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



                                                   S. Hrg. 102-000 deg.

  THE VISA APPROVAL BACKLOG AND ITS IMPACT ON AMERICAN SMALL BUSINESS

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

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                      WASHINGTON, DC, JUNE 4, 2003

                               __________

                           Serial No. 108-17

                               __________

         Printed for the use of the Committee on Small Business


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


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                      COMMITTEE ON SMALL BUSINESS

                 DONALD A. MANZULLO, Illinois, Chairman

ROSCOE BARTLETT, Maryland, Vice      NYDIA VELAZQUEZ, New York
Chairman                             JUANITA MILLENDER-McDONALD,
SUE KELLY, New York                    California
STEVE CHABOT, Ohio                   TOM UDALL, New Mexico
PATRICK J. TOOMEY, Pennsylvania      FRANK BALLANCE, North Carolina
JIM DeMINT, South Carolina           DONNA CHRISTENSEN, Virgin Islands
SAM GRAVES, Missouri                 DANNY DAVIS, Illinois
EDWARD SCHROCK, Virginia             CHARLES GONZALEZ, Texas
TODD AKIN, Missouri                  GRACE NAPOLITANO, California
SHELLEY MOORE CAPITO, West Virginia  ANIBAL ACEVEDO-VILA, Puerto Rico
BILL SHUSTER, Pennsylvania           ED CASE, Hawaii
MARILYN MUSGRAVE, Colorado           MADELEINE BORDALLO, Guam
TRENT FRANKS, Arizona                DENISE MAJETTE, Georgia
JIM GERLACH, Pennsylvania            JIM MARSHALL, Georgia
JEB BRADLEY, New Hampshire           MICHAEL MICHAUD, Maine
BOB BEAUPREZ, Colorado               LINDA SANCHEZ, California
CHRIS CHOCOLA, Indiana               ENI FALEOMAVAEGA, American Samoa
STEVE KING, Iowa                     BRAD MILLER, North Carolina
THADDEUS McCOTTER, Michigan

         J. Matthew Szymanski, Chief of Staff and Chief Counsel

                     Phil Eskeland, Policy Director

                  Michael Day, Minority Staff Director

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                               Witnesses

                                                                   Page
Reinsch, William A., National Foreign Trade Council..............     5
Yanni, Palma R., American Immigration Lawyers Association........     7
McHale, William J., Kanawha Scales and Systems, Inc..............     8
Storie, Chip, Association for Manufacturing Technology...........    10
Shapiro, Gary, Consumer Electronics Association..................    12
Jacobs, Janice L., Department of State...........................    14
Garrity, Robert J., Federal Bureau of Investigation..............    18

                                Appendix

Opening statements:
    Manzullo, Hon. Donald A......................................    43
    Velazquez, Hon. Nydia........................................    45
    Millender-McDonald, Hon. Juanita.............................    47
    Christensen, Hon. Donna M....................................    51
    Bordallo, Hon. Madeleine Z...................................    61
    Sanchez, Hon. Linda T........................................    63
Prepared statements:
    Reinsch, William A...........................................    65
    Yanni, Palma R...............................................    67
    McHale, William J............................................    74
    Storie, Chip.................................................    79
    Shapiro, Gary................................................    85
    Jacobs, Janice L.............................................    92
    Garrity, Robert J............................................   101
    Gatens, John.................................................   102
    Travel Business Roundtable...................................   103
    Travel Industry Association of America.......................   107

                                 (iii)

 
                   THE VISA APPROVAL BACKLOG AND ITS
                   IMPACT ON AMERICAN SMALL BUSINESS

                              ----------                              


                        WEDNESDAY, JUNE 4, 2003

                  House of Representatives,
                       Committee on Small Business,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 2:00 p.m., in Room 
2360, Rayburn House Office Building, Hon. Donald A. Manzullo 
[chair of the Committee] presiding.
    Present: Representatives Manzullo, Chabot, Schrock, Akin, 
Capito, Beauprez, Chocola, Velazquez, Millender-McDonald, 
Udall, Napolitano, Ballance, Acevedo-Vila, Case, Majette, 
Marshall, and Sanchez.
    Chairman Manzullo. If we can get everybody seated so we can 
get started.
    Good afternoon. I would like to call this meeting to order. 
It is our pleasure to welcome everybody to today's Small 
Business Committee hearing focused on our government's efforts 
to implement new procedures allowing foreign visitors to travel 
to this country for business and pleasure.
    First, I would like to take care of some of the 
housekeeping items. As is our custom, I will make a few remarks 
as an opening statement and then yield to the Ranking Member 
for her opening statement, and we will proceed directly to the 
testimony from our witnesses. After all the witnesses have 
testified, we will take questions from the members in the order 
in which they arrived.
    Bringing buyers and sellers together, whether in the 
boardroom or the factory floor, is the cornerstone of a free 
market. Meeting face to face to agree on price and terms is 
more than mere custom, it is a necessary part of winning the 
bid or sealing the deal. Since September 11 of 2001, this 
simple act has become much more difficult. The visa approval 
backlog which peaked last summer has been the subject of 
widespread criticism from many corridors. It is appropriate for 
this Committee to inquire of the relevant agencies about their 
progress towards remedying this situation. Today's hearing will 
focus particularly on the State Department's efforts to add to 
the new security requirements and the impact ongoing procedural 
delays are having on our business climate.
    For me and the people that I represent in northern 
Illinois, the visa issue is critical. As members of this 
Committee are well aware, I spend a great deal of my time 
helping our small businesses export their products, growing 
markets overseas in the manufacturing sector. The visa backlog 
first came to my attention while trying to help a major 
employer back home sell more of their machines in China. It 
took a long period of time for Ingersoll Corporation, a 
constituent employer from Illinois, that waited for a long 
period of time to get buyers to get a visa to come to Rockford 
to inspect their products and sign on the dotted line. 
Eventually the buyers looked elsewhere, and the company lost 
the sale and it is now in bankruptcy. The failure of Ingersoll 
is not to be blamed entirely on this lost sale. It is not 
difficult to imagine that other businesses all over the country 
who are also on the edge of solvency may lose business simply 
because they are unable to get their buyers to come to their 
facility or to the trade show where they feature their 
products.
    Today we will hear testimony from the Department of State 
and Federal Bureau of Investigation to learn more about the 
process of issuing visas for foreign visitors and their 
progress to date to clear the existing backlog. I trust that 
both of these government witnesses will explain to the 
Committee the preparations they are making for the new 
interagency review regime, sited at the Department of Homeland 
Security, which will begin at the end of this fiscal year.
    And we have had several pre-Committee hearings with many of 
the people that are here at the panel today, and I can tell you 
that the testimony they will give is compelling. There is a 
very serious problem with regard to the amount of visa 
applications that the FBI had to check. Their business 
increased by over threefold. They are making, in my opinion, 
extraordinary progress in trying to reduce the backlog and 
address the manufacturing and visitor concerns of our country.
    In addition to our government witnesses, we will hear from 
a variety of representatives from the business community, for 
these folks, bringing buyers and sellers together is their only 
job.
    Mr. Gary Shapiro from the Consumer Electronics Association 
is part of making these transactions possible. Chip Storie from 
Cincinnati Machine and Bill McHale from Kanawha Scales know 
about the disappointment of having willing buyers walk away in 
favor of competitors who can actually bring the customers into 
their factory. Ms. Palma Yanni and Bill Reinsch are experts on 
immigration and visa issues. With many years of experience on 
the front lines in the business of immigration, it is my hope 
that they would help the Committee and the House better 
understand how the apparatus of the State Department and FBI 
and other agencies actually work, and hopefully tell us how we 
can improve this system in the years ahead.
    Again, I welcome each of you to the Committee today and 
look forward to your testimony.
    [Mr. Manzullo's statement may be found in the appendix.]
    Chairman Manzullo. I am now pleased to recognize the 
Ranking Member, Mrs. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    The cornerstone of the global economy is international 
trade. Many small businesses are contributors to international 
trade. In fact, more than 97 percent of all U.S. Exporters are 
small businesses. The small business sector also participates 
in the international travel and tourism industry, making up a 
large percentage of both travel agencies and tour operators. 
Yet the terrorist attacks of September 11 caused setbacks for 
many small businesses, especially those with ties to the 
international market.
    In response to September 11, the Department of State 
implemented new policies to govern the visa issuing process. 
Our Nation's security is not something that should be taken 
lightly. However, in an effort to provide security to our 
citizens and our country, we must recognize that America's 
exporters are the entrances for people's goods and services 
which help drive our economy.
    Unfortunately, many small businesses, including those in 
the manufacturing sector, are bearing the brunt of these new 
visa procedures. A significant number of their clients face 
extended visa delays and, in some instances, outright 
rejection. These denials and delays are pushing clients to seek 
products from U.S. Competitors.
    Small businesses also fear that effects of these policies 
are threatening the economic recovery and future 
competitiveness of our country. Small firms are finding that 
longstanding business relationships with foreign clients are 
being damaged and legitimate travelers are unable to obtain 
visas. Opportunity for new business ties are being blocked and 
personal transfers within some companies are being delayed.
    These delays, denials, and practices are harmful to the 
future viability of America's small enterprise and to both our 
national economy and to the larger international economy. There 
are two specific procedures at the heart of these difficulties. 
The first is the new visa policy entitled ``Visas Condor'' 
which was implemented after September 11 to fight terrorism. 
But because it fails to clarify just how long it takes to 
complete a check, applicants undergoing Visas Condor review 
face an indefinite approval time, which creates a backlog.
    In addition, further delays are taking place due to a lack 
of knowledge about how to apply policies involved in the 
``Visas Mantis'' system. While this process is not new, it is 
apparent that consular services need to be educated on the 
technologies involved to reduce delays. While current trade and 
tax policies already place many small businesses at a 
disadvantage in a very competitive global market, these new 
immigration policies, although necessary, are creating an 
additional hardship for them.
    It needs to be stressed that the entire market is being 
affected by the new visa policies. High-tech companies are 
struggling. The HIB visa cap for fiscal year 2001 through 2003 
hit an all-time high with 195,000 approved new workers. Sadly, 
the cap has now dropped to only 65,000 for 2004. Small business 
owners are feeling the impact as they wait for their workers to 
arrive who are caught in the backlog. Immigrants are being 
delayed in their travels to work in the United States. It is 
not just one sector of our market that is at a disadvantage, 
but it is our entire global market that is bearing this burden.
    Our most effective security strategy should be to improve 
the prescreening immigration process, allowing us to keep out 
those who intend to harm our Nation, while admitting those 
individuals who come to build America and make positive 
contributions to our economy. Too many of our Nation's most 
prosperous industries, including travel, tourism and 
manufacturing have been put at unfair disadvantage. While the 
need for increased security is certainly warranted, a healthy 
balance needs to exist between safety and the expanding 
competitive trade market facing America's small businesses.
    Thank you Mr. Chairman.
    [Ms. Velazquez's statement may be found in the appendix.]
    Chairman Manzullo. Thank you.
    What we are going to do at the hearing is that the five 
witnesses from the private sector will have 5 minutes, and we 
will enforce that. We will go with the private sector 
witnesses, and the government witnesses I will give 10 minutes. 
And the reason for that order is that I want the government 
witnesses to be able to hear the testimony, and then they can 
take their prepared testimony with the testimony that has come 
before them, and I believe it will help them in terms of the 
overall purpose of this hearing, which is to come up with a 
solution and work with the government agencies in order to get 
rid of the backlog and continue the progress that has been made 
on this to date.
    Mr. Chabot, you have a constituent. Did you want to 
introduce him?
    Mr. Chabot. I would like to take this opportunity to 
introduce and welcome Chip Storie who is here testifying on 
behalf of the American--the Association for Manufacturing 
Technology. Chip is the Vice President of Cincinnati Machine, a 
company that makes manufacturing tools in my hometown of 
Cincinnati. Cincinnati Machine was founded all the way back in 
1884, and it is a world leader in high-speed machining, 
cellular manufacturing, and advanced composites machinery.
    Several months ago, Chip and his company had contacted our 
office concerning the difficulty that Cincinnati Machine was 
having getting visas processed; and we were able to provide 
some assistance, although it is my understanding that they are 
still waiting for one of the visas.
    Companies like Cincinnati Machine that depend on exports 
are struggling because of the slow visa application process. We 
have to find a way to continue to ensure that our visa process 
is as thorough and rigorous as possible, but not so cumbersome 
that it adversely impacts the competitiveness of our businesses 
that rely so heavily on foreign sales.
    And unfortunately, I have about three committee meetings 
going on at the same time, and I have to head the partial birth 
abortion ban on the floor.
    Chairman Manzullo. You are also on Judiciary that has the 
legislative jurisdiction on this issue.
    Mr. Chabot. We are pleased to have him and the other 
witnesses as well, and we welcome you here today. Thank you, 
Mr. Chairman.
    Chairman Manzullo. First witness is Bill Reinsch, President 
of the National Foreign Trade Council. Bill, you testified 
before. You know what the yellow light means; you got 1 minute. 
The red light means you have no time left. So, I look forward 
to your testimony.

 STATEMENT OF WILLIAM A. REINSCH, PRESIDENT, NATIONAL FOREIGN 
                      TRADE COUNCIL, INC.

