<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:27226.wais]
REAUTHORIZATION OF THE U.S. DEPARTMENT OF JUSTICE: EXECUTIVE OFFICE FOR
U.S. ATTORNEYS, CIVIL DIVISION, ENVIRONMENT AND NATURAL RESOURCES
DIVISION, EXECUTIVE OFFICE FOR U.S. TRUSTEES, AND OFFICE OF THE
SOLICITOR GENERAL
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
APRIL 26, 2006
__________
Serial No. 109-132
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
______
U.S. GOVERNMENT PRINTING OFFICE
27-226 WASHINGTON : 2006
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512ÿ091800
Fax: (202) 512ÿ092250 Mail: Stop SSOP, Washington, DC 20402ÿ090001
COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, Chief of Staff-General Counsel
Perry H. Apelbaum, Minority Chief Counsel
------
Subcommittee on Commercial and Administrative Law
CHRIS CANNON, Utah Chairman
HOWARD COBLE, North Carolina MELVIN L. WATT, North Carolina
TRENT FRANKS, Arizona WILLIAM D. DELAHUNT, Massachusetts
STEVE CHABOT, Ohio CHRIS VAN HOLLEN, Maryland
MARK GREEN, Wisconsin JERROLD NADLER, New York
J. RANDY FORBES, Virginia DEBBIE WASSERMAN SCHULTZ, Florida
LOUIE GOHMERT, Texas
Raymond V. Smietanka, Chief Counsel
Susan A. Jensen, Counsel
Brenda Hankins, Counsel
Mike Lenn, Full Committee Counsel
Stephanie Moore, Minority Counsel
C O N T E N T S
----------
APRIL 26, 2006
OPENING STATEMENT
Page
The Honorable Chris Cannon, a Representative in Congress from the
State of Utah, and Chairman, Subcommittee on Commercial and
Administrative Law............................................. 1
The Honorable Melvin L. Watt, a Representative in Congress from
the State of North Carolina, and Ranking Member, Subcommittee
on Commercial and Administrative Law........................... 3
WITNESSES
Mr. Michael A. Battle, Director, Executive Office for United
States Attorneys, United States Department of Justice,
Washington, DC
Oral Testimony................................................. 7
Prepared Statement............................................. 10
Mr. Peter D. Keisler, Assistant Attorney General, Civil Division,
United States Department of Justice, Washington, DC
Oral Testimony................................................. 30
Prepared Statement............................................. 31
Mr. Matthew J. McKeown, Principal Deputy Assistant Attorney
General, Environment and Natural Resources Division, United
States Department of Justice, Washington, DC, on behalf of Sue
Ellen Wooldridge, Assistant Attorney General, Environment and
Natural Resources Division, United States Department of
Justice, Washington, DC
Oral Testimony................................................. 35
Prepared Statement of Sue Ellen Wooldridge..................... 35
Mr. Clifford, J. White, Acting Director, Executive Office for
United States Trustees, United States Department of Justice,
Washington, DC
Oral Testimony................................................. 40
Prepared Statement............................................. 41
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Chris Cannon, a
Representative in Congress from the State of Utah, and
Chairman, Subcommittee on Commercial and Administrative Law.... 2
Prepared Statement of the Honorable Melvin L. Watt, a
Representative in Congress from the State of North Carolina,
and Ranking Member, Subcommittee on Commercial and
Administrative Law............................................. 4
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of Paul D. Clement, Solicitor General of the
United States, United States Department of Justice, Washington,
DC............................................................. 61
Response to Post-Hearing Questions from Michael A. Battle,
Director, Executive Office for United States Attorneys, United
States Department of Justice, Washington, DC................... 64
Response to Post-Hearing Questions from Peter D. Keisler,
Assistant Attorney General, Civil Division, United States
Department of Justice, Washington, DC.......................... 75
Response to Post-Hearing Questions from Matthew J. McKeown,
Principal Deputy Assistant Attorney General, Environment and
Natural Resources Division, United States Department of
Justice, Washington, DC........................................ 84
Response to Post-Hearing Questions from Clifford, J. White,
Acting Director, Executive Office for United States Trustees,
United States Department of Justice, Washington, DC............ 88
REAUTHORIZATION OF THE U.S. DEPARTMENT OF JUSTICE: EXECUTIVE OFFICE FOR
U.S. ATTORNEYS, CIVIL DIVISION, ENVIRONMENT AND NATURAL RESOURCES
DIVISION, EXECUTIVE OFFICE FOR U.S. TRUSTEES, AND OFFICE OF THE
SOLICITOR GENERAL
----------
WEDNESDAY, APRIL 26, 2006
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:58 p.m., in
Room 2141, Rayburn House Office Building, the Honorable Chris
Cannon (Chairman of the Subcommittee) presiding.
Mr. Cannon. The Subcommittee will come to order.
We apologize. You know, the worst thing that can happen
here is when you get a vote right before a hearing, and you
guys have to sit here and wait. We apologize for that and thank
you for being here and thank you for patience.
The Subcommittee on Commercial and Administrative Law is
meeting this afternoon to receive testimony from five
components of the Justice Department--at Department of Justice
as part of the Subcommittee's continuing oversight efforts.
These components are the Executive Office for United States
Attorneys, the Civil Division, the Environment and Natural
Resources Division, the Executive Office for United States
Trustees, and the Office of the Solicitor General, the latter
of which has submitted written testimony for the record.
Our oversight responsibilities require us to examine the
performance of these Justice Department components, evaluate
how well they are positioned to achieved their goals, and
determine both the adequacy of their funding levels and the
need for any legislative changes to facilitate their mission.
I should state at the outset that this has not been and
will not be the only encounter the Subcommittee has with the
Justice Department components within our jurisdiction. It is
our intention to continually monitor the activities of these
components throughout the year, and I expect this endeavor to
be undertaken in the spirit of cooperation by the Members of
this Subcommittee.
I believe that effective oversight requires that we listen
in order to learn so that we can intelligently question and
suggest. The Committee must make sure the Department performs
competently and fairly because the Department is directly
responsible for supporting the President in his duty to
faithfully execute the laws of the United States.
It is imperative that the Department be conscious of the
awesome power that has been entrusted to it and of its
responsibility to ensure that this power is exercised in the
interest of justice.
I wish to stress the significance of today's hearing for
both the Justice Department and Subcommittee Members. The
information we receive from witnesses today will be of
immediate value in determining the adequacy of funding levels
proposed by the President in his budget request for the
Department of Justice. It will also influence whether the
Subcommittee needs to craft legislation to implement the issues
outlined.
It is interesting to note that the 5 Justice Department
components represented at today's hearing account for more than
2 billion in taxpayer dollars. These monies fund comprehensive
litigation, appellate litigation, and administrative
responsibilities. The broad mission of these components
underscores the central role that their performance can play in
significantly improving the lives, safety, and well-being of
every American.
In January, the President signed into law legislation
reauthorizing the Department of Justice that included three
provisions added at the insistence of our Subcommittee. These
provisions included a mandate that the Attorney General
designate a senior official in the Justice Department to assume
primary responsibility for privacy policy.
Among this office's responsibilities is the requirement to
file with the White House and Senate Judiciary Committees an
annual report on the Department's activities that affect
privacy, including a summary of complaints of privacy
violations. In addition, the law requires any Justice
Department training or meeting activity at a facility that
requires payment to a private entity for use to be specifically
authorized by the Attorney General.
Finally, the law requires the Executive Office of the
United States Trustees to submit to Congress an annual report
with respect to the program's efforts concerning bankruptcy
crimes.
These are important provisions, and I look forward to
working with the Department on their implementation.
[The prepared statement of Mr. Cannon follows:]
Prepared Statement of the Honorable Chris Cannon, a Representative in
Congress from the State of Utah, and Chairman, Subcommittee on
Commercial and Administrative Law
The Subcommittee will please come to order.
The Subcommittee on Commercial and Administrative Law is meeting
this afternoon to receive testimony from five components of the
Department of Justice as part of the Subcommittee's continuing
oversight efforts. These components are: the Executive Office for
United States Attorneys, the Civil Division, the Environment and
Natural Resources Division, the Executive Office for United States
Trustees, and the Office of the Solicitor General. The Solicitor
General has submitted written testimony.
By the way of explanation, our oversight responsibilities require
us to examine the performance of these Justice Department components,
evaluate how well they are positioned to achieve their goals, and
determine both the adequacy of their funding levels and the need for
changes in legislation to facilitate their mission. I should state at
the outset, this has not been and will not be the only encounter the
Subcommittee has with the Justice Department components within our
jurisdiction. It is our intention to continually monitor the activities
of these components throughout the year. I expect this endeavor to be
undertaken in the spirit of cooperation by other Members of the
Subcommittee.
I believe that effective oversight requires that we listen in order
to learn so that we can intelligently question and suggest. We do not
undertake this process, though, without expectations from the Justice
Department-expectations that are shared not only by the American people
but also, I am sure, by the agency itself. We expect the Department
should have performed competently and fairly, and that it should
continue to do so. The Department is directly responsible for
supporting the President in his duty to take care that the laws of the
United States are faithfully executed. It is imperative that the
Department be conscious of the awesome power that has been entrusted to
it and of its responsibility to ensure that this power is exercised in
the interest of justice and for the common good. We will work with the
components we hear from today and continue to critically study their
activities and needs.
I wish to stress the significance of today's hearing for both the
Justice Department and Subcommittee Members. The information we receive
from the witnesses today will be of immediate value in determining the
adequacy of funding levels proposed by the President in his budget
request for the Department of Justice. It also greatly influences the
crafting of necessary legislation in the future for the Department. An
important part of the record on which the Committee will base future
decisions will be the testimony at today's hearing.
It is interesting to note that the five Justice Department
components represented at today's hearing account for more than $2
billion in taxpayer dollars. These monies fund comprehensive appellate
litigation, support and administrative responsibilities. The broad
mission of these components underscores the central role their
performance can play in significantly improving the lives, safety and
well-being of every American.
For example, in January of this year, the President signed into law
legislation reauthorizing the Department of Justice that included three
provisions added at the insistence of our Subcommittee. These
provisions included a mandate that the Attorney General designate a
senior official in the Justice Department to assume primary
responsibility for privacy policy. Among this officer's
responsibilities is the requirement to file with the House and Senate
Judiciary Committees an annual report on the Department's activities
that affect privacy, including a summary of complaints of privacy
violations. In addition, the law requires any Justice Department
training or meeting activity at a facility that requires payment to a
private entity for use of such facility to be specifically authorized
by the Attorney General. Finally, the law requires the Executive Office
for United States Trustees to submit to Congress an annual report with
respect to the Program's efforts concerning bankruptcy crimes.
Mr. Cannon. I now turn to my colleague Mr. Watt, the
distinguished Ranking Member of my Subcommittee, and ask him if
he has any opening remarks?
Mr. Watt. Thank you, Mr. Chairman.
I just want to briefly welcome the witnesses and indicate
that this is the annual hearing process through which we learn
about what the various divisions within the Justice Department
over which we have jurisdiction have been doing over the past
year and, importantly to them, learn what resources or
additional resources they believe are needed to effectively
meet their responsibilities.
In the interest of time, I will submit the balance of my
opening statement for the record in hopes that we might be able
to get through with their testimony before I have to leave at
3:30. So the more I can expedite that, the better off we are.
So I'll yield back.
Mr. Cannon. Without objection, the gentleman's entire
statement will be placed in the record. Hearing no objection,
so ordered.
[The prepared statement of Mr. Watt follows:]
Prepared Statement of the Honorable Melvin L. Watt, a Representative in
Congress from the State of North Carolina, and Ranking Member,
Subcommittee on Commercial and Administrative Law
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Mr. Cannon. Without objection, all Members may place their
statements in the record at this point. Without objection, so
ordered.
Without objection, the Chair will be authorized to declare
recesses of the hearing at any point. Hearing no objection, so
ordered.
I ask unanimous consent that Members have 5 legislative
days to submit written statements for inclusion in today's
hearing record. Hearing no objection, so ordered.
I'm now pleased to introduce the witnesses for today's
hearing.
Our first witness is Michael Battle, who is the Director of
the Executive Office of the United States Attorneys. His office
provides oversight, coordination, and support to 94 United
States attorneys' offices across the Nation.
Mr. Battle began his service with the executive office in
June of 2005. Prior to this--or prior to his work there, Mr.
Battle served as the United States attorney for the Western
District of New York from January 2002 to May 2005.
In June 1996, he was appointed by New York Governor Pataki
to serve as a judge on the Erie County Family Court and was
elected the following November to a full 10-year term.
Mr. Battle is a past president of the Minority Bar
Association of Western New York, and has been a member of
numerous other organizations. Mr. Battle received his
undergraduate degree cum laude from Ithaca College in 1977 and
earned his J.D. from the University of New York Buffalo School
of Law in 1981.
Peter Keisler, our next witness, is the Assistant Attorney
General for the Civil Division. Prior to his position, he
served as Principal Deputy Associate Attorney General and
Acting Associate Attorney General.
Before joining the Department of Justice, Mr. Keisler was a
partner in the Washington, D.C., office of Sidley Austin Brown
& Wood. He also served as associate counsel to the President
during the Reagan administration and as a law clerk to Justice
Anthony Kennedy and Judge Robert H. Bork of the United States
Court of Appeals for the District of Columbia Circuit.
Mr. Keisler received his undergraduate degree magna cum
laude from Yale College in 1981 and earned his law degree from
Yale Law School in 1985.
Our third witness is Matthew J. McKeown. Or do you
pronounce that McKeown?
Mr. McKeown. Mr. Chairman, it's McKeown.
Mr. Cannon. McKeown. Okay. All right.
We have a congressman who spells their name quite a bit
like that and pronounces it differently. McKeown.
He's the Principal Deputy Assistant Attorney General for
the Environment and Natural Resources Division. Mr. McKeown is
testifying in place of Assistant Attorney General Sue Ellen
Wooldridge, who cannot be with us today because of family
emergency.
Before joining the division in October 2005, Mr. McKeown
served as the Deputy Solicitor for the United States Department
of the Interior, where, as the second in command, he led a team
of more than 400 lawyers and support staff. At the Interior
Department, he also served as the associate solicitor for land
and water and was the special assistant to the solicitor.
Mr. McKeown is a graduate of McGill University, and he
obtained his law degree from the University of Oregon Law
School.
Our final witness is Clifford White, who is the deputy
director for the Executive Office for United States Trustees
and currently is serving as its acting director. Mr. White has
testified on several occasions over the years. Welcome back.
During the course of his 26 years of Federal service, Mr.
White has served as an Assistant United States Trustee and a
Deputy Assistant Attorney General within the Department of
Justice and as Assistant General Counsel at the U.S. Office of
Personnel Management.
He is an honors graduate of the George Washington
University and the George Washington University Law School.
I extend to each of you my warm regards and appreciation
for your willingness to participate in today's hearing. In
light of the fact that your written statements will be included
in the hearing, I request that you limit your remarks more or
less to 5 minutes. So feel free to summarize and focus on the
salient points of your testimony.
You will note that we have a lighting system in front of
you. It turns green. After 4 minutes, it turns yellow, and then
it turns red. The red indicates 5 minutes are up.
We actually are sort of interested in what you have to say,
actually, here. So if you go beyond that, that's a little bit
fine. But recognize that we have a lot of Members here today,
don't we? Maybe we'll do two rounds of questioning. Who knows?
But if you could sort of focus on that 5-minute light, so
that would be helpful. And if it gets a little long, I'll tap
the gavel or something to encourage you. And then we'll have
Members ask questions in the order they arrive, and they'll
take 5 minutes each.
Pursuant to the directive of the Chairman of the Judiciary
Committee, I ask the witnesses to please stand and raise your
right hand to take the oath.
[Witnesses sworn.]
Mr. Cannon. The record should reflect that all of the
witnesses indicated in the affirmative. You may be seated.
And Mr. Battle, would you--oh. Mr. Battle, would you please
proceed with your testimony?
