this, this is our pledge. i thank you for inviting me to discuss these important issues with you today. thank you so much. [ applause ] >> attorney general eric holder from earlier this week at northwestern university law school. we'll hear more from the attorney general next on c-span3. he will be on capitol hill this morning to testify about the justice department's 2013 budget. the obama administration has requested a discretionary spending request for $27 billion. that's a slight decrease over the current year. scheduled to testify for three hours this morning, barbara mikulski coming into the room, senator from maryland is the chairman of the subcommittee that deals with justice that. is the commerce justice science subcommittee for appropriations. live coverage on c-span and the ranking republican kay bailey hutchison of texas.

good morning everyone. good morning everybody t. commerce justice appropriations subcommittee will come to order.

this morning we -- this morning we welcome the attorney general of the united states, and as is the usual and customary way, senator hutch i son and i will make opening statements. we'll go to you, mr. attorney general, for yours, and you may summarize with unanimous consent that all statements be included in the record. senator shelby, our colleague and former ranking member on this subcommittee has a banking hearing with senator hutch i son's concurrence, we'll go right to senator shelby for the first question. does that sound okay? we'll observe senators in their order of arrival. we expect robust participation. we're going to strictly adhere to the five-minute rule. so having laid the groundwork, i

just want to say good morning and welcome to our first cjs subcommittee hearing. the attorney general of the united states, in which we will hear his presentation on the department of justice budget. we have a very positive relationship with the attorney general. he's brought to the justice department the experience of a career prosecutor. he's been dedicated to fighting violent crime and terrorism. he knows he is pioneering work, now working with our administration on how to deal with the new and emerging threat of cyber security which is how do we protect our citizens. his views and recommendations on protecting our civil liberties. well, mr. attorney general, before we get into the numbers about the money, i would just like to thank you and in thanking you, want to thank all the hard working men and women

who do work at the department of justice. there are 119,000 employees who work there, 25,000 are federal agents and people work at fbi, dea, the u.s. marshals, the alcohol and firearms. we have 20,000 prison guards and correctional staff and 10,000 prosecutors and investigators. they've done some amazing accomplishments which i'll talk about in -- when i get to my question period. but we want to thank them because every day in every way they stand sent ri, either to do prevention and intervention, to make sure they're out on the street doing traditional violent crime work, to really being all over the world. and fighting issues related to white collar crime. as the chair of the cjs subcommittee, i have three priorities when examining the budget, community security, how

does the budget support the mission of keeping our communities safe; national security, what resources are needed to keep america safe; and oversight and accountability, no boondoggles on the watch of this subcommittee. and i want to make sure the justice department has what it needs to do its mission. there's only -- as i looked at the president's budget, i saw noted that there was only one new initiative, and that's the expansion of mortgage and financial fraud. that request is $611 million. it's a modest $5 million targeted increase. we're going to want to hear more about that because we in our own state of maryland have seen such a rising number of scams and schemes and predator left-handing practices, and we need to know kind of what you want to do with the money. we can't have a strong economically vibrant community

unless they're safe, whether it's in our neighborhoods, where it's protecting small business on main street. so i want to know how the budget will keep america safe at home on main street. the request for $2 billion for grants to state and local law enforcement, i wonder if it's sufficient. this is $32 million below the 2012. we would have to consider reorganizing priorities. the state and local funding seems to have born the brunt of budget cuts. since 2010, grants have been cut by a billion dollars in local funding. now, part of this was the ax and acts of the congress itself. many of my colleagues don't realize that cuts have consequences in discretionary spending oopsz. we need to hear your view on what we can do. we know the gao has recommended

that you should conduct a review and eliminate unnecessary duplication. we support that. we also want to look in community security at the protecting of our children. one of the areas of bipartisan support is in the money to catch predators who use the internet to talk children, break up children's pornography rings and track down and arrest these child molesters. yes understand you're requesting $328 million. we'll look forward to seeing how you will allocate that and what to do. the southwest border, my colleague, senator hutch i son has worked assiduously in that area. i want to know that this is not only a bipartisan support, we think it ought to be nonpartisan to support our border. i'll let her raise those questions in there. in the area of cyber threats, our nation faces a growing and

pervasive threat overseas from hacker, cyber spies and cyber terrorists. we need safe and resilient networks. we worry about online banking and commerce, the safety of power grids, air traffic control systems, digitized records. yesterday the congress held, with the administration -- the senate held a cyber exercise. the majority of the senators were there to listen to an exercise on an attack on a major city's power grid. it was chilling. it was terrifying to know what happened there and what we could do to protect it. so we need to know about cyber. finally i want to know how the justice department is improving its accountability to taxpayers. you know you've gotten a bad rap, some of them about lavish banquets, cost overruns, the ig doing its audits and we should. we want to know how we stand sentry over the money we do spend. we have very specific questions.

