TOP OF DOC
TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT APPROPRIATIONS FOR
1998
WEDNESDAY, FEBRUARY 26, 1997.
U.S. SECRET SERVICE
WITNESSES
RAYMOND W. KELLY, UNDER SECRETARY (ENFORCEMENT), U.S. DEPARTMENT OF
TREASURY
ELJAY B. BOWRON, DIRECTOR, U.S. SECRET SERVICE
RICHARD J. GRIFFIN, DEPUTY DIRECTOR
W. RALPH BASHAM, ASSISTANT DIRECTOR FOR ADMINISTRATION
RICHARD S. MILLER, ASSISTANT DIRECTOR FOR PROTECTIVE OPERATIONS
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STEPHEN M. SERGEK, ASSISTANT DIRECTOR FOR PROTECTIVE RESEARCH
BRUCE J. BOWEN, DEPUTY ASSISTANT DIRECTOR FOR INVESTIGATIONS
K. DAVID HOLMES, ASSISTANT DIRECTOR FOR INSPECTION
LEWIS C. MERLETTI, ASSISTANT DIRECTOR OF TRAINING
TERRY SAMWAY, ASSISTANT DIRECTOR FOR GOVERNMENT LIAISON AND PUBLIC
AFFAIRS
JOHN KELLEHER, CHIEF LEGAL COUNSEL
Opening Comments from Chairman Kolbe
Mr. KOLBE. The Subcommittee on Treasury,
Postal Service and General Government will come to order.
This afternoon we are pleased once again to
welcome Under Secretary Kelly and Director Bowron to our hearing today
covering the Secret Service. Today's hearing is going to focus on financial
crimes and the role that the Secret Service plays in protecting our
nation's financial system and the economy as a whole.
Most people are aware of the mission of the Secret
Service to protect the President and other dignitaries; and, for many
people, that is what they think of when they think of the Secret Service.
Tomorrow, the subcommittee will be meeting in a closed session with the
Under Secretary and the Director to learn more about this protective
mission, and I look forward to that, but today we are going to be focusing
on another area. That is financial crimes.
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As I read through the written testimony from our
witness, I was struck by the fact that there are not a lot of clear
boundaries when it comes to financial crimes. These crimes are often
complex and very much interrelated.
For instance, it seems to me that computers are
being used in almost all the financial crimes that the Director discusses
in his testimony—used to create false identification cards, to
counterfeit currency, credit cards, securities, commercial paper,
government checks. They are used to move and launder money, both
domestically and across international boundaries. They are used by hackers
to access computer databases, and retrieve personal information without
detection. I am pleased that the Secret Service has taken a very proactive
stance in this growing area of criminal activity. I think that their
proactive and aggressive stance is one that is very much required.
But I guess the question I would ask is this: are
we being aggressive enough? Are we doing enough to stay ahead of these
technocrooks? Just as importantly, how do we measure our success as to
whether they are staying ahead or falling behind?
My other concern is that technology moves
sometimes so quickly, too quickly perhaps. As we look to embrace electronic
payment and cash systems, I think we have to consider whether or not they
are ensuring that these systems are not increasing our vulnerability to
fraud.
In particular, as the Federal government moves
toward electronic funds and electronic benefits transfer, we need to do
everything we can to make sure we don't expose Federal beneficiaries,
people who are most vulnerable and the government itself, unnecessarily to
even added fraud.
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I look forward to hearing from our witnesses
today; and I would, before we call them for their testimony, turn to our
distinguished Ranking Member for some opening marks.
Mr. HOYER. Thank you, Mr. Chairman. I look
forward to the testimony.
As you have pointed out, and as I mentioned
yesterday, the Secret Service is best known for its protective role, which
it does so well. But it has very, very substantial capabilities and
responsibilities in many other areas. This is an area where—you want
the public to hear what I am saying—the Secret Service has done
outstanding work and where there has been, frankly, some degree of
controversy as to its role vis-a-vis the FBI.
There has been discussion, but hopefully we have
reached an agreement between various law enforcement components in our
government. The expertise of the Secret Service in this area has been
recognized certainly by the Congress, because it was resolved that the
Secret Service would continue its focus and role in this area. So I am
looking forward to hearing the testimony.
I want to again say to Mr. Bowron, as I mentioned
yesterday to Mr. Kelly, that we have some of the top talent in law
enforcement in this country, indeed in this world, in your portfolio. Eljay
Bowron and the men and women of the Secret Service are as good as it gets,
and you are very fortunate to have them as colleagues in this critical
effort—law enforcement responsibility at the Federal level.
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I look forward to hearing your testimony.
Mr. KOLBE. Before I call you to testify,
Michelle has advised me I misspoke. I knew we were postponing part of
tomorrow's briefing, and I didn't realize it was the entire thing. That
briefing that I discussed is postponed to April because of the joint
session we have tomorrow with President Frei.
At this point, let me call Under Secretary Kelly
and Mr. Bowron for their statements, and let me once again emphasize that
the full statement will be made part of the record; summarizing it would be
much appreciated so we could have as much time as possible for
questions.
Mr. KELLY. Yes, sir, my remarks will be
brief.
Mr. Chairman, Congressman Hoyer, members of the
committee, thank you. Once again, it is a pleasure to appear before you
today. With me, as of course you know, is U.S. Secret Service Director
Eljay Bowron and members of his staff, as well as Assistant Secretary James
Johnson, Deputy Assistant Secretary Elizabeth Brezee and others from the
Treasury enforcement staff.
Money laundering, counterfeiting, tax evasion,
financial institution fraud, electronic benefit fraud and insurance fraud
have one thing in common. They pose a potential threat to our nation's
financial underpinnings. The Treasury Department is responsible for
safeguarding those underpinnings, so our role in financial law enforcement
is broad.
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Secretary Rubin has committed to this effort
by making the combatting of financial crimes one of his top priorities.
Support of this committee has clearly been vital to this effort.
I will defer to Director Bowron to explain the
specifics of the bureau's work and programs directed at addressing
financial crimes. I just want to underscore that the Secret Service has
pioneered the successful efforts with the credit card industry to prevent
fraud. It has received the unparalleled expertise to combat computerized
crime and continues to explore innovative ways to investigate and detect
counterfeiting and financial crimes in general.
Treasury's other law enforcement components
complement the Secret Service and each other in the financial crimes area.
Secret Service and Treasury enforcement overall is America's best defense
against financial crime. In my opinion, no one does it better. With your
help, we hope to meet the new and more demanding challenges the future
appears to have in store.
Once again, we look forward to working with you,
Mr. Chairman, Congressman Hoyer and the other members of the committee.
Thank you, sir.
Mr. KOLBE. Thank you, that was a good
summary.
Mr. KELLY. I learned my lesson.
[The information follows:]
"The Official Committee record contains additional
material here."
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Mr. BOWRON. Mr. Chairman, Congressman
Hoyer, on behalf of the men and women of the Secret Service, first, Mr.
Chairman, let me congratulate you on your chairmanship and also welcome any
new members——
Mr. HOYER. Although as good as he is, Mr.
Director, I want you to know he would be a fantastic Ranking Member.
Mr. BOWRON [continuing]. And, as you noted,
we have submitted a complete statement with our specific requests for
fiscal year 1998 for the record.
I would like to take a minute to introduce some
very important members of the Secret Service that I also may turn to to
help answer questions that may be raised by the committee. First, our
Deputy Director, Dick Griffin; Ralph Basham, our Assistant Director for
Administration; Rich Miller, our Assistant Director for Protective
Operations; Steve Sergek, our Assistant Director for Protective Research;
Bruce Bowen, our Assistant Director for Investigations; David Holmes, our
Assistant Director for Inspection; Lou Merletti, our Deputy Assistant
Director of Training; Terry Samway, Assistant Director for Government
Liaison and Public Affairs; and John Kelleher, our Chief Legal Counsel.
FINANCIAL CRIMES
Pursuant to the committee's request to focus on a
specific aspect of the Secret Service's mission, we have focused our
conversation today on financial crimes. It is important to note that we
have been involved in financial crimes investigation since the inception of
the Secret Service. Our financial crimes cases are a very high priority,
and we make a significant impact in this area.
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I would like to begin our presentation today by
playing a tape from a case that we investigated at the request of the
United States Attorney's Office in North Carolina. I think it is only going
to serve to illustrate a point that you and Congressman Hoyer have already
made, Mr. Chairman, but it involves financial crimes schemes that have been
perpetrated against the airline industry which involved millions of dollars
of fraudulent activity.
