An inmate stands in his cell at Men's Central Jail in Los Angeles, California October 3, 2012. REUTERS/Jason Redmond The Justice Department's Office of the Inspector General published Friday its annual report titled "Top Management and Performance Challenges Facing the Justice Department." The memo, which is 15 pages long, can be found online here and is worth reading. Not because it is particularly candid or revealing— these are lawyers writing about other lawyers, after all—but rather because we see in both the light and in the shadows of this document so much of what has animated this busy year at the intersection of law and politics.

Interspersed here are quotes from an interview I conducted by telephone Friday with the inspector general himself, Michael Horowitz, who offered to explain as best he can the memo he vetted, signed and delivered up to the world. I'll offer these in the order in which they appear in the memo, although I suspect that "Growing Crisis in the Federal Prison System," which is the title of the first section of the memo, won't get nearly as much attention as will subsequent sections about civil liberties and federal mismanagement.

As you go through the report, and even this summary of it, remember that the Inspector General's office is, even in Horowitz's words, "not in the business of... recommending particular policies" for the Justice Department. It serves to react, as a watchdog, to bark about what merits barking about. In this respect, it's like a judge who will not render an "advisory opinion" without a live case or controversy before her. The function of the OIG, by statute and by tradition, is essentially to tell the Justice Department what its employees are doing wrong instead of telling them precisely how to do things right.

Prisons

It is a very good thing indeed that the OIG now is focused upon the "growing crisis" in our federal prisons. We've been chronicling that crisis for years, often in heartbreaking terms, here at The Atlantic. Maybe one day, when enough powerful people focus upon it, Washington will actually fix the problem. As Horowitz told me, this year-end memo has been produced for many years but the topic of prisons didn't make the list until last year. This year, it's in the first spot (though, he added, the items are not necessarily ranked by priority).

The first part of the prison crisis is financial and the math behind it is relatively simple: the number of federal inmates has increased dramatically over the past few years while the government funding available to safely house those federal inmates has decreased. "It's a zero sum game," Horowitz says. "Every dollar spent on prisons is a dollar that is going to come from somewhere else in the Department. That forces leadership to look hard at what tools it has."

From the report:

After enjoying an increase in its discretionary budget from $21.5 billion in fiscal year (FY) 2001 to $28.9 billion in FY 2011, the Department’s discretionary budget decreased in FY 2012 to $28.3 billion, and by 10 percent in FY 2013 to $25.5 billion. During this same period, the prison population in the Federal Bureau of Prisons’ (BOP) facilities grew from about 157,000 inmates in FY 2001 to about 219,000 inmates presently.

The second component of the federal prison crisis is the lack of workable ideas offered up so far to ease the crisis by reforming the system. Remember when we all were so encouraged back in August after Attorney General Eric Holder announced a series of sentencing reforms he said would safely decrease the federal prison population? Well, Horowitz and company at the OIG don't seem to think much of that plan, at least this part as presently constituted. From the report:

[T]his policy change is unlikely to have a significant short-term impact on prison costs because defendants who qualify for this relief are still likely to face some period of incarceration for their crimes. Whether the policy change will have a material long-term impact on prison costs remains to be seen since many of these same defendants, if they had been subjected to a mandatory minimum charge, might have qualified for the mandatory minimum “safety valve” that Congress created in 1994.

The third component of the crisis in our federal prisons is simply one of poor management. The Bureau of Prisons, and thus the Justice Department, are not adequately "managing and leveraging" existing programs, the report candidly concludes. For example, federal officials are not efficiently addressing the "increasing number of elderly inmates" within the system:

From FY 2010 to FY 2013, the population of inmates over the age of 65 in BOP-managed facilities increased by 31 percent, from 2,708 to 3,555, while the population of inmates 30 or younger decreased by 12 percent, from 40,570 to 35,783. This demographic trend has significant budgetary implications for the Department because older inmates have higher medical costs.

Nor are the BOP and the Justice Department transferring foreign national inmates out of federal prisons (to their native lands) as quickly as they should be, despite a 2011 OIG report that was sharply critical of the Department's lackluster use of the International Prisoner Treaty Transfer Program. In other words, Friday's report tells us, the BOP still isn't properly implementing its own program and losing an opportunity to efficiently and safely reduce the federal prison population.

Finally, the OIG criticized the pace of one of the other "reforms" that Attorney General Holder touted so loudly this summer. The "compassionate release" program, in which inmates who clearly don't pose a security threat are permitted to leave prison, should be a no-brainer. And it has bipartisan support. And yet the OIG reveals that the Justice Department has failed or refused for a number of years to adequately implement the program, revising its policies on the same day that the OIG issued a report critical of those very policies. From the report:

The BOP’s compassionate release program, which allows the Department to release inmates under extraordinary and compelling conditions, also could provide some budgetary relief for the BOP. However, an OIG review earlier this year found that the program was badly mismanaged and that better administration of the program would inevitably result in cost savings to the BOP and help the BOP address its capacity problems.

