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

                               H.R. 4954,
                           THE SAFE PORT ACT


                              FULL HEARING

                               before the

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION


                             APRIL 4, 2006


                           Serial No. 109-71


       Printed for the use of the Committee on Homeland Security


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/


36-697                      WASHINGTON : 2007
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                   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


                            C O N T E N T S



The Honorable Peter T. King, a Representative in Congress From 
  the State of New York, Chairman, Committee on Homeland Security     1
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, Ranking Member, Committee on 
  Homeland Security..............................................     2
The Honorable Donna M. Christensen, a Delegate in Congress From 
  the U.S. Virgin Islands........................................    25
The Honorable Tom Davis, a Representative in Congress From the 
  State of Virginia..............................................    17
The Honorable Peter A. DeFazio, a Representative in Congress From 
  the States of California.......................................    22
The Honorable Bob Etheridge, a Representative in Congress From 
  the State of North Carolian....................................    34
The Honorable Jane Harman, a Representative in Congress From the 
  State of California............................................    18
The Honorable James R. Langevin, a Representative in Congress 
  From the State of Rhode Island.................................    36
The Honorable Sheila Jackson-Lee, a Representative in Congress 
  From the State of Texas........................................    39
The Honorable Daniel E. Lungren, a Representative in Congress 
  From the State of California...................................    20
The Honorable Edward J. Markey, a Representative in Congress From 
  the State of Massachusetts.....................................    29
The Honorable Bill Pascrell, Jr., a Representative in Congress 
  From the State of New Jersey...................................    32
The Honorable Stevan Pearce, a Representative in Congress From 
  New Mexico.....................................................    24
The Honorable Dave G. Reichert, a Representative in Congress From 
  the State of Washington........................................    27
The Honorable Mike Rogers, a Representative in Congress From the 
  State of Alabama...............................................    31
The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California........................................     2
The Honorable Rob Simmons, a Representative in Congress From the 
  State of Connecticut...........................................    14

                                Panel I

The Honorable Michael P. Jackson, Deputy Secretary, Department of 
  Homeland Security:
  Oral Statement.................................................     5
  Prepared Statement.............................................     7

                                Panel II

Mr. Clark Kent Ervin, Private Citizen, Former Inspector General, 
  Department of Homeland Security:
  Oral Statement.................................................    58
  Prepared Statement.............................................    60
Mr. Jonathan E. Gold, Vice President, Global Supply Chair Policy, 
  Retail Industry Leaders Association:
  Oral Statement.................................................    51
  Prepared Statement.............................................    54
Mr. Christopher L. Koch, President and CEO, World Shipping 
  Oral Statement.................................................    42
  Prepared Statement.............................................    44
Ms. Bethann Rooney, Manager of Port Security, Port Authority of 
  New York and New Jersey:
  Oral Statement.................................................    61
  Prepared Statement.............................................    63

