eMediaMillWorks
Wednesday, May 16, 2001

Following is the transcript of a hearing on the FBI before the House Committee on Appropriations: Subcommittee on Commerce, Justice, State and Judiciary.

MAY 16, 2001

SPEAKERS:

U.S. REPRESENTATIVE FRANK WOLF (R-VA), CHAIRMAN

U.S. REPRESENTATIVE HAROLD ROGERS (R-KY)

U.S. REPRESENTATIVE JIM KOLBE (R-AZ)

U.S. REPRESENTATIVE CHARLES H. TAYLOR (R-NC)

U.S. REPRESENTATIVE RALPH REGULA (R-OH)

U.S. REPRESENTATIVE TOM LATHAM (R-IA)

U.S. REPRESENTATIVE DAN MILLER (R-FL)

U.S. REPRESENTATIVE DAVID VITTER (R-LA)

U.S. REPRESENTATIVE JOSE E. SERRANO (D-NY),

RANKING MEMBER

U.S. REPRESENTATIVE ALAN MOLLOHAN (D-WV)

U.S. REPRESENTATIVE LUCILLE ROYBAL-ALLARD (D-CA)

U.S. REPRESENTATIVE ROBERT E. (BUD) CRAMER (D-AL)

U.S. REPRESENTATIVE PATRICK J. KENNEDY (D-RI)

U.S. REPRESENTATIVE DAVID R. OBEY (D-WI)

WITNESSES: LOUIS FREEH, DIRECTOR, FEDERAL BUREAU

OF INVESTIGATION

WOLF: We're going to begin the hearing, and now the hearing will come to order.

Director Freeh, we want to welcome you to the committee today. This is your last appearance, I guess, before the committee before you leave the FBI. I just wanted to say that I personally, and I think I speak for the members, appreciate your considerable service to the country as an FBI agent, as assistant U.S. attorney, as a federal judge and as the director now of the FBI.

You and the bureau have a done a lot of good things during your tenure, and I think have done them well. And you kept, which I appreciate, the bureau from being politicized during that period of time.

This is not an inquisition today. This is a congressional hearing. It's an inquiry to find out about your budget and what has taken place. We all need to understand how the problems developed and what we should do, in fact, must do, to make sure they never happen again.

Our country is hurt when a mole within the bureau goes undetected for 15 years. Our justice system is diminished when evidence, for whatever reason, is withheld. There are some in our country and throughout the world who would like to see a weakened FBI. The task before us today and in the future is to fix the problems and ensure that the FBI has the tools and the management to keep it highly effective in carrying out its duties that the American people want it to carry out, nor should these incidents that will come up in hearing today erase the many good things the bureau has done over the years.

Over the last several years, this committee has provided significant amounts of money to update the technological infrastructure at the FBI, including $100 million in FY 2001 for the FBI technology upgrade plan. In addition, the FBI hired a former IBM official to guide the implementation of this system. This investment is on top of funding provided to the FBI over the years to upgrade its technological infrastructure. We must continue to ensure that the investments in FBI infrastructure are used wisely and in accordance with plans developed jointly between the FBI and the Congress.

Over the last five years, this committee has provided significant additional resources to the FBI. With the exception of the Bureau of Prisons and the INS, no other agency in this bill has received these kinds of increases. At a time when other agencies have been held relatively flat, this committee has provided increases of more than $1.3 billion since 1993.

This morning, as we begin with the fiscal year 2002 budget request for the Federal Bureau of Investigation, the FBI is now requesting a total of $3.6 billion in budget authority, an increase of $275 million or about 8 percent. To address issues of public safety and law enforcement, the FBI has been the beneficiary of generous increases.

Since 1993 through the current fiscal year, the bureau's budget has increased by about 65 percent. These increases have been used by the FBI to upgrade its technology, hire more agents, guide emerging democracies as they establish proper police protocols and to fight organized crime in the United States and, quite frankly, around the world. Increasingly, the FBI is working to halt the exploitation of the Internet. Criminals hold information from bank hostage, including its customers' credit card numbers and other personal information, extorting ransom in turn for not dumping this information on the Internet. Hackers attack American Web sites, as we saw recently with the attacks against the U.S. Web sites by some in China. And others use the Internet to run illegal gambling operations and illegal child pornography rings.

The job that the many highly capable men and women of the FBI do every day is crucial to maintaining our values as a free and open society. We must step back now and assess how the agency has been operating and develop ways to ensure that missteps, such as the ones that have come to light over the last few years, do not happen in the future, and I am sure and confident that this can be done by working together.

And with that, I will now recognize the ranking member, Mr. Serrano, and then Mr. Obey after that.

Mr. Serrano?

SERRANO: Thank you, Mr. Chairman.

If I had wanted to write a joint statement, Mr. Chairman, I could have just taken yours today because I also want to join you in thanking Director Freeh for his service to our country.

You know, as I have told you before both in private and in public, I'm a child of the '60s and, as such, I was brought up being very suspicious of the FBI and the power that you have and your agency has to do good and to do harm. I then, of course, grew up and met people like you and found out that the agency has a major responsibility that if unchecked, it can do harm, but most of the time it tries to protect our interests.

Today, the temptation for anyone who sits in front of all these cameras is to beat up on you and beat up on the agency. I won't do that.

OBEY: And to me, these episodes show how important it is to have an internal system in place that challenges everything that you do to make sure that the right questions get asked ahead of time. I think it shows that you cannot afford to have a culture of "yes-men" in an agency. You can't, we can't.

And I think the more power that your agency has, the more the way you handle that power needs to be challenged and questioned by this institution. And it seems to me that in your business and in ours, criticism can't be taken personally. It comes with the territory. That's part of the price we pay in a democracy. So I guess I will have some questions when the questioning time comes.

But in my view, the greatest failure of all has been on the part of this institution, the one in which I proudly serve because I think with the granting of increased power comes an obligation for increased oversight. And the nation pays a heavy price when there appears to be a lack of competence or a lack of having systems in place, internal review systems, evaluation systems and make certain that your field operations are doing, in fact, what they're supposed to do.

And I think it's central that whoever the next person is to head the FBI needs two things. He needs to have trust across the political spectrum, and he needs management skills to rein-in and shape-up an agency that I think is badly in need of reform.

We desperately need an agency that has the kind of powers that your agency has. You can't avoid it in a complicated world like this. I think we've failed and I think your agency has failed in seeing to it that that power is exercised with discipline. And I hope that you will have a solid set of recommendations to the president on what it will take to overcome these chronic, consistent failures of the high responsibility that this body has given you.

WOLF: I recognize Mr. Rogers, who was chairman of the committee for the last six years.

Mr. Rogers?

ROGERS: Thank you, Mr. Chairman.

And, Mr. Director, good to see you.

I have to tell you that, as you well know, this subcommittee has lavished the FBI with money. Over the last several years, we've quadrupled, in fact--I think my information is correct--$1.2 billion increase. But the one area where we've had difficulty is the computers and the data information system. But it's not a money problem, and we've been over this time and time again.

But since 1993, here's the monies that we've given the FBI for technology enhancements. ACS, automated case management system, $67 million. The Trilogy system, $100 million in just fiscal '01. The IAFIS system, $640 million. The NCIC, National Crime Information Center, $200 million total. Digital Storm, $25 million, that's to analyze information from wiretaps. CALEA, to help the FBI in the digital age do the court-ordered phone taps, $500 million in total. Narrowband, $310 million in total, beginning last year.

More than $1.7 billion has been provided for technological enhancements. And yet, some people say that the FBI has not kept up with the modern age and that, therefore, information and documents are not properly brought forth.

The so-called ISI plan, now called Trilogy or EFBI, which the department wanted to develop--a massive undertaking, totaling over $600 million--but for which the bureau had no valid implementation plan. We on this subcommittee demanded that an adequate spending and implementation plan be put in place before the money was obligated. And we fenced $60 million in fiscal '99 for that project with that condition.

It took the FBI two years to finally come up with an adequate plan. You submitted your revamped proposal to the committee in November of 2000, and to your credit, you bought on Bob Dees (ph), a former IBM executive to take charge of that situation because it had been languishing for so long.

And both you and the director--I recall very much the conversation we had in my office when the plan was finalized, and you had Bob Dees (ph) on board, a very confident man, I think, to put that proposal in its proper place and get on with it. And that's when we agreed to pay the full costs of phase 1 implementation of the ISI plan. That's the big computer data system. And we put $100.7 million for the year one costs in the '01 bill.

But the ISI, even if fully implemented, would never have been capable of handling the situation of the McVeigh files years ago. And so, there's been plenty of money available for technology upgrades, but we've had cost overruns, we've had projects that went beyond the time they were supposed to take place. And I have to tell you that that's the one area that I think the bureau was slack on over the years.

So the money is there now for the new system. And we hope that it will be spent forthwith in the proper way.

WOLF: There's a vote on. The committee will recess for probably about 10 minutes at the most and vote and come right back.

(RECESS FOR VOTE)

WOLF: You can proceed.

FREEH: Thank you, Mr. Chairman, Mr. Serrano, Mr. Rogers, Mr. Obey, members of the panel. Let me just begin by thanking the committee for the support and particularly the access that I've had over the years as FBI director.

I testified before the Congress for the first time when I was a 27-year-old agent. And if you had told me at that point I was going to come back and spend literally dozens and dozens of sessions before committees, hundreds more individually with members, I would have been surprised. But it has certainly been one of the highlights of my service here as director, and I want to extend my personal thanks and respect to all the members of the committee, past and present.

Mr. Chairman, with your permission, given the circumstances under which we appear here today, I would like to take a little bit of time to state for the record the facts known to me, known to others in the FBI, with respect to the records situation involving the McVeigh case. I would then also like to speak briefly and directly to the matter before the committee, which is our 1902 (sic) appropriated request.

Before I do that, however, just by way of introduction, I am very proud of the FBI, and I am particularly very proud this week as we celebrate and memorialize several things, first of all, the men and women in law enforcement who have fallen in the service of our country. This is also the time of remembrance for not just victims of tyranny and holocaust, but also people who have found for one reason or the other in time or circumstance the power of the state directed against them unfairly, unlawfully and with great consequences.

We are an agency involved in controversy. There is no question about that. What we do every day is controversial. We conduct investigations, surveillances. We bring facts to bear which may result in charges and convictions and sentences. We are constantly running aside and next to and hopefully never across the boundaries of the Constitution, of the rule of law, the statues which govern our conduct.

But we are an agency involved in controversial matters, the protection of our country, the protection of public safety. All of those ingredients that both seek to identify and deter those who would break the law, but simultaneously protect those who need protection under the law is a controversial line of work.

We have acquitted ourselves, I believe, over the years very, very well with respect to the protection of these liberties. Not to say there are not cases or periods in our history--Mr. Serrano, you mentioned one in particular to which I agree--where the agency was not law-abiding and was not doing the things that the Constitution and the people we protect expect us to do.

I'd like to put into perspective some of the introductory remarks that were made. And I think all the questions that have been asked are fair questions and certainly need to be answered.

Mr. Obey referred to a person who was incarcerated--it's a Massachusetts case--for many, many years when exculpatory evidence was in the hands of the government, particularly the FBI. He's absolutely right about that. That is a very sad chapter in the history of this agency. And of course, we're talking about events that occurred in the 1980s and 1970s. What should be noted, however, it was the FBI of modern times, the FBI of 1998, 1999 that not only uncovered that evidence but has brought to bear the facts and circumstances which will allow the just prosecution of people, including former people associated with our agency, who broke the law.

I think that that's a very important perspective. It was the FBI's investigation, working with other law enforcement agencies and the U.S. attorney that brought that to bear.

With respect to the Birmingham case, yes, the Birmingham case is a disgrace to the FBI. That case should have been prosecuted in 1964. It could have been prosecuted in 1964. The evidence was available. My agency of which we are all ashamed failed to pursue that case.

The footnote, however, to that piece of history is very, very important. This case was reopened by the FBI in 1993, not only under my tenure, but on the initiative of the special agent in charge of the Birmingham office. The tape, which was subsequently used at the trial, was found by the FBI of 1993-1994. And this evidence was used to prosecute a case that should have been prosecuted years ago.

With respect to practices in the laboratory, yes, we've had tremendous problems--technical problems, scientific problems, in the laboratory. But we addressed those problems. We not only appointed a director who came from the private sector for the first time in our history, who is a world-class scientist, but the peer review taking advantage of the inspector general's report has given us not only a state-of-the-art laboratory, which is being built with the committee's support, but which solves a lot of the technical problems and addresses all of the issues that came during the inspection.

Ruby Ridge was a great tragedy. It was a tragedy for the victims involved. It was a tragedy for the country and the FBI. But again, as of all these matters, there is another piece that has to go with this. In the wake of Ruby Ridge and Waco, we reformed totally our crisis management response. We created a new entity in the FBI, which you are familiar with--the critical incident response group. That group, for the first time, balanced the tactical abilities of the FBI with its negotiating abilities, which were not used and which were eclipsed both at Waco and Ruby Ridge by the dominance of the tactical forces.

We created this new structure in response to the episodes of Ruby Ridge and Waco. And the result was quite apparent. If you look at the Freemen situation in Montana, you see the application of a new set of parameters and a new set of disciplines in a crisis hostage situation. The only person who lost his life in Montana, unfortunately, was an FBI agent, killed in the line of duty. No one else was harmed because we balanced as we had not done before negotiation with tactics.

The Jewell case, the major controversy with the Jewell case was that I interrupted his interrogation so he could be given his Miranda rights. Because my view of the situation was that he was in custody and was entitled to his rights.

With respect to the Wen Ho Lee case, that's a case that has been indicted. He has pled guilty to several of the charges set forth in the indictment. And the facts remain in that case that the crown jewels of the United States nuclear program were downloaded onto tapes and taken them out of a government reservation. And we made that case, we solved that case by a forensic computer examination of millions and millions of records which we did, Mr. Rogers, with the help of the technology of NIPC, with the help of the experts that we were allowed to hire, the computer scientists who made that case from the hard drives, not from the streets.

