As you know, I opposed the chairman's legislation to authorize the IGs to determine their own authority. I believe that went too far in over-correcting the constraints implied by the Justice Department memo. At the markup I expressed the hope that some middle ground could be reached, and I have wondered from the time the question arose whether the disagreement was really a matter of semantics and that the answer lie in dialogue and the eventual acceptance of a common vocabulary. I am very pleased that the Department of Justice and the IGs have reached an understanding satisfactory to both. I am pleased that we can now go forward with the business of Government. I am pleased by the development because the Department of Justice and IGs are together a law enforcement team with the contribution and attitude of each teammate critical to success. And finally, I am pleased because I was right.

But let me congratulate both the Department for their willingness to cooperate, and I want to commend the IGs for their helpful role in these discussions, as well as their daily effort to eradicate fraud, waste and abuse in their respective agencies. I have worked on many bills in the Senate, but there are few accomplishments of which I am prouder than the creation of the IGs.

Now let me make one further comment, because I am concerned that we direct the activities of the IG at what I think is their most important function. I agree that it is important to have law enforcement. I agree that it is important to put wrongdoers in jail. But I am concerned that putting somebody in jail does not correct mismanagement, and that is the purpose of the IG. The purpose of the IG is to uncover fraud, waste, and abuse. And I am bothered at times that there seems to be too much emphasis on the criminal enforcement and not enough on the side that I think is the reason we created them, to help management to eliminate mismanagement.

The American people are tired of mismanagement of Federal programs. That includes the S&L program and some of the health programs. We had hearings last week on the working aged and the mismanagement there. That includes the housing program. So I am just speaking for myself, but I want the IGs to know that I think their most critical task is to uncover waste, fraud, mismanagement, and to correct those problems. As I say, simply putting a person in jail, as important as that is and can be, is not going to correct the lack of confidence on the part of the American public in the management of these Federal programs.

If I might, I would just like to read a statement that I think says very much what I am saying. According to Mark H. Moore, a professor at the Kennedy School of Government at Harvard and author of a 1986 book on Inspectors General, "The problem in managing an IG's office is to avoid the temptation to play 'gotcha' by focusing on individual instances of abuse, rather than helping management figure out how to manage the place without fraud, waste, and abuse.'

With that I fully agree. Thank you, Mr. Chairman.

Chairman GLENN. Thank you, Senator Roth. I would take note of an article that was in the papers yesterday in this little "Short Takes" section of the Washington Post-Monday's paper-which is

a little summary writeup of the President's Council on Integrity and Efficiency, their 1989 report on investigative accomplishments by the Inspectors General. And it backs up what Senator Roth was saying about how successful this has been. And it is entitled "Inspectors General Top $726 Million in Fraud Recoveries." And it states-I won't read the whole thing, but "The Government's Inspectors General initiated 5,639 successful prosecutions and recovered $726.9 million as a result of investigations of fraud and abuse during fiscal 1989, a presidential panel reported. The President's Council on Integrity and Efficiency, which coordinates the activities of the watchdogs assigned to Government agencies, said the prosecutions resulted from investigations of contractors, program participants and employees. Some of the investigations were conducted by the Inspectors General independently and some in cooperation with other Federal and nonfederal agencies. The largest number of prosecutions, 1,444, involved the Defense Department. The Department of Health and Human Services was next with 1,278. The report said the money was in the form of recoveries made during investigations, legally ordered fines and penalties, restitutions, and out-of-court settlements. The Defense Department accounted for $472.9 million of the total. The report said that 2,851 disbarments, exclusions and suspensions were taken as a result of fraudulent or abusive practices by those doing business with the Government."

That is a pretty good record. I don't know what the accuracy of such estimates are, but even if they are off by a considerable percentage, that is still a very, very good track record. So we just want to see the cooperation between the different departments of Government_be_such that we all work together on these matters, as Senator Roth outlined also.

Senator Cohen is unable to be with us today and he has a statement for the record to be inserted at this time. [The statement follows:]

OPENING STATEMENT OF SENATOR COHEN

Mr. Chairman, I am pleased that you have called this hearing this morning to examine whether the inspectors general should be given more law enforcement

powers.

Now, more than ever before, the Congress and the public are demanding more aggressive and vigilant oversight of how Federal dollars are being spent and how Federal programs are being operated. The administration's economists now project a Federal budget deficit of over $168 billion for fiscal year 1991, an amount which is well above the $100 billion deficit that was forecast in January. With deficit figures such as these, we cannot afford to tolerate any waste, fraud, or abuse in government programs. We must be sure that every dollar is being spent wisely, and that every program we create is being operated efficiently and effectively.

