U.S. Department of the Treasury

(Archived Content)

Chairman Istook, Congressman Hoyer, and Members of the Subcommittee, I am privileged to be here today to introduce the President's FY 2003 budget request for the Department of the Treasury's law enforcement bureaus and offices. As you know, this is my first appearance before this distinguished panel, and it is indeed an honor to represent the more than 31,000 dedicated men and women who quietly and selflessly serve their country every day -- often at great personal peril and sacrifice.

Testifying with me this morning is Robert C. Bonner, also appearing before you today for the first time as Commissioner of the United States Customs Service (Customs). Brian L. Stafford, Director of the United States Secret Service (USSS), will testify this afternoon, followed by Bradley A. Buckles, Director of the Bureau of Alcohol, Tobacco and Firearms (ATF), tomorrow morning. Next Wednesday, Paul Hackenberry, Acting Director of the Federal Law Enforcement Training Center (FLETC), and James F. Sloan, Director of the Financial Crimes Enforcement Network (FinCEN), also will testify before your Subcommittee. As you know, FinCEN recently was authorized as a Bureau within Treasury Enforcement with enactment of the USA PATRIOT Act.

The President's FY 2003 budget seeks a program level of $5.247 billion and 31,847 FTEs for Treasury Enforcement. This level is significantly higher than the President's initial FY 2002 request largely due to additional resource needs associated with the horrific events of September 11 and the overall support of this Subcommittee. The request is 20 percent ($879 million) above the President's initial FY 2002 budget request for Treasury Enforcement and it provides for an increase of 2,403 FTEs for Treasury Enforcement. The 2,403 FTE increase includes 1,779 FTE for Customs; 381 FTE for the Secret Service; 124 FTE for ATF; 94 FTE for FLETC; and 25 FTE for FinCEN. Furthermore, the FY 2003 budget request indicates a staffing level of 48 FTE for the Office of Enforcement, with the provision of staffing up to 58 FTE within the Office's appropriated level - the same level for the third consecutive year.

In response to the tragic events of September 11, Congress provided essential emergency appropriations of $678.1 million to the Treasury enforcement bureaus and the Office of Foreign Assets Control (OFAC): $464.3 million to Customs; $141.5 million to the Secret Service; $32.9 million to ATF; $31.5 million to FLETC; $1.8 million to FinCEN; and $6.1 million to OFAC. Much of this emergency funding was for one-time, non-recurring costs. I am pleased to inform the Subcommittee that the recurring costs from the Terrorism Supplemental have been annualized and incorporated in the President's budget request.

When the President submitted his budget request on February 4, 2002, he indicated it "recognize[d] the new realities confronting our nation, and funds the war against terrorism and the defense of our homeland." To implement this objective, the President's FY 2003 request contains $159 million in new funding for Homeland Security program initiatives for Customs ($158 million) and FinCEN ($1 million). The FY 2003 budget request includes $29.2 million for other program initiatives -- $21.7 million for ATF and an additional $7.5 million for the Customs Automation Modernization programs. The budget request also includes $8 million in additional resources for Secret Service protection services to begin preparation for the 2004 Presidential campaign.

The FY 2003 Budget includes inflation type increases and Homeland Security annualization of $259.2 million. Although the immediate Office of Enforcement ($8.5 million) FY 2003 budget request is $231,000 more than the FY 2002 Financial Plan, it is $139,000 less than the ($8.6 million) FY 2002 Enacted. As I mentioned, the staffing level remains the same.

The Treasury Enforcement bureau heads will address their new initiatives and programs in greater detail as they appear before this Subcommittee. Therefore, I would like to take this opportunity to provide the Subcommittee with an overview of the newest challenges facing the men and women in Treasury law enforcement and the exemplary manner in which they have responded. That they have been able to do so effectively is, in large part, because of the support that this Subcommittee and the Congress have provided us both before and in the aftermath of September 11.