The espionage case, of course, we regret. And I don't want to say much about that because this is an active case. But I will tell you I am much more comfortable leaving the FBI having discovered the case, which is charged before the court, than not having found it. Every counterintelligence case successfully made is also a failure. It is simultaneously a success and a failure. And we will learn from that experience.

And I know this agency and my successor and the people who are working on this problem will fix many of the things which need to be fixed. But the fact of the matter is, we uncovered that case. We made that case and the charges now stand before the court.

I do not believe that there has been a failure of oversight on the part of the Congress. And I would say that with the most conviction. I could give you example after example, and I don't want to take all your time this morning. But I believe we are the most scrutinized agency in the federal government. I also believe we should be because of the enormous power that we have and the potential for abuse that the FBI would have without that scrutiny.

In my first year as director, I think I was up on Capitol Hill over 200 times testifying, speaking to members, calling them on the phone. I think I testified before committees more than any other member of the executive department. I've not done the statistics, but we testified before Appropriations Committees, before Judiciary Committees, before Intelligence Committees, before Government Oversight Committees, and everything that we do is carefully scrutinized, as it should be.

One example of that, Mr. Rogers, you mentioned it, was the IT program of the FBI. We came up here, myself personally, presenting first the ISI program and then the EFBI program, both of which turned out to be flawed, and we did not go ahead with those programs because of the questions that you and your staff properly raised, and that required us to go back to the drawing board, redesign what we had.

We were fortunate, as you mentioned, to bring Mr. Dees (ph) in, and we have now a program, a Trilogy program, which is going to work. So that's just one of many, many examples of the oversight by this committee which has clearly directed and redirected our efforts.

I would say the same with respect to the CALEA operation. We got off to a slow start, particularly the FBI. You took the leadership of that. We now have $500 million appropriation that has been appropriated in the process of being expended. And we have what we didn't have in 1994, which is the ability to keep conducting court authorized wiretaps. You directed our efforts, you stopped us, you sent us in different directions. That's the kind of oversight that we not only expect but which, in this case, was extremely helpful.

So I think that with respect to the oversight of the Congress, it has been very comprehensive, very effective. It should be. We should be, as I said many times before, the most scrutinized agency in the United States government because of the power that we have. But I think the work by the committees here has been excellent.

With respect to the technology issues, Mr. Rogers, which you raise, and which I thank you again for your support over the years, I would recommend anybody talk to the state and local law enforcement community around the country--your sheriffs, your chiefs of police, the IACP, the Sheriffs Association, the District Attorneys Association. They will tell you that the delivery of the criminal justice information services by the FBI is excellent. Not to say that we don't have a glitch now and then, but the reliability of those programs--and you're correct, Mr. Rogers--some of them were very, very difficult in bringing them online, and we look a lot of responsibility for those mistakes. But the fact of the matter is they're all working. They're working well.

The NCIC system was the latest addition, which also has worked well, identifying 71,000 people with criminal records who shouldn't have had guns and were not able to buy guns.

We are catching up a little bit in technology, but I think we're catching up with the bad guys. The technology is changing all around us every day. It's not a question of being unprepared for it, it's a question of getting the resources that we need to do the job, to protect the country, the people that we serve, and to do it in a dynamic manner where what we're expending and appropriating does not become obsolete in a short period of time. So I just wanted to take a moment to speak about those things.

We have had troubles in this agency. We've had failures. We've also had great triumphs, and I'm not going to take your time this morning to list those triumphs which Mr. Obey alluded to. We have a matter before a jury in New York City, which I will not talk about. But a trial so complex and so difficult and so expertly worked by the FBI--your FBI--and agents who went to East Africa to find evidence and witnesses, a case that the United States should never be entitled to make but for the dedication, skill and hard work of the FBI.

The Rasam (ph) case recently convicted out in Los Angeles, major terrorist acts deterred from happening to the United States, to Americans, by the FBI work, and I'm not going to spend the time this morning to talk about the triumphs. But there have been very, very many, and I want to acknowledge that as I start my remarks.

With your permission, Mr. Chairman, I would like to address the issue with respect to the McVeigh case. As you know, the FBI has discovered and announced that documents and other items from FBI files apparently had not been turned over to the prosecutors handling the Oklahoma City bombing case, despite an unusual discovery agreement that called for broader than normal disclosure.

Last week, the FBI sent these items to the prosecutors in Denver who promptly delivered them to the defense attorneys. As Attorney General Ashcroft said Friday, a review of these materials disclosed no new information relative to the guilt or innocence of Timothy McVeigh. The underlying investigation and his guilt remain unchallenged.

Nevertheless, and regardless of how extraneous these documents may be, if they were covered by the discovery agreement, they should have been located and released during discovery. As director, I'm accountable and responsible for that failure, and I accept that responsibility. I will, however, outline steps that I am taking today to address the management aspects inherent in this particular failure.

By way of background, the FBI's investigation of the Oklahoma City bombing was a huge effort of enormous breadth. From the moment the bomb exploded on that horrific day, the FBI devoted every conceivable resource to investigating and solving this act of terrorism. During the course of the investigation, I am confident that we and the other agencies who aided us left no stone unturned. As a result, we collected massive amounts of evidence and reviewed literally a billion pieces of information.

To give you a few examples, we conducted over 28,000 interviews. We followed more than 43,000 investigative leads. We generated over 28,000 302s, investigative reports. We reviewed 13.2 million hotel registration records, 3.1 million Ryder Truck rental records. We reviewed over 600,000 airline reservation records and collected nearly 3.5 tons of physical evidence.

I am proud of the investigation and support teams who with their colleagues worked around the clock to solve this terrible crime. The investigation and prosecution of this case was a success story, a significant accomplishment, and it pains me to have the hard work and accomplishments of both investigators and prosecutors overshadowed by the events of recent days.

I regret the most that these events risk diminishing the enormity of their sacrifices and the superb quality of their service to the American people. I also regret the pain that this has caused the victims and family members who lost their loved ones.

The FBI committed a serious error by not ensuring that every piece of information was properly accounted for and, where appropriate, provided to the prosecutors so they could fulfill their discovery obligations. Because of the massiveness of this investigation and the implications inherent in being found guilty of such a horrendous crime, McVeigh and his attorneys were given access into government records far beyond what is provided for other defendants, far beyond documents that affect guilt or innocence. Once agreed, however, it was our unquestionable obligation to identify every document, regardless of where it was generated and regardless of where in our many, many offices it resided.

While I do not believe that the newly discovered documents will have any bearing on the convictions or sentences of either McVeigh or Mr. Nichols, I am not here to minimize our mistake or to make excuses. It appears that most offices of the FBI either failed to locate the documents and items in question, misinterpreted their instructions and likely produced only those that would be disclosed under normal discovery, or sent the documents only to have them unaccounted for at the other end. Any of these cases is unacceptable.

Because of the magnitude of this investigation and the vast amounts of information being gathered, the FBI established a separate command center, called the OKBOMB command post that operated essentially as a separate FBI field office. In the fall of 1995, the command post instituted a special case management and document tracking system which required all investigative materials to be sent to the Oklahoma City office for entry into a case-specific database.

Regardless of where a particular investigative lead was followed, whether in one of our 56 field offices in the United States, or in one of our Legats overseas, and regardless of the probative value of the information collected, if any, the investigative results were to be sent to the command post for uploading into their system. There were three principle reasons for this decision to enter all the data, physically, in Oklahoma City.

First, because the effort was so widespread and massive, the command post wanted to maintain close control over the investigation. By centralizing the evidence in document control, the investigators in Oklahoma City believed they could better ensure that the information was properly entered into the system, maintain the investigation's confidentially and more effectively identify and prioritize additional investigative leads.

Second, the FBI was converting to a new bureau-wide investigative information system, called ACS, the automated case support. And the investigators were uncertain about how this conversion would affect the ongoing investigation.

Third, during the first six months of the investigation, and because no such information was being generated worldwide, the OKBOMB command post had some difficulty ensuring that all field offices coordinated their investigative materials with the records maintained in Oklahoma City. Because of the latter, between August of 1995 and November of 1996, 11 separate communications were sent to the field offices requesting that all evidence be sent to the OKBOMB command post.

On November 14, 1996, following a discovery hearing before the court, the command post discovered that certain surveillance logs still resided in the field office and not in the OKBOMB command post where they should have been and, therefore, had not been turned over to the defense attorneys during discovery.

The following day, November 15, 1996, I sent a strongly worded priority teletype to all field offices and all Legats, those are our overseas offices, directing that all investigative materials be sent promptly to the command post with written confirmation from the office heads. The command post investigators believed that this directive, combined with the previous request had caused all investigative materials, regardless of apparent relevance or value, to be forwarded to the command post and be entered into the OKBOMB database.

As we now know, there were still many offices that had failed to comply fully or precisely with the instructions given. As a consequence, the items now at issue were apparently never turned over to the prosecutors during the discovery period. The events that led to the recent disclosure began in February of last year. Recognizing the historical significance of this investigation and rather than wait the customary 25 years, all Oklahoma City office began the process of collecting OKBOMB records for archiving and preservation.

That office sent the communication to our Information Resources Division asking for assistance in storing records and evidence relating to the bombing investigation. The office wanted to ensure that all materials were maintained in excellent condition for future storage in the National Archives.

Following discussions with the National Archives and Records Administration, the FBI's archivist sent a communication to all field offices on December 20, 2000, setting forth procedures for maintenance and disposition of records relating to the investigation. I understand this process revealed one envelope that was unaccounted for, causing the Oklahoma City office to send a communication to all field offices on January 30, 2001, directing that everything remaining anywhere in the field, no matter what it was, be sent to Oklahoma City so it could be evaluated and prepared for archiving.

Beginning in late January of 2001 the Oklahoma City FBI office began receiving from most of our field offices boxes containing a variety of investigative materials, including witness interviews. In total, over 100 boxes of materials were forwarded to Oklahoma City during the last several months. Rather than merely storing the material for future archiving, a group of FBI analysts undertook the arduous process of double-checking everything by manually reviewing every item to ensure that each piece was already included in the OKBOMB database.

In other words, there was no legal requirement that they do this. All they had to do was collect the evidence for archival purposes.

What they did instead was, item by item, check each and every one of the documents received against the known database. By early March, an analyst had collected a number of documents that she had not been able to locate in any database.

She informed Danny Defenbaugh, the former head of the OKBOMB task force and currently the special agent in charge of the Dallas field office, but advised him that further research would be needed to determine whether these documents were in the OKBOMB files.

Shortly thereafter, on March 15 of this year, the Oklahoma City office sent another communication to all field offices and Legats requesting another search for all OKBOMB materials and immediate delivery of any items to Oklahoma City.

Following several weeks of additional research, the analysts completed their review and forwarded to SAC Defenbaugh copies of all materials which they were unable to locate in the OKBOMB database. SAC Defenbaugh received copies of the materials on May 7 and, following an initial review, sent the materials on May 8 to the prosecutor in charge in Denver.

That same day, the prosecutor, Assistant U.S. Attorney Sean Connelly orally advised defendant McVeigh's attorneys that the FBI had discovered additional materials. He copied the materials, delivered them to defense counsel on May 8, the same day he received them.

I first learned of this matter on May 10. The materials provided to the defense counsel total approximately 3,100 pages and consist of slightly over 700 separate items. Many are documents containing several pages. An additional seven items from our Baltimore field office were located on Friday and were provided to the defense counsel yesterday.

The materials came from 46 different field offices and one Legat. The field offices and number of pages from each are listed at the end of AUSA Connelly's May 9, 2001, letter to the defense counsel, which I believe the members of the committee have seen. The majority of the items, approximately 470 of 708, consist of 302s and inserts which were covered by the discovery agreement reached between the prosecutors and defense counsel.

Recognizing the significance of finding anything, however, on Friday evening, I ordered a complete shake-down of the FBI, telling each special agent in charge and assistant director that I would hold them personally responsible for this last effort. This latest scrubbing has produced additional documents which are currently being reviewed to determine whether they were covered by the discovery agreement and, if so, whether they have been produced. I understand these documents are of the same character as the others.

We will have to wait for the inspector general to complete his investigation before I have a full explanation of how this happened. Preliminarily, we have determined that there appears to be a number of reasons, no one pervasive.

For example, some offices wrongly concluded that the information was so extraneous that it was not covered by the request related to these prosecutions. Some offices forwarded summary results of investigation but not the underlying documents. Some offices forwarded copies of originals. Some offices turned investigative inserts into 302s and forwarded only the 302s. Some offices overlooked material when calling out responsive documents. Finally, some offices believed they sent the material but, in some cases, not in a form that could be uploaded into our existing system.

I would like to note, Mr. Chairman, that there was an unusually broad discovery agreement in this case. Under ordinary federal rules of criminal procedure, the vast majority of these items would not have had to be turned over to the defense, as I understand it.

Because of the extraordinary breadth of this investigation and the large number of interviews, over 28,000, the prosecutors and the FBI agreed to make available to the defense every interview report, regardless of whether the interview was material to the defense or extraneous to the core investigation.

There is a protective order in this case that prevents me, at this time, from discussing in any detail the substance of the materials at issue. However, I can say that I have no reason to believe that anything in the materials bears upon the convictions or sentences of Timothy McVeigh or Terry Nichols.

Several lawyers and agents from the Justice Department and the FBI conducted a page-by-page review of the material.

Nothing in the documents raises any doubt about the guilt of Mr. McVeigh and Mr. Nichols. In fact, many of the documents relate to early leads that developed no useful evidence or information of investigative value. For example, a number of our reports of interviews of witnesses who thought they had seen or had information about John Doe number two and, to a lesser extent John Doe number one. These include persons who had seen composite sketches and thought they recognized him and the subsequent interviews of the people that were named as possibly John Doe one or two.

