Thank you Mr. Chairman, Senator Dorgan, and members of the Subcommittee. I welcome this opportunity to appear before the Subcommittee and present to you ATF’s goals for fiscal year 2001 and to report on the results of your previous investments in ATF.

I am pleased to introduce Mr. Patrick D. Hynes the newly appointed Deputy Director of ATF. Mr. Hynes brings with him 30 years of Federal law enforcement experience, 28 years as a law enforcement officer with ATF.

Also with me today are my other executive staff members:

Mr. William Earle, Assistant Director for Management and Chief Financial Officer; Mr. Andrew Vita, Assistant Director for Field Operations; and Mr. Jimmy Wooten, Assistant Director for Firearms, Explosives and Arson; Mr. Arthur Libertucci, Assistant Director for Alcohol and Tobacco; Mr. John Manfreda, Chief Counsel; Ms. Gale Rossides, Assistant Director for Training and Professional Development; Mr. Patrick Schambach, Assistant Director for Science and Technology and Chief Information Officer; Mr. David Benton, Assistant Director for Liaison and Public Information; Mr. Richard Hankinson, Assistant Director for Inspections; Mr. Lewis Raden, Executive Assistant for Legislative Affairs; Ms. Toby Bishop, Executive Assistant for Equal Opportunity; and Mr. Wayne Miller, Chief, Strategic Planning Office.

While I have the privilege of recently being appointed ATF’s fifth Director, I would like to express my appreciation to my predecessor, John Magaw, for working with this committee toward the common goal of strengthening ATF’s infrastructure, which was essential for ATF to continue to function as a highly professional and effective law enforcement organization. In my 26 years of service to the Bureau, I have had the opportunity to witness our history, participate in the formulation of our strategic vision and assist in moving the Bureau forward into a new century.

I thank the committee for their continued support for a new headquarters facility to safely house ATF’s employees. The all too real threat to their safety was once again uncovered this past year when an individual chose to mail three explosive devices to two ATF facilities and the White House. Fortunately, one of the devices prematurely detonated inside a mail trailer and the remaining devices were safely disarmed upon discovery. The individual responsible for these acts was apprehended by ATF and local authorities, pled guilty, and has been sentenced to life plus 270 years incarceration.

I would also like to thank the committee for the support provided to my predecessor over the last several fiscal years. The foresight of this committee and the strategic investments you have provided have allowed the Bureau to strengthen its infrastructure to adequately support all program activities. Through calculated investments in investigative equipment, training and information technology, this committee sought to revitalize and restore ATF to a balanced and stable position. I am pleased to report to you that your investments have been well and prudently spent. For the fifth consecutive year, the Office of the Inspector General’s independent contractor (PricewaterhouseCoopers LLP) has issued ATF its highest audit opinion of "unqualified," with no material weaknesses. A copy of our Accountability Report will be delivered to each of your offices in the next few weeks.

Given the committee’s long investments in ATF, there are accompanying expectations. Expectations that a well-equipped, well-trained, and well-disciplined organization will be more effective. Expectations that a fundamentally sound organization with proven results is capable of more. Expectations that, having restored the "core" of an organization, you have positioned that same organization to assume more and varied duties. This committee has a right to expect a return. As a result of your investments, ATF is positioned to deliver.

As ATF’s Director, I am pleased to present to you a requested level of resources that builds upon the foundation you have firmly established. This level of resources focuses on the personnel and technology needed to address the varied and critically important responsibilities that have increased over the past decade. In keeping with your guidance, we have made our house sound. An integral component of the growth will be recruitment of personnel to accommodate the program expansions you have entrusted to us. The recruitment of additional personnel in fiscal year 2000 and fiscal year 2001 will help ensure the achievement of our shared vision of working for a sound and safe America through innovation and partnership.

ATF’s fiscal year 2001 Salary and Expense (S&E) request justifies $755,903,000 in direct budget authority and 4,671 full-time equivalent (FTE). Our request accommodates the realignment of the Violent Crime Reduction Trust Fund (VCRTF) programs into our S&E appropriation base and represents an increase of $151,330,000, or 25% over the total fiscal year 2000 enacted level of $604,573,000.

The majority of this increase is for expansion of proven investigative and regulatory strategies designed to maximize effective enforcement of existing laws and regulations. An additional $25,834,000 is required for mandatory payroll costs and other inflation.

