Grassley Statement Justice Department Spending Problems, Data Security


Prepared Statement of Ranking Member Chuck Grassley

Senate Committee on the Judiciary

Executive Business Meeting

Thursday, September 22, 2011


Mr. Chairman,


With regard to the judicial nominations, there are requests on our side to hold over the following nominees, who are appearing for the first time on our agenda:  Wallach, Bencivengo, Brodie, Christensen and Groh.


We can report out the nomination of David B. Barlow, to be United States Attorney for the District of Utah.  I thank the Chairman for favorably responding to our requests to add this nomination to the agenda. 


Mr. Barlow has been a valuable member of the Senate family.  For the past nine months he has served as General Counsel to Senator Lee and as minority Chief Counsel for the Subcommittee on Antitrust, Competition Policy and Consumer Rights.  He has outstanding academic credentials and a distinguished legal career.  I am confident he will be an excellent United States Attorney, and we wish him well.


We have a number of bills on the agenda again today including a number of amendments held over from last week when we lost a quorum.


However, before we get to the bills on the agenda, I want to say a few words about a disturbing report issued by the Justice Department Inspector General this week. 


The report released by the Inspector General detailed lavish expenditures by the Justice Department on conferences.  All together, the report found that the department spent $121 million taxpayer dollars on conferences between 2007 and 2009.  However, it is the line item expenditures that show just how ridiculous this spending really was. 


For example, the Inspector General found the department paid for $16 muffins, $10 cookies, $5 cans of soda, $8 cups of coffee, and over $32 per person for Cracker Jacks and popcorn snacks.  This was on top of nearly $600,000 that was spent to hire outside event planners for these conferences.


The expenditures this audit has found are simply amazing.  They are an example of why so many Americans have lost faith in the Federal government.  This audit also comes on the heels of another Inspector General audit from 2007, with similar findings.  It is quite clear that the Justice Department just doesn’t get the fact that we are in a different fiscal situation than ever before. 


As Americans face over 9 percent unemployment and the federal deficit sits at well over $14 trillion, the Justice Department continues to live the high life. 


I think perhaps the most disappointing part of the report is the fact that the department has taken to finger pointing and hasn’t taken responsibility.  Instead, they have argued that these wasteful expenditures mostly took place in the previous administration. 


The report’s own findings discredit this statement, as some of the conferences were held during the current administration.  That said, waste and abuse of taxpayer dollars is not a partisan issue.  It’s an institutional, bureaucratic problem.


The best evidence of this is highlighted in the report.  Specifically, the Inspector General asked the Executive Office of the U.S. Attorney’s why they chose a four star hotel for the conference.  Their reply was, “only a four or five star hotel was capable of providing the level and quality of services expected by senior executives and other political appointees.”  Simply astonishing. 


The Super Committee should take a hard look at this report when looking for the easy cuts to make.  It won’t solve our fiscal problems, but it will send a signal that business as usual is over. 


I am also aware that the President announced a review of all federal agencies spending on conferences today.  But, that sort of review will take too long and tell us what we already know — these agencies have an institutional problem that needs to be fixed by Congress.


I plan to help the President by offering an amendment to any bill authorizing grant funding that comes before the committee that cuts off the wasteful spending on conferences.  I hope my colleagues will join me in this effort.  Common sense, reason, and the American taxpayer demand action.


Regarding the legislation on the table, we have an agreed upon number of amendments to S.1151 that were left over from last week that we’ll be able to vote on today.  Then we’ll be able to vote on the bill—and we’ll request a roll call vote on final passage.


Next, we can move to S.1408, the Data Breach Notification Act.  I have some amendments to offer to this bill.


I believe that in its current form S.1408 will overburden large and small businesses with more regulations.  There’s a real threat to small businesses and independent contractors. 


A small business, which over the years can easily acquire enough information to qualify under the bill, will have the same notification requirements as a large business.  This means dealing with bureaucrats at the Federal Trade Commission, which will be a costly and timely affair. 


I also question whether the safe harbor in this bill is in name only.  The bill says that if a company performs a risk assessment and determines notice isn’t needed, then all that’s needed is to tell the Federal Trade Commission (FTC) of this decision.  If the FTC doesn’t respond within 10 days, then no notice is required. 


But this presumes the FTC will operate efficiently and timely.  Staffers at the FTC may become overworked on these matters and lack the time to review all of the requests.  Rather than risk the repercussions of telling a company to not give notice, isn’t it safer to instruct the company to give notice?


We don’t need to encourage or foster over-notification. 


Americans want and need the Congress to work with private businesses to create jobs.  However, under this bill, we may end up with more burdensome regulations, small businesses forced into bankruptcy, jobs lost and consumers still going unprotected because the over-notifications will be ignored.     


There is a lot more work to be done on this bill.  While I’m not able to support the bill just yet, I appreciate some of the changes Senator Feinstein has made.  I hope our staffs can continue to work on this bill.


Next we have S.1535, the Personal Protection and Breach Accountability Act.  S.1535 is troubling.  This bill will result in the closing of smaller businesses that are subject to its costly requirements.


This bill heads straight down the path to over-notification and will desensitize consumers to threats of actual harm.  Further, the costly remedies provided for in the bill will punish a business that is also a victim of the breach. 


Once notice of a breach is given, a company must provide credit reports and monitoring services to the individuals affected.  The company will pay for the reports and monitoring services for 2-years.  Also, upon an individual’s request, a company must pay any costs and damages incurred as a result of the breach.  These are severe and expensive requirements. 


Additionally, the enforcement and liability provisions in this bill are even more troubling than the corresponding provisions in S.1151 and S.1408.


There’s a real danger that this bill could produce a lawsuit explosion against all businesses, big and small.  I can’t support that, especially at a time when we have 14 million Americans unemployed and looking for jobs.        


This bill provides for enforcement actions to be prosecuted by (1) the Department of Justice, (2) State Attorneys General, and (3) individuals.  All three of these groups could file lawsuits against the same business for the same conduct. 


I don’t know any small or medium size business that could survive multiple lawsuits filed against it by the Department of Justice, one or more state governments, and perhaps a plaintiffs’ law firm prosecuting a private class action.        


We must not forget that these businesses that will be sued may have been the victims of crime.  They’ll have had their computers hacked.  After being victimized by criminals, if these businesses make a mistake in complying with the law, they’ll face multiple lawsuits and high penalties.   


Week after week the unemployment numbers get worse and worse.  Congress needs to be helping businesses create jobs.  What I’ve described here is a problematic bill that will bankrupt businesses and kill jobs.  I can’t support it.    


Finally, if we get to H.R.2480, I will have a few words to say about it before we have a vote. 


Thank you.