Good morning Chairman Aderholt, Ranking Member Price, and other distinguished Members of the Committee. I am pleased to appear before you today to discuss the President’s fiscal year (FY) 2013 budget request for the U.S. Secret Service (Secret Service), as well as our protective operations. This hearing coincides with an increase in candidate protection activities, as the agency was recently directed to protect former Senator Rick Santorum, the third presidential candidate to receive protection in the 2012 Presidential Campaign cycle. Further, the Secret Service successfully completed security operations for the 2012 State of the Union Address in January, and the Asia-Pacific Economic Cooperation Summit in Honolulu, Hawaii, last November which included staffing protective details for 27 foreign heads of state and government and their spouses in addition to the permanent protectees attending the event. This busy start to FY 2012 comes on the heels of a productive year for the Secret Service, where our special agents, Uniformed Division officers, and administrative, professional, and technical staff continued to demonstrate unparalleled commitment, dedication, and professionalism in fulfilling the agency’s dual investigative and protective mission.
In FY 2011, Secret Service protective details, uniformed officers, and field agents ensured 100 percent incident-free protection for 5,616 domestic travel stops and 399 international travel stops. Of the total domestic travel stops, foreign dignitary protection represented 2,355 travel stops, including visits by 216 heads of state and government, and 87 spouses from 136 countries. Protection highlights also included planning, coordinating, and implementing security operations for the 2011 State of the Union Address and the 66th United Nations General Assembly; and screening more than 1.4 million pieces of mail at the White House Mail Screening Facility. Additionally, the protective mission was supported through the completion of 7,234 protective surveys and 2,686 protective intelligence cases closed.
In the area of criminal investigations, Secret Service field offices closed a total of 9,579 cases in FY 2011, an increase of 5.16 percent over FY 2010. Overall, arrests in FY 2011 totaled 9,022, with arrests for financial crimes increasing 8.48 percent over the previous year. Investigations of financial crimes prevented an exceptional $5.6 billion in potential losses. The specialized training associated with the Electronic Crimes Special Agent Program (ECSAP) continued to yield great successes in FY 2011 as well, including the examination of over 1,065 terabytes of digital evidence. Finally, the Secret Service’s Asset Forfeiture Division recorded a total of 1,057 seizures in FY 2011, a 34 percent increase in seizures over FY 2010, valued at more than $72 million.
Although I am proud of the Secret Service’s protective and investigative achievements over the past year, we have much to focus on in the year ahead. In addition to the increased staffing and travel demands associated with candidate protection, the upcoming G-8 and NATO Summits in Chicago, Illinois, and the Republican and Democratic Conventions later this year will require every Secret Service employee to remain operationally vigilant and prepared for a wide-range of threats, while being accountable for every dollar spent in this constrained budget environment.
Budget Context and Summary
The Secret Service maintains a robust protective intelligence program that works in collaboration with the Intelligence Community; Federal, State, and local law enforcement partners around the world; the Department of Defense; and concerned citizens. The ultimate goal of the protective intelligence program is the identification and mitigation of threats that could pose a danger to Secret Service protectees, permanent and temporary protected sites, and protected events.
The threat picture for the Office of the President, the White House, and other Secret Service protective interests is constantly evolving. These threats include domestic and international terrorist groups, homegrown violent extremists, and lone offenders. Given this extensive continuum of threat actors and motives, the Secret Service must be continually prepared for any type of danger to the people, infrastructure, and events under its protection.
Threats posed by cyber criminals to our nation’s payment and financial systems, as well as protective venues, are a growing concern to the Secret Service. The agency has adopted a proactive approach in combating these crimes, one that uses advanced technologies and capitalizes on the power of task force partnerships that reach across law enforcement, the private sector, and academia. Special agents, computer experts, forensic specialists, and intelligence analysts provide rapid response and critical information in support of the agency’s protective and investigative mission.
FY 2013 Budget Request
The President’s FY 2013 budget request for the Secret Service is reflective of the resources needed to protect the President, Vice President, and other protectees; the White House Complex and other critical infrastructure; and events of national significance, in this heightened threat environment. The budget request is strategically aligned with the goals and objectives set forth in the Department’s 2010 Quadrennial Homeland Security Review, with funding specifically targeted to preventing terrorism and enhancing security; protecting critical infrastructure; protecting government leaders, facilities, and special events; safeguarding and securing cyber space; and preventing cyber crime and other malicious uses of cyber space.
