[Senate Hearing 107-1155]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 107-1155
 
                PROTECTING THE HOMELAND: THE PRESIDENT'S
                     PROPOSAL FOR REORGANIZING OUR
                    HOMELAND DEFENSE INFRASTRUCTURE

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

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 26, 2002

                               __________

                          Serial No. J-107-91

                               __________

         Printed for the use of the Committee on the Judiciary



                    U.S. GOVERNMENT PRINTING OFFICE
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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ORRIN G. HATCH, Utah
JOSEPH R. BIDEN, Jr., Delaware       STROM THURMOND, South Carolina
HERBERT KOHL, Wisconsin              CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         ARLEN SPECTER, Pennsylvania
RUSSELL D. FEINGOLD, Wisconsin       JON KYL, Arizona
CHARLES E. SCHUMER, New York         MIKE DeWINE, Ohio
RICHARD J. DURBIN, Illinois          JEFF SESSIONS, Alabama
MARIA CANTWELL, Washington           SAM BROWNBACK, Kansas
JOHN EDWARDS, North Carolina         MITCH McCONNELL, Kentucky
       Bruce A. Cohen, Majority Chief Counsel and Staff Director
                  Sharon Prost, Minority Chief Counsel
                Makan Delrahim, Minority Staff Director


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Cantwell, Hon. Maria, a U.S. Senator from the State of Washington    29
DeWine, Hon. Mike, a U.S. Senator from the State of Ohio.........    20
Edwards, Hon. John, a U.S. Senator from the State of North 
  Carolina.......................................................    46
Feingold, Hon. Russell D., a U.S. Senator from the State of 
  Wisconsin......................................................    38
Feinstein, Hon. Dianne, a U.S. Senator from the State of 
  California.....................................................    21
Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.    35
    prepared statement...........................................    92
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......     4
    prepared statement...........................................   102
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
    prepared statement...........................................   105
Kohl, Hon. Herbert, a U.S. Senator from the State of Wisconsin...    18
Schumer, Hon. Charles E., a U.S. from the State of New York......    32
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....    26
Specter, Hon. Arlen, a U.S. Senator from the State of 
  Pennsylvania...................................................    15

                               WITNESSES

Ridge, Tom, Director, Transition Planning Office for the 
  Department of Homeland Security, Washington, D.C...............     7

                               QUESTIONS

Questions submitted to Director Ridge by Senators Grassley, 
  Biden, Cantwell, Leahy, Feingold and Feinstein (Note: As of the 
  time of printing, responses to these questions had not been 
  received.).....................................................    49

                       SUBMISSIONS FOR THE RECORD

American Civil Liberties Union, Timothy H. Edgar, Legislative 
  Counsel, Washington, D.C., statement...........................    77
American Society for Microbilogy, Abigail Salyers, President, 
  Ronald M. Atlas, President Elect, Gail Cassell, Chair, Public 
  and Scientific Affairs Board, and Kenneth Berns, M.D., Co-
  Chair, Task Force on Biological Weapons Control, Washington, 
  D.C., statement................................................    87
Ridge, Tom, Director, Transition Planning Office for the 
  Department of Homeland Security, Washington, D.C., statement...   108


PROTECTING THE HOMELAND: THE PRESIDENT'S PROPOSAL FOR REORGANIZING OUR 
                    HOMELAND DEFENSE INFRASTRUCTURE

                              ----------                              


                        WEDNESDAY, JUNE 26, 2002

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                   Washington, D.C.
    The Committee met, Pursuant to notice, at 9:40 a.m., in 
room SD-106, Dirksen Senate Office Building, Hon Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Feingold, Specter, Sessions, Kohl, 
Hatch, Grassley, DeWine, Schumer, Feinstein, Biden, and 
Edwards.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. I know Senator Hatch is on his way, but we 
will begin. Senator Specter and Senator Feingold are here, and, 
of course, with this witness, we will dispense with any 
swearing-in.
    We know Governor Ridge well, and most of us served with him 
before when he was with the other body, and, of course, you are 
always welcome here, Governor.
    Director Ridge. Thank you, Senator.
    Chairman Leahy. Before the terrorist attacks on September 
11th, we had been focusing on improving the effectiveness of 
the U.S. Department of Justice, which is the lead Federal 
agency with responsibility for domestic security. We have had 
oversight hearings with the FBI and INS as well as hearings on 
legislative proposals to improve the legal tools that are 
available to detect, to investigate and prosecute those who 
threaten Americans here and abroad.
    Director Ridge has transmitted a specific legislative 
proposal for a new Homeland Security Department. He sent us 
that last week, and I think it is fair to say that we all thank 
him for his hard work and also for all he has done for this 
country, from his military service, to the Governors, to the 
task that he has taken on now.
    There is bipartisan support for the concept of a Cabinet-
level officer to coordinate homeland security. We wanted to 
include such a provision in the USA PATRIOT Act last year, but 
the White House back then asked us not to. But we hope we can 
work with you, Director, on that.
    Now, one thing we should do, though, is to acknowledge what 
the President's proposal does not do. It does not address the 
problems inside agencies like the FBI or the INS, problems like 
outdated computers or hostility to employees who report 
problems or lapses in intelligence sharing, lack of 
translation--for example, all of the documents that were in the 
Department of Justice were never translated--or analytical 
capabilities, and also a lot of people called it the cultural 
problems within the Department of Justice and the FBI. So we 
are going to have to work together, the Congress and the 
administration, to solve these problems.
    This committee unanimously reported the FBI Reform Act in 
1974 to improve the FBI. That came out of here with a 
bipartisan unanimous vote. I hope the President will work with 
us in trying to accomplish moving that through Congress.
    Putting together a new agency by itself does not fix 
existing problems, and, Governor Ridge, you have been very 
frank in pointing that out both in your public statements and 
in a number of the private meetings that we have had with you. 
So we have to be careful we don't generate new management 
problems.
    I am concerned that the administration's proposal would 
exempt the new Department from many of the legal requirements 
that apply to other agencies, and here are my concerns. The 
Freedom of Information Act would not apply. Conflict-of-
interest and accountability rules for agency advisors would not 
apply. The new Department head would have the power to suspend 
the Whistleblower Protection Act, the normal procurement rules, 
and even to intervene in the independent investigations of the 
Inspector General.
    So, really, what this does is put them above the law. That 
is very troubling to me, Director. We go on the assumption that 
everybody has to follow the law, the President, the Congress, 
the administration, and to put this agency above the law on 
questions of conflict of interest, the whistleblower, FOIA and 
all that, that is not a good signal to send.
    I know it is a proposal borne in secrecy and rushed to the 
stage even before the legislation was ready. It is somewhat 
troublesome when we find the whistleblower laws exempted when 
this was announced on the day that there was very powerful 
whistleblower testimony before this committee pointing out some 
real problems and mistakes in the Department of Justice and the 
FBI.
    So we don't want to exempt the new Department from laws 
that ensure accountability to the Congress, but more especially 
to the American people.
    By bolstering our defenses against terrorists, we don't 
want to do damage to other important national interests. Many 
of the agencies proposed for transfer performed vital duties in 
addition to their responsibility for security against 
terrorism, and as agencies are moved to the new Department, we 
need to make sure this does not force duplication of efforts or 
downgrading of important missions.
    For example, for 8 years, crime went down in this country. 
In the last year, it started coming back up. Even though each 
administration wants to have their own way of doing it, and 
that is appropriate, I would hope that you don't start throwing 
the baby out with the bath water.
    During the Clinton administration, the COPS programs and 
other things were part of the reason crime went down. The 
administration proposes doing away with it, with that program. 
Crime is coming back up. What I am saying is we all want to 
focus on fighting terrorists, of course. There isn't a person 
in here, Republican or Democrat, who disagrees with that, but 
if you are living in a street or living in a neighborhood 
somewhere and there is a rapist or a murderer or a mugger 
praying in that neighborhood, that is a terrorist. You are 
terrified, you are worried, and we don't want to expose our 
neighborhoods or our rural communities to rising crime based on 
traffic in crack or heroin or whatever else it might be. So I 
would hope that this isn't going to be an excuse for the cost 
of this to do away with these programs. These local law 
enforcement programs have helped bring the crime rate down. If 
you have got a murderer in your neighborhood, you are as 
frightened as if you lived new the Pentagon or the Trade Towers 
in New York City.
    Now, the President's proposal centralizes many important 
functions, and we had a solid start by being able to workout 
the blueprint provided by legislation originally introduced by 
Senator Specter and others and by the work of Senator 
Feinstein, the committee's Terrorism Subcommittee.
    Our former colleague, Senator Warren Rudman has urged that 
we fix the FBI and not slice and dice it, and considering the 
problems with the FBI, I am interested in hearing from Governor 
Ridge whether separating the Federal agencies responsible for 
investigating terrorism in a separate agency from the FBI would 
be better or would it be worse. Would it be better to spin off 
the FBI's counterterrorism agents into some new organization, 
or should we work with the current FBI to make sure they have 
the tools necessary?
    Now, the Majority Leader and all of us want the Senate to 
produce a thoughtful and workable charter for the new 
Department as quickly as possible. What we don't want to do is 
slow things down by cobbling together a collection of unrelated 
political items in the bill under the heading of management 
flexibility, and I would mention four.
    These are the things that could slow it down. Creating an 
ill-considered and overly broad new exemption to the Freedom of 
Information Act, encouraging Government complicity with private 
firms and definitely keep secrets about information and 
critical infrastructure, vulnerabilities may reduce the 
incentive to fix the problems. I know we all want to trust our 
major corporations to do everything right, and there is no 
reason why we should suspect they don't, unless, of course, you 
read the front page of today's paper or yesterday's paper or 
the day before or the day before or the day before. So I don't 
want to shield unnecessarily what might be wrongdoing.
    I don't think we should weaken whistleblower protection. 
Senator Grassley and I made sure that the FBI Reform Act would 
end the FBI special exemptions from whistleblower protection. I 
hope the administration is not going to insist on moving 
backward on whistleblower protection as they have in this 
proposal. I don't think either Senator Grassley or I would take 
kindly to that.
    Third, weakening safeguards for the gathering and handling 
of sensitive law enforcement information. While the 
Department's role on domestic surveillance remains unclear, it 
is more important than ever that there be strong protection to 
ensure such information is not gathered or used improperly. We 
do not want to go back to the excesses of the days of J. Edgar 
Hoover and things like that.
    The American people want to be protected against terrorist. 
They also want to make sure they are protected in the security 
of their own privacy from their own Government, and that is not 
a liberal or a conservative philosophy. That is an American 
philosophy. That is why we began this country in the first 
place.
    Fourth, I don't want to threaten job security for hard-
working Government employees. We wouldn't want to use this 
transition as an excuse to suddenly cut the wages of those who 
have been defending our country. That is not going to encourage 
retention and recruitment of the vital human resources.
    Director Ridge, as I said before, I do welcome you. I think 
that you have done the country a good service, and the 
President, by taking on this job.
    [The prepared statement of Senator Leahy appears as a 
submission for the record.]
    Chairman Leahy. I am delighted to have Senator Hatch, who 
got the memo on gray suits. Senator Hatch.

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Hatch. Thank you, Mr. Chairman.
    First, I want to commend you for holding these hearings and 
focusing this committee's attention on the most critical issue 
facing our Nation today, and that is securing our homeland to 
protect America from further terrorist attacks.
    I join with you, Mr. Chairman, in the spirit of 
bipartisanship, which Congress has demonstrated since the 
horrific attacks of September 11th, to consider the President's 
proposed Homeland Security Department.
    This committee has much to offer in this area. After the 
tragic events of September 11th, members of this committee and 
Congress worked tirelessly to provide the Attorney General with 
the tools necessary to fight terrorism worldwide and protect 
our country.
    Specifically, we had passed the PATRIOT Act, a critical set 
of reforms needed to unleash our Government's ability to detect 
and prevent terrorist attacks. Since then, we have examined 
other issues of significance in our country's work against 
terrorism. We have reviewed the FBI's reorganization plan. We 
have presented and considered a workable plan for restructuring 
the INS. We have reviewed other significant organizational and 
operational issues that have arisen. Against this backdrop, we 
must now turn our attention together to consider carefully the 
creation of the new Department of Homeland Security.
    At the outset, I want to welcome Governor Tom Ridge, 
President Bush's homeland security advisor. Since your 
swearing-in on October 8, 2001, less than 1 month after the 
terrorist attacks on our country, you, Governor Ridge, have 
worked with an unwavering determination to protect our 
homeland.
    I want to commend you on your efforts to improve our 
Nation's security and your dedication and courage in tackling 
these most difficult issues in this time of crisis. You have 
accomplished a great deal, and while there is much more to do 
to ensure the safety of our country, I personally am comforted 
by the leadership that you have shown thus far.
    You and the President, I think, have both been a steady set 
of beacons of hope for all Americans, and I want to thank you 
again for your accomplishments.
    We were privileged to hear your views when you came here in 
May to brief the Senators on your proposals to consolidate 
border control. The proposed creation of the new Homeland 
Security Department is a massive task. Not since 1947 when 
President Truman reorganized our defense and security agencies 
has this country faced a reorganization of this scale, but 
today we face a significant new threat, one far different than 
post-World War II communism.
    Today we face the danger of numerous well-financed 
terrorist groups, not just Al-Qaeda, but many others, who will 
stop at nothing to cross our borders and attack our 
institutions. Our infrastructures are people and freedoms with 
weapons of all types.
    The administration's proposal to create a new Homeland 
Security Department is the next logical step in our country's 
war against terrorism, and while the President's proposal to 
create a new Homeland Security Department is certainly a 
necessary first step, it is not the end of our country's 
mission.
    No one expects to achieve this end goal of an efficiently 
operating Homeland Security Department overnight. There may 
well be areas of debate or issues that we in Congress need to 
save for another day.
    Certainly, however, there are areas where we share a common 
view. First, in the aftermath of September 11th, we recognize 
that it is essential that we improve our intelligence gathering 
and analytical capabilities within and among our Federal, 
State, and local agencies.
    The administration's proposal makes it clear that the 
Secretary of the new Homeland Security Department will have the 
primary, but not sole, responsibility for coordinating 
terrorist-related threat information.
    The Secretary will be responsible for analyzing threat 
information from various agencies, assessing the vulnerability 
of our Nation's infrastructures, and developing a long-term 
plan to protect those infrastructures.
    Second, regardless of the final structure of the new 
Department, we all agree that it is essential that reforms 
within the FBI and CIA must continue. Both the FBI and CIA are 
in the process of making internal changes that will improve 
their ability to collaborate and coordinate within this new 
Department.
    We are familiar with the substantial reforms that FBI 
Director Robert Mueller has instituted within the Bureau. Under 
his able leadership, I am confident that the effectiveness of 
the FBI and its intelligence capabilities in particular will be 
much improved.
    As a member of the Senate Select Committee on Intelligence, 
I have to say that our director of Central Intelligence is also 
doing an excellent job in this area.
    Similarly, reforms within the new Department's component 
agencies must also continue. We are well aware of the role INS 
plays in enforcing this country's immigration laws and 
administrating services. Implementing critical reforms at the 
INS, of course, undoubtedly will improve the overall 
effectiveness of the new Department.
    Finally, we all recognize that the war against terrorism 
cannot be won simply by reorganizing Government agencies into a 
new, more effective Department of Homeland Security. It is 
essential that we tap into the resources and expertise of 
America's private sector.
    I am encouraged personally by Governor Ridge's efforts to 
enlist the aid and expertise of America's businesses to enhance 
our Nation's security, and I am committed to making sure that 
the new Department is able to receive the uninhibited advice 
and counsel from our various business leaders.
    It is private businesses which own and operate most of our 
infrastructure, our telecommunications, energy and financial 
systems. Our Government cannot effectively fight this war 
against terrorism without their support. So we must arm our 
agencies with the best technologies available and our private 
sector as a critical player in this process, as has been our 
national defense and military.
    Congress must act, and must do so quickly and carefully, 
without political gamesmanship. Our task is too important. We 
cannot afford to sacrifice our country's safety in the process.
    The threat of terrorist attacks on our homeland as well as 
abroad is here to stay. Our response to these threats requires 
a singleness of focus, and all of us in Government have a duty 
to do all we can to protect the American people from future 
terrorist attacks.
    I look forward to your testimony today, Governor Ridge. I 
can't be here the full time because of markup in the Finance 
Committee, upon which I sit as well, but I look forward to 
working with you.
    I have known you for quite a while. I know what a great job 
you did in Pennsylvania. I think you have done a superb job 
since you have been with the President, and I was really, 
frankly, amazed at how well you kept these things under wraps 
until you finally were able to get all of the different 
elements put together so that you could announce this to the 
world at large.
    I think members of this committee, the Senator Governmental 
Affairs Committee, and our colleagues in both chambers should 
accomplish this task this year.
    We rallied last year in a matter of days, in about 3 
weeks--well, it was a little longer than that--to enact the 
PATRIOT Act, and I am confident that if we continue to work in 
a bipartisan, bicameral manner, we can do the same here and in 
this Congress to enact legislation to create this new 
Department of Homeland Security. If we do, then a great deal of 
that credit should go to you and those who have worked with you 
and the President for having done the great work that you have 
done.
    So I am very grateful to you, and I just want to let you 
know that I am looking forward to both hearing and reading what 
you have to say.
    [The parpared statement of Senator Hatch appears as a 
submission for the record.]
    Chairman Leahy. As you can see, Governor, this is not the 
most unfriendly committee that you have probably appeared 
before, and please go ahead with your testimony, sir.

