DEA Congressional Testimony
March 12, 2008

Statement of
The Honorable Michele M. Leonhart, Acting Administrator
Drug Enforcement Administration
before the
United States House of Representatives
Committee on Appropriations
Subcommittee on Commerce, Justice, Science and Related Agencies

March 12, 2008

Chairman Mollohan, Ranking Member Frelinghuysen, and Members of the Subcommittee:

Good morning, and thank you for inviting me to testify on behalf of the President’s Fiscal Year (FY) 2009 budget request for the Drug Enforcement Administration (DEA). I have spent my entire professional career in the very rewarding field of law enforcement. In 1980, I began my career at DEA, and in 2004, I was honored to be named the agency’s Deputy Administrator. Since November 2007, I have been serving as the Acting Administrator following the retirement of the former Administrator, Karen Tandy.

It is my pleasure to discuss our drug law enforcement work both abroad and here at home, as well as our support of counter-terrorism activities. DEA’s mission is to protect the American people from global drug traffickers whose sole motive is the desire for profit and whose activities breed and beget one thing only – human tragedy. The resources you provide us through our 2009 budget request will significantly help DEA accomplish our mission. I look forward to discussing the future of DEA with you today.

First and foremost, I want to take a moment to express my deep appreciation to the subcommittee on behalf of all of us at DEA, for the resources you provided in the FY 2008 appropriation. The increase in funding enables us to resume recruiting and hiring Special Agents; we now have five Basic Agent Training classes scheduled for 2008. Additionally, we will boost our ranks of critical support staff and expand our array of enforcement tools, thus allowing us to maintain our long-held drug enforcement leadership role.

Two vital measurements of drug enforcement success are a decline in illegal drug use and a reduction in the availability of the drugs. DEA has seen continued progress in these efforts over the past year. Aggressive drug law enforcement results in limited supply and an increased price for drugs. Furthermore, it provides a deterrent effect that may be a factor in contributing to the decline in drug use. The statistics that follow reflect a very positive trend and encouraging news for all of us. Efforts to reduce the demand for illegal drugs coupled with strict enforcement of our drug laws have gone a long way toward achieving the goal of a drug-free America.

Drug Use: A Continued Decline

The 2007 Monitoring the Future national survey, conducted by the University of Michigan and sponsored by the National Institute on Drug Abuse – NIDA, indicates that overall, illicit drug use by American teens continues to show a decline. 860,000 fewer teenagers are using illicit drugs now than in 2001 – a 24 percent decline. Current marijuana use by teens has dropped by 25 percent since 2001, and methamphetamine use has plummeted 64 percent since 2001. Current use of Ecstasy is half what it was in 2001 (54 percent decline), and current use of steroids by teens has dropped by a third. Between 1985 and 2007, cocaine use among high school seniors has dropped more that 60 percent.

The most recent data from workplace drug tests (conducted by Quest Diagnostics) indicated an unprecedented reduction in cocaine use among America’s workers. A 2007 mid-year report reveals a 15.9 percent decline in the number of drug test positives for cocaine among the combined U.S. workforce during the first six months of 2007 compared to 2006 (.58 percent January – June 2007 v. .69 percent in calendar year 2006). It is also worth noting that since 2000, drug tests positives for cocaine have hovered consistently in the .70 percent to .75 percent range until 2007.

Enforcement Success and Challenges

DEA’s enforcement success can be attributed to taking a comprehensive approach to the law enforcement challenges we face. While DEA participates in all levels of investigations, our efforts are focused on undermining, disrupting, and dismantling the largest and most sophisticated global drug trafficking and money laundering organizations. These organizations not only funnel illegal drugs to our communities, but leave corruption, violence, and instability in their wake.

Intelligence-driven law enforcement, which has been critical to our success, not only allows us to target all levels of the drug, money and precursor chemical supply chain, it has become increasingly vital to maintaining national security. Over the last year, DEA has had some noteworthy accomplishments; with success comes the ability to identify new challenges and we are committed to meeting those in the months and years ahead.