Maybe not. At any rate, it illustrates the point
that you made——
Mr. KOLBE. It is going to come on. It just
had a long lead.
[Tape played.]
Mr. BOWRON. So, as I said, Mr. Chairman, it
illustrates the point you made. We do protect the President, and that is
our highest priority, but we also protect our nation's financial
systems.
Our financial crimes investigations have a
significant economic impact. The actual losses associated with our
investigations exceeded $500 million in fiscal year 1996 and resulted in
over 9,000 arrests. Based on standards set by the financial industry, the
estimated potential losses exceeded $10 billion. In other words, had the
criminal activity under investigation not been stopped by virtue of our
investigation, $10 billion would have been the actual losses.
To reinforce the importance of that number, it
also represents $10 billion of potential revenue that would have been lost
to American businesses, $10 billion lost as taxable revenue to the United
States Government, and $10 billion which could have been used by criminals
to further other types of criminal activity.
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Although the actual losses were high, the Secret
Service is proud of the fact that the savings to the government and the
American people are even higher as a result our investigative efforts. The
investigations in many cases identified and apprehended the individuals
committing these crimes, as well as recovered the proceeds from the crimes,
which could be returned to the victims, businesses or the government.
As you also indicated in your remarks, Mr.
Chairman, although these crimes sound like separate and distinct acts, they
are so closely intermingled and cowoven that they work together for
successful criminal enterprise in the area of financial crimes. They
facilitate one another.
Each of you has packets in front of you that
contain all the items that you need to commit these financial
crimes—false identification, counterfeited checks from a legitimate
company, counterfeited credit cards with limits according to the
compromised account. These are the kinds of packets that the criminal
element puts together to facilitate these crimes. Technology gives them
access to the systems for the financial information, and technology, like
desktop publishing, provides them with the technical wherewithal to
manufacture the items in front of you.
I know the committee's time is limited today, and
what we really want to do is answer your questions. You have had a chance
to review the information that we have provided, so I would really like to
just answer any questions you may have.
Mr. KOLBE. Thank you very much for your
statement.
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And I would say, just looking at this, I do
appreciate the fact that, at least when you made this up for Mr. Dunn, you
did shave a few years off of my age here, which is certainly
appreciated.
[The information follows:]
"The Official Committee record contains additional
material here."
FINANCIAL CRIMES
Mr. KOLBE. I want to begin by asking some
questions here, and, as I have said before, we will adhere to the 5-minute
rule, including myself. We will use the process that we have used before,
taking members who were here at the beginning of the hearing and
alternating Majority and Minority and taking members as they come in for
their questions.
I want to begin by asking questions about
measuring the impact of the financial crimes. You used the figure of $10
billion of potential losses, yet you noted that the industry loses as much
as $12 million annually just from desktop publishing schemes alone. Do we
really have any grasp of the total amount of the financial fraud crimes
that we are talking about?
Mr. BOWRON. Well, it is commonly based on
industry estimates of the losses; and for the credit card industry,
estimated losses are at about $1.9 billion.
Mr. KOLBE. These are not nonpayments; these
are fraudulent.
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Mr. BOWRON. Right. I believe $1.9
billion is the figure they associate with credit card fraud.
Mr. KOLBE. That strikes me as very low,
actually, considering how much must be charged on credit cards in the
course of a year. I don't quite get to $1.9 billion, but it has got to be a
lot of money charged to credit cards.
Go ahead.
Mr. BOWRON. Well, losses are big. Losses
versus potential losses in most financial systems, whether it is credit
cards, your checking account, or other schemes, have built-in limits that
are imposed on the system or within the financial transaction. That is what
gives them the basis to identify the potential losses.
For example, suppose the credit limit on a credit
card is $15,000, and after $5,000 of criminal activity we arrest a
perpetrator that is committing fraud with respect to that one account. The
credit card industry would say the potential fraud there wasn't just
$5,000, which is the current balance on that card, the potential loss is
$15,000. There is $10,000 more there that they would have hit the card for
if they had not been arrested or apprehended.
Now, that is just a simple example of how they
estimate that. In most systems, that is how they calculate that number.
Mr. KOLBE. Well, we have various estimates
in drugs of what percentage we are actually interdicting. Do we have any
idea what percent of financial fraud crimes we are actually stopping or
catching? Is that a fair question?
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Mr. BOWRON. It may be a fair question. We
may have a method for answering it. I really couldn't give you an answer
off the top of my head, but we can try to provide that to you.
Mr. KOLBE. What then are the right
performance measures to use? You don't—to some extent, it seems to me
using cases closed is really just a way of measuring our workload. It is
not really a measurement of what we are accomplishing or doing. It is not
really a performance measurement. What kind of measurements do you think
are appropriate to use in this area of financial fraud?
Mr. BOWRON. I think the economic impact of
the investigations is a fair measurement, both as actual loss and potential
loss, as well as activity that is aimed at systematic fixes to prevent
future fraud.
Mr. KOLBE. So that is the actual loss that
you either prevent, catch or detect and the potential you may have deterred
from your activities.
Mr. BOWRON. That is correct.
Mr. KOLBE. Is that the $10 billion figure
that you are using?
Mr. BOWRON. Yes.
Mr. KOLBE. It is certainly substantial, but
it probably is only a small part of the potential loss we have in this
whole area. Is that not correct?
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Mr. BOWRON. Well, I think part of the
problem is, when you talk about financial crimes, they are difficult to
separate. It may be something that we need to look at in terms of
separating, from a resource standpoint, computer fraud versus
telecommunications fraud, versus financial institution fraud, versus
telemarketing, and versus credit card fraud. Because part of the problem is
these things are all woven together. That is the reason that we tend to
capture both losses, numbers and hours under the category of financial
crimes. Because in most cases——
For example, if we are involved in a telemarketing
case, it normally includes computer fraud, bank fraud, credit card fraud,
and, many times, telecommunications fraud. So they are so closely
interwoven that it is difficult to separate out the performance
measurements in each one of those separate categories.
Mr. KOLBE. Do you have any other
performance measurements other than this $10 billion loss?
Mr. BOWRON. Well, I think
certainly——
Mr. KOLBE. What are the other
measurements——
Mr. BOWRON. Arrests and convictions. If you
are working a lot of cases and you are not apprehending, arresting and
prosecuting any criminals, that is a valid measurement that needs to be
looked at. And, in our case, we have a relatively high number of arrests
relative to the resources devoted; and we have a conviction rate of about
99 percent.
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Mr. KOLBE. I have a series of other
questions, but Mr. Hoyer.
PROTECTIVE OPERATIONS
Mr. HOYER. Thank you very much, Mr.
Chairman.
Mr. Director, you had a busy year last year.
Election years are always very busy; but, in addition, you had the Olympics
and conventions. We have a G–7 coming up in Denver. I am going to go
beyond just the financial crimes, because I understand this is the only
hearing we are going to have on your budget. So, if you don't mind, I will
go beyond the financial crimes aspect.
Mr. BOWRON. Plans are under way for the
G–7 Summit in Denver. There are no problems from a staffing
standpoint, however there are problems from a funding standpoint. We are
working with the local community to plan the security and other
arrangements. Things are on schedule.
Mr. HOYER. With respect to your FTEs,
5,027, do we have sufficient personnel to accomplish the objectives that
you have before you in the coming fiscal year?
Mr. BOWRON. Yes.
TREASURY RECIPIENT INTEGRITY PROGRAM
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Mr. HOYER. The TRIP program, Donna Shalala
is rightfully very proud of the fact that we have gotten more welfare, food
stamp fraud collections in the last 4 years than I think we had gotten in
the previous 20 years combined. Obviously, we are doing a lot in
Treasury.
Tell me about the TRIP program, how successful
have we been? This committee is excited about that because we are worried
about the fraud of people who get money from the Federal government. Tell
me where you are and also comment on the lessons we are learning and how we
are transmitting that to other government agencies where recipients are
receiving payments.
Mr. BOWRON. If I could take a moment, TRIP
is an acronym—Treasury Recipient Integrity Program—which is
really aimed at making sure that organizations that provide benefits from
the Federal government have systems in place to assure they know who they
are doing business with. They want to be sure that the money that is
intended to go to entitled recipients is in fact going to these recipients;
and if money is going to nonexistent or wrong recipients, that this is
identified.
