[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]




                               before the


                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION


                              MAY 26, 2000


                           Serial No. 106-210


       Printed for the use of the Committee on Government Reform

  Available via the World Wide Web: http://www.gpo.gov/congress/house


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                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)

                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                    Lisa Smith Arafune, Chief Clerk
                 Phil Schiliro, Minority Staff Director

   Subcommittee on Criminal Justice, Drug Policy, and Human Resources

                    JOHN L. MICA, Florida, Chairman
BOB BARR, Georgia                    PATSY T. MINK, Hawaii
MARK E. SOUDER, Indiana              ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio           JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
DOUG OSE, California                 JANICE D. SCHAKOWSKY, Illinois

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
           Sharon Pinkerton, Staff Director and Chief Counsel
              Carson Nightwine, Professional Staff Member
                           Ryan McKee, Clerk
                    Cherri Branson, Minority Counsel

                            C O N T E N T S

Hearing held on May 26, 2000.....................................     1
Statement of:
    Keefe, Joseph D., Special Agent in Charge, Special Operations 
      Division, Drug Enforcement Administration; Kevin 
      Dellicolli, Director, Cyber Smuggling, Office of 
      Investigations, U.S. Customs Service; Betsey Durant, 
      Director, Office of Trade Programs, Office of Field 
      Operations, U.S. Customs Service; and W.K. Williams, 
      Assistant Section Chief, Drug Section, Criminal 
      Investigative Division, Federal Bureau of Investigation....    10
    Newman, Kenneth, Deputy Chief Postal Inspector for Criminal 
      Investigations, U.S. Postal Service; Norman T. Schenk, 
      Customs and brokerage manager, United Parcel Service; 
      Robert A. Bryden, vice president, Corporate Security, FedEx 
      Corp.; James H. Francis, regional manager, security, DHL 
      Airways, Inc.; and Walter O'Tormey, manager, Processing 
      Operations, U.S. Postal Service............................    51
Letters, statements, etc., submitted for the record by:
    Bryden, Robert A., vice president, Corporate Security, FedEx 
      Corp., prepared statement of...............................    72
    Durant, Betsey, Director, Office of Trade Programs, Office of 
      Field Operations, U.S. Customs Service, prepared statement 
      of.........................................................    20
    Francis, James H., regional manager, security, DHL Airways, 
      Inc., prepared statement of................................    77
    Keefe, Joseph D., Special Agent in Charge, Special Operations 
      Division, Drug Enforcement Administration, prepared 
      statement of...............................................    13
    Mica, Hon. John L., a Representative in Congress from the 
      State of Florida, prepared statement of....................     5
    Newman, Kenneth, Deputy Chief Postal Inspector for Criminal 
      Investigations, U.S. Postal Service, prepared statement of.    55
    Schenk, Norman T., Customs and brokerage manager, United 
      Parcel Service, prepared statement of......................    64
    Williams, W.K., Assistant Section Chief, Drug Section, 
      Criminal Investigative Division, Federal Bureau of 
      Investigation, prepared statement of.......................    33



                          FRIDAY, MAY 26, 2000

                  House of Representatives,
Subcommittee on Criminal Justice, Drug Policy, and 
                                   Human Resources,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m., in 
room 2154, Rayburn House Office Building, Hon. John L. Mica 
(chairman of the subcommittee) presiding.
    Present: Representatives Mica, Cummings, and Turner.
    Staff present: Sharon Pinkerton, staff director and chief 
counsel; Charley Diaz, congressional fellow; Carson Nightwine, 
professional staff member; Ryan McKee, clerk; Jason Snyder, 
intern; Cherri Branson, minority counsel; and Jean Gosa, 
minority assistant clerk.
    Mr. Mica. Good morning. I would like to call the 
subcommittee hearing to order. This morning our subcommittee is 
going to look at the problems of drugs in the mail and through 
parcel express and ask the question of how they can be stopped. 
I'm pleased to welcome you as chairman of the Subcommittee on 
Criminal Justice, Drug Policy, and Human Resources. I think 
we'll be joined in just a few minutes by a couple of other 
Members, but we want to go ahead and proceed. We have two full 
panels today, and Members are departing for their districts for 
the Memorial Day recess. But we do have an important issue 
before the subcommittee. The order of business this morning 
will be, first, I will open with an opening statement; and as 
other Members arrive, we'll hear from them, and then we will 
turn to our two panels.
    Today, our subcommittee is conducting an oversight hearing 
on the trafficking of illegal drugs through the U.S. mail 
service and also through private commercial carriers. According 
to recent reports, drug traffickers increasingly are using the 
mail services as a means of bringing illegal narcotics into the 
United States, which is wreaking both death and destruction in 
our States and cities and communities. Some law enforcement 
officials say that the mail system has become a preferred drug 
trafficking office and that odds of success are far too high. 
Today, we will examine this growing problem. We'll review our 
efforts to combat it and consider corrective actions that may 
be needed.
    While we still do not have accurate numbers on the extent 
of this problem, authorities tell us that drug trafficking 
through the mail has dramatically increased over recent years 
and that in fact decisive action may be needed.
    Ironically, one contributing factor in drug traffickers' 
use of the mail may be our tougher law enforcement efforts that 
Congress has supported and funded in recent years. This 
demonstrates that we must always remain vigilant and 
knowledgeable of the very latest trends in drug trade. In a 
subcommittee hearing earlier this year in the district of our 
ranking member, Mrs. Patsy Mink, we learned that law 
enforcement and drug interdiction in Hawaii and from the 
officials there with that port of entry into the United States 
we found that those officials are quite aware and concerned 
regarding this growing problem. And they pointed it out in that 
hearing we conducted there.
    We heard testimony from Mr. Nat Aycox, a port director for 
the U.S. Customs Service in Hawaii, who observed--and let me 
get his quote here from his testimony--``we are seeing both 
courier services throughout the Nation and the mail conditions 
across the Nation having increased interdiction not only in the 
traditional drugs but in the new designer drugs and now in 
prescription drugs and steroids.'' That was his statement 
before our subcommittee. Reflecting this statement, recent news 
reports indicate that the U.S. postal inspectors seized 12,500 
pounds of illegal drugs in 1998. We all know that the drugs 
interdicted were only a small portion of those being trafficked 
through the mail. Just imagine how much is not being stopped.
    One drug that has seen an increase in its distribution and 
transportation through the mail is the drug commonly referred 
to as ecstasy. Large quantities of ecstasy are pouring into the 
United States from Europe. The demand for ecstasy has 
skyrocketed among U.S. teenagers, especially at all-night 
raves, a very popular type of party or club where drug use is 
common if not expected. Because ecstasy is formed into tiny 
tablets and does not require bulky packaging, several dozen 
tablets can be mailed in a standard envelope anywhere in the 
world at relatively low cost and at low risk of being 
intercepted. In fact, I brought a couple of envelopes. You can 
mail a considerable supply of drugs just in a common envelope. 
And we have other packets, this FedEx, U.S. postal express 
mail, some of these larger packages, now provide easy shipment 
for illegal narcotics and unfortunately on an increased basis.
    Because ecstasy again is formed into tiny tablets and 
doesn't require this bulky packaging, it can be transmitted and 
transported by what would normally be legal means through what 
is now illegal distribution. Distribution and trafficking of 
illegal narcotics by mail is creating an incredible challenge 
for our U.S. postal officials. According to U.S. postal service 
numbers, that agency facilitates the exchange of over 206 
billion pieces of domestic mail annually. The various U.S. 
commercial shipping carriers facilitate the exchange of more 
than 2.8 billion domestic letters, packages, and freight 
annually. The sheer volume of letter and package traffic both 
domestic and internationally offers a very attractive way for 
smugglers to attempt to transport and distribute illegal 
    Even Web sites, offering the sale of illegal drugs direct 
buyers to use the mail service and commercial shipping 
companies to transport drugs. I've got one Web site that we 
pulled up a statement from, and this Web site advises do not 
send your orders by overnight express as customs may look at 
it. Regular mail, registered if you like, that's in 
parentheses, is anonymous and safe. And I quote from that Web 
site. Drug traffickers boast that there is less chance of 
detection and arrest by using the mail and that it is in fact 
easier than recruiting and employing individuals to smuggle 
illegal narcotics across national boundaries and State lines. 
This greatly concerns me since I believe that the postal 
service and the Federal Government have an even higher 
obligation to ensure that the U.S. mail is not a tool of drug 
trafficking organizations.
    We cannot allow our Federal Government and the U.S. Postal 
Service to become the drug carriers of choice for our drug 
    These increased drug trafficking trends, in fact, impact us 
all, demanding our attention and efforts to improve 
enforcement. In 1999, the Substance Abuse and Mental Health 
Services Administration [SAMHSA], reported that 15,973 people, 
that's Americans, died as a direct result of drug-induced 
causes here in the United States. We've also heard testimony 
right in this room from our drug czar, General McCaffrey, who 
claims that illegal narcotics, when you take into consideration 
all of the deaths as a result of drug abuse and use, kill more 
than 50,000 Americans each year. Without adequate attention and 
action from law enforcement agencies and the full cooperation 
of public agencies and private companies, this trend in 
narcotics trafficking will continue to kill more people in the 
    I want to particularly applaud those in the private sector 
for their helpful actions to date, particularly in working with 
our law enforcement agencies and in conducting their own 
internal counternarcotics operations to help intercept and also 
to stem the flow of drugs through the mail and through package 
    I want to especially recognize UPS, FedEx, and DHL for 
their positive response and actions to request from our law 
enforcement agencies to help in curtailing illegal narcotics 
transport. We'll hear more details about what both the public 
and private sector is doing in that regard, what they've done 
and their plans for the future. One very successful operation 
I'd like to cite is Operation Green Air, which was conducted by 
representatives of our Drug Enforcement Administration [DEA], 
and the U.S. Customs Service working in conjunction with FedEx 
Corp. Operation Green Air was a large scale Mexican-Jamaican 
marijuana trafficking investigation that resulted in the arrest 
of 104 individuals and the seizure of 35,000 pounds of 
marijuana, $4.5 million in assets, and 18 weapons.
    The Federal Government must ensure that the U.S. Postal 
Service over which it has responsibility and oversight is 
prepared and committed to doing everything possible to work 
with our law enforcement agencies and the private sector to 
combat the flow of narcotics through the mail and through 
postal services. I look forward to hearing from our panels 
today as we explore the new and improved ways to stop the 
trafficking of illegal narcotics through the mail and package 
services. It's a responsibility that we all share and a 
commitment we must all make if we are to have any hope at all 
of ever bringing this national drug epidemic we face under 
    I want to thank each of our witnesses for being with us 
today and also sharing your knowledge and insights as to how we 
can do a better job and also make America safer from the 
terrible scourge of illegal narcotics.
    With those comments I'm pleased to yield at this time to 
the gentleman from Texas, Mr. Turner, for an opening statement.
    [The prepared statement of Hon. John L. Mica follows:]
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    Mr. Turner. Thank you, Mr. Chairman. First, I want to 
commend you for having this hearing on what is a very serious 
and very difficult problem for us all to deal with. There is, 
of course, no doubt that drug traffickers routinely use the 
mail and private shippers to facilitate transportation of 
illegal drugs, and we know it's a very serious problem. One 
example that came to my attention occurred last year in Hawaii 
where a gentleman, apparently the largest distributor of 
methamphetamine who had ever operated in Hawaii, was arrested 
by the postal inspector and ATF agents; and as a part of that 
arrest, 35 people in a drug ring were halted in their drug 
importation scheme that went on from California to Hawaii. So I 
know just from that one example that there are people out there 
engaged in illegal drug trafficking who are transporting large 
quantities of drugs across borders and within the United 
States, and frankly I'm sure we have no way of knowing whether 
or not we have caught very many of them.
    The numbers that I have show that in 1999 of the 200 
billion pieces of mail handled by the U.S. Postal Service about 
15,000 pounds of illegal drugs were seized. Postal inspectors 
arrested 1,537 people for drug trafficking through the mail and 
seized drug-related proceeds of $6.5 million, 66 vehicles, 227 
firearms, and nine residences. So clearly, we have a very 
serious problem to deal with, and I suspect we're only seeing 
the tip of the iceberg.
    Since we don't know what percentage of the total drug 
traffic may be represented by the seizures they have made, it's 
sometimes very difficult to know the appropriate amount of 
resources to commit to trying to combat this problem. That is 
one of the issues that we hope to address in this hearing 
today. I think that it's important for us all to keep in mind 
that, as we try to interdict drugs that are trafficking through 
the mail and through private carriers, we have to be sensitive 
to the fact that we must not unduly burden the free flow of 
commerce. But this is a very serious problem, one that deserves 
the attention of this committee; and I commend the chairman for 
his leadership on the issue. Thank you, Mr. Chairman.
    Mr. Mica. Thank the gentleman from Texas. Pleased now to 
recognize for an opening statement Mr. Cummings, the gentleman 
from Maryland. You're recognized, sir.
    Mr. Cummings. Thank you very much, Mr. Chairman. And I too 
want to thank you, Mr. Chairman, for holding this hearing. 
Today, we are discussing yet another crafty and deceptive 
method of disbursing drugs which is employed by narcotics 
dealers. They're using postal employees to do their dirty work. 
Drug dealers will stop at nothing to make sure that all of 
those who want drugs can get them. We must do everything we can 
to make sure that no Federal agency of the United States is 
being used by the drug lords or no private corporations either. 
We spend millions of dollars fighting the drug war on the 
streets and in our schools.
    My city of Baltimore has been plagued by heroin and crack 
cocaine problems. I requested Federal funding on behalf of 
Baltimore City for treatment programs, more policeman power, 
and advanced technology to fight this war. No one wants to even 
imagine the Government unintentionally, of course, being a part 
of the problem. As a matter of fact, we're supposed to be 
fighting the problem. And it would be sad to think that U.S. 
tax dollars are being used, supporting a postal service, but 
others using that system to distribute their illegal drugs. Our 
efforts certainly cannot be thwarted by drugs transported by 
mail. I applaud the efforts by law enforcement and others who 
have apprehended mail order dealers. But I think Mr. Turner 
said it quite clearly, we have to be very, very careful when 
addressing these kinds of issues because the public does 
expect, and rightfully so, a certain level of privacy with 
regard to shipments.
    Therefore, I look forward to hearing from our panelists to 
learn what they believe should be done to adequately combat 
this threat to our winning the war on drugs. And again, Mr. 
Chairman, I thank you; and I want to thank the panelists for 
being here on this day before the holiday weekend begins.
    Mr. Mica. Thank you, Mr. Cummings, and thank you for your 
work and dedication to this subcommittee and also the topic of 
illegal narcotics. Mr. Turner moves that the record be left 
open for a period of 3 weeks for additional statements and also 
response to questions that may be posed by the committee to 
witnesses. Without objection so ordered.
    At this time, I want to welcome our first panel. The 
Subcommittee on Criminal Justice, Drug Policy, and Human 
Resources is an investigation and oversight subcommittee of the 
Government Reform Committee. We are an investigative panel of 
Congress. Some of you may be familiar with our proceedings. In 
just a moment I'll swear you in, and we also would like you to 
try to limit your oral presentations before the subcommittee to 
approximately 5 minutes. If you have lengthy statements or 
additional information data or background you'd like to be made 
part of the record, upon request that will be also added to the 
record. So at this time, if you would please stand and be 
    [Witnesses sworn.]
    Mr. Mica. The witnesses answered in the affirmative. And in 
this panel we have three witnesses and I guess one back-up 
potential witness. First, we have Mr. Joseph D. Keefe, special 
agent in charge, Special Operations Division of the Drug 
Enforcement Administration. We have Mr. Kevin Dellicolli, and 
he is Director of cyber smuggling, Office of Investigations of 
the U.S. Customs Service and is available, I understand, for 
questions. And Ms. Betsy Durant, she is the Director of the 
Office of Trade Programs, the Office of Field Operations, U.S. 
Customs Service. And Mr. W.K. Williams, Assistant Section Chief 
of the drug section of the Criminal Investigative Division, of 
the Federal Bureau of Investigation. I would like to welcome 
all of the witnesses.
    Again, thank you for being with us. We look forward now to 
your testimony, and I'll start first by recognizing Mr. Joseph 
D. Keefe, special agent in charge of Special Operations 
Division for DEA. Welcome, sir, and you're recognized.

