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February 1, 2010

DOJ budget request for FY 2011 suggests it is not tightening its belt

Available today from the US Department of Justice's website is this new press release titled "Department of Justice FY 2011 Budget Request."  These parts of the text of the release suggests that the talk of a spending freeze is not applicable to even the regular law enforcement activities of the federal government:

Attorney General Eric Holder announced today that President Obama’s Fiscal Year (FY) 2011 budget proposal totals $29.2 billion for the Department of Justice (DOJ) to increase support for the department’s national security and traditional law enforcement missions, renewed focus on economic crime and financial fraud, while strengthening state, local and tribal public safety efforts. The request represents a 5.4 percent increase in budget authority and an increase of 2,880 positions over the FY 2010 enacted appropriation....

FY 2011 program increases and key priorities include:

  • $300.6 million increase to strengthen national security and counter the threat of terrorism;
  • $234.6 million increase to defend the interests of the United States, including fighting financial fraud;
  • $121.9 million increase to reduce violent crime and drug trafficking;
  • $722.5 million increase to assist state, local and tribal law enforcement, including the Adam Walsh Act;
  • $19.8 million increase to protect civil rights and vulnerable populations;
  • $15 million increase to combat international organized crime;
  • $527.5 million increase to maintain prisons, detention and parole services and judicial and courthouse security;
  • $11 million increase to enforce immigration laws; and
  • $448.8 million in total resources to ensure public safety in Indian Country.

The items I have highlighted here strike me as especially disappointing in light of all the talk of belt-tightening in the President's State of the Union Address last week.  As I suggested before, I thought regular criminal justice issue would be part of this pledge in the SotU:

Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected. But all other discretionary government programs will.  Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't.

Especially given that crime rates are hitting record lows, and also given that there are good reasons to believe that crime-fighting resources are always best invested at the local level, it is especially troublesome to see DOJ seeking an increase in funding of almost $1,000,000,000 for growing the federal criminal justice system in FY 2011 on top of seeking another increase of nearly $750,000,000 in federal dollars in order to grow state, local and tribal criminal justice systems.

Given that the federal government is truly cash-strapped, where is the evidence that "we need" to invest close to two billion federal taxpayer dollars in growing the size of our nation's various criminal justice systems?  I fully understand both the political and practical disinclination to cut criminal justice spending even when crime is declining.  But what sound basis is there for continuing to grow a federal criminal justice system that is already at a record size?

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Comments

Almost makes me want to join the Tea Party Movement. It's ridiculously unresponsive.

Posted by: beth | Feb 1, 2010 7:39:57 PM

Professor, I'm a huge fan of this blog, but if you think that state, local & tribal criminal justice systems are somehow overfunded, I would invite you to walk down to your local district court any day of the week and see how police, prosecutors and judges are being overwhelmed by the volume of criminal cases.

I'm not an expert on the federal system, so I can't speak to that. But your cavalier attitude towards the needs of state & local criminal justice systems needs an adjustment.

Oh, and by the way -- $1 billion plus $750 million = $1.75 billion, not "close to two trillion federal taxpayer dollars..." As lawyers, I understand that math can sometimes elude us. But your inaccuracy (or hyperbole) here does you an injustice.

Posted by: NCProsecutor | Feb 1, 2010 8:16:19 PM

Every government department and agency feels they are underfunded and can make a case for more tax money. Every private business would like to have more government contracts. Every property owner would like a 30 year lease from a government agency. Everyone believes they are the most essential. We need to think of a better way of doing business.

Posted by: beth | Feb 1, 2010 10:05:46 PM

The belt tightening is always postponed to next year. I'll believe it when a budget cut actually means a budget cut not a decrease in the rate of budget growth.

Posted by: Soronel Haetir | Feb 1, 2010 11:26:38 PM

Thanks, NC Prosecutor, for catching that I wrote "trillion" when I obviously meant "only" billion. I have fixed this typo.

But as you lament that state and local police, prosecutors and judges are being overwhelmed by the volume of criminal cases, I wonder if you could/would realistically distinguish drug crimes and other crimes. I have long believed that if we could take a public health approach to drug crimes (especially pot), state and local police, prosecutors and judges would have more time, money and energy to focus limited resources on the biggest threats to public safety.

I do not mean to be cavalier, just realistic in an era where all government programs need to be made much more efficient and effective. And I see a lot of "fat" and waste in the way we define and prosecute and punish crimes throughout the United States.

