[Senate Hearing 108-55]
[From the U.S. Government Publishing Office]
S. Hrg. 108-55
CARGO CONTAINERS: THE NEXT TERRORIST TARGET?
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HEARING
before the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
MARCH 20, 2003
__________
Printed for the use of the Committee on Governmental Affairs
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COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
Jason Foster, Senior Counsel
Joyce Rechtschaffen, Minority Staff Director and Chief Counsel
Jason Yanussi, Minority Professional Staff Member
Darla D. Cassell, Chief Clerk
C O N T E N T S
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Opening statement:
Page
Senator Collins.............................................. 1
Senator Coleman.............................................. 3
Senator Lautenberg........................................... 8
Senator Pryor................................................ 12
Senator Akaka................................................ 16
Senator Fitzgerald........................................... 17
Prepared statements:
Senator Lieberman............................................ 45
Senator Carper............................................... 46
WITNESSES
Thursday, March 20, 2003
Hon. Asa Hutchinson, Under Secretary for Border and
Transportation Security, Department of Homeland Security....... 4
Hon. Peter W. Hall, U.S. Attorney, District of Vermont........... 21
Stephen E. Flynn, Ph.D., Senior Fellow for National Security
Studies, Council on Foreign Relations.......................... 24
Captain Jeffrey W. Monroe, M.M., Director, Department of Ports
and Transportation, City of Portland, Maine.................... 28
Michael O'Honlon, Senior Fellow, The Brookings Institution....... 32
Alphabetical List of Witnesses
Flynn, Stephen E., Ph.D.:
Testimony.................................................... 24
Prepared statement........................................... 70
Hall, Hon. Peter W.:
Testimony.................................................... 21
Prepared statement........................................... 59
Hutchinson, Hon. Asa:
Testimony.................................................... 4
Prepared statement........................................... 53
Monroe, Captain Jeffrey W., M.M.:
Testimony.................................................... 28
Prepared statement........................................... 76
O'Hanlon, Michael:
Testimony.................................................... 32
Prepared statement........................................... 81
Appendix
Photographs (submitted for the record by Chairman Collins)....... 48
Chart entitled ``Participation in CSI Among Top 20 Foreign
Ports'' (submitted for the record by Chairman Collins)......... 52
Responses to post-hearing questions for the record from:
Hon. Hutchinson............................................. 84
Dr. Stephen E. Flynn......................................... 97
Capt. Jeffrey W. Monroe, M.M................................. 103
Michael O'Hanlon............................................. 106
CARGO CONTAINERS: THE NEXT TERRORIST TARGET?
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THURSDAY, MARCH 20, 2003
U.S. Senate,
Committee on Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, Coleman, Fitzgerald, Akaka,
Lautenberg, and Pryor.
OPENING STATEMENT OF CHAIRMAN COLLINS
Chairman Collins. Good morning. The Committee will come to
order.
As we convene this morning, our Nation is at war, and the
threat level has once again been raised to orange, signifying a
high risk of terrorist attacks on our Nation's citizens. Today,
the Committee on Governmental Affairs will focus on what many
experts consider one of our greatest vulnerabilities: Our ports
and the global cargo container system, in particular.
There are some 12 million cargo containers in the worldwide
inventory. These containers move back and forth among major
seaports more than 200 million times a year. Every day, more
than 21,000 containers arrive at American seaports from foreign
countries filled with consumer goods--from televisions to
clothes to toys. In fact, about 90 percent of U.S.-bound cargo
moves by container. We must ensure that these containers carry
nothing more dangerous than sneakers or sporting goods, not
``dirty bombs'' or even Al Qaeda terrorists. This hearing will
assess the progress being made so far toward that goal.
Currently, the Bureau of Customs and Border Protection in
the Department of Homeland Security inspects only a small
percentage of cargo containers. Some are scanned with x-ray
equipment; others are physically opened to verify their
contents. Either way, the process is time-consuming and
burdensome, and historically, Customs has been able to
physically screen only about 2 percent of these containers.
That may have seemed sufficient prior to September 11, 2001,
but we now realize that the stakes are much higher.
For example, one news report last week suggested that some
intelligence officials have a growing fear that Osama bin Laden
is obsessed with the idea of building a nuclear weapon and
smuggling it into our country via a contain ship.
Whether the threat is nuclear, chemical, or biological, and
whether it comes from a terrorist network such as Al Qaeda or a
terrorist state such as Iraq, cargo containers offer a
frighteningly simple and anonymous way to smuggle weapons of
mass destruction into the United States. They arrived by sea,
by road, and by rail. Compared to the aviation industry,
however, containerized cargo shipments are less regulated, less
standardized, and far less secure.
For years, criminals have used cargo containers to smuggle
narcotics, firearms, and people into our country. Last year,
for example, four men pled guilty for their involvement in a
scheme that smuggled seven cargo containers packed with
stowaways to West Coast ports on five separate occasions. Human
trafficking is believed to be an $8-billion-a-year business.
Containers have also been used to smuggle a wide array of
contraband, including illegal firearms and drugs, into our
country.
Smuggling rings know how to exploit the vulnerabilities of
the global container system. Based on a training manual seized
in England, we know that Al Qaeda has targeted smugglers for
recruitment. The training manual also instructed Al Qaeda
members to look for new terrorist recruits among those seeking
political asylum and employees at borders, airports, and
seaports.
Our challenge is to prevent terrorists from exploiting the
global system for moving goods as a means for attacking our
Nation. The good news is that our government has been working
to anticipate and respond to this threat. Since September 11,
the Bureau of Customs and Border Protection has nearly doubled
the percentage of containers examined from fewer than 2 percent
in 2001 to nearly 4 percent in the first quarter of this year.
Since most containers carry legitimate commerce, Customs
officials are working to ensure that high-risk containers are
targeted for inspection. Given that 96 percent of the incoming
containers are not being inspected, however, and that it is not
practical to inspect every container, the systems for targeting
and screening cargo must be highly effective. I have questions
about the system used to accomplish this task and the quality
of the data on which it relies.
In addition to increasing the number of inspections, the
Department of Homeland Security has implemented important new
programs to enhance container security. These programs, known
as the 24-hour rule, the Container Security Initiative, and the
Custom-Trade Partnership Against Terrorism, as well as
Operation Safe Commerce, are well intentioned and designed to
make us more secure. But do they?
Today, we will evaluate how well these programs are
performing. For example, we will hear testimony about Operation
Safe Commerce, which began with a test shipment of a container
of light bulbs from a factory in Slovakia to New Hampshire.
This container was outfitted with tracking and intrusion
detection equipment to test whether the widespread use of such
technology was valid. Some officials were surprised that,
despite crossing five international borders, the antenna, nest
of wires, and power supply attached to the container raised no
eyebrows. And you can see from the photographs \1\ we have the
wires and other information sticking out from this container,
which you would think might have caused an inspection of its
contents. We will hear more about the results of that test in
testimony today.
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\1\ Photographs referred to appear in the Appendix on page 48.
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The threat of an attack using cargo containers is serious
and immediate. I look forward to learning from our witnesses
about the progress that has been made so far and their ideas
for implementing even better, long-term solutions for securing
the global container system and reducing our vulnerability to
this means of attack.
I want to welcome the Senator from Minnesota, a very
dedicated Member of this Committee joining us this morning. I
know that he was presiding over the Senate late last night, and
I appreciate his being with us.
I would like to call upon him if he does have any opening
comments that he would like to make.
OPENING STATEMENT OF SENATOR COLEMAN
Senator Coleman. Thank you, Chairman Collins, and just very
briefly because I do want to hear the testimony and statement
of the Secretary.
One, I want to thank the distinguished Chairman for having
this hearing now. As she has noted, the stakes have never been
higher. The threats are very real and immediate, and as we all
understand, the chain is only as strong as its weakest link.
And all the things that we are doing across the board in terms
of security, be it at airports and other places, there is a
real issue on the minds of average citizens. I think people
understand how we--I think they have a sense of understanding
the enormity of the challenge, but people expect us to deal
with it. And I would note, Chairman Collins, that this is not
just an East Coast or West Coast issue. In Minnesota, we have
the Port of Duluth on the Great Lakes, and this is a concern
right in the heart of America. And so we are all deeply
concerned at this time, and we are looking forward to this
conversation and working together.
Thank you, Chairman Collins, for having this hearing.
Chairman Collins. Thank you very much.
Our first witness this morning is Under Secretary Asa
Hutchinson from the Department of Homeland Security. As the
head of the Border and Transportation Security, Secretary
Hutchinson is the government's highest-ranking official with
direct responsibility for protecting our Nation's border and
ports. Secretary Hutchinson's responsibilities include the
Bureau of Customs and Border Protection as well as the
Transportation Security Administration.
We are delighted to welcome you here this morning. We
appreciate your being with us, and I would ask that you proceed
with your testimony.
TESTIMONY OF HON. ASA HUTCHINSON,\1\ UNDER SECRETARY FOR BORDER
AND TRANSPORTATION SECURITY, DEPARTMENT OF HOMELAND SECURITY
Mr. Hutchinson. Thank you, Madam Chairwoman, Senator
Coleman. It is good to be with the Committee today, and I want
to thank you for this opportunity to testify on a very
important subject. As hostilities have commenced in the Middle
East, our prayers and thoughts are certainly with our men and
women in service, but this hearing is important to reflect on
the security of our homeland during this time and at other
times in our Nation's history. And I am pleased to be here on
behalf of the Department of Homeland Security representing the
Directorate of Border and Transportation Security.
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\1\ The prepared statement of Mr. Hutchinson appears in the
Appendix on page 53.
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Let me first discuss the magnitude of the threat that the
Chairwoman discussed this morning: That terrorists may use
cargo containers as a means to transport weapons or people into
the United States. And the fact is that nearly 6 million cargo
containers arrive at U.S. seaports each year. That fact alone
represents a challenge for homeland security and an opportunity
to be exploited by those who wish us harm.
Recent cases illustrate that cargo containers have been
used to smuggle people, to smuggle cargo, and to smuggle
narcotics, both here and to other countries. To illustrate this
point in the area of narcotics, during the calendar year 2002,
there were 32 cocaine and marijuana seizures in which
containers, used in ocean transports, were utilized to
transport narcotics. There were 19 shipments in which the cargo
itself was used for concealment, and there were 13 seizures in
which the discoveries were that the container was used as a
concealment technique, such as false walls or flooring. And
these seizures occurred from Fort Lauderdale to Miami to
Newark, New Jersey, to Charleston, South Carolina, to
Baltimore. In Fort Lauderdale, 654 pounds of cocaine were
hidden in a shipment of edible gelatin, commingled with
legitimate cargo. In Fort Lauderdale, it was cocaine in a
shipment of commercial starch. In Miami, it was in a front wall
of a refrigerated container. In Newark, New Jersey, it was
3,000 pounds of marijuana concealed inside a shipment of cola
nuts. In Charleston, it was a shipment of furniture involved.
In Baltimore, it was another shipment of furniture.
But it was just not narcotics. If you look at arms
smuggling, you broaden it to a worldwide environment. In
January 2002, Israeli forces seized the Tonga-registered vessel
CORINNE A in international waters in the Red Sea, and
discovered aboard the vessel were 83 canisters filled with
weapons ranging from Strella SA-7 man-portable surface-to-air
missiles to anti-tank mines. These canisters were hidden in
crates and obscured by other cargo.
In addition to the arms and narcotics smuggling, you have,
as the Chairman pointed out, the human smuggling via
containers. In January 2000, 18 illegal Chinese aliens were
discovered in a container arriving at the Port of Seattle from
Hong Kong aboard a vessel. Three of the smuggled aliens were
found dead inside the 40-foot soft-topped container. That
illustrates the danger in how they are utilized.
On March 22 of last year, Canadian authorities captured
three Romanians after having been found in a container of
liquor on board the ZIM EUROPA, which had arrived in Halifax
from Spain. The ultimate destination of the cargo was the
United States, destined for the New York-New Jersey container
terminal.
In March of last year, in Savannah, Georgia, the Georgia
Port Authority Police contacted Savannah authorities in
reference to a suspicious container at the Port of Savannah. In
this instance, a container was observed to have been
compromised and that it had no seal as well as other physical
abnormalities. A closer inspection of it indicated that the
seal was missing, and it was determined that an individual most
likely entered the container in Italy and left when the
container arrived in Spain. And ultimately the destination,
again, was Savannah, Georgia.
In October 2001, an Egyptian was detained in an Italian
seaport and there was wide media publicity about this
particular apprehension. This came about because the police
report reflected an Egyptian individual named Farid Rizk, found
in a container that left Port Said, Egypt, and arrived in
Italy. The container found--he had Canadian passports, maps,
cell phones, laptop computer, airline tickets, and Thai
Airlines security passes. All of these goods led to the
perception that the individual was more than a simple stowaway.
From these incidents, it is evident that there are
vulnerabilities in our sea cargo container systems that have
the potential for exploitation by terrorists. In fact, most
experts believe that a terrorist attack using a container is
likely. And so the logical question is: Well, what is our
strategy to deal with this vulnerability?
The first part of our strategy is the Container Security
Initiative. I want to applaud Commissioner Robert Bonner for
his aggressive approach to this initiative, the development of
it, and the implementation of it. Under CSI, we are identifying
high-risk cargo containers and partnering with other
governments to pre-screen those containers at foreign ports
before they are shipped to our ports. The four key elements of
the Container Security Initiative are: First, to identify the
high-risk containers; second, to pre-screen those high-risk
containers at the foreign port before they are shipped to the
United States; third, we use technology to pre-screen those
high-risk containers; and, fourth, we desire to use smarter,
tamper-evident containers, which can be inspected more easily
to determine whether they have been tampered with.
The goal for the first phase of CSI was to implement the
program at as many of the top 20 container ports in terms of
volume of cargo shipped to the United States as possible.
Within 1 year of the announcement of CSI, 18 of the top 20
ports agreed to participate.\1\
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\1\ Chart entitled ``Participation in CSI Among Top 20 Foreign
Ports'' (submitted by Chairman Collins) appears in the Appendix on page
52.
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The second part of the strategy is the implementation of
the 24-hour rule. Because CSI requires us to identify and pre-
screen high-risk containers before they leave foreign ports,
the advanced transmission of complete and accurate cargo
manifest information on all arriving vessels is essential to
achieving success. U.S. Customs issued a final notice on
advanced manifest regulations on October 31 of last year,
requiring the presentation of accurate, complete manifest
information 24 hours in advance of loading the container on the
foreign port. This rule is a huge leap forward in our
container-targeting capabilities, largely eliminating the old
manifest data standards that included vague descriptions of
cargo, such as ``FAK,'' which meant freight of all kinds, and
at the same time providing the data before the container is
loaded.
In some instances in the past, the government did not have
a detailed description of a container's contents until 10 days
after arrival in the United States. This has dramatically
changed. Now we can identify high-risk containers prior to the
ship leaving the foreign port.