We have done several projects with the Department
of Defense and other benefit providers. We have eliminated about $6.2
million worth of fraudulent payments that were going on, annually. So this
is another example of $6 million in losses if someone had not have stepped
in and identified this as a problem. In some cases the problem was, for
example, benefits were being provided to people that had long since been
deceased; benefits were still being received by people in the name of that
individual.
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Mr. HOYER. To put the $6.2 million in
context, how much money do you allocate to TRIP?
Mr. BOWRON. Well, we had about $1 million
for this fiscal year allocated to TRIP-type initiatives.
Mr. HOYER. So it would be fair to say that
is a 6-to-1 payoff.
Mr. BOWRON. At the present time, we have an
earned savings of $6 million a year.
Mr. HOYER. I understand. But currently.
Mr. BOWRON. What has occurred is we have
been able to take the lessons learned and provide that information—to
providers.
Mr. HOYER. But you are also expecting at
least $1 million a year. We are saving $6.1, but presumably you want
another million this year. It is a 6-to-1 payoff. That is not bad in
anyone's business. Go ahead.
Mr. BOWRON. For example, we have passed
lessons learned through the different TRIP initiatives on to benefit
providers, who in some cases, have instituted regular fraudulent prevention
programs. So this kind of fraud can be stopped and the business systems can
be fixed to eliminate some vulnerabilities.
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The Department of Defense, for example, has taken
the reverification procedures, and developed them into a permanent program
that will, every 5 years, provide reverification.
We are currently involved with the Social Security
Administration in a border initiative. We are doing a pilot project. Based
on the results of the pilot project, it is expected that this will be an
initiative to stop people who aren't really entitled to benefits. The
people are not living in the United States but are applying for and
receiving benefits and only come to the United States to pick up checks
from mail drops, fictitious addresses and so forth and then go back to the
country that they came from in order to spend and use those benefits. So,
right now, we are working with the Social Security Administration.
Most of our efforts have been overseas. This
effort with the Social Security Administration is the first domestic TRIP
program where we are taking steps inside the United States to identify
fraud.
Now, in addition to that, and as part of the money
that is spent, we are also meeting and doing training and seminars and risk
analysis sessions with the different benefit providers to try and identify
fixes to the system and save money in terms of end results, to avoid costly
investigations, prosecutions and jail time—trying to stop the fraud
instead of chasing it after the money is out the door.
Mr. HOYER. Mr. Chairman, this is obviously
a multibillion dollar payoff to the extent that we increase our ability to
catch fraudulent recipients. This is sort of a pilot program, small at this
point in time. But a lot of agencies are obviously pursuing this at our
urging and their own urging. This is a very important program.
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Let me go on to another area; and this is the last
question I will ask, Mr. Chairman, in this round.
ANTI-COUNTERFEITING
Mr. Chairman, we have worked very hard with the
Secret Service on the whole question of counterfeiting. As you know, we
have a new $100 bill; and I happen to like it and think it is a good idea
for a lot of reasons. It is a more secure bill, as you know, than its
predecessor. The $100 American bill is used much more overseas than it is
here.
Mr. Director, why don't you comment on where we
are to the extent you can on the world threat and domestic threat and how
we are doing on our resources available to fight that threat, particularly
overseas. Because I know we have had problems, Mr. Chairman, with Secret
Service's resources being sufficient overseas to work with foreign
governments to get at the overseas counterfeiting of $100 bills and other
currencies as well.
Mr. BOWRON. First, let me talk about
counterfeiting overseas and domestically. In terms of the threat, the
threat is that increasingly our currency is being counterfeited overseas.
About 70 to 75 percent of the counterfeit that is passed in this country
originates from outside this country.
Now, historically, our experience has always been
and continues to be that the most effective way to attack counterfeiting
operations is at the source. Since the source of this counterfeiting is
overseas, in order to be most effective in addressing that problem, we have
increased our focus overseas.
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Now, I want to put the threat in perspective.
Because the fact of the matter is this is not a problem that is out of
control. It is not out of control because there is an aggressive
investigative enforcement effort to suppress counterfeit activity
worldwide, and we have had very good success with respect to suppressing
those counterfeit activities.
If you look at most recent efforts by the Federal
Reserve Bank, the fact of the matter is that the number of counterfeit
notes that come through the Fed from overseas, counterfeit notes per
million, is actually lower coming from overseas than it is in the deposits
in the United States. So I say to that, first of all, it isn't as though
there is this huge amount of counterfeit notes floating around overseas
that are not being detected by foreign banking entities. An analysis of the
money flowing through the Federal Reserve Bank, which is substantial,
doesn't support that.
Secondly, our experience in working with foreign
law enforcement and foreign banking officials gives us evidence that is
consistent with the experience of the Federal Reserve in terms of their
examination of the currency.
Now, with respect to our overseas staffing, this
committee authorized and funded 28 positions for additional staffing
overseas, and I want to find the right section in this binder that gives me
that. Of the 28 positions, we have filled 17 of those positions; and 11
positions have been denied by the State Department. There is no single
answer for the denial, and it is not something that is final in anybody's
estimation. In some cases, the problem is the availability of space. In
some cases, it is a prioritization by the State Department and a particular
embassy with respect to law enforcement efforts and staffing in that
embassy.
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But through the Treasury Department, the Office of
Enforcement and the State Department, we are going back to appeal those
positions that have not yet been filled; and we are also going to offer
some alternatives. I mean, this may turn out to be an actual case in point,
but it isn't at this moment.
In Moscow, for example, we are going to build a
new embassy. There are some space problems there with respect to the
availability for law enforcement purposes, and those are positions that we
have not yet been able to have authorized.
Our request for Moscow was two agents and one
support person. We are going back to the Treasury Department and the State
Department to appeal that decision. If we are not allowed in the final
analysis to staff Moscow, we are going to offer perhaps Helsinki or some
other location that will give us good geographic proximity and the
logistical capability to get to that region and other places in the world
that we need to go to be effective when conducting these
investigations.
Now, I also want to hasten to point out that the
fact that we don't have the staffing doesn't mean we are not getting the
job done. We are sending people there in a task force and temporary duty
situation to make sure we address the needs and conduct the investigations
that need to be conducted. So that is where we are.
Mr. HOYER. Thank you. Thank you, Mr.
Chairman.
Mr. KOLBE. Let's call Mr. Price.
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WHITE HOUSE SECURITY
Mr. PRICE. Thank you, Mr. Chairman.
I am glad to welcome our witnesses; and while I
appreciate your testimony today, which acquaints us with the diversity of
the work you have underway, I, too, want to return to your protective
mission, which of course we take very seriously and are very appreciative
of the job you are doing.
Three of the program changes for fiscal 1998 cover
White House security. I understand you are requesting a total of $13
million for implementing recommendations made following the security review
you conducted of the White House complex, and I believe that the Service is
in the final stage of implementing those recommendations. Is that correct?
I wonder if you could provide any more detail about where we are in that
process and, when all is said and done, what portion of these
recommendations will have been implemented. What are we talking about in
terms of the specific objectives of the $13 million request?
Mr. BOWRON. Well, with respect to the $13
million, to give you specific dollar outlays, I would like to maybe provide
you with a written answer to that. But the short answer to your question is
that ongoing funding has been provided for completion of the
recommendations; and, in fact, the recommendations have been implemented.
We have moved forward on that as expeditiously as we possibly could.
Some of the things that continue to be necessary
in terms of funding are the bollards and other permanent security
installations around the White House that are construction initiatives. In
the meantime, we have taken temporary protective measures until those
projects are completed. But the ongoing funding is there, the plans are
under way to complete those projects, and that process is moving
forward.
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So with the FY 1998 funding all of the initiatives
that came from the review as well as our own analysis of the security
needs, will have been both funded and implemented at the White House
complex.
Mr. PRICE. So this $13 million increment is
basically a one-time request?
Mr. BOWRON. Well, no. The $13 million you
are referring to, our Assistant Director of Administrations informs me is
funding for FTEs. That is funding for salaries. That goes into our budget
to pay for increased staffing.
Mr. PRICE. Staffing related, though, to
that security review?
Mr. BOWRON. Yes, the security review
identified the resulting human resource requirement for implementation of
White House initiatives to be 277 FTEs which will be underwritten by that
funding, although we don't have all of those positions on board. We are
rapidly going through the hiring process; and, in the meantime, any lack of
staffing is being compensated for by overtime to cover the necessary
operational requirements.
