    [House Hearing, 107 Congress]
    [From the U.S. Government Publishing Office]

         HOMELAND SECURITY REORGANIZATION: WHAT IMPACT ON FEDERAL LAW
                       ENFORCEMENT AND DRUG INTERDICTION

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

                                    HEARING

                                   before the

                       SUBCOMMITTEE ON CRIMINAL JUSTICE,
                        DRUG POLICY AND HUMAN RESOURCES

                                     of the

                                  COMMITTEE ON
                               GOVERNMENT REFORM

                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JUNE 17, 2002

                                   __________

                               Serial No. 107-203

                                   __________

           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

                                     ______

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                                WASHINGTON : 2003
    ____________________________________________________________________________
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                         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       MAJOR R. OWENS, New York
    ILEANA ROS-LEHTINEN, Florida         EDOLPHUS TOWNS, New York
    JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
    STEPHEN HORN, California             PATSY T. MINK, Hawaii
    JOHN L. MICA, Florida                CAROLYN B. MALONEY, New York
    THOMAS M. DAVIS, Virginia            ELEANOR HOLMES NORTON, Washington,
    MARK E. SOUDER, Indiana                  DC
    STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
    BOB BARR, Georgia                    DENNIS J. KUCINICH, Ohio
    DAN MILLER, Florida                  ROD R. BLAGOJEVICH, Illinois
    DOUG OSE, California                 DANNY K. DAVIS, Illinois
    RON LEWIS, Kentucky                  JOHN F. TIERNEY, Massachusetts
    JO ANN DAVIS, Virginia               JIM TURNER, Texas
    TODD RUSSELL PLATTS, Pennsylvania    THOMAS H. ALLEN, Maine
    DAVE WELDON, Florida                 JANICE D. SCHAKOWSKY, Illinois
    CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
    ADAM H. PUTNAM, Florida              DIANE E. WATSON, California
    C.L. ``BUTCH'' OTTER, Idaho          STEPHEN F. LYNCH, Massachusetts
    EDWARD L. SCHROCK, Virginia                      ------
    JOHN J. DUNCAN, Jr., Tennessee       BERNARD SANDERS, Vermont
    JOHN SULLIVAN, Oklahoma                  (Independent)

                          Kevin Binger, Staff Director
                     Daniel R. Moll, Deputy Staff Director
                         James C. Wilson, Chief Counsel
                         Robert A. Briggs, Chief Clerk
                     Phil Schiliro, Minority Staff Director

       Subcommittee on Criminal Justice, Drug Policy and Human Resources

                       MARK E. SOUDER, Indiana, Chairman
    BENJAMIN A. GILMAN, New York         ELIJAH E. CUMMINGS, Maryland
    ILEANA ROS-LEHTINEN, Florida         ROD R. BLAGOJEVICH, Illinois
    JOHN L. MICA, Florida,               BERNARD SANDERS, Vermont
    BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
    DAN MILLER, Florida                  JIM TURNER, Texas
    DOUG OSE, California                 THOMAS H. ALLEN, Maine
    JO ANN DAVIS, Virginia               JANICE D. SCHAKOWKY, Illinois
    DAVE WELDON, Florida

                                   Ex Officio

    DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                       Christopher Donesa, Staff Director
                 Nicholas P. Coleman, Professional Staff Member
                              Conn Carroll, Clerk
                      Julian A. Haywood, Minority Counsel

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on June 17, 2002....................................     1
    Statement of:
        Kramek, Admiral Robert E., (Ret.), former Commandant, U.S.
          Coast Guard; Donnie Marshall, former Administrator, Drug
          Enforcement Administration; Peter K. Nunez, former
          Assistant Secretary for Enforcement, U.S. Department of the
          Treasury; Douglas M. Kruhm, former Assistant Commissioner
          for the U.S. Border Patrol, Immigration and Naturalization
          Service; Sam Banks, former Acting Commissioner, U.S.
          Customs Service; and Stephen E. Flynn, Jeane J. Kirkpatrick
          senior fellow for national security studies, Council on
          Foreign Relations..........................................     8
    Letters, statements, etc., submitted for the record by:
        Banks, Sam, former Acting Commissioner, U.S. Customs Service,
          prepared statement of......................................    46
        Flynn, Stephen E., Jeane J. Kirkpatrick senior fellow for
          national security studies, Council on Foreign Relations,
          prepared statement of......................................    52
        Kramek, Admiral Robert E., (Ret.), former Commandant, U.S.
          Coast Guard, prepared statement of.........................    12
        Kruhm, Douglas M., former Assistant Commissioner for the U.S.
          Border Patrol, Immigration and Naturalization Service,
          prepared statement of......................................    40
        Marshall, Donnie, former Administrator, Drug Enforcement
          Administration, prepared statement of......................    20
        Nunez, Peter K., former Assistant Secretary for Enforcement,
          U.S. Department of the Treasury, prepared statement of.....    32
        Souder, Hon. Mark E., a Representative in Congress from the
          State of Indiana, prepared statement of....................     4

         HOMELAND SECURITY REORGANIZATION: WHAT IMPACT ON FEDERAL LAW
                       ENFORCEMENT AND DRUG INTERDICTION

                                  ----------

                             MONDAY, JUNE 17, 2002

                      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 2:30 p.m., in
    room 2154, Rayburn House Office Building, Hon. Mark E. Souder
    (chairman of the subcommittee) presiding.
        Present: Representatives Souder, Miller, Cummings, and
    Schakowsky.
        Staff present: Christopher Donesa, staff director and chief
    counsel; Nicholas P. Coleman and Jim Rendon, professional staff
    members; Conn Carroll, clerk; Tony Haywood, minority counsel;
    and Earley Green, minority assistant clerk.
        Mr. Souder. The subcommittee will now come to order.
        Good afternoon. Today's hearing is the first we have held
    since President Bush announced his proposal to create a new
    cabinet Department of Homeland Security. In that respect, we
    will be breaking new ground as we begin to consider how best to
    implement such an ambitious and important reform proposal prior
    to considering it in the full Government Reform Committee in
    the coming weeks.
        This is not, however, the first time we have considered the
    important issues of Federal law enforcement organization, drug
    interdiction, border security, or their interrelationship with
    increased demand of homeland security. We have held six field
    hearings on border enforcement along the northern and southern
    borders of the United States. I have personally visited several
    other ports of entry, and we have had two Washington hearings
    on the implications of homeland security requirements on other
    Federal law enforcement activities. This is in addition to our
    ongoing oversight of America's drug interdiction efforts.
        Our work as a subcommittee has made very clear that the
    U.S. Customs Service, the Immigration and Naturalization
    Service and the U.S. Coast Guard, which are among the most
    prominent agencies in the proposed reorganization have critical
    missions unrelated to terrorism which cannot be allowed to wane
    and must be fully maintained. The House has to carefully
    consider the interrelationship of these law enforcement
    missions with the demands of homeland security.
        The administration has defined the mission of the proposed
    new department solely as one of preventing and responding to
    acts of terrorism. The concept of homeland security has to be
    defined more broadly to include the many other diverse threats
    to our Nation which are handled on a daily basis by these
    agencies as well as other law enforcement activities. It is
    clear that there is simply too much else at stake for our
    Nation to define issues solely as ones of terrorism.
        Let me illustrate my point with a brief but very clear
    example of the risks which could be posed when resources are
    allocated single-mindedly. This map illustrates the deployment
    of Coast Guard assets prior to the September 11th attacks. They
    are balanced and allocated to a number of important missions
    such as drug interdiction, illegal migrant interdiction and
    fisheries enforcement. I believe it is apparent here that a
    vigorous forward American presence had been maintained in the
    Caribbean and the Eastern Pacific for counterdrug missions and
    law enforcement.
        The second map shows how the resources were temporarily,
    and correctly I should emphasize, deployed after the attacks to
    respond to the terrorist attacks. It is evident here that the
    enhancement of immediate homeland security had to come at the
    price of customary missions of the Coast Guard. The chart also
    shows the redeployment of our assets from the front lines to a
    goal line defense centered on the East and West Coast of the
    United States itself. In the critical transit zone of the
    Eastern Pacific, for example, the deployment went from four
    cutters and two aircraft to a lone cutter.
        This is not a criticism of the tremendous response by the
    Coast Guard or, by extension, of any other agency. Most would
    agree that the approach taken was wholly appropriate over the
    short term and redeployments have then subsequently moved the
    picture much closer to an equilibrium today. However, I believe
    that these charts are a clear illustration that an intensive
    focus on homeland security cannot be maintained over the long
    run without coming at the expense of other tasks. This lesson
    is equally applicable to every other mission of every other
    agency that will potentially be affected by the reorganization
    plan.
        However this reform emerges, it is inevitable that there
    will be a profound impact on Federal law enforcement activities
    unrelated to terrorism on our Nation's drug interdiction and
    border patrol efforts and on operations at several Federal
    departments within the subcommittee's jurisdiction. Our
    challenge as we move through this process will be to determine
    how best to ensure the continuation and preservation of these
    missions within the new department. We also must optimize the
    organization of other agencies, such as the DEA, the FBI and
    law enforcement in the Treasury Department, which share tasks
    with agencies destined for the new department. And finally we
    must consider the many incidental benefits and synergies which
    will arise from the President's proposal. These include
    increased operational coordination of narcotics and migrant
    interdiction efforts among agencies that will now be united as
    well as a significantly improved focus on the links between
    drug trade and international terrorism.
        This afternoon we have an outstanding panel that will be
    able to discuss these important and complex issues with the
    benefit of great personal experience and the freedom to speak
    forthrightly as private citizens. I thank all of you for coming
    today on short notice to share your insights as we prepare to
    take up this legislation in the full committee.
        We are joined by retired Admiral Robert Kramek, former
    Commander of the Coast Guard, Commandant of the Coast Guard;
    Mr. Donnie Marshall, former Administrator of DEA; Mr. Peter
    Nunez, former Assistant Secretary of Treasury for Enforcement;
    Mr. Douglas Kruhm, the former Head of the U.S. Border Patrol;
    and Mr. Sam Banks, former Acting Commissioner of the U.S.
    Customs Service. It is also a pleasure to be joined by Mr.
    Stephen Flynn of the Council on Foreign Relations, whose
    writings have provided the subcommittee with many important
    insights on border security. We look forward to your testimony.
    We've heard much in the media over the last few days, and it
    will be interesting to get your combined perspective on how to
    consolidate some of these issues.
        Congressman Miller, do you have any opening comments you'd
    like to make?
        Mr. Miller. No.
        Mr. Souder. If not, before proceeding, and when Mr.
    Cummings arrives we'll have him give his opening statement at
    that point after the first panel if he would like. Before
    proceeding, I would like to take care of some procedural
    matters first. I ask unanimous consent that all Members have 5
    legislative days to submit written statements and questions for
    the hearing record and that any answers to written questions
    provided by the witnesses also be included in the record.
    Without objection, it's so ordered.
        Second, I ask unanimous consent that all exhibits,
    documents and other materials referred to by Members and the
    witnesses may be included in the hearing record and that all
    Members be permitted to revise and extend their remarks.
    Without objection, it is so ordered.
        [The prepared statement of Hon. Mark E. Souder follows:]

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        [GRAPHIC] [TIFF OMITTED] T6640.004

        Mr. Souder. We now move to our distinguished panel. I want
    to again thank you. You are all experienced witnesses so I know
    that it is more for the audience's benefit, but you have 5
    minutes. The full statement will be in the record. We may do a
    couple of rounds here, depending on the timing, and as you also
    each know because you have been in front of this committee,
    it's our standard practice to ask our witnesses to testify
    under oath, and if you will rise and raise your right hand I'll
    administer the oath.
        [Witnesses sworn.]
        Mr. Souder. Let the record show that the witnesses have all
    answered in the affirmative. We will now recognize each of you
    for your opening statements and, once again, in the years I've
    been in Congress I appreciate the leadership that each of you
    have given in the departments. We've worked together on lots of
    different issues and this is arguably the most challenging time
    for us in government to figure out how to continue to provide
    the service when they've added a whole new supplementary
    mission, which was a secondary mission that's now a preeminent
    mission inside homeland security and how to make sure we cover
    the other missions and get the synergy and don't accidentally
    wind up with more committee meetings and less actual efforts on
    the ground.
        With that, I'd like to yield to Admiral Robert Kramek for
    his opening statement.

         STATEMENTS OF ADMIRAL ROBERT E. KRAMEK (RET.), FORMER
         COMMANDANT, U.S. COAST GUARD; DONNIE MARSHALL, FORMER
    ADMINISTRATOR, DRUG ENFORCEMENT ADMINISTRATION; PETER K. NUNEZ,
    FORMER ASSISTANT SECRETARY FOR ENFORCEMENT, U.S. DEPARTMENT OF
     THE TREASURY; DOUGLAS M. KRUHM, FORMER ASSISTANT COMMISSIONER
      FOR THE U.S. BORDER PATROL, IMMIGRATION AND NATURALIZATION
     SERVICE; SAM BANKS, FORMER ACTING COMMISSIONER, U.S. CUSTOMS
      SERVICE; AND STEPHEN E. FLYNN, JEANE J. KIRKPATRICK SENIOR
       FELLOW FOR NATIONAL SECURITY STUDIES, COUNCIL ON FOREIGN
                               RELATIONS

        Admiral Kramek. Thank you, Mr. Chairman and members of the
    subcommittee, for the opportunity to appear before you today.
    You've specifically asked me to testify on the impact of the
    proposed agency on Federal law enforcement activities and
    narcotics interdiction. As the former Commandant of the Coast
    Guard and the U.S. interdiction coordinator for the war on
    drugs, I welcome that opportunity and am prepared to answer
    your questions, and you've already indicated that my written
    statement will be included in the record.
        Thank you.
        Often in response to significant events there's a rush to
    propose organizational and bureaucratic solutions as an
    expedient rather than implement new policy and strategy that
    counters threats to our national interests. Terrorism today is
    the most significant threat to our national interests since the
    end of the cold war. And the lessons of history have taught us
    to rationally and carefully focus our policy, strategy and
    resources to eliminate threats to national security. I
    compliment you and your committee for taking the appropriate
    time to do this.
        This is not the time, however, to strengthen just one
    aspect of our national security at the expense of weakening
    others, rather an opportunity to strengthen all, so we've
    eliminated recognized security vulnerabilities of this great
    Nation, a Nation that depends on a robust global economy and a
    maritime transportation system for its well-being and for its
    defense. As important as the maritime is to this what I have
    always called an ``island nation,'' it's the least secure of
    our borders. We have over 95,000 miles of open shoreline and a
    maritime transportation system that accounts for 95 percent of
    our overseas trade. Ninety percent of the material for support
    of any war that we fight goes by sea.
        For over a decade improvements to the security and
    efficiency of our maritime industry and coastal defense have
    languished and have been relegated to a lower priority in our
    policies and our budgets. Coastal defense is a Defense
    Department mission and was last in the priority of all defense
    missions, and less than 2 percent of the Coast Guard's budget
    was allocated to the mission of maritime security.
        The events of September 11th have changed all of that. As
    you've indicated in your slide, by the 12th of December the
    Coast Guard had reprioritized its resources so that 50 percent
    of all its resources were focused on maritime security. The
    Coast Guard 2003 budget now proposes 22 percent of all its
    resources be allocated to this mission and at the same time the
    Department of Defense is standing up a CINC, Commander in Chief
    for Northern American Defense.
        These are certainly popular and seemingly rational
    responses to the threat, and you and numerous other committees
    of our Congress are investigating their purpose and usefulness.
    With respect to the Coast Guard I offer the following: It has
    11 primary mission areas, all which contribute to national
    security. The Coast Guard is the only agency in any government
    that's a member of the Armed Forces and a law enforcement
    agency. This is probably the most important characteristic
    that's made it such an effective instrument of national
    security.
        The Coast Guard is one of the most efficient and effective
    agencies in U.S. Government, developing to its present state
    over 220 years and returns $4 in benefits for every dollar it
    spends. As a multi-mission agency, it's instantly ready to
    adapt and concentrate forces and resources on any one of its
    mission areas, as was demonstrated after the September 11th
    attack and previously in the war on drugs, the Haitian and
    Cuban migration programs and significant defense, search and
    rescue, and environmental safety programs.
        The fundamental maritime expertise as a seagoing service is
    common to all mission areas but cannot sustain increases for
    long periods of time in any mission area without deleterious
    effects to others. For decades the Coast Guard has been
    underfunded and resourced with less people and equipment to do
    the missions the American people request and deserve. It's only
    this last year, particularly since September 11th that these
    resource inadequacies are being addressed in the areas of
    operating expenses and replacing aged equipment.
        Specifically, I note the following in the fiscal year 2003
    budget submitted by the Coast Guard to the Department of
    Transportation and by the administration: That non-
    counterterrorist law enforcement missions are reduced
    approximately on an average 5 percent overall. Examples as a
    percent of operating budget from fiscal year 2002 and 2003 are
    drug interdiction is reduced from 18 percent to 13 percent;
    migration interdiction, 5 percent, 4 percent. Very disturbing
    to me that maritime safety, which is our whole port State
    control system for merchant vessels of foreign nations coming
    into our waters, reduced 13 percent to 5 percent. And on and
    on. Fisheries enforcement, 16 percent to 12 percent.
        While there's no question that an immediate response to the
    terrorist threats and these changes were necessary, they should
    not be for the long run. Drug interdiction, migrant
    interdiction and maritime safety are integral to maritime
    security of our country. I know that the administration has
    asked for no funding to startup the new department and
    spokesmen have gone on record about savings expected by
    combining various agencies together and they'll be used for the
    purpose of setting the new department up. I do not agree with
    this notion. If we're serious about the success and purpose of
    the new department, then the following needs to be
    accomplished:
        The new department strategic plan should be promulgated,
    goals should be set, objectives outlined and resource
    requirements identified to meet a proposed end-state level of
    increased security, not just increase the security but an end
    state that is specified. In the case of Coast Guard I contend
    that the synergies realized during the past several decades of
    the agency be preserved and strengthened. In my opinion, the
    American public would disagree with the Coast Guard being
    disassembled in any way and that the Coast Guard is the best
    agency to provide maritime security. It can function as well in
    the Department of Homeland Security as the Department of
    Transportation. But this should remain a multi-mission agency,
    both a member of the Armed Forces and a law enforcement agency.
        The Commandant of the Coast Guard should remain as he is
    today, the drug interdiction coordinator for the United States,
    and that mission's funding should be fully restored. After all,
    illegal drugs funded terrorist organizations in Afghanistan as
    well as those in Colombia, Peru and other nations as well, and
    I think you'll hear from my colleagues on the panel today about
    that in more detail.
        The integrated deepwater acquisition that will restore the
    Coast Guard's vessels with DOD compatible command, central,
    communications, computers, intelligence and surveillance and
    reconnaissance, known as C4ISR, should be accelerated. This is
    probably the most important tool needed to increase maritime
    security effectiveness.
        In summary, the placement of the Coast Guard in this new
    department will not have a detrimental impact on other law
    enforcement missions if the agency is adequately funded and
    kept as a multi-mission armed force and law enforcement agency.
    However, in my opinion, as presently planned and funded, the
    impact will be detrimental. I know that neither you nor the
    American people want that. In my opinion, the reorganization is
    secondary to providing adequate resources to accomplish the
    mission the Coast Guard's' already presently tasked with.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Kramek follows:]

