[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
          WHAT REGULATIONS ARE NEEDED TO ENSURE PORT SECURITY?

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON ENERGY POLICY, NATURAL
                    RESOURCES AND REGULATORY AFFAIRS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 24, 2003

                               __________

                           Serial No. 108-23

                               __________

       Printed for the use of the Committee on Government Reform


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


                                 ______

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                            WASHINGTON : 2003
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma              C.A. ``DUTCH'' RUPPERSBERGER, 
NATHAN DEAL, Georgia                     Maryland
CANDICE S. MILLER, Michigan          ELEANOR HOLMES NORTON, District of 
TIM MURPHY, Pennsylvania                 Columbia
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN R. CARTER, Texas                            ------
WILLIAM J. JANKLOW, South Dakota     BERNARD SANDERS, Vermont 
MARSHA BLACKBURN, Tennessee              (Independent)

                       Peter Sirh, Staff Director
                 Melissa Wojciak, Deputy Staff Director
              Randy Kaplan, Senior Counsel/Parliamentarian
                       Teresa Austin, Chief Clerk
              Philip M. Schiliro, Minority Staff Director

Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs

                     DOUG OSE, California, Chairman
WILLIAM J. JANKLOW, South Dakota     JOHN F. TIERNEY, Massachusetts
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
CHRIS CANNON, Utah                   DENNIS J. KUCINICH, Ohio
JOHN SULLIVAN, Oklahoma              CHRIS VAN HOLLEN, Maryland
NATHAN DEAL, Georgia                 JIM COOPER, Tennessee
CANDICE S. MILLER, Michigan

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                       Dan Skopec, Staff Director
                Barbara F. Kahlow, Deputy Staff Director
                          Melanie Tory, Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 24, 2003...................................     1
Statement of:
    Keller, Larry, executive director, Port of Los Angeles; 
      Timothy Parker, executive secretary, Steamship Association 
      of Southern California; John Ochs, security manager, Maersk 
      Sealand, Ltd.; Rob Marshall-Johns, director of operations 
      and quality control, the Oppenheimer Group; Stephanie 
      Williams, vice president, California Trucking Association; 
      and Dr. Domenick Miretti, senior liaison, Ports of Los 
      Angeles and Long Beach, International Longshore and 
      Warehouse Union............................................    19
Letters, statements, etc., submitted for the record by:
    Hahn, Councilwoman Janice, prepared statement of.............    14
    Keller, Larry, executive director, Port of Los Angeles, 
      prepared statement of......................................    22
    Marshall-Johns, Rob, director of operations and quality 
      control, the Oppenheimer Group, prepared statement of......    41
    Miretti, Dr. Domenick, senior liaison, Ports of Los Angeles 
      and Long Beach, International Longshore and Warehouse 
      Union, prepared statement of...............................    57
    Ochs, John, security manager, Maersk Sealand, Ltd., prepared 
      statement of...............................................    34
    Ose, Hon. Doug, a Representative in Congress from the State 
      of California, prepared statement of.......................     5
    Parker, Timothy, executive secretary, Steamship Association 
      of Southern California, prepared statement of..............    29
    Williams, Stephanie, vice president, California Trucking 
      Association, prepared statement of.........................    50


          WHAT REGULATIONS ARE NEEDED TO ENSURE PORT SECURITY?

                              ----------                              


                        THURSDAY, APRIL 24, 2003

                  House of Representatives,
  Subcommittee on Energy Policy, Natural Resources 
                            and Regulatory Affairs,
                            Committee on Government Reform,
                                                     San Pedro, CA.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
the Board Room of the Port of Los Angeles Administration 
Building, 425 South Palos Verdes Street, San Pedro, CA, Hon. 
Doug Ose (chairman of the subcommittee) presiding.
    Present: Representatives Ose and Janklow.
    Also present: Representatives Harman and Rohrabacher.
    Staff present: Dan Skopec, staff director; Barbara Kahlow, 
deputy staff director; Melanie Tory, clerk; and Yier Shi, press 
secretary.
    Mr. Ose. Good morning. Welcome to today's hearing before 
the Subcommittee on Energy Policy, Natural Resources and 
Regulatory Affairs.
    I ask that we allow Members not on the full committee to 
join us today for the purpose of this hearing. Hearing no 
objections, so ordered.
    I want to touch on the rules when Congress holds committee 
hearings. We are now required under the rules of the House to 
extend written invitations within a certain period of time 
prior to the hearing, to which we get responses. The witnesses 
whom we do invite are discussed by the majority and minority. 
Both sides are allowed to invite witnesses, and the witnesses 
that have been invited and have been agreed on and have been 
invited long in advance in the hearing to come testify today. 
We are grateful for their joining us.
    To the extent other citizens wish to submit written 
comments to the committee, we'll be happy to take them. 
Unfortunately, we will not be able to entertain oral testimony 
in this regard, but we will welcome your written submittals 
instead. The record of this hearing will be open for 10 days 
following its completion, during which time comments can be 
submitted by turning them into the clerk either here today or 
in Washington in the coming days. A number of our colleagues 
here will be joining us shortly. They are making their ways 
through the security downstairs.
    This is an investigative committee. And, as an 
investigative committee, we routinely swear in our witnesses 
and put them under oath.
    Congressman Janklow and I will and the other Members will 
be allowed to make opening statements. Then, we will go to a 
panel, from which we have received written statements, who will 
be allowed to make oral statements for the record. We will 
constrain each of these statements to 5 minutes maximum. We're 
always grateful for any statements that do not take the entire 
5 minutes that are allocated.
    So with that, I want to welcome our witnesses. As I said, 
we routinely swear in our witnesses. So, if you all would rise, 
please. Raise your right hands.
    [Witnesses sworn.]
    Mr. Ose. Let the record show the witnesses answered in the 
affirmative.
    We do have apparently some folks here who are helping some 
of the named witnesses who are behind. I need to make sure I 
receive the names of these folks over here, so we can identify 
them for purposes of noting that they did get sworn in 
accordingly.
    We are joined today by a number of witnesses. I am going to 
introduce them, and then we are going to go through opening 
statements. First is the executive director of the Port of Los 
Angeles, Mr. Larry Keller. Nice to see you again.
    Mr. Tim Parker is the executive secretary of the Steamship 
Association of Southern California. Good to see you, Tim.
    Mr. John Ochs, who is the security manager for Maersk 
SeaLand Limited. Good to see you again.
    Mr. Rob Marshall-Johns, who is the director of Operations 
and Quality Control for the Oppenheimer Group. Nice to see you.
    We will be joined by Ms. Stephanie Williams, who is the 
vice president of California Trucking Association.
    And, then we have our good friend, Dr. Domenick Miretti, 
who is senior liaison for the Ports of Los Angeles and Long 
Beach, for the International Longshore and Warehouse Union. 
Pleased to see you, Dr. Miretti.
    The tragic events of September 11, 2001, shook the 
confidence of the U.S. Government and its citizens in the 
Nation's security. Immediately after September 11th, the 
President and Congress began to examine the existing system, 
including the laws, regulations, and actual practices governing 
the Nation's security. Much was found to be in need of repair. 
Some changes were made immediately, others were made later, and 
more changes are still needed.
    On November 19th of that same year, the President signed 
the Aviation and Transportation Security Act. This law 
established emergency procedures for the Federal Government to 
issue interim final regulations without the usual opportunity 
for public notice and comment, as provided for in the 
Administrative Procedure Act. To ensure congressional and 
public input into the regulatory decisionmaking process, this 
subcommittee held a November 27, 2001, hearing entitled, ``What 
Regulations are Needed to Ensure Air Security?''
    During 2002, Congress passed the Maritime Transportation 
Security Act to address security of the Nation's ports. On 
November 25, 2002, the President signed that piece of 
legislation into law. This law similarly provides for some 
interim final regulations without any public notice and 
comment. These include interim final rules on anti-terrorism 
plans for port security, facility security, and vessel 
security, and other rules to follow, such as for transportation 
security cards.
    The U.S. maritime system includes more than 300 ports with 
more than 3,700 cargo and passenger terminals. The top 25 ports 
account for 98 percent of the more than 6 million container 
shipments entering U.S. ports annually. The Port of Los Angeles 
is the busiest port in the United States and the seventh 
busiest in the world.
    The vast maritime system is particularly susceptible to 
terrorist attempts to smuggle personnel, weapons of mass 
destruction, or other dangerous materials into the United 
States. And, ships in U.S. ports could be attacked by 
terrorists. A large-scale terrorist attack at a U.S. port would 
not only cause widespread damage but also it would seriously 
impact our economy.
    The Maritime Transportation Security Act raises questions 
about the right balance between increasing port security on the 
one hand and not impeding the flow of commerce and trade on the 
other. Standard versus port-specific security measures--in 
other words, what is our national standard and what are the 
unique circumstances of any given port? And also, what is the 
role of government in solving these problems, as opposed to the 
role of private industry?
    Two other key questions are how the United States should 
pursue higher standards for port security abroad, in other 
words securing the original point from which a product is 
shipped to us, and how to generate funds for improved port 
security, both here and abroad. Currently, there is 
insufficient Federal funding to fully ensure port security. 
And, we are going to visit about that during the course of this 
hearing.
    Many Federal departments and agencies have a role in port 
security. The two agencies with the most presence are the Coast 
Guard and the Customs Service. Since September 11, 2001, both 
have sought improved and timelier information, so that they can 
better evaluate the risk of ships, cargo, passengers, and crew 
destined for the United States, and decide which to target for 
additional and closer inspection. Currently, the Customs 
Service only inspects about 2 to 5 percent of imports and 1 
percent of exports.
    This hearing will examine what Federal regulations are 
needed to ensure port security for various aspects, such as 
security of U.S. and foreign ports, facility security, vessel 
security, cargo identification and screening, and 
transportation security cards and background checks. Federal 
regulations govern the conduct of non-Federal parties and 
specify detailed procedures to ensure uniform implementation of 
laws.
    Key questions are whether the Federal Government should 
require a core, minimum, or baseline set of regulations; for 
instance, training, drills, fencing, cameras, lighting, and 
guards, and the like, for non-Federal private parties, or more 
prescriptive requirements, and if the Federal Government should 
allow self-certification by non-Federal private parties.
    Coming out of business as I do, I recognize the 
difficulties of balancing the need for security with the 
demands of commerce. That is a very, very sensitive subject for 
us. I am particularly sensitive to the costs of excessive 
government regulation. But I have to admit, I must say, we live 
in a changed world, and these additional precautions to protect 
our fellow citizens and our economic well-being are necessary.
    I do look forward to hearing the testimony of our 
witnesses. I introduced them previously. I do want to add a 
couple of things.
    First of all, we have prepared for this hearing. We came 
out here a month and a half ago to visit a number of you. We 
followed up on a number of things that we have talked about at 
that time. I am aware that this port--and this area in 
general--has far in excess in revenues than it spends in costs 
in the form of customs and customs duties.
    I happen to think one of the things we ought to look at 
very closely is whether to take at least a portion of that 
excess and allocate it directly for investment in this port as 
a means of financing various commitments to a number of things 
that we will talk about today.
    With that, I want to, first, welcome my good friend from 
this area who represent a number of geographic communities 
around America, welcome. I will recognize you for comments, Mr. 
Janklow, for the purpose of an opening statement.
    [The prepared statement of Hon. Doug Ose follows:]

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    Mr. Janklow. Thank you. Thank you very, very much, Mr. 
Chairman, and thank you for conducting this hearing. I have 
been a Member of Congress now for just a couple of months, and 
was elected to represent my State and have very quickly moved 
in this direction. Let me show you clearly, the importance of 
dealing with issues such as this, and I say that because there 
can't be anything more timely than the security of the ports in 
this country.
    Just in the last couple of weeks, we in Congress 
appropriated several billion for additional assistance to the 
airline industry, having only 2 years ago appropriated from 
Congress billions more for helping the airline industry. The 
assistance that has been given with respect to the major 
modality for moving goods into the United States, the shipping 
industry, has been minuscule compared to what has taken place 
with respect to the safety of the goods coming into our ports.
    A classic example would be the huge reduction in thefts in 
this particular port over the last few years. But you can 
really see it at least from the statistics that I have looked 
at pre-September 11th, and the post-September 11th activity 
with respect to thefts within the port. There is an indication 
that, since September 11th, there has been an incredible 
reduction, which tells us it can be done. Safety can be made 
better when people really focus on it.
    Looking at some of the testimony from the witnesses that 
are going to testify today, I am really excited to see the 
various comments that they have to make with respect to a 
common ID system, or an ID system of some type, and how they 
struggle to determine what may be the best thing. And, this may 
be something which is a seemingly unique Federal role that 
needs to be played.
    The fact of the matter is, the terrorists are not going to 
send into our country trucks and cranes and huge vehicles. They 
are going to send into our country things like plutonium, the 
size of which would fit in this 12-ounce can, enough to make an 
atom bomb according to one of the lead physicists at the 
Lawrence Livermore Lab at UCLA. The amount of uranium-235 that 
it takes to make an atom bomb, assemble an atom bomb, would fit 
in a water bottle.
    So an atomic bomb can be made nowadays by anyone who is 
trained as a physicist, and he has some rudimentary skills--or, 
I should say, reasonably good skills--in the manufacturing of 
technology. Not that I can do it, but there are five ways you 
can find on the Internet that will tell you how to assemble a 
device such as that.
    We talk about the standards, and Congress very quickly 
passed things like the Maritime Safety Act, but didn't include 
really the standards that have to be applied by the executive 
branch with respect to the parameters of how this is going to 
be implemented. What makes that important is it is following 
the things that we should require all the local ports to decide 
for themselves what the average security mechanisms are that 
they have to follow.
    Various National Guards from all over this country have 
been called to active duty recently. There are none of them 
wandering around active duty in the Armed Forces making their 
own plans, or coming up with their own schemes on how to win a 
war, and deciding what their roles will be in terms of our 
country's national defense.
    Once they were called to active duty, they also fell under 
one unified command in terms of one set of implementation. It 
can't be under different with respect to the standards that are 
going to be applied to the safety of this country for the 
importation of things which come through our harbors.
    In the written comments, Mr. Ose, you talk about the huge 
surplus that is generated in this particular port. I believe it 
was something like $600 million. It was gathered in collections 
of duties in this port in excess of the surplus that is 
generated in America. Forty-two percent of all the goods in 
America come through this port, and a minuscule amount of the 
number that has been appropriated for safety in this country 
has yet to come through this port.
    That defies logic. There is no other way to look at it. 
And, recognizing that we in America are in the ``me'' business 
of homeland security--something honestly we haven't been 
concerned about since Pearl Harbor back in 1941--a whole new 
dimension. Recognizing that the only three things that were 
built in this country, with true security in mind, are the 
military bases, the prisons, and the banks.
    There is nothing else that has been designed abroad for 
America to be concerned about national security, but we have 
got a huge amount of ground to cover in a short period of time.
    As I say all the time, we talk about interim roles. The 
fact of the matter is, Al-Qaeda, the Hezbollah, the people who 
hate us, aren't on an interim schedule, and we can't afford to 
be on an interim schedule either.
    Your calling this meeting today is so timely, and I 
appreciate the opportunity to participate in it with you, and 
the leadership that you have provided here for the safety of 
every man, woman and child in this country.
    Thank you.
    Mr. Ose. Thank you, Congressman Janklow.
    We have been joined by both Congressman Rohrabacher and 
Congresswoman Harman. We have already passed unanimous consent 
to have them join us to participate in the hearing. You are 
certainly welcome.
    I know one of the duties I need to take care of this 
morning is to duly have our last witness sworn in. Would please 
rise and raise your right hand.
    [Witness sworn.]
    Mr. Ose. Let the record show the witness answered in the 
affirmative.
    I need to enter into the record that this was with 
unanimous consent a written statement by Councilwoman Hahn. 
Without objection, that will be done.
    [The prepared statement of Ms. Hahn follows:]

