Readiness to get the House Armed Services committee on the continued oversight of the transfer of excess military equipment to civilian Law Enforcement agencies to order. I would like to begin by recognizing the dedicated service of our readiness subcommittee clerk, ms. Jodie bignolia. This will be her last official event of our subcommittee and i want to thank her for her contributions to our actions in the past year. I want to wish her the best of luck as she moves forward in future endeavors. Thank you, jodie. [ applause ] one of the objectives of this subcommittee is to bring attention to matters that impact the overall readiness of the department of defense. This includes programs or activities when face management challenges, present budget implications or could be administrated more efficiently. Whatever the root cause is, it is our goal to provide necessary oversight in order to ensure our armed forces achieve the highest levels of readiness possible. Given the current threats facing our nation and the budgetary pressure placed on the department of defense, accountability is always paramount and every dollar counts. Vigorous oversight can help ensure mistakes dont happen, and when they inevitably do we learn lessons from missed steps for this reason. Im glad we convened this hearing today on the recent gao report highlighting deficiencies found with the management and operation of the Law Enforcement support office, leso, leso, within the Defense Logistics Agency. The leso is responsible for the 1033 program which has provided tremendously valuable resources to our federal, state and local Law Enforcement agencies since 1991. These necessary items have contributed to Law Enforcements ability to conduct counter narcotics, counterterrorism and Border Security missions throughout the United States and ensure items already paid for by the taxpayer continue to protect and serve the citizens of the United States. Earlier this month the gao report stated that the dlamanaged leso program inappropriately assigned more than 100 controlled items with an estimated value of 1. 2 million. This will build deficienciness the process for verification and approval of federal Law Enforcement Agency Applications, and in the transfer of controlled property. The department of defense, dla, and leso program must improve its monitoring management and administration of this critical and very important program. I read the gao recommendations very carefully and applaud dla for taking a very proactive approach to addressing the shortfalls and immediately acknowledging, amazingly enough immediately acknowledging the problems identified. I look forward to hearing what progress the dla has made in continuing to remedy these various deficiencies. Our oversight intends to ensure the taxpayer dollars are used responsibly, security is maintained for sensitive items and accountability of equipment is never taken for granted. Our panel will address the findings and recommendations of the gao report as well as the actions taken by dla to correct identified deficiencies. I turn to our very valued ranking colleague, Congress Woman from guam for her comments. Thank you very much for calling this important hearing on the recent gao report on the dod excess property known, also known as the 1033 program. Thank you to our four witnesses for being with us today for what i expect to be an insightful discussion. Let me begin by stating i understand the value of the 1033 program. It allows federal, state and local Law Enforcement agencies to fill equipment shortfalls at little to no additional cost to the taxpayer, leveraging excess dod property. Many of these items are not controlled, can be purchased at any Office Supply or Furniture Store and help alleviate budgetary stress, particularly on local agencies. However, this equipment can also be controlled property, items that are sensitive in nature and cannot be released to the general public such as firearms and militarygrade imagery technologies. That is what makes the gao report particularly concerning. Now, not only does it highlight the negligence with which dlatreated property procured with taxpayer dollars, but it demonstrates a dangerous vulnerability that could compromise the safety of the american people. So i am particularly appreciative that gao conducted this operation and delivered this report because it brings to light these vulnerabilities and allows us to conduct critical oversight on the handling of equipment to ensure reforms are in place to better secure the transfer program. I am deeply disturbed however by the prospect that a malicious individual or organization could procure dod property, especially controlled items. Understanding that this is likely a result of accommodation of issues, including inadequate protocols and safeguards, insufficient training and potential cultural errors, i expect to dig down on how this Program Needs to be reformed. So i do look forward to the discussion here this morning and hope that we can come away with clear objectives and steps forward to ensure this program has the proper safeguards and accountability in place. Mr. Chairman, i thank you again for holding this important meeting and i yield back. Thank you, Council Woman bordallo. We are pleased to recognize our witnesses today. I want to thank them for taking time to be with us. We have miszena merritt, of the Government Accountability office. Mr. Wayne mcelrath, director of forensic audits at the Government Accountability office. Mr. Mike scott, the Deputy Director of Logistics Operations of the Defense Logistics Agency, and mr. Mike cannon, the director