But if the high-risk containers are identified after they
have set sail for the United States, Customs and Border
Protection makes a determination on their level and source of
risk. And depending upon that assessment, protocols have been
established for working with a variety of agencies, such as the
Coast Guard, to take appropriate steps to intercept the cargo.
For example, when a determination is made that the cargo should
not reach U.S. shores, Customs and Border Protection works with
the Coast Guard to ensure that the cargo is screened and
examined, including the possibility of conducting examination
prior to entering a port.
Another link in our strategy is the Customs-Trade
Partnership Against Terrorism. It is called C-TPAT, and the C-
TPAT program developed and started in January of last year is
an initiative designed to further reduce the risk. It does so
by improving security along the entire supply chain and not
just at the foreign seaports. By partnering with the trade
community--U.S. importers, customs brokers, carriers, shippers
and others--we can better protect the entire supply chain
against potential exploitation by terrorists or terrorist
weapons.
So far, over 2,000 companies have signed an agreement with
Customs and Border Protection to conduct a comprehensive self-
assessment of their supply chain security and to improve that
security from foreign loading docks to U.S. borders and
seaports. Using C-TPAT, security guidelines developed jointly
with Customs and Border Protection and the trade community have
been implemented.
We have other additions to our protective measures. One of
those is a broader initiative called Operation Safe Commerce
that the Transportation Security Administration has the lead
in. It is a public-private partnership dedicated to finding
ways to protect commercial shipments from threats of terrorist
attack, illegal immigration, and other contraband, while
minimizing the economic impact upon the vital transportation
system.
This program develops and tests technology and systems to
improve container security, consistent with the principles and
security practices of ongoing programs. The OSC, Operation Safe
Commerce, has an executive steering committee that includes the
Department of Transportation, TSA, the Coast Guard, the State
Department, the Commerce Department, the Justice Department,
and the Homeland Security Council. And so it is a broad, multi-
agency effort to improve the safety of our commerce.
Let me conclude by thanking Chairman Collins and the
Members of the Committee for this opportunity to testify. I
will be looking forward to my continued discussion and work
with this Committee.
Chairman Collins. Thank you very much, Secretary
Hutchinson.
When we look at a container ship, we often now worry that
one of the containers may include the makings of a dirty bomb.
But the case that you cited suggests that, as we are tightening
security at our borders, one of those containers may actually
be a means for a terrorist to get into the United States. And I
would like to show the picture of the container that you
referred to that the Egyptian-born Canadian, Mr. Rizk, was
found in.
As you can see, he had with him airport security badges,
phone cards, maps of airports, computers, and a satellite
phone.
Now, those don't strike me as the typical possessions of a
stowaway, an illegal immigrant who may be coming to this
country illegally in search for a better life. And his
container was headed from Egypt to Montreal, I believe.
What has happened with this case, if you can disclose to us
and bring us up to date? Is there concern that Mr. Rizk may
have connections to Al Qaeda or another terrorist group?
These containers have been used for years by smuggling
rings to bring illegal immigrants into the United States. Is
there evidence or do you have concern that terrorist groups or
others who may wish to do us harm may tap into the knowledge of
these smuggling rings to bring terrorists into our country via
containers?
Mr. Hutchinson. Thank you, Senator, and the case that you
cited is a perfect illustration as to the sophistication of
some of the smuggling operations through container ships and
container cargo. Clearly, in this instance, with the cell
phones, with the false documents that were available, there was
a lot of preparation that went into this.
This was a case that was investigated by those overseas,
and although there was extraordinary concern because of the
potential connection to terrorist organizations, it is my
information that ultimately--the Italian police did warrants,
did searches, continued the investigation and determined that
there was no known connection between Rizk and Al Qaeda or any
other terrorist organizations, and they have closed their
inquiry.
But despite that ultimate finding, it shows that there is
sophistication in this network and that, as you pointed out,
when there are organizations that will conduct this type of
smuggling, terrorists are looking for opportunities to contract
out, to find available means to move terrorists as individuals
or their weapons through commerce into the United States or to
other destinations. And so it raises our level of concern
because this is something that can be exploited by those that
wish to do our country harm.
Chairman Collins. By the time a container carrying a weapon
of mass destruction arrived at a U.S. port, an inspection at
that point is too late. And that is why I commend you and the
Department for initiating the CSI program of placing Customs
personnel in overseas ports to pre-screen containers before
they come here. We really need to get to the point of origin,
because if we wait until they are already in the American port,
the damage may already be done.
According to the last information provided to the
Committee, we currently have CSI teams from Customs stationed
in 6 of the 20 largest foreign ports. I believe they are in the
Netherlands, France, Belgium, Singapore, and two in Germany,
and I have a map showing the locations. And those ports
represent about 21 percent by volume of containers shipped to
the United States.
One of the concerns I have is that many of the mega-ports
that are part of the system now are in lower-risk areas of the
world. Do you anticipate an expansion of the CSI program to
ports where there is a higher risk of terrorist exports, for
example, in the Middle East and Africa?
Mr. Hutchinson. Yes, we do. This is CSI Phase 1 in which 18
of the 20 mega-ports have been signed up. But as you pointed
out, only six of the ports have really been fully deployed and
the program has been completely implemented. We want to move to
the other ports that have been signed up. That is being
aggressive pursued. And then, second, we want to expand it
beyond the 20 mega-ports to other ports in areas of concern so
that we can get the remaining percent of the cargo.
I would emphasize, though, that notwithstanding the CSI
only being in the mega-ports right now, the 24-hour rule is
applicable everywhere. And so we will have advance information
on all cargo coming to the United States so that it can be
analyzed. But we do hope to expand the program as we are
capable of doing so to these other areas of concern.
Chairman Collins. Thank you. My time has expired. Senator
Lautenberg.
OPENING STATEMENT OF SENATOR LAUTENBERG
Senator Lautenberg. Thank you very much, Madam Chairman.
Madam Chairman, you had suggested initially that you weren't
going to take opening statements. Has anything changed?
Chairman Collins. If you would like to take a few minutes
to make an opening statement.
Senator Lautenberg. I would try to participate in the
discipline that the stern Chairman has issued here and just to
say that I ask unanimous consent that my full statement be
placed in the record.
Chairman Collins. Without objection.
Senator Lautenberg. First of all, Mr. Hutchinson, you don't
look any the worse for wear since you have taken this job. You
must get awful tired crawling around these containers looking
for things. But it is amazing that people can set up
housekeeping in a container. Our Port of Newark and the New
York harbor, New York-New Jersey harbor is a recipient, I
think, one of the largest recipients of containers in the
country. And how we stay on top of that has often kind of
puzzled me because before I came to the Senate, I was a
Commissioner of the Port Authority in New York-New Jersey. And
we have always been concerned with security.
Let me ask you this: When our inspectors or when the
inspection process is underway, what are we looking for? Are we
primarily targeting weapons, threats to our security? I know
these people have a lot of responsibilities that have been
considerably enlarged since the days that terrorism assaulted
our shores.
Do you look for dutiable items? Do you look for smuggling?
Do you look for drugs? What is the mission of the inspection or
the inspectors?
Mr. Hutchinson. Thank you, Senator Lautenberg. And, first,
I want to remark that I had a wonderful time visiting the Port
of Newark. I was there and saw the enormous volume of
containers and the work that had to be done. And I was very
impressed with the targeting approach that had been implemented
at that port. I think it is on the leading edge of what we need
to do nationwide.
But what we are looking for in our targeting approach are
anomalies. We have a scientifically based, rules-based system
in which certain criteria are asked, looking at the cargo
manifest, where it is coming from, the nature of the cargo, the
shipper, the transporters that are involved, the manufacturer,
and their record of integrity for shipments. All of these
things plus a whole host of other matters are used to target
particular shipments.
This whole program is designed to go after weapons of mass
destruction, terrorist activities. Obviously, when you go after
that, you find a whole host of things in suspicious cargo,
including narcotics. But the CSI program is designed to go
after the security matters that impact our Nation, and that is
the focus of that. And the basis of the targeting would be that
rules-based system that will identify those anomalies and give
suspicion that creates a high risk of the cargo, and then it
would be searched electronically, x-rayed, as well as manually
if necessary.
Senator Lautenberg. We must have a continuing research
program for improving containers security. I know that, for
instance, we are doing a lot of work on explosive-resistant
cargo containers for aircraft. And when one looks at this
housekeeping that Mr. Rizk set up there, you wonder how he
could endure under any circumstances. But I think that
technology can be a lot of help there, simple things such as
motion detection and what have you, or air purifying or de-
purifying, whatever the term is. But you have an enormous task.
The screening detection devices, are they being used at
ports that ship to us, non-U.S. ports, obviously? Is that kind
of equipment being used in those places?
Mr. Hutchinson. Yes, indeed. In fact, the good thing about
the ports that sign up for the Container Security Initiative is
that they are required to do the inspections as necessary for
the at-risk cargo at the foreign port. And so as our Customs
and Border Protection inspectors are overseas at the Port of
Rotterdam, working with the Dutch inspectors, they will
identify suspicious cargo. Then it will go through x-ray, gamma
ray machines, depending on what the level of concern is, and
manually inspected if necessary. And the cost of that is borne
by the foreign port, the inspection and of the equipment.
If information comes to us after it leaves the foreign
port, then that triggers further examination, exploration of
the suspicious cargo, and confronting it off our shores. And
so, again, we have the layered approach that puts the
protection further out and gives us more time to work with the
at-risk cargo to determine its nature.
Senator Lautenberg. I assume that there are ports where the
risks are much higher for smugglers, terrorists, etc. Are we
able to cover those ports as efficiently as we would like? In
many of those countries, their laws are not scrupulously
observed. What do we do to protect ourselves against those
higher-risk shipping points?
Mr. Hutchinson. Well, there are ports out there that do not
have the sophistication of detection equipment. They do not
have the investment that is made. They do not have the
background checks for the port workers. These are ports that
are a much higher risk.
What we have to do is to make sure that we give them
incentives if they want to bring goods into the United States
and export goods here; then they are going to have to upgrade
their systems. And if we do not get the cargo information in
advance, they will increase the level of risk, the level of
inspections, and the delays as they bring goods on. And so as
time goes on, we hope that there will be greater international
standards at these ports, and the international community will
put pressure on these ports that are not up to the
international standards that we expect.
Senator Lautenberg. Thank you very much, Madam Chairman. I
appreciate it.
[The prepared statement of Senator Lautenberg follows:]
PREPARED STATEMENT OF SENATOR FRANK R. LAUTENBERG
More than six million cargo containers enter U.S. ports each year.
A large container ship can carry more than 3,000 of these cargo
containers, hundreds of which may be off-loaded at individual ports.
Once off-loaded from ships, the containers are transferred to rail
cars, tractor-trailers, or barges for inland transportation.
Container ships are a growing segment of maritime commerce and the
focus of much attention because they are particularly susceptible to
terrorist infiltration. For years, drug traffickers and unscrupulous
companies seeking to evade tariffs have exploited lax cargo container
security at our ports to smuggle their goods into the United States.
Terrorist organizations could easily partner with these smugglers to
move explosives, dangerous chemicals, biological agents, nuclear or
radiological devices, or the benign precursors for any of these
materials into the country undetected.
The newly-created Bureau of Customs and Border Protection (BCBP)
analyzes cargo manifest information for each container to determine
which ones need closer inspection. At present, only two percent of all
cargo containers are subject to ``target inspection.''
Shortly after the horrific events of September 11, 2001, Stephen
Flynn painted a vivid and chilling picture in testimony before this
Committee about how a weapon of mass destruction (WMD) could be
smuggled into Port Newark and the extent of the devastation and havoc
it could wreak if detonated there.
The New York/New Jersey Port is one of the top five domestic ports
in terms of commercial and military significance. It is the 10th
largest port in the world in terms of cargo tonnage and 14th with
regard to the numbers of containers shipped. The Port's role is
essential to our nation's commerce--in 2001, it handled $82 billion
worth of cargo, or 58 percent of the market share of all the ports
along the U.S. Atlantic Coast. It is the largest in the U.S. in both
petroleum and automobile shipments and it supports 229,000 jobs.
The Port Authority is a marvel of intermodal transportation
infrastructure, facilitating the efficient movement of passengers and
freight in a manner not duplicated anywhere in the world. But the high
concentration of goods and people in such a limited area also poses
unique security risks. As Mr. Flynn pointed out, within one mile of the
container terminal at Port Newark are the Northeast Rail Corridor, the
New Jersey Turnpike, and Newark International Airport. If all of these
major components of our nation's transportation system were
simultaneously crippled by a WMD smuggled into the Port and detonated,
the effects on our country's travel and commerce would be disastrous.
The January 2001 report of the U.S. Commission on National Security
in the 21st (the so-called ``Hart-Rudman Commission'') described the
worst-case scenario of a terrorist attack using a cargo container:
If an explosive device were loaded in a container and set off
in a port, it would almost automatically raise concern about
the integrity of the 21,000 containers that arrive in U.S.
ports each day and the many thousands more that arrive by truck
and rail across U.S. land borders. A three-to-four week closure
of U.S. ports would bring the global container industry to its
knees. Megaports such as Rotterdam and Singapore would have to
close their gates to prevent boxes from piling up on their
limited pier space. Trucks, trains, and barges would be
stranded outside the terminals with no way to unload their
boxes. Boxes bound for the Untied States would have to be
unloaded from their outbound ships. Service contracts would
need to be renegotiated. As this system became gridlocked, so
would much of global commerce.
It is evident, therefore, that the security of cargo containers is
crucial not only to the employees and nearby residents of the Port of
New York/New Jersey, or any other port facility in the U.S., for that
matter. Since it is not possible to inspect every one of the six
million containers which are handled at our ports every year, we need
to be sure that our security efforts are effectively coordinated and
thorough.
As a former Port Authority Commissioner, I understand the scope of
the challenge which exists when it comes to inspecting cargo
containers. Considering what is at stake and the resources available, I
believe it is imperative that Federal agencies take leadership roles in
coordinating security activities--including container security--at our
ports.
Thank you, Madam Chairman.
Chairman Collins. Thank you. Senator Coleman.
Senator Coleman. Thank you, Chairman Collins.
I must admit, Mr. Secretary, I am rather daunted, a little
overwhelmed by the enormity of the responsibility you have and
the difficulty in fully addressing it. And I applaud--you know,
I understand we have the use of technology. These are not kind
of random searches. You are kind of looking ahead. But I must
say that my State, like the Chairman's State, is a border
State. There are vast expanses of my State where, by car or by
boat, you could get across and nobody would know, and that is a
reality. And so I am troubled, and I know that the Chairman
faces that same reality.