TESTIMONY OF MICHAEL A. BATTLE, DIRECTOR, EXECUTIVE OFFICE FOR
UNITED STATES ATTORNEYS, UNITED STATES DEPARTMENT OF JUSTICE,
WASHINGTON, DC
Mr. Battle. Thank you, Chairman Cannon, Ranking Member
Watt, and Members of the Subcommittee.
It is my honor to be here today representing the
outstanding men and women of the 94 United States attorneys'
offices, and I thank you on their behalf for your continuing
support of their efforts.
Let me start by asking that you support the President's
proposed United States attorneys' fiscal year 2007 budget
request. We are seeking a total budget of $1.664 billion to
support in excess of 10,000 positions. The request includes
$23.2 million in enhancements, which will support an increase
in 149 positions.
The enhancements will fund such initiatives as national
security and terrorism prosecutions, gang prosecutions, and
child exploitation and obscenity prosecutions, also additional
positions to prosecute identity theft and increased criminal
debt collection enforcement.
Preventing terrorism remains our top priority. On behalf of
all the United States attorneys, I want to thank the Congress
for renewing the USA PATRIOT Act. The PATRIOT Act strengthens
our criminal laws against terrorism and continues to provide
the legal authorities needed to detect and disrupt terrorist
plans. Last year, we saw a significant success in terrorism
prosecutions.
Apart from terrorism prosecutions, we are continuing the
important work of sharing terrorism and counterterrorism
information. Our Anti-Terrorism Advisory Councils, also known
as ATACs, are chaired by the U.S. attorneys and ensure that
critical information regarding terrorism is shared among
Federal, State, and local enforcement agencies. We also conduct
terrorism training for our prosecutors across the country.
The United States attorneys are also active in prosecuting
gangs. Each United States attorney's office has an anti-gang
coordinator, and last year, we trained the 93 coordinators at
the National Advocacy Center to take on this fight.
On March 31, 2006, the Attorney General announced a
comprehensive anti-gang initiative that devotes extensive
resources to defeating some of the most violent gangs in our
country. Each of six sites will receive funds to incorporate
prevention and enforcement efforts and to assist released
prisoners as they re-enter society. By integrating prevention,
enforcement, and re-entry, this initiative aims to address gang
activity at every stage.
Another program to keep our communities safe, Project Safe
Neighborhoods, also known as PSN, continues to be one of the
great success stories of the United States attorneys' offices
in the Department of Justice. PSN is a multi-faceted approach
to reducing gun crime, whereby each United States attorney
tailors their prosecution strategy to fit the unique gun and
violent crime problems in their district.
Under PSN, Federal firearms prosecutions have increased 73
percent since 2001. And more importantly, the rate of violent
victimization by an offender armed with a firearm has declined
by approximately \2/3\ over the last decade. As such, thousands
of Americans are being spared the tragic consequences of gun
crime.
While on the topic of protecting our neighborhoods, I think
it is important to report that we are continuing to investigate
and prosecute major drug and money laundering organizations.
The Organized Crime Drug Enforcement Task Force, also known as
OCDETF, is a program the integral part of which is part of this
effort. The OCDETF program combines the efforts of Federal,
State, and local law enforcement agencies, along with the
United States attorneys' offices.
We are also addressing the growing threat of
methamphetamine, also known as ``meth.'' In FY 2005, the United
States attorneys' offices filed 5.5 percent more meth cases
than the previous year and the highest total number ever. In
the last 10 years, the number of meth cases filed and the
number of defendants charged has quadrupled. Meth cases now
have surpassed crack cocaine in frequency, making it third
behind powder cocaine and marijuana in Federal case filings.
We are also focused on providing support to victims of
crime. In May 2005, with input from my office, the Attorney
General issued guidelines for victim and witness assistance,
explaining the new protections for victims set forth in the
Crime Victims' Rights Act. We've also provided training to the
United States attorneys' offices and the Department since
passage of the Act. In January 2006, the Attorney General
designated a Victims' Rights Ombudsman within our office at
EOUSA to resolve complaints brought by crime victims.
This brings me to one of the most tragic forms of
victimization in our society, one involving children. The
United States attorneys are committed to prosecuting child
sexual assault and child pornography cases. Statistics show
that during FY 2005, United States attorneys collectively filed
in excess of 1,400 child exploitation cases involving child
pornography, coercion, and enticement offenses against in
excess of 1,500 defendants.
To buttress our efforts against this scourge, the Attorney
General announced in February 2006 the Project Safe Childhood
initiative. Project Safe Childhood will bring together the
United States attorneys, Internet Crimes Against Children Task
Forces, and other Federal, State, and local enforcement
officials to investigate and prosecute crimes against children
that occur through the Internet and other electronic media.
The Internet also facilitates intellectual property and
computer hacking related to crimes that threaten significant
segments of our economy. Since fiscal year 2001, specialized
prosecution units focused on computer hacking and intellectual
property, known as CHIP units, have been formed at 18 United
States attorneys' offices. Last fiscal year, 350 defendants
were charged with intellectual property offenses, nearly double
the number charged in 2004.
Another area involving our economy in which we are
achieving great success is the area of corporate fraud. Since
the creation of the Corporate Fraud Task Force in July 2002,
over 970 corporate fraud convictions have been obtained through
December 31, 2005. This includes more than 200 convictions of
top managers, including CEOs and CFOs.
Moreover, health care fraud continues to be a significant
problem, and United States attorneys' offices play the lead
role in prosecuting those cases.
In civil cases, United States attorneys, working with the
Civil Division, won or negotiated approximately 1.47 billion in
judgments and settlements. Of that amount, more than 1.13
billion went to repay the Medicare Trust Fund.
As you can see by the examples that I've just given, the
United States attorneys are committed to protecting and
preserving the rights of Americans in many ways. This perhaps
manifests itself most directly through the criminal civil
rights prosecutions brought by the United States attorneys in
coordination with the Department's Civil Rights Division.
During fiscal year 2005, United States attorneys filed criminal
civil rights cases against 131 defendants. This represents a 19
percent increase in defendants charged over the prior year.
Finally, the United States attorneys' offices continue to
enforce the principle that no public official is above the law.
In FY 2005, the United States attorneys' offices filed 441
public corruption cases against 673 defendants.
In closing, over the past several years, United States
attorneys have taken on new responsibilities and initiatives.
We have successfully carried out our mission in all of these
areas, and we appreciate your continued support of our work.
And I look forward to answering your questions today.
Thank you.
[The prepared statement of Mr. Battle follows:]
Prepared Statement of Michael A. Battle
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Mr. Cannon. Thank you, Mr. Battle.
Mr. Keisler, you're recognized for 5 minutes.
TESTIMONY OF PETER D. KEISLER, ASSISTANT ATTORNEY GENERAL,
CIVIL DIVISION, UNITED STATES DEPARTMENT OF JUSTICE,
WASHINGTON, DC
Mr. Keisler. Thank you very much, Mr. Chairman and
Congressman Watt.
It's a great privilege for me once again to appear before
you at this oversight hearing to discuss the work of the Civil
Division and to respond to any questions you might have.
The Civil Division, as you know, represents the United
States in court in a wide variety of matters. We don't make
policy, but we represent the people and the Departments and the
Agencies that do.
Virtually every executive branch agency, as well as Members
of Congress, are clients of ours at one time or another. The
cases we handle, therefore, touch upon virtually every aspect
of the operations of the Federal Government.
We represent the United States on a wide range of cases--
contract disputes, tort suits, loan defaults, and immigration
cases, among others. We defend the constitutionality of acts of
Congress and the lawfulness of Government regulations in court.
We seek to recover monies lost to the Government through
fraud, and we enforce important consumer protection statutes.
We also help administer sensitive national compensation
programs.
The division employs approximately 660 attorneys and
roughly 300 support personnel to perform these functions, and
they're very busy. While civil had about 31,000 cases in fiscal
year 2002, it had more than 52,000 in fiscal year 2005, a 70
percent increase in 3 years.
Notwithstanding this rapid growth, I'm very pleased to
report that we have had a very successful year. Working
together, as Mike just noted, the Civil Division and the U.S.
attorneys' offices recovered more than $1 billion in monies
defrauded from the Government. Annual recoveries have exceeded
that $1 billion mark for 5 of the past 6 years. The division is
exceedingly proud of these accomplishments, which have resulted
from its close partnership with Mike's U.S. attorneys' offices.
While our affirmative case work recovers billions for the
United States Treasury, 86 percent of our litigation is
defensive. These cases often affect significant budgetary and
policy issues. As you know, the Government is the largest
commercial actor in the world and the largest purchaser of
goods and services.
We have successfully defended the Government from
exaggerated or meritless claims in a wide range of commercial
and tort cases. Our efforts saved the Government more than $10
billion in fiscal year 2005 alone.
We have also successfully defended congressional and
executive authority against numerous challenges to laws, such
as the No Child Left Behind Act and the ``three strikes''
provision of the Prison Litigation Reform Act. And in July
2005, the division successfully defended the Communications
Decency Act's ban on knowingly transmitting obscenity via
telecommunications devices to minors.
In addition to these matters, our attorneys are also
involved on the civil side of a variety of terrorism cases. We
are particularly proud of our work in the terrorist financing
area, defending the Government's actions in court to help shut
down the flow of money to international terrorist
organizations. We take seriously the Attorney General's charge
to address terrorism and other threats to our country with the
utmost integrity.
The Civil Division has also administered sensitive national
compensation programs established by Congress, such as the
Vaccine Injury Compensation Program and the Radiation Exposure
Compensation Act.
We very much appreciate the interest and the oversight of
this Committee, both from a budget and a policy standpoint. My
written testimony describes the area that we feel is most in
need of additional resources in FY 2007, immigration
litigation, where the caseload has risen from 6,200 in fiscal
2002 to more than 17,000 in fiscal 2005.
I would, of course, be happy to address this and other
areas of interest further. I do want to thank you again, Mr.
Chairman, Congressman Watt, for the opportunity to appear
before you and to respond to your questions.
[The prepared statement of Mr. Keisler follows:]
Prepared Statement of Peter D. Keisler
Chairman Cannon, Congressman Watt, and Members of the Subcommittee:
I appreciate the opportunity to discuss the work of the Civil
Division of the Department of Justice and our budget and resource needs
for Fiscal Year 2007.
The Division represents the interests of the United States in a
wide range of civil matters. Our cases encompass virtually every aspect
of the Federal government--from defending the constitutionality of
Federal statutes to recovering money defrauded from Government
programs, to the administration of national compensation programs, to
the representation of Federal agencies and Government employees in a
host of matters that arise as part and parcel of Government
operations--contract disputes, allegations of negligence and
discrimination, loan defaults, and immigration matters. The Division
employs 660 attorneys and 295 full and part time employees who provide
essential paralegal, administrative, and clerical support.
In FY 2005, the Civil Division accomplished the following:
<bullet> Worked with the United States Attorneys to recover
more than $1 billion dollars lost through fraud against
Government programs;
<bullet> Protected the public fisc from billions of dollars in
claims arising from the Government's commercial activities;
<bullet> Protected the public fisc from over $1 billion
dollars in tort claims arising from the Government's past and
current operational programs and activities;
<bullet> Defended against challenges to Congressional and
Executive exercises of power;
<bullet> Played a major role in the administration of the
Vaccine Injury Compensation Program, which was established by
Congress;
<bullet> Represented individual Government employees sued in
connection with their performance of official duties; and
<bullet> In the period since the September 11th attacks,
defended the Federal government's coordinated response to those
attacks and the Administration's policies designed to prevent
future acts of terrorism.
NATIONAL SECURITY
Among the laws and policies of greatest importance to the
Administration, the Congress, and the public are those intended to
protect our nation's security. Our leadership has committed itself to
devoting all resources necessary to disrupt, weaken, and eliminate
terrorist networks; to prevent terrorist operations; and to bring to
justice perpetrators of terrorist attacks. And we in the Civil Division
are privileged to contribute to this mission through our representation
of the United States in litigation that relates to the Federal
government's efforts to protect against threats to our national
security. In fulfilling our litigation responsibilities, we take
seriously the Attorney General's charge to address terrorism and other
threats to the United States with integrity and devotion to our
nation's highest ideals.
Civil cases related to the war on terrorism often raise complex
issues. And the consequences are large, as litigation losses in this
area could undercut policies of crucial importance to the security of
our citizens. By way of example, Civil Division attorneys have defended
the Government in the following matters: challenges to the USA PATRIOT
Act; decisions to freeze the assets of terrorist organizations;
enforcement actions involving the detention and removal of suspected
alien terrorists; and designations of Specially Designated Global
Terrorists.
__________
While national security cases are paramount, they nonetheless
represent a small fraction of the cases and matters pending with the
Civil Division in FY 2006. This vast and diverse workload is handled by
our trial attorneys who spend their time on the front lines of
litigation--preparing motions, taking depositions, negotiating
settlements, conducting trials, and pursuing appeals.
WORKLOAD TRENDS
Over the past four years, the Civil Division's caseload has
increased by more than 70 percent. In FY 2002, we handled about 31,000
cases and matters, but by FY 2005, our caseload exceeded 52,000. This
increase is attributable to two main factors: (1) significant growth in
the number of claims filed with the compensation programs; and (2) a
dramatic rise in appellate cases resulting primarily from increased
challenges to immigration enforcement actions.
IMMIGRATION LITIGATION
The Office of Immigration Litigation (``OIL'') defends the
Government's immigration laws and policies and handles challenges to
immigration enforcement actions. At no time in history has this mission
been so important, and never before has it consumed as many of the
Department's resources as it does today.
Immigration attorneys defend the Government's efforts to detain and
remove foreign-born terrorists and criminal aliens. Since 9/11, OIL has
handled and assisted in hundreds of cases involving aliens of national
security interest. On average, OIL defends the detention and removal of
approximately 1,500 criminal aliens each year. Vigorous defense of
these cases is critical to our national security and the safety of our
communities. OIL also provides liaison and training to all of the
Government's immigration agencies, enabling enforcement efforts at and
within our borders to enjoy dependable support before the courts.
Immigration litigation has been the fastest growing component of
the Civil Division's docket. The Division is responsible for handling
or overseeing all Federal court challenges to decisions of the Board of
Immigration Appeals (``BIA''), and the number of these challenges has
grown significantly in recent years. OIL's docket of pending cases has
nearly tripled in the past four years, growing from 6,200 cases in FY
2002 to over 17,000 cases in FY 2005.
This growth stems from several factors. In 2003, much of the growth
was attributed to the Department's streamlining reforms, which
increased the productivity of the BIA and thus helped clear a sizable
backlog of cases. The backlog has since been cleared. Now, the growth
stems primarily from heightened immigration enforcement activities
pursued by the Department of Homeland Security and the rapid increase
in the rate at which aliens appeal BIA decisions to the Federal courts,
which has increased from 6 percent to 29 percent over the past four
years. There is no reason to expect this rate to subside. Aliens now
must turn to the courts to get the delay in removal that was once
reliably provided simply by an administrative appeal to the BIA.
This enormous growth has driven OIL's caseload per attorney to over
155 in FY 2005, more than doubling the historic caseload of 60 cases
per attorney. Favorable congressional action on the Division's FY 2007
request would play a large part in addressing OIL's rising caseload.
Without additional resources in FY 2007, the attorney caseload is
expected to remain at the untenable level of 155 cases per attorney.
The Division and the Department have responded to this crisis,
assigning immigration cases to other attorneys throughout the
Department. These stopgap measures, which task attorneys who lack
experience and efficiency in handling immigration matters, are not a
permanent solution.
The Office of Immigration Litigation will continue to face an
overwhelming workload in FY 2007. Therefore, the President requests in
his FY 2007 budget a program increase of 114 positions (86 attorneys),
57 FTEs, and $9,566,000 for immigration litigation.
PROTECTING THE PUBLIC FISC
Our dockets are filled with cases that involve substantial monetary
claims against the Government. The significance of these claims cannot
be overstated.
