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


 
                               H.R. 4954,
                           THE SAFE PORT ACT

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

                                HEARING

                               before the

                        SUBCOMMITTEE ON ECONOMIC
                        SECURITY, INFRASTRUCTURE
                     PROTECTION, AND CYBERSECURITY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 16, 2006

                               __________

                           Serial No. 109-69

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
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                     COMMITTEE ON HOMELAND SECURITY



                   Peter T. King, New York, Chairman

Don Young, Alaska                    Bennie G. Thompson, Mississippi
Lamar S. Smith, Texas                Loretta Sanchez, California
Curt Weldon, Pennsylvania            Edward J. Markey, Massachusetts
Christopher Shays, Connecticut       Norman D. Dicks, Washington
John Linder, Georgia                 Jane Harman, California
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Tom Davis, Virginia                  Nita M. Lowey, New York
Daniel E. Lungren, California        Eleanor Holmes Norton, District of 
Jim Gibbons, Nevada                  Columbia
Rob Simmons, Connecticut             Zoe Lofgren, California
Mike Rogers, Alabama                 Sheila Jackson-Lee, Texas
Stevan Pearce, New Mexico            Bill Pascrell, Jr., New Jersey
Katherine Harris, Florida            Donna M. Christensen, U.S. Virgin 
Bobby Jindal, Louisiana              Islands
Dave G. Reichert, Washington         Bob Etheridge, North Carolina
Michael McCaul, Texas                James R. Langevin, Rhode Island
Charlie Dent, Pennsylvania           Kendrick B. Meek, Florida
Ginny Brown-Waite, Florida

        .........................................................

   Subcommittee on Economic Security, Infrastructure Protection, and 
                             Cybersecurity



                Daniel E. Lungren, California, Chairman

Don Young, Alaska                    Loretta Sanchez, California
Lamar S. Smith, Texas                Edward J. Markey, Massachusetts
John Linder, Georgia                 Norman D. Dicks, Washington
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Mike Rogers, Alabama                 Zoe Lofgren, California
Stevan Pearce, New Mexico            Sheila Jackson-Lee, Texas
Katherine Harris, Florida            James R. Langevin, Rhode Island
Bobby Jindal, Louisiana              Bennie G. Thompson, Mississippi 
Peter T. King, New York (Ex          (Ex Officio)
Officio)

                                  (II)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Daniel E. Lungren, a Representative in Congress 
  From the State of California, and Chairman, Subcommittee on 
  Economic Security, Infrastructure Protection, and 
  Cybersecurity:
  Oral Statement.................................................     1
  Prepared Opening Statement.....................................     2
The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California, and Ranking Member, Subcommittee on 
  Economic Security, Infrastructure Protection, and Cybersecurity     3
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................     5
The Honorable Norman D. Dicks, a Representative in Congress From 
  the State of Washington........................................    41
The Honorable Jane Harman, a Representative in Congress From the 
  State of Caifornia.............................................     6
The Honorable Sheila Jackson-Lee, a Representative in Congress 
  From the State of Texas........................................    32

                               Witnesses

Mr. Jayson Ahern, Assistant Commissioner, Office of Field 
  Operations, Customs and Border Protection, Department of 
  Homeland Security:
  Oral Statement.................................................     7
  Prepared Statement.............................................     9
Captain Brian Salerno, Deputy Director, Inspections and 
  Compliance, United States Coast Guard, Department of Homeland 
  Security.......................................................    15
Mr. Eugene Pentimonti, Senior Vice President, Government 
  Relations, MAERSK Inc:
  Oral Statement.................................................    16
  Prepared Statement.............................................    19
Mr. Noel Cunningham, Principal, MARSEC Group:
  Oral Statement.................................................    21
  Prepared Statement.............................................    23


     H.R. 4954, THE SECURITY AND ACCOUNTABILITY FOR EVERY PORT ACT

                              ----------                              


                        Thursday, March 16, 2006

             U.S. House of Representatives,
                    Committee on Homeland Security,
                         Subcommittee on Economic Security,
              Infrastructure Protection, and Cybersecurity,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 12:18 p.m., in 
Room 311, Cannon House Office Building, Hon. Daniel Lungren 
[chairman of the subcommittee] presiding.
    Present: Representatives Lungren, Sanchez, Dicks, Lofgren, 
Jackson-Lee, Thompson, and Harman.
    Mr. Lungren. [Presiding.] The committee will come to order.
    We meet today to hear testimony on H.R. 4954, the Security 
and Accountability For Every Port Act, that is the SAFE Port 
Act of 2006.
    We will gather testimony from port security experts and 
industry stakeholders on what Congresswoman Harman and I, as 
well as others on this committee and subcommittee, believe to 
be a very important piece of legislation.
    This Tuesday, Ms. Harman and I, joined by 48 other members, 
including Ranking Member Sanchez, introduced the SAFE Port Act. 
As you can guess by this hearing, we are not wasting any time 
in making this legislation law. We have been working on this 
issue of port security for quite some time and are encouraged 
by the increased urgency with which the issue is now being 
discussed and considered.
    I would like to welcome and thank our witnesses, Mr. Jayson 
Ahern, the assistant commissioner for the office of field 
operations in the U.S. Customs and Border Protection; Captain 
Brian Salerno, the deputy director of inspections and 
compliance, the United States Coast Guard; Mr. Eugene 
Pentimonti, the senior vice president for government relations 
for Maersk, Inc.; and Mr. Noel Cunningham, the principal for 
the MARSEC Group and former director of operations and 
emergency management for the Port of Los Angeles.
    The Security and Accountability For Every Port, or SAFE 
Port Act, is a comprehensive proposal to strengthen the 
maritime transportation system through a layered security 
strategy that builds on already-existing initiatives to secure 
the supply chain from the point of origin to delivery in the 
United States. I believe the administration has established a 
foundation upon which we are building, but the building upon 
that foundation is urgent.
    This legislation focuses on improving security both at home 
and abroad by expanding capabilities, maximizing available 
resources, and pushing our borders outward.
    The legislation has three key ideas: first, enhancing 
security at U.S. ports by establishing a $400 million port 
security grant program with dedicated funding from custom 
duties; requiring terrorist watch list checks of all port 
employees with secure access at ports; and establishing 
additional joint operations centers and furthering the 
deployment of radiation detection equipment.
    Second, preventing threats from reaching the United States 
by authorizing and improving two Customs and Border Protection 
cornerstone security programs: the container security 
initiative and the customs trade partnership against terrorism.
    Third, tracking and protecting containers en route to the 
U.S. by improving our ability to detect high-risk containers 
through strengthening the automated targeting system; 
establishing container security standards; and supporting 
additional cargo security research and development, including 
reviving Operation Safe Commerce.
    Since September 11, the federal government has invested 
over $7 billion in port security. There is no doubt that the 
funding and programs it supported has made us safer and our 
ports stronger. However, I think no one is satisfied with the 
past actions and believe that we must do nothing else. In fact, 
we must move forward with renewed focus and energy to improve 
our ports.
    I look forward to questioning the witnesses about the 
programs and funding in place currently are working; what 
impact the legislation will have when implemented, as well as 
any recommended changes. The committee is putting this 
legislation on the fast track. Tomorrow, members of the 
subcommittee will be going to the ports of Long Beach and Los 
Angeles to review port security operations, and after the March 
recess, we intend in this subcommittee to mark up this bill.
    We have every reason to believe that the full committee 
will act with dispatch as well. So we would like your help to 
develop the best legislative proposal possible. Again, I would 
like to thank the witnesses for being here today and for the 
work that all of you have done in your respective agencies and 
companies to protect our ports.
    Now, it is my pleasure to recognize the ranking minority 
member of the subcommittee, the gentlelady from California, Ms. 
Sanchez, for any comments she may make.

     Prepared Opening Statement of the Honorable Daniel E. Lungren

    Today the Subcommittee also meets to hold a legislative hearing on 
H.R. 4954, the Security and Accountability For Every Port, or ``SAFE 
Port'' Act. We will gather testimony from port security experts and 
industry stakeholders on what myself and Congresswoman Harman believe 
to be a very important piece of legislation. This Tuesday, Ms. Harman 
and myself, joined by 48 other Members, including Ranking Member 
Sanchez, introduced the SAFE Port Act. As you can guess by this 
hearing, we are not wasting any time in making this legislation law. 
Ms. Harman and I have been working on the issue of port security for 
quite some time now, and are encouraged by the increased urgency with 
which the issue is now being addressed.

    I would like to welcome and thank our witnesses:
         Mr. Jayson Ahern, (pronounced A-hern) the Assistant 
        Commissioner for the Office of Field Operations in U.S. Customs 
        and Border Protection
         Captain Brian Salerno, the Deputy Director for 
        Inspections & Compliance in the United States Coast Guard
         Mr. Eugene Pentimonti, (pronounced pent-i-mont-e) the 
        Senior Vice President for Government Relations for Maersk 
        (pronounced Mersk) Inc
         Mr. Noel Cunningham, the Principal for the MARSEC 
        Group, and formally the Director of Operations and Emergency 
        Management for the Port of Los Angeles
    The Security and Accountability for Every Port or ``SAFE Port'' Act 
is a comprehensive proposal to strengthen the maritime transportation 
system through a layered security strategy that builds on existing 
initiatives to secure the supply chain from the point of origin to 
delivery in the United States. This legislation focuses on improving 
security, both at home and abroad, by expanding capabilities, 
maximizing available resources, and pushing our borders outward.

    The legislation has three key ideas:
    1. Enhancing Security at U.S. Ports by establishing a $400 million 
Port Security Grant Program with dedicated funding from Customs Duties, 
requiring terrorist watchlist checks of all port employees with secure 
access at ports, establishing additional joint operations centers, and 
furthering the deployment of radiation detection equipment.
    2. Preventing Threats from Reaching the U.S. by authorizing and 
improving two Customs and Border Protection cornerstone security 
programs--the Container Security Initiative (CSI) and the Customs-Trade 
Partnership Against Terrorism (C-TPAT).
    3. Tracking and Protecting Containers En Route to the U.S. by 
improving our ability to detect high-risk containers through 
strengthening the Automated Targeting System, establishing container 
security standards, and supporting additional cargo security research 
and development, including reviving Operation Safe Commerce.
    Since September 11, 2001, the Federal Government has invested over 
$7 billion in port security. There is no doubt that the funding and the 
programs it supported made America safer and her ports stronger. 
However, we can't be satisfied with past efforts and must move forward 
with renewed focus and energy to improve our ports.
    I look forward to questioning the witnesses about how the programs 
and funding in place currently are working, what impact the legislation 
will have when implemented, as well as any recommended changes. The 
Committee is putting this legislation on the fast track. Tomorrow 
Members of the Subcommittee will be going to the Ports of Long Beach 
and Los Angeles to review port security operations and after the March 
recess we intend to mark up this bill. We want your help to develop the 
best legislative proposal.
    Again, I'd like to thank the witnesses for being here today and for 
the work that you have each done in your respective agencies and 
companies to protect our ports.
    I will now recognize the Ranking Member, Ms. Sanchez, for any 
opening statement that she may wish to make at this time.

    Ms. Sanchez. Thank you, Mr. Chairman.
    I want to thank our witnesses for coming today to testify 
before us.
    I am pleased that we are finally looking and considering 
today the important issue of port security. Port security 
affects us every day. I tell my colleagues all day long that if 
it comes through the port, it is probably put on a train or it 
is put on a truck and it goes through all of our neighborhoods. 
So understanding what is in those containers and what could 
affect our people is a very, very important issue. The safety, 
checking these and having a secure trail of where they have 
been is very, very important to us.
    It is also very important from an economic standpoint. I 
remember a couple of years ago during Christmas when we had the 
shutdown at the L.A.-Long Beach ports. It cost us almost $2 
billion a day, and it wasn't just the California area. A 
factory in Alabama that does just-in-time and is waiting for 
parts to construct automobiles will have to layoff its people 
for the week if the pieces don't come. So it is very, very 
important from an economic standpoint.
    And despite that, I don't think we have done very much from 
the federal level to help secure the United States ports. I 
know that many of our local ports, because they are locally 
owned either by the city of Long Beach or the city of New York 
or what have you, have been not only putting up the first plans 
and methods of trying to secure the ports, but also their own 
money. So I think it is very important that we have this 
discussion.
    Many of us have been working on this issue for many years. 
I personally have introduced three separate bills on the issue 
of port security over the last 2 years, and this committee 
actually passed what was really the blueprint for this bill 
that we are going to be discussing today. Unfortunately, it 
didn't get taken up by the Senate, but now it has. It is coming 
back, and so now we are going to, I hope, Mr. Chairman, pass a 
good bill.
    I look forward to hearing from our witnesses. I am 
particularly very interested in your thoughts on the customs 
trade partnership against terrorism, or C-TPAT. I think that it 
is a very valuable program, but I am concerned that the Customs 
Border Protection is granting substantial benefits such as 
decreases in the targeted risk, to the 63 percent of the C-TPAT 
members that haven't been validated yet. I am concerned that 
this administration has been unwilling to request the resources 
for CBP to complete the validations quickly and thoroughly.
    Moreover, as time passes and supply chain technology 
develops, it may be more difficult for CBP to conduct follow-up 
validations that may be necessary to ensure that C-TPAT members 
continue to employ top-of-the-line security procedures.
    While you are here today, I would also like to hear what 
you are doing to get the transportation worker identification 
card implemented. It is an extremely valuable tool that will 
increase security at facilities nationwide. Last week, I added 
an amendment to the chairman's TSA reorganization bill to set 
hard deadlines of June 1 of this year and June 1 of 2007 for 
the release of the regulations and the implementation of this 
identification card.
    I am also very interested about an issue that many haven't 
thought about, and this is the whole issue of independent 
truckers or the truckers that actually come into the port 
system. I certainly have seen some of these truckers waiting 4, 
5, or 6 hours to get into the ports. I also understand that 
many of them, we don't have background checks for many of them. 
So this could be one of the weak links happening at our ports.
    Some of them have had to declare bankruptcy because it is 
very difficult to make ends meet when you are trucking and the 
rates are low and you are waiting in line and you are not 
getting through and you are not hauling. You are not making 
money if you are not hauling. Many of them, I have a feeling, 
at least in the California area, may be undocumented.
    So we have to really consider that these people are getting 
into our port system. Now, one of the issues that this bill 
might do is to say that there are secure areas and people 
without the proper background checks would not be allowed in 
those areas. But I think any area of our port system is subject 
to problems with respect to somebody who might want to slow 
down from an economic standpoint or create havoc from a 
terrorist standpoint. So I would really like to talk about the 
trucks or at least bring that up as an issue, Mr. Chairman.
    I am pleased to be a cosponsor of the SAFE Port Act we will 
be discussing today, and which our committee, as you said, Mr. 
Chairman, will be marking up. I look forward to talking about 
the specific provisions of that bill and about the issues I 
just mentioned here.
    I thank you for your participation in this important 
hearing, and I yield back.
    Mr. Lungren. I thank the gentlelady for her comments.
    It was my intent at this point in time to yield to the 
chairman of the full committee for a statement, but the last 
time I saw the chairman he was wearing a green tie and 
surrounded by people named O'Hearn, Murphy, O'Connell. But I 
think he is going to try and get here after he settles with 
those folks.
    So the chair will now recognize the ranking minority member 
of the full committee, the gentleman from Mississippi, Mr. 
Thompson, for any statement he may have.
    Mr. Thompson. Thank you, Mr. Chairman. I hope our chairman 
didn't have something in the cup that was green, too.
    [Laughter.]
    So he may or may not be here, but I am sure he will be 
here.
    Thank you again for the opportunity to give my comments. I 
would like to applaud Congresswoman Harman and Chairman Lungren 
for this important piece of legislation. I would also like to 
give the ranking member of the subcommittee, Congresswoman 
Sanchez, who has sort of been out front on the port issues for 
quite a while, her support for this effort also.
    It is unfortunate that this issue was crystallized with the 
Dubai port incident. I think we all want to make our ports 
safe, but we have to do it systematically and not knee-jerk. So 
this act is the beginning of trying to make some of that 
happen.
    I would like to say, too, Mr. Chairman, that we have enough 
history from both the IG and GAO who talk about the critical 
port security gaps that we have here in this country. So this 
legislation and other legislation is going to be absolutely 
necessary if we are to make our ports safe. The public will 
demand it. I think they will say procrastination has gone on 
long enough. If we have the best minds available identifying 
what we need to do, we need to get on with it. At some point, 
we have to do that.
    I look forward to the testimony, not only from the Coast 
Guard and CPB, what they have to add to this piece of 
legislation, but Mr. Chairman, I want to make the ports safe. 
We have men and women who work every day on them. We have a lot 
of cargo that comes in, and we absolutely cannot accept second 
best. We have to have the best system available, and I look 
forward to the testimony.
    Thank you.
    Mr. Lungren. I thank the gentleman for his statement.
    Without objection, the chair recognizes Ms. Harman--
although not a member of the subcommittee, a member of the full 
committee--for any comments she may make and for participation 
in the hearing today.
    Ms. Harman. Thank you, Mr. Chairman, and thank you, Ranking 
Member Sanchez and Ranking Member Thompson, for your generous 
remarks.
    I am very happy to sit in on this subcommittee hearing to 
speak for a bill that I believe will become law. It is hard to 
say something like that in this Congress, but I actually think 
we have a live one here. The notion that this bill was 
introduced on Tuesday, the day of the birth of my first 
granddaughter, and will be the subject of hearings today, and 
is tentatively going to be marked up at the end of this month, 
is I would say a legislative miracle.
    The other piece of the good news story is that a very 
similar bill has been introduced on a bipartisan basis on the 
Senate side by Senators Patty Murray, Susan Collins, Joe 
Lieberman and Norm Coleman. And that bill will be the subject 
of hearings in April, and also is expected to move. So it is a 
silver lining from Dubai ports issue that Congress has now 
focused on this, but many of us, as Ms. Sanchez said, have been 
focused on this for a very, very long time.
    As this bill moves, I hope that the best ideas that the 
House has had in a variety of bills will be incorporated and we 
will do our best job to come up with a strategy and adequate 
funding for true port security.
    I want to welcome particularly, if I might, one of the 
witnesses, one of my all-time favorites. He has a different 
hair style now, but Noel Cunningham did an extraordinary job in 
his role as director of operations and emergency management of 
the Port of Los Angeles.
    He and others, I would salute particularly two groups that 
I think have had the major role for making the ports of L.A. 
and Long Beach much safer than they were before 9/11. One of 
those groups is not here. The Coast Guard has played a 
magnificent role in pulling all of us in government together, 
but the other group that I would like to salute, and they are 
here in force, is the ILWU, a union of patriots who operate the 
cranes and do other things that are essential at our ports.
    Some astute, or maybe it was the same one, but astute crane 
operators noticed at the Port of L.A. fairly recently human 
beings getting out of a container that had just been downloaded 
from a ship. The bills of lading said ``clothing,'' but 
obviously the contents were, in this case, immigrant stowaways 
coming here to seek a better life. Those contents could have 
been terrorists or could have been the components for a 
radiological bomb, and that is what this committee worries 
about, all of us do.
    And that is why a strategy, which this bill proposes, to 
authorize the two big programs that check whether bad stuff is 
being on-loaded at foreign ports and to fully fund other 
operations that will make certain that we push our borders out 
and we know absolutely what is arriving at our ports, is 
essential.
    I would just like to say one more thing. I have personally 
talked to Michael Chertoff, the secretary of homeland security, 
about this bill. I have urged him to support the concepts in 
this bill. I think it would be very helpful if we had DHS on 
board at the earliest time, and if DHS was part of shaping this 
into the best possible legislation. After all, Secretary 
Chertoff is a systems thinker. He knows that port security is 
the Achilles heel of our transportation security approach 
because it is so underfunded.
    And I really think, Mr. Chairman, with the help of all the 
members of the committee, especially Ms. Sanchez, that we can 
shape this into something that will be the right answer for the 
right problem at the right time.
    I am very pleased to be part of this hearing. Thank you 
very much.
    Mr. Lungren. Thank you, Ms. Harman.
    Obviously, under the rules, any member of the committee may 
submit an opening statement for the record. We are pleased to 
have this distinguished group of witnesses before us today on 
this important topic. Let me just remind you that your entire 
written statements will appear in the record.
    The chair recognizes Mr. Jay Ahern for 5 minutes to testify 
as our leadoff witness.