Listening to Horowitz explain the OIG's emphasis on federal prisons, it's clear that he's trying, as diplomatically as possible, to raise the alarm about the lack of progress the Justice Department—and specifically the BOP—has shown in reacting to the changing dynamics of the inmate population. "Even though the Department since 2006 has been identifying prison overcrowding and prison capacity as a material performance weakness," he told me, "over that seven year period, the numbers haven't improved, they've gotten arguably worse, and are on the path... to continue to get worse in the years ahead."

Something's gotta give. One solution, Horowitz says, is for Congress to simply appropriate more money for prisons. Another is that "the Department and Congress can agree on legislation that can alter various statutes." (And, indeed, that is happening). The memo, however, is designed to focus the executive branch's attention to "what exists today. The Department does have some ability to have an impact on this current situation," he says, whether it's at the charging stage in a criminal case, the sentencing stage of such a case, or upon inmates who already are in the system.

But there are limits to how far the OIG is able and willing to go in criticizing the Justice Department and its Bureau of Prisons. There are limits to where it has gone in 2013. And the report is a good reminder of where those limits are. For my money, the most disturbing revelations this year about our prisons regard the ways in which mentally ill federal inmates are being mistreated and abused. What did Horowitz and company say about that? Not nearly enough. Just this single bureaucratic passage in which the OIG linked mental illness with solitary confinement:

Finally, the Department’s efforts to ensure the safety and security of its prison and detention facilities must address the challenges relating to the mental health of its inmates and the impact of correctional approaches such as solitary confinement on inmates’ mental health and recidivism rates.

For example, a July 2013 GAO report recommended that the BOP improve the timeliness of its internal reviews relating to mental health services, develop a plan to evaluate treatment programs, and update its formal policies related to mental health services. In February 2013, the BOP also stated its intention to hire an independent auditor to assess its use of solitary confinement, and that review is now underway.

The OIG intends to monitor the BOP’s actions closely, including its responses to the GAO’s recommendations and the results of the study of its use of solitary confinement, and will conduct additional work in this area as appropriate

National Security v. Civil Rights and Liberties

It is this section of the report that may generate the most attention, but I'm not sure it offers the most insight. The Justice Department, don't forget, is a full, vested partner in the Obama Administration's zealous approach to domestic surveillance. And much of whatever criticism the OIG has made to the Department is classified. So we can't tell if the dog is barking or not—and even if it is barking we wouldn't be allowed to hear it, anyway. This reality—this lack of transparency—has created in 2013 a section of the report that offers a litany of statements that are ironic, if not self-parodic, including this one at the end of the first paragraph:

Recent disclosures concerning the government’s data collection and surveillance processes have sparked public debate over mass surveillance and government secrecy, and in so doing have underscored the difficulty of operating national security programs while also respecting the public’s expectations of privacy, a key civil rights and liberties concern.

It's important to remember here that the OIG isn't an ombudsman for the American people. The client here, in the end, is the Justice Department-- when the OIG barks it barks in the direction of the Attorney General. So the OIG is more concerned here about how best to enable law enforcement officials of all stripes to share surveillance information with each other than with protecting the privacy rights of individuals whose information is to be shared.

"[I]n response to OIG audits," the report states for example, "the Federal Bureau of Investigation’s (FBI) has implemented new policies and procedures to better ensure that the terrorist watchlist is complete, accurate, and current. We are conducting a follow-up audit to assess the effectiveness of the FBI’s most recent efforts in this area." Follow-up audits are always good, right? But then, boom, another classic bureaucratic sentence:

Technological advances, particularly in the realm of communications technology, have vastly increased the amount of data potentially available to law enforcement agencies, thereby compounding the difficulty of ensuring that relevant information is identified and shared among law enforcement entities in a timely and actionable manner.

You get the idea. The OIG knows a great deal about the nation's surveillance efforts, and the ways in which the Justice Department is or is not complying with applicable rules and regulations governing such surveillance, but if it were to tell us given classification procedures currently in place it would have to shoot us. But, still, the OIG nevertheless wants us to know that it is dutifully submitting classified oversight reports to Congress, and to Justice Department officials, the very same officials it is permitted by law to be exercising oversight over.

And Horowitz himself also dutifully wants you to know that if it were up to him these reports would be declassified—made public. "We want all of our stuff public," he told me, not just past reports but the gist of three national security reports that are nearly done and will be passed along to federal officials in the coming months. "I'd like nothing better than to have the public be able to see our reports," Horowitz says. "Obviously we don't want to do anything to harm the national security in releasing them but we do want to make sure that classification decisions are made carefully."

Reading this section of Friday's report one feels like that one person at the party who unlike everyone else isn't in on the secret. The section concludes with this pablum:

Additional concerns about civil rights and liberties are likely to arise in the future. For example, significant public attention has been paid to programs authorizing the acquisition of national security information, but relatively less has been paid to the storing, handling, and use of that information.

Yet after information has been lawfully collected for one investigation, crucial questions arise about whether and how that information may be stored, shared, and used in support of subsequent investigations. Similar questions arise about the impact on civil rights and liberties of conducting electronic searches of national security information and about whether and how information obtained in a national security context can be used for criminal law enforcement.

