COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES

APPROPRIATIONS COMMITTEE HEARING

STATE CAPITOL MAIN BUILDING ROOM 140 HARRISBURG, PENNSYLVANIA

THURSDAY, FEBRUARY 21, 2013 3:30 P.M.

PRESENTATION FROM OFFICE OF ATTORNEY GENERAL

BEFORE:

HONORABLE WILLIAM F. ADOLPH, JR., MAJORITY CHAIRMAN HONORABLE RYAN AUMENT HONORABLE HONORABLE HONORABLE GORDON DENLINGER HONORABLE GARTH EVERETT HONORABLE MAUREE GINGRICH HONORABLE HONORABLE TOM KILLION HONORABLE DAVID R. MILLARD HONORABLE DUANE MILNE HONORABLE MARK T. MUSTIO HONORABLE HONORABLE BERNIE T. O'NEILL HONORABLE HONORABLE SCOTT A. PETRI HONORABLE JEFFREY P. PYLE HONORABLE CURTIS G. SONNEY

————————— JEAN DAVIS REPORTING 285 EAST MANSION ROAD • HERSHEY, PA 17033 Phone (717)503-6568 1 BEFORE (cont.'d):

2 HONORABLE JOSEPH F. MARKOSEK, MINORITY CHAIRMAN HONORABLE MATTHEW D. BRADFORD 3 HONORABLE MICHELLE F. BROWNLEE HONORABLE MIKE CARROLL 4 HONORABLE H. SCOTT CONKLIN HONORABLE MADELINE DEAN 5 HONORABLE DEBERAH KULA HONORABLE TIM MAHONEY 6 HONORABLE MICHAEL H. O'BRIEN HONORABLE CHERELLE L. PARKER 7 HONORABLE JOHN P. SABATINA HONORABLE STEVEN SANTARSIERO 8

9 ALSO IN ATTENDANCE:

10 DAVID DONLEY, REPUBLICAN EXECUTIVE DIRECTOR DAN CLARK, REPUBLICAN CHIEF COUNSEL 11 MIRIAM FOX, DEMOCRATIC EXECUTIVE DIRECTOR HONORABLE TODD STEPHENS 12 HONORABLE DICK STEVENSON HONORABLE MIKE VEREB 13 HONORABLE HONORABLE VANESSA BROWN 14 HONORABLE TOM CALTAGIRONE HONORABLE DOM COSTA 15 HONORABLE PAMELA DeLISSIO HONORABLE BILL KELLER 16 HONORABLE PHILLIS MUNDY

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18 JEAN M. DAVIS, REPORTER NOTARY PUBLIC 19

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3 1 P R O C E E D I N G S

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3 MAJORITY CHAIRMAN ADOLPH: Thank you. I'd like

4 to call to order the House Appropriation Budget Hearing on

5 the Pennsylvania Attorney General's Office.

6 My name is Bill Adolph. I'm the Republican

7 Chairman of the House Appropriations Committee. And I

8 would like to welcome our newly elected and sworn in

9 Pennsylvania Attorney General. Welcome.

10 ATTORNEY GENERAL KANE: Thank you.

11 MAJORITY CHAIRMAN ADOLPH: Chairman Markosek for

12 any open comments.

13 MINORITY CHAIRMAN MARKOSEK: Just briefly.

14 Congratulations on winning the Office. We're

15 looking forward to working with you. I'm not going to have

16 any immediate questions. I'll let the members use my time

17 for that.

18 But I want to welcome you aboard. We're glad to

19 have you here today.

20 ATTORNEY GENERAL KANE: Thank you, Mr. Chairman.

21 MAJORITY CHAIRMAN ADOLPH: I want to thank the

22 Attorney General for stopping by my office last week and

23 introducing herself to me and the staff and briefing us on

24 some of their budget concerns. It was a good experience.

25 And I said that we won't be too hard on you today.

4 1 ATTORNEY GENERAL KANE: You did say that.

2 MAJORITY CHAIRMAN ADOLPH: If you would like to

3 open up with any opening comments, go right ahead, General.

4 ATTORNEY GENERAL KANE: Yes, sir. Thank you.

5 Thank you, everyone, for having me here. I

6 appreciate the opportunity to let you know the state of the

7 Office at this point and what the budget looks like for us

8 for the year of 2013.

9 Right now the flat funding that has been proposed

10 by the Governor puts us at about $78 million. During the

11 past year, we have had increases in expenses, including

12 salary, health benefits, as well as pension payouts that

13 increase our expenses 7.8 percent, which amounts to about

14 $6 million.

15 If we are flat funded in conjunction with the

16 increase in the 7.8 expenses, we will actually be losing $6

17 million this year. We will not be able to maintain the

18 current levels that we maintained for 2012. That would

19 mean approximately 57 positions would need to be cut. We

20 have not, at this point, even filled 31 of those positions.

21 We would have to look at closing some offices. And I

22 believe that that puts Pennsylvania in unsafe territory, to

23 be quite frank with you.

24 I believe that the most basic function of our

25 government is to protect the public. I know that that's a

5 1 concern of every one of yours and every one of your

2 constituents. We are requesting to be level funded for

3 2012 as opposed to flat funded for 2013. That would mean

4 approximately a $6 million increase. And again, that is

5 just to maintain the levels that we had last year.

6 We are also requesting funding of approximately

7 $7 million. Three million and some change is for a Violent

8 Street Crime Unit that we believe is absolutely necessary

9 to the protection of Pennsylvania.

10 You will see in the packet that we have handed

11 out to you, there are Mexican cartels that have moved into

12 Pennsylvania at an alarming, alarming rate. Traditionally

13 in years past, in the past decade or so, Mexican cartels

14 stayed to the west of the Mississippi. We have learned

15 through Intelligence through the Federal authorities as

16 well as through NAAG and CWAG that they have moved to the

17 east of the Mississippi and that they have moved into

18 Pennsylvania.

19 What you will see on your map -- if you turn to

20 this map with all of the red dots, those are the Mexican

21 cartels that have been identified by National Intelligence

22 Agencies. And as you can see, they are in Pennsylvania.

23 The reason for that is they have realized that

24 the marketplace here is strong. They are producing crystal

25 meth, which is cheap to produce. It's easy and it brings a

6 1 greater high. So they have begun a marketing campaign.

2 They are a little bit ahead of us at this point. We are

3 requesting the additional funding so that we are able to

4 stay on top of it and to combat them.

5 I want to let you know that we have a footprint

6 in that area at this point right now. But there's no way

7 we can keep up with them without the additional funding.

8 We have some cases that are presently pending.

9 They are under seal. And I am sorry I'm not allowed to

10 speak about it. But I will tell you that they're

11 frightening. So the Violent Street Crime Unit will also be

12 mobile. It will move into the corridors that need it the

13 most.

14 For example, around the Reading, Hazleton,

15 Lancaster area, they are being hit by crime at another

16 alarming rate. And I know that you know this, but I want

17 you to know that I feel that crime is not just a matter of

18 public safety, it's also an economic issue.

19 The neighborhoods are being run over because you

20 can't start a new business in Hazleton. No one is going

21 downtown. They're too afraid of even hitting the city

22 streets past dark. So it's a matter of public safety.

23 It's a matter of economics. We have to do something to

24 help these people.

25 When I was sworn in, I told everyone that we have

7 1 an initiative. It's a Mobile Street Crimes Unit. We're

2 coming to their areas to help them. The very next day we

3 got a call at our office from a woman who was shot in the

4 face and in the back while she was six months pregnant.

5 And she said, I hope she means what she says because we

6 really need the help. So it's now to the point where I

7 think that we have to do something about it.

8 Our other initiative is to increase our Child

9 Predator Unit. We have some exciting developments in the

10 Unit. We brought on the commander of ICACT, which is the

11 Internet Crimes Against Children Task Force. And he is now

12 the head of our Bureau of Special Investigation. The Child

13 Predator Unit falls under that bureau. He is an expert in

14 his field.

15 We have identified in Pennsylvania 2,800 IP

16 addresses where they are sharing child pornography. That

17 is just in Pennsylvania. If we started now, we could

18 arrest numerous people every single day. We need to keep

19 up with them.

20 We need to be a leader. The Office of Attorney

21 General needs to be a leader in the Internet Predator Unit

22 because we have the resources, we have the training, we now

23 have the computer programs that we did not have in years

24 past that we can actually identify where the computer is

25 and we can zone in within five miles. So we actually have

8 1 a great opportunity to make these arrests.

2 I believe that obviously our children are the

3 most important people to us. And we have had an alarming

4 rate of travelers.

5 In the past week, we arrested three travelers,

6 mostly in York County, Lancaster County. Just today we

7 made an arrest in Montgomery County on a child pornography

8 case. But travelers are those who leave their residence.

9 They identify a child online or one that they think is a

10 child. They have communications and then they arrange to

11 meet that child for the purposes of deviate sexual

12 intercourse or indecent relations with children. Last week

13 we arrested, on three separate incidents, travelers.

14 So we have a problem here. The reason that we're

15 asking for the money is not to study, it's not to have a

16 task force or a blue ribbon panel. It is to actually go

17 out and get them off of the streets.

