▶ 0:18:20Chair Grassley: Good morning. I would like to welcome everyone to today's hearing on the nomination of colin mcdonald to be assistant attorney general of the national fraud enforcement division. Congratulations, Mr. mcdonald. Today we are going to hear a lot about fraud enforcement. It's a very important issue.
▶ 0:18:48Chair Grassley: One that I'm sure concerns all americans. Throughout my career, I have led the charge in combating fraud. In 1986i authored the landmark amendments to the post times act. It enables the government to recover taxpayer dollars from entities that defrauded its programs.
▶ 0:19:16Chair Grassley: Since then, the false claims act has been used to recover 85 billion taxpayer dollars. That number keeps growing. Last year the government recovered 6.8 billion under the false claims act, the highest single your recovery in history.
▶ 0:19:40Chair Grassley: I have long tapped into this law because it is the stupid -- single greatest resource in combating fraud against the government. Over the years I have also championed efforts to combat increasing trends of fraudulent scams that target our elderly communities.
▶ 0:20:00Chair Grassley: Years ago, I introduced the elder abuse prevention and prosecution act, stiffening penalties and equipping prosecutors with the tools needed to bring perpetrators to justice.
▶ 0:20:18Chair Grassley: The elder justice coalition described this act as one of the most comprehensive and meaningful bills ever developed to address the rapidly increasing problems of elder financial abuse in america. I was proud of and my bill was signed into law.
▶ 0:20:47Chair Grassley: I dedicated my years of public service to combating fraud of all forms. The examples I noted are just a few of those efforts. I mentioned them not only because they are relevant to today's hearing, but also because, and more importantly as it is necessary in the U.S. senate, these were all bipartisan efforts.
▶ 0:21:14Chair Grassley: Bipartisan because combating fraud is not and should not be a republican or democrat goal. We should all agree that investigating fraudsters is important work. We should also agree that the government must work to stop scammers who steal money from federal programs.
▶ 0:21:44Chair Grassley: Hard-working americans deserve better accountability comes to how their tax dollars are spent. They demand it, and I demand it as well. We have had multiple hearings on the recent fraud in minnesota that gained national attention. These shocking fraud schemes have targeted programs that were designed to help children with autism, the elderly, and small businesses.
▶ 0:22:12Chair Grassley: What happened in minnesota and around the country in recent years who is unacceptable. As I said before, all public officials must work together to hold these wrongdoers accountable and ensure that this never happens again. I applaud the trump administration. I applaud the department of justice for taking these issues very seriously.
▶ 0:22:42Chair Grassley: I am happy that the justice department is prioritizing fraud enforcement. So, now to the introduction of our nominee. Mr. mcdonald graduated from california western school of law , clerking for judge michael in aloe on the U.S. district court of the southern district of california. Since then, Mr.
▶ 0:23:08Chair Grassley: Mcdonald has spent his entire legal career in public service. In 2014, Mr. mcdonald joined the U.S. attorney's office for the southern district of california as an assistant U.S. attorney. As a prosecutor, Mr. mcdonald handled an array of criminal offenses, including narcotics trafficking.
▶ 0:23:34Chair Grassley: He also specialized in investigations of prosecutions of fraud, money laundering, unlawful transactions, and tax crimes. Mr. mcdonald has distinguished himself throughout his career. He has been regularly chosen for special assignments and for leadership positions.
▶ 0:23:58Chair Grassley: For several years, he has served as the special attorney in the district of hawaii, where he handled high-profile public corruption cases. He also helped to protect our borders as the deputy of the southern district of california border enforcement section.
▶ 0:24:18Chair Grassley: And he protected americans and pursued justice during the opioid crisis as the office of civil enforcement opioid coordinator. Most recently, Mr. mcdonald has served as an associate deputy attorney general.
▶ 0:24:41Chair Grassley: So, at every step of his career, he has garnered to the respect and praise of his peers, and even the judges overseeing his cases. In one case, before the ninth circuit judge harry gregerson, that judge interrupted proceedings to offer rare "praise, speaking of Mr. mcdonald.
▶ 0:25:10Chair Grassley: The judge said "I want to commend you on your candor, your openness, and your honesty with the court. Maybe you will be a U.S. attorney someday." the judges sentiments are shared by many. And his prediction was not far off. Mr. mcdonald knows how the justice department works.
▶ 0:25:37Chair Grassley: He has prosecuted hard cases and has done so by the book and with the highest ethical standards. That is the sort of a person that we need leading the national fraud enforcement. I look forward to hearing from him today. As an admonition to all the members of the committee, I will ask everyone to keep questions limited to the five minutes allotted to keep the schedule on the hearing. Now, senator?
▶ 0:26:05Sen. Durbin: Over the last year, the trump has systematically dismantled justice department offices responsible for rooting out waste, fraud, and abuse in federal programs. It has done the same with components that police fraud against consumers and investors. Last april, attorney general bondi disbanded the team responsible for prosecuting cryptocurrency crime.
▶ 0:26:32Sen. Durbin: Last september she dissolved the consumer protection branch in the department of justice that enforced federal laws prohibiting fraud against consumers. The administration also did away with the justice department's tax division, established one century ago by robert jackson, leading efforts to prosecute tax fraud. The attorney general gutted the public integrity section responsible for enforcing laws against public corruption.
▶ 0:27:00Sen. Durbin: None of this should come as any surprise. The worst examples of waste, fraud, and abuse in recent years are coming from inside the trump administration. Want to root out fraud? Start at the top. The administration itself. Fraudsters who have made huge contributions to the president have been regularly rewarded with pardons and god only knows what else.
▶ 0:27:26Sen. Durbin: In april of 2024, the finder of finance was sentenced to prison and ordered to pay a $50 million fine for his role in money laundering and then brokered a deal to channel $2 billion into the trunk family crypto business in the president pardoned him. What a coincidence.
▶ 0:27:46Sen. Durbin: This week we learned that b inance accounts have funneled money to iranian entities with links to terrorist groups. But the trump family tiptoe company world liberty financial continues to partner with them. We have these negotiations going on with iran with a risk of the possibility of war and the president posit business is doing business with a company that is backing the iranian terrorist groups.
▶ 0:28:18Sen. Durbin: Something's wrong here. A convicted fraudster indicted in 20 for stealing $47 million from his own business. Later that year he was behind a 100,000 dollars donation to the trump inaugural committee. A few months later, his justice department dropped the case. Anyone serious about fighting sought should focus as well on the white house, who has more than doubled his net worth since returning to office.
▶ 0:28:48Sen. Durbin: Not a bad year for the president. Blind trust has been replaced by eyes wide open money grabs. Trump appointees have contributed to the waste, fraud, and abuse by misusing government resources and taxpayer dollars for their own benefits. Last week news broke that kristi noem planned to spend $70 million on a luxury private jet, including a queen size bed and a bar to accommodate her official travel.
▶ 0:29:21Sen. Durbin: Fbi director kash patel has shamelessly exploited the private government jet of the fbi to support his jet setting lifestyle, including a golfing getaway in scotland and a trip to watches girlfriend perform a wrestling match. His girlfriend perform a wrestling match. Most recently, he flew to italy to choke beers with the U.S. olympic hockey team.
▶ 0:29:49Sen. Durbin: As a whistle throughout -- whistleblower told the company, the tone was set early when he told fbi agents they if you have a golf, hockey, fishing, hunting, or beautiful sites, you will see en route -- you will see a lot of me. There are many unanswered questions about the so-called national fraud enforcement division. Some of them are very basic.
▶ 0:30:12Sen. Durbin: In january, the vice president claimed that he would be -- the operation would be run out of the white house under his and president trump's supervision and then they contradicted the vice president, claiming that the new division's assistant attorney general would report to the deputy attorney general, todd blanche, not the vice president. Then last night we saw at the state of the union address handshake and hand off to the vice president again. The confusion doesn't stop there.
▶ 0:30:42Sen. Durbin: Justice department officials cannot agree with whether or not they will absorb staff and resources from the existing fraud offices or if they were higher new staff. Last week I spoke to the attorney general asking for clarification on these issues and she has not responded. So, we start with the perennial question, who is on first? We should not move ahead with such questions unanswered. I hope that Mr.
▶ 0:31:07Sen. Durbin: Mcdonald is prepared to answer those questions today and hope that he is prepared to discuss waste, fraud, and abuse. Mr. chairman, I would like to enter into the record a letter that was sent to the general accounting office at the department of justice yesterday about Mr. patel's agree just issues around private jets for personal travel and joyriding.
