State of California et al v. Trump et al

Filing 57

ADMINISTRATIVE MOTION To enlarge page limits in support of motion for injunctive relief filed by State of California. Responses due by 4/18/2019. (Attachments: # 1 Proposed Order, # 2 Declaration of Lee Sherman, # 3 Notice of Motion & Motion for Preliminary Injunction, # 4 Proposed Order, # 5 Appendix of Declarations re: TFF, # 6 Appendix of Declarations re: Environmental, # 7 Request for Judicial Notice, # 8 Certificate/Proof of Service)(Sherman, Lee) (Filed on 4/4/2019)

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XAVIER BECERRA
Attorney General of California
ROBERT W. BYRNE
SALLY MAGNANI
MICHAEL L. NEWMAN
Senior Assistant Attorneys General
MICHAEL P. CAYABAN
CHRISTINE CHUANG
EDWARD H. OCHOA
Supervising Deputy Attorneys General
HEATHER C. LESLIE
JANELLE M. SMITH
JAMES F. ZAHRADKA II
LEE I. SHERMAN (SBN 272271)
Deputy Attorneys General
300 S. Spring St., Suite 1702
Los Angeles, CA 90013
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]
Attorneys for Plaintiff State of California

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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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OAKLAND DIVISION
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STATE OF CALIFORNIA; STATE OF
COLORADO; STATE OF
CONNECTICUT; STATE OF
DELAWARE; STATE OF HAWAII;
STATE OF ILLINOIS; STATE OF
MAINE; STATE OF MARYLAND;
COMMONWEALTH OF
MASSACHUSETTS; ATTORNEY
GENERAL DANA NESSEL ON BEHALF
OF THE PEOPLE OF MICHIGAN;
STATE OF MINNESOTA; STATE OF
NEVADA; STATE OF NEW JERSEY;
STATE OF NEW MEXICO; STATE OF
NEW YORK; STATE OF OREGON;
STATE OF RHODE ISLAND; STATE OF
VERMONT; COMMONWEALTH OF
VIRGINIA; and STATE OF WISCONSIN;

REQUEST FOR JUDICIAL NOTICE IN
SUPPORT OF PLAINTIFFS’ MOTION
FOR PRELIMINARY INJUNCTION
Date:
Time:
Dept:
Judge:

May 9, 2019
2:00 pm
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Honorable Haywood S. Gilliam,
Jr.
Trial Date:
None Set
Action Filed: February 18, 2019

Plaintiffs,

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Case No. 4:19-cv-00872-HSG

v.

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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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DONALD J. TRUMP, in his official capacity
as President of the United States of America;
UNITED STATES OF AMERICA; U.S.
DEPARTMENT OF DEFENSE; PATRICK
M. SHANAHAN, in his official capacity as
Acting Secretary of Defense; MARK T.
ESPER, in his official capacity as Secretary of
the Army; RICHARD V. SPENCER, in his
official capacity as Secretary of the Navy;
HEATHER WILSON, in her official capacity
as Secretary of the Air Force; U.S.
DEPARTMENT OF THE TREASURY;
STEVEN T. MNUCHIN, in his official
capacity as Secretary of the Treasury; U.S.
DEPARTMENT OF THE INTERIOR;
DAVID BERNHARDT, in his official capacity
as Acting Secretary of the Interior; U.S.
DEPARTMENT OF HOMELAND
SECURITY; KIRSTJEN M. NIELSEN, in
her official capacity as Secretary of Homeland
Security;
Defendants.

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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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Plaintiffs hereby respectfully request, pursuant to Federal Rule of Evidence 201, that this
Court take judicial notice of the following documents.
1.

Trump on March 8, 2019.1

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Attached hereto as Exhibit 1 is a true and correct copy of a tweet posted by President

2.

Attached hereto as Exhibit 2 is a true and correct copy of a declaration signed by

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Loren Flossman, Acquisition Program Manager for the Wall Program Management

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Office (Wall PMO), U.S. Border Patrol Program Management Directorate, U.S.

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Customs and Border Protection (CBP), and filed in Alvarez v. Trump, Case No. 19-

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cv-00404 [ECF 8-1] (D.D.C. April 1, 2019).

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3.

Attached hereto as Exhibit 3 is a true and correct copy of an excerpt of the transcript

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of a speech President Trump delivered when he announced his candidacy for

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president on June 16, 2015.

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4.

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Trump on July 13, 2016.
5.

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Attached hereto as Exhibit 5 is a true and correct copy of a tweet posted by President
Trump on August 27, 2016.

6.

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Attached hereto as Exhibit 4 is a true and correct copy of a tweet posted by President

Attached hereto as Exhibit 6 is a true and correct copy of an excerpt of the transcript
of a speech delivered by President Trump on September 1, 2016.

7.

Attached hereto as Exhibit 7 is a true and correct copy of an excerpt of the transcript

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of remarks delivered by President Trump on April 3, 2018. As of April 4, 2019, the

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complete transcript is posted on the White House’s official website, at

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https://www.whitehouse.gov/briefings-statements/remarks-president-trump-working-

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lunch-heads-baltic-states/.

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8.

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Attached hereto as Exhibit 8 is a true and correct copy of an excerpt of the transcript
of a speech delivered by President Trump on February 28, 2017. As of April 4, 2019,

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The U.S. Department of Justice has stated that President Trump’s tweets are “official
statements of the President of the United States,” since “a tweet can be the equivalent of a public
statement or speech.” James Madison Project v. Dep’t of Justice, Case No. 1:17-cv-00144, Def.
Supp. Mem., at 2, 5-6 & n.4 [ECF No. 29] (D.D.C. Nov. 13, 2017).
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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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the transcript is posted on the White House’s official website, at

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https://www.whitehouse.gov/briefings-statements/remarks-president-trump-joint-

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address-congress/.

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9.

Attached hereto as Exhibit 9 is a true and correct copy of an excerpt of the transcript

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of a speech delivered by President Trump on April 28, 2017. As of April 4, 2019, the

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transcript is posted on the White House’s official website, at

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https://www.whitehouse.gov/briefings-statements/remarks-president-trump-national-

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rifle-association-leadership-forum/.

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10.

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of a speech delivered by President Trump on August 23, 2017.
11.

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Attached hereto as Exhibit 11 is a true and correct copy of a tweet posted by
President Trump on February 23, 2018.

12.

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Attached hereto as Exhibit 10 is a true and correct copy of an excerpt of the transcript

Attached hereto as Exhibit 12 is a true and correct copy of a tweet posted by
President Trump on June 21, 2018.

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Attached hereto as Exhibit 13 is a true and correct copy of an excerpt of the transcript

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of remarks delivered by President Trump on January 10, 2019. As of April 4, 2019,

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the complete transcript is posted on the White House’s official website, at

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https://www.whitehouse.gov/briefings-statements/remarks-president-trump-marine-

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one-departure-30/.

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14.

Attached hereto as Exhibit 14 is a true and correct copy of an excerpt of The WALL

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Act of 2018, S. 3713, 115th Cong. (2018). No action was taken on the bill after

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referral to the Senate Committee on Finance. As of April 4, 2019, the complete text

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of the bill is posted on the United States Congress’s official website, at

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https://www.congress.gov/115/bills/s3713/BILLS-115s3713is.pdf; and the history of

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the bill is posted on Congress’s official website, at

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https://www.congress.gov/bill/115th-congress/senate-bill/3713/all-actions.

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15.

Attached hereto as Exhibit 15 is a true and correct copy of the 50 Votes for the Wall
Act, H.R. 7073, 115th Cong. (2018). No action was taken on the bill after referral to
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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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the House Subcommittee on Border and Maritime Security. As of April 4, 2019, the

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complete text of the bill is posted on the United States Congress’s official website, at

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https://www.congress.gov/115/bills/hr7073/BILLS-115hr7073ih.pdf; and the history

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of the bill is posted on Congress’s official website, at

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https://www.congress.gov/bill/115th-congress/house-bill/7073/all-actions.

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16.

Attached hereto as Exhibit 16 is a true and correct copy of an excerpt of the Build the

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Wall, Enforce the Law Act of 2018, H.R. 7059, 115th Cong. (2018). No action was

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taken on the bill after referral to the House Subcommittee on Trade. As of April 4,

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2019, the complete text of the bill is posted on the United States Congress’s official

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website, at https://www.congress.gov/115/bills/hr7059/BILLS-115hr7059ih.pdf; and

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the history of the bill is posted on Congress’s official website, at

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https://www.congress.gov/bill/115th-congress/house-bill/7059/all-actions.

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17.

Attached hereto as Exhibit 17 is a true and correct copy of an excerpt of the Fund and

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Complete the Border Wall Act, H.R. 6657, 115th Cong. (2018). No action was taken

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on the bill after referral to the House Subcommittee on Immigration and Border

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Security. As of April 4, 2019, the complete text of the bill is posted on the United

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States Congress’s official website, at

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https://www.congress.gov/115/bills/hr6657/BILLS-115hr6657ih.pdf; and the history

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of the bill is posted on Congress’s official website, at

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https://www.congress.gov/bill/115th-congress/house-bill/6657/all-actions.

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18.

Attached hereto as Exhibit 18 is a true and correct copy of an excerpt of the

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American Border Act, H.R. 6415, 115th Cong. (2018). No action was taken on the

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bill after referral to the House Subcommittee on Immigration and Border Security.

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As of April 4, 2019, the complete text of the bill is posted on the United States

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Congress’s official website, at https://www.congress.gov/115/bills/hr6415/BILLS-

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115hr6415ih.pdf; and the history of the bill is posted on Congress’s official website,

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at https://www.congress.gov/bill/115th-congress/house-bill/6415/all-actions.

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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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19.

Attached hereto as Exhibit 19 is a true and correct copy of an excerpt of the Border

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Security and Immigration Reform Act of 2018, H.R. 6136, 115th Cong. (2018). On

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June 27, 2018, this bill failed in the House of Representatives by a recorded vote of

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121 – 301. As of April 4, 2019, the complete text of the bill is posted on the United

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States Congress’s official website, at

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https://www.congress.gov/115/bills/hr6136/BILLS-115hr6136ih.pdf; and the history

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of the bill is posted on Congress’s official website, at

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https://www.congress.gov/bill/115th-congress/house-bill/6136/all-actions.

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20.

Attached hereto as Exhibit 20 is a true and correct copy of an excerpt of the Securing

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America’s Future Act of 2018, H.R. 4760, 115th Cong. (2018). On June 21, 2018,

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this bill failed in the House of Representatives by a recorded vote of 193 – 231. As

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of April 4, 2019, the complete text of the bill is posted on the United States

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Congress’s official website, at https://www.congress.gov/115/bills/hr4760/BILLS-

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115hr4760ih.pdf; and the history of the bill is posted on Congress’s official website,

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at https://www.congress.gov/bill/115th-congress/house-bill/4760/all-actions.

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21.

Attached hereto as Exhibit 21 is a true and correct copy of an excerpt of the transcript

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of a December 11, 2018, meeting between President Trump, Senate Minority Leader

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Chuck Schumer, and House Speaker-Designate Nancy Pelosi. As of April 4, 2019, the

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complete transcript is posted on the White House’s official website, at

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https://www.whitehouse.gov/briefings-statements/remarks-president-trump-meeting-

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senate-minority-leader-chuck-schumer-house-speaker-designate-nancy-pelosi/.

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22.

Attached hereto as Exhibit 22 is a true and correct copy of the Senate Amendment to

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House Amendment to Senate Amendment of the Department of Defense

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Appropriations Act of 2018, H.R. 695, 115th Cong. (2018). On December 19, 2018,

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the Senate approved the bill with an amendment by a Voice Vote, which the House

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did not adopt. As of April 4, 2019, the complete text of the bill with the Senate’s

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amendments is posted on the United States Congress’s official website, at

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https://www.congress.gov/115/bills/hr695/BILLS-115hr695eas2.pdf; and the history
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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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of the bill is posted on Congress’s official website, at

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https://www.congress.gov/bill/115th-congress/house-bill/695/all-actions.

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23.

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Attached hereto as Exhibit 23 is a true and correct copy an article containing quotes
from President Trump during an event on December 20, 2018.

24.

Attached hereto as Exhibit 24 is a true and correct copy of an excerpt of the House

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Amendment to Senate Amendment to House Amendment to Senate Amendment of

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the Department of Defense Appropriations Act of 2018, H.R. 695, 115th Cong.

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(2018). On December 20, 2018, the House approved the bill with an amendment by a

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vote of 217 – 185, which the Senate did not adopt. As of April 4, 2019, the complete

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text of the bill with the House’s amendments is posted on the United States

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Congress’s official website, at https://www.congress.gov/115/bills/hr695/BILLS-

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115hr695eah2.pdf; and the history of the bill is posted on Congress’s official website,

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at https://www.congress.gov/115/bills/hr695/BILLS-115hr695eah2.pdf.

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25.

Attached hereto as Exhibit 25 is a true and correct copy of a January 6, 2019 letter

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sent from Office of Management and Budget Acting Director Russell T. Vought to

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Senate Appropriations Committee Chairman Richard Shelby.

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26.

Attached hereto as Exhibit 26 is a true and correct copy of a transcript of remarks

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delivered by President Trump on January 25, 2019. As of April 4, 2019, the

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complete transcript is posted on the White House’s official website, at

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https://www.whitehouse.gov/briefings-statements/remarks-president-trump-

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government-shutdown/.

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27.

Attached hereto as Exhibit 27 is a true and correct copy of a memorandum issued by

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President Trump on April 4, 2018. As of April 4, 2019, the complete memorandum

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is posted on the White House’s official website, at

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https://www.whitehouse.gov/presidential-actions/presidential-memorandum-

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secretary-defense-attorney-general-secretary-homeland-security/.

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28.

Attached hereto as Exhibit 28 is a true and correct copy of a memorandum issued by
President Trump on February 15, 2019, referred to in Plaintiffs States’ Notice of
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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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Motion and Motion for Preliminary Injunction as the “Executive Action.” As of

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April 4, 2019, the Executive Action is posted on the White House’s official website,

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at https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-

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border-security-victory/.

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29.

Attached hereto as Exhibit 29 is a true and correct copy of the Office of the Inspector

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General’s Audit of the Department of the Treasury Forfeiture Fund’s Financial

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Statements for Fiscal Years 2018 and 2017 dated December 13, 2018. As of April 4,

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2019, the complete Audit Report is posted on the Treasury’s official website, at

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https://www.treasury.gov/about/organizational-

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structure/ig/Audit%20Reports%20and%20Testimonies/OIG-19-022.pdf.
30.

Attached hereto as Exhibit 30 is a true and correct copy of a February 15, 2019 letter

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and attachment sent from Assistant Secretary of the Treasury for Management David

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F. Eisner to the chairs and ranking members of congressional appropriations

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committees.

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31.

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the White House on March 4, 2019.
32.

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Attached hereto as Exhibit 31 is a true and correct copy of a memorandum issued by

Attached hereto as Exhibit 32 is a true and correct copy of a reprogramming action
issued by the Department of Defense on March 25, 2019.

33.

Attached hereto as Exhibit 33 is a true and correct copy of a February 25, 2019 letter

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from Department of Homeland Security Executive Secretary Christina Bobb to

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Department of Defense Executive Secretary Capt. Hallock N. Mohler, Jr.

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34.

Attached hereto as Exhibit 34 is a true and correct copy of a March 25, 2019 letter

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from Acting Department of Defense Secretary Patrick M. Shanahan to Department of

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Homeland Security Secretary Kirstjen Nielsen.

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35.

Attached hereto as Exhibit 35 is a true and correct copy of a March 26, 2019 letter

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from House Armed Services Committee Chairman Adam Smith to Department of

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Defense Under Secretary David L. Norquist. As of April 4, 2019, this letter is

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available on the House Armed Service Committee’s official website, at
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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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https://armedservices.house.gov/_cache/files/5/7/57ea01fb-9872-4a49-b878-

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9b844ca0b030/B5C69226DA76BB0F77AC9E06052FA8AC.fy-19-01-ra.pdf.

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36.

Attached hereto as Exhibit 36 is a true and correct copy of a March 26, 2019 letter

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from Peter J. Visclosky, Chairman of the House Appropriations Committee’s Defense

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Subcommittee, to Department of Defense Under Secretary David L. Norquist.

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37.

Attached hereto as Exhibit 37 is a true and correct copy of an excerpt of the

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Department of Defense’s Fiscal Law Deskbook. As of April 4, 2019, the complete

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document is posted on the Library of Congress’s official website, at

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http://www.loc.gov/rr/frd/Military_Law/pdf/fiscal-law-deskbook_2014.pdf.

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38.

Attached hereto as Exhibit 38 is a true and correct copy of an excerpt of the

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Department of Defense’s Financial Management Regulations. As of April 4, 2019,

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the complete Regulations are posted on the Department of Defense’s official website,

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at https://comptroller.defense.gov/Portals/45/documents/fmr/Combined_Volume1-

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16.pdf.

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39.

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Attached hereto as Exhibit 39 is a true and correct copy of an excerpt of the transcript
of a March 26, 2019, hearing of the House Armed Services Committee.

40.

Attached hereto as Exhibit 40 is a true and correct copy of a page from the

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Department of Homeland Security’s website entitled “Walls Work” that is dated

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December 12, 2018. As of April 4, 2019, the complete document is posted on the

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Department of Homeland Security’s website, at

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https://www.dhs.gov/news/2018/12/12/walls-work.

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41.

Attached hereto as Exhibit 41 is a true and correct copy of a page from the

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Department of Homeland Security’s website entitled “El Paso Sector.” As of April 4,

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2019, this information is posted on the U.S. Customs and Border Protection’s

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website, at https://www.cbp.gov/border-security/along-us-borders/border-patrol-

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sectors/el-paso-sector-texas.

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42.

Attached hereto as Exhibit 42 is a true and correct copy of a document published by
the Treasury Executive Office for Asset Forfeiture entitled “Treasury Forfeiture
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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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Fund, Program Summary by Budget Activity.” As of April 4, 2019, the complete

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document is posted on the Department of Treasury’s website, at

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https://www.treasury.gov/about/budget-performance/budget-in-

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brief/BIB19/20.%20TEOAF%20BIB.pdf.

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43.

Attached hereto as Exhibit 43 is a true and correct copy of a report published by the

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Treasury Executive Office for Asset Forfeiture entitled “Congressional Budget

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Justification and Annual Performance Report and Plan FY 2019.” As of April 4,

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2019, the complete report is posted on the Department of Treasury’s website, at

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https://www.treasury.gov/about/budget-

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performance/CJ19/21.%20TEOAF%202019%20CJ.pdf.
44.

Attached hereto as Exhibit 44 is a true and correct copy of a December 21, 2015,

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press release issued by the U.S. Department of Justice entitled “Assets [sic] Forfeiture

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Fund Rescission Impact on Equitable Sharing Program.” As of March 28, 2016, this

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press release is posted on the U.S. Department of Justice’s website, at

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https://www.justice.gov/criminal-afmls/file/801381/download.

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45.

Attached hereto as Exhibit 45 is a true and correct copy of an excerpt of a

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memorandum issued by the Government Accountability Office entitled “Secure

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Border Initiative Fence Construction Costs” dated January 29, 2009. As of April 4,

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2019, the complete memorandum is posted on the Government Accountability

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Office’s official website, at https://www.gao.gov/new.items/d09244r.pdf.

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46.

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of a March 14, 2019, hearing of the Senate Armed Services Committee.
47.

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Attached hereto as Exhibit 46 is a true and correct copy of an excerpt of the transcript

Attached hereto as Exhibit 47 is a true and correct copy of an excerpt of the transcript
of a February 26, 2019, hearing of the Senate Armed Services Committee.

48.

Attached hereto as Exhibit 48 is a true and correct copy of an excerpt of the Director

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of National Intelligence’s “Worldwide Threat Assessment,” dated on January 29,

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2019. As of April 4, 2019, the complete report is posted on the Director of National

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8
Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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Intelligence’s official website, at https://www.dni.gov/files/ODNI/documents/2019-

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ATA-SFR---SSCI.pdf.

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49.

Attached hereto as Exhibit 49 is a true and correct copy of an excerpt of the

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Chairman of the Joint Chiefs of Staff Instruction regarding DOD Counterdrug

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Support dated January 26, 2007. As of April 4, 2019, the complete document is

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posted on the Joint Chiefs of Staff’s official website, at

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https://www.jcs.mil/Portals/36/Documents/Library/Instructions/3710_01.pdf?ver=20

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16-02-05-175036-593.

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50.

Attached hereto as Exhibit 50 is a true and correct copy an excerpt of the transcript of

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remarks delivered by President Trump on February 15, 2019. As of April 4, 2019,

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the complete transcript is posted on the White House’s official website, at

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https://www.whitehouse.gov/briefings-statements/remarks-president-trump-national-

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security-humanitarian-crisis-southern-border/.

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Each of these exhibits is a matter of public record and is therefore subject to judicial notice.

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Fed. R. Evid. 201(b); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (a court may

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judicially notice matters of public record unless the matter is a fact subject to reasonable dispute).

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Exhibit 2 is judicially noticeable because it is a court record from a proceeding that

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addresses issues relevant to this litigation. U.S. ex rel. Robinson Rancheria Citizens Council v.

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Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (holding that a court “may take notice of

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proceedings in other courts, both within and without the federal judicial system, if those

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proceedings have a direct relation to matters at issue”).

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Exhibits 8-9, 13, 25-38, 40-46, 49-51 are judicially noticeable because government

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memoranda, bulletins, letters, statements and opinions are matters of public record appropriate for

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judicial notice. See Brown v. Valoff, 422 F.3d 926, 933 n.9 (9th Cir. 2005) (judicially noticing an

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administrative bulletin); Mack v. S. Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986)

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(court may take judicial notice of records and reports of state administrative bodies), overruled on

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other grounds by Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 111 (1991);

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Interstate Nat. Gas. Co. v. S. Cal. Gas. Co., 209 F.2d 380, 385 (9th Cir. 1953) (judicially noticing
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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

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government agency records and reports); Cnty. of Santa Clara v. Trump, 250 F. Supp. 3d 497,

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520 nn.5, 8, 11 (N.D. Cal. 2017) (taking judicial notice of government memoranda and letters).

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Exhibits 8-9, 13-22, 24, 26-29, 35, 37-38, 40-46, 49-51 are judicially noticeable because

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they are posted on official government websites. See Daniels–Hall v. Nat’l Educ. Ass’n, 629 F.3d

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992, 998–99 (9th Cir. 2010) (judicially noticing information contained on a government website);

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Paralyzed Veterans of America v. McPherson, No. C 06–4670 SBA, 2008 WL 4183981, at *5

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(N.D. Cal. Sept. 9, 2008) (finding that courts commonly take judicial notice of information and

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documents on government websites, citing cases from various jurisdictions). Thus, the statements

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of government departments and agencies contained within these exhibits are not subject to

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reasonable dispute, as the statements “can be accurately and readily determined from sources

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whose accuracy cannot reasonably be questioned.” Fed. R. Evid. § 201(b)(2).

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Exhibits 1-13, 21, 23, 25-36, 39-51 are judicially noticeable because the statements of

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government officials or entities that these documents contain are not subject to reasonable

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dispute, as the statements “can be accurately and readily determined from sources whose

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accuracy cannot reasonably be questioned.” Fed. R. Evid. § 201(b)(2).

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Exhibits 13-20, 22, 24, 39, 47, and 48 are judicially noticeable because they are either bills

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considered by Congress or transcripts of congressional testimony. In general, “[l]egislative

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history is properly a subject of judicial notice.” Anderson, 673 F.3d at 1094 n.1. This is also true

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of testimony given at congressional hearings. See Adarand Constructors, Inc. v. Slater, 228 F.3d

20

1147, 1168 n.12 (10th Cir. 2000) (taking “judicial notice of the content of hearings and testimony

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before [] congressional committees and subcommittees”); see also Cnty. of Santa Clara, 250 F.

22

Supp. 3d 520 nn. 4, 6, 7, 10 (taking judicial notice of government officials’ press conference

23

statements, press briefings, and interview statements).

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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

1

Dated: April 4, 2019

Respectfully Submitted,

2

XAVIER BECERRA
Attorney General of California
ROBERT W. BYRNE
SALLY MAGNANI
MICHAEL L. NEWMAN
Senior Assistant Attorneys General
MICHAEL P. CAYABAN
CHRISTINE CHUANG
EDWARD H. OCHOA
Supervising Deputy Attorneys General

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/s/ Lee I. Sherman
LEE SHERMAN
HEATHER C. LESLIE
JANELLE M. SMITH
JAMES F. ZAHRADKA II
Deputy Attorneys General
Attorneys for Plaintiff State of California

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Req. for Judicial Notice in Supp. of Mot. for Prelim. Inj. (4:19-cv-00872-HSG)

EXHIBIT 1

Donald J. Trump

Follow

@realDonaldTrump

The Wall is being built and is well under
construction. Big impact will be made. Many
additional contracts are close to being
signed. Far ahead of schedule despite all of
the Democrat Obstruction and Fake News!
4:24 AM - 8 Mar 2019
26,376 Retweets 109,887 Likes
23K

26K

110K

Brian Krassenstein @krassenstein · Mar 8
Replying to @realDonaldTrump
YOUR wall is not being built. Parts of the FENCE is being renovated, which were

778

951

6.3K

Brian Krassenstein @krassenstein · Mar 8
You can keep telling lies to your base, trying to convince them that you are
building the wall you promised Mexico would pay for, but as you lie you lose

278

176

2.2K

Brian Krassenstein @krassenstein · Mar 8
America is WAKING UP!
541

84

1.8K

Mitch Andresen @Mitch_Andresen · Mar 8

3

1

50

EXHIBIT 2

Case 1:19-cv-00404-TNM Document 8-2 Filed 04/02/19 Page 1 of 5

EXHIBIT 2

Case 1:19-cv-00404-TNM Document 8-2 Filed 04/02/19 Page 2 of 5

Case 1:19-cv-00404-TNM Document 8-2 Filed 04/02/19 Page 3 of 5

Case 1:19-cv-00404-TNM Document 8-2 Filed 04/02/19 Page 4 of 5

Case 1:19-cv-00404-TNM Document 8-2 Filed 04/02/19 Page 5 of 5

Loren
Flossman

Digitally signed by Loren Flossman
DN: cn=Loren Flossman, o=Border
Wall PMO, ou=Portfolio Manager,
email=[e-mail]
v, c=US
Date: 2019.04.01 07:46:58 -04'00'

EXHIBIT

Here's Donald Trump's Presidential Announcement Speech

BY TIME STAFF JUNE 16, 2015

Wow. Whoa. That is some group of people. Thousands.
So nice, thank you very much. That’s really nice. Thank you. It’s great to be at
Trump Tower. It’s great to be in a wonderful city, New York. And it’s an honor
to have everybody here. This is beyond anybody’s expectations. There’s been
no crowd like this.
And, I can tell, some of the candidates, they went in. They didn’t know the airconditioner didn’t work. They sweated like dogs.
They didn’t know the room was too big, because they didn’t have anybody
there. How are they going to beat ISIS? I don’t think it’s gonna happen.
Our country is in serious trouble. We don’t have victories anymore. We used to
have victories, but we don’t have them. When was the last time anybody saw us
beating, let’s say, China in a trade deal? They kill us. I beat China all the time.
All the time.
When did we beat Japan at anything? They send their cars over by the millions,
and what do we do? When was the last time you saw a Chevrolet in Tokyo? It
doesn’t exist, folks. They beat us all the time.
When do we beat Mexico at the border? They’re laughing at us, at our
stupidity. And now they are beating us economically. They are not our friend,
believe me. But they’re killing us economically.
The U.S. has become a dumping ground for everybody else’s problems.

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Thank you. It’s true, and these are the best and the finest. When Mexico sends
its people, they’re not sending their best. They’re not sending you. They’re not
sending you. They’re sending people that have lots of problems, and they’re
bringing those problems with us. They’re bringing drugs. They’re bringing
crime. They’re rapists. And some, I assume, are good people.

SIGN UP NOW

According to the economists— who I’m not big believers in, but, nevertheless,
this is what they’re saying— that $24 trillion— we’re very close— that’s the
point of no return. $24 trillion. We will be there soon. That’s when we become
Greece. That’s when we become a country that’s unsalvageable. And we’re
gonna be there very soon. We’re gonna be there very soon.
So, just to sum up, I would do various things very quickly. I would repeal and
replace the big lie, Obamacare.
I would build a great wall, and nobody builds walls better than me, believe me,
and I’ll build them very inexpensively, I will build a great, great wall on our
southern border. And I will have Mexico pay for that wall.
Mark my words.
Nobody would be tougher on ISIS than Donald Trump. Nobody.
I will find — within our military, I will find the General Patton or I will find
General MacArthur, I will find the right guy. I will find the guy that’s going to
take that military and make it really work. Nobody, nobody will be pushing us
around.
I will stop Iran from getting nuclear weapons. And we won’t be using a man
like Secretary Kerry that has absolutely no concept of negotiation, who’s
making a horrible and laughable deal, who’s just being tapped along as they
make weapons right now, and then goes into a bicycle race at 72 years old, and
falls and breaks his leg. I won’t be doing that. And I promise I will never be in a
bicycle race. That I can tell you.
I will immediately terminate President Obama’s illegal executive order on
immigration, immediately.
Fully support and back up the Second Amendment.
Now, it’s very interesting. Today I heard it. Through stupidity, in a very, very
hard core prison, interestingly named Clinton, two vicious murderers, two
vicious people escaped, and nobody knows where they are. And a woman was
on television this morning, and she said, “You know, Mr. Trump,” and she was
telling other people, and I actually called her, and she said, “You know, Mr.
Trump, I always was against guns. I didn’t want guns. And now since this
happened”— it’s up in the prison area— “my husband and I are finally in
agreement, because he wanted the guns. We now have a gun on every table.
We’re ready to start shooting.”
I said, “Very interesting.”
So protect the Second Amendment.

Reduce our $18 trillion in debt, because, believe me, we’re in a bubble. We have
artificially low interest rates. We have a stock market that, frankly, has been
good to me, but I still hate to see what’s happening. We have a stock market
that is so bloated.
Be careful of a bubble because what you’ve seen in the past might be small
potatoes compared to what happens. So be very, very careful.
And strengthen our military and take care of our vets. So, so important.
Sadly, the American dream is dead.
But if I get elected president I will bring it back bigger and better and stronger
than ever before, and we will make America great again.
Thank you. Thank you very much.

Read next: How Donald Trump Stole Jeb Bush’s Moment
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IDEAS

TIME Ideas hosts the world's leading voices, providing commentary on events in news, society, and culture. We
welcome outside contributions. Opinions expressed do not necessarily reflect the views of TIME editors.

EXHIBIT

Donald J. Trump

Follow

@realDonaldTrump

New GOP platform now includes language
that supports the border wall. We will build
the wall and MAKE AMERICA SAFE AGAIN!
2:56 PM - 13 Jul 2016
5,219 Retweets 15,838 Likes
2.0K

5.2K

16K

Mike @toneloque · 13 Jul 2016
Replying to @realDonaldTrump
#neverhillary #buildthewall #maga #nevertpp

4

24

Lori Patriot/Nationalist

30

@LiberatedCit · 13 Jul 2016

EXHIBIT 5

Donald J. Trump

Follow

@realDonaldTrump

Heroin overdoses are taking over our children
and others in the MIDWEST. Coming in from
our southern border. We need strong border
& WALL!
7:17 AM - 27 Aug 2016
10,288 Retweets 30,780 Likes
3.5K

10K

31K

This Tweet is unavailable

Mary Salesses Wright @StillWaiting_JH · 27 Aug 2016
Can't wait until November to vote this SOB out of existence @tkdmike
@realDonaldTrump
5

6

21

Patti Coppersmith @coppertime · 27 Aug 2016
If only voting him out wd get rid of him. I think his hateful big mouth is just
getting started.
3

2

9

Mary Salesses Wright @StillWaiting_JH · 27 Aug 2016
Hopefully he'll just be an insignificant blip on the radar of history @coppertime
@tkdmike @
2

1

3

Ellen Gray @Electro_Gal · 27 Aug 2016

2

EXHIBIT

Transcript of Donald Trump s
Immigration Speech
Sept. 1, 2016

Following is a transcript of the remarks by Donald J. Trump on immigration in Phoenix on
Wednesday, as transcribed by the Federal News Service.
TRUMP: Wow. Thank you. That’s a lot of people, Phoenix, that’s a lot of people.
(APPLAUSE)
Thank you very much.
Thank you, Phoenix. I am so glad to be back in Arizona.
(APPLAUSE)
The state that has a very, very special place in my heart. I love people of Arizona and
together we are going to win the White House in November.
(APPLAUSE)
Now, you know this is where it all began for me. Remember that massive crowd also? So,
I said let’s go and have some fun tonight. We’re going to Arizona, O.K.?
This will be a little bit different. This won’t be a rally speech, per se. Instead, I’m going to
deliver a detailed policy address on one of the greatest challenges facing our country
today, illegal immigration.
(APPLAUSE)
I’ve just landed having returned from a very important and special meeting with the
president of Mexico, a man I like and respect very much. And a man who truly loves his
country, Mexico.

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While Hillary Clinton meets only with donors and lobbyists, my plan was crafted with the
input from Federal Immigration offices, very great people. Among the top immigration
experts anywhere in this country, who represent workers, not corporations, very
important to us.
I also worked with lawmakers, who’ve led on this issue on behalf of American citizens for
many years. And most importantly I’ve met with the people directly impacted by these
policies. So important.
Number one, are you ready? Are you ready?
(APPLAUSE)
We will build a great wall along the southern border.
(APPLAUSE)
AUDIENCE: Build the wall! Build the wall! Build the wall!
And Mexico will pay for the wall.
(APPLAUSE)
One hundred percent. They don’t know it yet, but they’re going to pay for it. And they’re
great people and great leaders but they’re going to pay for the wall.
On day one, we will begin working on an impenetrable, physical, tall, power, beautiful
southern border wall.
(APPLAUSE)
We will use the best technology, including above and below ground sensors that’s the
tunnels. Remember that, above and below.
(APPLAUSE)
Above and below ground sensors. Towers, aerial surveillance and manpower to
supplement the wall, find and dislocate tunnels and keep out criminal cartels and Mexico
you know that, will work with us. I really believe it. Mexico will work with us. I
absolutely believe it. And especially after meeting with their wonderful, wonderful
president today. I really believe they want to solve this problem along with us, and I’m
sure they will.
(APPLAUSE)

I will get this done for you and for your family. We’ll do it right. You’ll be proud of our
country again. We’ll do it right. We will accomplish all of the steps outlined above. And,
when we do, peace and law and justice and prosperity will prevail. Crime will go down.
Border crossings will plummet. Gangs will disappear.
And the gangs are all over the place. And welfare use will decrease. We will have a peace
dividend to spend on rebuilding America, beginning with our American inner cities.
We’re going to rebuild them, for once and for all.
For those here illegally today, who are seeking legal status, they will have one route and
one route only. To return home and apply for reentry like everybody else, under the
rules of the new legal immigration system that I have outlined above. Those who have
left to seek entry —
Thank you.
Thank you. Thank you. Those who have left to seek entry under this new system — and
it will be an efficient system — will not be awarded surplus visas, but will have to apply
for entry under the immigration caps or limits that will be established in the
future.TRUMP: We will break the cycle of amnesty and illegal immigration. We will
break the cycle. There will be no amnesty.
(APPLAUSE)
Our message to the world will be this. You cannot obtain legal status or become a citizen
of the United States by illegally entering our country. Can’t do it.
(APPLAUSE)
l
This declaration alone will help stop the crisis of illegal crossings and illegal overstays,
very importantly. People will know that you can’t just smuggle in, hunker down and wait
to be legalized. It’s not going to work that way. Those days are over.
(APPLAUSE)
Importantly, in several years when we have accomplished all of our enforcement and
deportation goals and truly ended illegal immigration for good, including the
construction of a great wall, which we will have built in record time. And at a reasonable
cost, which you never hear from the government.
(APPLAUSE)
And the establishment of our new lawful immigration system then and only then will we

I want to thank Phoenix for the support you’ve always given me, and I want to tell you
what. I’m supporting the man who will — who is the only man who is going to save our
country, and what we our going to be leaving our children.
(APPLAUSE)
(SPEAKER’S VOICE): I’m Steve Ronnebeck, father of Grant Ronnebeck, 21 years old.
Killed January 22, 2015 by an illegal immigrant who shot him in the face. I truly believe
that Mr. Trump is going to change things. He’s going to fight for my family, and he’s
going to fight for America.
(APPLAUSE)
TRUMP: These are amazing people, and I am not asking for their endorsement, believe
me that. I just think I’ve gotten to know so many of them, and many more, from our
group. But they are incredible people and what they’re going through is incredible, and
there’s just no reason for it. Let’s give them a really tremendous hand.
(APPLAUSE)
That’s tough stuff, I will tell you. That is tough stuff. Incredible people.
So, now is the time for these voices to be heard. Now is the time for the media to begin
asking questions on their behalf. Now is the time for all of us as one country, Democrat,
Republican, liberal, conservative to band together to deliver justice, and safety, and
security for all Americans.
Let’s fix this horrible, horrible, problem. It can be fixed quickly. Let’s our secure our
border.
(APPLAUSE)
Let’s stop the drugs and the crime from pouring into our country. Let’s protect our social
security and Medicare. Let’s get unemployed Americans off the welfare and back to
work in their own country.
This has been an incredible evening. We’re going to remember this evening. November
8, we have to get everybody. This is such an important state. November 8 we have to get
everybody to go out and vote.
We’re going to bring — thank you, thank you. We’re going to take our country back,
folks. This is a movement. We’re going to take our country back.
Thank you.

(APPLAUSE)
Thank you.
This is an incredible movement. The world is talking about it. The world is talking about
it and by the way, if you haven’t been looking to what’s been happening at the polls over
the last three or four days I think you should start looking. You should start looking.
(APPLAUSE)
Together we can save American lives, American jobs, and American futures. Together
we can save America itself. Join me in this mission, we’re going to make America great
again.
Thank you. I love you. God bless you, everybody. God bless you. God bless you, thank
you.
Find out what you need to know about the 2016 presidential race today, and get politics news updates via
Facebook, Twitter and the First Draft newsletter.

EXHIBIT 7

REMARKS

Remarks by President Trump Before a Working
Lunch with Heads of the Baltic States
FOREIGN POLICY

Issued on: April 3, 2018

Cabinet Room
12:12 P.M. EDT
PRESIDENT TRUMP: Okay, thank you very much. Today, it’s my pleasure to congratulate
Estonia, Latvia, and Lithuania on the 100th anniversary of their independence. That’s
really quite a great achievement, and congratulations. And I’m honored to have you with
us in the White House and the Oval Office. We covered a little territory today. Right?
Really tremendous. One hundred years.
We’re thrilled to celebrate this historic milestone by welcoming all of you to our country.
And I know you’ve been here a little bit before, but this is something special. So we really
enjoy having you.
From the very beginning of your countries’ independence, the United States never — and
this is, like, never — and I think you know that better than anybody — never ceased to
recognize the sovereignty of the three Baltic republics, even though, throughout the

Thank you very much for being here. Thank you. Thank you very much, everybody.
Thank you. Thank you very much.
I have to say this: China. I have great respect for President Xi. Two of the most incredible
days of my life were spent in China, and many of you were with me. He’s a tremendous
person. But we have a problem with China. They’ve created a trade deficit, and I really
blame our representatives and, frankly, our preceding Presidents for this. We have a
trade deficit of $500 billion a year. It’s not something we can live with.
So we’ll be working with China. We’ll be negotiating with China. Again, our relationship
is very good with China, and we intend to keep it that way. But we have to do something
to seriously relieve that trade deficit. We can’t have a $500 billion-a-year trade deficit.
We also have the theft of intellectual property, and that probably is in the neighborhood
of $200 [billion] to $300 billion a year.
So whether we like it or not, we have a great stock market. We have a very, very powerful
country. We have our country, militarily, as you know, Presidents. We have just received
$700 billion. Our military will be stronger than ever before. But we have to do something
on trade with certain countries. And, obviously, China is the leader in terms of deficits.
We’ve never had a situation where a country — nor has there ever been in history a
situation where a country has done that to another country.
We’ve helped rebuild China over the last 25 years, if you take a look at what’s happened.
We have helped rebuild China. So we intend to get along with China, but we have to do
something very substantial about the trade deficit. And with that, nothing is easy. I
campaigned on that, I talked about that. China won’t be the only country, but I did, in
fact, campaign on it.
Mexico — if you look at the caravan of thousands of people coming across — I told
Mexico, look, you have a cash cow in NAFTA. NAFTA has been great for Mexico; it has not
been good for the United States. A lot of businesses have closed down because of

NAFTA. You look at empty plants all over the place — and this is from years ago — and
they still haven’t recovered. NAFTA has been a terrible deal for the United States. We’re
renegotiating the deal right now, but it will still be good for Mexico and for Canada.
And when this caravan came in — and this is a caravan of a lot of people coming in — in
this case, from Honduras. If it reaches our border, our laws are so weak and so pathetic,
you would not understand this because — I know how strong your laws are at the
border. It’s like we have no border because we had Obama make changes. President
Obama made changes that basically created no border. It’s called catch-and-release.
You catch them, you register them, they go into our country and we can’t throw them
out. And, in many cases, they shouldn’t be here. In many, many cases, they shouldn’t be
here. And after they get whatever happens over the next two or three years, they’re
supposed to come back to court. Almost nobody comes back to court. They’re in our
country, and we can’t do anything about it because the laws that were created by
Democrats are so pathetic and so weak.
So I told Mexico — and I respect what they did — I said, look, your laws are very powerful;
your laws are very strong. We have very bad laws for our border, and we are going to be
doing some things — I’ve been speaking with General Mattis — we’re going to be doing
things militarily. Until we can have a wall and proper security, we’re going to be
guarding our border with the military. That’s a big step. We really haven’t done that
before — certainly not very much before.
But we will be doing things with Mexico, and they have to do this, otherwise I’m not
going to do the NAFTA deal. NAFTA has been fantastic for Mexico, bad for us. We’ve had
our car plants moved to Mexico — many of them. We make tremendous numbers —
millions of cars in Mexico that years ago didn’t exist. They closed in Michigan, they
closed in Ohio, they closed in other places. Now they’re starting to move back. Because
of what we’ve done with regulation and with taxes, they’re starting to come back into
our country in a big way.

But I told Mexico very strongly: You’re going to have to do something about these
caravans that are coming up. And I just noticed that the caravan now, which is toward
the middle of Mexico coming up from Honduras, is breaking up very rapidly. That’s
because Mexico has very strong immigration laws, as we should have. We should have
those laws. We don’t have — we have immigration laws that are laughed at by
everybody. And it’s going to be changed. We need the wall, we need the protection, and
we have to change our immigration laws at the border and elsewhere.
So Mexico has — at this moment, it seems they’ve broken up large numbers of that
particular caravan. And we’ll see what happens. But we’re prepared at our border. We
cannot have people flowing into our country illegally, disappearing, and, by the way,
never showing up to court. So the court case will be set for two years or three years, if
you can believe this, and they never show up, for the most part. Very rarely do they show
up.
Plus, if you notice, they’re trying to hire thousands of judges so every person that walks
across — and they’re taught to say the right thing — they walk across, and then they go
and they’re supposed to go to court. So we’re supposed to have thousands of judges
because we cannot have them take it out. We have to bring them before a ridiculous
court system.
We have to change our policies fast — just like we have to change on sanctuary cities. If
you look at what’s happening in California, they’re having revolts out there because
there are a lot of areas — Orange County and others — they don’t want to have sanctuary
cities, which are guarding criminals.
So a lot of things are changing. But I’ve just heard that the caravan coming up from
Honduras is broken up, and Mexico did that. And they did it because, frankly, I said, “You
really have to do it.” We’re going to have a relationship with NAFTA. We’re going to have
to include security in NAFTA. So Mexico has very strong laws, and that’s the way it is. So
it looks like it’s been broken up. So that will be good.

not fair to the United States. It’s not fair to our taxpayers. And Amazon has the money to
pay the fair rate at the Post Office, which would be much more than they’re paying right
now.
The other thing is a lot of retail businesses all over the country are going out of business,
so that’s a different problem, and it’s a big problem. You have retailers all over the
United States that are going out of business. You look at some of these small towns
where they had a beautiful Main Street with stores — the stores are all gone. So that’s a
different problem that we’re going to have to talk about.
But if you look at the cost that we’re subsidizing — we’re giving a subsidy to Amazon.
And we’re talking about billions of dollars a year. The real cost. And a report just came
out; they said, $1.47, I believe, or about that — for every time they deliver a package, the
United States government — meaning, the Post Office — loses a $1.47. So Amazon is
going to have to pay much more money to the Post Office, there’s no doubt about that.
Thank you all very much. Thank you.
Q Scott Pruitt, sir? Do you support Scott Pruitt?
PRESIDENT TRUMP: I hope he’s going to be great.
END
12:30 P.M. EDT

EXHIBIT

REMARKS

Remarks by President Trump in Joint Address
to Congress
Issued on: February 28, 2017

U.S. Capitol
Washington, D.C.
9:09 P.M. EST
THE PRESIDENT: Thank you very much. Mr. Speaker, Mr. Vice President, members of
Congress, the First Lady of the United States — (applause) — and citizens of America:
Tonight, as we mark the conclusion of our celebration of Black History Month, we are
reminded of our nation’s path towards civil rights and the work that still remains to be
done. (Applause.) Recent threats targeting Jewish community centers and vandalism of
Jewish cemeteries, as well as last week’s shooting in Kansas City, remind us that while
we may be a nation divided on policies, we are a country that stands united in
condemning hate and evil in all of its very ugly forms. (Applause.)
Each American generation passes the torch of truth, liberty and justice in an unbroken
chain all the way down to the present. That torch is now in our hands. And we will use it
to light up the world. I am here tonight to deliver a message of unity and strength, and it

regulations must be eliminated. (Applause.) We’re going to stop the regulations that
threaten the future and livelihood of our great coal miners. (Applause.)
We have cleared the way for the construction of the Keystone and Dakota Access
Pipelines — (applause) — thereby creating tens of thousands of jobs. And I’ve issued a
new directive that new American pipelines be made with American steel. (Applause.)
We have withdrawn the United States from the job-killing Trans-Pacific Partnership.
(Applause.) And with the help of Prime Minister Justin Trudeau, we have formed a
council with our neighbors in Canada to help ensure that women entrepreneurs have
access to the networks, markets and capital they need to start a business and live out
their financial dreams. (Applause.)
To protect our citizens, I have directed the Department of Justice to form a Task Force on
Reducing Violent Crime. I have further ordered the Departments of Homeland Security
and Justice, along with the Department of State and the Director of National
Intelligence, to coordinate an aggressive strategy to dismantle the criminal cartels that
have spread all across our nation. (Applause.) We will stop the drugs from pouring into
our country and poisoning our youth, and we will expand treatment for those who have
become so badly addicted. (Applause.)
At the same time, my administration has answered the pleas of the American people for
immigration enforcement and border security. (Applause.) By finally enforcing our
immigration laws, we will raise wages, help the unemployed, save billions and billions of
dollars, and make our communities safer for everyone. (Applause.) We want all
Americans to succeed, but that can’t happen in an environment of lawless chaos. We
must restore integrity and the rule of law at our borders. (Applause.)
For that reason, we will soon begin the construction of a great, great wall along our
southern border. (Applause.) As we speak tonight, we are removing gang members,
drug dealers, and criminals that threaten our communities and prey on our very

children learn in peace, and jobs where Americans prosper and grow are not too much to
ask. (Applause.)
When we have all of this, we will have made America greater than ever before — for all
Americans. This is our vision. This is our mission. But we can only get there together.
We are one people, with one destiny. We all bleed the same blood. We all salute the
same great American flag. And we all are made by the same God. (Applause.)
When we fulfill this vision, when we celebrate our 250 years of glorious freedom, we will
look back on tonight as when this new chapter of American Greatness began. The time
for small thinking is over. The time for trivial fights is behind us. We just need the
courage to share the dreams that fill our hearts, the bravery to express the hopes that
stir our souls, and the confidence to turn those hopes and those dreams into action.
From now on, America will be empowered by our aspirations, not burdened by our fears;
inspired by the future, not bound by the failures of the past; and guided by our vision,
not blinded by our doubts.
I am asking all citizens to embrace this renewal of the American spirit. I am asking all
members of Congress to join me in dreaming big, and bold, and daring things for our
country. I am asking everyone watching tonight to seize this moment. Believe in
yourselves, believe in your future, and believe, once more, in America.
Thank you, God bless you, and God bless the United States. (Applause.)
END
10:09 P.M. EST

EXHIBIT

REMARKS

Remarks by President Trump at the National
Rifle Association Leadership Forum
LAW & JUSTICE

Issued on: April 28, 2017

Georgia World Congress Center
Atlanta, Georgia
2:06 P.M. EDT
Thank you, Chris, for that kind introduction and for your tremendous work on behalf of
our Second Amendment. Thank you very much. (Applause.) I want to also thank Wayne
LaPierre for his unflinching leadership in the fight for freedom. Wayne, thank you very
much. Great. (Applause.)
I’d also like to congratulate Karen Handel on her incredible fight in Georgia 6.
(Applause.) The election takes place on June 20th. And, by the way, on primaries, let’s
not have 11 Republicans running for the same position, okay? (Laughter.) It’s too nerveshattering. She’s totally for the NRA and she’s totally for the Second Amendment. So get
out and vote. She’s running against someone who’s going to raise your taxes to the sky,
destroy your healthcare, and he’s for open borders — lots of crime, and he’s not even
able to vote in the district that he’s running in. Other than that, I think he’s doing a
fantastic job, right? (Laughter.) So get out and vote for Karen.

for them anymore. That’s a bad group. (Applause.) Not pleasant for MS-13. Get them
the hell out of here, right? Get them out.
(Applause.)
We are protecting the freedoms of law-abiding Americans, and we are going after the
criminal gangs and cartels that prey on our innocent citizens. And we are really going
after them. (Applause.)
As members of the NRA know well, some of the most important decisions a President can
make are appointments — and I’ve appointed people who believe in law, order, and
justice. (Applause.)
That is why I have selected as your Attorney General, number one, a really fine person, a
really good man, a man who has spent his career fighting crime, supporting the police,
and defending the Second Amendment. For the first time in a long time, you now have a
pro-Second-Amendment, tough-on-crime Attorney General, and his name is Jeff
Sessions. (Applause.)
And Attorney General Sessions is putting our priorities into action. He’s going after the
drug dealers who are peddling their poison all over our streets and destroying our youth.
He’s going after the gang members who threaten our children. And he’s fully enforcing
our immigration laws in all 50 states. And you know what? It’s about time. (Applause.)
Heading up the effort to secure America’s borders is a great military general, a man of
action: Homeland Security Director [sic], John Kelly. (Applause.)
Secretary Kelly, who used to be General Kelly, is following through on my pledge to
protect the borders, remove criminal aliens, and stop the drugs from pouring into our
country. We’ve already seen — listen to this; it never happened before, people can’t
even believe it. And, by the way, we will build the wall no matter how low this number
,
gets or how this goes. Don’t even think about it. Don’t even think about it. (Applause.)

