Report No.: GAO/OCG-93-23TR Date: December 1992
_______________________________________________________________________________
Author: United States General Accounting Office
Office of the Comptroller General
Addressee: Transition Series
This file contains the text of a GAO report. Delineations within the text
indicating chapter titles, headings, and bullets are preserved. No attempt has
been made to display graphic images or pagination of the typeset report.
Footnotes appear in brackets at the reference point in the text. Underlined
text is indicated by underscore characters (_Introduction_). Superscript
characters are preceeded by a backslash (\a). Figures may be omitted or
replaced with tables. Tables may not resemble those in the printed version.
A printed copy of this report may be obtained from the GAO Documents
Distribution Facility by calling (202) 512-6000 or faxing your request
to (301) 258-4066 or writing to P.O. Box 6015, Gaithersburg, MD 20877.
_______________________________________________________________________________
CONTENTS
Justice Issues
Strengthening the Department of Justice's Leadership and Management Functions
Investigating and Prosecuting White Collar Crime
Making Needed Policy and Management Decisions on Immigration Issues
Responding to a Rapid Rise in the Federal Prison Population
Making Antidrug Efforts More Effective
Related GAO Products
Transition Series
- Economics
- Management
- Program Areas
Office of the Comptroller General
Washington, DC 20548
December 1992
The Speaker of the House of Representatives
The Majority Leader of the Senate
In response to your request, this transition series report discusses major
policy, management, and program issues facing the Congress and the new
administration in the justice area. These issues include
(1) strengthening leadership and management functions at the Department of
Justice, (2) investigating and prosecuting white collar crime, (3) making
needed policy and management decisions on immigration issues, (4) responding
to a rapid rise in the federal prison population, and (5) making the
government's antidrug efforts more effective.
The GAO products upon which this report is based are listed at the end of the
report.
We are also sending copies of this report to the President-elect, the
Republican leadership of the Congress, the appropriate congressional
committees, and the Attorney General-designate.
The role of the Department of Justice in dealing with the nation's crime
problems has expanded significantly in recent years. Today, the Department has
more staff and is conducting more investigations than ever before. Between
1981 and 1992, the Department's budget increased from $2.35 billion to $10.4
billion. The Bureau of Prisons (BOP) is housing the largest number of federal
inmates in its history. Between 1986 and 1992, the federal prison population
grew by more than 70 percent to 80,000, as of November 1992; from now through
1996, the government will have to spend more than $2 billion to build new
prisons. Inmates convicted of drug offenses now comprise 57 percent of all
federal inmates, demonstrating that the Department's antidrug efforts have met
with some success. Nevertheless, significant challenges remain.
When we issued our first transition series report on justice issues 4 years
ago, we said that the Department needed to strengthen its central management
capabilities and to set priorities for its antidrug programs. Both of these
issues still pose major challenges today. Greater progress has been made in
resolving other issues that we raised in 1988--reforming sentencing, reforming
immigration, and preventing discrimination caused by immigration reform.
The decentralized operations and independence of organizations like the
Federal Bureau of Investigation (FBI) and U.S. Attorneys complicate efforts by
the Department of Justice to coordinate and direct a wide variety of
initiatives and programs to fight crime. The central issue facing the
Department of Justice is how best to provide leadership and ensure that its
priorities are carried out as effectively as possible.
Since 1988, the Department has taken new steps in the area of immigration,
built new federal prisons at a record pace, and dramatically increased its
budget for drug control. It has also had to respond to significant new
challenges, such as the wave of criminal referrals and prosecutions generated
by the savings and loan and banking crises. Financial institution fraud has
also become a major problem. In some areas, the volume of work is overwhelming
the justice system.
In this environment, the issue of leadership is even more important today than
it was in 1988. Additionally, to respond effectively to a rising crime rate,
an exploding prison population, and an intractable drug problem, the
Department requires strong management processes and systems.