To fulfill these goals and objectives, the budget request for the Secret Service focuses on five primary areas: (1) Continued funding for the 2012 Presidential Campaign, which includes protection costs for the presidential and vice presidential nominees and their families, as well as security costs for the presidential and vice presidential debates and the 57th Presidential Inauguration; (2) Funding to support the costs of unanticipated National Special Security Events; (3) Funding for high-priority hazardous materials detection systems, audio countermeasures, physical security enhancements at the White House Complex, and cyber-protection activities; (4) Funding to maintain our investigative programs; and (5) Funding to continue the modernization of our legacy information technology (IT) infrastructure and communications systems to strengthen our security efforts.
The budget request totals $1.6 billion, a decrease of $65.8 million or 3.9 percent below FY 2012 enacted levels. Program increases proposed in the budget total $38.4 million and include: $3.5 million for the costs of unanticipated NSSEs; $13.3 million for Cyber Security Presidential Protection Measures; $9.5 million to continue the IITT program; and $12.1 million for Integrated Command and Control Systems. Program decreases include a $7.5 million reduction, which reflects the elimination of Secret Service grant funding for the National Center for Missing and Exploited Children (NCMEC), and a transfer of funding for ongoing forensic support for those activities to base resources for investigations.
Adjustments to the base increases total $9.4 million and include: $4 million to cover the proposed FY 2013 pay raise (0.5 percent); $114,000 to annualize positions filled for the Information Integration and Technology Transformation (IITT) program; and $2.97 million to annualize positions that will be filled in FY 2012 for the Operational Mission Support (OMS) program and acquisition workforce enhancements, among other protective activities. Adjustments to the base decreases total $68.3 million and include: a $2 million reduction to international programs, which reflects the planned closure of the Secret Service’s Resident Office in Toronto, Canada to accommodate the opening of a new Resident Office in Lima, Peru; a $5.9 million reduction for non-recurring expenses in the OMS program; an $18.3 million reduction for non-recurring expenses associated with security operations for the Asia-Pacific Economic Cooperation Summit and the G-8 and NATO Summits; a $41.2 million reduction for non-recurring expenses associated with the 2012 Presidential Campaign; and a $950,000 reduction for non-recurring expenses associated with the completion of certain deferred maintenance projects at the James J. Rowley Training Center.
Finally, as part of the Department’s goal to identify reductions associated with the ongoing Efficiency Review initiatives, as well as administrative savings, the President’s budget request for the Secret Service proposes efficiency savings totaling $37.7 million which includes: a $2.8 million reduction to extend the Secret Service’s law enforcement vehicle replacement cycle; a $3.5 million reduction for Office of Federal Procurement Policy directed purchasing savings; a $3.4 million reduction realized through DHS Strategic Sourcing Initiatives; a $4.3 million reduction to permanent change of station moves; a $14.7 million reduction for temporary duty travel; a $963,000 reduction to the Secret Service’s law enforcement vehicle fleet inventory; a $5.5 million reduction in overtime expenses; a $2.4 million reduction to base IT programs; and a $145,000 reduction for DHS-wide administrative efficiencies. These reductions offset frontline Secret Service operations
Proposed New Program, Project, and Activity Structure
The FY 2013 budget request for the Secret Service also proposes a new Program, Project, and Activity (PPA) structure to improve the agency’s ability to respond to the operational fluctuations associated with protective travel, while improving transparency and efficiencies and meeting the budgetary objectives set forth by Congress.
For example, the current PPA structure splits costs for salaries and expenses across each existing PPA. This structure does not provide the agency with the ability to match pre-planned, programmatic budgeting with the dynamic nature of the protection mission. This is important because labor distribution across the Secret Service is determined by external factors beyond the agency’s control. Due to the unpredictability of protectee travel, protective staffing decisions are made just days before events take place. This is a particular challenge for major protective events that occur late in the fiscal year, such as unplanned Presidential or Vice Presidential international travel, and the annual United Nations General Assembly. To address this issue, the proposed PPA structure includes a separate line for salaries and expenses; providing the Secret Service with the flexibility it needs to most effectively and efficiently address its investigative and protective staffing requirements.