Mr. PRICE. Alright and if you have further
details on that, you can furnish them for the record.
[The information follows:]
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WHITE HOUSE SECURITY
In 1995, the Department of the Treasury conducted
a review of White House security. All of the recommendations of the
White House Security Review have been implemented. However, some of
the new security posts at the White House are temporarily being staffed
through the use of overtime until full funding is secured, and officers can
be hired. Also, some security enhancements are part of an interim plan,
until permanent funding is provided to the National Park Service and the
Department of the Interior so that President's Park, the long term
preferred alternative, can be completed.
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The FY 1998 President's budget includes $28.8
million for White House Security, of which $15.6 million has been requested
through the Violent Crime Reduction Trust Fund and $13.2 million requested
through the Service's Salaries and Expense appropriation. Specifically,
this funding will be used to fully fund positions, for protective systems
at the White House, to lease vehicles, and for the purchase of primary
armored limousines. If the requested funding is provided in FY 1998 and,
barring any cost overruns during construction, permanent funding for all of
theFTE and other security enhancements recommended by the review will be in
place.
DIGNITARY PROTECTION
Mr. PRICE. I was listening with interest to
your discussion with Mr. Hoyer about your coming challenge with meetings
where numbers of foreign dignitaries will be present. Your cost for
protecting foreign dignitaries in fiscal year 1996 exceeded the amount
projected by a good bit, something like 54 percent, and you attributed this
overage to the 50th anniversary of the UN, the Pope's visit, the Bosnian
summit, the Olympics and so forth. This, along with the increase in
presidential protection activities required during the election cycle, led
to greater expenses and the diversion, I would assume, of substantial
resources away from the Service's criminal investigations.
I realize the Pope's visit and the Bosnian summit
were unexpected events; but I wonder why that estimate was so far off in
1996 and whether this budget includes a more realistic estimate of the
likely expenses in fiscal 1998, for these protective activities. I also
wonder what the implications were for this overrun in terms of diversion of
resources from criminal investigations during this election year or periods
of high travel.
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Can we do something to address this cyclical
diversion of funds? I know we have got to have flexibility and that the
Service prides itself on flexibility, but it does raise the question of
whether the baseline amount assigned to FTEs is sufficient to ride out
these cycles.
Mr. BOWRON. Well, as you indicate,
Congressman, we do have to have the flexibility. Our resources are pulled
from our investigative mission in order to accomplish protective
operations. We can provide you with more exact numbers, but the fact of the
matter is we suffered no real appreciable loss in terms of our
investigative effort during that period of time, by relying on a tremendous
effort by the work force in the Secret Service in terms of overtime that
was put in. Also in terms of maximizing the geographic location of our
agents, and trying to minimize their travel time, and the logistical impact
of their participation in those protective operations.
In terms of the estimates for the protection of
foreign Heads of State or other protection, we have a pretty
straightforward way of projecting that. We have changed it a little bit
this last campaign and it basically relates to the number of protection
days required to arrive at the figures. We used that for the campaign.
With respect to foreign Heads of State and for
example as in the case of the Pope's visit, we can only project based on
our past experience and based on what information we have available to us.
For example, with the 50th anniversary of the United Nations and the Papal
visit just in advance of that, those were both extraordinarily expensive
undertakings. That was truly a historical event.
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I mean, at the 50th anniversary of the United
Nations, we had over 150 foreign Heads of State, a very large number of
spouses, plus the President and Vice President all in New York City at one
time. It was more expensive than we projected it to be. It was a unique
event, a one-of-a-kind event. There has never been anything like that as
far as I know in the history of the Secret Service, maybe in the history of
the world. So it was unique.
Mr. PRICE. So your conclusion is that there
is not a basic flaw in the method of projecting your needs and that the
overrun would not likely be repeated.
Mr. BOWRON. No, but I would assure you that
we are constantly looking at the means that we have to make projections. We
try to determine whether or not there is a better way to project and, in
fact, this past campaign was an example of that.
In past campaigns we actually tried to make a
guess as to how many candidates there would be. In fact, it doesn't matter
how many candidates there are, what matters is how many days we protect a
protectee and how many protection days there are. So we changed our method
of calculating protective requirements for the campaigns, and we think that
the system that we use now is better. My point is, we are constantly
looking at the numbers to try to determine whether there is a better way
for us to arrive at them, and whether there is better information we could
use in the formula.
Mr. PRICE. Well, as to this trade-off
question, you say in your budget justification, and I am quoting, ''Due to
the wide range of protective activities during fiscal year 1996, i.e. the
Pope's visit, fewer criminal cases were closed than had originally been
anticipated. As a result, the Secret Service closed 27,393 criminal cases
during fiscal year 1996, 82 percent of the anticipated goal of 33,500. The
number of criminal cases closed for fiscal 1997 should reflect an increase
over FY 1996, with more of the Secret Service's resources being redirected
from campaign protective activities to the investigative areas.'' That
language does suggest a trade-off.
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Mr. BOWRON. Yes, sir. I wouldn't suggest
that there was no impact, but what we try to do is prioritize the cases to
work the highest priority cases to achieve the goals that we can. Certainly
in those cases that we didn't work from a campaign year to a noncampaign
year, those are as a result many types of protective operations. So if I
implied that there was no impact, I didn't mean to imply that.
Mr. PRICE. Thank you. Thank you, Mr.
Chairman.
Mr. KOLBE. Mrs. Meek.
Mrs. MEEK. One quick questions, Mr.
Chairman. First of all, I want to commend Mr. Bowron for being here today.
I learned in the brief time I have been here, because I had a VA-HUD
Subcommittee, a lot more about the Secret Service than I ever imagined the
kind of services you render. I also want to commend you on your step up in
food stamp fraud and the TRIP program and other kinds of programs. I think
our job now is to educate the public, our constituents, to the fact that
there is a preventive arm as well as a corrective arm in terms of the kinds
of fraud that was perpetrated before this time. So I want to commend you on
that and ask you to please keep that going and try to step up the
activities in that area.
Mr. BOWRON. Yes, ma'am. Thank you very
much.
Mr. KOLBE. Do you have further questions?
Mike.
Mrs. MEEK. That is it, Mr. Chairman.
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Mr. KOLBE. Thank you very much.
WHITE HOUSE ACCESS
Mr. WOLF. I am sorry I wasn't here earlier,
I was chairing another subcommittee, but I can tell you there are two
issues that I am so interested in. And when I go out to high school
classes, and I spoke to one at Oakton High today, and I don't know what to
tell them when I tell them that at the White House we are getting a
situation where drug dealers can come into the White House, and maybe that
is a one-time thing, and then we hear a guy on the Interpol list comes into
the White House. Then we hear you got this guy Wynn coming into the White
House who is out on bail. Maybe his bail may have been even revoked for
some reasons.
Then we have this guy, Wang, who heads up the Poly
Corporation, Chinese Communist Corporation. It was the operation of a,
sting operation that Customs had whereby he wanted to sell assault weapons
that could have killed your people and the people in California to street
gangs in California.
Now, I have great respect for the Secret
Service—I don't know what to tell people. I don't know how I would go
in and explain how people like that can come into the White House. It
angers me, it bothers me. I want to know that it bothers you. I want to
know that it bothers all of your agents.
I understand as somebody who worked for the
Federal Government, sometimes you are afraid to speak out, but I want to
know that you are vexed by it. I want to know that you are bothered by it.
I want to know that it gets you down. I want to know when you go home and
talk to your husbands and your wives you say I don't know what is going on
here, because it bothers me. Because you ought to speak out, Mr. Director.
You ought to speak out or you ought to step out. You can't be part of a
process then allow these activities to take place.
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Tell me, how do these things take place? Do you
submit something to the President or the Chief of Staff telling him that
drug dealers are coming in? Do you submit and tell him that people that are
on the Interpol list are coming in? Do you tell him that this guy, Wang,
who is trying to sell assault weapons, who is connected to the Chinese
Government is coming into the White House? Tell me, do you submit anything,
do you tell him anything, and whether you tell him or not, I want to know,
does it bother you? Does it make you kind of upset, or is it just kind of a
job and that is what the job is and it is over? Would you answer that
question for me? Does it bother you?