 STATEMENT OF JAYSON AHERN, ASSISTANT COMMISSIONER, OFFICE OF 
     FIELD OPERATIONS, CUSTOMS AND BORDER PROTECTION, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Ahern. Thank you very much, Chairman Lungren and other 
members of the committee here today.
    My name is Jay Ahern. I am the assistant commissioner for 
field operations within Customs and Border Protection. I am 
also very pleased to be here with my colleague Captain Salerno 
from the Coast Guard, as well as our partners from the private 
sector here today, to talk about the security of our country 
and specifically maritime cargo security.
    Mr. Chairman, I specifically want to also commend you and 
your hard-working staff for bringing visibility to the cargo 
and port security issue long before the recent attention given 
to this issue through the Dubai Port World issue, and other 
members of the panel as well. I also am very appreciative of 
the strong support of CBP's efforts to secure the global supply 
chain in America's ports.
    Certainly, it is known that Customs and Border Protection's 
priority mission is homeland security. As America's frontline 
border agency, CBP is charged with the extraordinarily 
important mission of keeping terrorists and terrorist weapons 
out of our country. Securing America's seaports and the global 
security of the cargo system continues to be a work in 
progress.
    I can say to you that our nation's 322 ports of entry in 
the global supply chain are far safer today than they were 
before the terrorist attacks of September 11. Since 9/11, our 
nation has made great strides toward securing America's 
borders, protecting trade and travel, and ensuring the vitality 
of our economy.
    Customs and Border Protection, along with other government 
agencies, along with our private sector and international 
partners, have instituted unprecedented programs to secure our 
seaports and the cargo moving into those seaports. We are 
pleased to see that many elements of our cargo security 
strategy are contained in the SAFE Port Act.
    It is also important to note that as I talk about our five 
interrelated elements of our strategy that none of our programs 
existed before 9/11. And also before 9/11, four separate 
agencies in three different departments of government were 
responsible for protecting our borders. Today, the personnel 
and the functions from all border agencies have been unified 
into one border agency within one department and government.
    The very existence of Customs and Border Protection makes 
us vastly better able to protect our nation from external 
threats. Shortly after 9/11, the United States Customs, now 
Customs and Border Protection, developed a layered defense 
strategy to secure the movement of cargo, without stifling 
legitimate trade and travel so important to the economy of this 
country. That strategy is built on five interrelated 
initiatives that extend our zone of security beyond our 
physical borders. We did not want our ports of entry to be the 
first time we had an opportunity to engage with a sea container 
coming into this country.
    The first is advance information of who and what is headed 
to the United States from abroad. That is the 24-hour Trade Act 
rules that require advance electronic information on all cargo, 
100 percent of that cargo being shipped to the United States. 
The second element is taking that information and putting it 
through the automated targeting system housed at the National 
Targeting Center just outside of Washington, D.C.
    We use that information and we put it through targeting 
rules based on strategic intelligence to assess risk for 
terrorism on every cargo shipment headed to the United States. 
The National Targeting Center is staffed with representatives 
from Customs and Border Protection, Immigration and Customs 
Enforcement, the FBI, the Coast Guard, as well as many other 
federal agencies.
    We continue to work to improve our targeting capabilities 
by enhancing integration of intelligence into our targeting 
efforts and continue to evaluate the data elements we are 
currently looking for targeting purposes, and I am glad to see 
that this act also addresses additional targeting elements.
    Third is the use of cutting-edge technology. When cargo 
arrives at our seaports, CBP uses large-scale X-ray systems, as 
well as radiation detection devices to screen the containers. 
At our nation's seaports today, we have 190 radiation portal 
monitors and 59 large-scale X-ray systems. Before 9/11, there 
were no radiation portal monitors at our seaports and only 60 
large-scale X-ray systems at all of our seaports throughout the 
country.
    A fourth initiative involves partnering with other 
countries through the container security initiative, or CSI, to 
screen high-risk containers before they are loaded onboard 
vessels for the United States. We are currently now operational 
in 43 of the largest ports in the world.
    On March 8, we opened the most recent one in Port Salalah, 
Oman. These ports handle 74 percent of the cargo containers 
coming into the United States. Before 9/11, Customs and Border 
Protection did not have any officers stationed at foreign 
ports. By the end of 2006, we expect to have officers stationed 
at an additional seven ports, which would then account for 80 
percent of the cargo coming into the United States.
    Finally, our fifth initiative involves partnering with the 
private sector through the customs trade partnership against 
terrorism, known as C-TPAT. Today's C-TPAT has nearly 5,800 
certified members from the private sector, including most of 
the largest U.S. importers who are working to increase supply 
chain security from foreign loading docks to the U.S. port of 
arrival. More than 10,000 companies have applied to become C-
TPAT members and through C-TPAT, CPB reviews the security 
practices of companies shipping goods to the United States, as 
well as companies providing services to those shippers.
    All these elements we need to continue to improve, and we 
are continuing to focus on that on a daily basis. But when you 
take these elements together, these five initiatives and put 
them in an interrelated strategy and extend our zone of 
security beyond our nation's borders, we believe we are 
providing the country greater protection than we did certainly 
prior to 9/11. As I mentioned before, none of these elements 
existed before 9/11.
    In conclusion, we certainly know that America's borders and 
the security of those borders is an ongoing and long-term 
effort. I am very proud of the men and women who work for 
Customs and Border Protection and within the Department of 
Homeland Security to secure those ports every day. I am proud 
of what we have done as a nation and have accomplished in a 
relatively short time to make America safer, and particularly 
our seaports more secure, but certainly more needs to be done.
    I will be happy to take any questions when it is my time. 
Thank you.
    [The statement of Mr. Ahern follows:]

          Combined Prepared Statements of Jayson P. Ahern and

                         Captain Brian Salerno

I. Introduction and Overview
    Chairman Lungren, Ranking Member Sanchez, Members of the 
Subcommittee, it is a privilege for the U.S. Coast Guard and U.S. 
Customs and Border Protection (CBP) to appear before you today to 
discuss the Department of Homeland Security's programs that are 
fundamental to securing our nation's ports, and maintaining the 
economic viability of the Marine Transportation System.
    CBP, as the guardian of the Nation's borders, safeguards the 
homeland--foremost, by protecting the American public against 
terrorists and the instruments of terror; while at the same time, 
enforcing the laws of the United States and fostering the Nation's 
economic security through lawful travel and trade. Contributing to all 
this is CBP's time-honored duty of apprehending individuals attempting 
to enter the United States illegally, stemming the flow of illegal 
drugs and other contraband, protecting our agricultural and economic 
interests from harmful pests and diseases, protecting American 
businesses from theft of their intellectual property, regulating and 
facilitating international trade, collecting import duties, and 
enforcing U.S. trade laws. In FY 2005, CBP processed almost 29 million 
trade entries, collected $31.4 billion in revenue, seized 2 million 
pounds of narcotics, processed 431 million pedestrians and passengers, 
121 million privately owned vehicles, and processed and cleared 25.3 
million sea, rail and truck containers. We cannot protect against the 
entry of terrorists and the instruments of terror without performing 
all missions.
    The Coast Guard is the Federal agency in charge of maritime 
security in our ports and waterways. The Coast Guard works very closely 
with other agencies to pursue a collective strategy of ``layered 
security.'' Protective measures are implemented overseas within the 
global trade environment, others are implemented closer to our shores 
and then still other actions are taken within the U.S. ports 
themselves. In the overseas arena, the Coast Guard and CBP work 
together to identify security gaps in foreign ports through our 
International Port Security Program, which helps CBP position its 
resources appropriately to most effectively verify high risk cargo 
prior to loading onboard a ship bound for the U.S. Additionally, the 
Coast Guard has actively supported CBP on international delegations to 
develop international standards for supply chain security. The Coast 
Guard and CBP have also established mechanisms for CBP to obtain the 
cargo and crew information from the Coast Guard's electronic Advance 
Notice of Arrival system. This allows both agencies to conduct vessel 
screening and targeting operations for high risk vessels bound for the 
U.S. thereby increasing the layers of protection associated with these 
vessels before they reach our shores. The Coast Guard and CBP have 
exchanged liaison officers at CBP's National Targeting Center and at 
the Coast Guard's Intelligence Coordination Center to facilitate 
information sharing and operational response coordination when high 
risk cargo, vessels or crew are identified.
    There are numerous other coordination initiatives underway that 
support cargo security.
    The Coast Guard and CBP are working together both on program 
management and to plan for operational issues associated with 
``Operation Safe Commerce'' project, the DHS container seal regulation 
project, and both national and local level operational coordination 
issues to target vessels and respond to threats, among others.
    The concept of ``layers of security'' is complex, involving 
multiple types of activities to create a network of interdependent, 
overlapping and purposely redundant checkpoints designed to reduce 
vulnerabilities, as well as detect, deter and defeat threats. It 
entails developing security measures that cover the various components 
of the maritime transportation system, including people, 
infrastructure, conveyances and information systems. These security 
measures span distances geographically--from foreign ports of 
embarkation, through transit zones, to U.S. ports of entry and beyond--
and involve the different modes of transportation that feed the global 
supply chain; and are implemented by various commercial, regulatory, 
law enforcement, intelligence, diplomatic and military entities. A 
significant challenge to constructing integrated layers of security is 
the fact that many of the layers are the responsibility of different 
agencies. Integrating these disparate maritime security layers involves 
not only unity of effort, shared responsibility, partnership, and 
mutual support, but requires an agency with significant maritime 
security responsibilities to act as a coordinator for the purposes of 
integrating the government's efforts to provide layered security.
    We must perform all missions without stifling the flow of 
legitimate trade and travel that is so important to our nation's 
economy. We have ``twin goals:'' Building more secure and more 
efficient borders.

II. Meeting Our Twin Goals: Building More Secure and More Efficient     
Borders
    The Coast Guard works in concert with CBP to align respective 
agency roles and responsibilities regarding international trade. When 
cargo is moved on the waterborne leg of a trade route, the Coast Guard 
has oversight of the cargo's care and carriage on the vessels and 
within the port facility. The Coast Guard also oversees the training 
and identity verification of professional mariners who are transporting 
the cargo. CBP has authority over the cargo contents and container 
standards. Using the information provided through the Coast Guard's 96-
hour notice of arrival rule and CBP's 24-Hour cargo loading rule, the 
Coast Guard and CBP act to control vessels (and their cargoes) that 
pose an unacceptable risk to our ports. As a further improvement, the 
trade community can file required passenger and crew information via an 
electronic notice of arrival and departure system. This streamlines the 
process for industry and improves our ability to apply targeting and 
selectivity methods. With Coast Guard officers posted at the NTC, we 
continuously improve agency coordination and our collective ability to 
quickly take appropriate action when notified of a cargo of interest.
    As the single, unified border agency of the United States, CBP's 
missions are extraordinarily important to the protection of America and 
the American people. In the aftermath of the terrorist attacks of 
September 11th, CBP has developed initiatives to meet our twin goals of 
improving security and facilitating the flow of legitimate trade and 
travel. Our homeland strategy to secure and facilitate cargo moving to 
the United States is a layered defense approach built upon interrelated 
initiatives. They are: the 24-Hour and Trade Act rules, the Automated 
Targeting System (ATS), housed in CBP's National Targeting Center, the 
use of non-intrusive inspection equipment and radiation detection 
portal monitors, the Container Security Initiative (CSI), and the 
Customs-Trade Partnership Against Terrorism (C-TPAT).
    Our remarks will focus primarily on how these complimentary layers 
enhance seaport security, and protect the nation.

    Vessel Security
    There are approximately 11,000 U.S. vessels that that require 
vessel security plans (6,200 inspected vessels and 4,800 un-inspected 
vessels). The Coast Guard received, reviewed and approved all domestic 
vessel security plans.
    Since July 2004 the Coast Guard has conducted 16,000 foreign flag 
vessel boardings for security compliance with the International Ship 
and Port Security (ISPS) Code. These boardings were conducted either 
offshore or in port depending on the risk assessment completed prior to 
each vessel arrival in U.S port. From those 16,000 boardings the Coast 
Guard has imposed 143 detentions, expulsions or denials of entry for 
vessels that failed to comply with international security requirements.
    In addition the Coast Guard has established a process to identify 
and target High Interest Vessels. This process has resulted in 3,400 at 
sea security boardings and 1,500 positive vessel control escorts since 
2004 to ensure these vessels cannot be used as weapons of mass effect.

    Advance Electronic Information
    As a result of the 24-Hour rule and the Trade Act, CBP requires 
advance electronic information on all cargo shipments coming to the 
United States by land, air, and sea, so that we know who and what is 
coming before it arrives in the United States. 24-Hour Advanced Cargo 
Rule, requiring all sea carriers, with the exception of bulk carriers 
and approved break-bulk cargo, to provide proper cargo descriptions and 
valid consignee addresses 24 hours before cargo is loaded at the 
foreign port for shipment to the United States. However, bulk carriers 
are not exempt from all advance electronic information requirements--
they are required to transmit cargo information 24 hours prior to 
arrival in the U.S. for voyages that exceed 24 hours sailing time from 
the foreign port of loading, or transmit at the time of departure to 
the U.S. for voyages less than 24 hours sailing time to the U.S. from 
the foreign port of loading. Failure to meet the 24-Hour Advanced Cargo 
Rule results in a ``do not load'' message and other penalties. This 
program gives CBP greater awareness of what is being loaded onto ships 
bound for the United States and the advance information enables CBP to 
evaluate the terrorist risk from sea containers on 100% of shipments.
    In addition, the Coast Guard has taken multiple steps to enhance 
awareness in the maritime domain. One major step was the publication of 
the 96-hour Advanced Notice of Arrival regulations which requires 
vessels to provide detailed information to the Coast Guard 96-hours 
before a vessel arrives at a U.S. port from foreign ports. This 
regulation provides sufficient time to vet the crew, passengers, cargo 
and vessel information of all vessels prior to entering the U.S. from 
foreign ports By merging CBP and CG vessel and people information 
requirements into the electronic notice of arrival and departure, the 
reporting burden on the maritime industry will be reduced. Because the 
system was made available to the public on January 31, 2005, it 
afforded vessel owners and operators the time to become familiar with 
the electronic notice of arrival and departure, and consequently have 
an easier time complying with CBPs APIS regulation which mandated the 
use of this system by June 6, 2005, as the approved method for 
submission in accordance with the APIS regulation.