18 And like I said, we have identified identifiable

19 threats. So I would ask that you reconsider the Governor's

20 proposed budget to put our funding back to the levels for

21 last year and then also to grant us the funds for the

22 initiatives for the upcoming year.

23 Thank you.

24 MAJORITY CHAIRMAN ADOLPH: Thank you.

25 I was looking at your first line item on your

9 1 budget. It's the general government operations. And it's

2 an increase over the Governor's budget proposal of $3.3

3 million, which is a little over a 9 percent increase over

4 the current year.

5 Can you explain to the Committee what is in that

6 general government operations? I was wondering -- the

7 other row officers that have testified before you had a

8 line item here for IT. And I was wondering if included in

9 that line item is a number for technology. You mentioned

10 it in your comments. I'd like to back that number out if

11 you have that number available.

12 ATTORNEY GENERAL KANE: In our general government

13 operations, that includes all of our Criminal Law Division,

14 it includes our Public Protection Division, it includes our

15 Civil Law Division, as well as our Management Services

16 Division. Within our Management Services Division is our

17 IT Division. But we have not included that number for the

18 Child Predator Unit. That will be included in our

19 additional request.

20 MAJORITY CHAIRMAN ADOLPH: You currently have how

21 many employees, General?

22 ATTORNEY GENERAL KANE: We have 735, sir.

23 MAJORITY CHAIRMAN ADOLPH: And what would you

24 like to have at this time next year?

25 ATTORNEY GENERAL KANE: Comparatively speaking,

10 1 from 2008, which was five years ago, we had 194 attorneys.

2 Right now we have 176. Five years ago we had 826

3 employees. Right now we have 735. We have seen a

4 decrease, a tremendous decrease, in the years coming up to

5 today.

6 What we would like to see is we would like to be

7 able to put more agents as well as attorneys in the Child

8 Predator Unit because of the demand that we're seeing. We

9 would like to be able to fill the vacancies that we have.

10 We have vacancies right now that are in the Public

11 Protection Division, which we feel involves consumer

12 protection, which obviously brings in quite a bit of money

13 into the Commonwealth each and every year.

14 We have had a decrease in staffing in the Tobacco

15 Division, which, as you know, also brings in 337 million

16 into the Commonwealth each and every year. And we'd like

17 to see it restored. We don't want to have to let anyone

18 go.

19 MAJORITY CHAIRMAN ADOLPH: I understand that.

20 This Committee will make a point to consider the cost to

21 carry from one year to the next. We don't want to go

22 backwards. We don't want to go backwards.

23 But as I said to the Pennsylvania Treasurer, we

24 can't get you immediately back to 2008 because we're not

25 back there yet. The revenue is just back to like the 2008

11 1 figures. Our expenses have grown as a result of various

2 aspects of the budget.

3 But you currently have 735 employees?

4 ATTORNEY GENERAL KANE: That is correct.

5 MAJORITY CHAIRMAN ADOLPH: And your request is to

6 increase the number of employees by how many?

7 ATTORNEY GENERAL KANE: Within the new

8 initiatives, we are only increasing the number of employees

9 by maybe 12. We'd like to fill the positions that we have.

10 We'd like to not lose any more positions. We don't want to

11 have to close offices.

12 So we're just asking to keep it at the level that

13 it was last year. We want to keep 735. That's the

14 additional 7.8 percent that we have asked. If we don't

15 increase the funding or if we don't make it up from last

16 year because of the increased expenses, we will lose

17 employees.

18 MAJORITY CHAIRMAN ADOLPH: Thank you.

19 And these 12 are attorneys?

20 ATTORNEY GENERAL KANE: No, sir. They will be a

21 mix of attorneys as well as agents.

22 MAJORITY CHAIRMAN ADOLPH: Agents and attorneys?

23 ATTORNEY GENERAL KANE: Mostly agents.

24 MAJORITY CHAIRMAN ADOLPH: What is the average

25 salary of an attorney working for the Pennsylvania Attorney

12 1 General's Office?

2 ATTORNEY GENERAL KANE: We have a very complex

3 system of salaries in our office, which I am still trying

4 to wrap my hands around. They have not only grades such as

5 a 1, a 2, a 3, a 4, a 5, but then they also have 10 steps

6 within that grade. It really varies quite a bit. I will

7 tell you that attorneys have not had raises in many, many

8 years.

9 MAJORITY CHAIRMAN ADOLPH: If you could get that

10 for me, I would appreciate it. And I will be happy to

11 share it with Chairman Markosek as well.

12 ATTORNEY GENERAL KANE: Certainly.

13 MAJORITY CHAIRMAN ADOLPH: Last question

14 regarding expenses. The two previous row officers came in

15 and they were talking about their plan for efficiencies.

16 Could you tell this Committee what your plans for

17 efficiency are in running your office?

18 ATTORNEY GENERAL KANE: Yes, sir.

19 We have taken a number of cost savings measures.

20 Since 2008, 80 positions have been abolished in the Office

21 of Attorney General. As I said, we did not fill 31

22 positions. We've reduced the number of paid interns and

23 temporary wage employees in the last couple of years.

24 There's been no pay increase for management employees in

25 years '09-'10, '10-'11, and '12-'13.

13 1 In 2011, the previous Administration gave a very

2 small increase to management employees. We are looking at

3 the closure of five smaller offices if that becomes

4 necessary. And we may have to close more if funding isn't

5 restored.

6 We've limited out-service training. We only have

7 essential training particularly for the attorneys who have

8 to keep their CLEs. We've reduced funding for education

9 and outreach programs, which I believe, you know, that's

10 very important to making sure that we stop victims from

11 becoming victims. We reviewed all cell phone plans for

12 efficiency. And we've reduced the number of attorney

13 membership dues with the Pennsylvania Bar Association.

14 MAJORITY CHAIRMAN ADOLPH: I'm sure the Bar

15 Association wasn't happy with that. But we appreciate you

16 cutting down that aspect somewhere in your budget.

17 Thank you very much.

18 ATTORNEY GENERAL KANE: Thank you, Mr. Chairman.

19 MAJORITY CHAIRMAN ADOLPH: The next question will

20 be from Rep. Parker.

21 REP. PARKER: Thank you, Mr. Chairman.

22 And welcome, Madam General. It's great to have

23 you here today.

24 ATTORNEY GENERAL KANE: Thank you.

25 REP. PARKER: Let me just start off and echo the

14 1 sentiments that you heard yesterday from Senator Farnese

2 for those of us who watched the hearings.

3 Quite frankly, and in plain speak, coming from

4 northeastern Pennsylvania, a region where some of my

5 colleagues also hail from, they note that hunting and

6 sportsmen activities are time-honored family traditions and

7 there's a very strong advocacy for Second Amendment rights

8 in a region.

9 But even in the midst of that, you stood strong

10 and closed the Florida loophole, you've publicly stated on

11 the record that you were going to review all of

12 Pennsylvania's reciprocity agreements, you noted your

13 support for mandatory reporting requirements for lost and

14 stolen guns, and noted that universal background checks,

15 you believe, were common-sense measures to control the flow

16 of illegal handguns, all while noting that you did not

17 believe that any of this infringed upon anyone's Second

18 Amendment rights.

19 Sounds like a little bit of heart to me. So

20 thank you for doing what we have been trying to do

21 legislatively to no avail for some time.

22 ATTORNEY GENERAL KANE: Thank you very much.

23 REP. PARKER: Let me start with my first question

24 regarding witness relocation. Senator Greenleaf has had a

25 strong interest on this issue, as I have. You've noted

15 1 that you're asking for a 9.2 percent increase in this area.

2 And during the Senate hearings, you noted that the AG's

3 Office opened 153 cases.

4 Now, obviously, I know that the majority of those

5 are in Philadelphia, so you don't need to read the numbers

6 for me. But could you quickly for us just go through the

7 counties that have utilized the program so that we will

8 hear those outside of Philadelphia for the record?

9 ATTORNEY GENERAL KANE: Yes, ma'am, I can.

10 REP. PARKER: Thank you.

11 ATTORNEY GENERAL KANE: The other counties

12 include Washington County, Allegheny, Westmoreland,

13 Somerset, Centre, Dauphin, Lancaster, Chester, Delaware,

14 Montgomery, and Bucks.

15 REP. PARKER: Would you say, Madam AG, that when

16 DAs attempt to have witnesses participate in a program, is

17 it usually related to homicides?

18 ATTORNEY GENERAL KANE: Yes, ma'am.

19 The numbers have indicated that a few of them are

20 related to homicides, but the majority of them are related

21 to gun crimes.

22 REP. PARKER: Gun crimes?

23 ATTORNEY GENERAL KANE: Yes.

24 REP. PARKER: Yesterday we also heard testimony

25 from Colonel Noonan of our State Police. And he noted for

16 1 the record we have 500 homicides in Pennsylvania. And then

2 Mayor Nutter was at a meeting with us last week and he

3 noted, well, if there's 500 in Pennsylvania, 331 were in

4 Philadelphia.

5 So for us, you can understand the importance of

6 the witness relocation program. If it's not in existence,

7 people who would normally have the courage to step forward

8 because they know that they're going to be protected go

9 away because they fear for their lives.