Mr. BOWRON. Well, I am going to address my
professional response——
Mr. WOLF. But I want to know that it
bothers you, because it bothers me that it doesn't bother you, if it
doesn't bother you, and frankly, when we get to a situation, and with the
respect that I have for the Secret Service, with the outstanding job your
people have done, and I know many of your people, many of your people go to
my church, many of your people live in my area, I know a large number of
your people. It bothers them. When I talk to them privately, they tell me
it bothers them. I want to know, does it bothers you?
Mr. BOWRON. Well, I am not here talking
privately, I am here talking publicly.
Mr. WOLF. But this is a public hearing.
Page 280 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. BOWRON. That's right, and I am
going to address this from the standpoint of my professional, public
responsibilities as the Director of the Secret Service. I am not going to
talk about what I talk to my wife about when I go home, or what my personal
feelings are about a wide range of issues that may or may not bother me.
But I am the Director of the Secret Service and I am here to answer
questions about the Secret Service, our mission, and our
responsibilities.
Mr. WOLF. But how could these four people
have gotten into the White House?
Mr. BOWRON. Those four people got into the
White House because they did not pose a physical threat to the President of
the United States or the White House Complex by being there.
Mr. WOLF. Did you tell the Chief of Staff
that people like this were coming in?
Mr. BOWRON. The Chief of Staff gave us the
information on who was coming—well, not the Chief of Staff, but the
administration. We don't provide them with criminal history or background
information on the names of individuals that they provide to us.
Mr. WOLF. Did you know the man's name was
on the Interpol list before he came? Yes or no.
Mr. BOWRON. The answer right now is I don't
recall whether we knew that in advance or not. I don't believe that when we
ran a name check on that individual on the data bases that we utilize, that
an Interpol record was reflected in the summarized history we received.
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Mr. WOLF. Did you know that Mr. Wynn had
been convicted? Did you tell them that Mr. Wynn had been convicted.
Mr. BOWRON. No, I would say we did not. We
did not tell anyone that Mr. Wynn had a criminal history. I don't believe
that we provided that information to anyone.
WHITE HOUSE ACCESS
Mr. WOLF. Did you tell him when Mr. Wang
was coming in that he was with the Poly Corporation, which was the very
group that we had a sting operation on with the Department of Commerce?
Mr. BOWRON. My guess is, first of all, we
probably didn't have that information about the sting operation or the
corporation that this individual was involved with. If there was criminal
history, we would have had it and we would have used it to make our
judgment about whether or not they posed a physical threat to our
protectees.
Mr. WOLF. Well, I am going to move on to
the next—I am going to tell you, I think it is a disgrace. I think it
is a disgrace, and I think your people think it is a disgrace, because the
Secret Service agents that I talk to tell me that they think that the fact
that drug dealers were coming into the United States White House when
people have to line up outside is terrible, and they think that the Poly
Corporation guy to come in is terrible. And I would say it if it was Bush
or Reagan or Nixon or Dole or whoever the case may be.
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My next comment, I am going to move on to the
next subject, I think you ought to speak out on this issue, because it goes
to the integrity of the Secret Service, the integrity of the process.
Mr. BOWRON. Can I speak out on that
now?
Mr. WOLF. You certainly may.
Mr. BOWRON. Let me just say that the
integrity of the Secret Service rests on the performance of our mission to
protect the President, the Vice President, their families and the White
House Complex. That protection is physical protection, physical protection
to make sure that harm does not come to them. I don't think that anybody
intends in our statutory authority for the Secret Service to be the people
to make suitability judgments about who has access to our elected
officials.
Mr. WOLF. That is true, but they have an
obligation to say to the White House Chief of Staff we have a man coming in
here who the President should not be around. We have a man connected to the
Poly Corporation selling assault weapons to street gangs in California that
we don't think the President should be around. You should not tell the
President who he or she should have coming in, but you should certainly
have a piece of paper going in to say, Mr. President, it is inappropriate
that somebody convicted of drugs should come into the White House. There
should be a paper file from the Secret Service on every one of these people
coming in.
You don't have the right to tell the President who
he should have, but you have an obligation and you have a duty to tell the
President that people of this type of records are coming in.
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The last question, I am running out of time,
Agents Libonati and Undercoffer. Are they under investigation?
SPECIAL AGENTS LIBONATI AND UNDERCOFFER
Mr. BOWRON. I talked to Agent Libonati. I
know from his conversation with me that he received a letter from the
Inspector General's office that has advised him that he is not at this time
under investigation.
Mr. WOLF. So the whole investigation is
dropped.
Mr. BOWRON. I don't know whether the whole
investigation is dropped, but I know——
Mr. WOLF. What would they be investigating
if not him and Undercoffer? What would they be investigating?
Mr. BOWRON. Well, I really can't speak to
what they may be investigating——
Mr. WOLF. They are your people.
Mr. BOWRON. But I don't know what the
Inspector General is investigating. They are not, to my understanding,
investigating Agents Libonati and Undercoffer. Whether they are going
forward with any aspect of that investigation at this point, I have not
been contacted with respect to any requests for documents, interviews or
access. So I don't know what the status of the Inspector General's
investigation is, other than those agents have been told they are not under
investigation.
Page 284 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. WOLF. Do you think the committee should
pay for their legal fees of $16,000?
Mr. BOWRON. I think they should not have to
pay for their legal fees, because I don't think they were appropriately
investigated, and as a result, should not have had to seek legal
counsel.
Mr. WOLF. I don't either, and I think this
committee should, because $16,000 for somebody who may have a couple of
kids they are trying to educate or whatever is a lot of money, so I would
hope that you would give us a formal request on behalf of the Secret
Service asking this committee to pay for these fees, because what happened
there is the chill that that sends to all the people who may get involved
in all of the same type of thing, people who may want to come forward and
speak out on an issue will now say I can't put my career up. I have a son
or daughter in college or this or that. It is a chill, and we would ask
you, as the leader of the Secret Service, the people that these men look to
for leadership to speak out and let this committee know, one, you request
that they pay for the fee, but also say something publicly so there is no
longer a chill out there whereby your men and women feel free that they can
speak out and do their roles and not have that.
I thank you, the committee. I feel so strongly, I
cannot tell you how strongly I feel about these issues, and some day I
would urge and ask you to come up to my office privately where nobody is
around so we can talk about these issues. I yield back the balance of my
time, Mr. Chairman.
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Mr. KOLBE. I thank the gentleman for
his questions and appreciate the depth of his feeling.
My next questions come from the testimony this
morning from Inspector General Valerie Lau with regard to that
investigation. Under Secretary Kelly, did you ever have a conversation with
Ms. Lau in response to the letters she had received from Senator Stevens
and Representative Collins when she
initiated—''investigate''apparently isn't the right word,—about
the inquiry to respond to that correspondence. Did you have any
conversation with her at any time regarding that matter?
Mr. KELLY. Regarding that specific matter?
No, sir, not to my recollection.
Mr. KOLBE. Did you ever have any
conversation with her in which the names of Agents Libonati and Undercoffer
came up as being under investigation?
Mr. KELLY. No, sir.
Mr. KOLBE. No conversation.
Mr. KELLY. No conversation with her
concerning those individuals. I had conversation with access in general
to——
Mr. KOLBE. Okay, well, that was my first
question. Did you have a conversation regarding the access issue and that
whole——
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Mr. KELLY. The access issue.
Mr. KOLBE. My first question was in
response to the letters that she got from Senator Stevens and
Representative Collins, which did not name any names. She initiated an
inquiry, or investigation, or whatever it is, with regard to the access
issue. You did have a conversation with her about that?
Mr. KELLY. Yes, sir.
Mr. KOLBE. At no time in that conversation
did the names of Agents Libonati and Undercoffer come up.
Mr. KELLY. No, sir. The discussion was
about access to conduct a—the investigation and access to how the
process would run as far as access to the Secret Service and White House
Complex.
SPECIAL AGENTS LIBONATI AND UNDERCOFFER
Mr. KOLBE. At any time did she inform you
that Agents Libonati and Undercoffer were under investigation, either civil
or criminal investigation?
Mr. KELLY. No, sir.
Mr. KOLBE. What is your recollection of the
conversation you had with her then as to what this conversation was about,
to the extent that you can tell me.
Page 287 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. KELLY. The conversation, again, was
about how to access personnel and records in the Secret Service. I guess
implicitly it was about these two agents. The name never came up. It was,
again, the issue of how information would be obtained from the Secret
Service.
Mr. KOLBE. You were then not at the October
21st meeting where the issue, where this issue was brought up about this
investigation, Monday, October 21st.
Mr. KELLY. No, sir.