Also, what about federalism principles: why should federal tax dollars coming from, say, Texas taxpayers be redistributed to fight local crimes in California or Florida? To its credit, Texas has done a good job in recent years making the best use of limited state tax resources in its criminal justice system, while California and Florida have not managed its criminal justice budgets well at all. Why should the feds take monies from the efficient and effective folks in Texas to enable California and Florida to continue with their more wasteful and harmful criminal justice systems?

Posted by: Doug B. | Feb 2, 2010 12:03:25 AM

I notice that there is no mention of "priority" for any spending on evaluation and research to determine if the spending will have the positive impacts we presume are desired. Did analysis and evidence-based practice get any increase at all? Tells you all you need to know about that spending and the mentality of the people doling out the tax dollars.

Posted by: Michael Connelly | Feb 2, 2010 8:31:42 AM

I feel the frustration in the comments above. They contain a basic misunderstanding. Job One and Job Last of government is to protect the public. No.

The budget reflects lawyer rent seeking. Job One is to provide sinecures for government workers. The budget reflects the outcome of an internal debate about who has more pull and not any externally validated value to the public. Understand the Rent Seeking Theory and many anomalous lawyer decisions become crystal clear.

Posted by: Supremacy Claus | Feb 2, 2010 9:54:13 AM

So, uh, where's the money to fund indigent defense? Or are we just happy to beef up just one side of the system?

Posted by: David Corbett | Feb 2, 2010 10:10:57 AM

Here's a really interesting chart for the full budget, all the criminal justice stuff is in the "Administration of Justice" box in the lower right- Click Here. You can click on the chart to zoom in and bring it up in more detail. I thought it was interesting that the crime victims fund is being increased by 659% (nothing wrong with that).

Posted by: JC | Feb 2, 2010 11:39:21 AM

At the federal level, David, finding for indigent defense is done through the Judicial Branch, not the Executive Branch. That's why you don't see it in this DOJ budget proposal.

However, givent he DOJ's increase, I am interested to see what the budget proposal looks like for the courts and particularly indigent defense.

Posted by: anon | Feb 2, 2010 11:49:09 AM

More evidence, if any were needed, that we park our brains (and guts) at the door when the issue is spending for military-empire or law-enforcement industries.

It took nearly 40 years, but the states are finally discovering the limits of indulging crime-issue demagogues masquerading as elected leaders.

It's unlikely the federal government will run out of money or prison space since it prints its money in the basement. Even so, the public remains largely in the dark about how federal crime fighting resources sometimes get used.

The DOJ budget story brings to mind a recent case in which the FBI set up a sting for a local politician it suspected of mortgage fraud in the sale of her house.

On the day the sale was to close, the FBI deployed seven agents equipped with cameras and communication gear to follow the politician and record her every move throughout the day. Seven.

Despite the feds' elaborate (costly) efforts to foster a crime(deploying an undercover appraiser to goad the original appraiser to "inflate" his appraisal and thereby keep the ruse alive, directing the lending company to refrain from performing its routine independent appraisal check on properties selling for more than $1 million and then paying the FBI-planted appraiser to do an appraisal that, wonder of wonders, turned out to be lower than the asking price and the original appraisal, etc. etc. etc.) the politician was acquitted.

Your tax dollars at work.

Still I feel certain the department will get its 3,000 new employees. We should probably feel fortunate it did ask for 6,000.

Posted by: John K | Feb 2, 2010 12:27:22 PM

I enter this post very cautiously, knowing that any criticism I offer is of a very well-educated opinion. However, I think that my observation is well grounded. Professor Berman highlighted protecting the United States interests, fighting financial fraud, as an area of concern. Specifically, he seems upset with the spending of $234M during this time of fiscal belt-tightening. His criticism with respect to this category lacks merit.

The white-collar community within federal law enforcement recovers more than it costs to fund every year. With respect to DOJ, since that is the agency criticized by Professor Berman, there are three primary agencies that investigate fraud:(1) the FBI, (2) DOJ-OIG, and (3) IRS-CI. Post 9/11 the FBI shifted resources to terrorism, leaving government fraud largely to the OIG's. This fact is well known within the prosecutorial and federal law enforcement community, but can be observed objectively through the creation of such beasts as the National Procurement Fraud Task Force. There, the OIG's play a very prominent or even dominant role over the FBI. This observation does not of course seek to diminish those FBI agents still fighting the good fight in white-collar. It is just an observation that they don't have the manpower or resources that they use to.

With this depletion of manpower and funding in white-collar crime investigations, the enforcement in this area is naturally diminished. Any fraud expert, as I consistently read in publications, will say that without an active enforcement or policing of internal management controls, fraud will flourish and a business will lose money.