STRENGTHENING THE DEPARTMENT OF JUSTICE'S LEADERSHIP AND MANAGEMENT FUNCTIONS
-------------------------------------------------------------------------------
Leading the nation's law enforcement and administration of justice effort has
always been a difficult task. A balance must be struck between the need for
strong leadership in important areas and the benefits of a decentralized law
enforcement mechanism in the hands of U.S. Attorneys. As world history has
shown, too much central police authority can lead to grave abuses. In our
country's system of justice, the creative tension that exists between
centralized and decentralized management and leadership functions has led to
progress on various issues. Nonetheless, given the national scope of some of
the law enforcement issues that we face today, it may be necessary to
reexamine the leadership role of the Attorney General and the relationship
between the Department of Justice and its components and the U.S. Attorneys.
Too little central direction can stymie implementation of national initiatives
as well as lead to inconsistency and inefficiency.
During the 1980s, mounting public concern over crime in general and drugs in
particular turned law enforcement into a growth industry at the state, local,
and federal levels. However, after a decade of higher spending and promises to
reduce the nation's vulnerability to crime, the incidence of violent crime
continues to grow. In view of this growth, the efficiency and effectiveness of
the Department of Justice is critical.
However, the success of the Department in accomplishing its mission is
complicated by its highly decentralized operations and the independence
afforded its agencies and offices. The Department needs to strengthen its
central management systems to ensure that they provide the Attorney General
with the information necessary to effectively establish, communicate,
coordinate, and oversee national goals and priorities.
There is an issue as to whether the Department is currently able to give
proper perspective to the interrelationships among its components.
Coordination among the various components of the criminal justice system is
essential. At present, in enforcing drug laws, FBI and the Drug Enforcement
Administration (DEA) independently develop investigative strategies and
priorities, operate separate intelligence systems, and use different systems
for reporting and measuring their effectiveness. This degree of independence
requires good central oversight to ensure overall efficiency and
effectiveness. Anticipated federal budget cuts and the continued growth in
violent crime--particularly in the use of firearms-- further highlight the
need for better interagency coordination.
It is also important to ensure that field level decisions are sufficiently in
keeping with national law enforcement priorities. Justice components, located
throughout the country, have the flexibility to structure their programs
differently. They are able, for example, to set different operating thresholds
for investigating and prosecuting offenses for which mandatory sentences have
been established by law. Yet despite the existence of workload constraints and
local priorities, as well as the desirability of prosecutorial discretion,
strong central oversight is needed to ensure that national law enforcement
programs are focused on--and consistent, efficient, and effective in
pursuing--national goals and priorities.
Such oversight, however, cannot be brought to bear without good management
information systems and meaningful measures of performance. In each of these
areas, there is room for the Department to improve. For example, after a
number of false starts and over a decade of effort, the Department still does
not have in place a case management system that can track cases being
litigated and the total number of staff in the litigating organizations
working on them. Similarly, while the Department has several numerical
measures of its activities, these measures do not readily indicate the degree
to which the Department's national goals are being achieved.
The Department also needs to resolve jurisdictional disputes. For example,
within the Office of Justice Programs (OJP), conflicts exist between the five
OJP bureaus and OJP management over individual bureau autonomy. To address the
disputed lines of authority, the Attorney General in 1991 conferred on the
Assistant Attorney General for OJP certain grant-related authorities
traditionally held by the bureau directors. This solution not only created
additional management problems but violated the statutes establishing the
bureaus. Although OJP and the bureaus are working to resolve the management
conflicts, tensions remain.
Given the national significance of law enforcement issues and the problems
inherent in addressing them, it is important to assess the appropriate
leadership role for the Office of the Attorney General. Central to this
assessment is achieving consensus within the Department on how to focus
federal resources effectively on key issues.
INVESTIGATING AND PROSECUTING WHITE COLLAR CRIME
-------------------------------------------------------------------------------
The staggering costs of the financial institution debacle, Wall Street insider
trading, the Department of Housing and Urban Development scandal, fraud in the
growing number of bankruptcies, and fraud associated with health care all
reflect the magnitude of "crime in the suites." Often, perpetrators of white
collar crimes occupied positions in government, industry, and civic
organizations and were highly regarded within their communities. By abusing
their positions of trust, white collar criminals undermine the integrity of
their professions and of government and, ultimately, are responsible for the
loss of billions of dollars annually from the nation's economy.
