[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
ASSESSING THE DEPARTMENT OF HOMELAND SECURITY'S MISSION EFFECTIVENESS: 
               IS IT ENOUGH TO MEET THE TERRORIST THREAT?

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

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 9, 2005

                               __________

                           Serial No. 109-34

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

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


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 9, 2005.....................................     1
Statement of:
    Chertoff, Michael, Secretary, U.S. Department of Homeland 
      Security...................................................    27
Letters, statements, etc., submitted for the record by:
    Brown-Waite, Hon. Ginny, a Representative in Congress from 
      the State of Florida, prepared statement of................    82
    Chertoff, Michael, Secretary, U.S. Department of Homeland 
      Security, prepared statement of............................    30
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    22
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     5
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada, prepared statement of.....................    82
    Shays, Hon. Christopher, a Representative in Congress from 
      the State of Connecticut:
        Letter dated October 15, 2001............................    78
        Prepared statement of....................................    18
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................    10


ASSESSING THE DEPARTMENT OF HOMELAND SECURITY'S MISSION EFFECTIVENESS: 
               IS IT ENOUGH TO MEET THE TERRORIST THREAT?

                              ----------                              


                        THURSDAY, JUNE 9, 2005,

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
2154, Rayburn House Office Building, Hon. Tom Davis (chairman 
of the committee) presiding.
    Present: Representatives Davis of Virginia, Shays, Mica, 
Gutknecht, Souder, Platts, Cannon, Duncan, Miller, Turner, 
Issa, Brown-Waite, Porter, Dent, Fox, Waxman, Maloney, 
Cummings, Clay, Watson, Ruppersberger, Higgins, and Norton.
    Staff present: Melissa Wojciak, staff director; David 
Marin, deputy staff director/communications director; Keith 
Ausbrook, chief counsel; Jennifer Safavian, chief counsel for 
oversight and investigations; John Hunter, counsel; Chas 
Phillips, policy counsel; Rob White, press secretary; Drew 
Crockett, deputy director of communications; Teresa Austin, 
chief clerk; Sarah D'Orsie, deputy clerk; Corinne Zaccgnini, 
chief information officer; Andrew James, staff assistant; Phil 
Barnett, minority staff director/chief counsel; Kristin 
Amerling, minority general counsel; David Rapallo, minority 
chief investigative counsel; Andrew Su, minority professional 
staff member; Earley Green, minority chief clerk; and Jean 
Gosa, minority assistant clerk.
    Chairman Tom Davis. The meeting will come to order.
    I want to welcome everybody to today's hearing, and we are 
very privileged to have Michael Chertoff, the Secretary of the 
Department of Homeland Security, with us today. The purpose of 
this hearing is to get the Secretary's assessment of the 
Department's overall effectiveness in meeting its core 
mission--specifically its operations, management, opportunities 
for performance improvement, as well as discuss our concerns 
about how certain programs are being implemented in the 
Department.
    The Department of Homeland Security was created in response 
to the terrorist attacks of September 11. The formation of the 
new Department constituted the most massive Government 
reorganization since 1947. It integrated 23 separate agencies 
and bureaus, it employs over 180,000 people, it has a budget of 
$38.5 billion for fiscal year 2005 and a proposed budget of 
over $41 billion for fiscal year 2006, and it spends an 
estimated $11 billion on contracted services. It is an enormous 
undertaking to put together this new Department and make it 
work. This committee has a direct interest in assessing the 
effective integration of the 23 agencies into one single 
Department.
    The wide-reaching mission of DHS is critical to the safety 
of the Nation. The ultimate objective is to protect the 
American people from future terrorist attacks and to respond to 
natural disasters. The war that threatened our country, and 
every civilized country, has the historic combat component, and 
our troops show every day just how effective the United States 
is in conventional combat. We have no peers in this arena.
    But America's enemies today don't confine themselves to 
conventional combat alone. They target communities, schools, 
and civilians. They fly planes into buildings and take great 
pride in the murder and maiming of scores and scores of 
innocent men, women, and children. Combat soldiers, no matter 
how brave or well equipped, are not the optimal weapon in this 
environment.
    This committee has responsibility for assuring that areas 
such as personnel management, agency organization and 
integration, procurement and particularly utilization of 
technology, information sharing, and information security are 
receiving adequate attention and the congressional policies on 
these issues are being implemented throughout DHS. With the 
huge investment of Government resources and the critical nature 
of the Department's mission, it is our job to determine how 
well the Department is functioning to meet the terrorist threat 
and to provide adequate protection to our citizens.
    Secretary Chertoff initiated a comprehensive review of 
DHS's organization, its operations, and its policies shortly 
before he became Secretary. Known as the second stage review, 
this evaluation is not yet complete, but the exercise signals a 
recognition that additional work is needed to fully integrate 
and coordinate the disparate entities that comprise the new 
Department. I welcome the results of this review. Since its 
ultimate recommendations will most certainly affect issues of 
vital interest to this committee, I want to have further 
discussions with the Secretary as this review progresses.
    I am heartened to know that Secretary Chertoff's approach 
to the organization and operation of DHS is to integrate the 
areas of intelligence, policy, and operations. As we exercise 
our oversight responsibility of the committee, it is important 
to focus on all three of these areas, not just the first. 
Intelligence gathering is critical, but how that intelligence 
is evaluated and acted upon depends upon whether the Department 
performs each of its critical missions.
    The optimal weapon is information: information moved to the 
right people at the right place at the right time; information 
moved within agencies and across departments; information moved 
across jurisdictions of Government as well, seamlessly, 
securely, efficiently. The homeland security battle, therefore, 
is not just about intelligence, but what we do with it.
    We need to be able to identify terrorist threats and defeat 
them. Our success depends on collecting, analyzing, and 
appropriately sharing information found in data bases, 
transactions, and other sources. This committee has long been 
concerned about the lack of information sharing and analysis 
within the Government and among the relevant public and private 
sector parties. This committee was heavily involved in the 
information sharing portions of the Intelligence Reform 
legislation, requiring the President to establish an 
Information Sharing Environment within the Federal Government 
to share information and better protect us from further 
attacks. I am interested in learning how the Department is 
addressing this important issue.
    Although I had initial concerns, I supported the elevation 
of the Assistant Secretary for Cybersecurity within DHS. The 
White House, through the Office of Management and Budget, has 
oversight of Government-wide information policies. The 
Assistant Secretary should bring focus to the issue within DHS. 
However, this individual should not sit at the center of all 
Federal agencies and direct and control their policies on 
information sharing and cybersecurity. That has been, and 
should remain, in my judgment, an issue for the White House. 
There is an important difference between operational authority 
and policy authority.
    Another area of committee oversight is the status of the 
implementation of the new personnel system at the Department. 
In the Homeland Security Act of 2002, Congress gave the 
Secretary and the Director of the Office of Personnel 
Management authority to establish a new, department-wide human 
resources management system, rather than simply cobbling 
together the dozens of pre-existing personnel systems. I am 
interested in hearing about the implementation of the new 
system from the Secretary, including the funding.
    The committee continues to monitor DHS's integration of 
acquisition functions within its 23 agencies. A recent 
Government Accountability Office report found several successes 
in DHS's implementation, but also a number of significant 
challenges. I will be anxious to hear from the Secretary about 
DHS's efforts to implement GAO recommendations to strengthen 
centralized procurement policies and practices throughout the 
Department.
    The committee is concerned about the performance of the 
U.S. Citizenship and Immigration Service. There have been 
mounting issues of coordination and efficiency in the many 
processes used by the agency to accomplish its mission, 
particularly in the information technology systems. I am 
concerned that many legal immigrants, the people who follow the 
rules we have established for entering the country and the kind 
of people we want to welcome to America, are falling through 
the cracks of a broken immigration system.
    The committee is also launching an aggressive review of the 
U.S. Visitor and Immigration Status Indication Technology [U.S. 
VISIT] program being implemented by DHS. A fully functional 
U.S. VISIT system will go a long way toward securing our 
borders from terrorists. During the implementation phase, we 
want to make sure that U.S. VISIT will help secure our borders 
without disrupting the Nation's travel or commerce. Balance on 
this is paramount.
    In addition, the committee has held hearings on the 
Department's implementation of the Support Anti-Terrorism by 
Fostering Effective Technologies [SAFETY] Act of 2002, which 
was enacted to provide incentives for the development and 
deployment of anti-terrorist technologies. I have expressed 
concern about the pace of implementing the application 
processes and conferring designations, as well as the 
burdensome effect of the process on applicants and the lack of 
coordination with the procurement process. I was glad to see 
Secretary Chertoff acknowledge that problems existed with the 
implementation of the SAFETY Act and that he is committed to 
making sure that the intent of Congress is followed.
    The committee looks forward to hearing from the Secretary.
    We are honored to have you here today, and I want to once 
again welcome you and thank you for being here.
    [The prepared statement of Chairman Tom Davis follows:]

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    Chairman Tom Davis. I will now recognize our ranking 
member, Mr. Waxman, for his opening statement.
    Mr. Waxman. Thank you very much, Mr. Chairman. I want to 
join you in welcoming Secretary Chertoff to our hearing today.
    Secretary Chertoff has an extraordinarily difficult job. 
The mission of his Department is to protect the United States 
from terrorist attacks. This could not be more important. Yet, 
the organization he now runs is seriously dysfunctional.
    At a hearing of the National Security Subcommittee earlier 
this week, I expressed my growing concerns about Federal 
procurement policy under the Bush administration.
    The fact is, this administration has misspent literally 
billions of dollars on wasteful and ineffective Federal 
contracts. Private contractors may be making millions, but 
taxpayers are getting soaked. Whether the explanation is gross 
incompetence or deliberate malfeasance, the result is the same: 
taxpayers are being vastly overcharged.
    The litany of administration mismanagement of Federal 
contracts is long and costly. The value of no-bid contracts has 
skyrocketed under the Bush administration. Oversight of Federal 
contracts has been turned over to private companies with 
blatant conflicts of interest. And when government auditors do 
find abuses, their recommendations are ignored.
    Nearly every week, the newspapers are full of stories of 
contract abuse. The FBI has spent $170 million on Virtual Case 
File software that doesn't work. In Iraq, Halliburton has 
overcharged by hundreds of millions of dollars, yet the 
administration continues to shower the company with bonuses and 
special treatment. New equipment worth billions has been sold 
by the Defense Department at fire-sale prices.
    Some of the worst problems, however, are at the Department 
of Homeland Security. As a series of investigative reports have 
revealed, the Department has spent hundreds of millions of 
dollars on homeland security contracts that have proven largely 
ineffective.
    In April, the Washington Post reported that the Government 
is spending over $200 million to buy a high-tech system of 
cameras and sensors to monitor activity on the Mexican and the 
Canadian borders. But this surveillance system has been plagued 
by incomplete installments and doesn't work.
    In May, the New York Times reported that the Department has 
spent billions of dollars on screening equipment at the 
Nation's entry points. But the radiation devices bought by the 
Department can't differentiate between radiation emitted from a 
nuclear bomb and radiation from cat litter or bananas.
    And in May, the Washington Post and the New York Times 
reported that the Department has spent over $1 billion to 
install massive equipment to screen luggage at airports. But 
the equipment doesn't work right and it has been plagued by 
high rates of false alarms.
    Perhaps the largest contract being managed by the 
Department is the U.S. VISIT contract with Accenture to create 
a ``virtual border'' around the United States. Yet, critics say 
that this $10 billion contract may turn into an enormous 
boondoggle that never runs effectively.
    And while billions are being wasted on these contracts, the 
Department's Inspector General has found that taxpayers' 
dollars are being lavished on perks for senior agency 
officials. One IG report found that the Department spent 
hundreds of thousands of dollars on a lavish conference, 
complete with hula dancers, in Hawaii. Another IG report found 
that the Department spent hundreds of thousands more on a gold-
plated gym for senior executives and other employees.
    Secretary Chertoff, I recognize that some of these problems 
will be difficult and time-consuming for you to address. But 
there is one step you could take right away that would have 
immediate benefits. And that is to change the culture of 
secrecy that envelopes and the Department and impedes 
accountability.
    And I want to give you an example. Last fall, there were 
reports suggesting that the Department and your predecessor, 
Secretary Ridge, inappropriately awarded multiple contracts to 
clients of a Philadelphia law firm, Blank Rome. I don't know 
whether those reports are true or not. But to learn more about 
them, I joined with the ranking member of the Homeland Security 
Committee just to request basic information about the contracts 
between the Department and Blank Rome.
    That was 5 months ago. We still have received no 
information in response to our requests.
    And this is not an isolated example. The Department is so 
secretive that it even tried to conceal the identity of a newly 
appointed ombudsman for the Transportation Security 
Administration, whose responsibility it was to interact with 
the public regarding airport security. We couldn't even get the 
identity of the ombudsman.
    Secretary Chertoff, your Department may be able to succeed 
in keeping this kind of information secret. After all, I am a 
member of the minority party, and I don't have the power to 
issue subpoenas or call hearings. But I am a Member of 
Congress, and your Department should be giving out information 
to all Members of Congress, and particularly those on the 
committees that have oversight jurisdiction.
    You may be successful in keeping this culture of secrecy 
going, but I hope you will realize that your Department won't 
succeed if you do. Our system requires checks and balances. The 
surest way to stop wasteful spending and improve performance is 
to encourage--not resist--oversight and accountability.
    Your appearance at this hearing today is a good first step, 
and I look forward to your testimony at this hearing.
    [The prepared statement of Hon. Henry A. Waxman follows:]

