[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
DRUGS IN THE MAIL: HOW CAN IT BE STOPPED?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CRIMINAL JUSTICE,
DRUG POLICY, AND HUMAN RESOURCES
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
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
71-623 DTP WASHINGTON : 2001
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
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Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON GOVERNMENT REFORM
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
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
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
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
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)
DAVID VITTER, Louisiana
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
BENJAMIN A. GILMAN, New York EDOLPHUS TOWNS, New York
CHRISTOPHER SHAYS, Connecticut ELIJAH E. CUMMINGS, Maryland
ILEANA ROS-LEHTINEN, Florida DENNIS J. KUCINICH, Ohio
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
DAVID VITTER, Louisiana
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
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Page
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
DRUGS IN THE MAIL: HOW CAN IT BE STOPPED?
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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
narcotics.
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
dealers.
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
future.
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
services.
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
control.
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
sworn.
[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.
STATEMENTS OF JOSEPH D. KEEFE, 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
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
have.
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
recognized.
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
performing.
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
recognized.
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
problem.
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
sources.
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
telephones.
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
providers.
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
interests.
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
animal.
Mr. Mica. How was that transported?
Mr. Dellicolli. I believe this came in through express mail
service.
Ms. Durant. That's correct. It was express.
Mr. Dellicolli. Excuse me, this was priority mail, U.S.
mail.
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
service.
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
else.
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
narcotics.
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
organizations.
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
Customs.
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
us.
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
laundering.
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
problem?
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
problem.
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
manifest?
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
it.
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
time.
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
something----
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
location?
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?
Anybody?
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
justice.
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
investigation.
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
world.
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
correct?
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
examination?
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
appropriations.
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
representatives.
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.
Cummings.
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
cooperation.
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
himself?
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
hands.
[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.
STATEMENTS OF KENNETH NEWMAN, 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
Mr. Newman. Good morning, Chairman Mica and members of the
subcommittee.
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.
mail.
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
nationwide.
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
done.
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
precisely.
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
years.
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
that?
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
procedures.
Mr. Mica. You don't have a specific legislative
recommendation for us today or that you could present to the
subcommittee?
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
successful.
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
ACE.
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
committee.
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
you.
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
direction.
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
area.
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
further?
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.
O'Tormey.
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.]
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