Our responsibilities have included: (1) the 122 Winstar suits in
which hundreds of financial institutions have sought tens of billions
of dollars for alleged losses that occurred in the wake of banking
reforms enacted in the 1980s; (2) the Cobell class action--perhaps the
largest ever filed against the Government; and (3) numerous complex,
sensitive, and challenging tort cases based on Federal programs and
activities, including defense and national security programs, law
enforcement activities, and other Government operations, in which the
Civil Division has successfully protected the public fisc from
approximately $1 billion in unmeritorious tort claims in the last
fiscal year.
In thousands of other defensive monetary matters, our mission is to
ensure that the will of Congress and the actions of the Executive
branch are vigorously and fairly defended, and that meritless claims
are not paid from the public fisc. Thus far, we have been largely
successful. For example, seventy of the original 122 Winstar suits have
been resolved without the Government paying any money whatsoever. And
in 2005 alone, we defeated over $3.9 billion in groundless Winstar
claims asserted against the United States.
RECOVERING FEDERAL FUNDS
In any given year, about 15 percent of our cases involve
affirmative litigation on which we work with United States Attorneys to
enforce Government regulations and policies, and to recover money owed
the Government from commercial transactions, bankruptcy proceedings,
and fraud. The bulk of affirmative monetary recoveries stem from fraud
suits. As in the last several years, health care in FY2005 accounted
for the lion's share of the Department's fraud settlements and
judgments--more than $1.1 billion was recovered in that year alone.
This number includes both whistleblower claims and those initiated by
the United States in independent fraud investigations. Most of the
recoveries in this area are returned to the Medicare and Medicaid
programs, but substantial recoveries also are returned to the Federal
Employees Health Benefits Program, the Department of Defense TRICARE
program, the Department of Veterans Affairs, and the Railroad
Retirement Board. The coming fiscal year promises to continue, if not
exceed, this trend. Health care fraud recoveries in the first four
months of this fiscal year already exceed $600 million. The following
recent recoveries illustrate our efforts in this area:
We obtained $325 million from HealthSouth Corporation, the Nation's
largest provider of rehabilitative medicine services. Allegations
against HealthSouth included false claims for outpatient physical
therapy services that were not properly supported by certified plans of
care, administered by licensed physical therapists, or for one-on-one
therapy as represented. Of similar magnitude was a recent settlement
with Gambro Healthcare for $310 million to resolve allegations of false
claims for Medicare and Medicaid in connection with dialysis services.
Gambro Supply Corporation, the sham durable medical equipment company
and a wholly owned subsidiary of Gambro Healthcare, paid a $25 million
criminal fine and agreed to permanent exclusion from the Medicare
program in a case handled collaboratively by our office and both the
civil and criminal divisions in the Eastern District of Missouri.
One of the largest areas of the Department's health care fraud
caseload are matters against pharmaceutical companies or other related
entities, charging various kinds of fraud on the Medicare and Medicaid
programs in the pricing or delivery of drugs. To date, there have been
more than more than $4.7 billion in criminal fines and civil recoveries
in these cases, much of it returned to the Medicare and Medicaid
programs. Indeed, there now are more than 150 qui tam cases filed by
whistleblowers under the False Claims Act that allege various schemes
associated with government drug plans.
Just this past December, in a case jointly prosecuted with the
United States Attorney's Office for the District of Massachusetts,
Serono S.A., a Swiss biotechnical corporation, and its United States
subsidiaries, entered into a global criminal, civil, and administrative
settlement for $704 million, making it one of the largest health care
fraud settlements the Department has reached. Serono Labs, one of the
subsidiaries, pled guilty to two counts of conspiracy: the first,
conspiring to introduce and deliver for introduction into interstate
commerce, with intent to defraud or mislead, adulterated medical
devices; the second, conspiring to knowingly and willfully pay illegal
remuneration to health care providers to induce them to refer patients
to pharmacies for the furnishing of the drug Serostim, for which
payments were made in whole or in part by the Medicaid program. Serono
Labs paid a criminal fine of $136.9 million and reached a civil
settlement of its False Claims Act liability of $567 million. This
amount was paid to the United States and to State Medicaid programs
(the Federal share of which was $305 million).
Finally, in the first settlement of its kind, the pharmacy benefit
manager AdvancePCS agreed in 2005 to pay $137.5 million to resolve its
civil liability in connection with soliciting and receiving kickbacks
from pharmaceutical manufacturers and paying kickbacks to potential
customers to induce them to contract with AdvancePCS. This
investigation exposed the hidden financial relationships maintained by
pharmacy benefits managers with drug manufacturers and health plans
that ultimately influenced the nature and the brand of drugs prescribed
to Medicare beneficiaries. We think the lessons learned in this case,
which was handled with the United States Attorney's Office for the
Eastern District of Pennsylvania, and its progeny will be particularly
instructive as we monitor potential fraudulent conduct in the Medicare
prescription drug program now coming on line.
The Division is making the best use of available resources. These
cases are highly complex and resource intensive. Investigative work
includes massive document collections, witness interviews, research,
and interagency coordination. Millions of taxpayer dollars are lost
each year to health care fraud, and any effective effort to contain the
cost of Medicare and Medicaid must also incorporate strategies aimed at
stopping such fraud.
ALTERNATIVES TO LITIGATION
In addition to its litigation work, the Civil Division also helps
to administer alternatives to litigation. The Vaccine Injury
CompensationProgram, for example, was created in 1986 by the National
Childhood Vaccine Injury Act to encourage childhood vaccination by
providing a streamlined system for compensation in rare instances where
an injury results. The Vaccine Injury Compensation Trust Fund, from
which compensation awards are paid to eligible claimants, derives its
funding from an excise tax on vaccine manufacturers and provides
reimbursement to the Departments of Justice and Health and Human
Services, as well as to the Court of Federal Claims, for expenses
related to the administration of the Program. To date, over 1,960
families or individuals have been paid $1.58 billion.
Similarly, Congress passed the Radiation Exposure Compensation Act
(``RECA'') in 1990 to offer an apology and compensation to individuals
who suffered disease or death as a result of the Nation's nuclear
weapons testing program during the Cold War Era. In July 2000, RECA
Amendments were enacted which significantly expanded the scope of the
Act. Major changes included new categories of beneficiaries, expansion
of eligible diseases, and geographic areas. Annual capped mandatory
appropriations did not keep pace with the increased number of new claim
filings and resulted in shortfalls of funds for eligible claimants.
However, I am pleased to report that the Trust Fund is currently
solvent. In FY 2005, Congress ensured adequate long-term funding by
requiring that payments to certain RECA claimants be made from the
Energy Employees Occupational Illness Trust Fund. Additional
legislation conferred mandatory and indefinite funding status for the
remaining RECA claimants beginning in FY 2006. To date, over 15,200
claims have been approved, representing over $1 billion paid to
eligible claimants or their surviving beneficiaries.
PERFORMANCE
By concentrating on the Civil Division's top priorities, this
testimony provides little elaboration on the thousands of cases and
matters that form the traditional core of our work.
The Civil Division has a longstanding commitment to maximizing the
effectiveness of scarce Government resources. It is with pride that I
can report that performance targets across the board were met or
exceeded in FY 2005, as we succeeded in recovering substantial funds
owed to the Government, defeating unmeritorious claims, and prevailing
in the vast majority of cases involving challenges to the programs of
some 200 client agencies.
PRESIDENT'S BUDGET REQUEST
The President's FY 2007 request seeks 1,208 positions (834
attorneys); 1,176 FTEs; and $213,286,000, which includes a program
increase of 114 positions (86 attorneys) and $9,566,000 for immigration
litigation. Also included in this request are the base resources
required to maintain the superior legal representation services that
have yielded such tremendous success, and additional funds to support
the Office of Immigration Litigation's important mission.
At this time, Mr. Chairman, I would be happy to address any
questions you or Members of the Subcommittee may have.
Mr. Cannon. Thank you, Mr. Keisler. I can assure you that
we're going to revisit the issue of immigration and what's
going on there. Thank you for your presentation.
Mr. McKeown, right? Mr. McKeown.
TESTIMONY OF MATTHEW J. McKEOWN, PRINCIPAL DEPUTY ASSISTANT
ATTORNEY GENERAL, ENVIRONMENT AND NATURAL RESOURCES DIVISION,
UNITED STATES DEPARTMENT OF JUSTICE, WASHINGTON, DC, ON BEHALF
OF SUE ELLEN WOOLDRIDGE, ASSISTANT ATTORNEY GENERAL,
ENVIRONMENT AND NATURAL RESOURCES DIVISION, UNITED STATES
DEPARTMENT OF JUSTICE, WASHINGTON, DC
Mr. McKeown. Thank you.
Mr. Chairman, Congressman Watt, Members of the
Subcommittee, I would like to convey Assistant Attorney General
Wooldridge's apologies for not being here today because of her
family emergency. She apologizes that she couldn't be here
today.
The division's mission is to enforce civil and criminal
environmental laws to protect the health and environment of our
citizens, to defend suits challenging environmental and
conservation laws, and the 410 lawyers in the division
currently are responsible for 6,800 cases in every judicial
district.
The division is committed to ensuring that American
taxpayers are getting their money's worth. Altogether, the
division has secured civil penalties, criminal fines, and
clean-up costs for the U.S. Treasury that far exceed the
division's share of the Department's budget.
In the criminal enforcement context, the division continued
to have great success with its initiatives to prevent shipping
from illegal discharges in inland waterways as well as the
initiative to protect workers from endangerment.
Over the years, the division has come to recognize the
importance of developing partnerships with U.S. attorneys'
offices, State attorneys general, and other State and local
officials across the Nation. So it's a pleasure to be here with
Mr. Battle today. In pursuing joint enforcement cases, we are
able to leverage our resources and increase our effectiveness.
So I would stand for further questions that the Committee
may have.
[The prepared statement of Ms. Wooldridge follows:]
Prepared Statement of Sue Ellen Wooldridge
introduction
Chairman Cannon, Congressman Watt, and Members of the Subcommittee,
I am pleased to be here today, along with my colleagues from the
Department of Justice. I appreciate this opportunity to discuss the
Environment and Natural Resources Division, one of the principal
litigating Divisions within the Department, and to answer any questions
that the Subcommittee may have about the Division.
I will first summarize the Division's work and outline the scope of
our responsibilities, which are essential to the implementation of
Congressional programs to protect the nation's environment and its
natural resources, and to defend the programs and activities of federal
agencies. The Division has a long and distinguished history, and our
attorneys have built a record that demonstrates their commitment to
legal excellence. I will then discuss the resources that the
Administration is requesting for the Division as part of its fiscal
year 2007 budget.
OVERVIEW OF THE ENVIRONMENT AND NATURAL RESOURCES DIVISION
The Environment and Natural Resources Division's mission is to
enforce civil and criminal environmental laws to protect the health and
environment of United States citizens, and to defend suits challenging
environmental and conservation laws, programs and activities. We
represent the United States in matters concerning the protection, use
and development of the Nation's natural resources and public lands,
wildlife protection, Indian rights and claims, and the acquisition of
federal property. Our enforcement activities are a critical component
of environmental protection and help ensure that our citizens breathe
clean air, drink clean water, and will be able to enjoy the country's
public lands, wildlife and other natural resources for generations to
come. In addition, the Division defends a wide range of vital federal
programs and interests in cases that involve such diverse and critical
matters as military training programs, government cleanup actions,
resource management programs and environmental regulations. We
represent virtually every federal agency and currently are responsible
for over 6,800 active cases in every judicial district in the nation,
utilizing the efforts of approximately 410 lawyers. Our principal
clients include the U.S. Environmental Protection Agency (EPA) and the
Departments of Agriculture, Commerce, Defense, Energy, the Interior,
Transportation and Homeland Security. The Division is committed to
ensuring that American taxpayers are getting their money's worth.
Altogether, the Division has secured civil penalties, criminal fines,
and cleanup costs for the U.S. Treasury that far exceed the Division's
share of the Department's budget. For instance, the last fiscal year
was a record breaking year in the Division's efforts to secure
commitments by polluters to take action to remedy their violations of
the nation's environmental laws. Actions taken by the Division in
federal courts resulted in nearly $9.6 billion in settlements and
court-ordered injunctive relief directed specifically at obtaining
corrective measures to protect the nation's health, welfare and
environment. While this number will fluctuate each year depending on
the nature of the cases being resolved, it is truly a superb result,
more than doubling our previous record of approximately $4.4 billion in
Fiscal Year 2004. Additionally, courts imposed nearly $137 million in
civil penalties for violations in environmental cases. According to EPA
statistics, the environmental benefits attributable to these
enforcement efforts include the reduction or treatment of nearly
400,000 tons of pollutants from the environment. The Division has
obtained benefits for human health and the environment that provide an
impressive return on the taxpayer's dollar.
These results reflect, among other things, the Division's
continuing successes in addressing Clean Air Act violations within the
petroleum refining industry. In the last fiscal year, the Division
secured important and valuable settlements with ConocoPhillips Co.,
Valero Energy Corp., Sunoco Refinery, Inc., Citgo Petroleum Corp., and
Chevron USA, Inc. More recently, the United States--along with the
States of Illinois, Louisiana, and Montana--entered a settlement with
Exxon Mobil that requires the defendant to reduce air pollutant
emissions by more than 51,000 tons per year, at a cost of approximately
$537 million, and to pay nearly $15 million for both a civil penalty
and environmentally beneficial projects.
Conserving the Superfund to ensure prompt cleanup of hazardous
waste sites is also a top priority. In Fiscal Year 2005, the Division
secured the commitment of responsible parties to clean up hazardous
waste sites, at costs estimated at nearly $647 million. An additional
$266 million in cost recovery to help finance future cleanup work was
also secured. The Division continues to secure cleanups of
unprecedented size and scope. Just this February, the Division reached
a consent decree resolving our claims against Atlantic Richfield and
NorthWestern Corporation in connection with the Milltown Reservoir
Operable Unit, one of the numerous Superfund Sites within the Clark
Fork River Basin in Montana. Under the terms of this decree, ARCO and
NorthWestern will: remove the Milltown Dam and the millions of cubic
yards of contaminated sediment accumulated behind it, at an estimated
cost of $106 million; contribute toward the State's $12 million natural
resource restoration plan; reimburse most of EPA's costs; and comply
with various FERC requirements in connection with the decommissioning
of the dam. The United States, on behalf of certain federal agencies,
is also reimbursing $2.5 million of EPA's past costs. Other major
Superfund cases that the Division resolved this past fiscal year
require cleanup actions in Colorado, Illinois, New York, Pennsylvania
and Washington.
The Division also continues its national enforcement program to
protect the nation's water by ensuring the integrity of municipal
wastewater treatment systems. For example, in United States Washington
Suburban Sanitary Commission (WSSC), the United States entered into a
Consent Decree with WSSC, the sewerage authority for Montgomery and
Prince George's Counties in Maryland, under which WSSC will undertake
injunctive measures including inspection, rehabilitation, and repair
requirements and changes in the operation and maintenance of its
collection system. WSSC will also perform four ``supplemental
environmental projects'' to reduce pollution loadings to the Chesapeake
Bay and will pay a $1.1 million civil penalty, which the United States
and Maryland will split. Five citizens groups intervened.
In the criminal enforcement context, the Division continues to have
great success with its enforcement initiative to prevent ships from
illegally discharging pollutants into the oceans, coastal waters and
inland waterways. Recent whistleblower awards to crew members should
further aid detection and deterrence. In one recent case, United States
v. Wallenius Ship Management, Pte., Ltd., the defendant Singapore
shipping company and the former chief engineer of a vessel it managed
pleaded guilty to violations associated with the illegal dumping of
oily wastes and the overboard dumping of plastics. After a tip by crew
members, the Coast Guard inspected the ship and discovered a multi-
piece bypass system hidden in various locations. The company will pay a
$5 million fine with an additional $1.5 million payment devoted to
community service projects and will serve a three-year term of
probation and implement an environmental compliance plan. In another
recent case, MSC Ship Management (Hong Kong) Ltd. pleaded guilty to
having discharged approximately 40 tons of sludge through a bypass pipe
manufactured on the ship and an even larger volume of oil-contaminated
bilge waste. The company also made false statements to the Coast Guard,
directed subordinates to lie to the Coast Guard, concealed evidence,
falsified its oil record book and sought to cover up the falsification
of records. The company was sentenced to pay a $10 million fine and
will pay an additional $500,000 for community service projects.
