the community other than my 
understanding that those who were interviewed expressed some 
concern and dismay with what happened.
    I am going to speculate now, which is always a dangerous 
thing, but I think in the period immediately following 
September 11, with the desire to try to come to grips as soon 
as possible with what was behind all of this and the people who 
are responsible and what other plans there might be, there was 
an effort to get information out, including FISA information, 
without the people with the best of motives having fully 
consulted the security people for the possible consequences of 
putting that material into the automated case system where it 
was available to everyone.
    The FISA statute has been extraordinarily useful on behalf 
of the national security and intelligence community and for 
prosecutions, when appropriate. I have to confess that it was 
passed just about the time I arrived in Washington and Attorney 
General Bell wanted me to come up and talk to you in support of 
it and I was not sure that this statute was necessary. I 
thought there was an implied authority in the President to 
protect our national security by ordering electronic 
surveillance of those who are suspected of espionage or of 
acting in a hostile way to the United States.
    I have since been convinced it was a great statute. It is 
serving a very useful purpose. But it needs to be protected. 
That information contains affidavits, the whole process of 
getting an authority to conduct a national security warrant, 
especially after the Keith opinion required warrants in the 
case of domestic security cases in 1972. The ``t''s have got to 
be crossed and there has to be great care and a lot of very 
sensitive information is contained in the material that goes 
into the Justice Department, as you said, and is presented to 
this special court for authorization. But then to find it 
suddenly turned loose and put in the huge file where it is 
available to other people represents some serious potential 
problems.
    I think that my own conclusion is that had we had a 
security division in place, had we brought them to the table on 
this issue and listened to their advice, we would have done it 
differently.
    Chairman Leahy. In fact, that is really my point. If you 
had the security division, they could say, look, we want to do 
this. We want to get this information out as quickly as 
possible. What are our parameters? How do we do it? That is the 
important part to me, because everybody wanted to get any other 
terrorist who might be in this country, or potentially in this 
country. We had a devastating attack. We wanted to protect 
ourselves against it. We wanted to get the people responsible. 
Obviously, some were dead, but we wanted to get anybody else 
involved with that. We knew that there had to be more. Just 
instinctively, you knew that we faced more attacks and that 
there were more people available, so you wanted to do that, but 
you want to do it in such a way to protect your assets and you 
protect your ability to get a conviction.
    If we were in a closed session, there are cases--I am sure 
you can think of some, and we would probably be thinking of 
some of the same ones--where FISA has been extraordinarily 
helpful to us, but in getting the information, if that is made 
public, it would be very obvious just where it was we got that 
information and that door would close so fast.
    Mr. Webster. That is right.
    Chairman Leahy. We would take forever to replace it. For 
example, suppose Robert Hanssen had been able to access FISA 
information right from the computer on his desk. I think it 
would be pretty obvious to everybody there would be an enormous 
amount of damage he could have done.
    So I think the idea of having--and I agree with you--the 
idea of having a security division or procedure where you could 
just go and say, look, we have got a lot of information here, 
what can we use, what can we make accessible, and what--do we 
have to follow certain procedures in who is going to have 
access, I agree with you.
    Mr. Webster. Mr. Chairman, implied in what you have been 
saying and what I think I have been trying to say is that 
sometimes, people who make these authorizations do not really 
understand what putting something into the ACS system means and 
that is where security comes in.
    Chairman Leahy. And I do not question the motives. 
Everybody wanted to get--we all had the same motives. I think 
the Nation is probably as united as any time I have seen it in 
public life. It was united to find who did this and to get 
them. But for those who are going to be prosecuted, they want 
cases that can stand up. For those who are going to have to 
continue to mine sources that we had for the coming years to 
protect us, they did not want those sources to go away. That is 
what we have to be protective of.
    Your report recommends the FBI submit an initial report and 
a report annually for 3 years on how they plan to address and 
fix the security programs. The House and the Senate Judiciary 
Committees have primary oversight jurisdiction over the FBI in 
general and over criminal espionage cases, such as the Hanssen 
case in particular. Should we be getting that report that you 
speak of, for the FBI submitting an initial report and a report 
annually for 3 years on how they plan to address and fix these 
security programs? Are the House and Senate Judiciary 
Committees the appropriate places to receive that report?
    Mr. Webster. I think so. We may have said to the 
intelligence community and intelligence committees, and I think 
that is a matter between this committee, which has worked so 
long with the FBI, to work it out.
    Chairman Leahy. They should have it, too, but----
    Mr. Webster. We think it is important that the Congress be 
in the loop here, and Senator DeWine said something we may come 
back to, but understanding what is needed and the costs can be 
very important as the use of electronic filing and electronic 
techniques becomes more the order of the day and we are seeing 
less documents and more things put in a computer system that 
perhaps in the past has addressed security after the fact. You 
should be part of the process of making sure that the money is 
available, that the FBI is not starving for modern technology, 
which is, as you know, changing every two or 3 years. If they 
are changing every 10 years, it is not going to work.
    Chairman Leahy. I have young agents telling me that they 
are looking at equipment that was antiquated when they were in 
grade school or high school----
    Mr. Webster. That is right.
    The Chairman [continuing]. Being used there, and they just 
almost have to go back and learn how to use it, and if it is 
that antiquated, it does them no good.
    My last question is this. You talk about that the FBI does 
not have a viable program for reporting security incidents to 
headquarters. Now, on paper, they are supposed to report these, 
but we found some very chilling stories from whistleblowers 
that people are afraid to report security lapses because they 
are afraid it is going to hurt their career. I know one 
employee reported a security violation and ended up basically 
getting hounded out of the job for it. We have to have better 
whistleblower protection, do we not?
    Mr. Webster. I think so. I think the whistleblower 
protection that you provided for will be very useful in 
answering that problem.
    Chairman Leahy. Thank you.
    Senator Hatch?
    Senator Hatch. Thank you, Mr. Chairman.
    Judge Webster, we are all too aware of the circumstances, 
or should I say the numerous and significant security breaches 
that have occurred in almost every government agency. You have 
recommended in your report and again here today the creation of 
a system that will enable officials in one intelligence agency 
to learn from the mistakes of the others and the successes of 
the others, as well.
    I share your view that such a system is critical and long 
overdue, but would you elaborate a little bit on such a system, 
on how such a system will operate and who would participate in 
such a system and how would their findings be communicated to 
the relevant and appropriate agencies?
    Mr. Webster. Senator Hatch, we were purposely general in 
our recommendations there. We see a very clear need to share 
experiences so that there can be a top, a standard level of 
quality, and whether that is through the Director of Central 
Intelligence or some o