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





  HOMELAND SECURITY: SURVEILLANCE AND MONITORING OF EXPLOSIVE STORAGE 
                               FACILITIES

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                   EMERGING THREATS AND INTERNATIONAL
                               RELATIONS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             AUGUST 2, 2004

                               __________

                           Serial No. 108-259

                               __________

       Printed for the use of the Committee on Government Reform


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


                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
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                     COMMITTEE ON GOVERNMENT REFORM

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

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

 Subcommittee on National Security, Emerging Threats and International 
                               Relations

                CHRISTOPHER SHAYS, Connecticut, Chairman

MICHAEL R. TURNER, Ohio
DAN BURTON, Indiana                  DENNIS J. KUCINICH, Ohio
STEVEN C. LaTOURETTE, Ohio           TOM LANTOS, California
RON LEWIS, Kentucky                  BERNARD SANDERS, Vermont
TODD RUSSELL PLATTS, Pennsylvania    STEPHEN F. LYNCH, Massachusetts
ADAM H. PUTNAM, Florida              CAROLYN B. MALONEY, New York
EDWARD L. SCHROCK, Virginia          LINDA T. SANCHEZ, California
JOHN J. DUNCAN, Jr., Tennessee       C.A. ``DUTCH'' RUPPERSBERGER, 
TIM MURPHY, Pennsylvania                 Maryland
KATHERINE HARRIS, Florida            JOHN F. TIERNEY, Massachusetts
                                     DIANE E. WATSON, California

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
            Lawrence J. Halloran, Staff Director and Counsel
                  J. Vincent Chase, Chief Investigator
                        Robert A. Briggs, Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on August 2, 2004...................................     1
Statement of:
    Horsley, Don, county sheriff, San Mateo County Sheriff's 
      Office, State of California; Heather Fong, chief of police, 
      San Francisco Police Department, city of San Francisco, CA; 
      Scott MacGregor, assistant chief, California Highway 
      Patrol, California Department of Justice, Sacramento, CA; 
      Mark Church, president, San Mateo County Board of 
      Supervisors, State of California; and Michael Nevin, 
      supervisor, San Mateo County Board of Supervisors, State of 
      California.................................................    74
    Nelson, Walfred A., Deputy Assistant Director, Enforcement 
      Programs and Services Division, the Bureau of Alcohol, 
      Tobacco and Firearms, U.S. Department of Justice; and 
      Michael Gulledge, Director, Office of Evaluation and 
      Inspections Division, Office of the Inspector General, U.S. 
      Department of Justice......................................    14
    Ronay, James Christopher, president, the Institute of Makers 
      of Explosives; and Barney T. Villa, international director, 
      International Association of Bomb Technicians and 
      Investigators, Whittier, CA................................   116
Letters, statements, etc., submitted for the record by:
    Church, Mark, president, San Mateo County Board of 
      Supervisors, State of California, prepared statement of....    93
    Fong, Heather, chief of police, San Francisco Police 
      Department, city of San Francisco, CA, prepared statement 
      of.........................................................    81
    Gulledge, Michael, Director, Office of Evaluation and 
      Inspections Division, Office of the Inspector General, U.S. 
      Department of Justice, prepared statement of...............    28
    Horsley, Don, county sheriff, San Mateo County Sheriff's 
      Office, State of California, prepared statement of.........    76
    Lantos, Hon. Tom, a Representative in Congress from the State 
      of California, prepared statement of.......................     7
    MacGregor, Scott, assistant chief, California Highway Patrol, 
      California Department of Justice, Sacramento, CA, prepared 
      statement of...............................................    87
    Nelson, Walfred A., Deputy Assistant Director, Enforcement 
      Programs and Services Division, the Bureau of Alcohol, 
      Tobacco and Firearms, U.S. Department of Justice:
        Information concerning explosives........................    46
        Prepared statement of....................................    18
    Nevin, Michael, supervisor, San Mateo County Board of 
      Supervisors, State of California, prepared statement of....   103
    Ronay, James Christopher, president, the Institute of Makers 
      of Explosives, prepared statement of.......................   118
    Shays, Hon. Christopher, a Representative in Congress from 
      the State of Connecticut:
        Letter from Stanley Mathiasen............................    13
        Prepared statement of....................................     3
    Villa, Barney T., international director, International 
      Association of Bomb Technicians and Investigators, 
      Whittier, CA, prepared statement of........................   129

 
  HOMELAND SECURITY: SURVEILLANCE AND MONITORING OF EXPLOSIVE STORAGE 
                               FACILITIES

                              ----------                              


                         MONDAY, AUGUST 2, 2004

                  House of Representatives,
Subcommittee on National Security, Emerging Threats 
                       and International Relations,
                            Committee on Government Reform,
                                                     San Mateo, CA.
    The subcommittee met, pursuant to notice, at 11:30 a.m., in 
San Mateo Council Chambers, San Mateo, CA, Hon. Christopher 
Shays (chairman of the subcommittee) presiding.
    Present: Representatives Shays and Lantos.
    Also present: Representative Eshoo.
    Staff present: Vincent Chase, chief investigator; and 
Robert Briggs, clerk.
    Mr. Shays. In the spirit of the person who trained me to be 
a chairman, Tom Lantos, we start on time. A quorum being 
present, the Subcommittee on National Security, Emerging 
Threats and International Relations hearing entitled, 
``Homeland Security: Surveillance and Monitoring of Explosives 
Storage Facilities,'' is called to order.
    Let me thank Congressman Tom Lantos for inviting this 
subcommittee here today. In 1987, when I first arrived in 
Congress, Chairman Lantos taught me a great deal about 
leadership and determination. Tom is one of the most 
articulate, passionate and persuasive members of the House of 
Representatives. He is also known on both sides of the aisle 
for his principled and courageous approach to international and 
domestic issues.
    Congressman Lantos, ranking member of the International 
Relations and a senior of the Government Reform Committees, is 
a thoughtful, energetic participant in our oversight, and we 
are grateful for the opportunity to examine the adequacy of 
security safeguards at explosive material storage facilities 
from his perspective. Tom and I are joined today by Anna Eshoo, 
a member of the very powerful Energy and Commerce Committee as 
well as the Intelligence Committee. Ms. Eshoo is a very good 
friend and a highly respected Member of Congress. She truly is 
an exceptional Member of Congress, and we are delighted to have 
her join this subcommittee, and we will have the appropriate 
unanimous consent to make her a full participant in this 
subcommittee.
    During the weekend of July 4, 2004, almost 200 pounds of 
explosive material were stolen from the San Mateo County 
Crystal Springs Reservoir Storage Facility. Military binary 
explosives, plastic C4, detonation cords and blasting caps were 
reported taken from the magazine used to store explosives for 
training drills and confiscated weapons and ammunition. 
Fortunately, the robbery does not appear terror related and the 
suspects were apprehended within days of the crime. Law 
enforcement authorities believe they have recovered all of the 
explosives. This apparent local event should serve as a 
national wake-up call and may be considered a blessing in 
disguise, but we do need to wake up.
    Many think that storage facilities operated by State and 
local agencies may be more vulnerable to theft, sabotage or 
terrorist attack than those operated by businesses. Ultimately, 
we will look at both. Securing explosives storage facilities 
present difficult challenges, demands and tough choices. The 
need for increased physical security against heightened threats 
is obvious.
    While it is not possible to eliminate the vulnerability of 
all attractive terrorist targets throughout the country, 
strategic improvements in security can make it more difficult 
to acquire explosive material and can lessen the impact of 
attacks that do occur. The Bureau of Alcohol, Tobacco, Firearms 
and Explosives, still called ATF, is responsible for 
enforcement of Federal laws relating to storage of explosives 
in private facilities, but States have primary authority and 
force protection standards at public sites. It is estimated 
there are hundreds of these bunkers throughout the United 
States. Adherence to Federal security standards by public 
storage facilities is voluntary.
    As a result, it is unclear whether local law enforcement 
meet minimal ATF guidelines or whether varying State and local 
security requirements provide adequate protection. Given the 
undeniable allure of explosives to terrorists, the subcommittee 
asked the Government Accountability Office [GAO], to undertake 
a study to examine the vulnerability of public and private 
explosive storage facilities, and recommend actions needed to 
correct facility security deficiencies. Such a risk management 
approach is essential to realign enhanced security measures 
with new, more dynamic threats.
    Therefore, we meet this morning to ask if the public and 
private sectors are pursuing a viable security strategy to 
protect the Nation's explosive storage facilities. Federal 
witnesses will speak to the adequacy of laws and existing 
enforcement programs to ensure the security of high explosives 
stored by local law enforcement agencies. State and local 
witnesses will testify about storage regulations and the need 
for uniform security standards. Witnesses from business and 
industry will describe best practices for the storage of high 
explosives and industry recommendations for security 
improvements. We appreciate the time, dedication and expertise 
of all our witnesses. We are all members of one family, the 
United States of America, and that is how I approach these 
hearings. We look forward to their testimony.
    At this time, the Chair would recognize the distinguished 
Member, Mr. Lantos.
    [The prepared statement of Hon. Christopher Shays follows:]

    [GRAPHIC] [TIFF OMITTED] T8210.001
    
    [GRAPHIC] [TIFF OMITTED] T8210.002
    
    Mr. Lantos. Thank you very much, Mr. Chairman. Let me first 
say there is no Member of Congress for whom I have higher 
regard or greater appreciation than you.
    Mr. Shays. Thank you.
    Mr. Lantos. You have conducted a whole series of singularly 
significant hearings on homeland security ever since September 
11, and you have made an enormous contribution to enhancing our 
position as a Nation in the face of terrorist threats. I also 
want to thank my good friend and neighbor, Congresswoman Anna 
Eshoo, for joining our subcommittee. She and I share San Mateo 
County in terms of Federal representation. She is an 
outstanding Member of Congress, an important member of the 
Intelligence Committee, and her contributions to enhancing 
domestic security have been significant and will continue to 
be. I also want to thank both the subcommittee staff, my 
personal staff and all of our witnesses for their invaluable 
work.
    I also want to congratulate law enforcement for 
apprehending the criminals involved in this very serious theft 
of explosives. The criminals have been apprehended, and the 
explosives have been recovered. This is one potential tragedy 
of significant proportions which has been diffused.
    I need not point out to anybody the unique and 
extraordinary timing of this hearing. If you read this 
morning's local papers or The New York Times, if you listen to 
radio or watch television, the topic is basically the topic of 
this hearing on a broader and more expanded level.
    I also would like to say a word about the committee on 
which Chairman Shays and I have the privilege of serving. The 
Government Reform Committee is the oversight committee of the 
Congress of the United States. Whatever the issue, 
inappropriate behavior by cabinet members, as was the case of 
the Department of Housing and Urban Development when I Chaired 
the subcommittee and Chris was my invaluable Republican 
colleague, to now homeland security, this committee looks to it 
that, a, laws are carried out as they are supposed to be 
carried out, or, as is likely to be the case with respect to 
today's hearing, new legislation is introduced and passed where 
gaps appear in the panoply of legislation that deals with our 
national security.
    Field hearings by this committee are fairly unusual. Field 
hearings demand that Members and staff go out to various parts 
of the country, the infrastructure of Washington, DC, is not 
there, but occasionally field hearings are justified. This 
particular field hearing, and I want to thank my friend Chris 
Shays for holding it, is in line with other important field 
hearings this committee had here in San Mateo County in earlier 
periods. During a particularly severe storm over 20 years ago 
when Devil's Slide was washed away, at my request the then 
chairman of the committee brought out this bipartisan committee 
to hold field hearings on Devil's Slide with laudable results. 
Over 20 years ago, I held the first field hearing on the 
subject of the Strategic Petroleum Reserve here in San Mateo 
County.
    This time, a gap in our security, as it relates to the 
storage of explosives by public agencies, not only will result 
in dealing with this specific instance, which is really not our 
main concern--we are not a law enforcement agency, and this is 
not a court of law. Our main purpose will be to see what 
additional legislation is called for to plug the loophole in 
this most important arena.
    The explosives industry is big business. We are about 2\1/
2\ million metric tons of explosives every year. It is over $1 
billion in sales. As we dig into this particular episode, we 
discover that there are scores of thefts of high explosives 
across the country. At a time when explosives are the preferred 
method of operation of terrorists, the importance of 
safeguarding explosives should be obvious to all of us.
    Federal security standards by public storage facilities at 
the moment are voluntary. This is a pre-September 11 standard 
which simply does not hold up in a post-September 11 world. In 
my judgment, we will need uniform Federal standards, uniformly 
enforced across this country, and once we make that 
legislation, and it is properly implemented, this particular 
gaping hole in our domestic security structure will have been 
eliminated.
    Let me say just one final word about funding. We must not 
allow funding for homeland security to become pork barrel 
legislation. It is, to quite an extent, as we meet here this 
morning. The State of Wyoming receives about $38 per person for 
homeland security purposes; California receives about $5. At a 
time when some areas are uniquely exposed to the dangers of 
terrorist attacks--and this morning, Secretary Ridge has 
designated New York City, part of New Jersey and our Nation's 
capital as high-risk areas--the notion that Wyoming should be 
getting many times as much per capita as California, with all 
of its vulnerable facilities, is simply unacceptable. Pork-
barrel funding of homeland security is simply not something 
that the American people will tolerate.
    I suspect in many ways since September 11 we have been 
confronted with what I call the ``guns of Singapore'' 
phenomenon. As some of you may know, the guns of Singapore in 
the Second World War were fixed in place aiming at the sea. But 
the danger, the invasion and finally the occupation of 
Singapore came from the land behind, and the guns of Singapore 
were never fired in that battle. They couldn't be--they were 
aimed at the wrong enemy. Now it is self-evident that when, on 
September 11, the terrorist gangsters, mass-murderers captured 
our civilian airliners, we had a phenomenon similar to the guns 
of Singapore. Our Air Force was more than ready to deal with 
alien and hostile air forces which simply did not materialize, 
but we were unprepared to deal with terrorism capturing 
domestic airliners.
    At a time when explosives are so critical in the struggle 
against terrorism, to see a facility just a few miles from here 
be as undefended, unprotected as in fact they were during the 
4th of July weekend is something we cannot tolerate. As 
Chairman Shays so properly indicated, we are dealing with a 
national wake-up call which could be a blessing in disguise. If 
Congress acts and the administration follows, we will be able 
to plug this enormous loophole in our national security 
apparatus. I look forward to hearing from our witnesses, and I 
again want to thank you, Chairman Shays.
    [The prepared statement of Hon. Tom Lantos follows:]

    [GRAPHIC] [TIFF OMITTED] T8210.003
    
    [GRAPHIC] [TIFF OMITTED] T8210.004
    
    [GRAPHIC] [TIFF OMITTED] T8210.005
    
    Mr. Shays. Thank you. At this time, let us just take care 
of some business and ask unanimous consent to have Ms. Anna 
Eshoo participate in today's hearing. Without objection, so 
ordered. I also would extend an invitation when we have more 
hearings back in Washington, we would love your same 
participation. This is a facility, actually, in your district. 
Ms. Eshoo, wonderful to have you.
    Mr. Lantos. It is in my district, but who cares. 
[Laughter.]
    This place is in my district; the facility is in hers.
    Mr. Shays. Oh, no. I understand that. You are the reason 
why we are here, Mr. Lantos, and we are in your district, but, 
Ms. Eshoo, you have the floor.
    Ms. Eshoo. Thank you, Mr. Chairman. And, first of all, 
welcome to San Mateo County----
    Mr. Shays. Thank you.
    Ms. Eshoo [continuing]. And to California. We are very, 
very pleased that you are here, and indeed it is an honor to 
have you as chairman of this very important committee to be 
here.
    Mr. Shays. Let me interrupt the gentle lady to say that my 
oldest brother lives in this district and is a constituent of 
Mr. Lantos.
    Ms. Eshoo. Yes.
    Mr. Lantos. We are still checking on whether he votes for 
me, Mr. Chairman. [Laughter.]
    Ms. Eshoo. And, of course, to my colleague, Tom Lantos and 
his outstanding work in the Congress, thank you for inviting me 
to this hearing, allowing me to participate in it and to 
participate with the subcommittee. And to everyone that is here 
sitting in council chambers reminds me of the 10 years that I 
spent in local government. And so wherever I am in San Mateo 
County, it makes no difference to me, because San Mateo County 
is my home. So to all of my colleagues and the board of the 
supervisors that are here, to Sheriff Horsley, to all of the 
law enforcement people that are here and the rest of the 
broader community, it is an honor.
    The theft of the high explosives from a multistorage unit 
at Crystal Springs Reservoir on the 4th of July weekend was, I 
think, a frightening incident for all of us who live in the 
area. It is also, I believe, a warning about the broader 
weaknesses in the Federal regulation of dangerous materials, 
and that is what this hearing is about--how we can do better. 
And I think that given the lineup of the witnesses and the 
information that will be drawn from them, that we can learn 
more and really hit the bulls eye here and close the loophole, 
as Congressman Lantos says, about these dangerous materials.
    I do want to recognize the good work of our law enforcement 
officials, because were it not for them there would be an added 
piece to this hearing, and that is that what was stolen would 
still be out there, which would add to and heighten the anxiety 
and the fear of our people. So I salute you for that.
    I also want to point out that there have been consistent 
efforts in San Mateo County, and I am a real cheerleader for 
them, because, as our law enforcement officials and our elected 
officials have had to transform themselves with the whole issue 
of homeland security, they have to translate it into hometown 
security. That is really what it is. In Washington, we talk 
about homeland security, but it all comes back to our local 
community. So to members of the board and to our law 
enforcement people, thank you.
    The broader questions raised by this incident obviously 
cannot be ignored. We need, in my view, stricter mandatory 
Federal requirements for safeguarding the facilities where high 
explosives are stored. The current regulations, as I read them, 
don't do what they need to in order to keep our citizens safe. 
For almost all facilities, current Federal guidelines only 
require a weekly inspection to check for missing inventory and 
an ATF inspection once every 3 years. Not good enough anymore.
    The ATF doesn't require alarm systems, cameras, 
surveillance equipment or security personnel to guard these 
sites. I can't help but think that when I am in a grocery store 
that they have more security to protect the frozen food 
section, so we have a ways to go on this. And we can do it. We 
know how. That is the best part of it.
    There are many more explosive storage sites throughout the 
United States, and they are protected by a wide array of 
Federal, State and local agencies, but how many munitions 
storage sites are there in our country? Who controls them? How 
secure are these sites under the ATF existing regulations, and 
how often are they secured or inspected by the ATF to ensure 
compliance? Finally, how much of this material is stolen or, 
``lost,'' each year? My own cursory review of the ATF Web site 
uncovered the sobering fact that in a 5-year period between 
1992 and 1996 more than 27,000 pounds of high explosives were 
stolen. So I think that we need to have an inventory. We need 
to know who is checking the inventory. We need a set of 
regulations that are very clear and will apply across the board 
and then the implementation, carrying out of what we need to 
do.
    Since the attack on our country, I have heard countless 
first responders and public officials say that we have to be 
right 100 percent of the time where our enemies only need to be 
right once. I think that we have been fortunate in this case. 
It could have been many other things. It is not. But what we 
are here for today is to draw a lesson from it, to probe the 
weaknesses and then build a very strong safety net, a legal 
safety net, not only for San Mateo County but for communities 
across our country.
    And for that, Mr. Chairman, I thank you again for including 
me in this hearing and of course to my friend and colleague, 
Congressman Tom Lantos, not only for his superb representation 
in the Congress but also for his friendship that has stretched 
over so many years. Thank you.
    Mr. Shays. I thank the gentle lady very much and appreciate 
the patience of our guests as well as our witnesses. We think 
it is important for our witnesses to know our general attitude 
about how we are approaching this hearing, and would also like 
to do something I don't usually do but recognize my staff 
member, Vince Chase, who actually served in the Connecticut 
State Legislature for 16 years as a member of the legislature. 
I had already committed to my staff all the activities and 
hearings they would have to the rest of the year, and that was 
about a 60 hour a week job to finish up, and then I came in and 
said, ``Tom Lantos pointed out that we have a very serious 
problem about how we store our explosive devices and we are 
going to have a hearing in a few weeks.'' Vince dropped 
everything else and he has, I think, helped to present a very 
nice hearing, and, Vince, we appreciate that very much.
    I would ask unanimous consent to place in the record a 
letter from the National Bomb Squad Commanders Advisory Board. 
Without objection, so ordered.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T8210.006
    
    Mr. Shays. I would ask unanimous consent that all members 
of the subcommittee, and that includes Ms. Eshoo, be permitted 
to place an opening statement in the record and that the record 
remain open for 3 days for that purpose. Without objection, so 
ordered. I would ask further unanimous consent that all 
witnesses be permitted to include their written statements, and 
without objection, so ordered.
    We have three panels. Our general practice is 5 minutes, 
and then we go to questions. We are going to do the 10-minute 
rule. I will have Mr. Lantos ask questions for 10 minutes, Ms. 
Eshoo and then I will as well. If you go over 5 minutes just a 
bit, that is OK. I don't want you to rush through it, but we 
don't want it to be too long because we do have three panels. 
And given that you have listened to all of us speak, I feel a 
little reluctant to be too strict on the time here.
    Our first panel is Mr. Walfred A. Nelson, Deputy Assistant 
Director of Enforcement Programs and Services Division, The 
Bureau of Alcohol, Tobacco and Firearms, Department of Justice, 
and our next witness on the same panel is Mr. Michael Gulledge, 
Director, Office of Evaluation and Inspections Division, Office 
of the Inspector General, Department of Justice. We welcome 
both of you here. We are going to have some interesting dialog.
    We are all learning a lot about a new area for some, and I 
just would point out that this is a subcommittee that has had 
over 50 hearings on this issue, and we had 20 hearings before 
September 11. One of the points that was made clear, 3 
commissions before September 11 all said, ``We have a terrorist 
threat out there, we need to have an assessment of that threat, 
we need a new strategy to deal with it, and we need to 
reorganize our government to respond.'' And one of the things 
that we clearly are doing, this is a work in process, this is a 
hugely important issue that we are dealing with today. It has 
national significance to our homeland security and this is the 
beginning of what I expect will be a number of hearings on this 
issue.
    So you two gentlemen start this process off, and we thank 
you very much. We will start with you, Mr. Nelson.