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    Mr. Ose. I would like to recognize my friend from UCLA, 
Congressman Rohrabacher, for the purpose of an opening 
statement.
    Mr. Rohrabacher. I will try to make this short. First of 
all, my gratitude to Congressman Ose. I have worked with him 
for several years now in the House of Representatives. He is 
probably one of the hidden treasures in Congress, and probably 
the folks down here don't know about you, but he is one of the 
creative and energetic leaders that we have in Congress. We are 
very grateful that he is now focusing on a problem that 
concerns the safety of our local area, as well as our families, 
and we are very grateful for the leadership you are providing 
here today.
    We have taken for granted security and safety issues in the 
ports for far too long, and we could get away with it in the 
world the way it used to be. We cannot get away with it 
anymore. There is a crying call now for us to act, not just to 
talk but to act, and to take those steps that are necessary to 
make sure that our ports are not the entry portals into our 
society from which terrorists will be able to murder millions 
of our people.
    This is a very awesome responsibility, but we need not only 
to be caught up in the overwhelming nature of this challenge 
but also we need to be able to break loose and make the 
decisions and do what is necessary to make the changes, so that 
we are no longer vulnerable, or at least to dramatically reduce 
the vulnerability.
    To do this, we will need technology development. I 
understand that there is technology being developed. We will 
need the cooperation, and that is cooperation between the 
members of government, but also between government and the 
private sector, and also in the private sector cooperation 
between management and labor.
    Third, we are going to need resources, and I do not believe 
that we should just look at traditional areas for resources 
with duties collected alone as the means of achieving this 
goal. We have to be creative.
    I have proposed that we consider a container fee on the 
containers coming in and out of this port that would then be 
used to finance the upgrades in security and other types of 
infrastructure upgrades needed by this port and by the various 
ports in our country. This will mean that the people using the 
ports overseas, in Shanghai or wherever, would be paying the 
costs, because they are paying a fee to use the containers 
through the port.
    They would be paying the cost, rather than having the 
American people pick up the entire cost for making this more 
secure, and, thus, basically paying for an infrastructure cost 
for our competitors overseas.
    So, that is my suggestion, and I will be looking forward 
today to hearing the testimony and hearing other people's 
description of the problem, but also offering their solutions.
    Thank you very much.
    Mr. Ose. I thank the gentleman.
    I would like to welcome our good friend and a staunch 
advocate for California's and the country's security interests 
among others, Congresswoman Harman, for the purpose of an 
opening statement.
    Ms. Harman. Thank you, Mr. Chairman.
    I apologize for being late. Dana Rohrabacher and I were 
participating in a forum in Torrance, CA, up the road on 
hydrogen power.
    The reason I mention that because maybe some of you folks 
are interested in that, but also one piece of the answer long-
term to our national security problem is energy independence, 
and I feel very strongly about that, and do take to heart my 
curmudgeon self-identified curmudgeon friend's observation: We 
always have to ask, what will it cost, and who will pay? But I 
do think it is important to think about, what will it cost, and 
who will pay, if we don't wean ourselves from dependence on 
Middle Eastern oil.
    Segue to this hearing, which I think is extremely important 
and commend you for coming down here. We are physically this 
minute in the 36th Congressional District, which I represent, 
and I also represent the neighbors around the port. The port 
was well cared for, I hope, in the last decade. It will 
continue to be well cared for, the actual physical port, by 
Dana Rohrabacher, who has reacquired it as part of his 
congressional district.
    My point in mentioning all of this incredibly interesting 
history is to make the point that we are here together to work 
together. National security and homeland security issues are 
not partisan issues. The terrorists won't check our party 
registration before they blow us up. We had better darn well 
work together, all of us in government, all parts of this 
community, labor and management, and so forth, if we are going 
to solve this problem.
    In that regard, I would really like to commend many of the 
people in this audience, all of whom are different, but one of 
them Coast Guard Captain John Holmes. Are you here, John? Where 
are you? There he is.
    On September 12th, if I remember this--or maybe it was 
September 11, 2001, he made the Federal Government resources in 
this area work together, and he would also have to commend 
Janice Hahn for what she does at the local level to make this 
work. I would like to commend the leadership of the port for 
what it does.
    I would like to commend the private sector, both organized 
labor, the ILWU, and management, for what they are doing to 
make all of us work together.
    Well, let me make some points that you may have made, but 
they stand out in my mind particularly today because the 
Homeland Security Director Tom Ridge arrives in the 
neighborhood in about 2 hours. He is not coming here, although 
his Deputy, Gordon England, was here about a month ago.
    Ridge will be downtown meeting with first responders from 
all over the State. He will then go to the Terrorism Early 
Warning Group, which is an emergency center set up by the 
county. Tomorrow he will be at LAX, which I think we all know 
is a top terrorist target. But, I know his mind is on, or 
better be on, what security is. I know he knows, as we do, that 
these ports are not just jewels of this neighborhood. They are 
the gateways of 40 percent of the trade in and out of the 
United States.
    Now, as Dana Rohrabacher was just saying, while the 
consequences of not acting to make these ports safer are huge, 
and so by any of your thoughts, what does it cost and who is 
going to pay for it, I know the answer about the costs of 
inaction. So I commend you, Mr. Chairman, for this hearing.
    I would just like to make a couple of comments on what you 
are holding this hearing about, this Maritime Act that we 
passed last year in the Congress. It is a good thing, but in 
the fiscal 2004 budget, you should be aware that the 
administration has not requested full funding, and it is--as 
far as I can tell as yet unlikely that this bill will be fully 
funded. I think the consequences of that are sobering.
    It is not, of course, only about money. It is about 
cooperation and strategy. But, let me just point out something 
that I think we should all reflect on, and that is that a 
little while back, a few months back, we had a lockout in this 
port for 10 days. That was not related to homeland security. It 
was related to a labor-management dispute.
    But, the loss to the U.S. economy from 10 days of closure 
was $2 billion, with a B, a day. The ramifications were felt 
from Wilmington, CA, to Wilmington, DE. Everybody got hurt. 
Imagine the disruption. Some ports were instead affected by the 
international sinking of a ship in the outer channel or the 
detonation of weapons of mass destruction inside of containment 
at one of the terminals.
    Indeed, a recent simulation which was an exercise, 
actually, I was involved in, determined that steps following 
the identification of a radiological device on an inbound ship 
could lead to a $58 billion loss to the U.S. economy. So, this 
is real money. These are real people. This is an urgent 
problem.
    Hopefully we will fund the MSTA fully, but beyond that we 
will develop one national integrated homeland security strategy 
that values ports as much as it values airports. That will be, 
I think, the critical agreement and something I am going to 
talk to Tom Ridge about.
    I really commend my colleagues for their work on this and 
the electives in the audience and the officials here, I am 
happy to welcome you all to the 46th Congressional District.
    Thank you, Mr. Chairman.
    Mr. Ose. Thank you, Congresswoman.
    We will now go to the witness panel. There are six 
witnesses. We have received written testimony from each of you, 
and we have them recorded. Our standard operating procedure is 
that the witnesses will be given 5 minutes to summarize their 
testimony that they have previously submitted.
    For the members of the audience, there are copies of their 
written testimony at the entrance to the room. You are welcome 
to get copies of those.
    I recognize Mr. Keller for the purpose of 5 minutes for an 
opening statement.

  STATEMENTS OF LARRY KELLER, EXECUTIVE DIRECTOR, PORT OF LOS 
    ANGELES; TIMOTHY PARKER, EXECUTIVE SECRETARY, STEAMSHIP 
    ASSOCIATION OF SOUTHERN CALIFORNIA; JOHN OCHS, SECURITY 
MANAGER, MAERSK SEALAND, LTD.; ROB MARSHALL-JOHNS, DIRECTOR OF 
    OPERATIONS AND QUALITY CONTROL, THE OPPENHEIMER GROUP; 
    STEPHANIE WILLIAMS, VICE PRESIDENT, CALIFORNIA TRUCKING 
ASSOCIATION; AND DR. DOMENICK MIRETTI, SENIOR LIAISON, PORTS OF 
    LOS ANGELES AND LONG BEACH, INTERNATIONAL LONGSHORE AND 
                        WAREHOUSE UNION

    Mr. Keller. Thank you, Mr. Chairman. We appreciated your 
visit in February, and we welcome you back today. Thanks, too, 
to the members of the Government Reform Subcommittee on Energy 
Policy, Natural Resources and Regulatory Affairs for inviting 
the Port of Los Angeles to testify before you to share our 
concerns about what is needed to enhance our port security. Our 
concerns focus on Federal port security grants, international 
cooperation, and smart economics.
    As you know, the Port of Los Angeles is one of the Nation's 
busiest ports. As a premier port of entry for the cargo on the 
West Coast, the port occupies 7,500 acres of land and water, 
along with 43 miles of waterfront. Together with our San Pedro 
Bay neighbor, the Port of Long Beach, we handle more than 42 
percent of the Nation's containerized commerce. Additionally, 
the Port of Los Angeles is the fourth busiest cruise center in 
the United States, and is No. 1 on the West Coast with over 1 
million vacationers annually.
    At this time in our Nation's history, the Port of Los 
Angeles must balance the increasing demand for development and 
international trade with critical security requirements. 
Without a doubt, as a critical hub for commerce, the Port of 
Los Angeles is vital to our Nation's economic well-being.
    We take very seriously our responsibility to maximize 
security for cargo, people, and property. In the event of an 
unforeseen incident, whether caused by outside sources or 
natural disasters, it is our responsibility to stay up and 
running without delay in order to bolster the national economy.
    Since September 11th, we have spent approximately $6 
million of our own funds to enhance the port's security. We 
have added manpower and equipment resources for our Port 
Police. We have spent millions to improve our World Cruise 
Center, so it is now a model for efficient and safe passenger 
handling for Customs, Immigration, and the cruise line 
passengers.
    There is, of course, always room for improvement, and we 
are no exception. With Federal funding through the TSA's Port 
Security Grant Program, we will be more than able to pursue 
security enhancements for port facilities and infrastructure 
improvements. We have started the process to assess our needs 
and to serve as a national and international model for 
credentialing inspection systems, but funding is needed to 
implement these measures.
    Since September 11, 2001, just $92.3 million of $368 
million in appropriations has actually been distributed to 
ports in the first round of TSA grant funding. During that 
initial round of grants, the Port of Los Angeles received only 
$1.5 million for a joint grant request with the Port of Long 
Beach, despite the fact that we are the busiest port complex in 
the Nation.
    More is truly needed as our Nation depends on efficient and 
safe transportation networks to distribute cargo efficiently 
along our trade corridors. The ability to move cargo seamlessly 
through the Port of Los Angeles is crucial to the overall 
economic vitality of the Nation.
    The second round of grants for these funds, which closed 
last month, drew requests for nearly $1 billion in 
improvements, with only $104 million available. We have a long 
way to go. The Port of Los Angeles applied for approximately 
$15.5 million. I have provided a detailed list of our proposed 
programs with our submitted testimony. The Port of Los Angeles 
is not seeking frivolous enhancement. We are, however, seeking 
improved security measures through the available Federal 
grants.
    Security infrastructure and improvements at the Port of Los 
Angeles are critical to ensure that the flow of international 
trade is maintained at the highest and safest best possible 
standards.
    Our Nation requires these security enhancements to 
safeguard our transportation systems which are dependent upon 
international commerce.
    A terrorist attack at the port would not only cause havoc 
in our region but also seriously affect the maritime trading 
system and thus disrupt U.S. and international commerce. As 
part of the Nation's largest port complex, we need to receive a 
reasonable and appropriate share of the Federal port security 
funding. Security funding needs to be based on the potential 
consequences of terrorist activities.
    Realizing that the safety of southern California's port 
system is closely tied to international transportation hubs, 
our programming has also extended offshore to our Asian 
partners. Focusing on containers, we have instituted measures 
to push back our borders to the points of origin for the 
millions of containers crossing our docks each year.
    Of primary concern was the ability to ensure that a cargo 
container hasn't been tampered with at the port of origin or in 
transit. We believe that it is a far better approach than 
applying maximum security once the container reaches our shores 
and it is basically too late.
    The Container Safety Initiative, as part of Operation Safe 
Commerce, is the vehicle currently being utilized to review the 
supply chain of containerized cargo. Operation Safe Commerce is 
a $28 million pilot project funded by the Transportation 
Security Administration and managed by the U.S. Customs Service 
and the Department of Transportation.
    Customs officials are being dispatched overseas to Hong 
Kong and Singapore, among other ports. The project will provide 
security gap analysis and act as a testing ground for a myriad 
of technologies. OSC was approved in July 2002.
    The port complex of Los Angeles and Long Beach is one of 
only three load centers in the Nation chosen to participate in 
this unique project. The other participating port complexes are 
New York/New Jersey and Seattle/Tacoma. Modern Terminals in 
Hong Kong became the first foreign terminal operator to agree 
to participate in Operation Safe Commerce with us, and Mayor 
Hahn, following his initiative. We anticipate that the Port of 
Singapore Authority will sign on as well near in the future.
    Sandia National Laboratory is the port's security 
consultant for Operation Safe Commerce and is already doing 
evaluations here and abroad.
    Mr. Ose. Mr. Keller, given the number of witnesses, can 
you--I have your written testimony. Can you summarize, sir, in 
the remaining time?
    Mr. Keller. I certainly can, sir.
    Mr. Ose. Thank you.
    Mr. Keller. The costs are high, indeed. You understand 
that. But we implore you to give us the funding we need. We 
don't believe we are not asking for a handout. We are asking 
for some help, so we can do with technology and modern tools 
what we are currently doing with manpower and sweat and blood 
right now.
    Thank you, sir.
    [The prepared statement of Mr. Keller follows:]

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    Mr. Ose. Thank you for your testimony.
    We have done some quick math up here. I have doublechecked 
it and triplechecked it, which is unusual in a Federal agency. 
We are going to come back to the question on funding relative 
to the amount of duties that are collected here and what has 
been reinvested here by the Federal Government. So make sure we 
get back to that question. OK?
    Mr. Keller. Certainly.
    Mr. Ose. I would like to now recognize Mr. Tim Parker for 
the purpose of an opening statement for 5 minutes.
    Mr. Parker. Good morning. My name is Timothy Parker. I am 
the executive secretary of the Steamship Association of 
Southern California, which represents 45 shipping lines and 
terminal operators at the ports of Long Beach and Los Angeles, 
collectively the largest port complex in the United States and 
the third largest in the world.
    In the way of background, the Steamship Association of 
Southern California and the Pacific Merchant Shipping 
Association, based in northern California, have recently voted 
to merge to form one united organization representing shipping 
companies throughout California. Collectively, under the name 
of the Pacific Merchant Shipping Association, we believe that 
we will be even better able to meet the challenges we face in 
the evolving environment at the local, State, and Federal 
levels.
    One of these challenges is clearly security. We greatly 
appreciate your invitation to appear before you. We would like 
to share some of our insights on how we can all work together 
to enhance port security and ways that seem insecure at this 
time.
    My brief presentation is framed around four core themes. 
What are shipping companies doing today? How are the cities, 
counties, and State of California assisting us? What can the 
Federal Government do to enhance these efforts? And, what are 
the economic ramifications?
    First, I would like to state that while shipping companies 
are ready, willing, and able to support and assist the 
government to protect our ports, we cannot act as government 
functionaries. We cannot, for example, perform law enforcement 
activities, such as patrolling the waters around the ports. We 
can, on the other hand, control access to our terminals and 
facilities.
    Current measures include increased security at terminal 
gates and vessel gangways to verify both cargo and personnel 
movement. These additional costs are borne by shipping 
companies and terminal operators.
    We have made numerous upgrades to computer systems at every 
terminal to meet the new regulations of the Customs 24-Hour 
Rule. This cost is now part of the overall transportation cost 
to a consumer. We work directly with the Coast Guard in the Sea 
Marshall Program, which provides the escorted vessels to dock 
areas.
    As representatives for the ports of Los Angeles and Long 
Beach have indicated, they are collectively spending 
significant portions of their revenue for additional port 
police, security equipment, port infrastructure, including 
cargo inspections, identification, and security systems.
    At the same time, these are tough times for State and local 
agencies. There is a growing temptation for local government to 
cost-shift more obligations onto private shipping and 
stevedoring concerns for basic port operations. State and local 
governments are also imposing more regulatory conditions on 
port operations, some of which may actually divert resources 
from port security.
    A proposed $1 billion bond measure would secure $200 
million for port security, with a significant amount targeted 
for southern California. There, however, are no immediate 
fixes, nor approval of this bond measure.
    While the Federal Government has taken a lead role in 
securing our harbors, there is more it can do. I have to 
commend the leadership of the U.S. Coast Guard for running what 
I think is the best command in the United States. The random 
boarding of vessels and unannounced inspections, among other 
measures, are crucial steps. U.S. Customs Service and 
Immigration and Naturalization Service have also been very 
supportive of efforts to keep our facilities secure.
    The focus and attention of each of these Federal agencies 
is crucial, since the shipping companies and terminal operators 
cannot perform Federal functions, whether it is patrolling the 
waters, inspecting cargo, or checking the identification of 
seafarers.
    That said, there are two areas where the Federal Government 
can provide the necessary leadership. First, it should fully 
fund the activities of government agencies to provide port 
security in a comprehensive and effective manner.
    Second, it should ensure, by Federal preemption where 
necessary, that operating requirements and restrictions imposed 
by State and local governments are consistent with the goals of 
the overall port security. The U.S. Coast Guard, for example, 
should be given authority to ensure that State and local 
mandates are consistent with enhanced port security.
    There has been much discussion at both port and Federal and 
State levels of applying some of the cost of added security to 
the cost of cargo or transportation. As an industry, we believe 
that fees placed on cargo or goods movement would have a 
disastrous effect on both the regional economy and broader 
economic objectives of the United States.
    I thank you for your time.
    [The prepared statement of Mr. Parker follows:]