    Mr. Reinsch. Thank you, Mr. Chairman. It is an honor to be 
here before you. My comments are going to be in the nature of 
an overview and I am going to focus not on immigrants or 
students, although there are problems there as well, but on 
business travel. And some of my colleagues are going to have 
some specific stories to tell you about what is going on. I 
think the theme of those stories is largely that in a 
globalized economy with companies that operate in lots of 
places, companies need to be able to move people around for a 
variety of reasons. They need to be able to bring customers 
here from all over the world.
    And Mr. Chabot's example, machine tools, are not something 
you put in a briefcase and fly off to China to market. You 
bring the Chinese here to look at them. You need to bring your 
customers here and be able to move your own employees around to 
different locations, often on short notice, in order to meet 
critical needs; and companies need to be able to provide 
training and other customer needs even when their customers are 
not American.
    In the wake of the September 11th tragedy, there have been 
new and unexpected complications in the visa review process 
which we had hoped and thought was a transition problem, but 
which has turned out not to be a transition problem. As late as 
on my way up to this hearing, I ran into one of my members who 
found out I was doing this, who said, ``Thank you. We are still 
having a serious problem today and it has not gotten any 
better.'' .
    My sense of what is happening, and you will hear in graphic 
detail from others that delays--the system has become opaque. 
It is hard to find out where anything is at any given point, 
and there are long periods of uncertainty, oftentimes ending in 
denials. But from a business point of view, what you really 
crave is certainty. You need to know that at the end of 10 
days, 30 days, 50 days, whatever it is, there is going to be an 
answer, so you can plan and you don't have to go through the 
embarrassment of keeping your customer, waiting for a long 
period of time because the government is having difficulty 
making up its mind.
    Why are we running into these problems? I think it is a 
combination of things, partly human nature. Nobody in the visa 
review process wants to be the person who stamps ``approved'' 
on the next terrorist's application. The result has been more 
applications are being sent to Washington instead of handled at 
post. In Washington they are put into an interagency review 
process which involves a number of agencies--State, Commerce, 
the FBI, various other agencies--some of whom have a commercial 
mandate as part of their mission and some of which don't. I 
think that has been part of the issue. I think the single 
biggest thing that has happened is removal of the clock.
    I have been a bureaucrat. I was in the Commerce Department 
and I know something about bureaucracy. The best way to get a 
decision is to have a deadline because you know the decision 
will be made the day before the deadline. Whether it is 10 days 
or 30 days, it will be made the day before.
    One of the things that appears to have happened last 
summer, in the wake of a very large backlog of applications 
being referred here, is the State Department went off the clock 
and removed the deadline and removed the rule that said that if 
these things are not objected to within a certain period of 
time by an agency, they will be approved. And the minute you 
did that and required positive approval by everybody, you 
presented an invitation to the bureaucracy simply to take its 
time. And that is what has happened.
    A second element I think has been the inevitable 
bureaucratic inertia caused by the creation of the Department 
of Homeland Security. Ultimately the policymaking part of this 
function is to reside in that Department pursuant to a 
memorandum of understanding to be negotiated between the new 
Department of Homeland Security and the Department of State. 
That MOU is under negotiation and has been under negotiation. 
The longer it stays under negotiation, the less is going to 
happen in terms of developing an efficient process. And one of 
the things I would recommend is that we--that you urge the 
departments to conclude the negotiations to sort this out so 
that the various departments that do have a role in this can 
begin to plan and move forward.
    To conclude, what do we do? Go back on the clock. You know, 
reinstitute the action forcing process in the bureaucracy that 
guarantees a decision. Businesses can deal with denials. What 
they can't deal with is uncertainty and opacity.
    Second, finish the MOU. Get the process settled, have it 
clearly specified who does what so the bureaucracy can then 
adjust its troops and reorient its resources accordingly.
    Third, shorten the technology list. You will find that a 
lot of these business issues involve businessmen who are coming 
here to have some interaction with critical technology. The 
Department uses a fairly long and very vague list that results 
in reviews for machine tools, even in cases where the 
government has already decided it is all right for them to buy 
the tool, but for some reason it is not all right for them to 
bring the individual here to take possession of the tool and be 
trained on how to use it.
    Chairman Manzullo. The red light is there and your 
testimony has to be shortened.
    Mr. Reinsch. We need to change the way we think about 
mobility. In the good old days, the company transferred its 
workers from its plant in Savannah to its plant in Rockford. We 
move them from the lab in Taipei to the lab in San Francisco. 
From a corporate point of view there is not a lot of difference 
now, but we need to be able to do that and we need to adjust 
our processes in order to permit that to happen.
    Mr. Chairman, I have a written statement.
    Chairman Manzullo. All the written statements will be made 
part of the record.
    [Mr. Reinsch's statement may be found in the appendix.]
    Chairman Manzullo. Before we go to the next witness, 
Congresswoman Capito has a constituent that she would like to 
introduce.
    Mrs. Capito. Yes, I do. I would like to introduce to the 
Committee and those in the room Mr. Bill McHale from my Second 
District in West Virginia. Bill is the Vice President with 
Kanawha Scales and Systems, and a large exporter and the pride 
of West Virginia. They are the largest provider of weighing and 
control solutions in the United States. And we have shared 
stories in my office of the difficulties of small business, and 
I just welcome him and I look forward to his comments.
    Thank you.
    Chairman Manzullo. Our next witness is Ms. Palma Yanni, 
President-elect of the America Immigration Lawyers Association. 
Look forward to your testimony.

    STATEMENT OF PALMA R. YANNI, PRESIDENT-ELECT, AMERICAN 
                IMMIGRATION LAWYERS ASSOCIATION

    Ms. Yanni. Mr. Chairman and distinguished members of the 
Subcommittee, I am Palma Yanni, President-elect of the American 
Immigration Lawyers Association. I am honored to be here 
representing our Association of more than 8,000 attorneys who 
represent businesses by the thousands, who are bringing in 
needed employees either on a temporary or permanent basis when 
there are not available U.S. Workers.
    We also represent families, bringing in their close members 
for legal processes to become permanent residents of the U.S.; 
and also asylum seekers, often pro bono, athletes, 
entertainers, and foreign students.
    Our Association represents American businesses and 
individuals across the board. The backlogs right now in the 
immigration system from beginning to end are at a time more 
profound than they have ever been before. Visas that once took 
a day take a month. Visas that used to take a month can take a 
year, if someone is lucky.
    How did we get to this point? Obviously the concern for 
security is a huge part of that and the question is whether 
what is being done is simply processes for the effect of having 
processes without any regard to effectiveness or impact on the 
one hand, and also whether there is adequate funding for the 
adjudications and the decisions that are necessary or any 
attempt at removing backlogs will simply be doomed from the 
start.
    No one is going to argue that security checks and 
precautions are not necessarily advisable, but the key is to 
have all the agencies involved, communicating, looking at these 
checks and precautions as a priority, and making sure that 
there is not duplication and error in the system. And that has 
not been the experience to date. Businesses, as you have heard 
and will continue to hear, face lengthy delays at each stage of 
visa processing at the Bureau of Citizenship and Immigration 
Services, to the final applications at U.S. Consulates. And 
many times the delays are duplicative. The delays at the Bureau 
of Citizenship and Immigration Services to do security checks 
at that point are then repeated months later when the 
application is assumed by the same agencies doing the same 
checks once again that have just been completed. And there does 
not seem to be a reason for that. And more organization, 
cooperation, between these agencies would certainly go a long 
way to reducing that problem.
    The technology alert list, as has previously been 
mentioned, that is a serious cause for delay. Some of the 
activities on that list we can understand. For example, if 
someone is coming for reprocessing irradiated nuclear fuel to 
produce plutonium, you might want to have an extra look at that 
application. On the other hand, geography and landscape 
architecture are on the list. I do understand that the 
Department of State may have removed those last two, and 
applaud them for that exercise and common sense.
    The delays that we hear from are very often the FBI checks. 
State Department will not, as was noted, issue any visas until 
the FBI has conducted its check. This can be a lengthy process. 
I just had an example of this in my firm, where a physician who 
is working in an underserved area in West Virginia, had three 
prior visas, had been checked at both a--by the Department of 
State for a certain waiver he needed and also had been checked 
by BCIS when he changed his status to H. Went home for a brief 
visit and was held up 61 days, because there is someone else in 
the system somewhere with his same rather common name but a 
different birth date. Fingerprints had to be done. They had to 
go to the FBI. And this community in West Virginia was without 
a physician for 61 days. When he goes back again, presumably 
the same thing will happen because there is no mechanism to put 
in the system the fact that someone has already been cleared.
    And we anticipate with--as was noted before in your initial 
statement, Mr. Chairman, that with 90 percent visa interviews, 
the process can only get worse overseas. In sum, that is the 
overseas process.
    The immigration process here through the Bureau of 
Citizenship and Immigration Services is also suffering from 
extensive backlogs because of additional clearances and also 
because of what we call the ``culture of no.'' right now, 
officers, it appears, are looking for any way to say no, 
because they are in fear of putting that approval stamp on the 
next terrorist that might want to enter.
    Thank you.
    Chairman Manzullo. Thank you for your testimony.
    [Mr. Yanni's statement may be found in the appendix.]
    Chairman Manzullo. Our next witness is William McHale, Vice 
President of Sales of Kanawha Scales and Systems. Look forward 
to your testimony. Could you pull the microphone closer to you?

   STATEMENT OF WILLIAM J. McHALE, VICE PRESIDENT OF SALES, 
                KANAWHA SCALES AND SYSTEMS, INC.

    Mr. McHale. Mr. Chairman and members of the Committee, 
thank you for inviting me to testify at this hearing. I am Bill 
McHale, Vice President of Kanawha Scales and Systems, 
headquartered in Poca, West Virginia. We are a small- to 
medium-sized business. We employ approximately 200 employees at 
12 offices with locations in West Virginia, Pennsylvania, Ohio, 
Kentucky, Alabama and Michigan.
    Our core business is distribution and sales of specialized 
weighing and control systems. A big part of our business is 
designing and building customized systems controls for clients 
throughout the U.S. And internationally. Our flagship product 
is a high-speed train loadout system which we supply worldwide. 
Our company has been involved in the export market since 1986, 
with much of our efforts focused in China.
    I am appearing before the Committee to express my concern 
over the growing difficulties of our foreign employees, 
existing clients, prospective customers face when trying to 
attain travel visas to the U.S. For the purpose of business 
discussions. U.S. Companies face many difficulties in trying to 
do business overseas and being competitive on a global scale. 
Adding the issue of an increasingly difficult process of 
potential prospects of getting visas to the U.S. Will only 
further undermine our efforts to succeed in international 
markets. We already face competing on an unlevel playing field 
against many of our international competitors. The problems we 
face are well known and include the current strength of the 
U.S. Dollar, WTO inconsistent subsidies, and other practices of 
foreign governments and rampant----.
    Chairman Manzullo. Do you want to get directly into this 
issue?
    Mr. McHale. Yes. We face the problem of inviting people 
over here for design review, plant inspections, customer 
training, and training of our own individuals that are 
stationed overseas. This makes it very difficult to support our 
customers who need visas, for these people are denied. It also 
makes it difficult to maintain the terms of the contract if the 
terms of the contract specify that certain members have to come 
over from our foreign customers for design review. When actions 
or procedural delays are raised in granting these visas, it 
makes it very difficult for us to fulfill the terms of the 
contract.
    On two different occasions we have tried to get a foreign-
employed engineer over to the U.S. For training on products 
that we manufacture in China. On both those cases his visa 
application was rejected. His total interview time both times 
lasted less than 30 seconds. Prior to the second attempt to be 
granted a visa, we contacted the U.S. Commercial Office in 
Beijing and obtained advice from them on what we should do and 
the paperwork we should prepare. We followed those procedures 
and we still were not successful. We had a 30-second interview 
and our employee was rejected for a visa.
    The last two contracts we signed in China in April this 
year, our customers inserted wording into our contract that we 
would personally get involved in trying to obtain visas. In 
reality there is nothing we can do to help with this. We are 
particularly concerned about visa processing delays, because we 
have two delegations coming over in July on the last two 
contracts we signed in April. If these visas are not granted, 
we are going to be forced to send large groups of engineers and 
staff members over to China for the conduct of the design 
review meetings. This will place additional burdens on our 
staff as well as interfere with our ability to meet our 
deliveries by taking that many people out of the loop.
    To give you an idea of the importance of our export market 
to us, over the years, our export business has accounted for 12 
to 21 percent of our total volume. This year, due to the 
flatness of the economy in West Virginia, our export business 
is going to amount to over 25 percent. It supports 8 to 12 jobs 
in our company. If it hadn't been for the overseas business we 
placed this year, specifically in China, we would have been 
faced with the prospect of laying off people the first time in 
our 50-year history.
    In closing, I feel that procedures need to be put in place 
that don't penalize U.S. Companies' ability to get visas 
granted to foreign employees for training purposes and future 
prospects. The deck is already stacked against U.S. Companies 
trying to do business overseas. We don't need to compound that 
by making it even more difficult for our foreign customers to 
do business with us.
    I don't mean to diminish the importance of screening 
potential visitors to the U.S. In light of the terrorist 
activities throughout the world. However, a 30-second interview 
is not going to accomplish that either. The current process is 
broken and very badly needs to be fixed.
    Thank you for the opportunity to share our company's and 
our employees' concerns with you today. It is heartening to see 
the Small Business Committee of the House of Representatives 
taking an interest in this serious and so far undiminished 
problem.
    Chairman Manzullo. Thank you very much for your testimony.
    [Mr. McHale's statement may be found in the appendix.]
    Chairman Manzullo. Our next witness is Chip Storie, V.P., 
Aerospace Sales, at Cincinnati Machine. You may want to pull 
the mike closer to you.