Saying that, two observations, two questions, and a little
eclectic. One is on the labor side, and that is, it appears to
me that your tasks and the functions of what folks were doing
pre-September 11 are probably very different today, that your
focus: Before it was national, now we are looking at
international, placing people in other areas. Do you have the
flexibility in terms of labor rules and everything else to move
people quickly, to have them take advantage of new
technologies, to shift work assignments? Are there any issues
there of which we should be aware?
Mr. Hutchinson. Congress gave a substantial amount of
flexibility in the Homeland Security Act, and so in moving
people for national security reasons, we have that capability.
In the implementation of technology, we have that flexibility.
What we do, which is the correct obligation for us, when it
comes to new technology or new assignments, we have a
responsibility to engage in substantial training, and those
issues, if there is union representation, we discuss those with
them and we make sure that those agreements are fulfilled.
But we are pleased with the flexibility that we have. We
are reviewing all of our personnel rules between now and the
end of November when a report is due to Congress, and so we
will be able to answer that more specifically as to what
reforms we are making, adjustments we are making, and any
additional needs that might be there.
Senator Coleman. Because I think this is an important
issue, and we need to know very quickly. These are challenging
times, and having flexibility in the interest of national
security is, I think, of the utmost importance.
The other area of concern is U.S. companies located abroad.
I presume we--and I am looking to the private side, perhaps
advice you could give them. They probably get a lot of packages
of things from foreign contractors shipping to them in
containers. Are we working with the private sector in terms of
their own kind of standard of care or standard of sensitivity?
Are we training our folks? It may get past your folks, but are
there things that folks on the private side can do if they were
better educated?
Mr. Hutchinson. Absolutely. And they are a critical part of
the partnership. We can target and we can inspect, but unless
there is integrity in the supply chain and that the
manufacturers, the shippers, take responsibility for their own
containers and the integrity of the shipments with proper
seals, then all that we do really would have a minimal impact.
It has to be complemented by the integrity of the supply chain.
So what we are doing in that arena? Two thousand businesses
have signed up in partnership with Customs and Border
Protection in the arena of improving the supply chain,
providing the protections, implementing best practices, and
doing self-assessments of their own security.
In addition, through the Transportation Security
Administration, they have Operation Safe Commerce, which is a
partnership with private business. Congress gave $105 million
in grants for port security, with $28 million in grants for
private industry to do assessments, to implement good practices
in reference to those supply chains. So it is a recognition
that we just can't get it done without their partnership, and
they have really stepped up to the plate as well.
Senator Coleman. I would hope they would be working with
folks like the chambers of commerce and the National
Association of Manufacturers and the trade groups and others to
really involve them in this, because your point was--in my very
brief preliminary comments, we are only as strong as the
weakest link of the chain. And they are clearly part of the
chain, and I would hope that we fully engage them.
Thank you, Chairman.
Chairman Collins. Thank you very much. Senator Pryor.
OPENING STATEMENT OF SENATOR PRYOR
Senator Pryor. Thank you, Madam Chairman. Always good to
see you, Asa, and I am glad you are before this Committee
today.
Let me start by just saying that I know that this is a new
program. There is always some trial and error in any new
program. How is it working?
Mr. Hutchinson. It is working well, and I say that with
reservation because, as Senator Coleman pointed out, it takes a
vast amount of cooperation in the private sector to make this
work. But I am fully convinced that it is the right strategy,
and I think that is the first test. The right strategy is to
build with our private partnership, the private sector, and to
expand these inspections overseas to get more information in
advance.
There is much more that needs to be done. As Senator
Collins said, we have got to bring on some of the other ports
that are of a greater concern. But it is the right strategy, I
am convinced of that. There are instances in which we have
detected suspicious cargo; we have stopped it coming into the
United States. And I think it is a strategy that will have
proven results in the future as well.
Senator Pryor. It sounds like you have identified some
areas that we need to work on, some areas where we need to
improve. Could you tell the Committee about a few of those
please?
Mr. Hutchinson. Thank you, Senator Pryor. The areas that we
have to work on are the supply chain and the integrity of the
containers themselves. We have a working relationship with
Johns Hopkins Applied Research Center that is doing examination
of containers and how private industry can better protect in a
cost-effective manner the integrity of the shipments. We have
to work on the port workers in the sense of improving our
background checks there. TSA is working on a transportation
worker identification card program where there would be one
background check done. They don't have to have a whole host of
cards and security clearances, but one that would work in
whatever transportation sector they would be in. This is in the
initial phases, and we have to move that forward.
The other challenge, if I might just elaborate on one more?
Senator Pryor. Sure, go ahead.
Mr. Hutchinson. This 24-hour rule for cargo applies to the
exports coming into our country, the air and sea shipments. But
we have not moved it to all modes of transportation, and so in
Arkansas, for example, the trucking industry is a huge issue.
They are very concerned about this, as well as the rail
industry, so we have to have advanced manifest notice as well.
But 24 hours doesn't work when it is on-time delivery, and so
we are having to work with them. We are hearing comments of
industry as to what kind of advance manifest information is
workable in those other modes of transportation.
Senator Pryor. Good. Well, as you identify those areas--and
it sounds like you have a few already on your plate. But let us
know as a Committee how we can help make our ports more secure.
I know sometimes it boils down to money. Sometimes you may need
more authority in one way or another. Or sometimes you just may
need more time to allow things to work themselves out.
I think I can speak for our Chairman here that we all want
to make our ports as secure as possible, and we want to give
you the tools you need to do that.
Mr. Hutchinson. Thank you, Senator Pryor. I look forward to
working with you.
Chairman Collins. Thank you, Senator Pryor.
Just a couple more questions, Secretary Hutchinson. When
Customs inspects containers, it often uses detection equipment
rather than physically inspecting the container.
First of all, I assume that it is not really practical to
physically inspect 6 million containers coming into our
country. Is that an accurate assumption?
Mr. Hutchinson. That is an accurate assumption.
Chairman Collins. A November 2002 General Accounting Office
report found that the radiation detection pagers used by
Customs had limited range and that they were unable to detect
weapons-grade radioactive material.
Could you tell us what improvements you are making in
getting the detection equipment up to par and able to detect
threats such as that? And could you respond specifically to the
GAO report?
Mr. Hutchinson. What is important to remember is that the
personal radiation detectors are not a cure-all to detect all
harms coming into our country. It is just simply one tool that
is used, and it has to be complemented by many other tools.
We are working with the laboratories as additional
information and improvements become available. We are listening
to them in terms of our technology and having better training
of our inspectors that use this equipment.
Also, Senator, we are deploying--we are not just relying
upon the personal radiation detectors, but we are deploying
portable radiation detectors in the larger ports of entry and
at our seaports. Thirty have been deployed now. I think there
is another $60 million in that type of technology that is in
future budgets. So we are moving the larger pieces, the more
sophisticated radiation detectors out as soon as we can.
Chairman Collins. ABC News did a test of the system in
which they successfully shipped 15 pounds of depleted uranium
inside a lead-shielded tube the size of a can of soda, and it
was packed in a commercial shipping container among Turkish
horse carts and vases.
It is my understanding that shipment was targeted for
inspection by Customs, but after an x-ray examination was
allowed to continue, and that, again, raises concern about the
sensitivity of the detection equipment.
Could you respond to that case as well?
Mr. Hutchinson. Well, first, I think it is a sign of
success that it was targeted for inspection. It means that
there is at-risk cargo that we correctly identified as cargo
that should be inspected.
Second, if it had been dangerous radioactive material, it
would have been detected by the equipment that did the
screening. But, in fact, obviously ABC News is not going to put
radioactive material into a shipment, and so they put harmless
material in it that had been deactivated. And so it was not
sufficient to be picked up by the equipment. I think that point
is conceded.
If that material had been harmful, it would have been
detected by our radiation equipment, and then it would have
been subject to further examination.
Chairman Collins. I want to follow up on a point that
Senator Lautenberg made about using technology to help us track
containers, because even if we do appropriate screening at the
port of departure, we need a way to monitor the containers en
route to make sure they are not tampered with.
Could you give us some assessment of whether or not--where
are we on the technology as far as using tamper-proof, self-
tracking containers so that we could seal them at the port of
departure and monitor them en route to American ports to ensure
that they have not been tampered with or diverted?
Mr. Hutchinson. Well, really, the technology is there. You
can make a container tamper-proof, or at least where it is
clear if it has been tampered with, there is evidence of that.
And there is technology for the GPS transponders. So that you
can track each container as it goes through the shipment
process. They use this to a large extent in the trucking
industry.
I think the issues would be whether the technology is
affordable and cost-effective by industry and whether you can
put such a huge mandate on them that would be very difficult
for them to meet. And so that is what we are working in
partnership with industry to explore as to what is the right
tamper-proof or secure container seal and then, second, whether
there should be any additional type of tracking system for
those containers.
Chairman Collins. Thank you, Mr. Secretary. Senator
Coleman.
Senator Coleman. Chairman Collins, just two questions, and
actually following up on the last comment about the additional
technology and other things.
The airline industry has come to us and talked about the
increased costs of security and has raised the question as to
who shoulders that responsibility. What are we facing in terms
of dealing with the private sector on us saying there are
improved forms of technology and equipment, but obviously there
are cost impacts? Are they coming to us, coming to the
government and saying you have got to pay for that or share
that burden?
Mr. Hutchinson. Yes. They are coming to us, and they are
coming to you. But that issue is there, and it is a shared
cost. The responsibility for homeland security is a national
one that is shared by every level of government and the private
sector. So we have to negotiate and work through those
balances. It is not our objective to put such stringent
mandates on the airline industry that they can't operate. That
doesn't accomplish what we want, and I know that is your
objective.
But one of the illustrations would be in the airports. We
have the baggage screening devices and the equipment present,
but they are in a very inefficient and cumbersome place that
was really not designed to have those huge equipment processes
there. And they need to move those, and there are going to be
millions and millions of dollars in expense to accomplish that.
The airports are concerned about them having to take that
burden on. The airlines, of course whenever you are looking at
the concern about MANPAOS, land-to-air missiles that could
attack our commercial aircraft, and there are sensors that
could be put on aircraft, but it is so hugely expensive, nobody
could afford to buy a ticket.
And so we have to balance this and what is needed for the
appropriate level of security.
Senator Coleman. In a similar light, again, talking about
the money, we are certainly going to our trading partners and
talking about things that they have to do. They are an
important part of this process. In those discussions, are folks
coming back to us, again, in terms of additional support? Talk
to me a little bit about that.
Mr. Hutchinson. Our international partners?
Senator Coleman. International partners.
Mr. Hutchinson. Tremendous response. If you look at it, the
European ports signed up very quickly on it. They did it partly
for the United States and our ability, but also they saw it as
a means to improve the security of their own ports and also to
stay competitive, to make sure that the cargo coming from that
particular port didn't get held up. So it is to everybody's
advantage to cooperate in this program. The international
partners have been very supportive.
The only concerns that have been expressed, the European
Union expressed some concern that we were negotiating with the
individual ports rather than the European Union as a whole. We
are sorting through that. And then there have been some privacy
concerns expressed, but these issues are being addressed in a
very cooperative fashion.
Senator Coleman. One last question, Chairman Collins.
We are talking a lot about focusing on stuff coming from
outside in. I presume that we have to be looking at what we are
shipping out to our partners, are they coming back to us? Are
they talking about our standards? And what are we doing in
terms of addressing their concerns about the stuff that we are
shipping? Is this a two-way street?
Mr. Hutchinson. It is. Probably our concern maybe is a
little bit greater than their concern. But there have been a
number of instances in which they ask for reciprocal treatment.
Japan is a good example. When their ports signed up, they
wanted to have not just our Customs inspectors located in their
ports, but they wanted to have inspectors in our ports looking
at our outbound shipments. We agreed to that readily, and so we
do treat this as a reciprocal relationship. And they have an
interest in that.
Canada is a perfect example. We have our inspectors located
in Montreal and Vancouver. They have their inspectors located
in Newark and in Miami. And so it is a very productive
relationship, and I think that will increase.
Senator Coleman. Great. Thank you, Mr. Secretary. Thank
you, Chairman Collins.
Chairman Collins. Thank you. Senator Akaka.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Madam Chairman. I want
to add my welcome to Secretary Hutchinson.
Mr. Hutchinson. Thank you.
Senator Akaka. Good to see you again, and good to see you
on the Hill.
I also want to say personally thanks for the work you did
before you entered this office.
Mr. Hutchinson. That is very kind of you.
Senator Akaka. Madam Chairman, I would like to make a
statement if there is time. It will be your call. I will have
some questions.
Chairman Collins. Certainly.
Senator Akaka. I regret that I was not present for your
opening statement. However, I would like to take this
opportunity to say, Madam Chairman, that I commend you for
holding this hearing.
The citizens of Hawaii and our State's economy are heavily
dependent on imported goods. This vulnerability was
demonstrated during the days following September 11 when the
delivery of essential medicine and mail was halted because all
airlines and their cargo were grounded. That was a serious
problem, 98 percent of the goods imported into Hawaii are
transported by sea.
As you can see, shipping container security is critical to
Hawaii. Honolulu Harbor receives more than 1 million tons of
food and farm products and over 2 million tons of manufactured
goods per year. In 2002, Honolulu received 1,300 overseas ships
and about 300,000 containers. In 2002, over 8 million tons of
cargo arrived at Honolulu Harbor alone. The State's heavy
reliance on shipping products makes it uniquely vulnerable to
disruptions in the normal flow of commerce. This reliance
underscores Hawaii's need for better surveillance and detection
equipment.
Earlier this week, the Coast Guard raised the threat level
at Honolulu Harbor in response to the war in Iraq. A number of
proposals will be discussed this morning to improve shipping
container security. However, I feel that more needs to be done.
According to the American Association of Port Authorities,
U.S. ports received only 10 percent of the funding needed to
improve port security and enhance shipping container security.
Also, more Federal dollars are needed for research and
development of bomb detection equipment to assist the Coast
Guard and local law enforcement to detect dangerous material
and to prevent a potential crisis before it occurs.
Madam Chairman, I want to thank you again for holding this
hearing. I will be with you and doing all we can as we consider
these proposals toward improving shipping container security
and personally address Hawaii's unique challenges as well.
Thank you, Madam Chairman.
Chairman Collins. Thank you very much, Senator. Senator
Fitzgerald.
OPENING STATEMENT OF SENATOR FITZGERALD
Senator Fitzgerald. Thank you very much, Madam Chairman,
and thank you Secretary Hutchinson for being here. I would like
to thank the Chairman for holding this hearing on the important
issue of cargo container security. I also would like to welcome
Secretary Hutchinson and the other witnesses who will be here
today.
The scope of this issue cannot be understated.
Approximately 90 percent of the world's cargo moves by
container. Each year, over 48 million full cargo containers
move between seaports throughout the world and more than 16
million containers arrive in the United States by ship, truck,
or rail.