of the Defense Logistics Agency Disposition Services. We will begin with states from each organization. We will begin very appropriately with the Government Accountability office. Ms. Merritt. General, Ranking Member bordallo and members of the subcommittee, thank you for the opportunity to be here today. Our testimony arises from key findings from our july 2017 report on dod excess control property and addresses, one, how federal, state and local enforcement agencies report using and benefitting from the transferred property and, two, the extent to which Defense Logistics Agency or dla has taken actions to enhance processes including internal controls related to the transfers of such property. Dod has Sole Authority to transfer excess property to federal, state and local enforcement agencies. Dla Disposition Services administers the Law Enforcement support office or leso programs for dod. During calendar years 2013 through 2015 dod had supported transferring approximately 1. 1 billion of excess controlled property to Law Enforcement agencies. Controlled property typically involves sensitive equipment and items that cannot be released to the public such as detonation robots, small arms and mineresistant protected vehicles. Law enforcement officials that we surveyed and interviewed sited a number of ways in which they had benefitted from the program, with several reporting that the transfers of controlled property allowed them to save money. The report uses included enhancing counter drug and counterterrorism activities, search and rescue, Natural Disaster response and police training. Dla has taken actions to enhas processes for the program and responds to past recommendations made by gao as well as dod and dla offices of Inspector General. Dla has taken some steps to address previously identified weak nesses in its processes and procedures mostly at the state and local levels. In our july report we noted weak nesses at the federal participant level in three areas. One, verifying and approving applications. Two, transferring property. Three, assessment of risks. With the federal agency we gain access to the program and attained over 100 control items with an estimated value of 1. 2 million, including night vision goggles, simulated rifles and simulated pipe bombs which could be potentially lethal if modified with commercially available items. Images of these items are pictured on the graphic boards in the hearing room today. Specific weaknesses highlighted in the report include dlas internal control for verifying and approving federal Agency Applications and enrollment in the program were not adequate, specifically lesos reliance on electronic communication without verification does not allow us to properly vet applicants. Second, our testing identified deficiency in the transfer of controlled property such as dla personally not routinely requesting and verifying identification of individuals picking up property. Third, while dla has taken some steps to address identified deficiencies in the program, dla lacks a comprehensive framework for instituted Fraud Prevention and mitigation measures at all stages of the process. Dla officials acknowledge they have not conducted a fraud list assessment. Overall, we konl colluded in our report that dlas internal control did not provide reasonable assurance in preventing fraud. Therefore, we made four recommendations to dla. One, review and revise policy or procedures for verifying and approving applicants. Two, ensure Disposition Services officials, verify that persons picking up items have valid credentials. Three, issue guidance that requires dispossession Service Officials to verify the quantities and type of items being picked up before handled. Lastly, conduct a fraud Risk Assessment to design and implement a strategy with specific internal control activities to mitigate assess fraud. Dod concurred with all of our recommendations and highlighted access to direct each one. Chairman wilson, Ranking Member bordallo and members of the subcommittee, that concludes my prepared statement. My colleague and i will be happy and pleased to respond to any questions that you may have. Thank you very much, ms. Merritt. Indeed, your professionalism is very, very impressive. Mr. Mcilrath, would you like to make a presentation . Thank you very much. We now proceed to the Defense Logistics Agency, mr. Scott. Chairman wilson, Ranking Member bordallo, distinguished committee members, thank you for the opportunity to be here today to discuss the Defense Logistic agencies administration and execution of the 1033 program, also known as the Law Enforcement support Office Program or leso program. I am mike scott, Deputy Director, dla Logistics Operations. With me today is mr. Mike cannon, the director of dla Disposition Services. We appreciate the opportunity to discuss the july 2017 gao report on department of defense excess property and to advise you of the actions we have taken. A field activity of dla is responsible for the final dispossession of extra property received from military services. Dla Disposition Services also administered and executes the 1033 programs through their leso. About 7500 federal and state Law Enforcement agencies across 50 states and u. S. Territories actively participate in the program. 