  STATEMENTS OF WALFRED A. NELSON, DEPUTY ASSISTANT DIRECTOR, 
   ENFORCEMENT PROGRAMS AND SERVICES DIVISION, THE BUREAU OF 
ALCOHOL, TOBACCO AND FIREARMS, U.S. DEPARTMENT OF JUSTICE; AND 
     MICHAEL GULLEDGE, DIRECTOR, OFFICE OF EVALUATION AND 
  INSPECTIONS DIVISION, OFFICE OF THE INSPECTOR GENERAL, U.S. 
                     DEPARTMENT OF JUSTICE

    Mr. Nelson. Thank you, Mr. Chairman, Mr. Lantos and Ms. 
Eshoo. I appreciate the opportunity----
    Mr. Shays. Excuse me, I need to be reminded. I did not 
swear you in. No wonder you looked a little surprised at me. I 
said they would be sworn in. We swear in all our witnesses. If 
you would both stand and raise your right hands. I will just 
say, parenthetically, the only person I never swore in in my 8 
years as chairman was Senator Byrd--I chickened out. But 
everyone else has been.
    [Witnesses sworn.]
    Mr. Shays. Both witnesses have responded in the 
affirmative, and I am sorry, we will start the clock over 
again.
    Mr. Nelson. Thank you, Mr. Chairman, Mr. Lantos and Ms. 
Eshoo. I appreciate the opportunity to appear before you today 
to discuss ATF's role in explosives enforcement in the United 
States. ATF enforces Federal explosives laws and regulates 
commerce in explosives. I would like to provide you with a 
general overview of ATF explosives expertise and assets and 
then explain in more detail ATF's role in ensuring the safe 
storage of explosives.
    A primary ATF strategic goal is the investigation of 
explosives and arson-related crimes, such as bombings and 
explosives thefts. ATF aggressively investigates bombings, 
fires and explosives thefts to protect the public from the 
criminal or unsafe use of explosives. ATF's vigorous 
enforcement efforts include keeping explosives out of the hands 
who would use explosives for criminal or terrorist purposes. 
One of the ways ATF accomplishes this is by investigating all 
applicants for explosives licenses and permits and by 
inspecting those entities. And if I could add, since the 
passage of the Safe Explosives Act in 2002, all persons 
desiring to obtain or receive commercial explosives are 
required to get a permit from ATF and are subject to a 
fingerprint and background check.
    On July 6, 2004, a break-in at the San Mateo County 
explosives storage facility was discovered. The San Mateo 
County Sheriff's Office, San Francisco PD and the FBI advised 
ATF that they used explosives magazines housed in San Mateo 
County on property owned by the City and County of San 
Francisco. ATF immediately responded to the crime scene and 
began an investigation. From the onset, ATF's efforts to 
recover the explosives and bring those responsible to justice 
have been supported by many law enforcement agencies, including 
the U.S. Attorney's Office, the California Highway Patrol, 
Alameda County Sheriff's Office, Hayward Police Department, 
Union City Police Department, Oakland Police Department and the 
Walnut Creek Bomb Squad.
    As part of the response, information received by Alameda 
County Sheriff's Office led law enforcement to possible 
suspects and suspect vehicles. As a result of the intensive 
investigation, we believe ATF has recovered all the stolen 
explosives and arrested 4 individuals who were later indicted 
by Federal grand jury charging 21 counts relating to the theft, 
possession and distribution of the explosives.
    ATF maintains a variety of licensing, regulatory and 
criminal enforcement initiatives that comprise a comprehensive 
strategy to help ensure that explosives are not available for 
use by terrorists or those who would commit violent crime. The 
ATF work force includes approximately 420 field inspectors who 
are responsible for inspection of all 120,000 firearms and 
explosives licensees nationwide. Approximately 12,000 of that 
total are explosives licensees and permittees, and, again, just 
to add, since the passage of the Safe Explosives Act, over 
3,600 additional companies have received permits from ATF.
    Since September 11, inspection of explosives storage 
facilities has been ATF's highest regulatory priority. The 
length of time it requires to conduct an inspection of any 
explosives facilities can vary dramatically, from as little as 
several hours to as much as several weeks. And, of course, our 
prime focus is the safe storage and security of the explosives.
    All persons storing explosives, including State and local 
government agencies, must meet certain storage requirements. 
Now, these storage requirements are contained in a booklet that 
we provide to the public, and they are on our Web site as well. 
Only Federal Government agencies are exempt from storage 
requirements, and that is as authorized by law at 18 USC 
Section 845(a)(6).
    What types of things would an ATF inspector do when they 
went out to check an explosives storage facility? Well, first 
of all, we would look at all magazines to make sure that they 
continue to meet construction, lighting and housekeeping 
requirements. We are going to verify the types and locations of 
all magazines and inspect all structures onsite. We are going 
to verify that the storage descriptions are accurate and that 
there have not been any unreported changes or additions to 
storage. We are going to verify all outdoor magazines meet the 
table of distance requirements; that is the distance that the 
magazines must be set off from public highways, residential 
communities and the like. We will determine the class of 
explosives and appropriate type of magazine for each class, and 
we will conduct an inventory to compare to transactions 
records.
    At the end of fiscal year 2003, there were 11,770 
explosives licensees and permittees in the United States, and 
today we are over 12,000, so it is going up. ATF conducted 
7,883 inspections of those licensees and uncovered 1,165 public 
safety violations. Additionally, last year, ATF opened in 
excess of 4,000 explosives and arson criminal investigations 
and received reports of 79 thefts of explosives. By law, any 
person who has knowledge of the theft or loss of explosive 
material from his or her stock must report that theft or loss 
to ATF within 24 hours of discovery.
    Now, in the past 10 years, ATF has received theft reports 
from State, local and military entities 8 times. In a concerted 
effort to keep all explosives out of the hands of those who 
would use them for criminal or terrorist purposes, ATF 
investigates 100 percent of all reported thefts or losses of 
explosives. And, if I can add, we do more than that. We have a 
secure email net and we provide information on all thefts and 
losses to over 600 State, local and other Federal agencies, to 
include details of the theft and pictures of the explosives 
that have been stolen. After all, they are the individuals who 
may come across them in their work.
    Recently, ATF developed an Explosives Threat Assessment and 
Prevention Strategy at the request of the Attorney General. 
Part of this strategy involves Threat Assessment Guidelines 
that we have issued to explosives industry groups. It covers 
security and other areas that industry members would 
voluntarily strengthen that are not covered by ATF regulations, 
such as employee security awareness training. Our ATF 
inspectors will be using this guideline on current inspections 
for the rest of the year.
    Although we cannot conduct mandatory inspections of State 
and local storage facilities, we do often provide inspections 
for public storage facilities on request. In 2003 and 2004, to 
date, ATF has conducted 39 voluntarily requested inspections 
for explosives storage facilities owned by government entities.
    Our increased inspection efforts post September 11 have 
included a number of initiatives. On September 11, 2001, ATF 
sent out a letters to all Federal explosives licensees and 
permittees requesting them to conduct a full inventory of all 
explosive items in their possession. And we asked that if there 
were any thefts or losses disclosed from this, that they report 
that to ATF immediately.
    In October 2001, ATF initiated a program to inspect as many 
explosives industry members as possible, as quickly as 
possible, to gather intelligence on possible criminal 
activities and to assess and correct security and storage 
vulnerabilities. We conducted a total of 7,459 inspections in 
the ensuing 3 months. The results of this program included 198 
referrals of potential suspicious activities to ATF's law 
enforcement arm and the issuance of 372 violations. This 
increased inspection effort lead to the discovery and immediate 
seizure of over 4 million pounds of improperly stored explosive 
materials at one particular site, the largest seizure of 
explosives in ATF's history. That explosives licensee had its 
Federal license revoked.
    In May 2002, June 2003 and July 2004, ATF sent out 
additional special notices to all Federal explosives licensees 
and permittees, again stressing the need for continued 
vigilance and security assessments as a result of the events of 
September 11, 2001.
    ATF believes in partnering with industry to promote public 
safety. Two examples of these partnerships are the ``Be Aware 
for America'' and ``America's Security Begins With You'' 
Program. In response to the World Trade Center bombing in 1993 
and the Oklahoma City Murrah Federal Building bombing in 1995, 
ATF and The Fertilizer Institute began coordinating an 
awareness program to prevent ammonium nitrate from being 
obtained by those with criminal intent. The ``Be Aware for 
America'' campaign was officially launched in 1997. The 
campaign was designed to help the fertilizer industry be alert 
to suspicious purchasers, to heighten security, to increase 
vigilance over storage and distribution and to ensure that 
persons are able to recognize the theft from, or the 
misreporting of, fertilizer product shipments.
    ATF continues to work with explosives industry members such 
as the Institute of Makers of Explosives, International Society 
of Explosives Engineers, the American Pyrotechnics Association 
and the National Mining Association. ATF personnel attend 
numerous seminars and events sponsored by these organizations, 
and we work with these groups to quickly and accurately 
distribute new information.
    Again, Mr. Chairman, Mr. Lantos and Ms. Eshoo, I appreciate 
the opportunity to testify today and share with you information 
on ATF's explosives enforcement efforts. I would be happy to 
answer any questions you may have.
    [The prepared statement of Mr. Nelson follows:]

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    Mr. Shays. Thank you, Mr. Nelson. Mr. Gulledge.
    Mr. Gulledge. Mr. Chairman, Mr. Lantos, Ms. Eshoo, members 
of the subcommittee, on behalf of Inspector General Glenn Fine, 
we appreciate your invitation to testify. We were invited today 
because we recently reviewed how the ATF inspects firearms 
dealers. And that same body of inspectors also do the 
inspections of explosives licensees. The issues we raised and 
the recommendations we made to improve that program could be 
helpful as the subcommittee examines the safeguarding of 
explosives. I would also point out that our audit section is in 
the final stages of review of the intelligence related to 
explosives, and we will be coming out with that audit in the 
next few months.
    Mr. Shays. Could you please put the mic a little closer, 
and when you are trying to look at us, it takes away from the 
mic a little bit, so----
    Mr. Gulledge. Yes, sir.
    Mr. Shays [continuing]. Just slide it down in the middle 
more.
    Mr. Gulledge. The Evaluation and Inspections section is 
also reviewing the ATF's implementation of the Safe Explosives 
Act. Because we have not finished that review, I don't have 
final data, but I can discuss the issues that we intend to 
examine.
    Let me start by talking about our report on inspections of 
firearms dealers. First, we found that the ATF is not able to 
inspect all gun dealers in person. Application inspections are 
crucial for ensuring that new dealers understand firearms laws, 
but the ATF told us that because of staff shortages, many 
inspections had to be done over the telephone. Now, that is not 
the case with inspections of explosives applicants, as those 
inspections must be done in person. The impact of the resource 
shortages was evident in our analysis of ATF staffing. When we 
examined the field divisions, we saw that some had far fewer 
inspectors relative to their workload than others.
    We also found that the average length of application 
inspections varied widely. The divisions with the fewest 
resources spent the least time on each application inspection, 
as little as 6 hours. Divisions that had more resources took 
longer, as long as 25 hours, on average. According to ATF data, 
the distribution of explosives licensees is also imbalanced 
among the field divisions. It ranges from about seven 
explosives licensees per inspector to over 70.
    In response to our recommendations, the ATF is developing a 
new staffing model to align its inspectors with its workload, 
and it is also seeking to increase the number of application 
inspections done in person.
    Another of our findings was that compliance inspections of 
firearms dealers were infrequent and inconsistent. The ATF's 
goal is to inspect gun dealers every 3 years, but it inspected 
less than 5 percent in fiscal year 2002. At that rate, it would 
take over 20 years to inspect all 104,000 firearms dealers. 
Unfortunately, recent data indicates that the number of 
firearms inspections has fallen as ATF redirected resources to 
accomplish the inspections mandated under the Safe Explosives 
Act.
    We also found that there were significant differences in 
productivity across divisions. The variations we found showed 
that different divisions do not conduct compliance inspections 
in the same way. More importantly, there was little correlation 
between the average time that a division took and how many 
adverse actions it initiated and how many times it identified 
and referred suspected gun trafficking to investigators. We 
recommended that the ATF streamline and standardize its 
inspection process, and once that is done revise its staffing 
requirements to reflect the number of inspectors that it 
actually needs to inspect gun dealers every 3 years. The ATF 
has identified a number of steps that it has taken to implement 
those recommendations.
    One initiative has already improved the ATF's consistency 
in taking adverse actions. In the past the ATF acted 
infrequently to revoke licenses of dealers that had violated 
firearms laws. In fiscal years 2002 and 2003, combined, the ATF 
issued only 84 notices of revocation. In May 2003, ATF 
headquarters issued guidance to ensure that field divisions act 
when they find serious violations. Under the new guidelines, 
the number of revocations has increased substantially. During 
the first quarter of fiscal year 2004, the ATF issued 59 
notices of revocation, which is a better than 5fold increase 
over the rate of the prior 2 years.
    One caution about that: We found that the adjudication 
process for those revocations was lengthy. It averaged about 
379 days from the time an inspector recommended it until the 
time the case was closed. And that was due, in part, to the 
heavy workload that is put on the ATF's legal staff. As 
firearms and explosives cases rise, the competition for those 
legal resources will also increase.
    Let me now turn to our review of the ATF's implementation 
of the Safe Explosives Act. After September 11, the Congress 
passed this act to reduce the chance that would-be terrorists 
could easily obtain explosives with which to carry out attacks 
in this country. We are examining how effectively the ATF has 
implemented the licensing and inspection programs required by 
the act.
    Our review will examine the trends in revocations and 
denials before and after implementation of the act, as well as 
the efficiency and effectiveness with which the ATF is carrying 
out its inspection program. We expect that many of the actions 
that the ATF has already agreed to implement will extend to its 
explosives inspections.
    Regarding the actions that the ATF is taking, on behalf of 
the Inspector General, I would like to say that we appreciate 
the responsiveness and the willingness that the ATF has shown 
to address the problems we reported. ATF managers have taken 
the matters seriously and we believe they are taking positive 
actions that will improve the ATF's operations.
    That concludes my statement, and I will be pleased to 
answer any questions.
    [The prepared statement of Mr. Gulledge follows:]