    Automated Targeting System
    The Automated Targeting System, which is used by National Targeting 
Center and field targeting units in the United States and overseas, is 
essential to our ability to target high-risk cargo and passengers 
entering the United States. ATS is the system through which we process 
advance manifest and passenger information to detect anomalies and 
``red flags,'' and determine which passengers and cargo are ``high 
risk,'' and should be scrutinized at the port of entry, or in some 
cases, overseas.
    ATS is a flexible, constantly evolving system that integrates 
enforcement and commercial databases. ATS analyzes electronic data 
related to individual shipments prior to arrival and ranks them in 
order of risk based on the application of algorithms and rules. The 
scores are divided into thresholds associated with further action by 
CBP, such as document review and inspection.
    The National Targeting Center, working closely with the Coast 
Guard, also vets and risk scores all cargo and cruise-ship passengers 
and crew prior to arrival. This ensures that DHS has full port security 
awareness for international maritime activity.

    Container Security Initiative (CSI) and Customs-Trade Partnership 
Against Terrorism (C-TPAT): Extending our Zone of Security Outward_
Partnering with Other Countries
    Every day, approximately 31,000 seagoing containers arrive at our 
nation's seaports equating to nearly 11.3 million a year. About 90% of 
the world's manufactured goods move by container, much of it stacked 
many stories high on huge transport ships. Each year, two hundred 
million cargo containers are transported between the world's seaports, 
constituting the most critical component of global trade.
    All trading nations depend on containerized shipping. Of all 
incoming trade to the United States, nearly half arrives by ship, and 
much of that is in sea containers. Other countries are even more 
dependent on sea container traffic, such as the U.K., Japan and 
Singapore.
    The fact is that, today, the greatest threat we face to global 
maritime security is the potential for terrorists to use the 
international maritime system to smuggle terrorist weapons--or even 
terrorist operatives--into a targeted country.
    If even a single container were to be exploited by terrorists, the 
disruption to trade and national economies would be enormous. In May 
2002, the Brookings Institution estimated that costs associated with 
United States port closures from a detonated terrorist weapon could 
amount to $1 trillion from the resulting economic slump and changes in 
our ability to trade.
    Clearly, the risk to international maritime cargo demands a robust 
security strategy that can identify, prevent and deter threats, at the 
earliest point in the international supply chain, before arrival at the 
seaports of the targeted country. We must have a cohesive national 
cargo security strategy that better protects us against the threat 
posed by global terrorism without choking off the flow of legitimate 
trade, so important to our economic security, to our economy, and, to 
the global economy.
    Our nation developed a cargo security strategy that addresses cargo 
moving from areas outside of the United States to our ports of entry. 
Our strategy focuses on stopping any shipment by terrorists before it 
reaches the United States, and only as a last resort, when it arrives 
at a port of entry.
    The Container Security Initiative (CSI) and the Customs-Trade 
Partnership Against Terrorism (C-TPAT) initiatives bolster port 
security. The CSI initiative proposes a security regime to ensure that 
all containers posing a potential risk for terrorism are identified and 
inspected at foreign ports before they are placed on vessels destined 
for the United States. CBP continues to station multidisciplinary teams 
of U.S. officers from both CBP and Immigration and Customs Enforcement 
to work together with our host foreign government counterparts to 
develop additional investigative leads related to the terrorist threat 
to cargo destined to the United States.
    Through CSI, CBP works with host government Customs Services to 
examine high-risk maritime containerized cargo at foreign seaports, 
before they are loaded on board vessels destined for the United States. 
CSI is currently operational at 43 foreign ports. By the end of 2006, 
we expect that 50 ports, covering 82% of maritime containerized cargo 
shipped to the U.S., and by the end of 2007, we expect to be 
operational in 58 ports covering 85% of maritime containerized cargo 
destined to the United States.
    As directed by MTSA, the International Port Security Program has 
begun visiting foreign countries to assess the effectiveness of anti-
terrorism measures in foreign ports.
    To date, 45 countries have been assessed; 40 have been found to be 
in substantial compliance with the International Ship and Port Facility 
Security (ISPS) Code. These 45 countries are responsible for over 80% 
of the vessel arrivals to the United States. The five countries that 
are not in substantial compliance have been or will soon be notified to 
take corrective actions or risk being placed on a Port Security 
Advisory and have Conditions of Entry imposed on vessels arriving from 
their ports.
    The Coast Guard is on track to assess approximately 36 countries 
per year, with a goal of visiting all of our maritime trading partners 
within four years
    Through C-TPAT, CBP establishes voluntary best security practices 
for all parts of the supply chain, making it more difficult for a 
terrorist or terrorist sympathizer to introduce a weapon into a 
container being sent by a legitimate party to the United States. C-TPAT 
covers a wide variety of security practices, from fences and lighting 
to requiring that member companies conduct background checks on their 
employees, maintain current employee lists, and require that employees 
display proper identification.
    C-TPAT's criteria also address physical access controls, facility 
security, information technology security, container security, security 
awareness and training, personnel screening, and important business 
partner requirements. These business partner requirements oblige C-TPAT 
members to conduct business with other C-TPAT members who have 
committed to the same enhanced security requirements established by the 
C-TPAT program.
    The C-TPAT program has created a public-private and international 
partnership with nearly 5,800 businesses (over 10,000 have applied), 
including most of the largest U.S. importers. Forth-five percent of all 
merchandise imported into the United States is done so by C-TPAT member 
importers. C-TPAT, CBP and partner companies are working together to 
improve baseline security standards for supply chain and container 
security. CBP reviews the security practices of not only the company 
shipping the goods, but also the companies that provided them with any 
services.
    The validation process employed by CBP demonstrates and confirms 
the effectiveness, efficiency and accuracy of a C-TPAT certified 
member's supply chain security. At present, the C-TPAT program has 
completed validations on 27 percent (1,545 validations completed) of 
the certified membership, up from 8 percent (403 validations completed) 
a year ago. Additionally, validations are in progress on another 39 
percent (2,262 in progress) of certified members, and these validations 
will be completed throughout 2006, bringing the total percentage of 
certified members to 65 percent by years' end. In 2007, the C-TPAT 
program validations will continue. And we will have validated 100 
percent by the end of CY 2007.
    Additionally, CBP has moved to tighten minimum-security criteria 
for membership in this voluntary program. Working closely with the 
trade community and key stakeholders, CBP has developed and implemented 
baseline security standards for member importers, sea carriers, and 
highway carriers. CBP will complete this process by the end of CY 2006, 
defining the minimum-security criteria for the remaining enrollment 
sectors--air carriers, rail carriers, brokers, freight forwarders, and 
foreign manufacturers.
    The Coast Guard supports several DHS initiatives such as Operation 
Safe Commerce (OSC), the Container Security Initiative (CSI) and the 
Customs-Trade Partnership against Terrorism (C-TPAT) to ensure mutual 
policies, programs and initiatives are complementary and cover the 
entire supply chain. The CSI and C-TPAT are programs that are designed 
to extend supply chain security improvements to overseas ports and 
further along the international supply chain.

        Non-Intrusive Inspection Equipment and Radiation Detection 
        Portals:
    CBP also uses cutting-edge technology, including large-scale X-ray 
and gamma ray machines and radiation detection devices to screen cargo. 
Presently, CBP operates over 680 radiation portal monitors at our 
nation's ports, including 181 radiation portal monitors at seaports 
allowing us to scan 37 percent of arriving international cargo, and 
that number will continue to grow through the remainder of this year 
and 2007. CBP also utilizes over 170 large-scale non-intrusive 
inspection devices to examine cargo and has issued 12,400 hand-held 
radiation detection devices to its CBP officers.
    Further, the DHS Domestic Nuclear Detection Office's (DNDO) FY 2007 
budget request of nearly $536 million, a 70% increase from FY 2006, 
includes $157 million that will allow for the acquisition and 
deployment of nearly 300 current and next-generation radiation 
detection systems at our ports of entry. These funds, and funds 
provided in FY 2005 and FY 2006, will allow for the deployment of 621 
RMPs to our Nation's top seaports, which will allow us to screen 
approximately 98 percent inbound containers by December 2007. These 
systems will be deployed and operated by CBP. In addition, DNDO's FY 
2007 budget also includes $30.3 million for the development of enhanced 
cargo radiography screening systems for our ports of entry. These 
enhanced screening efforts will compliment the many information-based 
programs CBP already has in place for enhanced port security.
    In addition to increased screening efforts at our own ports of 
entry for radioactive and nuclear materials, the Department fully 
endorses the concept of increased active and passive detection at 
foreign ports of departure. The systems DNDO is acquiring and 
developing can also be used by foreign ports with a CSI presence, as 
well as the Department of Energy's Megaports initiative. We must 
continue to stress the need for increased screening at foreign ports of 
departure while at the same time having a robust screening effort at 
our own ports of entry.

    Port Security Grant Program and the Coast Guard
    The Port Security Grant Program is administered by the Office of 
Grants & Training (OG&T) in the Preparedness Directorate of DHS. The 
Coast Guard continues to plays an active role in the Port Security 
Grant Program, as it has in the first five rounds, and participates in 
the development of program guidance, conducts the field review process 
and is a member of the national review panel.
    In round five of the Port Security Grant Program, $142 million was 
awarded for 132 projects. The current program has been improved 
substantially by using a risk-based formula to ensure that the projects 
funded provide the greatest risk reduction at the most critical ports. 
This same risk based formula will be used for round six in 2006.

    Transportation Worker Identification Credential (TWIC)
    The TWIC program, which will satisfy the requirements in MTSA under 
46 U.S.C. Sec. 47105, will ensure that only properly cleared and 
authorized personnel could gain access to secure areas of the Nation's 
transportation system.
    The goals of the TWIC program are to:
 Develop a common, secure biometric credential and standards 
that are interoperable across transportation modes and compatible with 
existing independent access control systems;
 Establish processes to verify the identity of each TWIC 
applicant, complete a security threat assessment on the identified 
applicant, and positively link the issued credential to that applicant; 
and
 Quickly revoke card holder privileges for individuals who are 
issued a TWIC but are subsequently determined to pose a threat after 
issuance of their credentials, and immediately remove lost, stolen, or 
compromised cards from the system.
    Encompassed within the TWIC program are requirements established by 
the Maritime Transportation Security Act of 2002 to prevent 
unaccompanied individuals from entering a secure area of a vessel or 
facility unless the individual holds a transportation security card. 
Additionally, the Act requires that all holders of Merchant Mariner 
Credentials obtain a TWIC. With MTSA as their guide, the Coast Guard 
and TSA have worked closely to develop the maritime component of TWIC 
and are currently preparing a joint Notice of Proposed Rulemaking 
(NPRM).
    The Coast Guard is working very closely with the TSA to assist in 
the implementation of this new credentialing program. The Coast Guard 
is supportive of this regulatory effort. We will do everything within 
our ability to assist TSA in the development of this rulemaking and 
ensure that the TWIC and Merchant Mariner Credentialing initiatives are 
complementary in order to minimize the burden on mariners in the 
future.

    Post TSI Coordination
    National Response Options Matrix
    The National Response Options Matrix (NROM) is intended to aid 
crisis action decision making at the national level, immediately 
following a maritime transportation security incident (TSI). It does 
not apply to the port experiencing the TSI, however. The NROM's goal is 
to provide senior leadership with immediate pre-planned short-term 
security options to prevent further attacks and protect the marine 
transportation system, maritime critical infrastructure and key assets 
(MCI/KA), and high density population centers, following a maritime 
TSI. NROM is a ``Quick Reaction Card'' decision aid for use by senior 
leadership to direct a possible Coast Guard wide security posture that 
may significantly impact maritime industry, change the maritime 
security (MARSEC) level, and perhaps affect/involve other DHS agencies 
or departments. These options may include changes in MARSEC level (for 
Coast Guard forces and maritime industry), potential change(s) in Coast 
Guard force protection condition (FPCON), or other risk mitigation 
options on a national level, regionally, or by specific ports. NROM has 
scenario-based mitigation options that were designed to build upon and 
strengthen existing measures, surge resources as necessary, control or 
restrict certain port activity, and only if necessary, close ports. 
NROM could also be useful in evaluating the Coast Guard's response, if 
any, to U. S. or world-wide terrorist incidents outside of the maritime 
environment.
    If a maritime TSI should occur in one of our ports, the local 
responders (Federal Maritime Security Coordinator (Coast Guard Sector 
or Captain of the Port), other Federal agencies, state and local 
authorities, and partners in industry) will immediately react with 
prevention, protection, mitigation, response, and recovery activities 
in that port and region. The premise of NROM is to have pre-planned 
security options that would be put in place in other ports throughout 
the country to prevent and protect against further attacks. The NROM is 
reflected in our planning for post-incident maritime infrastructure 
recovery activities under the National Strategy for Maritime Security 
that was approved by the President last year.
    NROM answers the question, ``What is being done in the other ports 
to prevent further attacks, protect maritime infrastructure and 
population centers, while facilitating the continued flow of commerce 
and legitimate use of the maritime environment.'' Currently, the Coast 
Guard is working with CBP to incorporate CBP's response/recovery 
measures, making it a joint-agency decision matrix document. We have 
also developed an electronic NROM to improve the visibility of the 
product and help facilitate its use.

III. Conclusion
    In summary, as noted already, the Coast Guard, CBP, industry 
partners, and many other Federal, state and local agencies work hand in 
hand to screen cargo, the vessels that transport the cargo and the 
facilities that load and discharge cargo to mitigate the risk to the 
Marine Transportation System. All containers and vessels that CBP and 
the Coast Guard determine to be of risk are examined using a variety of 
technologies, either at the foreign port, at sea, or upon arrival into 
the U.S.
    Mr. Chairman, Members of the Subcommittee, we have briefly 
addressed DHS's critical initiatives today that will help us protect 
America against terrorists and the instruments of terror, while at the 
same time enforcing the laws of the United States and fostering the 
Nation's economic security through lawful travel and trade. We realize 
there is more to do, and with the continued support of the President, 
and the Congress, DHS will succeed in meeting the challenges posed by 
the ongoing terrorist threat and the need to facilitate ever-increasing 
numbers of legitimate shipments and travelers.

    Mr. Lungren. Thank you very much, Mr. Ahern.
    And now the chair would recognize Captain Brian Salerno.

 STATEMENT OF BRIAN SALERNO, DEPUTY DIRECTOR, INSPECTIONS AND 
   COMPLIANCE, UNITED STATES COAST GUARD, U.S. DEPARTMENT OF 
                       HOMELAND SECURITY

    Captain Salerno. Good morning, Mr. Chairman, Representative 
Sanchez, members of the subcommittee.
    I am Captain Brian Salerno, deputy director of inspections 
and compliance within the Coast Guard's office of the assistant 
commandant for prevention. It is a pleasure to be here and 
represent the Coast Guard, together with our colleague, 
Assistant Commission Ahern, to discuss some of the Department 
of Homeland Security's programs that are fundamental to 
securing our nation's ports and maintaining the economic 
viability of the marine transportation system.
    As the federal agency responsible for maritime security in 
our nation's ports and waterways, we work very closely with 
other agencies to pursue our collective strategy of layered 
defense. By that, I mean a strategy that incorporates a suite 
of protective measures, some of which are conducted overseas, 
others of which are carried out on ships that are due to arrive 
off our shores, and ultimately with measures that are 
undertaken in U.S. ports themselves. I would like to take just 
a minute or two to put that into context.
    The Coast Guard has a program established under the 
Maritime Transportation Security Act, commonly referred to as 
MTSA, to visit foreign ports and assess the degree to which 
they are complying with the security measures established by 
the International Ship and Port Facility Security Code, which 
is also commonly referred to as ISPFSC. ISPFSC is the 
international counterpart of MTSA. I am sorry about the 
acronyms.
    To date, we have visited over 45 foreign countries. When we 
find ports that do not comply with ISPFSC, vessels which call 
at those ports, and which subsequently come to the United 
States, are subject to elevated levels of security. In 
conducting these overseas visits, the Coast Guard works very 
closely with Customs and Border Protection, which also assesses 
foreign ports as part of its container security initiative. We 
exchange information on foreign ports and strive to conduct our 
respective assessments jointly.
    While in transit, ships are required to submit an advance 
notice of arrival. As you may recall, this was increased from a 
24-hour advance notice to a 96-hour advance notice following 
the 9/11 attacks. The additional time allows for more thorough 
screening of crewmembers and passengers against terrorist watch 
lists, as well as giving us the opportunity to begin an initial 
screening of the cargo on board. The information received by 
the Coast Guard is shared with Customs and Border Protection as 
part of this initial screening process.
    Based on the vessel's history and the results of our 
initial screening, the vessel may be subject to additional 
controls upon approaching our shores, or if permitted to do so, 
upon entering our ports. Since July, 2004, the Coast Guard has 
conducted approximately 16,000 foreign-flag vessel boardings. 
These were conducted either off-shore or in port, depending 
upon the risk assessment completed prior to port arrival.
    Since the ISPFSC code came into effect in July of 2004, the 
Coast Guard has imposed 143 control actions, meaning vessel 
detentions in port, expulsions from port, or denials of entry 
on vessels for failure to comply with international standards. 
Within the ports themselves, facilities are also subject to 
MTSA and ISPFSC. There are over 3,000 marine cargo facilities 
in the United States and each has been required to develop a 
security plan and submit that plan to the Coast Guard for 
approval.
    As part of its regulatory compliance responsibilities, the 
Coast Guard has required corrective actions on more than 700 
violations of the MTSA security regulations. Of these, 44 were 
severe enough to result in major control actions by the Coast 
Guard such as termination of cargo operations or closure of the 
facility until corrective measures have been taken.
    One point that I do wish to make is that although the Coast 
Guard has an overall responsibility for enforcing security 
provisions of MTSA, we do not maintain a full-time presence in 
the facilities or on foreign vessels. It is the responsibility 
of the facility and the vessel operator to carry out their 
security plan. The Coast Guard verifies that they are doing so, 
and we do this with periodic visits and examinations. 
Naturally, the Coast Guard works very hard with the private 
sector to ensure that MTSA and ISPFSC are being complied with.
    This is just a sampling of what we have done and are doing 
to preserve the security of our ports. Thank you for the 
opportunity to testify today, and I will be happy to answer any 
questions you may have when it is my time.
    Mr. Lungren. Thank you very much, Captain Salerno, for your 
testimony.
    The chair would now recognize Mr. Gene Pentimonti for his 
testimony. Thank you, sir.

