October 1, 2003–March 31, 2004
Office of the Inspector General

The FBI is the principal investigative arm of the Department. It investigates civil rights violations, counterterrorism, foreign counterintelligence, organized crime, violent crime, financial crime, and other violations of federal law. FBI Headquarters in Washington, D.C., coordinates the activities of approximately 28,000 employees in 56 field offices, approximately 400 satellite offices, and more than 40 foreign liaison posts that work abroad on criminal matters within the FBI's jurisdiction.

Reports Issued

Improving the Sharing of Intelligence and Other Information

Since the September 11 terrorist attacks, preventing terrorist activities has been the FBI's highest priority, and an effective program to collect, analyze, and disseminate intelligence and other information is vital to that effort. Our audit examined the FBI's efforts to enhance its sharing of intelligence and law enforcement information with federal, state, and local officials.

We found that among the FBI's main obstacles to effective information sharing are the need to improve its IT systems, enhance its ability to analyze intelligence, overcome security clearance and other security issues concerning the sharing of information with state and local law enforcement agencies, and establish policies and procedures for managing the flow of information.

Our audit found that fundamental reform is under way at the FBI. The FBI has taken a series of actions, which are described in the audit report, including the following:

• Establishing the wide area network portion of the Trilogy IT modernization project to prepare for improvements such as the Virtual Case File, which will replace the Automated Case Support system;

• Borrowing 25 analysts from the Central Intelligence Agency (CIA) to establish an interim corps of intelligence analysts, and - under the direction of an experienced CIA manager - beginning to hire and train intelligence reports officers and analysts within a defined career track;

• Naming an executive assistant director and a deputy assistant director for a newly formed Office of Intelligence to oversee both terrorist-related and criminal intelligence matters, including management of the informant program;

• Developing nine concepts of operations to establish goals and key principles for improving the core elements of the FBI's intelligence program, including information sharing;

• Restructuring the Counterterrorism Division to provide a new emphasis on analysis, terrorist threats, terrorist financing, and dissemination of intelligence and other information;

• Widely circulating information and declassified intelligence to the state and local law enforcement community through a weekly Intelligence Bulletin;

• Providing threat information to state and local law enforcement through the National Law Enforcement Telecommunications System; and

• Increasing the number of Joint Terrorism Task Forces from 36 in 2001 to 84 in 2003 in order to work with and share intelligence and other information with other agencies.

While the FBI is improving its ability to share intelligence and law enforcement information, these efforts are still evolving and will require management's sustained attention to ensure full implementation. The six recommendations the OIG made to help further improve the FBI's ability to share intelligence and other sensitive information, both within the FBI and externally, included the following:

• Establish procedures and a written policy for information sharing, including what types of information should be shared with which parties under what circumstances;

• Ensure the FBI-wide enterprise architecture now under development is accompanied by a process map clearly defining the current and end states for the information-sharing process so the numerous initiatives can be coordinated and properly monitored and managed; and

• Develop an implementation plan that includes a budget and a schedule detailing each step and identifying the responsible FBI official for each concept of operations.

An Investigation Regarding Removal of a Tiffany Globe Paperweight From the Fresh Kills Recovery Site

The OIG examined allegations that an FBI agent improperly removed a Tiffany & Co. crystal globe paperweight from the Fresh Kills landfill site that processed materials from the World Trade Center terrorist attacks. The OIG determined that the FBI employee wrongfully took the globe and committed misconduct in doing so because the globe was an item of value that possibly belonged to one of the victims of the September 11 terrorist attacks.

In addition, during the course of our investigation, OIG agents interviewed the FBI agent who helped manage the Fresh Kills recovery site. The agent was inconsistent in his statements when asked about his actions and the advice he gave employees with respect to their ability to remove material from the landfill site. On the basis of several interviews he had with the OIG and the FBI, the OIG concluded that the agent lacked candor in his responses.

The OIG also found that many FBI employees took material from Fresh Kills as souvenirs. We determined that the FBI had no written policy governing what could be taken from recovery sites or mass crime scenes like the World Trade Center. We also found FBI employees had taken material as souvenirs from other well-known crime scenes. In our report, we recommended the FBI develop formal written guidance that addresses the taking of mementos from recovery sites by FBI employees. In response, the FBI issued a policy prohibiting the taking of mementos from crime scenes and recovery sites.

