[Senate Hearing 105-516]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 105-516
                                                          Part III & IV

 
  THE SAFETY OF FOOD IMPORTS: FRAUD AND DECEPTION IN THE FOOD IMPORT 
  PROCESS--PART III AND IMPROVING THE SAFETY OF FOOD IMPORTS--PART IV

=======================================================================

                                HEARINGS

                               before the

                               PERMANENT
                     SUBCOMMITTEE ON INVESTIGATIONS

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                            PART III AND IV


                               __________

                     SEPTEMBER 10, 24 AND 25, 1998



      Printed for the use of the Committee on Governmental Affairs


                     U.S. GOVERNMENT PRINTING OFFICE
51-562 CC                    WASHINGTON : 1999

_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402




                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOHN GLENN, Ohio
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas                DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI,
DON NICKLES, Oklahoma                  New Jersey
ARLEN SPECTER, Pennsylvania          MAX CLELAND, Georgia
             Hannah S. Sistare, Staff Director and Counsel
                 Leonard Weiss, Minority Staff Director
                       Lynn L. Baker, Chief Clerk

                                 ------                                

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                   SUSAN M. COLLINS, Maine, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOHN GLENN, Ohio
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SAM BROWNBACK, Kansas                JOSEPH I. LIEBERMAN, Connecticut
PETE V. DOMENICI, New Mexico         DANIEL K. AKAKA, Hawaii
THAD COCHRAN, Mississippi            RICHARD J. DURBIN, Illinois
DON NICKLES, Oklahoma                ROBERT G. TORRICELLI, New Jersey
ARLEN SPECTER, Pennsylvania          MAX CLELAND, Georgia
           Timothy J. Shea, Chief Counsel and Staff Director
                 David McKean, Minority Staff Director
                 Pamela Marple, Minority Chief Counsel
                     Mary D. Robertson, Chief Clerk




                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Collins...........................................1, 35, 73
    Senator Levin................................................ 3, 66
    Senator Lieberman............................................ 6, 38
    Senator Durbin............................................7, 49, 86
    Senator Domenici.............................................    14
Prepared statement:
    Senator Akaka................................................   141

                               WITNESSES
                      Thursday, September 10, 1998

Lawrence J. Dyckman, Director, Food and Agriculture Issues, 
  Resources, Community, and Economic Development Division, U.S. 
  General Accounting Office, accompanied by Keith Oleson and 
  Dennis Richards, San Francisco Regional Office, U.S. General 
  Accounting Office..............................................     8
Richard J. Hoglund, Deputy Assistant Commissioner, Office of 
  Investigations, U.S. Customs Service, accompanied by Philip 
  Metzger, Office of Field Operations, U.S. Customs Service......    11
``Mr. Broker'', Confidential Informant/Former Customs Broker.....    27

                      Thursday, September 24, 1998

Hon. Paul Coverdell, a U.S. Senator from the State of Georgia....    39
Hon. Barbara Mikulski, a U.S. Senator from the State of Maryland.    42
Hon. Edward Kennedy, a U.S. Senator from the State of 
  Massachusetts..................................................    45
Hon. Tom Harkin, a U.S. Senator from the State of Iowa...........    47
Hon. Raymond W. Kelly, Commissioner, U.S. Customs Service, 
  Department of the Treasury.....................................    51
Thomas J. Billy, Administrator, Food Safety and Inspection 
  Service, Department of Agriculture, accompanied by Mark Mina, 
  Deputy Administrator for Field Operations, and Margaret Glavin, 
  Deputy Administrator, Office of Policy, Development and 
  Evaluation.....................................................    53
William B. Schultz, Deputy Commissioner for Policy, Food and Drug 
  Administration, Department of Health and Human Services, 
  accompanied by Joseph Levitt, Director, Center for Food and 
  Applied Nutrition, and Gary Dykstra, Deputy Associate 
  Administrator, Office of Regulatory Affairs....................    55
Sanford A. Miller, Member, Committee to Ensure Safe Food From 
  Production to Consumption, National Academy of Sciences........    57

                       Friday, September 25, 1998

Timothy M. Hammonds, President and CEO, Food Marketing Institute.    75
Stacey A. Zawel, Ph.D., Director, Scientific and Regulatory 
  Affairs, Grocery Manufacturers of America......................    77
Dane T. Bernard, Vice President, Food Safety Programs, National 
  Food Processors Association....................................    79
Nancy Nagle, Ph.D., Senior Advisor for Food Safety, United Fresh 
  Fruit and Vegetable Association................................    82
Richard Levinson, M.D., Associate Executive Director for Programs 
  and Policy, American Public Health Association.................    95
Carol Tucker Foreman, Coordinator, Safe Food Coalition, 
  accompanied by Carolina Smith DeWaal, Director of Food Safety 
  for the Center for Science in the Public Interest on behalf of 
  the Food Safety Coalition......................................    96
Ruth Kava, Ph.D., R.D., Director of Nutrition, American Council 
  on Science and Health..........................................    99
Robert Hahn, Director, Legal Affairs and Research, Public Voice 
  for Food and Health Policy.....................................   100

                     Alphabetical List of Witnesses

Bernard, Dane T.:
    Testimony....................................................    79
    Prepared statement...........................................   196
Billy, Thomas J.:
    Testimony....................................................    53
    Prepared statement...........................................   154
Coverdell, Hon. Paul:
    Testimony....................................................    39
Dyckman, Lawrence J.:
    Testimony....................................................     8
    Prepared statement...........................................   109
Foreman, Carol Tucker:
    Testimony....................................................    96
    Prepared statement...........................................   229
Hahn, Robert:
    Testimony....................................................   100
    Prepared statement...........................................   244
Hammonds, Timothy M.:
    Testimony....................................................    75
    Prepared statement...........................................   188
Harkin, Hon. Tom:
    Testimony....................................................    47
    Prepared statement...........................................   145
Hoglund, Richard J.:
    Testimony....................................................    11
    Prepared statement...........................................   129
Kava, Ruth, Ph.D., R.D.:
    Testimony....................................................    99
    Prepared statement...........................................   241
Kelly, Hon. Raymond W.,:
    Testimony....................................................    51
    Prepared statement...........................................   147
Kennedy, Hon. Edward:
    Testimony....................................................    45
    Prepared statement...........................................   144
Levinson, Richard, M.D.:
    Testimony....................................................    95
    Prepared statement submitted by Mohammad N. Akhter, MD, MPH, 
      on behalf of the American Public Health Association........   221
Mikulski, Hon. Barbara:
    Testimony....................................................    42
    Prepared statement...........................................   142
Miller, Sanford A.:
    Testimony....................................................    57
    Prepared statement...........................................   180
``Mr. Broker'':
    Testimony....................................................    27
    Prepared statement...........................................   137
Nagle, Nancy, Ph.D.:
    Testimony....................................................    82
    Prepared statement with an attached letter...................   210
Schultz, William B.:
    Testimony....................................................    55
    Prepared statement...........................................   159
Zawel, Stacey A., Ph.D.:
    Testimony....................................................    77
    Prepared statement...........................................   194

                                APPENDIX

              Exhibit List for September 10, 1998 Hearing

* May be found in the files of the Subcommittee.

                                                                   Page

 1. GList submitted by the U.S. Customs Service of ``Highlighted 
  Investigations, Importation of Tainted Foodstuffs''............   248

 2. GGAO Report, FOOD SAFETY: Opportunities to Redirect Federal 
  Resources and Funds Can Enhance Effectiveness, August 1998, 
  GAO/RCED-98-224................................................     *

 3. GMemoranda prepared by Don Mullinax, Chief Investigator, 
  Stephanie Smith, Ph.D, Investigator, and Mary Mitschow, 
  Counsel, Permanent Subcommittee on Investigations, dated 
  September 8, 1998, to the Permanent Subcommittee on 
  Investigations' Membership Liaisons, regarding ``PSI Hearing On 
  Fraud and Deception In The Food Imported Process''.............   253

           Exhibit List for September 24 and 25, 1998 Hearing

 1. GMemoranda prepared by Don Mullinax, Chief Investigator, 
  Stephanie Smith, Ph.D., Investigator, and Mary Mitschow, 
  Counsel, Permanent Subcommittee on Investigations, dated 
  September 22, 1998, to the Permanent Subcommittee on 
  Investigations' Membership Liaisons, regarding ``PSI Hearing--
  Improving the Safety of Food Imports''.........................   265

 2. GMemorandum from the American Law Division, Congressional 
  Research Service, Library of Congress, dated September 21, 
  1998, to the Permanent Subcommittee on Investigations regarding 
  ``Safety of Imported Foods: Authority of the Food and Drug 
  Administration and U.S. Department of Agriculture, Food Safety 
  and Inspection Service''.......................................   319

 3. GCRS Report to Congress, The Safety of Imported Foods: The 
  Federal Role and Issues Before Congress, October 14, 1998, by 
  Donna U. Vogt, Analyst in Social Sciences, Science, Technology, 
  and Medicine Division, Congressional Research Service, Library 
  of Congress....................................................   339

 4. GLetter from Food and Drug Administration, Department of 
  Health and Human Services, dated September 15, 1998, to The 
  Honorable Susan M. Collins, Chairman, Permanent Subcommittee on 
  Investigations, regarding Food and Drug Administration's (FDA) 
  analysis of FDA's regulatory and legal authority for imported 
  foods..........................................................   379

 5. GFood Safety From Farm To Table: A National Food-Safety 
  Initiative, A Report to the President, May 1997, prepared by 
  the U.S. Department of Agriculture, the Department of Health 
  and Human Services, and the Environmental Protection Agency....   386

 6. GStatement for the Record of the Guatemalan High Level 
  Commission For Food Safety, ``Berry Production in Guatemala and 
  the Model Plan of Excellence--MPE''............................   441

 7. GList of industry and consumer organizations invited to 
  provide written statements for the record and August 13, 1998 
  letter of invitation of the Permanent Subcommittee on 
  Investigations.................................................   445

 8. GSubmission for the Record of the National Fisheries 
  Institute......................................................   448

 9. GSubmission for the Record of the National Restaurant 
  Association....................................................   458

10. GSubmission for the Record of the Association of Food and 
  Drug Officials.................................................   461

11. GSubmission for the Record of American Council of Independent 
  Laboratories (Attachments to submission retained in the files 
  of the Subcommittee)...........................................   466

12. GSupplemental Questions and Answers for the Record of Raymond 
  W. Kelly, Commissioner, U.S. Customs Service...................   468

13. GSupplemental Questions and Answers for the Record of William 
  Schultz, Deputy Commissioner for Policy, Food and Drug 
  Administration (FDA)...........................................   470

14. GSupplemental Questions and Answers for the Record of Thomas 
  J. Billy, Administrator, Food Safety and Inspection Service 
  (FSIS), Department of Agriculture..............................   474

15. GSupplemental Questions and Answers for the Record of Dr. 
  Sanford A. Miller, Committee to Ensure Safe Food From 
  Production to Consumption, National Academy of Sciences........   476

16. GSupplemental Questions and Answers for the Record of Dr. 
  Richard Levinson, Associate Executive Director for Programs and 
  Policy, American Public Health Association.....................   481


  THE SAFETY OF FOOD IMPORTS: FRAUD AND DECEPTION IN THE FOOD IMPORT 
                           PROCESS--PART III

                              ----------                              


                      THURSDAY, SEPTEMBER 10, 1998

                                       U.S. Senate,
                Permanent Subcommittee on Investigations,  
                  of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:33 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan 
Collins, Chairman of the Subcommittee, presiding.
    Present: Senators Collins, Domenici, Levin, Lieberman, and 
Durbin.
    Staff Present: Timothy J. Shea, Chief Counsel/Staff 
Director; Mary D. Robertson, Chief Clerk; Christopher A. Ford, 
Senior Counsel; Mary G. Mitschow, Counsel; Don Mullinax, Chief 
Investigator; Kirk E. Walder, Investigator; Stephanie Smith, 
Investigator; Eric Eskew, Investigator (Detailee, HHS-IG); 
Lindsey E. Ledwin, Staff Assistant; Pamela Marple, Minority 
Chief Counsel; Brian Benczkowski (Senator Domenici), Michael 
Loesch (Senator Cochran); Steve Abbott (Senator Collins); Pam 
Muha (Senator Specter); Patricia Dody (Senator Cochran); Tyler 
Wegmeyer (Senator Cochran); Chris Dockerty (Senator Thompson); 
Linda Gustitus (Senator Levin); Nanci Langley (Senator Akaka); 
Marianne Upton (Senator Durbin); Kevin Landy (Senator 
Lieberman); Myla Edwards (Senator Levin); and Maureen Barry 
(Senator Roth).

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Good morning. The Subcommittee will please 
come to order.
    Today, the Permanent Subcommittee on Investigations holds 
its third in a series of hearings on the safety of imported 
food. This morning, we will examine how fraud and deception in 
the food import process can allow contaminated and dangerous 
food into this country and onto the dinner tables of American 
families.
    At our first hearing in May, the General Accounting Office 
reported on the current state of the food import system and 
concluded that ``Federal agencies cannot ensure that the 
growing volume of imported food is safe for consumers.'' The 
GAO's findings represent a serious indictment of some Federal 
efforts to ensure the safety of imported food and are 
particularly critical of the Food and Drug Administration's 
inspections system.
    One of GAO's most disturbing findings, one of the findings 
that we will focus on today, is that ``weaknesses in controls 
over food imports enable entry of unsafe products'' into the 
United States. In other words, even if Federal inspectors 
discover contaminated food, effective controls are not in place 
to prevent these unsafe products from entering the American 
marketplace.
    The GAO reported that the FDA's system for controlling the 
importation of unsafe foods has a history of circumvention by 
unscrupulous importers. At our May hearing, we heard briefly 
about Operation Bad Apple, a recent Customs Service review of 
import procedures at the Port of San Francisco. The bottom line 
of that investigation is extremely troubling. Customs found 
that 70 percent of the food shipments that the FDA had ordered 
destroyed or reexported because they were unsafe actually 
entered U.S. commerce. The fact that the FDA inspects fewer 
than 2 percent of the 2.7 million shipments of food into the 
United States each year is in itself a cause for concern, but 
we now find that even if the FDA discovers contaminated food, 
there is a good chance that this unsafe food will end up in 
grocery stores and restaurants across America.
    Serious deficiencies in the FDA's inspection system allow 
some imported food--including contaminated and unsafe food--to 
be sold in domestic commerce before the FDA inspects or 
releases the shipments. In some cases, the importers simply 
sell the food before FDA is able to inspect or release it. In 
other cases, unscrupulous importers fail to reexport or destroy 
the unsafe products after they have been rejected by the FDA. 
The fact that the FDA does not take custody of suspect 
shipments facilitates the evasion of its orders, according to 
the GAO.
    After hearing the testimony from the GAO at our May 
hearing, I asked the agency, as well as the Subcommittee staff, 
to dig deeper into the weaknesses of Federal controls over 
shipments of imported food. I asked them to identify ways to 
strengthen these controls.
    In this regard, a key question that we will explore today 
is whether existing penalties provide a meaningful and 
sufficient deterrent or whether they are simply considered a 
cost of doing business. This hearing will examine the specific 
ways in which unscrupulous importers exploit weaknesses in the 
current system to evade food safety protections and consider 
possible options to improve controls over food imports.
    Our focus is on the deficiencies in the current system that 
allow fraud and deception to flourish. Fraud, as with criminal 
activity in general, occurs when two elements converge, motive 
and opportunity. Motive for criminal activity in most cases is 
the age-old vice of greed. The Subcommittee's initial 
investigation indicates that greater profit, the low risk of 
apprehension, and insufficient penalties provide the motive for 
unscrupulous importers to ship unsafe food into this country. 
Opportunity with respect to fraud in the food import process is 
the ability of unethical importers to exploit and evade the 
inspection process.
    When the current system gives criminals the opportunity to 
evade import controls and bring tainted food into our country, 
the impact is not merely monetary, as it is with most fraud-
related crimes. Here, the impact is far greater, affecting the 
health and safety of Americans who consume imported food. And, 
as we learned at our previous hearings, the very old, the very 
young, and the very ill are most at risk for foodborne 
illnesses that cause as many as 9,000 deaths in this country 
each year.
    To help us continue this important investigation, we will 
hear this morning from officials of the GAO who will present 
their findings from a review of import controls that I 
requested following our overview hearing in May. We will also 
hear from officials of the U.S. Customs Service, the first-line 
agency responsible for the inspection and handling of imported 
goods.
    Finally, we will hear this morning from an individual who 
operated on the inside of the food import business as a customs 
broker. He was recently convicted during a Customs Service 
criminal investigation and he has been cooperating with 
authorities in a special operation that resulted in the arrest 
and conviction of several individuals for importing unsafe 
foods into the United States.
    We look forward to hearing from our witnesses this morning 
so that we can identify the weaknesses in import controls and 
examine ways to close the loopholes used by unscrupulous 
importers.
    Americans enjoy having access to a wide variety of foods 
from around the globe throughout the year. Our goal is to 
ensure that America's food supply remains the safest in the 
world and that the growing tide of imported food does not swamp 
our already overburdened and ineffective food safety system.
    It is now my pleasure to recognize Senator Levin for any 
comments that he may wish to make.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Madam Chairman, for conducting 
this series of hearings on a very important subject. Your 
leadership is critically important to the Nation and we commend 
you for it.
    Ensuring the safety of the Nation's food supply, both 
domestic and imported, should be a top priority for Congress 
and for the country.
    We know that Americans are eating increasing amounts of 
imported food, especially imported produce. Statistics 
collected by the GAO reflect that Americans consume 50 percent 
more imported vegetables today than they consumed in 1980. 
These numbers reflect the increasing attention that we must pay 
specifically to ensuring that imported food is safe for the 
consuming American public.
    We looked earlier at Federal food safety programs in 
general. We learned that Federal inspection of imported foods 
today is inadequate. Enforcement is understaffed. Remedies for 
violations of the food safety laws are weak.
    The strain on Federal food safety inspection resources is 
obvious. In 1992, the FDA was able to inspect 8 percent of 
imported foods, but in 1997, it was able to inspect less than 2 
percent of imported foods. So our food safety inspection system 
is being overwhelmed, both by the amount of imports and by 
imports potentially contaminated with emerging pathogens, as 
well, that are unfamiliar to our food safety agencies. So we 
have got to update and strengthen the safety net for food that 
Federal agencies are supposed to provide to our people.
    The impact that one fraudulent actor, domestic or foreign, 
can have on the lives of innocent U.S. consumers was 
dramatically illustrated last year in Michigan when there was 
an outbreak of Hepatitis A. A food brokerage company that was 
based in California called Andrew and Williamson Sales Co., 
falsely certified to the U.S. Department of Agriculture that 
certain strawberries that it had were domestic food products. 
They did this knowing that the strawberries were grown in 
Mexico and then, therefore, were not eligible to be sold to the 
Federal School Lunch Program.
    But those tainted frozen strawberries were served in a 
school lunch program, and as a result, about 200 Michigan 
school children contracted Hepatitis A. Andrews and Williamson 
paid a $1.3 million civil penalty and about a third of a 
million in criminal fines. That is an unusually severe one, and 
appropriately severe. Too often, companies that do this are let 
off with a slap on the wrist or very little penalty at all.
    Today, we are going to examine a number of fraudulent 
schemes that are perpetrated by food importers. These schemes, 
according to the GAO, are more prevalent among importers who 
bring into the country foods for which the FDA has 
jurisdiction--fruit, vegetables, and seafood--than among 
importers of meat and poultry, over which the Department of 
Agriculture has jurisdiction.
    Limited resources, lack of direct authority to control or 
hold food shipments, and lack of effective deterrents seem to 
be the real issues in the fight against food importer fraud.
    Inspection personnel and resources are reduced while the 
number of imported food shipments continue to increase. The 
FDA, in contrast to the Federal Safety and Inspection Service 
of the Department of Agriculture, has no legal authority to 
require food importers to hold shipments in FDA-controlled 
warehouses pending release approvals. That should change.
    Finally, criminal remedies and bonding requirements, 
largely are the only relevant legal remedies, have proven 
totally ineffective, according to the GAO, because the 
possibility of criminal prosecution is too remote or because 
forfeited bond amounts are too insignificant to deter 
unscrupulous importers. It just is too profitable at the moment 
to engage in these schemes. We have got to take the profit out 
of it. Hopefully, these hearings and this testimony will help 
us take the profit out of fraud and out of the schemes which 
endanger the health of the American public.
    [The prepared statement of Senator Levin follows:]

                  PREPARED STATEMENT OF SENATOR LEVIN
    Thank you, Madam Chairman, for conducting this series of hearings 
on a very important topic of the safety of imported food. Ensuring the 
safety of the Nation's food supply--both domestic and imported--should 
be a top priority for Congress and for the country. In announcing the 
establishment of a Council for Food Safety, President Clinton recently 
said that we should all be committed to ensuring that the American 
people enjoy the safest possible food.
    We know that Americans are eating increasing amounts of imported 
food, especially imported produce. Statistics collected by the GAO 
reflect that Americans consume 50 percent more imported vegetables 
today than they consumed in 1980. These numbers reflect the increasing 
attention that we must pay specifically to ensuring that imported food 
is safe for the consuming American public.
    We started off this series of hearings by examining the Federal 
food safety system generally. At the first hearing, we learned that 
Federal inspection of imported foods today is inadequate: Enforcement 
is understaffed and remedies for violations of the food safety laws are 
weak. The strain on Federal food safety inspection resources is 
apparent. In 1992, the FDA was able to inspect 8 percent of imported 
foods, while in 1997, it was able to inspect less than 2 percent. Our 
food safety inspection system is being overwhelmed by both the amount 
of imports and by imports potentially contaminated with emerging 
pathogens that are unfamiliar to our food safety agencies. It is clear 
that the food safety net created by Federal agencies and existing 
Federal statutes needs to be updated and strengthened.
    Today we are examining instances of food importers--foreign or 
domestic companies that bring food into the United States--purposefully 
attempting to bypass U.S. food safety inspection laws. The direct 
result of this conduct, of course, is to release food into the U.S. 
food supply that has a significantly higher probability of being 
tainted and of sickening U.S. consumers. These companies are profiting 
at the expense of U.S. consumers.
    The impact one fraudulent actor--domestic or foreign--can have on 
the lives of innocent U.S. consumers was dramatically illustrated last 
year when an outbreak of Hepatitis A in my home state of Michigan 
occurred. A U.S. food brokerage company based in California called 
Andrew and Williamson Sales Co., falsely certified to the U.S. 
Department of Agriculture that certain strawberries it had were 
domestic food products. Andrew and Williamson did this, knowing that 
the strawberries were grown in Mexico and then, in order to sell the 
frozen strawberries to the Federal school lunch program.
    The tainted frozen strawberries were served in a school lunch 
program and as a result, about 200 Michigan school children contracted 
Hepatitis A. Andrew and Williamson paid a $1.3 million civil penalty 
and $350,000 in criminal fines and restitution for its conduct. The 
company was also debarred from selling to the U.S. Government for 3 
years. Its president was recently sentenced to 5 months imprisonment 
and 5 months home detention for his role in the affair, and paid a 
$13,000 criminal fine. In trying aggressively to make a sale of food, 
this company caused incalculable suffering for these Michigan victims.
    Today, we are going to examine a number of fraudulent schemes 
perpetrated by food importers. These schemes, according to the GAO, are 
more prevalent among importers who bring into the country foods for 
which the FDA has jurisdiction--fruit, vegetables, and seafood--than 
among importers of meat and poultry, over which the Department of 
Agriculture has jurisdiction. These importers, according to GAO, put 
U.S. consumers' health at risk by engaging in such schemes as 
substitution and port shopping. Some importers have come up with many 
ways to try to beat the U.S. inspection system.
    Limited resources, lack of direct authority to control or hold food 
shipments, and lack of effective deterrents seem to be the real issues 
in the fight against food importer fraud. Inspection personnel and 
resources are reduced while the number of imported food shipments 
continue to increase. The FDA--in contrast to the Federal Safety and 
Inspection Service of the Department of Agriculture--has no legal 
authority to require food importers to hold shipments in FDA-controlled 
warehouses pending release approvals. Finally, criminal remedies and 
bonding requirements, largely the only relevant legal remedies, 
according to GAO have proven ineffective, because the possibility of 
criminal prosecution is too remote or because forfeited bond amounts 
are too insignificant to deter unscrupulous importers. It is profitable 
for them to engage in these schemes.
    The FDA should have the authority to hold food shipments and the 
authority to select testing labs. We also need to strengthen the 
penalties available for engaging in this type of fraud: We need to 
increase bonding requirements or authorize civil penalties as well as 
criminal penalties for this type of behavior. Further, we need to 
provide food safety agencies, additional resources so that they can 
carry out their inspection duties. I was pleased that Senator Harkin's 
amendment in July to the Agriculture Appropriations bill which restored 
funds to the FDA and Department of Agriculture for inspection 
activities, as well as other food safety activities, was successful.
    We cannot let it pay for food importers to beat the U.S. import 
inspection system by fraudulent behavior at the expense of the 
consuming American public.
    I thank the witnesses for being here today and look forward to 
hearing their testimony.

    Senator Collins. Thank you very much, Senator Levin.
    Senator Lieberman, welcome.

             OPENING STATEMENT OF SENATOR LIEBERMAN

    Senator Lieberman. Thank you, Madam Chair. Thank you for 
holding another in this series of very important and, in the 
first instance, just plain informative hearings examining the 
safety of our imported foods.
    I am going to keep my remarks brief this morning, but I do 
want to emphasize how disturbed I was by the reading that I 
have done of the materials our staff has prepared for this 
hearing. At the last hearing in early July, we learned how an 
undetectable parasite hidden in the folds of a raspberry can 
cause an accidental outbreak of illnesses all across the 
country. Today, in contrast, we will hear that shameless food 
importers intentionally expose our population to dangerous 
foodborne illnesses.
    What kind of person, upon being informed that his shipment 
of food was unhealthy for human consumption, that it was 
rotting or already rotten or clearly contaminated with 
salmonella, would nevertheless conspire to have it admitted 
into our country, into our marketplace, and onto our dinner 
tables? Obviously, one who has no personal scruples and, 
therefore must be subject to the law.
    The schemes that we will hear about today will leave no 
doubt of these people's specific criminal intentions, nor of 
their underlying and all too common motivation, which is 
exactly what Senator Collins called it, greed, unlimited greed. 
Why are we not treating these malefactors as criminals, 
considering that their actions pose a genuine threat to public 
health?
    Well, as I read the record, in some cases, we are, but it 
appears that the Federal Government has neither a system in 
place nor the necessary resources to mount an effective defense 
against the fraudulent importation of unsafe foods. The FDA, 
for one, has clearly been overwhelmed as its responsibilities 
have increased with the enormous increase in foods imported 
into our country. I repeat the statistic that Senator Levin 
mentioned. The FDA can physically inspect only 2 percent of the 
imported food products for which it is responsible, which 
obviously means, conversely, that almost all of the imported 
food products which the FDA is charged with inspecting reach us 
uninspected.
    As the prepared testimony of today's witnesses 
demonstrates, even when the FDA conducts inspections, an 
importer wishing to evade the law can do so with the simplest 
and crudest of Ponzi schemes. He can just keep one untainted 
good shipment, which he presents to the FDA whenever the FDA 
tries to examine other suspect food products, and the FDA 
cannot tell the difference. Now, that is not much of an 
inspection system to protect American consumers.
    I was startled to learn in reading the materials for this 
hearing, that an importer who is supposed to be disposing of 
tainted food by shipping it out of the country under an order 
to do so can instead substitute garbage for the rejected food 
and release the food shipment into our markets with little or 
no fear of detection. Or an importer can simply step up and pay 
the small fines imposed by the law when he is caught as a cost 
of doing business and then continue to release his harmful 
products into the marketplace. This is an area where the law 
seems toothless, and, therefore, food consumers are protection-
less.
    I think the only reason why there is not more widespread 
outrage at this is that there is not more widespread knowledge 
of the current status of inspection. We actually have no idea 
how many thousands of untraced cases of food poisoning are 
caused by the legal loopholes that the system currently leaves 
unfilled.
    I thank you, Madam Chair, for playing a critical role here 
in bringing these food health and safety problems to our 
attention, and I also thank our witnesses for the work they 
have done and for appearing today. I am looking forward to 
their testimony. Thank you.
    Senator Collins. Thank you very much, Senator Lieberman.
    Senator Durbin, I would like to call upon you for any 
comments you might have.

              OPENING STATEMENT OF SENATOR DURBIN

    Senator Durbin. Thank you, Madam Chairman. I thank the 
panel that has joined us today and I will be very brief.
    I am happy that we are continuing this investigation into 
the question of food safety, particularly in imported food. As 
I have mentioned in previous meetings, it is a topic that I 
have been focusing on now for about a dozen years, and I think 
that the current system of inspection, as good as it is, can be 
dramatically improved.
    The testimony we are about to hear today is going to 
suggest some unscrupulous and, frankly, illegal conduct on the 
part of those who are exporting food to the United States. I 
hope that we will not only be shocked by this, I hope we will 
be moved by it to do something, to have more inspections, to 
have better inspections, to have effective enforcement and 
prosecution and real penalties.
    I hope when this is all said and done that this Congress 
will rise to the occasion and the Senate will lead in letting 
the word go out across the world that as the United States is a 
great opportunity for sales and a great marketplace, it is also 
a country that is very serious about its standards and its 
enforcement. We are going to protect the health of American 
consumers. We are going to put the cops on the beat, as needed, 
and we are going to enforce the laws stringently.
    Thank you, Madam Chairman.
    Senator Collins. Thank you, Senator Durbin.
    I am pleased now to welcome our first panel of witnesses 
this morning. The panel includes officials from the General 
Accounting Office and the U.S. Customs Service. The GAO is 
represented by Lawrence Dyckman, who is the Director of GAO's 
Food and Agriculture Issues Division. Accompanying him are 
Keith Oleson and Dennis Richards. I would like to compliment 
the GAO for its excellent work in this area and for its 
extensive cooperation with the Subcommittee.
    I would also like to welcome our Customs Service officials 
this morning. Mr. Richard Hoglund is the Deputy Assistant 
Commissioner for the Office of Investigations. He is 
accompanied by Mr. Philip Metzger, the Director of the Trade 
Compliance Team. The Customs Service plays a critical role in 
the enforcement of regulations concerning the importation of 
food.
    Pursuant to Rule 6 of the Subcommittee, all witnesses, as 
those of you who have been here before know, are required to be 
sworn in, so I would ask that you please stand and raise your 
right hand.
    Do you swear that the testimony you will give before the 
Subcommittee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. Dyckman. I do.
    Mr. Oleson. I do.
    Mr. Richards. I do.
    Mr. Hoglund. I do.
    Mr. Metzger. I do.
    Senator Collins. Thank you. Mr. Dyckman, we are going to 
start with you this morning. I understand that you are going to 
be presenting the GAO's testimony and the two gentlemen 
accompanying you will be available for questions.

    TESTIMONY OF LAWRENCE J. DYCKMAN,\1\ DIRECTOR, FOOD AND 
    AGRICULTURE ISSUES, RESOURCES, COMMUNITY, AND ECONOMIC 
     DEVELOPMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE; 
  ACCOMPANIED BY KEITH OLESON, SAN FRANCISCO REGIONAL OFFICE, 
   U.S. GENERAL ACCOUNTING OFFICE; AND DENNIS RICHARDS, SAN 
   FRANCISCO REGIONAL OFFICE, U.S. GENERAL ACCOUNTING OFFICE

    Mr. Dyckman. Thank you. Good morning, Madam Chairman and 
Members of the Subcommittee. Mr. Oleson and Mr. Richards are 
from our San Francisco Regional Office and they have spent 
several years reviewing food safety issues. I am new to the 
area, but I am very happy to be here today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Dyckman appears in the Appendix 
on page 109.
---------------------------------------------------------------------------
    We are pleased to be here today to testify on Federal 
agencies' efforts to prevent unsafe imported foods from 
entering the U.S. market. With the number of imported food 
shipments increasing, more than doubling over the past 6 years, 
ensuring the safety of these imported foods becomes even more 
challenging.
    As we reported to you in May, we found weaknesses in 
Federal agencies' controls over shipments of imported foods 
that allow unsafe foods to enter domestic commerce. In response 
to our earlier work, you asked us to obtain additional 
information on the extent to which Federal controls ensure that 
food importers present shipments for inspection when required 
and that refused shipments entry are destroyed or reexported. 
You also asked us to identify ways to strengthen these 
controls.
    In summary, FDA's current controls provide little assurance 
that shipments targeted for inspection are actually inspected 
or that shipments found to violate U.S. safety standards are 
destroyed or reexported. Importers, rather than FDA, retain 
custody over shipments throughout the import process. Thus, 
some importers have been able to substitute products targeted 
for inspection or for products that have been refused entry and 
were to be reexported or destroyed.
    Moreover, the U.S. Customs Service and FDA do not 
effectively coordinate their efforts to ensure that importers 
are notified that their refused shipments must be reexported or 
destroyed.
    Finally, Customs penalties for circumventing inspection and 
disposal requirements provide little incentive for compliance 
because they are too low in comparison with the value of the 
imported products or they are not imposed at all.
    As a result of these weaknesses, shipments that fail to 
meet U.S. safety standards were distributed in domestic 
commerce.
    As I indicated, unscrupulous importers can bypass FDA 
inspections. For example, in a San Francisco operation called 
Shark Fin, Customs and FDA found that importers had diverted 
trucks en route to inspection stations so that suspect products 
could be substituted with acceptable products. According to 
Customs investigators, the operations revealed that, among 
other things, six importers were sharing the same acceptable 
product when they had to present the shipment for inspection, a 
practice known as banking, or as Senator Lieberman pointed out, 
a Ponzi scheme.
    In a follow-up operation called Operation Bad Apple, 
Customs and FDA again found substitutions and other serious 
problems.
    Substitution problems occur after inspections, too, when 
importers are ordered to redeliver refused shipment for 
destruction or reexport. For example, during a 9-month period 
in New York, Customs found discrepancies, including instances 
of substitutions, in 31 of 105 refused shipments selectively 
examined.
    Several factors contribute to FDA's and Customs' problems 
in ensuring that targeted shipments are actually inspected and 
that refused entries are properly disposed of. First, unlike 
FSIS, under FDA's legislative authority, importers are 
generally allowed to maintain custody of the shipments 
throughout the import process, thus providing importers with 
the opportunity to circumvent controls.
    Second, again, unlike FSIS, which is part of the U.S. 
Department of Agriculture, imported food shipments under FDA's 
jurisdiction are not required to contain unique identification 
marks and FDA does not stamp products as ``refused entry''. 
This is a basic internal control which is lacking.
    Third, importers of FDA-regulated products are given 90 
days to reexport or destroy refused entries, and again, this is 
twice the amount of time the Department of Agriculture gives 
its importers. Obviously, with 90 days, an unscrupulous 
importer has more than enough opportunity to arrange for 
substitution.
    We also found that at five of the eight ports we examined, 
Customs and FDA do not effectively coordinate their efforts to 
ensure that importers are ordered to redeliver refused 
shipments for disposal. For example, at two of these ports, Los 
Angeles and New York, Customs was unaware of FDA refusals for 
from 61 to 68 percent of the shipments we reviewed, and when 
refused shipments are not properly disposed of, they are likely 
to have entered domestic commerce.
    For example, according to a New York Customs official, 48 
of the 63 cases that we looked at did not have an FDA refused 
notice and, therefore, were presumably released into commerce 
because Customs did not issue a notice to the importer to 
redeliver. In these cases, I might add, we found no 
documentation in Customs files that these products were either 
reexported or destroyed, which adds more credence to what 
Customs officials told us. I might add that 11 of the 48 New 
York cases and 8 of 21 similar cases in Los Angeles were 
refused entry because they contained salmonella, a bacteria 
that we all are aware of can cause serious illness.
    Our review also showed that Customs penalties for failure 
to redeliver refused shipments do not effectively deter 
violations because they are either too low compared to the 
value of the product or simply not imposed at all. In some 
cases, Customs does not impose the maximum allowable penalty, 
three times the declared value, because it exceeded the value 
of the bond that the importer posted. In other cases, Customs 
did not assess as severe a penalty as the agency guidelines 
suggest because officials at these ports were unable to 
identify repeat offenders and penalize them accordingly.
    Customs and FDA officials and importer association 
representatives suggested ways to strengthen controls over 
imported foods as they moved throughout the import procedures. 
Each of these suggestions has advantages and disadvantages. We 
do not make any specific recommendations at this hearing, and I 
will run through the suggestions, but I understand the 
Subcommittee will be holding another hearing in a few weeks and 
it might be a good opportunity to ask Customs and FDA and other 
witnesses what they think of these suggestions.
    First, for certain importers that have repeatedly violated 
import controls, Customs and FDA could work together to ensure 
that substitution does not occur before or after inspection. 
For example, FDA could target problem importers and Customs 
could order that importer's shipments be delivered by bonded 
trucks to an independent Customs-approved bonded warehouse 
pending inspection or disposal.
    Second, Customs and FDA could adopt variations on the 
controls that FSIS uses for meat and poultry imports. To help 
prevent substitution before inspection, FDA could require that 
shipments of importers or products with a history of violations 
will have unique identification marks on each product container 
and on entry documents filed with Customs. To help ensure 
shipments refused entry are actually destroyed or reexported, 
the FDA could stamp ``refused entry'' on each carton or 
container in shipments that it does not find meet U.S. safety 
requirements.
    Third, Customs and FDA could develop a method of ensuring 
that importers whose shipments are refused entry into the 
United States are issued notices to redeliver their cargo. One 
way for Customs to do this is to retrieve information from its 
own database on FDA refusals.
    Fourth, the Congress could reduce the 90-day period allowed 
for redelivery of FDA-refused shipments to require importers to 
dispose of refused shipments more quickly and more in line with 
FSIS requirements.
    Fifth, Customs could raise its penalties for repeat 
violators to make them more effective deterrents, and my full 
statement contains various ways in which Customs and FDA can do 
that.
    Madam Chairman and Members, this concludes my statement. We 
will be happy to answer any questions you or other Members may 
have.
    Senator Collins. Thank you very much.
    We will now hear from the Customs officials, and I believe 
that, Mr. Hoglund, you are going to be presenting for the 
Customs Service. Please proceed.