    STATEMENT OF EUGENE PENTIMONTI, SENIOR VICE PRESIDENT, 
               GOVERNMENT RELATIONS, MAERSK, INC.

    Mr. Pentimonti. Thank you, Mr. Chairman and members of the 
subcommittee.
    My name is Gene Pentimonti, and I am senior vice president 
for government relations at Maersk. I appreciate the 
opportunity to appear before the subcommittee this morning to 
discuss the very important issues of maritime security and 
particularly the security and accountability for every port 
act.
    As you know, Maersk is one of the largest liner shipping 
companies in the world, serving customers all over the globe. 
With a fleet numbering more than 500 container vessels and 
about 1.4 million containers, we provide reliable and 
comprehensive ocean transportation services. Maersk, 
Incorporated is the North America agent for the parent company, 
A.P. Moller-Maersk Group's liner businesses, Maersk Line and 
Safmarine.
    The A.P. Moller-Maersk Group employs more than 70,000 
people in over 125 countries. In 1943, Maersk, Inc. was 
established as the general agent for A.P. Moller's liner 
business, Maersk Line. Here in the United States, we generate 
employment for approximately 12,000 Americans and we have 
committed to significant infrastructure investments both before 
and after 9/11.
    Maersk has been actively involved in maritime security 
issues for many years. Our commitment to security is captured 
by the watchwords for our whole activity: constant care. The 
security of our containers and the integrity of our 
transportation network are essential to our operations at 
Maersk. Marine transportation is a worldwide industry and is 
inherently intermodal. A container that is loaded at the U.S. 
seaport today can be almost anywhere in the nation within a few 
days. For many years, cargo moved fluidly through our ports and 
facilities subject to prevailing regulations, but the events of 
September 11 changed the way we think about maritime security.
    Maersk Line and all the other carriers serving the United 
States today are more concerned than ever about the security 
threats, for we know that terrorist elements might seize upon 
our transportation mode as an attack opportunity. To counter 
the potential impact on our fellow citizens, employees, port 
facilities, containers and vessels, Maersk has embarked on an 
even more aggressive enterprising campaign. We have entered 
voluntarily into a variety of U.S. government programs and 
pilot projects. For example we were the first enterprise-wide 
transportation company to be validated by the C-TPAT program.
    We also participate in the Supercarrier Initiative program, 
one of only 27 ocean carriers worldwide permitted by CBP to 
participate at this level. But we realize that it is not enough 
to make our operations within this country secure, so we have 
intensified our efforts to secure our international cargo 
network through the establishment of a comprehensive and 
vigorous global security policy and strategy that governs our 
sea and land-size operations worldwide.
    There is much in the SAFE Port Act that we at Maersk 
support and we commend you, Mr. Chairman, and other members, 
for working hard on maritime security. Maersk strongly supports 
the concept of performing the inspection functions at foreign 
ports before any container is loaded onto one of our vessels. 
We recognized that there are issues involving how this 
requirement can be implemented, and we pledge to work 
cooperatively with the U.S. and the foreign governments to 
achieve this desirable result.
    We believe there is great promise in non-intrusive 
inspection and it is important that this program be developed 
and implemented properly. In this regard, let me state that it 
is essential that sufficient funding be provided to enable CBP 
to carry out its responsibilities on foreign port inspections. 
The system requires that images from screening be reviewed by 
CBP and that terminal operators in foreign ports receive 
feedback from CBP. To accomplish this, the CBP's databases need 
to be updated and designed so that images can be matched in 
real-time with information on file from CBP. Then in cases 
where further inspections are required, the additional 
inspection can occur immediately.
    Furthermore, for inspections in foreign countries to 
succeed, it must either be accomplished through bilateral or 
multilateral negotiations between the United States and 
countries where the requirements are imposed, or we must 
provide incentives for foreign port operators to perform those 
functions. The SAFE Port Act contains provisions appropriately 
addressing high-risk containers that can be identified before 
they reach American soil.
    A very significant part of this discussion about mechanisms 
to improve maritime security is the vessel cargo manifest. This 
manifest, based on longstanding regulatory and commercial 
standards, provides a great deal of specific useful information 
on all cargo that is brought into the United States. Among 
other items, it identifies the contents of the container or the 
cargo carried on board the vessel; the identity of the shipper 
and consignee; the port of origin; and the destination within 
the United States.
    We concur strongly with the provisions in the SAFE Port Act 
that enhanced manifest information is needed. It is the 
responsibility of shippers who possess this information to 
provide it and we must protect them and their confidentiality 
and integrity of the data.
    Of course, we also must be certain that the right kind of 
information is collected, as ocean carriers do not have, nor is 
there a need to have, this type of information. We must also be 
sure that the information collected can be acted upon quickly 
and that this process does not introduce an unreasonable amount 
of friction into the flow of global trade.
    Section 8 of the SAFE Port Act addresses the issue of 
employee identification. As you know, the MTSA Act of 2002 
mandated that government develop this and issue credentials, 
including biometric identifiers and background checks, for 
transportation workers seeking unescorted access to secure 
areas within transportation facilities. We support the concept 
of the TWIC and pledge to provide information to assist in 
improving employee identification and assist in the 
implementation of the TWIC program.
    We are still in the process of examining thoroughly the 
SAFE Port Act, but please permit me to offer several general 
observations at this time. We will, of course, continue to 
discuss with you the specific issues that may arise through our 
review. A number of requirements are imposed by the SAFE Port 
Act and they must be evaluated with an eye toward reciprocity 
and their application to both imports and exports. We must 
anticipate whether our foreign trade partners will impose 
similar requirements and whether it is feasible for U.S. 
interests to comply.
    The SAFE Port Act or any other maritime security 
legislation should not duplicate or conflict with other 
requirements of law, and not add unnecessary levels of 
bureaucracy. Security is already a very complicated area and 
additional levels of paperwork and involvement by multiple 
agencies will not further the goal of making our marine 
transportation system safer.
    We support the continuation of C-TPAT and strongly believe 
the program should remain voluntary and not subject to 
governmental rulemaking. C-TPAT should be flexible enough to 
permit variations in the application to participants and not 
impose a generic set of rules on all of them.
    If a program similar to GreenLane is adopted, it must 
provide clear, direct benefits in return for implementing high 
security standards. This is essential if companies are going to 
undertake investments needed to become involved in the program 
and make the change the program requires. Today, the MTSA 
already requires the Department of Homeland Security to set 
standards for container security devices. CBP and DHS are 
testing devices against these standards. We should await the 
outcome of these tests and determine their technological 
feasibility before proceeding on this matter.
    Mr. Chairman, Maersk works hard to make our operations as 
safe as possible. This is in the national security interests of 
our country, our own commercial interests, and the interests of 
providing a safe and secure workplace for the environment of 
our employees. We at Maersk look forward to continuing 
discussing the SAFE Port Act and other security issues with 
you. I am happy to answer any questions that you may have.
    Thank you very much.
    [The statement of Mr. Pentimonti follows:]

               Prepared Statement of Eugene K. Pentimonti

    Mr. Chairman, my name is Gene Pentimonti, and I am Senior Vice 
President for Government Relations at Maersk. I appreciate the 
opportunity to appear before the Subcommittee this morning to discuss 
the very important issue of maritime security and, in particular, the 
Security and Accountability for Every (SAFE) Port Act.
    As you may know, Maersk is one of the largest liner shipping 
companies in the world, serving customers all over the globe. With a 
fleet numbering more than 500 container vessels and about 1.4 million 
operated containers, we provide reliable and comprehensive ocean 
shipping transportation. Maersk, Incorporated is the North America 
agent for parent company A.P. Moller-Maersk Group's liner businesses, 
Maersk Line and Safmarine. The A.P. Moller-Maersk Group employs more 
than 70,000 people in over 125 countries.
    In 1943, Maersk, Inc. was established as the general agent for A.P. 
Moller's liner business, Maersk Line. Here in the United States, we 
generate employment for approximately 12,000 Americans and we have 
committed to significant infrastructure investments before and since 
September 11, 2001.
    Maersk has been actively involved in maritime security issues for 
many years. Our commitment to security is captured by the watch words 
for all our activities: ``Constant Care.'' The security of our 
containers and the integrity of our transportation network are 
essential to our operations at Maersk. Marine transportation is a 
worldwide industry, and it is inherently intermodal--a container that 
is unloaded at a U.S. seaport today can be almost anywhere in the 
nation tomorrow or within days.
    For many years, cargo moved fluidly through our ports and 
facilities subject to prevailing regulations. But the events of 
September 11, 2001 changed the way we think about maritime security. 
Maersk Line and other carriers serving the United States today are more 
concerned than ever about security threats, for we know that terrorist 
elements might seize upon our transportation mode as an attack 
opportunity.
    To counter the potential impact on our fellow citizens, employees, 
ports facilities, containers and vessels, Maersk has embarked on an 
even more aggressive, enterprising campaign. We have entered 
voluntarily into a variety of U.S. government programs and pilot 
projects--for example, we were the first enterprise-wide transportation 
company to be validated by the Customs-Trade Partnership Against 
Terrorism (C-TPAT) Program. We also participate in the Super Carrier 
Initiative Program, one of only 27 ocean carriers worldwide permitted 
by U.S. Customs and Border Protection (CBP) to participate at this 
level. But we realize that it is not enough to make our operations 
within this country secure, so we have intensified our efforts to 
secure our international cargo network through the establishment of a 
comprehensive and vigorous global security policy and strategy that 
governs our sea and landside operations worldwide.
    There is much in the SAFE Port Act that we at Maersk support and we 
commend you, Mr. Chairman, and other Members for working hard on 
maritime security.
    Maersk strongly supports the concept of performing the inspection 
function at foreign ports--before any container is loaded on a vessel. 
We recognize that there are issues involving how this requirement can 
be implemented, and we pledge to work cooperatively with U.S. and 
foreign governments to achieve this desirable result. We believe there 
is great promise in non-intrusive inspection and it is important that 
the program be developed and implemented properly.
    In this regard, let me state that it is essential that sufficient 
funding be provided to enable CBP to carry out its responsibilities of 
foreign port inspections. The system requires that images from 
screening be reviewed by CBP and that terminal operators in foreign 
ports receive feedback from CBP. To accomplish this, the CBP's 
databases need to be updated and designed so that images can be matched 
in real time with information on file with CBP. Then, in cases where 
further inspection is required, the additional inspection can occur 
immediately.
    Furthermore, for inspections in foreign countries to succeed, it 
must either be accomplished through bilateral or multilateral 
negotiations between the United States and countries where the 
requirements are imposed (with the foreign country implementing the 
security procedures), or we must provide incentives for foreign port 
operators to perform those functions.
    The SAFE Port Act contains provisions appropriately addressing 
high-risk containers that can be identified before they reach American 
soil. A very significant part of the discussion about mechanisms to 
improve maritime security is the vessel cargo manifest. This manifest, 
based on long standing regulatory and commercial standards, provides a 
great deal of specific, useful information on all cargo that is brought 
into the United States. Among other items, it identifies the contents 
of the container or the cargo carried onboard the vessel, the identity 
of the shipper and consignee, the port of origin, and the destination 
within the United States. We concur strongly with provisions in the 
SAFE Port Act that enhanced manifest information is needed. It is the 
responsibility of shippers who possess this information to provide it 
and we must protect the confidentiality and integrity of the data. Of 
course, we also must be certain that the right kind of information is 
collected as ocean carriers do not have--nor is there a need to have--
this type of information. We must also be sure that the information 
collected can be acted upon quickly, and that this process does not 
introduce an unreasonable amount of friction into the flow of global 
trade.
    Section 8 of the SAFE Port Act addresses the issue of employee 
identification. As you know, the Maritime Transportation Security Act 
of 2002 (MTSA) mandated that the government develop and issue 
credentials (including biometric identifiers and background checks) for 
transportation workers seeking unescorted access to secure areas within 
transportation facilities. We support the concept of the Transportation 
Worker Identification Card (TWIC), and pledge to provide information to 
assist in improving employee identification and assist in the 
implementation of the TWIC program.
    We are still in the process of examining thoroughly the SAFE Port 
Act, but please permit me to offer several general observations at this 
time. We will of course continue to discuss with you specific issues 
that may arise through our review.
         A number of requirements are imposed by the SAFE Port 
        Act, and they must be evaluated with an eye toward trade 
        reciprocity, and their application to both imports and exports. 
        We must anticipate whether our foreign trade partners will 
        impose similar requirements, and whether it is feasible for 
        U.S. interests to comply.
         The SAFE Port Act or any other maritime security 
        legislation should not duplicate or conflict with other 
        requirements of law, and not add unnecessary levels of 
        bureaucracy. Security is already a very complicated area, and 
        additional levels of paperwork and involvement by multiple 
        agencies will not further the overall goal of making our marine 
        transportation system safer.
         We support the continuation of C-TPAT, and strongly 
        believe that the program should remain voluntary and not 
        subject to governmental rulemaking. C-TPAT should be flexible 
        enough to permit variations in its application to participants, 
        and not impose a generic set of rules on all of them.
         If a program similar to GreenLane is adopted, it must 
        provide clear, direct benefits in return for implementing high 
        security standards. This is essential if companies are going to 
        undertake the investment needed to become involved in the 
        program and make the changes the program requires.
         Today, the MTSA already requires that the Department 
        of Homeland Security (DHS) set standards for container security 
        devices, and CBP and DHS are testing devices against these 
        standards. We should await the outcome of these tests and 
        determine their technological feasibility before proceeding on 
        this matter.
    Mr. Chairman, Maersk works hard to make our operations as safe as 
possible. This is in the national security interests of our country, 
our own commercial interests, and the interests of providing a safe and 
secure workplace environment for our employees. ``Constant Care'' are 
our watchwords, and they form the foundation of every activity we take 
in this regard.
    We at Maersk look forward to continuing to discuss the SAFE Port 
Act and other security issues with you. I am happy to attempt to answer 
any questions you may have, and I appreciate very much the opportunity 
to appear before you this morning.

    Mr. Lungren. Thank you, Mr. Pentimonti, for your testimony.
    The chair would now recognize Mr. Noel Cunningham.

