Semiannual Report to Congress
April 1, 2006-September 30, 2006
Office of the Inspector General
In June 2006, the OIG’s Oversight and Review Division released an unclassified version of the full report it completed in 2004 entitled, “A Review of the FBI’s Handling of Intelligence Information Prior to the September 11 Attacks.” The June 2006 version contains a chapter that was previously unreleased to the public concerning the FBI’s investigation of Zacarias Moussaoui. The OIG could not previously release portions of the unclassified report related to Moussaoui because his trial was pending at the time.
The report describes the FBI’s investigation of Moussaoui, who was arrested on immigration charges in Minneapolis on August 16, 2001. After Moussaoui’s arrest, the Minneapolis FBI, concerned that Moussaoui was training to possibly commit a terrorist act involving a commercial airplane, attempted to investigate his potential links to terrorism by seeking a warrant to search Moussaoui’s computer and other belongings. However, FBI Headquarters did not believe that a sufficient predicate existed to obtain either a criminal warrant or a Foreign Intelligence Surveillance Act (FISA) warrant. At the time of the September 11 attacks, Moussaoui remained in custody, and the FBI planned to deport him to France.
The OIG found significant problems with the FBI’s handling of the Moussaoui case that were attributable to both systemic issues — how it handled intelligence and counterterrorism issues at the time — and failings on the part of some of the individuals involved in the case. We concluded, however, that no FBI employee committed intentional misconduct or attempted to deliberately sabotage the Minneapolis FBI’s request for a FISA warrant, as one FBI employee charged. We did find that the Minneapolis FBI agents, who deserved credit for their tenacity and accurate instincts, did not receive sufficient support either from their field office management and legal counsel or FBI Headquarters.
The Moussaoui case illustrated systemic problems with the FBI’s handling of intelligence cases at the time, including a narrow and conservative interpretation of the FISA requirements, inadequate analysis of whether to proceed as a criminal or intelligence investigation, adversarial relations between FBI Headquarters and the field, and inadequate and disjointed reviews of potential FISA requests by FBI attorneys. While some of the information contained in this report was released during the Moussaoui trial, the report provides additional details as well as a step-by-step chronology of the FBI’s handling of the Moussaoui investigation both in the field and at FBI Headquarters.
Our full report found significant deficiencies in the FBI’s handling of intelligence information related to September 11, and concluded that the FBI failed to fully evaluate, investigate, exploit, and disseminate the information it had received about: 1) efforts by Usama Bin Laden to send students to attend United States civil aviation schools to conduct terrorist activities and 2) two of the September 11 hijackers — Nawaf al Hazmi and Khalid al Mihdhar. In the final report, the OIG made 16 recommendations for improving the FBI’s intelligence and counterterrorism efforts.
In response to the report, the FBI said it has upgraded the physical infrastructure in FBI field offices to handle classified information, established centralized intelligence components in each field office, and trained employees on subjects such as disseminating threat-related information and FISA.
In August 2006, the OIG’s Oversight and Review Division issued its report on the shooting incident involving the FBI and long-time fugitive Filiberto Ojeda Ríos — the leader of a clandestine Puerto Rican pro-independence organization that claimed credit for violent crimes during the 1970s and 1980s. On September 23, 2005, FBI agents approached a residence in western Puerto Rico to arrest Ojeda. The operation resulted in a brief but intense exchange of gunfire between Ojeda and the FBI in which one FBI agent was seriously wounded. The exchange was followed by a standoff during which FBI agents unsuccessfully tried to persuade Ojeda to surrender. Later, an FBI agent observed Ojeda with a gun in his hand and fired three shots, one of which struck Ojeda. Although several agents heard Ojeda cry out and fall, no one entered the house until the next day, at which time FBI agents found Ojeda dead on the floor.
Several journalists, elected officials, and activists in Puerto Rico criticized the FBI for using excessive force to capture Ojeda and for waiting 18 hours after Ojeda was shot before entering his residence. As a result, the FBI Director requested that the OIG review the circumstances surrounding the FBI’s arrest operation and the death of Ojeda.