     TESTIMONY OF RICHARD J. HOGLUND,\1\ DEPUTY ASSISTANT 
 COMMISSIONER, OFFICE OF INVESTIGATIONS, U.S. CUSTOMS SERVICE; 
ACCOMPANIED BY PHILIP METZGER, OFFICE OF FIELD OPERATIONS, U.S. 
                        CUSTOMS SERVICE

    Mr. Hoglund. Good morning, Madam Chairman, Members of the 
Subcommittee. Thank you very much. It is a pleasure to be here 
today to speak about some of Customs investigative efforts in 
recent years focusing on the illegal importation of tainted 
foodstuffs. I am well aware of this Subcommittee's oversight 
work in the area, including hearings held earlier this year.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hoglund appears in the Appendix 
on page 129.
---------------------------------------------------------------------------
    While my statement will primarily highlight some recent 
cases and the schemes uncovered, I thought it would be helpful 
to the Subcommittee to give a brief overview of Customs' 
mission, responsibilities, and challenges.
    The U.S. Customs Service enforces more than 400 laws for 
more than 40 U.S. agencies, including the Food and Drug 
Administration and the USDA. In many cases, Customs has no or 
very limited independent statutory or regulatory authority, but 
instead derives the authority to prohibit importation, 
exportation, or to seize merchandise from directions and orders 
given by the regulating agencies. Indeed, Customs' work with 
the FDA is very much like our work with the Departments of 
State, Commerce, and Energy in the enforcement of U.S. export 
laws governing weapons, technology, and nuclear items.
    Customs faces what is perhaps the most diverse challenge of 
any law enforcement agency in the world. Consider that the U.S. 
Customs Service combats child pornography, narcotics smuggling, 
money laundering, arms trafficking, stolen automobile exports, 
theft from cargo, revenue fraud, intellectual property rights 
violations, trafficking in endangered species, importations of 
slave and forced child labor goods, and the importation of 
tainted foodstuffs, to name just a few.
    Combatting the importation of tainted foodstuffs presents a 
unique situation in that actual smuggling or false invoicing at 
time of entry is not necessary. Whereas a shipment of cocaine 
must be sealed in a false compartment or within otherwise 
legitimate merchandise, tainted foodstuffs can hide in plain 
sight. That is to say, for the most part, where they are from 
or what they are is not the issue as much as whether they are 
clean or tainted.
    Customs recognizes the threat that contaminated food 
represents to our Nation. Indeed, public health and safety is a 
priority area under our agency's trade enforcement strategy. 
Customs has worked some 134 investigations related to tainted 
foodstuff importation since September of 1993. I would like to 
take a few minutes now to outline a few of these cases. Before 
I do so, though, it is important to note that these cases rely 
largely on the outstanding cooperative relationship between 
FDA's investigative offices and the Customs Service.
    Operation Shark Fin has been mentioned, and I will go into 
a little bit of detail on that investigation. In April 1996, 
the Special Agent in Charge, San Francisco Office, developed 
information regarding the illegal importation and smuggling of 
adulterated foodstuffs and the bribing of public officials. 
Subsequently, in November 1996, a joint undercover 
investigation was initiated with the FDA Office of Criminal 
Investigations and the Department of Health and Human Services 
Office of Inspector General. The ensuing 10-month investigation 
disclosed that a licensed Customhouse Broker and two FDA 
consumer safety inspectors had facilitated a scheme to allow 
adulterated foodstuffs, such as real and imitation shark fins, 
abalone, birds' nests, dried oysters, and scallops, to 
illegally enter the commerce of the United States from Asia.
    This is how it worked. In December 1996, Customs opened an 
uncover brokerage business utilizing the Customhouse Broker as 
a full-time employee. The storefront was used to monitor and 
record illegal transactions between the broker and the targeted 
individuals. The operation only focused on individuals with 
whom the broker had conducted illegal transactions with in the 
past. During the operation, there were more than 100 undercover 
contacts with various targets.
    During the undercover negotiations, several targets 
expressed interest in offering monetary bribes to an FDA 
employee in exchange for utilizing his or her position to sign 
FDA entry notices containing fraudulent information. This 
action would allow for the release of the FDA-regulated food 
shipments without the required inspection by FDA. An undercover 
agent posing as an FDA inspector was introduced to the targets 
and the targets ultimately offered to bribe the undercover 
agent in an attempt to circumvent Customs and FDA examinations.
    This investigation determined that various schemes had been 
used to get the illegal merchandise into the country. The 
intent of these schemes was to circumvent inspection by Customs 
and FDA. The importers would switch the contaminated 
merchandise with clean merchandise--I believe that ``banking'' 
was referred to earlier--when an inspection was required. The 
switch would occur between the time the cargo was moved from 
the port where the vessel was docked and the location of the 
warehouse for inspection. If samples for lab analysis were to 
be taken at the importer's premises, the importer would have a 
small quantity of this clean product available and would take 
the samples from there to submit for testing.
    In the event that merchandise was appropriately inspected, 
tested, and found to be contaminated, the importer has the 
option of reexporting the merchandise from the United States or 
to destroy the merchandise. Should the importer elect to 
reexport, the same merchandise would be imported back into the 
United States at a later date. In the event that the importer 
elected to destroy the merchandise, substituted merchandise 
would be destroyed instead of the required merchandise. The 
importer would usually destroy trash similar in weight to 
merchandise they were supposed to destroy.
    Operation Bad Apple was developed by the Office of Field 
Operations of the Customs Service in San Francisco as an 
outgrowth of Operation Shark Fin. Overall, this operation was 
intended to measure the compliance with import requirements by 
companies importing foodstuffs into the United States in the 
Port of San Francisco and to take enforcement action against 
willful and repeat violators. This operation was conducted with 
the assistance and cooperation of the FDA during July 21, 1997 
through August 4, 1997.
    In order to examine imports of foodstuffs, selectivity 
criteria were developed to notify the inspector electronically 
of a foodstuff import. During Operation Bad Apple, 1,026 
shipments of merchandise matched these criteria. Based on these 
matches, 429 shipments containing 1,400 line items were 
targeted for examination. The examinations resulted in a total 
of 305 discrepancies discovered, and that is the entire array 
of discrepancies. However, only a total of 33 shipments were 
denied entry into the United States for not meeting FDA 
requirements. In addition, 13 civil penalties were issued 
against the importers, totaling approximately $200,000.
    As a result of these operations, the Port of San Francisco 
has identified the top 10 high-risk importers of foodstuffs. 
These importers are being monitored closely for compliance with 
FDA import requirements.
    Another investigation was Sigma International. This was a 
joint investigation conducted by the Special Agent in Charge, 
Tampa, Florida office and the FDA Office of Criminal 
Investigations. It was an investigation into a scheme by which 
Sigma International, a large-scale importer, four of its 
officers, and one of its foreign purchasing agents illegally 
imported Indian-processed shrimp valued at approximately $4.5 
million via false and fraudulent documents. These documents 
were provided to the government in order to avoid compulsory 
FDA laboratory testing, as well as examination of its 
merchandise. The merchandise consisted of decomposed shrimp 
that had been chemically treated to mask the decomposition.
    The information uncovering the scheme was provided by an 
FDA inspector after his review of entry documents and 
examination of shrimp imported by Sigma. The company was 
soaking the decomposed Chinese shrimp purchased in India in a 
solution of chlorine and copper sulfate with the intent to 
deceive customers by passing off the shrimp as fresh frozen. 
Sigma sold its shrimp to large shrimp processors, who in turn 
sold it to supermarkets and restaurant chains throughout the 
United States.
    The other investigation I would like to highlight is Fresh 
Sea Products. In March 1996, a commercial truck entered the 
Otay Mesa commercial inspection facility from Tijuana, Mexico. 
The driver declared frozen fish products as products of Mexico. 
Initial Customs inspection disclosed that the fish products 
were really from the Orient. Further examination of the fish by 
Customs and FDA inspectors revealed fish from shipments which 
had been rejected entry into the United States by FDA 2 years 
earlier, in 1994.
    The FDA originally rejected the shipment because it 
contained salmonella, botulism, and filth. This shipment was 
exported and stored in Mexico and then attempted to be 
reimported and sold to restaurants in the Los Angeles area. The 
shipment was ultimately seized and ordered destroyed.
    Currently, there are several ongoing investigations 
involving the importation of tainted foodstuffs. Joint 
investigations are being conducted with FDA and these 
investigations include such schemes as the attempted 
reimportation where entry had been denied, switching of 
foodstuffs that were denied entry and were required to be 
exported, and foodstuffs that were mislabeled to avoid 
mandatory FDA inspection and testing.
    I can assure the Subcommittee that this will continue to be 
a priority area for Customs and that we will continue to work 
with FDA to develop and execute effective investigative 
operations targeting individuals and organizations involved in 
tainted foodstuff importations.
    Madam Chairman, that completes my prepared remarks. I would 
be happy to answer questions, and, of course, you introduced 
Mr. Metzger, who would assist in any areas that go specifically 
to port processing. Thank you.
    Senator Collins. Thank you very much, Mr. Hoglund.
    Before we turn to questions, I want to welcome Senator 
Domenici to these hearings and see if he has any preliminary 
comments he would like to make. Senator Domenici, welcome.

             OPENING STATEMENT OF SENATOR DOMENICI

    Senator Domenici. Thank you very much, Madam Chairperson. I 
have no remarks other than to, again, compliment you on these 
hearings. When they first started, a lot of people wondered 
what they were all about. They are beginning to understand, 
thanks to your diligence and hard work, and I do hope we learn 
something from it that we can implement. It is difficult to try 
to find a better way to do it, but I think with your 
leadership, we will find a better way and we will get it done 
better. Thank you very much.
    Senator Collins. Thank you, Senator Domenici.
    I say that after these hearings, my diet gets more and more 
constricted. First it was raspberries. Now it is fish, and 
frozen shrimp, one of my favorites. On a serious note, it 
really is disturbing to hear the testimony that we have 
accumulated over the past two hearings.
    I want to get a better feel for the extent that fraud and 
deception contributes to the food safety problem in the United 
States. Mr. Dyckman, I know that the GAO has done a lot of work 
reviewing the shipments at the ports of entry, and it is my 
understanding that you found substantial percentages in the 
sampling that you did of rejected food products, food products 
that have been rejected by the FDA, and keep in mind that the 
FDA is looking at fewer than 2 percent of all the shipments. 
But these are food shipments that have been rejected and yet 
are finding their way into the American marketplace.
    Could you give the Subcommittee some idea of how widespread 
this problem is? Is it confined to one or two major ports or 
did your review find that this was a problem at virtually every 
port of entry?
    Mr. Dyckman. Madam Chairman, as you indicated, it is 
difficult to quantify the problem without doing special 
operations at all ports all the time. But I have to tell you 
that the internal control weaknesses that we observed, they 
exist at every port. We have looked at controls of FDA-
regulated products at eight ports. We met with FDA beforehand. 
We asked them if these were representative ports. They said 
they were. So we have no reason to believe that the problems 
that we identified and that Customs have identified through 
special operations do not exist at just about every port.
    You indicated, and I might add, that when Customs does a 
special operation, they always uncover fraud and deception and 
substitution. So my answer is, yes, these are pervasive 
problems.
    Senator Collins. And that suggests to me an indictment of 
the system that we are using, that there are systemic 
weaknesses that repeatedly allow unethical importers, that 
allow criminals to evade the inspection process. Is that a fair 
conclusion?
    Mr. Dyckman. Yes. The internal control, or the control 
problems that we identified, definitely give opportunities or 
present opportunities for unscrupulous importers to bypass the 
system.
    Senator Collins. Mr. Hoglund, I want to talk further about 
a specific case that you indicated because it seems so 
egregious and shocking to me. As I understand it, you looked at 
a case where fish in 1996 came in from Mexico and it turned out 
that Customs inspection disclosed that the fish products that 
were being inspected in 1996 were not from Mexico but were from 
Asia and, in fact, that that fish came from shipments that had 
been rejected by the FDA in 1994, 2 years before, is that 
correct?
    Mr. Hoglund. Yes, ma'am, that is correct.
    Senator Collins. You indicated that in this case, the 
company president pleaded guilty for the import of adulterated 
food into the United States. Could you tell us what the 
sentence and penalties were in this case?
    Mr. Hoglund. I will look for that. I may have that handy.
    Senator Collins. I think it is on page 7 of your prepared 
testimony. It is my understanding that there was only a 1-year 
probation and 50 hours of community service in this case. Can 
you verify that?
    Mr. Hoglund. The violator was sentenced to 1 year probation 
and 50 hours of community service, that is correct.
    Senator Collins. I am incredulous that that is all the 
penalty was, that someone took 2-year-old fish that had been 
rejected because it was contaminated with botulism, as I 
understand it, is that correct?
    Mr. Hoglund. Yes, that is correct.
    Senator Collins. In other words, this fish could have 
killed someone, or at the very least, made people extremely 
ill. It was then held for 2 years, which certainly did not 
improve the quality of the fish, reexported into the United 
States, and the person who did this only got a year's probation 
and 50 hours of community service? Do you think that that was 
an adequate penalty?
    Mr. Hoglund. Well, I can only assume that the sentencing 
guidelines were followed by the judge in that case.
    Senator Collins. I am not questioning that, and I am 
certainly not blaming the Customs Service, which deserves 
credit for bringing the case forward, but do you personally 
believe that that was a sufficient penalty or should the laws 
be far tougher? Do you think that is really a deterrent?
    Mr. Hoglund. Well, I think it is the application, because, 
as was stated earlier, there is a wide range and there are 
violators who are sentenced to significant prison terms. So I 
do not know that there is not the availability of significant 
punishment. It is applying it.
    Senator Collins. Mr. Oleson, do you have an opinion on this 
case? Is it one that you are familiar with? I know you have 
done a lot of work in this area.
    Mr. Oleson. I am not specifically familiar with the case 
mentioned, but I am somewhat incredulous, as you are, Senator, 
that only a year probation and 50 years of community service 
for bringing in a tainted product that had botulism, which is a 
very serious contamination problem.
    Senator Collins. It seems to me that one of the flaws that 
our investigation has uncovered is that the penalties are 
woefully inadequate to deter this kind of fraud that 
jeopardizes the health and safety of American citizens. That is 
really serious. That is not like substituting a lower quality 
piece of jewelry for the one that was declared. I mean, it is a 
serious problem.
    Mr. Oleson, I want to turn to you now. It is my 
understanding that you accompanied the Subcommittee staff in a 
review of some warehouses, I think in California. Could you 
tell us what you saw as part of your observations in that 
review, please?
    Mr. Oleson. Certainly. I did accompany the Subcommittee 
staff on a couple of inspections. I think the most recent would 
probably be the most illustrative.
    We accompanied FDA to an inspection of a canned seafood 
product. The FDA inspector entered the warehouse and asked the 
warehouse operator or the importer where the shipment was 
located. They directed him to a number of pallets that were in 
the front entry of the warehouse, right by the front door, in 
fact. The inspector then went on to select his samples and do 
his inspection.
    While he was doing that, we toured the warehouse and looked 
at the other products that were in there and we found two other 
shipments of this same canned seafood product. The markings on 
the boxes were from the same manufacturer, the same information 
was presented, and we could not determine why one shipment was 
looked at over the other. They were virtually identical.
    So we do not know if we were actually looking at the right 
shipment when we got done, and I think that is the case where 
substitution can take place. It could have been one of the 
other shipments we were supposed to look at.
    Senator Collins. If FDA just did the simple step of 
stamping rejected shipments with ``refused entry,'' would that 
not make banking and substitution a lot more difficult to pull 
off?
    Mr. Oleson. It would make it more difficult for products 
that were refused entry and are being reexported, that it would 
be more difficult to bring them back in or be easier for 
Customs to determine that the actual refused shipment was being 
sent out of the country. As we pointed out, in New York, they 
have a special program where they examine exported shipments 
that have been refused entry and 31 out of 105 times, they 
found that the product was either short, missing altogether, or 
was substituted with another product. That is a significant 
problem.
    Senator Collins. Another weakness that GAO's report has 
uncovered is the fact that the importer retains control of the 
suspect shipment. It is my understanding that that contrasts 
with the system used by the Department of Agriculture, where 
the shipment that has been targeted is taken into custody by 
the Department of Agriculture. Mr. Oleson, is that correct, and 
could you comment on the differences and whether you believe 
the FDA's approach provides the opportunity for the kinds of 
deception that we are talking about?
    Mr. Oleson. Certainly. The Department of Agriculture, or 
the Food Safety Inspection Service, has three major controls 
that differ from the Food and Drug Administration. The first is 
when a meat and poultry shipment comes into the country, it has 
to be taken to an FSIS-approved inspection station. That is a 
type of a bonded warehouse where it is controlled.
    The shipment also must contain unique markings that are on 
the health certificate that must accompany the shipment. So 
when an FSIS inspector looks at the shipment, he can be assured 
that this is one in the same shipment he is supposed to be 
looking at.
    The third area is when FSIS completes their inspection, 
they will stamp any refused item ``refused entry''. It is still 
controlled in that warehouse. It will not leave that warehouse 
until either it is released by FSIS or the refused entry has 
been taken care of by the importer, who has arranged for 
export.
    FDA does not have these controls. In fact, the importer 
controls the shipment from the entire process, once it enters 
until it is released. If it is refused entry, the shipment is 
still at the importer's warehouse and it is up to the importer 
to return it back to the port, where Customs will witness 
either destruction or export.
    There are no markings on the shipment to identify whether 
they are the correct shipments or not. There is no stamp of 
refusal, and as such, sometimes, as Customs pointed out, the 
importers try to reimport the ``refused entry'' shipment. We 
have two cases recently in Los Angeles where such things were 
found. One was on rice sticks, the other was on a tamarind 
fruit, where they brought them back in.
    Senator Collins. Thank you, Mr. Oleson.
    I am going to turn to my colleagues. I do have additional 
questions, but I will wait for another round. Senator 
Lieberman.
    Senator Lieberman. Thanks, Madam Chair.
    I wanted to thank you, Mr. Dyckman, and your staff at GAO. 
I think you have done a first-rate investigative and reporting 
job here. I must say that it leaves me with a feeling that this 
is a very porous system. I do not underestimate the difficulty 
of improving it and what it will cost us to do it. In that 
regard, I appreciate some of your very thoughtful suggestions.
    But it takes an honest and honorable importer to do it 
right, because the probability of being able, at least as I 
read your work, of being able to circumvent the system is high. 
If you want to do it, it is pretty easy to game the system with 
really dreadful consequences for a lot of people's health.
    I just wanted to thank you for the work which you have 
done, which is very important to us as we go about our work, 
and I want to focus on a few parts of this.
    One that struck me is what you point out are some serious 
flaws in communication and coordination between the FDA and the 
Customs Service. In what I consider to be a startling number of 
cases that you pointed out in New York and Los Angeles, the 
Customs Service was actually unaware of FDA's refusal notices 
for food shipments. If I am not mistaken, it was between 61 and 
68 percent of the shipments GAO reviewed, Customs was unaware 
that FDA had put down a refusal notice.
    According to your work, the GAO work, in most of the cases 
where the Customs Service did not receive FDA's refusal notice, 
the product would have been released into commerce here in this 
country, and I gather from your report that in a number of 
those cases, the products were refused by the FDA because they 
contained salmonella. Have I got that right, Mr. Dyckman?
    Mr. Dyckman. Yes, you have. Unfortunately, you do.
    Senator Lieberman. Do you want to add anything to my 
telling of it and explain--go ahead.
    Mr. Dyckman. Well, yes. We have two agencies that have 
unique responsibilities and they are supposed to work together. 
We know that they are both hard-working agencies and they mean 
well----
    Senator Lieberman. Right.
    Mr. Dyckman [continuing]. But there is obviously an 
opportunity to improve their ability to detect these types of 
things that we have been talking about. A basic principle is 
that one agency knows what the other agency is doing, and 
unfortunately, we found in too many cases that this is not 
occurring.
    We think the solutions are fairly simple. We have discussed 
these with the agencies at closeout meetings. I think they are 
both amenable to take corrective action to improve coordination 
so that Customs knows in all cases when FDA refuses a shipment 
so that it could send a notice of redelivery to the importer. 
It is a basic internal control. We hope that, in short order, 
it will be fixed.
    Senator Lieberman. Mr. Hoglund or Mr. Metzger, do you want 
to give a response to that, about why the Customs Service was 
unaware of those FDA refusal notices at such a high percentage? 
I mean, it is unsettling. We are talking about the basic 
problem. The percentage of food that FDA gets to inspect is 
relatively low. So even among that small universe, of those 
where there are refusal notices, it seems as much as two-thirds 
of the time, the notices are either not conveyed or for some 
reason Customs is not aware of them, so the food may then go 
out into commerce.
    Mr. Metzger.
    Mr. Metzger. The system as it works consists of two 
automated systems. There is a Customs automated system and 
there is an FDA automated system. Apparently, to date, the 
systems have not talked to each other perhaps as they should 
have. We have relied on manual notices or copies of those 
refusal notices coming to Customs. Now, we are looking into why 
these may not have gotten to us. However, notwithstanding that, 
we believe that we need to work with FDA so that we get output 
from the automated system, which has all of the refusals in it, 
so that we can act on those and not rely on the manual 
statements that we have been relying on to date.
    As to why we did not receive them or did not get them, I do 
not have the information. We certainly will look into that. But 
I think we need to perfect the system, in any event.
    Senator Lieberman. And you and FDA are working on that now?
    Mr. Metzger. We certainly are.
    Senator Lieberman. I hope you will keep the Committee 
posted about progress on that as soon as possible.
    Mr. Metzger. We will.
    Senator Lieberman. Another part of this story that is hair 
raising, or maybe I should say in this case stomach turning, is 
the case that GAO makes that importers are able to bring 
tainted food into the American market even after the FDA has 
barred the import of food in another way, which is that 
importers have the option of reexporting barred goods, but 
there are cases that you cite where importers are actually 
substituting shipments of garbage which they are reexporting. 
Can you tell us a little bit more about that case, Mr. Dyckman, 
or any of your team?
    Mr. Oleson. Yes, Senator Lieberman. This is a predecessor 
case to New York establishing their outbound inspection 
program. What they are doing is they decided to examine some 
shipments that were going out to determine--which Customs is 
responsible for doing as the insurer--that the refused shipment 
is either exported or destroyed. When they actually opened the 
container, they found that there was garbage or trash in there 
and not the shipment that was supposed to be. The weight was 
right, but the product was not.
    Subsequent to that, they had found----
    Senator Lieberman. Excuse me. Therefore, the barred product 
was presumably put into the marketplace?
    Mr. Oleson. That is correct, that the barred product would 
go ahead and be distributed to commerce.
    Senator Lieberman. So have they set up a system now to try 
to double-check that?
    Mr. Oleson. Yes. In New York, they have what they call the 
Outbound Program, where they will target certain shipments and 
examine those intensively to determine whether there has been 
any substitution or shortages or non-redeliveries. In fact, 
they have a number of cases that they illustrated earlier where 
they found them.
    However, it is quite difficult to do that. Sometimes they 
even had to call the manufacturer in the foreign country to 
determine from the best-used-by date that was on the container 
what the actual production date of that product was. After they 
got that and they made their computation, they found that the 
production date was subsequent to the importation date, so 
obviously it was not the product that was refused entry, it was 
another product. These are some of the things they are doing in 
New York. It takes a very diligent, observant Customs inspector 
to do that and we should praise him for his action.
    Senator Lieberman. Do you know whether any criminal action 
was taken against the importer who substituted trash for the 
tainted food?
    Mr. Dyckman. We are not aware of any.
    Mr. Oleson. I suggest Customs may know that answer.
    Senator Lieberman. Do you know, Mr. Hoglund or Mr. Metzger?
    Mr. Metzger. I have no knowledge of that, but I will check 
that out.
    Mr. Hoglund. We can get the answer to you.
    Senator Lieberman. I would appreciate that.
    I have just one or two more questions. Mr. Hoglund, we have 
heard that civil penalties are not an effective deterrent in 
these cases because the amounts of the bond required by law can 
be relatively small. Why does not the Customs Service pursue 
criminal charges in a greater number of cases? I mean, you have 
pointed out some cases here today which were successful and I 
admire those, but why has not Customs gone through the criminal 
courts in a greater number of cases?
    Mr. Hoglund. Part of the answer is that we are dealing with 
different sets of penalty regulations. The liquidated damages 
which I think you are referring to in terms of the three times 
the declared value, those are in line with enforcing FDA's 
requirements for reexport or a violation of our redelivery 
notice. We do have more significant civil penalties if a fraud 
is committed on the Customs Service under our regulations and 
under our laws. Likewise, the criminal penalties that have been 
applied in the majority of these cases have had to do with 
violations of Customs laws in terms of false invoicing, 
misdescription, in order to evade the FDA requirement. So it is 
a mixture, and I think Phil can explain more readily the area 
of the liquidated damages.
    Mr. Metzger. I would tell you that the Customs Service in a 
large majority of cases where actions are initiated rely on the 
civil penalty, the bond amounts. The maximum is three times the 
value.
    As far as pursuing criminal cases, and again, I do not want 
to speak for the Office of Investigations, but it would seem to 
me that it could be in part a resource issue. The criminal 
cases require a number of investigative resources. It requires 
a much higher level of proof, evidence, to sustain. We believe 
that in most cases, the civil deterrent, the monetary penalty, 
would suffice. Apparently, our assumption may not be correct 
and----
    Senator Lieberman. Would you agree, then, as we try to set 
up a system--I mean, obviously, we cannot check and inspect 
every piece of food coming into the country. As GAO has pointed 
out, we can certainly do better than we are doing now in 
various ways. But would not one of the ways to create better 
behavior by these folks who are unscrupulous now be to have 
more frequent enforcement of criminal penalties against those 
who you find to be guilty of wrongdoing?
    Mr. Metzger. What we hope to do with the FDA is target 
likely violators, instead of just taking a broad-brush 
approach, zero in on those areas where we think the risk is 
highest, look at those more closely, and certainly, if we have 
violators who are repeated violators, I think we would be 
amenable to resorting to more of the criminal actions as 
opposed to just the civil actions.
    But again, we are going to work with FDA on zeroing in on 
where the likely violations occur, that we cannot just use our 
resources across the board and waste them. We know there are 
areas where it is more likely that there will be violations and 
that is where we hope to focus.
    Senator Lieberman. I urge you to do that.
    Mr. Hoglund, did you want to add something?
    Mr. Hoglund. Yes. Senator, it might be helpful, of the 134 
cases, investigations, that I mentioned earlier, 62 indictments 
resulted from those, 47 arrests, 38 convictions, 7 court fines, 
87 seizures, 17 penalties, 1 forfeiture, 3 acquittals, and 1 
dismissal. Seventy cases were closed without any criminal 
finding.
    Senator Lieberman. Mr. Dyckman, just a final question. We 
have talked about greed obviously being the motivation here. 
Can you give us any idea of the amounts of money involved in 
these shipments? I understand they are varying sizes, but I 
have no idea of what kind of money can be made in this business 
if one is willing to break the law.
    Mr. Dyckman. Well, I think we have a case in our testimony 
where the mark-up is substantial, so even if a penalty is 
imposed at three times the declared value, there is still ample 
room for profit. We were told by Customs officials that the 
mark-up can be 10-fold, so----
    Senator Lieberman. Ten-fold over the value of----
    Mr. Dyckman. Of the declared value.
    Senator Lieberman. Are these normally shipments that are 
tens of thousands, hundreds of thousands, millions? I do not 
know what the value is.
    Mr. Dyckman. Do you have a better feel for the size of the 
shipments that you looked at?
    Mr. Richards. It varied widely.
    Senator Lieberman. Maybe it is a hard question to answer, 
because they vary widely, but the point you made is an 
important one, particularly as related to the penalty system 
because of the markup.
    Mr. Dyckman. Yes. We visited warehouses and some of the 
shipments are huge, more than one truckload. Depending on the 
type of product, they could be very valuable.
    Senator Lieberman. OK. Thanks very much. Thanks, Madam 
Chair.
    Senator Collins. Thank you, Senator Lieberman.
    Senator Durbin.
    Senator Durbin. Thank you, Madam Chairman.
    Mr. Hoglund, for some perspective here, can you give me an 
idea of how many inspectors the Customs Service has in this 
area of imported food inspection?
    Mr. Hoglund. I will defer to Mr. Metzger. That is his area.
    Mr. Metzger. Well, the inspectors do not concentrate in one 
area. We have inspectors who do cargo around the country, and I 
would guess the number would be about--Customs inspectors, 
now--about 2,500 inspectors who do cargo.
    Senator Durbin. Can you give me an idea of the volume of 
entries that they would inspect during the course of a year?
    Mr. Metzger. The number of entries that come into the 
country in the course of a year is around 18 million entries. 
Of that number, I would estimate that the percentage examined 
is less than 5 percent.
    Senator Durbin. We had a hearing on this subject in May and 
I asked Mr. Oleson some questions then. I will have to tell you 
that I am disappointed in the GAO report, that it does not 
address the question which I raised in the first hearing. I 
believe that it is fundamentally unfair to compare the Food and 
Drug Administration to the Food Safety Inspection Service of 
the U.S. Department of Agriculture without making some 
reference to the difference in staffing, which is dramatic. Mr. 
Dyckman, are you aware of that difference?
    Mr. Dyckman. Yes, I am.
    Senator Durbin. Did you make any reference to that at all 
in the GAO report?
    Mr. Dyckman. Our report, or our testimony basically 
addresses poor internal controls, what you do with the staff 
that you have. In some cases, there are legislative problems. 
The authorities that the Department of Agriculture has are 
different than FDA's. USDA's are stronger. Staffing is part of 
the issue. But even putting staffing aside, things like 
marking, things like putting things in bonded warehouses, 
should not directly impact the number of staff that Customs or 
FDA has.
    Senator Durbin. Mr. Dyckman, I do not argue with that, and 
I think each of your suggestions is a good one and I think they 
should be implemented and it should be a consistent standard, 
whether it is the FSIS or FDA. There are some of us who feel 
that this should all be under one agency, rather than spread 
around 6 or 12 different Federal agencies with different 
administrators and different rules and regulations and an 
absolute crazy quilt of standards when the American consumer 
just wants to know one basic question: Is this safe to eat? I 
think we ought to get down to the bottom line.
    But for the record, I want to put on the record what I 
consider to be a dramatic quantitative difference between the 
FSIS and the FDA which needs to be part of this record and 
should be part of a GAO report. I really think it goes beyond 
the question of improving the procedures here, but whether we 
are prepared to make a commitment as a Nation to have the kind 
of quality inspection that we need.
    First, let us talk about the volume of growth. The number 
of imported food products has doubled over the past 6 years. In 
the Food and Drug Administration, each inspector is responsible 
for nearly three times as many shipments today as they were 5 
years ago. That is expected to increase by another 33 percent 
over the next 5 years. U.S. News and World Report did a study 
on this and they concluded the agency has a seemingly 
impossible task.
    Now, let me give you the figures. We have talked about the 
fact the FSIS visually inspects 118,000 entries of imported 
meats and poultry, and physically inspects 20 percent of them, 
118,000 entries. How many inspectors are at the Food Safety 
Inspection Service? Eighty-four.
    Now, go over to the Food and Drug Administration. There are 
2.7 million entries, as opposed to 118,000, of imported foods, 
physically inspecting 1.7 percent of them, and they have, 
according to Mr. Oleson's testimony in May, 463 people who are 
involved in that. The USDA, Department of Agriculture, has only 
4 percent of the responsibility of the Food and Drug 
Administration. They have 84 inspectors, where the Food and 
Drug Administration has 463.
    If we were to put a comparable number of inspectors in the 
Food and Drug Administration, based on the entries that are 
inspected by the Department of Agriculture, we would have to 
quadruple the number of inspectors in the Food and Drug 
Administration, at which point those inspectors would have more 
time to take a look at these shipments, more time to carefully 
evaluate whether somebody is gaming the system, and more time 
to try to determine whether or not they are dealing with the 
banking and other problems that we have talked about today.
    When I take a look at the situation facing the Customs 
Service, with 2,500 inspectors, the largest of all of them, it 
appears that they could always use more, but they have 
substantially more resources, more personnel who are involved 
in this.
    Now, here is the bottom line and why we do not talk about 
this on Capitol Hill. How are we going to get more inspectors 
in the FDA? There are two ways. One, increase their 
appropriation, which means spending more money here on Capitol 
Hill. We do not like to talk about it in a time of reducing the 
budget. But if we are going to be honest about it, we are going 
to have to. The other alternative is a user fee, saying to the 
people who want to export to the United States, you have got to 
pay for inspection so that we can be certain that the American 
consumers know that they are getting something safe on their 
tables. Then we can talk about system changes, and I think all 
of the system changes you have suggested are valid system 
changes.
    But when the system is so overwhelmed--here is what the 
U.S. News and World Report said. ``Inspectors in the FDA 
checking computer paper records''--they have gone to computers, 
because they cannot keep up with the physical inspection--
``spend about 3 to 10 minutes on each shipment,'' and that is a 
computer inspection. That is not a physical inspection. And 
only 1.7 percent were actually inspected.
    If we are going to be honest about this, and I hope we 
will, let us change the system, as has been suggested by the 
GAO, but let us also accept the responsibility to put men and 
women on the job in these ports. The Food and Drug 
Administration has 309 food safety inspectors. The others that 
I mentioned, 463, are laboratory analysts and the like. There 
are 330 ports of entry in the United States. There are fewer 
inspectors than there are ports of entry. Why do we have a 
problem? I would suggest that is part of it, Mr. Dyckman.
    Mr. Dyckman. I do not disagree with anything you said, 
Senator Durbin. As a matter of fact, yesterday, we issued a 
report to the House Budget Committee that says many of the same 
things you are saying. We point out that $1 billion is being 
spent by the Federal Government on food safety inspections, but 
we question whether 25 percent of that is actually targeted to 
high-risk activities.
    For example, the Department of Agriculture spends about a 
quarter-of-a-billion dollars on carcass-by-carcass inspections, 
looking at every carcass, and we question the risk posed to the 
American people that could be eliminated by doing these 
inspections and we suggest that possibly some of that money be 
redirected for other things, such as solving the imported food 
safety problem.
    Senator Durbin. That is exactly the point I tried to get to 
on consolidating this in one agency, and I would like your 
response to that, because if we had all of the food safety 
inspection under one agency, in legislation that I have 
introduced, we could sit down with the National Academy of 
Sciences or some recognized scientific organization and say, 
all right, let us talk about real risk. Is it necessary to 
inspect each beef carcass that comes in or would it be safer 
for the American consumer for us to focus on processed products 
or fruit and vegetables? What is the best investment of our 
money for the safety of the American consumers? If you or Mr. 
Hoglund would like to address this question of consolidating 
food safety inspection in one agency, I would appreciate it.
    Mr. Dyckman. We have been on record, as you probably know, 
for many years supporting the concept and we have recommended 
that the Congress consider creating one agency to handle food 
safety in the United States. Currently, as has been pointed 
out, it is a patchwork among 12 to 13 different agencies and 
there is no one spokesperson. There is no one that is in charge 
of the budgets for all these agencies as it deals with food 
safety. The National Academy of Sciences just came out with a 
report and it looks like they read many of our reports, because 
some of the language looks very familiar to me as I have read 
and prepared for this hearing. So we support in concept just 
about everything you have said.
    Senator Durbin. Thank you for your testimony, and let me 
not take anything away from your recommendations. I think they 
are all very valid. But I think we have got to get down to the 
bottom line here. We can make changes, modifications in 
procedures and they will undoubtedly marginally improve the 
situation. But if we are serious about this and if we are truly 
going to be a Nation more and more dependent on imported food, 
I think we have to be serious about it and we have to go down 
to some basic questions. Are we willing, first, to streamline 
this and to make it more efficient with one agency, and second, 
will we put the resources into inspection to make sure that we 
can guarantee the American people that they have safe food on 
their tables?
    Thanks, Madam Chairman.
    Senator Collins. Thank you, Senator Durbin.
    For the next round of questions, I am going to ask the 
lights be put on for 5 minutes per Senator for questions.
    I do want to just quickly follow up on the points that 
Senator Durbin has raised. Many of us recently voted for a 
substantial increase in the food safety budget as part of the 
agriculture appropriations bill, but I think what GAO is saying 
is that as long as you have these weaknesses, as long as FDA, 
for example, is not focusing its resources on the greatest 
health risk, as long as importers are allowed to retain custody 
of suspect shipments, as long as shipments are not stamped 
``refused entry,'' as long as the importer has 90 days to deal 
with the problem rather than the 45 days that FSIS gives its 
shippers and importers to deal with rejected shipments, as long 
as those flaws exist in the system, we can add all the 
inspectors in the world and we are still going to have a 
problem. Is that correct, Mr. Dyckman?
    Mr. Dyckman. It is correct. Without good internal controls 
to make sure that--for example, when a product is refused by 
FDA, you could have, as you point out, as many inspectors as 
you want, but there is no assurance that the product is the 
same product that gets destroyed or reexported, you may not 
have accomplished anything. So you could put a lot of money 
into this problem and really not have substantial results. I 
think it has to be a coordinated, comprehensive effort. We 
agree that it is important to address the budgetary issues 
involved with food safety, but it is just as important, as you 
indicate, to address the internal controls. Right now, they are 
weak.
    Senator Collins. I do think we need more resources and I 
supported the expenditure of $66 million as part of the 
appropriations process, but I do not want to just put more 
money into a broken system because more money and more 
inspectors, if the system is still broken, if the flaws that 
you have identified still exist, is not going to solve the 
problem.
    Let me turn to a specific in that regard. Mr. Dyckman, how 
does the FDA's 90-day time period, which is twice the time 
allotted for FSIS-regulated products, make it more likely that 
unsafe food will be distributed in this country?
    Mr. Dyckman. Well, it is pretty obvious that the more time 
an importer has and the fact that the product is in his 
custody, he has more time to arrange for illegal substitution.
    Senator Collins. And it is my understanding that that is 
statutory. So that is something Congress has to change, is that 
correct?
    Mr. Dyckman. That is correct.
    Senator Collins. Mr. Metzger, do you see any reason, any 
policy or technical reason, why the time period cannot be 
reduced, especially considering that 75 percent of importers, I 
understand, would not be affected by a shortened time for 
redelivery?
    Mr. Metzger. We have no problem with that, Senator.
    Senator Collins. I would like to ask both Customs and the 
GAO, why do we allow--and I believe Senator Lieberman touched 
on this--why do we allow reexport of unsafe food? Why do we 
want it to go anywhere in the world? Why do we not order it 
destroyed? Mr. Oleson.
    Mr. Oleson. Thank you, Senator. There are certain foods 
that we will not allow reexport to. They are called Class I 
violations, which such a thing as botulism is not supposed to 
be reexported, but unfortunately, there are cases where it has 
been.
    The rationale provided to us by FDA is that some of these 
foods, although they do not meet U.S. standards, can meet 
foreign country standards or they may be able to recondition 
them in the foreign country. For example, if you have a 
salmonella-contaminated product, which is not a Class I 
violation, they allow reexport. If you take that product and 
cook it to a certain temperature, you will kill the salmonella 
and then it may be acceptable to eat. So it is the rationale 
that these products still could be reconditioned or used 
elsewhere is why they do not require destruction.
    Senator Collins. I do not think the consumer would be very 
excited about reconditioned food.
    Mr. Oleson. I cannot argue with that, either.
    Mr. Dyckman. Particularly if it takes 2 years.
    Senator Collins. Right. Mr. Hoglund.
    Mr. Hoglund. It is obviously a reasonable question as to 
why is it not destroyed, but I do not know the rationale in 
terms of the legislation, why an option was provided, and I 
also do not know if there are some commercial usages, that were 
taken into consideration perhaps, a reexported product can be 
somehow processed into some non-edible fertilizer or whatever.
    Senator Collins. That might be a legitimate reason.
    Mr. Hoglund. The reason for reexports. I do not know if the 
commercial reason----
    Senator Collins. That is the only one that I can think that 
might be legitimate.
    Mr. Richards, I did not want you to feel slighted. My final 
question is for you. At an earlier Subcommittee hearing on food 
safety, a former FDA inspector testified that the current 
system of fines and penalties is nothing more than ``a slap on 
the wrist.'' What did GAO's review find with regard to 
importers' attitudes towards penalties? Did they see them as 
just a cost of doing business or a serious deterrent, and what 
kind of profits are we talking about here?
    Mr. Richards. Well, at nearly every port we went to, the 
Customs and FDA officials told us that from their experience, 
the importers did consider these penalties for failure to 
redeliver products as a cost of doing business. Regarding the 
types of profits that can be made, as Mr. Dyckman mentioned, we 
had heard in some cases that the difference between the 
wholesale value of the product and the cost to the importer 
could be as much as 10 times. That seemed consistent with what 
we had reported to Congress in 1992, where we also had shown 
some examples of differences where the wholesale value that the 
importer could gain from a product exceeded the penalty that 
was imposed for not destroying it or exporting it.
    Senator Collins. Thank you for that information. That 
suggests to me another area that we need to look at as we look 
at the underlying laws in this area.
    Senator Durbin.
    Senator Durbin. No questions.
    Senator Collins. Thank you. I want to thank the panel for 
their cooperation. As was mentioned just briefly by Mr. 
Dyckman, we are going to be turning to the remedy stage in our 
next two hearings and we will welcome your suggestions and 
input at that time, as well. Thank you very much.
    Mr. Hoglund. Thank you.
    Mr. Dyckman. Thank you.
    Senator Collins. Our final witness this morning is a 
confidential informant and former Customs broker. We will refer 
to this witness today as ``Mr. Broker''. He will give the 
Subcommittee an insider's view of how unscrupulous importers 
use fraudulent and deceptive practices to circumvent food 
safety inspections.
    For the record, I want to note that the witness has 
specifically requested that his face be obstructed from public 
view because he is still cooperating with an ongoing Federal 
criminal prosecution. Under the circumstances, the Subcommittee 
has determined that this is a reasonable request. Without 
objection, therefore, it is so ordered, pursuant to 
Subcommittee Rule No. 11. I would note for the record that the 
witness will testify behind an opaque screen and no cameras 
will be permitted to photograph the witness from the area in 
front of the screen.
    Pursuant to Rule 6, all witnesses who testify before the 
Subcommittee are required to be sworn, so at this time, I would 
ask you remain seated, given the circumstances, but raise your 
right hand.
    Do you swear that the testimony you are about to give is 
the truth, the whole truth, and nothing but the truth, so help 
you, God?
    Mr. Broker. I do.
    Senator Collins. Thank you. ``Mr. Broker,'' you may proceed 
with your testimony.