30 federal Agency Headquarters are currently enroll. These are the higher headquarters to the 345 federal Law Enforcement activities participating in the program. Dla has worked extensively over the last several years to improve the state and local side of the program, which is 96 of total participation. While the gaos recent review did validate enhancement and aid in the state and local program, it also highlighted vulnerabilities in the federal program. Dla takes the finding very seriously and is actively addressing and correcting the deficiencies. In september of 2015, dla began a focused improvement effort to strengthen or federal program. Weve implement robust controls in our federal program which already exist in our state program. Specifically, we have address our procedure revised our procedures for verifying and approving federal Agency Applications foreign rollment. First, dla now requires an executive level representative in the federal agency designate a point of contact in writing. This poc will serve as the agencys federal coordinator who will validate and endorse all enrollment applications and all equipment requests for their field activities. Second, dla now requires the poc to file a memorandum of understanding outlining and accepting their responsibilities for management of their program. We have sent all 30 current federal Agency Headquarters this mou, and 12 agencies have already signed and returned the mou. Third, dla will vils i thisit e Agency Headquarters and meet with the poc to confirm eligibility. As of today dla has visited 22 agency Head Quarters. Additionally, dla has strengthened the internal approval process foreign rolling federal agencies. First, we have designated a federal dla liaison to manage the application process. Second, will utilize the fbi Crime Information Center or ncic database to verify the legitimacy of all organizations. Finally, the leso Program Manager is now required to approve all federal applications as a second level internal review. With regard to the gao findings on process weakness for verification for customer identity and the type and quantity of property issued we have taken the following actions. First, we immediately conducted remedial training at the sites gao visited. Second, we mandated reinforcement training at all 103 of our disposition sites. Were 50 complete on this aggressive effort and are on track to finish two months ahead of schedule. Third, we alded this topic as an emphasis items to our existing Compliance Program which includes, among other things, no notice spot inspections and a dla headquarters management review. In response to the gao recommendations to conduct a fraud Risk Assessment as out lined in gaos frauld risk framework, dla headquarters, specifically our dla Inspector General office and my Logistics Office director will lead this effort with participation by dla Disposition Services. Dla has made significant enhancements to improve policies, procedures and internal controls in the 1033 program. Weal remain committed to Continuous Process Improvement to ensure we provide the best possible support to Law Enforcement agencies in their critical mission. Chairman wilson, Ranking Member bordallo and members of the committee, we thank you for the opportunity to discuss this important issue here today and are prepared to answer any questions you have. Mr. Canyon. Sir, mr. Scott spoke on behalf of the agency. Thank you. I want to it is really remarkable an agency acknowledges that an error occurred and then has taken positive response. So we appreciate your service. Im really grateful. Today we have really talented members of the subcommittee here, people who are really dedicated to the american people. So many are here that were going to very strictly follow the fiveminute rule. I would ask my talent drew warren to keep the fiveminute rule beginning with me. We will proceed right away. Ms. Merritt or mr. Mcillrath how did you determine the velner abilities that lead to the leso control measures by using a fictitious agency . How did you determine that . Again, we appreciate you being proactive. I will start the response. While we were actually conducting some of our field work in some of the states we were reviewing the names of the applicant, and as we were reviewing the names of those particular applicants we noticed one applicant that had a title that did not seem to be legitimate agency. While doing that, we questioned dla and they acknowledged that that was the entity in which they had been investigating and continued to investigate. That was one of the key triggers for this, as well as we had made a number of recommendations over the years to tightly control. So we want to ensure some of these recommendations were properly implemented. My colleagues probably will have a little bit to add to that response. Based on the information that we received from our defense capabilities team, we actually formulated a plan to develop a false and fictitious Law Enforcement entity and created an online presence. After that we submitted an application to dla for approval. We went through their online enrollment process, and then actually went on their online ordering system to actually acquire goods. Thats amazing. I appreciate, again, your being we all appreciate you being proactive. Additionally, how do you assess the Defense Logistic agencies Current Administration of the 1033 program and how does it compare to what you initially found during the beginning of your investigation last year in 2016 . As noted, we briefed dla continuously on the product of our work, including their Inspector Generals office. In may we had a formal meeting with them where we fully disclosed our findings to them. At that point in time they told us about some respective actions they started relating to the application. For example, they had modified their application. As the review continued, they also had begun developing memorandums of understanding at