Increasingly, white collar crime cases are overwhelming the justice system, as
the following examples show.
-- Criminal financial institution fraud referrals continue to increase. More
than 35,000 referrals were submitted to FBI in fiscal year 1992--up from
25,000 in fiscal year 1991.
-- U.S. Attorneys in several large districts generally decline to prosecute
health care fraud cases under $100,000.
-- FBI reports that bankruptcy fraud is largely unaddressed and that
bankruptcies are ripe for abuse: The number of filings has more than
tripled over the last 10 years.
-- As of September 1992, Justice had received referrals of alleged criminal
activity by former directors, officers, and principal shareholders
associated with 336 of the 723 savings and loans under Resolution Trust
Corporation control. As of July 1992, Justice had indicted directors,
officers, and principal shareholders in 72 of these savings and loans.
In response, the Department has applied significantly more resources. FBI, for
example, has tripled the number of agents working on white collar crime since
1985. Congressional appropriations have allowed a tripling of U.S. attorney
resources dedicated to financial institution fraud. As the available resources
have grown, so have the number of indictments, arrests, and convictions. For
example, the number of defendants sentenced to prison for white collar crimes
increased from 4,350 to 5,300 between fiscal years 1985 and 1991.
However, the Department alone cannot adequately address white collar crime.
Effective intervention requires a more cohesive federal response, using the
full range of the government's resources and expertise. Yet Justice's ability
to address white collar crime is hampered both by the decentralized nature of
the Department and by the structure of the government as a whole. Individual
U.S. Attorneys around the country exercise great discretion in managing their
programs and resources. In addition, Justice has little, if any, influence
over agencies outside the Department--such as the Internal Revenue
Service--that are often critical for effective investigations and
prosecutions. These organizational barriers have resulted in a fragmented
approach to pursuing white collar crime. For example, efforts to form
financial institution fraud task forces around the country were largely
unsuccessful because Justice and non-Justice agencies could not agree on the
appropriate level of non-Justice resources and on which agency should pay for
these resources. In addition, some U.S. Attorneys, who preferred to work
independently, rejected the task force concept.
Another issue associated with white collar crime is whether the punishment is
severe enough for the offense committed. For example, the median prison
sentence in 1991 for fraud was 21 months. Fewer than 7 percent of the fraud
convictions since 1988 involving savings and loan and bank losses of $100,000
or more received prison sentences of 60 months or more. While fines and
restitutions ordered in these cases have totaled nearly $850 million, less
than 5 percent of these funds had been collected through mid-1992. Justice
says that most of the balance is not collectible. Whether or not this is the
case, Justice's collection efforts lack a consistent approach and an adequate
database.
We recognize that the Department does not control the specific sentences and
monetary penalties imposed for crimes. However, the Department is the logical
focal point for
(1) determining whether the punishment being meted out provides the necessary
deterrent effect and (2) seeking change if needed. Furthermore, the Department
needs to make a stronger effort to ensure the collection of as large a portion
as possible of the total monetary penalties imposed.
Justice, working with other departments and agencies, needs to take a number
of steps to better address the growth in white collar crime. Paramount is the
need to better integrate the efforts of Justice and non-Justice agencies into
a cohesive national response. Finally, Justice, working with the
Administrative Office of the U.S. Courts, should improve its management of
debt collection.
MAKING NEEDED POLICY AND MANAGEMENT DECISIONS ON IMMIGRATION ISSUES
-------------------------------------------------------------------------------
As long as political unrest and economic hardships persist throughout the
world, refugees will continue to flee to the United States. Hence, the United
States will continue to face complex and difficult immigration issues, such as
-- who should be permitted to legally enter the country,
-- what should be done to prevent aliens from entering illegally, and
-- what should be done to remove aliens who remain here illegally.
In addition to these policy issues, management problems within Justice's
Immigration and Naturalization Service (INS) need to be resolved.