 TESTIMONY OF ``MR. BROKER,''\1\ CONFIDENTIAL INFORMANT/FORMER 
                         CUSTOMS BROKER

    Mr. Broker. Madam Chairman and Members of the Subcommittee, 
at your request, I am here today to testify about fraud and 
deception in the food import process. Before I begin my 
testimony, I would like to thank this Subcommittee for 
respecting my request to keep my identity protected during this 
hearing.
---------------------------------------------------------------------------
    \1\ The prepared statement of ``Mr. Broker'' appears in the 
Appendix on page 137.
---------------------------------------------------------------------------
    Senator Collins. We will just ask you to speak right into 
the microphone. They are a little bit sensitive, and we want to 
make sure we can hear you. Thank you.
    Mr. Broker. I retired in February 1998, after serving 
almost 20 years as a Customs broker. As a broker, I was 
responsible for expediting imported cargo through U.S. Customs 
Service and other Federal agencies. I also assisted importers 
with ocean, air, truck, and rail transportation, as well as 
their insurance needs. In addition, I advised importers on the 
many different agency requirements for their products and I 
served several hundred clients with their shipments each month.
    As you stated, Madam Chairman, I recently pleaded guilty in 
Federal court in an ongoing Federal investigation and I am 
scheduled to be sentenced later this month. Consequently, I 
cannot discuss any details of the ongoing investigations in my 
case.
    I am appearing here voluntary in a sense of duty to correct 
the mistakes of the past. Today, I will discuss some of the 
various techniques used by problem importers to circumvent FDA 
and U.S. Customs Service laws and regulations. In the interest 
of time, I will summarize a written statement previously 
submitted to this Subcommittee and will focus on the three 
segments of food import process: Import shipments, refused 
shipments, and penalties for violations of import regulations.
    There are many ways in which the problem importer can avoid 
food safety inspections and introduce unsafe food into this 
country. An importer's main objective is to get their cargo to 
their buyers as quickly as possible, and if they are importing 
adulterated products, they want to avoid FDA and Customs 
inspection procedures. They look for ports that have lax 
examination procedures. Los Angeles--Long Beach and New York 
are two ports with the largest inbound volume and are 
considered the easiest ports of entry.
    Importers and brokers know which ports have the weakest 
import controls and this leads to port shopping. For example, 
in the San Francisco area, the FDA inspectors are much tougher 
than Customs, but in Los Angeles, the Customs inspectors are 
much tougher than FDA. It is much easier to import adulterated 
food through these ports just because of the volume.
    Imported food shipments may be inspected by the Customs 
Service, USDA, or FDA, and in some cases, all three agencies 
may inspect the same product. Customs inspectors are authorized 
to conduct either merchandise enforcement team, their MET 
exams, or CET exams, contraband enforcement team exams. Because 
these inspections by Customs are not focused on food safety, my 
experience has shown that these exams do very little to prevent 
adulterated food getting into the country.
    When the FDA decides to inspect or sample imported food 
products, it will normally take place at the importer's 
premises. The importer is required to keep the product intact 
from the time it leaves the port until the FDA approves the 
release into U.S. commerce. Importers can take the products out 
of the shipping container and place them in their warehouse, 
but they are supposed to keep the products intact.
    However, it is very easy for the importers to substitute 
products before FDA inspectors arrive. In some cases, the 
importer has from 2 to 4 weeks to prepare for FDA's arrival. 
This allows the problem importers to sell adulterated products 
and replace them with legal products from a subsequent 
shipment, all before the FDA inspectors arrive.
    Problem importers typically import large amounts of 
products that will not pass FDA inspection because these have 
the highest profit margin. In order to get these products 
through FDA inspections, importers will use a banking system. 
This is how banking is used to avoid inspection procedures and 
import unsafe food into the country.
    Importers will import some food items, referred to as 
``double clean,'' that will pass FDA inspection and store these 
items in their warehouses. When FDA arrives to inspect a 
shipment, the importer will provide the clean products for 
inspection. Once these pass inspection, the importer can reuse 
these items for future FDA inspections. Depending on the shelf 
life of the product, problem importers can use this scheme and 
these same products for months or even several years.
    The automatic detention procedures also present problem 
importers with an opportunity to avoid food safety inspections. 
If the FDA finds imported foods that are adulterated or 
problematic, the FDA may place these products on automatic 
detention. Many importers prefer to be on automatic detention 
because they have control over the product. Importers prefer 
automatic detention because of the lab reports that are coming 
from private labs that are chosen by the importers rather than 
FDA.
    Importers can submit as many samples as they like to the 
private labs for testing until they get a sample that will pass 
FDA's approval. In some cases, importers actually select the 
products to give the laboratory technicians for sampling. The 
food products supplied by the importers may not even be from 
the proper shipment.
    When dealing with refused shipments, even when food 
shipments are rejected and found to be adulterated, the current 
system still allows importers to sell the unsafe food. Problem 
importers, for example, may fill containers with trash or other 
items, but not the adulterated food products that the FDA has 
refused entry.
    When the truck driver arrives to the destruction site, the 
inspector may only weigh the container without examining the 
contents of the container. The importers may stack a few boxes 
of the refused product in the rear of the truck, thereby losing 
only a fraction of the original product. There also are 
importers who know the Customs inspectors very well and these 
inspectors may just sign off on the destruction documents 
without doing any verification.
    In addition, there are no sanctions against importers if 
they get caught destroying the wrong product. A truck driver 
can always say that he made a mistake and picked up the wrong 
cargo.
    Customs has very few controls over the reexportation of 
refused shipments. Importers may present Customs with different 
products to be reexported than the products that were refused 
entry. Importers also may export products, repack them, or try 
to reimport them again. Importers may even try to reimport into 
a different port.
    The penalty system used by Customs and the FDA to sanction 
problem importers when they try to bring unsafe food into the 
country is ineffective. Most penalties imposed are just written 
off as a cost of doing business. During my experience as a 
Customs broker, penalties levied by the U.S. Customs Service 
against problem importers do not serve as a deterrent for 
attempting to bring adulterated products into the United 
States.
    In fact, virtually every time importers were sanctioned, 
they were able to successfully get Customs to mitigate the 
penalties. Importers often say it was a mistake in order to 
deflect the blame of any violations or may go as far as having 
false fire or police reports presented to Customs to show that 
the products were either destroyed or stolen.
    This concludes my statement and I will try to answer any 
questions that you have.
    Senator Collins. Thank you very much.
    I know it is difficult to quantify the extent to which 
fraud and deception contributes to the food safety problems 
that we have in this country, but I want to ask you, based on 
your 20 years of experience as a Customs broker, how often does 
this happen, from your direct personal observations? Is it 
something that happens once a month or once a week or is it a 
common, everyday occurrence?
    Mr. Broker. From a small group of importers, it is every 
day, just every day.
    Senator Collins. So this is a widespread problem. It occurs 
in ports across the country and the ports, you seem to suggest, 
with the most volume are particularly vulnerable and an 
unscrupulous importer will port shop and try to hit a time when 
the volume is high, is that correct?
    Mr. Broker. That is very correct. Problem importers, they 
look for the high-volume ports. You would not want to go to 
Seattle, for example, where they have very little food imports. 
You would want to go to Los Angeles or New York, where the 
volume is so high and the inspections are so low that they 
virtually just pass right through.
    Senator Collins. You mentioned in your testimony, and this 
is the first time I have heard this, that even when an importer 
is caught and a preliminary penalty is assessed, that the 
importer in virtually every case that you personally knew about 
was able to get the penalty lessened, or mitigated. How is that 
done? How do importers convince Customs to lower the penalty?
    Mr. Broker. In many cases, they will submit documentation 
that they have exported or destroyed the product. They have 
said they made a mistake, any number of ways.
    Senator Collins. But is there not even a term of art among 
the importers called the ``big mistake'' letter?
    Mr. Broker. Oh, yes. There is always the ``big mistake'' 
letter.
    Senator Collins. Could you tell us, what is the ``big 
mistake'' letter?
    Mr. Broker. Well, they start off first, well, the supplier 
sent me the wrong shipment, or I do not understand English, or 
there----
    Senator Collins. This is done often enough that 
unscrupulous importers refer to it as the ``big mistake'' 
letter?
    Mr. Broker. Oh, it is just the ``big mistake'' letter and 
they just try to come up with any kind of idea they can. Many 
times, they have so much experience with dealing with U.S. 
Customs penalties, they find out which works one time and which 
works another and they will just continue to use that 
particular excuse at that time and then develop it for the next 
penalty. And since there is no tracking or very little 
tracking, I have seen probably over a dozen penalties that were 
over $300,000 that they were able to mitigate down to $100.
    Senator Collins. That is an important point that you made, 
about the lack of tracking. So a lot of times, the inspectors 
do not realize that there have been problems with the importer 
over and over again, is that correct?
    Mr. Broker. That is very correct. Many times, the importers 
are tracked by company name only.
    Senator Collins. Do the criminals in this business set up 
different companies under different names to try to circumvent? 
If they do get on what Customs referred to as the top 10 list, 
do they create a new corporate entity so it is harder to track 
them?
    Mr. Broker. Many of these companies will have three or four 
different names already in place. If one of these companies get 
into trouble, they will just shut it down and continue with the 
next company. I understand in Los Angeles, for about $500, you 
can set up a company with anyone's name as a corporation and 
just keep running.
    Senator Collins. Do you know of any cases where importers 
have been barred from the business as part of the penalties?
    Mr. Broker. None.
    Senator Collins. There was an issue that I meant to raise 
with Customs officials, and I am going to follow up, but they 
have developed this top 10 list of frequent violators. Why do 
they not just bar them from being in the business? But to your 
knowledge, that does not happen?
    Mr. Broker. It does not happen. I think that one of the 
deterrents might be they track with Social Security numbers of 
the people who are actually owning these companies.
    Senator Collins. One of the weaknesses that GAO has 
identified for us this morning is that the importer retains 
custody of the shipment of food that has been questioned by the 
FDA. The importer selects the food to be tested by the 
laboratory. The importer also selects the lab. There is a lot 
of excess trust built into the system, it seems to me. Please 
comment for us on how much you think that those weaknesses 
contribute to the ability of an importer to evade an order by 
the FDA to destroy or reexport the product.
    Mr. Broker. I will say that the largest number of importers 
are doing business correctly, but the small majority, they can 
avoid it very easily. They love to go on automatic detention, 
if they can.
    Senator Collins. Explain what that is for us.
    Mr. Broker. Well, if a food product--FDA finds a food 
product, such as rice sticks, which was mentioned this morning, 
it is automatic detention from Thailand because it is filthy 
case after case after case. FDA does not want to spend their 
resources running everything through their lab, so they have 
set up a lab or the private lab system. The importer must prove 
that its product is good to FDA.
    Senator Collins. So let me understand this. In the case of, 
for example, rice sticks, the FDA has determined that there 
have been continuing problems with this product----
    Mr. Broker. Correct.
    Senator Collins [continuing]. So it is put on an automatic 
watch list, essentially, an automatic detention list, and that 
means that the importer is required to test every shipment?
    Mr. Broker. Right, and present the lab report to FDA 
stating that this product is good.
    Senator Collins. And that is the key point, is it not, 
that----
    Mr. Broker. Exactly.
    Senator Collins. You have got to depend on the honesty and 
integrity of the importer.
    Mr. Broker. Correct.
    Senator Collins. Do you think it would help if the FDA 
retained custody of the shipment and put them in a government-
bonded warehouse?
    Mr. Broker. I think that is a very good idea, and have the 
bonded trucker also move the cargo because right there is a 
very large weakness in the system, because any trucker at all 
can move that cargo at this point.
    Senator Collins. Thank you.
    Senator Durbin.
    Senator Durbin. ``Mr. Broker,'' in your 20 years in the 
industry, did you work with exporters from a variety of 
different countries?
    Mr. Broker. Yes.
    Senator Durbin. Did you find that there was a prevalence of 
fraud and deception from any particular region or country?
    Mr. Broker. In my expertise, I primarily dealt with the 
Orient, but I do know from other brokers throughout the country 
that there are problems at every port with different groups. 
Obviously, on the West Coast, we deal primarily with Asia.
    Senator Durbin. Is there any particular country of origin 
that you consider to be problematic?
    Mr. Broker. In particular, China.
    Senator Durbin. When it comes to your experience in this 
area, can you recall any specific examples where you were 
involved in shipments of adulterated food into the country? We 
talked here for a moment or two about seafood shipments and the 
like. Can you recall any in your experience?
    Mr. Broker. Well, I have seen numerous types of things, one 
being pickled fish that was fermented and decomposed, basically 
being brought in as fish sauce. Fish sauce almost always just 
gets a clean pass. If FDA comes in to inspect, fish sauce is 
cheap enough to keep around as a bank to show any inspector.
    Senator Durbin. So they bank the clean fish sauce and the 
other adulterated product moves through?
    Mr. Broker. Right. Shark fin is another example. Shark fin 
can be valued anywhere from $20 a pound to $400 a pound, 
depending on the condition and the species. I have seen it come 
in as frozen skate, which is a fish, if it is frozen. If it is 
dried, it can come in as just virtually anything.
    Senator Durbin. One of the things that was suggested here 
by the GAO was marking shipments. Is that practical? Can that 
be done?
    Mr. Broker. That can be done, and that will probably stop 
quite a bit of the problem. But for problem importers, a carton 
costs about $1.25 apiece and just marking the outside carton 
will not deter some of these people who really want to get this 
product onto the market.
    Senator Durbin. So the challenge is how to mark the actual 
food product itself, if we can.
    Mr. Broker. That is right.
    Senator Durbin. That may be quite a challenge. I am not 
sure.
    Mr. Broker. That is quite a challenge. I was trying to 
think of ways that you could do that, and it would be very 
difficult unless you used dye in the boxes or something.
    Senator Durbin. Have you been party to any conversations 
where these importers have talked about the fact that the cost 
of doing business may include a fine or probation, which they 
are willing to run that risk because of the profit involved?
    Mr. Broker. Not specifically to the cost involved, but 
mainly the group of the importers that I have worked with in 
the past, they obviously do not like the penalties, but they 
would much rather pay the penalty than not be able to make 
their sale and get that product out on the market quickly.
    Senator Durbin. In one of the previous hearings, we talked 
about the complicity of employees of the Food and Drug 
Administration and other Federal agencies in these schemes. 
Based on your 20 years of experience, how prevalent is that? 
How common is it?
    Mr. Broker. U.S. Customs, I found to be outstanding.
    Senator Durbin. In terms of----
    Mr. Broker. In the inspectors being right on the ball and 
not looking for any additional profits, personal gain.
    Senator Durbin. Honest?
    Mr. Broker. Very honest. FDA, I think I have seen so many 
opportunities for them out there that that is where the problem 
has been.
    Senator Durbin. We talked earlier, I do not know if you 
were here, when the panel testified about the number of 
inspectors at FDA as opposed to some other Federal agencies. Is 
this common knowledge, that the FDA inspectors have a larger 
workload than some other agencies that are responsible for this 
inspection?
    Mr. Broker. Absolutely. If you have a problem shipment and 
you try calling FDA to discuss it, you are very lucky to get a 
phone call back because they are just overloaded, or trying to 
get an inspector out. We have had releases--it is basically a 
standard procedure that if a FDA inspector has been notified 
and in 2 weeks he still has not been able to get to the 
inspection site, they will release the cargo without 
inspection.
    Senator Durbin. One of the other things that was discussed 
was whether or not there is sufficient inspection, for example, 
that the Customs Service does get inside a box to determine 
what the contents actually are as opposed to the manifest or 
what is written on the outside of the box. What has been your 
experience in that regard?
    Mr. Broker. Well, Customs inspectors, taking, as an 
example, the CET teams, they are looking for drugs. If it is 
not a drug, they do not care. The box just moves. MET teams are 
more thorough, but if the invoice says that it is noodles and a 
MET team inspector goes up and looks at rice sticks and it says 
noodles on the box and it looks like a noodle, it is a noodle.
    Senator Durbin. So in terms of breaking open the package, 
taking a close look at the contents, is that a rare occurrence?
    Mr. Broker. It is a fairly rare occurrence.
    Senator Durbin. Thank you very much for your testimony.
    Senator Collins. Thank you very much. I want to thank you 
for your testimony today and for providing assistance to the 
Subcommittee staff as we attempt to get a handle on this.
    I think perhaps the most shocking statement that you made 
today was the fact that there was in one case a $300,000 
penalty----
    Mr. Broker. Several cases.
    Senator Collins [continuing]. Several cases where that was 
lowered, ended up being only a $100 fine.
    Mr. Broker. Correct.
    Senator Collins. I just wanted to make sure I heard that 
correctly.
    Mr. Broker. That is correct.
    Senator Collins. Thank you very much for your 
participation.
    I would ask that everyone remain seated for just one moment 
prior to my adjourning the hearing so that ``Mr. Broker'' may 
exit the room. And again, I would remind any cameras, if there 
are any here, to please refrain from taking any pictures while 
the Capitol Hill Police escort the witness from the hearing 
room.
    Senator Collins. I want to thank Senator Durbin for his 
participation in the hearing today. He has been a real leader 
in the food safety area and I know we are going to continue to 
work closely on this as we turn to the next stage of this 
investigation.
    Today's hearing, which focused on fraud and deception in 
the food import process, highlighted a very disturbing problem, 
and that is that unsafe food contaminated with dangerous 
pathogens is distributed in this country, in part because of 
weak import controls, poor coordination among Federal agencies, 
and low penalties for violating food safety regulations. The 
chances of the FDA catching contaminated products through 
inspections at the border, we know is very low, given the low 
number of inspections, but what is more disturbing to me is the 
fact that even when a shipment has been detained, that it so 
frequently makes its way into the American marketplace. That is 
simply unacceptable and we have to have a better system in 
place.
    As I mentioned in my opening statement, this hearing is the 
third in a series of hearings. We will now turn to the remedy 
stage of the investigation process. We will hold 2 more days of 
hearings on September 24 and 25. The first day will give 
Members of Congress and Executive Branch officials the 
opportunity to provide recommendations for improving our 
Nation's food import system. On the second day, the 
Subcommittee will hear from a wide variety of private sector 
groups.
    With that completion of our hearings, I look forward to 
working in the next few months with my colleagues in the 
Congress as well as the Executive Branch and the private sector 
to develop some legislation to really address this issue.
    Again, I want to thank all of our witnesses today for their 
testimony. We will keep the hearing record open for an 
additional 10 days in case Members have any additional 
questions.
    I also want to thank my very capable PSI staff for their 
usual excellent job in this area.
    The Subcommittee is now adjourned.
    [Whereupon, at 11:25 a.m., the Subcommittee was adjourned.]


             IMPROVING THE SAFETY OF FOOD IMPORTS--PART IV

                              ----------                              


                      THURSDAY, SEPTEMBER 24, 1998

                                       U.S. Senate,
                Permanent Subcommittee on Investigations,  
                  of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:06 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan M. 
Collins, Chairman of the Subcommittee, presiding.
    Present: Senators Collins, Levin, Lieberman, and Durbin.
    Staff present: Timothy J. Shea, Chief Counsel/Staff 
Director; Mary D. Robertson, Chief Clerk; Christopher A. Ford, 
Senior Counsel; Mary G. Mitschow, Counsel, Don Mullinax, Chief 
Investigator; Kirk E. Walder, Investigator, Stephanie A. Smith, 
Investigator; Lindsey E. Ledwin, Staff Assistant; Pamela 
Marple, Minority Chief Counsel; Beth Stein, Counsel to the 
Minority; Brian Benczkowski (Senator Domenici); Michael Loesch 
(Senator Cochran); Felicia Knight (Senator Collins); Nanci 
Langley (Senator Akaka); Marianne Upton (Senator Durbin); Lynn 
Kimmerly (Senator Cleland; Kevin Landy (Senator Lieberman); 
Jeffrey Goff (Senator Cochran); Pam Maku (Senator Specter); 
Tyler Wegmeyer (Senator Cochran); and Antigone Popamianos 
(Senator Levin).

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Senator Collins. The Subcommittee will please come to 
order. Good morning. I want to apologize for the late start 
today. We are unfortunately in the midst of a series of votes, 
so we may have to come and go during this hearing, but we will 
try to keep the recesses and interruptions as brief as 
possible.
    In June 1997, the Permanent Subcommittee on Investigations 
began an in-depth investigation into the safety of imported 
food, with particular focus on imported fruit and vegetables. 
Over the last 14 months, Subcommittee investigators have 
consulted with representatives from 27 industry, consumer, and 
science-based organizations, as well as with officials from the 
General Accounting Office and seven Executive Branch agencies. 
We have reviewed, as part of our investigation, thousands of 
pages of documents, conducted in-depth interviews with 25 
experts, and heard testimony presented by 13 witnesses at three 
previous Subcommittee hearings.
    Our prior hearings have covered a great deal of ground. In 
our first hearing we discussed the findings of a General 
Accounting Office study examining the prevalence of foodborne 
illnesses and exposing serious deficiencies in Federal efforts 
to ensure the safety of imported food. In our second hearing we 
undertook a case study of dangerous microorganisms carried into 
the United States on imported fruit--raspberries from 
Guatemala. In our third hearing we examined how weak controls 
exploited by unscrupulous importers can completely undermine 
the food safety net that is intended to protect American 
consumers.
    These issues are literally life-and-death matters for many 
Americans. As we learned at our previous hearings, the very 
old, the very young, and the very ill are most at risk for 
foodborne illnesses that cause as many as 9,000 deaths each 
year in our country.
    In today's global economy, we import a huge volume of food 
from all over the world. In 1996, for example, we imported some 
$7.2 billion worth of fruit and vegetables alone from at least 
90 different countries. Most of this food, I want to emphasize, 
is perfectly safe and provides Americans with an enriched diet 
and the year-round variety that we enjoy. But far too often, 
contaminated products, from domestic as well as imported 
sources, reach the tables of American families, causing more 
than 80 million cases of foodborne illnesses each year.
    This investigation has revealed much about the food we 
import into this country and how our government attempts to 
protect Americans from unsafe food. Over the course of the past 
several months, we have learned that Americans are eating more 
and more food produced in foreign nations. Shipments of 
imported food have doubled over the past 5 years, and that 
amount will only continue to grow.
    Foodborne illnesses have a significant impact on public 
health as well as a substantial economic impact. Maintaining 
the food safety net for imported food is an increasingly 
complex task, made more complicated by previously unknown 
foodborne pathogens like Cyclospora.
    Since contamination of imported food can occur at many 
different places from the farm to the table, the ability to 
trace back outbreaks of foodborne illnesses to the source of 
contamination is a complex process that requires a coordinated 
effort among the Federal Government, State agencies, and local 
agencies.
    Because some imported food can be contaminated by organisms 
that cannot be detected by visual inspection or laboratory 
tests, placing additional Federal inspectors at ports of entry 
alone is not sufficient to protect Americans from unsafe food 
imports.
    Federal agencies have not effectively targeted their 
resources on imported foods posing the greatest risks. In the 
words of the GAO, Federal efforts are ``inconsistent and 
unreliable.'' Weaknesses in FDA import controls, specifically 
the ability of importers to control the food shipments from the 
port to the point of distribution, allow unsafe food to enter 
the American marketplace.
    The civil penalties imposed on importers who violate food 
safety regulations are so low that they are often considered as 
simply a cost of doing business. And, finally, the enforcement 
of existing criminal laws provides little deterrence for 
unscrupulous importers.
    These are some of the Subcommittee's preliminary findings, 
based on our hearings and investigation to date. Today, based 
on these and related findings, we will take the next step in 
our investigation by hearing recommendations from a wide range 
of witnesses on how we can correct the flaws in the current 
system, which I have just enumerated, and what changes need to 
be made in Federal practices, regulations and laws.
    My goals are to help ensure that food safety programs are 
effectively managed; that existing resources are focused on 
those imports posing the greatest risk of harm to Americans, 
and that deficiencies in the underlying regulations and laws 
are remedied.
    Ensuring the safety of food imported into the United 
States, we have learned, is a very difficult and complex task. 
Countries have different food production and handling 
practices, regulations and standards. Different regions of the 
world also have different indigenous microorganisms and other 
pathogens to which the local population--but often not American 
consumers--may be immune.
    As long as food imports continue to grow, these variations 
will continue to have a significant impact on the safety of our 
food imports. Moreover, new threats are developing all the 
time. Some harmful organisms, such as Cyclospora, cannot be 
detected through visual inspections or even through lab tests, 
and they have emerged as dangerous to Americans only within the 
past few years.
    A mosaic of Federal laws and regulations, including at 
least 35 Federal statutes, govern this process. In addition, 
each of our 50 States has its own food safety and inspection 
system, making an important contribution to the Nation's food 
safety net.
    Today and tomorrow, our hearings will focus on how the 
Congress, the administration, State and local authorities, and 
the private sector can work together to strengthen our food 
import system. As we consider granting new authority and 
allocating new resources, we must be sure that current laws are 
vigorously enforced and that existing resources are efficiently 
spent. More money alone will not fix a broken system.
    We will hear today from two panels of witnesses, foremost 
among them my colleagues Senator Paul Coverdell of Georgia, 
Senator Barbara Mikulski of Maryland, and Senator Ted Kennedy 
of Massachusetts. Each of these Senators has a strong interest 
in food safety issues, and I look forward to hearing their 
testimony and recommendations. I also suspect that each of them 
is still on the floor voting, but we may be having them join us 
shortly. I also see from the witness table that Senator Harkin, 
who has been a leader in this area, is also expected to join us 
this morning.
    Our second panel of witnesses includes senior Federal 
officials from the primary Executive Branch agencies with 
responsibility for the safety of imported food, including 
representatives of the FDA, the Customs Service, and the Food 
Safety and Inspection Service of the Department of Agriculture. 
They will be joined by a member of the Food Safety Committee of 
the National Academy of Sciences.
    We look forward to hearing from all of our witnesses today, 
and to exploring ways to improve our food safety system. I 
would note that tomorrow's hearing will feature witnesses 
representing industry and consumer groups, and a wide variety 
of organizations will be represented.
    It is my understanding from the staff that Senator Kennedy 
is on his way, so we will just be in recess for a few moments 
awaiting the appearance of my colleagues.
    [Recess.]
    Senator Collins. We have now been joined by the 
distinguished Senator from Connecticut, and I will call upon 
him for any opening comments that he might have.

