Prepared Floor Statement of Senator Chuck Grassley

Why Didn't the Attorney General and the Secretary of Homeland Security know about the Connection between Fast and Furious to Agent Terry's Death?

Thursday, December 1, 2011

***Click here for video of Grassley's speech.***

For nearly a year, I have been investigating the Bureau of Alcohol, Tobacco, Firearms and Explosives' Operation Fast and Furious.

I have followed up on questions from that investigation as the Senate Judiciary Committee held oversight hearings over the past few weeks with both Secretary Janet Napolitano and Attorney General Eric Holder.

Each of them testified about the aftermath of the shooting of Border Patrol Agent Brian Terry.  And I have sought to clarify with FACTS some of the half-truths that were said during those hearings.

Each claimed that they were ignorant of the connection between Agent Terry's death and Operation Fast and Furious until my letters with whistleblower allegations brought the connection to light.

However, documents that have come to light in my investigation draw those claims into question.

I'd like to address a couple of those discrepancies.

Secretary Napolitano went to Arizona a few days after Agent Terry's death.

She said that she met at that time with the FBI agents and the assistant U.S. attorneys looking for the shooters.

She also said that at that point in time, nobody knew about Fast and Furious.

Yet documents show that many people knew about Fast and Furious on December 15, the day Agent Terry died.

Secretary Napolitano referenced the FBI agents looking for the shooters.

The head of that FBI field division was present at the December 15 press conference about Agent Terry's murder.  At that very press conference, the FBI head told a chief Assistant U.S. Attorney about the connection to an ongoing Phoenix ATF investigation.

That same night, U.S. Attorney Dennis Burke confirmed that the guns tied back to Fast and Furious.

These connections were made days before Secretary Napolitano's visit.

The very purpose of her visit was to find out more about the investigation.

That leaves a very important question.

The Department of Homeland Security oversees the Border Patrol.  Why wouldn't the Phoenix FBI head have told Secretary Napolitano that the only guns found at the scene of Agent Terry's murder were tied to an ongoing ATF investigation?

And let's not forget the U.S. Attorney's office.

Secretary Napolitano said she met with the assistant U.S. attorneys looking for the shooters.

The chief assistant U.S. attorney for the Tucson office, which coordinated the Terry investigation, found out about the ATF connection directly from the FBI.

So, a very important question comes up.  Why would they conceal the Fast and Furious connection from Secretary Napolitano days later?

The Tucson office was overseen by the U.S. Attorney for the District of Arizona, Dennis Burke, who confirmed to Tucson that guns came from Operation Fast and Furious.

When Ms. Napolitano was Governor of Arizona, Mr. Burke served as her chief of staff for five years.  Secretary Napolitano acknowledges that she had conversations with him about the murder of Agent Terry.

So, a very important question comes up.  Why would Mr. Burke conceal the Fast and Furious connection from Secretary Napolitano?

Even before Secretary Napolitano came to Arizona, emails indicate Mr. Burke spoke on December 15 with Attorney General Holder's Deputy Chief of Staff, Monty Wilkinson.

Before finding out about Agent Terry, Mr. Burke emailed Mr. Wilkinson that he wanted to "explain in detail" about Fast and Furious when they talked.

So, a very important question comes up.  On that phone call, did U.S. Attorney Burke tell Mr. Wilkinson about the case's connection to a Border Patrol agent's death that very day?

The next day, the Deputy Director of the ATF made sure briefing papers were prepared about the Fast and Furious connection to Agent Terry's death.

He sent them to individuals here in Washington, D.C., in the Deputy Attorney General's office at the Justice Department.

Within 24 hours, they were forwarded to the Deputy Attorney General.

They were accompanied by a personal email from one of the Deputy Attorney General's deputies, explaining the situation. Two weeks later, that Deputy Attorney General, Gary Grindler, was named the Attorney General's Chief of Staff.

Yet a month and a half after Agent Terry's death, Attorney General Holder was allegedly ignorant of the Fast and Furious connection.

So, a very important question is unanswered.  Why wouldn't Mr. Grindler bring up these serious problems with Attorney General Holder, either as his Deputy Attorney General or as his Chief of Staff?

It's clear that multiple highly-placed officials in multiple agencies knew almost immediately of the connection between Operation Fast and Furious and Agent Terry's death.

The Department of Justice and the Department of Homeland Security have failed to adequately explain why Attorney General Holder and Secretary Napolitano allegedly remained ignorant of that connection.  Whether it's the Attorney General or the Secretary, or members of their staff, somebody wasn't doing their job.