 STATEMENT OF TOM RIDGE, DIRECTOR, TRANSITION PLANNING OFFICE 
   FOR THE DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, D.C.

    Director Ridge. Thank you, Mr. Chairman.
    Chairman Leahy, Senator Hatch, and committee members, I 
truly do appreciate the opportunity to testify in support of 
the President's historic proposal to unify our homeland 
security efforts under the new Department of Homeland Security.
    I would like to reiterate personally the President's strong 
desire to work with Members of Congress in a bipartisan way and 
to thank you for the bipartisan support you have already 
expressed in the commitment to act on this proposal by the end 
of this year.
    I am here in keeping with the President's directive to me 
to explain our proposal and its effects. In addition, the 
President has signed an executive order creating a transition 
planning office for the new Department, housed within the 
Office of Management and Budget. I speak before you today as 
director of this new office, and I certainly look forward to 
working with you in the future and am grateful for the 
bipartisan expression of support for that effort this morning.
    Since the terrorist attacks of 9/11, all of America has 
risen to the challenge of improving the security of our 
homeland, and as the President's Homeland Security Advisor, I 
fortunately have had the privilege of seeing much of this 
firsthand.
    In partnership with Congress, with the States and 
localities, with the law enforcement community, the private 
sector, and the academic world, we have worked to assess our 
Nation's critical infrastructure to do a better job at sealing 
our borders, airports, and seaports from terrorists and their 
deadly cargo, to strengthen enforcement of our immigration 
laws, to share information about threats and to prepare for and 
prevent attacks involving weapons of mass destruction.
    People, not just people in Government, but people all 
around this country, are working harder, they are working 
smarter, and they are working together. But they need a 
structure that rewards that attitude and encourages others to 
adopt it as well. That is why the President believes our Nation 
must now take the next critical step by unifying our efforts 
under a single Department of Homeland Security. Only Congress 
can create such a department, and I am here today to convey 
personally the President's desire to work with members to 
accomplish this goal.
    The President believes the creation of a single department 
with a single clear line of authority would not only improve 
our preparedness for a future attack, but also help prevent 
attacks before they happen.
    Let me talk about the proposal, if I might, in general for 
a moment. As you know, responsibility for homeland security is 
currently dispersed among more than 100 different governmental 
organizations. No agency or department calls homeland security 
its sole, or even its primary, mission. Such a structure 
increases both the potential for mistakes and the opportunities 
for abuse. It certainly does not help us reach our full 
potential to secure this country, its citizens, and our way of 
life.
    The President's proposal would transform much of this 
confusing patchwork into a single department whose primary 
mission is to protect our homeland, a single department to 
secure our borders, to integrate and analyze intelligence in a 
new and different way, to combat bioterrorism and weapons of 
mass destruction, and to direct emergency response activities.
    The Department of Homeland Security will bring homeland 
security responsibilities under one roof, working toward one 
goal, and moving in one direction, forward with a single clear 
line of authority to get the job done. To paraphrase President 
Truman, the buck will stop there.
    As you know, this would be the largest reorganization of 
the Government since the Truman Presidency. Then the problem 
was a divided military. Years before he became President, 
Truman saw the problem as a Senator, as a Senator that was 
tasked with identifying duplication and inefficiency in the 
armed forces, and he saw a solution, a coordinated defense 
organization.
    After he became President, Truman acted upon his experience 
as a Senator as well as on the lessons learned from Pearl 
Harbor and World War II. He unified America's military, 
national security, and intelligence apparatus to meet the 
emerging threat of the cold war. He said it is now time to 
discard obsolete organizational forms, Truman told the Nation, 
and to provide for the future of the soundest, the most 
effective, and the most economical kind of structure. The 
Senate and Government told Truman it couldn't be done, and, 
frankly, I think he told them that it had to be done.
    We, too, must act on the lessons we have learned from 9/11 
and from our war against terrorism. We, too, must build a sound 
homeland security structure for the future.
    The Department of Homeland Security will be built on four 
strong components, four individual units, border and 
transportation security, emergency preparedness and response, 
chemical, biological, radiological, and nuclear 
countermeasures, and information, analysis, and infrastructure 
protection. It would be a key step in the President's emerging 
national strategy for homeland security.
    Like the national security strategy, our national strategy 
for homeland security will form the intellectual underpinning 
to guide the decisionmaking of budgeteers and policymakers in t 
he years to come.
    The President's proposal was the result of a full 
deliberative planning process that began with an effort led by 
Vice President Cheney in May of 2001 to examine the 
Government's response to a terrorist threat. It continued, and 
obviously accelerated, as part of the mission of the Office of 
Homeland Security created last October.
    The President's proposal is drawn on the conclusions of 
recent blue-ribbon reports on terrorism such as Hart-Rudman, 
the Bremer Commission, and the Gilmore Commission, on 
legislative proposals by your colleagues in Congress in both 
the House and the Senate, Republicans and Democrats, and 
reports from the various think tanks and analytical groups that 
have made it their task to take a look at the threat of 
terrorism to this country over the past several years.
    My staff and I have met with thousands of Government 
officials at the Federal, State, and local levels, and with 
hundreds of experts and numerous private citizens, and, of 
course, we spent many, many hours meeting with many of your 
colleagues on both sides of the aisle, again, in both the House 
and the Senate. Their counsel has reinforced my belief that if 
we can protect the hometown, we will protect the homeland.
    The heart of Homeland Security, our highest priority must 
be prevention. Because terrorism is a global threat, we must 
have complete control over who and what enters the United 
States. We are working with Canada and Mexico to create smart 
borders that prevent terrorists and their weapons of terror 
from entering, while at the same time facilitating the legal 
flow of people and goods in which our economies depend.
    Protecting our borders and controlling entry to the United 
States is the responsibility of the Federal Government, but it 
has currently dispersed more than five major governmental 
organizations in five different Departments.
    The new Department would unify authority over the Coast 
Guard, Customs Service, Immigration and Naturalization Service 
and Border Patrol, and the recently created Transportation 
Security Administration. All aspects of border control, 
including the issuance of visas would be frankly improved and 
certainly enhanced by a central information-sharing 
clearinghouse.
    Our borders include our international airports, seaports, 
and coastlines, and our 21st-century rapid transportation 
systems. The new Department would unify Government's efforts to 
secure them all.
    The new Department can also help strengthen the qualities 
that define us as Americans. Allow me to illustrate. America is 
a nation built on, and built by, immigrants. We have 
traditionally been an open and warm and welcoming country to 
the entire world.
    President Bush has carried on that tradition in several 
ways. He used as an illustration, work to reduce the backlog of 
legal immigrants awaiting citizenship. After 9/11, he 
repeatedly stressed the message of tolerance to the entire 
Nation, and his proposal would place the duties of the INS 
under the leadership of the Secretary of Homeland Security. We 
need to know that the guests of our country have the right to 
be in our country. We need to know who is playing by the rules 
and who is trying to play the system to ultimately do us harm.
    America, whose immigration laws are fully enforced, is an 
America that is more tolerant, trusting, and welcoming to legal 
immigrants. We will better our state-of-the art entry/exit visa 
tracking system, wisely advocated by Congress several years 
ago, several years ago, but never fully implemented. That is 
why we do not propose to separate the administrative and 
enforcement functions of the INS. To make the system work, the 
right hand of enforcement must know what the left hand of visa 
application and processing is doing at all times.
    The President's bill contains language for a human 
resources management system that is flexible, contemporary, 
with public employment principles of merit and fairness. We ask 
for the ability to use common-sense tools such as providing 
merit pay for top performers or lifting the pay cap to attract 
quality IT workers from the private sector. We want to offer 
the best worker incentives for exceptional contributions and 
ensure accountability for individual performance, and we want 
to hire good people for critical positions immediately.
    Finally, one of the Department's most important missions 
will be to protect our Nation's critical infrastructure. To do 
so, the Department must collect information, identifying key 
assets and components of that infrastructure, evaluate 
vulnerabilities, and match threat assessments against those 
vulnerabilities.
    We can only accomplish this if the Department can gather 
information comprehensively and freely from the private sector, 
which all of you know owns 80 to 90 percent of that critical 
infrastructure. The private sector has knowledge and expertise 
not readily available to the Government, expertise we believe 
we can use to develop and recommend appropriate protective 
measures.
    Under current law, all of the information collected from 
the private sector could easily become public. I acknowledge 
the chairman's concerns about the limited exemption that is 
provided for in the President's proposal, and I am anxious to 
work with the chairman and other members of the committee to 
assure that the concerns that you have raised are properly 
addressed. It would not be in the best interest of American 
businessmen or -women or any other American, frankly, to draw a 
road map of critical infrastructure vulnerabilities for those 
who would do us harm, but there are also considerations that 
you have raised, Mr. Chairman, that we must deal with in this 
legislation as well, and we look forward to the opportunity to 
do that with you.
    The only answer we believe is a limited statutory exemption 
to the Freedom of Information Act, such exemptions where 
Congress has deemed that the public interest requires 
protection of information submitted to the Government. We 
believe homeland security deserves such treatment.
    We want to ensure that information, voluntarily provided 
for the purpose of securing our critical infrastructure as well 
as the American people, is protected. We also want to help 
mayors and Governors receive threat information and 
intelligence from the Federal Government without having it 
become public. The President is looking forward to working with 
the House and the Senate to create an exemption appropriate to 
the need of the new agency.
    Finally, the President appreciates again the 
extraordinarily enthusiastic response from Members of Congress 
to this initiative, and he frankly is gratified by the optimism 
about how quickly the bill might be passed. This administration 
is ready to work together with you in partnership to get the 
job done. This is our priority, and I believe it is yours as 
well.
    We know the threats are real. We know the need is urgent, 
and we also know that working together, we can succeed in this 
endeavor.
    President Truman did not live to see the end of the cold 
war, but the war did end, and historians agree that the 
consolidation of Federal resources was critical to our ultimate 
success.
    Ladies and gentlemen, we have that opportunity to provide 
the same leadership and create the same kind of legacy, and I 
certainly look forward to working with you to seize that 
opportunity.
    Thank you, Mr. Chairman.
    [The prepared statement of Director Ridge appears as a 
submission for the record.]
    Chairman Leahy. Thank you, Director, and I appreciate your 
comments on FOIA. We will work together on that. Of course, as 
you know, there are some very significant protections under 
FOIA even today with people protecting trade secrets especially 
for the high-tech industry, provisions that protect releasing 
their vulnerabilities, but as the moment, the feeling--and it 
is not what you are suggesting, but the feeling that may come 
across in some of the legislation, to trust private industry to 
do all the right things, especially in telecommunications and 
other areas, it is not necessarily a time when that call might 
ring on receptive ears.
    Again, just looking at the headlines today, there are an 
awful lot of people who find themselves broke today who wish 
that somebody had done a better job of finding out what was 
going on, whether it is WorldCom or anywhere else.
    Let me ask you this. FBI Director Mueller is trying to 
reform an organization, in this case, the FBI. It is easy to 
change, and do you really think, when you look back over the 
years at the FBI, the FBI can overcome its problems, or should 
we create a new and separate agency to investigate terrorism, 
one that is not as bureaucratic or technologically backward?
    Director Ridge. Senator, I have had the real pleasure and 
privilege to get to know Director Mueller who came on the scene 
probably about 6 weeks before I did and 1 week before September 
11th. We have the opportunity to interact on a daily basis, an 
opportunity to observe and witness the interaction between the 
FBI director, the CIA director, and other members of the 
administration on a daily basis, sharing information and 
talking about the kind of structural, organizational, and 
technological changes to which you referred.
    I think the President believes very strongly that the 
reorganization efforts undertaken by Director Mueller are very 
appropriate under the circumstances. As you know, he inherited 
an agency that was technologically deficient. We are all 
concerned about creating the capacity within the FBI to share 
relevant information within the Federal Government, including 
the new Department of Homeland Security who will be a recipient 
of that information, but for whatever reason, over the past 
couple of years, in spite of the investment by Congress of 
substantial dollars in information technology, at least 
appropriations--
    Chairman Leahy. Billions of dollars.
    Director Ridge. Billions of dollars. It just didn't happen, 
and so the work that he has undertaken, again with strong 
supplemental support that the Congress gave him last fall, to 
bring the kind of digital competency to the agency is a much-
needed improvement to develop the kind of reporting and 
analytical capacity that will be necessary to share information 
with the new Department of Homeland Security is something that 
he has undertaken. By agreement with the CIA Director, they 
will be providing 25 CIA agents, so they can begin to develop 
that capacity within the FBI.
    So, in response to your question, Mr. Chairman, I believe 
Director Mueller is making very aggressive and very positive 
steps to reorganize not just the personnel and the technology, 
but to change the culture.
    Remember, of course, there is still going to be the 
investigative arm of the Attorney General to deal with the 
traditional mission of the Department of Justice, but they also 
need to develop the new capacity to take a look at terrorist-
related information, distill it in a form and report and 
analysis to be conveyed with the CIA and with the new 
Department of Homeland Security, and I think he is on the right 
path.
    Chairman Leahy. So we don't need to create this new and 
separate agency to investigate terrorism?
    Director Ridge. Well, I think what we have within the 
Federal Government, Mr. Chairman, as you commented, we have the 
CIA and we have the FBI. There is much better information 
sharing. Of course, my witness to that is as of October 8th 
that they have done some unprecedented work together, at least 
in this administration. I can't speak to previous 
administrations.
    But the unique aspect of the new Department, Mr. Chairman, 
is that there will be a different kind of threat analysis that 
will enable us to harden targets, to make it progressively more 
difficult for the terrorists to bring the same level of 
destruction. So I don't believe you need a new separate agency 
to do that. I think the CIA and the FBI are moving in the right 
direction together.
    Chairman Leahy. This committee has given strong support to 
Director Mueller, as you know, and is trying to help him in 
overcoming what are some real problems, not the least of which 
in technology, but also in personnel.
    Government secrecy, going back to the FOIA, is necessary, I 
think in limited circumstances, to protect our national 
security. I think we all agree on that. As one who helped to 
write the most recent FOIA law, I was very much attuned to 
that.
    We also know, going back to the days of Watergate, that 
secrecy can often lead to serious management problems that 
could be very costly for Americans, not just monetarily, but if 
you undermine the trust that we want to have in our Government, 
that is a cost that can sometimes be unbearable. Sunlight and 
openness, that is the best way to make sure you have the 
accountability.
    When Government agencies do things right, we are going to 
hear about that because they are going to have a hundred press 
releases out immediately to tell us this, but when things go 
wrong, we usually don't hear about it, and we only hear about 
it when we pick up the paper and find some enterprising 
reporter found out about it.
    I think about a very powerful letter--and you should take a 
look it; in fact, I will put it in the record, if I could have 
her permission--that Senator Feinstein just sent to the FBI 
about the FBI's activities in the 1950's and 1960's, their 
effort to get the president to the University of California 
fired and actually to lie in the background check on him. When 
a former President of the United States wanted to appoint him 
to the Cabinet, the FBI did the background report, lied in it, 
so he didn't get the Cabinet position.
    Now, the reason I mention this, it took a San Francisco 
Chronicle reporter 17 years to get the FOIA request answered to 
turn out what was really outrageous, and some would even say 
criminal, conduct on the part of the FBI 17 years ago.
    We are being asked to spend $37 billion of taxpayers' 
dollars in the first year in this new Department. I think we 
ought to make sure that we know not just when it is doing 
things right because I am sure we will find out about that. We 
want to make sure that we know when things are wrong.
    I mention that not so much as a question, Director, but on 
the issue of FOIA, I think it would be rise if your staff and 
ours spend some time together to talk about that.
    Shortly after the 9/11 attacks, I went down to the FBI's 
Operations Coordination Center, the SIOC. You have been there, 
and I think a number of members of the committee have. This 
brings together every agency's information to evaluate it, 
respond to a crisis, and so on. The administration bill does 
not specifically call for the Homeland Security Department to 
have a coordination center like this. Do you plan to move this 
SIOC from the FBI to the new Department, or will the new 
Department have its own coordination center?
    Director Ridge. Mr. Chairman, the unit that we describe as 
the Information Analysis and Critical Infrastructure Protection 
Unit will basically be a coordination center having access to 
reports and the analytical work products not only from the CIA 
and the FBI, but from the other agencies that have intelligence 
and information-gathering responsibilities within the Federal 
Government.
    I would also say that the model that the CIA and the FBI 
have begun to develop as they place individual members from 
their respective agencies in each other's agencies to work, to 
share, and to integrate and consolidate that process is a model 
that I would suspect a new Secretary would follow. It assures 
the flow of information. It assures that those two agencies are 
really working side by side to generate certain work products, 
to facilitate the threat assessment and to get that work 
product to each other and to the new Department.
    Chairman Leahy. Let me ask you about that. With the field 
office, suppose you have a field office--I am thinking of 
something like the Phoenix memo--
    Director Ridge. Right.
    Chairman Leahy [continuing]. And they suspect something is 
wrong. They send it up to the Department of Justice or 
headquarters recommending surveillance or court order, arrest, 
or whatever. Would that have to be coordinated through the 
Homeland Security Department, or would it still go to the 
Department of Justice and the FBI?
    Director Ridge. Mr. Chairman, it is our belief the way the 
legislation is drafted that something like the Phoenix memo 
would be categorized as an FBI report, and the information in 
that report relative to homeland security would be not only 
forwarded to the FBI, because obviously is it an FBI product, 
but there is an affirmative obligation on behalf of the FBI to 
forward that report to the Department of Homeland Security in 
their Information Analysis Unit.
    Chairman Leahy. The President has proposed exempting the 
new Department from certain conflict-of-interest laws and 
procurement regulations, proposed allowing the Department to 
set up private advisory committees and exempting the Department 
from the anti-secrecy provisions under the Federal Advisory 
Committee Act. So you could have secret committees staffed by 
outside corporate officers with a financial interest in the 
outcome, giving recommendations to the new Department, if you 
would, through all the different things, everything from the 
preservation of offshore fisheries and food safety.
    Do we really need this? I mean, I could think of some 
instances where some would be rubbing their hands in glee to 
get on those secret advisory committees. Do we really need 
that?
    Director Ridge. Well, I believe the President's design and 
desire is to at least give the new Secretary the capacity or 
the option, if the circumstances warranted, during any time 
during not only the organizational setup of the new Department, 
but in the future, to bring together as quickly as possible the 
kind of professionalism and expertise that may only be 
available through the private sector.
    Chairman Leahy. In secret?
    Director Ridge. I think depending on the nature of the 
challenge before the Department of Homeland Security, it is 
conceivable that that circumstance could arrive.
    Chairman Leahy. Waiving?
    Director Ridge. I think rare--
    Chairman Leahy. Waiving all conflict-of-interest laws?
    Director Ridge. Mr. Chairman, you raise a very interesting 
question that we have had to deal with in a very real way, even 
during the operation of the small White House Office of 
Homeland Security, and that is, that you all know within the 
private sector and elsewhere, in the academic world--but we are 
talking primarily about the private sector--there is enormous 
expertise. There are men and women who spent their lives 
developing a background of knowledge and experience that I 
think we would want on occasion to be available as quickly as 
possible, depending on the urgency, depending on the need of 
the Federal Government to secure the homeland, but there are 
enormous reservations for people to come on board as we are 
looking for solutions because there is always in the back of 
somebody's mind, they may be coming in to look for solutions, 
but we anticipate the worst and suggest or infer that they 
really want to sell products. That is how people are concerned 
about conflict, and I do--
    Chairman Leahy. But why don't we just work on the overall 
conflict-of-interest laws to make them a little bit clearer and 
simpler to handle rather than somebody just having total 
exemption from them? I mean, that is my issue.
    My time is up.
    Director Ridge. I would welcome to work on that with you, 
Senator, because I have seen it firsthand. I think we want to 
make sure that the public's interest is protected both from 
undue influence and any proper relationship with the Federal 
Government, but also the public and national interest is 
promoted and enhanced by getting this expertise in when we need 
it.
    Chairman Leahy. Thank you.
    Senator Specter.

STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM THE STATE 
                        OF PENNSYLVANIA

    Senator Specter. Thank you, Mr. Chairman.
    At the outset, Governor Ridge, I commend the President for 
coming forward with a legislative proposal for a Secretary of 
Homeland Defense, and I compliment you on the excellent work 
which you have done to date in a very, very difficult position.
    Last October, Senator Lieberman and I introduced 
legislation to structure homeland security. There have been 
very significant developments since that time, which I think 
require focusing on major deficiencies in the intelligence 
community in their current operation and also on the need to 
restructure the intelligence community.
    This committee had hearings with Director Mueller of the 
FBI which disclosed very material shortcomings on the FBI's 
internal operation on processing reports illustrated by the 
Phoenix report where there were indicators of suspicious young 
men taking aeronautical training, having big posters of Osama 
bin Laden in their rooms, something that should have alerted 
the FBI last July.
    In some detail, Agent Coleen Rowley described the prevails 
of trying to get a warrant under the Foreign Intelligence 
Surveillance Act and the obstacles reached in headquarters 
where the wrong standards were being applied for what was 
probable cause and even a challenge as to whether Zacarias 
Moussaoui, who was suspect in Morocco and Paris, was the same 
Zacarias Moussaoui as if that was a common name. Those pose 
really big difficulties which candidly this committee ought to 
be doing more on.
    We have found the same problems present on the Foreign 
Intelligence Surveillance Act standards today which we found 
when we investigated the Wen Ho Lee case several years ago 
where it is now conceded that the Attorney General personally 
did not move for a warrant which could have shed tremendous 
light on what Dr. Wen Ho Lee was doing.
    I suggest to you that the Secretary of Homeland Defense is 
going to have the responsibility to really superintend this 
very, very critical area.
    With respect to the structure of the operation, I would 
appreciate it if you would take a look at legislation which my 
staff and I have prepared, which calls for the creation of a 
national terrorism assessment center within the Office of 
Secretary of Homeland Defense, and this is an updated effort to 
accomplish what many have tried in the past to make a central 
repository available for all of the intelligence information.
    When I chaired the Intelligence Committee in the 104th 
Congress in 1996, I proposed legislation which would have 
brought all intelligence agencies under the direction of the 
director of Central Intelligence, and that has been fought on 
many lines on the traditional Washington turf battles, 
including the Department of Defense, which traditionally says 
they ought not to have anyone over them, even a coordinator, 
because of their responsibility to fight wars, which, of 
course, is the heaviest responsibility of all, but there have 
been proposals, including that by the present Scowcroft group 
which would accommodate the Department of Defense's proposals.
    The legislation which my staff and I have prepared would 
centralize analysts from not only the FBI and CIA, but the 
National Security Agency, the Defense Intelligence Agency, the 
National Imagery and Mapping Agency, the National 
Reconnaissance Office, Intelligence from the Secretary of 
State, to bring in one spot, finally and irrevocably, the full 
picture on intelligence.
    If we put together all of the information which was 
available prior to 9/11, there is a very distinct possibility, 
in fact, even perhaps a probability, that 9/11 could be 
averted. We all know 20/20 hindsight has perfect vision, but 
when you put together the pieces of the Phoenix report with the 
young suspicious men getting aeronautical training, big posters 
of Osama bin Laden, when you put together what Zacarias 
Moussaoui had in his computer, practically a blueprint for 9/
11, one of the conspirators on the air attacks, if you put 
together what Merad confessed in 1996, a Pakistani with 
connections with Al-Qaeda, when you put together what the CIA 
knew about the two men in Kuala Lumpur, when you add in what 
the National Security Agency had the day before on a possible 
attack, September 10th, some notice, that there was a 
possibility of an attack on September 11th and it was put on a 
2-day review, a lot of good a 2-day review does when you have a 
warning for the very next day. But the point is that on all of 
these matters, there really is a need to put it in one spot, 
and homeland security, in my view, is the spot. That is what we 
are creating now, and as you aptly note, the biggest 
reorganization of the Federal Government since 1947.
    I would ask you to study the proposal in depth, but I would 
be interested at this point in your thinking on this subject.
    Director Ridge. Thank you, Senator, and I will look forward 
to exploring it in depth with you as well.
    As you know, the President's initiative to a certain extent 
begins the integration effort that you see is vital for us to 
enhance our ability to protect this country with the 
Information Analysis and Critical Structure Center. However, 
the Department of Homeland Security will not have any 
collection ability. The President is very sensitive to the fact 
that the information collection ability has been properly given 
and regulated and overseen in the CIA and the FBI, but this new 
Department would have the opportunity to get the work product 
not only from those agencies, but the work product, the 
analytical work that has been done, by the other agencies. Many 
of them are included in your legislation.
    The purpose of this unit within the Department, Senator, is 
really to take those threat assessments, map them against the 
vulnerabilities we have in this country, and perform the back-
end operations, what do we need to do to harden these targets, 
to reduce the vulnerabilities, to make it progressively, year 
after year, more difficult for terrorists to attack 
successfully.
    The prevention side, which you are obviously very concerned 
in and is very much at the heart of homeland security, 
investigate, identify, and intradict, get them before they 
attack, is something that the Counterterrorism Center that is 
being substantially enhanced by the CIA and the new work the 
Center for Intelligence that the FBI director has undertaken I 
think is a place where the President envisions that kind of 
amalgamation, aggregation of information, is more appropriately 
placed.
    This center, as designed in this legislation, is really to 
take the work product of these agencies, map it against and 
match it against the vulnerabilities, and then make 
recommendations for either the private sector, for that 
company, for that community to harden itself against the 
terrorist attack.
    I am anxious to take a look in greater detail at your 
legislation and continue this conversation.
    Senator Specter. Well, thank you very much, Governor Ridge. 
I do not disagree with your articulation of the President's 
policy that homeland security ought not to be a collector. I 
don't disagree with that at all, but that does not in any way 
impede upon the suggestion that I am making that there ought to 
be analysts from each of these Departments which would have 
full access to everything collected by those Departments, so it 
can be put under one uniform microscope.
    One concluding comment, Mr. Chairman, and that is on the 
ability of Congress to do oversight. It is a recurrent theme 
for many of us that we need to do a great deal more oversight, 
and tomorrow we will be taking a look in a closed session on 
what happened on the Foreign Intelligence Surveillance Act on 
Zacarias Moussaoui and what happened with the FISA court on 
their reluctance to hear from certain of the FBI agents. That 
is something we are going to be going into.
    I believe it is indispensable for the Congress to maintain 
vigorous independent oversight, and while it is not directly on 
point, it is relevant here to comment about having the FBI 
investigate the Intelligence Agency leaks. My view is that is a 
colossal mistake. It is just not realistic to have the 
Intelligence Committee investigating the FBI and having the FBI 
investigate the Intelligence Committee without the unmistakable 
inference that somebody is pulling the punches.
    On separation of powers, if necessary, there could be 
independent counsel, as there was on leaks in the Clarence 
Thomas confirmation hearing where Senators were questioned by 
independent counsel, not a very pleasant experience. I was one 
of those who were questioned. Either the Congress ought to 
investigate itself or through the Ethics Committee, but there 
should not be a chilling effect on our ability, the 
congressional ability for oversight, which is so urgently 
needed to help you in your important job.
    Director Ridge. Thank you, Senator.
    Senator Specter. Thank you, Governor.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Senator Kohl.

