Prison reform, the protection of civil liberties and the fight against fraud are among the top management challenges that face the U.S. Department of Justice in the new year, according to the department’s inspector general.

The report, the equivalent of the State of the Union address from the agency’s internal watchdog, paints mostly in broad strokes across the Justice Department. Inspector General Michael Horowitz identified as the most pressing challenge the overcrowding of the federal prison system, which he called “an increasingly critical threat.”

“In the current era of flat or declining budgets, the continued growth of the prison system budget poses a threat to the Department’s other critical programs — including those designed to protect national security, enforce criminal laws, and defend civil rights,” Horowitz wrote.

In August, Attorney General Eric Holder Jr. made waves in the criminal justice bar when he announced two initiatives that he said would help reduce the Federal Bureau of Prisons’ increasing share — up from 20 percent in 2001 to 25 percent in 2013 — of the department’s budget.

Holder instructed prosecutors not to pursue lengthy mandatory minimum prison sentences for some nonviolent drug offenders. He also started a Smart on Crime initiative to shape prosecutorial and investigative decisions — a key driver of prison costs — to focus resources on the most serious crimes. “It’s clear,” Holder said in a speech in San Francisco, “that too many Americans go to too many prisons for far too long, and for no truly good law enforcement reason.”

Horowitz said, “The department’s policies governing prosecutorial and investigative decisions are a key driver of prison costs, and they need to reflect the real and growing impact that increasing prison costs are having on the Department’s budget.”


The inspector general’s office is reviewing age trends in the federal inmate population. The Bureau of Prisons, Horowitz wrote, underuses cost-saving programs including compassionate release for sick and elderly inmates.

Several bills pending on Capitol Hill would limit mandatory minimum sentences. In September, the Senate began debate on the Justice Safety Valve Act — a measure that would allow judges to impose prison sentences lower than now-required mandatory minimum terms in certain instances.

“The Department of Justice cannot solve this problem on its own,” Sen. Patrick Leahy (D-Vt.), chairman of the Senate Judiciary Committee, said at the time. “Congress must act.”

Wilmer Cutler Pickering Hale and Dorr partner Jamie Gorelick, a former deputy attorney general, questioned the limits of what DOJ could do without reforms from Capitol Hill.

“Really, Congress, just like the legislatures in all the states, has to grapple with the incredible growth of sentence length in the last couple years,” said Gorelick, who leads Wilmer’s defense, national security and government-contracts practice. “You can make a difference in the charging policies, but you really have to have legislative change to have a major change.”

National security has been a Justice Department challenge for years, Horowitz’s report notes, but the clash between civil liberties and government surveillance intensified during 2013.”The Department’s challenge is not limited to ensuring that its efforts to safeguard American interests are effective: it must also protect civil rights and liberties,” Horowitz wrote. “Recent disclosures concerning the government’s data collection and surveillance processes have sparked public debate over mass surveillance and government secrecy, and in so doing have underscored the difficulty of operating national security programs while also respecting the public’s expectations of privacy, a key civil rights and liberties concern.”

The inspector general’s office is reviewing the department’s requests for business records under Section 215 of the Foreign Intelligence Surveillance Act, as well as the department’s use of pen register and trap-and-trace devices under that law.

Horowitz said his team will follow up on earlier reviews that concluded the FBI had used national security letters to obtain certain records without complying with legal requirements designed to protect civil liberties and privacy.

“Additional concerns about civil rights and liberties are likely to arise in the future,” Horowitz wrote in his report. “For example, significant public attention has been paid to programs authorizing the acquisition of national security information, but relatively less has been paid to the storing, handling, and use of that information.”

On the fraud enforcement front, Horowitz’s report lauded the department’s efforts to crack down on corporate malfeasance through tools such as the False Claims Act. His office is reviewing the push to collect criminal and civil debts.

In the fiscal year that ended Sept. 30, prosecutors collected $13.2 billion in criminal and civil actions. But an additional $23 billion was owed to the United States — including $18 billion in criminal fines and $5 billion in civil debts.

“But securing a financial judgment is not enough. The Department must also use all available tools to recover money owed to it, and it must ensure that the recovered money is wisely spent,” Horowitz wrote.

Kathleen McDermott, a partner at Morgan, Lewis & Bockius, said those uncollected fines probably could not realistically be collected.

“I doubt very seriously they are not aggressive,” said McDermott, who represents clients in False Claims Act matters. “It’s more associated with ability to pay, and you’re not going to see money from people you put in jail and aren’t working.”

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