Prepared Remarks of Attorney General John Ashcroft
at the Computer and Telecommunications
Coordinator Conference
Thursday, October 6, 2004

                          Thank you.

      We are gathered together here because the protection of intellectual property, and the pursuit and prosecution of intellectual property criminals, are top priorities for the United States Department of Justice.

      We are here because, when the freedom of our nation is threatened, whether from terrorism, violent crime, or theft of our economy's most precious resources, the Department of Justice does not waver from meeting the challenge.

      More than three years have passed since the ground here in Manhattan was hallowed by the blood of innocents. The terrorist attacks and the loss of more than 3,000 lives are stark reminders that the first responsibility of government is to provide the security that protects the lives and liberty of the people.

Today law enforcement on every level is working together to keep America safer and more secure. Consider what we have accomplished over the past three years:

• From New York to Oregon, from Florida to Ohio, from Virginia to California, we have dismantled terrorist operations and cells;
  
  
• We have brought criminal charges against 364 individuals;
  
  
• We have secured convictions from 193 of them;
  
  
• We have frozen more than $200 million of funds from organizations suspected of supporting terror; and,
  
  
• Worldwide, we have incapacitated 3,000 individuals who had enlisted in the campaign of terror against America.

      More importantly, for more than three years, we have lived without a major terrorist attack on U.S. soil.

      The men and women of law enforcement have defied expectations by keeping America safe from terrorism. And in this time of war ... in this time when they have been asked to sacrifice as never before ... they have defied expectations in other ways that are protecting the lives and liberties of Americans.

      Pessimists have long told us that violent crime is a fact of life ... especially for poorer groups of Americans.

      Last month, the Department of Justice's Bureau of Justice Statistics reported that federal, state and local law enforcement has driven violent crime rates to record 30-year lows. This record level of safety has been achieved for all Americans ... across every economic category in our nation.

      There was a school of thought that said that enforcing the gun laws through federal prosecution of guns crimes would never work to reduce gun violence.

      In the past three years, under Project Safe Neighborhoods, we have increased federal prosecutions of gun crimes by 68 percent. In 2003 alone, we charged a record 13,000 defendants with federal firearms offenses.

      This increase in prosecutions has translated into fewer crimes committed by gun-toting thugs, as well as fewer victims. Let us compare the three years prior to Project Safe Neighborhoods to what we have been able to achieve in the three years since 2001.

      In that time, even as the population has risen, the number of gun crimes has decreased by more than 250,000. And in that same time period, more than 350,000 citizens were spared the fear and pain of gun crime. That represents an 18 percent reduction in the incidence of gun crime, and a 20 percent drop in the victims who faced a gun.

      There are people who flirt with drug legalization, saying the fight against illegal drug use can never succeed.

      Since fiscal year 2003, the Department of Justice has disrupted or dismantled 15 of the largest, most organized illegal drug organizations both here and abroad. As a result, for the first time in a decade we have seen an 11 percent drop in drug use among eighth-, tenth-, and twelfth-grade students.

      And after a series of corporate scandals rocked our financial markets, the chattering classes said government could never restore the trust that had been lost.

      But that was before the Department of Justice prosecuted 300 cases of corporate fraud. That was before we charged 700 defendants. And that was before more than 300 individuals were convicted or pled guilty to defrauding investors, including top executives from Enron, WorldCom, HealthSouth, and Rite Aid.

      For the past three years, the men and women of the Department of Justice have been proving the experts wrong.

      Americans are safer from terrorism today. Safer from violent crime. Safer from gun violence. Safer from illegal drugs. America is once again a marketplace of integrity, open for business to anyone.

      But there is much more to be done, and the pace of the challenges we face is not one we set for ourselves. The world we live in has been transformed by a rate of innovation that is no longer measured in decades or even years, but months.

      From cutting-edge therapeutic drugs to faster computer chips, from new movies and books to smaller, more powerful handheld communication devices, intellectual property touches each and every one of our lives at work and at home. In the increasingly knowledge-driven economy, the ideas and products known collectively as "intellectual property" are the new coins of the realm.

      But if intellectual property unleashes our nation's potential, its theft diminishes our nation's and our citizens' possibilities. Intellectual property crimes threaten our nation's economic security, the health and safety of our citizens, even our national security. Our response to this threat must be every bit as forceful and aggressive as our response to terrorism, violent crime, drugs, and corruption.

      The International Intellectual Property Alliance (IIPA) is an association of 1,300 U.S. companies that produce many different forms of intellectual property. Drawing on U.S. government data, the IIPA examined the economic impact of copyright industries: the producers and distributors of movies, magazines, music, and entertainment software.

      In 2002, the IIPA found that the copyright industries generated more than $500 billion for the United States economy each year. This is an amount equal to about five and a half percent of our Gross Domestic Product. Furthermore, the copyright industry employed more than five million American workers and created jobs three times faster than any other segment of the economy.

      This study examined just the copyright industry. You can imagine what the full impact of intellectual property is on our economy. Consider the wide range of industries ... aerospace, auto and computer manufacturing, pharmaceuticals ... all of these and many more are based in intellectual property.

