what i would find very helpful is two things. one, if you look at your burn grants, cops on the beat and so on, what was the amount of money requested by state and local people to apply for those grants and what could you fund? my time is up. i'd like that for the record. the second thing is the gao report raises issues related to duplication of services. i would like to have your reaction to the gao report on how we can streamline, get more efficiencies. i think you're already on that road. let me turn to senator hutchison. >> thank you, madam chairman. mr. attorney general, we will have questions for the record, but i wanted to pursue this public integrity unit's misconduct against senator stevens. the court appointed council

after you moved to dismiss the case, the court appointed council to investigate the botched prosecution of senator stevens and found the prosecutors engaged in systematic concealment of evidence, but they were not guilty of criminal contempt. according to the summary that was put out in the public, the full report coming l, said that the court said despite findings of widespread and at times intentional misconduct, the special counsel, mr. schulke recommended against contempt charges because prosecutors did not disobey a clear and s required under law. judge sullivan said, upon review of docket and proceedings in the stevens case, mr. schulke concludes no such order existed in this case.

whether the court accepted the repeated representations of the subject prosecutors that they were familiar with their discovery obligations were complying with those obligations and were proceeding in good faith. my question to you is, does it concern you that the only reason these prosecutors escaped criminal charges is that the judge in the stevens case did on didn't file an order specifically telling the orders that they should follow the law? >> i think we have to take into account a variety of things. when i was made aware of the issues that led to the inquiry that judge sullivan ordered, i made sure -- i ordered that the case be dismissed. i also ordered an office of professional responsibility report be done as an internal justice department which has now been completed, it is now in its final stages of being worked through. >> will it be made public, mr. attorney general? >> i'm hoping we can. there are privacy interests that we have to deal with. but my hope is to get that

report -- as much of the report made public as we possibly can. it is an exhaustive study, it is hundreds of pages long. i think the people at opr have done a good job and there are recommendations with regard to sanctions that ought to be made. i'm hoping we will make that available. i'moing to request u do. >> okay. the report -- i'm not really at liberty to discuss the report that mr. schulke did. we have gotten a limited number of those reports in the justice department, 10 or 15. and we're under orders by the i've had a chance to review certainly the summary and in portions of it and some of the findings that are made there are disturbing. they were disturbing when i made the decision to dismiss the case. we have done a lot i think since that time to come up with ways in which we try to prevent those kinds of mistakes from happening again. we have an extensive training

program. we have hired somebody who is responsible as a coordinator to make sure that discovery in criminal cases and civil cases, that the justice department is involved in, so we don't fall back into those same kinds of errors. we have talked to -- i have spoken to members of the judiciary, all to make sure that involving senator stevens is not replicated. but i would urge everybody to understand thais general, when we made that determination that mistakes had step of dismissing the case. >> which i gave you full credit for. now, let me ask you, four of the six prosecutors according to reports who were investigated opposed releasing the report and their names have been redacted. i want to ask you if any of those prosecutors are still in the justice department system?

>> i have to check that just to make sure, but i believe all the prosecutors who were involved i department. i believe that's true. i'm not totally sure on that. >> does that trouble you that there would be findings of misconduct in such a sensitive area that they would still be that you would not let them go outside of our justice system? >> it depends on the nat the misconduct, what it is that they did, the mistakes that were made. i think one has to look at the be released combined with the opr report and the recommendations for sanctions o report to look at what exactly should happen to these people. was the incident an isolated one. how serious was it? what is the nature -- >> are you going to do that, mr. attorney general? are you going to make a decision regarding people who have clearly exhibited that they do

not have the integrity to prosecute in this sensitive area? will you tell the committee wha made that determination? >> the actions that we take e's act interest that prevents us from sharing with the public with this committee, what actions we have ultimately decided to take against those people who are found to have been culpable. >> i ask that you report that to the committee. thank you, madam chairman. >> senator brown? >> thank you, madam chair. think, general, for your service. you established a new residential mortgage backed securities working group. thank you for that. i want to talk in a moment about that. but last week phil angelides from senator feinstein's state, former chair of the financial crisis inquiry commission observed that what -- the number of lawyers, some 55 lawyers, investigators and other staff of the working group i just

mentioned, that this is far fewer than the hundred law enforcement esdedicated to the fraud task force during the savings and loan era. he also suggested -- mr. angelides also suggested congress should extend the statute of limitations for raud from five years to ten years as congress did in 1989 when it passed the federal institutions reform recovery and enforcement act after the savings and loan crisis. public sentiment of anxiety, frustration, outrage, pick your noun, towards the fact that so . talk to me about the working group, the dollars you're dedicating of the $55 million increase you're asking for, is it going to go into the rnbs working group? angelides' recommendation that the statute of limitations, similarly 20 years ago if not in a similar scandal, surely a scandal when it was lengthened

