Good morning, Chairman Wolf, Congressman Serrano, and members of the Subcommittee. I appreciate your leadership and your support of the FBI, and I welcome the opportunity to discuss our Fiscal Year 2003 budget request. I am most appreciative of the support of the full Committee as well.

As you know, I have been the FBI Director for approximately six months. I took office on September 4 ready to address restructuring the FBI, confident that we could make immediate headway. Just seven days later, America experienced the worst act of terrorism in our history. These events gave an urgency to our plans for restructuring the organization and reshaping our mission that must never escape our full attention.

Concerning the September 11th attacks, we have made huge progress in unraveling how this meticulously crafted plot was planned overseas and how it unfolded from abroad. Throughout the past six months, I have been extremely proud of the way the men and women of the FBI have responded to this tragedy, doing whatever it takes to get the job done. At the same time, the attacks of September 11th have had a profound impact on the Bureau, underscoring the urgency for the need for change. In our view, everything must be, and is, "on the table." Not only must we change our structures, as you have already seen, but we are re-examining mission, jurisdictions, hiring, training, information infrastructure, information sharing, analytical capabilities, resource deployment and many other areas. Given the tragic events of September 11th, a different FBI is needed with a new focus, new tools and new resources, and, in some instances, employees with new or different skill sets. We have to do more to fix what is broken and to reshape what no longer fits after the events of September 11th.

This budget request and the significant supplemental funding which this committee has provided speaks volumes to your commitment to supporting the FBI's response to the events of September 11th, the Anthrax incidents which followed as well as all of the other important work that we do every day. The nation should be proud of your continuing support for the FBI in our efforts to strengthen our national security and we are humbled by the support which you continue to show us. The resources which you have provided and the foresight which you have shown have been instrumental in our successful investigation into the attacks of September 11 and more importantly our efforts to ensure that such an attack never occurs again. We thank this committee for its continuing support of the FBI's mission which has become more critical in the current dangerous times in which we live. The FY 2002 supplemental and this budget request will build upon this and seek to enhance our ability to safeguard the United States as well as our citizens around the world.

Refocusing and Reorganizing the FBI

Even without the occurrence of September 11th, a candid assessment of where we are points to the need for some significant improvements. A series of events pre-dating September 11th highlight vulnerabilities and shortcomings in our infrastructure and our workforce. In some areas, despite robust Congressional support, we have fallen behind where we should be given our mission, and in other areas, we simply must improve by doing things differently, in many cases changing our culture along the way.

Let me give you some examples. It is no secret that our information infrastructure is far behind current technology. You have provided us substantial funding and we are deploying new hardware and networks. We still have a long way to go on the application side. Having to so dramatically replace the entire infrastructure rather than make incremental improvements as is the common private sector approach has made the replacement process more difficult. Without question, we all believe this is the number one problem confronting the FBI today, recognize that for a number of reasons the situation developed over time, and know that in the future a better approach to technology upgrades must be utilized.

Just as we change our technology, we must change our workforce. You have given us the opportunity and we have begun to do so. Over the years the FBI tended to hire generalists, operating within a culture that most jobs were best done by Agents. Former Director Freeh began changing that notion. We intend to accelerate this approach, capitalizing on the opportunities created by hiring new employees and replacing those who retire. We need subject matter experts in areas like computers, foreign languages, internal security, area studies, engineering, records and the like. We have not adequately recruited and hired towards such a specialized workforce, or matched very well who comes in the door with the skill sets we not only need now but also what we will need two, three or five years out.

There also has been much in the media about coordination with state and local authorities, what is commonly referred to as information sharing. After a series of meetings with local law enforcement officials, it became clear that solid, personal relationships alone were not addressing the basic information needs of our local counterparts. They have our attention and, although we are doing much better, it is clear to me that we have a long way to go. We have to work through legal, technical and classification issues but we also have to work through getting the FBI to fully appreciate how important this is and how much we can benefit if we succeed. I have made a number of structural and personnel changes squarely aimed at doing better in this area and I appreciate the support I am getting from the major law enforcement organizations as we work through this.