                   H.R. 4954, TO IMPROVE MARITIME AND
                             CARGO SECURITY


                         Tuesday, April 4, 2006

                     U.S. House of Representatives,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The committee met, pursuant to call, at 2:04 p.m., in Room 
311, Cannon House Office Building, Hon. Peter King [chairman of 
the committee] presiding.
    Present: Representatives King, Davis, Lungren, Simmons, 
Rogers, Pearce, Reichert, Dent, Brown-Waite, Sanchez, Markey, 
Harman, DeFazio, Jackson-Lee, Pascrell, Christensen, Etheridge, 
Langevin, and Thompson.
    Chairman King. [Presiding.] The Committee on Homeland 
Security will come to order.
    The committee is meeting today to hear testimony on H.R. 
4954, the Security and Accountability for Every Port Act, known 
as the SAFE Port Act.
    My opening statement will be very brief, but I want to at 
the very outset commend Chairman Lungren, who I know is going 
to be here in just several minutes, and also Congresswoman 
Harman and Subcommittee Ranking Member Ms. Sanchez for the 
excellent job they have done in coming up with the SAFE Port 
    It was legislation which last week passed the subcommittee 
by voice vote, and enjoyed broad bipartisan support. I believe 
it is a very significant step forward in addressing an issue 
which is obviously essential if we are to have true homeland 
security. If there was anything positive to come out of the 
whole Dubai Ports issue, it was an awakening of the American 
people as to just how important port security is.
    Our committee scheduled these hearings and legislation on 
port security before Dubai Ports, but that certainly gave us an 
opportunity to take advantage of that moment, of that window of 
opportunity to move the legislation forward. I certainly look 
forward to the testimony of the witnesses today, each of whom 
is an expert in this field, which again is so vital.
    Coming from New York, where I suffered the loss of many 
constituents on September 11, I have a very keen awareness of 
just how vital the whole issue of homeland security is, and 
also having the Port of New York and New Jersey right there in 
lower Manhat-
tan and New Jersey again drives home to me how vital it is, and 
how essential it is that we do protect our ports.
    All of us know how vital port activity is. We know the 9 
million to 11 million containers that are shipped into our 
country. We know the devastating impact that could result from 
either an attack on our ports or a dirty bomb going off in our 
ports. So this is an issue which must be addressed. I strongly 
believe that this legislation as it is written now is a very, 
very positive step. There may be some changes made as we go 
forward. It is my intention to have the full committee hearing 
today and then schedule a markup the week of April 24, probably 
on April 26 will be the day we actually do the marking up of 
the legislation. And then hopefully get it to the House floor 
as soon as possible after that as we can.
    Also, our committee and subcommittee have been working 
closely with Senator Collins, Senator Murray, and Senator 
Lieberman in the Senate as they go forward with their 
legislation. In many ways, our legislation parallels theirs, or 
theirs parallels ours. So if we can again keep this process 
going and get bipartisan legislation coming out of the 
committee, coming out of the House, legislation which is 
closely synchronized with the legislation coming out of the 
Senate, I think we can see real progress being made this year.
    As I speak, the chairman of the subcommittee which has done 
such yeoman work has entered the room. I want to again, while 
he is here, publicly commend him for the leadership he has 
shown, along with Ms. Harman and Ms. Sanchez.
    So with that, I yield to the distinguished ranking member 
from Mississippi, Mr. Thompson.
    Mr. Thompson. Thank you very much, Mr. Chairman.
    I, too, join the chorus of platitudes for this bipartisan 
legislation. What I would like to do is to give the ranking 
member of our subcommittee my time to speak on this effort, Ms. 
Sanchez. She has been very interested and involved in this 
process. So if I may, I would yield the balance of my time to 
    Chairman King. Surely, and she can have additional time 
after that if she wishes on her own.
    Ms. Sanchez?
    Ms. Sanchez. Thank you, Ranking Member Mr. Thompson. I 
appreciate all the help that you have given us on this bill, 
and also to you, Chairman King, for the way both of you have 
brought this up in a very bipartisan manner.
    I would also like to commend Chairman Lungren for his 
willingness to work with me and others on this committee to 
achieve what I thought was a very successful subcommittee 
markup last week.
    And of course, I want to thank the witnesses that are 
before us today to testify. I am hoping that we get more 
information so we make this bill even better as we move forward 
to mark it up in committee when we come back from the spring 
    One of the biggest questions that I have today is regarding 
a CBP request from February 8, 2006 soliciting short-term 
private contractors to be hired by CBP to perform C-TPAT 
validations. I guess I am a little frustrated and disappointed 
that Assistant Commissioner Ahern didn't mention the 
solicitation at our March 16, 2006 subcommittee hearing on the 
SAFE Port Act, when I specifically asked him about CBP and 
whether it would consider using third party entities to 
validate C-TPAT member security plans. And then later I find 
out that you actually have an RFP out there on the market that 
was dated before the March 16 meeting.
    All of us on this committee are committed to improving our 
nation's security, but if CBP and the Department of Homeland 
Security refuse to communicate and share basic information with 
us, that makes it really difficult for many of us to do our 
job. I would like to ask unanimous consent, Mr. Chairman, to 
add a copy of the February 8, 2006 CBP solicitation for 
contractors to work on C-TPAT validations to the record. \1\
    \1\ See the committee file.]
    Chairman King. Without objection, so ordered.
    Ms. Sanchez. And, Deputy Secretary Jackson, I am looking 
forward to getting some answers to several questions I have on 
the topic of that solicitation. In addition, I believe that it 
is a good opportunity to get feedback on the current bill. I am 
interested in the C-TPAT section of the bill, on the need for 
the implementation of the TWIC card, and what we can do to 
improve our ability to know what is in the box, what is in the 
container before it lands on our shores.
    I hope that our discussion today will provide analysis of 
the current provisions of the SAFE Port Act, of which I 
continue to be a proud cosponsor. I also hope that this will be 
an opportunity for our witnesses to provide additional 
information as we go into full committee markup.
    Thank you, and I yield back my time to Mr. Thompson, who 
will yield back, I guess, to the chairman.
    Mr. Thompson. Thank you very much. I yield back, Mr. 
    Chairman King. I thank the gentlelady for her statement.
    I now recognize the chairman of the Subcommittee on 
Economic Security, Infrastructure Protection and Cybersecurity, 
the gentleman from California, Mr. Lungren.
    Mr. Lungren. Thank you, Mr. Chairman.
    I would like to begin by commending your commitment to this 
issue on port security. No one can question whether or not this 
is something the committee would like to move on. Already we 
have held a hearing and a markup on the legislation at our 
subcommittee level. We will be meeting in markup session at the 
full committee level after the Easter recess. I understand that 
the leadership is committee to a floor date for this bill at 
the beginning of May.
    In this Congress, the Committee on Homeland Security was 
very involved in passing the Border Security and Terrorism 
Prevention Act. We now look to pass port security legislation. 
So these are important times for our committee, ones in which 
we continue to establish our jurisdiction. But more 
importantly, we work to perform oversight over the Department 
of Homeland Security in such a manner that allows flexibility 
for the secretary, while still ensuring that those of us on 
this committee are held accountable to our constituents that we 
are elected to protect.
    The Security and Accountability for Every Port Act, or the 
SAFE Port Act, has one primary aim: to push the United States's 
security borders out. It is my belief, shared by many, that if 
the terrorist threat reaches our shores, it is far too late. 
The SAFE Port Act, rather, works to build on the multi-layered 
defense that the administration has established so that we 
ensure security and accountability at each step in the global 
supply chain, from factories overseas to the United States 
seaports and everything in between.
    I would say the legislation has three key ideas: first, 
enhancing security at U.S. ports by establishing a risk-free 
port security grant program with, and this is very important, 
dedicated funds from customs duties requiring the 
implementation of the TWIC or transportation worker 
identification credential, sooner rather than later, and I 
stress sooner. Actually, I just stress getting it done, and 
then furthering the deployment of radiation detection 
    Second, preventing threats from reaching the U.S. by 
authorizing through legislation and improving upon two Customs 
and Border Protection cornerstone security programs, the CSI, 
the Container Security Initiative and the Customs-Trade 
Partnership Against Terrorism, that is C-TPAT.
    And third, tracking and protecting containers en route to 
the U.S. by improving our ability to detect high-risk 
containers through strengthening our automated targeting 
system, establishing container security standards, and 
supporting additional cargo security research and development, 
including reviving the Operation Safe Commerce.
    Again, I thank the chairman for taking up this important 
piece of legislation in this committee. I disagree with those 
who say that nothing has been done to secure our ports. Much 
has been done, but much, much more remains to be done. This 
bill is not contradictory with what the administration has 
done, but rather builds on the foundation it established, but 
we need more than a foundation. We need a super-structure of 
legislation which means real, live programs that have a 
continuing basis.
    I would like to thank the ranking member of my 
subcommittee, Ms. Sanchez, for the work that she has done on 
this. I would also like to thank Congresswoman Jane Harman for 
co-authoring the bill with me as well. We were working on this 
long before the Dubai controversy erupted. The Dubai 
controversy allows a focus on this issue, which we may not 
otherwise have had. I think it assists us in moving forward 
with all due dispatch. I think it is a testament to the 
leadership and direction of the committee that partisanship has 
been put aside in order to create laws to protect our homeland.
    I thank you, Mr. Chairman.
    Chairman King. I thank the gentleman for his statement, and 
again commend him for his leadership on this issue.
    Let me remind members, but under our committee rules, 
opening statements are limited to the chair and ranking 
members. However, all members are entitled to submit opening 
remarks for the record.
    With us on our first panel today is the deputy secretary 
for the Department of Homeland Security, the Honorable Michael 
Jackson. Mr. Jackson is doing a fine job, an outstanding job, 
and is certainly dedicated to this country. He has proven it in 
the past and he is demonstrating it more in his service today 
at the Department of Homeland Security.
    Mr. Jackson, as we discussed, your full statement will be 
made part of the record. If you could try to keep your remarks 
to 5, 7, 8, minutes, it would be greatly appreciated. I can 
assure you that there will be many questions asked by both 
sides of the aisle here.
    So with that, I recognize Secretary Jackson.


