Good afternoon Mr. Chairman and distinguished members of the committee. I am David Loesch, Assistant Director in Charge of the FBI's Criminal Justice Information Services Division, otherwise known as CJIS, located in Clarksburg, West Virginia. Thank you for the opportunity to speak to you today about the National Instant Criminal Background Check System, or NICS, which the FBI operates under the 1993 Brady Handgun Violence Protection Act.

The Brady Act requires background checks on firearm purchasers before a federally licensed gun dealer can transfer a gun. Brady Act background checks replaced what used to be an honor system under the gun control act, where gun dealers generally accepted at face value buyers' representations that they were not prohibited from possessing a firearm. For the first five years after the enactment of the Brady Act, the background checks were limited to handgun transfers and were performed by the chief law enforcement officer where the gun dealer was located. Beginning on November 30, 1998, dealers were required to contact the NICS for Brady background checks.

What is the NICS ?

The NICS is a system established by the attorney general to provide information to gun dealers on whether a transfer to a non-licensee of any firearm, including handguns and long guns, would violate federal or state law. At the attorney general's direction, the FBI developed the NICS though a cooperative effort with the ATF and state and local law enforcement agencies. The NICS is a computerized background check system designed to respond within 30 seconds on most background check inquiries.

The system was designed so that states can agree to serve as a point of contact, or POC, for the NICS. A POC state designates a state or local law enforcement agency to receive and process NICS checks for the dealers in that state. There are 15 states that serve as POCs for all firearm transactions. Some states serve as a POC for handguns only. We refer to these states as partial-POCS; currently, there are 11 states that serve as partial POCs. In states that decline to serve as a POC for the system, or for long gun transfers in states that are partial POCs, dealers request a NICS check by calling a toll-free number and providing information identifying the purchaser to a call center under contract with the FBI. The call center then forwards the information electronically to the FBI NICS operation center, operated by CJIS in Clarksburg, West Virginia, for the processing of the background check.

As of June 5, 2000, after 18 months of operation, a total of 13,364,378 background check requests have been processed through the NICS. Of these, 6,748,795 have been processed through the POC states, and 6,615,583 have been processed through the NICS operations center. We are extremely grateful to our state POC partners, not only because they carry approximately half of the nationwide workload in processing NICS checks, but also because they enhance the thoroughness of NICS checks by checking otherwise unavailable state databases and by bringing to the checks expertise in their own state laws regarding firearms eligibility.

How a NICS check works

A NICS check begins after a prospective purchaser provides photo identification to the gun dealer and fills out an atf firearms transaction form, known as a Form 4473. The dealer then calls the appropriate contact point, either the state POC or the call center that processes the calls for the FBI's NICS operations center, and provides certain identifying information from the 4473 that is used to search the database for possible matching records. The identifying information includes name, date of birth, sex, race, and state of residence, and any other identifying information, such as social security number, that may have been voluntarily provided by the prospective purchaser. This identifying information is used by the NICS to search three FBI-managed information systems for matching records. See chart, "databases searched by the NICS." the three databases contain over 37 million records and include:

(1) the National Crime Information Center (NCIC) 2000 which contains over 500,000 records on wanted persons and nearly 250,000 subjects of protection/restraining orders;

(2) the Interstate Identification Index, or III, which contains approximately 36 million active criminal history records; and

(3) the NICS index, which contains over one million records of other persons prohibited from possessing a firearm, including individuals involuntarily committed to a mental institution or adjudicated mentally defective, illegal aliens, and individual dishonorably discharged from the armed forces. In POC states, state databases, in addition to the fbi databases, are also checked for disqualifying information. These state databases include the state's own criminal history records and, in some cases, state records on persons who have been involuntarily committed to a mental institution or are under a domestic violence restraining order.

If the database check does not yield a record that potentially matches the identifying information provided to the system by the dealer, then the call center responds immediately advising the dealer that the transaction may "proceed," meaning that no information was discovered demonstrating that the person is prohibited from possessing a firearm. In addition to the proceed response, the nics provides the dealer with a unique number associated with the check, known as a NICS Transaction Number (NTN), which the dealer is required to record on the 4473. It takes 30 seconds or less to provide an immediate proceed after information is entered into the nics. About 71 percent of all prospective gun purchasers are authorized by the NICS to make their purchase immediately. See chart, "NICS operations transaction breakdown."

