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.
October 1, 2007 – March 31, 2008
| Allegations Received by the Investigations Division |
4,630 |
| Investigations Opened | 180 |
| Investigations Closed | 161 |
| Arrests | 56 |
| Indictments/Informations | 53 |
| Convictions/Pleas | 69 |
| Administrative Actions | 108 |
| Fines/Restitutions/Recoveries | $4.7 million |
| Audit Reports Issued | 137 |
| Questioned Costs | $20.8 million |
| Funds Put to Better Use | $174,000 |
| Recommendations for Management Improvements |
322 |
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 OIG issued two follow-up reports in March 2008 evaluating the FBI’s use of national security letters (NSL) and Section 215 orders for business records. The NSL report found that the FBI and the Department have made significant progress implementing recommendations in the OIG’s first report on NSLs issued the previous year and adopting corrective actions to address the serious problems we identified. We also found that the FBI has devoted substantial time, energy, and resources ensuring that its field managers and agents understood the seriousness of the FBI’s shortcomings in its use of NSLs and their responsibility for correcting these deficiencies. With respect to the FBI’s use of NSLs, we found a continued upward trend, with more than 49,000 NSL requests issued in 2006. On average, approximately one-third of all counterterrorism, counterintelligence, and cyber investigations that were open at any time during 2006 employed NSLs. The percentage of NSL requests related to investigations of U.S. persons also continued to increase. We also identified NSL-related deficiencies and possible intelligence violations in 2006 similar to the findings in our first report. In our report, we made 17 recommendations to help improve the FBI’s use and oversight of NSLs. The FBI agreed with the recommendations and said it would implement additional actions to address our findings.
The Department’s Terrorist Watchlist Nomination Processes. The OIG examined the Department’s processes for nominating known or suspected terrorists to the consolidated terrorist watchlist. We found that while the FBI has developed a formal policy for nominations to the watchlist, no standard nominations policy exists for other Department components that are involved in watchlisting. We also found that FBI case agents did not always update watchlist records when new information became known, and the FBI did not always remove watchlist records when appropriate. Moreover, watchlist nomination submissions from FBI field offices often were incomplete or contained inaccuracies, which caused delays in the nominations process. We made seven recommendations regarding nominations to the consolidated terrorist watchlist and the sharing of terrorism-related information. The components agreed with the recommendations and agreed to implement corrective actions.
The DEA’s Controls over Weapons and Laptop Computers. The OIG conducted a follow-up review examining whether the DEA has addressed weaknesses in its controls over its weapons and laptop computers identified in a 2002 OIG review. We determined that the DEA’s rate of loss for weapons has increased since our 2002 review, while the rate of loss for laptops has declined. However, we found that the DEA could not determine what information was on its lost or stolen laptop computers, and the DEA was unable to provide assurance that lost or stolen laptop computers did not contain sensitive or personally identifiable information. We also found that many lost or stolen laptops were not protected by encryption software. In addition, DEA employees were not internally reporting lost or stolen weapons and laptops in a timely manner, and the DEA was not informing the Department of weapon and laptop losses or ensuring that relevant information about lost weapons and laptops was entered in the National Crime Information Center database. We made seven recommendations to improve the DEA’s controls over weapons and laptops. The DEA agreed with six of the seven recommendations.
The Department’s Victim Notification System. This OIG review examined the Department’s Victim Notification System (VNS), an automated system operated by the Executive Office for U.S. Attorneys (EOUSA) that notifies federal crime victims regarding developments in their cases. As part of the review, the OIG surveyed active and inactive crime victims about their use of the VNS. Survey respondents generally reported that they were satisfied with VNS services. However, some reported that they had not heard of the VNS prior to receiving the OIG survey, had never received a notification from the VNS, or were not even aware that they were registered as crime victims in the VNS. In addition, our audit found insufficient internal controls to ensure the accuracy and completeness of data in the VNS. We also identified deficiencies in the security of VNS information, most notably that sensitive crime victim information contained within the VNS was not adequately protected. The OIG made 19 recommendations to help improve management of the VNS. EOUSA concurred with our recommendations and has outlined a plan to address them.