These kinds of issues require a different way of thinking, a more collaborative FBI, constructed and trained differently from where we are today.

Having said that, I have often stated that the Bureau's greatest asset is its people. I thought that before becoming Director and am more convinced now. They are dedicated professionals. These and other issues have demanded our full and undivided attention and have added to the broader mission and management challenges facing the FBI. It is urgent that we make changes quickly and judiciously. We must move forward with a comprehensive plan to strengthen our role in national security, to give employees the tools and training to do their jobs more effectively, and to improve the two-way flow of information and expertise with our many public and private sector partners.

To move forward on these issues, in December, with the approval of the Attorney General and subsequently of Congress, we took a significant step in the change process with a major reorganization of the FBI. We appreciate your support and input. The first phase of our comprehensive plan created a Headquarters structure that will help our executive team lead and manage the Bureau more effectively. As you know, it establishes four new Executive Assistant Directors who report directly to me and oversee key areas of our work: Counterterrorism and Counterintelligence; Criminal Investigations; Law Enforcement Services; and Administration. This structure reduces the span of control of the former Deputy Director position, a management concern raised here on Capitol Hill and in internal and external reviews of the Bureau. These changes also increase accountability and strengthen executive-level management oversight of day-to-day operations, and permit a greater focus on strategic management issues.

The reorganization addresses some of the other significant management issues and concerns raised by members of Congress and others in recent months as well. It is consistent with substantive comments, directions, and guidance culled from Congressional Appropriations and Intelligence Committees reports as well as various Administration and Congressionally-directed reports published since 1996. The reorganization creates a stand-alone Security Division, headed by an experienced professional from the CIA, to raise our security practices and standards to the level we need, to fix what the Hanssen investigation made painfully obvious. It also includes an Office of Records Management, led by an experienced records expert, to help us modernize our record-keeping systems, policies, and processes to prevent another OKBOMB document situation. The reorganization elevated the position of Chief Technology Officer (CTO) so that the position reports directly to me. It establishes an Office of Law Enforcement Coordination that will not only improve relationships and information sharing with state and local police professionals and others, but will also help the FBI tap into the strengths and capabilities of our partners. We are working now to identify an experienced, qualified executive from state or local law enforcement to head this new office, someone who will help us understand how best to integrate our state and local counterparts in the war against terrorism and into major investigations.

At the same time, the ongoing reorganization responds directly to the events of September 11th and the new environment by consolidating FBI oversight over the Counterterrorism and Counterintelligence programs. The new structure creates the Office of Intelligence, which will focus on building a strategic analysis capability and improving our capacity to gather, analyze, and share critical national security information. It also creates a new Cyber-Crime Division dedicated to preventing and responding to high tech and computer crimes, which terrorists around the world are increasingly exploiting to attack America and its allies. Our old structure was fractured and not well coordinated. This change will bring together various cyber initiatives and programs under one umbrella, so we are better focused, organized, and coordinated in working with our public and private sector partners to protect our nation's growing digital marketplace and electronic infrastructure.

We have now turned to the second phase of our reorganization. As part of this phase, we are developing a comprehensive strategy to permanently shift resources to the fight against terrorism and in support of a massive prevention effort. We hope to present this strategy to the Department, Administration, and the Congress soon. We are working to identify areas where we can redirect resources without compromising our investigative priorities or our partnerships with law enforcement and other government agencies. Given the gravity of the current terrorist threat to the United States, the FBI must make hard decisions to focus its available energies and resources on preventing additional terrorist acts and protecting our nation's security. At the same time, I want to assure you that we will continue to pursue and combat international and national organized crime groups and enterprises, civil rights violations, major white-collar crime, and serious violent crime consistent with available resources and the capabilities of our federal, state, and local partners. We want our mission driven by the simple principle that whatever we do, we will devote the resources and expertise to be the best in the world. Otherwise, we are simply shortchanging ourselves and the American people. We are revising our strategic plan accordingly.