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        Mr. Souder. Thank you very much for your testimony. We'll
    now go to Mr. Marshall.
        Mr. Marshall. Good afternoon, Mr. Chairman, Mr. Cummings
    and subcommittee members. It is indeed an honor and a privilege
    for me to appear before you again, this time as a private
    citizen, to share my views on how the proposed reorganization
    of the--and consolidation of agencies into the new Department
    of Homeland Security might impact law enforcement activities
    other than terrorism, particularly drug interdiction and
    investigations.
        Before I go into my statement I want to thank you, Mr.
    Chairman, and indeed all of the members of this subcommittee,
    for your very consistent support over the years to law
    enforcement and particularly for your support to the dedicated
    and courageous men and women of my former agency, the Drug
    Enforcement Administration. Before I left DEA, actually in
    December 2000, I testified before the House Subcommittee on
    Crime about the threat posed to our country by the convergence
    of organized crime, terrorism and drug trafficking.
        Well, a lot has happened since December 2000, and since
    then we think in this country we've all become a lot more aware
    and able to recognize the threat of terrorism against our
    country. But I'm afraid that the general public still does not
    fully understand the important connection between international
    drug trafficking and global terrorism. This connection that I
    refer to is really not a new connection because for a long time
    we have seen terrorist groups in places like Colombia and Peru
    connected with drug trafficking and we've seen drug trafficking
    in places like Colombia, Mexico and Southeast Asia use
    terrorism to further their drug trafficking activities.
        I have given a detailed history of the various connections
    between drug traffickers and terrorism in my written statement.
    But since my time is limited here right now, I will just say
    for now that those connections between drug trafficking and
    terrorism are very real. They are very significant and they
    will grow in importance as our war against global terrorism
    proceeds over time.
        I believe that through that war against terrorism that
    ultimately we will be successful in denying State sponsorship
    to terrorists to the extent that they enjoy it today and as we
    do that, terrorists won't give up but they will have to turn to
    alternative sources of funding for these evil conspiracies, and
    the place that they will likely turn for that funding is crime
    and particularly drug trafficking. In fact, I believe very
    strongly that if we are to succeed over the long term against
    terrorism we must also succeed in our struggle against drug
    trafficking and organized crime.
        Therefore, I believe that it is imperative and even urgent
    that as we proceed in this war on terrorism that we also
    maintain a very robust and even a greatly increased effort
    against organized crime and drug trafficking. We really cannot
    afford to get behind the power curve on this effort. Otherwise,
    we could wake up in this country 1 day and find that the
    connection between crime, drugs, violence and terrorism is out
    of control. It's happened in other countries and it could
    happen here. In fact, it almost did happen here in the days of
    the cocaine cowboys in south Florida in the 1980's.
        Now, the challenge that we face right now is one, I think,
    of organizing and acting to meet the most immediate threat that
    we face today, and that's the threat of preventing further
    terrorist attacks and destroying the terrorist organizations
    that seek to conduct those acts. The most urgent and difficult
    challenge I believe in pursuing that mission is ensuring that
    we have an effective and an efficient capability to collect,
    analyze, disseminate and act upon relevant information.
        Now, those are precisely the same skills that we need for
    effective law enforcement, now and in the future. So as we
    create the new Department of Homeland Security, we must
    buildupon existing information sharing capabilities and even
    create new ones where necessary. We must ensure that we have an
    effective system to promote cooperation and information sharing
    and, equally important, we must ensure that the leaders of
    homeland security agencies and other Federal, State and local
    law enforcement agencies, that those leaders must ensure that
    there's an atmosphere and a spirit which facilitates that type
    of cooperation.
        The cooperation that I refer to, while not perfect in the
    year 2002, is already in fact quite strong among our law
    enforcement agencies. So I believe that we already have a solid
    foundation for accomplishing these goals. We have to be careful
    in the creation of our counterterrorism efforts that we build
    on those strengths and be careful that we do nothing to
    diminish these existing capabilities.
        In closing, I would like to once again thank the
    subcommittee and all of the Members and staff for your
    continuing work to make our country safer. I know that our
    leaders in Congress and the administration and in State and
    local governments across the country have a tremendous
    challenge ahead in meeting this terrorist threat, and I hope
    that my comments, my statement and my response to your
    questions today in sharing my viewpoints are in some small way
    perhaps helpful in preserving our freedom and our values.
        I would just like to say at this time may God bless America
    and may God bless and assist our Nation's leaders as we begin
    this struggle against terrorism and for the safety of our
    country. Thank you, and I'll be happy to answer any questions
    at the appropriate time.
        [The prepared statement of Mr. Marshall follows:]

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        Mr. Souder. Thank you very much.
        Mr. Nunez.
        Mr. Nunez. Thank you, Mr. Chairman and Mr. Cummings,
    members of the subcommittee. I would like to add and supplement
    the written statement that I have made today with a few related
    points.
        First of all, I think this is clearly a historic, perhaps
    once in a lifetime opportunity for Congress to fix a number of
    problems within the Federal law enforcement community that have
    existed for many, many years, and I think it is very important
    that we take as much time as is possible to make sure we get it
    right. I understand the President's desire to get a bill before
    the end of the year, but it is more important that this be done
    properly than that it be done quickly.
        I guess after many years of thinking about the interaction
    of all of these different Federal agencies, the transformations
    that have taken place, it is clear to me that there is no
    perfect solution to the reform and reorganization of Federal
    law enforcement. It may never be possible to come up with a
    logical plan that applies equally well to all agencies and all
    missions and goals.
        There are good arguments that can be made in favor of the
    single mission agencies, if you will, there are good arguments
    for large multi-purpose agencies. I think what's more important
    is that the objective is how we balance the competing concerns
    of, on the one hand, maintaining a focus on high priority crime
    problems and, on the other hand, how to do so while maintaining
    some flexibility with our resources, with our budgets and doing
    all of it as cost effectively and efficiently as possible.
        The best way to ensure that a priority is being dealt with
    properly is to create an organization whose primary purpose is
    to pursue that objective and then hold it accountable for the
    results. I assume that is part of the reason why this new
    Department of Homeland Security is being created.
        I think in the past the creation of DEA in 1973 is a
    perfect example of identifying a major problem and
    concentrating the resources in one agency. DEA has one
    priority, that's drugs. The FBI, on the other hand, has been
    the opposite example. Multiple missions, multiple priorities,
    too many things are competing with each other for priorities.
    It's almost a flavor of the month.
        I recall going to meetings back in the late 1980's, early
    1990's with the Attorney General, suggesting to the FBI that we
    needed--that we were going to identify a new priority, and the
    FBI would say, fine, we can do that but tell me what to stop
    doing. Everything can't be No. 1. And when you look at the
    FBI's agenda they clearly have a lot of work to do in areas
    that we care about.
        The major concern is that by bringing so many different
    agencies together in this new department that their non-
    terrorism responsibilities can get lost in the shuffle. For
    example, the Secret Service has criminal law jurisdictions
    having nothing to do with terrorism: Counterfeiting, credit
    card fraud, other investment fraud or financial crimes. INS
    clearly has missions beyond terrorism, certainly related:
    Customs, trade facilitation and enforcement. There are drug
    enforcement issues, money laundering issues. There's all kinds
    of criminal law priorities or interests that need to be
    protected.
        The choice in the past has really been between
    consolidation and cooperation. We can merge agencies or
    consolidate them in a way to refocus the resources, and again,
    1973, that was the method that brought DEA into creation. But
    this has also proved in the past to be the most difficult way
    to do things. It requires a huge effort to overcome the
    bureaucratic and political obstacles. It is very difficult to
    do. Since then cooperation and coordination among agencies and
    departments is the way we have chosen to address these
    problems.
        This is the way the Federal Government has proceeded since
    the early 1980's with the creation of various multi-agency
    tasks forces and HIDTA programs and various cross-designation
    programs. There's a multitude of examples, the Office of
    National Drug Control Policy itself, this focus on combining
    the resources of various agencies toward priority objectives
    without changing the agencies themselves. As I said, it takes a
    lot of effort but it has been done successfully in the past.
    But I should point out that transferring different agencies
    into one department does not necessarily solve the problem or
    end the debate.
        During my time at Treasury in the early 1990's, I was
    amazed at how often the four principle Treasury agencies
    managed to keep themselves separate from their sister agencies.
    They all had their own budgets. They all had their own cars,
    uniforms, radios, radio frequencies. I mean everything was
    different. Everything was separate. They had separate offices
    in every city where they were located. They had in some cases--
    I remember going to Thailand in the early 1990's, and there was
    one Secret Service agent and one Customs agent and they had two
    separate offices, two separate secretaries, two separate xerox
    machines. Everything was duplicative, with jurisdictional
    overlaps between Customs and ATF and various other agencies.
        And it is not just at Treasury that we've seen this. The
    same problems exist within the Justice Department, where the
    FBI seems always to have come out better than its sister
    Justice agencies in the budget battles over many, many years.
    INS, on the other hand, always seems to have been at the bottom
    of the food chain, the stepchild of DOJ for many decades.
        So just putting everyone in the same department does not
    necessarily lead to equal or fair treatment or effective law
    enforcement. Every agency has a constituency and a support
    structure, including here in Congress. These entities push the
    parochial needs of their own agencies without regard to the
    needs of others. So coordination within this new department may
    be as difficult as coordination between agencies in different
    departments. The fact that the FBI and INS were both part the
    Justice Department on and before September 11th doesn't seem to
    have helped them share information or work together to deal
    with the threat of terrorism.
        Consolidation of inspectors is another issue. I've
    discussed that in my written statement. I won't go over it any
    more. I mean, there is, it seems to me, a certain logic to
    taking Immigration inspectors and Customs inspectors and
    combining them in a generic special force. They are already
    cross-designated at most ports of entry. They do the same work,
    yet we have two separate chains of command, two separate
    everything, and my experience in the U.S. attorney's office in
    San Diego for many years was that it was quite ineffective to
    try to bring these two inspections forces into some sort of
    balance.
        So I believe that some kind of consolidation of the
    inspection services makes sense. But the critical thing is to
    try to do it in such a way that the agencies that rely upon
    them, whether it's Customs or Immigration or DEA, the FBI, that
    there is a mechanism in place to ensure that the inspection
    agencies can communicate properly with the agencies they
    support.
        The creation of this new Department of Homeland Security
    and the transfer of dozens of agencies from other departments
    is obviously a huge undertaking, involving a whole range of
    issues, some advantages, some potential disadvantages. The
    issue is whether the subjugation of the mission, original
    missions of all of these disparate agencies to the priority
    mission of homeland security can be done without damaging the
    purposes for which these agencies were originally created and I
    think for which really we continue to want them to perform.
        So can traditional law enforcement's function survive this
    new priority? The answer has to be yes. The question is how do
    we do it?
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Nunez follows:]

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        Mr. Souder. Thank you very much.
        Mr. Kruhm.
        Mr. Kruhm. Chairman Souder, members of the subcommittee,
    thanks for inviting me to speak this afternoon on agency
    missions and their new responsibilities under the proposed
    Department of Homeland Security. I will abbreviate my prepared
    text to stay within my allotted time. I trust you will get an
    opportunity to review my comments, and if you have any
    questions at a later time I will be willing to assist you in
    any way that I can.
        I am aware of your and your staff's concern that the new
    department and its suborganizations will be so counterterrorism
    focused that they will lose their ability to continue with
    their historical missions. I don't believe that will be the
    case. What I see as an inhibitor of mission performance is the
    same issues that have plagued the agencies for some time. For
    the Immigration and Naturalization Service and the U.S. Border
    Patrol it is the continued attempt to respond to the dual
    system of immigration, one legal, one illegal. It hasn't
    worked, and I do not believe it ever will.
        The tragic consequence of the dual system is the
    dehumanization of the migrants, the facilitation of other
    criminal activities, and the adverse impact on organizations
    like DEA, Customs, Coast Guard, Federal prosecutors and others.
    I don't feel these other organizations can be truly effective
    until the impact of illegal migration is resolved.
        In the case of the Border Patrol, their mission is to
    interdict whatever attempts to enter this country illegally
    between ports of entry through its activities on the border and
    in other operations. They have done a good job in the face of
    an immigration policy designed for failure.
        Consider what they have been up against with the statistics
    of the Border Patrol making their 40 millionth arrest late in
    fiscal year 2000 or early 2001. Drug smugglers, terrorists,
    criminals and other nefarious characters have been intermingled
    in those 40 million people. The Border Patrol has arrested a
    lot, but many have eluded detection. Over time the bad guys
    have learned to use migrants as cover for other criminal
    operations. They also take away the migrants' humanity through
    extortion, robbery, rape and murder.
        Sixteen migrants were found dead this past week in the
    desert near Tucson, Arizona, a mother and two children this
    weekend. That is just 1 week in just one location. In addition,
    the migrants provide the smugglers with the cashflow to
    maintain their operation so that they can make even greater
    profit from others who want illegal access to the United
    States.
        So you see counterterrorism operations, at least for the
    Border Patrol, has always been part of the mission. The job of
    the Border Patrol is to interdict whatever enters illegally. If
    it is not a migrant case, then the Border Patrol hands the case
    off to appropriate investigative organizations, whether it be
    Customs, DEA, FBI or other responsible agencies or departments.
        An issue that Congress and Homeland Security should be
    concerned about is mission creep. I do not believe this
    government can afford to have all of the interested border
    agencies lined up on a bluff, sitting in their cars, waiting
    for their individual case to come along, nor do we need two
    armed enforcement groups in the same area unknown to each
    other. Homeland Security's leadership will only be effective
    when it has a clear mission statement, one that ensures the
    protection of our free society and its citizens, a mission
    statement that understands each independent role and the common
    responsibilities of its organizations. It must allow this new
    department to be precise, responsive and agile, not a massive
    organization, rather one able to respond to the needs of and
    ensure the success of the appropriate organizations already
    established.
        I would hope the Department of Homeland Security would be
    as Mohammad Ali described his boxing style, float like a
    butterfly, sting like a bee.
        Again, thank you for this opportunity to discuss some of my
    observations from working with many of the agencies involved in
    the security of the United States of America.
        [The prepared statement of Mr. Kruhm follows:]