with the number of people here, i'm shortening my statement. i'll turn now to senator hutchison and then to you. >> well, thank you, madam chairman, very much, not only for the deference on border security where i live, but also on the way you run this committee which is for us to do what's right for america. mr. attorney general, i do want to address some of the areas of border security. first of all, scap funding is something that continues to be short changed by your budgets. skap, of course, is the reimbursement for local law -- counties that incarcerate illegal alien prisoners. along the border, our counties are generally very poor and don't have those kinds of

resources. each year you continue to not fund. we did put the money back in last year, $240 million. i would hope you would support increasing that as we go through this process because we must incarcerate these illegal alien criminals who are mostly in the drug cartel operations so this will not be borne by the counties on the border. in response to operatias, langu included in last year's bill that would prohibit federal law enforcement agencies from selling operable weapons to cartels. this request that you're giving us removes that language, saying it's unnecessary. mr. attorney general, we want to make positively sure that what happened does not happen again.

i would hope that you would support our insertion of that language again. last year, our commerce justice state bill provided $10 million to expand the capacity at the overcrowded el paso intelligence center. and this is critical for our southwest border information sharing and has the potential to become the border's focal point to help stop the flow of narcotics, combat illegal immigration and end human trafficking and firearms smuggling. it is imperative that this el paso intelligence center and the dea take full advantage of the resources available from the department of justice agencies, the fbi, the u.s. marshals and the atf, and i hope that you can give us an update on the status of this funding and the project. there have been reports that cartels across the border are

attempting to recruit college students to smuggle drugs into the country, and it says that minors are more appealing because criminal penalties are lighter for them. one of the good parts of your budget request is $312 million for juvenile justice prevention programs, and i will be interested in hearing if you think -- if you're aware of these border threats to our youth and if some of that money that you are requesting could be put on the border to try to make sure that we try to help our youth over come the cartel overtures. in addition, there is a requested cut of 1.5% from state and local law enforcement grants which are very important grants, again, to these local counties and the local law enforcement agencies along the border that

have such a burden with the trafficking that is coming across the border. i would hope that you would help us restore that funding. the valor program, the violence against law enforcement and ensuring officer resilience and survivability is one that i applaud your efforts to put in place and unfortunately, the number of federal, state and local officers who died in the line of duty in america last year increased from 153 to 173. the feedback from the training and research being conducted through valor is very positive, including the alert center at texas state university which was credited by the two officers who came into ft. hood when major nadal hasan started shooting

unarmed military people. both of those officers survived even though sergeant munley was shot several times. but they both credited their swift response that day to the alert active shooter training program that they had received. so that's something that's very good that i applaud in your budget. i want to state a concern that i have about the u.s. national parks service pushing for construction which is in progress on an unmanned border crossing at the big bend national park in south texas. this is not a department of justice decision, but it is going to affect some of the personnel, and i'm concerned that this is an area where illegal immigrants can walk

across. the water is knee deep and you can walk right across the river and into big bend. and having an unmanned border crossing i think is insufficient. so we're going to talk about that at some point to see if we can get fbi, dea, atf, border patrol, somebody to man a place like that where it is so vulnerable. last but not least, general holder, i'm going to ask you some questions about your public integrity unit. i'm going to give you full credit for dismissing the case against senator ted stephens when you learned of the corruption within that division of your department. i'm going to ask you questions because the report will be public within days, and if there

is anything that you should take as your major responsibility, it is that the public corruption unit and the department of justice is fair and even-handed and clearly that was not the case in the prosecution of a great friend to many of us and a great patriot for our country who unfortunately was very badly abused by the department of did dismiss the case when you learned of the misbehavior, and i gave you credit on the senate floor for doing that and will again. but i do want to ask you about the report when we have time to ask questions. thank you. >> mr. attorney general. >> thank you. chairwoman mikulski, ranking member hutchison, other distinguished members of the subcommittee, i thank you for

