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

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

• The FBI’s Use of National Security Letters and Section 215 Authorities. The Patriot Reauthorization Act directed the OIG to review the FBI’s use of national security letters (NSL) and Section 215 orders to obtain business records. Our review of NSLs from 2003 through 2005 found that the FBI’s use of NSL authorities has increased dramatically since the enactment of the USA PATRIOT Act (Patriot Act) in October 2001. We also found that the Department’s reports to Congress on NSL usage significantly understated the total number of NSL requests. The OIG review found serious and widespread misuse of NSL authorities, such as issuing NSLs without proper authorization, making improper requests under the statutes cited in the NSLs, and conducting unauthorized collection of telephone or Internet e-mail transactional records. In addition, the OIG review identified more than 700 instances in which the FBI improperly obtained telephone toll billing records and subscriber information by issuing “exigent letters” rather than by issuing NSLs. The OIG made 10 recommendations to the FBI related to its use of NSLs. The FBI concurred with our recommendations and agreed to implement corrective actions.

  With respect to the FBI’s use of Section 215 authorities, our review did not identify any instances involving improper or illegal use in connection with “pure” Section 215 orders. We also found that the FBI did not obtain Section 215 orders for any library records during the time period covered by our review. However, the OIG found significant delays within the FBI and the Department in processing requests for Section 215 orders, and that the FBI had not used Section 215 orders as effectively as it could have because of legal, bureaucratic, or other impediments to obtaining these orders.

• Development of the Department’s Integrated Wireless Network. The OIG audited the progress of the Integrated Wireless Network (IWN), an approximately $5 billion joint project between the Department and the Departments of Homeland Security (DHS) and Treasury that is intended to address federal law enforcement requirements to communicate across agencies, allow interoperability with state and local law enforcement partners, and meet mandates to use federal radio frequency spectrum more efficiently. The OIG review concluded that the IWN project is at high risk of failure, and the partnership between the Department and the DHS is fractured. As a result, despite over 6 years of development and more than $195 million in funding, the IWN project does not appear to be on the path to providing the seamless interoperable communications system that was envisioned. The causes for the high risk of project failure include uncertain and disparate funding mechanisms for IWN, the fractured IWN partnership, and the lack of an effective governing structure for the project.

• The FBI’s Control Over Weapons and Laptop Computers. The OIG issued a follow-up audit of the FBI’s efforts to improve controls over its weapons and laptop computers. Since our initial report in 2002, we found that the FBI has made progress in decreasing the rate of loss for its weapons and laptops. However, we determined that at least 10 of the 160 laptops reported missing or stolen during the 44-month review period covered by this audit contained sensitive or classified information, and the FBI could not determine whether 51 additional lost or stolen laptops contained sensitive or classified information. Although the FBI has improved its controls since our previous audit by establishing deadlines for reporting lost and stolen weapons and laptops, entering those losses into the National Crime Information Center, and referring the losses for investigation, FBI personnel have not consistently followed these procedures. We made 13 recommendations to the FBI to improve its management controls over weapons and laptops. In response, the FBI has outlined a plan for taking corrective action to address all of our recommendations.

• The Department’s Internal Controls Over Terrorism Reporting. Several components, including the FBI, Criminal Division, and Executive Office for U.S. Attorneys (EOUSA), collect terrorism-related statistics to help measure the Department’s counterterrorism efforts. The OIG audited the accuracy of 26 terrorism-related statistics issued by these 3 Department components and found that all but 2 of the 26 statistics were inaccurate. Some were overstated and some were understated. We also found that he Department’s collection and reporting of these statistics was decentralized and haphazard. T he OIG made six recommendations to help improve the accuracy of these statistics. The FBI agreed with all of our recommendations, the Criminal Division agreed with all but one of our recommendations, and EOUSA disagreed with our recommendations.

• Critical Incident Response Plans. The OIG issued a follow-up report to our 2003 review of U.S. Attorneys’ Offices (USAO) Critical Incident Response Plans, which are used to ensure that USAOs are ready to respond to major incidents such as acts of terrorism, hostage situations, and natural disasters. Our follow-up review found that the Department, in response to the recommendations in our 2003 audit, has taken important steps to improve USAOs’ preparedness to respond in an emergency. However, many USAOs have regressed in their required Critical Incident Response Plan activities. We made seven recommendations to help the Department continue to improve USAOs’ ability to respond quickly and appropriately to critical incidents. The Department concurred with all of our recommendations.