10 ATTORNEY GENERAL KANE: There is no doubt, ma'am.

11 The importance of the Witness Relocation Program to

12 prosecutors and to police officers can never be

13 understated. There is particularly a problem in

14 Philadelphia and other places. If we can't protect the

15 witnesses of crime and the victims of crime, then they will

16 not testify. If they don't testify, we don't have a case.

17 And if we don't have a case, then the Defendant goes free.

18 He walks out of the courtroom.

19 It is of vital importance. We have asked for the

20 funding not only to be restored from this year in the

21 amount of over 1 million, but right now we are in dire

22 straights because the fund is running out and we're not

23 even to the end of our fiscal year yet.

24 We have requested an additional $101,000 because

25 we project next year's fund running out as well around the

17 1 same time. Now, we don't have specific numbers, obviously.

2 We can only go on projections. But if the projections hold

3 through for 2013 as they do for 2012, we will be running

4 out of money. That's why we need the additional funds.

5 REP. PARKER: Thank you.

6 ATTORNEY GENERAL KANE: Certainly.

7 REP. PARKER: When Mayor Nutter came to meet with

8 the Philadelphia delegation, he noted New York's reduction

9 in violent crimes as a result of some local initiatives

10 that were passed. And he asked the Philadelphia delegation

11 to strongly advocate for enhanced penalties for anyone

12 caught carrying a firearm illegally in Philadelphia.

13 Obviously, whenever we're moving any legislative

14 initiatives like that, the support of our chief law

15 enforcement officers in the Commonwealth is extremely

16 important. You know, here you can do it executively. But

17 for us, we have to do everything in a bipartisan manner

18 here or else nothing will ever get done, you know,

19 particularly for those on my side right now. I understand

20 that reality.

21 And Representative John Taylor has just

22 introduced this legislation, my colleague from the other

23 side from Philadelphia. But could it be a piece of

24 legislation that you would support?

25 ATTORNEY GENERAL KANE: We would absolutely take

18 1 a look at it. As you know, my feelings are always that

2 crime has no party. Crime is crime. And I would be very

3 happy to take a look at it. And we understand that maybe

4 in the past the office was slow in getting back to you

5 regarding their support or input on bills. And we are

6 working to make that a much quicker process.

7 REP. PARKER: Finally, Madam AG, when Colonel

8 Noonan was here yesterday, he noted that there had been a

9 39 percent increase in background checks in the

10 Commonwealth of Pennsylvania for those seeking to purchase

11 a firearm. And in light of what took place as it relates

12 to Sandy Hook, you know, it's not just a Pennsylvania

13 phase, but we've seen stats where it's occurred across the

14 nation. And as we move forward in a bipartisan manner to

15 address the issue of school safety, several initiatives

16 will come forward. I hope very much that your office will

17 weigh in and give us your recommendations.

18 ATTORNEY GENERAL KANE: I would love the

19 opportunity to be a part of the discussion. As you know,

20 not only as a prosecutor and the chief law enforcement, but

21 I am the mother of two small boys. And I do appreciate

22 that.

23 REP. PARKER: Thank you.

24 ATTORNEY GENERAL KANE: You're welcome,

25 Representative.

19 1 MAJORITY CHAIRMAN ADOLPH: Thank you,

2 Representative.

3 Rep. Mauree Gingrich.

4 REP. GINGRICH: Hello again, Madam Attorney

5 General. We met on the way in the room. We don't know

6 each other. But over the next four years, hopefully we do.

7 It may sound a little odd to say Madam Attorney General. I

8 need to point out that being the very first female Attorney

9 General in the State, we welcome you to the women's league

10 here.

11 ATTORNEY GENERAL KANE: Thank you. Happy to be a

12 part of it. First elected, though.

13 REP. GINGRICH: Pardon me?

14 ATTORNEY GENERAL KANE: First elected.

15 REP. GINGRICH: That's what I meant.

16 ATTORNEY GENERAL KANE: I wanted to give General

17 Kelly her due.

18 REP. GINGRICH: That's very true. Very true.

19 You didn't have much of a learning-curve time

20 here. Clearly the events of the past couple weeks, you

21 know, put you in the trenches making some really tough

22 decisions. I don't want to talk about the Lottery. I

23 really do want to talk about it. But I don't want to

24 question your decision. And I just know that we're going

25 to have to face the reality of those numbers later on in

20 1 serving people that are equally important to us, as our

2 kids, which are No. 1, and that's our very vulnerable older

3 population. And we're going to have to work our way

4 through that.

5 But today I want to talk to you a little bit more

6 specifically about some of my family background. And that

7 is being part of a Pennsylvania State Police family for

8 several generations. So I've been very close to law

9 enforcement all of my life.

10 And when I hear your comments and read some of

11 your reports, it's alarming to me to hear what you're

12 saying about the Mexican drug organizations, cartels,

13 whatever. We have not seen that. And I want to talk a

14 little bit more about that.

15 ATTORNEY GENERAL KANE: Sure.

16 REP. GINGRICH: Yesterday I listened very

17 carefully and questioned Commissioner Noonan and the

18 reporting that he did on behalf of the State Police. And

19 nothing at all was said about gang-related crimes

20 specifically. So it's alarming and it's sort of surprising

21 for me to hear that. So you can tell me a little bit more

22 about that forecast. That's really a nasty forecast that

23 we're going to have to deal with.

24 And then I just want you to go from there to the

25 role that the State Police and law enforcement outside of

21 1 your agency play here and the critical nature. So if

2 you're looking for funding due to that particular issue,

3 are they not your partners with boots on the ground with

4 the ultimate enforcement powers?

5 I just want to get an understanding of what we're

6 going to do with the budget here. Who needs the money and

7 who will be the enforcer, ultimate enforcer, and where does

8 this forecast come from since we haven't heard at all from

9 Pennsylvania State Police?

10 ATTORNEY GENERAL KANE: This forecast is coming

11 from the National Drug Intelligence Center and the National

12 Drug Threat Survey. This is specifically dealing with

13 Mexican cartels.

14 I am wondering whether perhaps there is a

15 different usage of terms. We don't categorize them as

16 gangs. We characterize them as drug trafficking

17 organizations, almost along the same lines as organized

18 crime. They are now just under a different name. They

19 constantly change. We had Columbian drugs at one point,

20 Hispanic drug trafficking organizations at another point.

21 It's always changing. We need to change with them.

22 And by no means is this limited, first of all,

23 just to Pennsylvania or just to the Mexican drug cartels.

24 We still have your traditional street gangs that are out

25 there. We still have traditional street drugs, heroin,

22 1 cocaine, things of that nature.

2 The problem with the Mexican cartels is that

3 we're not equipped to deal with them right now because

4 we're just learning. They literally came into Pennsylvania

5 within the past probably two years because they saw an open

6 market and because they chose meth as their drug of choice.

7 It's easy. It's quick. It's easy to sell. And there's a

8 market for it here, and there is an intensified high. So

9 we now have a supply and demand.

10 They are coming into Pennsylvania and they are

11 extremely violent. They are more violent than the

12 Columbian drug trafficking organizations that we have seen

13 before. I will tell you that, although, you know, there

14 are a lot of things under seal, that we have seen the

15 violence firsthand. And it is frightening. It's a scary

16 proposition.

17 This is also coming from the National Attorney

18 General's Association as well as CWAG, which is the

19 Conference of Western Attorneys General. Also we have on

20 our staff, the head of our BNI, Jonathan Decker. He has

21 been involved in anti-crime in New York as well as DEA.

22 And he is privy as well with the FBI. And we have all of

23 their Intelligence information as well. We are working on

24 a very high level with them.

25 To explain how we work with PSP, as a county

23 1 prosecutor, we worked very well with PSP. We learned

2 valuable lessons that we have to work together. There's no

3 longer siloing of agencies. We can no longer say this is a

4 county detective problem, that's a local police force

5 problem, this is PSP's problem, that's the FBI, that's the

6 DEA.

7 And, in fact, I have met with our U.S. attorneys.

8 I've met with the FBI, as well as local county district

9 attorneys. And we have agreed that we must work together.

10 Our mobile task force would do just that. It

11 would bring in PSP. It would bring in the local

12 municipalities. It would bring in the county district

13 attorneys as well as the FBI and the U.S. Attorney's

14 Office.

15 We all have particular areas of expertise and we

16 all have jurisdiction that we can help each other out. It

17 reduces the amount of time that we're able to break into

18 the drug cartels, as well as to break them up. It

19 increases officer and trooper safety because we now have

20 enough resources when they're going into a house. It

21 increases training and increases the level of expertise

22 that we have out on the street.

23 I've always worked very well with PSP. I think

24 they're a very important part of our State. But PSP has

25 been stretched thin throughout the last couple of years.

24 1 Our local municipal police departments, some of them don't

2 even have full-time officers. And therefore, PSP has to

3 cover.