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    Mr. Shays. Thank you very much. We have the clock right 
over there. We do 10-minute questioning. I will turn to Mr. 
Lantos and then Ms. Eshoo.
    Mr. Lantos. Thank you very much, Mr. Chairman. I want to 
thank our two witnesses for their very informative testimony.
    Let me say at the outset that whatever term of criticism my 
colleagues or I may have with regard to some of these issues, 
it is not aimed at the very hard working and honest and public 
spirited individuals who work at these organizations. But since 
the issues are literally issues of life and death, we have to 
see to it that episodes such as the one we had here in San 
Mateo County don't occur.
    Let me turn to Mr. Nelson first. In your testimony, on page 
4, you state that of the--you are talking about the year 2003, 
which is the last year for which you have statistics. You say 
that there were 79 thefts reported in 2003. Seventy-three were 
from private and commercial licensees, and 6 were from public 
sector facilities. Can you give us an idea of how the six 
thefts from public sector facilities are similar to, dissimilar 
from the one we had here in San Mateo County? In how many of 
these instances were arrests made, and in how many of these 
instances were the explosives recovered?
    Mr. Nelson. I think in most of the cases the thefts were 
accomplished by breaking the lock, torching the lock, getting 
in through that way. That is one of the most common ways of 
entry. As far as recoveries from public sector thefts, I would 
have to develop that information and provide it to you.
    Mr. Lantos. Well, what is your impression? Were all of the 
criminals who committed these acts apprehended?
    Mr. Nelson. I don't know. I would have to find out. I 
suspect in some cases probably not. I don't have that 
information with me.
    Mr. Lantos. The choice, sir, would imply that the 
explosives were not recovered.
    Mr. Nelson. That could be.
    Mr. Lantos. That could be.
    Mr. Nelson. I could get data on explosive recoveries as 
well.
    Mr. Lantos. Well, let me ask you to comment specifically on 
the San Mateo case. You have now studied it. It is receiving 
national attention. What is your ex-post analysis of what 
happened and why it happened?
    Mr. Nelson. Well, since that case is an active criminal 
investigation, I won't provide a comment on it. It is under 
criminal investigation right now, sir.
    Mr. Shays. Can the gentleman just give us the details 
without having to mention names and so on of what happened? I 
mean I would think you have some capability to do that.
    Mr. Nelson. Well, we believe we have recovered all the 
explosives, and we have made the four arrests, and it is still 
an active investigation.
    Mr. Shays. Can you talk about the facility, how it is set 
up, whether it met standards and so on? I mean aren't these 
questions that you want to go through? We aren't here to--we 
are here because--it would be kind of absurd not to be able to 
have something to talk about.
    Mr. Nelson. It was a blow torch entry and there were about 
200 pounds of explosives that were taken, that was emptied out, 
30 to 35 pounds of plastic explosives, 114 pounds of binaries, 
800 to 900 blasting caps, some data sheet and some dat cord and 
other items.
    Mr. Lantos. Well, who or what was taken, that is really not 
Chairman Shays' question and not my question. We visited the 
site. There are four sheds. Three of them, as far as we could 
determine, had no alarm mechanism whatsoever. One had a non-
functioning alarm mechanism. How typical is this at public 
facilities where explosives are stored?
    Mr. Nelson. Well, the only requirement that the public 
facilities have is to comply with our regulations, and we do 
not require alarm systems. Now, many industry members do have 
them.
    Mr. Lantos. Why don't you require alarm systems?
    Mr. Nelson. Well, it is not currently in the regulations.
    Mr. Lantos. Well, I understand, but why are they not? That 
is the question.
    Mr. Nelson. Well, in my statement, I mentioned the 
explosives threat assessment and prevention strategy that we 
are working on, and one of the things we have done is 
distribute to the industry groups a number of voluntary items 
they can take to strengthen the security----
    Mr. Lantos. You say voluntary items.
    Mr. Nelson. Yes, sir.
    Mr. Lantos. Now, what do you do when they choose not to do 
so? I mean this is an arena where to have voluntary suggestions 
is lunatic. These have to be mandatory, mandatory provisions. 
Does ATF have a view today, 3 years after September 11, whether 
the suggestions should be voluntary or whether these are 
mandatory requirements, and if they are not followed, there 
will be a revocation of license?
    Mr. Nelson. One of the requirements under the explosives 
statute, at 18 USC 942(j), is that our regulations must comply 
with the general standards of safety and security of the 
industry. Now, we can propose regulations, and of course we 
would have to do a cross-benefit assessment as part of that 
process. We currently have regulations----
    Mr. Lantos. Have you proposed changes? Have you proposed 
that these regulations be mandatory?
    Mr. Nelson. We have not. The current regulation that we are 
considering will require a strengthening of the magazines' 
construction themselves to provide better bullet resistance, 
and that is currently being worked on.
    Mr. Lantos. But it is still voluntary. It is not mandatory.
    Mr. Nelson. Well, if this reg gets finalized, additional 
security in the form of the construction would be required.
    Mr. Lantos. Mandatory?
    Mr. Nelson. Mandatory. But with the explosives threat 
assessment, while we consider whatever other regulations we 
might want to propose in a Notice of Proposed Rulemaking, we 
have gone to the industry and we have asked them, ``Here are 
some additional steps we would like you to take on a voluntary 
basis.'' Now, all of the industry groups have indicated to me 
that they wish to cooperate and to do these things, and many of 
them are already accomplishing this. One of them is alarm 
systems, cable TV cameras, training for employees, better 
screening of visitors and repairmen and other people who might 
come to the site. Those type of things, we cannot impose them 
without going through a rather lengthy regulatory process. In 
advance of considering additional regulations, we have gone out 
with this voluntary concept.
    Mr. Lantos. Well, let me say to you, Mr. Nelson, speaking 
just for myself, that this voluntary concept 3 years after 
September 11 just doesn't wash, and the leisurely approach 
which your testimony reflects I find appalling. We are 3 years 
into a declared war on global terrorism, and we are still 
making voluntary suggestions, which obviously are not doing the 
job, and based on your own testimony, we are talking about 79 
thefts of explosives last year. But that indicates to me that 
something better has to be put in place than what it is in 
place.
    Let me turn to Mr. Gulledge. Your testimony, sir, is a 
devastating indictment of ATF. Let me quote from your 
testimony: ``Although we recognize that the ATF's resources are 
limited, we concluded that the ATF's lack of standardized 
inspection procedures resulted in inconsistent inspections of 
Federal firearm licensees and significant variation in the 
implementation of the inspection program by the field 
divisions. Moreover, the lack of consistency prevented the ATF 
from ensuring that its current resources are being used as 
efficiently as possible.''
    Now, this is a very heavy indictment. You are saying that 
they are not doing the job right at a time when the country is 
engaged in a global war on terrorism. What are your specific 
comments about the San Mateo episode?
    Mr. Gulledge. Well, the San Mateo episode really--it 
depends on what the Congress decides to do regarding----
    Mr. Lantos. We can't hear you.
    Mr. Gulledge. I am sorry.
    Mr. Shays. I suggest that since you want to be courteous 
and look at us, you move away from the mic. Let's see how that 
works.
    Mr. Gulledge. Can you hear me now?
    Mr. Shays. Yes, we hear you pretty well.
    Mr. Gulledge. OK.
    Mr. Lantos. You have to speak up a bit too.
    Mr. Gulledge. OK. Thank you. It would depend on what the 
Congress decides to do regarding whether or not the ATF is 
required to visit those sites. The workload right now is 
unknown, to my understanding. That is, we don't know where all 
of these sites may be across the United States.
    Mr. Lantos. Is it your testimony that as we sit here this 
morning we do not know how many such sites there are?
    Mr. Gulledge. To my knowledge, we do not.
    Mr. Lantos. Mr. Nelson, is that accurate?
    Mr. Nelson. Are you referring to explosives sites, 
generally, sir?
    Mr. Lantos. Public sites.
    Mr. Nelson. I have not a total count. I know there are 
approximately 400 plus bomb squads, all of whom would probably 
have some sort of facility, but I do not know. There is no 
requirement for them to report it to us.
    Mr. Lantos. Well, how difficult would it be for a large 
agency to at least have an accounting of how many sites, such 
as the one here in San Mateo County, exist in the United 
States? How huge a task is that?
    Mr. Nelson. We could attempt it on a voluntary basis, reach 
out to all----
    Mr. Lantos. Why on a voluntary basis?
    Mr. Nelson. There is no requirement for them to report this 
to us.
    Mr. Lantos. Are you recommending that there be a 
requirement?
    Mr. Nelson. Well, that would take an act of Congress.
    Mr. Lantos. No. I am asking whether your agency is 
recommending that Congress act?
    Mr. Nelson. We would be happy to make technical comments 
and discuss any proposals----
    Mr. Lantos. I am not asking you whether you want to make 
technical comments. I am asking you, representing an agency, 
whether you are prepared at this stage to recommend a complete 
accounting for all such facilities, which it seems to me is 
step one in regulating them. If you don't know how many there 
are, how can you regulate them?
    Mr. Shays. I am going to just ask the audience to refrain 
from the laughter, in general, just simply because this is a 
hugely important issue, and it would help us to just continue 
without the laughter. Thank you.
    Mr. Nelson. We do not--anything we attempt, and it is 
probably a good idea to get this count, would have to be 
voluntary. We do not have the authority to require agencies----
    Mr. Lantos. Are you asking for the authority?
    Mr. Nelson. We have not asked for it.
    Mr. Lantos. Why not?
    Mr. Nelson. Again, when it comes to State and local 
agencies, we partner with them in many things, but we are not 
their regulatory agency.
    Mr. Lantos. But don't you minimally need to know how many 
such facilities there are in the United States?
    Mr. Nelson. Could you repeat the question, sir?
    Mr. Lantos. Yes. Wouldn't step No. 1 in dealing with 
thefts, such as the one we have here in San Mateo, be to know 
how many such facilities there are and where they are located?
    Mr. Nelson. One thing that we did in 2001 is we put out a 
letter to all State and local law enforcement agencies about 
their requirements for storage and the fact that we would do a 
voluntary inspection. Some weeks ago, we started developing 
another letter to go out and as part of that we are again 
offering to do these inspections. We can certainly develop a 
list from this effort, I would think.
    Mr. Lantos. Well, you have 39 responses; isn't that right?
    Mr. Nelson. We had 39 requests for inspections.
    Mr. Lantos. Thirty-nine places requested that you inspect. 
What percentage is that of the total facilities? What would be 
your guess?
    Mr. Nelson. Well, I have already said that we don't have an 
accurate number of those facilities, but if there were 400 bomb 
squads, it would be about 10 percent.
    Mr. Lantos. Thank you, Mr. Chairman.
    Mr. Shays. Thank the gentleman. And we thank our witnesses 
as well. We are going to get to the bottom of these issues, and 
it is just real important for us to understand the mind-set, 
and what I am hearing is that somehow, on the public side of 
the equation, we just have had a hands off, and I think your 
questions, Mr. Lantos, are going to lead to some very 
interesting changes. Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman, and thank you to the 
witnesses for your testimony. How many law enforcement 
munitions storage facilities are there in the United States?
    Mr. Nelson. We don't have a list of such facilities.
    Ms. Eshoo. You referred to private over and over again in 
your testimony. When you say private, what are you referring 
to? Do you have any numbers for private? You don't have any for 
public, but you mentioned private.
    Mr. Nelson. Well, for the last year, we've been entering 
data into our inspection data base on the number of magazines. 
Now, this is done by licensee and permittee basis as we inspect 
them, and we've developed a list of over 8,000----
    Ms. Eshoo. Is the inspection still once every 3 years?
    Mr. Nelson. We are required to inspect licensees every 
application. So the license is good for 3 years, so when it 
comes up for renewal we will do an inspection. We also inspect 
more frequently those licensees who have thefts, who have had 
public safety violations or other compliance problems.
    Ms. Eshoo. I can't help but think so far of the analogy of 
the term, ``safety net,'' that is used in the health care arena 
and what kind of shape our health care safety net is. I have a 
sinking feeling that the safety net when it comes to this area 
is pretty tattered as well. Is there any centralized list 
maintained by the ATF, either on the public or the private 
side?
    Mr. Nelson. On the licensed industry, we are developing 
such a list.
    Ms. Eshoo. You don't have one yet.
    Mr. Nelson. We are about one-third of the way through.
    Ms. Eshoo. So nothing on the public side and one-third of 
the way on the private side.
    Mr. Nelson. As far as developing a list of magazines, that 
is correct.
    Ms. Eshoo. Why wouldn't you have this inventory?
    Mr. Nelson. Now, I have to say that----
    Ms. Eshoo. How do you measure how you are serving and 
inspecting if you don't even have an inventory of who is there, 
either public or private?
    Mr. Nelson. Well, we have the information in files for each 
licensee, but we haven't put it into a data base starting a 
year ago, so when we do an inspection the first thing the 
inspector looks at is the magazine list, to go out to inspect 
all those magazines to make sure they are still there and they 
are still in compliance with all the requirements.
    Ms. Eshoo. Is it true that prior to September 11, 2001 the 
ATF policy was not to investigate every theft or loss of 
explosive materials?
    Mr. Nelson. Our policy----
    Ms. Eshoo. It can be yes or no.
    Mr. Nelson. Well, it was not our policy to investigate 100 
percent.
    Ms. Eshoo. What percentage?
    Mr. Nelson. I don't have that information.
    Ms. Eshoo. And have your policies changed since then?
    Mr. Nelson. Yes. Starting in 2002, we have a policy to 
inspect or investigate every reported theft of explosives, and 
we just entered into an agreement with The Fertilizer Institute 
to get reports of stolen ammonium nitrate and we investigate 
all such thefts.
    Ms. Eshoo. Is the facility that is in question, the 
facility here in San Mateo County, is that a facility that is 
exempt from your guidelines or is it included in it?
    Mr. Nelson. The agencies are required to store in 
accordance with our guidelines, by law.
    Ms. Eshoo. Are they ever inspected by your professionals?
    Mr. Nelson. They would only inspected if it is requested.
    Ms. Eshoo. Was it requested?
    Mr. Nelson. Not to my knowledge.
    Ms. Eshoo. Ever?
    Mr. Nelson. I don't have any knowledge that is was.
    Ms. Eshoo. To what extent do ATF officials enforce any kind 
of needed improvements? I mean if you haven't been out to 
inspect, you are not going to see whether something is working 
efficiently or effectively.
    Mr. Nelson. We put out periodic newsletters to the industry 
giving them some advice, but, basically, it is the inspection 
when we are onsite to see the condition of the magazines.
    Ms. Eshoo. But the inspection is really based on something 
that is somewhat voluntary or a request from another agency, 
correct?
    Mr. Nelson. The inspection of public facilities is 
voluntary. The inspection of private facilities is mandatory.
    Ms. Eshoo. Now, I think, Mr. Chairman, we have something 
right on its head right there, I mean that private facilities 
are mandatory and public facilities are not. I think in a post-
September 11 era that it is either the Congress instructs this 
agency to protect the public or I mean we have to do that 
ourselves. This is a gaping hole in this. So I think that is 
something that we are going to have to pay attention to.
    Would an ATF inspector have necessarily cited a 
malfunctioning alarm in proximity to a nature trail in an 
inspection report? Or do they just not--I have a sense that you 
are putting out newsletters and memos. I don't have a sense 
that there are human beings there that have seen the place and 
know the condition, understand the proximity and understand 
what the situation actually holds relative to the public.
    Mr. Nelson. When we do our compliance inspections, we do 
have a work plan that the inspectors go through, and we look 
for changes in construction to see if there is any kind of a 
problem. We look at the----
    Ms. Eshoo. Do you have a copy of such a report relative to 
this?
    Mr. Nelson. The work plan?
    Ms. Eshoo. Yes.
    Mr. Nelson. I can provide it. I don't have it with me.
    Ms. Eshoo. I think that it should be provided to the 
committee.
    [The information referred to follows:]