     STATEMENT OF NOEL CUNNINGHAM, PRINCIPAL, MARSEC GROUP

    Mr. Cunningham. Mr. Chairman and members of the committee, 
thank you for inviting me to testify before you today. I will 
be addressing the proposed Security and Accountability for 
Every Port Act, or SAFE Port Act. During this testimony, I will 
address the act and discuss other actions I believe are 
critical in addressing the vulnerabilities associated with 
maritime security.
    My assessment is based upon my 40 years of experience as a 
law enforcement officer, chief of the Port of Los Angeles 
Police, and director of operations at the nation's largest 
seaport. In the interests of time, I would like to summarize my 
testimony and submit a complete written copy to the committee. 
I should also note that this testimony was prepared with the 
assistance of two other principals for the MARSEC group, 
Captain John Holmes, former captain of the Port of Los Angeles-
Long Beach, and Dr. Charles Massey, who retired recently from 
Sandia National Laboratories as the program manager for the 
Department of Energy's Second Line of Defense.
    As you may be aware, Captain Holmes and Dr. Massey have 
significant experience in port and border security and like 
myself were in the field during and after the tragic events of 
September 11. Having had the opportunity to review the SAFE 
Port Act, I would like to commend the committee for its efforts 
and go on record as supporting the concepts embraced in the 
act. I wholeheartedly support the efforts outlined in areas of 
strategic planning, information management, and data 
integration.
    I am also pleased to see that the bill addresses existing 
concerns regarding trade reconstitution, that it will better 
define the GreenLane concept, and that it embraces the use of a 
common metric in the grant process.
    My experience leads me to believe, however, that the act 
could be made significantly more effective if this committee 
expanded its scope in order to establish new priorities for 
existing programs that are critical to the security of our 
ports. These include port identification, enhanced inspections 
in foreign ports, and security system integration at the local 
ports, regional and the national levels.
    I am also encouraged to see that the bill addresses the 
critical issue of research and development. It is my strong 
belief that our focus needs to transcend our current efforts at 
plugging the security gaps that we know, and embrace 
identification and prevention of those that we currently do not 
know about. If this is going to be done, intelligence gathering 
and research and development will be key elements in the 
success of these efforts.
    Although I am heartened by the areas of focus, I would like 
to see it expanded to specifically embrace all methods of cargo 
screening, including those that have proven to be most 
problematic up to this point: biological and chemical 
detection. Although I recognize this issue is generally 
addressed in some of the existing regulations, I would also 
like to support the idea of establishing requirements for 
training and exercises in the bill. As a career law enforcement 
officer, I cannot underscore enough the importance of a solid 
training program.
    It is my belief that when an assessment is conducted, key 
gaps will be identified. Three of these include inability to 
clearly determine who is working on our ports. Unlike our 
airports, our seaports have no credentialing program. One of 
the universal truths in law enforcement is that security starts 
with people. Responsible citizens are oftentimes much more 
reliable and accurate in detecting and deterring criminal or 
terrorist activity than sophisticated technological systems, 
just as Congresswoman Harman identified for the ILWU. If bad 
people cannot undertake their efforts without being exposed, 
the system will be more secure.
    Number two, inability to truly know what is in the 
containers that are arriving in the U.S. As my close friend and 
colleague Dr. Stephen Flynn has stated, the question must be 
asked: What is in the box? Given the complexity of the supply 
chain and the number of individuals involved, the only means to 
truly assure that the contents of the container do not pose a 
threat is to use technology to screen the contents. No port 
chief or captain of a port wants to be the individual who finds 
the dirty bomb after he has off-loaded it in his or her port.
    Third, lack of integration of current security systems on 
the local port, regional and national levels. In the post-9/11 
climate, ports and terminals have embraced the use of security 
systems, cameras, access control and intrusion detection 
systems. Unfortunately, there are very few cases where ports 
have taken the lead and have found the funding to integrate 
these systems. As a result, knowledge of security breaches or 
attempted breaches are only known to that particular system.
    The gaps identified represent fundamental security 
shortfalls that must be addressed. Access control and overseas 
screening are the foundations to secure our supply chain and 
they represent the most significant and most efficient means to 
push back the borders. Until shortfalls such as these are 
rectified, the security of the entire supply chain must be 
called into question.
    Involvement of industry is also crucial in this effort. No 
one knows better where the security vulnerabilities are in the 
maritime industry than the industry. Tapping into this 
knowledge base is crucial. Operation Safe Commerce, in which me 
and my partners were key participants, is an example of 
industry helping to determine where the security efforts are 
best placed. The SAFE Act program continues to recognize and 
support this crucial industry-led effort.
    While container security is rightly the subject of much 
focus, cargo does not only move through the maritime industry 
in steel boxes. A weapon of mass destruction could also be 
transported to the United States on a bulk haul container, a 
roll on-roll off vessel, or a fishing trawler. Security of our 
nation depends on systems that will deal with all types of 
maritime threat delivery opportunities.
    I am pleased to see that the focus of this bill goes beyond 
containerized cargo and that research, development and testing 
of the processes and technologies will be addressed and that 
prioritized threats throughout the maritime system are included 
in this act.
    I also believe that if one is going to address the security 
needs, the issue of resources cannot be ignored. A question 
that must be asked during the planning and analysis stage 
outlined in this bill must be: Are the federal, state and local 
resources on hand sufficient to educate, deter, detect, respond 
and recover in the manner expected? I think that unfortunately 
the answer will be no.
    I, more than most, realize that priorities must be 
established based on principles of risk management. I have 
lived this reality for 40 years. Unfortunately, when 
organizations become driven more by funding parameters than 
risk management principles, adjustments need to be made. This 
is the situation we now find ourselves in. As such, I implore 
you to include as part of the planning requirements in this 
bill a match of the mission requirements and resources needed.
    I would once again like to commend the committee for your 
efforts. I can see that a great deal of work and thoughtful 
analysis has gone into this project. I am convinced that if 
additional concerns are addressed in areas such as port user 
identification, the TWIC, overseas inspections and security 
integration, the act has the ability to significantly enhance 
port and maritime and supply chain security.
    I would like to offer my assistance and the assistance of 
my colleagues and myself to support you in any way possible. I 
would like to also publicly acknowledge the hard work that my 
Congresswoman Millender-McDonald, has put into port security 
bill, H.R. 478. I do know that the congresswoman desires 
working with this distinguished committee in considering some 
of the elements of H.R. 478 with the SAFE Act bill.
    I thank you, and I will be happy to answer any questions 
you may have.
    [The statement of Mr. Cunningham follows:]

              Prepared Statement of Chief Noel Cunningham

    Mr. Chairman and Members of the Committee, thank you for inviting 
me to testify before you today. I will be discussing the proposed 
``Security and Accountability For Every Port Act'' or ``SAFE Port 
Act.'' During this testimony I will address the act, and discuss other 
actions that I believe are critical in addressing vulnerabilities 
associated with maritime security. My assessment is based on my 40 
years of experience as a law enforcement officer, Chief of the Port of 
Los Angeles Police, and Director of Operations at the largest port in 
the United States. My testimony is also being provided from my vantage 
point as a Principal of The Marsec Group--a small group that provides 
maritime and supply chain security consulting services to public and 
private sector clients.
    I should also note that this testimony was prepared with the 
assistance of the two other principals from The MARSEC Group: Captain 
John Holmes, former Captain of the Port of Los Angeles--Long Beach and 
Dr. Charles Massey, who retired recently from Sandia National 
Laboratories as the program manager for the Department of Energy Second 
line of Defense Program. As you may be aware, Captain Holmes and Doctor 
Massey have significant experience in port and border security, and 
like myself were ``in the field'' during and after the tragic events of 
September 11th.
    Having had the opportunity to review the SAFE Port Act, I would 
like to commend the committee for its efforts, and go on record as 
supporting the concepts embraced in the act. I wholeheartedly support 
the efforts outlined in the areas of strategic planning, information 
management and data integration. I am pleased to see that the bill 
addresses existing concerns regarding trade reconstitution. I am also 
very encouraged by the fact that the bill will better define the 
GreenLane process and that it embraces the use of a common metric in 
the Port Security Grant process.
    My experience leads me to believe, however, that the act could be 
made significantly more effective if this committee expanded its scope 
to establish new priorities for existing programs that are critical to 
the security of our ports. These include port user identification, 
enhanced inspections in foreign ports, and security system integration 
at the port, regional and national level.
    It is clear that the purpose of the ``SAFE Port Act'' is to improve 
maritime and cargo security, thereby protecting the safety and security 
of our citizens, our nation, and its economy. With over 80 percent of 
international trade volume carried by the maritime system, the 
likelihood that it will be targeted in the future by terrorists should 
be assumed. Although a great deal of discussion has taken place 
regarding whether maritime shipping is an appropriate means of 
transportation for a weapon of mass destruction, I firmly believe that 
this discussion misses the mark. If one is looking for a means of 
transport for a WMD there may be better vehicles. If one is looking for 
a means to cripple our economy, the transportation system is an 
exceptional target.
    Past terrorist attacks against an oil tanker and a LNG carrier 
would seem to support that the marine transportation system is both the 
``target'' and the ``arrow''. To combat the terrorists and deploy 
systems to win the war on terror, the United States must aggressively 
support security programs already underway while implementing new ones 
to deal with the dynamic threat posed by modern day terrorists.
    Although the ``SAFE Port Act'' proposes a set of initiatives to 
complement, and/or improve several existing maritime security programs, 
it is critical that an assessment of existing programs is conducted in 
order to identify and fill fundamental security gaps. The ``SAFE Port 
Act'' includes this crucial element and requires the development of a 
Strategic Plan to deal with the threat and ensure that security efforts 
are focused on the right issues. Equally important, given the 
likelihood of an attack on the maritime system, is an understanding of 
how the system will be restored after an attack. I am pleased to see 
that the Act addresses this important issue.
    I am encouraged to see that the bill addresses the critical issue 
of research and development. It is my strong belief that our focus 
needs to transcend our current efforts at plugging the security gaps 
that we know, and embrace the identification and prevention of those 
that currently do not exist. If this is going to be done, intelligence 
gathering and research and development will be key elements in the 
success of these efforts. Although I am heartened by these areas of 
focus, I would like to see the Act expanded to specifically embrace all 
methods of cargo scanning including those that have proven to be most 
problematic up to this point, i.e. chemical and biological detection.
    I also believe that the bill would be more comprehensive if the 
research and development section specifically addressed the issue of 
improving portable detection equipment. If we are truly going to 
embrace the concept of pushing back the borders and developing a multi-
layered layered security system, it is critical that we not only 
conduct most of our inspections overseas (as is currently the focus of 
the Container Security and Megaports initiatives), but that we also 
provide our seagoing inspection teams the equipment that is needed to 
prevent illicit materials from being transported into and through U. S. 
waters. Seagoing examinations are hazardous undertakings. It is 
critical therefore that we develop equipment that is specifically made 
for the maritime environment.
    Although I recognize that this issue is generally addressed in some 
of the existing regulations, I would also like to support the idea of 
outlining requirements for training and exercises in the bill. As a 
career law-enforcement officer I can not underscore enough the 
criticality of a solid training program. It is my belief that this bill 
should require ports and port personnel to take a leadership role in 
port security training. Requirements should be put in place requiring 
port and regional training exercises in such areas as response, 
personnel evacuation and reconstitution of operations.
    It is my belief that when an assessment is conducted, key gaps will 
be identified. These include:
         Inability to clearly determine who is working in our 
        ports: Unlike our airports, our ports have no credentialing 
        system. One of the universal truths in law enforcement is that 
        security starts with people. Officers and responsible citizens 
        are oftentimes much more reliable and accurate in detecting and 
        deterring criminal, or terrorist, activities than sophisticated 
        technological systems. If bad people can not undertake their 
        efforts without being exposed, the system will be more secure. 
        Identification of workers through efforts like the 
        Transportation Worker Identification Card (TWIC) are on target 
        and expansion of this type of information assessment and 
        utilization to other members of the supply chain, including 
        shippers, carriers, freight forwarders, and creditors, as 
        mandated by this Act will improve security. However, issues 
        associated with the privacy of the data will need to be 
        addressed. Through a cooperative effort involving labor, the 
        industry, and the government, I believe the important 
        ``information'' component of the maritime system--a component 
        that would include information about the cargo and the people 
        involved in its purchase and movement--can be used to make the 
        system more secure. Credentialing and access control are the 
        foundation of any effective security system. This program needs 
        to become the highest security priority.
         Inability to truly know what is in the containers 
        arriving in the U.S: As my close friend and colleague, Dr. 
        Stephen Flynn has stated, the question that must be asked is 
        ``what's in the box?'' Given the complexity of the supply chain 
        and the number of individuals involved, the only means to truly 
        ensure that the contents of the container do not pose a threat 
        is to use technology to screen the contents. In order to truly 
        embrace maritime security, this screening must be forced to 
        occur prior to loading. At present the amount of foreign 
        inspections is simply not significant enough to provide a 
        deterrent effect. No Port Chief of Operations or Coast Guard 
        Captain of the Port wants to be the individual who finds the 
        dirty bomb after it is offloaded in his or her port.
         Lack of integration of current security systems on the 
        port, regional and national level: In the post 9/11 climate 
        ports and terminals have embraced the use of security systems 
        that include, cameras, access control and intrusion detection 
        systems. Unfortunately there are few cases where ports have 
        taken the lead, and/or found the funding to integrate these 
        systems. As a result, knowledge of security breaches or 
        attempted breaches are not known outside the identifying 
        system, nor are they examined systematically. What currently 
        exists in most ports is a conglomeration of individual 
        hardware, and not a port-wide security system.
    The gaps identified represent fundamental security shortfalls that 
must be addressed. Access control and overseas screening are 
foundational to supply chain security, and they represent the most 
efficient means to push back the borders. Until shortfalls such as 
these are rectified, the security of the entire supply chain must be 
called into question.
    While the use of information assessment tools and sophisticated 
detection systems by government agencies are two important legs of the 
three-legged security stool, system security will not be achieved 
unless the last leg of the stool is accounted for. This leg consists of 
the major players in the maritime transportation system--labor, 
terminal operators, shippers, carriers, and port authorities. 
Involvement of these stakeholders has been pursued through initiatives 
such as the Customs-Trade Partnership Against Terrorism (C-TPAT). I am 
pleased to see that the ``SAFE Port Act'' wisely endorses this effort.
    I believe the shipping industry wants to do more in the area of 
security. Because they are in business, they must be able to justify 
some of the expense and I believe they are right to expect something in 
return for their investment. For example, businesses that invest in the 
security measures required for participation in C-TPAT should be given 
priority in clearing their cargo through customs over business that do 
not. Designation of a GreenLane with achievable and definable 
requirements will do much to persuade businesses to invest in processes 
and technologies that can make us more secure.
    The involvement of industry is also crucial from another aspect. No 
one knows better where the security vulnerabilities are in the maritime 
industry than the industry. Tapping into this knowledge base is crucial 
for success. Operation Safe Commerce, of which my partners and I were 
key participants, is an example of industry helping to determine where 
security efforts are best placed. The ``SAFE Port Act'' continues to 
support this crucial industry-led effort.
    While container security is rightly the subject of much focus, 
cargo does not only move through the maritime system only in steel 
boxes. A Weapon of Mass Destruction (WMD) could also be transported to 
the United States on a bulk oil tanker, a Roll-on/Roll-off vessel, or a 
fishing trawler. Security of our nation depends on systems that will 
deal with all types of maritime threat delivery vehicles and targets. I 
am please to see that the focus of the bill goes beyond containerized 
cargo and that research, development and testing of processes and 
technologies that will address prioritized threats throughout the 
maritime system, are included in this Act.
    I also believe that if one is going to address security needs, the 
issue of resources can not be ignored. A question that must be asked 
during the planning and analysis required in this bill must be: ``Are 
the federal, state and local resources on hand sufficient to educate, 
deter, detect, respond, and recover in the manner expected?'' I think 
that the unfortunate answer to this question will be ``no''. I, more 
than most, realize that priorities must be established based on the 
principals of risk management. I have lived this reality for over 40 
years.
    Unfortunately, when organizations become driven more by funding 
parameters than risk management principals, adjustments need to be 
made. This is the situation we now find ourselves in. As such, I 
implore you to include, as part of the planning requirements in the 
bill, a match of the mission requirements and resources needed.
    I would once again like to commend the Committee for your efforts. 
I can see that a great deal of work and thoughtful analysis has gone 
into this project. I am convinced that if additional security concerns 
are addressed in areas such as port user identification, overseas 
inspection, and security integration, the Act has the ability to 
significantly enhance port, maritime and supply chain security. I would 
like to offer the assistance of my colleagues and myself to support you 
in any way possible in moving this critical Act forward.
    Thank you. I would be happy to answer any questions you may have.