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    Mr. Ose. Thank you, Mr. Parker.
    Our next witness is Mr. John Ochs, who joins us from 
Maersk. Thank you for joining us. You are recognized for 5 
minutes.
    Mr. Ochs. Good morning, Mr. Chairman. I am John Ochs, 
representing Maersk SeaLand. Maersk SeaLand sails a fleet of 
250 ships, owns 1 million containers, and manages 13 terminals 
here in the United States.
    We salute the effort of the Federal Government to secure 
our Nation against terrorism. I am pleased to report that 
Maersk was the very first ocean carrier to become certified 
under C-TPAT, the Customs Trade Partnership Against Terrorism. 
We are also active participants with both the container 
security goals and the Operation Safe Commerce.
    Maersk supports the intent of the Maritime Transportation 
Security Act and is prepared to comply with the MTSA and the 
related Federal interim rules expected to be promulgated this 
summer. A review of the pending regulations has produced some 
concerns that I would like to bring to your attention this 
morning.
    These issues are generic to every waterfront facility, 
including refineries, powerplants, and ferry terminals. 
Although we do not represent our peers in the container 
industry--who are also our competitors--we are confident that 
they would agree with our observations.
    The key point for your consideration, sir, is the basic 
concept that port security must be a true partnership between 
the government and the maritime transportation community. We 
each have different roles, because we each have different 
responsibilities, jurisdiction, and legal authority.
    Over the last year, prudent measures have been implemented 
to control access into waterfront facilities. As a waterfront 
facility operator, we can inspect personnel and vehicles as a 
condition of entry into our terminal. But, our employees do not 
have the power to detain or arrest, and, clearly, do not have 
the legal authority to actually search a vehicle as is 
suggested by the pending regulations. Further, we lack the 
special equipment and dogs required to actually detect 
potential explosives.
    The pending regulations imply that each waterfront facility 
should deploy their own fleet of security boats. We do not 
conduct patrols on the public roads outside of our property 
line and should not be expected to conduct waterside security 
operations on public waterways next to our terminals. We do not 
have the legal authority to police the navigable waters of the 
United States.
    The regulations also suggest that each terminal have their 
own staff of divers to inspect pier structures prior to the 
arrival of a vessel. The detection of underwater explosives is 
a national defense mission performed by the military, or a 
counterterrorism activity conducted by a very few police 
departments with specially trained dive teams. Clearly, this 
responsibility cannot be deferred to civilian resources.
    As a commercial enterprise, we do not enjoy the 
government's certain sovereign immunity, and, therefore, cannot 
be expected to conduct either law enforcement or military 
operations. In fact, if these responsibilities are thrust upon 
us, we doubt that any facility would be able to obtain property 
or liability insurance.
    The Maersk SeaLand container terminal here in Los Angeles 
is the largest container terminal in the world. It is protected 
by the Los Angeles Port Police, the Coast Guard, and the other 
Federal agencies reporting to the new Department of Homeland 
Security. These agencies are staffed by dedicated professionals 
who train and operate as a unified team. They comprise the 
finest law enforcement and port security cadre in this Nation.
    The $8 billion--I want to repeat that, $8 billion--in 
Federal funds used to protect our airports should serve as the 
benchmark for additional resources that our local agencies 
require to enhance their capabilities to secure this 
economically strategic harbor.
    In conclusion, some of the pending Federal regulations blur 
the line between commercial responsibilities and government 
duties. We hope you will agree that any mandate to actually 
conduct searches or to patrol public waterways must be 
performed by a government agency that is staffed with the 
trained personnel, the proper equipment, and the legal 
jurisdiction and actual authority to arrest potential 
terrorists, identify contraband, and detect explosives.
    I appreciate the opportunity to share our concerns with you 
here this morning about how these regulations will impact the 
security of our Nation's strategic commercial seaports. Thank 
you, Mr. Chairman, for your attention to the critical issues 
regarding the partnership between the maritime industry and the 
government.
    [The prepared statement of Mr. Ochs follows:]

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    Mr. Ose. Thank you, Mr. Ochs. I appreciate your sharing 
with us your testimony.
    Our next witness is Mr. Rob Marshall-Johns who is the 
director of operations and quality control of Oppenheimer Co. 
Thank you for joining us. You are recognized for 5 minutes.
    Mr. Marshall-Johns. Thank you, Congressman Ose, thank you 
to the committee for the opportunity to testify here today. The 
Oppenheimer Group is an international marketer of produce, with 
our imports into the United States and Canada.
    The security rules and requirements, we believe, must be 
collaborative in nature on an international basis. We see that 
the requirements for U.S. and foreign port security should be 
centered around recommendations on a systematic approach for 
inclusion in the global or international port security--for 
example, through the International Maritime Organization, as a 
branch of the United Nations.
    U.S. Federal agencies should be focused more on an auditing 
role. This will allow individual countries and ports 
flexibility due to individual physical requirements, laws and 
requirements, similar in content to the C-TPAT, of which we are 
a member.
    The focus, as it has been outlined in the proposal, shall 
be based on three areas, and this is important for facility 
security. At the present moment, the U.S. Coast Guard is 
adequately controlling or monitoring vessel security. We see 
that any new rules or regulations must be consistent across all 
agencies. For example, the 24-Hour Rule for U.S. Customs and 
the proposed FDA Bioterrorism Act have similar requirements, as 
far as presentation of information prior to arrival. However, 
there are inconsistencies in how that information is to be 
delivered, and, therefore, this is adding extra costs to the 
exporter, in particular.
    Port security. Again, we have been doing this for the 
consistency required in terms of mandated requirements, and 
this has been left up to the individual port facilities to 
undertake. We see that the role of Federal agencies should be 
an auditing or monitoring role in assuring that these 
requirements are met.
    Facility and port security. We have to investigate the 
restrictions of access to certain areas at certain times, 
whether its locked-downs during lunch breaks, or whether its 
restrictions of personnel to specific parts of the facility. 
Personnel security needs to be improved, and we have heard a 
lot about the transportation workers identification cards, the 
pilot program that is now about to be implemented in the port 
of Philadelphia.
    BC. Background checks and ID cards are an absolute 
necessity. For instance, in the trucking industry, we see a 
need for the same. This is part of the total transport network 
that is involved in the ports. The screening and monitoring of 
cargo going into and out of their ports must be checked on a 
random basis.
    The cargo identification and screening, under the U.S. 
Customs 24-Hour Rule, we believe, is far too restrictive on the 
produce industry. The requirement is now 24 hours' advance 
notice prior to loading. Based on climate, based on the 
perishable nature of products, there should be some way that 
you would get some latitude here.
    We believe that U.S. Customs screening, which is required 
now, should be included as part of the previously discussed 
international standards, we should see random screening in the 
ports of loading, and also random screening at the ports of 
discharge. The costs can be excessive, and they must be spread 
across the whole community.
    At the moment, we are seeing charges of anywhere between 
$100 and $800 per container charged to the exporter for each 
screening. We believe that perhaps we should be looking at a 
surcharge across all cargo. The transportation security cards, 
as I was saying, we need to ensure that anybody who has access 
to any of our port facilities across this Nation and perhaps 
internationally is carrying them.
    We see that product security is an important part of trying 
to defend and ensure that the supply of food to the consumer is 
not in any way jeopardized, and that we've tried to strengthen 
it. We see this in the protocols that we have developed for our 
own internal use--for our own company and for all of our 
service providers and suppliers this is something that we have 
now--we're not forcing, but we're requesting that they adhere 
to.
    Just in closing, September 11th changed our lives forever, 
and I think we, as a community feel, the cost of security is 
for everybody to be involved. It can't be loaded on one person. 
It can't be loaded on one company. And, whether it comes 
through from Federal agencies, taxes, whatever way, the 
consumer is going to end up paying. Security is the 
responsibility of us all, and it should be proactive versus 
reactive in nature.
    [The prepared statement of Mr. Marshall-Johns follows:]

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    Mr. Ose. Thank you, Mr. Marshall-Johns.
    I want to come back to the protocols that you mentioned, 
but I would like to examine them, so don't let us get away 
without coming to those, OK?
    Mr. Marshall-Johns. Sure.
    Mr. Ose. Ms. Williams, we appreciate your coming. Stephanie 
Williams joins us as the vice president of the California 
Trucking Association. You are recognized for 5 minutes.
    Ms. Williams. Thank you. Good morning, and thank you for 
inviting the California Trucking Association to this hearing. 
We appreciate being participants in this and want to continue 
being participants as this moves along.
    We, of course, are most concerned of the landside 
operation, and I think, as you look at the ports, especially in 
California, the landside has been ignored for a very long time, 
and it has caused lots of conflict with communities, with the 
trucking industry, in general, in the State of California.
    We have actually had a number of bills move forward on 
security in California that may conflict with what is happening 
federally, and we are hoping that the Federal Government would 
preempt and make consistent the protocols for all ports. Either 
way, they would include what California has done but in a way 
that is fair to the ports in California from a competitive side 
versus those on the East Coast.
    There was initially, a bill passed, S.P. 1257, by the 
Senate Transportation Chair Murray that requires trucks moving 
interstate/intrastate loads to lock their facilities with some 
particular lock right now. So this particular bill is going to 
have far-reaching impacts on interstate trucking.
    There are 1.8 million intrastate/interstate trucks allowed 
to come into California registered in the IRP. There are only 
207,000 intrastate trucks registered here. Some of the things 
that are happening in California with respect to intrastate 
loads carried by interstate carriers, they are going to have 
far-reaching impacts. So, we would hope that the Federal 
Government does step in and prevent some of the things that are 
happening as we move along.
    The definition of a port facility will have long-lasting 
impacts on some of the carriers located near the port 
facilities. There are trucking companies that have facilities 
on port operations, and it would make sense for a trucking 
company to be held to a port security protocol, because they 
truly are moving freight and moving boxes from point A to point 
B. So, we would like that to be considered when rules are 
coming down.
    Our biggest concern is the background check and the 
credentialing. Although we feel supportive that it is a good 
time to do that, if you look at the land-side facilities you 
imagine that there are more trucking people, drivers, moving 
through those facilities than probably port people moving 
through those facilities. You really can see that the problems 
can come from both sides.
    The number of drivers and the type of drivers that we have 
at our port facilities, we really need to be considerate of 
congestion and people standing around with idle time. There is 
really a lot more concern on the land side that we see that is 
worth being addressed that is being addressed on the port side.
    When a big ship comes in, there are a lot of people that 
handle that one big ship. Just on the land side you have got 
12,000 people interfacing on the streets and at the terminal 
gates. It is a time when you need to look at how much the 
trucking industry should interface in the port side, and should 
we even be inside the ports? Should we stop at the gate and 
remain there, and let the port people handle what is on the 
inside of the port and the truck people handle the outside land 
side?
    There are lots of things that could be considered here, 
but, on a safety side, there are more trucking individuals 
operating inside port facilities right now than port employees.
    Our comments go through our concerns on credentialing, and 
the American Trucking Association and California Trucking 
Association have a common interest in this. The background 
checks, we want to see them done once. There is a lot of 
duplication between aviation imports, hazardous materials 
credentialing, explosives, goods for the Department of Defense, 
carrying those, border crossings.
    I think the worst-case scenario is Florida, which has 14 
ports, 14 credentials, 14 background checks, and I am sure the 
FBI is not very happy with them. It is costly, it is 
duplicative, and it seems like we could just come up with one 
really good credential and that would apply to everybody, and 
we could have periodic checks where you could make sure that 
something hasn't gone wrong.
    The disqualifying criteria: we have a driver shortage. It 
is difficult to find drivers that want to work in the ports 
because of the conditions. We don't want to have the drivers we 
have disqualified, so we would like to be more involved in 
that. We would like to see what it is that would possibly 
disqualify a driver.
    It is very arbitrary to us, and there is too much 
delegation to the Secretary, meaning that the disqualifying 
standard is if the Secretary determines the applicant poses a 
security risk. We would like that defined and possibly have the 
criteria defined, and then the security can disqualify it after 
one of the criteria were met. Just so we would have a better 
idea what we could expect from our drivers.
    We would like to see the background check tied to the 
credentialing card just done once, possibly have that card be 
in lieu of the hazardous waste and hazardous materials; have 
those put together, combined.
    I think the most important part is we want to be at the 
table, because there are more people interfacing on the truck 
side at the ports right now than are on the marine side. But 
for some reason, we are just not at the table. I think we have 
a lot to bring to this as far as safety for the ports, as far 
as safety for the communities, as far as safety for the State 
of California.
    Thank you for the opportunity to testify.
    [The prepared statement of Ms. Williams follows:]

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    Mr. Ose. Thank you, Ms. Williams, for joining us today.
    The next witness comes to us as a senior liaison to the 
ports of L.A. and Long Beach from the International Longshore 
and Warehouse Union. It is Dr. Domenick Miretti.
    Dr. Miretti, before I recognize you, I want to extend to 
you and your colleagues in the union here, the appreciation of 
the Members of Congress. It is little known, but it is a fact 
that after September 11th, in the face of great uncertainty as 
to what other threats or dangers existed, the longshoremen took 
upon themselves a conscious decision to go back on the docks 
and load commerce, and we are grateful.
    And, for no other reason, I mean, I want to say to you and 
your colleagues that this country and this Congress is grateful 
for your colleagues' willingness to do that blind, purely 
blind.
    You are recognized for 5 minutes.
    Dr. Miretti. Thank you very much, Mr. Chairman, for your 
generous remarks and for including organized labor as a part of 
this hearing and for asking me to speak on their behalf.
    Because labor is involved in numerous maritime activities, 
we have a wide range of port security concerns. For those 
additional issues too numerous to mention, please see our 
written testimony.
    The smuggling of weapons of mass destruction in containers 
through our ports is labor's worst nightmare. Those containers 
that are empty provide the easiest, most logical hiding place. 
Labor believes that therein the soft underbelly of port 
security.
    In the congressional subcommittee report, the ILWU put 
forth a program based on standardized procedures for inspecting 
empty containers. Under this plan, dock workers would inspect 
empty containers. Container seals would also be checked to 
ensure that they haven't been tampered or altered. This ILWU 
proposal is in keeping with the minimum criteria for a model 
port as set forth in the Graham Commission on Port Security.
    An additional area of concern is with those individuals 
entering marine terminals. Included in this group are truckers, 
contractors, vendors, or any occasional port visitor. Their 
arrival and departure must be more closely scrutinized. 
Recently, a trucker was given clearance to enter a containment 
facility. Once in the yard, two individuals hiding in the 
truck's sleeper proceeded to strip yard equipment for spare 
parts. They were apprehended, but this raises the question, how 
secure are the terminal gates?
    The ILWU has proposed the creation of holding areas where 
truckers could drop off and pick up containers near terminal 
gates. These secured holding areas would not only limit the 
number of truckers in a terminal, but would also expedite the 
flow of cargo.
    Organized labor working on the docks is also concerned 
about security force management and practices. The ILWU 
advocates minimum men and training standards for security 
personnel at local seaports. Presently, security guards at 
marine terminals have little or no training in crime or 
terrorist detection, prevention, or what course of action must 
be followed should a terrorist attack occur.
    Unfortunately, some local port security guards with 
invaluable on-the-job experience are being replaced by a less 
expensive work force. When workers are paid a living wage, they 
provide a dependable and responsible work force. Low-paid 
security officers become a revolving work force creating 
weakness in port security.
    If and when a terrorist event does occur, port contingency 
plans will take effect. But, unfortunately, individual workers 
don't have a clue as to what they should do. Final instructions 
will be broad and general in nature, and will vary from 
terminal and terminal. What is needed is a worker port 
readiness plan. Once implemented, port readiness exercises will 
be conducted with total worker involvement.
    In order for this plan to work, there must be a centralized 
and integrated communication system that ties together all port 
terminals. Should a terrorist event occur, all facilities could 
then act in unison.
    Mr. Chairman, I believe that the level of security at which 
our ports will ultimately function will be driven in large part 
by port productivity and the cost involved in funding anti-
terrorist measures. Industry's ability to increase revenues is 
critical in their staying competitive.
    Unfortunately, as security measures are increased, most 
often, productivity levels decrease. New anti-terrorist 
technology and more on-the-job worker involvement could, and 
should, play a crucial role in keeping our ports safe, secure, 
and productive.
    Three critical questions still beg to be answered. One, 
what realistic level of funding will be required to develop 
best practices and basic principles for marine terminal 
security? Second, is such an effort affordable or too costly to 
achieve? And, third, how involved or committed will the Federal 
Government be in funding port security programs and badly 
needed infrastructure improvements around our ports?
    Mr. Chairman, hopefully, you can help provide us with an 
answer to my last question.
    Thank you.
    [The prepared statement of Dr. Miretti follows:]