ATF has a unique combination of law enforcement and regulatory responsibilities. As Director, I will continue to focus on our core mission and vision of "Working for a Sound and Safer America...Through Innovation and Partnership." ATF has developed sound programmatic initiatives, based on existing laws and regulations, to respond to crime and violent acts that threaten public safety and instill fear in all Americans. Our vision helps us chart the course to best serve the public and achieve new levels of effectiveness and teamwork. I would now like to highlight some of the programs that support our efforts on behalf of the American public.

ATF is requesting $41,322,000 and 193 FTE for expansion of the Integrated Violence Reduction Strategy (IVRS) and will focus on several core components of firearms enforcement aimed at reducing the illegal possession and use of firearms.

IVRS is a national enforcement strategy that integrates several core concepts which are adapted and applied in varying formulas to address the specific law enforcement needs of a community. For example, Project Exile in Richmond, Virginia, and Project Ceasefire in Boston, Massachusetts, are two different, yet equally successful examples of IVRS. The core elements of IVRS include reducing the illegal supply of firearms to criminals; specific enforcement projects directed at criminals who use and possess firearms; and the identification and prosecution of prohibited persons who attempt to acquire firearms. All components of IVRS use state-of-the-art information processing to assist ATF and our State, local and Federal law enforcement partners in identifying those engaged in the criminal misuse and illegal acquisition of firearms. ATF is committed to working with law enforcement agencies and prosecutors to ensure the continued success of IVRS. Our experience in the fight against armed violence has demonstrated that an integrated approach is the right approach. Prevention, intervention and prosecution cannot succeed as segregated strategies. They must be combined to meet the challenge of effectively in reducing the criminal use of firearms in America.

Project EXILE and Project Ceasefire have been effective programs for addressing firearms violence in certain cities. However, the requirements and resources of each locality need to be evaluated individually. One of the purposes of the Integrated Violence Reduction Strategy is to allow U.S. Attorneys and ATF managers to collectively identify their unique crime problems and formulate appropriate actions to address them. Through the Violent Crime Coordinator, Armed Violent Criminal Apprehension (formerly Achilles) Programs, as well as through the Firearms Trafficking Program, ATF investigates and facilitates the prosecution of firearms violators. These programs are components of the Integrated Violence Reduction Strategy.

In fiscal year 2000, the Federal Bureau of Investigation’s (FBI) National Instant Criminal Background Check System (NICS) is projecting that over 86,000 firearms purchase denials will be forwarded for ATF to evaluate and act upon. With the fiscal year 2001 budget request, ATF will devote additional field resources to investigate prohibited persons who attempt to purchase firearms, as well as conduct more in-depth reviews of licensee records to ensure that they are conforming to the requirements of the Brady Act. To date, ATF has made more than 13,000 investigative referrals for field review on potential criminal violations involving domestic violence offenses or those who are subject to a restraining order. Additionally, more than 7,000 potential criminal violations involving violent felons or serious drug offenders have been referred to the field for investigation.

ATF's objective is to maximize voluntary compliance in the firearms industry through education, partnerships, and a compliance inspection program that uses ATF’s inspection resources to focus on licensees having multiple crime gun traces and/or other indicators of potential firearms trafficking. The National Licensing Center processes and issues all ATF firearm licenses. Under ATF's current application program, all original applications are sent to the field offices for investigation prior to issuance. Renewal applications are sent to the field offices upon request.

In fiscal year 2001, we are requesting $19,078,000 and 113 FTE for expansion of the YCGII Program. This very successful program complements IVRS by using a multi-faceted approach to break the chain of illegal gun supply to youths and juveniles and reduce youth violence. ATF will continue to assist comprehensive crime gun tracing in participating cities, provide rapid high volume crime gun tracing and crime gun market analysis through the National Tracing Center (NTC), and train ATF, State, and local law enforcement. ATF is proposing to expand this program to an additional 12 cities in fiscal year 2001, bringing the total of YCGII cities to 50. This reinforces the Administration’s commitment to expand to 75 cities within four years.

