made sure -- i ordered that the case be dismissed. i also ordered an office of professional responsibility report before 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, 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'm going to request that you 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 judge not to discuss those. i've had a clans 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 what happened in the case involving senator stevens is not replicated. but i would urge everybody to understand that this justice department, this attorney general, when we made that determination that mistakes had occurred, took the extraordinary 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 in that case are still in the 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 nature of the misconduct, what it is that they did, the mistakes that were made. i think one has to look at the schulke report that is about to be released combined with the

opr report and the recommendations for sanctions that are contained in that opr 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 what your actions are when you have made that determination? >> the actions that we take -- i don't think there's any privacy 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. thank you 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 professionals dedicated to the dallas bank fraud task force during the savings and loan era. he also suggested -- mr. angelides also suggested congress should extend the statute of limitations for financial institutions fraud 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. you, of course, are aware of the public sentiment of anxiety, frustration, outrage, pick your noun, towards the fact that so

few people have been prosecuted. 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 i understand the rnbs working group. comment if you would on mr. 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 departments, in particular, state attorneys general. the number of people ultimately devoted will be substantially greater than that. we'll also be adding people from various u.s. attorneys offices across the country. 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 think that is something that i'd 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 to zoo if, in fact, that is something that we need. 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 hold accountable the people and

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 that might be in the middle of initiating these cases or in the middle of these cases, the importance of that extra five 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 inventories are sufficient, domestic production is up, the number of rigs has grown, 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 per gallon to a gallon of gas. it's my understanding doj organized the oil and gas price fraud working group to determine the potential price manipulation are having on the price of gasoline. what have you found? what are your next steps? what can we expect? >> that working group continues 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 eight 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. ha is, again, the ftc working independently of us.

within the department, that oil and gas working group has been active and, as i said, has a call today and a meeting that will happen i think 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. >> to extent that we can, we would like to see that. >> mr. attorney general, we really would like to see that. this is very, very, very important. we'll now turn to senator murkowski. >> thank you, madam chairman. mr. attorney general, welcome this morning. 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. 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 word 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. there are questions that still remain. you know that. 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 honors 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 appreciate 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 report 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 frankly the magnitude of the 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 happened, why it happened, what steps the justice department has taken in connection with the, 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 do it and they were, therefore, aloud to get outside counsel and under the regulations the justice department then pays for those legal representations which has happened in a variety of cases, a variety of circumstances from attorneys general as lawyers would have been reimbursed by the government. hoping i won't have to do that, but other attorneys generals have done that. >> so even now that the independent counsel that judge sullivan had appointed, even though that counsel has found that members of the stephens prosecution had engaged in significant widespread and at times intentional, again, intentional misconduct, does the government have any recourse to recover the funds that have been paid for their attorneys, for their attorneys fees? when they have engaged in intentional misconduct? you 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 it was substantial, and it was widespread, that we should not be defending and paying for the attorneys fees to -- to, again, allow these individuals to -- to conduct such acts and then to learn that they're still within the department of justice doesn't give me much confidence. >> well, i mean, certainly one of the things that i think happens is that because the justice department can't represent these people and they have their own views of what happened. 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 we have done in the past with regard to the retention of outside counsel. >> i would think that $1.8 million to go to defend these attorneys who had engaged in intentional misconduct is -- is 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 was important you had the 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 have public integrity. we also must have and independent judiciary. we have to have, regardless of which party is in the white house, a justice department that we believe in, and that the american people believe in. so i know the attorney general

will be responsive and we'll take it from there. >> i just want to thank you for those comments, and agree wholeheartedly, and i do think the attorney general took a 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 shows, in a they're not able to prosecutor ever again. ever. >> thank you. >> thank you. >> senator pryor? >> thank you, madam chair, and attorney general, welcome to the committee. thank you for being over here. i just want to add my voice to something said earlier about prison overcrowding. 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 list is actually in arkansas. back in 20 -- in fy 2010 it was scheduled to the funded in 2014. pushed back now it's 2018. just an example of us not being

able to get to some of the real needs that we have. so i know i'm not alone in that. so i just want to voice my concern there. let me ask about sequestration. i don't believe anyone's had a chance to ask about sequestration, and i'm curious about what in the justice did he want you all perceive will happen to the doj funding if sequestration does, 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 didn't across the board cut. $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 agents, fbi agents, dea agents, attorneys who try cases investigate cases for an average of about 25 days.

lose permanently a 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 -- would just simply be devastating, and my hope would be that congress will 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 mentioned these furloughs but i assume also 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 department here in washington and in 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 pay off student loans, et cetera. this budget 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, out of law school and 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 their passions. and take their great skills to become members of the justice department, state and local prosecutors offices or on the other side, to be good defense

attorney, and that is 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 classify 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 well as state and 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 in the coming years. >> 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? >> yes. >> yesterday. glad to have you. hope you spent money while 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? >> 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. i'm concerned we're not 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 and a place where cyber security is probably the issue of the 21st century and whether it's crime, an act of war, depends i guess who's involved, but a lot of local law enforcement folks probably have no idea how to

handle this and didn't 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, saved about $35 million. i want to applaud you for trying to be creative to decentralize the doj, if we're attacked here we don't lose all 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 reach out to the islamic world and create partnerships with lawyers and attorney generals and judges in the islamic world so we can understand them better and they can understand us. i'm excited about it and appreciate your support. now, justice scalia came out yesterday or the day before talking about, he thought it would be wise if we looked at our federal criminal code. particularly in the drug area. and see if we could reform it. i think he's right. i think we've federalized way too many crimes creating work for our judiciary that could probably be handled better at the state level. what do you think of the idea of revamping the federal criminal code and looking at maybe

undoing some of the overfederalization? >> i've asked -- when i came into office, i've set in place a number of working groups to look at that problem. that issue. are we bringing the right people into the federal system? are the sentences that we have for the crimes that are federal ones appropriate? >> like crack cocaine, and we finally fixed that, but that was sort of an indefensible sentencing disparity. >> right. i think the bipartisan effort that resulted in the lowering of that ratio from 100 to about 16-1 was something that was long overdue and i think was a great example.

people don't focus on it, but it was an example of, you know, republicans and democrats getting together and doing the right thing. not only for the system but certainly it was morally right as well. >> and an area where we may disagree, we'll talk about the law of war later. we don't have time here. but the recess appointments made by president obama a while back to the nlrb. is there a situation similar to that in the history of the senate, or by a previous president, of appointing someone to a federal agency under those circumstances that you're aware of? >> well i mean, if you look at the 23-page report by the office of legal counsel, they go through a variety of presidents. they look at the laws, existing tradition and the conclusion they reached given the length of the -- of the recess, 20 days or so, that the appointments were, in fact, appropriate. it is obviously something that the courts are going to ultimately decide, but i think that the olc opinion was accurately described. >> thank you. senator alexander will have a discussion with you. i take a different view. i've leave that discussion to him. maybe last week a plea bargain with the military commission detainee w