If the check hits on a record that could match the individual, then the call center advises the dealer that the transaction is "delayed." Tthe call center provides the dealer with an NTN. The transaction goes into the NICS "delay queue," and is automatically referred to a NICS examiner. NICS examiners are specially-trained FBI personnel, who, unlike the call center personnel, are allowed to access criminal history and other sensitive information. The NICS examiner will take the transaction out of the delay queue, and review the record to determine whether it is complete, whether it matches the prospective buyer, and whether it demonstrates that the person is disqualified from possessing a gun. If the record demonstrates that the person is disqualified from possessing a gun, the nics examiner will advise the dealer that the transaction is "denied." If the record is incomplete, or inconclusive, then the examiner attempts to acquire complete information to make the determination whether the prospective gun buyer is legally allowed to acquire a firearm.

NICS provides a definitive response of either "proceed" or "denied" to 95 percent of all requests within two hours of receipt of the information to search the NICS. Only five percent of prospective purchasers have to wait more than two hours for a NICS response, and these persons are given their response as soon as the NICS obtains the necessary information. A purchaser whose NICS check takes more than 24 hours to complete is almost 20 times more likely to be a prohibited person than the average gun buyer.

The record of NICS operations

In the first 18 months of operation of the NICS, the NICS has proven to be a highly effective system, processing over 13 million inquiries. Most importantly, the FBI denied approximately 116,182 felons, fugitives, domestic violence abusers, and other prohibited persons from buying guns from licensed dealers. This equates to a denial rate of approximately two percent. Based on the information received from individual states and the Bureau of Justice Statistics, the FBI estimates that a total of approximately 290,000 denials have been made by the FBI and POC states under the permanent provisions of the Brady Act. See chart, "Denials by Category."

In addition to fulfilling its primary mission of stopping illegal gun purchases before they occur, NICS also assists law enforcement in apprehending fugitives. I would like to share with you two recent examples, from the 3,223 fugitives denied thus far, of how NICS positively affects our nation's public safety in this area.

*** On April 5, 2000, a NICS examiner pulled a transaction out of the Texas delay queue. The examiner denied the transaction due to a felony conviction, and also questioned why the subject, who had a felony conviction in New Jersey, was attempting to purchase a handgun in Texas. The examiner checked the record of the subject and found that the individual was still on probation in New Jersey for a 1999 arrest. The examiner contacted the superior court in New Jersey to inform them about the subject's attempt to purchase a firearm in Texas. On the next day, the examiner received a call from the superior court stating that a warrant message had been sent to the authorities in texas to have the subject apprehended for violating parole. The examiner received a call from the Texas authorities indicating that the subject had been apprehended. The subject informed the police that his intentions were to kill his father in Texas and then go back to New Jersey and kill his mother and stepmother. The officer thanked the examiner for calling to check on the probation violation.

*** On April 13, 2000, an examiner identified a warrant for a prospective firearm purchaser in North Carolina and contacted the issuing agency. The agency said that the individual trying to purchase the gun was the subject of a murder investigation for shooting a family member. The individual had previously assaulted a law enforcement officer, and was considered to be armed and dangerous. The examiner provided the address of the gun dealer, as well as the address of the subject, to the authorities. Officers were dispatched and arrested the felon. The captain thanked the examiner for her prompt attention to the matter.

I would also like to share with you an example of how the work of our examiners furthers the Brady Act's goal of preventing gun violence in the context of domestic violence.

*** On April 21, 2000, an examiner was investigating a disorderly conduct charge on a prospective gun buyer to see if it was related to domestic violence, and therefore meant that the person was prohibited from acquiring a gun. The Illinois authorities informed the examiner that the charge was based on the following facts: the individual had beaten his 21 year old wife, who was six months pregnant at the time, dragged her from room to room, pushed her to the floor and sat on her stomach. Based on this information, the individual's attempt to purchase a gun was denied.

System accuracy, security and privacy

The FBI continues to work to build the volume and completeness of records in the NICS, but the accuracy of the records currently in the nics appears to be quite high. The NICS has a very effective appeals system which allows individuals who wish to contest a denial to appeal the decision. Less than one percent of all checks conducted by the NICS operations center have resulted in denials that are subsequently reversed. These reversals effect only 3.3 percent of all denials by the NICS operations center and in about half of these reversals, the mistake was the result of information missing from the original record, not a NICS error.