ATF is requesting $9,990,000 and 10 FTE for Comprehensive Crime Gun Tracing that will provide nationwide comprehensive tracing capability as well as faster trace results. The National Tracing Center (NTC) provides State and local agencies with information on crime guns to support its law enforcement efforts. The NTC provides valuable investigative leads to assist in solving crimes committed with firearms, and identifies those persons responsible for supplying crime guns to criminals. The NTC maintains the record of all crime guns traced by ATF, firearms stolen from firearms dealers, and records of multiple sales of handguns. The Firearms Tracing System (FTS) provides data on firearms which is used by ATF investigators to identify illegal firearms trafficking. The funds requested in the fiscal year 2001 budget will assist 250 State and local agencies in building tracing capability, and will allow ATF to complete traces and respond to requests more rapidly, making information available in real time for criminal investigations.

The NTC is also the national repository for Out of Business Records maintained on approximately 400,000,000 frames of microfilm. These records are retrievable by the Federal Firearms Dealer Identification Number. An effort has commenced to index the firearms by serial number to enhance the retrieval process. The NTC plans to digitally image the out of business records and use an automated process to index the serial numbers. Currently 10% of traces are successfully completed through out of business records and 25% of all traces utilize these records.

Ballistics Identification

ATF is also requesting $23,361,000 and 10 FTE for Expanded Ballistics Identification. This national system will allow crimes committed with the same firearm to be connected through ballistics imaging. This information will be joined nationally through the Department of Justice’s Criminal Justice Information System, Wide Area Network. On December 2, 1999, ATF and the FBI executed a memorandum of understanding (MOU) that will take maximum advantage of each agency’s strengths and resources. The MOU established a single, jointly-operated, ballistics identification program in which ATF will manage the field deployment of ballistics imaging equipment supported by the FBI’s management of interagency networking operations. Under the MOU, FBI’s DRUGFIRE units will be replaced with ATF’s IBIS or next generation "unified systems" developed from the best features of both IBIS and DRUGFIRE.

ATF is also seeking $5,521,000 and 44 FTE to implement the second phase of the Taxpayer Relief Act of 1997, (Tobacco Compliance law). Increased revenue will be derived from the additional taxes imposed on tobacco products at the higher tax rates. As enacted, this law requires two floor stocks tax increases; one that took effect January 1, 2000, and the second, which is effective January 1, 2002. The enacted legislation also requires a new permit system for importers of tobacco products.

The funding requested in fiscal year 2001 would provide the necessary resources to implement the legislation as enacted.

ATF is also seeking $6,026,000 for above standard costs vital to the completion, move in, operation, and maintenance of our new National Laboratory facility. The new facility will include a replacement laboratory building for the existing National Laboratory. The new National Laboratory’s Alcohol and Tobacco Laboratory will support ATF’s industry regulation and product taxation functions. The Forensic Science Laboratory will provide evidentiary analysis for ATF criminal investigations as well as for other State, local and Federal law enforcement agencies. The new Fire Research Laboratory is the only fire research and forensic laboratory in the world dedicated to criminal investigations. The Fire Research Laboratory will dramatically expand ATF’s ability to support fire investigators on specific cases as well as improve fire science knowledge as it relates to fire investigations.

Clearly, a budget request that seeks to add 488 FTE and a 25% increase in funding in a single year is ambitious, and perhaps to some, even presumptuous. It is however, I believe, the logical and expected outcome of this committee’s investments in ATF, and this committee’s efforts to position ATF to grow to meet the mandates put before us.

Before I ask this committee to make this additional investment in ATF, it is my duty and responsibility to demonstrate to you that your prior investments have in fact yielded the expected outcomes.

Year after year, ATF works to make America a safer place for its citizens by fighting violent crime. ATF has been entrusted with the enforcement of the Federal firearms and explosives laws, as well as the regulation of legal commerce in the commodities produced by these industries. This dual duty places ATF at the forefront of efforts to reduce violent crime through both regulatory and enforcement initiatives.

As a result of the activities listed below, ATF referred 5,131 criminal cases recommending 6,804 defendants for prosecution in fiscal year 1999. This level of activity represents an increase of 1,041 additional criminal cases having been referred for prosecution over fiscal year 1998 levels. Fiscal year 1999 is the second consecutive year that the number of cases ATF has referred for prosecution has increased. In fiscal year 1999, the increase was 25% over the preceding year. Over this same time period, ATF special agent staffing only increased by six percent.