Last year, I raised the issue of air cargo security on a
number of occasions during Senate consideration of this issue.
While the Federal Government has taken some steps, I believe
that much more can be done to secure cargo in all modes of
transportation.
The U.S. Customs Service reports that trade volume moving
through the 102 seaports of the United States has nearly
doubled since 1995. In 2001, U.S. Customs processed more than
214,000 vessels and 5.7 million sea containers.
In addition to considering the sheer number of containers,
it is also important to consider the flow of trade as it
impacts our economy. More than $1.2 trillion in imported goods
passed through our country's ports of entry in 2001. Almost
half of the incoming U.S. trade by value arrives by ship.
The issue of cargo container security is of special
importance to my home State of Illinois. Chicago is one of the
Nation's major transportation hubs where Federal highways,
major railroads, and trans-ocean shipments intersect. The Port
of Chicago is a vital link for shipments from the Atlantic
Ocean which traverse through the St. Lawrence Seaway and
continue on by truck throughout the region or by barge down the
Illinois and Mississippi Rivers to the Gulf of Mexico.
If a terrorist were to smuggle a weapon of mass destruction
into any one of our Nation's ports in a cargo container, the
effects would be devastating to area residents, our
infrastructure, and our economy. In fact, on March 10, the
Chicago Tribune reported on a war game conducted by government
and industry officials which involved the explosion of a so-
called ``dirty bomb'' in downtown Chicago. In the war game
scenario, the bomb was hidden in a shipping container which
entered through an East Coast port.
After the terrorist attacks of September 11, it quickly
became apparent that the Federal Government needed to do more
to ensure the safety of cargo containers entering our country.
I commend the administration for launching the Container
Security Initiative, known as CSI, in January 2002. Under the
CSI program, Customs officials are stationed in foreign ports
and work with local inspectors to pre-screen containers before
they arrive at U.S. ports.
In addition, the National Strategy for Homeland Security,
released by the White House in July 2002, also highlighted
container security as a major initiative for improving border
and transportation security.
I understand that CSI agreements have been concluded with a
number of foreign governments which have so-called mega-ports
that process the vast majority of cargo containers. I look
forward to hearing from the witnesses about the current status
and effectiveness of the CSI program and how these CSI
agreements will help increase the security of cargo shipments
bound for the Port of Chicago and other ports throughout the
United States.
I also look forward to hearing how the three primary
Federal agencies that are responsible for protecting our
seaports and shorelines from weapons of mass destruction--the
Coast Guard, Customs Service (now part of the Bureau of Customs
and Border Protection), and the Transportation Security
Administration--are coordinating within the new Department of
Homeland Security.
Thank you, Chairman Collins.
Chairman Collins. Thank you very much.
Senator Akaka, it is my understanding you do have a few
questions for Secretary Hutchinson.
Senator Akaka. Yes, thank you very much, Madam Chairman.
Mr. Secretary, as I noted in my statement, the citizens of
Hawaii are heavily dependent on shipped goods. The State of
Hawaii requested $3.24 million in TSA grant funding for port
security and has currently received $775,000. This amount
represents less than one-quarter of the funding Hawaii
indicates it needs to meet security mandates identified in a
Coast Guard vulnerability assessment.
How can we ensure that a State such as Hawaii receives the
funding needed to meet its unique port security needs?
Mr. Hutchinson. Thank you, Senator, and Hawaii probably
more than anyone is dependent upon the reliability of the ports
and the security of the ports. And in reference to the
potential grant funds, there will be another round of port
security grant funds that are available through the
Transportation Security Administration. There was $105 million
available for vulnerability assessments and infrastructure
improvements. And so I am sure that your leadership in Hawaii
will be applying and probably have already applied for those
funds. And I am sure that they will receive a high priority, as
they should.
Senator Akaka. As I mentioned, Hawaii is unique. Port
security is critical, and exclusively Hawaii almost exclusively
relies on shipping for life-essential goods. However, unlike
many U.S. mainland ports, Hawaii cannot rely on alternative
transportation such as rail or trucking.
What is your plan to respond to a terrorist attack where
there are limited means of alternate transportation in such a
place as Hawaii?
Mr. Hutchinson. We have to recognize the uniqueness of
Hawaii, and the plan should not be the same plan that works for
New York or Washington State. And that is the reason that your
State has developed their own homeland security plan in order
to make sure there is adequate cooperation among the agencies
and a proper response is coordinated.
It is based upon that plan that is individualized for
Hawaii that we are able to put forth the funding, whether it is
ports but even more significantly to the equipment and the
first responder money. And so we are working through our
agencies there, from the Coast Guard to Customs and Border
Protection, to Immigration and other agencies, working with
your State officials to make sure the plans are technically
right and provide the support that is needed. But, clearly, it
is a different circumstance in Hawaii. We recognize that, and
we applaud the efforts of your State officials to develop a
plan that is suitable for your State and the needs there.
Senator Akaka. I really appreciate your response. Thank you
very much.
Chairman Collins. Thank you very much.
Senator Fitzgerald, we have held Secretary Hutchinson here
for quite a while, but do you have some questions you would
like to ask?
Senator Fitzgerald. Real quickly. Thank you very much.
Mr. Hutchinson, the Customs Service launched the CSI
program last year. What impact, if any, has the reorganization
of the Customs Service within the Department of Homeland
Security had on the progress of implementing the CSI program?
Mr. Hutchinson. It has had a neutral effect in terms of any
adjustments. The reorganization that we have accomplished
focuses all the border agencies, from Border Patrol to all the
inspection services combined into Customs and Border
Protection. And so there is a clear chain of command and clear
mission for that particular bureau of Customs and Border
Protection. And so there is no negative impact. The message is
we want to make sure this has the highest priority and the
implementation is completed.
I actually think that there is a positive impact because
the mission is clearly defined. For example, the enforcement
side of the investigative agencies is separated out. And so
Commissioner Bonner can focus extraordinary energies on this in
the implementation of it, and I think it is going to march
forward with really increased energy.
Senator Fitzgerald. Well, thank you very much, and in light
of the time you have spent before this Committee already, I
would yield back to the Chairman. Thank you very much for being
here today.
Mr. Hutchinson. Thank you, Senator.
Chairman Collins. Thank you very much. I would now like to
welcome our second panel of witnesses.
Peter Hall is the U.S. Attorney for Vermont. Mr. Hall co-
chaired a law enforcement coordinating committee of State,
local, Federal, and Canadian law enforcement officials that
conducted the first real-world test of smart container tracking
and intrusion detection technologies.
Dr. Stephen Flynn is a senior fellow for national security
studies at the Council on Foreign Relations. He is a retired
U.S. Coast Guard commander and an expert in homeland security
and border control. He also has served as director of the
Independent Task Force on Homeland Security Imperatives, co-
chaired by former Senators Gary Hart and Warren Rudman, which
produced the report ``America: Still Unprepared--Still in
Danger.''
Captain Jeffrey Monroe is the director of Ports and
Transportation for the City of Portland, Maine. He supervises
the operations at Portland's marine facilities, the Portland
International Jet Port, and coordinates the city's surface
transportation programs. Previously he served as deputy port
director for the Massachusetts Port Authority, executive
director of Governor Weld's Commission on Commonwealth Port
Development, as a professor at the Massachusetts Maritime
Academy, and as a master in the U.S. Merchant Marine.
Dr. Michael O'Hanlon is a senior fellow in foreign policy
studies at the Brookings Institution. From 1989 to 1994, he
worked in the National Security Division of the Congressional
Budget Office. He recently co-authored a book entitled
``Protecting the American Homeland: A Preliminary Analysis.''
I want to welcome all of you today. I look forward to
hearing your statements. I would ask that you limit your
testimony to 10 minutes each so that we have ample time for
questions and answers. And your full written statements will be
entered into the record. Mr. Hall, we will begin with you and
welcome.
TESTIMONY OF HON. PETER W. HALL,\1\ U.S. ATTORNEY, DISTRICT OF
VERMONT
Mr. Hall. Thank you, Chairman Collins, distinguished
Members of the Committee. It is a privilege and an honor to be
asked to testify before this Committee concerning cargo
container security and an interagency, intermodal, and
international initiative for cargo container security called
Operation Safe Commerce-Northeast.
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\1\ The prepared statement of Mr. Hall appears in the Appendix on
page 59.
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As brief background--and I won't go through my entire
statement because I know it is on file with this Committee--
since the early 1980's and the advent of the Law Enforcement
Coordinating Committees, sponsored by DOJ and the U.S.
Attorney's Offices, there has been an expansive, cross-border
effort in the Northeastern United States and Eastern Canada,
and really this includes the States of Maine, New Hampshire,
and Vermont, and northern New York and western New York as
integral partners in this on our side of the border; Ontario
and Quebec and New Brunswick on the northern side of the
border.
We came together regularly to share working intelligence
information at all levels of law enforcement--local, State,
provincial, and Federal--and to discuss and address issues of
common concern.
It was against this backdrop and out of this culture of
cooperation, which really has been going on for two decades, at
least, that Operation Safe Commerce, the first one to take that
moniker, was born in August 2001, a month before the events of
September 11, 2001. The group was aware historically from our
work together that drug shipments came into the Port of
Montreal. For many of us, that is our port, and, Senator
Fitzgerald, I would just add as an aside that in many respects
it is your port as well for Illinois because much of the cargo
container traffic that comes into your area comes into North
America through the Port of Montreal and the Port of Halifax,
as you already know.
Operation Safe Commerce-Northeast first manifested itself
as a loose-knit working group that evolved from a cross-border
intelligence-sharing group comprised of law enforcement
representatives principally from northern New England, northern
New York, Quebec, and eastern Ontario. The original aim was to
guard the cargo container supply chains against the insertion
of materials not listed on the container manifest--that is,
smuggling--and the extraction of materials from the container
manifest as it was in transit.
The purpose of OSC-Northeast was to begin identifying where
injection and removal points for a cargo container occurred in
a simple cargo container supply chain and to begin testing some
possible technologies to detect intrusions and to track the
container for anomalies. Coming together to start the process
of addressing the potential devastating impact on world
commerce, which had been described to us at our first meeting
by then-Commander Flynn, who is now here, of course, on this
panel to testify before you, were representatives from the
Northeastern United States of the following agencies, and many
of them have been moved into the Department of Homeland
Security, but, principally, the U.S. Customs Service, the U.S.
Coast Guard, U.S. Immigration and Naturalization, U.S.
Attorney's Office, and U.S. Marshals Service.
Important to this and really key to our public-private
partnership and the philosophy underlying the operation that we
undertook were the State economic communities, and at this
point, particularly those of New Hampshire, and through their
State economic development office, members of the private
sector. And we would certainly like to note the participation
here of Osram-Sylvania, who really, out of a sense of
patriotism and nothing more, volunteered their supply chain to
be analyzed in what, of course, is a relatively simple milk
run, an easy supply chain, since it starts with them,
originates with them, and ends up with them.
The U.S. Attorneys for the Districts of New Hampshire--that
is, my colleague, Thomas Colantuono--and Vermont, together we
appointed a joint Law Enforcement Coordinating Committee
Subcommittee, and I think uniquely here we had it tri-chaired
by each of us, and by the then-Governor of New Hampshire. I
will note that the current Governor of New Hampshire has agreed
to follow up and sit as a tri-chair of our LECC working group
and our committee.
Operation Safe Commerce, as conceived a year ago, had a
single mission, and this was one evolved by the working group,
and I would just like to read it for you:
``Operation Safe Commerce represents a comprehensive
coalition of Federal agencies, State governments, and private
sector businesses committed to the concept of enhancing border
and international transportation security without impeding free
trade and international commerce. Operation Safe Commerce
gathers and provides information and assists in collaborative
efforts to develop new models for international freight
monitoring and transportation that maintains open borders and
facilitates commerce while improving security.''
As a working group, we reminded ourselves on a regular
basis that we had come together in substance ``on a spit and a
handshake.'' We were there because we wanted to work together,
and we knew the importance of this project. Agency egos were
``checked at the door,'' and that grew out of the culture that
we already had in place, thankfully, up in our neck of the
woods, Madam Chairman.
The group came together by telephone conference and face-
to-face meeting, first, to assist the Volpe Transportation
Center, which provided the work and analysis and really ran--
they were the working partner that ran the project for us--in
refining the parameters of the proposed demonstration project;
and, second, we came together to push the project along and
oversee it as it was undertaken; and, finally, we with Volpe
reviewed and analyzed their reports, and we assisted in the
preparation of the final report, which I understand has been
released by Volpe for restricted distribution and is available
to this Committee, Madam Chairman.
Throughout the process, our aim was to look at a prototype
and to support and guide a process that would begin gathering
data which could then be used to promulgate regulations and to
set new standards for secure international transportation of
cargo containers. Phase One was accomplished in two parts, both
of them involving cargo containers, as I said earlier, used to
ship automobile light bulbs from the Osram-Sylvania plant in
Nove Zamke, Slovakia, and they went via the Port of Hamburg,
Germany, to the Port of Montreal in Canada, across the U.S.-
Canadian border at Highgate Springs, Vermont, and ended up at
their final destination point at the Osram-Sylvania plant in
Hillsboro, New Hampshire.
The first phase of the report or the first phase of the
work was the Volpe team studying an actual supply chain,
seeking to understand and report the way in which the cargo
container that they studied was handled and the various
potential problems for intrusion that could occur along the
route. Second, Volpe put instrumentation and monitoring devices
on another container to determine whether it could be tracked
and monitored effectively with commercially available
technology. The technology used is described in much more
detail in their report, but, briefly, it involved global
positioning satellite technology, tracking and multi-node
downloads, with transmission of data from those nodes to a
central point at Volpe headquarters; so important to understand
is that it was not real-time data. We were not tracking the
cargo containers that moved from point to point. We were
getting information after the cargo container had moved,
letting us know where it had been.
There were also installed a series of sensors which
detected light changes inside the container and detected
possible intrusions through magnetic sensors similar to those
used in a home security system. There was also an electronic
seal--this was independent of the sensing operation--which was
on the exterior door of the container, and that could contain
information about whether it had been opened a number of times,
although it did not transmit that data.
The intrusion data monitored by the interior sensors and
the GPS tracking data were downloaded at nodes, as I said, and
transmitted back. These nodes were at the departure point, at
the port entryways in Hamburg, Germany, at the Port of
Montreal, and at the port of entry at Highgate Springs,
Vermont, and, finally, at the receiving point in Hillsboro, New
Hampshire.
By and large, the equipment worked well and provided
information at each of the nodes that was subsequently
transmitted to Volpe. So we knew at least with the technology
that was being tested on this one run that it did work. There
were some problems with gathering data transmitted from the
entryways at the Port of Hamburg. There were two choices for
entryways, and that is always going to be the case in many of
the ports because they are easily accessed.
