STATEMENT
OF
PETER D. KEISLER
ASSISTANT ATTORNEY GENERAL
CIVIL DIVISION
DEPARTMENT OF JUSTICE
BEFORE THE
SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW
COMMITTEE ON THE JUDICIARY
UNITED STATES HOUSE OF REPRESENTATIVES
CONCERNING
BUDGET AND RESOURCE NEEDS
OF THE JUSTICE DEPARTMENT CIVIL DIVISION
FOR FISCAL YEAR 2005
PRESENTED ON
MARCH 9, 2004
STATEMENT OF
PETER D. KEISLER
ASSISTANT ATTORNEY GENERAL
CIVIL DIVISION
DEPARTMENT OF JUSTICE
BEFORE THE
SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW
COMMITTEE ON THE JUDICIARY
UNITED STATES HOUSE OF REPRESENTATIVES
ON
BUDGET AND RESOURCE NEEDS
OF THE JUSTICE DEPARTMENT CIVIL DIVISION
FOR FISCAL YEAR 2005
MARCH 9, 2004
Chairman Cannon, Congressman Watt, and Members of the Subcommittee:
I appreciate the opportunity to discuss the work of the Civil Division of the Department of Justice and our budget and resource needs for Fiscal Year 2005.
The Division represents the interests of the United States in a wide range of civil matters. Our cases encompass virtually every aspect of the Federal government – from defending the constitutionality of Federal statutes to recovering money from those who have committed fraud in connection with government programs, to the administration of national compensation programs to the representation of Federal agencies in a host of matters that arise as part and parcel of Government operations – contract disputes, allegations of negligence and discrimination, loan defaults, and immigration matters. We have 716 dedicated public servants who serve as attorneys in the Division and 336 full and part time employees who provide essential paralegal, administrative, and clerical support.
Over the last year and a half, the Civil Division has:
• Working with the United States Attorneys, recovered more than two billion dollars lost through fraud against health care and defense programs;
• Protected the public fisc from billions of dollars in claims arising from the Government’s commercial activities;
• Defended against challenges to Congressional and Executive exercises of power;
• Convicted Internet pharmacy operators for illegally selling prescription drugs;
• Defended the legality of the “Do Not Call” list; and
• Played a major role in the administration of congressional programs, such as the September 11th Victim Compensation Fund; the Division has also continued its work with the Vaccine Injury Compensation Program, and the Radiation Exposure Compensation Act.
• Further, in the months since the September 11th attacks, there has been a substantial increase in civil litigation challenging the Federal government’s coordinated response to those attacks and the Administration’s policies designed to prevent future acts of terrorism. The Civil Division currently handles some 100 pieces of litigation directly related to the September 11 attacks and the country’s response to those attacks.
• The Civil Division also helped to secure convictions in a court in Athens, Greece of 15 members of the notorious Greek terrorist group 17 November.
NATIONAL SECURITY
Among the laws and policies of most importance to the Administration, the Congress, and the public are those intended to protect our nation’s security. Our leadership has committed itself to devoting all resources necessary to disrupt, weaken, and eliminate terrorist networks; to prevent or thwart terrorist operations; and to bring justice to perpetrators of terrorist attacks. And we in the Civil Division are privileged to contribute to this mission through our representation of the United States in litigation that relates to the Federal Government’s efforts to protect against threats to our national security. In fulfilling our litigation responsibilities, we take seriously the Attorney General’s charge to think outside the box, but never outside the Constitution.
Indeed, civil cases related to the war on terrorism often raise unprecedented issues that require novel legal strategies. And the consequences are large, as litigation losses in this area could undercut policies crucial to the security of our citizens.
Civil Division attorneys defend challenges to the USA PATRIOT Act and the AntiTerrorism Act, lead efforts to defend the decision to freeze the assets of terrorist organizations, and ensure that immigration hearings may proceed without risking harm to our nation’s counterterrorism strategy. Our attorneys defend enforcement actions involving the detention and removal of suspected alien terrorists, defend designations of Specially Designated Global Terrorists, and defend our Commander-In-Chief in suits seeking to enjoin the country’s military actions in Iraq. Of the 37 counterterrorism-related court decisions handed down in FY 2003, we prevailed in 35 – a success rate of 95 percent.