The Division has also successfully prosecuted several companies
owned by McWane, Inc., the largest manufacturer of cast iron piping in
the United States, with one major case still pending. McWane and its
divisions have been cited by the U.S. Occupational Health and Safety
Administration (OSHA) hundreds of times since the mid-1990s. In United
States v. Union Foundry, an Alabama division of McWane pled guilty to a
willful violation of an OSHA regulation that led to an employee's death
and to violation of the Resource Conservation and Recovery Act. The
company was ordered to pay a $3.5 million criminal fine, perform
community service valued at $750,000 and serve three years probation.
In United States v. Tyler Pipe, a Texas McWane division pled guilty to
presenting false statements and to violating the Clean Air Act. It was
ordered to pay a $4.5 million criminal fine and serve a five-year
probation term, during which it must perform specified upgrades at a
cost of approximately $24 million. In United States v. Pacific States,
McWane and a company executive pled guilty to Clean Air Act violations
in connection with operation of an iron foundry division in Utah.
McWane was ordered to pay a $3 million criminal fine and serve a three-
year probation term. In United States v. McWane, Inc., a jury convicted
the corporation (acting through a Birmingham-based division) and three
high-ranking company officials of crimes related to six years of Clean
Water Act violations. A fourth defendant pled guilty. McWane was
ordered to pay a criminal fine of $5 million and perform community
service valued at $2.7 million.
Over the years, the Division has come to recognize the importance
of developing partnerships with U.S. Attorneys' Offices, state
Attorneys General and other state and local officials across the
nation. In so doing, we are able to leverage our resources and increase
our effectiveness. We have numerous successful examples of joint
enforcement with the State Attorneys General. In one recent case
involving the Clean Water Act's provisions governing discharge of storm
water from large construction sites, the Division obtained a consent
decree with Wal-Mart Stores, Inc.--the nation's largest retailer and
one of its largest commercial developers--that resolved claims covering
24 locations in 9 states. The United States was joined in the
settlement by the States of Tennessee and Utah. Wal-Mart will pay a
civil penalty of $3.1 million, undertake a supplemental environmental
project to protect sensitive wetlands or waterways, and implement a $62
million compliance program. This settlement is serving as a model in
ongoing negotiations with other large commercial and residential
developers.
Although the public is generally familiar with the Division's role
in enforcing environmental laws, about half of our attorneys' time is
actually spent on non-discretionary cases. Many of our cases involve
defending the United States for alleged violations of the environmental
laws, for example, in connection with federal highway construction,
airport expansion, or military training. Effective representation by
Division attorneys in these cases is critical to agency implementation
of Congressionally mandated programs and protection of the public fisc.
In one recent case, Basel Action Network v. Maritime Administration,
the Division successfully defended the Maritime Administration's
decision to export 13 obsolete shipping vessels to the United Kingdom
for dismantling, recycling, and disposal. The presence of deteriorated
ships in the fleet has been a point of controversy in the past, and the
Administration has worked hard to remove obsolete vessels. The
Division's successful work in this case allowed the agency to move
forward with a critical disposal program. In Air Pegasus of D.C. v.
United States, the Division represented the Federal Aviation
Administration (FAA) with respect to the FAA's restriction of airspace
near and over the Capitol in the wake of the September 11, 2001
attacks. In response, a company sued the United States for a Fifth
Amendment taking because it could no longer operate a heliport near the
U.S. Capitol. We successfully argued that the company did not have a
compensable right to access public airspace. In Center for Native
Ecosystems v. Forest Service, the Division represented the Forest
Service in an Administrative Procedure Act claim challenging its
livestock grazing authorizations in the Pole Unit of the Medicine Bow
National Forest, near Laramie, Wyoming. Plaintiffs alleged violations
of state water quality standards applicable at federal facilities under
the Clean Water Act as well as claims under the Endangered Species Act.
The court recently held for the Forest Service, determining that it had
complied with the applicable water quality standards and Endangered
Species Act requirements.
In the wildlife and natural resources context, we have in the past
year successfully defended a variety of federal agencies. For example,
in Oceana v. Evans, both environmental and industry groups challenged
fishing regulations promulgated under the Magnuson-Stevens Fishery
Conservation and Management Act by NOAA Fisheries. The environmental
groups argued that the regulations did not sufficiently limit over-
fishing and did not adequately analyze and protect essential fish
habitat. Industry groups argued that the over-fishing restrictions were
too stringent and exceeded the Secretary's authority. The Court ruled
for NOAA on all important claims. In Northwest Environmental Advocates
v. NMFS, we successfully defended the Army Corps of Engineers in a
lawsuit that sought to enjoin it from proceeding with a channel
deepening project in the Columbia River needed to provide for
navigation to the Port of Portland. The plaintiffs challenged the
Corps' actions under the Endangered Species Act as well as the National
Environmental Policy Act. The Corps had worked hard to resolve
difficult issues of sediment transport in the Columbia River and
impacts on the salmon species, consulting with NOAA Fisheries,
preparing a substantial environmental analysis, and even using outside
peer reviewers to consider whether the Corps and NOAA had considered
the best available scientific information. The Court ruled for the
Corps on all counts, allowing the dredging to proceed.
We also have protected the taxpayer from invalid or overbroad
monetary claims against the United States, claims that sometimes
involve hundreds of millions of dollars. As part of our responsibility
to protect the public fisc against unwarranted claims, the Division
prevailed against claimants who sought to recover for the conversion of
railroad rights-of-way to multipurpose trails on an untimely basis. The
Federal Circuit adopted the Division's argument on when the statute of
limitations begins to run in such cases in Caldwell v. United States.
Following that precedent, the Division succeeded in having three such
cases dismissed this past year. The Division also succeeded in
clarifying the compensation rights of landowners served by the Bureau
of Reclamation. In Klamath Irrigation District v. United States, the
Klamath Irrigation District and numerous other irrigation and
improvement districts, businesses and individuals sought approximately
$100 million based on the Bureau of Reclamation's operation of the
Klamath Project during a serious drought in 2001. The court granted
summary judgment in favor of the United States as to plaintiffs'
takings claims, finding that any interest in project water was
contractual and not a property interest compensable under the Fifth
Amendment.
The Division's docket also includes non-discretionary eminent
domain litigation. This work, undertaken pursuant to Congressional
direction or authority, involves acquiring land for important national
projects. In one recent case, the Division represented the United
States in litigation to acquire land needed for construction of a
second fence and patrol zone along the San Diego-Tijuana border.
Following a trial in which the landowner demanded just compensation of
nearly $75 million, the jury returned a verdict that just compensation
for this taking was $1.2 million. The Division also exercised the
federal government's power of eminent domain to acquire land to: expand
the National Defense University and Fort McNair; establish a port
facility in Florida for the Navy to use in shipping weapons around the
globe; provide a security buffer for the U.S. Southern Command
headquarters; expand the safety zone next to the Marine Corps Air
Station in Yuma, Arizona; facilitate the Army's transformation of a
light infantry division to a Stryker Brigade Combat Team; improve
security at the Puget Sound Naval Shipyard in Washington; and expand a
Nellis Air Force Base flight zone.
The protection of tribal resources has been among the duties of the
Division from its earliest days. The United States holds title to 56
million acres of lands in trust for the benefit of Indian tribes and
their members, and the Division initiates litigation and defends suits
seeking to protect these lands and resources from incursion by third
parties. The Division represents tribal and federal interests in water
rights, land-into-trust, and land claims adjudications. Recently, the
Division settled three complex major water rights adjudications in
which the United States had asserted water rights claims for the
benefit of tribes. In the Snake River Basin Adjudication (Idaho), the
Division worked with the Interior Department, the State of Idaho, and
the Nez Perce Tribe to craft an historic settlement, ratified by
Congress in the Snake River Water Rights Act. The Division also worked
with the Department of the Interior, the State of Arizona, the Gila
River Indian Community, and private water users to settle the Gila
Community's water claims in In Re Gila River System and Source (Ariz.),
which Congress ratified in the Arizona Water Settlements Act. A
settlement in Arizona v. California concluded a 54-year-long original
action in the Supreme Court, which dealt with, among other things, the
claims of the Quechan Indian Tribe to water rights in the Colorado
River. As part of its work litigating to protect land held in trust for
Tribes, the Division recently settled Seneca Nation v. New York (Cuba
Lake), an action asserting an unlawful trespass on tribal lands. This
150-year-old dispute was resolved by a settlement among the United
States, New York, and the Seneca Nation.
The Division's work also includes defense of the United States in
some thirty-one tribal trust lawsuits brought by twenty-eight different
Indian Tribes alleging that the U.S. has mismanaged tribal assets and
failed to provide an ``accounting'' of the money collected, managed and
disbursed by the U.S. on behalf of the Tribes. These cases concern the
scope of the duty owed to Tribes for land that the government has held
in trust since the late 1800s and that has been used, among other
things, for grazing, logging, and oil and gas exploration. Some of
these cases seek an order requiring the U.S. to perform a multi-million
dollar, multi-year accounting, and others seek a money judgment for
losses the Tribes claim they have suffered. New claims may be filed
through December 31, 2006. Over 250 Tribes have potential trust
accounting and trust mismanagement claims. In the thirty-one cases
filed so far, the Tribes claim they are owed more than $220 billion.
The Division recently reached a settlement with one Tribe and is in
settlement discussions with a number of others.
ENRD'S BUDGET REQUEST FOR FISCAL YEAR 2007
The Division receives its annual appropriation from the General
Legal Activities (GLA) portion of the Justice Department's
appropriation. For fiscal year 2007, the President has requested
$95,051,000 for the Division within the Justice Department's GLA
appropriation. The increase of $2,277,000 over the FY 2006
appropriation is due to mandatory adjustments and allowances, including
pay raises, other salary adjustments, and rent adjustments, which will
allow the Division to maintain its current level of operations.
CONCLUSION
The Environment Division takes pride in an exceptional record of
assuring that polluters are made to comply with the law, violators of
criminal laws are punished appropriately, and responsible private
parties are made to clean up Superfund sites rather than leaving the
taxpayer on the hook. We are also justly proud of our efforts to defend
the Executive branch agencies when their actions are challenged over
matters which are within the Division's jurisdiction. Both our complex
and challenging affirmative and defensive work is vitally important to
the implementation of both Executive and Congressional programs and
priorities regarding public health and the environment, to the
protection of the public fisc, and to the advancement of the public
interest generally.
I would be happy to answer, to the extent that I am able, any
questions you might have about the Division and its work.
Mr. Cannon. Thank you. To the point. Appreciate that.
And Mr. White, you're recognized for 5 minutes.
TESTIMONY OF CLIFFORD J. WHITE, ACTING DIRECTOR, EXECUTIVE
OFFICE FOR UNITED STATES TRUSTEES, UNITED STATES DEPARTMENT OF
JUSTICE, WASHINGTON, DC
Mr. White. Thank you, Mr. Chairman, Mr. Watt.
I appreciate the opportunity to appear before you to
discuss the U.S. Trustee Program's recent efforts to promote
the integrity and efficiency of the bankruptcy system and our
request for appropriations for fiscal year 2007.
Over the past year, we've continued to make progress in
combating bankruptcy fraud and abuse. Last year, we took more
than 50,000 civil enforcement actions in and out of court,
yielding $594 million in debts not discharged, fines,
penalties, and other monetary results. Over the past 3 years,
we've taken about 165,000 actions, yielding more than $1.7
billion in monetary results.
We also continue to enhance our criminal enforcement
capability. Led by a headquarters unit of 4 former career
Federal prosecutors, plus an additional 25 program attorneys in
the field who have been designated as special assistant U.S.
attorneys, last year we increased the number of criminal
referrals by 12 percent.
We successfully carried out numerous other duties, such as
expediting business reorganizations and overseeing private
trustees. For these and other efforts and for establishing
performance-based management systems, the Office of Management
and Budget rated the U.S. Trustee Program as ``effective'' and
gave us a numerical score that's among the highest 15 percent
in the executive branch.
Beginning on October 17th of last year, the U.S. Trustee
Program assumed substantial new responsibilities to enforce and
to implement many of the key provisions of the new bankruptcy
reform law. As reported to you at a hearing last July, the
program engaged in an extraordinary effort to develop
comprehensive implementation plans so that we were prepared to
carry out our duties on the general effective date of the new
law.
Now, the magnitude of the challenge of implementing
bankruptcy reform increased with the additional burden of
administering more than 725,000 cases that were filed during
the 4 weeks before the effective date. Despite the difficulties
presented by the pre-bankruptcy reform filing surge, we believe
we've made great progress in enforcing and implementing the new
law. We're acquiring valuable information every day as we gain
experience enforcing the statute.
In the area of means testing, we're timely processing
chapter 7 cases and identifying cases that are presumed abusive
under the new objective statutory standard. We're bringing
motions to dismiss in more than 70 percent of the presumed
abusive cases and are exercising our discretion not to file
cases in which the debtor has special circumstances, such as
expense adjustments caused by Hurricane Katrina.
In the area of credit counseling and debtor education,
we've approved well over 350 providers covering all districts
within our jurisdiction. We excepted four districts from the
requirements because of the impact of Hurricane Katrina.
We are timely processing applications, and we have denied
applicants on grounds such as failure to provide information in
connection with ongoing IRS audits, for inappropriate
relationships with third parties which may generate benefit for
a private party, and for failure to make appropriate
disclosures to clients about fees.
Now that the initial approval process is concluded and
reapprovals are underway, we're working closely with the IRS
and the Federal Trade Commission to refine the application and
post-approval auditing process. We will shortly publish a
slightly revised application as an interim rule and will
publish a more comprehensive rule for public comment not long
thereafter.
We're also carrying out numerous other responsibilities
under bankruptcy reform, including in such areas as small
business chapter 11 cases, debtor audits, and studies and data
collection.
The Administration has requested FY '07 appropriations of
$236.1 million. This represents an increase of 11.6 percent
over FY '06. The request includes $11.2 million in mandatory
adjustments and $12.7 million in program enhancements that
would be devoted exclusively to bankruptcy reform.
These enhancements are $4.8 million to fund debtor audits
required under the new law; and $7.9 million in enhancements
requested but not appropriated last year, including 51
additional positions, related facilities expansion, information
technology, and studies and reports due to Congress.
The U.S. Trustee Program is funded by bankruptcy fees. The
FY '07 revenue projections submitted with our budget follow
Congressional Budget Office filing projections that were made
before the October spike in filings and before the subsequent
decline in filings.
This is an unprecedented opportunity for the U.S. Trustee
Program to make bankruptcy reform work for all stakeholders in
the system--debtors, creditors, and the general public. The new
law provides us with important new tools to enhance the
integrity and efficiency of the system. Enforcement and
implementation of the law has presented many daunting
challenges, but we believe that we are now off to an excellent
start.
I again thank you for the opportunity to appear here today
and will be pleased to answer any questions from the
Subcommittee.
[The prepared statement of Mr. White follows:]
Prepared Statement of Clifford J. White, III
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to appear before you to discuss the
United States Trustee Program's (USTP or Program) recent activities,
including our implementation of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (BAPCPA). This past year has been
extraordinarily busy for the Program and the bankruptcy system. I will
update you today on achievements in our key areas of responsibility, as
well as highlight our significant progress in making the new bankruptcy
reform law work as intended by Congress for the benefit of debtors,
creditors, and the public.
The United States Trustee Program is the component of the
Department of Justice whose mission it is to promote the integrity and
efficiency of the bankruptcy system by enforcing bankruptcy laws,
appointing and overseeing private trustees, and carrying out important
regulatory and administrative duties. In addition to our obligations
under titles 11 and 28 of the United States Code, the Program has been
given vast new responsibilities under the BAPCPA.
promoting the integrity and efficiency of the bankruptcy system
The USTP continues to make significant progress in combating
bankruptcy fraud and abuse and taking other important actions to
promote the integrity and efficiency of the bankruptcy system.
