FROM THE OFFICE OF PUBLIC AFFAIRS

Mr. Chairman, members of the Committee, I am pleased to be here today to discuss Treasury's role in providing rule-of-law assistance to the 12 Newly Independent States (NIS) of the former Soviet Union. While Treasury has provided advice on drafting money laundering and other legislation in these countries, most of Treasury's rule-of-law assistance has been law enforcement training by our law enforcement bureaus and offices, the U.S. Customs Service, U.S. Secret Service, Bureau of Alcohol, Tobacco and Firearms, Internal Revenue Service - Criminal Investigation (IRS-CI), Federal Law Enforcement Training Center (FLETC), and Financial Crimes Enforcement Network (FinCEN). We also provide training through our law enforcement program in Treasury's Office of Technical Assistance. Treasury and its bureaus work closely with the State and Justice Departments in delivering its training programs.

In providing law enforcement training to a foreign government, Treasury has two main goals. In the shorter term, we work to build relationships with our law enforcement counterparts that enable us to work together on particular matters, improving both nations' ability to protect their citizens from criminal activity. In the longer term, we seek to support broader U.S. government efforts aimed at assisting the foreign government in establishing and maintaining fair and effective law enforcement institutions. In my testimony today, I will briefly outline our efforts to design, coordinate, and evaluate our training programs to meet these goals.

 At the outset, it should be noted that international training is an interagency effort. Treasury and its bureaus provide international law enforcement training as part of a broader plan for a country or region. In determining what type of training to provide a particular country, we work closely with the Departments of State and Justice. Each fiscal year, the Department of State forwards a training solicitation cable with training objectives for law enforcement programs to all overseas posts and law enforcement agencies. Working with embassies, law enforcement agencies, including the Treasury and Justice Departments, and host governments, State prioritizes training requests by objectives and region.

The training provided to selected countries is then determined by the Department of State, International Narcotics and Law Enforcement Affairs (INL), with considerable input from the Departments of Justice and the Treasury. For example, in response to the criminal threat, Treasury law enforcement may propose that Customs and ATF provide training on international firearms trafficking for particular countries in Latin America and the Caribbean Basin. Working as a team, State, Customs and ATF, would then manage and coordinate the training program. State would oversee the funding and logistics for the program. Customs and ATF are responsible for the coordination, preparation and presentation of the courses.

Based on this process, Treasury and its bureaus lend their expertise in a wide variety of law enforcement training to NIS countries both directly and through the International Law Enforcement Academy (Budapest). These efforts include: firearms trafficking training by ATF and Customs; excise tax administration training by ATF; forensics, economic fraud, and counterfeiting training by Secret Service; and training relating to money laundering by IRS-CI, Customs and FinCEN. However, the majority of training courses that we have provided to the NIS have been done by Customs on various types of smuggling, including drug trafficking, weapons of mass destruction, and child pornography.

Operation Blue Orchid, a recent U.S. Customs effort with the Moscow City Police, provides a useful illustration of how this system is intended to work. U.S. Customs, through its CyberSmuggling Center in Fairfax, Virginia, developed leads regarding Internet web sites based in Russia that depicted the sexual and physical abuse of children. Customs provided these leads to its Attaché in Moscow, who identified the Moscow City Police as an agency with responsibility for combating Internet child pornography in Moscow. U.S. Customs and Moscow City Police then worked together to successfully take down two child pornography distribution networks.

At the same time, Customs was developing its recommendations for training to be funded by the State Department. Based on the CyberSmuggling Center's analysis of child pornography internet sites in Russia and its work with the Moscow City Police, Customs recommended and State agreed to fund training for the Moscow City Police at Customs' CyberSmuggling Center on Internet child pornography investigative techniques. The training, which was specifically for the unit within the Moscow City Police that had been working with Customs on child pornography matters, took place in July 2000.

In the meantime, in May 2000, the Moscow City Police requested the assistance of the U.S. Customs Attaché in Moscow on a new child pornography case relating to the Blue Orchid web site, which was allegedly operated by two Russians. Customs' CyberSmuggling Center arranged an undercover buy from the web site, which in December 2000 led the Moscow City Police to one of the Russians, who police detained along with a 13-year-old boy. Interviews of this suspect disclosed that he had transported the minor to Moscow for the purpose of sexual exploitation. Subsequently, Moscow City Police conducted a search of the suspect's apartment and seized 400 videotapes, video duplication equipment, and sales and shipping records. The U.S. Customs Attaché in Moscow assisted in the search and seizure and provided technical assistance in the investigation.