    Mr. Jackson. Thank you, Chairman King, and thank you, 
Ranking Member Thompson. I am very grateful to this committee 
for the work that they are doing and grateful for the 
opportunity to talk today.
    Maritime security is an important and vital part of our 
overall homeland security work. We are confident that we have 
made transformational progress since 9/11, but I am very much 
in agreement with the members who have stated that much remains 
to do ahead. We need to and we will build upon the base that we 
have created, but there is much more work to do.
    Since September 11, we have put significant resources at 
this. We are spending at the rate of about $2.5 billion this 
year on maritime security. And if the president's fiscal year 
2007 budget is enacted, we will have spent some $9.6 billion in 
the period fiscal year 2004 to fiscal year 2007.
    Today, I would like to talk particularly about the path 
ahead to strengthen cargo security from a risk perspective. We 
have focused at the department principally on weapons of mass 
destruction, not exclusively, but this very high-risk and very 
high-consequence threat merits particular focus. I am going to 
start by just talking about a couple of principles that we 
bring to this table. I think honestly they are very much 
embedded in the work that the committee has done and that the 
subcommittee has done in this area, very much in intellectual 
and philosophical alignment about the approach.
    First, what we are looking for is a layered system 
supporting a global network. We are looking for multiple, 
mutually reinforcing tools which can prevent single-point 
failure, so it is actually multiple tools around this network 
that we have to focus on. Some layers are more immediate and 
obvious, like screening a container. Others like nuclear 
nonproliferation, help us provide a context where we can 
guarantee that this work is made more solid.
    Security is seldom adequately delivered via a single silver 
bullet. It begs the obvious, but we have to note that the 
framework for this, it is a global system. We don't control all 
the moving parts. Most of this work is done in the private 
sector. The vast bulk of it is done in the private sector. It 
also involves work with multiple foreign governments.
    To push security out the border has been a second principle 
that we have to face, and it is one that is embedded in the 
SAFE Port Act today that we are discussing. It strengthens our 
hand to partner with governments, so this is a third element 
that we consider crucial to our success, a series of 
government-to-government partnerships and also leveraging 
groups such as the World Customs Organization, the 
International Maritime Organization, and the International 
Standards Organization. So that is the context for it.
    There are really eight moving parts to this equation. Your 
bill in one way or another touches these eight moving parts. 
First, the components are vessel security, personnel security, 
port infrastructure security, and cargo security or the 
security of container and break-bulk moving through the system. 
If you take those four elements and you say we have to address 
them both domestically and internationally, you have eight 
components to focus in the work that we have ahead.
    I would like to start just by beginning briefly to discuss 
two particular areas that I think offer high up-side potential 
for increasing security. First is a series of things that we 
collect under the idea of secure freight; and second is TWIC, 
the transportation worker identification card. I will just say 
a word about those and a word about the bill, and then I would 
be happy to take questions, sir.
    On the first, what we have in the initiative that Secretary 
Chertoff has launched under the name of secure freight, really 
captures some of the core moving parts that you are also 
discussing in your legislation. First it is better targeting; 
and second, it is enhanced inspection tools.
    Better targeting, the automated targeting system, ATS, is a 
first-generation tool to gather data about what is in-bound, 
essentially by scraping the weigh-bill electronically and by 
comparing this with a large historical database about container 
movements abroad. We augment that by conversations in the CSI 
program, the Container Security Initiative program, on a port-
to-port conversation so that when we find a container of 
concern, we then can drill down with those officials and bring 
additional data to the table.
    This is a first-generation tool. It is a good tool. It is 
not a perfect tool. The next generation tool we would like to 
suggest really requires us to re-think in a much more 
aggressive and innovative way what data we get, how we fuse it 
together, how we collect it, and how we share it 
internationally, and how we use it to drive the container 
profiling that needs to happen when we go into an assessment of 
each container.
    I won't try to unpack that fully, but I would just say that 
I think that we can gather data that exists in multiple 
entities' databases, fuse it together in effect to create a 
pre-history of container movement that will allow us to 
understand much more clearly the risk associated with that 
particular move.
    Second, enhanced inspection tools. Better detection systems 
can be deployed both at home and abroad. At home, our goal is 
to have 100 percent inspection of all containers as they depart 
U.S. ports into the country. Abroad, our goal is to increase 
materially the number of containers inspected by radiation 
detection tools and by non-intrusive inspections such as large 
X-ray-type of devices.
    The Domestic Nuclear Detection Office, which I am very 
grateful to the committee for authorizing, is focused on 
bringing a new generation of tools here. Secretary Chertoff is 
just returning from a trip overseas to Asia and has inspected 
the integrated container inspection system, the ICIS pilot. 
After extensive discussion with industry, we believe that this 
pilot and its underlying technology and business concept offers 
a very valuable opportunity for us to strengthen in a 
significant way the data that we are gathering.
    Second, I would like to talk just a little bit about the 
transportation worker identity card. We can talk in 
conversation. I am just going to tell you, Mr. Chairman, we are 
committee to this. Chairman Lungren, we are committed to this. 
We are sharing the same view that you have. Get it done, get it 
out and get it going. It has been too long in coming. I want to 
tell you that we are prepared to do exactly that.
    On this particular legislation, we share many, many things 
with you in agreement. There are some tweaks and suggestions 
that we have. We believe that the work of the manager's 
substitute and particularly the work, Chairman Lungren, that 
you have done, and Congresswoman Sanchez, Congresswoman Harman, 
we are very, very grateful for the cooperation that you have 
brought to this. We think that there are very valuable tools 
    I have already talked about the next generation of ATS. The 
bill calls for increases and improvements here. We are 
committed to doing that. That is what secure freight is about. 
We are open to ideas also. The radiological threat we have 
talked about, and the tools that we bring to this, are part of 
what you are talking about. You have asked for strengthening C-
TPAT and CSI. We are in agreement that we need to do so.
    You have authorized the creation of an under secretary for 
policy office that would be focused on cargo security. We are 
in agreement. I will tell you that I have already interviewed 
people for this position and we are preparing to move right 
ahead with is.
    Port security grants, we would ask you to consider the 
administration's proposal for transportation infrastructure 
protection programs which would bundle maritime security and 
transit security and a few other programs together. As we look 
from time to time at changes in the risk profile, we see that 
we would like flexibility at the local level for us to be able 
to put significant funds into infrastructure protection at the 
local level and to give discretion there. We think bundling 
them offers a significant opportunity.
    So, Mr. Chairman, I will just stop here and say that I am 
very grateful for the work that the committee has done. I am 
eager to continue to work with you, and I look forward to 
passage of a bipartisan piece of legislation that will help us 
strengthen our work in the maritime domain.
    [The statement of Mr. Jackson follows:]