We have all been deeply affected by the horrific acts of that day. Four members of this Subcommittee are from States where the hijacked planes met their tragic fate. We at Treasury lost a respected member of our law enforcement family, Secret Service Master Special Officer Craig Miller, who perished in the World Trade Center. And of course, the New York offices of Customs, Secret Service, and ATF were destroyed

Combating terrorism has become the Nation's primary agenda. As you are aware, on September 24, 2001, President Bush stated, "We will direct every resource at our command to win the war against terrorists, every means of diplomacy, every tool of intelligence, every instrument of law enforcement, every financial influence. We will starve the terrorists of funding." The President tasked the Treasury Department to lead the nation's war against the financing of global terrorism, and under Secretary Paul O'Neill's leadership, we in Treasury Enforcement have devoted extensive resources and expertise to fulfill this mandate.

We have worked, and continue to work, in close coordination with the Justice Department and the Federal Bureau of Investigation (FBI). Specific examples of our close cooperation include joint activities in the September 11 investigations and on the Financial Review Group (FRG). In these investigations, Treasury has added its investigative expertise and access to unique databases to support the FBI's efforts.

Our war against terrorist financing extends to financial intermediaries and facilitators who infuse terrorist organizations with money, materiel, and support. We have come to clearly appreciate and understand that terrorism has been nourished by ample funding channeled from a plethora of sources, including banks, charities, hawalas, narcotics traffickers, and money launderers.

Countering Terrorist Financing

Since September 11, Treasury Enforcement, including its component bureaus, has launched a number of new initiatives to identify, disrupt, and dismantle terrorist financial networks both domestically and abroad. I am pleased to report to the Subcommittee this morning that Treasury has named 168 individuals and entities as financiers of terrorism, and has blocked over $34 million in assets. Our Coalition partners have blocked another $70 million. A portion of that amount has since been unblocked for the new Afghan Interim Authority to assist in its critical period of rebuilding. This is truly a global effort -- 196 nations have expressed support to disrupt terrorist financing and 149 nations can block terrorist assets.

We are grateful that you and your colleagues have worked closely with the Department of the Treasury, along with the Department of Justice and other agencies and departments, to make significant improvements in the laws that allow us to tackle the issue of terrorist financing in a more unified, aggressive manner. Of particular importance to our counter-terrorist efforts is the USA PATRIOT Act that clarifies the law enforcement and intelligence communities' authority to share financial information regarding terrorist investigations. These provisions are already being utilized and are bearing fruit in disrupting financing networks.

Office of Foreign Assets Control

The Office of Foreign Assets Control (OFAC), an office within Treasury Enforcement, plays a key role on the inter-agency working group, chaired by Treasury, that has been targeting and listing individuals and entities pursuant to Executive Order 13224 which President Bush signed on September 23, 2001. In this process, we have identified, among other entities, front companies, charities, banks, and a hawala conglomerate that served as the financial support networks for al-Qaeda and other global terrorist groups. We have shut down the operations of these entities in the United States and abroad. Foreign countries have been remarkably cooperative in this process.

OFAC has widely disseminated the names of new designated terrorists to the business and financial communities through websites, Fedwire Alerts, CHIPS system notices, communications to Federal and State regulators, and electronic broadcasts to 175 key industry groups. Information on terrorist designations is also distributed to the public by way of Customs, the Government Printing Office, and other agency networks.

As you recall, the Foreign Terrorist Asset Tracking Center (FTAT) was funded by Congress in the FY 2001 Appropriations Bill and was in the process of being organized and staffed when the September 11 attacks occurred. OFAC helped to accelerate the development of the interagency FTAT, which quickly began to serve as a primary analytical and strategic center for attacking the problem of terrorist financing. FTAT has served not only to provide essential analysis on particular targets and networks, but also has become an information nerve center where intelligence and law enforcement agencies can share and analyze information for a common purpose. This inter-agency concentration on hunting the sources of terrorist financing is unprecedented for the U.S. Government, and this collaborative effort will continue in FY 2003 to identify terrorist assets.

One of the higher profile results of FTAT analysis, in concert with OFAC, was the identification of Al-Barakaat as a major financial operation that supported terrorist organizations. The Al-Barakaat case is a good example of model coordination between the Treasury Department, the FBI, and other enforcement agencies both domestically and abroad.