The test runs informed our working group that there is a
basis for continuing to explore both container tracking and
container intrusion. Our group, however, always saw itself as a
vehicle for providing this data that we gathered, or that was
gathered under our direction, to regulatory bodies within the
United States and, through them, to entities throughout the
world, which could be used for setting standards to ensure
greater safety from intrusion in the handling and
transportation of cargo containers. Indeed, in proposed Phase
Two, Operation Safe Commerce-Northeast is partnering with
Lawrence Livermore National Laboratory to test additional
intrusion detection devices within the container and monitoring
and detection equipment to be used in moving cargo containers
at the ports.
In this proposal, the ports of Halifax and Montreal, for
reasons that I articulated earlier, are proposed sites. We
recognize in our region that we have one large area that is in
many ways interconnected economically and certainly through our
cooperative law enforcement arrangements. And the Ports of
Montreal and Halifax are integral to the transportation of
international cargo into our area economies, and as I pointed
out earlier, all the way into the heartland.
Let me just note our conclusions here. The project
Operation Safe Commerce initiatives are complementary to and
intended to build upon the Container Security Initiative and C-
TPAT programs that are now in place. Almost invariably,
however, extending the analysis and effectuation of security
for cargo containers from point of origin to point of
destination will go beyond dealing with the participants who
are enrolled in C-TPAT and CSI. Container handling standards
and technology solutions must ultimately affect manufacturers,
shippers, freight haulers, terminal operations, shipping lines,
warehouse operators, and the like, as well as government
regulatory agencies.
We have expanded our approach to include definitely the
U.S. Attorney's Offices from Maine as well as northern New
York, western New York, and Massachusetts. So we work as a
loose-knit group. We stay in touch with each other on this
important initiative in the container committee, and, Madam
Chairman, that concludes my prepared remarks, and I look
forward to answering questions when they are posed.
Chairman Collins. Thank you, Mr. Hall. Mr. Flynn.
TESTIMONY OF STEPHEN E. FLYNN, Ph.D.,\1\ SENIOR FELLOW FOR
NATIONAL SECURITY STUDIES, COUNCIL ON FOREIGN RELATIONS
Mr. Flynn. Thank you. Good morning, Madam Chairman. Thank
you so much for having me here today. I started my Coast Guard
career on a cutter out of Portland, Maine.
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\1\ The prepared statement of Mr. Flynn appears in the Appendix on
page 70.
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Chairman Collins. Good training.
Mr. Flynn. That is where I got my sea legs. And, Senator
Coleman, I am delighted to appear before you as well, and also
to share this witness panel with Peter Hall, who really is, I
think, just the model of the kind of leadership that is
ultimately going to get us where we want to go, taking this at
a local level and really mobilizing this coalition and pulling
people together who don't normally talk to each other. That is
the extraordinary story of Operation Safe Commerce, and its
success is largely due to the extraordinary efforts of Peter
Hall.
I would like to submit my written testimony for the record
and use the opportunity here orally to do three things: First,
to reinforce the stakes that are involved with this cargo
container security problem; second, give a framework of where
we should be; and finally, to offer a brief assessment of where
we are.
The bottom line is anybody in the world right now who has
$1,600 to $3,000 and 30 tons of material can order a box, have
it delivered to their home or to their workplace. They can load
it to the gills, close the doors, put a 50-cent lead seal on
it, and it is off to the races. There is no requirement that
there be any adult supervision at that loading point. There is
no requirement that the container even be sealed. It is done as
a normal commercial practice in order to ensure a handoff from
one conveyor to another. But it is not formally required. There
is no requirement that in any of the handling of the container
by a truck or a train or a ship or anywhere in the terminal
that anybody exercise any form of protocol of due diligence.
Some companies do for commercial reasons, but there is no
requirements that they do so.
We built the intermodal transportation system for
efficiently, reliability, and low-cost, and it has achieved
these magnificently. It has been a major fare behind U.S.
competitiveness. The ability to outsource the way companies do
today, to maintain the razor-thin inventories, to go from
design to production, to get products to the consumer in
incredibly compressed production cycles has been built around a
revolution in transportation that basically attributable in
small part to this box.
But the essence of the problem is, of course, that there
was no security built into that revolution. And the
opportunity, as you have laid out, Madam Chairman, of what we
have seen from the crime sectors, something I have been
following for the last decade, suggests that moving to a more
nefarious purpose, a terrorist attack with weapons of mass
destruction, is a high risk.
The consequence of that is not just simply that we have a
potential weapon of mass destruction going off in the United
States with the loss of life and the destruction that could
wreak. Another, probably even more daunting consequence is the
reality that we are still struggling to come to grips within
regards to terrorism, and that is, when we have these acts, as
we saw with the airline attacks on September 11, as we saw with
the anthrax mailings, as we saw also last fall with the
Washington area sniper attacks, the assumption by the general
public when these incidents take place is of generalized
vulnerability, unless the government can prove otherwise. It
creates an enormous challenge for re-establishing public
confidence when you have these incidents in these critical
sectors.
So the core issue that we are wrestling with in terms of
where we need to be is what would the President of the United
States say, after we had a catastrophic event, to reassure the
American public that the 20 million containers that washed
across American shores or crossed American borders, last year,
in a truck or a train or on a ship, in fact, don't pose a
similar risk. And it would have to be sufficiently credible
that the public would say: That is OK, I am willing to let that
trade keep running; I am not feeling that my neighborhood is at
risk.
If we had to shut down this system for just 3 weeks, the
entire global container system would grind to its knees. What
would happen is overseas ports would have to close the gates to
all incoming trucks and trains because, otherwise, it would
turn the port virtually into concrete. So all those chassis
would be stuck outside the gate. All the ships that are loaded
with U.S.-bound goods would have to be brought back to the
piers and have things offloaded and reloaded. All the contracts
built around time would have to be renegotiated. In 3 weeks,
the entire system basically comes undone and 90 percent of the
world's freight stops moving. And that is the assembly lines of
most of our major manufacturers, and that is the warehouses of
most of our modern retailers. Those are the stakes that are
involved here.
Right now, it is hard for me to imagine if we have an
incident involving the containers that we will not face the
challenge of turning off the system and that we will have a
huge challenge from a public confidence standpoint to restore
public faith in a truck sector, rail sector, and a maritime
sector that is so critical to our economy.
Where do we need to be? We need to be, it seems to me, in a
position where we can do two things: We have to have confidence
that when something is loaded into this intermodal
transportation system it is legitimate and authorized; and we
have to have confidence that when it is on the move it has not
been intercepted or compromised. Because if you can't do those
two things, there is no such thing as risk management. You
cannot say because you are periodically dabbling in checking 2-
5 percent of the containers, whether overseas or here, that 96
percent or more of the remaining boxes can just slide by when
you have no basis to say that there was controls at the outset
that you can have confidence in, or that when it was handed off
from a truck, to a train, to a ship, and stood around at the
various depots, that somebody couldn't have caused mischief,
especially within a high-terrorist threat environment.
So where we must be is where we can accomplish those things
by initiating some standards where if you want access to the
global intermodal transportation system, there are some certain
practices that you need to do, and those need to be audited
periodically. It doesn't necessarily have to be a public
auditing, but somebody needs to be able to check to make us
comfortable with that.
The second part is we need to be able to track things as
they move through the system, and we need to be able to have a
sense of the integrity. But just the tracking is key for doing
three things. If we have intelligence, which we hope we might
have, given this 20 million, needle-in-a-haystack problem, we
would have to be able to act on that without disrupting the
whole system. If we had a case where we had a CIA operative
attached to the Al Qaeda network and they witnessed the loading
of a weapon of mass destruction in a box, heading in a lorry
down to Karachi, and that is the only piece of intelligence we
had, and we can't find the box, it is an incoming, we would
have to shut down the whole system. That is unacceptable. You
have to have a means to act on that intelligence when you have
it.
But the facts are we are not often going to get that
intelligence. Most of it is going to be done from what is
called in the regulatory world pattern recognition. What we
know about capable terrorists and capable criminals is they try
to blend in, just like the terrorists did on September 11. They
try to blend in as normal market actors, but they almost never
get it right because they are not normal market actors.
And so if there is sufficient transparency through
documentation and a clarity of control, you can pick out things
that allows the targeting to be good targeting and, therefore,
check things that pose a risk and have confidence that low risk
is, in fact, low risk.
But a final critical point of this exercise is the need for
forensics. It goes back to public confidence. Let's look at
aviation safety. We put black boxes in planes for the purpose
of being able to diagnose the problem if they fall out of the
sky. If every time a plane fell out of the sky the President of
the United States and the aviation industry shrugged and said,
well, it doesn't happen too often, only barnstormers would be
flying in planes today.
The reality is doing forensics to figure out how something
happened in this industry would be an investigator's nightmare,
as I am sure Mr. Hall probably would attest. That means in the
interim, all the conspiracy theories, concerns, and so forth
would start to surface. So by building through the data trail,
by building through the tracking and so forth the means to do
the forensics, ``how did it happen,'' if you could identify it
was a truck exploiting front companies that sent it from
Karachi, you wouldn't have to close the border between Canada
and the United States and cut the flow of GM parts. You would
be able to localize what the disruption was.
But where are we right now? We are in a situation where we
have got three good building blocks in the programs we talked
about this morning, but they all have limits. The Container
Security Initiative is highly promising because it allows for
the targeting at the loading point. But there are 16 U.S.
Customs officers currently assigned overseas, as we pointed
out, in six ports. This has not revolutionized, given the
number of boxes, our ability to inspect. It has provided the
means for coordination in the port, but the challenge still is:
What is the targeting? How good is it? And is it built
primarily around manifest information, which historically is
the most unreliable data in the whole commercial trade system?
We need to drill down on this targeting issue.
I would say one thing that I would encourage the Committee
to consider is asking the GAO or directing Customs to do a
test. Randomly pull out 100 containers and see how many
problems there are, and then using your targeting criteria, how
many are you finding? If you are finding through the random
process things you never would have targeted are still
problems, then that would suggest that you need to continue to
refine, as I know they are trying to do, their targeting data.
But this whole credibility is built around the capacity to do
good targeting, and we have to make sure that is the case.
The C-TPAT has the very laudable goal of engaging the
private sector, but there is no auditing of the system.
Everybody who signed up, the 2,000-plus companies, knows that
U.S. Customs does not have the manpower to come check the
books. There is no requirement that they periodically adapt or
review their self-help, self-enforcement mechanisms. You have
got to give this thing some teeth if it is going to be
credible, and Customs needs to have the resources put in place,
the controls--it is trust but verify, as we did in the arms
negotiation field.
Finally, OSC, I think, has a great deal of promise because
it helps us to be able to really go back to the full supply
chain, brings in a lot of the stakeholders to be able to really
get us to drill down to the vulnerability, but also test what
is commercially viable in terms of processes and in terms of
technology. But the end game must be not lots of tests. The end
game must be to work towards having international standards
that introduce security into the global container trade that
underpins global commerce. This is a high-stakes issue to which
we are dedicating very few resources.
When we comparatively look at that, the Secretary of
Defense testified before the House Appropriations Committee in
February that he is spending $5 billion more each year on
protecting U.S. bases, 20 percent of which he doesn't need
because he doesn't have the force structure for them. So he
said he is wasting $1 billion protecting U.S. bases, and the
total budget we are talking about here for port security this
year is $104 million. It seems like we have got our priorities
a little out of whack.
Thank you, Madam Chair.
Chairman Collins. Thank you very much, Mr. Flynn. Captain
Monroe.
TESTIMONY OF CAPTAIN JEFFREY W. MONROE, M.M.,\1\ DIRECTOR,
DEPARTMENT OF PORTS AND TRANSPORTATION, CITY OF PORTLAND, MAINE
Captain Monroe. Good morning, Madam Chairman and
distinguished Members of the Committee. I want to thank you for
the opportunity to come before you today and, in particular, to
thank you, Senator Collins, for all of the attention that you
have paid to port security and to transportation security back
home.
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\1\ The prepared statement of Captain Monroe appears in the
Appendix on page 76.
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In the 18 months since September 11, we have come a long
way in securing our Nation's transportation system,
particularly in aviation. The Transportation Security Agency
has successfully managed the hardening of our aviation
facilities on an accelerated schedule. They have supervised the
installation of scores of screening devices and the training of
thousands of new employees, and we commend their efforts. But
now as the TSA turns its attention to seaports, it faces an
even more difficult task. Our ports remain critically
vulnerable. While we have made great strides in the area of
port security, particularly in managing our international
cruise ship passenger trade, we must still find solutions to
the most serious problems on the waterfront besides container
security which include: The lack of coordination between
agencies regulating seaport commerce; a lack of standardization
of procedures between and within agencies; a continuing lack of
intelligence information available to port managers; agreements
on manner, amounts, and sources of funding; and, finally, a
long-term solution for providing qualified and well-trained
personnel for port security programs.
I would like to preface my comments by saying that I am in
complete agreement with those who have advocated pushing back
the Nation's borders when it comes to container security. We
all understand that by the time something is found at the pier,
it is already too late. We support the Container Security
Initiative and the Customs Trade Partnership Against Terrorism.
But these programs must be expanded quickly and immediately.
Monitoring the supply chain and making brokers, freight
forwarders, and carriers assume a new level of responsibility
is critical. U.S. Customs must be the primary Federal agency
that monitors the activities of carriers, brokers, and
stevedoring companies that work in multiple ports.
We fully support programs to harden our continental borders
and propose the establishment of marine border crossings.
Canada is our closest neighbor and, working together, our two
nations must establish a set of procedures for cross-border
commerce that allows that cargo to move quickly between our
countries while establishing a joint continental boundary to
protect our respective nations. I am encouraged by the exchange
of Federal officers in some of our major ports where U.S.-bound
cargo arriving in Canadian ports can be pre-screened and
Canadian cargo arriving in U.S. ports is similarly handled.
We also support tightening the loophole on the difference
between an entry port and the point where the shipment reached
U.S. territory. Cargo containers can no longer be allowed to
continue their journey by highway or rail without declaration
of their contents or being screened. Some of this cargo moves
through the heart of our major population centers in bond
before it is ever cleared or looked at by Customs.
Cargo that is leaving the United States also needs to be
checked as part of an international effort. We support the new
24-hour rule, but we note that it will be extremely difficult
for agricultural, seafood, and other suppliers of perishable
products to strictly comply due to the fact that often these
products go from harvest to the dock through a just-in-time
delivery system. The handling of agricultural and similar
products must be managed in a different but equally secure
means.
While we applaud the efforts of Congress and Federal
agencies as they promulgate new rules for security and safe
operations, we find ourselves in the unique position of acting
as mediators between various rulemaking bodies. This situation
cannot continue. On my desk, I have a plethora of paper
designed to help me secure the port. These rules cover
everything from the height of fences to the height of lettering
on badges. They are issued by agencies without regard or
knowledge of what other agencies are regulating. I fully
understand that we are in a transitional phase as we design and
implement our new Department of Homeland Security, but one of
our first priorities must be the coordination between these
agencies.