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        Mr. Souder. Thank you very much.
        Mr. Banks.
        Mr. Banks. Chairman Souder, Mr. Cummings, members of the
    subcommittee, I want to thank you for this opportunity to
    testify. My remarks are going to reflect a perspective of
    having spent 28 years in the U.S. Customs Service and having
    the opportunity and the pleasure at times of working with every
    one of the agencies and the people at this table.
        It's my belief that the proposed consolidation of the
    border and transportation security agencies, including Customs,
    into a new Department of Homeland Security would be a positive
    step for the protection of this country and the American
    people.
        Now, as much as I support the concept of this
    consolidation, I think your subcommittee is absolutely correct
    in being concerned about the effect that this reorganization
    could have on the vast array of law enforcement issues,
    terrorism, narcotics and a huge number of other things that are
    important for the security of this border and the American
    people.
        Customs enforces a whole variety of laws. They look for
    weapons of mass destruction, they do money laundering, they do
    narcotics and narcotics investigations. But Customs also
    enforces some 400 laws for 40 other agencies at our borders,
    and many of those laws concern public health and safety issues.
    Many concern trade laws and even collecting $20 billion in duty
    every year. It is absolutely essential that these activities
    continue into the future under any reorganization.
        I believe there are just a few critical factors that really
    need to be kept in mind as the review goes forward about this
    new Department of Homeland Security and an amalgamation of
    these agencies in order to ensure that all of these missions
    are sustained under a consolidation.
        The first and foremost point is that--now, this is Customs.
    Customs is a complete entity that needs to be moved intact into
    the new Homeland Security Department. There have been
    discussions of perhaps trade issues or investigative issues or
    other things could be potentially split apart or moved out of
    the agency. Well, I guess my recommendation to you is that the
    field units and the work in Customs all focused on border is so
    inextricably intertwined that it would be a huge mistake to
    split this apart. The trade components, the trade experts in
    the agency, and the investigative components all share vital
    information across all of those organizational lines and share
    intelligence. The criminal investigators and trade experts are
    so interdependent that if you separate them you really do
    serious harm to the total enforcement picture. Splitting the
    agency as well would only fragment operations.
        Is there then going to be another agency that you're going
    to deal with at the border and that the international trade
    community and that the international airlines would have to
    contend with? So No. 1 is take it over whole as a component to
    support border security in cooperation with the other agencies
    represented here.
        The second point is that Customs runs many of the
    automation systems that are critical to our borders. These are
    the systems that perform all the enforcement screenings of
    virtually every person, virtually every piece of cargo,
    virtually every conveyance that crosses the U.S. borders. These
    automation systems support not just U.S. Customs but also INS
    and a whole series, like 28 other law enforcement agencies
    within the U.S. Government. These automation systems are so
    important that they run 24 hours a day, 7 days a week, 365 days
    a year, and they are absolutely essential, not just for
    enforcement but also to ensure that trade and travelers are
    facilitated across our borders.
        So I guess the point that I would make to you is this is a
    fundamental critical issue to sustain those information
    systems, to support the entire border, and they need to be
    taken over into this new agency as well.
        The third and last point that I would make to you is that
    U.S. Customs Service has established longstanding partnerships
    with the business community that is engaged in international
    trade. Now, these partnerships have been essential to make sure
    that trade flows smoothly across our borders, because even a
    few hour delay at our land borders can shut down manufacturing
    plants. But these partnerships have also been instrumental in
    improving the enforcement at our borders. Customs has reached
    out to the airlines and the ocean carriers to improve the
    security process of their international supply chain, and
    companies as a result of these partnerships have added more
    resources to improve the security of the whole process.
        Most recently, Commissioner Bonner launched something
    called a Customs Trade Partnership Against Terrorism, and the
    whole idea is to have international companies involved in the
    transportation and the shipping of international goods, focus
    on how to improve the security to make sure that nothing
    illicit gets put inside those containers on board those vessels
    or on those aircraft. These sorts of partnerships work both
    ways. They support both the enforcement side and they support
    the trade side.
        So in summary, I guess I would say that going toward the
    Department of Homeland Security should achieve greater
    efficiencies, should achieve greater information sharing,
    should eliminate a lot of duplication. But in order to do this,
    in order to reach its real potential, I think it's absolutely
    essential that this thing be done thoughtfully and that the
    best practices that exist within all of these departments are
    carefully screened and incorporated into this new department so
    that we really do serve to improve the enforcement at our
    borders.
        Thank you very much.
        [The prepared statement of Mr. Banks follows:]

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        Mr. Souder. Thank you.
        Dr. Flynn.
        Mr. Flynn. Thank you, Mr. Chairman. It is a privilege to be
    here today to talk about this very important topic. I think I
    come to you by way of spending the last decade looking at
    issues, many of which have come before this committee, with
    regard to organized crime as a professor at the U.S. Coast
    Guard Academy and other places and also with work that I did
    with the Hart-Rudman Commission specifically on the issues of
    homeland security. If there is one thing I took away from that
    experience with that commission, it is that what we saw on
    September 11th is how warfare will be conducted in the 21st
    century, that one of the ironies of the end of the cold war has
    made it such that going toe to toe with America's conventional
    military force is a fool's game and America is the Goliath and
    our adversaries are going to be creative Davids.
        And how do they do this? What's the format of the warfare?
    The format looks a lot like organized crime. As we've heard
    already by some of the other distinguished members here, it is
    essentially the lubricant for conducting your terrorist--for
    both raising the cash for the terrorist campaign as well as
    getting access into the United States. There is a real
    convergence on that issue. The nature of organized crime, as we
    found in the 1990's, is that it's rare that criminal
    organizations are monolithic or mono-focused. They tend to
    diversify. And what we see is that Colombians are not only
    involved with cargo theft but they're involved with narcotics
    trafficking in south Florida, but they're involved with things
    like cargo theft, high technology, moving from a free trade
    zone to the Port of Miami. Similar convergence with Chinese
    gangs that are not just in the business of smuggling heroin
    into the United States but move migrants and also move pirated
    software and a whole sundry of other things.
        So if we're going to have a war on terrorism, we really
    have to be looking at organized crime as very much linked with
    that. And if we're going to talk about combatting organized
    crime, we have to see it as much broader than just narcotics
    interdiction, and that leads us to who are the front line
    agencies who are going to be wrestling with that, with those
    challenges, and they are in fact many of the agencies that the
    administration has recommended be put under this new home, the
    Office of Homeland Security.
        I would say we've seen three key developments here with
    regard to organized crime in the 1990's. One is the
    diversification I mentioned. The second is globalization, and
    the third is the crime terrorism-guerrilla nexus. Now, these
    are important relative to the subject of the hearing today for
    the following: The challenges of terrorism and narcotic
    interdiction simply cannot be isolated from the issue of
    organized crime or generally. And the corollary that flows from
    this conclusion is that many of the enforcement activities that
    target crime, such as cargo theft, tax evasion, migrant
    smuggling, and Internet fraud, will reap important dividends in
    fighting narcotics smuggling and terrorist activities in the
    U.S. homeland.
        Now the complexity of the Homeland Security agenda I argue
    requires developing the means to identify transnational
    activities and actors that pose little or no risk to the United
    States so that limited regulatory enforcement and security
    resources can be targeted to those which present a high risk.
    Such an approach places a premium on good intelligence and
    developing the capacity to practice what cyber security experts
    call anomaly detection.
        Now, in the computer industry anomaly detection represents
    the most promising means for detecting hackers intent on
    stealing data or transmitting commuter viruses. The process
    involves monitoring the cascading flows of computer traffic
    with an eye toward discerning normal traffic. Once that
    baseline is established software is written to detect aberrant
    traffic. A good computer hacker will try to look as much as
    possible like a legitimate user, but because he is not
    legitimate he inevitably does something different. Good cyber
    security software will detect that variation and deny access.
    For those hackers who manage to get through, their breach is
    identified and shared so that abnormal behavior can be moved
    from the guidance of what is normal and acceptable.
        Now, in much the same way the overwhelming majority of
    cross-border traffic that moves through the global networks to
    the United States and the global community on which they depend
    moves in predictable patterns and is the front line agencies
    like the Coast Guard and Customs and INS and Border Patrol that
    are there monitoring that day-to-day traffic and that have the
    relationships with the private sector players, who are
    legitimate players, who are part of those processes that
    ultimately are going to inform us about something's good, bad
    or indifferent.
        Now, the key with stressing the importance of anomaly
    detection as a tool for identifying and intercepting criminal
    or terrorist activity highlights the fact that an important
    element of homeland security mission requires that these
    frontline agencies must have the means to do well that which
    they were traditionally tasked to do; that is, in pursuing
    their day-to-day work that they would develop the expertise,
    the relationships, and the process and possess the authority to
    stop and intercept that which they discover to be aberrant.
        Coast Guard men and woman that are out on daily patrols to
    interdict drugs and illegal migrants, protect fisheries,
    advance safety among recreational boaters and monitor the
    movements of hazardous materials on ships or within ports, it
    is these folks who are going to have a physical presence and a
    requisite presence of mind and authority to pick up on other
    nefarious activities. Similarly, it's the Customs inspector who
    routinely examines the shipping manifest to ensure compliance
    with the U.S. revenue laws that is going to be best positioned
    to spot a shipment that makes no commercial sense, such as a
    very low cost commodity moving on a high cost conveyance.
        Based on the above, getting homeland security right
    therefore requires three things, the first a paradigm shift
    that moves away from a gates, guards, and guns approach to
    security and toward a network risk management approach for
    mitigating the threats associated with catastrophic terrorism;
    second, that the capacity of the agencies who play the role of
    first detectors and first responders in these networks must be
    commensurate with the responsibilities they shoulder; and third
    and finally, that the work of these agencies must be supported
    by enhanced communication and coordination with the national
    security intelligence communities.
        The obvious question this ambitious agenda raises is can it
    be accomplished without a major realignment of those agencies?
    I would suggest that the past and post-September 11th
    experience to date would answer, would suggest the answer is
    no.
        In the end, organizing homeland security is really a subset
    of the broader challenge of how to work to ensure security is
    an organic part of global networks that, one, criminals and
    terrorists will increasingly target and exploit and, two, upon
    which the United States and the international community
    depends. The events of September 11th should have fatally
    undermined the prevalent myth of the 1990's that less is more
    in advancing globalization. Managing complex, concentrated,
    interdependent systems requires protocols and a means to ensure
    those protocols are being abided by. Done smartly, this can be
    accomplished.
        The American people should be able to look forward to a
    two-for by combining many of the frontline law enforcement
    agencies into the Department of Homeland Security. One, they
    will get a more robust capability for detecting and
    intercepting terrorists before they arrive or carry out their
    attacks on American soil. Second, they also get more capable
    agents and agencies in combatting crime. Any effort to tradeoff
    the one for the other would only be self-defeating.
        Thank you very much.
        [The prepared statement of Mr. Flynn follows:]

