Attorney General Alberto R. Gonzales, Assistant Attorney General for National Security Kenneth L. Wainstein and FBI Director Robert S. Mueller, III today announced a series of comprehensive measures to significantly enhance national security oversight and compliance at the Justice Department and FBI.

Among the primary components of this oversight effort, which has been in the works for months, are the proposed launch of two offices to conduct reviews, compliance activities, and training. The first is a dedicated Oversight Section within the Justice Department’s National Security Division. The second is a proposed Office of Integrity and Compliance at the FBI.

The oversight and compliance programs run by these offices will be at the forefront of the Justice Department’s ongoing efforts to ensure that national security investigations are conducted in a manner consistent with the nation’s laws, regulations, and policies, including those designed to protect the privacy interests and civil liberties of U.S. citizens.

“The top priority of the Department is to protect the nation from terrorist attack. At the same time, we have an important obligation to make sure the tools we use to prevent terrorism also protect the civil liberties of our citizens,” said Attorney General Gonzales. "This effort helps us achieve these objectives by enhancing internal controls over the Department’s national security activities.”

“The changes we announcing today are historic in nature. The FBI is instituting one of the first, agency-wide internal compliance programs in the federal government, and, for the first time, Justice Department attorneys will have a comprehensive mandate to examine all aspects of the FBI’s national security program for compliance with laws, regulations, and guidelines,” said Assistant Attorney General Wainstein.

“The FBI is charged with the mission to protect and defend the United States against terrorist and foreign intelligence threats and to enforce the nation's criminal laws, while upholding the fundamental protections provided by the Constitution,” said FBI Director Robert S. Mueller, III. “That requires striking a sometimes delicate balance, and the establishment of a compliance program marks another important step toward ensuring we fulfill our mission with an unswerving commitment to the rule of law.”

These measures build upon past Department improvements in national security oversight as counter-terrorism efforts have expanded. Last September, for instance, the Department created a National Security Division, in part, to enhance oversight of FBI and Department national security activities. In 2005, the FBI created a National Security Branch to centralize and coordinate FBI national security programs. Over the past several years, the Department has also expanded its reviews of FBI use of Foreign Intelligence Surveillance Act (FISA) authorities.

Oversight Program within DOJ’s National Security Division

The National Security Division plans to broaden the scope of its national security oversight well beyond the Department’s traditional oversight role, which was primarily focused on the FBI’s use of FISA authorities. For the first time, Justice Department attorneys will have the clear mandate to examine all aspects of the FBI’ national security program for compliance with laws, regulations, and policies.

Dedicated Oversight Section -- To accomplish the expanded mandate spelled out above, the Department is standing up a dedicated Oversight Section within the National Security Division. This section will consist of attorneys and staff members specifically dedicated to ensuring that the Department fulfills its national security oversight responsibilities. Until recently, the Department’s national security oversight largely focused on the FBI’s use of FISA authorities, with the Department conducting accuracy reviews to ensure the accuracy of FBI declarations to the Foreign Intelligence Surveillance Court (FISC) and minimization audits to ensure FISA information is handled appropriately. The Oversight Section will expand this focus beyond FISA to include all aspects of the FBI’s national security program and its use of national security tools.

Comprehensive National Security Reviews – The Oversight Section will exercise its oversight functions by conducting regular reviews of national security activities at FBI field offices and FBI Headquarters national security units. These reviews, which have already begun, are staffed by career Department attorneys with years of law enforcement and intelligence experience from the National Security Division and the FBI’s Office of General Counsel, along with officials from the Department’s Privacy and Civil Liberties Office. These reviews are not limited to the FBI’s use of FISA or National Security Letters, but examine all national security activities to ensure compliance with all applicable laws, guidelines and policies. Since establishing this review process in April 2007, the Division has completed national security reviews in four FBI field offices and plans to complete a total of 15 such reviews by the end of the year.

Reviews of Intelligence Oversight Board Referrals – As directed by the Attorney General in March 2007, the National Security Division will also be responsible for reviewing all referrals by the FBI to the Intelligence Oversight Board (IOB). This review process will focus on whether these referrals indicate that a change in policy, training, or oversight mechanisms is required. The Oversight Section will report to the Attorney General twice a year on such referrals and inform the Department's Chief Privacy and Civil Liberties Officer of any referrals that raise serious civil liberties or privacy issues.

Training and Outreach -- In addition, the National Security Division will provide training on legal and regulatory compliance issues for its lawyers and FBI agents and analysts, as well as conduct outreach to the rest of the intelligence community.

Office of Internal Compliance and Oversight at the FBI

The second key portion of this oversight and compliance initiative will be the FBI’s Office of Integrity and Compliance, which was recently proposed by the FBI Director. While compliance programs have long been a staple of private corporations, this effort would represent one of the first times a federal agency established an agency-wide compliance program. The creation of this office and the implementation of a new FBI-wide compliance program would represent a substantial innovation in the way the FBI does business. The office will work to ensure compliance not only in national security activities, but in all FBI activities.

