happen for commercial real- estate mortgages. we believe that is happening and we want to promote that. we have instructed our examiners to work with banks to try to work out problem loans in general to maintain a flow of credit wherever possible. it is a difficult problem and not just a financing issue, it is fundamentals. prices have fallen 40% in many places and vacancy rates are up. it is understandable there will be some stresses in this market. we will continue to work with banks to get through that. there have been periods where commercial real estate has created banking problems and we have worked through it. it will cause a number of problems for banks in the near term. i frankly did not know what to suggest to congress. ultimately, the banking system and the borrowers are going to have to find solutions and work

through this as quickly as possible. . .

the problem is that by taxing transactions, you would greatly reduce liquidity in markets. people who are ordinary investors, it is much more costly for them to access and to hedge their portfolios. indeed, what would probably happen is that so far as there is any jurisdiction that would have -- that would not have those taxes, it would go what story you would not collect very minute taxes. in the current world, i don't think that is a good way to raise revenue. the fee on financial institutions, it is basically sets -- a tax, and the congress needs to decided they want to tax large financial institutions. it should be structured in a way

that does not create unnecessary problems, so for example one of the original ideas was to tax based on leverage. but some further investigation and discussion revealed that that would cause severe problems in the repo market, which would essentially disrupt some very important markets because it would create a tax on certain kinds of transactions. there are other ways to create the tax base, if that is the way you want to go, and my only advice is that if you decide you want to raise revenue through that particular method, been justified as a general rise it -- revenue measure, but you do it in a way that minimizes the destructive implications for the market. >> one quick question.

the sec aside, i think there is merit in allowing banks to set aside greater capital reserves during good economic times to make it through the tougher times. it seems to have done the banking sector very well. just like intentions, where the irs takes a dim view of the company's seven aside too much, considering that tax evasion, is there merit in congress addressing the banks being able to put aside more reserves during good times, regardless -- setting aside per category versus those loans in order to reserve -- set aside those reserves? >> i do not know if it is better to handle it with congress or the regulators. but the basic idea is that a lot

of reserve policy is governed by the desire to avoid an come swooping and those kinds of things. as a result, it protect against losses, that is lost and there was not enough reserve done in advance of the crisis. i am very much in favor and the world is coming around to the view that banks should be allowed to reserve not only for no losses but for as yet unknown but nevertheless predictable losses that they will face in the future. so, yes, i very much encouraged the regulators and congress to look at ways to make sure that banks are able to reserve substantially during good periods, and they can run it down during a crisis. >> mr. chairman, we understand that you have to leave, but i would like to give representative cummings a chance

to ask you questions. if you do have times. >> certainly. >> i apologize. i had to be on the floor for three bills. i really wanted to hear all of your testimony and he tells me that we've gone over small business quite a bit. you did say one thing that before i left that i was curious about when you're talking about the consumer protection agency. you implied that when borrowers were having difficulty getting access to credit, it might not be a bad idea or it might be helpful -- correct me if i am wrong -- if the consumer protection agency was inside the fed. is that a fair statement? and that i wanted to explain. >> know, what i said is that there would be some benefit of the consumer protection agency

working, however it is structured, in a way that as cooperative with banks safety and soundness, those regulators, because they would have an understanding of the implications of the consumer protection rules for the cost to the business models of the bank to determine whether or not credit would be constrained for you do not want to create rules to duplicate credit. >> but there is something going on here. in our country, and the president before he became president said something that i "all the time. he said we had an impact the deficit -- we have an impact the -- empathy deficit. i look at what is happening in the health-care area and the financial area and it seems almost that there is an ok -- it

seems ok with some folks that if people fail, or they are too weak at the moment, let them die. let them go off the cliff. and when we talk about these small businesses, i said at a meeting yesterday in baltimore in my district, and literally people were in tears, these were good business people who have had impeccable records and now they cannot get a line of credit. they've got business that they could do but they cannot get a line of credit. they had one. and so it seems to me, i just refuse to believe that we cannot help these americans who go out there every day, do the right thing, not trying to get a big bonus, just trying to do the

right thing, employee employees, produce what they are supposed to produce, but it seems that when it comes to them, is ok to say, johnny, sorry, yes, we're going through this economic storm. you've got to be collateral damage. collateral damage means you die in the process, that is coming your business dies. you may never come back to do this business again, and it is ok. i felt the same thing when we were dealing with the health bill. it's like, ok, 45,000 americans die? all right, too weak, let them go. that is not the spirit of this country, not the country i grew up then. and that is not the country i believe in. and so i was just wondering -- and i know the fed has certain powers in certain things, and you cannot force people to bank or land or whatever.

but there is something awfully wrong -- and you basically -- maybe the credit may not be what it ought to be but there are people that had a decent credit and were doing fine and could get the business, the business is right there, and they cannot reach it because they cannot get the money. as i told my constituent yesterday, sometimes $25,000 is worth $10 million because it acts as a bridge. i had a lot of questions to ask, but i beg you to even go further. and i know i support you 100%, mr. bernanke, but i just believe with all my heart that we can do better. i just do. and i do not know what that better is. i read in the paper where the banks are doing ok, paid the money back, while my folks are drowning. there's something wrong with that picture.

but it does not make sense. i know it is complicated but we have the people to figure it out. comments? >> yes, it is very important from the empathy perspective and the economic perspective to get small business is growing. i just wonder reiterate that we are looking for ideas from the banks and others who give us more explicit suggestions, because we're working hard on this. and they're things that congress is doing and can do. there is money that has helped in community development. there is proposal to use tarp money to incentivize small banks to make loans to small businesses. so there are things that can be done. if congress wants direction, there are instruments. >> we have to do our part, and

we know you're going to continue to do your part. >> that gentleman's time is expired. in the spirit of bipartisanship, congressman burgess has requested the consideration for one minute and the last question. >> thank you for your visit today and i hope the exchange has been cordial and collegial and i hope we will see you back sooner rather than later because there are a lot of important things. just on the issue of tarp, it was supposed to lapse by december 31 and people are angered that is still there. it is not supposed to be of black's fund, no matter how benign it might bc. find another way to find that, but not tarp. two years ago when we were cruising into this rocky part of the economy, a mid-level harbinger was that $5 a gallon

of diesel and $4 gallons of gasoline in the summer 2008. i filled up right before i left, and $2.78 for regular gasoline and dallas, texas, it goes up a dollar. by the end of may we will be paying nearly $4 for gasoline again. is the price of oil and fuel unimportant now in the consideration for the global economy? and it is, at root -- and it is not come out what price point does it become important pressure mark >> every price -- everytime the price of the of oil goes up, it takes money out of the consumer pocket and it adds to inflation third we are at $85 a barrel right now. the markets do not expect large increases in the future but we do not know. it depends on global economic

activity which is stronger, generally speaking, in the u.s. and europe. it is a long way from $145 which is where we were a couple of summers ago. i don't think at this point the price of oil is a serious threat to the recovery, but clearly if it goes up it would be a negative. >> it seems to be very close to what it was before. >> i don't understand the dollar extra. >> its supply and demand, and then we have a special ethanol blend that always cost more, and that as a whole separate discussion. but i have to believe that is going to play a role in the recovery and it will not be a positive role. >> that is not a good thing for my district. we would like for the prices to go right down. >> thank you once again, mr.

bernanke, for testifying today. since you testified last made the economy has shown great progress, and the unprecedented actions taken by the federal reserve to inject liquidity into our financial system played a key role in this turnaround of the economy. i look forward to working with you in the future and the committee looks forward to working with you as we continue to build on the economic progress so far, and certainly on the goal of employing more americans. thank you so much for your testimony and staying even pastor time. we really do appreciate it. thank you. >> thank you, madam chair. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> coming up on c-span, our interview with the head of the congressional tarp oversight panel. the senate judiciary committee

questioned attorney general eric holder. the u.s. house passes a resolution about saturdays plane crash that killed dozens of poses -- the polish leaders. on c-span3 tomorrow, fbi director robert mahler testifies about his agency's operations and budgets. live coverage begins at 10:00 a.m. eastern time. later, live coverage of the first of three planned debate between britain's political party leaders. voters elect a new parliament on may 6, and gordon brown, david cameron, and nick clegg are all trying to be the next prime minister. this is courteousy of british broadcaster itv. >> this weekend on c-span2,

from the annapolis boat festival, the world's water supply. also, william cohen and barry lynn. harry markopolos on his efforts to alert about then madoff ponzi scheme. his book is "no one would listen." pulitzer prize winners. find the entire schedule at our web site and follow us on twitter. though it this morning, elizabeth warren sat down with us on "washington journal." this is half an hour. host: you have a chance now to speak with elizabeth warren, the chairwoman of the congressional oversight panel. what did you look at, and what does the report say? guest: this is our third report on mortgage foreclosures.

you may remember when congress passed the original $700 billion bailout, they said here is this amount to deal with troubled assets, mortgages and the trouble. we managed to get the banks back into the black. but mortgage foreclosures continue to be a serious problem. this report is about evaluating what the treasury has done, and trying to make sure the tension stays on that important metric. congress said we will measure the success of tarp by its effect on unemployment, peoples savings, and on mortgage foreclosures. host: remind us of what tarp is, when and why was put together. guest: you remember the crisis in september and october of 2008 when the stock market was dropping to my credit markets

were freezing. there was a real question about the solvency of our largest financial institutions. then-secretary of the treasury henry paulson turned to congress and said "i need $700 billion" to be able to deal with the subprime mortgages and other troubled assets that the banks are holding, said that we can get credit flowing again, stabilized banks, and stabilize the growing foreclosure crisis. now, that was the announcement. congress passed. it put an oversight panel in place as part of passing it, and all those we have to write reports every single month. secretary hank paulson then pivoted quickly and said that will not work. so instead we will put money directly into the large financial institutions. we did that.

they are now making money big time, paying out those big bonuses, but the rest of the economy is still struggling, and foreclosures continued to climb. host: so what is next with tarp? where are we and where is it headed? guest: 4 the bank of bailout part we're getting a lot of that money back. we seem to be doing pretty well. there will probably be some that will not pay. whether or not the automobile companies will be able to pay depends on whether consumers buy them. whether or not they have a good product and a good business model. there is still trouble with aig, wondering whether we will cover all that money. most of the big banks are coming back. that part of the program has worked. there are other pieces dealing with small-business lending, and

in particular with mortgage foreclosures. that part of the program has been much slower to get started. it is not that the oversight panel is trying to save every home -- some number need to be moved out of the homes because they cannot afford them and never will. but for those who can come to the table and make a deal with lenders, those need to be made, and we need to stabilize the market. until we do, we will continue to have trouble. the construction industry is a big part of our economy. when the housing market is still going down, there is no new construction. the same with furniture and home centers. lots of employment related to this. no economy recovers when

everyone is looking out at so many foreclosures into the future. it is a problem that we need to get ahead of. host: back to the phone calls, arlington, va. caller: hi there. i just want to make a couple of comments and then ask a question. related to tarp, my research has shown that bank of america, citi, and all the auto companies have gotten less money than fannie and freddie. it seems that some people in this country are under the impression that housing is our right, and it is not. the pursuit of happiness is a ride. the subprime issue has not yet been addressed by this congress.

everyone knows is what caused the collapse. guest: he makes some very important points. the first is, we have a congressional oversight panel for tarp. patrick, that is not the only program out there. the money is being pumped into fannie and freddie. remember that the fed is putting a lot of guarantees back into this economy, has opened the window, is basically lending for free to these very large financial institutions. they can then turn around, and if they want to make even small investments, it is a license to print money. tarp is only a subset. but patrick, your other point is really the key one. we were in a crisis.

tarp and the other programs were about let's patch through. congress is out there a year and a half after the crisis still arguing about regulatory reform. until we get those rules in place, our lenders are still going to be doing, and they are -- the same old things that got us into trouble to begin with. in my view, the number one issue to focus on is what will be the rules that come from congress for the large banks, for consumers, for derivatives and shadow markets. this will tell us who we are and who will be for the next generation. host: the house has a bill, waiting for senate action on the bill. san antonio on the line now.