4 And I know that they were down 500 troopers over

5 the last couple of years. And now they've just been

6 restored approximately 350, which is fabulous. But we

7 would work very well together.

8 I've also talked to Commissioner Noonan about

9 working the Street Crimes Unit together as well as with

10 some other members of the Pennsylvania State Police. And

11 they do believe that it would be an excellent idea.

12 REP. GINGRICH: Thank you for that. Obviously,

13 your network is keeping you well informed.

14 I'm still surprised that we didn't hear any

15 allusion to that from the State Police precisely. And you

16 are correct, their budget is challenged as well. And we

17 want to make sure that they have the core function to deal

18 with to ultimately get them off the street and have what

19 they need as well.

20 Thank you for that answer.

21 ATTORNEY GENERAL KANE: Thank you.

22 MAJORITY CHAIRMAN ADOLPH: Thank you.

23 At this time, I'd like to recognize Rep. Dick

24 Stevenson who has joined us, our Caucus Administrator. And

25 I'd also like to recognize the Democratic Chair of the

25 1 Judiciary Committee, Rep. Tom Caltagirone.

2 Representative Marsico, who is the Republican

3 Chair of the Judiciary Committee, had a death in his

4 family. His brother passed away. And I'm sure he would be

5 here if it wasn't for that loss.

6 ATTORNEY GENERAL KANE: Our deepest sympathies to

7 him.

8 MAJORITY CHAIRMAN ADOLPH: Without further ado,

9 the next question will be by Chairman Caltagirone.

10 REP. CALTAGIRONE: Thank you, Mr. Chairman.

11 General Kane, welcome on board.

12 ATTORNEY GENERAL KANE: Thank you.

13 REP. CALTAGIRONE: And you know a lot of your

14 legislation dealing with the criminal element will fall in

15 this Committee. Ron and I have worked very closely

16 together over the last several years in getting legislation

17 out of this Committee and approved in the House and Senate.

18 And that will be extended to you, I'm sure.

19 ATTORNEY GENERAL KANE: Thank you.

20 REP. CALTAGIRONE: Let me just throw this at you.

21 Reading -- that's where I come from -- has been listed as

22 the most violent city, not just in Pennsylvania, but in the

23 country. We are down 50 in our complement of police

24 officers. We went from 215 down to 165.

25 As a matter of fact, one of my former staffers

26 1 just joined the Reading PD. And I wish him good luck. And

2 I pray for him to make sure that he's safe.

3 We have so much drug activity from the cartels.

4 And just as an aside, just a couple, two, three years ago,

5 they confiscated over a million dollars in cash from one of

6 the city residences on North 9th Street a few blocks away

7 from my district office.

8 Just to give you an idea how prevalent that

9 really is, the number of shootings, almost as comparable as

10 what's been going on in Philadelphia, we have it every week

11 in Reading. And it is the cartels. I used to serve on the

12 McLaughlin Group where we were trying to interdict the

13 drugs coming in from outside of Pennsylvania up the 222

14 Corridor. Most of our third-class cities are plagued with

15 this kind of activity.

16 We had a Crime Summit in Reading. We had just

17 about every agency of the Federal, State, and local

18 government, all of the elected officials, Federal, State,

19 and local were there. We were trying to come up with a

20 basic plan as to, how do we turn this situation around?

21 And we're going to plead with you and your agency and your

22 people whatever can be done to try to interdict and stop

23 the flow of drugs and the mayhem that's being created in

24 Reading and the other third-class cities that you alluded

25 to.

27 1 ATTORNEY GENERAL KANE: Yes, sir. And no need to

2 plead. We are right there. We are ready to get out on the

3 streets with you. And one other point that I may point

4 out, the difference between the Office of Attorney General

5 and the State Police and the reason why we need to work

6 together is because we have the authority for wiretaps.

7 Wiretaps give us a tremendous amount of

8 intelligence. We run them in conjunction with either the

9 State Police or the FBI. It is a source of so far good

10 information for us. It's a source of officer safety.

11 And we are ready and willing to help.

12 REP. CALTAGIRONE: Well, I just hope that we can

13 coordinate the activities with the Federal agents. And

14 I've asked them to reestablish offices. We used to have

15 the DEA, FBI, and ATF in Reading. They basically no longer

16 have a major presence.

17 And, you know, our jurisdiction, as you well

18 know, covers Pennsylvania. But a lot of the stuff is

19 coming in from other surrounding states. And that activity

20 has to be coordinated in order to be effective to dry up

21 the kind of activity that's creating a plague in this

22 State, especially with the narcotics.

23 ATTORNEY GENERAL KANE: Yes. And, in fact, we're

24 doing that now. Next week we're attending a conference by

25 the National Attorney General's Association and CWAG on the

28 1 Mexican cartels, what the latest Intelligence is, what the

2 latest investigative techniques are.

3 But I will tell you that already speaking with

4 the U.S. Attorney for the Middle District, he's on board

5 already with us. I think that we will have a great

6 partnership. And I'll tell you what, I can guarantee you

7 within a year, you will see great results.

8 REP. CALTAGIRONE: Thank you, Madam Attorney

9 General.

10 And thank you, Mr. Chairman.

11 ATTORNEY GENERAL KANE: Thank you.

12 MAJORITY CHAIRMAN ADOLPH: Thank you.

13 Rep. Pyle.

14 REP. PYLE: Thank you, Mr. Chairman.

15 Thank you, Madam General. I appreciate it. It's

16 the first time we've met. The pleasure is all mine.

17 ATTORNEY GENERAL KANE: Thank you.

18 REP. PYLE: $6 million increase in the AG line.

19 Am I hearing you correctly?

20 ATTORNEY GENERAL KANE: That is correct, sir.

21 That's a 7.8 percent increase.

22 REP. PYLE: Out of that 6 million, you're saying

23 you want to add how many lawyers, 12?

24 ATTORNEY GENERAL KANE: Are you talking about

25 the --

29 1 REP. PYLE: Earlier you had given a breakdown on

2 the justification of the use of this budget. And you said

3 the big number was 6 million but that you were downsized so

4 many lawyers and you wanted to add. And I forget what that

5 number was.

6 ATTORNEY GENERAL KANE: We're asking for a $6

7 million increase so that we can stay at the funding levels

8 from last year. The funding levels right now are $78

9 million. Last year we had a 7.8 percent increase in

10 expenses, meaning salaries, health benefits, as well as

11 pension increases.

12 If we are flat funded, that is actually a $6

13 million increase to the office. If we have a $6 million

14 increase, then that would potentially decrease the staffing

15 levels by approximately 57 attorneys in all different areas

16 of the office. And we might have to look at closing

17 approximately five smaller offices.

18 REP. PYLE: Thanks. I wasn't clear on that.

19 ATTORNEY GENERAL KANE: Oh, no. That's fine.

20 REP. PYLE: You've made mention about the Mexican

21 cartels. I am not from the East. I'm from the far West

22 where the only flat part is basically the river level.

23 It's all hills.

24 Our problem where we are is not crystal meth,

25 although we've dealt with that for years coming down out of

30 1 the forest. It's actually heroin. And I used to be Mayor

2 of a small town. I've worked a lot with police.

3 You might want to take a look at the Cleveland

4 business. That is actually Detroit business passing

5 through Cleveland coming in through New Castle and flooding

6 Western Pennsylvania with heroin. That would be much

7 appreciated. They really don't follow any ethnic

8 breakdown.

9 ATTORNEY GENERAL KANE: We'd be happy to.

10 REP. PYLE: That's just a pipeline. I called the

11 guys at the Kittatinny barracks. They patrol a 70-mile

12 swath the whole way from Butler into Pittsburgh on 28.

13 They call that the heroin alley.

14 ATTORNEY GENERAL KANE: Thank you.

15 REP. PYLE: You might want to take a look at

16 that.

17 ATTORNEY GENERAL KANE: Our head of BNI is

18 sitting right behind me. So I'm sure he's on it as we

19 speak.

20 REP. PYLE: Super. Well, Tom, who just retired

21 from Kittatinny barracks, was a warrior. And if he's

22 listening, thank you very much for all you did.

23 My next question. We have a bit of a difference

24 of opinion. How much of the $6 million is going to be used

25 to research reciprocation agreements with other states?

31 1 ATTORNEY GENERAL KANE: None of it.

2 Right now we have two people who review our civil

3 contracts and the reciprocity. They review 5,000 contracts

4 as well as the reciprocity agreements. There's probably

5 about maybe two to four states who may have changed their

6 state laws, which then allows us to relook at their

7 reciprocity agreements.

8 REP. PYLE: I see.

9 ATTORNEY GENERAL KANE: We have looked through

10 quite a few of them already. And we have identified

11 perhaps four that have changed their state law. What we're

12 doing now is making sure that their state law is compatible

13 to our state law and making sure that the safeguards are in

14 place the same that we have in Pennsylvania.

15 REP. PYLE: I travel quite a bit. I run the

16 Republican Sportsmen Caucus. So I do hunt in multiple

17 states all over the region. I'm just curious as to which

18 way you'd be going next so I don't break the law.