Additionally, the proposed new structure in FY 2013 maintains a separate PPA for the Secret Service’s IT infrastructure modernization program under a newly created Acquisition, Construction, and Improvements account, continuing the structure established by Congress in the FY 2012 appropriations bill. The Secret Service believes that identifying IT modernization and related investments as a specific project/activity in a multi-year investment account will allow for better governance over complex multi-year acquisitions. While I have highlighted a few examples of the proposed changes to our existing PPA structure, a full description and detailed crosswalk was included as an addendum to the FY 2013 Congressional budget justification.
To accommodate this proposed new PPA structure, the Secret Service has made significant progress over the past year in working towards a comprehensive reform of our financial management and business processes. For example, in FY 2011 the Secret Service established a position for, and hired, a Component Acquisition Executive (CAE) to lead its acquisition programs. The addition of a CAE with extensive acquisition experience has already yielded better project and risk management, variance analysis, and “best practice” acquisition processes. The FY 2012 budget further strengthens this effort as it provides funding to hire three acquisition professionals to assist the CAE in his oversight of these programs. Also in FY 2011, the Secret Service hired a Chief Information Officer (CIO) to improve IT investment governance and to oversee the Secret Service’s IT modernization effort. In addition to these key staffing improvements, the Secret Service continues to strengthen its financial data systems, including the successful pilot of an agency-wide labor distribution tool which will eliminate the use of paper time and attendance forms. This will not only allow our frontline employees to spend less time on administrative paperwork and more time focused on operations, it will provide agency management with timely financial information. The realization of these efforts in FY 2013 will lead to an improved enterprise financial management system for the Secret Service.
The Secret Service’s protection mission is comprehensive, and goes beyond surrounding its protectees with well-trained, well-equipped special agents and uniformed officers. Over the years, the agency’s protective methodologies have become more sophisticated, incorporating such tools as airspace interdiction systems and chemical, biological, radiological, and explosive detection systems. As part of the Secret Service’s continuous goal of preventing an incident before it occurs, the agency relies heavily on meticulous advance work and threat assessments to identify and mitigate potential risks to our protectees.
2012 Presidential Campaign
Secret Service activities associated with the 2012 Presidential Campaign have steadily increased in recent weeks. Candidate protection began in November 2011 when a protective detail for Mr. Herman Cain was activated following authorization from the Secretary of Homeland Security and after consultation with the Congressional advisory committee. The protective detail for Mr. Cain was deactivated following the candidate’s withdrawal from the campaign in early December 2011. Since that time, the Secret Service has assumed protection for two additional presidential candidates: former Governor Mitt Romney and former Senator Rick Santorum. The agency has established strict campaign financial controls in collaboration with the Department’s Chief Financial Officer, and will keep the Committee informed of budgetary impacts associated with candidate protection.
Other activities tied to the 2012 Presidential Campaign budget, such as the operational security planning for the Republican National Convention (RNC) in Tampa, Florida, and the Democratic National Convention (DNC) in Charlotte, North Carolina, are proceeding on schedule. Beginning in August 2011, the Secret Service assigned full-time coordinators to begin the extensive operational planning associated with these events. Several recent developments will require close monitoring in the coming weeks as they could impact the Secret Service’s original cost projections. For example, both the RNC and DNC have added events to their schedule that will be located some distance from the convention site and will attract large numbers of people. The addition of these venues will likely require more protective site personnel and equipment as Secret Service protectees, delegates, and the general public move from one secure zone to the next.
The FY 2013 budget request for the Secret Service includes a total of $58 million for its continued work associated with the 2012 Presidential Campaign. Included in this amount is a shift of $24.7 million of existing base budget resources from investigative activities to support staffing requirements for the campaign. The FY 2013 budget covers the costs associated with presidential and vice presidential nominee protective details for the final month leading up to the general election, and operational security for the final presidential and vice presidential debate sites, as well as the 57th Presidential Inauguration.