In the case of Secretary Napolitano, either she was not entirely candid with me and others, or this was a gross breach on the part of those who kept her in the dark.

The Border Patrol and the Department of Homeland Security lost a man.

It was their right to know the full circumstances surrounding that.

No one likes the unpleasant business of having to 'fess up, but the FBI, ATF, and U.S. Attorney's Office owed it to Agent Brian Terry and his family to fully inform the leadership of the Department of Homeland Security.

This was the death of a federal agent involving weapons allowed to walk free by another agency in his own government.

Let me explain walking guns.  The federal government operates under the rule of law just like all of us have to live under that rule of law.  There are licensed federal gun dealers.  Federal gun dealers were encouraged to sell guns illegally to straw buyers and supposedly follow those guns across the border to somehow arrest people who were involved with drug trafficking and other illegal things.  And, two of these guns showed up at the murder scene of Agent Terry.

And, if that's not serious enough to brief up to the top of the department, then I don't know what is.

Thursday, December 1, 2011

WASHINGTON - Senator Chuck Grassley said today that the Senate has accepted an amendment he offered with Senator Barbara Boxer of California to limit taxpayer reimbursement for defense contractor salaries. The legislation will be included in a larger bill to authorize $662 billion in Pentagon spending for the next fiscal year.

Grassley said their reform amendment is aimed at runaway federal spending on contractor salary reimbursements.  Cost-reimbursement type contracts are used extensively by the Department of Defense.

"We can't afford to waste increasingly limited defense dollars," Grassley said.

Between 1998 and 2010, the benchmark for reimbursing executive salaries - separate from what these executives are paid by their private-sector employers - grew 53 percent faster than the rate of inflation.

Here is Grassley's statement to the Senate regarding the Boxer-Grassley amendment.

Grassley Statement

The Congressional Record

Thursday, December 1, 201

At a time when the national security budget is under immense pressure, it is vitally important that we spend our defense dollars more wisely.  The Boxer-Grassley amendment will contain runaway spending in contractor salary reimbursements.  Notice that I said "salary reimbursements" not salaries.  Someone not familiar with government contracting might ask why it's any of our business what government contractors get paid, and I would agree if we're talking about what their company pays them out of its own pocket.

When most people hire a contractor to renovate their bathroom or re-shingle their roof, they find the one that does the best work for the least cost.  Having done that, you're not likely to ask or care what their cut is or what they pay their crew.  To the extent that government contracts work the same way, the same principle applies.  Unfortunately, not all government contracts do work that way.

A large proportion of government contracts actually reimburse the contractor directly for the costs they incur, including for the salaries of their employees.  These types of contracts are risky because contractors lose the incentive to control costs.  They are only supposed to be used when a fixed price contract is not possible, for instance if the scope or duration of the work is not possible to determine at the outset.

Nevertheless, cost-reimbursement type contracts are used extensively by federal departments and agencies.  The Defense Department alone accounted for over $100 billion in cost reimbursement type contracts in fiscal year 2010.  President Obama has criticized the widespread use of these types of contracts and has set a goal of slowing the growth and ultimately reducing their use.  He's made a little progress.  However, we're talking about a small dent in a large bucket.  It's clear that cost type contracts are going to account for a major proportion of the dollars spent on federal contracting for the foreseeable future.  As a result, we must take steps to limit unreasonable expenditures under these types of contracts.

Senator Boxer and I worked together to try to head off this problem back in 1997.  At that time, we proposed capping salary reimbursements at the salary level of the President of the United States.  However, a compromise was ultimately enacted that capped how much the top 5 highest earning contractor executives could charge the federal government for their salaries.  The cap was set at the median salary of the top 5 executives at companies with annual sales over $50 million, which must be recalculated annually.  Since that time, the cap has more than doubled from $340,650 to $693,951.  That's 53 percent faster than the rate of inflation.

The House-passed version of the National Defense Authorization Bill expands the current cap to all contractor employees, not merely the top 5 executives, closing a loophole that was being exploited.  The version of the National Defense Authorization Bill before the Senate extends the cap only to the top 10-15 executives.  However, Senator Boxer and I think it's time to reconsider a fixed cap at the level of the President's salary, which I should add was doubled by Congress to $400,000 since our previous proposal.  That's more than generous.  Surely the taxpayers shouldn't be asked to pay the salary of a contractor more than the President makes, which is twice what any cabinet secretary makes.  Keep in mind that this cap just limits how much Uncle Sam can be billed for, which is on top of whatever the company chooses to pay its employees out of its own pocket.