that time. In short, actions were already commencing. As we continued and got closer to the end and they realized, in fact, we posed as a fictitious organization and obtained items, then they also noted there were additional actions they were going to take in order to close those particular gams ps in the processes. Thank you. For mr. Scott, your service for the security of the american families, it is very important with the 1033 program. What is the process for Law Enforcement agency to obtain control items . What additional steps in the authorization process for obtaining the items has been considered in light of the Government Accountability offices investigation . So, chairman, as the gao said our process previous to finding out what they were able to accomplish required mr. Keenans organization worked directly with the federal law agencies. There was an application that had to be filed. They had to provide statute with authority, special ago, senior agents in charge had to sign those applications to be able to get into the program. As youve heard back, our controls were not adequate. We recognize that. We had started our efforts to improve the federal Program Prior to the gao starting their effort. I will say immediately, i think the first meetings we had with them were in march of 2017 when we learned what they were able to do in their investigation. By april 3rd we had implemented those additional things that youve heard about. Those include now that we get an executive level sponsorship from the federal agency. We have a poc identified going forward. We visit those organizations to validate. We are now going to use the fbi database to ensure that their organization is correctly loaded there and theyre legitimate. Those are all things weve added, and we believe those processes will prevent this from praping in the futu happening in the future, mr. Chairman. And those are responsible safeguards. I believe there is still one safeguard pending. Is that being acted upon . Yes, it is. As mr. Scott mention, theyre scheduling with oig and my Head Quarters to do fraud Risk Assessment. Thank you. Councilmember bordallo. Thank you, mr. Chairman. Mr. Cannon and mr. Scott, the gao recommendations included strengthening internal controls. Given what we know now, what is your level of confidence such a level of violation will not happen again . Secondly, recognizing only four to seven percent of transfers are controlled, should dla temporarily suspend the transfer program until the problems are fixed . You state changes are already made, but we wouldnt be here if there wasnt still a problem. So will it happen again or should we suspend the program until changes have been made . Maam, ill take that. First of all, the control measures we have in place i am confident will preclude this from happening again. As mr. Scott alluded to or mentioned, we now require a very similar to the tight controls we had implemented in the state and local procedures, a federal executive apointme executive appointment of their poc, a facetoface visit to ensure theyre compliant, and then as a backup a national the ncic data back check to verify theyre a valid agency. With those controls in place, i am confident that this wont happen again. All right. The second part of my question . Yes, maam. In march when we got an out brief and discussed this with the gao, i immediately suspended release of all property to federal agencies until we could put these controls in place. Those controls included a mem randle ah mem memorandum of understanding which was finalized in 2016. Until the agencies complete the new requirements i do not release any additional property. So you dont think your program should be suspended, is that in essence what youre saying . All right. Mr. Canon, dod responded to gao recommendation number two by stating, and i quote, dla currently has policy requiring on cytofishls to request and verify identification from all customers. What, if any, disciplinary actions have been taken against the individuals and the supervisors responsible for oversight and training who approved the fictitious application foreign rollme enro the Law Enforcement program or approved the request of the property or transfer of the property without following proper procedures . How is dla determining who is responsible . Maam, we are looking at our records to determine the property that was release and where it was released so we could determine as best we can the individual or individuals responsible. Prior to that, as soon as we identified the locations that the property came from we immediately conducted remedial training for every person at that site for the control measures we already had in place that were not follow. Since then we have also add additional emphasis on our controls when we do our semiannual selfinspection. When we do our biannual compliance reviews, when i do my no noticed site visits and when headquarters comes down to do their visits as well. Any time an individual is found who is either behavior or performance is not up to standards, we take appropriate corrective actions depending on the circumstances. What kind of disciplinary action would you take . Are you releasing the people, changing their positions or what . I have a range of actions i could take depending on the circumstances and the situation, and i have taken i have taken actions for infractions, every from a letter of counseling to dismissal. So the range is open depending on the situation, maam. Okay. I have one quick question. Ms. Merit, while the majority of your report focused on the application, approval and transfer of this