 STATEMENT OF HON. HERBERT KOHL, A U.S. SENATOR FROM THE STATE 
                          OF WISCONSIN

    Senator Kohl. Governor Ridge, when FBI Director Mueller 
testified before our committee earlier this month, I asked him 
about the total absence of preboarding screening for passengers 
on chartered aircraft.
    Today, almost anyone with a high-enough credit can charter 
a 747 airplane, bring whomever they want on board and bring 
whatever they want on board, including weapons, and potentially 
repeat the horrific events of September 11th.
    Now, after much prodding from my office, the Transportation 
Security Administration issued a regulation requiring those 
passengers who charter very large aircraft, those over 95,000-
pounds takeoff weight, which is about the size of a DC-9, to 
undergo preboarding screening, just as passengers on a 
commercial airline would.
    We are happy they took at least this step, but let me ask 
you a question about chartered aircraft security from the 
perspective of the administration official who is responsible 
for homeland security.
    Governor Ridge, do you believe that we are at so little 
risk of a terrorist using a chartered aircraft as a weapon that 
we do not need any screening of chartered aircraft passengers 
and their baggage on chartered planes smaller than DC-9's?
    Director Ridge. Senator, I believe that the recently 
promulgated regulations are a step in the right direction, but 
as you well know, because you had to be persistent and 
insistent to get the regulations issued that, prior to your 
involvement and hopefully the advocacy of others, there was no 
regulation of private-chartered aircraft at all.
    I believe that as we continue to address the question of 
transportation security, more work needs to be done with the 
access to chartered aircraft. As I said before, I think you are 
moving in the right direction. I am not sure we have completed 
our mission there.
    Senator Kohl. Could you give us some indication as to when 
your office might come up with a more complete policy on 
chartered aircraft security?
    Director Ridge. I believe that we were working in tandem, 
unknowingly, at the same time you were encouraging the TSA to 
come up with some regulations. We were urging them to do the 
same thing.
    I believe that the Congress vested in the Transportation 
Security Administration, the responsibility to deal with this 
issue. It is their primary responsibility. We need to ensure 
that they pay closer attention to this, and as you have alluded 
to, heretofore there has been no requirement, no regulations 
related to private aircraft, and we will continue to work with 
you and the FAA to see that those who charter the aircraft, the 
baggage put aboard the aircraft, that these are normally done 
through privately controlled entities, which previously the 
Government had little or no regulatory authority, we have to 
visit that with you in order to accomplish that task.
    Senator Kohl. Thank you. I hope that you will attach enough 
urgency to it to come up with a more complete policy, 
obviously, as soon as possible because, potentially, we could 
have, as you know, a disaster tomorrow.
    Director Ridge. We have, Senator, to your point, with your 
insistence, but we have worked through the FAA. We have worked 
with the TSA. We have sent out advisories. We have made 
recommendations. The FBI sent out intellesats to State and 
local law enforcement to make them aware of the possibility of 
the use of these privately chartered aircraft for terrorist 
purposes.
    There has been followup within the law enforcement 
community visiting some of these facilities, but at the end of 
the day, we still don't have the comprehensive wraparound that 
I think you believe we need and I think we are all working 
toward.
    Again, prior to 9/11, we didn't think people would turn 
aircraft into missiles. We now know they do. We also know there 
is no regulatory underpinning to deal with the privately 
chartered aircraft. We have made a step in that direction, but 
we have more steps to take, and we need to take them sooner 
rather than later.
    Senator Kohl. Thank you.
    Governor Ridge, all of us have recently been alerted to 
concerns about dirty bombs, and the arrest of a man in Chicago 
who was allegedly planning to build one shows that it is not an 
idle concern.
    On considering who would have jurisdiction over the case 
under the administration's proposed reorganization, it seems 
likely that the Department of Homeland Security would be 
involved because of the potential for chemical or biological 
assault, and yet the ATF is the expert agency in bomb-making 
and in regulating explosives, and as you know, it is not part 
of the new Department.
    Governor Ridge, it seems odd that ATF, the agency which 
played a crucial role in domestic terrorism events such as 
solving the 1993 World Trade Center bombing and linking the 
Olympics bombing to a suspect, would be left out of the new 
Department of Homeland Security. Can you comment on why the 
administration chose to leave the ATF at Treasury, whether you 
would be amenable to moving it to the new Department of 
Homeland Security, and whether the administration considered, 
as we heard, moving ATF to the Department of Justice?
    Director Ridge. Senator, first of all, if the organization, 
as requested by the President, occurs, I suspect that there 
will be a great deal of interest both within the executive 
branch and legislative branch to take a look at the various 
pieces that remain associated with the Departments to see if 
they ought to be reconfigured either into this Department or 
placed elsewhere, No. 1. So I think that would be an 
undertaking worth both of our time.
    Second, the ATF, as we looked at it for purposes of this 
agency, while it had domestic terrorism roles and potential 
missions, we felt that at least for the time being, there were 
more responsibilities not related to domestic terrorism and the 
kind of intergovernmental work and collaboration that we would 
need to undertake with the ATF could be done through 
memorandums of understanding. It could be done through 
interagency cooperation, like it is done with a lot of other 
agencies, but they do have multiple missions. They do have a 
role to play within homeland security dealing with domestic 
terrorist threats. You have alluded to one perfect example, but 
their primary missions seem to be outside that venue, and we 
would work with them in a structured way, but not as a formal 
part of this Department.
    Senator Kohl. I thank you so much.
    Chairman Leahy. Senator DeWine.

STATEMENT OF HON. MIKE DEWINE, A U.S. SENATOR FROM THE STATE OF 
                              OHIO

    Senator DeWine. Governor, thanks for being with us.
    Director Ridge. Good to see you again. Thank you.
    Senator DeWine. Let me first congratulate you and the 
President on this proposal.
    I think it is important that, as we discuss this proposal, 
we articulate to the American people that the creation of this 
new Department with this entirely new structure does not negate 
our obligation to do other things.
    This is not an ``or'' situation. It is an ``and'' 
situation, and I think there has been a little confusion in the 
public debate. You have been criticized. The President has been 
criticized. Some are saying that this doesn't solve all of our 
problems. Well, of course, it doesn't solve all of our 
problems. It will help. It will do some things that need to be 
done.
    It obviously is not going to mean that it doesn't deal with 
the fact, as you have already articulated this morning, that we 
need to do a better job with technology in the FBI. We need to 
get the FBI caught up to the present. We need to give them the 
same capability that the private sector has. We need to 
maintain the cooperation that the FBI and CIA directors are 
clearly demonstrating. We need to speed that cooperation down 
through the culture of these two institutions, down to people 
who have been there 15 and 20 years, who have seen the missions 
of these two organization's as different over the years.
    We have to get people who fundamentally speak languages 
that are very difficult for those of us who have English as our 
first or only language. These are things that we have to do, 
and we have to make a long-term commitment to do them year 
after year after year and to spend the money to support them.
    So I would like your comment on that. Maybe this is, Mr. 
Chairman, more of a statement than a question, but it seems to 
me that we need to be very clear to the American people that it 
is not an either/or situation. To me, it is an ``and.'' We have 
to do more. We can legitimately debate how we restructure 
homeland security, but at the same time, we need to be moving 
forward in the other areas that I have articulated as well.
    Director Ridge. Senator, I thank you for sharing that view 
so publicly. It is very appropriate for us to take a look at 
this reorganization effort as one of many steps the country 
needs to take, to enhance its ability to protect itself and its 
way of life.
    One of the interesting features of this reorientation or 
reorganization is that the structure lends itself to developing 
stronger partnerships with the State and local governments and 
stronger partnerships under the right kind of circumstances 
with the private sector.
    The structure lends itself to the development of a new 
product. There will be a new capacity within the Federal 
Government, and that new capacity of that new product will be 
the recommendations that the Federal Government will make based 
on the threat assessments it receives mapped against the 
vulnerabilities that it is aware of. The recommendations and 
the protective measures and the prescriptive measures that the 
Federal Government, perhaps working with the State and 
localities or the private sector, will be encouraged or urged 
or supported to do.
    We don't have a place in the Federal Government now where 
someone looks at the threats, has done a vulnerability 
assessment, puts the two together, and then gives some 
direction to the efforts that should be undertaken by other 
levels of Government, by the other Federal agencies, or by the 
private sector to harden targets.
    So we need to give some specific direction to people, to 
organizations, to companies, to sectors in the economy based on 
the threat and the vulnerability assessment. So there will be a 
new capacity within the Federal Government, but then in and of 
itself, we still need a lot of other folks to continue to work 
as hard and as aggressively as they have since 9/11 to do their 
job better.
    Senator DeWine. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Senator Biden was here earlier, the former chairman of this 
committee. He is also the chairman of the Foreign Relations 
Committee, and there is a conflicting hearing which he has to 
go to, but he will have written questions, Governor, and I will 
make sure those are given to you.
    I would also indicate for members of the committee, if 
there are those who have followup questions--I will have some--
we will submit them in writing, something you are well familiar 
with.
    Senator DeWine. I did that during my 12 years as a Member 
of the House, Mr. Chairman. We anticipate and expect them and 
are grateful for them.
    Chairman Leahy. If there is any Member of Congress, present 
or former, who hasn't submitted questions in writing at some 
time or another, they didn't go to very many hearings.
    Senator DeWine. They didn't earn their paycheck.
    Chairman Leahy. Senator Feinstein.
    As I noted in my opening statement, Senator Feinstein 
chairs our Terrorism Subcommittee, but has been actively 
involved in this issue for some time.
    Senator Feinstein.

  STATEMENT OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Feinstein. Thanks very much, Mr. Chairman.
    Good morning, Mr. Ridge.
    Director Ridge. Good morning, Senator.
    Senator Feinstein. As you know, because we have talked 
about it before, I very much wanted you to have both budgetary 
and statutory authority over the homeland defense area. Now you 
have it apparently or will possibly have it big time, and maybe 
too much big time. That is what I wanted to spend a little bit 
of time with you this morning to discuss.
    Yesterday, we had a hearing, and Senator Rudman testified, 
Governor Gilmore testified, and a couple of people from 
Brookings and Cato Institute testified on this proposal. As you 
know--you mentioned the Rudman Commission--they suggested a 
much smaller agency.
    Director Ridge. Right.
    Senator Feinstein. This is really a mega-agency. I am told 
it is really over 170,000 employees, probably closer to 270,000 
employees. It will cost a good deal more, and into it, you have 
taken nearly whole Departments. I wanted to ask you some 
questions about the wisdom of doing that.
    I also sit on the Immigration Subcommittee, and I wonder 
about the wisdom of taking all of the Immigration Department 
into homeland defense. I am not sure you want to be in charge 
of marriage fraud for newcomers. I am not sure you want to be 
in charge of the inspection of workplaces for illegal aliens. I 
am not sure you want to be in charge of the Children's Bureau. 
We have got 5,000 children who come here unaccompanied in 
various facilities, some of them detention facilities. It 
doesn't seem to me that that is an appropriate thing for 
homeland defense.
    I am not sure you want to be in charge of the 
naturalization processes of INS. It seems to me that what you 
do want is, as you have said, Border Patrol and immigration 
inspections, counterterrorism intelligence, terrorist 
investigations involving document fraud and alien smuggling, 
and oversight over visa issuance.
    I also think you probably want to have the consular 
services of the State Department. That is the agency that 
issues the visa. We held hearings in our subcommittee, and Ms. 
Ryan said one of the reasons they authorized the visas was 
because they had no intelligence. It seems to me that that 
aspect ought to go into homeland defense.
    I understand why you want the Coast Guard, and although I 
think the appropriate agency is National Guard, I understand 
and am sympathetic to the Coast Guard.
    On the other hand, the FBI is relinquishing a lot of its 
narcotics work. The Coast Guard is the primary agency for going 
after the big go-fast boats that bring in most of the narcotics 
from South and Central America. They will, I guess, no longer 
do that.
    So, if you have two agencies now relinquishing control over 
the big shipments of narcotics, that control concerns me very 
greatly.
    I guess my first concern is that, and I am just going to 
indicate my two other concerns and then let you respond, as you 
might wish to.
    Yesterday, it was brought out that the new Department would 
have 27 Presidential appointments, only 14 subject to Senate 
confirmation. You create essentially two tiers of assistant 
secretaries, and this would be the first time in history that 
10 assistant secretaries would have no advice and consent from 
the Senate. I think that is a concern as well.
    Additionally, the personnel changes are really starkly 
dramatic, and I don't know in this word ``flexibility'' if you 
really want to include an across-the-board arbitrary personnel 
reforms that the President's proposal calls for.
    The third area of concern has to do with my service on 
Intelligence. I am sorry Senator Specter isn't here because I 
come from where he does in his comments except that I end up at 
a different place.
    We have more than 12 intelligence agencies right now under 
a DCI. The amount of intelligence that comes in, in bits and 
pieces, one way or another, is in the tens of thousands a day. 
So it is huge.
    We have the FBI now getting into the intelligence business, 
and you are getting into the intelligence business. My concern 
is that rather than improve the communication and 
interrelationship and expedited movement of data, we are going 
to slow it down.
    I have just proposed a director of National Intelligence. I 
mean the largest agency, an intelligence agency, is NSA. NSA 
has 80 percent of the intelligence budget, and yet the DCI runs 
CIA, runs the entire intelligence community, and also does 
things in the Middle East. I am not really sure that that is 
the best way to run our intelligence community. I think you 
need somebody really at the top over all of the intelligence of 
our Nation, and to that end, I have introduced this legislation 
to create a director of National Intelligence appointed by the 
President with a 10-year term with budget authority to sort of 
move chessmen across the board based on need in the 
intelligence community.
    I appreciate that you don't want to be an intelligence 
collection agency, and if I understood what you said to Senator 
Specter, you said you didn't want to actually do the all-source 
analysis yourself, meaning your agency, but you would be a 
recipient of all-source analyzed intelligence, which I think is 
appropriate, but my concern is that we not spread the 
intelligence community so thin without the kind of oversight 
that we have less expedited transference of all-source analyzed 
intelligence. If you could comment on those three aspects, too 
big, the personnel aspects, and the intelligence aspects.
    Director Ridge. Senator, the Hart-Rudman proposal, I think 
when it included the INS and the Customs and the Coast Guard, 
basically the Border--
    Senator Feinstein. The Border Patrol.
    Director Ridge. The Border Patrol. The consolidation of 
some of these agencies was very consistent with the private 
conversations you and I had about a comprehensive approach 
toward the borders, and I believe it is the--it is the 
President's belief in his initiative that the INS should be 
included because who comes into the country and what comes into 
the country has very much to do with the sovereignty of the 
country and the security of the country.
    So, even though in this package, in this proposal, there is 
a separation between the immigration services, which you have 
historically been very concerned about and very sensitive to 
and really helped try to reform and drive the reform of that 
process, and separated from the enforcement side, it is the 
President's belief that putting them into the new Department as 
part of a comprehensive board approach is very appropriate.
    They were multi-tasked into the Justice Department, the 
functions that you are talking about, whether it is adoption or 
asylum or refugee or those kind of things.
    Senator Feinstein. Workplace inspections?
    Director Ridge. Pardon me?
    Senator Feinstein. Workplace inspections?
    Director Ridge. Well, but I mean, again, to your point, 
there are a lot of agencies and departments that would be 
pulled in, Senator, to the new Department of Homeland Security 
whose primary mission or importance will be to security, but 
they will have other very important missions that are not 
directly related to it.
    It is our belief that pulling them in this structure, 
undergoing reform not only by the present commission, but 
obviously there is a great deal of discussion about reform in 
the House and Senate, will make it a better agency, and it 
needs to be part of a comprehensive border approach.
    There is information sharing relative to some of the tasks 
that you have alluded to that might be relevant to whether a 
visa should or should not be given or perhaps a visa should be 
revoked. So we think we need to take a look at the INS, 
separate the immigration service from the enforcement function, 
but integrate the sharing of information and understanding that 
not everything they do, like a lot of other agencies, will be 
directly related to homeland security, but better to have a 
comprehensive approach in one agency over which there is 
controlling legal authority rather than dividing the 
responsibility between two or more Cabinet agencies.
    Senator Feinstein. Let me just stop you here for 1 second 
because it is important. We have 5,000 children. Take Elian 
Gonzalez, for example. If Elian Gonzalez didn't have a family 
in Miami, he could end up in a detention center, and he could 
sit there month after month and even year after year. He 
doesn't have access to an attorney. There is no guardian ad 
litem provided for him under the present system, and we have 
5,000 children at any given time in that kind of custody. Now, 
that is going to go into an office of homeland defense, it just 
doesn't seem to make sense to me.
    I am trying to get a separate children's agency set up so 
that children that come--I saw one girl who was in a container 
from China, and her parents died, and she was shackled hand and 
foot in front of a judge. She couldn't speak English. Her nose 
was running. She was crying. She couldn't get her hands up to 
her face because she was shackled to her feet. That is what we 
are doing today, and I am not sure that homeland defense is the 
agency to put children into--when they need some other concerns 
as what is the best placement for them, do they have a family 
to return home to, if not what are we going to do with them. 
This is not an inconsequential issue because there are 5,000 of 
them.
    Director Ridge. Senator, I agree with you, having observed 
some several dozen children behind a plexiglas partition in El 
Paso, and you say to yourself, you can understand perhaps why 
they want to come to this country. You don't know whether they 
made the effort with parental consent or not, but they are 
alone. They are frightened, and your interest as well as the 
commissioner's interest in trying to deal with it I don't think 
will be undermined by the fact that that portion of the INS 
focused on these children, in fairness to children and 
sensitivity to children, would be in an Office of Homeland 
Security.
    Again, as you well know better than most, since it is an 
issue that you have dealt with during your time in Congress, 
there are a lot of issues that are not directly related to who 
comes into the country, who is given a visa, who is asked to 
leave the country. There are other very important issues, but I 
truly believe that the reform that would be undertaken could be 
undertaken within the INS, within this new Department.
    Just as the Coast Guard is going to have an enhanced 
mission dealing with port security and port security, they will 
still have maritime fishing responsibilities and boating safety 
responsibilities. They are multi-tasked organizations. To try 
to segregate and separate them, I think it would a very 
difficult, almost impossible task, and not necessarily 
guarantee the kind of reform or improvement that we would all 
seek.
    If I might real quickly to that end, the President has 
recognized in the 2003 budget--and you alluded to the Coast 
Guard--the fact that they have an enhanced mission. Therefore, 
because of the enhanced mission, they need additional support 
for more personnel, more boats, more aircraft. He is going to 
buildup that capacity. So I would say to you--
    Senator Feinstein. And intradiction--
    Director Ridge. Yes.
    Senator Feinstein [continuing]. Of large narcotics 
trafficking by sea?
    Director Ridge. Yes.
    Senator Feinstein. Will they still have that 
responsibility?
    Director Ridge. I think that must continue to be a goal, 
objective, part of the mission of the Coast Guard.
    I met with the joint task force that the Coast Guard put 
together out in Key West where they work with the DEA and the 
FBI and frankly the Department of Defense and others, and I 
candidly believe that integrating these border agencies, 
ultimately developing the technology to share information, it 
will be a lot easier to see that the integration and 
coordination is done aggressively when you have a command 
structure that says this is the goal, this is the objective, 
you are the agencies or departments that must work together to 
achieve the goal, develop the plan, and get it done.
    There is a lot to be said for unitary command structure 
that puts these people together and directs their mission, but, 
again, you have raised an issue that a lot of your other 
colleagues have raised. There are some entities that are pulled 
in as part of this agency that will be tasked to do things that 
are not directly related to homeland security. We still think 
because they have been multi-tasked in other Departments, with 
the appropriate leadership, they will get it done in this 
agency as well.
    Senator Feinstein. Could you just make a quick comment on 
the intelligence aspect?
    Director Ridge. Yes. The President's design for the new 
Department is really to create a new product that has less to 
do with the tactical operation of investigating terrorists or 
directly the CIA to do certain things in the field, but we will 
work with the CIA and the FBI in this agency to take a look at 
the threat assessments to create the new capacity and the new 
product which is giving instruction, giving direction, 
identifying protective measures that we need to harden targets 
around America. That is the new product. That is the new 
capacity.
    What we don't have in this country, we don't have right now 
within the Federal Government, the ability to match the 
vulnerabilities with the threats and then give some specific 
direction as to what we need to do to protect ourselves. That 
is the President's intention.
    The President is quite aware that you and Senator Specter, 
Senator Leahy, and many, many others are concerned about 
centralizing all of the information relative to domestic 
terrorism, very much aware that the recommendations with regard 
to CIA and FBI reforms may very well be coming forth. You are 
going to do some legislation with some of these 
recommendations, but the President believes that reform 
involving the CIA and the FBI should be with those entities, 
but not within this one.
    Senator Feinstein. Thank you.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Senator Sessions.