Allegations of a Continuing Double Standard of Discipline

In 2002, we issued a review of allegations that a double standard of discipline existed at the FBI. The allegations had been made by John Roberts, a unit chief in the FBI's Office of Professional Responsibility (OPR), who said senior FBI executives were treated more leniently than rank-and-file FBI employees. Our review concluded that a strong, and not unreasonable, perception existed among employees that a double standard of discipline existed, and we made several recommendations for improvements in the FBI's disciplinary process.

A November 2003 follow-up report on continuing allegations of a double standard of discipline in the FBI examined renewed allegations by Roberts. He appeared on the television program 60 Minutes shortly before the 2002 report was issued and alleged that some FBI misconduct cases had "just disappeared, just vaporized, and no one [was] disciplined for it" and that a double standard of discipline continued to exist. Roberts subsequently told the OIG his comments about cases that "disappeared" referred to the adjudication phases of two investigations we detailed in the 2002 report. Roberts cited several cases to support his allegation that a double standard of discipline persisted.

This follow-up review found several examples of lower-level employees being treated more harshly than more senior employees and reinforced concerns we had expressed in our 2002 report. We concluded, however, that the small number of cases we examined provided an insufficient basis to definitively conclude that the FBI systematically favors senior executives over lower-level employees in the disciplinary process.

Implementation of the Communications Assistance for Law Enforcement Act

Criminal organizations and individuals can use the telecommunications systems of the United States in the furtherance of serious crimes, including terrorism, kidnapping, extortion, organized crime, drug trafficking, and corruption. The law enforcement community uses court-authorized electronic surveillance of telecommunications systems as a tool for fighting crime.

Advances in the telecommunications industry's technology, however, have challenged the ability of law enforcement agencies to fully implement lawful orders to intercept communications and of telecommunications carriers to meet their responsibilities to provide assistance. In 1994, Congress passed the Communications Assistance for Law Enforcement Act (CALEA), directing the telecommunications industry to design, develop, and deploy solutions that meet specific law enforcement requirements. It authorized the appropriation of $500 million to reimburse carriers for the direct costs of modifying systems they had installed or deployed on or before January 1, 1995. CALEA requires the OIG to report to Congress every two years on the act's implementation.

Our audit found that after more than nine years and nearly $450 million in payments or obligations, full implementation of CALEA remains significantly delayed. The main reasons for the delay were that carriers have (1) challenged or failed to develop electronic surveillance standards that address all law enforcement needs, (2) challenged the FBI's carrier cost recovery regulations, and (3) not provided the FBI with reasonable deployment cost estimates.

In addition, the FBI reported that only recently are negotiations with manufacturers being completed to develop a software solution that will provide carriers with right-to-use licenses. The licenses would allow a carrier to activate the software once the manufacturer has been reimbursed for its development cost and to thereby comply with CALEA requirements. Except for a one-time payment to a carrier to ensure that its network in Salt Lake City was CALEA compliant for the 2002 Winter Olympics, the FBI has not yet entered into any agreements with carriers because FBI personnel have believed that carriers' cost estimates for activation were unreasonable.

The FBI's cost estimates suggest the current funding level of $500 million is insufficient to fully implement CALEA, but its cost estimates have varied widely. The audit was therefore skeptical of the accuracy of the FBI's estimates and of the likelihood that the implementation cost can be determined with any specificity.

Our report made the following three recommendations to the FBI to improve CALEA implementation:

• Collect and maintain data on the carrier equipment that is and is not CALEA compliant,

• Periodically survey state and local law enforcement to determine the extent to which delays in implementing CALEA are adversely affecting the ability to conduct lawful electronic surveillance, and

• Submit to Congress legislative changes needed to ensure lawful electronic surveillance is achieved expeditiously in the face of rapid technological change.

The FBI agreed with the recommendations.

Operations of the Legal Attaché Program

The FBI has significantly expanded its overseas operations in the last decade because of the globalization of crime and terrorism and the expansion of the FBI's extraterritorial authority. The FBI operates offices known as legal attachés (legats) in 46 locations around the world. The primary mission of the legats is to support the FBI's investigative work on threats against the United States and its citizens by establishing, maintaining, and enhancing liaison with foreign law enforcement agencies. Working with the foreign agencies, the legats seek to build networks that prevent crime or ensure access to the information needed to locate and extradite international criminals and terrorists and obtain evidence for their prosecution.