Mr. KOLBE. Do you recall that meeting?
Mr. KELLY. No, sir. I was not at that
meeting.
Mr. KOLBE. I am referring to the letter
from the Executive Assistant to the Internal Affairs of Secret Service, if
you would like to refer to this.
Mr. KELLY. I was not there, sir.
Mr. KOLBE. You were not there. Mr. Bowron,
were you at that meeting?
Mr. BOWRON. No, sir.
Page 288 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. KOLBE. Have you at any time, Mr.
Bowron, reviewed with your staff whether or not this—the contents of
this letter?
Mr. BOWRON. Yes.
Mr. KOLBE. Do you believe it to be an
accurate statement of the facts?
Mr. BOWRON. I believe it to be an accurate
statement of the facts.
Mr. KOLBE. Accurate.
Mr. BOWRON. Yes.
Mr. KOLBE. Let me quote one sentence. At
this meeting, and this meeting we are talking about is with Inspector
General Lau, who requested a meeting with Secret Service officials to
discuss the pending investigation. The Assistant Director for Inspection
attended, Mr. Holmes, and Chief Counsel John Kelleher attended on behalf of
the Secret Service. We have Chief Counsel Kelleher with us today.
Mr. BOWRON. Yes.
Mr. KOLBE. I might ask him this question.
At this meeting, the Secret Service was again advised there was an active
investigation of Special Agents Libonati and Undercoffer and that this
matter was potentially a criminal investigation.
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Mr. Kelleher did not write this letter, but I
presume Mr. Pickle must have spoken to him before he drafted this letter,
[and] I would like to ask Mr. Kelleher if that is an accurate
statement.
Mr. KELLEHER. Yes, sir, it is an accurate
statement.
Mr. KOLBE. We have a very interesting
problem on our hands then. We were told this morning he was either
incorrect or he misrepresented the statement.
Mr. BOWRON. Mr. Chairman, you may have this
or you may not be aware of it, but I would read to you from a statement
that was provided by Senator Grassley on this same subject matter, the
quote here is, quoting from his statement——
Mr. KOLBE. I am aware of this letter.
Mr. BOWRON. You are.
Mr. KOLBE. But go ahead.
Mr. BOWRON. Whereupon my staff called Ms.
Vassar in the presence of the chief investigator for the Senate Judiciary
Committee as to ascertain the facts. During that telephone call, Ms. Vassar
explained to my staff that the two Secret Service agents by name were being
investigated at the request of Senator Stevens and Congresswoman Collins.
The committee investigator prompted my staff to ask if the investigation
were criminal. The answer my staff received from Ms. Vassar is it is
potentially criminal. My staff simultaneously wrote down the word
potentially on a note pad for the committee investigator to communicate Ms.
Vassar's response.
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My staff then asked Ms. Vassar to explain which
specific words in Senator Stevens June 18th letter to the IG allowed the IG
to interpret this as his request to investigate the two agents. Ms. Vassar
responded by reading Senator Stevens' letter verbatim.
The question was repeated twice more by my staff,
and the letter was read verbatim twice more by Ms. Vassar. It was clear at
that point that the IG's office was unable to justify its contention that
Senator Stevens indeed requested the investigations of Agents Libonati and
Undercoffer.
Subsequently, my staff reported to me that the
committee investigator was told by a Treasury legislative affairs official
that the investigation of the two agents was potentially criminal. The
staff then called the Secret Service officials who corroborated that there
was potentially—a potentially criminal investigation according to the
IG and that it had been requested by Senator Stevens and Congresswoman
Collins.
Now, this communication with Senator Grassley's
office was completely independent of any communication with the Secret
Service.
SPECIAL AGENTS LIBONATI AND UNDERCOFFER
Mr. KOLBE. That is correct, and it is just
simply a second corroboration of this.
Well, we may need to have another hearing with
some people under oath on this matter.
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But Mr. Wolf is absolutely correct. It doesn't
matter at this point what we do. It doesn't matter what we do to correct
the problem. It doesn't matter what they do in terms of sending letters to
these agents telling them they are not the subject of an investigation.
Whoever has been involved in this has had the desired effect, which is to
have a chilling effect on anybody in a Federal agency who comes before this
committee or any other committee and testifies on a process. All they were
being asked to do was testify about the process—and then they were
made the subject of an investigation. The result is several thousand
dollars in potential legal fees.
I would like—go ahead and comment if you
want. I have one other question.
Mr. BOWRON. Well, I would just say that the
legal fees are certainly important, and that they shouldn't suffer a loss
in my opinion. I would look for some way for them to not sustain those
costs, because it certainly was something that these agents didn't deserve
based on what they did, and it has had a real impact on their morale and
how they feel.
Mr. KOLBE. One other question, sir. Under
the normal process, if a member of the Secret Service, of your staff, one
of your agents, testifies before a committee on anything like this, in a
process or anything like this, would you normally review or—you or
would somebody else in Treasury review their testimony beforehand?
Mr. BOWRON. Normally, if there is prepared
testimony, it would be reviewed within the Secret Service; it would be
reviewed by Treasury; and it would be reviewed, in many cases,
by——
Page 292 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. KOLBE. Do you know if that took place
in this case?
Mr. BOWRON. The normal reviewing process
did not take place in this instance for a couple of different reasons. One
was it wasn't so much testimony as it was them coming up to answer
questions, and secondly——
Mr. KOLBE. That is correct. My
understanding is it was informal remarks that were made in the opening
testimony. But they did write them out.
Mr. BOWRON. Secondly, I think with all the
right intentions the Department of Treasury and the administration did not
want to be in a position of reviewing or impacting testimony on this
particular subject matter. We were dealing directly with the Congressional
Committees and not putting the questions or the answers through the
Treasury Department on this particular subject and that was everybody's
understanding. It wasn't anything under the table.
Mr. KOLBE. No, okay. So they did not submit
the testimony. They gave it on their own in good faith and understanding
they were giving the process. And, subsequently, we have two separate,
independent events that corroborate this, the Inspector General tells these
agents or through other people tells these people that they are under
criminal investigation. I find that extraordinarily disturbing.
WHITE HOUSE ACCESS
Page 293 PREV PAGE TOP OF DOC Segment 2 Of 2
I have some more questions on some other
topics.
Mr. Hoyer.
Mr. HOYER. Thank you.
Mr. Bowron, do you know of anybody who screens
visitors to the Speaker's office?
Mr. BOWRON. Who screens visitors to the
Speaker's office? No, sir, I am not aware of anybody doing that.
Mr. HOYER. I am not aware of it either. I
am aware of the fact that there was a court case, Sherill vs. Knight, 1977,
which the Secret Service lost when it tried to screen somebody for reasons
other than safety to the person or the property of the White House. Am I
correct on that?
Mr. BOWRON. Yes.
Mr. HOYER. And can you tell us a little bit
about that case?
Mr. BOWRON. Well, it was a case where we
had denied access to someone based on a criminal record. The debate that
ensued in that particular court case really centered on the Secret Service
having to have an identifiable and clear threshold with respect to who they
would allow or not allow into the White House complex.
Page 294 PREV PAGE TOP OF DOC Segment 2 Of 2
We took the position that that threshold was
someone's dangerousness. With respect to what information we are able to
share with respect to someone's criminal history, that is governed by
Federal regulations. We only have access to criminal histories by virtue of
being a law enforcement agency, and can only use that information for law
enforcement purposes.
Mr. HOYER. Let me ask you a question on
that.
There has been a great controversy about White
House staffers getting criminal records or FBI records of personnel who may
or may not have worked at the White House at any given time. In the event
we have pursued the notice that Mr. Wolf suggests, how easy would it be for
a White House person to invite somebody to the White House, whether they
accepted or not or had a potential invitation and then request a background
check on that and advise as to whether that individual ought to be allowed
in the White House. If we pursued a standard less than protection, as I
understand what you are saying, then the record would be made available to
the staffer, chief of staff or deputy chief of staff, who was in charge of
the invitation list. Now, you do not do that, do you?
Mr. BOWRON. No.
Mr. HOYER. You do not provide that.
Mr. BOWRON. No, we do not.
Mr. HOYER. That is a record that is
provided to you, as you just said, as a law enforcement agency.
Page 295 PREV PAGE TOP OF DOC Segment 2 Of 2
You then make a judgment based on the criteria of
the Sherill case.
Mr. BOWRON. That case as well as our
experience as to what type of activity should alert us as to someone being
a physical threat.