      The United States Trade Representative estimates that intellectual property theft worldwide costs United States companies $250 billion annually. Industries from software designers to auto-parts manufacturers estimate that they have lost more than 300,000 jobs due to the cost of IP theft. Intellectual property theft not only damages our economy, it also can endanger physically our health and safety. Counterfeit products are often destructive products.

• In the past two years, people who have received prescription drugs from reputable pharmacies to treat infection, HIV-AIDS, and heart disease, have learned ... sometimes after taking these drugs for weeks ... that their pills were counterfeit. One pharmaceutical company discovered a counterfeit version of its pills that was made with a combination of floor wax and yellow lead-based paint normally used to mark roads.
  
  
• In the past two years, the Department of Justice and the Bureau of Immigration and Customs Enforcement have blocked hundreds of thousands of counterfeit batteries from reaching U.S. stores. These batteries contained unsafe levels of mercury, and were so poorly manufactured that exposure to sunlight might have caused the batteries to explode.
  
  
• In January 2004, a dozen municipalities and counties in Alabama and Georgia purchased pesticides to protect their citizens from mosquito-borne West Nile virus. The pesticides purchased were counterfeit; they offered no protection to these communities, because they contained almost no chemicals to kill the insects.

      These examples illustrate that intellectual property theft is much more dangerous and insidious than the public's perception of a street corner huckster selling counterfeit watches out of a counterfeit briefcase.

      Today, organized criminal networks deal in the millions of dollars of counterfeit goods to finance their other criminal enterprises, from human trafficking to illegal drugs.

      We also know that as law enforcement cuts off terrorism's various avenues of fundraising and financial support, intellectual property theft and counterfeiting serve as attractive and lucrative means by which to finance terrorists' deadly plots.

      The Department of Justice takes seriously its mission to protect Americans from the criminals of the new millennium ... thieves who steal our nation's innovative ideas and hard work.

      Those of you here today who have taken up this challenge ... the men and women of the Computer Crime and Intellectual Property Section, the Computer Hacking and Intellectual Property Units, and the Computer and Telecommunications Coordinators ... all of you deserve our gratitude and our thanks.

      You are playing a critical role in our nation's frontline defenses against intellectual property theft and counterfeiting. In defending intellectual property rights, you are defending the economic security and the health and safety of our citizens.

      We have seized hundreds of millions of dollars worth of counterfeit products. We have shut down Internet theft networks dealing in millions of copies of illegally distributed copyrighted material. For example:

• In August 2004, Operation Digital Gridlock seized more than 40 terabytes of illegally distributed copyrighted materials from computers located in Texas, New York, and Wisconsin. This was the first federal enforcement action against a "peer to peer" network. The 40 terabytes were the equivalent of 60,000 movies or 10.5 million songs.
  
  
• In April 2003, a South Carolina man was sentenced to seven years in prison and ordered to pay $3.5 million in restitution for selling fake Nike shoes and fashion apparel.
  
  
• In September 2004, more than $56 million in counterfeit Microsoft software was seized and 11 people in California, Texas, and Washington were charged with manufacturing counterfeit software and counterfeit packaging.

      But as I said earlier, there is much more to be done. Just as innovation is the transformational force for our economy, so it must be for those of us defending freedom and the rule of law.

Seven months ago I formed the Department of Justice's Intellectual Property Task Force. The charge I gave the Task Force was to find new and innovative ways to protect Americans from the theft of intellectual property. I know that over the past several months the Task Force and its staff has been communicating with many of you, discussing ideas and approaches to investigating and prosecuting intellectual property crime. Your input and insight has been invaluable.

      I am pleased to report that I have received the Task Force's recommendations. Next week, I will release the report to the public and, at that time, the Department of Justice will launch the most aggressive and comprehensive crackdown on intellectual property crime in our nation's history.

      Let me give you a sneak preview of just a few of the things we will be announcing. You are going to have new investigative resources to pursue intellectual property thieves. You are going to get new prosecutorial tools to ensure the cases you bring carry the tough sentences that not only punish the perpetrators of intellectual property theft, but also deter others from committing similar crimes. And you will be receiving more support for the important work you are doing already.

      Our one-point-oh version of intellectual property rights enforcement and protection has been good. With these recommendations and your dedication, our two-point-oh version is going to be better, tougher, and more successful.

Even though it was uttered in 1862, something President Abraham Lincoln said then about the challenges our nation faced is appropriate for the challenges we face now:

      "The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so must we think anew and act anew."

      Lincoln's caution is worthy of repetition ... we must think and act anew.

      But what will not change are the values that guide our mission every day ... freedom, justice, and the rule of law.

      We are charged with providing the security that preserves and protects the lives and liberty of the American people. We are charged with ensuring that America remains an incubator of innovation, an engine of economic growth, and a beacon to all who seek freedom and opportunity.

      Each of you is keeping that charge. Each of you is helping to protect our nation's economic potential. You will return to your districts and your offices knowing new resources are coming, and that the job you do is critical to our nation's security and the safety of its citizens.

      I thank you for meeting this challenge and rising to this occasion; for what you have done and what you will do to serve the cause of justice.

      Thank you very much.

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