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM THE STATE 
                           OF ALABAMA

    Senator Sessions. Thank you, Mr. Chairman.
    This is an important hearing, and we are glad to have you 
here, Mr. Ridge, and thank you for your service.
    I know as you started out as the President's guide, you had 
to try to take all of those various agencies that have parts of 
them that relate to homeland security, and try to make them 
work together. I think you certainly have, and the President 
has, energized those agencies.
    As I talk to people involved with terrorism matters, they 
know without any doubt that the President of the United States 
expects them to make homeland security No. 1. They may have 
other ideas and problems. They may be investigating drug 
smugglers or bank robbers or other things, but they know 
without any doubt that terrorism is No. 1.
    Since you have done this and you work with all of these 
agencies and tried to reach agreements with them to give this 
priority to homeland security, you obviously, and the President 
has obviously, reached a conclusion that this is not a long-
term solution, that the reorganization is necessary.
    Would you just sort of summarize again for me why you have 
concluded that we can't operate as business as usual, but you 
need this new agency to carry out the high priority we give the 
homeland security?
    Director Ridge. Senator, after review of all the 
commissions that had studied homeland security issues, 
conversations with Members of Congress, think tanks, the 
private sector, the President concluded that we could 
dramatically improve our ability to protect ourselves and our 
way of life if we created a single agency whose primary mission 
was to secure the homeland.
    The President concluded that there are various aspects of 
homeland security. One deals with the new integration analysis 
component that will help us harden targets. I mean, we will 
finally have the capacity to give very specific directions to 
address vulnerabilities.
    One is to consolidate the effort on the border. There have 
been discussions about border security and border issues since 
the 1920's and the 1930's. It has been recommended over and 
over and over again, but we have never done it. 9/11 gave us a 
different perspective that we need to control who and what, and 
we needed to do it in a way that will not impede the flow of 
goods and commerce between the United States, Mexico, and 
Canada. We need to take that new model of the border agreement, 
because we are such an open and welcoming, trusting country, 
and ultimately that is going to have an international impact on 
us as well. We are going to have to get our allies to be 
thinking about the airlines and about container traffic and 
commercial international shipping just as we do.
    The President has also thought that you could build on core 
competencies of Departments to help communities prepare for the 
eventuality of the possibility of a terrorist attack. That is 
why he grafted the Federal Emergency Management Agency that has 
these core competencies that deals with first responders on a 
day-to-day basis for natural disasters.
    Then, finally, the President took a look at again well-
intentioned but disparate agencies and programs that deal with 
research and development that have an impact on homeland 
security and said we need a strategic focus. We need a 
strategic focus to direct these research dollars based on our 
threat assessments, based on our vulnerability. So, at the end 
of the day, you create an agency whose primary mission is to 
enhance security, not the exclusive mission.
    This is not an agency--and I am sorry, Senator Feinstein--
that will lose its heart. America has a big heart. We are open. 
We are welcoming. We are trusting. That is one of the qualities 
that makes us unique. That is also one of the qualities that 
makes us vulnerable, and we understand that there are some very 
human personal issues that we involve with some of these 
agencies such as the children that she is worried about. 
America is not going to lose its heart. These children aren't 
going to be lost in a new Department, but the fact of the 
matter is that, at the end of the day, giving one agency whose 
primary focus is homeland security, it is at the heart of the 
President's proposal.
    The President and Congress always like to align authority 
with accountability. Now it is aligned in an apparently 
straightforward manner, and at the end of the day, the 
President believes, and I believe Congress will ultimately 
conclude, hopefully that that is the best way to get things 
done, hopefully get them done quickly, but also get them done 
correctly.
    Senator Sessions. With regard to your affirmation of the 
need to work with State and local law enforcement, I do 
appreciate your emphasis on training. I am glad you visited the 
Center for Domestic Preparedness in Anniston, Alabama.
    Are you committed, and will this new agency be committed, 
to bringing in local law enforcement, who are going to be the 
first responders in most instances, in making sure they are 
fully trained and equipped? Will that be one of your goals?
    Director Ridge. We will never have the national capacity to 
protect and defend ourselves unless we do, and that is, again, 
very much at the heart of the President's proposal. It is at 
the heart of his budget recommendation that the Congress will 
be dealing with, with the $3.5 billion to make the Federal 
Emergency Management Agency the centerpiece of that outreach 
effort with State and local communities, to help train, help 
exercise, and help equip our first responders.
    Senator Sessions. It is a critical thing, and we probably 
have 10 local agents for every one Federal or maybe 9.5 for 
every one Federal. So, if they are not engaged, we are giving 
up one of the biggest resources we have available to us.
    Director Ridge. I must tell you, Senator, that in my 
conversations with many mayors and several Governors, the 
notion that the State and locals could come to one agency, a 
one-stop shop, as you will, to apply for these preparedness 
grants dealing with first responders has a great deal of appeal 
to our colleagues in public service at other levels of 
Government.
    Senator Sessions. Well, I believe it could help to make 
sure we have a uniform view of this whole matter of training 
and having some standards that work, and I salute you for that.
    I have had a number of people ask about proposals they have 
for technology that could help us. I know Senator Kit Bond 
proposed a job fair, but I really believe that the Federal 
Government should have a good location, a central place where 
somebody who has the kind of ideas that they think will help us 
could at least be heard. Do you think we are there yet, or can 
we do better in providing access for people to present their 
ideas? Some of them may be wacky, but some of them may be full 
of insight.
    Director Ridge. Senator, we are not there yet. We are 
moving in that direction, but we are not where we need to be. 
Were we moved in the past couple of months is an agreement with 
the Office of Science and Technology Policy within the White 
House to set up an infrastructure where we can get some of 
these wonderful ideas, these potential solutions to a variety 
of problems. We haven't had them tested to see whether or not 
they are as good as they say they are, they do what they claim 
they can do.
    Over the long term, we need a mechanism, a place within the 
Department of Homeland Security to do the evaluation and 
assessment, and that is one of the features of the unit that 
would be dealing with the research and development and the 
countermeasures to weapons of mass destruction, all aspects of 
homeland security, technology and all the applications of 
existing technology and the new products down the road. This 
would be the very appropriate place to vet them and determine 
whether or not they function as promised, see if they fit into 
an overall system that we have recommended to the country.
    We need that assessment capacity. We don't have it yet. We 
are working toward it, but we need to make it a permanent part 
of the infrastructure of homeland security, and the President's 
initiative does that.
    Senator Sessions. I appreciate that.
    With regard to immigration, you have made some statements I 
thought were important, such as people need to know that they 
must play by the rules.
    We have very generous immigration rules, which I support. 
Most of us believe that immigration does help our Nation and 
strengthen it, but we also believe it needs to be done 
according to the rules. We are just not able to open this great 
country to anybody who wants to come here without any kind of 
paperwork at all. So I believe you also said that an America, 
whose laws are fairly enforced, will be safer and more 
tolerant. I think that is a good line.
    Just for example, Mr. Ridge, I just learned yesterday that 
we have two INS agents in the State of Alabama. One of them is 
assigned to the President. Only one is available to help all 
three United States Attorneys deal with conspiracy cases or 
maybe drug smuggling that may have an immigration component to 
it.
    I met with police chiefs recently, and they told me that 
they had been told by INS if they arrest people here illegally, 
if there is not more than 24, not to bother to call them or 
they will not be able to come to pick them up. So somehow we 
are saying at this level that we have a legal system that deals 
with controlling immigration in a rational and fair way, but 
the reality is we are not there. We are really not there. It is 
worse than most people realize.
    Do you think this reorganization can help us with that? 
Because I think that we are just going to have to simply do 
better.
    Director Ridge. Congress tried to effect a change in this 
several years ago when they recommended an entry/exit system, 
which the President supports, and clearly, with the border 
consolidation within the Department of Homeland Security and if 
the INS remains an integral part of that new Department, I 
think we will be in a much better position to effect that kind 
of change, as the Congress directed several years ago and the 
President has embraced.
    We do not have a system to monitor the entry of our guests 
or the exist of our guests. It is long overdue, and I think 
that this new agency will enable us to facilitate this a lot 
quicker.
    Senator Sessions. Thank you. In many ways, I think that 
could make the system work much better for those people who are 
dutifully trying to follow our rules and policies and want to 
come here on the right conditions. I think we can make life 
better for them and tougher for those who want to violate the 
law.
    Director Ridge. And I think Americans understand that we 
are a nation of immigrants. The immigrants built this country. 
We want to remain a country with a heart. We want to remain a 
country that is open, but we also need to enforce our laws, 
even our immigration laws. Our national sovereignty, and 
recently our security, depends upon it.
    Chairman Leahy. Thank you.
    Senator Cantwell.