             Prepared Statement of Hon. Michael P. Jackson

    Chairman King, Ranking Member Thompson, and members of the 
Committee, I am pleased to be here today to discuss maritime cargo 
security in general, and in particular H.R. 4954--The SAFE Port Act.
    Maritime security has been important to the United States since its 
earliest days. Today we have an efficient maritime transportation 
system that acts as the backbone of the global economy. That 
transportation system can also be used to move dangerous cargo to our 
ports and cities. Any disruptions to that system will have immediate 
and lasting consequences for our economy and the world at large. The 
Department of Homeland Security (DHS) commends the work of this 
Committee in addressing the vulnerabilities of containerized cargo. Our 
leadership is grateful to this Committee for this hearing and your work 
to pass important legislation to strengthen maritime cargo security.
    Since September 11, 2001 we have made transformational improvements 
in the extent and quality of the layered system of systems now deployed 
to strengthen cargo security. This year, the DHS will spend $2.5 
billion on maritime security. Overall, the Federal Government is 
spending $2.8 billion, including the Department of Energy's Megaports 
program. If the President's FY 07 budget is enacted, we will have spent 
some $9.6 billion in this area in four years (FY04-FY07).
    Today I would like to talk particularly about the path ahead to 
strengthen maritime cargo security from a risk perspective. We have 
focused specifically on the Weapons of Mass Destruction (WMD) threat 
because of its potential impacts, but I will also touch on measures 
that will strengthen our ability to detect all forms of contraband.
    A Layered System of Systems Supporting a Global Network. First, a 
brief word about our overall approach to maritime cargo security. Our 
security doctrine is grounded on a commitment to deploy a strong, 
layered system of security systems. By deploying multiple, mutually 
reinforcing security layers and tools, we diminish the risk associated 
with failure at a single point. Some layers may have a more immediate 
and obvious security function, such as the physical inspection of a 
container by Customs and Border Protection (CBP) field agents. Others, 
such as the Administration's work in global nuclear non-proliferation 
are complementary, aimed at making it more difficult to acquire WMD 
components. Security is seldom adequately delivered via a single silver 
    It begs the obvious, but bears noting, that we are talking about a 
global supply chain that serves an interdependent global economy. Thus, 
a second doctrinal component of our cargo security strategy has been, 
where possible, to push security measures out beyond our borders. Close 
partnerships with the private sector are essential because the private 
sector owns most of the assets and moves the goods. CBP's Customs-Trade 
Partnership Against Terrorism (C-TPAT) is an example of such a 
partnership program.
    It strengthens our hand to partner closely with other governments, 
which is why bilateral and multilateral solutions to supply chain 
security continue to be a focus for this Administration. The Container 
Security Initiative (CSI) and our work with the World Customs 
Organization, the International Maritime Organization and the 
International Standards Organization have improved security.
    Existing Security Architecture. The existing security architecture 
consists of four core components: (1) vessel security; (2) personnel 
security; (3) cargo security; and (4) port facility security. Some 
elements of each of these four components are focused abroad, others at 
home--thus there are essentially eight areas of activity that capture 
most of the programmatic focus of our supply chain security work. The 
draft legislation that is the focus of this hearing appropriately seeks 
to strengthen most of these categories.
    I would like to discuss two particular areas that present 
significant near-term upside for improving security: (1) improvements 
regarding DHS's targeting of highest-risk containers and our tools used 
to inspect containers; and (2) deployment of the Transportation Worker 
Identification Card for unescorted access to U. S. ports.
    Secure Freight. The Department's Secure Freight initiative has two 
major components: better targeting and enhanced inspection tools.
    Better Targeting. CBP's Automated Targeting System (ATS), which is 
used by the National Targeting Center and field targeting units in the 
United States and overseas, profiles inbound cargo and identifies high-
risk cargo 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 therefore should be scrutinized overseas or at the 
port of entry.
    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 
container scores are divided into thresholds associated with further 
action by CBP, such as document review and inspection.
    ATS is an extraordinarily powerful ``first generation'' tool, and a 
more sophisticated, next-generation tool is under development at DHS as 
part of the Secure Freight initiative. ATS data is derived from filings 
of cargo waybills and an extensive historical risk scoring algorithm 
derived from years of data about containers and inspections.
    The next-generation tool will fuse existing data along the supply 
chain gathered from multiple actors who touch the box from the order, 
to container origin, to destination. This data aggregation would, in my 
view, best be fused by a third party intermediary--perhaps formed by 
the industry itself. The U.S. government would then receive this richer 
set of data about each container move in advance of lading overseas. It 
would then inform CBP's container risk assessments. Ideally, the U.S. 
government would certify one or more such qualified entities formed for 
this purpose, and would set standards for such data fusion. The 
intermediary would be rigorously audited.
    This approach is the natural extension of the requirement to have 
better data upon which to score risk of inbound containers. It would 
support not only the needs of the United States better to understand 
and assess risk of inbound containers, but also could serve the exact 
same needs for other nations. This would serve to improve security in 
the global cargo network and in more nations. This next-generation tool 
will not grow overnight. But stronger container profiling is possible, 
and I am convinced that we can make great progress in the near term. I 
ask this Committee to support our efforts in this area, and would 
welcome an opportunity to elaborate further in response to your 
    Enhanced Inspection Tools. Better detection systems can be deployed 
both abroad and at home. At home, our goal is to have 100 percent 
inspection of all containers as they depart a U.S. port headed into our 
country. Abroad, our goal is to increase materially the number of 
containers inspected by radiation detection tools and by non-intrusive 
inspections, including large-scale X-ray devices. The Domestic Nuclear 
Detection Office (DNDO) recently tested new and better fixed, mobile 
and handheld radiation detection equipment that can be deployed to 
ports of departure, ports of entry and the marine environment.
    In this regard, I would note that last week Secretary Chertoff was 
in Hong Kong and saw first-hand the Integrated Container Inspection 
System (ICIS) pilot program underway there. CBP is engaged in a 
technical exchange to evaluate how the data gathered by ICIS can be 
used to strengthen our inspection capabilities. After extensive 
discussion with industry about the ICIS pilot and its underlying 
technology and business concepts, I am highly optimistic that this 
pilot can point the way to a collaborative network that can 
significantly enhance CBP's capabilities physically to inspect a larger 
number of containers from points worldwide. I'd be happy to discuss 
with the Committee DHS's thought about how this might develop.
    Transportation Worker Identity Card (TWIC). On Friday of last week, 
the Transportation Security Administration (TSA) published a ``request 
for qualifications'' seeking firms who are appropriately experienced 
and interested to help DHS deploy certain components of the TWIC 
program. The TWIC architecture, compliant with FIPS-201 technical 
architecture, will provide an open standard and ensure interoperability 
and real-time exchange for supply chain security cooperation between 
the Department and the private sector. This is the first step toward 
operational deployment of the TWIC program for unescorted access to all 
U.S. ports. This day has been too long in coming.
    This deployment includes accelerated and parallel rulemakings by 
both TSA and Coast Guard. And it includes a procurement needed to help 
launch the operational program. Secretary Chertoff has given his team 
instructions to get this done as quickly as possible. Further details 
will be forthcoming as part of the rulemaking and procurement actions. 
This tool will add another valuable layer of security to domestic port 
operations and will strengthen overall supply chain security.
    H.R. 4954--The SAFE Port Act. The Department is committed to moving 
forward on all eight areas of activity regarding cargo security. We 
believe that there is much in this proposed legislation that will 
provide the springboard for further advances. We would like to commend 
the Manager's Substitute Amendment that the subcommittee on Economic 
Security, Infrastructure Protection, and Cybersecurity passed last 
week, which we believe provided further improvements to the 
legislation. At this point I would like to offer comments on a few 
specific sections of the SAFE Port Act.
    Next Generation ATS. Your legislation calls for improvements in 
CBP's ATS capability. As my previous discussion of the Department's 
Secure Freight Initiative shows, we agree that this already powerful 
tool should be made stronger. We very much look forward to working with 
Congress on operational details of a second-generation system.
    The Movement of Radiological Material. The capacity to detect and 
identify the illicit movement of radioactive materials across our 
borders in the commercial supply chain is a critical concern of the 
Administration. DNDO is working closely with CBP to develop a new 
deployment strategy that will provide an optimized mix of current and 
next-generation systems to balance capability, coverage and cost. That 
deployment strategy will result in screening 98 percent of all 
containerized cargo crossing the southern border by fiscal year 2006 
and at seaports by fiscal year 2007.
    Domestic Nuclear Detection Office. DHS appreciations the 
authorizing language for DNDO included in your legislation. The 
legislation establishes DNDO to detect nuclear and radiological 
material, improve that detection capability over time and develop a 
global detection architecture to ensure linkages across Federal, State 
and local agencies. We appreciate the Committee's recognition of the 
important work of DNDO by including this provision and formalizing the 
role of DNDO in protecting our nation against this threat.
    Improvements to the Customs-Trade Partnership Against Terrorism 
Program. The DHS supports any effort that aids the Secretary in 
strengthening and improving the overall security of the international 
supply chain and U.S. border security. The DHS considers the C-TPAT 
section as particularly constructive because it does not seek to 
establish regulatory requirements for a voluntary government and 
industry partnership program, yet it supports strengthening C-TPAT. 
Additionally, the provision on the utilization of third party entities 
to conduct validations is a concept that merits near-term serious 
    Director of Cargo Security Policy. The legislation calls for the 
establishment of a Director of Cargo Security Policy to coordinate 
Department-wide cargo security policies and programs with other 
executive agencies relating to cargo security. We strongly agree with 
such a proposal and greatly appreciate both the Committee's support for 
the creation of an Under Secretary of Policy as called for in the 
Department's 2SR recommendation and this modification to our 
organizational findings. We are moving ahead to implement this 
recommendation by actively recruiting a well-qualified individual to 
lead this effort.
    Port Security Grants. While the legislation does not specify 
whether the port security grant program authorized is part of the 
Administration's proposed Targeted Infrastructure Protection Program 
(TIPP), I would like to take this opportunity to reiterate that the 
Administration supports the creation of the TIPP to enable increased 
funding for protecting infrastructure on the basis of risk that may, if 
warranted, increase funding for ports. Under the President's FY07 
budget request, $600 million is requested for the TIPP grants, which 
would allow additional resources to flow to port security needs based 
upon the most up-to-date threat risk assessment.
    Technology Investments. The DHS fully supports the concept of 
investing in research and development to improve our maritime cargo 
security. The DHS is engaged in a substantial amount of research and 
development on maritime cargo security solutions, which includes 
bringing to bear the innovation and market forces of the private 
sector. While we differ in our method and timing on container 
standards, we agree in the need to launch a six-sided container 
intrusion detection system. The DHS is participating in a number of 
development efforts regarding container standards. We must ensure that 
any standards are based on the right technology, lest the rush to 
endorse a standard could result in operational practices that do not 
appreciably enhance security and may unintentionally impede 
international trade.
    Conclusion. The Department is working closely with other government 
departments and agencies, with industry, and the international 
community to establish workable solutions to improve supply chain 
security. We recognize the challenges that face our programs and the 
importance of protecting our nation from terrorist threats to our vital 
economic engine. We are making significant progress. I would like to 
thank the House Committee on Homeland Security again for this 
opportunity to discuss our efforts and comment on this legislation 
which is so important to the Department and the nation.
    This completes my prepared statement. I would be happy to answer to 
any questions you may have.