Between November 30, 1998, (the effective date of the National Instant Criminal Background Check System) and February 2, 2000, ATF has received over 104,000 reports of denied firearms purchase applications from the FBI’s NICS unit regarding persons identified as prohibited from firearms possession. Nearly 25,000 of those denials have resulted in referrals to ATF field offices for further investigation. As a result of NICS referrals, ATF has made 100 arrests and submitted 437 case reports charging 465 defendants with violations of the Federal firearms laws. Over 14,000 referrals are under evaluation for possible investigation.

In an additional 4,976 instances, firearms were delivered to persons identified by the FBI after the three-day waiting period as prohibited from possession. In each of these 4,976 cases, ATF conducted an immediate investigation to determine if, in fact, the individual receiving the firearm was legally prohibited from such receipt and possession. Where it has been determined that an individual is legally prohibited from possession, immediate actions have been undertaken to secure the firearm from the individual and initiate prosecution where warranted.

ATF published regulations implementing the permanent provisions of the Brady Handgun Violence Prevention Act by requiring entities licensed as Federal firearms importers, manufacturers, and dealers, with some exceptions, to contact the NICS before transferring any firearm to an unlicensed individual.

To date, ATF has made more than 13,000 investigative referrals to our field offices on potential violations of domestic violence offenses or of persons who are subject to a restraining order. Additionally, more than 7,000 potential criminal violations involving either violent felons or serious drug offenders have been referred to the field.

ATF's objective is to maximize voluntary compliance in the firearms industry through education, partnerships, and a compliance inspection program that focuses on licensees with trace indicators of potential firearms trafficking. The National Licensing Center processes and issues all ATF firearm licenses. Under ATF's current application program, all original applications are sent to the field offices prior to issuance.

As of February 1, 2000, there are 104,070 Federal firearms licensees in this Nation, a substantial reduction from the nearly 288,000 licensees authorized to conduct commerce in firearms prior to the passage of the Brady Law. In an effort to ensure that firearms industry members fully understand the regulatory requirements of maintaining their license, we conducted 155 seminars for licensees in fiscal year 1999. ATF also inspected 11,053 licensees, resulting in the detection of 3,860 violations of regulations, and 2,426 referrals to ATF Special Agents and other Federal, State, and local law enforcement agencies for the investigation of possible criminal conduct.

ATF’s National Firearms Act Branch maintains the National Firearms Registration and Transfer Record (NFRTR), which is the central registry of NFA firearms, such as machineguns, short-barreled rifles, shotguns, silencers, and destructive devices. In fiscal year 1999, the NFA Branch processed 306,515 registrations of NFA firearms. ATF searches the NFRTR in support of criminal investigations and regulatory enforcement inspections. The NFA Branch is in the process of imaging and indexing all NFA records back to 1934 to afford ATF the highest possible accuracy of the NFRTR.

Our Firearms and Explosives Imports Branch (FEIB) is responsible for processing all applications for permits to import firearms, ammunition, and other defense articles into the United States, and for maintaining the registry of commercial importers of such articles. In fiscal year 1999, FEIB received 12,776 import permit applications, and 300 registration applications.

With the licensee population over 100,000, it is not currently practical to perform a regular cycle of inspections of the entire licensee population. Fortunately, the majority of dealers rarely have their guns end up at a crime scene, and only a small percentage of the population is involved in criminal activity. It is therefore logical to select for inspection those dealers most likely to be a source of crime guns – intentionally or not.

In October 1998, ATF implemented a "focused" inspection policy, which requires field division personnel to select Federal firearms licensees (FFLs) for inspection based on information developed by the Crime Gun Analysis Branch of the NTC. This valuable information provides indicators of potential firearms trafficking associated with particular FFLs. These include such things as the number of crime guns traced to an FFL in a 1-year timeframe, time to crime, number of firearms reported stolen, and number of unsuccessful traces associated with a particular FFL. ATF then selects FFLs for inspection who have a high rate of the indicators associated with their businesses. In order to achieve our goal of reducing violent crime by denying criminals access to firearms, ATF needs to focus its limited inspector resources toward inspecting these FFLs.

ATF published a final rule in the Federal Register to amend regulations relating to the Federal excise tax imposed on manufacturers of firearms and ammunition to clarify which parts and accessories are to be included in the sale price when calculating the tax on firearms.

