THURSDAY, FEBRUARY 23, 1984. U.S. SECRET SERVICE SALARIES AND EXPENSES WITNESSES JOHN M. WALKER, JR., ASSISTANT SECRETARY, ENFORCEMENT AND OPERATIONS JOHN R. SIMPSON, DIRECTOR WILLIAM R. BARTON, DEPUTY DIRECTOR EDWARD J. POLLARD, ASSISTANT DIRECTOR, PROTECTIVE OPERATIONS ARTHUR D. KALLEN, DIRECTOR, OFFICE OF BUDGET AND FINANCE, DE- Mr. ROYBAL. The committee will come to order. The committee will now hear from the Department of Treasury, the U.S. Secret Service, Mr. Simpson, Mr. Walker. You may proceed in any way you may desire. OPENING STATEMENT OF ASSISTANT SECRETARY WALKER Mr. WALKER. Thank you, Mr. Chairman. Mr. Chairman, and members of the committee, it is a pleasure for me to appear before you in support of the annual appropriation request for the United States Secret Service. Appearing with me today are the Director of the Secret Service, John Simpson, and key Secret Service staff members he will introduce, and Arthur D. Kallen, Director of the Department of Treasury's Office of Budget and Finance. The fiscal year 1985 request is for $275,731,000 and 4,054 average positions. However, no funds have been requested for payments to state and local governments. This program is to be assumed by the State Department in fiscal year 1985. PROTECTIVE OPERATIONS The Secret Service's protective operations during the past year have been conducted smoothly. The Williamsburg Summit last May was a prime example, one that received extremely favorable response in terms of the professionalism that the Secret Service demonstrated. Similarly, the Service exhibited a high level of protective skill during the President's visit to Latin America, two extensive overseas trips by the Vice President, the UN Development Conference, and the visits of numerous foreign dignitaries to the United States. CANDIDATE AND NOMINEE PROTECTION The Secret Service has prepared itself for the onset of protective activities associated with the Presidential election. A permanent division within the Secret Service has been established to oversee the operations of all candidate and nominee details and state primary coordinating centers. The Secret Service will be supported, as in past years, with law enforcement personnel from other Treasury bureaus. Presidential campaign activities will continue into the first four months of fiscal year 1985, phasing out with the inauguration on January 20, 1985. SUMMER OLYMPICS Another major event in 1984 that will require extensive protective activity is America's hosting of the Summer Olympic Games, which are scheduled to take place from July 28 to August 12 in and around Los Angeles, California. This event will be occurring just as the nominating conventions conclude the 1984 Presidential primary season. INVESTIGATIVE WORKLOAD Over the past 12 months, the Secret Service has maintained a vigorous enforcement program against counterfeiting and crimes involving government securities, one that has emphasized "sting" operations, task force efforts, and priority investigations with the potential for a high yield. A highlight of the past year was the arrest of an individual in Baton Rouge, Louisiana, who has headed a $6 million counterfeit conspiracy. Additionally, the Secret Service has jointly participated in a number of food stamp investigations with representatives of the United States Department of Agriculture and state and local authorities. One such investigation, conducted in Birmingham, Alabama, will ultimately result in more than 100 indictments stemming from 200 separate felony transactions. During the course of the Birmingham investigation, the defendants exchanged a total of $66,000 in USDA food stamps for $30,000 in cash and assorted merchandise. Also the Secret Service in the past year ran a check cashing undercover "sting" operation in which agents of the San Francisco field office arrested 30 individuals and recovered $230,000 in Treasury checks, a great many of which were stolen from U.S. Postal Service facilities. Overall, in fiscal year 1983 the Secret Service closed 19,000 counterfeiting cases, 136,000 check and bond forgery cases, and 44,000 other investigative and protective research cases. TECHNOLOGY AND EQUIPMENT An emphasis in this budget request has been on meeting state-ofthe-art technology and equipment needs of the Service to improve the overall effectiveness of the bureau and to increase the efficien cy of its staff in carrying out its protective and investigation missions. To this end, the Service has requested approximately $11 million for equipment modernization and ADP increases. Overall, this budget is in furtherance of the Secretary's and the President's goal for efficient operations and fiscal restraint. Mr. Chairman, this concludes my opening statement. I will now ask the Director of the United States Secret Service to provide you with his prepared statement, and we will then be pleased to respond to questions you or other members of the committee may have. Mr. ROYBAL. Mr. Simpson. DIRECTOR SIMPSON'S INTRODUCTORY STATEMENT Mr. SIMPSON. Thank