Al-Barakaat is a Somali-based hawaladar operation, with locations in the United States and in 40 countries, that was used to finance and support terrorists around the world. The investigative work of the FBI, Customs, and IRS-Criminal Investigation, along with analysis by OFAC, FinCEN, and the intelligence community, identified Al-Barakaat as a major financial operation that was providing material, financial, and logistical support to Usama bin Laden and other terrorist groups.

Treasury, along with the Department of Justice, coordinated efforts to block assets and to take law enforcement actions against Al-Barakaat. On November 7, 2001, Federal agents executed search warrants in three cities across the country -- Boston, Columbus, and Alexandria -- and shut down eight Al-Barakaat offices across the U.S., including locations in the following cities:

• Boston, Massachusetts;
• Columbus, Ohio;
• Alexandria, Virginia;
• Seattle, Washington; and
• Minneapolis, Minnesota.

Hawala Some individuals may have used Al-Barakaat as a legitimate means to transfer value between individuals in different countries without passing through the formal international banking system. is a type of alternative remittance system that is common in many parts of the world, including the Middle East and Far East. A hawaladar is an entity that engages in hawala transactions.

As part of that action, OFAC was able to freeze approximately $1,100,000 domestically in Al-Barakaat-related funds. Treasury also worked closely with the United Arab Emirates (UAE) to enable the UAE to block Al-Barakaat's assets at its financial center of operations in Dubai. Disruptions to Al-Barakaat's cash flows, resulting from OFAC's designation actions and international cooperation, are estimated to be in excess of $65 million from the United States alone. In addition, the combined work of OFAC, Operation Green Quest, and law enforcement had led to additional leads in the Al-Barakaat investigation.

This is an example of what our combined efforts can accomplish when we join our resources and our expertise to fight the common scourge of terrorist financing.

Operation Green Quest

On October 25, 2001, Treasury created Operation Green Quest ("Green Quest"), a new multi-agency financial enforcement initiative designed "to augment existing counter-terrorist efforts by bringing the full scope of the government's financial expertise to bear against systems, individuals, and organizations that serve as sources of terrorist funding." This task force is led by the Customs Service and includes the Internal Revenue Service, the Secret Service, ATF, OFAC, FinCEN, the Postal Inspection Service, the FBI, the Department of Justice, and the Naval Criminal Investigative Service. Operation Green Quest also receives support from Interpol's National Central Bureau, based in Washington, D.C. Green Quest brings together the extensive financial expertise of the Treasury bureaus along with the exceptional experience of our partner agencies and departments to focus on terrorist financing.

Green Quest has complemented the work of OFAC and FTAT in identifying terrorist networks at home and abroad, and it has served as an investigative arm to aid in blocking actions. Green Quest's work has led to 11 arrests, 3 indictments, the seizure of nearly $4 million, and bulk cash seizures -- cash smuggling -- of over $9 million. Green Quest agents, along with those from the FBI and other government agencies, have traveled abroad to follow leads, exploit documents recovered, and to provide assistance to foreign governments. In this effort, Green Quest has made full use of its overseas Customs Attachés to investigate suspect networks and to gather information for its own use and the use of FTAT. The work of these financial experts is just starting as they have opened well over 200 terrorist financing investigations and are following leads on a daily basis. Green Quest's work, in combination with the work of OFAC, serves as a seminal part of our enforcement efforts.

International Cooperation

Our efforts will not have the greatest success if prosecuted unilaterally, and may ultimately fail if we cannot obtain the cooperation of other nations. To date, all but a handful of countries have expressed their support for the international fight against terrorist financing. Currently, 149 countries and jurisdictions around the world can block terrorist assets. The Office of Enforcement, in concert with other Federal agencies, is providing technical assistance to a number of countries to strengthen their capacity to freeze terrorist funds.

Daily, we are in contact with foreign financial officials and are engaged in bilateral and multilateral discussions regarding international cooperation and action against terrorist activities and financing.

The Office of Enforcement has also helped coordinate the deployment of financial "jump teams" consisting of experienced accountants, bank examiners, and other financial experts from OFAC, the Customs Service, IRS, FBI, FinCEN, and other agencies. These experts review business records and possible links to money associated with bin Laden's al-Qaeda network.

Treasury has engaged in numerous international fora, including the G-7, G-8, G-20, the Financial Action Task Force (FATF), the global network of Financial Intelligence Units (FIUs) of which FinCEN is a key member, and the international financial institutions to combat terrorist financing in a global, systematic way.