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    Ms. Eshoo. There is something else, Mr. Chairman, that I 
think that we should take a look at in the broader examination 
of this, and that is the chemical security. We mentioned the 
Murrah Building in 1995 and even without access to explosives, 
a person with proper knowledge can make a highly destructive 
bomb. And I think that is an area that we are going to have to 
pay close attention to in this. It is not simply the materials 
that these units held but also as is the case on the world 
stage, what can be done with these explosives in the wrong 
hands, what the chairman of the 9/11 Commission referred to as 
imagination. We have to have our own imagination about where 
these things can lead, and we are in charge of really reshaping 
these things given what we have already been made to imagine 
and understand.
    So I think, Mr. Chairman, that there are already some key 
areas that need to be plugged up. This whole notion of private 
and public having different standards I don't really think is 
acceptable. Thank you.
    Mr. Shays. All set?
    Ms. Eshoo. Yes.
    Mr. Shays. Thank you, and I agree with the lady. When I was 
preparing for this hearing, I read an introduction to just the 
explosive industry. I want to read--believe it or not, this is 
just a short part of it. I thought it was one sentence, I think 
it is two. It says, ``The use of explosives in the United 
States as made possible a standard of living that is widely 
recognized as the finest in the world.'' When I read that, I 
thought that was bizarre until I read on. ``Virtually all the 
progress in the American standard of living has in some measure 
been impacted by the use of explosives, whether for building 
and development of infrastructure, creating one of the greatest 
transportation systems in the world, while also extracting 
valuable minerals from the Earth or in 100 other ways.'' And it 
was an important statement for me to read.
    This is a hugely important industry, it impacts all of our 
lives, and we are not trying to shut it down or to put it out 
of operation. We want to know, though, how this system works. 
So we accept that it is an important element to a modern 
society. And in my backward way of thinking, I think of 
explosives more in a negative way rather than a positive.
    Having said that, listening to the statements and listening 
to my two colleagues, it is astounding to me what we don't 
know. And I wonder if, in the back of my mind thinking, are we 
so loose about this because somehow this gets into the issue, 
in a certain kind of way, of gun control or in other words, 
``Don't tread on me. It is in the Constitution and so on.'' And 
I just want to have a sense, we aren't suggesting in any way 
that regulating the use of explosives somehow is related to the 
issue of gun control. Is it directly or indirectly related to 
that issue? Is that why--does this make it a sensitive issue?
    Mr. Nelson. Of course, the ammunition is fired by an 
explosive, but I don't see the link.
    Mr. Shays. Well, that would be the only link, basically.
    Mr. Nelson. I mean we work very closely with the explosives 
industry. These are professional people that want us to be safe 
with explosives.
    Mr. Shays. Well, I understand that. And I understand we 
want to be safe. What I don't understand is how we don't have 
basic things like how many private facilities there are to be 
inspected and how many public facilities there are to be 
inspected and to be made safe. And that I find bizarre.
    And I will tell you--and I am smiling and I understand the 
laughter in the audience as well-but it needs to be silent 
smiles, I guess. I smile because when I went to see this 
facility, I was really surprised. I mean I had been led to 
believe that there was this mechanism alarm system and given 
that there is not electricity to it, solar panels makes sense, 
that is one way, and then I realized it is sitting on the top 
of one shed, and there are three other--four or three other 
sheds?
    Mr. Lantos. Three others.
    Mr. Shays. Three other sheds without an alarm system. And I 
expected to see a fenced in area, not at the gate when you 
drove in but around the facility, much like you have in a 
transmissionsite along electric generation with barbed wire. So 
I expected, one, to see the alarm system posted to every one of 
the sheds and a fenced in area, and I thought that rather than 
being able to drive our car casually up, there would be some 
difficulty in basically even bringing a van up to it unless you 
had special kind of keys. So I am not surprised that someone 
could come and try once and maybe fail and come back the next 
day.
    And so what I am interested in first knowing from you, Mr. 
Nelson, is when you would look at that as a private facility 
versus a public facility, what was lacking that you would 
expect in a private facility?
    Mr. Nelson. I personally haven't been to that site, so I 
don't know exactly. I have been told that it would largely be 
in compliance with our requirements.
    Mr. Shays. Is there somebody on your staff who has been to 
the site that could give testimony? Is there someone else who 
could speak to that issue?
    Mr. Nelson. No.
    Mr. Shays. No. It is really too bad you didn't go to that 
site. That would have been helpful to us, and I guess we should 
have--I just had an assumption you would.
    Well, I will just tell you, I just saw sheds with some very 
small panels, and if you sometimes, as you do here, get 
overcast skies, I would think the panels would be bigger and 
storage would be bigger to do it. We will be asking someone 
about that facility, and we can do that then.
    So we need to be clear about this. How many private 
facilities exist? Do we know that?
    Mr. Nelson. We don't have an exact count. It would be very 
difficult to develop an exact count.
    Mr. Shays. Well, it will happen, I can assure you. That is 
something that is going to happen from this hearing. Whether 
you recommend it, if you choose not to or your agency chooses 
not to, we certainly will.
    Mr. Lantos. Mr. Chairman.
    Mr. Shays. Yes.
    Mr. Lantos. May I break in?
    Mr. Shays. Absolutely.
    Mr. Lantos. I find your answer very puzzling, Mr. Nelson, 
because the private facilities need to be licensed for 3 years. 
So all you have to do is get an abacus and add up the number of 
licenses that were requested. How on earth is it possible for 
you under oath to tell us that ATF doesn't know how many 
private facilities there are if you have to license them?
    Mr. Nelson. Sir, we know how many licenses and permits we 
have issued. We know what the population of that is. But some 
licensees have one magazine, like a 50-pound box inside a black 
power shop, other companies might have hundreds of magazines.
    Mr. Shays. See, what is troubling, though, is it is might, 
and----
    Mr. Nelson. Some do.
    Mr. Shays. No, I understand, but in other words, that 
doesn't impact me the way it seems to impact you. It seems to 
me, we would want to know how many are smaller, how many are 
larger. We would want to--that is like basic information it 
would seem we would want, and that was the reason why I was 
asking about is this somehow related to some other issue that I 
am not aware, because it would seem to me that you would want 
to be responding to Mr. Lantos by saying, ``Mr. Lantos, we 
should get this information and since September 11 we have 
recommended that we do,'' and then if you recommend it, then we 
go up the chain and sometimes it is Congress.
    Sometimes people will actually testify in Congress and say, 
``Well, do have it, we just didn't spend the money.'' But, 
ultimately, Congress needs to be told, and then we are the ones 
who have to be held accountable. But if the people, the 
administrators are not recommending it, it puts the focus a 
little differently.
    So at any rate, there are a number of private facilities 
that range in sizes, and we don't really know, but you have the 
data somewhere in the permits and you--yes.
    Mr. Nelson. Yes, sir. We have all the data on all the 
magazines in permit files. We haven't added it up, and we are 
doing that.
    Mr. Shays. And we need to. And we need to add them up. One 
of the things I am struck with--and in the public sector, we 
don't even request that, is that correct, because you don't 
oversee it?
    Mr. Nelson. We do not oversee it.
    Mr. Shays. So one of the things I think our committee would 
want to recommend is, one, that you seek to do that quickly and 
we still have an appropriations process in play, and we should 
be checking that out.
    Ms. Eshoo. Would the chairman yield for just a moment?
    Mr. Shays. Sure, absolutely.
    Ms. Eshoo. Does the ATF permit States and local governments 
to develop regulations on this, create their own regulations 
regarding explosives?
    Mr. Nelson. Absolutely. States have the right to develop 
their own explosives regulations and licensing regimes. And we 
would be happy to work with any State and provide technical 
advice.
    Mr. Shays. Yes, I know that, but we would be happy if you 
were more happy to do more than that. In other words, given 
September 11--I mean we don't think it is a question of if but 
when, where and of what magnitude you are going to deal with 
some very horrific attacks on the United States. I mean that is 
something I certainly believe and I think other Members do as 
well. One obviously is the convention weapon or a conventional 
weapon with radioactive material. Plastic explosives are 
obviously a concern because of their challenge in sometimes 
being detected and so on. And they are all in these facilities.
    What is troubling to me is once we get to the point of not 
knowing how many facilities we have, publicly or privately, it 
is the concept of voluntary participation. I want to be clear, 
does the requirements overseeing the private sector, are these 
regulations designed by the industry or by the government?
    Mr. Nelson. We are required by statute to consider the 
standards of the industry as we develop our regulatory scheme.
    Mr. Shays. But your regulatory scheme trumps whatever the 
industry does, correct?
    Mr. Nelson. That is correct.
    Mr. Shays. So they have to live up to your requirements.
    Mr. Nelson. That is right.
    Mr. Shays. Now, when you went through what the requirements 
state, the next thing that begs the question is if actually you 
all are living up to that requirement. Are inspections 
happening every 3 years, without question? Are you on top of 
that or are you lack of manpower, meaning that you are not able 
to live up to even your requirements?
    Mr. Nelson. We have testified--previous directors have 
testified and we have reported to Congress of the need for 
additional inspector resources. We are getting----
    Mr. Shays. Because you are not able to live up to the 
standards.
    Mr. Nelson. We are getting the job done on the Safe 
Explosives Act mandatory inspections, but it is difficult to do 
a lot of other things because of it.
    Mr. Shays. So the inspections of firearms facilities and so 
on are being pushed aside.
    Mr. Nelson. Well, we have to do what is mandatory first and 
use our resources as best we can----
    Mr. Shays. Let me just back up. The bottom line is for 
budgetary reasons, from your standpoint, we aren't meeting the 
requirements that you are required to do. This is not a trick 
question.
    Mr. Nelson. Well, we----
    Mr. Shays. Let me just explain something to you, Mr. 
Nelson. If you don't answer candidly, then you give us a pass. 
If you answer--besides the fact you are required to, but when 
you answer candidly, then we understand the problem. Don't 
disguise the problem from us because we are in a capacity to be 
helpful.
    Mr. Nelson. Right. We have previously testified and we have 
reported that we need significant additional resources.
    Mr. Shays. In order to do that job.
    Mr. Nelson. In order to get the job done.
    Mr. Shays. OK. So we don't know the number of sites, either 
private or public. We have certain requirements, and so walk me 
through what the requirements would be on a site. And I will 
tell you, I have gone through my second pass. I am going to 
take another 5 minutes, and I will give other Members a chance 
here. And then what I want to do is understand--well, tell me 
what a site should look like, first off. If this was a private 
site, what would the site look like? What would it be required 
to have?
    Mr. Nelson. OK. First of all, we look at the magazines that 
are there to make sure that they have proper locks, proper 
doors, proper linings.
    Mr. Shays. So what we referred to as sheds, you refer to as 
magazines.
    Mr. Nelson. Right, that is correct. And there are----
    Mr. Shays. So what do they need?
    Mr. Nelson. They need to have proper construction----
    Mr. Shays. Right.
    Mr. Nelson [continuing]. Proper locks, proper doors, proper 
housekeeping----
    Mr. Shays. That is recordkeeping?
    Mr. Nelson. No. Housekeeping would be trash, dried grass. 
Anything that would be flammable has to be kept away from it.
    Mr. Shays. It needs lights?
    Mr. Nelson. If it has lights, they have to comply with the 
regulations. Many do not have lights. It is has to have proper 
roof. Of particular importance is its location. It has to be 
located a certain distance from residential inhabited 
buildings, from public highways, from passenger railroads. We 
do take measurements of these facilities to the nearest public 
road or to a house if it looks to be a concern. One of the 
concerns we have is encroachment of civilization on these 
items.
    Mr. Shays. Does it have to have an alarm system?
    Mr. Nelson. They are not required to have an alarm system.
    Mr. Shays. Do they need to have video cameras?
    Mr. Nelson. That is not required.
    Mr. Shays. If a site is broken into, what is the penalty if 
someone doesn't report a theft?
    Mr. Nelson. If a store doesn't report it, it is a felony.
    Mr. Shays. OK. So they are clearly breaking the law. If 
they report it, do they have to give you a clear inventory of 
what is missing?
    Mr. Nelson. Yes. They have to give us a complete inventory.
    Mr. Shays. If something is not reported, do they have to 
count account for every explosive device that is used, so if 
you went in, you would be able to ask them how many explosives 
devices were used at each particular place?
    Mr. Nelson. They have to keep a daily summary of magazine 
transactions for each storage facility that shows what went in 
and what went out every day.
    Mr. Shays. OK. And that is not voluntary; they have to do 
that.
    Mr. Nelson. That is correct.
    Mr. Shays. If they don't do it, they lose their license.
    Mr. Nelson. They could lose their license if it is a 
willful act.
    Mr. Shays. OK. The interesting thing is if someone wanted 
to cover up an event, they would simply claim that an error was 
detonated at a certain site, and since you don't really have 
something recoverable, they can just----
    Mr. Nelson. Since it is consumed, that is correct.
    Mr. Shays. OK. All righty. I have asked the questions I 
wanted. Is there any questions any of you want--is there any 
question, Vince, that we needed to ask? OK.
    Mr. Lantos. I would like to go through one item. I am 
profoundly puzzled by this repeated distinction between private 
and public facilities. Let me take you to another arena. Let me 
take you, for instance, to the hospital arena or the university 
arena where, clearly, for certain purposes, there is no 
distinction. Publicly owned hospitals must live up to the same 
requirements that privately owned hospitals have to live up to. 
They have to have the same standards of sanitation, they have 
to have equally qualified people, whether they are physicians 
or nurses or what have you, they must live up to the same 
requirements with respect to dangerous waste disposal, because 
these are functional concepts and they have nothing to do with 
ownership, whether these are privately owned or publicly owned. 
The University of California Medical School, which is in my 
district, has exactly the same requirements along a myriad of 
items that Stanford University Hospital in my good friend's 
district has to live up to.
    Explain to us, both of you gentlemen, if you would, a 
logical rationale for establishing what to me are nonsensical 
differentials between what you require of private facilities 
and public facilities? Because what we are dealing with is 
explosives. The explosive doesn't know whether it is located in 
a privately owned facility or in a publicly owned facility. It 
is just an explosive, a very dangerous thing. Why wouldn't a 
rational approach by an agency, which is responsible for the 
safety thing of this, have the same regulations whether the 
entity is privately owned or publicly owned?
    Mr. Nelson. We do have the same regulations, and the public 
facilities, by law, must comply with our standards. However, 
Congress exempted the State and local agencies from all other 
explosives controls when the law was passed in 1970. We have no 
inspection authority.
    Mr. Lantos. I will be the first one to stipulate Congress 
passes very stupid laws with great frequency. [Laughter.]
    Since this was done in 1970----
    Mr. Shays. You are definitely allowed to laugh at that one. 
[Laughter.]
    Mr. Lantos. Since this was done in 1970, Mr. Nelson, has 
your agency requested, before or after September 11, that the 
same provisions apply to both public and private facilities? 
And if not, why not?
    Mr. Nelson. I don't believe we have.
    Mr. Lantos. And why not?
    Mr. Nelson. We have not, and I can't answer that.
    Mr. Lantos. Well, now that you have had the pleasure of our 
questioning, will you go back to your head office and recommend 
that the same safety provisions apply to both publicly and 
privately held facilities?
    Mr. Nelson. I will certainly be discussing it.
    Mr. Lantos. What is your own view?
    Mr. Nelson. My view is that those facilities should comply 
with all the standards that private facilities should comply 
with.
    Mr. Lantos. On a mandatory basis or on a voluntary basis?
    Mr. Nelson. Well----
    Mr. Lantos. I mean that is the crux of the issue.
    Mr. Nelson [continuing]. It would certainly be helpful if 
the States would require this compliance.
    Mr. Lantos. Well, let's assume--this is not a State issue, 
this is a country, and whether the explosive is stolen from San 
Mateo, it can be transported to Nevada and be used there. This 
is not a States' rights issue, so don't divert us in that 
direction, because we just won't follow. Do you recommend on 
the basis of this hearing that the same safety provisions be 
applied to private and public facilities on a mandatory basis?
    Mr. Nelson. Yes.
    Mr. Lantos. Thank you. How about you, sir?
    Mr. Gulledge. The application of the inspection 
requirements is really Congress' decision to make.
    Mr. Lantos. We understand that. What is the recommendation 
of the Department of Justice?
    Mr. Gulledge. Certainly, on behalf of the Inspector 
General, I think that we would want to look at this a little 
closer before we make a specific recommendation for 
legislation. I would point out to you at this time, though, 
that it would be a little more encompassing than just State-
owned. There are other facilities out there that are not 
subject to ATF regulation, for example, those that are overseen 
by the Mine Safety and Health Administration. ATF doesn't 
oversee those, so if you want to come up with an all-
encompassing regulation, we need to identify all of those.
    Mr. Shays. You are talking about the Federal Government.
    Mr. Gulledge. Yes. Yes. And the military. Certainly, they 
are going to be exempted from certain parts of this because of 
the volume that they deal with. And we really want before we 
get back with you to sit down and think about what we would 
recommend that you do.
    Mr. Lantos. Well, no one is recommending that the military 
be subjected to ATF rules and regulations. What we are talking 
about civilian agencies.
    Mr. Gulledge. Clearly, expanding inspection oversight to 
those areas for which the regulations already apply would be a 
logical extension.
    Mr. Lantos. Thank you, Mr. Chairman.
    Mr. Shays. Ms. Eshoo.
    Ms. Eshoo. Just a few quick questions. Mr. Nelson, you went 
through a list of areas that raise the introspect of your 
agency. Not having gone out to see this site, which is 
unfortunate, I think that the whole issue of the public's 
drinking water supply should be taken into consideration where 
explosives are stored, because, surely, this site fits into 
that category, and we can't afford to have the better part of a 
region without a protected water supply.
    Which leads me to my next question, which I would like to 
ask Mr. Gulledge. At what point, in your opinion, do cases like 
this one transcend a law enforcement issue and become a 
question of homeland security?
    Mr. Gulledge. Certainly, any time you see a vulnerability, 
at the Inspector General's Office we would want to point that 
out so that the agency or the Congress can act on it. Any time 
you identify a gap in our coverage of protections. I don't 
think there is a bright line, but, clearly, this case has 
exposed a vulnerability.
    Ms. Eshoo. I think in working with the committee that you 
consider any standards or guidelines being put into place to 
alert the Department of Homeland Security officials of the 
security threat such as this one. Life is not tidy anymore, for 
sure, and I think that what we are suffering from in our many 
agencies, certainly, we are--I am meeting tomorrow to be going 
back to D.C. for the hearings that are commencing on the 
recommendations of the 9/11 Commission relative to our 
intelligence community, and we know that there are, have been, 
so many smokestacks, so to speak. And I think that we have a 
smokestack quality here to this issue as well. We can't have 
Federal agencies pointing fingers, doing this, going in 
different directions on this and the gaps between public and 
private, the overlap of Department of Homeland Security 
relative to the guidelines on these explosives, etc. So I just 
wanted to point that out.
    I also want to know-and I am not so sure that this has been 
set down and whether it is absolutely clear--where does the ATF 
jurisdiction begin and end relative to the issue that this 
hearing is about?
    Mr. Nelson. With regard to explosives, it begins when the 
explosives are created and enters storage, and----
    Ms. Eshoo. For both public and private or not?
    Mr. Nelson. Well, for the storage, it is public and 
private; yes, ma'am. We do not regulate the transportation of 
explosives, so explosives get produced and they might be stored 
for a few days, then they are loaded onto trucks or----
    Ms. Eshoo. So your jurisdiction is both public and private 
for the storage and for maintenance of the explosives. And then 
you have inspections or those are voluntary?
    Mr. Nelson. The inspections of licensed entities are 
mandatory. They are involuntary.
    Ms. Eshoo. That is where there is a separation between 
public and private.
    Mr. Nelson. They are warrantless inspections as well.
    Ms. Eshoo. Thank you. Thank you, Mr. Chairman.
    Mr. Shays. We are going to close up real quick, but just to 
clarify the record, Mr. Nelson, the issue of oversight of 
private facilities you have law and regulation that basically 
requires them to move up to the Federal standard and you 
inspect them, correct?
    Mr. Nelson. That is correct.
    Mr. Shays. And they can't trump what the Federal Government 
requires. I mean they can do better, but they can't do worse.
    Mr. Nelson. That is correct.
    Mr. Shays. When it comes to local facilities, I thought you 
were basically saying public facilities have to conform to the 
Federal standards but you don't inspect them. I don't think 
that is accurate, so I must have misunderstood.
    Mr. Nelson. That is correct. They have to conform to our 
storage requirements, magazine construction, etc., but we do 
not have inspection authority.
    Mr. Shays. OK. But they don't necessarily have to conform 
to your recordkeeping. They have to conform to everything----
    Mr. Nelson. That is correct.
    Mr. Shays. So they have to conform to some but not 
everything.
    Mr. Nelson. That is right.
    Mr. Shays. The bottom line is if they don't, you can't hold 
them accountable. One, you can't inspect them, and, two, you 
can't hold them accountable, correct?
    Mr. Nelson. I think our only alternative if we had a 
serious enough matter would be to go to the U.S. Attorney for 
prosecution.
    Mr. Shays. Well, it is interesting that to think, and I am 
trying--there is a reason why everything tends to happen, 
whether it is a good reason or a bad reason. The fact that you 
didn't go to the facility tells me in spite of the fact that we 
were having this hearing on that facility, I would have though 
your curiosity would have gotten to you--it kinds of suggests 
to me that, one, you have more than enough work to do and you 
are not looking for more, but it also says to me that there may 
be a whole standard of failure to provide proper conformity to 
the Federal statute, but we don't know because we are not 
looking, because you could have gone. I think you would have 
been pretty surprised by that facility. I have to think you 
would have been. Maybe you wouldn't have been.
    And it just speaks--it says something to me about the fact 
that we require some things to be done on the public side, but 
we don't inspect them and there is no enforcement of it, so it 
is kind of pointless, but we may not know how bad the 
facilities are, and we certainly don't know if there is 
uniformity. At least on the private side we know there is some 
uniformity. On the public side, there may be no uniformity. 
Heck, there could be even some sites worse than this one. I 
would like to just ask if, Mr. Nelson, do you have anything 
that you would like to just put on the record that you just 
want to say that maybe you thought should have been asked that 
we didn't ask? Anything that you would like to put on the 
record? Well, just think about it for a second.
    Let me just conclude by asking the IG, is there anything we 
need to be putting on the record? We didn't ask you as many 
questions, but anything you would like to put on the record 
that wasn't?
    Mr. Gulledge. Yes, sir, very briefly. Based on our look at 
the inspections of gun dealers, there are three things that we 
think you should consider while you are looking at the 
explosives protection. First is identifying where all of those 
explosives are located. Once you identify all of those 
locations, compare those to where the explosives licensees who 
are now licensed are and where the gun dealers are, because you 
need to see where that distribution of workload is so that you 
can properly staff the agency----
    Mr. Shays. Right.
    Mr. Gulledge [continuing]. That is the second thing, put 
the people, the inspectors who are on staff where they are 
needed.
    Mr. Shays. It is very clear you have pointed out a 
tremendous disparity in workload.
    Mr. Gulledge. Yes.
    Mr. Shays. And what is the other issue?
    Mr. Gulledge. The last issue is that right now the staffing 
request that I believe you discussed earlier only addresses 
inspectors. As you have more inspectors and you do more 
inspections, you are going to have followup actions to take, 
and part of the delays that we saw were due to a lack of legal 
staff. So the consideration of how you are going to have to 
address this is more than just inspectors.
    Mr. Shays. Got you. Mr. Nelson, any other point you would 
like to make?
    Mr. Nelson. I just want to say again that the regulation of 
explosives is a partnership with industry. We must rely on them 
to get the job done, to know what the rules are, and, by and 
large, they do.
    Mr. Shays. Well, that raises other questions. The ``by and 
large'' scares the hell out of me. But, clearly, there has to 
be that partnership. Is there any other question? We are all 
set. Thank you both very much. We appreciate your service to 
your government. I think we have some work to do. All of us can 
chip in to do that.
    We will start with our next panel. Our next panel is 
comprised of five members. Mr. Donald Horsley, county sheriff, 
San Mateo County Sheriff's Office; Ms. Heather Fong, chief of 
police, San Francisco Police Department; Mr. Scott MacGregor, 
assistant chief, California Highway Patrol, California 
Department of Justice, State of California; the Honorable Mark 
Church, president, San Mateo County Board of Supervisors; and 
the Honorable Michael Nevin, supervisor San Mateo County Board 
of Supervisors. I invite all of our five witnesses to come. Do 
we have enough space for five?
    We are waiting for two witnesses. Bob, can you please get 
Mr. Nevin and Mr. Church?
    If the witnesses could stand, I need to swear our witnesses 
in and anyone who may be making a comment as well accompanying 
them.
    [Witnesses sworn.]
    Mr. Shays. For the record, our witnesses and potential 
witnesses have all responded in the affirmative. We are 
pressing the time period a little bit, and I am going to ask, 
except I am going to give special dispensation to the chief 
from San Francisco to go over the 5 minutes, but I am going to 
ask everyone else to be within the 5 minutes. And just to say 
to all of you it is wonderful to have your participation and 
say particularly to Chief Fong, your reputation around the 
country is a very good one, and we congratulate you for the 
fine work you are doing in this work that you do. All of you 
are very accomplished, and we thank all of you for that. 
Sheriff, we appreciate your participation as well, and all of 
you. But a special note to someone taking on a major assignment 
in a city like that, that is quite something. Actually, the 
sheriff has a pretty big territory too, correct?
    Mr. Horsley. I do. I do, indeed.
    Mr. Shays. Yes. I was having you look at me thinking I went 
down the wrong trail here. [Laughter.]
    So I thank all of our witnesses, and you have all been 
sworn in, and we will start with you, Sheriff.

  STATEMENTS OF DON HORSLEY, COUNTY SHERIFF, SAN MATEO COUNTY 
 SHERIFF'S OFFICE, STATE OF CALIFORNIA; HEATHER FONG, CHIEF OF 
POLICE, SAN FRANCISCO POLICE DEPARTMENT, CITY OF SAN FRANCISCO, 
   CA; SCOTT MACGREGOR, ASSISTANT CHIEF, CALIFORNIA HIGHWAY 
PATROL, CALIFORNIA DEPARTMENT OF JUSTICE, SACRAMENTO, CA; MARK 
CHURCH, PRESIDENT, SAN MATEO COUNTY BOARD OF SUPERVISORS, STATE 
OF CALIFORNIA; AND MICHAEL NEVIN, SUPERVISOR, SAN MATEO COUNTY 
           BOARD OF SUPERVISORS, STATE OF CALIFORNIA

    Mr. Horsley. Well, thank you members of the Subcommittee on 
National Security for your leadership on this issue and for 
your willingness to work with law enforcement on developing 
national standards for explosives storage facilities. I would 
like to begin by giving a brief synopsis of the events that 
highlighted the need for this hearing.
    The San Mateo County Sheriff's Office, along with San 
Francisco Police Department and the FBI have maintained a 
munitions storage site on the city of San Francisco Watershed 
property for nearly 20 years. Over the July 4th weekend, the 
storage facility was burglarized and approximately 200 pounds 
of explosives were taken. We promptly notified the media and 
all State and local law enforcement agencies of the theft, and 
thanks to the combined efforts of local law enforcement and the 
investigative work of ATF, the culprits were quickly 
apprehended and all of the stolen material, including the 10 
pounds of C4 explosives belonging to the San Mateo County Bomb 
Squad, was recovered.
    Since the buck stops at the top of an organization, I take 
full responsibility for the breach in security of our munitions 
bunker. While the bomb squad stored the explosives in an 
approved and theft resistant munitions storage container and 
sited the secure container in a remote location away from 
buildings and population centers, we mistakenly relied on the 
remoteness and secrecy of the location and the physical 
security of the ATF-approved munitions storage sheds for 
security. It was also thought that the random patrols by 
watershed rangers who are responsible for keeping out 
trespassers, but were not specifically responsible for the 
munitions storage site, was additional security for the site. 
Unfortunately, I was not made aware that the alarm on the 
storage containers was inoperable.
    In hindsight, the Sheriff's Office Administration should 
have established a regularly scheduled inspection of the site 
by our Office of Professional Standards. Clearly, fencing of 
the site, a functioning alarm and remote surveillance by camera 
could have prevented this incident from occurring.
    Some may ask why these materials are stored at all? All law 
enforcement agencies that maintain bomb disposal squads need to 
have both explosive material and a safe and secure storage 
facility. Explosive materials are used for training purposes. 
Specifically, we must have explosive materials if we are to 
train canines to locate explosive devices. Additionally, bomb 
disposal units are called upon to dismantle explosive devices 
and store the material for either evidence and/or destruction. 
And, last, there are occasions when unstable and explosive 
materials are recovered by a bomb disposal squad that must be 
destroyed by the use of explosives.
    Subsequent to the incident in San Mateo County, I have 
found that there have been similar losses of explosive 
materials nationwide. I think that it is timely that this 
review of national and State regulations and standards takes 
place. At the request of this committee, I have been asked to 
make recommendations regarding Federal and State guidelines for 
the storage, monitoring and protection of publicly owned 
explosives material storage sites.
    The current regulations are found in title 27, Code of 
Federal Regulations. In summary, ATF requires that explosive 
materials be stored certain distances from populated buildings 
and that the munitions storage facility be constructed of 
quarter-inch steel and lined with two-inch plywood and that it 
be theft and bullet resistant. Our storage container met these 
minimum requirements. The FBI further requires that bomb 
technicians must have successfully completed the Redstone 
Arsenal training curriculum.
    From our review of this event, the Sheriff's Office will be 
taking the following steps, and I would suggest that these 
local requirements might be a good starting point for future 
legislative action. First, we obviously need to find a secure 
location in which to store explosives and other volatile 
substances that meets ATF guidelines. The location must be 
fenced, the site will have a working alarm system, cameras 
should monitor the location, bomb squad members will monitor 
the cameras. There will be physical checks which include an 
entry log, inventory log update when items are being utilized 
or stored. The log will include an employee signature and date. 
The inventory entries must be specific regarding item, amount, 
weight or volume of content. A regular rotation of on-call bomb 
techs will check and double check log entries and inventory. 
The bomb squad manager will receive a monthly copy of the 
storage facility's current contents and inventory. The bomb 
squad manager will make random, periodic inspections of the 
site to verify accuracy of the inventory reports and the 
working conditions of all security devices, and these reports 
will be directly sent to the sheriff. ATF will be requested to 
inspect the storage site yearly with the results, again, 
reported directly to my office.
    Regarding national standards, I would also recommend the 
following: Give ATF authority to require that all explosive 
storage sites submit to an annual inspection; two, require 
licensing of all explosive storage sites; three, any agency 
that fails to comply with ATF safety and security requirements 
will be decertified to store explosives or operate a Bomb 
Disposal Squad; four, require a specific training course for 
managers of bomb squads to ensure that they have knowledge of 
professional practices and to ensure compliance with all 
appropriate protocols.
    That concludes my comments, and I would again like to thank 
this committee for your leadership in this issue and for your 
work in helping to develop national standards for explosive 
storage facilities.
    [The prepared statement of Mr. Horsley follows:]