The FBI’s Management of Confidential Case Funds and Telecommunication Costs. This OIG audit examined the FBI’s management of confidential case funds that support its undercover activities. The audit found that the FBI lacked an adequate financial system necessary to manage confidential case funds effectively. As a result, FBI employees developed various “work-arounds” to the system in an effort to track confidential case fund requests made by FBI special agents working in undercover capacities. However, t he volume of undercover telephone bills, coupled with the inconsistent way various FBI field offices handled confidential case funds, resulted in the FBI routinely paying covert telecommunication costs late. These late payments sometimes resulted in telecommunication carriers terminating FBI surveillance delivery lines for non-payment. We also found that nearly half of the sampled employees who had daily access to confidential case funds had financial histories that indicated personal monetary problems. We recommended that the FBI improve its processing and tracking of confidential case funds, how it tracks and pays undercover telecommunication expenses, and its oversight of confidential case fund management. The FBI agreed with the recommendations and has begun to implement them.
The BOP’s Efforts to Manage Inmate Health Care Costs. This OIG review examined the $4.7 billion that the BOP spent on healthcare for inmates from fiscal years (FY) 2000 through 2007. The OIG found that the BOP has kept the growth of inmate health care costs over the past 7 years at a reasonable level compared to national health care cost data by implementing effective and efficient cost containment strategies. However, we found that BOP institutions did not always provide recommended preventive medical services to inmates and did not consistently provide inmates with the medical services recommended by BOP guidelines. In addition, the BOP allowed some health care providers to practice medicine without valid authorizations, and methods to accumulate and report health-related performance measures were inconsistent. We made 11 recommendations to help the BOP improve its provision of health care to inmates, and the BOP agreed with the recommendations.
With respect to the FBI’s use of Section 215 authorities, we found that FBI agents encountered similar processing delays for Section 215 applications in 2006 as those identified in our previous report. Our review did not identify any illegal use of Section 215 orders in 2006, but we found two instances where the FBI received more information than it requested. We also reported on a case in which the Foreign Intelligence Surveillance Act Court twice refused to authorize a Section 215 order based on concerns that the investigation was premised on protected First Amendment activity. The FBI subsequently issued NSLs to obtain information based on the same factual predicate and without further review to ensure the investigation did not violate the subject’s First Amendment rights. In addition, we found that the interim minimization procedures adopted in September 2006 to protect the constitutional rights of U.S. persons do not provide enough specific guidance.
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 or grantees who receive Department money. Examples of the OIG’s investigations discussed in this semiannual report include:
An OIG investigation led to the arrest and suspension of an FBI security specialist who was responsible for negotiating, reviewing, and making recommendations for the purchase of more than $1.9 million in shredders. Investigators determined that the specialist accepted a paid family vacation valued at over $7,500 from the company that was awarded the shredder contract.
An OIG investigation led to the arrest and resignation of an FBI financial manager who stole funds totaling $22,425 that were designated for undercover operations.
An investigation led to the conviction of the former Mayor of Fairbanks, Alaska, on charges of theft of government funds, conspiracy, money laundering, and submitting false tax returns, and the guilty plea of his wife on charges of money laundering and theft of federal funds. The investigation developed evidence that the Mayor and his wife used federal grant funds that were designated to operate a non-profit organization to purchase a flat screen television and other items for their personal use and to partially fund the building of their church.
A joint investigation determined that a BOP physician and physician’s assistant and three civilians established a medical clinic and fraudulently billed Medicare approximately $2 million for HIV infusion therapy treatment that was not actually provided to patients. The BOP physician was sentenced to 2 years’ incarceration while the BOP physician’s assistant was sentenced to 20 months’ incarceration. Two civilians were sentenced to 24 and 30 months’ incarceration, respectively. The four defendants also were ordered to pay more than $1.8 million in restitution. Sentencing is pending for the third civilian.
An investigation led to the arrest and guilty plea of a Department grantee who served as ombudsman for the Putnam County Sheriff’s Department in Indiana and stole $57,916 in grant funds and $30,914 in general funds belonging to the Sheriff’s Department. The grantee was sentenced to 18 months’ incarceration and ordered to pay restitution to the Department and the Putnam County Sheriff’s Department.
Ongoing Reviews
This report also describes ongoing OIG reviews of important issues throughout the Department, including:
The Department’s removal of U.S. attorneys and alleged politicization in the hiring of Department career employees
The FBI’s use of exigent letters to obtain telephone records
The FBI’s involvement in and observations of detainee interrogations at Guantanamo Bay and in Iraq and Afghanistan
The Department’s involvement with the National Security Agency’s Terrorist Surveillance Program
The FBI’s efforts to resolve terrorist threats and suspicious incidents
Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) controls over weapons, laptops, and other sensitive property
The FBI’s efforts to combat crimes against children
The Department’s major information technology (IT) vulnerabilities