caller: my question is on the health for homeowners program. -- on the help for homeowners. at the time it said you had to be behind about three months on your payment. my wife and i have not missed a payment, but she was set back on her hours at work. we're trying to keep our credit good, but it is really hurrica-- is really hurting us. you need to look of the program now. guest: remember, we look of the treasury and the programs that treasury is putting into place. one of the criticisms we have made of treasury is they have come out with a program that is too small, hard to scale up, and

that may not be providing sustainable mortgages over time. i want to give treasury some props here. they have tried some new programs, brought some new ones online. but here is the problem -- it is confusing. they're doing incentive-based programs. some of these will not be fully ramped up for another year which really brings us four years into the mortgage crisis. so, we're sure trying to push them in that direction, but that is our tool -- only to push. host: scott, from georgia. caller: thank you for taking my call. i heard you before the break saying that j.p. morgan chase had 50% increase in profit in

the first quarter. it kind of bothers me. that is my mortgage company will not deal with me at all over any type of modification. my point your guest is what others have made. these banks from the get go once we give them $1 trillion commit their plan was to sit on it until things got really bad. then they would hand it out to their friends and family. guest: i will tell you, i am really bothered about this. you know, a year and a half ago, the then-secretary of treasury henry paulson came to us and said, i know that no one likes it, but we will have to bail out these big wall street banks. he said if they go down, we will all go down. he said like it or not, we are all in the same economic boat. we swallowed it to save the

economy. here we are 18 months later, and j.p. morgan chase is rolling in the money, making big money and are able to pay it out to their executives. yes, went in front of congress yesterday and said about the treasury's plans that are modest -- they said in effect, you know, we actually do not think so. we do not want to go along with what you are proposing. remember the thing about the boat -- forget you, we will go our own way and make our money. i find it stunning. these financial institutions would not exist if it had not been for the american taxpayer. host: here is a message by twitter. guest: you have to take that up with secretary paulson.

we began to ask the question over a year ago as part of the panel. panel. it is simpl host: was the size of your office? guest: we have a staff of about 30. host: your budget? guest: we have a budget of about $30 million. we will exist until tarp expires. it must expire since october. they cannot start any new programs. we will bear for in a year from this month. host: let's here from cleveland. caller: thank you for my call and i find everything you say so informative. i know we avert some of this before but it is good to continue hearing your message in all of this that you are telling

us. i am listening to other callers and one thing about the housing issue, i grew up, born in 1950. my dad was in chemistry on the g.i. bill. we lived in apartments until i was 10 years old. i had three siblings. we found a little 3-bedroom house and my parents use this formula. perhaps you had heard about it. 20% down, no matter what the banks were telling you, and then a certain fraction of your monthly payment, the was up for mola that you followed. -- there was a formula that you followed. i see they to know about that. but we would get in trouble. i know that most people, it takes two people to work today, but i am amazed to see the very

young people with 5000 square foot homes, and you wonder, i and my husband worked very hard, i do not know how they are doing it. but unfortunately all lot of people are living beyond their means. i like for you to comment on that. and also i read in the "plain dealer" yesterday, here in cleveland, that there are vacant lots -- which i was surprised to see -- is a very beautiful community. , they are using stimulus money to turn it into an orchard. guest: so, i get your point about what has happened in the housing. in the 1950's through the 1970's, the median first-time home buyer put down 19% as a

down payment. they financed the remaining 81% on a 20-year or 30-year fixed mortgage that frankly became more affordable over time as you got a little raise or there was some inflation. buying a home was not only responsible, but steady the family's budget. by the time we get 200's, by 2005 the median first-time home buyer was putting down zero. financing was 100%. they were i shall leave financing somewhere between 103% -107% of the hon. there was so much irresponsibility oout there on the part of

both financial institutions and on the part of families. i would change from being a guy who was a computer programmer or from being a nurse to someone who fllips homes. plenty of irresponsibility to go around. host: there is a product out there waiting for the senate. here's one have one -- gop takes in democratic plans to curb financial industry. -- gop takes aim. guest: if we have not heard anything else from this crisis we should have learned that the wall street guy, not only will they engaged in the crazy behavior, but they engage in risky behavior that threatens the rest of us. there were plenty of private citizens who played with them, but these guys lead the charge.

we have to find a way to rein that image. it happens in many different ways. the consumer financial protection agency -- it is to say on consumer financial products such as credit cards, mortgages, check overdraft -- these agreements need to be readable and understandable so that people can compare from one to the next. two-page agreement, let's get a little market competition and allow people to see what they're doing and what the alternatives are. host: someone like you to run that consumer agency. would you want that job? guest: right now, i do not want to make this about me, but about a stronger structure that works the right way regardless of who was running it. host: your name has been turned

out there as a possible nominee for the u.s. supreme court. what do you think? guest: you know, it is such an honor just to have your name mentioned in the kind of company. for anyone who has ever studied law, to about it, there is no higher honor then even to have your name mentioned. i am very touched. host: you have all law degree from rutgers, from newark, from harvard, business-related law. we continue to take phone calls. this one is from boston, a democrat. caller: hi, the reality is that she knows the real issues but will not pursue them. you can go to my website, wheretovote.com. write it down, do not pretend.

you can look at the jack reed evidence. he served on the senate banking committee fowhile he took $4 million from the banks. there needs to be a grand jury investigation against the senator from rhode island, jack reed, and all the other bankers who took millions from the banks and campaign contributions, then voted to deregulate the same banks while serving as the chairman of the senate banking subcommittee. guest: i think the whole question about the money and loans in washington is no where nmore intense than in financial services. the industry is spending $1.4 million per day to lobby against regulation. they want to be able to continue to do what they have in the past. they got all the profits and the good times, and taxpayer

bailouts in the bad times. they berlin to spend enormous sums. -- they are willing to spend enormous sums, and to was on the other side? it is us taxpayers who do not have that kind of money. caller: first of all, i'd like to thank ms. warren for the excellent job she is doing. she explains things very, very well. i want to thank her. secondly, i have noticed the modifications the banks have been offering is all voluntary. i do not find they are really wanting to help anybody. also, would you talk about the new program that mr. obama just announced about underwater mortgages? guest: robin, i'm your stand.

i am very worried about the fact that our approach to mortgage foreclosure modification is to put a little money on the table. -- i understand. to ask banks to please come over to work with come runnehomeowne. the reports of services who do not know where the papers are, who the owners are keep flooding in. the treasury has been working harder, gotten stiffer with the banks, stiffer with mortgage servicers. but you know, a year and a half ago when it was the big banks in trouble we found fast solutions. when we're talking about millions of families in trouble it has not worked so well. last year treasury managed to get through 167,000 mortgage modifications for every one the got through there were 10

families who ended up for closed -- who ended up foreclosed. host: tim from pennsylvania. caller: please hold on -- i just wanted to make a point about how the biggest problem that i see is the complete lack of regard for manufacturing over in china. we seem to be using them as the biggest manufacturer for every consumer product we could possibly need here. i have proof that what is happening over there is, every prototype we send they can turn around and make that product

and sell it out of the back door to anyone, all over the world. this has killed our retail. host: do you have a question? caller: yes, what will be done to stop this? guest: tim, i have been studying the economics of the middle class for an entire generation now. we have hollowed out our middle- class with the real one-two punch. flat wages because of the declining job situation. it is not a problem only from the crisis, but of the last 30 years. productivity has continued to go up while wages have flattened. a fully employed person earns about $80 less than his father was back in the 1970's. women's wages have increased

some, but not enough to make it up. on the other side, homes, health care, transportation have increased. that has put the middle class in a squeeze. we stopped sitting and have turned to credit. the bottom line means that to rebuild a middle-class, to make it strong, i'm working on working creditsend with the consumer financial protection agency. there are others working on health care to try to help to get costs under control. the home mortgage thing, we hope to get it back under control and breakdown prices in the house and. ultimately, we need to rebuild the middle class, but cannot if we do not have a strong economic foundation and jobs base. our future in america is not as a strong country without a

bottle middle-class. host: with the consumer agency that might happen is whether it should be a free standing entity or tucked within the federal reserve. which you prefer? guest: i prefer a completely free standing agency. we know then that it would be functionally independent. if not, you might be able to make it independent. here is the bottom line. if it will not be functionally independent and able to do the job, do not pass it. we do not need one more bureaucracy. we have seven bureaucracies and washington right now the have a piece of the consumer financial protection. this agency is a pair of scissors taking seven bloated bureaucracies, slumming them down into one agency and then holding that one responsible. if you will not be an agency with the teeth to get the job

done, then let's not pretend. host: we go to north carolina, on the line for democrats. caller: i have a personal question, but maybe some of your viewers have the same problem. you mentioned a.i.g. i have a paid-up life insurance policy with them. the cash value is substantially less than the death benefit. i have been leaving it with an edgy, but i get a little more nervous every time i hear bad news about them. -- i have been leaving it with aig, but few more nervous. would you go out on a limb and suggest what you think the future of aig might be in a few years? guest: quite understand your concern. i cannot give you a legal or investments advice, but maybe i

can talk generally. each of the insurance subsidiaries that issues like insurance in whatever state -- which state does warren live in? i forgot, i'm sorry. but in each state there is an insurance regulator that makes sure that the assets of their to back up the insurance promise. host: it was north carolina. guest: yes, the north carolina insurance regulator is watching out for you. i will be blunt. those guys got snookered during the last go-round. they are weak now and they understand. they relied on the rating agencies. they now know the ratings were not true.

the aig subsidiary received an infusion of cash and are now paying it back. on the insurance fund, aig is looking pretty good. i will tell you this. the congressional oversight panel is doing work right now on a.i.g. and we will have a report soon. i hope it will be valuable to you. host: one last call from chapel hill, tenn. caller: thank you for c-span. first of all, there are two books to read. one is called "too big to fail" and the other is "shorts." is anyone doing anything with

the sewage problem here in birmingham? it seems to be similar to the cds' going on. guest: yes, ma'am, it is. i'm very worried about this. there is regulatory reform pending in the congress now. we have pumped money back into the system into the large financial institutions, and basically have not changed any rules. they are still up there in beijing in the interest rate swaps. what congress is debating now is how much restriction to put on that, how much to force them to trade on markets where it becomes more visible. and how we try to stop this from happening again, the bankrupting of americaca's cities, counties. >> tomorrow we will talk about

the federal tax system with eugene steuerle. helen tonsured discusses nuclear weapons policy. and we will look at the legislative agenda with center mike johanns. o washington journal" begins at 7:00 a.m. eastern here on c- span. coming up next on c-span, the senate judiciary committee questions attorney general eric colder. the u.s. house passes a resolution about saturday loss plane crash that killed dozens of polish dignitaries. and then president obama and congressional leaders discuss financial industry regulation. and treasury secretary tim geithner discusses financial regulations at the daily white house briefing.