    Mr. Lungren. Thank you very much, Mr. Cunningham.
    The chair will recognize all members for 5 minute periods 
for questions. I will start the round of questions.
    Mr. Ahern, you heard Mr. Cunningham say that one of the 
major concerns, if not the major concern, is ``what is in the 
box.'' Some people have said, well, the solution is fairly 
simple. We have to inspect every single container in every 
single foreign port before it comes here.
    What are we doing in that regard? Is that possible? And 
people keep referring to the Hong Kong experience, where they 
seem to be able to do this, at least I hear that repeated many, 
many times, that they get to look at 100 percent of all the 
containers and why can't we do the same.
    Mr. Ahern. Thank you very much. There are several questions 
in there, and I will answer in order, sir.
    First, when you take a look at the data elements to help us 
identify what is in the box, there are currently 24 elements of 
the manifest that we use for targeting, 17 off the entry. We 
are in the process right now of identifying what additional 
elements we do need for targeting so that we can make a better 
determination of what is in the box. We then run it through our 
automated targeting systems.
    We are also looking to see what the appropriateness is of 
changing some of the timeframes for filing of entry 
information, as opposed to receiving it at or after the time of 
arrival. We want to move that up, so we are considering that.
    We also need to take a look at the stow plan that is 
electronically available to make sure that we can match that 
against some of the information that is sent to us 
electronically to make sure there is no unmanifested boxes. 
That information is available, so we are seeing how we can 
introduce that into our system as well.
    Overseas, we have now expanded as recently as March 8, and 
brought about our 43rd container security initiative port. We 
now have close to a little over 74 percent of the containers 
coming to the United States actually transit through those 
overseas ports.
    Your last point relative to the ICIS model that is in Hong 
Kong, I had the opportunity to go and look at that in October 
of this past year. I would say that as has been represented by 
many, it is completely oversold as far as what its current 
capability is. It has been misrepresented as to what it is 
currently doing. It is not doing 100 percent of the containers. 
It is set up in one land of one of the terminals there to just 
put about 300 containers an hour through there.
    I will tell you that certainly the concept is a good one. 
We need to take a look at it. We need to take a look at how we 
could deploy it in a very well thought-out manner. So it does 
continue to provide the level of pushing the borders out 
screening that is necessary to have the appropriate threshold 
setting for alarms, with a radiation portal monitor. There 
needs to be a concept of operation that is meaningful, not just 
pushing containers through that model that is currently out 
there. We also need to take the opportunity to develop good, 
well thought-out response protocols to resolve the alarms.
    We are currently in the analysis right now of some of the 
containers that have been put through there. We just within the 
last couple of weeks received 21,000 files from the computer 
that had been collecting some of the radiation spectra, so that 
we can do an analysis both with our subcontractor, which is 
Pacific Northwest Laboratories, and also the Department of 
Energy has brought in the Oakridge National Laboratory to do 
some analysis for us as well, so we could actually come up with 
a model of how many alarms would a terminal operator expect in 
an overseas environment that would need to be resolved prior to 
lading.
    So to sum up on the ICIS concept, I think it is again 
currently been clearly overstated as far as what its current 
capabilities are. It is not doing 100 percent. It is 
principally the same technology we use here in the United 
States, so it is not a question about the efficacy of the 
technology, but it is how do we deploy the concept of 
operations effectively so it is a meaningful test, and we have 
the right protocols in place.
    Mr. Lungren. Let me ask this, and both for Mr. Ahern and 
Captain Salerno. You have your plan in place. You have figured 
your at-risk containers and so forth. You know there has been 
some check on them at the foreign ports. What is to say there 
is not going to be someone opening the container while en 
route? Taking something in; putting something in; taking 
something out, et cetera.
    Mr. Ahern. Certainly, that is a vulnerability in the supply 
chain and we are not dismissing that fact. We have been very 
aggressively with the department's Science and Technology 
Directorate looking at the appropriate container security 
devices that could help as a solution for that. We think we 
need to fast-forward that process.
    We have taken a look at we need to have a 99.6 
effectiveness rate with the device so that we are not resolving 
nuisance alarms, because we are looking at a universe of over 
11.3 million containers in fiscal year 2005 came into the 
United States from overseas. We are looking at about a 12 
percent growth expected for this year.
    I would not want to have our officers focusing on nuisance 
or false alarms because the technology is not working 
effectively. Our testing has currently been showing somewhere 
in the 94 to 96 range as far as for accuracy, and four to six 
points of having to resolve against a universe of 11 million 
containers gets into the 400,000, 500,000, 600,000 containers 
that need to be alarmed just because the technology is not 
working correctly.
    So we need to continue to get better with that. We have 
challenged the industry to continue to fine-tune to make sure 
they meet our current specs, and we are looking forward to 
coming up with a solution, because it is absolutely a key 
vulnerability that needs to be sealed with an appropriate 
container security device.
    Mr. Lungren. Captain Salerno?
    Captain Salerno. Yes, sir. One of the elements of the 
vessel security plan that is required under MTSA and under 
ISPFSC internationally are provisions to guard against 
tampering of the cargo. Essentially, this puts a burden on the 
ship's crew for vigilance.
    What we have seen in terms of whether this works or not, we 
have in fact had a case where there were stowaways in a box and 
they did egress the box while onboard the vessel in mid-ocean. 
They were detected by the crew, and that situation was in fact 
reported to the Coast Guard. So it is just one example of how 
the plan in fact did work in that case.
    Mr. Lungren. I have a lot of questions to follow up, but my 
time is up.
    Ms. Sanchez is recognized for 5 minutes.
    Ms. Sanchez. Thank you, Mr. Chairman.
    Again, I want to thank you all for being before us, and in 
particular Chief Cunningham, welcome back. I think you were my 
guest on the panel 2 1/2 years ago when we had this committee 
at the time.
    Mr. Chairman, you were not in the Congress for the second 
time, but we had Mr. Cunningham before our committee in Los 
Angeles where we held one of our first hearings. He has been an 
incredible resource for a lot of the information that we have 
on many of the bills that we have introduced.
    So welcome back and thank you for being with us. I 
certainly will continue to enjoy yours and Mr. Holmes' and 
others' information and expertise as we try to work through 
this.
    My questions have to do with C-TPAT, because as you said, 
Chief Cunningham, what is in the box is incredibly important. 
Let's face it, the majority of what we do is we read the list 
of what somebody is telling us is in the box. That is what is 
going on. And in many cases, my longshoremen tell me, there are 
other things in the box, and we will be making a field trip 
tomorrow to the ports to see how advanced we have gotten since 
the last time we were there, the last time we saw the X-ray 
machine that takes a look at the container, the last time we 
discussed the number of man-hours that it takes CBP to pull 
apart a container and look at everything.
    Yes, I hope it has gotten better, but I really don't 
believe we have gotten better X-ray technology that we had last 
year or the year before when we were there. I also don't 
believe that we are checking that many more containers that are 
coming in. So what is in the box?
    So we have this program, C-TPAT, where we have 10,000 
companies signed up to participate in it. To this point, only 
1,545 of those companies have had their security measures 
validated. That means we ask these companies, we tell them you 
are going to get some benefits, you are going to go faster and 
get your stuff through faster, if you write us a plan that 
tells us all your security measures, and how you are going to 
make sure that your vendors are doing the right thing and 
everything is secure and your manifests are right, et cetera, 
et cetera.
    And of these 10,000, we have validated, I think that is 
from CBP, 1,545. So there are thousands of companies that are 
receiving benefits despite the fact that there has been no 
confirmation of the security measures that are in place at 
these companies.
    So my question is, when will all of the currently pending 
validations be completed? I think this is to Mr. Ahern. And I 
don't want to hear about possibly certified companies, because 
I understand that that would mean that you received it, you 
stamped it as received, and then you gave certification to 
companies.
    So I want to know what is the pending validation; how long 
is it going to take you to get these 10,000 companies done; and 
aren't you granting risk or reductions to companies whose 
security plans have not yet been really been checked?
    Mr. Ahern. I would be happy to provide you with a full 
answer on that. Of the 10,000 applicants, and we have 5,800 
certified members. That is the appropriate universe to apply 
these credits for the risk scoring as well as for the 
validations.
    Ms. Sanchez. So what does ``certified'' mean?
    Mr. Ahern. ``Certified'' means that they have actually 
supplied a security assessment to us that we have reviewed, and 
we have gone back and forth with the company in many iterations 
to make sure it is an appropriate security plan where they can 
demonstrate through their written submitted security plan of 
what they are doing overseas. They are not receiving any credit 
at that point until the plan is actually initially certified.
    Ms. Sanchez. Wait. So if you are initially certified, you 
haven't gone to really see what is going on. You have just 
taken their plan, you have reviewed it with them, and then you 
have certified it.
    Mr. Ahern. That is correct.
    Ms. Sanchez. And now you are giving them credit scores for 
being good companies.
    Mr. Ahern. Partial credit. We have it in three tiers. That 
would be the first credit they would receive some benefit for. 
We then have the universe of those that then are certified and 
validated. We currently have, as you stated, 1,545 companies 
which represents 27 percent of the universe of 5,800 certified 
members that are actually validated at this point. We have 
another 2,262 validations currently in progress which would 
bring us up to 39 additional percent.
    So our goal is to be at 65 percent completed by the end of 
this calendar year. I am not happy where our progress has been. 
We had a total authorized level of 157 supply chain security 
specialists to hire this year. We are currently only in the 
mid-80s as far as with the current onboard strength. We just 
made a recent selection of 40 individuals that should be 
onboard within the next 30 to 45 days, so we should have an 
opportunity to get those numbers significantly more 
accomplished in the coming months.
    Ms. Sanchez. So you have 80 people to check 10,000 
companies?
    Mr. Ahern. We have currently 80 supply chain security 
specialists that are doing the validations. We have 40 more 
that are currently in the final review for EOD-ing within the 
next 30 to 45 days.
    Ms. Sanchez. I have a lot more questions, as you can tell, 
Mr. Chairman, but I will yield back and hopefully you will give 
us another round.
    Mr. Lungren. Yes, we shall.
    Ms. Harman is recognized for 5 minutes.
    Ms. Harman. Thank you, Mr. Chairman. Again, thank you and 
the ranking member for allowing me to participate in the 
subcommittee.
    I do want to say that I think your visit tomorrow to the 
ports of L.A. and Long Beach will be excellent. I apologize 
that I will not be there. I have a date with a new 
granddaughter and she lives in New York City, so I am going to 
Los Angeles via New York City. My apologies.
    I thought your testimony was excellent. I think there is a 
lot of information on the record now about the very good things 
that are happening. Our ports are more secure than they were on 
9/11. Again, I want to thank the Coast Guard in particular for 
heroic efforts.
    We have something in this bill about joint operations 
centers, which we intend to be the place that would take charge 
in an emergency. I have often heard the comment that it is not 
clear who is in charge. I do want to ask all of the witnesses 
about your views of these joint operations centers and whether 
you think they will be useful and whether they will add to, not 
compete with, the excellent capability we already have on the 
ground.
    Just before you answer, because I am thinking my time will 
run out, I do want to commend something that we have in Los 
Angeles, which is the Area Maritime Security Committee, which 
does integrate all levels of government and does include I 
believe the private sector as well, and is by my lights a very 
important improvement since 9/11.
    I was recently there accompanied by Senator Susan Collins. 
We were there to ask the question: Are we ready for a major 
terrorist attack? Obviously, the answer is no one can be 
totally ready, but surely in the ports of L.A. and Long Beach 
we have a very significant prevention and response capability. 
So I want to commend you, and if you want to say anything about 
the state of readiness as you answer my question about the need 
for a joint operations center, please do that.
    This is to all the witnesses.
    Mr. Cunningham. I will respond that Los Angeles is the 
point that you identified as one of those models that you are 
pleased with. I, too, am pleased with the model. We have 
received exceptional leadership with the Coast Guard, the 
leadership of the Coast Guard and the captain of the port has 
been very strong in promoting the Area Maritime Security 
Committee, which is mandated by the Maritime Transportation 
Security Act.
    What makes the model work, though, it is an operation that 
involves all of the stakeholders. We have labor, we have the 
terminal operators, we have the local law enforcement, we have 
the federal agencies, the regulatory agencies. From that 
standpoint, yes, we do need it, and that language should stay 
in the bill. It is very important, and also I would suggest 
that we add exercises. The training and the exercises make that 
bill work. Right now, there is no mandate for that, but it is 
just the pure leadership that we are getting out of the Coast 
Guard that is making that work.
    Ms. Harman. Let me second your comment about the training 
and the exercises, but they also need to be, as I learned at 
that meeting a few weeks ago, really targeted in a better way 
than they are. And they need to be repetitive. We can't do just 
one big bang, get a headline in a newspaper, and figure that 
the workforce and all of the stakeholders are adequately 
trained. Do you agree?
    Mr. Cunningham. I do agree. To not have the continuous and 
the repetition of the training, you have changes, the Coast 
Guard will change their leadership and their decision-makers 
and so will the local authorities. So it is important to have 
this training as part of the fabric of your security program 
and the change does not impact the leadership or change of the 
rules.
    Ms. Harman. Mr. Chairman, I will be quiet. But could the 
other witnesses answer my question? Can we accommodate that? 
Thank you.
    Captain Salerno. Good morning, Congresswoman.
    I would like to address the command center concept, because 
it is a very important one for the Coast Guard. As you may 
know, the Coast Guard has reorganized its field infrastructure 
where we had previously marine safety officers and group 
commands, they have been merged into what we now call sectors. 
There are 35 sectors established around the country. 
Essentially every port area in the nation is under the 
jurisdiction of at least one sector.
    Every sector has a command center. Part of their mandate is 
to engage local partners, other federal, state and local law 
enforcement, as well as private sector, port authorities and 
such. You mentioned the Area Maritime Security Committees, that 
is a requirement of the Maritime Transportation Security Act, 
so that in every Coast Guard area of operation, there is an 
Area Maritime Security Committee which brings together all of 
these stakeholders in the port community. Collectively, they 
are responsible for generating an area maritime security plan.
    We have authority and have exercised the authority to give 
certain members of this marine community, outside of the law 
enforcement community and outside the federal government, 
security clearances on a selective basis. For example, the head 
of a port authority may in fact need to know what particular 
threats may be operating in that port. We now have the means to 
bring them into the loop and to do that.
    As far as coordinating operations, our sector command 
centers are being fitted out to expand that capability. 
Traditionally, they have been search and rescue centers, 
somewhat limited in their focus. That has been expanded, much 
more inclusive, much more engagement with our agency partners 
and private sector partners.
    So that is very much in keeping with our plan for the 
future. We anticipate over the next several years we will see 
additional capabilities and the ability to share information 
that will be greatly expanded.
    Mr. Ahern. If I might just add very briefly on the command 
center concept, certainly the captain outlined it perfectly. I 
would just add one footnote to it, that the command centers 
should be where they make operational sense. That is one thing 
as we move forward when we do evaluation of where they should 
be placed, it is where it makes operational sense. We continue 
to partner with the Coast Guard. We actually began a pilot in 
Long Beach that we have not taken through the entire West Coast 
and we are going to be adopting it for national application 
just for joint targeting between the Coast Guard and CBP.
    I think to the question of the readiness of the ports, the 
president has approved through homeland security and national 
security presidential directives, HSPD 13 and NSPD 41, several 
elements that are calling for actions within the maritime 
domain.
    The one thing that remains to be completed is the maritime 
incident recovery plan, which calls for the resumption of 
trade. Should an incident occur, how do we resume trade? I 
would say that the comments are in. The only thing we are 
waiting for at this point is that we are taking some of the 
lessons learned from Katrina to add that in before we presented 
it for final approval.
    Mr. Pentimonti. I would like to simply add that as I 
mentioned in my testimony, we are concerned about the levels 
and amount of possibly conflicting legislative demands that 
come upon the industry. We have been frustrated in the past. 
But surely this command center deals with what is one of our 
long-living nightmares, and that is how we recover from 
incidents.
    So the industry quite heavily supports the concept of 
having coordinated and focused command capability in each of 
the locations where in fact there may be incidents. So we 
support it wholeheartedly.
    Mr. Lungren. Thank you very much.
    The gentlelady's time is expired. The chair recognizes the 
gentlelady from Texas, Ms. Jackson-Lee.
    Ms. Jackson-Lee. I thank the chairman and the ranking 
member for this hearing, and to Ms. Harman for the author of 
the legislation that I am pleased to be an original cosponsor 
of.
    Coming from Texas, we have one of the largest ports in 
Houston. Of course, it falls in a number of our districts. We 
spend a lot of time there. In fact, I spent some time there 
doing the Dubai port debate to assess the status of security at 
our port.
    Let me also before going into my questioning, what I do all 
the time when I see the Coast Guard is to again thank you so 
very much for your enormous leadership during the gulf coast 
disaster, Hurricane Katrina. I think it is appropriate whenever 
we are able to applaud the enormous act of saving lives, that 
we do so on the public record, and I do so at this time.
    Mr. Chairman and Ranking Member, I believe that this is 
appropriately a timely hearing, and I will take just a moment 
to express a sense of consternation, when we began to debate 
the question on the Dubai ports issue, to find out the 
predominance of foreign ownership of all of our ports in 
America. I think if you did a statistical analysis, you would 
find that 70 percent to 80 percent of our ports, terminals, et 
cetera, are foreign-operated or owned or leased, which raises a 
great sense of consternation from me.
    So as we proceed with the question of security and this 
particular legislation that focuses on container security and a 
number of other I think important elements. One is the 
strategic plan that is asking what is in place for maritime 
security, container security. I think we have the backdrop of 
questioning, why did America get to the point where we are in a 
sense foreign-owned at our ports? Now, the answer will be that 
port ownership or port operation is a global entity, and that 
you will find that occurring around the world.
    That may be well the case, but I still raise the question 
of why, if it is around the world, let's just break even. Let's 
not be losers. Let's just make it 50/50, minimally, which is 50 