Through the leadership of the Treasury Department, the Financial Action Task Force convened an Extraordinary Plenary session in Washington, D.C. at the end of October 2001. At that meeting, FATF established eight Special Recommendations regarding terrorist financing and set forth an action plan for its members. It also invited non-members to engage in the self-assessment exercise based on the eight Special Recommendations. The U.S. strongly endorses the eight Special Recommendations, and believes that they represent an important step to establishing a global regime to cut terrorists off from the international financial system.

The U.S. has recently completed a self-assessment questionnaire against these Recommendations which is posted on the Treasury web site. This questionnaire demonstrates the U.S. commitment to the fight against terrorist financing. We regard ourselves to be in substantial compliance with the Recommendations, but we will of course continue to participate in the FATF process and assess any changes that might be needed to keep pace with international standards.

In early February, FATF held a special forum on terrorist financing which was attended by representatives from over 55 jurisdictions. The representatives to FTAF discussed implementing the eight Special Recommendations and identifying new ways to enhance worldwide cooperation in the fight against terrorist financing.

While countering terrorist financing is a Treasury Enforcement priority, we are also committed to preventing the delivery of terrorist acts to U.S. soil and against U.S. interests abroad, and to reducing violent crime here at home.

Preventing Terrorism and Reducing Violent Crime

Not only is the mission of Treasury law enforcement uniquely suited to combating terrorist financing, but we play a leading role in homeland security efforts -- from protecting the Nation's borders to protecting its leaders, to ensuring the integrity of our financial institutions and critical infrastructures. The President's budget request will ensure that Treasury bureaus can continue to effectively fulfill missions that are integral to protecting the homeland.

The U.S. Secret Service protects the Nation's top leaders, while leading the effort to ensure the safety of thousands of citizens participating in designated National Special Security Events (NSSEs) and combating financial fraud. We have seen the stellar work of the Secret Service in providing security for two recent NSSEs - the Super Bowl and the recently concluded Olympic Games in Salt Lake City. The complexity of these security events highlighted the special expertise and professionalism of the Secret Service. The dedicated men and women of the Secret Service are to be commended for their outstanding work at protecting thousands of spectators, employees, and athletes at these events. The President's budget request will allow the Secret Service to strengthen its efforts in an increasingly complex and threatening environment.

The U.S. Customs Service is the vanguard agency in protecting the country against weapons of mass destruction as it monitors travelers and cargo crossing the northern and southern borders and through the Nation's seaports and airports. Last November, Secretary O'Neill, Commissioner Bonner, and I met with our Canadian counterparts in Ottawa, Canada, to discuss cooperative efforts between the U.S. and Canada along our shared border. We have since been engaged in a number of new collaborative initiatives to strengthen security along our shared border, while working on ways to expedite the flow of trade. Commissioner Bonner and I also are working with the Office of Homeland Security to help implement the 30-point Action Plan announced in December by Governor Ridge and then Foreign Minister John Manley. The "Action Plan for Creating a Secure and Smart Border" has four pillars: 1) The secure flow of people; 2) The secure flow of goods; 3) Secure infrastructure; and 4) Coordination and information sharing. I can assure this Subcommittee today that the coordination and cooperation among Federal border agencies and their Canadian counterparts has never been stronger.

The Customs Service also played a key role in security for the Salt Lake City Olympic Games. The Customs Service role included providing air surveillance in restricted air space, ground support to the United States Secret Service, increased presence at the Northern Border, and screening general aviation aircraft and their passengers and pilots. A total of 500 Customs officers were committed to day-to-day oversight of the Games.

The President's request will ensure that the Bureau of Alcohol Tobacco and Firearms will be able to expand its training capacity at the Canine Training Facility in Front Royal, VA, increase ATF Canine Handler teams, and expand ATF's participation in critical Joint Terrorism Task Force activities. ATF has developed the most respected program in the world for detection of explosives and accelerants. This expertise is vital in our war on terrorism, in which explosives is the terrorists' weapon of choice.