We believe the changes to date and those that will be proposed in the near future are vital to ensuring that the FBI effectively satisfies its national security and criminal investigative missions. They represent our first steps in the difficult process of change. Again, I have the greatest respect for the men and women of the FBI, as I know you do. I have found their diverse talents and their dedication to serving this nation to be remarkable.

In addition, over the next few weeks several reviews and inquiries will conclude. These include the ongoing management study conducted under the direction of the Attorney General, the Inspector General review of the OKBOMB documents situation, and the post-Hanssen Webster review, among other reports. The issues inherent in each of these reviews are so urgent and critical that we have not waited until their conclusions to begin fixing our vulnerabilities. We simply cannot afford another 15-year Hanssen episode, or a records situation like we had in OKBOMB. In all of these instances we are making significant changes. Here are a few examples:

OKBOMB Records Issues (OIG Study)

Records management is at the heart of the FBI's integrity as a law enforcement organization. We must be able to eliminate any doubt about the accuracy, completeness and fairness of our investigations. As was made abundantly clear in the days preceding the execution of Oklahoma City bomber Timothy McVeigh, the ability to maintain, access and retrieve documents is critical to our mission and equally critical to our ability to protect the rights of those charged with crimes. It is also fundamental to a robust analytical capacity, something we are rapidly enhancing.

" Congress has approved $237 Million in the Counterterrorism Supplemental for the FBI to upgrade technologies and infrastructure for organizing, accessing and analyzing information throughout the FBI. Improvements which are currently underway include:

" replacing the antiquated Automated Case System in favor of a multimedia and near paperless "virtual case file" with significant improvements in capabilities that greatly reduce or eliminate the possibility that future documents will be misfiled, lost or otherwise failed to be produced.

" modernization of the FBI's computer network to provide a "data warehousing" collaborative environment instead of application "stove pipes." The creation of "data warehouses" provides easier and more robust access to and sharing of information.

" contract vendor support to allow commercial software and professional scanning, indexing and storage of documents to move us rapidly out of the paper environment that was so vexing in the OKBOMB situation.

" Every employee at the FBI attended a full day of "Back to Basics" training which focused extensively on proper document production, retrieval, and management.

" We created the Office of Records Management to focus much needed attention on the need to ensure that the physical and electronic actions and authorizations are identified, recorded and maintained within the FBI's systems.

" Most recently, we hired Mr. William Hooton, a world class records manager, to head up this new Office. We have charged Mr. Hooton with restructuring and modernizing our enterprise-wide records management system. We have also set as a top priority the development of a comprehensive policy and procedures guide for records management.

Hanssen Espionage Case (Webster Review):

The human factor can never be eliminated in the intelligence business. What can be done and what we are doing is making improvements that are closing significant gaps in our internal security of information, putting in place mechanisms to permit detection and investigation of anomalies much, much sooner; and educate our workforce as we change to a culture that supports security awareness. As part of this process, we:

" Conducted an internal evaluation of the FBI's security practices and began fixing what was broken.

" Implemented interim steps to improve security.

" An expanded polygraph program to include all employees with access to highly sensitive information or who are heading to or returning from a permanent overseas assignment.

" Routine audits and verification of a "need to know" for employees accessing the most sensitive cases and programs.

" Enhanced analytical scrutiny of background re-investigations routinely done for employees with access to sensitive information.

" Direct and personal involvement of Special Agents in Charge (SACs) in security issues at the field level, ensuring that field security personnel have direct access to executive management.

" We recently created the Security Division and appointed Mr. Ken Senser, an experienced security professional from the CIA, to lead the transformation of the Security Program and to manage the new Division at the Assistant Director level. For the first time in FBI history, the Security program has the level of visibility it needs.

" We established an Information Assurance Program, modeled on the best practices of the Intelligence Community, to ensure the protection of FBI information systems.

" Finally, under Mr. Senser's direction, a comprehensive security action plan has been established. Prioritized initiatives, falling within 15 separate categories, have been identified where we need to close security gaps.

Management Review of the FBI:

The DOJ's Strategic Management Council directed a comprehensive review of four functional areas of the FBI: organizational structure/mission; information technology policies and practices; personnel policies and procedures; and crisis management procedures. When the report is final, we expect it will confirm many of the areas of improvement which we have already identified and validate actions which we have already taken.