                        OF INVESTIGATION

    Mr. Keefe. Thank you, sir. Chairman Mica, members of the 
subcommittee, I appreciate the opportunity to appear today to 
discuss the issue of the proliferation of drug trafficking 
through the public and private mail services. I would first 
like to thank the subcommittee for its continued support of the 
Drug Enforcement Administration and overall support of drug law 
enforcement. I have also submitted a statement for the record.
    As you know, drug traffickers are continually looking for 
more creative and innovative means to circumvent and elude law 
enforcement from detecting their illicit contraband. They look 
for new and different ways to transport and distribute their 
illegal drugs. Drug trafficking organizations have learned to 
compartmentalize for security reasons. This is to ensure that 
no individual member if arrested will have knowledge of the 
entire inner workings of the organization.
    Drug traffickers recognize that the transportation of drugs 
is the weakest link in the drug chain. Typically, drugs are 
most vulnerable to detection when they are transported from one 
location to another. As a result of aggressive proactive law 
enforcement operations, these drug trafficking organizations 
have resorted to a number of methods in order to minimize their 
exposure to law enforcement. One such trend is the use of the 
private and public mail service in order to transport and 
distribute illegal drugs. While the misuse of the mail service 
is not necessarily a new trend, there has been an increase in 
the use of the mail in overnight delivery services by various 
drug trafficking groups.
    The use of private parcel conditions provide drug 
trafficking groups the ability to transport illegal drugs 
without utilizing traditional drug couriers. The absence of 
this human element often times hinders interdiction efforts 
because packages that are intercepted routinely have fictitious 
return addresses and are often mailed to post office boxes or 
private mailboxes. And a recently concluded multijurisdictional 
DEA enforcement operation impediments such as these were 
routinely encountered. In addition, computer tracking snafus 
and the use of legitimate corporate account numbers for billing 
purposes further hindered our efforts. In effect this provided 
the sender with the much needed anonymity in the event the 
package is intercepted by law enforcement. In addition, the use 
of overnight delivery services affords traffickers the ability 
to ship their illegal drugs rapidly. In the event an overnight 
delivery package is interdicted, law enforcement officers have 
little or no time to secure a search warrant for the package as 
well as initiate an operational plan to control the delivery of 
the suspected drug package. Drug traffickers grow suspicious in 
any delay in the delivery of these overnight packages and will 
refuse delivery of the parcel fearing law enforcement 
intervention. Due to these and a myriad of other factors, 
investigations of this type require exhaustive preparation and 
coordination among various law enforcement entities to include 
the U.S. Postal Service, the U.S. Customs, the FBI, and the 
various commercial delivery services.
    Historically, DEA has enjoyed an outstanding relationship 
with each of these organizations, which has resulted in 
significant enforcement operations. One such effort of the 
multiagency investigation is named Operation Green Air. On 
April 13, 2000, DEA in conjunction with U.S. Customs Internal 
Revenue Service, U.S. Attorney's Office, State and local law 
enforcement agencies and the Federal Express Corp. culminated 
this 18-month nationwide investigation.
    Operation Green Air targeted a Los Angeles-based marijuana 
trafficking organization which is estimated to have made $30 
million from illegal drug trafficking. Investigation resulted 
in the arrests of 104 individuals, the seizure of 35,000 pounds 
of marijuana, and 4.2 million in U.S. currency and assets. This 
investigation also focused on corrupt FedEx employees in Los 
Angeles; Ft. Lauderdale, FL; Atlanta, GA; New York; and New 
Jersey. Those charged include 25 employees of FedEx Corp., 
including a FedEx security official in New York City, customer 
service representatives, and drivers.
    Federal complaints and indictments charged various members 
of the organization with the importation and distribution of 
more than 100 tons of marijuana. Furthermore, several of the 
defendants were charged with using FedEx Corp. airplanes, 
trucks, and facilities across the country to ship the marijuana 
with an estimated wholesale value of $140 million.
    The head of this organization exploited FedEx Corp. by 
recruiting FedEx employees as participants in the organization. 
The employees ensured that the marijuana was placed on FedEx 
aircraft for transportation from West Coast to the East Coast, 
provided security for marijuana when the shipments were housed 
in FedEx facilities, and subsequently delivered the marijuana 
to members of the various distribution cells. Other FedEx 
employees manipulated the corporation billing and internal 
accounting procedures in order to conceal the cost and thwart 
any efforts to trace these shipments. The marijuana was always 
shipped in standard size cardboard boxes in order to fit on 
Federal Express aircraft, and the organization often placed 
laundry detergent and other products inside the boxes in an 
effort to conceal the smell of the marijuana.
    The outstanding success of Operation Green Air highlights 
the effectiveness of such cooperative drug investigations and 
serves as an example of what combined law enforcement and 
private industry can accomplish in the fight against drug 
trafficking in this Nation.
    Mr. Chairman, on behalf of the men and women of the drug 
enforcement administration, I would like to thank you for the 
opportunity to testify before this subcommittee today. Let me 
assure you that the DEA will continue to develop and implement 
innovative approaches in order to address the threat posed by 
drug traffickers. We are committed to working cooperatively 
with our law enforcement partners and with private businesses 
and organizations that are dedicated to take a stand against 
those individuals responsible for such criminal activity. At 
this time, I will be happy to entertain any questions you may 
    Mr. Mica. Thank you. We appreciate your remarks and will 
withhold questions until we've heard from all of our witnesses.
    [The prepared statement of Mr. Keefe follows:]
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    Mr. Mica. Next, I'd like to recognize Ms. Betsy Durant. 
She's Director of the Office of Trade Programs of the Office of 
Field Operations for U.S. Customs Service. Welcome and you're 
    Ms. Durant. Good morning, Mr. Chairman and members of the 
subcommittee. Thank you for the opportunity to present U.S. 
Custom's efforts to prevent the entry of illegal drugs into the 
United States via the mail. I too have a long statement for the 
record. Before I begin to explain what Customs does to combat 
the importation of illicit drugs, I believe it is important to 
relay Customs' core mission activities. The U.S. Customs 
Service is the protector of our Nation's borders. We are 
vigilant against the ever-present threats of narcotics 
smuggling, money laundering, and unwarranted threats against 
American industry.
    On a typical day, Customs officers process 1.3 million 
passengers and nearly 350,000 vehicles at ports and border 
crossings across the country. They seize nearly 4,000 pounds of 
narcotics and about $1 million in ill-gotten proceeds. Customs 
also protects domestic industries from unfair competition, 
keeps tainted and spoiled products from making their way to 
consumers, and defends intellectual property rights and deters 
the corrosive effects of economic fraud.
    Customs is facing a significant narcotics threat in the 
mail. For example, the Oakland, CA, mail facility generated 88 
seizures of opium totaling 923 pounds during the summer of 1999 
alone. Nationwide, this fiscal year to date there have been 132 
seizures of ecstasy. Customs mail facilities have realized a 
450 percent increase in pharmaceutical seizures in fiscal year 
1999, amounting to 9,725 separate seizures.
    Customs faces many significant interdiction challenges at 
the point of entry, primarily in our international mail 
facilities. The growth of these challenges is commensurate with 
the phenomenal growth of the small package delivery industry. 
Customs has found itself wrestling with the way it handles the 
processing of international mail and express consignment 
shipments so that it can provide efficient entry of legal 
shipments while maintaining a strong and effective contraband 
interdiction capability.
    The U.S. Customs Service staffs 14 international mail 
branches at various postal facilities across the United States. 
These facilities process hundreds of millions of flats and 
parcels per year. With less than 220 Customs personnel at these 
facilities, we as with all shipments must take a risk-
management approach to our day-to-day operations.
    Resources are such that we must make conscious decisions to 
look at some mail but not all mail. Most often this is done by 
choosing to inspect mail from countries that provide a higher 
threat for illegal activity. While the Postal Service is 
required to present all international mail to Customs, the 
selection or targeting process for mail is entirely manual. It 
is also worthy to discuss the issue of examination of export 
shipments of mail. Export shipments originate in the United 
States and are destined to be delivered to a foreign country. 
Customs is hampered by the lack of a clear mandate to search 
outbound mail. Recent court decisions have supported Customs 
claim of inspection of outbound mail. However, a clear 
legislative intent is necessary. We feel strongly that Customs 
and the Postal Service need to work together to fight the 
illegal shipment of contraband across our Nation's borders.
    We know this goal can be realized because we have worked 
closely with the Postal Service in the past to resolve other 
important issues. The next logical step for Customs is to 
obtain automated parcel level manifest information in advance 
of shipment arrival so that we may greatly increase our 
targeting capabilities and our ability to capitalize on 
information. The Postal Service is working to develop 
electronic message data sets that would support such a badly 
needed automated system. This would be similar to the level of 
data that express consignment operators are currently 
    In summary, Customs believes that the manual nature in 
which the mail arrives and is entered into the United States 
inhibits our ability to interdict prohibited drugs.
    Mr. Chairman, this concludes my oral statement. I will be 
happy to answer any questions that you or the other Members 
will have.
    Mr. Mica. Thank you again. We will withhold questions until 
we've heard from all of our witnesses.
    [The prepared statement of Ms. Durant follows:]
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    Mr. Mica. Our next witness is W.K. Williams. He is the 
Assistant Section Chief of the drug section of the Criminal 
Investigations Division of the FBI. Welcome, sir, and you're 
    Mr. Williams. Good morning, Mr. Chairman and members of the 
subcommittee. I am privileged to have this opportunity to 
discuss the growing use of the Internet by drug enterprises 
facilitating their illicit activities. In my testimony today, I 
would like to first give an overview of the threat we face. 
Second, I will identify several investigative initiatives we 
have undertaken to address this unlawful conduct on the 
Internet. And finally, I would like to address several 
investigative and regulatory issues we anticipate or have 
encountered as we have begun to combat this growing crime 
    I have also submitted a statement for the record.
    Criminal activities perpetrated by international drug 
cartels pose a very serious threat to our national security. 
Their conduct impacts directly on our families and communities 
threatening our very social fabric. Much of the recent growth 
in influence of these major international drug cartels is due 
to the developments in high technology and communications.
    The Internet has brought great benefits to the world, but 
it has also become a powerful medium for drug cartels who use 
technology to facilitate their operations and thwart law 
enforcement. According to a March 18, 1999, article in 
Newsweek, the new drug trafficking organizations in Colombia 
are composed largely of university-trained professionals who 
use satellite telephones and Internet connections to coordinate 
drug shipments. The Washington Post on November 15, 1999, 
described a new generation of Colombian drug traffickers, light 
years ahead of the traditional Medellin and Cali cartels of 
using the Internet and other modern technology who have access 
to highly sophisticated encryption technology, far beyond what 
law enforcement has the capacity to break quickly. These 
findings are consistent with information developed in our own 
field investigations and garnered from our intelligence 
    U.S. law enforcement and intelligence agencies have 
recently recognized a trend toward use of the Internet by major 
drug trafficking organizations to conduct criminal activities. 
Major Colombian and Mexican drug trafficking organizations rely 
on the Internet as a means of long distance communication. As 
yet there is no definitive evidence that the drug trafficking 
organizations are moving large sums of money through the 
international financial system via the Internet or are 
exploiting the Internet to bypass reporting requirements and 
spend their ill-gotten wealth via electronic commerce. However 
the drug trafficking organizations are passing money laundering 
instructions over the Internet. A survey of FBI field division 
identified over 20 investigations in which the Internet was 
used in some capacity by drug trafficking organizations. 
Similar findings have been noted by our drug enforcement 
administration colleagues.
    While there are numerous ways to communicate over the 
Internet, the most popular are electronic mail, Internet chat 
rooms, instant messaging, and Internet telephony. Each service 
provided the user with a sense of security and a feeling of 
anonymity at an almost nonexistence cost. More and more, major 
Colombian and Mexican drug trafficking organizations are 
instructing their cell members operating within the United 
States to communicate via electronic mail in lieu of 
    Internet relay chat and instant messaging allow for 
realtime communication. Computer to computer audio and video 
communications to include conferencing are also being used. 
Drug traffickers in New York, Houston, and Miami can 
communicate via video conferencing with the assurance they are 
speaking with the correct parties and for absolutely no cost 
other than the monthly fees paid to their Internet service 
    It is not uncommon for drug trafficking organizations to 
provide their cell members with laptop computers as a means of 
communication. In a recent example, a major drug trafficking 
organization supplied one of its cell members with a laptop 
computer to be used for video conferencing while traveling 
outside of the United States. Internet telephony service 
providers maintain gateways for telephone companies to allow 
computer-to-phone communications. The Internet also allows for 
interconnection with no geographical boundaries. We even have 
seen instances where Colombian go-fast boats have been able to 
meet up with their Mexican counterparts in the open ocean by 
communicating via the Internet.
    The World Wide Web, the most used and recognized service 
available on the Internet, is being used to distribute cutting 