▶ 0:31:32Sen. Durbin: I might also add that there are serious questions being raised as to whether the resources of the fbi were available at a critical moment when we had the terrible incident at brown university. These questions need to be answered on the record and I think it should be led by our efforts on this committee.
▶ 0:31:48Chair Grassley: Thank you, senator durbin. Before I swear the nominee, some of my colleagues have speculated that the white house have asserted improper influence on the national fraud enforcement division.
▶ 0:32:06Chair Grassley: So, I have a reorganization chart, recently issued by the department of justice in the case that this division would follow the traditional chain of command according to that record. Mr. mcdonald would then report directly to the attorney general and deputy attorney general and they would oversee his work. This is entirely unremarkable.
▶ 0:32:29Chair Grassley: Without objection, I enter into the record a copy of the justice department's later organizational chart that was signed by the attorney general. I hear no objection. Would you please stand, Mr. mcdonald, so that I can swear? Do you swear that the testimony you are about to give before the committee will be the truth, the whole truth, and nothing but the truth, so help you god?
▶ 0:33:00Chair Grassley: Thank you, please be seated. It is our custom that you give your opening statement and before your opening statement if you want to introduce a family, friends, or whatever you want to say, the floor is yours.
▶ 0:33:16Mr. Mcdonald: Thank you, chairman, ranking member. To the entire committee, thank you for extending that privilege of appearing before you today. It is a great honor to have been nominated by the president to serve as the assistant attorney general for the national fraud enforcement division at the department of justice.
▶ 0:33:41Mr. Mcdonald: My commitment to this committee and to the american people is as follows. To zealously represent the united states in our efforts to prosecute criminals who exploit the generosity of our country by stealing from taxpayer-funded programs. Every dollar stolen is a dollar that did not put bread on the table.
▶ 0:34:11Mr. Mcdonald: That did not reach the hospital bed. That didn't meet the need identified by congress. Fraudsters should never be allowed to rip off the united states of america. If confirmed to this position, under the direction of the attorney general and deputy attorney general, I will work with everyone.
▶ 0:34:39Mr. Mcdonald: Congress, the inspectors general community, federal partners, and state partners, regardless of political party, to build and lead a national fraud enforcement division that restores faith in our taxpayer-funded programs and brings justice to those who defraud them. I am not a one-man team.
▶ 0:35:05Mr. Mcdonald: I am thankful to be joined today by my dear wife and our five children, who range in age from 13 down to 1.5 years old. One year ago, we packed up our bags, said goodbye to our family and friends, and moved from our home in sunny san diego to serve the united states here in washington, D.C. we have experienced a lot of new things over the last year.
▶ 0:35:37Mr. Mcdonald: Fun things, like building snow forts together in the front yard . Some what fun things, like shoveling snow in the front yard. Hard things, to. Like finding new friends, planting new roots, and trying to water old ones from afar. My crew sitting behind me today has faced it all with grit, grease, and she is.
▶ 0:36:06Mr. Mcdonald: I am very proud of them and thankful that they are with me today. Be on my life, my greatest life influences are my mother and father. They raised me and my nine siblings in a small house in a small town outside san diego.
▶ 0:36:33Mr. Mcdonald: My parents taught us all to love and serve god, live with integrity, pursue excellence, be grateful and content, and to never ever give less than 100% in anything. I am honored that my mother and father are also here in the room with me today and am thankful for their lifelong love and support.
▶ 0:37:03Mr. Mcdonald: I am also blessed to have my father-in-law, mother-in-law at home today, my spouse's -- mike siblings and their spouses, and upgraded just two nights ago, my 46 nieces and nephews. I love you all. As for me, I am a career federal prosecutor in career public servant. I got my start as a clerk for U.S.
▶ 0:37:27Mr. Mcdonald: Judge michael anello, who graciously welcomed me in and taught me so much about the practice of the law. There after I joined my hometown U.S. attorney's office in san diego as an assistant U.S. attorney. I grew up as a lawyer in that office, meant to buy many selfless public servants who gave their talents to their country in their community.
▶ 0:37:55Mr. Mcdonald: Representing the united states as a usa has been the honor of a lifetime. The mission being the purest of them all. It isn't to win at all costs, it isn't to get convictions, it's to get justice for the united states. Meeting the high mark of justice demands equal measures of courage and caution, conviction and compassion, persistence and prudence.
▶ 0:38:26Mr. Mcdonald: It demands a relentless pursuit of the truth and willingness to follow the facts wherever they lead without fear or favor. As an associate deputy attorney general, I've given every last ounce of energy every day to meet that high mark of justice. I have the distinct privilege of working with the men and women of the department of justice who are committed to achieving that same high ideal.
▶ 0:38:57Mr. Mcdonald: Above all other names, I have known that I reached the high mark of justice when a victim of crime looked me in the eye and thanked me for listening, for caring, cap for truth and justice on their behalf.
▶ 0:39:15Mr. Mcdonald: If confirmed as the aag for the national fraud enforcement division, I will continue each and every day to give my all for the american people and strive for truth and justice. I welcome your questions.
▶ 0:39:33Chair Grassley: We have five-minute rounds. You heard what I said in my opening statement about my involvement in the false claims act. You don't need to give a long answer to the question just to make me feel good, but please tell me what role if any the national fraud enforcement division will play in enforcing the false claims act.
▶ 0:39:54Mr. Mcdonald: Thank you, senator. It was a pleasure to meet with you, yesterday. Senator, is a pivotal tool to be sure that our federal programs are free of fraud, waste, and abuse. As you mentioned, this last year was a record number for recovery under the false claims act.
▶ 0:40:30Mr. Mcdonald: Making sure the false claims act is stronger and sturdier and that our work in that regard is better than ever before going forward. >> how would you coordinate the other components of the justice department to avoid duplicative investigations and conflicting litigation positions?
▶ 0:40:50Mr. Mcdonald: Chairman, that's a great question. Step one of any effort within the department of justice must ensure that the work that we do is as efficient as possible. If one agent or one attorney and one office is working on the same case that another agent or attorney is working on in another office, that's not a fruitful exercise for the department of justice.
▶ 0:41:17Mr. Mcdonald: What I have done as a proof career prosecutor is from the get go ensure that all of our effort is as efficient as possible by building out processes and procedures that enable us to do the maximum amount of work because of those processes and procedures we have built.
▶ 0:41:36Mr. Mcdonald: What I will do is work very closely with all of the partners within the department of justice who work in the fraud space, including the false claims act, including other fraud efforts, to make sure there is no duplication of effort and that the national fraud enforcement division is truly complementary to all of the other work that historically has gone on.
▶ 0:42:02Chair Grassley: I am very concerned about fraud and scam targeting senior citizens. I am going to quote the aarp, estimating that individuals aged 60 and older lose at least 28 billion annually as victims of fraud. What measures would you take through the national fraud enforcement division to protect elderly from fraud?
▶ 0:42:28Mr. Mcdonald: Chairman, I am highly sympathetic and compassionate to the elderly, who are the victims of this sort of fraud. I will be working closely with my other partners within the department of justice to make sure that we use all of the tools available to us to bring relief to these victims.
▶ 0:42:55Mr. Mcdonald: It isn't just the grandmothers and grandfathers, it is also their family members who bear the weight of the scams and fraud perpetrated against them. My grandmother, one of them turns 89 and two days and she has seen these sorts of efforts towards her.
▶ 0:43:13Mr. Mcdonald: It is a major issue that the department of justice is focused on and we will be using all available tools to make sure we combat the problem and I will finish by saying that in my work it has been a distinct pleasure to work with victims, including the elderly, including one 99-year-old victim of fraud that I worked and had the pleasure of listening to, of hearing her story, of believing her story and then fighting for justice for her, that 99-year-old, in
▶ 0:43:46Mr. Mcdonald: The state of hawaii.
▶ 0:43:47Chair Grassley: Fraud and investigation enforcement has historically been handled by the justice civil and criminal divisions. Because of that, some have speculated that this new division that you are going to have is redundant or unnecessary . So, why is the reorganization of the department of justice important when it comes to combating fraud nationally and how will the american people benefit from this new structure?
▶ 0:44:18Chair Grassley: That will be my last question. Thank you, chairman. This issue of fraud, waste, and abuse is so vast. An independent study from 20 estimated that between 230 billion annually up to about 520 billion annually in fraud against tax payer funded programs, the fraud is massive.
▶ 0:44:44Chair Grassley: The president and the attorney general were right to identify this as a place where we need to put significant more focused, even with historic years last year. There is still a vast divide of work that we need to do to make sure our taxpayer funded programs are free of fraud.