Other documents relate to other early investigative steps that never produced anything of value, unsolicited tips proven wrong, people volunteering public source information, et cetera. Although I fully support the attorney general's decision to postpone the execution--fairness and justice, of course, demand that--I do not believe this belated disclosure of documents will affect the outcome.

To the contrary, it still appears that all Brady and other material reflecting on guilt or innocence was disclosed during discovery. In fact, while the timing can be rightfully criticized, our employees did exactly what they should have done in these circumstances. Regardless of the embarrassment, they have brought this to light, not the easiest thing to do, but clearly the right thing. And I think if we talk about the culture of the FBI and the history of the FBI, we need to juxtapose this about unfortunate events that have happened in the past. This was a case where the people who protect this country and serve in the FBI did exactly what they were supposed to do.

For eight years, I've been preaching core values to my associates, to tell the truth, to be honest, to be responsible, and this is a case where they have done that. The issue in the end is what can be done now to address what regrettably has become a recurring problem. After close examination, I am in agreement with those who have identified the bottom line as one of a management problem. This wasn't a computer problem, Mr. Rogers, this was a management problem.

We simply have too little management attention focused on what has become over time a monumental task. The FBI maintains over six billion pages of paper records and a similar number of automated records. It is a mountain growing bigger and busier with each passing day.

Rightly or wrongly, we are investigators focused on preventing terrorism and solving the most sophisticated crimes. Perhaps that is why the seemingly mundane tasks of proper records creation, maintenance, dissemination and retrieval have not received the appropriate level of senior management attention. We have expended considerable resources to ingrain in our employees core values and ethics. I'm very proud of that.

We have trained them in cutting-edge technics in the cyber world. The dizzying pace of the evolution of crime, terrorism and technology, I believe, have caused us to lessen our focus on a function so basic that perhaps we have taken it for granted. Well, not any more. In every instance when significant problems have arisen, it has boiled down to the need for more and better management. When our laboratory faltered, as I said, I brought in a world-class scientist to run the operation. It's now the best it has ever been.

With our automation infrastructure failing, I brought in a world-class computer executive to fix the problem. With Congress' help, that's being done. When Waco and Ruby Ridge demonstrated the need for better crisis management, I created a new structure and put a senior executive in charge that redesigned that function. And it has been exceedingly successful, as I mentioned before. This is no different.

Today, I'm announcing the following. I have instructed my deputy to form a search committee to hire a world-class records expert, a senior official who will be dedicated to this issue and this issue alone. I have instructed that a separate office of records management and policy be established, and we'll soon be seeking the required authorizations. This is a core function that deserves the full and constant attention of the entire FBI.

I have instructed this morning that every employee in the FBI immediately receive a block of instruction on every aspect of our existing records policies. These policies are good when followed, but they were not followed here.

Under the crush of everyday business, I suspect that many have forgotten some what was learned in basic agent's training. I've instructed that additional training be provided to all new employees, especially new agents, and that records training be included as required annual training just as ethics, EEO and other important subjects are.

I have instructed that the Trilogy automation plan be modified to include sophisticated document handling accountability and ordering functions to support enhanced line supervision of these issues. I have instructed that required agent file reviews include a specific focus on these issues.

When I became director, I established certain bright-line rules regarding conduct. These rules, strictly enforced, quickly had the desired effect. I have instructed the same be done here. In retrospect, the proper creation, filing and dissemination of our investigative records is as important to ensuring the rights of people whom we investigate and protect as compliance with other constitutional and procedural requirements.

Finally, I have instructed that the FBI stand down for a day to begin implementation of these initiatives and, more importantly, to ensure that every employee understands the importance of what must be done. We can and are fixing the automation aspects of this issue. We are down to management and human behavior. I believe that these immediate steps alone, in addition to recommendations from the inspector general and others, will get us where we need to be. We simply cannot allow the dazzle of technology and the complexity and breadth of our mission to dim the focus on a function that goes to the very core of what we do.

In short, this episode demonstrated that the mundane must be done as well as the spectacular. And I believe these steps will ensure that it be done.

Mr. Chairman, by your leave, I would either go into a very brief presentation of the budget request or yield to you at this point.

WOLF: You can just submit that for the record, I think. That would be fine. There will be some questions, though.

Thank you for your testimony. There will be a lot of questions. We're not going to use the five-minute rule, but I would ask members to respect the fact that there are many others that want to ask a question, and I'll move very, very quickly through mine. And hopefully, there will be a second and maybe even a third round.

One of the questions we were going to ask, but I think you answered it, you are not in any way suggesting that this was a question of lack of money. You said it was a question of...

FREEH: No, sir.

WOLF: OK, thank you.

Secondly, with regard to the broadness of the discovery agreement being so extensive, why wasn't there a thorough hand search conducted in addition to the electronic?

FREEH: That's one of the questions that we have to answer. I would have assumed that when an office was told to produce and deliver and transfer any and all records, that that would have to be done in part by hand. I assume it was done in part by hand in different instances, but for some reason in many, many different offices, this was not successful.

But I don't know is everyone did a search by hand or not.

WOLF: Forty-six of 56 failed; 10 did what you wanted them to do. Have you gone to the 10 to see what their understanding of your directive was versus the 46?

FREEH: We have started with the 46 and asked for written explanations, which we have summaries of.

WOLF: Wouldn't it make sense to go to the 10 that complied, to see what they did right?

FREEH: We will do that, too, sir.

WOLF: Also, on the collection, do all field offices adhere to the same procedures regarding collection, gathering and storage of important evidence? If an agent is working in Albany, N.Y., how does she or he know what evidence is being collected elsewhere in the country?

FREEH: Again, with a automated database, anyone could query to determine the contents of the database, including references to text interviews, references to 1A envelopes, which are physical evidence. That was not the case here because nobody in the field was uploading the materials into the ACS system. They were physically sending the materials at the direction of Oklahoma City to that office, where they were then uploaded by the people working on the task force.

But in a normal situation with ACS working properly and the Trilogy objectives achieved, you should be able to query the system to determine the amount of evidence, the number of 302s, even the text of the 302s, and references to the specific physical exhibits.

WOLF: Have you looked at your original communication to see if it was fuzzy or if it could have been misinterpreted, if it was just advisory or if was...

FREEH: No. There were 16 communications.

WOLF: Can you submit that for the record so we can see?

FREEH: Yes.

There were 16 communications, two sent from the director's office. And they are absolutely clear, as far as I can see, that everything and anything was to be retrieved and sent to Oklahoma City.

WOLF: If you can submit them for the record.

I don't want this hearing to go away without talking a little bit about the Hanssen case because that troubles me deeply, too. I would like to hear your comment. I am, again, speaking only for myself, and I've spoken to you about this privately, and I'd like you to mention it publicly. The process that the bureau and the Justice Department has set up I think is flawed in the sense that--and let me just say, I think Judge Webster is a good man, a great distinguished record--but he was at the bureau when Hanssen went bad in 1985. He was also at the bureau, at the agency, when the Ames situation developed.

Would it not be good to set up a team B, an outside group? And I looked at the group that were appointed yesterday--or the other day in the paper, all good people, but all people who are sort of inside, that know each other, that are close to each other. Again, I am not casting any aspersions and saying anything negative. They're all good people, outstanding individuals.

But during the Reagan years, when they looked at the problems with regard to the Soviet Union, they had team A and Team B. They had an outside group. I think it was chaired by Mr. Pipes from Harvard, who came in totally not connected it with. I think the agency and the bureau has to do the same thing.

Have you all concluded that the Webster recommendation will be the final, or will there be any formal outside group made of people not necessarily in the bureau, but people with some sort of counterintelligence experience that will give it close review and rip it apart and make any recommendations to make sure that what happened never happens again?

FREEH: Yes, Mr. Chairman, we have. And there is a team B, and there is an alternative.

We have an inspector general investigation ordered by the...

WOLF: Is that team B, the inspector general?

FREEH: I think it is. The inspector general is going to do one comprehensive review of not just the security procedures, which is the very narrow area that the attorney general and I and the president have asked Judge Webster to look at; simply look at the internal security controls at the FBI during this period and make recommendations for whatever change, and give us whatever criticism is deserved, and I'm sure there's plenty.

The inspector general is looking at the broader counterintelligence failure, all of the bits and pieces that will go into, I'm sure, much more comprehensive recommendations. In addition, of course, the two intelligence committees are now conducting, with our assistance and participation, a full review, and I'm sure that that will result in reports and recommendations.

Whether there should be another outside group of counterintelligence experts, we don't reject that. It certainly is something that we would consider and I'm sure could be considered, but you have now a whole layered approach and independence coming from different sources to look at a problem and make recommendations.

WOLF: Well, I think you need somebody outside of the government, but somebody who has an understanding and somebody outside the building in addition to the inspector general. I sent a letter the other day--we can talk about it--asking for you to take a look at some things. But I just don't think that quite meets it, and it's very serious when an FBI agent goes bad, and as a result of that, that jeopardizes the security of the United States.

There were several men that were imprisoned in the Soviet Union as a result of that activity. And I just think you need to go back and bring a fresh outside, totally independent view of people who would just see things as they really are, and not somebody necessarily that's in the building that you see at lunch time or you see just totally, completely independent.

The last question I have, and then I'll recognize Mr. Serrano.

What are your thoughts with regard to having an inspector general in the FBI? The SEC has an inspector general for a very small agency like that. And because of the importance of the work that you do and the credibility is very, very important, what are your feelings about having an inspector general for the FBI?

FREEH: I don't believe it's necessary, given the structure that the Department of Justice has for many, many years long-standing, established and, I think, reformed and strengthened. We have, within the FBI, our own Office of Professional Responsibility, as you know. That is an office which reports to and is really under the authority and direction of the larger department Office of Professional Responsibility.

We do have an inspector general in the Department of Justice who regularly, as evidenced by the laboratory investigation, looks totally and comprehensively at all operations. Historically, one of the concerns about a politically appointed inspector general in the FBI is that the FBI, unlike many of the other agencies that have inspector generals, work on very sensitive cases, not just on the national security side, but on the public corruptions side and the political side. And that there needs to be some insulation from the inquiry and the access to those kinds of cases, even under legitimate predicates from the normal course of events. That's why the structure was set up differently and, I think, it's something that certainly should be reconsidered, relooked at. I know the committees are going to do that.

I would encourage them to speak to attorneys general past who have presided over the system and who, I believe, will give very, very good arguments why the investigative nature of what we do is significantly different from other agencies that have politically appointed inspector generals. And that there needs to be some insulation in that regard.

WOLF: What about the CIA?

FREEH: The CIA does not conduct criminal investigations. The CIA does not have the sensitivity that we bring into our criminal investigations from the moment a case is open until the moment it goes into a court and beyond. I think it's a very, very fine and important distinction.

WOLF: But to a certain extent, I think the argument that you're making almost makes the case. I believe in my mind, I think it would be good for you or good for the director to have someone that they trusted that completely would go wherever and asked the tough questions and be very, very aggressive. And my sense is that you almost make an argument for having one in the FBI certainly much greater.

There are activities in the SEC with regard to prosecutions. There are activities with regard to the FAA with regard to prosecutions. But I sense it would be a good idea to have one, particularly in light of the McVeigh and also some of the other things that went on over the last eight years. My sense is that the inspector general at Justice did not cover themselves with glory because I never saw them commenting on some of the things that, quite frankly, I think should have been commented on.

With that, I'll recognize Mr. Serrano.

SERRANO: Thank you, Mr. Chairman.

Let me once again congratulate you, Director Freeh, on your openness. I repeat, based by the media attention today, you came here with a lot of people are expecting you to say some things, and I think you've said a lot and you've faced it head on.

With that in mind, I'd like to ask you a two-part question. One, if we could force you to stay and advise the new director, whoever he or she may be, what would you advise that person to do for and to the agency? What would be your vision for that person or that vision for yourself, had you stayed on to complete your term?

And secondly, how would you like your tenure to be remembered? And for those who will set out to criticize your work, how would you like to combat that?

FREEH: Mr. Serrano, with respect to my successor, it should be a person of absolute integrity and independence and ability, both on the legal side and maybe also on the investigative and prosecutorial side.

I think I would advise them that we continue to need in the direst fashion outside non-FBI bureau, non-FBI culture management skills. As I mentioned, the FBI laboratory, which ran fairly well for many years, was always presided over by an agent scientist. We brought in a world-class scientist, Dr. Kerr, to run our laboratory in the aftermath of the inspector general report and valid criticism and recommendations. It's the first time we ever had an outside scientist who thought of peer review, who thought of things that we never incorporated into the normal course.

When I was choosing a general counsel, we always had as the head of our legal affairs an FBI agent who was a lawyer, which was great. And we had many honorable and good people in that job. We never had anybody who prosecuted a case. We never had anybody who knew what Brady obligations were, who knew what discovery allegations are in the course of giving information to a defendant in preparation for trial.

So I brought in people who were fine lawyers but also experienced prosecutors.

With respect to the information technology, again, we had wonderful people working in the FBI. When I got there, we had agents writing code for the IAFIS program. Their heart was in the right place, but they don't do that for a living. They didn't have the experience and the depth and the knowledge to be writing code for a multi-million dollar technical system.

So I brought in an expert, an expert who was kind enough to come into the government, who is a world-class information scientist. And he has redesigned, I think to the committee's satisfaction, a proposal which was previously flawed and which I brought up here several times asking you to consider. He looked at it, and he said, "It's a three-legged horse, and it needs the following changes," which we then made. And it's going to work, and I'm proud that it's going to work. It took me a long time to get him there. I should have done that early on.

So I think my recommendation would be we've got to have that--going beyond the integrity and the other personal attributes that I mentioned. It's got to be someone who understands we need a lot of management help in an agency that is very old, but moving very quickly into new areas and new venues.