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    Mr. Shays. Thank you, Sheriff. Thank you for your 
recommendations. Chief.
    Ms. Fong. Chairman Shays, Congressman Lantos, Congressman 
Eshoo, thank you for giving us the opportunity to participate 
in this hearing. This is a key matter throughout not only law 
enforcement and the subcommittee but to the public at large.
    The San Francisco Police Department has, since at least the 
mid-1970's, shared explosive storage magazines with the San 
Mateo County Sheriff's Office and the Federal Bureau of 
Investigation. As a result of a burglary over the 4th of July 
holiday weekend, a large quantity of explosives and other 
materials were stolen. Officers from the San Francisco Police 
Department uncovered this crime on July 6 and immediately made 
notifications to our law enforcement colleagues. Because of the 
good work of the agents from the Bureau of Alcohol, Tobacco, 
Firearms and Explosives and other allied agencies, suspects 
were rapidly apprehended and the stolen items located.
    This incident has given rise to a much-needed examination 
of how we in the San Francisco Police Department store 
explosive materials. I have reviewed the department's practices 
in this area and would like to briefly go over them to provide 
context for this discussion. The San Francisco Police 
Department maintained two of the magazines at the Crystal 
Springs Skyline Quarry facility. One of the magazines was used 
to store high explosives, along with breaching and demolition 
charges. The other was used to store flares, tear gas and so 
forth but no high explosives. At the time that the burglary was 
discovered, the watershed site was only being used as a storage 
magazine. It was no longer being used as an explosives range. 
Since the burglary, our department no longer stores any 
materials at the site.
    This site is a former quarry, which has generally been 
secluded from public access. The magazines themselves are in a 
remote area behind two locked gates. The bunkers are standard 
explosive magazines and meet the industry standards for 
explosive magazines. Unfortunately, what makes this such an 
attractive site due to its isolation from populated areas or 
structures also makes it susceptible to theft. Aside from the 
FBI, no other entity outside of the San Francisco Police 
Department stored any explosive materials in our magazines.
    The officers of our department's EOD team have undergone 
the same rigorous training as bomb officers do across the 
country. They attend the FBI-sponsored Explosive Ordnance 
Disposal training at the Redstone Arsenal in Huntsville, 
Alabama. Our EOD officers belong to the International 
Association of Bomb Technicians and Investigators, a 
professional organization that sets standards, internationally, 
holds regular conferences and offers cutting-edge training to 
its members.
    As for the security of the explosive magazines, we, in 
part, depended on resident watershed rangers that have been 
deputized by San Mateo County. The San Francisco Police 
Department relied on them to notify law enforcement if they saw 
anything unusual during their regular patrols of the area. 
There was also a verbal understanding that any suspicious 
activities observed by other Water Department employees would 
immediately be relayed to law enforcement, including the San 
Francisco Police Department and the San Mateo County EOD Units.
    Beyond question, the San Francisco Police Department needs 
a secure, modern facility to store munitions, and this incident 
gives great urgency to that need. A new site should have an 
alarmed fence, as well as motion sensors that would activate a 
video camera system. In contrast to what was available when the 
current facility was built, there is much better technology 
today. We need to relocate to a site in a more protected area 
with new magazines, equipped with reliable security safeguards.
    We further need to have a site that has electricity and can 
serve as a real training range. With electricity, there would 
be greater usage and consequently, an enhanced law enforcement 
presence. Motion-sensitive video cameras could be placed on the 
perimeter and record trespassers once activated. A permanent 
structure, with lighting, video surveillance and completely 
meeting the ATF standards must be constructed to meet an 
inarguably compelling and immediate need for safe and secure 
explosive storage.
    In addition to the construction of a new facility for 
storage, a strong internal protocol detailing the safety and 
security guidelines for the bunkers must be developed and 
rigorously enforced. The verbal agreements of the past must be 
replaced with written protocol, frequent documented site visits 
and regularly scheduled inventories. The officer-in-charge of 
the EOD Unit will be responsible for ensuring adherence to 
these guidelines, for personal site inspections and for 
coordinating an annual inspection by the Bureau of Alcohol, 
Tobacco and Firearms. Additionally, every officer assigned to 
the unit must be fully familiar with all pertinent regulations 
governing the operation and maintenance of an explosive 
magazine facility.
    There is no question that the lessons learned from this 
incident have brought the issue of secure explosive materials 
storage to the forefront of our concerns. We understand that a 
new location is mandatory, and we look to whatever assistance 
we can obtain from our local, State and Federal partners to 
assist us in this endeavor. We must identify a solution to this 
pressing issue, and I have designated a member of the command 
staff to work closely with Sheriff Horsley and his designee to 
look for that location and to ensure that it is one that is 
safe.
    As I am sure you are well aware, there are no properties in 
San Francisco County that would qualify as a site given the 
large radius needed to store explosive materials. Furthermore, 
State regulations bar the transport of explosives over bridges, 
thus precluding, at a minimum, siting any facility in Marin 
County. We sincerely hope that as a result of these hearings, 
steps can and will be taken to once and for all identify a site 
where the storage of explosives can be done safely and securely 
and with minimum impact on the surroundings.
    We thank you for your consideration, we thank you for your 
concern, and we are committed to working together with you and 
local law enforcement, as well as the Federal Government, to 
ensure that this situation is never presented again. I look 
forward to answering any questions you may have.
    [The prepared statement of Ms. Fong follows:]

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    Mr. Shays. Thank you, Chief. Now we will hear from Scott 
MacGregor, assistant chief, California Highway Patrol. Welcome.
    Mr. MacGregor. Good morning Mr. Chairman and committee 
members. Thank you also for this opportunity to speak before 
you this morning on this important issue dealing with the 
monitoring and protection of publicly owned explosive material 
storage sites. For the most part this morning, I will be----
    Mr. Shays. Just check, is your mic on? I am hearing you so 
well, but I am not sure it is on.
    Mr. MacGregor. I appear to have a green light if that is an 
indicator. For the most part this morning, I will be talking 
about the activities of the California Highway Patrol rather 
than specifically the site here in San Mateo County.
    And let me first say that the CHP does follow existing 
Federal and State guidelines regarding the storage and 
transportation of explosive materials. While the CHP is a 
Statewide law enforcement agency, we are currently operating in 
all 58 counties of California, and today we maintain 13 Type 2 
magazines for explosive materials. The majority of our 
magazines are maintained for preservation of explosives in 
small amounts for ongoing training for CHP explosive detection 
canines, as the Sheriff had pointed out. The canine handler 
teams are located throughout the State and are an integral part 
of our homeland security efforts here in California.
    In response to the recent events here in San Mateo County, 
the CHP, as well as other law enforcement agencies, have 
reviewed its procedures to ensure that both the safety and the 
security of the magazines have not been compromised. And this 
process has included a number of steps involving the review of 
current Federal, State and local law and guidelines, as well as 
discussions with members from Alcohol, Tobacco and Firearms, 
the California Department of Toxic Substances Control, the 
State Fire Marshal and California Department of Forestry. And a 
summary of our review of those pertinent regulations and laws 
has been provided to this committee.
    Now, in the time for my remarks, I won't be able to 
adequately describe each of the agency's specific roles and 
responsibilities regarding explosive handling. However, I can 
say that I have been very impressed by the spirit of 
cooperation and level of communication from Federal, State and 
local leaders. And as I am sure you are aware, law enforcement 
agencies are exempt--as has been pointed out in this hearing 
thus far, they are exempt from Federal and State laws relating 
to obtaining a license for storing explosive materials. 
However, we are not exempt from any Federal storage 
requirements, and, simply put, and I think this has been 
reinforced by other speakers, we must follow the Federal 
regulations, but we do not have to obtain a physical license in 
order to do so.
    On the State level, law enforcement derive a similar 
exemption from explosives regulations from the California 
Health and Safety Code and the California Penal Code. 
Regardless of those State exemptions, the requirement to follow 
Federal storage regulations still exists. And once again, the 
CHP does meet or exceed all current Federal explosive storage 
requirements.
    For example, while there is currently no Federal or State 
requirement for an outside entity to inspect our magazines, as 
a matter of departmental policy, the CHP does request and 
receive, through the California State Fire Marshal, inspections 
of our magazines to ensure they are properly located, secure 
and compliant with title 27 provisions.
    The CHP also follows up with formal letters of confirmation 
from the California State Fire Marshal outlining that those 
inspections have taken place and their results. And, 
additionally, the CHP has established an internal guideline 
regarding the inventory and inspection of our storage 
facilities, and we maintain a secure roster of all key holders. 
And, further, as a matter of policy, these magazines do not 
hold evidentiary explosive materials. We also fulfill the 
requirement that is currently in Federal regulation to notify 
local fire officials regarding the locations of those magazines 
sites.
    While I am not going to detail specifics regarding the 
actual CHP security measures at each of the locations, I can 
assure you that we take into account the need for a higher 
level of protection based upon the unique nature of each 
individual facility.
    And if I could summarize our research very quickly, it 
appears that there is no Statewide list of law enforcement 
agencies' explosive storage facilities. One simply does not 
exist to date. And since a list of that type may be beneficial 
for Statewide operations, security and certainly the security 
of all these sites, we have provided the California's Office of 
Homeland Security with a list of several items to be considered 
here by the State of California.
    And those items include an evaluation and consideration of 
the following: First of all, an evaluation of the State of 
California formally adopt title 27 of the Code of Federal 
Regulations through legislation. We also provided a 
recommendation that the State of California develop and 
maintain a confidential list of all law enforcement explosive 
storage magazines and their locations that would be updated on 
a semi-annual basis. Additionally, law enforcement agencies 
conduct and maintain a log of physical security inspections 
available for random audit and that law enforcement agencies 
provide to the State of California ongoing, updated 
confidential rosters of people who are authorized to access 
explosive storage magazines. One additional item that we have 
discussed with the Department of Homeland Security here in 
California is the possibility of law enforcement agencies 
maintaining current physical inventoies of explosive storage 
magazines, and, again, that those magazines be randomly audited 
and reported. And, finally, an improved notification system be 
established for purposes of collecting and maintaining reports 
of lost or stolen explosives.
    And in closing, while the events here in San Mateo County 
were unfortunate, it has given the law enforcement community, 
the Federal, State and local government the opportunity to 
evaluate current regulatory and operational standards and to 
take the additional steps necessary to heighten the security of 
those facilities.
    And, Mr. Chairman and committee, I thank you for this 
opportunity and welcome any questions you may have.
    [The prepared statement of Mr. MacGregor follows:]

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    Mr. Shays. I thank you very much. I appreciate the helpful 
advice and concern that all three of you have shown. We will 
now go to this side now and hear from our two supervisors. 
First, Mark Church and after him, Michael Nevin.
    Mr. Church. Good morning, Mr. Chair and committee members. 
Thank you, Representative Shays for the opportunity to address 
this subcommittee. Those of us here in San Mateo County 
especially want to thank Representative Lantos for making this 
hearing possible and Representative Anna Eshoo for bringing to 
the attention of Secretary Tom Ridge and this subcommittee the 
challenges that local governments face, such as San Mateo 
County, in improving security for explosives storage 
facilities.
    In a recent letter to Secretary Ridge, Representative Eshoo 
pointed out that inadequate first responder funding and 
misallocation of Homeland Security funds were important factors 
in the recent theft of government-owned explosives from a 
storage bunker located on San Francisco Public Utility 
Commission property in San Mateo County. I believe this 
incident highlights how important it is for the Federal 
Government to assume an appropriate role in assisting local 
agencies to protect their communities and the Nation.
    The State fire marshal has promulgated regulations to 
address the storage of explosives in California. While these 
regulations set physical standards for explosive storage 
facilities, they were adopted long before the present threat 
environment emerged, and they do not reflect current risks to 
these facilities.
    Further, to the extent that Federal regulations address 
explosives storage, much more needs to be done to increase the 
coordination and communication between the Federal agencies and 
the operators of these local facilities. The Federal 
Government, with its much greater knowledge of how risks to 
explosive storage facilities affect homeland security, must 
work with local agencies to continue developing appropriate 
standards at the national level. And once such standards are 
developed, it will be equally important for the Federal 
Government to provide local agencies with the resources 
necessary to implement them.
    Local governments' law enforcement and first responder 
resources have been stretched thin due to the recent budget 
crisis in this State. This fact makes Federal homeland security 
assistance, such as through the State Homeland Security Grant 
Program, more critical than ever before. We believe a number of 
important improvements could be made to the Homeland Security 
Grant Program that would make the program more effective. 
First, a greater degree of flexibility with respect to the use 
of funds provided through the program would assist local 
agencies as they prioritize their homeland security spending. 
Second, a streamlined application process, which would allow 
local agencies to apply directly to the Department of Homeland 
Security for grants and deal directly and expeditiously with 
the Department on inquiries related to grants, would greatly 
increase local law enforcement and first responder 
effectiveness. And, third, it is essential that Federal 
Homeland Security Grant funding be tied to a realistic 
assessment of the threats based upon localities and the costs 
incurred in responding to those threats.
    It seems clear that parts of the country, such as the San 
Francisco Bay Area with its large population and popular 
tourist attractions, present a number of potential terrorist 
targets far in excess of those other parts in the country. The 
costs of defending against potential terrorists threats is also 
much higher here than in other parts of the country. Yet, as 
both Representative Lantos and Representative Eshoo have 
pointed out, under the current Homeland Security grant 
allocations, Wyoming, for instance, receives $38 per capita 
whereas California receives only approximately $5 per capita. 
The level of funding made available under the State Homeland 
Security Grant Program simply much take into account the 
disparate terrorist threats and the resulting differences in 
fiscal demands placed on local governments.
    In addition to the formulaic calculation, another issue 
relates to the fact that metropolitan area homeland security 
funds were allocated last year to urban cities through the 
Urban Area Security Initiative Program. And while San Francisco 
has vulnerabilities, the funding model does not reflect the 
fact that the San Francisco Bay Area, including San Mateo 
County, is really one urbanized area with vulnerabilities 
typical of urban cities. The largest intermodal transportation 
hub west of St. Louis, for example, is located in San Mateo 
County, as are other critical infrastructure such as the San 
Francisco International Airport and the San Francisco Hetch 
Hetchy watershed--the location of the bunker that brought us 
all here today. Yet, to date, San Mateo County, though it is 
home to significant economic and public infrastructure, has not 
received grant funding targeted to urban cities. This, 
underscores, I believe, a major flaw in the current allocation 
methodologies and the need to ensure that future homeland 
security funds are allocated based on real threats and 
allocated to localities that are vulnerable.
    As the 9/11 Commission found, the last best hope for the 
community rests primarily with first responders. We must ensure 
that they have the resources, the information and the 
flexibility necessary to do their jobs effectively. Thank you 
again, Mr. Chair and committee members, for holding this 
meeting in San Mateo County and for the opportunity to address 
this subcommittee.
    [The prepared statement of Mr. Church follows:]

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    Mr. Shays. Thank you, Mr. Church. I didn't properly note 
that you are the president of the supervisors at this time, and 
we appreciate you being here. And at this time, we will hear 
from Michael Nevin.
    Mr. Nevin. Thank you, Mr. Chairman, and the last shall try 
to be brief. But, first of all, please take back to Washington 
for us how very proud we are of the gentleman and the gentle 
lady representing California and representing us in San Mateo 
County.
    Mr. Shays. Duly noted and it is in the record. It will stay 
in the record.
    Mr. Nevin. I want Congress to know that.
    I asked that you come and you came, and I am very grateful 
for that. As a former San Francisco police inspector, I fully 
recognize that national security begins with local law 
enforcement. Homeland Security's foot soldiers can be found 
patrolling the streets of America's cities and counties as 
police officers and as deputy sheriffs.
    While we go to great lengths to ensure that security at our 
high-level profile military and governmental facilities is not 
compromised, we cannot ignore the potential threats that exist 
on the local level. It is not enough that the Federal 
Government is aware of the dangers that these threats pose. 
They must also take definitive steps to ensure that local 
governments and our first responders have the direction, the 
training and the funding necessary to effectively protect our 
citizens.
    The facility held explosives that were powerful enough to 
blow up a hole in the Golden Gate Bridge. This is pretty 
serious. It is important to understand that this is not a 
situation unique to the Bay Area or to San Mateo County. In 
fact, last year, the ATF figures were 79, mine were 80, that is 
close enough for government work, but 80 instances of stolen 
high-level explosives nationwide. Facilities like ours are 
scattered across the landscape of this country, and, 
unfortunately, the security protocols at these facilities are 
just as scattered.
    As Anna Eshoo pointed out, this particular bunker is right 
near our watershed, right near the watershed and also the power 
line, the pipeline that sends water to the people in the 
peninsula right near by. Another question that I have after 
being involved in this hearing this morning is should we look 
at the life expectancy of these bunkers and these facilities?
    This is the simple task in the interest of the public. AFT 
mandates high-level explosives are stored away from the 
population areas, I understand that. But, unfortunately, the 
more remote areas become, the more difficult it is to patrol 
for local government. In these cases, protecting our citizens 
requires expert planning and clear, specific directive.
    If this incident can happen here, it can happen anywhere. 
As long as all other law enforcement agencies in our county and 
in our State are each individually responsible for securing 
these dangerous materials, we will not be able to guarantee 
that they are adequately protected as long as there are no 
standards to meet or oversight to ensure accountability to 
those standards, we cannot claim to be doing our best to 
protect our citizens.
    You have come today. We are very grateful to San Mateo 
County because you too recognize that there are flaws in the 
system, and they need to be changed. It is my recommendation 
that you take necessary steps to enact uniform, nationwide, 
minimum security standards where high-level explosives are 
stored and that those standards, their implementation, their 
enforcement, their oversight, their training to local 
government be funded by a Federal agency.
    Again, I want to thank you, Congressman Lantos and 
Congressman Eshoo, for listening to our call and obviously, Mr. 
Chairman, for coming here to California. And we are all very 
grateful and maybe a little safer because of these hearings.
    [The prepared statement of Mr. Nevin follows:]