 STATEMENT OF MARIA CANTWELL, A U.S. SENATOR FROM THE STATE OF 
                           WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman.
    Governor Ridge, good to see you. We have had a chance to 
talk in some of our briefings with individual members about the 
overall integration of homeland defense and getting out our key 
focus of making sure that from intelligence gathering at the 
FBI that we have a flat organization that disseminates 
information more rapidly than what this committee heard from 
Special Agent Rowley had happened in the past events.
    One general question I have, and then I have a specific 
question, is how do we in the compilation of the new agency as 
well as the reforms within the FBI make sure that we are really 
building an organizational response to what are these 
asymmetrical terrorist attacks which are much smaller 
organizations, move much more rapidly information flows, and so 
we are talking about what is going to be our organizational 
response to that.
    When we look at the homeland security efforts and the new 
efforts within the FBI's intelligence gathering, it looks like 
an organization that has many layers to it. So how do we attack 
that goal of having a streamlined information flow so that we 
can respond more quickly to these attacks and process 
information more efficiently?
    Director Ridge. Well, I think, Senator, that within both 
the CIA and the FBI, that kind of restructuring and 
repositioning of assets is very much a part of an ongoing 
reform effort under the direction of both Director Mueller and 
Director Tenet.
    As you know, with congressional support, to expedite the 
flow of information for analytical purposes, you have given the 
FBI several hundred million dollars to finally bring it into 
the 21st century, into the digital world. What happened prior 
to Mueller's tenure, I do not know, but he inherited an 
organization that had a pretty difficult time communicating 
internally, let along externally. So I think the organizational 
changes and the technological changes will facilitate the flow 
of information and get it to the analysts a lot quicker.
    The new Department's piece of that information matrix is 
really designed not to collect information and deal with 
particular terrorists, but it is designed to identify 
vulnerabilities that are threatened and then direct specific 
action or encourage specific action be taken to harden the 
targets.
    I will give you an example. The Phoenix memo would have 
been available under the new Department of Homeland Security. 
There may have been other bits and pieces of information 
relative to the possible use of aircraft in a terrorist 
incident. Obviously, there are hijackings in the 1980's and 
hijackings in the 1990's, but we got that particular 
information. People talk about Moussaoui. They talk about 
Phoenix. If that information was available as part of the 
reporting and analytical data that would come to this new 
Department, and it would, the FBI and the CIA would continue to 
identify and to track and to work those issues as hard as they 
possibly could to identify potential terrorists, but the new 
Homeland Security Office would then take that threat and take a 
look at the vulnerability.
    The vulnerability is airplanes and airports, and they say 
what have we done as a country based on this threat that we 
have received and we are going to get from multiple sources 
about the potential use of aircraft and people taking flying 
lessons and the like. What have we done to harden cockpit 
doors? Have we put air marshals there? I am not saying that 
this is the conclusion that would have been reached. Hopefully, 
it would have been reached, but the new product, the new 
capacity within this Department is really to take advantage of 
the product given to us by the CIA, the FBI, and the other 
intelligence-gathering agencies. If there is a stream of 
information, of intelligence that points to a particular sector 
of our economy, in this instance it may have led the new 
Department of Homeland Security to take a look at aviation, 
perhaps we would have done something like the Transportation 
Security Act prior to 9/11 rather than after. So, you see, that 
is the new product. That is the new capacity within the 
Department of Homeland Security.
    Of course, the CIA and FBI will continue to make internal 
reforms, and down the road, your colleagues may also legislate 
some reforms to that end, but that is the President's design 
and intent with the information gathering and the information 
analysis within the new Department, to do the hard work at the 
back end, harden targets, take precautionary measures, 
protective measures based on threats matched with 
vulnerabilities.
    Senator Cantwell. I have no objection to the Homeland 
Security Office from the point of view of redundancy. I think 
that is very important, a very important strategic goal for us 
to have, or the hardening of the targets, that is something 
that I definitely think is what we need to be doing to make 
sure the American public feels more secure.
    But on the front end of the process, I am not even sure 
with our briefing that we have had with the FBI director in his 
new office that we will have eliminated the seven layers that 
Special Agent Rowley talked about because this challenge is--
because, again, we are not talking about analyzing the super 
power and their likely four or five moves. We are talking about 
lots of different organizations moving in lots of different 
places and processing that information. So, to me, what you 
have said, there are some very positive parts of it, but there 
are also some challenges in how we make sure that information 
flows in a very rapid fashion back to the people that need to 
have that information, and I think that is going to be a 
challenge for us.
    I had a particular question. Part of this understanding the 
new agency is the various organizations that will be part of 
that system organization. So, when you think about some of the 
agencies and their involvement, I mean, I am sure there are 
many of us who have always wished that Customs and INS would 
work more closely together or information should be shared.
    I have a particular concern or interest in the Coast Guard 
because the Coast Guard plays such a vital role in search and 
rescue, in fisheries management, in enforcement in our State, 
in various other areas. So how do we make sure that the core 
mission that the Coast Guard now has in its financial resources 
are maintained and focused on that mission?
    Director Ridge. Senator, your concern or reservations about 
moving into the new Department, agencies that have multiple 
missions, is one that I have heard in both the House and Senate 
and Republicans and Democrats alike. So I appreciate that 
concern.
    The President recognizes that as of 9/11, in response to 
the events of that day--I don't know if there is another agency 
or department in the Federal Government that ramped up as 
quickly as possible and did as many things as well and as 
quickly as the Coast Guard did once the Twin Towers were struck 
and the Pentagon was struck. They are a very gifted and 
talented group of men and women.
    The President recognizes that the new mission as part of 
homeland security will be increased emphasis on port security, 
not just the vessels in and out, but, frankly, you visit enough 
ports to know there is a tremendous amount of critical 
infrastructure in and around all of our ports.
    To that end, the President in the $14-billion increase over 
the 2002 appropriation level embodied in his 2003 budget 
request gives the Coast Guard the largest single increase they 
have ever received so that they can begin building this 
additional capacity with people, boats, and airplanes to take 
on the added responsibility of homeland security. So they will 
be multi-tasked. They will still have to be concerned about 
fisheries and boating safety, but they will also be given 
additional assets to enhance their capability to provide 
homeland security assistance as well.
    Senator Cantwell. Thank you very much for that. We may 
submit a written question in more detail on that.
    Director Ridge. Yes.
    Senator Cantwell. We appreciate your answer on that today.
    Director Ridge. Thank you, Senator.
    Senator Cantwell. I see my time has expired, Mr. Chairman.
    Chairman Leahy. The Senator from New York.
    There will be statements and questions, as I have noted, 
submitted for the record in this hearing, and the senior 
Senator from New York.

 STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR FROM THE 
                       STATE OF NEW YORK

    Senator Schumer. Thank you, and I thank you, Mr. Ridge.
    We used to play basketball in the House together, Mr. 
Chairman. He was better than me, which isn't saying very much.
    Chairman Leahy. He is taller.
    Senator Schumer. Yes. Our high school team's motto was: We 
may be small, but we are slow. So it is not saying very much.
    In any case, I have a couple of questions for you, and I 
very much appreciate your being here, Tom.
    First, just a specific need, we in New York have our 
unusual circumstances, obviously, since 9/11, and in a sense, 
we are still at Ground Zero in a whole lot of ways and the way 
people think in terms of the number of threats that have been 
directed at particular New York institutions, things like the 
Statue of Liberty, neighborhoods, and things like that.
    The problem we face is there is so much to do in so many 
ways. So I had made a request that the Homeland Security Office 
do what the FBI does. The FBI has a special and large office in 
New York which has special responsibilities. Now, I don't know 
what you plan is for the rest of the country, but I would like 
to be able to assure New Yorkers that when this homeland 
security agency is set up that there would be a special office 
in New York that might be able to focus on the unique needs 
that we have in terms of port, in terms of rail, in terms of 
air, and in terms of seeming to be a target of the terrorists, 
a variety of different terrorists in a whole lot of ways.
    Director Ridge. Senator, I believe that that recommendation 
would be very seriously considered by the new Secretary. It 
makes a lot of sense.
    The experience I have had just in the White House Office of 
Homeland Security is, observing how the agency sometimes 
integrate their resources and their personnel, so that the CIA 
and FBI have people working together. In New York, you had the 
CIA, FBI, FEMA, and multiple other organizations, and I would 
suspect that that is a recommendation that would be given very 
serious consideration, not only in New York City, but 
potentially at other locations around the country. It makes a 
great deal of sense.
    Senator Schumer. Right. Well, I thank you.
    I mean, we have so many things. Most people don't know, for 
instance, most of the Internet communication across the 
Atlantic ends up in two large terminals that arrive in lower 
Manhattan. There are just so many different aspects of help we 
need, many of which are unique to our city because it is such a 
different, in my opinion, beautiful place.
    The second question I have relates to the opposite end of 
my State, which is the northern border. We have the second 
busiest border with Canada, and people there--and I don't know 
if Maria addressed this because she has the same problem in 
Washington State, our Michigan Senator, Senator Leahy from 
Vermont as well, but one of the great things we are worried 
about is we, obviously, everyone in America, those along the 
northern border as well, understand the great need for beefing 
up our security. The worry is that as we do that, it slows down 
commerce, which is slow enough as it is, particularly during 
the summer in the Niagara Falls-Buffalo area, in the Thousand 
Islands area, near Ogdensburg, and then for so many people 
traveling via Plattsburg to Montreal, you add the vacation 
traffic to the normal commerce traffic, and things would grind 
to a halt even before 9/11. Now with the special security needs 
we have, it is even worse.
    It is my view we can have both. We can have the security 
and not have commerce slow down to a standstill, but it 
requires personnel, and this committee, working with the 
administration under the USA PATRIOT Act, we authorized a 
tripling of staffing at the northern border. Maria was very 
active in this. I helped out. There were others on the 
committee, Senator Leahy concerned, of course, our chairman, 
concerned with this, but, thus far, that tripling has not been 
fulfilled in appropriation.
    We have gotten some more. I think in New York State, for 
instance, we have 62 more people on the Border Patrol than we 
had before, but it is not close to enough to deal with all of 
our needs, all of our new needs.
    Can you tell me what the administration is planning with 
the new Department, even before we get to the new Department, 
about beefing up the northern border in terms of actual 
appropriations of personnel from the three agencies that staff 
it, INS, Border Patrol, and Customs?
    Director Ridge. Senator, first of all, I believe you are 
aware of the fact that the administration has been working with 
our Canadian allies and friends on a smart border accord--
    Senator Schumer. I will get to that next. Right.
    Mr. Ridge [continuing]. To achieve the objectives that you 
have identified, enhance security without jeopardizing the flow 
of goods and people across the border. We are well on our way 
in that process.
    As you also know, there are, at different locations along 
the border, National Guard being used, and they will remain 
there for the next several months.
    I know in conversations with the commissioner of the INS--
and I haven't had a recent conversation to verify this with 
Customs, but there dollars in the budget for them to begin 
hiring people in addition to whatever new appropriations you 
get, so they can enhance security at the border. As we buildup 
that capacity, it is going to, unfortunately, take us some 
time. That is why we are using National Guardsmen as a 
temporary stop-gap measure at the borders, but, ultimately, the 
goal is to buildup the capacity and replace them with INS and 
Customs agents.
    Senator Schumer. How long do you think it will take to get 
to the goal we set in the PATRIOT Act, which is really to 
triple the number of personnel from when we started?
    Director Ridge. Senator, it would be the grossest form of 
speculation to tell you how and to tell you when. I have no 
idea.
    I do know that there is some extraordinary proportion of 
individuals interviewed, and those ultimately hired, maybe 50 
to 1 or 100 to 1. The men and women that we have employed in 
Customs and INS have to pass very rigorous background checks 
and investigations and the very high standards that we apply. 
So it is a very time-consuming, labor-intensive process. So we 
will just have to work with you and the INS commissioner and 
the Customs commissioner to give you a more specific answer on 
that question.
    Senator Schumer. The second question I had was related to 
your meeting with the Canadians in the Buffalo area, I guess it 
was, 2 weeks ago, 3 weeks ago, something like that, and tell us 
how that is going, what are the obstacles, how about the 
problem of U.S. personnel carrying guns in Canada, if we want 
to do things on one side of the border or the other instead of 
redundancy on our border. It makes some sense to just move 
things to one side, and the Canadians seem to have more room 
than we do on the New York side.
    So tell me how all of that is going, and particularly in 
regards to the relationship between having U.S. personnel work 
on the Canadian side of the border.
    Director Ridge. Senator, those discussions are moving quite 
well. In meeting with my counterpart, Deputy Prime Minister 
John Manley, again, on Friday to continue to move those 
discussions to a conclusion, we both agree that if we can pre-
identify people in cargo, that will certainly facilitate it at 
the border. We will be in a position to announce some of the 
pilot programs, Nexus, pre-identifying residents on both sides 
and when it will take effect in Buffalo, possibly as early as 
Friday as well.
    Senator Schumer. Right.
    Director Ridge. Obviously, we will let you know. They are 
going to talk about it in Washington, too. I think Commissioner 
Ziglar is going to go up there Thursday for that announcement.
    The other challenge, once we have applied that notion of 
risk management, let's deal with the people and the cargo that 
we know, so we can focus our resources and our technology on 
the people and the cargo we don't know.
    We are both in agreement that it would serve our interests, 
both security and economic interests as well, if we could 
preposition some assets away from the border, and I think we 
are making great progress and ultimately think we are going to 
come to a resolution of the cultural differences and some of 
the constitutional differences between the two democracies with 
regard to the use of firearms and on representatives from other 
countries on your soil.
    Senator Schumer. You don't see this as an insurmountable 
barrier--
    Director Ridge. No, I do not.
    Senator Schumer [continuing]. The firearms issue. You are 
making good progress.
    Director Ridge. I think it will be resolved in the very 
near term.
    Senator Schumer. Thank you, Mr. Chairman, and thank you, 
Mr. Director. I appreciate your hard work on an important job.
    Chairman Leahy. I would be interested in how that goes, 
too, obviously. I live an hour's drive from the Canadian 
border. I greatly value the relationships we have had with 
Canada throughout our history. We want to keep that 
relationship going. We want to make it work, however.
    Senator Grassley has been one of the most active members of 
this committee in this area, and I would yield to him. I thank 
him for coming back. I know that he was trying to juggle two or 
three other committee meetings at the same time, and I 
appreciate him being here.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. We are still in markup on welfare, and 
that is why I wasn't here during your statement, Governor, and 
I thank you for coming and appearing.
    I did listen in a little bit to what our chairman said 
about whistleblowers. I want to associate myself with his 
remarks, and before I ask you questions about that, I will give 
you my philosophy on it, which isn't any different than Senator 
Leahy's.
    I think whistleblowers are key to exposing dysfunctional 
bureaucracy and security problems, and I don't think that 
whistleblowers are an outcast and that they ought to be 
retaliated against; that they are very valuable. They are an 
asset to good government and national security.
    In all the years that I have done congressional oversight 
work, when I find someone who opposes whistleblower protection, 
it means that these people are more worried about being 
embarrassed than fixing problems. I have heard the talk about 
the need for flexibility for employees, but that should not 
mean getting rid of whistleblower protection.
    I think there is a certain amount of arrogance about 
Departments that think they have to be protected against 
whistleblowers. I am concerned that the bill cuts out 
whistleblower protection for the Department of Homeland 
Security. The bill provides the Secretary of the new Department 
creating an employee management system different from the 
traditional system, which would include the Whistleblower 
Protection Act.
    It uses language similar to Aviation Transportation 
Security Act, which created the Transportation Safety 
Administration. The Office of Special Counsel which administers 
whistleblower protections interpreted the Transportation Safety 
Administration language as accepting Federal screeners from 
established Federal whistleblower protection.
    That is why I am introducing a bill to provide 
whistleblower protection for Federal baggage screeners. I am 
fearful that the Office of Special Counsel then could come up 
with the same interpretation with the President's bill on 
homeland security.
    So, Governor Ridge, I would like to know what your opinion 
is of whistleblowers and whistleblower protection, and, more 
importantly, I would like you to explain why the bill for 
Homeland Security Department does not have explicit 
whistleblower protections.
    Director Ridge. Senator, we believe that the men and women 
would be working within the new Department of Homeland Security 
should be afforded the protection to come forward with 
recommendations, and some might consider it criticism, and so 
be it, in order to enhance homeland security. Everybody has to 
be involved. Over a period of time, we would want to create a 
work environment where there would be no fear of reprisal.
    We have had the attorneys look at the legislation. We draw 
a different conclusion than you do with regard to the 
application of the whistleblower protection. I know it is 
something that the chairman is concerned. All members are 
concerned about it, but I would assure you that the environment 
in which these men and women should operate, they should 
operate without fear of discrimination, without fear of 
reprisal. The notion that they would come forward with candor 
and honesty to make recommendations that others might consider 
to be criticisms in order to enhance homeland security is 
something we ought to protect, and the President very much 
alluded to that in his national address a couple of weeks ago 
when he announced the new Department of Homeland Security, when 
he told the men and women involved in the intelligence 
community, referring directly to Coleen Rowley. You are 
patriots all. We value your opinions, even if they are 
critical. So we will just have to work with you, to assure you 
that the kind of protection you want to give these men and 
women exists within the statute. We believe it does, but 
obviously have more persuasion--
    Senator Grassley. Well, then I want the employee in 
Homeland Security to have exactly the same protection as 
somebody does in the Department of Justice or the Secretary of 
Defense. So you are willing to do that?
    Director Ridge. We believe those protections are present, 
but we--
    Senator Grassley. Well, the way to make it sure is to make 
sure the language is exactly the same. OK?
    Director Ridge. Senator, we will work with you on the 
language.
    Senator Grassley. OK. Well, that clears it up. I mean, that 
takes care of it.
    Now, that doesn't say that existing whistleblower 
protection language is adequate. It really isn't, but as long 
as the inadequacy of the present law would still be applied in 
the same fair way to employees in homeland security that it is 
in the Department of Defense, at least that is the minimum 
protection that they ought to have.
    So I think that is a pretty good answer, isn't it, Mr. 
Chairman?
    Director Ridge. Senator, we want these men, women, 
patriots. all to be comfortable with the President's 
encouragement that they have criticisms, that they can come 
forward and operate without fear of a reprisal, and that is the 
language we want to include in this legislation and we will be 
pleased to work with you on it.
    Chairman Leahy. If I might, I would agree with the Senator 
from Iowa if we could have basically the same language because 
then you have got a history. You have got a legislative history 
and everything else, and we all know we are in the same choir 
book.
    Senator Grassley. Just so that we know, that there was an 
exception made for the FBI 13 years ago when we passed the last 
legislation because somehow there was a rationale, FBI just 
couldn't have it exactly the same as it was for other Federal 
employees. There was an exception made for the FBI to come up 
with their own. Do you know when they finally came up with it?
    Director Ridge. No, sir.
    Senator Grassley. About a couple of years ago, after we 
pushed them to doing it.
    I don't accuse you of it, but there is a great deal of peer 
pressure to go along, to get along in the bureaucracy, and 
whistleblowers are like skunks at a picnic. That is how much 
disliked they are. In fact, it is still allowed to have 
somebody say something nice about a whistleblower. If I didn't 
have a strong heart, I would have fell off my chair when 
Director Mueller said that Coleen Rowley was doing a good job 
and thanked her for the job she was doing to call forth the 
shortcomings of some things within the FBI.
    Well, let's move on, then. Another area where I am not as 
critical of the legislation, but I want to be very watchful of, 
is in regard to the Office of Inspector General. I believe we 
have to have Offices of Inspector General that are very, very 
strong and very, very independent. It is critical to the proper 
functioning of an agency.
    The President's bill has provisions that allow the 
Secretary to stop an IG auditor investigation under certain 
circumstances, as do Justice and Defense Departments. Although 
I know it is extremely rare for those agencies, meaning Justice 
and DOD, to exercise that power, I am concerned that this power 
could be abused.
    Governor Ridge, could you assure me that this power will be 
used carefully and rarely? Can you give me some examples of 
when you think the Secretary of Homeland Security would have to 
stop an IG from doing a report or an investigation?
    Director Ridge. Senator, I can't give you a specific 
example now. I am going to leave it to perhaps the new Cabinet 
Secretary to answer the hypothetical, but I would tell you 
this, that the law of an Inspector General is predicated upon, 
that man or woman being independent of the kind of influence 
that you are concerned about, and only on the rarest occasions 
would the Secretary look to circumscribe that independence, and 
only on those occasions would he not only have to justify it 
privately, but he would have to justify it to the Congress of 
the United States because I don't believe that when the 
Department of Defense or the Attorney General exercised their 
authority to circumscribe it that they can do so without notice 
to Congress. So I don't know what he case would be, but it 
would have to be a very persuasive case in order to convince 
the Congress of the United States that they were moving in the 
right direction.
    Senator Grassley. Thank you, Governor.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you, Senator Grassley.
    Senator Feingold.