▶ 0:45:01Sen. Durbin: Thank you very much, Mr. chairman. Mr. mcdonald, welcome. Welcome to your lovely family. Be careful with your comments, three of your children are taking notes on everything you say. There will be a record for you to answer to later on over there. Let me ask you a question about weaponization, a term frequently used by the administration, stopping weaponization.
▶ 0:45:29Sen. Durbin: A gentleman by the name of ed martin is well known to this committee, he's been removed from two positions trump administration already, I don't know where he is today. You've been identified as a cochair of the weaponization working group, Mr. martin talked about that as a group getting evening -- getting even with people critical of the president. Are you a cochair of that group? >> senator, thank you for the question.
▶ 0:45:56Sen. Durbin: The president was right early in the administration to identify the reality of weaponization in the federal government in the recent past. He commissioned the department of justice to review certain prior facts in certain prior cases to determine the facts of those underlying, the facts underlying those cases, to ensure that those misuses of
▶ 0:46:31Sen. Durbin: Government power were not engaged in again. The department of justice has been undertaking that work to understand what went wrong during the prior administration, to learn from it and learn from the mistakes of the past and to make sure that we do not make those mistakes again.
▶ 0:46:47Sen. Durbin: The answer is yes, you are cochair of the weaponization working group? >> senator, I am involved in the work of the weaponization working group that has been one of my many responsibilities in the office of deputy attorney general.
▶ 0:47:04Sen. Durbin: You are very tactful in your answer. The president is explicit, he's going after the people that he thinks went after him. As many of us believe, you that should come to an end. But you have been a part of this effort. How about jared weiss, do you know him?
▶ 0:47:22Mr. Mcdonald: As the department of justice has reported, Mr. weiss is an employee of the department of justice.
▶ 0:47:34Sen. Durbin: What was your involvement in the decision to hire him?
▶ 0:47:39Mr. Mcdonald: I am not today going to get into any personnel matters with respect to the department of justice. I will say that I am not involved in hiring decisions for the department of justice.
▶ 0:47:51Sen. Durbin: I understand why you don't want to answer the question. Here's the story on jared weiss. He was here on january 6 with the insurrectionists who stormed the capital. He was filmed saying to the police officers "you guys are disgusting, you are the nazis, you are the gestapo." he attacked police officers a violent mob saying "f them, kill
▶ 0:48:24Sen. Durbin: Them," he was prosecuted and subject to the full and unconditional pardon of the president and then went to work for the justice department in your division. Do you have any problems with his background?
▶ 0:48:34Mr. Mcdonald: Senator, what I'm here to talk about today is the problem facing the american taxpayer, which is, as I mentioned, between 200 30 billion annually and fraud perpetrated against --
▶ 0:48:52Sen. Durbin: I want to know more about you. I'm asking if you know more about jared weiss, his background, and were a part of the decision of making him a part of the justice department. It's a simple question, you can say that yes I was involved or no I wasn't. >> I would refer back to my prior answer, I am not involved in the hiring decisions of the department of justice.
▶ 0:49:16Sen. Durbin: Do you have any problem with his background working for the justice department?
▶ 0:49:22Mr. Mcdonald: I would refer to my answer that the weaponization work in the department of justice currently is critical work to understand the underlying facts and circumstances of what went on in the prior administration.
▶ 0:49:37Sen. Durbin: I think it's more than a seminar on what happened before. It's an agenda that we are hoping will end and I don't hear that from you. Let me ask, were you involved in the decision to disband the national cryptocurrency enforcement team?
▶ 0:49:54Mr. Mcdonald: As the department of justice has made clear, those personnel with the cryptocurrency expertise have been added to other portions of the department of justice and anyone engaged in any sort of fraud regardless of the currency is investigated and prosecuted where appropriate by the department of justice.
▶ 0:50:19Sen. Durbin: Thank you.
▶ 0:50:21Chair Grassley: Senator cornyn?
▶ 0:50:25Senator Cornyn: I'm going to be sending you a letter dated february 11, 20 26, signed by 16 of my colleagues plus me, asking the department of justice to look at the subsidies under the affordable care act, obamacare, that could not be reconciled by the gao, the government accountability office.
▶ 0:50:51Senator Cornyn: It appears that there were brokers selling aca policies to people who did not even know they had received that policy and who made no claims under the policy to the tune in 2023 of on reconcilable expenditures of $21 billion.
▶ 0:51:14Senator Cornyn: You know, health care is a huge issue for all of us in america, and the american people are extraordinarily generous when it comes to making sure that their fellow americans get access to health care, but it is infuriating to see the system be gamed to the point where insurance companies receive windfalls of these subsidies and consumers receive zero benefit.
▶ 0:51:39Senator Cornyn: Do you commit to working within the department of justice to make sure that those sorts of, those sorts of events are remedied and, if possible, recoup overpayments by the taxpayer to these fraudsters for the benefit of the american people?
▶ 0:51:59Mr. Mcdonald: Senator, what I commit to is working tirelessly to root out the sort of fraud you have identified there and to make sure that every single dollar that is supposed to go to these programs actually goes to the programs, to the beneficiaries, the intended beneficiaries of the programs, and not to fraudsters. Commitment. You will be very busy.
▶ 0:52:31Mr. Mcdonald: The scope of the problem is shocking. The gao in 2024 identified 16 agencies with 68 different programs that had 168 billion in improper payments. Now, I suspect that not all of those improper payments were as a result of fraud, but still, the scope of this just boggles the mind.
▶ 0:52:57Mr. Mcdonald: We have about 38 trillion in debt and we are paying more money on interest in the national debt than on defense, which is not sustainable. The president, thankfully, has agreed to request a larger appropriation for our national security purposes next year, one $.5 trillion.
▶ 0:53:18Mr. Mcdonald: But as you can see, this cannot continue and I do think that the job that you have been assigned to do could play a major role in addressing these improper payments, some of which are a result of fraud, all of which dissipates the money that taxpayers pay in taxes. But also exacerbates our financial problems that are, as I said, unsustainable. Do you agree with that?
▶ 0:53:47Mr. Mcdonald: Senator, I do agree. The problem is huge. Last year the department of justice for its total outlay to support the 100,000 employees strong department spent about 50 billion. The annual fraud against the american taxpayer, conservatively, is 233 billion. We must put attention on this program.
▶ 0:54:13Mr. Mcdonald: I will work tirelessly to do what I can to root out the fraudsters who are preventing this money and exploiting the generosity of the american taxpayer in preventing this money from going to needy beneficiaries.
▶ 0:54:31Sen. Cornyn: I've been trying to figure out how all of this could possibly happen and I think a part of it is figuring out how the federal government spends the money and the lack of the accountability on the part of the people who receive the funds. Obviously, the somali daycare fraud, obviously the money went to these nongovernmental entities that provided nonexistent services and basically stole the money from the american taxpayer.
▶ 0:55:01Sen. Cornyn: But would you commit to looking at the contracts and the grants that are made by the federal government to these outside groups, whether they be nongovernmental organizations, contractors, or grantees, to make sure that there is accountability for the funds that they actually receive in order to perform the services that the federal government expects them to perform?
▶ 0:55:29Mr. Mcdonald: Senator, my commitment is to work tirelessly to build a division, a national fraud enforcement division where no fraud is too big for the department of justice and no fraud is too small for the department of justice to have the resources and commitment to pursue the facts and apply the law, wherever they lead, to whatever criminally culpable actors there might be in the chain of fraud that we will seek to unravel.
▶ 0:55:58Chair Grassley: Senator klobuchar.
▶ 0:56:02Senator Klobuchar: Thank you very much, Mr. chairman. I've made it clear that I believe we need to root out fraud and that those who steal taxpayer money have to go to jail. That's why I strongly supported annie lugar as a U.S. attorney under president biden. I recommended him for that job. I also recommended joe thompson, lead prosecutor who headed up fraud cases to serve as acting U.S. attorney.
▶ 0:56:30Senator Klobuchar: The office has indicted 98 people, most of them about a year ago or so. They have obtained about 60 convictions, as you know. Mr. mcdonald, we talked about that and I appreciated you talking with me. He worked with joe thompson when the president announced him as acting U.S. attorney.
▶ 0:56:52Senator Klobuchar: Do you agree that the work that he and the other prosecutors did to investigate fraud in minnesota is a good example of what we should be doing and what we should be continuing and what do you think the prosecutors there did well and what would you do differently or how would you coordinate with local prosecutors around the country?
▶ 0:57:13Mr. Mcdonald: Thank you for the question in the time you spent with me, senator, I really appreciated that. Senator, as you know, the work in minnesota has been pivotal. The work of the U.S. attorney's office and the personnel there has been pivotal to highlighting the problems of fraud that permeate our taxpayer funded programs.