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    Mr. Ose. Thank you, Dr. Miretti.
    All right. The way we are going to proceed here is that 
each of the Members on the dais here, in a systematic manner, 
will be given 5 minutes to ask questions. We will have as many 
rounds as the Members wish to ask questions of the witnesses. 
The questions may range far afield, but they are all adjoining.
    To the extent that there are questions and we are running 
out of time in terms of our scheduled period in this room, we 
have the opportunity to submit written questions to you, in 
which case we would appreciate timely responses back. That is 
the purpose of leaving the record open.
    The order we are going to proceed is I will go first, then 
the vice chairman of the subcommittee will proceed, and then we 
will go to Mr. Rohrabacher and then Ms. Harman, and we will 
just repeat that process over and over. If a Member has no 
questions, then they pass.
    With that, we will proceed.
    My primary interest in this is, what is the worst-case 
scenario that the citizens of commerce would be as exposed to 
in a port security incident? I am going to proceed from my 
right to my left here. Dr. Miretti, how do you view that 
question? What is the worst-case scenario? What are we 
confronted with here?
    Dr. Miretti. The worst-case scenario I believe would be a 
situation where security might be breached, some type of weapon 
of mass destruction does find its way into the port, a bomb 
could be detonated, some kind of chemical warfare could be 
used, something of that sort.
    So it would not only be devastating to life and limb, but 
it could be catastrophic in terms of shutting down the port. 
Congresswoman Harman indicated the devastation that would incur 
in terms of the national economy. So that there, not just loss 
of life and limb, could occur but could help bring the economy 
of the United States to its knees.
    Mr. Ose. Mr. Ochs, one of the things that we hear about in 
Congress is blockading a port, or sanctions on perhaps some of 
the other countries in the world that the United Nations puts 
in. Could a ship be dropped in the entry to a port, and thereby 
just block it? And, if that happened, how long would it take to 
clear the channel?
    Mr. Ochs. I think folks look back on the incident with the 
USS Cole and think that a similar situation could occur here 
and shut down the port. I guess, to give you a brief answer, 
sir, the Cole is a small ship. A small ship could be sunk in 
the channel here. I think a small ship could be cleared in a 
matter of days.
    A large ship, like most of the container ships are and the 
tanker ships are, are literally unsinkable. And, if you think 
back to the experience you had in the Persian Gulf in 1988, 
where the Gulf was mined after the USS Princeton was literally 
broken in half by a mine, the Navy ships followed the tankers 
through the Persian Gulf.
    So a USS Cole-type strike against a merchant ship, in my 
opinion, is unlikely because it would be unsuccessful. Just 
from the structural nature of the merchant ship, from the sheer 
size of the ship, and the fact that a container ship, because 
it is full of steel boxes, is essentially multi-hulled.
    Mr. Ose. Mr. Keller, do you agree with him?
    Mr. Keller. I do, Mr. Chairman. We have examined this at 
some length. It is one of the worst scenarios that anybody 
could face. But, in examining it in great detail, as Mr. Ochs 
says, the types of ships that we have here, the large nature 
and the target types that would be afforded, are essentially--I 
wouldn't say unsinkable but certainly have the capability of 
being maneuvered out of the way rather than create some kind of 
inert blockage.
    Adding to that, we have also made sure that we have 
standing contracts with people with heavy lift equipment with 
the ability to move these ships as quickly as possible to 
reopen our channels.
    Mr. Ose. Congressman Janklow, you are recognized for 5 
minutes.
    Mr. Janklow. Thank you very much, Mr. Chairman.
    If I could, Mr. Keller, in your testimony, you list several 
things that you have requested funding for there on the second 
page. Starting with construction of a high-risk container 
inspection facility, and ending with a security assessment for 
$300,000. Are these in your order of priority, or are they just 
listed on there?
    Mr. Keller. I don't believe they are in a list of priority.
    Mr. Janklow. Something really bothers me. It is a practical 
thing. Are you saying that for $15 million, in the estimation 
of you and your team, you can make this port adequately secure? 
Or is this just a round of funding that you are looking for?
    Mr. Keller. This is a round of funding, Governor. These are 
some of the most important things that we see right off the 
top. As I said in my testimony a few minutes ago, we really 
need to get beyond using people to do things that technology 
can do better, so we can redeploy our people.
    Mr. Janklow. I notice that everyone wants to be at the 
table. Has labor been at the table? Has the trucking industry 
been at the table? Have the private shippers been at the table? 
Has the shipping association been at the table? Have all of 
these people been at the table, as you folks were preparing 
your plans for what is necessary to make this port secure?
    Mr. Keller. I am not certain that there is a single table. 
I mean, we have all dealt with multi-agencies at various 
levels.
    Mr. Janklow. I am not so sure I know what that means.
    Mr. Keller. Well, we tend to be very maritime-focused. So 
we have certainly been at the table with labor and the shipping 
companies. I think the trucking companies probably deal with it 
at a little different level of Federal and State officials and 
have probably been at that table.
    Mr. Janklow. How do you get this stuff out of your port, 
once it comes in on a ship or a boat?
    Mr. Keller. Truck and rail.
    Mr. Janklow. Pardon me?
    Mr. Keller. Truck and rail, basically.
    Mr. Janklow. Has rail and trucking been at the table with 
you?
    Mr. Keller. They have been at various venues, but not at 
all the same.
    Mr. Janklow. How many different law enforcement agencies 
are there that you deal with that have different communication 
systems?
    Mr. Keller. Myriad. I could begin listing them, but in 
terms of the communication systems, there is probably two or 
three. I think we have, in this area, certainly come a long way 
to harmonizing those.
    Mr. Janklow. Mr. Ochs, in your testimony you talk about the 
Maritime Security Act and the things that you like about it, 
and that you generally support it. With respect to the doing 
the security things, you assume that, for example, you want to 
be watchman, but you don't have the power to arrest them, you 
are not looking for the power to arrest. It is not your job to 
go around and figure out what are explosives and those types of 
things.
    Mr. Keller, do you agree with that?
    Mr. Keller. I do, Governor. I think that is exactly right, 
and it is particularly pertinent here, because we are what you 
call a landlord port, and we don't operate. But, for instance, 
we do have our own police force. We do have a dive team with 
that police force, and we work very cooperatively with Federal 
agencies who do the waterside and some landside enforcement as 
well.
    Mr. Janklow. Mr. Marshall-Johns in your testimony you talk 
about the programs that your company has implemented. When you 
talk about employee security, you say that you do background 
checks for ship crew and others appropriate, but you do a 
screening process for temporary employees. Why should there be 
a difference between temporary employees and full-time 
employees?
    Mr. Marshall-Johns. The background checks and screening are 
carried out on all employees, particularly the full time 
employees. They are undertaken on all employees that have any 
possible safety contact with the product, and the concern was--
--
    Mr. Janklow. But, they all have some background check, all 
of those who have contact with the product?
    Mr. Marshall-Johns. Yes, they do.
    Mr. Janklow. OK. So we are looking at the difference, then, 
between temporary and full-time in that respect.
    Mr. Marshall-Johns. In that respect, no.
    Mr. Janklow. Why would you need to use the logs 
meticulously? Wouldn't that be an after-the-fact thing that 
would help you?
    Mr. Marshall-Johns. It is part of precautions that we 
consider that security is knowing who has been in a facility at 
what times.
    Mr. Janklow. My time is about up, but I have one more 
question for you, sir. You say, ``Our personnel are trained to 
be vigilant for signs of unusual behavior among peers.'' Could 
you tell me how you train people for that? What would the 
training modality be for training people to be vigilant for 
unusual behavior among peers?
    Mr. Marshall-Johns. What that involves is just being 
cognizant of what has happened and what has consistently 
happened around you at all times.
    Mr. Janklow. Do you hold classes for that?
    Mr. Marshall-Johns. Yes, we do. Internally, we hold 
classes. We hold our own training sessions as part of our 
safety and security program.
    Mr. Janklow. Well, I am talking about goofy behavior of 
others. I am just wondering what kind of class you would hold 
to look for unusual behavior among peers. Before the witness 
answers, I just want to remind you that this is Congress you 
are talking to. [Laughter.]
    Mr. Marshall-Johns. It is a matter of just being logical 
and a matter of just being observant of what is happening 
around you. That is the key thing. Especially with new 
employees, the younger employees, it is a matter of just 
identifying where a particular risk could be.
    Mr. Janklow. Thank you, Mr. Chairman.
    Mr. Ose. Thank you, Congressman.
    Congressman Rohrabacher for 5 minutes.
    Mr. Rohrabacher. Thank you very much. Obviously, there are 
some things that we can do--watch out for goofy behavior, 
etc.--that will not be costly, but other things seem to be very 
costly.
    In your testimony, you suggested that, if I heard you 
correctly, that it would cost $800 per container to have the 
proper inspection of containers.
    Mr. Marshall-Johns. That price would be in some ports for 
the Customs screening of containers would be charged, depending 
on the freight and the location, and it would be from $100 to 
$800 per container for the screening.
    Mr. Rohrabacher. So $100 to $800?
    Mr. Marshall-Johns. Yes.
    Mr. Rohrabacher. Not $800. That is your maximum cost?
    Mr. Marshall-Johns. That is the maximum cost.
    Mr. Rohrabacher. And, that is at the current level of 
technology when you are doing it on a very manual basis?
    Mr. Marshall-Johns. Correct.
    Mr. Rohrabacher. All right. OK. I got you.
    We have discussed a lot of issues here, and there have been 
a lot of great suggestions, which I hope that there is a method 
of following up on some of the suggestions. I know from the 
trucking industry, you just had a whole lot of good things.
    I want to know how we are going to be sure that we just 
don't listen to this, that we do something about it. I think 
your idea is also--I mean, a lot of it stems from the fact that 
you are going to have a new standard in terms of where the 
truckers were and where the truckers weren't.
    That is a very interesting approach as well, and so I am 
going to be watching this very closely and working with you. 
Please feel free to call me at my office, and we will see what 
we can do to implement some of these specific suggestions.
    And, that would be true, for the others, except of course, 
you weren't just asking for money. A lot of people are just 
asking for money. You are asking for a change in the way we do 
things. I think that we have to handle every one of those type 
of recommendations that we can, and we also have to know, in 
terms of spending money, I would suggest, Mr. Chairman, that, 
if we spend money, it has to be in the beginning. We have to 
spend the money in a way that will help us come to grips with 
the worst-case scenario, which you, Mr. Chairman, had the panel 
outline. So what is it going to cost us to handle this worst-
case scenario? What will we have to do? The worst-case scenario 
being someone trying to smuggle into the United States a 
chemical/biological weapon or a nuclear weapon.
    We have to have the technology necessary and the system 
established that will handle that worst-case scenario without 
major delays box-side. OK?
    We have heard the suggestion for overseas inspection as a 
part of the new way we organize things. Again, that may not be 
a major expense, but it may be a change in the way we do 
things. In terms of inspection on the dock, it won't cost $800 
a container, because we will try to--we have to develop a 
system, and probably using technology where containers can be 
scanned as they are being taken off a boat. By the time it 
reaches the dock, that has already been taken care of.
    We are a people, a bright people, and we should be able to 
develop that technology. That, however, will be costly. Let me 
note, again, these things are costly and will cost money. We 
should do the things that we can do without costing money. The 
things we need to pay money for, we should try to find new 
sources of revenue.
    Again, sorry to disagree with your testimony, the very best 
way to do that is through a container fee that will permit 
people overseas to make a contribution, the people who are 
using the containers and using the system that we are 
developing, to sell their products, rather than simply taxing 
the American people in order to come up with the revenue that 
lets people overseas make money through using our ports.
    Thank you very much.
    Mr. Ose. I thank the gentleman.
    I am pleased to recognize the Congresswoman from San Pedro 
and the surrounding areas, Congresswoman Harman, for 5 minutes.
    Ms. Harman. Thank you, Mr. Chairman. I want to apologize to 
you and others that I have to leave shortly to return to the 
hydrogen event that Congressman Rohrabacher alluded to previous 
to this.
    But, first, I want to mention to Mr. Keller that--I think 
you know this--Congressman Rohrabacher and I are supporting 
your request for approximately $15.5 million additional for a 
command-and-control center, a new screening facility, and an ID 
credentialing system. We were happy to send a letter together, 
this is true bipartisanship, in support of that request last 
week. I appreciate the input of the Coast Guard, by the way, in 
making sure that we understood what was needed.
    I thought the testimony was very good. I particularly want 
to commend Ms. Williams for the way she comes at these 
problems. First of all, I learned a lot about trucking that I 
didn't know. What I liked about her testimony is that she said, 
``Here is the problem, and here is a suggested solution.'' 
Perhaps it is my advanced age and depleted brain cells, but it 
is really refreshing to hear somebody come up with some new 
ideas and suggested solutions, and so I commend you for that.
    I also want to say to you, Dr. Miretti, that it is great to 
see you, and that I think that the comments made by our 
chairman about the role that ILWU had right after September 
11th are correct, and I want to associate myself with him. I 
thought that was very considerate of him and appropriate of him 
to say that.
    Dr. Miretti. If I may respond, I would like to thank you 
very much. You played a very active role with the ILWU. In 
fact, I had the pleasure of serving on a maritime advisory 
committee with you 8 years ago. Thank you very much for your 
involvement.
    Ms. Harman. Well, you are welcome. I am glad that we had a 
happy outcome, some months back, to that lockout situation. It 
put that before us again as kind of the idea of what it would 
be like if we truly had a terrorist attack here. It would be 
like that times 10, and that is what we should keep in mind 
when we talk about worst case.
    Let me just ask one question. I think Congressman 
Rohrabacher is right that it is not only about money. I think 
you all agree with that. No matter how much money we provide 
here, there are things that money can't pay for. It can't pay 
for courage. It can't pay for a cooperative spirit. It can't 
pay for true, creative innovation. It can buy stuff, but the 
creative ideas have to come from folks who truly apply 
themselves and think up new systems and technologies and 
programs and ways to share. So we can't buy all that stuff, and 
I think he is right about that.
    I also think that there are things the Federal Government 
can do other than provide money, including help you bring best 
practices within the ports, provide for an integrated system of 
port security across the country, because I think we all get 
it, that even if we made these ports 99 percent secure, there 
is no such thing as 100 percent security.
    The Port of Oakland, if it were not secure, would be an 
easy way for the bad stuff to get here anyway. So port security 
isn't port security unless there's an integrated system of port 
security.
    The last comment, and I am just going to ask you for your 
reflections on what I am saying. What have you heard with these 
congressional people who have odd behavior--I'm trying to think 
about ways in which we can add value, in addition to paying for 
things. But, this whole notion of pushing borders outward, it 
does seem to me that, in addition to money, Congress, the 
Federal Government, through negotiation with foreign 
governments, can help push the borders outward, can make 
certain that foreign countries, points of embarkation, do what 
they are supposed to do to ensure that the cargo going into 
containers is safe, that those containers are inspected and 
hopefully sealed in some fashion so that we know what is coming 
along and don't have to inspect it offshore, don't have to 
worry about it offshore or onshore or on trucks or on rail.
    My light is going off. If someone has a response to this, I 
wish you would make it briefly, so that I don't take any extra 
time.
    Thank you, again, Mr. Chairman, for letting me participate.
    Mr. Ose. Thank you, Congresswoman Harman. Does somebody 
have a response?
    Mr. Keller. Congresswoman----
    Mr. Ose. Ladies first. We will go to Ms. Williams first.
    Ms. Williams. As a newcomer to the congressional side of 
this--I always worked in a State--I understand why the world's 
biggest--the country's biggest port, L.A./Long Beach complex, 
is so far down in the highway moneys.
    The communities in your district are bearing the burden. 
The trucking industry is congested, and, you know, at high 
levels of frustration. But, when it comes time for doling out 
highway moneys, we are a donor. We provide the United States--
you talked from Wilmington to Wilmington, why haven't they 
provided us the money to build 17?
    Mr. Ose. Mr. Keller.
    Mr. Keller. I would just like to answer the question about 
accessibility of foreign ports. I think the U.S. Government has 
done a marvelous job of fashioning agreements in China, Hong 
Kong, Singapore, among other countries, overcome sovereignty 
issues, privacy issues, and some of the other things, too, and 
they really get it as a result of what the government has done. 
And, I do applaud Federal resources.
    Mr. Ose. Mr. Ochs.
    Mr. Ochs. I fully concur with the concept of extending our 
borders overseas. Right now we are playing defense. For us to 
scan or sniff the box on our dock and realize that we have 
something that is ticking or glowing here is bad. We need to 
sniff or scan it overseas and fix the problem prior to it 
arriving, not just at our port but at any of the ports in North 
America.
    Your concept about a common approach for all of the ports 
in the United States is valid. I would say that it should also 
extend to the ports in Canada and Mexico under NAFTA and the 
free trade. Lots of the boxes that arrive in those ports end up 
here.
    Thank you.
    Mr. Ose. Mr. Parker.
    Mr. Parker. Yes. I think that is money that would be well 
spent. Protecting the borders is money well spent. I would much 
rather see us put that $100, or whatever fee we want to put on 
it, over there to ensure that nothing gets to the gate, rather 
than having a fee placed on something once it is inside the 
gate.
    Mr. Ose. Mr. Marshall-Johns.
    Mr. Marshall-Johns. From a Canadian company's perspective, 
from the Canadian international perspective, we see this 
pushing out the borders as part of a global problem. Terrorism 
is a global problem, and pushing the borders out to our 
international trading partners is part of trying to resolve the 
problem. So, I see that as a possibility and it's often 
mentioned in my oral presentation.
    Going through the International Maritime Organization as 