             OPENING STATEMENT OF SENATOR LIEBERMAN

    Senator Lieberman. Well, thanks, Sue, very much. Madam 
Chairman, I am very pleased that once again you have put 
together an excellent hearing with a very good group of 
witnesses. I gather that we may hear at some point from our 
colleagues, whose spirits are with us, so in absentia we will 
thank them for their dedication to this important issue, the 
safety of our food supply.
    In addition to the Senators testifying today, two of our 
colleagues on the Subcommittee have also introduced legislation 
relating to food safety. Although all of these bills, I think, 
take different approaches, they do not take contradictory 
approaches, and I think they are all constructive pieces of 
legislation that we will want to consider.
    The safety of our food supply is an issue which should 
unite everyone in this country and even in this legislative 
body of ours. Our common enemies here are unseen pathogens 
which can strike thousands of Americans and make them ill. 
There are unscrupulous importers, enemies of ours, who 
knowingly risk grievous harm to others for an easy buck. And, 
finally, the common enemy we have here is our own failure to be 
vigilant.
    I think that the hearings that you have organized and have 
presided over, Madam Chair, have contributed substantially on 
each of these fronts, and now to our understanding that there 
is a real problem out there that affects the well-being, the 
health of millions of our fellow Americans, indeed of our own 
families, and now it is time to move to solutions. You will 
allow me, I hope, the pun of saying notwithstanding what we 
have learned previously, I am hungering for solutions.
    And I look forward in that spirit to the testimony of our 
witnesses today, and thank you again for your leadership.
    Senator Collins. Thanks very much, Senator. I see that we 
have begun yet another vote. I suspect that the Senators who 
will be testifying will wait and vote first, so I am going to 
do likewise, so we will suspend the hearing for about 10 
minutes.
    [Recess.]
    Senator Collins. The Subcommittee will be in order.
    We are very honored this morning to have a distinguished 
group of our Senate colleagues with us. They each have a keen 
interest and much expertise in the area of food safety.
    We are going to begin with the distinguished Senator from 
Georgia, Paul Coverdell, who is the Chairman of the Agriculture 
Subcommittee on Marketing, Inspection and Product Promotion. He 
is a leader in the Senate on issues related to food safety and 
imports, and earlier this year introduced his own legislation, 
which innovatively increases and targets food safety research 
and education programs. If you would, please proceed, Senator.

TESTIMONY OF HON. PAUL COVERDELL, A U.S. SENATOR FROM THE STATE 
                           OF GEORGIA

    Senator Coverdell. Thank you, Madam Chairman. I am most 
pleased to have the opportunity to testify before the Permanent 
Subcommittee on Investigations to discuss this issue of great 
importance, food safety. I would like to thank Senator Collins 
for holding these hearings on the safety of imported food and 
bringing this issue the proper attention it deserves, and I am 
pleased to be here today with my colleagues, Senators Kennedy 
and Mikulski.
    This is an issue in which I have taken special interest as 
Chairman of the Senate Agriculture Subcommittee with 
jurisdiction over food safety issues, and as Foreign Relations 
Subcommittee Chairman for the Western Hemisphere. I have long 
been interested in maintaining our high standards of food 
safety while we have become increasingly active with our 
hemispheric trading partners, particularly in fruit and 
vegetables. With this growth in imports, I have advocated a 
commensurate growth in resources necessary to understand and 
address the challenges we face in maintaining our food safety 
standards.
    The public is also becoming concerned with the safety of 
their food. Over the past year there have been increased 
reports of foodborne illnesses. GAO reported in May 1996 up to 
81 million cases of foodborne illnesses, what we just talked 
about, Madam Chairman, and 9,100 deaths occur each year in the 
United States, and this is certainly cause for concern. I 
believe that we should take a thoughtful, well-researched 
approach to addressing the problem.
    There have been well-publicized cases of food safety 
problems, to be sure. Recently both children and adults became 
ill with Hepatitis A from contaminated strawberries distributed 
to schools through the USDA school lunch program. There was an 
outbreak of E. coli 0157H7 which prompted the massive Hudson 
beef recall, and recent problems with this same pathogen in my 
State, where over 20 school children were stricken and 
hospitalized with this deadly ailment. We have seen problems in 
products as diverse as ground beef and apple juice.
    I believe that protecting our Nation's food supply should 
be a high priority for Congress and this administration. We can 
do better, and we will, if we set the right course. With 
technology advancing at lightning pace, there is no excuse not 
to develop and significantly improve our food safety for the 
21st century.
    This is one area where food producers may be ahead of the 
processors, albeit with their government regulators, in 
technology, but this can certainly be changed with the proper 
focus. We are increasingly becoming a global economy. 
Agricultural trade is on the rise and is of permanent economic 
importance to American agricultural producers.
    This places more emphasis, of course, on our hemispheric 
trade of perishables such as fruit and vegetables. Farmers in 
foreign countries, particularly in Central and South America, 
can harvest, pack and ship to the United States in short order, 
with their products sometimes on the grocery shelves as quickly 
as 24 hours later.
    These new food supply options have been of great benefit to 
consumers in the country, allowing a wider availability of 
products throughout the year. I would imagine that the 
Chairman's constituents are often the beneficiaries of these 
new suppliers in times where domestic products just aren't 
available.
    So these systems are very important to our food supply, but 
they are not without new challenges of food safety. These 
challenges have prompted various legislative responses. All, I 
believe, are well-intentioned. There are proposals currently 
being considered which give Federal agencies, specifically for 
today's business, the Food and Drug Administration, FDA, 
additional regulatory authority in erecting more barriers 
before foods can be imported into the United States.
    I believe we should be cautious and thoughtful before 
enacting such legislation because it will likely have complex 
ramifications without proof that it will actually improve food 
safety. I am not opposed to this approach, but I do think there 
are many questions to be answered before granting such broad 
authority to FDA.
    Before we do this for any agency, we need to ensure that 
the current systems in place are actually working and that we 
are not overlooking obvious holes in them. I was extremely 
concerned with how our Federal agencies are operating after 
reviewing the April 1998 General Accounting Office report 
entitled ``Food Safety: Federal Efforts to Ensure the Safety of 
Imported Foods Are Inconsistent and Unreliable.''
    The GAO report stated that the Food and Drug 
Administration's procedures for ensuring that unsafe imported 
foods do not reach U.S. consumers are vulnerable to abuse by 
unscrupulous importers. This type of abuse must be stopped. 
There needs to be a system in place which guarantees when the 
FDA discovers imported contaminated food, it is either 
reexported or destroyed in a timely fashion.
    In addition, the GAO report found that the Food Safety and 
Inspection Service and the Food and Drug Administration are not 
deploying their inspection resources to maximum advantage. The 
GAO report also showed problems with importers port-shopping, 
and the FDA's inability to properly control the selection of 
the samples tested by private laboratories or to certify 
acceptable private laboratories.
    These are just a handful of the problems cited by the GAO 
which Congress and this administration need to address. From my 
own experience, I saw produce sit on the tarmac at Miami 
Airport for hours before being inspected, I might add, at 
horrendous temperatures. This can't be good for the produce or 
the consumer.
    Further, I saw the sheer volume of products coming to the 
United States from other nations, and quickly recognized that 
technology was the key to this food safety. Simple manpower, 
while helpful, will not fully address our food safety needs. We 
need more advanced and scientific solutions to these problems. 
There have been positive steps taken by the FDA in this regard. 
They have often acted professionally and constructively in 
working with other nations to address food safety problems.
    My personal experience has been with the Guatemala 
raspberry project. The FDA and Center for Disease Control and 
Prevention have done an excellent job in working with the 
Guatemalan Government and the Guatemala Berry Commission to 
develop what will likely be a food safety model for other 
nations in the hemisphere. Upon CDC's realization of the 
problems with Cyclospora associated with Guatemalan 
raspberries, they joined the Guatemalan producers and the FDA 
in working tirelessly to develop a safer system of production.
    The result was the model plan of excellence. This plan was 
designed in an effort to mitigate all potential hazards in the 
production of these raspberries, and is based on our Hazard 
Analysis Critical Control Point system. It has undergone the 
highest level of scrutiny by the Guatemalan Government and the 
FDA, and is expected to be a breakthrough system for the 
raspberry industry and potentially others like it.
    I have personally toured a farm that qualifies under the 
model plan of excellence, and I must say that I was most 
impressed by its level of sophistication and by the dedication 
of those producers working to develop it. Impressive also was 
the commitment to food safety of those industry and government 
officials I met in Guatemala. It was encouraging to see that 
our government agencies could pay such an active role in 
addressing, at its root, not a problem affecting a multitude of 
consumers.
    I will not belabor the model plan of excellence, which I 
hope will be a successful program for the advancement of food 
safety, but I do hope that the Chairman will have an 
opportunity, either through an inquiry or testimony, to hear 
more about this unique project from the Food Marketing 
Institute, who I understand has been instrumental in working 
with the growers and FDA in its development.
    My point in mentioning this project in Guatemala is to show 
that cooperation can exist between parties interested in 
improving food safety, and it is going to be necessary for this 
to occur if we want to better understand the complexities of 
the new food sources. I must say, as an aside, that even to the 
level of the President of the country there was a commitment to 
engage this issue and resolve it.
    In summary, I believe that we need to place a greater 
emphasis on food safety consumer education, research, and 
prevention efforts in order to maintain our safe food supply. 
It is highly unlikely that Federal agencies can ever ensure 
that foods are 100 percent safe for consumers, so it is 
important for consumers to be well-prepared and educated on how 
to prevent potential risk in their food supply.
    Earlier this year I introduced a comprehensive food safety 
proposal, the Food Research, Education, Safety and Health Act 
of 1998, S. 2025, also known as the FRESH Act, which will 
provide additional tools necessary to improve our overall food 
safety. This legislation focuses on consumer education, 
research and prevention efforts.
    It authorizes consumer education block grants to the 
States; establishes a Food Safety Council in which the 
administration seems to be interested with their recent 
announcement to establish such a group; promotes risk 
assessments for animals, fruit and vegetables; and encourages a 
variety of other activities which I feel are aimed at improving 
food safety. In deference to the Chairman's time and intent 
this morning, I will not discuss the food safety bill, but will 
look forward to working with Members of the Subcommittee and of 
this panel to develop a proper food safety initiative.
    I do hope that some of my comments and experiences have 
been helpful in outlining the approach that I would like to see 
Congress take--studied and targeted. I look forward to 
reviewing Senator Mikulski's proposal and continuing to work 
with the Chairman and her staff on this most important issue. 
Again, Madam Chairman, thank you for allowing me to testify and 
for your leadership on this issue.
    Senator Collins. Thank you very much, Senator, for sharing 
with us your extensive experience and insights into this area. 
I know that we are running behind schedule, so if any of the 
Senators before us have to leave, we will submit questions for 
the record.\1\
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    \1\ Questions for the record appear in the Appendix on pages 466-
482.
---------------------------------------------------------------------------
    Senator Coverdell. Thank you.
    Senator Collins. I am now very pleased to call upon my New 
England neighbor, Senator Kennedy, who is the Ranking Democrat 
on the Committee on Labor and Human Resources, which has 
jurisdiction over many of the food safety issues. Senator 
Kennedy, welcome.
    Senator Kennedy. Well, thank you very much, Madam Chairman. 
Since the principal sponsor of the legislation, which I am 
interested in, is co-sponsored by my friend and mutual 
colleague, Senator Mikulski, I would be glad to yield. And then 
if she possibly leaves out one possible point, which I doubt 
that she will, I will just make a very brief comment and then 
submit my full statement. But perhaps we could recognize her 
first, and then I will make a brief comment after.
    Senator Collins. I would be happy to.
    Senator Mikulski, it is a great honor to welcome you to the 
Committee. I know you have had a longstanding interest in this 
area and have been a real leader, and I have enjoyed our 
discussions on this issue, and look forward to working with you 
and hearing your testimony.

TESTIMONY OF HON. BARBARA MIKULSKI,\2\ A U.S. SENATOR FROM THE 
                       STATE OF MARYLAND

    Senator Mikulski. Well, thank you very much, Senator 
Collins, and in the interest of time, because I know we got a 
late start as well, I would like to ask unanimous consent that 
my entire statement be placed in the record.
---------------------------------------------------------------------------
    \2\ The prepared statement of Senator Mikulski appears in the 
Appendix on page 142.
---------------------------------------------------------------------------
    Senator Collins. It will be.
    Senator Mikulski. And I am very delighted to be here with 
you and Senator Lieberman this morning, and would like to 
congratulate the Permanent Subcommittee on Investigations for 
looking into this issue.
    Far too often the American people have been scared because 
they pick up the paper and read about yet one more outbreak of 
foodborne illness: The killer raspberry, the suspicious 
cantaloupe, the juice that was unpasteurized that resulted in 
severe illness in children. And what we need to do is not only 
manage the panic and manage the fear, but do that by coming up 
with really sensible solutions.
    I believe your previous hearings have really laid the 
groundwork on what the nature of the problem is, in taking it 
out of headlines and bringing it into Congress to look at how 
we can protect the public health of the American people. I 
congratulate you on this, and in my own way, working with 
Senator Kennedy, have tried to come up with, again, a sensible 
solution.
    We agree what our principles are that every person should 
have confidence that their food is fit to eat. We also need to 
be confident that imported food is as safe as food produced in 
the United States of America.
    We also recognize that our food supply has gone global, so 
we need to have global food safety, yet recognizing the 
national sovereignty of other nations. The statistics speak for 
themselves. We know that now over 40 percent of our food, 
particularly in fruit and vegetables, is imported. Farm produce 
that crosses our borders also must be safe.
    Now, we have rules on imported products where we guarantee 
safety. Cars can't be imported to the United States unless they 
meet safety requirements. Prescription drugs can't come into 
the United States of America unless they meet FDA regulations. 
So you shouldn't be able to import food that isn't up to U.S. 
standards, either, because those safety standards are 
absolutely crucial.
    You could go your whole life and never drive a car. You 
might only take a prescription drug for emergency situations. 
Yet you eat food every single day, which is why we need to be 
both vigilant and effective.
    We can go over those problems, and I know Senator Coverdell 
and others have indicated what they were: The imported 
strawberries that infected Michigan children with Hepatitis A; 
the whole issue around vegetables and juices that resulted in 
these illnesses. I know you have documented that as many as 81 
million Americans become ill each year and over 9,000 die as a 
result of food-related illnesses.
    Now, some are problems in our own country, where people 
don't follow the basic practices of public health, personal 
hygiene, and basic sanitation. But at the same time, what is 
now happening is that, because of the all-year-round growing 
cycle around the world, more and more food is coming into this 
country.
    What is the FDA doing? Well, their system has been 
documented by GAO and by their own declaration, is they do it 
at the dock, looking at individual shipments. Well, colleagues, 
you can't ensure our food safety one raspberry at a time, and 
that is essentially what it is: One dock, one pier, one port, 
one raspberry at a time. So we need to look for other 
solutions.
    I have been fortunate enough to be able to be in the State 
of Maryland where we have the Johns Hopkins School of Public 
Health, and they have instilled in me the concept of public 
health. What is public health? One, epidemiology; know where 
the problems are; go to the root cause. So if you treat 
malaria, you don't do it by slapping it on your arm; you go to 
the swamp. Also, the issue is prevention. Look at the systemic 
issues and then deal with it.
    Our food safety bill, that is sponsored by Senator Kennedy 
and me really follows a public health model. What it does is 
give the FDA authority to ban imported food from the United 
States if it was grown or handled under unsanitary conditions 
that do not meet the same as U.S. level of protection. The bill 
allows the FDA to ban foods from places that deny the FDA the 
right to inspect their production processes, and the Secretary 
of Health would develop the plan for the implementation.
    What this bill actually does is improve the imported food 
processes of the FDA, and it aims at preventing foodborne 
illness of all imported food. It places emphasis on the 
underlying food system at the food source, which is ultimately 
a more preventive way of addressing it. By allowing FDA to 
consider a nation's food safety system and make recommendations 
in compliance with our rules and World Health Organization 
practices, we can deal with this.
    There are several things that I want to be careful that we 
know it does not do. It does not violate any nation's 
sovereignty. That is not our business. It does not shut our 
borders or immediately deny food entry. It doesn't require 
inspections or access without consent of a nation. In fact, it 
doesn't create any of those new inspection authority.
    But it does enable the FDA to evaluate, working with the 
other nations, what their food supply is. What this bill will 
do is really significant. It will provide FDA with a more 
effective enforcement tool, the ability to use its resources 
more effectively, and also, by looking at what we can do with 
other countries--like the Guatemala situation, the way Senator 
Coverdell just talked about his work with them--particularly 
Latin American and Central American countries.
    We will not only--by looking at the systemic issues, 
bringing to bear and encouraging public health practices in 
compliance with their own standards and World Health 
Organization basic public health recommendations--ensure the 
safety of our food supply, but we will help a nation upgrade 
its food supply for its own internal consumption. I think 
that's pretty good because this is working with other nations 
and being able to do this. And if these steps are not taken, 
then the penalty will be that they can't bring their food to 
the United States of America.
    Let me conclude by saying this: Yesterday the Labor and 
Human Resources Committee voted to approve Dr. Jane Henney's 
nomination as FDA Commissioner. Hopefully the Senate will 
confirm Dr. Henney and we will have a permanent Commissioner of 
FDA.
    Over 4 years ago I joined with another member of your 
party, Senator Nancy Kassebaum, and we embarked upon a historic 
effort, which was to modernize our FDA in terms of its 
pharmaceutical drugs. We sought then something called the 
sensible center, where we pulled together the best ideas and 
the best practices, checked our party hats at the door, and 
worked in the national interest. America is better off because 
of that effort, and it is one of my proudest accomplishments.
    I look forward to doing the same thing with you, to be able 
to work now; if we can't get a hearing this time before we 
adjourn, and action, that between now and the time we 
reconvene, perhaps Members of your Subcommittee and we could 
meet with you and Dr. Henney, get a framework, and hopefully 
that by the beginning of the next session we will be able to 
introduce legislation that represents the sensible center, 
protects Americans' food supply, recognizes that we want a cash 
crop coming from overseas. I would rather have raspberries than 
some of the other stuff they are being exporting to this 
country. And we will really help their own country and help 
them, as well.
    Thank you.
    Senator Collins. Thank you very much, Senator. Don't take 
this as a political endorsement, but I do very much look 
forward to working with you on legislation that we can 
introduce in the next Congress.
    Senator Mikulski. Oh, I won't take it as a political 
endorsement, but I hope others will. [Laughter.]
    Senator Collins. Thank you.
    Senator Kennedy.

 TESTIMONY OF HON. EDWARD KENNEDY,\1\ A U.S. SENATOR FROM THE 
                     STATE OF MASSACHUSETTS

    Senator Kennedy. Thank you, Madam Chair, and I would like 
to submit my statement in the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Kennedy appears in the 
Appendix on page 144.
---------------------------------------------------------------------------
    I want to thank you, Madam Chair, for the good work that 
you have been doing and this Subcommittee has been doing to try 
and make our food supply safer. I think it has been enormously 
important, and many of us have been following the hearings that 
you have had.
    I commend you for the range of witnesses that you have 
today and tomorrow. You really have lucked out to get the best 
in the country. I know we have got many behind us here who can 
speak with enormous competency about this issue, so I will be 
very brief.
    I want to acknowledge the leadership of my friend and 
colleague Senator Mikulski on this issue, with the introduction 
of the legislation and her constant pursuit of a safer food 
supply.
    My friend Senator Harkin, who has been really an 
outstanding leader, was the offeror of the amendment which is 
in the conference now in terms of increasing food safety 
funding, so that we are going to be able to take immediate 
steps prior to the time that we leave this year, to make sure 
that we are going to bring the resources at the FDA to a more 
legitimate level to provide for the kinds of protection 
Americans expect. I know he will outline the reasons for that, 
as we all heard him on the floor convincingly, and the 
overwhelming vote, bipartisan, to try and give the kinds of 
resources to the President's Food Safety initiative.
    We are all mindful of the additional kinds of challenges 
that we have given to the FDA in recent times. We have given 
them not only the new legislation of last year. We have given 
them increased responsibilities in terms of food safety. We 
gave them natural food legislation, many other different 
responsibilities, without giving them additional kinds of 
resources, so they have been very pressed in recent times.
    But I would suggest, as has been mentioned here, that we 
are seeing the dramatic increase in imports that all of us 
understand because of the changed kind of eating habits that 
have taken place here in the United States. At the same time, 
we must also note the fact, as Senator Mikulski has pointed 
out, that we are only inspecting a very, very small, 1.7 or 
less than 2 percent of all the products that come here.
    But let me just give special urgency to not only the GAO 
report but the Center for Disease Control report. It really 
puts into perspective the fact that we are not just talking 
about the quantity that is coming in--but it also is the change 
in these foodborne diseases which are coming in. For half of 
the illnesses and sicknesses from foodborne diseases, we don't 
even know their cause.
    We have seen these dramatic changes that are taking place 
in terms of the food that is coming into these United States, 
that is providing a very significant and important public 
health risk. So it isn't just the flow line in terms of the 
amount and the changed kind of interest of the American 
consumer, but it is the various products themselves that are 
coming in here, into a population that is changing, that is 
becoming more vulnerable to some of these foodborne diseases. 
Populations are coming here to the United States, are coming 
from different kinds of societies that have different kinds of 
challenges that are related to the various pathogens 
themselves.
    The resistance of various bacteria to some of the 
prescription drugs we have is a matter of enormous importance. 
In many respects, this hearing, I think, and this legislation, 
are of monumental importance. All American families assume that 
when they go to that supermarket, it is going to be safe and 
secure for themselves, and particularly for their children.
    I think we are at the cusp of a very, very important and, I 
think, dangerous period, where we are going to have to make 
sure, if we are going to insist that our food supply is going 
to be the safest, that we are going to take certain kinds of 
steps at the beginning. Senator Coverdell has got some ideas, 
but I basically believe that what we have to do is go back and 
look, give the FDA the authority, as Senator Mikulski has 
outlined, to work with other countries to ensure that they have 
adequate systems in place.
    It is in the countries' interest. It may take some time 
before they believe it, but after they get that stamp of 
approval, it is going to expand their opportunities for 
marketing. And it is also really in the interest of the United 
States. I will just end with this.
    I know that there are certain interest groups that want to 
resist this approach--for a variety of different reasons that 
you will hear about. But the fact is, when they get bad 
strawberries that come from Guatemala, people stop eating 
strawberries in Massachusetts. If they get bad raspberries, 
people stop eating them. If they know that these are going to 
have the good stamp of approval, the opportunity for expansion 
of trade for these countries, I think, expands dramatically. We 
have figures and statistics that demonstrate it. I won't get 
into that, but I think it is pretty self-evident.
    So I would hope as you go through, Madam Chair, that you 
will give particular emphasis to the kinds of recommendations 
and the kind of concerns that are reflected in the Center for 
Disease Control's report, because I think that they have 
outlined the real serious challenge that we are going to be 
facing for a safe food supply. I believe that the legislation 
that Senator Mikulski and others have supported, that I know 
that you are interested in and reviewing carefully, will at 
least give us the opportunity to make a very, very important 
contribution in giving the American families the assurances of 
a safe food supply.
    And I thank the Chair.
    Senator Collins. Thank you very much, Senator Kennedy. We 
very much appreciate your taking the time to appear this 
morning.
    I am now pleased to call on Senator Tom Harkin. Senator 
Harkin has been very helpful to this Subcommittee on a wide 
variety of issues. I think you testified at the very first 
hearing that I held on Medicare fraud. And I am pleased to 
welcome you today in your position as Ranking Minority Member 
of the Senate Agriculture Committee, and as a Member of the 
Appropriations Committee. You may proceed, Senator.

TESTIMONY OF HON. TOM HARKIN,\1\ A U.S. SENATOR FROM THE STATE 
                            OF IOWA

    Senator Harkin. Thank you, Madam Chair. I am beginning to 
feel like a regular at this Subcommittee, a witness or 
something like that.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Harkin appears in the 
Appendix on page 145.
---------------------------------------------------------------------------
    But I do applaud you because you are using your 
Subcommittee to look into areas in your investigative role, and 
to bring to light concerns that affect people around this 
country, and I applaud you for that, Madam Chair. You are doing 
a really good job with this Subcommittee in a variety of areas, 
and this is just another one where as I heard Senator Kennedy, 
Senator Mikulski, and Senator Coverdell say before I got here, 
this is a tremendously growing concern among the American 
populace.
    I share with you a poll that came out in the Des Moines 
Register just 2 days ago, and the headline is ``Food Safety Is 
Consumers' Top Concern.'' Listen to this:
    ``When asked to rate the importance of food safety as a 
public issue, 89 percent of the consumers surveyed rated it as 
very important,'' and it beat out crime prevention at 82 
percent. They are more concerned about the safety of food than 
they were about crime now.
    Well, they have read the stories. Last year we had the 
largest recall of ground beef in our history. In June we had 12 
outbreaks from contaminated food, one of those being an E. coli 
0157H7 outbreak. One person died of that, that we know of. And 
so people are getting very, very concerned about the safety of 
their foods.
    So I commend you for having this hearing, and bringing this 
to the attention of the public and of the Senate. I might just 
point out that this is the only Subcommittee that has had a 
hearing on this issue. The Agriculture Committee has not. The 
Labor Subcommittee on Health has not. We have over a dozen 
bills pending in the Senate right now on the food safety issue, 
and this is the only Subcommittee that has had a hearing on it. 
So I commend you, Madam Chair, for doing this.
    I would say that I have been involved in this area for a 
long time in terms of meat and poultry inspections, and how we 
ensure the safety of our meat supply in this country. Last year 
I introduced a bill, S. 1264, called the Food Safety 
Enforcement Enhancement Act. It gives the Secretary of 
Agriculture more authority, both to recall and to levy civil 
fines.
    Some in the industry have said we don't need that right 
now. They will recall voluntarily. Right now, if there is an 
outbreak, the Secretary has no authority to recall. He doesn't 
have it. Now voluntarily the companies can do it, but the 
Secretary can't, and I just want to give him that authority to 
recall contaminated meat any time he finds it.
    The second provision is to impose civil fines. The industry 
says, ``Well, the Secretary can already close down a plant,'' 
shut it down. As Secretary Glickman said, that is the ``atom 
bomb'' approach. There ought to be something less than that, 
because if you shut down a plant, you put workers out of work, 
and they may not have been responsible for the problem in the 
first place.
    Sometimes under the new HACCP procedures that we have now, 
a problem could have been inadvertent, but you need to levy a 
civil fine so that it sends a signal to others to clean up 
their act. If we can have civil fines levied if you mistreat a 
circus animal, if you can levy a fine for violation of the 
Pecan Promotion Act, but the Secretary cannot levy a fine if 
you produce contaminated meat, that just doesn't make sense. So 
hopefully we can get something done on this to give the 
Secretary a little bit more authority.
    Senator Kennedy mentioned the Food Safety Initiative 
funding on the ag appropriations bill, the amendment we got 
through. The Senate vote was 65 to 34. The administration had 
asked for $96 million. We were able to restore $66 million. 
Because of PAYGO, we had to find offsets for it. We did find 
for offsets $66 million for the food safety initiative of this 
administration.
    That funding is in conference right now, and I would like 
to be able to sit here today and tell you it is all secure, but 
I am not certain about that. So I ask all of you on both sides 
of the aisle, if you have any contacts in the House, to please 
reach across to the other side on the ag appropriations 
conference and ask them to hold that $66 million that we have 
for the food safety initiative. It is two-thirds of what the 
administration asked for, but I just hope that we can keep it. 
And I am not certain that we can, but we will fight for it.
    Last, Madam Chair, I share with you your concern over fresh 
fruit and vegetables. As others have said and as you know, more 
and more people are eating more fresh fruit and vegetables 
because of increasing imports. We can have fresh raspberries in 
the middle of the winter, and strawberries, as Senator Kennedy 
spoke about.
    We really have been lax in setting up a regime to ensure 
the cleanliness and the lack of contaminants on the fresh fruit 
and vegetables that come into this country. I don't know that I 
have an ironclad answer for you, but I do believe that two 
elements must be involved here.
    First, the FDA has to be given more authority in this area. 
As you know, FDA has implemented standards for dairy and canned 
foods. That was some time ago. They recently mandated a new 
HACCP system for seafood. They are now working towards similar 
systems for juices and sprouts. And, they are working with 
industry for some voluntary guidelines for other types of 
produce.
    Now, these guidelines are voluntary. They are not quite all 
we need, but at least they are moving in the right direction, 
and we need to figure out how we can give FDA the same kind of 
authority for fruit and the vegetables, especially those that 
come into this country, as we are hoping that the Secretary of 
Agriculture would have in meat and poultry products.
    When I talk to consumers, while the polls all indicate that 
there is a great concern about meat because that has been in 
the news and because of the recall last year, I am finding more 
and more people concerned about the produce they buy and where 
it comes from, and whether it is clean and healthy and 
wholesome. So we need to set up a regime to have imported 
produce meet certain guidelines for cleanliness and for lack of 
contamination as we do for our own that are grown in this 
country.
    Last, on the CDC, I just met with the new director of the 
Center for Disease Control and Prevention yesterday--I think he 
is taking over in about a week--and again, we need to figure 
out how we give more authority. I talked to him specifically 
about this. He said, ``What do you have on your mind?'' I said, 
``Food safety.''
    And CDC has done a good job. They do a really good job in 
tracking things down. If there is an outbreak, they can track 
it. They are pretty darn good at that. What they need to be 
involved in more is prevention, and what they can do to prevent 
contaminants from entering foods in the first place.
    Again, I don't have an ironclad answer for you, but I look 
forward to working with you, Madam Chair, and other Members of 
the Subcommittee, to increase both the authority and power of 
the FDA, but also to give more guidance and direction to the 
CDC for getting up front and helping us with preventive 
measures on imported fruit and vegetables.
    Thank you, Madam Chair.
    Senator Collins. Thank you very much, Senator Harkin, for 
your contribution to this Subcommittee investigation, as well 
as many others.
    Senator Harkin. Thank you.
    Senator Collins. I am now, before calling forth our next 
panel of witnesses, going to turn to Senator Durbin to see if 
he has any opening comments that he would like to make.

              OPENING STATEMENT OF SENATOR DURBIN

    Senator Durbin. Madam Chair, thank you for having this 
hearing, and I want to thank the witnesses. I am a cosponsor of 
Senator Mikulski's bill, as well as Senator Harkin's, and 
Senator Mikulski has agreed to cosponsor a piece of legislation 
which I bring before us, as well.
    This particular issue before this Committee has a rich 
history. I did a little research and determined that when 
Senator Ribicoff was Chairman of this Committee, from 
Connecticut, and Senator Percy of Illinois was the ranking 
minority, back in 1977 they conducted hearings on this question 
about the adequacy of the Federal food safety inspection across 
America.
    It was curious, and I put the chart up there just for a 
moment, the quote from the 1977 report of this Committee, and 
it said: ``Divided responsibility for regulating food 
production has resulted in a regulatory program which is often 
duplicative, sometimes contradictory, undeniably costly, and 
unduly complex. We believe the bifurcated food regulation 
system should be unified in a single agency.''
    I have introduced legislation to do that, and I hope that 
we can in this Committee spearhead that legislation before 
Congress. Twenty-one years on the same song. It is time for us 
to basically move to action, and I commend you for your 
leadership in doing that.
    I hope that we can come up with a bipartisan response 
quickly during the next session of Congress, that will not only 
address the questions of funding and jurisdiction, but I think 
the more central and unifying question about how to bring this 
into one agency that avoids duplication, has standards that are 
scientifically defensible, and basically can restore some 
confidence.
    The testimony of Senator Harkin about the Des Moines 
Register poll I will bet would be reflected across this 
country. People just believe food safety is a much bigger issue 
than politicians do, and we have to be responsive. We should 
be, not only because of our obligations under our oath of 
office but also our obligations to our constituents.
    We will now have, I am sure, an excellent panel here 
representing several different agencies that are concerned 
about this issue. I would hope that in the next year or two we 
could call the same group together and perhaps have one witness 
representing one agency with the responsibility for this--not 
to take anybody's job away, but to bring them together in an 
effort to make sure that this is more consistent.
    Thank you for your leadership. You have really, I think, 
served the country well in raising the profile of this issue.
    Senator Collins. Thank you very much, Senator Durbin.
    I am pleased to ask our next panel of witnesses to come 
forward and remain standing so that I can swear you in. It 
includes the officials from Federal agencies responsible for 
regulating the safety of imported food, as well as the 
representative of the National Academy of Sciences.
    We are pleased today to have the Hon. Raymond Kelly, who is 
the Commissioner of the U.S. Customs Service, the agency 
responsible for regulating all commerce at our borders. Thomas 
Billy, who is the Administrator of the Food Safety and 
Inspection Service of the Department of Agriculture. That is 
the agency responsible for regulating meat and poultry imports. 
William Schultz, who is the Deputy Commissioner for Policy at 
the Food and Drug Administration. As we know, the FDA is 
responsible for the regulation of over 2.7 million food 
shipments imported into the United States each year. And, 
finally, to complete our panel we have Dr. Sanford Miller, who 
is representing the National Academy of Sciences' Committee to 
Ensure Safe Food. This panel recently sent to Congress an 
excellent report analyzing various food safety proposals.
    Pursuant to the Subcommittee's rules, all witnesses are 
required to be sworn, so I would ask that you raise your right 
hands.
    Do you swear that the testimony you will give to the 
Subcommittee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. Kelly. I do.
    Mr. Billy. I do.
    Mr. Schultz. I do.
    Dr. Miller. I do.
    Senator Collins. Thank you. Since we are obviously running 
very far behind schedule due to our late start today and the 
intervening votes, I am going to ask you to adhere to the 
request that you limit your written testimony--your oral 
presentation--to 10 minutes each. We will include your entire 
statement in the record. And the lights before you will give 
you guidance on how much of your time is remaining.
    We are going to start with Commissioner Kelly.