Your last question, how is my tenure going to be remembered? You know, I don't know. I hope it's going to be remembered well. My main emphasis, at least over the last eight years, has been on our core values, which are to me the most important part of what we do. Core values of telling the truth, being honest, respecting people's rights, being fair, having compassion, making sure that we are reminded constantly of our humanity, but also the power that we wield.

One of the little footnotes, I hope to my tenure, I require each of our new agents classes to come up and spend a day at the Holocaust Museum in Washington. And when I instituted that, people said, "Why are you doing that?" I said, "Because I wanted the FBI agents who leave the academy with enormous power to realize the potential for abuse of that power, and how the people we protect and the people who rely on us look to them for the protection of those rights."

I was in Kenya two weeks ago basically to go over and thank the police officers who put together a case we never could have put together, the East African bombings case without their help. When we landed in Nairobi, two Americans were freed. Two Americans who were businessmen from California, who thought they had a business deal on the Internet and went over to Nairobi, and instead of meeting a business partner, they met a gang of hostage-takers who locked them up, used their telephone to call their relatives and extorted money on threat of killing them.

They were e-mailing the threats directly from the location where the two hostages were being held. The FBI, the FBI agents in Nairobi, which is an office that I opened after the bombings, the agents were the actual officers who went in there with the Kenyan police to rescue these two people. Those people would have been killed had they not had the assistance and help of those two FBI agents.

When they got them out, the two hostages who were very, very grateful--this got a lot of publicity back here in the United States--they said, "There is another hostage that these guys are holding." Nobody knew about this hostage. This was another American who was taken four months before that. Nobody knew he was gone. The FBI agents with the Kenyan police went back and they got him out.

That ability to work overseas, to protect Americans, to exploit the e-mail--which goes back to our technical ability, Mr. Rogers--all of that stuff was put into place to deal with some of these new challenges.

So we hope they will remember well. In service, I've been very proud of 27 years of service. I hope I've done some contributions of value to the bureau and the country.

SERRANO: Thank you, Mr. Freeh. And one of the moments that certainly a lot of people in this country were very pleased to see the result was initially something that so many of us or most of us should have been and are, I think, disturbed by. That was the information that Director Hoover had blocked bringing a case for the 1963 bombing.

And that brings to mind the thought that there might be now a desire on the local level to bring up more cases that are still sitting around, unfortunately, that have not been resolved. What do you think would be the FBI's role and what should be the FBI's role if local prosecutors, state prosecutors, municipal prosecutors bring up these cases?

FREEH: I think we should support them as we did in this case. As you know, this case was done in state court with a federal prosecutor, but the investigative agency was the FBI.

We did the De La Beckwith case a short time ago. There are many of these cases which are being looked at. These are civil rights cases from the '60s and the '70s. And I think our mission ought to be to vigorously reinvestigate, repursue evidence, obtain new evidence and bring those cases, particularly because there's no statutes of limitations for a lot of those crimes.

SERRANO: Do you have any idea how many cases may still be open, or ...

FREEH: I'm aware of a couple. I'll try to get you some specific numbers on that.

SERRANO: Let me now move on quickly to the issue that I praised you on before. In a hearing that we had here when Mr. Rogers was chairman, in response to a question about an issue in Puerto Rico and actually in parts of the 50 states, regarding the independence movement and what we know now to be the persecution of the FBI, where people simply for favoring independence for Puerto Rico were followed, where stories were fabricated about them, files were kept very closely, and so many had their careers totally ruined and their reputation ruined, professional people, not professional people. And this was not only in Puerto Rico, but in New York and New Jersey and Hartford, Connecticut, and so many other places.

Through your efforts, a historic moment took place in that your agency began to release these files, which will amount eventually to 1.8 million files. You assigned a team of people to work on it. And in many cases, a lot of what needed to be done has been done.

Now, we're terrified at the thought that a new director does not have a mechanism in place to continue to release these files. In addition, you told us that at a certain time, you would be giving us whatever information was available on the unsolved mysteries surrounding the deaths of a couple of members of the independence movement and the alleged, but believed very strongly, torture or mistreatment of the leader of that independence movement who spent 27 years in federal prison.

Should I have concern that this release of these materials, which, incidentally--and I must also compliment you on this, the material, some of it had been released in the '70s, very little. But the stuff that is coming out now, the files, has 95 percent more information that had been deleted in the '70s. So it's much more, many more number of files, but much more information.

How concerned should I be that this will stop now?

FREEH: You need not be concerned. You have my commitment and the institution's commitment that's going to continue. The director is the only political appointee in our agency. Everyone else is there for career. And my deputy, Mr. Collingwood, who you know, who has the direct supervision of this, Mr. Parkinson, our general counsel, thank goodness for the FBI, are going to stay there, even after I depart. And they will ensure, I commit to you, that this will continue, and we'll bring this to the fruitful and logical conclusion it should have been brought to 20 years ago.

SERRANO: I have one related question, Mr. Chairman, before we move on because I know we have a lot of members who want to ask a lot of questions today. There seems to be a concern or a shortcoming on the part of the agency as to people who speak other languages. And there's been talk about information available to the agency which hasn't been translated or transcribed in time to act accordingly. And it seems to me like such a strange thing that in this day and age, you wouldn't have agents or personnel that would speak all of the languages of the world. What is the situation with this?

FREEH: We have some great difficulties and challenges in many of these languages. And you are absolutely correct. We have many documents and many investigative materials which are not translated. Sometimes they're in a summary form, but no one has really gone in there and looked at them.

We have a very difficult time competing with everyone else, particularly the private sector, in the area of languages, particularly Arabic and Farsi and some of the very critical ones to some of the work that we perform.

We are on a GS schedule, which means, you know, if we find an Arabic speaker in New York City, we can pay them about a fifth of what they could get almost any other place in town. So we have a very, very difficult time competing.

One of the reasons that I had proposed to the committee and the Congress several years ago an exemption from Title V for the FBI, which we briefly got. Unfortunately, it didn't perpetuate itself. But the exemption from Title V would give us the ability in New York, for instance, to pay a salary where we could recruit and compete, where we can never do it under the GS scale. We could also get scientists and technical people that otherwise would never come to the FBI except for patriotism, like some of the people sitting here in the room.

So this is going to be a continuing problem not just for us, but all the other agencies that are going to need this kind of instantaneous review and comprehension.

SERRANO: Thank you, Mr. Chairman.

WOLF: Mr. Rogers?

ROGERS: Thank you, Mr. Chairman.

Director Freeh, your last appearance before this subcommittee, I guess, the eighth annual appearance for your budget request, all of which I've been privileged to be present at. You have presided over the FBI during a time of great change in the country and the world. You have ushered the FBI into international investigations now by establishing overseas offices of the FBI that did not exist before your tenure.

You have brought the FBI into the new world of counterterrorism and solved some very complex cases in that arena. You've ushered the FBI into the cybercrime era, which is complicated beyond anyone's understanding, I think, almost. And you steered the FBI during some very difficult years that I know tested you in a major way.

You've maintained, in my judgment, the high integrity that you brought to that office and that you carried with you as a federal judge and a federal prosecutor in New York City under trying times, and you presided over a huge increase in the budget of the FBI over these eight years. In fact, $1 billion increase to the FBI over the last five years alone, with thousands of new agents and thousands of new personnel, not to mention the new laboratory and other improvements.

And I'm sad that this is your last appearance before the subcommittee because you have been a good director. You've been a conscientious director. You've been frank with us and frank with the world. You say the buck stops there. When there's some problem, you accept the responsibility, as is rightly the case. But you have today even, again, said the buck stops here with you, and we appreciate that.

But I just wanted to say in this last hearing that you will be before us at how much we have enjoyed working with you and admired your fortitude and your persistence and your perseverance, but mostly your ethics and your good conscious. And we will miss you in that respect. I guess you're ending, what, 27 years of public service or thereabouts?

FREEH: Yes, sir.

ROGERS: We hope that that's not the end of your public service. We hope there will be other avenues of serving the public. But as you have said so many times, it's time for you to turn your attention to providing for those six boys that are going to be going to college.

It's sad that people in public service aren't able to earn a decent living in these high-cost living areas, but that's sadly the case. The FBI has been one of the poster agencies for losing personnel to the high costs of living in places like San Francisco, New York, Washington and other places because the pay is not adequate. And that's something I think the country is going to have to address because the specialists that we require in agencies like the FBI, the SEC and others, we simply can't attract them from the private sector with the kinds of salaries we pay.

And the sacrifices that the members of the FBI have made and are making today sometimes get tarnished, unfortunately, by things like the McVeigh document matter.

But I trust that that will not be a permanent blight. Let me quickly ask you about that.

In your statement about the McVeigh matters, among other things, you say, quote, on page 1, "As Attorney General Ashcroft said Friday, a review of these materials disclosed no new information relative to the guilt or innocence of Timothy McVeigh," end of quote. There are other portions in your statement that are of similar import.

Now I wanted to talk to you briefly about this, with the short time that we have, about what kind of information this is and how relevant it is to the guilt or innocence of the defendant. Now, I'm an old prosecutor, an 11-year state's attorney back home. I practiced law in the private sector before that, so I'm familiar with orders of the court requiring both sides to show each other what kind of evidence you have. That's standard procedure and was true in this case.

I gather in this case, however, the court ordered you and the FBI and the agents and all other parties to go well above and beyond what normally is required to be shown. And you're to show anything and everything that might have some bearing on the case. Is that generally true?

FREEH: Yes, sir, that's exactly the scope of it. It was broad.

ROGERS: And so it was as broad as you could make it. That's not normally the case, is it?

FREEH: That's not normally the case, nor is it required by the federal rules of criminal procedure.

ROGERS: Now, could it be that some of the field offices that got this routine piece of paper from the office saying, "Turn over the documents in the X case," is it possible that some of them could have said, "Well, that's the routine thing, let's turn over these documents because they are relevant to the case," and didn't realize that this court order went way above and beyond what's normal? Is that possible?

FREEH: It could have been, Mr. Chairman. But again, there were 16 different requests made, and although they might not recite the words of the discovery order or agreement, they clearly call for anything and everything, and there shouldn't have been any misunderstanding.

Now, we have to wait and have the inspector general speak to case agents and supervisors to get exactly what their understanding was. But to answer your question, it should have been clear from the communications that everything and anything should have went because that was the nature of this very extraordinary order.

ROGERS: You say in your statement, on page 12, that some officers wrongly concluded that the information was so extraneous--the information they were being asked to turn over--was so extraneous that it was not covered by the request of the court. What do you mean by that?

FREEH: Well, I think that what that explains is some of the, at least, preliminary explanations that they didn't think a particular item in a specific office was necessary. Let me just give you a "for instance." We had individuals who would come into the FBI office and give us a public document, and the agent would receive that and put a 302 together saying this was received--absolutely no nexus or relevance, I would argue, to the case, never contemplated any kind of discovery rule.

But under this order, because it was a 302, we agreed to give it over. So, could that agent have looked at that serial and said, "They can't be asking for this"? If they did, I think it was the wrong interpretation. Maybe the order should have been clearer, and those 16 teletypes didn't do the job, and that's what we have to find out.

ROGERS: So in a general way, can it be said that the documents that we're talking about, that were not turned over, that those documents are, at best, remotely connected to the case, are so extraneous as to be not helpful to McVeigh in any way?

FREEH: That's the way they've been described by the lawyers and the prosecutors who reviewed them, that set forth in Mr. Connelly's letter. That's my understanding. I would like these documents to become public. And there's a protective order that prevents that now. But ultimately, they will be, and people can make their own determination.

ROGERS: Do you know how many documents were actually turned over in the normal process in the case?

FREEH: Thousands and thousands and hundreds of thousands, plus access to databases and millions of more records.

ROGERS: So could we say, millions of items...?

FREEH: Yes, sir.

ROGERS: ... were turned over. And the ones we're talking about here that were not turned over, how many are there?

FREEH: We're talking about 700-plus documents or things or items.

ROGERS: None of which have any relevance to the guilt or innocence of Tim McVeigh?

FREEH: No, sir.

ROGERS: No, sir, what?

FREEH: They do not.

ROGERS: So it seems to me, like, maybe there's been a big much more to-do made of this than the record reflects. Is that a fair statement?

FREEH: Well, yes and no. In terms of guilt or innocence, in terms of not only the evidence in this case, but the subject's admissions, the letters that he's written, the reference to murdered children as collateral damage--I think was the words that he used--the evidence in this case is overwhelming. So in terms of guilt and innocence, no, nobody should worry that someone was victimized or that someone's rights were not protected.

On the other hand, we have an obligation in the FBI to produce, in this case, every single one of those records.

ROGERS: I understand.

FREEH: And we failed in that, and we're responsible...

ROGERS: I understand.

FREEH: ... and the country should have a better ability to rely on us than that.

ROGERS: I understand that. But if these documents are of no importance to whether or not the man is guilty, I know you have to turn them over. But what I'm asking you is, does it make any difference to the case, that when they see the documents, will it make any difference in the case?

FREEH: Ultimately, a judge is going to decide that, if necessary. As far as I'm concerned, as a former judge, as a prosecutor, as an investigator, absolutely no difference as to guilt or innocence, particularly given the circumstances following his conviction.

ROGERS: Well, now, some of these documents that we're talking about, you say the field office has forwarded summaries of those documents.

FREEH: Yes, sir.

ROGERS: But not necessarily they didn't send along the underlying document, but the summary of the document was sent.

FREEH: Yes. But we had agreed to provide the actual 302, and we did not do that in some cases.

ROGERS: What is a 302?

FREEH: 302 is the actual recitation of the interview or investigative matter. So what happened in some cases, as I understand it, that information was put into a teletype and the teletype was sent. But the underlying 302, which we promised to hand over, was not handed over, so we violated the order.

ROGERS: So those are some of the documents we're talking about?

FREEH: We have some in that category.

ROGERS: And what percent of the total is that? Small amount.

FREEH: I don't know. I would be hazarding a guess.

ROGERS: But nevertheless, the summary of them was turned over.