" We addressed the issue of span of control at the Executive level by creating a management team of four Executive Assistant Directors.

" We have spent considerable effort on mission refocusing, which we will propose to you as Phase II of the reorganization and articulate in a revised strategic plan.

" We have two separate studies underway examining the FBI's field office organizational structure.

" We have engaged a consultant to conduct a top to bottom review of FBI workforce capabilities and to make recommendations on workforce restructuring.

" As I mentioned earlier, we place high value in leadership. A course in Leadership Training has been developed for Bureau managers.

" As I also mentioned earlier, I have elevated the position of CTO so that the position reports directly to me.

" We have charged the CTO with developing a formal information technology investment management process.

Let me now say a word about leadership before I address our 2003 Budget Request. There are certain simple principles about leadership that I believe all of our employees must understand. Things like working harder than your employees, never asking them to do what you are unwilling to do, living and breathing the highest ethical standards, candidly admitting and correcting mistakes and not being boastful of accomplishments. We need to refocus our training and our attitude to embody these principles. We want our employees to want to be leaders and we want them to understand both how to lead and that leadership does not come without sacrifice. Everything we do will be remolded towards that end, especially hiring and training at every level. We believe we will be a stronger, more accountable FBI as a result.

Overview of FY 2003 Budget Request

For FY 2003, the FBI requests a total of $4,203,837,000 and 26,215 permanent positions (10,752 agents) and 25,464 work years for its Salaries and Expenses ($4,202,587,000) and Construction ($1,250,000) appropriations. These amounts exclude $120,075,000 in Federal Retiree costs. For FBI Salaries and Expenses, this amount includes funding for necessary adjustments to base, such as the proposed 2.6 percent pay raise for FY 2003, higher Federal Employee health insurance costs, additional General Services Administration (GSA) rent costs, increased security for stand alone office space, and annualization of prior year increases. The amount also includes $237,900,000 to continue activities funded in the FY 2002 Counterterrorism Supplemental and proposes a net total of $446,281,000 for program increases in support of the war against terrorism, for additional information technology upgrades, and for security.

At this point, I would like to describe in more detail the three budget initiatives proposed for FY 2003: Counterterrorism, Information Technology, and Security.

Counterterrorism Initiative

The FBI's top priority is the prevention of any further terrorist acts in the United States or against U.S. citizens and interests abroad. With the support of this Subcommittee, the FBI was provided with a significant increase in investigative personnel for its counterterrorism program in FY 2002. We are now in the process of hiring and deploying these positions. However, an effective investigative capacity not only involves putting Agents on the streets, it also requires strong programs and resources to support these Agents. These resources include surveillance operations; technically proficient, well-equipped, and well-trained personnel; effective response capabilities; and the ability to combat terrorism in the cyber arena. Our budget request for an additional 673 positions (181 agents) and $225,002,000 addresses these specific areas.

National Infrastructure Protection Field Program (NIPC). America's electronic and physical infrastructures form the foundation of our nation's commerce, communications, transportation, water and power generation, and national security. The potential for disruption and damage to our systems and our country is high, and the cost of attack is relatively low. As a result, these infrastructures represent attractive targets for terrorists. The National Infrastructure Protection Center (NIPC) is a multi-agency initiative established by the President in 1998 to protect critical infrastructures and respond to attacks that do occur. The FBI needs additional funds to support the work of the Agents who participate in the NIPC programs and the FBI's field offices.

The FY 2003 budget request builds on the resources provided in FY 2002 and includes 138 new positions (81 agents) and $21,025,000. These resources will improve field office capacity to address computer intrusions and threats in a more timely matter. More importantly, they will improve our capability to identify and arrest individuals engaged in these crimes. Emphasis will be placed on enhancing the investigative capacity of the 28 field offices that will not have a NIPC squad by the end of FY 2002. The enhancement includes $6,000,000 in non-personnel funding to give these investigators the technical equipment required to conduct computer intrusion investigations.