Civil Enforcement
For the past five years, the centerpiece of the Program's anti-
fraud and abuse efforts has been the National Civil Enforcement
Initiative. The Initiative focuses on wrong-doing both by debtors and
by those who exploit debtors. The Program combats debtor fraud and
abuse primarily by seeking case dismissal if a debtor has an ability to
repay debts and by seeking denial of discharge for the concealment of
assets and other violations. The Program protects consumer debtors from
wrongdoing by attorneys, bankruptcy petition preparers, creditors, and
others by seeking a variety of remedies, including disgorgement of
fees, fines, and injunctive relief.
Since FY 2003, more than 165,000 civil enforcement and related
actions have been brought by the Program, yielding $1.75 billion in
monetary results. In FY 2005, more than 50,700 actions were initiated
that generated nearly $594 million in potential returns to creditors
through debts not discharged and other remedies. USTP attorneys
prevailed in over 96 percent of the actions resolved by judicial
decision or consent in the fundamental areas of dismissal for
substantial abuse (11 U.S.C. Sec. 707(b)), denial of discharge (11
U.S.C. Sec. 727), fines against bankruptcy petition preparers (11
U.S.C. Sec. 110), and disgorgements of debtor attorneys' fees (11
U.S.C. Sec. 329).
Following are illustrative examples of the variety of cases brought
under the National Civil Enforcement Initiative.
<bullet> The Bankruptcy Court for the District of Oregon
revoked the discharge of a debtor who tried to discharge
$1,931,157 in unsecured debt. Discovery initiated by the U.S.
Trustee's office in Portland suggested the debtor had
transferred to his girlfriend more than $400,000 from a company
he controlled, and then concealed the transfer. He also
allegedly made false statements and false oaths in his
bankruptcy case.
<bullet> In response to a motion by the U.S. Trustee's New
York office seeking dismissal for substantial abuse, a debtor
converted to chapter 11. The debtor, a financial consultant,
earned almost $300,000 per year and listed $470,735 in
unsecured debt. Although his wife did not work, the debtor
scheduled the following monthly expenses relating to his four-
year-old son: $1,650 for an apartment for an au pair, $516 for
the au pair, $1,375 for a private school, and $560 for day
care. Other scheduled monthly expenses included $6,307 for
apartment rent and utilities, $3,600 for recreation, $1,600 for
clothing, $1,121 for dry cleaning, $650 for transportation,
$560 for maid service, and $450 for telephone. The debtor also
maintained a condominium in Marseille, France.
<bullet> The Bankruptcy Court for the Central District of
California granted a motion to dismiss by the U.S. Trustee's
Los Angeles office, preventing the discharge of $316,571 in
debt on 79 credit cards. The debtor, who lived with his
parents, claimed no secured debt, no income, and no expenses.
The U.S. Trustee sought dismissal for substantial abuse because
the debtor incurred the credit card debt at a time when he
earned less than $8,000 a year.
<bullet> On motion of the U.S. Trustee's Pittsburgh office,
the Bankruptcy Court for the Western District of Pennsylvania
barred an attorney from practice before the bankruptcy court
after she misappropriated client funds. During a chapter 13
proceeding, the attorney attended the closing of a sale of her
clients' real property. A check for approximately $104,000 was
made payable to the chapter 13 trustee to pay off the mortgage.
The attorney deposited the check into her own account instead
of delivering it to the trustee. The sale proceeds were used,
at least in part, to pay the attorney's federal tax debt and to
pay other clients from whom she misappropriated funds.
The Program has also pursued instances of creditor abuse. One
recent example involved conduct by the financing arm of a national
consumer goods manufacturer that was unfairly pressuring unrepresented
debtors to reaffirm debt on goods, even though the manufacturer had
asserted no lien or security interest in the goods and the debtors did
not need to enter into a reaffirmation agreement in order to retain the
goods. A coordinated response resulted in the courts denying the
creditor's attempts to have debtors reaffirm dischargeable debts.
Criminal Enforcement
Criminal enforcement is another key component of the Program's
efforts to promote the integrity of the bankruptcy system. In 2003, the
Criminal Enforcement Unit (CREU) was established to coordinate the
criminal referral responsibilities carried out by our 95 field offices
and to directly assist prosecutors in pursuing bankruptcy crimes. CREU
has made a marked difference in the quality of our criminal program by
providing extensive training, developing resource materials, and
enhancing coordination for the benefit of USTP staff, federal
prosecutors, and other law enforcement personnel.
In FY 2005, the Program made 744 criminal referrals, a 12 percent
increase over FY 2004. In many cases, USTP lawyers directly prosecuted
or assisted the prosecution team in cases initiated as a result of
criminal referrals made by Program offices. Four veteran career
prosecutors within CREU, plus approximately 25 attorneys in field
offices across the country who have been designated as Special
Assistant U.S. Attorneys, are available to try cases involving
bankruptcy crimes. In addition, the majority of Program field offices
participate in bankruptcy fraud workings groups which are headed by
U.S. Attorneys' offices and often involve the FBI, USPIS, IRS-CI, and
HUD-OIG. With the enactment of 18 U.S.C. Sec. 158 as part of the
BAPCPA, every United States Attorney office is required to designate a
prosecutor and every FBI field office an agent who will assume primary
responsibility for bankruptcy fraud cases. This provision will further
strengthen existing working groups by formalizing points of contact and
provide a foundation for establishing working groups where currently
none exist.
Some recent examples of successful prosecutions that originated
with criminal referrals from the USTP follow.
<bullet> A former commodities trader and investment firm
executive was sentenced in the Northern District of Illinois to
190 years in prison and ordered to pay $1.4 million in
restitution following his conviction on 18 counts of bankruptcy
fraud, wire fraud, and money laundering, and one count of using
a fire to commit wire fraud. The defendant intentionally set
fire to his residence to obtain insurance money, making it
appear as if the fire were set by his elderly mother, who died
in the fire. After receiving the insurance proceeds, he
secreted them in an offshore account in Curacao. He later filed
bankruptcy and concealed the offshore account containing more
than $300,000. The case was prosecuted by the Program's
Regional Criminal Coordinator in Chicago, and an Assistant U.S.
Trustee from Atlanta testified as an expert witness.
<bullet> A debtor in the Western District of Tennessee was
sentenced to 46-months in prison for her use of two stolen
Social Security numbers in two bankruptcy filings and her
failure to disclose prior bankruptcy filings. The debtor was
also ordered to pay restitution. The Memphis office referred
the matter for investigation and a trial attorney from that
office served as a Special Assistant U.S. Attorney.
<bullet> A bankruptcy attorney in the Southern District of
Texas was sentenced to 30 months in prison and five years
probation based on her guilty plea to wire fraud and bankruptcy
fraud. The attorney defrauded her clients and their creditors
by incurring unauthorized charges on her clients' credit cards
and by taking possession of and using collateral her clients
intended to surrender to creditors. The Program's Houston
office referred the matter and assisted in the investigation
and prosecution.
Chapter 11 Reorganizations
The Program carries out a wide array of responsibilities in chapter
11 reorganization cases. Our primary role is to ensure that cases
proceed expeditiously and with transparency in accordance with law. By
statute, our principal responsibilities include: the appointment of
official committees of creditors and equity holders; objections to the
retention and compensation of professionals; the review of disclosure
statements, particularly in smaller cases; and the appointment of
trustees or examiners when warranted. Chapter 11 cases often present
the Program with highly complex issues of law and require time
intensive financial reviews.
In FY 2005, the Program filed nearly 3,000 motions to convert or
dismiss chapter 11 cases. The grounds for such motions, which are
critical to the effective functioning of the reorganization provisions
of the Bankruptcy Code, typically include failure to file financial
reports or dissipation of estate assets without a reasonable likelihood
of rehabilitation.
Provided below are some recent examples of important actions taken
by the Program in larger chapter 11 cases:
<bullet> After much negotiation, the Program reached a
stipulated agreement with the management services provider in
the chapter 11 case of Enron Corporation to reduce by $12.5
million the success fee it requested for its work in the case.
In reviewing the provider's motion for a $25 million success
fee, the U.S. Trustee initiated an investigation that uncovered
unacceptable billing practices and billing irregularities. The
bankruptcy court held a hearing on the motion, but withheld its
ruling pending the filing of a response by the U.S. Trustee.
The stipulated agreement was approved by the bankruptcy court
on March 24, 2006.
<bullet> The Tenth Circuit Court of Appeals in Houlihan Lokey
Howard & Zukin Capital v. Unsecured Creditors' Liquidating
Trust (In re Commercial Financial Services, Inc.), 427 F.3d 804
(10th Cir. 2005), affirmed a ruling by the Bankruptcy Appellate
Panel for the Tenth Circuit, denying fees to the financial
advisor for the committee of asset-based securities holders.
Upon objection by the Tulsa office and the unsecured creditors'
committee, the Bankruptcy Court for the Northern District of
Oklahoma denied fees of more than $1.9 million sought by the
financial advisor, which were determined according to a flat
monthly rate. The bankruptcy court did, however, allow fees of
$905,000 based on an hourly rate supported by contemporaneous
time records. The Bankruptcy Appellate Panel affirmed this
ruling and the financial advisor appealed. The Tenth Circuit
Court of Appeals ruled that the bankruptcy court appropriately
exercised its powers to require the financial advisor to report
the number of hours it worked and to calculate a reasonable fee
looking to rates charged by other financial advisors employed
in the case.
<bullet> Based upon action brought by the Boston office, the
Bankruptcy Court for the District of Massachusetts agreed that
a chapter 11 trustee should be appointed in related cases filed
barely 180 days after the debtors' reorganization plan was
confirmed in a prior chapter 11 case. In addition to objecting
to the debtors' request for financing, the U.S. Trustee noted
potential conflicts of interest of various professionals and
the debtors' failure to inform the court of the failed prior
chapter 11 case or to produce current financial information.
Within about six months after being appointed by the U.S.
Trustee, the chapter 11 trustee negotiated sales of the
debtors' assets, including the sale of a manufacturing facility
for approximately $181 million, a sum sufficient to pay general
unsecured claims in full and provide a substantial distribution
to equity holders.
Private Trustee Oversight
One of the core functions of the United States Trustees is to
appoint and supervise the private trustees who administer consumer
bankruptcy estates and distribute dividends to creditors. The Program
also trains trustees, evaluates their overall performance, reviews
their financial accounting, and ensures their prompt administration of
estate assets.
In FY 2005, over 1.6 million consumer and other non-business
reorganization cases were filed under chapters 7, 12, and 13 of the
Bankruptcy Code in the 88 judicial districts covered by the Program.
The U.S. Trustees oversee the activities of the approximately 1,800
private trustees appointed by them to handle the day-to-day activities
in these cases. With distributions by these trustees of about $5.3
billion last fiscal year, the Program's effectiveness in this area is
critical. The Program has continued to strengthen its partnership with
the private trustee organizations to address areas of mutual concern
and enhance the operation of the bankruptcy system. In preparation for
assuming new responsibilities under bankruptcy reform, the Program
worked closely with the trustees and provided extensive training.
Two other ongoing efforts that have been undertaken to enhance
consumer bankruptcy case administration are: the development of uniform
trustee final reports which will improve access to case data and allow
for greater analysis of the bankruptcy system; and coordination with
the Internal Revenue Service on the use of a new protocol that enables
trustees to obtain the federal tax refunds of debtors directly from the
Service.
Management Accomplishments
In January 2006, the Office of Management and Budget (OMB)
completed its review of USTP operations under the Program Assessment
Rating Tool and awarded the USTP its highest rating of ``effective.''
The Program's numerical score placed it among the top 15 percent of
highly performing agencies in the Executive Branch. The OMB rating
reflected the USTP's efforts over the past five years to adopt
performance-based management systems, including better measurements of
results achieved and tying programmatic success to budget formulation.
BANKRUPTCY REFORM
The United States Trustee Program has responsibility for carrying
out many key features of the bankruptcy reform law. From enactment of
the BAPCPA in April through the general effective date of October 17,
2005, the Program engaged in an extraordinary effort to develop
comprehensive implementation plans and issue guidance necessary to
accomplish our new and expanded responsibilities.
The magnitude of the challenge of implementing bankruptcy reform
increased substantially with the additional burden of administering the
unprecedented number of bankruptcy cases filed immediately prior to the
October 17 effective date. In the four weeks leading up to that date,
more than 726,500 cases were filed in the 88 judicial districts covered
by the Program. By contrast, post-October 17 filings have decreased
substantially, with only about 115,000 cases having been filed in the
subsequent five months. The filing rate is increasing at a moderate
pace.
Despite the difficulties presented by the pre-BAPCA filing surge,
we have made great progress implementing and enforcing many of the new
law's important provisions. Moreover, we are acquiring valuable
information every day as we gain experience in enforcing statutory
provisions and in carrying out wholly new responsibilities that were
not previously part of our mission. We expect that we will be engaged
in a significant amount of litigation as bankruptcy courts are called
upon to interpret statutory provisions for the first time. Of important
note is our coordination with the Justice Department's Civil Division
in defending the early challenges to the constitutionality of the debt
relief agency provisions of the BAPCPA.
The new law provided substantial additional responsibilities to the
Program primarily, but not exclusively, in five major areas: means
testing; credit counseling and debtor education; small business chapter
11s; debtor audits; and studies and data collection. This past year, we
have dedicated significant resources to developing appropriate
policies, procedures, and systems to ensure successful implementation.
A critical part of our work has been outreach to the bench, the bar,
other state and federal agencies, the private trustee organizations,
and industry and consumer groups.
Means Testing
The means testing provisions of the BAPCPA provide an objective
approach for assessing a debtor's eligibility for chapter 7 relief.
Under the means test, debtors with income above their State median
income will be presumed abusive if they have a certain level of
disposable income after the deduction of expenses allowed under the
statutory formula. Among other things, United States Trustees must file
a statement within 10 days of conclusion of the section 341 meeting of
creditors if the case is presumed abusive. Within 30 days thereafter,
the UST must file a motion to dismiss the case or provide an
explanation as to why such a motion is not warranted.
The Program has worked extensively with the Judicial Conference's
Advisory Committee on Bankruptcy Rules in its development of the
necessary official forms and accompanying rules to perform the means
test. In addition, in the absence of a mandate by the Administrative
Office of United States Courts to require data tagging software, the
Program deployed its own partially automated system to expedite
calculations of debtor information under the statutory means testing
formula. Moreover, the Program made a major investment in training
field personnel to perform the means test, including guidance to
attorneys on the appropriate exercise of discretion in deciding whether
to file a motion to dismiss a case under the presumed abuse standard.
To that end, we issued a directive to ensure that our staff consider
the adverse financial impact of Hurricane Katrina to generally
constitute special circumstances that outweigh the presumed abuse
criterion for dismissal.
As of March 31, 2006, of the cases where a review had been
completed, the Program had filed 84 motions to dismiss under 11 U.S.C.
Sec. 707(b)(2) and 32 declination statements explaining why a motion to
dismiss was not appropriate. The most common reasons for declination
have been the debtor was a victim of Hurricane Katrina which supports
an expense adjustment as a ``special circumstance,'' or the debtor
experienced a post-petition change in status that supports an income
adjustment, such as seasonal employment or disability.
Credit Counseling and Debtor Education
The credit counseling and debtor education provisions of the reform
law provide potentially salutary protections for consumer debtors by
helping ensure that debtors enter bankruptcy with full knowledge of
their options and exit with information to help them avoid future
financial calamity.
The USTP is charged with responsibility to approve eligible
providers of credit counseling and debtor education services.
Individual debtors generally must seek counseling from these providers
as a condition of filing and receiving a discharge of debts. Although
enforcement practices differ according to local court rules, USTP
offices often are the primary agency ensuring debtor compliance.