    Chairman King. Thank you, Secretary Jackson, for your 
    I have two basic questions at the start. On the issue of 
container security, specifically dealing with CSI, the 
container security initiative, a number of critics, including 
Mr. Ervin who will be testifying later today, raise the point 
that less than one-fifth of the containers that we believe 
should be inspected abroad, I think about 17 percent, are in 
fact inspected. We have heard that in France, they refused to 
inspect about 60 percent of the cargo that we deemed to be high 
    Considering that, how secure should we feel about it? 
Again, these is just the cargo that we ask to be inspected. If 
60 percent of that is not inspected, it seems to me that we are 
leaving ourselves very much as risk. What do you see is the way 
to improve that? What are the prospects for improving it?
    The second question then you can answer is on the TWIC. I 
know you said that they are going to be done, but I would ask 
if you could tell us why there has been such a delay up until 
now. I know you want it done as quickly as possible, you say, 
but what does that mean? Are we talking about next month or 6 
months from now or 1 year from now? Because this to me, and 
especially as there are several ongoing investigations around 
the country which indicate that are very serious issues with 
people working at the ports who should not be working there. 
Each day that goes by, I just think increases that risk.
    Secretary Jackson?
    Mr. Jackson. Let me say just a quick word about the CSI 
examinations. There has been some misunderstanding about the 
metrics, and I would like to make a distinction to help further 
unpack this particular question you are asking about. What 
portion of the containers that we ask to be inspected by a 
foreign government actually are inspected? The distinction I 
would like to make is a distinction between referral and 
request. When we do the initial targeting and begin our 
profiling of a container before it is loaded onto a ship, we 
have many, many, many cases where we ask the foreign government 
if they have additional information about what we consider to 
be a preliminary container of concern.
    That is what the CBP would refer to as a referral. So we 
make a referral, and we say, can you give us more information 
about this? For example, we may have scored higher for risk a 
container that is being moved by a firm that we have little 
knowledge of, but it may be that the port and the customs 
service in the foreign government has extensive experience with 
that particular firm. They may export to multiple other 
    So we can use these referrals to gather additional data. We 
do that routinely. And then for those that we want to make a 
specific request, we do that and ask for a request that those 
containers be opened or inspected through physical means. Our 
numbers for these examinations reached towards the 89 percent 
range when we actually make a request that they open the 
container or further examine the container in a physical way. 
So that number is on aggregate higher.
    There are some ports where we honestly have to work on that 
relationship to keep it strong and to make that connection 
work. Some of these containers are loaded onto ships and come 
our way. If we have flagged it, 100 percent of those containers 
are inspected through physical means when they arrive on the 
shore. So we agree that the idea of pushing the borders out 
should get the maximum number of containers inspected with 
tools and cooperation overseas, and that is where our focus is. 
In cases where we need to put extra push on our partners 
overseas, we are thoroughly committed to doing that and helping 
them understand the importance of this.
    Chairman King. We are very interested in the comments of 
the second panel when they come on. That is an issue that we 
have to address, I think, and I appreciate your testimony.
    Now, on TWIC?
    Mr. Jackson. Yes, sir. I would say it probably will come up 
later when we talk about radiation, this idea of trying to get 
better radiation inspection overseas is something we are also 
very strongly committed to and would like to discuss with the 
committee as well.
    On the question of the TWIC, Mr. Chairman, I can't tell you 
why it has taken so long. I can tell you I am very impatient. I 
can tell you Secretary Chertoff is very impatient. And I can 
tell you that our entire team is focused on this as a very high 
priority issue. I am loathe to give you an exact date, but it 
will be measured in terms of months, and not years, when we are 
actually beginning to issue these cards.
    We have put out as of last Friday a request for 
qualifications for what is one of three moving parts to make 
this work. One moving part is to get some outside consulting 
firms and outside vendors who would be willing to prepare to do 
on validation by us and with certification from us and by 
auditing from us and with oversight from us, some of the intake 
process that we would need here to gather fingerprints and data 
for the TWIC background investigation tool.
    Secondly, we are going to need two regulations: one from 
Coast Guard and one from TSA to make this work. We are in the 
accelerated drafting phase on both of those rules. We have a 
concept of how this will work. We are leveraging three pilots 
that we did earlier. We have an IG report on internal studies 
of how to strengthen the software platform that we will use 
here. We have an operations concept of how to get the cards 
back and forth to the frontline.
    So we are moving very aggressively at this. We have been 
instructed by the secretary to press the margin of time for 
every single stage of this: NPRM, final rule, and award of 
contract to move forward. We are going to do that very 
    Chairman King. Thank you, Mr. Secretary.
    The ranking member?
    Mr. Thompson. Thank you very much, Mr. Chairman.
    Mr. Jackson, the Senate Homeland Security Committee report 
recently stated that only 17.5 percent of high-risk containers 
are inspected overseas. Now, what that means on the other hand, 
is that 82.5 percent of the high-risk containers arriving in 
the U.S. are not inspected at all. Moreover, the GAO in 2005 
found that inadequate staffing resulted in 35 percent of 
containers not being targeted, so now these containers were 
never subject to inspection.\2\
    \2\ GAO, A Flexible Staffing Model and Minimum Equipment 
Requirements Would Improve Overseas Targeting and Inspection Efforts, 
GAO-05-557 (Washington, D.C., April 2005).
    I, along with some of the other members of this committee, 
have tried to increase personnel at our seaports to accomplish 
these things. Your budget request is $12 million for 106 
seaport inspectors. Do you think this is enough?
    Mr. Jackson. Yes, sir. Let me start with a distinction, and 
then I will answer the budget question if I can. What we are 
doing to look at containers, the distinction between screening 
and inspection is the crucial one. We are screening through use 
of automated targeting and container profiling 100 percent of 
all containers in-bound into this country. We are inspecting 
100 percent, every single one of the containers that we 
identify as high-threat or high-risk containers. Of those, we 
screen them in two locations: overseas and then domestically 
when they arrive in our ports.
    We are working on a third leg of this screening process, 
which is to screen 100 percent of all containers in the United 
States before they leave a port on their way out the door. We 
are going to be at 98 percent of that, of all containers, with 
the plan that we have on the table, by the end of next year. We 
are making very, very substantial progress. We are a little 
over 51 percent right now.
    Mr. Thompson. Excuse me. So you are saying to me that 
nothing comes to our shores without being inspected?
    Mr. Jackson. Screened. Everything is screened, meaning we 
do a risk assessment, and then inspected, which is using 