▶ 0:57:39Mr. Mcdonald: That sort of effort, which is also undertaken by our health care unit within the criminal division and U.S. attorneys offices around the country is what the national fraud enforcement division will be looking to do in terms of scaling it to the extent we haven't seen before within the department of justice.
▶ 0:57:59Mr. Mcdonald: I will be working with the inspector general community, with our federal agencies and federal partners, with our state and local partners to ensure that we find the fraud where it's occurring so that we can investigate it, prosecute it, ultimately meet -- ultimately making sure that the fraud being perpetrated comes to an end.
▶ 0:58:27Sen. Klobuchar: Given what the president announced last night about the vice president heading this up and other comments mentioned by senator durbin, how will you assure us that under your leadership that the fraud office that you would head up and that the justice department follows only the facts of the laws and that political pressure won't play a part?
▶ 0:58:49Sen. Klobuchar: You and I talked about other states, maybe blue states, that we know of that have experienced fraud as well, in addition to working on those cases in minnesota.
▶ 0:58:59Mr. Mcdonald: Senator, as a career federal prosecutor, what I do, day in and day out, is uncover the facts and follow the facts and apply them to the law, following at all times the provisions of the justice manual and principles of federal prosecution to make sure that every, every case I bring is fair and is just.
▶ 0:59:28Mr. Mcdonald: That is what I have done as a career federal prosecutor and that is what I will do if confirmed to this aag position. >> as you know, we lost joe thompson and harry jacobs, assistant U.S. attorneys that we know and have worked with. How do you plan on addressing the exodus from that office? I know that you are not the U.S.
▶ 0:59:54Mr. Mcdonald: Attorney, but how would you manage this when you try to work with locals? I know you believe the locals have to continue to do a lot of this work, so how will that be managed? Does he know that they resigned because they didn't want to investigate the wife of renée good?
▶ 1:00:09Mr. Mcdonald: Senator, the department of justice is filled with incredible, talented prosecutors, spanning the country in all of our 93 U.S. attorneys offices and also in our litigating components, criminal division, and civil division.
▶ 1:00:30Mr. Mcdonald: The department of justice will continue to build teams of experience prosecutors and coupled them with experienced agents to root out this fraud and to make sure that we are able to put a bigger dent into the mountain of fraud there and we have ever done before.
▶ 1:00:51Sen. Klobuchar: Last, we talked about this, there are significant consumer scams and 2020, defendants were charged with telemarketing scams that swindled seniors out of 300 million. Are you going to prioritize these cases as well in order to protect consumers against fraud?
▶ 1:01:12Mr. Mcdonald: Senator, I will work with my partners in the department of justice to make sure we have visibility over the entire playing field of fraud and that we are bringing criminal actors to justice.
▶ 1:01:25Chair Grassley: Senator blackburn?
▶ 1:01:31Senator Blackburn: Thank, chairman. Welcome. We are pleased you are here today. Looking at your background, the work you have done in drug trafficking and human smuggling, financial fraud, really suits you for this position. I am pleased to see you put forward for the position. I am pleased that the president really is taking decisive action to crack down on fraud.
▶ 1:01:58Senator Blackburn: It was so interesting, after the minnesota somali fraud began to be made public, one of the top calls coming into the office was people reporting what they thought might have been some type of fraud. So, it shows how much this is needed and how correct the president and the vice president and a.g.
▶ 1:02:26Senator Blackburn: Bondi are to say -- let's do something about this. Congress has a responsibility also, and last month many of my colleagues here joined me in introducing a fraud accountability act. This would clarify the immigration and nationality act to make certain that all types of fraud committed against your local, state, and federal government and the american people are deportable offenses.
▶ 1:02:56Senator Blackburn: So, I think it is important that the american public see these individuals that have committed this fraud held to account. So, I would like for you to talk for just a minute about why that mission is so important and then how you are going to use this division to attack all types of fraud.
▶ 1:03:30Mr. Mcdonald: Thank you, senator. Fighting crime, especially crime that is public, in your face, that neighbors can sense and feel, where there is a government paralyzed to move in the face of that known in your face sort of crime and fraud, that is not a good place to be as a country. That is a place where whistleblowers feel like they cannot come forward, where victims feel like they are not empowered to share their story.
▶ 1:04:03Mr. Mcdonald: If there is not a justice department truly working for the united states, day in, day out, to bring justice to our communities, the issue of fraud in particular, where it is very much in the open and very much in the forefront of the minds of the american people, the department of justice must be nimble, must be capable of wrapping our arms around it and endeavoring to find every day where the fraud is happening and to ensure that the public knows --
▶ 1:04:39Mr. Mcdonald: One of the areas we get out --
▶ 1:04:42Sen. Blackburn: One of the areas we get a lot of calls about is the affordable care act, with hundreds of billions going to insurance companies. People fraudulently enrolled in these programs. The gao did a very revealing study on this. So, how do you prioritize these different types of fraud cases, like what we see in minnesota, but also what we are seeing through the aca, where as many as 12 million people enrolled
▶ 1:05:13Sen. Blackburn: Have never even used the insurance, meaning most of them probably don't know they have it. They were fraudulently enrolled.
▶ 1:05:21Mr. Mcdonald: The way that we start cutting into the mountain of fraud is by leaning on the experienced data analysts and agents who can illuminate the pathway to the fraud that is occurring in all of these programs. We must be driven by that ground-level work done by our data analysts and agents.
▶ 1:05:49Mr. Mcdonald: They illuminate the pathway to the fraud. That is where our investigators and prosecutors stepped in to ultimately bring justice in a court of law.
▶ 1:05:58Sen. Blackburn: I want to take my last few seconds here and commend you for the work with the memphis save task force. To date, the memphis save task force, federal agencies, 23 federal agencies, the national guard, tennessee highway patrol, tennessee bureau of investigations, the mayor of memphis, the police chief, working together have made over
▶ 1:06:30Sen. Blackburn: 7500 arrests. They have recovered over 1500 illegal weapons. They have recovered over 154 missing children. I will tell you, having the ability to help oversee and deliver that type of program, bringing together so many disparate groups, I think it is such a credit to your leadership skill.
▶ 1:07:02Sen. Blackburn: Tell us what you did in overseeing the memphis save task force.
▶ 1:07:05Mr. Mcdonald: Working with that task force and other safety taskforces, it's been an incredible honor to bring together people who all want to see the best of the community and have never been able to get into one room to talk about it to make it all happen. That is what we have done under the president's leadership, the attorney general's leadership, and the marshall leadership.
▶ 1:07:32Mr. Mcdonald: They've come together to say that we will be taking on the program test problem and we won't stop until it's fixed. Violent crime rates have dropped significantly. The fact that matters most to me are the lives we have saved. I will do it again anywhere. So that those lives can be saved. It has been an honor to work with that group.
▶ 1:07:56Sen. Blackburn: The illinois group would do well to learn what we've done in memphis.
▶ 1:08:06Senator: Mr. mcdonald, thank you for your dedication to federal service, wife, children, and family. Thank you for your recognizing the blessing of the opportunity to serve. I'm interested in hearing your perspective on the general direction of fraud enforcement under this administration. Americans, delaware humans, folks of all backgrounds rely on critical federal programs.
▶ 1:08:34Senator: When the money that is supposed to be spent by those programs is diverted to fraud and is stolen, it reduces the amount of resources available to do good in society. I agree with you, we need to make sure that american tax dollars are spent wisely and that the funds are going where they should go.
▶ 1:08:59Senator: I'm concerned that the administration is more interested in targeting people or states he dislikes or has an agenda against. One of the reasons I have this concern is seeing at the same time the administration is creating a new doj division and suggesting it might be directed by the white house. They have shut down, eliminated, and defunded other antifraud units, like the consumer protection branch and tax unit.
▶ 1:09:27Senator: If the president worked serious about combating fraud, he would be applauding the great work done under the previous administration to tackle social services fraud instead of running attorneys out of the office. If you were serious about it, he would be pardoning the very people that dedicated career prosecutors like yourself spend years investigating and prosecuting for stealing from american taxpayers. Starting with you, Mr.
▶ 1:09:55Senator: Mcdonald, you spent your entire career at the justice department as a nonpartisan apolitical prosecutor. Who does the department of justice work for, sir?
▶ 1:10:14Mr. Mcdonald: With respect to the assertions in the lead up to your question --
▶ 1:10:22Sen. Coons: It's a simple question, who does the department of justice work for, sir?
▶ 1:10:28Mr. Mcdonald: I would point out that in the last year the doj has had record-setting years -- a record-setting year in the area of fraud.