• The DEA’s Handling of Cash Seizures. The OIG audited the DEA’s handling of cash that it seizes during its investigations. We found that the DEA failed to consistently follow or document compliance with its policies for handling and safeguarding seized cash. The OIG made seven recommendations to improve the DEA’s handling of seized cash, and the DEA agreed with all but one of our recommendations.

• The Department’s Grant Closeout Process. The OIG audited the process used by the Department to close out the billions of dollars in grants that it distributes annually to state, local, and tribal governments and other organizations. We found that timely grant closeout continues to be a significant problem within the Department. Only 13 percent of the 60,933 grants in our sample were closed within 6 months after the grant end date, as required by Office of Justice Programs (OJP) and Office on Violence Against Women (OVW) policy. We also identified a backlog of over 12,000 expired grants more than 6 months past the grant end date that had not been closed, of which 67 percent had been expired for more than 2 years. We made 44 recommendations to improve the grant closeout process, and the Department components agreed with the majority of our recommendations.

• Development of the FBI’s Sentinel Case Management System. The OIG’s second report auditing the FBI’s ongoing development of its Sentinel information technology (IT) project found that the FBI has made significant progress in addressing several important areas reported in our first audit of Sentinel. However, we identified several issues that we believe the FBI should continue to address as the Sentinel project moves through its first phase of development and enters its more challenging and higher-risk second phase in early 2007. Although we found that the FBI has taken a positive step by establishing a risk management plan that identifies the significant risks associated with the Sentinel project, we also determined that contingency plans, and the triggers for activating such plans, exist for only 3 of the 20 identified risks being monitored. The FBI agreed with our recommendations.

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 semiannual report include:

• Sentencing has been imposed on five of the six Federal Bureau of Prisons (BOP) correctional officers who were charged with conspiracy to sexually abuse female inmates and introduction of contraband into the BOP facility. This is the case in which OIG Special Agent William “Buddy” Sentner III was shot and killed on June 21, 2006, when the correctional officers were being arrested. The first of the two correctional officers who pled guilty received 12 months’ incarceration followed by 3 years’ supervised release, and the second received probation. Two other correctional officers were convicted at trial on charges of bribery and witness tampering and were sentenced to 12 months’ incarceration and 3 years’ supervised release and fined $6,000 and $3,000, respectively. The fifth correctional officer pled guilty to conspiracy charges and was sentenced to 36 months’ probation and 12 months’ home confinement. The sixth correctional officer was killed in the exchange of gunfire that he initiated.

• The former mayor of Fairbanks, Alaska, and his wife were arrested pursuant to a 92-count indictment charging them with theft of $450,000 in federal grant funds, conspiracy, and money laundering. A joint investigation in which the OIG participated concluded that they misappropriated federal grant funds designated to operate a non-profit organization by using them for personal reasons, including to partially fund the building of their church.

• An FBI special agent was terminated from his position after an OIG investigation determined that he provided unauthorized disclosure of a document classified “Secret” and divulged the existence of an FBI search warrant prior to its execution to a female journalism student with whom he had a 2-year extramarital relationship.

• A BOP correctional officer assigned to the U.S. Penitentiary in Atwater, California, was sentenced to 37 months’ incarceration and 36 months’ supervised release pursuant to his guilty plea to a charge of possession of heroin with intent to distribute. During an undercover operation with OIG and DEA investigators, the correctional officer accepted 5 ounces of black tar heroin and a $5,000 bribe to smuggle the heroin into the penitentiary.

• A DEA contracting officer was arrested and charged with corruptly profiting from his employment as a federal agent and making a false statement after a joint OIG and DEA Office of Professional Responsibility investigation developed evidence that he personally received $13,442 from a DEA vendor whose contract he managed.

• An OIG investigation led to the arrest and guilty plea by a recipient of a Department grant for theft of government program funds. The investigation found that the comptroller for the American Prosecutors Research Institute embezzled $76,464 in OJP grant funds.

Ongoing Reviews

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

• Review of the Department’s involvement with the NSA program known as the “terrorist surveillance program” or “warrantless surveillance program”

• FBI reports relating to alleged abuse of military detainees at Guantanamo and other facilities

• Coordination of violent crime task forces in the Department

• The Department’s removal of U.S. Attorneys

• Follow-up reviews of the FBI’s use of national security letters and Section 215 orders

• Follow-up review on the FBI’s response to recommendations made in the Robert Hanssen review

• Follow-up review of the Terrorist Screening Center

• The FBI’s efforts to combat crimes against children

• The FBI’s progress in hiring, training, and retaining intelligence analysts

• Follow-up review of the U.S. Marshals Service’s (USMS) efforts to provide judicial security