STATEMENT OF HON. RUSSELL D. FEINGOLD, A U.S. SENATOR FROM THE 
                       STATE OF WISCONSIN

    Senator Feingold. Thank you, Mr. Chairman, for your 
leadership and for holding this hearing, and I, too, want to 
welcome you, Governor Ridge.
    Director Ridge. Thank you, Senator.
    Senator Feingold. Thank you for your service to our country 
and for appearing before the committee.
    Governor, let me say before I get to my questions that I, 
too, commend you and the President for recognizing that a major 
Government reorganization must be considered in light of the 
tragic events of September 11th, and I am pleased that the 
President has thrown his support behind congressional efforts 
to elevate the authority and the status of the Office of 
Homeland Security.
    In hearings before Judiciary Committee this year, we have 
been exploring the bureaucratic obstacles that limited our 
capacity to identify and prevent the terrorist attacks last 
fall, and I think that inquiry has to continue. As we move 
forward in considering the President's proposal, I would like 
to see us guided by two simple questions. One, will this 
reorganization make all of us safer, and, two, will it preserve 
our cherished liberties as Americans?
    I appreciate your testimony this morning, and I look 
forward to reviewing more of the details of the reorganization 
and the challenging task of following up on it, but let me 
begin with a question.
    I approached the debate over the new Department of Homeland 
Security with a lot of questions, but one of the most important 
ones relates to our Federal budget. We are facing a real budget 
mess right now, and some suggest that this new Department may 
just add to our budget problems. In fact, I have heard from a 
number of folks in Wisconsin who share that concern about it.
    Paul Light of the Brookings Institute notes that when the 
Education Department and the Energy Department were created, 
they both exceeded their initial budgets by at least 10 
percent, and he believes that this will also be the case with 
the new Department of Homeland Security.
    Now, the President has said that by creating this new 
Cabinet Department, the Government will actually save money. 
Can you give me some assurance today that the President is 
correct and that this new Department will not cost any more 
than the current budgets of the various agencies it will 
contain.
    Director Ridge. Senator, the $37 billion figure used the 
$14 billion increase in homeland security line items in the 
President's 2003 budget. So there is a huge increase in the 
level of appropriation to support the homeland security budget, 
and it is within that massive increase that the President feels 
confident that the costs can be contained.
    Second, looking at both organizational and administrative 
efficiencies that could be brought to bear because of the 
consolidation of the agencies, clearly there are some 
additional savings there that could go from the bureaucratic 
side of the department to the prevention and interdiction and 
security side of the department.
    And then, third, I would tell you that the critical 
component of this new agency--and, again, we are going to need 
congressional support to provide it in order to meet the 
President's goal of not going above the $37 billion-plus, and 
that is the ability to transfer up to 5 percent of any 
particular line item.
    If you give the new secretary the ability to transfer up to 
5 percent of the department's budget, trying to create an agile 
and flexible department, addressing needs as the threat or 
vulnerability becomes apparent, again within the restriction of 
a huge increase in the 2003 budget, with the transfer authority 
and with many of the organizational and administrative 
efficiencies we can bring to bear, I believe the President's 
goal of not costing any more than in his 2003 budget can be 
met.
    Senator Feingold. Thank you. Let me ask a different kind of 
question. Under the President's proposed Department of Homeland 
Security, as you have been talking about, there is authority 
for receiving and analyzing investigative information that 
relates to terrorism.
    Some have characterized the department as being a customer 
of intelligence and law enforcement information that it would 
receive from other Federal agencies that would not be part of 
the new department, such as the FBI and the CIA.
    What interagency procedures do you envision to ensure that 
the new department will be able not only to obtain information, 
but then, when necessary, request additional followup 
information from the FBI and the CIA or any other investigative 
agency?
    For example, if the new department received a report from 
the FBI that a witness suspected terrorists were considering 
using planes as weapons, how would you be able to find out if 
the witness was referring to commercial airplanes or a crop 
duster? Or if a report made reference to power plants, who 
would the new department staff call to find out if it meant all 
power plants or just specific ones?
    In effect, would you have the authority in the agency here 
to request that agents of the FBI or the CIA actually do a 
followup investigation?
    Director Ridge. No. 1, Senator, if you adopt the language 
within the President's proposal with regard to the requirement 
that the CIA and the FBI submit the reports, assessments, and 
their analytical work product to the new agency, this new 
agency will receive that information. There is an affirmative 
responsibility, an affirmative obligation contained within this 
language; there is a statutory mandate that they provide that 
information.
    I don't believe the clarification of the kind of 
information that you would have alluded to would be any problem 
whatsoever. As a matter of fact, I think going back and getting 
that kind of clarification could be done either on an ad hoc 
basis or certainly clarified by executive order or 
interdepartmental memorandum of understanding.
    But as I have seen the work product from these two agencies 
on a fairly regular basis, at least once a day, generally that 
kind of information is included, and, if not, can be clarified 
quickly with a phone call.
    Senator Feingold. Well, I would like to be assured in some 
way that the actual legislation will provide for that, because 
these are not agencies that have been shown to have a record 
for easily responding to this sort of thing if there is not 
authority for it.
    I think specifically what I am interested in is not just 
whether or not you are going to get a work product. But if you 
get a work product and you need to ask a followup question, do 
you have the authority to do it? Do they have the obligation to 
respond to you and can you ask that an FBI or CIA agent do 
further investigation at the request of this new department?
    Director Ridge. We can certainly task back. Perhaps even 
more importantly, Senator, I think it would be certainly the 
recommendation to the new secretary that homeland security 
analysts be placed in the CIA and the FBI, and work with them 
in their counterterrorism centers, work with the FBI in their 
new Center for Intelligence that Director Mueller is 
organizing.
    So I think you have a variety of ways to deal with the 
concerns that you have addressed--statutory obligation, the 
tasking back and the actual day-to-day work together to get 
that kind of information.
    To give you a good example, twice a day the CIA, the FBI, 
Homeland Security, and multiple other agencies do a 
teleconference to do precisely the kind of thing that you are 
talking about. This is the report, this is the assessment, we 
need a little bit more background information. So there is a 
process in place now and it will be ratified by the law in a 
practice that I am confident will continue.
    Senator Feingold. Well, I appreciate that and I would like 
to followup with you to try to find out.
    Director Ridge. Please.
    Senator Feingold. I see that my time is up, but I will be 
submitting questions to you relating to questions having to do 
with the relationship and role of the National Guard and 
certain questions about the Secret Service and their role in 
the new organization.
    Director Ridge. Thank you, Senator.
    Senator Feingold. Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    To followup on the area that Senator Feingold raised, and a 
very good area, I am thinking back that on June 6 when this was 
announced, Director Mueller was up here talking about the FBI 
reorganization plans and how they would handle information in 
the future, the feeling being that a lot of information was 
available prior to September 11, but tragically was overlooked, 
whether it was in the Department of Justice, the FBI, CIA, or 
wherever else.
    So we are trying to make sure the FBI does a better job of, 
one, sharing information and, second, of analyzing it. I know 
that Director Mueller, who is on the front line in that, is 
doing everything he can. They are the primary agency for 
collecting domestic intelligence on terrorism or anything else.
    I look at the homeland security part where you combine 
Customs, the Secret Service, Immigration, the Coast Guard, and 
Transportation Security. That is about 140,000 people all over 
the country. To what extent do they get into collecting--and I 
am not sure I understand fully from your answer--how much do 
they get into collecting domestic intelligence alongside the 
FBI?
    The reason I ask this is following the excesses of the J. 
Edgar Hoover era and some of the followup time, we have put in 
some guidelines and we have put in some oversight of the FBI. 
To what extent are they going to be able to do this without 
those same kinds of guidelines and oversight at a time when it 
is so easy to spy on people and track people with computers 
every time they make a phone call, every time they purchase 
something with a credit card at the local grocery store or buy 
books online?
    Now, they even talk about going into public libraries to 
see what you are reading. I am not trying to be one of those 
who sees the black helicopters coming at three o'clock in the 
morning, but you can see where a lot of people are going to be 
very concerned that the temptation and the ability are going to 
be there to snoop for the sake of snooping.
    That is a long way around of saying how far can they go to 
collect domestic intelligence?
    Director Ridge. Well, Senator, I think their collection 
activity is prescribed by law and regulation. You are correct 
in concluding that they may have information regarding 
potential terrorist activity that they might accumulate during 
regular functioning of the department.
    The inspector at the border may pick up a potential 
terrorist based on a watch list, or observe some suspicious 
activity. Customs agents, based upon lists of crews or origin 
of cargo, may determine it is necessary to target a particular 
ship and take action. So there are bits and pieces of 
information that they have historically gathered and when they 
have some relevance to homeland security, they would be 
channeled into this unit within the new department.
    But one of the reasons the President has been adamant and 
very clear and very direct and very precise about this new 
agency not having any collection capacity or ability, other 
than that now exists according to the law, is to ensure that it 
doesn't turn into some kind of domestic spying agency.
    The collection capacity of the CIA and the FBI is 
regulated. There are privacy concerns, there are civil 
liberties concerns. There is aggressive oversight; there has 
been, there should be, there must be. But the President is very 
clear that the purpose of the information analysis and 
infrastructure protection piece is really to identify the 
targets that need to be hardened and not to be collecting 
information on American citizens. They can't do it now.
    Chairman Leahy. But the analysis reports you get--does that 
include raw analysis?
    Director Ridge. It does not, it does not, Senator.
    Chairman Leahy. Well, for example, the FBI's FD-302, the 
summary of a witness interview--would those be automatically 
sent to Homeland Security?
    Director Ridge. You have the 302 reports and occasionally 
electronic transcripts, and to the extent that it relates to 
potential terrorist activity, that kind of information could be 
forwarded. But it would have been gathered lawfully by the FBI 
and if it related to a potential domestic terrorist event, it 
would be shared with the new department.
    Chairman Leahy. Well, take the Phoenix electronic 
communication, where an agent recommended that they followup on 
the information that they had about potential terrorists 
getting flight training. Would that automatically be turned 
over to the Department of Homeland Security?
    Director Ridge. It is our interpretation of the statute as 
structured that the report would have gone to the Department of 
Homeland Security. They would have continued to followup on the 
individual or individuals associated or taking the flight 
training courses. That would continue to be the function of the 
FBI, but this information, in conjunction, I suspect, with 
other bits and pieces of information that may have been 
accumulated the same day or over the weeks or the months that 
suggested that airplanes could be used perhaps as missiles, but 
perhaps just in anticipation of a more traditional hijacking, 
would have led hopefully the new Department of Homeland 
Security to take a look at the threats which were forthcoming 
with some credibility, look at the vulnerability, what we have 
done in this country over the past decade or two to screen 
cargo and passengers or to harden cockpit doors, hopefully to 
have led to a decision to move before the incident occurred 
rather than after.
    Again, it is purely conjecture on our part, but that would 
be the intention of having the information analysis and having 
this new capacity within the new department.
    Chairman Leahy. Well, I am going to want to followup on 
that. I also want to followup on NIPC, the National 
Infrastructure Protection Center, and how that may or may not 
be changed. But that goes into a much longer, more technical 
thing, but I will have questions on that and you and I may have 
to chat a little bit further on that.
    I know that Senator Schumer had one more question. Did you 
have another question?
    Senator Sessions. Two questions.
    Chairman Leahy. Senator Sessions has a couple more 
questions, and then we can end.
    Senator Schumer, and then Senator Sessions.
    Senator Schumer. Thank you, Mr. Chairman.
    Senator Sessions. It is not my turn? That is all right.
    Senator Schumer. I will be brief.
    Senator Sessions. Fine.
    Senator Schumer. I don't know if the Director will be 
brief, but I will.
    Chairman Leahy. He took a lot less time than you did on 
your questions. As you may recall, I let you have virtually 
double time.
    Senator Sessions. I can't complain.
    Senator Schumer. Thank you, Mr. Chairman.
    My question goes to an issue I know you have discussed with 
Senator Leahy and a little bit with Senator Cantwell, which is 
the restructuring of how we analyze all of this intelligence.
    I guess many of us have doubts about whether the FBI is the 
right place to do analysis. It has been a great law enforcement 
agency. Somebody commits a crime and they find out who did it. 
They are better than anybody else. They have had a whole lot of 
weaknesses in terms of analysis.
    So as I understand it, and it seems to be a work in 
progress here, the idea is that the FBI would continue to do 
analysis, but this new office of intelligence analysis would be 
a redundant analytic agency. I think that is a good idea, 
frankly. I think we are in a brave new world. I think it is 
very, very difficult to say that one agency should do it alone, 
but I have two questions for you related to that, or one two-
part question, to keep my promise to Senator Leahy and Senator 
Sessions.
    A: Where are we going to get these analysts? When I spoke 
to the Director of the FBI privately, he is having trouble. 
They only have about 600 in the FBI. He is having trouble 
finding out where they are, and I read somewhere they might 
come from INS or some other agency. I forgot the second one 
that was mentioned.
    Well, that doesn't give me too much faith. I don't think 
the INS has been known to do very good analysis. That is 
question 1A.
    And 1B, related: Since the FBI has been so poor at this--we 
have had dialog about their computer systems which are just 
totally, totally backward, and I have been following up on 
that--why wouldn't it be better just to chop off the 600 or 700 
analysts and their sub-workers in the FBI and put that in the 
homeland security agency and let that be responsible for 
analysis, let the CIA do its analysis as well, instead of 
trying to start a third new agency, when the existing agencies 
have had such a difficult time coming up with the necessary 
analysts to begin with?
    Director Ridge. Senator, the concern about being able to 
pull in additional analysts is certainly very much on our minds 
as we think about reorganizing and creating this new unit.
    Clearly, we could anticipate getting some additional 
support from the CIA. They have been very forthcoming and very 
helpful, and we could get some people assigned. I believe that 
depending on the kind of flexibility given the new Cabinet 
secretary, we might be able to bring some people out of 
retirement, depending on the pay scales.
    I think, third, there are men and women who are presently 
engaged in analytical work within the various departments. We 
may be able to bring in a few from there. But it is a process 
to buildup to the kind of capacity that the new department will 
need that will obviously take time.
    There is a school that the FBI is beginning to put together 
at Quantico to develop the analytical capability, but as you 
well know, there is no graduate school for analysts. It is 
about experience, it is about training, it is about 
imagination. I think we can create an infrastructure there from 
these sources and then build that capacity.
    Senator Schumer. I wanted to correct myself.
    Director Ridge. Sure.
    Senator Schumer. They hope to get to 600 analysts by 2004. 
They only have about 200 now. Sorry.
    Director Ridge. Well, the Director is pretty committed to 
meeting the goal. I wouldn't bet against him. I know he is 
working very hard with the CIA to ramp up the educational 
component within the FBI so they can develop that capacity. He 
understands they need it, they don't have it yet, and he is 
working hard to develop it.
    Senator the agents within the CIA, the analytical capacity 
that Director Mueller is building up, will serve really two 
functions and the new department will be the beneficiary of 
both functions.
    One, those analysts will also be charged with giving 
additional direction to the field offices in the FBI to 
followup on the reports and followup on the individuals, 
potential terrorists, and potential terrorist activities. So 
you need that analytical capacity to give the field agents 
specific direction.
    These analysts will also be working in conjunction with the 
CIA as they pull together their resources at their 
counterterrorism center to bring another set of eyes and ears 
and intuition and experience to that process.
    As a result of the capacity in FBI field offices and 
coordination with the CIA, I think the work product that the 
new department will get will be substantially better than it is 
today, and it is good now and it will be better.
    To your point, there is some redundancy within the 
analytical capacity of the new department looking at their 
reports and assessments. That is good. We all agree that it is 
good, but the primary mission of this new department is not to 
task the FBI or direct the CIA. It is to take those assessments 
and match them against the vulnerabilities and have for the 
first time some direction to local governments, to companies, 
whatever, to harden their targets.
    These are the protective measures we think you ought to 
take. There is a sense of urgency, there is a sense of 
priority, because we have taken a look at the threat. We have 
matched it against the vulnerability and you are not protected 
well enough and these are the things you have got to do.
    Senator Schumer. I have further questions I will ask in 
writing, but I thank the chairman.
    Director Ridge. Thank you, Senator.
    Chairman Leahy. Senator Sessions?
    Senator Sessions. Well, I thank, Mr. Chairman, you and 
Senator Schumer for this very interesting and important 
discussion. I think it is a very difficult issue.
    I was pleased when the Director told us that he was going 
to have an intelligence center in the FBI, that every 302 that 
the FBI prepares that relates to terrorism, as I understand it, 
would be immediately sent forward, not held in the field until 
a big file had been completed and then sent forward, as is 
often the case with routine criminal cases.
    Director Ridge. The Director said yesterday, if I might 
apologize for interrupting you, Senator, that once they get 
their technological world sorted out, we like to think that the 
new Department of Homeland Security would have access virtually 
any time because of the better use of the technology that will 
hopefully be available to both agencies.
    Senator Sessions. Well, I think so, and he indicated that 
the CIA would be a part of that intelligence center, and 
actually a former CIA agent would head it. But I certainly 
think that Homeland Security should be a part of that center. 
Is that your understanding of where it would be?
    Director Ridge. Yes. In discussions with Directors Tenet 
and Mueller, they anticipate that the new Secretary of Homeland 
Security would position some of his people within their 
organizations, as well, to work side by side with them.
    Senator Sessions. And Homeland Security will have its 
center, which would be somewhat duplicative but would have a 
somewhat different responsibility. Your center would develop a 
plan to carry out a defensive mechanism to a threat that has 
been uncovered. Is that correct?
    Director Ridge. Correct. The CIA and the FBI will continue 
to be the most important offensive part of the operation of 
investigation and interdiction. This new capacity will be a 
defensive capacity to prepare for and provide protective 
measures to make it just progressively more difficult over the 
years for the terrorists to attack, to harden the targets of 
America.
    Senator Sessions. Mr. Ridge, let me ask you this and just 
sort of ask for a commitment from you or where you are and 
where the President is in his thinking. This reorganization is 
a very big deal. It is one of the biggest reorganizations that 
we have ever had in the history of the country.
    It is moving agencies like Customs and the Secret Service 
that have been a deeply ingrained part of the Treasury 
Department. It is moving INS and the Border Patrol, deeply 
ingrained in Justice, and Coast Guard and other agencies. It is 
really, really large.
    All of us that know anything about Government--and I spent 
14 or so years with the Federal Government--know that it lacks 
the efficiency of the private sector. That is why the private 
sector is more effective in doing things than Government. The 
very idea that we have to operate the way we do is sometimes 
maddening.
    My question to you is do you see this as an opportunity to 
think anew about how a Government agency ought to be organized, 
to encourage some of the ideas like total quality management, 
and maybe less emphasis on structures and grades and slots and 
special duties?
    You know, businesses call people team members instead of 
just some complex title everybody has. Do you think that you 
could do this maybe using the GAO's ideas? They have got some 
good ideas about improving Government. Could we utilize this as 
an effective way to prove that we can do better in operating 
Government, rather than the danger that we would face that we 
would move these organizations and they really wouldn't be much 
better than they were before?
    I know there will be more focus on homeland security. I 
know we will achieve that, but can we achieve efficiency in all 
the other aspects and duties that they will have to face?
    Director Ridge. Senator, if we are not willing to think 
differently about the administration of this department, if we 
are not willing to think differently about the organization of 
the department, and if we are unwilling to think differently 
about the operational arrangements within the department, we 
will not have done our duty to do everything possible to 
maximize the use of these people and the technology and 
everything associated with the new agency to improve security 
for America.
    If we think we can just cobble together an agency and just 
realign the boxes and realign flow charts, we will not have 
done enough. A good organization doesn't guarantee success. A 
flat organization does guarantee failure, and frankly if we 
can't make some administrative changes and some organizational 
changes and operational changes, we will not have done our job 
for the citizens of this country.
    Senator Sessions. I hope you will do that. I hope you will 
maybe set a model for the rest of the Government that can 
really test some new, innovative ideas for making Government 
more efficient. Our Government employees are great people.
    Director Ridge. They sure are.
    Senator Sessions. They are men and women of integrity and 
ability, but sometimes the way we organize and the way we think 
reduces the ability of our governmental agencies to be most 
effective. It would be exciting if you could do that in the 
course of this.
    Director Ridge. Given the nature of the threat and the 
purpose for which the President has recommended the 
reorganization, we need to be as agile and as flexible and as 
able as our enemies. We do have to rethink how we deliver these 
services and provide protection for America. This gives us an 
extraordinary opportunity not only to enhance protection, but 
perhaps to come up with a new model of governance.
    Senator Sessions. And there will be those who will object, 
but I think in the long run all could benefit.
    Thank you.