property, can you provide insight with what you observed with respect to accountability in tracking of controlled property both at the disposition sites as well as once transferred to a federal, state or local Law Enforcement agency . And i dont have much time left. Sure. At the federal level we did observe one case in which one federal organization in d. C. Was not aware of how much property had been transferred to that agency or to its respective activities in the field. That was quickly remedied. They temporarily halted any approval at that time. At the local and state sites themselves, that actually went pretty well because they had a state coordinator, a lot of the processes were being double checked. So unlike the federal level, there were more checks and balances at the state and local level. Thank you very much. I yield back. Thank you, councilwoman bordallo. We proceed to councilman scott of georgia. Thank you. My questions are predominantly for dla. You said you recognized the problem prior to the gao examination, is that correct . That is correct. When did you first recognize the problem . We first started our efforts to improve the federal program in september of 2015. We began by bringing in federal agencies for more training to ensure they knew how to properly work with the program, and that quickly led to the beginning of the development. The memorandum of understanding. At the point when we heard in march of 2017 the investigative what had happened, as you heard, we quickly moved to implement additional procedures. But you said your efforts began in 15. When did you first recognize that you had a problem . Sir, we recognized that the control measures in place for the federal agencies were not as robust as those for the state and local agencies in late 2015, as we discussed the program with the federal agency participants. Okay. So you first recognized the problem in 2015 . Late 2015. You were taking corrective actions but you did not expedite those actions until the gao report . Correct. So most of the items on these boards are not lethal items. Would the controls have been different if they had been firearms or a lethal item . We have additional application process in place for items such as weapons and for arm orr Armored Vehicles and aircraft. Thats a more thorough application process they would have had to have gone through for those items. The difference in the threshold, is it based on the lethality or the cost of the items . What leads to the additional measures . When we did our risk analysis, internally we determined in conjunction with guidance from the White House Committee and the white house review Permanent Working group that extra controls were in place. Weve always had extra controls in place for weapons and Armored Vehicles and aircraft. So its based on the type of equipment and the potential use of that equipment. Okay. And so it would potentially somebody used something fake to obtain something from the government and then turn around and sell it on ebay or at a pawn shop or something along those lines. Do we have any idea what happened to the items or the value of the items . The items from the gao report, sir . No, the ones that occurred prior to you recognizing that something happen for you to recognize that you had a problem. Did items go to was there a misrepresentation, was there theft of items. No, sir. As we looked at our control measures in place for the federal program, we noticed they were not as string enent as the control measures we had in place for the state and local program. So our efforts were to make the programs more similar in the levels of control, not that anything had gone out but to prevent things from going out, sir. But you do not believe that anybody misrepresented something to obtain something for free or at a discount from the federal government and then turn around and sell it for a profit . I have no knowledge of that happening. Do we know where the items are . We know where all of the items from if gao report are, yes, sir. Okay. With that said, mr. Chairman, that pretty much answers the questions that i had. Im happy we know where all of the items are and certainly appreciate the additional measures being put in place. It is an important program. Ill tell you, i know a lot of the discussions around the program revolve around the larger equipment. I happen to know a sheriffs deputy fairly well that stepped out of the bear cat, and he stepped out of it, buck shot hit the window. Had he been in a normal squad car he wouldnt be with us today. So i hope we will continue this program and making sure we get our Law Enforcement officers the equipment they need to do their job. Thank you very much, councilman scott, for your insight and your personal view, too, which i agree with. Thank you. Were grateful now to proceed to councilman Anthony Brown of maryland. Thank you, mr. Chairman. I appreciate that you and the Ranking Member have convened this hearing to look into this very important issue. My question really goes to a little bit of a broader look at the 1033 program. In response to protests in ferguson following the killing of michael brown, president obama issued an executive order that cincluded the creation of dod and Justice Department working group to ensure oversight of this program. According to the project, that group has not met since january of this year under the new administration. In fact, President Trump has indicated that he intends to rescind the previous administrations executive order that ensured vital training for equipment acquisition, and that is of concern to me. Im also concerned that the