We concluded that the FBI agents’ use of force in the Ojeda operation did not violate the Department’s Deadly Force Policy, which states that Department law enforcement officers may use deadly force when the officer “has a reasonable belief that the subject of such force poses an imminent danger of death or serious physical injury to the officer or to another person.” The OIG found that Ojeda became aware that the FBI was coming to arrest him, made preparations to resist arrest, and opened fire on the agents as they attempted to enter the residence and before any agents had discharged their weapons. The OIG concluded that once Ojeda began firing he posed an imminent danger to the agents, and the agents were justified in returning fire.
We also determined that the FBI’s cautious approach toward entering the residence after Ojeda was shot was motivated by considerations of agent safety, not by any desire to withhold medical treatment from Ojeda. The FBI’s concern during this period was that Ojeda might not be incapacitated and there might be a second gunman inside the house because the arrest team believed that more than one weapon had been fired at them during the initial gunfight. FBI Headquarters officials also were concerned that it would be difficult to detect improvised explosive devices inside the house at night. Moreover, the OIG found that the decision to delay entry until the next day likely had no impact on Ojeda’s death. The forensic pathologist from the Puerto Rico Institute of Forensic Sciences who performed the autopsy estimated that Ojeda died from blood loss approximately 15 to 30 minutes after being shot.
However, the OIG report cited deficiencies in several aspects of the FBI’s planning and execution of the attempted arrest. For example, we determined that the decision to conduct an emergency daylight assault to arrest Ojeda was extremely dangerous and not the best option available. Moreover, the FBI had sufficient information to expect that Ojeda would be prepared to resist an arrest attempt with violence, as he had done in the past, and that he would have a significant advantage over the arresting agents in terms of cover, elevation, and visibility. Conversely, a strategy of surrounding the residence and calling for Ojeda to surrender, with the option of using chemical agents such as tear gas to force Ojeda outside, would have been a safer and potentially more effective strategy.
Our report provided 10 systemic recommendations to improve the planning and conduct of future FBI arrest operations, including ensuring the reconsideration of all relevant tactical options when circumstances change and ensuring that negotiations are integrated into tactical planning for operations in which a standoff is a foreseeable contingency.
In May 2006, the OIG’s Oversight and Review Division issued a classified report and unclassified executive summary examining the FBI’s handling and oversight of Katrina Leung, one of its highest paid counterintelligence assets. Leung and her FBI handler of 18 years, Special Agent James J. Smith, were arrested in April 2003 after an FBI investigation alleged that Leung had been spying for the People’s Republic of China against the United States. The FBI investigation also found that Leung and Smith had been involved in an intimate romantic relationship for nearly 20 years. Following the arrests of Smith and Leung, the FBI Director asked the OIG to review the performance and management issues related to this case.
We found that Smith operated Leung with little oversight based primarily on his status as a top agent in Los Angeles and Leung’s status as a highly valued asset. We also determined that the FBI was aware of serious counterintelligence concerns about Leung that began to surface during the late 1980s and early 1990s, but did little to follow up on the warning signals it received. Consequently, the FBI’s inattention to the oversight of Smith and Leung, its willingness to exempt Smith from complying with the rules governing asset handling, and its failure to aggressively question Smith or follow up when red flags arose allowed Leung to deceive the FBI about the extent of her spying for the People’s Republic of China and permitted Smith to continue his affair with Leung until his retirement in November 2000.
In May 2000, the FBI received credible information indicating that Leung was a spy for the People’s Republic of China and that she had a source in the FBI’s Los Angeles Division. The FBI inappropriately informed Smith about this information — which implicated him — and did not begin an investigation of Smith and Leung until a year later. The OIG concluded that in light of the serious nature and specificity of the allegation, there was no reasonable explanation for the FBI’s delay in opening the investigation.
Since the discovery of Smith’s long-term relationship with Leung, the FBI has taken steps to correct deficiencies in its China Program and improve asset handling and vetting procedures. However, the OIG report also provided 11 recommendations to help further address the systemic issues that enabled Smith and Leung to escape detection and avoid accountability. The recommendations included requiring separate documentation for red flags and other counterintelligence concerns involving assets, requiring alternate case agents to frequently meet with assets, limiting the time a single agent can handle an asset, and fully implementing the FBI’s policy regarding counterintelligence polygraph examinations.