As the Department continues to acquire, store, and use national security information, these issues will arise more and more frequently, and the Department must ensure that civil rights and liberties are not transgressed.

Mismanagement and Misuse

There is little that is extraordinary in this section. The OIG is against "wasteful and ineffective spending," which is good to hear, and investigators in 2013 saved the American people millions of dollars through successful audits. The Justice Department, we learn for example, "has not configured its travel booking system to ensure that employees on official travel select the most cost-effective airfare available, and that it can continue to reduce travel contractor fees by maximizing the use of its online booking system." And so on.

The one part here that struck me, however, was the OIG's references to the need to speed up the pace of collecting "assets and forfeitures" in order to raise additional money for the federal government. Who can be against that, right? Yet anyone who read Sarah Stillman's New Yorker piece in August on civil forfeitures ought to shudder at this passage from the report:

But securing a financial judgment is not enough. The Department must also use all available tools to recover money owed to it, and it must ensure that the recovered money is wisely spent. In FY 2012, the U.S. Attorneys’ Offices (USAO) collected $13.2 billion in criminal and civil actions, more than double the amount collected in FY 2011. However, at the end of FY 2012, an additional $23 billion was owed to the United States, including $18 billion in criminal fines and $5 billion in civil debts.

The OIG is right to be looking closely at the ways in which many forfeitures take place. The incentives that surround them, as Stillman chronicled, often are perverse; law enforcement officials have a financial motive to apprehend people, often without probable cause, and then essentially force them to pay restitution or fines that end up paying for law enforcement assets. Much of this occurs at the state and local level—but that doesn't mean the Justice Department ought to turn a blind eye about what's happening.

Cybersecurity

The OIG memo is clear—as I suspect all such government memos are making clear these days—that the Justice Department's cybersecurity must be enhanced significantly to protect secret information from being pirated through an increasing number of sophisticated means. Fair enough. But in the middle of this section there is the following paragraph, about "insider threats," with all it says about Edward Snowden and Bradley Manning and all it portends for the future:

In addition to preventing, deterring, and responding to cybersecurity incidents, the Department must establish effective internal network defenses to protect its own computer systems and data.

Of particular concern are insider threats, and in March 2012 the Department established a working group to create an insider threat prevention and detection program to deter, detect, and mitigate actions by employees and contractors who may represent a threat to national security.

The OIG is participating in this working group to ensure, among other things, that suspected incidents of insider threats are appropriately reported to the OIG for possible investigation.

It will be fascinating to see how the OIG balances its traditional watchdog function with the concerns the report expresses here. The vital line between "whistleblower" and "insider threat" is still a very murky one, isn't it, as we end the first year of the Age of Snowden? And the Justice Department has not exactly handled itself with great aplomb recently in its treatment of reporters who traffic in government sources. Watchdogs should be careful not to bark at other watchdogs.

Effective and Efficient Law Enforcement

This section is two-pages long but all I see in it is another litany of complaints about the ATF, the rogue federal law enforcement agency about which I have recently written. So there is this from the Report:

A fundamental but persistent challenge in this area is ensuring that each Department law enforcement component has a clear mission and policies that incorporate best practices from across the law enforcement community. The OIG’s reviews continue to identify instances in which this does not occur.

And then there is a passage about the results of the OIG's work on the Fast and Furious scandal. The OIG has recently initiated its one-year follow-up review that will assess whether and to what extent the ATF adequately responded to the OIG's reform recommendations made last year after the gun-running scandal was exposed. There is little reason to think that review is going to be laudatory. The ATF is still engaged in conduct that is questionable, at best. So in the report there is this:

Additionally, our September 2013 report on ATF’s income-generating undercover operations found that ATF did not properly authorize, manage, or monitor these investigations. The OIG found that none of the 35 investigations that had been approved by ATF and the Department fully met ATF’s policy requirements for approval. For example, none of the 35 investigations had been reviewed by ATF’s Undercover Review Committee as required by ATF policy.

We also identified one income-generating undercover operation that did not receive the required prior approvals. Further, ATF misused the proceeds from these investigations and failed to properly account for cigarettes purchased as part of them. Among the problems we found was ATF’s inability to reconcile the disposition of 2.1 million cartons of cigarettes with a retail value of more than $127 million.

These disconcerting issues have nothing to do with additional allegations against the ATF, including some made last weekend by the Milwaukee Journal Sentinel, that federal agents are using mentally disabled people as pawns in undercover storefront sting operations. Horowitz is closely watching that troubling story, too, and one suspects that the ATF will soon be asked, if it hasn't been asked already, to answer a simple question: how could this scandal occur in the wake of systemic reforms the ATF was supposed to implement last year as a result of the Fast and Furious scandal?

In other words (and these are my words and not the words of Horowitz or the OIG), the ATF has gone rogue in so many ways the OIG can barely keep up with the problems. If this report does nothing else, let it convince President Obama, and Eric Holder, and every reasonable member of Congress, that the ATF's house needs immediately to be cleaned, from top to bottom, so that this egregious conduct does not keep occurring, year after year. The OIG has given the Justice Department, and the White House, plenty to work with.