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    Chairman Tom Davis. Thank you.
    Mr. Shays.
    Mr. Shays. Thank you, Mr. Chairman.
    Secretary Chertoff, welcome to the committee. Before you 
even say a word, your presence here this morning is powerful 
testimony to the fact that homeland security reaches into every 
aspect of American government. The Committee on Government 
Reform, with oversight jurisdiction over all Federal programs 
and unique purview over intergovernmental relations, can help 
you implement the Department's unfolding mission.
    The first hearing on a bill to create a Department of 
Homeland Security [DHS] was held in this room. We saw the need 
to unify and coordinate scattered functions to confront a new 
lethal post-September 11 security paradigm. But, truth be told, 
we created a fairly blunt instrument to wield against an agile 
and subtle foe. In effect, we built a four-headed octopus and 
asked the behemoth to perform brain surgery the next day. We 
know there has to be a learning curve on both sides of these 
tables.
    Mr. Secretary, I look forward to the results of your review 
of DHS structure and operations. The disparate elements of the 
Department have begun to fuse into a force as nimble and 
discerning as our enemies. The full committee's Subcommittee on 
National Security, Emerging Threats, and International 
Relations oversight has raised some issues that merit your 
sustained attention.
    The alert system. Bleach out the colors. The current system 
is not consistent with good risk communication principles. 
People deserve to know all they can about specific threats and 
what they can do about them. That takes words targeted to 
specific audiences, not just colors splashed coast to coast.
    Radiation detection. The technology may not be ready, and 
we shouldn't indulge a false sense of security about its 
capabilities. Plutonium or highly enriched uranium give off 
very little in terms of detectable radiation and are easily 
shielded. Intelligence is still our best portal monitor against 
those trying to import radiological terror.
    Technology triage. The Department's technology assessment 
process seems without consistency or clear priorities. 
Developers who try to give innovative concepts to DHS are 
rebuffed, while the Department spends millions buying marginal 
technology from big defense contractors.
    Exercises. Federal counter-terrorism training and exercise 
programs still offer first responders a confusing smorgasbord 
rather than a cohesive curriculum. Local exercises can lack 
realism, and lessons learned are not consistently captured and 
fed back into the system.
    Standards. We will never know if preparedness is improving 
if first responders can't answer the basic question: Prepared 
for what? Efforts to define essential capabilities to meet 
specific threats need to be accelerated so States and 
localities know what to do, not just what to buy. The focus on 
equipment standards over functional benchmarks invites wasteful 
spending.
    Mr. Secretary, we know that this is a new job for you and 
the challenges that I have outlined are challenges that we know 
you are trying to address, and not certainly created by you or 
even your predecessor; it is just the task of getting such an 
important department to function the way it needs to.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Christopher Shays follows:]

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    Chairman Tom Davis. Thank you very much.
    I ask Members to try to limit opening statements. I know 
Mr. Souder has one, and our side has the subcommittee chairman 
with some jurisdiction on this.
    Gentleman from Maryland.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Welcome, Mr. Secretary. I am glad to see you here.
    Mr. Chairman, I do thank you for calling today's vitally 
important hearing to evaluate the effectiveness and efficiency 
of the Department of Homeland Security's operation and 
management.
    Following the tragic events of September 11, the DHS was 
created, representing one of the most significant 
transformations of the Federal Government in 50 years. The 
central mission of the DHS is to ``lead the unified efforts to 
secure America, prevent and deter terrorist attacks, and 
protect against and respond to threats and hazards to this 
nation; ensure safe and secure borders; welcome lawful 
immigrants and visitors; and promote the free flow of 
commerce.''
    To carry out this important mission, the DHS employs 
approximately 180,000 employees and manages a budget of $38.5 
billion for fiscal year 2005. In light of the need to better 
protect the homeland in the post-September 11 world, I was 
deeply troubled to learn that DHS's own office of Inspector 
General found that the Department has much to do to establish a 
cohesive, efficient, and effective organizations. That is what 
they said.
    While the Department's massive jurisdiction makes it 
impossible to discuss all my concerns in this statement, I 
would be remiss if I failed to mention several challenges that 
I believe particularly undermine the ability of DHS to fulfill 
its mission, in addition to those things that were stated by 
Mr. Waxman.
    To begin, DHS recently unveiled a new personnel system that 
would needlessly undermine our Nation's longstanding commitment 
to employee protection, independent arbitration and collective 
bargaining rights. Specifically, DHS issued regulations that 
would substantially restrict what issues are covered by 
collective bargaining. As described in the new regulations, the 
DHS is no longer mandated to bargain over ``the number, types, 
grades, or occupational clusters and bands of employees or 
positions assigned to any organizational subdivision, work 
project, or tour of duty.''
    The new personnel system also fails to establish an 
independent entity to resolve labor management disputes and 
establishes a performance-based pay system that can provide a 
means for politicization and cronyism within the DHS without 
the necessary safeguards and clear standards needed to measure 
employee performance. I do not believe that the new personnel 
system supports an efficient and inclusive relationship between 
employers and employees at the DHS, specifically, the type of 
relationship needed to keep morale high, support retention, and 
attract skilled and capable prospective employees to serve at 
the DHS.
    Furthermore, congressional investigations and increasing 
instances of terrorists or alleged terrorists illegally 
entering into the United States have left me seriously 
questioning the DHS's ability to secure our southwest border. 
Weak decisions on our border system undermine our efforts to 
protect our homeland from terrorism and drugs.
    As ranking minority member of the Subcommittee on Criminal 
Justice, Drug Policy, and Human Resources, I have seen first-
hand how the terrorism fueled by the drug trade can be just as 
destructive as the terrorism fueled by religious extremism. We 
cannot lose sight of the fact that nearly all of the cocaine 
consumed in the United States, and most of the heroin consumed 
on the east coast, originates in Colombia. The Customs and 
Border Protection Office within DHS is, therefore, essential in 
identifying and stopping terrorists and drug traffickers before 
they enter our Nation.
    Unfortunately, the President's budget for fiscal year 2006 
makes it more difficult to address these concerns by 
inadequately funding the hiring of new Border Patrol agents and 
Immigration and Customs officers. Related challenges the DHS 
must address are the Transportation Security Administration's 
troublingly high failure rate in detecting weapons, a homeland 
security threat advisory system that is unsophisticated and 
vague, and a poor distribution of limited resources.
    Finally, Mr. Chairman, in no uncertain terms, the American 
people anxiously look to their government to ensure our efforts 
or protecting the homeland and making sure that those efforts 
are effective and efficient, and driven by a commitment to 
common sense. In the end, they expect us to protect their 
communities from those that seek to do us harm. Sadly, there is 
much work yet undone if we are to achieve this worthwhile end.
    I look forward to the testimony of today's witnesses, and 
with that, Mr. Chairman, I yield back.
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]

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[GRAPHIC] [TIFF OMITTED] T1954.014

    Chairman Tom Davis. Thank you.
    Mr. Souder.
    Mr. Souder. Thank you, Chairman Davis. I want to thank you 
for this opportunity and for holding this important hearing.
    I would also like to thank Secretary Chertoff for his 
willingness to come today and join us. And I thoroughly support 
your goal of improving the operations and the efficiency of the 
Department of Homeland Security, and look forward to hearing 
the results of your second stage review.
    Although the Department has made major strides, much 
unfinished business remains, and I do not envy your job. It is 
no secret that the American public has become increasingly 
exasperated about our Government's inability to control our 
Nation's borders. I have seen that impatience and anger at 
numerous border security hearings, in many border communities, 
both rural and urban, and even in my home district in Northwest 
Indiana at every meeting I go to. If there is one thing that 
your Department must get better at, and soon, it is border 
control.
    Our constituents know what we know, namely, that it is 
quite easy to cross our borders illegally and to bring in all 
kinds of contraband. Well organized, large-scale smuggling 
organizations are going on at every hour of every day along our 
borders. Alien smuggling, terrorist smuggling, narcotics 
trafficking and weapons smuggling are not random acts of 
aggression but, rather, well planned, well executed, well 
funded ventures. The networks that support these smugglers are 
international in scope and rival our own security agencies in 
sophistication.
    Smuggling takes its toll throughout the country in ways 
that might surprise most people. Elkhart County law enforcement 
officials in my district recently took down two operations that 
produced fake green cards, and in Fort Wayne, my hometown, yet 
another fake green card operation was taken down. At a wedding 
reception Saturday night, a doctor told me that every single 
doctor in his practice has had their Social Security Number 
stolen, resulting in financial hardship and legal hassles.
    Yet another person at the same table told me their identity 
had been stolen. Four different people had their Social 
Security Number. Most of this is being used to produce fake 
IDs. This is a national network in scope, along with the 
coyotes who plane in, who arrange the vans, who move them 
through the different States, who then bring them into our 
States, who provide the networking for the jobs. These are 
massive networks. The public expects us to take action.
    Congress, of course, needs to do its part. For example, we 
need to enact tougher laws to prosecute the human traffickers 
along the borders, whose agents are often called coyotes, and 
these networks that go there. It is one thing to pick on an 
individual worker. It is another to say, ``who are these huge 
networks that are bringing in hundreds of thousands of illegal 
people funded often by drugs and other contraband?''
    But I also believe the Department needs to get its own 
house in order. Organizing the numerous agencies that were put 
in DHS is a difficult task. But in some cases the Department 
not only hasn't improved coordination and efficiency, it has 
actually made them worse. In fact, your Department's lack of 
organization has an impact on the entire Federal Government. 
The most glaring example of this is a current division between 
Customs and Border Protection [CBP] and Immigrations and 
Customs Enforcement [ICE]. Congress put the old INS and Customs 
Service in DHS back in 2002. The Department then decided to 
break these agencies apart and split the border inspectors and 
the patrol agents away from the investigators.
    I have met lots of inspectors and investigators at the 
border in every single southwest border State and almost every 
single northern State, and I can't remember a single one of 
them who believed that this is working. To the contrary, it is 
roundly criticized wherever I go. The Department has broken 
down the old working relationships between cops on the beat and 
the detectives without putting new ones in place.
    In addition, the Department has created one agency 
completely focused on the physical border, CBP, and another one 
physically cutoff from the border, ICE. Theoretically, they are 
supposed to cooperate, but, as a practical matter, they are 
doing it less so than they used to. It means that no 
operational agency at DHS is looking holistically at border 
security. It has also left several agencies which are 
essentially, particularly in the narcotics war, that worked 
well both at the border and on the border, like Customs Air and 
Marine, and the Shadow Wolves Native American Customs Patrol 
officers in Arizona, without any logical place because they do 
both things.
    The fact is that the different narcotics trafficking 
groups, human trafficking groups, contraband trafficking, 
terrorists do not work in isolation. In fact, the reason they 
don't cross anymore at San Ysidro as much in El Paso, the large 
groups are going in between. We don't hold them anyway. So 
unless they have another type of crime, we don't detain them 
more than just a few hours; we send them right back. So the 
only ones that are working through are parts of large 
organizations. And what I have been told is that if there are 
20 or more people, they can't afford to delay, because we do a 
fairly good job of catching them the first time and then 
sending them back.
    But if you are moving a group of 20 to 50, then it becomes 
inconvenient, because we get 2 here and 2 there. And if they 
want to move them in a group, they are now saturating Arizona 
and Texas. And a picket fence isn't going to do this. They are 
working behind the border, passed the border. You have people 
in your department working on Colombia, you have them working 
inside, and you don't have a logical place to do it if you 
don't merge the two things.
    Meanwhile, this lack of organization has been reflected in 
the lack of coordination. Here are some questions I hope you 
will address, if not directly today, then in writing back: Are 
you at least considering merging the enforcement components of 
CBP and ICE? What specific steps are you taking to improve the 
coordination and cooperation on intelligence and information 
sharing within the Department? The stove-piping has gotten 
worse, not better, and it is less coordinated than it was 
before.
    Do you support the House-passed legislation that moved the 
Shadow Wolves to ICE and will you expand the program to include 
other Native American reservations along the northern border? 
Because this is one of the most effective, sensitive types of 
things that has worked, and it is being disbanded, in effect, 
by making them a picket fence. Fourth, are you going to 
dedicate specific funds to the Office of Counter-Narcotics 
Enforcement to allow it to carry out the coordination and 
oversight responsibilities that Congress gave it? The 
administration continues to try to zero it out and not provide 
any actual dollars and, instead, just detailed employees.
    Thank you for coming here, and I look forward to working 
with you in the future, both here and on the Homeland Security.
    Chairman Tom Davis. Thank you.
    Members' statements, without objection, will be put in the 
record today.
    I recognize you now, Secretary Chertoff. Again, it is an 
honor to have you here. For the record, I think you are doing a 
great job, but I think this review is the appropriate thing 
coming in there, and we are honored by your presence.