  STATEMENT OF CHIP STORIE, VICE PRESIDENT, AEROSPACE SALES, 
    CINCINNATI MACHINE, INC., ASSOCIATION FOR MANUFACTURING 
                           TECHNOLOGY

    Mr. Storie. Mr. Chairman, members of the Committee, good 
afternoon and thank you for inviting me to testify in this 
hearing on how the visa program is affecting the business 
community.
    Today I will be speaking on behalf of AMT, the Association 
for Manufacturing Technology. My company, Cincinnati Machine, a 
division of UNOVA, is a manufacturer of machine tools. As you 
know, Mr. Chairman, the machine tool industry in the United 
States today is in crisis. Consumption of machine tools in the 
United States has decreased by approximately 60 percent over 
the past 5 years. There is a direct correlation between the 
amount of manufacturing done in the United States and the 
machine tool consumption here in our home market. As a result, 
a once strong machine tool industry has seen many of its best, 
most innovative companies go out of business in the last 4 
years.
    As an aside Mr. Chairman, I would like to thank you for 
your strong leadership on issues such as FISC, which has 
provided great and valuable support for our industry during 
these difficult times. While less and less manufacturing takes 
place here in the U.S., there are more and more in places such 
as China. As machine tool companies worldwide must necessarily 
follow manufacturing work, China has become the leading 
consumer of machine tools in the world.
    U.S. Companies must adapt in order to sell to China if we 
wish to survive. Many U.S. Companies are doing that, but we 
find that the roadblocks to success can often be traced back to 
our own governmental policies and practices. One of these 
roadblocks is how visa applications are currently being handled 
for our Chinese business societies. Specifically, refining the 
visa applications, which were taking a matter of days to 
process prior to 9/11, are now taking 6 months or longer.
    Please don't mistake my desire to get the visa process 
fixed for legitimate business partners with a lack of concern 
for national security. No one wants a repeat of the express 
visa process that supplied many of the 9/11 terrorists with 
their entry passes into the United States. The desire of the 
business community is that the process is reformed so that 
legitimate business people are provided timely visas in order 
to allow for trade with U.S. Companies.
    The situation as it exists today certainly does not help 
promote trade. In fact, it is currently driving potential 
customers to our European and Japanese competitors. Let me 
provide specific examples of how the visa process is hurting 
U.S. Companies. In 2002 my company sold $5 million worth of 
equipment to Chengdu Aircraft in China. After a vigorous export 
license review, we received the exports license to be able to 
ship the machines to Chengdu. In the normal course of 
satisfying a contract of this nature, a delegation of Chengdu 
engineers and managers must come to Cincinnati to inspect the 
equipment prior to it being shipped. Unfortunately, it took 6 
months for the visas to be approved. During this time I had $5 
million of inventory I was unable to ship and collect payment 
on. From the customer's perspective, he fell behind in 
commitments to his customer by approximately 5 months while the 
machines collected dust in Cincinnati.
    I am currently pursuing a new contract with Chengdu 
Aircraft for additional equipment so they can produce the 
Boeing 757 tail section. Even though they prefer Cincinnati-
built equipment, they are considering both European and 
Japanese suppliers' equipment because they do not feel that 
they can count on either a quick export license approval or 
timely visa approvals if they provide Cincinnati a purchase 
order.
    I currently have another piece of equipment on my floor 
that is valued at $1\1/2\ million that is ready to ship to Xian 
Aircraft. Again, the export license has been approved to ship 
this. It has been 4 months since the applicable visas were 
applied for, but as of today we have no idea as to the status 
of the applications. It is difficult to determine who, if 
anyone, is working on it.
    As with Chengdu Aircraft, both Cincinnati and Xian Aircraft 
are suffering. In negotiations with Xian we asked them to 
assign personnel who had been to the United States before, so 
that there was an established track record of them coming to 
the United States and going back home according to the visa 
process. This approach has not helped. As with Chengdu 
Aircraft, I am also pursuing additional business from Xian 
Aircraft. This potential contract could exceed $6 million, a 
substantial sum for a company of my size. The Xian purchasing 
team is certainly using the visa problem as a part of the 
decisionmaking process. Thus far, I have been able to ship the 
aforementioned piece of equipment to them so they are very 
uncomfortable in providing me an even larger contract. My 
German competitor has assured them that they will have no 
problems coming to Germany.
    I could list a dozen more examples just from Cincinnati 
Machine, but this problem is affecting thousands of companies 
just like Cincinnati. We and many other U.S. Companies are 
fighting for survival. We need this problem fixed, and it must 
happen quickly. We must find a way to process legitimate visa 
applications for Chinese customers in a timely manner.
    In March of this year, we were encouraged by Secretary 
Powell's appearance before the House Appropriations 
Subcommittee on Foreign Operations. And in his appearance, the 
Secretary acknowledged the ongoing problem and promised to get 
this fixed. Unfortunately, we in the business community still 
await this relief. In fact, the Wall Street Journal reported on 
May 16th that the State Department plans to conduct face-to-
face interviews with almost everyone seeking a visa to enter 
the United States. While this sounds like a prudent step for 
certain geographical areas of concern, it will take a lengthy 
process for many legitimate applicants from China and make it 
completely unworkable.
    In summary, I want to reiterate that this issue is having a 
very serious consequence on the United States machine tool 
industry as well as other industries that must bring overseas 
customers to the U.S. To effectively do business. Jobs are at 
stake and companies are at stake. Time is of the essence.
    [Mr. Storie's statement may be found in the appendix.]
    Chairman Manzullo. Our next witness is Gary Shapiro, 
President and CEO of Consumer Electronics Association, on 
behalf of the National Association for Exhibition Management. 
Look forward to your testimony.

    STATEMENT OF GARY SHAPIRO, PRESIDENT AND CEO, CONSUMER 
 ELECTRONICS ASSOCIATION, NATIONAL ASSOCIATION FOR EXHIBITION 
                           MANAGEMENT

    Mr. Shapiro. Thank you, Mr. Chairman and members of the 
Committee. The Consumer Electronics Association is the 1100 
member trade association which also owns and produces the 
International CES. International CES is the largest trade show 
of any type in the United States.
    I am also appearing before you on behalf of the 
International Association for Exhibition Management which is a 
professional association for some 3,000 professionals involved 
in the management and support of the exhibition industry. On 
behalf of both CEA and IAEM, I applaud your focus on this 
important issue.
    Now, a trade show or an exhibition is an event where buyers 
and sellers and also media investors and other professionals 
meet to see new products, exchange ideas, and build 
relationships. They often highlight the largest companies, but 
it is the smallest and the newest companies that gain the most 
benefit per dollar from these events. Like many shows, our 
philosophy is to run our show, the CES, so that any 
entrepreneur with an idea created in a garage can reach buyers 
and mediums from all over the world for a very small investment 
of a few thousand dollars. They can't go overseas to do that.
    In my written statement, I have an example of where our 
current chairman had to pack her lunch and meals for several 
days to participate in our show. Now she is a very successful 
exporter. The fact is that buyers, media, health care 
professionals, scientists and the financial community from 
around the world, flock to the U.S. To see the newest and best 
and the latest and the greatest. Indeed, according to the 
Center for Exhibition Industry Research, over 11,000 
exhibitions are produced annually in the U.S. And these events 
are estimated to produce $9 billion in direct revenue to the 
organizers and some $60 billion indirectly to the cities 
housing them.
    However, the U.S. Is not the world leader in exhibitions. 
Germany, with its central location, large exhibition halls, 
government commitment to exhibitions, and freedom of travel and 
the phenomenal European train system hosts many of the world's 
largest events.
    We do have an opportunity. Most major U.S. Cities have new 
spectacular convention centers. They have tremendous hotel 
capacity. They maintain the highest skilled labor necessary to 
build exhibits and run exhibitions. Moreover, the U.S. Is a 
desirable destination and the recent devaluation of the dollar 
enhances our ability to attract international visitors. But we 
give a mixed message to many international visitors. Our own 
visa policies discourage visitors from those countries where 
visas are required.
    For example, our Chinese attendees increasingly tell us 
that the visa process appears arbitrary and lengthy. First they 
must appear in person and apply. They must provide financial 
statements and bank documentation. They must arrange for an 
interview and await the result. This process can take several 
months. As most attendees at exhibitions make a decision to 
attend about 3 months out, you can see why even--why we lose 
international attendees who simply cannot complete the process 
in time, even if they are ultimately granted a visa.
    We agree that national security is our highest priority. 
That is important to all of us. We are Americans and we don't 
want to see evil-doers gain access to our country. But we also 
believe that national security depends on our economic growth 
and our ability to do business with those from outside the U.S.
    In an already difficult environment, U.S. Exhibition 
organizers and their participants are being harmed by the loss 
of participation in their events by both exhibitors and 
visitors from abroad. There are several examples that are just 
the tip of the iceberg that are in my written statement. In 
each of these cases, the exhibition producers and the events 
participants were hurt. And in each case we are sending a 
message to the world that the welcome mat from the U.S. Has 
been pulled. Sadly, potential attendees and exhibitors from 
emerging economies to provide U.S. Business owners with the 
greatest opportunity for business growth and development are 
those who are most unlikely to be granted visas today, even if 
they had been repeat business visitors to the U.S. Who had not 
violated U.S. Immigration law or policy.
    The cancellations resulting from our policy leave us in the 
very difficult position of having to resell space and denying 
our participants to see international buyers. Perhaps the worst 
aspect of the current situation is the growing perception that 
the U.S. Is a uniquely difficult and inhospitable place to 
conduct international business. This perception, if left to 
grow unchecked, could harm us for many years.
    It is for these reasons that we advocate the creation of a 
fast-track visa approval system that safely discriminates 
between those who have demonstrated their trustworthiness and 
those who have not. Persons who have been provided with 
business travel visas in the past, have participated in 
business events, and have not violated U.S. Immigration laws or 
policies, should be issued expedited visas if their names do 
not appear on any of the Nation's security watch lists. This 
fast-track approval system would at least allow our Nation to 
conduct this international business through our trade events 
and corporate visits for those who demonstrate they possess 
legitimate business interest for travel to the U.S. .
    Those who do not qualify for fast-track issuance can 
legitimately be subjected to a thorough investigation before a 
visa is issued to them for travel. For those visa applicants 
subject to a more thorough review, we urge the Committee and 
Members of Congress to allocate the necessary funding to ensure 
timely processing.
    We also urge the Committee to explore the option of 
allowing companies and exhibition organizers to ensure through 
bonding, the return of those attendees where the risk is not a 
national security but of undesired immigration to the United 
States, which is often the case with China.
    In closing Mr. Chairman and members of the Committee, we 
urge you to consider the creation of more deft and defined 
policies that will result in a much more efficient system of 
visa issuance that will not have the unintended result of 
blocking America's access to international buyers and commerce 
and also hurting several of our vital industries. We would be 
pleased to work you and your staff to perfect such a system.
    Chairman Manzullo. Thank you very much.
    [Mr. Shapiro's statement may be found in the appendix.]
    Chairman Manzullo. We are going to go to Janice Jacobs, 
because in the flow of the testimony, the State Department's 
job comes first. Janice, I want to tell you that Catherine 
Barry from your staff has been a tremendous assistance. We met 
with her three or four times and really laid out exactly what 
you are doing. We look forward to your testimony.