We continue to be shocked by scandals and revelations of mismanagement and fraud in Government: The savings and loan scandal, which has become a national nightmare and is estimated to cost every man, woman, and child over $2,000; the HUD scandal; and the ill-wind procurement scandal. Each of these cases illustrates that fraud and abuse can cost tremendous amounts, both in Federal dollars, and in the loss of public confidence in its Government. So, now, more than ever, we must be sure that we have strong and consistent oversight, audits, and checks of Government programs on an on-going basis to be sure that the Government is not losing money to waste, fraud and abuse.

The Inspectors General are the cadre of investigators that the Congress has created to be its eyes and ears within individuals agencies. These are the junkyard dogs whom we have commissioned to identify and report back to the heads of the agen

cies and to the congress on fraud, waste and abuse that exists within their agencies and to make recommendations on what should be done to ensure the integrity of Government programs.

Over the past few years, the Congress has passed many reforms to eliminate fraud from Government programs, and especially the procurement process. Without arming the Government investigators with the adequate tools to gather evidence to demosntrate that violations have occurred, however, these laws can never be as effective as we intend them to be.

We will hear testimony today that the Inspectors General do not have all the tools necessary to be truly effective in combating fraud and abuse. The IG's can, for example, subpoena boxes of documents for evidence in a procurement fraud case, for example, but cannot subpoena the testimony that is necessary to help interpret the documents. I find it ironic that testimony can be required by investigators to enforce programs such as the horse protection act, the reasonableness of bridge tolls, and the egg research act, yet this tool is not available to protect against fraud in multimillion defense contracts.

I am also concerned by some of the examples that will be raised by the Inspectors General who will testify today, which indicate that we may be sending out Inspectors General to do difficult, dangerous investigations without adequately arming them with full investigative powers. While I am not yet convinced that all inspectors general should have the right to carry firearms, or to execute search warrants, or make arrests, I believe that it is important for this committee to review whether the nature of the job being performed by the Inspectors General has changed since passage of the original act, and whether the IG's are adequately equipped to perform their task safely and effectively.

I look forward to hearing the testimony today to hear the views of Inspectors General in support of additional powers and to the testimony of the department of justice on why we should not increase the law enforcement powers of the IG's acrossthe-board.

Chairman GLENN. Our first witness this morning is John Keeney, Deputy Assistant Attorney General, Criminal Division, Department of Justice; and John McGinnis, Deputy Assistant Attorney General, Office of Legal Counsel, Department of Justice.

Gentlemen, welcome. Mr. Keeney if you will go ahead and lead off with your statement, we would appreciate it.

TESTIMONY OF JOHN C. KEENEY, DEPUTY ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF JUSTICE, ACCOMPANIED BY JOHN O. MCGINNIS, DEPUTY ASSISTANT ATTORNEY GENERAL, OFFICE OF LEGAL COUNSEL

Mr. KEENEY. Thank you, Mr. Chairman. Mr. Chairman, I have a prepared statement which you have. I would like, if I may, to take 4 or 5 minutes to summarize that statement.

Chairman GLENN. Good. Your entire statement will be included in the record 1 if you desire without objection to that.

Mr. KEENEY. Thank you, sir. I am pleased to be here today, Mr. Chairman, Senator Roth, to present the views of the Department of Justice on some issues involving the law enforcement powers of the Inspector General. Mr. Chairman, you have already discussed one of the items of controversy, one of the items at issue, and as you pointed out, there has been a resolution reached. My colleague, Mr. McGinnis, is here today and he can answer any questions you might have with respect to the letter that went out to resolve this matter.

Let me first address, Mr. Chairman, the question of legislation to give law enforcement authority to the IGs, which you have indicated that you are going to defer, at least for the present. As we dis

1 See p. 37.

cussed in our letter of March 22, 1990, we believe the proliferation of statutory law enforcement authorities throughout the Government is unnecessary and would hamper the criminal justice system. Consequently, we oppose legislative proposals that do not take into account the specific needs of the particular IGs. We believe that the Justice Department, as the only agency responsible for criminal prosecutions, must be able to ensure that investigative priorities are consistent with prosecutive priorities both nationally and locally and that cases investigated have prosecutive merit.