Combating the Diversion of Legitimate Controlled Substances: In contrast to the positive news about the declining use of illegal drugs, the non-medical use of prescription drugs continues at alarming rates. According to the NIDA survey, prescription drugs are the second most abused category of drugs – behind only marijuana. DEA’s Office of Diversion Control is very aggressively fighting the abuse of prescription drugs on all fronts by identifying and exploiting the vulnerabilities in the supply chain where controlled substances and chemicals can be diverted into the illicit market. In FY 2007, DEA initiated 1,736 criminal and complaint investigations (including Internet and non-Internet cases) targeting the trafficking in controlled pharmaceuticals. During that time period, DEA Special Agents, Diversion Investigators, and Intelligence Analysts dedicated 1,087,000 work hours to diversion investigations, a five percent increase over FY 2006.

As part of our effort to attack rogue Internet pharmacies that are supplying millions of doses of licit drugs, DEA has sought to disrupt the supply chain that makes diversion by these rogue Internet pharmacies possible. To that end, DEA has undertaken an important initiative to educate wholesale distributors, and when necessary, pursue administrative, civil, or other criminal action against wholesalers that distribute excessive amounts of controlled pharmaceuticals. Since beginning the initiative, DEA has suspended the registrations of seven wholesale distributors, four of which were owned by two Fortune 500 companies.

During FY 2007, DEA also issued Immediate Suspension Orders to 10 Internet pharmacies operating in the State of Florida. These pharmacies were diverting millions of dosage units of hydrocodone across the United States. Nine of these pharmacies chose to surrender their registration or shut down business rather than face a hearing. The tenth pharmacy did not prevail at its hearing and ultimately lost its DEA registration. DEA has also immediately suspended the registrations of five other pharmacies engaged in diversion via the Internet. In addition to taking action to suspend or revoke the registrations of wholesale distributors, DEA, in coordination with United States Attorneys offices, is pursuing civil penalty cases against a number of distributors.

In September 2007, DEA announced the conclusion of Operation Raw Deal, the largest steroid enforcement action in U.S. history. Led by DEA, and in conjunction with law enforcement in nine countries and eight other federal agencies, Operation Raw Deal targeted the underground trade of anabolic steroids, human growth hormone, and insulin growth factor, and it involved the identification of approximately 96 websites predominately linked to Chinese manufacturers/distributors of raw steroid powder. 143 federal search warrants were executed on targets nationwide, resulting in 124 arrests and the seizure of 56 steroid labs across the United States. In total, 11.4 million steroid dosage units were seized, as well as 242 kilograms of raw steroid powder of Chinese origin. In addition, $6.5 million was seized, as well as 25 vehicles, 3 boats, 27 pill presses, and 71 weapons.

Denying the Drug Revenue/Seizing the Assets: DEA makes it a priority to deny drug trafficking organizations the profits of their illegal trade. For the first quarter of FY 2008 alone, revenue denied totaled $926.2 million. That amount exceeds the first quarter FY 2007 total by $340.8 million or 58 percent, and exceeds the first quarter FY 2006 total by $531.5 million or 135 percent. In FY 2007, DEA denied traffickers a total of $3.5 billion in proceeds. Those results exceeded our five-year goal of taking $3 billion from the drug trafficking organizations, which we did not expect to achieve until FY 2009. Total cash seizures amounted to $798 million and seized assets totaled $1.1 billion. Internet investigations alone resulted in the seizure of $39.2 million in cash, bank accounts, property, and computers, an impressive 317 percent increase over FY 2006 ($9.4 million). The number of high-value cash seizures (those over $1 million) was 82, a 30 percent increase over fiscal 2006. Furthermore, the value of the seized assets we shared with our state and local partners in FY 2007 was $326 million, a $107 million increase over the past two fiscal years.

Attacking the Major Drug Trafficking Organizations: As the nation’s only single-mission federal drug law enforcement agency, DEA targets the top narcotics trafficking organizations in the world. Our goal is to attack them with the force and might necessary to dismantle them completely or to cause major disruptions in their operations. Since the inception of the Priority Targeting Program in FY 2001, DEA has initiated 6,861 investigations against priority target organizations, as of September 30, 2007. Of the 6,861 investigations, 2,037 (or 30 percent) of the targeted organizations have been dismantled, a 36 percent increase over cumulative FY 2006 dismantlements. Additionally, a total of 1,555 organizations, or 23 percent, have been disrupted and closed, a 36 percent increase over cumulative FY 2006 disruptions. It is worth noting that in FY 2007 alone, eight of the 114 priority target organizations with links to terrorism were dismantled and seven were disrupted and closed. Currently, 46 organizations appear on the FY 2008 list of Consolidated Priority Target Organizations (CPOTs) – the most wanted global traffickers/money launders. 78 percent (36) of the 46 CPOTs have been indicted and 20 percent (9) have been arrested.