agents, drug paraphernalia, and on occasion controlled 
substances. Often these Web sites mail the purchased products 
directly to their customers through personal and parcel 
delivery services.
    The FBI's drug section has embarked on an aggressive 
training program to assist FBI field offices in understanding 
and exploiting the Internet as it relates to drug matters. Our 
drug section is currently instructing FBI field offices about 
the Title III interception and search authorization on the 
Internet specifically as it relates to Title II of the 
Electronic Communications Privacy Act [ECPA] of 1986, stored 
wire and electronic communication and transactional records. 
The training is regionally based and provided to agents of the 
FBI, the DEA, the U.S. Customs Service, as well as to State and 
local law enforcement officers assigned to Federal drug task 
forces. During December 1999, the drug section conducted an 
Internet training seminar in Miami, FL. Additional training 
sessions are scheduled for New York, Houston, and other 
southwest border divisions, in as much as these divisions have 
ongoing drug investigations involving the Internet.
    The use of the Internet by criminals has a host of 
investigative and regulatory issues for the FBI and other 
Federal law enforcement agencies. Many of those issues arise 
from the nature of the Internet. For example, the fact that the 
Internet is worldwide creates numerous legal issues regarding 
jurisdiction. Specifically, under what circumstances could U.S. 
law enforcement conduct transborder searches and seizures for 
evidence located in other sovereigns? How do we effectively 
expedite the preservation and retention of information across 
borders that is by its very nature fleeting? How do we 
effectively investigate and prosecute criminals across borders 
where there is no consistency in legal regimes. And how to 
facilitate expeditiously obtaining and disclosing information 
across borders without negatively impacting our own national 
    In summary, the rapid growth in new technologies has 
redrawn the communications landscape. As use of the Internet 
continues to increase, so does its exploitation by drug 
trafficking organizations. We in law enforcement share your 
concerns regarding this growing threat and recognize a need to 
redouble our efforts to combat this new challenge.
    Mr. Chairman, that concludes my statement. I would be happy 
to answer any questions that you or any members of the 
subcommittee may have. Thank you.
    Mr. Mica. Thank you for your testimony.
    [The prepared statement of Mr. Williams follows:]
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    Mr. Mica. Mr. Dellicolli, you do not have an opening 
statement; that's correct?
    Mr. Dellicolli. That's correct, Mr. Chairman.
    Mr. Mica. What we'll do is start with our first round of 
questions then. I notice that one of the agencies, Customs, has 
brought some I believe it's evidence or some item that's been 
used for transport. Maybe you could provide the subcommittee 
with some description of what's taking place. Who wants to do 
that? Mr. Dellicolli or Ms. Durant.
    Mr. Dellicolli. I'll do it, Mr. Chairman.
    Mr. Mica. Could you tell us what some of this stuff is that 
you brought with you and how it relates to this topic of 
transporting illegal narcotics?
    Mr. Dellicolli. In this package here we have a stuffed 
animal that contained 10,000 ecstasy tablets that were smuggled 
from Germany. The tablets were actually stuffed inside the 
    Mr. Mica. How was that transported?
    Mr. Dellicolli. I believe this came in through express mail 
    Ms. Durant. That's correct. It was express.
    Mr. Dellicolli. Excuse me, this was priority mail, U.S. 
    Mr. Mica. Priority U.S. mail. What was the value of the 
drugs in that shipment? Do you know?
    Mr. Dellicolli. I don't know. Approximately $100,000.
    Mr. Mica. I guess there's two ways to detect this through 
technology or through information that has been passed on. 
What's our process now, technology or intelligence?
    Ms. Durant. I think it's a combination of the two. But we 
firmly believe that technology is probably our greatest initial 
screening asset. We can look with advanced technology, advanced 
manifest information. We can look for anomalies that tip us off 
to knowing what to select in the first place. For example, if 
we have unusual value-to-parcel-weight ratios, or if we have 
intelligence about an address or we've made a seizure before on 
an address, those kinds of things ahead of time can help alert 
us. And that is why we're so adamant about having this parcel 
level manifest information from the mail because we do have 
that advantage from the express consignment.
    Mr. Mica. But you don't have that from the U.S. mail 
    Ms. Durant. We do not have that. We have bag level manifest 
only, which does allow us to at least target countries.
    Mr. Mica. It gives you the country of origin but nothing 
    Ms. Durant. Nothing else, correct.
    Mr. Mica. Maybe you could describe some more of the, again, 
the means by which they've been transporting some of these 
    Mr. Dellicolli. We have several other examples of ecstasy 
tablets that were seized. This one here happens to be 10 grams 
of marijuana that was smuggled in from Mexico in an 
international mail parcel. Very small. Here's the marijuana in 
a letter class through the international mail system.
    Mr. Mica. One of the problems I guess with the designer 
drugs is it requires--well there's very little weight. Some of 
the marijuana comes in bulk, but with designer drugs I'm told 
that you can ship an incredible volume with very little weight.
    Mr. Dellicolli. That's true. And a lot of value at very 
little weight.
    Mr. Mica. Is that what you're seeing more and more of 
coming in, designer drugs through the mail service?
    Mr. Dellicolli. Most of the controlled deliveries that we 
conducted this year so far have been ecstasy, about 35 percent 
of the controlled deliveries.
    Mr. Mica. What are the prime countries of origin? Is there 
some pattern to what's going on?
    Mr. Dellicolli. I believe most of the ecstasy we're seeing 
is coming from the Netherlands, Belgium.
    Mr. Mica. And maybe you could describe a couple more of the 
items you brought with you.
    Mr. Dellicolli. Pretty much we have more of the same. We 
have a lot of ecstasy that came in. There's no packaging here 
with them to describe the means of which they entered, whether 
it was express mail or whether it was the U.S. mail but all of 
these did come in through either express mail or the U.S. mail.
    Mr. Mica. Well, if you were describing the problem, and I 
hate to pick on the U.S. Government and the U.S. mail system, 
but it sounded like most of the problem you're having seen so 
much with the private carriers but with the U.S. mail service.
    Ms. Durant. I don't want to pick on the postal service 
either, but I have to say that we believe that we have a 
problem in both arenas. We have, however tighter controls over 
the express consignment industry because we have the advance 
manifest information and because we have outbound authority in 
the express consignment industry. So we think that it is 
easier; and there's a wider loophole in the mail that we need 
to tighten up, so that we have the ability to at least level 
the playing field. Our seizures in the mail are substantially 
higher than in the express industry.
    Mr. Mica. How would you describe the cooperation of the 
postal service and then the various major private carriers?
    Ms. Durant. The cooperation with the private carriers is 
quite good. They have spent a significant amount of money on 
their own manifest systems, and we don't agree on everything. 
They do reimburse for just about all of our expenses in the 
express industry, and we have ongoing discussions about what 
they should and shouldn't pay for and that sort of thing. But 
we do have an excellent relationship with the postal service. 
They do adamantly oppose outbound search authority for us, 
outbound inspection authority and search authority, and that 
has frankly been a bone of contention between our two 
    We also are working closely with them relative to the 
manifest information, and there are some efforts ongoing in 
Europe among postal administrations to develop a manifest 
message, but we would like to accelerate those discussions to 
look for some creative ways even if we just began with express 
mail. And we have reached out to the post office to help us 
explore those opportunities.
    Mr. Mica. Finally, I heard cited by Mr. Dellicolli that the 
Netherlands was one of the major sources of some of the drugs 
coming in. What is the nature of cooperative efforts with law 
enforcement in your agencies since we're getting such a high 
volume from the Netherlands? Maybe you could provide the 
subcommittee with that background. Mr. Dellicolli.
    Mr. Dellicolli. I work in the cyber smuggling center. Most 
of our efforts involve the pharmaceuticals being imported via 
the mail system with--via--they're using the electronic 
commerce, so I'm not that familiar with our operations with 
respect to the ecstasy investigations.
    Ms. Durant. We can provide that for the record.
    Mr. Mica. What about DEA?
    Mr. Keefe. Mr. Chairman, our law enforcement officials have 
met with the Dutch law enforcement officials as well as other 
European counterparts specifically related to ecstasy. We find, 
as was mentioned, in a number of the labs producing, the 
clandestine labs, are the Netherlands, Belgium, and Germany 
where they're clandestinely producing the ecstasy. I believe 
the Dutch last year seized approximately 35 to 38 of those 
labs, usually very sophisticated labs capable of producing very 
large quantities. It's then smuggled out to various other 
countries in Europe where then I believe it is then shipped, 
transshipped to various--either body carried or through the 
mail services and whatnot into the United States.
    Mr. Mica. We met with the, I believe, the minister of 
justice from the Netherlands and some of the parliamentarians 
there trying to enact some stricter laws. I think they've been 
burnt by the liberal laws, and they know it's become the center 
for both production trafficking; and also with the lower 
penalties, it's a magnet for these folks who want to deal in 
drugs. We may solicit from you some additional information on 
what you would recommend that they need to do as far as 
cooperation, because if that's one of our major sights.
    Finally, what about Mexico? I believe in the hearing that 
raised some of these questions initially that we heard there 
was a transport of some of the designer drugs from Mexico, some 
coming into the United States. Is that the case, Ms. Durant?
    Ms. Durant. Well, the southwest border in general is a huge 
challenge for us in the drug interdiction area. Now our ecstasy 
seizures are up throughout. I do not have specific information 
about Mexico, but I could provide that for the record.
    Mr. Mica. We'd appreciate that. At this time I'd like to 
yield to Mr. Turner.
    Mr. Turner. Thank you, Mr. Chairman. Mr. Dellicolli, when 
you were showing us the stuffed animal here that had $100,000 
worth of narcotics stuffed inside of it, how was that seized? 
Was it a random check, or was it the postal service or the 
private carriers that prompted them to open that package?
    Mr. Dellicolli. It was just a manual inspection conducted 
by our mail facility inspectors.
    Mr. Turner. So this was a postal service express mail?
    Mr. Dellicolli. Yes.
    Ms. Durant. We have x-ray equipment. We do have x-ray 
equipment in our mail facilities that's pretty sophisticated. 
So we do run all the parcels through the x ray and can often 
pick it up that way.
    Mr. Turner. So was it the x ray that prompted the opening 
of that package?
    Mr. Dellicolli. It was detected with the x-ray technology.
    Mr. Turner. And the letter that was mailed from Mexico with 
the marijuana, how was that detected?
    Mr. Dellicolli. Actually from Switzerland and----
    Mr. Turner. I'm sorry.
    Mr. Dellicolli. And I have no information.
    Ms. Durant. Probably the x ray. Probably the x ray.
    Mr. Dellicolli. Maybe dog.
    Ms. Durant. Or the dogs. We have dogs in our mail 
facilities as well.
    Mr. Turner. So every package that comes through the postal 
service goes through this x ray that's coming from abroad.
    Ms. Durant. It goes through, but it goes through fairly 
quickly; and it does enable us to select from those packages, 
and our inspectors are pretty astute who work in the mail 
facilities in doing that. But we do believe having to do it on 
the spot and in that kind of manual mode severely hampers our 
ability to select as many as we probably need to inspect for 
drug smuggling.
    Mr. Turner. What could we do to improve your ability to 
inspect those packages in a time-efficient way?
    Ms. Durant. Well, we truly believe that if we had manifest 
information so that we could use our intelligence and use our 
rules so that we would select more efficiently that we could 
have a greater impact. That and outbound search authority are 
our two major concerns right now.
    Mr. Turner. So you don't run all the packages through this 
x ray; but if you had manifest information, you would be able 
to better select the ones you're going to run through.
    Ms. Durant. We run it all through, but it comes in on 
conveyor belts. So the inspectors are watching it and running 
pretty quickly. So we believe that we would continue to use the 
dogs, we would continue to use x rays as we do in our express 
industry; but we also believe that the technology that's 
available is more efficient for selection than just an 
inspector watching these packages run through the x ray.
    Mr. Turner. I know this is going to be a difficult 
question. I'd really like to have all of your opinions on it. 
But what percentage of narcotics that are flowing through the 
mail do we actually intercept, in your opinion?
    Ms. Durant. I don't believe we know. We have no idea in 
    Mr. Turner. Mr. Williams, do you have any estimate on that?
    Mr. Williams. No, sir, I do not. I know that we have had 
investigations also similar to DEA where we have obtained drugs 
transiting through the mail services, both U.S. postal and 
parcel services.
    Mr. Turner. So we don't have any idea of the volume of 
narcotics that are flowing through the mail that are uncaught?
    Mr. Williams. No, sir.
    Mr. Turner. Is there any better technology available that 
we are not applying to trying to inspect these packages than 
the x ray that you referred to?
    Ms. Durant. Well, the x rays are pretty good, and we are 
forever improving those machines. They become more and more 
precise. The drug traffickers are more and more sophisticated 
and look for ways to hide the x ray. And so we are always 
trying to improve it, improve the density levels and those 
sorts of things. But we believe that the combination of the 
nonintrusive technology, the dogs and this advanced manifest 
information, are about the most effective things available to 
    Mr. Turner. Let me ask a little bit more about this ongoing 
dispute you say Customs has with the Postal Service about 
outbound mail. What are the issues there that cause that to be 
a problem?
    Ms. Durant. The Customs Service believes that our lack of 
authority to examine outbound mail is providing an enormous 
loophole for not only drugs but the assets of drugs and money 
    We have since the early eighties, and have currently, 
legislation to expressly give us outbound authority. We believe 
that we have that authority; the Post Office does not. I have 
to say that the Post Office has a privacy concern and that has 
been their express concern over all these number of years. But 
we really believe this outbound authority is crucial. It is the 