▶ 1:10:37Sen. Durbin: Investigations into tax fraud schemes are down 63%. 25,000 federal agents, including many folks that I suspect he worked with, dedicated to investigating white-collar crimes, have been diverted to immigration enforcement. Let me move on to a simple point I wanted to put in front of you.
▶ 1:11:00Sen. Durbin: It takes a huge amount of work, investigation, and time for you and other dedicated prosecutors to bring it to conviction, correct?
▶ 1:11:13Mr. Mcdonald: There's an extensive amount of work on every prosecution because on the right side of the v is a human being that has rights that must be protected and we do that every day in the department of justice, with a mind for the names on the right side of the v .
▶ 1:11:31Sen. Durbin: Balancing that --
▶ 1:11:33Sen. Coons: Balancing that is a key part to justice that you are dedicated to. How do you expend if your team or a group of prosecutors that have spent years, like trevor milton, the founder of the nichola corporation, he committed securities and wire fraud and was sentenced to four years in prison in order to pay nearly 700 million in restitution. In october of 24 he and his wife gave 1.8 million to the presidential campaign.
▶ 1:12:04Sen. Coons: He was subsequently pardoned in march of last year, eliminating not just the sentence, but the massive restitution. Lawrence durrant was the owner of american therapeutic. He pled guilty to defrauding medicare of $200 million and was sentenced to 50 years in prison and ordered to pay 87 million in restitution. In may the president commuted his sentence and pardoned him, also including restitution.
▶ 1:12:32Sen. Coons: How would you explain to your dedicated career team that is investigating fraudsters the repeated presidential pattern of pardoning folks for giving -- forgiving not just their sentence but there restitution obligations in exchange for political contributions?
▶ 1:12:51Mr. Mcdonald: Respectfully, I disagree with the assertions made in the lead up to your question. What I will be doing with my team is equipping them and ensuring that they have everything that they need to go after this fraud better than we have ever done it before.
▶ 1:13:06Chair Grassley: Senator kennedy?
▶ 1:13:11Senator Kennedy: Thank you, Mr. chairman. Counsel, congratulations on your nomination. What kind of fraud are you going to go after?
▶ 1:13:21Mr. Mcdonald: Senator, the core that we are going after within the division initially as we build out will be taxpayer funded programs like medicaid and the snap program. And other subsidiary hhs, usda, etc., programs. We will be putting our view there.
▶ 1:13:44Sen. Kennedy: Who is going to make the decision about which of these specific types of fraud you go after?
▶ 1:13:57Mr. Mcdonald: In the course of building out investigations --
▶ 1:14:02Sen. Kennedy: Who is going to make the decision about which types of fraud that you go after?
▶ 1:14:09Mr. Mcdonald: Senator, with respect to this role, I believe I will be working with the deputy attorney general and attorney general to figure out how to prioritize this.
▶ 1:14:19Sen. Kennedy: So, it's you, the deputy attorney general, and the attorney general?
▶ 1:14:25Mr. Mcdonald: Yes, sir.
▶ 1:14:27Sen. Kennedy: 10 cases of clear fraud, you, the deputy, the attorney general, will sit down and decide which ones to prosecute and prioritize?
▶ 1:14:42Mr. Mcdonald: That work happens within our --
▶ 1:14:46Sen. Kennedy: I have five minutes. No disrespect. Answer my question.
▶ 1:14:53Mr. Mcdonald: As we build out division, those decisions will be made with the deputy attorney general and the attorney general. With respect to specific case questions --
▶ 1:15:03Sen. Kennedy: Do you already have cases in mind?
▶ 1:15:06Mr. Mcdonald: I do not, senator.
▶ 1:15:08Sen. Kennedy: We can aee -- agree that the federal taxpayers put up between 50% and 90% of the money in the medicaid program? State love it.
▶ 1:15:33Sen. Kennedy: Let's suppose that you have a governor who knows there's fraud in his medicaid program, but he ignores it because he would lose all this federal money. Is that fraud?
▶ 1:15:52Mr. Mcdonald: I think that's form of waste, fraud, and abuse, whether it fits within the contours of criminal culpability.
▶ 1:15:59Sen. Kennedy: Is that the sort of thing you will look at?
▶ 1:16:03Mr. Mcdonald: Senator, we will be looking at the full scope of fraud.
▶ 1:16:06Sen. Kennedy: Answer my question. Is that the sort of thing you are going to look at?
▶ 1:16:11Mr. Mcdonald: Senator, I do plan to look at the full range of potentially criminally culpable actors.
▶ 1:16:18Sen. Kennedy: Are you familiar with an inspector general? I am sure you are.
▶ 1:16:23Mr. Mcdonald: Yes.
▶ 1:16:24Sen. Condition Kennedy: You are a good lawyer. You are aware that inspectors general act independently of a cabinet secretary. I think it's 5u.s.c. Section 17. Can only overrule an inspector general if what that person is doing dramatically hurts the U.S.
▶ 1:16:53Sen. Condition Kennedy: Interests or pretty language like that. Let's suppose an inspector general comes in and cabinet secretary or official says to an inspector general, I want to know what cases you are investigating. And you have to tell me. And if any of them are going to impact me in terms of my reputation, I am going to pull you off of them. Is that fraud?
▶ 1:17:27Mr. Mcdonald: Senator, I would see that as a form of conflict of interest to the extent that that will look bad for the cabinet secretary.
▶ 1:17:34Sen. Kennedy: I know that. Is that the sort of thing you are going to get involved in?
▶ 1:17:40Mr. Mcdonald: Senator, I will be focused on criminal prosecutions. That will be my focus and identified fraudsters, operating, taking money -- >> suppose the census bureau tells you that 11% of the american people are poor and we get to decide the definition. But we are going to exclude about 80% of the federal benefits that we give to folks.
▶ 1:18:10Mr. Mcdonald: In determining this 11% so that instead of 11%, we really voanl 1% of the american people that are below the poverty level. Is that fraud? Is it fraud if a cabinet secretary knows that and doesn't do anything about it?
▶ 1:18:30Mr. Mcdonald: Senator, there are a range of criminal tools that the department of justice can bring to bear.
▶ 1:18:36Sen. Kennedy: Is that fraud?
▶ 1:18:38Mr. Mcdonald: Fraud in the classic sense of executing a scheme to defraud a government program, probably not. >> is it right? Is it moral?
▶ 1:18:49Mr. Mcdonald: No, it is not. >> is it ethical?
▶ 1:18:52Mr. Mcdonald: Does not seem ethical. >> thank you for your indulgence.
▶ 1:19:00Chair Grassley: Senator hirono.
▶ 1:19:01Sen. Hirono: Thank you. I ask the following two initial questions going to fitness to serve of all nominees to appear before any of the committees on which I sit. I will ask you the following two questions. Since you became a legal adult, have you ever made unwanted requests for sexual favors or committed any verbal or physical harassment or assault of a sexual nature?
▶ 1:19:23Mr. Mcdonald: No, senator.
▶ 1:19:23Sen. Hirono: Have you ever faced discipline or entered into a settlement relating to this kind of conduct?
▶ 1:19:28Mr. Mcdonald: No, I have not.
▶ 1:19:31Sen. Hirono: Mr. mcdonald, it's more than ironic that a president guilty of 34 felony counts of fraud proudly announces a war on fraud, places j.d. Vance, vice president vance, in charge and nominates you to lead a new anti-fraud division.
▶ 1:19:54Sen. Hirono: Now, we all acknowledge that fraud needs to be prosecuted and that there is a lot of it and you are now going to head the division of fraud, as you recognize it is such a massive problem. There are other democratic senators who have raised the concern that if fraud is such a massive problem, why would the very divisions within the d.o.j.
▶ 1:20:23Sen. Hirono: That were in charge of prosecuting civil and criminal fraud, why were they disbanded? And again I mention going after crypto crime which is massive, going after tax fraud, also massive.
▶ 1:20:39Sen. Hirono: So one wonders, I think you can understand why a major concern of ours would be how independent your antifraud division will be when all these other divisions that were supposed to be prosecuting fraud and all of the experience that the attorneys there had, they get disbanded.
▶ 1:21:01Sen. Hirono: But you get created and your division, not you but your division will be followed by j.d. Vance. So it's kind of hard to understand how it is that you will be so independent of the president. We have a president who expects the people he nominates to do his bidding, including to let him do what he wants, including members of the U.S.
▶ 1:21:27Sen. Hirono: Supreme court. So in spite of the fact that the d.o.j. Mission statement, which I just checked on today, says that it is characterized by the values of independence and impartiality, it's hard for us sitting here to think that you can be all that independent.
