Federal Bureau of Investigation

Supplemental Financial and Management Information

(Unaudited)

· FBI Organization Chart

· Chart: 1996 Appropriations

· Chart: 1997 Appropriations

· Performance Goals and Results

· Performance Measurements - Organized Criminal Enterprises - La Cosa Nostra

· Performance Measurements - White-Collar Crime - Fraud Against the Government

· Performance Measurements - Violent Crimes - Gangs

FBI Organization Chart

Federal Bureau of Investigation

FY 1996 Salaries and Expenses by Category

Total Salaries and Expenses - $2,214,256,000

Federal Bureau of Investigation

FY 1997 Salaries and Expenses by Category

Total Salaries and Expenses - $2,570,497,000

Performance Goals and Results

The FBI established a long-term implementation plan for compliance with the Government Performance and Results Act (GPRA) during early FY 1996, and this plan has been followed aggressively since that time. Previously, while performance measures were developed and included in the FBI's budget requests to the Department of Justice, the Office of Management and Budget, and the Congress, the requirements of the GPRA had not been truly integrated into the budget formulation process.

Understanding that integration was critical, the FBI changed the format and structure of its budget submissions to require, for the first time, that major investigative programs include a strategic assessment of the existing crime problems along with an internal assessment of FBI capabilities to address these problems. Program managers developed performance measures, with a particular emphasis on results and outcomes, based on their strategic assessments and the intent or goal of each program. The FBI developed the notion of a performance gap - the difference between the extent of a particular crime problem and the degree to which existing FBI resources could realistically address this problem. This performance gap is now used to identify our funding needs for future budget requests. FBI executives, program managers, and budget analysts received briefings concerning GPRA requirements to ensure they understood the law and the profound changes that were going to result from it. Workshops for all major investigative programs were held to facilitate the development of relevant performance measures for FY 1998 budget submissions.

The FBI also established an interagency GPRA Law Enforcement Working Group to share experiences and information regarding the GPRA and to identify and address GPRA issues that specifically impact law enforcement agencies. The group comprises law enforcement representatives from across the Federal government, including the FBI, U. S. Marshals Service, the Drug Enforcement Administration, U. S. Customs Service, Treasury, the Bureau of Alcohol, Tobacco and Firearms, U. S. Secret Service, the Department of Justice, and the Office of Management and Budget. The intent of the group is to develop strategies and approaches that ensure GPRA is effectively and efficiently implemented throughout all Federal law enforcement agencies.

Performance Measurements:

Organized Criminal Enterprises - LCN

Organized Crime (OC) is a continuing and self-perpetuating criminal conspiracy employed by groups that are hierarchical in structure, feed on fear and corruption, and are motivated by the potential generation of profits, impacting particular locales/regions or the nation as a whole. OC groups maintain their position through the use of violence or threat of violence, corruption of public officials, and extortion. Much like the multinational conglomerates they resemble, OC groups have expanded their activities into areas such as smuggling of drugs and other embargoed commodities, industrial and technological espionage, financial market manipulation and the corruption and control of groups within and outside of the legal state system. The La Cosa Nostra (LCN) is the most significant organized criminal threat to American society. When one factors in the number of nonmember criminal associates for each LCN member, the magnitude of the problem posed by the LCN takes on an even more compelling dimension. The national strategy for organized crime/drug enterprises utilizes a multifaceted approach with the ultimate objectives of disrupting and dismantling criminal organizations, prosecuting the leadership, and seizing illegal profits through forfeiture proceedings. The FBI has had a significant impact on the LCN through the use of sophisticated investigative techniques such as electronic surveillance and undercover operations.

Through the use of such techniques, FBI investigations have resulted in successful Federal prosecutions of the hierarchies of most LCN Families. The FBI's goal is to reduce the membership of all LCN Families by 25 percent, and to reduce LCN wealth through the aggressive use of asset forfeiture.

The RICO criminal forfeiture of assets such as union office or union pensions is significant because it removes the LCN from positions of power in a union and removes their ill-gotten gains by taking their pensions. Although the overall wealth of the LCN is difficult to estimate, substantial monetary forfeitures will undermine its financial power base and remove or reduce the profit incentive associated with organized crime.

The cornerstone of all FBI LCN investigations is the Enterprise Theory of Investigation (ETI). The ETI requires that an LCN Family or a LCN-related "association in fact" be the enterprise in a RICO prosecution or a Civil RICO proceeding. Evidence of predicate criminal acts is developed to establish the criminality of the LCN enterprise pursuant to RICO. The number of statistical accomplishments, the relative speed of achieving such accomplishments, or the number of investigations conducted or initiated based on allocated resources should not be applied to labor intensive LCN investigations utilizing the ETI. This successful investigative approach translates into more intelligence driven investigations which often reflect fewer investigative matters due to the extended duration of each case. In accordance with the Organized Crime/Drug National Strategy, LCN investigations require the assignment of significant numbers of Agent and support personnel, as well as technical resources, to support the use of sophisticated investigative techniques such as electronic surveillance and undercover operations.