The FBI has taken a number of steps to ensure that the information in the system is secure from any unauthorized access. One of the primary ways that we are able to assure that the sensitive information in the NICS is not misused (for example, by firearms dealers who might use the NICS to do unauthorized background checks on persons who are not attempting to buy a firearm) is by conducting audits. We use information about checks that have been conducted to make those audits. We also use audits to assure that unscrupulous firearms dealers do not submit inaccurate information to the NICS in order to avoid the effect of a background check on a disqualified buyer. Currently, according to the regulations governing the NICS, after 180 days, the NICS automatically purges all records relating to a background check which results in an allowed transfer of a firearm. The records are retained for this brief period of time to give us some ability to audit the use and performance of the NICS.

Ways to improve the NICS

As the distinguished members of this committee are aware, the NICS program has received much publicity, interest, and oversight during its development and since it became operational. At the FBI, we are continuously working to improve and perfect the NICS, so that it will be as efficient, thorough, convenient and reliable as possible. Today I would like to address a few key areas for improving the NICS: the issue of default proceeds, and the issue of system availability.

The issue of default proceeds

As currently written, the Brady Law says that if the NICS does not provide a definitive response to the dealer within three business days of the time that the dealer provides the system with the information needed for a background check, the dealer is not prohibited from transferring the firearm. We refer to cases where the background check cannot be completed within the statutorily-allowed three business days as "default proceeds." Default proceeds occur primarily due to lack of arrest dispositions in automated state criminal history records.

A typical example of a NICS transaction leading to a default proceed involves a record showing a felony-related arrest, which is not a brady disqualifier in and of itself, with no information to indicate whether the case was prosecuted and whether it resulted in a conviction. (Information demonstrating that the person was either under indictment, or had been convicted would create a Brady disqualifier.) In these instances, additional research is needed before the transaction can be approved or denied. The ability to obtain the required disposition information in a timely manner is directly affected by several factors, such as whether the court is open, the willingness of the court's staff to assist the fbi, and the accessibility of the disposition information. The FBI must rely on the cooperation of state and local agencies to obtain information needed to determine a purchaser's eligibility, making the resolution of delayed transactions within three business days often beyond the FBI's control.

Over the past 18 months, there were over 180,000 default proceed transactions in which the FBI did not get information allowing an affirmative "deny" or "proceed" response within the three business days allowed by the Brady Law. Of those 180,000 cases, the FBI is aware of 6,084 individuals who were sold firearms after the three days expired and were later determined to be prohibited persons. (We refer to these as "delayed denials.") We have no way of knowing how many more of the 180,000 cases of default proceeds resulted in the transfer of a gun to a prohibited person, since in most of the cases there is never a definitive resolution of whether or not the subject of the arrest record was in fact a prohibited person before the record of the default proceed is destroyed.

Delayed denials are a very significant cause for concern because they present public safety risks and place resource demands on law enforcement agencies, who must then go and retrieve the firearms. Fortunately, we do not believe that all default proceeds result in prohibited people getting guns, because some responsible gun dealers have adopted corporate policies to never sell a firearm without a "proceed" response from the NICS, even if that response takes longer than three days.

The problem of delayed denials and default proceeds has been documented fairly thoroughly by the general accounting office (gao) in one of their reviews of the NICS. In their report, Gun Control: Options for Improving the National Instant Criminal Background Check System, (gao/ggd/00-56) dated april, 2000, GAO outlined three initiatives to help address the problem of default proceeds. First, they discuss federal grant funding to improve state criminal history records. Second, they discuss encouraging state participation in NICS. Third, they discuss amending the Brady Act's three-business-day default proceed requirement. I would like to address each of these -- all of which would help resolve the problem of default proceeds -- very briefly, inasmuch as options to improve NICS and reduce the number of default proceed transactions and firearm retrievals may need to focus on legislative, rather than administrative, efforts.

