Semiannual Report to Congress

April 1, 2006-September 30, 2006
Office of the Inspector General

Highlights of OIG Activities

The following table summarizes OIG activities discussed in this report. As these statistics and the following highlights illustrate, the OIG has conducted wide-ranging oversight of Department programs and operations.

Statistical Highlights
April 1, 2006 — September 30, 2006

Allegations Received by the
Investigations Division


Investigations Opened


Investigations Closed








Administrative Actions




Audit Reports Issued


Questioned Costs

$10 million

Funds Put to Better Use

$3 million

Recommendations for
Management Improvements


Examples of OIG audits, evaluations, and special reports completed during this semiannual reporting period include:

  • The BOP’s Monitoring of Mail for High-Risk Inmates. The OIG evaluated the BOP’s efforts to prevent terrorists and other high-risk inmates from using the mail or the cover of a foreign language to continue or encourage criminal or terrorist activities. We found that the BOP does not adequately read the mail or listen to the telephone calls, visitor communications, or cellblock conversations of terrorists and high-risk inmates; does not have sufficient resources to translate inmate communications in foreign languages; and lacks staff that is adequately trained in intelligence analyses techniques to properly assess terrorism communications. We made 15 recommendations to assist the BOP in improving its monitoring of mail and verbal communications of terrorists and high-risk inmates.

  • Review of the FBI’s Handling of Intelligence Information Related to the September 11 Attacks. The OIG released an unclassified version of its full report on the “FBI’s Handling of Intelligence Information Prior to the September 11 Attacks.” This report includes a previously unreleased chapter on the FBI’s investigation of Zacarias Moussaoui, a French citizen who is serving a life sentence after pleading guilty to charges related to his participation in a plot to fly planes into buildings. The OIG could not previously release the portions of the unclassified report related to Moussaoui because his trial was pending. This chapter of the report analyzes the efforts by the Minneapolis FBI in August 2001 to obtain a warrant to search Moussaoui’s computer and belongings after his arrest. We 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 individuals involved in the case.

  • Review of the FBI’s Attempt to Arrest Filiberto Ojeda Ríos. At the request of the FBI Director, the OIG reviewed the shooting incident involving the FBI and Filiberto Ojeda Ríos, a fugitive who was the leader of a clandestine Puerto Rican pro-independence organization. During an attempted capture of Ojeda at his residence in western Puerto Rico, the FBI and Ojeda engaged in a brief but intense exchange of gunfire that resulted in Ojeda striking and seriously injuring an FBI agent. The exchange was followed by a standoff during which FBI agents unsuccessfully tried to persuade Ojeda to surrender. Later, an FBI agent saw Ojeda in the window with a gun in his hand and fired three shots, one of which struck Ojeda. Although several agents heard Ojeda cry out and fall, the FBI did not enter the house until the next day, at which time FBI agents found Ojeda dead on the floor. We concluded that the FBI agents’ use of force in the Ojeda operation did not violate the Department’s Deadly Force Policy. 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. However, we cited several deficiencies in the planning and execution of the attempted arrest and made 10 recommendations to improve future FBI arrest operations.

  • Review of the FBI’s Handling and Oversight of Asset Katrina Leung. The OIG examined the FBI’s handling and oversight of Katrina Leung, one of the FBI’s highest paid counterintelligence assets who allegedly also worked for the People’s Republic of China. Leung had a longtime intimate relationship with her FBI handler, Special Agent James J. Smith. We found that the FBI was aware of serious counterintelligence concerns about Leung, but did little to follow up on the warning signals it received. Since this mishandling came to light, the FBI has taken steps to correct deficiencies in its China Program and improve asset handling and vetting procedures. We provided 11 recommendations to help further address the systemic issues that enabled Smith and Leung to escape detection for more than 20 years.

  • Follow-Up Review of the FBI’s Progress Toward Biometric Interoperability between Fingerprint Systems. This OIG evaluation reported on the progress of the FBI and the DHS toward achieving biometric interoperability between the FBI’s Integrated Automated Fingerprint Identification System and the DHS’s Automated Biometric Identification System. The two agencies 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. Fully interoperable fingerprint systems will 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.

  • Review of ATF’s Violent Crime Impact Team Initiative. An OIG review of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Violent Crime Impact Team (VCIT) initiative concluded that, while the initiative may be an effective tool to reduce violent crime in targeted areas, inconsistent oversight and direction from ATF have allowed local VCITs to ignore key elements of the strategy. We also found that ATF’s claim that it had met its stated goals was based on insufficient data. We made five recommendations to improve ATF’s implementation of the VCIT initiative, including establishing specific operational guidelines for VCIT implementation and developing an adequate evaluation strategy to assess the success of the VCIT program.