In addition, the application of rules and standards must be
the same in every port. Washington must educate their regional
and field personnel how new regulations are to be applied and
how to account for port differences. Field personnel must
understand that there is a balance between the flow of commerce
and the security of our borders. If that balance cannot be
achieved, then those who seek to harm this Nation have found
their success. There must be regulatory consistency between our
seaports.
I believe that our Federal, State, and local government
agencies need to work together under the direction of the
Federal Government and that industry representatives must be
included as equal partners in determining what will work best
locally.
There also needs to be a significant effort within the new
Department of Homeland Security to assess measures and
response. Port commerce is not just about ships and piers. It
includes trucks, rail, aviation, and a host of other
transportation infrastructure that must be included in
determining what will work best. To that end, I propose that
the Transportation Security Administration establish a
Coordination of Seaport Threat Reduction Task Force which would
include officials from the various rulemaking bodies such as
Customs and the Coast Guard, but would also include a number of
port operations personnel representing a broad spectrum of U.S.
ports and members from the aviation, rail, and trucking
industries. The task force would advise the Secretary of
Homeland Security through the TSA regarding threats and actions
focusing specifically on analysis of alternatives and
solutions, review of plans, timelines for implementation, and
standardization of methodologies.
This mediation and coordination of Federal agencies must be
done in Washington and not at the local level. Protocols and
procedures must be uniform through the system. Local
decisionmaking cannot be incompatible from one geographic
location to another, and quality controls must be put in place
and closely monitored.
The task force should also assist with the periodic
examination of the mission effectiveness of the agencies that
impact ports under Homeland Security. They would also ensure
that all types of ports--including seaports, airports,
railports, and highway border crossings--are dealt with in the
exact same manner.
Many of our smaller municipally-owned ports cannot begin to
comply with the new rules, regulations, and requirements that
are being proposed or implemented by various agencies. Towns
and cities throughout this country are in dire financial
condition, and many ports are still paying the bills from
September 11 that will not be reimbursed. Port security is a
national issue. Local taxpayers are unable to shoulder this
additional burden and should not be expected to. The ports in
Maine alone are struggling to keep their business and can ill
afford to lose the many jobs associated with maritime
activities.
Ultimately, we are concerned that new concepts that may
come out of our desire to solidify our borders may put smaller
ports at a disadvantage. Some agencies have suggested that the
number of container ports should be consolidated and that small
feeder ports should be eliminated so that screening resources
can be concentrated in the mega-ports. The distribution of
feeder ports has been an asset to regional and local economies.
We should encourage the ``Short Sea'' Initiative of the
Maritime Administration and optimize use of water
transportation along our U.S. coastline, keeping containers out
of population centers and off our highways and rails until
absolutely necessary. Only 70 percent of container traffic is
concentrated in just a few ports in this country. That, in
itself, makes mega-ports potential targets. I believe that
smaller feeder ports have a better opportunity to identify a
shipment that is potentially threatening. The Marine
Transportation System should deliver cargo to geographic areas
by water, reducing highway congestion as well as enhancing
safety and security. Every port that currently handles
containers should be equipped with the proper screening
equipment and trained personnel to meet new security
requirements.
We must also develop a new generation of qualified
professionals who can maintain those efforts far into the
future. All of our Federal agencies are working hard to meet
their newly expanded security missions. Personnel resources are
getting scarce. I believe that we should support the inclusion
of new educational programs at our maritime academies to
prepare young men and women to take up the responsibilities in
our ports and Federal agencies and that we should support the
development of a U.S. Merchant Marine Reserve to utilize the
expertise of those who are willing to help not only in the
defense of our Nation, but also the protection of our seaports.
Merchant mariners are an untapped area of great expertise that
we have not availed ourselves of to date.
With all of the new and increased focus on container
traffic, I do not believe that our enemies will be able to
deliver a weapon of mass destruction through a single shipment
over water. I do believe, however, that through multiple
conduits, such as seaports, airports, and border crossings,
terrorists will be able to ship component parts that are
disguised as regular cargo and can be assembled later to create
a weapon that would be a significant threat to our Nation.
Strict control of the chain of movement and good intelligence
are the only defense we have against such an effort. We must
look at our transportation industry and make an effort to
ensure that those who are in critical positions are legitimate.
The aviation industry was able to develop a system of screening
airport personnel through a coordinated Federal database. That
system must be extended, without exception, to all maritime and
transportation workers. We cannot afford any more delays in
instituting a Federal credential for transportation workers. We
must also look at shippers, carriers, brokers, and freight
forwarders to ensure they have every safeguard in place and
that they have the support of our Federal agencies in
coordinating efforts in screening shipments, and all of these
people need to be trained.
In 2001, I supported Senator Snowe's legislation to create
a unifying Federal agency to oversee all sectors of
transportation, which eventually became the TSA. I envisioned
its primary mission as just such coordination and an agency
that can respond rapidly to our Nation's transportation needs
in times of crisis. It is time for the TSA to begin its active
participation in our seaports.
We have come a long way in 18 months, but the task is far
from over, and our efforts must be coordinated and the
responsibility shared for protecting our seaports as well as
the entire transportation system. Every step we take puts up
one more barrier to those who would seek to do us harm. Every
step we take must also be measured so that the reaction to that
threat is not so draconian that the mere possibility of a
potential attack achieves more in impact than any single
assault ever could. It is indeed the responsibility of every
one of us at every level of our transportation system to ensure
that we are working together as a team to protect our way of
life while we seek to protect our Nation.
Thank you.
Chairman Collins. Thank you very much, Captain. Mr.
O'Hanlon.
TESTIMONY OF MICHAEL O'HANLON,\1\ SENIOR FELLOW, THE BROOKINGS
INSTITUTION
Mr. O'Hanlon. Thank you, Senator Collins, Senator Coleman.
It is an honor to appear today. I would like to speak in just a
couple of broad terms about overall budget resources and try to
be fairly brief and just give a couple of thoughts.
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\1\ The prepared statement of Mr. O'Hanlon appears in the Appendix
on page 81.
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The broad message that I have is that the kind of work
being done by my colleagues here on this panel and their
previous associates is not yet adequately funded, in my
judgment, and I think to put it in different terms,
institutions like the Coast Guard and Customs now as part of
the new Customs and Border Protection Directorate just aren't
big enough. They aren't big enough for the new set of tasks. A
lot of the new technologies and new procedures are promising,
will allow us to do more with the same number of people, but we
actually need to make these institutions bigger. And I want to
concentrate on Customs, but let me first say a brief word about
the Coast Guard. It is just the same spirit of calculation, a
very rough, sort of back-of-the-envelope calculation about how
large might these agencies have to become.
The Coast Guard, as you know, is now doing 25 or 30 percent
of all of its mission work in the area of homeland security.
Prior to September 11, that number was very small. So it has
essentially added 25 percent additional missions to an existing
portfolio that I think all of us want to protect for the
previous missions of boater rescue, environmental protection,
and so forth.
How is the Coast Guard managing? It was already
underfunded, already operating aging equipment. How is it
managing to do all this new work without a much bigger
workforce? Well, at least it is getting more resources to buy
the equipment it needs. As you know, the Deep Water Project and
other kinds of modernization efforts are now being properly
funded. The Coast Guard budget has gone up quite a bit since
September 11. However, the size of the Coast Guard has not gone
up very much. It has gone up just a little over 10 percent. And
if you compare that 10 percent to the 25 percent additional
missions that are being asked of the Coast Guard, I think we
have a mismatch. So just in very rough terms, I am sure there
are ways to do some of these homeland security missions more
efficiently, and we will figure some of them out. And maybe we
don't need the Coast Guard to increase in size by 25 percent,
but it has got to go up in size by more than the roughly 4,000
people that have been added to its end strength or the 3- to 5-
percent increase in the number of assets that it operates, the
number of boats, the number of airplanes. These numbers have
gone up very slightly, and it is not enough.
And so in my testimony, I try very roughly to estimate what
size Coast Guard might be adequate for the new needs we are
asking it to carry out today, including port security, coastal
waterway security against terrorist attack, and I estimate
roughly another 5,000 to 7,000 more people and maybe another $1
billion a year in rough terms are needed, including more boats
and more airplanes.
But that is the Coast Guard piece. I want to spend a little
more time now on the Customs piece, with a similar sort of
broad, rough calculation. And I don't know nearly as much about
these agencies as my distinguished colleagues, so I am giving
you a very rough way to sort of ballpark this number. I am sure
my numbers are wrong. I am sure there are more efficient ways
to do these things. But what I am struck by is that if you just
do a crude estimate and you compare the needs to what we are
actually funding today, there is a huge gap. And the
incremental increase in some of these agencies' size does not
seem commensurate with the new demands we are placing upon them
in the area of cargo inspection that Customs used to do,
Customs and Border Protection Bureau now performs.
As you know, we used to have about a $2.5-billion-a-year
budget for that function, for all Customs functions, I should
say, and about 20,000 people were performing these tasks. And
that was good enough to inspect 2 or 3 percent of all the cargo
coming into the country. Steve Flynn and others have been
instrumental in pushing some new ways to do these things more
efficiently, figure out which ships we have to best inspect
using new technology. You were asking earlier about nuclear
detectors. All those things will help, but as Commander Flynn
also pointed out, it is just not going to be good enough
because intelligence is not going to be good enough that you
can get by inspecting only 2, 3, 4, or 5 percent of all the
cargo coming into the United States.
The people I have talked to--and this is very
impressionistic, but they tend to think you have to get up into
the ballpark of double-digit percentages. You have got to be
inspecting 10, 15, probably 20 percent of cargo coming into the
United States, and if you combine that with all the source-to-
shipping tracking that is being proposed, all the new
technologies, maybe you have a good enough inspection system to
start to have some robustness.
So let's say we should go up to about 15 percent as the
amount of cargo that we inspect. If that is your goal, and
today we are inspecting, let's say, roughly 3 to 4 percent,
that tells me that Customs is about one-fourth the size it
should be, or I should say the traditional role performed by
Customs now being performed by the broader bureau inside DHS.
Again, I am sure that number is wrong. I am sure there will
be clever, innovative, new ways to inspect cargo with fewer
people per container using technology, using other new
procedures. But to me it looks like you have got to increase by
several-fold the size of your workforce and the number of
people involved in this. I said before Customs had 20,000
people in the old days. Some of those people were doing
internal pursuit of smugglers, so it wasn't all about border
security. But if 10,000 to 15,000 of those people were
primarily focused on inspecting cargo as it came into the
United States, I think that number needs to be up in the range
of 30,000, the number of people who are doing cargo inspection.
The number we had before September 11 needs to increase by
something like 10,000 or 15,000 people. These are not huge
numbers, especially by comparison to DOD or certain other kinds
of government agencies, but they are still very big compared to
what is happening so far because the Bureau of Customs and
Border Protection is increasing in size by just 10 percent. And
it looks to me like it has to double or maybe triple.
So I think, instead of increasing the number of people
doing cargo inspection by a few thousand, we have got to
increase that number by 10,000, 15,000, or 20,000. Again, I am
sure my specific numbers--and I am couching them in broad terms
because I don't have very precise ways of making the estimates.
I am sure that my approach isn't quite right. But it is still
illuminating that if you just do a back-of-the-envelope
calculation, you compare the fact that we should be increasing,
I think, the inspection rate by three or four times what it is
today, we are only adding 10 percent to Customs' workforce,
there is a big mismatch. And I think the Customs part, the
cargo inspection part of this new bureau needs another budget
increase of more than $1 billion a year, maybe in the area of
$1.5 billion a year, and, again, 10,000 or more additional
employees to do the job right.
So that is just a broad way of looking at these problems,
and my final word, it is part of the broader Brookings study
that we have done that suggests a homeland security budget of
roughly $50 billion a year. To us that looks like the right
order of magnitude for what the Federal homeland security
requirement really should be which is in contrast to the $41
billion proposal of the administration. That is in the right
direction, but we think it is still probably about $10 billion
a year shy for the reasons like the ones I have just mentioned
this morning.
Thank you.
Chairman Collins. Thank you for your testimony.
Mr. Flynn, you have written a lot about the economic impact
of a possible attack using a container. Could you expand on
that? After the attacks on our Nation of September 11, we lost
3,000 lives. It stunned the Nation. It sparked an economic
downturn. But it did not cripple the economy. If 90 percent of
U.S.-bound cargo arrives by container, what would be the impact
if we had an attack using our cargo system?
Mr. Flynn. There aren't hard numbers, of course, that give
us a sense of that because of this elusive--how do you restore
public confidence and what time would that take? There are the
mechanics of just when you turn your system off, it is hard to
turn it back on again for some of the reasons I have just
outlined.
But in the case of aviation after September 11, we
grounded, of course, all the planes. We went through every
single plane to verify there was no terrorist or means of
terrorism on the planes before we restarted. That took 3 days.
If you had to do it in surface transportation, intermodal
transportation, just stop, freeze, and check, you are talking a
minimum of about 6 months. That obviously is something that
this country couldn't afford to do. But you are faced with this
dilemma. If you had a box go off, potentially tens of thousands
of people's lives lost. So people are looking in their streets,
in their neighborhoods, and they are seeing rail cars come
through as they come right by this Capitol Building here, or
they are seeing trucks that are coming by, and they are saying:
Where do these things come from? Who has checked them? What has
happened here? And how do we have confidence something as
horrific over there--and, of course, the other challenge the
President will immediately face is all this chatter will start
rising up. All the stuff that has been discounted by
intelligence officials up to this point as perhaps not credible
now will all be surged forward because we have this clear
incidence.
So there will be this great uncertainty. There will be a
lot of public concern and angst, and there will be an
accountability. OK, what is it that we have out there that
should make me feel comfortable about this train, truck, or
ship coming into my port or across my border crossing, or into
my city or town?
And my concern is that when you can't point to much beyond
what we have, which is, as I laid out here, well, we have a few
guys overseas, they checked about 1 percent with their allies,
with the seals. We are still deliberating if we should go from
a 50-cent lead seal to a dollar one. Some people are talking
about the electronics. We haven't quite got the standards down,
but 5 years from now we will have something before the
international standards organization. This is not the basis for
building much confidence.
So what happens? What happens is we know that companies
like Wal-Mart, basically, you know, live off of a--there is no
warehouse in the back of the store. This is the most profitable
corporation in our country, and it basically depends upon a
supply chain getting goods there. The GMs and the automotive
companies, Ford, they basically require that--they are ordering
10 times a day shipments often coming across the Canadian
border into the United States. That stops within the space of
about 3 hours. They just don't have the parts to assemble cars.
And that is true across the board for manufacturers.