Surveillance Support. The FY 2003 request includes $44,893,000. These funds will enable us to enhance investigative activities that focus on identifying, preventing, and defeating intelligence operations conducted by foreign powers within the United States or against United States interests abroad which pose a threat to national security. Also, the request will provide the resources for the FBI to address increased costs and operational support necessary to conduct surveillance activities.

Tactical Operations. The FBI requests $12,162,000 to enhance the FBI's ability to respond to increasing physical search requests and to address changes in technology through research, development, and engineering.

Technically Trained Agent Program (TTAs). The widespread use of digital telecommunications technologies and the incorporation of privacy features/capabilities through the use of cryptography pose a serious technical challenge, to the FBI. Terrorists are using this technology to shroud their operation in secrecy and to thwart the efforts of law enforcement. The FY 2003 request of $10,027,000 includes personnel funding for new TTAs to support the administration of all monitoring functions and to provide necessary equipment for existing TTAs as well as to support training initiatives to ensure TTAs have the technical skills to implement electronic surveillance and to respond quickly and effectively to emerging technologies.

Crisis Response. The FBI requests an increase of 62 positions (25 agents) and $28,313,000 to enhance existing crisis response capabilities. These resources would provide the personnel, training, supplies, and equipment to enable the FBI to quickly respond to crisis situations, especially those involving the use of hazardous materials. Funding will:

" Expand the number of hazardous materials response teams from 17 to 32. These teams are located in various field offices and are responsible for reacting to crime scenes involving Weapons of Mass Destruction;

" Enhance the FBI's capabilities in the areas of crime scene processing, evidence collection, training, and research;

" Improve crisis response communications capabilities, enabling the FBI to respond to multiple crisis sites simultaneously; and

" Provide the necessary personnel, equipment, and other support to establish and maintain a logistical structure necessary for rapid deployments to incidents anywhere in the world.

Federal Convicted Offender Program. The DNA Analysis Backlog Elimination Act of 2000 authorizes the FBI to collect DNA samples from individuals convicted of qualifying offenses. The USA Patriot Act of 2001 expands the list of qualifying offenses to include terrorism-related offenses and crimes of violence. The FBI requests 5 positions and $867,000 to manage and type federal convicted offender samples, purchase consumable equipment, and fund miscellaneous expenses related to this effort.

Aviation. The FBI's Aviation Program provides key investigative resources to all 56 FBI field offices. These services include aerial surveillance, photography and transportation of critical personnel, equipment, and evidence in crisis situations. Approximately 88 percent of our aviation assets are dedicated to surveillance. Since the terrorist attacks of September 11, there has been a 60 percent increase in requests for aircraft surveillance flights. In order to maintain and enhance this surveillance capability, the FBI is requesting $46,082,000. The enhancement would fund additional pilots and mechanics, two Helicopters, a surveillance aircraft, and maintenance, equipment, and other items needed in the aviation program.

Intelligence Production. Currently, the number of analysts available to support the FBI's requirements in the Counterterrorism Program is not sufficient to provide in-depth analytical coverage. One of the major challenges facing the FBI is keeping pace with the explosion and complexity of information derived from multi-dimensional terrorist activities. Without an investment in personnel, analysis will continue to lag significantly behind the rapid flow of information. For FY 2003, the FBI is requesting 110 new analytical positions and $7,731,000 to address tactical and strategic intelligence gaps.

Electronic Surveillance Data Management System (EDMS). The FBI requests $11,328,000 to enable the automated sharing of collected electronic surveillance (ELSUR) intelligence or evidentiary material. The EDMS project would allow authorized agents, analysts, and translators to share and analyze data within and among field offices. Analytical tools planned for EDMS would improve information and intelligence sharing capabilities and permit FBI personnel to act on lawfully collected electronic surveillance information on a more timely basis. There are two separate systems, one for national security and one for criminal investigations.

Data Collection Facility. The FBI's request also includes 2 positions and $5,648,000 for contractor services and equipment to support the classified operations of a data collection facility.