 STATEMENT OF MICHAEL CHERTOFF, SECRETARY, U.S. DEPARTMENT OF 
                       HOMELAND SECURITY

    Secretary Chertoff. Thank you, Mr. Chairman, and thank you, 
Ranking Member Waxman. I actually have a full statement for the 
record, which I respectfully request be included. I am just 
going to make a few brief points before I make myself available 
for questions.
    I appreciate the opportunity to make my first appearance 
before this committee to talk about where I see us going at the 
Department of Homeland Security. As has been observed by the 
chairman, 2 years into the establishment of the Department, I 
have initiated what we are calling a second stage review to 
identify where we have been, where we are headed, and what 
course corrections we need to make.
    Now, this process, of course, builds on the very fine work 
done by my predecessor, Governor Ridge, and his Deputy, Admiral 
Jim Loy. They had the enormous challenge of launching the first 
stage of the Department, as someone observed, the largest 
reorganization of departments in the Government since 1947. So 
we now have a chance, 2 years into the process, to look back 
and see where we can make some improvements.
    My basic philosophy is this: our structures and our 
programs have to be outcome-oriented, not the reverse. We don't 
drive the mission and the outcome by the structure; we drive 
the structure and operation by the mission and the outcome. So 
the second stage review is designed to take a close look at the 
mission, see how we can achieve our goals, where we have gaps, 
and what we can do to bridge between where we are and where we 
need to be.
    The philosophy of risk management is the template for our 
decisions, so the Review is examining nearly every area of the 
Department to identify ways in which we can better manage risk 
in terms of threat, vulnerability, and consequence. This will 
help make sure that we have a coherent set of priorities about 
how we deal with homeland security. And, of course, Congress 
can help in this by making sure that, in the distribution of 
funds and other activities, we are driven by risk management as 
our principle template.
    Now, I am very pleased to say the first phase of this 
Review, which entailed an overarching effort to gather 
information on the policies, operations, and organizations, was 
completed ahead of schedule. One of the things I wanted to do 
was to get us in the habit of setting deadlines and meeting 
deadlines. I set a deadline for the gathering of information of 
May 31st, and I am pleased to say it was beaten by 1 day, which 
I thought was an important message.
    Now, I am beginning the process, over the next month, of 
sitting down with the various action teams and discussing the 
specifics of what they have found and what they are going to be 
recommending we do to move forward. I anticipate that I will 
begin to be able to discuss the first set of recommendations 
that we are going to have based on this Review in approximately 
a month.
    Our objective is to develop a model agency for the 21st 
century that supports a unified national effort to secure 
America. I am well aware of the fact that the Department was 
not created simply to assemble 22 agencies in a big tent. It 
was created to enable the agencies to operate in a unified and 
coordinated fashion.
    So, as the chairman observed, what we need to do is 
integrate intelligence policy and operations across the 
Department so that each component is directed from a 
Department-wide perspective with a clear focus on the outcomes 
we need to attain. That means we have to eliminate bureaucratic 
stovepipes and we have to learn to share information. And part 
of that, of course, is the technical process we have underway 
of deploying IT systems to allow, for example, for complete 
email and network consolidation.
    Within the management arena, we are making important 
strides, although we have more to do, in the area of functional 
integration, procurement, and human capital. And through the 
management directorate of the Department, we are developing 
leadership and guidance on our integration efforts. And as the 
chairman observed, we were recently praised by the GAO in terms 
of the progress we have made on our functional integration 
efforts, and we view that as a spur to continue to complete 
this task.
    In specific areas such as procurement, we have seen marked 
improvement. After consolidating acquisition support throughout 
areas of the Department, we are achieving more effective and 
efficient acquisition of resources. But we are still not there 
and we still need to do more.
    I remain committed to ensuring the credibility of the 
procurement process and for developing strategies to enhance a 
Department-wide driven procurement process.
    One thing I want to observe, since I think the Inspector 
General was mentioned, actually, before I was confirmed, I 
identified as one of the things I wanted to do upon my arrival 
was to use the IG as a better management tool to identify for 
us what we need to do to adopt the best practices in 
acquisition and procurement across the government, both from an 
ethics standpoint and from and operational standpoint.
    And within a matter of a few weeks of being on, I met with 
the IG, I tasked him with carrying this out. He has come back 
to me and we have begun discussion. I have had several meetings 
with the Inspector General and I have been personally 
interested and have given my personal stamp on the effort to 
make sure that we are bringing our practices in line with the 
best thinking on procurement ethics and procurement strategies.
    Now, as we make important changes in the Department, we 
have to continue to support our employees and to provide the 
necessary tools to recognize their accomplishments and build on 
their successes. Through MaxHR, the new human resource 
management system, we will foster a culture of integrity, 
accountability, and effectiveness that enables each employee to 
achieve mission goals and be rewarded for excellence. A major 
goal of the system is to unite managers and employees to ensure 
that all are coordinating to achieve and accomplish the DHS 
mission. We also want to be competitive with the private sector 
in terms of attracting the best talent.
    And one of the things we want to build with this new 
performance-based system is a reward for operating in joint and 
coordinated fashion. Just as in the military, part of the 
process of advancing a career requires you to work with other 
components and to learn how to operate in a joint environment. 
We have to build that same effort and that same set of 
incentives into our backbone if we are to complete the process 
of integrating our Department.
    I appreciate the support of this committee and I look 
forward to working with you on these and other matters as we 
seek to achieve our shared goal of a safe and secure homeland. 
Thank you, and I would be delighted to answer questions.
    [The prepared statement of Secretary Chertoff follows:]