Driving up Price/Driving down Purity: Over this past year, narcotics investigators across the country began to report to DEA increases in the price and decreases in the purity of cocaine and methamphetamine. This reporting represents a significant change from previous years. DEA collects and analyzes data for purposes of identifying meaningful trends. Price and purity data is gathered through DEA’s System to Retrieve Information on Drug Evidence (STRIDE). Data that was extracted for all domestic cocaine purchases for the calendar year 2007 revealed a 21 percent increase in average price per pure gram (from $96.58 to $117.22) and a 10 percent decline in average purity (from 67 percent to 60 percent). The domestic methamphetamine purchases during the same period revealed an 84 percent increase in average price per pure gram (from $152.39 to $280.06) and a 26 percent decline in purity (from 57 percent to 42 percent). These data confirm the initial reports DEA received from narcotics investigators, and show a trend that suggests a shortage of cocaine and methamphetamine may be occurring in the United States. These results can be attributed to a number of factors, including the success of our Drug Flow Attack Strategy - which I will discuss shortly, our priority targeting, our international partnerships especially with Mexico and Colombia, our attack on the money flow, and our foreign and domestic enforcement operations.

Strengthening International Partnerships: Key to successful drug law enforcement is having close working relationships with our local, state, federal, and international partners. DEA has continued to expand our relationships, particularly on the international level, to enhance our capacity to engage successfully in highly effective enforcement actions. With the Drug Flow Attack Strategy (DFAS), DEA has implemented an innovative, multi-agency strategy, designed to significantly disrupt the flow of drugs, money, and chemicals between the source zones and the United States. This is accomplished by attacking vulnerabilities in the supply, transportation systems, and financial infrastructure of major drug trafficking organizations. This strategy calls for aggressive, well-planned, and coordinated enforcement operations in cooperation with host-nation counterparts in global source and transit zones.

Recognizing that the United States cannot control its borders by merely enforcing the immediate border, the DFAS incorporates a “defense in depth” component by attacking the source and transit zones as mentioned above. The enforcement arm of the Drug Flow Attack Strategy, called Operation All Inclusive (OAI), has successfully been applied internationally in three deployments and is in the middle of a fourth. Based on the results produced by the execution of these operations, we have experienced in the United States a decrease in availability, increases in the price, and a decrease in the purity of street drugs.

The transit zone, Central America, has been the key to the successful execution of the strategy. The majority of the seizures produced under Operation All Inclusive have occurred in the transit zone. Because of its geographical location, all of the illicit drugs either produced in or transported from the source zone either travel past, through or over the transit zone, making it the perfect “choke point” to attack.

Mexico and Central America have critically important roles in the U.S. counter-drug strategy. Today, 41 of the 46 organizations on the CPOT list are based in Latin America. Of this total, 15 or 33 percent are Mexican drug trafficking organizations, and 20 or 43 percent are Colombian organizations.

The role of Mexico in U.S. counter-drug policy is unique. This is due to its geographic proximity, the large shared land border, and the fact that Mexico produces much of the methamphetamine, heroin and marijuana consumed by Americans. The U.S. interagency community estimates that approximately 90 percent of the cocaine currently entering the U.S. transits Mexico. Typically, seizures of cocaine in transit to Mexico are measured by the metric ton. Seizures of cocaine in the United States that originated from Mexico, however, are regularly less than 100 pounds, which indicates that traffickers view Mexico as a safe haven for the storage of these large drug shipments. With regard to bulk currency, which represents the proceeds of illicit drug trafficking, an estimated $8 - $25 billion is smuggled out of the United States and into Mexico.

The Administration of Mexican President Calderon has taken dramatic and positive steps to address the drug problem, including the mobilization of tens of thousands of police and military forces to target the major drug trafficking cartels. The Mexican government, for example, extradited more than 80 narcotics traffickers to the United States in 2007, including several high level traffickers, such as CPOT Osiel Cardenas Guillen, the leader of the very violent Gulf Cartel. Furthermore, Mexico has undertaken extraordinary regulatory actions to curtail the flow of chemicals used in the production of methamphetamine, and is collaborating and cooperating with U.S. law enforcement as never before. These actions are in addition to the law enforcement successes we reported to you last year, such as the world record $207 million seized by Mexican law enforcement officials as a result of intelligence provided by DEA.