I greatly appreciated your support on November 8th, in what will hopefully be one of the
most important and positive elections for the United States of all time. And to the NRA, I
can proudly say I will never, ever let you down.
Thank you. God Bless you. God Bless our Constitution, and God bless America.
Thank you very much. Thank you. Thank you. (Applause.)
END
2:35 P.M. EDT

EXHIBIT

President Trump Ranted For 77 Minutes in Phoenix. Here’s What
He Said

AUGUST 23, 2017

President Donald Trump on Tuesday lambasted his critics in a 77-minute
speech at a rally in Phoenix, as protesters gathered outside.
He attacked Arizona’s two Republican senators, though he didn’t directly name
either of them, and fired back at the widespread criticism of his remarks on the
clashes in Charlottesville, Va. Trump also hinted that he plans to pardon
former Sheriff Joe Arpaio and threatened to shut down the government over
funding for a Mexican border wall.
Trump tweeted about the rally Wednesday morning, calling the crowd
“amazing.”

Donald J. Trump
@realDonaldTrump

Phoenix crowd last night was amazing - a packed house. I love the
Great State of Arizona. Not a fan of Jeff Flake, weak on crime &
border!
87.6K 6:20 AM - Aug 23, 2017
41.4K people are talking about this

Read his full remarks from the Phoenix rally below:

TRUMP: What a crowd.

(APPLAUSE)

TRUMP: And just so you know from the Secret Service, there aren’t too many people outside
protesting, OK. That I can tell you.

(APPLAUSE)

A lot of people in here, a lot of people pouring right now. They can get them in. Whatever
you can do, fire marshals, we’ll appreciate it.

TRUMP: And I want to thank our great vice president, Mike Pence, for the introduction.

(APPLAUSE)

(LAUGHTER)

But it was great. And I met with the Border Patrol and I met with ICE, and these are
incredible people; the job they do.

(APPLAUSE)

And in fact, General Kelly, who was in charge of Homeland Security, where people coming
in down 78 and almost 80 percent. He did so good, I made him my chief of staff, right? That
made sense.

John, where’s John? Where is he? Where’s General Kelly? Get him out here. He’s great. He’s
doing a great job.

But we did a lot before anything happened, we did a lot. We respect and cherish our ICE
officers and our Border Patrol agents, and we respect and cherish our police officers, and
our firemen, and all of our uniform services.

(APPLAUSE)

But during that visit, I heard first hand from the frontline agents about the security threats
they confront each and every day, and I pledged my continued resolve to them, and all of
you, to keep our country safe. All around the nation, I have spent time with the wonderful
Americans whose children were killed for the simple reason that our government failed to
enforce our immigration laws, already existing laws.

And I promised these families, the deaths of their loved ones will not have been in vain. I
promised them. I know so many of them.

(APPLAUSE)

One by one we are finding the gang members, the drug dealers and the criminals who prey
on our people. We are throwing them out of the country or we’re putting the hell, fast in
jail.

(APPLAUSE)

We are cracking down on these sanctuary cities that shield criminal aliens, finally.

(APPLAUSE)

And we are building a wall on the southern border which is absolutely necessary.

(APPLAUSE)

CROWD: Build that wall! Build that wall! Build that wall!

(APPLAUSE)

This is our moment. This is our chance. This is our opportunity to recapture our dynasty
like never before, to rebuild our future, to deliver justice for every forgotten man and
woman and child in America.

Freedom will prevail, our values will endure, our citizens will prosper, Arizona will thrive,
and our beloved nation will succeed like never, ever before.

So to Americans young and old, near and far, in cities small and large, we say these words
again tonight: We will make America strong again. We will make America wealthy again.
We will make America proud again. We will make America safe again. And we will make
America great again.

(APPLAUSE)

Thank you Arizona. God bless you. Thank you. Thank you.

Contact us at [e-mail].

EXHIBIT 1

Donald J. Trump

Follow

@realDonaldTrump

MS-13 gang members are being removed by
our Great ICE and Border Patrol Agents by the
thousands, but these killers come back in
from El Salvador, and through Mexico, like
water. El Salvador just takes our money, and
Mexico must help MORE with this problem.
We need The Wall!
3:28 AM - 23 Feb 2018
25,596 Retweets 117,302 Likes
22K

26K

117K

Dr. Scheidenberg @Dr_Scheidenberg · 24 Feb 2018
Replying to @realDonaldTrump
Start building that Wall then. What are you doing all day long? Playing golf and
watching TV?
24

3

62

RC @droody · 24 Feb 2018

8

1

54

odalis rivas @ooodalisss · 24 Feb 2018

2

12

1 more reply
Robin Sinclair @RobinSinclair10 · 24 Feb 2018

EXHIBIT 1

Donald J. Trump

Follow

@realDonaldTrump

We shouldn’t be hiring judges by the
thousands, as our ridiculous immigration laws
demand, we should be changing our laws,
building the Wall, hire Border Agents and Ice
and not let people come into our country
based on the legal phrase they are told to say
as their password.
5:12 AM - 21 Jun 2018
25,659 Retweets 99,746 Likes
15K

26K

100K

Cheryl @Cherylmm2 · 22 Jun 2018
Replying to @realDonaldTrump @magickSword
American citizens are clear. We want the Wall fully funded! We want an end to
diversity lottery & chain migration. We want E-verify & true voter ID! In POTUS,
we have the only opportunity we are likely to have to save our country! We are
behind you!
8

11

51

Katherine Goetchius @KatherineGoetc1 · 22 Jun 2018
Hell yeah!
1

Peter Fox

11

@Peter_Fox59 · 22 Jun 2018

Replying to @realDonaldTrump
Here's a novel idea. How about helping Central American nations to lift their
living standards, employment & create incentives to stay instead imposing tariffs
& poverty.

EXHIBIT 1

REMARKS

Remarks by President Trump Before Marine
One Departure
Issued on: January 10, 2019

South Lawn
9:32 A.M. EST
THE PRESIDENT: So, we’re going to Texas. We’re going to the border. Just spoke with
some of my friends in Arizona. We have tremendous support. The Republicans are
extremely united. They all want to see something happen, but they’re extremely united.
And I don’t think I’ve ever seen unity like this in the Republican Party.
The media — which I call the “opposition party,” a lot of the media — in coordination
with the Democrats, they’re not talking about the Democrats folding. For instance, this
morning, a number of people came out and said, “You do need very strong border
security, and that includes a wall or whatever it is.” A number of Democrats said that,
but people don’t like to report on it.
We have tremendous unity in the Republican Party. It’s really a beautiful thing to see. I
don’t think there will be any breakaway because they know we need border security and
we have to have it. And the only you’re going to have border security — there’s only way:
You can have all the technology in the world. I’m a professional at technology. But if you
don’t have a steel barrier or a wall of some kind — strong, powerful — you’re going to

Q (Inaudible.)
THE PRESIDENT: I can’t hear you.
Q (Inaudible.)
THE PRESIDENT: We have plenty of funds that. If there’s a national emergency, there’s a
lot of funds.
Q (Inaudible.)
THE PRESIDENT: If we declare a national emergency, we have a tremendous amount of
funds — tremendous — if we want to do that, if we want to go that route. Again, there is
no reason why we can’t come to a deal. But you have another side that doesn’t care
about border security. The Democrats — which I’ve been saying all along — they don’t
give a damn about crime. They don’t care about crime. They don’t care about gang
members coming in and stabbing people, and cutting people up. They don’t care about
crime.
And if they’re not going to care about crime, then I agree they shouldn’t do anything at
the border. But I care about crime and I care about drugs. We’re spending a fortune on
trying to stop drugs, and they pour in through the border. But I see it more now than
ever before. The Democrats don’t care about the border and they don’t care about
crime.
Q (Inaudible.)
THE PRESIDENT: Say it? Say it?
Q This emergency on the border, this crisis, when did it begin?

THE PRESIDENT: Oh, it began a long time. Ask President Obama. Obama used to call it a
,
crisis at the border, too. I think he said it in 2014.
Look, look. You can all play cute. And I say 80 percent of you are possibly in
coordination with the opposition party. I mean, the whole thing is ridiculous. All you
have to do is look at the border. Rent a helicopter — except you don’t want to know the
truth — and watch.
And, by the way, here’s the story: There is another major caravan forming right now in
Honduras. And so far — we’re trying to break it up. But so far, it’s bigger than anything
we’ve seen. And a drone isn’t going to stop it. And a sensor isn’t going to stop it. But
you know what’s going to stop it in its tracks? A nice, powerful wall.
Q Does the buck stop with you over this shutdown?
THE PRESIDENT: The buck stops with everybody. They could solve this problem in
literally 15 minutes. We could be back. We could have border security. They could stop
this problem in 15 minutes if they wanted to. I really believe now that they don’t want
to. I really believe that. I really believe that they don’t care about crime. I really believe
this. The Democrats don’t care about crime.
They’ve been taken over by a group of young people who, frankly, in some cases — I’ve
been watching — I actually think they’re crazy. But they’ve been taken over by a group
that is so far left. I really don’t think they care about crime. And, you know, sadly,
they’re viewing this as the beginning of the 2020 presidential race, and that’s okay with
me. But they have been taken over by a group of people that don’t care about gangs.
They don’t care about human trafficking and drugs. They don’t care about anything. I’ll
tell you what — they have gone crazy.
Q How much longer is this shutdown going to last?

THE PRESIDENT: I wish him luck. It’s going to be a beauty.
END

9:47 A.M. EST

EXHIBIT 1

II

115TH CONGRESS
2D SESSION

S. 3713

To appropriate $25,000,000,000 for the construction of a border wall between
the United States and Mexico, and for other purposes.

IN THE SENATE OF THE UNITED STATES
DECEMBER 5, 2018
Mr. INHOFE (for himself, Mr. ROUNDS, Mr. KENNEDY, and Mr. CRUZ) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL
To appropriate $25,000,000,000 for the construction of a
border wall between the United States and Mexico, and
for other purposes.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3

SECTION 1. SHORT TITLE.

4
5

This Act may be cited as the ‘‘WALL Act of 2018’’.
SEC. 2. MANDATORY SPENDING FOR BORDER WALL.

6

(a)

IN

GENERAL.—There

is

appropriated

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7 $25,000,000,000 for the purpose of constructing a phys8 ical barrier along the southern border of the United
9 States.

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EXHIBIT 1

I

115TH CONGRESS
2D SESSION

H. R. 7073

To provide for reconciliation pursuant to title II of the concurrent resolution
on the budget for fiscal year 2019.

IN THE HOUSE OF REPRESENTATIVES
OCTOBER 19, 2018
Mr. BYRNE (for himself, Mr. CRAMER, Mr. ROGERS of Alabama, Mr. BROOKS
of Alabama, Mr. BURGESS, Mr. FRANCIS ROONEY of Florida, Mr. BABIN,
Mr. BANKS of Indiana, Mr. GOSAR, Mr. GAETZ, Mr. NORMAN, Mr.
BIGGS, Mr. POSEY, Mr. MOONEY of West Virginia, Mr. DESJARLAIS, and
Mr. SMITH of Texas) introduced the following bill; which was referred to
the Committee on Homeland Security

A BILL
To provide for reconciliation pursuant to title II of the
concurrent resolution on the budget for fiscal year 2019.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3

SECTION 1. SHORT TITLE.

4

This Act may be cited as the ‘‘50 Votes for the Wall

5 Act’’.
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6

SEC. 2. BORDER WALL AND SECURITY TRUST FUND.

7

(a) ESTABLISHMENT

OF

FUND.—There is estab-

8 lished a fund, to be known as the ‘‘Border Wall and Secu-

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2
1 rity Trust Fund’’, consisting of such amounts as may be
2 appropriated pursuant to subsection (b) to construct a
3 wall (including physical barriers and associated detection
4 technology, roads, and lighting) along the international
5 border between the United States and Mexico by January
6 19, 2021.
7

(b) APPROPRIATION

OF

AMOUNTS.—There is hereby
—There

8 appropriated to the Border Wall and Security Trust Fund
9 established under subsection (a), out of any money in the
10 Treasury not otherwise appropriated, such sums as the
11 Secretary of Homeland Security may request of the Sec12 retary of Treasury on or after October 1, 2018, up to a
13 total of $25,000,000,000, to remain available until ex14 pended to carry out the purpose described in subsection
15 (a).
16

(c) SUNSET.—The authority provided by this Act

17 shall terminate on September 30, 2028, and the unobli18 gated balance of any amounts in the Border Wall and Se19 curity Trust Fund on such date shall be returned to the
20 general fund of the Treasury.

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EXHIBIT 1

I

115TH CONGRESS
2D SESSION

H. R. 7059

To fund construction of the southern border wall and to ensure compliance
with Federal immigration law.

IN THE HOUSE OF REPRESENTATIVES
OCTOBER 12, 2018
Mr. MCCARTHY introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committees on Homeland
Security, Ways and Means, Armed Services, and the Budget, for a period
to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee
concerned

A BILL
To fund construction of the southern border wall and to
ensure compliance with Federal immigration law.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3

SECTION 1. SHORT TITLE.

4

This Act may be cited as the ‘‘Build the Wall, En-

5 force the Law Act of 2018’’.

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6

SEC. 2. FINDINGS.

7

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Congress finds the following:

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41
1

212(a)(2)(J) or section 237(a)(2)(G)

2

shall be eligible for any immigration

3

benefit under this subparagraph;’’.

4

(i)

PAROLE.—An

alien

described

in

section

5 212(a)(2)(J) of the Immigration and Nationality Act, as
6 added by subsection (b), shall not be eligible for parole
7 under section 212(d)(5)(A) of such Act unless—
8

(1) the alien is assisting or has assisted the

9

United States Government in a law enforcement

10

matter, including a criminal investigation; and

11

(2) the alien’s presence in the United States is

12

required by the Government with respect to such as-

13

sistance.

14

(j) EFFECTIVE DATE.—The amendments made by

15 this section shall take effect on the date of the enactment
16 of this Act and shall apply to acts that occur before, on,
17 or after the date of the enactment of this Act.
18

SEC. 9. BORDER SECURITY FUNDING.

19

(a) FUNDING.—In addition to amounts otherwise

20 made available by this Act or any other provision of law,
21 there is hereby appropriated to the ‘‘U.S. Customs and
22 Border Protection—Procurement, Construction, and Im-

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23 provements’’ account, out of any amounts in the Treasury
24 not otherwise appropriated, $23,400,000,000, to be avail25 able as described in subsections (b) and (c), of which—

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42
1

(1) $16,625,000,000 shall be for a border wall

2

system along the southern border of the United

3

States, including physical barriers and associated de-

4

tection technology, roads, and lighting; and

5

(2) $6,775,000,000 shall be for infrastructure,

6

assets, operations, and technology to enhance border

7

security along the southern border of the United

8

States, including—

9

(A) border security technology, including

10

surveillance technology, at and between ports of

11

entry;

12

(B) new roads and improvements to exist-

13

ing roads;

14

(C) U.S. Border Patrol facilities and ports

15

of entry;

16

(D) aircraft, aircraft-based sensors and as-

17

sociated technology, vessels, spare parts, and

18

equipment to maintain such assets;

19

(E) a biometric entry and exit system; and

20

(F) family residential centers.

21

(b) AVAILABILITY

OF

BORDER WALL SYSTEM

22 FUNDS.—

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23
24

(1) IN

GENERAL.—Of

the amount appropriated

in subsection (a)(1)—

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46
1 House of Representatives regarding activities under and
2 progress made in carrying out this section.
3

(g) RULES

OF

CONSTRUCTION.—Nothing in this sec-

4 tion may be construed to limit the availability of funds
5 made available by any other provision of law for carrying
6 out the requirements of this Act or the amendments made
7 by this Act. Any reference in this section to an appropria8 tion account shall be construed to include any successor
9 accounts.
10

(h) DISCRETIONARY AMOUNTS.—Notwithstanding

11 any other provision of law, the amounts appropriated
12 under subsection (a) are discretionary appropriations (as
13 that term is defined in section 250(c)(7) of the Balanced
14 Budget and Emergency Deficit Control Act of 1985 (2
15 U.S.C. 900(c)(7)).
16

SEC. 10. EXCLUSION FROM PAYGO SCORECARDS.

17

The budgetary effects of this Act shall not be entered

18 on either PAYGO scorecard maintained pursuant to sec19 tion 4(d) of the Statutory Pay-As-You-Go Act of 2010.

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EXHIBIT 1

I

115TH CONGRESS
2D SESSION

H. R. 6657

To establish a separate account in the Treasury to hold deposits to be
used to secure the southern border of the United States, and for other
purposes.

IN THE HOUSE OF REPRESENTATIVES
AUGUST 7, 2018
Mr. BIGGS (for himself, Mr. GOSAR, Mr. BROOKS of Alabama, Mr. GAETZ,
Mr. DESJARLAIS, and Mr. NORMAN) introduced the following bill; which
was referred to the Committee on Homeland Security, and in addition to
the Committees on Ways and Means, the Judiciary, Foreign Affairs, Financial Services, Education and the Workforce, and Appropriations, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL
To establish a separate account in the Treasury to hold
deposits to be used to secure the southern border of
the United States, and for other purposes.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3

SECTION 1. SHORT TITLE.

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4

This Act may be cited as the ‘‘Fund and Complete

5 the Border Wall Act’’.

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2
1

SEC. 2. BORDER WALL TRUST FUND.

2

(a) ESTABLISHMENT

OF

FUND.—At the end of sub-

3 chapter III of chapter 33 of title 31, United States Code,
4 insert the following:
5 ‘‘§ 3344. Secure the Southern Border Fund.
6

‘‘(a) IN GENERAL.—Not later than 60 days after the

7 date of enactment of this section, the Secretary of the
8 Treasury shall establish an account in the Treasury of the
9 United States, to be known as the ‘Secure the Southern
10 Border Fund’, into which funds shall be deposited in ac11 cordance with the Fund and Complete the Border Wall
12 Act and the amendments made by that Act.
13

‘‘(b) APPROPRIATION.—Funds deposited in the Se-

14 cure the Southern Border Fund shall be available until
15 expended. Such funds are authorized to be appropriated,
16 and are appropriated, to the Secretary of Homeland Secu17 rity only—
18

‘‘(1) to plan, design, construct, or maintain a

19

barrier along the international border between the

20

United States and Mexico; and
‘‘(2) to purchase and maintain necessary vehi-

22

cles and equipment for U.S. Border Patrol agents.

23
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21

‘‘(c) LIMITATION.—Not more than 5 percent of the

24 funds deposited in the Secure the Southern Border Fund
25 may be used for the purpose described in subsection
26 (b)(2).’’.
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7
1 essing U.S. Customs and Border Protection Form I–94
2 shall be allocated as follows:
3

(1) $6 shall be deposited in the Land Border

4

Inspection Fee Account and used in accordance with

5

such section 286(q).

6

(2) To the extent provided in advance in appro-

7

priations Acts, $10 shall be used for salaries for

8

U.S. Border Patrol agents.

9

(3) $9 shall be deposited in the Secure the

10

Southern Border Fund established by the amend-

11

ment made by section 2 of this Act.

12

SEC. 6. CONSTRUCTION OF BORDER WALL.

13

(a) IMPROVEMENT

OF

BARRIERS

AT

BORDER.—Sec-

14 tion 102 of the Illegal Immigration Reform and Immi15 grant Responsibility Act of 1996 (Division C of Public
16 Law 104–208; 8 U.S.C. 1103 note) is amended—
17

(1) by amending subsection (a) to read as fol-

18

lows:

19

‘‘(a) IN GENERAL.—Not later than December 31,

20 2019, the Secretary of Homeland Security shall take such
21 actions as may be necessary (including the removal of ob22 stacles to detection of illegal entrants) to design, test, con-

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23 struct, and install physical barriers, roads, and technology
24 along the international land border between the United

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8
1 States and Mexico to prevent illegal crossings in all
2 areas.’’;
areas.
a
3

(2) in subsection (b)—

4

(A) in paragraph (1)—

5

(i) in the paragraph heading, by strik-

6

ing ‘‘ADDITIONAL

7

‘‘FENCING’’;

8

FENCING’’

and inserting

(ii) by striking subparagraph (A) and

9

inserting the following:

10

‘‘(A) PHYSICAL

BARRIERS.—In

carrying

11

out subsection (a), the Secretary of Homeland

12

Security shall construct physical barriers, in-

13

cluding secondary barriers in locations where

14

there is already a fence, along the international

15

land border between the United States and

16

Mexico that will prevent illegal entry and will

17

assist in gaining operational control of the bor-

18

der (as defined in section 2(b) of the Secure

19

Fence Act of 2006 (8 U.S.C. 1701 note; Public

20

Law 109–367)).
109–367)).’’;
(iii) by striking subparagraph (B) and

22

redesignating subparagraphs (C) and (D)

23
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21

as subparagraphs (B) and (C), respec-

24

tively;

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14
1 the remainder of this Act, or an amendment made by this
2 Act, or the application of such provision to other persons
3 or circumstances, shall not be affected.

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EXHIBIT 1

I

115TH CONGRESS
2D SESSION

H. R. 6415

To provide for border security, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES
JULY 18, 2018
Mr. FERGUSON introduced the following bill; which was referred to the Committee on Homeland Security, and in addition to the Committees on the
Judiciary, Transportation and Infrastructure, Oversight and Government
Reform, Foreign Affairs, Agriculture, Armed Services, Natural Resources, the Budget, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned

A BILL
To provide for border security, and for other purposes.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3
4

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the

5 ‘‘American Border Act’’.
6

(b) TABLE

OF

CONTENTS.—The table of contents for

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7 this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—BORDER SECURITY
Sec. 1101. Definitions.

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H6415

125
1

or imprisonment for not more than 15 years, or

2

both.

3

‘‘(3) If the injury or depredation was described

4

under paragraph (2) and, in the commission of the

5

offense, the offender used or carried a firearm or, in

6

furtherance of any such offense, possessed a firearm,

7

by a fine under this title or imprisonment for not

8

more than 20 years, or both.’’.

9
10
11
12

TITLE IV—BORDER SECURITY
FUNDING
SEC. 4101. BORDER SECURITY FUNDING.

(a) FUNDING.—In addition to amounts otherwise

13 made available by this Act or any other provision of law,
14 there is hereby appropriated to the ‘‘U.S. Customs and
15 Border Protection—Procurement, Construction, and Im16 provements’’ account, out of any amounts in the Treasury
17 not otherwise appropriated, $23,400,000,000, to be avail18 able as described in subsections (b) and (c), of which—
19

(1) $16,625,000,000 shall be for a border wall

20

system along the southern border of the United

21

States, including physical barriers and associated de-

22

tection technology, roads, and lighting; and

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23

(2) $6,775,000,000 shall be for infrastructure,

24

assets, operations, and technology to enhance border

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130
1

(g) RULES

OF

CONSTRUCTION.—Nothing in this sec-

2 tion may be construed to limit the availability of funds
3 made available by any other provision of law for carrying
4 out the requirements of this Act or the amendments made
5 by this Act. Any reference in this section to an appropria6 tion account shall be construed to include any successor
7 accounts.
8

(h) DISCRETIONARY AMOUNTS.—Notwithstanding

9 any other provision of law, the amounts appropriated
10 under subsection (a) are discretionary appropriations (as
11 that term is defined in section 250(c)(7) of the Balanced
12 Budget and Emergency Deficit Control Act of 1985 (2
13 U.S.C. 900(c)(7))).
14
15

SEC. 4102. EXCLUSION FROM PAYGO SCORECARDS.

The budgetary effects of this Act shall not be entered

16 on either PAYGO scorecard maintained pursuant to sec17 tion 4(d) of the Statutory Pay-As-You-Go Act of 2010.

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EXHIBIT 1

I

115TH CONGRESS
2D SESSION

H. R. 6136

To amend the immigration laws and provide for border security, and for
other purposes.

IN THE HOUSE OF REPRESENTATIVES
JUNE 19, 2018
Mr. GOODLATTE (for himself, Mr. CURBELO of Florida, Mr. MCCAUL, and
Mr. DENHAM) introduced the following bill; which was referred to the
Committee on the Judiciary, and in addition to the Committees on Homeland Security, Agriculture, Natural Resources, Transportation and Infrastructure, Ways and Means, Energy and Commerce, Armed Services,
Foreign Affairs, the Budget, and Oversight and Government Reform, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL
To amend the immigration laws and provide for border
security, and for other purposes.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4

(a) SHORT TITLE.—This Act may be cited as the

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5 ‘‘Border Security and Immigration Reform Act of 2018’’.
6

(b) TABLE

OF

CONTENTS.—The table of contents for

7 this Act is as follows:

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152
1

‘‘(3) If the injury or depredation was described

2

under paragraph (2) and, in the commission of the

3

offense, the offender used or carried a firearm or, in

4

furtherance of any such offense, possessed a firearm,

5

by a fine under this title or imprisonment for not

6

more than 20 years, or both.’’.

TITLE V—BORDER SECURITY
FUNDING

7
8
9

SEC. 5101. BORDER SECURITY FUNDING.

10

(a) FUNDING.—In addition to amounts otherwise

11 made available by this Act or any other provision of law,
12 there is hereby appropriated to the ‘‘U.S. Customs and
13 Border Protection—Procurement, Construction, and Im14 provements’’ account, out of any amounts in the Treasury
15 not otherwise appropriated, $23,400,000,000, to be avail16 able as described in subsections (b) and (c), of which—
17

(1) $16,625,000,000 shall be for a border wall

18

system along the southern border of the United

19

States, including physical barriers and associated de-

20

tection technology, roads, and lighting; and
(2) $6,775,000,000 shall be for infrastructure,

22

assets, operations, and technology to enhance border

23
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21

security along the southern border of the United

24

States, including—

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EXHIBIT

I

115TH CONGRESS
2D SESSION

H. R. 4760

To amend the immigration laws and the homeland security laws, and for
other purposes.

IN THE HOUSE OF REPRESENTATIVES
JANUARY 10, 2018
Mr. GOODLATTE (for himself, Mr. MCCAUL, Mr. LABRADOR, Ms. MCSALLY,
Mr. SENSENBRENNER, and Mr. CARTER of Texas) introduced the following bill; which was referred to the Committee on the Judiciary, and
in addition to the Committees on Education and the Workforce, Homeland Security, Foreign Affairs, Ways and Means, Armed Services, Oversight and Government Reform, Agriculture, Transportation and Infrastructure, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned

A BILL
To amend the immigration laws and the homeland security
laws, and for other purposes.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4

(a) SHORT TITLE.—This Act may be cited as the

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5 ‘‘Securing America’s Future Act of 2018’’.
6

(b) TABLE

OF

CONTENTS.—The table of contents for

7 this Act is as follows:

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254
1

(11) UNMANNED

AERIAL VEHICLE.—The

term

2

‘‘unmanned aerial vehicle’’ has the meaning given

3

the term ‘‘unmanned aircraft’’ in section 331 of the

4

FAA Modernization and Reform Act of 2012 (Public

5

Law 112–95; 49 U.S.C. 40101 note).

7

Subtitle A—Infrastructure and
Equipment

8

SEC. 1111. STRENGTHENING THE REQUIREMENTS FOR BAR-

6

9
10

RIERS ALONG THE SOUTHERN BORDER.

Section 102 of the Illegal Immigration Reform and

11 Immigrant Responsibility Act of 1996 (Division C of Pub12 lic Law 104–208; 8 U.S.C. 1103 note) is amended—
13

(1) by amending subsection (a) to read as fol-

14

lows:

15

‘‘(a) IN GENERAL.—The Secretary of Homeland Se-

16 curity shall take such actions as may be necessary (includ17 ing the removal of obstacles to detection of illegal en18 trants) to design, test, construct, install, deploy, and oper19 ate physical barriers, tactical infrastructure, and tech20 nology in the vicinity of the United States border to
21 achieve situational awareness and operational control of
22 the border and deter, impede, and detect illegal activity

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23 in high traffic areas.’’;
areas.
24

(2) in subsection (b)—

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255
1

(A) in the subsection heading, by striking

2

‘‘FENCING

3

serting ‘‘PHYSICAL BARRIERS’’;
’

4

(B) in paragraph (1)—

5

AND

ROAD IMPROVEMENTS’’ and in-

(i) in subparagraph (A)—

6

(I) by striking ‘‘subsection (a)’’

7

and inserting ‘‘this section’’;

8

(II) by striking ‘‘roads, lighting,

9

cameras, and sensors’’ and inserting

10

‘‘tactical infrastructure, and tech-

11

nology’’; and

12

(III) by striking ‘‘gain’’ inserting

13

‘‘achieve situational awareness and’’;

14

and

15

(ii) by amending subparagraph (B) to

16

read as follows:

17

‘‘(B) PHYSICAL

18

INFRASTRUCTURE.—

19

‘‘(i) IN

BARRIERS AND TACTICAL

GENERAL.—Not

later than

September 30, 2022, the Secretary of

21

Homeland Security, in carrying out this

22

section, shall deploy along the United

23
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20

States border the most practical and effec-

24

tive physical barriers and tactical infra-

25

structure available for achieving situational

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EXHIBIT 2

REMARKS

Remarks by President Trump in Meeting with
Senate Minority Leader Chuck Schumer and
House Speaker-Designate Nancy Pelosi
NATIONAL SECURITY & DEFENSE

Issued on: December 11, 2018

Oval Office
11:40 A.M. EST
THE PRESIDENT: Okay, thank you very much. It’s a great honor to have Nancy Pelosi
with us and Chuck Schumer with us. And we’ve actually worked very hard on a couple of
things that are happening. Criminal justice reform — as you know, we’ve just heard word
— got word that Mitch McConnell and the group, we’re going to be putting it up for a
vote. We have great Democrat support, great Republican support. So, criminal justice
reform, something that people have been trying to get — how long, Nancy? Many years.
HOUSE SPEAKER-DESIGNATE PELOSI: A long time.
THE PRESIDENT: Many, many years. Looks like it’s going to be passing, hopefully —
famous last words — on a very bipartisan way. And it’s really something we’re all very
proud of. And again, tremendous support from Republicans and tremendous support

Chuck, did you want to say something?
SENATE MINORITY LEADER SCHUMER: Yeah. Here’s what I want to say: We have a lot of
disagreements here. The Washington Post today gave you a whole lot of Pinocchios
because they say you constantly misstate how much the wall is — how much of the wall
is built and how much is there.
But that’s not the point here. We have a disagreement about the wall —
THE PRESIDENT: Well, the Washington Post — (laughs) —
SENATE MINORITY LEADER SCHUMER: — whether it’s effective or it isn’t. Not on border
security, but on the wall.
We do not want to shut down the government. You have called 20 times to shut down
the government. You say, “I want to shut down the government.” We don’t. We want to
come to an agreement. If we can’t come to an agreement, we have solutions that will
pass the House and Senate right now, and will not shut down the government. And
that’s what we’re urging you to do. Not threaten to shut down the government —
THE PRESIDENT: Chuck —
SENATE MINORITY LEADER SCHUMER: — because you —
THE PRESIDENT: You don’t want to shut down the government, Chuck.
SENATE MINORITY LEADER SCHUMER: Let me just finish. Because you can’t get your
way.
THE PRESIDENT: Because the last time you shut it down you got killed.

SENATE MINORITY LEADER SCHUMER: We do.
THE PRESIDENT: See? We get along.
Thank you, everybody.
Q (Inaudible), Mr. President. You say border security and the wall. Can you have border
security without the wall? There’s a commonality on border security.
THE PRESIDENT: No, you need the wall. The wall is a part of border security.
Q Are you re-defining what it means to have border security?
SENATE MINORITY LEADER SCHUMER: Yes.
THE PRESIDENT: Yeah. We need border security. The wall is a part of border security.
You can’t have very good border security without the wall, no.
HOUSE SPEAKER-DESIGNATE PELOSI: That’s simply not true. That is a political
promise. Border security is a way to effectively honor our responsibilities.
f
SENATE MINORITY LEADER SCHUMER: And the experts say you can do border security
without a wall, which is wasteful and doesn’t solve the problem.
THE PRESIDENT: It totally solves the problem.
HOUSE SPEAKER-DESIGNATE PELOSI: Again, but I don’t want to take this —
THE PRESIDENT: And it’s very important.
HOUSE SPEAKER-DESIGNATE PELOSI: Unfortunately, this has spiraled downward from
— we came at a place to say, “How do we meet the needs of American people who have

THE PRESIDENT: You know what I’ll say: Yes, if we don’t get what we want, one way or
the other — whether it’s through you, through a military, through anything you want to
call — I will shut down the government. Absolutely.
SENATE MINORITY LEADER SCHUMER: Okay. Fair enough. We disagree.
THE PRESIDENT: And I am proud — and I’ll tell you what —
SENATE MINORITY LEADER SCHUMER: We disagree.
THE PRESIDENT: I am proud to shut down the government for border security, Chuck,
because the people of this country don’t want criminals and people that have lots of
problems and drugs pouring into our country. So I will take the mantle. I will be the one
to shut it down. I’m not going to blame you for it. The last time you shut it down, it
didn’t work. I will take the mantle of shutting down.
HOUSE SPEAKER-DESIGNATE PELOSI: That is (inaudible).
THE PRESIDENT: And I’m going to shut it down for border security.
SENATE MINORITY LEADER SCHUMER: But we believe you shouldn’t shut it down.
THE PRESIDENT: Okay. Thank you very much everybody. Thank you.
HOUSE SPEAKER-DESIGNATE PELOSI: (Inaudible) shut down the government.
Q Chief of Staff?
Q Have you picked a Chief of Staff, Mr. President?
THE PRESIDENT: Thank you very much. Yeah, we’re interviewing a lot of — we have a lot
of great people for Chief of Staff. A lot of people want the job. A lot of people want the

job. And I have some great people. A lot of friends of mine want it. A lot of people that
Chuck and Nancy know very well want it. I think people you’d like. We have a lot of
people that want the job — Chief of Staff. So we’ll be seeing what happens very soon.
We’re in no rush. We’re in no rush.
Q Why? Why no rush, Mr. President?
THE PRESIDENT: Why? Because we have a wonderful Chief of Staff right now. Just no —
we are in no rush. Over a period of a week or two, or maybe less, we’ll announce who it’s
going to be. But we have a lot of people that want the position.
Thank you very much everybody. Thanks.
END
11:58 A.M. EST

EXHIBIT 2

In the Senate of the United States,
December 19, 2018.
Resolved, That the Senate agree to the amendment of
the House of Representatives to the amendment of the Senate to the bill (H.R. 695), entitled ‘‘An Act to amend the National Child Protection Act of 1993 to establish a national
criminal history background check system and criminal history review program for certain individuals who, related to
their employment, have access to children, the elderly, or individuals with disabilities, and for other purposes.’’, with the
following

SENATE AMENDMENT TO HOUSE AMENDMENT TO
SENATE AMENDMENT:
In lieu of the matter proposed to be inserted by the
House amendment, insert the following:
1

DIVISION A—FURTHER ADDITIONAL

2

CONTINUING APPROPRIATIONS ACT, 2019

3

SEC. 101. The Continuing Appropriations Act, 2019

4 (division C of Public Law 115–245) is further amended—
5
6

(1) by striking the date specified in section
105(3) and inserting ‘‘February 8, 2019’’; and

2
1

(2) by adding after section 136 the following:

2

‘‘SEC. 137. Notwithstanding section 251(a)(1) of the

3 Balanced Budget and Emergency Deficit Control Act of
4 1985 and the timetable in section 254(a) of such Act, the
5 final sequestration report for fiscal year 2019 pursuant to
6 section 254(f)(1) of such Act and any order for fiscal year
7 2019 pursuant to section 254(f)(5) of such Act shall be
8 issued, for the Congressional Budget Office, 10 days after
9 the date specified in section 105(3), and for the Office of
10 Management and Budget, 15 days after the date specified
11 in section 105(3).
12

‘‘SEC. 138. The authority provided under title XXI of

13 the Homeland Security Act of 2002 (6 U.S.C. 621 et seq.),
14 as amended by section 2(a) of the Protecting and Securing
15 Chemical Facilities from Terrorist Attacks Act of 2014
16 (Public Law 113–254), shall continue in effect through the
17 date specified in section 105(3).
18

‘‘SEC. 139. Section 319L(e)(1)(A) of the Public Health

19 Service Act (42 U.S.C. 247d–7e(e)(1)(A)) shall continue in
20 effect through the date specified in section 105(3) of this
21 Act.
22

‘‘SEC. 140. Section 405(a) of the Pandemic and All-

23 Hazards Preparedness Act (42 U.S.C. 247d–6a note) shall
24 continue in effect through the date specified in section
25 105(3) of this Act.’’.

† HR 695 EAS2

3
1

This division may be cited as the ‘‘Further Additional

2 Continuing Appropriations Act, 2019’’.

4

DIVISION B—MEDICAID
EXTENDERS

5

SEC. 101. EXTENSION OF MONEY FOLLOWS THE PERSON RE-

3

6
7

BALANCING DEMONSTRATION.

(a) GENERAL FUNDING.—Section 6071(h) of the Def-

8 icit Reduction Act of 2005 (42 U.S.C. 1396a note) is
9 amended—
10

(1) in paragraph (1)—

11
12

(A) in subparagraph (D), by striking ‘‘and’’
after the semicolon;

13
14

(B) in subparagraph (E), by striking the
period at the end and inserting ‘‘; and’’; and

15

(C) by adding at the end the following:

16

‘‘(F) subject to paragraph (3), $112,000,000

17

for fiscal year 2019.’’;

18

(2) in paragraph (2)—

19

(A) by striking ‘‘Amounts made’’ and in-

20

serting ‘‘Subject to paragraph (3), amounts

21

made’’; and

22

(B) by striking ‘‘September 30, 2016’’ and

23

inserting ‘‘September 30, 2021’’; and

24

(3) by adding at the end the following new para-

25

graph:

† HR 695 EAS2

4
1

‘‘(3) SPECIAL

RULE FOR FY

2019.—Funds ap-

2

propriated under paragraph (1)(F) shall be made

3

available for grants to States only if such States have

4

an approved MFP demonstration project under this

5

section as of December 31, 2018.’’.

6

(b) FUNDING FOR QUALITY ASSURANCE AND IMPROVE-

7

MENT;

TECHNICAL ASSISTANCE; OVERSIGHT.—Section

8 6071(f) of the Deficit Reduction Act of 2005 (42 U.S.C.
9 1396a note) is amended by striking paragraph (2) and in10 serting the following:
11

‘‘(2) FUNDING.—From the amounts appropriated

12

under subsection (h)(1)(F) for fiscal year 2019,

13

$500,000 shall be available to the Secretary for such

14

fiscal year to carry out this subsection.’’.

15

(c) TECHNICAL AMENDMENT.—Section 6071(b) of the

16 Deficit Reduction Act of 2005 (42 U.S.C. 1396a note) is
17 amended by adding at the end the following:
18
19

‘‘(10) SECRETARY.—The term ‘Secretary’ means
the Secretary of Health and Human Services.’’.

20

SEC. 102. EXTENSION OF PROTECTION FOR MEDICAID RE-

21

CIPIENTS OF HOME AND COMMUNITY-BASED

22

SERVICES AGAINST SPOUSAL IMPOVERISH-

23

MENT.

24

(a) IN GENERAL.—Section 2404 of Public Law 111–

25 148 (42 U.S.C. 1396r–5 note) is amended by striking ‘‘the

† HR 695 EAS2

5
1 5-year period that begins on January 1, 2014,’’ and insert2 ing ‘‘the period beginning on January 1, 2014, and ending
3 on March 31, 2019,’’.
4
5

(b) RULE OF CONSTRUCTION.—
(1) PROTECTING

STATE SPOUSAL INCOME AND

6

ASSET DISREGARD FLEXIBILITY UNDER WAIVERS AND

7

PLAN AMENDMENTS.—Nothing

8

lic Law 111–148 (42 U.S.C. 1396r–5 note) or section

9

1924 of the Social Security Act (42 U.S.C. 1396r–5)

10

shall be construed as prohibiting a State from dis-

11

regarding an individual’s spousal income and assets

12

under a State waiver or plan amendment described

13

in paragraph (2) for purposes of making determina-

14

tions of eligibility for home and community-based

15

services or home and community-based attendant

16

services and supports under such waiver or plan

17

amendment.

18

(2) STATE

in section 2404 of Pub-

WAIVER OR PLAN AMENDMENT DE-

19

SCRIBED.—A

20

scribed in this paragraph is any of the following:

State waiver or plan amendment de-

21

(A) A waiver or plan amendment to provide

22

medical assistance for home and community-

23

based services under a waiver or plan amend-

24

ment under subsection (c), (d), or (i) of section

25

1915 of the Social Security Act (42 U.S.C.

† HR 695 EAS2

6
1

1396n) or under section 1115 of such Act (42

2

U.S.C. 1315).

3

(B) A plan amendment to provide medical

4

assistance for home and community-based serv-

5

ices for individuals by reason of being deter-

6

mined eligible under section 1902(a)(10)(C) of

7

such Act (42 U.S.C. 1396a(a)(10)(C)) or by rea-

8

son of section 1902(f) of such Act (42 U.S.C.

9

1396a(f)) or otherwise on the basis of a reduction

10

of income based on costs incurred for medical or

11

other remedial care under which the State dis-

12

regarded the income and assets of the individ-

13

ual’s spouse in determining the initial and ongo-

14

ing financial eligibility of an individual for such

15

services in place of the spousal impoverishment

16

provisions applied under section 1924 of such

17

Act (42 U.S.C. 1396r–5).

18

(C) A plan amendment to provide medical

19

assistance for home and community-based at-

20

tendant services and supports under section

21

1915(k) of such Act (42 U.S.C. 1396n(k)).

† HR 695 EAS2

7
1

SEC. 103. REDUCTION IN FMAP AFTER 2020 FOR STATES

2
3

WITHOUT ASSET VERIFICATION PROGRAM.

Section 1940 of the Social Security Act (42 U.S.C.

4 1396w) is amended by adding at the end the following new
5 subsection:
6

‘‘(k) REDUCTION

IN

FMAP AFTER 2020

FOR

NON-

7 COMPLIANT STATES.—
8

‘‘(1) IN

GENERAL.—With

respect to a calendar

9

quarter beginning on or after January 1, 2021, the

10

Federal medical assistance percentage otherwise deter-

11

mined under section 1905(b) for a non-compliant

12

State shall be reduced—

13
14

‘‘(A) for calendar quarters in 2021 and
2022, by 0.12 percentage points;

15
16

‘‘(B) for calendar quarters in 2023, by 0.25
percentage points;

17
18

‘‘(C) for calendar quarters in 2024, by 0.35
percentage points; and

19

‘‘(D) for calendar quarters in 2025 and

20

each year thereafter, by 0.5 percentage points.

21

‘‘(2)

NON-COMPLIANT

STATE

DEFINED.—For

22

purposes of this subsection, the term ‘non-compliant

23

State’ means a State—

24
25

‘‘(A) that is one of the 50 States or the District of Columbia;

† HR 695 EAS2

8
1

‘‘(B) with respect to which the Secretary

2

has not approved a State plan amendment sub-

3

mitted under subsection (a)(2); and

4

‘‘(C) that is not operating, on an ongoing

5

basis, an asset verification program in accord-

6

ance with this section.’’.

7
8

SEC. 104. MEDICAID IMPROVEMENT FUND.

Section 1941(b)(1) of the Social Security Act (42

9 U.S.C.

1396w–1(b)(1))

is

amended

by

striking

10 ‘‘$31,000,000’’ and inserting ‘‘$6,000,000’’.
11
12

SEC. 105. BUDGETARY EFFECTS.

(a) STATUTORY PAYGO SCORECARDS.—The budgetary

13 effects of this division shall not be entered on either PAYGO
14 scorecard maintained pursuant to section 4(d) of the Statu15 tory Pay-As-You-Go Act of 2010 (2 U.S.C. 933(d)).
16

(b) SENATE PAYGO SCORECARDS.—The budgetary ef-

17 fects of this division shall not be entered on any PAYGO
18 scorecard maintained for purposes of section 4106 of H.
19 Con. Res. 71 (115th Congress).
20

(c) CLASSIFICATION

OF

BUDGETARY EFFECTS.—Not-

21 withstanding Rule 3 of the Budget Scorekeeping Guidelines
22 set forth in the joint explanatory statement of the committee
23 of conference accompanying Conference Report 105–217
24 and section 250(c)(8) of the Balanced Budget and Emer-

† HR 695 EAS2

9
1 gency Deficit Control Act of 1985, the budgetary effects of
2 this division shall not be estimated—
3

(1) for purposes of section 251 of such Act; and

4

(2) for purposes of paragraph (4)(C) of section

5

3 of the Statutory Pay-As-You-Go Act of 2010 as

6

being included in an appropriation Act.

7

(d) PAYGO ANNUAL REPORT.—For the purposes of

8 the annual report issued pursuant to section 5 of the Statu9 tory Pay-As-You-Go Act of 2010 (2 U.S.C. 934) after ad10 journment of the second session of the 115th Congress, and
11 for determining whether a sequestration order is necessary
12 under such section, the debit for the budget year on the 513 year scorecard, if any, and the 10-year scorecard, if any,
14 shall be deducted from such scorecard in 2019 and added
15 to such scorecard in 2020.
Attest:

Secretary.