From without and from within, the United States is pressured to allow refugees
to enter the country legally to escape intolerable conditions in other
countries. For example, as civil unrest, poor economic conditions, and natural
disasters occur in other countries, refugees look to this country as a safe
haven. U.S. citizens are often eager to facilitate the entry of refugees whose
ethnic background is the same as their own. This pressure can lead to
different immigration policies being applied to refugees from different ethnic
backgrounds. For example, Cubans are readily permitted to enter and remain in
the country, whereas Haitians are interdicted at sea and returned to Haiti.
In addition to regulating the access of aliens seeking legal entry, INS is
responsible for stopping millions of aliens trying to enter the country
illegally. Some of these aliens smuggle contraband, such as drugs. Preventing
illegal entry raises several issues, including (1) the feasibility and
effectiveness of different approaches to, and technologies for, improving
border control;
(2) humanitarian concerns, such as equitable treatment of aliens of different
nationalities and divided families; and (3) cost considerations and
trade-offs, such as choosing between detaining aliens and preventing their
illegal entry. Conflicting with INS' border enforcement role are trade
facilitation objectives calling for the efficient flow of goods across the
border.
In removing aliens from the country, INS is confronted with the almost
impossible task of trying to locate and deport aliens that it believes should
not remain here. For example, aliens who have committed certain crimes are
subject to deportation but are required to have a hearing before an
immigration judge to establish their deportability. INS does not have
sufficient resources to detain the millions of aliens who are subject to
detention or who have been ordered deported. Consequently, most of the aliens
whom INS apprehends are released pending the resolution of their deportation
hearings. However, these aliens usually do not appear for their hearings and
remain here illegally.
In addition to these difficult policy issues needing congressional and
administrative attention, INS needs strong leadership and management to
-- balance the demanding roles of enforcement and service and
-- overcome problems in the management of its enforcement efforts and of the
services that it provides to aliens.
Managing such competing enforcement and service functions means making hard
decisions about allocating resources to ensure the agency's most effective
operations. Over the past decade, weak management systems and inconsistent
leadership at INS led to segmented autonomous programs, each of which tried to
handle its own set of problems and gave little attention to interrelationships
among programs. Without coherent overall direction and basic management
reforms, the organization was unable to effectively address changing
enforcement responsibilities and long-standing service delivery problems. In
response to these problems, INS reorganized its management and operations.
Financial management at INS was weak, and the agency did not have fiscal
accountability over its resources. Its outmoded accounting system, weak
internal controls, and lack of management emphasis on financial management
contributed to this situation. INS could lose millions of dollars in revenue
because accurate and reliable financial information is not available to
effectively bill, collect, or litigate amounts owed the government.
Furthermore, the agency's primary accounting system contained incomplete and
inaccurate financial data. These weaknesses remained uncorrected for many
years. Addressing these problems, which INS can do in implementing its Chief
Financial Officers Act, will require strong and sustained management
commitment and leadership.
In the past, INS' budget development process was chaotic. The agency's budgets
were simply compilations of program submissions with little accountability for
funds or attention to agencywide priorities. The current INS reorganization
addresses some concerns but has not fully resolved the issue of segmented
management. Although INS is addressing some of these management problems,
action is still needed to improve program enforcement and service. For
example, even though aliens pay fees to cover processing costs, they still
have to wait months to have their applications processed. While expenditures
nearly doubled between fiscal years 1986 and 1989, overall processing times
have not improved, and in key INS districts processing times have
substantially exceeded INS' criteria.
During the last several years, the Office of the Attorney General has focused
much more effectively on management issues relating to INS. New people have
been recruited for key positions, and a renewed effort has been made to deal
with the long-term problems that exist at INS. Achieving progress will be
difficult, but we are encouraged by the departmental commitment to bring about
change. It is important that this commitment be sustained in the years to
come.