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        Mr. Souder. Thank you. Before moving to questions, I yield
    to Congressman Cummings, if you would like to do an opening
    statement.
        Mr. Cummings. Thank you very much, Mr. Chairman.
        In the 9-months that have passed since the tragic attacks
    of September 11th, a great number of our government agencies
    have shifted their priorities and resources to better position
    themselves to fight the war on terrorism. Many of them,
    including those tasked with border security, domestic law
    enforcement, and drug interdiction, fall within the oversight
    and jurisdiction of this subcommittee. Among them are border
    agencies such as Customs Service, the Border Patrol, the
    Immigration and Naturalization Service, and the Coast Guard may
    be said to serve on the front lines as they regulate the flow
    of people and materials into the United States.
        The President's proposal to create a Department of Homeland
    Security, like the Lieberman/Thornberry legislation, as the
    basis for this direct proposal, would merge the border agencies
    and many others into a single cabinet level department. The
    reorganization of these agencies will entail substantial
    adjustments in addition to those made within each agency to
    date. The reorganization will have further ramifications for
    the agencies not included in the proposed department, most
    notably, the FBI and the CIA.
        Already, the FBI is undergoing a major restructuring plan,
    as a result of the of which 518 agents have been transferred to
    counterterrorism activities, 400 of them from drug
    investigations.
        Similarly, the Customs service has moved counterterrorism
    to the top of its mission and priority list. For the Coast
    Guard, post-security has supplanted search and rescue and drug
    interdiction operations as its top mission priority. Also,
    reflecting a shift in priorities toward anti-terrorism, the
    Border Patrol has shifted substantial resources away from the
    U.S./Mexico border to the even more vast northern border. And
    the Drug Enforcement Administration has contributed hundreds of
    agents to the Sky Marshals program, even as intelligence
    reports suggested warring roles for a drug trafficking in the
    financing of terrorist groups and activities.
        Over the past several months, this subcommittee has held a
    number of hearings to assess the impact of the heightened
    security focus on these agencies and their nonterrorism-related
    functions. These include a series of field hearings at border
    crossings and sea points around the country. According to some
    testimony the subcommittee has received, the heightened focus
    on terrorism may actually be helping efforts to discover
    illegal drugs and other contraband, since that focus calls for
    heightened security scrutiny of persons and materials entering
    the country generally. But whether the cumulative effect of the
    resource shifting will continue to be positive for the U.S.
    counternarcotics efforts and whether other nonterrorism-related
    functions will similarly benefit is far from clear, and hardly
    a foregone conclusion.
        What should be clear is that the war on terrorism must be
    waged in a way that does not compromise other vital missions
    that homeland security agencies carry out. Ensuring this result
    will require careful evaluation and planning, and this
    subcommittee and others of the Government Reform Committee have
    an important role to play in exercising our jurisdiction over
    the proposal to create a Department of Homeland Security.
        First among our objectives should be ensuring that the new
    department actually streamlines communication and cooperation
    between and among the new department's diverse components as
    well as the department and other Federal, State, and local
    agencies. The importance of efficient intelligence gathering
    and information sharing to the homeland security mission has
    led some to suggest that the FBI and CIA should also be merged
    into the new department. At the same time, the FBI's law
    enforcement function has been cited as a reason why the agency
    should be kept separate, even though numerous other agencies
    with domestic law enforcement responsibilities are included in
    the Bush and Lieberman/Thornberry proposals.
        So, there is much for us to sift through and to sort out,
    and we are fortunate to have a panel of witnesses before us who
    possess a wealth of wisdom and experience as former high
    ranking agency officials and experts in the areas of homeland
    security. I welcome them. I find their--already, their
    testimony to be quite interesting, and I look forward to the
    questioning phase of our hearing.
        Again, Mr. Chairman, I want to thank you for holding this
    hearing. I think it is quite timely, and certainly quite
    appropriate.
        Mr. Souder. Congresswoman Schakowsky, would you like to
    make any opening statement?
        Ms. Schakowsky. Thank you, Mr. Chairman, for convening this
    hearing today to examine the possible impact of the creation of
    a new Department of Homeland Security. The effect that it will
    have on our Federal law enforcement and drug interdiction
    efforts.
        Since President Bush's June 6th announcement of a proposal
    to create a new Department of Homeland Security, numerous
    questions have been raised by Members of Congress and the
    American public and the media. One question that is worthy of
    considerable discussion--and we have had some today, and I
    appreciate your input--is the impact the creation of this new
    agency will have on critical nonhomeland-security functions of
    the agencies the President has proposed for inclusion in the
    new department.
        For example, among the many duties of the U.S. Coast Guard
    is performing search and rescue operations and facilitating
    travel for commercial vessels; the Immigration and
    Naturalization Service provides numerous fee base services for
    legal immigrants; other agencies that may be folded into the
    new department are tasked with interdicting illegal drugs and
    collecting tariffs. Some have raised concerns that these
    critical services may not receive the attention they deserve
    from a cabinet secretary whose primary charge is to protect the
    homeland. Moreover, some have questioned the wisdom of placing
    multiple and possibly competing missions within the same
    department.
        Another issue worthy of considerable discussion again
    raised earlier is the administration's decision not to include
    the CIA or FBI in the new department. Some have asked how this
    new agency would have prevented the kind of intelligence and
    communications failures that led up to the September 11th
    attacks. It is not altogether clear whether creation of a new
    Department of Homeland Security will guarantee that crucial
    intelligence and analysis would make it to those who most need
    to be familiar with it, or whether the new agency will simply
    add another layer to the top of an already dense bureaucracy. A
    fundamental question each of us has and will continue to ask
    ourselves and the proponents of the new department is: Will it
    make us safer?
        To answer that question, we must first take the necessary
    steps to identify just what went wrong, and how similar
    failures of our system can be prevented in the future. Then we
    must make a determination as to whether this new proposal
    addresses the problems.
        I am not convinced that our first priority ought not to be
    addressing those clear failures that led up to September 11th
    before we address what may be longer-term problems. I am also
    concerned about what impact the transition process alone would
    have on existing security and non-security operations of our
    various agencies and their employees, and hope to get to some
    of those answers through our question-and-answer period. So, I
    thank you, Mr. Chairman.
        Mr. Souder. Thank you. One is, is that what I would like to
    say first off, is that hopefully you will each be available to
    our staff and us in the next 14 days. I am not saying this is
    on a railroad track; railroads don't move this fast.
        It looks like for a number of reasons this full committee
    is starting this week and will be moving prior to break. It is
    clearly in an election year. If we don't move this through the
    House before the August recess--which will be an extraordinary
    pace, given the multiple jurisdictional and possible select
    committee oversight, it is going to be very difficult to get
    this conferenced before the end of the session. The goal,
    obviously, would be to try to have this done before the
    election; if not, then in a special session after the election.
    And you can realize that when you are dealing with this many
    committees and two bodies, the first steps are coming really
    fast. So, we need relatively rapid answers.
        It is also clear that we are going to be doing oversight
    over this for the rest of our careers, because whenever you
    move fast, it means you are going to make some mistakes. The
    truth is, however, if we don't move fast, the bureaucratic
    inertia may take over here, and we will lose the ability to
    move. So, this is a very difficult tradeoff, but it does mean
    we have a lot of pressure on us in the next 2 weeks that the
    hearings that we had in the--in Congressman Shays' and Weldon's
    committee last week on the Thornberry and Lieberman bills were
    the--kind of the start of our oversight. And it is also clear
    that everybody is tippy-toeing around certain of the things,
    and part of the reason we brought you in here today is to try
    to see if we can reconcile or treat head-on some of these
    questions. And I appreciate your frankness, and I am going to
    start to move into some of these questions right away.
        And I will like to move through one assumption that Dr.
    Flynn--and I want to understand what you had in your testimony.
    You said that--because clearly I like the way you said
    catastrophic terrorism. In other words, that's what's really
    the change here. And the question is, is how much emphasis are
    we going to put on catastrophic terrorism versus kind of the
    day-to-day terrorism. And, in fact, at this point the numbers
    don't equate.
        In other words, the risk to our economy, the risks on
    narcotics, the risks on child trafficking is far greater than
    the catastrophic terrorism. How would you factor that in to the
    psychological battle that we are in right now? Because, really,
    the tradeoffs we are talking about is, how many resources are
    going to catastrophic versus the day-to-day challenges?
        Mr. Flynn. Well, I think if we are talking about the
    prevention of catastrophic terrorism acts, then the point that
    I guess--you know, if I could distill my testimony to a single
    sentence, is you cannot do kind counterterrorism, you cannot do
    homeland security without basically dealing with a broad range
    of crime that has bedeviled us for quite some time. They are
    completely intertwined. And so the opportunity there is that by
    doing well the traditional crime problems, you are, in fact,
    enhancing your capacity to deal with terrorism. You know,
    terrorism isn't an enemy; it's a form of warfare. The form of
    warfare is, how do I basically take on an adversary that has
    complete dominance in the conventional military realm. I have
    to try to blend in to the real estate to get at it and look for
    the soft underbelly. That's precisely what criminals have been
    doing for a long, long time.
        And I guess the second piece of that is that one part--the
    goal--there is military value in engaging in catastrophic
    terrorism. It is not just killing Americans in large numbers
    and toppling landmarks; it is getting the subsequent
    disruption, the economic disruption, and the societal
    disruption that flows from the event. We did to ourselves more
    were harm on a power basis than what the terrorists did to us
    on September 11th by closing all our seaports, closing our
    borders, effectively, and grounding all our aviation. We
    essentially imposed a blockade on our economy as the only tool
    we had to manage the risk associated with that event. That's
    because the agencies, the former heads of which are represented
    here--the only tool they had in the tool bag in this crazy
    world we are in here is to turn off the world to make it more
    secure.
        So, enhancing their capacity to do their job both helps on
    the detection ideally of bad people doing bad things initially,
    but it also helps us to deal with the postmortem, to turn the
    system back on again, and therefore start to chip away at the
    military value of doing these kinds of horrific acts. Again,
    it's a two-fer you get. But, if you try to isolate these
    things, it is self-defeating for homeland security, and it sure
    as heck will be self-defeating for these other vital interests.
        Mr. Souder. What was your reaction to, I think it was Mr.
    Nunez's statement that, to have an agency that focused on anti-
    terrorism, and not have the FBI, who has been designated as to
    be the focus on anti-terrorism, not in that agency? How do you
    reconcile that?
        Mr. Flynn. Well, it is clear that intelligence is a very
    key part in being able to identify what limited resources
    should target; and the FBI has some command on that
    intelligence on domestic ground. But it also is that much of
    the intelligence comes through some of the things that Mr.
    Banks laid out here: It's the day-to-day monitoring of
    commercial data. If the Customs agent says, what are we doing
    importing cement posts from Colombia when there are cheap and
    affordable cement here in the United States, that leads you
    into drugs or could lead you into a weapon of mass destruction.
        So, part of, though, the focus, I think, of the rationale
    was in the Hart-Rudman Commission on this issue, was that
    ultimately they would--at least a stepping point, a stepping-
    off point is if we can bring together, hobble together what I
    call the meeters and greeters of people, conveyances, and
    cargo, the folks who are most likely to become the first
    permanent cross to say, who are you and why are you here, the
    authority to basically examine them and make sure they are
    tethered back to the national security apparatus. Those
    agencies right now are orphans of their parent departments.
    They have not been well served by their committee oversight in
    general on the Hill, and they sure as heck have not been well
    served by the Office of Management and Budget.
        So, we are talking about, potentially at least, an advocate
    for their core functions that, if the synergy is there, can
    provide us homeland security. It's the strip-away elements of
    it to do the gates, guards, and guns, then it's just foolery.
        Mr. Souder. So I understand--let me, before I yield to Mr.
    Cummings--you are really arguing that the idea of leaving the
    FBI out was, is this is supposed to be the Department of Border
    Security.
        Mr. Flynn. Clearly, what the President put up front was
    that was one of the four elements, was to bring together the
    border and to bring rationale to them. That makes a good deal
    of sense to me. He also puts emphasis obviously on intelligence
    within that, that keeps the FBI and CIA out.
        Now, some of the--I'm of mixed views on it, but I think
    overall there is a lot of intelligence that's collected from
    open sources, from regulatory data and so forth that right now
    nobody can connect, and bringing it together and fusing it
    would give us a great deal of what I was trying to say in my
    testimony, anomaly detection to say, wait, this isn't right. We
    need to examine that.
        We also need a way to funnel in the intel. I mean, the
    challenge is that homeland security become all the U.S.
    Government at some stage. So the FBI, should it be in there? I
    think the same rationale is true, that many things are done for
    counter-crime and law enforcement and the intelligence goes
    with it, it's good for homeland security. It can fit within the
    construct, but there also is some rationale for bringing--for
    just the existing proposals of--because these really do
    represent the meeters and greeters for people conveyances, and
    cargo. They are, at least, being put under one roof.
        Mr. Souder. That's a step in the right direction basically
    needed.
        Mr. Flynn. I mean----
        Mr. Souder. In other words, that could include an airport,
    it could include a port. But, basically, you are talking about
    some sort of crossing into an American zone. That's what you
    mean by meeters and greeters?
        Mr. Flynn. That's right. Border patrol, INS for people,
    Customs and agriculture for goods, and for Coast Guard for
    conveyances, and TSA for airplanes and the rest of the
    conveyances as well.
        Mr. Souder. Mr. Cummings.
        Mr. Cummings. Mr. Flynn, again, I have got to ask you this.
    As I was listening to you, I was just trying to--you know, one
    of the things that you learn from being in government is that
    you can set policy but you still have got to deal with people.
    And I was just wondering, as you see it, if you were to bring
    all the agencies together, do you--you think it would be very
    difficult to get the kind of cooperation that's necessary to
    make it work? And, what kind of safeguards would you put in to
    make sure it does work?
        Do you follow what I'm saying? If people are used to doing
    things independently--I mean, I just look at some things that
    happen in--like in neighborhoods, in small areas, where people
    have their own turfs, and then just the whole idea of sharing
    just doesn't fit into what they have been doing all their
    lives--all their careers, rather. And I was just wondering, you
    know, how do you--how do you make sure--and I believe it can
    work; I'm just wondering, how you make sure that you get
    maximum cooperation for all the things that you talked about,
    communication and etc?
        Mr. Flynn. Well, I guess as a starting point, I would say
    I'm not sure how things would be more dysfunctional than they
    are right now with regard to, you know, these agencies
    cooperating and coordinating, precisely because they have to
    answer to so many different parents, whether it's the committee
    oversight that security is not their priority or many of their
    other missions, or whether the departments who have largely
    been, say, not only kind and gentle to them as they have gone
    about and done their business.
        Could the system we have right now created a gaping hole
    for the people to do what they did on September 11th; and I
    argue we are in a more dangerous time post-September 11th than
    there because of the example of that. They made it look easy,
    and they also demonstrated the profound disruption we will do
    to ourselves when faced with these catastrophic events.
        So need--if this were a crisis that were going to go away
    in another year, then I would say reorganization would be a
    fool's game. But we are talking about essentially, as I argue,
    a warfare we'll be conducting in the 21st century.
    Reorganization is going to be a part of that. People will be--
    people will be conservative. They'll be difficult. But part of
    the challenge is getting them to see that they are all pulling
    together toward the same end, which is providing the safety and
    security for the American people while still allowing us to
    connect and engage to that broader world out there.
        I think with somebody who is a first-year cabinet secretary
    advocating for them, and--that the prospects for that
    coordination are going to improve. But there's going to be some
    omelet-making. There's no question about that.
        Mr. Cummings. Now, we've heard several opinions as to some
    people say we need to--I think the President sees it as a very
    urgent matter, and I think a lot of people do. Others say well,
    let's--and it's been said here today, let's go slow and go
    careful. Do you think the folks who did their analysis for,
    say, the September 11th attack, when they see what has happened
    post September 11th--I mean, when you take all of that into
    consideration, do you see that--this to be a very urgent thing,
    or do you think in their eyes it's something that they would
    want to take advantage of before we got this together?
        Mr. Flynn. I think it's absolutely urgent that the U.S.
    Government come to grips with the profound challenges that
    homeland security present us, and that includes reorganization;
    one, because another event will happen. But, second, it will
    happen, and the American people are going to be much less
    forgiving of the government's inability to protect itself from
    it, and that will challenge the core legitimacy of the
    government. If it looks in the postmortem that we are still
    doing like we are right now, chatting in Long Beach and L.A.,
    where 44 percent of all the containers headed to the country
    come into, where we are chatting about who is going to pay the
    sentry to check an ID card and that's the state of homeland
    security 9 months into this, then I think the people are going
    to want to throw out the whole thing and start anew.
        So I think there is a real urgency because of the threat,
    but real urgency as well, because this is an issue of
    government legitimacy. Can we organize ourselves to deal with a
    new threat? We have a national security establishment that was
    built for an away game, to basically solve security problems
    water's edge out. The bad guys have changed the playbook; they
    have come here, and will continue to come here, and we have got
    to look at how we can organize ourselves to confront this new
    warfare.
        Mr. Cummings. When we heard a few weeks ago Vice President
    Cheney say that further attacks were inevitable and that there
    was not a whole lot we could do about it, do you think that
    statement would be much different if we were--we had this
    Office of Homeland Security--and I'm not trying to get you to
    speak for him; I'm just asking you your opinion.
        Mr. Flynn. Sure.
        Mr. Cummings. If it were intact and it was working and the
    coordination going on, I mean, do you--you see attacks, you
    just said that, coming in the future. Do you think we increase
    our ability to counter them through this effort? And, if so, to
    what degree, assuming we had it up and running at the max.
        Mr. Flynn. I think the heart of the issue is that, how much
    security is enough? That's what we are really wrestling with
    here and how much--how we organize ourselves to provide that
    security. I think the key is this threshold: That inevitably we
    will have incidents. This is--Americans were not perfectly
    secure prior to September 11th; they are not going to be
    perfectly secure post-September 11th. We will have incidents.
    The key is how to respond after that incident. If the
    conclusion is this was a result of a correctable breach in
    security versus the conclusion being the absence of security,
    then the Americans--the response by American people is much
    different.
        If the assumption is this was the result of a correctable
    breach in security, you'll do the analysis to fix the breach
    and get on with life. If the view is the absence of security,
    you'll shut the thing down and insist on--basically, you start
    anew. And that's where the terrorists' goal is in this and the
    military value, is get that profound disruption.
        So our objective I think is getting sufficient capability
    that, one, we can actually do a postmortem when an event
    happens, but second, demonstrate we have the capacity to repair
    breaches to security. And I think the organization that the
    President proposes gets us further down that pike. I worry very
    much that if an event happens very soon with the current
    infrastructure and we do the postmortem, then the American
    people are just going to be enraged at what they see.
        Mr. Cummings. Thank you very much.
        Mr. Souder. Congresswoman Schakowsky.
        Ms. Schakowsky. Thank you, Mr. Chairman.
        Mr. Flynn mentioned how--the importance of meeters and
    greeters being part of this whole security apparatus, but I'm
    concerned that meeters and greeters--particularly, I'm looking
    at the Immigration and Naturalization Service. I have a
    district that is rich with immigrants from all over the globe.