TIPS Hotline. The FBI requests 10 agent positions and $1,507,000 to continue support for the FBI's toll free line for collecting tips from the public on suspected terrorist activity. The requested funding would provide for the telecommunications costs and agents needed to gather caller information on suspected terrorist activity, which can then be shared with those responsible for investigating the reported information.

Strategic Information and Operations Center (SIOC). SIOC is a 40,000 square foot state-of-the-art facility within FBI Headquarters that serves as an information and operations focal point for the FBI and the nerve center during times of crisis. It supports the FBI 24 hours a day, 365 days a year, facilitating the flow of information throughout the Bureau on operational and informational matters. SIOC has played a prominent role in the investigation of the September 11th attacks, facilitating the flow of information among law enforcement, the intelligence community, and other government agencies. For FY 2003, the FBI requests $1,503,000 in recurring Operations and Maintenance funding for the SIOC. Resources would be used for replacement of technical equipment, maintenance contracts, technical contractor support, and training. This funding is essential to protect the FBI's multi-million dollar investment in the establishment of the SIOC.

New York Operations Center Upgrades. Like the SIOC, the New York Operations Center (NYOC) is an important component of our communications and investigation management capabilities. Located in the FBI's largest field office, the NYOC must be able to address large workload demands and to communicate with local law enforcement within the New York area in a time of crisis or during a major investigation. The FBI requests $4,903,000 to expand and update the current operations center in the New York field office (NYFO), and procure technical enhancements in conjunction with the planned remodeling and relocation of the facility to alternate space within the NYFO.

Field Electronic Technician (ET) Program. FBI ETs have overall technical responsibility for the FBI's nationwide radio system. ETs ensure that coded and secure communications are available to more than 10,000 FBI Agents and an estimated additional 2,000 radio users from other federal, state, and local agencies. These agencies depend upon the FBI's radio system for communication support, especially during critical incidents which can quickly overwhelm commercial telecommunications systems and severely limit access. The FBI's wireless communications systems are often the only means of law enforcement communications and interagency contact.

For FY 2003, the FBI requests 62 positions and $10,064,000 for the ET Program. The request includes 60 new field ETs and replacement equipment for existing ETs to support heightened counterterrorism activities, to address additional workload associated with the implementation of the Trilogy initiative, and to provide essential electronic security services to FBI field offices. Our request also includes 2 positions and non-personnel funding to enable the ET training program to keep up with training demands, which have grown substantially with technological advances in the FBI's wireless, networking, video, controlled access, and intrusion detection systems.

Joint Terrorism Task Forces. A cornerstone of the FBI's efforts to build cooperation with our law enforcement partners are the Joint Terrorism Task Forces (JTTFs). There are currently 44 JTTFs authorized. Approximately 600 full-time and part-time officers from other federal, state, and local agencies are assigned to these task forces. FBI Agents and their counterparts across government work shoulder-to-shoulder in these task forces, sharing information and expertise, jointly investigating acts of terrorism. For FY 2003, the FBI is requesting $15,677,000 to expand the JTTF program to all 56 FBI field offices. The requested funding is required for rental of space, state and local overtime, supplies, and other costs.

Hazardous Devices School. The Hazardous Devices School (HDS), located at Redstone Arsenal in Huntsville, Alabama, and managed by the FBI's Bomb Data Center, is the only formal domestic bomb training school for state and local law enforcement. The HDS teaches and prepares public safety bomb technicians to locate, identify, render safe, and dispose of improvised hazardous devices, including those containing explosives, incendiary materials, and materials classified as weapons of mass destruction. This program also includes training in the use of specialized equipment and protective clothing needed for the safe disposal of explosive materials.

With the support of this committee, during FY 2002, the FBI received a transfer of funds from the Department of Defense to improve the training capacity of the HDS. For FY 2003, the FBI requests $3,272,000 to provide additional courses for bomb technicians, augment student travel funding, and provide necessary operations and maintenance funding associated with existing facilities and the construction of practical training villages underway in 2002.

Information Technology Initiative

Improving the FBI's information technology infrastructure and applying information technology to assist investigators, analysts, and other employees is critical to the success of the FBI in all of its mission areas. The value of information technology has been evident in the past six months with the PENTTBOM and anthrax investigations. Information technology has been used to manage and exploit the burgeoning number of documents collected during these investigations.