Mission -- The mission of the FBI’s proposed Office of Integrity and Compliance is to develop, implement, and oversee a program that ensures there are processes and programs in place that promote FBI compliance with both the letter and spirit of all applicable laws, regulations, and policies. The office would cultivate an environment committed to these principles and assist FBI management at all levels foster and maintain a culture where ethics and compliance are paramount considerations in decision making.

Structure -- The proposed Office of Integrity and Compliance would be headed by a career Assistant Director who will report directly to the FBI’s Deputy Director, providing direct access to the top decision makers within the FBI. The management structure would include a Steering Committee, chaired by the FBI Director, and five Executive Management Committees, which would examine compliance in different of portions of the FBI, including the National Security Branch, Criminal Investigations, investigative support, administrative and information technology.

New Policies and Risk Assessments -- The Office of Integrity and Compliance would begin establishing policies on compliance standards, training, communications, and risk assessments for the FBI. The office would support the implementation of the FBI’s overall compliance policies and standards within FBI Divisions, monitor the FBI-wide compliance program, ensure that necessary audits are performed, and deliver an annual report to key stakeholders. The office would also work closely with the FBI Inspections Division to identify high-risk areas, amend inspection protocols to include compliance risk, and ensure that compliance monitoring is carefully planned and executed.

"This is a major victory for recording artists and record labels whose hard work and creativity provides the music around which the Internet radio business is built," SoundExchange executive director John Simson said. "Notwithstanding this victory, we continue to reach out to the webcasting community to reach business solutions."

SoundExchange was created to distribute the royalty following the 1995 Digital Performance Right in Sound Recording Act. The royalty is split 50-50 between copyright owner, typically a label but sometimes the artists or other entities, and the performer.

Webcasters had challenged the royalty, contending that a panel of copyright royalty judges erred when they dramatically increased the rate this year.

"Digital Media Assn. members and all Webcasters are disappointed by the court's decision and are now forced to make very difficult decisions about what music, if any, they are able to offer," executive director Jonathan Potter said. "The result will certainly be fewer outlets for independent music, less diversity on the Internet airwaves, and far fewer listening choices for consumers. We're hopeful that Congress will take steps to ensure that Internet radio is not silenced, and that Webcasters and SoundExchange will find a way to compromise and maintain the diversity and opportunity of Internet radio."

Boutique technology law firm Daniels Daniels & Verdonik, whose members were major players during the go-go, dot-com years, is closing shop and will be absorbed into the Raleigh outpost of New Bern-based Ward and Smith.

Founded in 1982, DD&V was well known among the local entrepreneurial intelligentsia, with clients including Etrials Worldwide Inc., EMC Corp. and StrikeIron Inc. The shop's offerings included corporate and tax law, structuring venture financing deals and patent and copyright work.

DD&V always has been a small firm, with its attorney roster maxing out at eight a few years ago. But after losing a couple of attorneys to Hutchison Law Group in the spring, DD&V's roster dwindled to just four lawyers, including name partners Walter Daniels, Linda Markus Daniels and Jim Verdonik.

"Daniels Daniels & Verdonik is a specialized firm with exceptionally knowledgeable attorneys who will strengthen our firm's full service capabilities," says Ward and Smith co-managing director Kenneth R. Wooten.

Partners at DD&V believe size will benefit the lawyers as well as the clients.

"We chose to combine with Ward and Smith to utilize their talented group of attorneys to provide additional resources to our clients," says Verdonik. "We are excited about this combination, and we look forward to continuing to serve the technology community with a wider range of services and a much deeper team."

Keith Kapp, who leads Williams Mullen Maupin Taylor's Raleigh office, sees benefits of the merger for DD&V.

"It would make good business sense and would better serve clients to be able to offer multiple specialties," says Kapp, who helped shepherd Raleigh-based Maupin Taylor through its recent merger with Virginia firmWilliams Mullen earlier this year.

Walter Daniels, a Morehead Scholar at the University of North Carolina at Chapel Hill, and wife Linda operated the firm as Daniels & Daniels for years. That changed in 2003, when tech and securities maven Verdonik jumped ship from Kilpatrick Stockton to join them.

In addition to the Danielses and Verdonik, intellectual property lawyer Jose Cortina works at DD&V.

The four lawyers are in the process of moving to Ward and Smith, which opened a Raleigh office in 1990. Excluding the DD&V crew, Ward and Smith's downtown Raleigh office has about 20 employees, including attorneys and support staff.