Let me emphasize, Mr. Chairman, that there is an important alternative to statutory law enforcement authority, and that is to deputize agency personnel, such as IG investigators, as Special Deputy United States Marshals. Now, we have been criticized-and I am well aware of the chart here with respect to the time that it takes to process deputation requests, and I would like to discuss that in a little bit of detail later in my statement, Mr. Chairmanbut special deputation allows a person so deputized to carry a firearm, make arrests, execute a search warrant and serve subpoenas. Special deputation is the method by which many of the IGs provide their investigators with the tools they need to do their jobs and respond to the hazards of their business. Some people believe agency employees so deputized obtain greater cooperation from local authorities and private security personnel than they would as an agency employee with statutory law enforcement authority. In my prepared statement I describe the standards for special deputation which the Department of Justice applies. Generally, special deputation will be authorized only when agency personnel are undertaking a hazardous assignment, deputation is necessary to complete the investigation, and no other agency with firearms or arrest authority can carry out the assignment.

Generally, special deputation is for particular cases or classes of cases which are handled by parts of an IG's office. Usually special deputation lasts for a specific time period. They all expire on June 30 of each year and are subject to renewal. Normally, special deputation is on a case-by-case basis, but in the last 6 years the Department has approved ongoing special deputation for components of four (4) agencies, including the Labor Department IG's Office of Labor Racketeering, the Interior Department's IG personnel assigned to investigate programs of the Bureau of Indian Affairs, and the special agents of the Justice Department's own IG. For these agencies there is an ongoing need for special deputation, namely hazardous missions that cannot be performed by other departments or agencies.

Let me briefly describe the powers conferred by special deputation. It empowers those so deputized to carry firearms and make warrantless arrests for any Federal offense committed in their presence, or for any Federal felony on reasonable grounds to believe the arrestee has committed it. Special deputies can execute arrest warrants and can apply for search warrants in situations where the IG personnel so deputized are not already among the persons authorized by the Attorney General to apply for a search warrant. Moreover, Rule 41 of the Federal Rules of Criminal Procedure authorizes civil officers to execute search warrants, so agents of the IGs can execute search warrants as well, and the ability to

carry a firearm gives the deputized investigator the means of executing a search warrant without the assistance of other armed law enforcement personnel.

Finally, there are situations where deputation may expand the investigative jurisdiction of IG personnel to investigate a crime that his or her agency ordinarily could not investigate. This is because Special Deputy Marshals are vested with the investigative authority of the Department of Justice and may assist the Department in any of the large number of investigations Justice Department agents conduct. Mr. Chairman, you have alluded to that earlier with respect to the Interior Department.

As for the number of IG personnel who have been deputized as special marshals during the period June 1, 1989 to June 1, 1990, deputation on a case-by-case basis was requested by the IGs on 113 occasions involving close to 300 individual IG agents; 88 of those requests were approved. These figures differ a little bit from what you have there, Mr. Chairman, because we brought these figures right down to date as of yesterday.

Chairman GLENN. I don't know what the date was, what is that, up to what date? The last calendar year, that was through 1989, your figures then are up to date now, correct?

Mr. KEENEY. Yes, sir. Eighty-eight of those requests were approved, nine were withdrawn by the requesting office, 14 were denied. A majority of the denials were because the IGs did not provide information indicating a specific need for the deputation, such as information relating to hazardous conditions, or did not have the recommendation of the United States Attorney in support of the deputation. A few were not approved because the need for the deputation no longer existed by the time the request was submitted to the Deputy Attorney General's office. As of today, I think there are two requests pending in the Department awaiting further information from the field.

Now, as this chart reflects, the IGs have been concerned about time delays in processing deputation requests, and they have reason for concern. We haven't processed these, Mr. Chairman, as quickly as we should, and we have taken steps to meet that problem. We are working to reduce the time required to process special deputation requests. We have put in place new procedures to ensure that all information pertaining to the deputation is submitted with the initial request, thereby eliminating delays while the information is obtained from the IG or United States Attorneys office.

Now, Mr. Chairman, I might explain how these operate in the Department. They come in to the Criminal Division-they are actually directed to me-and I am assuring you and pledge, Mr. Chairman, that henceforth from the time a deputation request hits my desk it will be out of the Criminal Division, namely going to the Deputy Attorney General for final approval, within 7 days. I think that will take care of a lot of delay situations and will address the concerns which the IGs properly have.

Chairman GLENN. In looking at this, where has the delay occurred? Has it been in getting it through your office in the past, and you are improving that? Or has it been other places in the Department? In other words, will this take care of the basic problem?