In light of the increasingly crucial role that the Civil Division plays in the Nation’s counterterrorism efforts, the President requests in his FY 2005 budget an increase of 11 positions (eight attorneys and three support staff), 6 FTE, and $856,000 for counterterrorism litigation.
* * * * *
While national security cases are paramount, they still represent a small fraction of the over 35,000 cases and matters pending with the Civil Division. This vast and diverse workload is handled by our trial attorneys who spend their time on the front lines of litigation – preparing motions, taking depositions, negotiating settlements, conducting trials, and pursuing appeals.
PROTECTING THE PUBLIC FISC
Our dockets are filled with cases that involve substantial monetary claims against the Government. The significance of these claims cannot be overstated.
Our responsibilities have included: (1) the 122 Winstar suits in which hundreds of financial institutions have sought tens of billions of dollars for alleged losses that occurred in the wake of banking reforms enacted in the 1980s; (2) the Cobell class action – perhaps the largest ever filed against the Government; and (3) the Spent Nuclear Fuel cases, in which nuclear utilities allege a multi-billion dollar breach of contract against the Department of Energy for its failure to begin acceptance and disposal of spent nuclear fuel.
In these and thousands of other defensive monetary matters, our mission is to ensure that the will of Congress and the actions of the Executive Branch are vigorously and fairly defended, and that meritless claims are not paid from the public fisc. Thus far, we have been largely successful. Fifty-five of the original 122 Winstar suits have been resolved without the government paying any money whatsoever. And in fiscal year 2003, we defeated, in total, $12 billion in unmeritorious claims asserted against the United States.
In any given year about 15 to 20 percent of our cases involve affirmative litigation to enforce Government regulations and policies, and to recover money owed the Government from commercial transactions, bankruptcy proceedings, and fraud. In one such case, the hospital chain Columbia/HCA agreed to pay the government a total of $1.7 billion in criminal fines and civil penalties for systematically defrauding federal health care programs. The conclusion of this multi-year probe in June 2003 marked the largest recovery ever reached by the government in a health care fraud investigation. Rivaling HCA in terms of size and potential recoveries are numerous ongoing investigations against many pharmaceutical companies or other related entities, charging various allegations of fraud on the Medicare and Medicaid programs in the pricing or delivery of drugs. Recoveries in the last three years have already exceeded $1 billion with potential recoveries totaling $1.5 billion in the next three years. In total, in fiscal year 2003, the Civil Division, working in concert with the United States Attorneys, recovered approximately $2.2 billion in fraud suits and investigations, thus setting precedents that will deter future efforts to defraud the American people.
WORKLOAD TRENDS
In 2001, the Civil Division handled about 20,000 cases and matters with a staff of 722 trial attorneys. In just two years our pending caseload grew 75 percent to nearly 35,000, while the number of trial attorneys has actually dropped to 716.
During this time we witnessed significant growth in appellate cases and matters – driven largely by the steep rise in challenges to immigration enforcement actions. Cases in the Court of Federal Claims, the Court of Appeals for the Federal Circuit, the Court of International Trade, and in foreign courts continued to account for a very significant portion of our workload – some 34 percent. In contrast, the number of trial cases assigned to district courts declined both numerically and as a proportion of our total workload. Most notably, the sharpest increases are attributable to our expanding responsibilities for administering compensation programs.
ALTERNATIVES TO LITIGATIONThe Vaccine Injury Compensation Program was created in 1986 by the National Childhood Vaccine Injury Act – to encourage childhood vaccination by providing a streamlined system for compensation in rare instances where an injury results. To date, nearly 1,800 people have been paid in excess of $1.4 billion.
In FY 2003, nearly 2,500 claims were filed under the Program, compared with just 213 in FY 2001 – a nearly twelve-fold increase largely attributable to claims alleging that a vaccine preservative, thimerosal, caused autism. As the Court of Federal Claims increases its staff of Special Masters, we expect further growth in vaccine-related work. By the end of FY 2005, more than 3,400 additional cases are expected to be filed.