It may seem counter-intuitive, but to save government money, it is necessary to spend money on enforcement. The FBI needs to get back in the game of white-collar crime, and the DOJ-OIG and IRS-CI can simply continue doing what they already do-consistently recover more money each year than Congress gives them. I give pause before I ever say "grow government," but good business practices support a robust enforcement of white-collar crime within the government, not fiscal belt-tightening.

I am a student of Professor Osler's visiting from Osler's Razor.

Posted by: Brian H. | Feb 2, 2010 2:46:37 PM

The student expresses wisdom beyond his years. White collar fraud investigation is a net gain for society. Where enforcement is lacking- Medicare spending for example- fraud is widespread and done with impunity.

Posted by: mjs | Feb 2, 2010 4:07:10 PM

Good comments, Brian, especially if/when we are concerned only about frauds against the government fisc. But how can we test or be confident that DOJ generally will "recover more money each year than Congress gives them"?

Moreover, if your assessment is right, my complaint will then become why are we putting 2 times as much into "maintaining prisons et al." than into the areas you mention? If we really "make money" with more DOJ folks policing procurements, we should devote all our "extra" resources there until we get to a point of diminishing returns.

Of course, the biggest problem is that we can never be sure if/when we have hit a point of diminishing returns (here or with prison spending or with any other government spending) until, as Michael Connelly notes, we start to prioritize "spending on evaluation and research to determine if the spending will have the positive impacts we presume are desired."

Posted by: Doug B. | Feb 2, 2010 6:17:01 PM

Professor Berman-Let me clear, I am not claiming that DOJ generally recovers more money each year than what is received from Congress. The focus of my comment was white-collar crime, where I am confident that my claim is correct. With respect to testing or maintaining confidence in DOJ with respect to recoveries from frauds gives rise to a very common misunderstanding about the focus and purpose of fraud investigations. Naturally one might assume that investigators stand by waiting to react to reports or discoveries of fraud, perhaps even proactively seeking out the frauds. This detection, whether it occur through reactive or proactive measures, results in very tangible numbers with respect to recoveries through asset forfeiture, seizures, restitutions, and fines. But, the much more difficult number to quantify is the cost avoidance that occurs through deterrence. Fraud professionals are unified in the conclusion that deterrence does more than detection ever will. In this respect, DOJ fails because, with the exception of the DOJ-OIG, the agency goals are investigation and prosecution. However, the goal is not lost on the Inspector General community as a whole. Much of the fight with respect to fraud, waste, and abuse focuses on internal management controls designed to prevent fraud. The game is not one of “gotcha” where the system is set up to help catch the criminal; rather, the detection of fraud occurs with a failure of the system.

While I encourage DOJ, especially the FBI, to come back to the white-collar crime game, the focus should really be on increasing the size of the OIG’s. Right now, the OIG’s struggle because of the lack of resources, turning to the FBI as a force multiplier to accomplish the mission. An earlier comment referenced medicare fraud; it is no coincidence that Health and Human Services has one of the largest, if not the largest OIG. What may be surprising is that the Department of Defense only has about 400 fraud agents, but controls the largest budget in the federal government. A look at history though is very telling. Congress passed the Inspector General Act in 1978, but surprisingly the Department of Defense was able to convince Congress that they did not need an IG. The DOD-OIG was not added until 1983. A natural tension arises when the executive branch is saddled with agency inspector generals that have a direct reporting requirement to Congress. Then, there is of course a natural tension between an executive agency head and the inspector general because the goal of the IG is to root out and air all of the agencies dirty laundry.

The issue comes full circle when funding for the Inspector General community comes before a Congress that either does not understand the dichotomy between detection and prevention, or simply does not care to try and sell the intangible cost avoidance theory to an electorate. A well-funded Inspector General community would reduce the need for reliance on the FBI as a force multiplier, thus reducing the redundancy in the budget for investigations. With this plan, we could indeed “make money,” but critics would have to be willing to look not only at tangible recoveries, but reduction in losses from previous years when such efforts were not undertaken.

The truth is, none of this is rocket science when it is dissected, and really none of it is an original thought of mine. Big businesses recognized the above principles and dump a much larger percentage of revenue into prevention and detection than the government does. But then again, I have never believed that the government focused on running an efficient business. I hope this addresses your very accurate citation of Michael Connelly.

Posted by: Brian H. | Feb 2, 2010 7:06:19 PM

John K --

Yes, there are acquittals. That doesn't mean the defendant didn't do it, as OJ Simpson proved, but they are the price we pay. So be it.

Of course, if there were NOT acquittals, you would complain that the system was rigged. Oh wait! You complain it's rigged anyway! To read your posts, it's rigged when there are acquittals, convictions, and hung juries. Indeed it's rigged at the grand jury stage. I have yet to see you discuss a single specific case where it WASN'T, according to you, rigged.

