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Audit faults DEA for lacking oversight of confidential informants

The Drug Enforcement Administration has authorized workers' compensation payouts to confidential sources without proper evidence and approved the use of hundreds of informants with little review, according to a critical federal audit.

The Department of Justice's office of the inspector general report criticized the management of the program that pays people to provide information to drug investigators. Inspector General Michael E. Horowitz launched the probe after receiving numerous allegations about the DEA's confidential-source program.

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"We found that the DEA's Confidential Source Program lacks sufficient oversight, and it lacks consistency with the rules governing other DOJ law enforcement components," Horowitz said in a recent podcast about the audit.

The report also accused the agency of obstructing the audit, saying the DEA tried to stop auditors from observing file reviews and delayed providing documents for months.

"Our audit work thus far has been seriously delayed by numerous instances of uncooperativeness from the DEA," the inspector general wrote in the July report.

Confidential informants are the "bread and butter" of the DEA, agency officials told the auditors. But because many them have criminal backgrounds and offer help in return for cash or lower sentences, they pose risks.

"Confidential informants are probably the most dangerous people on the planet," said James Wedick, a retired FBI agent who now works as a consultant for law firms and financial institutions. "They can have motivations that can be other than righteous."

Auditors wrote they were especially troubled by federal benefit payments to informants. The DEA has been giving Federal Employees' Compensation Act benefits to confidential sources without controls or consistent policies, they said.

Wedick said he was surprised informants have received such benefits, saying it is not typical of other federal law enforcement agencies to provide them to confidential sources.

"I've never heard of that," he said.

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Some benefits were paid without evidence that injuries were related to their status as an informant, the audit found. Also, the agency gave FECA benefits to people who were also being paid for their work as informants, even though the purpose of the program is to compensate people who are too injured to work.

In one case, a confidential source who was injured in 1997 received housing expenses plus confidential source payments, while he was also receiving disability benefits of about $2,000 every month for years.

Auditors estimated that between 1997 and 2012, the informant received nearly $2.2 million — about $353,000 in FECA benefits, plus $1.8 million in "confidential source service and award payments."

A DEA spokesman declined to comment on the issues in the report, referring to the agency's written response to a draft of the audit.

In that response, the DEA said it has issued a moratorium on new FECA claims for confidential informants.

The DEA also wrote that it is currently updating its Special Agents Manual to address many of the concerns raised in the inspector general's audit.

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Besides benefits, the inspector general focused on several areas, including oversight of high-risk sources, long-term sources and "otherwise illegal activities" conducted by informants, such as buying drugs.

The report found that there are no clear guidelines for authorizing those otherwise illegal activities — an area that Wedick said can be "fraught with disaster."

Auditors also concluded that there was a substandard review of "high-risk" informants such as attorneys, doctors and people affiliated with the media.

People in these professions have access to legally protected information, which can complicate a case, Wedick said. For example, lawyer informants could provide useful, non-privileged intelligence because of their knowledge of criminal activity, but divulging information that should have been protected by attorney-client privilege can tarnish an entire investigation, Wedick said.

Similarly, the DEA did not properly review long-term sources — those used for six or more years. The agency used more than 240 such sources "without rigorous review," the inspector general wrote.

"This created a significant risk that improper relationships between government handlers and sources could be allowed to continue over many years, potentially resulting in the divulging of sensitive information or other adverse consequences for the government," the report states.

From 2003 to 2012, "the DEA committee charged with reviewing these long-term sources considered each source for an average of just one minute each," Horowitz said in the podcast. "And that's when there was any review at all."

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