   TESTIMONY OF HON. RAYMOND W. KELLY,\1\ COMMISSIONER, U.S. 
          CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY

    Mr. Kelly. Thank you, Madam Chairwoman, Members of the 
Subcommittee. I am pleased to be here today to discuss Customs' 
efforts to address the illegal importation of tainted food, and 
I want to assure you that I and all of the employees of the 
Customs Service share the level of concern raised by the 
Subcommittee over the safety of food entering this country.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Kelly appears in the Appendix on 
page 147.
---------------------------------------------------------------------------
    Those involved in schemes to knowingly violate U.S. food 
safety laws are driven by the same motives as those engaged in 
narcotics smuggling: Greed. Just as we attack illegal drug 
smuggling, the U.S. Customs Service will be vigilant in our 
efforts to keep unsafe imported food products from showing up 
in stores and restaurants throughout our Nation.
    As you know, the U.S. Customs Service enforces more than 
400 laws for 40 U.S. agencies, including the Food and Drug 
Administration and the U.S. Department of Agriculture. 
Approximately 25 percent of the enforcement work we conduct for 
other agencies is for FDA. We are proud of the service we 
provide because we know how important food safety is to the 
American people.
    This morning in my remarks, I will address the four 
questions which the Subcommittee posed to me in your invitation 
letter of August 20. Those questions are: What are the 
deficiencies in the current food importing process? What 
specific recommendations does the Customs Service have to 
improve the safety of imported foods? What specific action is 
the Customs Service taking in response to the April 1998 GAO 
report on food safety? And what other changes should be 
considered to improve the food import process?
    In response to question 1, as you are aware, through 
Operation Bad Apple, the Customs Service has identified a 
number of areas in the food importing process that could be 
better handled. These shortcoming can be broken down into three 
subgroups: Cargo control, coordination issues, and sanctions or 
penalties.
    Cargo control deficiencies result in such scheme as banking 
and container switching, and also include issues related to the 
proper destruction of tainted food imports. Coordination 
problems include the difficulty that Customs and the FDA have 
had in sharing relevant information on suspect imports. With 
regard to sanctions, the existing penalty structure may not be 
strong enough to effectively deter noncompliant importers.
    In response to question 2, there are a number of 
recommendations Customs has been considering to improve the 
safety of imported food. We believe it is necessary to 
establish better control over the movement of suspect cargo 
through the use of technology such as discrete transponders 
attached to containers. We feel it is also necessary to improve 
current methods of targeting violative importers through 
expanded manipulation of existing data.
    On the regulatory front, we would like to see the FDA's 
Notice of Refusal also serve as Customs' Notice of Redelivery. 
This would significantly cut down on the amount of time 
necessary to process noncompliant importers. And, finally, we 
think a national interagency team comprised of FDA 
representatives and Customs trade compliance experts should be 
established to coordinate our efforts on this front.
    In response to question 3 regarding the GAO findings on 
food safety, the Customs Service is taking action on those 
recommendations which affect our responsibility. This includes 
better coordination with FDA, better targeting and cargo 
control, exploring the use of unique identifiers, destroying 
and/or exporting tainted food, and more appropriate assessment 
of sanctions against violators.
    In regard to coordination with the FDA, we are 
reprogramming our database to extract FDA-issued refusal 
notices. This will allow us to have a clear list of FDA refusal 
actions without relying on paper copies of such notices 
transmitted in the mail. Again, we are seeking regulatory 
authority to have the FDA Notice of Refusal serve as our 
redelivery notice, which in so doing will automatically 
obligate the Customs surety bond.
    With respect to targeting and cargo control, Customs is 
working with the FDA to target importers, high-risk producers, 
and FDA violative shipments nationally. We will use an 
automated information system to identify and subject these 
shipments to additional examination. We are more effectively 
coordinating our efforts at several ports and are experiencing 
increased success at those ports where interagency teams have 
been formed. We will look to expand this task force approach.
    Although we want to better control food shipment, current 
resource limitations prevent us from enforcing the laws in the 
most effective way possible. The expanded use of bonded 
warehouses and centralized examination stations has been 
suggested. There are simply not enough examination stations at 
this time, and those that exist are not equipped to provide the 
needed storage.
    As for bonded warehouses, Customs does not have the 
authority to require their use. Even if we did, we do not have 
the resources to supervise them properly. If we were to 
implement these suggestions, Customs would be unable to assure 
that switching of merchandise awaiting FDA examination would 
not still occur. This also is complicated by the high cost of 
building adequate facilities for these purposes at each port of 
entry.
    New technologies, such as the aforementioned transponders, 
will help us track shipping containers from the place of 
unlading to the examination station. In the coming months we 
will test this technology at ports with high volumes of 
suspected food shipments.
    Now, when the FDA refuses a food shipment, we work with the 
importer under the law to destroy or ensure exportation of that 
shipment. Destruction of a shipment usually occurs at a 
landfill or at an incineration plant. It can be difficult to 
determine whether a shipment presented for destruction is the 
actual refused entry.
    Another challenge we face is that every port does not have 
the resources to send an inspector to witness every 
destruction. We estimate it would cost an additional $1.9 
million annually to have inspectors witness the approximately 
10,000 destructions that occur each year.
    With regard to sanctions, we are seeking regulatory 
authority in these cases to demand more than three times the 
value of liquidated damages. We are also considering requiring 
a separate bond for each shipment for repeat violators. Customs 
is working with the FDA on more aggressive penalties where 
importers fail to export or destroy FDA-refused products.
    Furthermore, as we inquire into the activities of 
importers, our investigative efforts often result in 
indictments, arrests, convictions, and fines against those 
making false statements, smuggling, or conspiring against the 
United States. We intend to pursue our investigative activities 
in this area and work closely with the Department of Justice to 
ensure those involved in illegal activities are prosecuted to 
the full extent of the law.
    And, finally, in response to question 4, I will reiterate a 
point I made earlier: Our role in the issue before the 
Subcommittee today is not that of a lead agency, but rather as 
an agency brought in to assist with the enforcement of policy 
initiated by another agency. In this regard, I will defer to 
the expertise of the FDA in determining other necessary changes 
to improve the food import process.
    In conclusion, I can assure the Subcommittee that the 
safety of the Nation's food supply is important to the U.S. 
Customs Service. We will continue to do everything we can, with 
existing resources and in cooperation with the FDA, to keep 
Americans safe from tainted and contaminated foods.
    Madam Chairwoman, this completes my statement. Obviously I 
am available to answer any questions. Thank you.
    Senator Collins. Thank you, Mr. Kelly.
    Mr. Billy, would you please proceed with your testimony?

TESTIMONY OF THOMAS J. BILLY,\1\ ADMINISTRATOR, FOOD SAFETY AND 
 INSPECTION SERVICE, DEPARTMENT OF AGRICULTURE, ACCOMPANIED BY 
   MARK MINA, DEPUTY ADMINISTRATOR FOR FIELD OPERATIONS; AND 
   MARGARET GLAVIN, DEPUTY ADMINISTRATOR, OFFICE OF POLICY, 
                   DEVELOPMENT AND EVALUATION

    Mr. Billy. Madam Chair and Members of the Subcommittee, I 
appreciate having the opportunity to appear before you today to 
discuss the inspection system used by USDA's Food Safety and 
Inspection Service for meat, poultry and egg products imported 
into this country. Today I am accompanied by Dr. Mark Mina, the 
Deputy Administrator for Field Operations, and Margaret Glavin, 
the Deputy Administrator of the Office of Policy, Development 
and Evaluation.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Billy appears in the Appendix on 
page 154.
---------------------------------------------------------------------------
    The FSIS inspection system ensures that all imported meat, 
poultry and egg products meet U.S. food safety standards as 
well as inspection and verification requirements. The Federal 
Meat Inspection Act, Poultry Products Inspection Act, and the 
Egg Products Inspection Act, give FSIS the authority and the 
responsibility to inspect meat, poultry and egg products on a 
continuous basis and set the food safety standards for these 
products.
    FSIS demands and certifies that imports are produced under 
conditions that achieve the same level of protection as U.S.-
established standards for food safety. FSIS determines the 
equivalence of foreign meat and poultry systems through on-site 
reviews involving on-site visits to the foreign countries, 
including randomly picking plants within those countries for 
inspection, and document analysis of foreign countries' laws, 
regulations and other pertinent information.
    The amount of meat, poultry and egg products imported into 
the United States is very small compared to U.S.-produced 
products. Imported meat accounts for only about 7 percent of 
the domestic consumption, imported poultry totals less than 1 
percent, and imported egg products also totals less than 1 
percent, and these numbers have been relatively static over the 
last 10 years.
    Not one pound of these imported products is permitted entry 
into the United States unless it has undergone inspection in a 
system certified by FSIS as equivalent to the FSIS inspection 
system. Only 37 countries have been certified as meeting our 
standards.
    Meat and poultry products consumed in the United States but 
originating abroad are the most heavily inspected food products 
in the world. As I noted, imported meat and poultry are 
required to be inspected under a foreign inspection system that 
FSIS has determined to be equivalent to our own system. Then, 
upon arrival at the U.S. port of entry, all meat and poultry 
shipments undergo reinspection by FSIS. Almost all imported 
products, about 85 percent in total, then proceeds to a 
federally inspected meat or poultry plant for further 
processing under the supervision of FSIS inspectors.
    The dramatic changes being instituted in our domestic meat 
and poultry inspection program directly impact foreign 
countries desiring to export products to the United States. In 
1996, we published the pathogen reduction Hazard Analysis and 
Critical Control Points, or HACCP, systems' final rule.
    HACCP systems are geared towards preventing problems before 
they occur rather than detecting problems after they occur. All 
of the requirements in the rule, including the microbiological 
testing, must be implemented by foreign inspection systems 
desiring to establish eligibility or to maintain their 
eligibility to export to the United States.
    In closing, I would like to say that we at FSIS are 
continually striving to improve our inspection system, with a 
goal of minimizing the incidence of foodborne illness from the 
consumption of meat, poultry and egg products, whether those 
products are produced in the United States or a foreign 
country. Thank you for the opportunity to discuss our import 
inspection system, and I look forward to any questions you 
have. Thank you.
    Senator Collins. Thank you, Mr. Billy.
    Mr. Schultz, would you please proceed?

  TESTIMONY OF WILLIAM B. SCHULTZ,\1\ DEPUTY COMMISSIONER FOR 
POLICY, FOOD AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND 
HUMAN SERVICES, ACCOMPANIED BY JOSEPH LEVITT, DIRECTOR, CENTER 
   FOR FOOD AND APPLIED NUTRITION; AND GARY DYKSTRA, DEPUTY 
     ASSOCIATE ADMINISTRATOR, OFFICE OF REGULATORY AFFAIRS

    Mr. Schultz. Thank you, Madam Chairman. With me today are 
Joseph Levitt, who is the Director of our Food Center, and Gary 
Dykstra, who is the Deputy Associate Administrator for 
Regulatory Affairs, which is the division of the agency that 
oversees the field operations, including import inspections.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Schultz appears in the Appendix 
on page 159.
---------------------------------------------------------------------------
    We appreciate the opportunity to testify, and I would like 
to compliment the Subcommittee on these hearings, which 
obviously address a very important topic, namely the adequacy 
of the Federal programs to assure the safety of imported food. 
These hearings have identified a number of serious problems. 
The witnesses have offered a number of very constructive 
suggestions.
    We are not here to say that we know all the answers, but we 
certainly recognize that there is tremendous room for 
improvement in the FDA's food import program, and what I would 
like to do is start the discussion by talking for a few minutes 
about some of the trends and factors that have brought us to 
where we are today.
    The first one is the dramatic growth of imports in recent 
years, and as you can see from the chart, in the mid-1980's 
there were about 1,000 what we call line items of food offered 
for import in the United States--not 1,000 but just under 1 
million line items offered. If we jump to 1998, it is over 3 
million. And what that means is, today a significant amount of 
the food that we eat in this country is imported. That includes 
over 50 percent of seafood that is consumed, 38 percent of 
fresh fruit, and about 12 percent of fresh vegetables.
    Second, the imported food that we are seeing is much more 
complex than it used to be. In the past, many imports were raw 
materials, bulk products, products that were brought into the 
United States and then used in processing food, so the food was 
both inspected at the border but then often it could be 
inspected domestically when the FDA inspectors went into 
processed food facilities. Today what we are seeing is fresh 
produce, fresh seafood, and thus it is all the more important 
that we get it right before the food comes into this country.
    Making the problem even more difficult is, as has been 
mentioned in testimony, what we call emerging pathogens. We are 
seeing, both domestically but also in imports, kinds of 
bacteria that we just didn't see only a few years ago. They are 
often hard to detect, and they are often more virulent than 
what we have seen in the past.
    And then finally is the issue of resources, which simply 
are not sufficient to do the job. So the bottom line is that 
while food imports have increased by more than 300 percent in 
recent years, the FDA's resources devoted to this program have 
not only failed to keep up, they have been declining slightly.
    That is the bad news. Now I would like to give you the good 
news. The good news is that food safety today is front and 
center at FDA. In recent years our agency has had what I think 
are some great successes. We have fixed the drug lag. We have 
greatly improved medical device review times. And then just 
recently we have put a tremendous and, I think, very successful 
effort into implementing the FDA Modernization Act, which this 
Congress passed just a year ago.
    But during those years food safety has been, frankly, on 
the back burner. That is no longer true. For the last 2 years 
food safety, which includes of course the safety of imported 
food, has been a priority.
    Part of the answer, we think, is new resources, but that is 
not the whole answer. Instead, there is also tremendous room 
for improvement in our existing program, and in this regard the 
General Accounting Office report that you commissioned makes a 
number of very important suggestions. And those suggestions 
range from how FDA sets its priorities to authorities that are 
needed, including for example one simple authority, which would 
be the ability for FDA to require that goods that are refused 
import be marked so that they can't be reimported from another 
port.
    But in addition to the resources and improving the existing 
program, we believe that a whole new approach is needed to this 
problem, and that we can no longer simply rely on inspections 
at the border. Instead, we must find a way to prevent food from 
being contaminated before it is brought to our border. We must 
find a way, in other words, to go the source of the potential 
contamination.
    And thus it is our view that the import program of the 
future will look very different from the import program that 
you are examining today. While we will continue to rely to some 
extent on dockside inspection, we know that even with a vast 
increase of resources, those kinds of inspections won't be 
adequate.
    And therefore, any new resources that FDA gets, a 
considerable amount of them would be devoted to working with 
foreign governments in improving their regulatory systems, and 
to basically going abroad, looking at the farms, looking at how 
the food is produced, and strengthening those systems. The goal 
of this would be that any food imported into this country be 
produced in a country that has a regulatory system that is as 
good as the one in the United States.
    As part of this program, we believe that FDA needs the 
ability to refuse imports from a country that doesn't have an 
adequate food safety regulatory system of its own. Implementing 
this kind of program will take time, but we believe that for 
the future it is essential in order to assure the safety of 
imported food.
    In conclusion, Madam Chairman and Senator Durbin, I would 
like to say we appreciate the support of the Members of this 
Subcommittee in voting to increase our food safety budget when 
the appropriations bill was amended on the Senate floor last 
July, and in the coming months we look forward to working with 
you on substantive legislation and on other measures that we 
can take to improve this program.
    We would, of course, be happy to answer any questions.
    Senator Collins. Thank you very much, Mr. Schultz.
    Dr. Miller, we look forward to your testimony.

TESTIMONY OF SANFORD A. MILLER,\1\ MEMBER, COMMITTEE TO ENSURE 
 SAFE FOOD FROM PRODUCTION TO CONSUMPTION, NATIONAL ACADEMY OF 
                            SCIENCES

    Dr. Miller. Thank you, Madam Chair. I am Dr. Sanford 
Miller. I am Dean of the Graduate School for Biomedical 
Sciences at the University of Texas Health Science Center in 
San Antonio, and I served as a member of the Committee to 
Ensure Safe Food From Production to Consumption of the National 
Academy of Sciences. It is in that context that I join with you 
today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Dr. Miller appears in the Appendix on 
page 180.
---------------------------------------------------------------------------
    I am pleased to have this opportunity today to comment on 
this issue of food safety, so vital to the public health. The 
study that I will address today was requested by Congress. In 
order to provide a context for the issues related to imported 
foods contained in our report, I would like to first address 
the questions you asked related to the recommendations included 
in the report, and then follow by addressing the findings of 
the committee related to imported foods in response to the 
other two questions that were posed by the Subcommittee.
    The first question was, What recommendations were offered 
by the committee to establish an effective food safety system? 
The report, ``Ensuring Safe Food From Production to 
Consumption,'' came to three primary conclusions, and from 
them, several recommendations.
    The first conclusion was, ``An effective and efficient food 
safety system must be based in science.'' The second conclusion 
which follows from that was, ``To achieve a food safety system 
based on science, current statutes governing food safety 
regulation and management must be revised.''
    This second conclusion resulted in two recommendations: 
First, that Congress should change Federal statutes so that 
inspection, enforcement and research efforts can be based on 
scientifically supportable assessments of risks to public 
health. Some of the science-based changes in Federal statute 
proposed by the committee were elimination of the current 
continuous inspection system for meat and poultry and 
replacement with a science-based approach which is capable of 
detecting hazards of concern. Second, mandating a single set of 
science-based inspection regulations for all foods; there are 
common factors for all foods. And, third, requiring that all 
imported foods come only from countries with food safety 
standards deemed equivalent to U.S. standards.
    Second, the second conclusion, that Congress and the 
administration should require development of a comprehensive 
national food safety plan. Funds appropriated for food safety 
programs, including research and education programs, should be 
allocated in accordance with science-based assessments of risks 
and possible benefits to the public.
    A well-developed national food safety plan formulated by 
Federal food safety agencies, and with representation from the 
many stakeholders involved in ensuring safe food, is vitally 
needed. It should include consideration of the distinctive 
efforts required to ensure the safety of imported foods, and a 
plan to address consumers' behaviors related to safe food 
handling processes, since that is the final line of defense.
    The third conclusion was related to the need for 
reorganization of food safety efforts in the United States: 
``To implement a science-based system, reorganization of 
Federal food safety efforts is required.''
    This resulted in two recommendations: First, to implement 
the science-based system, Congress should establish by statute 
a unified and central framework for managing Federal food 
safety programs, one that is headed by a single official, and 
which has the responsibility and control of resources for all 
Federal food safety activities, including outbreak management, 
standard-setting, inspection, monitoring, surveillance, risk 
assessment, enforcement, research, and education.
    The current fragmented regulatory structure is not well-
equipped to meet current challenges. In order for the 
organizational structure not to be a barrier to food safety, 
one official should be responsible for Federal efforts in food 
safety and have control of all resources allocated to food 
safety. An identifiable, high-ranking, presidentially appointed 
head whose appointment is based in statute, and thus is not 
temporary or easily changed by political agendas or executive 
directive, is required to direct and coordinate Federal 
activities and speak to the Nation, giving Federal food safety 
efforts a single voice.
    Since the Food Safety Council recently established by the 
President's executive order was announced following release of 
the committee's report, our report does not identify or 
evaluate that organizational structure.
    The second recommendation regarding organization structure 
is as follows: Congress should provide the agency responsible 
for food safety at the Federal level with the tools necessary 
to integrate and unify the efforts of authorities at the State 
and local levels to enhance food safety. This would include 
statutory measures and funding necessary for the Federal 
Government to be able to ensure nationwide adherence to minimal 
standards when it is deemed appropriate.
    Now, if I may, I would like to address the questions of 
imports and risk assessment. With regard to how scientifically 
supportable assessments of risk to public health can be used to 
create more effective safeguards to protect the public, and the 
extent to which resources can be better allocated if regulatory 
decisions are based on scientifically developed data, the 
report does point out that decisions need to be based on 
assessments of risk to public health, and that resources should 
be allocated towards those that indicate the greatest risk to 
health.
    However, the report also recognizes that great gaps exist 
in the information needed to develop some of these assessments, 
in which case judgments need to be based on whatever scientific 
data happens to be available. Therefore, significant research 
is required to fill these gaps. Some hazards may need to be 
provided resources even though there may be other areas that 
pose greater risk to public health, but for which additional 
resource allocation would have little likelihood of more 
effectively protecting the public health at this time.
    With regard to the current import process and possible 
deficiencies, if any, identified by the NAS report, the 
committee recognized that the globalization of the U.S. food 
systems brings foods from all parts of the world into the U.S. 
marketplace, and with it the potential for foodborne infections 
or other hazards not normally found in the United States. In 
the United States, the production, processing and shipment of 
food can, in theory, be subject to government monitoring from 
harvest to consumer purchase, but imported food is not subject 
to similar oversight.
    It is by no means clear that imported food as a class poses 
greater risks than does domestically produced food. What is 
clear is that Federal officials cannot use the same methods to 
regulate imported food that they use, or that would make sense, 
in regulating domestically produced food. Uniform or harmonized 
food safety standards and practices should be established, and 
officials allowed to undertake research, monitoring, 
surveillance and inspection activities within other countries 
in accordance with science-based assessments of risk and 
benefit.
    The laws that FSIS and FDA administer require that imported 
food meet the same standards as domestic food, but, as the 
Subcommittee is well aware, the enforcement approaches of these 
two agencies to meet this common requirement are quite 
different. The different systems of scrutiny of imports used by 
FDA and USDA largely mirror their different approaches to 
domestically-produced food, as is required, since they must 
document domestic equivalence.
    USDA statutory authority requires meat and poultry food 
safety systems of exporting countries to be equivalent to the 
U.S. system. However, FDA lacks the authority to require that 
imported foods be produced under a system equivalent to the one 
that it administers domestically. Instead, FDA, as you know, 
relies primarily on sampling at ports of entry to determine 
whether food imports meet domestic requirements.
    Even if FDA's criteria for sampling and testing were 
systematically risk-based and its resources were adequate to 
keep up with an increasing volume due to increased demand, 
sample analysis alone is not capable of detecting many of the 
most serious risks to consumer health. There is currently no 
way to determine whether the agencies are focusing their 
attention on the most important health risks.
    In an effort to address the challenges of ensuring the 
safety of imported foods, the President has proposed a variety 
of measures, including hiring additional FDA inspectors to 
examine the safety of fruit and vegetables in the marketplace, 
both domestic and imported. Recognizing that sample analysis 
alone does not provide a means for detecting many of the most 
serious risks to consumers' health, and without firm knowledge 
of the most significant risks, it is simply impossible to know 
whether these proposed actions will adequately address imported 
food hazards.
    On behalf of the National Academy of Sciences' Committee to 
Ensure Safe Food From Production to Consumption, I thank you, 
Madam Chairman and Senator Durbin, for this opportunity to 
present our testimony at this hearing, and of course we will be 
happy to respond to any questions.
    Senator Collins. Thank you very much, Dr. Miller.
    We will now have a 10-minute round of questions per 
Senator, and I would like to start with you, Mr. Schultz, to 
talk about the issue of equivalency authority. You and I have 
talked privately, and as well as in your testimony this 
morning, you have made the point that with the huge volume of 
shipments that the FDA has to deal with, which your chart well 
illustrates, when you're dealing with 2.7 million shipments per 
year, that even if we quadrupled the number of inspections, 
that you can never catch up. Is that fair? And given the fact 
that many emerging pathogens are so difficult to detect from a 
visual inspection or even sampling, that we are still not 
getting at the root of the problem?
    Mr. Schultz. That is right. Today we only look at 1.7 
percent of imports, so quadrupling it we think still would not 
be the answer.
    Senator Collins. And that is the appeal of having some sort 
of equivalency standard; of saying that unless other countries 
meet American standards, we are not going to import fruit and 
vegetables from them, similar to what FSIS does, but there are 
some important differences.
    And that approach has a great deal of appeal to me because 
it does go to the root cause, but I am concerned about how 
practical it is. And I think there are a lot of issues that we 
need to work through before going that route, even if that is 
the ultimate answer.
    In 1994, GAO, which has been advocating equivalency for 
some time, issued a report calling for equivalency, and FDA 
said then that it would ``be virtually impossible to impose 
U.S.-equivalent regulations on other nations,'' and FDA drew 
the contrast that fruit and vegetables are produced in 
decentralized locations, as opposed to FSIS is mainly dealing 
with centralized processing plants or slaughterhouses when it 
comes to meat and poultry.
    Given those differences, how would you go about 
implementing equivalency? How practical is it?
    Mr. Schultz. It is a very important point, Senator Collins. 
As I understand it, equivalency has special meaning in the 
international trade jargon. It involves what is a certification 
of the other country's system, and it often involves an 
agreement that takes a lot of resources and a long time to 
negotiate. We don't know that full equivalency, mandatory 
equivalency, is necessarily the best approach.
    What we do think we need, though, is both the resources to 
go and work with other countries to strengthen their systems, 
and the authority to be able to say to those countries, ``If 
your system isn't adequate, if it's not as strong as ours, then 
we have the ability to refuse to import your product.
    We want to put the responsibility back on you, not that you 
have to do it exactly the same way the United States does, but 
that basic sanitation measures and so on must be taken.''
    And we need a way not just to work with them but to make 
them listen to us when we tell them: ``You need to strengthen 
your system. Otherwise, we may choose not to import your 
food.''
    Senator Collins. Some domestic fruit and vegetable 
producers have raised concern to me that if we move to an 
equivalency system, that it will mean that FDA or the 
Department of Agriculture has to impose a whole new set of 
burdensome regulations for our domestic industry, when there 
isn't necessarily a problem, in order to show equivalency or 
equivalent standards. Could you comment on that issue? Is that 
fear justified?
    Mr. Schultz. I think it is an understandable concern but I 
think it is a misunderstanding of the approach that we are 
advocating. It is true that in order to tell another country or 
talk to another country about what its standards ought to be, 
you have to know what your own standards are. But those 
standards are found in our laws, in our regulations, and we are 
also issuing guidances to our own industry about what the 
standards are.
    Here we are talking mostly about basic sanitation 
standards. We are talking about standards that already exist in 
this country, and what we need to do is describe them so that 
other countries know what we are expecting of them.
    Senator Collins. So if we move to that system, you would 
not see it as imposing a host of new regulations on domestic 
producers, because we are in essence talking about basic 
sanitation standards which they already meet. Is that accurate?
    Mr. Schultz. We think that is accurate. We think we have a 
very important education role to play, and we have started on 
that. We believe we are having success in talking to our own 
agricultural industry and in explaining what we have in mind.
    There are, of course, variations in this country, and I 
don't want to sit here and say that every facility in this 
country is going to meet those basic standards, but we are 
talking about basic standards that we believe most of the 
facilities do already meet.
    Senator Collins. Could you explain to the Subcommittee what 
authority the FDA currently has to ban a product that is 
suspected of containing pathogens? In the case of the 
Guatemalan raspberries, which this Subcommittee explored in 
depth, the FDA did take action to ban the importation during 
the spring months when the problem with Cyclospora 
contamination was greatest, so you obviously have some existing 
authority to protect the public health.
    Mr. Schultz. Right.
    Senator Collins. What is that authority? Do you need new 
authority that goes beyond that?
    Mr. Schultz. We are now looking at this, too, I must say, 
and there are debates about it. But the basic approach we have 
taken up to now is reactive. In other words, we identify a 
problem such as Guatemalan raspberries, we look at the product 
and we know there is a problem with the product, and then we 
have the authority to take action which can go as far as 
banning the product, but it is where we know there is a 
problem.
    What we are looking for, toward, in the future is a 
preventative approach where we can say we might not know about 
this particular product, but we can see from the way products 
are handled in your country, from the lack of regulation, that 
there is a potential for a problem, and we basically want to 
work with you to improve the system in your own country. But 
you need to know that if you don't do that, we have the ability 
to prevent the import, not because we are looking at the 
product but because we can see the potential for a Guatemalan 
raspberry type of situation in the future.
    Senator Collins. Mr. Billy, I want to explore with you how 
the equivalency process works for FSIS. Now, in your case it is 
my understanding that you have equivalency agreements or 
certifications with 37 nations. Is that correct?
    Mr. Billy. Yes.
    Senator Collins. We know that our Nation is importing fruit 
and vegetables from considerably more countries, some 90 
nations. Have you turned down specific countries, or are you 
still going through the process of certifying their standards? 
Give us some idea of how the 37 countries compares with the 90 
countries that are now exporting fruit and vegetables to us.
    Mr. Billy. We currently have 20 countries in the queue, 
lined up to demonstrate that they have equivalent inspection 
systems, standards, laws, regulations, to qualify for exporting 
meat and poultry products to the United States. And we are very 
actively involved in reviewing first the paperwork and the 
actual systems in place, and if we ultimately conclude that 
they are equivalent, then we will certify them and permit the 
shipment of products to the United States.
    We have in the past declined to approve countries. We have 
also delisted countries when we found that their systems 
changed and became unacceptable in terms of--or not qualifying 
in terms of equivalency.
    I think this idea of equivalency is at the heart of the 
success that we have in terms of dealing with imported meat and 
poultry products. As I assume you are aware, I worked for the 
Food and Drug Administration, and I was frustrated by the 
limitations that they had in terms of their authorities, and I 
think this is a very important area that this Subcommittee 
needs to look at and judge.
    Finally, we just recently put in place our new HACCP 
regulations, and we are now in the process of going back 
through all of the 37 countries to verify that in fact the new 
regulatory requirements have been addressed by these 37 
countries, and ensuring that they have in place HACCP-type 
regulations that have been implemented, that the slaughter 
plants are testing their processes for E. coli, and that they 
are going to meet the salmonella performance standards that 
were established. So this is not a one-time effort. In other 
words, it is an ongoing effort, and you need the resources, the 
capacity to deal with it on an continuing basis.
    Senator Collins. Have the international trade agreements 
posed any difficulties for you in negotiating or certifying the 
equivalency standards in other countries?
    Mr. Billy. I can say this, that at this time we haven't 
been challenged in terms of our approach to determining the 
equivalency of the foreign systems. That concept in the new 
requirements in the trade agreements is relatively new, and we 
are working hard to ensure that the approach we take will work 
not only effectively for us in terms of imports, but also with 
regard to what we would expect when we export food products. We 
are one of the largest exporters of food worldwide, and this 
same concept I believe will work well for us in terms of 
sustaining and hopefully increasing our exports worldwide.
    Senator Collins. Thank you. My time has expired.
    Senator Durbin.
    Senator Durbin. Thanks, Madam Chair.
    Let me ask just one threshold question which I think I know 
the answer to, and that goes back to this finding not only by 
the National Academy of Sciences but the General Accounting 
Office on 12 different occasions over the last 6 years calling 
for one single Federal food safety and inspection agency with 
coordinated jurisdiction, scientifically-based.
    Is there any member of the panel, particularly Mr. Schultz 
or Mr. Billy, who disagrees with that? Do you think that that 
standard will not result in a safer food supply, saving 
taxpayers some money, and at least making the bureaucracy more 
comprehensible to those who are affected by it?
    Mr. Schultz. Senator Durbin, as you may know, after the NAS 
issued its report, the President established a council, and one 
of its charges was in 180 days to look at this very issue and 
make a recommendation. So the report is being studied.
    The administration did 2 years ago issue a report, and I 
would like to submit it for the record.\1\ It is called ``Food 
Safety From Farm to Table,'' but it is a comprehensive approach 
to food safety that includes risk assessment, research, and 
inspection. Coordination is a big piece of it, and surveillance 
by the CDC. And I would like to submit it and ask anybody who 
is interested to look at it. This here to date has been our 
approach to the issue.
---------------------------------------------------------------------------
    \1\ The report appears as Exhibit No. 5 in the Appendix on page 
386.
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    Senator Durbin. Mr. Billy.
    Mr. Billy. I agree that I think it is important for the new 
Food Safety Council established by the President to do a 
comprehensive review of all of the recommendations made by the 
National Academy. I also would point out that the new council 
plans to establish a National Strategic Plan for Food Safety, 
and that is one of the key recommendations made by the Academy. 
The new council plans to develop a unified food safety budget 
and submit that annually to the Congress. That is another 
recommendation of the National Academy.
    And, as Mr. Schultz has indicated, we plan to do an in-
depth review of the Academy report, so I think we ought to 
provide an opportunity for that to occur and then see the 
specific conclusions and reaction of the administration to that 
Academy study.
    Senator Durbin. This is a serious issue. We should take it 
seriously. We should make certain that the procedure that we 
follow is one that is in the best interests of food safety, 
among our major obligations to people in this country.
    Having said that, 21 years ago this Subcommittee accepted 
the premise that we have too many Federal agencies that have 
responsibility in this area. Twenty-one years ago they started 
calling for us to consolidate this, maybe even before, but at 
least 21 years ago, into one agency.
    I have introduced legislation with Congressman Fazio and 
Senator Torricelli in an effort to do that. Why don't we just 
accept the premise that we should have one agency, 
scientifically based--and then talk about how we reach that 
goal? I hope--I don't want to sound frustrated, but I am--that 
we can at least agree on that.
    Dr. Miller, I see you shaking your head. I think after your 
study you understand that.
    I want to ask some questions of Mr. Kelly, and I thank you 
for being here today. Senator Collins, when she called the last 
hearing, brought before us testimony from people who are 
involved in this business of food importing and how they 
defraud our process and our government, and you have done some 
good work with the Customs Service. Let me talk about two 
specific areas and ask you what you would do about them, and 
you mentioned them in your testimony.
    You testified that ``banking and switching'' by importers 
poses a continuing challenge. Are there specific solutions for 
tagging food in some way that will help prevent or eliminate 
this problem?
    Mr. Kelly. We are looking at a variety of things, Senator. 
We think technology in this area can certainly be helpful. We 
are looking at ways to perhaps use identifiers that only come 
out under black light, putting markers on containers. We are 
exploring a whole array of areas, but right now, it is 
unrealistic to think that we have the resources to adequately 
trace a load of suspected food from where it is stored to, 
let's say, an incineration plan. I believe technology is the 
answer in this area, and our people are looking at a variety of 
things. I think we will come up with something in the near 
term.
    Senator Durbin. Do you have the resources to do this? I 
mean, is it within the Customs Service resources, budget, and 
ability to try to find this new technology?
    Mr. Kelly. Yes. I think we can find the technology. The 
money to purchase the technology might be another issue.
    Senator Durbin. Another story, but once we come to that 
conclusion, do you feel you can reach some sort of a finding 
that will lead us to that?
    Mr. Kelly. Yes, sir. Now, we have a lot of talented people 
in the technology area that have some pretty innovative ideas. 
I believe the agency can come up with the solution. Finding the 
resources, of course, is always a challenge.
    Senator Durbin. Let me ask you another question: Do you 
think that the current policy of giving importers the option of 
destroying the rejected shipment or reexporting the product 
back to its origin or elsewhere is a problem?
    If you had been here at the previous hearing and heard the 
testimony--this will put you off your feed for a few minutes--
of a shipment of fish, if I remember correctly, rejected, then 
returning to the United States several years later as frozen 
fish, here it comes again. Why shouldn't destruction be the 
only recourse, given some of the reported incidents such as 
this that find these rejected, unsafe, adulterated products 
finding their way back to the United States even years later?
    Mr. Kelly. Senator, it makes sense to me to have 
destruction be the only alternative. However, I am pretty new 
at my job, about a month and a half, and I think we have to 
think out all of the consequences, or at least I have to have 
them explained to me. But certainly my initial reaction is, why 
reexport?
    Senator Durbin. Does Customs have the authority to bar 
violators, such as the top ten identified in Operation Bad 
Apple, from importing or doing business?
    Mr. Kelly. No, sir, we do not have that authority.
    Senator Durbin. What factors do you take into consideration 
in determining fines and penalties?
    Mr. Kelly. The record of the importer obviously is a 
significant consideration. If in fact one is a repeat violator, 
then the fines themselves would naturally be increased.
    Now, we are limited as far as imposing fines, moving 
against the bond, to three times the entry value. So even if we 
find an egregious violator and we are moving in that area, we 
are limited to three times the entry value. We are examining 
the possibility of expanding that to a level of the domestic 
value, in other words the market value of what the commodities 
would bring.
    There is a whole series of areas that we look at, 
particularly the record of the individual, the size of the 
shipment, those sorts of considerations, in determining a 
penalty.
    Senator Durbin. And do I understand that you are 
considering raising the bond requirements for repeat offenders?
    Mr. Kelly. We are considering raising the bond requirement, 
yes, sir.
    Senator Durbin. Well, let me say that the testimony we had 
from a previous hearing suggested that some of these folks 
consider this the cost of doing business. They will just 
violate the law and hope they don't get caught, and assume that 
when they do, it is just another cost. It really doesn't slow 
them down or stop them.
    When I hear that you don't have the authority to literally 
ban them from future importation in the United States, and that 
you are really limited in the fines you can charge, I am glad 
to hear that you are taking another look at it. I think that is 
critically important.
    Mr. Schultz, let me ask you the same question about 
reexport or destruction. I think that is something that the FDA 
should be thinking about, as well.
    Mr. Schultz. I agree that it is something we should look at 
carefully. I am reluctant to give you a categorical answer 
because I can imagine a situation where the violation is pretty 
trivial, not necessarily going to the safety of the food. It 
could go to the labeling or something, where the food could be 
rehabilitated, and you are obviously talking about very large 
amounts of money on occasion. So I am a little reluctant to 
give you a categorical answer, but I think I agree with your 
sentiment.
    Senator Durbin. People make mistakes, but the testimony 
before this Subcommittee--was it rice sticks that we were 
dealing with here? We had a company that clearly was a bad 
actor, and decided to mislabel their product in order to escape 
inspection and scrutiny. And so I think we ought to have some 
sort of a fair judgment standard here, that if it is an 
innocent mistake, it is one thing, but mislabeling in and of 
itself can be reasons for us to come down hard on these people.
    I see my time is about to expire, Madam Chair. I see 
Senator Levin is here, but I will try to stay for another round 
of questions. Thank you.
    Senator Collins. Senator Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Madam Chairman, and thank you 
again for your leadership in this area. It is critically 
important, and it has been very, very strong, and we are all in 
your debt and the Nation is in your debt for doing what you are 
doing here.
    I am interested in the weak fines to start with. We have 
got maximum fines, as I understand it, FDA, for the 
misdemeanor, of $1,000 or a year in prison. I doubt very much 
that the prison sentence is used very often, although I could 
ask you about that, but a $1,000 fine, it seems to me, for 
introducing bad food into this system of ours, is just nothing. 
It is hollow. There is no threat there; there is no deterrent.
    I am wondering if you would comment on this, Mr. Schultz, 
because I am very much interested in introducing a bill, and I 
will be, that would significantly up the fines for violations 
of our laws, both misdemeanor and felonies, both for FDA and 
for the Department of Agriculture. But first, your comment on 
the current system. Is it as weak as it seems to me in terms of 
penalties and fines for violations?
    Mr. Schultz. We agree that there are serious inadequacies, 
and we would be happy to work with you on legislation. While 
the criminal sanctions are important, I think it has been 
pointed out they often don't work. They can be too harsh. They 
require the Justice Department agreeing to bring a prosecution, 
and the Justice Department has to weigh this against everything 
else it is doing. And we do have to find a way so that 
importers don't regard the fines or the forfeiting of bond as 
simply the cost of doing business.
    Senator Levin. Well, there is a number of ways in which we 
can deter. And we have talked about equivalency is one way of 
doing this, as well, and I want to get to that, as others 
already have, in a moment.
    But if people face significant penalties for violation, at 
least it is something of a deterrent. If they face a $1,000 
fine, or if they just simply lose their bond and their bond is 
three times declared value, and declared value is much less 
than what the value is on the domestic market, it becomes a 
hollow threat. And so these penalties do provide some 
deterrent, and that is why I want to focus on this.
    One additional way to apply a penalty is a civil penalty, 
so that you don't rely so heavily on the Justice Department. 
And, again, I am going to be addressing this in legislation. 
Have you looked at that possibility, at other agencies', indeed 
your own agency's use of civil penalties? Why should we not 
here provide for the possibility of a civil or an 
administratively laid penalty, as well as the possibility of a 
criminal penalty?
    Mr. Schultz. And GAO recommended this, and we think it is a 
very constructive recommendation. We would be happy to work 
with you.
    Senator Levin. And, Mr. Billy, let me ask you the same 
question for the Department of Agriculture. Your penalties are 
about the same, $1,000 for a misdemeanor. I believe you have a 
slightly larger one for a felony, but--and the jail term, it 
seems to me, is not a realistic, likely outcome as a practical 
matter in the world in which we are in, in terms of all the 
priorities we have. It just isn't likely to happen. Whether it 
should or not is a different issue. But we have to hit folks in 
their pocketbook, and it seems to me we are not doing that in 
many ways. So, Mr. Billy, would you comment on the fine formula 
that you folks use at Agriculture?
    Mr. Billy. We have an inadequate inability to assess civil 
fines to enforce our regulations. We sent forward legislation 
which was introduced by Senator Harkin. It is called the Food 
Safety Enforcement Enhancement Act. It was introduced last 
year, and it lays out specifically the kind of civil penalty 
authority we would like to have, and we think this is a 
critically important tool we need as we move forward in terms 
of improving food safety.
    Senator Levin. And in addition to civil penalties, your 
penalty for--your criminal penalty is $1,000, is that not 
correct, or a year in jail, for a misdemeanor?
    Mr. Billy. Yes, but we do in fact use the criminal 
penalties provisions, and there are several people currently in 
prison that are there because of serious violations of our 
regulations.
    Senator Levin. Is that for a misdemeanor violation or a 
felony?
    Mr. Billy. Felony violations.
    Senator Levin. On the misdemeanor side, do you have any 
folks that have been given a year?
    Mr. Billy. No. We need additional authority there to deal 
with that area, as well.
    Senator Levin. All right. And is it not correct that your 
fine on the misdemeanor side is $1,000?
    Mr. Billy. I believe that is correct, but I would like to 
check that.
    Senator Levin. All right, and you could use some additional 
strength there?
    Mr. Billy. We could definitely use some additional strength 
there.
    Senator Levin. All right. The bonding issue which Customs 
has talked about, I think has already been addressed in Senator 
Durbin's questions. Perhaps other Senators have also asked 
questions about it, so I will not ask about that, but I think 
that is also a very helpful direction.
    On the equivalency issue, one of the arguments which the 
Chairman said has been raised against equivalency is the issue 
of whether or not that would then lead to greater domestic 
regulation, and your answer I believe was that in your judgment 
it would not.
    Is there any reason why a bill that would be granting FDA 
equivalency authority should not contain a provision which says 
``nothing in this bill is intended to require the FDA to do any 
regulation that it otherwise would not be doing anyway''? That 
is not a very artful or legal way to phrase it but I think you 
get the drift----
    Mr. Schultz. Right.
    Senator Levin [continuing]. That the bill isn't intended to 
force you to do regulating you wouldn't otherwise do, just to 
say in the area where you have regulated and you have 
standards, that we simply want other countries to have 
equivalent standards if they are going to import foods into the 
United States.
    Is there any reason that you can see why such a bill could 
not contain that kind of language?
    Mr. Schultz. No. Obviously we want to look at the language. 
I would want to consult with the lawyers and others at FDA. But 
sitting here, I don't see a reason why that would be a problem.
    Senator Levin. Well, it is something perhaps that could be 
considered as a way of addressing the issue which has been 
raised, which the Chairman has already referred to.
    Just one other question that I have, and that relates to 
the equivalency as well, and that is another question which the 
Chairman has raised. She said that one of the questions is 
whether or not we would have the resources to go into other 
countries and inspect, and because it is so decentralized in 
other countries compared to slaughterhouses, that it would be a 
much more difficult inspection system.
    But even if there were very modest inspection in other 
countries, isn't equivalency at its heart a determination by 
the agencies that the other countries have a system which will 
give us the same level of protection? And even though our 
inspection to assure that that is true may be less than 
desirable, nonetheless, it doesn't take a whole lot of 
inspection to see whether there is a system in place. Now, 
whether it stays in place and is applied to every decentralized 
field or producing facility is a different issue. But isn't the 
heart of equivalency that determination as to whether a system 
is in place, and that indeed does not require a huge amount of 
inspections or resources?
    Maybe Mr. Billy first, because I think they have got a 
system.
    Mr. Billy. I think you have put your finger on something 
important here, and it does take some resources, and I will use 
an example, but I think your point is well taken. It is the 
system that you are looking at and evaluating, and a lot of 
that can be done through the exchange of material, periodic 
visits by inspection personnel and others that validate or 
verify that the system will be reliable.
    But I also want to point out that, as I mentioned earlier, 
we now are verifying that the 37 countries are complying with 
our new regulatory requirements or HACCP, and it is no small 
task. We have received volumes of paperwork from these 
countries in their home language, which we have translated to 
provide the basis for us to make these evaluations. So there is 
an infrastructure that is needed with the capacity to deal with 
even this kind of systems evaluation. But I think your point is 
well taken in terms of the system being the point of emphasis.
    Senator Levin. Thank you. Thank all of the witnesses, and 
Dr. Miller particularly, thanks to the Academy for the 
important work you have done in this area.
    Dr. Miller. Thank you.
    Senator Collins. Thank you, Senator Levin.
    Our witnesses may feel that they have caught a break. We 
have another vote that has just begun. We have time for one 
more round of 5 minutes each per Senator, and then I am going 
to ask that we submit the rest of our questions for the record, 
and I will adjourn the hearing when we go to vote. We look 
forward, however, to continuing our dialogue with all of the 
witnesses.
    Commissioner Kelly, I want to ask you a little bit more 
about the idea of using a bonded warehouse for some shipments 
to be held if they are suspected of contamination. Some of the 
weaknesses that we have uncovered in the process is that FDA, 
unlike FSIS, allows the importer to keep control for up to 90 
days of the suspect shipment, and also allows the importer to 
select his or her own laboratory to perform the tests. There is 
lots of opportunity for deception and fraud in the process.
    You mentioned, and I think it is a very valid point, that 
given the huge number of shipments we are talking about with 
the FDA, that requiring the use of bonded warehouses is 
probably not practical. It would be too costly. However, isn't 
there another approach?
    I know we talked at the last hearing that Customs had a top 
10 list of violators of our import laws. I personally think 
anyone who makes the top 10 list should probably be banned from 
the industry forever. But couldn't we have a middle ground 
where problem importers who violate health and safety laws are 
required to have their goods controlled at a bonded warehouse? 
Do you think that would be an appropriate approach?
    Mr. Kelly. It might very well be, Madam Chairwoman. 
However, I am told that we don't have the authority to do that 
now, and then there is an issue of supervision. Once you put 
something in a bonded warehouse, Customs or some entity has to 
supervise it. We have problems with other bonded shipments now. 
I mean, I think the whole area has to be looked at in depth. 
That is something we intend to do in the Customs Service.
    But it is complex, and we just--again, it is an issue of 
space. If we could identify the top 10 violators, then it may 
in fact have some viability and be something we should look at. 
But, again, we are all under resource constraints, and when you 
talk about supervising even the top 10 violators, you know, it 
is a drain. But it is something I would be glad to look at and 
get back with a more specific answer to you.
    Senator Collins. I would appreciate that, and if you have 
specific suggestions for statutory authority in any of these 
areas, and I would say that to all three of the agencies 
represented here, we really do want to work with you to give 
you the tools that you need.
    Another follow-up with you, Commissioner Kelly, on an issue 
that was raised at our previous hearing. At our September 10 
hearing there were a lot of coordination problems between 
Customs and FDA that were discussed. For example, in the Port 
of New York we found that the Customs Service was unaware of 63 
FDA refusal notices.
    Now, it would help, and I think this is something that 
ought to be implemented, if FDA stamped the product ``refused 
U.S. entry'' much the way FSIS does. At least then the importer 
has to go to the trouble of repackaging it. I mean, at least we 
are making it a little bit harder.
    But it is troubling to me that there was that lack of 
coordination, and in 48 of those 63 cases we are pretty certain 
that the unsafe food actually entered into the American 
marketplace. I know that in your written testimony you 
suggested a possible solution to this problem, but I would like 
to get that on the record.
    Mr. Kelly. Yes, I think we need a lot more coordination 
with the FDA. As a matter of fact, we have a meeting I believe 
scheduled today. There is a lot of good things happening. There 
is a joint task force, if you will, in Miami, where FDA and 
Customs officers are working together. I think we will look to 
replicate that where it is appropriate in other areas of the 
country.
    We are talking about a more effective interface between our 
data systems, FDA's and the Customs' systems, that should 
address the issue that you raised, and I am told that that will 
hopefully be ready to go forward at the beginning of the 
calendar year.
    Senator Collins. And you are thinking of using FDA's 
refusal as a redelivery notice for Customs?
    Mr. Kelly. Correct.
    Senator Collins. Is that a part of it, as well?
    Mr. Kelly. That would cut down the time to implement the 
penalty process, if you will. But it really is a duplicative 
process now, and that is what we are looking to do, to use 
their refusal notice as the notice for redelivery. Precisely.
    Senator Collins. It seems like a good, practical 
suggestion.
    Dr. Miller, I just want to ask you one question before I 
yield to my colleague, Senator Durbin. About the time that your 
report came out, the President announced that he was forming 
this coordinating committee. I realize that doesn't go as far 
as what the National Academy's study has recommended, which is 
similar to the approach that Senator Durbin is advocating. But 
do you see this as a good first step, or what was the reaction 
of your organization to the coordinating committee approach?
    Dr. Miller. Well, since the committee had ceased its work 
at the time when the announcement was made, the committee had 
never--had not had the opportunity of evaluating it. So I can't 
speak for the committee nor can I speak for the Academy, but if 
you want a personal view----
    Senator Collins. I would.
    Dr. Miller [continuing]. The answer is yes. I think it is a 
good--it is a first step, a small one, but a first step, and at 
least it recognizes the realities of the current situation 
concerning the interaction between the agencies.
    Senator Collins. It strikes me that one possible option for 
this Subcommittee to consider is codifying the coordinating 
committee as sort of a middle ground between those who would 
like a single food agency and those who are adamantly opposed 
to any change in the current process. That is something that I 
want to explore with Senator Durbin at some point.
    I am going to yield to Senator Durbin. I asked the staff to 
call to make sure that the vote is held for both of us. Senator 
Durbin.
    Senator Durbin. Dr. Miller, would you address this issue of 
equivalency we have talked about here?
    Dr. Miller. Yes.
    Senator Durbin. I mean, the thing that comes to my mind is, 
a lot of the contamination that we are talking about in 
imported fruit and vegetables has a lot to do with sanitation 
facilities in the fields. And if we were to say we are going to 
demand a certain level standard, let's just address that one 
aspect of the problem, would we be able to say that if you just 
lived up to the standards that we impose on growers in the 
United States, that that would meet the safe level in terms of 
health and the like?
    Dr. Miller. Yes, that is a very interesting question. The 
committee, in discussing this issue of equivalency, in our 
discussions, and it didn't show up in the report per se, but we 
all understood that when you talk about equivalent you don't 
mean identical. It means that the outcome is the same.
    And different countries have different problems. For 
example, in terms of water, in some countries of the world you 
can rest assured that what you are not going to have is, in 
fact, clean water. In the United States, on the whole, you can 
be pretty well assured you can.
    So you have to set up different ways of approaching it. The 
only way to assure yourself of this is that what comes out the 
other end is the same, and that you have identified where the 
problems are and you do something to deal with it, and 
sanitation is the basic thing.
    Senator Durbin. What I am asking about is the threshold 
that we have established in the United States for sanitation, 
just to take that, when it comes to workers in the fields 
harvesting fruit and vegetables. If we were to say, ``All 
right, if the rest of the world lives up to this standard,'' 
then at least that concern wouldn't be on the table?
    Dr. Miller. Oh, right. We certainly can't ask other 
countries to do better than we do ourselves.
    Senator Durbin. No, but let's say if we asked them--what I 
am getting at----
    Dr. Miller. We have got standards.
    Senator Durbin [continuing]. Do we have a standard that is 
good enough now for the National Academy of Sciences to say, 
``If the rest of the world followed this,'' that would at least 
allay some of our fears?
    Dr. Miller. As a general rule, yes. I mean, there are 
always exceptions. One thing the scientific community can 
always do is find things wrong with things, and there are 
things that could be made better, and there is no question 
about it. But I think, on the whole, I think you have to say 
that the food supply that is supplied to the American people is 
pretty safe, and that is because the standards we use are 
enforceable standards and the products that we turn out are 
safe.
    Senator Durbin. Well, I am glad you said that, because it 
goes back to the Chair's question, concerns expressed to her 
about if we are going to call for equivalency, does that mean 
higher standards for the United States? And I think your answer 
is that if other countries could come close to meeting our 
standards, that it would solve some of the problems here.
    Dr. Miller. I can only make, if I may, just one further 
recommendation to the Subcommittee, if I can. We have 
concentrated and we seem to be focused entirely on the issue of 
pathogens in food, and correctly so. That is the most recent 
problem, and it is one which in part has come about because we 
focused for so many years on the chemical components of food, 
chemical contamination, and food additives.
    Since I have been talking about this for many years, as my 
colleagues know, arguing that we haven't paid enough attention 
to pathogens, I find myself in the unenviable position of 
having to say, ``Now, wait a minute, let's not forget about the 
other part of it, too. In our efforts to deal with pathogens, 
let's not do what we did to them in the first place, and stop 
doing the things that assure us safe food in terms of 
chemistry.''
    So I would simply suggest that in any legislation you 
consider, you think about food safety in its broadest context, 
not just in terms of pathogens.
    Senator Durbin. Thank you, Dr. Miller. I have another line 
of questions but we won't have time for it, because I would 
like to walk through with the FDA exactly what is happening at 
those ports of entry. Since I saw it a few years ago, I would 
like to figure out whether it has changed. I hope it has in the 
meantime.
    But thank you all for your testimony. Thank you, Madam 
Chair.
    Senator Collins. Thank you very much Senator. Again, my 
thanks to all the witnesses today. This will be an ongoing 
dialogue. All of us who are so interested in this issue look 
forward to working with you in the coming months to put 
together comprehensive legislation on the area of food safety. 
It is an area that Senator Durbin has done a great deal of work 
on, and I look forward to joining with him as well as our other 
colleagues and all of you.
    We will continue looking at the remedy stage of this 
problem in a hearing that will be held tomorrow at 9:30 a.m. in 
this room. Again, my thanks to all of you. I look forward to 
working with you. And I thank the staff for its excellent work 
in this area. The hearing will stand adjourned. Thank you.
    [Whereupon, at 12:28 p.m., the Subcommittee was adjourned 
to reconvene at 9:30 a.m. on Friday, September 25, 1998.]