The Government of Mexico’s commitment has been demonstrated in both words and deeds since the earliest days of the Calderon Administration. While we have identified key counterparts and specially trained vetted units that are both reliable and competent to address the threats posed by illegal drugs, the broader systems need reform and support. The Merida Initiative, proposed by the Administration in October 2007, provides this much needed support to address what may be a singularly unique opportunity to consolidate gains and advance counter-drug objectives.

The nexus between drugs and terrorism, particularly terrorism financing, has been well documented, particularly in Colombia. Because of this connection, DEA plays a central role in U.S. anti-terrorism efforts by striking at the infrastructure of foreign terrorist organizations. Colombia has been instrumental in our mutual battle against the Revolutionary Armed Forces of Colombia (FARC), a terrorist organization that uses drug trafficking and abduction to finance its operations. Since 2002, DEA investigations have led to the indictments of 63 FARC leaders, members, and associates.

This success has continued over the past year. In 2007, we saw the conviction of a high ranking FARC member, as well as the arrest of an international arms trafficker who intended to supply millions of dollars worth of weapons to the FARC. The arms trafficker is listed on Iraq’s Most Wanted List for his support of the former Iraqi regime. DEA also worked with the Colombian National Police to facilitate the destruction of several FARC cocaine laboratories, one of which was capable of producing two tons of cocaine monthly. Concurrently in 2007, while working with our Colombian counterparts, three CPOTs were captured and extradition proceedings are pending. As a result, over half a billion dollars in cash and assets were stripped from the North Valley Cartel, which is regarded as one of the most powerful and violent drug syndicates in the world.

DEA’s international efforts are not limited to this hemisphere. In Afghanistan, DEA is working to assist the Afghan government with the reduction of illicit drugs trafficked from the country, is helping to institute self-reliant counter drug operations in the country, is supporting U.S. efforts against insurgents and terrorism by targeting those terrorist organizations that benefit from drug proceeds, and is promoting long-term stabilization of the country and the region. Along with our Afghan counterparts and the Coalition forces, we have had much success in identifying, disrupting, and dismantling the highest level of Afghan drug trafficking organizations, their leaders, their infrastructure, and their illicit assets. This includes the arrests of eight Afghan High-Value Targets. Our Kabul Country Office is supplemented by the FAST program (Foreign-deployed Advisory and Support Teams), which focuses on advising, training, and mentoring DEA’s Afghan counterparts in the National Interdiction Unit (NIU) of the Counter Narcotics Police – Afghanistan (CNP-A). Between 2005 and 2007, DEA assisted with 144 arrests/detainment of targets for violations of Afghan and U.S. narcotics laws and/or terrorist-related offenses, the seizures of 51.3 metric tons of opium, 6.6 metric tons of heroin, 362 kilograms of morphine base, 14.5 metric tons of chemicals, and 144.9 metric tons of hashish.

DEA continues to lead Operation Containment, a very successful 19-country law enforcement initiative that we launched in 2002. As part of this initiative, a five-year investigation culminated in the 2007 return of Taliban-linked enemy combatant Mohammad Essa to the United States from Afghanistan. Upon his return to the United States, Essa, a U.S. resident, was arrested and charged with conspiring to import approximately $25 million worth of heroin from Afghanistan and Pakistan into the United States and other countries. In addition, between December 2005 and October 2007, on more than 19 occasions, DEA has provided actionable intelligence that has deterred hostile acts, including rocket and IED (improvised explosive devices) attacks, against U.S. and Coalition personnel and interests inside Afghanistan. Furthermore, on January 23, 2008, DEA provided additional testimony to a federal Grand Jury in the District of Columbia, which resulted in the issuance of an indictment charging Khan Mohammed with violations of Title 21 USC 960(a) (Narco-Terrorism). This represents the first Afghan defendant charged with this offense and only the fourth 960(a) indictment charge in the United States.