Yikes.

Have a look at the discussion among Doug, Brian and mjs if, perchance, you have an interest in seeing what a balanced approach looks like.

Posted by: Bill Otis | Feb 2, 2010 7:53:07 PM

Bill says, "Yes, there are acquittals. That doesn't mean the defendant didn't do it..."

Uh huh.

Bill...I hope, pray really, that you don't believe John K is the only outspoken critic who thinks the federal system is indeed rigged against citizens who find themselves accused of technical regulatory infractions and bogus derivative crimes.

Actually, there's quite a few of us.

As for the "balanced discussion"... First, I see no evidence, zero, that the FBI was diverted from fraud after 9/11. What I do see are occasional stories saying it happened... always in the context of requesting more money to hire more FBI people.

Yet hardly a month has gone by in the past five or six years without a story or two in my local metro paper noting protracted investigations and splashy roundups of white-collar suspects by platoons of FBI agents.

In the area I've been looking into (the DOJ's mortgage fraud crusade), the "recoveries" have been derived largely from low-level people who processed loan apps for conglomerates eager and impatient to package and sell as many loans as brokers could bring them...and typically without underwriting them or disclosing their risky nature before sending them off to Wall Street.

And for years while the DOJ was fixating on bluish-collar loan originators earning hundreds of dollars per deal in commissions (mortgage brokers and appraisers), fat-cat bankers and mortgage lenders who created "liar's loans," no-asset loans and other risky instruments were pulling out all the stops to speed shaky loans toward securitization and, ultimately, the near collapse of the economy.

These same fat cats were the prime beneficiaries of the asset seizures and restitution orders. They also were routinely provided with FBI investigation files to be used as templates for RICO suits against the underlings who did their bidding.

So yes, Brian H, the DOJ has sometimes functioned as bagman for some of the same companies that nearly brought the house down.

Beyond that, law enforcement shouldn’t be expected to function as a profit center. And I’d wager it could boost the economy more efficiently by educating gullible consumers and teaching business people how to comply with the growing constellation of federal laws capable of landing them in prison.

Posted by: John K | Feb 3, 2010 1:01:11 AM

John K. - Your rage is quite understandable considering the current state of the economy. That said, I did not form my comment based on headlines, rumors, or studying theory in books. I was a special agent for 8 years. I was a special agent on 9/11 through 2008. Then I made the decision to go to law school. Post 9/11 I was on the inside of federal law enforcement watching the evolution and mutation of an already monstrous beast into what we have today. I am a plank-holder (original founding member) of the International Contract Corruption Task Force, forward deployed to Baghdad, Iraq, as part of the National Procurement Fraud Task Force. I would not have been among the hand-selected few inserted in a combat-zone to deal with fraud in a multiagency environment if persons of greater experience than me did not trust my opinion. With respect to white-collar crime, I offer an informed opinion that I can reasonably defend.

Your rage, while understandable, is uninformed. Uninformed opinions invariably lead to incorrect conclusions. For this reason, I cannot discuss this subject with you until you are prepared to tame your rage, educate yourself from more than newspaper headlines and coffee shop rumors, and return prepared for informed discussion.

Posted by: Brian H. | Feb 3, 2010 1:29:49 AM

Please, anything but that.

Posted by: Mark # 1 | Feb 3, 2010 11:10:54 AM

It's remarkable, but not surprising, how swiftly and seamlessly Bill, a former prosecutor, and Brian, a former special agent, pull rank and put the argument on an ad hominem track.

Maybe now I should show them my resume since they showed me theirs (18 years in the DOJ for Bill and eight years for Brian). But I'm seasoned enough to realize the argument's usually over when it reaches that stage.

So instead I’ll move on to other topics… and begin working on my rage issues.

Posted by: John K | Feb 3, 2010 1:21:54 PM

John K --

I don't think anger is the major problem.

The major problem is bias. And your bias is over the top.

Exhibit A: You directly imply that OJ Simpson's acquittal means he didn't do it. I don't know a single sensate person who believes that. At some level you don't believe it either, but you are ideologically incapable of saying: No, the government didn't set up Simpson. He did it and then beat the rap.

Exhibit B: Your principal theory of defense for these mortgage fraud swindlers of whom you're so fond is not that their behavior was either honest or legal, but that there are others -- uncharged or unconvicted -- whose behavior was even MORE dishonest and illegal.

Now THERE'S one hell of a defense.

Posted by: Bill Otis | Feb 3, 2010 6:55:49 PM

I agree anger isn't a problem, Bill. The rage remark was a sarcastic response to Brian H's blithe dismissal of my comments.