the opportunity to appear before you today and for your continued support of the justice department's critical work. i look forward to discussing the president's fiscal year 2013 budget for the department and how these vents would be used to build on what i think is our extraordinary record of success. now, the president's budget proposal demonstrates a clear commitment to advancing the department's core missions an augments our about to fulfill our most important obligation. that's to protecting the american people. despite the significant fiscal constraints, the federal government has faced in recent years, the 116,000 dedicated employees who serve in the department offices around world have made significant and historic progress in protecting our citizens from a range of threats that often disproportionately threaten the most vulnerable members of our society. we've proven our commitment to acting aah as stewards of precious taxpayer dollars. as you can see in the budget

request, proposed spending increases have been exceeded by proposed cuts. as a result of numerous steps taken to streamline operations, almost $700 million worth of savings have been developed and reinvested in critical mission areas. i believe that the department is perhaps more efficient and more ef fkive than ever before. our recent achievements underscore this point, especially when you consider our national security efforts. by continuing to work collaboratively alongside u.s. and international partners, we have identified and disrupted numerous alleged terrorist plots including one by two iranian nationals to assassinate the saudi ambassador to united states. we have thwarted multiple plots deviced by home grown extremists and secured convictions and robust sentences by dangerous terrorists. in october the department received a guilty plea.

last month abdulmutallab was sentenced to four life terms in november. in november we secured the conviction of victor boot, a notorious arms dealer who sold millions in weapons for use in killing americans. and in december al want pleaded guilty to 23 charges including conspiracy to -- transfer, pos sells and e port explosive devices against u.s. troops in iraq. the list goes on and on. with the sustained and increased investments included in the president's budget for the comprehensive national cyber security initiative, the high value detainee interrogation group, the joint terrorism task forces, the render safe program and other key efforts, the department will be able to strengthen our critical surveillance and intelligence gathering capabilities. it will also allow us to bring our fight against financial fraud to a new level.

on monday, as many of you know, president obama issued a proclamation to mark the beginning of this year's consumer fraud protection week. i'm proud to note that the justice department's consumer in defending the interests of protection branch has established a record of success american consumers that is worth celebrating and will be expanded upon. in 2011 alone, our consumer protection branch obtained a 95% conviction rate, recovered more than $900 in criminal and civilitis fines, restitution and penalties and obtained sentencetion totaling more than 125 years imprisonment against more than 30 individuals. this represents remarkable and unprecedented progress. it really is only the beginning. in fact, since the start of the administration the justice department has signaled an unwavering commitment to combating and preventing a wide range of financial and health care fraud crimes. we've taken bold steps to address the causes and consequences of the recent economic crisis. through the efforts of the president's financial fraud

enforcement task force which was launched in 2009 and which i'm proud to chair, charges have been brought against numerous ceos, cfos, corporate owners, board members, presidents, general counsels and other executives of wall street firms, hedge funds and banks who have engaged in fraudulent activity. in recent months we have obtained prison sentences up to 60 years in a variety of fraud cases including multi-million dollar ponzi schemes and the largest hedge fund insider trading case in u.s. history. just this week we secured a conviction against the former boorpd of directors chairman for an international bank for orchestrating a $7 billion investment fraud scheme. the task force established two new working groups, the consumer protection working group which will enhance shifl and criminal enforcement of consumer fraud and the residential mortgage backed securities working group which will bring federal and state partners together to investigate and prosecute abuses in our housing markets. both will help to amplify

existing efforts and to foster cooperation and collaboration in the department's response to these problems. just a few weeks ago, a similar collaborative approach led the departments of justice and housing and urban development, as well as other agencies and 49 state attorneys general to achieve a landmark $25 billion settlement with the nation's top five mortgage servicers, the largest joint federal state settlement in our nation's history. although this will not on its own cure all that ails our housing market, this agreement builds on the record fair lending settlement obtained last year and will provide substantial relief to homeowners. it also provides a blueprint for future collaboration across levels of government, state borders and party lines. but there is perhaps no better illustration of our recent progress than the department's groundbreaking work to combat health care fraud. over the last fiscal year alone in cooperation with the department of health and human