    It is kind of a gateway to the United States, the north side of
    Chicago and some of the suburban areas there. And about 80
    percent of the calls that come to my office deal with basically
    inefficiencies of the INS, dealing with the service aspects of
    it.
        And I am concerned that the overall message of including
    immigration functions such as deciding asylum cases or handling
    unaccompanied minors or processing citizenship, etc., becomes
    lost in an agency that has a new focus, and in the meantime, we
    have done a whole bunch of work that this House created
    actually eliminated the INS, put it in the Justice Department,
    separated the two functions; and now it looks like we are
    scrapping that idea and putting it into this new homeland
    security.
        I am concerned about these essentially non-security
    functions. The people who call me already are made to feel lots
    of times like criminals or terrorists when they are here
    legally and trying to get through the system and become
    citizens. So, I am concerned about this merging, and would like
    Mr.--is it Kruhm?--to respond to that.
        Mr. Kruhm. I think the issue for INS is dealing with the
    numbers. At a minimum, every year they touch in some way, form
    or manner over 500 million people. It is just an incredible
    job. What people don't understand is when we extend a benefit
    to a whole new group of people, in a lot of cases people who
    have gotten here by either fraud coming through the ports of
    entry, or, more likely, by getting here illegally. We extend a
    benefit to those people, and they eventually get a legal status
    in this country; then they can apply for benefits for family
    members. And it's like reading the Book of Exodus out of the
    Bible.
        Ms. Schakowsky. That's my whole problem with it. There are
    lots of people here who are here perfectly legally and who are
    finding that the INS can't handle--it takes 4 years to get an
    answer and to get a date for their swearing in ceremony, etc.
        And it's precisely that sort of attitude that views many of
    these legal immigrants who come here for a better life. And
    that's what America is about, and that presumably is what we
    are fighting for here. I am concerned that function gets lost.
    I understand what you are saying; there are people who come
    here illegally; we need to address that issue. But I am talking
    about the service function of the INS now being in an agency
    that directs itself to security and law enforcement, etc.
        Mr. Kruhm. Just, if I may respond very quickly. When INS
    sets its priorities and parameters and its workload for the
    future, it's based on X number of cases to deal with. And when
    the--when an unknown additional group gets thrown on them, the
    resources don't flow with that or flow as quickly. And so it
    immediately creates backlogs, and these backlogs fester and
    continue on and on. We need a legal system of immigration. We
    need that rich heritage to remain with this country. But the
    adverse impact of illegal immigration or illegal migration is
    enormous. It creates a whole new culture in vast areas of our
    borders, and this whole new culture is exacerbating. It's
    adding to the load of INS, and on a daily, minute-by-minute
    basis, they get further and further behind. And, in my opinion,
    our government needs to address this issue. It needs to set
    what legal immigration is and allow that to happen, and no one
    else gets legal status, no matter how they get here.
        In addition to that, INS, even if they do arrest somebody
    and run them into the deportation process and a final order of
    deportation is issued, nothing happens. There are--and I don't
    have the exact figure, but I know somewhere between 350- and
    375,000 final orders of deportation to remove people from the
    United States, and no one is going after them. It just
    compounds itself. It's one on top of another on top of another.
    And when you have these things occurring, and then--pardon me--
    but if Congress or the administration extends a benefit, gives
    authorized employment or gives an amnesty program, then the
    people waiting, then the host countries or the source countries
    see a reason why they should also try the illegal system
    because the end result is the same. And if you look at what is
    occurring on the border--and in my prepared text I talk about
    criminal enterprise zones. You have kids who are going to
    civics class in high school in the daytime and smuggling at
    night. And they start off with smuggling migrants; they
    graduate to smuggling drugs, and they will smuggle anything for
    money. And this whole issue of illegal migration needs to be
    addressed because it just is so intertwined.
        Ms. Schakowsky. Let me just say, your answer is compounding
    my concern about this. The President of the United States
    believes that those two functions should be separated, service
    and the law enforcement aspect. I think it needs to, in order
    to serve well the many immigrants who legally come to embrace
    this country for what it is. Thank you.
        Mr. Souder. Thank you. If it is OK with the other Members,
    what I think I will do is go to 10 minutes to the next round;
    so, if you want to get into a question, we can go a little
    longer. I have got a series of things.
        One is that, I want to ask you this general question, and
    then I'm going to immediately move to another one. But, if you
    could get back to us--with any suggestions you have on this--by
    Friday. If there are parts in the homeland--let me first say.
    What's unusual about the Government Reform Committee and the
    way this is going to be referred in oversight is that we have
    cross-jurisdictional concerns. Every other subcommittee can
    only deal with the things inside their committee; so, Judiciary
    will deal with judiciary; Agriculture will deal with
    agriculture, Energy and Commerce will deal with energy and
    commerce. But we can offer amendments to the full bill that
    have to do with anything when it comes to this committee.
        So, if there are parts in this homeland security bill that
    you think we ought to debate taking out or things that we ought
    to debate putting in, would you clarify that for me? I am
    interested and I presume other Members would be interested,
    based on your experience.
        Now, let me give you one example. And I will continue with
    Mr. Kruhm. Are we saying your name correctly?
        Mr. Kruhm. Yes, sir.
        Mr. Souder. Is that pronounced right?
        One of the things that every Member of Congress deals with
    is with our embassies, because on legal immigration questions,
    we deal with the embassy, even if we started dealing with the
    INS in a regional office. In my case, it might be the Omaha
    office that my staff person deals with. Why, if we are trying
    to get control over tracking terrorists and/or other illegals
    who are dealing with criminal trafficking, wouldn't that first
    desk clearance be included under this agency?
        Mr. Kruhm. The immigration process requires a visa to come
    in the United States. And there is a very important role by the
    U.S. State Department. So, it's for--in order for a person to
    come here legally, they go through a review process--it's a
    marriage of both justice and State--and obtaining the visa.
    They bring the visa with them when they come to the port of
    entry, and then they are processed by the Immigration and
    Naturalization Service. So--and when you are looking at
    Homeland Security, you know, I looked at the proposal and they
    said this agency is in, this agency is out.
        When you look at all of government that has--that touches
    homeland security in some way--as I was talking to one of the
    other panel members before we came in, our Federal prison
    systems are going to have to be an incredible source of
    intelligence. Where do they fit in this process? Who brings
    them in? Who consults with them? Who ensures that flow of
    intelligence comes in to where it has to go and is processed
    and acted on if necessary? So, it is an incredible task, but--
    and what we need to do is be concerned whether we create a
    large ponderous organization, or one that is very agile.
        Mr. Souder. I want to get back to this, because it is an
    example of a specific thing that I don't understand. I
    understand that we have a huge intelligence question here. In
    other words, we have attempted to put some of the agencies
    together, but we have actually left out the biggest part of
    intelligence; and, intelligence is critical when you are with
    the Customs agents or INS or Border Patrol agent at an airport
    or wherever you are at. If you don't have the intelligence, the
    whole system breaks down. But we are going to apparently have
    not all that consolidated. But what I don't understand is if
    you are checking, as I understand, at the border someone who is
    coming through, the first step is, do they have a visa? Right?
        Mr. Kruhm. They have to have a visa in order to come into
    the country as an immigrant or as a visitor. Now, there are
    some countries that----
        Mr. Souder. Then why wouldn't that be in this department?
        Mr. Kruhm. You are going to have to ask someone over at the
    White House.
        Mr. Souder. Do you have--Dr. Flynn.
        Mr. Flynn. Yes. I am strongly of the view that Consulate
    Affairs should be included in this precisely because of that
    role. You know, the average consulate official is spending
    under a minute reviewing an application, and then here we face
    mounds of time and expense trying to sort things out after the
    fact. It is the orphan of the State Department, which is the
    orphan of the National Security Establishment. So, it is not
    a--particularly robust capability. It needs to be. And that
    would be one player that I see as a glaring omission that
    should be included in this.
        Mr. Souder. I mean, and all of us have visited embassies
    and we appreciate how hard the people are working through. I
    mean, they are lined up early in the morning, they stand there
    at the embassy; it's often the junior people at the embassy
    that are standing there trying to sort out whether the
    different people have legitimate forms or not. And we also--we
    are not going to resolve in this bill this legal/illegal
    question, but we need to do that, because I think almost all
    Members of Congress have this frustration that we get involved
    trying to argue whether somebody can come over and visit for a
    wedding when we have millions of people coming in illegally.
        And it's almost like the INS's position is: Since we can't
    do anything about this over here, we are going to really come
    down hard on here because it's a real person we can actually
    talk to, because we can't figure out how to deal with the
    other. And then politically and economically in this country,
    clearly we are going to continue to be inconsistent on our--if
    we--how we sort through those deportations is going to be a
    long-term challenge, because if we deported everybody we would
    collapse our economy; on the other hand, by not doing it, we
    are encouraging more people to come. We are going to need--the
    President started to address that; September 11th set us back.
    I think you have raised some questions today that long-term we
    have to deal with.
        I want to raise in another line here with Mr. Marshall, if
    I can. The FBI has announced that basically they are pulling
    out of drug enforcement; that goes over to DEA now. What
    precisely does that mean for DEA? What was FBI doing that DEA
    wasn't doing? Presumably, I would hope, not a lot of overlap,
    but I presume there was some overlap. What would be some
    differences? It looked to me like giving them multiple tasks
    that we had already given the FBI, and they were drowning from
    everything from S& Ls to, as was alluded to here, to other
    types of things.
        We already had the FBI pretty well loaded up, and they
    seemed to be, as you boosted the number at DEA regional offices
    and task forces, letting DEA--for example, in Indiana, DEA took
    over the lead in the task forces, which, a few years ago,
    everybody would have been scrambling to be the head of a task
    force; and, that the FBI might have had some of this occurring
    already.
        Could you give us a concrete example of how you see this
    playing through? Does this mean more DEA agents in the United
    States as opposed to overseas a disproportionate amount of
    requests in that area? Intelligence? Is it that you kicked over
    in some cases, if it became a larger systemwide thing, you
    worked at busting and bringing them down, and then the FBI
    tried to bring the networking together, which was part of the
    theory of organized crime? How do you see this, and what do we
    need to be looking at for what is DEA going to need to pick up
    the FBI functions?
        Mr. Marshall. Well, let me start out by saying that the
    theoretical concept and framework for drug enforcement in our
    country was, and still is, the Presidential Reorganization Plan
    Number Two, which created DEA, and made DEA the lead single
    mission agency in the area of drug enforcement. Now, over the
    years, we came to see very clearly that there are many other
    types of crime, and now terrorism, that relate in some lesser
    or greater fashion to drug trafficking.
        In the particular arena of the FBI, they were dealing with
    crimes of all sorts, organized crime, many other types of
    crime. And basically you look at a reality--the reality of a
    situation is that crime breeds crime; and, where you find one
    type of crime, you often find some other type of crime.
        So, I think the difference between the DEA and the FBI and
    many of the other agencies that are in the drug arena is that
    the DEA has the single focus and the lead role in drug
    enforcement. I think that you look at the other agencies as
    having a primary mission with the mission of drugs as probably
    an ancillary thing that they focus on in the context of
    pursuing their other primary missions.
        Now, in reality, there was a great deal of cooperation,
    continues to be a great deal of cooperation between DEA and the
    FBI and a lot of other agencies as well, for that matter.
        But I think as this thing plays out, Mr. Chairman, what we
    need to ensure is that we have a framework--and a good model
    would be that Reorganization Plan No. Two--we have a framework
    which allows for DEA to continue in its role and even enhance
    its role, I would say, as the lead anti-drug agency.
        I would also comment that as we look to the FBI diminishing
    their role in drug enforcement, if the same thing could happen
    in Customs or the Coast Guard and many of the over agencies
    that are involved in some way in drug enforcement, as those
    resources may diminish to go after more and more of the
    homeland security mission, I believe that those resources
    should have a corresponding issue within DEA. And, if the issue
    is organized crime, there should be a corresponding increase
    there; if the increase is weapons, there should be a
    corresponding increase there. Because all of the crime and
    drugs and violence and terrorism are so intricately intertwined
    that if you don't focus on a total law enforcement picture and
    fight a total law enforcement struggle against crime in
    general, then you are not going to be able to make too much
    impact on the terrorism issue as well.
        Mr. Souder. Mr. Cummings.
        Mr. Cummings. I just want to followup on that. I want to
    just bring it to a local level so I can set the framework for a
    question, Mr. Marshall.
        In Baltimore, what we saw right around September 11th is
    that there was a lot of emphasis placed on security, trying to
    guard outports. You know, we were just kind of up in the air.
    Nobody knew what to do, really. And what we also saw is, in a
    short period of time, our murder rates skyrocketed in a short
    period of time right around that time. And I guess, you know,
    when I look at--I think all of us agree, we have got to do
    something about terrorism, we have got to deal with this. And I
    think the entire Congress feels very strongly about that.
        But at the same time, as you kind of--I think all of you
    have heard from us in our questions, in our statements, one of
    the fears is that while we are fighting terrorism--which we
    must do--how do we make sure that the domestic front, which we
    are supposedly protecting--and this is what I hear from my
    constituents, they want to fight terrorism. But they keep
    hearing this stuff like what the chairman just asked you about.
    And they have got drugs deep into their neighborhoods. And
    they'll say, yeah, we are really concerned about folks flying
    planes into buildings, but at the same time we are fighting--in
    their words--terror every day, where people, young people are
    being shot down and drugs destroying their neighborhoods.
        So they see this every day. They see New York--and they
    consider it very serious, but they see New York as something
    that happened; it was very catastrophic. They feel bad about
    it. But then they say, right here where we live, we deal with
    it every day destroying our children.
        And so I guess what I'm trying to go to, Mr. Marshall, is
    when we move those--we start putting that emphasis on
    terrorism. And some of you all--others may want to help me with
    this one.
        But let's say bringing all of this stuff under this
    homeland security department. Do we--do we, in fact, minimize
    the possibility or probability that we don't truly cover the
    domestic piece the way we have been? And, if that is so, then
    how do we, in structuring this office, do we make sure? And it
    may have to be an individual--you know, each one of you, the
    places that you represented, may be an individual agency kind
    of thing. But how do we make sure that doesn't happen? Because
    I'm telling you, I think a lot of the American people are
    really struggling with this whole thing, because they worry
    about their day-to-day situation, but they are also worried
    about terrorism.
        So, why don't you take a stab at that.
        Mr. Marshall. I think you are right on target, Mr.
    Cummings. In fact, with the comments that you just had, I think
    you could have written 15 or 20 percent of the statement that I
    provided to this committee.
        You have to look at, I think, terrorism on a couple of
    different planes. And I believe it was Mr. Flynn, in either his
    statement or one of the questions who referred to catastrophic
    terrorism. And we have to address certainly terrorism on that
    level, and that is the most visible, I think it is the most
    perhaps psychologically damaging to the Nation as a whole. But
    then you have this whole other level of terrorism going on in
    our country, and it's gone on for a long, long time, and that
    is, criminals who impose terrorism on their very neighborhoods.
        I went to--here, not too long ago when I was still
    administrator of DEA, I went to a neighborhood called the
    Badlands in Philadelphia. And the things that I saw there just
    absolutely stunned me. I could not imagine in my--I mean, in my
    worst nightmare I could not imagine raising my family in
    circumstances like that, where good and decent people were
    literally held prisoner in their own home, afraid to walk the
    street, afraid to go to the corner grocery store, afraid to go
    out to dinner or to a movie, those kinds of things.
        And it seems to me, and in the months after September 11th,
    that kind of terrorism is every bit as real as the
    macroterrorism or the catastrophic terrorism that we are
    seeing. And the terror that is imposed upon an elderly woman
    who is prisoner in her own home and can't go out on the
    sidewalk for fear of getting mugged is every bit as real to
    those people in those neighborhoods as the World Trade Center
    and the Pentagon images are to the country as a whole.
        Now, we need to look at that and fight the terrorism on
    both planes, and we have, I think, for a long time been
    reluctant to admit that drug crime and violent crime is
    terrorism, but in fact it is. And out of the proper duty to our
    citizens, we have to fight that. But as a more practical
    matter, in fighting that kind of terrorism, we also are able to
    impact the catastrophic terrorism, because, after all, it is
    much of what goes on in drug consumption neighborhoods and
    venues that fuels much of the catastrophic terrorism that we
    see, and in the future, will fuel it to a much greater degree
    than we see now.
        Mr. Cummings. But does this legislation do that? In other
    words, how does this--how does this bring everything under the
    Homeland Security Department? How does it--how do we make sure
    that we still strike that balance?
        Let me tell you what happens in my neighborhood. And I live
    in the inner city. And I can tell you, when they heard about--
    when they heard what some of these--the bad guys heard about
    September 11th--it's just like when people see like the thing
    that happened in Watts a few years ago, when they take
    advantage of a situation. But when they heard that we were
    trying to secure the city, they said, oh, oh. This is the time.
    The policemen are now--they have got to be--our resources are
    limited and so now they are doing the security thing. And so
    the next thing--you know, I think that's why the murder rate
    goes up. And that's just my theory.
        But I'm just wondering, how do we make sure that we, in
    crafting this, don't send that same message out that we have
    now sort of gotten away from the domestic peace and
    concentrated and--you know what I'm trying to say. And we are
    just concentrating on the catastrophic but not concentrating on
    the other stuff? Because drugs is a major deal.
        Mr. Marshall. Congressman, here is how I think we do it. I
    think the reorganization is, and properly so, constructed to
    deal more with the catastrophic terrorism events. But, as I
    said in my verbal statement opening and I elaborated on my
    written, in my written statement, we have to, at the same time,
    ensure that we have a continued robust law enforcement, if not
    an increased--and my vote would be for an increased--law
    enforcement capability.
        And, at the same time, we are addressing the catastrophic
    issues, we have to be addressing crime and drugs and violence
    in cities and towns and neighborhoods and schools throughout
    this country. And if we don't, then ultimately we are going to
    fail on the catastrophic terrorism issue as well, not only
    because it's the right thing to do and because it is terrorism
    in our neighborhoods, but also ultimately, it feeds the
    catastrophic terrorism. And let's not overlook the fact that if
    we have these criminal groups that are continued to--allowed to
    continue to operate, that becomes, just as Doug Kruhm referred
    to the prison systems, those crime areas and those people that
    are doing that crime, they are going to become targets of
    recruitment for our external enemies, the catastrophic
    terrorists. So, we have to address it all just as aggressively
    one as the other.
        Mr. Cummings. Mr. Flynn, did you have something? I thought
    you were going to jump out of your seat.
        Mr. Flynn. Well, let me just, really, you know, very much
    in sympathy with the views that you have laid out here. For me,
    what's been frustrating over the last 10 years watching the
    crime dimensions percolate up, none of these agencies have run
    real well at the budgetary trough over the last decade. I mean,
    INS has been plugged up, but basically other agencies are
    barely holding their own while the bad guys got much more
    capable. And the fact is, but by not doing well what they have
    been given to do, they have created a fertile climate that very
    evil people with much more malicious intent can exploit.
        And so now to suddenly just focus on going to terrorism as
    the source is going to miss that reality. We have got to walk
    and chew gum at the same time. We have got to deal with these
    issues in terms of the capacity. The administration has talked
    about coordination and communication, but there are three Cs;
    capacity is the third one. These agents--this is not going to
    come cheap. It's not just getting together and getting them to
    sing Kumbaya. It is going to require resources so they can do
    their traditional jobs well, and that allows them to build the