RESPONDING TO A RAPID RISE IN THE FEDERAL PRISON POPULATION
-------------------------------------------------------------------------------
A growing prison population was perhaps the most visible result of the
increases in federal resources--investigative, prosecutorial, and
judicial--devoted to federal criminal law enforcement in the 1980s. Policy
initiatives--such as an expanded "drug war," implementation of federal
sentencing guidelines, and the enactment of mandatory minimum sentences for a
number of drug and firearms offenses--have led to a rapidly growing federal
prison population that generally serves longer sentences. This rising
population has strained prison capacity and budgetary resources. Indeed, the
major issue facing the federal corrections system is finding less costly ways
of achieving the corrections goals of deterrence and public safety while
providing inmates with humane care and services that equip them to become
law-abiding citizens upon release.
Between fiscal years 1986 and 1992, the federal prison population grew from
41,500 to 70,630; by 1996, a population of about 106,000 is projected. One
reason for this expected future growth is the implementation of federal
sentencing guidelines, which took effect on November 1, 1987. Reflecting the
"get tough on crime" policies of the last decade, the guidelines offer judges
fewer nonprison sentencing options for most offenders. Consequently, a greater
proportion of convicted offenders are going to prison for longer terms,
decreasing the turnover in the federal prison population and increasing
capacity requirements. In 1990, about 74 percent of offenders sentenced under
the guidelines were sent to prison, as compared with 53 percent in 1986,
before the guidelines took effect. The length of the average sentence in 1990
had increased by about a year--from 53 to 61 months. Moreover, because parole
had been eliminated under the guidelines, an inmate could expect to serve, on
average, almost 3 years longer--from about 19 to 52 months.
Drug offenders will continue to have a major impact on the federal corrections
system. Inmates convicted of drug offenses now comprise 57 percent of all
federal inmates, and they are expected to constitute about two-thirds (71,000)
of the 1996 population. Under the guidelines, almost 9 in 10 convicted drug
offenders are sentenced to prison for an average of 83 months--at least 70
months of which they can expect to serve.
The costs of housing and caring for this growing population continue to rise.
Between 1986 and 1992, corrections budgets, primarily for federal prisons,
nearly quadrupled from about $600 million to about $2.3 billion. Despite the
increased use of 2-person cells and plans to activate 44 additional facilities
with a capacity of about 30,000 inmates between 1992 and 1996, BOP expects the
growth in the inmate population to outstrip the increase in capacity by about
6,000 inmates. The estimated cost of constructing these new facilities is
almost $2.2 billion. BOP estimates the costs of operating these new
facilities, over their useful life, at about 15 to 20 times the construction
costs.
These rapidly rising costs have focused attention on the costs of traditional
incarceration. Given an average annual cost of about $18,000 per inmate for
traditional imprisonment, the Sentencing Commission, BOP, and the courts need
to explore means of reducing corrections costs. Where possible, less costly
minimum security facilities should be used. The current limited use of prison
alternatives--such as "boot camps" (also called "shock incarceration") for
first offenders, halfway houses, electronic home detention, and intensified
supervision--should be evaluated and expanded where feasible. Furthermore, BOP
may need to use intermediate forms of confinement, such as halfway houses,
more extensively to reintegrate long-term inmates into the community upon
release. To do this, BOP must also work more closely with the federal courts'
probation service to provide prerelease plans that include an inmate's medical
profile, substance abuse history, and other information needed to develop an
appropriate supervision plan.
Regardless of the form of confinement used, BOP faces a challenge in meeting
the medical needs of its growing and aging inmate population, many of whom
have special needs. About half of all entering inmates have a substance abuse
or dependency problem, but fewer than half of these are receiving treatment.
In 1992, BOP spent almost $5 million treating about 1,200 HIV positive
inmates, about 200 of whom had AIDS--a problem that is expected to grow as the
prison population expands. In the close confines of prison life, the emergence
of a drug-resistant strain of tuberculosis is also a potentially grave medical
problem. The female inmate population, now about 8 percent of the total
federal prison population, is growing faster than the male population and
requires special medical procedures, such as breast cancer screening.