Many manufacturers are just-in-time--toys, for instance,
are built around Hollywood promotions, around movies, and
McDonald's and so forth here. There is a window of about 2
weeks when you can sell a toy. If you have a delay, it is gone
because the kids have moved on to something else, some other
exciting thing.
You have got basically--the core of our competitiveness,
which has been a big part of it, has been low inventories,
being able to very nimbly build things in a hurry, relying on
vast networks of outsourcing. All that grinds to a halt. So it
is our retail sector, it is our manufacturing sector, and plus
all the workers of that service community that are
dispossessed.
All we can point to is the 10-day lockdown of the West
Coast over the longshoremen's strike last--if there ever was a
wake-up call on this issue, it seemed to me that should have
been one. But it was viewed just as a labor-management issue.
But those 10 days, the estimates are on the order of about $20
to $30 billion of disruption. And it took a week for every day
that you turn off the system to recover, just the mechanics,
not the public confidence.
I know I was a little long-winded on that, and there are
not hard numbers, but that is a sense of the scale of what we
are dealing with here.
Chairman Collins. That is one reason I think this is such a
tempting target for terrorists. Not only can they cause
enormous loss of life, potentially, but they could cripple our
economy, cripple the whole system of international trade.
Mr. Flynn. And what we know is that is the stated goal of
the Al Qaeda network.
Chairman Collins. Right.
Mr. Flynn. It is to do just that kind of things.
Chairman Collins. Right. Mr. O'Hanlon.
Mr. O'Hanlon. Senator, just very quickly, my colleague
Peter Orszag, an economist, last year estimated the
consequences of different kinds of terrorist attacks, and it is
in our study. And this kind of a scenario that you are
postulating was his No. 1 most potentially significant loss of
economic activity, a container that winds up being the way in
which a nuclear weapon or a major biological attack is
generated in the United States. He estimated up to $1 trillion
in potential economic damage--very rough estimate, and he would
be the first to emphasize that. But it was top on his list of
potential economic consequences of any and all terrorist
attacks he could envision.
Chairman Collins. Captain Monroe, you are on the front
lines in operating a local port, the largest one that we have
in Maine. Do you have a clear sense of who to go to in the
Federal Government, who is in charge? Do you get clear and
consistent guidance from the Federal Government?
Captain Monroe. I have to say honestly it seems like every
agency has got some level of responsibility, and it is really
difficult sometimes to determine who really is in charge of the
program.
I find that the most effective way to do all of this in
working with Federal agencies is to make sure we try to get
everybody into the loop, which is an enormous effort. Many
times we will have one agency talk to us and give us some
guidance, ask us to do something, only to find out that it may
not be consistent with what another agency would like us to do.
It is creating an enormous amount of difficulty just
getting people to talk and work with each other.
Chairman Collins. That is of great concern to me because it
is people like you who have to implement a lot of these
programs in cooperation with Customs and with other agencies.
And it seems to me that we are still having problems with
coordinating, providing accurate information, and providing
access to timely information so that you can do your job.
Captain Monroe. I think one of the most significant
problems we face is just a lack of intelligence, and obviously,
we have heard the stated concerns about how we often find out
from CNN a lot faster than we do from our own Federal
Government as to what level of security threat we are at. But I
find that just getting the information around from our Federal
agencies is oftentimes disjointed.
If we did not have the aviation sector to rely on, we would
not get the information as far as we do.
Chairman Collins. Thank you.
Mr. Hall, before I yield to Senator Coleman, I want to go
back to the case study that you conducted with the container
that was shipped containing light bulbs from Slovakia to New
Hampshire, and I want to put up the picture of the
container.\1\
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\1\ The photographs referred to appear in the Appendix on page 48.
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It is my understanding--well, we have only to look at it to
see. You have the tracking device, the light sensors. This had
antennae, wires coming out of that. Were you surprised that all
of this equipment didn't prompt an inspection of this
container?
Mr. Hall. Clearly, we were, Madam Chairman. Let me just
point out, the photograph on the right is actually a photograph
of what is in behind the door which is in the photograph on the
left.\1\ So if an inspector had been prompted to inspect the
container because the inspector saw the antennae and the wire
on the back end, that is what the inspector would have seen
inside, I suspect prompting even more questions. They never got
to look at those gizmos on the inside, which were really parts
of the sensing equipment and transmitting equipment.
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\1\ The photographs referred to appear in the Appendix on page 48.
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Chairman Collins. Do you think that the antenna which was
on the outside should have prompted an inspection? I mean,
clearly, it sounds like the wires that I pointed to were
concealed inside. But there is still unusual material on the
outside of this container by the antenna. Do you think that
should have prompted it?
Mr. Hall. Absolutely, Madam Chairman. When we were
reviewing the initial studies at an oral presentation from the
Volpe Center right after the completion of the project, that
fact alerted every law enforcement officer in the room, and we
had representatives from Customs, Coast Guard, Marshals
Service, and our offices. The antennae--our antennae went up,
and we asked specifically that Volpe include that as one of the
essentially unintended consequences of what they found out. We
weren't expecting to see that at all as an issue.
Chairman Collins. And it is my understanding this container
went through several ports. Is that correct?
Mr. Hall. That is correct. It crossed, I believe, four
international boundaries in Europe, went into a seaport, came
back into a seaport in Montreal, cleared there, came over the
port of entry from Canada into the United States.
Chairman Collins. Thank you. Senator Coleman.
Senator Coleman. Thank you, Madam Chairman.
I have to say what a fabulous hearing this is. Both the
distinguished Chairman and myself in the course of these
discussions about homeland security often ask the question,
What is the impact on the local level? And, for instance, when
Secretary Ridge was here, we raised the questions about
communications and have continued to do that. So I think it is
important to get the local perspective, the grass-roots
perspective.
Captain Monroe, a specific question to you, though. Are you
involved in the joint terrorism task forces? Because when the
FBI folks were here, we talked about what was going on at the
local level. It appeared that from their perspective--and I was
both a former prosecutor and a mayor, and so I have had
opportunity to work with these groups. But it appeared that the
kind of grass-roots basis for sharing of information, the
framework was built around these joint terrorism task forces.
Are you involved in those efforts?
Captain Monroe. We are involved in, I can roughly estimate,
no less than 24 committees right now that are currently looking
at all of this, and there is an enormous amount of effort at
the Federal, State, and local level, with people trying to look
at security. Part of our reason and our concern is that all of
these efforts need to be focused and brought together.
Senator Coleman. It appeared to us that the singular focus,
at least when we had the FBI and the CIA and others at these
joint terrorism task forces, it is obvious that when you get
back to the local level, that message has to be much clearer
and much more focused and easier for all of us to understand.
Commander Flynn, you talked about a test, and you indicated
that it would take 100 cargoes and just kind of pull them out
and just kind of see if there are any problems. What do you
mean by problems? Assuming we were to try to have that test
become a reality, what would folks be looking for?
Mr. Flynn. Well, the real issue here is that a risk
management approach is having confidence that you are, in fact,
pulling out of the queue all that which deserves an inspection,
that is not compliant with the rules of commerce, so,
therefore, might pose a risk. The only way, it seems to me,
that you can have real confidence with what is in place is to
routinely demonstrate that what you are not missing things in
the low risk pool.
The O.S.C. story is in part that of showing there are risks
even with the ultimate trusted shipper. Osram-Sylvania couldn't
have been a better corporate citizen. It should be commended in
the Rose Garden for their support in trying to help improve
supply chain security. But Osram-Sylvania doesn't exercise much
in the way of control over what happens to this box as it moves
through the system, and things could happen along the way, as
they will be the first to attest as a part of this process.
So what we need to be able to do, if we are going to stand
up and tell the American people that we are checking the right
containers, we have got to be able to point to how we are
refining and working on that model. So for me, I guess what I
would like as a comparison where we would periodically pull out
100 randomly. If you find that 5 or 10 of those are not
compliant but only 3 of those would have hit your risk
criteria, then you know you better go back and refine the
criteria.
What I am worried about is not subjecting to scrutiny a
blanket statement that ``we are getting the right ones, don't
anybody worry about it.''
I think it also requires a focused oversight effort over
how that algorithm, the rulemaking process is being evolved.
What we know is that the system was set up for regulatory
compliance. The automated targeting system Customs used was for
regulatory compliance is built around cargo manifests. That is
just not sufficient in the new security environment we are in,
particularly when we only are going to inspect such a small
percentage. So making that robust--there are efforts underway
with the coordination with the Office of Naval Intelligence and
with the Coast Guard and so forth to try to advance and improve
this, but day-to-day inspectors sitting down there flipping
through the manifests do not have access often to all the
available data, and they are largely using an old system to
make their targeting choices.
Senator Coleman. You are really then raising two issues, as
I understand it. One is the issue of is the system working, so
we are saying we have got a system that is working, and you are
saying we can measure that. But then I think you are raising a
larger issue, and I am not sure how to address it, by the way,
and that is the issue of confidence. It is not a matter of
whether if it is working. If it is working, do people believe
that it is working? Our whole system of criminal justice, the
reason we are not out there in vigilante groups enforcing law
ourselves, or the reason that we don't cower in our homes when
a murder takes place in our neighborhood is because we have
confidence that those responsible will deal with it, even if we
don't deal with every case.
And what I am hearing being said here, if we have one
incident of some material being sent through our cargo system
that causes loss of life, we are fearing a whole system shut
down, even though in other places around the world where there
are terrorist attacks, such as Israel, life goes on. What I am
hearing is we are not prepared for that here, psychologically
not prepared. We don't have the level of confidence in the
system, and as a result, we face shutdown. If we face shutdown,
the consequences are enormous.
So I think we have to be giving some thought not just to--
this is why I asked about your test--not just finding out
whether it is working, but then having some discussion of what
are the things that we do to generate confidence that even if
there is a problem, we don't shut everything down.
Mr. Flynn. Yes, Senator. I guess the only thing I can point
to as an example is aviation safety. In its earliest years,
that is an industry that started with barnstormers. Only stunt
people got on planes. What the industry had to do, turn around
that image to make it commercially viable was to build safety
into every aspect of the plane, and have a built-in as a
response capability. That some kind of infrastructure now has
to be built in the supply chain around in the face of the new
security paradigm. And I think projects like Operation Safe
Commerce are designed to pull all the right stakeholders
together and to help build that system and build that
confidence that there is a way to get to where we need to be.
But, the resources are very limited, and we are not moving
very fast. Operation Safe Commerce was a quarter-million-dollar
investment. That is the total amount of money the U.S.
Government has spent on doing a full supply chain analysis and
testing whether these technologies even work.
Senator Coleman. Very helpful. Thank you, Madam Chairman.
Chairman Collins. Thank you very much, Senator.
Captain Monroe, I want to get back to an issue that you
touched on in your testimony, and that is, some people have
suggested that all cargo go to the mega-ports and that the
smaller ports be cut out of the process and that would somehow
improve security.
In addition to the devastating economic consequences of a
decision like that on smaller ports, could you expand on your
proposal that it actually might be better to do the opposite,
to divert more cargo from the mega-ports to the smaller ports,
which might have more time to do the kinds of inspections that
we have been discussing today?
Captain Monroe. Well, I will make it akin to an example in
the aviation industry. Imagine if we had a problem and
everybody decided to close all the small regional airports and
put everybody through Logan Airport. The reality here is that
the mega-ports have to deal with a much more significant volume
of cargo, and that a lot of cargo does come into the United
States right now and is immediately moved onto feeder services,
whether it is barge or small ship. It moves up and down the
coast. So a lot of it could not even have to go down through
highway systems and whatever. That cargo could arrive in bond
at the very small terminals, and then in turn, more of that
cargo could be identified, inspected, and checked.
Whether it is outbound or inbound doesn't make any
difference, and there has been a maritime transportation system
initiative before the Federal Government for a number of years
now, and it has never really gone anywhere, primarily because
when focusing on that, we still move our containers mostly by
rail or by truck through the system, and people don't recognize
the value of the Waterborne System.
I think in many cases we are much more capable of looking
at our boxes more effectively. We know, for example, that every
container that comes off our feeder ship from Halifax, Nova
Scotia, is looked at by a member of the International
Longshoremen's Association, primarily for damage, and the
reason being that if there are any damages on the container,
there are claims that are made. And when doing so, it is easy
to look at that and see things that are abnormal.
Now, for example, this antenna system, this array that was
put on the outside of this container, probably would have been
something that was picked up. Even though we have seen those
things before, there have been a number of tests made for
tracking containers through GPS transponder technology. But at
the end of the day, somebody would have said there is something
abnormal there. And when you involve only the Federal agencies,
because a lot of times we say, well, that is just Customs' job
to do it, it isn't. It is everybody on the pier. It is every
longshoremen, every terminal operator, every stevedore, every
port official, and every Federal agency who is down there on
the dock looking. We should all be looking for those things.
And I think we have a better capability by spreading that out
and not just rely on Federal officers.
The other thing, too, if we do have an attack on our
transportation system, we are able to get that system up and
running faster. After September 11, they closed the Port of New
York, and in doing so a lot of mega-cruise ships had to be
diverted to other ports. Ports like Boston and Portland, Maine,
were able to absorb that. We were able to adapt the system. And
I think we have that capability there, but putting all our eggs
in one basket is not the right thing to do.
Chairman Collins. Mr. Flynn, what is your opinion on the
proposal to concentrate cargo in the mega-ports?
Mr. Flynn. Well, it is the tail wagging the dog. It is
basically saying we have got a finite amount of inspection
resources; therefore, we will reconfigure the entire global
transportation system to conform to those available resources.
I mean, this is madness.
Yes, the non-intrusive inspection equipment is costly, $1
million for the package deal to install one of these screeners.
But they need to be put in feeder ports.
A core issue I have learned from focusing on the border
security issue over the last decade is that the more
inefficient you make a system, the less police-able it becomes.
If you impose an inspection regime that essentially causes a
fragmented market response you ceate more in security. I point
to Laredo, Texas, as a perfect example of this. The drayage,
the small truck owned by Mom and Pop operations, this is where
old trucks go where they die. You have an incredibly transient
labor force, about 300-percent turnover. All that trucking
sector services the fact that you don't take a long-haul truck
and sit for 6 hours to go across the border and come back
empty.
So sometimes your security measure will create a more
chaotic environment which will be more difficult to police. The
corollary of that is the more efficient we make transportation
systems, as long as there is sufficient oversight and can we
have confidence in their integrity, you actually have a
national security rationale to improve the bottlenecks.
We should have been working on our ports for a long, long
time. We are an island nation, effectively, when it comes to
global trade.
The kind of keystone cop Federal behavior at ports makes no
economic sense, but it also creates shadows that bad guys can
exploit. We have a security rationale to improve efficiency. So
we should not even see this as a tradeoff. These are mutually
reinforcing. A more efficient transportation system with the
eyes and ears, the collective ones, applied to it is the kind
of direction we need to go. And I would recommend that all this
work being done on retooling at our transportation
authorization acts must have this conversation going on in
parallel.