part of the United Nations is a possible solution. That's one 
way of pushing them out, but I see that as a very real need.
    Mr. Ose. Dr. Miretti.
    Dr. Miretti. Yes. I think pushing the borders out is an 
excellent idea. However, I still think that we need to be very 
much concerned about what is exported from the United States. A 
lot of things can be put in containers prior to being loaded 
onto the ship. You can push the borders out all you want to, 
but we still have to know what's in the containers here, what 
is being exported.
    There is an awful lot of non-intrusive kinds of technology 
today that might be able to help us with that, and checking 
containers, things of that sort. I think we need to be 
concerned about what is exported, as well as merchandise that 
is being imported.
    Mr. Ose. I want to extend the subcommittee's appreciation 
for the participation of Congresswoman Harman. It is nice to be 
down here visiting your district and the surrounding areas. We 
are grateful for your hospitality. Thank you for participating.
    Ms. Harman. Thank you, Mr. Chairman.
    Mr. Ose. One of the issues that we are struggling with--and 
I think Ms. Williams talked about it in Florida, in 
particular--had to do with every single different port having 
their individual identification cards. These are the folks who 
have the transportation worker identification credentials. I 
call it the TWICs for simplicity's sake.
    Mr. Keller, Mr. Ochs put some written comments in asking to 
accelerate the development of TWICs. The question I have is: do 
you have any concerns about the viability of a standardized 
smart card, so to speak, for identification purposes?
    Mr. Keller. Mr. Chairman, as I said in my testimony, they 
are one of three areas that is now funded to test the prototype 
here. I think my greatest concern is the maintaining of the 
system once it is begun. As workers move from workplace to 
workplace, or from geographical location, or from one transport 
profession to another, the updating of the system I think is 
crucial. And, in there could lie a possible weakness, if these 
things aren't thought through.
    Mr. Ose. Mr. Parker, does your enterprise have any input on 
this issue?
    Mr. Parker. Yes. As a matter of fact, I sit on the 
committee that meets out here for the Port of Los Angeles. We 
have been exposed not only to what is happening here in the 
port but also at the airport. I have a very strong feeling that 
the technology that we are moving toward is already there. We 
just have to decide what is the best one.
    I share Mr. Keller's concern that we have to keep the 
database right, and that is a very difficult thing, with a very 
large work force and a very transient work force at times. 
Today, they can be working at one facility, and tomorrow they 
can be working at another. The question is: can we readily 
identify who the person is? Does that person belong here, and 
do they belong here today? And, those are the issues I think 
that are going to be critical to the success of the TWICs.
    Mr. Ose. Well, one of the things I have been trying to be 
sure I understand is that of the pilot projects, of which one 
is here, there are different technologies that are being 
attempted to be implemented, the purpose being that we need to 
check the efficacy of these against each other.
    Is there any indication yet from where you sit that one is 
superior to the other?
    Mr. Parker. No, not yet. Actually, they just identified, 
you know, first of all, where they are going to do it, and they 
are going to do it at two container terminals, one in Long 
Beach, one in Los Angeles. Those are perhaps harder to control, 
but the ones that are really going to be the proof in the 
pudding is going to be definitely, how do we deal with that 
terminal, with all of the people coming in and out of it?
    Now, some of the test cards are going to be blind. The 
people won't know it. They will just get a green light when 
they go through. They will be able to test and see what it 
does, and it will be more sophisticated as we move on.
    The fast track that TSA is operating under I think will 
come into fast decisions, and we have to get this thing 
identified, and then go for a full-scale test of one operating 
system.
    Mr. Ose. Ms. Williams, you testified that you have probably 
more truckers moving around the immediate areas than there are 
employees onsite. What input, if any, would you provide us 
regarding the TWICs proposal?
    Ms. Williams. I don't think we should be in the port 
facilities. I think the trucks should be on the land side, and 
staff on the land side, and the people inside should be part of 
the inside. That would be a number of things because yesterday 
many of us were at a funeral for a trucker who was killed 
pulling in his truck and another truck hit him. It's just not a 
safe environment for us, the untrained or truckers. Education 
not only reflects important work conditions, but with 
congestion in different areas this becomes more complicated. I 
think it is not safe, it is not fair, and I think that security 
would be better served by moving this outside.
    Mr. Ose. I'm for it, because I have watched waterside and 
dockside. I've seen them moving the containers off the vessels 
onto the trucks. How do you move a container off the vessel and 
unto the truck or have the truck come in----
    Ms. Williams. Yes. A train hostler is a smaller piece of 
equipment that transports it.
    Mr. Ose. So, then you have to pick up the container twice?
    Ms. Williams. Well, actually, if you look at what's going 
on right now. I have a presentation that, if you come to the 
office, we can actually give you. But we move in through the 
facility, and we drop them off empty. And then, depending on if 
it is the right brand then we put them over there. So then we 
would do that and come back and move the container onto the 
mounting chassis and we will move to go to the next turn to 
pick up a fill and ``Oh this one's messed up.`` Then they will 
pick it up and take it over to the maintenance shop.
    Mr. Ose. My concern is more related to the person driving 
the vehicle. In your testimony before you mentioned ``It's just 
a mess.``
    Ms. Williams. Right.
    Mr. Ose. You mentioned a chain around their neck with 14 
parts. The standardization in that it would seem to me a great 
deal of eliminating that concern of yours.
    Mr. Williams. Right. We don't want to be inside doing this, 
doing the land side. We want to pick up something else.
    Mr. Ose. Right. Congressman Janklow.
    Mr. Janklow. Thank you, Mr. Chairman. Let me touch briefly 
on what you've seen, Ms. Williams, to all of you. Are there any 
of you that feel that when it comes to let's say, an 
identification card there shouldn't be a uniform standard? You 
all agree that would be one. I assume you all agree there is 
some concern by different interests on the panel--and I read 
your testimony Ms. Williams--but with respect to the privacy of 
this information that is gathered by individuals from a 
background security check. Are there any of you that don't have 
concerns about a centralized place in the government where this 
privacy is guided? You have some concern, don't you? Yes, Mr. 
Keller.
    Mr. Keller. I think there is a natural concern of having 
anybody's personal data reside anywhere. The level of security 
and how that is assured is probably our greatest concern.
    Mr. Janklow. I don't speak for others when I say this, but 
to all of you, but the fact that some of those do have a DWI in 
their background may be of keen interest when it comes to 
getting a CDI license or a current DWI, a drug conviction in 
the past, let us say. But for those things, are there any of 
you that feel that those things in and of themselves should 
make you a national security risk? I mean, I can't imagine 
anybody would suggest that makes you a national security risk.
    Mr. Keller. Not at all.
    Mr. Janklow. The information that would really be gathered, 
and that we would look into as a country, ought to be whether 
or not the person that is giving you the ID card is someone 
that this Nation can trust, at least not be concerned about 
with respect to the security of others in the country. Do you 
all agree with that?
    The question has come up about Federal corruption, and I 
would like to think I am probably the last of the Federalists. 
Do you agree that--and maybe this is targeted toward you, Ms. 
Williams. In your testimony, you talk about the fact that there 
may be Federal corruption with respect to identification cards. 
Do you disagree with that Mr. Keller--and I hear that, because 
you are operating the facility around here, so you focus on the 
other side?
    Mr. Keller. No, I don't disagree at all, Congressman. Part 
of the reason that I say that is that as this situation has 
gone on from September 11th, and people get frustrated, they 
see, you know, very little visible progress in the area of 
securing our facilities.
    They tend to introduce legislation at State/local levels, 
as well as Federal, and the fact is there should really only be 
one standard. There should only be one national standard by 
which these things are done. There should be flexibility within 
those, so that it accounts for local conditions. But I think 
Federal preemption is absolutely necessary.
    Mr. Janklow. If I can take, in a spare moment, the question 
I asked in your comments. When it comes to the plan, our 
standards if I can use it that way, our protocols that are 
necessary for defending the ports, if we do have some national 
standards and then a lot of things that are done by each port 
themselves call it semi-sovereignce. Or, we can have a pretty 
rigid set of national standards that courts have to follow with 
things that they could voluntarily add to that.
    Are there any of you that are opposed to the latter? Go 
ahead, Mr. Parker.
    Mr. Parker. Thank you.
    Mr. Janklow. Do you understand what I am getting at?
    Mr. Parker. I do. I do understand. Yes, I do believe that 
there should be some very, very rigid Federal standards, 
because the law wants to say every transportation worker, 
that's me, that's Mr. Keller, that is--and I am not just 
talking about workers. I am talking about the whole system of 
defense.
    But, at the same time, let us say that because the State of 
California decides it wants to do something, I am concerned 
about the overall effect on the economy of southern California 
if we say, for example, we are going to have a modified, 
enriched TWICs program that has a separate database, costs 
more, costs $15 million a year, and that has to somehow flow 
into the cargo and flow back to the shipper, or they may choose 
to go somewhere else.
    And so, we don't have trucks showing up at our front door, 
because there would be no cargo. Clearly, there will always be 
cargo in southern California, but, we would like to see it be 
as much as it always has been.
    Mr. Janklow. Thank you.
    Dr. Miretti. If I might respond to that. Thank you. Mr. 
Congressman, you indicated at some point that we were asking 
the question about individual concerns about information that 
might be gathered about someone. I think there is a certain 
amount of concern on the part of workers. First of all, I think 
a worker would be very concerned about the confidentiality of 
that information.
    Something else that might be of concern to the worker is, 
how might that information be used? Could it be used, for 
example, to terminate some individual's employment? Would it 
infringe, for example, on an individual's civil liberties? Just 
thinking off the top of my head.
    As a recommendation, let's just say that post September 
11th, or excuse me, pre-September 11th, I had developed a 
geopolitical interest in the Middle East. Let's just say that I 
had subscribed to a Taliban publication, attended some of their 
meetings simply to gain an understanding as an academician of 
what might be happening in that particular region.
    If there was a background check, would that send up a red 
flag? Would I be suspect, for example? So I think there is a 
certain amount of concern in that particular regard.
    I've owned a Coast Guard identification card that was 
issued in 1969. I was a bit concerned when I filled out the 
application for this particular card because of the questions 
that were asked. Have you ever read any of these publications? 
Have you ever attended any of these meetings? Do you belong to 
any of these organizations? How many times did you contribute 
to Harry Bridge's deportation defense?
    Did that send up a red flag? Would that be of concern? 
These are the kind of concerns that I have. I am not against 
the TWICS kind of program, but I think we have to be very sure 
of how that program is developed, how it is implemented, and 
who is involved in that program, and what happens to that 
information. Thank you Congressman.
    Mr. Ose. Congressman Rohrabacher for 5 minutes.
    Mr. Rohrabacher. Thank you, Mr. Chairman. I have to leave 
after this. Thank you very much, Tim, for your leadership. I 
appreciate the opportunity to participate. I also appreciate 
the fact that you are here in this area focusing on these ports 
and what we can do to make them safer, more secure, and at the 
same time not injure the effectiveness of the ports in doing 
the job that they have to do.
    By the way, I would hope that some of you went to a--some 
sort of a school in Iran or Libya or someplace like that. I 
would hope that they are investigated and that we know that 
they are not engaged in activities that could put us at risk. 
There is certainly some concern for people's privacy, but we 
really have to be concerned right now, because we know that 
there are people out there who have a grudge against the United 
States, simply for our way of life and they want to hurt us.
    And so, I think it will take a high level of goodwill and 
cooperation on the part of all of us to, you know, overcome 
these challenges.
    You asked a question earlier about why we don't get our 
share of the highway money. One of the first things I was 
approached on when they redistricted me into this area, again 
was how we need to change--put so much money into changing the 
710 freeway or, you know, redoing it in a way.
    Frankly, again, this is going to demonstrate what I meant 
by there are things you can do that will make things safer, 
make these ports safer, and make it more effective without 
having to spend large amounts of money.
    When I went to the 710 Freeway to check on this, I found it 
to be absolutely vacant. There was no one on the freeway. I was 
told, ``Oh, my gosh, the freeway is totally crowded, and you 
can't--`` of course, I was there at 1 a.m. [Laughter.]
    However, we have a freeway that is totally vacant and 
available to use, a huge asset that is available to use at that 
time of the morning. The Union would have to pay more money to 
work an overtime shift. That is why we don't have a 24-hour 
port. They can pay more money.
    Why not pay a little more money to do an overnight shift? 
If an overnight shift is going to be a little bit more of a 
hardship on somebody, which it is, you pay them a little more 
money, and then do it, for Pete's sakes. I think we need to 
have some very serious and frank talks with one another about 
what specifically we can do to change the way things are 
operated. You give a lot of great suggestions. We have heard a 
lot of good suggestions today that will make it better.
    We have to figure out what exactly we have to spend in 
order to at least bring down our vulnerability on our No. 1 
scenario that we would hope to avert, which is some sort of 
mass chemical weapon or weapon of mass destruction being 
brought into the port.
    So with that, thank you very much, Mr. Chairman. I have 
benefited by everything that is here, and I am looking forward 
to working with all of you to see if maybe we can have some 
sort of big pow-wow and come up with a list of those things 
that we all agree on how to restructure the way things are 
done, and then go about doing it.
    So, you know, I am here to help. Thank you very much.
    Mr. Ose. I would like to add my thanks to Congressman 
Rohrabacher for his hospitality here. He is a source of great 
influence and information for those of us in Congress who don't 
have large ports that are such academic engines. You serve the 
district well.
    We are grateful for your attendance this morning. Thank 
you.
    I wanted to examine a particular part of the new law, and 
that is the law that requires each facility with vessels to 
submit a security plan for Federal review and approval. My 
question is: what should such plans include for establishing 
and maintaining physical security, passing communication 
security, and personnel security and the like?
    In the interim final rules before we go beyond this. The 
process, as it works, is that the law allows the agency to 
issue what are called interim final rules. They can do that 
without what is ordinarily called due process where they 
publish their rules for comment, people will comment, the 
agency responds to their comments, the agency amends the rule, 
and then the agency publishes it again.
    The interim final rule process allows the agencies to issue 
such rules permanently without going through this particular 
process. There are people in the audience today who are 
prescribed, in other words prevented from participating in our 
discussion today, but who are involved in writing these interim 
final rules.
    This is a new poll that we did on the interim rule thing 
shortly after September 11, 2001. We put out some proposed 
interim final rules. We didn't have time to go out and have a 
long, deep process exchange. We brought in a bunch of witnesses 
from El Al and elsewhere to talk about the steps that needed to 
be done. We need a public setting with people in attendance who 
are part of the interim final rulemaking process, listening but 
not participating. We were able to put forth a number of ideas.
    That is the purpose of this hearing today is to convey to 
those individuals who are with us today but unable to 
participate by statute the ideas that industry and operators 
have for what ought or ought not to be included in these 
interim final rules. This is a very arduous piece of the 
process, but it is very critical for our success.
    I want to come back to the original question that I started 
dealing with. And that is, what are the minimum requirements on 
these issues establishing and maintaining physical security, 
and establishing personnel security, establishing communication 
systems? What are the minimum requirements that the interim 
final rules can incorporate? Mr. Keller.
    Mr. Keller. Mr. Chairman, we have thought a lot about this. 
We certainly think that access control through the use of ID 
cards, the TWIC card, is probably the No. 1 issue in terms of 
the facilities, securing the facilities. It allows control of 
the access. It allows identification of people. It allows us to 
know who is in and who is out or the facility operated in and 
know at any given time who is in and who is out. We think that 
this is exceedingly important.
    On the vessel side, and I am going to try to touch on a 
number of things, obviously, because there are so many pieces. 
On the vessel side, we think that the Coast Guard and Customs 
rules right now adequately define what is on a vessel and give 
some indication of the condition of the vessel as it approaches 
the port. We have the 96-hour, 72-hour, 24-hour notifications, 
which have served well on personnel, on possible intrusions on 
board the vessel as well as any indication that there might be 
cargo difficulties.
    And also, incidentally, it has served as a good 
notification for people coming who are possibly ill with SARS, 
for instance.
    On the trucking side or the railroad side, again, I think 
the idea that you know who is coming to the terminal and that 
the person who represents themselves is, in fact, the person 
who is designated to come to the terminal is exceedingly 
important.
    In terms of physical security, which is the subject of some 
of the grant material that we have put in, we think that things 
such as fence heights, locks, and security, video surveillance, 
the physical barriers should have minimum standards that are 
observed as you so rightly said. Enhancements can come as 
necessary for adaptation.
    Captain Holmes, in fact, our captain of the port, has done 
a fine job of taking a first cut at defining these minimum 
requirements. And, we have those, to some extent, in place 
already.
    Mr. Ose. Dr. Miretti, do you have input on this?
    Dr. Miretti. Yes. I would concur with what Mr. Keller 
indicated. I would like to add something, though. I think we 