only area where we do not have search authority is in the mail 
on outbound.
    Mr. Turner. And is the opposition expressed by the Postal 
Service solely on preserving the privacy?
    Ms. Durant. They have expressed that concern. They have 
expressed a concern about the operational impact of outbound 
authority, which is a genuine concern, and we would certainly 
work with them in establishing an MOU, where the outbound mail 
would be delivered, how many resources we would be devoting to 
it, and that sort of thing. But their main express concern is 
that it violates the fourth amendment.
    Mr. Turner. Has there ever been any legislation to try to 
give you that authority?
    Ms. Durant. We have had legislation since the early 
eighties that has not been successful. We do currently have 
legislation pending again in the latest crime bill for outbound 
authority. Yes.
    Mr. Turner. Mr. Williams, what kind of additional resources 
do you need to combat what you described as the growing use of 
the Internet by drug traffickers?
    Mr. Williams. Well, sir, we need not only personnel 
resources, additional personnel resources, we also need 
significant amounts of funding to be able to put into place 
infrastructures that will allow us not only to train our agents 
and other agents in other law enforcement, both Federal and 
State, but then have the ability to create a process where we 
will be able to engage the traffickers who are using the 
Internet through various course-authorized Title 3 
investigations. So it is a resource problem that we will be 
faced with. And I think the other agencies will be likewise.
    Mr. Turner. Would any of the other witnesses like to 
comment on their needs for additional resources to combat this 
    Mr. Keefe. From DEA's perspective, sir, I would echo Mr. 
Williams' comments as far as our need to attack new technology, 
changing constantly. We used to see people just use hard-line 
telephones. Now we have seen cell phones and sometimes we never 
even know who the people are that are using the phones. We have 
worked numerous investigations, I'm sure everybody here could 
tell you many cases, and now we're going against them also 
using the Internet.
    This technology changes monthly and so it is an issue for 
us in law enforcement both in training, equipment, and in 
authorization to intercept them, sir.
    Mr. Turner. Mr. Dellicolli, did the discovery of the 
$100,000 worth of narcotics in the stuffed animal result in the 
arrest of anyone?
    Mr. Dellicolli. No, no, sir. No, it did not result in an 
arrest. Someone was questioned regarding it, but there was not 
enough probable cause to effect the arrest.
    Mr. Turner. I get the feeling, with none of you being able 
to express an opinion regarding the volume of undetected 
narcotics that travel through the mail, that we may be in a 
position where drug traffickers understand that their use of 
the mail and the fact that a certain percentage is going to be 
detected is just a cost of doing business. And if we are at 
that point, it seems very obvious to me that we need to 
redouble our efforts in order to combat this very, very serious 
    It seems to me that we better start trying to keep up with 
the drug traffickers and their use of technology. The example 
you cited, Mr. Williams, of the Colombian ring that uses 
university professors and other highly trained individuals 
seems like they have got the edge on us right now. So I 
certainly can appreciate the difficulty of the task each of you 
faces every day, and I would be remiss if I did not commend 
each of you who serve in the positions of responsibility for 
dealing with this problem for the good work and the hard work 
and dedication that you have exhibited.
    And I also want to commend the private carriers for their 
willingness to cooperate. Good corporate citizenship by those 
who are in this industry, I think, is critical in trying to 
combat this problem. And I thank those of you here with the 
private sector for the efforts that you are making. Thank you, 
Mr. Chairman.
    Mr. Mica. I thank the gentleman. I now recognize the 
gentleman from Maryland, Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman. I guess 
what I'm trying to figure out is--and just following up on some 
of Mr. Turner's questions, is how we can, as the Congress, help 
you help this country. And Ms. Durant, I want to ask you about 
this manifest.
    Tell us exactly what information would be on the ideal 
    Ms. Durant. We would like to have--it's really not a 
tremendous amount of information, but we would need the sender, 
the recipient, and a description of the goods and probably an 
estimate of the value. If we had those basic information, 
particularly a goods description, country of origin, those 
kinds of things, we could use that information to better 
target. We are very heavily automated in Customs and use 
manifest information in all of our targeting efforts and we can 
build rules then to detect anomalies that will then let us know 
in advance. We can do research and analysis so that we can try 
to get ahead of shifts in operations in smuggling. It's just 
provided us with a vast tool, a really, really effective tool 
to become--to increase our efficiency and our effectiveness, 
without disrupting the flow of goods across the borders to the 
legitimate traffickers. It just helps us so much in our 
analysis and selection.
    Mr. Cummings. And you said that the U.S. Postal Service is 
opposed to that?
    Ms. Durant. They are not opposed to it, certainly, but they 
do not agree that we need it--they are working on this message, 
as are we, as technical advisors to this group in Europe 
developing this manifest message. I do believe they have a bit 
of a challenge because other postal administrations would have 
to participate or we would have to come up with some way of 
capturing that information, which we certainly want to explore 
with them and not try to tackle everything at once.
    But we do believe, for example, that in the Express Mail 
environment that information could be available. We could use 
    Mr. Cummings. Now, I can imagine my constituents back in 
Baltimore listening to all of this, and I would bet any amount 
of money when I get back home somebody is going to ask this 
question, so I better ask it myself: Do you all talk? In other 
words, does the Postal Service talk with Customs? And how do 
you come to the conclusions that you just came to?
    Ms. Durant. We do talk. How I know how they feel about it 
is from these talks. I meet with them about----
    Mr. Cummings. I mean other than a hearing like this.
    Ms. Durant. No, we talk informally. We have to talk because 
we have to work together. They have to deliver the mail; we 
have to look at it. We have a shared interest in making sure 
that legitimate trade flows. So we do indeed talk.
    I have a permanent liaison to the Postal Service on my 
staff. He does mail full time. I meet with them about every 3 
months. I have another regular meeting scheduled with them. Our 
agents in the Office of Investigation meet with their 
counterparts in the Postal Service. So we do have a common 
concern about this. I don't want to give the impression that 
they are cavalier in any way about this problem.
    I think we do differ on the approach, and we need to 
continue to talk and work together on that. But we believe that 
we have a different interpretation of our authorities and that 
we do need some clarification from the Congress on what those 
authorities might be.
    Mr. Dellicolli. May I followup?
    Mr. Cummings. Of course.
    Mr. Dellicolli. On the automation side of the question, to 
why automation is important, a significant number of Customs 
seizures are now based on prior information from the Office of 
Investigations, from DEA and the law enforcement people, and to 
be able to apply that prior information we have to have 
automated systems so that we can actually find the information, 
the piece, the package, the parcel that we are looking for.
    We use it a lot with passengers coming into the United 
States. We have information. We have ways of identifying which 
plane a person is going to be on and who that person is when 
they arrive into the arrival area, and we need the same sort of 
ability to be able to find the suspect panel. If we have 
information, now, that the mail is being used for an inbound 
shipment of drugs, pretty much we still have to rely on a lot 
of luck at the mail branches with manual lookouts, and we have 
no way of segregating and focusing on that piece of mail.
    With respect to postal, I would like to say that we do, 
however, even though we have these issues with respect to the 
outbound mail authority, we do work with them on a daily basis. 
I'm the director of the Cyber Smuggling Center. We do a lot of 
investigation of on-line child pornography. We do work hand in 
hand with the Postal Service conducting these investigations. 
We also work very well with respect to controlled deliveries of 
drugs that we do seize inbound with the mail.
    So we do work together. We've just agreed to disagree on 
this point.
    Mr. Cummings. I want to just go back for a moment to the 
stuffed animal. What amount of drugs was in there?
    Mr. Dellicolli. Ten--I have to have it back again. 10,000 
individual dosage units, individual pills, and it has a street 
value of approximately $100,000, I believe.
    Mr. Cummings. And would you hold the stuffed animal up so 
that the C-SPAN audience could see it?
    Mr. Dellicolli. I think this probably came in around Easter 
    Mr. Cummings. And the reason why I wanted to ask about 
this, I'm just curious about this. I think the thing that would 
kind of upset people is when they hear that no one was 
arrested. Not even arrested; is that right?
    Mr. Dellicolli. Well, oftentimes what happens if we see 
    Mr. Cummings. You can put him back in the box.
    Mr. Dellicolli. He makes a better witness. But oftentimes, 
just because someone ships something to the United States that 
is addressed to an individual, that is not probable cause for 
an arrest. Somebody actually has to, you know, accept delivery 
of the parcel, and hopefully then we are actually able to prove 
that they were indeed, the intended recipient of that parcel.
    Oftentimes people refuse to accept delivery of a parcel. It 
is especially critical that if we make a seizure, that we are 
actually able to effect a controlled delivery very quickly. 
Because oftentimes, especially with Express Mail deliveries, 
any delay in them getting their drugs in what they usually feel 
is the appropriate allotted time usually results in them 
refusing to accept the parcel.
    So for instance, if this parcel came in, they knew this 
parcel was shipped and they were expecting delivery on Tuesday. 
And if it was discovered on Tuesday and it took law enforcement 
officials to Friday to obtain a search warrant and conduct the 
controlled delivery, there is a very good chance that the 
parcel wouldn't be accepted. I'm not familiar with the exact 
details of this case, but this is typically what happens.
    Mr. Cummings. So that parcel--and I understand what you 
just said, that you are not familiar with this case, but if 
that parcel was, say, delayed--let's say you picked it up in 
the regular course of things and discovered that there was a 
sizable amount of drugs there, what would you do then? 
Repackage it? Your normal course would be to repackage it and 
then let it go on as fast as you could? Is that it?
    Mr. Dellicolli. That's correct.
    Mr. Cummings. And then you would actually follow it to the 
    Mr. Dellicolli. That's correct. And if it came in with the 
U.S. mails, we would do that in conjunction with the U.S. 
Postal Service, and an actual postal inspector dressed as a 
mail carrier would actually make the delivery of the mail.
    Mr. Cummings. Now the moment that person signed for it and 
said OK, took the package in, that takes you to another level 
as far as your investigation is concerned; is that right?
    Mr. Dellicolli. Yes, I prefer to not get into the 
specifics--but, yes, that's correct.
    Mr. Cummings. I understand. Let me ask you this, going back 
to the U.S. mail. Is it safe to say that they handle about 200 
million pieces of mail a year? The U.S. Postal Service? Anybody 
know that?
    Ms. Durant. I don't. No.
    Mr. Cummings. In other words, they handle a lot more pieces 
of mail than private shippers. Is that a safe statement? 
    Mr. Williams. I do not know.
    Ms. Durant. I don't know.
    Mr. Cummings. Nobody knows? OK. Going to Mr. Keefe, you 
talked about--you mentioned an investigation where there were 
quite a few people arrested. What was the name of that?
    Mr. Keefe. Operation Green Air.
    Mr. Cummings. And from your description of it, it sounded 
like you all had some pretty good intelligence.
    Mr. Keefe. We developed that intelligence as it went on. As 
I said, it was an 18-month investigation. And we worked the 
intelligence through and worked very closely with the FedEx 
Corp. security people through that time so that we could 
successfully conclude that investigation, sir.
    Mr. Cummings. Do you all spend a lot of your effort, time, 
and money with regard to intelligence operations? I mean, we 
are hearing about the dogs, we are hearing about the detection 
devices. And certainly intelligence. And I'm just wondering, 
when you look at your successful efforts with regard to these 
kinds of crimes, do you find that--I mean, I'm sure 
intelligence is quite expensive and I'm just wondering how much 
of a role it plays in successfully bringing these folks to 
    Mr. Keefe. I think intelligence--maybe I should try and 
understand exactly what we mean by intelligence, whether it is 
human intelligence, intelligence----
    Mr. Cummings. I'm dealing with human intelligence. I'm just 
saying getting information that something is about to happen, 
and getting information and hearing about it, because the 
operation that you described was very interesting because it 
sounded like a lot of people were involved. When you say you 
got 25 people that were FedEx employees and they were hiding 
all kinds of information, that sounds very intricate and it 
sounded as if somebody had to have some pretty good information 
to get to where you got to.
    Mr. Keefe. It started originally in an investigation in 
Boston, MA where they first ran into Jamaican traffickers who 
were traffickers in marijuana. Through the Boston office 
sharing their information, the investigation extended to New 
York. Ultimately, to Los Angeles. In Los Angeles, we started 
working very closely with the FedEx representatives there. 
Then, from the Los Angeles investigation, we branched out to 
Atlanta, GA; Fort Lauderdale, FL; Newark; and back to New York 
City again.
    And that's what I mean by the intelligence and the flowing 
and the sharing of that information with Customs was involved 
with that also and the Internal Revenue Service and many State 
and local officers. So it was like you mentioned, sir, bringing 
that intelligence together, sharing it, working together and 
taking the best efforts we can to culminate successfully the 
    Mr. Cummings. You may have mentioned this, but how many 
convictions did you get out of that operation?
    Mr. Keefe. These people were just arrested in April, sir. 
So I'm not quite sure who--I know some have pled, but I 
couldn't tell you exactly.
    Mr. Cummings. OK. One other thing that I was just curious 
about, you know. I take it that the U.S. Postal Service 
believes that these manifests going back to you, Ms. Durant, 
would violate the fourth amendment privacy search and seizure 
guidelines. What are your attorneys telling you about that? I'm 
sure you all have attorneys that advise you; is that right?
    Ms. Durant. We do, indeed. We believe that our search 
authority gives us outbound authority. The manifest information 