>> this weekend, the first of three british election debates. for the first time, prime minister gordon brown, conservative party leader david cameron, and liberal democrat leader nick clegg face-off in u.s.-style debate. watch them and consecutive weekends with the first debate courtesy of a broadcaster itv on c-span. all this month, see the winners of c-span is studentcam winners. winners from 45 states submitted videos on one of the country's greatest drinks or challenge the country is facing three watch the winners just before "washington journal." at 8:30 during the program, meet the students who made them. >> on oversight hearing with

attorney general eric holder. he is here before the senate judiciary committee to talk about several issues, including closing the guantanamo bay detention center and giving miranda warnings to suspected terrorist. this is three hours. >> good morning. we will have a moment of silence for the death of the polish dignitaries. thank you.

we welcome you all to today's oversight hearing. senator leahy is not able to attend because he is at the funeral of a good friend back in vermont. without objection, senator leahy's statement will be placed in the record. attorney general holder, it has been over a year since you have been confirmed in this will be your third oversight hearing before this committee. we want to thank you for making yourself a sizable so that we can engage in one of our most important responsibilities, our side of the justice department. it is something we take seriously without regard of the party in the white house. it should be a meaningful discussion about the challenges facing the justice department and to provide a check on its actions and the use of taxpayer >> -- taxpayer dollars. that the justice department is done many good things that should be applauded for the

department has renewed its commitment to local law enforcement, which is put more officers on the beat and made our neighborhoods safer, helping local neighborhoods attract economic development. stepped up in force but on the southwest border to turn the tide on the mexican cartels that continue to funnel drugs and crime to our cities throughout the country the credit agency has increased efforts to root out operations that cost us billions of dollars, and to help medicare fraud. and as our economy rebounds, the antitrust section has encourage economic development while ensuring consumers have access to high-quality goods at the best prices. the justice department's tireless fight against terrorism has yielded numerous interrupted plots and arrest, valuable information, and successful

prosecutions. we reminded of our constant struggle against -- against those who wish to do was hard on christmas day when a brave passengers stop a would-be terrorists from taking down a plane with a homemade bomb. and when the plan to bound the new ways -- your subway system was flawed. about this administration's approach to terrorist investigation, the tension, and prosecution. among the many issues you will need to address today include the long overdue need to close the prison at guantanamo bay, where the hold trials for the five 9/11 plotters, and the process we used to detain and interrogate foreign terrorists such as the christmas day bomber that are captured in the united states. we can differ on these issues but we can all agree that the decisions you make will hand -- have a long-lasting and far- reaching impact on our fight against terrorism and our

ability to keep america safe. the justice the barman is charged with important duties in many areas up -- the justice department is charged with important duties in many areas of the law. we thank you for that tireless enforcement of law and look for to a productive hearing. we turn now to the distinguished ranking member, senator jeff sessions, for his opening statement. doubled thank you, chairman come. it is good to be with you. i am sorry that our chairman like he could not be with us today. attorney general holder, thank you for being here. it comes at an important time and we ever number of issues to discuss with you. after 9/11, our nation fundamentally of value wetted the approach to terrorism three recognized that we are at war and our normal criminal justice procedures were not designed for and not appropriate for the new threat. we then began to establish a military commission frame work

consistent with history for the detention, interrogation, and trial of captured al qaeda terrorists. we pass bipartisan legislation to put the system in place and we built a multimillion-dollar court room at guantanamo bay. much effort including the 9/11 commission led to this decision. but the president and u.s. attorney general have work to do one -- to undo these policies and games. it is imperiled a lot of hard work in progress over the years. i supported denominations but your actions have shaken my confidence in your leadership of the department of justice. immediately after taking office, president obama stop these military commission. on july 20, six months after you took office, detention policy task force which you cochaired reached a stunning conclusion -- captured enemy combatants including the 9/11 terrorist and

other cells at guantanamo bay would not be tried by military commission. but they would be given the resumption of civilian criminal trials. since that time, not one military tribunal has been held. they have been stopped. on number for -- on november 13, it un out that even co-lead shape mohamad, the alleged mastermind of the 9/11 plot, and others would be taken to new york city for trial. he declared before this committee that this was in the best interest of the american people in terms of safety. and you cited as support for your view the new york mayor. and yet since that time, the mayor and governor have both oppose this decision purdue asserted that we can prosecute terrorists in our federal court safely and securely because they're more than 300 convicted international and domestic

terrorist currently in the bureau's prisons. but that was surely an exaggeration. on march 22, you finally provided a list of those individuals after much prodding. it was an inflated list, i think, of many hundreds of lesser offenses. many were only prosecuted before the military commission came into office. your november testimony, you claim that civilian courts were just as effective at protecting classified material as military courts. yet in the same march 20 sec responses, in your department of justice contradicted your statement and conceded that military commissions to provide better safeguards. in fact, the responses list seven ways of military court procedure are for syria -- are superior. on december 25, the christmas day bomber was captured but he

was questioned less than an hour before he was given miranda warning. sometime later decided that this operative caring and al qaeda bomb would be detained and prosecuted in the civilian system. after the warnings, he clammed up and did not resume cooperation. the head of america's intelligence agencies said that they were not consulted on this decision, and on february 3 you wrote a letter to congress stating that abdulmutallab was mirandize with the knowledge of the and no objection from all other relevant departments of government. in that same letter he wrote that i am confident that the decision to address mr. boss acs through our criminal justice system has not and will not compromise our ability to obtain information needed to detect and prevent future attacks. there can be no doubt that

treating terrorist as regular criminals will reduce our ability to obtain new intelligence. six years ago you and acknowledge that fact in the supreme court brief, a brief you fail to disclose as required during your confirmation process. you candidly admitted that the civilian criminal system possessed an inherent limitation, that might impede the investigation of a terrorist offenses under some circumstances. including our ability to detain i dangerous terrorist or detain -- or interrogate him effectively. most recently on march 6, and you curiously suggested osama bin laden should receive the same criminal treatment as charles manson. in light of the risk you describe in the criminal justice system, do you really believe that it week after bin laden or any other alcatel leader, do you

really think the first question we should ask is do you want a lawyer? this is not required by law, treaty, history, or plain justice. but this policy still seems to remain. there are some areas in which we do agree. the department of justice rightly has asserted state secrets privileges in appropriate cases brief you testified to the legality of military commissions and i appreciate that even though they have not been used under your tenure, and yet supported a crack cocaine sentencing bill that we unanimously passed in this committee, and i appreciate working with you on that. but because you chosen national security in steering us with a head-on collision with reality, the american people are not interested in terrorists being brought from guantanamo to the rahm community. it is a stubborn thing thinking that terrorists can be treated

as common criminals and it will not make it so. i hope you are willing to reconsider those choices, i hope that the answers you provide today will help restore my confidence in the leadership that the department, and i look forward to working with you toward that end. thank you. >> thank you, mr. sessions. mr. attorney general, we will take your testimony. >> good morning, mr. chairman, senator sessions, and distinguished members of the committee. i am pleased to be here to discuss the important work of the united states department of justice. one of the things that i have pledged during my confirmation hearing this that i would be here regularly. last year i had the privilege of appearing before this committee three times, not including my confirmation hearing. over the past 14 months since i became attorney general, i have had the pleasure of working closely with many of you. i want to thank you all for your partnership and for your ongoing support for the thousands of men and women who served the

department and who tirelessly worked to protect our country, enforce our laws, defend our interests in court, and ensured the integrity of our justice system. i have been asked to report on the justice department's progress, its priorities, and its goals. i am proud to tell you what we've accomplished and also what we plan to achieve. . the justice department would

lead with strength and by a sample. we would use every tool available to keep the american people safe. i never expected that this would be easy. ours is a time of growing demand and limited resources. as the confronted threats, and new responsibilities and tough choices, the justice department has made historic progress. in addition to working tirelessly to protect our nation from threats, we have reinvigorated the traditional missions of the department. we a strengthened efforts to protect our environment as well as our most vulnerable communities. we have reinforced our safeguards in civil rights in our housing market, workplaces, and our border areas. we have made strides in insuring our prisons are six years and aimed at -- prisons are secure

and aimed at rehabilitation. it makes all of the saber. it is part of our focus on securing our economy and fighting mortgage fraud. president obama used legal tools provided by the committee. the justice department is working to make our criminal laws fairer. we lost one of the most comprehensive reviews of the federal sensing policy. our objectives, ensuring that the sentencing practices are smart, tough, predictable, and there is one that i know every member of this committee shares. i want to think this committee and the senate for the step it took last month in improving a dramatic reduction in disparities between crack and powder cocaine sentences.

it is heartening to me personally to see the committee come together in a bipartisan fashion to address this long standing in justice. the disparity undermined trust in the criminal justice system and diverted resources away from the prosecution of large-scale drug organizations. these reforms will serve the goals of law enforcement while ensuring fairness in sentencing. i hope the committee will help the department achieve its goals and meet their responsibilities by confirming the president law enforcement nominees more expeditiously. there are currently 19 the united states attorney nominees and 17 united states marshal nominees awaiting committee action a backlog of this magnitude is unusual. i spoke with the chairman and ranking member about this concern. i am hopeful it will be

addressed without further delay. every day, the dedicated professionals help to fight our ongoing war against attacks at home and abroad. i am proud to say the department, working closely with our partners in intelligence and national security, was extraordinarily successful in districting plots and capacitate jing terrace. we destroyed a plot by with a text of ways in manhattan with explosive bombs that could have killed many americans in what would that been the most -- one of the most, if not the most, deadly attacks since september 11, 2001. he is already pleaded guilty to charges in this case. we also tried several of his associates with participating in the plot.

we secured a guilty plea f for assisting with the dead attacks in mumbai. as part of his plea, he has provided viable intelligence about terrorist activities abroad. we obtained the cooperation ofumar mutallab who tried to bomb a airliner last christmas. although i cannot discuss the intelligence that he has provided, i can tell you that it is not just invaluable, it has been actionable. we convicted in man of attending to murder united states law enforcement agents in afghanistan. here is a pakistani physicist and afghanistan with information about biological weapons. his descriptions of the nine states landmarks. she later opened fire on the united states personnel. the justice department indicted

her in federal court in 2008. she is convicted several weeks ago in new york. most of this work was done by career professionals driven by no ideology except in loyalty to our nation and a commitment to keeping our people safe. they work hard. they get results. since september 11, 2001, congress has provided the justice department broad authority and resources to fight terrorism. the department has used these resources effectively, obtaining 160 convictions for terrorism plots. time and questions have been raised about our courts, most of these convicted came during the last administration. it made it 8n integral component of the strategy.

they use the criminal justice system to interrogate, prosecute, and incarcerate terrorists for the same reason the obama administration has spent a it is an effective tool to protect the security of the american people. this administration would use every tool available to its to fight terrorism. every tool. this includes civilian courts and military commission. we have referred six cases for prosecution that will refer to other cases as well. we have deployed the full extent of our military and law- enforcement resources to defeat terrorism. it would jeopardize those results to prohibit the use of the criminal justice system to prosecute terrorists.

it would seriously weaken our national security. and some of pursuing a narrow approach, we have to be flexible. we have to be pragmatic. we have to be aggressive. we must use the weapon that to be most effective. i know you all have questions about the charges. no final decision has been made about the forum in which he and his co-defendant will be tried. this is a very close call. it should be clear to everyone that there are many legal national and practical factors that have to be considered. there are many perspectives on what the most appropriate and effective forum is. in making this decision, this is ministration is only one goal -- to assure justice is done in this case. we will enforce the law.

we will affect -- protect the american people. by value and will work to uphold the trust this committee has placed. i want to research my pledge that as long as i have the privilege of serving as eternal general, the department of justice will be a service of the american people. not of any party or political ideology. we will work to protect our nation's security. we will strengthen the values that have made our country a model for the world. i thank you again for this opportunity. i am happy to answer any questions that you might have. thank you. >> thank you. we will now move to our questions and around the seven minutes. guantanamo recently completed its review of the to hundred 40 detainees to determine whether each of the prosecuted or

transfer to another country or held indefinitely. i am pleased to hear that you reviewed each case fairly. in your testimony you did not mention if and when you plan to close guantanamo bay. are you still determined to close that prison? if so, can he give us an update on the timeline for doing so? what do you intend to do the -- evidence to prosecute? >> it is our intention to close it. there was and still is bipartisan support for the notion that the guantanamo facility should be closed. it serves as a recruiting tool for those who have sworn to harm the nation. but the man who ran for president last year supported the closing of guantanamo, as did president obama's predecessor. we will close guantanamo as quickly as we can and as soon as

we can produce the work has been done with regard to the disposition of the two injured 40 people who were there -- 240 people who were there we took over the facility. i can share the numbers with the about where they should go. one thing that we have in our budget for next year it is funds in order to come up with another facility to which the people might be transferred. we would like to move on the plan. we need congressional support. >> you say you have no time line. does that mean mib this year, and dexter, the following year? >> -- does that mean it might be this year, next year, the following year? >> we need an alternative site. we need to place in thompson those who would be tried, either military commissions or in civilian courts.

and those who might be temporarily housed until they can be repatriated. >> we sing you cannot close guantanamo bay into you have this other side? >> yes, we have to have an option. that will require congressional support for the funding request that we have made could do >. >> at a house hearing last month, you said osama bin laden will "never appear in an american courtroom." you said "we will be reading miranda rights to the court." general mcchrystal said the military's goal is to capture him alive and bring him to justice. the cia a director said he should not be cut and would be taken to a military base and interrogated. would you like to explain that comment in clarify?