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    Mr. Shays. Thank you both very much. Because you all have 
basically stayed within the 5-minute framework, we will stay 
with our 10-minute questioning. So, Mr. Lantos, you have 10 
minutes, and then, Ms. Eshoo, you will have 10.
    Mr. Lantos. Thank you very much, Mr. Chairman. Let me first 
thank the five outstanding witnesses for extremely helpful 
testimony. I usually brag about my 17 grandchildren, but this 
time I am going to brag about our public servants, and I do so 
with great pleasure.
    Let me first turn to Sheriff Horsley, and let me say before 
I raise my questions how grateful we all are for your 
outstanding public service to our community.
    Mr. Horsley. Thank you.
    Mr. Lantos. You have done an outstanding job, and we are 
profoundly mindful of it.
    Since the purpose of this hearing is not to be deal with 
the particular episode but to use this episode as a catalyst 
device to build national legislation, let me just hear from 
you, Sheriff Horsley, which I think will put this issue at rest 
in terms of the San Mateo County happening, you state, ``In 
hindsight, the Sheriff's Office administration should have 
established a regularly scheduled inspection of the site by our 
Office of Professional Standards. Clearly, fencing of the site, 
a functioning alarm and remote surveillance by camera could 
have prevented this incident from occurring.'' We agree and I 
think we can move on to other items.
    Since this is a nationwide problem, and I think it is very 
important to underscore that according to the statistics, we 
were given 79 or 80 thefts occurred last year, and I would like 
each of you to respond to my question, do you see any 
justification for exempting public entities, not including the 
military, public entities from the same mandatory requirements 
that are presently in effect for private entities? You may 
begin, Sheriff.
    Mr. Horsley. Well, I see no reason why there shouldn't be 
same standards for public as well as private, and it is 
inexcusable the breach in security, and I welcome that there be 
national standards, and we need to all comply with national 
standards. And there should be some very rigorous regulations 
on these kinds of sites.
    Mr. Lantos. Chief Fong.
    Ms. Fong. I concur with Sheriff Horsley. As this incident 
shows, we are not immune from criminal activity, and the 
situation occurred. I think that we should meet the same 
guidelines as all other storage facilities.
    Mr. Lantos. Thank you. Chief MacGregor.
    Mr. MacGregor. Congressman, as I stated in my testimony, 
the State of California, we have provided some recommendations 
for the State to consider here as far as enhancing current 
regulations and have actually implemented some on our own above 
and beyond what is currently required. So I see that being a 
very positive step.
    Mr. Lantos. Do you see any justification for having a 
different set of criteria for facilities which are privately 
owned or publicly owned?
    Mr. MacGregor. No, sir, not as it relates to safety 
components, no.
    Mr. Lantos. Right.
    Mr. Church. I see no basis for the distinction. The same 
risks are associated with both types of facilities.
    Mr. Nevin. The standards should be the same. You 
articulated it well, Congressman, when you spoke about health 
care and hospitals. The standards should be no different for 
public or private, no different when it comes to explosives in 
an issue this serious.
    Mr. Lantos. I very much appreciate this. One of the 
comments you made, Chief Fong, if I understood you correctly, 
is that you removed all of your explosives from this facility 
and you are using another facility outside of San Francisco at 
the moment because San Francisco is not equipped to handle 
this. Am I correct?
    Ms. Fong. The high explosive materials that were stolen 
have been recovered, and they are currently in evidence, and so 
they are being stored by the ATF as evidence at this time. So 
we are not storing any high explosive materials.
    Mr. Lantos. Is it your intention in the future to use an 
upgraded and appropriately secured San Mateo County facility?
    Ms. Fong. We will be working together with Sheriff Horsley 
to identify a suitable location with suitable security.
    Mr. Lantos. Now, Chairman Church, you spent a lot of time 
on the funding issue, and I fully agree with all of your 
comments. Explain to me, if you can, other than blatant pork 
belly legislation, how could anyone justify giving Wyoming 
almost eight times the per capita support that California has? 
With all due respect to Wyoming, I think the San Francisco 
International Airport is a slightly more exposed place.
    Mr. Church. Well, Representative Lantos, I think our 
thinking is the same on this issue. I think it is very 
important that Congress place a high level of priority in 
metropolitan areas throughout the country. That is the first 
area that has the greatest threat. Rural areas, certainly if 
funding is available at a later date, would be provided for as 
well, but the greatest threat, I think we can all agree, is in 
major metropolitan areas.
    Mr. Lantos. Major metropolitan areas cannot be divided into 
the core city and the surrounding region, because San Francisco 
International Airport, among other things, clearly is a 
potential location of threat.
    Mr. Church. That is right. And as I pointed out in my 
testimony, we are really one urbanized area. We have 6 to 7 
million people in the San Francisco Bay Area. For all practical 
purposes, we are one urbanized city, we have critical 
infrastructure located here, we have the water supply, we have 
the power supply, we have San Francisco Airport, we have the 
largest transportation hub west of the St. Louis right here in 
San Mateo County. And it is inequitable for San Francisco and 
other major cities to receive all of the funding without 
providing some of that funding to the outlying areas, such as 
San Mateo County, which has practically the same population as 
San Francisco.
    Mr. Lantos. I fully agree with you, and I think both my 
colleagues and I will use whatever influence we have to see to 
it that the funding formulas be changed. Supervisor Nevin, you 
wanted to comment.
    Mr. Nevin. I just wanted to make the comment you made the 
comment about Wyoming. The comment about California we are the 
seventh largest nation in the world, and we are also a border 
State, which makes it even more of a difficulty as far as 
national security is concerned with the security of this State 
and this area.
    Mr. Lantos. Now, I must admit to considerable surprise, 
that the testimony from the previous panel, in response to my 
question, was that they don't know how many such sites there 
are in the United States. I wonder what your reaction was to 
this, to me, mind-boggling response.
    Mr. Horsley. If you are asking me, Congressman Lantos, I 
was very surprised. I assumed that they knew that--where all 
the sites were at in the State of California and throughout the 
Nation. So I was surprised that they did not have clear 
information or clear knowledge of all those potential sites.
    Mr. Lantos. Chief Fong.
    Ms. Fong. I think given the lack of requirement for 
licensing and inspections, this would be a conclusion that 
without those initials steps, it would be difficult to know 
where all the sites are.
    Mr. Lantos. So, in a sense, what you are saying is the same 
requirements should be applied to public entities, which then 
would enable it the appropriate deal to have a number for us as 
to how many such types there are which contain hazardous 
materials.
    Ms. Fong. That is correct. I think we can be helpful to 
whoever the regulatory agency is then.
    Mr. Lantos. Chief MacGregor.
    Mr. MacGregor. Congressman, as I pointed out, we were quite 
surprised as well after the fact. We certainly were aware of 
where each and every one of our particular----
    Mr. Lantos. Of course.
    Mr. MacGregor [continuing]. Magazines were, but in 
investigating this further, we quickly found out that there was 
not a Federal or State entity that had knowledge of all the 
locations, and as such, that was one of the recommendations we 
brought forth to the State Office of Homeland Security as a 
consideration here for California.
    Mr. Nevin. I would be surprised if we didn't hear when 
those statistics come out that the number of situations like 
San Bruno in San Mateo County are in the hundreds, if not up to 
a couple thousand, of those same kinds of bunker situations 
throughout this country. That would surprise me if those 
figures aren't extremely high in those kinds of numbers.
    Mr. Church. In order to assess the full extent of the risk 
and the threat, we think that step No. 1 would be to identify 
all the sites and conducting an inventory, and so, yes, I was 
surprised it hadn't been done.
    Mr. Lantos. Now I will use my final question to take 
advantage of your presence, Mr. Chairman, and ask each of our 
panelists to share as candidly as you are willing, which I 
think is a very high degree of candor, what recommendations 
would you like the three of us to take back to our friend Tom 
Ridge, with respect to the whole issue of funding homeland 
security issues? Sheriff, start with you.
    Mr. Horsley. Well, one of the things that I think that ATF 
probably doesn't have the personnel, and I would probably 
recommend that they get some additional personnel to conduct 
what I would think would be just a basic requirement and we 
would have to--I think all these facilities should be licensed, 
should be inspected and should have some basic requirements. 
And I think Chief Fong and I, as well as the Highway Patrol, 
have outlined what we would recommend that there are some basic 
security measures that must be in place and should be part of 
the licensing requirement.
    Mr. Lantos. Chief Fong.
    Ms. Fong. I think with regards to instituting regulations 
and expectations on different agencies, it is much like the 
acquisition of personal protective equipment. There needs to be 
funding up-front, not only for the ATF or the regulatory agency 
but for all law enforcement to be able to comply with the 
regulations. Otherwise, the unfunded mandate becomes very 
problematic at the local government level. No matter how hard 
we try to meet those regulations, we would not be able to. So I 
think there needs to be directed funding toward that goal.
    Mr. Lantos. I couldn't agree with you more. Chief 
MacGregor.
    Mr. MacGregor. Yes. I was going to echo the Chief's 
comments with regards to unfunded mandates and also point out 
on this discussion of establishing a confidential list of 
locations, I think confidentiality in terms of that list is 
paramount in that if you have a list that is readily available 
that shows you, hey, here are all the locations, it tends to 
potentially bring folks that would use that as a guide, if you 
will, to try to go searching for what they are looking for.
    Mr. Lantos. Chairman Church.
    Mr. Church. Well, I agree with all the witnesses. We need 
uniform standards, they need to be mandated, but we need the 
resources necessary to implement those standards. But on the 
broader issue of funding, local government knows its needs 
better than national government.
    Mr. Lantos. We need flexibility.
    Mr. Church. We need flexibility, we need local control. The 
State budget crisis, as I mentioned, has created a real problem 
for us, and we need flexibility not with just equipment but 
perhaps with personnel as well. Perhaps there can be some 
flexibility to allow some of this funding to go for personnel. 
Having the equipment is great, but if you don't have the 
staffing to use it, it doesn't do us much good.
    Mr. Lantos. You have been the leader of this whole issue, 
Supervisor Nevin. You have great personal experience in the 
general field. What are your thoughts?
    Mr. Nevin. Well, my thoughts are, first of all, let me tell 
you what you have brought out, that this congressional 
committee has brought out, is in fact homeland security, and I 
am very satisfied that we are going to get from you and your 
leadership passed through Congress regulations, minimum 
regulations or whatever to take us out of this horrible 
situation we find us in. But funding should never be dependent 
on a city and county's ability to pay, law enforcement's 
ability to pay. Those standards could never be met unless the 
funding marries the regulation, so to speak. So that is why I 
think it is so important, and at no time in our history could 
we be talking about more important than homeland security and 
these bunkers in San Bruno.
    Mr. Lantos. Thank you, Mr. Chairman.
    Mr. Shays. I thank the gentleman. Ms. Eshoo.
    Ms. Eshoo. First, I want to salute everyone that just gave 
testimony. You are a great source of pride to me, and it 
reminds me of the cooperation that San Mateo County has had 
with the City and County of San Francisco for decades and 
decades and decades. In fact, the City and County of San 
Francisco owns more property in San Mateo County than San Mateo 
Countians. So what we share and how we cooperate with one 
another I think is one of the more important stories of our 
region, and I salute you for it.
    To Sheriff Horsley, thank you for being forthright and 
saying that the buck stops with you. You said it up-front, and 
because you did, it has allowed us to get on to the really 
larger issues that are attendant to what this hearing is all 
about. To my two colleagues from the board of supervisors, I 
couldn't be prouder. We have a great tradition of local 
government here and the people that have served, and I say 
that--I think she was--well, she was here earlier--former 
Supervisor Mary Griffin who served with distinction on your 
board as well. And, of course, to the Highway Patrol, you are 
very special to me and people throughout our State, and what 
you have done during periods of real crisis and tension, I 
thank you.
    On the first issue of homeland security, I want to 
associated myself with what my colleagues have said. We do not 
have enough flexibility with the grants that come through 
Homeland Security, and I say to my colleagues that serve on the 
committee that will take this back, I think it is an area that 
deserves some special attention now. We have been discussing 
homeland security for a while. Now we are talking about 
hometown security and what people need. First responders and 
law enforcement people say to me over and over and over again, 
``We need some flexibility,'' and we have to remind ourselves 
that all of these areas relative to homeland security are 
personnel-heavy. They are manpower-heavy. If we don't have the 
people to implement all of this, then most frankly we are 
missing the point.
    In the highly prescriptive list of authorized program 
expenditures in the State Homeland Security Grant Program, they 
permit our local first responders to buy night vision goggles 
and euthanasia kits but prohibit them from using the money for 
fundamentals. Now, we need to take a look at this. I am not 
saying the night goggles and euthanasia kits aren't important 
and appropriate at the right time, but if we can't train people 
in the Sheriff's Department and in the local PDs, then again we 
have missed the boat.
    Now, in terms of questions, I would like to ask the 
Sheriff, was everything that was stolen from the site 
recovered, regardless of what it is called? And I am not out of 
the law enforcement community, so I am not going to try to 
resolve your language, but was everything that was stolen 
recovered?
    Mr. Horsley. In short answer, yes, everything was 
recovered. I would like to just echo something about your 
comments about flexibility. You have been a great help to us in 
getting some flexibility when it came to training and backfill 
for our officers, and, as you know, before that wasn't 
possible, and thanks for your efforts in helping us getting 
some degree of flexibility. And I would echo what you say in 
terms of the Homeland Security grants. There does in fact need 
to be greater flexibility to meet local needs.
    Ms. Eshoo. Good. So everything has been secured?
    Mr. Horsley. Everything has been recovered, yes.
    Ms. Eshoo. Was there ever any guidance given to your 
agencies after September 11, formally or otherwise, from 
Federal officials on the need and the best courses of action to 
protect high explosives from theft?
    Mr. Horsley. Not that I am aware of, no.
    Ms. Eshoo. Chief.
    Ms. Fong. No.
    Ms. Eshoo. No? That is stunning to me. That is really 
stunning to me that the Federal Government, given what we face 
to secure our country, never put anything out on this.
    Is this the first security breach at this facility, 
Sheriff?
    Mr. Horsley. No. Actually, one predates my taking office. I 
think it was in 1988 there was a burglary at the site, and at 
the time it was thought that we should put an alarm in. And an 
alarm actually was for both San Francisco's munitions storage 
sites as well as ours, and there were a couple that handled 
fireworks that were not alarm. So an alarm was put in about--
right after that burglary in 1988.
    Ms. Eshoo. What kind of security clearance is there 
relative to those that know that such a site exits? How did 
this individual even know that this place was there? Was a 
superviser for 10 years. I never knew that this place existed. 
Not that I needed to, but----
    Mr. Horsley. I guess we mistakenly believed that it was a 
secret location, and the only people who knew about it were the 
EOD staff from both SFPD, the FBI and the Sheriff's Office. 
Unbeknownst to us, this particular individual, and I won't say 
too much, but was a plumber in that area and apparently had 
seen the officers going into that area and perhaps followed 
them in.
    Ms. Eshoo. So there really aren't--again, when we speak 
about standards, something needs to be spoken to about the 
individuals that are in charge of being secured--not only a 
secured facility with standards surrounding it, but also do you 
think that there need to be standards developed about who in 
fact knows where these facilities are and what they contain?
    Mr. Horsley. I do indeed. I think all of our EOD people 
should be greater security clearance than the average officer.
    Ms. Eshoo. When the theft was discovered, was there any 
initial concern about it being a terrorist threat? I mean how 
was that determined? Common sense?
    Mr. Horsley. To be honest, yes, that was exactly my initial 
thought was that it was potentially a terrorist. So we did 
notify the FBI's Joint Terrorist Task Force. As I said, we also 
notified every law enforcement agency, I think, in the entire 
country and put every particular resource that we and all of 
the local law enforcement had----
    Ms. Eshoo. What did they do, Sheriff, when you contacted 
them? Were they cooperative?
    Mr. Horsley. There was a great deal of cooperation between 
all law enforcement agencies, and we have what is called a 
High-Intensity Drug Trafficking Task Force here, which Chief 
Fong is part of, as well as myself and Highway Patrol. We have 
eight different Federal law enforcement agencies that are part 
of it, as well as eight State and local agencies. And so we 
have really established, I think, a great network of excellent 
working relationships with both our Federal and State 
counterparts, and I think all of that was helpful in bringing 
this case to a successful conclusion.
    Ms. Eshoo. Does the State of California--I don't know who 
wants to take this--does the State of California have 
regulations regarding the storage of explosives that are more 
explicit than those created by the ATF?
    Mr. MacGregor. I don't know--referring to who was going to 
answer the question. To answer your question, I think the short 
answer is we rely on title 27 of the Federal regulation as a 
guide here in California. We have recommended or we have asked 
that the State look at adopting those regulations formally 
through legislation. There are some additional enhancements 
here in the State as it relates to transportation of 
explosives, but storage really falls under those Federal 
criteria.
    Ms. Eshoo. Don, did you want to add anything to that?
    Mr. Horsley. No.
    Ms. Eshoo. Well, again, I want to thank you. I am very 
proud to work with you, and I think that when we talk about 
standards that in listening to you and watching you work and 
valuing our partnership, that there is only one standard for 
all of you, and it is called high. So thank you to all of you. 
Thank you, Mr. Chairman.
    Mr. Shays. I thank you very much. Let me say to all of you 
that I sometimes go to an event and sometimes after the event I 
say, ``I really had a tougher question but I didn't want to ask 
you.'' The tougher question I appreciate having the opportunity 
to respond to. I learn from it. And if I could just go beyond 
the issue of the buck stops here and so on and just ask you to 
respond to a few questions, Sheriff.
    When I saw the facility, I thought the facility was short 
of pathetic, and I am just curious, have you ever seen that 
facility, and is that facility that you have been to or has it 
just never showed up on your radar screen?
    Mr. Horsley. I have seen it once.
    Mr. Shays. Yes. I expected to see a facility with an outer 
gate and inner gate and I won't say a moat but close to it. I 
expected to see an alarm system that was attached to all four 
magazines. I think the alarm system was only attached to one; 
is that correct?
    Mr. Horsley. No. It was attached to two.
    Mr. Shays. To two of the four.
    Mr. Horsley. Of the four.
    Mr. Shays. And it was basically a solar panel that gives it 
some kind of juice to do the alarm system if it is functioning. 
What do we know about how long that system hasn't functioned?
    Mr. Horsley. Regrettably, I believe it has been off for 
probably 10 years.
    Mr. Shays. Yes. OK. And in terms of this to say, who is in 
charge of it, ultimately? By the buck stops here, are you in 
charge or is San Francisco in charge, is the State in charge? 
Who is in charge?
    Mr. Horsley. I think each agency is responsible for their 
own magazine, so I was certainly responsible for ours.
    Mr. Shays. OK. But in a sense, my feeling is if everyone is 
in charge, no one is in charge, candidly.
    Mr. Horsley. I agree.
    Mr. Shays. Yes. So in a sense, I mean it is important for 
us to know what the Federal requirement is and the Federal 
mandate, but I suspect you don't believe that we have to tell 
you how to run a facility to have it be performing properly, 
correct?
    Mr. Horsley. In retrospect, certainly not. We should have--
we were certainly negligent in the way it was run. And I would 
have to say that I had never been out to the site, to be 
honest, until after the break-in, and I was as appalled as you 
to see the surroundings.
    Mr. Shays. Which just suggests with the requirements that 
people have it just didn't show up on radar screens. What I 
don't quite understand is, first, tell me why this facility is 
needed and maybe the other two--first off--when I say first 
off, I have a lot of first offs, sorry--the county uses this 
facility, correct?
    Mr. Horsley. Right.
    Mr. Shays. The FBI uses this facility?
    Mr. Horsley. Yes, they do.
    Mr. Shays. And the San Francisco Police uses it. Anybody 
else use this facility?
    Mr. Horsley. Not to my knowledge, no.
    Mr. Shays. So, basically, there is a mixture of three, and 
each of you know you have to keep track of your own use of it, 
but are you able to use each of the magazines or are you 
assigned? Explain to me.
    Mr. Horsley. We were assigned to two of the magazines.
    Mr. Shays. And the two that you were assigned to you had an 
alarm system that didn't work, but you had an alarm system to 
those?
    Mr. Horsley. No, to only one. Only one of them. The one 
that stored the high explosives. The one that stored the 
confiscated fireworks did not have an alarm.
    Mr. Shays. OK. So why would the County need this facility? 
What would you have that you would need to put in there?
    Mr. Horsley. Well, a bomb squad has to have a certain 
amount of material. For example, recently, discovered a couple 
of World War II torpedoes in one of our harbors, and you have 
to destroy it. So you do need to have some explosive to explode 
those torpedoes. So you do need to have some explosive to get 
rid of devices like that.
    There are other cases where we will sometimes come across 
dynamite that some person has in the house and maybe they have 
subsequently been deceased and an executive comes along and 
finds that we have a very unstable substance. So we have to 
take it somewhere before we can dispose of it. And the other is 
that we oftentimes have to respond to bomb calls and again we 
seize that material and you have to keep it for both evidence 
until eventually you can destroy it. And then, last, you do 
need to have some C4 if you are going to do some training for 
your canine officers.
    Mr. Shays. Thank you. Chief Fong, how does San Francisco 
use this facility? Is this the only facility you use or is it 
one of many?
    Ms. Fong. This is the main facility for the city. There is 
a separate EOD facility at the airport.
    Mr. Shays. OK. And what do you use it for?
    Ms. Fong. As the Sheriff mentioned----
    Mr. Shays. The same things?
    Ms. Fong. Similar things.
    Mr. Shays. Anything different than other than the Sheriff's 
mentioned?
    Ms. Fong. No.
    Mr. Shays. OK. What I didn't understand was your reference 
to the bridges. I mean if you have explosives on one side, you 
have to get it to the other side, whether or not the facility 
is here. I don't get the concept of the bridges as it relates 
to this issue.
    Ms. Fong. There are Department of Transportation 
regulations that prohibit us from transporting explosive 
devices over bridges.
    Mr. Shays. No, I understand that. But I don't understand 
how that relates to a facility. I mean if you have it in San 
Francisco, how does that relate to having this facility?
    Ms. Fong. If the evidence, for instance, is from San 
Francisco, we can come to San Mateo County without going on a 
bridge. If we were to have a facility for storage in Marin or 
in the East Bay, we would have to rely on bridges in order to 
get there.
    Mr. Shays. OK. So since the issue is from San Francisco 
this is a site you can get to without a bridge.
    Ms. Fong. Without a bridge, yes.
    Mr. Shays. Right. And if I could ask out deputy chief, how 
do you--you don't use this facility.
    Mr. MacGregor. Don't use that particular facility; no, sir.
    Mr. Shays. But you do have facilities. Did you use them for 
the same general purposes?
    Mr. MacGregor. Largely, almost the vast majority of ours is 
exclusively for training.
    Mr. Shays. When we look at our nuclear facilities, we 
realize I think we have too many. This is where we have weapons 
grade material, where we process it and so on, and we make our 
country safer, I think, I believe, if we are able to reduce the 
number of facilities. Is there logic, do you think, in trying 
to find less facilities or do we need to have these facilities 
close enough? I guess you wouldn't know how many we have around 
the country, none of us seem to. Amazing.
    Mr. Horsley. We do know something about the Bay Area. There 
are facilities in other counties, and we do--the idea of having 
a regional with San Francisco and San Mateo County I think is 
exactly what you are saying, is that we don't each individually 
have a separate site, and when we find a new site, it will 
again be a shared site between San Francisco and San Mateo 
County.
    Mr. Shays. OK. And the bottom line, though, is from that it 
is conceivable that we might want to see some consolidation 
around the country. That might be a question we might----
    Mr. Horsley. I would suggest that is an excellent idea, and 
we will probably work with Santa Clara County as well.
    Mr. Shays. OK. In terms of cost sharing, is there any costs 
involved here that you had to cost share or is there no real 
costs?
    Mr. Horsley. Well, there wasn't any cost sharing, but 
probably there would be in the future.
    Mr. Shays. Let me just react to something, Chief MacGregor, 
that you said when you made reference to the whole issue of 
mandate. I believe you require things that most of the time you 
need to come up with the money. But if we require a local 
school system that is discriminating to stop discriminating, we 
don't necessary feel we have to provide them money so that they 
can do what they should be doing, which is not discriminate.
    It seems to me that if you all move this stuff, that it is 
not necessarily a requirement--I mean I am throwing it out for 
dialog--not necessarily a requirement that the Federal 
Government enable you to have it just because we tell you you 
need to store it safely. It doesn't seem to me as a general 
rule that just because we say we want there to be safety and 
there should be some uniformity that the Federal Government has 
to come up with everything to pay for it. Otherwise, you are 
basically saying to me that any time the Federal Government 
does anything, we have to give you money, give my local 
community money.
    Now, I do have some sensitivity on this other issue. Our 
subcommittee, as I said, has had over 50 hearings. We have had 
a lot of hearings on the whole issue of how do we provide money 
to first-line responders, or first responders, and we believe 
it needs to be on a threat, not based on a per capita, which is 
your point, Mr. Lantos.
    The fact is, in Congress, when we saw that bill come out of 
the Select Committee on Homeland Security, because we haven't 
yet decided how we reorganize government to have oversight, it 
went to the Transportation Committee, and the Transportation 
Committee on a bipartisan basis almost uniformly decided that 
it would be based on per capita, a good chunk of it. So this is 
a debate that we have to sort out in Congress, and it doesn't 
seem to know Republican or Democrat, it seems to be based on 
who is getting more money and who is getting less.
    I believe that if parts of my State got less and you 
donated parts of my own, that I could make argument to a threat 
area because we are in New York City. Clearly, a place like New 
York City needs a lot more money and Boston and Washington, DC, 
and San Francisco, and then it seems to me it filters down from 
there. But I just want you to know in this debate that we are 
having in Washington, it doesn't seem to have fallen on party 
lines, it seems to be on geographic issues, and everybody, 
every member wanted to say, ``I did something.''
    You had your September 11 book here. I will say to you, 
they have done a great job. I think they have done a great job, 
and they have given us--and they say it needs to be threat-
based allocation of money and they say a lot of other things, 
but they have given us, I think, a very fine instrument to be 
able to move forward.
    I don't really have any other general points other than to 
say I think we are all on the same wavelength here, and I do 
appreciate, Sheriff, your candor. We all need to be working 
together, we all need to be doing a better job. We all, 
ultimately, are part of the same team--not, ultimately, we are, 
and, ultimately, we better figure that out. I don't know if 
there is any closing comments that any of you would like to 
make or, Mr. Lantos, do you have any----
    Mr. Nevin. Just a follow-out from this, what I would hope 
that a look, a side look or whatever from this, although it 
wouldn't be necessarily part of this issue this morning, but a 
look at environmental regulations when it comes to destruction 
of disposing of these materials, how many of these materials is 
necessary for evidence, real, true evidence in future work of 
law enforcement and how many can we safely and environmentally 
soundly get rid of?
    Mr. Shays. I think that is a key point. Thank you for 
making it. Bottom line, some of this stuff we may not need to 
keep, but the stuff we do we want to have better be secured.
    Mr. Church. When you consider the criteria for proposed 
legislation, you might consider with respect to shared 
facilities requiring an agreement between the agencies as to an 
assumption of responsibility and perhaps a filing of that 
assumption with the ATF.
    Mr. Shays. So your point is it needs a formal agreement to 
protect, and it seems to me we are letting it--one person 
ultimately needs to take charge. We shouldn't have these shared 
facilities without ultimately one person saying, ``This will be 
my responsibility.''
    Mr. Church. Exactly. You raised the point that when 
everybody is sharing a responsibility and everyone is in 
charge, no one is in charge. I think a written agreement would 
delineate that and solve that issue.
    Mr. Shays. OK. Thank you. That is a very helpful way to 
describe it. Any last comment from any of you?
    Mr. Horsley. I would just say that I oftentimes tell my 
staff that a crisis sometimes creates an opportunity for growth 
and this crisis certainly creates an opportunity, I guess, for 
us to look at this from a State and national perspective, and 
it forces us internally to do a much better job than we did in 
the past. So thanks for the hearing.
    Mr. Shays. Well, thank you. But it also, I think, gives you 
all an opportunity, given you had this experience, to kind of 
lead the charge and say, ``These are lessons we have learned, 
and this is what we think needs to happen,'' and I appreciate 
that a lot.
    Mr. Horsley. Thank you.
    Mr. Shays. Thank you. All set?
    Mr. Lantos. Can we just thank all the other officers for 
their participation in the hearing?
    Mr. Shays. Oh, absolutely, yes.
    Mr. Lantos. Thank you, Mr. Chairman.
    Mr. Shays. I will say that one of the things of September 
11th that is very touching for me, is September 11 was one of 
my white collar constituents who knew that their services were 
not required as we tried to deal with dealing with September 
11, obviously, as you know, it was right near our community, 
and so I saw presidents of companies literally handing out 
gloves at the Ground Zero just wanting to be a part and a 
tremendous respect for our police, fire, emergency medical, our 
first responders of all kinds and I pray that we haven't lost 
that respect, because we have deep respect for what all of you 
do, and I don't think we have lost that respect, but it is good 
to be reminded. Thank you, Mr. Lantos.
    We are going to get to the next panel. I will just call 
them up. I am going to have Mr. Lantos swear them in and begin 
the testimony. Mr. James Christopher Ronay, president of the 
Institute of Makers of Explosives, and Mr. Barney T. Villa, 
international director, International Association of Bomb 
Technicians and Investigators. Mr. Lantos will swear in our 
witnesses. I will be back shortly to proceed.
    Mr. Lantos. If you gentlemen will please raise your right 
hands.
    [Witnesses sworn.]
    Mr. Lantos [presiding]. Please be seated. We will begin 
with you, Mr. Christopher Ronay. You are president of the 
Institute of Makers of Explosives. You have a long history of 
experience in this field. I would like to ask you to summarize 
your testimony in about 5 minutes or so, telling us what your 
institute does and what your views are concerning the issue 
that brought us here and the broader issue of what Federal 
legislation we might need to plug the loopholes which exist.