is on inbound, which is where we would begin, is authorized 
legally, and the Postal Service does not dispute that. I think 
it's more of a matter of how we would do it and at what cost 
and the issue with the other postal administrations around the 
    I don't think we have a legal issue with the manifest 
information or even so much a privacy issue. It's more of a 
logistics, cost, how we do it kind of issue.
    On the outbound authority, they have a serious legal 
concern. We believe that 31 USC 5317 provides Customs with 
warrantless border search authority in and out. The Post Office 
believes that the privacy concerns overtake that, the fourth 
amendment concerns that they have on outbound. They do not 
dispute search authority inbound. So what we believe is 
necessary is express authority from the Congress for outbound 
search authority.
    Mr. Cummings. I take it, you know, one of the things that 
we talk about up here on this side of the--up here quite a bit 
is that we don't--we try to project into the future and ask 
ourselves where will we be 5 years from now? Will we be having 
the same conversations? Will we be addressing problems that 
have gotten worse?
    And you know, I'd just ask you all, Ms. Durant, without 
that clarification that you just talked about, I take it that 
if you were to project 5 to 10 years in the future, let's say 
10 years in the future, our problem would be far worse; is that 
    Ms. Durant. We believe to be true, sir, yes.
    Mr. Cummings. Why do you say that?
    Ms. Durant. Well, there's just such growth in the drug 
problem. And this loophole on the outbound authority is 
providing, we believe, as one of the members mentioned, these 
drug traffickers and money launderers aren't stupid, and they 
don't think that we do not search outbound mail. And so it's 
just clear to us that it would continue to provide a very big 
loophole for them and that the use of it would increase.
    Mr. Dellicolli. May I followup on that?
    Mr. Cummings. Yes, please.
    Mr. Dellicolli. Thank you, sir. The other reason is the 
Internet. As electronic commerce becomes more and more a part 
of the fabric of doing business in the United States, it is 
also going to become, more and more, a way of introducing 
prohibited merchandise, regardless of what that is, into the 
United States? We are seeing it with on-line pharmaceuticals. 
We are seeing it with intellectual property rights. As 
electronic commerce becomes the way we do business, the Express 
Mail companies and the U.S. mail are going to become the means 
for those products to move.
    The Internet puts the source directly in touch with the 
supplier. The only piece missing now is how you get it from 
point A to point B, and we're seeing that now. The explosion in 
the pharmaceuticals is a direct result of on-line 
pharmaceutical sales. Seizures went from approximately 2,000 in 
1998 to almost 10,000 in 1999, a 450 percent increase. And we 
attribute that to on-line pharmaceuticals.
    So as more and more people learn how electronic commerce 
works and how--the drug traffickers learn how the electronic 
commerce sector works, it is going to be mixed up with 
legitimate and illegitimate business.
    Mr. Cummings. Finally, I just too want to take a moment to 
thank all of you for first of all being here, but I also want 
to thank you for what you do every day to try to make our 
country the very best that it can be.
    The chairman has heard me say it many times: In my 
neighborhood I get to see the end result of drugs and the 
effects that they can have on families and have on communities 
and children.
    And I know that you all work every day, every hour, trying 
to make a difference, and I know it's very, very difficult and 
that's why I applaud the chairman for holding this hearing 
because we do want to do everything in our power to help you do 
your jobs. And so we stand open and that's why we needed to 
hear from you today. And again I thank you.
    Mr. Mica. Thank you, Mr. Cummings. We not only have the 
problem of illegal narcotics coming in by mail and postal or 
parcel packaging, I'm told that in a single 4-pound letter 
class parcel box of this size, you can--you can put 
approximately $180,000 in hundred dollar bills. Mr. Williams 
testified about the problem of money going out. And this is 
also a very convenient method; is that correct? These are the 
figures that I've been given, Mr. Williams?
    Mr. Williams. Yes, sir, that's approximately correct in 
terms of the amount of money in large denominations that can be 
inserted into those type packages. Yes, sir.
    Mr. Mica. And is that a growing problem, Ms. Durant? I 
mean, we've been concentrating on drugs coming in but drugs 
generate an incredible amount of money, cash. Are we seeing an 
increase in cash being transported by this method?
    Mr. Dellicolli. In the past 2 years, Customs has seized--
it's in our long statement--Customs has seized $17 million from 
Express Mail in outbound operations. But because we don't have 
the authority to search outbound mail without probable cause--
    Mr. Mica. One of the things that we have done, Ms. Durant, 
working with Customs when we have been made aware of some of 
the problems in trying to detect illegal narcotics coming into 
the border, is to get additional equipment, technology, in 
place. One of the things we've done in the last year or 2 is 
encourage R&D and also some new equipment at our borders. And 
some of that is being put in place as we speak.
    Some of that's ion scanning equipment as opposed, I guess, 
to just the radar. Do you have any of that equipment in place? 
Are you utilizing ion scanning?
    Ms. Durant. We are utilizing all the equipment provided to 
us. And we do have a very big R&D unit. I would have to provide 
that for the record. I don't know.
    Mr. Mica. If you could, we'd like to know.
    You said that because of the sheer volume and increasing 
responsibilities of Customs to check both mail and also private 
parcels, that you either need more personnel or more 
technology; is that correct?
    Ms. Durant. Customs is feeling pretty overwhelmed on all 
fronts, yes, with the increase.
    Mr. Mica. Can you tell me if you have a line item request 
or a specific request, then, for additional equipment to cover 
either private parcel examination with this equipment or postal 
    Ms. Durant. I would have to check for sure. I know we have 
submitted information. I don't know how far it's gotten in our 
request. I don't know how far it's gotten.
    Mr. Mica. I'm not sure about that, but we do need to check 
with that. We need to talk to Mr. Kelly about it and see that 
we cover our bases there with this equipment and we can make 
that happen, I think.
    We've heard a great deal about conflicts between the 
agencies, and also some problems with the law. I'm wondering, I 
guess with the Internet we've heard problems about advance in 
technology and also in transport today. And we've heard about, 
again, interagency conflict. But what about the law in regard 
to keeping up with this combination of Internet and also 
trafficking using the mails, which I guess illegal use of the 
mails, we have penalties. But are the penalties and the law 
keeping up with technology? Mr. Williams?
    Mr. Williams. Sir, one of the areas that we believe that 
some congressional clarification can be provided to is the ECPA 
act, which as we know when it was originally drafted in 1986, 
related to a facility in terms of if you look at the PIN 
register trap and trace statute that's contained therein. Now, 
with the Internet, questions about whether or not that truly 
applies or how it's going to be applied is going to arise.
    Also with the Internet communications, does a local 
prosecutor, for instance, have to seek a court order in all the 
districts in which the communications have passed and are 
stored in? It's an area of uncertainty at this particular point 
in terms of how you go and obtain information timely from 
various locales where information may be stored on the Internet 
where it resides. That's an area that needs some look, if you 
would, by Congress.
    All of the major drug trafficking organizations, and we 
look at them, are businesses. They're in it, it is a business. 
They have people who are specifically responsible for 
communications and obtaining the best and the most high-tech 
communication that they can find. We have seen the evolution of 
this use from the cell phone to the pager to the satellite 
phones, encryption, and to the Internet itself now.
    So I think there has to be some look at how law enforcement 
is going to be able to respond to this ever-increasing use of 
high technology and if our laws are keeping up with the 
advances in technology. In terms of penalties, for instance, 
the selling of law enforcement badges over the Internet 
basically under the statute is a misdemeanor. And, of course, 
you are well aware it's being done, but it is still a 
misdemeanor. But look at the potential harm that this 
particular act can cause not only with security but with 
credibility of the institutions. So, yes.
    Mr. Mica. Mr. Keefe, are you seeing disparity between the 
law, technology, and problems that we have in keeping up?
    Mr. Keefe. I would agree with Mr. Williams. A lot of it, 
too, is we have to, as investigators, become educated working 
with the prosecutors so that we understand what laws there are 
available now for us to work on to attack the Internet through 
what we refer to as a Title 3 wiretap process. I think there is 
a lot of education that has to go along with that and so the 
laws need to be changed. As you know, the Title 3 Omnibus Crime 
Control Act of 1968 has only been changed once, so it has to be 
looked at to see how technology has changed and how we in law 
enforcement can work with it.
    Mr. Mica. Mr. Cummings and I always like to hold these 
hearings, but we like to see some tangible results so I'm going 
to ask the staff. I think Mr. Cummings would agree with me and 
Mrs. Mink, I would have a conversation with her, that we bring 
together these agencies informally. A little task force we'll 
put together and we'll do an assessment of how operationally we 
can do a better job, and I would like to have an assessment of 
equipment that's needed of a very short cycle here in 
    But if we're missing equipment or we need R&D for equipment 
to get on line to help solve this problem, we'll do that. So 
from an operational standpoint, we want your recommendations 
for the subcommittee. And I'll ask the staff no later than by 
the end of June to have this--have a meeting.
    And then I'd like the legal and technical people to come 
forward from DEA, from Customs, from FBI and any other agencies 
and provide us with an outline of how we can better craft the 
laws to deal with the situation we are facing. So we have 
something tangible come out of this and something that can 
hopefully make a difference. Is that agreed, Mr. Cummings?
    Mr. Cummings. Mr. Chairman, just a moment. I agree with you 
completely. We've said it often that we'll come together, and 
the question is what do we have after all the dust settles? We 
just had a session where we kind of aired some problems, but 
the question becomes what kind of results do we get?
    And I agree with you and I applaud you for that, and I'm 
hoping that--I know that we will get maximum cooperation from 
the agencies because I think every single Member of Congress 
wants to do everything that we can to make sure that we, as I 
said a little bit earlier, help you help us. And so thank you, 
Mr. Chairman. I look forward to those meetings and I look 
forward to receiving the list, the equipment that you're 
talking about also.
    Mr. Mica. Thank you. I don't have a lot of time to get into 
it now, but we also have been made aware of, as a subcommittee 
in Congress also, that we are having problems with diplomatic 
pouches, diplomatic mail from some U.S. Embassies and others. 
We had an incident where drugs were being transported and other 
contraband. We need to look at how we are approaching that both 
from our Embassies and from our military personnel and 
installations. And I would like some response back to the 
subcommittee on how we are tackling that problem.
    Once again, on behalf of the subcommittee, we do appreciate 
your efforts. We do try to assist DEA, Customs, FBI and other 
law enforcement agencies and all those involved in this tough 
effort. We applaud you, again, and look forward to your 
cooperation. Mr. Cummings.
    Mr. Cummings. Yes, Mr. Chairman, I just wanted to make 
sure, and you just talked about the things that we, the 
followup that we will be doing, but one of the issues that came 
up, and I'm just wondering whether this is covered under what 
you were saying, this whole issue of the Netherlands and 
cooperation from other countries and what we could possibly do 
in working with maybe other committees, working with the--our 
agencies. I just did not know whether those kinds of issues 
were covered under what you're talking about, or whether you 
were just sort of leaving that out?
    Mr. Mica. Well, I would like to pursue that. We have had 
meetings with the Minister of Justice. We also have coming, I 
believe within the next 2 weeks, representatives from the 
European Parliament, of which I am certain because we have had 
discussions with everyone, in particular Netherlands, because 
it had some difficulty. Actually, the new Netherlands delegates 
there are much more willing to take some steps to bring the 
situation under control. We had some problems with the previous 
    So I think at that meeting, and we can also meet with the 
Netherlands Ambassador and convey additional interest and 
concern to the Minister of Justice who was willing to cooperate 
with us. But they've got to toughen their laws and they know 
that. And they also have to close down some of these 
operations. But we will make that also an agenda item, Mr. 
    Mr. Cummings. Thank you very much Mr. Chairman.
    Mr. Mica. Thank you. Again, thank you. There being no 
further business before the subcommittee, I'll excuse these 
witnesses at this time. And again we appreciate your 
    I call the second panel this morning. The second panel this 
morning consists of Mr. Kenneth Newman who is the Deputy Chief 
Postal Inspector for Criminal Investigations with the U.S. 
Postal Service. Mr. Norman T. Schenk, and he is the Customs and 
Brokerage Manager for the United Parcel Service. Mr. Robert A. 
Bryden, and he is vice president for Corporate Security of 
FedEx Corp. And Mr. James H. Francis, and he's the regional 
manager for Security with DHL Airways, Inc. Pleased to welcome 
these four witnesses this morning.
    Again, this, is an investigations and oversight 
subcommittee of Congress. We will swear you in in just a 
second, and also if you have lengthy statements or information 
background that you'd like to have made part of the record, we 
will do so upon request. Remain standing.
    We have a fifth person. Could the fifth person identify 
    Mr. O'Tormey. Walter O'Tormey.
    Mr. Mica. And your position?
    Mr. O'Tormey. Manager of Processing Operations for the U.S. 
Postal Service.
    Mr. Mica. OK. Thank you. Would you please raise your right 
    [Witnesses sworn.]
    Mr. Mica. All of the witnesses answered in the affirmative. 
And again, sir, if you could identify yourself one more time 
for the record. I don't have you on the witness list.
    Mr. O'Tormey. Sure, Mr. Chairman. My name is Walter 
O'Tormey. Last name is spelled O- apostrophe -T-O-R-M-E-Y. My 
title is Manager of Processing Operations for the U.S. Postal 
Service. I work out of Washington, DC.
    Thank you. First witness I will recognize is Mr. Kenneth 
Newman. He's the Deputy Chief Postal Inspector for Criminal 
Investigations with the U.S. Postal Service. Welcome, sir, and 
you're recognized.