National Special Security Events (NSSEs)
Excluding quadrennial campaign-related NSSEs, such as the party nominating conventions and presidential inaugurations, and annual State of the Union Addresses, the Secret Service has planned, coordinated, and implemented operational security plans for 24 NSSEs over the past 14 years. This averages out to 1.7 NSSEs per year since 1998. In terms of budget estimates, the G-20 in Pittsburgh, Pennsylvania, in 2009 ($4.8 million) and the Nuclear Security Summit in Washington, DC in FY 2010 ($4.2 million) were used as cost models to develop the FY 2013 budget request, as both are good, recent examples of unanticipated NSSEs that took place over multiple days, and required the Secret Service to deploy personnel and resources from throughout the United States to support security operations.
Based on the average cost of an NSSE, the $4.5 million included in the FY 2013 budget request for NSSEs will support a significant portion of the operational security costs for one unanticipated event of national significance, or the start-up costs required to support multiple events.
Operational Mission Support
The Secret Service is also responsible for the security of numerous permanent protective sites, such as the White House Complex and the Vice President’s residence. While the Secret Service is in a constant state of alert when it comes to the protection of the White House Complex and other protective sites, the shooting incident on November 11, 2011, was a public reminder of the threats our special agents and Uniformed Division officers face every day. The Secret Service’s Operational Mission Support (OMS) program supports advanced protective countermeasure projects for high-priority hazardous materials detection systems, audio countermeasures, physical security enhancements at the White House Complex, and cyber-protection activities to address known and evolving threats directed towards our protective interests.
The FY 2013 budget request for OMS totals $67.2 million, a combination of second-year costs for projects funded in FY 2012, as well as baseline expenditures that directly support projects that were funded through reprogramming actions in FY 2010 and FY 2011. One example of this program’s success is the recent establishment of a Temporary Visitor Entrance Building (TVEB) at the White House, which opened in January 2012. The Secret Service worked closely with the White House Military Office, the National Park Service, and other stakeholders on the design and construction of this facility. The TVEB provides the Secret Service with enhanced explosive detection screening capabilities for the nearly 500,000 people who visit the White House for public tours and other events each year.
Cyber Security Presidential Protection Measures
Advances in technology, as well as the interdependencies of our country’s network systems, have required a new paradigm in the way the Secret Service approaches protection. No longer can the agency rely solely on human resources and physical barriers in designing a security plan; it must also address the inherent vulnerabilities of the critical infrastructures upon which security plans are built.
The Secret Service has long valued the skills its special agents develop during their investigative assignments. From their work investigating protective intelligence cases, to the specialized computer forensics examinations they perform while investigating threats to our nation’s banking and financial payment systems, the Secret Service trains its special agents for all aspects of the dual mission. One example of this is the Secret Service’s Critical Systems Protection (CSP) program, which recognizes the interaction between physical and cyber environments, providing a more holistic picture of potential impacts on physical security as the result of a cyber intrusion. This program, which is coordinated by our Office of Investigations, includes the systematic audit and technical assessment of various critical infrastructures that support protective sites, events, and venues. These assessments identify which computer networks, process-control systems, or remotely controlled devices could, if compromised, impact an operational security plan. The CSP program has improved the Secret Service’s ability to better secure protective venues to include those associated with designated NSSEs.
The FY 2013 budget request provides an additional $13.3 million to enable the Secret Service to modify intrusion detection systems designed by DHS to meet specific protective mission requirements, train an additional 113 special agents to respond to and investigate network intrusions, as well as provide mobile wireless tracking capabilities to bolster protective countermeasures.
Effective Partnership with the Science and Technology Directorate
The advanced research and development in areas such as biological and explosives detection, cyber security, and interoperability conducted by the Department’s Science and Technology Directorate (S&T) has been enormously beneficial to the Secret Service. For example, the Science and Technology Operational Research and Enhancement (STORE) program has improved the Secret Service’s ability to identify protective countermeasures enhancements based on clear needs and requirements assessments, and through the development of plausible threat scenarios that employ credible tactics and techniques that could be used by our adversaries. In collaboration with S&T, interagency working groups, and the commercial marketplace, various technologies that directly support the Secret Service’s protective mission are being developed and jointly tested for fielding in late FY 2012 through FY 2013. To ensure its long-term success, the STORE program will further improve the Secret Service’s acquisition investment processes and budget planning as well, including the development of enhanced performance metrics and life cycle cost estimates.