             IMPROVING THE SAFETY OF FOOD IMPORTS--PART IV

                              ----------                              


                       FRIDAY, SEPTEMBER 25, 1998

                                       U.S. Senate,
                Permanent Subcommittee on investigations,  
                  of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:30 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan M. 
Collins, Chairman of the Subcommittee, presiding.
    Present: Senators Collins and Durbin.
    Staff Present: Timothy J. Shea, Chief Counsel/Staff 
Director; Mary D. Robertson, Chief Clerk; Christopher A. Ford, 
Senior Counsel; Mary G. Mitschow, Counsel; Don Mullinax, Chief 
Investigator; Kirk E. Walder, Investigator; Stephanie A. Smith, 
Investigator; Lindsey E. Ledwin, Staff Assistant; Pamela 
Marple, Minority Chief Counsel; Beth Stein, Counsel to the 
Minority; Marianne Upton (Senator Durbin); and Beth Fitzpatrick 
(Senator Lieberman).

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. The Subcommittee will please come to 
order. Good morning.
    Today, the Permanent Subcommittee on Investigations is 
convening its last in a series of five hearings on improving 
the safety of imported foods. As I noted yesterday, the focus 
of this phase of our food safety investigation is on exploring 
ways to correct the deficiencies in the food import system.
    Yesterday, we heard from the Federal agencies responsible 
for the safety of imported food and from a representative of 
the National Academy of Sciences. The Food and Drug 
Administration, the Food Safety and Inspection Service, and the 
U.S. Customs Service announced several reforms that they plan 
in response to the problems revealed by this Subcommittee's 
investigation. I welcome these positive first steps and look 
forward to the additional administrative improvements, as well 
as these agencies' specific recommendations for statutory 
changes.
    As critical as their roles are, government agencies alone 
cannot provide comprehensive solutions to the problems that 
plague our food import system. The private sector--from 
producers to distributors to retailers to consumers--must also 
be part of any effective program to improve the food safety 
net.
    Americans depend on imports to enrich their diets, 
especially in areas of the country with short growing seasons, 
such as my State of Maine. In order for American families to 
take advantage of the benefits of consuming five servings of 
fruit and vegetables a day that have been recommended by the 
National Cancer Institute and other experts, our food must be 
safe and affordable. Food safety programs in the United States, 
in other words, must be effective and comprehensive, but they 
must not erect needless barriers to impede the import of safe 
and wholesome foods. The challenge facing us is to strengthen 
our import system so that tainted products do not reach our 
dinner plates without stopping the importation of foods that 
Americans enjoy.
    Accordingly, we will hear today from representatives of a 
number of private groups--industry associations, consumer 
groups, scientists, and other experts--who have devoted much 
study to improving our food safety system. It is my hope and 
expectation that the wisdom and experience of such non-
government stakeholders, combined with that of the government 
agencies from which we heard yesterday, will help this 
Subcommittee craft comprehensive legislation to improve the 
safety of imported food.
    It is my expectation that such legislation would be 
introduced early in the next Congress.
    My goals are to help ensure that food safety programs are 
effectively managed, that existing resources are focused on 
those imports posing the greatest risk of harm to Americans, 
and that deficiencies in the underlying regulations and laws 
are remedied.
    To this end, we have asked eight industry and consumer 
organizations to participate in today's hearing. We will hear 
from the Food Marketing Institute, the Grocery Manufacturers of 
America, the National Food Processors Association, the United 
Fresh Fruit and Vegetable Association, the American Public 
Health Association, the Safe Food Coalition, the American 
Council on Science and Health, and Public Voice for Food and 
Health Policy.
    I look forward to hearing from our diverse witnesses today 
and to discussing their ideas on how we can strengthen our food 
import safety system so that Americans can continue to enjoy a 
variety of safe and nutritious foods from around the world.
    In putting together our witness list today, we attempted to 
invite groups representing a wide variety of views. There are, 
however, I have learned, many, many organizations involved in 
this issue. Due to time constraints, we are not able to 
accommodate everyone who wished to testify this morning. 
However, I have sent letters to as many groups as seem to be 
interested, inviting them to provide written statements for the 
Subcommittee's consideration. And if there are any other groups 
that we have forgotten, who are represented today in the 
audience, we would also invite your input by submitting a 
written statement.
    Without objection, the hearing record will be left open for 
10 days, so that all such statements may be included in the 
printed hearing record and our witnesses have the opportunity 
to submit any additional information requested by the 
Subcommittee for the record.
    I would now like to call forward our first panel of 
witnesses. They include representatives of groups associated 
with various aspects of the food production and food services 
industries. These witnesses will give us private-sector 
recommendations for improving the safety of food imports.
    Timothy Hammonds is the president and CEO of the Food 
Marketing Institute, a 1,500-member association representing 
food retailers and wholesalers and their customers in the 
United States and around the world.
    Dr. Stacey A. Zawel is the director of Scientific and 
Regulatory Affairs for the Grocery Manufacturers of America. 
GMA is the world's largest association of food, beverage, and 
consumer brand companies.
    Dane Bernard is the vice president for Food Safety Programs 
at the National Food Processors Association. NFPA members 
process and package fruit, vegetables, meat, fish, and special 
food and beverage products.
    Dr. Nancy Nagle is here representing the United Fresh Fruit 
and Vegetable Association. This is a National Trade Association 
with over 1,100 members that represents the interests of 
producers, wholesalers, distributors, brokers, and processors 
of commercial quantities of fresh fruit and vegetables.
    Pursuant to Rule 6, now that you are all comfortably 
seated, I will ask that you stand and raise your right hand so 
you can be sworn in.
    Do you swear that the testimony you are about to give to 
the Subcommittee will be the truth, the whole truth, and 
nothing but the truth, so help you, God?
    Mr. Hammonds. I do.
    Mr. Bernard. I do.
    Mr. Zawel. I do.
    Ms. Nagle. I do.
    Senator Collins. Thank you. Given the wide range and number 
of witnesses that we have today, I am going to ask that you try 
to confine your oral presentation to about 5 minutes. If you 
need a couple of minutes extra to conclude your thoughts, feel 
free to take them.
    Your written testimony in its entirety will, however, be 
submitted for the record. The lights in front of you will cue 
you as to the amount of time left. When you have 1 minute left, 
the yellow light will come on, and then when you see the red 
light, if you could try to wrap up in the next moment or two.
    Mr. Hammonds, we are going to start with you. Please 
proceed.

 TESTIMONY OF TIMOTHY M. HAMMONDS,\1\ PRESIDENT AND CEO, FOOD 
                      MARKETING INSTITUTE

    Mr. Hammonds. Thank you, and good morning, Madam 
Chairwoman. I am pleased to testify for you here today. This is 
an important issue, and we are very happy to have a chance to 
express our views. Thank you also for letting us submit our 
full written testimony, and I will summarize for you.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hammonds appears in the Appendix 
on page 188.
---------------------------------------------------------------------------
    Let me start by commending you and the Subcommittee for 
your investigation of the adequacy of government programs to 
ensure that imported foods are safe. We feel that is a timely 
inquiry and we welcome it. FMI has a long history of working 
closely on food safety issues with FDA, USDA, and foreign 
countries that both import agricultural products and export 
commodities to us year round.
    In fact, I am very pleased to see that Senator Coverdell 
mentioned in his testimony before this Subcommittee FMI's 
cooperative effort was carried out with FDA and the country of 
Guatemala to develop a model plan of excellence to bring their 
raspberries back into our domestic markets. We are very proud 
of that program.
    Based on our experience, we believe produce imported into 
the United States is safe, nutritious, and healthy. Yet, your 
hearings have identified shortcomings in the Federal system for 
inspecting imported produce, specifically that FDA lacks 
sufficient resources to give consumers the level of protection 
they expect. The agency itself has acknowledged these 
shortcomings. The National Academy of Sciences reached the same 
conclusion in their report: Ensuring Safe Food From Production 
to Consumption.
    Now that you have identified some problems, let us turn to 
what we feel might be solutions. The recommendations of the 
Academy, the President's Food Safety Initiative, and the 
General Accounting Office provide an excellent framework for 
improving the inspection system and making better use of 
existing government resources. Let me point out up front that 
FMI believes these reforms can be made without costing 
taxpayers additional dollars and without additional user fees.
    First, let us focus just briefly on how we might improve 
the inspection system. Clearly, the emphasis should be on 
prevention; that is, keeping contaminated produce from ever 
entering a country. My written testimony sets forth six basic 
components of an effective control system. These include a 
system to evaluate the food safety programs of countries that 
export produce to America to ensure equivalency with U.S. 
standards and Federal authority to reject produce shipments 
from countries with inadequate food safety controls for their 
exports to the United States.
    But regardless of the exact nature of the system put in 
place, one critical resource need must be addressed. Additional 
personnel will be needed for inspection and monitoring at our 
ports of entry. FMI believes this critical need for additional 
personnel can be met by redeploying to ports of entry existing 
FSIS in-plant inspectors freed from their current duties by the 
modern HACCP-based inspection system being put in place for 
meat and poultry.
    We feel there is no question that inspectors will be 
available. When the new HACCP system is in place, FSIS will no 
longer need its current complement of inspectors. This will 
free up thousands of staff hours for use in other areas of food 
safety. FSIS has not yet evaluated the risks throughout the 
food system to determine where those resources could best be 
used to prevent contaminated foods from reaching the consumer. 
However, your hearings have identified precisely where these 
resources would be most effective, and that is at our points of 
entry for imported foods.
    FMI believes this redeployment can easily be accomplished 
in several ways. First, and perhaps most easily, a cross-
utilization program between FSIS and FDA. Such a program would 
allow them to share resources for inspecting imported produce 
and seafood. The President has already asked his new Council on 
Food Safety to develop a coordinated budget for the agencies 
that regulate food safety. The creation of this council, 
complimented by the work of your Subcommittee and others in 
Congress, sets the stage for such a cross-utilization program. 
However, should such a program not prove feasible, we could 
meet the same goal by transferring statutory authority for 
inspecting imported produce from FDA to USDA or by transferring 
FSIS inspectors to FDA for reassignment to ports of entry. In 
our view, a cooperative agreement between the agencies would be 
far superior to either of these alternatives.
    Almost all of the other proposals for improving the safety 
of imported foods that we have heard require additional tax 
dollars. Fortunately, the resources and expertise needed to 
implement this plan that we have outlined already exists within 
the Federal Government. It is simply a matter of coordinating 
resources among the affected agencies or, if necessary, 
redefining responsibilities, as directed by Congress. As a 
result, the approaches I have outlined would be revenue 
neutral.
    We know this proposal could meet with resistance from both 
within the government, as well as from industry. Debate is, of 
course, a part of our natural public policy process. However, 
debate that fails to reach a constructive conclusion serves no 
one's interest. As these issues play out in the media, they 
serve only if continued to raise concerns in the mind of 
consumers.
    The Subcommittee, under your leadership, has raised 
awareness of the shortcomings of our inspection system for 
imported foods, and we feel it is now time to move on to a 
resolution of these problems.
    Thank you, Madam Chairwoman, and Members of your 
Subcommittee for the opportunity to speak with you today on 
behalf of the members of the Food Marketing Institute.
    Senator Collins. Thank you very much, Mr. Hammonds. As 
occurred yesterday, we unfortunately are in the middle of a 
vote. So I am going to have to recess the hearing for 10 
minutes while I go vote. So we will stand in recess for 10 
minutes. My hope is this will be the only interruption we have 
this morning.
    [Recess.]
    Senator Collins. The Subcommittee will resume. I would now 
like to call on Dr. Stacey Zawel for her comments. If I have 
mispronounced your last name, please feel free to correct me.

 TESTIMONY OF STACEY ZAWEL,\1\ Ph.D., DIRECTOR, SCIENTIFIC AND 
      REGULATORY AFFAIRS, GROCERY MANUFACTURERS OF AMERICA

    Ms. Zawel. Thank you, Senator, and good morning. My name is 
Stacey Zawel, and I am the director of Scientific and 
Regulatory Affairs for the Grocery Manufacturers of America.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Zawel appears in the Appendix on 
page 194.
---------------------------------------------------------------------------
    Today, I would like to talk about the U.S. food supply, 
which remains the safest and most abundant in the world. Though 
we are very concerned about imperfections in the system, we 
should not lose sight of the fact that American consumers 
safely enjoy more than 750 million meals every day. GMA and the 
food industry have a great deal at stake in ensuring the safety 
of our products, and we take this responsibility very 
seriously.
    While the primary responsibility of producing safe food 
lies with the food industry, FDA and USDA work in cooperation 
with us to help ensure the safety of our domestic food supply. 
These agencies must also serve as guardians of the health and 
welfare of all Americans, especially with regard to the 
regulation of food imported into the United States. However, to 
do this, FDA needs no further authority to enforce the law. 
Imported food is subject to requirements intended to ensure 
that food is safe, whatever its origin.
    Although the Federal Food, Drug, and Cosmetic Act provides 
FDA with no foreign inspection authority, it does authorize FDA 
to refuse admission to articles, including foods, that appear 
to be adulterated or misbranded or that have been manufactured 
under unsanitary conditions.
    The Secretary of Health and Human Services also has the 
authority to refuse entry to foods that are illegal or subject 
to restrictions in the country in which they were produced or 
from which they were exported.
    To streamline its import monitoring activities, FDA 
routinely issues import alerts to its district offices. These 
alerts identify products and importers that have repeatedly 
violated Federal law. However, inspection at ports is only one 
part of a multifaceted strategy to assure that only safe foods 
are imported into the United States.
    To the extent port-of-entry operations can be improved 
through better management and resource allocation, we would 
support that effort. It is very important to recognize that 
inspection alone does not make food safe. In short, we cannot 
inspect our way to food safety.
    GMA believes that the system and scope of FDA authority, 
parts of which I have described, are fundamentally sound. 
Rather than merely expanding inspection authority, GMA 
recommends three steps we believe will more effectively address 
those food safety concerns, preventing the most significant 
risk to public health.
    First, research must be conducted to identify foodborne 
hazards and habitats. Second, resources must be allocated to 
the appropriate prevention programs and, finally, leadership 
must be asserted in the international standard-setting arena.
    Now I would like to expand on each of these areas. First, 
the agency's responsibility for food regulation must be 
provided with the means necessary for essential scientific 
expertise and research. We have to identify and fight true 
causes of foodborne illness with the right scientific weapons, 
which can only be discovered through laboratory research and 
practical testing.
    Without proper research supporting our food safety system, 
regulators will not be able to keep pace with today's 
manufacturing processes. An effective and credible science-
based system complimenting food manufacturers' own safety 
assessment programs provide consumers with the greatest 
assurance possible that their food is safe.
    Second, the Federal agencies overseeing the food supply 
need appropriate resources. That means money for scientists, 
investigators, state-of-the-art scientific and technological 
tools, and modern, well-equipped facilities.
    Consumers are best served by strong food safety agencies 
that develop policy based on the best science to build public 
confidence in the safety of the Nation's food supply. With 
adequate resources appropriately applied, they will be able to 
respond to changing dynamics of food safety in a creative and 
effective manner.
    Finally, we must assert strong government leadership in the 
global arena to stay on course and develop solutions to real 
food safety problems. Congress needs to provide funding and 
encouragement to both FDA and USDA to play a more active and 
influential role at international meetings such as in the Codex 
Alimentarius.
    This means three things: It means supporting workshops 
prior to Codex meetings to educate our trading partners, 
especially those in developing countries; it means supporting 
the personnel needed to coordinate U.S. delegation activities; 
and, finally, it means building coalitions with other countries 
who participate in Codex to hasten the process of improving 
food safety systems worldwide.
    The steps I have outlined may seem simple, but they are not 
simplistic. They require action that is based on science and 
common sense. GMA stands ready to assist Congress in any way 
that we can to help further enhance the safety of the food 
supply in the United States and throughout the world.
    Thank you for the opportunity to testify today.
    Senator Collins. Thank you very much.
    Mr. Bernard.