ATF played a significant role in the security of the Winter Olympics. For several years, ATF has worked with its law enforcement and public safety partners on a comprehensive and integrated Olympic security plan. ATF committed over 330 special agents and support personnel to support security for the Olympic Games. ATF Special Agent Certified Explosive Specialists, Explosive Enforcement Officers, Explosive Detection Canines/Handlers, and National Response Team members were assigned to the Olympic Bomb Management Center. These experts were available to respond to any critical incident, explosive or suspected device at any of the venues. At these Olympic Games, unlike at the Atlanta Olympics, ATF had a new mobile crime laboratory with state of the art detection and analysis equipment on-site

The crime lab could identify explosives and other evidence within minutes, which would provide immediate leads to investigators on the ground.

The Federal Law Enforcement Training Center, which conducts the training for the vast majority of the Federal Government's law enforcement personnel, is projecting the greatest increase in training requirements in its history as it responds in full measure to the September 11 attacks. In the days following that attack, representatives of the U.S. Department of Transportation's Federal Air Marshal Division reached out to FLETC regarding increased training needs for the Federal Air Marshal Program (FAMs). These requests have resulted in an increase of over 20,000 student weeks of training. In October, the FLETC and the FAA developed a 5-week integrated basic training program and a 3-week agency specific basic follow-on training program. Moreover, in January, Transportation Security Administration (TSA) representatives met with FLETC staff to identify resources needed to develop a training curriculum for the TSA Security Screeners. FLETC subject matter experts then met with TSA and FAA representatives to develop that training curriculum. The result was a pilot TSA Basic Screeners training program conducted at FLETC in February. The TSA Management Team continues to meet with FLETC personnel to determine the extent to which the FLETC will be asked to further assist the TSA in training Federal Law Enforcement Officers/Agents within a very short time frame. The quality of training developed and delivered by FLETC will set the standard for our level of protection in the air for years to come.

The increased funding in the President's request for the Financial Crimes Enforcement Network will strengthen FinCEN's law enforcement investigative support efforts to enforce the Bank Secrecy Act, combat money laundering and other financial crimes, and implement the new responsibilities under the USA PATRIOT Act of 2001.

While the Office of the Under Secretary for Enforcement does not have direct oversight authority over IRS-Criminal Investigation, we do provide policy guidance for IRS-CI criminal investigators. These investigators offer a unique blend of accounting and enforcement expertise that is invaluable in perfecting complex financial investigations, including cases involving leaders and members of extremist groups who have committed tax, money laundering, or currency violations and individuals engaged in fundraising activities to support terrorism, especially if tax exempt organizations are being used. In the aftermath of September 11, IRS criminal investigators have played critical roles in the Strategic Information Operations Center; the Joint Terrorism Task Force; Operation Green Quest; the Office of Foreign Assets Control; the Anti-Terrorism Task Forces throughout the country; the High Intensity Money Laundering and Related Financial Crime Area Task Forces, and the Air Marshal Program.

Combating Money Laundering

The Office of Enforcement is currently developing the 2002 National Money Laundering Strategy, as well as overseeing the implementation of the 2001 Strategy. The main focus of the Strategy is on enforcement and investigation of money laundering enterprises and sophisticated networks.

This work has been significantly impacted by the passage of the USA PATRIOT Act. We have been working with the Treasury General Counsel to draft timely implementing regulations for the various provisions of the PATRIOT Act, such as the provision that terminated the relationship between U.S. financial institutions and shell banks.

We also are working on designing a system to measure the success of the Federal Government's efforts to counter money laundering. One aspect of this system will track the cost of laundering money in order to see whether our efforts are making it more expensive for criminals to launder money. In addition, we are developing a uniform system to monitor assets forfeited.

The Office of Enforcement is also overseeing the progress and development of the six High-Risk Financial Crime Area (HIFCA) Task Forces. The six HIFCAs are now focused on operational activities, in addition to gathering intelligence which is useful in money laundering investigations. These efforts are paying off. The New York HIFCA, which is part of the El Dorado Task Force, operating out of the U.S. Customs Service Special-Agent-in-Charge office in New York, recently announced the success of Operation Wire Cutter, a 2 1/2-year undercover operation targeting the largest Colombian Black Market Peso Exchange (BMPE) money brokers. These brokers are professional money launderers who sell their services to the Colombian drug cartels. On January 15, U.S. and Colombian officials arrested 37 people in the U.S. and Colombia and seized over $8 million in cash, over 800 pounds of cocaine, and a total of over 1,000 pounds of narcotics. One suspect tried to evade arrest in New York City by throwing a suitcase with $400,000 in cash out of his apartment window.