Leading and Supporting Anti-Methamphetamine Initiatives: The DEA anti-meth strategy combines domestic and international enforcement, precursor chemical control, the identification and cleanup of large and small toxic laboratories, and an aggressive attack on the money flow. We continue to focus our enforcement efforts on the major organizations involved in methamphetamine trafficking. From FY 2006 to FY 2007, active meth cases increased by 30 percent, cases initiated increased by 48 percent, and dismantlements increased by 18 percent. These efforts have yielded positive results. As of February 1, 2008, the number of super labs (clandestine labs with a production capacity of 10 pounds or more of methamphetamine within a production cycle) seized in the United States dropped from 144 in calendar year 2002, to 11 in calendar year 2007, a 93 percent decrease. With regard to seizures of small toxic laboratories, the number has dropped from a peak of 10,146 in 2003, to 2,732 in 2007, a 73 percent decrease. Furthermore, as a result of stringent state laws and the implementation of the 2005 Combat Methamphetamine Epidemic Act (CMEA), DEA has seen a 70 percent reduction in clandestine lab incidents since their peak in 2004. (Incidents are defined as clandestine labs, dumpsites, and equipment removals.)

Conducting clandestine laboratory training is another component of our strategy, and in FY 2007, we trained 1,221 DEA employees and state and local officers throughout the United States. Additionally, during FY 2007, we provided clandestine laboratory training for more than 1,200 of our foreign counterparts, including more than 650 Mexican officials. In further support of DEA’s training in this area, a new clandestine laboratory training facility is under construction, with a target completion date of July 2008. Finally, DEA continues to enforce the provisions of the CMEA governing the regulation of, among other things, the retail over-the-counter sales of ephedrine, pseudoephedrine, and the chemicals commonly found in cough, cold, and allergy products. In 2007, DEA made the first arrest in the nation for a violation of the act, which involved the purchase of 29 grams of ephedrine within a single month – three times more than allowed by law.

Fiscal Year 2009 Budget Request

For FY 2009, DEA is requesting a total of $2.6 billion ($1.9 billion in the Salaries and Expenses Account, $244 million in the Diversion Control Fee Account, and $379 million for OCDETF investigation activities and other reimbursable agreements). A total of 10,814 positions, of which 5,252 are Special Agent positions, are requested from these funding sources. For the Salaries and Expenses Account, this request represents an increase of $79 million over FY 2008, and was developed with the goal of advancing DEA’s enforcement strategy in the most efficient and effective manner.

In addition, I would like to express my strong support for the Department’s $43.9 million request for law enforcement wireless communications (Integrated Wireless Network Deployment), which would begin the replacement of outdated legacy equipment with narrowband compliant technology, as well as legacy stand alone component networks with a new and improved single network. These replacements are a step toward much needed improvements in security, range and interoperability, and are critical to the life and safety of DEA Special Agents and our state and local partners. Of the amount requested, DEA would receive $9 million in FY 2009 and $9 million in FY 2010.

The FY 2009 DEA request includes funding for one multifaceted program enhancement, which is comprised of six elements grounded in intelligence-driven enforcement, multilateral cooperation, sequential enforcement operations, and end-game capability. Five of the six elements are funded under the Salaries and Expenses Account, and the Diversion Control Fee Account funds one element.

In summary, DEA is requesting $21 million and 41 positions, including 30 Special Agents to enhance our DFAS program with the objective of dramatically increasing our impact on drug availability, while also promoting the security of the United States and our borders. The DFAS has consistently measured up to and exceeded all expectations and, as I stated earlier, is one of the factors responsible for the drop in drug availability in FY 2007. This requested budget enhancement will strengthen DFAS in a very substantive way by ensuring an increase in the frequency of synchronized operations that are supported by flexible and mobile assets.

Salaries and Expenses Account

1. FAST Expansion ($7 million and 20 positions, including 18 Special Agents and two Intelligence Analysts).

DEA’s Afghanistan FAST strategy entails advising, training, and mentoring our Afghan counterparts in the NIU of the CNP-A. Using a revised model, the increased funding would establish two additional teams available for deployment in the Western Hemisphere and other threat locations.

Each ten-member team (nine Special Agents and one Intelligence Analyst) would be deployed up to six months annually. The teams’ assignment would be to assist DEA’s Country Office personnel and host nation counterparts in Central America, South America, and the Caribbean by bringing additional investigative expertise and resources to bear on important enforcement and training efforts in this primary drug producing and trafficking region.

