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For Immediate Release
June 30, 2011

Oversight of the Financial Fraud Enforcement Task Force


Prepared Statement of Ranking Member Chuck Grassley

U.S. Senate Committee on the Judiciary

Subcommittee on Administrative Oversight and the Courts

Hearing on “Oversight of the Financial Fraud Enforcement Task Force”

Thursday, June 30, 2011


Madam Chairman, thank you.  Today’s hearing provides us the opportunity to fulfill our constitutional duty to conduct oversight of the Justice Department.  It’s also an opportunity to further address fraud against the American taxpayers.  Combating fraud is not a partisan issue and it’s one that I take seriously. 


Most recently, this committee held a hearing on fraud enforcement efforts at the Justice Department in January.  Unfortunately, we just received responses to our written questions from that hearing last night after 5pm—nearly 5 months after the questions were submitted.  While I’m glad the Justice Department was able to finally get answers to these questions returned to the committee, it does a disservice to all members of the committee—Republican or Democrat—to get them after 5pm the night before the next hearing on the same topic. 


Notwithstanding the 5 month delay in receiving those written answers to our questions, Senator Leahy and I, joined by Senator Klobuchar, introduced the Fighting Fraud to Protect Taxpayers Act in May.  This important legislation provides a number of fixes to the criminal code to assist in fraud enforcement, as well as providing additional resources to the Justice Department to combat fraud.  It provides these resources from fraud recoveries without utilizing taxpayer resources.  The committee reported that bill by a strong bi-partisan vote and it is now on the Senate calendar awaiting consideration. 


While our bill addresses important legislative changes to help combat fraud, important work remains.  This hearing is part of that continued work.  By conducting continued oversight we can ensure that the Justice Department is targeting fraud aggressively on behalf of the American taxpayers.  This is especially important given the significant annual government expenditures in programs like Medicare and Medicaid, Defense Department procurement, and not to mention the increased expenditures the last few years including the President’s trillion dollar stimulus funding, the AIG Bailout, the auto industry bailout, the government conservatorship of Fannie Mae and Freddy Mac, and the Troubled Asset Relief Program (TARP).    


Understanding the significant expenditures of taxpayer dollars, President Obama signed an Executive Order in November 2009 creating the Financial Fraud Enforcement Task Force.  The task force is designed to “strengthen the efforts of the Department of Justice…to investigate and prosecute significant financial crimes and other violations relating to the current financial crisis and economic recovery efforts.”  Attorney General Holder stated that the task force will “wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.”  He added that this effort will “not just hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening.” 


While I appreciate the Attorney General’s comments on the task force, I want to know more about how the task force is operating and whether it is achieving the stated goals of the President and Attorney General.  All too often in Washington, task forces and commissions are created to make people think they are doing more than they actually are.  It is a way for politicians to tell the American people they are addressing a problem when nothing really changes.  I want to hear from the witnesses about how the task force has furthered the fraud fighting mission at the department or whether these same cases would have been brought absent the task force. 


For example, I’m concerned that the task force may in fact be too broad in its mission.  The task force is made up of a steering committee chaired by the Deputy Attorney General and vice chaired by the Associate Attorney General.  There is also a Training and Information Sharing Committee.  Then there is a separate Victims’ Rights Committee.  There are also five separate working groups within the task force.  Each of those separate working groups has no less than three participating federal agencies. 


It appears that a lot of time and effort could be expended just meeting and coordinating all these task forces and working groups.  That is time that could be spent actually investigating and bringing prosecutions.  I want to hear some specific examples of how this has added value and not simply facilitated more bureaucratic process for combatting fraud. 


I’m also concerned that the task force is nothing more than a press release collection agency utilized by the Justice Department to collect examples of investigations and prosecutions that would otherwise have been brought.  My staff has heard this from agents and attorneys in the field so I’d like to learn a bit more about why the task force is necessary and how many taxpayer dollars are utilized to facilitate all the meetings and coordination it has added to the fraud fighting process. 


I look forward to hearing from the witnesses and to hearing candid answers to these important questions.  Thank you.