▶ 1:21:50Sen. Hirono: So if the president, vice president, or any member of the white house, not to mention pam bondi, asks, suggests or hints to you to investigate any of the president's perceived enemies, would you do so? Yes or no?
▶ 1:22:13Mr. Mcdonald: Senator, respectfully, I disagree with much of what you asserted in the lead-up to that question. The professionals in the department of justice who are working on crypto-fraud for example are in the department of justice --
▶ 1:22:27Sen. Hirono: Excuse me. I am reclaiming my time. The lead-up to the question goes to the impartiality of this new division created to combat fraud. I think that there are enough concerns raised as to how independent you will be and I am just asking you if the president says go after so and so for fraud, would you do so?
▶ 1:22:52Mr. Mcdonald: Senator, as I was mentioning, the individuals who are doing crypto-fraud, that work is still ongoing within the department of justice.
▶ 1:23:00Sen. Hirono: You are not answering my question which says to me that sadly even though you have up until now been an impartial, I understand relatively impartial, nonpolitical, you are now placed in a highly politicized division and we already know that the president considers the department of justice to be his law firm, pam bondi to be his lawyer. You are down the chain.
▶ 1:23:24Sen. Hirono: I don't see how you sit there and tell us that you are going to be independent, much as you might want to be, but I have concerns about that. We have a president who accepted a multi, what is it, a $400 million plane from qatar? Does that sound to you like a bribe or fraud to you?
▶ 1:23:48Mr. Mcdonald: Senator, with respect to your prior question, I am a career federal prosecutor.
▶ 1:23:52Sen. Hirono: Try answering this question.
▶ 1:23:53Mr. Mcdonald: I am a career federal prosecutor. I follow the facts. I apply the law. Those are the two considerations that come into play for me in every case including in the great state of hawaii where I served as a special prosecutor on very significant cases and protected the community --
▶ 1:24:12Sen. Hirono: Reclaiming my time, you follow the facts, great. That's what we want. That's what I would expect a prosecutor to do. You apply the law. You prosecute people committing fraud, not doing the bidding of a president who will expect you exactly to do what he wants and to go after the people he considers his enemies. We know that. Thank you, Mr. chairman.
▶ 1:24:34Chair Grassley: Senator moody.
▶ 1:24:37Sen. Moody: Thank you, Mr. chairman. Thank you for being here. Thank you to your family for being here and supporting you. I know your dad appreciates you and appreciates you being here to back him up. I was once a federal prosecutor in a prior life, and there is nothing more inspiring to me every day than standing up in a courtroom and saying my name is ashley moody and I rep the united states of -- represent the united states of america. Thank you for your public service. Thank you for loving your country. Thank you for moving your family across the nation to serve in a different capacity.
▶ 1:25:07Sen. Moody: We all move in ways to serve our country in different capacities. I am living proof of that as the newest united states senator. Thank you to you and to your family. Easy question for you, and I know you will know this but I think it's important to remind others that the constitution does in fact require our president to take care that the laws are faithfully executed in this nation, does it not?
▶ 1:25:30Mr. Mcdonald: It does, senator.
▶ 1:25:33Sen. Moody: That is something that we the people expect of our executive head?
▶ 1:25:37Mr. Mcdonald: That's correct, senator.
▶ 1:25:39Sen. Moody: It's been interesting to me to hear in a nomination hearing to determine who should lead as an assistant deputy attorney general over fraud the objections to that. I have sat through hearings addressing fraud previously and heard from the other side of the aisle. There's always been fraud. There's always been fraud. Why are we talking about it now? And now I think the objection is why are we restructuring to focus on fraud?
▶ 1:26:10Sen. Moody: Why are we restructuring? Not questions pertaining to you and why this is so important, not only to the d.o.j. And the structure to focus on a very serious problem, but why this is important because we have never seen the magnitude of this level of fraud. So I am so glad to focus on that right now. In fact, you misspoke earlier and you kreked yourself, but -- corrected yourself but what you said was true.
▶ 1:26:38Sen. Moody: You said in cutting down on the mountain of debt and then you said excuse me, cutting down on the mountain of fraud but the amount of fraud that we see right now in terms of the amount of taxpayer money going to illegitimate recipients or criminals now exceeds the entire budget of the state of florida, the third largest state in the nation. It now exceeds most federal agencies and departments. Is that true?
▶ 1:27:07Mr. Mcdonald: Senator, I don't have the exact numbers, but I would take your point. It sure seems -- it's a huge number.
▶ 1:27:15Sen. Moody: If you misspoke and said cutting down on the mountain of debt, the more money we take from our citizens to fund their government that is supposed to be acting in their interests, not government itself. I know there is a debate on the fundamental principle of who government is supposed to protect first and foremost. I actually believe it's the american citizens. I know the other side of the aisle thinks differently. That was on full display last night.
▶ 1:27:43Sen. Moody: But if in fact the goal is to make sure that taxpayer money is being used in a way that is responsible and accountable to we, the people, restructuring the d.o.j. When fraud has now eclipsed 10% of our federal outlay according to estimates, that seems to be a no-brainer. In fact, it seems to be a responsibility that we should all own and deliver for the american people that are trusting us. Would you agree?
▶ 1:28:15Mr. Mcdonald: I absolutely agree. We must be good stewards of the generosity of the american taxpayer.
▶ 1:28:22Sen. Moody: That is going to the primary responsibility of this new division, is that correct?
▶ 1:28:27Mr. Mcdonald: Finding the fraud that's occurring against taxpayer funded programs and making sure that every dollar that's dedicated to these programs actually makes it to its intended beneficiaries.
▶ 1:28:40Sen. Moody: The other side of the aisle keeps saying they're concerned that you may be in some way communicating with or talking to the white house specifically designated the vice president vance to address fraud because it is now surging in this nation, placing debt on generations to come, because we are giving it to criminals.
▶ 1:29:05Sen. Moody: If in fact the constitution requires that the president takes care that the laws be faithfully executed, it would be a dereliction of duty if they did not ensure that we stop this fraud, is that correct?
▶ 1:29:16Mr. Mcdonald: I agree with that, senator.
▶ 1:29:20Sen. Moody: You will be reporting directly to the deputy attorney general and the attorney general as you build out this new division, is that correct?
▶ 1:29:28Mr. Mcdonald: That's correct. The department of justice has promulgated the new organizational chart which shows that this a.a.g. Position functions like the other 10a.a.g. Positions reporting to the deputy attorney general.
▶ 1:29:41Sen. Moody: I for one commend you for taking on this new responsibility. I told you I will call you the fraud czar. I called for that months ago. We need that in this country. That's your new nickname. Good luck to you. Thank you for answering the call to serve.
▶ 1:29:54Mr. Mcdonald: Thank you, senator.
▶ 1:29:57Chair Grassley: Senator hawley.
▶ 1:29:58Sen. Hawley: Thank you. Congratulations on your nomination. It comes not a moment too soon. Two weeks ago, the c.e.o. Of lexus told me under oath the federal government loses $1 trillion per year to fraud, $1 trillion. That's more than the entire defense budget for this year. More conservative estimate, the g.a.o.'s estimate is the federal government loses about $521 billion to fraud every year.
▶ 1:30:26Sen. Hawley: That's about the budget of the department of veterans' affairs. Either way we are talking about just enormous amounts of course, we have seen it on display in states like minnesota. My question is are we going to see more accountability coming for the fraud that has been perpetrated on this country particularly in places like minnesota? Is accountability coming?
▶ 1:30:48Mr. Mcdonald: Senator, our goal will be to bring accountability. It will not be easy but we will work tirelessly to bring that accountability to ensure that the fraud that we are seeing annually is erased.
▶ 1:31:02Sen. Hawley: Let me give you one example of the accountability we need to see. The attorney general of the state of minnesota was in front of a committee of mine and under oath a couple of weeks ago, Mr. ellison is right at the center of the somali fraud scandal. A group called feeding our future as you probably know defrauded the federal government of at least $250 million. $250 million that did not go to feed the homeless. It did not go to feed the poor.
▶ 1:31:34Sen. Hawley: It did not go to feed children. It bought yachts, luxury planes, vacations. It was smuggled out of the airport in suitcases. 12,000 pounds of $100 bills smug you willed out of the minneapolis airport in suitcases. 60 people have been charged with wrongdoing as part of this corruption scheme but here is the deal. The leaders of this organization, this fraud outfit, came and met with the attorney general directly.