STATEMENTS OF JAMES CHRISTOPHER RONAY, PRESIDENT, THE INSTITUTE 
  OF MAKERS OF EXPLOSIVES; AND BARNEY T. VILLA, INTERNATIONAL 
  DIRECTOR, INTERNATIONAL ASSOCIATION OF BOMB TECHNICIANS AND 
                  INVESTIGATORS, WHITTIER, CA

    Mr. Ronay. Thank you, Mr. Shays and other members of the 
subcommittee. My name is Christopher Ronay. I am the president 
of the Institute of Makers of Explosives, commonly in the 
community referred to as the IME. The IME represents the U.S. 
manufacturers of industrial high explosives and other companies 
that distribute explosives or provide related services.
    Over 2\1/2\ million metric tons of industrial explosives 
are consumed annually in the United States, as you have pointed 
out. They are essential to mining, quarrying, construction, 
demolition, the production of petroleum and natural resource 
exploration. Metals, minerals, oil, electricity, construction 
activities and materials and many consumer products are 
available today because of these explosive products.
    The IME is the safety and security institute serving the 
industrial explosives business, the government and industry for 
over 90 years. IME member companies produce over 98 percent of 
the explosives that I have described. Our mission at the IME is 
to promote safety and the protection of employees, users, the 
public, the environment and to encourage the adoption of 
uniform rules and recommendations in the manufacture, 
transportation, storage, handling, use and disposal of these 
explosive materials.
    The history of our involvement in the development of 
Federal explosives law dates back to 1913. Industry best 
practices and recommendations are codified in our Safety 
Library Publications. Many of these have parts of them that 
pertain to explosives storage. They are constantly updated and 
evaluated by our experts in the industry. These recommendations 
were developed over the years through scientific application of 
engineering principals and practical experience.
    Immediately following the events of September 11, the 
institute developed a set of enhanced security measures, a copy 
of which is attached to my statement in the back. We developed 
this actually on September 11, on that date. I was in touch 
with many of my member companies in order to develop these 
enhanced security measures. We knew we needed to step up 
vigilance due to the increased terrorist threats to America, 
even though explosives had never been used on that day.
    These measures were disseminated throughout industry and to 
all relevant government agencies. One of the most significant 
recommendations in this document was for government-
administered background checks and security clearances for 
everyone who handles explosive materials. And, as the ATF 
testified, that was brought about in the Safe Explosives Act of 
2002.
    While these enhanced security measures generally addressed 
security, background checks and facility and transportation 
security, it was only the beginning. The institute is 
developing a 30-page set of comprehensive recommendations 
regarding the security of all operations involving explosives 
materials.
    It is anticipated that these recommendations will be 
published in the next couple of months. They are not yet 
approved by our board and our membership, but this is a very 
extensive and detailed document, which goes far beyond what is 
required by Federal law today. This is in keeping with 
developing a viable strategy to protect the Nation's explosive 
storage facilities that you mentioned at the beginning of this 
hearing. It has been our practice to update and make new 
recommendations, as necessary, throughout the 90-year history 
of this organization.
    Finally, I would like to reiterate that the IME's founding 
documents in 1913 set forth safety and security as a platform 
of the organization. Regulating entities have relied on us ever 
since as the most knowledgeable and competent source of 
information on which to base their explosive regulations. We do 
not take that responsibility lightly.
    I want to thank this subcommittee for the opportunity to 
participate in this hearing and to present the best practices 
of the industry as they relate to the storage of these 
essential products. We appreciate your efforts to address this 
sensitive and important issue surrounding the protection of 
explosive materials. This concludes my summary testimony. I 
will be pleased to answer any questions that you have.
    [The prepared statement of Mr. Ronay follows:]

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    Mr. Lantos. We will have some questions. First, I want to 
introduce Mr. Barney T. Villa, with 30 years of law enforcement 
experience. You currently are director of the International 
Association of Bomb Technicians and Investigators, and we are 
delighted to have you here.
    Mr. Villa. Good afternoon, sir. Thank you very much. Mr. 
Chairman and members of the subcommittee, good afternoon. I am 
Barney T. Villa, international director of the International 
Association of Bomb Technicians and Investigators, referred to 
as the IABTI. I am also a full-time deputy sheriff for the Los 
Angeles County Sheriff's Department, assigned to the Arson 
Explosives Detail. With me today is Greg Smith, Region 1 
director of the IABTI. Greg is also a full-time employee with 
the California Department of Forestry, Arson Bomb Unit.
    The IABTI was formed after the first National Explosive 
Ordnance Disposal Conference, held in March 1973, in 
Sacramento, CA. It was decided then that a professional 
association was required to address the needs of this unique 
group. This led to the establishment of the International 
Association of Bomb Technicians and Investigators. A formal 
charter was developed with a total of 64 members. We are now 
5,000 members, in 60 countries around the world.
    The IABTI is an international, independent, nonprofit, 
professional association committed to countering and defeating 
the growing menace that bombs and weapons of mass destruction 
present worldwide. The IABTI is the world leader in the 
dissemination of information and training on destructive 
devices to the national and international public safety 
community. This is sought through the exchange of training, 
expertise and information among personnel employed in the 
fields of law enforcement, fire and emergency services, the 
military, forensic science and other related fields.
    While the legitimate uses of explosives in areas such as 
construction, mining and land clearance has made our modern 
lives easier, tragically, explosives have also been diverted to 
criminal activities, including murder, intimidation, extortion 
and malicious destruction of property. Explosives have always 
been a critical tool for bomb disposal technicians, bombing 
investigators and in other related fields. They are used in the 
render safe and disposal of improvised explosive devices and 
components, technician training and scientific testing.
    The IABTI strongly advocates that all of its members who 
maintain explosive storage facilities ensure that they are in 
compliance with local, State and Federal guidelines related to 
explosive magazines. State and local authorities are subject to 
Federal explosive law relative to storage, but as they are not 
licensees or permit holders, they do not have oversight by ATF. 
Entities request an ATF review of their storage facility to 
verify their compliance. Additionally, technicians can receive 
training on the proper use, handling and storage of explosives 
through the IABTI.
    The IABTI further advocates that their members exercise 
best practices and measure up to an equivalent of ATF standards 
and regulations or some other professional set of guidelines. 
We recommend that additional security enhancements, such as 
security lighting, fencing, alarms and cameras, are installed 
at their respective explosive storage facilities wherever 
practicable. The IABTI understands and respects the budgetary 
problems faced by bomb squad commanders who seek funding for 
such items for the safety and security of their explosive 
storage facilities. We understand from our membership that this 
funding is sometimes only approved after substantial delays or 
after a theft occurs. This is often due to conflicting 
priorities in the allocation of the funding that is available 
to most agencies.
    The IABTI believes that the aforementioned enhancements to 
the current standards are critical to ensuring the secure 
storage of explosives. The budget constraints experienced by 
most agencies prohibit the implementation of many of the 
recommended security enhancements. We believe that the security 
of explosive storage facilities might prove to be a proper 
allocation for Homeland Defense funds. Further, we respectfully 
request that the committee review the allocation of these funds 
to determine if any might be available for this important 
project.
    We encourage all of our members to provide best practice 
standards and advisory functions in the preparation of relevant 
safety and security legislation. Many of our members in the 
United States solicit the ATF to inspect their explosive 
storage facilities on a more frequent basis than that which is 
mandated by current regulations. Federal Law relating to 
explosives taken from 18 USC chapter 40, subpart K- Storage, 
section 55.204, states any person storing explosive materials 
shall inspect his magazine at least every 7 days. We encourage 
our membership to surpass this mandate and perform inspections 
on a daily basis whenever possible.
    We know from ATF statistics that break-ins occur in many 
different ways. Locks cut and pried, doors pried or blown open, 
keys used, wall entry, roof entry, window and/or vent entry, 
floor entry and even the inside helper from the respective 
company who owns and maintains the explosive storage facility. 
The IABTI encourages its membership to adhere to all of the 
Federal laws and regulations as a best practice policy to 
prevent such activities from happening.
    The possession of explosives by civilian bomb technicians 
is paramount in order for them to perform their daily duties. 
In addition to the functions while doing render-safe 
procedures, we are also mandated to perform a minimum amount of 
training with both high and low explosives each year to keep 
our certification current as working bomb technicians. Major 
bomb squads across the United States maintain and operate their 
own explosive storage facilities. They strictly adhere to 
current Federal regulations by working very closely with each 
other in their efforts to prevent such thefts.
    On behalf of the men and women of the International 
Association of Bomb Technicians and Investigators, we thank you 
for your time today. We remain committed to bringing the very 
best to our membership with new ideas that may come forth from 
these meetings. The use of explosives remains the preferred 
weapon of terrorists, and the use of explosives by bomb 
disposal technicians will continue to be a valuable tool in 
their fight in the war on terrorism.
We praise the efforts of the subcommittee to address the 
sensitive and important issues surrounding the storage of 
explosive materials. This concludes my testimony, and I, too, 
would be pleased to answer any questions that you might have.
    [The prepared statement of Mr. Villa follows:]