BOP is grappling with the rising costs of meeting inmates' medical care needs
and hiring trained medical staff. BOP reprogrammed over $4 million in 1991 and
1992 to provide for increased outside medical care costs and requested an
additional $4.5 million in fiscal year 1993. BOP must decide whether to
increase its own medical care capacity or meet rising medical care needs
through contract care. Even with the additional capacity planned between now
and 1996, BOP anticipates that its ratio of medical beds to inmates will fall
from the current 27 beds per 1,000 inmates to about 23.
Building even more medical facilities would add to an already costly
construction program, and BOP may have difficulty staffing any new facilities.
Despite an enhanced recruitment effort, at the end of fiscal year 1991, BOP
had filled about 59 percent of its authorized positions for nurses and 66
percent of its positions for medical officers. Given the difficulties of
recruiting qualified medical personnel, predicting the amount and type of
medical care that inmates may need, and meeting the costs of increasing
existing medical care capacity to accommodate those anticipated needs, BOP
should consider alternative methods of health care delivery. These
alternatives might include contracting out for prison medical services and
enhancing preventive care programs. In contracting out, health maintenance
organizations or preferred provider models might be used.
MAKING ANTIDRUG EFFORTS MORE EFFECTIVE
-------------------------------------------------------------------------------
To combat the drug problem, the Congress created a Drug Czar--Director, Office
of National Drug Control Policy (ONDCP)--in the Executive Office of the
President. Starting in 1989, ONDCP was to plan a drug war (establish a
national drug control strategy, including long- and short-term goals),
annually develop a governmentwide budget to carry out the war, and annually
report to the Congress on the progress of the war and revise the underlying
strategy as appropriate. Despite the creation of ONDCP, the drug problem
persists.
Under ONDCP's guidance, the federal government dramatically increased drug
control funding in three key program areas: (1) stopping drugs from entering
the country, (2) enforcing domestic laws against drug trafficking and
possession, and
(3) providing drug treatment and prevention services. For fiscal years 1989
through 1992, the federal government committed $39 billion to reduce drug use.
Of the $12 billion currently spent each year on drug programs, over 70 percent
is expended on law enforcement as opposed to treatment; almost $3 is spent on
law enforcement for every $1 spent on treatment.
While the number of illicit drug users has declined somewhat, the numbers of
drug-related homicides and hospital emergency visits and deaths remain near
record highs, as does drug use by arrested criminals. Policymakers will be
asked to consider what more can be done to alleviate our nation's persistent
long-term drug problem and halt the spread of drug-related crime and violence.
Should the new administration stay the course, as ONDCP advocates, or place
greater emphasis on drug prevention and treatment?
ONDCP's annual strategies have not set clear expectations for each drug
control program. Without such expectations and without objective data to
measure progress toward meeting those expectations, there is little basis for
judging either the efficiency of the strategy in committing resources or the
efficacy of the strategy's program components. For example, intelligence data
indicate that overseas production of cocaine has grown consistently over the
past 10 years and that domestic prices are much lower today than they were 10
years ago. Neither the strategy nor the drug budget relates these conditions
to the missions of drug programs or evaluates the implications of these
conditions for current strategy. In short, accountability is lacking for the
billions of dollars being spent on the nation's drug control programs.
ONDCP, through its annual drug strategy, should and must establish
accountability for the billions being spent on the drug war. Developing
accountability and performance measures is difficult. However, tying the
financial costs of drug control programs to program results is fundamental to
making informed policy decisions.
To achieve accountability over the nation's drug control efforts, ONDCP needs
to develop outcome-oriented goals for each drug control program. Currently,
the drug strategy does not include such goals. Furthermore, there is little
information for judging whether the new administration should place more or
less emphasis on drug prevention and treatment programs. Specifically, ONDCP
needs to develop databases to collect baseline data on law enforcement and
treatment efforts.
During 1993, the Congress will hold hearings on the reauthorization of ONDCP.
As a focal point for these hearings, ONDCP, the drug control
agencies--including the Department of Justice and the Department of Health and
Human Services--and the oversight committees need to focus on identifying
appropriate measures of accountability. By and large, these collaborative
efforts should be aimed at reaching agreement on the best available benchmarks
of performance and the most reasonable expectations for programs, given the
level of resources committed.