>> with regard to osama bin laden, who is our target one for the united states, our plan is to capture him or to kill him. our hope would be to capture him and to interrogate him to get useful intelligence from them about the structure of al qaeda, about their plans. what i said in that hearing was an assessment of the likelihood that we are going to be able to capture him alive. what i said was that with regard to that possibility, both in our attempts to capture him and from what we know about instructions he has given to the people who surround him, i think it is highly unlikely that he will be taken alive. our goal is to either capture osama bin laden or to kill him. >> last time you came before the committee, you strongly defended

a decision to try the 911 plotters in criminal court in new york rather than in military tribunals. the president said he will review your decision. do you still believe criminal court is the right place for the trial? if they were moved to tribunals, how would you address concerns that critics have? >> yes said the administration was open would weeks away. when can we expect this? >> they are in the process of reviewing the decision as to where they should actually be tried. new york is not off the table at a place where we might be tried. we have to take into consideration the concerns that have been raised by local officials and by the community in new york city. we expect we will be in a position to make that determination in the number of weeks.

>> thank you. >> throughout my own state of wisconsin, local law enforcement agencies speak about how vital the cops program is to keep our communities safe. fight crime. last year i joined the senators feinstein commonly he and others in introducing legislation to reauthorize the cops program and improvements to the administration of the program. can we count, mr. attorney general, on your support for this legislation? will you continue to fight for increased funding to the cops program? >> absolutely. the cops program has historically proven to be one of the most effective ways in which the federal government can assist its state and local partners. i think that the historic drops we've seen in crime over the last ten years, 15 years or so is a direct result of the fact

that we have employed, put more police officers on the street. state and local authorities don't always this is really have the financial capacity to do that in the cops program there has been a plot and allowing the state and local partners to deploy more people. it would be my hope that even in these budgetary times that we will find a way to make sure that the cops program remains a viable one. >> thank you very much mr. attorney general. i turn now to senator sessions. >> thank you, senator. mr. attorney general, if there is a problem with u.s. attorney's to help keep us posted on that. i think it is pretty clear that the administration then slowly be making those nominations. i'd also believe there are any objections on our side to moving the good nominees and i don't believe a word chairman lee he has delayed that. i think if you look where the delays are they are a

nominations. with regard to the khalid sheikh mohammed decision you made that decision. you declared in this committee directly that there was going to be tried in new york and he defended that as a appropriate way because quite a bit of controversy at the time. i a understand now that the white house is suggesting it would not be tried in new york, and i guess it it makes me a bit uneasy having served in the department that has politicians discussing where the cases of to be tried. normally the default and objective professional prosecutors. so what is your position about where this khalid sheikh mohammed trial should take place and are you uneasy that the white house is leaking statements about where a criminal case should be taken for trial? >> i have said myself the

national security team is in the process of reviewing where the case might best be held. we have to take into consideration -- >> were on the national security team. >> the national security and includes a qtr defense, secretary of state, people from the intelligence community, the people who meet with the president a free tuesday afternoon to review where we stand around the world with regard to our terrorist efforts. this is a trial that is unique in the sense that it does involve real national security concerns and i think the involvement of the white house and the national -- the national security component of the white house as well as the national security team in helping make that determination makes sense. i am very jealous and regarding the prerogatives of the united states department. >> you should be. and i was a little -- up expect normally for some could reconsideration the attorney-general should announce that it's under reconsideration

and not politicians would make the announcement. but there is a new problem. is it not if it is the case tried in civilian court the constitution limits the venue in the criminal cases, but if it is tried by military commissions you're not limited in that way. so to try ayaan elbe malae, wouldn't that raise continue questions for example? >> you're obviously a former united states attorney and the question that you ask is one that i ask. if there were the possibility that we moved this trial but what of the possible means be and i've received from people ask that question a list of places in which the case could be tried. what i will say is the southern district of new york for instance is a much larger place than simply manhattan.

there's also the possibility of trying the case and other venues beyond new york. >> i just think that the simpler and more logical decision would be to reconsider fundamentally and try this case where it should be i think and military commissions. isn't it true that the protecting unclassified information that can be revealed in a criminal trial is a priority of the were government in other words, we don't want to have a trial developed in such a way that was a free information is revealed to the public's and on march 20 if this year, your department answered questions i submit it to them about the danger of the dealing with classified information and the relevancy of that to the criminal or not that your

commissions. you testified there was not much difference but the large tecum or 20 of responses from your department really tell a different story. citing, quote, key differences in classified evidence protection and military commissions trials that are not similarly present and federal criminal law. were you aware of this information when you testified before us in november? >> i don't necessarily agree there are fundamental differences between the protections that are available in civilian courts and those that might be available in commissions commissions' modifications made to the secrecy provisions really codify what the judges do as a matter of routine in civilian courts with one exception that has to do with the possibility of the interlocutory appeals and which frankly i think is a good idea and perhaps ought to be incorporated into what we do on the civilian side. most of the other enhancements

that you see with regard to military commissions reflect what judges do on the civilian side. >> that's not what your response is say. they list seven different examples on how the military commissions are more effective and protecting intelligence sources and methods that a criminal trial. do you dispute that? >> i think that those seven instances -- the instance is listed as i said reflect the kind of things the judges do, not because they are obligated to do than by roel or by statute but because they do them in the way which they interpret the statute. as i said, i do think that the one modification enhancement that exists with regard to the military commission about the possibility of an interlocutory appeal is something i think we ought to consider and we should

always be looking at the cepa statute to see how we can make it more effective. >> i agree with that but i would say to you, mr. holder, when you try a person in civilian court you have to give them a land of warnings upon taking that into custody. you have to tell them they are entitled to a lawyer, entitled to a speedy trial and entitled to file the discovery of the government case all immediately basically. and when you try a them in military custody you don't have to charge them at all because they are a prisoner of war until the war is over but if it violated the law we of the war and committed criminal acts they may be tried if you choose to try them in military commissions. it just makes perfect sense to me that these cases would be tried. that is the result of a national consensus after the 9/11 commission issued their reports,

congress passed legislation to that effect and the president in one of the first acts was to set aside and stop these commissions and they've blocked progress since then it seems to me. so i think you need to reevaluate this. i don't think the people of new york want this trial anywhere in their state or their city or the district's and there are many legal questions that will arise. i just hope that you would reevaluate this. the white house is, i hope that you will and that we will soon have clarity about what the policy of the department of justice is. >> the decisions that are made and the decisions that i will make with regard to the placement of any of the trials depends on what is best for the trial. doing this on a case by case basis with regard to the evidence we would seek to add that concerns about some of the evidence that might be admitted depending on the form we would be using, the impact of the use

of certain intelligence on the intelligence -- evidence on the community and what it might do for our ability to interact with our allies, there is a whole variety of contacts and things that have to be taken into consideration and what i have tried to do and what we will try to do is make these decisions on a case by case basis with the aim of being the most effective and in particular trial at protecting the american people. >> thank you, said intercessions. senator feinstein. >> general, i think your last sentence was very important, and i think that the degree to which this dialogue has escalated is really a very unhealthy. democrats did not do or did president bush following 9/11 what is being done to this administration with the decision making, and i regret it and i really find eight reprehensible

and i believe the best interest of the people of this nation are served by the administration, you, mr. attorney general and the president has a maximum flexibility asas to which then u these defendants should be tried. i have served now on the intelligence committee for some 18 years on this committee for over 17 years and i have never seen anything quite like this. their record is ignored. it doesn't matter that the bush administration 200 terrorist justice and under article 3 courts. it doesn't matter the military commissions which have been fraught with controversy have convicted three, two of whom are out. it doesn't matter that isasi plug guilty. there was a threat. that was a real threat to the

city of new york. the fbi did magnificent work. he pled guilty to read david had li is a serious terrorist. he pled guilty and the fact of the matter is arbuckle three courts has other charges that they can use if they do not have an evidence to sustain a terrorist charge. you should have that option. you shall also have the option of the military commission. and i've come to the conclusion that a lot of the attacks are just to diminish you and i don't think that you should buy into that at all. i think that you should remain strong. now i've had concerns about new york city. i've been a former mayor. i was the mayor in the wake of an assassination, major rob yet. i know what happens inside a city with a lot of scar tissue, and that is why unless you've been there, done that and understand it. so i understand why new yorkers

feel the way they do. i also understand why the best interest of our country are served if you have remain strong and make the decisions based on the legal facts and to where we best get a conviction. and i've just want to urge you to remain strong in that respect. the record to article 3 court and the conviction of terrorists in this country is unp i wanted to ask you a question on indefinite detention, if i might but did the immigration and nationality act both of different types ths. i think it is important that the executive branch preserve the

balance between preserving the rule of law and releasing individuals that are determined to harm our nation. this is a difficult area. i like to ask your opinion. and what circumstances can the executive branch hold detainees that continue to pose a security threat but cannot be prosecuted? >> we have to the get these cases individually. we make these on the case by case basis people who we decide should be held under the laws of war have a right to habeas proceeding so a judge has the ability to look at whether the detention be seeking is appropriate. we have one case in that regard. we have not been successful and others. some are under appeal.

some under release have been released. we use that power with the thought that what we want to do is keep the american people safe and not read these people who would pose a threat to the united states. or do the real these people who would a share if there were the crews did third. depose a threat to our people. appropriately used and i think if you looked at the number of people we had at guantanamo, the number of people who we would seek to detain in that way is relatively small. >> thank you. next question here. i wanted to ask -- about a year

ago we passed legislation with respect to the detention of children that are brought to this country not at their request but similar to the alley and gonzalez case and then some time ago that they have about 5,000 children who at that time were subject to serious detention in jail facilities some of them very young. we passed a bill a year ago asking you to do certain things and we have no response to that. would you take a look at that and see if we can to get that show on the road so to speak? >> i will look at that. the concern that you have is one that i have as well. >> regulations that have to be implemented. >> and we will look at that. the concern about children and

their detention and what that means for their development and separation from parents, these are things there are legitimate in terms of looking at the regulations. >> can you give any kind of a time line? fifer to figure and if you could give a time line, a lot of children out there, this has to do it in the fenech detention and with guardianship and with ability to return them to the country if there is a place for them. >> when i get back this afternoon to the department i will look to see what the state of plea is and then if i can i will promise to get you a letter by the end of the week to give you a sense when it is we can start to do something in a substantive way. >> thank you. >> thank you, senator feinstein to read senator hatch. specs before mr. chairman. mr. attorney general, do have a tough job and i respect how difficult it is. my time is limited so i will only be able to pursue a handful

of subjects than i really want to take up with you but i will be submitting several questions for the record. one of the questions i will be submitting is why you felt the need to issue a memorandum to revise prosecutorial guidelines for marijuana prosecution's to read the comics resected the controlled substances act the csa, with making dangerous drugs and illegal. i want to make sure that you as the highest legal will enforcement office of the land are the congress' intention was with respect to the csa. now the white house's vision of how the substances act should be enforced. so i will be looking for a timely response to that question. but briefly i am sure you are aware of the deadlines complete with precisions of the adam walsh act should not to be great interest in the act. my good friend john walsh on america's most wanted discussed

getting states to comply with the adam walsh act. right now i would like to get your pledge to work with me of getting states on the same page before the july deadline without weakening or watering down the adam walsh act. is that okay? >> i will pledge to do that but one thing i would say, senator, is we have to work with state attorneys general who want to comply with this act, and when i met with of them expressed concerns about their ability to do so and so i think we have to make them a part of the conversation as well. i share your concern to read that is an act we have to have fully implemented as quickly as we can and certainly within the deadline but i also think that part of that conversation of to be -- >> but that act is very important. it was a tough slog to get that done and i think it's very important to have it done. before i move to the attempted