FREEH: In many cases, that's correct.

ROGERS: And now you're going to send the actual documents.

FREEH: Yes.

ROGERS: No surprise.

FREEH: I don't think so.

ROGERS: And then some of the documents that you're now turning over that you discovered are originals that you had sent copies of in the original order to turn over documents. Is that correct?

FREEH: Yes, sir.

ROGERS: So now, instead of sending just copies, you're going to send the originals?

FREEH: We're going to send everything.

ROGERS: No surprise?

FREEH: No surprise.

ROGERS: And then, some of the documents and information that were sent, were sent, but they were not in a form that could be uploaded into your existing technological system. Is that correct?

FREEH: In OKBOMB, at the task force. Yes, sir.

ROGERS: So was that material delivered to the court?

FREEH: Again, in some instances, I don't think that it was. I think that's in the category of things that I mentioned, which were not put into a database, uploaded, to use your words, and then made available to the defendants.

ROGERS: Now, as you say in your statement on page 13, and I'm quoting and summarizing. Under the ordinary rules of criminal procedure, that you practiced when you were a prosecutor and then presided over it when you were a federal judge, and that I practiced in Kentucky, under normal ordinary rules of criminal procedure, as you say in your statement, "The vast majority of the items we're talking about would not have been required to be turned over to the defense."

FREEH: That's correct.

ROGERS: You had 28,000 interviews, and you had tons of material that were turned over. And what we're talking about here is really insignificant, irrelevant documents that have no bearing on the case.

Is that a fair statement?

FREEH: That is my understanding and the understanding of the people of the people who have reviewed these materials. Yes, sir.

ROGERS: Thank you very much, Mr. Freeh. Thank you.

WOLF: Mr. Obey?

OBEY: Mr. Director, I'm sorry I couldn't stay for the whole hearing. I had two other hearings I had to deal with, but I have been informed of your statement earlier and I appreciate it.

I won't go into again the litany of problems that I discussed in my initial statement. I just want to observe, again, that I'm sure you don't like to be here in this position today. It's a lousy way for you to go out on your watch, and it's not very happy for us either.

Because we are faced with a very tough dilemma, we desperately need an agency that has all of the powers that your agency has to defend our security interests and to keep this a civilized society here at home. But when the agency to which we entrust those extraordinary powers appears on so many occasions to be out of control and lacking in discipline and lacking in oversight, when there seems to be something about the culture there that resists management, then we have a really tough call because we have the choice of either cutting back on the authority that we give your agency so long as it continues to be out of control in these areas or simply saying, "Well, with all their faults, they're the only thing we've got," and so we continue to provide you with the powers which, on occasion, wind up coming back to bite us all and to bite the country as a whole, and we don't want to be in that position.

We want to know that the agency that you head is well organized enough and disciplined enough and responsive enough and sensitive enough that we won't run into a lot of these problems. I mean, I know that some of these things probably happened not because anybody intended that they happen, but simply because in a human institution, people foul up from time to time. It's not been my impression that you have been very inclined to accept that explanation in other circumstances from time to time, but that's another issue as well.

I'm just concerned about what kind of processes you have in place because it seems to me that whatever they are, they are failing you and failing us. I'm sure you're as angry and as upset as we were when you learned about the McVeigh problem. But, frankly, I think some of the other problems that have been raised are far more serious than the McVeigh problem. That just happens to be the one that gets the attention and has the glitz to it this morning, but it's not the fundamental problem.

Let me ask you, you had a failure by 46 of the 56 field offices to provide the information that you asked for repeatedly.

FREEH: Yes, sir.

OBEY: You have a compliance review process, as I understand it. How many of these 46 offices were subject to that process since the orders to provide those McVeigh files were made? And in how many instances were the failure of those offices to comply brought to your attention as a result of compliance reviews?

FREEH: I'll give you much more specific information on this. We have, as you correctly referred to it, an inspection compliance process.

We have an inspection division that goes from field office to field office, that goes from headquarters division to division, doing full audits with respect to financials, compliance with regulations of all the many, many things that this process has developed over years. And I think people in the Department of Justice and people in the government will tell you that our inspection process, which looks for compliance, is a rigorous one.

I would say most of these 46 field offices, particularly between 1995 and the present were probably subject to an inspection. I'll give you the exact numbers and which ones were inspected and where they may have been related or similar failings reported and asked for corrections in those reports. I just don't know the answer as I sit here.

OBEY: It had been my understanding that each entity within the bureau is subject to that process once every three years.

FREEH: That's correct.

OBEY: Wouldn't that mean, therefore, that all of the agencies involved had been reviewed at least once since your orders went out?

FREEH: I would venture to say that's probably accurate, but I'll get you the specific numbers.

OBEY: Shouldn't that process have uncovered the fact that those files weren't turned over?

FREEH: Not necessarily those files, unless they inquired about that particular case. What it should have and maybe otherwise could have identified is that in that particular office the record retrieval system and protocols were ineffective. That assistant U.S. attorneys had complained, that defense lawyers had complained that in the course of cases, like this case, they were not given and received access to those things they should have.

OBEY: So then the system that you had to review the performance of these agencies, in fact, failed to turn up this crucial piece of information for you?

FREEH: The inspection process did not identify the failing in this case, that's correct.

OBEY: So the answer is yes?

FREEH: Yes.

OBEY: That I find frustrating. I would hope that we could count on that not happening in the future. But given the past track record of the agency, I'm dubious.

What also troubles me is what the bureau does to evaluate not just whether it's complying with its own rules, but whether, in fact, those rules themselves make any sense and will, in fact, do the job. Do these various programs and operations work the way they are supposed to work? Are they accomplishing their stated goals, things like that? How many evaluations, how many full-blown evaluations of the counterterrorism program took place while you were director?

FREEH: Internally?

OBEY: Yes.

FREEH: We probably have, you know, a series of inspection reports on the program. I couldn't tell you how many.

OBEY: I'm not talking about the first kind of review that you're talking about. I'm talking about how many performance evaluations, top to bottom, of the counterterrorism program were conducted while you were director?

FREEH: I don't know the answer to that. I'd have to get the...

OBEY: It is my understanding that there have been none. I'm not certain of that, but that's my understanding based on the limited time I've had to look at it. I would like if you would check the record, and if there were any occasions when you had a full evaluation of the counterterrorism program, I'd like to know what they were and when they took place.

What about the counterintelligence program? How many internal, full-blown evaluations of that program were conducted on your watch?

FREEH: Again, there have been inspection reports. There have been...

OBEY: Those are different things.

FREEH: They are different things. We inspect the program and the division. In terms of the evaluation, again, there's evaluations...

OBEY: To see that the rules are followed, my point is...

FREEH: A substantive evaluation.

OBEY: ... when did your people sit down and give a "no holds barred" internal evaluation of whether or not--not whether the rules are being complied with, but whether the rules made any sense, whether you organize the right way, whether you have the right targets, whether you had the right procedures.

FREEH: With respect to the counterintelligence program, this was done as recently as last year in a very extensive manner. We had a joint FBI-CIA evaluation of the entire counterintelligence program not just in the FBI, but in the community.

OBEY: Before or after the celebrated event?

FREEH: Well before. And we recommended to the president that a new counterintelligence strategy, program, protocol be adopted. With substantiative changes, the prior administration approved it and the current administration executed it; a top-to-bottom review of the evaluation of our success and failures and goals in the counterintelligence area.

OBEY: Are you saying there was one review?

FREEH: That was the most recent one. I'll check if there was any before that.

OBEY: OK. What about the organized crime and white collar crime operations?

FREEH: Again, I'll have to check and give you an accurate answer on whether an evaluation was done, when it was done and I just don't have the answer to those.

OBEY: What about external audits or evaluations? Has the inspector general of the Department of Justice sought a broader agenda in evaluating bureau activities?

FREEH: In some cases, they've done that, and with respect to the Laboratory Services Division, with respect to the Criminal Justice Information Services Division, there have been broad-scale reviews and evaluations and reports, as I have seen them. We also get them from the Congress, from the GAO here.

OBEY: Did you support the inspector general's efforts to broaden his evaluation activities beyond simple audits?

FREEH: I didn't support them. I also didn't object to them. We facilitated and helped all the requested reviews and inquiries that were made.

OBEY: Well, I have some other questions I'll provide for the record, Mr. Director. But I guess I would just say again in closing that I find it incredibly frustrating that year after year the agency which is supposed to be the quintessential example of excellence in law enforcement winds up being an example of Mr. Foul-up (ph), and I guess I feel so strongly about it because of the district I come from. I come from posse country. I come from militia country. And I've had to fight the paranoia of these people all of my life. I've seen people store up everything from bazookas to you name it because they think that their government can't be trusted, and some of them are so wacko that no matter what you did, you could never convince them that anybody's on the straight.

But when you have the kind of examples continuous, ongoing, repetitive which have plagued your agency under virtually every administration as long as I've been here, it says to me that there's a fundamental problem of management as well as a fundamental problem with the culture over there.

And as I said earlier, you've got an obligation and the president has an obligation in picking your successor to pick someone not only who has a broad degree of trust across the political spectrum, but also someone with extensive management experience who's tough enough to see to it that these rules are met to the letter or else we cannot afford--as the guardians of a democratic system of this institution--we cannot afford to continue to give your agency the kind of power that it has rightfully asked for.

So I'm sorry that you're going out on this kind of a negative note, but I think that you have been failed by the people around you in that institution.

I think that all too often in all institutions, people seek more to curry favorite with the boss or to curry acceptance from the boss than to really hit him with hard questions.

I know I want staff surrounding me that's tough enough to tell me to go to you-no-where in a hand basket on occasion, because that's what all of us need.

And the other thing that you cannot afford to have is to have yes-men on Capitol Hill. And I think, unfortunately, with this agency--I've seen members of Congress more interested in getting an autograph from past directors of the FBI than I've seen them interested in asking tough questions, and I think that culture up here has to change as well, or else we fail you when we don't ask the tough questions and when we don't subject you to the kind of rigorous examination that makes you think through ahead of time whether or not you may be doing something that doesn't make any sense.

So I wish you well in your future career.

But I just think this is a pitiful performance, which is feeding the paranoia of large sections of this country, and that's the last thing that we can afford these days.

Thank you, Mr. Chairman.

WOLF: Mr. Latham?

(UNKNOWN): Mr. Chairman, I'd like the record to show that some of us disagree that this is a pitiful performance. To the contrary.

WOLF: Without objection.

Mr. Latham?

LATHAM: Thank you very much, Mr. Chairman.

And, Director Freeh, first of all, I'd very much like to associate myself with the earlier comments about you that Mr. Rogers made. This is my fifth year being on this subcommittee and having you testify and I have tremendous admiration for your personal integrity and what you brought to the office. Also as a father, who just last Friday had his third child graduate from college, the last one...

FREEH: Congratulations.

LATHAM: I can understand your position with six boys going on in the future.

Last weekend, some of the news shows, a gentleman from the other body, who--from a state that I'm very familiar, made some comments, and Mr. Obey touched on it, about the culture of the FBI. And I also serve on Energy and Water, and one of the major problems and reasons for the problems at the Energy Department--and security has been the culture of the agency--that just security is not an issue.

Is there a, quote, "cowboy culture," and if there is or not, tell me. But also if you think there is a cultural problem, would you identify what should be done in the future to address it.

FREEH: I think we have to be extremely diligent and conscious about culture, which I do think existed at one point. Maybe when I was a young agent in 1975, where FBI agents and perhaps the institution tended to think of themselves as the best, which is not necessarily a bad thing, but if it's the best that we can never make a mistake and everybody needs us and we're the only game in town, then that's a significant culture problem. I think we were caught up in that for maybe a long period of time for all the wrong reasons. I think that's changed very substantially.

I alluded before to, you know, our training with respect to ethics and law enforcement obligations. Again, I don't march the new agents up to the Holocaust Museum because I want them to do something on Saturday. I want them to understand the potential for abuse and tyranny that any law enforcement agency, even in a democracy, is susceptible to and capable of.

I mentioned before Waco and Ruby Ridge. You know, we got it wrong in those two instances. And there's people in my agency who don't like to hear me say that.

But what we did is we used our very capable tactical abilities to the exclusion of our negotiating skills. The negotiators were second fiddle on both those occasions. The tactical people ruled the roost and made all the decisions. As a result, we lost opportunities to negotiate a settlement.

We changed that. I changed that completely, structurally, I believe attitudinally (ph), by creating a whole new structure where I put on a parity the tactical commander and the negotiator so they were equal in authority and influence in this particular situation.

That's why I think the Freemen situation turned out right. Nobody got hurt. Nobody was in a rush to do a tactical operation. We talked our way out of there. We used third-party negotiators, which we had never used before, because they weren't FBI agents. It worked. It worked better. And there's a significant sea change in the agency with respect to handling those types of things.

I'll give you another example, in terms of the culture, that I think was a dysfunctional one in the counterintelligence area. We had a dysfunctional relationship with the CIA for years and years, particularly during the Cold War, when you might think the two agencies should have been working together. It was an absolutely dysfunctional relationship.

That has changed enormously. And I don't blame the CIA for that as much as I blame the FBI for that. It has changed significantly. We are now working not only counterintelligence cases, but counterterrorism cases, joined at the hip.

I would ask you to talk to any of your peers on the Intelligence Committee or the Judiciary Committee and ask them two questions. One, have you heard of any problems, infighting and turf problems and competition, between the FBI and the CIA? You will not get, I predict, anyone saying that that's the case.

Please ask the members of the Judiciary Committee: Are there any problems between the FBI and the DEA, where there were for years? The answer to that will be no. You never hear about those problems.

We are not at loggerheads with state and local and foreign counter (ph) police agencies. We're working very closely with them. We've spared you that headache, you shouldn't have that headache.

But that is the result of a culture change of an agency that was in many cases a one-way street, from our point of view. But that's different now, and I believe that's part of the control and part of the assimilation into the larger community that we've seen, and I'm very proud of that.