The USTP has determined that there is adequate capacity to provide
debtors with credit counseling and debtor education services in every
district within our jurisdiction, except for the four districts
impacted most significantly by Hurricane Katrina. In those four
districts, the Program temporarily waived the statutory requirements
for credit counseling and debtor education due to infrastructure
impediments and the dislocation of a large numbers of residents. As of
the end of March 2006, the Program had approved 142 credit counseling
agencies covering 88 judicial districts for pre-bankruptcy counseling.
In addition to offering Internet and telephonic access, there are 754
walk-in locations for credit counseling throughout 82 judicial
districts. For post-bankruptcy debtor education, by the end of last
month, the Program had approved 241 debtor education providers covering
88 judicial districts. In addition to debtor education providers
offering Internet and telephonic access, there are 915 walk-in
locations in 82 judicial districts.
Applications and reapplications from credit counseling agencies and
debtor education providers are received and processed continuously. We
are currently processing complete applications within 30 to 45 days of
receipt, and work with applicants where there are deficiencies to
collect additional information as needed so they can qualify for
approval. Common reasons for the delay or denial of approval of credit
counseling agencies are failure to demonstrate nonprofit status,
failure to provide information in connection with on-going audit of an
agency's activities by the Internal Revenue Service, failure to
demonstrate independence of the board of directors, and inappropriate
relationships with a third party which appear to generate private
benefit to an individual or group. The delay or denial of debtor
education provider applications generally relate to inadequate
materials; failure to employ trained personnel; and fee disclosure
issues.
The Program is working with the Internal Revenue Service and the
Federal Trade Commission to refine the application and post-approval
auditing process. In addition, we are proceeding with formal rule-
making and, in the near term, expect to publish slightly revised
applications as Interim Rules. Thereafter, we will publish in the
Federal Register more comprehensive, proposed final rules for public
notice and comment. This process will give the Program more latitude in
developing standards that address the myriad issues that arise in the
regulation of credit counseling agencies and debtor education
providers.
Small Business Chapter 11 Cases
The small business provisions of the BAPCPA establish new deadlines
and greater uniformity in financial reporting to ensure that cases move
expeditiously through the chapter 11 process before assets are
dissipated. They also provide important new enforcement tools to the
United States Trustees. To implement the BAPCPA's oversight provisions,
the Program developed a new Monthly Operating Report (MOR) form for
small business chapter 11 cases to make financial reporting simpler and
more uniform. A pilot of the MOR is being conducted and, at a recent
meeting of the Judicial Conference's Advisory Committee on Bankruptcy
Rules, the Program presented its initial analysis. While it is still
early in the process, the Committee voted to recommend the MOR form,
with a few modifications, to be published for public comment as a
proposed Official Form which the BAPCPA requires be promulgated by the
Judicial Conference. The Advisory Committee also sought input from the
USTP on drafting a form small business plan and disclosure statement
which will be issued for public comment as well.
Although it is too soon to measure the effect of the small business
provisions in cases filed after October 17th, our field offices are
tracking the new deadlines and routinely use the new initial debtor
interview (IDI) provision to identify important issues early in the
case. For example, the IDI process recently helped identify two cases
as health care businesses that may require appointment of an ombudsman
to protect patients. Other information yielded from the IDIs has
included early disclosure of the failure of debtor businesses to file
tax returns and the identification of financial irregularities
requiring immediate corrective action or case dismissal.
Debtor Audits
Under BAPCPA, the USTP must contract for random and targeted audits
to verify the financial information provided by debtors. This provision
will help the Program identify fraud, deter the filing of false
financial information, and potentially provide a baseline for measuring
fraud, abuse, and errors in the bankruptcy system. The debtor audits
mandated by the BAPCPA will commence on October 20, 2006--18 months
after the law's April 20, 2005, enactment date. Independent auditors
will conduct random audits of no fewer than 1 of every 250 cases in
each judicial district. They will also conduct targeted audits of cases
filed by debtors with income and expenses higher than the norm of the
district. An estimated 7,338 cases will be audited in the first year,
with 6,338 random audits and 1,000 targeted audits. The Program expects
to issue a Request for Proposals for contract auditors by the end of
May.
Studies and Data Collection
The BAPCPA requires the EOUST to undertake several studies,
including (1) consulting with experts in the field of debtor education
to develop, test, and evaluate a financial management training
curriculum and materials; (2) evaluating the impact of the use of the
IRS standards for determining the current monthly expenses under 11
U.S.C. Sec. 707(b) on debtors and bankruptcy courts; and (3) evaluating
the impact of the new definition of ``household goods'' in section 313
of the BAPCPA.
Data collection and extraction will be important to the successful
completion of these studies, particularly those of the IRS standards
and household goods, and to the effective and efficient processing of
cases. Last year, a Senate Appropriations Committee Report endorsed the
idea of the Administrative Office of the U.S. Courts (AOUSC) working
with the U.S. Trustee Program on the development of data tags to
provide an automated approach to extracting essential data from
bankruptcy forms for such purposes as analyzing the means test,
selecting cases for targeted debtor audits, conducting the evaluation
studies, reporting to Congress, and processing cases more efficiently.
A document containing data tags is sometimes referred to as a ``smart
form'' that is, a form that is data-enabled so that, when it is saved
into the industry standard Portable Document Format (PDF), it contains
searchable data. I am pleased to report that the Program, in
conjunction with the AOUSC, developed a smart form standard that was
released to the bankruptcy form software vendors. AOUSC is now
considering whether to make smart forms mandatory.
FISCAL YEAR 2007 APPROPRIATIONS REQUEST
The Administration has requested FY 2007 appropriations of $236.1
million, including 1,519 positions and 1,486 workyears. This represents
an increase of 11.6 percent over FY 2006. Included in the request is
$11.2 million for mandatory adjustments to base necessary to meet pay
and rent increases and to fund second year costs associated with the
270 new positions approved in FY 2006. The budget also requests program
enhancements totaling $12.7 million. The program enhancements would be
devoted exclusively to bankruptcy reform--$4.8 million to fund the new
debtor audits required under the BAPCPA which will commence on October
20, 2006; and $7.9 million in enhancements requested, but not
appropriated last year, including $5.1 million and 51 new positions for
means testing and credit counseling, $2.3 million for related
facilities expansion, $1 million for information technology, and
$500,000 for statutorily mandated studies.
The USTP is funded entirely from bankruptcy filing fees and chapter
11 quarterly fees. As fees are collected, they are deposited into the
U.S. Trustee System Fund and available to the Program as appropriated
by the Congress. The FY 2007 revenue projections that accompany the
USTP budget request follow Congressional Budget Office estimates for
bankruptcy filings. These estimates were made prior to the pre-October
17 bulge in bankruptcy filings and without regard to the subsequent
concomitant filing decrease.
__________
This is a time of unprecedented opportunity for the United States
Trustee Program to make bankruptcy reform work for all stakeholders in
the bankruptcy system, including debtors, creditors, and the public.
The new law provides many important tools that will assist the USTP in
enhancing the integrity and efficiency of the bankruptcy system.
Enforcement and implementation of the new law has created many daunting
challenges, but we believe that we are off to an excellent start.
Thank you for the opportunity to testify on the recent activities
of the United States Trustee Program. I am pleased to answer any
questions from the Subcommittee.
Mr. Cannon. Thank you, Mr. White.
Mr. Watt has another engagement. So we're going to defer
and recognize him for questioning.
Mr. Watt?
Mr. Watt. Thank you, Mr. Chairman.
And let me assure the witnesses that the fact that I have
to be somewhere else doesn't indicate a lack of interest in--it
just is I had my day kind of messed up when we got all off
schedule here. So I apologize for having to rush out.
Mr. Battle, let me just ask you if you can give me a little
bit more information about this gang violence initiative. What
falls under the gang violence rubric, and what kinds of things
your U.S. attorneys are going to be doing in terms of re-entry?
I asked this question of the Attorney General at a prior
oversight hearing and didn't really get a clear understanding
of what was being proposed. Maybe--maybe it would be better for
you to submit something to me in writing, if you have
something. But at least elucidate a little bit for me.
Mr. Battle. Thank you, Member Watt.
One of the things we learned about a year ago, after the
Attorney General announced the gang initiative, we went out and
we canvassed the U.S. attorneys' offices to find out what the
gang problem looked, walked, and talked like in their various
communities. We had, at that point, been involved with the
Project Safe Neighborhoods program for a number of years.
And some of the feedback we were getting from U.S.
attorneys was that some of the violence that was going on in
the communities was being identified to them by the locals as
perhaps being taken on as the involvement of some of the
traditionally known gangs at that time, such as the Bloods and
the Crips, but in other communities, different kinds of
organizations. And one of the things that we've tried to do is
identify exactly what that would be.
What we found out was that there was no real formula, no
real similarity, but that each gang problem in each of the 90-
plus districts was something that looked a little bit
different, so that the U.S. attorneys were tailoring their
response with their local partners based upon what exactly was
going on in their community.
A somewhat definition of a gang would be, of course, an
activity taken on by three or more persons that would be
involved together for the purpose of carrying out a specific
act of violence or an act of criminality.
We have since gained a little bit more focus and learned
that no longer is it confined to the Crips and the Bloods, but
there is a problem with MS-13 individuals being imported from
parts of South and Central America, that these gangs are
particularly violent.
We've also learned that there are gang--there's gang
activity that sort of transcends free society into the prison
system. And in both situations, there is an activity on the
part of all law enforcement to gain and share intelligence.
So, to answer your question in some respects, it is a work
in progress, but it is not something that is not being
responded to. It's just being responded to on a case-by-case
basis, peculiar to each particular district's needs as they
identify their gang problem through their partnerships.
On the re-entry question, sir, again several districts
applied for and have re-entry coordinators. This was done
before the gang initiative. Six sites were announced by the
Attorney General several weeks ago. The re-entry program is, in
fact, a work in progress and, again, does, I apologize, look a
little bit different in each community.
But what they're looking to do is reach out, working with
State and local partners as well as Federal prison officials,
to try to reach individuals close to their release dates and
try to tailor, learn from them what they are going to need when
they're released and provide those things to catch them when
they do meet their release date and find their way back into
the community.
There's a faith-based component to it. There is a
connection between the community and release officials for
parole purposes and things of that nature. Probation
departments are involved. There are educational components in
situations where people need to get degrees or GEDs. And
there's a component that would assist them or is being proposed
to assist them in finding jobs.
Those are some of the things that I've heard being
discussed by the various U.S. attorneys, and each community's
response is different depending on their resources at the State
and local level and what their needs are. We think that which
has been proposed by the Attorney General will simply add to
those resources.
Mr. Watt. Can you talk to me a little bit about the status
of Project Seahawk and what plans have been made for
transitioning it to the Department of Homeland Security?
Mr. Battle. Yes, sir. In fact, as we speak and, from what I
recall, the President--since Homeland Security was not in
existence when Seahawk first came into existence, what we have
learned now, appropriately, is that because Homeland Security,
dealing with port security, is best suited, with the resources
that it has, to deal with that very issue.
It should be a seamless transition now to have
responsibility and oversight for Seahawk to go to the
Department of Homeland Security as opposed to the U.S.
attorneys' offices. They have the resources and the expertise
to do that.
And so, what we're really talking about is a program that's
going to continue in its present form, but it's going to have
oversight by an Agency that is best suited with the resources
to do it because the people that work there have been doing it
for a long time.
And the U.S. attorney of South Carolina will be a part of
that. He will have a seat on the board, and he will certainly
have a connection.
Mr. Watt. Mr. White, are we still ramping up the number of
bankruptcy judges required to do the bankruptcy reform bill?
Where are we on that? And what additional resources are needed
there?
Mr. White. Well, that's, of course, not directly within our
jurisdiction. But, yes, I am aware that bankruptcy judges are
being recruited in furtherance of the additional judgeships
that were created in the bankruptcy reform law.
I don't have any more specific information on that. That's
not part of our budget submission.
Mr. Watt. Okay. Mr. Keisler, I'm wondering whether the--
your division has pursued any debt collection activities
against corporate wrongdoers who have defrauded the Federal
Government? Are you involved in those kinds of litigation? And
give me kind of the extent of that effort and what's happening
there.
Mr. Keisler. It's a very vigorous and robust effort, sir.
We have 77 attorneys within Washington, the Civil Division, who
do nothing but work on fraud against the Government. And they
work in partnership with attorneys in the different U.S.
attorneys' offices, which also have been aggressively pursuing
this.
In each of the last----
Mr. Watts. Is that primarily against individuals, or is--is
it part individuals, part corporate?
Mr. Keisler. Part of each, but predominantly corporate.
Certainly, if you look at the amount of money recovered,
overwhelmingly the dollars come from corporate defendants.
Sometimes there are individuals involved. Often, they are
individuals who are corporate officers at the same corporations
that we're also filing suit against.
The largest component by industry is the health care
industry. You know, when the False Claims Act was first
revitalized in 1986 with the qui tam provisions, the archetypal
fraud defendant was a defense contractor. We still have defense
contractors as significant fraud defendants. But over time, the
health care industry has really become the lion's share of our
fraud recoveries.
I think it's a combination of the enormous amount of money
that goes out from the Federal Government, the complexity of
the regulations which I think creates temptations to try to
game the system. But we are very aggressively pursuing this,
these issues against anyone we get information has dealt
fraudulently with the United States taxpayer.
Mr. Watts. Thank you, Mr. Chairman.
I appreciate your allowing me to go and still get to my
meeting, and I'll yield back to the Chairman.
Thank you all.
Mr. Cannon. The gentleman yields back. I ask unanimous
consent that all Members of the panel have 5 days to submit
written questions for the panel. All Members of the Committee.
Hearing no objection, so ordered.
Thank you, Mr. Watt.
Gee, where do we start here? Let's start with MS-13. This
is a problem that goes beyond our cities here in America, where
we've destabilized Honduras, probably also El Salvador. Are you
working with those other countries to try and get a handle on
this problem?
Mr. Battle. I'm sorry, Mr. Chairman. I didn't hear the
first part of your question.
Mr. Cannon. I should have directed it to you, Mr. Battle.
Mr. Battle. Okay.
Mr. Cannon. But on MS-13, we now have a problem where we've
got other countries destablized by our deportation of
criminals. In fact, I believe that we have a treaty
responsibility with Mexico and probably these other countries
to inform them when we're sending--when we're deporting felons.
Are we working with these other countries to help crush
this problem, which is destablizing at least Honduras and
probably El Salvador?
Mr. Battle. From what I understand, the Assistant Attorney
General for the Criminal Division just recently attended a
conference in El Salvador, and we sent a member from EOUSA to
be there who's been working on the gang problems with us in the
U.S. attorneys' offices.
From what I understand, and I was not present at that
conference, there was much discussion with some of the member
countries there that would fit within the categories that
you've referred to, to talk about how to get their hands around
this. And there seems to be a lot of enthusiasm amongst them to
work together.
Mr. Cannon. We--if I just might note for the future, we're
likely to do something this year or maybe later this year with
immigration reform. That means we're going to focus on many,
many criminals who are now hiding from the system. And those--
the deportation of those criminals is going to be destabilizing
to many countries.
So what we're doing here with MS-13 is like we're way
beyond the power curve. I mean, this is just--what has happened
in Latin America is just atrocious. What is now reverberating
in our own communities is the backside of that atrociousness.
But it's a problem that's going to--going to surge in the
next year or two or three as we focus on the criminal element
here in America that is going to be dispossessed and probably
ready to join a gang in some other country and then ready to
bring their crimes back here because they're familiar with
America.
So I'm hoping that there is some--some focus on that since
you guys are going to be the first defense on that. This is not
going to be a State problem so much as a Federal problem.
Mr. Battle. That's correct, Mr. Chairman. And again, the
Assistant Attorney General reported to me or at a meeting that
I attended that there seemed to be a level of cooperation that
is moving in the direction of addressing that and many problems
connected thereto.
The U.S. attorneys' offices are aware of the fact that some
of the individuals who have come from those parts of the world
entered the U.S. and at some point parked for a while, if you
will, in the western part of the United States, most
importantly, central California.