    relationships with the community.
        So those folks who have eyes and ears out there say, hey,
    there is something here that just don't look right. Or it is
    going to allow, like in the Coast Guard, it's dealing with the
    fishermen and deputizing them while they're out there. Hey, you
    see something going on out there fishing, we can't patrol
    everywhere. Now, why does a fisherman talk to a Coast Guard?
    Because we rescue them once in a while, and because we regulate
    them.
        The same thing is true with Customs' relationship to trade
    and so forth. So, if you try to strip away their domestic
    capacity in order to do counterterrorism, is form over
    substance. It is the substantive day-to-day job they do that is
    going to give us the capacity on both the needs the American
    people have--legitimate needs--plus deal with the terrorist
    threat. That's going to be the key to navigating this new
    department.
        Mr. Kramek. We are missing a couple of pieces here in
    response to Mr. Cummings' question and to the chairman's
    question. For the past 6 years, the Department of Defense has
    recognized the type of warfare that Dr. Flynn spoke of. It is
    non-traditional warfare. If you were to read the joint military
    strategy that some years ago General Shalicashfeli put together
    and is now still part of the national strategy, it is not
    classified; it is published. It recognizes a non-traditional
    warfare and terrorism were the biggest ones as the type of
    warfare for the future.
        And the Department of Defense has taken a lot of--paid a
    lot of attention to that. They have paid a lot of attention to
    it in the defense intelligence agency, DIA. Nobody has
    mentioned that here. But DIA, NSA, CIA run together in the
    national assets that we have at our disposal. And then we have
    domestic law enforcement agencies that sometimes receive
    actionable intelligence from that type of thing.
        In terms of prospective, how are we going to do it all, the
    Department of Defense budget defense, defense is standing up a
    new thing called of Defense of North America and Defense of the
    Homeland. Not Homeland Security, but Homeland Defense. Defense
    budget's grown to $360 billion. This new agency is 10 percent
    of that. Ten billion--it's $36 billion, thereabouts. And those
    budgets, we all testified today, are already--the budgets of
    the existing agencies that are insufficient to do what they
    have to do now.
        In essence, no new resources have been put to this new
    homeland defense agency. Rather, no resources have been put to
    it, and people have made statements, written pieces, and gone
    on the record by saying the synergies and savings they are
    going to get from putting all these agencies together is going
    to be enough to improve the situation. And I don't subscribe to
    that one bit.
        So we have grown Defense to $360 billion. This budget is
    $36 billion from a bunch of agencies that are underfunded to
    begin with. Mr. Cummings wants to know what we do when we are
    all turning 25 percent toward a new mission that's coming from
    the other things that are not resourced properly now.
        We are going to have to put some money where our intention
    is to make sure that this is done right. If we are going to
    reorganize, find out what the goals are, the objectives are,
    how we are going to measure it, and then fund it properly to do
    it. It's not going to cost $360 billion, but it's going to cost
    more than $36 billion, because that's just the existing budgets
    now.
        Otherwise, as Dr. Flynn relates, someone is going to be
    successful at finding our soft underbelly. We are talking about
    moving blocks around on the playing board without increasing
    the number of blocks. We need to increase the number of blocks
    that we have; we will not be successful and people will
    continue to take advantage of us.
        One final comment on intelligence. My colleagues at the
    table and I worked hard over almost a 10-year period to try to
    do something about intelligence in law enforcement related to
    the war on drugs. I would tell you that over 10 years ago, 90
    percent of what was done in drug interdiction was based on
    border security, trying to be in the right place at the right
    time. With the proper application of actionable intelligence, I
    would tell you that, in my opinion--and certainly Donny and Sam
    add to this or correct me--perhaps 85 percent of the actions
    that are taken in the drug interdiction now are based on some
    sort of intelligence and knowledge.
        And intelligence centers have been set up using national
    assets from the Department of Defense, using the DEA's assets,
    using that from Customs, using that from NSA, CIA, FBI into
    intelligence centers that fuse the intelligence--and this is
    the idea of this new agency, supposedly--and then providing
    those law enforcement officials that are required to take
    action, actionable information and tactical information so law
    enforcement can take place. Unless we use every aspect of the
    intelligence community, both international, domestic, and
    defense, the DIA, we are selling ourselves short.
        I would tell you some of these agencies already have set up
    quite robust counterterrorism cells. I would also tell you,
    because some of the law enforcement agencies aren't subscribers
    to the National System, that they won't know about it unless
    they are told, and that methods and sources have to be scrubbed
    to protect agents, which is always a major issue.
        So just talking about the FBI, my point is, is
    insufficient. We need to talk about the entire intelligence
    system for the United States, if in fact, this is the new
    warfare that we should be protecting ourselves against at least
    for the next 20 years, if not for this century, as Dr. Flynn
    relates. Thank you.
        Mr. Souder. Ms. Schakowsky.
        Ms. Schakowsky. Thank you, all of you, for your very
    important input. I really appreciate that.
        Dr. Flynn talked about the importance of doing postmortems.
    You were talking about the difference between breaches of
    security and total absence of security. And then you gave an
    example of, who will inspect containers? And, that if we are
    still here months or years from now questioning whether who is
    going to--you know, who is really inspecting containers and we
    are not, then we have failed in our mission.
        And then Mr.--is it Nunez?--was saying that just putting
    everybody together without changing the agencies themselves is
    not necessarily going to guarantee either better law
    enforcement, drug interdiction, or anti-terrorism activities.
    And I'm not quite sure exactly what that means, but I think I'm
    getting the gist of some of it here.
        My concern is, should we be making first things--first out
    of the gate a laundry list of things like, are we inspecting
    containers? I mean, I am just wondering if we are--I'm trying
    to think--if my house were robbed, I think the first thing I
    would do is try and figure out if I need new locks on the doors
    and a security system, and then figure out if it's a
    neighborhood watch and if we have to bring together the police
    and, you know, the more structural things.
        I am wondering if we have done a postmortem that looks at
    very--in a clear-eyed way, what were the holes? Do we need to
    add more resources to doing those functions?
        You know, I'm certainly not against the Department of
    Homeland Defense, but I'm wondering if we, first of all, don't
    assess exactly what went wrong in a very clear way, if that
    isn't the first thing that we need to do, and maybe do address
    those things first.
        So, whoever wants to answer them. Mr. Nunez.
        Mr. Nunez. Can I start with a brief response? I'm sure that
    Customs and INS have all kinds of figures, any figures you want
    on how many containers come and what percentage of them gets
    searched and what the criteria are. It's all routine. We know
    that. I mean, I don't know that I can tell you off the top of
    my head, but I think that information is available. But let me
    give you an example from what I have seen for over 25 years, I
    guess.
        There are people on the border, inspectors from Customs,
    INS, there's Border Patrol agents, some agriculture inspectors
    that are there. They are doing their job. But they have been
    told for the last 25 years that it is more important to keep
    the traffic moving than it is to find drug dealers or
    terrorists or illegal aliens.
        The average time to inspect a vehicle in San Ysidro, which
    is the largest border crossing in the world, is 45 seconds.
    Since September 11th, the inspectors have slowed things down
    and started spending more time inspecting every car and every
    person coming across. That's good. It's good for law
    enforcement. It's good for security of the country. It's good
    as an anti-drug message.
        I mean, the caseload in the Federal court in San Diego has
    dropped precipitously because the drug dealers aren't stupid.
    They know that there's greater scrutiny at the ports of entry.
    So that's good too.
        So in some cases, we just need to let our inspectors do
    their job unimpeded by, you know, the industries that just want
    the goods to come in as quickly as possible, as few questions
    being asked as possible. It doesn't necessarily. Now if you
    added more inspectors, obviously you could speed that process
    up a little bit; inspect more containers. Instead of looking in
    the trunk of every 100th car, you could look in 2 out of 100.
        You know, you could do a lot with a relatively modest
    investment in inspectors. But it has always been a battle on
    the border between facilitating trade and commerce and the flow
    of people, immigrants, and the inspection of visas and, you
    know the airlines used to call every summer when I was at
    Treasury and complain about how long it took people to clear
    Customs and INS. You know, they take a 10-hour airplane flight,
    they land in the United States, and then they have to stand in
    line for 4 hours.
        Well, you know, sometimes it takes as long as it takes. And
    I think now, since September 11th, we're more aware of the fact
    that prudence may be more important than facilitating some of
    this cross-border activity. There's a cost to industry. There's
    no question about it. There's a cost and inconvenience. I mean
    people who want to go down to Tijuana to play golf or have
    lunch or have a beer, they're not going to go as often. People
    from Mexico who come into the United States to buy goods at
    Wal-Mart in San Diego are not going to make as many trips
    anymore, so it has an effect on commerce. So we have to be
    willing to balance those competing problems.
        Mr. Banks. Indisputably, we need more resources in order to
    contend with all of this. But quite frankly, we're not going to
    work our way out of this with brute force. As Mr. Nunez says,
    we know some of those numbers. A container drops off a vessel
    every 16 seconds in Long Beach. There is no way you can inspect
    all of those containers. They only examine a fraction of the
    containers that come in. But the real issue comes down is are
    you examining the right ones? Are you using the data sources
    and the knowledge management and the technologies to really
    focus in on the ones that you want to go after.
        So it's one thing for resources. It's another thing to try
    to deal with some of this with greater scrutiny. But one of the
    things that has to happen as a process, at least in my
    estimation, is we all need to rethink this paradigm a little
    bit. We need to build the information technology tools in order
    to be able to make sure if we're only checking 2 percent,
    absolutely the right 2 percent. What you need to know is you
    need to know who touched that freight? Who owned that freight?
    Who shipped that freight? Who transported that freight, and all
    the individual places along the line in that international
    supply chain. That is what you need to know.
        Customs and all of the other agencies need that information
    in order to be able to identify the high risk potential, high
    risk parties that are involved in that process. But some of
    this is also building the partnerships with industry. Industry,
    the international trade community, the international business
    community, has spent billions in improving what they call their
    supply chain management systems. They want total visibility
    from the time of manufacture all the time to the point that
    they sell it to the ultimate consumer. They know who touches
    it. They know when it's coming. They know who manufactured it
    and what we also need is we need to build some partnerships
    with those people to leverage some visibility into their
    international supply systems.
        The government doesn't have to spend the money to build
    those information systems. Industry has them. What we've got to
    do is be able to reach into some of that critical information,
    build those partnerships and where necessary, even legislate
    requirements so they provide some of that information to us to
    be able to do a better job. We need to rethink all of this
    process.
        Is it correct that we should be doing it at our borders?
    Commissioner Bonner says you inspect a nuke in a box at our
    border, it's too late. What we need to do is we need to push
    our borders outward. We need to start looking and providing
    these large x-ray systems and large gamma ray systems so that
    was we start doing checks, even as it's overseas before it
    departs for the United States.
        We need to be able to select what are our high risks
    targets before they hit the water on their way to the United
    States. That's one of the things that we need to do. So I don't
    disagree with everyone here that we've got--there needs to be
    more resources. There needs to be more focus brought to bear on
    this exercise. But we also need to sit down and we need to
    force everybody to go back and rethink how we're doing business
    so that we do business a smart way.
        Ms. Schakowsky. Thank you.
        Mr. Souder. I have some specific questions I'm going to try
    to go through here, and then I want to make this open-ended
    that if any of you who want to submit written comments on
    anything you heard today in whatever detail you want, we will
    go through them. We are crashing hard and every question you
    answer raises some more. But there are a couple I want to zero
    in. What do you think, Admiral Kramek, of one of the things
    that is been floated out, vis-a-vis the Coast Guard that
    Chairman Young is talking about doing in his committee is
    fixing the percent?
        Obviously, I don't favor fixing the percents because, in
    fact, we're plussing up Homeland Security. If you fix the
    percents, you could, in fact, increase the fisheries proportion
    as you increase the budget. One of the things that I've thought
    about is a hold harmless provision, possibly at 90 percent of
    current saying there will be some efficiencies.
        What's your reaction to some kind of provision like that
    would force Congress then to say there is a hold harmless
    provision unless you explicitly waiver reductions because of a
    risk? Let me give you one other specific piece of information.
    Not counting the supplemental, while drug interdiction dropped
    from 18 to 13 percent, the amount of dollars didn't drop that
    same percent because there was a slight increase in the budget.
    In fact, with the supplemental, it might be very similar at 13
    percent. But maritime safety dropped from 456 to 223, so
    clearly, even with the supplemental maritime safety took a big
    hit in the budget, that under a hold harmless provision at 90
    percent, that would go up and we would either have to address
    the maritime security or have a specific waiver and transfer
    from fisheries, excuse me, from maritime safety to that, in
    other words, acknowledge what we're doing. Do you have other
    suggestions of what we might do in the overriding bill to make
    sure that we clarify what exactly we're doing when we make
    these authorizing statements?
        Admiral Kramek. Yes, I do, Mr. Chairman because we have a
    system of government that should properly take care of that,
    and it's especially meted out here in the House of
    Representatives and in the Senate with the both authorization
    and appropriation hearings that take place. And by that, I mean
    performance of standards have been set for all agencies in
    government to do what the executive branch, the American people
    and the Congress have tasked them to do.
        Search and rescue is a good example. Performance standards
    have been set that any search and rescue case called in should
    be responded to in 30 minutes. 90 percent of the lives shall be
    saved and enough resources shall be provided in the maritime
    area for the Coast Guard to do that. There's no performance
    standards set for this new agency. And so it's hard to tell how
    much more we need.
        I would agree with Sam that--Sam Banks, that we can
    certainly work smarter. But you cannot, in my opinion, set a
    hold harmless clause and say, well, everybody's got to be
    resourced at 90 percent. In the numbers that are used, the
    numbers that we see in the media and everywhere else compare
    the 2002 enacted budget, to the 2003 request, which hasn't been
    approved yet and I understand it's put on the back burner while
    you deal with emergency supplemental No. 2.
        So, I mean, we're dealing with a 2003 request that I don't
    think has even been heard in the context of the new Homeland
    Security department and, in fact, needs to be certainly acted
    on this summer sometime. But those numbers are not real to me
    because all they have done is re-rack some moneys, and we have
    to look at the 2003 request, not what was enacted with the
    supplemental. Supplementals are there for particular reasons at
    particular times.
        The budgets put together based on performance standards for
    every mission on what the executive branch and Congress have
    decided should be performance of a particular agency. They
    should be resourced to those performance standards, and right
    now we're borrowing from Peter to pay Paul.
        Mr. Souder. As a practical matter you have been through
    this budget. That isn't going to happen. What we're going to
    have happen here is that authorizing is going to be done on the
    appropriations bill or unauthorized appropriations, and
    therefore, it comes down to who's paying attention and who's
    got the most leverage at the end if we don't do it in this
    homeland security bill.
        Admiral Kramek. Now, it maybe--it may be, I remember one
    hearing not too long ago when I was asked how many people would
    perish at see if we took away 10 percent of the search and
    rescue money from the Coast Guard and put it toward drug
    interdiction. And so I told him exactly. I think it was 1,500
    people. And the answer from Congress is that even one is
    unacceptable, and so that funding was restored, and so those
    performance questions we need to ask ourselves. How many
    foreign flag vessels do we want to allow to come into our
    harbors that are not properly inspected under the Marine Safety
    Program?
        By the way, every passenger vessel that visits the United
    States is a foreign flag vessel, every single one, carrying 6
    million U.S. citizen passengers a year. How many of those do we
    want to cut back on the safety inspections, the liquid natural
    gas ships going to places like Cove Point which, is supposed to
    reopen up in, oil tankers? How much do we want to cut back on
    all that and to put at risk other things that we're all
    responsible for, whether it be the marine environment or the
    safety of the vessels or hazardous materials.
        I think the answer for the American public was we don't
    want to cut back on any of that, but we want you folks to take
    care of Homeland Security, too. So, what's that going to cost?
    The agencies all have a number. It's all in their budget. It's
    not very, very much more than what was originally asked for
    before September 11th. So my pitch, again, is let's look at the
    Delta on what it takes to do Homeland Security, if we're
    serious about it in this country let's provide it so we can
    take care of the other things that you and Mr. Cummings are
    concerned about, your constituents are concerned about that we
    still need to do.
        Mr. Souder. Mr. Banks and Mr. Nunez, one other category,
    let me talk a little bit about Treasury. That in the Department
    of Homeland Security, we already don't have ATF, which is left
    over in Treasury. And what is your reaction, first, Mr. Banks
    then Mr. Nunez, of why shouldn't some of the financial missions
    of Customs be consolidated into and kept in Treasury, combined
    with ATF and some of the others? In other words, money
    laundering is a critical function here partly--well, let me
    first ask, why shouldn't the financial services be left over
    and tariff functions, financial missions money laundering be
    combined over in Treasury as opposed to in this agency?
        Mr. Banks. OK. Thank you, Mr. Chairman. All the money
    belongs in the Treasury. But quite frankly the money laundering
    enforcement issues, if you take a look at the primary
    investigative tool they use to even track down some of the al
    Qaeda network, was all money laundering investigations. If you
    take a look at where DEA works on the narcotics, it's heavily
    engaged in money laundering. What's driving all this
    international criminal enterprise that Dr. Flynn's talked about
    is money to some extent and money laundering. I think it would
    be a serious mistake not to have a money laundering component
    within that Office of Homeland Security.
        Mr. Souder. Let me interrupt you a second and get back,
    because it's not compelling to argue that money laundering is
    one of the primary ways we catch bad guys. Obviously that is
    true. But under that argument, we would put DEA in, we would
    put ATF in, and we would move it. You made an earlier argument
    that we shouldn't break up Customs. Could you separate how, if
    we started to separate all--because I've wondered a long time
    ago why money laundering operations aren't consolidated more.
    What would it do as a practical matter inside Customs if you
    tried to separate money laundering?
        Mr. Banks. I think you--again, what you would take away
    from the investigators that are trying to do the money
    laundering is the inside knowledge they need to have in terms
    of what's happening within trade. What you've got is the trade
    experts that know all of these multi national corporations,
    they know the corporate structure, they know the ownership of
    those organizations.
        That is absolutely fundamental to the investigators that
    are trying to do this job. They actually see the flow, and even
    when you get into the black market issue, they see the flow of
    illegal goods that are basically the outgrowth of money
    laundering. So that is where I get nervous about the
    separation. Do all the of the money laundering responsibilities
    have to be centralized anywhere? I don't know if that is true.
    I guess what I'm suggesting to you is I think that there is a
    money laundering component that should be part of the Homeland
    Security process.
        Mr. Souder. Are there any more money laundering things
    elsewhere that would relate directly to homeland security that
    you would put into this department?
        Mr. Banks. Good question. I'd have to think about that a
    little bit, Mr. Chairman.
        Mr. Souder. Will you chew on that a little bit because if
    we're going to leave--there should be a primary place where
    this is done and then there may be secondary.
        Mr. Nunez.
        Mr. Nunez. Yes, Mr. Chairman, first of all, I agree also
    that--I think I agree, that Treasury needs to maintain some
    sort of investigative function within the Treasury Department.
    One of my predecessors, several years before I got there, had
    proposed a plan to consolidate Treasury law enforcement into
    what would, for lack of a better phrase, be called the Treasury
    Bureau of Investigation, multiple agencies, where all the
    investigators from Customs, IRS, Secret Service, ATF whoever
    would be involved in one bureau focusing on all the missions of
    the Treasury Department. And they would be responsive and