ATF published in the Federal Register a notice proposing to amend the regulations to prescribe minimum height and depth requirements for identifying marks placed on firearms by licensed importers and licensed manufacturers. If adopted, the regulations will facilitate ATF's ability to trace the origins of firearms used in crime.

In fiscal year 1999, nearly 168,000 projectiles and casings were entered into the IBIS data bases nationwide (an 81% increase over 1998) resulting in 1,150 matches of ballistic evidence between multiple crime scenes (a 56% increase over 1998.) This technology has cut the process of comparing and evaluating ballistic evidence from days to minutes and has provided criminal investigative leads which were previously unavailable to the law enforcement community. ATF and the FBI entered into an agreement in May 1997 that created the National Integrated Ballistics Information Network (NIBIN) Board. The Board’s goal is to unify Federal efforts to deploy ballistics technology. The NIBIN Board determined that the best path to creating a unified national ballistics network would be to use a single ballistics imaging system. The NIBIN Board facilitated the execution of a memorandum of understanding (MOU) between ATF and the FBI regarding the NIBIN Program. Under the terms of the MOU, ATF will assume responsibility for crime gun operations. These include hardware and software development, installation, and maintenance; image database management; training; quality assurance; and user protocols. The FBI will assume responsibility for networking operations and the development and deployment of ancillary databases for firearms examiners.

In an effort to merge the programs and allow for the seamless exchange of information, a decision was made to adopt the single IBIS technology; therefore, ATF and the FBI executed the MOU spelling out each agency’s responsibilities under the NIBIN Program. This agreement ensures sharing of information and increases the potential to identify armed violent criminals.

This past year was significant in many ways to the National Tracing Center. The number of crime gun traces topped the 200,000 mark. Additional cities became partners in the YCGII, which has the use of crime gun information as its cornerstone. Some of these enhancements to further improve upon the quality of this unique ATF service included: improvements in response time through the new Firearms Tracing System (FTS) platform; development of the "Web Query" for access to the FTS by our agents and inspectors which provides our partners in law enforcement the tools to improve their capabilities through the Electronic Tracing Submission System (ETSS); working with the firearms industry to improve firearms tracing through Access 2000; and lastly, ATF’s "OnLine LEAD." This investigative tool uses all the information in the NTC databases to assist our special agents in discerning and investigating those who traffic illegally in firearms.

In addition, ATF and its technology have been called upon to once again support the United Nations’ War Crimes Tribunals investigating alleged death squads in Bosnia-Herzegovina. In December 1999, ATF sent a team of experts to Bosnia to test-fire and recover ballistic evidence from over 1,500 firearms seized from the Bosnian-Serb Army. These weapons are suspected of being used in the 1995 atrocities in Srebrenica and other areas of eastern Bosnia. ATF laboratories are currently comparing the test fire evidence with over 3,000 pieces of ballistic evidence recovered from primary and secondary gravesites. At the request of the Tribunal, over 4,500 pieces of ballistic evidence recovered from Bosnia are currently being compared and evaluated at the ATF laboratories.

Elsewhere, ATF participation is essential in a variety of international forums examining methods of combating illegal transnational firearms trafficking. ATF provides expert technical advice relating to the Federal firearms laws and the benefit of practical experience associated with our criminal enforcement responsibilities. U.S. foreign policy decision-makers rely on ATF’s involvement and input in formulating sound decisions, which ensure that U.S. equities and concerns in this arena are protected.

I would like to point out to the Committee that while ATF has had very significant accomplishments in fighting firearms violence, ATF has also had equally significant successes in addressing violent crime in the areas of arson and explosives. For example, in fiscal year 1999, ATF certified fire investigators responded to an estimated 2,200 fires across the country. These highly trained special agents respond to incidents at all times of the day and night to make the initial determination of potential criminal acts warranting further investigation. ATF inspectors carried a considerable workload in helping to ensure the lawful use of explosives materials. They completed more than 7,294 inspections of the 10,662 explosives licensees. These inspections disclosed and resulted in correction of more than 2,831 violations, 1,431 of which presented unsafe conditions. There were also 182 criminal referrals made as a result of these inspections.

In fiscal year 1999, ATF responded to all known fires and explosions at houses of worship nationwide, 322 responses in all. Of those incidents, 132 fires and 12 bombings were determined through investigation to be caused by deliberate criminal conduct. I am proud to report to the committee that ATF’s efforts in the investigation of fires at houses of worship have resulted in 35% of these cases being solved, a solution rate more than double the national average for the crime of arson.