LATHAM: Thank you for the answer.

On an issue that's very important to my district and my state, it was reported this week that officials in Britain suspect bio-terrorists of illegally introducing the so-called foot and mouth disease in the country's livestock population to protest the slaughter of livestock for human consumption.

Obviously, coming from a farm state, the prospect of a similar incident in the United States is very, very frightening, and also the possibility of introducing something like mad cow.

Could you provide us, I guess, with some reassurance as to your efforts to prevent similar incidents of bio-terrorism in the U.S.?

FREEH: Yes, sir.

LATHAM: There are some groups out there, I mean, farm groups, things like that, which would be, It think an asset to you, watching what's going on in that part of the country. If you could just tell me what's happening.

FREEH: We're very engaged in this area. We have in our counterterrorism division a unit that specializes in the--we call them weapons of mass destruction--ABC-type threats. But they include, of course, foot and mouth virus, anthrax. We have had some very successful cases over the last couple of years, in, for instance, interdicting a plan to use live bubonic plague against actually a police officer; people making ricin in their basement, which was going to be used in an act of terrorism.

We take from the Aum (ph) incident in Japan, the sarin gas potential attack as one that is contemplated, which is why with all the special events in the country, whether it's the Olympics next year in Salt Lake City, the presidential nominating conventions, all of the World Cup games, we plan and build into that preparation the risk that someone would use an agent of chemical, biological or other one to commit an absolutely horrific and devastating act of terrorism, either against the United States or anyplace else.

We have received the intelligence that you referred to with respect to the hoof and mouth disease. We have not made much credibility out of it or, more importantly, any logical leads that have been taken to follow up on that information, but we take it very, very seriously.

We have a specialized unit, a new unit in our laboratory, which deals with biochemical threats and has the ability to do analysis. We have a program called our InfraGuard program where we do go out to private industry, including, I think, the agricultural industry, to be aware of these kinds of threats and the potential for harm in that area. So it's a major part of our counterterrorism program and one that works, again, in very close coordination with the other federal agencies, including the consequence management agencies such as FEMA, so we have vaccines, we know where they are in the country if we were to need them.

LATHAM: To go back to a question I asked last year, and you can be very, very brief, is INTERPOL any part of this watching what's going on and following people? Just very briefly.

FREEH: Yes, sir, it absolutely is. And the new director general--I hope you have the occasion to meet him, Ron Noble, who's an American, the first time an American has run that--former prosecutor in Philadelphia, a very dear friend of mine in the FBI.

One of the interactions--I'll just mention it very briefly---you will recall several weeks we caught a fugitive named Kopp. Kopp was arrested in France. He's a Top Ten FBI fugitive wanted for the alleged murder of Dr. Slepian, who was killed in his home in New York in the presence of his four sons and wife. We found him through an INTERPOL notice and coordination mechanism with that agency, which is not an operational agency, but it's an informational agency. Kopp was arrested in France specifically because of the FBI INTERPOL coordination. So we have a good story to tell in that regard.

LATHAM: Very good.

I thank the chairman and I, for one, would like to get your autograph.

WOLF: Ms. Roybal-Allard?

ROYBAL-ALLARD: Thank you, Mr. Chairman.

Mr. Freeh, when you were asked by, I believe, Mr. Serrano, what were some of the things that you would like to be remembered for, you mentioned the fact that you were proud of the fact that you had brought the FBI to clearly understand its core values and to connect more with those core values and among what you listed was respecting people's rights, and I'd like to address my question with regards to the FBI respecting the rights of its own agents.

As you know on April 30th, a federal judge approved a settlement in the 10-year old lawsuit between the FBI and some 500 current and former African-American agents, and the agreement requirements that the FBI overhaul its promotion, evaluation and disciplinary procedures by the year 2004, and I understand that for the first time it's going to bring in an outside mediator to assess discrimination complaints.

Can you tell me what is going to be done to ensure that this doesn't happen again, because I believe this is the second time that this case has supposedly be settled?

FREEH: That's correct.

ROYBAL-ALLARD: So what is being done to ensure that the conditions of this settlement, as they're going to be mediated, will, in fact, be adhered to and what is being done--we've used the word "cultural"--what is being done to change the culture of the FBI and the attitudes of those agents in management positions; supervisors, who have the responsibility of overseeing these changes so that this doesn't occur again?

FREEH: Well, there's a number of different things being done. And they have been done for quite some time. The settlement which you correctly identify as the second settlement, we hope and believe is a final one. The importing of the outside monitor and adjudicator will we think largely restore the confidence in the changes that are being made now in the promotional process.

The key here is recruiting, retaining and promoting of minorities, and not just African-Americans. That more than anything else, in my view, and this is someone who's been associated with the agency for over 25 years, is the key to changing not just culture, but expectations as well as attracting into the agency the people that we want.

Over the last eight years, I have promoted more African-Americans in the history of the FBI. We've had them as assistant director, special agents in charge, our highest positions. That has been a transcending effect, as far as I'm concerned and as far as other people have told me. The president of the NAACP, one person in particular who told me that his understanding was that the culture of the FBI had changed significantly because of the changes that we made, including the development of the lawsuit.

Our biggest challenge today, and what I will tell my successor in this regard, is the recruitment of minority men and women particularly in the special agent position. We are not doing the job I would like the FBI to do in that regard, even though all of our recruiting resources are dedicated only to the minority communities. But we are having a tough time recruiting the minorities who will then become the supervisors and the assistant special agents in charge, the SACs that I've promoted, seven of them, I believe; assistant directors, three of them, in that regard.

So to recruit and retain these people is going to be very, very difficult.

We've also had a very, very sharp decline, I'm reminded by one of my colleagues here, in the EEO complaints over the last two years. We think that's very significant because that goes to where the rubber meets the road. That's the place in the FBI where people who are aggrieved because of discrimination or perceived discrimination go. And that's a significant decrease.

So I think we've got to do all these things at once.

ROYBAL-ALLARD: And, Mr. Freeh, when you're talking about the promotion of minorities, African-Americans, Hispanics, you're talking about qualified people who have been promoted through this?

FREEH: Absolutely. Yes.

ROYBAL-ALLARD: Thank you.

FREEH: I don't want to individualize people out, but...

ROYBAL-ALLARD: Well, sometimes there's a misconception that when you're promoting particularly minorities, that somehow standards have been lowered or you're not getting as qualified people. And I just wanted to make that point, that you're talking about qualified people that are being promoted who happen to be minority.

FREEH: Absolutely qualified. Yes, ma'am.

ROYBAL-ALLARD: My congressional district includes the Los Angeles jewelry mart. And last year, I brought it to the attention of the FBI that there was a great number of robberies of traveling salespeople in the jewelry industry. And I'm very, very pleased that looking at the latest statistics and talking to the jewelers in my district, that the FBI in conjunction with--working with the INS and the local law enforcement, have really done an incredible job in reducing the percentage of crime in that area.

For example, nationwide, the number of these robberies was cut in half in 2000, compared to 1999, and was cut in half again between the first quarter of this year and last year. And closer to home, the number of robberies was reduced by 70 percent from 1999 to 2000, and again in this quarter of this year, there was only one jewelry vendor robbery in California.

And so on behalf of the jewelers in my district and those that I have talked to in the industry, they wanted me to thank you and to commend you for the work that you have done in that area. Unfortunately, these gangs are very much still alive and very active.

And they have begun to target their victims more selectively and with greater violence. Will the FBI continue to devote necessary resources to this area of crime?

FREEH: Yes, ma'am. The task force that you refer to in Los Angeles is part of what we call our JAG program, jewelry and gems, which is a significant property enforcement and protection program. We have worked very closely with the jewelers association, not just in Los Angeles, but in other major cities. And the Criminal Division in our program, not only in LA, but a couple of other divisions is now keyed to this particular traffic area. And we've noted also the reduction, but certainly not the elimination. And these are very prolific gangs and very mobile gangs. We've seen some of the same ones in Los Angeles as we see in the diamond district in New York City. So we will continue to keep resources in the area.

WOLF: Would the gentlelady yield? There is a vote on. I'm going to run and go vote and come back. Mr. Rogers can chair and we can continue, but I'll be right back.

You go ahead.

ROYBAL-ALLARD: Thank you.

It's also been brought to my attention that the FBI is considering scaling back both on the number and the scope of its Safe Streets task forces. As you know, these task forces are nationwide and they brought together FBI agents and officers, local police, sheriff departments, to focus on more violent crime and fugitive apprehension. And when I have spoken to law enforcement, not just the FBI but really the local police in my area, they have had absolutely high praise for these task forces, and have attributed the decline in violent crime to them.

There is a great deal of concern that perhaps the forces and the relationships that they currently have with local governments may be jeopardized because there is at least rumored talk that the task forces may be scaled back. Can you address that?

FREEH: I can. Thank you very much for the question. This has been an enormously successful program. I think we have 135 Safe Street task forces and these are just violent crime program task forces around the country. And whether they're in San Juan or New Haven or Los Angeles, they have worked very well for two reasons. One, it gets us beyond what I alluded to before, which is all these different agencies working perhaps not cooperatively together. It forces and harnesses the efficiency and the combined skills of a lot of different agencies. So we are committed to that program. It is one of the mainstays of our violent crime major offender programs.

We do run into funding issues. For instance, we pay the overtime of the state and local police department officers that are there. We've successfully, in the past, thanks to the chairman's support and support in the committee, maintained that. But it is an area of course of great expense. And as we have a flat budget and as we make adjustments to our programs, it's certainly something that we have to consider. We don't have any plans to close or scale down any of these task forces. But I think, you know again, for my successor to look at, it's a very important part, as far as I'm concerned, of what the FBI's role is in the United States and in a particular community.

On the other hand, you know, violent crime statistics have gone down significantly over the last eight years, not because of what we've done only, but because of a whole set of circumstances. There are no other agencies working counterterrorism or counterintelligence or computer crimes or things like that. So I think my successor is going to have to make some choices. I think the Congress is going to have to make some choices as to whether we want to stay as entirely in these traditional areas as we are at the expense of some of the new areas or not, or consider different and new resources. So it is going to be an area of tension, but it has been an enormously successful program.

ROYBAL-ALLARD: But my understanding is that if the program is scaled back, it's really going to be some of the small towns and rural areas that have very small police forces that are really going to be negatively impacted by the loss of these programs.

FREEH: Well, we'll certainly consider that. That's probably the area you wouldn't want to cut. I mean, you'd want to look at a larger, more versatile...

ROYBAL-ALLARD: Well, I tell you, Los Angeles, they speak very, very highly of this program and really attribute much of what's been accomplished in the area of violent crime to that working relationship. I was told there was a time when the agencies never even talked to each other, didn't know each other, and there was a lot of overlap or conflict, so I hope that we'll be able to save that.

WOLF: We have two other members who would like to ask a few questions, perhaps before we have to leave for the vote.

ROYBAL-ALLARD: I just have one more, Mr. Chairman, and I'll submit it for the record.

WOLF: Mr. Taylor?

TAYLOR: Mr. Chairman, thank you.

Director Freeh, thank you.

I have three boys in college right now, and I can tell you as a member of the West Point Board of Visitors, may I recommend our country's military academies to you?

(LAUGHTER)

I want to commend you for the work, your 27 years of service and your years as director of FBI. And you focused on the core values, and you mentioned honesty and truth, and I appreciate that.

I appreciate, of course--it was particularly hard in past years to focus in that area. You did comment on the fact that, in past years, the FBI might have felt that they were the most important or, maybe, closed to perfect, that sort of thing.

Would you say, perhaps, that Congress has been a conspirator, also, in that feeling in the fact that we have enacted a variety of statutes that were commonly state violations, that were not involved with interstate commerce, and we've loaded you down with a lot of extra laws and put on your plate things like carjacking and other things that could be handled by local law enforcement agents?

And would that, given the size of your agency, would it be advisable for us to review, as Congress, a number of those laws and see if we couldn't put those back in the former--last 200 years--state areas?

FREEH: I think that's an excellent suggestion. And maybe, speaking more as an outgoing government employee than an incoming one, I think that has been--I wouldn't call it a conspiracy or a failure by the Congress. I mean, in many ways it's a compliment that we need somebody to enforce child support orders--there are a lot of deadbeat dads who are not paying their bills--let's give this to the FBI because they can do a job in that area. And we can.

We will do it, however, at the expense of some other things, and if there are no resources coming with the responsibility, as there was not and as there usually is not, something has to be re-allocated in terms of resources.

Major changes or contemplated changes in the civil rights acts, which I would fully support, certainly, as a citizen and as a member of the community, as a father, as a husband, but to criminalize a whole new genre of conduct on the federal level but not give any new federal resources to enforce it will be a problem.

I have less FBI agents than there are Chicago police department officers, and we need to cover the United States, 45 countries. If, God forbid, a major act of terrorism occurs this afternoon, I've got to send 300 or 400 of my best young men and women to go there.

So I think we have to make those kinds of choices and allocations. We can do and will do what you tell us to do. If you want me to open and run the National Domestic Preparedness Office, which means the FBI gets the responsibility to train and equip fire departments and police departments for WMD incidents, I can do that. I can't do it on $1 million, by the way. But that's going to take a lot of resources from other things, and we've got to make those choices.

TAYLOR: And computer crime, of course, is one of the things that you need resources badly on, because I'm sure your competition, getting agents to work in that area, is very difficult, and yet it's one of the fastest growing and probably most important areas to focus on.

I would mention the Carnivore program. That has raised more concern in my district than probably any other area. And while you have certainly pointed out quite correctly, that the program only comes with the court order, I think if the agency could present that more adequately to the public and define it more adequately would be good.

The other thing I would ask, as a last question. Mr. Eric Rudolph, and the search was in my district, how many agents do we have there, and is that wrapping up pretty much?