Operation Heaven's Gate is a five-year strategic initiative designed to significantly reduce the LCN's active membership and national influence. All FBI LCN investigations conducted in 1997 and 1998 will select targets which conform to the goals and objectives of Heaven's Gate.

Performance Measurements:

White-Collar Crime

Fraud Against the Government

The United States Government expends more than $500 billion a year in discretionary domestic programs. Fraud within these programs affects the very stability of the economy and undermines the programs. Fraud Against the Government investigations cover programs administered by the Department of Defense (DOD), Department of Housing and Urban Development (HUD), Department of Transportation (DOT), Department of Education (DOED), and other Executive Branch entities. Programs within HUD are diverse and extensive. Insured loans and guarantees exceed $750 billion a year. Housing subsidies serve more than four million families throughout the United States. Virtually every state and city in the country receives some form of HUD grants.

Performance Measurements:

Violent Crimes - Gangs

Violent crime is tearing away at the fabric of our society. Americans consistently list violent crime as one of their most significant concerns. The cost of violent crimes has two dimensions: a dollar amount calculated by adding up property losses, productivity losses, and medical bills, and an amount less easily quantifiable because it takes the form of pain, emotional trauma, injury and death. Researchers have found that crime victimization causes $105 billion annually in property and productivity losses and outlays for medical expenses. This amounts to an annual "crime tax" of roughly $425 per man, woman, and child in the United States. From the small business owner who is literally crippled because he refuses to pay "protection" money to the neighborhood gang, to the families who are hostages within their homes, living in neighborhoods ruled by predatory drug trafficking gangs, the harmful impact of gang violence on its victims individually, and on society collectively, is both physically and psychologically debilitating. The destabilizing effect of criminal gangs on our communities, while difficult to quantify, is enormous.

While street gangs have been a part of the urban landscape for much of our country's history, in the past two decades gangs have become an increasingly powerful and deadly force. Violent gangs are now having a major impact on the quality of life in communities throughout the Nation. The criminal acts of many gang members are both extraordinarily violent in nature and seemingly indiscriminate. A killing may be motivated by nothing more than the victim's presence in a particular neighborhood, choice of apparel, or facial expression. From the highly structured prison and motorcycle gangs that have a national presence, to the less-organized narcotics trafficking neighborhood "crews," gangs have brought a frightening level of violence to small towns and major metropolitan areas. Although most gangs can be traced to major urban areas, they have migrated throughout the country. According to a 1996 National Drug Intelligence Center (NDIC) study, gang activity was reported in 88 percent of the 301 jurisdictions responding to the survey and in 98 percent of the 120 responding jurisdictions with populations over 100,000. Through the survey, NDIC identified 7,400 individual gang sets. To address gang violence effectively, law enforcement's response must be a coordinated one. Municipal and local police departments, which represent the first line of defense from an enforcement standpoint, are not equipped to tackle this enormously complex problem alone. Most police departments lack the legal, financial, and technological resources to eradicate gang violence.

The FBI's gang strategy was designed to incorporate the investigative and prosecutive theories of enterprise investigations which have proven to be successful in the Organized Crime/Drug Program National Strategy. The strategy is for the FBI, in conjunction with other Federal, state and local law enforcement agencies, to identify the major domestic violent street gang/drug enterprises which pose significant threats to the integrity of American society and pursue these gangs through the sustained, proactive, multidivisional, coordinated investigations that support successful prosecution.

APPENDIX I

OFFICE OF THE INSPECTOR GENERAL, AUDIT DIVISION
ANALYSIS AND SUMMARY OF ACTIONS NECESSARY
TO CLOSE THE REPORT

Recommendation Number:

1.  Resolved.  In order to close this recommendation, please provide detail on the planned additional management oversight and training for field personnel to notify FPSU of seizures, and to update their year-end seized asset inventory reports in a timely manner. Additionally, please provide documentation of the conclusions reached regarding system modifications to ensure the completeness of PFA custody reports at year-end.

2. Resolved. In order to close this recommendation, please provide a copy of the enhanced FBI procedures to record and classify capital leases according to Federal Accounting Standards Advisory Board's (FASAB) Statement of Financial Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant, and Equipment.

3.  Resolved.  In order to close this recommendation, please provide a copy of the FBI's procedures implemented for accounts receivable to ensure that amounts due are recognized based on actual expenses incurred for delivered services.

4.  Resolved.  In order to close this recommendation, please provide a copy of the revised FBI policy and procedures relating to fixed assets that include periodic reconciliations to ensure that the proper capitalized costs have been entered into the Fixed Asset System, and that this subsidiary system's balances agree with the general ledger.

5.  Resolved.  In order to close this recommendation, please provide a copy of the procedures established that will enable the FBI to estimate accruals of liabilities, thereby fairly presenting financial statement information.

6.  Resolved.  In order to close this recommendation, please provide a copy of the FBI's new or revised electronic data processing policies relating to disaster recovery plans (DRP), and documentation that the DRP has been adequately tested.

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