 STATEMENT OF JANICE L. JACOBS, DEPUTY ASSISTANT SECRETARY FOR 
               VISA SERVICES, DEPARTMENT OF STATE

    Ms. Jacobs. Thank you very much, Mr. Chairman and members 
of the Committee. I welcome the opportunity to testify today 
regarding the effect of visa approval backlogs on small 
business.
    Visa work has always been about striking the proper balance 
between protecting U.S. Borders and facilitating legitimate 
travel. Our operating environment changed forever on September 
11, 2001 and there is no turning back the clock. Security is 
and will continue to be the top priority in the processing of 
visas for international visitors.
    The State Department is committed to strengthening the visa 
process as a tool for protecting U.S. National security 
interests. We have made a number of changes since 9/11 and will 
continue to do so in response to the security needs of our 
Nation and recommendations by law enforcement and national 
security agencies and, of course, the Department of Homeland 
Security. At the same time, the State Department is keenly 
aware of the need to balance national security interests with 
other strategic interests such as promoting U.S. Business 
interests, tourism exchanges, and the overall health of our 
economy.
    Enhancing U.S. Security means pushing borders out to our 
visa processing posts abroad. Here, I am happy to report that 
we made enormous progress in identifying individuals who may 
present a threat to our Nation through enhanced interagency 
data sharing. Since 9/11 we added over 7.3 million new records, 
primarily FBI, NCIC, which is criminal history data to our 
Consular Lookout Automated Support System, or CLASS. The tip-
off database on suspected or actual terrorists has incorporated 
into CLASS over 73,000 entries, an increase from 48,000 records 
on 9/11/2001.
    We try to work smart. We have big users of automated tools. 
Thanks to the work of Congress, our machine readable visa fees 
have allowed us to invest in technology. We continue to refine 
this technology and to increase connectivity between the 
Department, overseas posts and other agencies.
    Technology can't do it all. We are working with other 
interested agencies on a rational, more targeted clearance 
process that is both transparent and predictable. We are in 
pretty good shape to find the bad guys who have been already 
identified by other agencies and who are included in our visa 
lookout system.
    Dealing with what we don't know is, of course, more of a 
problem. For that we have the security advisory opinion process 
to permit other agencies to take a look at a case before we 
issue. The Department of State for many years has used a 
specialized clearance procedure to attempt to identify visa 
applicants suspected of being terrorists or who otherwise 
represent a security threat. After September 11, as I stated, 
those procedures were greatly enhanced.
    Many of the problems that perhaps have led to this hearing 
resulted from the new initiation of the Condor program. Condor 
is a new in-depth screening process with a counterterrorism 
objective that targets a small subset, about 1 percent or so of 
visa applicants. The Department vets these applications with 
law enforcement and the Intelligence Community before a visa 
may be issued. Although similar in procedure to past programs, 
Condor has taken additional time to complete.
    Why did the process work more rapidly in the past? For two 
reasons.
    First, the volume of visas that require advisory opinion 
clearances has exploded since 9/11, overwhelming the technical 
and personnel infrastructure that the Federal agencies, 
including the Department had in place to handle this work.
    Secondly, although initially Condors were a clocked 
procedure whereby a clearance request not answered within a 
certain period of time was in effect a clearance granted 
automatically that allowed issuance of a visa, we had to 
discontinue this procedure because, given the greater volume of 
cases, our partner agencies were unable to assure us that they 
could complete their checks in the amount of time allotted to 
them under the clock. In the post-9/11 environment we do not 
believe that the issues at stake allow us the luxury of erring 
on the side of expeditious processing.We now insist upon 
hearing from law enforcement before we issue these visas.
    Expanding the clearance universe as we did and dropping our 
clock would, in more tranquil times, have been a process put 
into place over months, if not years, while we built the 
infrastructure to accommodate the work entailed. We did not 
have the luxury of time after 9/11, so we moved as quickly as 
we were able to strengthen the visa process and thereby the 
security of our borders. The result was improved security, but 
at a cost of greatly increased processing times.
    We have, as I will explain, provided more resources to cope 
with this problem, and we are making substantial progress; but 
I do not foresee a return to the rapid processing we enjoyed 
when we thought the threat to our country was less than it 
turned out to be. Nevertheless, the vast majority of our cases 
are completed within 3 weeks.
    In addition to Condor, the Visas Mantis program for the 
review of the visa applications of aliens seeking entry for the 
purpose of study, research, employment or business-related 
travel in sensitive scientific and technical fields has also 
been enhanced. Our first obligation in this review process is 
to ensure that no individual receives a visa who intends to 
come to the United States to unlawfully obtain and export 
sensitive technology or information, especially if it relates 
to the development or spread of weapons of mass destruction and 
their associated technologies. At the same time, we fully 
recognize that the vast majority of visa applicants who seek to 
come to the U.S. For study, research, business-related travel, 
or temporary employment in scientific and technical fields are 
legitimate.
    We are keenly aware of our double-edged responsibilities in 
the areas of national security and facilitation of legitimate 
scientific exchange. This is not an easy balance to strike, 
especially since the 9/11 terrorist attacks, but we are working 
every day along with the other agencies involved in the visa 
review process to find that proper balance. Our caseload in 
this review process has grown substantially. Denials under the 
Mantis program increased from three findings of ineligibility 
under INA 212(a)(3) in 2001 to 30 such findings in 2002. At any 
given time, we have anywhere from 1,500 to 2,000 Mantis cases 
pending in the interagency review process.
    The Bureau of Consular Affairs Visa Office performs 
essentially a coordinating role in the clearance process. Cases 
are submitted by our visa-issuing posts abroad for review 
simultaneously to us, States, Nonproliferation Bureau, and the 
intelligence and law enforcement community. Each reviewing 
entity advises us if it has concerns about a particular case. 
We review the evidence supporting these concerns in light of 
the relevant ineligibility provisions of the Immigration and 
Nationality Act and advise the post processing the case as to 
whether or not a legal basis exists for denying the visa. We 
ensure consensus among appropriate agencies before releasing a 
response to a consular officer.
    In other words, we never advise a consular officer to go 
ahead and issue a visa in a specific case, no matter the sense 
of urgency, while there is an objection from another agency 
that has not been resolved.
    The increase in Visas Mantis referrals as well as similar 
increases in other categories of security-related visa 
referrals has seriously stressed the interagency clearance 
process. As a result, cases on the average are taking longer to 
complete than in the pre-9/11 environment.
    In our capacity as the coordinating agency, the Department 
has made significant progress in addressing these delays. We 
have negotiated agreements with other agencies, implemented a 
number of procedures to streamline the clearance process, and 
reprogrammed staff in order to decrease the turnaround time for 
Mantis clearances. We can now return clearances on cases 
raising no problems in 30 days or less.
    The Department is also making major changes in our use of 
automation in light of the creation of an interagency network 
known as OSIS, or Open Source Information System. We will spend 
close to $1 million over a 1-year period to eliminate telegrams 
from our overseas posts as the vehicle for disseminating cases 
to our Federal partners in the security advisory opinion 
process. We will use real-time data share and eliminate 
virtually all manual manipulation of routine data.
    We expect to field test the new system in the fall and 
deploy it worldwide in January 2004. Our objective is to push 
cases to intelligence and law enforcement analysts as quickly 
as possible and eliminate any time period that a case awaits 
processing by administrative staff. This development in itself 
could shorten processing times by approximately 5 business days 
and better track the status of specific cases.
    The Department has engaged in significant outreach to other 
agencies to eliminate long delays and to assuage the fears of 
the scientific and academic communities. The Department has had 
regular and frequent contact with the Homeland Security Council 
since its inception in September 2001. We have also met with 
various private sector groups, including with representatives 
from U.S. Business firms, the travel and tourism industry, and 
the scientific and academic communities. We participate 
regularly and frequently in interagency meetings convened by 
the White House Office of Science and Technology Policy. We 
also participate in activities with members of the scientific 
and academic communities to share information on our clearance 
requirements and to learn their needs.
    I assure you, Mr. Chairman, that the Bureau of Consular 
Affairs will continue these and any other feasible efforts to 
enhance and expedite interagency review of these cases 
consistent with our overriding obligations to protect our 
borders and prevent weapons of mass destruction and their 
associated technology from falling into the wrong hands.
    I am submitting for the record a written statement that 
discusses in greater detail our role in this visa review 
process.
    Again, thank you for giving me this opportunity to discuss 
the Bureau of Consular Affairs' role in this vitally important 
process. I will be happy to answer any questions that you have.
    But also I want to address the new policy that some of you 
have been talking about, which is requiring additional 
interviews by some of our posts. This policy was changed in 
response to a number of recommendations made by Members of 
Congress, by the GAO, by our own inspector general after 9/11. 
There was a feeling that we should be doing more face-to-face 
interviews in general.
    Before 9/11 the posts abroad had a lot more discretion in 
deciding who it was that they would interview. A lot of this 
was based on workload concerns, and each post had its own way 
of handling the volume of visa requests that they received. 
Some people used drop boxes, some used travel agencies. They 
found a number of ways to try to bring in the applications 
without having to interview people who were not considered to 
be a high risk.
    There are some posts out there that have always had to 
interview a very high percentage of their applicants, close to 
90 percent. These are posts where fraud is a problem, where 
document security is a problem, and for a number of other 
reasons. We have always been doing a lot of interviews in 
certain countries. And so for those countries this new policy 
really makes very little difference.
    Also, in general after 9/11, because of the increased 
concerns about border security, all of our posts worldwide 
began interviewing more people. A lot of the travel agency 
programs such as Visa Express, for example, that existed in 
Saudi Arabia were eliminated after 9/11. And so already people 
are interviewing more people.
    Our embassy in London began interviewing most of their 
applicants almost 2 months ago now, and that in fact has worked 
very well. They have about a 3-week waiting period for an 
appointment, which is about average for around the world. In 
some places it is more, in some places it is less.
    We feel that this new policy is going to give people an 
opportunity to talk to the applicants that we will eventually 
have to be taking fingerprints on. We do have a requirement 
under the Enhanced Border Security Act to begin including a 
biometric identifier with the visa that we issue by October 26, 
2004, and we are going to have to see people in order to take 
fingerprints. And so this is really just one more step down 
that road. This will give posts the opportunity to get used to 
bringing people in to manage the work flow, the appointment 
system, so that when we take that next step it will go much 
more smoothly.
    Chairman Manzullo. Thank you very much.
    [Ms. Jacobs' statement may be found in the appendix.]
    Chairman Manzullo. Our last witness is Mr. Robert Garrity, 
Assistant Director, Acting, for Records Management Division of 
the FBI. Look forward to your testimony.
    Do you have somebody that is going to help with you the 
charts here, Mr. Garrity?
    Mr. Garrity. I do, sir.
    Chairman Manzullo. Okay. Go ahead.