terrorist attack that transpired aboard the military flight to 53, let me briefly ask you about obscenity enforcement. how is this administration and forcing the federal law prohibiting sexually explicit material that makes the spring courts definition of obscenity? >> there is a section within the justice department of exploitation that handles these matters. the people who are there are traer employees who worked under the public and democratic attorneys general and i think that we do a good job -- >> i asked you this question -- i asked this of your republican predecessors because in my judgment they took a misguided and narrow approach to law enforcement in this area so i'm concerned. sorry to interrupt you. >> was just singing of the responsibility for the enforcement law is in that area, and i think they are quite aggressive in the prosecution

detection of these materials with a particular focus on i think child obscenity which does not exclude other forms of obscenity that -- >> but there's a pattern that the board of justice to prosecute only the most extreme and obscene materials. this particular type of material may guarantee a conviction but it's not the most widely produced concern there for it may have a very low impact on the obscenity industries of that is what i am concerned about. this approach moving across the line to the french signals that material that is just as obscene as though less extreme is let off the hook and i believe that approach is misguided and countries to the proliferation of obscenity that harms individuals, families and communities, so i am very concerned about it and i hope that he will take a real look at it because currently there is an obscenity prosecution task force

at the department of justice. will you allow the director of the task force to enforce federal obscenity law is without restricting them to the most extreme obscene material? >> we will certainly enforce the law using the limited resources that we have and go after those cases i think as we always do and have the potential for the greatest harm. there are first amendment considerations that have to be taken into account but it does not mean we will not be serious about the enforcement of the law. >> with the transition to the christmas bombing attempt to the northwest flight 253. generate 26i sent a letter to you regarding the decision to charge umar farouk abdumutallab in federal court in your response letter back to me dated february 3rd, 2010 he laid out an explanation defending your decision to charge this

terrorist and federal criminal court and further explained that you alone made this decision to read you referenced previous administration to judge richard reid and noted the similarity of the two cases. i would point out that in the reed case that occurred in december of 2001 the military detention system did not give access to the attorney general ashcroft didn't have the option of military detention. because the military commissions act. the military commissions act of 2000 negative section 950 testifies crimes that can be prosecuted under the commission. one of those crimes listed under 950 t as hijacking a vessel or aircraft. part of the action of this and jeopardized the lives of passengers and hazard the aircraft. they pursued the capability of prosecuting abdumutallab's under

a military commission based on section 950 with the military commissions act. >> one thing i would say is although the military commissions were not in existence the time that richard reid was apprehended the detention of already certainly did exist at that point with regard to the decision it was a decision i made after consultation on december 25th and there were a couple of conversations that occurred in the intelligence committee and then on january 5th in a meeting we held in the situation room i laid out for members of the intelligence community intelligence community as well as the defense community was the decision and the thought that i had about pursuing this in the criminal sphere and there were no objections raised to that. the decision that was made with regard to mr. abdumutallab was replacing -- to replace him in a

four men of reach we could most effectively tried the case. i think the decision that was made and has been shown to be the right one given the fact that we had the ability to get information from him in that one of our interaction immediately after he was apprehended and then the information he had a sense provided as a result of his decision to cooperate with the federal government. >> mr. chairman my time is up. i appreciate your service and your answers and i will submit a number of questions for you. >> thank you. >> thank you, senator hatch. >> senator feingold. >> thank you. my committee is aware of the federal support trials and let me simply ago with senator feinstein said so well on the continued strength on your courageous actions in this regard. i had a statement that discusses the issue and i would ask that it be placed in the record so i have time to discuss other topics.

let me also take a moment to compliment you and the assistant general for christine varney. under your and her leadership the antitrust division of the department has made it clear after many years of neglect and enforcement of antitrust law as a priority for the department and i am especially grateful for the department is focus on agriculture issues and partnership with the usda and i was pleased to hear the department will be holding a workshop in wisconsin. it means a great deal to the producers and others in the state of wisconsin senator kohl asked to about the cops program. as you know, strongly support that pergamon and other federal law enforcement assistance grant programs. i hear repeatedly from the law enforcement of wisconsin just how important a grant programs are particularly during tough economic times. the copps hiring agreed and recovery act allowed my stick to how your and rehire 58 police officers and these are certainly needed in the jurisdictions where they were provided but i do think it's important that these dollars are distributed

fairly different cities and counties and in meetings and had recently with wisconsin law enforcement it was brought to my attention the wisconsin sheriffs received zero grants to the recovery act. will enforce that everywhere are forced to do more with less these days but this struck me as an unfair for those of my stick. landers and the department is looking at possible changes for the grand methodology just on the status of that review how quickly can we expect it to be modified and it just sort of an update on that effort. >> quickly before i get to that, the -- you are right there is a focus on the antitrust division for the whole question of agricultural concerns. i will be attending with secretary of agriculture vilsack number of forms and around the country it think it is flight schedules. we've done one already in iowa with senator grassley.

with regard to the question of the allocation of the copps funds i think the sheriff's -- i think my numbers are correct, 17% of the money that was aborted last year. we are in the process of looking at the allocation formula that we use and was based on, generally based on the economic condition and a particular jurisdiction with the crime rates are in that same to destruction. i've talked to representatives of the sheriff's communities and they raise very legitimate concerns and so as we construct the methodology that we are going to be using next year we will take into consideration and i would expect we probably have a determination made over the next few weeks >> prosecutors have been telling me they are having a harder time. many of the servants have had to take second jobs to pay off their law school debt.

of assisted the have a rate between 30% and 50%. this is a serious problem. it is when the many reasons i was a supporter of the defenders incentives act which created a much needed student loan repayment program. it was enacted into thousand eight. the doj has yet to issue guidelines to and able the states to solicit applications. can you update us on the status of the applications? when can a start applying for assistance? >> even in these times, i think the wisdom of that fact is relatively obvious. i have been concerned but the state of defense. we talked about that. i am concerned about what i hear from people on the other side.

to the extent that we can come up with things which we can be of financial assistance to these groups, i think we need to do so. but me back to the department and see where we stand with regard to our loan assistance regulations. ll assure you this is something that for me defend the travels i have had a chance to do over the past 14 months. this is a priority. i am really concerned about the state of our local criminal justice system and the ability to hold on to good people who only want to serve their commitment fees. there are economic considerations that are driving good people out of the system. >> thank you for the statement. i will have a continued interest in this. law enforcement corrections that have long known people with mental illness are significantly overrepresented in the prisons and jails and our jails and

prisons were never intended or not equipped to the treatment facilities for the mentally ill but unfortunately that is what they often become. wisconsin started looking at this issue and recently convened a task force of law enforcement for officers correction stuff, district attorney's caustic legislators, social service providers with a goal of developing a strategic plan to increase wisconsin's response to people with mental illness in the criminal justice system. this initiative wouldn't have been possible without the leadership of our chief justice and wisconsin, shirley abramson and able to obtain funding for the council for the state government to organize this task force. a joint the council received the funding for this and other mental health initiatives as a result of the mental illness offender treatment [crying] and while i was pleased wisconsin received some assistance for this initiative there was one of just four states that received the eight out of more than 30 states that applied for assistance. we have historically allocated few resources to deal with this complicated problem, get funding for mental illness programs is one of the most competitive

grant programs in the department. despite the high demand the president's budget proposes consolidating this important project with the drug courts program, and i am concerned that will and not enough resources for either program. why was that recommendation made? >> i think that what we have tried to do is again in these very difficult economic times to come up with ways in which we can be most effective effective. the concerns you raised are indeed very legitimate ones and i am very concerned about the way in which we d institutionalized or facilities and so many people who i think what do much better in the institutions that were while funded and well run and instead we put them in the criminal justice system. i saw that as a judge in washington, d.c.. but we tried to do and are trying to continue to try to do is come up with ways in which we can help our state and local partners and help or allows citizens deal with issues they

have to confront putting those two together it seemed to us to identify ways in which we could consolidate those people who have drug problems and come up with alternatives to simply try them and incarcerate them and to also deal with people who have mental issues and come up with ways which we can help them other than by incarcerating them. we will do the best we can with the resources that we have. but the concern that you raised i think is a very legitimate one and one that i think as a society we need to focus more attention on. i have witnessed this as i said as a judge and i am very, very concerned about the way in which we treat the mentally ill and the desire to put them in the criminal justice system. >> thank you very much. ..

they represented detainees or advocated on their behalf. i think it was a simple request. you said you would "consider it, " we can have a backup force. your staff has refused to provide information. the justice department manage to verify or provide names to fox and news. he said this inquiry has called into question the integrity of political appointees. i want to make clear that i am not here to call into question the integrity of any employee.

in fact, i agree with the department view that personal attacks of the department employees are inappropriate. the increase seeks to understand who is in advising you on these conversations. on our national security. these questions are about transparency, about openness and about accountability. the platform for president obama ran on in 2008 and what has culminated in a presidential memorandum on openness and transparency in government that he signed january of last year. so a very simple yes or no question. would you provide the names of political appointees who had previously represented detainees or abdicated on the detainee issues? >> with all due respect senator and i know you are a request comes from a good place.

yours was inaudible request in the hesitance i had has been borne out by what i have seen. there has been an attempt to take the names of the people who represented guantánamo detainees and to drag their reputations through the mud. there were reprehensible ads used to question, in essence to question their patriotism. i am not going to allow these kids-- i am not going to be a part of that ever did so with all due respect their names are out there now. the positions that they pulled, that has all been in place in the public record. i am simply not going to be a part of that effort. i will not allow good, decent lawyers who have followed the greatest traditions of american jurisprudence done whether chief justice has said is appropriate.

i will not allow their reputations to be disbursed. i will not be a part of that. >> well, remember that this is a request from this committee and i think all the people in it for very sincere about it, so i will move on. you recently said the attorneys representing unpopular clients are patriots. i want to comment so that i doubt you would share the same feeling for lawyers who represent the mafia and i doubt that you would hire them in the justice department. the department's response said that the department of justice did does not keep a centralized database of refusals and it is the honor of the employees to recuse themselves. you know that large law firms like once you've served and have conflict committees and procedures in place to assure that rules are followed. why shouldn't the department of justice not just on the earlier

shift but under leaderships before you have some centralized system of complex system as private firms have? >> i think that is actually a legitimate concern that the race and that is something i think is worthy of consideration because you are right, that there is within certain law firms, i was a member of such a database and that i think is something we can consider at the department. >> a freedom of information question and discussion with you. on january 21, 2009 president obama issued presidential memorandum to heads of all executive departments and agencies regarding freedom of information. that memorandum stated quote all agency should adopt a presumption in favor of disclosure and directed you to issue guidelines which you issued march 19 last year.