Continued funding to provide federal grants to states for improving the quality and completeness of automated criminal history records is quite important. The funding provided to states under the national criminal history improvement program (or "nchip"), which is now funded as part of the Crime Identification Technology Act, totaled $273 million during fiscal years 1995 through 1999. According to a recent analysis by the Department of Justice's Bureau of Justice Statistics, these funds have had a substantial impact: the number of records that include dispositions and are accessible to the NICS through III increased by almost 80 percent between 1993 and 1999. Because there is a very long way to go in assuring full and complete automation and accessibility, however, this option, while critical, will not resolve the problem of default proceeds. The FBI has always been a strong proponent of encouraging state participation in NICS, and the GAO report identifies financial factors discouraging state participation. The GAO report suggests that some form of federal financial assistance would encourage state participation. Because states can have advantages over the fbi in conducting nics background checks--such as access to additional data in their own state and the ability to better interpret their own criminal history records and firearm laws--increasing state participation in NICS could help improve NICS' effectiveness and reduce default proceed transactions. However, state participation would likely not eliminate the problem of default proceeds, because the lack of available disposition information would confront the states as well as the FBI.

Amending the three business-day default proceed requirement of the Brady Act to treat differently those potential purchasers with disqualifying offense arrests having no disposition information would provide immediate relief for law enforcement from the problem of default proceeds. For example, the state of Colorado provides by state law that a firearm transfer can be denied on the basis of a disqualifying offense arrest alone, and the prospective purchaser is given the opportunity to challenge the denial by showing that the arrest did not lead to a conviction. The state of Washington deals with the problem by having a state law that allows up to five days to perform a background check. This law also says that if available records indicate that the prospective purchaser has an arrest for a potentially disqualifying offense, a hold for up to 30 days can be placed on the transaction's approval, pending the receipt of disposition information to verify the purchaser's eligibility to possess a firearm. The law also provides that an extension of the hold can be obtained if after 30 days the disposition of the arrest still cannot be verified.

System availability and efforts to minimize downtime

In regards to the system outages experienced during the month of May, 2000, let me begin by saying that the FBI's goal is to minimize system down time. The FBI recognizes the disruptive effect downtime can have on the business operations of gun dealers and the resulting inconvenience to prospective gun buyers. The FBI is working toward maximizing system availability during the normal operating hours of the NICS. However, the reality is that hardware and software problems will occur during the normal operation and maintenance of complex information systems.

The overall record of the system's availability during its operating hours through May 2000 is just over 96 percent. See charts, "Availability of Databases Comprising NICS" and "NICS Availability." Historically, since the NICS began operation on November 30, 1998, system availability generally showed steady improvement over the first seven months. By June, 1999, the NICS was available over 99 percent of scheduled operating hours. However, beginning July 11, 1999, the FBI replaced two major computer systems, both of which interface with the NICS. One of the new systems, the NCIC 2000, was implemented July 11, 1999. The Integrated Automated Fingerprint Identification System (IAFIS) was interfaced with NCIC 2000 and NICS on Jjuly 28, 1999. Outages for NICS occurred during Jjuly and August due to the implementation of these two systems. By December, 1999, however, system availability was 95.32 percent of scheduled operating hours.

The recent Interstate Identification Index (III) outage occurring on May 11-14, 17, and 22, 2000, resulted in the loss of service to not only the NICS system, but to IAFIS and federal, state, and local law enforcement agencies as well. Collectively, IAFIS, III, and NICS are referred to as a System of Systems (SOS) and provide fingerprint identification capabilities, criminal history services, stolen property and wanted person checks, and background checks as required by the Brady Act. The SOS serves the public by facilitating police work and fostering police officer safety. It also ensures that retail firearms dealers do not sell guns to prohibited persons. Last month, the outages of the III database, which contains 95 percent of the records checked by the NICS, ultimately caused the loss of service to NICS. This resulted in the inability to respond to inquiries from firearms dealers. The outages also precluded CJIS from meeting its IAFIS fingerprint customer service goals.

Until May 11, the CJIS SOS experienced an outstanding record of reliability, with only those problems typical of new and complex information systems. Unscheduled downtime was very low, and from September, 1999 to April, 2000, the III segment of IAFIS had a service availability rate of 99.03 percent, processing an average of 263,432 transactions daily.