physical tools such as radiation or large-scale X-ray devices.
    Mr. Thompson. I don't want to get caught up in semantics 
between screening and inspection. So if we don't have the 
personnel to inspect everything that is targeted and 35 percent 
of that is never even identified for inspection, you don't 
count that?
    Mr. Jackson. We do inspect 100 percent of all high-risk 
containers. That is to say, we use radiation portal monitors or 
large-scale X-ray machines or we use physically opening so-
called ``de-vanning'' of the container.
    Mr. Thompson. So is your testimony that the GAO report was 
    Mr. Jackson. I am not familiar with the specific passage in 
the GAO report. I would be delighted to look at it, sir, and to 
provide written comment on the specific observation there.
    Mr. Thompson. I am just trying to make sure, because the 
public and members of this committee are told time and time 
again that many items come to this shore not inspected, and 
some not screened. So now you are separating the two, that 100 
percent screening occurs--
    Mr. Jackson. Yes.
    Mr. Thompson. --before it reaches out shore. That is your 
    Mr. Jackson. Yes, sir.
    Mr. Thompson. And so therefore the need for additional 
personnel in the screening area, we don't have it?
    Mr. Jackson. Here is what I would say in the screening 
area, sir, and I am not convinced we wouldn't use additional 
personnel in this regard. In my written testimony, we talk 
about bringing the next generation of screening technology and 
tools to understand better and more richer the data that is 
associated with the pre-history of a cargo container move. 
There is area for growth in this to get a second-generation 
tool. We are proposing with the Secure Freight Initiative to 
begin exactly that. I think we can do a better job on that.
    I am not trying to say a story that everything is happy and 
don't worry. There is work to improve on the screening side. On 
the inspection side, we can do and should do more overseas, as 
possible, with the investment and the tools, especially 
radiation detection tools, and large-scale X-ray devices. We 
will do more here in the domestic environment as well. So if I 
made those eight buckets of activity for us and said that there 
are four essential areas of focus, one of them overseas, that 
is four, and in the inland domestic environment, that is eight. 
The screening work takes place in the overseas environment 
before it comes here. The inspection work occurs both 
domestically and overseas.
    Mr. Thompson. I see my time is up, Mr. Chairman. I will 
submit the other questions for Mr. Jackson to respond to.
    Chairman King. Fine.
    The gentleman from Connecticut, Mr. Simmons?
    Mr. Simmons. Thank you, Mr. Chairman.
    I thank the witness, Mr. Jackson, for his testimony.
    I also commend my colleagues for doing what I think is a 
really terrific bill here, working in a bipartisan fashion to 
come up with something that is good for America's ports and 
good for America's homeland security.
    I would like to focus a little bit on the issue of $800 
million in port security funding. We have 361 ports in America, 
according to staff information in my notebook, and $800 million 
sounds like lot of money, but if you do the math, and I already 
have, that is about $2,216,066.50 per port. When you consider 
that some of our ports like New York, Baltimore, Long Beach, 
California, Louisiana, are really large and very significant 
ports, my guess is that they are very quickly going to consume 
a lot of those security dollars.
    So that leaves some of the smaller niche ports, if you 
will, largely unprotected. I have a particular interest in New 
London port, which is the host to a nuclear submarine base, a 
nuclear submarine manufacturer, the Coast Guard Academy, the 
Coast Guard R&D Center, both the Amtrak and the I-95 Boston-New 
York lines, Pfizer Global Headquarters and various other 
resources located in a very compact area in a port that has 
ferry service to New York and to Rhode Island, but does not 
appear on the list of ports at risk. In other words, the 
professional assessments that we have had before this committee 
on those ports and areas at risk does not include the New 
London port.
    How can we anticipate that the Homeland Security Department 
is going to allocate these resources, when it seems to me that 
$800 million is really not an adequate amount? How can we be 
sure that some of our smaller ports located in less populated 
areas are going to get the assistance they need?
    Mr. Jackson. Yes, sir. Let me just try to unpack a couple 
of components of your excellent question.
    On how to give some flexibility to provide port funding and 
port grant funding, this is an important area. This is why we 
have proposed the so-called TIPP program, which would allow for 
flexibility. If you area needs to put your infrastructure 
protection dollars more in, say, rail security rather than port 
security, it would give you flexibility to see that that 
happens. If it is port security that is the highest on the 
priority list, then it would give you flexibility to do that.
    So we proposed $600 million this year in this consolidated 
grant program. It is a substantial increase on the order of 
magnitude, I believe without checking the exact numbers, of 
twice what aggregated dollars would be for the individual 
programs. So we proposed a substantial increase in this 
infrastructure protection grant money available for fiscal year 
    In the current year, we are trying to focus with the most 
care possible on the areas of highest risk and we are trying to 
identify very specifically the types of risks that we think are 
the highest impact and also present the greatest consequences, 
a Cole-type of attack, for example. So we have structured the 
grant guidance to say, come back with recommendations to focus 
on the things that matter most.
    We had a very interesting experience with that last year. 
Some people did that very, very well, and got good money. Some 
people ignored that, focused on much less risky items, and 
didn't get as much money. So we are trying to focus on the risk 
and then we are trying to say, look, let's look as we go 
through this year and see if we need to adjust the numbers, the 
size, the eligibility criteria. We are in the final stages of 
that for port security grants this year, and that is a topic 
that the secretary and I will be taking up imminently.
    Mr. Simmons. Thank you for that response. I think this is 
something that we will continue to watch very closely.
    Again, I thank the chairman and the ranking member for this 
excellent hearing today.
    Chairman King. I thank the gentleman.
    The ranking member of the subcommittee, Ms. Sanchez.
    Ms. Sanchez. Thank you, Mr. Chairman.
    Again, thank you, Mr. Jackson, for being before us today.
    I alluded earlier to a subcommittee meeting that we had, a 
congressional hearing on this particular bill, on March 16. I 
had asked Assistant CBP Commissioner Ahern about using third 
parties to conduct C-TPAT validations. He replied that CBP was 
looking at using third parties for certain functions, but that 
generally he believed that this was a federal responsibility to 
conduct these validations. He was pretty adamant about that.
    I asked how many people he had onboard to conduct those 
validations, and he said that he had 88, and that he had about 
40 more scheduled to be trained and brought on shortly. While 
he said that CBP was looking at the possibility of using these 
third party validators, in fact his agency had already issued a 
solicitation to use contractors to validate the security plans 
of C-TPAT members. According to the solicitation, CBP will use 
an intermittent contractor to perform validations, training and 
provide technical assistance.
    So knowing that, I would like you to answer the following 
questions about that process. First of all, when was the 