to ten years by congress then, if that's something we should do? >> i would say first off, this whole mortgage fraud problem scandal that we are dealing with is something we've taken extremely seriously. we brought charges against about 2100 people last year, all over the course of the last few years in connection with the mortgage problem. the number of people, i guess you mentioned 55 federal personnel to go to this, the rnbs task force, that's the federal component. one of the things i think is unique about that is we're working with our state and local partners, and in particular, state attorneys general. the number of people ultimately devoted to that task force i think will be substantially greater than that. i suspect we will also be adding people from various u.s. attorneys offices around the country. we're loo

so i think that number will ultimately go up. we'll have adequate resources in terms of the numbers of people to do the job we need to do with regard to the residential mortgage backed securities working group. with regard to the extension of the statute of limitations, i k be more than glad to discuss with members of this committee after i've had a chance to speak with the prosecutors on the ground we want to use all the tools that we have and also consider any possibilities that we might want to acquire so that we can ho institutions who really had a devastating impact on our nation's economy and continue to have a lingering effect on our nation's economy and in particular the housing market which drags down the recovery. >> thank you for that. we will be following up with your office on the wisdom, hearing from your prosecutors th initiating these cases or in the middle of these cases, the ance

years in the statute of limitations. let me talk for a moment about gas prices. you know, oil prices are well over $100 per barrel. doe and cftc have told us in domestic production is up, the consumption is down, all reasons that gas prices should not be going up, understanding the turmoil in the middle east and the discussion of iran. it's my understanding that over -- some analysts have added speculation may be adding 50 cents to the price per gallon of gas. it's my understanding doj organized the oil and gas price fraud working group to determine the role of speculators and the potential price manipulation are having on the price of gasoline. what have you found? what are>>r hat working group c in effect.

in fact, they're having a call today to discuss the situation in which we find ourselves with regard to these rising gas prices and the committee -- that working group itself will be meeting before the end of this week. the work of that committee or that group has been on going and looking to see if there are inappropriate manipulations of the market. the ftc is also working in this area. i don't want to speak for them. i understand they're working on a report of some sort we should be seeing i believe relatively soon. but that, is, again, the ftc working independently of us. but within the department, that oil and gas working group has been active, and as i said, has a call today and a meeting that i think will happen by tomorrow. >> i would like to request that after that meeting today or tomorrow, after the phone call and after meeting today or tomorrow that task force brief me and other members of the subcommittee that have expressed an interest.

>> all right. to the extent we can, we will certainly do that. >> mr. attorney general, we really would like to see that. this is very, very, very important. we would now like to turn to ser >> thank you, madam chairman. at i want to follow on to senator hutchison's questions regarding the prosecution of senator ted stevens. i think so many of us were absolutely shocked. we were -- i was horrified as a friend and as an alaskan to read judge sullivan's comments that this ill-gotten verdict not only resulted in the loss of senator stevens losing his seat, but in his words, tipped the balance of power in the united states senate. pretty powerful in terms of what the department of justice did to a great man. i appreciate and i recognize and

i thank you for your actions in dismissing that case and in your decision to not attempt to retry, and i join senator hutchison with that.you know th. i have a long series of them. what i would like to do is submit them to you today and ask that you respond to them prior to the release of the report which is due to come out next wednesday, the 15th of march. i would appreciate your attention to that. i have a question regarding what is happening now with the release of this report. the "usa today" reported that the department of justice has spent $1.8 million in defending prosecutors from allegations that they broke the law in the stephens prosecution, and senator grassley was one who mentioned that it seems like this is an unseemingly high amount of money being spent by the taxpayers to defend what

appears to be egregious misconduct and, again, senator hutchison noted the words judge sullivan used in his order saying that the report demonstrated significant widespread and at times intentional misconduct by the prosecutors. now, i understand that the $1.8 million went for attorneys fees to defend the actions of the justice department prosecutors who were under investigation for contempt by the counsel appointed by judge sullivan. the report of that counsel again is due to be released on the 15th. in addition to spending taxpayer money to defend your attorneys, did the taxpayers also pay for the attorneys to argue that the contents of this report should not be publicly released? you have stated that this is a matter that has risen to a level of public attention. so if you can answer that question for me, and, also, whether the justice department