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    Chairman Tom Davis. Mr. Secretary, thank you very much for 
that statement. I am going to start the questioning on our side 
with Members who didn't make opening statements.
    Mr. Gutknecht, you are recognized for 5 minutes.
    Mr. Gutknecht. Thank you, Mr. Chairman.
    And thank you, Mr. Chertoff, for coming. I echo the 
comments of some of my colleagues on both sides of the aisle as 
they made their opening statements.
    One of my concerns really has been, and continues to be, 
that when we started this Department, we were told that by 
consolidating these 22-odd different departments into one 
department, that we would eliminate duplication and, at the end 
of it all, it would actually be more efficient and may not be 
any more expensive to run this big department.
    And I don't have the number in front of me right now, but 
as a former member of the Budget Committee, it strikes me--and 
I think I am correct that the budget actually now is more than 
double what it was when the Department was created. And when 
you combine that with some of the other stories that we hear 
daily or read regularly in the papers, I guess the real problem 
is there is developing almost a problem of confidence not only 
among the general public, but I think among Members of 
Congress, we see ourselves spending lots of money and we 
continually hear that things are not like they were supposed to 
be.
    So it seems to me that you have a very, very difficult job. 
First and foremost, I think you have to restore confidence 
among the American people that this Department is really doing 
what we thought it was going to do. And then I think, almost as 
important, you have to restore the confidence among those of us 
who, in effect, sign the checks on behalf of the American 
people that their money is being well spent. And that is not 
really a question as much as it is a comment, but I think that 
really is the mission that you have, and we wish you well.
    But I think it is important that as we go forward, that 
this committee and others get regular reports in terms of the 
kind of progress that is really being made, because, as I say 
and as our colleagues have said, we hear reports in the news 
media and from our constituents that things aren't really 
getting better, they are actually getting worse. And I will 
give you one example.
    Particularly in rural parts of America, we have real 
problems with a drug called meth, and we have meth labs where 
people are actually making this drug. But we are learning more 
and more that an awful lot of that drug is not being made in 
the United States, it is actually coming across the border from 
Mexico; and apparently it is very easy to get it across the 
border.
    And that is just one example of how we are not really 
getting the job done. We are spending an awful lot of money and 
there is a growing at least suspicion that things are not 
getting better, they are actually perhaps getting worse.
    So that is not a question so much. You may want to respond 
to it, but we do want to wish you well, because in some 
respects we all have a huge stake in making certain that this 
Department succeeds.
    Secretary Chertoff. Well, I appreciate the opportunity to 
talk about this a little bit, because I am very sensitive about 
the fact that everybody, as a citizen, has a real stake in our 
doing our job efficiently and achieving the result of bettering 
American security. We are stewards of the public fisc. We have 
to be responsible in the way we spend money. I have to say, 
frankly, a lot of the increase in the budget reflects an 
increase in the substance of what we need to protect the 
country.
    For example, in the area of the Coast Guard, we have 
requested substantial funding because we need new ships, new 
planes, new physical assets which will give us the capabilities 
to do exactly what you want us to do: intercept drugs, protect 
our ports, protect our maritime area, protect our fisheries. So 
that is an area where increases we are requesting in money are 
not about bureaucracy or about process, they are about real 
stuff that we actually deploy.
    We are also making some substantial efforts to do some 
consolidation. And I know it is a long process, it is something 
that is going to take a little while, but we came in with 22 
separate human resource agencies. We are now down to 7 offices 
servicing the 22 components; 8 payroll systems have been 
consolidated to 2; 19 financial management centers have been 
consolidated to 10. I am not saying we are at the end of the 
process, but I do think it is fair to tell the American people 
we have made some progress in that direction.
    I am acutely aware of the issue that we have at our 
borders. That is a very significant problem from a variety of 
standpoints, not only security, but because we need to assure 
the American people that if we have borders and we take them 
seriously, we are going to get control of them. And we are in 
the process now of looking at what our border strategy is.
    A couple of years in a row now we have had an Arizona 
border control initiative which has really paid off in terms of 
increased apprehensions of people and bad things coming across 
the border, and one of the lessons that we have learned from 
that is that the best way to address the problem is with a 
comprehensive combination of technology and people: better 
awareness of who is crossing, some infrastructure to block 
vehicles from coming across, and then an ability to direct the 
Border Patrol where they need to go.
    So I think, based on those lessons, we are now looking 
across the entire span of the border to see how we can most 
efficiently use technology and people to get us control.
    Chairman Tom Davis. Thank you very much.
    Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman.
    Secretary Chertoff, I want you to know that I have a lot of 
confidence in you personally, you have an excellent record, and 
I am encouraged by what you have had to say today. But I have 
always felt that one of the ways to make sure that the 
Government is functioning the way it should, every department 
is functioning the way it should, is to make appropriate 
oversight both from within the Department and from outside the 
Department; and Congress has that responsibility. There have 
been, unfortunately, a number of incidents that raised 
questions regarding whether the Department's leadership 
encourages such oversight, and I want to ask you some questions 
about these incidents.
    Last year, press accounts raised questions about the 
relationship between former Secretary Ridge and his aides and 
an outfit called Blank Rome, which is a Philadelphia law firm. 
According to these accounts, two top aides of Secretary Ridge 
left government soon after the Department was established to 
work for Blank Rome, and the Secretary himself was a close 
personal friend of the chairman of Blank Rome. Blank Rome 
reportedly lobbied DHS on behalf of 29 firms and Blank Rome 
clients have been awarded major DHS contracts.
    Well, to examine whether there was any impropriety--and I 
am not suggesting there was, but I think it ought to be looked 
at, this relationship between Blank Rome and top DHS staff--I 
joined in a letter with the ranking Democrat on the Homeland 
Security Committee in the House and we requested all the 
communications between Blank Rome and top DHS political 
appointees and staff. In a followup meeting shortly thereafter 
between my staff and my office and Representative Thompson's 
office, Bennie Thompson from Mississippi, who is the ranking 
Democrat of the Homeland Security Committee, DHS agreed to 
provide this information in several batches, the first one 
encompassing communications specifically with DHS management. 
Yet, 5 months after our request, we have yet to receive any 
information.
    I would like to know whether you would commit right now to 
providing us with copies of all communications between Blank 
Rome representatives and DHS management by the end of June 
2005.
    Secretary Chertoff. Well, first of all, let me say that I 
am not obviously personally familiar with this, nor has anybody 
brought to my attention any allegation of impropriety. In terms 
of the information, my understanding is that we had offered 
some information, and we will certainly--in fact, I was 
informed of the fact that the offer was not acted upon. I will 
certainly commit to furnishing what we offered to provide 
promptly, within a month.
    Mr. Waxman. Well, I appreciate that. That would be the 
first batch which the Department agreed to give us many months 
ago. I would also like to suggest that we get the remaining 
batches of the responsive materials by the end of July. I think 
this is a straightforward request. It was made close to half a 
year ago by us, and that ought to be sufficient time to get 
that second batch of information to us as well. Are you 
prepared to give me that commitment?
    Secretary Chertoff. Well, not knowing what the information 
is, as I say, what we have previously agreed to give we should 
certainly give. I am not in a position to tell you right now if 
there are legal or other constraints on giving other 
information. We will certainly address the request promptly and 
make available what is appropriate to be made available.
    Mr. Waxman. OK.
    On March 1, I wrote to Chairman Chris Shays as the 
committee launched an investigation into the growing use of 
secrecy, particularly with respect to non-classified 
information designations. These are rapidly proliferating, and 
these designations are called things like ``sensitive but 
unclassified,'' or ``for official use only,'' and then the 
information is not given out. An example is in February 2002, 
the Department of Homeland Security concealed the unclassified 
identity of a newly appointed ombudsman for the Transportation 
Security Administration, an official whose responsibility was 
to interact with the public.
    Well, in response to my request for this investigation, 
Chairman Shays agreed and together we sent a letter to your 
Department on March 4th. Just to be clear, this request was 
sent to you, not Secretary Ridge. Chairman Shays and I asked 
for you to provide the committee copies of reports and other 
documents that the Department issued in two forums, in a public 
version and in a what is called ``sensitive but unclassified'' 
version, that way we, as an oversight committee, could compare 
these documents and evaluate the propriety of your Department's 
redactions.
    It has now been over 3 months since this bipartisan 
request; however, we have received no response whatsoever. We 
haven't even received a letter saying you are working on this. 
Would you commit to providing this information by the end of 
this month so that we can get the information that we have 
requested?
    Secretary Chertoff. Well, I can certainly tell you we are 
working on it. Not knowing what the volume of information is or 
how difficult it is to assemble, I would be hesitant to make a 
timeframe commitment. What I can tell you is that I will ask 
that I get a report as to where we are in the process of 
responding to this and that we come back by the end of the 
month with a timeframe within which we think we can do what is 
appropriate.
    Mr. Waxman. I appreciate that. Let me just tell you what is 
involved. We had statements that were redactions that were 
given to us, and the redactions were not classified 
information, but information that was called sensitive but 
unclassified. So Members of Congress on the appropriate 
committees are now requesting that we get the original 
information that was redacted out so we can see what kind of 
information is being withheld.
    This is not national security; these are not classified 
documents. There is this new description that is being used to 
hide information, not just in your Department, but in others as 
well, where they are labeled ``sensitive but unclassified'' or 
``for official use only.'' There is no legal standing to it.
    Thank you very much, and we look forward to working with 
you.
    Chairman Tom Davis. Thank you very much.
    Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman.
    Good morning, Mr. Secretary. To what extent do you support 
the use of State and local law enforcement to supplement 
immigration enforcement activity? And do you support the repeal 
of the Memo of Understanding requirements for Federal 
immigration training and assistance to States and localities?
    Secretary Chertoff. I don't think I heard the last piece of 
the question.
    Mr. Dent. Do you support the repeal of the Memo of 
Understanding requirements for Federal immigration training and 
assistance to States and localities?
    Secretary Chertoff. Well, I will say I generally support 
the idea where States and localities want to assist we have 
under 287(g). We have the ability to have them properly trained 
in order to assist us in terms of enforcing the immigration 
laws. That is not something that we compel States and 
localities to do; some want to do it, some don't want to do it. 
They obviously need to be trained properly. So I am 
unequivocally in support of that.
    Mr. Dent. Thank you, sir. And a following question, 
according to DOJ's Inspector General, DHS officials expect to 
check approximately 800 people out of roughly 118,000 visitors 
a day who should be screened against the FBI data base. Is this 
accurate information?
    Secretary Chertoff. I have never heard that figure. I am 
not sure the context in which it has been publicized, so I 
can't really respond. I mean, we do check. Under U.S. VISIT, we 
have the capability and we actually do check everybody who 
comes in against both the IDENT data base and the relevant FBI 
data base.
    Mr. Dent. And with respect to the Real ID Act, which we 
just enacted a few months ago, the legislation establishes 
minimum standards for Federal acceptance of driver's licenses 
and State-issued identity documents, and provides for 
rulemaking through your Department to enact reforms. How are 
you taking action in this area?
    Secretary Chertoff. Within a day or so after the act was 
passed, I told my Acting General Counsel that I wanted him to 
put together for me a map about what we need to do to go 
forward in terms of implementing the necessary rules and 
regulations to make the act effective.
    Mr. Dent. OK. Finally, with respect to the so-called 
Minutemen Project, what are your thoughts about that 
organization and whether or not there should be any utilization 
by those folks through your Department?
    Secretary Chertoff. You know, it is a free country and 
people are, of course, entitled to go peacefully wherever they 
want and demonstrate or raise issues. What people cannot do, of 
course, is take the law into their own hand or interfere with 
either law enforcement authorities or, in fact, try to engage 
in self-help to interfere with people coming across the border.
    You know, we are committed to have a professional system of 
controlling our border, and that means a system that involves 
well trained people who know what the rules are, who are 
properly backed up with equipment. And our strategy is to go 
forward and find the best mix of personnel and technology to 
give us control of the border.
    Mr. Dent. Would that include the temporary placement of 
National Guard on the border until these new Border Patrol 
agents are trained?
    Secretary Chertoff. I don't know that the National Guard is 
in a position from a training standpoint or resources 
standpoint to play that role. There are issues of appropriate 
legal authorities to be exercised against people coming across 
the border, which, frankly, do require a certain amount of 
training and a certain amount of supervision, which is 
typically something we accomplish through putting Border Patrol 
agents through training and is not, as I understand it, 
typically a part of the training you get in the National Guard. 
So I would hesitate to suggest that is a solution.
    Mr. Dent. Thank you, Mr. Chairman.
    Chairman Tom Davis. The gentleman has a minute remaining. I 
know Mr. Cannon would like you to yield to him.
    Mr. Cannon. Thank you, Mr. Chairman. I do have a question.
    In the first place, welcome to your new job, Mr. Chertoff. 
I am a big fan and I know that you are going to do a great job 
there. The Federal Protective Service is a component of the 
Department of Homeland Security, and that has been transformed 
into a proactive law enforcement agency in the aftermath of 
September 11, 2001.
    I am concerned that the officers and agents of the FPS are 
not allowed to have in their possession their authorized 
weapons while off duty. I think it is vital that the FPS, like 
other Federal law enforcement officers with the same training, 
be authorized to carry their firearms while off duty and be 
available to respond to problems. I suspect you would agree 
with this, that having trained officers with the authority to 
carry weapons while off duty would increase our security. Would 
you work with me to see that we can rectify this anomaly?
    Secretary Chertoff. I will certainly work with you to see 
what the issue is and make sure we come to an appropriate 
resolution.
    Mr. Cannon. Thank you, sir. I appreciate that.
    I yield back.
    Chairman Tom Davis. Thank you.
    Mr. Clay.
    Mr. Clay. Thank you very much, Mr. Chairman.
    Thank you, Mr. Secretary, for being here. Recently, the 
Department of Homeland Security Inspector General issued yet 
another report on the poor performance of airport screeners and 
found once again that undercover agents were often able to 
smuggle weapons past TSA airport screeners at multiple airports 
around the country, including those used by the September 11th 
hijackers. Why are airport screeners continuing to demonstrate 
poor performance and, bluntly put, are our airports and 
airplanes still vulnerable?
    Secretary Chertoff. Let me begin by saying our airports and 
airplanes are safe, and the reason they are safe is because we 
use a layered strategy of protection, meaning, unlike before 
September 11, our strategy now involves several different 
layers of defense. We have the inspection when people come 
through the checkpoint at the airport; we have hardened cockpit 
doors which repel anybody who tries to get in the cockpit and 
take control of the plane; we have Federal air marshals, we 
have Federal flight deck officers who are armed. So we have a 
lot more layers of protection in place now, which I think do 
make the system safe and sound. That is not to say we don't 
always try to improve it.
    In the area of screening, a question arises whether we have 
essentially hit the limit of what we can do to reduce human 
error in the absence of deploying more advanced technology. We 
actually have more advanced technology. We are now deploying 
these air puffers which detect trace amounts of explosives at 
airports. I saw one in Los Angeles last week.
    There are back scatter machines, which would allow us 
actually to see organic compounds and explosives concealed on a 
person. Some of these issues are financial issues. Some of 
them, frankly, are making a decision to go forward. Some people 
don't like some of the technologies. I think we have to make a 
decision, if we are going to keep our airports secure, that we 
are going to have to deploy these technologies; we are going to 
have to take appropriate steps to preserve privacy; but that in 
order to move to the next level of detection, we have to start 
to make use of the one thing we have that the terrorists don't 
have, which is our ingenuity in getting technology out into the 
real world.
    Mr. Clay. Mr. Secretary, how does it work as far as the 
first persons that you see when you go in line are usually with 
the airlines or a private security company, and then you are 
transferred to TSA personnel. Has that been seamless? Has it 
been pretty trouble-free?
    Secretary Chertoff. You know, TSA has the responsibility 
for dealing with the screeners. I think, as with any other 
human system, anecdotal reporting indicates that there are 
sometimes problems. Sometimes people say the system works very 
well; sometimes people say there are slips in the seams. And 