The Russian portion of the case culminated on March 2, 2001, with the arrest of an individual on charges that he molested and sexually abused a fifteen-year-old boy during the making of two videos. Blue Orchid customers would wire cash, then email the distributor with instructions on where to send the videotape. Prices ranged from $200-$300 per video. Records seized from the distributors indicate videotapes were shipped worldwide, but most were sent to the United States.

As a result of the December 2000 search, the U.S. Customs Attaché in Moscow forwarded information to U.S. Customs field offices in the United States, identifying a number of suspects who allegedly had ordered child pornography from the Blue Orchid web site. Additionally, approximately 50 leads were sent to U.S. Customs Attaché offices around the world. Over 20 cases are ongoing within the U.S. as a result of leads generated from Operation Blue Orchid.

Blue Orchid demonstrates the potential benefits of working with and supporting Russian authorities. Through its relationship with the Moscow City Police, Customs identified the unit responsible for investigating child pornography on the Internet. As part of this working relationship, we provided training and technical assistance to the relevant Moscow City Police officers, improving their ability to combat child pornography on the Internet. This training and cooperation enabled the Moscow City Policy to take down the Blue Orchid Web site, which was shipping child pornography to the United States. Moreover, information provided by the Moscow City Police enabled U.S. Customs to pursue violations of U.S. law.

While we are pleased when we have success on a particular case, our goal is to sustain the progress we make and improve the overall functioning of the foreign law enforcement institutions. The primary way we seek to accomplish this is through our coordination with other U.S. agencies, particularly the Departments of State and Justice, and the host nation. We support the Department of State's efforts to increase the sustainability of the international training programs. In addition to working with State, we seek to make sure our own efforts support improvements in foreign law enforcement institutions that are sustainable.

Our training courses, as well as our Attachés stationed overseas, enable us to develop and improve our contacts with foreign law enforcement officers and agencies. These contacts provide us with a better understanding of the crime problems in other countries and the local law enforcement environment. We use this information to help us determine the training needs of a particular country as well as the likelihood training will be effective. In Blue Orchid, for example, the Customs Attaché in Moscow provided an important link between Customs' CyberSmuggling Center and the Moscow City Police. We believe that the relationship Customs developed with the Moscow City Police in working Blue Orchid, including the training and technical assistance that Customs provided, will lead to additional joint investigations and continued efforts by the Moscow City Police to combat Internet child pornography.

As successful as Blue Orchid was, however, we recognize that it is not realistic for us to train every law enforcement officer in Russia and the other NIS countries. We use train-the-trainer courses to help spread our expertise throughout an organization. For example, Customs has provided train-the-trainer workshops on narcotics interdiction to law enforcement from Russia, Turkmenistan, Kyrgystan, and Uzbekistan. The purpose of this training is to create a cadre of instructors within a foreign customs or border control agency who can then teach others -- both in a classroom and on the job -- about narcotics interdiction techniques. To try to maximize effectiveness, Customs limits the course to 12 participants who are or plan to become trainers.

Of course, not all of our efforts have the same result as Blue Orchid. Setbacks and obstacles are inevitable when dealing with countries still working to build their law enforcement institutions. Training is not always institutionalized as quickly or as effectively as we might like. We have supported the State Department's efforts to improve the methods of evaluating training to ensure that we are as effective as possible. To this end, each law enforcement attendee prepares class evaluations surveys, which are compiled into After Action Reports. These Reports, which are given to the law enforcement agency running the training, provide the participants' views on the most beneficial aspects of the training, possible improvements, their future use of what was learned, and their intent to share the information learned with coworkers. Moreover, a rigorous interagency course review has been developed to evaluate training conducted through the International Law Enforcement Academies. In addition to these formal evaluations, we also look at the number of subsequent referrals of information and/or requests for coordination of an investigation from foreign countries to U.S. law enforcement.

We continue to believe that international law enforcement training serves U.S. interests by enabling U.S. law enforcement to improve its relationships with overseas counterparts to better protect American citizens from international crime, by assisting foreign governments in developing effective law enforcement agencies to stop criminal activity before it reaches the U.S., and by supporting the creation of stable, democratic societies. We recognize, however, that such training must be done in a coordinated way that is designed to be sustainable over the long term. In recent years, we have worked closely with the State and Justice Departments to improve our international training efforts and we are committed to continuing the progress that has been made.

I want to thank the Committee for its interest in this important issue and we look forward to working with you to improve our law enforcement training in the NIS countries. Thank you.