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    Mr. Lantos. Well, thank you very much, both of you. First, 
let me begin by a general question. You were here throughout 
the hearing, and you noticed that both of my colleagues and I 
expressed disagreement with the current treatment of privately 
owned and publicly owned facilities where explosives are 
located. Do you agree with the current practice, that when it 
comes to public facilities, we should deal with voluntary 
compliance while with respect to privately owned facilities, 
there should be licensing and in case of failure removal of the 
license? It seems to me and it seems to my colleagues, I take 
it, that explosives, since they are the weapon of choice of 
terrorists, in the post-September 11 era must have the same 
treatment whether they are still the private or public 
facilities. I would like to ask each of you to give your views 
on this. Mr. Ronay.
    Mr. Ronay. In as much as it is within the purview of the 
private sector industry to comment on whether it should be or 
not, I would like to emphasize that they are required to follow 
those rules. It is the licensing issue that is in question. 
Since public facilities or agencies are not licensed, ATF does 
not have the authority to inspect them. They can provide----
    Mr. Lantos. Would you say that we give ATF that authority? 
That is the question.
    Mr. Ronay. I certainly would have no disagreement with 
giving them the authority. I do have a question in that if they 
were authorized to license local entities and they found that 
licensee out of compliance and they removed or rejected his 
license, he would still have to have explosives in his 
possession to do his job of public safety.
    Mr. Lantos. Well, the other option would be if, for 
instance, hypothetically, San Mateo County is now licensed to 
store explosives, does not live up to the licensing 
requirements and the license is removed, this county would have 
to contract out to Santa Clara County for storage of explosives 
if in fact they need it.
    Mr. Ronay. That would certainly be one solution.
    Mr. Lantos. Well, can you think of any other rational 
solution or do you think that a public--I mean we now had 
Sheriff Horsley privately and publicly admit they goofed, they 
made a mistake. The facility was unsafe. It was broken into, 
200 pounds of explosives were stolen, and had it not been for 
the extremely skillful work of our law enforcement agencies, we 
would not know today where these explosives are, whether they 
had gotten into the hands of terrorists and what they could be 
used for. So if a public agency is incapable of living up to 
its responsibility of safeguarding explosives, then, clearly, 
that agency will lose its right to store explosives.
    Mr. Ronay. That does present a problem for an agency that 
has those responsibilities in bomb disposal, explosive entry 
and so forth. So I think the punishment, if you will, or the 
result of non-compliance would have to be measured in some way 
other than denying that community the ability to do their job. 
And I think from ATF's point of view, that is the only way that 
they enforce the law now except for prosecution, as Mr. Nelson 
mentioned, they lift the license. And in a private entity, that 
means out of business. So there is that severe penalty there, 
and someone else picks up that business. But in the public 
atmosphere or arena, that isn't the case, and Mr. Villa is 
probably in a better position to address that than I, but that 
would be my perspective on it following a career in law 
enforcement myself.
    Mr. Lantos. Mr. Villa.
    Mr. Villa. In answer to your question, yes, and I see every 
day as being a learning experience, and from this situation, be 
it in northern California or southern California where we know 
these thefts have occurred at other law enforcement agencies, 
Nashville, we would encourage again anything that would be 
proactive to prevent the future theft of explosive magazines.
    Mr. Lantos. Do you therefore favor treating both private 
and public storage facilities on the same basis, on a mandatory 
basis, not on a voluntary basis?
    Mr. Villa. It would appear that would be a recommended way 
of proceeding in the future, yes.
    Mr. Lantos. Now, let me ask a general question of you, Mr. 
Ronay, because you have lived with this industry for a long 
time, and most of us know very little about it. You are telling 
us that is a $1 billion industry; 2\1/2\ million tons of 
explosives are sold every year, about that. How concentrated is 
the industry, how many manufacturers are we dealing with?
    Mr. Ronay. Not very many. We have approximately less than 
20 manufacturers.
    Mr. Lantos. On the top five control how much of the market?
    Mr. Ronay. The top five probably control--you know, this 
isn't something that IME keeps tracks of, but I am going to 
guess that they probably control 80 percent of the market.
    Mr. Lantos. Is there any problem with respect to storage as 
far as the manufacturers are concerned?
    Mr. Ronay. There are always problems surrounding the 
security of any of our operations when you are dealing with an 
inherently hazardous material, a dangerous material like 
explosives. Manufacturers apply not only compliance with the 
regulations but they go above and beyond those regulations in 
many cases where their facilities can allow it or mandate it 
and what they can afford. I mean we have large and small 
manufacturers, distributors and using entities which are not 
IME members but all of those mines, quarries and facilities out 
there that also have to store explosives. The impact of putting 
a security alarm system in, for example, is very different for 
them than it is for a large manufacturer who can plan to do 
that when he doesn't have to move it around necessarily. So it 
is very difficult to say one size fits all in this type of 
regulatory activity.
    Mr. Lantos. Mr. Villa, what is your view of the episode 
here in San Mateo County?
    Mr. Villa. Well, if I may, I do have a prepared statement 
for that, and if I could read that. I do not know anything 
about the security conditions, good, bad or otherwise or of the 
magazines involved in the report of this of explosives. This is 
in response to the real and anticipated backlash that the 
incident may entail. By the way, great job to the investigation 
of this incident and the prompt apprehension of a suspect, 
major recoveries of the stolen goods. This was a tribute to 
great teamwork. The ATF press release that I saw is a nice 
example of giving appropriate credit to the local agencies 
involved for their diligent work toward solving these 
burglaries.
    Mr. Lantos. Now, how many bomb squads are there in the 
United States, to the best of your knowledge?
    Mr. Villa. Currently, there are 450 accredited bomb squads, 
and these are accredited by the National Association of Bomb 
Squad Commanders. I have been touch with Stan Matheson and the 
current Chair of the National Association of Bomb Squad 
Commanders. It is my understanding that he has prepared a 
letter for this hearing today to be read into the record. Greg 
Smith is a bomb squad commander, and I am sure he would be 
happy to read that into the record if so be.
    Mr. Lantos. Would you like to do that, sir? Do we have it 
in the record already? Oh, OK. It is in the record. Good. Good. 
Do each of these bomb squads have a storage facility, to the 
best of your knowledge?
    Mr. Villa. To the best of my knowledge, not every single 
one would have one. It would be a similar situation such as the 
incident that we are talking about.
    Mr. Lantos. Where they would share it?
    Mr. Villa. Yes. Multiple agencies would share it.
    Mr. Lantos. Mr. Ronay, you were out at the site with us 
this morning?
    Mr. Ronay. Yes, I was.
    Mr. Lantos. This is the first time you saw the San Mateo 
facility?
    Mr. Ronay. Yes.
    Mr. Lantos. Will you share your candid view with us of what 
your judgment was of the quality of that facility in a time of 
terrorist threats?
    Mr. Ronay. Well, let me address it in terms of the facility 
as I saw it very briefly this morning and the regulations. It 
appeared to me that all four of those storage magazines were in 
compliance or were up to the specifications required for 
magazines. It also appeared to me that the American Table of 
Distances, that is the separation distances between the 
magazines and public highways and inhabited buildings, was 
appropriate, although I couldn't judge that entirely. The 
security of the location, that is the locked gates and the 
access to it, certainly appears to have exceeded what is 
required in regulations of any explosives storage site. The 
fact that they had an alarm system on it, albeit it was not 
functioning, is also in addition to what is required by Federal 
law.
    Now, we are recommending today, in a post-September 11 
environment that security alarm systems, photographic security 
would be a very appropriate and we recommend that it be in 
place at storage facilities where it is appropriate. There are 
situations where it cannot possibly be implemented, although 
technology today is coming around to the point where these 
things can be as remote as the moon if necessary, and of course 
that will enhance security down the road. Historically, that 
hasn't been the case, and because magazines are remotely 
located for safety reasons, they are very difficult to secure 
in the public sector and in the private sector.
    So my take on what I saw this morning was that it was not 
particularly unusual. I might even hazard a guess that location 
was the same when that was an operating commercial quarry. I 
don't know that but I am guessing 30 years ago when it was a 
quarry that might have been where those magazines were located. 
And someone would have had to pass through these security locks 
to get to it, which is probably in excess of what many 
facilities have today.
    Mr. Lantos. So what you are saying is this facility, which 
was broken into by a couple of thugs, is probably better than 
some facilities elsewhere in the country.
    Mr. Ronay. Yes, I would say so, because of the gated 
security only, really, the fact that we went through how many 
gates to go in there this morning, which were locked, 
apparently.
    Mr. Lantos. Mr. Chairman.
    Mr. Shays [presiding]. Thank you, Mr. Lantos. I apologize 
for not being here for your oral testimony. I am on a different 
timeframe back East and had to make a few calls. So some of 
what I may ask could be a little repetitive, and I apologize, 
and I hope Mr. Lantos will give me a little leeway there.
    I, first, would love to know, this may sound a little 
strange, but what got you in this line of work? I mean when you 
grew up, I am not sure that either of you said, ``I am going to 
get into the explosives industry business.'' Did it just evolve 
over time or is it----
    Mr. Ronay. It would seem to, yes. I mean I had some 
military experience with explosive ordnance disposal. I got 
into the FBI and ended up, because of that other experience, 
working with explosives for, I think, 18 years of that career. 
And then the industry brought me in to do this, so I have been 
around it for 35 years.
    Mr. Shays. Mr. Ronay, when I read your bio, I didn't know, 
how long were you in the FBI for? I knew you were in----
    Mr. Ronay. Twenty-three years, almost 23 years.
    Mr. Shays. Mr. Villa, how did you get into this line of 
work?
    Mr. Villa. As a deputy sheriff for the County of Los 
Angeles, I was invited to joint the bomb squad as a result of a 
supervisor that I used to work for. And when there were some 
openings in the bomb squad, I was asked to join the bomb squad. 
I find it to be the best job in law enforcement based on the 
fact that as a bomb technician and investigators, we know when 
we go down range and render the device safe, we are able to go 
out and investigate the crime and put the criminals in jail who 
made the bomb.
    Mr. Shays. Well, I think it is extraordinarily important 
work, but I think it is highly dangerous. You must have a keen 
sense of focus, and I appreciate both of you. Mr. Ronay, were 
you actually in making bombs harmless as well or were you more 
administrative?
    Mr. Ronay. Well, the 2 years that I spent in explosive 
ordnance disposal operations I was the commander of the 
Explosive Ordnance Disposal detachment at Fort Benning, 
Georgia, and we did that on that base and in the surrounding 
areas. And in those years, in the sixties, the military had a 
large responsibility for the surrounding community in the bomb 
disposal business. And as it has developed over the years, law 
enforcement has taken that responsibility over.
    Mr. Shays. I have been to Iraq five times, and the last 
meeting I had was with the folks that--it is an acronym called 
SEXY but they basically are trying to analyze the detonation 
devices, who makes these bombs. And I knew the first few times 
I was there that there were literally hundreds of depots of 
munitions that were miles square.
    But what I learned the last time was that they had pre-
deployed these munitions all along the Iranian border, and they 
are in farms, they are in shacks, and there are just people 
continually going and getting them. And what fascinated me was 
all the different ways they detonated these weapons, from your 
keychain to what opens your car doors, to your garage door 
openers, to the kids that make these little model cars run, to 
cell phones and so on.
    But what was fascinating to me was they were actually able 
to tell us how many people made these weapons, and they could 
almost begin to tell us where they were made based on the 
materials used. It is an amazing amount of work, and they only 
had 10 people. They have increased that to many more, and they 
are getting a lot more successes and actually tracking who is 
making these weapons.
    But from my standpoint, obviously relating to this hearing, 
is that is the technology continuing to improve, and is it 
easier for someone not in the profession and in a vocation to 
make weapons? Is it easier today if it is not your vocation to 
make weapons, significant explosive devices?
    Mr. Villa. I can answer that based on the age of the 
computer and the Internet. We have a youthful fascination of 
children who like to experiment with explosives, and what they 
don't know they can obtain from the Internet. Anything and 
everything they want to know about explosives is obtained from 
the Internet.
    Mr. Shays. So the technology is there, but is it also 
easier to make these weapons?
    Mr. Villa. It is everyday materials, some of which you can 
purchase at grocery stores that they can take home and make 
bombs with. This isn't really the forum to address how they do 
it, but----
    Mr. Shays. Yes. I don't need to know that.
    Mr. Villa [continuing]. But it is very simple for them. The 
technology, in some cases, is sophisticated when you talk about 
the electronically controlled devices and electronic 
countermeasures, but it is readily available.
    Mr. Shays. Give some reality to 200 pounds worth of 
explosive devices that were taken. It is not like they needed--
two individuals or three with backpacks could have taken away 
these weapons, correct? They didn't have to drive up. But what 
could they do with these kinds of weapons? The plastic devices 
in particular I am curious about. How could these weapons have 
been used in an a way that would be threatening to society? Is 
200 enough, 200 pounds enough or is it more than enough?
    Mr. Villa. Well, I guess the simplest form, to go back to 
Pan Am Flight 103, it took a very little amount of high 
explosives to take out a 747 out of the sky and kill the amount 
of people that it killed.
    Mr. Shays. How many pounds is speculated that it took?
    Mr. Villa. Less than one.
    Mr. Shays. Less than one?
    Mr. Villa. One pound.
    Mr. Shays. And are plastic devices a bigger concern than 
other types of devices in terms of being able to get through a 
system?
    Mr. Villa. When you refer to plastic, I am assuming that 
you are talking about plastic explosives.
    Mr. Shays. Yes.
    Mr. Villa. C4 or Semtex.
    Mr. Shays. Yes.
    Mr. Villa. It is available.
    Mr. Shays. Should we be more alarmed that someone is able 
to get a C4 explosive device than some other type of device?
    Mr. Villa. We should be alarmed when anyone other than a 
trained professional is in possession of explosives.
    Mr. Shays. Yes.
    Mr. Ronay. Specifically, to address your question, in the 
hands of a criminal, whether it is C4 or emulsion commercial 
explosives or dynamite is probably not the question to be 
asked. It is how did they get a hold of it and what are they 
going to do with it? They all do the same relative damage for a 
terrorist. In the demolition business or in the commercial 
blasting business, there are big differences between them, but 
in a criminal bomb it is not significant.
    Mr. Shays. You are more interested in the fact of not being 
able to know if someone was bringing a device onto an airplane. 
Some devices are easier to get into than others. That is really 
the focus of my question.
    Mr. Ronay. Oh, I see. You refer to the making of plastic 
explosives.
    Mr. Shays. The bottom line is were there any devices that 
had been taken from this facility that would have been easier 
to bring in than some other types of explosive devices?
    Mr. Ronay. Not to my knowledge, although I don't know the 
other explosives that were taken besides the C4. I haven't 
heard what type they were.
    Mr. Shays. Is a blasting cap, a blasting detonator large 
enough to bring down an airplane or would you need something 
more than that?
    Mr. Ronay. You would need something more.
    Mr. Shays. Can you package a few of them together and then 
you have--not necessarily?
    Mr. Ronay. That generally isn't done, but, yes, if you mass 
enough of them together, I suppose you could make a pretty 
good----
    Mr. Villa. And not to minimize what a blasting cap is, a 
blasting cap is made from raw explosives. A blasting cap could 
very easily injure someone or possibly kill them.
    Mr. Shays. The focus of our hearing obviously was to see if 
this is the wake-up call. Well, first off, we view this as a 
wake-up call, and now we are just trying to assess what we need 
to wake up to. It blew me away, but probably not you, because 
this is something you are more familiar with, but it blew me 
away that we do not know how many private facilities, we do not 
know how many public facilities. We clearly are not inspecting 
the private facilities to the extent they need to be inspected 
because of resources not being allocated. But in the public 
facilities it seems like we are not even sure who is in charge. 
You can have a few leaders in this facility. Any of that 
surprise you or was it just common knowledge?
    Mr. Ronay. Well, ATF is not authorized, the government is 
not authorized to know how many public facilities there are. 
They are exempt from the Federal law. Private facilities, the 
commercial facilities, I am not sure if the ATF testified to 
the number of licensees that they had.
    Mr. Shays. They gave licensees but they couldn't tell us 
where they were, the extent to the----
    Mr. Ronay. Well, they can. He just didn't have that 
assembly in the data base.
    Mr. Shays. But they can't because they don't have it in 
their data base. They have the information in raw data, but 
they can't--K-Mart can tell us what sold in the last 10 minutes 
or the last 5 minutes.
    Mr. Ronay. There are probably around 50,000 storage 
facilities in the country, commercial or private, if you will. 
I believe those probably are operated by 12,000 or so licensees 
that ATF licenses. They would have a lot of digging to do to be 
able to account for exactly every location or magazine, which I 
am sure they will do now, and I think that is a good thing to 
do, but it is very difficult to know where every magazine is 
from every licensee.
    Mr. Shays. Because they keep being moved?
    Mr. Ronay. Especially in construction jobs when you have a 
permit to store and to use but you are moving around with the 
job. In this day and age, explosives are actually stored on the 
truck that pumps them into where the drill holes are. So those 
things are constantly in flux even though the operations are--
they are constantly moving. So it is difficult to know where 
all those vehicles or moving magazines are at any one time.
    Mr. Shays. Is there anything that would surprise us but not 
surprise you that you think we should know? And that is not 
meant to be a cute question, but in other words we focused on 
what we focused on, but as you were listening, did you say, 
``My God, if they only knew the half of it.''
    Mr. Ronay. No, but I did repeatedly realize that there is a 
lack of understanding, I believe, by everybody as to what the 
ATF jurisdiction is in these cases. They do not have the 
authority in the law to oversee these public entities.
    Mr. Shays. Mr. Lantos, do you have anything?
    Mr. Lantos. Well, I just want to pursue this last answer. 
Is the ATF lacking authority because it hasn't asked for it or 
is ATF lacking authority because it never asked for authority?
    Mr. Shays. Could I add another one? Is it lacking authority 
because there is some element here that neither of us are 
grasping, because there is a political challenge here that 
neither of us seem to understand but everybody else 
understands?
    Mr. Villa. I think if I could, I think that we expect and 
we hold ourselves up to a higher standard.
    Mr. Shays. Who is we?
    Mr. Villa. Law enforcement. And I would suggest that if any 
bomb squad commander had the appropriation of funds to make 
sure that his or her facility was secure to the max, that is 
what they would be doing, but their hands are tied. They do not 
have a checkbook that allows them to write a check for $10,000 
to update their security standards.
    And with respect to what ATF is doing or what they can do 
or what they have asked for, I believe that it would be a 
proactive approach on their part to enforce the current 
regulations that are already in place. It is incumbent upon the 
local bomb squads to make sure that the security and the 
necessary implementation of security is installed so that we 
prevention future thefts.
    Mr. Lantos. But with all due respect, Mr. Villa, this 
little facility that Congressman Shays and I inspected, and 
several others were with us, is a very tiny facility, very 
inexpensive, terribly run down. We are dealing with two very 
wealthy counties, San Mateo and San Francisco Counties. It 
simply makes no sense to argue that these two wealthy counties 
with their population and with their resources could not pay 
for a secure facility. That simply won't wash.
    Mr. Villa. Agreed.
    Mr. Lantos. It simply won't wash.
    Mr. Shays. In particular, since they more than anyone else 
would know the significance of what is in there.
    Mr. Villa. Sure.
    Mr. Shays. So your comments would almost argue that the 
reverse should happen. That is why it was so shocking, frankly, 
to see it. When I asked about was there anything ``but you 
don't know the half of it,'' you smiled, Mr. Villa. Was that 
just because you have a great smile or you could think of 
something?
    Mr. Villa. I am just thinking----
    Mr. Shays. You are under oath, Mr. Villa. Is there anything 
that we don't know that is out there that better be addressed?
    Mr. Villa. I am not smiling to make light of what is 
occurring here today. I am only suggesting that based on what 
we know and what we hear from bomb squad commanders is 
sometimes they will put in requisitions for funding and they 
are not funded. And that, again, would be incumbent upon each 
individual agency that owns and operates, maintains an 
explosives storage facility.
    Mr. Shays. I am going to tell you what I am hearing. You 
are saying that people who work with these highly explosives 
know that they are underfunded, put in requests to local 
agencies or State or Federal--excuse me, local or State, county 
and are not getting the response, and then they just back off. 
But to me that is like playing Russian roulette. If something 
does happen, they would be the ones who will get blamed, 
ultimately.
    Mr. Villa. Yes.
    Mr. Shays. Maybe what we can do is we can spark a little 
bit of a debate that people ask what they need and then it goes 
up the chain, and ultimately someone will have to be held 
accountable, even if it comes to us.
    Is there anything else, Mr. Lantos, you want to ask? 
Anything you want to put on the record that is not on the 
record?
    I would just conclude by saying to you that I really don't 
think I fully grasp the significance. I said it once but I am 
going to say it again, because the significance of this 
industry to the economic well-being of our communities, and it 
does tell me, though, it needs a heck of a lot more attention. 
And I do believe that there are probably very sound practices 
in the public sector and the private sector, but I also suspect 
that there are some real vulnerabilities in the private sector 
as well that we need to shore up.
    So I am pretty certain that Mr. Lantos and I will be coming 
up with some recommendations, both in writing to the Secretary 
in terms of our appropriators as well. And this will be work 
that we would--some of it might be administrative, some of it 
might be regulation, some of it could be executive order, and 
some of it might take an active of Congress, but we will look 
at all that.
    Mr. Lantos. Mr. Chairman, before we close and before I 
thank our two witnesses, may I thank members of your staff, 
Vince Chase and Bob Briggs, for an outstanding job. Thank you 
for coming out here. Thank the city of San Mateo for their 
courtesy in making this available to us. We thank the San Mateo 
Police Department for their usual and extraordinary 
cooperation.
    Mr. Shays. We will note that and thank you all. And thank 
you, Mr. Lantos, for asking that we come here. The fact is when 
you make those suggestions, we just do it. Thank you.
    With that, we will call this hearing closed.
    [Whereupon, at 1:37 p.m., the subcommittee hearing was 
adjourned.]
    [Additional information submitted for the hearing record 
follows:]

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