FREEH: Yes, sir, within your district, it has wrapped up. At the time, of course, we had many, many people assigned there and otherwise. We have scaled back substantially. I don't think we even have a facility in western North Carolina. We still have the fugitive case, and we're still going to work it as hard as we can.

TAYLOR: Thank you again for your work.

Thank you, Mr. Chairman.

FREEH: Thank you, Mr. Taylor.

ROGERS: We have at least one member who would like to ask questions. We have a vote that's imminently on the floor. We'll have to recess a few minutes, so that we can vote.

And when Chairman Wolf returns, he can resume the hearing.

So we will be in recess briefly.

(RECESS)

WOLF: The meeting will come to order.

We're going to begin with the members as they come back, but let me take advantage of this time. In sitting and listening, I made a couple of notes. One, the new director--and just to take it back to Mr. Ashcroft and the president--ought to be somebody who's honest, ethical, decent, moral, has total and complete independence, is not involved in the political process, has very good management skills and I believe should be somebody from outside the department. I think almost the way that former President Bush went out to the CIA, somebody to bring a fresh, new approach. And I'm going to watch it very carefully, I'm not the confirmation process, but I'm going to dig in and just participate.

Secondly, on the 10 that did comply, if you can just submit what the names of those offices are.

FREEH: Yes.

WOLF: And I think they ought to be asked, why did they comply?

FREEH: No, that's a good question.

WOLF: And how did they view the 16 communications? I think you look at the good, why it took place as well as the ones that didn't.

Thirdly, I believe very deeply--you can comment on any of these--we really need--and I'm going to bear in on this next issue--with respect to an outside group looking at this, I looked at the list of the people that Judge Webster, again, said they're all going to be involved; Clifford Alexander, a Washington guy; Griffen Bell was a U.S. judge, knows them very well; Secretary Cohen, served in the Congress with the Department of Defense; Robert Fiske, former special counsel; Tom Foley, former speaker of the House; Carla Hills, former Cabinet. All good people. If I had a problem, I'd love to go to them, but I think they're not the ones that have to be the final evaluation as to whether or not this thing is appropriate.

I have feelings of passion on this issue, that you understand that I'm not getting into on the record, although we did send a letter over yesterday asking for you to look at some things, but this is not enough. These are good people. I think it would be helpful to have their views, but we also need to use somebody who's outside. You know, team C then if we're talking about it or team D or G, but that looks at it.

FREEH: I understand, Mr. Chairman. I'll take that up with the attorney general and we'll pursue it.

WOLF: Also, I think it would be helpful too to have an IG. I asked the staff to contact some former IGs that are outside and are in, but I think an IG may very well have been a good protection because it would have been somebody who is--because you are busy. Last night when I read your testimony, the American people don't understand the mission that the Congress has given your bureau. I mean, you are doing a lot of very important things. Unbelievable. Life and death. It isn't just whether the price of milk is going to be one thing or ten cents higher or ten cents lower. These are life or death; the World Trade Center, the bombing with regard to the two embassies, the USS Cole, Osama bin Laden. These are critical issues and your people have been given some very, very tough assignments, so I just think an outside person like an IG, who could bounce it back and be very tough and aggressive and fair would be very, very good.

Let me cover a couple of other issues before they come back. The FBI hired more people than it could afford and the over-hiring resulted in the shortfall of more than 65 million. The FBI has been the beneficiary of generous increases, as you know, during the tenure. The shortfall causes some concern, particularly given that there's been some talking points circulated that the Congress' budget is not adequate to meet the employees on board. Is there an explanation for this or do you understand what I'm talking about?

FREEH: I do, sir, and I think what we have done and we propose to do to resolve the problem so there won't be any more reprogrammings. There's not going to be this year, as you know, and there was one in the prior year, is to reduce the number of authorized positions and work years by 772. This will be in alignment and comportment with the available funding.

We had a over-hire, I regret, and I'm responsible for it, in fiscal year '99 and that required part of the $64 million reprogramming for last year. Forty-two million was permanently reprogrammed so with the reduction of 772 positions, we will not only not need a program, but we've solved this particular problem by hiring--I should say by not hiring--and that problem is now solved for next year, we hope, with maybe a small overage, which I think is being very tightly monitored.

We're watching the payroll and positions on a two-week basis. We realize now we spend $1.1 million per hour on salaries, and we're focused on this like a laser.

WOLF: OK, I'm going to recognize Mr. Kennedy now. We'll have some other questions.

Mr. Kennedy?

KENNEDY: Thank you, Mr. Chairman.

Thank you, Mr. Director.

When I first ran for office, I was in favor of the death penalty, but I, in good conscience, watching what's happened the last several years, cannot know how any thoughtful person could be in favor of the death penalty.

Just in the last year, we've seen the Illinois cases where the governor of Illinois, Mr. Ryan, had to put a moratorium on the death penalty in Illinois because of the numerous cases that were uncovered just simply by law students doing a special project, many of whom had later been found to be innocent.

We had a front-page story last week in the New York Times about Jeffrey Todd Pierce, one of eight cases reviewed, where even with the DNA evidence and the DNA was supposed to be the salvation of the proponents of the death penalty because it was supposed to now show conclusively that this was the person who committed the crime. Even in this case now, we now have been shown that DNA isn't the answer or the definitive difference in whether someone was the actual perpetrator of a crime or not.

And I understand the governor of Oklahoma is now reviewing 3,000 cases which were conducted by this DNA person working in the crime lab who messed it all up, and where people's lives have been affected in untold ways and numbers of years they've had to serve in jail, but to really emphasize the point, 11 of whom have been executed already. And I can't wait for this country to find out that one of those 11 was an innocent person and see what this country's going to do about it then.

In light of all of that, in light of your own Department of Justice study showing the disparity in the death penalty, with minority groups and African-Americans--if you're poor and African-American, you have a greater correlation of getting the death penalty than you have of getting cancer if you're smoking. Now this has got to be a moral outrage. I can't for the life of me understand why people can sit idly by and see these statistics and not say, "This is bunk."

And then to boot, we have an FBI study that does $60 million-plus dollars, the most visible case in the history of the FBI, and they screw it up. Now, if we can't even get Timothy McVeigh right, how are we supposed to get the millions of others who are going through our justice system with little or no spotlight on their cases? How are we supposed to get that right?

I want to ask you, Mr. Director, how in good conscience can you support the death penalty? And what are your answers to this immense amount of evidence that shows that the death penalty cannot be applied fairly, even if you had accurate evidence? And now, in the face of Mr. Pierce (ph), where we're shown that you can't even have accurate evidence in the first place, how can we even permit a death penalty in those circumstances, the ultimate punishment, when we can't even guarantee that a person is truly guilty of the crimes that they have been convicted of?

FREEH: I'm sorry, what's your question?

KENNEDY: My question is, are you in favor of the death penalty? And what is your answer to my outrage and I think a lot of other people's outrage that Pierce (ph) was--his DNA evidence was messed up...

FREEH: Was that an FBI case?

KENNEDY: I'm asking you about your--you're someone who's in the Department of Justice. You work in the FBI. You're a law enforcement officer. I'm asking you, in light of all--I'll just ask you in terms of Timothy McVeigh, if that makes you happy...

FREEH: It doesn't make me happy, I'm just trying to get your question.

KENNEDY: Well, my question is simple. If you can't understand where I'm coming from, I dare say anyone in this room--I'm saying that the evidence shows that we can't even get it right with evidence with respect to DNA, we can't get it right with your own Department of Justice study showing that minorities and poor people are umpteen times more likely to get the death penalty than anyone else.

And how can we support equal justice under the law, which you're sworn to uphold, and in light of those statistics, which your own Department of Justice came forward with? And so, that's what I'm asking you. If you have any trouble understanding it, I'm asking you, what is your reaction to that ample evidence?

FREEH: Let me try to break it down.

KENNEDY: Please.

FREEH: I don't believe the Pierce (ph) case was an FBI case.

KENNEDY: I'm not asking if it's a...

(CROSSTALK)

KENNEDY: Just give me an answer on the death penalty. Do you support the death penalty?

FREEH: Well, I don't think that's relevant to my presence here today.

KENNEDY: OK.

FREEH: With respect to the McVeigh case, because that's the one you call a screw-up and that's the one you want to speak about, I'm happy to respond to you.

KENNEDY: But I want to ask...

FREEH: There is no danger--let me just say this--there is no danger that an innocent Timothy McVeigh is going to be...

KENNEDY: I'm not asking about Timothy McVeigh.

FREEH: ... punished.

KENNEDY: I'm talking about the process, sir. I'm not talking about one person. I'm talking about the likelihood that with the death penalty, and we as federal lawmakers are the first ones to stand as federal officeholders in over 40 years since the last death penalty case, and we have an obligation as federal officeholders to ensure that that death penalty is equally distributed based upon equal justice under law. We know the evidence is to the contrary. Your own Justice Department proved it.

Now, I'm asking you, in light of the fact that you can miss all these files that were in the most celebrated case of the century, we can't even get it right with that. How are we supposed to believe that we can get it right with the death penalty?

FREEH: Let me say this, then. I disagree. I think we have gotten it right. I think that...

(CROSSTALK)

KENNEDY: So to the 11 people that are still...

FREEH: No, if you let me finish my...

KENNEDY: ... executed.

FREEH: Do you want me to finish my answer or you want to ask another question?

KENNEDY: I'd like you to finish your answer.

FREEH: OK. With respect to the case that you've asked me about, which is the McVeigh case, we did get it right. We got it right specifically because in an abundance of caution, doing a review that we were not required to do by the law, FBI personnel discovered on their own initiative that some records--leave aside the fact whether they're relevant or not, I don't believe they were--but leave aside that fact. They then came forward to stop the execution at the 11th hour to the great embarrassment of the FBI. I may share in that with a lot of you here.

But that's getting it right. We stopped an execution because in America, where thank God we all are--and I think Mr. McVeigh is pleased that he's in America--the process worked by correcting a flaw and a mistake that I don't think went to guilt or innocence, but it is so significant and severe because of our obligations that it was corrected.

Twenty-five percent of the cases that come into our DNA unit in the laboratory, Mr. Kennedy, are exonerated-result examinations. We send back, in 25 percent of the DNA cases submitted, the finding that the subject that they submitted is not the person and they should be exonerated. We have gotten people out of jail on those examinations. We have an obligation to protect the innocent, which we take very, very seriously, and which is exemplified in this particular case.

KENNEDY: All I would say is, if it is evident that human error is going to be existent all the time, how can you ever think of having a ultimate punishment that executes someone, when in these instances it's taken the absolute face off of the death penalty proponents and their idea that you can get it right.

You have college students proving in Illinois that all these people got it wrong. You have Kenny Waters in my state convicted 18 years until his sister went to law school, completed and was able to get him out of jail. He was wrongfully convicted.

You can only imagine the number of minorities and people who are underrepresented who have no spotlight, who aren't as celebrated as Timothy McVeigh, and are we supposed to believe that the next death penalty cases after Timothy McVeigh, especially if our president does the kind of death row that he had when he was governor of Texas, we are supposed to expect that the nation's attention is going to be as much on those cases as it was on Timothy McVeigh and that there will be that much review in those instances as it was with Timothy McVeigh?

I don't think so. And barring all that, I'll take all that aside. What is your answer to the fact that the death penalty is not applied equitably around the country and the fact that minorities and poor people have a greater likelihood of being put to death than they have of getting cancer from smoking?

FREEH: Well, I rely on the United States District judges, on the Supreme Court of the United States to correct mistakes or flaws in the judicial process that would lead to the most horrific result anybody here could contemplate--someone innocent being ultimately and capitally punished for a crime they didn't commit.

But we have a system of laws in place for that. We have a penalty which this Congress has approved, and we have courts and prosecutors and hopefully law students, like the ones that you mentioned, who on their own can do enormously great things in terms of proving the innocence of a person who may be overlooked by the system because maybe they're not wealthy and maybe they don't have a lawyer.

But all that is one entire process that moves forward, I think, very, very well under a system of law. And that's what we have.

KENNEDY: All right, well let me ask you about another area, because I think the idea that you have equal justice under the law with the death row, when our own Justice Department said that it's not the case. And the Attorney General Janet Reno came out with a report that was indisputable in the fact that it showed that there is no equal application of the death penalty in this country. And that should concern anyone of conscience in this country.

Let me ask you about getting it right. Do you believe that FBI agents should be subject to polygraph tests?

FREEH: Yes, sir, they all are.

KENNEDY: Who is subject to the polygraph, all of them?

FREEH: Every new employee in the FBI since 1994.

KENNEDY: Have you been polygraphed since you've been FBI director?

FREEH: No.

KENNEDY: Do you plan to submit to a polygraph test before you resign?

FREEH: One is scheduled.

KENNEDY: Thank you.

I yield back the balance of my time.

WOLF: Mr. Miller?

MILLER: Mr. Director, thank you for your service to the country and I wish you well in your future. Thank you very much.

FREEH: Thank you, sir.

MILLER: A couple of different questions. One is, I serve on the Government Reform Committee, and two weeks ago, we had a hearing about the FBI's involvement in the Joe Salvati case. Are you familiar with that one?

FREEH: Yes, sir.

MILLER: Mr. Salvati was framed for murder and spent 30 years in prison for a crime he did not commit. And apparently the FBI had information which may have helped prove Mr. Salvati's innocence. Is there anything you can say on that case and on behalf of the FBI and the Salvati family?

FREEH: Well, you know, I alluded to that before and obviously a great travesty, a great failure; disgraceful to the extent that my agency or any other law enforcement agency contributed to that. The one thing that I would say with respect to that matter is that that particular case and all the related cases in Massachusetts depicting that tragic period of events and the people involved, all that was investigated and uncovered by FBI agents working investigatively to develop evidence which has lead to charges of former colleagues. Maybe not their colleagues, but people who were on board.