supports the merits of the appeal that has been raised by mr. edward sullivan, who is one of the prosecutors who has asked the u.s. court of appeals for an emergency stay to prevent the release of this report next week. so the question is whether you support the merits ever that appeal, and, again, whether or not the taxpayers are on the hook to pay for his attorneys to argue that this report should be kept from the public? >> yeah. i don't think we take any position regard to the -- with regard to what he has said about his desire to keep the repor sealed, but we, the justice department, has indicated that we do not object to the release of the report. i think the given -- given the issues that we found there, the magnitude of the case and errors that led me to decide to dismiss the case, that there is a legitimate public interest in knowing as much as we can about

what steps the justice department has taken in connection with these findings of misconduct. >> so is the justice department paying for his attorneys fees in this matter to keep this from being made public? >> i don't know about him specifically but i do know as a result of the charges that were brought against him, i think the determination was made that there would be a conflict of interests for the justice department to defend them which would be typically how we would allowed to get outside counsel and un justice department then pays for those legal representations, of cases, a variety of circumstances. former attorneys general as lawyers have been reimbursed by the government. i'm hoping i won't have to do that, but other attorneys generals have done that.

llivan had appointed, even though that counsel has found that members of the stephens prosecution had engaged in significant widespread and at intentional misconduct, does the government have any recourse to recover the funds that have bee? now you have mentioned in your comments to senator hutchison that after the office of public responsibility report, that there may be sanctions that we will see, but is there recourse? are you pursuing any recourse? it seems to me in an instance like this, where it has been made clear that the intentional -- that the conduct was intentional, that as substantial, and it was widespread, that we should not

attorneys fees to -- to, again, allow these individuals to -- to conduct such acts and then to learn that they'ti doesn't give me much confidence. >> well, i mean, certainly one of the things that i think happens is that beus justice department can't represent these people and they have their own views of what they want to be able to explain with counsel, defend themselves. that is why the expenditure of money actually occurred. that is why they were allowed to get outside counsel, and as i said, that has happened not frequently but it certainly happened in the past, and we acted with regard to them as weh regard to the retention of outside counsel. >> i would think that $1.8 million to go to defend these attorneys who had engaged in inteio just stunning to me.

i'd like to think there could be some recourse. madam chairman, i'm well over my time and thank you for your indulgence. >> it wapo opportunity to completely pursue your line of questioning. the situation that has been presented by you and senator hutchison reminding the committee is deeply troubling. we must p we also must have and independent judiciary. we have to have, regardlesrty s house, a justice department that we believe in, and that the american people believe in. so i know the attorney general wie >> madam chairman, i ju those c and agree wholeheartedly. and i do tnk major first step when he dismissed the case. that was huge. but now we must follow-up so that there is no question that the people who did this and the report will show whatever it t

prosecute ever again, ever. thank you. >> thank you. >> senator pryor? tha you, mada attorney general, welcome to the committee. thanu wdinst want to add my voice to and i could go through the facts and figures on that but you know those better than any of us do. it's just a real concern, and we have one of the prisons that's on the short lis a back in 20 -- in fy 2010 it was scheduled to the funded in 2014. well, now it keeps getting pushed back. now it's 2018. it's jus t being able to get to some of the real needs that we have. so i know i'm noonern ere. let me ask about sequestration. i don't believe anyone's had a chance to ask about sequestration, and i'm curious e

department did you all perceive what would happen to sequestration if in fact take place? and what plan, what steps you're taking to, you know, address that? >> well, i certainly hope that's something we don't have to face. i mean, as i look at it, we'd be looking at an across the board cut of about 7.8%, which would mean a cut of about $2.1 billion. no justice component would be exempt from those cuts and from an operational perspective, but i think we would have to cut funding and non-personnel funding. we're estimating furlough all position types including agents, federal agents, fbi agents, atf agents, dea agents and attorneys who try and investigate cases for about an average of 25 days. we would have to lose permanently a pretty substantial number of jobs, and this would

have -- this across-the-board cut would have a devastating impact on the justice department's ability to protect the american people, to do investigations. it would be something that would just simply be devastating. and my hope would be that congress would find a way to avoid this sequestration, which just from my own parochial interests which are actually the nation's as well, to really avoid the very negative consequences that could have a permanent impact on our well-being. >> and so you mentd you'd have to suspend the funding of many of the programs that help local and state law enforcement agencies? >> that's an excellent point. the collateral consequences -- the consequences are not restricted to simply what happens to the just it justice department here in washington and in our field offices. our ability to be good state and local partners would certainly be impacted by the reduced amounts of money we'd be able to share with our state local partners in terms of grants,