department planning on telling the committee that it was 
issuing invitations for contractors to conduct C-TPAT 
validations? And why didn't Mr. Ahern just simply tell me that 
he had solicited for this already?
    Mr. Jackson. I am at the disadvantage that I saw the 
document that you are referring to after I had already sat down 
at this table. But let me give you my understanding of it, and 
a pledge, Congresswoman Sanchez, that I will get you 
immediately the facts that you need to answer these questions 
    What I understand is that CBP has put our periodic requests 
such as this one to be able to hire individuals to work on the 
CBP team with them. For example, with one of these recent 
solicitations, CBP hired 19 retired Customs Service officers to 
come back in and work for CBP and to help manage the process of 
doing validations.
    I would make this distinction from that type of internal 
hiring, to the third party screening. Let me just say that I 
understand CBP has some reluctance to experiment in this area, 
but I would tell you that after some recent discussions, it is 
the determination of the secretary and the deputy secretary 
that we do not share that hesitation and we are eager to try to 
experiment along the lines that your bill proposes.
    This procurement, according to what was just told to me, is 
not that movement. So let me validate that for you and let me 
get additional details about it, and help unpack for you the 
staffing plan and how we use people in this. I think the third 
party validator is a powerful idea. It is a force multiplier. 
It is one that if controlled properly can get us farther down 
the road faster. I am very much open to that.
    Ms. Sanchez. I am concerned about the fact that you have 
certified over 5,000 companies, but really only validated about 
1,500, and yet you are giving lower score points to these 
companies that really haven't proven that they have, or we 
haven't seen that in fact they are putting into place the plan 
that they have submitted to you. So if you are trying to tell 
me, then, that you believe that that solicitation is for prior 
people who worked for the agency who are now going to come back 
as contract employees. Is that what your belief is?
    Mr. Jackson. That is what I was told, but again I would 
like to get factual confirmation there, ma'am.
    Ms. Sanchez. What about these 40 new people that Mr. Ahern 
was talking about? Are they going to be federal employees or 
are they also contract employees?
    Mr. Jackson. I would like to get the facts for you ma'am 
before I speculate with you about the 40.
    Ms. Sanchez. Okay. And lastly, what protections have you 
put in place to ensure that C-TPAT member companies' 
proprietary information is protected, if you are using 
contractors or if you are going to use outside third party 
    Mr. Jackson. There is a requirement and protections in 
employment that people sign to preserve private data and 
nondisclosure agreements. These are enforceable by sanctions 
from us. So there are multiple tools in the hiring process to 
protect this data.
    Your underlying question, as we grow C-TPAT and as we look 
at the question of third party validators, is the core 
question. How do you protect privacy, how do you protect 
business confidentiality, and how do you make sure that we can 
get that data in a timely way and use it? These are all core 
components of a successful program, the type of program that 
this legislation calls for.
    Ms. Sanchez. And then that would also follow to what type 
of solicitation is really out on the street.
    Mr. Jackson. Yes, ma'am.
    Ms. Sanchez. If it is just to the contractor, that is 
different. But if it is really for third parties, then these 
types of assurances should be in place.
    Mr. Jackson. Yes, ma'am. I do not believe this is a solicit 
third party contract. I have been told that that is not the 
case. I will, again, get more facts, but if we do that, we are 
going to do it in a very public, very deliberate way. This 
committee is going to know about it. We are going to ask your 
counsel on how we proceed. We are looking as a reference point 
in the legislation that you have drafted, and we will do this 
with all due protection, all sense of urgency, but care in the 
structuring of the program.
    Ms. Sanchez. Thank you.
    Thank you, Mr. Chairman.
    Chairman King. The gentleman from Virginia, Mr. Davis?
    Mr. Davis. Thank you.
    Mr. Jackson, I am very supportive of the framework that is 
established by this bill to further strengthen the C-TPAT 
program. I think that an independent third party validation 
process really offers great promise in ensuring secure 
shipping, while helping to manage costs within reasonable 
    Now, a process which leverages private sector efficiencies 
and competition, but meets stringent standards set by DHS, is 
far preferable than government hiring thousands of new 
employees to conduct the work, as well as the cost allocation 
that comes with that in terms of who bears the cost.
    A key component in such a program is that companies engaged 
in third party validation should be financially independent of 
the shippers that are evaluating and free of any other 
entangling business or other relationships. I am pleased to see 
that your statement says third party validations merit near-
term serious exploration, but could you share further thoughts 
on this? Do you think independence is going to be critical in 
    Mr. Jackson. Yes, sir, I do. I think that that is an 
important component, and make sure that we have insularity from 
any possible business conflict of interest that is there in 
that process. In the same way, the government validators have 
to have that same kind of assurance. So I think that any 
successful program in this area would require us to be very 
explicit and to set stringent requirements to make sure that is 
    Mr. Davis. When you note that cargo coming in is 100 
percent screened, what does that mean, to ``screen'' it? When 
you go through an airport and you are screened, it means one 
thing, but with cargo, it means something else.
    Mr. Jackson. Yes, sir. This is the confusing world of DHS 
vocabulary. I apologize for it and I will try to explain it as 
best I can.
    It is a different thing in the airport screening 
environment. We call that physically walking through a machine 
that inspects you in one way or another through X-rays or other 
devices. In this world, the screening, if you think of it as 
profiling, we are trying to profile a container based upon the 
data that we have about that container, and score it for risk. 
In doing this, we gather today information from the weigh bill, 
I believe it is some 22 variables, I may be wrong on the exact 
number, but on that order of magnitude.
    What we do is use that to score risk. We look at who is 
shipping it, who are they shipping it to, who has touched it, 
what do we know about what is said in here, what do we know 
about the various different variables that go into assessing 
risk. Then, and attached to that is a very significant database 
of historical records of individual shippers, of pattern 
analysis that flows from the types of shipments that have 
proven troublesome to us, where we found contraband. We take 
this historical record, run it through quite a large number of 
algorithms that sort, stack, rack and try to count in a very 
precise way and score in a very precise way that risk. That is 
the screening component.
    Mr. Davis. Thank you.
    I yield back.
    Mr. Jackson. I would just say, sir, we had none of this in 
any material way up to 9/11. I really am deeply respectful of 
the work that CBP has done to make this work in this way. We 
can do better, and that is not to say that we haven't done a 
lot. I think that in our world, we are constantly pressing to 
make sure that we stay one step ahead of the bad guys. We can 
never rest with having done a good system and stop.
    Chairman King. I would like to recognize the gentlelady 