 STATEMENT OF ROBERT J. GARRITY, DEPUTY ASSISTANT 
           DIRECTOR, FEDERAL BUREAU OF INVESTIGATION

    Mr. Garrity. Thank you, Mr. Chairman and members of the 
Committee.
    My goals today are to inform you of the FBI's visa name 
check process, provide you with an accurate assessment of how 
well this process is functioning, and describe to you the 
measures the FBI is taking to continually improve the process.
    First, I want to emphasize to you that the FBI is sensitive 
to the impact delays in visa processing may have on business, 
education, tourism, this country's foreign relations and 
worldwide perceptions of the United States.
    With these considerations in mind, the FBI is working 
diligently with the State Department towards the common goal of 
improving both the expediency and the efficiency of the visa 
clearance process. At the same time, the consequences of the 
FBI mission on Homeland Security requires that our name check 
process be primarily focused on an accurate and thorough 
result. This means that there are instances when the FBI review 
of a visa request must require as much time as needed to obtain 
an unequivocally correct result.
    The National Name Check Program has a mission of 
disseminating information from the FBI's central records system 
in response to requests submitted by Federal agencies, 
congressional committees, the Federal judiciary, friendly 
foreign police and intelligence agencies, and State and local 
criminal justice agencies. For all except law enforcement 
requests, the program is to be operated on a fee-for-service 
basis, with the beneficiary of the name check paying for it, 
not the American taxpayers.
    The central records system contains the FBI administrative 
personnel and investigative files. The program has its genesis 
in Executive order 10450, issued during the Eisenhower 
administration. That Executive order addresses personnel 
security issues and mandates national agency checks as part of 
the pre-employment vetting and background investigation 
process.
    The FBI, of course, is the primary national agency check 
conducted on all U.S. Government employees. From this modest 
beginning, the program has grown exponentially, with more and 
more customers seeking background information from FBI files on 
individuals before bestowing a privilege, whether that 
privilege is government employment or an appointment, a 
security clearance, attendance at a White House function, a 
green card or naturalization, admission to the bar, or a visa 
for the privilege of visiting our homeland. More than 70 
customers regularly request an FBI name check. Two specific 
visa request categories, Visas Condors and Visas Mantis, are 
relevant to the hearing today. In addition to serving our 
regular governmental customers, the FBI conducts numerous name 
searches in direct support of our own counterintelligence, 
counterterrorism, and Homeland Security efforts.
    I want to talk a bit about the exponential growth we have 
experienced. Prior to September 11th, the FBI processed 
approximately 2.5 million name checks a year. In fiscal year 
2002, that number increased to 3.2 million. For this year the 
number to date already exceeds 5.6 million, and we project that 
we will go to 9.8 million requests this year. That represents 
an increase of over 300 percent; as you can see on the chart 
here, our explosive growth from 2.5 to what we expect to be 9.8 
million this year. Of that number, 200,000 of them are visa 
name checks, including 75,000 Visa Condor requests and 25,000 
Visa Mantis requests.
    I can tell you, Mr. Chairman, that with the advent of the 
new visa screening requirements in late 2001, specifically the 
Visa Condor program, the FBI was overwhelmed by the increase in 
the names to be checked. We did experience a backlog and visas 
requested in the spring and summer of 2002 were delayed beyond 
the time period that travelers had anticipated. We have 
significantly reduced the backlog and have worked together with 
the State Department to ensure that any old visa requests have 
been accounted for and processed. The days of what some people 
would characterize as a unreasonable delay have now passed us 
by.
    Our resolution rate, we have approximately 85 percent of 
our name checks were electronically returned to the State 
Department within 48 hours as a ``no record,'' meaning the FBI 
had no information on that individual. There is nothing 
contained in our files. By agreement with the State Department, 
a ``no record'' equals no objection.
    The substantive investigative divisions, which are the 
Counterterrorism Division, the counterintelligence Division, 
the Criminal Investigation Division, and the Cyber Division, 
must review any names that we get where there is a record of 
the individual, unless it is an obvious no adverse information.
    Because a name and date of birth are not sufficient to 
positively correlate the followed individual, sometimes 
additional review is required. A secondary manual name search 
usually identifies an additional 10 percent of the request as 
also having no record; meaning that 95 percent of the time we 
were able to respond to the State Department that we have no 
record of the individual, and this is usually accomplished 
within 1 week of receiving the request.
    Now, the remaining 5 percent are identified as possibly 
being a subject of an FBI record. That FBI record must now be 
retrieved and reviewed. If the records were electronically 
uploaded into our electronic recordkeeping system, it can be 
viewed very quickly by the analyst. If not, the relevant 
information must be retrieved from the existing paper record. 
Review of this information will then determine whether the 
information is identified with the subject's request. If not, 
the request is again returned as ``no record.'' .
    The information in the file is reviewed for possible 
derogatory information. Less than 1 percent of the requests are 
identified with an individual with possible derogatory 
information. These requests are forwarded to the appropriate 
FBI Investigative Division for further analysis. If the 
Investigative Division determines there is no objection to the 
visa request, the request is then returned to us and we send it 
back to the State Department, advising no objection.
    If there is an FBI objection to a visa request, the 
Investigative Division that has the expertise is required to 
then prepare a written security advisory opinion that we then 
forward to the State Department, stating that we have an 
objection to someone entering the country. We have, over time, 
identified people who have used the visa process to enter the 
country who came here for nefarious purposes or intended to 
come here for nefarious purposes.
    As the name check processes for 70 other agencies, the name 
check system accurately monitors the status of visa requests 
and the name check process. The systems metrics are a dynamic 
tool allowing the FBI to identify when to add additional 
personnel resources to the process. It also gives us a tool to 
determine when the name check process is causing delays for 
visa requests. Our goal is to have all requests completed 
within 120 days.
    This next slide will also show you the current status of 
the visa name checks. This status was taken just last week. 
Within the last 30 days, the FBI has received 5,146 requests. 
We have resolved all but 143 of those, for a 97 percent 
resolution rate. For Visa Mantis requests, we have received 
1,200 requests within the last 30 days, and we have resolved 
over 1,000 of them, again for an 85 percent resolution rate 
within the last 30 days.
    Most name check requests that are over 90 days old are the 
result of the time required to retrieve and review the field 
office file. Some delay has also occurred at the analyst's 
desk, but this is to be expected. These analysts are assigned 
to the Investigative Division and are primarily assigned the 
analysis of intelligence reports from around the world in order 
to support ongoing investigations or to support the flow of 
intelligence to policymakers.
    As is well known the FBI does not have as many intelligence 
analysts as we need, and they are significantly overassigned in 
the primary responsibilities. These are the best professionals, 
however, to review information in our records and to then make 
an informed decision on whether a requester of a visa 
represents a threat to our homeland or is interested in 
illegally acquiring our targeted technology. Nevertheless, the 
FBI resolves 99 percent of all types of visa requests within 
120 days. The FBI believes these numbers are the best manner to 
appropriately determine whether there are substantial delays 
both in time and in numbers.
    As I have said, during the spring of 2002, the FBI was 
unable to adequately account for visa request processing times. 
This is no longer the case. This was accomplished through the 
clarification of the FBI name check database, through software 
modifications that allowed development of detailed metrics and 
the development of an internal FBI tracking system for our 
security advisory opinions. With these metrics the FBI can 
allocate resources as necessary to meet requirements.
    As I have already said, the FBI will closely stay on the 
visa name check procedures. These past 6 months have seen 
considerable improvement in the coordination of visa name check 
processing. The FBI recently increased the name check personnel 
from 75 employees to 125 employees, an increase of 65 percent, 
all taken from within existing resources. We have brought in 
additional personnel from the field on a TDY basis to help us 
clean up the backlog. We have significantly reduced backlog and 
are continuing to work to do everything we can to improve the 
process and get State our objections, if any, as quickly as 
possible.
    We recognize we have an explosion in numbers and the 
requests exceed the estimates that we had originally 
anticipated. We are in the process of developing interim 
improvements to minimize the manual submissions by all agencies 
to increase efficiency for all of our customers.
    One of our Achilles heels, if you will, sir, is we have a 
decentralized recordkeeping system. FBI has paper records in 
265 locations around this country. When we get a hit, we have 
now got to go retrieve that file and bring it here or have an 
agent or employee in that other field office summarize it for 
us and give it to us. That is one of the problems that we have, 
locating the file and getting it here, and we are currently 
working within the administration to plan and develop a new 
centralized recordkeeping system to bring all closed files into 
the mid-Atlantic area.
    Thank you, sir.
    [Mr. Garrity's statement may be found in the appendix.]
    Chairman Manzullo. Let me ask a very basic question, and 
Ms. Jacobs, maybe you could start with the answer and then Mr. 
Garrity could pick it up.
    An individual goes to an office in Beijing seeking to get a 
visa to come to Mr. McHale's company, and typically that person 
would have an engineering background and the visa application 
would state that he is coming here to buy a piece of machinery.
    Could you walk us through that process, and then what 
happens to the application et cetera?
    Ms. Jacobs. Okay. The applicant would apply at the nearest 
consulate in China. And every case that the visa officer looks 
at is decided on the individual merits of the case. And so the 
applicant would have to come bring in passport, photo, the 
required application form, and then any supporting documents to 
support the case that the applicant had. For someone who was 
coming here to conduct that type of business, the consular 
officer would be looking at whether the person was qualified 
for that visa. And so first of all, our officer would have to 
make sure that they, you know, confirmed the identity of the 
applicant, and then the officer would be looking for evidence 
of ties to China in this particular case that would cause the 
applicant to return to China after a temporary visit to the 
United States.
    If the applicant appeared to be someone who was in fact 
just coming here for temporary business, the travel was 
legitimate, then the officer would look at the type of 
business, the type of technology involved; and if it involved 
any of the technologies of concern that are on our technology 
alert list, then the officer would have to make a decision 
about whether that was the type of case that needed to be 
referred back to Washington agencies for further check.
    I have heard others today talk about the Technology Alert 
List, the fact that it is too broad, and couldn't more training 
be done of consular officers. And that is an issue for us. Most 
consular officers are not experts in these various fields and 
so we do have to make the list fairly broad. But our FSI, the 
part of the State Department that trains our officers is--in 
fact, we do have a course during which officers, before they go 
out to the field, are trained on how to use this list, becoming 
familiar with the technologies on it, talking a little bit 
about, you know, what the concerns are. So they do have that 
training before they go out. And also, at our larger posts, 
where we have a science attache or someone who has that type of 
background, then the officers are always able to refer cases to 
those people to get some expert advice as to whether there are 
concerns that need to be referred back to Washington.
    So it is sort of a lengthy process. Every case is 
different. Every case is decided on its individual merits, but 
those would be sort of the steps taken for that particular type 
of case.
    Chairman Manzullo. Mr. Garrity, do you want to pick it up 
from there?
    Mr. Garrity. Yes, sir. The consular of the embassy in China 
will send a cable to the State Department and a simultaneous 
cable to the FBI. We receive the cable. We then parse the name 
and the date of birth off of that cable and electronically load 
it into our system. It is run against our universal indices to 
see if we have any indexed name and date of birth identical to 
that one.
    As I mentioned in my testimony, within 48 hours we can 
usually, 85 percent of the time, go back to State and say we 
have no record of this individual. If we get what is known as a 
hit--our system is a very robust system and it tries the names 
a lot of different ways and it tries dates of birth lots of 
different ways. If we get a hit, meaning that we think we have 
something, we now have to have human intervention; and they 
will take a look at the indices hit to see if they are able to 
resolve it by just looking at the indices reference. Sometimes 
they can do that and we don't have to pull the file. If we do 
have to pull the file, we pull the file again to see whether or 
not this individual is identical with the person seeking the 
visa. Oftentimes it is not, and we are again able to go back to 
the State Department and say we have no record; this took 
longer than normal because we thought we had somebody, but we 
didn't.
    If it is identical, we do have a record, now we have to 
have somebody pull the record and take a look at it to see what 
it contains. If it is nothing more than a file jacket full of 
visa requests, we send it on. This person is a well-known 
traveler. We have no objection, and they can come into the 
country.
    We mostly have identical hits on people who have come to us 
because they were the subject of an investigation, either the 
subject of a counterintelligence investigation or a 
counterterrorism investigation, and then we have to send it to 
the substantive division, the experts. They look at it and they 
make a decision as to whether or not the presence of this 
individual in our country represents a threat to us. And that 
is the process.
    Chairman Manzullo. Okay, thank you. Mrs. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Ms. Jacobs, you mentioned before the General Accounting 
Office report of October 2002, and in that report they stated 
that there is a clear lack of guidance among the posts in the 
level of scrutiny for visas applications and in factors used to 
deny such application. What have you done to fix it?
    Ms. Jacobs. One of the things that we have done in the last 
few months is to begin sending out to all of the posts, 
standard operating procedure messages which tell the posts on 
various issues how they should be doing things. It is quite 
true, back when the GAO did its study, what they found was that 
all of the posts were doing things a little bit differently. 
And we took notice of that, and I think now, through the 
standard operating procedures, have addressed a number of the 
concerns that were raised by the GAO.
    Ms. Velazquez. And this question is for both Ms. Jacobs and 
Mr. Garrity.
    In that same report, the General Accounting Office also 
mentioned that a bigger problem is that there still exists a 
dispute among the departments, specifically the Department of 
Justice and the Department of state, regarding how much 
evidence is needed to reject an applicant on the basis of 
suspected terrorist ties. In other words, the Department of 
State and Justice have different views on how to apply the INS 
terrorism provision section 212(a)(3)(b) to visa applications. 
So can you explain if that dispute still exists?
    Ms. Jacobs. I am not sure that it was ever really a 
dispute. I know it has been characterized that way. There was 
some discussion at one point about the level of evidence 
needed, and we did explain that we did have to receive 
information in order to make a determination under 
212(a)(3)(b).
    There is another section of the law, section 306, that 
talks about nationals from state sponsors. And that discussion 
is also taking place about section 306. It is not a real 
dispute. It is simply trying to find the proper mechanism and 
procedures for us to get the evidence that we need in order to 
make a denial.
    Mr. Garrity. I would agree with that. One of the things 
that we are obligated to do is inform the State Department, to 
a degree that is satisfactory to the Secretary of State, why we 
object to the issuance of a visa. And oftentimes the 
information in our file, there is some smoke there, and we have 
some reason to be concerned about allowing a person to enter 
the country, but we may not have precisely the information they 
would like to have to satisfy their requirements under the law.
    Part of it I think also is an education process for our 
agents. And we have the people who are doing that. We have 
given them some training in the Immigration Nationality Act so 
they know what criteria, what factors they have to be looking 
for in preparing the security advisory opinion.
    Ms. Velazquez. If any of the other witnesses have any 
comment to that question--so what you are telling me today is 
that there is no dispute between the Department of Justice and 
the Department of State regarding the interpretation of the 