  • Follow-Up Review of the DEA’s Efforts to Control the Diversion of Controlled Pharmaceuticals. The OIG conducted a follow-up review on the DEA’s actions to control the illegal diversion of pharmaceutical drugs. We found that the DEA has taken important steps to improve its ability to control the diversion of pharmaceuticals, especially over the Internet. Those steps include centralizing diversion criminal investigations with other criminal investigations and providing additional intelligence resources to diversion investigators. Despite these positive actions, we also found several shortcomings that were first reported in our 2002 review. Specifically, the time spent by special agents assisting diversion investigations still constitutes a small share of their total investigative effort, the diversion groups in the field receive only limited support from intelligence analysts, and intelligence analysts and special agents are offered minimal diversion control training. We made six recommendations to help the DEA further improve its ability to address the growing problem of diversion of controlled pharmaceuticals.

Investigations of Misconduct

As shown in the statistics in the table at the beginning of this section, the OIG investigates many allegations of misconduct involving Department employees or contractors hired with Department money. Examples of the OIG’s investigations discussed in this report include:

  • A joint investigation by the OIG and the FBI led to the indictment of six BOP correctional officers assigned to the Federal Correctional Institution in Tallahassee, Florida, on charges of conspiracy to sexually abuse female inmates and introduction of contraband. OIG investigators developed evidence that the correctional officers were involved in a scheme to provide contraband to female inmates in exchange for sexual favors and money. Two of the correctional officers pled guilty and are awaiting sentencing, and three correctional officers are involved in judicial proceedings. The sixth correctional officer and OIG special agent William “Buddy” Sentner were killed in an exchange of gunfire initiated by the correctional officer during the execution of the arrest warrants.

  • An OIG investigation led to the arrest of a painter who received more than $1 million from the September 11 Victim Compensation Fund based on his fraudulent claim that he was permanently disabled and unable to work as a result of back injuries sustained during the September 11 terrorism attacks. Videotape evidence gathered by the OIG demonstrated that the painter continued to engage in physical activities, such as bicycling and dancing, which were inconsistent with the injuries he claimed. In addition, the OIG gathered evidence that the painter continued to paint houses in his neighborhood and that he fraudulently concealed pre-existing injuries from the hearing officer who evaluated his disability claim.

  • A former special agent in charge (SAC) of the FBI’s El Paso field office was convicted of making false statements. The jury found that the SAC concealed material facts from the FBI concerning his relationship and financial dealings with a Mexican national who had alleged Mexico drug cartel associations and was a former confidential informant. The jury also found that the SAC made false statements when he failed to disclose in his 2002 financial disclosure report that the former confidential informant provided the SAC with paid family vacations to Las Vegas and Mexico, an El Paso country club membership, weekly residential lawn service, and a $5,000-per-month job for the SAC’s wife. In return, the SAC assisted the former confidential informant by attempting to resolve his numerous visa issues.

  • A former FBI telecommunications specialist pled guilty to charges of embezzlement and theft of public money, property, or records after OIG investigators found that the specialist stole $27,000 from telephone company refund checks intended for the FBI.

  • Two BOP correctional officers are being prosecuted on charges of deprivation of civil rights under color of law, conspiracy, aiding and abetting, and obstruction of justice after OIG investigators developed evidence that the correctional officers beat an inmate in his cell, blocked the views of surveillance cameras to conceal the incident, and made false entries in government documents.

  • An OIG investigation of an Office of Justice Programs (OJP) contracting specialist who accepted gratuities from a contractor led to the specialist receiving a 45-day suspension, reassignment to a non-procurement position, and permanent revocation of her contracting warrant.

Ongoing Reviews

This report also describes many ongoing OIG reviews of important issues throughout the Department, including:

  • Coordination of Violent Crime Task Forces in the Department

  • Review of Cost Tracking and Planning for the Department’s IT Initiatives

  • The Department’s Internal Controls Over Terrorism Reporting Statistics

  • The FBI’s Use of Certain USA PATRIOT Act (Patriot Act) Authorities

  • Review of the FBI’s Sentinel IT Project

  • Follow-Up Review of the FBI’s Response to Recommendations Made in the Robert Hanssen Review

  • Follow-Up Review of the FBI’s Control Over Weapons and Laptop Computers

  • The U.S. Marshals Service’s (USMS) Justice Prisoner and Alien Transportation System

  • DEA Controls Over Cash Seizures

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