percent domestic-owned, if you will, and where are the 
incentives for such. And Mr. Chairman, I would argue that part 
of the work of this committee is to look at the question of 
incentives and why we are in this particular predicament.
    But as I raise that concern and sense of frustration and 
dislike, frankly, for that present posture, I also believe that 
we need to be proactive. I will be offering legislation that I 
am reviewing on a moratorium of further foreign leasing and/or 
ownership in America's ports.
    Secondarily, I hope to offer an amendment as we move to 
full committee, or move to marking up this particular 
legislation, that deals with the seeking of existing security 
plans, not what will be, but what exists in the nation's top 
ports, so that we can begin to have a further roadmap.
    It is somewhat we asked for after 9/11, which is to 
establish the vulnerability around America, a threat assessment 
plan, and I know that we might be still waiting on that at this 
point, some 5 or 6 years later. I hope we don't have to wait 
that long to find out what is going on in the nation's ports.
    Let me then raise my question, Captain, to you, to find out 
about this seeming flaw in our system. When we began to debate 
the Dubai Ports World, we now have come to understand that as a 
terminal operator, because there was some debate saying that, 
oh, don't worry about it; security is not in their hands. But 
as a terminal operator, my understanding is that the Dubai 
Ports World or any other foreign operator would be responsible 
for the security of their terminals, and that the Coast Guard 
simply checks compliance with security plans.
    Is this true? And how often does the Coast Guard visit 
terminal facilities to check compliance with security 
requirements? And does the Coast Guard conduct unannounced 
visits in order to be proactive?
    Let me raise this question with the assistant secretary on 
this issue of ferry security. One of the glaring anecdotal 
stories that we can tell is that a tanker, not a ferry per se, 
but a tanker loaded with weapons of mass destruction could be 
maybe even more destructive than the horrific act of 9/11.
    My question is, what are you aware of, working with the 
Coast Guard, steps are being taken to secure large ferry 
systems? And what technology is deployed to screen cars and 
trucks, but not halt the system? And we know that cars or 
trucks would be loaded with weapons of mass destruction, get on 
a ferry, and enter into the water system or a port, and warrant 
enormous destruction.
    So if you would answer those questions, and I would 
appreciate the comment on the idea of taking an assessment of 
nation's security plans in the top 10 of our nation's ports, 
and the whole idea, though this is a policy question, of how we 
can provide incentives for domestic ownership.
    Captain, why don't you start out on this question of how do 
you check the security plans of terminal operators.
    Captain Salerno. Yes, Congresswoman.
    From the Coast Guard's perspective, the ownership of the 
facility is somewhat irrelevant to the requirements of that 
facility to develop and submit a plan to the Coast Guard for 
approval. There are certain elements that must be contained in 
that plan, such as how the facility will control access, how 
they will guard against tampering, what areas of the facility 
are secure and so forth.
    Ms. Jackson-Lee. But they, the foreign entity, presents you 
the plan. Is that what I understand?
    Captain Salerno. The owner of the facility does, yes.
    We verify. First of all, we approve that plan. If it meets 
all of the requirements of the law, then we do an on-site visit 
to verify that all of the procedures and equipment that they 
have stipulated in their plan are in fact in place and 
operational.
    We routinely would visit these facilities from a formal 
follow-up standpoint, at least annually. However, to get to 
your question, how frequently do we visit them unannounced, 
that will vary, but it is fairly routine for Coast Guard people 
either from a shore-side perspective or on the water-side in a 
boat would visit that facility several times during the year. 
It may be increased depending on threat levels, what we call 
maritime security conditions. Most of the time these visits 
would be unannounced. We would verify that the people are in 
fact following the provisions of their plan.
    Did I hit all the points that you were concerned about?
    Ms. Jackson-Lee. The salient point is that they present you 
the plan. They are the owner regardless of whether they are a 
foreign owner or domestic.
    Captain Salerno. That is correct.
    Ms. Jackson-Lee. I thank you very much, Mr. Secretary.
    Thank you very much, Captain.
    Mr. Secretary?
    Mr. Ahern. Thank you for the field promotion, but it is the 
assistant commissioner of customs and border protection.
    Ms. Jackson-Lee. Oh, I like ``secretary,'' so continue on.
    Mr. Ahern. It had a very nice ring to it, but I am a career 
individual, so keep that in perspective.
    [Laughter.]
    Ms. Jackson-Lee. Thank you, Mr. Commissioner.
    Mr. Ahern. Thank you.
    I think first off, on the Dubai Port World transaction, I 
think it is important because I have had the opportunity in 
eight or nine open and closed hearings in the last couple of 
weeks, and had the opportunity to speak before many of you over 
the last couple of weeks as well, but continue to put into 
perspective the fact of what we were talking about in that 
transactions.
    There were foreign terminals currently operating in the 
United States that were going to be purchased by another 
foreign entity, and that cargo and containers and vessels were 
going to continue to come from countries of risk and they will 
continue to come today.
    I think that is why we need to continue to focus on the act 
that you are talking about here today to make sure that we have 
a good layer of defenses in place for all modes of travel 
coming in from outside of our borders, but make sure that we 
focus on that maritime security model by having interrelated 
elements of the strategy beginning overseas. Those are key 
points for us.
    Ms. Jackson-Lee. So you wouldn't have a problem with us 
assessing the, if you will, status of security in the nation's 
top 10 ports?
    Mr. Ahern. I would see no problem at all with that. I think 
that is a continuous process we need to be focused on.
    As your question then related to ferry operations, I would 
first begin by stating that one of the most successful 
apprehensions this country has seen for an actual terrorist 
coming into this country to do harm was on a ferry, coming in 
at Port Angeles. U.S. Customs at the time actually apprehended 
Ahmed Ressam, and he was actually to be the millennium bomber 
at Los Angeles airport, and he was successfully apprehended by 
our officers there in Port Angeles.
    We need to continue to deal with some of the same layers 
that we have for people coming into this country. We need to be 
getting the electronic manifests for ferries and cars coming on 
those vessels before they arrive in the United States.
    I think one of the additional things that is at this point 
in time in its final development inside of our organization and 
within the Department of Homeland Security is developing the 
requirements for the Western Hemisphere Travel Initiative, to 
make sure that we have the appropriate documentation for people 
coning in, and ferries principally come to this country from 
Canada.
    So we need to make sure that we have the appropriate 
documentation with the appropriate security features issued to 
individuals that we then can electronically read and transmit 
in advance of their arrival so that we have some predictability 
of who is on those vessels. Those are the key points I wanted 
to raise on that aspect.
    Ms. Jackson-Lee. Thank you, Mr. Chairman. I know my time is 
up.
    I simply, if the chairman would indulge me to speak to the 
chairman, is to simply say this hearing is timely. I think we 
are at a pinnacle crisis level and I think that quick action is 
warranted on securing the nation's ports.
    I yield back.
    Mr. Lungren. I thank the gentlelady for her comments.
    We have time to go to a second round.
    I will start that off by asking Mr. Pentimonti, your 
organization is a foreign-owned organization, right? Your 
company is not an American company.
    Mr. Pentimonti. We operate as Maersk. Maersk, Inc. is an 
American-based company, but it is owned by A.P. Moller, which 
is a Danish-based company.
    Mr. Lungren. And you have terminal operations in Long 
Beach-L.A.?
    Mr. Pentimonti. That is correct, in Los Angeles.
    Mr. Lungren. Los Angeles. In your statement, you stated 
that your company has contributed to significant infrastructure 
investments. There is always talk about the millions, the 
billions that are necessary for port security. I think 
oftentimes we assume that that means the government pays for 
all of that.
    What has your company done with respect to your own funds 
dedicated to port security in any American port, your 
facilities at any American port?
    Mr. Pentimonti. With very small exceptions, our company has 
funded virtually 100 percent of the costs that it has incurred 
in putting the security requirements of ISPFSC and all of the 
other CBP requirements on our cargo movements incur. So we have 
received I think some small grants from the government on 
various facility improvements, but they are a small percentage 
of the total facility improvements that we have made.
    Mr. Lungren. Would you have any estimate on how much your 
company has spent on port security improvements in your 
American port facilities since 9/11?
    Mr. Pentimonti. I don't have a current number, but I could 
surely provide you that. It clearly is significant. We operate 
a number of ports throughout the East, Gulf and West Coasts, so 
there have been significant costs in improving our facilities 
to meet the requirements. In many cases, we exceed requirement 
levels that both the law and the regulations impose.
    Mr. Lungren. Thank you.
    Let me address this to the other three members of the 
panel. Yesterday or the day before, I had an opportunity to 
speak with some members of the longshoremen's union. One of the 
things they were saying is from a birds eye view from the 
ground, while the security efforts that we talk about here in 
Washington are good, they suggested that what they have seen at 
some of the ports they worked at is lack of coordination. That 
is, one company's facility security that may be fine, but there 
is no coordination among the company facilities themselves.
    So I guess I would ask Mr. Cunningham first, how does that 
measure up to your observation and what you attempted to do in 
Los Angeles? And then I would like to hear from both Captain 
Salerno and Mr. Ahern.
    Mr. Cunningham. I would suggest that that is probably an 
accurate assessment. Each of the operators do operate 
independent security systems. The Coast Guard, under the 
Maritime Transportation Security Act, each of the facilities 
have a facility security officer and there quarterly and 
sometimes more often meetings since that act was put in place.
    An effort has been made to coordinate the operations and 
the intelligence that is gathered from the cameras and the 
access data through the area of the Maritime Security 
Committee. Grants that are being applied for by the private 
sector, there is a requirement now that the port authority 
review those grants and assure that there is some coordination.
    From a perspective from the field, on the street, I would 
say that there is probably a dramatic need to improve and 
coordinate the private sector terminal security operations 
between themselves as well as that with the port authority and 
the Coast Guard.
    I may add that it is very important, and here's where the 
federal government can play a major role, there are companies 
such as Maersk that are at the top of the line in the way of 
security. They are the Nordstrom's in security. Yet, there are 
others that would cut corners and will not spend the dime for 
security. They take the profit and spend it in other places.
    So it is very important that the federal government does 
enact some standards to keep the playing field level, and not 
give one company any competitive advantage, and that is major 
issue in the level of security on who spends the money and who 
does not spend the money.
    Mr. Lungren. Let me just follow up with Captain Salerno, 
then, because the Coast Guard is responsible for reviewing the 
security programs and so forth.
    You have heard what Mr. Cunningham said about one may be 
doing a good job and not another. The reason this has come to 
my attention is that the longshoremen talked about an incident 
in Oakland where some fellow named Matthew Gaines, a 25-year-
old individual, didn't belong at that port, and managed to gain 
entry at various terminals, not just a single terminal, on 
different occasions, and so successful was he that he stowed 
away on ships traveling from Oakland to Los Angeles, Oakland to 
Japan, and I forget where the other one is.
    Now, after he had done that three times, I understand the 
captain of the port sent out a notice saying, don't let this 
guy do it again, which I am glad they did, but isn't that a 
suggestion that at least at Oakland we had a real problem, if 
one person could three times gain access not only to the ports, 
but also to stow away on these ships and take off?
    Captain Salerno. Yes, sir, it is a problem. That is clearly 
not a situation that we want to see. It is the very thing we 
are trying to prevent. When those types of things happen, they 
are certainly investigated at the local level and also receive 
a great deal of scrutiny up our chain of command, as was the 
case for this individual.
    There are differences between facilities. The regulations 
themselves are performance-based. In other words, they set a 
standard that you are designed to achieve, you know, control 
access to your facility, for example, but it doesn't specify 
the methodology that you use to accomplish that.
    As Mr. Cunningham mentioned, the Area Maritime Security 
Committee is really the focal point where a lot of coordination 
takes place at the port level. That is where information is 
shared, best practices are communicated between similar types 
of facilities.
    A lot occurs there where people can learn from each other. 
It is not inconceivable that you may have different ways of 
doing things. There are different risks at different types of 
terminals. A container terminal, for example, may have a 
different level of security and different methodologies that 
you may find a bulk grain terminal, for example, even within 
the same port.
    So there are going to be some legitimate differences, but 
the Area Maritime Security Committee is sort of that 
normalizing influence where those practices are shared. I won't 
tell you it is a perfect system yet. There are always better 
ways to do things and improvements to be made, and there are 
some gaps in our system, as you pointed out.
    Mr. Lungren. My time has more than expired.
    The gentlelady from California, Ms. Sanchez, is recognized.
    Ms. Sanchez. Thank you, Mr. Chairman.
    I just want to let Mr. Pentimonti know that I have a re-
routing bill that you should take a look at and industry should 
support about what we do to resume trade if something goes 
wrong at one of our terminals or ports.
    I am going to go back to something that Chief Cunningham 
said earlier, two really great points: Who is working on our 
ports? And what is in the box? Obviously, who is working in the 
ports, I talked a little bit about the trucks and how that I 
think is a really big gap.
    After I ask a couple of questions, I hope that Chief 
Cunningham, you will sort of talk to some of these things 
because I think you have a real overall view of what is going 
on out at these ports, at least what we see in our own 
backyard.
    So the trucks, and the other issue, of course, is the ID 
card. Who is in our ports? Who is around there?
    I think another issue, too, is quite frankly with respect 
to the operators of these terminals. The ILWU or the 
longshoremen tell me that training is required. By Coast Guard 
regulation, training is required by the operators about what 
some of these guys are doing at particular points by the 
operators. They tell me there are plenty of operators who don't 
provide that training. What ends up happening is that the union 
has to spend its dollars to make sure that its longshoremen are 
doing things correctly.
    And then go into what is in the box. You know, a container 
starts somewhere else, and we have been pushing this out to try 
to figure out what is in that container, and that is what the 
container security initiative is. I don't think it works very 
well. I have had that discussion with Mr. Ahern before. And 
then it travels here, and one of the downfalls or the bad 
pieces of this is, as you already indicated earlier in your 
testimony, is that we don't have a good system of knowing that 
that container didn't go somewhere else, didn't get stopped, 
didn't get changed, didn't get opened up, didn't get something 
introduced into it, didn't get switched out for some other 
container, before it reaches our ports.
    Part of that is the whole issue of when the container gets 
to the port, checking the seals. And I have a feeling that a 
lot of operators aren't really checking the seals the way the 
Coast Guard regulations say they should be checked. I know that 
because my longshoremen tell me that. We are using cameras. 
Cameras can't really tell whether a seal has been broken, 
whether it has been tampered with. I think we need to think 
about how we get back to the real basics of what is required 
and how we are doing that.
    Or the inspection of empty containers when they come into 
our ports, also aren't being checked now by a longshoreman. 
People say, well the operators say, well we are weighing them. 
Well, you know, compared to what that weighs, I mean, you could 
put in a little suitcase of something that could be a bomb, 
radioactive, it could be something, who knows.
    So I think it is very important that we all work together 
and we get these issues on the table. These are other pieces 
that we might be able to introduce or introduce into a separate 
bill.
    I also want to get back to the whole issue of this, so you 
have this container, it leaves, it is not really tracked, it is 
not really sealed necessarily correctly all the way, it gets to 
the ports, and then we really don't check it, we X-ray it, and 
maybe once in a while we open it. We are completely relying on 
what people are telling us are in there, and many times that is 
not what is really happening.
    More importantly, C-TPAT, we are relying on companies that 
we haven't even gone out to check to see if in fact they have 
the security things in place that you said they had. Mr. Ahern, 
you talked about the 2,262 validations that are in progress. 
And yet these companies are still receiving a reduction of 
their risk targeting scores. But it is my understanding that 
the targeting scores of these companies are already below the 
threshold for inspections.
    So this cargo from these non-validated companies, are they 
inspected?
    Mr. Ahern. It is a whole series of questions here. I am not 
sure if you would like to begin with Mr. Cunningham.
    Ms. Sanchez. I think Mr. Cunningham, I would like to hear 
him address some of these issues because he has seen so much of 
this going back and forth in all the years he has been at the 
port.
    What about third-party validators? I mean, you have 80 
people that can't possibly check these 10,000 companies. What 
about having somebody else check them? Check, go out, and make 
the initial check on these plans that you are currently 
bringing in and stamping as approved and giving risk reduction 
for?
    Mr. Ahern. I think, given the questions, I think it is 
probably best to start with me and maybe Mr. Cunningham would 
wrap it up for you, if that is all right.
    Ms. Sanchez. Yes, I think I said let's start with you, and 
let's have the chief talk about what is in the box, what we 
need to worry about. I get the number three, the number three 
about let's coordinate all this. I think, you know, the model 
is in L.A.
    Mr. Ahern. Third-party validators. We have currently, to 
this point, we have not actually made the determination that 
third-party validators would be acceptable. We feel as though 
this is a government responsibility, even though there is no 
one more disappointed in our current performance than I am, 
even though you have certainly repeatedly stated your 
displeasure with us and how we are doing at our validations, 
there is no one that is more concerned about getting it done 
quicker than I am.
    Ms. Sanchez. I am not against the individuals who are doing 
this. I am just saying it is not getting done because the 
resources aren't there.
    Mr. Ahern. And to the point of making sure that we bring 
enough resources to bear, we have been looking at a couple of 
different things. Certainly, as I stated earlier, we have 40 
additional individuals that will be coming on within the next 
30 to 45 days and that will get us above the 88 that we 
currently have on board. We have to this point resisted the 
notion of third-party validators. We think it is, again, a 
responsibility that we should be doing in the government, and 
not necessarily contracting it out.
    However, given the current situation and the expansion of 
C-TPAT, which has been a good thing, we want to have more 
parties involved with a trusted program. We want to have the 
largest corporations in the industry, the importers reaching 
back to their suppliers, vendors, manufacturers, putting levels 
of security in place throughout the supply chain.
    Our challenge has been getting to all those locations to do 
the validations, so we are reconsidering whether we should be 
looking at third-party validators with controls. We have now 
expanded over the last year since the GAO report criticized 
lacking having a uniform way of doing the foreign validations. 
We now have a very uniform scored fashion where there are 