19 ATTORNEY GENERAL KANE: Well, sir, I'm quite sure

20 that if you are a law-abiding citizen with a valid gun

21 permit, that you and I will never be having another

22 conversation about it again.

23 REP. PYLE: Well, I've got a bad feeling we're

24 gonna.

25 ATTORNEY GENERAL KANE: Not in the wrong context.

32 1 REP. PYLE: I thank you very much for your

2 candor.

3 And thank you, Mr. Chairman.

4 ATTORNEY GENERAL KANE: Thank you, sir.

5 MAJORITY CHAIRMAN ADOLPH: Thank you.

6 Rep. Dean.

7 REP. DEAN: Thank you, Mr. Chairman.

8 Welcome, General Kane. Nice to see you here

9 today.

10 ATTORNEY GENERAL KANE: Thank you.

11 REP. DEAN: Good luck on your important work on

12 behalf of all of our citizens.

13 ATTORNEY GENERAL KANE: Thank you.

14 REP. DEAN: I wanted to go back to the move that

15 you made and maybe just give us some of the details on the

16 closing of the so-called Florida loophole. How did you

17 come about striking that agreement with Florida? It seems

18 like a wise and probably fairly efficient way of updating

19 our laws.

20 And I say this in the context of several dozen

21 members of the House. In a bipartisan way, we formed

22 something called PA Safe. It's a caucus that is interested

23 in public safety and protecting the public from all kinds

24 of violence, whether it's drug violence, which you talked

25 very aptly to today unfortunately, gun violence, violence

33 1 in our schools, violence against women and children, child

2 predator activity.

3 So it's really a comprehensive look that we're

4 taking. We'd like to partner with you. So I thought maybe

5 if you told us a little bit more about your actions in the

6 closing of the Florida loophole and maybe what other things

7 that you're looking forward to in terms of other areas of

8 safety.

9 ATTORNEY GENERAL KANE: Certainly. Thank you.

10 And I commend you on your efforts. It really is wonderful

11 that you're tying all of those elements of safety together.

12 They really do have interactive devices and elements to

13 them. And we would also love to be a part of the

14 conversation.

15 In 1995, the General Assembly granted the

16 Attorney General the authority to renegotiate reciprocity

17 agreements and to enter into reciprocity agreements amongst

18 and between the states. And that falls under the Uniform

19 Firearm Act, which is 18 P.S., Section 6109.

20 So under that authority then, we looked at the

21 Florida law requiring concealed carry permits. And it's

22 concealed carry permits which I think a lot of the general

23 public doesn't understand.

24 And when we looked at their law, it was actually

25 that our reciprocity agreement was poorly drafted, to be

34 1 honest with you. And when we called Florida to say we're

2 interested in renegotiating the agreement, their answer

3 was, what took you so long? You're only one of three

4 states who have this poorly drafted agreement.

5 And what it was is it's very simple. What it

6 comes down to is that it's a residency requirement. So we

7 have a Pennsylvania resident. If that person was denied a

8 permit in Pennsylvania, they could write to Florida and

9 they could obtain a Florida permit even though they're not

10 a Florida resident, because Florida did not have the

11 residency requirement. And that's where the loophole

12 occurred.

13 Pennsylvania residents can then take their

14 Florida permit, come back to Pennsylvania, and they could

15 legally carry it because of the poorly drafted agreement.

16 So where we stand now is we made the residency

17 requirement. Florida now only grants permits based if you

18 are a Florida resident. Pennsylvania grants a permit based

19 if you are a Pennsylvania resident. Floridians who are

20 valid Floridians and with a valid Florida residence can

21 still carry their concealed weapon into Pennsylvania. All

22 they do is carry their Florida concealed carry permit as

23 well as their identification showing that they actually

24 live in Florida.

25 Pennsylvania residents with a valid Pennsylvania

35 1 permit to carry a concealed weapon, it hasn't affected them

2 at all. They can still then travel to Florida because we

3 have a lot of snowbirds. We understand that. They can

4 still travel to Florida and carry their concealed carry

5 permit.

6 What it did was, there were about 4,000 permits

7 of Pennsylvania residents who obtained Florida licenses,

8 many of them because they couldn't obtain a license in

9 Pennsylvania. In fact, there was one case where there was

10 a police chase. They went into the guy's house. They

11 found all these police vests and weapons. And they said,

12 where's your permit for these weapons? And he said, well,

13 it's a Florida permit. They said, well, why do you have a

14 Florida permit? You live here in Pennsylvania. He said, I

15 couldn't get one in Pennsylvania.

16 So it's really just making sure that the

17 Pennsylvania laws are not usurped.

18 REP. DEAN: Okay. Great.

19 And are you looking at other areas where we could

20 be revising, improving our reciprocal agreements that would

21 go toward public safety?

22 ATTORNEY GENERAL KANE: We are. As I mentioned

23 before, we are looking at the other reciprocal agreements,

24 making sure that they are compatible with Pennsylvania law

25 as well.

36 1 The other thing that I have suggested yesterday

2 is I believe that you all had the great wisdom last year of

3 passing legislation that increased the penalties for straw

4 purchasers. Straw purchasers account for 40 percent of the

5 gun crimes in Pennsylvania.

6 You built me the toolbox. You built us the

7 toolbox. But I'm asking you to give us the tools to go

8 into that toolbox. We, as prosecutors and law enforcement,

9 need to be able to have a lost and stolen legislation,

10 which has absolutely nothing to do with permitting. It

11 doesn't touch it at all.

12 All it says is that if you lose your firearm or

13 if it's stolen, you have a certain amount of time, whatever

14 is deemed reasonable by the General Assembly, to report it

15 so that we just have an accounting for it if it shows up in

16 a crime. It protects the gun owner, quite honestly. And

17 it also protects the public because we're able to track how

18 many stolen guns are out there.

19 REP. DEAN: Sure.

20 ATTORNEY GENERAL KANE: And it also allows us the

21 teeth for the straw purchasing law. You walk into a

22 courtroom, you've just arrested somebody, they're on trial

23 for straw purchasing. The prosecutor says, what happened

24 to your gun? You gave it to this 16-year-old who then shot

25 an 18-year-old to death.

37 1 And all they have to do is say, it was lost or it

2 was stolen and we have no way to track it. And now,

3 therefore, the law has no teeth. So we're only asking for

4 the tools to be able to enforce the law.

5 And universal background checks, I believe it's

6 supported even by sportsmen and responsible gun owners.

7 And there's no reason to have background checks on certain

8 weapons or in certain areas. Just make it universal.

9 REP. DEAN: That's great. I appreciate your

10 perspective on all of those areas.

11 ATTORNEY GENERAL KANE: Thank you.

12 REP. DEAN: And then the last thing I wanted to

13 know is, how is your relationship with the sharing of

14 information from PICS and NICS and all of that? Do we have

15 a good working relationship?

16 ATTORNEY GENERAL KANE: That is a wonderful

17 question. And the answer is we do now.

18 REP. DEAN: Okay.

19 ATTORNEY GENERAL KANE: We had a problem in

20 Pennsylvania whereby the State Police were required to

21 enter into all of those who were mentally ill who should

22 not be eligible to carry firearms. They did that in our

23 PICS system. But when it was then transferred over to the

24 NICS system, NICS kicked it back to Pennsylvania, all

25 640,000, because it wasn't broken up into certain sections.

38 1 In Pennsylvania, if you are mentally ill, you can

2 be committed under Section 302, 303, and 304. The NICS

3 system would not accept the 302s because they didn't deem

4 them to have procedural due process. So they kicked them

5 all back.

6 So then PSP, as stretched as they were, had to go

7 through all of this bulk of documents to pull out the 302s.

8 Well, of course, that takes some time. In the meantime,

9 right after Sandy Hook, then the PSP had them resubmitted

10 and NICS picked them up saying, okay, we're just taking all

11 of them.

12 So now it has been rectified. And now we have

13 640,000 mentally ill in the PICS as well as NICS database.

14 REP. DEAN: Well, thank you for all the

15 information. And I think everybody here looks forward to

16 working with you to really create a safer society here.

17 ATTORNEY GENERAL KANE: Thank you.

18 REP. DEAN: Thank you, Mr. Chairman.

19 MAJORITY CHAIRMAN ADOLPH: Thank you.

20 Rep. Gordon Denlinger.

21 REP. DENLINGER: Thank you, Mr. Chairman.

22 Welcome, Attorney General. Good to have you join

23 us.

24 ATTORNEY GENERAL KANE: Good afternoon. Thank

25 you.

39 1 REP. DENLINGER: Particular thanks for the report

2 you gave us on the Mexican drug activity, which is very

3 concerning. And to the extent that I hail from Lancaster

4 County and that you've highlighted that area, we appreciate

5 that focus and any efforts that your agency can expend.

6 ATTORNEY GENERAL KANE: Thank you.

7 REP. DENLINGER: I'd like to shift into the

8 theoretical philosophical for a minute if we may --

9 ATTORNEY GENERAL KANE: Certainly.

10 REP. DENLINGER: -- on the issue of drugs in

11 particular. We are engaged in a statewide and to some

12 extent a national debate on drug policy. Two states have

13 now voted legalization of cannabis, marijuana usage. To

14 some extent the debate involves around medical usage but

15 quickly broadens out into recreational use. And there are

16 huge implications for society as well.