that is why we build layers, because I think human experience 
tells us that statistically, out of every 1,000 people, you are 
going to get a small number who are going to mess up.
    What we want to do, though, as I say, is by building the 
technology in place, we want to reduce the scope of human 
error. And I have to say, in fairness to the TSA screeners--
because I was out there in Los Angeles and I have been in a 
number of airports--they actually do a phenomenal job working 
with the technology in being able to identify dangerous items 
on baggage or on people. It is not just machines, it requires 
trained people. So we have to treat that work force with 
respect.
    Mr. Clay. Let me say that since September 11 I too feel 
safer boarding an airport and feel safer in airports. But, 
hypothetically, would you say Mr. bin Laden may be sitting 
around with some of his compatriots and saying look at those 
foolish Americans, they have now spent billions on airport 
security and we will never use another airplane again as far as 
a weapon?
    Secretary Chertoff. Well, first of all, based on some of 
the successes we have had overseas in the last few years, it is 
my belief that Mr. bin Laden and his compatriots are spending a 
lot of time worrying about their own hides, which, of course, 
is part of the strategy, is to force them to worry about 
themselves. I do think you are right, we can't really just 
fight the same battle over and over again. And we are looking 
at maritime, land borders, the whole complex of issues we have 
to be concerned about.
    I do have to say, though, that the intelligence continues 
to support the idea, and has supported the idea over the last 
few years, that the terrorists still regard the airplanes as a 
significant target. And the economy of this country is so 
dependent on air transportation that we have to be careful to 
preserve that system and its integrity and public confidence in 
the system.
    Mr. Clay. I appreciate your responses. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    Mrs. Miller. Thank you, Mr. Chairman.
    Mr. Secretary, I appreciate your attendance here today. I 
am from Michigan, and I know there is a lot of consternation 
about the southern border of our Nation, but I am very 
concerned about the northern border of our State. In fact, in 
my particular district and in the region in southeast Michigan, 
I had your predecessor in and we took him on a helicopter tour, 
and I would like to invite you to do the same thing just to get 
a perspective of the kinds of dynamics that we have that have a 
lot of concern for all of us.
    The Ambassador Bridge, which is the first busiest 
commercial artery on the northern tier, is there, along with 
the tunnel to Windsor. In my district, we have the Blue Water 
Bridge, which is the third busiest commercial artery and the 
only one that allows for transit of hazardous material. We have 
the Sea and Rail Tunnel there. We have an interesting dynamic 
along the liquid border that we share with Canada. We call it 
Chemical Valley because there is a huge concentration of 
petrochemical plants along there.
    And, of course, being right on the lakes, the Great Lakes, 
which are fully one-fifth of the freshwater supply of the 
entire planet, there are a number of interesting dynamics that 
we have there. As well, we, of course, document as much as we 
can the kind of illegal immigration that is happening there, 
whether they are transiting across the infrastructure or just 
simply coming across by boat. That is happening all the time, 
in all types of weather conditions.
    And there had been some talk with the Department of 
Homeland Security about the potential of having regional 
homeland security headquarters across the Nation. In fact, we 
were very interested in pursuing that in the Midwest region 
there with your Department. I don't know where that has all 
gone. I also sit on the House Armed Services Committee. 
Obviously, we are very interested in the BRAC process.
    And part of the criteria for the BRAC process was that the 
DOD should be working with the DHS about not only national 
security, but homeland security for some of the various bases. 
And one of the bases that is in my district has some of the 
components under your umbrella. It is an Air National Guard 
base, but it has the Coast Guard, the Border Crossing, some of 
these different kinds of things.
    I am just wondering if you could fill me in on where you 
are with the concept, if you have plans to move ahead with any 
of these regional homeland security headquarters.
    Secretary Chertoff. Well, this is a matter I know that has 
been proposed and it is something that we are looking at. My 
concern is I want to be sure that whatever we do is something 
that does not add a layer of bureaucracy, but that actually 
streamlines things and flattens the organizations. So as we 
move forward we will obviously look at all different kinds of 
configurations for making sure we maximize the--we want to get 
the outcome of more regional cooperation. What the right way to 
do that is and how to organize the individual elements of the 
Department to do that is still something, frankly, that is kind 
of an open question.
    Mrs. Miller. If I could ask just one more question. As 
well, a particular dynamic that occurs on our border, because 
of a number of reasons, we have been cannibalizing nurses from 
Canada to work in our health care system, particularly in 
southeast Michigan. In fact, if you go into any of our 
hospitals, probably 25 percent of all the nurses are Canadian 
citizens.
    And there was some consternation about how they were 
transiting across with the kind of work permits that were 
required through your Department. And I think, for the most 
part, most of them are now operating under this NEXUS program. 
If you could comment on how is that working and were you aware 
about the Canadian--we actually, during September 11, had to 
stop surgeries for all practical purposes, because we couldn't 
get our nurses across the border. So it is a concern there.
    Secretary Chertoff. I can't say that I was particularly 
aware of the nurses, but I am aware of the fact that our 
economy is very interdependent with the Canadian economy. It is 
true in services, it is true in manufacturing. And a critical 
challenge for us is to have the right balance between security 
and efficiency, because if either one of those gets out of 
balance, we are really going to hurt our economy, we are going 
to hurt our country.
    So NEXUS is a terrific program, it is a program that 
basically allows us to check people and make sure they are 
essentially trusted travelers, and then let them move back and 
forth more quickly. And, frankly, that is the way forward 
across the board for this country in terms of travel in and out 
of the country and in terms of a whole series of things.
    We need to offer people the opportunity to get into a 
program where we can do a reasonable background check, get some 
biographical information, make sure they are not a threat, and 
then build them a biometric identification card that assures 
that the person holding the card is the person we have checked, 
and then let them move through the system rapidly. That gives 
us both more security and more efficiency, which is, I think, a 
win-win for everybody.
    Mrs. Miller. Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for your testimony. I have a 
couple of questions. One has to do with the personnel system. I 
note in today's Washington Post that the Pentagon is delaying 
implementation of its personnel system, very much like what was 
approved for your Department. Your Department, of course, has 
even more employees. This is a radical change, obviously, in 
the Government, a profound change. I don't envy you, having all 
you have to do, having also to deal with these--arcane is the 
only word for them--details.
    We had a witness here at one point who seemed not even to 
understand the root reason for this rather ponderous system 
that the Government has. You, of course, are not a lawyer. Due 
process comes into play here when you are talking about pay for 
performance; due process doesn't come into play when you are 
talking AT&T or whoever in the private sector. So it becomes 
really complicated. One doesn't want to build a system that is 
full of opportunities for litigation and the like.
    What is being changed, of course, is everything from pay 
for performance--and that is the real zinger if you are talking 
about a Government system where you have to show that you are 
being fair given Constitutional strictures on the Government--
but there are label disputes. Frankly, from top to bottom, the 
personnel system is being changed. The Pentagon is delaying 
major aspects, it looks like, of its plan, and I would like to 
know the status of the changes, comparable changes in your 
Department.
    Secretary Chertoff. Well, let me first identify I think the 
philosophical and practical reasons for having this new set of 
improvements in the personnel system. You know, we brought 
together legacy personnel systems that had to be integrated, 
and rather than integrate them according to the least efficient 
model, the thought was let us take the opportunity, as long as 
we have to do some integration, to integrate to the 21st 
century state-of-the-art with respect to personnel.
    We need to get high performers into the Government. We have 
jobs that need to be done now that are increasingly more 
sophisticated. We are competing with the private sector and, 
candidly, we cannot do that if we cannot offer some reasonably 
competitive rates, including pay bands and pay for performance, 
so that people who are good performers have some degree of 
confidence that they are going to be rewarded.
    At the same time, I think the cornerstone of the philosophy 
is our system has to be fair, it has to be transparent, and 
also has to be efficient. And a key piece of that is training. 
We need to make sure that as managers and supervisors get 
involved in the process of reviewing as part of this system, 
they really understand how to do it in a way that is fair, 
transparent, and efficient. And, by the way, we should be 
reviewing the reviewers. We should be making sure that the very 
fairness, transparency, and efficiency levels that they employ 
are themselves a function that is being reviewed.
    Ms. Norton. Of course, that would assume standards. This is 
the Government. That sounds like any personnel system. This 
sounds like what any manager anywhere in the United States 
would say. When you are talking about 800,000 employees going 
to pay for performance, for example, those are words.
    The real challenge for you and your Department is how do 
people make that judgment so that you are not overridden with 
litigation, grievances or complaints. And that is really my 
question. The question goes to standards and whether or not you 
believe your Department is ready to move forward, as apparently 
the Pentagon, with its civilian employees, does not.
    Secretary Chertoff. I believe we are ready to move forward. 
I think we are looking to implement the current regulations in 
August of this year and to start the new performance management 
system; not the pay piece, but the performance management in 
October. And the idea is to do this in stages to lay down 
specific metrics, the kinds of things that are going to be 
measured in terms of performance, and to train managers to do 
that so that everybody has confidence in the system.
    But in that regard I do have to make a point about a 
problem that we have. As I look at what has been done in the 
current stage of the appropriations, we have had a substantial 
cut of money, a $26 million from MaxHR and $98 million from 
management, which also is responsible. Frankly, if we want to 
have the system work well, if we want it to be fair and 
transparent and efficient, we have to pay for it. We can't 
shortchange the training; we can't shortchange putting in place 
a process that is going to be fair and efficient. And that is 
why I think it is very important to fund the system so that it 
works.
    I guess the last observation I would make is this. I think 
delay is the worst of all worlds. I lived most of my life in a 
pay for performance system in the private sector, and I think 
that it can work and it will work. I think the uncertainty 
after transition is always the hardest piece and, frankly, the 
longer we delay the transition and the more we drag it out, the 
more apprehension people are going to have and the more 
anxiety. And that is why I think we are committed to doing this 
and we should move in a disciplined but brisk manner in getting 
this implemented.
    Ms. Norton. I couldn't agree more.
    Chairman Tom Davis. The gentlelady's time has expired.
    Ms. Norton. Just to finish, I couldn't agree more. 
Grievances and complaints that go on for years and years, I 
don't see how they assist either the agency or the person. I 
must say, though, Mr. Secretary, that if a court gets 
grievances or gets cases, training will not be what the court 
will look at. The court will look at something you mentioned in 
passing that is so important, and that is the measures, what 
they were and whether the supervisor has indeed met those 
measures.
    And I just want to emphasize again--and the reason I do it 
is because we had someone before us who acted as if due process 
did not come into play with the Government. Whether you go into 
pay for performance or whether you have this old GSA system--I 
ran a Federal agency; you will not find me a fan of that 
system--that standard is not going to change if people, of 
course, sue the agency.
    And let me just finally say that I am very pleased to hear 
what you said about screeners, that we have probably reached 
the level of what you can expect of human screening, and 
instead of just beating up on screeners, we now have to face 
the fact that the next level is the technology level.
    Thank you very much.
    Chairman Tom Davis. Thank you. The gentlelady's time has 
expired.
    Mr. Turner.
    Mr. Turner. Thank you, Mr. Chairman. I appreciate your 
holding this hearing concerning the Department of Homeland 
Security.
    Mr. Secretary, I want to thank you for all of your efforts 
in the important and enormous job of keeping our country safe. 
Your dedication to that critical goal is certainly what will be 
part of our great success in keeping this country safe.
    You have already acknowledged that one of the challenges 
that you face is the area of information sharing and data 
warehousing, trying to get the various branches of the Federal 
Government and of your Department to share information and 
effectively use it. The January 2005 GAO High-Risk Series 
Report identifies appropriate and effective information sharing 
mechanisms in Homeland Security as one of the new areas of high 
risk, and when they issued this report this year, they stated, 
``As in prior GAO High-Risk Update Reports, Federal programs 
and operations are also emphasized when they are at high risk 
because of their great vulnerabilities to fraud, waste, abuse, 
and mismanagement, and are in need of transformation.''
    In looking to the processes of transforming that area, 
which is going to be so critical to our success, I wanted to 
ask you some questions of your thoughts of the issues of the 
application of commercial processes for information sharing. In 
my district we have NCR, which is one of the preeminent data 
management and terror data companies in the country. They do 
the processes for Wal-Mart and Federal Express, which are both 
known as companies that utilize information and data sharing to 
make certain that they are successful. And in talking to 
representatives of NCR, they talk about the process that they 
work with with clients, in looking to what information is 
needed and then designing systems both that produce data and 
that can manage data and effectively transmit data.
    So many times I think we are fearful when the Federal 
Government begins to look at trying to seek the acquisition of 
systems, for example, in trying to acquire a hammer, that they 
might try to redesign the hammer instead of just going and 
looking for a hammer. In this instance we know that out in the 
commercial sector are companies in the United States that have 
focused on data management that have been highly successful. 
There is both technical expertise and management expertise that 
we can tap into.
    Could you talk to us for a moment about your efforts to 
reach out to the commercial sector so that, as we look to this 
important issue that GAO has identified as high-risk, we could 
take advantage of some of the resources we already have here?
    Secretary Chertoff. As a matter of fact, this morning I met 
with CEOs from the software industry and the Business Software 
Alliance to talk generally about some of their issues, and I 
said to them I thought that we need to do a better job of 
tapping into the ingenuity of the private sector in providing 
solutions. In other words, not necessarily coming in and saying 
let us build something from scratch, which I think, as 
experience shows, has often resulted in an overpriced and 
underperforming system. And this is not just computers, it is 
across the board. But sometimes we should be a little less 
ambitious, take what already has worked and figure out how to 
adapt it to our current circumstance.
    We need to do that in this Department. We need to do it by 
completing the process of integrating our IT acquisition and 
rollout coordination, which we are in the process of doing. We 
then need to make sure that we are looking at what is out there 
in the real world as examples, as opposed to buying pie-in-the-
sky promises. We also have the challenge, of course, of having 
existing legacy systems which we can't entirely scrap, and we 
have to figure ways to bridge between those existing systems 
with platforms that will operate across them.
    The desired end stage, as you say, is an ability to have, 
like we are on the verge of having now, single email system, 
single information system, and one that has adequate screening 
and adequate security so we are not worried about penetration 
from the outside.
    Mr. Turner. Thank you. I appreciate your efforts in that 
regard, because it certainly will enhance our success to the 
extent that we go to those that are already being successful in 
these processes. Thank you.
    Chairman Tom Davis. Mrs. Maloney.
    Mrs. Maloney. Thank you, Mr. Chairman, for holding this 
incredibly important hearing.
    And welcome, Mr. Chertoff. I represent New York City, lost 
many friends and neighbors on September 11, and we certainly 
wish you well.
    But this copy that came out recently, June 6th, on U.S. 
News & World Report entitled, ``Pigging Out: How Homeland 
Security Became Washington's Biggest Porkfest,'' is not 
encouraging, to say the least. It is extremely discouraging and 
really frightening, in my opinion. Unfortunately, this is not 
the only article on this. We have seen headlines like this too 
often. This article highlighted TSA spending $500,000 for silk 
plants and artwork, and then they were purchasing sub-zero 
refrigerators at a cost of $3,000 each. And as one who 
represents what remains to be target No. 1 in America, New York 
City, I find that very troubling.
    But even more troubling is not addressing the moneys toward 
really preventing danger coming to our citizens. In this they 
talked extensively about our Nation's cargo screening strategy, 
and in it they reported, ``that nuclear specialists say some of 
the efforts suffer from misplaced priorities and rely on 
detectors so primitive that they cannot tell the difference 
between highly enriched uranium and naturally occurring 
radiation in kitty litter.''
    And on the same day that this report came out, ABC News 
reported that, ``the new drive-through detection machines being 
installed at a cost of half a billion dollars cannot detect the 
enriched uranium that many say poses the greatest threat to our 
Nation,'' and this expert says that it could leave our 
country's ports--and I represent, along with New Jersey, one of 
the biggest ports in our country--but it would leave our ports 