cops on the beat. it would be a devastating thing for this to happen. >> and let me ask about personnel here for a second. a little different context. the john r. justice program. they're right now about 1,600 prosecutors, 1,200 public defenders i believe in last fiscal year that received assistance under that program to help them pay off their student loans, et cetera. but this budget as i understand it as has been submitted does not have funding for that program this year. so i guess, my concern there would be that we want the best and the brightest out there trying cases, and on both sides. again, this is both defenders and prosecutors, and our criminal justice system, it's critical we have good representation on both sides. and i'm afraid that we're going to lose a lot of talent if we don't have a program like this, and i was wondering if you share that concern, and what you -- what steps you think we can do to try to keep the best and the

brightest, you know, coming onboard? >> no. i do share that concern. we want the best and the brightest to come and take what are low-paying jobs on the prosecution side, on the defense side. these kids, these younger people, if i can call them kids now, come out of law school with enormous amounts of debt. and i don't want them to make career choices based on how they're going to repay those loans as opposed to following theirills become members of the justice department, state and local prosecutors offices, or on the other side to be good defense attorneys. and that's one of the things that i am concerned about. so, you know, we have a tough budget and you're right that money is not there to the extent it was in the past, and so to the extent that we can work on ways in which we come up with creative things to do, to make sure that those career decisions, especially those first job career decisions by

people coming out of law school is not a function of their financial concerns, but really is a function of how he want to help build a better society. >> thank you. and madam chair, i don't have time to ask nor question but would like to make an observation. the chair of the subcommittee here yesterday took a leadership role in a cyber security exercise in a classified setting. and we appreciate her leadership on that, and getting all of us to go and participate in that. it was very informative, very interesting, and i know that the department of justice has been very involved in what's going on with federal government, cyber security issues and all the task force and everything you're working on, but also hope that you will not neglect the private sector as wes local governments, because they have a role to play in this as well. >> that's exactly right. this is not something the federal government can handle by itself. this is a national security issue.

certainly. but it's also an infrastructure issue which involves our state and local partners, and then one looks at just the amount of theft that occurs, intellectual property theft in particular so that the private sector has to be involved as well. we have to come up with mechanisms, means, by which all of those various components talk to one another. if we ultimately want to be successful in what i think is the most pressing thing that we're going to be facing ith >> thank you. thank you. >> thank you, mr. attorney general. i want to go back to the excellent question senator pryor raised about the impact of sequester. could we have that answer in more detail in writing so that everybody would have a chance to study it and go over it in programs and so on? so we can really grasp the full consequences. >> yes. >> i'd now like to turn to senator graham. >> thank you, madam chairman. i'd like to add my vice to what

you echoed in senator pryor. sequestration as set up would devastate the department of justice, our ability to defend ourselves and destroy the military and surely we can find a better way to do it than that. i think you're dead-on. this is san ill-conceived idea of cutting money blindly, my view. now, you're were in south carolina a couple days ago? is that right, mr. attorney general? >> yesterday. >> well, we're glad to have you. i hope you spent money while you were there. >> i did. >> but the national advocacy center in columbia you visited, what would you tell the committee about the national advocacy center in terms of being of value to the nation? >> it is an invaluable resource. >> did y'all hear that? okay. i'm sorry. go ahead. >> i mean it is. it is an invaluable resource for the training that goes on in the justice department. it is one that, you know, i think could actually be expanded.

interacting with our state and local partners to the extent that we once did in doing training with them. we're trying to bring into the advocacy center people from the defense side as well. it's where people learn to be good trial lawyers. learn a variety of skills. learn their ethical obligations. in addition it's an invaluable resource. >> we appreciate you visiting it would be a place where cybersecurity is probably the issue of the 21st century. and whether it's a crime, an act of war, i guess it depends on who is involved. but a lot local law enforcement folks probably have no idea how to handle this, and it would be a good way to kind of educate the country as a whole. and the class collaboration between the university of south carolina i appreciate. we took about 200 department of justice jobs out of washington because after 9/11 we were worried about having every part of our government in one city, and we moved those folks down to the south carolina and columbia and you leased a building from

the university. it saved about $35 million. so i just want to applaud you for trying to be creative to decentralize the doj so in case we're ever attacked here we don't lose all of our national assets, and a way to save money. >> we also have that relationship with the university about the rule of law component as well. and i think that's been a good synergy. >> to my colleagues, and i've been to afghanistan, like many of you, and we're trying to develop a rule of law program in iraq, afghanistan, africa, you name it, without some basic rule of law. no country can develop. and all the lessons we've learned the hard way from making mistakes but finally getting it right in many ways, we're trying to create a center at the university of south carolina for those who have been overseas can share their thoughts about what worked, what didn't. you could train before you went. department of justice, department of agriculture, department of defense, this is a team. this war require as team concept, and we're trying to