law.
    Mr. Garrity. You must be kidding.
    Ms. Velazquez. Is that a factor as to the lengthy time it 
takes to approve or deny those visas?
    Mr. Garrity. I believe that when we raise an objection, the 
State Department honors that objection. If we have not provided 
them with sufficient information, they will come back to us and 
we get into a give-and-take dialogue, and we may have to 
bolster our argument. I do not believe that they will allow 
someone to enter the country until we are satisfied. I don't 
think it is a situation where if we raise an objection they 
will unilaterally say, ``Well, not close enough; we are going 
to have to let the person enter.'' I think that there is 
respect on both sides to at least allow us to continue to make 
our argument, and I believe that is the state of the situation 
right now.
    Ms. Velazquez. What would you say to these people who say 
that the FBI is the main hold on the visa process today?
    Mr. Garrity. The main hold? We are certainly the most time-
consuming portion of the process. If by ``main hold'' you are 
equating that with the time-consuming process, that is an 
accurate statement. We have a significant burden to go through 
our files to identify anybody who might represent a threat to 
the country.
    Ms. Velazquez. Thank you. I know that we all care about the 
security of our Nation. But we need to strike a balance in 
terms of reaching that goal and also understanding and having 
the sensitivity of what it takes to make sure that we achieve 
that goal but, by the same token, we do not impact the small 
businesses that are here represented by these people today. So, 
if you are doing everything that it takes in the General 
Accounting Office, they criticize the fact that there is not 
uniformity in terms of the training that is provided to the 
people that are working on the consulars, on those posts. And 
we need to make sure that we address that issue. Do you have 
the manpower? Is the budget is there?
    You have more responsibilities, because when people come to 
testify on the budget requests or budget submission, it seems 
like everybody is saying, yes, the budget that was submitted, 
coming from the White House, is adequate. Yes.
    Ms. Jacobs. I think it has taken a while for us to get 
additional resources, the resources needed to handle the 
clearances. In particular for our part, the office within the 
Visa Office that does all the coordinating of the clearances, 
has added additional personnel. We have actually formed teams 
around the various types of clearances. We have a team that 
works on Visas Condor. We have a team that works on Visas 
Mantis.
    So, yes, it did take us a while, I think, to ramp up 
resources. We do have a plan at the State Department for adding 
around 185 consular officers between now and fiscal year '05 to 
get those people out.
    Ms. Velazquez. Can you explain----.
    Chairman Manzullo. I have got to get Mr. Schrock, and those 
bells are going to go off in about 15 minutes, and I want to 
get as many questions in as possible. So let me go to Mr. 
Schrock. If we have more time, we can come back.
    Ms. Velazquez. Sure. I just wanted to ask her, you know, 
she is saying that the resources--it has taken awhile. Can you 
explain that?
    Chairman Manzullo. Let's move on here. I want to get 
everybody in before the bells go off.
    Mr. Schrock. I am going to follow up on that, Ms. 
Velazquez.
    Chairman Manzullo. Oh. Okay, fine. Thank you.
    Mr. Schrock. Let me first of all thank you for being here. 
Let me say that I don't think the visa issue just started in 9/
11. I have been working two cases since the day I was sworn in 
in 2001, and we still don't have them resolved. I got so 
frustrated earlier this week that I finally picked up the phone 
and called the folks at the State Department, and suddenly they 
called back and suddenly they called my person down in Virginia 
Beach and screamed at him for getting me involved. But I am 
going to start getting involved, because if the Member's voice 
on the other phone is going to get some of this stuff resolved, 
then daggone it, I'm going to do it. Because when I look at 
people like Mr. Shapiro, Mr. Storie, Mr. McHale, Ms. Yanni, Mr. 
Reinsch, and see the problems they are going through, they are 
the ones that are creating the legitimate jobs in this country 
and trying to keep their businesses going, and it is 
bureaucracy run amok that has caused these people to fall on 
hard times, and we have got to change.
    I am not trying to be ugly to you two. But I mean it is 
just the systems you work in that are not being responsive at 
all. And Ms. Yanni said it right: the redundancies. I mean, my 
gosh, that is probably half of the problem right now. If they 
would knock out the redundancies, that would get these things 
approved quicker.
    Because my time is running out, I know there are many other 
groups in this room that have tried to be a part of the reform 
process. And I know for a fact that the American Hotel and 
Lodging Association and the Travel Business Roundtable that are 
very important to the Virginia Beach area where I live have 
tried to be involved. They have written Secretary Powell.
    Mr. Schrock. No one has answered them. They have ignored 
it. It is like we don't--we will tell you what the input is 
going to be, and you are going to have to abide by it.
    Because you need to be listening to these kinds of people. 
They are the ones that are living this nightmare every single 
day, and they are the ones that have to try to keep food on 
people's table and keep jobs in this country. And if we are 
losing it to other countries, then I think the government which 
doesn't create jobs creates havoc, creates trouble, gets in 
people's way, certainly needs to step out of the way and let 
these people do the right thing.
    I would like you to comment on this, and I want to follow 
up on what Ms. Velazquez says, too. You know, Ms. Jacobs, if 
you can give this Committee an estimate of the personnel, 
facility equipment, and the training resources your posts will 
require to officially implement a new 100 percent interview 
requirement, do they have what they need?
    And I think Mrs. Velazquez is right. People come to us and 
say they have what they need. They have what they need. And 
then we hear the horror stories of these fine, great people and 
think obviously they don't. There is something wrong somewhere. 
That is a lot to throw at you, I know.
    Ms. Jacobs. Okay. We actually--it is not going to be 100 
percent interview rate. At some posts it is already around 90, 
but it won't be 100 percent for any post because there are 
general exceptions for every post.
    As far as adequate resources, I mean, I could get back to 
you with sort of a report on the plans that we have over the 
next few years. The truth is with a lot of these post-9/11 
measures, is that we have had to put things into place before 
we could get adequate resources in place.
    Mr. Schrock. I don't doubt that, yeah.
    Ms. Jacobs. And just on the waiver of personal appearances, 
the new policy, because it takes anywhere from two to five 
people to get new positions and staff out to the field, we just 
couldn't wait that long to do it. That doesn't mean we are just 
going to let things collapse. We are going to have TDY 
assistance sent to posts. We are going to give the posts that 
are most affected the help that they need to get through this 
difficult time.
    Mr. Schrock. And I understand if there is another attack we 
are going to be screaming at you guys. And I understand that. 
But there has got to be some rational process that doesn't 
allow--you know, that allows Mr. Storie and Mr. McHale--I was 
born and raised in Middletown, Ohio, so I know your company, 
and I went to school in West Virginia and I know your company. 
And it is Kanawha. We have just got to help these people.
    Small business is what it is about and we are killing by 
some of these processes. But I would be the first one to scream 
if another terror attack occurred, and we have to try to stop 
that.
    Given what you have said, Ms. Jacobs, about all these 
significant new procedures, why does your recent budget request 
not increase resources sufficient to efficiently implement the 
visa interview requirement you knew you were about to impose? 
Because I think it would have fallen on receptive ears up here 
if you had come up here, because everybody's trying to do the 
best they can to keep our borders safe while at the same time 
keep commerce rolling, and it seems like we are slowing down 
commerce almost to a fault.
    Ms. Jacobs. I am not sure that we knew about all these new 
policies at the time that we made our last budget submission. 
Certainly the one that will come up next will include a lot to 
cover this.
    Mr. Schrock. Good. And I know we create a lot of stuff for 
you all, too, and sometimes I think we go overboard on this; 
but if we know what the needs are, I think this Congress would 
be certainly willing to help with that, because I pity these 
people who are in business for themselves here. We have got to 
stop that.
    Ms. Jacobs. I think if there is anything that we, the 
agency working on this process, could do that would make this 
much more acceptable to people, it would be to introduce some 
predictability back into the system. And I am very committed to 
that. I am trying whatever--even if it takes a month to get a 
visa, if you know in advance it is going to take you 1 month to 
get it, it is a lot easier to live with than being kept in 
limbo.
    Mr. Schrock. Strung out there, yeah. Because this one young 
man from the Philippines, it is going on now--actually my 
predecessor dealt with it and I have been dealing with it now 
2-1/2 years.
    Chairman Manzullo. Why don't you call Mrs. Jacobs after the 
hearing?
    Mr. Schrock. I intend to. When you hear my name, it is me. 
Thank you.
    Chairman Manzullo. I appreciate that. I think we should 
remind ourselves that Mr. Garrity and Ms. Jacobs are under this 
workload because of legislation passed by the United States 
Congress and signed by the President. And so, it is both.
    Mrs. Napolitano. Oh, really.
    Chairman Manzullo. And they are working through 
legislated--the mandates on. It is nothing that they brought 
about themselves.
    Mr. Case.
    Mr. Case. Thank you, Mr. Chair. I actually share the 
sentiments of my colleague over here, the frustration, 
especially for my constituents. It has only been a few months 
for me, rather than a couple of years in his case, but a 
tremendous amount of my workload on the case work side is just 
sorting through the visa process for people that are interested 
in coming in.
    For me in Hawaii, it is really three categories, all of 
which have been addressed in the testimony. But number one, of 
course, is tourist visas. I mean, if we don't get tourists in 
basically, we shrivel on the vine and die. And that was alluded 
to. So I hope that is particularly a part of your thinking.
    I guess the second part would be nonimmigrant visas from 
countries such as the Philippines that have very close 
relationships with Hawaii, and people who just want to come in 
for a little while and then go back.
    And the third, of course, would be the business-related 
visas and our connection with Asia.
    So I very much agree with the gentleman and the testifiers 
who spoke to the issue of business-related temporary 
immigration from Asia, particularly China. We have a plane that 
is available to fly between Shanghai and Honolulu and not too 
much activity on that plane now, and it is not SARS; it is 
visas.
    Let me ask you this because if I am hearing the testimony 
correctly, on the--there are two sides to this. The first side 
is the consular side and the second side is the security side.
    If I can kind of be simplistic about this, the consular 
side, I think, is concerned mostly with are these people 
legitimate temporary immigrants and are they going to go home? 
I don't know if that is a fair statement. And the second side 
is--and if I understand the testimony correctly, that 
determination is made by State. And if it is made favorably, 
that we are going to admit, if the security side checks out, 
then you send it over to the FBI; is that right? Is it 
sequential?
    Ms. Jacobs. Yes. Well, there are several reasons why a case 
would be referred back to Washington. Applicants do have to get 
over that initial hurdle of whether they are going to return 
after a temporary visit here. Sometimes there is a lookout 
entry in our visa lookout system that requires the case to come 
back to Washington for review. Sometimes the applicant is 
subject just to a general review either of Visas Condor, Visas 
Mantis, or some other check.
    But, yes, we have to make a decision that the person is 
otherwise qualified for the visa before we send something back 
here. In other words, if we are going to deny a visa because, 
you know, someone is an intending immigrant, then we would not 
send that case back here.
    Mr. Case. Okay. But let me focus on the nonsecurity side of 
it, because I think that if I am not mistaken, sir, really that 
is a resource question. That is, a question of are sufficient 
resources being made available to do these security checks fast 
and comprehensively? And it is a management question. It is, 
you know, pulling those computers--you know those 200-and-some-
odd sources you talked about being all over the United States--
together into one database and being able to punch through 
pretty fast. I mean, is that about what it amounts to?
    Mr. Garrity. Yes, sir. We have increased our resources by 
65 percent from within our own personnel, and I have just 
ordered another increase which means that we will have a 100 
percent increase in resources. We have doubled our resources in 
the last 2 years to do this.
    Mr. Case. Okay. So let me leave that to the side and come 
back to State, then. Now, from State's perspective it is also a 
resource problem, because these legislative mandates have given 
you higher requirements of double-checking people, and you are 
struggling with keeping up with that workload, right?
    Ms. Jacobs. Yes.
    Mr. Case. Okay. Now, what about the legislative mandates 
themselves? Do we need to go back and double-check them? I 
mean, have we gone overboard from a consular perspective, not 
from a security perspective? But have we gone overboard in 
terms of trying to keep people out of this country, and in the 
process put so many hurdles up that essentially we are just 
grinding legitimate nonimmigrant visas to a halt? Because that 
is my sense, you know, and I don't know all the details; you 
know them, the presumption, the presumption that is written 
into the law. I mean, could we go back and revisit the 
presumption and say, hey, maybe we are going to take a chance a 
little bit more on whether people are going to go back to, you 
know, to their country of citizenship, and is that a legitimate 
question for us to ask?
    Ms. Jacobs. That would certainly be something that Congress 
could look at section 214(b) of the INA. It has come up in 
other discussions about students and others who come here who 
do have to show that they are going to go back home after their 
temporary stay in the States.
    As far as the other legislative mandates, I think the 
crucial factor is going to be for all of us, all of us who have 
those mandates, to coordinate, to talk to each other, to share 
data; when we are setting up new technologies and new systems, 
to make sure that they work well together, they talk to each 
other. I think that is the answer to all of this. I think it--
--.
    Mr. Case. But who--excuse me. Who does State have to 
coordinate with? That is all internal. That is a determination, 
an internal State determination as to whether primarily--the 
primary inquiry is are they going to go home after they are 
finished with their business? That is all within State right.
    Ms. Jacobs. Right. That is right. That is the decision of 
the consular officer abroad.
    I was addressing the other question you had about whether 
you thought that maybe we had gone overboard with the different 
checks and whether we were discouraging people from coming 
here. And I think I would say in answer to that, that I think 
we need to look at all of these mandates together to see how 
they affect the individual travelers and make sure that all of 
the agencies involved are working well together to make that a 
very seamless process.
    Mr. Case. Well, I am not sure we have gone overboard on the 
security side. I don't want to leave you with that impression 
because I--you know, the world is what it is today, and from 
that perspective it is just getting the security clearance 
finished as fast as possible.
    I guess what I was saying in terms of going overboard was 
more on the consular side, that the extra hurdles that we seem 
to have put up that are a legitimate policy call by Congress 
and the administration, again the degree of--you know, what it 
takes for somebody to show that they are going to go home or 
not.
    Chairman Manzullo. We have gone overboard on the time at 
this point.
    Mr. Case. Okay. I am sorry.
    Chairman Manzullo. Okay, Mr. Chocola. I would advise the 
rest of the witnesses, if there is any thing that you want to 
add to the questions that have been posed to Mrs. Jacobs and 
Mr. Garrity, just raise your hand so that we can--I should have 
announced that about 20 minutes ago. I am sorry on that. Mr. 
Chocola, please.
    Mr. Chocola. Thank you, Mr. Chairman. Keeping with the 
theme, I think my questioning will be directed to Ms. Jacobs 
and Mr. Garrity.
    Before coming to Congress, I lived the life of the folks on 
your left there. I was with a business that about 40 percent of 
our business was outside of the United States. We had 
operations in five or six other countries, and have lived the 
frustrations and some of the nightmares that we heard today. 
And a day doesn't go by that I don't talk with a constituent 
that is in the manufacturing business that is competing with 
China on a very difficult basis. And so when we get people from 
China that want to come here to buy things, certainly that is a 
very positive thing, and hopefully we can facilitate the 
process.
    But is there anything that the business community, that has 
every incentive to do this quick, help you that you have every 
incentive to do it right? Is there anything the business 
community can do in an appropriate area--that is, a nonsecurity 
issue, maybe a nontechnical issue, some of the clerical work? 
Can the business community do any of that for you to expedite 
the process?
    Ms. Jacobs. I am not sure about the clerical work, but 
certainly if you can get the word out that people should apply 
for visas as early as possible, just to make sure that if you 
know there is going to be a check required that we can get it 
done in time. And also to provide the applicants with the 