Mr. HOYER. Let me make it clear. I don't
want anybody in the audience or my good friend, who does feel very strongly
about this issue to be in any way confused about my position. I think these
individuals should not have been invited to the White House. Having said
that, I think the Secret Service ought not to be in a position to
second-guess the White House or anybody in any White House in invitations,
except for the limited criteria of your responsibility, which is safety of
the person and of the White House itself.
I wanted to follow up on Congressman Wolf, because
I know he feels strongly and we have a somewhat different perspective on
the issue. And we have had this discussion before in terms of what criteria
should be applied.
With respect to the agents involved, I would agree
with my colleagues. To the extent that they were acting properly within the
framework of their duties and responsibilities, not just formal testimony
but acting within the realm of their responsibilities, we ought not to
allow our people, whether they be Secret Service or any other government
official, to be exposed to legal expenses as a result of the performance of
their duties or related to the performance of their duties.
Mr. Chairman—I know Mr. Wolf and I have felt
strongly about that in other cases, and I agree with him on this case, and
perhaps we will pursue that.
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Mr. KOLBE. I am sure we will want to pursue
that.
Mr. HOYER. I don't know what the time frame
is, Mr. Chairman. Do you want to go a third round?
Mr. KOLBE. Fine, let's do that. Mr.
Wolf.
WHITE HOUSE ACCESS
Mr. WOLF. Yeah, I will just make a comment.
I don't know if I have a question.
I will offer, if it is not done, the amendment, as
I did for the White House Travel Office, to make sure that your agents are
reimbursed.
Secondly, Mr. Hoyer and I are good friends and
maybe we see things differently, but I don't know that we completely do.
You have the NCIC checks. It would be good for the President, whoever he or
she would be, that they be told that you got a guy coming in who has been
connected with organized crime. That would be a good thing, and they would
want to know.
It would be a good thing to tell them you have got
a guy coming in who is with the Poly Corporation who is connected heavily
with the leaders—some of the prominent leaders of the Chinese
government who sold assault weapons, who sold equipment to Saddam Hussein
that was used against American servicemen, a government that is persecuting
Christians, Catholic bishops and priests in jail, Protestant pastors in
jail. There are more gulags than were ever in the Soviet Union. They
plundered Tibet.
Page 297 PREV PAGE TOP OF DOC Segment 2 Of 2
I think the President would want to know that this
guy, who was connected to the people that were doing these things—I
think that under the Nixon administration or the Carter administration, if
somebody had been connected with Gorbachev or Khrushchev or Stalin, who had
slaughtered 30 million people, I think they would have wanted to know.
And I believe—I could be wrong, and I am not
perfect. Believe me, my feet are made of clay. When I take any socks off,
it is all clay. I may be wrong, but I believe in those administrations.
They would have said, Mr. President, this guy is connected with Stalin; and
this guy is persecuting those of the Jewish faith and those of the
Christian faith; and they are selling weapons to this country. I think that
would have been a good thing to tell.
Even if it is not down there, I am going to try to
offer some amendment, something at least saying you should never tell the
President who he or she should have, but you should file a report whereby
they should have the knowledge that you have, the Secret Service, and you
represent what is literally one of the finest agencies in the country. I
mean, as I was growing up as a kid, I used to watch the shows, the Secret
Service shows and the FBI—my dad was a policeman. You know that. I
want the law enforcement people to be well-respected, and I think that
would be a good friend.
So I am—whether I am ruled out of order,
tackle me on the Floor, whatever, I am going to offer something to say that
you have an obligation so that no Secret Service director can dodge it,
that you should have an obligation to send in whatever data you may have.
We are not asking you to call the FBI and run background checks. But the
NCIC, we run background checks with regard to people with criminal records
on whether they can buy a weapon. That ought to be given.
Page 298 PREV PAGE TOP OF DOC Segment 2 Of 2
When I look at these things—I mean, when I
ride by the White House, I still feel the sense—the first time I came
to Washington, I remember I got to go in the White House. It was a special
place. It was a kind of place that, you know, I wanted my kids to see. It
was a special place. It still is. But I will tell you, it has been
tarnished in my eyes.
So we think—I think, and I know Mr. Hoyer
and I are good friends and we may disagree, the Secret Service ought to be
giving whatever data it may have to the President of the United States or
the Chief of Staff so that they then can—and then if they decide to
have the Poly Corporation in or a guy out on bail or a drug dealer for a
picture at the Christmas tree, you guys, you men and women, have done your
job. You can go home. You can be proud.
You can't tell them what to do. But I tell you, he
has to know or she has to know. Because, if we don't, we are going to
destroy this.
And I will tell you—the last comment. It is
not a question, because I don't want to put you on the spot and I don't
want to browbeat. I don't think I should have any right to do that. I think
this is beginning to have an impact on the credibility of the government,
and I think it is beginning to make people feel not very, very good about
the Government.
And I think whether it is a Republican
administration or Democratic administration—let me tell you, the
Nixon administration did terrible, terrible, terrible things; and what
happened to President Nixon should have happened to him. But these things
make people lose faith. And when that happens you can't tell the kids to
come to Washington for the school trip, you can't tell them as they pass
the White House to have that thrill, and they will think this town is
turning into a town that is fundamentally—they will
believe—they will begin to believe that this town is fundamentally
corrupt. And if people like that can get in the White House when all the
people who line up for hours and hours and hours and hours and hours have
to wait to get in, we are going to really lose the American people.
Page 299 PREV PAGE TOP OF DOC Segment 2 Of 2
I have no comment, but I would appreciate a letter
in support. I would like to put the letter from Mr. Davis with regard to
the two agents in, and I would appreciate a letter from the Secret Service
in support of the amendment.
[CLERK'S NOTE.—No amendment has yet
been introduced.]
WHITE HOUSE ACCESS
Mr. KOLBE. We did put this in the record,
this form.
Mr. WOLF. I have no further questions.
Mr. KOLBE. Did either of you have any
response or comment. It is not necessary.
Mr. BOWRON. I would only say that the
Secret Service, from an operational standpoint, is not opposed to providing
information to the administration or anyone else, provided that we are
legally within the framework of the regulations that allow us to provide
that information.
Mr. WOLF. Do you think that would be a good
idea?
Mr. BOWRON. That is an easy way for us to
convey that information to the administration, whatever administration may
be in there, keeping in mind that you are providing them with criminal
background histories. Then you have to decide whether or not it is going to
be with respect to ongoing investigations, and a lot of the kinds of
information you made reference to, you are not going to get out of NCIC. It
is only going out of background investigation.
Page 300 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. WOLF. Well, Mr. Director, I would like
to work with you then to craft language, because you have forgotten more
about this than I will ever know. I would like to craft legislation which I
will offer here that deals with that in a responsible way that protects the
Secret Service, but also protects the President of the United States from
these things. I believe, quite frankly, now, they may very well have wished
that this had been in place. I don't know. So if you can have your General
Counsel come by, I would like to craft some legislation that would do
that.
Mr. BOWRON. Yes, sir.
Mr. KOLBE. If I might, starting this last
round here, just one question that I hope ties together the comments of Mr.
Wolf with the comments that Mr. Hoyer made about the Sherill case. Mr. Wolf
has been focusing on the fact that he thinks you should be providing this
information. Mr. Hoyer has been focusing on the fact that you cannot, under
that decision, exclude somebody for these kinds of reasons from the White
House.
It would be possible, however, for the
Administration, for somebody in the White House, the Chief of Staff, or
through a policy, to say, as part of a background check, we want you to
include any prior conviction or something that may show up.
Mr. HOYER. Would the Chairman yield
before——
Mr. KOLBE. Yes.
Page 301 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. HOYER. You recall last year we had
discussions as it related to the White House list—and how much
information they were going to get. My point that I was trying to make is
you could indirectly do exactly what we were so concerned about by simply
saying you were going to invite X to the White House, and the NCIC would
not be a very complete list, so you wouldn't get the information which
Frank is legitimately concerned about. So what I was suggesting is it is a
difficult question for us to resolve, a policy matter, and I think the
Secret Service will carry out whatever policy we want.
Mr. KOLBE. Right.