Well, they've now fanned out in different parts of the
country. So we are watching the program.
Mr. Cannon. We've got these thugs here in northern Virginia
and Maryland. This is a big problem.
Does your office have any coordinating activities with--
with prosecutors, Federal or others, in Mexico or Central
America?
Mr. Battle. From what I understand, we have been trying to
work with Mexican authorities. I don't know the answer as to
the others.
Mr. Cannon. Just this is a growing problem, and it's going
to just burgeon here if we are successful passing a bill that
focuses on these criminals who are now hiding among us and
preying, to a large degree, on their own ethnic minorities. And
as that--as they get shoved out, they're going to prey on other
people and become better known and more difficult to deal with.
So we've talked about methamphetamine prosecutions are up
5.5 percent. With all due respect, and I'm not sure of the
numbers, but it seems to me that the abuse of meth has probably
increased at a much more rapid rate than that Nation wide.
Where are we going with this?
Are we busting--in fact, you may have some comment on the
displacement of the FBI's role in meth enforcement with DEA and
the lag there. How is that working?
Mr. Battle. From what I understand, there is a meth working
group that's been stood up, and there's a conference to talk
about those things in the next coming months. One of the things
I've also learned, Mr. Chairman, is that methamphetamine, for
some odd reasons, hasn't found its way to a lot of parts of the
United States.
Mr. Cannon. Right.
Mr. Battle. And it seems that, again, it's one of those
peculiarities that started out on the west coast and is
starting to make its way very, very slowly east. In fact, I
just recently attended a conference of--of drug court
individuals in New York State during which most of them had not
had any contact with methamphetamine coming through their court
system.
We have our hands around it, and we've seen it develop from
mom and pop organizations and people cooking in the backs of
trailer parks and in basements in homes. And now there's
intelligence indicating that it's being imported into the
United States from Mexico.
The DEA is very much aware of that. They're on top of it.
They've embarked upon a very aggressive educational program for
schools and for parents, for young people. And we are--we are
very much responding to the problem.
Perhaps those numbers don't tell the whole story, but I can
tell you that our effort to target it is taking on a lot of the
resources in the U.S. attorneys' offices. And drug prosecutions
have gone up in that area because we've identified it as a
problem in many of the offices.
Mr. Cannon. Again, this is a problem where we have mom and
pops. And for odd reasons, Utah had a lot of mom and pops, but
we're now seeing terrific inflows from Mexico. That has to
stop. This is an incredibly destructive drug. I was just--ah,
it's amazingly destructive.
We need to have--we'll talk next year about this. It's not
in all parts of the country yet, but where it is, it is growing
very rapidly, and it is massively destructive.
One other item you talked about, Mr. Battle, is child
pornography and what you're doing there. This is a matter of
grave concern. It seems to me that if we're going to get a
handle on it, we need to not only work at a Federal level, but
also empower States to be involved.
One of the problems with that is that the States have
regularly been overridden by the Federal courts when it comes
to defining obscenity. It may be that wizard White would have
recognized obscenity when he saw it, but no Federal court has
granted that dignity to a State court that I'm aware of.
And do you have any thoughts on that and what we can do
there?
Mr. Battle. What I can tell you, Mr. Chairman, is that we
are--like we do in a lot of other areas, most recently in
dealing with criminal activities--is partnering very closely
with our State and local counterparts in dealing with these
types of crimes.
We've found that that's absolutely necessary, and that was
my experience in western New York because this is a game of
intelligence. Because a lot of the involvement of people in
this area takes place in private settings and places that are
otherwise, in some respects, undetectable.
And so, with the announcement of the initiative most
recently by the Attorney General, that came about based upon a
recognition of the need for this because of information coming
in from the U.S. attorneys' offices of what we were finding and
how difficult it was to go about and ferret out this type of
activity.
So we will--we will use some of the models that we have in
the past in dealing with partnerships on that level with
Project Safe Neighborhoods and others to get underneath and
deal with this type of crime, and we will be very aggressive in
doing so.
Mr. Cannon. Let me ask you a constitutional question. I
recognize that that may not be your focus. But it seems to me
that the idea that obscenity is protected by the first
amendment really derives from the idea that obscenity is some
kind of communication and that we find now with modern studies
that the parts of the brain that deal with speech are not the
same parts of the brain that deal with pornography and
addiction to pornography.
Would it be helpful if the Federal Government jurisdiction
or the Federal court jurisdiction on this subject was limited
so that States could find obscenity and not be overturned by
the Federal courts saying that obscenity was speech or that the
particulars in any given case constituted speech and,
therefore, could not be restrained?
Mr. Battle. Mr. Chairman, that's way over my head.
Mr. Cannon. Say ``yes,'' so I could have a record because
this has been one of my pet areas here, you know? [Laughter.]
You don't need to do that, of course.
Mr. Battle. I'll have to get back to you on that one.
Mr. Cannon. I think this is one of the problems of our
time. My Attorney General in Utah tells me that of people that
look at child pornography, 40 percent, according to some
studies, are people who then go out and touch and hurt
children.
If that is the case, and we're trying to figure that out,
that is an epidemic. That is a problem that is way beyond
anything we've ever thought of before and will require some
different rethinking of that issue. And your office, in
particular, is going to be on the cutting edge of that. So we
will deal with that issue again in the future.
Mr. Keisler, we talked about immigration, and you're
certainly aware of some of the criticism of what's going on
there. For instance, Judge Posner was very critical.
He pointed out that ``the panels of this court reversed the
Board of Immigration Appeals in whole or part in a staggering
40 percent of 136 petitions.'' He goes on to say, ``Our
criticisms of the board and the immigration judges have
frequently been severe.''
I don't know that--and he's a very, very thoughtful judge.
I don't know that you could be more harsh than he was in this
case. And this is Benslimane against Gonzalez.
This raises a whole bunch of questions. You're asking for,
I think, 86 new immigration judges. Or not judges, but rather
attorneys to help prepare these cases. Are you familiar with
this case and the criticism that's been levied?
Mr. Keisler. I am, Mr. Chairman. And certainly, when any
judge--and certainly as respected a judge as Judge Posner--uses
language like that, we listen. We sit up and take notice.
The immigration judges and the Board of Immigration
Appeals, as you know, are not themselves within the Civil
Division. They're a separate component of justice.
Mr. Cannon. Right.
Mr. Keisler. But, you know, the Attorney General, in
response to the kinds of concerns that Judge Posner and, I must
say, some others have expressed, has initiated a top to bottom
review of the situation with immigration judges and the Board
of Immigration Appeals. He's charged the Deputy Attorney
General and the Associate Attorney General with examining that
situation and deciding whether, both in terms of the quality of
the decisions and the professionalism, we're doing all that we
should be doing.
And what the Attorney General has said is that an alien
appearing before the Board of Immigration Appeals or an
immigration judge may or may not be entitled to the particular
relief that he or she seeks, but they are certainly entitled to
be treated with professionalism and respect, and it's very
important to him that they are.
Certainly, from the perspective of my division, which
litigates in defense of those decisions, the quality of those
decisions is very important to our success in defending them
before the Courts of Appeals. And language like Judge Posner's
in an opinion generally precedes an order vacating the decision
that we're trying to defend.
So I think it is absolutely a commitment of the Department,
from the Attorney General on down, to make sure that we find
out whether those kinds of criticisms are warranted and, to the
extent that they are, the situation is corrected.
Mr. Cannon. Let me say it's very, very important to me that
we treat people with respect. These people may end up here. We
want them to love America and not hate the process, certainly
not hate our great institutions.
Are we not seeing a self-fulfilling prophecy here. As you
have failed arrests, record-making, presentations, decisions
through that process, you're ending up--and then many--many
decisions being overturned, are you not then encouraging more
people to appeal their decisions? And is that what's causing
this big sucking sound that we hear that it's going to require
another 86 attorneys?
Mr. Keisler. Well, you know, there is no single factor. I
think--our judgment is that the reason for the increased
workload is not so much that as it is two other things. One is
that the Department of Homeland Security has stepped up
enforcement efforts. And insofar as enforcement activity has
increased, you're going to have more challenges in court to
those actions that are taken.
The other thing is that the rate of appeal has gone up. It
used to be in 2001 6 percent of board decisions were appealed.
It's now 29 percent. Now some of that may be precisely----
Mr. Cannon. And in that 29 percent, you're getting a huge
number of overturns----
Mr. Keisler. Well, actually----
Mr. Cannon.--meaning that you're encouraging more people to
appeal.
Mr. Keisler. Right. We still actually have a pretty good
success rate, Mr. Chairman, about 90 percent Nation wide. But
certainly, in some circuits, like the 7th Circuit, it's going
down.
And that does--you know, every loss sets a bad precedent, a
precedent that someone can cite in a later case. Every loss is
an encouragement to someone to say, ``Maybe I should take it
up. Maybe I can win like this other person did.'' So,
certainly, there is a certain cycle to it, just like you said,
in which defeats lead to more defeats.
The other thing that I think is happening is that it used
to be there was an extraordinary backlog in the Board of
Immigration Appeals, and it would take years--up to 6 years
sometimes--to resolve a case there. When that backlog was
reduced, which I think was in everybody's interest because,
whether an alien is going to achieve lawful status through that
process or be ordered removed, it should happen sooner rather
than later, rather than be tied up in administrative process.
But it used to be somebody who maybe wanted to stay in the
country for a few years could park themselves, so to speak, by
filing an appeal of an immigration judge decision with the
Board of Immigration Appeals, and it would just sit there. Now
that the Board of Immigration Appeals is operating so much more
efficiently, if you want to do that, you have to file a
petition for review in the Court of Appeals. That's where you
get the time to stay here.
So what that means to me is that since I don't see
enforcement efforts from the Department of Homeland Security
going down and since I don't see that phenomenon of our Board
of Immigration Appeals being more efficient changing, this
problem of increased litigation is one we're going to be living
with for the foreseeable future, and that's--that's why we're
hoping for some more resources.
Mr. Cannon. And if you get some kind of immigration reform,
you're looking probably at the huge increase in throughput of
appeals.
Mr. Keisler. Well, it's--you know, each of--the situation
is so much in flux, it's hard to know exactly which bill and
which provision. There are some provisions in bills that have
been discussed that would reduce the workload and some which
would increase it.
For example, you know, one proposal has been that in
certain situations an alien seeking to challenge a removal
decision would have to get a certificate of reviewability from
a single judge. And if the judge denied that, there would be no
further appeal. If that were passed, I presume there would be a
diminution in the workload.
There are other provisions which would create new judicial
review opportunities, and those would presumably raise it up.
So what the net effect will be of whatever bill is ultimately
enacted, if one is, it's hard to tell. But it could go in
either direction.
Mr. Cannon. It's hard to tell if one will be enacted, but I
suspect one will be. It's impossible to guess what the details
will be, but you're going to have a great deal more activity at
some level.
Mr. Keisler. I think that's right.
Mr. Cannon. And so, we need to be sort of focused on that.
That could happen next cycle, the next budget cycle. So I'm
deeply concerned.
Let me ask a little deeper question here. I have a terrific
concern, having served, by the way, in the Interior office as
an Associate Solicitor and been associated with Interior Board
of Land Appeals and other ALJ systems. Is part of the problem
you're having here the result of having ALJs that really aren't
independent?
Mr. Keisler. I don't think it's a question of independence
because I don't think insofar as Judge Posner and others have
identified problems with the immigration judges is that they
have been subjected to undue influence in any way.
If there is a problem with the immigration court system, I
think that's something that the review that the Attorney
General has initiated will--will tell us. And not being part of
that review, I wouldn't want to prejudge a diagnosis of that
situation.
Mr. Cannon. Do you have a sense that--that, for instance,
in the attempt to clear up the backlog, there's been a focus on
judges, some pressure on judges to get things done? That--not
having them pre-decide, but at least pushing them to make
decisions?
Mr. Keisler. I think it is certainly the case that
immigration judges have had to work especially hard in the last
several years. And while I haven't seen statistics on it, I
would expect that many of the immigration judges are processing
many more cases than they used to and, I'm sure, would feel
they could do even a better job if they had fewer such cases.
One way the backlog in the Board of Immigration Appeals was
dealt with was to say that in many cases, you know, single
judges rather than three-judge panels would be deciding. So
that doesn't necessarily mean each judge is deciding more
cases. It might affect it in the other way.
But I certainly have the sense that immigration judges feel
they could do a better and more thoughtful job if they didn't
have so many cases.
Mr. Cannon. Do you get any sense that they react to
pressure or respond to the direction of where they think the
Attorney General may want them to go, as opposed to being
independent?
Mr. Keisler. I haven't seen that. I'm not in the best
position to know. And as I said, the people who are really
reviewing the immigration court system right now really will be
in the best position to see how that job is being done. But I
haven't had any sense that immigration judges or Board of
Immigration Appeals judges are doing anything but calling them
as they see it.
Mr. Cannon. You know, I--I'll just tell you this panel is
very concerned about ALJs and their role and the fact that
you've got an Administration writing regulations to become law,
often creating regulations through enforcement that never go
through a process, and then are appealed to and decided by
judges who are appointed by or serve at the will of--of the
Administration.
This is a major concern of mine. We're going to come back
and look at the ALJ system, and we'll watch the BIA judges in
particular on this issue. And so, we'll look forward to that
report as it happens.
Let me ask one other question. I've heard reports that DOJ
declined some FCA cases because of resource shortages. Is that
the case? Are we leaving money on the table here because we
don't have the lawyers to handle them?
Mr. Keisler. I haven't found myself in a situation where I
had what I thought was a really compelling case and I said, you
know, let's decline it because I can't figure out how we would
staff that.
Because it's not simply the 77 lawyers in the civil frauds
unit. It's all of our U.S. attorneys' offices, many of which
have extremely active offices. So, you know, while we don't
give the reasons why we decline a case, I haven't in my tenure
found a situation where there's a case I've really wanted to do
that I felt I didn't have the manpower to take care of.
Mr. Cannon. The job is tough, and I would never sit up here
and tell you how to do it. You did mention earlier, when you
were talking about--about HHS payments, Medicare payments, that
there are a lot of them and therefore--and there are also some
rules that are confusing or in which somebody could hide.
There are rules that are really confusing and where doctors
can't get direction. And we've had a couple of guys in my
district who had gone through hell based on these kind of
claims, and I'd just encourage a balance there. It's very hard
to deal with. You've got to get the bad guys, but there ought
to be a process. You need to be thinking about a process for
deciding when a case is not meritorious and then dropping it.
Not your division, but the Criminal Division, you know,
brought a case, a very famous case against our--the organizers
of the Salt Lake Olympics, and the case was dismissed after the
presentation of evidence. It was horribly humiliating, and
there was 5 million bucks in it or so in attorneys' fees for
the defendants.
We had another FTC case in Utah where there were a couple
of million dollars spent in defense fees, and the case was
dropped at the end of the--at the most humiliating presentation
of evidence I've ever seen. It's a huge responsibility that I
hope you--I'm sure you're concerned about. But I just throw it
out because I worry a bit about the prosecutorial power, which
is overwhelming.
Mr. McKeown, can you give us a bit of an update on Cobell.
I actually haven't had a lot of complaints about it recently.
So I suspect it's not in such a terrible state. But where are
we there, and what do we need to worry about?
Mr. McKeown. Mr. Chairman, if it's okay, I would like to
defer to my colleague, who actually manages the Cobell
litigation.
Mr. Cannon. That's right. That's right, it did--I was
trying to get you off the hot seat here.
Mr. Keisler. No, it's my pleasure. Mr. McKeown and I share
Indian trust litigation because the Civil Division handles
Cobell, which is the lawsuit brought by the class of individual
account holders, and the Environment and Natural Resources
Division handles the tribal trust cases, which are very similar
in a lot of ways, but brought by the tribes.
You know, the litigation has been ongoing since 1997. It
has been, you know, regrettably an unusually contentious piece
of litigation, as you know, Mr. Chairman. And we have several
matters right now pending or recently decided by the Court of
Appeals, which I think will help shape the litigation going
forward.