Preliminary root cause analysis of the May outages has ruled out operator-induced error, hacker-induced error, virus-induced error or a hardware-induced error. While the cause of the outages is still under review, all indications point to the root cause as a defect in the proprietary database management software which caused an incorrect and corrupting calculation of table spaces within III. Short-term risk reductions steps have been taken. Research and analysis to date has resulted in a short-term repair that is expected to reduce the likelihood of this problem recurring. These steps are expected to reduce the risk of future database corruption while a long-term repair is evaluated and implemented. Standard operating protocols exist to ensure service is restored as soon as possible, if and when an incident occurs. These protocols were followed during each of the outages.

All these systems and segments function with a high degree of interdependence, relying upon complex interconnected indices and tables to operate properly and to ensure high confidence in information furnished to users. An outage may occur as a result of a system failure within the NICS or when NCIC 2000 or IAFIS cannot supply the services needed to perform a complete NICS check. The NICS is designed to check all three databases: the NCIC 2000, III, and the NICS index. If one of these databases is off-line or down, the NICS still searches the remaining active databases for 100 percent accuracy. Once the previously off-line database becomes available, the search is completed and the response is sent to the requester. However, the NICS is placed in an "out of service" period when any of these systems is unable to support a complete check. This policy, supported by the CJIS advisory policy board, significantly reduces the number of delay responses returned to gun dealers.

Whenever an unscheduled outage occurs, the NICS program office works diligently to provide ample notification to pocs and licensed gun dealers. Per existing NICS policy, gun dealers are notified of an unscheduled outage by placing a message on the call centers' phone system. When an unscheduled outage occurs, the voice recognition unit informs the gun dealer that the system is temporarily out of service. POC states are notified of an unscheduled outage by a message sent via NCIC 2000. However, due to the extent of last month's outage, additional planning and pro-active measures were taken to help alleviate any effects felt. Some of the additional steps taken include:

A notice was released to the public and faxed to 76 different poc state contacts including control terminal officers and various other NICS contacts to advise of the outage and the anticipated time of resumed service;

Phone calls were placed to all POC and partial-POC states to advise of the same;

Phone calls were placed to 1,364 gun dealers that were statistically shown to process large numbers of transactions to advise of the outage and anticipated time of resumed service. The normal outage message heard by other licensed gun dealers on the call center telephone system was modified to reflect pertinent information previously faxed to POC and other NICS contacts.

Licensed gun dealers participating in the call center pilot project in the states of Rhode Island and Delaware were called and advised of the outage, anticipated resumed service, and informed that it was a system-wide issue and not project-specific.

The NICS Program Office also prepared measures for the quick completion of backlogged transactions. Additionally, NICS employees were on standby and used as needed for the increased delay queue transactions once the system became operational. This measure proved effective because the work in progress remained at a normal or below normal level throughout the first operational day. The call centers also provided extra staffing and overtime to their personnel to assist in the management of high volume incoming calls. The NICS program office recognized the fact that the call centers may have been difficult to reach at times, therefore transactions were handled immediately for any gun dealers calling into the NICS customer service. Whenever NICS examiners were calling gun dealers to advise of a final status for delayed transactions, they also inquired of the dealer if there were any other transactions that they could handle immediately for them. Following the outage, poc states were provided additional processing time beyond the normal operating hours to facilitate the processing of batches of transactions that had been held by the states. This action provided the added benefit of reducing the processing load on the NICS system when the call centers and FBI operations were resumed.

Measures are being looked into to minimize the risk of recurrence. The best route for immediate corrective action during a system outage is the definitive identification of the root cause and subsequent correction. This greatly reduces the risk of a similar event, but is no guarantee that another event with a different catalyst will never occur. Small-scale database failures are managed and corrected within the current system design with little or no impact to users. These events were within the design limits for the backup and recovery of the III database.

If these efforts do not ensure the desired availability, it may be necessary to consider the more expensive, long term solution of developing and installing a fully-redundant, identical III database. This option would require the acquisition of additional data storage hardware, commercial software, and development of data management software to maintain a full-time mirrored version of the III segment, and would entail a substantial initial budget outlay and recurring annual management costs. Further measures enhancing availability and recovery that would require such additional funding include redundancy of other CJIS databases and systems, such as NCIC 2000 and NICS, with the physical location of these redundant systems at alternative sites.