services as well as other partners, by utilizing authorities provided under the false claims act and other essential statutes, we were able to recover nearly $4.1 billion in funds that were stolen or taken improperly from federal health care programs. that is the highest amount ever recorded in a single year. over the same period we opened more than 1100 new criminal health care fraud investigations, secured more than 700 convictions and initiated nearly 1,000 new civil health care fraud investigations. and form every dollar that we have spent combating health care fraud, we have returned on average about $7.00 to the united states treasury, the pled care trust fund and others. these numbers are stunning, but my colleagues and i recognize that we cannot be satisfied, and this is no time to become complacent. that's why in addition to helping us build on this record of success, the president's budget request also would bolster our fight against drug trafficking, international crime networks, gangs and cyber

criminals, it would increase our efforts to protect the law enforcement officers who cape us safe and expand upon the work being done by our civil rights division to guarantee the rights of all americans are pro teshlthed in border areas, workplaces, housing markets and voting booths. i am committed to building on these and our other many achievements. i know you understand in this time of uncommon threats and complex challenges, we simply cannot afford to cut back on the amount and the quality of justice that we are obligated to deliver. the department must remain vigilant in protecting this nation and in enforcing the law. these efforts must be appropriately and adequately funded. i look forward to continuing to work wite subcommittee and your colleagues throughout congress to accomplish this. i would be happy to answer any questions that you might have. >> thank you, mr. attorney general. your full statement will be entered into the record. as a matter of senatorial court

seerks we'll turn to senator shelby who has a banking committee that he must join. i'll pick up followed by senator hutchison. we will recognize then members in order of arrival and follow the five-minute rule. senator shelby? >> thank you, madam chairman. good morning, mr. attorney general. >> good morning. >> two key department of justice facilities will soon be operating on red stone arsenal, the fbi's terrorist explosive device analytical center or tdac, and the aff's national center known as ncedar, these two national assets will help law enforcement officials deal with the growing threat posed by terrorists in criminal use of powerful explosives. you and i have discussed these facilities previously. i believe you agreed then with me that the missions of n cedar and tdac are distinct but

complimentary and that it made sense to co-locate them at red stone where there's a lot of property, a lot of land. for the benefit of the committee, mr. attorney general, can you describe how the department. of justice will utilize n cedar and tdac. >> -- run chiefly by the fbi deals with the examination of ieds we see coming out of afghan stand and other places. n cedar in contrast run by the atf deals with -- i wouldn't want to call them the more common. >> more prevalent maybe. >> more prevalent explosive devices. the location of them in that place i think makes a whole lot of sglens could you describe the value of co-locating these

facilities on a large federal arsenal with lots of range of space? >> there's a great deal of cross pollenation, the ability to talk to one other. the purpose is distinct. there will be scientific breakthroughs, perhaps, that you connection change information by having people who are relatively close by. i think that having the two agencies that are primarily responsible for explosives determination and prevention and having them close by even though they have distinct roles, they have been pretty well delineated. it's good to have them tlp and talking to one another. >> also, you're aware of this, that the community there near red stone has one of the highest per capita phd communities in science and engineering? >> yes, a lot of smart people there, that's true. >> you plan to utilize that? >> we'll use smart people wherever we can find them. there are a lot there. that is fair.

>> [ inaudible ] -- and pay for it, i guess. attorney general holder, the justice department is seeking funds this year to activate a new women's prison in alabama. this prison was designated as a female only facility based on input from your department. it costs nearly a quarter of a billion to build. does the department plan to activate this soon? i know you've got a lot in it. your u.s. bureau of prisons said that was one of their top priorities. >> we want to activate it. it was specially designed to deal with the unique needs that female prisoners have. we have the needed -- we have a -- we need to expand our capacity to handle female prisoners in the federal system. given the fact that the facility was specially configured for

female prisoners, it would be our hope to activate it as quickly as with can and for the use for which it was designated. >> you've got a lot in it. it's finished, and i hope you would do that soon because to activate it, it costs hardly anything compared to what it costs to build. >> i don't disagree. the need is clearly there for the expanding population unfortunately that we see in the federal prison system. >> a priority for you in that yar? >> we want to bring online as many of these facilities as we can. this is one that as i understand it is extremely close -- just about ready to open soon. >> madam chairman, thank you very much for taking me out of order. i appreciate it very much. >> mr. attorney general, i have two questions. they actually -- i have many. but we'll submit them for the re.