The Vaccine Injury Compensation Trust Fund derives its funding from an excise tax on vaccine manufacturers and is used to make compensation payments to eligible claimants and to reimburse the Court of Federal Claims, and the Departments of Justice and Health and Human Services for expenses related to the administration of the Program. The annual appropriations that set the Civil Division’s reimbursement level have stayed flat at $4,028,000 since 1996. The FY 2005 President’s Budget seeks an increase in reimbursable authority of $2,305,000 to handle the exponential growth in vaccine injury claims alleging injuries caused by thimerosal. Increasing the Civil Division's reimbursement level so it can adequately address this significant workload growth will help to assure that qualifying claims are paid while the long term viability of the Trust Fund is protected.
Congress passed the Radiation Exposure Compensation Act (RECA) in 1990 to offer an apology and compensation to people who suffered disease or death as a result of the nation’s nuclear weapons program during the Cold War era.
In July 2000, RECA Amendments were enacted. Major changes included new categories of beneficiaries; expansion of eligible diseases, geographic areas, and time period; and a reduction in the radiation threshold that miners must meet to receive compensation. As a result, over 3,800 new claims were filed in FY 2001 – more than in the prior six years combined.
Awards rose sharply too, from an average of about $20 million a year to over $172 million in 2002 alone. To administer the expanded program and avoid the development of backlogs, the Consolidated Appropriations Act for Fiscal Year 2004 earmarked an additional $1,000,000 for FY 2004 over the base of $1,996,000.
The Amendments also precipitated a need for additional Trust Fund resources. In FY 2001, Congress appropriated an emergency supplemental appropriation to address immediate requirements. Long-term needs were addressed through the Fiscal Year 2002 National Defense Authorization Act. That Act made the RECA Trust Fund a mandatory appropriation and established annual funding caps through FY 2011 totaling $655 million. The caps set by the Act were based on the assumption that there would be a sharp decline in the number of claims approved each year. To date, the claims have not been declining as rapidly as assumed, and it has become obvious that these annual Trust Fund caps are insufficient for eligible claimants. The General Accounting Office recognized this problem in its April 2003 report to Congress. In FY 2003, approximately $10 million in awards could not be paid until FY 2004. For FY 2004, funds are projected to be exhausted this summer, meaning that almost $28 million, will not be paid until FY 2005. Without an increase, FY 2005 funds are projected to be exhausted by December, bringing the cumulative shortfall to $72 million. Accordingly, to ensure that adequate resources are available to pay all eligible claimants through FY 2005, the President’s Budget seeks a discretionary appropriation of $72 million.
The most recent addition to the Division’s responsibility for compensation programs is the September 11th Victim Compensation Fund of 2001. The Air Transportation Safety and System Stabilization Act (P.L. 107-42) created the Program to pay compensation to families of deceased individuals and to those physically injured as a result of the September 11th terrorist attacks.
The sheer complexity of the determinations and the deep, emotional context of the decision-making makes the Program one of the Division’s greatest challenges arising out of the devastation of September 11th.
Under the law, all claims were to be filed by December 22, 2003. The success of the Program is borne out by the eligible claimants’ phenomenal level of participation. Under the leadership of Special Master Kenneth Feinberg, the Program received a total of 7,357 claims, 2,970 death and 4,387 injury. An extraordinary 98 percent of those eligible filed a death claim, far exceeding the Special Master’s most optimistic projections in December 2001.
The Program has already paid over $2 billion to claimants. The amounts approved for deceased victims range from $250,000 to $6.9 million. Awards approved for physically injured (but not deceased) victims ranged from $500 to $7.9 million.
There remains much work to be done before the last award is issued. Justice and compassion demand that claims be resolved as expeditiously as possible. For FY 2004, a total of $38.3 million was appropriated to ensure the Program has access to the resources needed to meet the administration’s goal – to judiciously resolve all claims in FY 2004.