† HR 695 EAS2

115TH CONGRESS
2D SESSION

H.R. 695

SENATE AMENDMENT TO
HOUSE AMENDMENT TO
SENATE AMENDMENT

EXHIBIT 2

The Washington Post

Business

Trump says he won’t sign Senate deal to avert shutdown, demands funds for border security
By Erica Werner ,
Damian Paletta and
Mike DeBonis
December 21, 2018

President Trump threatened Thursday to veto a stopgap spending bill unless it includes billions of
dollars to build a wall along the border with Mexico, sending large parts of the federal government
lurching toward a shutdown starting Saturday.
His comments came after an emergency meeting with House Republican leaders, where Trump revealed
he would reject a measure passed in the Senate the night before. That measure would fund many
government agencies through Feb. 8, but it would not include any new money for Trump’s border wall.
“I’ve made my position very clear. Any measure that funds the government must include border
security,” Trump said in an event at the White House. He added, “Walls work, whether we like it or not.
T
They work better than anything.”
Trump’s comments on Thursday completely overturned the plan GOP leaders were patching together
earlier in the day. With no other viable options available, they had hoped to pass the short-term
spending bill approved by the Senate, averting a government shutdown set to start days before
Christmas.
Many lawmakers had expected Trump to grudgingly accept the stopgap measure with Republicans
about to lose their majority in the House, and his rejection set off a chaotic day in the Capitol.
House Republican leaders hurried to appease the president, pulling together a bill that would keep the
government funded through Feb. 8 while also allocating $5.7 billion for the border wall. The House bill
also included nearly $8 billion for disaster relief for hurricanes and wildfires.
The legislation passed the House on a near-party-line vote of 217 to 185 Thursday night, over strident
objections from Democrats who criticized the wall as immoral and ineffective and declared the
legislation dead on arrival in the Senate. No Democrats voted for the House measure, and eight
Republicans voted against it.
In a late-night tweet, Trump thanked “our GREAT Republican Members of Congress” for the vote,
adding: “Now on to the Senate!”
Trump also mocked House Minority Leader Nancy Pelosi (D-Calif.), who said in an Oval Office meeting
last week that she did not think Trump could corral the votes to pass a spending bill with his requested
wall funding.
“Nancy does not have to apologize. All I want is GREAT BORDER SECURITY!” Trump wrote.
Barely 24 hours away from a shutdown set to start at the end of Friday, the House vote only hardened
Washington’s budget impasse: Democrats have the Senate votes to block any bill that includes funding
for Trump’s wall, and Trump says he’ll veto any bill that doesn’t.
The chances of a shutdown are “certainly higher than they were this morning,” Rep. Tom Cole (R-Okla.)
said after Thursday night’s House vote.
Funding for roughly 25 percent of the federal agencies whose budgets rely on Congress will expire at the
end of Friday. The agencies affected deal with homeland security, law enforcement, national parks,
transportation and housing, among others.
The rest of the government, including the military, would not be affected, as it’s funded through
September by bills lawmakers passed earlier this year.

The impacted agencies would continue to perform some of their functions, but more than 100,000
employees are expected to be sent home without pay.
The White House hasn’t yet revealed the full impact of a partial shutdown, as it is up to each agency to
implement its own plan. But it is clear the effects would be widespread: Close to 80,000 Internal
Revenue Service employees would no longer come into work, and national parks that are locked at night
would not reopen in the morning.
It can occasionally take several days for the full impact of a shutdown to kick in, and some agencies
could remain open on Saturday but close by Monday.
Numerous agencies would be affected immediately, and some on Thursday seemed unprepared for the
brinkmanship.
Officials from the Smithsonian Institution, Statue of Liberty, Golden Gate National Park and Gateway
Arch either said they weren’t sure whether they would be open Saturday or didn’t respond to requests
for comment.
A government shutdown could drag on for days or weeks, as Democrats have shown no willingness to
budge from their refusal to finance a wall. Democrats take control of the House of Representatives in
early January, giving them even more leverage in negotiations.
As Thursday night wore on, a partial government shutdown began to appear all but inevitable to many
on Capitol Hill, though House Majority Leader Kevin McCarthy (R-Calif.) insisted that “there’s still
plenty of time” to avoid one.
“I think you’ll find that we’ll be able to move forward and make sure we keep the government open,”
McCarthy said after returning from the White House. “And also we believe we need border security.”
But the path forward was far from clear, and the 115th Congress threatened to end on a bitter note of
dysfunction as House conservatives, who’ve waged numerous futile battles over the years, picked one
last fight before sinking into the minority, this time backed up by the president.
Trump is scheduled to leave Friday afternoon for two weeks in Florida, but it was unclear whether he
would do so amid a partial government shutdown.
He has repeatedly threatened a government shutdown since taking office, telling advisers it would be
good politics for Republicans to demonstrate their resolve in building a border wall.
But many in the party saw it as impractical and have repeatedly worked to persuade the president to
keep the government open. Trump was prepared for a shutdown this fall, but GOP leaders, fearful of a
government closure weeks before the midterm elections, convinced him to sign legislation extending
funding through December — in part by promising to fight for wall money at the next budget deadline.
Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday warned Republicans they may have to
return for a vote Friday. But it’s impossible for McConnell to pass a spending bill without support from
Democrats, who have locked arms in opposition to any money for a border wall.
Trump’s opposition to the short-term deal brings him full-circle. Last week, he told Pelosi, who is
expected to return as House speaker in January, and Senate Minority Leader Charles E. Schumer
(D-N.Y.) that he would be “proud” to shut the government down if he did not get the $5 billion for the
wall.
On Tuesday, when it became clear that Trump did not have enough support in Congress for the
$5 billion, the White House began backing down from the ultimatum. White House press secretary
Sarah Sanders said Trump would find other ways to fund the construction of the wall.
On Wednesday, Trump wrote in a tweet that the military would build it, though a number of budget
experts said that would be illegal, as money can’t be redirected without Congress’s approval.

When Trump appeared to be backing down, conservative media outlets and Congress’s most
conservative members revolted, demanding the president rethink his decision. By Thursday, Trump was
back to demanding his wall and insisting the money come from Congress.
Conservatives including members of the House Freedom Caucus encouraged the president to take a
hard-line stance, arguing this was his last opportunity to try to extract any money for the wall.
“We have to fight now or America will never believe we’ll fight,” Rep. Mark Meadows (R-N.C.) told
Republicans at a closed-door meeting Thursday.
“The time to fight is now. I mean, this is stupid,” said Rep. Paul A. Gosar (R-Ariz.).
As GOP leaders moved to adjust to Trump’s shifting stances, Democrats ridiculed the spectacle, even as
they repeated promises that they would provide no money for Trump’s wall.
“I don’t know that anyone ever has any assurances from the White House on any subject including this
one,” said Pelosi. “We’re right in the middle of a sort of a meltdown on the part of Republicans.”
The construction of a wall along the Mexican border was one of Trump’s top campaign promises in
2016, and he vowed to somehow make Mexico pay for it all. Since he won the election, he has demanded
the money come from Congress, seeking between $1.6 billion and $5 billion. At one point, he even
insisted Democrats give him $25 billion for the wall.
In tweets early Thursday, Trump had ripped Democrats and promised to fight for wall funding but still
appeared ready to sign a measure to keep the government open. He claimed his initiatives to move more
agents along the Mexican border had made it “tight” and said he would not support infrastructure
legislation next year unless Democrats eventually agree to finance the construction of a wall.
“Remember the Caravans?” Trump wrote on Twitter. “Well, they didn’t get through and none are
forming or on their way. Border is tight. Fake News silent!”
The government’s Department of Homeland Security painted a much different picture of the situation
just a few weeks ago. It reported that the number of people arrested or detained along the Mexico border
reached a new high for the Trump presidency in November, as arrests of juveniles and parents with
children continued to rise. U.S. Customs and Border Protection detained 25,172 members of “family
units” in November, the highest number ever recorded.
Last week, Trump said terrorists were crossing the U.S. border and he also offered the unfounded claim
that people with contagious diseases were entering the country. At Trump’s meeting with Pelosi and
Schumer, the president said he would take responsibility for a government shutdown, upsetting many
Republicans who had wanted to blame Democrats for any impasse.
Seung Min Kim, John Wagner, Josh Dawsey, Paul Kane and Sean Sullivan contributed to this report.

Erica Werner
Erica Werner has worked at The Washington Post since 2017, covering Congress with a focus on economic policy. Previously, she worked at the Associated Press for more than 17 y

Damian Paletta
Damian Paletta is White House economic policy reporter for The Washington Post. Before joining The Post, he covered the White House for the Wall Street Journal. Follow

Mike DeBonis
Mike DeBonis covers Congress, with a focus on the House, for The Washington Post. He previously covered D.C. politics and government from 2007 to 2015. Follow

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EXHIBIT 2

In the House of Representatives, U. S.,
December 20, 2018.
Resolved, That the House agree to the amendment of the
Senate to the amendment of the House to the amendment of
the Senate to the bill (H.R. 695) entitled ‘‘An Act to amend
the National Child Protection Act of 1993 to establish a national criminal history background check system and criminal
history review program for certain individuals who, related to
their employment, have access to children, the elderly, or individuals with disabilities, and for other purposes.’’, with the
following

HOUSE AMENDMENT TO SENATE AMENDMENT TO HOUSE
AMENDMENT TO SENATE AMENDMENT:
In lieu of the matter proposed to be inserted by the
Senate, insert the following:
1

DIVISION A—FURTHER ADDITIONAL

2

CONTINUING APPROPRIATIONS ACT, 2019

3

SEC. 101. The Continuing Appropriations Act, 2019

4 (division C of Public Law 115–245) is further amended—
5
6

(1) by striking the date specified in section
105(3) and inserting ‘‘February 8, 2019’’; and

7

(2) by adding after section 136 the following:

8

‘‘SEC. 137. Notwithstanding section 251(a)(1) of the

9 Balanced Budget and Emergency Deficit Control Act of
10 1985 and the timetable in section 254(a) of such Act, the

2
1 final sequestration report for fiscal year 2019 pursuant to
2 section 254(f)(1) of such Act and any order for fiscal year
3 2019 pursuant to section 254(f)(5) of such Act shall be
4 issued, for the Congressional Budget Office, 10 days after
5 the date specified in section 105(3), and for the Office of
6 Management and Budget, 15 days after the date specified
7 in section 105(3).
8

‘‘SEC. 138. The authority provided under title XXI of

9 the Homeland Security Act of 2002 (6 U.S.C. 621 et seq.),
10 as amended by section 2(a) of the Protecting and Securing
11 Chemical Facilities from Terrorist Attacks Act of 2014
12 (Public Law 113–254), shall continue in effect through the
13 date specified in section 105(3).
14

‘‘SEC. 139. Section 319L(e)(1)(A) of the Public Health

15 Service Act (42 U.S.C. 247d–7e(e)(1)(A)) shall continue in
16 effect through the date specified in section 105(3) of this
17 Act.
18

‘‘SEC. 140. Section 405(a) of the Pandemic and All

19 Hazards Preparedness Act (42 U.S.C. 247d–6a note) shall
20 continue in effect through the date specified in section
21 105(3) of this Act.
22

‘‘SEC. 141. Notwithstanding any other provision of

23 this Act, there is appropriated for ‘U.S. Customs and Bor24 der Protection—Procurement, Construction, and Improve-

•HR 695 EAH2

3
1 ments’ $5,710,357,000 for fiscal year 2019, to remain avail2 able until September 30, 2023.
3

‘‘SEC. 142. Notwithstanding section 101, section 230

4 of division F of Public Law 115–141 shall not apply to
5 amounts made available by this Act.’’.
6

This division may be cited as the ‘‘Further Additional

7 Continuing Appropriations Act, 2019’’.
8
9
10

DIVISION B—MEDICAID
EXTENDERS
SEC. 101. EXTENSION OF MONEY FOLLOWS THE PERSON RE-

11
12

BALANCING DEMONSTRATION.

(a) GENERAL FUNDING.—Section 6071(h) of the Def-

13 icit Reduction Act of 2005 (42 U.S.C. 1396a note) is
14 amended—
15

(1) in paragraph (1)—

16
17

(A) in subparagraph (D), by striking ‘‘and’’
after the semicolon;

18
19

(B) in subparagraph (E), by striking the
period at the end and inserting ‘‘; and’’; and

20

(C) by adding at the end the following:

21

‘‘(F) subject to paragraph (3), $112,000,000

22

for fiscal year 2019.’’;

23

(2) in paragraph (2)—

•HR 695 EAH2

EXHIBIT 2

EXECUTIVE O FFI CE OF THE PRESIDENT
OFFICE OF MANAGEMENT A ND BUDGET
WAS HIN GTON, D.C . 20503

January 6, 2019
The Honorable Richard Shelby
Chairman
Committee on Appropriations
. United States Senate
Washington, DC 20510
Dear Mr. Chairman:
The President continues to stress the need to pass legislation thatwill both reopen the
Federal Government and address the security and humanitarian crisis at our Nation's Southwest
border. The Administration has previously transmitted budget proposals that would support his
ongoing commitment to dramatically reduce the entry of illegal immigrants, criminals, and
drugs; keep out ten-orists, public safety threats, and those otherwise inadmissible under U.S. law;
and ensure that those who do enter without legal pennission can be promptly and safely returned
home.
Appropriations bills for fiscal year (FY) 2019 that have akeady been considered by the
cuuent and previous Congresses are inadequate to fully address these critical issues. Any
agreement for the cunent year should°satisfy the following priorities:
Borde1' Wall, Customs and Border Protection (CBP): The President requests $5.7 billion for
construction of a steel barrier for the Southwest border. Central to any strategy to achieve
operational control along the southern border is physical infrastructure to provide requisite
impedance and denia1. In short, a physical barrier- wall-creates an enduring capability that
helps field personnel stop, slow down and/or contain illegal entries. In conce11 with the U.S.
Army Core_s ofEngineers, CBP has increased its capacity to execute these funds. The
Administration's full request would fund construction of a total of apE_roximately 234 miles of
new physical barrier and fully fund the top 10 priorities in CBP's Border Security Improvement
· Plan. This would require an i11crease of $4.1 billion over tbe FY 2019 funding level iu the
Senate version of tbe bill.

Immigration Judge Teams - Executive Office for Immigration Review (EOJR): The President
requests at least $563 million for 75 additional Immigration Judges and support staff to reduce the
backlog of pending immigration cases. The Administration appreciates that the Senate's FY 2019
bill provides this level of fonding, and looks forward to working with the Congress on further
increases in this area to facilitate an expansion of in~country processing of asylum claims.
Law Enforcement Personnel, Border Patrol Agent Hiring, CBP: The President requests $211
million to hire 750 additional Border Patrol Agents in suppo1t of his promise to keep our borders
safe and secure. While the Senate's FY 2019 bill supports some Border Patrol Agent hiring,
fulfilling this request requires an increase of $100 miI1ion over the FY 2019 funding level in
the Senate ve1
·sion of the bill.
Law Enforcement Personnel, Immigration and Customs Enforcement (ICE): The President

requests $571 million for 2,000 additional law enforcement personnel, as well as support staff,
who enforce our U.S. immigration laws and help addres~ gang violence, smuggling and
trafficking, and the spread of drugs in our communities. This would require ·an increase of $571
million over tbe FY 2019 funding level in the Senate :version of the bill.

Detention Beds, ICE: The President requests $4.2 billion to support 52,000 detention beds.
Given that in recent months, the number of people attempting to cross the border illegally has
risen to 2,000 per day, providing additional resources for detention and transportation is essential.
This would require an increase of $798 million over the FY 2019 funding level in the Senate
version of the bill.
Humanitarian Needs: The President requests an additional $800 million to addrnss urgent
humanitarian needs. This includes additional funding for enhanced medical support,
transportation, consumable supplies appropriate for the population, and additional temporary
facilities for processing and short-term custody of this vulnerable population, which are necessary
to ensure the well-being of those taken into custody.
Counter-narcotics/weapons Technology: Beyond these specific budgetary requests, the
Administration looks forward to working with Congress to provide resources in other areas to
address the unprecedented challenges we face along the Southwest border. Specifically, $675
million would provide Non-Intrusive Inspection (NII) technology at inbound lanes at U.S.
Southwest Border Land Ports of Entry (LPOE) would allow CBP to deter and detect more
contraband, including narcotics, weapons, and other materials that pose nuclear and radiological
threats. This would require an increase of $631 million over the FY 2019 funding level in the
Senate version of the bill.

In addition, to address the humanitarian crisis of unaccompanied alien children (UACs),
Democrats have proposed in-country asylum processing for Central American Minors. This
would require a statutory change, along with reallocation of State Department funds to establish
in-country processing capacities at Northern Triangle consulates and embassies. Furthermore, for
the new procedure to achieve the desired humanitarian result, a further corresponding statutory
change would be required to ensme that those who circumvent the process and come to the
United States without authorization can be promptly returned home. Without the latter change,
in-country processing will not reduce the unauthorized flow or successfully mitigate the
humanitarian crisis."
These upfront investments in physical barriers and technology, as well as legislation to close
loopholes in our immigration system, will reduce illegal immigration, the flow of illicit drugs
entering our country and reduce the long term costs for border and immigration enforcement
activities.
The Administration looks fotward to advancing these critical priorities as part oflegislation
to reopen the Government.
Sincerely,
Russell T. Vought
Acting Director

2

EXHIBIT 2

Rose Garden
2:17 P.M. EST
THE PRESIDENT: Thank you very much. My fellow Americans, I am very proud to
announce today that we have reached a deal to end the shutdown and re-open the
federal government. (Applause.) As everyone knows, I have a very powerful
alternative, but I didn’t want to use it at this time. Hopefully it will be unnecessary.
I want to thank all of the incredible federal workers, and their amazing families, who
have shown such extraordinary devotion in the face of this recent hardship. You are
fantastic people. You are incredible patriots. Many of you have suffered far greater
than anyone, but your families would know or understand. And not only did you not
complain, but in many cases you encouraged me to keep going because you care so
much about our country and about its border security.
Again, I thank you. All Americans, I thank you. You are very, very special people. I
am so proud that you are citizens of our country. When I say “Make America Great
Again,” it could never be done without you. Great people.
In a short while, I will sign a bill to open our government for three weeks until
February 15th. I will make sure that all employees receive their back pay very quickly,
or as soon as possible. It’ll happen fast. I am asking Senate Majority Leader Mitch
McConnell to put this proposal on the floor immediately.
After 36 days of spirited debate and dialogue, I have seen and heard from enough
Democrats and Republicans that they are willing to put partisanship aside — I think
— and put the security of the American people first. I do believe they’re going to do
that. They have said they are for complete border security, and they have finally and
fully acknowledged that having barriers, fencing, or walls — or whatever you want to
call it — will be an important part of the solution.
A bipartisan Conference Committee of House and Senate lawmakers and leaders will
immediately begin reviewing the requests of our Homeland Security experts — and
experts they are — and also law enforcement professionals, who have worked with us
so closely. We want to thank Border Patrol, ICE, and all law enforcement. Been
incredible. (Applause.)
Based on operational guidance from the experts in the field, they will put together a
Homeland Security package for me to shortly sign into law.
Over the next 21 days, I expect that both Democrats and Republicans will operate in
good faith. This is an opportunity for all parties to work together for the benefit of
our whole beautiful, wonderful nation.
If we make a fair deal, the American people will be proud of their government for
proving that we can put country before party. We can show all Americans, and people
all around the world, that both political parties are united when it comes to protecting

our country and protecting our people.
Many disagree, but I really feel that, working with Democrats and Republicans, we
can make a truly great and secure deal happen for everyone.
Walls should not be controversial. Our country has built 654 miles of barrier over the
last 15 years, and every career Border Patrol agent I have spoken with has told me
that walls work. They do work. No matter where you go, they work. Israel built a
wall — 99.9 percent successful. Won’t be any different for us.
They keep criminals out. They save good people from attempting a very dangerous
journey from other countries — thousands of miles — because they think they have a
glimmer of hope of coming through. With a wall, they don’t have that hope. They
keep drugs out, and they dramatically increase efficiency by allowing us to patrol far
larger areas with far fewer people. It’s just common sense. Walls work.
That’s why most of the Democrats in Congress have voted in the past for bills that
include walls and physical barriers and very powerful fences. The walls we are
building are not medieval walls. They are smart walls designed to meet the needs of
frontline border agents, and are operationally effective. These barriers are made of
steel, have see-through visibility, which is very important, and are equipped with
sensors, monitors, and cutting-edge technology, including state-of-the-art drones.
We do not need 2,000 miles of concrete wall from sea to shining sea — we never did;
we never proposed that; we never wanted that — because we have barriers at the
border where natural structures are as good as anything that we can build. They’re
already there. They’ve been there for millions of years.
Our proposed structures will be in pre-determined high-risk locations that have been
specifically identified by the Border Patrol to stop illicit flows of people and drugs.
No border security plan can ever work without a physical barrier. Just doesn’t
happen.
At the same time, we need to increase drug detection technology and manpower to
modernize our ports of entry, which are obsolete. The equipment is obsolete. They’re
old. They’re tired. This is something we have all come to agree on, and will allow for
quicker and safer commerce. These critical investments will improve and facilitate
legal trade and travel through our lawful ports of entry.
Our plan also includes desperately needed humanitarian assistance for those being
exploited and abused by coyotes, smugglers, and the dangerous journey north.
The requests we have put before Congress are vital to ending the humanitarian and
security crisis on our southern border. Absolutely vital. Will not work without it.
This crisis threatens the safety of our country and thousands of American lives.
Criminal cartels, narco-terrorists, transnational gangs like MS-13, and human
traffickers are brazenly violating U.S. laws and terrorizing innocent communities.
Human traffickers — the victims are women and children. Maybe to a lesser extent,
believe or not, children. Women are tied up. They’re bound. Duct tape put around
their faces, around their mouths. In many cases, they can’t even breathe. They’re put
in the backs of cars or vans or trucks. They don’t go through your port of entry. They
make a right turn going very quickly. They go into the desert areas, or whatever areas

you can look at. And as soon as there’s no protection, they make a left or a right into
the United States of America. There’s nobody to catch them. There’s nobody to find
them.
They can’t come through the port, because if they come through the port, people will
see four women sitting in a van with tape around their face and around their mouth.
Can’t have that.
And that problem, because of the Internet, is the biggest problem — it’s never been
like this before — that you can imagine. It’s at the worst level — human trafficking —
in the history of the world. This is not a United States problem; this is a world
problem. But they come through areas where they have no protection, where they
have no steel barriers, where they have no walls. And we can stop almost 100 percent
of that.
The profits reaped by these murderous organizations are used to fund their malign
and destabilizing conduct throughout this hemisphere.
Last year alone, ICE officers removed 10,000 known or suspected gang members, like
MS-13 and members as bad as them. Horrible people. Tough. Mean. Sadistic. In
the last two years, ICE officers arrested a total of 266,000 criminal aliens inside of the
United States, including those charged or convicted of nearly 100,000 assaults,
30,000 sex crimes, and 4,000 homicides or, as you would call them, violent, vicious
killings. It can be stopped.
Vast quantities of lethal drugs — including meth, fentanyl, heroin, and cocaine — are
smuggled across our southern border and into U.S. schools and communities. Drugs
kill much more than 70,000 Americans a year and cost our society in excess of $700
billion.
The sheer volume of illegal immigration has overwhelmed federal authorities and
stretched our immigration system beyond the breaking point. Nearly 50 migrants a
day are being referred for medical assistance — they are very, very sick — making this
a health crisis as well. It’s a very big health crisis. People have no idea how big it is,
unless you’re there.
Our backlog in the immigration courts is now far greater than the 800,000 cases that
you’ve been hearing about over the last couple of years. Think of that, though:
800,000 cases because our laws are obsolete. So obsolete. They’re the laughing stock
all over the world. Our immigration laws, all over the world — they’ve been there for
a long time — are the laughing stock, all over the world.
We do not have the necessary space or resources to detain, house, vet, screen, and
safely process this tremendous influx of people. In short, we do not have control over
who is entering our country, where they come from, who they are, or why they are
coming.
The result, for many years, is a colossal danger to public safety. We’re going to
straighten it out. It’s not hard. It’s easy, if given the resources.
Last month was the third straight month in a row with 60,000 apprehensions on our
southern border. Think of that. we apprehended 60,000 people. That’s like a
stadium full of people. A big stadium.

There are many criminals being apprehended, but vast numbers are coming because
our economy is so strong. We have the strongest economy now in the entire world.
You see what’s happening. We have nowhere left to house them and no way to
promptly remove them. We can’t get them out because our laws are so obsolete, so
antiquated, and so bad.
Without new resources from Congress, we will be forced to release these people into
communities — something we don’t want to do — called catch-and-release. You catch
them. Even if they are criminals, you then release them. And you can’t release them
from where they came, so they go into our country and end up in places you would
least suspect. And we do as little releasing as possible, by they’re coming by the
hundreds of thousands.
I have had zero Democrat lawmakers volunteer to have them released into their
districts or states. And I think they know that, and that’s what we’re going to be
discussing over the next three weeks.
The painful reality is that the tremendous economic and financial burdens of illegal
immigration fall on the shoulders of low-income Americans, including millions of
wonderful, patriotic, law-abiding immigrants who enrich our nation.
As Commander-in-Chief, my highest priority is the defense of our great country. We
cannot surrender operational control over the nation’s borders to foreign cartels,
traffickers, and smugglers. We want future Americans to come to our country legally
and through a system based on merit. We need people to come to our country. We
have great companies moving back into the United States. And we have the lowest
employment and the best employment numbers that we’ve ever had. There are more
people working today in the United States than have ever worked in our country. We
need people to come in to help us — the farms, and with all of these great companies
that are moving back. Finally, they’re moving back. People said it couldn’t happen.
It’s happening.
And we want them to enjoy the blessings of safety and liberty, and the rule of law. We
cannot protect and deliver these blessings without a strong and secure border.
I believe that crime in this country can go down by a massive percentage if we have
great security on our southern border. I believe drugs, large percentages of which
come through the southern border, will be cut by a number that nobody will believe.
So let me be very clear: We really have no choice but to build a powerful wall or steel
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barrier. If we don’t get a fair deal from Congress, the government will either shut
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down on February 15th, again, or I will use the powers afforded to me under the laws
and the Constitution of the United States to address this emergency. We will have
great security.
And I want to thank you all very much. Thank you very much. (Applause.)
END

2:35 P.M. EST

EXHIBIT 2

MEMORANDUM FOR THE SECRETARY OF DEFENSE
THE ATTORNEY GENERAL
THE SECRETARY OF HOMELAND SECURITY
SUBJECT:

Securing the Southern Border of the United States

1. The security of the United States is imperiled by a drastic surge of illegal activity on
the southern border. Large quantities of fentanyl, other opioids, and other dangerous
and illicit drugs are flowing across our southern border and into our country at
unprecedented levels, destroying the lives of our families and loved ones. Mara
Salvatrucha (MS-13) and other deadly transnational gangs are systematically
exploiting our unsecured southern border to enter our country and develop
operational capacity in American communities throughout the country. The
anticipated rapid rise in illegal crossings as we head into the spring and summer
months threatens to overwhelm our Nation’s law enforcement capacities.
2. The combination of illegal drugs, dangerous gang activity, and extensive illegal
immigration not only threatens our safety but also undermines the rule of law. Our
American way of life hinges on our ability as a Nation to adequately and effectively
enforce our laws and protect our borders. A key and undeniable attribute of a
sovereign nation is the ability to control who and what enters its territory.
3. Our professional and dedicated U.S. Customs and Border Protection agents and
officers, U.S. Immigration and Customs Enforcement officers, and other Federal,
State, and local law enforcement personnel work tirelessly to defend our homeland
against these threats. They risk their lives daily to protect the people of this country.
Theirs is a record of dedication and sacrifice, meriting the unwavering support of the
entire United States Government.
4. The situation at the border has now reached a point of crisis. The lawlessness that
continues at our southern border is fundamentally incompatible with the safety,
security, and sovereignty of the American people. My Administration has no choice
but to act.
5. The Department of Defense currently assists other nations in many respects,
including assisting with border security, but the highest sovereign duty of the
President is to defend this Nation, which includes the defense of our borders.
6. The President may assign a mission to the Secretary of Defense to support the
operations of the Department of Homeland Security in securing our southern border,
including by requesting use of the National Guard, and to take other necessary steps
to stop the flow of deadly drugs and other contraband, gang members and other
criminals, and illegal aliens into the country. The Secretary of Defense may use all

available authorities as appropriate, including use of National Guard forces, to fulfill
this mission. During the administrations of Presidents George W. Bush and Barack
Obama, the National Guard provided support for efforts to secure our southern
border. The crisis at our southern border once again calls for the National Guard to
help secure our border and protect our homeland.
Therefore, by the authority vested in me as President by the Constitution and the laws
of the United States, including section 502 of title 32, United States Code, and section
301 of title 3, United States Code, I hereby direct as follows:
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Section 1. The Secretary of Defense shall support the Department of Homeland
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Security in securing the southern border and taking other necessary actions to stop
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the flow of deadly drugs and other contraband, gang members and other criminals,
and illegal aliens into this country. The Secretary of Defense shall request use of
National Guard personnel to assist in fulfilling this mission, pursuant to section 502
of title 32, United States Code, and may use such other authorities as appropriate and
consistent with applicable law.
Sec. 2. The Secretary of Homeland Security shall work with the Secretary of Defense
to provide any training or instruction necessary for any military personnel, including
National Guard units, to effectively support Department of Homeland Security
personnel in securing the border.
Sec. 3. The Secretary of Defense and the Secretary of Homeland Security, in
coordination with the Attorney General, are directed to determine what other
resources and actions are necessary to protect our southern border, including Federal
law enforcement and United States military resources. Within 30 days of the date of
this memorandum, the Secretary of Defense and the Secretary of Homeland Security,
in coordination with the Attorney General, shall submit to the President a report
detailing their findings and an action plan, including specific recommendations as to
any other executive authorities that should be invoked to defend the border and
security of the United States.
Sec. 4. Any provision of any previous proclamation, memorandum, or Executive
Order that is inconsistent with the actions taken in this memorandum is superseded
to the extent of such inconsistency.
Sec. 5. (a) Nothing in this memorandum shall be construed to impair or otherwise
affect:
(i) the authority granted by law to an executive department or agency, or the head
thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to
budgetary, administrative, or legislative proposals.
(b) This memorandum shall be implemented consistent with applicable law and
subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit,
substantive or procedural, enforceable at law or in equity by any party against the
United States, its departments, agencies, or entities, its officers, employees, or agents,
or any other person.

DONALD J. TRUMP

EXHIBIT 2

President Donald J. Trump

SECURING OUR BORDER: President Donald J. Trump is following
through on his promise to secure the border with legislation and
Executive action.
President Trump was elected partly on his promise to secure the Southern
Border with a barrier and, since his first day in office, he has been following
through on that promise.
As the President has said, sections of the border wall are already being built,
and legislation and Executive actions are building on that progress.
Executive action being taken by the President makes available additional
funding to secure our border that is essential to our national security.
LEGISLATIVE WINS: President Trump secured a number of significant
legislative victories in the Homeland Security appropriations bill that
further his effort to secure the Southern Border and protect our country.
The funding bill contains robust resources and additional provisions to secure
the border and strengthen immigration enforcement.
The bill provides $1.375 billion for approximately 55 miles of border barrier in
highly dangerous and drug smuggling areas in the Rio Grande Valley, where it is
desperately needed.
More than 40 percent of all border apprehensions occurred in the Rio
Grande Valley sector in fiscal year (FY) 2018.
The Rio Grande Valley was the border sector with the most known deaths
of illegal border crossers in FY 2018.
$415 million will go toward addressing the humanitarian crisis at the border by
providing medical care, transportation, processing centers, and consumables.
President Trump successfully rejected efforts by some to undercut Immigration
and Customs Enforcement’s (ICE) ability to uphold our laws and detain illegal
aliens, including criminals.
ICE funding supports nearly 5,000 additional beds to detain illegal aliens
and keep criminals off our streets.
Customs and Border Protection will receive funding for 600 additional officers.
This bill will help keep deadly drugs out of our communities by increasing drug
detection at ports of entry, including opioid detection staffing, labs, and
equipment.
A PROMISE TO ACT: President Trump is taking Executive action to
ensure we stop the national security and humanitarian crisis at our
Southern Border.
President Trump is using his legal authority to take Executive action to secure
additional resources, just as he promised. In part, he is declaring a national
emergency that makes available additional troops and funding for military

construction.
Including funding in Homeland Security appropriations, the Administration
has so far identified up to $8.1 billion that will be available to build the border
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wall once a national emergency is declared and additional funds have been
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reprogrammed, including:
About $601 million from the Treasury Forfeiture Fund
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Up to $2.5 billion under the Department of Defense funds transferred for
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Support for Counterdrug Activities (Title 10 United States Code, section
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Up to $3.6 billion reallocated from Department of Defense military
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construction projects under the President’s declaration of a national
emergency (Title 10 United States Code, section 2808)
These funding sources will be used sequentially and as needed.
The Department of Homeland Security, Department of Defense, and the Army
Corps of Engineers are working to create a prioritized list of segments and a
work plan for the remainder of FY 2019 and beyond.
New projects could include: new levee wall, new and replacement primary
pedestrian barrier, new vehicle-to-pedestrian barrier, and new secondary
barrier.
NATIONAL EMERGENCY ON OUR BORDER: The President is using his
clear authority to declare a national emergency as allowed under the
National Emergencies Act.
Since 1976, presidents have declared nearly 60 national emergencies.
Most of the previously declared national emergencies have been
continually renewed and are still in effect, after being continually
renewed.
Multiple Governors have declared states of emergency along the border in the
past.
Former Arizona Governor Janet Napolitano, who became President
Obama’s DHS Secretary, declared a state of emergency along the border in
2005.
Former New Mexico Governor Bill Richardson also declared a state of
emergency at the border in 2005.
Former President George W. Bush and former President Obama both directed
the use of the military to assist DHS in securing and managing the Southern
Border.
Former President Bush declared a national emergency in 2001, which invoked
reprogramming authority granted by Title 10 United States Code, section 2808,
and both he and former President Obama used that authority a total of 18 times
to fund projects between 2001 and 2014.
ADDRESSING THE CRISIS AT HAND: President Trump is taking the
necessary steps to address the crisis at our Southern Border and stop
crime and drugs from flooding into our Nation.
Cartels, traffickers, and gangs, like the vile MS-13 gang, have taken advantage of
our weak borders for their own gain.
Immigration officers have made 266,000 arrests of criminal aliens in the last
two fiscal years.
This includes aliens charged or convicted of approximately 100,000
assaults, 30,000 sex crimes, and 4,000 killings.
Tons of deadly drugs have flooded across the border and into our communities,

taking countless American lives.
Methamphetamine, heroin, cocaine, and fentanyl all flow across our
Southern Border and destroy our communities.
More than 70,000 Americans died of drug overdoses in 2017 alone.
Human traffickers exploit our borders to traffic young girls and women into our
country and sell them into prostitution and slavery.
Massive caravans of migrants view our unsecure border as a way to gain illegal
entry into our country and take advantage of our nonsensical immigration
loopholes.

EXHIBIT 2

Audit Report

OIG- 19-022

FINANCIAL MANAGEMENT
Audit of the Department of the Treasury Forfeiture Fund's
Financial Statements for Fiscal Years 2018 and 2017

December 13, 2018

Office of Inspector General
Department of the Treasury

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DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220

December 13, 2018
OFFICE OF
INSPECTOR GENERAL

MEMORANDUM FOR JOHN FARLEY, DIRECTOR
TREASURY EXECUTIVE OFFICE FOR ASSET FORFEITURE
FROM:

James Hodge /s/
Director, Financial Audit

SUBJECT:

Audit of the Department of the Treasury Forfeiture Fund's
Financial Statements for Fiscal Years 2018 and 2017

I am pleased to transmit the attached subject report. Under a contract monitored
by our office, GKA, P.C. (GKA), a certified independent public accounting firm,
audited the financial statements of the Department of the Treasury Forfeiture Fund
(TFF) as of September 30, 2018 and 2017, and for the years then ended, and
provided a report on internal control over financial reporting, and a report on
compliance with laws, regulations, and contracts tested. The contract required that
the audit be performed in accordance with U.S. generally accepted government
auditing standards, Office of Management and Budget Bulletin No. 19-01, Audit
Requirements for Federal Financial Statements, and the Government Accountability
Office/ Council of the Inspectors General on Integrity and Efficiency, Financial Audit
Manual.
In its audit of the TFF, GKA found
•
•
•

the financial statements were fairly presented, in all material respects, in
accordance with U.S. generally accepted accounting principles;
no deficiencies in internal control over financial reporting that are considered
material weaknesses; and
no instances of reportable noncompliance with laws, regulations, and
contracts tested.

GKA also issued a management letter dated October 30, 2018, discussing a matter
involving internal controls that was identified during the audit but was not required
to be included in the auditors' report. This letter will be transmitted separately.
In connection with the contract, we reviewed GKA's reports and related
documentation and inquired of its representatives. Our review, as differentiated
from an audit performed in accordi;lnce with U.S. generally accepted government
auditing standards, was not intended to enable us to express, and we do not

Page 2
express, opinions on TFF's financial statements or conclusions about the
effectiveness of internal control or compliance with laws and regulations. GKA is
responsible for the attached auditors' reports dated October 30, 2018, and the
conclusions expressed in the reports. However, our review disclosed no instances
where GKA did not comply, in all material respects, with U.S. generally accepted
government auditing standards.
Should you have any questions, please contact me at (202} 927-0009, or a
member of your staff may contact Catherine Yi, Manager, Financial Audit, at
(202} 927-5591.
Attachment

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1920 L Street, NW
Suite 425
Washington, D C 20036
Tel: [phone]
www.gkacpa.com

& Consultants

Treasury Forfeiture Fund
ACCOUNTABILITY REPORT
Fiscal Year 2018
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C.

Member of the .APmica11 !11slit11te ofCertified PHb/ic Acco1111tat1/s

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Message from the Director
I am pleased to present the fiscal year (FY) 2018 Accountability Report for the Treasury Forfeiture Fund (the
Fund). While highlighting the Fund's financial and operational performance over the past year, this report also
focuses on some of the significant investigative achievements of our pa1ticipating law enforcement agencies
this year. FY 2018 was another challenging year with a permanent rescission of $1.1 billion as part of the
Consolidated Appropriations Act of 2018 (P.L. 115-141). Additionally, $150 million was sequestered as part
of the government-wide sequestration order. In terms of overall revenue, FY 2018 was another highly
successful year for the Jaw enforcement bureaus participating in the Treasury Forfeiture Fund, with earned
revenue of $1.3 billion deposited to the Fund.
The continued high-impact performance of the Fund reflects the ongoing hard work of our law enforcement
bureaus as well as Fund management's emphasis on major case initiatives, asset forfeiture program training,
and a focused approach regarding our performance measure, which gauges revenue from high-impact cases.
The mission of the Fund is to affirmatively influence the consistent and strategic use of asset forfeiture by our
law enforcement bureaus to disrupt and dismantle criminal enterprises. It is our view that the greatest damage
to criminal enterprises can be achieved through large forfeitures; hence we have set a target level of 80 percent
of our forfeitures to be high-impact, i.e., cash forfeitures equal to or greater than $100,000. Thjg target level is
up from 75 percent set for FY 2010 and prior years. For FY 2018, our member bureaus exceeded the target
with a performance level of94 percent.
In FY 2018, we continued prioritizing the strategic use of forfeited funds to enhance our participating
agencies' infrastructure and capabilities while supporting high-impact financial investigations. These
capabilities are particularly critical for highly complex Third Party Money laundering (3PML) investigations
aimed at dismantling the financial networks of major criminal enterprises. In union with the 3PML initiative,
the Fund hosted a multi-agency seminar on 3PML issues in Charlotte, NC. The seminar specifically
highlighted the importance of the partnership between Jaw enforcement agencies and financial institutions in
combating money laundering, and it featured a number of speakers representing major banks' Anti-Money
laundering units. The topics also included investigations targeting non-compliant financial institutions, TFFfunded resources available to support our member agencies' 3PML cases, and recent investigative and
prosecutorial successes in this investigative area.
This fiscal year, the Fund was able to provide $47.1 million in Strategic Support (SS) funding to its member
agencies for their priority initiatives. This funding enabled Treasury Forfeiture Fund agencies to advance their
operational capabilities to include new cutting edge technology, IT systems, and big data analysis tools in
order to respond in real time to emerging criminal threats.
The Treasury Forfeiture Fund continues in its capacity as a successful multi-Departmental Fund representing
the interests of law enforcement components of the Departments of the Treasury and Homeland Security.
Member bureaus include the Internal Revenue Service's Criminal Investigation (IRS-CI), the U.S. Secret
Service (USSS), Immigration and Customs Enforcement (ICE), and Customs and Border Protection (CBP).
The U.S. Coast Guard (USCG) continues its close working relationship with the legacy Customs bureaus. We
look forward to another successful year in FY 2019.

John Farley, Director
Treasury Executive Office for Asset Forfeiture
U.S. Department of the Treasury

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Table of Contents
Section I: Overview
Profile of the Treasury Forfeiture Fund ................................... ............................................ 1
Strategic M ission and Vision ......................... ...................................................................... 1
Case Highlights ....................................................................................................................2
Program and Fund Highlights .............................................................................................. 9
Program Performance ........................................................................................................ 10
Financial Statement High li ghts ..................... ..................................................................... 12

Section II: Independent Auditor's Reports
Independent Auditor's Repott on Financial Statements .................................................... 16
Independent Auditor's Report on Internal Control over Financial Reporting ................... 19
Independent Auditor's Repo1t on Compliance and Other Matters ....................................21

Section ID: Financial Statements and Notes
Financial Statements:
Balance Sheets .............................................................................................................23
Statements ofNet Cost. ................................................................................................24
Statements of Changes in Net Position .......................... ................................ ..............25
Statements of Budgetary Resources ............................................................................. 26
Notes to Financial Statements ................. ..................................................................... 27

Section IV:
Required Supplemental Information ........................................................................................ 45

Section V:
Other Accompanying Information ...........................................................................................47

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Treasury Forfeiture Fund
FY 2018 Management Overview

Profile of the Treasury Forfeiture Fund
The Treasury Forfeiture Fund (the Fund) is the receipt account for the deposit of non-tax forfeitures made
pursuant to laws enforced or administered by law enforcement bureaus that participate in the Treasury
Forfeiture Fund. The Fund was established in October of 1992 as the successor to the Forfeiture Fund of
the United States Customs Service. The Fund is a "special receipt account." This means the Fund can
provide money to other federal entities toward the accomplishment of a specific objective for which the
recipient bureaus are authorized to spend money and toward other authorized expenses. The use of Fund
resources is governed by law, policy and precedent as interpreted and implemented by the Department of
the Treasury, which manages the Fund. A key objective for management is the long-term viability of the
Fund to ensure that there are ongoing resources to support member-bureau seizure and forfeiture activities
well into the future. The emphasis of Fund management is on high impact cases that can do the most
damage to criminal infrastructure.
The Treasury Forfeiture Fund continues in its capacity as a multi-Departmental Fund, representing the
interests of law enforcement components of the Departments of Treasury and Homeland Security. Our
member bureaus include the Internal Revenue Service' s Criminal [nvestigation (IRS- CI), the U.S. Secret
Service, Immigration and Customs Enforcement (ICE), and Customs and Border Protection (CBP). The
U.S. Coast Guard continues its close working relationship with the legacy Customs bureaus and
functions in a member-bureau capacity.
The Treasury Executive Office for Asset Forfeiture (TEOAF), which provides management oversight of
the Fund, falls under the auspices of the Under Secretary for Terrorism and Financial Intelligence.
TEOAF' s organ izational structure includes a Director, Deputy Director, Legal Counsel, and three
Assistant Directors for; Financial Management, Policy & Administration, and Strategic Planning.
Functional responsibilities are delegated to various team leaders. TEOAF is located in Washington, D.C.,
and currently has 28 authorized full time equivalent positions.

Strategic Mission
The mission of the Treasury Forfeiture Fund is to affirmatively influence ·the consistent and strategic use
of asset forfeiture by law enforcement bureaus that pa1ticipate in the Treasury Forfeiture Fund to disrupt
and dismantle criminal enterprises.

Strategic Vision
Fund management works to focus the asset forfeiture program on strategic cases and investigations that
result in high-impact forfeitures. Management believes this approach incurs the greatest damage to
c riminal organizations while accomplishing the ultimate objective - to disrupt and dismantle criminal
enterprises.

SECTI ON I -OVERVIEW

Case Highlights
The following case highlights are intended to give the reader an idea of the types of investigative cases
worked by the Fund 's law enforcement bureaus during FY 2018 that resulted in the seizure and forfe iture
of assets. Such cases as those profiled below are consistent with the Strategic Mission and Vision of the
Treasury Forfeiture Program, which is to use high-impact asset forfe iture in investigative cases to disrupt
and dismantle criminal enterprises.

Immigration and Customs Enforcement (ICE)
Department of Homeland Security
and
Internal Revenue Service, Criminal Investigation (IRS-CI)
Department of the Treasury

Rabobank Forfeits $318,701,259 as Part of Guilty Plea
Information included in the following forfeiture article is attributed to: Information provided by the HSHCE and IRS-CI
Liaisons to TEOAF; U.S. Attorney's February 7, 2018 press release entitled, " Rabobank NA Pleads Guilty, Agrees to Pay Over
$360 Million" ; TEOAF internal records.

On February 7, 2018, Rabobank National Association (Rabobank) pleaded guilty to a felony conspiracy
charge for impairing, impeding and obstructing its primary regulator, the Department of the Treasury's
Office of the Comptroller of the Currency (the OCC) by concealing deficiencies in its anti-money
laundering (AML) program and for obstructing the OCC' s examination of Rabobank. Rabobank agreed
to forfeit $368,701 ,259 as a result of allowing illicit funds to be processed through the bank without
adequate Bank Secrecy Act (BSA) or AML review. Of that sum, $318,701,259 was forfeited to the
Treasury Forfeiture Fund. The OCC imposed a $50,000,000 civil money penalty, which was credited
towards the forfeiture agreement.
Rabobank pleaded guilty to conspiracy to defraud the United States and to obstruct an examination of a
financ ial institution. In pleading guilty, Rabobank admitted to conspiring with several former executives
to defraud the United States by unlawfully impeding the OCC' s ability to regulate the bank, and to
obstruct an examination by the OCC of its operations throughout California, including its Calexico and
Tecate bank branches. Rabobank admitted that its deficient AML program allowed hundreds of mill ions
of dollars in untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural bank
branches in Imperial County, and transferred via wire transfers, checks, and cash transactions, without
proper notification to federal regulators as required by law. Knowing these failures, during the OCC's
2012 examination of Rabobank's BSA/AML compliance program, Rabobank executives actively sought
to hide.and minimize the deficiencies in its AML program in an effort to deceive the regulators as to its
true state in hopes of avoiding regulatory sanctions that had previously been imposed on Rabobank in
2006 and 2008 for nearly identical failures.
2

TREASUR Y FORFEITURE FUND ACCOUNTABILITY REPORT - FISCAL YEAR 2018

Accord ing to court documents, Rabobank received regular alerts of transactions by "High-Risk"
customers, or through accounts deemed to be "High-Risk," and that had been the subject of prior SARs
filed by Rabobank. These High-Risk customers and accounts included those controJled and managed by
Mexican businesses, nonresident aliens, and U.S.-based accountholders who transacted hundreds of
mi ll ions of dollars in untraceable cash, sourced from Mexico and elsewhere, into and through Rabobank
accounts.
According to court documents, Rabobank also created and implemented policies and procedures to
prevent adequate investigations into these suspicious transactions, customers, and accounts. Among those
po licies and procedures was Rabobank's "Verified List" - a policy that effectively resulted in Rabobank
executing an end-run around the BSA/AML and SAR requirements. In paiticular, Rabobank instructed
its employees that if a customer was on the "Verified List," no further review of that customer' s
transactions was necessary -- even if the transactions generated an internal alert, or the customer's activity
had changed dramatically from when it was "verified." Rabobank 's BSA/AML staff were fu1ther
instructed to aggressively increase the number of bank accounts on the Verified List, as evidenced by the
fact that in 2009, Rabobank had less than IO " verified" customers, but by 2012, as a result of its defective
BSA/AML policies and procedures, it had more than 1,000 " verified" customers.
Add itionally, Rabobank admitted fail ing to monitor and conduct adequate investigations into t hese
transactions and submit SARs to the Financial Crimes Enforcement Network (FinCEN), as required by
the BSA. Rabobank's border branches, including those located in Calexico and Tecate in Imperial
County, California, were heavily dependent on cash deposits from Mexico. Rabobank knew that millions
of dollars in cash deposits at these branches were likely tied to illicit conduct. In patticular, the Calexico
branch, located about two blocks from the U.S.-Mexico border, was the "highest performing" branch in
the Imperial Valley region due to the cash deposits from Mexico. Throughout the relevant time period,
Rabobank continued this practice of soliciting cash-intensive customers from Mexico and elsewhere, all
the while employing the foregoing inadequate BSA/AML policies and procedures to address the obvious,
known "High R isks" associated with these accounts, transactions, and transactors.
When the OCC began conducting its periodic examination of Rabobank in 2012, Rabobank, acting
through three of its executives, agreed to, among other th ings, knowingly obstrnct the OCC's
examination. Rabobank responded to the OCC ' s February 2013 initial report of examination with false
and misleading information about the state of Rabobank 's BSA/AML program. Rabobank also made
false and mislead ing statements to the OCC regarding the existence of reports developed by a third-party
consultant, which detailed the deficiencies and resulting ineffectjveness of Rabobank' s BSA/AML
program.
To further conceal the inadequate nature of its BSA/AML program and to avoid "others contradicting our
findings" and statements to the OCC, Rabobank demoted or terminated two RNA employees who were
raising questions about the adequacy of Rabobank' s BSA/AML program .
The investigation was conducted by HST, IRS-CI, and the Financial Investigations and Border Crimes
Task Force (FIBC), a multiagency Task Force based in San Diego and Imperial County. The investigation
was funded by the Treasury Executive Office of Asset Forfeiture (TEOAF) and occurred parallel to
regu latory investigations by the OCC, Office of General Counsel, and FinCEN ' s Enforcement Division.
SECTION I - O VERVIEW

3

Internal Revenue Service, Criminal Investigation (IRS-CI)
Department of the Treasury
New York Man Sentenced to 87 Months and Forfeits $1,624,172 for Multi-State Biodiesel Fraud
Sch eme
Information included in the following article is attributed to US Attorney's February 6, 2018 press release entitled, "New York
Man Sentenced to 87 Months for Multi-Slate Biodiesel Fraud Scheme," TEOAF records, and from information provided by the
IRS-CI Liaison to TEOAF.