In 2004, news articles reported that the FBI questioned political demonstrators across the United States in connection with threatened violent and disruptive protests at the Republican and Democratic National Conventions held that summer. The articles stated that dozens of people had been interviewed in at least six states, including anti-war demonstrators and political demonstrators and their friends and family members. Following publication of the news articles, several members of Congress requested that the OIG initiate an investigation into “possible violations of First Amendment free speech and assembly rights by the Justice Department in connection with their investigations of possible protests at the Democratic and Republican political conventions in Boston and New York and other venues.”
In April 2006, the OIG’s Oversight and Review Division issued its report on the FBI’s use of its investigative authorities to conduct interviews of potential protesters in advance of the 2004 national political conventions. The OIG review did not substantiate allegations that the FBI improperly targeted protesters for interviews in an effort to chill the exercise of their First Amendment rights at the 2004 national political conventions. The OIG concluded that FBI interviews of potential convention protesters and other related interviews, together with its related investigative activities, were conducted for legitimate law enforcement purposes based on information associated with possible bomb threats and other violent criminal activities.
The OIG found that nearly all of the protester-related investigative activity was devoted to addressing 17 distinct threats to the conventions falling within the FBI’s domestic terrorism program. The report concluded that the FBI addressed each threat in accordance with the Attorney General’s Guidelines on General Crimes, Racketeering Enterprise and Terrorism Enterprise Investigations (General Crimes Guidelines). In addition, the review identified seven terrorism enterprise investigations not initiated in connection with the conventions that generated convention-related criminal intelligence. The OIG concluded that the investigative techniques used to obtain this intelligence were a logical outgrowth of the underlying investigations, and that the investigative activity was undertaken in a manner consistent with the requirements of the General Crimes Guidelines.
The OIG’s Evaluation and Inspections Division continued its monitoring of the FBI’s progress toward achieving biometric interoperability between its Integrated Automated Fingerprint Identification System (IAFIS) and the DHS’s Automated Biometric Identification System (IDENT). Our latest of six reports described how the FBI and the DHS have resolved a major impasse and are now implementing the first phase of a three-phase plan to make the fingerprint systems fully interoperable by December 2009.
In our previous reports, we described how fully interoperable fingerprint systems would allow law enforcement and immigration officers to more readily identify criminals and known or suspected terrorists trying to enter the United States and those already in the country. However, the FBI and the former Immigration and Naturalization Service, (INS), now part of the DHS, developed separate automated fingerprint systems in the early 1990s — IAFIS is based on 10 rolled fingerprints while IDENT uses 2 flat fingerprints. In our December 2004 report, we found that the differing fingerprint collection requirements and preferences had created an impasse that stalled interoperability efforts. Our latest report related that this impasse was resolved when the DHS agreed to modernize IDENT and convert US-VISIT — its entry/exit and border security system — from a 2‑ to a 10‑fingerprint system.
In addition, the FBI and the DHS agreed to a three-phase plan that will make their systems fully interoperable by December 2009. In the first phase, the FBI and the DHS will deploy a joint automated system for sharing key immigration and law enforcement data. In the latter two phases, the agencies will expand the amount of immigration and law enforcement data shared and allow access to that data by federal, state, and local law enforcement agencies. When the interoperability effort is completed, a single request will search all fingerprint records maintained by the FBI and the DHS, and the requestor will receive all associated criminal history and immigration information about an individual.
While the FBI and the DHS continue their efforts to employ a fully interoperable system by 2009, the FBI has taken interim steps to reduce the risk that criminal aliens or terrorists will enter the United States undetected. As we recommended in our December 2004 report, the FBI has increased the transmission of “Known or Suspected Terrorists” records to the DHS from monthly to daily. In addition, the FBI has improved the overall availability of IAFIS to all users, has increased its capacity for DHS-requested fingerprint searches, and has reduced the response time to DHS requests for checks of aliens’ fingerprints. However, until full IDENT/IAFIS interoperability is achieved, the DHS’s policy of using IAFIS to check the fingerprints of less than 1 percent of the visitors subjected to US-VISIT will continue the risk that criminal aliens or terrorists could enter the United States undetected.