▶ 1:32:04Sen. Hawley: They talked to him for 54 minutes. This is back in 2021 and complained to him that they were being investigated heaven forbid. He offered to help them. They repeatedly offered him campaign contributions and we know this because they recorded the meeting. 54 minutes of recording that we have because the fraudsters recorded the meeting. Ellison tried to deny it. It's all on tape.
▶ 1:32:29Sen. Hawley: They offered him money preetedly and he says things like -- we may have a poster of it. He says we are in the middle of a battle with agencies now who are vegging them. He says walz, meaning the governor, agrees with me that this stupid stuff running small people out of business is terrible. Stupid stuff meaning investigation for mass fraud.
▶ 1:32:53Sen. Hawley: He goes on to say, just to be able to say getting the question, just getting the inquiry from the attorney general is sometimes enough to make people knock it off. In other words, he offered repeatedly to help them get rid of the investigations that were ongoing into this group even as they were sitting there.
▶ 1:33:10Sen. Hawley: He said to them, I am directing my staff right now to intervene on your behalf and then just days after he met with them he took $10,000 in campaign contributions, including from individuals who were indicted by the federal government for fraud. He has been charged with nothing. In fact, he sat where you are sitting under oath and he denied to me that he took any money at all. I've got it right here.
▶ 1:33:39Sen. Hawley: It's in his campaign finance reports. $10,000 including from indicted individuals and others who are associated with this group, members of this group that defrauded the federal government of $250 million. Are regoing to see accountability for people like that?
▶ 1:33:55Sen. Hawley: Are we going to see heads roll for people who are in the middle of this fraud and protected the fraudsters and defended it and used their office in order to help people get away with crimes?
▶ 1:34:12Mr. Mcdonald: Senator, first that is not how law enforcement is supposed to work when they're digging into potential crime to have lead law enforcement try to close up that shop and turn away the investigators. That's not how law enforcement is supposed to work and not how it's going to work in the department of justice in the national fraud enforcement division.
▶ 1:34:37Mr. Mcdonald: The vision we have is a division that is large enough where no fraud is too big and no fraud is too small so that we can reach all actors within the chain of criminal culpability and no one more than that, only those within the chain of criminal culpability. Those are the ones that we are going to be looking after, investigating, and following the facts without fear or favor. >> good. I think it's absolutely vital. You said no fraud is too big or small.
▶ 1:35:06Mr. Mcdonald: I theme will also mean that no elected official is too big or too small because those who helped enable this fraud, they should be prosecuted too. If we don't get accountable, as you know, this will never stop. We need accountability now.
▶ 1:35:24Chair Grassley: Senator welch.
▶ 1:35:26Sen. Welch: Thank you, Mr. chairman. I think all of us are absolutely outraged by fraud. We want to get to the bottom of it and more power to you. Everything that senator hawley said I agree with. So I don't think there is a dispute about that. One of the concerns that I have is the erosion of the sense of impartiality in the justice department. There are counteraccusations on each side.
▶ 1:35:51Sen. Welch: It's become a partisan issue here but my understanding is that there was a weaponization working group and I think senator durbin asked you about this. But my understanding -- first of all, thank you for coming in to my office and we had a very good visit. Let me acknowledge that and appreciate the career that you have had. But the weaponization working group is something I want to ask you about. My understanding is that you were a part of that?
▶ 1:36:20Mr. Mcdonald: Senator, first let me say thank you for welcoming me yesterday. It was a pleasure to be with you and my family is going to be enjoying the treat from your home state over the weekend. Thank you for that. >> the treat was vermont maple syrup. Keep him on my good side. You may be next.
▶ 1:36:43Mr. Mcdonald: We look forward it a good pancake breakfast on saturday, senator. Senator, with respect to the weaponization working group, the president was right early in his term to identify and to commission the department of justice to look into instances of potential weaponization of the federal government under the direction of attorney general bondi, the department of justice has been doing that, has been looking into certain prior events so that we can learn from them, can learn from history and
▶ 1:37:15Mr. Mcdonald: Not repeat mistakes into the future.
▶ 1:37:17Sen. Welch: Let me be clear. I am appalled by the weaponization working group because everything that I hear from the president is that the people that he disagrees with become his political enemies, and then he uses the justice department to go after them. There is absolutely no place in our justice system for the department of justice to be doing that. Would you agree?
▶ 1:37:42Mr. Mcdonald: Senator, I think you may have misunderstood the work of the weaponization working group. The weaponization working group has been looking at instances of weaponization of the government during the biden administration.
▶ 1:37:56Sen. Welch: Be specific.
▶ 1:37:59Mr. Mcdonald: Senator, there is a list of different events and different matters that the attorney general has commissioned the department of justice to look into.
▶ 1:38:10Sen. Welch: Where is that list?
▶ 1:38:12Mr. Mcdonald: One of them would be the treatment of the president by the special counsel's office by doing things like dropping historical amounts of discovery on a criminal defendant and then pushing for very, very unreasonable trial dates and setting a criminal defendant on a path that did not allow for due process rights of the defendant to be followed and any career federal prosecutor who is before you, they will tell you if they're being honest
▶ 1:38:44Mr. Mcdonald: That what happened there with the scope of discovery and the timelines that those prosecutors were pushing, that that was not consistent with the principles of federal prosecution.
▶ 1:38:57Sen. Welch: Who won the 2020 election?
▶ 1:39:03Mr. Mcdonald: Senator, joe biden was certified president of the 2020 election and served four years in office.
▶ 1:39:10Sen. Welch: Who won the 2024 election?
▶ 1:39:13Mr. Mcdonald: Senator, president trump was certified as the winner of the 2024 election and is currently in office.
▶ 1:39:20Sen. Welch: You know I know that. So did joe biden not win but was certified?
▶ 1:39:30Mr. Mcdonald: Senator, I would refer to my prior answer to that question.
▶ 1:39:34Sen. Welch: I am asking you a different question. I am asking you whether it's your opinion that joe biden was certified but that he didn't actually win? That's the president trump point of view.
▶ 1:39:49Mr. Mcdonald: Senator, my answer was that joe biden was certified as president and served four years in office.
▶ 1:39:57Sen. Welch: That is not what I asked you. I asked you who won it? Not who was certified. Do you want to give me an answer on that?
▶ 1:40:06Mr. Mcdonald: Senator, I would refer to my prior answer.
▶ 1:40:09Sen. Welch: I yield back.
▶ 1:40:15Chair Grassley: Senator schmidt.
▶ 1:40:17Sen. Schmitt: Thank you, Mr. chairman. Mr. mcdonald, if confirmed you will be tasked with leading the d.o.j.'s efforts to investigate and remedy fraud affecting the federal government, is that correct?
▶ 1:40:28Mr. Mcdonald: Yes. Working with other partners within the d.o.j., yes, senator.
▶ 1:40:32Sen. Schmitt: That's great to hear. I do think that this issue of fraud and the epidemic is one of the most pressing issues we face as a country. Luckily we have a president who didn't just identify the problem last night. He declared war on fraud. I think that's exactly what this moment demands. What we are facing and you will be tackling is not just scattered misconduct. It's not bureaucratic inefficiency. It's not an accounting error.
▶ 1:41:02Sen. Schmitt: It's organized theft on a national scale. People scam the system. They saw vulnerabilities, they took advantage of it to the tune of billions of dollars. I think about the guy swinging the hammer, driving the truck who works his tail off and sends his money to washington, D.C. that goes out the door and you have a situation like in minneapolis where the somali community figured out a way to do it to the tune of billions. It's not limited just to that example, but I think it's a massive -- it's a tip of the iceberg that we have to address.
▶ 1:41:32Sen. Schmitt: So it could be that the federal government loses $1 trillion a year in fraud. If you think about it, if we got that under control for a decade, that would make a big difference. $1 trillion is $1 trillion and it adds up. This isn't abstract. This is money taken away from american workers. In a normal country, losing $1 trillion worth of fraud would trigger an emergency action.
▶ 1:42:03Sen. Schmitt: But in this town, it may trigger a hearing but after that, silence. I think that's where you come in and the work you are going to do with other federal prosecutors. I am glad that the president has tasked vice president vance to work with you and kind of help lead this effort and mobilize a national effort to take this on. I think president trump is changing the structure of article ii to go after fraud and not a moment too soon.
▶ 1:42:34Sen. Schmitt: Fraud today is industrial, it's coordinated, it exploits federal grants, welfare programs, immigration systems, medicare, medicaid, tax credits, subsidies, donor platforms and nonprofit pipelines. It's sophisticated. It's data driven. It moves faster than any bureaucracy that has been established. For far too long enforcing that has been reactive, hesitant.
▶ 1:42:59Sen. Schmitt: I can tell you as a former attorney general, this sort of pay and chase model doesn't work. I think that unfortunately, and I don't know why, only one party in this town seems to be concerned about it. This should be a bipartisan issue.