Due to the volume of claims filed immediately before the deadline, some percentage of claims may not be finally closed in FY 2004. The FY 2005 President’s Budget seeks $11.4 million to ensure that each and every claim is fully resolved, each payment is made, and the substantial amount of administrative close-out operations is completed seamlessly.
Because the enacting legislation provided an indefinite appropriation for making compensation payments, there will be sufficient funds to pay an estimated $5.4 billion in approved claims over the life of the program.
IMMIGRATION LITIGATION
The Office of Immigration Litigation (“OIL”) defends the Government’s immigration laws and policies, and handles challenges to immigration enforcement actions. At no time in history has this mission been so important, and never before has it consumed as large a percentage of the Civil Division’s resources as it does today.
Immigration attorneys have defended the government’s efforts to detain and remove known terrorists and other criminal aliens. In addition, OIL has helped to preserve the government’s policy of closing hearings for aliens who were deemed to be of interest to the post-9/11 terrorism investigation. Vigorous defense of these cases is critical to the nation’s counter-terrorism strategy.
Immigration has been, by far, the fastest growing component of the Civil Division’s docket. The Civil Division handles all federal court challenges to decisions of the Board of Immigration Appeals (the “BIA”). These challenges have more than doubled in the past five years. Whereas OIL handled roughly 5,700 cases in 2001, it handled over 12,000 in 2003.
The primary reason for this growth is that the BIA has reduced a 56,000 case backlog, as a result of the Attorney General’s initiative to streamline the agency’s procedures. As the BIA’s output has increased, so has our workload. Moreover, further contributing to the growth in immigration cases are three other factors: (1) an increase in new BIA cases as a result of heightened immigration enforcement; (2) the substantial increase in the percentage of BIA decisions that are appealed to the federal courts; and (3) the Supreme Court’s recent decisions opening up additional avenues for judicial review that Congress attempted to foreclose just eight years ago.
This enormous growth is driving the per attorney caseload to over 130 cases in FY 2004, a more than doubling of the historic caseload of 60 cases per attorney. Without additional resources in FY 2005, the attorney caseload is expected to exceed 160 cases per attorney, which is more than three cases per week. The Divisions’s temporary, stopgap measure of assigning immigration cases to other Branches (such as Torts and Commercial) – which do not share OIL’s experience in immigration law and which do not have the capacity to handle these cases indefinitely – is not a permanent solution.
OIL attorneys are the last line of defense in immigration enforcement. Any attempt to strengthen our borders and to protect ourselves from terrorists must ensure that OIL has adequate resources to defend the BIA’s decisions. A failure to provide these resources would necessarily weaken our country’s efforts to protect homeland security.
The President therefore requests in his FY 2005 budget a program increase of 30 positions (22 attorneys and eight support staff), 15 FTE, and $3,500,000 for immigration litigation.
PERFORMANCE
By concentrating on the Civil Division’s top priorities, this testimony provides little elaboration on the thousands of cases and matters that form the traditional core of our work.
The Civil Division has a longstanding commitment to maximizing the effectiveness of scarce Government resources. It is with pride that I can report that performance targets across the board were met or exceeded in FY 2003 – as we succeeded in recovering substantial funds owed to the Government, defeating unmeritorious claims and prevailing the vast majority of cases involving challenges to the programs of some 200 agencies that are our clients.
PRESIDENT’S BUDGET REQUEST
The President’s FY 2005 request seeks 1,115 positions, 1,157 FTE and $193,110,000. Included in this request are the base resources required to maintain superior legal representation services that have yielded such tremendous success. Please note that the reduced funding for administration of the September 11th Victim Compensation Fund results in the overall request level being $19.4 million less than the FY 2004 appropriated level.
The President’s request includes additional funds to: defend the government in some of the most contentious terrorism-related cases; support the Office of Immigration Litigation’s key role in protecting our nation’s borders; handle the exponential growth in vaccine injury claims alleging injuries caused by thimerosal; and ensure adequate resources are available to pay all eligible RECA claimants.
At this time, Mr. Chairman, I would be happy to address any questions you or Members of the Subcommittee may have.