The facts of that case have not been particularly sorted out as far as I can see. It's the subject of continuing investigation and litigation. What I would say certainly to the family and any victim in such a situation is there is nothing worse that can happen under a system of law that an innocent person is either charged or in this case punished for that period of time. It's a travesty, it's a disgrace, it shouldn't happen. I don't believe it happens frequently under our system, but it does. And when it does, it is of the gravest concern.

MILLER: There is a picture of him in the Time magazine article. Is there someone in the FBI who should have been more proactive in trying to help him through the process or can you comment on that? He spent 30 years in prison.

FREEH: Well again, we came into the situation, unfortunately, too late, but we did develop--as I understand it, we developed all the evidence which has gone now to his exoneration, with a lot of other people in the U.S. attorney's office, but we're the ones who picked those pieces back up. It should have never gotten to that point.

There's a story about your travels in the news the other day, about how you've had to expand the international presence of the FBI throughout the world. I'd like you to comment on that.

And when you look at the total FTEs and things, it's not changing very much, but then you're having to expand around the world. I don't know how many total people, I've met a few that I've had in my travels. Explain a little bit more about why we're expanding so much and how much resources are going there, because if you're expanding, you're going to have to cut somewhere else almost it looks like and such.

FREEH: Yes, certainly. We have 186 people overseas, 112 of them, I believe, are special agents, so it's not a great deal of resources. We're in 44 different offices and I consider that a modest investment of our resources given the return. I mentioned the case earlier that came out of Kenya. Some of the subjects in the case being adjudicated in New York were found outside the United States. The first FBI agents on the scene in Kenya and Tunisia were my FBI LEGATs, your FBI legates from Cairo and Pretoria, which were offices that didn't exist five years ago. They got to the crime scenes immediately, were able to secure the evidence, start protocols that led to the preservation of evidence.

We have American hostages taken in Ecuador. We negotiated for their release. We've also been able to follow up with an indictment of the people involved in that recent hostage-taking. Mr. Kopp, again, found in France. I could give you hundreds and hundreds of examples of our success in protecting Americans and things that are important for this country by having this very modest presence overseas. And my advice to my predecessor (sic) and my advice certainly to the attorney general, the president, has been we've got to expand FBI operations overseas because the world is now a different place.

Crime is transnational, whether it's bank fraud or terrorism or organized crime, globalization of everything requires us to be there if we're going to do our job. So my evaluation would be we have too few resources overseas at this point, but we have significantly entered the international arena in a way that protects Americans.

MILLER: Is there any problems with working with other countries as far as having the presence of the FBI within these countries, whether it's Ecuador or France or wherever?

FREEH: That's an excellent question.

You know, everywhere we go outside the United States it's by invitation. I met with President Mandela a couple of weeks ago in South Africa. He had asked us, and the current president had asked us, to train a group of South African police officers who they intended to organize as a bureau of investigation, modeling it, in fact, after the FBI. We trained two large groups of their officers at our training academy in Quantico, funded by the State Department. We are welcomed with opened arms in that country because of the value we give to not only individual cases, but also the ability to train their police.

When I was in Ghana, the president of Ghana, President Kufuor, was asking about a serial killer, Mr. Chairman, in Accra, responsible for killing they believe about 36 women--very, very poor women. In response to his request, I sent a team of our investigators over there. They solved the case as far as we're concerned. Those are the kinds of invitations and successes that we have overseas.

Next week I'm going to preside over a conference in Eastern Europe on the trafficking of women and children. We've organized 11 countries in that area, which is the key area not only for the support of that trafficking, but what comes to the United States in terms of victimization and crime and exploitation. We're going to have a conference on this issue and then we're going to organize a law enforcement response and operational capability in the area.

So my answer is we're very, very welcome overseas. We can't do anything overseas except by the invitation and authority of our host countries.

MILLER: Thank you.

My sense is that we need to keep increasing this area, because whether it's terrorism in our own country or, you know, the global nature of our economy.

So I hope your successor does, and this committee will support that type of increase.

We have time for one more question. One issue--and we've talked before about it and I've gotten involved--is extradition. And I think you brought it up briefly before. I talked to you one time a couple of years ago about a case that took place in Sarasota--a horrible murder and great law enforcement work, and the man was located in Mexico. But it took them too long to get him back.

And because I got so involved in that one, I've gotten involved in some others. I've been working with the Maddux family about trying to get Ira Einhorn back. And I know this is not exactly your area, and I have brought it up with Secretary Powell and Attorney General Ashcroft.

But what can we do to help improve--make it easier to extradite people? Because it has to be frustrating for you and your colleagues in law enforcement to know you've got someone sitting over there and you can't bring the person to stand trial. I mean, do you have any suggestions about what we should...

FREEH: I do. And actually, it's the suggestion you just made. It's expanding our ability to interact on a cooperative basis with our foreign counterparts. East Africa is a particular example. We were able to get subjects rendered quickly and lawfully back to the United States because of the law enforcement relationship that we had in that country.

We can bring tremendous value to the rule of law and the new democracies, particularly that are trying to deal with these overwhelming problems of crime. And I've made this suggestion to Secretary Powell and others, and I think they're going to go very, very far with it.

The basic need of most countries in the law enforcement area are rule of law, expertise, investigative ability support. If we can extend that to these countries, the extraditions, at least the ones that are not barred by constitutional prohibition. In some countries there is a bar that we can't overcome unilaterally. But in most cases, we can access the legal process in a much more beneficial way by having a trusted relationship with the law enforcement counterpart, the minister of justice and interior, the executive leadership of the country. And that's one way to facilitate not just the extradition, but the arrest.

To arrest a guy like Kopp in France, to arrest Ramzi Youssef, to arrest hundreds and hundreds of fugitives who we've brought back to the United States, we can't do that but for the help and support of those counterpart agencies. And that's why that's key, Mr. Chairman, in the years to come in developing those relationships. And what we can give them is what they need--training, rule of law support, forensic ability. And we'll get great value in return for that.

MILLER: Kopp--that's the that's in France. Is that what you're talking about?

FREEH: Yes.

MILLER: Yes. Well, I hope they don't keep him as long as Ira Einhorn's living in freedom over there without even being arrested as such. That's a real political mess. And it's a country we have good relations with.

Well, good luck to you in the future. Thank you. Thanks for your service.

FREEH: Thank you, sir.

WOLF: Thank you, Mr. Miller.

Mr. Taylor?

TAYLOR: I don't have other questions, but I would commend the director for his visits, or his agents' visits to the Holocaust Museum. We sometimes forget that the Bill of Rights weren't written to protect us from foreign governments, it was written to protect us from our own government and the abuses of those government agencies. And I think that's something that you've pointed out with your actions. And I hope we do that throughout government in the future.

Thank you, again, for your service.

FREEH: Thank you, Mr. Taylor. I appreciate it.

WOLF: Thank you.

I have some other questions and then I'll recognize Mr. Serrano, and we'll try to wrap up as quickly as we possibly can. We have another hearing with the State Department that begins at actually 2:00.

Are you going to be asking for a supplemental? McVeigh, Hanssen, anything else? Any reason for a supplemental?

FREEH: I think in the counterintelligence area, we have brought up with both intelligence committees enhancements we'd like to address in the securities program area, both positions as well as funding, but we have not formally gone through that process.

The other area, Mr. Chairman, quite frankly is in the information assurance area. Trilogy is going to work and it's not going to be the best IT system in the world. It's going to be a good one, it's going to work well. It's going to adapt and we're going to build upon it.

But the system as it currently exists doesn't have the information assurance protections in it that we would like to obviously incorporate given the experience in the Hanssen case and other matters. So that's another matter--I would say those two areas. In the counterterrorism area, I don't know that we would ask for a supplemental. Our great concern is again, God forbid the next USS Cole and having to you know mount the kinds of resources that are necessary there. But I don't really have a position on that today.

WOLF: So that decision will be made by Attorney General Ashcroft?

FREEH: By the attorney general, yes, sir.

WOLF: Would you want to comment--the FBI (inaudible) lab. When do you expect it to be open?

FREEH: We expect the construction to be completed toward the beginning of next year and occupancy by next summer, not under budget, but not over budget. And I run around the place every other week and it's coming along very well.

WOLF: Child pornography, can you talk a little bit about it, what you're doing regarding the Internet and have there been as many prosecutions coming in the last eight years as there should have been?

FREEH: We have done a very, very robust enforcement job, particularly in respect to the child pornography. Innocent Images is the case that I would refer you to. We had 1,000 convictions in the last couple of years. And these are the most egregious offenders. We call them the travelers, the people who meet and introduce themselves to children and then attempt to meet them in places for sexual exploitation. We've had 1,000 of those convictions. We've got about 30 agents who work on this full time. We've got operations in, I think, about a dozen or more offices around the country. We could do more.

WOLF: Has this been a priority with the U.S. Attorneys?

FREEH: Yes, it has been a priority with the U.S. Attorneys. What we find quite sadly is that we don't seem to be having a deterrent effect in this area. In other words, we go into these undercover operations and it's well-known that we operate in this area. We don't seem to be having any deterrent effect.

WOLF: Is there anything else we should be doing?

FREEH: Well, I think, you know, on the law enforcement side, we certainly could probably do a better liaison job with some of the owners of this media, ISPs. We work very well with them right now. There's probably a whole bunch of little ISPs that we don't work well.

WOLF: Have you had a conference with them and asked them all to come in and sit down with you?

FREEH: I'm not sure that we've done that. That's a good suggestion. We work with the main ones very well. It's the proliferation and great numbers of others that we could really use some assistance. So let me look into that.

WOLF: Well, that might be a good idea.

Can you talk a little bit about--I have been personally very much concerned with the spread of gambling in the country. It's running rampant. My sense is there haven't been many prosecutions. Could you talk a little bit about anything with regard to Indian gambling, non-Indians taking over it, anything about Internet gambling? Do you have any comments about this?

FREEH: We have actually followed up from your conversation speaking both to the FBI investigators and Department of Justice lawyers. We have looked at the materials that we were given and have actually decided that some of those leads and some of those areas can be and will be pursued. The Internet gambling is a very, very difficult proposition for us. There's a lot of uncertainty in the community about what the ambits of the jurisdiction would be, the venues where these would be prosecuted. I think we need within the Department of Justice some stronger guidelines.

WOLF: But the Wire Act (ph), shouldn't they take a look at this. It seems to me the last administration just never really looked at this. I mean...

FREEH: It should be looked at.

WOLF: Yes, it should be looked at. I raised it with Attorney General Ashcroft, but if you could make sure that they look at it, there's always the excuse that we don't have enough law and everything. But I think there is law there. If you could look at it, I would appreciate it.

FREEH: I'll do that.

WOLF: The other issue, do you have any comments with regard to NCAA gambling? There have been a number of coaches that have approached the Congress. Joe Paterno, Coach Bowden, Bobby--I mean, you just met--all the coaches, frankly.

I don't think there's a coach that has not come out in support of closing down a loophole currently in Las Vegas, where it's the only state you can gamble on NCAA sports. Any comments you have about NCAA gambling and gambling? Because if we begin to corrupt the process on Saturday afternoon...

FREEH: I would fully support and endorse their position. I mean, I think from an enforcement point of view, it's an area that should be contained. It would be very difficult for us to be pursuing cases in that realm.

WOLF: So it would be a good idea to shut down the Nevada gambling, because that's the only state. It's against the law now in 49 states to gamble on NCAA sports and college sports and high school sports and Olympic sports. NCAA gambling...

(CROSSTALK)

FREEH: That would be my view, sir. But again, I don't speak for the department at this point, certainly.

WOLF: I understand, but it would be good to close that down.

The sexual trafficking, can you tell us what countries are--I heard, really in the report that came out a couple of weeks ago, there are 50,000 who come to the United States. They take their passports away. They're basically slaves, if you will. Can you tell me what countries mainly, Albania, Ukraine?

FREEH: Moldova, the Ukraine, Russia--Eastern Europe has been a primary source of the trafficking, particularly now as it's affecting now just Europe, but the United States. A good portion of the organized prostitution in New York City is organized by Russian gangs, a scenario that we are very engaged in. There are Asian trafficking organizations in this regard and also African ones.

The purpose of this conference next week, which is going to be in Bucharest...

WOLF: Can you tell me the countries that are going to be there?

FREEH: There will be 11 countries. They are part of the SECI organization.

WOLF: Albania going to be there?

FREEH: Albania will be there. Italy will be there. Hungary.

WOLF: Any countries that are not going to be there that should be there?

FREEH: I don't know. Let me get the exact roster for you.

But the purpose is to not just discuss the problem--everybody knows it's a problem--it's to organize a regional law enforcement capacity, which we don't have. The only regional law enforcement structure there is SECI, the Southeastern Europe Cooperative, which I think you're familiar with. It's gone mostly to borders and customs. We want to change it into the trafficking area, and we think this is a good vehicle to get some prosecutions going.

WOLF: I would urge you to prosecute. If 50,000 women are exploited per year in coming into this country, not counting Italy and not counting any of the other countries, that is a crime against humanity. And so, I would urge--there's been a lot of talk that the Congress is acting, has passed the legislation. But I would urge that prosecutions begin, because these women are victims. And when you read the case studies and stories--also there has to be something put together to take care of them as they come to this country, because many don't speak the language.

FREEH: You can be assured of that, Mr. Chairman--I just may add on here. You will see, not only as a result of this conference, but we have been discussing this for some time, a major initiative in the bureau directed at this, because it's not only an international problem, it's as you point out, directly affecting us here.

WOLF: And in cooperation with the State Department.

FREEH: State Department and foreign law enforcement agencies, which is, again, why our LEGATs are so important.

WOLF: I'm going to finish up in a minute, and recognize Mr. Serrano to close, to have any comment.

But a little bit about encryption.

FREEH: Yes, sir. You know, I leave with unfinished business, at least in terms of my objectives there. I'm sorry to say that the technical support center, which the Congress authorized in 1995 has never been funded. That would be the civilian transparent law enforcement center of expertise where we could start solving some of these encryption problems. We have not begun to address the problems in that area.