17 The caucus, the Democratic Caucus, frankly in the

18 House and Senate side here, there are members who are

19 actively pushing the idea that we would legalize to some

20 extent.

21 And I would be very interested, for the record,

22 in your stating your position, given that you're a

23 prosecutor by background and your views on whether

24 marijuana is a gateway drug into other types of drug use.

25 ATTORNEY GENERAL KANE: I will tell you, as I

40 1 said yesterday, today is my 25th day on the job. My first

2 inclination as a prosecutor was always that it was a

3 gateway drug. Once the high no longer comes from marijuana

4 that it needs to come from someplace else.

5 I will also, however, state with certainty that I

6 know what I know and I know what I don't know. And I'm not

7 afraid to say that I don't have the information.

8 I really would love to see more studies regarding

9 the use of medical marijuana, regarding the effects, how

10 it's been effected and effectuated in other states, how

11 they've dealt with the problems or the fallout, if there is

12 any.

13 At this point, I don't believe I have enough

14 information to make an intelligent decision. And I would

15 rather hold off until I have even more information.

16 REP. DENLINGER: To the extent that we're

17 considering the application of state law as it currently

18 exists, what will be your approach with your agency with

19 our current laws regarding marijuana?

20 ATTORNEY GENERAL KANE: As they presently stand?

21 REP. DENLINGER: Yes.

22 ATTORNEY GENERAL KANE: We prosecute possession

23 of marijuana crimes right now. And we will continue to do

24 so until the General Assembly tells us differently.

25 REP. DENLINGER: Thank you for that.

41 1 One other item, if I may. I would like to shift

2 gears into the Medicaid Fraud Detection Unit. Your budget

3 calls for an increase of 400,000 to that line item to

4 increase it to 4.129 million. Obviously, we're having a

5 lot of discussion about Medicaid in State Government these

6 days.

7 I'm wondering that increase that you've

8 requested, the basis behind it, is that because of concerns

9 that have been expressed by the Federal Government that

10 perhaps Pennsylvania's Medicaid fraud detection isn't

11 adequate?

12 ATTORNEY GENERAL KANE: From my understanding of

13 our Federal grants, as well as our State, what we have to

14 put in, is that it is 75 percent federally funded and we

15 have to fund the remaining 25 percent.

16 Right now I don't believe that we have -- we

17 haven't purchased any fixed assets since 2006 and 2007.

18 I'm quite sure that our computers and our software could

19 always use an update. And we are mostly concerned with the

20 increased funding so that we can keep our Federal grant

21 because it's matching.

22 REP. DENLINGER: So it's not so much an issue of,

23 are we doing the job well? it's to keep pace with

24 technology and do the Federal match.

25 ATTORNEY GENERAL KANE: I believe so, sir, yes.

42 1 I believe that our office has been doing a wonderful job in

2 the Medicaid fraud section. We have, I think, a robust

3 unit at this point. And I do believe that they do bring in

4 recoveries that are then returned to the State.

5 REP. DENLINGER: Very good. Thank you. Thank

6 you for those answers.

7 And thank you, Mr. Chairman.

8 ATTORNEY GENERAL KANE: Thank you.

9 MAJORITY CHAIRMAN ADOLPH: Thank you.

10 Rep. Carroll.

11 REP. CARROLL: Thank you, Mr. Chairman.

12 Madam General, thank you for being here today.

13 ATTORNEY GENERAL KANE: Thank you,

14 Representative.

15 REP. CARROLL: The Bureau of Consumer Protection

16 is probably the entity within your purview that the average

17 Pennsylvanian interacts with more than any other. And I

18 believe that that bureau is funded in your general

19 operations line where the 9.2 request is embedded.

20 And more than anything else I wanted to bring to

21 your attention, which I think you must know, that the

22 Bureau of Consumer Protection is a vital entity within the

23 Department, within your office.

24 And I'm hopeful that you, as the Attorney

25 General, will, despite the enormous challenges that you

43 1 have related to drug cartels and child predators, not lose

2 focus of the importance of the Bureau of Consumer

3 Protection. Average Pennsylvanians that call not just my

4 office but I suspect members' offices in both the House and

5 the Senate refer folks to that office on a regular basis.

6 And really the average Pennsylvanian relies on the

7 responsiveness of the folks that work for you in those

8 offices.

9 So I would call to your attention the importance

10 of the Bureau of Consumer Protection and ask you to be

11 mindful of the important work that those folks do for you

12 on behalf of many of the 12 million folks, the percentage

13 of folks within our 12 million ranks, that contact that

14 office.

15 ATTORNEY GENERAL KANE: Yes. I certainly will.

16 And I agree with you. Our personnel has been

17 reduced from 2008 from 93 Bureau of Consumer Protection

18 positions to, as of July 2012, 73. They take in

19 approximately 41,000 complaints a year. And they also

20 bring in approximately, this year alone, $93 million back

21 into the Commonwealth.

22 It's very important that the money that they

23 return then goes back to the consumer, but also the

24 enforcement effort that they put forward. We need to make

25 sure that we get the message out that crime doesn't pay.

44 1 And by vigorous enforcement and prosecutions, I think we're

2 doing just that.

3 So I appreciate your comments. Thank you.

4 REP. CARROLL: My suspicion is that many of those

5 referrals are a result of conversations that folks start

6 having in House and Senate district offices and the

7 referral, you know, springs from there. And it really is

8 important because the folks that work in legislative

9 offices alone do not have the capacity or the backing of

10 the office to be able to respond to these sorts of

11 complaints.

12 ATTORNEY GENERAL KANE: Yes.

13 REP. CARROLL: And it really falls in your lap to

14 try and help these folks, many who have been victimized as

15 a result of poor practices. I appreciate your focus on

16 that important component among the vast array of things

17 that you have to focus on.

18 ATTORNEY GENERAL KANE: Thank you.

19 REP. CARROLL: Thank you.

20 Thank you, Mr. Chairman.

21 MAJORITY CHAIRMAN ADOLPH: Thank you.

22 Rep. Seth Grove.

23 REP. GROVE: Thank you, General.

24 ATTORNEY GENERAL KANE: Good afternoon.

25 REP. GROVE: Good to have you in front of us

45 1 today.

2 ATTORNEY GENERAL KANE: Thank you.

3 REP. GROVE: I appreciate the comments thus far,

4 especially on movement towards drugs. I love your map, by

5 the way.

6 ATTORNEY GENERAL KANE: Thank you.

7 REP. GROVE: And obviously since transportation

8 is also a hot topic of the General Assembly, you can

9 directly see the I-95 corridor clearly marked right along

10 there. I hale from York County, which is just north of

11 Baltimore. And that's another great drug corridor from 83

12 up to York. And then you skip right over to Lancaster and

13 then you've got the whole 322 corridor up to Reading.

14 I also have a big pet peeve of line items. I

15 look at how many line items we have in the budget. I love

16 to see emerging line items. You have three dealing with

17 drug law enforcement.

18 ATTORNEY GENERAL KANE: Yes.

19 REP. GROVE: Drug law enforcement, which is

20 basically statewide under your jurisdiction; local drug

21 task forces, which is working with the locals; and then the

22 Drug Strike Task Force, which is Philadelphia, correct?

23 ATTORNEY GENERAL KANE: Yes, sir.

24 REP. GROVE: You're asking for an increase in all

25 three of those line items. Is it possible to maybe utilize

46 1 our resources better and try to bring them together to form

2 a more comprehensive and robust drug task force moving

3 forward?

4 ATTORNEY GENERAL KANE: I am always one for

5 consolidating and making things easier as well. The

6 increase was due to the fact that, again, just the increase

7 in expenses. It's certainly something that we can look at.

8 REP. GROVE: Okay.

9 ATTORNEY GENERAL KANE: I will tell you that they

10 are three different animals of sorts. Philadelphia deals,

11 obviously, specifically with Philadelphia, and that is the

12 drug task force. It is difficult to be able then to pull

13 in the county task forces as well, because we offer the

14 local district attorneys the opportunity to conduct and to

15 operate their own county task force. And that would be up

16 to them. So that is one.

17 Then Philadelphia, obviously, is another. And

18 then the other, I'm not sure how easy it would be able to

19 be merged.

20 REP. GROVE: And maybe forthright to maybe enter

21 into those discussions to see what we can do. Because

22 obviously in budget restraints moving forward, it's tough

23 to do that.

24 ATTORNEY GENERAL KANE: Sure.

25 REP. GROVE: The other thing, the Joint Local

47 1 State Firearm Task Force is obviously on the job. Have you

2 reviewed that? It seems pretty successful outright, your

3 assessment of it.

4 ATTORNEY GENERAL KANE: Yes, sir, I have.

5 It's been very successful. I can get the numbers

6 for you. I can tell you that even just last week that the

7 task force in Philadelphia worked very well with the local

8 police officers and they did arrest a straw purchaser.