Andre Bernard, of Mount Kisco, New York, pleaded guilty for his participation in a multi-state scheme to
defraud biodiesel buyers and U.S. taxpayers by fraudu lently selling biodiesel credits and fraudulently
claiming tax credits.
According to his plea, Bernard conspired with Thomas Davanzo, of Estero, Florida, Robert Fedyna, of
Naples, Florida, and Scott Johnson of Pasco, Washington in a scheme to defraud biodiesel cred it (known
as "RJN" credits) buyers and U.S. taxpayers. The conspiracy involved having Gen-X Energy Group (GenX and its subsidiary, Southern Resources and Commodities (SRC), generate fraudulent RINs and tax
credits muhiple times on the same material.
Bernard and his co-conspirators operated several shel l compan ies that claimed to purchase and sell the
renewable fue l. The co-conspirators also cycled the funds through these shell companies' bank accounts
to perpetuate the fraud scheme and conceal its proceeds.
From March 2013 to March 2014, the co-conspirators generated at least 60 million RINs that were based
on fuel that was either never produced or was merely re-processed at the Gen-X or SRC facilities. The coconspirators received at least $42 million from the sale of these fraudulent RINs to third parties. fn
addition, Gen-X received approximately $4,360,724.50 in false tax credits for this fuel.
U.S . District Judge Sherri Polster Chappe ll sentenced Andre Bernard to seven years and three months in
federal prison for his role in a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers by
fraudu lently selling biod iesel credits and fraudulently claiming tax credits. As pa1t of his sentence, the
Court also entered a money j udgment in the amount of $ 10,500,497.92, the proceeds Bernard personally
received as a result of the charged criminal conduct.
On November 29, 2017, a Default Judgment was issued for bank accounts previously seized worth
$1,624,172.53. Those funds were received and processed by the TFF on January 10, 2018.
Internal Revenue Service Crim inal Investigations (IRS-Cf) was joined in this case by the U.S. Secret
Service and the Environmental Protection Agency, Criminal Investigation Division .

4

TREASUR Y FORFEITURE FUND ACCOUNTABILITY REPORT-FISCAL YEAR 2018

United States Secret Service (USSS)
Department of Homeland Security
Ma n who defrauded Hmong Community is Sentenced to 87 Months in Prison, Forfeits $1,612,451
Information included in the following forfeiture article is attributed to: October 11 , 2017 DOJ press release entitled, "Seng
Xiong Sentenced To 87 lvfonths In Prison For Defrauding J'vfembers Of The Hmong Community''; information provided by the
USSS Liaison to TEOAF'; TEOAF internal records.

In September 2015, the St. Paul Police Department contacted the U.S. Secret Service Minneapolis Field
Office requesting assistance regard ing the investigation of a large scale nationwide wire fraud scheme
targeting an elderly Southeast Asia ethnic group known as the Hmong people living in approximately 18
known states in the U.S . T he primary criminal schemes date back to at least October 2014 and involved
Seng Xiong purporting to be leaders of an organ ization called the "Hmong Tebchaws Organization" or
" International Fund fo r Hmong Development."
Through a series of YouTube videos and nationwide conference calls, Xiong promoted his scheme in the
Hmong language to sol icit e lderly members of the Hmong community to invest money in the range of
$3,000 - $5,000 or more in month ly payments to bank accounts in the name of Seng Xiong. The suspects
promised victims that they would use the money to issue land rights of up to 10 acres in a future proposed
Hmong Country they c laim to be developing with the assistance of the United Nations (UN) and the
approval of the White House. Additional promises for the in itial investment of $3,000 - $5,000 included
rece iving a house, healthcare, free education, as well as possible positions in the future cabinet of the
government and other benefits.
T he case went to trial, and Seng Xiong was convicted of wire fraud and mail fraud, and was sentenced to
87 months in prison. On December 20, 2017, a final order of fo rfe iture was signed in the District of
Minnesota for $1 ,612,451.84.

Coast Guard
Department of Homeland Security
Coast Guard Cutter Offloads Over 18 Tons of Cocaine
information included in the following forfeiture article is attributed to: United States Coast Guard (USCG) news release dated
March 20, 2018 entitled: "Coast Guard offloads 36,000 lbs of cocaine seized ji-om Eastern Pacific Ocean," and from
information provided by the Coast Guard Liaison to TEOAF.

On March 20, 2018, the U.S . Coast Guard offloaded approximately 36,000 p9unds of cocaine, with an
estimated va lue of $500 m ill ion. The seized narcotics were the resu lt of 17 interdictions of suspected
smuggling vessels off the coasts of Central and South America between early February and early March
of 2018.
As part of its Western Hemisphere Strategy, the Coast Guard has increased its presence in the Eastern
Pacific Ocean and Caribbean Basin. During interd ictions in international waters, a suspect vessel is
SECTION I - OVERVIEW

5

initially located and tracked by U.S. and allied, military or law enforcement personnel. Coast Guard
members conduct the interdictions, including the actual boarding.
In add ition to Coast Guard crews, numerous U.S. agencies from the Departments of Homeland Security,
Defense and Justice along with all ied and international pa1tner agencies are involved in the effort to
combat transnational organized crime.
The bulk offload consisted of seized drugs from 17 interdictions by crews aboard the following Coast
Guard cutters:
•
•
•
•
•

Coast Guard
Coast Guard
Coast Guard
Coast Guard
Coast Guard

Cutter Venturous, one case, estimated 2,877 pounds seized.
Cutter Bear, three cases, estimated 9,016 pounds seized.
Cutter Diligence, three cases, estimated 3902 pounds seized.
Cutter Bertholf, four cases, estimated 5,103 pounds seized.
Cutter Harriet Lane, six cases, estimated 15,434 pounds seized.

"Th is offload by the Bettholf represents the great work being conducted in the Eastern Pacific combating
the transnational organ ized crime groups, behind the drug trade which spreads instability, fear and harm
to people, communities and entire nations," said Rear Adm . Todd Sokalzuk, the 11 th Coast Guard District
commander, who oversees the law enforcement phase of counter-smuggling operations in the Eastern
Pacific region. "Thanks in part to the hard work and ded ication of the brave crew men and women of the
Bertholf, and other ships on patrol, we' re seizing record amounts of cocaine for the third year in a row."

Figure 1: Pallets containing approximately 18 tons of seized cocaine.

6

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

Coast Guard unloads $721 million in cocaine seized since November in San Diego
Information included in the following forfeiture article is attributed to: United States Coast Guard (USCG) news release dated
January 25, 2018 entitled: "Coast Guard ofjloads $72 I million worth ofcocaine in San Diego," and from information provided
by the Coast Guard Liaison to TEOAF.

In San Diego on January 25, 2018, the U.S. Coast Guard Cutter Stratton offloaded more than 47,000
pounds of cocaine worth over $72 1 miJlion. U.S. and Canadian forces operating in international waters off
the coast of Central and South America seized the cocaine in 23 separate interdictions in the eastern
Pacific Ocean.
Senior U.S. and Canadian officials discussed new tactics used by transnational organized crime groups
and to highlight international cooperation in combating the threat posed by these dangerous groups. U.S.
Coast Guard personnel currently assigned to Cutter Stratton turned the narcotics over to federal agents fo r
investigation, prosecution and, ultimately, destruction.
"The threat of transnational organized crime is a danger no one ship, agency, country or person can
address alone," said Vice Adm. Fred Midgette, commander, U.S. Coast Guard Pacific Area. "We stand
alongside our interagency and international partners resolved in a shared purpose to protect those harmed
by these dangerous drugs and bring the criminals who smuggle them to j ustice."

In a three-day period, the crew of Cutter Stratton stopped two low profile go-fast boats and seized more
than 5,800 pounds of cocaine worth almost $78 miJlion. ln a period of less than five months, the Coast
Guard stopped five suspected drug smuggling boats and seized a total of over 12,000 pounds of cocaine
worth $165 million.
Other interdiction seizures from the offload included:
•
Coast Guard Cutter Steadfast, five cases, 12,000 pounds
•
Coast Guard Cutter Mohawk, five cases, 6,700 pounds
•
Coast Guard Cutter Northland, :five cases, 10,300 pounds
•
Coast Guard Cutter Thetis, two cases, 3,100 pounds
•
Coast Guard Cutter Stratton, five cases, 12,000 pounds
•
HMCS Nanaimo, one case, 3,300 pounds
Fifteen of the seizures represented in the offload were taken from go-fast boats, and an additional four
were from " low-profile go-fast boats." Low-profile go-fast boats, a variant design from traditional go-fast
boats, ride low in the water to reduce their radar signature, have multiple outboard engines to allow them
to travel at high speeds and are painted to blend in with the water to avoid detection from military and law
enforcement authorities operating in the region.

SECTION 1- OVERVIEW

7

Figure 2: Seized pallets of cocaine on board the Stratton.

The Stratton was equipped with at least one unmanned aerial vehicle known as a ScanEagle that can be
used on long patrol flights and fitted with infrared and telescope cameras to scan the ocean for vessels.
"The drones are a game changer for us because they can stay up so long and they have a very wide swath
of the water they can look at," Midgette said. "When you are trying to find one of these pangas or lowprofile vessels, it is hard to spot them on the water. The radars don't pick them up well if they are painted
correctly.... They absolutely have increased our effectiveness."

8

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT-FISCAL YEAR 2018

Program and Fund Highlights
The Treasury Forfeiture Fund is a "special receipt account." Such accounts represent federal fund
collections earmarked by law for a specific purpose. The enabling legislation for the Treasury Forfeiture
Fund (31 U.S.C. § 9705, Public Law 114-22) defines those purposes for which Treasur y forfeiture
revenue may be used . Once property or cash is seized, there is a forfeiture process. Upon forfe iture,
seized currency, initially deposited into a suspense account, or holding account, is transferred to the Fund
as forfeited revenue. Once forfeited, physical properties are sold and the proceeds are deposited into the
Fund as forfeited revenue. It is this fo1feiture revenue that comprises the budget authority for meeting
expenses of running Treasury' s forfeiture program.
Expenses of the Fund are set in a relative priority so that unavoidable or "mandatory" costs are met first
as a matter of policy. Expenses may not exceed revenue in the Fund. The Fund has several different
spending authorities. Each of them is described below.

Mandatory Authority
The mandatory authority items are generally used to meet "business expenses" of the Fund, including
expenses of storing and maintaining seized and fo1 ited assets, valid liens and m01tgages, investigative
fe
expenses incurred in pursuing a seizure, information and inventory systems, and certain costs of local
police agencies incurred in joint law enforcement operations. Following forfeiture, equitable shares are
paid to state and local law enforcement agencies that contributed to the seizure activity at a level
proportionate to their involvement.
It is a strategic goal of the Fund to emphasize and monitor high impact forfeitures. To make significant
fo1feitures requires longer, more in-depth investigations. To this end, Fund management emphasizes the
use of mandatory funding authorities that fuel large case initiatives. These authorities include the
Purchase of Evidence and Information, expenses associated with Joint Operations, Investigative Expenses
Leading to Seizure, and Asset ldentification and Removal Groups. In recent years, funding provided to
computer forensic investigative tools has yielded high impact results.

Secretary's Enforcement Fund
The Secretary's Enforcement Fund (SEF) is derived from equitable shares received from the Justice
Department 's Forfeiture Fund for work done by law enforcement bureaus participating in the Treasury
Forfeiture Fund leading to Justice forfeitures. SEF revenue is available for federal law enforcement
purposes of any T reasury law enforcement organization or law enforcement bureau that participates in the
Treasury Forfeiture F und. In FY 2018, the Fund expensed just over $37 million in SEF authority as
compared to $5.9 mill ion in FY 2017, an increase of $31.1 million.

Strategic Support
Strategic Support (formerly Super Surplus) represents the remaining unobligated balance after an amount
is reserved for Fund operations in the next fisca l year. Strategic Support can be used for any federal law
enforcement purpose. In FY 2018, the fund expensed 47.1 million in Strategic Suppo1t authority as
compared to $39.5 million in FY 2017.

SECTION I - OVERVIEW

9

Program Performance

Strategic View
Fund management continues to focus on strategic cases and investigations that result in high-impact
forfeitures. We believe this approach affects the greatest damage to criminal organizations while
accomplishing the ultimate objective - to disrupt and dismantle criminal activity. Generally, significant
forfeitures requ ire longer, more in-depth investigations. To this end, Fund management emphasizes the
use of mandatory funding authorities that fuel large case initiatives including Purchase of Evidence and
Information, expenses associated with Joint Operations, Investigative Expenses Leading to Seizure, Asset
Identification and Removal teams and state-of-the-art Computer Forensics capability.
FY 2018 was a successful revenue year by our member bureaus and was another successful year in
equitable share deposits received from the Department of Justice (DOJ) forfeiture fund for forfeitures in
which one or more of our member bureaus played a role. Equitable shares received totaled $49.6 million
in FY 2018 as compared to $14.2 million in FY 2017. In addition, the Fund continues to support record
levels of sharing of federal forfeitures with the state and local and foreign governments that contributed to
the successful seizure and forfeiture activity of the Fund. The Fund expensed $138.5 million for state and
local and foreign equitable sharing expenses in FY 2018 as compared to $67.3 million in FY 2017. These
are important resources afforded by policy of the Treasury Forfeiture Fund to protect and preserve the
valuable working relationships between our federal law enforcement bureaus and the critically important
state, local and foreign law enforcement agencies that work with them in an investigative capacity day-. n
i
and day-out.

Strategic Mission and Goal
The mission of the Treasury Forfeitu re Fund is to affirmatively influence the consistent and strategic use
of asset forfeiture by law enforcement bureaus to disrupt and dismantle criminal enterprises. The goal of
the Treasury Forfeiture Fund is to support the Department of the Treasury' s national asset forfeiture
program in a manner that results in federal law enforcement's continued and effective use of asset
forfeiture as a high-impact law enforcement sanction to disrupt and dismantle criminal activity. To
achieve our mission and goal, the program must be administered in a fiscally responsible manner that
seeks to minimize the administrative costs incurred, thereby maximizing the benefits for law enforcement
and the society it protects.

Multi-Departmental Fund
The Treasury Forfeiture Fund continued in its capacity as a multi-Departmental Fund in FY 2018,
representing the interests of law enforcement components of the Departments of the Treasury and
Homeland Security. FY 2018 posed continued management challenges including oversight of significant
In
general property contract expenses associated with an increasingly complex forfeiture program.
addition, commensurate with the successfu l revenue year, there were significant expenses incurred by the
bureaus to run their programs. In the midst of this period of growth and change, the Fund's family of law
enforcement bureaus continued their hard work of federal law enforcement and the application of asset
forfeiture as a sanction to bring criminals to justice.

IO

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT-FISCAL YEAR 2018

FY 20l8 was another robust year with regular revenue of $1.3 billion from all sources, as compared with
FY 2017 revenue of $507.7 million. As we enter fiscal year 2019, the Fund remains focused on suppo1t
for strategic investigative initiatives that will have the greatest impact on national and international
criminal enterprise including valuable training and investigative expense funding which emphasizes highimpact cases.

Performance Measure
In FY 2018, the Fund measured performance through the use of the following performance measure:
Percent of forfeited cash proceeds resulting from high-impact cases. This measures the percentage of
fotfeited cash proceeds resulting from high-impact cases (those with currency seizures in excess of
$100,000). Focusing on strategic cases and investigations which result in high-impact seizures will affect
the greatest damage to criminal organizations while accomplishing the ultimate objective - to disrupt and
dismantle criminal activity.

Results
The Fund performance measure and result for FY 2018 is as follows:

FY 2017
Actual

Performance Measure
Percent of forfeited cash proceeds resulting from
high-impact cases

82%

FY 2018
Target

FY 2018
Actual

80%

94%

A target of 75 percent high-impact cases was set for FY 2010 and prior years since inception of the
performance measure in FY 2002. However, for FY 2011, the target was increased to 80 percent,
reflecting member bureaus' prior success in meeting the previous target. This is a fixed target for the
Fund designed to afford our law enforcement bureaus the opportunity to undertake smaller seizure activity
that is important to the overall federal law enforcement mission. The final percentage for FY 2018 was
94 percent, exceeding the new target set in 2011. This compares with our FY 2016 and FY 2017
performance of 89 percent and 82 percent, respectively.
The performance of our member bureaus is excellent and reflects Fund management's longstanding
emphasis on high-impact forfeiture strategies as well as the use of Fund authorities to assist member
bureaus with larger cases that may take longer or require additional resources not otherwise available.
This measure was put into effect beginning with FY 2002, and in all but 3 years, member bureaus met the
target for high-impact forfeitures.
This measure is calculated by dividing the total amount of forfeited cash proceeds from cases greater than
$100,000 by the total amount of forfeited cash proceeds for all cases.

SECTION!- OVERVIEW

11

Financial Statement Highlights
The following provides a brief explanation for each major section of the audited financial statements
accompanying this report for the fiscal year ended September 30, 2018.
These statements have been prepared to disclose the financial pos ition of the Fund, its net costs, changes
in net position, and budgetary resources, pursuant to the requirements of the Chief Financial Officers Act
of 1990 and the Government Management Reform Act of 1994 (GMRA) . While the financial statements
have been prepared from the books and records of the Fund in accordance with the formats prescribed by
the Office of Management and Budget, the statements are different from the financial reports used to
monitor and control budgetary resources that are prepared from the same books and records and are
subsequently presented in federal budget documents. Further, the notes to the financial statements and the
independent auditor's opinion and reports on internal control over financial reporting, and compliance and
other matters are also integral components to understanding fully the financial highlights of Fund
operations described in this chapter.

Statements: Changes in Net Position
Follows are brief highlights from the Statements of Changes in Net Position for FY 2018 and 2017.

Net Position - End of Year.
For FY 2018, the Net Position for the Fund at the end of the year, an
indicator of the future capability to support ongoing operations of the Fund, totaled $1 .4 billion versus
$2.2 bi ll ion at the end of FY 2017. Both years closed with a strong and viable net position with which to
commence the next fiscal year's operations.
Total Gross Non-Exchange Revenues. This line item on the Statements of Changes in Net Position is
the best indicator of regular "business-type" income of the account on an annual basis. For FY 2018, the
Fund closed with $1.3 billion in Gross Non-Exchange Revenues and a total of $507.7 million for FY
2017, reflecting two, highly successful revenue years for the Treasury Forfeiture Fund.
Proceeds from Participating with other Federal Agencies. This line item on the Statements of
Changes in Net Position indicates revenue earned from the participation of Treasury Forfeiture Fund law
enforcement bureaus in the seizures leading to forfeiture of bureaus that participate in the Department of
Justice Assets Forfeiture Fund or with the forfeiture fund of the U.S. Postal Service (Postal Service).
As of the close of FY 2018, Treasury Forfeiture Fund bureaus earned a total of $49.6 million in revenue
from participation in the seizures leading to forfejttu·e of the Justice and Postal Service fo1feiture funds as
compared to a total of $14.2 mi llion during FY 2017. Fund management continues to work with the
Department of Justice to identify delays and/or explain downward adjustments to percentages associated
with equitable sharing payments owed to the Treasury Forfeiture Fund. This revenue affords Treasury
management significant funding flexibil ities for our participating agencies as the authority is broad and
not confined to funding program costs; it can be used for any law enforcement purpose of our
participating bureaus. The allocation of this type of revenue for FY 2017 and FY 2018 was restricted by
the need to meet enacted budget rescissions, sequestrations, and permanent reductions.

Net Cost of Operations. For FY 2018, the Net Cost of Operations totaled $239.4 million, up from
$221.5 million in FY 2017.

1
2

TREASURY FOR FEITURE FUND ACCOUNTABILITY REPORT - FISCAL YEAR 2018

Investment Interest Income. The Fund is authorized to invest cash balances in Treasury securities. As
of September 30, 2018, investments totaled $2.6 billion as compared with $3.1 billion invested as of
September 30, 2017. During FY 20 18 investment income totaled $47.8 million, as compared to $19.1
million in FY 20 17.
Equitable Sharing with Federal, State and Local Governments and Foreign Countries. Each yeaJ:,,
the Fund E_ays tens of mi llions of dollars to state and local law enforcement agencies, and foreign
governments, for their participation in seizures that lead to forfe itures of the Treasury Forfeiture Fund.
State and local law enforcement agencies can use these resources to augment their law enforcement
budgets to fi ght crime in their jurisdictions. Without these funds, budgets of the local munici_ealities
would be taxed to provide these im octant resources or the need would go unmet. During,..f.Y 2018 e
Fund shared a total of $156. 7 mill ion with other federal, state and local law enforcement agencies, and
another $627 thousand with foreign countries. This compares with $188.9 million shared with other
federal, state and local law enforcement agencies during FY 2017 and $2.9 million and with foreign
countries.
Victim Restitution. During FY 20 l 8, the Fund paid $524.8 million in restitution to victims as compared
to $77.2 million in FY 2017.
Summary of Statements of Changes in Net Position. The Fund closed with a strong net position in FY
2018. Management will continue to emphasize high-impact cases by participating law enforcement
bureaus. The FY 2018 performance with forfeiture revenue earnings of $1.3 billion from all sources,
while exceed ing the new higher performance measure target rate of high-impact cases, is truly a credit to
the dedicated law enforcement personnel of our participating law enforcement bureaus.
Statements: Net Cost
Costs of the Forfeiture Program - Intra-governmental. After revenue is applied toward policy
mandates such as equitable sharing, shown in the Statements of Changes in Net Position as negative
revenue or applied non-exchange revenue, the remaining financing supports the law enforcement
activities of the Fund and pays for the storage of seized and forfeited property and sales associated with
the disposition of fo rfeited property.
On the Statements of Net Cost, the Net Cost of Operations totaled $239.4 million in FY 2018, up from
$221.5 million in FY 2017.

Intra-governmental. This cost category totaled $166.9 million in FY 2018, up from $154.8 million in FY
2017. The amounts represent costs incurred by pa1ticipating bureaus in running their respective f0tfeiture
programs.
National Seized Property Contracts and Other. One of the largest program costs of the Fund is the
storage, maintenance and disposal of real and personal property. During FY 2018, general property was
maintained by AECOM/URS. Real prope1ty was maintained by the CWS Asset Management & Sales
Group, both contracts of the Department of the Treasury. In FY 2018, expenses of these contracts, which
comprised over 99% of the total expenses for this line, including other contracts, totaled $57.0 million, up
from $51.0 million expensed in FY 201 7.

SECTION 1- OVERVIEW

13

Statements: Budgetary Resources
As of the end of FY 2018, the Fund has estimated future expenditures and commitments of $434.6 million
(reductions) which may need to be paid in future years. These reductions relate to remissions, victim
restitution and equitable sharing. These future obligations will be funded from the unobligated balance of
$825.2 million as reported on the SF-133" Report on Budget Execution" for FY 2018. The unobligated
balance less reductions would result in $390.6 million remaining at the end of FY 2018.

Balance Sheet
Assets, Liabilities and Net Position
Total assets of the Fund decreased in FY 2018 to $3.4 billion, down from $4.0 billion in FY 2017, a
decrease in asset value of 15 percent. If seized currency and other monetary assets, which are assets in
the custody of the government but not yet owned by the government, are backed out of both figures, the
adjusted total assets of the Fund decreased to $1.7 billion in FY 2018, down from $2.4 billion in FY 2017.
During FY 2018, total liabilities of the Fund were $2.0 billion, comparable to the $1.7 billion in FY 2017.
If seized currency and other monetary assets, which are also shown as a liabi lity because they are not yet
owned by the government, are backed out of both figures, the adjusted total liabilities of the Fund
increases to $260.1 million in FY 2018, up from $190.8 million in FY 2017.
With decreasing asset amounts and increasing liabilities, the Cumulative Results of Operations, i.e.,
retained earnings, decreased at the end of FY 2018 to a total of $1.4 billion, down from $2.2 billion at the
end of FY 2017.

Financial and P rogram Performance - What is needed and planned. 0MB Circular A-136, Financial
Reporting Requirements, requires that agencies include an explanation of what needs to be done and what
is being planned to improve financial or program performance. In this regard, Fund management
continues to work closely with member bureaus, through the financial planning process, to review
revenue and expense projections during the operating year.
Aud itor's Findings
FY 2018 Audit. The Fund 's independent auditors have given the FY 2018 financial statements an
Unmodified Opinion with no material weaknesses or significant deficiencies in internal control over
financial reporting identified. The auditor's report on compliance and other matters disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing Standards
or 0MB Bulletin No. l 9-0 I , Audit Requirements for Federal Financial Statements.

Summary of Financial Statement Highlights
Net Position. To summarize, Fund management concluded a highly productive FY 2018 "in the black,"
with the necessary resources to commence the business of the asset forfeiture program for FY 2019. Even
though there was a rescission of $1.l billion and a sequestration of$150 million, Fund management was
able to dee.la.re Strategic Support funding from FY 2018 operations, and will work to recognize the hard
work of our participating agencies in the al location of these resources.

14

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT - FISCAL YEAR 2018

A Look Forward

Fund management will continue to work with our large and diverse array of federal law enforcement
bureaus as they undertake increasingly sophisticated methods and global effo1ts to secure the financial
and commercial markets of the nation and the world given the interdependence of financial systems. Our
bureaus support immigration enforcement that is designed to identify illegal smuggling to deter its impact
on the nation ' s financial infrastructu re and to ensure that human smugglers do not harm unsuspecting
victims keen on seeking a new if illegal start in the United States. Tnvestigative initiatives intended to
interrupt the :financial support for terrorism remains a critical part of the work of federa l Jaw enforcement.
Emphasis will continue to be placed on ever-evolving state-of-the-art investigative techniques, highimpact major case initiatives, and training to support these areas of emphasis. This has and will continue
to be the key to the growing success and law enforcement reach of the Treasury Forfeiture Fund.

Improper Payments E limination and Recovery Act (IPERA) and Improper Payments Elimination
and Recovery Improvement Act (!PERIA) Reporting Detail
The improper Payments Elimination and Recovery Act of 2010 (lPERA) requires agencies to review their
programs and activities increasing effo1ts to recapture improper payments by intensifying and expanding
payment recapture audits. All agencies are required to develop a method of reviewing all programs to
identify those that are susceptible to significant erroneous payments. "Significant" means that an
estimated error rate and a dollar amount exceed the threshold of 1.5 percent of program outlays and $10
million of total program or activity payments made during the fiscal year reported or $100 million
regardless of the improper payment percentage of total program outlays.
Currently the Fund conducts an internal review and analysis for its major contracts. The contract activity
is high dollar value for each payment with limited volume. This activity has low risk, but based on the
high dollar value requiring minimal resources, the Fund will conti nue to conduct these internal contract
audits. Based on this analysis, the Fund has determined that recapture audits are not necessary and will
not be implementing them at this time.
T he Improper Payments Elimination and Recovery Improvement Act of 2012 requires agencies to
incorporate the Do Not Pay Initiative (DNP) to further reduce improper payments. The Fund uses the
Death Master File and the System of Award Management as patt of a continuous monitoring process and
post payment review. During FY 2018 and 2017, the Fund reviewed 13,580 and 15,038 payments
totaling $1.036 billion and $649.5 million respectively, and reports less than .Ol % of rPERA or DNP
reportable improper payments.

Lim itations of the Financial Statements. As required by 0MB Circular A-136, Fund management
makes the follow ing statements regarding the limitations of the financial statements:
• The financial statements have been prepared to report the financial position and results of operations
of the entity, pursuant to the requirements of 31 USC § 35 l 5(b).
•

While the statements have been prepared from the books and records of the entity in accordance with
the formats prescribed by 0MB, the statements are in addition to the financial reports used to monitor
and control budgetary resources which are prepared from the same books and records.

•

The statements should be read with the realization that they are for a component of the U.S.
government, a sovereign entity. One implication of this is that liabilities cannot be liqujdated without
legislation that provides resources to do so.
SECTION I- OVERVIEW

15

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SECTION II
INDEPENDENT AUDITOR'S REPORTS

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~

glea,p.c.

-

Certified Public Accountants
& Consultants

Independent A uditor's Report on Financial Statements

www.gkacpa.com
Inspector General
U.S. Department of the Treasury
Washington, D.C.

Report on the Financial Statements
We have audited the accompanying financial statements of the Department of
the Treasury Forfeiture Fund (the Fund), which comprise the balance sheets as
of September 30, 2018 and 2017, and the related statements of net cost,
changes in net position, and budgetary resources for the years then ended, and
the related notes to the financial statements.

Management 's Resp onsibility f or the Financial Statements
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with accounting principles generally
accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free fro m material
misstatement, whether due to fraud or error.

A uditor's Resp onsibility
Our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits in accordance with auditing standards
generally accepted in the United States of America; the standards appl icable to
financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States; and applicable provisions of Office
of Management and Budget (0MB) Bulletin No. 19-01, Audit Requirements
for Federal Financial Statements. Those standards and 0MB Bu lletin No. 1901 requ ire that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.

1920 L Street, NW
Suite 425
Wuhingtoo, DC 200.36
Tel: 202-857-ln?

An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financia l statements. The procedures selected
depend on the auditor's j udgment, includ ing the assessment of the risks of
material misstatement of the financ ial statements, whether due to fraud or
error.
Member ofthe A111erica11 I11stit11te ofCe,tified P11blic At·co1
111ta11ts

In making those risk assessments, the auditor considers internal control relevant to the Fund's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion

In our opinion, the financial statements referred to above present fairly, in aU material respects, the
financial position of the Department of the Treasury Forfeiture Fund as of September 30, 2018 and
2017, and its net costs, changes in net position, and budgetary resources for the years then ended in
accordance with accounting principles generally accepted in the United States of America.
Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the information
in Section I: Overview, and Section TV: Required Supplemental Information be presented to
supplement the basic financial statements referred to in the first paragraph of this repo11. Such
info1mation, although not a part of the basic financial statements, is required by the Federal
Accounting Standards Advisory Board who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which
consisted of inqu iries of management about the methods of preparing the information and comparing
the information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audits of the basic financial statements. We
do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information

Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The information in the Message from the Director, and Section V: Other
Accompanying Information is presented for the purposes of additional analysis and is not a required
part of the basic financial statements. Such information has not been subjected to the auditing
procedures applied in the audits of the basic financial statements, and accordingly, we do not express
an opinion or provide any assurance on it.

SECTION II-INDEPENDENT AUDITOR'S REPORT

17

Other Reporting Required by Government Auditi11g Standards
In accordance with Government Auditing Standards, we bave also issued our reports dated October
30, 20 18, on our consideration of the Fund 's internal contro l over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and
other matters. The purpose of these reports is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion
on internal control over fi nancial reporting or on compliance. Those reports are an integral pa1t of an
audit performed in accordance with Government Auditing Standards in considering the Fund 's
internal control over financial reporting and compliance.

Washington, DC
October 30, 2018

18

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

~
~

gk:'.a,p.c.

yF- - certified Public Accountants

tt..~-----

& Consultants

www.gkacpa.com

Independent Auditor's Report on Internal Control over Financial
Reporting
Inspector General
U .S. Department of the Treasury
Washington, D.C.
We have audited, in accordance with auditing standards generally accepted in
the United States of America; the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller
General of the United States; and applicable provisions of Office of
Management and Budget (0MB) Bulletin No. 19-01 , Audit Requirements for
Federal Financial Statements, the financial statements of the Department of
the Treasury Forfeiture Fund (the Fund), which comprise the balance sheets as
of September 30, 20 18 and 2017, and the related statements of net cost,
changes in net position, and budgetary resources for the years then ended, and
the related notes to the fin~ncial statements, and have issued our report thereon
dated October 30, 2018.
In plannfag and performing our audit of the financial statements as of and for
the year ended September 30, 2018, we considered the Fund ' s internal control
over financial reporting (internal control) to determine the audit procedures
that are appropriate in the circumstances for the purpose of expressing our
opinion on the :financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Fund' s internal control. Accordingly, we do
not express an opinion on the effectiveness of the Fund' s internal control. We
did not test all internal controls relevant to operating objectives as broadly
defined by the Federal Managers ' Financial Integrity Act of 1982.
A deficiency in internal control exists when the design or operation of a
control does not allow management or employees, in the normal course of
performing their assigned functions , to prevent, or detect and correct,
misstatements on a timely basis. A material weakn.ess is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will
not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control was for the limited purpose described in
the second paragraph and was not designed to identify all deficiencies in
internal control that might be material weaknesses.

1920 L Street, NW
Swre425
Wubin.gton, DC 20036
Tel: 202-8S7-tm

Member efthe ./lmerit-a11 Instit11te efCcrt!fied P1tb!it" Acco1mta11/s

Given these li mitations, during our audit we did not identify any deficiencies in internaJ control that
we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.

Purpose of this Report
The purpose of this repoti is solely to describe the scope of our testing of internal controJ and the
result of that testing, and not to provide an opinion on the effectiveness of the Fund ' s internal control.
This repoti is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Fund's internal control. Accordingly, this communication is not
suitable for any other purpose.

Washington, DC
October 30, 2018

20

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT-FISCAL YEAR 2018

~

gKa,p.c.
~Certified Public Accountants
& Consultants

www.gkacpa.com

1

Independen t Auditor's Report on Compliance and Other Matters
Inspector General
U.S. Department of the Treasury
Washfogton , D.C.
We have audited, in accordance w ith auditing standards generally accepted in
the United States of America; the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller
General of the United States; and applicable provisions of Office of
Management and Budget (0MB) Bulletin No. 19-01 , Audit Requirements for
Federal Financial Statements, the financial statements of the Department of
the Treasury Forfeiture Fund (the Fund), which comprise the balance sheets as
of September 30, 20 18 and 2017, and the related statements of net cost,
changes in net position, and budgetary resources for the years then ended, and
the related notes to the financial statements, and have issued our report thereon
dated October 30, 2018.
As part of obtainjng reasonable assurance about whether the Fund's financial
statements are free from material misstatement, we performed tests of the
Fund 's compliance with ce1tain provisions of laws, regulations, and contracts,
noncompliance with which could have a direct and material effect on the
determination of financial statement amounts, and certain provisions of other
laws and regulations specified in 0MB Bulletin No. 19-01. However,
providing an opinion on compliance with those provisions was not an objective
of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards
or 0MB Bulletin No. 19-0 1.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of
compliance and the result of that testing, and not to provide an opinion on the
Fund's compliance.
1920 L Street, NW
Suite 425
Washington, DC 20036

Tel: 202-857-lm

Member ofthe Ame1i,YJ11 I11stil1tte of Ce,tffeed Public Acco1111ta11ts

This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Fund' s compliance. Accordingly, this communication is not suitable for
any other purpose.

Washington, DC
October 30, 2018

22

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

THIS PAGE INTENTIONALLY LEFT BLANK

SECTION ill
FINANCIAL STATEMENTS AND NOTES

TIDS PAGE INTENTIONALLY LEFT BLANK

Department of the Treasury Forfeiture Fund
BALANCE SHEETS
As of September 30, 2018 and 2017
(Dol lars in thousands)
2018
Assets:
lntragovern mental:
Fund balance with Treasury
Investments and related interest receivable (Note 3)
Total Intragovernmental

$

32,425
2.574.872
2,607,297

2017

$

35,607
3.124,344
3.159,95 I

Total Assets

743,749
l 478
745,227

74,699
415
75.114

62,678
153
62,831

$3,268,QQ2

$ 133,240

$ 87,782

133.240

87,782

1,690,876

1,529,034

43,127
8,589
75.114

32,755
7,409
62.831

1,950,946

Forfeited property (Note 6)
Held for sale, net of mortgages, liens and claims
To be shared with federa l, state or local, or fo reign governments
Total forfeited property, net of mo11gages, liens and claims

703,476
815
704,291

~3.J86,1Q2

Cash and other monetary assets (Note 5)
Accounts Receivable

1,719.811

1,435,756,

2.248, 198

$3386.702

$3,968.009

Liabilities:
Intragovernmental:
Accounts payable
Total lntragovernmental
Seized currency and other monetary instruments (Note 8)
Di stributions payable (Note I0)
State and local agencies and foreign governments
Accounts payable
Deferred revenue from forfeited assets

Total Liabilities
Commitments and contingencies (Note 15)

Net Position:
Cumulative results of operations (Note 11)
Total Liabilities and Net Position

The accompanying notes are an integral part ofthese financial statements.

SECTION Ill - FINANCIAL STATEMENTS AND NOTES

23

Department of the Treasury Forfeiture Fund
STATEMENTS OF NET COST
For the years ended September 30, 2018 and 2017
(Dollars in thousands)

2018

2017

Program:

ENFORCEMENT
In tragovern mental:
Seizure investigative costs and asset management
Other asset related contract services
Data systems, train ing and others

$ 112,193

6,634
48,089
166.916

Total with the Public
N et Cost of Operations (Note 16)

$

51,048
15,660

72,515

With the Public:
National contract services seized property and other
Joint operations

154.824

56,964
15,551

Total Intragovernmental

99,068
8,581
47. 175

66.708

232,431

$ 22],5Ji

$

The accompanying notes are an integral part ofthese financial statements.

24

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEA R 2018

Department of the Treasury Forfeiture Fund
STATEMENTS OF CHANGES IN NET POSITION
For the years ended September 30, 2018 and 2017
(Dollars in thousands)

2018

2017

$ 2,248.198

$ 2,590,444

47,840

19,085

1,089,225
99,240
49,553
545
9,990
3,708
(1,486)

374,895
83,7 11
14,175
240
8,840
3,330
3 466

1.298,615

507,742

(18,799)

{124,595)

(137,873)
(627)
{524,763)
(663.263)
(682,062)

(64,306)
(2,953)
{77.195)
{144,454)
(269,049)

616,553

238,693

Transfers -In (Out)
Intragovernmental
Strategic support (Note 13)
Secretary's enforcement fund (Note 14)
Transfer to the general fund (Note 9)

(47,125)
(37,477)
( 1.104.962)

(39,497)
(5,910)
(314,000)

Total Transfers Out

(J.189.564)

(359,407)

Total Financing Sources - Net
Net Cost of Operations

(573,011)
(239,431)

(120,714)
(221,532)

Net Results of Operations

(812.442)

(342,246)

$ l 14J5,156

$ ~.248,)..2.8.

Net Position - Beginning of Year
Financing Sources (Non-Exchange Revenues):
Intragovernmental
Investment interest income
Public
Forfeited currency and monetary instruments
Sales of forfeited property net of mo1tgages and claims
Proceeds from participating with other federal agencies
Value of property transferred in equitable sharing
Payments in lieu of forfeiture, net of refunds (Note 19)
Reimbursed costs
Other
Total Gross Non-Exchange Revenues
Less: Equitable Sharing
In tragovern mental
Federal
Public
State and local agencies
Foreign countries
Victim restitution
Total Equitable Sharing
Total Non-Exchange Revenues, Net

Net Position -End of Year

The accompanying notes are an integral part ofthese financial statements.
SECTION l/1 - FINANCIAL STATEMENTS AND NOTES

25

Department of the Treasury Forfeiture Fund
STATEMENTS OF BUDGETARY RESOURCES
For the years ended September 30, 2018 and 2017
(Dollars in thousands)
2018

2017

668,529
16, 163
770
685,462

$ 1,034,832
41 ,094
528
1,076,454

1.147,136

118.303

$

),832.598

$ 1,194.757

Obligations incurred

$

1,007,425

$

526.228

Unobligated balances - apportioned
Unobligated balances - unapportioned
Unobligated balances - end of year (Note 17)

$

$

$

466,136
359,037
825,173

$

557,363
111 166
668,529

$

I 832 598

$

1.1 94,757

Outlays, net

$

952.274

$

578.067

Agency outlays, net

$

952,214

$

578.Q6:Z

Budgetary Resources:
Unobl igated balances- beginning of year
Recoveries of prior year unpaid obligations
Other changes in unobligated balance
Unobligated balance from prior year budget authority, net

$

Budget authority

Total Budgetary Resources
Status of Budgetary Resources:

Total Budgetary Resources
Outlays, net

The accompanying notes are an integral part of these financial statements.

26

TREASURY FORFEITURE FUNDACCOUNTABllfTY REPORT-FISCAL YEAR 2018

Note 1: Reporting Entity
The Depa11ment of the Treasury Forfeiture Fund (Treasury f01feiture Fund or the Fund) was
establ ished by the Treasury Forfeiture Fund Act of 1992, Public Law l 02-393 (the TFF Act), and is
codified at 31 USC 9705. The Fund was created to consolidate all Treasury law enforcement bureaus
under a single forfe iture fund program administered by the Depa11ment of the Treasury (Treasury).
Treasury law enforcement bureaus fully participating in the Fund upon enactment of this legislation
were the U.S. Customs Service (Customs); the Internal Revenue Service - Criminal Investigation
(IRS-Cl); the United States Secret Service (Secret Service); the Bureau of Alcohol, Tobacco and
Firearms (A TF); the Financial Crimes Enforcement Network (FinCEN); and the Federal Law
Enforcement Training Center (FLETC). FinCEN and FLETC contribute no revenue to the Fund,
however in FY 2016, significant amounts of Strategic Support funds were al located to FinCEN
towards Bank Secrecy Act (BSA) Information Technology (IT) modernization, a tool used in the
fight against money laundering and other criminal activity. The U.S. Coast Guard, formerly part of
the Department of Transportation, now part of the Department of Homeland Security (DHS), also
participates in the Fund. However, all Coast Guard seizures are treated as Customs seizures because
the Coast Guard lacks forfeiture authority.
With enactment of the Homeland Security Act of 2002 (Homeland Security Act), law enforcement
bureaus currently participating in the Fund are: the Internal Revenue Service - Criminal Investigation
(IRS-Cl) of Treasury, Customs and Border Protection (CBP), Lmmigration and Customs Enforcement
(ICE) and the U.S. Secret Service (USSS) of DHS. The U.S. Coast Guard of DHS joins these
bureaus. The Fund continues in its capacity as a multi-departmental fund, representing the interests of
law enforcement components of the Departments of Treasury and Homeland Security.
The Fund is a special fund that is accounted for under Treasury symbol number 20X5697. From this
no-year account, expenses may be incurred consistent with 31 USC 9705, as amended. A portion of
these expenses, referred to as discretionary expenses, are subject to annual appropriation limitations.
Others, referred to as non-discretionary (mandatory) expenses, are limited only by the availability of
resources in the Fund. Both expense categories are limited in total by the amount of revenue in the
Fund. The Fund is managed by Treasury's Executive Office for Asset Forfeiture (TEO AF).
The mission of the Treasury Forfeiture Fund is to affirmatively influence the consistent and strategic
use of asset forfeiture by law enforcement bureaus to disrupt and dismantle criminal enterprises. The
goal of the Treasury Forfeiture Fund is to support the Treasury's national asset forfeiture program in
a manner that results in federal Jaw enforcement's continued and effective use of asset foifeiture as a
high-impact Jaw enforcement sanction to disrupt and dismantle criminal activity. Under a
Memorandum of Understanding (MOU) with Treasury, CBP acts as the executive agent for certain
operations of the Fund. Pursuant to that executive agency role, CBP's National Finance Center (NFC)
is responsible for accounting and financial reporting for the Fund, including timely and accurate
reporting and compliance with Treasury, the Comptroller General and the Office of Management and
Budget (0MB) regulations and reporting requirements.

SECTION/fl - FINANCIAL STATEMENTS AND NOTES

27

Note 2: Summary of Significant Accoun ting Policies
Basis of Accounting and P resentation
The Fund began preparing audited financial statements in Fiscal Year 1993 as required by the Fund's
enabling legislation, 31 USC 9705(f)(2)(H), and the Chief Financial Officers Act of 1990. Beginning
with the Fiscal Year 1996 report, the Government Management Reform Act of 1994 (GMRA)
requires executive agencies, including the Treasury, to produce audited consolidated accountability
reports and related footnotes for all activities and funds.
The financial statements have been prepared from the accounting records of the Fund in conformity
with accounting principles generally accepted in the United States of America (GAAP) and specified
by 0MB in 0MB Circular A-136, Financial Reporting Requirements (0MB Circular A-136). GAAP
for federal entities is prescribed by the Federal Accounting Standards Advisory Board (F ASAB),
which is designated the official accounting standards setting body of the Federal Government by the
American Institute of Certified Public Accountants.
The preparation of financial statements in accordance with accounting principles generally accepted
in the Unites States of America requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Certai11 fiscal year 2017 balances may have been reclassified, retitled, or combined with other
financial statement line items for consistency with the current year presentation.