2. Strategic Drug Flow Enforcement Operations ($2 million – Operation All Inclusive deployment).

Operation All Inclusive (OAI), a large-scale enforcement operation in the source, transit, and arrival zones, is the cornerstone of the DFAS. To date, there have been four OAI deployments, all of which have resulted in very significant interdictions and seizures and forced traffickers to delay or suspend their activities, divert their routes, change their modes of transportation, and even jettison loads. As these deployments continue, we fully expect our enforcement operations to result in an increased reduction in drug availability. The $2 million request would fund the travel, aviation support, intelligence collection, and host nation support associated with an expanded OAI deployment.

3. Tactical Aircraft and Personnel ($8.9 million and three Special Agent pilots).

This program increase would allow the purchase of one new Bell 412 twin-engine helicopter to support interdiction operations in the transit zone, including FAST deployments, and would aid air, maritime, and land drug trafficking investigations. Aircraft such as the Bell 412 are critical to the success of operations that often take place over water or in remote jungle regions. The remaining funds would be used to cover the three pilots, their equipment and related expenses.

4. Southwest Border Enforcement ($2.5 million and 16 positions, including 9 Special Agents and two Intelligence Analysts).

DEA has long played a central role in the counter narcotics strategy to combat the violent drug trafficking organizations along our border with Mexico. Our close partnership with Mexico over the years has paid dividends in the areas of seizures, money laundering, arrests, and extraditions. This request will allow us to add investigative and support personnel in locations in close proximity to the southwest border for purposes of targeted enforcement operations in the arrival zone.

5. Open Source Analysis ($150,000 and one position).

Intelligence derived from publicly available sources, including books, newspapers, periodicals, broadcast media, and the Internet is known as open source intelligence. It is a valuable investigative tool used by DEA and throughout the Intelligence Community. This request would allow DEA to hire one Intelligence Analyst whose duty would be to manage, exploit, and integrate DEA’s open source intelligence capabilities.

Diversion Control Fee Account (DCFA)

DEA’s FY 2009 request includes $244 million under the DCFA, a $5.2 million increase over FY 2008. As stated above, the DCFA request provides funding for one element under the DFAS plan.

DFAS initiative – Transit Zone Precursor Chemicals Diversion ($498,000 and one Diversion Investigator position).

Disrupting the flow of pharmaceutical controlled substances and precursor chemicals between the source zones and the United States is a major tenet of the DFAS. Due to the very strong regulatory measures Mexico is taking to choke off the flow of chemicals, the enforcement focus has shifted to Central America. To address the specific challenge of the diversion of chemicals originating in Asia and Europe through Guatemala to methamphetamine super labs located in Mexico and the United States, DEA proposes to assign a Diversion Investigator to the agency’s Guatemala City Country Office. The position would be devoted to investigative activities aimed at targeting and disrupting those organizations in the region that are responsible for transiting precursor chemicals through Guatemala.

Conclusion

The multifaceted aspects of drug trafficking: production, precursor chemical acquisition, smuggling (air/sea/land), distribution, and money laundering, cannot occur in a vacuum; they need a favorable environment in which to function. That environment, like any business, licit or illicit, needs to be conducive for operations to thrive. Remote areas, vast expanses of ocean, weak or non-existent institutions, and corrupt officials provide favorable conditions for trafficking in cocaine, methamphetamine and heroin. In our lifetime, we have seen established institutions in Mexico, Colombia, Afghanistan, and elsewhere under siege by drug traffickers because, unlike legitimate business, drug traffickers can use violence and intimidation to ensure bottom-line success.

Mr. Chairman, Ranking Member Frelinghuysen, and Members of the Subcommittee, DEA has a unique role in the drug law enforcement community in that we direct our attacks on the world’s drug trafficking organizations. Our Drug Flow Attack Strategy, as I stated earlier, has been enormously successful in impacting the flow of drugs, money, and chemicals between the source zones and the United States. By driving down the availability of illegal drugs in the United States through our national and international efforts, DEA is having a very direct impact that is felt right here at home in our own neighborhoods and communities. The support from this subcommittee has been vital to all of DEA’s work to attack illegal drugs in a comprehensive manner, and we look forward to your continued support as we meet the challenges ahead.

This concludes my remarks. I am happy to answer any questions you may have.

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