Not only would our straightforward cap save man-hours in the Office of Federal Procurement Policy, which has to gather the data every year to determine the current convoluted cap, but it would save millions of dollars that need not be spent.  Again, we cannot afford to go on wasting our increasingly limited defense dollars.  We have to be more aggressive in weeding out waste in defense spending and this is one unnecessary expenditure that we can easily eliminate in favor of higher priorities.  I urge my colleagues to join us in this commonsense cost cutting measure.

ROCK ISLAND, IL (12/01/2011)(readMedia)-- The Handel Oratorio Society will celebrate its 131st-anniversary performance of Handel's Messiah on Saturday, Dec. 10, at 8 p.m. and Sunday, Dec. 11, at 2 p.m. in Centennial Hall (3703 7th Ave, Rock Island, Ill.). This special holiday tradition will feature four internationally acclaimed soloists, including the return of renowned soprano Mary Wilson, performing with a professional chamber orchestra and 250 singers from Augustana College and the surrounding community.

From your area this includes:

Kaleigh Wall, a Junior from Eldridge, Ill., majoring in Art.

Lauren Reid, a Senior from Sherrard, Ill., majoring in Business Administration- Marketing/Communication Studies.

Rickey Rector, a Junior from Davenport, Iowa, majoring in Communication Sciences and Disorders.

Please visit www.augustana.edu/messiah for a behind the scenes documentary on the joy of singing Messiah.

Senator Chuck Grassley issued the comment below regarding new findings from the Government Accountability Office about dramatically higher rates of psychotropic prescription drugs being given to foster children over other children in Medicaid.  The GAO is finishing work on a report requested by Senator Tom Carper of Delaware.  Senators Grassley, Collins, McCain and Scott Brown joined in requesting the report.  The GAO today testified about its findings during a hearing of a subcommittee of the Senate Committee on Homeland Security and Governmental Affairs.  A foster youth named Ke'onte Cook also testified about his personal experience in having to take several medications while moving from one foster home to another.

Senator Grassley's comment:

"Children in the foster system are about as vulnerable as children can be, so more should be known about the degree to which foster children are given psychotropic drugs and the rationale for doing so, especially given the dramatic findings of this report.  The federal government should provide, without delay, the recommended guidance to states for monitoring what's happening.  Prescribing patterns and adverse effects need to be tracked for the well-being and protection of these children.  An environment needs to be established where there's accountability for the degree to which these drugs are used in order to make sure it's not just for convenience and at the children's expense.  There's also a public interest in making certain Medicaid isn't being abused through over prescribing.  My oversight, combined with investigative reporting, has exposed a few doctors in Florida who prescribed higher numbers of psychotropic drugs than seem humanly possible.  That's the kind of pattern states and the federal government need to monitor and nip in the bud as problems develop.  Also, disclosure of drug company payments to doctors will help to identify doctors who might be inclined to prescribe certain drugs at high levels because of a strong relationship with the drug maker."

Background information:

Senator Grassley has worked to make improvements to the foster care system and to make it easier for children in foster care to be adopted into permanent, loving homes, including the landmark 2008 law.  The Fostering Connections to Success and Increasing Adoptions Act of 2008 requires states to strengthen oversight of medical treatment and ensure that foster children receive high-quality, coordinated services when their placements change.

In 2009, Senator Grassley and Senator Mary Landrieu founded a Foster Youth Caucus in the Senate to draw the attention of policy makers to the needs of older children in foster care and the importance of helping children in the foster care transition out of the system and to independence, without the support of family.

Separately, beginning in 2007, Senator Grassley made the case for requiring pharmaceutical and medical device makers to disclose payments they make to doctors.  The disparities he disclosed between payments that research doctors reported receiving and payments that were made by drug makers galvanized support for enactment last year of a reform legislation sponsored by Senator Grassley and Senator Herb Kohl which will require disclosure.  Under their Physician Payments Sunshine Act, drug, device and medical supply companies must file annual reports with Department of Health and Human Services delineating all payments over $10, and the information will be posted online in a searchable manner beginning on September 30, 2013, and then on March 31 each subsequent year.  Physician names, office addresses, and specialties will be posted along with the form and amount of payments.  Senator Grassley has said this reform will provide transparency and, in turn, greater accountability in medical research and practice.