 TESTIMONY OF DANE T. BERNARD,\1\ VICE PRESIDENT, FOOD SAFETY 
         PROGRAMS, NATIONAL FOOD PROCESSORS ASSOCIATION

    Mr. Bernard. Thank you, Madam Chairman, and thank you for 
the opportunity to be here and provide comments. Thank you for 
your personal leadership in this issue. I am Dane Bernard, vice 
president, Food Safety Programs for the National Food 
Processors Association.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Bernard appears in the Appendix 
on page 196.
---------------------------------------------------------------------------
    To put our comments into context, I would like to make two 
preliminary observations, if I may. First, the data on 
foodborne illnesses do not support claims that imports are 
inherently less safe than foods produced domestically. Still, 
we feel that some changes in our system of assuring the safety 
of imported foods is warranted and NFPA will be pleased to lend 
its support in identifying appropriate strategies for change.
    Second, NFPA does not agree with the impression left by 
some who have testified that safety of imports is solely the 
responsibility of the Federal Government. American food 
companies are not poised with their arms spread wide ready to 
accept bad product. We have nothing to gain and much to lose in 
our reputations, our customers, and our sales by such a 
strategy.
    The majority of U.S. food processors know and have 
confidence in their international growers, producers, and 
suppliers. U.S. companies conduct more tests, inspect more 
foreign establishments, visit more growing areas, and provide 
more information to suppliers than the government could ever 
do.
    America's food processors are very much a part of the food 
safety-net. Working from this perspective, NFPA supports 
policies that concentrate on whether food is safe, not on its 
origins. NFPA maintains that imported foods should be as safe 
as those produced domestically and NFPA affirms that these 
foods must meet all relevant U.S. public health standards.
    To achieve these goals, we recommend that the United States 
reach accords with other nations or regions, which rely on 
determinations of equivalency based on the best scientific 
information and the application of risk analysis techniques.
    These accords should be based on achievement of appropriate 
levels of consumer protection through application of 
performance criteria which can be verified by U.S. food 
companies and government authorities. Since the definition of 
``equivalent'' or ``equivalency'' are critical to what comes 
next, we should note that, according to Black's Law Dictionary, 
they mean just what the word ``equivalent'' says; equal in 
value, force, measure, volume, power, and effect or having 
equal or corresponding import, meaning or significance. In 
other words ``equivalent'' and ``equivalency'' do not 
necessarily mean identical and are not ``the same as,'' except 
in the end result.
    And I emphasize Dr. Miller's testimony from yesterday, 
which focused on outcomes of food safety rather than the 
elements of the system that produced the food.
    Now that I have covered a few basics of the NFPA position, 
I would like to address some specific points from the GAO 
report. The report recommends that the Federal Government 
reduce its emphasis and reliance on end-product testing to 
verify food safety and, instead, promote systems that prevent 
contamination from occurring in the first place. We fully agree 
with this conclusion.
    As I mentioned a few moments ago, we also agree that all 
imported foods should be produced under equivalent, not 
necessarily identical, food safety systems. NFPA cannot 
endorse, however, legislation that would require other nations 
to adopt our exact procedures and certainly cannot in any way 
condone the mandatory imposition of methods that are the same 
as those in the United States unless no other methods exist to 
ensure an equivalent level of protection.
    To realize these ends, NFPA believes the superior route 
follows international accords like bilateral Equivalence 
Agreements, Memoranda of Understanding, Mutual Recognition 
Agreements, and similar avenues. Voluntary agreements promote 
cooperation and food safety; mandates only invite retaliation.
    When we say ``equivalent'' or ``equivalency,'' we are 
talking about looking at the entirety of the plan, the design 
of the plan. Determinations of equivalence must be based on the 
best science available, including the application of risk 
analysis techniques as appropriate to the situation.
    Producers must still complete the circle by following 
appropriate methods, and the country or region of origin must 
enforce the scheme. For our part, industry and government, we 
need to trust, but verify. Within this construct, random, 
relatively frequent end-product testing may come into play 
until a record of consistent compliance is established, at 
which time end-product testing would taper off to periodic, 
unannounced examinations. The same would apply to inspections 
in foreign countries under a Memorandum of Understanding or 
other voluntary accord.
    Regarding importing firms, FDA could establish a ``three 
strikes you are out'' regulatory threshold where importers with 
multiple safety-related violations would be targeted for 
frequent and rigorous inspection, if not out-and-out denial of 
entry.
    For repeat offenders in this category, a permit system 
could be instituted which stipulates augmented checks on 
imported food products, much like the FDA's domestic program 
for producers of canned goods. Bad actors would have to obtain 
a permit, in other words, from the appropriate agency before 
they could bring products into the United States and permits 
would be granted only after the safety of the goods are 
verified. A ``need for permit'' classification would terminate 
only after the importer re-establishes an appropriate level of 
trust.
    Whether under the current scheme or some other arrangement, 
the FDA, along with customers, must seize greater control over 
our borders and ports, especially when repeat offenders are 
uncovered. Allowing rejected products to re-enter at another 
port cannot be tolerated. Noncomplying imports must be marked 
or otherwise identified so that end runs fail and those 
attempting such fraud are dealt with swiftly and effectively.
    U.S. authorities must also prioritize infractions and 
responses according to the risks they pose. The GAO report 
often cited the example of the Food Safety and Inspection 
Service ranking incorrect labeling that is not health related 
on the same par as true health-threatening infractions. This is 
a ludicrous practice. At the very least, this example displays 
a disturbing disregard for employing our food safety dollars to 
their fullest effect.
    Finally, the GAO report hints at an accreditation system 
for laboratories to permit independent food testing by third 
parties. While the concept has merit, accreditation programs 
are expensive to establish and maintain. Applying a ``three 
strikes and you are out'' system based on random FDA sampling 
to verify accuracy, compliance, and performance could achieve 
similar results. Rather than producing a list of accredited 
labs, FDA could identify those labs that do not produce 
adequate results.
    We agree with earlier comments that additional resources 
will be needed to further enhance our ability to address 
potentially contaminated imports. In the near future, resources 
will be needed to establish Memoranda of Understanding with 
exporting companies; to verify the accuracy of importer-
provided shipping information; and to move repeat offenders 
from eligibility for the simplified electronic filing to a more 
intense regulatory strategy.
    Also, as suggested by the GAO report, the Food Safety and 
Inspection Service should modify its automated import 
information system so that food safety infractions, high-risk 
products, and unsatisfactory importers can be quickly and 
accurately identified.
    On the need for legislation, NFPA respectfully submits that 
any legislative initiative, like the Safety of Imported Food 
Act, should evolve deliberately. We maintain that the FDA 
already has the statutory authority to make the changes through 
regulation that the GAO and others have suggested.
    To confirm and clarify what legislation is needed and not 
needed and as a first step towards coordinating legislative and 
regulatory initiatives, we recommend FDA outline for the 
Subcommittee the problems the agency has identified, their 
current authority to correct those situations, and what 
regulations it foresees proposing to improve the safety of 
imported foods.
    After receiving FDA's analysis, if legislators, regulators, 
industry advocates, and food scientists reach a consensus on 
food safety policy and the FDA demonstrates that legislation is 
needed, then we should proceed to do so. Our concern is that we 
have taken a preliminary fire-ready-aim approach in our current 
proposals that may not produce the most desirable end results.
    Madam Chairman, Members of the Subcommittee, this concludes 
my testimony. I will look forward to your questions.
    Senator Collins. Thank you, Mr. Bernard.
    Before calling on our final witness on this panel, I want 
to call upon Senator Durbin to see if he has any opening 
comments he wishes to make.
    Senator Durbin. None at this time. Thank you.
    Senator Collins. Thank you.
    Dr. Nagle, you may proceed. Thank you.

  TESTIMONY OF NANCY NAGLE,\1\ Ph.D., SENIOR ADVISOR FOR FOOD 
      SAFETY, UNITED FRESH FRUIT AND VEGETABLE ASSOCIATION

    Ms. Nagle. Chairman Collins, thank you for the opportunity 
to testify this morning. I am Nancy Nagle, Senior Adviser for 
Food Safety for the United Fresh Fruit and Vegetable 
Association, and I would like to summarize our written 
testimony.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Nagle appears in the Appendix on 
page 210.
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    I want to remind everyone at the outset of my testimony 
just how safe fruit and vegetables really are. Of the 3,200 
foodborne illness outbreaks reported by CDC from 1986 to 1996, 
only 31 were related to fresh fruit and vegetables. There is 
also no definitive data that exists that implies imported 
produce is a greater risk than domestic.
    Your first question was what are the deficiencies in the 
current food-import process and what can be done to address 
these problems. In the General Accounting Office's April 1998 
report on food safety, they determined that a reliance on port-
of-entry inspections cannot provide complete assurance of 
safety of imported foods. However, we are unaware of incidents 
of port shopping or other enforcement problems occurring with 
fresh produce.
    It is widely accepted among food safety professionals that 
the prevention of microbial hazards is far more effective than 
trying to ascertain and identify and verify the safety of foods 
after it has been produced and handled. United believes that 
FDA has ample authority to work proactively with foreign 
growers, packers, and shippers of fresh fruit and vegetables 
and their respective governments to prevent food safety 
problems.
    FDA's recent experience in Guatemala confirms the 
possibility of proactive, cooperative actions in foreign 
countries to address food safety concerns, but the agency must 
have the necessary resources to do the job.
    United believes that the Federal Food, Drug, and Cosmetic 
Act provides ample existing authority to FDA to deny the 
importation of unsafe fresh fruit and vegetables. FDA may 
refuse admission of food offered for import if it appears, from 
an examination or otherwise, that a food is adulterated, 
misbranded, or has been manufactured, processed or packed under 
unsanitary conditions.
    The Act grants FDA the authority to take enforcement action 
against an imported food based upon far less evidence than is 
required for the same action against a domestically produced 
food. FDA need only to determine that an imported food appears 
to violate the Act. I have attached a more complete description 
of this authority to the written testimony we submitted.
    The greatest constraint to FDA's food safety activities is 
the lack of resources. The GAO's April 1998 report on food 
safety describes a situation where imported food entries are 
increasing at a substantial rate, while FDA's capacity to 
inspect is declining. We believe that Congress should focus its 
attention on the underlying issue of resources rather than 
expanding the agency's statutory authority.
    The second question posed by the Subcommittee is: Can 
regulatory agencies better use their existing regulatory 
authority to improve the safety of imported food?
    In addition to using its automatic detention authority when 
needed, FDA should pursue three important opportunities to 
increase the certainty of safe imported foods. These 
opportunities are the publication of the FDA guidance document 
to minimize and prevent microbial hazards in produce and the 
international dissemination of this document; the publication 
of guidance on the criteria FDA intends to use to evaluate 
whether or not a regulatory system used by a foreign country to 
ensure the safety of food is equivalent to the United States; 
and the pursuit of internationally recognized standards set by 
Codex Alimentarius for the hygienic production and handling of 
fresh fruit and vegetables. I elaborate on each of these points 
in our written testimony.
    Finally, the last question posed by the Subcommittee is 
what other recommendations should be considered to improve the 
food import process. I encourage the dissemination of the 
guidance document on good agricultural practices to as broad 
and multinational an audience as possible. There have also been 
discussions with various aid and lending agencies to encourage 
them to support the development of laboratories and other 
public health infrastructure. If there is greater confidence in 
the safety of products from a given area, there can also be 
economic benefits that accompany such confidence. We have also 
discussed the imported food safety legislation in our written 
testimony in more detail.
    In conclusion, the United Fresh Fruit and Vegetable 
Association is eager to participate in any responsible effort 
to enhance the safety of our Nation's food supply. We recognize 
that foodborne illness is a serious issue, but we do not 
believe that giving FDA additional regulatory authority in lieu 
of needed resources is the appropriate response.
    Thank you for this opportunity to testify, and I will be 
pleased to answer any questions you or other Members of the 
Subcommittee may have.
    Senator Collins. Thank you, Dr. Nagle. I do want to start 
with you to clarify an issue, and you look so happy about it. 
[Laughter.]
    You have testified today that your organization does not 
support additional authority for the FDA. You do not support 
proposals for so-called equivalency. Is that opposition based 
in fears of your members that if FDA moves to an equivalency 
standard, that it will result in increased regulation for 
domestic producers?
    Ms. Nagle. It is actually more of a concern that we will 
not be importing foods at all. One of the things is, depending 
on whether we define equivalency in a legal manner or in more 
of a scientific manner, if we look at some of the proposed, or 
talking about regulations and laws within other countries, we 
believe that, since we are the top tier in regulations, we 
could end up with not being able to import food from other 
countries, where they can produce perfectly safe food, but not 
necessarily as dictated by their government regulations.
    An example would be that if a country does not have the 
appropriate chlorination systems for their water supplies 
within their cities or within their municipalities, but a given 
company that may be producing in that country is doing, is 
chlorinating their water that is used to wash melons or for 
their processing, so we do not want blanket disapproval of a 
country, where there can be definitely safe food coming from 
that area.
    Senator Collins. Does your organization think that the 
equivalency approach that is used for imported meat, poultry, 
and eggs has worked well or do you have concerns about that 
also?
    Ms. Nagle. I think I need to talk a little bit more with 
our legal people there, but we do have some concerns that we 
could end up precluding imports that would be perfectly safe.
    Senator Collins. I do not think anyone wants that result 
and, in fact, I said in my opening statement that I think that 
is the challenge, is to devise a system that can deal with the 
fact that we have emerging pathogens to which American 
consumers are very vulnerable, even if a local indigenous 
population may have built up immunity to it, that are difficult 
or impossible to detect through a border port-of-entry 
inspection.
    The reason I raise the issue with you is, in my questions 
of FDA yesterday, I specifically asked whether FDA officials 
felt that if we moved to some sort of equivalency system it 
would result in a whole new layer of regulation for domestic 
producers because that is not something I want to see. FDA 
officials were pretty reassuring on that point.
    It seems to me that it is in the interests of domestic 
producers, as well as foreign producers, to have a better 
system to ensure the safety of food imports; indeed, the safety 
of all food, because we have had testimony and evidence given 
to us that consumers do not distinguish as to the origin of 
fruit that has become suspect. For example, I have been told 
that when the Guatemalan raspberry incident occurred, which 
resulted in thousands of people becoming ill with foodborne 
illnesses, that people stopped buying raspberries, period.
    So it seems to me that it is not in the interests of 
domestic producers to have tainted fruit come into this 
country.
    Ms. Nagle. We agree. I have a statement on equivalency that 
perhaps I could read for us here. I think you have touched upon 
an important point. I think it is very important that FDA 
finalize its criteria for determining equivalency.
    The agency has the authority to do so, and it would seem to 
be an important step in allocating inspection resources to the 
areas that most need it. Beyond the FDA guidance document, we 
need to be very clear about what equivalency means. I can tell 
you that, as a food safety professional, there are certain 
fundamental principles about sanitation that should be 
universally followed when producing and handling food.
    Food consumed in the United States should be produced under 
these minimum acceptable standards of sanitation, and if that 
is equivalency, we support equivalency. But if the term is used 
too broadly in a legal sense, then we could have very 
significant disruptions. The fact of the matter is that the 
United States has a set of food safety standards, a regulatory 
system, and a public health infrastructure that places us in 
the very top tier of all countries.
    If what is meant by equivalency is that countries in 
Central America, South America, Africa, and Asia are to have 
systems like ours, then we will not be importing food. People 
need to understand that we can import safe food from countries 
that otherwise have poor water quality, inadequate sewage 
treatment, and a general lack of refrigeration. The reason that 
this is possible is because those operations that export to the 
United States use good-quality water, have in place good field 
sanitation, and use refrigeration.
    The fact that a Central American Government may not 
adequately chlorinate a municipal water supply, does not mean 
that a melon grower or shipper does not chlorinate, does not 
have latrines for their workers or that the melons do not have 
chlorinated roots prior to packing.
    We are very concerned that a legal concept of equivalency 
may be unrealistic, and applied too broadly, and bar the 
importation of safe food.
    Senator Collins. Your testimony indicates that, if we go 
with this approach, we do need to be very careful how we draft 
the legislation.
    Ms. Nagle. Right.
    Senator Collins. Your point is similar to one raised by Mr. 
Bernard, and I just want to clarify for the record that I do 
not know anyone who is saying that ``equivalency'' means 
``identical.'' It clearly does not. It does not mean ``same.'' 
It means ``equivalent.'' That is very different. I just want 
to, for the record, state that because you expressed concern 
that it might be interpreted to mean ``identical'' standards to 
the United States, and I do not know anyone who is advocating 
that.
    You also mentioned, and I think an obvious fact, that your 
members are not opening their arms wide, I think you said, to 
welcome tainted fruit. I think that is another obvious 
statement. On the other hand, tainted products is coming into 
the United States. We have had two cases in which thousands of 
people were sickened with the Guatemalan raspberries and also 
the hepatitis-contaminated frozen strawberries from Mexico. So 
this is not a theoretical problem.
    Now, I agree with you that the private sector has a very 
important role to play, and you mentioned that your members 
actually do inspections, which I commend you for. What actions 
do you take when you discover a contaminated, unsanitary farm 
in another country or you discover an unscrupulous importer was 
trying to pass off tainted fruit or vegetables or other food to 
you? Do you report that to the FDA or to FSIS or to the Customs 
Service?
    Mr. Bernard. Thank you for your question. The typical 
response would be immediate rejection of the product, and 
usually that happens before it even exits the country of 
origin. If, for example, poor conditions exist in a growing 
area or a potential vendor of product that wishes to sell to 
the U.S. customer, if the auditors on-site decide that that is 
not someone they want to buy from, it is a market decision. 
They simply refuse that product.
    If there is a consistent problem at port of entry, 
typically the concept would be to send the product back. It is 
not out of the question that someone would report that to the 
government, and that does happen. To give you a conclusive 
answer to say that that always happens, I am sure I cannot do 
that.
    But if I might go back to the issue of equivalence. 
Conceptually, I think everybody agrees with the definition of 
the word, that it does not mean ``same as.'' But you referred 
to the FSIS system earlier, and the GAO report repeatedly 
refers to the FSIS system.
    Because we do not know the exact level of protection that 
the sanitary measures that that system utilizes, what we end up 
doing is looking at the way you do it and the way we do it and 
coming out with a qualitative judgment that says, ``Well, we 
think it is about the same,'' and what you end up with is 
looking at the elements of what we classify as process-based 
standards; we do it this way, you do it this way. Rather than 
looking at the level of consumer protection that each process 
brings to the food. That should be the prime target, and not 
exactly how you get there.
    So I know conceptually we are all talking about equivalence 
not being the same, but we have not yet determined, on a 
Federal policy basis, what we mean by equivalence, how we will 
determine equivalence, and how to go about establishing it 
within countries or regions that we might want to trade with. 
So I would say, as a top-line recommendation, that we need to 
start there with getting our agencies to state their positions 
and explain the logic. Next, we need to get away from just the 
logic to the machinery as to how that is going to happen and 
start filling in some of the blanks and the details of how we 
are going to go about doing determining equivalence. Thank you.
    Senator Collins. My time has expired for this round, but I 
do want to pursue more of these issues with you.
    Senator Durbin.

              OPENING STATEMENT OF SENATOR DURBIN

    Senator Durbin. Thank you, Madam Chair. On behalf of our 
colleague, Senator Glenn, who could not make it here today, if 
there is anyone in America who does not know why he is absent 
today, I will remind them he is preparing for the launch 
October 29 back into space. But he wanted to commend Chairman 
Collins for her leadership on this issue and her leadership of 
the Subcommittee during the session and requests that the 
record of today's hearing remain open so that he may include a 
written statement on this important issue.
    Senator Collins. Thank you.
    Senator Durbin. Thank you. First, I would like to ask a 
fairly general question, very leading I might add, that betrays 
my prejudice on this issue, and let me just see what kind of 
response I get from the panel here.
    I would like to ask each of you to respond to this 
question: Do you believe that dividing jurisdiction for safe 
food inspection in America among at least six different Federal 
agencies governed by 35 different laws makes our food supply 
safer, makes obeying the law easier for your members, or serves 
the taxpayers' needs to avoid added costs of duplication?
    Mr. Bernard.
    Mr. Bernard. Thank you, Senator.
    The responses that were given yesterday to a similar 
question, I think, would be our response. Is the current system 
the optimal system if we are going to design a new system? 
Obviously, not. I think that the American consumers, industry, 
and the agencies involved have done a remarkable job in the 
face of such a confusing system of bringing about a very safe 
food supply.
    We, as well as the agencies who testified yesterday, are 
awaiting the results of further study. Our organization has 
continually voiced concern for coordination, in whatever way 
can be achieved, and we look forward to the further study on 
the issue.
    Thank you.
    Senator Durbin. Mr. Hammonds.
    Mr. Hammonds. Good morning, Senator.
    Senator Durbin. Good morning.
    Mr. Hammonds. Thank you for your question. Clearly, we feel 
that better coordination at a minimum is necessary. As grocers, 
we are dealing directly with consumers, and perhaps the 
difficulties surface in the way that is easiest to understand 
if we think about a time of crisis. Often when there is a food-
safety emergency of whatever source, the grocers are the ones 
that find the TV cameras show up and the reporters are asking 
questions, and it, when jurisdiction is split, can be very 
difficult to find a government spokesman willing to come out 
quickly and reassure the public and establish the exact 
parameters of the situation we are dealing with.
    So, in general, we feel, at a minimum, better coordination 
is necessary. And certainly we feel that there ought to be a 
system in place where, in times of an emergency, there is an 
easy, quick way to find a government spokesman who can 
reassure, not only the people in the industry, but even more 
importantly the consumers as well.
    Senator Durbin. Dr. Zawel.
    Ms. Zawel. Thank you, Senator, for your question.
    I think that the--as you described it--litany of the facts 
and the numbers behind how our system is designed seems rather 
silly, and I do not think that anybody would sit down and say, 
``Is this a great idea? Should we do it if we were going to 
start to build it that way?'' However, we have come this way 
through history and through adapting to the needs that are 
there, and so we, in fact, have a system that is exactly as you 
described, and I think that it deserves to change with the 
changing needs of the consumers, with the changing needs of 
food safety, and it has to adapt just like anybody else in this 
world does with change.
    To do so does not necessarily mean wiping out, exactly as 
you described, the system that exists, but perhaps it means 
altering the system and how it works through maximizing 
coordination.
    Senator Durbin. Thank you. Dr. Nagle.
    Ms. Nagle. Thank you for the question, and I think I have 
got to agree with most of what has been said by my colleagues 
here. We at United acknowledge that it sounds silly. When you 
read this litany, it does kind of make you chuckle and say, 
``If you were doing it, you would not build it that way,'' but 
it is already built, and it has actually worked remarkable 
well, especially considering how disjointed it seems.
    We do think, though, that better coordination and more 
efficient allocation of the resources needs to be accomplished 
in some way, and we think that really focusing on research and 
coordinated efforts for education is really a key part of any 
revamping of the program that needs to happen.
    Senator Durbin. Let me shift the topic from science and 
food to politics. I know it is kind of far afield from this 
hearing, but let us try it for a minute.
    Senator Collins and I agree on many things. I am not sure 
we necessary agree on what I am about to say. I will concede 
completely her point that we need, as you have testified, to 
revamp our system, to change the laws dramatically, to make 
certain that it is more effective.
    We have had ample testimony to suggest that virtually every 
Federal agency with any responsibility when it comes to food 
safety inspection needs to be reviewed and updated. Some of the 
things that we have been told are just horrifying to think that 
this kind of bureaucracy, and inefficiency, and incompetency is 
being tolerated at the expense or danger of the safety of 
American families and the food that they consume.
    Having said that, I also believe that, since we are now 
embarking on a new era where the American consumers' demand for 
imported food has grown dramatically, and where the American 
consumers' demand for safe food is one of the highest 
priorities, if not the highest priority, imposed on the Federal 
Government, that it is naive for us to believe that just 
changing the law is going to accomplish this.
    Now, having said that, I think there is a need for more 
resources here, and more resources to provide more personnel. 
When you find that there are fewer FDA inspectors than there 
are ports of entry, then you get an idea of the size of the 
challenge here.
    Now we have engaged here for a while in this testimony, and 
I have been party to similar testimony at least in the past 12 
or 13 years. There is a little ping-pong game going above the 
table. Let me tell you about the bowling balls that are being 
thrown under the table. Most of the organizations represented 
here--I will just go right out on the limb and say it--hate the 
idea of a user fee like the devil hates holy water.
    The thought that your association members would have to pay 
a user fee for inspection is something you do not want to 
suggest they would embrace, in fact, they despise the idea. 
They do not want to pay for it. And so what are our 
alternatives? If we need more resources--I believe we do. Some 
may argue we do not--if we need more resources, and if we are 
not going to impose a user fee on the people who are going to 
have their product inspected, then the alternative is to turn 
to the Treasury and say, ``Appropriate more money.''
    Well, we know better because we are in an era of balanced 
budgets, and there is just not that much money to go around. 
And year-in and year-out, for as long as I can remember, 
administrations--Republican and Democrat--have talked about 
user fees as the way out and nothing has happened. It is a 
nonstarter.
    A long introduction to what I am about to say. The reason 
why I think we need to move to one agency, avoiding this 
duplication, coordinating these services, is that we can 
generate more service out of the people that we have, and each 
of you are kind of edging into that.
    Mr. Hammonds, in your testimony when you talked about 
moving USDA personnel into areas that might be more directly 
involved in food safety inspection, when each of you talks 
about coordinating FDA and USDA, you are heading in my 
direction. We are really reaching the point I think we all know 
we have to reach. We need one agency that is not overlapping, 
that is not duplicating, that has a set of scientifically sound 
principles that your members can live by.
    I think, honestly, I would like to commend to each of your 
organizations to think about this again, and if from just the 
most selfish interests say this may be the only way to avoid a 
user fee is to put one agency in place and take all of the 
personnel involved and put them out doing their job in a more 
scientific and sensible way, so that your members know what the 
rules are and the consumers are getting a job well done. That 
is my speech.
    Now, having said that--if anybody would like to comment 
they are welcome to. I know this is questions and answers--let 
me ask you about the problem of equivalency, and let me go back 
to what Senator Collins said. She is right. We are not talking 
about identical standards.
    Let us get down to basics here. If we are talking about the 
contamination of water, if we are talking about terrible things 
which occur when you do not have sanitary standards around 
those who are handling food and picking crops in other 
countries, we might respond to it in the United States by 
saying we need portable toilets, we need someplace where an 
employee can wash their hands. What are they going to do in 
Honduras? What is the answer there? What is the equivalency 
there? And that I think is the real question we ought to 
consider.
    I think we need to move towards some sort of equivalency. 
In fact, we are almost bound to by our trade agreements, if we 
want to have it enforceable. But I want to make sure we follow 
through on this. Are we on the same wavelength here; that we 
might be talking about different approaches with the same goals 
in mind, in terms of sanitation, which appears to be one of the 
most basic concerns here.
    Dr. Zawel.
    Ms. Zawel. Well, I think that equivalency is the 
appropriate term to use. I think what you said is that our goal 
in achieving equivalency is exactly the same. The approach is 
what I would call the devil is in the details, and that is 
where our concern would be.
    I would describe, in my mind, without having thought in-
depth about how we achieve the equivalency, I think that is a 
very complex question that deserves a tremendous amount of 
thought, but I think that what we want to see is not how many 
toilets are in Honduras and how many are in the United States 
but, in fact, do we have an equivalent food safety 
infrastructure in Honduras and in the United States. But I do 
not want to go so far as to conflict with Dr. Nagle, who 
appropriately stated that we cannot blacklist an entire country 
just because there is a perception that everything coming from 
that country is, in fact, being produced in an unsafe manner. I 
do not think that that is the case at all, but there are silos 
within countries that can achieve equivalence and that we 
should look at it that way.
    It is not necessarily a direct answer to how we do it, but 
I think that equivalency is certainly the goal that we are all 
interested in.
    Senator Durbin. Mr. Hammonds.
    Mr. Hammonds. If I might comment on both of your issues. 
First, as to resources, we provided what we feel is a revenue 
neutral way to bring substantial resources to bear on our ports 
of entry. You prefaced your remarks by saying it was a 
political issue. Fortunately, the single-agency issue is one 
you ultimately have to make a judgment on and we do not. But we 
feel that there certainly is a chance that this could be done 
with a cross-utilization agreement. And while we are debating 
the single-agency issue, perhaps, that is a reasonable way to 
get started and get started quickly.
    So we think that is a way to be able to dramatically 
improve our monitoring at ports and not have to go to user fees 
or tax dollars.
    On the issue of equivalency, let me just draw on the 
Guatemala example very quickly, if I might. I think the 
important thing here is it is not a one-way determination. This 
can easily, and should, be a dialogue.
    In the situation with the Guatemalan raspberries, the 
country of Guatemala came to Food Marketing Institute I think 
because we were not directly involved in buying products, but 
represented the end consumers and their expectation that the 
product was going to be safe. And we worked very closely with 
the country, with the growers in their home country, and with 
the Food and Drug Administration and, together, worked out a 
very reasonable solution.
    So I think if this is undertaken as a dialogue between the 
importing countries, and the countries' own producers, and our 
Federal agencies, that a very reasonable solution can be worked 
out, and often without having to involve the lawyers as the 
final arbiters here.
    Senator Durbin. Thank you. Thank you, Madam Chair.
    Senator Collins. Thank you, Senator Durbin.
    Dr. Zawel, I want to follow up on Mr. Hammonds' idea for a 
redistribution of resources from FSIS to FDA port-of-entry 
inspections. Could you comment on whether you agree with his 
proposal in that area.
    Ms. Zawel. Well, our comment, also in the context of 
responding to Senator Durbin's statement, which is that a 
single food safety agency is perhaps--that was his 
recommendation. I think, historically--as we have historically 
built this regulatory system that we have, we have historically 
set up silos that exist, and to break down those silos is what 
I mean by coordination and maximizing coordination, and 
efficiency, and effectiveness, and one of the mechanisms to do 
that would be to redistribute the resources that we have within 
each of these silos, if you will, to the changing needs of food 
safety.
    And so, perhaps, that is one recommendation that certainly 
would make some sense.
    Senator Collins. Mr. Bernard, I want to go back to the 
point that you made about the accreditation of labs and that 
you felt this would be a needlessly expensive undertaking. It 
was GAO that first raised concern about the lack of control 
that the FDA had on the samples that were taken from suspect 
shipments and the lack of control over labs. Again, FDA's 
process contrasts with FSIS, which does use accredited labs.
    If FSIS is able to use accredited labs, why are you 
concerned that it would impose a new excessive cost on the 
system for FDA to adopt the same approach?
    Mr. Bernard. Thank you, Senator, for the question. FSIS 
typically uses its own laboratories for testing samples and, 
obviously, they have a great deal of confidence in those 
results because of the controls in place. FDA has obviously its 
own microbiological capabilities. But to expect their 
laboratory to keep up with such a volume of samples that might 
be derived from intensive sampling of imports seems impractical 
to us.
    The alternative would be to use accredited private 
laboratories. Our concern is that, while that is a strategy 
that is certainly worth looking at. There are private 
organizations looking at (and almost finalized) in putting 
together a program to accredit private laboratories, that could 
be capitalized on. But whether that would match with what the 
Federal expectations are, what consumer expectations are is a 
question mark.
    An accreditation program, I think, with government 
intervention would involve check samples, would involve 
scripting out exactly what laboratories are supposed to do, and 
would involve on-site inspections, further stretching 
inspectional resources.
    It should be a topic of discussion as to whether it is 
worth that kind of expenditure or whether there is not 
something else that we could do to achieve the same end without 
having to go through that many hoops and spend further Federal 
resources.
    Our proposal is that, as we have done for years in the 
canned food industry, after some time of working with an 
organization, the government knows who they can trust and who 
they cannot trust. In this case, the government should pull its 
own samples for verification, and if they disagree with 
laboratory results submitted by a laboratory and that pattern 
is established, then you can assemble a list of those who are 
just not producing the right kind of results.
    So I think that our proposal merely is a consideration 
whether there is a less expensive, less resource-intensive way 
that we can achieve the same assurance. If not, then obviously 
we are just trying to look at all options. We are proposing 
that as a different option.
    Senator Collins. I appreciate your clarification on that 
issue. Would you agree that the current system does allow for 
avoidance of the FDA's process by an unscrupulous importer?
    Mr. Bernard. Based on the GAO's report, sure. We can see 
that there is room for improvement in the system, not only in 
the way the samples are collected, but in the way the 
laboratory analyses are run. I think probably the main concern, 
based on some of the conversations we have had, is just 
security of the samples, making sure the right product gets 
sampled and that there is no opportunity or little opportunity 
for firms to substitute good products for bad when the samples 
are to be taken.
    Senator Collins. Thank you.
    Mr. Hammonds, I want to switch gears and ask you about an 
initiative that I understand FMI has undertaken called your 
Total Food Safety Management project. It is my understanding 
that you are working with a firm in Westbrook, Maine, called 
IDEXX, which has been in the forefront of developing some food 
safety tests. Could you tell us a little bit about your project 
and whether you think it might be a useful model.
    Mr. Hammonds. Yes, I can. The project is really based on 
the general principles we have been talking about here, and 
that is focusing on prevention, focusing on risk analysis so 
the resources can be put in the right place at the right time.
    What we are doing is developing for our supermarket members 
models to maintain the safety of critical food products in the 
store. So our first initiative here was to look at the kind of 
products we handle and make a determination of where we thought 
the resources would be best allocated to protect the products 
and identify a half-dozen of those. They would include cut 
produce, cooked chicken, and ground beef as three of the 
specific products we look at.
    Then we recruited volunteer supermarket companies to work 
directly with the group in Maine. We put their scientific 
experts in the stores to make a determination of the critical 
control points; that is, what points in the system of 
delivering this product from the consumer, all of the way from 
receiving from our suppliers and working with our suppliers on 
the kind of standards for products that we buy from them might 
entail, and then they are in the process now of identifying 
those critical points where training, and recordkeeping, and 
monitoring would be most effective.
    As they identify those, they will develop specific training 
modules for in-store personnel that people can understand and 
implement without having to be a food safety technical expert. 
We then will test that system in a real-world setting and 
monitor the end product. And once we determine the control 
programs, the training programs, and in-store monitoring are 
effective, we will make that available to the entire industry.
    So that as we train our in-store personnel in each of these 
departments, we can direct them to the critical control points 
where they will be most effective and give us the highest 
quality and safest products for consumers.
    So it is a very specific product-by-product hazard 
identification and training program designed for supermarket 
employees.
    Senator Collins. Thank you. I think that does have a lot of 
promise, and it is part of my belief that each of us has a role 
to play in improving our food safety system, and I appreciate 
knowing of your efforts.
    I just have one other question that I want to ask all of 
you, just to make sure we are clear on the record. I believe I 
have heard this morning three out of four of you oppose any 
additional authority for the FDA in this area, but I just want 
to make sure that I understand whether you are talking about 
just the equivalency or across-the-board.
    I also want to make sure, starting with Dr. Nagle, in view 
of your comment on port shopping, that we share the evidence 
that we have that there is extensive port shopping going on by 
unscrupulous importers, but I will have the staff share that 
evidence with you.
    But I will start with you, Dr. Nagle. Specifically, do you 
support any additional authority for the FDA to ensure the 
safety of food imports?
    Ms. Nagle. At this point and, again, I am not a lawyer, but 
United's position is pretty clear. We believe that they have 
sufficient authority under the current Act to deal with denying 
entry for an imported product. And if we use the Guatemalan 
example, it also shows that they have the capability to go to a 
foreign location and to work with them there and inspect the 
fields. So, that it does not seem that there is anything in the 
statute that prevents them from doing that now, and, therefore, 
they do not need any additional authority granted to them.
    Senator Collins. Dr. Zawel.
    Ms. Zawel. I would certainly agree. As I said in my 
statement, we believe that FDA does not need any new authority 
to assure that foods coming into this country are safe. In 
fact, what they do need is a reassessment of their current 
activities, a reassessment of resources and more coordination 
to increase their effectiveness.
    Senator Collins. Mr. Hammonds.
    Mr. Hammonds. Well, we believe you need an effective 
control system and you need the proper resources to carry it 
out. If the FDA were to identify additional authority that was 
needed and the scientific community could agree that that 
would, indeed, be beneficial then we would not oppose that.
    Senator Collins. Mr. Bernard.
    Mr. Bernard. Thank you.
    I think Mr. Hammonds said exactly our position. We remain 
today convinced that there are changes that need to be made. 
The Senator mentioned earlier that there are documented 
outbreaks that cannot be denied. There are improvements 
necessary. We do not feel today, however, that all of the 
existing options have been fully explored, so, we remain, at 
this point, unconvinced that there is a need for additional 
legislated authority.
    Thank you.
    Senator Collins. I thank you very much for your testimony 
this morning. The debate on that issue will, obviously, 
continue with our next panel. It's fascinating to me to hear 
your testimony when FDA and GAO believe FDA needs additional 
authority, but it is an issue I raised with FDA officials 
yesterday that they were able to take effective action in the 
case of the Guatemalan raspberries.
    But we will see, as the debate continues, where this comes 
out.
    Thank you very much for your testimony.
    The next panel of witnesses will provide the Subcommittee 
with recommendations from consumer groups and public health 
officials. Dr. Richard Levinson is the Associate Executive 
Director for Programs and Policy of the American Public Health 
Association. This organization is comprised of over 30,000 
individual members and 20,000 additional State and local 
affiliate members and represents more than 75 disciplines in 
public health and related fields.
    Carol Tucker Foreman is representing the Safe Food 
Coalition, an umbrella group of consumer, public health, senior 
citizen and labor organizations that works to educate the 
public about the hazards of foodborne illnesses.
    I would also note that Ms. Foreman is a former staff member 
of this Subcommittee, I learned last night, in one of her first 
jobs after graduate school. So, it is a great pleasure to 
welcome her back to PSI today.
    Dr. Ruth Kava is the Director of Nutrition at the American 
Council of Science and Health, a consumer education consortium 
concerned with issues related to food, nutrition, chemicals, 
pharmaceuticals, the environment and health. This organization 
is led by a Board of 250 physicians, scientists and policy 
advisors.
    Robert Hahn is here on behalf of Public Voice for Food and 
Health Policy. This is a national nonprofit research and 
advocacy organization that looks at food and agricultural 
policy from a consumer perspective and promotes a safer, 
healthier and more affordable food supply.
    Pursuant to Rule 6, I am going to ask you to stand and be 
sworn in. Would you raise your right hand?
    Do you swear that the testimony you are about to give, is 
the truth, the whole truth, and nothing but the truth, so help 
you, God?
    Mr. Hahn. I do.
    Ms. Foreman. I do.
    Dr. Levinson. I do.
    Ms. Kava. I do.
    Senator Collins. Thank you.
    As for the previous panel, I am going to ask that you limit 
your oral testimony to 5 minutes. If you need an additional 
couple of minutes to finish up, however, feel free to take that 
time and the green light, yellow light and red light will help 
guide you.
    I am going to start with you, Dr. Levinson.