Allowable Fund Expenses
The majority of the revenue recorded by the Fund is util ized for operating expenses or distributed to
state and local law enforcement agencies, other federal agencies, and fore ign governments, in
accordance with the various laws and policies governing the operations and activities of the Fund.
Under the TFF Act, the Fund is authorized to pay certain expenses using discretionary or mandatory
funding authorities of the Fund.
Discretionary authorities include but may not be limited to: the payment.of expenses for the purchase
of awards for information or assistance leading to a civil or criminal forfeiture involving any law
enforcement bureau participating in the Fund; purchase of evidence or information that meet the
criteria set out in 31 USC 9705(a)(2)(B); payment for equipment for vessels, vehicles, or aircraft
available for official use as described by 3 1 USC 9705(a)(2)(D) and (F); reimbursement of private
persons for expenses incurred while cooperating with a Treasury law enforcement organization in
investigations; publication of the availability of certain awards; and payment for training foreign law
enforcement personnel with respect to seizure or forfeiture activities of the Fund. Discretionary
expenses are subject to an annual, definite Congressional appropriation from revenue in the Fund.
Expenses from the mandatory authorities of the Fund include but are not limited to: all proper
expenses of the seizure, including investigative costs and purchases of evidence and information
leading to seizure, holding costs, security costs, etc., awards of compensation to informers under
section 619 of the Tariff Act (19 USC 1619); satisfaction of liens against the forfeited prope1ty, and
28

TREASUR Y FORFEITURE FUNDACCOUNTA.BJLJTY REPORT-FISCAL YEAR 2018

claims of patties with interest in forfeited property; expenses incurred by state and local law
enforcement agencies in joint law enforcement operations w ith law enforcement agencies
participating in the Fund; and equitable sharing payments made to state and local law enforcement
agencies in recognition of their efforts in a Fund seizure leading to forfeitu re. These mandatory
expenses are paid pursuant to the permanent indefinite authorities of the Fund; are only limited by
revenue in the Fw1d each year and do not requ ire additional Congressional action for expenditure.
T he Fund's expenses are either paid on a reimbursement basis or paid directly on behalf of a
participating bureau. Reimbursable expenses are incurred by the respective bureaus pruticipating in
the Fund against their appropriation and then submitted to the Fund for reimbursement. The bureaus
are reimbursed through Inter-Agency Transfers (SF- I 081) or [ntra-governmental Payments and
Collection (IP AC) System. Certain expenses such as equitable sharing, liens, claims and state and
local joint operations costs are paid directly from the Fund.
Further, the Fund is a component unit of the Treasury with participating bureaus in the DHS. As
such, employees of both Departments may perform certain operational and administrative tasks
related to the Fund. Payroll costs of employees directly involved in the security and maintenance of
fmfeited prope1ty are also recorded as expenses in the financia l statements of the Fund (included in
the Iine item "seizure investigative costs and asset management" in the statement of net cost.)
Revenue and Expense Recognition
Revenue from the forfeiture of property is deferred until the property is sold or transferred to a state,
local or federal agency. Revenue is not recorded if the forfeited property is ultimately destroyed or
cannot be legally sold.
Revenue from currency is recognized upon forfeiture. Payments in lieu of fo1feiture (mitigated
seizures) are recognized as revenue when the payment is received. Revenue received from
participating with certain other federal agencies is recognized when the payment is received.
Operating costs are recorded as expenses and related liabilities when goods are received or services
are performed. Certain probable equitable sharing liabilities existing at year end are accrued based
on estimates.
As provided for in the TFF Act, the Fund invests seized and forfeited currency that is not needed for
current operations. Treasury's Bureau of Fiscal Service invests the funds in obligations of, or
guaranteed by, the United States Government. Interest is reported to the Fund and recorded monthly
as revenue in the general ledger.
Funds from Dedicated Collectio11s
Funds from dedicated collections are financed by specifically identified revenues, often
supplemented by other financing sources, which remain avai lable over t ime. These specifically
identified revenues and other financ ing sources are required by statute to be used for designated
activities, benefits, or purposes, and must be accounted for separately from the Government's general
revenues. In accordance with SFFAS 43, Funds from Dedicated Collections, all of the TFF's
revenue meets these criteria and constitutes funds from dedicated collections.
The Federal Government does not set aside assets to pay future benefits or other expenditures
associated with funds from dedicated collections. The cash collected from funds from dedicated
collections is deposited in the U.S. Treasury, which uses the cash for general government purposes.
SECTION III - FINANCIAL STATEMENTS AND NOTES

29

Treasury securities are issued to the TFF as evidence of its receipts. Treasury securities are an asset to
the TFF and a liability to the U.S. Treasury. Because the TFF and U.S. Treasury are both parts of the
government, these assets and liabilities offset each other from the standpoint of the government as a
whole. For this reason, they do not represent an asset or a liability in the U.S. Government-wide
financial statements.
Treasury securities provide the TFF with authority to draw upon the U.S. Treasury to make future
benefit payments or other expenditures. When the TFF requires redemption of these securities to
make expenditures, the government finances those expenditures out of accumulated cash balances, by
raising taxes or other receipts, by bo,rnwing from the public or repaying less debt or by cuttailing
other expenditures. This is the same way that the government finances all other expenditures.
Equitable Sharing (Assets Distributed)

Forfeited propetty, cu1
Tency, or proceeds from the sales of forfeited property may be shared with
federal, state and local law enforcement agencies or foreign governments, which provided direct or
indirect assistance in the related seizure. In addition, the Fund may transfer forfeited property to
other federal agencies, which would benefit from the use of the item. A class of asset distribution
was established for victim restitution in l 995. These distributions include property and cash returned
to victims of fraud and other illegal activity. Upon approval by Fund management to share or
transfer the assets, both revenue from distributed forfeited assets and distributions are recognized for
the net realizable value of the asset to be shared or transferred, thereby resulting in no gain or loss
recognized. Revenue and /or expenses are recognized for property and currency, which are
distributed to or shared with non-federal agencies, per SFFAS No . 7, Accounting f or Revenue and
Other Financing Sources.
Entity Assets

Entity assets are used to conduct the operations and activities of the Fund. Entity assets comprise
intragovernmental and non-intragovernmental assets. Intragovernmental balances arise from
transactions among federal agencies. These assets are claims of a federal entity against another
federal entity. Entity assets consist of cash or other assets, which could be converted into cash to
meet the Fund's current or future operational needs. Such other assets include investments of forfeited
balances, accrued interest on seized balances, receivables, and forfeited property, which are held for
sale or to be distributed.
•

Fund Balance with Treasury - This represents amounts on deposit with Treasury.

•

Investments and Related Interest Receivable - This includes forfeited cash held by the Fund
and seized currency held in the Customs Suspense Account that had been invested in short term
U.S . Government Securities.

•

Accounts Receivables - The values repotted for other receivables are primarily funds due from
the national seized property contractor for propetties sold; the proceeds of which have not yet
been deposited into the Fund. No allowance has been made for uncollectible amounts as the
accounts recorded as a receivable at year end were considered to be fully collectible as of
September 30, 2018 and 2017.

30

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

•

Cash and Other Monetary Assets - This includes forfeited currency on hand not yet deposited
and forfe ited currency held as evidence.

•

Forfeited Property and Currency - Forfeited property and currency is recorded in the
respective seized property and forfeited asset tracking systems at the estimated fair value at the
time of seizure. However, based on bjstorical sales experiences for the year, properties are
adjusted to reflect the market value at the e nd of the fiscal year for financial statement reporting
purposes. Direct and indirect holding costs are not capitalized for individual forfeited assets.
Forfeited currency not deposited into the Fund is included as part of Entity Assets - Cash and
Other Monetary Assets.

Fu11her, mortgages and claims on forfeited assets are recognized as a valuation allowance and a
reduction of deferred revenue from forfeited assets when the asset is forfeited. The allowance
includes mortgages and claims on forfeited property held for sale and a minimal amount of claims on
forfeited property previously sold. Mortgages and claims expenses are recognized when the related
asset is sold and is reflected as a reduction of sa les of forfeited property.
Additionally, SFFAS No. 3, Accounting for Inventory and Related Property, requires certain
additional disclosures in the notes to the financial statements, including an analysis of changes in
seized and forfeited property and currency, for both carrying value and quantities, from that on hand
at the beginning of the year to that on hand at the end of the year. These analyses are disclosed in
Notes 7 and 8.

Non-entity Assets
Non-entity assets held by the Fund are not avai lable for use by the Fund. Non-entity assets comprise
intragovernmental and other assets. Intragovernmental balances arise from transactions among
federal agencies. These assets are claims of a federal entity against another federal entity. Nonentity assets are not considered as financing sources (revenue) available to offset operating expenses,
therefore, a corresponding liability is recorded and presented as governmental liabilities in the
balance sheet to reflect the custodial/fiduciary nature of these activities.

•

Seized Currency and Property - Seized Currency is defined as cash or monetary instruments
that are readily conve11ibJe to cash on a dollar for dollar basis. SFFAS No. 3 requires that seized
monetary instruments (cash and cash equivalents) be recognized as an asset in the financial
statements and a liability be established in an amount equal to the seized asset value due to: (i) the
fungible nature of monetary instruments, (ii) the high level of control that is necessary over these
assets; and (iii) the possibility that these monies may be returned to their owner in lieu of
forfeiture.
Seized property is recorded at its appraised value at the time of seizure. The value is determined
by the seizing entity and is usually based on a market analysis such as a third party appraisal,
standard property value publications or bank statements. Seized property is not recognized as an
asset in the financial statements, as transfer of ownership to the government has not occurred as
of September 30. Accordingly, seized property other than monetary instruments is disclosed in
the footnotes in accordance with SFFAS No. 3.

SECTION Ill- FINANCIAL STATEMENTS AND NOTES

31

•

Investments and Related Interest Receivable - This balance includes seized cash on deposit in
the Fund 's suspense account held by Treasury, which has been invested in short term U.S.
Government Securities.

•

Cash and Other Monetary Assets - This balance represents the aggregate amount of the Fund' s
seized CUITency on deposit in the Fund's suspense account held by Treasury, seized cash on
deposit held w ith other financial institutions and, cash on hand in vau lts held at field office
locations.

Liabilities Covered by Budgeta,y Resources
Liabilities covered by budgetary resources represent li abilities incutTed, which are covered by
available budgetary resources. T he components of such liabilities for the Fund are as fol lows:

•

Distributions Payable - Distributions payable to federa l and non-federal agencies is primarily
related to equitable sharing payments and payments to be made by the Fund to the victims of
fraud.

•

Accounts Payable - Amounts reported in this category include accrued expenses authorized by
tbe TFF Act (See "All owable Fund Expenses") fo r which payment was pending at year end.

•

Seized Currency - Amounts reported in th is category represent the value of seized currency that
is held by the Fund which equals the amount of seized currency repo1ted as an asset.

•

Deferred Revenue from Forfeited Assets - At year end, the Fund held forfeited assets, which
had not yet been converted into cash through a sale. The amount reported here represents the
value of these assets, net of mortgages and claims.

Liabilities Not Covered by Budgeta,y Resources
The Fund does not currently have liabi lities not covered by available budgetary resources.

Net Position
The components of net position are classified as follows:
• Retained Capital - There is no cap on amounts that the Fund can carry forward into Fiscal Year
2019. The cap was removed by the Fiscal Year 1997 Omnibus Appropriations Act (PL 104-208).

•

Unliquidated Obligations - This category represents the amount of undelivered purchase orders,
contracts and equitable sharing requests which have been obligated with current budget resources
or delivered purchase orders and contracts that have not been invoiced. An expense and liabil ity
are recognized and the corresponding ob ligations are reduced as goods are received or serv ices
are performed. A portion of the equ itable sharing requests that were in final stages of approval
are recognized as liabilities at year end. Prior experience w ith the nature of this account indicated
that a substantial portion of these requests were certain liabilities at year end. (See also
Distributions Payable at Note 10).

32

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

•

Net Results of Operations - This category represents the net difference, for the activity during
the year, between: (i) financ ing sources including transfers, and revenues; and (ii) expenses.

Note 3: Investments and Related Interest Receivable
A ll investments are intragovernmental short-term (35 days or less) non-marketable par value federa l
debt securities issued by, and purchased through Treasury's Bureau of the Fiscal Service, Federal
Investments Branch. Investments are always purchased at a discount and are reported at acquisition
cost, net of discount. The discount is amortized into interest income over the term of the investment.
The investments are always held to maturity. They are made from cash in the Fund and from seized
currency held in the Customs Suspense Account. The Customs Suspense Account became the
depository fo r se ized cash for the Fund following enactment of the TFF Act.
The following schedule presents the investments on hand as of September 30, 2018 and 2017,
respectively (dollars in thousands):

Entity Assets

Cost

Description

Unamortized
Discount

Investment,
Net

$1,542,772

($2,478)

$1 ,540,294

September 30, 2018
Treasury Forfeiture Fund -

28 days 2.0650% U.S. Treasury Bills

444

Interest Receivable
Total investment, Net, and Interest Receivable

$1.540.738

Fair Market Value

$1,540,622

September 30, 2017
Treasury Forfeiture fund -

28 days 0.09550% U.S. Treasury Bills

$2,237,149

($1 ,662)

Interest Rece.ivable

$2,235,487
162

Total Investment, Net, and Interest Receivable

$2.235.649

Fair Market Value

$2.235,747

SECTION Ill- FINANCIAL STATEMENTS AND NO TES

33

Non-entity Assets
Description

Cost Unamortized
Discount

Investment,
Net

September 30, 2018
Treasury Forfeiture Fund Seized Cun-ency Suspense Account
28 days 2.0650% U.S. Treasury Bills

$1 ,035 ,798

($1 ,664)

$ l .034,134

Fair Market Value

$1,034.354

September 30, 201 7
Treasury Forfeiture Fund Seized Currency Suspense Account
28 days 0.09550% U. S. T reasury Bills

($601)

$809,294

$ 808.693

Fair Market Value

$ 808.787

Note 4: Analysis of Non-E ntity Assets
The followi ng schedule presents the non-entity assets as of September 30, 2018 and 2017,
respectively (dollars in thousands) :

2018
Seized currency:
Intragovernmental Investments (Note 3)
Cash and other monetary assets (Note 5)

$

1,034, 134
656,742

2017
$

808,693
720,341

Total Non-E ntity Assets

l,690,876

1,529,034

Total Entity Assets

1,695 ,826

2,438,975

Total Assets

34

$

3,386,702

$

3,968,009

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

Note 5: Cash and Other Monetary Assets
Entity Assets
Cash and Other Monetary Assets held on hand included forfeited currency not yet deposited, as well
as forfeited currency held as evidence, amounting to $46.7 million and $23.4 million as of September
30, 2018 and 2017, respectively.

Non-Entity Assets
Cash and Other Monetary Assets included seized currency not yet deposited, as well as deposited
seized currency which is not invested in order to pay remissions, amounted to $656.7 million and
$720.3 million as of September 30, 2018 and 2017, respectively.

Note 6: Forfeited Property/Deferred Revenue
The following summarizes the components of forfeited property (net), as of September 30, 2018 and
2017, respectively (dollars in thousands):

Held for sale
To be shared with federal, State or local, or foreign government
Total forfeited propetty (Note 7)
Less: Allowance for liens and claims

$

Total forfeited property, net

$

2018
78,263
415
78,678
p,564)
75,114

SECTION III - FINANCIAL STATEMENTS AND NOTES

2017
$
67,670
153
67,823
(4,992)

$

62,831

35

Note 7: Analysis of Changes in Forfeited Property and Currency

The following schedule presents the changes in the forfeited property and cun-ency balances from October I, 2017 to September 30, 2018.
(Dollar value is in thousands)

Cum:ncy

10/1/17 Fioaneinl
S1a1emen1 Balance
Value
No.
S12,329

10/1/17
CllJ'l'YiD~ Value
Value
No.
512,329

Adius1111cnts
Vnlue
No.
S·

Other Monetary
Instruments
Subtotol

11,079
23,408

.

.

.

.

.

Real Property

44,828

217

6,790

12,319
1,306
813
8,557
67 823
S9 t ,2J I

16.708
119

38,582
171
279
9,563

Gencml Prooertv
Vessels
Aitcr111l
Vehicles
Subtotsl
Grand Totnl

.

8

2,610
19,734
19,734

Victim Restitution
Value
Currency
Other Monetary
lostrumeois

55.385
$55,385

No.

Subtotal

.

Rcnl Prooertv

Geneml ProocrtV
Vessels
Aircraft
Vehicles
Subto!AI
Grand Total

.

.

.

{45)

l 020 ~21

.

(3,786)
(1069692)

.

.

.

(~5)

.

217

42,012

135

(41,036)

(170)

(1,690)

(4)

50,901
1,477
I 092
18,120
123,208
S146,616

16.780
119
8
2,610
19,734
19 734

33,407
792
1840
27,047
105 098
Sl ,125,519

20,244
106

(13,669)
(1.082)
(2,163)
(19,133)
177,083\
S0,146,775)

{1 ,785)
(58)

(1,290)
(29)

Other
Adjustments
Value
No.
$72,878

8

7,691
28184
28,184

Value a,ange
Value
No.
.
$(236)

(11)

(4394)
16 418)
(6,418)

201 8 Canying Value
Value
No.
$39,486

(6,357)
(9 366)
S(9,411)

.

36

.

(2,673
(3
(I

(768
(3 449)

(3,449)

Fair Market Value
Adjustment
Value
No.

S-

.

.

.

.

.

72 878

.

(236)

.

7,248
46,734

.

.

9,219

7

330

.

60.4S3

18S

(I l,80S}

.

42,402
1,686
1.908
15.S23
121,972
S168 706

16.042
113
7
2,362
18,709
18,709

(22.433)
/648)
(1,056)
(1,352)

(17,369)
(63)

(4,703)
(13 719)
S(l3 719)

.

(8,920)

.

.

11.079
23,408

.

(96)

.
.
S-

s .

.

.

.
.

.
.
.

.

.

.

Disp0sals/Transfers
Value
No.

51,618

Destroyed
No.
Value
S-

S-

.

Dep0sits/Snles
Value
No.
S( I.065,906)

Forfeitures
Value No.
St.020,421

(2,993))
(20 425)
(20,425)

(891)
547
1300
1614
II 789
S84,667

845
12
3
216
I 083
1,083

(17,136)
77

.

(161)

11,065)
(I 7,955)
S08 191)

.
.

.

(43,294)

S/43,294l

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

9/30/18 Financial
Statement Balance
Value
No.
.
S39.486

.

.

.

48.648

.

7,248
46 734

18S

19,969
I 038
852
8.171
78 678
SllS 412

16,Q42
113
7
2,362
18.709
18709

Note 7: Analysis of Changes in Forfeited Property and Currency

The following schedule presents the changes in the forfeited property and currency balances from October I, 2016 to September 30, 2017.
(Dollar value is in thousands)
10/1/16 Finnncial
Stnrcmcnt Balnnce
Value
No.

Currency

$17,152

10/ 1/16

Adiusm1en1s
Value
No.

s-

.

Sl7.152

.

.
.

11.079
28 231

Other Monerary
lnstru,ncnrs
Subrotnl

11 079
28231

.
.

.
.

Real Pron•rtv

36,698

2S5

46,946
1,043
454
8.897
94 038
SJ22 269

20,636

5 1,400
859
1.479
7.654
79 071
S79 071

Currcncv
Other Monerary
lnstrumcnrs
Sub101al

8
2.159
23,153
23,153

Victim Restitution
Value
No.
S·

.
.

S-

.
.

.
.

.
.
.

S-

.
.

.
.

.

Dcsrroycd
Value
No.

.

.

$353. 185

.

.

1,836
355 021

255

98,346
1,902
I 933
16,551
173109
$201,340

20,636
9S

.

8
2.159
23 153
23153

Other
Adjusunents
Value
No.
$24,995

.

.

-

(J.81 ll
(382.827)

.
-

34,376

132

(44,453)

14,352
896
1.133
29.565
80,322
S43S,34J

21,574
114
11
7.811
29 642
29,642

(44,341)
(452)
13.215)
(20.880\
(113,341 )
$(496.168)

(3,467)
(32)
(8)
(S 983\
(9 68-1)

.

13Sl
1413)
$(4 13)

Disoosals/Tnmsfcrs
Value
No.

{194)

.

Value Change
Value
No.
S( l,987)

.

.

.

24,995

.

(1,987)

(I)

(378)

Depos11s/Solcs
Value
No.
$(381 ,0 16)

.

.

Real Proocrtv
General Proocnv
Vesstls
Aircraft
Vehicles
Subtoral
GrandT01:il

95

Forfeitun:s
Value No.

S4,377

17,679

General Prooenv
Vessels
Aircrafi
Vehicles
Subrotal
Grond Total

Canvin~ Value
Value
No.

6,803

2S

(6,274)
(617)
1.292
(681 l
523
szs 518

(27)
13)
(2)
177
170
170

(9,450)
/179)
(51)
(321\
19486)
S/1 1,473)

20 17 Canying Value

Value

No.

.

(25\
(25)

.

.

.
.
-

.

.
.

(1,354)
173)

(1 ,308)
(2)

(6,079)
(1 506)
S/7 531\

(942)
(2,252)
12 252)

Fair Markel Value
Adjusunent
Value
No.
$-

$12,329

.

.

11.079
23.408

.
-

-

51 ,618

S15

(20.628)
(53)
(I)
(612)
(21 295)
121 295)

19 6841

s

217

(6,790)

50,901
1,477
1,092
18,120
123 208
Sl46 616

16.780
119
8
2,6 10
19.734
19.734

(38,582)

SECTION 1/I - FJNANCJAL STATEMENTS AND NOTES

.

1171\
(279)
19.563)
(55,385)
S(SS,385)

9/30/17 Financial
Statement Balance
Value
No.
$12,329

.

II .Q79
23 408

-

44,828

217
16.780

.

12,319
1.306
8 13

.
-

8,557
67,823
S91,231

2,610
19,734
19,734

.
.

119
8

37

Note 8: Analysis of C hanges in Seized Propertv and C urrency

Seized property and currency result primarily from enforcement activities. Seized property is not legally owned by the Fund until judicially or
administratively forfeited. Because of the fungible nature of currency and the high level of control necessary over these assets and the possibility that
these monies may be returned to their owners in lieu of forfeiture, seized currency is reported as a custodial asset upon seizure. Seized property other
than currency is reported as a custodial asset upon forfeiture. The following schedule presents the changes in the seized property and currency balances
from October I, 2017 to September 30, 20 18. (Dollar value is in thousands)
9/30/17 Financial
Statement Balance
Value
No.

Seizures
Value
No.

Remissions
Value
No.

Forfeitures
Value

No.

Adjustments
Value
No.

Value Changes
Value No

Sl,516.467

.

$1,288.943

$(70,7841

-

S(l.020.421)

-

$(35.908)

12 567
t.529,034

-

4
J.288 947

(41
(70 788)

-

(1,020 421)

.

(35,908)

.

12

Real Propertv

212 913

534

92.272

136

( 10.161)

(51)

(42 012)

(135)

13,687

4

(9.091)

General
Prooertv
\lossels

436.381

33,979

I 19,1
82

27.966

(28,575)

(4,162)

(33,407)

(20.244)

(61.956)

(7.108)

( 16,002)

6.412

117
26
4.227
38 883
38,883

2.799
155
6,518
29
89-091 12.571
309862 40857
Sl,598 809 40857

(269)
(2,301)
(54,020)
(95 326)
S066,l 141

(7921
(1,840)
(27,047)
(105,098)
so 125.5191

(106)
(8)

(1,712)
(3.327)
(2,763)
(56,071)
S/91 9791

(24)
(8)
(180)
(7,316)
17 316)

(52)
(449)
(2,479)
(28,073)
(28 0611

Currency
Other
Monetary
Instruments
Subtotal

Ain:rnf\

Vehicles
Subtotal
Grand Total

IS 130

44 342
715 178
S2,244 212

38

( 12
(4

(3,918

(8,207
(8 207)

(7,6911
(28,184)
(28 184)

-

Sl2

-

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 20/8

9/30/18 Financial
Statement Balance
Value
No.
St.678.309

-

12,567
l 690,876

-

257,608

488

-

415.623

30.431

-

6.386
13.731
47.124
740,'172
$2,431,348

130
35
4,949
36,033
36 033

-

-

Note 8: Analys is of Cha nges in Seized P roper ty and Currency
Seized property and currency result primarily from enforcement activities. Seized property is not legally owned by the Fund until judicially or
administratively forfeited. Because of the fungible nature of currency and the high level of control necessary over these assets and the possibi lity that
these monies may be returned to their owners in lieu of forfeiture, seized currency is reported as a custodial asset upon seizure. Seized property other
than currency is reported as a custodial asset upon forfeiture. The following schedule presents the changes in the seized property and currency balances
from October I. 2016 to September 30, 2017. (Dollar value is in thousands)
9/30/16 Financial
Statement Balance
Vnlue

Currencv
0 1hcr
Monetruy
Instruments
Subtotal

Seizures

Forfcirures

Remissions

Value Changes

Adjustments

$1 ,518,587

Value

No.

Value

No.

Value

No.

Value

No.

Value

$459,036

No.

-

SCl65,398l

-

S(353.185l

-

$57,727

-

$(300)

-

-

14,203
1,532.790

-

82
459.118

.

(7)
(165,405)

.

(1,836)
(355,021)

.

125
57,852

.

(300)

Real Property

222,587

572

41, 186

115

(14,271)

{4 1

{34,376)

{132)

6,247

20

General

272,833

29.455

210,3 12

30,103

(26,081)

(3,738)

( 14,352)

(21,574)

3,985

148
20
12,106
42,492
42,492

(426)
(781)
156,680)
(98 239)
Sf263,644\

(1141

(1211
(3,702)
(3,257)
J 152
S61,004

Vessels

Aircraft
Vehicles
Subtotal
Grand Total

5,350
18,909
47,053
S66.732
Sl 099 522

112
30
4,7 10
34,879
34,879

2 600
3,998
87,682
345 778

S804,896

115
(6

(4,389
(8 ,189
18,189

(I J

17.811
(29,642
/29,6.12

SECTION lll - FINANCIAL STATEMENTS A.ND NOTES

Value

No.

$1,516.467

12.567
1,529.034

-

(8,460)

212,9 13

534

(267)

(10,316)

436.38 1

33,979

(14)
(7)
(3891
(657)
(6571

(95)
(2,161)
(8911
(21,923)
(22,223)

6,412
15,130
44,342
715 178
S2 244.212

117
26
4,227
38 883
38 883

Proocrtv
(8961
Cl 133)
(29,5651
(80 322)
SC43S,343l

No

9130/17 Financial
Statement Balance

-

.

39

Note 9: Permanent Reduction/Transfer to the General Fu nd
The unobligated balance is usually available to cover costs related to seizures and forfeitures and
ce1tain other law enforcement activities. The Consolidated Appropriations Act of 2018 permanently
cancelled $1.1 billion. This permanent reduction or cancellation means that the amount will never be
used for its intended purposes. The cancelled funds were transferred to the General Fund on June I,
2018. In fiscal year 2017, the Consolidated Appropriations Act of2017 permanently cancelled $314
million. The cancelled funds were transferred to the General Fund on May 25, 2017.

Note 10: Distributions Payable
Distributions Payable (state and local agencies and foreign governments) amounted to $43. 1 million
and $32.8 mil lion as of September 30, 2018 and 2017, respectively. Fund management recognizes as
a liability a portion (based on the average of historical pay-out percentage) of the equitable sharing
requests, that were approved or in final stages of approval on September 30, 2018 and 2017,
respectively. Prior experience with the nature of this account indicated that a substantial portion of
these requests were ce1tain to be paid out by the Fund during the following fiscal year.

Note 11: Net Position
Cumulative Results of Operations

The following summarizes components of cumulative results of operations as of September 30, 201 8
and 2017, respectively (dollars in thousands):

2017
$ 2,158,651
431,793
{342,246~

$ 1,435,756

Retained Capital
Unliquidated Obligations
Net Results of Operations

2018
$ 1,835,220
412,978
{812,442)

$ 2,248,198

Un liquidated Obi igations

The fo llowing summarizes the components of un liquidated obligations as of September 30, 2018 and
2017 respectively (dollars in thousands):
2018
2017
$ 259,984
$ 210,405
Equitable Sharing
152,994
221,388
Mandatory
$ 412,978

$

431,793

Note 12: Related Party Transactions
The Fund reimbursed agencies for the purchase of ce1tain capital assets. These assets are reported by
the participating agencies in their financial statements.

40

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT-FISCAL YEAR 2018

Note 13: Strategic Support
31 USC 9705 (g)( 4)(8) allows for the expenditure, without fiscal year limitation, after the reservation
of amounts needed to continue operations of the Fund. This "Strategic Support" balance may be used
for law enforcement activities of any federal agency.
Amounts distributed to other federal agencies for law enforcement activities under "Strategic
Support" requirements amounts to $47.1 mrnion and $39.5 million in fiscal years 2018 and 2017,
respectively.
The fo llowing summarizes Strategic Support payments, net ofTransfers-ln as of September 30, 2018
and 2017, respectively, (dollars in thousands):

2018

2017

Transfers - Out
Transfers - In

$

(49,500)
2,375

$ (39,537)
40

Total

$

(47, 125)

$ (39,497)

Note 14: Secretary's Enforcement Fund
31 USC 9705(b)(5) is another category of permanent indefinite authority. These funds are available
to the Secretary, without fu1ther action by Congress and without fiscal year limitation, for federal law
enforcement purposes of Treasury law enforcement organizations. The source of Section 9705(b)(S)
funds is equitable sharing payments received from the Department of Justice and the U .S. Postal
Service (USPS) representing Treasury's share of folfe iture proceeds from Justice and USPS cases.
Amounts distributed for federal law enforcement purposes of Treasury law enforcement
organizations amounted to $37 .5 million and $5.9 million in fiscal years 2018 and 201 7, respectively.
The following summarizes Secretary's Enforcement Fund payments, net of Transfers-In as of
September 30, 2018 and 2017, respectively, (dollars in thousands):

2018

2017

Transfers - Out
T ransfers - In

$ (38,564)

1,087

$ (7,0 15)
l, l 05

Total

$ (37,477)

$(5,910)

Note 15: Commitments and Contingencies
COMMITMENTS
The Fund is subject to equitable sharing claims from participating state and local law enforcement
agencies. A po1tion of these claims that were in final stages of approval have been recognized as
liabilities as of September 30 (See Note 10).

SECTION lll - FINANCIAL STATEMENTS AND NOTES

41

ln addition to the amounts estimated above, there are other amounts, which may ultimately be shared,
that are not identified at this time.

CONTrNGENCIES
As of September 30, 2018, the Fund had future expenditures of $434.6 million (see Note 17) for
refunds and equitable sharing matters, which are reasonably estimable. The future expenditures are
based upon the best estimate of costs to be incurred for refunds in light of the progress made by
seizing agencies and the relevant United States Attorney's Offices in achieving a resolution to
forfe itures. Additional ly, part of the amount will soon be equitably shared with the Department of
Justice pursuant to a long-standing memorandum of agreement.

In the opinion of the Fund management and legal counsel, there are no pending or threatened
litigation claims for which the amount of potential loss, individually, or in aggregate, will have a
material adverse effect on the Fund's financial statements.

Note 16: Disclosures Related to the Statements of Net Cost
Gross costs and earned revenue related to Law Enforcement Programs administered by the Fund are
presented in Treasury's budget functional classification (in thousands) as set out below:

Gross Costs

2018
$ 239,431

$ 221,532

$ 239,431

$ 221,532

2017

Earned Revenues
Net Costs

The Fund falls under the Treasury's budget functional classification related to Administration of
Justice.

42

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT-FISCAL YEAR 2018

Note 17: Disclosures Related to the Statements of Budgetary Resources
The Fund's budgetary obl igations are fully covered by cash on hand in the Fund and Entity
Investments. The Fund does not have borrowing or contract authority and, therefore, has no
repayment requirements, financing sources for repayment, or other terms of borrowing authority.
There are no legal arrangements, outside of normal government wide restrictions, specifically
affecting the Fund 's use of unobligated balances of budget authority.
Adjustments to budgetary resources available at the beginn ing of fiscal years 2018 and 2017 consist
of the following (in thousands):

Recoveries of Prior Year Unpaid Obi igations

2018
$ 16,163

2017
$ 41,094

770

528

16,933

$ 41,622

Other Changes in Unobligated Balance
Total

$

The Fund was required to change its methodology for recognizing remissions and equitable sharing
obligations beginning in FY 2016. Under the newly adopted method, an obligation for refunds or
remissions will be created only upon receipt of a Ruling Letter from the Department of Justice for
judicial forfeiture cases or from Fund member agencies for administrative forfeitures. Additionally,
obligations related to equitable sharing wiU be recognized upon TEOAF's approval of Fund member
agencies' request for transfers and related distribution percentages and amounts on the Decision
Form. Consequently, the Fund has future expenditures and commitments from remissions and
equ itable sharing that will be funded from the September 30, 2018 unobligated balance.
The following shows anticipated reductions to the unobligated balances of budget authority resulting
from these future expenditures and commitments for fiscal years 2018 and 2017.
The change in the methodology for recognizing remissions and equitable sharing obligations was
accounted for as a change in accounting estimate on a prospective basis effective October I, 2015
(See Note 15).
2018
2017
Unobligated balance
$
825,173
$
668,529
Future expenditures (Note 15):
Refund and remissions
(346,150)
(344,498)
Equitable sharing
(60,283)
(88,409)
Total future expenditures
(404,781)
(434,559)
Commitments (Note 15)
(13,633)
(418.414)
(434,559)
Total reductions to unobl igated balance
Unobligated balance net of future expenditures, and
commitments
$
390.614
=$="""""2,,..,.50,.,,.,=1==
15

Note 18: Dedicated Collections
The Fund is classified as a special fund. All its activities are reported as dedicated collections held
for later use.

SECTION Ill - FINANCJAL STATEMENTS AND NOTES

43

Note 19: Payments in Lieu of Forfeiture, Net of Refunds
The following summarizes Payments in Lieu of Forfeiture, Net of Refunds as of September 30, 2018
and 2017, respectively (dollars in thousands):

Payments in Lieu of Forfeiture
Refunds

2018
$ 10,769
(779)

Total.

$

2017
$ 11 ,104
(2,264)

9,990

$

8,840

Note 20: Reconciliation of Net Cost of Operations (Proprietary) to Budget
The reconciliation of Net Cost of Operations to Budget demonstrates the relationship between the
Fund ' s proprietary (net cost of operations) and budgetary accounting (net obligations) information (in
thousands).
2018
2017
Resources Used to Finance Activities:
Budgetary resources obligated
526,228
$ 1,007,425 $
Obi igations incurred
Less: Spending authority from offsetting
(I 6,9332
(41 ,6222
Collections and recoveries
990,492
484,606
Net Obligations
Otber resources
(1,189,5642

Total Resources Used to Finance Activities
Resources Used to Finance Items not Part of the Net
Cost of Operations
Change in budgetary resources obligated for goods,
services and benefits ordered but not yet provided
Other resources or adjustments to net obligated
resources that do not affect net cost of operations
Mortgages and claims
Refunds
Equitable Sharing (federal , state/local and foreign)
Victim restitution
Total Resources Used to Finance Items not Part of the Net
Cost of Operations

44

125,199

l ,124,300

370,096

(2,956)
(779)
(157,299)
(524,763)

(2,450)
(2,264)
(191,854)
(77,1952

438,503

96,333

239,431

Total Resources Used to Finance the Net Cost of Operations
Net Cost of Operations

(359,4072

(199,0722

Transfers - out

$

239,431

221,532
$

221 ,532

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT - FISCAL YEAR 2018

SECTION IV
REQUIRED SUPPLEMENTAL INFORMATION
(UNAUDITED)

THIS PAGE INTENTIONALLY LEFT BLANK

Jntragovernmental Amounts - Assets (Dollars in thousands)
2018

2017
Fund
Balance
with
T reasurl'.

Fund
Balance

with
Partner Agency

Investments

Treasurl'.

Treasury ·
Bureau of the Fiscal
Service

$

Totals

$ 321425

$

$

32,425 ·

Investments

$

35,607

2,574,872

3, 124,344

$ 21524.822

$

$ 3 12~ 344

35 6Q2

lntragovernmental Amounts - Liabilities (Dollars in thousands)
2017
Accounts
Payable

2018
Accounts
Payable

Partner Agency

Depa,tment of Justice

10,820

$

Department of Homeland Security

$

6,309

92,754
2,209

Tax and Trade

131

1,075

Treasury Office of the Inspector
General

2,888

135

Departmental Offices

59,921

348

Treasury Franchise Fund

90

Internal Revenue Service

26,247

Totals

$

133,240

18,095
$

87,782

Intragovernmental Amounts -Revenues and Costs (Dollars in thousands)
2018

B udget Functions

Administration of Justice

2017

Cost to Generate
Exchange
Intra governmental
Revenue

Costs to Generate
Non-Exclumge
lntragovernmental
Revenue

Cost to Generate
Exchange
lntragovernmental
Revenue

Costs to Generate
Non-Exchange
lntragovernmentaJ
Revenue

$

$

$

$

166,916

SECTION IV- REQUIRED SUPPLEMENTAL INFORMATION (UNAUDI TED)

154,824

45

lntragovemmental Amounts - Non-exchange Revenue (Dollars in thousands):
2018
Transfers

In

Partner Agency

Department of Homeland
Security
Internal Revenue Service
Financial Crimes
Enforcement Network
Tax and Trade
Central lnteJJigence Agency
Department of Defense
General Fund

$

(60,833) $
(26,23 1)

(58,742) $
(25,738)

3,462 $

( 1,000)

~J, 189,564) $

23 $
1,121

( 1,1 04,962)

(1,193.026) $

T ransfers
In

90
(982)
770

(1,104,962)

90
18
770

$

46

2,09 1 $
493

Transfers
Out

2017
Net
T ransfers
In (Out)

Transfers
Out

(29.816) $
(16,5 13)

Net
Transfers
In (Out)

(29,793)
(15,392)

(200)

(22)
{3 14,000)
1.144 $

TREASUR Y FORFEITURE FUND ACCOUNTABILIT Y REPORT-FISCA L YEAR 2018

(200)

(22)
(314,000)

(360,55 ll $

(359,407)

SECTIONV
OTHER ACCOMPANYING INFORMATION
(UNAUDITED)

THIS PAGE INTENTIONALLY LEFT BLANK

TREASURY FORFEITURE FUND
Equitable Sharing Summarized by State and U.S. Territories
For the Year Ended September 30, 2018
(Dollars in T housands)
(Unaudited)
State/ U.S. Territories
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
D .C . Washington
Delaware
Florida
Georgia
Guam
Hawai i
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Mar yland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Jersey
New Hampshire
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode lsland
South Carolina
South Dakota
Tennessee
Texas
Utah
Subtotal carried fonvard

Currency Value
$
229
37
2 15

76

Property Value
$

24
407
51

85)

62
24

1060

53

53,304

8
0
4,425

522

2,657
349
30
81

6,864
1,93 1

17
39

13

980
4

48
1,790
307
141
30

4

26
34
234

730
267

212
1,699

402
929
24
27, 137
2,235

113
2,859

231
2

180

363

294
l ,430

26

13

32

39
259

124

945

14
57

7, 10]

2,041

370
$ 122,896

SE CTION V-OTHER ACCOMPANYING IN FORMA TION (UNAUDITED)

$4, 163

47

TREASURY FORFEITURE FUND
Eq uitable Sharing Summa rized by State and U.S. Territories
For the Year Ended September 30, 2018
(Dollars in Thousands)
(Unaudited)

State/U.S. Territories

Subtotal broughtfonvard
Vermont
Virgin Islands
Virginia
Washington
West Virginia
Wisconsin
Wyoming

Totals

Currency Value

Property Value

122,896

4, 163

183
445
190
21
194

123

$123,929

182
I

-~

Summarized above are the currency and propercy values of assets forfe ited and shared w ith state and local
agencies and U.S. Territories participating in the seizure. Thi s supplemental schedule is not a required pa1t of
the financ ial statement of the Department of the Treasury Forfeiture Fund. lnformation presented on this
schedule represents assets physically transferred during the year and, therefore, does not agree w ith total assets
shared with state and local agencies in the financial statements. In addition, the above numbers do not include
the adjustment to present property distributed at net realizable value.

48

TREASURY FORFEITURE FUNDACCOUNTABILJTY REPORT- FISCAL YEAR 2018

TREASURY FORFEITURE FUND
Uncontested Seizures of Currency and Monetary Instruments Valued Over
$100 Thousand Taking More Than 120 Days from Seizure to Deposit in Fund
For the Year Ended September 30, 2018
(Dollars in Thousands)

31 U.S.C. 9705(f)(2)(E) requires the Secretary of the Treasury to report annually to Congress
uncontested seizures of currency or proceeds of monetary instruments over $100 thousand which were
not deposited in the Department of the Treasury Forfeiture Fund within 120 days of the seizure date.
There were 50 administrative seizures over $100 thousand over 120 days old totaling $21,173 that had not
been transferred from the Seized Currency Suspense Account to the Treasury Forfeiture Fund as of the
end of FY 2018.

SECTION V - OTHER ACCOMPANYING JNFORMA TJON (UNAUDITED)

49

TREASURY FORFEITURE FUND
Analysis of Revenue and Expenses and Distributions
For the Year Ended September 30, 2018
(Dollars in Thousands)
Revenue, Expenses and Distributions by Asset Category:
Revenue
Vehic les
Vessels
Aircraft
General Property
Real Property
Currency and monetary instruments
Less:
Mortgages and claims
Refunds
Add:
Excess of net revenues and financing sources over total program
expenses
Total

20,734
5,759
5,759
18,430
64,504
1,187,164
1,302,350

$

Expenses and
Distributions
$

167,134
212,946
68,603
675,902
26,474
151,291
1,302,350

Less:
Mmtgages and claims
Refunds
Add:
Excess of net revenues and financ ing sources over total program
expenses
Total

(2,956)
(779)

$1 .298.615

$ 1.298.615

$ 616,580

$ 247,448

3,708
137,873
18,799
627
524,763

1,302,350

Revenue, Transfers, Expenses and Distributions by Type of
Disposition:
Sales of property and forfeited currency and monetary instruments
Reimbursed storage costs
Assets shared with state and local agencies
Assets shared with other federal agencies
Assets shared with foreign countries
Victim Restitution
Destructions
Pending disposition

(2,956)
(779)

130,235
137,873
18,799
627
524,763
156,282
86,323
1,302,350

(2,956)
(779)

(2,956)
(779)

$ 1,298.615

$ 1,298,615

The revenue amount of$1,298,615 is from the Statement of Changes in Net Position. This supplemental
schedule "Analysis ofRevenues, Expenses and Distributions" is required under the Treasury Forfeiture Fund
Act of 1992.

50

TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT- FISCAL YEAR 2018

TREASURY FORFEITURE FUND
Information Required by 31 U.S.C. 9705(t)
For the Year Ended September 30, 2018
(Dollars in Thousands)
The Treasury Forfeiture Fund Act of 1992, 31 U.S.C. 9705(t), requires the Secretary of the T reasury to
transmit to Congress, no later than February 1, of each year, certain information. The following
summarizes the required information.
(1)

A report on:

(A) The estimated total value of p roperty fo rfeited with respect to which funds were not deposited in the
Department of the Treasury Forfeiture Fund during the preceding fiscal year under any law
enforced or administered by the Department of the Treasury law enforcement organizations or the
United States Coast Guard, in the case of fi scal years beginni ng after 1993 .
As reported in the audited financial statements, at September 30, 2018, the Fund had forfeited
property held for sale of $78,263. The realized proceeds will be deposited in the Fund when
the property is sold.
Upon seizure, currency and other monetary instruments not needed for evidence in judicial
proceedings are deposited in a Customs and Border Protection (CBP) suspense account.
Upon forfeiture, it is transferred to the Treasury Forfeiture Fund. At September 30, 2018,
there was $46,734 of forfeited currency and other monetary instruments that had not yet been
transferred to the Fund. This is reported as a part of "Cash and Other Monetary Assets" in
the audited financial statements.

(B) The estimated total value of all such property transferred to any state or local law enforcement
agency.
The estimated total value of all such property transferred to any state or local law
enforcement bureau is summarized by state and U.S. territories. Total currency transferred
was $123,929 and total property transferred was $4,469 at appraised value.
(2)

A report on:

(A) The balance of the Fund at the beginning of the preceding fiscal year.
The total net position of the T reasury Forfeiture Fund on September 30, 2017 which became
the beginning balance for the Fund on October 1, 2017, as reported in the audited financial
statements is $2,248,198.

SECTION V-OTHER ACCOMPANYING INFORMATION (UNAUDJTED)

51

TREASURY FORFEITURE FUND
Information Required by 31 U.S.C. 9705(f)
For the Year Ended September 30, 2018
(Dollars in Thousands)
(B) Liens and mortgages paid and the amount of money s hared with federal, state, local and fore ign Jaw
enforcement bureaus during the preceding fiscal year.

Mortgages and claims expense, as reported in the audited financial statements, was $2,956.
The amount actually paid on a cash basis was not materially different.
The amount of forfeited currency and property shared with federal, and distributed to state,
local and foreign law enforcement bureaus as reported in the audited financial statements was
as follows:

State and local
Foreign countries
Other federal agencies
Victim restitution

Amount
$137,873
627
18,799
524,763

(C) The net amount realized from the operations of the Fund during the preceding fi scal year, the
amount of seized cash being held as ev idence, and the amount of money that has been carried over
into the current fi scal year.

The net cost of operations of the Fund as shown in the audited financial statements is
$239,431.
The amount of seized currency not on deposit in the Fund's suspense account at September
30, 2018, was $656,742. This amount includes some funds in the process of being deposited at
year-end , cash seized in August or September 2018 that is pending determination of its
evidentiary value from the U.S. Attorney, and the currency seized for forfeiture being held as
evidence.
On a budgetary basis, unobligated balances as originally reported on the Office of
Management and Budget Reports, SF-133, "Report on Budget Execution" was approximately
$825,173 for fiscal year 2018. T his excluded $149,613 in FY 2018 rescinded authority tbat
was classified as " temporary". If these figures are added to the unobligated balances at the
end of FY 2018, the figure became $974,786.

52

TREASURY FORFEITURE FUND ACCOUNTA BILITY REPORT-FISCAL YEAR 2018

TREASURY FORFEITURE FUND
Information Required by 31 U.S.C. 9705(f)
For the Year Ended September 30, 2018
(Dollars in Thousands)

(D) Any defendant's prope1ty not fo1feited at the end of the preceding fiscal year, if the equity in such
property is valued at $1 million or more.

The total approximate value of such property for the Treasury Forfeiture Fund, at estimated
values determined by bureau and contractor's officials, and the number of seizures is as
follows:
Bureau
CBP

IRS
U.S. Secret Service

Amount
$ 206,754
1,015,590
40,393

Number
65 seizures
142 seizures
15 seizures

(E) The total dollar value of uncontested seizures of monetary instruments having a value of over $100
thousand which, or the proceeds of which, have not been deposited into the Fund within 120 days
after the seizure, as of the end of the preceding fiscal year.

The total dollar value of such seizures is $21,173. This is also documented on page 49.
(F) The balance of the Fund at the end of the current fiscal year.

The total net position of the Fund at September 30, 2018, as reported in the audited financial
statements is $1,435,756.
(G) The net amount, if any, of the excess unobligated amounts remaining in the Fund at the end of the
preceding fiscal year and available to the Secretary for Federal law enforcement related purposes.

There is no cap on amounts that can be carried forward into Fiscal Year 2018 per the fiscal
year 1997 Omnibus Appropriations Act (PL 104-208).
(H) A complete set of audited financial statements prepared m a manner consistent with the
requirements of the Chief Financial Officers Act of 1990.

The audited financial statements, including the Independent Auditor's Report, are found in
Sections Il and III.
(I) An analysis of income and expense showing revenue received or lost: (i) by property category
(such as general property, vehicles, vessels, aircraft, cash, and real property); and (ii) by type of
disposition (such as sale, remission, cancellation, placement into official use, sharing with state and
local agencies, and destruction).

A separate schedule is presented on page 50.
SECTION V-OTHER ACCOMPANYING INFORMATION (UNAUDITED)

53

REPORT WASTE, FRAUD, AND ABUSE

Treasury OIG Hotline: [phone]
[e-mail]

Gulf Coast Restoration Hotline: [phone].GULF (4853)
[e-mail]. gov
Access Treasury OIG reports and other information online:
www .treasury.gov/ about/organizational-structure/ig

EXHIBIT

•

DEPARTMENT OF THE TREASURY
WASHINGTON, D,C,

ASSISTANT SECRETARY

February 15, 2019

The Honorable Mike Quigley
Chairman
Subcommittee on Financial Services
and General Government
Committee on Appropriations
U.S. House of Representatives
Washington, D.C. 20515

The Honorable John Kennedy
Chairman
Subcommittee on Financial Services
and General Government
Committee on Appropriations
United States Senate
Washington, D.C. 20510

The Honorable Tom Graves
Ranking Member
Subcommittee on Financial Services
and General Government
Committee on Appropriations
U.S. House of Representatives
Washington, D.C. 20515

The Honorable Christopher A. Coons
Ranking Member
Subcommittee on Financial Services
and General Government
Committee on Appropriations
United States Senate
Washington, D.C. 20510

Dear Chairman Quigley, Chairman Kennedy, Ranking Member Graves, and Ranking Member Coons:
Enclosed is the Department of the Treasury's Strategic Support spending proposal for Fiscal Year 2019.
The Strategic Support program is authorized by 31 U.S.C. § 9705(g)(4)(B) and is available to the
Secretary of the Treasury for the law enforcement activities of any federal agency. This plan provides up
to $601 million requested by the Department of Homeland Security to support law enforcement border
security efforts conducted by U.S. Customs and Border Protection. These funds will be available in two
tranches. The first tranche of up to $242 million will be available for obligation 15 days after this letter is
submitted. The second tranche of $359 million will be available for obligation after that date subject to
the receipt of additional anticipated forfeitures.

If you have any questions or need additional information, please contact the Office of Legislative Affairs
at [phone].

David F. Eisner
Assistant Secretary for Management

Enclosure

•

DEPARTMENT OF THE TREASURY
WASHINGTON, D,C,

ASSISTANT SECRETARY

February 15, 2019

The Honorable Nita M . Lowey
Chairwoman
Committee on Appropriations
U.S. House of Representatives
Washington, DC 20515

The Honorable Richard Shelby
Chairman
Committee on Appropriations
United States Senate
Washington, DC 20510

The Honorable Kay Granger
Ranking Member
Committee on Appropriations
U.S. House of Representatives
Washington, DC 20515

The Honorable Patrick Leahy
Vice Chairman
Committee on Appropriations
United States Senate
Washington, DC 20510

Dear Chairwoman Lowey, Chairman Shelby, Ranking Member Granger, and Vice Chairman Leahy:
Enclosed is the Department of the Treasury's Strategic Support spending proposal for Fiscal Year 2019.
The Strategic Support program is authorized by 31 U.S.C. § 9705(g)(4)(B) and is available to the
Secretary of the Treasury for the law enforcement activities of any federal agency. This plan provides up
to $60 I million requested by the Department of Homeland Security to support law enforcement border
security efforts conducted by U.S. Customs and Border Protection. These funds will be available in two
tranches. The first tranche of up to $242 million will be available for obligation 15 days after this letter is
submitted. The second tranche of $359 million will be available for obligation after that date subject to
the receipt of additional anticipated forfeitures.

If you have any questions or need additional information, please contact the Office of Legislative Affairs
at [phone].

Sin - ~ ~

David F. Eisner
Assistant Secretary for Management

Enclosure

EXPENSE CATEGORIES

FY19
Proposed
Amount

STRATEGIC SUPPORT FUND (SS)
. 00

U.S. Border Patrol -

SRATEGIC SUPPORT TOTALS

.000

DESCRIPTIONS/COMMENTS

EXHIBIT 3

Sequencing of Border Barrier Construction Authorities
March 4, 2019
Topline

In Depth:

Section 284

10 U.S.C.
2808

The Fiscal Year (FY) 2019 Appropriation for DHS

Treasury Forfeiture Fund (TFF)

10 U.S.C. 284

DOD Sources:

Congressional Notifications/Engagements:

10 U.S.C. § 2808

Congressional Notifications/Engagements:

EXHIBIT 3

REPROGRAMMING ACTION
Unclassified
Subject: Support for DBS Counter-Drug Activity Reprogramming Action
Appropriation Title: Various Appropriations

Pae:e l of3

DoD Serial Number:

FY 19-01 RA
Includes Transfer?

Yes
(Amo1111ts i11 Thousarids of Dollars)

~omponent Serial Number:
Program Base Renecling
Congressional Action

Program Previously
Approved by Sec Der

Reprogramming Action

Revised Program

Line Item

Quantity

I

Amount

Quantity

I

Amount

Quantity

I

Amount

Quantity

I

Amount

a

b

I

c

d

I

e

f

I

g

h

I

i

This reprogramming action is submitted because this action uses general transfer authority. This
reprogramming action provides funding in support of higher priority items, based on unforeseen military
requirements than those for which originally appropriated; and is determined to be necessary in the national
interest. It meets all administrative and legal requirements and none of the items has previously been denied
by the Congress.
This reprogramming action transfers $1 000.000 million from the Military Personnel, Army 19/ 19 and
Reserve Personnel Am1y 19/19 appropriations to the Drug Interdiction and Counter-Drug Activities,
Defense, 19/19, appropriation. This reprogramming action uses $1,000.000 million of general transfer
authority pursuant to section 8005 of division A of Public Law 115-245 the Department of Defense (DoD)
Appropriations Act 2019· and section I 001 of Public Law 115-232, the John S. McCain National Defense
Authorization Act for Fiscal Year (FY) 2019.

FY 2019 REPROGRAMMING INCREASE:

+1,000,000

Drug Interdiction and Counter-Drug Activities, Defense, 19/19
Budget Activity 01: Counter-Narcotics Support
238,306
238,306

+1,000,000
+1,000,000

1,238,306

Explanation: Funds are required to provide support for counter-drng activities o'f the Department of
Homeland Security (DHS). DHS has identified areas along the southern border of the United States that
are being used by individuals, groups, and transnational criminal organizations as drug smuggling
corridors, and determined that the construction of additional physical barrjers and roads in the vicinity of
the United States border is necessary in order to impede and deny drug smuggling activities. DHS
requests DoD assistance in the execution of projects to replace existing vehicle barriers or dilapidated
pedestrian fencing with new pedestrian fencing, construct roads and install lighting. Title 10 U.S.Code,
Section 284(b)(7) authorizes the DoD to support counterdrug activities of other Federal agencies
through the construction ofroads and fences, and the installation of lighting, to block drug smuggling
corridors across international boundaries of the United States. Such support is funded using DoD' s
Drug Interdiction and Counter-Drug Activities appropriation. This is a base budget requirement.

Approved (Signature and Date)

& {J.,J 4 71 (l Cu.,o 0/}

DD 1415-1

UNCLASSIFIED

Unclassified
REPROGRAMMING ACTION
Subiect: Support for DHS Counter-Drug Activity Reprogramming Action
Appropriation Title: Various Appropriations

Pa2e 2 of3

DoD Serial Number:

FY 19-01 RA
Includes Transfer?

Yes
(Amo11111s i,i Tllousa11ds of Dollars)

::omponent Serial Number:
Program Base Rcnccfi.og
Congressional Action

Program PreYiou ly
ApprO\/Cd by Sec Def

Reprogramming Action

ReYised Program

Line Item

Quanlity

Amounl

Quantity

Amount

Quantily

I

Amount

Quantity

a

b

C

d

e

r

I

g

h

FY 2019 REPROGRAMMING DECREASES:
Military Personnel, Army, 19/19
Budget Activity O1: Pay and Allowances of Officers
14 000 263

I
I

Amount

i

-1,000,000
-993,627
14 000 263

-56,440

13 943 ,823

Explanation: Funds are available due to lower than expected Thrift Savings Plan (TSP) automatic and
matching contributions ($-38.9 million) and Continuation Pay (CP) ($-17.5 million) for military members
enrolled in the new Blended Retirement System (BRS) as a result of fewer than planned opt-ins from the
legacy retirement system. This is base budget funding.
Budget Activity 02: Pav and Allowances of Enlisted
27 151,209

27 151,209

-754,212

26 396 997

Explanation: Funds are available due to a 9 500 Soldier reduction to Army s overall end strength target
(478 000 vice 487,500) as Army refocuses on smart, modest annual growth without compromising quality
in a highly challenging recruiting and retention market. Funds are available from the following programs
stemming from strength reductions and rate-driven adjustments observed in execution to date. This is base
budget funding.
• $325.9 million in basic pay primarily driven by the decrease in projected average strength
• $135. l million in retired pay accrual primarily driven by the decrease in projected average
strength
• $15.9 million in clothing allowances stemming from reduced requirements for non-accession
related uniform purchases
• $13.3 million in incentive pays and family separation allowances reflecting current base budget
execution trends showing a shift toward higher Overseas Contingency Operations execution
• $141.3 million in separation payments, driven by nearly IO thousand fewer projected separations
than seen in fiscal year 2018 fewer oldiers eligible for disability separation in the Integrated
Disability Evaluation System and fewer projected involuntary separations
• $29.0 million in social security tax employer contributions primarily driven by the decrease in
projected average strength
• $27.6 million in enlistment and reenlistment incentives, due to projections for fewer recruitment
contracts with bonus options compared to prior year execution and a smaller than expected cohort
eligible for reenli.stment
• $66.1 million due to lower than expected Thrift Savings Plan (TSP) automatic and matching
contributions ($-41.4 million) and Continuation Pay (CP) ($-24.7 million) for military members
enrolled in the new Blended Retirement System (BRS) as a result of fewer than planned opt-ins
from the legacy retirement system

DD 1415-1

UNCLASSIFIED

REPROGRAMMING ACTION
Subiect: Suoo011 for DHS Cow1ter-Drug Activity Reorogrammjng Action
App ropriation Title: Various ppropriations
Unclassified

Paee 3 of3

DoD Se rial Number:

FY 19-01 RA
Includes Transfer?

Yes
(Amo1111ts ill Thousa11ds of Dollars)

~omponent Serial Number:
Pro 0 ram Base Reflecting
Congressional Action

Line Item

Quantity

a

b

I
I

Amount
C

Program Previously
Approved by Sec Def
Quantity
Amount
d

I
I

e

Budget Activity 04: Subsistence of Enlisted Personnel
2,269,930
2 269,930

Reprogramming Action
Quantity

r

I
I

Revised Program

Amount

Quantity

g

h

-57,420

I
I

Amount
i

2212510

Explanation: Funds are available due to a decrease in projected average enlisted strength, lower than
budgeted rate increases (no inflation in 2019 vice 3.4% budgeted), and a slight increase in the amount of
realized collections for members subsisting in Army dining facilities. This is base budget funding.
Budget Activity 05: Permanent Change of Station Travel
1,785 401
1,785,401

-115,726

1669675

Explanation: Funds are available due to lower than budgeted rates of execution that have been realized in
recent move expenditures. This is base budget funding. Specifically:
• $36.9 million is available in accession moves
• $26.1 million is available in rotational moves
• $52.7 million is available in separation moves
Budget Activity 06: Other Military Personnel Costs
317 883

317,883

-9,829

308,054

Explanation: Funds are available due to a lower-than-projected number of former soldiers receiving
unemployment compensation payments. This is base budget funding.
Reserve Personnel, Army, 19/19
Budget Activity O1: Reserve Component Training and Support
4,874 662
4,871 312

-6.373
-6,373

4,864,939

Explanation: Funds are available due to lower than expected Thrift Savings Plan (TSP) automatic and
matching contributions for military members enrolled in the new Blended Retirement System (BRS) as a
result of fewer than planned opt-ins from the legacy retirement system. This is base budget funding.

DD 1415-1

UNCLASSIFIED

EXHIBIT 3

Executive SecretmJ'

U.S. Department or Homelan d Securit~
Washingcon. DC 20528

Homeland
Security
February 25 , 2019
MEMORANDUM FOR:

CAPT Hallock N. Mohler Jr.
Executive Secretary
Department of Defense (DoD)

FROM:

Cbristi~a Bobb · !!)dlr\f-,,
Executive Secretary
Department of Homeland Security (DHS)

SUBJECT:

Request for Assistance Pursuant to 10 U .S.C. § 284

;i~)r.1

I. Overview
As the government department tasked with border security, the Department of Homeland
Security (DHS), through U.S. Customs and Border Protection (CBP), is requesting that
the Department of Defense assist DHS in its effo11s to secure the southern border. The
Secretary has directed me to transmit this request for assistance to your attention. This
memorandum supersedes the February 22, 2019 version .

In Section 102 of the IUegal Immigration Reform and Immigrant Responsibility Act of
1996, as amended (IIRIRA), 8 U.S.C. § 1103 note, Congress has directed DHS to
construct border infrastructure in areas of high illegal entry to deter illegal crossing of
both drugs and people into the United States. Pursuant to Section 102, DHS has
identified the areas set forth in Section n below as areas of high illegal entry where CBP
must take action (the Project Areas).
Within the Project Areas, DHS is experiencing large numbers of individuals and
narcotics being smuggled into the country illegally. The Project Areas are also used by
individuals, groups, and transnational criminal organizations as drug smuggling coni.dors.
Mexican Cartels continue to remain dominant in these areas, influencing and controlling
narcotics and human smuggling operations, within theiT respective strongholds.
DHS must use its authority under Section 102 of IIRIRA to install additional physical
barriers and roads in the vicinity of the United States border in order to deter and prevent
illegal crossings within the Project Areas. The construction of border infrastructure
within the Project Areas will support DHS's ability to impede and deny illegal entry and
drug smuggling activities within the Project Areas.

www.dhs.gov

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page2
The Project Areas identified _re adjacent to some of the most densely populated
a
metropolitan areas of Mexico and are also home to some of the strongest and most
violent drug cartels in the world. Deterring and preventing illegal cross-border activity
will help stem the flow of illegal narcotics and entries in these areas. Similarly, the
improved ability to impede, deny, and be mobile within the Project Areas creates a safer
operational environment for law enforcement.
To support DHS's action under Section 102 ofIIRIRA, DHS is requesting that DoD,
pursuant to its authority under 10 U.S.C. § 284(b)(7), assist with the construction of
fences roads, and lighting within the Project Areas to block drug-smuggling corridors
across the international boundary between the United States and Mexico.

II. Capabilities Requested
Within the Project Areas there is existing vehicle fence and dilapidated pedestrian
fencing. Vehicle fencing is intended to stop vehicles from illegally entering the United
States, but can be climbed over or under by individuals. Pedestrian fencing is intended to
prevent and deter individuals and vehicles from illegally crossing into the United States.
DHS requests that DoD assist in the execution of projects, within the Project Areas set
forth below, to: (1) replace existing vehicle barriers or dilapidated pedestrian fencing
with new pedestrian fencing; (2) construct roads; and (3) install lighting.
The new pedestrian fencing includes a Linear Ground Detection System, which is
intended to, among other functions, alert Border Patrol agents when individuals attempt
to damage, destroy or otherwise harm the barrier. The road construction includes the
construction of new roads and the improvement of existing roads. The lighting that is
requested has an imbedded camera that works in conjunction with the pedestrian fence.
The lighting must be supported by grid power.
The segments of fence within the Project Areas identified below are situated on federal
property. DHS will be responsible for securing, to the extent required, any other real
estate interest or instrument that is required for project execution. In the event a real
estate interest or instrument that is needed for project execution cannot be obtained for a
segment of fence within a Project Area in a time frame that is within the requirements of
this request for assistance, the segment may be withdrawn from this request. In addition,
DHS will be responsible for any applicable environmental planning and compliance to
include stakeholder outreach and consultation associated with the projects.

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page 3

Project Areas:
II.A. El Centro Sector
Within the United States Border Patrol El Centro Sector (El Centro Sector) DHS is
requesting that DoD assist by undertaking road construction, by replacing approximately
15 miles of existing vehicle barrier with new pedestrian fencing, and by installing
lighting in the specific locations identified below.
The specific Project Area identified below is located in Imperial County, California and
has been identified by the Office of National Drug Control Policy (ONDCP) as a High
Intensity Drug Trafficking Area (HIDTA). Multiple local transnational criminal
organizations known for smuggling drugs into Calexico from Mexico using a variety of
tactics, techniques, procedures, and varying concealment methods operate in this area,
including Cartel De Jalisco Nueva Generacion (CJNG) as well as remnants of the
Beltran Leyva Organization and La Familia Michoacana organizations. CJNG, based in
Jalisco, was previously a faction of the Sinaloa Cartel. CJNG broke away from the
Sinaloa Cartel and has become an established Mexican Cartel. The Mexican government
has declared CJNG as one of the most dangerous cartels in the country.
Due to the close proximity of urban areas on both sides of the border, the El Centro
Sector suffers from some of the quickest vanishing times - that is, the time it takes to
illegally cross into the United States and assimilate into local, legitimate traffic. These
quick vanishing times enable the illegal activities of transnational criminal organizations,
whether they are smuggling people or narcotics.
Border Patrol' s own experience with apprehensions between border crossings bears this
out. In fiscal year 2018, there were over 29,000 apprehensions of illegal entrants
attempting to enter the United States between border crossings in the El Centro Sector.
Also in fiscal year 2018, Border Patrol had approximately 200 separate drug-related
events between border crossings in the El Centro Sector, through which it seized over
620 po'1Ilds of marijuana, over 165 pounds of cocaine, over 56 pounds of heroin, and
over 1,600 pounds of methamphetamine.
The specific Project Area is as follows:

•

El Centro Project 1:
o
o

The project begins approximately 10 miles west of the Calexico Port of
Entry continuing west 15 .25 miles in Imperial County.
Start coordinate: 32.63273, -115.922787; End coordinate: 32.652563,
-115.662399

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page4

II.B. Yuma Sector
Within the United States Border Patrol Yuma Sector (Yuma Sector) DHS is requesting
that DoD assist by undertaking road construction, by replacing approximately 36 miles of
existing vehicle barrier and approximately 6 miles of dilapidated pedestrian fencing with
new pedestrian fencing, and by installing lighting in the specific locations identified
below. The specific areas identified below are located in Yuma County, Arizona.
Yuma County has been identified by the ONDCP as a HIDTA. Of particular note is the
operation of the Sinaloa Cartel in this area. The Sinaloa Cartel continues to be the most
powerful cartel in the country and controls illicit networks and operations in the United
States. Despite the arrest of Joaquin "El Chapo" Guzman-Loera, its narcotics business has
continued uninterrupted. As a result, there have been no significant changes within the
Sinaloa Cartel's hierarchy, or any changes in the illicit operations conducted by the
Sinaloa Cartel.
Border Patrol's own experience with apprehensions between border crossings bears this
out. In fiscal year 2018, there were over 26,000 apprehensions of illegal entrants
attempting to enter the United States· between border crossings in the Yuma Sector. Also
during fiscal year 2018, Border Patrol had over 1,400 separate drug-related events
between border crossings in the Yuma Sector, through which it seized over 8,000 pounds
of marijuana, over 78 pounds of cocaine, over 102 pounds of heroin, over 1,700 pounds
of methamphetamine, and over 6 pounds of fentanyl.
The replacement of ineffective pedestrian fencing in this area is necessary because the
older, wire mesh design is easily breached and has been damaged to the extent that it is
ineffective. Additionally, this area is notorious for border violence and narcotics
smuggling. Furthermore, while the deployment of vehicle barrier in the Yuma Sector
initially curtailed the volume of illegal cross-border vehicular traffic, transnational
criminal organizations quickly adapted their tactics switching to foot traffic, cutting the
barrier, or simply driving over it to smuggle their illicit cargo into the United States.
Thus, in order to respond to these changes in tactics, DHS now requires pedestrian
fencing.
The specific Project Areas are as follows:

•

Yuma Project I:
o The project begins approximately I mile southeast of the Andrade Port of
Entry continuing along the Colorado River for approximately 5 miles in
Yuma County.
o Start coordinate: 32.704197, -114.726013; End coordinate: 32.642102,
-114.764632)

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page 5

•

Yuma Project 2:
o The project involves the replacement of two segments of primary
pedestrian fencing in Yuma Sector for a total of approximately 6 miles.
This includes approximately 2 miles of fencing along the Colorado River.
o Start coordinate: 32.37755528, -114.4268201; End coordinate:
32.3579244, -114.3623999;
o The project also includes replacement of primary pedestrian fencing
approximately 17 miles east of the San Luis Port of Entry, on the
Barry M Goldwater Range, continuing east for approximately 4 miles.
o Start coordinate: 32.51419938, -114.8011175; End coordinate:
32.49350559, -114.8116619

•

Yuma Project 3:
o

The project begins approximately 0.4 miles east of the
Barry M. Goldwater Range continuing approximately 31 miles east
through the Cabeza Prieta National Wildlife Refuge in Yuma County.
o Start coordinate: 32.232935, -113.955211; End coordinate: 32.039033,
-113.33411

111.C. Tucson Sector
Within the United States Border Patrol Tucson Sector (Tucson Sector) DHS is requesting
that DoD assist by undertaking road construction, by replacing approximately 86 miles of
existing vehicle barrier with new pedestrian fencing, and by installing lighting in the
specific locations identified below. The specific areas identified below are located in
Pima, Cochise, and Santa Cruz Counties, Arizona.
Pima, Cochise and Santa Cruz Counties have been identified by the ONDCP as a
HIDTA. The Sinaloa Cartel relies on their local associates to coordinate, direct, and
support the smuggling of illegal drugs and aliens from Mexico to the United States.
Since Arizona is contiguous with the U.S.-Mexico International Boundary, the Tucson
and Phoenix metropolitan areas are major trans-shipment and distribution points for
contraband smuggling. Plaza bosses operate as a Sinaloa Cartel leader within their
specific area of operation along the Sonora-Arizona corridor of the U.S.-Mexico
International Boundary.
Border Patrol's own experience with apprehensions between border crossings bears this
out. In fiscal year 2018, there were over 52,000 apprehensions of illegal entrants
attempting enter the United States between the border crossings in the Tucson Sector.
Also in fiscal year 2018 Border Patrol had over 1,900 separate drug-related events
between border crossings in the Tucson Sector, through which it seized over 1,600
pounds of marijuana, over 52 pounds of cocaine, over 48 pounds of heroin, over 902
pounds ofmethamphetamine, and over 11 pounds offentanyl.

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page6

In addition, the absence of adequate pedestrian fencing, either due to the presence of
vehicle barrier only or ineffective pedestrian designs, in the Tucson sector continues to be
particularly problematic as it pertains to the trafficking of illegal narcotics. Rival
transnational criminal organizations frequently employ "rip crews" who leverage the
remote desert environment and lack of infrastructure to steal one another' s illicit cargo
resulting in increased border violence.
The terrain also provides high ground to scouts seeking to protect and warn smuggling
loads being passed through the area. Transnational criminal organizations have
successfully utilized this advantage in furtherance of their illicit activity and for this
reason the area is in need of an improved capability to impede and deny illegal crossings
or people and narcotics. In addition, the area hosts a number of tourist attractions that
allow illegal activity to blend into legitimate activity; avoiding detection and evading
interdiction.
The specific Project Areas are as follows:

•

Tucson Project 1:
o

The project includes replacement of two segments of vehicle barriers. The
first segment begins approximately 2 miles west of the Lukeville Port of
Entry continuing west approximately 30 miles.
o Start coordinate: 32.038278, -113.331716; End coordinate: 31.890032,
-112.850162
o The second segment project begins approximately 3 miles east of the
Lukeville Port of Entry and continues east approximately 8 miles in Pima
County, Arizona.
o Start coordinate: 31.8648, -112.76757; End coordinate: 31.823911,
-112.634298

•

Tucson Project 2:
o

The project includes approximately 5 miles of primary pedestrian fence
replacement around the Lukeville Port of Entry extending from
approximately 2 miles west of the port to approximately 3 miles east of
the port.
o Start coordinate: 31.88999921, -112.850162; End coordinate: 31.8648,
-112.76757

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page7

•

Tucson Project 3:
o The project includes three segments of vehicle barrier replacement
begirming approximately 18 miles west of the Naco Port of Entry and
continuing to approximately 25 miles east of the Douglas Port of Entry (or
approximately 5 miles west of the Arizona/New Mexico state line) for
approximately 20 miles of non-contiguous vehicle barrier replacement in
Cochise County, Arizona.
o Start coordinate: 31.333754, -110.253863; End coordinate: 31.333767,
-110.250286;
o Start coordinate: 31.334154, -110.152548; End coordinate: 31.334137,
-110.147464;
o Start coordinate: 31.333995, -109.453305; End coordinate: 31.332759,
-109 .129344

•

Tucson Project 4:
o The project begins approximately 9 miles east of the Nogales Port of Entry
and continues eastward for approximately 30 miles with approximately 26
miles of non-contiguous vehicle barrier replacement in Santa Cruz and
Cochise Counties, Arizona.
o Start coordinate: 31.333578, -110. 79579; End coordinate: 31.333511,
-110.775333;
o start coordinate: 31.33328, -110.70545; End coordinate: 31.333602,
-110.288665)
o Note: An additional approximately 0.3 miles of new pedestrian fence
could be built between the existing segmented vehicle barrier locations to
fill existing gaps if appropriate real estate interest can be verified

•

Tucson Project 5:
o

o
o
o
o
o

The project includes approximately 2 miles of vehicle barrier replacement
beginning approximately 4.5 miles east of the Sasabe Port of Entry
continuing east in six non-continuous segments for approximately 15
miles in Pima and Santa Cruz Counties, Arizona.
Start Coordinate: 31.460175, -111.473171; End Coordinate: 31.459673,
-111.471584;
Start Coordinate: 31.453091, -111.450959; End Coordinate: 31.449633,
-111.440132;
Start Coordinate: 31.440683, -111.412054; End Coordinate: 31.437351,
-111.40168;
Start Coordinate: 31.423471, -111.358336; End Coordinate: 31.422541,
-111.355444;
Start Coordinate: 31.42221, -111.354379; End Coordinate: 31.421321,
-111.351608;

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page 8
o

Start Coordinate: 31.386813, -111.243966; End Coordinate: 31.385462,
-111.239759)

TI.D. El Paso Sector
Within the United States Border Patrol El Paso (El Paso Sector) DHS is requesting that
DoD assist by undertaking road construction, by replacing approximately 70 miles of
existing vehicle barrier with new pedestrian fencing, and by installing lighting in the
specific locations identified below. The specific areas identified below are located in
Luna, Hidalgo and Dona Ana Counties, New Mexico. Luna, Hidalgo and Dona Ana
Counties have been identified by the ONDCP as a HIDTA.
There are three specific transnational criminal organizations of interest operating in the El
Paso Sector - the Sinaloa Cartel as well as remnants of the Juarez Cartel and the Beltran
Leyva Organization. In the El Paso Sector the Sinaloa Cartel employs a variety of tactics,
techniques and procedures depending upon the terrain and environment to move drugs
across the border. While the Sinaloa Cartel has a strong presence and control of
territories at the flanks of the Sector, it does not have full control of the territory
throughout the El Paso Sector. The Juarez Cartel, traditionally a major trafficker of
marijuana and cocaine, has become an active member in opium cultivation and heroin
production.
Border Patrol' s own experience with apprehensions between border crossings bears this
out. In fiscal year 2018, there were over 31,000 apprehensions of illegal entrants
attempting to enter the United States between border crossings in the El Paso Sector.
Also in fiscal year 2018, Border Patrol had over 700 separate drug-related events between
border crossings in the El Paso Sector, through which it seized over 15,000 pounds of
marijuana, over 342 pounds of cocaine, over 40 pounds of heroin, and over 200 pounds
of methamphetamine.
Although the deployment of vehicle barrier in the El Paso Sector initially curtailed the
volume of illegal cross-border vehicular traffic, transnational criminal organizations
quickly adapted their tactics switching to foot traffic, cutting the barrier, or simply
driving over it to smuggle their illicit cargo into the United States.
Thus, in order to respond to these changes in tactics, CBP now requires pedestrian
fencing. Successfully impeding and denying illegal activities or transnational criminal
organizations in this area is further complicated by the close proximity of New Mexico
Highway 9 to the border. In some cases the highway is less than a half a mile, allowing
illegal cross-border traffic to evade detection and apprehension and quickly vanish from
the border area.

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page9
The specific Project Areas are as follows:

•

El Paso Project 1:
o The project includes 46 miles of vehicle barrier replacement beginning
approximately 17.5 miles west of the Columbus Port of Entry continuing
east in non-contiguous segments to approximately 35 miles east of the
Columbus Port of Entry within the Luna and Dona Ana Counties, New
Mexico.
o Start Coordinate: 31.7837, -107.923151; End Coordinate: 31.783689,
- 107.679049;
o Start Coordinate: 31.783672, -107.573919; End Coordinate: 31.783741,
-107.038154

•

El Paso Project 2:
o The proj ect includes 23.51 miles of Vehicle Barrier replacement in noncontiguous segments within Hidalgo and Luna Counties, New Mexico.
The first segmeQ.t begin approximately 5 .1 miles east of the New
Mexico/Arizona Border continuing east 4.55 miles.
o Start Coordinate: 31.332323, - 108.962631; End Coordinate: 31.332292,
-108.885946;
o The second segment begins approximately 3 miles west of the Antelope
Wells Port of Entry to 3 miles east of the port of entry for 6.12 miles of
Vehicle Barrier replacement.
o Start Coordinate: 31.333368, -108.582412; End Coordinate: 31.333407,
-108.47926;
o The third segment begins approximately 20 miles west of the Columbus
Port of Entry extending west 12.84 miles.
o Start Coordinate: 31.783722, -108.182442; End Coordinate: 31.783708,
-107.963193;

m.

Technical Specifications

As set forth above, DHS requires road construction, installation of lighting, and the
replacement of existing vehicle barrier or dilapidated pedestrian fencing with new
pedestrian fencing within the Project Areas. DHS will provide DoD with more precise
technical specifications as contract and project planning moves forward.
Given DHS's experience and technical expertise, DHS plans to coordinate closely with
DoD throughout project planning and execution, to include review and approval of
design specifications, barrier alignment and location, and other aspects of project
planning and execution.

Subject: Request for Assistance Pursuant to 10 U.S.C. § 284
Page 10

IV. Sequencing
The DHS request for assistance includes approximately 218 miles in which DHS requires
road construction, the installation of lighting, and the replacement of existing vehicle
fencing or dilapidated pedestrian fencing with new pedestrian fencing within the Project
Areas. DHS requests that DoD's support under 10 U.S.C. § 284 address the requirements
in order of priority as DoD resources allow. The DHS order of priority is as follows:
1. Yuma Sector Project 1
2. Yuma Sector Project 2
3. El Paso Sector Project 1
4. El Centro Sector Project 1
5. Tucson Sector Project 1
6. Tucson Sector Project 2
7. Tucson Sector Project 3
8. Tucson Sector Project 4
9. Yuma Sector Project 3
10. El Paso Sector Project 2
11. Tucson Sector Project 5

V. Funding
DHS requests that DoD provide the above-referenced border fences, roads, and lighting
on a non-reimbursable basis as support to block drug smuggling corridors.
DHS will accept custody of the completed infrastructure and account for that
infrastructure in its real property records.
DHS will operate and maintain the completed infrastructure.

VI.

Conclusion

PHS requests DoD assistance under 10 U.S.C. § 284 to construct fences, roads, and to
install lighting in order to block drug smuggling corridors in the Project Areas set forth
above. The Projects Areas set forth above are also areas of high illegal entry under
IIRIRA § 102(a), and the requested fences, roads, and lighting will assist in deterring
illegal crossings in the Project Areas.

EXHIBIT 3

SECRETARY OF DEFENSE
1000 DEFENSE PENTAGON
WASHINGTON, DC 20301-1000

MAR 2 5 2019
The Honorable Kirstjen Nielsen
Secretary of Homeland Security
Washington, DC 20528
Dear Madam Secretary:
Thank you for your February 25, 2019 request that the Department of Defense provide
support to your Department' s effort to secure the southern border by blocking up to 11 drugsmuggling corridors along the border through the construction of roads and fences and the
installation of lighting.

IO U.S.C. § 284(b)(7) gives the Department of Defense the authority to construct roads
and fences and to install lighting to block drug-smuggling corridors across international
boundaries of the United States in support of counter-narcotic activities of Federal law
enforcement agencies. For the following reasons, I have concluded that the support you request
satisfies the statutory requirements:
• The Department of Homeland Security (DHS)/Customs and Border Protection (CBP)
is a Federal law enforcement agency;
•

DHS has identified each project area as a drug-smuggling corridor; and

• The work requested by DHS to block these identified drug smuggling corridors
involves construction of fences (including a linear ground detection system), construction
of roads, and installation of lighting (supported by grid power and including imbedded
cameras).
Accordingly, at this time, I have decided to undertake Yuma Sector Projects I and 2 and
El Paso Sector Project 1 by constructing 57 miles of 18-foot-high pedestrian fencing,
constructing and improving roads, and installing lighting as described in your February 25, 2019
request.
As the proponent of the requested action, CBP will serve as the lead agency for
environmental compliance and will be responsible for providing all necessary access to land. I
request that DHS place the highest priority on completing these actions for the projects identified
above. OHS will accept custody of the completed infrastructure, account for that infrastructure
in its real property records, and operate and maintain the completed infrastructure.

The Commander, U.S. Army Corps of Engineers, is authorized to coordinate directly
with DHS/CBP and immediately begin planning and executing up to $ I B in su port to
DHS/CBP by undertaking the projects identified above.

Additional support may be available in the future, subject to the availability of funds and
other factors.

o;t;;b,lU.

Patrick M. Shanahan
Acting

2

EXHIBIT 35

ADAM SM[Tfl, WASHINGTON, CHAIRMAN
SUSAN A DAVIS. CAI.JFORNIA
JAM R. LANGEVIN, RH0D£ ISlANO
RICK LARSEN, WASHINGTON
JIM COOPER, TENNESSEE
JOC COURTNEY, CONNECTICUT
JOHN GAIIAMENDI. CALIFORNIA
JACKIE SPEIER. CALIFORNIA
nJLSI GAB8ARO, HAWArl
DONALD NORCROSS. NEW JERSEY
RUBEN GALLEGO, ARIZONA
SETH MOULTON, MASSACHUSETTS
SALUD 0 . CARBAJAL. CALIFORNIA
ANTHONY G BROWN, MARYUIND. vrcE CHNR
RO KHANNA. CAUFORNIA
WILLIAM R. KEATING, MASSACHUSETTS
FILEMON VELA. TEXAS
ANOV KIM. NEW JERSEY
KENDRA S. HORN, OKIAHOMA
GILBERT RAY CISNE/10S, JR., CALIFORNIA
CHRISSY IIOUJ.AHAN, PENNSYLVANIA
JASON CROW, COI.OAAOO
XOCHITL TORRES SMALL. NEW MEXICO
ELISSA SL01KIN, MICHIGAN
MIKIE SHERRILL, NEW JERSEY
KATIE HILL, CAL~NIA
VERONICA ESCOBAR. TEXAS
DEBRA A. HAAlAND, NEW MEXICO
JARED OOlDEN, MAI E
LORI TIII\HAN MASSACHUSETTS
EI.AINE G. LURIA. VIRGINIA

COMMTITEE ON ARMED SERVICES
ll.~. 1!,ouse ot l\epregentatfbts
~asbington, l)ut 20515- 6035
ONE HUNDRED SIXTE ENTH CO NGRESS

March 26, 2019

WILLIAM M, ' MAC" THORNBERRY TEXAS.
RANKING MEMBER
JOE WILSON, SOUTH CAROLINA
ROB BISHOP, UTAH
MICHAEL R. TURNER. OHIO
MIKE ROGERS, ALABAMA
K. MICHAEL CONAWAY, TEXAS
DOUG lAMBORN, COLORADO
ROBERT J. WITTMAN, VIRGINIA
VICKY HARlliER. MISSOURI
AUSTIN SCOTT, GEORGIA
MO BROOKS, ALABI\MA
PAUL COOK, CALIFORNIA
BRADl.EY BYRNE, AlA8AMA
SAM GRAVliS, MISSOURI
ELISE M. STEFAN IK, NEW YORK
seen DollJARLA\S, TENNESSEE
RALPH LEE ABRAHAM, LOUISIANA
TRENT KEll Y, MISSISSIPPI
MIKE GALLAGHER, WISCONSIN
MATT GAETZ. FLORIDA
DON BACON, NEBRASKA
JIM BANKS, \NOIA A
l!Z CHENEY, WYOM ING
PAUL MfTCH~ll , MICHIGAN
JACK BERGMAN. MletilGAN
MICHAEL WALT?, FLOOIOA
PAUL ARCANGEL!, STAFF DIRECTOR

The Honorable David L. Norquist
Under Secretary of Defense, Comptroller
and Chief Financial Officer
U.S. Department of Defense
Washington, D.C. 20301
Dear Mr. Norquist:
The House Commmee on Armed Services has completed its review of the proposed
reprogramming request FY 19-01 RA. This reprogramming action would transfer ap_proximately
$1.0 billion among fiscal year 2019 appropriations.
The committee denies this request. The committee does not approve the proposed use of
Department of Defense funds to construct additional hysical barriers and roads or install
lighting in the vicinity of the United States border.
Sincerely,

Chairman
AS:msh

EXHIBIT 36

NITA M . LO W EV, NEW YORK, CHAIRWOMAN
MARCY KJ\PTUR, OHIO
PETEil J, VISCL0SkV, INOl~A
JOS~ E. SERRANO, NEW YORK
ROSAL. ()«LAURO, CONNECTICUT
OAVIO E. PRICE, NORrn CAROllNA
LUC ILLE ROVBAL·ALlAflO, CALlfORNIA
SANFORO D. BISHOP. Jo., GEORGIA
BARBARA LEE. CAllfOflNIA
BETIY MCCOLLUM, MINNESOTA
TI I RYAN, OHIO
C. A. DUTCH RUPPERSSEROER, MARYLANO
OEBBIE WASSERMAN SCHULTZ, FLOmOA
HENRY CUEllAR, TEXAS
CHE LUE PINGREE, MAINE
MIKE OUIGLEY, ILll OIS
OEREK KILMER, WASHINGTON
MATT CARlWRIGHT, PENNSV1,YANIA
GRACE MENG, NEW YORK
MARK POCAN, WISCONSIN
KATHERINE M . Cl.AR MASSACHUSEns
PETE AGUILA-". CAL!rOR IA
LOIS FRANKEL, FLORIDA
CHEAf BUSTOS, ILLINOIS
BONNIE WATSON COlEMAN, NEW JERSEY
BRENOA L. LAWRENCE, MICHIGAN
NORM A J. TORRES, CALIFORNIA
CHARLIE CRIST, FLOR/OJ\
ANN KU'IKPATRICK, ARIZONA
EO CASE. HAWAII

(tongrrss of thr <tinitnt ~tatrs
!lou.sr of 1Rcprrsentatiorn
[ommittee on 2lppropriotion.s
~oshingron, 11!)~ 20515-6015

KAY GRANGER. TEXAS
HAROLD ROGERS, KENTUCKY
ROBERT B. ADE AHOLT. ALABAMA
MICHAEL K. SIMPSON, IDI\HO
JOHN R, CARTER. TEX/IS
KEN CALVERT, CALIFORNIA
TOM COLE. OKLAHOMA
MARIO OIAZ,BALART, FLORIDA
TOM GRAVES. GEORGIA
STEVE WOMACK. ARKANSAS
JEFF FORTENBERRY. NEBRASKA
CHUCK FLEISCHMANN. TEN £SSH
JAIME HERRERA BEUTLER, WASHINGTON
OAYlO P. JOYCE, OHIO
ANOV HARRIS, MARYLAND
MARTHA R09Y, I\LA8AMA
MARKE. AMODEI, N VADA
CHRIS SnwART, UTAH
STEVEN ~ PALAZZO, M ISSISSIPPI
DAN NEWHOUSE. WASHINGTON
JOflN R MOOlENMR, M ICHIGAN
JOHN H. RUTHERFORD, flORIOA

WllL HURO, TEXAS

March 26, 2019
SHALANDA YOUNG
CLERK ANO STAFF DIRECTOR
12111122!!-2711

The Honorable David L. Norquist
Under ecretary of Defense, Comptroller
Department of Defense
Washington, DC 20301
Dear Mr. ecretary:
The Committee has received and reviewed the re uested re_Qrogramming action, FY 1901 RA, submitted to the Committee on March 25, 2019, which proposes the transfer of$) billion
from fiscal year 2019 Military Personnel, Army and Army Reserve accounts to the Drug
Interdiction and Counter Drug Activities account for the p oses of erecting a wall on the U.S.
southern border.
The Committee denies the request.
The Defense Appropriations Act of2019 was enacted on September 28, 2018, and
inherent in the enactment is the specific allocation of appropriations and the execution of funds
as called for under the Constitution between the Congress and the Executive Branch. Article 1
states, "No Money shall be drawn from the Treasury, but in Consequence of Appropriations
made by Law". The reprogramming transmitted by the Department denies the Congress and the
Committee on Appropriations those stated ConstitutionaJ prerogatives; these funds were neither
requested nor appropriated for the activities described in the reprogramming. With this unilateral
action, the historic and unprecedented comity that has existed between the Committee and the
Department has been breached.

r'()D
~

~
Peter J. Vis losky
Chairman
Defense Subcommittee

----

EXHIBIT

Chapter 12
C
12:

Reprogramming
and Transfer
Authority

4.

Subdivisions of an appropriation contained in the agency’s budget request
or in conference or committee reports are not legally binding upon the
department or agency concerned unless they are specified in the
appropriations act itself. Newport News Shipbldg. and Dry Dock Co.,
B-184830, 55 Comp. Gen. 812 (1976). 8

5.

Reprogramming is based on minimal congressional and legislative
guidance. There “is no general statutory provision either authorizing or
prohibiting it and it has evolved largely in the form of informal (i.e. nonstatutory) agreements between various agencies and their congressional
oversight committees.” 9 There are some general limitations to
reprogramming:
a.
b.

Agencies must check appropriations acts for statutory prohibitions
to proposed reprogramming. The DOD Appropriation Act usually
sets out broad guidelines.

c.

6.

Agencies must comply with the requirements of 31 U.S.C. § 1301.

Agencies must follow their internal policies and procedures. For
DOD, there are detailed procedures located in the DOD FMR, vol.
3, ch. 3 and 6.

Items eligible for reprogramming. Congress, in the annual appropriation
act, typically states that DOD may submit actions only for higher priority
items, based on unforeseen military requirements, than those for which the
funds were originally appropriated. See Consolidated Appropriations Act
for FY 2013, Pub.L. No. 113-6, § 8005 (2013).

8

Since the 2009 NDAA, Congress has started adding funding tables to the authorization act so that the conference
reports have the legal force of law. See NDAA 2009, P.L. 110-417, Section 1005, 14 October 2008, for the first
joint explanatory statement. Each year since that time, the NDAA has included funding tables, usually at Division D.
9
GAO, Principles of Fed. Appropriations Law, p. 2-30 to 2-31.

12-8

7.

8.

V.

Items ineligible for reprogramming. Annually, Congress prohibits DOD
from submitting reprogramming actions on items for which funds have
previously been requested from Congress but denied. See e.g.,
Consolidated Appropriations Act for FY 2012, Pub.L. No. 112-74, § 8005
(2012). GAO has stated that in the absence of a similar statutory
provision, a reprogramming that has the effect of restoring funds deleted in
the legislative process is okay. See Propriety of LEAA Funding of Urban
Crime Prevention Program, B-195269, Oct. 15, 1979.
All DOD reprogramming actions must be approved by the DOD
Comptroller. Additionally, some reprogramming actions require notice
to or approval by the appropriate congressional subcommittees. DOD
FMR, vol. 3, ch. 6 and 7. Regarding the routing of requests, “Military
Departments must submit proposed DD 1415 [reprogramming] actions
formally by memorandum addressed to the USD(C) from the Assistant
Secretary (Financial Management and Comptroller) of the Military
Department.” DOD FMR, vol 3, ch. 6, para. 060407.

REPROGRAMMING TYPES
A.

Reprogramming Actions Requiring Prior Approval of Congressional
p g
Committees. DOD FMR vol. 3, ch. 6, para. 060401, A-F. See also Conference
Report accompanying annual DOD appropriations acts.
1.

If a DOD Component (i.e. Army, Air Force, Navy, Marines) wants to
reprogram funds (requiring Congressional approval), then the Component
Comptroller will forward a formal request to the DOD Comptroller
explaining the details of the reprogramming request. The DOD
Comptroller will forward the request to Congress for consideration (the
House Armed Services Committee, the Senate Armed Services
Committee, the House Appropriations Committee, and the Senate
Appropriations Committee). The DOD Comptroller will receive letters
from each of these committees and will notify the Component Comptroller
if its request has been approved or disapproved. If the request is denied,
then the Component Comptroller will not reprogram the funds.

2.

The following types of reprogramming requests require Congressional
approval:

12-9

a.

Any reprogramming that involves an item designated as a
Congressional special interest item.

b.

Any increase in the procurement quantity of a major end item, such
as an individual aircraft, missile, naval vessel, tracked combat
vehicle, and other weapon or torpedo and related support
equipment.

c.

Any reprogramming action that involves the application of funds
which exceed thresholds agreed upon by the congressional
committees and DOD:
(1)

Military Personnel: cumulative increases in a budget
activity10 of $10 million or more.

(2)

Operation and Maintenance: net changes in a budget
activity of $15 million or more.

(3)

Procurement: cumulative increases for any program year of
$20 million or more (or 20 percent of the appropriated
amount, whichever is less); cumulative decreases for any
program year of $20 million or more (or 20 percent of the
appropriated amount, whichever is less).

(4)

Research, Development, Test, and Evaluation (RDT&E):
cumulative increases for any program year of $10 million
or more in an existing program element (or 20 percent of
the appropriated amount, whichever is less); cumulative
decreases for any program year of $10 million or more (or
20 percent of the appropriated amount, whichever is less).

10

“Budget activities” are defined as categories within each appropriation and fund accounts that identify the
purposes, projects, or types of activities financed by the appropriation or fund. DOD FMR, vol. 3, ch. 6. For an
example of budget activities, see the Joint Explanatory Statement of The Committee of Conference for the FY 2012
Consolidated Appropriations Act, which breaks down the budget activities in some detail. For example, prior
appropriation acts required approval if the Air Force wanted to perform a reprogramming action in its Military
Personnel, Air Force appropriation by moving $15 million from one budget activity to another budget activity
(because it exceeded the $10 million threshold for the military personnel appropriation).

12-10

(5)

Additional sub-activity thresholds as specified by
Congress. 11

d.

New Starts: a program, subprogram, modification, project or
subproject not previously justified by DOD and funded by
Congress is considered a “new start.” Congressional committees
discourage the use of reprogramming to initiate new starts.
Congress normally states in the annual DOD Appropriations Acts
that before funding any new start, the requester must first notify the
Secretary of Defense and Congress. 12 For specific notification and
approval procedures. DOD FMR, vol. 3, ch. 6, para. 060401.E.

e.

Termination of programs that result in elimination of certain
procurement programs and subprograms and RDT&E elements,
projects, and subprojects. DOD FMR, vol. 3, ch. 6, para.
060401.E.

f.

Most fund shifting/movements that make use of general transfer
g
g
f
authority. 1
authority. 13 DOD FMR, vol. 3, ch. 6, para. 060401.C, for
y
exceptions.

11

See e.g. Explanatory Statement for the FY 2009 DODAA, listing multiple sub-activities (such as Army Land
Forces Depot Maintenance), for which transfers out of the sub-activity in excess of $15M require Prior Approval
Reprogramming; DOD FMR vol. 3, ch. 6, para. 060401.D.2.
12

Section 8074 states, “None of the funds provided in this Act shall be available for obligation or expenditure
through a reprogramming of funds that creates or initiates a new program, project, or activity unless such program,
project, or activity must be undertaken immediately in the interest of national security and only after written prior
notification to the congressional defense committees.” Consolidated Appropriations Act for FY 2013, Pub.L. No.
113-6, § 8074 (2013).
13

Note that DOD uses a “Reprogramming Action” (DD 1415-1) to accomplish both reprogrammings and transfers.
There are different forms for internal (DD 1415-3) reprogramming actions (again, a term which includes those
actions ‘using transfer authority’), versus those that require prior approval (1415-2). Thus, the wording of the FMR
can be confusing in that it uses the terms “reprogramming” and “transfer” in the same section when referring to this
process. For example, the FMR’s reprogramming chapter states that reprogramming actions that “use general
transfer authority” require Congressional approval. Bottom line, beware the distinction between “reprogramming” as
defined in this outline, and a “reprogramming action” as used in the FMR. See e.g. DOD FMR, vol 3, ch. 6, para.
060401C (March 2011).

12-11

B.

“Internal” Reprogrammings. DOD FMR, vol. 3, ch. 6, para. 060402.
1.

“Internal” reprogrammings are not, technically, formal reprogramming
actions. Internal reprogrammings are “audit-trail type actions processed
within the Department to serve various needs.” DOD FMR, vol. 3, ch. 6,
para. 060402.

2.

Internal reprogrammings fall into three general categories:
a.

Reclassification Actions. Actions involving a reclassification or
realignment of funds within budget activities or within budget line
items/program elements. These reclassifications do not involve
any change in the substance of the program and the funds will be
used to for the same purposes originally contemplated when
submitted to Congress.

b.

Transfer Appropriations. 14 “Transfer accounts” are appropriations
with funding that will be transferred to other appropriations for
execution. Reprogramming to or from transfer accounts is
generally permissible without relying upon statutory authority such
as the general transfer authority. Examples of transfer accounts
include: Overseas Contingency Operations Transfer Fund and
Foreign Currency Fluctuations, Defense.

c.

Procurement Quantities. Approval to increase quantities of major
end items where Congress has specified that approval is not
required.

3.

Technically, funding changes within program elements are not regarded as
“reprogramming.” The Honorable Roy Dyson, House of Representatives,
B-220113, 65 Comp. Gen. 360 (1986).

4.

Internal reprogrammings are not subject to dollar thresholds.

14

The language of the DOD FMR refers to “transfer appropriations” in the chapter on reprogramming, which it then
describes as reprogramming actions related to transfer accounts. See DOD FMR, vol 3, ch. 6, para. 060402.B.

12-12

D.

Restrictions on Reprogrammings. DOD FMR, vol 3, ch. 7.
1.

DOD will not submit a request for reprogramming:
a.

b.

For any project or effort that has been denied specifically by
Congress; or

c.

2.

For any project or effort that has not been authorized unless
permitted under 10 U.S.C. §§ 2803, 2854 or 2853;

To initiate programs of major scope or base realignment actions,
when Congress has not authorized such efforts.

DOD Comptroller sends MILCON reprogrammings (which require
congressional notification or approval) to the House and Senate Armed
Services Committees and the House and Senate Appropriations
Committees.
a.
b.

VII.

Generally, committee review process is non-statutory.
An agency generally will observe committee review and approval
procedures as part of its informal arrangements with the various
committees, although they are not legally binding. GAO,
Principles of Fed. Appropriations Law, p. 2-25.

CONCLUSION
A.

Note the differences between reprogramming and transferring funds.

B.

There are special rules involved in reprogramming for military construction
purposes.

12-18

EXHIBIT

DoD 7000.14-R
2B

Financial Management Regulation

Volume 3, Chapter 6
* September 2015

VOLUME 3, CHAPTER 6: “REPROGRAMMING OF DOD APPROPRIATED
FUNDS”
SUMMARY OF MAJOR CHANGES
All changes are denoted by blue font.
Substantive revisions are denoted by an * symbol preceding the section, paragraph,
table, or figure that includes the revision.
Unless otherwise noted, chapters referenced are contained in this volume.
Hyperlinks are denoted by bold, italic, blue and underlined font.
The previous version dated March 2011 is archived.
PARAGRAPH
060302
060401.E
060407

060502
0612
Appendix B

EXPLANATION OF CHANGE/REVISION
Added requirement that Components use the Enterprise
Funds Distribution (EFD) system for transmitting DD
Form 1414, Base for Reprogramming Actions
submissions
Updates to sub-activity reprogramming requirements
Added requirement that Components use the Enterprise
Funds Distribution (EFD) system to submit
reprogramming actions
Added requirement that Components use the Enterprise
Funds Distribution (EFD) system to update DD Form
1416, Report of Programs
FY 2014 National Defense Authorization Act eliminated
the requirement for the Readiness Transfer Report
FY 2014 National Defense Authorization Act eliminated
the requirement for the Readiness Transfer Report

6-1

PURPOSE
Update
Update
Update

Update
Deleted
Deleted

DoD 7000.14-R

Financial Management Regulation

2B

Volume 3, Chapter 6
* September 2015

is specifically reduced as shown in the project level table or in paragraphs using the phrases
“only for” or “only to” or are congressional special interest items for the purpose of the Base for
Reprogramming (DD Form 1414).
060202.

DD 1415, Reprogramming Action

Reprogramming actions, upon approval of the Department, will be used to request the
prior approval (DD 1415-1) of the congressional committees to realign or transfer appropriated
funds or for internal reprogramming (DD 1415-3) requiring audit-trail type documentation of the
realignment or transfer of appropriated funds.
060203.

DD 1416, Report of Programs

The DD 1416 report reflects the congressionally approved programs as enacted,
reprogramming actions which have been approved, congressionally directed undistributed
amounts and transfers, and reprogramming of funds that have been implemented by a DoD
Component using below-threshold reprogramming flexibility. This report is generated in the
Enterprise Funds Distribution (EFD) system quarterly and submitted 30-days after the end of
each quarter, electronically to the congressional defense committees by the Under Secretary of
Defense (Comptroller) (OUSD(C)), Program and Financial Control Directorate (P&FC), for
Title III, Procurement, and Title IV, Research, Development, Test, and Evaluation and annually
for Title I, Military Personnel, and Title II, Operation and Maintenance appropriations
0603

DETAILED PROCEDURES FOR BASE FOR REPROGRAMMING ACTIONS
060301.

General

The DD Form 1414, Base for Reprogramming Actions, establishes the base from which
reprogramming actions may be taken. It identifies line items within each appropriation covered
in the DoD Appropriations Acts.
060302.

Due Date

Within 30 days following enactment of the Department of Defense (DoD) Appropriations
Act, the Components will submit their DD 1414, Base for Reprogramming Actions to OUSD(C)
P&FC to ensure the Department can submit the Base for Reprogramming Actions to the
congressional committees within 60 days of enactment as required by recurring general
provisions in DoD Appropriations Acts (e.g., section 8007 of division C of Public Law 113-235,
the Department of Defense Appropriations Act, 2015). The DoD Components will submit their
DD 1414 through the Enterprise Funds Distribution (EFD) system, for review prior to
submission to the congressional committees.
060303.

Transmittal

Upon determination by the OUSD(C) P&FC that the Base for Reprogramming Action is
acceptable, OUSD(C) P&FC will submit to OMB, pursuant to OMB Circular A-11, section 22.3.
6-5

DoD 7000.14-R
2B

Financial Management Regulation

Volume 3, Chapter 6
* September 2015

After clearance by OMB, the OUSD(C) P&FC will prepare for printing and transmittal to the
congressional committees. Final printed copies will be distributed to the DoD Components as
well as posted on the Comptroller public website.
060304.

Security Classification

In order facilitate use by the staffs of the congressional defense oversight committees, the
Department will submit an unclassified report. Therefore, each Service shall submit an
unclassified DD 1414 and OUSD(C) P&FC will be responsible for proper security review prior
to publication. All classified programs should be consolidated into a single line item titled
Classified Programs and should be displayed at the end of the Direct Program section.
060305.

Detailed Instructions for Preparation of the DD 1414

Detailed instructions for the Base for Reprogramming Actions for the initial
appropriations act are provided in the appendices to this chapter.
0604

REPROGRAMMING ACTIONS
060401.

Reprogramming Actions Requiring Written Congressional Approval

Two types of reprogramming actions will be used to request the prior approval of the
yp
p g
congressional defense committees. Both requests are submitted using DD 1415-1, Prior
Approval. The first type is for specific requirements, which usually are combined and submitted
monthly. The second type is the annual Omnibus reprogramming action submitted prior to
June 30 of each year, which was established in Fiscal Year (FY) 1991 to streamline the
reprogramming process for the congressional committees and the Department. With the
exception of reprogrammings of National Intelligence Program resources (p g p 060604),
(paragraph
p
p g
g
g
g
),
the USD(C) submits all reprogramming actions to the congressional defense committees. The
( )
p g
g
g
Department is expressly p
p
p
y prohibited from preparing or forwarding to the Congress a prior
p p
g
g
g
p
approval reprogramming action except “for higher p
pp
p g
g
p
g
priority items, based on unforeseen military
y
,
y
requirements, than those for which originally appropriated and in no case where the item for
q
,
g
y pp p
which reprogramming is requested has been denied by the Congress.” It is the Department’s
p g
g
q
y
g
p
p
policy that reprogramming actions, which require prior approval of the congressional committees
y
p g
g
,
q
p
pp
(DD 1415-1), are those which involve the application of funds that:
A.
Increase the procurement quantity of a major end item, such as an
individual aircraft, missile, naval vessel, tracked combat vehicle, and other weapon or torpedo
and related support equipment for which funds are authorized. (In such cases where specific
congressional language is provided allowing for additional quantities to be procured within
appropriated funds, increases to quantities for major end items shall be submitted to the USD(C)
for approval as a DD 1415-3, Internal Reprogramming action.)
B.
Affect an item that is known to be or has been designated as a matter of
special interest to one or more of the congressional committees. In rare instances, when funds
from special interest items are to be reprogrammed from an existing program, subprogram,
6-6

DoD 7000.14-R

Financial Management Regulation

2B

Volume 3, Chapter 6
* September 2015

project, or subproject to another program, subprogram, project, or subproject within the same
procurement line item or program element, letter notification to the congressional committees
may be made. Letters shall be submitted to the congressional committees by the DoD
Component involved only after advance coordination with the applicable OUSD(C) P/B
Directorate.
g
y
y
C.
Use general transfer authority. Any movement of funds between
appropriations or legal subdivisions requires statutory transfer authority. Unless specific transfer
pp p
g
q
y
y
p
authority is p
y provided elsewhere, g
, general transfer authority, which is provided in annual DoD
r
y
Appropriations and Authorization Acts, must be used. Any movement of funds from
supplemental appropriations also uses the g
general transfer authority p
y provided in the annual DoD
Appropriations Act. Section 2214 of Title 10 of the United States Code (
pp p
f
(U.S.C.) and the annual
)
Appropriations Act provide limitations on programs for which general transfer authority may be
pp p
p
p g
g
y
y
used. Such authority may not be used except to provide funds for a higher priority item, based
y
y
p
p
g rp
y
,
on unforeseen military requirements, than the items for which funds were originally
y
q
,
appropriated, and may not be used if the Congress has denied funds for the item. Exceptions to
the use of a DD 1415-1, Prior Approval Reprogramming action, may apply if reclassification of
programs to the proper appropriation for execution is required (i.e., these actions do not change
the purpose for which the funds were originally appropriated). (See paragraph 060402A).
D.
Exceed thresholds agreed upon between the committees. Effective for
FY 2015, the basic reprogramming thresholds agreed upon between the committees and the
Department are: $10 million for military personnel; $15 million for operation and maintenance;
$20 million for procurement; and $10 million for research, development, test, and evaluation.
These thresholds are cumulative from the base for reprogramming value as modified by any
congressional action, to include the initial appropriation, rescissions, supplemental
appropriations, and approved DD 1415 reprogramming actions. The BTR limitation is the net
value of transfers into or out at the specified level. For example, transfers using Below
Threshold Reprogramming (BTR) authority of $5.0 million out of an RDT&E PE line item and
transfer of $4.0 million into the same RDT&E PE line item would result in a total amount
transferred of $1.0 million, with the consequence that the $1.0 million of BTR authority was
used. The thresholds agreed upon between the committees and the Department are as follows:
1.

Military Personnel. A cumulative increase of $10 million or more

in a budget activity.
2.
Operation and Maintenance. A cumulative increase or decrease of
$15 million or more to a budget activity or to a Defense Agency for Operation and Maintenance,
Defense-Wide appropriation. When the congressional committees impose reprogramming
thresholds on specific sub-activity group categories, these threshold amounts are separately
identified on the DD 1414, Base for Reprogramming Actions, and reprogramming restrictions
apply. For example for FY 2015, congressional committees imposed reprogramming thresholds
on specific sub-activity group categories.

6-7

DoD 7000.14-R
2B

Financial Management Regulation

Volume 3, Chapter 6
* September 2015

a.
The committees required the Department to follow Prior
Approval procedures for transfers in excess of $15.0 million out of the following budget
sub-activities:
(1)
Army:
Maneuver units; modular support
brigades; land forces operations support; force readiness operations support; land forces
depot maintenance; base operations support; and facilities sustainment, restoration, and
modernization.
(2)
Navy: Aircraft depot maintenance; ship depot
maintenance; and facilities sustainment, restoration, and modernization.
(3)
Marine Corps: Depot maintenance and facilities
sustainment, restoration, and modernization
(4)
Air Force:
Primary combat forces; combat
enhancement forces; combat communications; and facilities sustainment, restoration, and
modernization.
(5)
Air Force Reserve: Depot maintenance.
(6)

Air National Guard: Depot maintenance.

b.
The committees required the Department to follow Prior
Approval procedures for transfers in excess of $15.0 million into the following budget subactivity:
(1)

Army

National

Guard:

Other

personnel

support/recruiting and advertising.
c.
Defense-Wide O&M: transfer of funds to or from the
levels specified for defense agencies in excess of $15.0 million shall be subject to a PA
reprogramming action.
d.
For FY 2015, the committees further require the Services,
with Comptroller coordination, to provide written notification not later than 15-days prior to
implementing transfers in excess of $15.0 million out of the following budget sub-activities:
(1)

Navy: Mission and other flight operations and

mission and other ship operations
(2)
Air Force: Operating forces depot maintenance;
mobilization depot maintenance; training and recruiting depot maintenance; and
administration and service-wide depot maintenance.
e.
Defense Health Program: For FY 2015, any transfer of
funds from the In-House Care budget sub-activity to any other sub-activity shall be
6-8

DoD 7000.14-R

6-39

Financial Management Regulation

Appendix B – Operation and Maintenance Budget Execution Data

2B

Volume 3, Chapter 6 Appendix B
* September 2015

EXHIBIT

House Armed Services Committee Holds Hearing on Fiscal 2020 Defense
Authorization
CQ Transcriptions
March 26, 2019 Tuesday
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Body
House Armed Services Committee Holds Hearing On Fiscal 2020 Defense Authorization
March 26, 2019 10:00 A.M.
SPEAKERS:
REP. ADAM SMITH (D-WASH.), CHAIRMAN
REP. SUSAN A. DAVIS (D-CALIF.)
REP. JIM LANGEVIN (D-R.I.)
REP. RICK LARSEN (D-WASH.)
REP. JIM COOPER (D-TENN.)
REP. JOE COURTNEY (D-CONN.)
REP. JOHN GARAMENDI (D-CALIF.)
REP. JACKIE SPEIER (D-CALIF.)
REP. TULSI GABBARD (D-HAWAII)
REP. DONALD NORCROSS (D-N.J.)
REP. RUBEN GALLEGO (D-ARIZ.)
REP. SETH MOULTON (D-MASS.)
REP. SALUD CARBAJAL (D-CALIF.)
REP. ANTHONY G. BROWN (D-MD.)
REP. RO KHANNA (D-CALIF.)
REP. WILLIAM KEATING (D-MASS.)
REP. FILEMON VELA (D-TEXAS)

Page 7 of 56
House Armed Services Committee Holds Hearing on Fiscal 2020 Defense Authorization
rebuild facilities and damaged by hurricanes Florence and Michael, up to $3.6 billion to support military construction
projects that will be awarded in fiscal year 2020 instead of fiscal year 2019 so we can resource border barrier
projects under emergency declaration this year, and $3.6 billion in case emergency additional emergency funding is
needed for the border.
Military construction on the border will not come at the expense of our people, our readiness, or our modernization.
To identify the potential pool of sources of military construction funds, DOD will apply the following criteria. No
military construction projects that have already been awarded and no military construction projects with fiscal year
2019 award dates will be impacted. We are solely looking at projects with award dates after September 30, 2019.
No military housing, barracks, or dormitory projects will be impacted. Decisions have not been made concerning
which border barrier projects will be funded through section 2808 authority. If the department's FY 2020 budget is
enacted on time as requested, no military construction project used to source section 2808 projects would be
delayed or canceled.
I appreciate the inherent intra-government complexities of the Southwest border situation. I also want to emphasize
the funds requested for the border barrier amount to less than 1 percent of the national defense top line. As this
committee fully understands, no enemy in the field has done more damage to our military's combat readiness in
years past then sequestration and budget instability, and there is no question today our adversaries are not
relenting.
The instability of a continuing resolution would cost us in three important ways. First, we would be unable to
implement new initiatives like standing up the space command or accelerating our development of hypersonic
capabilities and artificial intelligence. Second, our funding will be in the wrong accounts. We are requesting
significant investments in RDT&D for cyber, space, and disruptive technologies and in O&M for core readiness.
Third, the incremental funding under SER means we lose buying power. This translates to higher costs and
uncertainty for industry in the communities where we operate.
We built this budget to implement our national defense strategy, and I look forward to working with you to ensure
predictable funding so our military can remain the most lethal adaptable and resilient fighting force in the world. I
appreciate the critical role Congress plays to ensure our war fighters can exceed on the battlefield in both today and
tomorrow, and I think our service members, their families, and all those in the Department of Defense for
maintaining constant vigilance as they stand, always ready to protect our freedoms. Thank you.
SMITH: Thank you. Chairman Dunford.
DUNFORD: Chairman Smith, ranking member Thornberry, distinguished members of the committee, thank you for
the opportunity to join Secretary Shanahan and Undersecretary Norquist today. It remains my privilege to represent
your soldiers, sailors, airmen, and Marines. While much of our discussion this morning is going to focus on the
challenges we face, it's important I begin by assuring you that your Armed Forces can deter a nuclear attack,
defend the homeland, meet our alliance commitments, and effectively respond, should deterrents fail.
I believe today we have a competitive advantage over any potential adversary defined as the ability to project power
and fight and win at the time and place of our choosing. But as members of this committee well know, 17 years of
continuous combat and fiscal instability have affected our readiness and eroded the competitive advantage we
enjoyed a decade or more ago. As the secretary highlighted, China and Russia have capitalized on our distraction
and restraints by investing in capabilities specifically designed to challenge our traditional sources of strength. After
careful study, the developed capabilities intended to contest our movement across all domains, sea, air, space,
cyberspace, and land and disrupt our ability to project power.
With the help of Congress, starting in 2017 we began to restore that competitive advantage. Recent budgets have
allowed us to build readiness and invest in new capabilities while meeting current operational commitments. But we
cannot reverse decades of erosion in just a few years. This year's budget submission would allow us to continue
restoring our competitive advantage by approving readiness and up and developing capabilities to enhance our
lethality. It proposes investments in advanced capabilities across all domains, the air, land, space and cyberspace.

Page 8 of 56
House Armed Services Committee Holds Hearing on Fiscal 2020 Defense Authorization
This year's budget also sustains investments in our nuclear enterprise to ensure a safe, secure, and effective
strategic deterrent, the highest priority of the Department of Defense. We've also taken steps to more effectively
employ the force we have today and build a force we need for tomorrow. We've implemented fundamental changes
in our global force management process to prioritize and allocate resources in accordance with the national defense
strategy while building readiness and the flexibility to respond to unforeseen contingencies.
We've also refined our process for developing and designing a future force. A joint concept threat--threat informed
approach supported by a wide body of into lytic analytic work allows us to more deliberately evaluate and prioritize
war fighting requirements. This also enables us to pair emerging technologies with innovative operational concepts.
In closing, I'd like to thank the committee for all we've done to support the men and women in uniform and their
families. Together, we've honored their solemn obligation to never send our sons and daughters into a fair fight.
And with your continued support, we never will.
SMITH: Thank you both. I appreciate that. Keeping in mind and acknowledging ranking member Thornberry's point
that you don't make the policy, necessarily, that you are--you're sent up here to defend, regrettably neither
President Trump nor Chief of Staff Mulvaney are going to testify before our committee, so we have to ask you about
it and get your defense/explanation. And one of the biggest areas in the wall funding that's problematic for this
committee and for the relationship between the Pentagon and Congress is the reprogramming requests.
And it is, you know, a bit of sort of arcane policy even I didn't fully understand. But by and large, the Pentagon is not
allowed to simply move money from one account to another without coming back through the full legislative
process. But given the amount of money that the at the Pentagon and given how much things change, we have
given, through the congressional process, the ability to reprogram I think it was $4 billion last year.
But one of the sort of gentlemen's agreements about that was if you reprogram money, you will not do it without first
getting the approval of all for relevant committees, Defense approps in the House and Senate, and armed services
in the House and the Senate. For the first time since we've done that, on the reprogramming request help fund the
wall, basically you're--you're shifting money from the MILPERS account into the, I forget what the drug--drug safety
account, whatever it is, drug enforcement account so that you can then take it out of the account and put it to the
wall. And you are not asking for our permission. Now, you understand that the result of that, likely, is that the
Appropriations Committee in particular would no longer give-[*]SMITH: -- the Pentagon reprogramming authority. I think that's unfortunate because they need it. And I guess my-my question is what was the discussion like about in deciding to break that rule and what is your view of the
implications for it going forward, in terms of the relationship between the Pentagon and Congress in general, and
specifically how much is it going to hamper you to not have reprogramming authority after this year?
SHANAHAN: Chairman, what was the second part of that? There was the disclosures the discussion-SMITH: --How is it--how is it going to hamper the relationship-SHANAHAN: --That was the-SMITH: --The--I'm sorry, how was it going to hamper your ability to do your job if you don't have any reprogramming
authority going forward?
SHANAHAN: Right, yeah. Well, the discussion, I think you and I have also been party to--to this discussion is that
by unilaterally reprogramming, it was going to affect our ability long-term to be able to do discretionary
reprogramming that we had traditionally done in coordination. It was a very difficult discussion and we understand
the significant downsides of the losing what amounts to a privilege.
The conversation took place prior to the declaration of a national emergency. It was part of the consulting that went
on. We said here are the risks longer-term to the department, and those risks--risks were weighed. And then given
a legal order from the commander-in-chief, we are executing on that order. And as--as we discussed, the first
reprogramming was $1 billion. And I wanted to do it before we had this committee hearing because we've been

Page 9 of 56
House Armed Services Committee Holds Hearing on Fiscal 2020 Defense Authorization
talking about this for some time and I've been deliberately working to be transparent in this process, fully knowing
that there is downsize, which will hamper us.
SMITH: And ultimately you ask for it--you asked for $1 billion yesterday and it's still the plan to ask for $2.4 billion
out of the drug enforcement account?
SHANAHAN: We have--we haven't made the assessment of what--so consider these increments or tranches,
however you want to praise them. Potentially, we could draw $2.5 billion when we look at the--the total general
transfer authority. We think beyond that would be too painful to--being able to continue to maintain readiness and
operations. But we don't know what that next increment of--of funding would look like.
SMITH: Right. And one final question on this piece. You're getting the money because I believe it's the Army, or
was it the Army and the Marine Corps-SHANAHAN: --Yeah-SMITH: --That did not meet their end strength goals for-SHANAHAN: --Let me ask David Norquist.
SMITH: Okay, sure.
NORQUIST: So the--the source of the money, as you pointed out at the beginning, is the military personnel
account. The Army was falling short of its recruiting targets by about 9000, 9500. So funds that would have gone to
pay the soldiers, had they been on board, is no longer needed for that purpose. That military personnel account is
more like a mandatory in the sense that if there is no purpose, there's not a lot of--of other uses, and so it's
available for reprogramming under those circumstances.
SMITH: I understand. So for the FY 20 budget, does your personnel request reflect that inability to recruit? Do sort
of factor in, okay, we'd like to have this many, but are not? Does it make sense to give you the same amount of
money from MILPER if it's just going to wind up in the drug enforcement account and then go to building a wall?
SHANAHAN: (OFF-MIC)
NORQUIST: (OFF-MIC) Yes, so we went ahead and plan to the '20 budget off of the--the Army revised its
expectations for next year accordingly, and that's the number that's in the '20 budget, sir.
SMITH: Okay. Final question. So when it comes to the budget overall budget number, and I do have a slight quibble
with the--with the idea that somehow this is all a problem because the Obama administration cut defense. I think in
the extent that we rely on that political talking point, it undercuts the fact that this all happened because of the battle
over the budget. I mean, the budget control act was in the past because the Obama administration decided they
wanted to do it, it was passed because we were literally two days away from not paying our debts. There was a
refusal by the then Republican controlled Congress to raise the debt ceiling and the only deal to be able to raise the
debt ceiling was to agree to sequestration in the budget control act.
It was a bipartisan act of, well, self-flagellation, if you will, in terms of messing up our budget for 10 years to come
just because we didn't have the political courage to live with the consequences of the money we had already spent.
And that led to no end of problems, but it was a bipartisan problem. And really, it's a bipartisan unwillingness to
address the reality that you can't balance the budget while cutting taxes and increasing spending, a choice has to
be made.
But we decided not to make that choice, we decided to punt it into the artificial budget control act sequestration act.
So a little greater honesty about the budget choices we faced is the best way out of this, not, you know, any fault of
the Trump administration or the Obama administration.

Page 56 of 56
House Armed Services Committee Holds Hearing on Fiscal 2020 Defense Authorization
SHANAHAN: I agree. Yes.
HAALAND: Okay. Do you agree with me that the administration's current policy of obstructing transgender
individuals freedom to serve in the United States military essentially makes a mockery of this commitment?
DUNFORD: Congresswoman, just to be clear the current policy that's in place that was signed in 2017 allows
transgender's to serve in the US military.
HAALAND: So they can serve freely right now?
DUNFORD: Today they can.
HAALAND: Okay, very good. And I've heard that I mean an argument is put forth that you know spending is a
concern that they--that we don't want taxpayer money spent on gender dysphoria issues such as psychotherapy,
prescriptions, surgeries and so forth and I just want you to know that we realize that that portion of the budget is
minuscule in comparison to other things like for example erectile dysfunction which took $84 million out of the DOD
budget.
So I just want you to know that I--I support wholeheartedly every single American who wants to serve in our military
that they have an opportunity to do so and that with respect to budgets knowing that it's a minuscule amount that is
spent on transgender troops I don't think that is anything that should dissuade them or us from--from their service
and I yield my time.
SMITH: Thank you. If I could just follow up on that just briefly it--it--the policy that was just announced by the
administration through the DOD is a bit more complicated, Sec. and I talked about this a little bit yesterday and I--I
don't think it is the correct policy. It is not a blanket ban on people who are transgender from serving in the military.
It does however make it very difficult for people depending on where they are at in terms of are they in the service,
are they trying to join, have they had transition surgery, all of those things really, really complicated the ability of
transgender people to serve in the military.
And I also feel that the policy as announced does not accurately reflect the--well, the medical facts but we will--we
will be dealing with that later and I understand you have struggled to try and get the right policy there but it is
considerably more complicated than even I thought at first glance. But I don't think right now the policy meets the
standards that Ms. Haaland was hoping to have in terms of allowing diverse people to serve assuming that they are
qualified, assuming that they can meet the qualifications for whatever job it is they are supposed to do in the
military.
Mr. Thornberry, do you have anything quickly?
THORNBERRY: I do, Mr. Chairman. In the presence of the Sec. and Chairman and the Comptroller I just want to
note that while we have been meeting today Andy Marshall(SP) has passed away. He served--he ran the office of
net assessment from the Nixon administration to the Obama administration.
I can think of fewer people who have had a bigger impact on focusing our defense efforts, our national security in
the right direction than--than Mr. Marshall and we--we talked about a lot of stuff today but I think as General
Dunford started out it's about people. Some of them are not even in uniform but--but it is a remarkable life. He has
been before our committee I don't know how many times over the years so I wanted to note that that passing but
also to--to honor his memory because he made such a difference.
SMITH: And I think that is a very appropriate note to end on. We are adjourned. I thank you, gentlemen.

Load-Date: April 2, 2019

End of Document

EXHIBIT

WE ARE BUILDING THE FIRST NEW BORDER WALL IN A DECADE.
DHS is committed to building a wall at our southern border and building a wall
quickly. Under this President, we are building a new wall for the first time in a decade
that is 30-feet high to prevent illegal entry and drug smuggling.
FACT: Prior to President Trump taking office, we have never built a border wall that
high.
Once funding was provided, DHS began construction of a border wall quickly, in
some locations in as little as nine months from funding to building – a process that
commonly takes two years or more in other parts of Government. By the end of FY
2019, DHS expects to have construction completed or underway for more than 120
miles in the areas it’s most needed by the U.S. Border Patrol. The pace of construction
has picked up as initial limiting factors like land acquisition and funding have been
addressed.
Before

After

The El Centro Sector built approximately two miles of 30' steel bollard wall west of
the Calexico West Port of Entry. The contract was awarded in November 2017,
construction started in February 2018 and was completed in October 2018.
7
9
4
In FY 2017 Congress provided DHS $292 million to build 40 miles of a steel bollard
wall in the San Diego, El Centro and El Paso Sectors – Border Patrol’s highest priority
d
locations – in place of an outdated and operationally ineffective barrier. DHS received
its FY17 funding for border wall construction in May 2017. DHS awarded the first
contract against that funding in November 2017 and began construction three
months later in February 2018. As of November 21, 2018, CBP has constructed more
than 31 of the 40 miles with the remaining 9 miles scheduled for completion by early
2019.
El Centro Project (2.25 miles): Completed.
j
(
5
)
p
El Paso Project (20 miles): Completed
San Diego Primary Project (14 miles): Completion anticipated in May
9
2019.
El Paso Project (4 miles): Construction started in September.
Before

After

The El Centro Sector built approximately two miles of 30' steel bollard wall west of
the Calexico West Port of Entry. The contract was awarded in November 2017,
construction started in February 2018 and was completed in October 2018.
How effective is this new border wall? On Sunday, when a violent mob of 1,000
people stormed our Southern border, we found the newly constructed portions of the
wall to be very effective. In the area of the breach, a group of people tore a hole in the
old landing mat fence constructed decades ago and pushed across the border. U.S.
Border Patrol agents who responded to the area ultimately dispersed the crowd,
which had become assaultive, and apprehended several individuals. All of the
individuals were either apprehended or retreated into Mexico. That evening, the
fence was repaired. There were no breaches along the newly constructed border wall
areas.
In FY18, Congress provided $1.375B for border wall construction which
equates to approximately 84 miles of border wall in multiple locations
across the Southwest border, including:
$251M for a secondary border wall in the San Diego Sector
$445M to construct a new levee wall system in the Rio Grande Valley Sector
$196M to construct a new steel bollard wall system in Rio Grande Valley Sector
$445M for a primary pedestrian wall in San Diego, El Centro, Yuma and Tucson
Sectors
What’s next you might ask? When combined with the funds provided in FY 2017 and
FY 2018, if funded at $5B in FY 2019 DHS expects to construct more than 330 miles
of border wall in the U.S. Border Patrol’s highest priority locations across the
Southwest border.
DHS is positioned to construct 215 miles of Border Patrol’s highest
priority border wall miles including:
~5 miles in San Diego Sector in California
~14 miles in El Centro Sector in California
~27 miles in Yuma Sector in Arizona
~9 miles in El Paso Sector in New Mexico
~55 miles in Laredo Sector in Texas

~104 miles in Rio Grande Valley Sector in Texas
The Bottom Line: Walls Work. When it comes to stopping drugs and illegal aliens
from crossing our borders, border walls have proven to be extremely effective. Border
security relies on a combination of border infrastructure, technology, personnel and
partnerships with law enforcement at the state, local, tribal, and federal level. For
example, when we installed a border wall in the Yuma Sector, we have seen border
apprehensions decrease by 90 percent. In San Diego, we saw on Sunday that
dilapidated, decades-old barriers are not sufficient for today’s threat and need to be
removed so new – up to 30 foot wall sections can be completed.
Last Published Date: December 14, 2018

EXHIBIT

Welcome to the El Paso Sector of the U.S. Border Patrol.
pp
t
This office provides law enforcement support for the counties of El Paso and
d
Hudspeth in the state of Texas and the entire state of New Mexico.
This site provides Sector-related information, including Sector operations, Sector
contact information, where our stations are located, and news.
Thank you for visiting the El Paso Sector web site.
Chief Patrol Agent
Overview
General Information
Challenge Coin
Overview
History
As early as 1904, a small group of mounted Patrol Inspectors, later known as
mounted guards, had operational headquarters at El Paso, Texas. They patrolled the
Mexican border near El Paso on horseback to curb the flow of illegal Chinese aliens.
The area of operation was later extended to include New Mexico and Arizona.
The El Paso Border Patrol Sector was established on July 1, 1924, under the authority
of the Immigration Act approved by Congress on May 28, 1924. This Act created the
Border Patrol as a uniformed law enforcement branch of the Immigration Bureau.
The original El Paso Sector encompassed New Mexico and the three western counties
of Texas. The first officers selected for the new Border Patrol came from the old
mounted guards and Civil Services Register for Railway Mail Clerks.
The newly organized El Paso Border Patrol Station was assigned 25 Patrol Inspectors.
Liquor smuggling from Mexico was a thriving industry and well organized, providing
a means of considerable profit for illegal aliens entering the United States carrying a
load of contraband.
As Border Patrolmen attempted to apprehend the smugglers, gunfights soon began to
break out. Many bloody battles were fought in and around El Paso. Newspaper files
indicate that not one 24-hour period passed in the month of February 1927 without a
report of gun fighting along the border. The newly established Border Patrol built a
reputation of winning most of the gun battles.
After the establishment of the El Paso Station, almost immediately a need was seen to
have officers at outlying locations. Other stations opened within the sector and some
were temporarily closed during the depression years for budgetary reasons.
Area of Responsibility

Today, the El Paso Sector is one of nine Border Patrol Sectors that run along the
Southwest Border of the United States with Mexico. The sector is comprised of eleven
stations and covers the geographical region of the entire state of New Mexico as well
as two counties within far west Texas.
The stations that make up the El Paso sector are:
Alamogordo, New Mexico
Albuquerque, New Mexico
Deming, New Mexico
El Paso, Texas
Fabens, Texas
Fort Hancock, Texas
Las Cruces, New Mexico
Lordsburg, New Mexico
Santa Teresa, New Mexico
Truth or Consequences, New Mexico
Ysleta, Texas
The El Paso Sector employs approximately 2,400 Border Patrol Agent positions, six
permanent vehicle checkpoints and patrols 268 miles of international border. The
sector encompasses 125,500 square miles.
General Information
Chief Patrol Agent: Aaron A. Hull
Deputy Chief Patrol Agent: Chris Clem
Service Area: The El Paso Sector covers the entire state of New Mexico and the two
western most counties in Texas, Hudspeth and El Paso. This consists of 125,500
p
55
square miles, 121,000 square miles in New Mexico and 4,500 square miles in Texas.
There are 268 miles of international boundary.
Sector Headquarters Location: 8901 Montana Avenue, El Paso, Texas
Stations: Stations of the El Paso Sector are located in El Paso, Clint, Fort Hancock,
and Ysleta, Texas and Alamagordo, Albuquerque, Deming, Las Cruces, Lordsburg,
Truth or Consequences, and Santa Teresa, New Mexico. We have one sub-station in
Silver City, New Mexico.
Contact Information: Phone: [phone]; Sector Headquarters Mailing
Address: 8901 Montana Avenue, El Paso, TX 79925-1212
Community Feedback: We strive to provide quality service to our customers. If we
have not lived up to this commitment, we would like to know. If we have met or
exceeded your expectations, please let us know that as well. To comment on the
services provided by this office, please write to the Sector Chief Patrol Agent. If you
feel you were mistreated by a Border Patrol employee or wish to make a complaint of
misconduct by a Border Patrol employee, you may write to the Chief Patrol Agent.
Employment Opportunities: To obtain information about employment
opportunities with the Border Patrol, you may contact this Sector and ask to speak to
a recruiter. Additional recruiter contact information is provided at Locate a Border

Patrol Recruiter. You will find additional information about careers with the Border
Patrol in the Careers section of this Web site.
Public Affairs Office: To receive information concerning community or mediarelated issues, contact the El Paso Sector Public Affairs Office at [phone].
Vehicle Seizure Office: Contact the El Paso Sector at [phone] for vehicle
seizure or asset forfeiture inquiries.
Border Community Liaison: Jose Romero at [e-mail]
Challenge Coin

The El Paso Sector challenge coin, incorporating elements such as the U.S. flag,
representations of Texas and New Mexico, and the motto, "Where the Legend Began."

EXHIBIT

Treasury Forfeiture Fund
Program Summary by Budget Activity
FY 2017

Mandatory

Strategic Support

-8.13%

$25,898

$10,000

-$15,898

-61.39%

TBD

TBD

NA

NA

$515,731

$460,000

($55,731)

-10.81%

($1,397,700)

($400,000)

$997,700

-71.38%

$355,000

$355,000

($5,000)

-1.41%

25

Total FTE

-$39,833

$387,011

Contingent Liabilities

$450,000

($1,398,050)

Rescissions/Cancellations

$489,833

$526,228

Total Cost of Operations

$ Change

$39,768

2

Estimated

$7,014

Secretary’s Enforcement Fund

3

$479,446

1

FY 2019

Actual

Budget Activity

FY 2018

26

26

Estimated

FY 2018 TO FY 2019
% Change

0.00%

1

The Treasury Forfeiture Fund is staffed by Departmental Offices employees and positions are funded via reimbursable agreement.
The FTE are shown here for clarity, but are also reflected in the Departmental Offices chapter in the reimbursable FTE total.
2
For fiscal years 2018 and 2019, Treasury will revise Strategic Support (formerly known as Super Surplus) based on enacted
appropriations and submit a plan to Congress if funding is available, once more is known about actual collections and expenses.
3
FY 2018 full-year appropriations were not enacted at the time the budget was prepared; therefore, the budget assumes this
account is operating under the Continuing Appropriations Act, 2018 (Division D of P.L. 115-56, as amended) and that the 2017
enacted rescission recurs in FY 2018.

Summary

The Treasury Executive Office for Asset
Forfeiture (TEOAF) administers the Treasury
Forfeiture Fund. The Treasury Forfeiture
Fund (the Fund) is the receipt account for
deposit of non-tax forfeitures made pursuant to
laws enforced or administered by participating
Treasury and Department of Homeland
Security agencies. The Fund was established
in 1992 as the successor to what was then the
Customs Forfeiture Fund. The Fund supports
Treasury’s goal of Enhancing National
Security.
The enabling legislation for the Treasury
Forfeiture Fund (Title 31 U.S.C. 9705) defines
the purposes for which Treasury forfeiture
revenue may be used.
Explanation of Budget Activities
Mandatory
($450,000
revenue/offsetting collections)

from

Mandatory expenses represent operating costs
of the Fund, including storing and maintaining
seized and forfeited assets, valid liens and

mortgages, investigative expenses incurred in
pursuing a seizure, information and inventory
systems, remissions, victim restoration, and
certain costs of local police agencies incurred
in joint law enforcement operations.
Following seizure, equitable shares may be
paid to state and local law enforcement
agencies that contributed to the seizure activity
at a level proportionate to their involvement.
Secretary's
($10,000,000
collections)

Enforcement
Fund
from
revenue/offsetting

Secretary’s Enforcement Fund (SEF) expenses
are funded from revenue from equitable shares
received from Department of Justice (DOJ) or
U.S. Postal Service (USPS) forfeitures. These
shares are proportionate to Treasury’s
participation in the overall investigative effort
that led to a DOJ or USPS forfeiture. SEF
revenue is available for federal law
enforcement-related purposes of any bureau
participating in the Fund.
Strategic
Support
(TBD
revenue/offsetting collections)

Department of the Treasury – Budget in Brief

from

Strategic Support (formerly known as Super
Surplus) authority, established by Congress in
31 U.S.C. 9705(g)(4)(B), allows TEOAF to
fund priority federal law enforcement
initiatives with remaining unobligated
balances at the close of the fiscal year, after an
amount is reserved for the next fiscal year’s
y
operations. Recently-enacted large rescissions
p
y
g
have had a severe negative impact on the
g
impact
mp
p
participating member agencies’ investigations.
p g
m
agencies’
g
g
Insufficient
Insufficient and inconsistent funding support,
f
pp ,
uncertainty
y
about
t
future
funding,
g,
investigations disrupted by cash flow
g
p
y
f
flow
p
problems, and inability to obtain necessary
,
y
y
technology/infrastructure in the absence of
gy
t
Strategic Support all undermine both current
g
and future financial investigations and
f
financial
forfeitures.
forfeitures.
t
Contingent Liabilities ($350,000
revenue/offsetting collections)

from

TEOAF tracks future remission payments to
third parties as contingent liabilities.
However, these amounts are not recorded as
obligations from the Fund until the
Department of Justice grants the petition for

remission. The third parties are predominantly
victims of crimes that triggered the forfeiture
(e.g., Ponzi scheme or kleptocracy victims).
Amounts recorded are significant because
remission payments from multiple years are
recorded and carried forward. The amounts
change constantly as payments are made and
amounts for new remission cases are added.
TEOAF considers the amounts recorded as
contingent liabilities as unavailable and
believes that consideration of contingent
liabilities provides a more accurate
representation of the financial position of the
Fund.
Legislative Proposals

P.L. 114-113 rescinded $3,800,000,000 of the
$3,838,800,000 forfeited by BNP Paribas in
2015 and prohibited Treasury from obligating
the remaining balance.
However, the
remaining balance will remain in the Fund
unless returned to the General Fund. Return of
these funds to Treasury is being done solely to
remove them from the Fund’s account, but will
not count as savings because the funds are
already precluded from obligation.

TEOAF Performance Highlights
FY 2015
Budget Activity

FY 2016

FY 2017

FY 2018

FY 2019

Actual

Actual

Actual

Target

Target

98.25

89.09

81.79

80.0

80.0

Performance Measures

Percent of Forfeited Cash
Treasury Forfeiture
Proceeds Resulting from HighFund
Impact Cases

Description of Performance

The TEOAF continues to measure the
performance of the participating law
enforcement bureaus through the use of the
performance measure: percent of forfeited
cash proceeds resulting from high impact
cases.
This measures the percentage of
forfeited cash proceeds resulting from high
impact cases, which are cases resulting in a
cash forfeiture deposit equal to or greater than
$100,000.

Focusing on strategic cases and investigations
that result in high impact forfeitures will do
the greatest damage to criminal organizations
while accomplishing the ultimate objective,
which is to disrupt and dismantle criminal
activity. Member law enforcement bureaus
participating in the Fund have met or exceeded
the performance target since FY 2013.
However; the performance declined from
89.09 percent to 81.79 percent from FY 2016
to FY 2017. This is attributable to large

Department of the Treasury – Budget in Brief

rescissions leading to no Strategic Support
funding available to the participating agencies
in FY 2015 and FY 2016. For FY 2018 and
FY 2019, the target will remain at 80 percent.
The Fund maintains a target of 80 percent
because some cases may be important to
pursue, even if they are not high-impact cases
and result in deposits of less than $100,000.

Department of the Treasury – Budget in Brief

EXHIBIT

Department of the Treasury
Treasury Forfeiture Fund

Congressional Budget
Justification and Annual
Performance Report and Plan

FY 2019

Table of Contents
Section I – Purpose........................................................................................................................ 3
A – Mission Statement ................................................................................................................ 3
B – Summary of the Request ...................................................................................................... 3
1.1 – Appropriations Detail Table .............................................................................................. 6
1.2 – Operating Levels Table ...................................................................................................... 7
D – Appropriations Language and Explanation of Changes ...................................................... 8
E – Legislative Proposals ............................................................................................................ 8
Section II – Annual Performance Plan and Report ................................................................... 9
A – Strategic Alignment ............................................................................................................. 9
B – Budget and Performance by Budget Activity ...................................................................... 9
2.1.1 - Treasury Forfeiture Fund Resources and Measures ....................................................... 9

TEOAF - 2

Section I – Purpose
A – Mission Statement
To affirmatively influence the consistent and strategic use of asset forfeiture by law enforcement
bureaus that participate in the Treasury Forfeiture Fund (the Fund) to disrupt and dismantle
criminal enterprises.
B – Summary of the Request
The Treasury Executive Office for Asset Forfeiture (TEOAF) administers the Fund, which is the
receipt account for deposit of non-tax forfeitures made pursuant to laws enforced or administered
by participating Treasury and Department of Homeland Security (DHS) bureaus. Principal
revenue-producing bureaus include U.S. Customs and Border Protection, U.S. Immigration and
Customs Enforcement, the Internal Revenue Service, and the U.S. Secret Service, among others.
The Fund is a special fund, defined as a Federal fund account for receipts earmarked for specific
purposes and the expenditure of those receipts. The law (31 U.S.C. 9705) allows TEOAF to use
the funds for payment of all proper expenses of seizure or the proceedings of forfeiture and sale.
Revenues deposited in the Fund can be allocated and used as the result of a permanent indefinite
appropriation provided by Congress. A forfeiture process begins once currency or property is
seized. Seized currency is deposited into a suspense account (holding account) until forfeited.
At that time, the forfeited amount is transferred (deposited) to the Fund as revenue. Forfeited
properties are usually sold and the proceeds are also deposited into the Fund as revenue. This
revenue represents budget authority for meeting obligations and expenses of the program.
Expenses of the Fund are set in a relative priority so that operating costs are met first and may
not exceed revenues.
Mandatory expenses represent operating costs of the Fund, including storing and
maintaining seized and forfeited assets, valid liens and mortgages, investigative expenses
incurred in pursuing a seizure, information and inventory systems, remissions, victim
restoration, and certain costs of local police agencies incurred in joint law enforcement
operations. Following seizure, equitable shares may be paid to state and local law
enforcement agencies that contributed to the seizure activity at a level proportionate to
their involvement.
Secr etar y’ s Enfor cement Fund (SEF) expenses are funded from revenue from equitable
shares received from Department of Justice (DOJ) or U.S. Postal Service (USPS)
forfeitures. These shares are proportionate to Treasury’ s participation in the overall
investigative effort that led to a DOJ or USPS forfeiture. SEF revenue is available for
federal law enforcement-related purposes of any bureau participating in the Fund.
Strategic Support (formerly known as Super Surplus) authority, established by
Congress in 31 U.S.C. 9705(g)(4)(B), allows TEOAF to fund priority federal law
enforcement initiatives with remaining unobligated balances at the close of the fiscal
year, after an amount is reserved for the next fiscal year’ s operations.

TEOAF - 3

Priorities: In FY 2019, TEOAF will continue to support the investigations and activities of the
participating law enforcement bureaus. The bulk of TEOAF expenses include supporting
seizures and forfeitures to protect the health and safety of U.S. citizens and the commercial
interests of U.S. businesses from pernicious criminal activity. Funds are expended for seizure,
storage, maintenance, disposition, and destruction and all costs associated with those activities.
TEOAF focuses on supporting cases and investigations that meet the mission of disrupting and
dismantling criminal enterprises. To this end, TEOAF prioritizes major case1 initiatives when
allocating funding to member agencies, including the purchase of evidence and information, joint
operations expenses, investigative expenses leading to seizure, and asset identification and
removal teams. Major case initiatives are aligned directly to the National Money Laundering
and Southwest Border strategies.
TEOAF also combats emerging patterns and practices that threaten our Nation’ s financial
stability. Funds are used to support anti-money laundering/combating financing of terrorism
(AML/CFT) investigations and activities. To be effective, analysis of large data caches and
cryptocurrency-related crime requires large investments in advanced information technology
hardware, software, training, and other capabilities. These investments buttress the AML/CFT
strategy of the Secretaries of Homeland Security and the Treasury. If available, TEOAF plans to
use Strategic Support (formerly super surplus) funds in FY 2019 to support such investments.
Challenges: Recently-enacted large rescissions have had a severe negative impact on the
participating member agencies’ investigations. Insufficient and inconsistent funding support,
uncertainty about future funding, investigations disrupted by cash flow problems, and inability to
obtain necessary technology/infrastructure in the absence of Strategic Support all undermine
g
both current and future financial investigations and forfeitures. FY 2017 total revenue was the
lowest since FY 2007, and the substantial drop in “ base” revenue (revenue from non-major
p
(
non-major
aj
)
forfeitures) that is relied upon to cover basic mandatory costs of the forfeiture program is
especially troubling. Total FY 2017 “ base” revenue was $349 million, as compared to $419
million in FY 2016, $387 million in FY 2015, and $410 million in FY 2014.

1

A major case refers to a case where the forfeiture results in a deposit greater than $5 million, or a case that disrupts,
dismantles, or interrupts money laundering networks or other financial activities that threaten the financial stability,
financial system, or financial interests of the United States.

TEOAF - 4

The table below reflects forfeiture revenue from all sources including direct revenue, reverse
asset sharing, and interest earned.
Forfeiture Revenue from All Sources
$2,000
$1,715

$1,800
$1,600
$1,400
$1,143

Millions

$1,200

$931

$1,000

$884
$785

$800
$600

$579

$556

$795

$524

$516

$400
$200
$0
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015* FY 2016 FY 2017

*FY 2015 data does not include the BNP Paribas S.A. forfeiture in the amount of $3,839 million. Of that
amount, $3,800 million was permanently rescinded and transferred to the newly-created U.S. Victims of
State Sponsored Terrorism Fund (USVSST) as directed by Congress under the Consolidated
Appropriations Act of 2016, Pub. L. 114-113, Div. O, Tit. IV, §404(e) and §405(b). The remainder is
precluded from obligation.

Participating agencies are seeing reluctance in the field to undertake complex major
investigations due to the lack of assurance that their efforts would receive continuous support.
Strategic Support funding is especially critical as a strategic investment in the agencies’
operational capabilities and infrastructure supporting major cases. It provides law enforcement
much-needed flexibility to respond in real time to unanticipated critical needs, such as those
driven by technology advancements or emerging criminal threats. It often serves as seed funding
for innovations that need to be tested and refined prior to full-scale implementation.
It is precisely the most important, high-impact2 financial investigations that suffer the most from
the absence of Strategic Support funding, as they require additional resources and cutting-edge
capabilities (e.g., big data analytics, virtual currency tracking, mobile forensics). Undermining
these major financial investigations will directly impact the ability of Treasury and DHS to
respond to priority threats such as identity theft, fentanyl trafficking, and network intrusion, and
to protect the integrity of the U.S. financial system.
In addition, TEOAF tracks future remission payments to third parties as contingent liabilities.
However, these amounts are not recorded as obligations from the Fund until the Department of
Justice grants the petition for remission. The third parties are predominantly victims of crimes
2

A high-impact case refers to a case resulting in a cash forfeiture deposit equal to or greater that $100,000.

TEOAF - 5

that triggered the forfeiture (e.g., Ponzi scheme or kleptocracy victims). Amounts recorded are
significant because remission payments from multiple years are recorded and carried forward.
The amounts change constantly as payments are made and amounts for new remission cases are
added. TEOAF considers the amounts recorded as contingent liabilities as unavailable and
believes that consideration of contingent liabilities provides a more accurate representation of the
financial position of the Fund.
1.1 – Appropriations Detail Table
Dollars in Thousands
Treasury Forfeiture Fund

FY 2017

FY 2018

FY 2019

Budgetary Resources

Actual

Estim ated 4

Estim ated

FTE

AMOUNT

FTE

AMOUNT

FTE

FY 2018 to FY 2019
$ Change

AMOUNT

FTE

% Change

AMOUNT

FTE

AMOUNT

Revenue/Offsetting Collections
Interest

0

$18,930

0

$24,000

0

$9,000

0

(15,000)

0

-62.50%

Restored Temporary Rescission

0

876,000

0

988,000

0

988,000

0

0

0

0.00%

Restored Sequestration

0

124,327

0

96,050

0

96,690

0

640

0

0.67%

Forfeiture Revenue

0

497,096

0

453,000

0

429,000

0

(24,000)

0

-5.30%

Recovery from Prior Years

0

41,622

0

40,000

0

30,000

0

(10,000)

0

-25.00%

Unobligated Balances from Prior Years

0

1,034,832

0

668,529

0

355,158

0

(313,371)

0

-46.87%

Total Revenue/Offsetting Collections

$2,592,807

$2,269,579

$1,907,848

($361,731)

-15.94%

Expenses/Obligations
Asset Forfeiture
Mandatory 1

25

Secretary's Enforcement Fund
Strategic Support2

$479,446

26

$489,833

26

$450,000

0

($39,833)

0

-8.13%

0

7,014

0

25,898

0

10,000

0

(15,898)

0

-61.39%

0

Total Expenses/Obligations

39,768

0

TBD

0

TBD

0

NA

0

NA

25

$526,228

26

$515,731

26

$460,000

0

($55,731)

0

-10.81%

Rescissions/Cancellations
Sequestration Reduction

3

0

(96,050)

0

(96,690)

0

0

0

96,690

0

-100.00%

Temporary Rescission

0

(988,000)

0

(988,000)

0

0

0

988,000

0

-100.00%

Permanent Cancellation

0

(314,000)

0

(314,000)

0

(400,000)

0

(86,000)

0

Total Rescissions/Cancellations

27.39%

($1,398,050)

($1,398,690)

($400,000)

$998,690

-71.40%

Net Results

$668,529

$355,158

$1,047,848

$692,690

195.04%

Contingent Liabilities

$387,011

$355,000

$350,000

($5,000)

1

0

-1.41%

The Treasury Forfeiture Fund is staffed by Departmental Offices employees and positions are funded via reimbursable agreement.
The FTE are shown here for clarity, but are also reflected in the Departmental Offices chapter in the reimbursable FTE total.
2
For fiscal years 2018 and 2019, Treasury will revise Strategic Support (formerly known as Super Surplus) based on enacted
appropriations and submit a plan to Congress if funding is available, once more is known about actual collections and expenses.
3
Treasury will compute the FY 2019 sequestration reduction once the OMB Report to Congress on the Joint Committee
Sequestration for Fiscal Year 2019 is released.
4
FY 2018 full-year appropriations were not enacted at the time the budget was prepared; therefore, the budget assumes this
account is operating under the Continuing Appropriations Act, 2018 (Division D of P.L. 115-56, as amended) and that the 2017
enacted rescission recurs in FY 2018.

TEOAF - 6

1.2 – Operating Levels Table
Dollars in Thousands
Treasury Forfeiture Fund

FY 2017

FY 2018

FY 2019

Object Classification

Actual

Estim ated

Estim ated

25.2 - Other services from non-Federal sources

$56,124

$60,000

$52,000

25.3 - Other goods and services from Federal sources

159,125

120,000

104,000

19

19

15

200,689

208,729

200,000

32

30

30

43,557

64,953

55,955

26.0 - Supplies and materials
41.0 - Grants, subsidies, and contributions
43.0 - Interests and dividends
44.0 - Refunds
94.0 - Financial transfers

46,682

62,000

48000

Total Non-Personnel

$506,228

$515,731

$460,000

Total Budgetary Resources

$506,228

$515,731

$460,000

25

26

26

FTE

TEOAF - 7

D – Appropriations Language and Explanation of Changes
Appropriations Language
DEPARTMENT OF THE TREASURY
TREASURY FORFEITURE FUND

Explanation of Changes

(CANCELLATION)
Of the unobligated balances available under this heading,
$400,000,000 are hereby permanently cancelled not later than
September 30, 2019.
(INCLUDING RETURN OF FUNDS)
In addition, of amounts in the Treasury Forfeiture Fund,
$38,800,000 from funds paid to the United States Government by
BNP Paribas S.A. as part of, or related to, a plea agreement dated
June 27, 2014, entered into between the Department of Justice and
BNP Paribas S.A., and subject to a consent order entered by the
United States District Court for the Southern District of New York
on May 1, 2015, in United States v. BNPP, No. 14 Cr. 460
(S.D.N.Y.), are hereby returned to the General Fund of the
Treasury.
Note.— A full-year 2018 appropriation for this account was not
enacted at the time the budget was prepared; therefore, the budget
assumes this account is operating under the Continuing
Appropriations Act, 2018 (Division D of P.L. 115-56). The
amounts included for 2018 reflect the annualized level provided by
the continuing resolution.

E – Legislative Proposals
The Fund has no legislative proposals for FY 2019.

TEOAF - 8

P.L. 114-113 rescinded
$3,800,000,000 of the
$3,838,800,000 forfeited
by BNP Paribas in 2015
and prohibited Treasury
from obligating the
remaining balance.
However, the remaining
balance will remain in
the Fund unless returned
to the General Fund.
Return of these funds to
Treasury is being done
solely to remove them
from the Fund’ s account,
but will not count as
savings because the
funds are already
precluded from
obligation.

Section II – Annual Performance Plan and Report
A – Strategic Alignment
The purpose of the Fund is to ensure resources are managed to cover the costs of an effective
asset seizure and forfeiture program, including the costs of seizure or the proceedings of
forfeiture and sale, including the expenses of detention, inventory, security, maintenance,
advertisement, or disposal of the property. Additionally, the Fund is used to support law
enforcement priorities, financial investigative capabilities, and the seizure of physical and
financial resources to disrupt and dismantle criminal enterprises. TEOAF supports the following
Department of the Treasury strategic goal and associated objectives:
Goal 3: Enhance National Security:
o 3.1 Strategic Threat Disruption
o 3.2 AML/CFT Framework
B – Budget and Performance by Budget Activity
2.1.1 - Treasury Forfeiture Fund Resources and Measures
Dollars in Thousands
Treasury Forfeiture Fund Budget Activity
Resource Level

FY 2013

Measures

FY 2016

Actual

Actual

Actual

$908,113

$787,849 $4,360,617

$508,746

$526,228

$515,731

$560,045

$908,113

Budget Activity Total

FY 2015

Actual
Expenses/Obligations

FY 2014

FY 2017

FY 2018

FY 2019

$787,849 $4,360,617

$508,746

$526,228

$515,731

$560,045

Actual Estim ated Estim ated

FY 2014

FY 2015

FY 2016

FY 2017

FY 2017

FY 2018

FY 2019

Actual
Percent of Forfeited Cash
Proceeds Resulting from
High-Impact Cases

FY 2013

Actual

Actual

Actual

Actual

Target

Target

Target

95.09

86.73

98.25

89.09

81.79

80.00

80.00

80.00

Treasury Forfeiture Fund Budget and Performance
($560,045,000 in obligations from revenue/offsetting collections):
The Fund continues to measure the performance of the participating law enforcement bureaus
through the use of the performance measure “ Percent of forfeited cash proceeds resulting from
high-impact cases.” This measures the percentage of forfeited cash proceeds resulting from
cases that yield a cash forfeiture deposit equal to or greater than $100,000.
Focusing on strategic cases and investigations that result in high-impact forfeitures will do the
greatest damage to criminal organizations while accomplishing the ultimate objective, which is
to disrupt and dismantle criminal activity. Member law enforcement bureaus participating in the
Fund have met or exceeded the performance target since FY 2013. However; the performance
declined from 89.09% to 81.79% from FY 2016 to FY 2017. This is attributable to large
rescissions which resulted in no Strategic Support funding available to the participating agencies
in FY 2015 and FY 2016. For FY 2018 and FY 2019, the target will remain at 80 percent. The
Fund maintains a target of 80 percent because some cases may be important to pursue, even if
they are not high-impact cases and result in deposits of less than $100,000.
TEOAF - 9

With the publication of the Treasury Strategic Plan for FY 2018-2022, Treasury will work in FY
2018 to baseline its performance against the new strategic objectives. This could result in
additional changes to performance measures in the FY 2020 Budget.

TEOAF - 10

EXHIBIT

March 28, 2016

Resumption of Equitable Sharing Payments
The Department of Justice is pleased to announce that, effective immediately, the Department is resuming Equitable Sharing payments to State, local, and tribal law enforcement agencies.
As you know, the Bipartisan Budget Act of 2015 included a $746 million permanent reduction, or
“rescission,” that, when combined with the additional rescission of $458 million contained in the
Consolidated Appropriations Act signed into law in December 2015, reduced Asset Forfeiture
Program funds by $1.2 billion. Those rescissions threatened the financial solvency of the Assets
Forfeiture Fund, and forced the Department to take cost-cutting steps across all discretionary
programs, including on December 21, 2015, the deferral of Equitable Sharing payments.
It’s worth repeating that we did not make the decision to defer Equitable Sharing payments
lightly, and it was always our intent to resume payments as soon as it became financially feasible.
Thus, in the months since we had to make that difficult decision, we explored alternative options,
while also keeping a close eye on incoming receipts. And now, we are finally at a point where it is
no longer necessary to continue the deferral. Therefore, effective immediately, we are resuming
payments and agencies will receive the full amount of their share of any approved Equitable
Sharing payments.
In order to help answer any questions you may have, I have attached a fact sheet explaining
the resumption of Equitable Sharing payments. As always, the Department is available if you have
additional specific questions or comments not addressed in this fact sheet. Please direct any
correspondence to [e-mail].
The Department is grateful to our partners for standing by us on our federal law enforcement task forces while the deferral was in effect. We understand this deferral has been difficult
for many of you, as you depend on these resources for your critical law enforcement efforts to
disrupt and dismantle criminal activity. The Department appreciates all the support and patience
that you have afforded to the Department while we worked through this unfortunate, but necessary
response to financial circumstances that were beyond our control.

EXHIBIT 45

United States Government Accountability Office
Washington, DC 20548

January 29, 2009
Congressional Committees
Subject: Secure Border Initiative Fence Construction Costs
Much of the United States’ 6,000 miles of international borders with Canada and
Mexico remains vulnerable to illegal entry of aliens, criminals, and cargo. The
Department of Homeland Security (DHS) apprehends hundreds of thousands of
people and seizes large volumes of cargo entering the country illegally each year;
however, several hundreds of thousands of individuals and an unknown volume of
contraband also enter the United States illegally and undetected. DHS’s U.S. Customs
and Border Protection (CBP) is the agency responsible for securing the nation’s
borders along and between ports of entry.1 In November 2005, DHS announced the
launch of the Secure Border Initiative (SBI), a multiyear, multibillion-dollar program
aimed at securing U.S. borders and reducing illegal immigration. CBP’s SBI program
office is responsible for managing the SBI program and for developing a
comprehensive border protection system. This system has two main components:
SBInet, which employs radars, sensors, and cameras to detect, identify, and classify
the threat level associated with an illegal entry into the United States between the
ports of entry, and SBI tactical infrastructure (TI), fencing, roads, and lighting
intended to enhance U.S. Border Patrol agents’ ability to respond to the area of the
illegal entry and bring the situation to a law enforcement resolution (i.e., arrest). The
current focus of the SBI program is on the southwest border areas between ports of
entry that CBP has designated as having the highest need for enhanced border
security because of serious vulnerabilities.
The Consolidated Appropriations Act, 2008, required DHS to complete construction
by December 31, 2008, of either 370 miles or other mileage determined by the
Secretary, of reinforced fencing along the southwest border wherever the Secretary
determines it would be most practical and effective in deterring smugglers and aliens
attempting illegal entry.2 DHS set a goal to complete approximately 670 miles of
1

At a port of entry location, CBP officers are to secure the flow of people and cargo into and out of the
country, while facilitating legitimate travel and trade.
2

Pub. L. No. 110-161, div. E, § 564(a)(2)(B)(ii), 121 Stat. 1844, 2090-91 (2007) (amending section
102(b)(1) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Pub. L. No. 104208, div. C, 110 Stat. 3009-546, 3009-554, as amended by section 3(2) of the Secure Fence Act of 2006,
Pub. L. No. 109-367, 120 Stat. 2638, 2639). This provision also required the construction of reinforced
fencing along a total of not less than 700 miles of the southwest border where fencing would be most
practical and effective, but it did not establish a deadline for completion of the full 700 miles.

GAO-09-244R Secure Border Initiative Fence Construction Costs

which 81 miles of fencing were constructed. PF 225 is the second pedestrian fencing
project and is expected to result in approximately 210 miles of fence construction.
The VF 300 project is expected to construct approximately 227 miles of vehicle
fencing barriers along the southwest border. SBI program officials explained that the
total fencing miles completed or planned under these projects total 661 because
several fencing segments that were scheduled to be built in calendar year 2008 will
now be constructed through a different project in calendar year 2009 (see table 1).
Table 1: Fence Projects along the Southwest Border
Fence projects
Pedestrian fence miles
81
PF 70
210
PF 225
N/A
VF 300
a
67
Legacy pedestrian fence
N/A
Legacy vehicle fence
Total
358
Source: SBI.

Vehicle fence miles
N/A
N/A
227
N/A
a
76
303

Total miles
81
210
227
67
76
661

Note: N/A = not applicable.
a

Seventy-eight miles of pedestrian fencing and 57 miles of vehicle fencing were in place before the SBI program
began. However, since SBI began construction, some miles of fencing have been removed, replaced or
retrofitted resulting in mileage totals that are different from those we have previously reported.

In an effort to identify lower-cost and easily deployable fencing solutions, CBP
funded a project called Fence Lab in February 2007. Fence Lab tested fence/barrier
prototypes and evaluated them based on performance criteria such as their ability to
disable a vehicle traveling at 40 miles per hour, allowing animals to migrate through
them, and cost-effectiveness. SBI TI program office officials told us these
performance standards apply only to primary fencing, and SBI currently does not
have performance standards for secondary fencing. Each style of fencing has
different costs associated with construction, and the Border Patrol determines which
fencing style is appropriate based on the operational need of a specific geographic
area along the southwest border. Figure 2 shows examples of approved SBI Fence
Lab fencing.

Page 6

GAO-09-244R Secure Border Initiative Fence Construction Costs

Figure 2: Examples of SBI Fence Lab Fencing Styles

In October 2007, we reported that fencing costs vary based on the type of terrain,
materials used, land acquisition, who performs the construction, and the need to
meet an expedited schedule.11 To minimize one of the many factors that add to cost,
in the past, DHS used Border Patrol agents and DOD personnel to construct the
fencing. At that time, CBP officials also reported that they planned to use commercial
labor for future infrastructure projects because using Border Patrol agents took them
away from their other duties and the Department of Defense had notified DHS that
military personnel would no longer be available to build fencing.
Costs of Fencing Completed
As of September 30, 2007, about 73 miles of SBI fencing had been completed by CBP
at a cost of approximately $198 million. Of the 73 miles of fencing, the SBI program
had completed about 70 miles of pedestrian fencing through the PF 70 project at a
cost of approximately $192 million, with per mile costs ranging from $400,000 to $4.8
million and about 1 mile of pedestrian fencing through the PF 225 project at a cost of
about $3.0 million. In addition, approximately 2 miles of vehicle fencing were

11

See GAO, Secure Border Initiative: Observations on Selected Aspects of SBInet Program
Implementation, GAO-08-131T (Washington, D.C.: Oct. 24, 2007).

Page 7

GAO-09-244R Secure Border Initiative Fence Construction Costs

constructed at a cost of $2.8 million. Table 2 summarizes SBI fencing miles, costs,
and cost ranges and average costs as of September 30, 2007.
Table 2: Completed Miles and Cost of SBI Fencing as of September 30, 2007
Dollars in millions
Project
PF 70

Miles completed
70a

Project cost
$192.3

Cost range per mile
$0.4 to 4.8

Average cost per mile
$2.7

PF 225

1b

3.0

4.2

4.2

VF 300

c

2

2.8

1.8

1.8

73

$198.1

N/A

N/A

Total
Source: SBI.
Note: N/A = not applicable.
a

This excludes approximately 5 miles that were completed under PF 70, but were not funded by SBI.

b

Actual fence completed was 0.72 miles.

c

Actual fence completed was 1.6 miles.

As of October 31, 2008, CBP had completed a total of about 215 miles of SBI fencing
at a cost of approximately $625 million. Of the 215 miles of fencing, 75 miles were
completed under PF 70 at a cost of approximately $214 million, 65 miles were
completed under PF 225 at a cost of about $334 million, and 75 miles were completed
under VF 300 at a cost of approximately $78 million. Table 3 summarizes SBI fencing
miles, costs, and cost ranges and average costs as of October 31, 2008.
Table 3: Completed Miles and Cost of SBI Fencing as of October 31, 2008
Dollars in millions
Miles completed

Project cost

Cost range per mile

PF 70

75a

$213.6

$0.4 to 4.8

Average cost per
mile
$2.8

PF 225

65

333.7

2.8 to 15.1

5.1

VF 300

75

78.1

0.2 to 1.8

1.0

215

$625.4

N/A

N/A

Project

Total
Source: SBI.
Note: N/A = not applicable.
a

This excludes approximately 5 miles that were completed under PF 70, but were not funded by SBI.

The per mile cost ranges can be attributed to several factors. For example, by design,
it is less expensive to construct vehicle fencing than pedestrian fencing. Also, as
discussed previously, costs for fencing completed by commercial contractors are
higher than for fencing built by the Border Patrol or the military. In addition,
differences in terrain and other factors, such as whether the fencing is built on public
or private land, can drive cost differences. More specifically, the increase in costs
between the PF 70 and PF 225 projects occurred, in part, because there were minimal
land acquisition costs in fiscal year 2007 when most of PF 70 was being built, while
costs for real estate, labor, and materials increased in fiscal year 2008 when PF 225
was being built. In addition, about 40 percent of PF 70 was built by Border Patrol and

Page 8

GAO-09-244R Secure Border Initiative Fence Construction Costs

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EXHIBIT 46

CQ

Page 1 of 114

CQ Congressional Transcripts
Mar. 14, 2019

Mar. 14, 2019 Revised Final

Senate Armed Services Committee Holds
Hearing on the Defense Budget Posture
LIST OF PANEL MEMBERS AND WITNESSES
INHOFE:

Our meeting will come to order. It's nice to have the Steve Turner,
northeastern state in the audience today to advise us along our line and we
are very pleased to have the Patrick Shanahan, the Acting Secretary of
Defense, General Joseph Dunford, the chairman of the Joint Chiefs of Staff,
David Norquist, and I have to say, David, I enjoyed our breakfast together
the other day and--and I think it--some people think it's pretty outrageous
that we can actually have an audit. I'm glad that--I'm glad that you're in
charge of it.

NORQUIST:

Thank you, sir.

INHOFE:

Thank the panel for their distinguished service to the country and I'm
pleased to see that the Department of Defense budget request for $718.3
billion and the overall national defense request of $750 billion. This amount
is an increase of less than three percent of real growth. You know, we have
a--this manual represents the--the blueprints that we are following right

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Thank you, Mr. Chairman. Secretary Shanahan, the recently released
Missile Defense Review directed a study on operationalizing the Aegis
Ashore site at the arrange facility PMRF on Kauai. You and I discussed this.
We--I have some significant concerns about what operationalizing this site
would do to PMR's ability to meet its testing mission, which I assume you
agree is important. You can--

SHANAHAN:

--No, absolutely, senator And--

HIRONO:

--Thank you. I'll get to the question.

SHANAHAN:

All right.

HIRONO:

As well as the impact of--of removing that testing capacity from PMRF. So
briefly, could you tell us how operationalizing the Aegis ashore site and
Kauai would add to our ability to defend Hawaii from missile threats,
especially as the major missile threat to Hawaii would be an ICBM and the
Aegis ashore is not set up to counter ICBMs.

SHANAHAN:

My understanding of the request and the MDR is that it's a study to assess
taking the test assets and operationalizing them. And as--as you will point
out, the ground-based midcourse defense system that is resident in Alaska

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Page 45 of 114

defends Hawaii. I believe that the study will look at what are other threats
that may be posed to Hawaii and how there might be a layered defense. But
as you pointed out, the test range there is vital capability and capacity were
developing our missile defense systems.

HIRONO:

So I want to make sure that my concerns are in the record. For Secretary
,
Shanahan and General Dunford, two weeks ago, before this committee,
General O'Shaughnessy, the North--Northern command commander
testified that the current situation at our Southern border is, to quote him,
"Not a military threat." Do you agree, Secretary Shanahan, that the situation
in the southern border is not a military threat?

SHANAHAN:

Senator, you--you are referring to General O'Shaughnessy's testimony?

HIRONO:

Yes.

SHANAHAN:

Yeah, what--what I recall from his testimony is he said that it is not a military
threat, he said--he said border security is national security.

HIRONO:

I understand that, but he said specifically that it's not a military threat. I'm
.
asking whether you agree with him that it's not a military threat.

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SHANAHAN:

I agree with him.

HIRONO:

General Dunford?

DUNFORD:

I agree. It's a security challenge, not a military threat.
I

HIRONO:

So you testified, Secretary, Mr. Secretary, that there were 6,000 troops
currently deployed at our southern border. Can you tell us how long they
were going to be there?

SHANAHAN:

The--I'd say 30 or 40 percent of them will be departing in the next month or
-I'd
so when they complete some of their work. And I believe will probably draw
down to between 3 and 4,000.

HIRONO:

Is it something that the president is indicating to you or can he say that I
want you all to remain at the border?

SHANAHAN:

You know, this was part of the tasking from the department of homeland
security. And based on their request to us--

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HIRONO:

--From the president?

SHANAHAN:

From--from the department.

HIRONO:

Yes. Let me get on to a matter that is of great concern to--to some--to a lot of
us, actually. Secretary Shanahan, in your response to Senator Inhofe's
question about refueling the Truman, you stated that going the workforce in
the shipyard is a priority and the move to not refuel the Truman would save 3
$.4 billion over 5 years. And how does canceling three years of shipyard
work grow the workforce there?

SHANAHAN:

Yes, the--the workforce, when--when we look at what is in the shipyards, so
the combination of submarines, new carriers, and then maintenance, all of
that is done in the same shipyards and that workforce moves from project to
project. So when we look at the total employment, the actual total
employment goes up over the period of time in which we are building the
two carriers.

HIRONO:

Frankly, as I talked with some of the people from the shipyards, I'm not sure
that that is the case. And it'll cost about $3.4 billion to refuel the Truman,
which by the way, by not refueling, were only getting about 50 percent of the
Truman's service life. So at the same time, there's $3.6 billion in the

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Testimony & Transcripts
Complete written testimony for this event March 14, 2019

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3/19/2019

EXHIBIT 47

1

expect to have success with 20th century technology against

2

21st century threats.

3

Chairman Inhofe:

4

Thank you very much.

5

Senator Reed?

6

Let me interrupt, Senator Reed, if I might, because we

7
8
9

Which is what we have had.

do have a quorum now.
I will ask the committee to consider a list of 1,818
pending military nominations.

All the nominations have been

10

before the committee the required length of time.

11

Is there

a motion?

12

Senator Reed:

So moved.

13

Senator Fischer:

Second.

14

Chairman Inhofe:

All in favor, say aye.

15

[Chorus of ayes.]

16

Chairman Inhofe:

17

[No response.]

18

Chairman Inhofe:

19

Senator Reed?

20

Senator Reed:

21

General O'Shaughnessy, as I have indicated in my

No?

It carries.

Thank you, Mr. Chairman.

22

opening statement, I have concerns about the use of American

23

military forces along the southern border and a hard time

24

understanding the nature of an emergency that would require

25

military forces when nowhere in the National Defense
23

1

Strategy, the worldwide threat statement from the

2

intelligence community, nor the statement from the Commander

3

of SOUTHCOM indicate that migrant caravans of civilians

4

across the border are a military threat.

5

opening statement, you say -- and I quote -- the threats to

6

our nation from our southern border are not military in

7

nature.

8
9
10
11

In fact, in your

Close quotes.

So just to be clear, in your professional opinion, does
the illegal crossing of the border by civilians represent a
military threat?
General O'Shaughnessy:

Senator, first, I would say

12

first that I do think a secure border does reduce threats to

13

the homeland.

14

Now, specific to your question about is it a military

15

threat that is coming towards us, it is not a military

16

threat, but that is slightly than answering whether the

17

military should be responding to the situation.

18

Senator Reed:

Following up, in your professional

19

opinion again, would a wall be effective in defending a

20

military attack on the United States?

21

General O'Shaughnessy:

Senator, I would say that

22

border security is national security.

I do see that any

23

barrier in place to secure our nation does have some

24

ramifications to our ability to defend against a military

25

threat as well.

Right now, there is not a specific military
24

1

force from the south that we are trying to take action

2

against.

3

In this particular case, though, Senator, I would say

4

over the last 5 months I have spent a tremendous amount of

5

time on the border, as you would imagine, working with our

6

CBP partners.

7

has been clear to me that the Customs and Border Protection

8

personnel very much value the border protection and seeing

9

it, having the awareness, having some impediments, whether

And in all of those trips and discussions, it

10

that be a barrier or wall, et cetera, and then having the

11

ability to respond to it.

12

universal as I have been doing my trips to the border.

13

Senator Reed:

And that has been fairly

And they are civilian law enforcement

14

officials who have a law enforcement mission, and the

15

context of their evaluation is based upon that law

16

enforcement mission.

17

General O'Shaughnessy:

That is correct, Senator.

18

Senator Reed:

19

You have mentioned many real threats that have been

20

articulated in the National Defense Strategy, Russia and

21

China in particular.

22

our southern border but our northern border, the opening of

23

the Arctic, the operations by both China and Russia in the

24

Arctic, and also I think maintaining the capabilities of

25

NORAD.

Thank you.

Many of them really are not focused on

Those are multibillion dollar tasks.
25

Do you think

1

we want our allies to understand that we can defend them

2

too.

3

that means you have to be ready to support their

4

contingencies as well.

That is what extended deterrence is all about, and

5

Senator Cotton:

Thank you, General.

6

I understand that some opponents of our nuclear force

7

or critics of it say that we should not start a new arms

8

race or be engaged in an arms race.

9

based on what you have said here today, that it is much

10

I will simply observe,

cheaper to win an arms race than it is to lose a war.

11

General Hyten:

Yes, sir.

12

Chairman Inhofe:

13

I thank both of you.

Thank you, Senator Cotton.
I will repeat what I said

14

earlier.

This has been a really enlightening session, and

15

you have been the right ones to be here.

16

much.

So thank you very

17

We are adjourned.

18

[Whereupon, at 11:35 a.m., the hearing was adjourned.]

19
20
21
22
23
24
25
111

EXHIBIT 48

Senate Select Committee on Intelligence
29 JANUARY 2019

and its extremist allies present a growing threat, with attacks increasing during the past year.
Implementation of Mali’s peace accord—an essential step for extending governance into terrorist
safe havens in northern and central Mali—probably will be difficult because remaining steps are
politically and financially sensitive.
Nigeria
Nigeria, Africa’s most populous country and the largest economy, probably will face a contentious
presidential election in February 2019 and sustained attacks from Boko Haram and ISIS-West Africa
(ISIS-WA). Abuja is also facing continued violence in the politically sensitive Middle Belt region. .
Sudan and South Sudan
Violence and the humanitarian crisis in South Sudan are likely to persist this year, while Sudan probably
wants to improve relations with the United States but will continue reaching out to other partners to boost
its economy. In South Sudan, the peace agreement signed between the government and opposition
groups in September 2017 faces delays and implementation difficulties. Acute food insecurity and
constraints on aid access—resulting from poor infrastructure, seasonal rains, active hostilities, and
government- and opposition-imposed impediments—are likely to contribute to an ongoing
humanitarian crisis. Meanwhile, Khartoum, despite facing antigovernment protests over its poor
economic situation, is committed to pursuing efforts to improve its relationship with the United
States and wants to be removed from the US State Sponsors of Terrorism List. Sudan also will
strengthen ties to other partners—including Russia and Turkey—in an effort to diversify its
partnerships and improve its economic situation.
Horn of Africa
The states of East Africa will confront internal tension and a continuing threat from al-Shabaab, despite
improved intergovernmental relations and Ethiopian-Eritrean rapprochement. Elite competition,
corruption, and poor coordination among security services in Somalia will hamper efforts to tamp
down violence. The African Union Mission in Somalia (AMISOM) is unlikely to engage in
aggressive offensive operations against al-Shabaab in advance of the mission’s scheduled withdrawal
from Somalia by 2021. Ethiopia and Eritrea will struggle to balance political control with demands
for reform from domestic constituencies.
Central Africa
Political unrest across Central Africa is likely to persist through 2019, compounding humanitarian
challenges and armed conflict. The Democratic Republic of the Congo (DRC) is recovering from its
contentious presidential election in December 2018, as well as dealing with an ongoing Ebola
outbreak and internal displacement crisis. Meanwhile, violence among armed groups in several
regions of the DRC threatens regional and national stability, and violence in eastern DRC impedes
efforts to respond to the Ebola outbreak. The Central African Republic (CAR) is struggling to make
progress toward a peace agreement between the government and multiple armed groups.

THE WESTERN HEMISPHERE
Flagging economies, migration flows, corruption, narcotics trafficking, and anti-US autocrats will present
continuing challenges to US interests, as US adversaries and strategic competitors seek greater influence in
the region. The hemisphere will see several presidential elections this year, including in Argentina,

40

Bolivia, El Salvador, Guatemala, Panama, and Uruguay, providing opportunities for outside
candidates to exploit public frustration with stagnant economic growth, high crime, and corruption.
China and Russia will pursue efforts to gain economic and security influence in the region.
Mexico
Newly inaugurated Mexican President Andres Manuel Lopez Obrador almost certainly will focus on
meeting steep public expectations for improvements on anticorruption and security following his landslide
electoral victory in July. He is likely to pursue mostly practical approaches to US cooperation that
complement his ambitious domestic agenda. Lopez Obrador has promised to reduce violence, in
part by addressing socioeconomic causes, but he has publicly conceded that Mexico’s military must
keep up its public security role in the near term, despite his initial preference to end it. Lopez
Obrador has supported the US-Mexico-Canada Agreement (USMCA) trade deal, probably hoping
to reduce trade-related uncertainty, allowing him to focus on his domestic economic agenda.
However, Mexico’s $1.15 trillion economy remains vulnerable to investor uncertainty that could
weaken the export sector and slow economic growth, which was just 2 percent in 2017. Declining
oil revenue will limit the Mexican Government’s ability to fund Lopez Obrador’s ambitious social
programs and infrastructure projects.
Central America
We assess that high crime rates and weak job markets will spur additional US-bound migrants from the
Northern Triangle—El Salvador, Guatemala, and Honduras—while a political crackdown in Nicaragua
dims that country’s already bleak economic outlook. Illicit migration northward from the region shows
no signs of abating, despite increased messaging by governments to dissuade potential migrants and
stepped-up immigration enforcement by Mexico. Many migrants apparently perceive that traveling
in caravans on the journey north affords a certain level of security, and the decision to do so appears
to result from a combination of individual motivation, encouragement from social media postings,
and politically motivated efforts by some individuals and organizations.
Nicaraguan President Daniel Ortega’s refusal to heed calls for negotiation amid his political
crackdown, which has left more than 300 people dead and contributed to allegations of human
rights abuses, threatens to deepen a recession in one of the region’s weakest economies.

41

Venezuela
Although the regime of Nicolas Maduro will
continue to try to maintain power, he is facing
persistent opposition. Falling oil production,
economic mismanagement, and legal challenges
almost certainly will compound the worsening
economic pressure on the country. Living
standards have collapsed, and hyperinflation and
shortages in basic goods have gripped the
country. Since 2014, the UN International
Organization for Migration estimates that 2-3
million Venezuelans have left the country.
Maduro continues to crack down on the political
and military opposition after a failed
assassination attempt against him in August
2018 and disrupted coup plots in the past 12
months, but the opposition has shown resilience,
as indicated by its challenge to Maduro’s rule
emerging in late January 2019.
Colombia
Colombian President Ivan Duque faces a fraying
peace accord with the former Revolutionary Armed
Forces of Colombia (FARC) while he is working to
stem violence in Colombia’s rural departments,
carry out his coca eradication ambitions, and
manage growing tensions with Caracas. Duque has
ordered increased security operations to curb common crime, threats from Colombia’s insurgent and
criminal groups, and address coca cultivation and trafficking. Coca cultivation in Colombia was at a
record 209,000 hectares in 2017, and crop substitution and eradication programs face coordination
challenges and local resistance.
Cuba
Cuban President Miguel Diaz-Canel will adhere to former President Raul Castro’s blueprint for
institutionalizing one-party rule and socialism in Cuba through constitutional reforms. Diaz-Canel has
acknowledged that Raul Castro, who still commands the ruling Communist Party, remains the
dominant voice on public policy.

42

EXHIBIT 49

CHAIRMAN OF THE JOINT
CHIEFS OF STAFF
INSTRUCTION
Directive current as of
J-3
DISTRIBUTION: A, C, S

20

CJCSI 3710.01B
26 January 2007

DOD COUNTERDRUG SUPPORT
References:

See Enclosure B.

1. Purpose. This instruction promulgates Secretary of Defense (SecDef)
delegation of authority to approve counterdrug (CD) operational support
missions. It also provides, in accordance with (IAW) the National Defense
Authorization Act for 2002, as amended, instructions on authorized types of
DOD CD support to law enforcement agencies (LEA), other government
agencies, and foreign nations.
2. Cancellation. This instruction cancels CJCSI 3710.01A, 30 March 2004.
3. Applicability. This instruction is applicable to Military Departments and
combatant commands and subordinate organizations conducting and
supporting CD operations.
4. Policy. See Enclosure A.
5. Definitions. See the Glossary. Abbreviations and acronyms are established
throughout the text in Enclosure A.
6. Responsibilities. See Enclosure A.
7. Summary of Changes. Pursuant to SecDef discretion, this instruction:
a. Provides authority and guidance to CDRUSSOUTHCOM for domestic
CD/law enforcement activities as a result of the 2006 Unified Command Plan
expanding USSOUTHCOM’s area of responsibility to include Puerto Rico and
the US Virgin Islands.
b. Promulgates SecDef authority to Military Department Secretaries to

CJCSI 3710.01B
26 January 2007
(3) Except for extradition requests, federal LEA requests for
transportation support will be submitted to the supported GCC (or as further
delegated IAW this instruction) in whose area of responsibility the mission is to
originate. The responsible federal LEA, through its parent or national
headquarters, must forward extradition requests to the DOD Executive
Secretary, who will forward approved requests to the Joint Staff for action.
(4) GCCs are not authorized to approve transportation support in direct
tactical support of the operational portions of ongoing LEA or foreign LEA
operations, or of any activities where CD-related hostilities are imminent. If
criminal evidence or prisoners seized by LEAs are brought aboard DOD
aircraft, vehicles, or vessels being used to provide transportation support, such
evidence and/or prisoners will remain solely within the control and custody of
the LEAs.
g. Use of Military Vessels for LEA Operating Bases. The use of military
vessels as a base of operations for LEAs, except when approved under reference
b, requires SecDef and Attorney General approval. The Secretary of Defense
has not delegated authority to approve use of military vessels for LEA operating
bases in the territorial waters of a host nation (HN). Such approval
coordination will be pursued as the same manner in for linguist support
described in subparagraph 4.e. above and include prior notification to DOD
OGC.
h. Equipment Maintenance and Operation Support. Authority is delegated
to approve maintenance and operation support IAW references b and f but does
not include the cost of parts or equipment to be funded under reference b or
other sources.
i. Command, Control, Communications, Computer, and Intelligence (C4I)
and Network Support. Assistance in establishing and maintaining C4I and
networking support to provide improved integration of law enforcement, active
military, and National Guard activities will be IAW reference b, section
1004(b)(8) (as amended).
j. Technology Demonstrations. Technology demonstrations may be
conducted in coordination with the DOD Counternarco-Terrorism Technology
Program Office, and technology requirements may be developed based on
stated LEA needs (10 USC 380).
5. CD Support

Domestic

a. General Delegations. With regard to the general delegations in
paragraph 4 above and the delegations contained in this paragraph, the
Secretary of Defense has delegated approval authority to CDRUSNORTHCOM,
CDRUSSOUTHCOM, and CDRUSPACOM, as appropriate, for the following:
A-5

Enclosure A

CJCSI 3710.01B
26 January 2007
(1) CD support involving no more than 400 personnel for any one
mission.
(2) CD support not exceeding 179 days for any one mission.
(3) DOD personnel are not authorized to accompany LEAs on actual CD
field operations nor may they participate in activities where CD-related
hostilities are imminent.
(4) CDRUSNORTHCOM/CDRUSSOUTHCOM/CDRUSPACOM will first
determine if the state (and/or territory) National Guard (title 32 forces) can
provide the requested support. If the state (and/or territory) National Guard
cannot provide the forces, CDRUSNORTHCOM/CDRUSSOUTHCOM/
CDRUSPACOM will determine if the request is feasible, supportable, and
consistent with DOD policy IAW reference g.
(5) GCCs/Military Departments may approve the transfer of their units,
personnel, and equipment to support Joint Task Force-North (JTF-N)/
USNORTHCOM CD missions. GCCs/Military Departments may delegate
approval authority. When approving support to JTF-N/USNORTHCOM, the
GCC/Military Department will determine whether or not the proposed mission
satisfies the readiness and military training value requirements of reference g.
b. CD-Related Training of Law Enforcement Personnel.
CDRUSNORTHCOM/CDRUSSOUTHCOM/CDRUSPACOM may approve
training for LEA personnel in the United States. Per reference g, no advanced
military training will be provided to LEA personnel. However, the US Army
Military Police School may continue to train LEA personnel in the Counterdrug
Special Reaction Team Course, Counterdrug Field Tactical Police Operations
Training, and Counterdrug Marksman/Observer Course (reference g). On an
exceptional basis, CDRUSSOCOM may approve such training by special
operations forces (reference n).
c. Engineering Support. CDRUSNORTHCOM/CDRUSPACOM may approve
y pp
engineering support in the United States. Per reference g military engineering
g
g,
y
g
support is limited to the southwest border and defined as mobility and
pp
countermobility (fences, lights, roads) efforts. This includes approval of
materiel p
purchases necessary to support DOD mission personnel but does not
y
include military construction or provision of other materials. See reference b,
section 1004(b)(7) (as amended).
6. CD Support

Foreign

a. General Delegations. With regard to the general delegations in
paragraph 4 above and the delegations contained in this paragraph, the
A-6

Enclosure A

CJCSI 3710.01B
26 January 2007
Secretary of Defense has delegated approval authority for CD support outside
the United States; the Secretary of Defense has delegated approval authority
for CD support to GCCs for:
(1) Planning and Coordination Visits. Planning and coordination visits
to American Embassies (contingent on Embassy approval) may be conducted
with theater-assigned
(2) Intelligence Analyst Support. Intelligence analyst support may be
provided to US Ambassadors using theater-assigned forces (consistent with
references c and d). This approval is subject to DoD Component General
Counsel concurrence when military intelligence component and/or Military
Department personnel are used in support of LEAs, per reference c and
component’s implementing directives:
(a) At respective US Embassies or consulates.
(b) At US regional analysis centers.
(3) Planning and Coordination Visits. Planning and coordination visits
of 10 personnel or less for 60 days or less to HN headquarters (contingent on
American Embassy approval) may be conducted with theater-assigned or
allocated forces to accomplish the GCC’s D&M mission or to support the US
Ambassador’s CD effort with expert advice or assistance to the US Country
Team.
(4) Linguist Support. Includes translator and interpreter support
consistent with reference c. This approval is subject to DoD Component
General Counsel approval when military intelligence components and/or
personnel are used to support LEAs, as defined in reference c and component
implementing directives. This delegation does not include authority to approve
cryptologic support, real-time translation of oral or wire intercepts, direct
participation in interrogation activities, or the use of counterintelligence assets
for CD purposes. Linguist missions to locations outside American Embassies
will be limited to short-duration visits (not to exceed 30 days) of no more than
10 persons to primary HN and US C4I headquarters for the express purpose of
accomplishing the mission of supporting the Ambassador’s CD effort.
(5) CD-Related Training of Law Enforcement Personnel
(a) GCCs may approve CD-related training of foreign law enforcement
personnel requiring no more than 50 theater-assigned personnel for no more
than 45 days with HN and Country Team approval and notification.

A-7

Enclosure A

CJCSI 3710.01B
26 January 2007

(INTENTIONALLY BLANK)

GL-6

Glossary

EXHIBIT 50

REMARKS

Remarks by President Trump on the National
Security and Humanitarian Crisis on our
Southern Border
IMMIGRATION

Issued on: February 15, 2019

Rose Garden
10:39 A.M. EST
THE PRESIDENT: Thank you very much, everybody. Before we begin, I’d like to just say
that we have a large team of very talented people in China. We’ve had a negotiation
going on for about two days. It’s going extremely well. Who knows what that means,
because it only matters if we get it done. But we’re very much working very closely with
China and President Xi, who I respect a lot. Very good relationship that we have. And
we’re a lot closer than we ever were in this country with having a real trade deal.
We’re covering everything — all of the points that people have been talking about for
years that said couldn’t be done, whether it was theft or anything. Anything. The
unfairness. We’ve been losing, on average, $375 billion a year with China. A lot of people
think it’s $506 billion. Some people think it’s much more than that. We’re going to be
leveling the playing field.

use it for. I said, “What were you going to use it for?” And I won’t go into details, but it
didn’t sound too important to me.
Plus, if you think, I’ve gotten $700 billion for the military in year one, and then last year,
$716 billion. And we’re rebuilding our military, but we have a lot. And under the
previous administration, our military was depleted — badly depleted. And they weren’t
spending — I mean, they had a much less — they had a much smaller amount of money.
So when I got $700 billion, and then $716 billion — and this year, it’s going to be pretty
big too, because there’s few things more important than our military. You know, I’m a
big deficit believer and all of that, but before we really start focusing on certain things,
we have to build up our military. It was very badly depleted. And we’re buying all new
jetfighters, all new missiles, all new defensive equipment. We have — we’ll soon have a
military like we’ve never had before.
But when you think about the kind of numbers you’re talking about — so you have $700
billion, $716 billion — when I need $2 billion, $3 billion of out that for a wall — which is a
very important instrument, very important for the military because of the drugs that
pour in. And as you know, we have specific rules and regulations where they have drugs,
and what you can do in order to stop drugs. And that’s part of it, too.
We’re taking a lot of money from that realm also. But when you have that kind of money
going into the military, this is a very, very small amount that we’re asking for.
Yeah, go ahead. Go ahead. ABC. Not NBC. I like ABC a little bit more — not much. Come
on, ABC. Not much. Pretty close.
Q Mr. President, what do you say to those, including some of your Republican allies,
who say that you are violating the Constitution with this move and setting a bad
precedent that will be abused by possibly Democratic Presidents in the future? Marco
Rubio has made this point.

THE PRESIDENT: Well, not too many people. Yeah. Not too many people have said that.
But the courts will determine that.
Look, I expect to be sued. I shouldn’t be sued. Very rarely do you get sued when you do
national emergency. And then other people say, “Oh, if you use it for this, now what are
we using it for?” We got to get rid of drugs and gangs and people. It’s an invasion. We
have an invasion of drugs and criminals coming into our country that we stop, but it’s
very hard to stop. With a wall, it would be very easy.
So I think that we will be very successful in court. I think it’s clear. And the people that
say we create precedent — well, what do you have? Fifty-six? There are a lot of times —
well, that’s creating precedent. And many of those are far less important than having a
border. If you don’t have a border, you don’t have a country.
You know, we fight — before I got here — we fight all over the world to create borders for
countries, but we don’t create a border for our own country.
So I think what will happen is, sadly, we’ll be sued, and sadly, it’ll go through a process.
And, happily, we’ll win — I think.
Go ahead. Let’s go. Let’s hear it, NBC. Come on.
Q Thank you, Mr. President. I just want to say, in the past, when President Obama tried
to use executive action as it related to immigration, you said, “The whole concept of
executive order, it’s not the way the country is supposed to be run.” You said, “You’re
supposed to go through Congress and make a deal.” Will you concede that you were
unable to make the deal that you had promised in the past, and that the deal you’re
ending up with now from Congress is less than what you could have had before a 35-day
shutdown?
THE PRESIDENT: No. Look, I went through Congress. I made a deal. I got almost $1.4
k,
billion when I wasn’t supposed to get one dollar — not one dollar. “He’s not going to get
w

one dollar.” Well, I got $1.4 billion. But I’m not happy with it. I also got billions and
billions of dollars for other things — port of entries, lots of different things. The purchase
of drug equipment. More than we were even requesting.
In fact, the primary fight was on the wall. Everything else, we have so much, as I said, I
,
don’t know what to do with it we have so much money. But on the wall, they skimped.
So I did — I was successful, in that sense, but I want to do it faster. I could do the wall
over a longer period of time. I didn’t need to do this. But I’d rather do it much faster.
And I don’t have to do it for the election. I’ve already done a lot of wall, for the election
— 2020. And the only reason we’re up here talking about this is because of the election,
because they want to try and win an election, which it looks like they’re not going to be
able to do. And this is one of the ways they think they can possibly win, is by obstruction
and a lot of other nonsense.
And I think that I just want to get it done faster, that’s all.
Okay. Yes, ma’am, go ahead.
Q Thank you, Mr. President.
THE PRESIDENT: Thank you.
Q Roberta Rampton from Reuters. I wanted to ask about China. Do you feel that
enough progress has been made in the talks to head off the increase in tariffs scheduled
for March 1?
THE PRESIDENT: Well, you know, you’re talking to the wrong person, because I happen
to like tariffs, okay? I mean, we’re taking in billions and billions of dollars in tariffs from
China. And our steel industry now, as an example, we tax dumped steel — much of it
comes from China — at 25 percent. Our steel industry is so vibrant now again, they’re

building plants all over the United States. It’s a beautiful thing. And from a defensive
standpoint, and from any standpoint, you need steel.
You know, you can do without certain industries. Our country cannot do without steel.
So, I love tariffs, but I also love them to negotiate. And right now, China is paying us
billions of dollars a year in tariffs. And I haven’t even started.
Now, here’s the thing: If we make a deal, they won’t have to pay. You know, it’ll be a
whole different story. They won’t be paying that, but we’ll have a fair deal. There won’t
be intellectual property theft. There won’t be so many other things that have gone on.
And no other President has done this. No other — you know, we didn’t have a deal with
China. You had the WTO, one of the worst trade deals ever made — probably even worse
than NAFTA, if that’s believable, which, you know, hard to believe, because I think NAFTA
was just a disaster. It was a total disaster for our country.
And now we made the USMCA, which is going to be a terrific — a great deal. And, by the
way, the USMCA, from Mexico — that’s United States, Mexico, Canada — that’s where the
money is coming from, not directly but indirectly, for the wall. And nobody wants to talk
about that. Because we’re saving billions and billions of dollars a year, if Congress
approves that deal.
Now, they might now want to approve a deal just because they’ll say — one of the things
I’m thinking of doing — this has never been done before: No matter how good a deal I
make with China, if they sell me Beijing for one dollar, if they give me 50 percent of their
land and every ship that they’ve built over the last two years — which is a lot — and they
give them to me free, the Democrats will say, “What a lousy deal; that’s a terrible deal.”
Like, ZTE, I got a billion — more than a billion-dollar penalty in a short period of time.
And the Democrats said, “Oh, should’ve gotten more.” When I made that deal, I said,
“This is incredible.” I just got — I got over a billion-dollar penalty, plus they had to
change their board of directors. They had to change their top management. But they

And it was a very tough dialogue at the beginning. Fire and fury. Total annihilation. “My
button is bigger than yours” and “my button works.” Remember that? You don’t
remember that. And people said, “Trump is crazy.” And you know what it ended up
being? A very good relationship. I like him a lot and he likes me a lot. Nobody else
would have done that.
The Obama administration couldn’t have done it. Number one, they probably wouldn’t
have done it. And number two, they didn’t have the capability to do it.
So I just want to thank everybody. I want to wish our Attorney General great luck and
speed, and enjoy your life. (Laughter.) Bill, good luck. A tremendous reputation. I know
you’ll do a great job. Thank you very much. And thank you, everybody. Thank you very
much. Thank you.
END

11:29 A.M. EST