    supportive of the underlying structure.
        That plan never advanced. But I happen to think that it was
    a good plan when it was proposed and, you know, circumstances
    never developed to allow it to go forward. But I think it
    deserves some study at this point. You could take all of the
    financial crimes investigations, if you will, done now by
    Treasury, consolidate them. I don't think it makes sense to
    move secret service out of Treasury into Homeland Security if
    you're going to leave the FBI out. I mean, the secret services
    role in terrorism is pretty limited. I mean, certainly they
    have an interest in the intelligence. They need to protect
    their protectees, but they don't have to be in Homeland
    Security to benefit from that information.
        One of your specific questions, in 1989 we, Treasury
    created FINCEN. Specific purpose was to analyze money
    laundering trends and to investigate the Bank Secrecy Act
    violations and to feed that not--but their intelligence and an
    analytical function. Their function is to then feed the
    information to DEA, to Customs, to the FBI, to whomever, to go
    do the criminal investigation. That model works fine.
        So you could, I think, combine and consolidate a lot of
    these forces, make it more efficient and more effective. I--you
    know, I happen to believe that the FBI is way overstressed with
    too many priorities. I mentioned that before. I think now is
    again the time to take away from the Bureau those things that
    they don't need to do that someone else can do. They've got
    2,000 agents. Well, they didn't get 2,000 new agents, but in
    1981 when the President gave them drug jurisdictions overnight
    with the stroke of the pen, 2,000 more agents were added to the
    war on drugs.
        What's happened to those 2,000 man hours or man years since
    then? I don't know. I mean, did they get siphoned off to go do
    other things? If they exist, give them to DEA. Let DEA absorb
    all of their expertise their knowledge and continue the work.
    There are FBI agents working cases today or they were on
    September 10 that were not--that are not working them anymore.
        So clearly the drug enforcement effort within the Bureau
    was reduced. And if they are going to reduce it more by, I
    forget what Donnie said, 500 or 600 or 700, 400 agents you
    know, that's 400 man years of cases that are not going to be
    worked anymore. Are all of the agents in the FBI now going to
    be working on counter terrorism? I don't think so. So let's
    simplify the bureau's mission for it, transfer those missions
    to DEA or to secret service or to ATF or to Customs and let the
    FBI focus on what it's highest priorities are, and bring them
    into Homeland Security.
        Mr. Souder. Mr. Flynn would you comment on why secret
    service and Customs would move in but not FBI and other ATF and
    other financial tracking if it's organized crime is behind a
    lot of the money laundering.
        Mr. Flynn. What's clear is there's no clean line between
    open source intelligence and then intelligence collected by the
    traditional intelligence community. And of course, that's
    gotten fuzzier as organized crime and terrorism itself is
    merged, and we get the national security and law enforcement
    mix. It's an uncomfortable one that is difficult for the
    bureaucracy to handle well.
        I think the guts of most of the data we need to detect bad
    people doing bad things is often in the open source realm, and
    that is almost in the regulatory realm and information is often
    collected by the cop on the beat versus that is squirreled away
    in Langley.
        And so the notion of trying to consolidate some of that
    oversight in one place is where I think the President is going
    with the recommendation that he has in terms of the fusion of
    intelligence function within the new department. But by
    definition, there's blurred lines. So the Coast Guard now is a
    member of the intelligence community so it will have access to
    the traditional mass security intelligence apparatus. Customs
    is not.
        Secret Service has also a very splintered line there that
    makes this difficult to do. You know, well, some of the
    function of all the U.S. Government is providing for the safety
    and security of its people. You know, it's a challenge to say
    where do we stop this line. But I think what's just as an
    illustration of the kind of dilemma we're facing and why I
    think there's some need for due attention on getting largely
    nonclassified information under one roof and effectively fused
    is an illustration of--let's--I had talked some time ago about
    the container, weapon of mass destruction being put in a
    container and moving through the inbound system and potentially
    posing a real threat.
        An equal one is, let's say a year from now, we have al
    Qaeda II and the President, this time we have human
    intelligence. We have an intelligence operative in the network
    and he says we have just loaded a weapon of mass destruction in
    a container and it's heading down the street in a truck toward
    a barge. So it's hard intelligence and it comes to the
    President, and the President convenes a national security team,
    and he turns to the Commissioner of Customs, and says, well,
    where's the box? And the Commissioner says well, it could be
    coming into Vancouver, or Seattle/Tacoma or San Francisco,
    Oakland, or L.A./Long Beach or maybe coming through the canal
    or any of the other ports. But we hope to get the paperwork
    right after it goes through.
        I'm not saying that's not--there may not be a way--there
    may be a chance that we'll catch it, but the system right now
    is so porous that you have hard intelligence that's coming, and
    you have nowhere to pinpoint in the system where the heck it
    is, and under the current construct, if it comes into L.A./Long
    Beach, it has to go 14 miles inland to get inspected, because
    GSA couldn't afford to buy the real estate in the port. So the
    most densely populated part of the country.
        I mean, this is the mess we're in right now that is going
    to make the need for, and I think the President quite properly
    says at least we should get that house in order. And the
    agencies who collect that information, and you can diffuse it,
    that's with regard to people, with regard to conveyances, with
    regard to cargo. Let's at least get a full picture of that. It
    gives us a base line and then see if we can tether in more
    effectively to the national security establishment. That, I
    think, is the thinking behind this.
        Mr. Souder. Let me pursue just a couple of other things
    with that baseline of--in effect, you've continued to come back
    and defined this more or less as a border homeland security
    agency, because the truth is, everything has some degree of
    homeland security, and you could have the whole Federal
    Government under it. So if we do that, why isn't EPIC in this?
    You used an interesting term. You said non classified
    intelligence. Why isn't EPIC in RISS, for example?
        Mr. Flynn. I don't have a clear answer for that. You know,
    clearly, again, folks are struggling with how much to fit under
    this roof and still not to lose form. I think that it does make
    sense that the--EPIC I think is an omission that could, you
    know, certainly be entertained as it's put in here overall.
        Mr. Souder. Any other comments on EPIC or RISS or why you
    wouldn't put those in?
        Mr. Marshall. Mr. Chairman I think that when you talk about
    EPIC and RISS and I would put perhaps the NDIC in that same
    category you have a good model for intelligence sharing. I
    think it would work equally well, perhaps, to build on those
    models as intelligence sharing mechanisms or to create a
    parallel mechanism.
        You could make an argument for or against the wrists and
    EPIC and NDIC for that matter, and then I would like to make
    just one more comment. Mr. Flynn mentioned the cop on the beat
    and the kind of information that they come up with. I think one
    thing has been probably overlooked more than it should in this
    whole reorganization, and that's the value of our State-local
    law enforcement counterparts out there. Nobody knows the
    communities like State and local law enforcement.
        The Federal Government is never going to put together a
    mechanism that matches that capability. State and local law
    enforcement have numbers out there that the Federal Government
    is never going to match. And if we put this thing together
    without some inclusion and considerable thought about the role
    of State and local law enforcement in this whole homeland
    security issue, we're missing the boat big time.
        Mr. Souder. Admiral Kramek, on your era, you wanted to make
    sure that the, or suggested that the Coast Guard should
    continue with the coordination of the drug intelligence center.
    Do you see, in other words, if we, in effect, ideally we would
    have a model like that for terrorism like we do for narcotics
    to the degree that they're separated? But without the,
    initially the NSA, the different defense agencies, without the
    CIA, without the DEA, without the FBI, we have certain pretty
    big centers of intelligence not in a homeland security agency.
        Would you see in this department the potentiality of at
    least using the model on drug intelligence for all the--whether
    it's nonclassified, if that is a term we use or all the other
    things that collect intelligence other than the big ones that
    basically can't be hugged in at this point, and then this
    agency then share, like the drug intelligence does with the
    other agencies so that there's at least some coordination.
    Would you see an assistant secretary? Could you think about
    that a little bit and how we might use your model and how we've
    done drug intelligence to somehow pull some of the other
    intelligence in? Because we--intelligence, as all of you know
    and have said at different times, you can never catch a
    criminal if we didn't have intelligence, and yet we are setting
    up an agency that's missing so much of it.
        And to the degree it's in there, it's not clear to me how
    these things are going to get to synergism if Customs stays
    intact, Coast Guard stays intact, the Border Patrol, INS stay
    intact underneath that. Clearly, we got a warning sign the
    other day in our hearing because Senator Lieberman, Senator
    Specter says, of course we are for this merger as long as the
    employee unions aren't merged. And that's off the table to talk
    about employee structures. That's a pretty big thing to have
    off the table, that this presents big things if we don't have
    the intelligence.
        Do you have any initial comments on the intelligence? Then
    I have one more line of questions.
        Admiral Kramek. Well, I think the administration's proposal
    proposes to put a fusion intelligence center in the new
    department. And I assume when they say that they're modeling
    things we've done elsewhere. In the war on drugs, for instance,
    all of the agencies involved in that, some 32 Federal agency
    need information and intelligence. Some have intelligence from
    the Defense Department, and so in its wisdom, the United States
    tasked the Defense Department, with standing up interagency
    task force in the east and the west, which is really a
    communications and intelligence fusion center that we all
    participated in and all the data goes there from all agencies.
        Everyone participates. DOD, Coast Guard, Customs, DEA, NSA,
    CIA and all of it is fused into an actionable result that's
    given to an operator, whether it be Coast Guard, Customs, DEA,
    to go out and interdict, if you will, and stop the drugs from
    either coming into the United States, or better still, take
    down the entire network that finances the whole thing and
    arrest everybody on both sides.
        That model has been used in lots of other instances. But
    what intrigued me was when DEA stood up EPIC, and stood up the
    National Drug Intelligence Center. Those were all good things.
    But until we really started to be able to use the sources from
    the Department of Defense from the things that they could see,
    and from the things that they did, and from CIA, and brought
    all that together, we had a much more complete picture. Is it a
    total picture? No, using all the national resources the picture
    got clearer, though, however, and I would say that 85 percent
    of our effort was based on some sort of then knowledge and
    intelligence.
        The same type of model can be used for Homeland Security.
    All those agencies don't need to be in the Department of
    Homeland Security. What they need is an intelligence fusion
    center who gather all of the actionable intelligence from the
    other agencies and get their recommendations, and they make
    heads or tails of it. And then they decide what warning to put
    out to various agencies of the United States to protect us for
    national security. You don't need to merge all of these
    intelligence agencies in there. They're all working and can
    work very well by themselves. But should they share more? Yes.
    And should they be consolidated? Yes. But you will have to deal
    in closed session and in closed committee with the threat that
    doing that has to sources and methods in our intelligence
    infrastructure.
        Mr. Souder. Compromising the more people.
        Admiral Kramek. We have to be very, very careful because
    we're talking about, you know, a domestic agency for homeland
    security using intelligence that we're collecting for our
    defense, and there's a strong connection there, but we have to
    decide on intelligence and the law with that respect. And there
    are lots of scholars who have a lot to say about that, and I
    would recommend, Mr. Chairman, that you take a look at that a
    little bit. Because I think it's paramount to what type of
    intelligence center you would want to have in the new homeland
    defense agency.
        Mr. Souder. We get a synergy for effectiveness, but we
    don't get a cost synergy when what we are adding are new
    coordination centers, and that's how important in how they're
    putting this agency together, because if we're putting together
    new groups to coordinate, that's not a net reduction. That's
    another layer.
        Let me ask one last thing regarding the drug czar which was
    alluded to, I believe, by Mr. Nunez. That if we look at this as
    primary focus based on the agencies that were put into this as
    a border, primary focus is border, secondary focus is other
    things, defining the border loosely, meaning it could be
    preclearance of cargo in Singapore. It's the Customs Office in
    Fort Wayne, Indiana at the airport. It's the INS State
    Department clearances overseas. And if we see the drug
    interdiction efforts of Coast Guard and of Customs and of
    Border Patrol put inside this agency, and if we see the nexus
    of the financial sources and the long sought-after goals of
    organizing the border, better that were being done, not to
    mention intelligence clearing, which interconnects with HITA,
    what precisely do you see the role of the drug czar in this
    network to be, and are some of the functions here should we
    look at different ways of configuration of that because a lot
    of this is what the drug czar is supposed to be doing?
        Admiral Kramek. No, I don't see the role of the drug czar
    changing. If you were to look at the national drug control
    policy strategy that's put out annually, possibly 40 percent of
    it or less is interdiction. The majority is treatment programs,
    local law enforcement programs, all of those other things. Now,
    that's not to say that the interdiction piece--and when I was
    the interdiction coordinator, couldn't be coordinated more
    efficiently by having all of my colleagues at the table, and we
    were all working for the same boss. That may be. But the
    initial drug control policy only has a piece of it as far as
    interdiction is concerned. Education is an important piece of
    it. Treatment is an important piece of it. And so having all of
    that, thinking about putting that in the new homeland security
    I don't agree with that at all. I think it needs to be separate
    and again, perhaps the interdiction piece could be more
    efficiently accomplished, and there would be some synergy to do
    that. But I don't see it changing the drug czar's role at all.
        Mr. Souder. Mr. Nunez.
        Mr. Nunez. The concern that I have is if the drug czar
    continues to have the function that he's been given for the
    last decade or more, of certifying the budgets of all of these
    agencies, wherever they are, whether they're in Treasury,
    Justice, or the new homeland security agency, his mission is to
    make sure the Federal Government is paying attention to the
    drug war. If there's a conflict, if the Secretary of Homeland
    Security says, well, I've only got so much money I can put in
    my budget this year, and so I have to take some away from this
    drug interdiction or drug enforcement or drug treatment, you
    know, area, to--in order to fund some other terrorism thing, I
    mean, then you've got a conflict.
        Mr. Souder. Well, what was the answer to that question by
    the way.
        Mr. Nunez. I'm sorry.
        Mr. Souder. We know the answer to that question, by the
    way, which is why the next question I asked is important.
    Homeland Security is going to win, which means that we've
    changed the mission of the drug czar but not acknowledged it.
        Mr. Nunez. We subordinated it. We've created a priority.
    We've said homeland security comes first. Drugs are second. And
    maybe that's right. I don't know. But I suppose the President
    ultimately, and the Congress, get to decide how to balance
    those two high priority issues.
        Mr. Souder. Do you have a comment, Mr.----
        Mr. Flynn. Again, the overarching rationale, and this has
    been difficult because, you know, unfortunately, the
    organization came out before there was a strategy, and the guts
    of how this thing should be done--we should have a strategy
    first. But the overall thinking behind the Hart-Rudman's
    Commission's recommendation was the strategy is that the
    traditional national security establishment deals with
    terrorism at its source; that it is trying to run in the ground
    bad guys when we found them.
        But once they're on the move, that is, there in our
    international transportation and travel corridors that we need
    the means to be able to detect and intercept them, and there is
    a real problem with coordination there.
        The second piece is some of those guys will get through and
    they will take on our critical infrastructure. So having the
    capacity to make sure that infrastructure doesn't melt down,
    that there's some protection is the next stage to limit the
    disruption.
        The third piece is there still will be consequences and the
    ability to have a quick postmortem and put things back
    together, again, is going to be the key to having an overall
    approach to managing the risk of terrorist catastrophic
    terrorism threat directed at American soil.
        And so the President has hit all those pieces. He said the
    border stuff up front is key. He's put critical in the
    infrastructure protection. He's talked about FEMA because FEMA
    has relationships with localities and States for the response
    and is very much the lead agency for dealing with those first
    responders, and he said you've got to get the intelligence
    right. That's not all of homeland security. Homeland security
    is a core mission, again, of government. But it's one right now
    that is woefully inadequate in trying to deal with that issue.
        The amount of money we are spending on going to terrorism
    source is huge numbers. And it's appropriate when we know bad
    guys to get there, but just like we can't eliminate drugs at
    its source, we need a layered approach developing the capacity
    for the agencies of debt, you know, represented here today, to
    be able to play that increasingly prominent role in national
    security. We have to have a conversation about this in terms of
    the organization, but ultimately about the resources. We're not
    going to get to where we need to go if we're not willing to
    open up that box and carry on that conversation.
        Mr. Souder. Well, thank you for your patience, Mr.
    Cummings.
        Mr. Cummings. Thank you very much. First of all, I want to
    thank you all for your testimony. You know, as I sat here and I
    listened, I started to ask myself the question, are we going to
    be better off or worse off? That is, in listening to what the
    Admiral had to say, I'm wondering if we put together a
    department that doesn't have the adequate resources, are we
    better off? I don't think so. And I worry--I'm concerned that
    we will--that, first of all, I think this is such an important
    issue that if we're going to do it, we need to do it right. I
    understand what you were saying, Dr. Flynn, when you were
    saying that we need to--since September 11th, we're sending--we
    need to send a very strong message, not only to outside
    enemies, but to ourselves that we've got it together.
        But I'm telling you, the more I listen to what you all have
    said, it just seems like there are so many issues, and it
    doesn't seem like something that you can do overnight. Trying
    to bring all of these--this together. So what we're trying to
    do is coordinate agencies, we're trying to coordinate
    information, trying to, I guess, coordinate effort so that we
    can protect this country.
        We've got some big problems. Going back to the State and
    local situation, you're absolutely right. Boy, I have got--I
    have been sitting here too long. I don't have my glasses.
        Mr. Marshall, you know we had an incident in Maryland where
    they just weren't--the mayor came up here, and the mayor of
    Baltimore came up and complained that we weren't getting
    information from right after September 11th, that there were so
    many things we were eyes and ears all over the place, but yet,
    and still we didn't have the information to act on it.
    Apparently they had stopped somebody involved in this whole
    September or connected with the September 11th events, and
    didn't have enough information from--if other agencies had been
    cooperating with locals and State folk, they possibly could
    have at least detained this person.
        So it just seems as if we've got a lot here. And I--and so
    then I go back to the Admiral and when he talks about this--
    these intelligence centers.
        And I'm wondering, when you take all of what I just said
    into consideration, I'm going to tell you, I mean I have been
    here 6 years and I don't--I think--I don't think the Congress
    is going to give up the money that it really needed to do this.
    I mean, I want to be optimistic, but I don't think that's going
    to happen. I want to believe it.
        So if we try to put together this agency with insufficient
    funds, is it better that we go to what the Admiral talked
    about. I know you're not advocating it. You just talked about
    maybe having something a little less than what the President is
    talking about, and clear me up if I'm misstating, and having
    some kind of way, having some of these folks coming under this
    umbrella called the Homeland Security Department. But then
    having another piece, another arm that says this is going to be
    our center where we bring together information. Is that
    accurate, Admiral, is that what you are talking about?
        Admiral Kramek. You can do it that way.
        Mr. Cummings. Fusion center.
        Admiral Kramek. That's the way the Department of
    Transportation was initially organized in the mid 1960's.
        Mr. Cummings. But is this too big? I mean, is this too--do
    you understand, Admiral?
        Admiral Kramek. I understand what you're saying, you see
    it's a matter of choices are we going to improve things with
    the new department. In my opinion, we will improve homeland
    security with the new department. But the way it's set up now,
    at the risk of not doing other things that we thought were
    important before because homeland security has taken a higher
    priority.
        Now, if it's all right with the President and all right
    with the Congress, and all right with the American people that
    we don't pay as much attention to maritime safety, to drug law
    enforcement, to the other things these agencies were doing,