your guidelines stated that quote and agencies should not withhold information simply because it may do so legally. they also limited when the justice department would defend the denial of foia requests. i believe the guidelines were a good step in opening up government and honoring president obama's pledge. however, when the department posted the annual foia report back in march, the effects i think painted a very different picture. an analysis by the "associated press" found that in fiscal year 2009, government agencies cited foia exemptions, 468,000 times compared to 312,000 times in fiscal year 2008. one exemption, i-5 was used almost 71,000 times in fiscal year 2009 compared to 47,000

times in fiscal year 2008 and all of this occurred despite a total decrease, total decrease in foia requests fiscal year 2009. these numbers i think ought to be shocking to anybody that talks about transparency, so what is the reason-- i'm going to us to questions. what is the reason for substantial increase in the use of foia exemptions by this administration and if the use of exemptions continue to increase in fiscal year 2010, what will you do to personally ensure that agencies are more transparent and responsive to the public's right to know no end to what the president says he wants us, his executive branch of government to do? >> the president has been clear and i think in the regulations i issued, i was clear that foia and the release of information, the desire for transparency is something that is critical to this administration and the

statistics you have cited are indeed troubling. i am not exact way sure what the reason is but i think you require some further examination to ensure that those people who are responsible for making foia decisions are doing so in a way that is consistent with the desire for the president and the directions that i have issued. we will review that and see what has happened. i can assure you though that the president is sincere and i am sincere in trying to make sure that we are responsive or are more responsive foia requests. >> i hope you will send your message to all the agencies and the president. >> thank you senator grassley. senator durbin. >> mr. attorney general, thank you. in response to senator grassley's remark, i want to thank you. i think it was a courageous position you have taken and they ripen. history tells us it was a supreme court that ruled that

guantánamo detainees have a right to file petition under habeas corpus. is the bush administration that said they had the right to counsel and the argument being made from the other side of the aisle and their inspiration and fox news is if anybody decides to represent a guantánamo detainee they disqualify themselves from future government service because they can't be trusted. you know if that is the premise of our system of justice, that legal representation or possible inclinations toward one party over another disqualify you,, where does the event? does it end with prosecutors who fail to prosecute? does it end with judges who may rule in favor of a defendant? i think you are standing up for a very fundamental principle and rule of law here that does go back to john adams in the early days of this nation and i thank you for doing this. the men and women who have the courage to stand up as professionals who have taken an oath to represent not only their clients but defend our

constitution and laws have the right to that kind of defense and i thank you for the courage to do so in the hope the record where we reflect it was the bush administration that the guantánamo detainees have the right to counsel. it was the right decision. i think you are well aware there are a lot of questions about using article 3 courts for fear of giving a miranda warning. what was the fear of the the policy of the bush administration? >> i think it is different than the policy we now have them place. it is not -- it does not mean the flow of information stops. a good case can be made that once people get miranda warnings, the information flow continues. once a lawyer is introduced into

the mix, the lawyer then counsels his client. given the lengthy sentences, it works to convince the client to cooperate with the government. miranda warnings are not ones that have a negative impact on our ability to tame producer? let's go to a well-known case. >> how long after he was detained by the bush administration's department of justice before he was giving a miranda warning? >> i think it was within a few minutes. >> 5 minute is what the records state. that was the standard. now to argue that a miranda warning is somehow unwise or unsafe for an american is to ignore the obvious. how about the intelligence? this the second argue that made.

but not excessive prosecute a terrorist in court without running the risk or discuss -- disclosing sensitive intelligence predicts i think they did quite -- intelligence. >> i think they did quite well. . . >> one of the leading prosecutors in america, the u.s. attorney for the northern district of illinois, patrick fitzgerald who was in charge of the prosecution in the southern district of new york of the african terrorist who said afterwards that he could do this without disclosing intelligence information following the law backed up by others who had been through the same experience. if you had complaints from your attorneys when he considered article iii prosecutions that somehow that may jeopardize and disclose intelligence information? >> no. i've not have the complaint and i think our history shows article iii courts are capable of trying cases without putting at risk the intelligence sources

and methods of the same is true of the military commissions. >> that would be an option you would protect if you could make the choice. let me ask you this, for the record has been said by others if you look at the scorecard since 9/11 how many successful prosecutions and convictions of terrorists have taken place in article iii courts under the bush administration and obama administration and how many have taken place in military commissions? >> i think we have a successful prosecutions close to 400 over the article iii side in three in the military commissions side. >> those who are arguing we should shift all of these prosecutions to the military side would have to stop and explain why this dramatic record of success in article iii courts should be rejected at this point. let me ask you about the sensitivity of the people in new york with ksm. tell me what is going to the minds of the administration in your mind when you think about that prosecution in that city

after all it has been through. 's the one thing i think we have to remember is i guess somebody said there was an initial negative reaction to that position. position. quite i think if one looks at the initial reaction from people in new york, the reaction actually was a positive one. that ding said, as we are making this determination we have to take into consideration what we heard from the mayor what we have heard from elected officials in new york city. what we glean from the people of the city as evidence in a number of ways and try to come up with a way in which we can come up with a forum that will be most effective with regard to that case whether it is a military commission or an article iii trial in new york city or some other place. >> i want to make it clear that i'm not trying to cast in a kind of negative impression about

military commissions. i know senator graham have worked closely and i do believe as a viable alternative you should have at your disposal. is it not true though that under the procedural rules of military commissions there are some limitations compared to article iii courts. for example when it comes to capital offenses? >> yes common article iii courts you can certainly, a person can plead guilty to a capital offense that is allowed in the military commissions. >> there would have to be in fact some trial if they wanted to plead guilty under the circumstances. let ask one last question. i suppose i've run out of time but let me thank you and let me try to reiterate what senator feingold added. i don't believe our system of justice should be driven by fear and anger and that appears to be a driving force among some political camps in this country. if we are going to be strong as a nation we won't be quivering in fear and acting irrationally in anger. we are going to stand by the rule of law in the principles that guided us for a long time

in a thank you for your leadership. >> thank you senator durbin. senator graham. >> thank you mr. chairman. thank you mr. attorney general for coming. this has been a good discussion about some difficult issues but one thing i would like to reiterate is president obama said the nation was at war with al qaeda. do you agree with that? >> yes. >> i would urge you to remain strong in that process because some people we don't-- don't believe we are at war. some people believe we should be using the law enforcement model exclusively and i think that is a formula for disaster and there are some people who say you can never use article iii courts and i disagree with them. quite frankly there could be times when the article iii courts would be a superior forum echo in my view a financier of al qaeda you might want to take them to an article iii trial because you have more charging possibilities. every al qaeda operative is not the same level as the next, so i agree with the idea of flexible, pragmatic and aggressive.

that is your standard so i am one senator on the republican side who has not objected to article iii courts being used in a flexible, pragmatic, aggressive fashion. now, when one is at war we have to realize the rules are different than fighting crime. do you agree with that? the law of war is different than normal criminal law. stay in certain aspects, yes. >> when we capture someone on the battlefield under the law of war we have no obligation to read them their miranda rights, is that correct? >> that is correct. that is not typically done but even in the bush administration a small. >> i totally agree. if you are going to charge someone under domestic criminal laws you should read them their rights. i would urge my colleagues to understand when you are fighting a war and to capture people on the battlefield and the whole world is the battlefield in my view, the primary goal is to find out what they know about

enemy operations, get them off the battlefield and reserve prosecution decisions later. so i hope we do not criminalize the war and we remain flexible, pragmatic and aggressive. there were 48 people at guantánamo bay. i believe this administration has identified they are going to be held under the law of war on an indefinite basis because they present a national security threats but the evidence as such it would not take them to criminal proceedings with the military commission or article iii court. is that correct? >> i am just checking numbers here. there are 48 detainees who we have determined too dangerous to transfer and not feasible for prosecution. >> i want to one, stand by you in that decision. i think it is a rational, logical decision not generated out of fear or revenge but out of necessity. we are not fighting crime. we are not fighting the mafia. we are fighting an international, sometimes an

unorganized side organization called al qaeda who has been in our distraction and some of these people need to be held under our values, under the law of war with due process but we should not use what they did as a common crime but a military threat. is my understanding that every detainee whether held under love for not will have their day in article iii court. it is a habeas corpus eating available to every detainee at once wanton amo bay. is that correct? >> that is correct. >> one of the judges recently granted a habeas corpus and to an alleged member of al qaeda who confessed to being a member of al qaeda who swore allegiance to al qaeda in the '90s but the judge decided to grant the hideous petition because the government could not prove on the day of capture in 2001 they were still a member of al qaeda. it is my view mr. attorney general that we need to reform our hideous procedures and if the presumption should follow

detainee, once you are a member of al qaeda, proven that on the day of capture there would be a presumption you are still a member of al qaeda and the court could hear evidence otherwise. this is just an example of why congress in my view ladies and gentlemen needs to get her involved. hang firm, stand strong, be fair, be aggressive, be pragmatic but do not lose sight that we are at war. when it comes to confinement facilities, i share the presidents president's concern that guantánamo bay has become an iconic image used against our troops and in the field and it would be preferable in my view to have the new facility that starts over and not tainted by the passive guantánamo bay even though it is a well-run facility now and i would like to work with you in that regard. i am losing the audience apparently, but that is okay. now, when it comes to future captures, where would we put

someone that was captured in yemen that we believed to have been a member of al qaeda? where would they be detained? >> that is one of the issues i think we have to wrestle with. it depends on what we ultimately want is--. >> since my time is short, we are basically a nation without a viable jail. this person is probably not going to send their people to guantánamo bay. is that a fairly accurate statement? >> that is certainly sometng we try to avoid. >> if you send these people to bagram airbase you are going to bring the afghan government down so to my colleagues who think we can close guantánamo bay and send them to afghanistan and the afghan government becomes the american jailer, i think you are making a serious mistake in the war on terror. >> i think we have to come up with options and i think we need to work with the congress to try to develop what those options might be.

>> this is music to my ears because i think we do also. we are fighting a war and we don't have a viable jail. some people say use guantánamo bay. it is safe and secure. i would argue, listen to the commanders and see see if we can find a better jail that would meet the needs of this unique war on terror. at the end of the day i think the decision to prosecute ksm and civilian court was a mistake or could affect you are being flexible pragmatic and aggressive is the right trend to take and i would urge you to work with the congress to see if we can fashion detention policy that allows us to use article iii courts when appropriate but never lose sight of the fact that if you are a member of al qaeda you have violated our immigration laws. you are a continuing threat to the world and the idea of holding someone with due process as a member of al qaeda until they die in jail is okay with me. because we have done it in every other war but this is a war

without end so i'm willing to do more than we have done in past wars as long as we don't lose sight of the fact we are at war. or your service and i look forward to working with u.s. resolve this very difficult problem. >> thank you mr. graham. senator schumer. >> thank you mr. chairman and thank you attorney general for your service. i just want to go over a little, i knew new york came up and senator durbin and senator feinstein said something and i agree with what she said from her experience as a mayor how difficult it would be handling a trial in a densely populated area. i know you said you haven't yet ruled it out. i hope you will. the overwhelming consensus in new york as you know is that it shouldn't be there and i just strongly urge you to make sure that doesn't happen. >> if i can enter a. what i said it has not been ruled out but we would take into

consideration obviously the expressions of the political leadership there as well as what we are to glean from the population making that determination so i just want to make sure that is applied to. >> i appreciate that. i'm going to move on here to other areas in new york which are having other kinds of problems. what we have found throughout the country i think, the gang intelligence centers, 2009 gang threat assessment found gangs are increasingly migrating from urban areas to suburban and even rural communities. unfortunately there are two communities in new york that are all too familiar with this problem. bret wood county in long island. the situation neubert has become shocking over the past year. there were reports of shootouts in the town streets, strings of robberies and gang assaults with machetes, homicides are up, grape syrup and attic total evidence suggests things in the area have started to target the

schools which is what gangs often due to recruit new members. newberg could very much benefit from increased federal help and resources. my question is, would you agree to go to newberg yourself or hand-- send a high-level official with expertise in this area to meet with local law enforcement and community leaders to work on decreasing this increasing gang presence? >> yes, i would agree to have somebody, if not myself, go to newberg for the purpose as you indicated but i also want to make clear that the united states attorney for the southern district of new york has been focusing attention on the problem in newberg and has been working with the local officials they are as well. and i think we will see shortly some of the results of that. >> i think at all levels, u.s. attorney obviously. our office has been in touch with his but we need some

washington presents as well so i appreciate your agreement to either you or a high official expert in this to come and help us. the second question re,eb,a@@@l it was as the example of what was happening with gangs. when you commit to having the appropriate agencies in your department examined the violence to determine whether increase federal resources or warranted? >> yes, we are committed to that. i think that you will see that we have been doing that. the problem that you know it in these two communities is a cute and is worthy of federal attention and federal assistance to the local authorities that are trying to do the job. but i think it needs help. >> i am not being critical. >> i am not either. >> i am just saying that they

need additional help. if the arrest of gang members' sense december, nine deaths in a small communities. by killing since this january in the surrounding after it -- area. the fbi recently debriefed my staff on brentwood. ased to hear the fbi and other fellow partners are working with law enforcement. they have met with the committee leaders. they are increasing resources significantly to fight gangs in the area. so, could you please elaborate on the work and involvement in the department in brentwood? could you speak what you are learning from those efforts and finally, given the gang threat assessment area of increasing gang migration to non-urban areas, would you work on or elaborate on what the department can do to increase resources to fight gangs in these nontraditional areas? >> i think the gang problem is a very serious one. we have seen gangs that were centered in one city become

national in their scope, national and their reach. we have seen as you indicated a migration of gang activity from cities to rural and to suburban areas and we in law enforcement have to adapt to that and break old models, old ways of thinking. gangs are not simply an urban phenomenon anymore. with regard to brentwood i know the fbi has given attention to that problem, as you have indicated. our hope is that there are cooperation with local authorities there if we can have a meaningful impact on the problem that has unfortunately afflicted the brentwood area. newberg and brentwood-- i am a new yorker-- are two wonderful communities and i think what we have seen their is unfortunately too typical of what we are seeing in increasing numbers. >> if you can let us know about brentwood.