▶ 1:43:14Sen. Schmitt: I can't actually believe that it isn't, but yesterday when the president announced this historic effort, the other side sat stone faced, much like they did when the president asked a simple question, do you think the federal government is here to protect american citizens or illegal aliens? Stand up if you believe that. Republicans stood up. Democrats didn't. I actually can't believe that's where we are at right now. I can't -- but it's where we are at right now.
▶ 1:43:44Sen. Schmitt: You look at minnesota specifically, where efforts to crack down on fraud were met not with support but with accusations of fascism and racism. Fraud networks operate because they believe the risk is low and the reward is high. That's incentive structure and wars are fought by changing incentives and that's what rewith going to do with this war on fraud. My advice for what it's worth, be aggressive. Prosecute relentlessly.
▶ 1:44:13Sen. Schmitt: Recover the assets on behalf of the american people. I know you are up for the challenge. I was glad to see that an experienced person like you has been put in charge here. To my democrat colleagues, this shouldn't be partisan. Good lord. Your constituents in blue states pay taxes and they're being rimmed off too. I can't believe it. We all represent everybody in our states. This shouldn't be partisan.
▶ 1:44:41Sen. Schmitt: I think people expect -- there is something also in addition to the money that's at stake here, one final note. It's the trust of the american people. When that trust is eroded and people feel like there's no accountability for this stuff, people lose hope. They lose faith. They think that their vote doesn't matter. That's what I hear about a lot. They say what in the world are you guys doing up there when something like this happens and there is no consequences?
▶ 1:45:09Sen. Schmitt: Just briefly could you talk about your approach to this, how you see it, and how you intend to regain the trust of the american people?
▶ 1:45:18Mr. Mcdonald: Thank you, senator. Thank you for that advice. I would say the word relentless which you used, that word may just well become the motto of the national fraud enforcement division. We will be relentless. We will live every day with tenacity to follow the facts, to find where the fraud is occurring, and to do our absolute best to illuminate the criminal actors that are stealing from the american taxpayer.
▶ 1:45:47Mr. Mcdonald: I will be working -- what I will do is I will work with the entirety of the inspectors general community, with any willing partner to come together to put the best minds on this problem set to solve it, both with respect to the security protocols on the front end, to ensure that the money does not go out the door where it shouldn't, but then on the back end with the department of justice of prosecuting those who are in fact engaged in the fraud. It will take a whole team effort and I enjoy building teams.
▶ 1:46:18Mr. Mcdonald: I enjoy building processes and systems to ensure that the attorney in the courtroom has all of the resources and the foundation in place to do well and be confident to represent the united states in court. I enjoy building teams and doing that work. That's what I will do in this new position if confirmed. >> wish you all the best. Godspeed to you.
▶ 1:46:41Chair Grassley: Before senator schiff, it looks like we are just about done here. Senator schiff has got five minutes so anybody else that's here in the next five minutes, otherwise we will adjourn the meeting. Senator schiff.
▶ 1:46:55Sen. Schiff: Thank you, Mr. chairman. Mr. mcdonald, were you part of the d.o.j.'s weaponization working group?
▶ 1:47:04Mr. Mcdonald: Senator, as referenced earlier in some questioning during the hearing today, the weaponization working group has commissioned by the president -- >> simple yes or no will do. Were you part of the weaponization working group?
▶ 1:47:17Mr. Mcdonald: Senator, as I referenced earlier in questions before the panel, the weaponization working group as commissioned by the president and then the attorney general --
▶ 1:47:32Sen. Schiff: From you -- were you involved with the weaponization working group or not? It's a simple question. You were either involved or not. Yes or no, Mr. mcdonald?
▶ 1:47:42Mr. Mcdonald: Senator, as -- >> are you refusing to -- I am not interested in what you referenced earlier. I am asking you a simple question right now, not earlier but right now. Were you part of the weaponization working group at justice, yes or no?
▶ 1:47:53Mr. Mcdonald: Senator, as I referenced earlier -- >> you are not going to answer the question.
▶ 1:47:58Mr. Mcdonald: With the right to -- >> you won't answer a simple question. Let me ask you a different question. Do you believe that members of the weaponization working group need to abide by the justice department manual? Yes or no?
▶ 1:48:15Mr. Mcdonald: Senator, as a career federal prosecutor, I am very familiar with -- >> I get you are familiar with it. I am glad you are. Do you feel the manual applies to people in the weaponization working group? Do they have to abide by it? Yes or no?
▶ 1:48:32Mr. Mcdonald: Senator, as you know -- >> why is that a difficult question for you to answer? Do you believe that members of the weaponization working group have to abide by ethical practices?
▶ 1:48:43Mr. Mcdonald: Senator, all department of justice employees every day --
▶ 1:48:49Sen. Schiff: I am asking a specific question, about employees in the weaponization working group. Do they have to abide by the justice department manual? Yes or no?
▶ 1:49:02Mr. Mcdonald: Senator, all department of justice employees -- >> so that's a yes?
▶ 1:49:07Mr. Mcdonald: Operate with provisions of the justice manual.
▶ 1:49:09Sen. Schiff: Is that a yes?
▶ 1:49:11Mr. Mcdonald: I would refer you to the answer that I -- >> or is the working group something different? Are you suggesting that it's different, that it doesn't have to abide by the ethics manual, that it doesn't have to abide by ethics at all? Why are you refusing to answer a simple question?
▶ 1:49:27Mr. Mcdonald: Senator, I am not refusing to answer your question.
▶ 1:49:30Sen. Schiff: Do the members of the working group have to abide by the justice department manual?
▶ 1:49:36Mr. Mcdonald: Senator, as I referenced -- >> I am not interested in what you -- in your previous answers. You can't answer a simple question or you won't, which leads me to suspect you believe they don't have to abide, to live up to the standards of the justice manual. Let me ask you a different question. In your time working with this group, did you ever observe and did the other members of the weaponization working group violate the justice department manual, yes or no?
▶ 1:50:07Mr. Mcdonald: Senator, the weaponization working group has been working to I will lime naught -- illuminate the fact. >> did you observe members of the working group or did you yourself violate the justice department manual?
▶ 1:50:22Mr. Mcdonald: Senator, as referenced in -- >> are you refusing to answer that question? Let me ask you another question. Did you witness members of the weaponization working group mishandle grand jury material?
▶ 1:50:41Mr. Mcdonald: Senator, as I referenced earlier -- >> I am not interested in what you referenced earlier.
▶ 1:50:45Mr. Mcdonald: Working to understand -- >> Mr. mcdonald --
▶ 1:50:49Mr. Mcdonald: Facts and events underlying significant weaponization.
▶ 1:50:52Sen. Schiff: Mr. chairman? Mr. chairman? I am asking for a simple question. I would ask your help in getting a direct answer. I have asked the witness whether he believes members of the weaponization working group at the justice department need to abide by the justice department's own justice manual. Would you assist me in getting an answer to that question?
▶ 1:51:15Chair Grassley: I will not assist you.
▶ 1:51:18Sen. Schiff: You have the chairman's support in not answering the question so let me try another question or see if I can get clarity again. Did you ever witness any of the members of the working group violate rules regarding grand jury secrecy? Yes or no?
▶ 1:51:35Mr. Mcdonald: Senator, as I referenced in my prior testimony, the weaponization working group working dill gentsly to -- >> let me ask you one last question and see if you are willing to answer it.
▶ 1:51:47Mr. Mcdonald: In the biden administration.
▶ 1:51:49Sen. Schiff: Did you witness anyone in the weaponization working group violate the law? Yes or no?
▶ 1:51:56Mr. Mcdonald: Senator, I would refer you to my prior answer.
▶ 1:51:59Sen. Schiff: Your prior answer was to obfuscate and it's become very clear you are unwilling to answer very simple questions because it's very clear what that weaponization group is all about and that is using the awesome powers of the department of justice to go after the president's enemies. I yield back, Mr. chairman.
▶ 1:52:18Chair Grassley: Senator schiff, maybe I gave a short answer to your question, but I have never been asked that I can recall the same question you asked me, and I think it's quite appropriate that I say that it's between the two senators or the senator and the questioner to answer.
▶ 1:52:39Chair Grassley: Now, the meeting is adjourned as soon as I say thank you to the nominee for his testimony today, written questions for the record may be submitted until march 4 at 5:00 pl and we would ask that you answer them very expeditiously because until those questions get answered, we won't take up your nomination. Thank you very much. Meeting adjourned.
▶ 1:53:11Chair Grassley: [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit