Review of the Bureau of Alcohol, Tobacco, Firearms and Explosivesí
Implementation of the Safe Explosives Act

Evaluation and Inspections Report I-2005-005
March 2005
Office of the Inspector General


Appendix IV
Comments from the ATF



  U. S. Department of Justice
Bureau of Alcohol, Tobacco,
Firearms and Explosives

Office of the Director
Washington, DC 20226
MAR 25 2005


MEMORANDUM TO: Inspector General
Department of Justice
 
FROM: Director, Bureau of Alcohol, Tobacco, Firearms and Explosives
 
SUBJECT: The Office of the Inspector General's drafted Review of the Bureau of Alcohol, Tobacco, Firearms and Explosives Implementation of the Safe Explosives Act: A-2004-006
 

Thank you for the opportunity to comment on the subject review.

As the report explains you examined the implementation of the Safe Explosives Act of 2002 (SEA). The SEA enacted the most significant changes to Federal explosives laws in over 30 years, requiring all persons receiving explosives to acquire a permit from ATF, ATF had six months to implement the SEA, and we accomplished this task by realigning existing resources.

The report contains a number of recommendations that we will respond to individually below. We believe that most of the licensing-related findings and recommendations resulted from the exceedingly short two- to six-month time frames accorded to ATF to implement the statute. With subsequent appropriations, ATF has created the Federal Explosives Licensing Center that is working to resolve many of the problems you address.

Explosives are used in virtually all aspects of our society, from mining and road construction to steel production. The continued flow of explosives is critical to the American economy. We at ATF are extremely proud of the fact that we were able to qualify all companies that needed permits under the SEA to continue to receive explosives necessary for their businesses, without disruption. This accomplishment is in keeping with our goal of facilitating the lawful use of explosives while ensuring the safety of all Americans.

The enactment of the SEA coincided with the Homeland Security Act of 2002. This resulted in the transfer of the firearms, explosives and arson jurisdiction, as well as the alcohol and tobacco diversion jurisdiction, from the Department of Treasury to the Department of Justice. In fact, the SEA became effective, in part, on January 24, 2003, the very day of ATF's transfer. A significant amount of ATF's regulatory inspector resources, including personnel and financial assets, remained with the Department of the Treasury for the creation of the Alcohol and Tobacco Tax and Trade Bureau (TTB). Prior to the transfer, inspectors worked on alcohol, tobacco, firearms, and explosives inspections.

The TTB recruited a number of highly experienced inspectors and staff from the ATF in order to establish the TTB's work force. This resulted in the loss not only of personnel and financial assets, but also the loss of intangible assets such as knowledge, leadership, industry contacts, and training by the experienced inspectors that went to TTB. In addition, ATF temporarily assigned a number of its own experienced inspectors for several months to the TTB, to assist that agency's development.

ATF greatly appreciates the OIG's positive acknowledgements of some of ATF's accomplishments. ATF's explosives enforcement and regulatory efforts work together to prevent violence, enhance the security of explosives, and to increase public safety. For example, the OIG recognizes the unprecedented special inspection efforts ATF took in response to the terrorist attacks of September 11, 2001. With nearly all of its regulatory and some criminal enforcement resources devoted to this extremely important task, ATF was able to conduct approximately 7,500 compliance inspections in approximately 120 days.

ATF also appreciates the OIG's positive recognition of some of ATF's accomplishments in implementing the SEA. For example, the OIG on page 7 recognizes the steps ATF took to inform the industry of the SEA. The report notes:

ATF sent letters to licensees, posted frequent updates to [ATF's] website, and communicated with industry groups. For example, four days after the SEA was enacted, [ATF] issued open letters to industry members regarding the provisions of the SEA. In the course of the next month, [ATF] distributed fact sheets, press releases, and a poster informing unlicensed explosives users about the new licensing requirements.

In addition, the report notes that ATF appointed a "single point of contact and a small team" for implementing the SEA. The report recognizes that, under the leadership of this contact and team, "...ATF worked to keep its employees and explosives members informed about the SEA, coordinated meetings and communication between ATF and outside groups, and coordinated the training of Inspectors to implement SEA provisions." The OIG also recognizes that ATF's activities "...did not disrupt [the explosives industry] operations" and that explosives licensees were generally informed about the SEA's requirements. Industry members told the OIG that they had "...few specific problems with the interim rules" developed and published by ATF. This praise by the OIG directly contradicts other portions of the report that express serious concern about the ATF's interim regulations, explosives licensing operations, SEA training, and industry dissatisfaction.

The following response contains ATF's comments to the OIG's Recommendations, Narrative Report, and Additional Issues and Appendix I. ATF appreciates the opportunity to comment on the subject review. We recognize the seriousness of our explosives responsibilities, and their importance to our missions of preventing terrorism, reducing violent crime and protecting the public. From criminal enforcement of explosives laws, to partnerships with the explosives industry, the work of ATF helps ensure the safety and security of our Nation.


LIST OF ACRONYMS

ACHC Automated Criminal History Check
AEPD Arson and Explosives Programs Division
AET Advanced Explosives Training
ANR ATF's NICS Referral Database
APA American Pyrotechnics Association
APA Administrative Procedure Act
ATF Bureau of Alcohol, Tobacco, Firearms and Explosives
DOB Date of Birth
DOT Department of Transportation
EIPB Explosives Industry Programs Branch
EP Employee Possessor(s)
EPQ Employee Possessor Questionnaire
FBI Federal Bureau of Investigation
FEL Federal Explosives License (or Permit)
FELC Federal Explosives Licensing Center
FFLC Federal Firearms Licensing Center
FLS Federal Licensing System
IBT Inspector Basic Training
IFDC International Fertilizer Development Center
IME Institute of Makers of Explosives
IOI Industry Operations Investigator
ISEE International Society of Explosives Engineers
MSHA Mine Safety and Health Administration
NCIC National Crime Information Center
NELC National Explosives Licensing Center
NICS National Instant Criminal Background Check System
NLETS National Law Enforcement Telecommunication System
NLC National Licensing Center
NMA National Mining Association
NPRM Notice of Proposed Rulemaking
NTN National Tracking Number
OIG Office of the Inspector General
OJT On-the-Job Training
OLC Office of Legal Counsel
POC Point of Contact
ROD Explosives Relief of Disability Section
RP Responsible Person(s)
SEA Safe Explosives Act
SSN Social Security Number
TECS Treasury Enforcement Check System
TPD Office of Training and Professional Development
TSA Transportation Security Administration
TTB Alcohol and Tobacco Tax and Trade Bureau


TABLES OF CONTENTS


A. ATF's Comments on the OIG's Specific Recommendations (1-10)

1. Implement procedures to ensure all EPs receive thorough backgrounds.

  Page 8
2. Establish controls to ensure EPs do not remain in a "pending" FLS in FLS for extended periods.

  Page 10
3. Implement procedures to ensure the integrity, completeness, and accuracy of the EP information in FLS.

  Page 10
4. Implement quality control procedures, data entry protocols, and system modifications to ensure FLS data accuracy.

  Page 12
5. Use existing ATF EP information to provide a monthly listing to each ATF Field Division of the licensees and EPs in their jurisdiction to determine the most egregious cases of licensees who have failed to notify ATF of new hires.

  Page 13
6. Ensure there is no unauthorized or inappropriate use of FBI NICS E-Check.

  Page 13
7. Designate a single Headquarters point-of-contact for Inspectors and explosives industry members.

  Page 14
8. Examine alternatives for speeding the delivery of the ATF's Advanced Explosives Training Course, and develop a curriculum to build explosives expertise within ATF's Inspector workforce.

  Page 14
9. Develop a timeline for FELC implementation.

  Page 15
10. Develop comprehensive plans, funding requests, industry notices, proposed regulations, and any other documents necessary to implement the authority granted under the SEA to collect and catalog samples of explosives at the ATF National Laboratory.

  Page 16

B. ATF's Comments on the Narrative of the Report

1. ATF information systems are ineffective for managing the explosives licensing functions mandated by the SEA.

2. The ATF does not timely adjudicate appeals from individuals seeking reconsideration of prohibited person status.

3. ATF does not plan to conduct background checks on all EPs until 2006.

4. Inadequate training for ATF Inspectors has resulted in a lack of explosives product knowledge and inconsistent regulatory enforcement; it will take up to 7 years for all ATF Inspectors to complete the ATF's revised training course.

5. ATF attempted to increase its oversight of explosives transportation in the beginning of 2003.

6. If ATF had issued a notice of proposed rulemaking (NPRM), rather than an interim rule, "...explosives industry member would have been afforded the opportunity to comment on ATF's plans prior to implementation."

7. Miscellaneous Comments on OIG inaccuracies.


C. Response to Additional Issues & Appendix I



A. ATF's Comments on the OIG's Specific Recommendations:

1. Implement procedures to ensure all EPs receive a thorough background check.

As an initial matter, it is critical to understand that in November 2002 ATF was given 2 to 6 months and had to realign personnel and resources to implement the provisions of the SEA, including conducting background checks of EPs and RPs at FELs nationwide. ATF used all available resources to timely implement the requisite SEA background checks. These checks were conducted using the existing FLS and E-check systems, programs that are simply not designed to accommodate SEA requirements. 1

Despite the obstacles, ATF has implemented appropriate procedures to ensure that EPs receive the required background checks. Current procedures, some of which have been instituted as a result of the OIG audit, include FELC entry of each EP submission into the ATF FLS and into the FBI NICS E-Check databases. FBI results -- proceed, deny, or delay -- are generally available within 24 hours. ATF receives an FBI "proceed" or "deny" response in 10 minutes approximately 92% of the time. FELC now retrieves the FBI results as they become available and enters the results into FLS. This more streamlined approach ensures that each EP timely undergoes the required background check.

In addition, ATF is in the process of establishing additional procedures to ensure that the checks are completed as expeditiously as possible. For example, FBI results of "delay" are deposited in the ATF's ANR and identified by ATF as "pending." ATF is developing new referral procedures to refer pending EPs to the respective ATF field offices for further investigation and resolution. Also, in cases where no court disposition documents may exist, the ATF Office of the Chief Counsel will assist in making a final determination of deny or proceed. These procedures ultimately will assist ATF in finalizing unresolved determinations for the delayed EPs.

OIG Conclusions Related to EP Checks

Three of the OIG conclusions related to EP checks are addressed below. As noted previously, and throughout this response, ATF is establishing new FELC procedures to ensure that thorough checks are conducted as expeditiously as possible. Among other things, ATF is increasing FELC staff to manage the voluminous EP submissions and records. In addition, FELC staff will receive FBI NICS training in May 2005. As such, ATF is optimistic that any potential errors that may have occurred in the past will not reoccur in the future.

a) During the OIG investigation, the OIG requested an unedited listing of the first 1,000 EP records sorted alphabetically in FLS as of January 12, 2005. Based on a comparison of ATF and FBI data, the OIG found no record that the ATF requested FBI background checks on 59 of 683 EPs, or 9 percent of the OIG sample.

This discrepancy between ATF and FBI records could have occurred due to incomplete or inaccurate EP FLS data entry that subsequently was corrected. The OIG's conclusion also did not take into account whether the EP identified was associated with an active or inactive explosives record. Finally, given the limited staff and thousands of applications to process, it is possible that 59 EPs may not have had NICS checks conducted. The reason for the reported "clear" or "pending" status indicated in FLS for these 59 EPs may be due to the fact that they received NCIC/NLETS/TECS background checks. ATF will follow up on these 59 EPS to ensure that appropriate checks were in fact completed and resolved.

b) The OIG also concludes that ATF failed to complete the background checks for 655 of 1,157 EP records reviewed and identified by the FBI as possible prohibited persons, or 57 percent of OIG sample. This data would suggest that 655 potentially prohibited individuals continued to have authority to possess explosives absent a final ATF determination.

ATF understands that these possibly prohibited persons are "delayed" EPs. Per prior discussion, FBI may be unable in its 30-day time period to resolve a criminal history record as a "proceed" or "deny." FBI then will delay the EP and ATF will place the EP in "pending" status. In many cases, an EP is pending due to a criminal history record with a naked arrest and no disposition. ATF cannot lawfully render a final determination that a person is prohibited based on a naked arrest. Rather, ATF first must resolve the disposition prior to rendering a final determination of deny. ATF during its investigation may be unable to timely resolve a delay for several reasons, including inaccessible or unavailable court records. In other cases, ATF understands that the delays may be inaccurate. ATF will ensure resolution of each of the 655 delayed EPs.

c) The OIG also concludes that, when the SEA was first enacted, there were instances of ATF delays in retrieving NICS results and updating FLS.

ATF recognizes that, at the start of the SEA implementation, there were instances of such delays. This can be attributed to lack of familiarity with the new procedures and systems. The procedures that ATF now has in place should alleviate this problem in the future.

d) Finally, the OIG Report on page 29 finds that NICS denied four EPs who were convicted felons, and that ATF delayed them.

ATF has since denied each EP and issued appropriate denial letters.

2. Establish milestones and controls to ensure that EP applicants do not remain in a "pending" status in FLS for extended periods.

We concur. ATF is finalizing referral procedures that will address the issue of EPs remaining pending in FLS for extended periods of time. Specifically, ATF is developing procedures to determine when and how a referral will be generated and forwarded to the respective ATF Field Office for resolution. In addition, ATF plans to develop a system-generated monthly report, for all active applicant and renewal FELs, of each RP/EP who remains pending beyond 60 days. FELC will ensure that a final determination is completed for these pending RPs/EPs.

3. Implement procedures to ensure the integrity, completeness, and accuracy of the EP information in FLS. To correct the current data problems, ATF should conduct a 100 percent cross-match of the names of individuals issued licenses and permits by ATF with the names of individuals on whom the FBI conducted NICS checks, and then:

  1. Conduct background checks on any individuals contained in [ATF's] licensing system but not confirmed as having been checked by the FBI.
  2. Immediately recheck the license status of all individuals determined by the FBI to be prohibited persons and ensure those individuals are denied access to explosives.
  3. For any individual that the FBI has recorded a NICS background check under the ATF's NICS user identification number, but for whom [ATF] has no record in it licensing system, determine whether the person is involved in the explosives industry. If the person is, enter the individual into the ATF's licensing system, and, if not, conduct an investigation to determine who may have performed the background check and why.

We concur that it is critical that ATF maintain efficient procedures to ensure the integrity, completeness, and accuracy of the EP information in FLS. ATF is constantly reevaluating the FLS system to examine new methods to improve the FLS data within the confines of the FLS software. In some cases, ATF has instituted innovative new methods to ensure data accuracy. For example, in response to this OIG investigation, ATF has implemented internal control procedures to periodically compare the data in FLS with the data in the ANR database (where FBI "delay" /ATF "pending" results are stored). In this manner, ATF can ensure that in certain cases the ANR and FLS are reconciled.

However, we disagree with the report's underlying assumption that the ATF FLS and FBI NICS systems must be mirror images of one another. FBI is not the agency of jurisdiction charged with issuing the final determination on an EP or RP. Rather, the system is designed to operate as follows:

  • The FBI NICS section allocates 30 days to perform background checks on EPs/RPs listed on FELs.
  • FBI provides ATF with results of deny, proceed, or delay.
  • ATF makes a final determination that mayor may not mirror the FBI determination. For example, ATF may determine that an EP was granted relief from explosives disabilities or that an arrest did not result in an explosives disability. 2
  • The FLS is updated with the ATF determination.

After the initial 30 days, the FBI is not responsible for conducting any further review. At that time, it is solely ATF's responsibility to render a final determination on the status of an individual. ATF may conduct days or weeks worth of research to reach a final determination on a particular individual. For example, the disposition for an otherwise ambiguous criminal history record may require that a field agent travel to distant courthouses to obtain certified copies of dispositions.

Because ATF, in certain cases, will conduct additional research of an FBI result, there will always be instances in which ATF's and FBI's individual records will differ. The differences do not necessarily represent a material weakness in the system or procedures. Rather, certain ATF records will always be more comprehensive than FBI files because FBI is not required to work a file beyond the 30-day window.

Even if it were, for some reason, critical to reconcile ATF and FBI databases, because of competing priorities ATF could not conduct a 100 percent cross-match of the names of individuals issued licenses and permits by ATF with the names of individuals on whom the FBI conducted NICS checks. However, it would be extremely helpful for ATF to be able to access the FBI audit log and any FBI research accomplished in the FBI's 30-day window. Authorization for ATF access would, among other things, avoid duplicative efforts, more efficiently resolve delays, and allow ATF access to information concerning the FBI's specific basis for a denial or proceed. Unfortunately, at this time FBI regulations preclude ATF access to the FBI audit log. ATF believes that new authority for FBI to create a separate, freestanding FBI audit log to which ATF could access FBI casework would greatly improve the efficiency and accuracy of processing background checks.

4. Implement quality control procedures, data entry protocols, and system modifications to ensure FLS data accuracy, including:

  1. Modification of FLS to ensure that an Employee Possessor has only one status, system-wide, no matter how many licenses or permits associated with the individual.
  2. Modification of FLS to prevent the entry of illogical or incomplete data.
  3. Modification of FLS to preclude the entry of Employee Possessor information into FLS without a NICS background check having been completed.

To the extent that existing information systems and resources allow, ATF concurs that it will implement quality control procedures and data entry protocols in FLS to: (a) ensure an individual EP's current status is reflected in all FLS records; and, (b) prevent the entry of inaccurate data.

ATF emphasizes that FLS is not designed to accommodate these OIG requests with 100 percent success. While ATF can run periodic name checks --to ensure that a person has the same status each time he or she is entered on multiple licenses --these periodic checks will not remedy inconsistent status determinations where a name has been entered multiple times and misspelled, entered differently (e.g. no middle initial vs. middle initial vs. full middle name), reversed name (e.g., John Alexander vs. Alexander John), etc. ATF can run "wild card" checks with SSNs when available to ensure greater accuracy of name checks, although ATF cannot lawfully require EP SSNs.

Additionally, ATF and FBI are developing new procedures that will implement the OIG's recommendations (a) and (b), above. For example, FBI NICS assigns all E-Check submissions an NTN. After March 2005, FELC personnel will now enter the NTN in the comments field in the FLS EP record in order to have the ability to directly correlate the NTN with the individual and FEL. Further, the FBI recently has implemented procedures such that, when ATF enters and later corrects incorrect data into E-Check, the FBI NICS section will issue a new NTN number and generate a new check based on the new data. FBI will then "cancel" the original NTN to eliminate duplicate entries in its system.

The agencies' new procedures will assist in ensuring that the OIG recommendations in 4(a) and (b) are fulfilled to the extent practicable.

Finally, ATF does not concur with the OIG's third recommendation to preclude entry of EPs into FLS absent an FBI check. ATF needs to enter the EPs into FLS first, before the FBI check, in order to correlate the EP with the particular FEL whose license application or renewal is pending.

5. Use existing ATF EP information to provide a monthly listing to each ATF Field Division of the licensees in their jurisdiction, the number of EPs, and the date the company last reported an EP to determine the most egregious cases of licensees who have failed to notify [ATF] of new hires.

ATF does not concur with this recommendation. ATF field offices inspect FELs at least once every 3 years. It is not necessary nor is it legally required to conduct monthly inspections of all FEL employee possessor information. Devoting limited resources to such a program is unlikely to yield significant information of law enforcement interest and would divert inspectors from conducting routine but critical firearms and explosives inspections.

6. Take action to ensure that there is no unauthorized or inappropriate use of the FBI NICS E-Check system. As an immediate action, [ATF] should cancel the NLC's NICS user identification number and assign unique user identification numbers to each individual responsible for conducting the checks.

ATF is committed to using the FBI NICS E-Check system in a manner that is consistent with the FBI regulations. Any unauthorized or inappropriate use of this system will result in appropriate disciplinary action. However, ATF does not concur with the OIG's recommendation to assign unique numbers to each FELC employee. Because the NICS E-Check system is designed to capture the name of each ATF individual conducting a background check at the time data is entered and at the time of retrieval, the need for a unique identification number for each individual responsible for conducting the checks is unnecessary and duplicative.

In this regard, the OIG reports that a sample review of 893 EPs disclosed 21 EPs who did not appear in FLS, or 2% of the OIG sample. The OIG data would suggest that ATF is conducting unauthorized background checks. ATF believes that these 21 EPs may be entered in FLS, however, the names may have initially been entered inaccurately and subsequently corrected in the ATF record (e.g., John Smith/John T. Smith). ATF acknowledges that there may be isolated instances where EPs listed on FEL applications receive E-checks but ATF did not enter the EP in FLS. As mentioned previously, ATF is taking corrective actions such as quality control procedures and data protocols to remedy these past problems.

7. Improve the consistency of regulatory determinations by designating a single individual at ATF Headquarters as a point-of-contact for Inspectors and explosives industry members. The point-of-contact should maintain a history of regulatory inquiries and post frequently requested information on the ATF's website.

Currently, EIPB serves as a single point of contact. The EIPB will continue in that role. Among other things, the EIPB:

  • Constantly evaluates how information is processed and communicated to ATF field personnel and the explosives industry to ensure effectiveness and historical accuracy;
  • Publishes, on a biannual basis, a newsletter to all explosives industry members that discusses regulatory issues and procedures;
  • Maintains and files an extensive history of regulatory inquiries, with some dating back to the 1970's;
  • Attends numerous industry events, seminars, and conferences annually, meeting with industry officials and organizations from such groups as the IME, NMA, ISEE, and AP A to discuss pertinent issues;
  • Instructs Inspectors during Advanced Explosives Training; and,
  • Is responsible for responding to hundreds of letters, facsimiles, phone calls, and other inquiries from industry and from ATF personnel on issues relating to the administration and enforcement of the Federal explosives laws and regulations.

The EIPB Chief is responsible for overseeing these functions and is already complying with this recommendation.

8. Examine alternatives for speeding the delivery of the ATF's Advanced Explosives Training Course to all Inspectors, and develop a curriculum to build explosives expertise within ATF's Inspector workforce.

The Office of Training and Professional Development (TPD) utilized a "train the trainer" approach to expedite training to reach all Field Divisions and Field Offices as quickly as possible on SEA implementation.

The Advanced Explosives Training (AET) course was revised in 2003 to include new regulations under the SEA. Since its revision, approximately 136 inspectors have attended the 8-day training. Due to the extensive and time-consuming nature of the course, it would not be practical to "speed the delivery" of this comprehensive training, however, ATF will be increasing course availability. AET will be offered three times in FY05, and the Explosives Training Branch plans to deliver four courses in FY06. We note that this course is not designed for the new inspector. Therefore, it is unlikely that the entire inspector workforce will have attended this training at any given time. AET is specifically targeted for journeymen level inspectors, on-the-job training officers, and inspectors who have completed Inspector Basic Training and on-the-job training. These personnel are independently conducting explosives inspections, and they can take the knowledge and skills developed during the course back to the office and pass it down to the new inspector workforce through on-the-job training and mentoring.

Inspector Basic Training is held for all inspectors at the Federal Law Enforcement Training Center in Glynco, Georgia. This training consists of a dedicated block on explosives laws and regulations, product identification, practical exercises on magazine construction and table of distances, and how to conduct a records examination.

TPD has designed and developed the advanced explosives training curriculum to build upon the expertise of the Inspector workforce obtained through previous training classes and on-the-job-training. These programs are already in place and include Advanced Explosives Training for Inspectors, Chemistry of Pyrotechnics, and the MSHA Mining, Blasting, Safety and Application Seminars. In addition to the above training courses, TPD will be providing each Field Division with a variety of explosives training materials and training aids to be utilized during mandatory roll-call training at the Field Office level to include Table of Distance review and exercises, Explosives Multimedia Database of product identification, classification and storage of explosives materials, safety, as well as training materials concerning the commercial explosives and fireworks industries. Accordingly, ATF is already implementing this recommendation.

9. Develop a detailed timeline for accomplishing the actions necessary to complete the implementation of the National Explosive Licensing Center in Martinsburg, West Virginia, including the implementation of changes to the licensing and background check processes, the adjudication process for Employee Possessors, and the data systems that will support these processes.

A detailed timeline has been prepared for the completion of the FELC in West Virginia. The FELC is now processing new and renewal explosives applications for 38 States. The FELC also processes all explosives appeals for new and renewal explosives RPs and EPs. (An appeal is filed when an RP or EP believes that the disqualifying criminal history record is in error or in fact belongs to another individual.) By May 2005, the FELC will also process all corporate accounts for large explosives licensees.

In addition, FELC works with the EIPB on updates to the FLS system regarding decisions on variance requests and relief of disabilities. By the end of fiscal year 2005, it is expected that all duties relative to explosive licensing will be transitioned to the FELC Martinsburg, West Virginia, from the NLC. The completion of this transition is dependent on the speed of the hiring process for the current FELC vacancies. Accordingly, ATF is already implementing this recommendation. 3

10. Develop comprehensive plans, funding requests, industry notices, proposed regulations, and any other documents necessary to implement the authority granted under the SEA to collect and catalog samples of explosives at the ATF National Laboratory.

ATF's effort to collect and catalog explosives samples pursuant to the SEA requires personnel, appropriate databases, and suitable storage facilities for collected samples. The ATF National Laboratory and Information Services Division, the two ATF components responsible for carrying out this SEA provision, did not receive any new positions to support this SEA implementation. Nonetheless, ATF is using current staff to move the implementation forward. The plan for implementing these efforts is described in the Laboratory Services FY05 Operating Plan and highlighted in the Office of Science and Technology Priorities through FY07. These efforts include the following 2005 action items:

  • Complete development of the ATF Explosive Materials Database;
  • Propose contracts for the development of the Database of U.S. Commercial Explosives;
  • Begin acquiring and constructing explosives magazines for the transport and storage of collected explosives samples;
  • Formalize explosive sample collection protocols to ensure that relevant data is consistently and accurately collected from manufacturers; and,
  • Advise the industry of collection protocols as necessary and when appropriate.

Accordingly, ATF disagrees with the OIG statement that ATF is making little progress with respect to these efforts. In fact, ATF is already implementing the OIG recommendations.


B. ATF's Comments on the Narrative of the Report:

1. ATF information systems are ineffective for managing the explosives licensing functions mandated by the SEA.

ATF invested approximately $1.5 million on modifications to FLS, and the other ATF systems that are integrated with FLS, to accommodate the provisions of the SEA to the extent feasible.

FLS is the core application for FELC. Both firearms and explosives licenses and permits are issued from FLS. FLS was modified to accommodate a number of processes, to include:

  • The generation of the Type 60 Limited Explosives Permit. Intrastate users of explosives must first obtain an ATF "limited permit" prior to receiving explosive materials. The limited permit allows the purchaser to receive explosive materials from an in-State explosives licensee or permittee on no more than six occasions during the period of the permit. The limited permit is valid for one year and is renewable.
  • The recording of the receipt of fingerprint cards and photographs for all RPs submitted to ATF.
  • The recording of the status of the criminal background checks from ACHC as well as NICS. The status is entered in as either pending, denied, or cleared. FLS was modified so that a license/permit cannot be issued if any of the responsible persons do not have a background status of cleared.
  • ATF notifies employers in writing or electronically with a general Notice of Clearance as well as the result of each individual background check. ATF provides EPs and RPs with letters of clearance, denial, and delay as appropriate.
  • The interface to ACHC was modified to incorporate a fingerprint card number from FLS. This change will allow for an electronic interface between the RPs and the electronic submission of the fingerprint cards by ATF.

2. The ATF does not timely adjudicate appeals from individuals seeking reconsideration of prohibited person status.

The OIG states that the ATF does not timely adjudicate appeals from individuals seeking reconsideration of prohibited person status. It cites in support of this claim the ATF Draft Order 3320.5 and an internal Explosives Relief of Disabilities Section's document, titled "Office Procedures." The OIG did not provide any recommendations on how to correct what it believes to be a lengthy process.4

As an initial matter, ATF will always conduct as thorough an investigation and adjudication, in as expeditious a manner as possible, with the focus of all investigations on public safety rather than rates of clearance or denial. Each relief application filed triggers an exhaustive field investigation, extensive Headquarters adjudication, and a thorough final determination. The Office of the Chief Counsel must also approve all denials and other complex relief determinations. Additionally, although internal ATF guidelines accord Special Agents 60 days to complete the field investigation, the OIG fails to recognize that these guidelines also provide that Special Agents may request an extension of time beyond the 60 days where necessary.

In fact, Special Agents often require additional time to interview references, to research court files, to travel on behalf of the investigation, to obtain additional information from the applicant, to accord the applicant additional time to gather information, and to prepare a response for Headquarters review. Finally, the applications for relief are not evenly dispersed between ATF's field divisions. This causes some field divisions and agents to be overburdened with applications, while others receive far fewer assignments.

There is no disagreement that the average investigation time to finally adjudicate these applications could take up to 120 days.5 ATF also agrees that 13 applications took more than 6 months to grant the relief. ATF believes that this is not an unreasonable amount of time to thoroughly investigate a prohibited person's background, as described above, before taking the extraordinary measure of granting someone relief from explosives disabilities.

Further, ATF believes a more balanced appraisal of the length of time would compare the average length of time for "granted" relief applications versus "denied" applications. Internal analysis shows that denials take longer, which increases the average time for all applications combined. The denials take longer in part because there are additional review procedures required to ensure the applicant's due process. In any event, ATF appreciates this information and will update the "Office Procedures" to include a more appropriate length of time to adjudicate applications.

Ultimately, the OIG's statement may mislead readers into thinking that the industry and relief applicants are experiencing undue delays in relief determinations. In fact, ATF is exercising due diligence in ensuring that those persons who are denied relief receive the requisite due process. ATF is also exercising due diligence in ensuring that only those persons who do not present a threat to public safety are granted relief. Given this serious responsibility, ATF will not compromise our investigations in this regard.

As a final matter, ATF notes that in many if not most cases relief applicants are convicted felons, they were convicted pre-SEA, and they should have requested relief at the time of the conviction. 6 In some instances, these applicants have been possessing explosives unlawfully for extended periods of time. The only reason they are applying for relief at this time is that ATF now has authority to conduct background checks. ATF anticipates that the numbers of post­ SEA filings of relief applications by convicted felons may diminish as the backlog of these individuals is reduced.

3. ATF does not plan to conduct background checks on all EPs until 2006.

The report on page 13 states as follows: "[ATF] does not plan to conduct background checks on all EPs until 2006". This statement implies that ATF is choosing - as a policy matter - not to conduct complete checks on all EPs. In fact, as noted later in the document, the Federal explosives law does not authorize such checks until renewal of a license. The better way to state this concept is as follows: "The law does not require background checks on all EPs until all existing businesses qualify under the SEA in 2006."

4. Inadequate training for ATF Inspectors has resulted in a lack of explosives product knowledge and inconsistent regulatory enforcement; and, it will take up to seven years for all ATF Inspectors to complete the ATF's revised training course. (Page 47, Paragraph 2)

The OIG's report focuses on several areas of perceived inadequate training and lack of expertise. ATF believes it has improved its training courses, expanded its focus on on-the-job training, and successfully strengthened its expertise throughout ATF.

a) Training Courses: See ATF's response to Recommendation 8, where we have addressed a number of the concerns regarding delivery of the Advanced Explosives Training, as well as availability of Chemistry of Pyrotechnics course, and the MSHA Mining, Blasting, Safety and Application Seminars. Additionally, it should be noted that all inspectors receive an extensive block of training on explosives and inspections during the Inspector Basic Training course at the Federal Law Enforcement Training Facility in Glynco, Georgia.

b) On-the-job Training: The OIG report fails to acknowledge the success of ATF's inspector on-the-job training (OJT) program. During the program, an experienced or journeymen inspector works closely with a new inspector, providing guidance and evaluation on all facets of the inspector's work. ATF continues to work toward ensuring there are enough experienced inspectors in all field divisions to train the new inspectors that come aboard. Currently, there are approximately 420 Grade 12/13 IOIs and 160 Grade 5 through 11 IOIs.

In addition to the formal on-the-job training, each explosives inspection enhances inspectors' knowledge. New products are being developed all the time, and ATF's field experience and partnership with the industry provide excellent opportunities for exposure to new and infrequently used explosives. Therefore, ATF encourages its inspectors to learn as much as possible about the industry and the products they encounter in the field.

c) Expertise: The report states that some inspectors who have attended AET feel that they are not comfortable addressing all issues they encounter in their field inspections. ATF inspectors are responsible for conducting inspections at a variety of types of explosives premises, including: commercial explosives and fireworks manufacturers and importers, retail businesses, mines, quarries, demolition companies, specialty products, rocket propellant manufacturing operations, construction companies, and shot services. In addition, most ATF inspectors spend the majority of their field time on firearms issues. Due to the broad range of field activities, it is understandable that some inspectors are more comfortable addressing certain issues and less comfortable with other issues. With this in mind, ATF's EIPB is a field resource staffed with personnel whose primary objective is the consistent and efficient administration and enforcement of the Federal explosives laws and regulations. These former inspectors work with ATF inspectors and agents, industry members, the general public, and other agencies on a wide variety of explosives issues. One of their primary purposes is to serve as a resource to ATF inspectors in the field.

According to the report, an ATF official confirmed that ATF is aware that inspectors from different field divisions are sometimes inconsistent in their advice to industry. Unfortunately, industry members have sometimes received inconsistent advice on similar issues. However, the number of these instances in which incorrect information has been received may be overstated. It is sometimes necessary to take into account several circumstances surrounding an issue in order to make an appropriate determination as to the correct course of action. In some cases, two situations that may appear to be alike may have significant differences that affect an ATF determination. If an industry member has a disagreement with an inspector or their recommended corrective action, they should contact the local area supervisor to discuss the situation.

We recognize inspecting the explosives industry is highly complex and difficult. For that reason, we are continually trying to develop more advanced training programs for inspectors and trying to make this training readily available to the appropriate workforce.

5. ATF attempted to increase its oversight of explosives transportation in the beginning of 2003.

The report at pages 9 through 11 address issues that arose during SEA implementation regarding the jurisdictional authorities of ATF and DOT.

Since its enactment in 1970, the Federal explosives law has prohibited "any person" who falls into a prohibited person category (e.g., convicted felon, fugitive, drug user) from shipping or transporting explosives in interstate or foreign commerce, or from receiving or possessing any explosives that have been shipped or transported in interstate or foreign commerce. 18 U.S.C. 842(i). For instance, since 1970, a truck driver who was a convicted felon was prohibited from transporting explosives interstate. The SEA did nothing to change that prohibition. In fact, the SEA added three categories of prohibited persons to the general proscription on shipping, transporting, receiving and possessing explosives interstate.

There is an exception to this general proscription providing that (in part and with certain exceptions) any aspect of the transportation of explosives which is regulated by the Department of Transportation (DOT) or agencies thereof, and which pertains to safety, is not subject to section 842(i) and certain other prohibitions. 18 USC 845(a)(1). At the time the SEA was enacted, DOT had not issued regulations that addressed the safety and security aspects of prohibited persons engaged in the transportation of explosives. In other words, there were no DOT regulations establishing DOT security threat assessment standards for determining whether or not a felon or other prohibited person under the Federal explosives law posed a security threat in transporting explosives. The USA PATRIOT Act, enacted on October 25, 2001, expressly authorized DOT to issue such regulations. However, DOT had not yet done so and in fact did not issue such regulations until early and mid-2003.

In an opinion by the Department of Justice Office of Legal Counsel (OLC), that office stated that the express lack of DOT regulations, specifically addressing the threat posed by convicted felons and others transporting explosives, authorized ATF's long-standing application of the prohibited persons categories to explosives transportation workers under Federal explosives law. Thus, ATF has enforced section 842(i) prohibited person categories against all persons transporting explosives since 1970.­

a) OIG Statement. The report on page 9 incorrectly suggests that the OLC opinion limited ATF jurisdiction to enforce section 842(i) to the SEA's three new prohibited person categories (i.e., aliens, dishonorable dischargees, renunciants). For example, the report states: "...the OLC determined that since the DOT did not have a mechanism to enforce the three prohibited categories created by the SEA... it was within the ATF's authority to enforce these prohibitions..." In fact, ATF since 1970 had authority to enforce all section 842(i) prohibited person categories against all persons transporting explosives. It was not until 2003 that DOT first promulgated regulations establishing DOT's security threat assessment standards in this regard. As a result, at that time, DOT preempted application of each section 842(i) prohibition against explosives transportation workers regulated by DOT.

    ATF Recommendation. On page 9, delete the following sentence: "However, the OLC determined that since the DOT did not have a mechanism to enforce the three prohibiting categories created by the SEA... it was within ATF's authority to enforce these prohibitions..." Replace with the following sentence:
    "However, the OLC determined that DOT had not issued regulations establishing DOT security threat assessment standards for determining whether or not a felon, alien, or other prohibited person under the Federal explosives law posed a security threat in transporting explosives. Therefore, it was within ATF's authority at that time to enforce these prohibitions."

b) OIG Statement. Additionally, the report on page 10 incorrectly suggests that ATF "regulated" explosives transportation: "The confusion arose because, although the ATF previously had authorization to regulate explosives transportation. ..it did not have a mechanism to enforce this authority until May 2003." This is not an accurate statement for several reasons. First, ATF did not and does not currently "regulate" explosives transportation. Additionally, even after the SEA, ATF did not have authority to conduct background checks on explosives transportation workers regulated by DOT (e.g., non-employees of licensees or permittees who were transporting explosives under DOT authority).

    ATF Recommendation: On page 10, delete the sentence beginning with "The confusion arose..." and replace with the following: "The confusion arose at the time of the introduction of a lawful ATF form for completion by explosives transportation workers in early 2003."

c) OIG Statement. On page 11, the report states that ATF "acknowledged" it had required a burdensome and unnecessary Federal form. The report suggests that ATF improperly imposed an unnecessary burden on industry. In fact, ATF stated that the form was unnecessary only as a result of recent TSA regulations.

    ATF Recommendation: In the sentence beginning with "In September 2003. ..", revise as follows: "In September 2003, in light of the new TSA regulations establishing DOT security threat assessment standards, the ATF stated that the [form] requirement was 'unduly burdensome and unnecessary' and discontinued the form."

6. If ATF had issued a notice of proposed rulemaking (NPRM), rather than an interim rule, "...explosives industry member would have been afforded the opportunity to comment on ATF's plans prior to implementation."

ATF has two concerns with the OIG's findings in this regard on page 8. First, there are inaccuracies regarding certain statements made by the OIG:

  • The statements that ATF issued interim regulations "shortly before the provisions of the SEA took effect," and also that the interim rule was issued "two months prior to the SEA's effective date," are incorrect. The interim rule was issued on March 20, 2003. The effective date for certain provisions of the new law was January 24, 2003 (e.g., new categories of prohibited persons). Other provisions of the SEA became effective May 24, 2003.
  • In Footnote 22, the draft report states that ATF "was unable to issue proposed rules prior to issuing interim regulations." This is incorrect. Proposed rules precede final rules, not interim rules.

Based on the discussion on page 8, along with the information provided in Footnote 22, it is apparent that the OIG believes that ATF should have issued a notice of proposed rulemaking rather than an interim rule.

Section 553(b) of the Administrative Procedure Act (APA), 5 V.S.C. 553(b), generally requires that agencies publish in the Federal Register a notice of proposed rulemaking. This section also provides that advance notice of, and public comment on, agency rules may be dispensed with "when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest." [Emphasis added].

For every statutory amendment of the Federal firearms or explosives laws preceding the SEA, ATF has issued temporary or interim regulations without first publishing a notice of proposed rulemaking. The "good cause" exception to the AP A authorizes this method of rulemaking. It is standard procedure for quickly providing information to a regulated industry.

In the interim rule, ATF clearly articulated its reasons for dispensing with the usual notice-and-comment procedure (see section titled "Administrative Procedure Act (APA)," page 13778). Among other things, it stated that issuance of a notice of proposed rulemaking followed by a comment period, consideration of the comments, and publication of a final rule would delay implementation of the important security and safety provisions of the SEA.

The effective date for certain provisions of the Safe Explosives Act was January 24, 2003, only 60 days after enactment, with the remaining provisions effective on May 24, 2003. As stated in the interim rule, the explosives industry needed immediate guidance to comply with the statute. F or example, industry members needed to determine whether any of their employees were prohibited from possessing explosives under the new prohibited person categories. In addition, the explosives industry, responsible persons, employees who possess explosives in the course of their employment, and members of the general public needed immediate guidance on the procedures for applying for relief from explosives disabilities under the new law. It was also necessary to provide immediate guidance concerning the limited permittee provisions of the law to give persons who may have needed such a permit time to learn the new requirements of the law, determine whether they should obtain a limited permit or a user permit, and file an application to avoid conduct which would be unlawful after the applicable effective date.

As indicated above, the rulemaking process is a lengthy one. The average length of time of a rulemaking proceeding, from the drafting of a proposed rule to the issuance of a final rule, is over one year. This would have been unacceptable for the proper implementation of the SEA. While it is technically true that ATF was unable to issue a proposed rule "due to time constraints,” ATF finds this statement to be misleading. It implies that a proposed rule was not issued because of ATF'S inability to act in a timely manner, rather than the lengthy time involved in the usual notice-and-comment rulemaking process.

Finally, ATF does not plan to issue final SEA rules in mid-2005, as indicated in the document. ATF recommends deletion of the entire paragraph and accompanying footnotes, beginning with "The ATF issued formal regulations...". ATF recommends inserting in its place the following: "ATF issued an interim final rule implementing the SEA in March 2003. ATF expects to issue final rules in or about October 2006."

7. Miscellaneous Comments on OIG inaccuracies.

a. Persons under felony indictment subject to Federal explosives law. The OIG report fails to recognize that, pre-SEA, persons subject to 18 V.S.C. 842(i) included persons under felony indictment. We recommend the OIG include this prohibition where appropriate. See OIG Report, pages i, 4.

b. Responsible persons/Employee Possessors. The report misunderstands the SEA's submission requirements for responsible persons, and the scope of the employee possessor provision. The explanation on page (ii) should read as follows:

In addition, the SEA required that certain proprietors... submit fingerprint cards, photographs and identifying information to ATF ...Finally, the SEA required ATF to conduct background checks on all employees of licensees and permit holders who are authorized to possess explosives.

c. Part 555. The report mistakenly references Part 55; the proper cite is Part 555. See OIG Report page 2, footnote 13.

d. Chart. The OIG appears to have mistakenly left a previous edition of this chart in the report. See OIG Report page 22.

e. Enactment dates of the SEA and its Provisions. The OIG report incorrectly states that the enactment of the SEA was on November 24, 2002. The correct date is November 25, 2002. The report also has incorrect dates for implementation of the SEA provisions, January 25 and May 23, 2003. The correct dates should be January 24 and May 24, 2003. These were the dates provided to the industry in two open letters and ATF I 5400.4. See OIG Report pages i, 4.

f. Final SEA regulations. The OIG states the final SEA regulations should be issued in 2005. A more realistic date is not before 2006.


C. Response to Additional Issues & Appendix I. pages 56-62

The OIG developed a section in its report, titled Additional Issues, in which it discusses several key issues that are not addressed by the SEA, but are nonetheless relevant to public safety and the safeguarding of explosive materials. See e.g, pp.xi-xii, 56-59. While ATF appreciates the OIG's attempts to bring these important issues to the attention of the report reviewers, we believe that this section should be removed. The issues discussed in this section have, at best, a tangential relationship to the scope of ATF's implementation of the SEA and appear to cast responsibility on ATF for matters not under its control.

If the OIG disagrees with this, ATF respectfully, but forcefully, requests that certain information be deleted as discussed at the January 11 meeting. Any information ATF has sent forward allowing for policy decisions on the part of the Administration is not subject to public disclosure.

In regards to "Appendix I: Domestic and Foreign Bombing Incidents," ATF is unclear on how this section also relates to implementing SEA. However, if the OIG wishes to maintain this appendix, then ATF would appreciate that the report accurately state that this analysis and the charts contained within were developed by the OIG, and not the ATF National Repository. Analytical errors were pointed out during the January 11 meeting. ATF recommends that this section be removed due to the fact that it is irrelevant to implementing SEA, however if the OIG wishes to provide such an analysis in this report, then we ask that the analysis be corrected as discussed or the OIG should ask the ATF Repository to conduct such an analysis and write the narrative summarizing the results of the analysis.

CONCLUSION

We sincerely thank you for the opportunity to review the OIG's drafted report. ATF recognizes that there are important discrepancies resulting from this review that need to be immediately and appropriately addressed. However, this report did not provide enough recognition towards the accomplishments of this agency for its implementation of the SEA. In a very short period of time, ATF was able to develop and publish regulations and forms, provide educational material to the industry, conduct industry educational seminars, reconstruct a database system with new functions, conduct thousands of employee background checks, and facilitate thousands of businesses to continue or begin business throughout the process. ATF is very proud of these accomplishments. Disclosing which processes or programs the OIG believes were successful would also be beneficial in giving ATF guidance for future initiatives.

Additionally, we strongly disagree with many of the findings and statements contained within this report. While we acknowledge that better procedures should be instituted and systems updated, we emphatically dispute the paragraph on pages 20 and 41, boldly displaying the OIG's results of the review. We are confident that this will change with the clarification ATF presents in this document and corrected figures.

(signed)


Carl J. Truscott



Footnotes

  1. As the OIG is aware, the FBI is allowing ATF to use the E-Check system as a temporary means of conducting background checks. The E-Check system is not set up to accommodate the SEA checks, for example, to accommodate the fact that an individual may be listed on several applications in different States, or to reconcile the final status determination of the individual with each listing.
  2. There may also be misspellings, incomplete names (e.g., John Smith and John Doe Smith), or reverse names (e.g., Kelly John or John Kelly) in one or more records that account for differences in FLS and NICS but this will not affect the final determination of whether an EP or RP is prohibited.
  3. Regarding data systems to support these processes, see Recommendations 1-5.
  4. Terminology used in the title statement to this section is inaccurate and could result in confusion over procedures EPs and RPs may pursue with ATF. "Appeals" are submitted to ATF's FELC by an EP or RP who disputes an ATF finding of prohibited, and believes that the criminal or alien records used by ATF are inaccurate or based upon the criminal history of a different person with a similar name. "Relief of Disability" applications are submitted to ATF's ROD by persons that admit to being prohibited, but wish to apply for relief of disabilities pursuant to 18 V.S.C.845(b). It is our understanding that OIG's report addressed the Relief of Disability application, adjudication and determination process as opposed to the appeal process. As such, ATF's response focuses on Relief as well.
  5. ATF's statistics show that the average number of days to "grant" relief was 106 days (below the average). It took an average of 181 days for ATF to determine that there was "no disability" (i.e., the applicant's disability was not disqualifying under 18 USC 842(i)). Finally, it took an average of 196 days to "deny" relief to applicants. At the time of the OIG's review, ATF had adjudicated 299 of 453 cases (66%).
  6. ATF would like to clarify certain OIG statements with respect to relief. For example, persons with pending ROD applications are admitted prohibited persons who cannot possess explosives by virtue of their self-admitted status. Also in the context of relief applications, it is generally inaccurate to state that ATF has" overturned" prohibited person determinations. Rather, pursuant to statutory authority, ATF grants relief to such persons.



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