are vulnerable in terms of rail access. We have a lot of stack 
trains, trains coming into the container facilities. And, they 
aren't being monitored quite as closely, as, let us say, a 
truck coming in.
    We also have a lot of rail cars coming into our bulk 
container facilities. Those I think should be more closely 
monitored.
    Mr. Ose. Your point being that a train that's waiting to 
come onto a boat, that's a pretty big piece of equipment, so to 
speak, for an engineer to keep an eye on, as compared to, say a 
cab in a trailer.
    Dr. Miretti. Yes, that is correct. As I understand it, some 
of the stack trains are 8,500 feet long. And, certainly, as 
they come into the facilities, any one of those cars could have 
something illegal on the train.
    Mr. Ose. Ms. Williams, any input?
    Ms. Williams. Separation of the land side and the water 
side in the rules are completely separate.
    Mr. Ose. On message, on task.
    Ms. Williams. On message, on task. A fingerprinted Federal 
TWICs that is quick, efficient, efficiently turned around, 
doesn't disrupt the flow of commerce, and that there should be 
greater thought put in this big port in California in the 
adequate funding to supply the Nation the goods they have that 
are cheap.
    Mr. Ose. Mr. Parker, any input?
    Mr. Parker. The issue that you raised on the security plan, 
obviously every terminal should have a security plan. Every 
ship that calls on a liner basis with containers should have a 
security plan. It covers the gate side, it covers the gangway 
side, but it also should cover the cargo side. Congressman 
Janklow mentioned the initial effect of if something were just 
put out in the yard, and somebody can get to it easily through 
non-traditional means rather than just a truck or a train, but 
right out the back door.
    We need to make sure that part of the security is also 
dealt with, and I think we are doing a good job in getting it 
there. It is not perfect, but it is much improved, and both the 
city and the county are helping us.
    Mr. Ose. Mr. Ochs.
    Mr. Ochs. A national standard for all ports, a national 
TWIC that is on the street this year, and continued recognition 
of the partnership between the tenant and the landlord. We are 
very fortunate here that both the port and the Coast Guard are 
doing more than their fair share. They have met us more than 
halfway on securing our terminal.
    Our concern is under the new regulations some of those 
lines are blurred, and some of the responsibility may be 
shifted to us as the civilian tenant.
    Mr. Ose. So you need greater clarity in those areas.
    Mr. Ochs. Yes, sir.
    Mr. Ose. All right. Mr. Marshall-Johns.
    Mr. Marshall-Johns. Yes. I think it is just focusing on the 
three areas again. The physical security of the premises that 
is defined as Ms. Williams put to be between the land side and 
the dock side. It is security of the personnel. And, it is 
also, last for the food industry, the security of the product, 
in particular. Reducing the susceptibility of some products we 
are discharging from vessels and the fumigation process, to the 
contamination of food, and effects on the people of America if 
such a contamination did occur. I think that is a real threat.
    Mr. Ose. Are the protocols operated in any of those areas 
in the port?
    Mr. Marshall-Johns. No, they are not. They are just 
requests. What we did was establish minimum protocols that 
would be supplied to the service providers in that flowchart 
that I showed that was on the screen earlier. It was basically 
looking at our whole chain of sequence, and all of those people 
that are involved in the process of working, handling, or 
delivering the product, or distributing the product. And, it is 
asking them to develop protocols to ensure that their product 
was kept as safe as possible throughout the chain.
    Mr. Ose. Well I have some questions I don't want to ask in 
public, and so I might ask you the specifics in the protocols. 
[Laughter.]
    Mr. Marshall-Johns. Thank you.
    Mr. Ose. Mr. Janklow.
    Mr. Janklow. Thank you, Mr. Chairman.
    Dr. Miretti, in your testimony, about three pages in, it 
says, ``Based on an employer's own statements we have concerns 
that the Pacific Maritime Association will use the information 
on cards for purposes that should be reviewed in collective 
bargaining.'' Specifically, what did you mean by that? What is 
that concern that none of them are more than you said?
    Dr. Miretti. Thank you. In terms of utilizing information 
as to----
    Mr. Janklow. I know they could use it, but what have they 
said that triggered that statement?
    Dr. Miretti. I think anyone who belongs to a union, who is 
involved in union activities, who might become involved in any 
kind of a collective bargaining type of activity, might be 
looked at as someone who could be looked at, I guess, by the 
employer as being favorable to the outcome of contract 
negotiations. And, if they could gather information on that 
particular individual.
    Mr. Janklow. I know they should do that, but it says, 
``Based on the employer's own statement.'' I understand that it 
could be done. But, I am wondering, is there a basis now, based 
on what somebody has said? If there is not, fine.
    Dr. Miretti. I think that is basically a general term, 
taken in a general sense, because I think those kinds of things 
certainly have happened over the years, and, if we go back a 
bit, certain kinds of information was used against individuals.
    Mr. Janklow. I understand that it can be done. I just 
wondered if that was a prospective statement or a historical 
statement?
    Dr. Miretti. I think that's a general term indicating that 
there certainly are possibilities it can happen and have 
happened in the past.
    Mr. Janklow. All of you seem to feel very strongly that the 
Coast Guard and the Customs Service, since September 11th, have 
done a pretty good job. Are there any of you who don't feel 
that way? Are there any of you who feel there ought to be an 
expanded role for, first of all, the Coast Guard, with respect 
to port security, that they don't now have available to them in 
the existing law?
    Is there any of you who would suggest, if you were in 
Congress or the executive branch, an expanded role for the 
Coast Guard? Is there anything they list in their timeline that 
they are required to do that you think ought to be taken from 
them?
    Dr. Miretti. If I can respond, I think more Federal funding 
for the Coast Guard certainly would be in order. They are doing 
a tremendous job, and they're doing this enormous task without 
the funds that they desperately need.
    Mr. Janklow. That is true for most of the government, we're 
$400 billion short----
    Dr. Miretti. That is true.
    Mr. Janklow. That's a problem. I understand that's 40 
percent of the total, and I just don't know how much more we 
should send to the kids of America for what would be--are there 
others of you who feel that there's more or less of a role the 
Coast Guard ought to be doing? What about the Customs Service? 
Mr. Marshall, what do you think?
    Mr. Marshall-Johns. I think, and I put in my oral 
presentation here, that the Customs Service and what they are 
doing; they are doing a tremendous job as is the Coast Guard. 
The one thing I see here is that, when you are looking at other 
Federal agencies, whether it is USDA, PPQ, or whether it is 
FDA, the only thing that I see is there is the inconsistency 
between the departments and how they do things.
    And perhaps, Customs could take the lead, whether it comes 
under homeland security, whether it comes under transport 
security, there needs to be some more consistency in how 
procedures and processes are implemented.
    Mr. Janklow. Did you say they are inconsistent?
    Mr. Marshall-Johns. They are not seemingly consistent.
    Mr. Janklow. Ms. Williams.
    Ms. Williams. Are you talking about Customs at the border, 
which is----
    Mr. Janklow. I am talking about ports. But, if it is more 
than that, go ahead. I am aware that they are probably used on 
the borders.
    Ms. Williams. I think there is so much congestion on the 
land side, the trucking and communities are dealing with 
inefficiencies that should be resolved. And, that lines at the 
border--4 hours to get into the country, take back an empty, 4 
hours to stay at the port.
    I spent last night with a Wilmington community group, and 
something should be done. Something should be put there, 
because the taxpayers are being burdened that are closest to 
the facilities and providing these services for the Nation.
    Mr. Janklow. So, Mr. Keller, you had something?
    Mr. Keller. I just wanted to say that we asked for certain 
enhancements for Customs after September 11th, and happily 
enough the appropriators saw their way to fully funding the ACE 
customers' computer, which it is pushing back the borders doing 
the work here. We think is absolutely necessary in determining 
which containers should be looked at and how frequently. But 
aside from that, no, we have had splendid relations here with 
our Federal partners.
    Mr. Janklow. Thank you, Mr. Chairman.
    Given the fact that within most of our lifetimes we haven't 
had to be concerned about this type of issue, at this 
magnitude, generally port security has been something related 
by theft or smuggling of things for profit as opposed to 
foreign attacks. Customs issues as opposed to national 
security.
    And, recognizing that this is an immense port area--good 
grief, the impact it has on the--not just this local area, but 
the Nation and the world's commerces almost, you know, 
unfathomable. I'm thinking what the impact would be if it was 
shut down. But, also understanding that a weapon of mass 
destruction that could wreak havoc on America, could just as 
easily come into a very small port as it could the Nation's 
largest port.
    And, I also recognize that it's one of the best ways to 
issue Congress to authorize the President to go to war against 
a country, if necessary. We don't fund it in advance. The 
President comes back with a supplemental to tell us what it 
costs and who will fund it. I don't understand why this, 
frankly, is any different. It is part of the war effort to 
protect America.
    What mechanism do any of you have to suggest that--I mean, 
you are citizens, you are also in the industry, but you are 
also citizens--to the executive branch that's promulgating the 
rules now? Let me ask you this, first of all, do you all feel 
there's sufficient authority within the executive branch to 
solve the problem, or do you think it will take more 
legislation? How many of you think it will take more 
legislation? If so, what would it be? Ms. Williams.
    Ms. Williams. Preemption legislation. Legislation that 
would preempt States from moving ahead in different directions. 
For example, the----
    Mr. Janklow. I understand.
    Ms. Williams [continuing]. Very important.
    Mr. Janklow. OK. And what else? Anybody else? Dr. Miretti.
    Dr. Miretti. Yes. I think if any kind of legislation were 
to occur, especially if it involves ports, that there has to be 
total involvement by the stakeholders to make sure that any 
kind of legislation really benefits the port itself.
    We have 200, at least 200 ports in this particular country 
that are commercial ports. And, they all operate a little bit 
differently, so we have to be careful as to what kind of a 
standardized law that we might pass. We have to be careful that 
each individual port has a certain amount of latitude as well.
    Mr. Janklow. With the concept that you're using, we can't 
keep cocaine and marijuana out of this country. I don't know 
what makes you think we can keep out small weapons of mass 
destruction. I just saw a shipment of a load of marijuana. 
[Laughter.]
    We can't keep people from coming into this country by the 
hundreds of thousands, if not the millions. And so, I'm not 
saying it to be derogatory but I just feel like the task you 
folks have is almost unbelievable. It is a feeling about every 
place. What can be done to make your job easier in making this 
country safe? That is really what it comes down to.
    Mr. Keller. I don't think there is any magic bullet, 
Governor. You know, it is a lot of hard work. We have our Port 
Police working with the Federal and the county and the local 
guys. And, frankly, a lot of it is putting up a credible 
defense. I mean, getting out there letting the bad guys and the 
good guys know that we are working hard to make this safe.
    It wouldn't hurt to put up TV cameras. It wouldn't hurt to 
see people see new fencing going up. It wouldn't hurt to see 
more uniformed guards at the gates. It wouldn't hurt to have 
people know that the equipment is overseas, as we talk about 
pushing back the borders, and that as containers come flying 
off ships from Indonesia and Pakistan and Manila and other 
places through Singapore, that they are going past radiation 
detectors. So, we take off that whole piece of it.
    I think basically what we are suggesting is, when you see 
that level--not of a perfect system but of a system that 
addresses a variety of threats--that it makes people turn their 
eyes elsewhere. If, in fact, we are going to have a continuing 
threat against this country, I think what we want to let the 
bad guys know is this isn't the place to do it.
    You do it here, and you are going to get caught, or your 
efforts are going to be frustrated. Or, if it costs you 
hundreds of thousands of dollars to put together the effort, it 
is not going to work here, because we are going to blunt it. 
That is the best we can do. This is a huge business. We are 
part of a global network now. We couldn't shut that down if we 
wanted to. That's such as our interdependence. But I think best 
measures, best practices, cost effective measures, are the best 
we can do.
    Mr. Parker. The issue or issues is not just money. There 
are other efforts. There are things--let us put the people in 
places where they can do the most good. If there is technology 
out there, let us not be blind to the fact that may cost a 
little bit of money, and spend it there. We can build a better, 
a bigger mousetrap because we have more money than anybody. Let 
us not do that. I don't think anyone is asking for that.
    What we are asking for is a combination of that, and I 
think you have heard the common theme from my friend Dr. 
Miretti all the way down to over here, we think that there is a 
Federal Government role in things that make the most sense.
    I don't want the PMA having information on people. I think 
that is a Federal function. I think that is something. I don't 
know how much that is going to cost, but I will come back with 
a supplemental on it and let you know.
    Mr. Janklow. One last question. Thank you, Mr. Chairman, 
for the expanded time. I appreciate it.
    Have each of your industries or all you been solicited or 
involved in the regulations that are being written at the 
national level? Has there been any request to have you submit 
your opinions in terms of what ought to be done, and how it 
ought to be done, when it ought to be done, and where it ought 
to be done? Have any of you, I mean, as you felt to write for 
the issue of regulations?
    Dr. Miretti. We do have legislative representatives back in 
Washington who have been involved. However, we firmly believe 
that their involvement should be much greater than it is at the 
present time. Although we solicit the support of legislators, 
we also hope that they would contact us at the appropriate time 
and say, ``Look, we would like to hear what you folks have to 
say. After all, you are the folks who work in the trenches, who 
work on the docks, and we would appreciate your input or 
submissions.''
    Mr. Janklow. We have been?
    Ms. Williams. No, we haven't.
    Mr. Janklow. Thank you, Mr. Chair.
    Mr. Ose. I want to followup on something. We talked about a 
lot of things that need to be done. Mr. Keller's list is a 
little bit over $15 million. I just want to make sure I have 
this right. The information I have is that the surplus in 
Customs revenue over expense is $15.6 billion nationally in 
2001.
    Mr. Keller. That is income. That is income. It is the gross 
income.
    Mr. Ose. All right. Forty percent of that would be $6.2 
billion. I don't have my calculator, but I presume it would be 
42. But the share of these facilities relative to that overall 
number is over $6 billion. Over $15 million that we are talking 
about in terms of the list you put forward, Mr. Keller, 
constitutes one-quarter of 1 percent of the revenue generated 
from these facilities. Is my math on target here?
    Mr. Keller. You haven't lost a thing, Mr. Chairman.
    Mr. Ose. OK. The question then becomes, what's the 
financing mechanism resource used to fund these port security 
upgrades, it seems to me that there is a whole lot of logic 
between tying the source of the revenue to the excess revenue 
over cost that is generated here with the facility that would 
otherwise benefit. Am I missing something here? Mr. Keller.
    Mr. Keller. Not at all. Not at all, Mr. Chairman. We think 
sources and uses is the perfect answer to this. I know that the 
Customs revenues go to the general fund with about a 30 percent 
exception that goes to agriculture and food programs, which is 
probably appropriate given the fact that much of that material 
is ultimately exported.
    But, this is a growth industry, and we have submitted in 
our testimony the growth in Customs revenues from year to year, 
and it grows at almost $1 billion a year in the last 5 or 6 
years. We are talking about possibly taking a single year's 
increment, not for the port of Los Angeles, but for all ports 
in the United States, as a set aside to allow us to have 
security material that we need in the ports.
    Mr. Ose. Mr. Parker.
    Mr. Parker. I think that is a key point. We don't want what 
is happening now just give us the growth. Now, just focus in on 
what happened between 2003 and 2004 for your fiscal budget and 
say that is going to be set aside for security.
    Mr. Ose. I mean, I want to zero in particularly on the 
steamship issue. I am not doing it pejoratively. I just need to 
make sure I understand this. If someone gets on a plane, there 
are some fees that get tacked on to their ticket through 
transportation that is provided. And then, a semi-fee for cargo 
that's moved by air.
    Ultimately, if I were one of the appropriators, I'd say, 
``Look, we have to tie at least a portion of these funds going 
back to the place where they are generated from.'' They are 
going to say, ``How much of it is cargo, and how much of it is 
passenger?'' That will lead to discussion as to whether or not 
steamship passengers can pay a fee similar to what airline 
passengers pay. What arguments can we logically use to defeat 
the assessment or imposition of a new fee on customers and 
steamships?
    Mr. Parker. Well, I do think that we are looking at values 
of goods as they increase in the marketplace. That is part of 
this increase in the billion dollars. It is where the fees are 
coming from. You know, every shoe that comes in or every 
television set that comes in has a fee attached to it.
    Mr. Ose. Right.
    Mr. Parker. Just in ad valorem value they are growing over 
time. And obviously, when a passenger comes in, we don't 
customize the bill. You know, he can come in for free, but he 
pays that security fee. So they found a mechanism of a head 
count, and that is exactly what happens in a passenger 
terminal.
    Mr. Ose. What you are telling me is that your passengers, 
your human passengers, are already paying a fee?
    Mr. Parker. Right.
    Mr. Ose. That is my question.
    Mr. Parker. I think that is right, because they are using 
the facility. I think the shippers of the cargo are paying it 
by paying duties and paying certain fees to each and every 
port. The operating port receives certain fees as well, and 
some of that goes into their general fund, and some of that 
goes into their general security measures.
    Now, we are taking this quantum leap to get up to what 
needs to be done to bring us up to your worst-case scenario, 
and that is going to take something more than just the norm.
    Mr. Ose. Mr. Ochs, in terms of risks positional risks, what 
feedback would you provide?
    Mr. Ochs. Mr. Chairman, I would have a two-part answer. In 
regard to, is there any additional legislation needed, the 
answer would be no. I think the goals and the missions of the 
Coast Guard and the Customs Service are very clear. I think 
what their challenge is, that they are mandated to do many 
things that they are not funded for.
    So I think from the Maersk standpoint, the cargo that we 
ship, our customers are already paying a fair share of this $16 