The Multinational Black Market Peso Exchange Experts Working Group (Colombia, Aruba, Panama, Venezuela, and the United States), led by the Office of Enforcement, has produced a report that recommends BMPE initiatives to participating governments to improve international cooperation in efforts to combat and dismantle the BMPE. We anticipate the publication of a joint statement in March embodying the conclusions and recommendations of this Working Group. We are also working closely with senior executives of major trade associations and corporations operating in the United States whose products are vulnerable to being involved in BMPE transactions.

Treasury Enforcement also works together with the Department of Justice's Bureau of Justice Assistance to oversee the Financial Crime-Free Communities Support Program (C-FIC) which awards anti-money laundering grants to State and local law enforcement agencies and prosecutors' offices through a competitive grant award program. Treasury has awarded approximately $4.2 million in grants to 17 recipients in the first 2 years of this program.

Countering Narcotics

The Office of Enforcement and its bureaus are decisively engaged as part of the Federal Government's effort in support of Plan Colombia, which is Colombian President Pastrana's comprehensive and balanced response to his nation's multiple challenges.

In addition to targeting the critical drug trafficking problem, the integrated strategy addresses human rights, democratization, judicial reform, social development, the economy, and the peace process. Colombia's lawlessness, corruption, and long internal conflict are exacerbated by the immense profits generated by the drug trade. Ninety percent of the cocaine supplied to the United States originates in or passes through Colombia, as does two-thirds of the heroin seized in this country. As a result, Colombia is the central focus of the United States' Western Hemisphere efforts to reduce the supply of illicit drugs.

Treasury's Plan Colombia support projects are part of the U.S. Government's programs aimed at strengthening the justice sector and financial infrastructure throughout Colombia. The emergency supplemental funding was provided to State under the provisions of the Foreign Assistance Act, with State transferring authority to Treasury and its components for our programs via specifically negotiated letters of agreement ("632 agreements"). However, sustainment of most Treasury Plan Colombia programs beyond amounts appropriated by the Terrorism Supplemental will rely on assistance provided by the State Department in 2002 and 2003.

We appreciate your support for Treasury's role in Plan Colombia. The Plan Colombia package passed by Congress included programs with $71.5 million in specific line item allocations for Treasury. These are:

• $68 million for Customs detection and monitoring aircraft radar upgrades
• $2 million for the Office of Foreign Assets Control
• $1 million for banking supervision assistance (Office of the Assistant Secretary for International Affairs/Office of Technical Assistance)
• $500,000 for tax revenue enhancement (OASIA/OTA).

In addition to these specific allocations for Treasury components, we have received $14.67 million for law enforcement programs from Justice accounts in the legislation, for a total of $86.17 million. We anticipate all Treasury programs should be completed by June 2003, approximately 24 months from the transfer of Plan Colombia spending authority from State to Treasury and its components in June of 2001.

Enforcing Tariff and Trade Laws

Our Office of Regulatory, Tariff, and Trade Enforcement performs a variety of important functions, including review of all regulations relating to enforcement of trade laws, participation in negotiations of international trade agreements, and management of the private sector Advisory Committee on the Commercial Operations of the Customs Service (COAC).

The COAC is a legislatively constituted advisory committee of 20 private sector members, which meets with Enforcement and Customs officials quarterly. Until September 11, their advice focused on trade facilitation. After September 11, I requested COAC's advice on border security and the role the private sector can play in increasing cargo security.

Utilization of the group's expertise provided a unique opportunity to examine synergies between enhanced cargo security and the private sector concern that the smooth flow of trade not be impeded due to increased security concerns. The committee produced an excellent report on January 25 with 60 recommendations. Many of these have already been implemented, and others are under close examination by Customs and Treasury staff. Three COAC members have already entered into agreements with Customs under the new Customs-Trade Partnership Against Terrorism program.