The objectives of our review were to determine the type of activities legats perform, their effectiveness in establishing liaisons with foreign agencies and in coordinating activities with other U.S. agencies overseas, the criteria and process used to determine the placement of offices, and the processes for selecting and training FBI personnel for legat positions. We conducted work primarily at FBI Headquarters in Washington, D.C., and at legats in Germany, Canada, South Africa, and Japan.

A key function of legats is handling requests for investigative assistance - referred to as investigative leads - from FBI Headquarters and field offices. Our audit found that although the number of investigative leads has grown significantly, overall, the legats appear able to handle the increasing workload. An exception was the Legat in Ottawa, which has a high volume of pending leads. The FBI's efforts to alleviate this problem, primarily by assigning temporary duty staff, have had marginal success. In addition, our review of FBI personnel traveling to Canada on temporary assignments indicated stronger controls are needed to ensure required country clearances are obtained and complete records of these clearances maintained.

After interviewing officials from numerous law enforcement and security agencies, we concluded that, in general, the four legats in the countries we visited were maintaining effective foreign liaisons. Most of the officials were complimentary of the legats and the working relationship that existed between their respective offices. The ambassadors, their staffs, and representatives from selected U.S. law enforcement and intelligence agencies uniformly described their interactions with the legats as positive.

In our review, we found the FBI periodically assesses the need for legat offices and for expanding existing offices. These assessments have resulted in the opening of new offices, adding staff to existing offices to address increasing workload, and consolidating offices when the workload no longer justified keeping an office open.

We found the process the FBI has in place for selecting agents for legat positions is reasonable. But both an FBI review and our review indicate that improvements are needed in the training program for newly selected legat staff. Over one-third of current legat staff did not meet the FBI's foreign language proficiency goals at the time of our audit.

Among the six recommendations we made to improve the operation of the program were that the FBI should analyze the staffing level and workload in Legat Ottawa to determine whether additional permanent resources are needed to resolve the backlog of pending leads. The FBI should also strengthen controls to ensure country clearances are obtained, develop a system to ensure complete records of these clearances are maintained, and direct the FBI's Inspection Division to review compliance with country clearance requirements during its inspections.

Investigations

During this reporting period, the OIG received 343 complaints involving the FBI. The most common allegations made against FBI employees included job performance failure, waste and misuse of government property, and other official misconduct. The OIG opened 15 cases and referred 17 allegations to the FBI's OPR for investigation.

At the close of the reporting period, the OIG had 49 open cases of alleged misconduct against FBI employees. The criminal investigations cover a wide range of offenses, including the improper release of law enforcement information and theft. The administrative investigations include serious allegations of misconduct, including allegations against high-level employees. The following are examples of cases involving the FBI that the OIG investigated during this reporting period:

• Two civilians were arrested in the Eastern District of Michigan on charges of obstruction of justice, witness tampering, and making threats against a federal law enforcement officer. A third civilian was arrested on related charges of heroin distribution. An investigation by the OIG's Chicago Field Office, assisted by the FBI, developed evidence of an elaborate scheme by one of the civilians, who was an FBI confidential informant, to use the other two civilians to fabricate information about a multistate drug-trafficking organization that did not exist. To give credibility to his scheme, the confidential informant arranged scripted telephone conversations with the civilians, who posed as drug dealers, that took place on telephone lines he knew were being wiretapped by the FBI. During these conversations, one of the civilians made death threats against an undercover FBI agent and falsely claimed the special agent in charge (SAC) of the Detroit FBI Field Office was leaking information to him about the case. The OIG disproved this allegation and exonerated the SAC of wrongdoing. The investigation and judicial proceedings are continuing.

• An FBI investigative analyst assigned to the Dallas Field Division was arrested in the Northern District of Texas on charges of exceeding authorized access to a government computer and making false statements. A joint investigation by the OIG's Dallas Field Office and the FBI determined the analyst had accessed numerous FBI computer systems - including the Automated Case Support system and the National Crime Information Center - on active, pending, and closed investigations. The analyst disclosed information from these systems to friends and family members, some of whom were the subjects of FBI investigations. During the investigation, the analyst made false statements and failed to fully divulge the names of those to whom he disclosed the information. The analyst was terminated as a result of this investigation. Judicial proceedings are continuing.