billion that you talk about. I think we would like to see the 
money that is currently going into the general fund end 
specifically at this problem of port security as we attempt to 
defend our Nation.
    Mr. Ose. Mr. Marshall-Johns, what is your experience around 
the world in terms of how such improvements are funded?
    Mr. Marshall-Johns. Generally, it is a cost that is taken 
from the fund, that Customs regularly generates through duties, 
etc., from my experience is what is used to generate funding.
    Mr. Ose. So they are tied together elsewhere? Is it 
practiced anywhere else but here?
    Mr. Marshall-Johns. To some extent. It is the same all over 
the world. They are looking at what they can do as far as 
security in their ports, their facilities, and how we can be 
sure--it is a similar situation to where we are now.
    Mr. Ose. Ms. Williams, you talk about the 710 the capacity 
of Mr. Rohrabacher's observation on 24-hour cycles used in 
examination. Could the money be used to address perhaps the 
capacity issues in 710?
    Ms. Williams. I think it is important if the ports, 
especially in California, are going to service the entire 
United States, then I think the Federal Government is 
responsible for providing us highways that can do the job. If 
you look at 710, it is just awful. I have done it today----
    Mr. Ose. So we've been hearing.
    Ms. Williams. Yes. [Laughter.]
    Mr. Ose. Dr. Miretti.
    Dr. Miretti. On the question of funding port anti-terrorist 
programs and infrastructure improvements outside of the port, 
there has been a lot of talk about a container tax. We 
certainly want to look at that very carefully, we don't want to 
tax our ports out of business. I have heard talk about a 
gasoline tax.
    Can a trucker afford any more costs attached to his 
equipment? He would basically go out of business. He has a very 
small profit margin that he works on. User fees are high. Maybe 
this is the question to ask: why can't the increase go to the 
allocation of funds for infrastructure improvement for 
terrorist activity programs and so on?
    As I understand it, for road use we need to allocate even 
more money and funds for infrastructure improvement for 
terrorist activity preparedness?
    As I understand it, for variable use or for low spending, I 
think the allocation from the Federal Government has dropped 
from 20 percent down to about 2 percent. So I would like to 
take a look at how we could allocate, or have the Federal 
Government allocate, even more money for the things we need 
here in the port.
    Mr. Ose. Chair recognizes Congressman Janklow for 5 
minutes.
    Mr. Janklow. You know, there is another side to the user 
fee issue. It's the obvious one. Everyone who collects revenues 
for the government thinks that it ought to be spent on their 
particular issues. The liquor tax people think it ought to be 
spent on alcoholism treatment, and the lottery people think it 
ought to be spent on lottery advertising and compulsive 
gambling problems.
    I mean, it doesn't work when everybody collects their piece 
of the pie and then eats their piece of the pie. I think we 
ought to understand that.
    I think we also ought to understand these are unusual 
times. We are dealing with the national defense of this 
country. During the Second World War, if I recall, they passed 
things like a luxury tax on jewelry, which lasted until the 
late 1960's. They passed various taxes to assist in financing 
the war.
    Absent that, they fund it out of the National Treasury. 
This is war. I mean, we keep forgetting the only reason we are 
even here today, all of us, is because we are trying to figure 
out how to better protect the people of the United States 
before a number of catastrophic things happens to us in this 
war that people have declared on us.
    I understand you have to labor in this port, except for the 
folks in southern California, maybe the trucking group. Has 
anyone estimated what it would cost to come up with the defense 
of the ports in this country? Is there a number that anyone has 
used, and I realize nothing is perfect, as you say. Mr. Keller, 
you said it very well. We should just keep doing things and 
hoping that each one incrementally is more effective.
    Is there a number that it is going to take from someone's 
pockets, to fund all of this? Does anybody know the number? 
Have any of the industries pulled it together?
    Mr. Keller. Congressman, I am going to guess that maybe in 
some of the first rounds of grant requests somebody might at 
TSA or MARAD or someone else might have collected the numbers. 
Our first guess when MARAD asked last year was $36 million here 
to begin. We figured for something approaching a thorough 
system, just for the port of Los Angeles, it was probably $100 
million. I mean, this is with the bells and whistles and all of 
the things that would say, ``Hey, we have got this wired.''
    Mr. Janklow. Do you think if you had $100 million you would 
be wired? I ask that because I realize you have hundreds of 
ports in this country. But to take care of 42 percent of them, 
of all the traffic for $100 million, may be a cheap investment. 
I mean, we can't do them all at once.
    Mr. Keller. We are at a little over half of that 42 
percent. Long Beach would require probably about the same 
amount of money. So, now we are at $200 million. We are getting 
into some stratospheric numbers here, and there is a lot of 
American ports. They are all going to need protection in some 
fashion.
    I don't think we are looking for perfect solutions. At the 
same time, let me say this. We have to be looking, if I can 
argue with you for a moment, we have to be looking for the 
perfect solution, because all the security in the world doesn't 
make any difference. If I'm in the airliner that hits the 
building, it only takes one incident. It's no different from 
the gentleman sitting there in the policeman's uniform, the 
chief. It only takes one person to rob the store from all the 
citizens.
    The way I look at it, you might not find it, but we have to 
be looking for the perfect solution. We shouldn't kid 
ourselves. Our enemies truly understand where we are 
vulnerable. They don't say that we want to talk about this. 
We're not the only ones that are going to talk about it. They 
talk about it every day. They aren't going to hit us where it's 
obvious; they're going to hit us where it isn't obvious.
    And again, that is the best that we can do. I mean, we can 
go on with bells and whistles and some of these other things, 
but realistically when we say $15 million, and you see our list 
of things here, we think this is a big takedown. Now, 
maintaining it over the longer term, that is where the numbers 
come from. And, adding on and replacing, that is where the 
numbers come from.
    Mr. Janklow. Good point. Well, let me just go back to your 
point about the liquor tax and some of these other taxes and 
the jewelry tax, and maybe, arguably, even airline taxes. Those 
to some point are choices that people make, whether you are 
going to drink or whether you are going to buy a diamond 
bracelet, or whether you're going to fly unless perhaps on 
business.
    When we are talking about the goods now that we are moving, 
both the stuff that goes for retail and further manufacture, we 
are talking about America's goods. I understand it is tempting 
to think, for instance, that the exporter in China or Singapore 
is going to pay that bill, but somehow that is going to end up 
on the total cost of goods. It is going to be passed along.
    Our economy over the last 3 or 4 years hasn't been so 
strong. This has been a strong sector, and we think, in our own 
small way, that we have contributed, through inexpensive 
transportation and the like, to keeping inflation low and 
keeping this vigorous.
    Please understand, personally I agree with the comments 
that the chairman made when he was asking the questions. It is 
just given that the fact that our budget is $440 billion, 
depending on whom you listen to, it's $400-$500 billion out of 
whack, one. And, two, the excess money goes into the Treasury. 
So, to take a billion out of there is just to add a billion to 
the shortfall, or take a billion off the income. It still has 
the identical effect.
    There may be no shortage of people that would think that 
what you do is, given the fact just that the trade deficit 
alone this year will be about $300 billion for this country. 
The total amount of goods that are imported into this country 
is just--the deficit of that is $300 billion, and it wouldn't 
be cheap to put another tax on to go ahead and pay for it all. 
I am trying to avoid heading in that direction in my comments. 
That is all.
    Thank you, sir.
    Thank you, Mr. Chairman.
    Mr. Ose. We do have a little bit of information on the cost 
in terms of the port security plans. The Department of 
Transportation published a notice dated December 30, 2002, on 
behalf of the Coast Guard indicating that the plans alone--the 
present value of creating the plans--plans, not the actual 
improvements but the plans, the present value total through 
2012, we estimate at $477 million.
    I don't have any additional information beyond that. That 
is just the plans themselves, the submittals, if you will.
    Let me take a second here.
    I want to ask a question in terms of how we go about 
implementing these port security standards, if you will, at the 
forward point of contact, if you will, the foreign port. One of 
the ways it seems to me is either by negotiating on a very 
specific basis. What would be the feedback, or what would your 
feedback be individually in terms of suggesting to the 
administration that as they go into these international trade 
agreements that one of the pieces of those trade agreements is 
a resolution of how we are going to implement, if you will, a 
forward security point? Would that make sense? Mr. Marshall-
Johns, do you have any feedback on that?
    Mr. Marshall-Johns. Yes, I believe it would make sense. 
Also, you have to look at going around to those international 
trade agreements already in place and how would you then 
develop the needs or the minimum requirements on that side of 
it. So, I think it is part of, when you look at the whole 
picture, it is part of an agreement. This is one of the 
requirements for importing into the United States.
    Mr. Ose. Mr. Ochs.
    Mr. Ochs. I would concur, Mr. Chairman. It would seem that 
again, a staying requirement to work with whatever the process 
that our Customs Service wants to do overseas should be a point 
of entry in order to participate with trade.
    As the government with a $3 billion trade deficit to the 
folks overseas to sustain their own economic well-being, they 
are going to be very anxious to sustain the current 
relationships that they have with us. In effect, it takes the 
port security plans in the aggregate, develop the standards 
that we want to have implemented, that would otherwise be able 
to, if you will, project to the forward point, and put it as an 
integral whole. So we have a consistent message and 
implementation, if you will.
    Mr. Ose. Yes, sir. Then set that as the U.S. standard. If 
you want to trade with the United States, you will comply with 
this standard.
    Mr. Keller, would that present complications relative to 
the operation of the port?
    Mr. Keller. I don't really think so, Mr. Chairman. I think 
this is a matter of getting people's attention when it's best 
had. Self-interest after all is important, and the United 
States is probably the world's largest consumer of goods from 
other countries. I think that would be the perfect time to make 
those agreements.
    Mr. Ose. How do you deal with the need for flexibility as 
you go into the future? Because, I mean, the means of defending 
against such attack necessarily evolve as the means of 
delivering such an attack evolve. Do you have any feedback as 
to how you would provide the flexibility under an international 
agreement?
    Mr. Keller. That is difficult to say. Once the doors were 
opened, though, in Hong Kong and in Singapore, we found a great 
deal of flexibility in the ability to have our consultants work 
with their authorities and the like to come up with 
technologies and procedures, on-the-ground procedures that 
would work.
    Those will have to be worked out with the U.S. Customs 
officers who are stationed there, but one of the comments that 
came out of one of the ports that we were working with was, 
``My God, maybe now we ought to be pushing back the borders to 
the people who send us goods for transshipment to the United 
States.'' I think awareness builds as well.
    Mr. Ose. I want to go back to a couple of things we have 
talked about, and I have read about in the last couple of days. 
First of all, I am unclear on the issue of the unsealed 
container. That is, the empty container if you will, the empty 
container. I don't quite grasp, Dr. Miretti, your point about 
needing to inspect an outgoing empty container. Can you explain 
that?
    Dr. Miretti. Yes. Let us start first with a container that 
might be coming into a particular facility. Often times, and in 
most cases, that container is not opened. It is not inspected. 
It doesn't have a seal on it. There could be something in 
there. It is then parked into the yard, and it's left there 
until it is loaded on the ship. When that empty container comes 
off the ship the same thing happens. It is just waiting until 
someone comes to pick it up. It has not been opened.
    In the ground report, they indicate that the containers 
that would be coming into a particular facility should be 
opened and should be inspected. Any empty container that comes 
off the ship should be opened and looked at then stacked in the 
yard. They should be stacked door-to-door. That is pretty 
stringent stuff. In a sense, we are not asking for that, but 
that is in the ground report.
    So what they are saying is that an empty container is a 
good hiding place.
    Mr. Ose. When I see the vessels dockside, and I look at 
large stacks of containers, generally speaking, what percentage 
of those containers on the vessels, dockside, unloaded are 
empty?
    Dr. Miretti. Many of the vessels, as they come into port, 
discharging containers, are full. It is when a vessel is going 
out.
    Mr. Ose. Taking empty containers back.
    Dr. Miretti. Taking a lot of empties back.
    Mr. Ose. OK.
    Dr. Miretti. So a larger percentage of empties are going 
out on the outbound ships. A large percentage of the containers 
that are coming in are basically fully loaded containers.
    Mr. Ose. So the empty containers will be basically 
warehoused until a vessel comes in, off loads their existing 
containers, then the cranes would load the empty containers 
back on that ship, and then leave?
    Dr. Miretti. That is correct. They would be staged out in 
the yard until the vessel comes in, and then from that staging 
point on the dock, it would be brought up to the ship.
    Mr. Ose. So, if I understand your point, it is when those 
empty containers come back into the dock itself, that is the 
concern, that something more being placed in there at that 
point, and then they'd get dockside, and then we have a problem 
because we haven't inspected it.
    Dr. Miretti. Well, it could very well be that if a 
container is sitting there in the yard, and it is empty----
    Mr. Ose. Let us say somebody walks up and puts something in 
it----
    Dr. Miretti. Yes, somebody could put something in it, and 
if it goes up to Los Angeles to get loaded, it might explode in 
Los Angeles.
    Mr. Ose. From an operational standpoint, the suggestion 
that Dr. Miretti said, the point about door to door. How 
difficult is that to implement?
    Mr. Ochs. It is tough. It would certainly be an added 
chore, and depending on the type of container, it may need to 
be physically spun around.
    Mr. Ose. It would seem from a logistics standpoint the 
containers are stacked on the ships in a particular area--you 
know, in a particular mode, so it structurally can be loaded up 
high. And then, the cranes themselves off load them in an 
appropriate manner so they get loaded on the chassis 
appropriately.
    Dr. Miretti. Right. When you are loading on the ship, it is 
actually a fairly complicated matrix on the actual weight, the 
weight of that stack of containers in the ship, and then, when 
the ship arrives, the final destination of that box. All of the 
boxes in a certain stack are probably going to the same city.
    Mr. Ose. The same cranes that unload the ships, are they 
the same cranes that move the empty containers into the 
warehouse area for, if you will, sending them back out?
    Dr. Miretti. No. The cranes that load and off load the ship 
are fixed pierside, and then we have smaller mobile cranes 
inside the terminal that stack them up for short-term storage.
    Mr. Ose. So the point that those empty containers are in-
loaded on the ship for departure, you've got a piece of 
equipment that brings the container dockside. The crane lifts 
that box up, puts it on the ship, and picks up another one, and 
so on and so forth.
    Dr. Miretti. Yes, sir.
    Mr. Ose. And, that has to occur in a particular manner, in 
terms of how the container itself goes on the ship.
    Dr. Miretti. Right. There is a very set and logical order 
to the way they are loaded and off loaded.
    I think the more general topic is we are making the 
assumption that there is a threat to our terminal from inside 
the United States and the way that a weapon would be brought 
into our terminal is in an empty container. I think 
theoretically that is possible. As we look at the current 
threats and the risks to our terminals and our ports, I think 
most of those threats and risks are deemed from coming from 
overseas.
    And, therefore, we need to focus on that threat first more 
than we need to focus on the potential threat of someone 
already here in America who has a weapon and is going to choose 
to use that weapon at one of the terminals.
    Mr. Ose. Dr. Miretti, thank you. I was unclear on what you 
were trying to get at. I appreciate your clarification.
    Dr. Miretti. It's my pleasure.
    Mr. Ose. The other issue that I have heard is that we 
passed in the act standards or direction to the Homeland 
Security Department to develop performance standards for these 
containers, including the types and standards of seals, and 
locks. And, implicit in that was a concern of ours about the 
structural integrity of the container itself.
    I heard some people talking lately that we now need to add 
that into the law that we need to have bomb-proof or blast-
proof containers, and the like. As far as I am concerned, that 
is already in the law. What should the container performance 
standards include? I mean, obviously, we have structural 
necessity, because you stack them on top of each other. Then, 
you have to seal them satisfactorily, so that when they get 
here you know the seals haven't been broken and it is, if you 
will, secure. What should those performance standards be? Mr. 
Keller.
    Mr. Keller. Well, you have already addressed the idea of 
the strength of the container needed to do its primary task. In 
terms of securing the container itself, frankly, I think the 
idea that we would build a blast-proof container that could 
contain a small thermonuclear device is----
    Mr. Ose. No, that is not going to happen.
    Mr. Keller [continuing]. Probably not going to happen. 
Right. The hinges have always been an issue, tampering with the 
hinges on the container, which prevent the doors from being 
lifted off, with or without a seal on them, has always been an 
issue. Any structure of the type of a container or a trailer, I 
mean, could be breached is similar to doing it an obvious way--
cut a hole in the side, rip up one of the aluminum sheets. But, 
that in itself is probably not what somebody would do if they 
were wishing to smuggle.
    So, again, the means of entry and egress in the container, 
focus on the doors. So its hinges, its hardware, it will remain 
secure with a lock or seal in place in such a way that you will 
know that the lock or seal, in fact, has been locked for the 
duration of its voyage. That there was not some other point of 
entry. And, typically speaking, that is a concentration on the 
doors and the hardware.
    Mr. Ose. Mr. Marshall-Johns, you guys bring a lot of fresh 
vegetables, and the like, into the country. It seems to me from 
a tort exposure standpoint, you have done quite a bit of work 
to ensure the sanctity, if you will, of the cargo. Is it 
possible for us to come up with a system, as Mr. Keller says, 
for egress and ingress into these containers, so that it is 
absolutely 100 percent secure?
    Mr. Marshall-Johns. I think it is, but at the same time 
you've also got to look at the cost of that system. I agree 