transfer of Armored Vehicles and highpowered firearms as well as many other controlled items makes our police stations look more like Foreign Operating bases. Ambush protected Armored Vehicles patrolling the streets of prince george. I do get the importance of the program, it is about proportionality. My question is does the agency take into account the actual or potential threat that a Community Faces prior to delivering these militarystyled equipment . So, congressman, we actively support that working group for dla. Our vice director of the agency is our lead on that group. As you may know, that group looks closely at the categorization of items, which things would be prohibited, which things should be controlled. They completed another look at that in september of 16, going into this fiscal year, and we take that very seriously. We when we get the applications, we apply the decisions that were made from that Permanent Working group on what is allowed for us to execute. We execute the program. That group when they mailed those determinations in those categories, they brought in a number of different folks to have those discussions that included experts on the use of those type of weapons, it included civil liberty leaders, it included Law Enforcement leaders. If i can i dont have too much time. Can the small city of sea pleasant in prince georges county, i dont know, with 12,000 residents acquire the same type equip mant that the city of baltimore can obtain, or do you do some sort of, again, Risk Assessment, potential threat training, capabilities of the local Enforcement Agency . All have to first pass through a state coordinator, then mr. Canons Group Reviews that. They review it against the size of the force and number of items thar allowed to have. The training for the items goes back on the Law Enforcement community. Dod does not provide kind of the use of training. Do you require the training . We require they show and have done the training, yes, sir. Thank you. Follow up, with the time i have left. What effort, if any, i think you may have touched on this, is the dla taking to work not only with local Law Enforcement but also alongside Community Members . I heard you member Community Members in your response, through the 1033 transfer process . Sir, one of the requirements that weve levied on the program for the state and local agencies is that before they receive property from us, before they enroll in the program they must be approved by their governing body. Whether thats the state or county, but whoever oversees that body must approve not only their participation in the program but their withdrawal of property. Like the sea Pleasant City council . Correct, if sea pleasant is in the program. By way of example. One final thought, follow up. Are there any restrictions on transferring equipment under the 1033 program when the local Law Enforcement agency is under investigation by the doj for any violation of civil rights . Is that addressed in consent orders that the handful that are currently in place . We coordinate with department of justice. Any time they have concerns with a department we restrict the transfer of property to that department until they tell us otherwise. So it is not a a you evaluate whether it ought to be restricted or if theres a violation you restrict . Doj evaluates and then advises us to restrict. Thank you, mr. Chairman. I yield back. Thank you, councilman brown. We now proceed to councilwoman vickie horzler of missouri. Thank you. I appreciate the work of the gao as well as dla in addressing this real issue here. Please discuss the process for a Law Enforcement agency to obtain controlled items. What other steps in the authorization process are being considered in light of the gaos investigation . The process we have in place for our states and locals is a similar process we have already implemented for the federal government. Any time somebody wants to withdraw a piece of controlled property, first that has to go through their state or federal coordinator to approve necessary need it. We also have some apportionment rules. We give preference to counter drug, Counter Terrorism and Border Patrol responsibilities. But for things like m wraps we also look at a local ability for Law Enforcement agencies that provide mutual support. If there is mutual support available from another closeby Law Enforcement agency we wont apportion them, for example, an m wrap. We wont give the county and the city both an m wrap if theyre in if same location. For weapons, we authorize one per paid officer and for vehicles it is typically one vehicle, unarmored like a humvee for every three officers. Thats very good. Given the gao created a fictitious Law Enforcement Agency Approved for the program, how does dla plan to review and revalidate the Law Enforcement agencies currently enrolled in the program to ensure each enrollment is verified as being legitimate and an eligible Law Enforcement agency, and how long will this process take and what impact will it have on approving new applications . So for the federal side of the program as we discussed earlier, all of those are suspended until they come forward and comply with the new procedure with the mou, the poc, a visit to see them and our confirming their identities in the fbi database. We think those requirements are both sound to ensure integrity to the program and also reasonable for a federal agency to comply with. On the state side of the program, we also intend to be proactive and go back and retroactively look at every single one of those organizations against that fbi database as well, just to ensure