• A former legal technician assigned to the Freedom of Information and Privacy Act Unit at FBI Headquarters was arrested, pled guilty, and was sentenced in the District of Columbia to 12 months and 1 day's incarceration and 2 years' supervised release on charges of computer fraud. An investigation by the OIG's Washington Field Office developed evidence that between September and November 2002, the legal technician conducted several searches in the FBI's computer system for information about individuals who were subjects of ongoing drug investigations. The legal technician then shared the results of her computer searches with individuals who were associated with the subjects of the investigations.

• An FBI investigative assistant assigned to the Atlanta Field Division pled guilty in the Northern District of Georgia to charges of false statements and embezzlement of government funds. An investigation by the OIG's Washington Field Office led to an indictment alleging the investigative assistant submitted a travel voucher claiming $5,692 in reimbursable expenses for round-trip airfare to Cairo, Egypt, on Delta Airlines. In actuality, the investigative assistant traveled to Cairo using a Delta "Buddy Pass," a travel benefit extended to Delta employees and their friends. The Buddy Pass allowed her to travel at a cost of $405 rather than the $5,692 she claimed on her travel voucher. Sentencing is pending.

Ongoing Work

The Handling of Intelligence Information Prior to the September 11 Attacks

At the FBI Director's request, the OIG is reviewing issues related to the FBI's handling of certain intelligence information prior to the September 11 terrorist attacks. Among the issues under review are the FBI's handling of an electronic communication written by its Phoenix Division in July 2001 regarding extremists' attending civil aviation schools in Arizona, the FBI's handling of the Zacarias Moussaoui investigation, and the FBI's handling of information related to September 11 terrorists Nawaf al-Hazmi and Khalid al-Mihdhar.

Language Translation Services

The OIG is conducting an audit of the FBI's language translation services program. The audit's objectives are to determine the extent and causes of any translation backlog; assess efforts to hire additional translators; and evaluate whether procedures ensure appropriate prioritization of work, accurate and timely translations of pertinent information, and proper security of sensitive information. The OIG also is conducting a separate investigation into allegations made by former FBI contract linguist Sibel Edmonds. These allegations include a claim that another linguist failed to report pertinent intercepted information as instructed and claims relating to improper hiring and supervision, abuse of time and attendance requirements, and misuse of official travel.

The FBI's Chinese Counterintelligence Program

At the request of the FBI Director, the OIG is conducting a review of the FBI's performance in connection with the handling of Katrina Leung, who provided information to the FBI's Chinese counterintelligence program. Allegedly, Leung had a long-term intimate relationship with her FBI handler, Special Agent James J. Smith. The OIG's review will examine a variety of performance and management issues related to the FBI's handling of Leung and the FBI's Chinese counterintelligence program.

Reprioritization of Investigative Resources

The OIG is reviewing the FBI's efforts to reprioritize and refocus its investigative resources on counterterrorism-related issues in the aftermath of the September 11 terrorist attacks. The audit's objectives are to identify internal operational changes in the FBI resulting from this ongoing reprioritization effort (including the changes in the types of offenses the FBI investigates) and to obtain feedback from external entities (including federal, state, and local law enforcement agencies) on the impact of the FBI's reprioritization on their operations.

Implementation of the Attorney General's Guidelines for Key Investigative Programs

The OIG is reviewing the FBI's implementation of four sets of guidelines issued by the Attorney General on May 30, 2002: the Attorney General's Guidelines Regarding the Use of Confidential Informants; the Attorney General's Guidelines on FBI Undercover Operations; the Attorney General's Guidelines on General Crimes, Racketeering Enterprise, and Terrorism Enterprise Investigations; and the Revised Department of Justice Procedures for Lawful, Warrantless Monitoring of Verbal Communications. The objectives of the OIG review are to determine what steps the FBI has taken to implement the guidelines, examine how effective those steps have been, and assess the FBI's compliance with key provisions of the guidelines.

DNA Laboratory

The OIG is reviewing the failure of a former technician in the FBI Laboratory DNA Analysis Unit to complete steps designed to detect contamination in the analysis process. In addition, with the assistance of nationally known DNA scientists, the OIG is conducting a broader assessment of the DNA Analysis Unit's protocols and procedures to determine if other vulnerabilities exist in its operations.

Management of the Trilogy Project

The OIG has initiated an audit of the FBI's management of the Trilogy project, the FBI's largest and most critical IT project. The objectives are to determine the progress made toward achieving the project's cost, schedule, technical, and performance baselines and the extent to which Trilogy will meet the FBI's overall current and longer-term IT requirements.