While specialization can have its advantages, DD&V was hamstrung by its size and practice limitations - especially after Caroline Horton Rockafellow and Amalie Tuffin departed the firm in March to join competitor Hutchison Law Group. A major chunk of DD&V's clientele is aspiring technology companies. They have the potential to soar to the moon, but many flame out on the launch pad.

Law firms can get burned along the way, notching plenty of billable hours working for a client that ends up not being able to pay because it encounters financial difficulty. Having to kiss a lot of frogs in order to find a prince is a better proposition at a bigger firm, which can weather tough times because it has other revenue-generating practice areas to fall back on.

A small firm such as DD&V also can be at a disadvantage because larger competitors can offer clients a wider diversity of services. For instance, DD&V competitors such as Smith Anderson and Wyrick Robbins Yates and Ponton both have dozens of lawyers and more practice areas, allowing clients to have much of their legal work taken care of under one roof. Hutchison Law Group has a niche similar to DD&V but is much bigger, having grown to 24 attorneys since its founding in 1996.

After the DD&V lawyers move over, Ward and Smith will have more than 70 attorneys and north of 200 support staff combined in Greenville, New Bern, Wilmington and Raleigh.

"With established offices in Wilmington and Greenville, two growing technology centers in eastern North Carolina, Ward and Smith will also expand the geographic reach of our technology practice," says Verdonik.

http://www.d2vlaw.com

McGlone is accused of illegally distributing human growth hormone and steroids to body builders in several states, and allegedly got some of the drugs from a Florida-based pharmaceutical company charged by New York authorities in a larger steroid case.

Prosecutors say McGlone advertised in bodybuilder publications and recommended the drugs for anti-aging and weight-loss purposes. Federal law restricts the use or distribution of human growth hormone to specified medical uses, such as wasting disease associated with AIDS.

McGlone took orders over the phone and paid two New York doctors to write prescriptions for the drugs even though they never met or examined the patients, according to prosecutors.

He made more than $860,000 through the scheme between April 2004 and August 2006, prosecutors said. Authorities seized more than $125,000 and two Dodge Vipers from McGlone, according to federal court documents.

McGlone sent the prescriptions to pharmacies, including Orlando, Fla.-based Signature Pharmacy, according to prosecutors. The company is not charged in the Rhode Island case.

One doctor pleaded guilty in March to conspiracy and illegal drug distribution charges. The other doctor had initially agreed to plead guilty, then declined to do so at a court hearing last month.

"I have read the (plea) agreement, and I accept responsibility," Crutchfield told U.S. Judge J. Daniel Breen.

Defense attorney William Farmer characterized the money that Crutchfield admitted taking as a "gratuity" rather than a bribe.

"They gave him a gratuity _ thanks for all your help _ long after he had already agreed to support this bill," Farmer said outside court.

Crutchfield and former Sen. Kathryn Bowers, D-Memphis, were the last of the Tennessee Waltz lawmakers still facing trial. The others have pleaded guilty or been convicted at trial.

Bowers' attorney, William Massey, said she would plead guilty on Monday.

"She brings this one blemish to the courtroom but a lifetime of good work and a positive history in the community," Massey said. "We hope to convince the judge it's not necessary to punish her severely."

If prison time is ordered, he said, "that's what she'll do. She's strong."

Tennessee Waltz indictments were returned in May 2005, charging the five with taking payoffs from a company called E-Cycle Management, which turned out to be a creation of the FBI.

Farmer said that Crutchfield, who has served in the General Assembly for 31 years, plans to resign "in due time," before the Legislature returns to session in January.

Crutchfield still will be eligible for a $42,000 annual pension because his membership in the state's retirement system predated changes in a law designed to strip benefits from convicted lawmakers.

He faces a maximum of five years in prison and a $250,000 fine, though federal guidelines for a first-time offender would call for a much lighter sentence. Sentencing was set for Nov. 28.

The indictment against Crutchfield accused him of splitting $12,000 in bribes with a so-called "bagman" and former lobbyist, Charles Love. Love pleaded guilty and was to testify against Crutchfield at trial.

Prosecutors say the Tennessee Waltz investigation is ongoing.

Pushing through a crowd of reporters and photographers outside the Memphis courthouse, Crutchfield refused to talk about Tennessee Waltz.

"I'm ready to go home to Chattanooga right now," he said.

Crutchfield was first elected to the state House in 1956 and served 14 terms in the Senate. He was Senate Democratic leader for six years until losing a caucus vote about five months before the Tennessee Waltz investigation became public.

"It is our hope that this does not obscure what was a record of noteworthy public service. Senator Crutchfield represented the people of his district with distinction for a very long time," Democratic caucus chairman Joe Haynes said in a statement.

In all, 11 people have been indicted on Tennessee Waltz charges, including several officials in Memphis and Chattanooga. Nine of those charged, including Crutchfield, now stand convicted.