susceptible to terrorists smuggling nuclear weapons or material 
in one of the thousands of containers that came into the 
country every day.
    And in this report they quoted Dr. Tom Coburn, the Director 
of the National Resource Defense Council, a nuclear program, as 
saying, ``Unfortunately, we have about a half a billion dollars 
worth of kitty litter detectors that will not detect enriched 
uranium reliably.'' They further reported that in tests it 
conducted in 2002 and 2003, uranium shielded and lead easily 
passed by detection machines that were in place.
    I believe that this is totally an unacceptable situation. 
The smuggling of nuclear material, a dirty bomb or weapons of 
mass destruction, in a commercial cargo still represents 
probably one of the most important, if not the most important 
or most significant, security threat to our Nation and to our 
citizens. In fact, there was a movie out of England that showed 
what would happen if a dirty bomb exploded in England, and it 
was horrifying. And some economists estimated if one happened 
in our country, there would be well over a million casualties 
and an impact of well over $300 billion to several trillion 
dollars.
    But despite this threat, the fact is that most currently 
deployed non-intrusive inspection systems in ports were 
designed to intercept contraband, stolen vehicles, stowaways, 
and not designed to detect--which is truly our most important 
threat--dirty bombs or weapons or mass destruction. So I would 
like to go to the root of the problem. The article alleges that 
the problem is a sole source contract. That is what the article 
alleges, that is the problem.
    So based on that situation, I really would like to ask you 
how you feel about this. And specifically, Mr. Chairman, do you 
believe in best value procurement so that DHS can properly 
balance cost and technical capacity in purchasing key 
technology? Do you agree that the lowest cost is not 
necessarily the best value? Do you believe in full and fair and 
open competition for DHS procurements? Do you believe DHS 
should procure by sole source methods when there are possibly 
multiple U.S. sources available? And do you think the best 
technology should be used to detect weapons of mass destruction 
in cargoes?
    Chairman Tom Davis. The gentlelady's time has expired.
    Mrs. Maloney. And my time is up.
    Secretary Chertoff. Let me, if I may, just take a moment to 
answer. I agree that nuclear material being smuggled in is a 
very, very high priority for us, and that is one of the reasons 
the President's budget has asked for funding of about $227 
million for a domestic nuclear detection office, which would 
bring together a lot of the programs we now have to develop 
systems and technology to identify and detect and thereby 
intercept nuclear bombs or nuclear material coming into the 
country. That is a very high priority.
    I have to say this about articles like that, though. It 
strikes me you can pretty much find a self-styled expert to say 
something about everything. And I think the article overstates 
dramatically the problem that we have. The radiation detector 
monitors which we have in ports in fact do detect radiation 
quite well; they are extremely sensitive to radiation.
    There are certain inherent physical limitations as between 
different types of radioactive material--for example, plutonium 
versus highly enriched uranium--which are endemic in the 
physical substance. In other words, we don't create that 
problem, God creates the problem because that is the way the 
physics of nuclear energy works. So we do actually have a 
robust detection system.
    Second, it is misleading to say that the machines can't 
distinguish between kitty litter and other kinds of isotopes, 
because the way the system is structured is there is a capacity 
to send back to a targeting center a profile of the particular 
characteristics of what is being read on the monitor, and 
scientists sitting in the targeting center are in fact capable 
of distinguishing between kitty litter and isotopes. So that 
is, again, a misleading statement in the article.
    Finally, with respect to shielding, it is true that 
shielding can create a problem for radiation detection? What 
the article doesn't tell you, though, is that part of what you 
do in a layered protection system is you build in a detector 
that detects the presence of shielding. So that there may be 
sufficient shielding to protect the radioactive material from 
direct detection, but another detector will point out that 
there is shielding. And if I see there is shielding in a 
container, I am going to open it up and I am going to look 
inside.
    Mrs. Maloney. But, Mr. Chertoff, my question was not 
whether kitty litter could be detected or not. My question was, 
was this a sole source contract; where is the justification 
document for that contract? Do you believe----
    Chairman Tom Davis. Well, unfortunately, Mrs. Maloney, your 
time is up.
    Mrs. Maloney. Could you just answer in writing to my 
questions since my time is up?
    Chairman Tom Davis. Well, you had a 4\1/2\ minute question, 
and that made it tough for him to get everything in. So I am 
going to have to go on to the next.
    I would just say to Members everybody has been waiting 
here, and I am just trying to move this along fairly.
    Mr. Issa.
    Mr. Issa. Thank you, Mr. Chairman.
    Secretary, I have a border region in San Diego, and I have 
a unique situation that I have been working through your 
predecessor organizations for a very long time, and that is, as 
you well know--but most people in the United States don't 
know--we have border checkpoints more than 70 miles inside the 
United States. And the Border Patrol, under management after 
management and different secretaries, has always tried to 
defend these even though the Government Accountability Office 
study shows that they are hard to defend.
    It would be perfect to tell you exactly how hard to defend 
the effectiveness of these except that the Border Patrol 
systematically doesn't deliver accurate information as to where 
apprehensions are. Every time there is a study, every piece of 
released information always simply talks about regions and 
areas, when in fact there are exact points that they could say 
we apprehended them here, here, and here.
    Having said that, I want to make it very clear that I 
support the Border Patrol when they try to do things that make 
sense. In June 2004, the Temecula Border Patrol station 
conducted a series of illegal immigrant sweeps in inland areas 
in my district. During that time, they were called Mobile 
Patrol Group, made up of 12 Border Patrol agents. They 
successfully had 450 arrests in 18 days, nearly double the 
monthly average for 2003 not for 12 people, but for the whole 
station, for everybody.
    Secretary, those mobile patrols, at the orders of 
Washington, were stopped. A lot of double-talk about, well, 
they weren't officially stopped. They were stopped. The Border 
Patrol wants to conduct those, and I don't really care if it is 
a Border Patrol, it is ICE, it is the man in the moon, who it 
is. Your organization is reorganizing exactly like the Polish 
cavalry before World War II. If you continue to use horses that 
don't succeed, well, there are tanks that do succeed.
    Effective enforcement, when demonstrated in Southern 
California, is being thwarted through your Department by simply 
not allowing the Border Patrol to organize under whatever set 
of rules and guidelines you have to, or ICE, in order to go 
after illegal immigrants who otherwise would not be caught.
    I want to make it very clear that it is not about just 
catching illegals. Because if you want to catch illegals, you 
can go to any farm in my district, any hotel in my district, 
you can go anywhere you want; but, in fact, about successfully 
collecting the worst offenders.
    And to that extent, although it is not directly your 
jurisdiction, I want to make you further aware--and get your 
comments on this--the fact that the U.S. attorney in San Diego 
has refused to prosecute coyotes, no matter how many times they 
are arrested, unless they use violence or specifically endanger 
a life or are carrying drugs. And if you think that is 
appropriate or not would be my first question. Should we be 
having a zero tolerance for the coyotes even if we cannot 
effectively arrest the more than 11 million illegal immigrants 
in this country?
    Secretary Chertoff. Well, of course, it is true that the 
U.S. attorneys are not in my purview. I used to be a U.S. 
attorney, but that was many years ago and that was in a 
different part of the country. Obviously we need to focus on 
deterring people who are trafficking, starting, of course, our 
highest priority are the organizations. If we can take down the 
organizations, we get the maximum bang for the buck.
    The more deterrence we can bring to bear, the better off we 
are. I recognize that U.S. attorneys have constraints. Among 
other things, you have court constraints; there are only so 
many judges, so many courtrooms. When you charge people, you 
have to try them. So that is a numerical limit.
    As far as the particular tactic you are telling me about, 
I, frankly, don't know whether it was stopped or why it was 
stopped. What I can tell you is that----
    Mr. Issa. But are you familiar with the mobile patrols and 
the success? It was nationally covered in a fairly broad way.
    Secretary Chertoff. I think I was probably a judge when it 
was being covered, and I was focused on doing judicial things. 
But I do think that we have recently unified our command and 
control over Border Patrol across the board, the idea being 
that we don't want to have ad hoc decisions made about how 
border tactics are operated, we want to have a comprehensive 
picture, recognizing that there are different tactics that work 
on different parts of the border because of the topography. So 
we are committed to the best practices. If there is anything 
there that works well that is legal, we are going to do it.
    And I am more than happy to go back and say, look, let us 
see if this worked and it is not continuing, what else do we 
need to do; should we re-inaugurate it. There is no pride of 
authorship here. We want to do the best to maximize the effect 
we have with the resources we can bring to bear.
    Mr. Issa. I appreciate that. And if, after you have looked 
at the success of the mobile patrols out of the Temecula 
checkpoint, you would get back to my office with either your 
comments in the negative, if you don't think it worked or if 
there were serious problems, or how, on a centralized basis, 
perhaps we could begin using these kinds of techniques to 
target those who are either the most dangerous or the least 
desirable among the 11 million illegals that operate here in 
the United States today. Thank you.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    Mr. Ruppersberger.
    Mr. Ruppersberger. Mr. Secretary, first, I want to say you 
have one of the toughest jobs in Washington. But don't feel 
alone, because we all need to come together to work with you in 
our different agencies. I mean, to take 22 different agencies, 
it is tough enough getting 2 agencies together. And I think 
really what starts in anything that we do is management, and 
management at the top.
    Now, I have a letter, it is a bipartisan letter written on 
October 15, 2001, and it was to the President and it is a 
letter that I am going to give you a copy of. Basically what 
the letter says and asks, it asks what are our vulnerabilities 
as it relates to terrorism and national security, what are the 
threats, what are our priorities, and how do we link that to 
funding, and that is basically risk management. Now, what I am 
interested in is to find out where you are today or where you 
think you are today as it relates to the threats, the budget 
priority and the funding.
    Now, I have other questions--and I know that we have 5 
minutes--that I am going to submit to you and ask that you 
respond to that and maybe to the contents of this letter. But I 
think it is important. We can talk about immigration, we can 
talk about money going to the locals. There are a lot of 
things, but we are not going to be able to accomplish it. So 
let us start from a management perspective, from risk 
management, all the threats, what we are looking for as it 
relates to funding.
    Secretary Chertoff. We are 110 percent on board with the 
proposition that we have to be risk-based in funding, and that 
means we look at three characteristics: we look, first of all, 
at consequence; we look at vulnerability; we look at threat. We 
have a national preparedness plan which identifies, again, 
against that template of those three characteristics, the kinds 
of capabilities and tasks that individual localities or States 
ought to be able to carry out in order to be prepared to meet 
the risks as we have outlined them. And we are capable of 
working with computer modeling resources that we have--for 
example, at the National Sciences Laboratories--at being pretty 
specific in determining--using, again, consequence, 
vulnerability and threat--what our highest priority targets 
are, what are the things we ought to be worrying about the most 
so we can address those things first.
    That is the template that we use in terms of driving 
everything that we do. And one of the things we are undertaking 
in the second stage review is we are trying to build a way of 
looking at all the threats, vulnerabilities and consequences, 
and having accountability as part of a three dimensional matrix 
for making sure that we have in place everything we need to 
address the highest priority targets in terms of those 
characteristics.
    There is something Congress can do to help. We have to 
continue to move to a funding system that is risk-based. The 
more ability we have to apply our funding based upon risks that 
are identified through this disciplined process, the closer we 
are in giving the American public what they are entitled to 
expect, which is the maximum value for their hard-earned 
dollars.
    Mr. Ruppersberger. Based on what you just said and the 
matrix that you have, what would you say are your top five 
threats from a priority point of view? I mean, management, 
again, is about prioritizing.
    Secretary Chertoff. It is a little hard to take a matrix 
and compress it into five. I would say that among the things 
that are high priority are obviously things which could yield a 
catastrophic response, a threat which would yield a huge loss 
in human life or a huge economic impact. So we do think about, 
for example, nuclear/biological/chemical. Those are things 
which would be very significant.
    Mr. Ruppersberger. With each one that you are going to talk 
about, how much funding are you putting into these areas?
    Secretary Chertoff. Well, again, it is a little more 
granular than that, because we have, for example, in the 
nuclear area, the President has requested $227 million for a 
domestic nuclear detection office. Obviously, there are 
programs; Department of Energy is doing stuff, Department of 
Defense----
    Mr. Ruppersberger. All right, I see my yellow light is 
coming on. I want to get one more question out, and we will see 
where we can go. Two years ago Congressman Waxman and I asked 
GAO to do a risk management of Department of Homeland Security, 
especially as it related to maritime security. And, by the way, 
I think GAO has some of the top risk management people, and I 
would hope that you would use them in your second stage review 
and get information, as we do, from them, because I think it is 
a great resource.
    But getting back to the question that I asked about your 
priorities--and we are not going to have enough time to finish 
it--it is important, I think, that we pick those priorities, 
and I would like to know where they are and also where your 
priority of funding, because it is all about funding in the 
end.
    I have the letter I am going to give you, and I have other 
questions that I would like you, if you could, to get back to 
me.
    Chairman Tom Davis. OK, thank you.
    Mr. Platts.
    Mr. Platts. Thank you, Mr. Chairman.
    Mr. Secretary, I appreciate your being here, and certainly 
thank you for your many years of public service, especially now 
as head of the Department of Homeland Security. I wanted to 
touch on two specific issues that relate to the passage of the 
Department of Homeland Security Financial Accountability Act 
last October. I sponsored that legislation, and this committee 
moved it and the House and Senate passed it, and the President 
signed it into law. We worked very closely with your 
Department, prior to your being there, in drafting, amending, 
and kind of getting a consensus.
    Two parts that have not yet either been fulfilled or the 
Department is showing now, after the fact, an unwillingness to 
comply. The first is the issue of your CFO. The law says that 
within 6 months of its passage, that the President would 
nominate for Senate confirmation a new CFO or designate CFO, 
and that the current CFO could continue serving until 
confirmation occurred. That 6 months passed about 45 days or so 
ago. My understanding is you have not yet even begun 
interviewing potential nominees, and I would be interested in 
why the delay. The law says what it does; it was written in 
cooperation with the Department and the administration. What is 
the timeframe that is in place today to get this law complied 
with?
    Secretary Chertoff. Well, we have a very able CFO on board 
now and, of course, we know we need to find somebody who is 
going to ultimately be nominated for a Senate-confirmed 
position. As you know, there has been a substantial turnover in 
the Department. I mean, when I came in with the deputy, we had 
a large number of vacancies in the top management of the 
Department. We have been working very hard to fill those. Some 
of those are getting filled. I think you know the process of 
searching tends to be a cumbersome process, not the least of 
all because, first of all, these are challenging jobs, and 
sometimes the people you want for them don't necessarily want 
to give up their lucrative careers to take them, and sometimes 
because it is a cumbersome background check process.
    So we are aware of the legal requirement; we are committed 
to meeting it. We are dealing with market constraints and kind 
of practical constraints, but we are actively involved in the 
process of trying to fill the position.
    Mr. Platts. Well, I hope that the process will pick up, 
because it is something regularly in my subcommittee, when we 
talk about various agencies, that we have laws on the books and 
agencies just fail to comply with the law and there are never 
any consequences. That certainly doesn't work back home when 
citizens don't comply with the law.
    The law was agreed to by the administration, and the fact 
that we are now a month and a half past the 6-month deadline, 
so we are 7\1/2\ months past when the Department knew this was 
a requirement. And it is not simply to go through the process; 
it is because Congress has said we believe that in these 
departments it is important to have the best possible officials 
in place, and that Senate confirmation process is part of 
ensuring that.
    I certainly don't have anything bad to say about Andy 
Maner, your current CFO, but the law is as it stands and it 
needs to be complied with.
    Related to that, the same piece of legislation deals with 
internal controls. The President's management agenda, one of 
the core areas was financial management, and through the 
legislation we have sought to help strengthen your Department's 
financial management process. You inherited, I think, more than 
15 material weaknesses in the various agencies. Getting to that 
foundation is assessing your internal controls.
    The law, as passed, said in the current year 2005 you have 
to make an assertion regarding your internal controls, and in 
2006 have an audit of your internal controls. In this year's 
budget that came up to Congress from the administration, there 
was language proposing to delay the assertion 1 year and to 
delay the internal control audit 2 more years, so a total of 3 
years from the time the law was passed.