documentation, the information that they need to show what it 
is that they are going to be doing in the U.S.; letters of 
invitation, you know, information about the trip to the U.S. 
That will help the consular officer know exactly what it is the 
applicant is going to do.
    Mr. Reinsch. May I make a suggestion? I have a suggestion 
that I think business is prepared to do something that they 
might find helpful, and that is attest to the bona fides of the 
applicants and assume some degree of responsibility for them, 
particularly for the technology programs. These are people that 
are coming here to look at a product, or they are Mr. McHale's 
overseas employees who are coming here. It seems to me the U.S. 
Business can say, yes, they work for us; they are our 
employees; they are reliable people; we will assume 
responsibility for them while they are here; we will make sure 
they don't have access to technology they are not supposed to 
have.
    Now, if the business is prepared to do that--and I am 
speaking for some of our members, which are for the most part 
larger businesses, they are prepared to do that. I guess the 
question for the government is, are they prepared to accept 
that and crank that into their process?
    Mr. Chocola. Mr. Shapiro, I think, mentioned the concept of 
a fast-track visa program. Does that have any merit in your 
view?
    Ms. Jacobs. We actually almost have a fast-track visa 
process. Something that is important to remember is that the 
people that are subject to any kind of name check, the 
percentage is very, very small compared to the actual number of 
visas that we process. Last year we issued about 6.2 
nonimmigrant and immigrant visas. About 2--less than 2.5 
percent of those people were subject to some kind of name 
check, which meant that the case had to come back to Washington 
for review.
    So for the vast majority of applicants, once they get their 
appointment provided, they have everything in order and they go 
and are found qualified, they will get their visa in a day or 
two. And that is around 97 percent of the people who apply for 
visas. Yes, some people will be found ineligible for various 
reasons under the Immigration Act. But it is a very small 
percentage when you look at the overall numbers of people who 
are actually subject to these different checks.
    Mr. Chocola. Mr. Shapiro, did you have----.
    Mr. Shapiro. Well, there are three risks I think we are 
talking about. One is the risk of imported terrorism. Another 
is learning about stuff that is secret, and they may not be 
that friendly a country. And the third is not returning to 
their homeland.
    With China, I don't--my uninformed opinion is that they are 
not the greatest terrorism threat. The concern seems to be that 
they are learning about stuff they shouldn't, or they will not 
return. And what I am saying, since China is the big 
opportunity, the big market, the big competitor, let's look at 
China differently. Focus on China and say, let's separate those 
two threats, and if the threat is that they are not going to 
return, business can take some risk.
    The other side is if they are, you know, let's also have a 
look at what the real technological risk is, because we are 
losing great opportunities here and American businesses are 
suffering, there is no question about it.
    Mr. Chocola. Thank you, Mr. Chairman.
    Mr. Storie. To further that point, the technological risk 
is minimized in many cases that we have already approved export 
licenses to ship the products to China, but we just can't get 
the consumer here to buy off on the contracts that they have 
already signed. So if we have already got an export license 
approval in place, that is clear groundwork that has already 
been laid that says, yes, those people should be coming here to 
buy off these products so that we can ship the product that we 
signed the contract for. We should not have those instances 
held up at all.
    Ms. Millender-McDonald. Mr. Chairman, a point of inquiry. I 
have been told that the bell will not go off in 10 minutes as 
we had thought. It is going to be an hour.
    Chairman Manzullo. It is going to be an hour. Yeah.
    Ms. Millender-McDonald. Could we not have the non-
bureaucrats to do their responses as they have begun to do, and 
that will be on your time and not mine?
    Chairman Manzullo. That is correct. You are correct. Mrs. 
Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chairman. I totally agree. 
And I agree also with my prior colleagues' comments, all of 
them on both sides of the aisle, simply because I get the 
report from my business people that they are having a very, 
very hard time trying to bring buyers into California--because 
I represent part of California--to be able to do business. And 
it is unfortunate that this has happened since 9/11.
    But I would suggest that biometrics won't be available 
until 2004. Why is it taking so long? And will it then cover 
all of the agencies involved so that all are in sync?
    My other question went in one ear and out the other. Will 
it tie into the consular offices so that they can be able to 
have one-stop shop, so to speak; to be able to say to the 
agency, we are gathering information for visa purposes or for 
the terrorism, whatever, so that they will not have to go from 
one agency to waiting on the other and on the other?
    Secondly--and I realize and I agree with my chair--the 
funding issue. If there weren't enough, regardless of whether 
you thought they were going to have additional impositions on 
the work requirements or on the expansion of the amount of work 
you have to do by sharing with other agencies or whatever, I 
just don't see why there was not an increase requested in the 
budget. Where as we have--what is it--a $300 billion tax cut, 
we are not putting in enough money to protect our businesses so 
that we can continue working on increasing the economy in the 
United States. And this is where it is hurting, is we are not 
allowing our businesses to take advantage of the fact that a 
lot--and I have been in many countries who say, We want to buy 
U.S. business but we can't get there.
    So somehow we need to be sure that you have the funding to 
be able to get the equipment, so that you have the software and 
you are able to convert those 265 paper locations into 
computerized entries, so you are able to do it immediately. If 
you are going to do biometrics, why not until 2004? Why not 
now? What is it that is preventing us from getting there? And 
do they acknowledge it is partly it has been there, because it 
is being used in some areas?
    Mr. Garrity. The biotechnology, the biometrics we are 
talking about is fingerprints primarily.
    Mrs. Napolitano. Correct.
    Mr. Garrity. And fingerprints are no longer the rolled 
fingerprint on a piece of paper. They are now done 
electronically. They are digitized and sent to the FBI, and it 
is an issue of getting that equipment in every consulate 
embassy around the world that is going to need that equipment. 
I think it is an issue of funding and getting equipment there.
    Mrs. Napolitano. And why were we not able to get that 
request into the budget or at least partially into the budget 
to increase it and become more prepared?
    Mr. Garrity. That I can't answer for you. I don't know.
    Mrs. Napolitano. Could I get an answer in writing, please?
    Mr. Garrity. Sure.
    Is it a State Department issue, I mean?
    Mrs. Napolitano. I don't know; you tell me.
    Mr. Garrity. The FBI is not going to put the equipment 
there. I mean, the State Department is the one who needs to 
have the equipment, and it is a result of the Enhanced Border 
Security Act that is requiring this.
    Mrs. Napolitano. I know. Again, we go agency jurisdiction. 
We need to be sure that all agencies are in sync to be able to 
get to the same point where we all feel good.
    Now, we talk about the southern border. I was born and 
raised in a border town, so I know; I was almost picked up a 
couple of times, because I happened to have my birth 
certificate with me, because I do not look Anglo or American, 
okay? And I am telling you, I get very upset with these things 
about border issues.
    Yet, I hear--and this came from an individual who sat next 
to me. I did immigration for 3 years' study in California. 
Canadians were coming up to me: I have been here 7 years 
illegally, nobody has ever asked me for any paperwork, or any 
identification other than driver's license.
    So we have a double standard for some countries than for 
others. And I think we need to keep in mind the point of the 
visas is to allow people within the provisions that we in 
Congress have allowed to come to the United States for many 
reasons. Right now we are in an economy crunch. We are 
suffering. And we are further putting the screws to our 
businesses. And I tell you very honestly, that is what it is 
from my vantage point. And I have had some of my businesses 
that I have had to call your office to say, okay, guys, where 
are we? Is it good or bad? Just give me an answer. I am not 
asking you to do it one way or the other. Just give us an 
answer. Get this person off the dime. And if you hear my 
frustrations, it is because I am frustrated.
    Mr. Garrity. Have we been responsive each time you called? 
Because I mean, that happens.
    Mrs. Napolitano. The day the bank was going to forgo his 
loan was the day we got the answer from your office. Thank you 
very much. It did work.
    Mr. Garrity. Okay. The issue of resources is one that, you 
know, I talk about in my testimony. We do have 265 locations. 
It is going to be an enormous amount of resources to get all of 
those files into one place and digitize them. We are working 
through the administration to put that into the budget process. 
We are requesting that. That is something that we have come to 
recognize we need.
    The biometrics is something that is, as you know, in the 
Enhanced Border Security Act is, something that the State 
Department has to implement, and we will be the recipient of 
those fingerprints. And it is designed to ensure that the 
person who applies for a visa anywhere in the world is the 
person who shows up with that passport and gets off the 
airplane. And it is also designed to ensure that we have proof 
positive of who that individual is, because counterfeit 
passports, fictitious ID, are very, very common. We at least 
now have a set of fingerprints that we can be more positive 
that the person requesting that visa is someone known to us.
    Chairman Manzullo. Mrs. Yanni had a response.
    Ms. Yanni. Yeah, on several things. First, as you note, the 
Enhanced Border Security Act does have the requirement for 
biometrics. There are things other than a fingerprint which are 
biometrics, including those photos that the State Department 
has been collecting forever since they have issued visas. And 
if somebody submits a phony photo with their fingerprint, you 
don't have any more identification of that person who was not 
in the system before. And so one of the delays, of course, was 
in determining what is going to be the biometric. I am not sure 
that fingerprints were the way to go. I mean we don't have 
Osama bin Laden's fingerprints.
    Europe is not nearly as keen on fingerprints as the U.S. SO 
you know, we are collecting fingerprints, or we will at some 
point at tremendous expense. Whether that is the appropriate 
biometric, I don't know. But apparently that has been decided.
    Another thing in the Border Security Act and in the Patriot 
Act was a requirement that the Department of State gain access 
to lots of databases, including the NCIC. National Criminal 
Information Center database I think is what NCIC stands for. 
Because one of the main problems with those visas that were 
issued to the terrorists was the Department of State, because 
it is not a law enforcement agency, could not get any 
information from the CIA or the FBI or the other agencies. 
There are several provisions in both of those laws which insist 
that the Department of State get that information. But all they 
are getting right now is a name. And so they still have to go 
back to the FBI with all these delays to get what is behind 
that. If the FBI would give the Department of State more access 
to those databases, some of these issues could be resolved 
immediately at the consulate, without going back to the FBI. 
And I would like to hear Mr. Garrity's response on that.
    Mr. Garrity. We are working right now with giving access to 
many of our databases in the NCIC system to the Department of 
State. Our VIGTOF, the Violent Gang and Terrorist Offender 
database has been given to the State Department so they can 
look in that database for those individuals who we have 
identified as terrorists.
    Chairman Manzullo. Mr. Beauprez.
    Mr. Beauprez. Thank you, Mr. Chairman. I am not sure how 
much I can add to the discussion with some questions, but I 
would like to pursue a couple of lines of thought, one relative 
to biometrics. I happen to be a big fan of biometrics. I think 
they hold a lot of potential. But my guess is that relative to 
screening out bad guys, I am not sure that we get a whole lot 
of that. As we just pointed out, I don't think we have got 
Osama bin Laden's fingerprints, for example.
    But I do like the idea of once somebody is cleared for a 
visa, at least we know who shows up and gets off the plane or 
off the boat or whatever. But my suspicion is that it is yet 
another layer of screening of information that has to be 
handled.
    Would it--and by this question, I don't even want to--I 
don't want to imply that this sort of thinking would 
necessarily be wrong. But in the United States, we citizens, 
even if we find ourselves in a court of law, there is a 
presumption of innocence, and the burden is on the prosecutor 
to prove guilt.
    Mr. Beauprez. Would it be unfair to characterize one 
applying for a visa to have exactly the opposite burden?
    Ms. Jacobs. The burden is on the applicant to show his or 
her bona fides.
    Mr. Beauprez. Prove their worthiness. Again, I am not sure 
that is completely incorrect, but it is kind of the reverse of 
the other situation that I cite.
    Given that, I want to transition to Mr. Reinsch, am I 
pronouncing the name correctly? You present an interesting 
scenario. I, too, was in business for myself before I came 
here. At one point, I was exporting livestock at places around 
the globe and coveted foreign breeders of livestock to come to 
our place so we could do business and that was a growing 
market. Still is a market. More recently, a banker, a community 
banker. A lot of my customers are trying to do business abroad, 
a growing market again. You present the possibility that 
American business enterprise affirmed somehow the bona fides of 
foreign visitors. I think somewhere in here there was even a 
suggestion that maybe they be bonded. I am curious. That seems 
straightforward enough. But what if something didn't turn out 
to be something that was presented? The temptation for me, if I 
had somebody from China wanting to come to my farm and buy some 
cows, sounds good. I pledge. When it turns out not to be so 
good, what recourse does the United States government have on 
that poor-little-shmuck small businessman like I was? What do 
we do, and do we really want to go there?
    Mr. Reinsch. I think it depends on where you want to draw 
the line, but I can give you a real world example because the 
government does this right now in one particular case.
    In the last administration, I was in the Commerce 
Department running the Export Control Program and they have a 
program known as the Deemed Export Program, which is not--which 
is closely related to this, that essentially involves 
individuals who want to come here to work in a technology area. 
It wouldn't be a cattle man, but supposing you are Hewlett-
Packard. You want to bring someone here to help, or Intel, you 
to bring an engineer here from China to design chips. 
Sometimes, actually, you are not bringing them here. They are 
already here. They have gotten their Ph.D. And it is a matter 
of converting their visa from student to worker. Because they 
are a foreign national and because they are going to be working 
here, they are deemed to be an export because the Department of 
Commerce makes an assumption that they will go back to China, 
and they will take with them the technology they have acquired 
which is an export, therefore, they need a license.
    In order to get that license, it is not the individual that 
applies for it, but the company who applies for it because the 
company wants to hire them. So you would be applying for your 
genetic engineer. The company, in doing so, makes certain 
warranties about what that individual is going to be working on 
while he is here. The company assumes the legal responsibility 
for making sure that that individual operates within those 
parameters, and the company is legally liable and can be 
prosecuted if he does not. That system has been in place for a 
long time.
    Mr. Beauprez. If I might because I see the light is 
blinking at me, I accept that premise with Hewlett-Packard 
because it happens to be close to my district with a large 
plant, but there has been so much reference to small business, 
that is who we are championing on this Committee. I am a big 
fan of them. I consider myself to be one of them. I like the 
idea. I just wonder about the practicality of affirming somehow 
and really providing the small business person's resources to 
back that up. I think we have got to go back to making sure we 
know who comes in this country and why somehow. It is an 
interesting concept and I would be willing to pursue it. I 
struggle, really, with the practicality for the true small 
business person.
    Chairman Manzullo. Congresswoman Millender-McDonald.
    Ms. Millender-McDonald. Thank you, Mr. Chairman, and thank 
you for this hearing.
    As a senior member on Transportation and also as a member 
of the House administration, I do understand that biometric 
technology is costly. And so in order to put that in and to 
have that type of security, we would have to look for funding 
outside of your normal funding basis. So my question is to the 
two of you, how much funding would you perhaps get from 
Homeland Security in that you are helping to secure those who 
are coming over, and if not, can we integrate some of their 
technology whereby you can clear some of those hits or some of 
those who fall within the percentage of not being accepted 
until further, I suppose, clearances? Have we thought about 
some integration of technology by the Homeland Security, FBI, 
of course, I am talking with you, but the other agencies that 
are so steeped into ensuring that we have a type of technology 
that he can ensure some security coming into this country?
    Ms. Jacobs. That is a very good question. On the clearance 
side, we have long felt, and I think the FBI agrees with us, an 
answer to a lot of these problems is increased connectivity, 