  TESTIMONY OF RICHARD LEVINSON, M.D.,\1\ ASSOCIATE EXECUTIVE 
   DIRECTOR FOR PROGRAMS AND POLICY, AMERICAN PUBLIC HEALTH 
                          ASSOCIATION

    Dr. Levinson. Thank you, Madam Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mohammad N. Akhter, M.D., MPH, was 
submitted on behalf of the American Public Health Association, appears 
in the Appendix on page 221.
---------------------------------------------------------------------------
    My name is Richard Levinson and I am the Associate 
Executive Director of the American Public Health Association 
and I am very grateful to present our point of view on how we 
can help ensure the safety of the food supply for the American 
public.
    I wish to begin by emphasizing that we strongly believe 
that food safety is a major public health problem in the United 
States. We concur that the food supply in this country may be, 
indeed, the safest in the world but despite lack of solid 
information about the incidence of foodborne illnesses, our 
estimates or the estimates that are provided indicate that 
millions of such cases of foodborne illness occur each year in 
the United States, and that some of them, perhaps a small 
number, but some of them do lead to death and disability.
    The whole process of foodborne illness is certainly a major 
cost to the United States in terms of medical care and 
disability resulting from such illnesses. We cannot say that at 
this time that imported food is necessarily less safe than 
domestic food, but we certainly know very clearly that imported 
food has been responsible for a number of recent outbreaks. The 
Cyclospora, the Hepatitis A and Salmonella instances indicate 
this very clearly.
    In view of the fact that the volume and percent of imported 
food is steadily rising in the United States, our risk-based 
approach suggests that we should be very much concerned about 
imported food and its safety.
    Looking at the ways in which we might improve the safety of 
imported food, I have to begin by stating that we will never be 
entirely successful in that effort until our own system of 
guaranteeing domestic food safety has been improved upon and 
made basically more optimal.
    The National Academy of Sciences in its recent publication, 
which is entitled, ``Ensuring Safe Food From Production to 
Consumption'', has pointed out that there are some 12 agencies 
in the United States that are responsible for food safety and 
that they operate under 35 different legislative statutes, some 
of which are contradictory in their scope.
    The result has been that there is a great deal of 
fragmentation, duplication, overlap and even outright conflict 
in the enforcement of food safety activities within the United 
States from the Federal Government point of view. Furthermore, 
the Federal approach rarely gets down to the State and local 
individuals who are also trying to monitor food safety and it 
has rarely involved the public to the extent that it should 
since the public is the key factor in this whole equation.
    Looking at the Federal organizational approach to food 
safety it is quite clear that the Department of Agriculture and 
FDA are the two principle agencies but the other 10 cannot be 
disregarded. These two agencies also overlap and conflict in 
many of their activities domestically, and the famous example 
of the pepperoni pizza in which we have two agencies inspecting 
one product, often at the same time, and certainly creating a 
certain amount of confusion not only for the makers of 
pepperoni pizza.
    If we look at their activities internationally, it is 
perfectly clear and apparent that they are approaching control 
of food safety under an international basis in a totally 
contradictory manner. The equivalent authority that FSIS, from 
the Department of Agriculture, has is perhaps not entirely 
perfect but it seems to be infinitely preferable to the point-
of-entry approach of the Food and Drug Administration.
    The FDA simply does not have the person power or the 
ability to monitor every point-of-entry by which food might 
enter the United States and current estimates are that it 
monitors less than 2 percent of these points-of-entry, which is 
grossly inadequate.
    You have dwelt in your previous testimony on the 
inadequacies of assuring control of food that is being 
embargoed for inspection by the FDA by the use of questionable 
laboratory procedures and laboratories to monitor it, and by a 
whole host of other issues that arise in this point-of-entry 
type of situation.
    What do we recommend be done about improving the situation? 
Now, there are many, many aspects of this. Certainly the 
science has to improve, certainly the methods of inspection and 
surveillance need to be extended, but we think that the whole 
thing could be significantly improved, including all of its 
aspects, by developing a single Federal agency which has the 
total authority and responsibility for all Federal activities 
in food safety, both domestic and international. This agency 
should cover all of the functions that are related to food 
safety. It should have the resources necessary to carry it out. 
And, most important of all, it must have the legislative 
authority to be effective.
    Until this happens we are convinced that patchwork types of 
solutions, which have been employed in the past in attempting 
to make agencies more equivalent in their approach to 
international or domestic food safety issues, simply will not 
work. I notice that my time is up and I can further expand in 
the question period on this. But, I think that I do want to 
emphasize we feel this is the most important thing we can 
contribute to the debate, the support for a central agency.
    Senator Collins. Thank you very much, Dr. Levinson.
    Ms. Foreman, would you, please, proceed?

 TESTIMONY OF CAROL TUCKER FOREMAN,\1\ COORDINATOR, SAFE FOOD 
 COALITION; ACCOMPANIED BY CAROLINE SMITH DeWAAL, DIRECTOR OF 
 FOOD SAFETY FOR THE CENTER FOR SCIENCE IN THE PUBLIC INTEREST 
             ON BEHALF OF THE FOOD SAFETY COALITION

    Ms. Foreman. Thank you. Good morning. I am here as the 
Coordinator of the Safe Food Coalition, a group of consumer, 
public health, senior citizen and labor organizations who have 
worked together since 1986 to improve the Nation's food safety 
system. The coalition was instrumental in persuading the 
Federal Government to revise the 100-year old meat and poultry 
inspection system. My own interest in this issue stems from my 
service as Assistant Secretary of Agriculture for Food and 
Consumer Services during which time my responsibilities 
included meat and poultry inspection.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Foreman appears in the Appendix 
on page 229.
---------------------------------------------------------------------------
    My testimony today was prepared by and is based on research 
done by Caroline Smith DeWaal of the Center for Sicence in the 
Public Interest. My oral statement is taken from that.
    Our coalition appreciates very much both the vigorous and 
meticulous work that this Subcommittee has done in 
investigating and documenting the problems with the safety of 
imported foods. You have revealed a number of weaknesses that 
are serious and have to be resolved.
    Neither our domestic nor our imported food supplies are 
safe enough. It is true that millions eat safely every day but 
it is also true that millions get sick every year and that 
thousands die from foodborne illness. That toll can be and 
should be reduced.
    We are more aware of problems with imported foods now 
because imports have expanded so dramatically. Thirty-eight 
percent of our fruit now comes from other countries, as do 12 
percent of our vegetables and half of the seafood we consume.
    That is not a bad thing. We live in a world market. I love 
as an individual, and its clear consumers all over the country 
love, having access to food that comes in from other places. It 
is nice to be able to have that summer fruit in the middle of 
the winter here. But it is acceptable, in fact, it is 
reasonable that we will demand some assurance of safety in 
those foods.
    While food imports are expanding, the Food and Drug 
Administration's resources allocated to inspecting them are 
declining. In 1990, they physically inspected 8 percent of the 
imported food; today they will physically inspect only 1.6 
percent. Inadequate inspection has consequences.
    CSPI has identified 14 outbreaks of foodborne illness since 
1980 associated with imported food--cantaloupe, crab meat, 
tuna, cheese and strawberries are among them. Countries of 
origin include Ecuador, Portugal, Israel, the Netherlands, and 
Guatemala.
    I would like to make some suggestions about how to improve 
the safety of imported food. The Congress can start right now 
this week--by starting to provide FDA with some additional 
resources to do the job that needs to be done. It can improve 
the Agriculture Appropriations Act Conference Report by 
approving an increase of $68 million in the President's Food 
Safety Initiative. That would give FDA an additional $26.7 
million for new import inspections.
    The agency needs those resources and they need them, I 
think, immediately. I think your hearings and investigations 
indicate that over and above all other things.
    We need to give FDA the authority to do the job. And you 
have several pieces of legislation pending before the Congress 
now. S. 1707 and H.R. 2052 provides specific authority to 
reject food from countries that have denied FDA inspectors 
access to review growing and processing.
    H.R. 4080 would provide a modest fee to importers in order 
to increase border inspections and begin to develop real time 
microbiological testing.
    H.R. 3676, the Consumer Food Safety Act, would require both 
domestic and foreign food processors to register with FDA and 
requires regular inspections of all high-risk processors. We 
believe that is absolutely essential for FDA to have some 
equivalency authority similar to that of USDA.
    I have had experience with administering USDA's system. It 
works reasonably well and I would be glad to answer questions 
with regard to that if you would like me to later.
    The second thing you can do is to rationalize and unify the 
entire food safety system as recommended by the National 
Academy of Sciences. It is really essential to revamp the 
statutes, to have one unified food safety law and avoid 
different authorities, requiring different things.
    The basic goal of those should be to protect public health 
and to allocate resources according to the risk to public 
health. We need one Federal official with the responsibility 
and the authority to do the job.
    Again, I can tell you from a personal perspective that the 
present system just does not work. And if you ask anybody who 
has ever had responsibility for administering either meat and 
poultry inspection of the Food and Drug Administration, they 
will tell you it is a miserable way to achieve an effective, 
efficient food safety system. At least two Members of your 
Subcommittee support the creation of a single food safety 
agency.
    My time has expired. I do want to say one last thing. I 
have some serious concerns about GAO's proposal for redeploying 
resources, $271 million, from FSIS to FDA and if the 
opportunity arises I would like to comment on that.
    Senator Collins. If you would like to comment right now on 
it, feel free to do so.
    Ms. Foreman. OK. Thank you.
    I am not a defender of the old-fashioned way of inspecting 
meat and poultry. I have spent a lot of time trying to change 
it. The Department of Agriculture has now taken that on and is 
trying to do away with this 100-year old system and introduce a 
modern system.
    We have to be careful that we take reasonable and rational 
steps to get from here to there. It is a 100-year old system. 
There are 6,000 plants out there. Some of them are very 
sophisticated and some of them would shock you at their lack of 
sophistication. They rely on the inspector to walk in every 
morning and tell them to wash the equipment. If the inspector 
fails to say that, they do not wash the equipment.
    Public health is at stake. We have to move carefully and 
judiciously from that old system to the new system. There are 
7,200 inspectors and 6,000 plants. I am afraid if we say, all 
right we got a new system. Let's pull everybody out of these 
plants and send them over to the Food and Drug Administration, 
we may have terrible negative unintended consequences.
    I am perfectly prepared to see a plan that lays out a time 
certain for beginning to move away from the old inspection 
process. I am prepared to redeploy resources as data come in 
that show the new system works in reality as well as in theory. 
USDA has those studies underway now. I am confident that they 
are going to show that the system is working. But I am afraid 
that because of what the GAO recommended, inspectors will be 
pulled out of plants and public health will suffer.
    Senator Collins. Thank you.
    Ms. Foreman. Thank you.
    Senator Collins. Dr. Kava.

TESTIMONY OF RUTH KAVA,\1\ PH.D., R.D., DIRECTOR OF NUTRITION, 
             AMERICAN COUNCIL ON SCIENCE AND HEALTH

    Ms. Kava. Thank you, Madam Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Kava appears in the Appendix on 
page 241.
---------------------------------------------------------------------------
    The American Council on Science and Health thanks the 
Subcommittee for the invitation to testify here today. And we 
would like to basically reiterate some of our written 
testimony. First of all, between 1983 and 1997, according to 
the GAO report, there were at least 17 outbreaks of foodborne 
illness in which imported foods were suspected, if not proven, 
sources of pathogens.
    But it is not clear, according to some work done by USDA, 
that imported foods pose any greater risk to the health of the 
American people than do domestic counterparts, simply because 
the information is not really there. It is fragmentary. Not all 
outbreaks of foodborne illness are traceable. We do not know 
exactly where--although the Mexican strawberries, obviously, 
came from Mexico, they were contaminated with Hepatitis A but 
they were processed in the United States. So, my understanding 
is we really do not know where that contamination occurred.
    This kind of issue is also a problem in determining exactly 
where the onus of responsibility lies for certain types of 
foodborne illness outbreaks.
    As has been noted here by several people this morning, the 
importation of foods and food products has increased 
substantially. In 1996, imported foods accounted for 21 percent 
of domestic fresh fruit and vegetable consumption. And this is 
probably going to increase. As has also been noted, we like 
having our fruit and vegetables in the middle of the winter 
that we cannot grow here ourselves.
    Now, the GAO report certainly indicates that there are 
major discrepancies between the responsibilities of the FDA 
with respect to maintaining imported food safety and the 
resources which that agency is given in order to perform that 
function. The FDA faces an increasing volume of imports but has 
a static number of inspectors, insufficient financial resources 
and we feel a lack of legal authority compared to that granted 
to USDA.
    We, therefore, would recommend that these discrepancies be 
eliminated and that Congress take steps to enable FDA to 
perform its regulatory functions more efficiently. With respect 
to the question of equivalency, we see it as a positive thing 
that FDA be granted some sort of authority to ensure 
equivalency in the scientific sense. I know we have discussed 
the definition of the word here this morning. And that perhaps 
the timing with which this equivalency requirement be enforced 
be flexible to allow us to take into account the differential 
abilities of trading partners to come up to speed.
    FDA has already established memoranda of understanding with 
some countries and that process could continue and evolve into 
some sort of an equivalency situation.
    We also feel that all existing food safety oversight 
agencies should support and expedite the use of existing 
technologies such as food irradiation that we already have 
approval for but which are not yet being used. Partly, we 
understand because there are bureaucratic problems with getting 
guidelines set up so that people can actually go ahead and use 
these technologies.
    In terms of the efficiency of use of the different 
agencies, we see this as one way in which efficiency could be 
improved. We do have existing technologies that could help 
improve food safety and we are not using them. We should be 
using them. We would like to encourage that.
    We would also like to encourage focusing on proven health 
risks in Congress' efforts, not those that are based on 
hyperbole. I noted in the GAO report, some of the testimony 
there emphasized that FDA has said for many years that the 
greatest risk in terms of foodborne illness are microbial 
pathogens. And, yet, what you hear out there from consumers and 
what we get questions about, not infrequently, are things like 
pesticide residues. To my knowledge, pesticide residues have 
not been the proven cause of any major outbreak of foodborne 
illness. It is a constant fear but there does not seem to be 
good data supporting that.
    Finally, we also feel strongly that there needs to be more 
education effort to tell the consumer about what the real risks 
of foodborne illness are, more education in terms of how they 
need to handle and prepare foods in order to avoid foodborne 
illness, and perhaps just as importantly, to educate the public 
to an understanding that there is no zero risk. That there is 
always some level of risk and the government is not going to 
save them from all possible foodborne risk possibilities. Thank 
you.
    Senator Collins. Thank you, Dr. Kava.
    Mr. Hahn.

   TESTIMONY OF ROBERT HAHN,\1\ DIRECTOR, LEGAL AFFAIRS AND 
       RESEARCH, PUBLIC VOICE FOR FOOD AND HEALTH POLICY

    Mr. Hahn. Thank you.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hahn appears in the Appendix on 
page 244.
---------------------------------------------------------------------------
    Madam Chairwoman and Members of the Subcommittee, good 
morning. My name is Robert Hahn, Director of Legal Affairs and 
Research at Public Voice for Food and Health Policy, a 
nonprofit consumer research and advocacy organization that 
seeks to ensure a safe, nutritious and affordable food supply.
    To avoid being unduly repetitive, let me just say that we 
agree that the FDA system for ensuring the safety of imports is 
clearly in need of reform and that many of the needed reforms 
will require legislation and additional resources.
    The first order of business should be for FDA and its 
partner, the Customs Service, to improve border inspection and 
to eliminate the many opportunities for unscrupulous importers 
to commit fraud. Some of these measures FDA and Customs can 
take now without Congressional action and, as we heard 
yesterday, the two agencies are moving to do so.
    For example, Customs should increase the civil penalties 
for food safety violations. FDA inspectors and not the importer 
should collect all samples for lab testing, and all testing 
should be done by either an FDA lab or an accredited private 
lab. And FDA and Customs must find a way to ensure that 
rejected shipments are reexported or destroyed.
    Other needed measures will require legislation. We believe 
that Congress should authorize FDA to require the registration 
of all food importers and to charge them a nominal registration 
fee. Second, FDA should have the authority to require the use 
of accredited laboratories.
    Third, Customs should have the authority to require 
importers with a history of violations to use independent 
bonded truckers and warehouses at their own expense. Fourth, 
Congress should give FDA the authority to stamp rejected 
shipments with the words, ``Refused Entry.'' And, fifth, 
Congress should give FDA the authority to levy civil fines. FDA 
should not have to rely on Customs, an agency with different 
priorities, to collect fines for food safety violations.
    While improving border inspection is important, border 
inspection has serious limitations as a way of ensuring the 
safety of imports, as we have already heard.
    Given the increasing volume of imports and the resource 
constraints on the FDA, FDA will probably continue to inspect 
only a very small percentage of imports. And even when a 
shipment is inspected and a sample taken for lab testing, it is 
very difficult to catch contamination which may be randomly 
distributed in the product, and certain types of pathogens, 
such as viruses and parasites, are very difficult to detect at 
all.
    Giving FDA equivalency authority is the long-term solution 
to the problem of unsafe imports. If we are going to import 
food from around the world, we ought to know something about 
the system under which it was produced. With equivalency 
authority, FDA could require exporting countries to open their 
food safety systems to FDA review and if FDA knows that an 
exporting country's food safety system is a disaster waiting to 
happen, FDA should have the authority to ban its imports 
without waiting for a major outbreak of foodborne disease.
    Finally and equally important, FDA needs additional funding 
to perform its responsibilities effectively. It is clear that 
FDA will need significant additional funding if it is to ensure 
the equivalency of foreign food safety systems while 
maintaining an appropriate level of inspection at the border.
    Thank you for this opportunity to share our views, and I 
would be happy to answer any questions.
    Senator Collins. Thank you very much, Mr. Hahn. And thank 
you all for your helpful testimony.
    After listening to five different days of testimony and 
doing a lot of work in this area, it seems to me that there is 
a consensus that we need to fix some of the smaller 
administrative problems. For example, FDA ought to be marking 
or stamping shipments, ``Refused Entry,'' so that they cannot 
so easily be entered into the American market place.
    And we need better fines so that it is not just a cost of 
doing business if you get caught violating the law. We need, 
perhaps, to give more authority to agencies to impose civil 
penalties, so that there is a greater range of penalties.
    Then we come to the harder issues. And it seems to me they 
break down into three categories. There are those who believe 
that the only way to improve our food safety system is through 
a dramatic organizational change. Senator Durbin has worked 
very hard over the years in favor of advocating a single food 
agency and Dr. Levinson endorsed that today, as have others.
    There are others who believe this is really a resource 
issue. And that the problem is that FDA only inspects fewer 
than 2 percent of all shipments. And that you really need to 
have more resources so that FDA can do more inspections and 
that it is a mismatch of inspections versus the volume of 
imported goods.
    The third category of people argues that we really need a 
whole new system, that we are never going to be able to catch 
up to the problem through ports of entry inspections and that 
we need to go to an equivalency system and get at the root of 
the food safety issues.
    I am beginning to think that we probably need to do some of 
all three. I am not convinced yet, although I may be 
ultimately, that we need an entire new organizational structure 
and I wonder what that does if you do not solve some of the 
underlying problems with equivalency. But, clearly, we have 
established a record that suggests that there are very severe 
coordination problems because we have so many agencies 
involved.
    I would like to start with Dr. Kava and then go down the 
row here, and ask your judgment. Is this primarily an 
organizational problem, is it primarily a resource problem or 
do we need a new system or is it a combination of all three?
    Ms. Kava. It is probably, we would think, a combination of 
all three. Although in terms of sort of junking the whole 
system and starting over again, I am not sure that I see how 
that would speed up the improvement of food safety because the 
simple reorganization process, itself, would be lengthy and 
complex.
    It would seem that resources are a significant issue, 
especially as outlined in the GAO report, and we would support 
the Food and Drug Administration being given appropriate 
resources in order to carry out its mandate.
    Again, as far as equivalency goes, FDA, itself, has 
apparently questioned the need or it sounded almost in the 
report was concerned about having mandatory equivalence. We 
would think that would be necessary eventually. That FDA and 
FSIS should not have disparate levels of authority for ensuring 
the safety of foods.
    So that we would be in favor of it but we think also that 
this could be worked out to be as painless as possible for 
trading partners by working perhaps through the Codex 
Alimentarius that the United States should take a leading role 
in trying to effect those changes in that way too.
    I think there are mechanisms by which equivalency could be 
established and at this point, it sounds good to say, well, we 
have 12 agencies and 35 laws, so, let us junk that and have one 
system. But that does not--it sounds good but it is not clear 
to us, at least yet, how that would definitely improve things 
because with one agency you could also have a stranglehold over 
a lot of different systems that might not benefit all of us 
equally well.
    Senator Collins. Thank you.
    Dr. Levinson.
    Dr. Levinson. Yes, thank you.
    Certainly there are resource issues and whether you have a 
new system, one agency or multiple agencies, the resource 
issues will continue. More resources have to be put into the 
whole process of guaranteeing food safety.
    I think the equivalence issue for the international scene 
has really been settled. I do not know of anybody that supports 
the point-of-entry approach that FDA now uses over the 
equivalence issue.
    I think the problem comes up in defining equivalence, and 
we have heard several definitions today. The one I prefer which 
I did not hear is that it is exactly the same as the United 
States' system. I know that cannot be achieved easily but it is 
the goal towards which we have to work.
    As far as revamping the system, I think that this is 
necessary because of conflict in the legislation and in the 
cultures of the organizations that implement that legislation. 
But I think that any reorganization or any attempt to set up a 
new agency would base it on science and on risk analysis and on 
effective surveillance. So, however this is done, those three 
principles have to be guaranteed.
    And since these things are honored more in the breach than 
in practice, enforcing them would set up a new agency or new 
approach. I have already stated that I think there needs to be 
one agency.
    My principle reason is that unless you have that you are 
going to continue to have conflict between organizations 
involved in terms of their culture, their history, their 
approach to the world, and although these various approaches 
may be individually valid, you need one solid approach if you 
are going to effectively regulate the food industry. So, I 
think there has to be one agency.
    Senator Collins. Ms. Foreman.
    Ms. Foreman. I think that you scratched the itch of the 
import problem and found that underneath it there is a much 
bigger problem. I think that is what is happening here.
    The problems that we have with the safety of imported food 
is a reflection of a law and an agency structure that were 
designed for another time when there were not international 
markets of the kind that there are now and, certainly, when the 
health risks were different.
    Carcass by carcass inspection was set up when the same 
things that made animals sick made human beings sick. That 
stopped being true a long time ago, but we have updated the law 
to deal with today's problems. Congress should begin to deal 
with this problem.
    I suggest a Presidential Commission be appointed. Put all 
the people that you have heard over the last several days of 
hearings who disagree on this issue in a room and give them a 
time limit to work something out. It would happen.
    Senator Collins. I like that idea.
    Ms. Foreman. We keep doing this minuet. The industry people 
say they oppose it. We say we support it. Put everybody in a 
room and say, fix it. I think it would get fixed. And I think 
what would come out would be a document that would be useful in 
educating the American people and the Congress about why it is 
worth going through the struggle to reorganize.
    I am going to keep coming back to the resource issue. It 
would be resolved in small part by reorganizing. There are 
duplicate administrative and budget staffs at these agencies. 
Those could be eliminated by bringing the agencies together. 
You have a few places where you have FDA and FSIS and OSHA 
inspectors a plant.
    Most importantly, you could redeploy resources more easily, 
because all would work for the same agency. It does not have to 
be an independent agency. I could think of a lot of ways you 
might do it.
    Let me address equivalency for just a minute. It is a first 
step. It is probably the easiest of the things that you might 
do.
    USDA's equivalency system works pretty well for what it is. 
Organoleptic inspection is not a good system for today's 
problems and equivalency does not work to the extent that it is 
demanding equivalence on things that are not important any 
more.
    As USDA moves to a HACCP system and to performance 
standards that limit pathogen levels in a product, you answer 
much of the fear that the industry has about how to define 
equivalency. If equivalency means you have to meet the same 
performance standard that people in the United States meet in 
terms of microbial contamination of the product, that is a 
science-based standard for equivalency.
    Thank you.
    Senator Collins. Thank you.
    Mr. Hahn, is it more an issue of organization, resources, 
or do we need a whole new system?
    Mr. Hahn. I agree that it is a combination of all three. I 
think the immediate need is to add additional resources and to 
take measures to fix the existing system. But I also support 
the creation of a single food safety agency.
    Senator Collins. Thank you.
    Dr. Levinson, you represent the Public Health Association 
and, thus, have knowledge of the interaction among the various 
levels of government on food safety. In one of our hearings we 
heard from the CDC which described the trace back process and 
the necessity for a physician to identify a foodborne illness 
which oftentimes does not occur, and then report it to the 
appropriate officials.
    How well do you think that system works, the coordination 
among the private physician, the local public health agency, 
the State and the CDC and Federal officials?
    Dr. Levinson. Let me begin by stating that even in areas 
where we have reporting by law, for example, a number of 
infectious diseases that must be reported, we consider an 
outstanding result has occurred when 50 percent of the cases 
are reported.
    So, even when required by law it is very, very difficult 
because it is troublesome in the current system, pencil and 
paper and so on, to get the reports in, to remember to meet 
deadlines, etc.
    Where you have a totally voluntary system like we have for 
food safety, it basically does not work at all. There are 
attempts to improve it with FoodNet and so on and, indeed, what 
they involve is using other sources. You do not rely on the 
physician's report, you look at the laboratories, you look at 
other sources of information and then trace cases from that 
source rather than waiting for only one group to report.
    I think that improves the situation somewhat, but it does 
not make it perfect. So, I think that this is a work in 
progress and we still have a long way to go. I would be happy 
if we had 50 percent of the cases of foodborne illness reported 
but we are very far from that now. And I think the only way we 
will get to a level even that high is if we do involve many 
other components besides just the physicians reporting in order 
to attempt to detect and trace cases of foodborne illness.
    Senator Collins. At one of our hearings we had a witness 
who was a scientist himself and who had been stricken as a 
result of eating the infamous Guatemalan raspberries. And he 
diagnosed himself as a result of reading a New York Times story 
about the outbreak. He had been to his physician and his 
physician thought he just had some sort of intestinal flu. And 
he ended up diagnosing himself. But he had the advantage of 
being a trained scientist and having seen the New York Times 
story.
    I guess my final question to all of you is how much more 
education do we need to do to allow consumers to recognize 
foodborne illnesses as well as improve their own food handling 
since we know that that is a fairly common cause.
    And how much more do we need to do to educate the medical 
community to recognize foodborne illnesses?
    Dr. Kava.
    Ms. Kava. Well, I think we still have a lot to do to 
educate consumers. I think polls and hidden cameras that try to 
document how frequently people wash their hands, for example, 
after using the restrooms, both consumers, ordinary people as 
well as medical professionals, has revealed an astoundingly low 
percentage of people who are compliant with this very basic 
issue of safe, well, just general sanitation and safety. And I 
think that that needs to be emphasized over and over again.
    But some of it may also be out of control of consumers 
because more and more of us are eating out much more frequently 
in which case what we need to do is educate food service 
workers to a greater extent or to the greatest extent possible 
about sanitation.
    I think this needs to be ongoing. Perhaps there could be 
something done in schools so that children start learning about 
these types of issues very early on and not just wait until 
people are adults and they get sick.
    The issue is also one of how can you alert people without 
panicking them, without every stomach ache turning into E. coli 
0157H7 or something like that? And I think that one needs to 
teach people how to distinguish between a real foodborne 
illness or something that could be serious.
    FDA has now promulgated rules about unpasteurized juices 
with warning signs up. I think that is very important and I 
think that I would like to see some realistic information get 
out there about the relative risks of things like organic foods 
which are often fertilized with manure, which is a great 
carrier for all sorts of bacteria and the necessity for people 
to be very careful about washing organic foods.
    I mean I know people who--and this is an anecdote--who say, 
well, I don't have to peel my carrots, they are organic. And 
this is someone who is very concerned about getting organic 
produce because she does not want to eat pesticides.
    So, I think that some of these relative risks need to be 
put out there so that consumers can really see what is going 
on. Because I think that we are having sort of an anti-science 
movement in this country now and that people think that organic 
is natural, organic is safer, and that they do not have to take 
precautions.
    Senator Collins. I think you have raised an excellent 
point. Just recently the daughter of a friend of mine in Maine 
got very ill because of E. coli as a result of drinking 
unpasteurized milk. And I am stunned that she would let her 
daughter drink unpasteurized milk but she thought by going to 
this local farm she was getting the freshest, best possible 
milk for her daughter. And her daughter fortunately is all 
right but was hospitalized for a number of days and it was a 
serious incident of foodborne illness.
    But I, perhaps also as we teach people to eat more fruit 
and vegetables, we need to teach them to wash the fruit and 
vegetables before they eat it.
    Ms. Kava. Yes.
    Senator Collins. But, Dr. Levinson, do you have any comment 
on the need for more consumer and professional education in 
this area?
    Dr. Levinson. Yes. Indeed, I certainly agree that more 
consumer education is important. First of all, although we do 
eat out more, people still handle a great deal of raw food in 
their home and they do misuse that food in terms of food safety 
because they do not know the rules or they ignore them.
    I am very impressed that a lot of packaging of turkeys and 
other products now show you or remind you what you should do 
but I think many people ignore that, those admonitions.
    But over and above all of that, over and above personal 
safety and safety of the family, I think that it is important 
to educate people about food safety so that as consumers and as 
citizens they can make intelligent decisions about issues such 
as what we have discussed today.
    Unless the public understands the implications of and the 
requirements of preserving the safety of the food supply, they 
will not be able to assist their legislators and others in 
dealing with issues like how do you handle the international 
food situation, what do you do about inspection of processing 
plants and so on?
    When something dramatic happens, like the E. coli outbreaks 
where people die, then the publications, the newspapers are 
filled with information and people become very agitated and 
activated and then a few weeks later they forget about it. I 
think this is an ongoing issue. We are literally what we eat. 
And we do need an informed public to lead us all to a higher 
plateau of understanding and activity.
    As far as the medical profession, there is no question that 
they need further information about this and many other topics. 
What they will do with this information will vary. Hopefully 
they will report significant cases of foodborne illness because 
for those cases there is a necessity to trace the source of the 
contamination of the food and unless they report meticulously 
about these cases, this tracing will never occur and we will 
continue to live with estimates of 3 to 81 million cases of 
foodborne illness a year. We will never be able to close the 
difference and those statistics are not meaningful.
    But also they need to be aware that many increasingly 
foodborne illnesses are due to emerging infections and the 
first evidence we have of the emergence of these infections 
may, indeed, be foodborne illnesses. And the infections, 
themselves, as with Cyclospora, may not involve a lot of 
people, but they raise a number of troubling issues about how 
well we are monitoring the food supply and how difficult it is 
to detect something like Cyclospora in incoming food.
    They also raise issues about strawberries versus 
raspberries. You do not wash raspberries because they fall 
apart. So, a restaurateur would use them, fresh from the box 
without worrying about their sanitary condition.
    So, I think that education of everybody is very essential 
and has to be targeted, it has to be persistent and it has to 
be very effectively presented.
    Senator Collins. Ms. Foreman, in responding to this 
question, could you also comment on what you see as the 
government's role in encouraging more education in this area?
    Ms. Foreman. Yes. Thank you.
    I want to subscribe to what Dr. Levinson said about this 
also being a process of educating the public about how public 
policy affects their health. I believe everybody has to 
practice self defense. In the end, we defend ourselves.
    I am really very pleased that Public Voice for Food and 
Health Policy and I are both involved with the Partnership for 
Food Safety Education that is a combination of industry, 
consumers and government. It put out the Fight BAC materials 
and is working hard to get those distributed as widely as 
possible.
    We need education but we also have to have education that 
competes in a market place of very slick messages. Food safety 
messages have to compete with the swoosh and that is hard. It 
is not the sort of thing that government educators or even 
public health educators are used to doing.
    We need messages that compete. The Fight BAC logo and the 
icons around it provide a fast, quick indication of what you 
need to do. It should refresh information that you have gotten 
elsewhere.
    I would like to see those messages to wash your hands, keep 
your food separate, do not cross contaminate, keep food cold, 
cook food well, become ubiquitous. I would like to see them 
printed on every grocery bag that leaves a supermarket and on 
carry-out food from all the chain restaurants.
    We are just beginning to scratch the surface of what can be 
done with this. There is agreement on those four messages. The 
more people who come in with that message in slightly varied 
form the better off it is for all of us.
    Government has an important role to play in advancing that 
information. And government has been working very hard at it. I 
have not thought about what government might do beyond that. 
There have been suggestions that the government urge people to 
accept irradiation of food and to educate the population as the 
government educated us at one time about the importance of 
pasteurization.
    I have some reservations about government promoting a 
particular process. But I do think that we need government to 
play a role where there is clearly no disagreement about what 
needs to be said.
    Senator Collins. Thank you.
    Mr. Hahn.
    Mr. Hahn. I agree that we need to educate medical 
professionals, retail food service and also consumers. I think 
that the schools are a good place to educate consumers if they 
are willing to take on that task and have the kids teach their 
parents. Another suggestion that has been made is to have the 
Federal Government issue food safety guidelines like the 
Dietary Guidelines for Nutrition, and I think that would be a 
good idea to have a single source of food safety information 
rather than getting the information out in dribs and drabs.
    Senator Collins. Thank you.
    I want to thank all of the panel for your testimony today. 
We do look forward to continuing to work with you. I rather 
like Ms. Foreman's idea of bringing all the interested parties 
together and locking them into what would have to be a very 
large room, I believe, perhaps denying them water and food 
until an agreement is reached.
    But in all seriousness, our intention is to work with 
everyone who is interested on this issue to try to come up with 
legislation that would really make a difference in the safety 
of the food we eat with particular emphasis on food imported 
from other nations because that has been the primary focus of 
our investigation.
    Again, I thank you very much for your contributions today 
and the contributions of the previous panel as well. The 
hearing record will remain open for 10 additional days.
    I want to take this opportunity to thank my staff which has 
worked extremely hard on this investigation. In particular, we 
have benefitted from the expertise of a food scientist, 
Stephanie Smith, who has been working with us during the past 
year. She has been invaluable in bringing to us an 
understanding of what risk-based analysis means and bringing us 
some scientific expertise to this investigation.
    So, I am grateful for the help of Stephanie and, indeed, of 
all my staff in this area.
    Thank you very much and this hearing is adjourned.
    [Whereupon, at 11:53 a.m., the Subcommittee adjourned.]



                            A P P E N D I X

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