9 Just as I mentioned before, it was someone who

10 bought guns, four guns, for a 16-year-old. The 16-year-old

11 then shot an 18-year-old to death. So we were able to do

12 that.

13 Since the inception, that task force has opened

14 2,325 investigations, arrested 804 individuals, and

15 recovered 1,678 illegal firearms. I think that that's a

16 tremendous success.

17 REP. GROVE: It is.

18 ATTORNEY GENERAL KANE: In 2012 alone, the task

19 force opened 296 investigations resulting in 160 arrests

20 and recovering 183 firearms. I will note that we have

21 requested additional funding, again for benefits and salary

22 increases.

23 REP. GROVE: That's terrific.

24 Obviously, probably not a good discussion for

25 this budget cycle, but in the future, I'd love to discuss

48 1 maybe possibly expanding that into third-class cities, etc.

2 Hailing from York, we do have York City. Turn on the news

3 any Saturday morning, Sunday morning, some kind of shooting

4 unfortunately. We just had a gentleman that was stabbed a

5 month ago that was just shot again. It's repeat.

6 I do appreciate that. And I appreciate your

7 willingness to take on street gangs. We have actually a

8 Baltimore Heights gang that actually moved up. I think

9 it's called Dover Heights. Two high school students who

10 actually live in my neighbor were recently arrested in

11 connection with that. It's mostly in-home invasions at

12 this point. So I'm a firm believer in getting to those

13 young kids before they start going in the wrong direction

14 doing some very serious crimes that could end up ruining

15 their lives.

16 ATTORNEY GENERAL KANE: Absolutely. Thank you.

17 I agree with you wholeheartedly.

18 REP. GROVE: And one thing, I do struggle with

19 drugs, guns, and street gangs. It seems to be the same

20 thing. Is there a need to have three separate entities

21 dealing with that? Do you need specializations

22 specifically in drugs and firearms and in gangs?

23 ATTORNEY GENERAL KANE: We do, yes, because

24 firearm trafficking is a specific animal as well. You need

25 to know and have specific training in the drug laws and in

49 1 detection and also in investigation. And then with the

2 gangs, it's amazing how smart they are. And they are

3 highly technical and sophisticated. We need to stay ahead

4 of them. I don't believe that we would have the resources

5 or the manpower to be able to combine them just into one

6 and expect that we're going to make a dent.

7 But I do believe that working together we can

8 certainly make a dent. There's no doubt about that.

9 REP. GROVE: I appreciate that.

10 I do want to sit down with you at some point to

11 kind of go over the PMA issue as well. Being from York,

12 Maryland, part of their Lottery system, actually they do

13 Keno with their Lottery down there. And they just approved

14 Gaming maybe a year or two ago.

15 But I would like to sit down with you and go over

16 that in a little more detail to get your understanding and

17 exactly your thought process in turning down that contract.

18 ATTORNEY GENERAL KANE: My door is always open.

19 REP. GROVE: I appreciate that.

20 Thank you.

21 ATTORNEY GENERAL KANE: Thank you.

22 REP. GROVE: Thank you, Mr. Chairman.

23 MAJORITY CHAIRMAN ADOLPH: Thank you.

24 Rep. Kula.

25 REP. KULA: Thank you, Mr. Chairman.

50 1 General Kane, it's great to see you again.

2 ATTORNEY GENERAL KANE: You as well.

3 REP. KULA: In 2005, the criminal justice

4 enhancement account was established that would reimburse

5 counties 65 percent for their full-time district attorneys.

6 And I know every year we come here and I know every year

7 that funding was not there and we have been very far

8 behind.

9 Can you catch us up on where we are in

10 reimbursing counties? Because, obviously, if the State is

11 struggling with the budget, it's a trickle-down effect.

12 And I know our counties are struggling with their budgets.

13 ATTORNEY GENERAL KANE: Yes.

14 REP. KULA: So could you give us an update on

15 that account?

16 ATTORNEY GENERAL KANE: Absolutely.

17 REP. KULA: Thank you.

18 ATTORNEY GENERAL KANE: At this point, we've

19 reimbursed the counties for the calendar years up to and

20 including 2010. For the fiscal year 2011, we have

21 reimbursed approximately 75,000 to each county. That would

22 be for the year 2011. The Commonwealth still owes those

23 counties approximately $31,000. And that's about $2

24 million.

25 It's estimated that the funds will be in the CJEA

51 1 to reimburse the counties for the remaining amounts owed

2 for the calendar year 2011 by June 30th of 2013. So we are

3 playing a bit of catch-up.

4 Right now that balance of that account is

5 approximately $1,896,781. We have requested additional

6 funds. And as you well know, I'm sure, this is a complete

7 pass-through. None of these funds actually stay within the

8 Office of Attorney General. We want to catch the counties

9 up for 2012 and 2013.

10 We had two lawsuits filed against the Office of

11 Attorney General and the Governor as a result of the

12 nonpayment. The first one, Pike County v. the

13 Commonwealth, has been resolved due to lack of prosecution

14 on the part of the county. And the other one is Finn v.

15 Rendell, which is still pending, although we are working to

16 get it paid and then hopefully get the lawsuit resolved.

17 If we do not, then we are prepared to file a

18 summary judgment motion very shortly.

19 REP. KULA: Well, I thank you for that. And I'm

20 sure you will keep after it. Being a former district

21 attorney, you know how important it is for counties to

22 receive that. I'm sure it makes all of their lives much

23 easier.

24 ATTORNEY GENERAL KANE: There is no doubt. Yes.

25 REP. KULA: Thank you so much for being here

52 1 today.

2 ATTORNEY GENERAL KANE: Thank you.

3 REP. KULA: Thank you, Mr. Chairman.

4 MAJORITY CHAIRMAN ADOLPH: Thank you.

5 Rep. Mustio.

6 REP. MUSTIO: Thank you, Chairman Adolph.

7 Hello.

8 ATTORNEY GENERAL KANE: Hello.

9 REP. MUSTIO: I'm going to ask you a question

10 related to Southwestern Pennsylvania and the delivery of

11 affordable health care particularly in Allegheny County and

12 the surrounding communities.

13 ATTORNEY GENERAL KANE: All right.

14 REP. MUSTIO: Last year the merger of West Penn

15 Allegheny General and Highmark did not come to fruition.

16 And there have been some significant financial concerns as

17 it relates to West Penn Allegheny General Hospital. I know

18 the Insurance Department was looking at the original deal

19 very closely.

20 And it's my understanding that your Department

21 has a division that looks at charitable non-profits and

22 their stability. And I just wanted to ask what the status

23 is of the review there and also any impact that budget cuts

24 may have on continuing to move forward and continuing to

25 review that situation.

53 1 ATTORNEY GENERAL KANE: Yes. Thank you.

2 At this point, our office has reviewed the merger

3 between Highmark and West Penn Allegheny, but not including

4 any other hospitals, strictly between those two.

5 We have no objection to the merger based upon the

6 marketability, which is what we look at under our antitrust

7 division. I know that at this point, the Insurance

8 Commissioner is reviewing it regarding the issue of whether

9 the reserve funds can be used for the purchase.

10 REP. MUSTIO: And from the financial standpoint

11 as it relates to the non-profit, you're comfortable with

12 where that stands at this point?

13 ATTORNEY GENERAL KANE: We are right now, yes,

14 because it would increase the marketability in your area.

15 And it would also then reduce the potential for monopoly,

16 which, as you know, then increases costs and reduces the

17 access to health care. So based upon all of those elements

18 we have looked at, we have no objection to the merger at

19 this point in time.

20 REP. MUSTIO: It's important for the competition

21 in the region. I appreciate that.

22 ATTORNEY GENERAL KANE: Thank you.

23 REP. MUSTIO: Thank you, Mr. Chairman.

24 MAJORITY CHAIRMAN ADOLPH: Thank you.

25 Rep. Bradford.

54 1 REP. BRADFORD: Thank you, Chairman Adolph.

2 General, I just have a hodgepodge of questions

3 real fast. And I was just hoping you can give me some

4 insight.

5 One of the things I've heard the President when

6 he's talking about sequestration and the impact it may have

7 on some of our local police departments, we have a couple

8 communities that take advantage of justice assistance

9 grants and such. Any idea of what sequestration might mean

10 for your Department, for the Commonwealth, for law

11 enforcement through the Commonwealth?

12 ATTORNEY GENERAL KANE: At this point, I do not

13 know the effect that it would have. I understand that the

14 municipal police departments are being hit across the

15 Commonwealth at a tremendous rate. And hopefully we hear

16 that we will not as well. But I don't know the effect of

17 the sequestration on the local municipalities or our

18 office.

19 REP. BRADFORD: Okay. Thank you.

20 ATTORNEY GENERAL KANE: Sure.

21 REP. BRADFORD: I also wanted to follow up on

22 something Rep. Dean had talked about with some of the gun

23 issues and the straw purchases, in particular, that you had

24 mentioned.

25 ATTORNEY GENERAL KANE: Sure.

55 1 REP. BRADFORD: A lot of our local communities in

2 the Southeast really basically have tired of waiting for

3 the Commonwealth to act and are on their own enacting lost

4 and stolen ordinances and resolutions. And obviously,

5 they'll be challenged and are being challenged. And that

6 will all work out in its own time.