In addition to the effective partnerships the Secret Service has with Departmental components, the agency has made it a priority over the years to establish strong partnerships with its international, Federal, State, and local law enforcement counterparts through its investigative work. Special agents assigned to investigations do more than provide critical support to the protection mission; they are recognized worldwide for their investigative expertise and for their aggressive and innovative approach to the prevention, detection, and investigation of financial crimes. As payment methods have changed over the years—from coin and paper currency, to checks, credit and debit cards, and now, online financial transactions—the investigative methodologies used by the Secret Service have evolved to keep pace with criminal trends.
Cyber Crime Investigations
In support of the President’s Strategy to Combat Transnational Organized Crime, and in alignment with the Department’s Blueprint for a Secure Cyber Future, the Secret Service maintains core investigative programs to protect our nation’s banking and financial payment systems from cyber criminals seeking to harm our citizens and our critical infrastructure. For example, in collaboration with its law enforcement partners, the Secret Service has dismantled some of the largest cyber criminal organizations in recent years through the agency’s 31 Electronic Crimes Task Forces (ECTFs), including two international task forces. Within these ECTFs, the Secret Service and its law enforcement partners work closely with the private sector and academia to share information and best practices. The expertise and resources offered by each task force member strengthens the group’s ability to combat cyber crime. In FY 2011 alone, the Secret Service arrested 1,217 suspects for cyber crime-related violations, and prevented $1.6 billion in potential losses.
In addition to the ECTF program, the Secret Service’s Cyber Intelligence Section manages three cyber crime working groups that work to identify, locate, and apprehend transnational cyber criminals involved in network intrusions, hacking attacks, malware development, phishing schemes, and other forms of cyber crime. Another core investigative program is the agency’s Electronic Crimes Special Agent Program (ECSAP), which provides special agents with the skills needed to obtain legally admissible digital evidence from networks, personal computers, smart phones, and other devices. At the end of FY 2011, the Secret Service had 1,624 ECSAP-trained agents assigned to 93 offices around the world. Since 2008, the Secret Service, through the National Computer Forensics Institute, has provided similar training to 1,324 State and local law enforcement officials, prosecutors, and judges to increase prosecutions of cases that may not get tried at the Federal level.
Investigating counterfeit U.S. currency was the Secret Service’s founding mission, and continues to be a core part of its investigative work. In FY 2011, the Secret Service recovered $154.7 million in counterfeit currency, arrested 2,471 individuals domestically and assisted our foreign law enforcement partners with the arrest of 386 suspects internationally for counterfeiting offenses.
In the same manner that criminal methods associated with other financial crimes have evolved over time, trends in counterfeiting have been influenced in recent years by improvements in computer-based technologies. Personal computers and advancements in the quality of digital printing make it possible to manufacture passable counterfeit notes with relative ease. Approximately 60 percent of the counterfeit currency passed domestically in FY 2011 was produced using digital printing, compared with less than one percent in FY 1995.
The Secret Service works to minimize the economic impact of counterfeiting by collaborating with its domestic and international law enforcement partners, and conducting aggressive investigations that identify the source of the illicit production. One example of this effort is the Peruvian Counterfeit Task Force (PCTF), which was established in March 2009, to respond to the significant increase in domestic passing activity of counterfeit U.S. currency produced in Peru. To date, PCTF operations have led to 92 arrests, 11 counterfeit plant suppressions, and the seizure of over $37.4 million in counterfeit currency. Thanks to the funding provided by Congress in FY 2012, the Secret Service is in the process of establishing a permanent office in Lima, Peru, to solidify this collaborative investigative effort with our Peruvian law enforcement partners.
Information Technology and Communications Investments
The Secret Service’s ability to successfully perform our dual mission is dependent on the reliability and security of our IT and other communications systems. When I was named Director six years ago, one of my first actions was to order a top to bottom review of our IT and communications infrastructure with the end goal of moving away from the legacy systems we brought with us from our years at the Department of Treasury. The priority was to ensure that our mission critical operations and business processes were better aligned with DHS investments, and that any operational gaps, such as interoperability with the White House Communications Agency (WHCA), were closed. Part of that initial review also included bringing in our partners from the National Security Agency (NSA) to undertake an independent assessment of our network systems and applications. While the findings of that assessment are classified, many of NSA’s recommendations in the areas of network security, information sharing, situational awareness, and operational communications led to our work in developing a multi-year plan to stabilize and modernize the Secret Service’s IT and communications systems.