The OIG’s Audit Division examined the FBI’s Combined DNA Index System (CODIS), a national DNA-profile matching service that contains DNA profiles from crime scenes, convicted offenders, and sources involving missing persons. CODIS enables federal, state, and local crime laboratories to electronically compare over 3.1 million DNA profiles for crime solving and identifying missing or unidentified persons. The FBI CODIS Unit is responsible for overseeing CODIS operations and ensuring that these activities are conducted appropriately.
Our report followed-up on an OIG audit conducted in 2001 that recommended the FBI improve its oversight of CODIS–participating laboratories to ensure compliance with applicable standards. In our latest report, we found that the FBI has improved several aspects of CODIS operations, but must make further progress to ensure that it properly oversees the CODIS program and its participants. Through a comprehensive national survey of laboratories participating in CODIS, we found that the FBI received an overall positive evaluation regarding its administration of CODIS. However, we also found that the FBI could improve the CODIS community’s understanding and compliance with applicable standards by providing key CODIS laboratory staff with training on quality assurance standards, by tracking findings identified in quality assurance audits of state and local CODIS laboratories, and by placing a greater emphasis on written rather than verbal guidance to the CODIS community.
In addition, we found that the FBI has not implemented routine audits of forensic profiles uploaded into CODIS, instead relying on participating laboratories to annually certify that they are in compliance with CODIS standards. For example, in 18 OIG audits of participating laboratories during FYs 2004 and 2005, we found 13 incidents where forensic profiles uploaded in CODIS violated some aspect of CODIS requirements. In four of those instances, profiles matching the victim of the crime were inappropriately uploaded into CODIS, and in two instances profiles matching a known person who was not a suspected perpetrator were inappropriately uploaded into CODIS. Six of the 18 laboratories audited had not obtained the certification forms from laboratory employees stating that they agreed to upload only allowable profiles into the CODIS database.
We concluded that these weaknesses leave CODIS potentially vulnerable to undetected, inadvertent, or willful non-compliance by CODIS participants and consequently could undermine the integrity of the CODIS program. We made 22 recommendations to the FBI to better protect the integrity of CODIS data by implementing additional internal controls over data compliance, tracking audit findings, and conducting routine audits of forensic profiles to verify compliance. The FBI agreed with 19 of the 22 recommendations.
During this reporting period, the OIG’s Audit Division audited several state and local laboratories that participate in CODIS to determine if they comply with the FBI’s Quality Assurance Standards (QAS) and National DNA Index System (NDIS) requirements. Additionally, we evaluated whether the laboratories’ DNA profiles in CODIS databases were complete, accurate, and allowable. Below are two examples of findings reported in our audits:
The FBI Laboratory in Quantico, Virginia, is one of the largest and most comprehensive forensic laboratories in the world, conducting over one million examinations of physical evidence annually. However, the FBI Laboratory relies on an outdated system to manage the evidence that passes through the Laboratory. The current system is a database that shows when an item enters the Laboratory for testing, when analyses are performed, and when the item leaves the Laboratory. It does not, however, readily locate evidence within the Laboratory, determine what work remains to be completed, or provide reports to help manage Laboratory operations.
To remedy the limitations of the existing system, the FBI contracted with a private company in September 2003 to provide the FBI with a commercial-off-the-shelf Laboratory Information Management System (LIMS), which would be used to track evidence using bar-code technology and provide a variety of other reporting capabilities. We had recommended in a 2004 review of protocol and practice vulnerabilities in the FBI DNA Laboratory that the FBI’s plans to implement the LIMS by the end of FY 2004 should remain a top priority because the system would reduce the incidents of error and allow staff members to be more efficient in performing their duties. However, our current report found that after many delays and extensive customization of LIMS, the system was unable to meet the FBI’s security requirements. In March 2006, the FBI and the private company agreed to terminate the LIMS contract, resulting in an overall loss to the FBI of $1.18 million.
The OIG’s Audit Division determined that because the LIMS project began before the FBI established its Information Technology Investment Management processes, the FBI did not have the capability early on to identify problems with the contract. Additionally, the FBI did not adequately document the security requirements for certification and accreditation of the LIMS software and, to the extent security requirements evolved, did not clarify those changes through contract modifications.
With the termination of the LIMS project, the FBI’s Laboratory Division still lacks a modern system to track evidence and otherwise effectively manage its Laboratory operations. The OIG made three recommendations to the FBI, including ensuring that any future Laboratory information management system is overseen by an experienced IT project manager. The FBI agreed with all the recommendations.