you, Mr. Chairman. Mr. Chairman, I am pleased to appear before you and the other members of this committee to present the annual appropriation request of the United States Secret Service and to report on our activities during the current and past fiscal years. With your permission, I would like to read a short introductory statement and submit my full statement for the record. Mr. ROYBAL. Without objection, your full statement will appear in the record. INTRODUCTION OF ASSOCIATES Mr. SIMPSON. With me today, Mr. Chairman, is the Deputy Director, Mr. William R. Barton; Mr. Edward J. Pollard, Assistant Director for Protective Operations; Mr. Jerry Parr, Assistant Director of Protective Research; Mr. Stephen E. Garmon, Assistant Director for Administration; Mr. Joseph R. Carlon, Deputy Assistant Director for Investigations; Mr. John L. Armstrong, Deputy Assistant Director for Administration; and Mr. Frank Palmer, Chief of our Financial Management Division. Since this is the first appearance before this committee of Mr. Garmon and Mr. Armstrong from our Office of Administration, I have included a short biographical sketch of each in my full introductory statement. Mr. ROYBAL. Thank you very much. We appreciate that. That will appear in the record at this point. APPROPRIATION REQUEST Mr. SIMPSON. The appropriations request for fiscal year 1985 totals $275,731,000, a reduction of $21,998,000 from the proposed authorized level for fiscal year 1984. Before going on to tell you what we have been doing this past year, I would like to share with you a few of my thoughts as I prepared for this briefing and as I look forward to the demanding campaign facing all of us this year. In justifying our pending appropriation request with you today, we are talking about competition; competition for scarce Federal resources necessary for effective ongoing operations. If you will afford me a few minutes, I would like to speak about another kind of competition. The men and women of the Secret Service are en gaged in a competition every day; competing with those individuals who would do harm to our protectees, or those who seek to undermine the economic well-being of our country through abuse of our currency and securities. There is a saying among sportsmen that "It is not whether you win or lose, but how you play the game." This is a fine philosophy for people engaged in recreational competition. But my feelings in directing the Secret Service have been summarized best in the words of one of the all time great football coaches, Vince Lombardi: "(There is no room for second place. There is only one place in my game and that is first place." Coach Lombardi has identified the blood and guts of all competition-winning, whether it is in athletic games or fighting crime. And if you look at the mission of the Secret Service in terms of competition, you will find a deadly game where the risks are high and the stakes even higher. We are competing with those who threaten the lives of our nation's leaders and those who threaten the economic well-being of our nation's economy. As the oldest Federal law enforcement body, we take great pride in our efforts to ensure safety for our protectees and in our efforts to deter counterfeiting, forgery and fraud of currency and securities. Our success rests heavily on our ability to attract and recruit the best and the brightest men and women dedicated to our mission and its success. Demands placed on our employees defy normal standards with long periods of travel, 12-hour shifts or longer, while living out of a suitcase and then returning to a backlogged caseload at the home office. Under the circumstances, you might wonder how we are able to continue to recruit the best and maintain an attrition rate of less than four percent. Maybe Mr. Lombardi had the answer here too when he said, "It is a reality of life that men are competitive and the most competitive games draw the most competitive men. That is why they are there-to compete. They know the rules and the objectives when they get in the game." I am proud to say that no challenge seems too great for these men and women and their enthusiasm and dedication go unsurpassed. It seems only appropriate then that I make every effort to provide them with the resources needed to get the job done. That is why I and my colleagues are here, to ask that you continue to support our team so that we can continue to win. It is appropriate to summarize our mission objective once more in the words of Coach Lombardi, "Winning is not a sometime thing; it is an all-the-time thing. You don't win once in a while, you don't do things right once in a while, you do them right all the time." I hope you feel the same way about our mission and continue to support us as you have in the past. Now I would like to tell you about some of our accomplishments this past year. CONTINUED INCREASE IN ACTIVITIES The past year has shown a continuing increase in the activities of the Secret Service. During fiscal year 1983 we provided security |