    Mr. Newman. Good morning, Chairman Mica and members of the 
    Mr. Mica. Pull that up, Mr. Newman, as close as you can. 
Thank you.
    Mr. Newman. I appreciate the opportunity to appear before 
you today to report on the efforts and accomplishments of the 
Postal Inspection Service. These relate to the identification 
of drugs transported through the U.S. mails, and our 
investigative efforts to have the drug traffickers prosecuted. 
I have previously provided a written statement for the record.
    I want to thank you, Chairman Mica, for your longstanding 
involvement in the war on drugs and for scheduling this hearing 
to address an issue of primary concern to the national law 
enforcement community.
    The U.S. Postal Inspection Service is the primary law 
enforcement arm of the U.S. Postal Service, enforcing over 200 
Federal criminal and civil statutes. We are responsible for 
protecting postal employees, the U.S. mails, postal facilities, 
and for protecting customers from being victimized by 
fraudulent schemes or other crimes involving the mail.
    We also work to rid the mail of drug trafficking, mail 
bombs, and perhaps one of the most despicable crimes, the 
sexual exploitation of children.
    For many years postal inspectors have played a key role in 
the war on drugs. The objectives of our narcotics 
investigations program are to reduce the mailing of illegal 
narcotics and dangerous drugs and their proceeds, to protect 
postal delivery employees from violence related to drug 
trafficking, to keep illegally mailed narcotics from harming 
American citizens, and to preserve the integrity of the U.S. 
    Every day, postal inspectors, in cooperation with our law 
enforcement counterparts, are conducting narcotics 
investigations. Both scheduled and unscheduled interdictions 
are conducted to identify and remove narcotics from the mails 
to develop intelligence and identify trends.
    Each year we also establish national initiatives. From 1997 
through 1999, the Inspection Service narcotics interdictions 
conducted nationwide resulted in the seizure of 8,617 packages 
containing controlled substances and over $15 million. During 
fiscal year 1999, postal inspectors arrested over 1,500 
individuals for drug trafficking via the mail.
    This year, a nationwide interdiction effort named Operation 
Spring Break was conducted at 62 locations. The operation was 
conducted in two phases and netted over 185 seized parcels, 
$428,000 in cash, over 1,900 pounds of marijuana, cocaine, and 
other controlled substances, and 50 arrests.
    The Inspection Service has a long history of working with 
Federal, State and local law enforcement agencies in combating 
the proliferation of dangerous drugs in America. Obviously, our 
focus has been on the use of the mails as a vehicle for 
trafficking drugs and drug proceeds. This focus has led to a 
joint effort with local and State law enforcement on an 
informal basis with individual cases and task force 
cooperation. Regular joint efforts have been held and conducted 
in conjunction with the U.S. Customs Service. Formalized 
jurisdiction has been established with the Drug Enforcement 
Administration in the form of a Memorandum of Understanding.
    The Inspection Service relies on the following major 
initiatives and programs to conduct investigations of the 
mailing of illegal and dangerous drugs.
    Task forces. Postal inspectors along with local, State, and 
Federal law enforcement agencies, are members of organized 
crime and drug enforcement task forces as well as other 
multiagency task forces. These also include the security 
components from private carriers.
    Working with the National Guard. Currently the Inspection 
Service has 42 National Guard personnel working in our program. 
They work in 45 locations within 15 of our 18 divisions and at 
FinCEN. We also gather local intelligence and work very closely 
with narcotics squads in metropolitan areas.
    Seizure information and controlled delivery data, both from 
the U.S. mail and private carriers, is entered into the 
national prohibited mailings--narcotics data base. A national 
postal money order data base is also utilized to analyze the 
use of postal money orders as a vehicle to launder drug 
proceeds. At FinCEN, we have two Inspection Service employees 
working at that unit.
    The Inspection Service is involved in the high-intensity 
financial crime area initiatives in New York, New Jersey, Los 
Angeles, San Juan and the southwestern United States. And 
inspectors serve and participate on suspicious activity report 
review teams to exchange intelligence with other agencies.
    The Inspection Service has continued to work with various 
law enforcement agencies in what have been identified as high-
intensity drug traffic areas.
    Our ongoing review of Express Mail labels helps to identify 
outbound parcels destined for foreign addresses that may 
contain drug money. New York inspectors have pioneered this 
technique and have provided training for postal inspectors 
    As a further enhancement of our international efforts, the 
chief postal inspector chairs the Postal Security Action Group 
of the Universal Postal Union. That is a specialized agency of 
the United Nations. This group comprises postal security 
experts from 48 member and 28 observer countries which meet 
twice a year to discuss, formulate, and implement initiatives 
to improve security and integrity of the mail. Each year PSAG 
coordinates airport security reviews at major gateway airports, 
regional training courses in security matters, to include drugs 
in the mail and money laundering, and maintains a network of 
security specialists throughout the world.
    The Postal Inspection Service will continue to provide 
investigative resources and leadership in its campaign to end 
the shipment of illegal drugs in the mail. We are committed to 
that goal. And our efforts have been fruitful. But more can be 
    In February 1998, Attorney General Janet Reno expressed an 
interest in addressing the issue of smuggling drugs through the 
mails and private carriers. Because of our experience in this 
area, the Inspection Service was asked to be part of a joint 
working group with DEA, the FBI, Customs, Federal Express, UPS, 
AirBorne, Emory, DHL and Federal and State prosecutors. In 
March 1999, the group recommended to the Attorney General that 
the Department of Justice implement a national initiative to 
pool resources, talents, and ideas to attack this problem in a 
coordinated fashion.
    The initiative was to balance the concerns of law 
enforcement while accommodating the diverse and often seemingly 
contradictory concerns of private industry. Unfortunately, that 
effort lost momentum.
    Over the past few weeks, we have approached DEA and they 
have agreed to help us restart and lead that initiative. I 
would like to invite the private carrier services here this 
morning to rejoin us as well. The Postmaster General has 
directed the Chief Postal Inspector and I to meet with the 
Commissioner of Customs to address a variety of mutual 
concerns. We met recently with Customs senior staff and look 
forward to hearing back from them regarding their participation 
in this important initiative.
    Mr. Chairman, I would like to ask for your endorsement and 
support of this effort.
    Again, I would like to extend my appreciation to the 
subcommittee and Chairman Mica for the opportunity to be here 
today, and I am available certainly to answer questions.
    Mr. Mica. Thank you, and we will defer questions until we 
have heard from all of the witnesses.
    [The prepared statement of Mr. Newman follows:]
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    Mr. Mica. Our next witness is Norman T. Schenk, and he is 
the Customs and brokerage manager for UPS. Welcome, and you're 
recognized, sir.
    Mr. Schenk. Thank you, Mr. Chairman. I appreciate the 
opportunity to appear before you today.
    I'm here to discuss how UPS works with the Customs Service 
to interdict narcotics and other illicit merchandise. Mr. 
Chairman, our efforts in this area are extensive but our 
philosophy is simple. UPS is committed to building the business 
connections of the next century, but we are committed in equal 
measure to ensuring those connections are used to deliver 
packages, not poison. When customers entrust parcels to UPS, we 
want them to be confident they will be shipped swiftly and 
delivered on time. But if drug dealers attempt to use our 
network to ship contraband, whether it be drugs or dollars, we 
want them to be certain they will be caught swiftly and they 
will do time.
    Our partnership with the Customs Service has dramatically 
curtailed the flow of contraband. Today, Mr. Chairman, we urge 
you to ensure that the Customs Service has the 21st century 
tools it needs to maintain the extraordinary growth of commerce 
in this new millennium. Last year, the United States received 
21 million commercial shipments. By 2004, that number is 
projected to climb to 50 million. Customs simply cannot inspect 
each shipment by hand.
    Mr. Chairman, full funding of the new automation system 
known as ACE, the Automated Commercial Environment, is 
essential for Customs to keep pace with the growth of commerce.
    No technology can enable the Customs Service to inspect 50 
million shipments, but ACE can help Customs leverage the power 
of information to target its inspections efficiently and 
    Our own experience at UPS shows the difference such a 
system will make. Our advanced electronic manifesting procedure 
provides Customs with extensive information from the 
destination of a parcel to a description of its contents on 
every package we transport to the United States before it 
arrives at a UPS facility.
    This information gives Customs a comprehensive electronic 
data base that enables it to spot patterns, pinpoint suspicious 
packages, and move swiftly. Full funding of ACE will give the 
Customs Service a similar tool, one becoming more essential 
with every shipment that arrives on our shores.
    In addition to our work with Customs, UPS conducts an 
aggressive and thorough drug interdiction program of our own. 
We train delivery drivers to spot packages that may contain 
illegal drugs. We screen for suspicious parcels. We routinely 
work with the other law enforcement agencies like the FBI, DEA, 
and State and local authorities, including providing them 
information about any offender we identify.
    UPS works closely with Customs officials at our major hubs 
at our own expense, as the law requires. We also work with 
Customs, especially through our tracking system, to target and 
search outbound UPS shipments. Our partnership with Customs has 
produced concrete results. During 1999, Customs' blitzes 
conducted with canine units and x-ray equipment resulted in no 
significant drug seizures at our main facility in Louisville, 
KY. Blitzes last week in Houston and last July in Ontario, CA 
also discovered no contraband. A subsequent blitz of the same 
California facility did turn up one illegal shipment, a single 
box of Cuban cigars.
    Mr. Chairman, we undertake these actions, and more, because 
it is our legal responsibility. But even more important, we do 
it because it is our moral responsibility. At UPS, our mission 
is building the business connections of the 21st century. But 
our vision is broader than parcels. It is ultimately about 
people. About people and a world drawn closer together through 
commerce and communication. Drugs have no place in that vision, 
Mr. Chairman, and no place in a single UPS vehicle or aboard a 
single UPS airplane. At UPS we like to say we run the tightest 
ship in the shipping business. We are also committed in 
partnership with the Customs Service to running a clean ship.
    I would be pleased to answer any questions and thank you 
for your time.
    Mr. Mica. Thank you. And we will get back with questions 
when we have heard from all the witnesses.
    [The prepared statement of Mr. Schenk follows:]
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    Mr. Mica. Next we will hear from Robert A. Bryden, and he 
is vice president of Corporate Security for FedEx Corp. 
Welcome, and you're recognized, sir.
    Mr. Bryden. Thank you, Mr. Chairman, distinguished members 
of the subcommittee. It is a pleasure to be here today to talk 
about this important topic. For me it is a pleasure with two 
distinct ends to it. One is it's an honor to be here 
representing the over 200,000 employees and contractors in the 
FedEx family. Second, a little over 4 years ago, I retired from 
the U.S. Department of Justice as the Chief of Operations for 
DEA. As such, I have some degree of knowledge in the topic that 
you're discussing today, and a high degree of interest in that 
as you can expect after a career that lasted a little over 23 
    I think it's an important topic and I think the airing that 
you are giving it today is an important initiative. FedEx is 
proud to be part of this.
    I also have a formal statement that I've submitted and I 
would ask that you accept that into the record.
    Mr. Mica. Without objection, it will be part of the record.
    Mr. Bryden. Thank you. I think very briefly I could 
summarize what I've heard from the law enforcement agencies 
today and what the FedEx view on this important topic is. We 
believe that, first and foremost, our first line of defense is 
a well-trained, motivated, and dedicated work force. We believe 
that we have that in FedEx and that recent experiences with DEA 
and Customs have highlighted the fact that our employees are 
well trained and able to spot suspicious packages with a high 
degree of confidence.
    You heard about Operation Green Air earlier today. And 
FedEx is proud to have been part of that and able to work 
cooperatively with law enforcement agencies, which we've done 
for many, many years.
    I think another link that's important to remember is we 
have to have that strong cooperative relationship with law 
enforcement agencies. Like all of the private companies that 
are represented here today, and others, we operate in more than 
one jurisdiction. So that strong relationship with Federal 
agencies that have the ability to prosecute cases across 
governmental lines is certainly an important one.
    Our company and others, I'm sure, have a zero tolerance for 
employees or others that would use our system to violate the 
law. Drug trafficking is a terrible plague on our society that 
has affected probably every industry that we can imagine and 
every segment of our society. Our company believes very deeply 
that we have a strong civic responsibility to work with law 
enforcement, with the Congress, and with everyone in this 
country to move forward in our efforts to limit those options 
available to drug traffickers.
    At times we put ourselves at immediate risk, as we did, 
quite candidly, to some degree in the Green Air Operation. 
Normally, when FedEx discovers illegal drug trafficking in our 
system, our normal process would be to investigate it 
internally, bring in the local law enforcement organizations 
that might have jurisdiction, then immediately at the 
conclusion of our internal investigation terminate any 
employees that were found to have been involved and to have 
violated that confidence that we place in them.
    In the instance of Green Air, we were asked by DEA and 
Customs not to take that action and to let them continue that 
investigation for a period of time so that they would be able 
to uncover the full scope of that illegal criminal 
organization. We were happy to do that, even though our normal 
preference would have been to put a stop to it immediately and 
terminate the employees found to have violated law, rules, 
regulations, and our procedures.
    I think, though, that at the end, that investigation showed 
not only that our system worked, but that we had a very close 
and fruitful working relationship with the Federal law 
enforcement agencies, and hopefully that we made a statement to 
those that would try to use our system in the future that we 
have some very good systems when working with law enforcement 
that make it very difficult for them to be successful over the 
long term.
    I think another important thing for you to look at, and you 
have heard some of that today, is the issue of intelligence 
sharing and intelligence gathering. Certainly, my career in 
Federal drug law enforcement, and now in private security, 
leads me to believe that intelligence is integral to any 
operation to penetrate illegal activities. And I think that 
private industry does have a role to play in cooperating with 
law enforcement, to help give them information that they need 
when they need it and when they request it. And at FedEx, we 
are happy to have the technology available to provide to them 
data that helps them conclude many of their investigations in a 
very positive manner.
    And I think finally, Mr. Chairman, and distinguished 
Members, the issue of technology is important for private 
companies as well as for the law enforcement agencies. You 
heard testimony earlier today from the agencies about how 
technology is leaping forward and putting a strain on law 
enforcement agencies. We in private industry and at FedEx are 