7 I know you said you support lost and stolen and

8 the universal background checks. One of the other things,

9 because of the mass killings, though, that has come up is

10 the issue of clips and the magazines.

11 Have you taken a position? Have you looked?

12 We've asked some of these questions to the Colonel from the

13 State Police who was very forthcoming about his own ideas

14 about straw purchases as well. I just wanted to hear what

15 your thoughts are, not just on the straws but also the mass

16 killings and the clips and the assault weapons.

17 ATTORNEY GENERAL KANE: I attended a roundtable

18 about two weeks ago in Philadelphia with Vice President

19 Biden as well as national politicians, elected officials,

20 as well as police chiefs from Delaware, Maryland, as well

21 as Pennsylvania. The U.S. Attorney's Office, the Justice

22 Department, and the Attorney General's Office were present

23 as well.

24 And I think we had a very forthcoming discussion

25 regarding assault weapons and clips. My thought is,

56 1 regarding clips specifically, I'm all for the Second

2 Amendment. I come from the Northeast. We are hunters

3 there. It's our way of life. Every time I say the word

4 gun, one of my friends calls me and says, what are you

5 talking about now? And I have to explain it in great

6 detail, which I'm happy to do.

7 So with that said, I don't believe that having a

8 clip that holds 70 rounds is for hunting or sport. And I

9 have a problem with being able to go into a classroom and

10 take down an entire classroom in under one minute.

11 I absolutely see the need to protect ourselves.

12 It is our constitutional right. It's our right to protect

13 our families and to stand our ground. There is no doubt

14 about that. I think that we just have to look at the

15 reasonableness of it and make sure that while we're not

16 violating the Second Amendment -- all the amendments are

17 important -- we're also making sure that we protect our

18 kids and our families and we're reasonable.

19 And what I found out about that roundtable

20 discussion was, we're at least talking about it now. You

21 know, in years past, anybody, any elected official, could

22 never even say the word or you'd be in big trouble. But

23 now I think that we are to a point where everyone is

24 comfortable saying, let's talk about it.

25 And I think a lively discussion is wonderful. I

57 1 think it promotes democracy. And that's our system of

2 government. It works. It works well. So I think that we

3 need to do more of that. And we need to make sure that we

4 also have the best interest of the public at heart.

5 REP. BRADFORD: Thanks, General.

6 ATTORNEY GENERAL KANE: Certainly.

7 REP. BRADFORD: I just want to follow up on two

8 civil litigations to that that I guess have been -- I guess

9 one that's kind of over now hopefully. Obviously, the

10 Governor, then Attorney General, had begun the lawsuit to

11 block the Affordable Care Act. And that obviously went to

12 the Supreme Court.

13 Do we have any idea yet on what the total outlay

14 was from your office for that litigation? How much

15 manpower went to that? What was the total cost?

16 ATTORNEY GENERAL KANE: That is a good question.

17 I don't know what the cost was.

18 REP. BRADFORD: If you could get back to us on

19 that, that would be interesting to know.

20 ATTORNEY GENERAL KANE: Sure.

21 REP. BRADFORD: Similarly, I know the -- and I

22 realize this litigation just started -- NCAA lawsuit, I

23 guess -- and I don't understand the procedural posture. I

24 just read a quick clip of it today.

25 In light of the legislation that was passed,

58 1 they're now suing the Commonwealth. Again, without getting

2 into the merit of the litigation, can you just give us an

3 idea of what the status is of that?

4 ATTORNEY GENERAL KANE: My understanding is,

5 prior to me taking office on the 15th of January, then

6 General Kelly assigned the antitrust lawsuit over to the

7 Office of General Counsel. And then they brought the

8 lawsuit on behalf of the Governor's Office and the people

9 of Pennsylvania against the NCAA. The NCAA then sued

10 Pennsylvania, I believe, because they were sued.

11 Where that leaves the Office of Attorney General,

12 at this point, is that we also have an array of duties.

13 Sometimes they correspond with each other and sometimes

14 they don't. And one of our duties is to defend the

15 Commonwealth. So we then will either defend the

16 Commonwealth or the Governor also has the opportunity to

17 have the Office of General Counsel defend the Commonwealth

18 or obtain outside counsel.

19 REP. BRADFORD: Great. Thank you, General.

20 Thanks for the answers.

21 ATTORNEY GENERAL KANE: Thank you.

22 REP. BRADFORD: Thank you, Mr. Chairman.

23 MAJORITY CHAIRMAN ADOLPH: Thank you.

24 Rep. Boback.

25 REP. BOBACK: Thank you, Mr. Chairman.

59 1 Good afternoon, Madam Attorney General. Thank

2 you for being with us today.

3 ATTORNEY GENERAL KANE: Good afternoon. Thank

4 you for having me.

5 REP. BOBACK: You made a point quite eloquently,

6 I might say, that crime is growing but your budget is not.

7 And I will certainly take that to heart.

8 ATTORNEY GENERAL KANE: Thank you.

9 REP. BOBACK: My question, though, is regarding

10 crimes of fraud. We alluded to Medicaid fraud. But I was

11 wondering, as you were going through your data, what other

12 types of fraudulent practices have you derived? because as

13 we know, fraudulent practices cost the taxpayers money.

14 Can you expand on that, please?

15 ATTORNEY GENERAL KANE: Yes. Absolutely.

16 The Commonwealth has been involved in many

17 multi-state legal actions with the signing, as you know,

18 that came about with the national mortgage settlement where

19 the Commonwealth then was awarded 66 million.

20 Just about two weeks ago, we signed on to the

21 lawsuit involving Standard & Poor's where we alleged that

22 they violated unfair trade practices in the Consumer

23 Protection Law by defrauding the ratings.

24 We have also been involved in the lender

25 processing service. That was a multi-state settlement that

60 1 was approved on the 7th of January of this year. And a

2 settlement was entered just in February.

3 We have also been involved in a multi-state

4 settlement that was approved January 7th of this year as

5 well, filed on February 14th. And a Court order approving

6 the settlement came in on the 19th. And that's against the

7 unintended acceleration on the Toyota cars.

8 We are looking at a number of other suits as

9 well. And I agree with you, in fact. Fraud isn't just a

10 civil action to me. Fraud is theft. Fraud is taking money

11 out of the pockets of hard-working, well-deserved people.

12 And we put a lot of effort into our Bureau of

13 Consumer Protection and our Public Protection Division.

14 They do great work in the Commonwealth. They are very

15 dedicated to the consumers. And we will certainly keep

16 that up.

17 REP. BOBACK: Thank you. I'm quite impressed

18 with what you've done in less than two months. Keep up the

19 good work. Thank you.

20 ATTORNEY GENERAL KANE: Thank you.

21 REP. BOBACK: Thank you, Mr. Chairman.

22 MAJORITY CHAIRMAN ADOLPH: Thank you.

23 I want to thank the Attorney General for

24 testifying before the Committee today. We appreciate your

25 very thoughtful answers. I'm sure you're surprised there

61 1 weren't more question on the PMA.

2 ATTORNEY GENERAL KANE: Pleasantly surprised,

3 Mr. Chairman.

4 MAJORITY CHAIRMAN ADOLPH: And I'm going to

5 mention -- and I said this in front of the Secretary of

6 Revenue as well -- we all here in the General Assembly know

7 the great job that the Lottery has done over the years.

8 The Governor was trying in his PMA to derive

9 benefits down the road, years out, 20 years, to make sure

10 that the senior citizens and people my age that will be

11 retiring in the next ten years, the baby boomers, as we

12 start drawing on those benefits, some type of guaranteed

13 income. I'm not an attorney. I'm not going to sit here

14 and debate with you whether that PMA contract was legal or

15 not legal. I don't know.

16 Governor Corbett was the former Attorney General.

17 I hope the contract, you know, was legal. If it's not, it

18 will be proven otherwise.

19 But we do appreciate the job that you're doing.

20 I'm looking forward to working with you. This is a process

21 that is just beginning. We will go through your budget

22 request. The office over the years has been a very

23 important office for the protection and public safety of

24 the residents of Pennsylvania. And that, Attorney General,

25 is No. 1 to us as well.

62 1 ATTORNEY GENERAL KANE: Thank you, sir, for your

2 understanding and your consideration.

3 MAJORITY CHAIRMAN ADOLPH: Thank you.

4 ATTORNEY GENERAL KANE: Thank you.

5 MAJORITY CHAIRMAN ADOLPH: For the information of

6 the members, the Committee will reconvene Monday, February

7 25th, promptly at 10 a.m. And the budget hearing will be

8 the budgetary request of the Military and Veterans Affairs.

9 Thank you. And have a nice weekend.

10 ATTORNEY GENERAL KANE: Thank you.

11 MAJORITY CHAIRMAN ADOLPH: The meeting is

12 adjourned.

13 (The hearing concluded at 4:45 p.m.)

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63 1 I hereby certify that the proceedings and

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3 taken by me on the within proceedings and that this is a

4 correct transcript of the same.

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