 STATEMENT OF HON. JOHN EDWARDS, A U.S. SENATOR FROM THE STATE 
                       OF NORTH CAROLINA

    Senator Edwards. Governor, the chairman suggested I just go 
ahead because I know that you have an engagement at 12:30, so I 
will try to be very brief so that you can get to your 
appointment.
    Director Ridge. Thank you, Senator.
    Senator Edwards. Thank you for being here and thank you for 
the work you are doing. I have looked at this proposal. It 
seems to me it has good ideas in it. I think my concern about 
it is that while we are going about the process of reforming 
these Government agencies, these Government bureaucracies and 
making them work more effectively and more efficiently that we 
don't lose sight of another enormous priority, which is the 
imminent threat that we all know exists on a daily basis.
    We all know that this process of reform is going to take 
time. It is going to take months to probably get it through the 
Congress and then months to get it implemented. In the 
meantime, I have some more pressing questions which I won't 
direct to you because I will have a chance to direct them to 
the people who are responsible for them on a daily basis.
    But I do want to know, in order to protect us, do we know 
where all the terrorists are within this country? Do we know 
where the terrorist cells are? Are we monitoring and 
infiltrating those groups? Do we know what they are planning as 
we speak? Is the FBI able to recognize foreign intelligence, 
given their nature and responsibilities and culture over the 
last few decades? Will they get that information, when they get 
it, into the hands of the people who need it in order to act to 
protect the American people?
    These are obviously very serious issues that confront us as 
we speak, and this threat, as we all know, and you know better 
than anybody, is imminent. So if I could take just a minute and 
ask you a couple of questions about that area, because I know 
you have been meeting with these agencies, including members of 
the Intelligence Committee.
    We passed the PATRIOT Act, as you well know, and some of us 
on the Intelligence Committee had actually been working on some 
of those provisions before 9/11. Let me just direct you to a 
couple of areas, if I can, to the extent you know about them.
    Director Ridge. Sure.
    Senator Edwards. One of the provisions of that Act dealt 
with the DCI having more involvement in the process by which 
the FBI collects foreign intelligence within our country using 
FISA, and there is a provision in the Act that addresses that.
    Can you tell me what progress has been made since that 
legislation was passed to get the DCI more involved in that 
process?
    Director Ridge. Senator, I think both Director Mueller and 
Director Tenet would be a better source of that kind of 
information.
    Senator Edwards. Well, let me ask you a second question.
    Director Ridge. And I appreciate it. I believe they have 
used the new capacity and the new tools that you have given 
them, but to give you a more specific answer I think it is more 
appropriately directed to them.
    Senator Edwards. That may be your answer to all these 
questions. If it is, that is fine. I just want to know what you 
do know about it.
    Do you know whether the Attorney General and the DCI have 
implemented training programs for Federal, State, and local law 
enforcement agencies so that they can, in fact, recognize 
foreign intelligence when they see it? Do you know whether 
anything has been done about that?
    Director Ridge. I believe the Department of Justice and the 
FBI have begun providing that kind of training, but in what 
form I can't tell you specifically. One of the challenges--and 
you raise a good point, Senator--is in the long term we are 
going to have to do a better job of sharing different kinds of 
information with State and local law enforcement officials that 
will empower them and assist them in that effort in recognizing 
potential terrorist activity.
    There is a great deal of concern, and very appropriately, 
in Washington about the horizontal sharing of information and 
integration. But we also need to work on a process by which we 
can empower State and local law enforcement officials with 
knowledge and information that will help them better do the job 
that you and I both think they need to do, and that is be a 
front-line set of eyes and ears, intuition and experience to 
possibly ferret out potential terrorist activity. So it is a 
process that is underway. I am confident it is not completed 
yet.
    Senator Edwards. Well, these other questions that I had all 
fall into the same category. I would just say, and I know you 
are aware of this, but as we go about this process which will 
take some time in reforming these Government bureaucracies and 
making sure they work the way they need to for the American 
people, I just don't want us to lose sight of the fact that we 
have a threat in our midst today and we need to find out where 
these people are, find out what they are doing, get inside them 
and stop them.
    I know you know this, Governor, but that is also an 
enormous priority, but I appreciate very much the work that you 
are doing.
    Director Ridge. Senator, you raise a very important point, 
and I think to reassure you and to reassure the American 
public, while the administration working with Congress 
undertakes the reorganization of the new department, the 
administration and Congress continue to work day after day on 
enhancing security through the existing departments and through 
the existing organizations as presently structured.
    When President Truman suggested that we needed to merge the 
Department of War and the Department of Navy, and it took him 
several years to do it, it didn't mean that the Department of 
War and the Department of Navy didn't continue to do their 
work.
    So to your point, we have to keep our eye on both 
objectives: one, to work with Congress to reorganize, if it is 
the collective will of the Congress to get it done, but at the 
same time neither the Congress nor the executive branch, I 
believe, will take its eye off the other important day-to-day 
responsibility, and that is doing everything we can to improve 
security in this country.
    So I appreciate your raising it and identifying the dual 
nature of the work we have to do together.
    Senator Edwards. Thank you, Governor. Thank you, Mr. 
Chairman.
    Chairman Leahy. Thank you.
    With that, Governor, I extend appreciation for the time you 
have spent here and the time you have always been willing to 
spend.
    Director Ridge. Senator, thank you very much.
    Chairman Leahy. I appreciate the conversations we have had, 
both privately and at the White House on this subject. We will 
stay in touch, but I thank you very much and we stand in 
recess, which barely gives you time to grab a sandwich and get 
over to Chairman Sensenbrenner's committee.
    Director Ridge. Thank you, Senator. I appreciate it.
    Chairman Leahy. Thank you.
    [Whereupon, at 12:22 p.m., the committee was adjourned.]
    [Questions and submissions for the record follow.]

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