very proud of our ability to keep up with that technology and 
think that our technology is a strong leg on the stool, if you 
will, to help law enforcement do what they have to do to keep 
our country safe.
    Mr. Chairman, that concludes my informal remarks and I 
appreciate the opportunity of being with you today.
    Mr. Mica. Thank you.
    [The prepared statement of Mr. Bryden follows:]
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    Mr. Mica. And we'll hear now from James H. Francis, and he 
is the regional manager of security for DHL airways. Welcome, 
sir, and you're recognized.
    Mr. Francis. Thank you, Mr. Chairman, members of the 
subcommittee. As noted, my name is James H. Francis, and I do 
represent DHL Airways here today. I am employed with them as 
regional security manager for the Southwestern United States.
    DHL Airways is an express consignment air carrier and in 
conjunction with its sister company, DHL International, 
comprises an international shipping network known as DHL 
Worldwide Express.
    DHL Worldwide Express maintains a network of 2,341 offices 
located in 234 countries located throughout the world. DHL 
ships to approximately 635,000 destinations worldwide, and 
within the United States DHL maintains 284 offices manned by 
over 10,000 employees. Shipments enter and exit the United 
States via one of DHL's seven gateways. On average, more than 
1.2 million pounds of customer shipments move through our 
Cincinnati, OH-based central hub on a nightly basis.
    Given the complexity of the world marketplace, we are 
consistently challenged with problems associated with the 
attempted shipment of illegal drugs within the DHL network. 
DHL's first line of defense in our war against shipment of 
illegal drugs is the integrity of our employees. DHL conducts 
exhaustive background investigation of our employees that 
handle customer shipments.
    These background investigations including complete reviews 
for the employees former residences, former employments and a 
criminal conviction check, DHL meets or exceeds all of the 
background investigation requirements of the Department of 
Transportation, FAA, U.S. Postal Service, and U.S. Customs 
Service. We also utilize prehire drug screens to further assess 
a protective employee's fitness for employment.
    After hire, DHL employees are subject to random drug 
screens and annual criminal conviction record checks. Our 
attention to hiring good people with strong character is 
integral in eliminating the possibility of drug corruption 
within our workplace. DHL also maintains a comprehensive 
shipment inspection program. DHL performs thousands of shipment 
inspections on a daily basis. DHL trains its employees to 
inspect all shipments that meet a certain profile criteria for 
contraband, i.e., illegal drugs.
    Our shipment inspection program routinely leads to 
discovery of such contraband and eventual provision of 
notification and assistance to law enforcement. The DHL 
security department via its regional managers maintains 
constant liaison with local State and Federal law enforcement. 
DHL has frequently assisted the FBI, DEA, U.S. postal 
inspectors, and U.S. Customs Service with ongoing criminal 
matters where subjects of Federal investigations have utilized 
or attempted to utilize the DHL network.
    This assistance has led to numerous criminal drug 
convictions, seizures of illicit drugs, forfeitures totaling in 
the millions of dollars. In the Southwestern United States 
alone, DHL assisted law enforcement on more than 30 occasions 
in the last 12 months. This assistance has lead to dozens of 
criminal convictions and recoveries in excess of $3 million.
    DHL believes the best way to combat drugs in the mail is 
through a continued partnership with local State and Federal 
law enforcement. We specifically encourage law enforcement to 
better learn our network and the way that DHL does business. 
Through a more comprehensive understanding of the way that we 
conduct business, law enforcement can better know how DHL can 
help them solve specific drug problems. Further, DHL recommends 
that law enforcement communicate their concerns and needs more 
effectively directly with our security professionals.
    We fully understand the need to know concept of information 
dissemination. However, if we are to assist you effectively, 
there are situations where we need to have more than just a 
casual briefing. Shipping in today's world has a myriad of 
complexities, many of which can thwart an investigation. By 
knowing what your specific goals are, we can provide you in law 
enforcement with our very best effort.
    In conclusion, DHL Airways is a committed partner with the 
U.S. Government when it comes to eliminating illegal drugs from 
the mails. We expect the Government to recognize that our full 
cooperation is tempered by our concern for employees' safety, 
civil liability, and public perception issues. We stand ready 
to assist the Government in continued efforts to combat this 
menace. Thank you, Chairman Mica.
    [The prepared statement of Mr. Francis follows:]
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    Mr. Mica. Thank you. I thank each of you for your testimony 
and participation with our subcommittee today. Let me turn 
first to Mr. Newman for some questions. And Mr. Newman is with 
the Postal Service. You outlined for the subcommittee, Mr. 
Newman, I guess a task force or joint working group that was 
put together. Was that 1998?
    Mr. Newman. That is correct, Mr. Chairman. It was initiated 
in 1998. I believe their last report was in March 1999.
    Mr. Mica. But that group was put together by the Department 
of Justice or who? Did you all initiate that?
    Mr. Newman. No, it was the Department of Justice.
    Mr. Mica. And you worked for, I guess, somewhere in the 
neighborhood of a year and came up with conclusions and 
recommendations. Is that correct?
    Mr. Newman. That's correct.
    Mr. Mica. And did you testify that as of March 1999 they 
were submitted to the Attorney General, the recommendations. Is 
that also correct?
    Mr. Newman. I'm not sure whether they directly went to the 
Attorney General; but this working group did issue a position 
paper, and it was sent to the Department of Justice. They were 
leading this initiative. We were part of it. And it's been my 
opinion on it right now is that it lost momentum toward the end 
of 1999.
    Mr. Mica. So what was the tangible result?
    Mr. Newman. There was a position paper that talked about 
how this group could come together and build on local 
relationships, as some of the other witnesses have said; and I 
can tell you myself from having just returned from 10 years in 
the field, we do have a wonderful working relationships in 
local cities and environments and metropolitan areas. We have 
not seen that necessarily on a national basis. And the idea was 
to build on those local successes and see if the national 
organizations could make some recommendations and hopefully 
some positive changes.
    Mr. Mica. Could you provide this subcommittee with a copy 
of those recommendations?
    Mr. Newman. We certainly will.
    Mr. Mica. For the most part, it seems like not much was 
done after March 1999.
    Mr. Newman. Our last correspondence, I believe, was 
actually in October, expressing our concern that the momentum 
had been lost. And since I've arrived, I've tried to restart it 
and see if we can establish some further impetus and support 
for carrying this on.
    Mr. Mica. That group included, I believe, UPS, maybe FedEx 
and some of the others. Are you all aware of that group, Mr. 
Schenk or Mr. Bryden? Did you all participate or your company 
you were with participate?
    Mr. Schenk. I am not aware of that participation.
    Mr. Bryden. Mr. Chairman, I'm not aware either; but I'm 
very new to the company so it could have happened.
    Mr. Newman. My correspondence indicates that they all were, 
but some of the names and players have changed since that time.
    Mr. Mica. OK. Well, that does concern me that that has sort 
of dropped off the radar screen, given the situation we find 
ourselves in with the Internet, with more parcel service, with 
more the global economy and more package and mail transshipment 
between countries; and I think we'll have to take a very close 
look at what those recommendations were and see if we can pick 
up the ball on that.
    Raised by customs and some of the other officials, the 
question of conflict between customs and U.S. Postal Service on 
outbound mail and the inspection and regulations law related to 
outbound mail. Can you describe postal service's position on 
    Mr. Newman. Yes, sir. The postal service opposes the 
warrantless access to outbound mail because we believe there 
are alternatives. The courts that have considered this matter 
have recognized the U.S. mail as a special entity. The mail is 
different from correspondence that is carried by private 
carriers because it's carried by the Federal Government. As the 
custodian of the U.S. mail entrusted to us, we believe that 
Federal search warrants are the appropriate means for access to 
the mail.
    We are faced with the delicate balance, though, between 
defending our borders and protecting the privacy rights of our 
citizens. Whereas here, though, there appears to be a workable 
middle ground that allows access to outbound mail by Federal 
search warrant, the Postal Service believes that the Government 
should protect citizens' rights unless all alternatives prove 
entirely unworkable.
    We remain committed to working with law enforcement. As the 
track record of successful joint investigations indicates, 
there currently is a viable working alternative to random 
warrantless search of outbound mail. If in the future Congress 
determines that regulatory and legislative changes are 
necessary, we would certainly like to be part of the 
discussions and the development and implementation of new 
    Mr. Mica. You don't have a specific legislative 
recommendation for us today or that you could present to the 
    Mr. Newman. Not today, sir.
    Mr. Mica. Do you feel also that the law needs to be updated 
given, again, the new global marketplace that we find ourselves 
in with technology, with globalization? Is that the opinion of 
the U.S. Postal Service?
    Mr. Newman. I think we believe that there are other 
alternatives that need to be explored. And that's one of the 
things that we would like this national initiative to look at. 
We believe through task forces, focused interdiction programs, 
and the very effective use of intelligence, data systems and 
then obtaining Federal search warrants that we can be very 
    Mr. Mica. Are you familiar enough with the recommendations 
of the task force to know if there were any suggested changes 
in law, or is it strictly administrative and operational 
cooperative procedures that were discussed as recommendations?
    Mr. Newman. I do not have that information right now, Mr. 
Chairman. I will provide that.
    Mr. Mica. If you could. I'll turn to the private sector. 
You all are involved in a very dynamic marketplace. I've seen 
some of your operations which are incredible testament to free 
enterprise and ingenuity. I don't know if you've ever had a 
chance, Mr. Cummings; but it really is incredible, and they 
make a profit too, which is unique sometimes as opposed to 
government operations. But it sounds like you've taken some 
steps to go after problems that have been identified, 
cooperated with law enforcement agencies. I want your 
perspective on two things: Are there changes that you see that 
are necessary in law given technology, given the global 
marketplace, given the sheer volume? And the other thing is 
there's something that we're not doing to assist you that we 
could do as a Congress, maybe in the way of technology, R&D, 
some of you spoke a little bit to. Maybe we'll start with Mr. 
Shank. Two questions.
    Mr. Schenk. Mr. Chairman, first on what you could do to 
help in this particular area, as mentioned in the testimony is 
supporting the funding for ACE. I know at UPS we have invested 
millions in sophisticated computer systems to help not only in 
the handling and processing of our package but also to work 
with the Government agencies and U.S. Customs to help them with 
screening. We provide them with a lot of information. However, 
if Customs cannot move forward with their computer systems, 
it's going to be very difficult to bring that together. So we 
would encourage the committee for support for Customs for their 
    Mr. Mica. What about the law? Adequate?
    Mr. Schenk. To be honest with you, I'm not really prepared 
to answer the legal side of it.
    Mr. Mica. Maybe you could look at that and/or have your 
legal folks look at it, too.
    I heard raised by one of the witnesses, too--maybe it was 
DHL--a question of liability and problems that you all might 
have as far as taking steps to assist us but yet get yourself 
into difficulty. Mr. Francis.
    Mr. Francis. Yes, sir. At DHL we try to balance ourselves, 
if you will, between being a good citizen and a private 
corporation. Obviously, we have concerns with the public 
perception that we're becoming an agent of the U.S. Government. 
Consequently, we're a for-profit corporation with the motive of 
making money for investors, and consequently we like to stay 
focused on that. But we do embrace the concept of being a good 
citizen, especially with regard to the interdiction of drugs. 
And we do work to cooperate, do everything that we can to 
assist local, State, and Federal law enforcement to that end.
    Mr. Mica. Well, my question, though, is--and you raised 
some of that. I could pull it out of your testimony--maybe it's 
something like Good Samaritan, you know, the guy that goes 
comes along and tries to help and then finds himself involved 
in some litigation for being a Good Samaritan. Do you have 
specifics or maybe you could provide this subcommittee or your 
counsel can of how we can assist you in that area?
    Mr. Francis. I would best serve the committee by deferring 
this to our legal counsel and have him respond.
    Mr. Mica. We would appreciate that. Mr. Bryden.
    Mr. Bryden. I have two answers for you. First, being new to 
the company, I would like to have the opportunity to consult 
with others in the corporation and give you a more full 
response because seldom do we get an offer of what Congress can 
do to help private industry that's so generous. So I would like 
to take full advantage of that. I can tell you in just my short 
time with the company that I have seen what I think is 
tremendous ability to assist law enforcement and coming from a 
law enforcement background I'm impressed with that. I think the 
Green Air operation was a good example of that. And so nothing 
jumps out in my mind in terms of laws or any other techniques 
that would assist our company at this point. But I think there 
are others in the company that have worked on this issue much 
longer, and I'd like to avail their expertise on that to the 
    Mr. Mica. Thank you. And we'd appreciate, again, any 
recommendations, suggestions as far as how we can--if it isn't 
with changing the laws or regulations, if there's something 
procedurally that's being done. Let me, if I may, Mr. Cummings, 
one more question for U.S. Postal Service and then I'll defer 
to you. Have you been involved or has the Postal Service been 
involved with discussions with the Office of Drug Control 
Policy or the drug czar on any of the problems that have been 
discussed here today about shipment, about recommendations from 
the task force, about controlling money through the mails?
    Mr. Newman. Mr. Chairman, I have met with the general at a 
brief luncheon meeting, and we do need to have some further 
discussions. I arrived in Washington in January and was very 
fortunate to have an opportunity to have an early meeting with 
him, but I certainly do need to talk to him again. I have not 
shared anything from that proposed initiative with him.
    Mr. Mica. Just finally, procedurally, with U.S. Postal 
Service and U.S. Customs Service, you both are conducting drug 
investigations and investigations of illegal transport of 
illegal substances. Is that correct? Are you both conducting 
these? Is there an independent inspection by postal authorities 
and then a Customs on incoming international parcels and mail?
    Mr. Newman. No. It's done by U.S. Customs Service on 
incoming mail.
    Mr. Mica. Totally by the Customs Service?
    Mr. Newman. The actual inspection and clearing. It's 
inspected and cleared by Customs Service.
    Mr. Mica. But my point is you have a wealth of U.S. mail 
inspectors and investigators. So you're also doing some of 
this, or are you leaving all of this up to Customs?
    Mr. Newman. No. After an inspection, if in fact a 
suspicious item is detected, then the field agents, postal 
inspectors and Customs agents in the office of destination 
would then take it from there. And on a daily basis, we are 
working very closely with Customs agents on those 
investigations and the term used earlier controlled deliveries 
if those are in fact appropriate.
    Mr. Mica. Thank you. Mr. Cummings.
    Mr. Cummings. Mr. Newman, picking up where the chairman 