During this reporting period, the OIG received 689 complaints involving the FBI. The most common allegations made against FBI employees were Intelligence Oversight Board violations, job performance failure, waste or misuse of government property, and misuse of a credit card. The OIG opened 12 cases and referred 660 allegations to the FBI’s Inspection Division.
At the close of the reporting period, the OIG had 39 open cases of alleged misconduct against FBI employees. The criminal investigations cover a wide range of offenses, including fraud, release of information, and theft. The administrative investigations include serious allegations of misconduct, such as allegations against high-level employees. The following are examples of cases involving the FBI that the OIG’s Investigations Division investigated during this reporting period:
As required by the USA Patriot Improvement and Reauthorization Act of 2005, the OIG is reviewing the FBI’s use of authorities modified under the Patriot Act to obtain business records for foreign intelligence purposes and issue National Security Letters. Our review will examine the effectiveness of these investigative tools and identify any noteworthy circumstances related to their use. We also will examine what information was collected, retained, and analyzed, and how it was used and disseminated; any procedural delays that may have harmed national security; and any impediments that may have prevented the FBI from making full use of the authorities under the Patriot Act. The report is due to Congress by March 2007.
In March 2005, the FBI announced plans to develop the Sentinel case management system to replace the failed Virtual Case File effort. The main goal of Sentinel is to enable the FBI to move from a paper-based reporting system to an electronic records system and maximize the FBI’s ability to use and share the information in its possession. As the second in a series of audits evaluating the development and implementation of the FBI’s Sentinel project, the OIG is reviewing the Sentinel contract to determine if it contains the necessary work requirements, benchmarks, and other provisions to help ensure the success of the project. The audit also will assess the FBI’s progress in addressing the concerns discussed in our previous Sentinel audit report issued in March 2006. In addition, on September 14, 2006, the Inspector General testified before the House Appropriations Committee, Subcommittee on Science, the Departments of State, Justice, and Commerce, and Related Agencies, concerning “Oversight of the Federal Bureau of Investigation.” His testimony focused on the FBI’s Sentinel program and discussed the preliminary results of the OIG’s second audit.
The OIG is conducting a follow-up review of the FBI’s progress in implementing recommendations contained in our August 2003 report entitled, “A Review of the FBI’s Performance in Deterring, Detecting, and Investigating the Espionage Activities of Robert Philip Hanssen.” The OIG report made 21 recommendations to help the FBI improve its internal security and enhance its ability to deter and detect espionage. The Hanssen follow-up review will assess the FBI’s response to recommendations in the report.
In August 2002, the OIG issued several audit reports on the control of weapons and laptop computers by various Department components. These reports detailed significant lapses in the control of weapons and laptops, particularly in the FBI. Our follow-up audit will focus on the FBI’s efforts to take corrective action on the recommendations in our original audit report.
The OIG issued a report in May 2005 examining the FBI’s efforts to hire, train, and retain intelligence analysts. The OIG report made 15 recommendations to help the FBI improve its efforts in this area. We currently are conducting a follow-up audit to examine the progress made by the FBI in response to these recommendations.
The OIG initiated a review to examine allegations that the FBI targeted domestic advocacy groups for scrutiny based solely upon their exercise of rights guaranteed under the First Amendment. The review will examine allegations regarding the FBI’s investigation, and the predication for any such investigation, of certain domestic advocacy groups, including the Thomas Merton Center, Greenpeace, and People for the Ethical Treatment of Animals. The review will be similar in scope to our review of the FBI’s investigation of potential protesters at the 2004 Democratic and Republican National Conventions.
The OIG is reviewing FBI employees’ observations and actions regarding alleged abuse of detainees at Guantanamo Bay, Abu Ghraib prison, and other venues controlled by the U.S. military. The OIG is examining whether FBI employees participated in any incident of detainee abuse, whether FBI employees witnessed incidents of abuse, whether FBI employees reported any abuse, and how those reports were handled by the FBI. In addition, the OIG is assessing whether the FBI inappropriately retaliated against or took any other inappropriate action against any FBI employee who reported any incident of abuse.
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