The Trilogy program, which focuses on the FBI's core information technology infrastructure and five key investigative applications, is being accelerated. The infrastructure platform being built under Trilogy will enable improvements to other investigative and administrative applications that must also be modernized. For FY 2003, the FBI requests an additional 6 positions and $145,971,000 for critical information technology projects including field contractor support funding for Trilogy.

Trilogy Contract Support. The FBI requests $8,000,000 to continue the services of 44 contract computer specialists acquired in FY 2002 to supplement FBI personnel in performing necessary maintenance on the Trilogy network, as well as legacy enterprise systems and applications.

Investigative Data Warehousing. The Trilogy project will consolidate data from the FBI's five main investigative applications to reduce "stovepiping," which occurs when the separate databases are not readily accessible to each other. In FY 2003, the FBI requests $50,300,000 to convert data from the remaining FBI systems and applications into a single Virtual Knowledge Database.

Collaborative Capabilities. The FBI requests $11,000,000 to develop new-generation Trusted Guards (computer hardware and software which enables the FBI to access and share data with other law enforcement and the intelligence community while maintaining network security) and to use other modern information technologies to provide direct, secure access to external databases, as well as to establish secure e-mail capabilities among the FBI and other members of the law enforcement, counterintelligence, and counterterrorism communities. Funding includes resources to develop Trusted Guards, perform certification and accreditation, procure equipment and deploy capabilities.

FBI Headquarters Continuity of Operations. The FBI requests $10,000,000 to upgrade backup operations centers in the event the Bureau's primary data centers are rendered inoperable due to disaster or attack. This funding would allow the FBI to furnish disaster backup facilities with existing Trusted Guards and analytical servers; to provide additional network bandwidth required for the backup facilities; to enable facilities modifications and equipment at an alternate facility; and to establish an offsite SIOC capacity.

Digital Storage and Retrieval. An increase of $10,000,000 is requested to scan and digitally store documents related to terrorist groups and organizations.

Legal Attache/International Information Technology Infrastructure. FBI legal attache offices in foreign countries require information technology infrastructure upgrades to accommodate increased network traffic and to enable the timely transmission of investigative information, such as photographs and digital images, back to the domestic offices. Funding requested would allow the FBI to upgrade communications circuits; provide equipment for multimedia data processing; provide Internet connectivity; fly-away communications packages, electronic translation capabilities; and upgrade portable computing capabilities. These upgrades will place FBI international offices at the same information technology infrastructure level as domestic field offices. The FBI requests an increase of $21,000,000 to support legal attache information technology upgrades.

Secure Video Conferencing/Internet Connectivity. More and more domestic investigations, even smaller ones, have leads which cover multiple field offices. The FBI is requesting $3,080,000 to deploy secure video teleconferencing equipment throughout the top 100 resident agencies so investigators from different offices can discuss leads safely, securely, and effectively. The new equipment will be compatible with the Trilogy network. To encourage greater interaction between field offices and enable field offices to use the Internet, the FBI requests $3,620,000 to expand high-speed Internet access to FBI locations and to provide resources for management, auditing, and backup capabilities.

Workforce Restructuring and Administrative Support Systems. For FY 2003, the FBI requests $16,527,000 to conduct and implement changes from a workforce restructuring study and replace the FBI's current, antiquated, and costly Financial and Human Resource Management Systems.

Analytical Tools. To help agents and analysts involved in a variety of investigative activities identify patterns and recognize relationships, the FBI requests $5,000,000 to purchase additional analytical and visualization software tools. These tools will be compatible with the upgraded Trilogy network and legacy systems for case management and document management, and will enable personnel to sift through vast amounts of data to find information appropriate for analysis.

Mainframe Upgrade Operations and Maintenance. To adequately staff and operate FBI data centers, the FBI requests 6 positions and $7,444,000. The additional staff will enhance operations support, technical support, server support, and hardware management activities. This funding will also support annual hardware and software maintenance for both of the FBI's data centers' enterprise servers.