Our National Response Teams were activated a record 42 times in fiscal year 1999 to investigate major fire and explosives incidents. In 55% of these activations, criminal conduct was determined to be the cause of the incident. Our National Response Teams cleared 46% of these incidents within the fiscal year, a solution rate that is two and one half times higher than the national average for the crime of arson. Of the incidents that occurred in fiscal year 1999, 57 percent have been cleared by arrest to date and we expect this percentage to increase as investigations continue. Due to the complexity of arson investigations, it often takes several years to complete the investigation from the time of incident.

ATF and the U.S. Fire Administration (USFA) are teaming together to redesign and deploy a web-based system managed by the USFA, entitled "Fire and Explosion Investigation Management System," that will include information on fires and fire-related explosives incidents that occur nationwide for use by the fire/explosion investigation community.

ATF partnered with the National Association of State Fire Marshals and developed a discussion website for use strictly by individuals at the Federal, State, and local levels who have the statutory authority to investigate and prosecute fire and arson incidents. This website facilitates communication between the investigators.

ATF finalized the development of InterFIRE, a virtual reality, CD-ROM-based training tool that is intended to establish "best practices" in fire investigation and bring fire investigators to a "base level" of knowledge. Distribution has begun.

Through its explosives and accelerant detection canine training program ATF provides an investigative tool for use in explosives, firearms, and fire investigations, National Response Team investigations, public security, and the investigative needs of outside agencies. ATF's canine training facility in Front Royal, Virginia, is now open, and the kennels are in the final stages of construction. Under a training arrangement with the U.S. Department of State, ATF also trains explosives detection canines for foreign countries to be used overseas in the war against terrorism, and to protect American travelers abroad against terrorism. Through fiscal year 1999, ATF has trained and certified 68 accelerant-detecting canines for State and local agencies, and has trained and certified 190 explosives detection canine teams for deployment in 10 countries worldwide. Additionally, since 1998, ATF has trained 10 explosives detection canine teams for other Federal, State, and local agencies including the FBI, the Central Intelligence Agency, and the Internal Revenue Service.

In fiscal year 1999, ATF became aware of a need to develop an explosives destruction and disposal training program for State and local bomb technicians. This training program will be designed and implemented to cover areas not currently addressed by any other agency on a national scale. The first scheduled school is slated for March 2000.

In pursuit of the prevention of criminal misuse of explosives, ATF is strengthening its cadre of explosives technologists, who possess unique capabilities in explosives and bomb disposal. There are 18 technologists currently on board.

In fiscal year 1999, ATF produced a special video entitled "A Mother’s Tears" in response to demand from State and local police departments and school systems for an explosives safety program for juveniles. This video was given the "Videographer’s Award of Distinction" for instructional programming.

I would like to point out that ATF’s resources are at the core of this country’s response to terrorism. ATF’s firearms, explosives, and arson expertise directly addresses the principal tools of the "would be" terrorist. ATF plays an important role in the Federal Government’s fight against terrorism and contributes to this fight through our day-to-day investigative work. ATF’s employees hone their investigative skills in these areas on a daily basis and are uniquely qualified and equipped to immediately respond to arson and explosives crimes which may later be deemed acts of terrorism.

"ATF’s Explosives Study Group (ESG) is examining the tagging of explosive materials for purposes of detection and identification; the feasibility and practicability of rendering common chemicals used to manufacture explosive materials inert; the feasibility and practicability of imposing controls on certain precursor chemicals used to manufacture explosives; State licensing requirements for the purchase and use of commercial high explosives; and the possible use of prevention (explosives detection) technologies", as stated in Section 732 of the Antiterrorism and Effective Death Penalty Act of 1996, as amended by the Omnibus Consolidated Appropriations Act for fiscal year 1997.

The ESG issued its first report on the Study (1997 Progress Report) to Congress in March 1998. In November 1999, ATF’s second Progress Report on the Study of Marking, Rendering Inert, and Licensing of Explosive Materials, was submitted to Congress.

In February 1998, the ESG completed its research into, and analysis of, the Swiss identification tagging program, and reported in its second Progress Report that the program does not provide an adequate model for implementation in the U.S.