>> there are operational concerns i have with regard to revealing too much other than to say the fbi is involved and i was a meaningful way with a brentwood problematic and i think this is something that will be our-- bear fruit. >> i would like to get a briefing on some of those. that would be very helpful. i don't have anymore questions so i yield back my time. >> thank you very much senator. senator kyl. >> i too am going to persevere on local issues mr. attorney general. i'm very disappointed the administration put a low priority on security in the southern border. violence there is escalating exponentially. thousands of people have been killed just south of the border by drug cartels. arizona last week, arizona buried a very fine citizen, a rancher in kochi county.

at the violence is spreading and yet, action that i have requested from you and from the secretary of homeland security is lacking. let me back up. i'm talking about operation streamline for which both the department of justice and the department of homeland security have the responsibility. last friday i visited the human sector of the border and heard the tremendous success that operation streamline has brought to that sector of the border. similar to the dell rio, texas sector. there is virtually no illegal immigration occurring there now. part of it is because of a dublin in some cases triple friends with adequate border patrol agents. part of it is a deterrent effect of operation shame on which puts even first offenders in jail for it least a couple of weeks and can be up to a month or even longer depending on how many times people across the border. this take some resources from the department of justice and i have asked you when i met with you before your nomination

hearing in 2009 about the funding for that. i discussed it with the hearing on january 15, 2009. we discussed this because the department of justice needs to provide the funding for certain elements of it. i ask you what resources were necessary for the marshals service, the courthouse renovations that may or may not be necessary, certain assertive cause, criminal clerks and those kinds of things, potentially additional judges, additional places and there appeared to be plenty of opportunities to rent detention places. places. all of us would fall under the department of justice jurisdiction. finally, i attach an amendment to the fiscal 2010 department of

homeland security appropriation bill that requires collaborative, the department of justice and department of homeland security to provide a report to a somewhat these costs are. that report was due from u.n. secretary napolitano on december 27 of last year. in a response to me in march and questions i submitted on december 9 of last year, secretary napolitano wrote the reporter is in the following stages of the review process and we get is that congress will receive it in the near future. still have not received a report. it is my understanding, and i would love for you to be able to verify that this isn't a trend, the department justice has not been fully cooperative in providing the information necessary to complete the report. the department of justice says the chief law enforcement agency in the country responsible for seeing that the laws are obeyed and that would assume also it self complying with laws which has not been done here. when can we expect to get the

report number one. secondly, do you support operation streamline or not? will you support funding and will you identify the things that would need to be done and we support that funding including by making requests for the next budget of the administration to provide for funding necessary to both expand operation streamline to other sectors including the tucson sector of the border or half of all the illegal immigration is now coming through the southern border? >> first i would express my condolences for the citizen in arizona. that happened while i was in arizona for u.s. attorneys conference. it is in fact a priority for this administration to ensure that our borders are secure and especially the border we are talking about, the southwest border. we have tried to work with her partner said dhs to be effective in that regard or go i will check and see what the status is of that report.

it is certainly not anything that has been brought to my attention either dhs or the department of justice that we have been dragging our feet in the creation of that report. there are a variety of mechanisms i think that we need to use in order to be effective at reducing the flow of illegal immigration and all that that implies for the collateral problem that it tends to breed and operation streamline the something you are correct, you and i have certainly discussed in the past. we will look at all of the possibilities. i will look at all of the possibilities and i will be supportive of, within the interagency process in dealing with the folks at omb, supportive of those things that i think have proven to be effective so that we can use our money efficiently and so that we can be responsive to the citizens along the southwest border. but i think we too often think

of that that is a local problem and it is not. it is a national problem. what happens along the southwest border has an impact in chicago at. >> could i just interrupt? i have got seven minutes, as you know. would you ask your staff to respond to my staff to set up even a telephone call to further discuss this especially after you have been able to verify the information provided, please? a totally different subject. once every 26 the house passed the intelligence authorization act. just before that is strip a provision that would criminal lies cruel and inhuman and degrading interrogations which was a staggering provision and ambiguity. a cia agent could've been punishable with a prison sentence for up to 15 years at the court concluded the agent blasphemed an individual's religious belief during the course of interrogation. does the administration support any such provision of the

criminal code? >> i'm not familiar with that provision. torture is certainly a violation of our law when it comes to cruel and inhumane and degrading treatment. i would want to look at that statute and see what the intention was in trying to criminalize that. >> would you respond to me in writing as to what the department's position on that would be because i suspect the issue will rise again. >> i will do that. >> i thank you very much. >> thank you very much senator kyl. senator cardin. >> thank you madam chair in general holder it is always a pleasure to have you before the committee. i want to follow-up on the points that many of my colleagues have raised with regard to guantánamo bay and the handling of the detainees that are they are. i recently was in guantánamo bay. i had a chance to visit there two weeks ago and this is my second visit in the type of

facility there is certainly one that is world class from the of view of how it treats detainees and the type of physical facilities, etc.. it was constructed in order to be able to obtain intelligence information from detainees. its purpose was also to detain individuals and third for pretrial purposes. the actionable intelligence information is no longer as relevant as it was when it was first constructed. the number of detainees is far below its capacity, and it has been used, has not been used very much for pretrial or trial basis. so, as a practical matter, as a budget issue and certainly from a symbol, guantánamo bay has to close.

we talked a little bit today about what do we do about the people that are there, how do we try them? do we use article iii courts? do we use the military commissions? i support what some of my colleagues that said and i want to give you maximum choice. i don't want to restrict the way to get the most effective results. i don't want to give detainees more rights than they should have and that is-- but i want to deal with those that we cannot release now. and we cannot try. you inherited this problem but it is an issue we have to deal with. on previous occasions he said there will be a process for review to make sure basic rights are afforded. how far along are we in making that type of review process public in order to get international recognition and hopefully support for how we are dealing with those that will continue to be detained without trial? >> that is something we are still working on.

i think there certainly needs to be a process by which an initial determination is made and that has irony occurred with the task force and the principles committee that voted on making the decision to detain the 48 people. obviously there is a right for them to challenge that determination in federal court, but as i have talked about with senator graham, there has to be i think, and the administration agrees with it, that there has to be some kind of ongoing review mechanism to put in place to be shulman-- continues to be a danger. it is something we are still working through an interagency and frankly working with senator graham as well. my hope would be that we would have something that we will be able to share and put in place more importantly in a relatively short period of time but this is something that has been focused on. >> let me just repeat the 9/11

commission's recommendation that the united states engage its friends and develop a common coalition approach to detention and the capture of terrorist. i guess my point is to internally developed a review process. we don't put some light on it. we don't engage in international community and if we don't engage the international community how we are going to deal with detainees in the future? this is not going to end anytime soon and we are apprehending people today and we still yet have a real should we have another geneva- tight convention to deal with this? i think we're looking forward to broader recommendations than trying to deal with this internally in this country. >> i believe that that review mechanism -- it must be done in as transparent way as we can.

there is a symbolic significance to this review process in the same way there is a symbolic send all notes -- symbolic significance to the existence of guantanamo. it would seem to me that again, taking into account a variety of thing, we want to make sure that this review process -- the existence of this review process is this is why we know. >> when should we expect some specifics as to how these procedures are being handled? i heard you say as soon as possible, but is getting late. >> it is a priority. we have not gotten to the point where we have made the determination. the task force has made its recommendation and agreed to abide by the principles that 48 people should be held in this way. before we were talking about

something that was a revocable. oretical and now it is real. now it is incumbent upon us to develop as quickly as we can what review mechanism is going to be and how transparent we can make that. >> sometime this year? >> i would certainly-- i would certainly think we could do that >> sometime this month? >> i am not sure we can do that. >> this is an issue that is difficult for us to defend when we don't have anything to defend. we don't have a policy to defend so i urge you to get that to us as quickly as possible. let me turn to a separate subject dealing with our juvenile justice system. there've there have been recent reports released showing that many of the individuals and are juvenile justice system have been victimized. i would hope that you are acting on that report and the department of justice has a significant responsibility in regards to how juveniles are handled in this country not only

from the federal point of view but in our states and i would think they should be a very high priority and i know our committee is looking at legislation here but we certainly welcome your thoughts as to what we should be doing in regards to improving our juvenile justice system. >> we would like to work with you in that regard. the reports that i've seen from a variety of contexts i think are very disturbing about how juveniles are treated, how they are victimized too often in facilities where frankly they should not he held. i think the purpose of the juvenile system is rehabilitation and if that is to occur we have to have the juvenile system that is capable of doing that so i look forward to working with you and trying to make our juvenile system what it can be an too frequently is. >> thank you. thank you madam chair. >> thank you senator cornyn. i would like to take this opportunity to put in the record national security division

statistics on unsealed international terrorism related convictions and also a letter dated february 18 from the department. senator cornyn. >> thank you madam chairman. good morning general and in the short time we have together i want to ask you a little bit about the financial crisis and what the department is doing to investigate, prosecute criminal activity they are. the violence in mexico and the work of the administration is doing to deal with that. and also what the administration is doing, what the department is doing with regard to health care fraud and i have some specific questions there. i suspect you will agree with me that criminal prosecution can be an effective deterrent to those who might be tempted to commit future crimes. >> it is the most effective deterrent to. >> i agree and that is why we

have seen the investigation of the financial collapse that reached with lehman brothers and aig and this massive infusion of taxpayer money to help prop up our financial system and to get the economy going again. and looking at financial regulatory reform coming out of the banking committee and the like. but one thing i have noticed that has been missing is show trials. we simply haven't had the people who were guilty of criminal conduct brought to justice and tried in public and punished for committing crimes that the american people are paying for. can you sort of summarize for me what is happening so the american people can have some confidence that this ultimate deterrent will be utilized where appropriate?