Mr. HOYER. But the way we said it then was,
an employee would have to sign a release indicating that. I want to be an
employee and I understand under those conditions, as you do when you make
application for employment with the CIA, FBI, Secret Service, whatever,
they are going to do a full background investigation. You may well have
invites do a similar release. In other words, somebody calls me up and
says, Steny, I want you to come down to the White House when the Danish
Ambassador and the Queen are coming. Does Steny Hoyer have a criminal
investigation done on him that is then available to, perhaps, Donald Reagan
who may have been Chief of Staff then? We have been through this in the
prior Filegate investigation. This is a spin-off or similar case to
that.
It is a very difficult proposition. Frank's
concern, I think, is legitimate. The solution to it is so difficult than I
cannot come up with an answer off the top of my head. Legitimately we want
to make sure that Americans have the right to privacy. Leon Panetta or
anyone else who wants me to come down to the White House, or if I want to
come down to the White House, they should not call up and ask Eljay Bowron
to do a criminal investigation on me and give it to Mr. Panetta.
Page 302 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. WOLF. If the gentleman would
yield——
Mr. KOLBE. I am still waiting for the
answer to my question.
WHITE HOUSE ACCESS
Mr. WOLF. You could return a Lexus-Nexus
check. You would have found out about Wang, the guy from Miami, the drug
dealer, and I think you would have found out about Winn. I am not asking
that you go to the FBI and do a background. I think Mr. Hoyer raises some
valid points, but I think there are some things that can be done and I just
ask that you come on by and we can work on this.
Mr. HOYER. Excuse me, Mr.
Chairman——
Mr. KOLBE. That is all right. Back to my
question, can you provide the information, if you have it available, to us,
requested by the House.
Mr. BOWRON. No. Mr. Chairman, I think we
are talking about three different things. If I understand Congressman Wolf,
I think I understand what the Congressman would like us to do, which right
now regulations preclude us from doing NCIC criminal history investigations
that we get as a result of a name check, can't be used for anything other
than law enforcement purposes, and only shared with law enforcement
entities. So that part of it is who has access to that information.
Page 303 PREV PAGE TOP OF DOC Segment 2 Of 2
The answer to that is law enforcement
organizations for law enforcement purposes. Now, if you want an entity,
whether it is the administration or whatever, if you want an entity outside
of law enforcement to have that information, what you are really talking
about for practical purposes is allowing that entity to be able to run
their own NCIC checks. If you want them to be able to do that, they can run
the checks for themselves. They have access to that information.
Mr. KOLBE. So your understanding is the law
now reads, if Mr. Bowles, the Chief of Staff says: ''We have got this
person coming in, I am a little dubious about it. Can you tell me anything
about it.'' You are not able to give him anything other than to say he is
cleared from the standpoint of not being a physical danger to the White
House. You cannot tell him about a criminal history.
Mr. BOWRON. Yes, and I am only smiling
because, Mr. Chairman, I am sitting here saying that is the procedure and
the policy, but I wouldn't suggest that a Secret Service agent who was
asked a question, has never said something along the lines of, you know,
you might want to take another look at this and try and get a bit more
information.
Mr. WOLF. I understand that has been
done.
Mr. BOWRON. Well, I am not going to sit
here and say that has never been done, but in terms of us providing that
information, we would be outside the boundaries of the regulations that
guide and govern our ability to have access to that information, and that
is what we are abiding by.
Page 304 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. KOLBE. I have some other areas of
questions which we have provided you earlier and I think we will just do
all those by submitting them for the record.
Mr. BOWRON. I just wanted to follow up
because the other part of your question on this subject deals with the
difference between providing information from criminal history summaries,
and whether we make a determination as to whether or not that person should
be allowed into the White House Complex. As I understand Congressman Wolf,
you are not suggesting that we should do that. You are just suggesting that
we should provide that information.
Mr. WOLF. Right. I don't think you should
have the right to tell the President who should come in. I think you should
be obligated to tell him what is available.
Mr. BOWRON. And that is a decision to be
made by Congress; in terms of how that information is handled and who
should have that information.
Mr. KOLBE. Well, we certainly thank you for
this testimony and for your assistance here today. I am sorry, yes.
WHITE HOUSE ACCESS
Mr. HOYER. I would like to make an
observation and then, if I might ask you a couple of sort of dull, esoteric
questions after that. I do not believe you or anybody in the Secret Service
needs to have any reticence when asked by Mr. Bowles or any other Chief of
Staff or any other White House person, whether, based upon the information
you have, would you invite this person to the White House. I don't think
there is anything illegal or unethical about your responding honestly to
that question. So A, I would be shocked if it hadn't happened, and B, I
don't see anything wrong with it.
Page 305 PREV PAGE TOP OF DOC Segment 2 Of 2
You do not share the information on which you base
your judgment because you have that information in a specific authorization
and not to be related to others. This is understandable, but I don't think
that in any way constrains your ability to pass along your opinion. So when
Congressman Wolf asks and you answer, A, I think that is absolutely true
and, B, I see nothing wrong with it, from a legal standpoint. I haven't
researched this and it is just off the top of my head. Counsel is being
very stone-faced.
Mr. BOWRON. He does a lot of that.
CLOSING PENNSYLVANIA AVENUE
Mr. HOYER. Pennsylvania Avenue, talking
about access.
Mr. BOWRON. Yes, sir.
Mr. HOYER. What is the status?
Mr. BOWRON. It is closed. Well, the status
is——
Mr. HOYER. What does tomorrow look
like?
Mr. BOWRON. We have temporary measures in
place. More permanent measures cannot be completed until there is a funding
mechanism for the Department of Interior and the National Park Service to
follow through with plans for the development of a permanent national park
that would be in that location.
Page 306 PREV PAGE TOP OF DOC Segment 2 Of 2
There are also some studies that are underway with
respect to environmental issues and those have to be completed before they
can go forward. As far as the Secret Service goes our plans are in place,
the funding is in place, the things that we can do prior to the rest of the
project moving forward, we are moving forward on now. And if part of your
question was related to our view, our view is that closing Pennsylvania
Avenue was a very important step to take. It remains absolutely necessary
and there is increasing evidence everyday that it is necessary.
ROWLEY TRAINING CENTER
Mr. HOYER. Okay. That is what I wanted to
find out. Last question, the most critical question that will be asked at
this hearing. Tell me about how the two buildings are doing in Beltsville,
wherever Beltsville is, I don't know.
Mr. BOWRON. We are underway with the
administration building with a projected completion date of, I think,
approximately a year from this summer. Next fall it should be completed. We
are doing the——
Mr. HOYER. Next fall, fall 1998.
Mr. BASHAM. 1998, Yes.
Mr. BOWRON. We are going through the
preliminary steps of reviewing plans for the classroom building, and that
is probably a year and a half out for completion.
Page 307 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. BASHAM. Right now we are in the process
of doing the architectural and engineering work on the classroom building.
We should have a contract in place for that by the summer, and construction
will begin, probably, the summer of 1998.
Mr. HOYER. Mr. Chairman, I think you are
scheduled to visit the Beltsville facility.
Mr. KOLBE. Yes, well, we haven't
set——
Mr. HOYER. I don't know whether Mr. Wolf
has been out there or not, but I hope that you would invite the other
committee members to visit. It is a very impressive facility and it is
utilized by more than just the Secret Service, because it is in the
Washington Metropolitan area, for relatively quick updates and quick
training and proximate training. It is an outstanding facility and I am
glad you are going to visit.
Mr. KOLBE. Very impressive facility with
very impressive congressional representation, but I would add that the
buildings, you probably know that we are talking about really replacing
existing space that is devoted to that same activity right now. We are
losing a building in Washington, D.C. that provides us with that classroom
space now. It is a forced move out, and we are just replacing that space,
and in the long haul, well, not all that long, the lease saving space for
this building. So it is a cost-effective way to save that space.
Mr. HOYER. Mr. Chairman, the question has
been raised, is the classroom building authorized? Do we need to get that
authorized?
Page 308 PREV PAGE TOP OF DOC Segment 2 Of 2
Mr. BASHAM. Yes, we do.
Mr. HOYER. We do need to get it
authorized?
Mr. BOWRON. Yes.
Mr. KOLBE. Further questions.
Mr. HOYER. No, thank you, Mr. Chairman.
Thank you, Mr. Secretary and Mr. Director.
Mr. KOLBE. Thank you very much for the
testimony. I would invite Members who are here, we have a lot of Secret
Service equipment that is here and if anybody would like to browse through
that, I am sure they would like to show it to us. Thank you very much.
[Questions for the record and selected budget
justification materials follow:]
"The Official Committee record contains additional
material here."