technology that works together. That is one of our biggest 
obstacles right now that we face. We are working in good faith 
to get these jobs done and sometimes our systems work against 
each other.
    I talked about OSIS in my testimony. We are going to begin 
using that to send information to the FBI on visas that we have 
issued or denied. We are already using that to share 
information with other agencies. I think that is the way to go. 
I think on these clearances, when we get to the point where 
they can be done electronically, a lot of the administrative 
processing that is causing delays will go away.
    On biometrics, you are absolutely right, it is a very, very 
expensive proposition. Congress was kind enough to let us keep 
the fees that we collect when we process visas. Readable visa 
fee, we call it, which is now $100 per application. That may 
have to go up as a result of all of these new requirements.
    It is also--we are working very closely with the Department 
of Homeland Security as they try to set up this new entry-exit 
system, which they are calling US-VISIT. They are talking about 
a biometric at the port of entry. We would love for them to use 
the fingerprints we will collect at the ports of entry--we 
collected overseas, and they can verify at the port very 
quickly that it is the same person. This is how we want to work 
together, and we are engaged in conversations. We were talking 
to INS, when entry exit was part of INS, and now, we talking to 
the Department of Homeland Security. We think it is absolutely 
crucial, as I said before, for all of these systems to work 
together so it is a fairly seamless process for the traveler.
    Ms. Millender-McDonald. Mr. Garrity.
    Mr. Garrity. I would agree. One of the well known foibles 
we have in the FBI is information technology systems are not 
what they should be. We are working on that, and the Congress 
has been very kind in giving us money, time and again, to try 
to get our systems up to the 21st century. We have within our 
current system. We are dealing with the old system and that is 
part of our problem. And we have just asked for, and had a 
study conducted of, what it would take to get our system 
improved. All these systems have to be able to talk to one 
another. And it is our vision, and as Ms. Jacobs just said, our 
vision is that the State Department will take the biometrics 
overseas, and that the Department of Homeland Security agencies 
will then verify that the person who requested that visa in 
Beijing, or wherever, is the person who shows up. We may not 
know his name yet, but we at least have his fingerprints. So we 
know whoever applied for it is the person who was interviewed 
by the consular office, and that is the person who showed up.
    Ms. Millender-McDonald. How many hits have you gotten and 
do you have an increase in hits before or after 9/11? Has there 
been an increase in hits if you will?
    Mr. Garrity. I have to get back to you. The rates have 
stayed pretty much steady. We have not seen any higher 
percentage of hits. We have a much higher percentage of names, 
but the percentage remains pretty constant.
    Ms. Millender-McDonald. Ms. Jacobs, you mentioned that 
shortly after 9/11 you guys closed down the Saudi Arabia office 
and whatever. Why would that be, unless one would think that 
that is kind of discriminatory?
    Ms. Jacobs. What we closed down was the way they accepted 
applications which they called visa express, all of the 
applications coming in through travel agencies and they weren't 
interviewing a lot of----.
    Ms. Millender-McDonald. That was not a practice that was 
revealed before 9/11?
    Ms. Jacobs. No. That was something that actually before 9/
11--as I said, the post was doing things different ways in 
order to cope with the workload that they had.
    Ms. Millender-McDonald. That is what you thought after 9/
11, you should close that?
    Ms. Jacobs. Yes.
    Ms. Millender-McDonald. The delays on issuing these visas, 
especially in China and Russia because they really weren't 
linked to 9/11, are we then suggesting that SARS might be 
holding up some of this or what is your comments on that?
    Ms. Jacobs. No. I don't think SARS has anything to do with 
it. I think for--in general, we are doing more of the checks on 
people who might be a concern--a technology transfer concern. A 
lot of those applicants do come from China and Russia.
    Ms. Millender-McDonald. Why such a delay?
    Ms. Jacobs. I think because just because of the sheer 
volume of cases coming in. We have anywhere from 1,500 to 2,000 
cases.
    Ms. Millender-McDonald. You are reaching a 97 percent 
threshold. So what then would be the problems by which that 
small percentage is still being a delayed factor? Is it because 
of what you are saying?
    Ms. Jacobs. It is because of the volume. The new Condor 
program added to the removal of the clock and then the increase 
in Mantis.
    Ms. Millender-McDonald. I would like to ask the rest of the 
panelists what we can do to help you. Would the Section 214 of 
the INA Section of the legislation be something that we can do 
to help alleviate some of your frustrations?
    And the gentleman at the end, you were talking about the 
responsibility of those who were coming over with the license 
that the business person provides for those coming over. Are 
those licenses--do they expire once the person returns back to 
their country, and those would be my questions and any comments 
that the others will make because the other questions have been 
asked by those members here.
    Mr. Reinsch. In the example I cited, I think they are time-
limited but renewable because they depend on the individual's 
employment in that case. What I think my colleagues here have 
been talking about is business travel. People are here for a 
relatively short period of time, maybe a few weeks, a month, to 
be trained on a piece of equipment, to inspect it, to make sure 
it is adequate, to look at it to decide if they want to buy it. 
There have been a lot of published reports of stories like 
that.
    I think you are going in a very useful direction. It is 
helpful to make distinctions between the different kinds of 
programs. The Condor program is really looking for terrorists 
and for people who might engage in some sort of terrorist act. 
And one of the reasons that there was a backlog is because they 
wanted to examine a lot more people for that purpose with very 
good reason after 9/11. The Mantis program, which is what the 
business witnesses here have talked about, are people, 
primarily businessmen, who are coming here for the purposes we 
described, for business-related purposes. The suspicion if they 
are going to commit an act of terrorism is not really on the 
screen. It is more a question of whether they are going to go 
back and acquire something that we don't want them to.
    Ms. Millender-McDonald. Is it legislation that we put in 
place that we can perhaps alleviate some of this?
    Mr. Reinsch. I don't think it is legislation. The two 
remedies that I suggest is one, get them to go back on the 
clock. To the extent that the backlog has come down--I mean the 
backlog going up was the rationale for going off the clock. To 
the extent they poured more resources into the problem and the 
backlog has come down, then why not go back on the clock and 
you don't have a problem? Number two not a subject of much 
discussion today, but I think a significant part of the problem 
is there has been this ongoing discussion of an MOU between 
Homeland Security and State over who does what. And the FBI is 
not irrelevant to that. They are a part of that. The agencies 
need to sort this out. They are not going to solve the problem 
in big ways until they have first decided whose responsibility 
it is to have the different pieces of the puzzle. They don't 
have to finish that until November. But the reality is there 
are no dramatic steps that are going to be taken until they 
finish that.
    So if you can encourage them to get it done, which is a 
matter of executive will, that would be a really useful step.
    Chairman Manzullo. Anybody else have an answer to her 
question? Comment?
    Ms. Millender-McDonald. Mr. Shapiro, you have a frowned 
face. Is there something we can alleviate that frowned face?
    Mr. Shapiro. A cup of coffee. I think you have much more 
intimate knowledge of the law. I just share Congressman 
Schrock's comments. And it is just a frustration of what 
appears to be bureaucracy. We are trying to do business here. 
And we are not isolating the problems, and we are causing a 
greater economic harm and the potential economic harm of taking 
our products. And I think China deserves a separate focus. They 
are a special case. They are the biggest market. And I think we 
should devote some resources. I went to Beijing to focus on 
this issue. I went to Shanghai. I went to the embassy there. 
And I heard a lot of frustrated customers. I have been around 
the world trying to promote the U.S. As a destination, and the 
answer I am getting is that the U.S. Is a great place to go, if 
you let us go there.
    Ms. Millender-McDonald. And that is very true, Mr. Shapiro. 
But now as we look at SARS, that has created another problem.
    Mr. Shapiro. SARS is a special layer. I think there is a 
real threat from SARS, but we rely on our government to do the 
right thing, and I think they are. But it is a very isolated 
threat depending on the country.
    Chairman Manzullo. Thank you.
    Ms. Millender-McDonald. Mr. Chairman, thank you so much, 
but I would like to suggest, if I may, that the two who are 
here, Ms. Jacobs and Mr. Garrity, will take under advisement 
some of the comments that they have made, get back to us to 
tell us what you are doing to alleviate or help them out of 
some of these frustrations. Some of these can be remedied on 
short order.
    Chairman Manzullo. I have a suggestion on that, and then I 
know you have some more questions.
    Ms. Millender-McDonald. I have a statement for the record.
    Chairman Manzullo. What percentage of the backlog, Mr. 
Garrity, represents people trying to come from China?
    Mr. Garrity. I have to back to you on that.
    Chairman Manzullo. Is it 50 percent?
    Mr. Garrity. Approximately 50 percent of our Mantis Visas 
are Chinese.
    Chairman Manzullo. Let me make this suggestion. I am the 
Chairman of the American-Chinese Interparliamentary Exchange, 
and we work extremely close with the Speaker. We were there in 
January. Matthew Szymanski, who is the Chief of Staff of our 
Small Business Committee, Matthew has been to China in the past 
14 months. He goes back about every six or seven weeks. We have 
an intense interest in trying to get exports into China. What I 
would suggest, and I know that Ms. Jacobs and Mr. Garrity you 
are wide open to anything that would help you out, is the 
Speaker and I because we have--it is the Speaker's delegation 
that goes to China. It is the Speaker's exchange. And we work 
with his office on these exchanges, and that is how close we 
are with his office. And he has given resources to be able to 
do that--would be as I see it, the challenge here is getting 
people from China to come to this country for business 
purposes. This is the real--this is what is taking the longest 
period of time. And I would be willing to work with the two of 
you--Bob Kapp is here from the U.S. China Business Council--
with just maybe three or four people--maybe there is a way to 
develop--I don't want to call it a special desk or process or 
something, but I really want to sit down with the two of you 
and see if we can find some way to expedite those business 
people from China who want to come here.
    I mean, one suggestion would be perhaps the business 
community itself can come up with a database and profile and 
pictures of those engineers, those people from China that come 
to the United States on a frequent basis with built-in 
verifications and ways they could even take this and share it. 
I mean, for example, it could be something--not as simple but 
maybe even a notebook that they could provide to the consuls in 
China with the names of the 300 most--300 Chinese people who 
visit the United States on a regular basis. I am not talking 
about a pre-clearance program, but for example, just some way 
to really expedite this process, and I would be willing--would 
the two of you be willing to work with us on something like 
that?
    And the Business Council out there, Bob Kapp, we may need 
some money for this to provide the resources, whatever is 
necessary, because this is the opportunity for the private 
sector to get into this thing and show a leadership position 
and help out these two Federal government officials, that in my 
estimate they are doing a tremendous job, in order to draw that 
balance between security and helping the exports of this 
country. And anything that we can do--anything that the private 
sector can do to really expedite this process--and I would be--
would the two of you be willing to sit down with me to work on 
that? Mr. Szymanski would be the point person on that because 
he knows everybody in China. He has a tremendous background of 
the people in China.
    And before I turn this over for some more questions, I want 
to thank all the witnesses. This has been a tremendous hearing. 
We conduct these hearings for the purpose of trying to resolve 
issues. Everything is resolution oriented. And I am satisfied, 
without hesitation, that the FBI and the State Department are 
moving in an exemplary way, that you recognize the issue, you 
know exactly what is going on. You have your pulse on it. The 
private sector is here. You can be assured that when I meet 
with the folks here--I am hearing this same angst from the 
people I represent, and your interests will be conveyed to them 
for the purpose of trying to resolve this.
    Ms. Majette, you just came and you are leaving. This is 
about the visa issue. You have been to three meetings now. You 
are recognized for 5 minutes.
    Ms. Majette. I gathered everything up. I am sorry. I am 
sorry ladies and gentlemen. I did hear all of the testimony and 
then was called away, and I certainly appreciate your being 
here. And please excuse me if this question has already been 
asked, but I represent Georgia's Fourth Congressional District, 
which is just east of the City of Atlanta. We have a growing 
international population and Emory University is located in the 
district along with a few other institutions of higher 
learning. One of the great concerns that we have is that we 
want to be able to continue the exchange programs that Emory 
and other universities have. And what progress--and I know that 
Ms. Jacobs spoke to part of that, but what else is being done 
to streamline the process and reduce the backlog to facilitate 
travel for students and scholars?
    Ms. Jacobs. For any of the students or scholars subject to 
one of these different clearances, we have, in fact, worked 
with the FBI on trying to give priority to those types of 
people when we do our checks. We know that students, in 
particular, need to get here by a certain time in order to make 
their classes. And so we have worked very hard in trying to 
identify those cases when they come in and to sort of put them 
at the top of the list. We give high priority to the Mantis 
cases, which would be the exchange visitors who are subject to 
these clearances. I am hearing today that we probably need to 
put business travelers also on that priority list. But anyway, 
we do understand the need to, you know, continue with this 
policy of having--we say often that our policy is ``secure 
borders, open doors,'' and we are very sincere about that. And 
that is part of the policy is try to get the legitimate 
travelers into the U.S. As quickly as we can.
    Ms. Majette. Thank you. And is DHS Program still 
operational? Or is it becoming fully operational, and what 
kinds of challenges have to be overcome in order to make it 
work most efficiently?
    Ms. Jacobs. It is a DHS Program, as you know, we are 
partners because they send information to us, which we then 
forward to our consular sections overseas, so that they can 
verify the documents and verify the identity of people coming 
in for student visas and exchange. I think it is up and 
running. There have been some technical glitches when DHS was 
trying to push information to us. We have several thousand 
records now in the system, and I think for the most part it is 
working pretty well.
    Ms. Yanni. If I can respond to that. There are actually 
still--perhaps between DHS and the Department of State there 
has been some resolution of the electronic problems, but 
between the universities and other users and the Department of 
Homeland Security, there are still massive problems and you are 
going to be hearing from Emory and other universities because 
there are a lot of problems at that point. Sometimes the data 
doesn't even get into the system when they enter it. There are 
changes that can't be made because the system blocks access 
that is needed. And this actually is a small business issue too 
because some of the exchange visitors are coming over as 
trainees in small and medium-sized businesses too. So it is not 
just a student issue, but there are definitely still problems 
with the system.
    Ms. Majette. Is there anything you would suggest, from your 
point of view, that could be done to improve the system?
    Ms. Yanni. Get in some good foreign technologists to fix 
it.
    Chairman Manzullo. Mr. Schrock, you had one last short 
question.
    Mr. Schrock. I do. Mr. Chairman, I really agree with what 
you are saying about having people sit down and talk to one 
another. And that follows on with my--I mentioned the American 
Hotel and Lodging Association, which by the way, I would like 
to have unanimous consent included in the record.
    All knowledge and all good ideas don't come from we 
bureaucrats. We need to include people that are sitting to the 
left here because they are the ones who are living with this. 
They have to live with what we are coming up with, and we heard 
great ideas. And I can tell they are dancing in their chairs 
ready to help us with this. And we need to reach out to the 
business community and make them a part of this. They've 
probably got great ideas. They are not inside the Beltway, 
which is to their advantage. And we need to include these 
people in any discussions we have because they could probably 
sell this for us, quite frankly.
    Chairman Manzullo. I have great confidence that we are 
going to come up with a resolution on this, and it is going to 
help out everybody here.
    Listen, thank you so much. Marvelous testimony. This has 
been an exceedingly important hearing as part of our series of 
hearings dealing with the manufacturing base in this country. 
Just another brick in the picture, and again thank you for 
coming here.
    [Whereupon, at 4:15 p.m., the Committee was adjourned.]
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