that we dont have anything else there. Great. And the gao report mentions an annual training conference for state coordinators and representative brown talked about the training and that the state coordinators take this training within the state. If this training is provided, why are Law Enforcement agencies reporting the need for more training on leso Program Policies and why did you feel the need to develop an Online Training tool . Why does this training vary within the states . So, we do an annual conference. It is actually next month in norfolk, virginia, where we train and advise the state coordinators on the policy, and then the state coordinators are responsible to train the trainer, the train their leas. Some states do it better than others. To augment that weve developed some Online Training to assist the leas. We offer over the phone or skype based training if an lea needs training on how to how to get into the program, how to work the program, how to klt faccoun property. We also have what we call job aids which are basically checklists to help them do the stepbystep procedures. As we do Program Compliance review, we go every other year to every other state to review their program and inventory their property. We provide training as required as requested while we happen to be there visiting that lea. Well, the Online Training qualify to replace the additional the training that the state may have . Is it an either or or just supplement . It is to supplement, maam. Congresswoman, we are also going to take when we conduct the frauld Risk Assessment, we noted the number of leas that asked for more training. We will make it part of what we look at under that review as well and go to the furthest extent of dods capability to provide additional training. Thank you very much. Sounds like you are taking very proactive steps. Appreciate you doing that. I yield back. Thank you very much, Council Woman hartzler. We know proceed to the councilwoman of new hampshire. Concerned, like everybody is here, about this, but im also very puzzled because it seemed to me theres more theres more red tape to open up a doughnut shop then it is to get this equipment or that there was. Im puzzled as to how the rules and regulations could have been so loose that they were able to create this fictitious agency to receive this material. Can you please walk me back to the beginning . Who drafted these regulations that allowed because as i listen to you now and you say, and, you know, im glad youre doing that, that now youve identified a point of contact and you have all these steps there. But common sense says they should have been there at the beginning. And so i would like you to walk me back to the very beginning, who drafted this, obviously, with so many holes in it, that it was possible for the gao to do this and who knows who else. And i also would like to see that the people who drafted this clearly are not competent enough to handle this work. And so im not comfortable with the answer of, well, you know, were going to go back and we have several possibilities. This is a question of competence. This was a serious job. And they failed the people of this country. And so i would appreciate your comments on that. The 10 33 Program Management was transferred to the Defense Logistics agencies Disposition Services in very late 2008. Through we completed the transfer in 2009. And we are following procedures from there. The procedures that we had in place requiring the leas to complete thorough application, to have a Regional Special agent in charge. And have the statute of authority. Was identified as being unsu unsufficient by the gao and we have sense made improvements. The application wasnt immediately approved. There was some back and forth between gao and my staff and it took several months before that application was approved but it was, in fact, approved and should not have been. We have tightened up those procedures since then. Ill add, congresswoman, again, we view it just as seriously. The other things that have been reviewed here, and, again, our view of those controls was that with mr. Cannons group working directly with those federal organizations and the things he went through, that we did have the controls in place. That clearly is not the case. But the program has also been reviewed by other external folks as well. There have been previous gao reports. Weve had an independent review of the program by the rand corporation. It doesnt make get any better, but the external reviews also did not identify these deficiencies. Now that we know them, we are all over it to make sure it never happens again. I appreciate your honesty and your comment. But it still doesnt cover the basic problem here. Now, i read something about now theyre going to have to show an i. D. So can you tell me what what was meant by that, that they didnt have to show an i. D. . Maam, when someone comes to a Disposition Services site to the pick up property, if theyre not an employee of Disposition Services, everyone is required to present an i. D. And follow proper signin procedures. We have always had those measures in place. In this case, those measures were not adequately followed. So what i have done since then is i immediately, at the three locations, because i dont know the specific because the gao report didnt identify them, but were able to figure out the locations they went to. We immediately conducted remedial training on everybody there to make sure they are following the protocols that are already in place. And then since and then we started. I actually brought my six field leaders to battle creek, michigan, to