Information Integration and Technology Transformation Program
In collaboration with the Department, the Secret Service has planned a multi-year IT modernization effort to replace its legacy systems consistent with DHS enterprise architecture and data center migration requirements. The resulting Information Integration and Technology Transformation (IITT) program encompasses a complex re-architecting of Secret Service IT infrastructure and communications systems, and software upgrades that are critical to improving IT reliability and functionality in support of daily mission requirements. The Secret Service received DHS acquisition approval to commence with the IITT program on March 22, 2010. As part of that approval, the Secret Service was directed to conduct a full Analysis of Alternatives (AoA) and move forward with stabilizing our obsolescent IT infrastructure to reduce the risk of catastrophic failure in the near-term. On February 22, 2011, the DHS Under Secretary for Management concurred with the results of the AoA and approved the program to enter the Obtain Phase of the DHS Acquisition Lifecycle Framework. In addition, the DHS-CIO continues to certify that Secret Service modernization activities within the IITT program are consistent with DHS data center migration and enterprise architecture requirements.
Over the past year, the Secret Service has improved the security and reliability of its IT infrastructure by installing replacement hardware in time for the increased operational demands associated with the 2012 Presidential Campaign and designated NSSEs. Stabilization activities also helped facilitate the migration of the Secret Service’s wide area network to DHS OneNet, which has resulted in faster access to network resources. In addition, the upgrade and replacement of the enterprise data back-up system has vastly improved the Secret Service’s ability to preserve, secure, and recover mission critical data. The agency also continues its work to allow special agents to conduct faster searches for protective intelligence information across disparate databases.
The FY 2013 budget request of $53.4 million for the IITT program will allow the Secret Service to purchase additional Storage Area Network (SAN) discs and servers. The agency currently has legacy applications that are written in a dated computer language that must be re-factored to enable mission support applications currently in development to reach production status. The SAN hardware is necessary to test the reliability and integrity of data translation during the re-factoring effort. Funding requested in FY 2013 will also enable the Secret Service to complete the design, development, testing, and deployment of a software application that will provide real-time management data, such as workforce scheduling, and help track costs associated with protective and investigative events.
Finally, I am especially pleased to report that the FY 2013 budget request for IITT will allow Secret Service to close-out the WHCA interoperability program on-time and under budget. As many of you will recall, this effort was started with supplemental funding Congress provided in the FY 2009 Omnibus Appropriations Act to enable the Secret Service to achieve interoperability and full communications parity with WHCA. This program has already yielded tangible benefits to Secret Service protective details, its Airspace Security Branch, and at its large field offices that provide heavy support to the protection mission. When the program is complete in FY 2013, the Secret Service will be fully interoperable with WHCA, which will improve the security, reliability, and functionality of protective communications.
Integrated Command and Control
Building on the success of the WHCA interoperability program, and consistent with the communications improvements the Secret Service has planned as part of the IITT program, the FY 2013 budget request provides $12.1 million for the Integrated Command and Control Systems (ICCS) program. The ICCS program will significantly improve the timeliness and reliability of information provided to the command and control entities of the Secret Service, while reducing its susceptibility to illicit compromise. The program supports an agency-wide communication transition from analog to Internet Protocol (IP) encrypted voice, radio, video, wireless, and classified systems. This transition will provide the Secret Service with increased reliability and will reduce its reliance on external telecommunications infrastructure. In addition to the enhanced capabilities for sharing classified and law enforcement sensitive information that is critical to informed decision making during protective and investigative activities, the ICCS program will result in operational efficiencies through the reduction of commercial services and supplies necessary to support protective operations.
In conclusion, I would like to note the passing of former First Lady Betty Ford last July, which closed the chapter on the Ford Protective Division. Since its inception in 1977 when President Gerald Ford and Mrs. Ford left the White House, the division was a constant presence with the Ford family and remained committed to their safety and well-being. Mrs. Ford’s death was a reminder to all Secret Service employees that long after our nation’s presidents and first ladies leave public service for private life, they remain symbols of the values we all hold dear.
Thank you again for the opportunity to be here today. I look forward to working with the Committee as you consider the President’s FY 2013 budget request and would be happy to answer any questions you may have at this time.