acts of the congress itself. many of my colleagues don't realize that cuts have consequences in discretionary spending. 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. we 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 hutchison has worked acidulously 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 our 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 if should 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 >> 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, scaap funding is something that continues to be short changed by your budgets. scaap, of course, is the

reimbursement for local law -- counties that incarcerate illegal alien prisoners. 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 h 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. and furious, language was 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 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 sure that we try to help our youth overcome the cartel overtours. in addition, there is a

requescu 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 sucbu trafficking that is coming across the border. i would hope that you would help us restore that funding. the v.a.l.o.r. 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 through v.a.l.o.r. is very positive, including the alert

center at texas state university which was credited by the two 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 thhi 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 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 stevens when within that division of your department. i'm going to ask you questions because the report will be public within days, and if there as your major responsibility, i 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 justice. but i will say you 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 todad department's critical work. i look forward to discussing the president's fiscal year 2013 bu 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. 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 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 effective 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, possessions and export 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 protection branch has established a record of success in defending the interests of 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 civil fines, restitution and penalties and obtained sentences totaling more than 125 years imprisonment against more than 30 individuals. this represents remarkable and unprecedented progress. it really is only the beginning.

administration the justice department has signaled an range of financial and health care fraud crimes. we've taken bold steps to 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, hefu 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 trading case in u.s. history. just this week we secured a conviction against the former board of directors chairman for an international bank for orchestrating a $7 billion investment fraud scheme.

the task force established two new working groups, the consum protection working group which will enhance civil 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 ace 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 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 health care fraud investigations. and for every dollar that we have spent combating health care flawed, we have returned about $7 to the united states treasury, the medicare 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 ough trafficking, international crime criminals, it would increase our efforts to protect the law enforcement officers who keep us safe and expand upon the work being done by our civil rights division to guarantee the rights of all americans are protected 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 with the members of this

subcommittee and your colleagues ths.ho i would be happy to answer any questions that you might have. >> thank you, mr. attorney your full statement will be entered into the record. as a matter of senatorial courtesy, we'll turn to senator shelby who has a banking committee that he must join. i'll pick up followed by senator 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 tedac, and the a ncetar's national center known as ncetar, 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 ncetar and tedac 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 ncetar and tedac. >> -- run chiefly by the fbi deals with the examination of ieds we see coming out of afghanistan and other places. ncetar 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. and i think that you're right, they you're right. they have fundamentally different responsibilities, but they compliment one another. and the location of them in that place i think makes a great deal of sense. could you describe the value of co-locating these facilities on a large federal arsenal with lots of range of space? >> yeah. >> there's a great deal of cross pollenation, the ability to talk to one other. although the purposes are distinct, there are certainly going to be scientific things, breakthroughs perhaps that you can exchange 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 there 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. >> well, let's question, people make mistakes and pay for it, i guess. ing funds this year to activate a new women's prison in alabama. this prison was designated as a le input from your department. it costs nearly a quarter of a billion to finish. does the department plan to activate this soon? r toow you've got a lot in it. 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 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 ti anything compared to what it costs to build. at. the need is clearly there for the expanding population unfortunately that we see in the federal prison system. >> be a priority for you in that area? >> we want to bring li 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 record. first of all, federal prisons. as i look at the department's e justice department money is going in to federal prisons. that amount is now at $6 billion, and it isid approaching almost what the fbi budget is which is $8 billion. now, my question is, what's if people are incarcerated -- guys and gals off the street. so we want you to prosecute and who constitute a danger to our country or to our communities.

we -- i don't know if we can sustain this growth. and then i'm concerned about once we put them in, it's a we expanding their prisons with the same people. they keep coming back. department's needs, but is there any recommendations you'd have to begin to contain the prison population? are we federalizing too many crimes? is recidivism the problem? again, safe streets, but this is really an ever-increasing part of our appropriations. i think variety of reasons why we see the prison population expanding. we now have about 215,000 or so people in the federal system. that number goes up every year. it is for that reason that we committee asking for additional funds for b.o.p.

i think there are a variety of reasons you see people coming into the system. we state and local counterparts and try to help them to the extent and so some cases that violate both federal law and state law, and if they have very serious criminals, we bring into federal system if there are evidentiary rules or more harsh sentences that we can give to them. but i think the point that you hit on is something that we really need to focus on is how can we rehabilitate people so that we cut down on recidivism rates. one of the things we talked about is the second chance act, coming up with ways in which we make available to people reentry possibilities so that they have the chance of not being recidivists, coming up with educational, vocational, drug treatment programs while we have them in prison. we've actually seen i think pretty good success being done by some state systems that has been shared with me by the pew research foundation. i think we can learn a lot from them in that regard.

>> mr. attorney general, we would really look forward to specific recommendations where again we want our local and federal law enforcement to prosecute and get bad people off the street, whether they're terrorists or whether they're terrorizing a neighborhood like some of the drug dealers in some of my own communities in maryland. at the same time we don't want our federal prisons to be an incubator for more crime, where the lessons they learn when they go to prison is not to commit crimes again, but how to be better crooks. we want our prisons to teach them how to be better citizens and then to come back to a community support system where behavior that got them. so i'm concerned that our federal prisons are such that we really nnd

evaluate and learn some of these lessons. so we want to work with you. i know we feel that way. you're very experienced in street crime which takes me to the other. ultimately while you've done this fantastic job of fighting terrorism, keeping america safe, it's been stunning what our national security services have accomplished, both military and civilian. but you know, again, i'll come back to streets and neighborhoods. we have communities that faced crime every single day and when enforcement, our local prosecutors' offices and so on, they feel they're under the gun. they need burn grants, cops on the beat and so on. do you feel that this is sufficient funding? because in the last couple of billion that went into state and local grants due to acts of congress and so on.

now we're down to $2 billion. yet everywhere i go in maryland from our local police commissioners to local district attorneys or state's attorneys as they're called in my state, people say we need those justice department grants. they either give us better technology, they give us tools to deal with violence against women. they express gratitude for the lethal index. they need you. they love having you as a partner. do we have enough money in the right places to do the job to protect our communities? >> we have, in the budget request, $2.04 billion for state and local assistance programs, $1.4 billion for office of justice programs, about $290 million for cops million for the office on violence against women.-- ts isl equal to the level we requested

last year. it is lower than the numbers you had said. but i think that given the bu the amount that we have requested is strong on law enforcement. it's strong for science, strong for victims. would i like to m but the reality, the budget realities that we confront and the needs to stay within a budget in the executive branch i think have gotten us to this point. but i think that through the pr technical assistance that we can also provide to our state and local partners, we can i think do the job. i met with the association of attorneys general just this week. i think the partnership we have is an unprecedented one. and i think the combination of that partnership, the sensitivity i think we have to their needs and the $2 billion we're seeking here will allow us to be good partners. >> we have many questions. i'm going to turn to senator