[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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                     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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    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 
follows:]

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