I agree OJ did it. It was your begrudging allowance that acquittals are a "price we have to pay" that I found amusing.

And the "mortgage fraud swindler" I was talking about was charged with felonies for following the lender's instructions for the preparation of loan apps. The lender was then presented by the government as the victim of its own directives.

So I guess we’ll be using the “You can’t cheat an honest man” defense.

In a sane legal system, “material omissions” on documents slated for rigorous scrutiny in underwriting might merit a fine or, at worst, a misdemeanor charge, but certainly not a felony punishable by 30 years in prison.

After all, even minimum-wage clerks with no underwriting training are capable of noticing blank lines where truly crucial information is supposed to reside.

Lenders who coach brokers to omit info and then put their loan apps through without underwriting should face the same charges as the broker.

That’s all I’m saying.

BTW: I responded to your Vrdolyak comments of Jan. 30.

Posted by: John K | Feb 3, 2010 11:00:04 PM

well bill we can tell your a lawyer. ONLY a lawyer would say someone who was found NOT GUILTY by a criminal court was REALLY gulity! Sorry legally HE'S NOT GUILTY!

that's the end of it.

we won't even get started talking about a criminal crock of a so-called "civil" trial where you can possibly be convicted of something that a more strict CRIMINAL trial said you DIDN'T DO!

Posted by: rodsmith3510 | Feb 4, 2010 3:31:18 AM

Rod-A finding of guilty means that a prosecutor was able to prove beyond a reasonable doubt that a person was responsible for a crime. However, a finding of not guilty does not mean the person was not responsible for the crime, only that the prosecutor did not meet his burden of proof beyond a reasonable doubt.

To illustrate, imagine that 99.9% certainty is what a prosecutor must prove for a jury to make a finding of guilty (the .01% is left for unreasonable doubt). If the prosecutor only gets to 95%, then the jury has no choice but to return a verdict of not guilty. The opposite of GUILTY is not NOT GUILTY, it is actual innocense. If you notice, when a person publicly responds to charges, he/she does not say "I am not guilty;" rather, the person says "I am innocent of all charges." These statements are often made with the advice of counsel.

Now, in a civil case, for one side to win, they need only prove by a preponderance of the evidence that the other party is responsible. This means that it is more likely than not that the person is responsible. You can think of this as a 51% chance that the person is responsible. This is what happened in the OJ Simpson case. A prosecutor was unable to hit 99.9%, but the family in a civil trial was able to hit the 51% mark. Thus, a civil conviction is possible when a criminal trial fails because there are different standards required for the conviction.

You were quite correct to note that criminal trials are stricter, but this is because personal liberty is at stake. Your Constitution demands a higher standard of the government when bringing charges against a person that may result in a significant deprivation of liberty-the lawyer way of saying "prison."

Posted by: Brian H. | Feb 4, 2010 10:29:15 AM

rodsmith --

Did OJ do it?

This is not a question about legal outcomes. It's a question about reality.

We all know that the criminal jury said "not guilty" and the civil jury said "responsible for the deaths."

I'm not asking about what the juries said. I'm asking this: Did he stick the knife in or not?

No fancy dance, no legalism. Did he do it?

Posted by: Bill Otis | Feb 4, 2010 11:46:04 AM

lol sure he either did it or paid someone to do it! EVERYONE knows it. but the state counldn't PROVE IT. Last time i looked in this country legally your innocent till PROVEN GUILTY. Therefore no finding of guilty means YOUR INNOCENT. heck even someone who dies before a trial finishes or heck even AFTER a conviction but before a sentence is considered legally not-gulty!

so i stand by what i say. it's not even close to legal to say he's NOTGUILTY in one room and then drag him across the hall and use a set of joke rules and say YES YOUR GUILTY!

as for that idiotic statemetn "Rod-A finding of guilty means that a prosecutor was able to prove beyond a reasonable doubt that a person was responsible for a crime. However, a finding of not guilty does not mean the person was not responsible for the crime, only that the prosecutor did not meet his burden of proof beyond a reasonable doubt."

sorry under our CONSTITUTION if your not proven guilty YOUR NOT GUILTY!

LEGALLY!

plus you want to show ANY example where a court after a trial ever found anyone INNOCENT!

There are 3 choices GUILTY! NOT GUILTY! Hung Jury! never EVER seen INNOCENT in there anywhere....and you know what. becasue that covered under the decison of NOT GUILTY!

and this is a legal forum isn't it! sad a lawyer doesnt' understand the difference.

Posted by: rodsmith3510 | Feb 5, 2010 2:36:55 AM

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