Most notably, in the fall, the Court of Appeals issued a
decision vacating an injunction that would have defined in a
particular way that kind of accounting the Department of the
Interior would have to do that the Department of the Interior
estimated would cost $10 billion to $14 billion to account for
accounts that have at present about $400 million in them.
The Court of Appeals said that one of the things that has
to be taken into account in deciding what kind of accounting to
do is the cost because there's always going to be a tradeoff
between what you do and how accurate you make sure it is and
what it's going to cost. And that Interior Department is owed a
certain degree of deference in making that tradeoff. So we
thought that was a very positive decision.
We have issues before the Court of Appeals now. In
particular, there's been a District Court order requiring the
shutdown of Internet connectivity at several offices and
bureaus within the Department of the Interior, and we've
appealed that. And that was argued a couple of weeks ago. And
we're awaiting a decision on that.
So there is certainly ongoing activity in the case.
Mr. Cannon. Perhaps one of you would know, this shutting
down of Internet access is terrifically difficult for Interior
or for users. Are there other things going on here in this case
now that are disruptive to the Interior Department?
Mr. Keisler. Well, yes, Your Honor. Or----
Mr. Cannon. I wish.
Mr. Keisler. Yes, Mr. Chairman.
Mr. Cannon. No, actually, I like my job. [Laughter.]
Mr. Keisler. It's an old habit. I'm used to the other
forum. But, yes, there are.
For example, there was an order issued which has been
stayed, but if it were to go into effect would require that the
Department of the Interior include in every written
communication it sends out that might reach any member of the
class, regardless of what the subject matter is--education,
health, whatever--a statement that all trust-related
information may be unreliable.
So regardless of whether it's about something related to an
interior school system that is run that goes to the parents or
a benefit form for a particular program, it would be required
to bear this legend, all trust-related information must--you
know, may be unreliable.
We have appealed that. We sought a stay. The Court of
Appeals has stayed it and heard argument on that issue, too.
There are also quite a few people who serve or have served
at the Department of the Interior or the Department of Justice
who are currently subject to orders to show cause why they
should not be held in contempt. That's obviously a difficult
personal situation, but I think, you know, there's nothing more
I can say about that. Right now, those proceedings will run
their course.
So, yes, there are other issues that are pending that have
been difficult for the Department of the Interior.
Mr. Cannon. Is Judge Lamberth still the trial judge on this
case?
Mr. Keisler. Yes, sir.
Mr. Cannon. Have you made any motions to change judges?
Mr. Keisler. We requested that the Court of Appeals--in one
of our most recent appeals, we requested that when it remand
the case, it direct that the case be reassigned to a different
District Court judge, and that request is pending with the
Court of Appeals.
Mr. Cannon. Thank you.
Mr. White, just one question. Could you give us a sense of
what's going on with bankruptcy? We've had a couple of stories
in my district about the plummeting number of filings. I
suspect that's because many people filed early, and now we have
a little bit of a dearth.
But are we into this long enough to have a sense of--any
kind of sense what the effect is going to be?
Mr. White. Well, I think the initial indications are
positive, and I'll give a couple of examples. But you're quite
right that the numbers of filings have gyrated quite a bit
since just prior to October 17th. We had a bulge of almost
three quarter of a million cases filed in the 4 weeks leading
up to bankruptcy reform and only about 140,000 cases in the 5
months thereafter.
Obviously, it's still too early, with regard to passage of
time and number of filings, to draw any firm conclusions, but
we'd suggest that there have been two positive signs as we
begin implementing and enforcing the provisions of bankruptcy
reform that were given to us.
First, with regard to means testing. Of the cases, what
we're finding is that in the means test, the subjective formula
that the debtor's financial statements are put through, we're
finding that about 10 percent of the chapter 7 cases that filed
are found to be presumed abusive. So it's a helpful--it's a
helpful indicator and identifier of abuse.
But the statute has given us flexibility, looking at
special circumstances and other factors, that we don't have to
file motions to dismiss in cases that we don't think merit it.
So in 7 out of 10 of those cases that are presumed abusive that
aren't voluntarily dismissed by debtors, we are filing motions.
Now, again, it's a small universe of cases at this point.
But the numbers, the percentages, they seem to make sense. The
system seems to be working. We have an up and running system.
The true test will be when the filings go up.
Also in the area of credit counseling, which is a major
innovation in the bankruptcy reform statute. In fact, it is
potentially one of the most far-reaching and positive consumer
protections in the statute. We have approved, as I say in the
testimony, almost 400 credit counselor and debtor education
providers.
So the capacity has been there with the small number of
filings. We still need to do more to ensure that as filings go
up that we are able--we able to solicit and approve
applications from capable providers.
One of the concerns we had early on and that this
Subcommittee expressed at the hearing last--last summer was
also that unscrupulous providers, because it has been a
troubled industry, not be approved. We think we've done a
pretty good job with regard to screening out unscrupulous
providers and, in fact, have gotten positive statements to that
effect, even public statements from some of the consumer
organizations.
So we think that the start of the process with credit
counseling, and debtor education likewise, has some positive
signs. Too early, but we do think we're off to an excellent
start and there's an infrastructure there. The true test will
come as filings go back up.
Mr. Cannon. Ten percent presumed abusive seems to be on the
upper edge of what we were anticipating. Is that a temporary
thing? Do you think that's going to go down? Or does that--I
mean, obviously, this is an odd period, when you had so many
pre-filings.
Mr. White. Right. Yes.
Mr. Cannon. Do you think that number is going to hold, or
is there reason to think it would change?
Mr. White. It would be too--I don't think I could give an
informed response to that question because the one thing we can
probably guess about the filers that we have now is that it's
an anomalous group because we had that bulge of 725,000 cases.
So I wouldn't dare make projections from that number.
Mr. Cannon. Thank you. Are there any issues that have come
up that have been difficult to implement that we need to maybe
take a look at in adjusting the bill?
Mr. White. Not at this point, Mr. Chairman. If, with the
passage of time and more experience, we believe that there
could be greater clarity or changes in the statute, then we
would make those suggestions. But I have nothing to recommend
at this time.
Mr. Cannon. Just one more question. Mr. McKeown, you
mentioned that much of ENRD's caseload involves defending
Federal agencies. Would you give a typical example of ENRD's
involvement in defending Federal agencies?
Mr. McKeown. Oh, I think the best example, Mr. Chairman, is
the defensive litigation we've done with the President's
Healthy Forest Initiative. In one project for the Biscuit fire
in Oregon, we successfully defended nearly a dozen requests for
preliminary injunctions in six different lawsuits. And as you
well know, if you can bat that kind of an average defending
against PI requests, that's something to be very proud of.
And since it's a presidential initiative, we're
particularly proud that we were able to do that for our client.
Mr. Cannon. Thank you.
We have several written questions we will submit to you
based upon their relevance. We appreciate your being here
today, appreciate the job that you're doing, and thank you for
coming.
And with that, this Committee will be adjourned.
[Whereupon, at 4:04 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Prepared Statement of Paul D. Clement, Solicitor General of the United
States, United States Department of Justice, Washington, DC
Mr. Chairman and Members of the Subcommittee: Thank you for
inviting me to submit testimony regarding the Office of the Solicitor
General in connection with the Committee's hearing.
I. THE SOLICITOR GENERAL'S DUTIES
When Congress created the position of Solicitor General in 1870, it
expressed high ambitions for the Office: the Solicitor General is the
only officer of the United States required by statute to be ``learned
in the law,'' 28 U.S.C. Section 505. The Committee Report accompanying
the 1870 Act stated: ``We propose to have a man of sufficient learning,
ability, and experience that he can be sent . . . into any court
wherever the Government has an interest in litigation, and there
present the case of the United States as it should be presented.''
In modern times, the Solicitor General has exercised responsibility
in three general areas.
1. The first, and perhaps best-known, function of the Solicitor
General is his representation of the United States in the Supreme
Court. The late former Solicitor General Erwin Griswold captured the
nature of this responsibility in observing:
The Solicitor General has a special obligation to aid the Court
as well as serve his client. . . . In providing for the
Solicitor General, subject to the direction of the Attorney
General, to attend to the ``interests of the United States'' in
litigation, the statutes have always been understood to mean
the long-term interests of the United States, not simply in
terms of its fisc, or its success in particular litigation, but
as a government, as a people.
This responsibility, of course, includes defending federal statutes
challenged as unconstitutional on grounds that do not implicate the
executive branch's constitutional authority when a reasonable defense
exists. The Solicitor General also defends regulations and decisions of
Executive Branch departments and agencies, and is responsible for
representing independent regulatory agencies before the Supreme Court.
The Supreme Court practice of the Solicitor General includes filing
petitions for review on behalf of the United States. In this regard, as
the Supreme Court has stated:
This Court relies on the Solicitor General to exercise such
independent judgment and to decline to authorize petitions for
review in this Court in the majority of the cases the
Government has lost in the courts of appeals.
The Solicitor General also responds to petitions filed by adverse
parties who were unsuccessful in the lower federal courts in criminal
prosecutions or civil litigation involving the government. Where review
is granted in a case in which the United States is a party, the
Solicitor General is responsible for filing a brief on the merits with
the Court, and he or a member of the Office presents oral argument
before the Court. The Solicitor General also files amicus curiae, or
friend-of-the-court, briefs in cases involving other parties where he
deems it in the best interest of the United States to do so. Although
most amicus filings occur only after review has been granted, the
Solicitor General also submits amicus briefs at the petition stage when
invited by the Court to do so or, in rare instances, when Supreme Court
resolution of the questions presented may affect the administration of
federal programs or policies. The Supreme Court requested the Solicitor
General to file an amicus brief at the petition stage 14 times during
the October Term 2004 and has done so 13 times during the current Term
(2005). The Solicitor General generally seeks and receives permission
to participate in oral argument in those cases in which the government
has filed an amicus brief on the merits.
2. The second category of responsibilities discharged by the
Solicitor General relates to government litigation in the federal
courts of appeals, as well as in state appellate courts. With the
exception of those government agencies granted independent litigation
authority in the lower courts, authorization by the Solicitor General
is required for all appeals to the courts of appeals from decisions
adverse to the United States in federal district courts. The Solicitor
General's approval is also required before government lawyers may seek
en banc, or full appellate court, review of adverse decisions rendered
by a circuit court panel. Additionally, government intervention or
participation amicus curiae in federal appellate courts (as well as
state appellate courts) must be approved by the Solicitor General. In
addition, once a case involving the government is lodged in a court of
appeals, any settlement of that controversy requires the Solicitor
General's assent. In cases of particular importance to the government,
lawyers from the Office of Solicitor General will directly handle
litigation in the lower federal courts. Recent examples include the
Microsoft antitrust appeal, important criminal sentencing issues when
addressed by the courts of appeals en banc, and cases involving enemy
combatants.
3. In the third category of responsibilities are decisions with
respect to government intervention in cases where the constitutionality
of an Act of Congress has been brought into question at any level
within the federal judicial system. In such circumstances, 28 U.S.C.
Section 2403 requires that the Solicitor General be notified by the
court in which the constitutional challenge has arisen and be given an
opportunity to intervene with the full rights of a party.
______
The various decisions discussed above for which the Solicitor is
responsible are arrived at only on the basis of written recommendations
and extensive consultation among the Office of the Solicitor General
and affected offices of the Justice Department, Executive Branch
departments and agencies, and independent agencies. Where differences
of opinion exist among these components and agencies, or between them
and the Solicitor General's staff, written views are exchanged and
meetings are frequently held in an attempt to resolve or narrow
differences and help the Solicitor General arrive at a final decision.
Where consideration is given to an amicus curiae filing by the
government in non-federal government litigation in the Supreme Court or
lower federal appellate courts, it is not uncommon for the Solicitor or
members of his staff to meet with counsel for the parties in an effort
to understand their respective positions and interests of the United
States that might warrant its participation.
II. ORGANIZATION OF THE SOLICITOR GENERAL'S OFFICE
The Office of the Solicitor General, when fully staffed, consists
of 48 individuals, of whom 22 (including the Solicitor General)
constitute its permanent legal staff and the remainder serve in
managerial, technical, or clerical capacities. Of the 22 attorneys,
four are Deputy Solicitors General, senior lawyers with responsibility
for supervising matters in the Supreme Court and lower courts within
their respective areas of expertise. Seventeen attorneys serve as
Assistants to the Solicitor General. These lawyers are assigned a
``docket'' of cases presenting a wide spectrum of legal problems under
the guidance and supervision of the Deputies. Additionally, OSG employs
four lawyers who are recipients of the Bristow Fellowships, a one-year
program open to highly qualified young attorneys, generally following a
clerkship with a federal court of appeals' judge. Bristow Fellows
assist the Deputies and Assistants in a variety of tasks related to the
litigation responsibilities of the Office. All of the attorneys in the
Office have outstanding professional credentials.
The authorized personnel levels and budget of the Office of the
Solicitor General have remained relatively stable in recent years. The
Fiscal Year 2007 funding request level is 49 workyears and $9,977,000.
Most of these funds are committed for nondiscretionary items. For
example, only two items, personnel-related costs and GSA rent, consume
over 85 percent of the budget. However, the Office is employing various
strategies to offset the otherwise rising costs, such as re-engineering
our brief preparation process, modifying service/maintenance contracts
and reducing overtime costs.
III. OFFICE WORKLOAD
The following statistics may provide a helpful way of measuring the
Office's heavy workload given the relatively small staff of attorneys.
During the most recent completed Term of the Supreme Court, the October
2004 Term (July 1, 2004 to June 28, 2005), the Solicitor General's
Office handled approximately 3,237 cases in the Supreme Court. We filed
full merits briefs in 58 cases considered by the Court (and presented
oral argument in 52 of those cases),\1\ which represented 69% of the
cases that the Supreme Court heard on the merits in that Term. The
government prevailed in 73% of the cases in which it participated. We
filed 22 petitions for a writ of certiorari or jurisdictional
statements urging the Court to grant review in government cases, 911
briefs in response to petitions for certiorari filed by other parties,
and waivers of the right to file a brief in response to an additional
2,230 petitions for certiorari. In response to invitations from the
Supreme Court, we also filed 16 briefs as amicus curiae expressing the
government's views on whether certiorari should be granted in cases in
which the government was not a party. The above figures do not include
the Office's work in cases filed under the Supreme Court's ``original''
docket (cases, often between States but involving the federal
government, in which the Supreme Court sits as a trial court), and they
also do not include the numerous motions, responses to motions, and
reply briefs that we filed relating to matters pending before the
Court.
---------------------------------------------------------------------------
\1\ Of the 58 merits briefs filed, some were consolidated resulting
in 1 oral argument.
---------------------------------------------------------------------------
During this same one-year period, the Office of the Solicitor
General reviewed more than 2,455 cases in which the Solicitor General
was called upon to decide whether to petition for certiorari; to take
an appeal to one of the federal courts of appeals; to participate as an
amicus in a federal court of appeals or the Supreme Court; or to
intervene in any court. Thus, during this one-year period, the Office
of the Solicitor General handled well over 5,722 substantive matters on
subjects touching on virtually all aspects of the law and the federal
government's operations.
IV. CONCLUSION
In carrying out the foregoing responsibilities, the other members
of the Office and I have endeavored to adhere to the time-honored
traditions of the Office of the Solicitor General--to be forceful and
dedicated advocates for the government, as well as officers of the
Court with a special duty of candor and fair dealing.
Response to Post-Hearing Questions from Michael A. Battle, Director,
Executive Office for United States Attorneys, United States Department
of Justice, Washington, DC
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Response to Post-Hearing Questions from Peter D. Keisler, Assistant
Attorney General, Civil Division, United States Department of Justice,
Washington, DC
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Response to Post-Hearing Questions from Matthew J. McKeown, Principal
Deputy Assistant Attorney General, Environment and Natural Resources
Division, United States Department of Justice, Washington, DC
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Response to Post-Hearing Questions from Clifford, J. White, Acting
Director, Executive Office for United States Trustees, United States
Department of Justice, Washington, DC
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
<all>