    I would like to know why you don't want to go forward with 
that and what is the Department's position today in compliance 
with the law as it stands?
    Secretary Chertoff. Let me tell you where we are. In March 
of this year the CFO established an internal control committee 
which was responsible to implement the provisions of PO 108330. 
Last month, in May, we developed an implementation guide for 
the internal control provision, working with OMB and an 
interagency committee.
    We also began executing the planning phase of 
implementation to determine what documentation we would need 
and the kind of testing that would need to be performed. And 
over the summer we plan to complete the GAO internal control 
management and evaluation tool as the assessment process to 
support the statement of assurance in fiscal year 2005.
    We have also, in the fiscal year 2006 budget, which is 
pending, requested a little over $5.2 million and five full-
time equivalents to support remediation efforts to transform 
the legacy internal control structured in an integrated control 
framework.
    So we are moving forward on this briskly. It is a 
challenge. As you point out, we have a lot of legacy agencies, 
so we have not only the challenge of meeting a new standard, 
but also bringing together and binding all the existing 
legacies. And I think we have a brisk program to move forward 
and complete what we need to do.
    Mr. Platts. Thank you, Mr. Secretary. If you could followup 
maybe in writing to the committee a timeline proposed for 
confirmation of the CFO and specifically your intent to comply 
with the law passed last year regarding the assertion for 2005 
and the internal control audit for 2006, that would very much 
be appreciated.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much, Mr. Platts.
    Mr. Porter.
    Mr. Porter. Thank you, Mr. Chairman.
    Mr. Secretary, I appreciate your being here and your depth 
of knowledge in such a short time of being in that role.
    If you look at the economies of every State in the Nation, 
each has their strengths, from ranching, farming, industrial, 
chemicals. It depends on the State. I represent the community 
of Las Vegas, NV, area, one of the major tourist destinations 
in the world, where close to 40 million a year visit a State of 
about 2 million. Of course, after September 11th we experienced 
some very, very serious downturn in our economy.
    But, more importantly, we realized at that point, more than 
ever, the importance of coordination between the Federal 
Government and the State governments. In that Nevada's No. 1 
economy is tourism, I think many times overlooked that in every 
State in the Union travel and tourism is one, two, and three in 
every State as far as their economic base, but also employment.
    I believe so much in the fact that we needed to have 
representation in the Department of Homeland Security. We 
worked, in the bill that passed last year, of course, the 
Reform Act, to create a role for your special assistant, 
Alfonzo Martinez-Fonts, who is now working closely with the 
tourism travel industry. So first let me say thank you for the 
efforts of your assistant.
    But also to reiterate the importance, as you are developing 
your new plans--I know you are creating in the Department 
possibly a Department-wide policy office--that the tourism and 
travel industry--whether it be Anaheim, Disneyland, Orlando, 
Chicago, New York, wherever in this country, New Orleans--we 
handle a lot of people, and a great mass of people, and we work 
closely with TSA and other parts of your Department.
    I want to reiterate the importance of that communication so 
we can play a major role in helping you, because security 
certainly is paramount. The community of Nevada, our hotels, 
our resort industry are state-of-the-art, the latest security, 
the latest technology, and we appreciate the efforts so far, 
but want to reiterate for the future that is important.
    So more of a comment than a question. And if I could 
followup now with a more specific question.
    As you know also, Nevada has been chosen as the site for 
high-level nuclear waste to be buried at Yucca Mountain. I 
appreciate comments today about the current uranium detection 
methods being problematic. As we are looking at homeland 
security and the possible transportation of 77,000 tons of 
nuclear waste through most every State in the Union, I would 
appreciate, one, a comment, of course, on the tourism aspect, 
but also on plans to secure our community as this waste travels 
by schools and churches and malls and parks, that we have the 
proper security in place.
    Secretary Chertoff. Let me try to address both of those 
issues. We are very sensitive about the fact that tourism and 
travel is a significant component of the economy, not just for 
the hotels, the airlines and shipping. I mean, across the board 
it has a major ripple effect. And one of the things that we are 
trying to do, as we move forward, for example, with security in 
airports and infrastructure security, is to build a system that 
actually facilitates ease of movement in travel and tourism 
while building in security.
    Now, you need both of those, because we know if there are 
security problems people are not going to want to travel. But 
we also know that if it is inconvenient and inefficient, people 
are not going to want to travel. So we try to maximize both.
    In line with that, I met, when I was in New York a month or 
so ago, with representatives of the travel and tourism 
industry, when I was overseas a couple weeks ago I met with 
overseas travel and tourism representatives, to make this 
point, to say that we want to build systems for security that 
work with the needs of our travel and tourism sectors of the 
economy, and not across purposes.
    As far as nuclear goes, we work hand-in-hand with the NRC 
and the other agencies that have the substantive expertise in 
terms of transporting and storing nuclear waste, to make sure 
that they have the benefit of our insights with respect to 
security-type issues. They often own the expertise and have 
been doing a lot of work, frankly, over a number of years, even 
before September 11, in modeling the kinds of threats there are 
to nuclear material and how you can best protect against them. 
And that is an area where we are going to continue to be 
actively involved, again, working with the NRC and the other 
responsible agencies who have direct supervision over nuclear 
material, to make sure that we are assuring safety for 
communities.
    Mr. Porter. And I appreciate two diverse questions in a 5-
minute period. But back to the tourism, I think it is important 
and imperative to note that our goal, like yours, is the 
security and the safety of these individuals. We work closely 
with TSA, and we have evolved, I think, a premier facility at 
our airport, McCarran Airport, in handling these 30-some 
million that travel through our airport. And we would like to 
offer our assistance in other areas because of our expertise. 
It is certainly economic but, more important, that we can help 
balance the security with that.
    I appreciate your comments. Thank you.
    Chairman Tom Davis. Thank you.
    Mr. Mica, followed by Mr. Duncan.
    Mr. Mica. Thank you, Mr. Chairman. I apologize; I have had 
to run in and out for another hearing across the hall, 
actually, two hearings today.
    Nice to see you, Mr. Secretary. Thank you for participating 
today and giving us sort of an update of where we are and where 
we want to go. One of the concerns that we have, and I have 
heard expressed on the floor, is the checking of cargo. They 
say that only some 6 percent of cargo is examined, either 
coming in or commercial aircraft, etc., and right now you have 
a system that is based on really going out and doing spot 
checks and using sort of intensive and costly personnel.
    Have you given any consideration to setting standards, 
looking at a system that relies more on you setting sort of the 
rules and, again, process that should be followed and checking 
of companies, as opposed to sort of a massive--it would 
probably bankrupt the system or completely slow down the 
economy or bring it to a halt if we did 100 percent cargo 
check. Are you looking at an optional approach?
    Secretary Chertoff. I think the answer is, first of all, we 
are acutely aware of the fact that we screen and then we 
inspect a percentage based on what we screen. But if we were to 
physically inspect everything, I think you are quite right, the 
system would grind to a halt. So we have to take into account a 
number of things. We have to consider the risk. You know, we 
deal with cargo that travels on passenger planes versus cargo 
that travels on cargo planes. There may be some differences in 
the way we want to handle that.
    And as a general principle I think we are always open to 
the question of are there ways we can build a process that does 
not require Federal ownership of the process, but where the 
Federal Government sets standards and checks the checkers, but 
puts the responsibility on the people who are other players in 
the process, private players, to actually make sure that they 
are keeping standards.
    Now, the devil is in the details. There may be different 
requirements in different settings. That, by the way, is a 
model we use in a lot of different areas in government. We use 
it in the securities area. I know when I was in the area of 
being a prosecutor, we had increasingly found the use of 
private sector ombudsmen or inspectors general as a way to have 
compliance in business that did not require the Federal 
Government itself to own the compliance. But we could create a 
model in which someone else would have that responsibility with 
our supervision and checking.
    So that is probably a long-winded answer to the question 
that we are open to systems that minimize cost, maximize 
efficiency, and give us the best possible protection.
    Mr. Mica. Well, the same type of approach or similar 
approach, having you set standards, say, for passenger 
screening. I believe you have already certified some companies, 
and we have five private screening companies that have worked 
very well under Federal supervision. Micro-managing all of that 
from Washington in sort of a Soviet style system has proven 
very difficult. I mean, you haven't been in office that long, 
but you will be getting requests from Members here. The lines 
are backed up at my airport. What are you going to do in 
Orlando? And I am chairman of Aviation.
    We had a request for additional screeners. It took some 6 
months to do an evaluation. Then by the time the folks got on 
board--well, they changed the numbers slightly--the situation 
had changed because of the fluctuation of schedules and 
requirements and season, conventions, all kinds of things.
    Is it possible for us to look at decentralizing the system? 
You know, we have the opt-out which I authored in the bill. And 
the major problem, too, we have with opt-out right now--and 
many airports would do it across the country if the liability 
question was satisfactorily resolved for them. Where are we on 
that?
    Secretary Chertoff. Well, as I say, we do have some pilot 
programs, I think five. We have had five opt-outs. We are 
always interested, obviously, in seeing how that approach 
compares with the current approach. As I said earlier, I 
continue to think--well, we have identified, but deploying 
existing technologies that would do a better job in terms of 
puffers and back-scatter, if we can finance that and get it out 
there, that is going to make a big difference.
    As far as the SAFETY Act goes, that is a very significant 
tool if we are going to get the private sector involved in 
carrying its share of the burden of security. And I am pleased 
to say that we have, in the, I guess, 3\1/2\ months I have been 
on the job, we have approved I think more than twice as many 
applications than had been approved during the preceding 2 
years. But I don't regard that as a mission accomplished; I 
regard that as merely a kind of a direction we have to point 
the way.
    Philosophically, my understanding of the intent to Congress 
with the SAFETY Act was not to put the DHS in the position of 
picking the best or the winner or having a competition, but 
picking technologies that were good, that added value, and then 
getting them reasonable protection under the SAFETY Act. And I 
think if we have an appropriate philosophy, we are going to see 
a much more efficient use of that process.
    Mr. Mica. Well, the high-tech proposal that we have 
offered, just in conclusion, we solicited your support because 
high tech is the answer, not only expediting checked baggage 
screening, but also passengers, and giving us better detection 
at much lower cost, as GAO had pointed out.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    Mr. Duncan.
    Mr. Duncan. Thank you very much, Mr. Chairman.
    Mr. Secretary, a couple of years ago, when the Congress 
passed the farm bill and it had the word security in it, the 
Wall Street Journal had an editorial which said that any time a 
bill had the word security in it, we should give it four times 
the scrutiny, because their point was that every department and 
agency was trying to come up with security measures so they 
could get higher funding.
    And I remember when Governor Gilmore, who chaired the 
President's Commission on Terrorism and what to do about it, in 
his final report to the President, in his letter he said we 
must resist the urge to try to seek total security, because it 
is not achievable and it will drain resources away from things 
that are attainable.
    So it seems to me that what the most difficult question 
here is how do you achieve the balance necessary? Because we 
all want to keep the country as safe as possible, and, yet, we 
are thousands of times more likely to be killed in a car wreck 
on the highways, or even more likely to be struck by lightning 
or win a lottery, than being killed by a terrorist.
    So how do you achieve that balance? What is the common 
sense approach that is necessary to do what we need to do but 
not go ridiculously overboard in that process? I have heard on 
the news and read that there are hundreds of companies now and 
thousands of ideas that have been submitted to your Department. 
Everybody has the latest product, the latest idea. I mean, this 
seems to me to be a very difficult process, but I just wanted 
to get your thoughts in response to what I have just said.
    Secretary Chertoff. My response is I agree 100 percent with 
what you just said. We should be a secure nation, but not a 
security nation; meaning our life should not just be about 
security, our life should be about our prosperity and our 
freedom. And our security is what is indispensable to preserve 
our way of life.
    I think the first thing we do is we have an honest--we are 
honest with the American people; we say exactly what you have 
said and what I have said, we are not going to protect 
everybody against every bad thing every place at every moment. 
Before September 11, apart from terrorism, there have been bad 
things that have happened; there have been train derailments, 
there have been fires, there have been things of that sort. We 
have to take reasonable precautions.
    And that is where risk management comes in. We have to 
identify those things that are truly catastrophic and we really 
have to work hard on those. And then there are things that are 
going to happen that are going to be bad, but, frankly, we are 
going to look to our State and local partners and private 
citizens to take reasonable precautions.
    As you say, every day we make judgments, we take some 
risks, because we want to be able to get in the car, go to work 
or go to the movies. So part of it is we have to make sure we 
have a very clear statement to the American people, which I 
think, by the way, they will have no trouble understanding, 
because I think they do it in their own life. We need to build 
risk management into our programs and we need to then walk the 
walk, meaning we need to make decisions that do not 
overprotect.
    And what I am happy to say is I think in some of the things 
we have been able to do since I got here, which I know about, 
we have started to make some decisions that I think are common 
sense decisions that balance risks. For example, there was an 
issue about should we remove placards, hazardous material 
placards, warning placards from railcars because there is some 
risk that might identify a target for a terrorist.
    And we balanced the risk, we said, look, it is more 
important to have first responders know what is in the car, if 
there is an accident, than it is to worry if some terrorist is 
going to read it. So we said, OK, we are going to keep the 
placards up. General aviation at Reagan. Again, we balanced 
risks against benefits, and we have, in principle, come up with 
the idea that we are going to open it up in a limited, 
controlled fashion.
    So we are now starting to make decisions in this Department 
that produce results that balance properly, and I think the 
more we do that the better off we are going to be.
    Mr. Duncan. Well, very good answer. Let me go to another 
direction very quickly. I have read several articles that we 
are most vulnerable now on cybersecurity. We have taught 
especially young people, but we are teaching almost everybody 
the worst of the computer today. And I know they can do 
miraculous things, but are you also discussing or looking into 
encouraging companies and agencies to keep old-fashioned backup 
paper systems? Or what steps are you taking to really work on 
this cybersecurity threat, which I read is extremely dangerous?
    Secretary Chertoff. Well, as I said, I met this morning 
with the Business Software Alliance, which are CEOs of a number 
of prominent companies, to talk about cybersecurity. We have 
identified that as something we need to beef up in our 
Department. Part of it is having defenses against various kinds 
of cyber attacks; part of it is physical security. You know, 
there are technologies now where you have dual authorizations; 
not only a password, but it is a thumb print. And promoting 
that kind of security and building those kinds of standards in 
what we do internally, as well as what our private sector does, 
is an important step in protecting our computer assets.
    Mr. Duncan. All right.
    Thank you very much, Mr. Chairman.
    Chairman Tom Davis. Mr. Secretary, thank you very much for 
being here. I am going to try to move quickly through my 
questions.
    The new personnel system that is being implemented, the 
House took some actions on an amendment a couple weeks ago that 
basically hurt the funding for that. Do you want to comment on 
that? It is at a critical stage in its development, and zeroing 
out those funds, has that hurt?
    Secretary Chertoff. Mr. Chairman, it is essential we have 
the funding to move the program forward. The worst possible 
world would be to have a system that we cannot properly operate 
because we haven't trained people. If nothing else, fairness to 
the people in the system requires that we fund it in a way that 
allows us to get it moving.
    Chairman Tom Davis. I talked to Mr. Menendez, whose 
amendment took the money. I don't think he was even aware that 
this was the money to implement that system. And I hope we can 
make sure in the conference that money is restored.
    Two weeks ago we did a press conference; your people were 
just excellent. We had former TSA Assistant Secretary Stone 
announcing the pending release of interim final rule reopening 
Reagan National Airport to general aviation. Do you know what 
the status of that rule is?
    Secretary Chertoff. I believe we are working on the 
technical aspects of the rule, and I hope to have it out within 
a few weeks.
    Chairman Tom Davis. Thank you very much.
    The U.S. VISIT program is absolutely critical at this 
point. What kind of plans does the Department have to generate 
stakeholder ownership, as well as a buy-in at the Department of 
State and the Department of Justice in order to have a really, 
truly integrated border management system? Also, what are the 
next major increments of the U.S. VISIT program that DHS would 