President's Management Agenda

The Treasury Department's FY 2003 budget recognizes the importance of achieving the President's Management Agenda. The Office of Enforcement is working with the law enforcement bureaus to support the Treasury Department's goal of becoming a results-driven organization, consistent with the President's five Presidential Management Initiatives:

1. 1. Strategic Management of Human Capital;
   2. Expanded Electronic Government;
   3. Improved Financial Performance;
   4. Budget and Performance Integration; and
   5. Competitive Sourcing.

Only through a balance of implementing all five Presidential Management Initiatives will the Treasury Department and its enforcement offices and bureaus be able to achieve world class performance and become a results-driven organization.

Enforcement Organization

The Office of the Under Secretary (Enforcement) has oversight responsibility for more than a third of all Federal criminal investigators, including roughly 32,000 personnel and a $5 billion operating budget. Moreover, Treasury Enforcement collects about $35 billion in revenues, When I assumed the duties of the Under Secretary, one of my first imperatives was to ensure that the Office had an efficient organization to be informed adequately about the day-to-day functions and operations of the Bureaus and Offices it supervises. This became even more critical in the post September 11 environment. I am working with the Department's leadership on a reorganization of the Office of Enforcement, within existing FTE ceilings, that I am convinced will enable the Office to achieve its mission more effectively and efficiently.

The reorganization strengthens Enforcement's ability to address critical budgetary, resource, and training needs for the immediate Office of the Under Secretary as well as the Enforcement Bureaus. Additionally, the new organization also provides needed emphasis in the major areas of Terrorism and Violent Crime and Money Laundering and Financial Crimes.

Strategic Goals and Performance Measures

Each year, the world becomes a more complex place.

The events of September 11 only emphasize this point. As a result, Treasury's law enforcement mission grows in complexity, scope, and impact. The Enforcement Bureaus must continue to meet these challenges as they perform their critical role in advancing America's law enforcement priorities. To provide a long range focus, the Office of Enforcement identified six strategic goals for FY 2000 - FY 2005:

• Combat money laundering and other financial crimes;
• Protect our nation's borders and major international transportation terminals from traffickers and smugglers of illicit drugs and weapons of mass destruction;
• Reduce violent crime and the threat of terrorism;
• Protect our nation's leaders and visiting dignitaries;
• Provide high quality training for law enforcement personnel; and
• Collect revenue due to the Federal government

In the aftermath of September 11, we plan to add an additional strategic goal and supporting objectives in the next revision of the Treasury Strategic Plan. This new goal will focus on "Targeting, disrupting and dismantling terrorist financing and terrorist financing organizations."

In addition, our law enforcement Bureaus support two other Treasury strategic goals through the following two strategic objectives:

• Protect the public and prevent consumer deception in specific regulated commodities and
• Facilitate legitimate trade, enhance access to foreign markets, and enforce trade agreements.

To ensure excellence in achieving these goals, and in keeping with the spirit of the Government Performance and Results Act, Treasury continues to engage in a strategic management process to enhance and improve the results we deliver to the American people. To that end, the Office of Enforcement is committed to setting long-term strategic and annual performance goals, managing our resources and investments to achieve those goals, instituting measures, and reporting annually on the results of our performance.

Overall, Treasury law enforcement bureaus' achievement against established performance targets continues to improve. For instance, in FY 1999, the law enforcement bureaus achieved 64 percent of the established performance targets. In FY 2000, 77 percent of the established targets were achieved, and in FY 2001, 79 percent of all performance targets were achieved. While not every goal was met, our results were significant.

For FY 2003, the Office of Enforcement and the Treasury law enforcement bureaus will continue to work hard to accomplish our defined strategic goals and objectives. We will also strive to achieve an even higher percentage of our established performance targets. Doing so will help to ensure excellence in protecting our borders and our nation's leaders, targeting terrorist financing, fighting terrorism and violent crime, combating money laundering and financial crimes, and training our law enforcement personnel for the challenges they will face in the future.

Thank you for the opportunity to provide an overview of the President's FY 2003 budget request and to highlight the efforts of the Office of Enforcement in support of the mission of Treasury's enforcement bureaus. I look forward to answering any questions you may have.