Chairman Collins. Mr. Flynn, I had one other question I
want to get your answer to, and that is, the Customs system
relies very heavily on the accuracy of the manifest in order to
target containers for a physical inspection or a technological
inspection.
How accurate do you think manifests are? Do you have a
concern in that area that leads you to propose the random
review of certain containers?
Mr. Flynn. Well, I think you do periodic random reviews
because they are necessary to ensure--there is some deterrent
value, and they are also necessary to constantly refine your
model. But they are, in fact, limited scale. You are relying
primarily on this risk management analog, this matrix to choose
what it is that you are looking at.
The manifest traditionally has been the weakest link in
commercial documentation. Basically, the common phrase used by
carriers is ``is said to contain,'' because there is no time
for a master to actually know what is actually in this box. He
is stating that whoever his client is told him that this was a
shipment of this or that, and all he is saying is that is what
I think I have.
You are talking about ports like Hong Kong and Singapore
that have 5,000 trucks a day entering into a terminal with
cargo. There are 120 movements an hour going onto that ship by
three gartry cranes. The idea that you are somehow filtering
all this is at the brow of the ship is unrealistic.
So the manifest issue remains a challenging one for builing
a credible targeting system. The 24-hour rule is getting at
that saying we need some specificity in the manifest beyond
``freights of all kind.'' But there is a whole range of other
commercial documentation in electronic form that any company
must use to maintain their supply chain.
The problem has been that, again, it is the tail wagging
the dog. Customs has been built to basically look at cargo
manifests; therefore, all the rest of the industry has been
directed to adapt to that by giving information Customs needs
to make its machinery work. Customs is not being malicious or
draconian. It has an ancient system that hasn't been well
financed. The automated commercial environment is still 3 years
away from being deployed.
Now, there are means--there are efforts and initiatives
underway in the Federal Government. Again, the Office of Naval
Intelligence has been brought in on this, the Coast Guard is
working on this. The real effort, though, must be to drill down
to that commercial data from the purchase order, ideally. When
we first know that something is going to happen, that gives us
the ability to detect the abnormal behavior, to have the
confidence when we target something as a potential problem that
it is likely to be a problem. And so moving beyond the
manifest, I think, is going to be absolutely essential.
Chairman Collins. Captain Monroe, do you have any comments
on that and, also, in general your evaluation of the programs
that Customs has put in place?
Captain Monroe. Well, let me talk about the manifest. This
is something that was intentionally done, and the reason it was
intentionally done is for many years organized crime targeted
containers. So the more information that they had available to
them, the more that shippers and the carrier community and the
stevedoring companies eventually got to the point where they
realized that the more vague we are, the less our chance of
having a container or our cargo stolen.
The technology exists to have very accurate manifests, and
there is no reason that Customs can't demand those manifests,
particularly if the new automated Customs system for computer
tracking is implemented. That information does not have to be
made available to many folks who might be handling the cargo,
but it certainly should be available to Customs, and it
certainly should be available to the ports, because they at
least will be able to measure what might be potentially
dangerous to their community if those containers come through.
And as I say, that is an easy fix.
As far as Customs is concerned, I think they are certainly
headed down the right path, and I have to agree with Dr. Flynn
that we have grossly underestimated what it is going to take to
make our ports secure and to make sure that we have the
resources available. I think if you look at the nature of what
the value of our marine transportation system and the amount of
cargo we move through that system is, we are not really taking
it as seriously as we did the aviation system. We know that
cargo doesn't vote, and that is part of the problem.
The reality here is that unless we pay good attention to
this, the programs that Customs wants to implement and the
timeline they want to implement those programs on are not going
to be accomplished effectively. So that is essentially the
first step in moving this in the right direction.
I honestly believe that Customs is headed down the right
path. I sincerely hope that in doing so, in their zeal to get
this closed in, that they do engage the industry. One of the
problems we faced early on was the arbitrary decision that was
made to have all containers bypass Portland and be cleared in
Boston, and then those containers be brought back to us by
truck. A lot of us raised our concerns when that happened, and
it got put aside. But things like that cannot arbitrarily
happen. There has to be an interchange. The best solutions for
how to deal with seaport security and container security often
lie with those of us who deal with it every day.
Chairman Collins. Well said, and a good note on which to
conclude this hearing.
Mr. O'Hanlon, I want to thank you for bringing up the needs
of the Coast Guard. Coming from the State of Maine, I am very
aware of how stretched the Coast Guard is, and I am very
concerned that we not jeopardize the traditional mission of the
Coast Guard, which is so important in a fishing State like
Maine. And we are making progress. The budget is up
considerably. But your point about the number of Coast Guard
members is a very good one. Providing more assets, providing
more cutters is a step in the right direction, but the
personnel are still very stretched. So thank you for raising
that point.
I want to thank all of our witnesses today for excellent
testimony and to thank you for the thought and the expertise
that you bring to bear on this subject. I believe this is our
single greatest vulnerability, and it is going to take the
collective wisdom of all of us at all levels of government and
in the private sector as well in order to come up with
solutions. So I very much appreciate your taking the time to be
with us today. Thank you for your excellent testimony.
The hearing record will remain open for 15 days. This
hearing is now adjourned.
[Whereupon, at 11:54 a.m., the Committee was adjourned.]
A P P E N D I X
----------
PREPARED STATEMENT OF SENATOR LIEBERMAN
Thank you, Madam Chairman, for holding this hearing today on a
subject that should be of profound concern to anyone interested in
safeguarding our nation from terrorist attack.
The vulnerability of our ports--and in particular the vulnerability
of containers--to terrorist mayhem is one of the more sobering pieces
of information to emerge from an array of security assessments
conducted over the past few years. It is a vulnerability that the
Federal Government--in partnership with state and local governments and
the private sector--must turn to in earnest, with a commitment of
adequate resources, to protect not just people and property, but the
very hear to of our economy.
We have a panel of knowledgeable witnesses here today--some like
Commander Steve Flynn and Michael O'Hanlon who have established
themselves as premier experts on maritime security and from whom we
have received valuable advice in the past. I'm sure their testimony
will once again aid the government's efforts to prevent, prepare for,
and respond in the event of a terrorist attack on our ports.
Our ports and borders must be securely defended because they are
our mail links to the global trade that has, without question, fueled
our economic progress and provided all Americans with the highest
quality of life in the world today.
According to the second report on national security produced by
former Senators Gary Hart and Warren Rudman, 11 million containers
carry 90 percent of the world's cargo today. Yet, there are no required
security standards governing the loading or transport of containers. In
fact, the architects of the inter-modal transportation revolution never
really took security into consideration. Their priorities were lowering
costs, and increasing the speed and efficiency of operations. They
achieved their goals brilliantly, which, ironically, now leaves us open
to peril.
In December 2001, shortly after the shock of September 11, this
Committee held a hearing on port security. One of the witnesses, F.
Amanda DeBusk, a former commissioner of the Interagency Commission on
Crime and Security at U.S. Seaports, laid out the challengers in
coordinating port security. Most ports, she told us, are chartered by
states or local government. Some are operated by public port
authorities, some by private concerns. There were at least 15 federal
agencies with jurisdiction at the seaports, in addition to state and
local agencies and the private sector. Today, we have the Department of
Homeland Security to coordinate this tangle of authority. But I
hesitate to proclaim victory.
Each day, five million tons of goods cross our borders by ship,
truck, or train. Much of it arrives in the 21,000 containers that enter
U.S. ports daily. The Administration tells us that only 3.7 percent of
those containers are physically inspected, which means that, at any
given time, authorities still have very little idea about the contents
of thousands of multi-ton containers traveling on trucks, trains, or
barges, on roads, rails, and waterways throughout the country. The
cunning with which a terrorist might smuggle chemical, biological or
even, nuclear weapons into one of those containers, without being
detected, knows no bounds. And it would be foolhardy to doubt that an
interruption of the flow of commerce would have anything but
catastrophic consequences for all of us.
Hypothetical scenarios have hinted at the potential impact of an
attack through maritime trade. Listen to how one incident is played out
by a group of experts from government and industry. On day one, an
unknown number of dirty bombs enter the country through ship
containers. One is found at the port of Los Angeles. And that port is
closed. On day four, another dirty bomb is found while a container is
being unloaded near Minneapolis. All ports and border crossings are
closed, paralyzing the entire supply chain.
On day five, the Dow is down 500 points. On day eight, fuel
deliveries stop, gas prices skyrocket, and supply chains report
inventory shortages and plant closures. On the 20th day, a freight car
in Chicago explodes and half of all Fortune 500 companies issue
earnings warnings. The experts conclude that port, shipping, and
manufacturing activity will not return to normal for two months, at
which point economic losses are estimated at $58 billion.
It's scary stuff. But we can prevent a scenario like I just
described if Congress, the Bush Administration, and the private sector
come to understand--before disaster occurs--the consequences of
inattention, inaction, and under funding.
The President's FY 2004 budget, regrettably, does not reflect an
understanding of the risks at hand. As is the case in general with
homeland security funding, the rhetoric simply is not matched by hard
dollar commitments. One of the most glaring gaps--the physical security
of our ports--is ignored by the Administration completely. The
President's budget contains no money for even the most basic
improvements--like perimeter fencing, security patrols, employee
background checks--which the Coast Guard has estimated will cost $4.4
billion. I believe $1.2 billion needs to be spent next year for these
basic protections.
The Administration has done a better job at inspecting high-risk
cargo before it reaches our ports. Its Container Security Initiative,
which we will hear more about from our witnesses today, stations
Customs officers overseas to inspect containers before they begin their
voyage to the U.S., though they will need technology on site to address
the new task. Once again, however, the Administration is providing only
a fraction of the money needed to ensure successs--$62 million for FY
04. I have called for an additional $100 million to expand this program
to track containers as close as possible to their point of origin.
The Coast Guard has made a heroic effort--through Operation Noble
Eagle and Enduring Freedom--to step up port supervision and still
fulfill its other mission. But it has done so using antiquated
equipment and limited resources. Before September 11, we were on track
to modernize the Coast Guard over a period of 20 years, and the
President has proposed spending $500 million in FY 2004 toward that
effort. But that time frame and that level of funding is no longer
practical. I have suggested an additional $700 million, for a total of
$1.2 billion in FY 04, to complete the job in half the time.
Finally, the Transportation Security Administration, which has
concentrated so far on improving airline security, has virtually
ignored the security of other transportation systems. Unfortunately,
the Administration's proposed TSA budget of $4.8 billion is a 10
percent decrease from last year's proposal. Only $85 million is
requested for land security activities. I am urging an additional $500
million to restore the Administration's proposed cuts and another $500
million specifically for freight and passenger rail security
improvements.
No matter how you slice it, we need to make significant investments
just to begin to bring our system of maritime trade security into the
21st century. With the vast volume of merchandise passing through our
ports and over our borders, we simply cannot inspect every container by
hand. But we need to continue to work with the private sector and state
and local authorities to use advanced technologies to make sure that
all containers are scanned, coded, logged, and tracked with a
transponder, and have their contents verified, starting as close as
possible to their point of origin.
The best way to protect, ourselves, of course, is to stop
terrorists before they act. But we have learned the hard way that we
must also prepare for the worst. In the case of port security, that
means directing people, technology, and yes, money, toward the goal of
keeping dangerous materials from entering and traveling around the
country. We have much work to do to get our entire system of importing
and exporting to a point where it is not just efficient but physically
and economically safe. I am hopeful that the testimony we hear today
will put us on track toward a sensible an sound strategy to do just
that.
__________
PREPARED STATEMENT OF SENATOR CARPER
Thank you, Madam Chair.
I'm pleased today that the committee is holding a hearing on cargo
container security, an issue of great importance to my state.
The Port of Wilmington in Delaware is the 20th busiest port in the
country for container traffic. It is also the largest importer of food
in North America, leading the way in shipments of fresh fruit, meat and
juice concentrate.
In the months following September 11, 2001, the federal government
moved swiftly to upgrade the security of our aviation system. We've
spent billions of dollars hiring an army of baggage screeners and other
security personnel and putting them to work at airports across the
country. I applaud the Transportation Security Administration for
meeting the tough deadlines Congress set for them in the Aviation and
Transportation Security Act. Today, a passenger getting on a plane at
any airport in the country is screened by a federal employee and has
every piece of their baggage checked for explosives and other dangerous
items.
The federal government has taken smaller steps in the area of port
security. Programs like the Cargo Security Initiative and Operation
Safe Commerce are promising, but only a fraction of the containers that
enter U.S. ports each year are inspected by Customs agents. Inspecting
every ship and every container is impossible but I'd like to hear from
Secretary Hutchinson about what percentage of cargo Customs can
reasonably be expected to inspect I'd also like to hear how effective
the pre-screening that is taking place under CSI has been and whether
programs such as the Customs-Trade Partnership Against Terrorism that
depend on businesses policing their own supply chain can really be a
substitute for more inspections.
In talking about port security, however, we should not forget that
the cargo that comes off of ships at our ports does not stay there.
Some of it goes onto trucks that drive through our cities and
neighborhoods. Some of it also goes onto trains. Unfortunately, the
federal government has done very little to improve security in surface
transportation.
The Transportation Security Administration was tasked after
September 11 with securing our entire transportation infrastructure,
from aviation to ports to rail. Despite the progress the agency has
made in aviation, however, only a fraction of its budget is dedicated
to other modes. Of the $18 billion included in the president's FY04
budget for the Department of Homeland Security's Directorate for Border
and Transportation Security, of which TSA is now a part, nothing at all
is set aside for rail security.
Last Congress, when this Committee, under Senator Lieberman's
leadership, reported out a bill to creating the Department of Homeland
Security, it included an amendment I authored authorizing $1.2 billion
in new rail security efforts. This amendment was stripped from the
final bill, however, and subsequent efforts to pass a similar rail
security package with my colleagues Senators McCain and Hollings were
blocked. The 107th Congress came to a close without taking any
meaningful steps to improve the security of our nation's railroads or
to protect the millions of Americans who travel by rail every day.
For all of our commendable focus and attention on preventing future
attacks against the aviation industry, it is unconscionable that we are
unable to ensure that the roughly 25 million intercity passengers and
many millions more that commute aboard our trains are as safe as the
ones in our skies.
To address this grave omission, Senator Hollings reintroduced his
National Defense Rail Act this Congress. It provides funding for the
Secretary of Homeland Security to conduct an assessment of rail
security threats and to come up with steps railroads can take to
protect rail infrastructure, stations, and facilities. The bill would
authorize for the $515 million to undertake the assessments, addressing
rail security threats or awarding grants to passenger and freight
railroads to implement the Secretary's recommendations.
I hope that Undersecretary Hutchison can comment on this issue
today and discuss how the Department plans to address of rail security.
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