deliver, and how is it going from your perspective?
    Secretary Chertoff. Well, it has been very successful so 
far. By the way, when I was in Europe, I had unsolicited praise 
from three separate government officials in European countries 
about how Europeans like the system because it moves them much 
more efficiently. We are working to put--we have pilot programs 
with U.S. VISIT at several ports of exit, so we can get the 
exit piece of it, and we are now more efficient about being 
able to tap into both our own data base and the FBI's data base 
from a single point of contact at each of the ports of entry 
where we have deployed U.S. VISIT. We are going to continue the 
program going forward and we are going to use it as a platform 
to actually have a more robust effort to have knowledge of who 
is coming in and who is leaving our border.
    Chairman Tom Davis. Thank you.
    Switching to cybersecurity, do you see a need to have a 
senior person in the White House or OMB to coordinate 
cybersecurity policy across the Government agencies, or is this 
DHS's role, or do you think DHS should be maybe working with 
the critical infrastructure that is owned by the private sector 
and coordinating policies? I think you know what I am asking.
    Secretary Chertoff. Yes. We are looking to upgrade our 
capability in terms of doing our cybersecurity piece, and a 
large part of what we do is we network, not surprisingly, with 
the private sector, because they actually own most of the 
assets and they have a good deal of the ingenuity. So we are 
looking to, as part of our second stage review, find a way to 
further build on those relationships to give us kind of a 
comprehensive approach to dealing with cybersecurity.
    Chairman Tom Davis. Thank you.
    Let me just finally ask--there has been a considerable 
debate up here over container security and how much is actually 
inspected. Could you just give us your views in terms of how 
safe the containers are coming to this country, what other 
strategies might be pursued, how open you are to some new ideas 
in those areas?
    Secretary Chertoff. I will answer both parts of that. We 
use a layered approach now. We screen 100 percent, we inspect 
those containers that, under our screening system, are high 
risk. We are continuing to move to commence the inspection 
process at the port of departure, as opposed to the port of 
entry. We are deploying radiation detection monitors. I 
announced last week that by the end of the year the Port of Los 
Angeles, which I think is the largest in the United States for 
containers, would be fully deployed with radiation portal 
monitors by the end of the year.
    The next stage, which I think you asked about, is equally 
important. I think----
    Chairman Tom Davis. Let me just try to take that a 
different way. Let me look at an idea. For example, the SEC 
would require traded companies to have their financial affairs 
in order. But they don't actually check the books themselves; 
they have third-party auditors, certified auditors with their 
reputations on the line, accomplish that. Is there any way that 
the CBP should look at shifting that type of system where you 
could be prepared by independent third-party auditors, rather 
than having you do that? Is that a concept, do you think?
    Secretary Chertoff. Absolutely. I think a concept we look 
at is the idea, again, of using, as I said, the private 
inspectors general and modern supply chain management. 
Companies now have the ability to track their stuff at a very 
specific level. We are starting to talk about how we can tap 
into that expertise, so we don't have to own everything 
ourselves. We want to set the baseline, we want to be confident 
and assured; we don't necessarily want to operate it all as a 
government operation.
    Chairman Tom Davis. Thank you very much.
    Mr. Souder.
    Mr. Souder. Mr. Secretary, if anything anybody has watched 
is the breathtaking scope of the job that you have, and I 
wanted to raise--it is an unusual opportunity here as you are 
redoing the Department--a couple of additional questions, and I 
know we will continue to work through these both on homeland 
security and other areas.
    First, let me thank you for your efforts on the Coast 
Guard, because that is one of the classic examples of 
multitasking. If the boats go out of Alaska, the fishing 
industry and all of Alaska and the Northwest United States 
could be destroyed. If we don't have search and rescue in the 
Great Lakes, people are going to drown, and off Florida and 
elsewhere. In the Caribbean we depend on the Coast Guard for 
drug interdiction, as well as terrorist interdiction. And the 
bottom line is if you don't have more boats, these boats can't 
be in harbor, in the Caribbean, in Alaska, on the Great Lakes. 
And I appreciate your support for our boats, and we are going 
to meet more. But I appreciate your earlier comments.
    Also, I know yesterday the drug task force meeting was 
canceled. I hope you can do that. Many members have expressed 
to me--because you are the largest combined drug agency that 
there is because of the legacy Border Patrol, legacy Customs, 
Air and Marine, Shadow Wolves, Coast Guard. All those things 
are in your Department, and 30,000 people die from narcotics. 
Terrorism is a perceived and there is certainly a great 
potential threat, but every year narco-terrorists are doing 
this, and the money is very interrelated.
    Also, I have interacted with your staff on the Capitol 
airspace security question. I spent quite a bit of time with 
Chairman Rogers last night, and he is working with that. I just 
believe there needs to be better coordination. We weren't even 
out of the cloakroom and that building would have been blown 
up.
    We are dependent, here in the Capitol Building, on earlier 
warning, earlier detection, and certainty of security, because 
there is no way they can move us out of these buildings, no 
matter how hard they try, and they were yelling at all of us 
but we can't get out. And it is clear there are still arguments 
going on between the different agencies, and it isn't just a 
matter of the White House. Congress and the Supreme Court are 
equal branches, and there has to be some kind of coordinated 
security.
    Also, Congressman Reyes raised on Fox and Friends this 
morning another unusual thing related to the border, and that 
is Mexicans are immediately deported if you don't have another 
crime. At El Paso they used to have 17 times you were detained, 
but as long as you don't have another crime now, they just send 
you back to Mexico.
    But we have about 10 percent of the people who aren't 
Mexicans. When I was on the border last, there were Brazilians, 
Middle Easterners being picked up, and we don't have detention 
facilities to put them in. They are then on a deportation 
hearing up to their own recognizance. We have enough of a 
problem with people coming in with Mexican IDs and going back 
to Mexico.
    But clearly, we are going to have to have some kind of way 
to address these others who are not coming back for their 
deportation hearings. And while they may not have a criminal 
record, they certainly are potential. It is a huge 
vulnerability. And I wonder if that and one other question if 
you could address. Do you support additional detention centers 
for non-Mexicans so that we don't just release them into the 
United States?
    And then the last thing is, given the incident on the 
Canadian border last week with the murderer who killed the two 
Canadian citizens, we have a problem at these small border 
crossings. Short-term it is not our greatest problem, but the 
millennium bomber came across at a small crossing at Port 
Angeles. It was dependent on the local agent from your 
Department actually intuitively saying this person seems 
suspicious.
    And we don't have adequate blood detection equipment; we 
don't have adequate other types of things to put at all these 
small borders. But I wonder if this has done any re-evaluation. 
This guy had a bloody chain saw in his back seat and other 
guns. Is there some kind of additional type of check that this 
has made you re-evaluate, like a bloody chainsaw rule or 
something?
    Secretary Chertoff. Those are a lot of questions. I think 
they break into two parts. Let me try to answer them both.
    We are very mindful of the issue of people other than 
Mexicans across the southern border. One approach which we have 
expanded is expedited removal, which allows us to remove them 
more quickly. There is now additional funding in the budget for 
more beds. Clearly, the ability to detain--you know, we detain 
those who have criminal records. The ability to expand and 
detain others, particularly those who are flight risks, is 
important.
    We also are looking at alternative ways of ensuring that if 
we release people, we can get them back, which is bracelets or 
monitoring and supervision. So those are our approaches that we 
are working on now to see if we can have a better ability to 
make sure people don't just get released into the population 
and never return.
    On the issue of the report on the Canadian citizen, I don't 
want to get too specific. I will say that, as with the Rissom 
case, our best weapon in many cases is still good old-
fashioned, well trained intuition. Even with the machinery, 
even with the high tech, you have to read it, and that requires 
training. And I am continually impressed by the phenomenal job 
that our folks do at the border and at the airports in picking 
up on the cues that you need to know something.
    I think in this particular case, in fairness, there was not 
a failure to identify that there was an issue. My understanding 
is that the local Border Patrol folks questioned the person, 
seized the weapons, checked relentlessly to see if there were 
any outstanding warrants or paper or charges.
    At the end of the day, though, a U.S. citizen is entitled 
to return to the country, and we cannot hold people without a 
legal basis. And I think in that particular case, whatever the 
ultimate disposition of the case is, there was no legal basis 
on which to hold this person. So it was not a failure of 
investigation or failure of the process, it was kind of an 
inherent limitation of our system of law.
    Mr. Souder. Is there an automatic check with the RCMP?
    Secretary Chertoff. I don't know if there is an automatic 
check, but my understanding is they checked with every 
conceivable--in every way they could think of to see if there 
was paper out. I think they caught onto the fact that there was 
something to ask about. That is my understanding; that is what 
I have been told.
    Mr. Souder. Thank you.
    Mr. Shays [presiding]. I thank the gentleman.
    Mr. Secretary, you have a reputation that says that you 
think strategicly, that you are organized, that you are 
demanding. I think those are some very important 
characteristics, and we appreciate the job you are doing and we 
appreciate your coming before this committee.
    Some of your staff, when we put in the legislation on color 
coded in the authorization bill, almost seemed offended that we 
would put it in the legislation, because I think you folks are 
moving away from colors to be a little more helpful. But I just 
want to understand your attitude about how the alert system 
should work.
    Secretary Chertoff. Well, first of all, I want to be clear, 
because there is sometimes a little bit of a misunderstanding. 
The Department of Homeland Security is not on the alert system, 
it is actually an HSPD, a Presidential directive. And a number 
of agencies participate in the process of setting the alert. 
The system serves two functions----
    Mr. Shays. Let me just say parenthetically, that is why we 
wanted to have some say in that by why we put it in the 
authorization bill.
    Secretary Chertoff. I think it serves two functions. One is 
we have geared in the private sector and State and local 
government a series of measures that one takes when we get up 
to orange, including certain funding mechanisms. So obviously 
we now have baked into the system a whole lot of stakeholders 
who have made their own arrangements based on the idea of 
elevating the level.
    Sometimes, as was the case last year, I think in the 
financial sector, in the New York metropolitan area, we are 
able to give some specificity to the threat. Sometimes the 
threat, although credible, is not particularly specific, and we 
have to weigh whether, under the circumstances, we should 
advise State and locals and private sector to take additional 
protective measures. That is a hard task.
    There is a public awareness dimension as well, which is 
also important but has certain different dynamics. As with 
anything else, this is a system which we have had experience 
with for 2 or 3 years. It clearly makes sense to look at it and 
see if there are improvements that should be made. Congress has 
indicated we should do that.
    We want to make sure, at the end of the day, we can 
preserve both elements, we can have a system that works for our 
stakeholders operationally and also a system that is not overly 
alarming to the public, gives them reasonable insight into what 
is going on in the world around them, but does not place a 
burden on them or impede the living of their daily lives.
    Mr. Shays. Well, let me just share with you that I think 
our legislation clearly wants you to be geographic when you can 
be, to be economic sector specific when you can be, and it 
wants us to tell the public what it means, in other words, what 
actions they might take.
    And I can tell you a few years ago, just close to the New 
Year's Eve, we knew that we were looking for radioactive 
material; we knew we were looking in five cities. And I will 
tell you every staff member who had that briefing made sure 
they took specific action and didn't go in specific places. And 
it seemed outrageous to me that the people who knew what the 
threat was took one action and the people in general, who 
didn't, had no sense of what action they should have taken.
    Secretary Chertoff. Well, you know, we do try, and 
obviously want to continue to try, to be as specific as to 
sector or as to geography as we can be. You know, the issue of 
what we can tell people, we are obviously always constrained by 
sources and methods, and we have to be careful sometimes not to 
create a panic. I mean, often we get information that is very--
you really have a doubt and you have to balance whether it is 
sufficiently definite that you want to put out a warning, 
particularly if it is going to result in people taking dramatic 
activity that could have real unintended consequences.
    The last piece you raise is kind of a moral issue. You have 
more insight into threats than the average person, and we often 
struggle with the fact that we cannot take steps on our own 
behalf that we would not warn other people about. That is kind 
of a personal moral issue we have to deal with. But we clearly 
want to convey as much information as we can consistent with 
not overly alarming people and consistent with the quality of 
the intelligence and the preservation of sources and methods.
    Mr. Shays. It is clearly a tradeoff. But I will tell you if 
you know that a site is dangerous, at least parents should--and 
it is a public place--at least parents should have the 
recognition that if they go there, they take a chance. And 
maybe they want to go but not bring their kids. There are 
things that I think the public has a right to know, and I hope 
that the Department will move more in that direction than the 
other direction.
    I know you want to leave. Let me just quickly ask you about 
the cargo issue. And the cargo issue is, frankly, we don't 
check cargo on passenger aircraft. That is the bottom line. And 
I hope we refrain from saying we check it, because we have 
known cargo.
    It strikes me that Congress has been reluctant to even put 
a deadline on this. We did it for baggage, we did it for 
luggage under the belly of an aircraft. Why shouldn't we be 
expecting from you that you should tell us this is what we can 
do by this period of time and this is what we can do by this 
period, and this is what we can do by this?
    Secretary Chertoff. One of the things I asked when we set 
out the second stage review is specifically this question. I 
said we need to develop a plan to determine how we are going to 
handle the issue of cargo on passenger planes and cargo on 
cargo planes. It has to be a system that works in a way that 
does not destroy the cargo industry, because it makes it 
impossible to ship things because it takes too long.
    And it has to assure us reasonable security. Whether the 
approach is the one suggested by Chairman Mica or whether it is 
another approach, I do agree this is one of the things we need 
to have an answer in really the short term, and I expect one of 
the things that will emerge from the second stage review will 
be a plan and a set of recommendations about how to go forward 
to address this very important issue.
    Mr. Shays. OK.
    I know that you just have one question. The Secretary 
wanted to leave by 12 noon, so if it could be a quick one.
    Mr. Ruppersberger. Sure.
    I was a former county executive during September 11, and 
one of the bigger issues is the standards of getting money and 
resources to first responders to State and local, and then 
holding them accountable for their performance. As you know, 
there has been some lack of accountability, a lot of money that 
has been wasted. And I just want to throw it out as far as 
where we are with respect to the standards as it relates to 
getting resources, money to the first responders, and then the 
issue of what is going for what purpose and then holding them 
accountable for performing it?
    Secretary Chertoff. We have a set of national preparedness 
goals which breaks down basically all the things you need to be 
prepared to do across the spectrum, from prevention through 
response, for first responders, and below each of the 
categories are some very specific things that every particular 
region or area needs to have. We don't give design, we give 
performance.
    You know, we recognize there are differences geographically 
and in terms of communities. That is the template we are going 
to be using in terms of distributing grant money. We are going 
to be saying these are the things you need to be coming forward 
and saying I need money to do this, that, or the other thing 
under this particular goal or standard.
    That tool, when it is fully deployed, will be a tool that 
will allow us to have both intelligent application of resources 
and real accountability.
    Mr. Ruppersberger. Which includes areas, for instance, like 
Washington, Baltimore, Philadelphia, New York versus maybe 
Jackson Hole, WY.
    Secretary Chertoff. Well, there are two separate issues. 
One is how we divide among areas. And I think that we are going 
to do based on a risk-based theory. And as I said, the 
President's budget and the administration has urged that we 
move away from large guaranteed amounts per State, down to I 
think the House passed 0.25, because that gives us more money 
we can allocate.
    But, you know, we are not driven by State; we are driven by 
infrastructure, we are driven by consequence. It is not a 
question of jurisdictional lines, it is a question of what our 
analytical tools show us is the most intelligent way to spend 
money.
    Mr. Shays. Mr. Secretary, you have been generous with your 
time, and we wanted to get you out by 12. Thanks for staying a 
little later.
    We would ask that the record remain open for 10 days for 
Members' questions and any other information we need to insert 
into the record.
    Secretary Chertoff. Thank you very much.
    Mr. Shays. And we will put Mr. Ruppersberger's letter into 
the record.
    [The information referred to follows:]

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    Mr. Shays. Thank you very much, Mr. Secretary.
    This hearing is adjourned.
    [Whereupon, at 12:20 p.m., the committee was adjourned.]
    [The prepared statements of Hon. Jon C. Porter and Hon. 
Kenny Marchant and additional information submitted for the 
hearing record follow:]

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