In early 1999, the ESG completed its analysis of the results of the ATF-commissioned study entitled "Study of Imposing Controls on, or Rendering Inert, Fertilizer Chemicals Used to Manufacture Explosive Materials," completed by the International Fertilizer Development Center (IFDC) in March 1997. The ESG concurs with the IFDC’s conclusions concerning the current unfeasibility and potentially devastating economic and agronomic effects of rendering ammonium nitrate (AN) fertilizer inert.

The ESG has continued to communicate and work with other Federal agencies such as the Federal Aviation Administration, the U.S. Customs Service, the Department of Justice, and the Department of Energy. These efforts are aimed at facilitating a coordinated effort to identify and direct resources toward the most promising technologies, for both the detection of additives and the detection of explosives and explosive materials themselves, which may be used in a broad range of environments.

ATF continues to honor its obligation to fairly and efficiently collect over 12 billion dollars in revenue in accordance with current laws. Our efforts have achieved an extraordinarily high level of voluntary compliance within the industries we regulate. In fiscal year 1999, ATF collected the following revenue: $11,900,000,000 in alcohol and tobacco excise taxes; $167,000,000 in firearms excise taxes; and $105,000,000 in special occupational taxes; and $6,000,000 in licensing and transfer fees for a total exceeding $12,100,000,000.

ATF works with Federal, State, local and Foreign Governments in an effort to effectively collect revenue and regulate the industries subject to the Bureau’s authority.

ATF redirected its approach to revenue collection through a program to identify taxpayers that pose high risk to the revenue due using a factoring system to rate taxpayers. In addition, a statistical sampling process was established to identify taxpayers in order to validate the criteria used. For these programs, new internal control documents were developed to pinpoint high-risk activities and weaknesses for inspection.

These evaluations were developed for the distilled spirits, wine, malt beverage, tobacco products, and firearms manufacturing industries.

In fiscal year 1999, ATF opened 106 alcohol and tobacco diversion investigations. Seizures of alcohol and tobacco monies and real property totaled over $1,400,000. ATF was also one of the lead agencies in a Federal investigation that resulted in a payment of $10,000,000 to the Treasury Asset Forfeiture Fund from a company wholly-owned by a major U.S. cigarette manufacturer for its involvement in illegally diverting cigarettes to Canada. Diversion investigations in fiscal year 1999 also resulted in 49 defendants being recommended for prosecution, and several members of organized crime groups successfully prosecuted for alcohol and tobacco related criminal activity.

ATF implemented the provisions of the Balanced Budget Act of 1997, including issuing regulations restricting the importation of previously exported tobacco products and cigarette papers and tubes.

ATF received nearly 68,000 alcohol beverage label applications in fiscal year 1999 of which 15 percent were denied approval due to non-compliance. On average, the turnaround time for an application from time of receipt to completion of processing was 8 days.

In fiscal year 1999 representatives from the Treasury Department and ATF met with industry members concerned about direct shipment issues. Discussion focused on the accessibility of youth alcohol purchases on the Internet, issues surrounding State law implications, small winery market access, and interstate beverage alcohol shipments.

We also met with representatives from the alcohol beverage industry to initiate dialogues about regulatory practices for alcohol and youth. Other meetings were scheduled with State authorities, other Federal agencies, public advocacy groups, and public health agencies.

ATF processed petitions and issued notices of proposed rulemaking resulting in the establishment of five new viticultural areas: Applegate Valley in Oregon, and Diamond Mountain, San Francisco Bay, Chiles Valley District, and Yountville, in California.

As we enter the new millennium, ATF has worked diligently to keep pace with an extraordinary amount of technological change. In December 1999, ATF broke ground for its new National Laboratory Center in Beltsville, Maryland. The new National Laboratory Center will give ATF the kind of facility it needs to support firearms, explosives, and fire investigations, as well as conduct testing that insures the integrity of regulated alcohol and tobacco products.