>> the president has created the financial fraud enforcement task force and that task force is looking at a variety of matters and a variety of matters that are under investigation. these are difficult cases to put together. they are complex by their nature. they are paper driven. they are not easy to put together. having said that, i think over time we will see more of these trials and i hope that they will have the deterrent effect that i think they are capable of having. having said that, there had been some successes. there have been indictments brought against stanford, obviously they made off case and some other high-profile matters, but i think the work i would focus on the work of the financial fraud is pretty comprehensive in its scope and involves not only federal prosecutors but state and local prosecutors as well, regulatory

agencies. i would think you would see coming out of the work of that task force the deterrent kinds of things that i think you and i both agree ultimately needs to be emphasized. >> who is coordinating for the executive branch, the investigations and prosecutions of those guilty for bringing our financial system into crisis 18 months ago? because of course you have all these, an alphabet soup of all these different federal agencies, the fdic, sec, obviously the fed and treasury. who was coordinating all that? is that the financial fraud enforcement task force or is it a higher level more specific to the financial crisis? >> it is coordinated by the justice department coordinated by me as the head of the financial brought enforcement task force. it is an unprecedented effort to take as you put it be agencies,

federal prosecutors together so we can be efficient in the investigation of these matters and ring to bear various expertise that exists in these different institutions and then bring to justice as quickly as possible the people who are responsible for the fraud that was perpetrated. >> general holder, turning now to health care fraud, some experts have estimated that as much a $60 billion in stolen from the medicare program each year and that is out of a 425 billion-dollar annual program. the health and human services, secretary sebelius, has told me in a letter in a response to an inquiry i made that there is much as a 10% wrongful payment rate for medicaid payments. 10 cents out of the dollar that could be applied to helping provide health care for low income individuals.

i know that we have talked about this before, but my experience is a state attorney general, and i would be surprised if yours is different, is that the pay and chase way of addressing medicare and medicaid fraud doesn't seem to work very well because you have limited resources. and the they detect and prevent approach has a lot to be commended in terms of a superior approach and i would just as for your comments on that and ask hopefully for your commitment to work with us to sort of change the paradigm to make it a fairer fight between the good guys and the bad guys. >> i would agree. we have worked i think in an unprecedented way. the justice department with hhs and trying to get at this problem. the amount of money that are essentially stolen from the american people are astronomical. we looked at last fiscal year, we had $1.9 billion in criminal and civil settlement collections

during fiscal year 2009. that is just a huge amount of money. we have put together this effort, health care fraud prevention and we have placed in seven cities and we are going to try to expand that to 13 this year that has been particularly useful in identifying places where you see this health care fraud. and i think we certainly need to detect it and hold people accountable where it occurs but i think you are right, that we have to come up with mechanisms that probably means auditors and people like that to prevent this from happening in the first place. the fraudsters, once they are detected what we have found is that they move from one city to another, so what we have to do is make it impossible for them to make money off these kinds of fraud. we have even seen instances where we are now a hearing drug dealers art getting out of

dealing drugs. into health care fraud because it is less dangerous and more lucrative than that cannot be allowed to stand. >> general holder i commend the efforts you've made and have described although we have to i'll admit it is just a tiny fraction of the money lost in health care fraud so i look forward to working with you to try to get into this detect and prevent mode rather than the pay and chase mode. let me just close on a question about the merida initiative and the violence in mexico. the chair and senator kyl and i represent border state and as you appropriately stated earlier , what is happening in mexico along the border affects our entire country. as we know there is a war basically going on now between the drug cartels and the mexican government. president calderon has been broadly taken on this challenge. we don't know how it is going to come out yet and that worries me a lot. we put a lot of money and a lot

of effort into the merida initiative and i know, i believe u.n. secretary clinton, secretary napolitano the director of national intelligence and others traveled to mexico city recently to visit with the mexican government. why is what we are doing now does not appear to be working in our u.s. concerned sim that this violence will not result in a peace treaty between the mexican government and the cartels. one is going to win and the other is going to lose and we don't know what that outcome will be right now. speeches for the record i did not accompany him the trip to mexico. i was before this committee to testify but it got postponed, so the deputy attorney general actually whetted my place. the work of our mexican counterparts has been courageous. they have put literally their lives on the line and one looks at the number of law enforcement

officers, soldiers, civilians who have, who have lost their lives in connection with this battle. it is indeed alarming. i spent over two hours in phoenix when i was there for u.s. attorney conference, speaking with my mexican counterparts, mexican attorney general about the progress we are making and i think progress has been made in mexico. it would be my hope that they will continue this effort. they need the help of the united states. the merida initiative is certainly one of the ways in which we can do that. i think we also need to focus on what they call the iron river and the flow of illegal weapons that go from the united states to mexico that i have been trained on. soldiers, innocent mexican citizens. we have used their dea, our fbi to find help in that regard. i think the battle is very much

in the balance and without continued american attention and continued american support i think we decrease the chances of the mexican government ultimately being successful. i'm confident president calderon is committed to this fight but i think we have to show ourselves to be good allies in that regard. >> i appreciate your efforts and look forward to continuing to work with you. i have other questions but i have to say that those in writing. i would know that the latest testament i saw it said 18,000 people have lost their lives as a result of this violence since 2006. i'm not sure the american people have digested that and comprehended the scope and the severity of the threat occurring right on our southern border, so we have a lot of work to do. thank you. >> thank you very much. i have on my list in the following order, senator klobuchar, senator coburn, senator kaufman, senator franken

you are on. >> thank you madam chairwoman. and general holder. i am very concerned about the potential merger of comcast and nbc, universal. i know that you are not allowed to discuss the specifics of the merger, but i want to delve into this a little bit with you today. i am concerned because they see the potential here for consolidation of media in a way that is to me very i worked at nbc for a long time and i want the best for nbc. jeff zucker came to me and said -- this is, ok.

he said that this is good for nbc and i said i know it is good for nbc. that is not the issue. is it good for the american people? and to main, what we have is a situation where if this goes through, are we going to have a situation where for rise and an at&t sees the need to buy networks and studios, and are we going to get all of our information -- because comcast is the largest cable provider and the third largest internet provider, will we see a situation where five companies are controlling all the information that we get? i think that is a very dangerous situation. are you familiar with the financial syndication loss in

the early 1990's? '90s? >> somewhat, yeah. >> you remember that a sickly the networks were prohibited from owning their own programs, and that was reversed and during the testimony that all the different networks-- sorry for the sound here. the different networks said why would we buy our own, favor our own programs. we are in the business-- we are in the business of getting ratings and we just buy the best programs. obviously what is turned out to be the case is that hasn't happened at all. they favor their own programs and that set the scene for disney buying abc and for paramount and viacom buying cbs and nbc urging with universal

and fox of course owns fox, so right now we have this incredible concentration and most of the shows are owned by whoever owns it. it has reduced competition for independent producers. now, what we are seeing with comcast is that comcast is yes, it is a vertical integration but it is also horizontal because they both have sports programming that anybody is carrying, the cable network has to carry, it would be really in bad shape if they don't. my question is, how does the department of justice determine whether a merger is horizontal or vertical orb does and how does that impact the department analysis of this merger?

>> well, i am somewhat restricted in what i can say about the investigation that is underway with regard to the comcast nbc merger, but i can assure you that the department is conducting a thorough investigation of that proposed transaction. and, if a determination were made that comcast acquisition of nbc would substantially impact competition in violation of the antitrust laws, we are committed to taking very serious enforcement action. i am not really at liberty to talk about much, because it is an ongoing investigation but one that i think in antitrust division that has shown itself to be aggressive appropriately aggressive headed by christine varney, they are looking at this transaction. ..

i want to make sure that merger caconditions would have enough teeth and long enough allied that they would really impose

real conditions to prevent the very thing that i fear. >> again, maybe i can take myself away from the nbc-comcast situation and simply say that when we look at these matters, we have a wide range of things that can be done to stop the merger itself to putting in place a variety of conditions that the parties have to agree to it in order to allow the merger to can see -- to proceed. i am just talking generally. i think that we can make those conditions ones that are enforceable, have a degree of transparency there, and obviously it involves having on the staff or having access to experts in the field certainly could antitrust lawyers, and

people who understand the particular field that we're trying to regulate. and i am confident that we have that capacity. >> i would hope that in my office and the folks over at doj who are looking at this can have an exchange of ideas on this. this is something that affects people in ways they do not understand. and including just your cable bill. cable bill so i want some kind of assurance i will be able to do that. >> i am a comcast subscriber and as you point out the fact it can have an impact on my cable bill is awakening -- >> i knew i could reach you somehow. [laughter] >> that's right more interested in my was going to this, but no, seriously, we will be glad -- >> being the riss culbert it is a pocket book i know that. >> we would be glad to listen to the concerns that you have and the observations that you have

given in the experience you have in the industry. >> thank you. madame chair. >> i see that senator klobuchar has returned. you are up next. >> thank you very much, madame chair and attorney general holder. for still want to commend the department of justice and specifically u.s. attorney's office in minnesota for the fine job they did on the case that is second to bernie madoff in terms of loss. and it really affected a lot of people in our state and a lot of nonprofit groups. he just received a 50 year sentence and so i wanted to come and tom jones, and all of the great experienced line attorneys that worked on that case. thank you. >> thanks for sending tight our way. >> the second thing i want to focus on is just what i consider the elephant in the room when it comes to crime affecting people's lives and that is crime on the internet, that is seiters security issues that go beyond individual people that are going to i think at some point there

will be a major problem for a country if we don't get on the front end of this and become a sophisticated or terrorist group that are trying to hurt our country or a bus off. and i was concerned on the microlevel for what affects people's mean individuals, the recent report from the inspector general suggested the doj should be doing more to combat identity theft the report stated doj needs to insure efforts to combat identity theft are coordinated and give sufficient priority. and it talked about the fact that there's not a person assigned with the responsibility to coordinate these efforts, and by some estimates identity theft is the fastest growing crime in america, 2010 estimate dictums of 25% from 8 million victims in 2005. we said the fbi stopped collecting data on identity theft. that was in this report. can you comment on the report and what your remedies will be.

>> i think you identified not only a problem that exists now but 1i think that if unchecked is potentially the crime of the future as many benefits of the internet brings to us we see criminals migrating to the internet and using the basis to do a whole variety of cybercrime is, everything from identity theft to retail prada. the department takes this very seriously. i think we would have a good section within the criminal division that i think is effective of these people are experts at this. i think we could use more resources. but it is something they certainly have the attention of the general who runs the division certainly of this attorney general. i think this is a area of crime we have to get ahead of. there are ways in which we can

do that and we are committed to doing it. >> the fbi staff collecting the data? >> i'm not familiar. sprick i just interviewed a piece on pure to pure marketing and the what is happening where people innocently go on a computer and maybe their kid has demoted a peer-to-peer program and all of their stuff is stolen and we had a landscape company in minnesota an employee goes home and does their work at home and the whole employees of all of their companies on the markets, everybody is getting identity theft problems. individuals who just happened to access. it's unbelievable to me. the 2,009 internet crime report by the complaint center which released in march, plans of internet fraud were up 25% over a year ago and the 200-dollar loss of more than doubled from

2008. where do you think we should go with this local law enforcement doesn't have the resources to get this out. a lot of is it is international. i think we should be dealing with other countries in the law enforcement. how to get a handle on this? >> i think you hit on something and this is not something that can be done on a local basis or national basis. one thing the internet allows is criminal and fall off places to almost be in your living room, bedroom, wherever you have your computer into the problem of identity theft and cybercrime required the cooperation not only like a concentrated effort here but also like-minded countries. i was in madrid last week talking to the justice minister's there and the whole question of cybercrime and how the internet is used.

one of the focus is we have on child pornography and other things as well as something that we are committed to working together to do. it means we have to reach out not only to our allies but also the other countries that have been frankly somewhat reluctant to be cooperative. we have to use i think diplomatic pressure to make them be partners in this effort. >> okay. i was on the sponsors on the act the president signed in to the law and you talked about the forming of the task force. can you talk about what has happened, what are the priorities and talk about how they have a place of the table. >> i think that it's been a good effort so far and i think that as time passes and not too long if it period of time the results will be manifest. but i think is important about this is that it involves -- this is in a federal effort this is

one that involves state and local counterparts and they are involved in various subcommittees and the of leadership roles throughout the task force and the needs that the identifier we try to deal with. the ideas that they have far i think excellent ones we tried to incorporate into the enforcement strategy. i really think this is a model for the way in which we can work with our state and local partners. they are not a junior partners they are equal partners in this effort. >> last, and i know senator cornyn brought this up the health care fraud issue and you and secretary sebelius announced we had discussions. i want to think i've been more shocked by that areas that have more disorganized of a system's like miami florida also tend to have more fraud because not only are there issues of the government launching the

60 billion-dollar loss a year but also that no one else is watching over each other like we might have in minnesota where we have a more systems and you can set up a storefront and the money isn't going somewhere else. could you talk about the progress i know you have the top spots including the one in florida that we just can't afford to have the money bleeding off into this medicare fraud any more and people always talk about it is a proper thing to talk about but if we don't get something done we will not help the american people. >> think the use of these task forces are getting something done. i think we have measurable results. we tried to identify places where we have the greatest instances of health care for what and these are the places where we put the task force. we have seven now i think we are going to 13 or 14 next yea