my headquarters, to talk to them about this facetoface in the first second week of july, and gave them 30 days to train every single individual, every single employee, Disposition Services, on following the proper procedures for identification of personnel and kind, count and condition of property. We have about 50 of all sites complete. And we will be complete next month retraining everybody and emphasizing the need to follow the established procedures. And i appreciate that. Again, these are not toys. These were rules and regulations that were violated. And could have wound up in a very serious outcome here. And so i think just speaking to them is not enough. They had a responsibility to follow this protocol, which was weak enough as it was. And so im still want to know what happens besides you guys shouldnt have done that . So the moment mr. Cannon is able to identify who those individuals are, our agency and his organization have a precedent and are prepared to take the appropriate administrative disciplinary action. And that can be anything from suspensions without pay to removal from the position. Okay, thank you, and i yield back. Thank you, congresswoman shea porter. We appreciate your service. We now proceed to congressman mecechum. Thank you. Im going to ask one that might be a little more nuanced. That is this. When you all dispose of controlled property such as the items that weve been talking about, and lets assume that youre going to local Law Enforcements requested it. Do you take into consideration what is going on in that area at the time . For instance, if there are tensions between the local citizens and the Police Department or anything like that . Or do you just sort of dispose of the property in accordance with whatever guidelines you have in place . If we have a request from a Law Enforcement agency, that request for property has to be first approved by their local governing body. So the state, city council. Then that has to go to a state coordinator who has to approve the request and then when that request comes to us, we will issue property, if the property is available. If property is not issued to the department of defense as First Priority and programs as second priority and its property, then that is deprogrammed and destroyed. Assuming it has been approved by the governing body, been submitted to you by the state liaison, are there any circumstances in which you say no, you know, city of richmond, youre just not going to get this property for whatever reasons . We give priority of property to counterdrug Border Protection and counterterrorism. If theres multiple requests, that will determine which lea gets it. But we also if the fbi tells us that they have concerned with an lea and advises us, then we do not issue to that lea. The other thing, congressman, we also have allocation limits too. So that in terms of the quantity of those types of items they can have. That we look at the size of that organization. Thats another thing that can limit how much of these controlled items that unit can get. Right. Thank you. Mr. Chairman, i yield back. Thank you very much, congressman. We now have a final question from congresswoman. Thank you very much, mr. Chairman. Miss merrill, weve heard that dla described the actions that they have taken and that they believe they have taken appropriate actions to fix the problem. Now, my question to you is how would you assess dlas actions both in response to your recommendations and other steps that they have taken . We have assessed those actions as positive steps in the right direction. However, we cant emphasize enough that we believe that top leadership, senior level leadership at dla is imperative in order for those recommendations to be implemented. At gao, we continuously followed up on the recommendations. And we will do so at this point in time. And oftentime in our reporting on programs, we do include those status reports. Those statuses is also published on our public website as well. So you as well as the public at large have opportunity to look at the progress thats being made by dla on those recommendations. So i take it that you are satisfied with what they are doing now, but youre going to be closely monitoring it in the future, is that correct . Yes. The steps that we have asked them as it relates to the four recommendations that we have are all steps that we have proposed and they agreed to. They also established time lines in their comments to us on the report. So thats also very important. As to whether or not they meet those milestones and hopefully those will be immediate milestones. And so with respect there, we do continue to follow, as i said, and if there are problems, we duly note that. Good. Thank you, miss merit. And i yield back. Thank you. Thank you very much, congresswoman. As we conclude, the 1033 program is so important to help provide security for american families. Could you tell the american people, that is, how many state, local, federal agencies that you work with, what is the value of the surplus equipment that you provide . So, again, we have 8,621 agencies in the program. We have the property on the books of those folks through the program is over 1. 5 million pieces of equipment. Valued over 2. 4 billion in original acquisition value. That is the good that were providing to those Law Enforcement agencies. Well leave the last few moments of this event which you can watch at cspan. Organize. A Panel Discussion about iranian Public Opinion on the Trump Administration and international issues. Its just getting started
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