Also at the new facility is a one-of-a-kind fire research center located along side the Forensic Science Laboratory and the Alcohol & Tobacco Laboratory. The Fire Research Laboratory is a new addition to ATF’s technical expertise that will directly support fire investigations and complement ATF’s on-going fire investigation initiatives such as the Interfire Fire Investigation Training CD-ROM, the Certified Fire Investigation Programs, and the Accelerant Detection Canine Programs. It is the first laboratory in the world solely dedicated to supporting fire investigations and the resolution of fire related crimes, and advancing the science of fire evidence analysis. For the first time, investigators will have a resource that can help them unravel the difficult problems associated with fire ignition and spread. ATF has established a memorandum of understanding with the National Institute of Standards and Technology (NIST) to join forces on research into the measurement and prediction of fire and its effects, to share training and technology, and to conduct joint research and technical assistance tasks on matters of fire science.

ATF initiated a National Firearm Examiner Academy to help develop a national cadre of forensic examiners to conduct firearms examinations. Historically, this expertise has been developed through apprenticeship; often taking over two years to develop the skills needed to do the job. As a result, there is a significant shortage of skilled firearm examiners in most State and local forensic laboratories. The pilot course will be completed in April. The 13-week program fully trains the students in the skills needed to productively begin case examinations. The profession’s Association of Firearms and Toolmark Examiners (AFTE) endorses the training program and the Nation's crime laboratory directors have expressed overwhelming support for the program.

The National Field Office Case Information System (N-FOCIS), comprised of N-Force and N-Spect, developed specifically for the ATF special agents and inspectors, respectively, assists ATF employees in gathering, reporting, and accessing investigative and inspection data. One major goal of N-FOCIS is to reduce the time special agents and inspectors spend on administrative functions.

A simple, intuitive user interface, N-FOCIS employs a familiar file structure to organize data into logical categories (e.g., events, property, persons), and the ability to share case information in a secure environment.

ATF provides our employees with high quality and innovative training programs by assisting in their professional development, thus improving organization performance and supporting our Strategic Plan. In almost all technical training provided, there are either pre-tests for admission or academic requirements for graduation. In addition, "golden threads" are now part of many programs. These are lessons on ethics and integrity, customer service, teamwork, and accountability to the American public. Training initiatives which enhance employee development and performance include our New Professional Training Program; Advanced Firearms Trafficking; Alcohol and Tobacco Diversion; Advanced Explosives for Inspectors and Certified Explosives Specialists; and other technical programs. Each of these training programs seek to expand the base of employee knowledge and understanding regarding ATF’s roles, missions, and capabilities, and to capitalize on the ever-increasing collaboration between agents and inspectors in the field. ATF also provides training to thousands of other Federal, State, local, and foreign law enforcement officers. Training areas include arson investigation, explosive identification and regulation, firearms trafficking, and post blast investigations.

On average, we conduct 12,728 training instances each year for ATF personnel. In addition, ATF provides training to an average of over 42,000 State, local, and international law enforcement officers and industry personnel annually.

In fiscal year 1999, ATF provided basic training to a record number of 168 agents and 72 inspectors through the New Professional Training program, which was updated to include comprehensive basic training to all new agents and inspectors.

Last year ATF developed training protocols and organizational development plans for ATF’s Critical Incident Command System. We have conducted field exercises and exposed all ATF field divisions to the theory and principle of a standardized Critical Incident Management System for ATF.

In fiscal year 1999, ATF has focused on leadership development programs for all ATF supervisors and managers with an emphasis on core competencies, ethics, integrity, and teamwork.

Over the past year, ATF implemented and administered a comprehensive ethics program to ensure compliance with the Standards of Conduct for Employees of the Executive Branch and supplemental regulations. This program was put into place to raise ATF employees’ awareness of the Standards and to ensure consistency throughout the organization. The Ethics Program administers the Bureau-wide financial disclosure program, provides legal advice in various areas, and provides extensive training to all ATF employees. In providing ethics training, we are ensuring that all new employees are trained and that ethics presentations are provided at mid- and senior level conferences, and at various retirement seminars around the country. ATF has also taken the initiative in setting up an Ethics website and providing updated information weekly to ensure that the ATF workforce has current changes to the rules of conduct. With our approach, ATF employees recognize that ethics is a real and integral part of all that we do and critical to carrying out our mission successfully.

In fiscal year 1999 ATF hired over 500 employees with a net staffing increase of over 400. This accomplishment demonstrates that while ATF’s fiscal year 2001 Congressional request is ambitious, it is also realistic. The past several years have enabled ATF to strengthen its infrastructure to allow it to hire all of the personnel requested in this request.