entirely with Mr. Keller's comments about the one source of 
entry into the container is the doors, the hinges, and the 
locking mechanisms. Whether the existing seal units are the 
right way to go, whether it's an electronic seal unit, or 
whether there's some other control system in place, that was to 
be decided, as far as looking at the cost of it.
    Mr. Ose. Mr. Ochs, do you agree with this? Are you in 
agreement with Mr. Marshall-Johns?
    Mr. Ochs. Yes, sir. Maersk owns 1 million of these boxes. 
They are rigid shipping boxes. They have a lifespan of about 7 
years. When you start to look at a Kevlar box or extra locks on 
the box, at some point you are going to start to build bank 
vaults. At some point, the value of the box may exceed the 
value of the cargo.
    The thicker the box gets, the harder it is to use any type 
of technology to x-ray or sniff or scan what might be inside of 
that box.
    So, I think, from our standpoint, under the general concept 
of Operation Safe Commerce, which is to maintain the integrity 
of the container from the time it starts overseas to the time 
it is opened, somewhere once it arrives here, is a standard, 
smart, high-security seal that may have the capability to 
transmit some type of signal that can be tracked through the 
entire transit of that box, both when it is loaded overseas, on 
the ship, on the rail, or on the local truck, until it finally 
arrives at the warehouse or the store.
    So, yes, we think that the solution is a smarter and better 
seal and not necessarily a bank vault-type box.
    Mr. Ose. All right. Congressman Janklow for 5 minutes.
    Mr. Janklow. Thank you very much.
    If I could, Ms. Williams, let me ask you a question. In 
your testimony under No. 11, you say, ``Government, with the 
assistance of industry, must make every effort to effectively 
build sufficient security infrastructure without being so 
costly or cumbersome as to destroy the economy it seeks to 
protect,'' which goes to the heart of what the chairman was 
just asking you and what you were responding about, Mr. Ochs, 
and all of you have.
    ``Since September 11th, thousands of government agencies 
and private businesses have been waiting for Congress and the 
agencies it controls to provide leadership to specified local 
architecture and protocols necessary to further investment.''
    Now, you make that statement within the framework that 
talks about mandated versus performance-based systems. I mean, 
it is a statement that could almost be applied to all of this. 
With respect to mandated versus performance-based systems, is 
there any indication as to which direction the administration 
is headed with respect to that very issue of mandated versus 
performance-based system?
    Ms. Williams. No, there isn't. I think it is important to 
note these were part of the comments, and this particular 
section was written by ATA. They have been working on the 
Federal level, and we have been working on the State level. 
California has a pattern of moving ahead quickly. There is a 
bill this year specifically introduced by Senator Feinstein, 
Assembly Chair Detra, that requires trucks to use these GIS 
devices.
    It is really expensive. The manufacturer is promoting the 
bill. So, they have put over the first week, because it started 
to slow down. But, these things keep happening in California. 
In our legislature, people are moving ahead, people want to 
pass this bill, get their name in the paper, and a picture, 
and----
    Mr. Janklow. Which creates, as you know, a tremendous 
problem, because then they amended something out here that you 
have implemented, they had costs, to find out the national 
standards going to be something different. So, that is what you 
are getting at?
    Ms. Williams. It's the second bill that could possibly pass 
since this has happened, and there hasn't been one assembly.
    Mr. Janklow. Is this something that has really been very 
clearly expressed to the administration?
    Ms. Williams. No, it hasn't. We here in California, with 
our limited resources, try and carry these bills ourselves. 
But, if you could preempt it, that would help us a great deal, 
of course. There needs to be some action; there needs to be a 
public dialog. I don't understand the congressional manner. 
When you say ``intramurals,'' to me that sounds like going and 
getting public input and affecting taxes. I have a problem with 
that.
    It doesn't seem like you have the right people at the table 
to make the decisions, and I appreciate you disagreeing like 
this. There's people with their pencils in the back of the 
room, and they are going to stay until the end. But it is 
important that everybody is on the same page and we don't have 
manufacturers lobbying for devices that get adopted.
    Mr. Janklow. If I move to you, Mr. Parker, for a moment. In 
your testimony you say, ``State and local governments are also 
imposing more military conditions of port operations. Some 
events may actually divert resources from port security.'' You 
don't have to come up with it right now, but can you give me a 
list of those kinds of specific things that you could submit in 
your supplemental testimony? Because that would be of a lot of 
assistance.
    Mr. Parker. I would be happy to. But one of them would be 
actually this bill, and I think in terms of what we are looking 
at, the CTA and the steamship association, at times have been 
at different sides of it. But in this particular case, we both 
I think agree that perhaps this bill is ill-timed at best.
    [Note.--No information provided.]
    Mr. Janklow. When you say ``this bill,'' are you 
referencing the bill that----
    Mr. Parker. 575. Yes.
    Mr. Janklow. OK. And then, you also say a proposed $1 
billion bond issue would secure $200 million for port security 
for southern California. I'm sorry I haven't given this to you 
earlier, but specifically, is this a State bonding proposal? Is 
that what it is?
    Mr. Parker. Yes, it is. But, it would not be funded until 
the State solves its own set of funding----
    Mr. Janklow. Its own problems?
    Mr. Parker [continuing]. Problems, yes.
    Mr. Janklow. OK.
    Mr. Parker. So, it could be a significant period of time.
    Mr. Janklow. Would this be an authorization for a bonding, 
but not the authorization to issue the bonds?
    Mr. Parker. Yes, sir.
    Mr. Janklow. OK. Mr. Ochs, if I could go to for a second, 
as I saw in your testimony. In a couple of spots you say, 
again, I can't remember the text, the pending regulations imply 
a mandate to randomly inspect and search individuals and 
vehicles into waterfront facilities. And then, you talk about 
contracting law enforcement officers or watchmen.
    Is this or isn't this in the regs? I don't understand what 
that ``simply'' means. I understand the word, obviously, but is 
there something that you have asked them, is it in or out of 
the regs? I will jump to the next one. I will hit them all at 
one time.
    Then, in the next paragraph, ``The pending regulations 
suggest that each waterfront facility deploy their own security 
boats.'' Then, you talk about how to police them out in the 
waters. Then, you say the regulations discuss the use of divers 
to inspect pier structures. Then you say, in summary, ``The 
regulations imply each terminal hire a trained and fully 
equipped posse to search personnel vehicles, crew boats, 
patrolling offshore from our docks, in search for underwater 
ordnance.'' That is incredible.
    You have contacted the administration about that, haven't 
you? What is their response? Where do you think this is going 
to be required in the regs?
    Mr. Ochs. It is our current interpretation of the language 
in those regs that requirement could be mandated on us. The 
language is written fairly wishy-washy, but you can interpret 
it that all of those functions could be transferred to each 
terminal.
    Mr. Janklow. Do you agree with that, Mr. Keller?
    Mr. Keller. I haven't studied that.
    Mr. Janklow. I am not actually arguing with you, but I am 
just saying this is new to me, this is a big deal.
    Mr. Keller. I haven't studied the reg or read it the same 
way that John has, Congressman.
    Mr. Janklow. What about any of the rest of you? Yes, ma'am.
    Ms. Williams. This goes to the point of when we bring the 
chassis in the terminal, who's in there, what's in the empty 
chassis, and begs the point, why are you letting 4,000 truckers 
with empty containers in there at all?
    Mr. Janklow. What you are saying is, Mr. Ochs, at this 
point, you are not able to tell whether or not it is going to 
be your company's job, or the terminal's job, the port of Los 
Angeles or Long Beach or Miami, their job to inspect all 
vehicle passenger spaces and trucks, to deploy security boats, 
to be in the underwater explosive detection business, to patrol 
offshore, etc.
    Mr. Ochs. The short answer is yes. We have 13 terminals in 
the United States. Most of our terminals are on smaller ports 
where the local port authority and/or the Coast Guard doesn't 
have the same resources that we have here where, for example, 
the local port does, in fact, have a dive team.
    So, at those ports where the government resources may not 
be available, if it is a requirement under these interim final 
rules that, for example, a pier be searched for underwater 
bombs, then does that put the burden on us as the terminal to 
make sure that search is done, if there is no local group 
working under the protection of the government sovereign 
immunity to actually conduct that function?
    Mr. Janklow. I think it was your testimony is it not, it 
was Mr. Parker's, that expresses a concern that in the event 
you do have these responsibilities, you are going to be self-
insured.
    Mr. Ochs. We are going to be self-insured, because as the 
tenant of that leased property, we probably will not be able to 
obtain liability insurance.
    Mr. Janklow. Mr. Marshall-Johns, if I could go to you for 
just a second, you say Oppenheimer contends it is the 
responsibility of the country of export to establish a system 
that satisfies U.S. requirements. What you are saying there, 
then, I assume is that, if we set the standards in this 
country, people exporting to the United States have to meet 
them?
    Mr. Marshall-Johns. Yes, exactly. That is what I discussed 
in Congressman Ose's request before, about extending the 
borders. Again, setting the minimum standards and then allowing 
the party responsible to adhere to them.
    Mr. Janklow. At their expense?
    Mr. Marshall-Johns. Yes, at their expense.
    Mr. Janklow. In your written testimony you talk about the 
24-Hour Rule, and how Oppenheimer would prefer if it was 
modified to the point where it would be 24 hours post-departure 
that would be allowed to be reported, correct?
    Mr. Marshall-Johns. Correct.
    Mr. Janklow. What do you think, Mr. Ochs, Mr. Parker, all 
of the rest of you?
    Mr. Parker. Well, there are an awful lot of companies that 
are really struggling with this rule. Just from the standpoint 
of they have multiple containers, they have hot cargo that is 
arriving at the----
    Mr. Janklow. Do you think post 24 hours would be OK?
    Mr. Parker. I think post would be a great improvement.
    Mr. Janklow. Mr. Ochs.
    Mr. Ochs. Speaking very selfishly, just for Maersk, once 
the box is on our ship, the 24-Hour Rule is useless, because 
the ship has sailed. So, we would prefer that the inspection is 
done on the dock overseas for the safety of the ship.
    Mr. Janklow. OK.
    Mr. Ochs. But for the safety of our country, the post-24 
Hour rule would be an improvement.
    Mr. Janklow. I was being a little facetious, but I just 
want to make sure I understand what you are saying.
    Mr. Ochs. Yes, sir.
    Mr. Janklow. I think from a practical standpoint, if the 
ship has 4,000 boxes on it, and we do the electronic inventory 
of the manifest after it has sailed, and there is some type of 
red flag that pops up, are we going to turn that ship around 
because of the one box?
    Mr. Ochs. Sure.
    Mr. Janklow. Dr. Miretti, do you have a problem with post-
24-hour?
    Dr. Miretti. Yes, I think so. For worker security, I think 
we would certainly like the 24-Hour Rule to apply.
    Mr. Janklow. What about you, Mr. Keller?
    Mr. Keller. I think you have already heard our comments 
about CSI and pushing back the borders. I don't think there is 
any way to do that without the 24-Hour Rule being in place.
    Mr. Janklow. It has to be in place.
    Mr. Keller. I think it has to be in place.
    Mr. Janklow. Mr. Marshall-Johns, in your testimony you talk 
about the identification card and the issue of the 
identification card, and you previously discussed, we all 
basically agree. On the way out here yesterday, I read it and 
left it in the airplane, I read an article in the U.S. News and 
World Report where on the new Florida statutes that have been 
imposed on the trucking industry.
    Four of the state employees just in the last week have been 
indicted for selling the cards to people that weren't eligible 
to get them. So that problem could happen with any system. But, 
that's a system that would probably make a lot more sense under 
these circumstances with Federal preemption.
    Mr. Chairman, that is all the questions I have. Thank you 
very much for giving me this extra time.
    Mr. Ose. You are welcome.
    I want to go back to something Mr. Ochs and I were 
discussing on these containers and making them bomb-proof. Now, 
I want to try and understand your comment. If I understand your 
comment correctly, it was that the type of bomb that we need to 
be worried about would not be contained under any circumstances 
by a container whose structural integrity is such as to contain 
the explosive power of that bomb. In other words, if it's a 
thermonuclear bomb, it doesn't matter.
    Mr. Ochs. It doesn't matter.
    Mr. Ose. You also have problems in terms of screening 
containers, as we get a heavier and heavier and heavier 
container. In other words, our technology is diminished. Our 
technology, our means of detection of something within that 
container, as that container gets heavier and heavier 
structurally, is our ability to detect something we want to 
prevent from happening, is that diminished?
    Mr. Ochs. Yes. I think with the current technology that is 
on the street with the MRU and the back-scatter type x-rays, 
and the types of gadgets that are out there that can detect 
radioactivity, the thicker the box is, the less chance that you 
have to detect something that's bad inside.
    Mr. Ose. So, if the Federal Government mandated a 
structural integrity requirement, such as to contain an 
explosive force of X, we may very well undermine the 
effectiveness of our CSI systems, and the like, to detect what 
we are trying to keep out of the country in the first place?
    Mr. Ochs. Absolutely. In fact, it has been suggested that, 
if anything, the boxes should be made out of plexiglass, so you 
can actually see what is inside. So this would go against a 
bank vault or Kevlar box.
    Mr. Ose. Mr. Marshall-Johns, do you agree with that 
analysis?
    Mr. Marshall-Johns. Yes, I do. I think this is pretty 
straightforward, that as you build strength, the integral 
structure of a container, your ability to scan or view anything 
inside is going to be greatly diminished.
    Mr. Ose. So your advice to elected officials, who might 
otherwise put that forward, would be very careful?
    Mr. Marshall-Johns. Yes, I think so. I think it certainly 
adds some huge costs into the container industry.
    Mr. Ose. Dr. Miretti, do you concur?
    Dr. Miretti. Yes. I think, if you are going to build a box 
that is like a bank vault, it is not only going to cost a 
tremendous amount of money, but then, you are also going to 
have to consider the fact that you are not going to be able to 
put as much cargo into that box, because now you are looking at 
a load weight that has to pass over the street. So that would 
be a factor that would have to be taken into consideration.
    Mr. Ose. Wouldn't it also diminish the ability of vessels 
that are bringing cargo to or from the United States in terms 
of the weight that they would have to carry?
    Dr. Miretti. Yes, it would diminish the number of 
containers that it could carry.
    Mr. Ose. Yes. The displacement tonnage would be reduced in 
terms of the number of containers.
    Dr. Miretti. Right, right.
    Mr. Ose. Mr. Keller, do you concur?
    Mr. Keller. I do. Transportation is a practical business, 
when you talk about container weight, it is called tare weight 
as opposed to cargo weight for a reason. And, that is because 
it is basically non-productive in terms of the customer's 
needs.
    Mr. Ose. All right. Mr. Parker.
    Mr. Parker. If you are concerned about that, and then every 
container in the world was a bank vault, you could just do it 
in a cargo ship that was non-containerized. So it wouldn't 
solve anything.
    Mr. Ose. So the technology, at least the logistical 
systems, would have to be thrown out the window. Ms. Williams.
    Ms. Williams. I would just say something about the 
transparency, to be able to look inside these. Is that 
clearly----
    Mr. Ose. The issue is, if your wall is this thick, and you 
have a gamma-ray system that is in place, you can see through 
that, and you double or triple the thickness of the wall, then 
your gamma-ray system can't get through. My question is, 
logically, it seems to me what we want to have is a minimum 
protective shield, if you will, on these containers in many 
cases, so we can, in fact, see what is inside them.
    Ms. Williams. We don't really have any great problem in 
this industry at the port, so it seems good.
    Mr. Ose. In terms of the containers being bank vaults, if 
you will, putting them on the truck, then putting them on the 
road, and then we have all sorts of maintenance problems on the 
roadways.
    Ms. Williams. Caltrans just did a study that showed there 
are, on California roads, 13 percent of the trucks are over 
80,000 pounds. I don't know how valid. I haven't seen the 
background, but we already have a problem. Increasing the 
container weight would be problematic.
    Mr. Ose. All right. I don't have any other questions. I do 
have a statement. Do you want to add anything? All right. I do 
want to express my appreciation to all of the witnesses here.
    Again, Ms. Williams, I understand your skepticism about the 
manner in which we are doing this in the interim final rules. 
But trust me, it works.
    Ms. Williams. OK. Great.
    Mr. Ose. It does work. The system forced upon us is kind of 
upside-down, but this does help those who are writing these 
interim final rules the concerns that they need to account for.
    Ms. Williams. Great.
    Mr. Ose. Or, at least it did the one time we've done it 
before.
    Today's hearing did show how much we still have to do, but 
it is as a Federal Government and in partnership with the 
people who are in the day-to-day business of maritime 
transportation, to ensure effective implementation of this law 
and port security.
    I encourage my colleagues to reflect upon the combined 
wisdom of today's witnesses and those implementing the 
regulations. I mean, you are the experts. We are not the 
experts. You are the experts, and we need to access your 
wisdom, and we are talking about security of our citizens and 
the potentially serious effects on commerce, so we really have 
very little room, if any, for error.
    This is an important step in the whole process. We are 
trying to make sure our ports are safe. As we have evidenced in 
the record, these facilities here are enormous economic engines 
for California and for the country as a whole. They are crucial 
to our well-being. We need to protect them.
    I will tell you, it has not been missed by me, but given 
the excess revenue over cost generated from these facilities in 
terms of Customs duties, I will be going back to Washington 
next Tuesday, and shortly thereafter we will be putting in a 
bill that at least starts the debate about committing those 
revenues for reinvestment in ports from which they come from.
    That process is long, and it might take some time, but we 
are going to start that today and attempt to force the issue. 
So, that these economic engines and the jobs that are so 
dependent upon their success, and the States that depend upon 
them have the opportunity to have the funds and the resources 
to meet the mandates that the Federal Government is going to 
lay on them.
    I appreciate the time you all have taken to come down here 
and educate Ms. Harman, Mr. Rohrabacher, Mr. Janklow, and me. 
It is a positive experience. We thank you.
    We are adjourned.
    [Whereupon, at 1:05 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]

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