Other planned upgrades and improvements

A total of $9 million was allocated to upgrade the NICS in fiscal year 2000. Of this amount, $6.5 million of fiscal year 2000 funding was dedicated for upgrades while $2.5 million of prior year carry forward funding is being dedicated to the development of a NICS improvement: electronic access to nics for firearms dealers. Some of the planned system upgrades include:

The purchase and installation of commercial off-the-shelf software upgrades. These are known in the industry as "cots" software upgrades and are routine with any operating system. This is an on-going enhancement for fiscal year 2000 and 2001.

Because NCIC 2000 accesses III via the iafis when conducting a search, a bypass is under development which will allow the NICS to continue running when the Identification Tasking and Networking (ITN) segment of the IAFIS is down or experiencing difficulties. Expected completion date for this project is fall of 2000.

Two additional production servers will be installed to handle the expected 20 percent increase in volume during seasonal peak time -- September through December. Installation is expected in fiscal year 2000.

The development and testing of an interface for the nics direct electronic access by firearms dealers to initiate a NICS search. Development for this interface will continue throughout fiscal year 2000.

The implementation of new filtering rules which will allow NICS to eliminate many of the false positives returned, consequently providing more immediate proceeds, before providing the search response to the FBI and state users. Testing and implementation are expected to be completed in fiscal year 2000.

Currently, there are approximately 60 other enhancements or software changes that have been identified and prioritized by the NICS program office and are expected to be implemented in fiscal years 2000 and 2001. The FBI's deputy assistant director for operations in the CJIS division and the appropriate system managers have the final decision as to when to apply system upgrades or modifications. Keeping gun dealers and our partners in law enforcement in mind, routine maintenance is always scheduled during non-operational hours -- 1:00 am until 8:00 am eastern time.

As I previously stated, NICS interfaces with both NCIC 2000 and the IAFIS. Upgrades and enhancements for these systems are always scheduled during periods which provide the least impact to law enforcement agencies nationwide. Most of the upgrades and enhancements are scheduled during the least used periods, primarily early Sunday mornings, and have no impact upon NICS' operations. However, there have been cases when additional time is required and the NICS can be affected. Naturally, during such non-scheduled interruptions in service to NCIC 2000 and IAFIS, the FBI's priority is to restore law enforcement functions first, prior to the restoration of NICS services.

Electronic access is alluded to in both the Brady Act and Federal Register, which say that "the NICS shall allow federally licensed gun dealers to contact the system by telephone, or other electronic means in addition to the telephone, in order to contact the system." Gun dealers with electronic dial-up access will be able to contact the NICS, excluding scheduled and unscheduled downtime. A survey was used to determine which method of electronic access would accommodate most licensed gun dealers in the most cost-effective manner. Cost comparisons were performed on the development and logistics to operate and maintain a pc-based software solution using secure dedicated communications or a secure internet solution via COTS software.

A secure internet solution seemed to be the most technically feasible and effective solution for developmental, operation, and maintenance costs and for providing gun dealers with the necessary form of electronic access. The FBI, therefore, plans to establish a NICS background check secure web-site on the internet. Access to the web-site will be limited to federally licensed gun dealers. The development process regarding electronic access started in February 2000, with an implementation date for the initial capability scheduled for January 2001.

The FBI has continued to seek and act upon the advice of local and state law enforcement in its operation of NICS. Proven mechanisms are in place for the continual improvement of NICS operations. For example, regional and national meetings are held semi-annually in which the FBI provides status reports on the NICS to local, state, and federal advisory groups and receives recommendations for NICS system and operational enhancements. In addition, the FBI's NICS program office has hosted several NICS state participant conferences, with the most recent held on May 31 - June 1, 2000 in Pittsburgh, Pennsylvania. Another conference will be held this summer for all licensed gun dealers. The NICS program office has also invited to the summer conference members of the congressional staffs and representatives from the gun industry. The FBI will present informative briefings and hopefully receive constructive feedback on the NICS operation to date. Finally, the FBI incorporated NICS information into its Law Enforcement Online, or LEO program, and, in conjunction with the Department of Justice, established the NICS web site to ensure the rapid, continual dissemination of important new information about the NICS

Conclusion

As I conclude my opening statement, I again thank the chairman and the members of the Senate Judiciary Committee for providing me with the opportunity to speak to you today about the NICS program. At this time, I am available to answer any questions the committee may have.