left off, I'm just curious--the Customs people a little bit 
earlier talked at length about the need for manifest 
information. They seemed to indicate that the postal service 
had some concerns about that. And do you?
    Mr. Newman. Sir, if I could, I've asked Mr. O'Tormey to be 
here with me today. Mail processing operations is not my area 
of expertise. If I could defer to him.
    Mr. Cummings. Be happy to.
    Mr. O'Tormey. Mr. Cummings, yes, we do. We have no control 
over it at the origin point. We are dealing with approximately 
185 countries around the world that shipped this past year 
inbound 11 million parcels to us. So we have very small amounts 
coming from various countries. We have no knowledge of the 
shippers because they originate in these countries, and some of 
those postal administrations are both private and they are the 
public. We have some difficulty with this issue. But we're 
willing to work with the Customs.
    Mr. Cummings. To what degree are you willing to work? I 
guess why I'm asking that is because, I mean, if there's 
something that we can do to make the job of detecting these 
illegal packages easier, if we can make a dent in it, it would 
be good to at least step in that direction. I was just 
wondering what are the possibilities that you see and things 
that you might be willing to do.
    Mr. O'Tormey. Mr. Cummings, I think it needs to be tied in 
some data bases and some information and some of the profiling 
that they've talked about such that we can target it and work 
with them to accomplish that. We think it can be done. But we 
need to tie that in with other sources of information, other 
profiles that we have and some data base and the computer 
systems that we have.
    Mr. Cummings. Mr. Bryden, I know you're new to the job, but 
I was just curious with regard to this Operation Green Air. I'm 
sure you've been briefed on it. But I'm wondering if that 
operation, without getting into too much detail, did FedEx 
learn some things in that operation that you could have changed 
to safeguard your system more? I mean, were you able to learn 
some things from it, or were the results of what you found out 
basically human beings taking advantage of a certain situation 
and just disobeying the law? Are you following what I'm saying?
    Mr. Bryden. Yes.
    Mr. Cummings. I guess when you have an investigation, you 
can see internal problems, things that you can do to make a 
system tighter. I was just wondering. What kind of conclusions 
did you all come to?
    Mr. Bryden. Well, I think we came to several conclusions. I 
think your question is an excellent one. First all, I think 
it's important to note that it was a FedEx employee who noticed 
a suspicious package going through our system in Los Angeles 
that first got FedEx involved in that investigation. And this 
employee through their training and previous experience on the 
job was able to spot a package without telling you exactly how, 
and to pull that package off of our system and call in one of 
our security experts to take a look at the package. That 
security officer then determined that it was probably 
contraband drugs and immediately called the drug enforcement 
administration. The DEA agents showed up and because as you 
heard earlier testimony they had seen some activity in Boston 
and I believe New York, but certainly we weren't aware of at 
that point in time. So DEA asked us not to take that normal 
action that I explained to you about doing an immediate 
investigation and terminating any employees that might have 
violated our policies. So it was at that point in July 1998 
based on one of our employees who noticed a package that got 
FedEx involved in that investigation.
    DEA certainly had information available to them that we did 
not have. All we knew is that they thought that the scope of 
that operation was such that they really wanted to let our 
system be used essentially over an 18- to 20-month period. Now 
you can imagine, Congressman, that was in some ways a difficult 
corporate decision to make because we pride ourselves on our 
employees and their motivation and the fact that they're 
trained to do nothing but take care of our customers' packages 
and handle them very quickly and efficiently.
    But because of the scope and the seriousness with which DEA 
and Customs asked us to assist them on this, we were happy to 
do it. But we did learn some things as we went through this. 
And I think also the Federal agencies learned some things. For 
instance, I mean that investigation was as large as it was 
because our systems were able to identify previous shipments 
that had been used by this drug trafficking organization based 
on our technological availability of data; that we would go 
back and research. So without that technology that we have in 
our tracking and tracing system this case would not have been 
as large as it was explained to you today because they--law 
enforcement agencies simply do not have the capability of 
looking in our system and finding out what transpired. So it 
was a great example of public-private partnership, and I think 
they learned that certainly FedEx have a great capability to 
assist them.
    What we learned is that we place a great deal of 
responsibility and confidence in our employees, and we're very 
proud of this. In this instance, unfortunately, we had some 
employees that chose to violate the law and to violate the 
confidence that we place in them to handle our customers' 
packages. I don't know of much we can do to regulate that other 
than hire good people, train them well, compensate them well, 
keep them highly motivated. With over 200,000 employees we're 
going to have some that make bad decisions. We're always 
disappointed when it's one employee, certainly in this instance 
it was more than that.
    We intend to sit down with DEA again and do an after-action 
kind of a damage assessment with them to more fully understand 
what they saw that they could share with us that would help us 
tighten our system. Clearly, we saw some things regarding 
technology and the availability of it to employees that has 
given us some ways to tighten up our internal procedures.
    Mr. Cummings. I'm sure it was a difficult decision to--
won't you talk about cooperating and letting, basically, the 
Federal Government sort of infiltrate your system. I agree with 
you that probably the benefits that came out of that for all of 
us are probably substantial. You know, I think it's good that 
you did that. And I would take it that I guess the company is 
probably a little bit better off now. I'm sure they sent a 
chilling message.
    Mr. Bryden. We certainly hope so. We agree exactly with 
you. I think our corporation did the right thing in that 
instance; and although it was a little painful to know that we 
had some employees that were involved in things they shouldn't 
have been in, getting to the bottom of it and exposing the full 
scope of the operation was important to us as good corporate 
citizens. And I hope that, as you say, it does make an 
impression on people who would use the private systems of all 
of our companies represented here today. We don't want that 
kind of contraband in our system. We work cooperatively just as 
law enforcement does with each other to also try to find ways 
to better help law enforcement stop that happening.
    Mr. Cummings. Mr. Schenk, you mentioned a little earlier 
you said that there were two or you may have mentioned three 
occasions where you went in--I forgot the words you used to 
describe it--putting the Federal folk into your facilities. 
What did you call that?
    Mr. Schenk. Blitzes.
    Mr. Cummings. Blitzes. I knew it was a football term, but I 
couldn't remember what it was. Your blitzes. They weren't able 
to find anything except a box of cigars on occasion. What do 
you attribute that to? Are you trying to say that your system 
is so good, and people know it's so good that that's why they 
weren't able to find anything?
    Mr. Schenk. Well, Mr. Cummings, I wouldn't be naive to say 
that we're perfect in terms of everything coming in. However, I 
think what it comes down to is corporate responsibility and 
leadership. Just as UPS has been out in the forefront on this 
e-commerce explosion, actually we've taken the same approach a 
while back with regards to drug interdiction. Again, it goes 
back to our systems technology that we've developed and up 
front and trying to keep these things out of our systems. Most 
of our customers are good customers, and those are the 
customers that we want. But we've invited customs and worked 
with them consistently on these blitzes to show that we're 
trying to be as compliant as possible.
    Mr. Cummings. Mr. Newman, let me just come back to you. The 
chairman asked a few questions about this commission set up by 
the Justice Department. And I think you said that there was 
some type of letter of recommendation, recommendations with 
regard to various issues. Did you serve on that committee?
    Mr. Newman. No, I did not. One of my predecessors did.
    Mr. Cummings. I see. Mr. O'Tormey, are you familiar with 
that at all?
    Mr. O'Tormey. No, I am not, Mr. Cummings.
    Mr. Cummings. I guess what I'm concerned about is I asked 
Customs a little bit earlier whether the agencies talked. I'm 
sure you may all have heard that question. I think the chairman 
was getting to this too, is where there are situations where 
the agencies can sit down and with the private sector and 
whoever else may be involved in this and come up with 
solutions, it's good. So often I think what happens is that 
Congress finds itself acting on things that maybe some of which 
could be addressed on the agency level. So it just seemed like 
it was a good idea, sounded like it was going in the right 
direction, and then for whatever reason like you said it got 
kind of thrown off course.
    Hopefully, we can, Mr. Chairman, we can look into that 
since we had apparently a mechanism that was moving forward. 
And there was a letter of recommendation, recommendations--it 
seems only logical that we might want to instead of reinventing 
the wheel maybe we might want to take a look at that and see 
how we could possibly along with doing many other things make 
sure that that vehicle is in place and moving forward.
    I think we also heard from Mr. Bryden and Mr. Schenk that 
they seem to have no problem with it. And I know that they may 
not be totally familiar; but it just seems like in listening to 
all the testimony--I don't mean to leave you out Mr. Francis--
but it seems to me that if we have, I mean, when I listen to 
the testimony of all our witnesses, they all seem to be 
concerned about getting to this problem. And if we had that 
kind of mechanism set up, then I'd really like to see what we 
could do about making sure we resurrect it in hopes that we can 
address this problem from a lot of different angles. Because it 
is multifaceted. I think that the solutions must be 
multifaceted also. With that, Mr. Chairman, I am going to thank 
    Mr. Mica. I thank the gentleman. And I'll be glad to cosign 
a letter. I think we should inquire of the Attorney General, 
the Department of Justice, the status of those recommendations 
and if those recommendations have not been implemented why not 
and how long before we get this whole process moving forward. 
And we do not want to reinvent the wheel. We just want to make 
sure that the wheel is rolling and moving in the right 
    I just have a couple of final quick questions. It's my 
understanding you have about 4,500 postal inspectors. Is there 
a specific division or number of inspectors that are dedicated 
to working on the problem of illegal narcotics?
    Mr. Newman. Mr. Chairman, we have 2,000 postal inspectors. 
We also have a uniformed force of police officers. But they are 
not necessarily involved in this. So we have 2,000 postal 
inspectors who are investigators, and of that approximately 111 
workyears are committed nationwide to our narcotics program.
    Mr. Mica. OK. Thank you. I also ended my questioning with 
one of the other panels about the problem that's recently been 
brought to our attention of shipments of illegal narcotics 
through some of the diplomatic mail or by our people posted 
overseas. Do you have specific information or could you provide 
us with what you're trying to do to bring some of this under 
control and also enforce the laws in that regard?
    Mr. Newman. Certainly. I think there was a case that was 
noted earlier, and that was a case that was worked with the 
U.S. Customs Service and the postal inspectors. It was a great 
cooperative effort. And I will need to, though, get back to you 
with specifics about what we're doing in the future in that 
    Mr. Mica. And we focused most of our attention on drugs 
coming in from other countries and money going out to drug 
dealers located abroad. But we do have the problem of domestic 
transporting and use of the mail and the Postal Service for 
transporting State to State or local on the domestic market. I 
think it would be best if you provided the subcommittee for the 
record what steps you're taking to see that we have adequate 
enforcement and in going after illegal narcotics in the 
domestic mail within the confines of privacy and other 
restraints I know you work under. Would that be possible?
    Mr. Newman. Certainly. Yes, sir.
    Mr. Mica. All right. Mr. Cummings did you have anything 
    Mr. Cummings. Just one question. Mr. Newman, when you all--
when you suspect a package has an illegal substance in it, you 
automatically go outside of the agency? Is that right, Mr. 
    Mr. Newman. That would probably be my answer. I would be 
the person to answer, excuse me. If in fact it's a domestic 
item, we would obtain a Federal search warrant and then based 
on the local agreements, the local jurisdiction, the local law 
enforcement groups that we work with, we would then initiate an 
investigation. And it may take a variety of steps, controlled 
delivery. We may do additional intelligence gathering. We may 
do a variety of things with the local narcotics resources or 
the other Federal agencies in that particular area.
    Mr. Cummings. Thank you very much. I want to thank all of 
you for what you're doing. I said that to the other panel. And 
as I said before, we've got to work together to address this 
problem. But we really do appreciate what you all are doing. 
And you know in that light I just hope that we can all have 
this maximum cooperation since we're all on the same team. 
Thank you very much. And thank you, Mr. Chairman.
    Mr. Mica. Thank you, Mr. Cummings. I do want to also 
express my gratitude to the witnesses on this panel for your 
cooperation, the private sector folks, the U.S. Postal Service 
dealing with a very difficult and challenging problem we face. 
But we appreciate your response to us and also your responding 
to some of the questions that we have asked. And also for your 
future cooperation. I think we can do a much better job with 
everyone working together.
    So we'll excuse the second panel, and that does conclude 
our business for today. I would like to announce for the 
Members and for the record that the subcommittee will continue 
its series of national field hearings and on Tuesday, May 30, 
we will be in New Orleans at the request of a member of this 
panel, Mr. Vitter. A hearing on school drug testing, I believe, 
at 10 a.m. in New Orleans. On June 1, Thursday, in Orlando, FL, 
down in my area at my request we'll be looking at the problem 
of club drugs and some of the designer drugs and get an update 
on the situation in central Florida.
    I appreciate the panel's assistance in the past in looking 
at the problem we've experienced in my own back yard in central 
Florida. And June 5, just before we return, on Monday morning 
in Dallas, TX, at the request of Congressman Sessions and the 
title of that hearing will be ``Preventing Drugs in School in 
Dallas, TX.'' Again, we'll be leaving the record open here for 
responses. Mr. Cummings.
    Mr. Cummings. I just want to take a moment, Mr. Chairman, 
to say so long to Cherri Branson on our side, who for a number 
of years has been staffing this subcommittee. I want to thank 
you for all that you have done to make our jobs easier. It is 
so often we are the ones that end up looking good, and it's 
because of the work of staff that make it all possible. So as 
you move on to higher ground making a lot more money, and 
moving forward, we just want to thank you on behalf of this 
side, and I'm sure of the entire committee.
    Mr. Mica. Well, I do also want to wish you well. We thank 
you for your bipartisan cooperation. I think we've made a 
number of significant steps forward with our subcommittee and 
only because of your hard work. So everyone from this side of 
the aisle wishes you all the best and thank you for your great 
efforts on behalf of the committee, the subcommittee, Congress 
and the American people. Good luck.
    Ms. Branson. Thank you.
    Mr. Mica. There being no further business to come before 
the subcommittee on Criminal Justice, Drug Policy, and Human 
Resources today, this hearing is adjourned.
    [Whereupon, at 12:10 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record