weights against the findings in the overseas environment, so 
that we can actually provide a uniform way of doing our 
validations.
    So perhaps we are coming to a point in time where in 
certain environments with certain countries that may not be of 
a significant risk, maybe the third-party validator has a fit 
for us. So we are going to be evaluating that with new eyes, 
but to this point we have been opposed to it.
    Ms. Sanchez. Just to let you know, Commissioner, as you 
know, you can look at my record, I like federal employees. I 
think we have been having a discussion about TSA and whether we 
privatize or not, and you can certainly go back and see that I 
more than love federal employees.
    But the scope of work, if this is to work, is so large. I 
just believe that if we had others take a look at those plans 
and validate in the structure that they are actually doing what 
they say they are doing. And if this auditor or validator, 
whoever it is, sees that there are problems, gets back to you 
and says, you know, you need to come out and check this company 
here because it is not happening.
    I think there will still be more than enough work for the 
88 plus 40 plus 100 plus another 100 I think by the time we 
look at the number of companies that would love to be in the 
GreenLane to get through faster.
    So I would just ask you to consider that, and I don't know 
if anybody else has any comments other than I would like to 
hear from Chief Cunningham overall on who is on our ports and 
what do we do about the box.
    Mr. Cunningham. Who is on our ports, that is a critical 
question that quite frankly is the very foundation of our 
security or lack of. The fact that when you talk about foreign 
operators or American operators, the issue of what, the 
pleasurable things, the issues that I thought has come out of 
the Dubai discussions is that it has refocused security 
discussion on who is on our docks, and the fact that Los 
Angeles has foreign operators from Denmark and from Japan and 
Korea, and a lot of alliances that end up being both American 
and foreign operators.
    But the truth of the matter is we still don't know whether 
it's American or whether it's a foreign operator who is on our 
docks. That is probably a fear of most Americans and a fear of 
the ILWU, who is on our docks. And one way of doing that, this 
bill I hope suggests that port identification, the TWIC, would 
answer that. It would answer that. We would know who is on our 
docks and access control would be in force right now where we 
are using driver's licenses and employee IDs, and that is just 
not acceptable. That is insufficient.
    So that would answer a lot of the gaps in security that we 
find. The fact that empty containers are not being inspected, 
here again that is a cost issue with the port operator. That is 
an issue. It requires staffing. They are in the business to 
make money, and you do not make money by inspecting empty 
containers, and the risk assessment that has been done probably 
internally by their companies show that the threat, and we are 
concerned about the import and not the export of containers, so 
therefore there is very little attention paid to empty 
containers.
    One way of handling that is mandating or providing some 
type of program where empties become a part of the overall 
security plan for the entire region. That balances the playing 
field so one company does not do this and the other company 
does not do it, and therefore you will have a gap in your 
security.
    The issue with that customs has with the containers, what 
is in the box, that is so complicated. It is very, very 
complicated. The only solution, I believe, is just layers and 
layers of security that would deter the bad buys. It begins 
with enough will from the administration to begin the overseas 
examination, the inspection overseas. That is the first layer 
and that is probably the most important layer.
    The secondary layers are those layers that take place in 
between, routine and unpredictable inspections by the Coast 
Guard in regards to vessel inspections, as well as container 
inspections, and then the layers that are there on the land-
side at the ports. So it is a layered approach, and we are 
years away from having 100 percent inspection.
    If Customs was to attempt to just up it 1 or 2 percent, I 
can imagine it would slow down our economy to the extent that 
we would all say why are our prices going up so high. So it is 
a very complicated equation that has to be balanced. But 
security foremost begins overseas, I believe, on the container 
business.
    Mr. Lungren. Mr. Dicks from Washington is recognized for 5 
minutes.
    Mr. Dicks. I regret that I wasn't here for the whole 
hearing. I just had something I had to do. This is a very 
important issue.
    I want to just, there was a recent article written by Steve 
Flynn and James Loy, former commandant of the Coast Guard. One 
of their major points was since the United States cannot own 
and control all the systems, we must work with our trade 
partners and foreign companies to ensure security. A major step 
in that direction would be to construct a comprehensive global 
container inspection system that scans the contents of every 
single container destined for America's waterfront before it 
leaves a port, rather than scanning just a tiny percentage we 
do now.
    This is not a pie-in-the-sky idea. Since January 2005, 
every container entering the truck gates of two of the world's 
busiest container terminals in Hong Kong has passed through 
scanning and radiation detection devices. Images of the 
containers' contents are then stored on computers so they can 
be scrutinized by American or other Custom authorities almost 
in real time. Custom inspectors can then issue orders not to 
load a container that worries them.
    Now, they were talking like there are four or five 
companies that have about 80 percent of the containers that 
come to the United States. If they would impose a $20 fee like 
we have on aviation, that would provide the resources that the 
administration has filed to provide to do this job right.
    I would like to get a reaction to this proposal from the 
panel.
    Mr. Ahern. I think first from the Customs and Border 
Protection perspective, sir, I would tell you, and I did speak 
to this earlier in the hearing today, that the ICIS model that 
currently is in operation in the port of Hong Kong has been 
overstated, given its current capability. There is one lane in 
one of the terminals that is currently operational. There is no 
operational protocols or threshold settings or concept of 
operations that are in place. The technology is footprinted 
there, but it is not currently in any kind of an operational 
mode that has been official.
    Having said that, I believe it is very important for us to 
take a look at the capabilities of a concept like that, putting 
it in an overseas environment. I think it is extremely 
complementary to our CSI ports where we would then have that 
technology.
    Mr. Dicks. Yes, it fits right in with the container 
security initiative. Right?
    Mr. Ahern. Absolutely. It is completely in line with 
pushing our borders out, having the opportunity to scan and 
screen before they are placed on a vessel for lading.
    Mr. Dicks. Has the administration looked at this to see if 
this would be, I mean, it is under the container security, do 
you guys run the container security initiative?
    Mr. Ahern. Yes.
    Mr. Dicks. Have you looked at this concept?
    Mr. Ahern. I was there in October of this past year.
    Mr. Dicks. I mean, you were there, but what have you done?
    Mr. Ahern. We are currently in dialogue with the commercial 
vendor that provides the technology package. We have actually 
got 21,000 data files that have been collected from the 
computer that actually ran the containers, again with no 
response protocols to take a look at what that actually might 
mean for nuisance alarms or regular recurring alarms, given 
some of the commodities or even background threshold radiation 
that would alarm us. Those need to be resolved before they are 
placed onboard a vessel for the United States.
    The other thing we need to be reminded of also as far as 
the capabilities in the private sectors is when I met with them 
over there, they are very interested in investing in this and 
making the capital investment to put that there.
    Mr. Dicks. Hutchison is one of the leading companies in 
this, and they have said that they are going to do their Hong 
Kong-style inspection system in place within its 42 ports.
    Mr. Ahern. They are certainly one of the leaders on this 
front and they were there when I was there at the same time in 
October.
    The other point I think that is very important to realize 
here, too, is the private sector can certainly invest and 
deploy this there.
    Mr. Dicks. They have no choice because the administration 
has refused to put the money up that the Coast Guard needs to 
do the job.
    Mr. Ahern. They could certainly invest and put it there 
anywhere throughout the world that they like. However, one of 
the things that needs to be worked through as far as who is 
going to respond to the alarms, and there will be alarms that 
will come in every single day and every hour of every day that 
will alarm, that are nuisance or false positive alarms that 
need to be resolved by some government authority.
    The United States government does not have authority in a 
sovereign nation. When we have gone out and negotiated our 
declaration of principles, we have to go and work through the 
host country counterparts. They would have to take on the 
responsibility.
    Mr. Dicks. Couldn't Hutchison in this case go out and 
inspect the container?
    Mr. Ahern. I don't think that that has been thought through 
at this point in time, and I am not sure certainly that?
    Mr. Dicks. How many more years is it going to take us to 
think through these kind of issues?
    Mr. Ahern. I think it is not quite as simple as you might 
like. We certainly are moving very aggressively. We are engaged 
with the private sector. We are looking at the data so we can 
make?
    Mr. Dicks. Eighty-eight inspectors to monitor the 
compliance of the 5,800 importers who have vowed to secure 
their goods as they travel from factories to ship terminals 
doesn't look to me like an overwhelming response; 88 
inspectors. That is appalling.
    Mr. Ahern. That is for the C-TPAT program.
    Mr. Dicks. Yes.
    Mr. Ahern. That is not for CSI.
    Mr. Dicks. And the Coast Guard has got 20. How many people 
do we have in the container security initiative?
    Mr. Ahern. Approaching 200.
    Mr. Dicks. Worldwide?
    Mr. Ahern. At the 43 ports.
    Mr. Dicks. That is not very many either, if you are serious 
about trying to do something about it.
    Now, Captain Salerno, let me ask you another question. Does 
anybody else want to comment on this one first?
    Mr. Pentimonti. Just a quick comment. The industry, you 
mentioned the four carriers, we are excited about the concept 
of figuring out better what is inside our boxes. There is no 
doubt. We, as Mr. Ahern has indicated, we are interested in 
investing. Obviously, the complexity of doing this in a foreign 
location and getting response from CBP on these signals is 
probably the most concerning issue.
    Obviously, we can, with the technology, take the pictures 
of what is inside the box, but for it really to improve 
security immediately, we would have to have a response so that 
we would know whether a further physical inspection were needed 
or in fact the box was allowed to be loaded safely on a ship, 
recognizing that what those pictures showed was what they 
should have showed.
    It is that evaluation that I think, as I testified, needs 
some resources and needs some attention that CBP has not 
provided, that I believe funding is direly needed to take it 
forward.
    Mr. Dicks. So it is the inspection part, it is once you 
have decided there may be an issue, then where are the people 
from our side to go in and look at it?
    Mr. Pentimonti. The 80 percent of the volume that comes 
into the United States, as you suggest, from possibly four of 
these terminal operators globally, yes, I think the investment 
to do that, it would fit easily. But being able to take that 
data and have it usable so that we could make a determination, 
or a determination could be made that that container should be 
loaded and is safe to be loaded and should not be set aside to 
be inspected, that is really the critical step that needs to be 
developed in this system. We agree wholesomely with what Mr. 
Ahern has said that that development is something which needs 
to be done.
    Mr. Dicks. I want to go back to the captain here. The 
administration has long underfunded port security efforts 
despite the Coast Guard identifying more than?
    Mr. Lungren. Does the gentleman ask for unanimous consent 
for a couple of additional minutes?
    Mr. Dicks. A couple of additional minutes.
    Mr. Lungren. Without objection.
    Mr. Dicks. Thank you, Mr. Chairman.
    The Coast Guard identifying $5 billion in terms of American 
ports to comply with the Maritime Security Act. The same 
assessment showed that more than $2 billion would be needed to 
meet the additional guidelines issues by the International 
Maritime Organization, totaling about $7.4 billion over 10 
years and about $1.4 billion for immediate needs. Although 
Congress has made an effort to provide funding, $125 million in 
2004, $150 million in 2005, $175 million in 2006, $913 million 
since 9/11, the administration has requested only $46 million 
in targeted funding for port security.
    Why is this, Captain? Why is there such a huge disparity 
here? And what would this money, if it was appropriated, what 
would it be used for? What kinds of things are you doing with 
this port security money? Why is this great discrepancy between 
what you found when you did the Maritime Transportation 
Security Act?
    Captain Salerno. Sir, the $7 billion for the MTSA 
implementation over a 10-year period was an economic estimate 
of the cost to industry to put into place the measures that 
were required.
    Mr. Dicks. So it was never contemplated that the government 
would fund this?
    Captain Salerno. No, sir.
    Mr. Dicks. Has the private sector funded it?
    Captain Salerno. That was intended to be a cost borne by 
the private sector.
    Mr. Dicks. Have they funded it?
    Captain Salerno. Yes, sir, they have.
    Mr. Dicks. The $7 billion?
    Captain Salerno. Well, the costs, this is over a 10-year 
period, that was projected in the rulemaking. We are not 
tracking the actual costs to private sector for the 
implementation. That was a cost estimate over that 10-year 
period.
    Mr. Dicks. Well, it certainly hasn't registered high on the 
administration's list of priorities if they have only requested 
$46 million for this over 4 or 5 years. Isn't that correct?
    Captain Salerno. Sir, are you referring to the grant 
proposals?
    Mr. Dicks. Yes.
    Captain Salerno. Okay.
    Mr. Dicks. Funding for port security.
    Captain Salerno. The grants as designed were not intended 
to fully provide the costs of the implementation of these 
measures. They were as an assistance for special needs, but not 
intended to fully fund the cost of implementing MTSA.
    Mr. Dicks. Okay, what kinds of things are they doing with 
the money?
    Captain Salerno. Well, there are a variety of measures that 
are in place, or that are proposed by the individual ports and 
individual facilities and vessel operators, depending on the 
vulnerabilities that they have identified and have brokered 
through the captain of the port and the Area Maritime Security 
Committee. These are sent up to a national process and they are 
evaluated and they compete for the amount of money that is 
available.
    Mr. Dicks. Okay. Give us a few examples, if you could, of 
what they are doing with that money.
    Captain Salerno. Some facilities have put in for grants for 
physical barriers, fences, cameras, that sort of thing. Some 
have put in in the early stages for vulnerability assessments. 
We are pretty much past that phase now.
    There is just a number of things as they go through their 
vulnerabilities and they try to close gaps, they can put in for 
it. Public service organizations, for example, police 
departments that have port security functions have put in for 
communications equipment. So there is a wide range of grant 
requests that have been submitted over the years.
    Mr. Lungren. The gentleman's time has expired.
    Mr. Dicks. Yes, thank you for the extra time, Mr. Chairman. 
I appreciate it.
    Mr. Lungren. The gentlelady from California, Ms. Harman, is 
recognized.
    Ms. Harman. Thank you, Mr. Chairman.
    Congressman Dicks's questions point up the need, and I 
think I know the whole panel agrees, for a more comprehensive 
strategy for port security, more money obviously, but targeted 
at risky ports, and at multi-year improvements, which is 
something that this bill does.
    I think this legislation as it will emerge from the House 
will include a lot of things that will help achieve the good 
suggestions made by our panel and the good suggestions made by 
some in the audience like the ILWU. In that connection, I would 
like to strongly endorse something that Ranking Member Sanchez 
said, and that is more formal port security training and better 
terminal evacuation training for the ILWU. It is something that 
they need. They have requested it. Hopefully, the owners 
association at the ports of L.A. and Long Beach will respond 
favorably.
    I want to ask just a couple of questions to follow-up on 
some of the comments already made. First of all, Mr. Cunningham 
was talking about the importance of TWIC cards. As I understand 
it, a regulation is long overdue out of DHS on TWIC cards. It 
is something I have spoken to Secretary Chertoff about. I wrote 
him a little friendly reminder yesterday.
    So one question is, where are we with that, and do you 
agree about the importance of knowing who is on the ports and 
having a standard system to make sure they are who they say 
they are? That is number one.
    Second question, and it was addressed I think by Mr. Ahern, 
but I am not sure, and that was about the resumption of trade. 
You said that the report there, or the plan on resumption of 
trade has been delayed so that it can incorporate the lessons 
learned from Katrina. I think all of us would like to learn the 
lessons from Katrina, but I hope that they will not further 
delay this report. Should we have a major attack tomorrow, I 
would want to know, I do want to know, and I am asking you, 
what are our plans for resumption of trade?
    We had, as I mentioned earlier, a real-life example of what 
the costs of a labor lockout look like, and they are huge. So 
unless we have a plan in place soon, I predict that we will not 
only not learn the lessons of Katrina, but we will repeat 
Katrina. So please answer, this is for the two DHS witnesses, 
please answer my question about TWIC cards and about how much 
longer do we have to wait for the resumption of trade plan.
    Captain Salerno. I will address the TWIC. Certainly, in the 
aftermath of the Dubai Ports case, there has been renewed 
emphasis on coming up with a rulemaking on the TWIC. Not that 
it has been sitting idle. Over the past few years, there has 
been quite a bit done. Coast Guard participates with TSA on 
this. TSA has the lead, but there have been some technological 
obstacles. There has been a lot of discussions about what the 
vetting principles should be and so forth.
    The work group has been working very hard, certainly in the 
last few months, to look at ways to accelerate this process, 
and the best I can tell you at this point is that we would 
anticipate a statement from the secretary within the next few 
weeks on where that stands.
    Is it important? Absolutely. There is a significant 
vulnerability in our port security framework that the TWIC will 
address once it is finalized.
    Mr. Ahern. I think to give a full answer, going back to the 
statements I made about the HSPD 13 and NSPD 41, there are 
several elements that are approved. The maritime domain 
awareness, MDA, has been approved. The global maritime 
intelligence integration plan has been approved. When we take a 
look at the MOTR, the maritime operational threat response, the 
agency roles and responsibilities, that has been approved and 
placed, and that gives us kind of the temporary fit until the 
maritime incident recovery plan gets done.
    Certainly, as we did demonstrate at least within our 
component within the Department of Homeland Security, when we 
were able to close ports and redirect traffic, the commissioner 
of Customs and Border Protection has the authority to close or 
suspend activities and redirect it to other locations so that 
we can have continuity of operations, not suspend and then 
recover, which I think is a key thing as we go forward, is not 
hopefully to have to suspend and then begin recovery or 
resumption; that we try to keep it running for continuity of 
operations, and that is what we were able to maintain with 
moving vessels throughout the gulf to other locations, making 
sure that we also took a look at foreign-flag vessels under the 
Jones Act moving between ports to put relief efforts forward, 
and continue to keep trade going in this country as we were 
responding to the disaster of Katrina.
    Ms. Harman. Well, I think that is an answer better than my 
question. Continuity of trade is much better than resumption of 
trade, and the TWIC program is absolutely critical. It should 
not just be a pilot project at a few ports. It should be a 
national program, and I hope you are hearing the urgency, at 
least that I attach to it.
    Thank you, Mr. Chairman.
    Mr. Lungren. I thank you.
    I thank all the members of the panel for testifying, for 
giving us your valuable testimony, and all members for their 
questions.
    The members of the committee may have some additional 
questions for you in writing and they would ask you to respond 
to those in writing. The hearing record will be held open for 
10 days.
    And without objection, the committee stands adjourned.
    [Whereupon, at 2:16 p.m., the subcommittee was adjourned.]