Security Initiative

In response to the arrest of former FBI Special Agent Robert Hanssen for espionage, the FBI convened an internal committee comprised of senior field office and FBI Headquarters executives to evaluate the FBI's internal security practices both from a practical as well as historical perspective. This committee was asked to develop recommendations that could be implemented by the FBI while the independent inquiry conducted by William H. Webster was completed. The FBI believed that it could not delay implementing critically needed interim safeguards. The issues and recommendations identified by this internal committee do not represent all of the issues that must be addressed. However, the committee suggested several key areas for immediate FBI management attention. These include:

" Developing a professional cadre of Security Officers in field offices and at Headquarters who would serve as experts relative to the policies, procedures, and practices that govern security countermeasures, the handling of sensitive documents, and access to sensitive information systems.

" Creating an atmosphere within the FBI that will better enable security policies to be disseminated, understood, and observed.

" Ensuring that the FBI has a sufficient capacity to detect instances in which established security policies have been violated, as well as to implement appropriate corrective action.

" Ensuring that the FBI has a sufficient capacity to effectively implement security education awareness initiatives, as well as to enhance the adherence to operational security principle.

One immediate step taken by the FBI has been the creation of a new Security Division. The primary function will be to ensure, enhance, and consolidate an effective security program within the FBI that protects sensitive information. The FBI requests an additional $78,065,000 for security improvements. This funding would provide for additional staff for field and Headquarters security programs, support security training and awareness, and allow the acquisition of contract services to assist with the certification and accreditation of FBI information technology systems. It will also provide contract services to conduct background security investigations of persons, such as task force participants, who are provided access to FBI facilities and information systems. This funding will ensure the FBI is in compliance with applicable statutes, executive orders, and other security requirements.

Security staffing. The FBI requests $21,338,000, to enhance the security program. Included in the request are funds for Headquarters and field personnel; security training programs; contractor support to assist with the certification and accreditation information technology systems; and background investigations of contractors, task force personnel, and others who are granted access to FBI information or facilities.

Information Assurance. The Hanssen espionage incident and subsequent internal review identified vulnerabilities to FBI information systems, practices, and processes. Through effective Information Assurance practices, the FBI will strengthen existing and implement new enterprise-wide security practices to reduce these vulnerabilities. These practices include active monitoring of systems and access, conducting threat and vulnerability assessments, providing critical incident response to anomalies and suspicious activities, implementing layered access controls, and hardening systems defenses. The FBI requests 13 positions and $48,173,000 for information assurance. This request builds on information assurance practices planned with funding provided from the Counterterrorism supplemental.

Countermeasures. A key element of a security countermeasure program is understanding the capabilities of potential adversaries and adapting FBI programs and processes to reduce its vulnerabilities to such capabilities. The FBI requests funding to further these efforts.

Polygraph. The FBI is requiring polygraph examinations of all persons who are being granted a security clearance, including those who require access to unclassified and classified information, personnel, and facilities. To support this element of the FBI's security program, an additional 17 positions (15 agents) and $6,804,000 is needed to augment the current complement of polygraphers. The request includes funding for necessary equipment, training, travel, and space.

Security of FBI Facilities. Providing a secure, safe work environment for FBI employees and the facilities in which they work is a basic operating requirement. The FBI requests $714,000 to enhance the physical security for FBI Academy, Quantico, Virginia, and to provide contract guard services for the 5 FBI field offices that are relocating to sole tenant facilities upon expiration of current leases.

Mr. Chairman and members of the Subcommittee, I appreciate the overwhelming support and cooperation I have received from you and your staff during my short tenure as Director. I hope that we can continue this partnership in the months and years to come. The challenges facing the FBI, both in terms of our investigations and in our efforts to refocus the FBI's mission and reorganize its components are difficult, but not insurmountable. The funding requested in the FY 2003 budget is necessary to support the continued change and modernization that has been started. The additional funding requested will help strengthen the Bureau in the face of fast-changing technologies, and increasingly dangerous threats. Thank you for your consideration and support.