    then that's something that they vote on and they--we determine
    as a democracy to do.
        Right now I think we all clearly know what mission No. 1
    is, and I think that will improve if we put all of this in the
    new department: But some other things will go by the board and
    I think that's what I said today and what I've heard some of my
    colleagues say, and a lot of the questions you're asking have
    some great concern about that.
        Mr. Cummings. How would the Intelligence Fusion Center--is
    that your own term?
        Admiral Kramek. No. We call it fusing intelligence, when
    you know, sometimes when you find out where the bad guys are
    and you have to go take action on them, and your agent has to
    go into court in open court, we don't want to let everybody
    know how we found out where it came from or who found out, and
    we have to go into closed session, or we have to keep that
    classified, and so therefore, a fusion center takes all sources
    of intelligence, fuses it together, it's been called that for a
    long time, maybe a decade, maybe longer than that.
        It's the concept that EPIC was put together on, and the
    concept that the Joint Intelligence Tasks Force has been put
    together on the war on drugs and other intelligence centers
    where everybody is there and they all look at it and they
    decide yep, it's met criteria 1, 2, 3, so we need to act. We'll
    give it to that member of the Department of Defense or we'll
    give it to that law enforcement agency. But it has to be
    protected as to sources and methods. But they can take action
    on it intercept that person or to do whatever needs to be done
    to carry out proper law enforcement. That can be done, in my
    view, quite simply in the Department of Homeland Security on
    those issues that have to do with Homeland Security.
        Mr. Cummings. And how would that differ, then, what you
    just said, how would that differ from what the President is
    talking about?
        Admiral Kramek. I don't think it'll differ very much. It
    certainly wouldn't move the FBI into the Department of Homeland
    Security or the DEA into Homeland Security. I don't think any
    of those agencies should be in there. They have other things to
    do.
        Mr. Cummings. But you still get the benefit of the
    information.
        Admiral Kramek. Sure. You know, if DEA is onto a tremendous
    narcoterrorist network, they have information that this is
    going to result in terrorism somewhere that is going to affect
    us or fund it in some way, shape or form, that should go into
    that fusion center, so that then Homeland Security can properly
    act on that and it becomes a national security issue. It
    shouldn't be just kept within the agency who found it out.
        Mr. Cummings. Anybody else? Yes, Dr. Flynn .
        Mr. Flynn. I just want to say when we get to budget issue,
    the situation right now as illustrated by the President's
    budget next year, is these agencies within their parent
    departments are dealing with a tradeoff of budget dollars, and
    Homeland Security is going to get a bigger chunk. That's going
    to continue to be an issue as long as bad guys continue to do
    bad things here.
        The parent departments for these agencies right now are not
    effective advocates for giving them sufficient resources. I
    think the silver lining I see in the Department of Homeland
    Security is you have a first tier cabinet officer who is
    advocating for those agencies, they have to be plussed up.
        The key will be will he recognize that it's, in doing their
    core business, the one that exists now that will give them the
    capacity to provide the Nation true homeland security, or are
    we just talking about cosmetic homeland security of having, you
    know, guys in uniforms hanging out in front of baggage
    terminals. That's the key juncture we'll have to cross.
        But it's these agencies doing their day-to-day job by
    community policing provides us the capability to deal with
    crime in the neighborhoods, not guys sitting in precinct
    houses. That's what we have to come to, I hope, with Homeland
    Security. I don't see how the existing budget model where they
    sit is going to get us where we want to go.
        I see the atrophying of these agencies traditional
    missions, and I know not enough value added on the homeland
    structure.
        Mr. Nunez. Just a note from my experience at Treasury,
    every year the budget process would go forward, and Sam Banks
    and the people at Customs would send into Treasury a proposed
    budget, and all the other law enforcement agencies and Treasury
    would send them in, and then the people in the Treasury Budget
    Office would look at it and not understand probably half of
    what they were reading and cut it.
        So one of the advantages of moving many of these agencies
    into an agency operated by someone who understand law
    enforcement is that they're going to get better treatment
    within that department. And with all due respect to the various
    Treasury secretaries over a number of years, you know, they
    don't get that job by knowing much about law enforcement. And
    so that sometimes has been a problem in getting the Treasury
    law enforcement dollars, you know, even through the OMB
    process, let alone through Congress.
        Mr. Cummings. Just, I mean, Admiral, if you had just some
    advice to give us, I mean, if you just had, in a warning, what
    would be with regard to this legislation?
        Admiral Kramek. In my----
        Mr. Cummings. You may not have any.
        Admiral Kramek. Well, it's kind of what I summarized in my
    statement and put in my written testimony. We're being very
    reactionary to the events of September 11th, even though it was
    a little over 9 months ago now. And we're being reactionary and
    we're trying to look at what happened and reacting to it. If we
    want a new Department of Homeland Security, it has a mission,
    the executive branch has defined. It does not have a strategy,
    does not have goals, does not have objectives. It has not said
    this is the resources we need to do the job right, based on
    raising the level of homeland security to a certain level that
    you can hold congressional hearings on and determine if that's
    enough, if that's adequate.
        You know, what is it? What is homeland security? What's the
    level that we want to have? Do we want to make sure that 100
    percent, we can guarantee that 100 percent of all containers
    that come into the United States don't have anything that will
    affect our security that could be done at a cost, everyone of
    them would have to be inspected by us before it left its port
    of origin probably, and then sealed in a certain way. What
    level do you want? And then what resources is it going to take
    to do that? We're rushing toward a conclusion without giving
    ourselves a performance measure or fully understanding what we
    want to do. And so I would do that just a little bit more
    carefully.
        Mr. Cummings. Anybody else?
        Mr. Marshall.
        Mr. Marshall. Yes, sir. I think the advice that I would
    give would be basically four items. No. 1, create the
    Department of Homeland Security I think that will add to our
    capabilities against the catastrophic terrorism. No. 2, do not
    create Homeland Security at the expense of standard traditional
    law enforcement in this country, maintain that robust, and if
    possible, even increase the individual agency's law enforcement
    roles.
        Third piece of advice I would give is take advantage of our
    State-local law enforcement partners out there, and perhaps key
    piece of advice I would give would be really don't expect to do
    this at no budget increase. We must have additional resources
    to make it all fit together and do the job that we need to do
    on all fronts.
        Mr. Cummings. Mr. Banks.
        Mr. Banks. My recommendation, again, is consolidate,
    consolidate these agencies, look for those economies of scale.
    When I say bring them over intact, I don't mean everything has
    to stay intact. You have got to look for those economies of
    scale and push for that information sharing and take some of
    those best practices that are out there. Don't throw the baby
    out with the bath water. Don't start as if you're starting all
    from a whole new cloth again in building this thing and build
    it incrementally.
        Mr. Cummings. Again, I just want to thank all of you for
    your testimony. It's been extremely helpful to us. We have a
    major job to do as you well know. And it's people like you who,
    through your experiences and what you have seen and experienced
    and your knowledge that you have gained, to help us do what we
    have to do. I think it's important that we--and we will take
    this very seriously, because the future of America depends on
    it and generations yet unborn. So I just want to just say thank
    you very, very much to all of you.
        Mr. Souder. Would you--what's your reaction to designating
    an assistant secretary for either narcotics or assistant
    secretary for reduction of financial resources for terrorist
    inside this department?
        Mr. Marshall. Was that directed at me, Mr. Chairman, or----
        Mr. Souder. Any of you. Because here's my concern. We know,
    we don't have to guess. We aren't going to have enough
    resources to fund current activities at the current level plus
    this department. We're already seeing it in the process and we
    know that's true because unless we get hit by another terrorist
    attack. In other words, we've got artificial goals, we don't
    have goals. The goal is to have 100 percent elimination of any
    catastrophic event. That's our goal and that's, I believe, what
    the Vice President was trying to say is that's not an
    achievable goal.
        We can work toward it and we hope to achieve it, but it is
    a standard that's--is it a 1-year goal? Is it a 5-year goal? Is
    it 100-year goal? And we know that the resources are going to
    go up and down, just like they do in the narcotics war and
    child abuse and missing children; that when you have a crisis
    people run toward it. To the degree you fix the crisis, they're
    ready to address another one.
        If we don't get hit by a terrorist attack by October, there
    aren't going to be very many senior citizens asking me about
    terrorism, they're going to be asking me about what happened to
    my prescription drugs that you were going to pay for. This is
    part of life in government and in a democracy. And part of the
    thing here in the narcotics committee that we're watching is
    that anybody who's ever dealt with a narcotics issue knows that
    politicians have somewhere between 2- and 4-year attention span
    to this issue.
        It's not that the issue goes away anymore than any other
    social problem goes away, but then you reconfigure. That's
    partly how so many agencies got into narcotics, and part of the
    question here we're moving several of the major narcotics
    agencies into Homeland Security that we all agree, I believe,
    that there is going to be increasingly a narcotics nexus to
    funding terrorism as well as other illegal--and the question
    is, should somebody in this department be either looking at
    narcotics directly to help coordinate those agencies within and
    make sure it gets some attention, or should we look at it as
    funding of terrorists, which gives us the nexus for looking at
    that and child traffic and other things so that there is an
    awareness of the interrelationship.
        Because the danger here is because I'd had really thought
    this through today, but it's clear. The real fundamental
    assumption behind this is catastrophic terrorism. Yet we're
    throwing agencies in whose primary functions are day-to-day
    functions, not catastrophic, and unless we figure out how to
    blend the day-to-day with the catastrophic, we're going to see
    a major reduction in the day-to-day because of the goal of an
    almost 100 percent on catastrophic, and we need to figure out
    some ways to try to make sure that everything isn't obliterated
    in this bureaucracy when we started out, that in fact everybody
    doesn't see because I'm sure, also by the way that the
    Secretary of this agency is going to see their predominant
    mission is that their, what's their measurement of failure.
        On what grounds would you be removed as a cabinet
    secretary. It won't be on whether computers got across the
    border; what the wait was at the border; it won't be whether or
    not there was a reduction in narcotics. It won't be whether a
    sailboat person was rescued. It will be did something blow up
    while you were secretary? And I just would like to ask your
    reactions about where we might deal with this to make sure
    there's somebody inside Homeland Security that's watching some
    of these other missions.
        Admiral Kramek. Mr. Chairman, there's a significant
    distinction between this new department and all these other
    things that have been done before, which are the normal jobs of
    these agencies such as drug interdiction or immigration or
    border patrol. And that is, that Homeland Security, because of
    what happened, is now one of our vital national interests
    because we've had a significant threat to our national security
    to our freedom. And this is the new warfare that Dr. Flynn
    described. Usually, almost all of those missions are addressed
    usually by the Department of Defense nowadays. This one is not.
    This is not called Homeland Defense.
        It's called Homeland Security, and it's to our vital
    national interest. Therefore, it takes priority, No. 1, at
    least I think that's what a lot of people in our country
    believe. Given that, the other missions and the other things
    that we've done are secondary to that. If we don't want it that
    way, and we want to still keep doing those things, then it has
    to be resourced. But the distinction here is that this is in
    our vital national interest for survival of the freedom that we
    enjoy, and it is now something that deserves a good focus of
    our national strategy on how to deal with it.
        It's different, I think, than the war on drugs. We made it
    pretty important, but it wasn't in our vital national interest
    on something that we'd go to war for because that was always
    the--that was always the criticism. The war on drugs was a
    misnomer. We never really went to war on it. We tried like heck
    to interdict it, to stop it, to educate and to do all of those
    things, but it was never a real war. But this is, and so
    there's a distinction that has to be drawn.
        Mr. Souder. Maybe we can just go down and have any other
    concluding comments, because I appreciate your patience here,
    and if there are any other things you want to touch on, and
    then we'll finish the hearing.
        Mr. Marshall. In my view, Mr. Chairman, it would be
    tempting to make an argument to put much more under this new
    department than is presently configured. But also, in my view,
    I think it would be a mistake to put too much under this new
    department. I think a good compromise and good approach for
    right now is really pretty much where we have gone, and that's
    to put the meet and greet agency the first line of defense
    agencies under the new department. You could make an argument
    for putting FINCEN for DEA, FBI, the intelligence fusion
    centers in law enforcement, the RISS and the EPICS and things
    of that sort.
        But I think, as I alluded today in previous questions and
    certainly in my written statement, I think if you do that, you
    run the risk of diluting all of those other day-to-day single
    mission law enforcement agencies and their missions. And if you
    dilute that too many times, if it's under the Homeland Security
    Department, and it's a question of an immediate terrorist
    threat versus a large cocaine shipment coming into the United
    States, and it really is a choice between these two, then the
    choice is properly going to be made in favor of the terrorist
    threat.
        But if do you that for too long a time, bearing in mind how
    much I've talked about the connection between terrorism,
    organized crime and drug trafficking, if you do that too many
    times over a sustained period of time, then ultimately you
    impact negatively on the catastrophic terrorism and your
    ability to deal with that.
        So I think we need to resist the temptation to put too much
    under this new department.
        Mr. Souder. Mr. Nunez.
        Mr. Nunez. I guess just in conclusion, I'm concerned about
    if I detect what's been going on here today, the notion that
    this somehow is going to be primarily or exclusively a border
    homeland security thing. That troubles me. I mean, I think it
    doesn't make sense to have a whole department devoted just to
    border security.
        I go back to what I said before. You know the FBI is the
    king of the hill in terms of antiterrorism. They've got the
    ball. They are the link to State and local law enforcement in
    regard, with regard to terrorist issues and many other issues.
    So it seems to me that the FBI has to be inside this department
    for the department to make any sense. They've got the FBI and
    then connect to State and local law enforcement through its
    field offices to all of the other agencies that are involved
    and to the border.
        The feedback, the information can flow both ways. It just
    seems to me, you know, clear that we can't--we shouldn't
    separate the FBI from the border agencies and everybody else. I
    mean, we've got--you look at the chart of everybody else from
    agriculture and all these other places they're not specifically
    border agencies.
        So I guess that's my sort of biggest point is that somehow
    the Bureau has to be brought into that, if that means carving
    it up and disseminating parts of it to groups that are not in
    it, so be it.
        Mr. Souder. Mr. Kruhm, do you have any closing comments?
        Mr. Kruhm. I think there's some lessons to be learned with
    the creation of ONDCP. How they organized, how they worked with
    State and local agencies, and all the frail agency and some of
    the stonewalling that took effect; their lack of clout for
    example, and they worked very hard at trying to improve the
    government's performance in the drug war.
        So, if you have a chance to study some of their
    experiences, I think it would be very beneficial. I still feel
    that this organization, if at all possible, should be as agile
    as possible. It shouldn't be so large and cumbersome that it is
    going to lose its very great ability of all of these individual
    sources.
        And one last thing, I think it is very interesting that
    this panel independently put together testimony that has a lot
    of common points in it.
        And I hope the committee takes that into their
    consideration that we feel very strongly on a lot of common
    ground here. I think it would be great if we could all get
    together and come up with a master plan ourselves, but I guess
    that's not in the cards. Thank you very much.
        Mr. Souder. Mr. Banks and Mr. Flynn.
        Mr. Banks. And I guess I would also share the concerns
    about this department being too large and not being focused. I
    think those are issues that do need to be of some concern.
        Quite frankly, if the FBI and the anti-terrorism
    intelligence center isn't part of it, I think this Department
    can survive. If FINCEN for the financial intelligence is not
    part of it, doesn't mean they might not need money laundering
    investigators, but the FINCEN piece and that support could be
    done, the same thing attempted, and does it need a kind of a
    drug assistance secretary, just like Admiral Kramek talked
    about with an interdiction coordinator--you could have an
    interdiction coordinator here--crosses a lot of the same
    agencies that did before. It doesn't mean that they necessarily
    have to act as a competitor to DEA, but instead maybe a
    compatible point of contact with the Drug Enforcement Agency.
        And the only other comment I would make is, you know, I
    still think it's the right thing to do. And I know the
    timeframe is very short. I certainly share Dr. Flynn's view; it
    would be nice to have a strategy before you had an
    organizational box put together, but that doesn't mean you
    can't get this off the ground and begin working this. There
    have been studies for a decade about some of the border
    agencies; they all recommended consolidation. We still don't
    have that at this point. I'm not so sure that a lot of thought
    hasn't been given to this over the years.
        Mr. Nunez. Actually, the House published a book and it goes
    back to 1908. It's the chronological history of attempting to
    organize the border. And, to date, I don't believe they have
    been successful.
        Mr. Flynn. I may just add to that, that while I can
    appreciate this committee feeling very much under the gun in
    terms of trying to develop how to approach this, Hart-Rudman
    Commission and the U.S. Commission on National Security spent 3
    years with 14 of the most distinguished Americans, seven on
    both sides of the aisle, thinking about this issue. They just
    came to the conclusion that the No. 1 threat to the United
    States for the foreseeable future is an attack on our homeland,
    and that we are fundamentally not organized to deal with that
    threat.
        I was here in the Mansfield Room when they rolled out that
    report a little over a year ago. Not a single media outlet came
    to report the event. We have had a lot of data about the
    problem and we have had some serious people put some thinking
    into the solution; what we have is no action in addressing it.
    And I worry about this clock ticking, which is the bad guys
    figuring out how open we are and how disruptive they can be.
    And I think it's important that we get on with it. Thank you
    very much, sir.
        Mr. Souder. Well, thank you each for your patience this
    afternoon, because I don't think there is any question that we
    are going to move something and it's going to--I don't think
    there is any question we are going to continue to work at it. I
    don't think we are under any illusions that it is going to
    solve any problem, particularly if the all the major
    intelligence agencies aren't part of it and are still competing
    with each other.
        And I don't know how we address those kind of questions.
    But, it's a step. And I thought it was part of the goal of this
    hearing and in what we are trying to draw out is, look, there
    are tradeoffs here. And resources--reorganization does not
    cover resource shortages. And I also think the point was made
    that having a cabinet member who is focused on these particular
    agencies should help, but I am very concerned that narcotics
    and, for that matter, trade, which moving people across the
    border, are going to be lost in this debate if we are not very
    careful and don't make sure that, for example, if we are going
    to have catastrophic terrorism be the driving thing of concern
    at the border, that then we don't say, look, that means more
    bridges, more agents, more machines to clear it through, more
    at the ports, all these kind of things.
        Because what will happen is, is that the second we don't
    have a catastrophic event, we will go right back in to every
    Member of Congress who is along the border being concerned
    about the trade; it's fine for law enforcement people to say,
    well, they won't be coming over to eat as much. By the way, the
    100 crossings involved--my hometown is roughly 150 to 175 miles
    from the border crossing in Detroit, but the pick-up plant in
    my hometown has 100 border crossings involved in each pick-up.
        And it's one thing to say that catastrophic terrorism right
    now is the focus, but we all remember Tip O'Neill's holding
    that all politics are local and jobs are local. And, that
    ultimately, if we don't get the balance right with this, we are
    going to see the support for the agency decline, just like
    other categories did, if, in fact, it is successful. And that's
    our challenge here, and thanks for being part of that. And
    please get back in touch with us if you have any specifics as
    we start to look at the amendment process probably next week.
    Thank you all for your patience. And, with that, the hearing
    stands adjourned.
        [Whereupon, at 5:36 p.m., the subcommittee was adjourned.]
        [Additional information submitted for the hearing record
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