from California, who not only did such a great job in working 
on this bill, but also has become a proud grandparent. The 
gentlelady from California?
    Ms. Harman. How much time do you have to talk about Lucy 
Asher Peck, Mr. Chairman?
    Chairman King. No filibustering. I know this would go on 
for days.
    Ms. Harman. She lives in New York City, so there.
    Thank you, Mr. Chairman, and thank you to all the members 
of this committee who have done such a good job highlighting 
and moving legislation on this issue. It is rare around here 
that the stars and the moon align so that we can move big 
bills. The last one I remember, at least that I was involved 
with, was the intelligence reform bill. I think this is going 
to be the next big one that moves through the House very 
quickly and moves through the Senate. I think when we are 
doing, we will have done something extremely significant.
    I appreciate, Mr. Jackson, that the Homeland Security 
Department is working on many of these issues. However, I don't 
think you have gotten the job done yet, and we are going to 
push you a little bit by making certain that in our bill, which 
is still a work in progress, we have the right programs and the 
right amount of funding. I want to come back to that.
    The subcommittee ranking member, Ms. Sanchez, said that she 
hoped that more good things would be added to this bill. I just 
want to note that the subcommittee, Mr. Lungren's and Ms. 
Sanchez's subcommittee, did add some more good things. The TWIC 
program, the TWIC language is critically important and so is 
Ms. Sanchez's language on third party validators. So I commend 
you. I am not a member of the subcommittee, but I commend you 
for doing that.
    Now, at this level, I am excited about the fact that we 
will report to the full House what I think will be a strong 
bill. I am very, very proud to be one of the co-authors, along 
with Mr. Lungren.
    Let me make a couple of points. First of all, Mr. Jackson, 
do you agree with me that at least up until now, between 9/11 
and now, we have underfunded port security?
    Mr. Jackson. No, ma'am, I don't allow myself to jump to 
that word ``underfunded.'' I think that we have been juggling 
massive requirements to put the country in the right order. The 
job is not done, as you said at the beginning. We have much 
more to do. That is why we have proposed a very significant 
increase in fiscal year 2007 to help on infrastructure for 
ports and for transit and other critical infrastructure.
    Ms. Harman. Well, I believe we have underfunded port 
security. Just to take one little old port, the Port of Los 
Angeles, which with the Port of Long Beach, is the largest 
container port complex in America. Almost 50 percent of our 
containers go in and out of those ports, and $26 million has 
been provided since 9/11. The request was $100 million. I can't 
vouch for every dollar requested, but my guess is that that 
funding level is 25 percent or so of where it ought to be to 
provide for real port security, not just for the residents, 
those who work in the port and the residents around the port, 
but for our country, given the fact that it is such a gateway.
    At any rate, I hear you about the transportation dollars. I 
guess I just respectfully disagree. We have spent nine out of 
ten transportation security dollars, as I recall, on airport 
security, another huge area, but we have severely underfunded 
port security and that is why many of us feel strongly that we 
dedicated revenues for port security. The high-risk ports, 
whichever they are, should get those dollars. They should go 
for multi-year improvements and for things like this bill 
funds, which is a layered program for container security.
    I know you support the thrust of the bill. I just hope you 
will get to ``yes'' on the whole deal because I think it has 
been carefully put together.
    I want to ask a little about the ICIS project in Hong Kong. 
I know that numbers of senators and maybe some members of this 
committee, and Secretary Chertoff have visited it. It, I think, 
sounds like a very exciting idea. I am just wondering if you 
think that ICIS is some kind of magic bullet so that we can get 
to 100 percent of container inspection off-shore, hopefully in 
the next 3 or so years, which was an idea that was floated at 
the subcommittee level and which I still think is a valid idea.
    Mr. Jackson. I am very positive on the ICIS opportunity. We 
are very eager to take this to an additional step of 
implementation and work. There are a couple of parts of this 
that are particularly notable. One, this is a case where the 
industry, who have been valuable, valuable partners in this 
whole area of maritime security, have themselves stepped 
forward and said we are willing to tax ourselves to improve 
security. We should not lose that moment. It is a generous and 
right impulse to try to share the costs of making security 
    If we have that, and we could put in the in-bound lands in 
the overseas ports this type of rapid through-put, we could 
then multiplex the images, which is to say, electronically 
transmit them in real-time back to the United States for those 
containers that are headed to the United States, assess them if 
we have identified that container as a high-value target, a 
high-risk target. We could assess it instantly before it is 
loaded to help give additional data about it.
    If there are some that we can assess on a random basis in a 
much more aggressive fashion, that type of tool, that type of 
framework over time would allow us to grow the amount of 
inspection that we are doing overseas. I think that we should 
move very aggressively here. I will tell you we are engaged in 
conversation with industry about just that and how to do it.
    Ms. Harman. My time has expired, Mr. Chairman, but I 
strongly agree, and I hope ``aggressively'' means within 3 
    Thank you. I yield back.
    Chairman King. I thank the gentlelady.
    Mr. Jackson. Better than that, ma'am.
    Chairman King. The chairman of the subcommittee, the former 
attorney general of California, Mr. Lungren?
    Mr. Lungren. Thank you very much, Mr. Chairman.
    Mr. Secretary, again I would like to go back to the 
screening versus inspection. As I understand what you just 
said, you said that the Hong Kong experiment is intriguing. It 
looks like the equipment they use at least can provide some 
additional information, and that it would be something that we 
might look forward to to have I thought you said 100 percent 
inspection from the standpoint of running the containers 
through one of these large machines as they come into the port. 
Is that what you were saying?
    Mr. Jackson. I think I tried to say, a very large number of 
inspections, but I avoided the word ``100 percent.'' Let me 
just talk about that a little bit. I will give you an example, 
first, on the domestic nuclear detection work that we have. The 
plan that we have in place with the support from Congress and 
funding in our 2007 budget, would allow us to get to 98 percent 
inspection of all containers that have arrived in the United 
States and are leaving a port facility for radiological 
    Mr. Lungren. And that would be they would pass through this 
piece of equipment as they are beginning to drive out?
    Mr. Jackson. Yes, sir, before they depart the terminal. 
That is going to be using existing and a second-generation of 
tools which are much more robust and powerful, and which with 
the Congress's support we have been urgently pressing forward 
with the DNDO office on basic research.
    Mr. Lungren. Is cargo leaving the United States?
    Mr. Jackson. No, it is leaving the U.S. port going into the 
United States. It is on port territory, but as it goes out. 
That is our objective.
    Mr. Lungren. It is on the trailer pulled by the truck just 
before they would be able to exit the actual terminal?
    Mr. Jackson. Right. So why 98 percent? To go from the ports 
that carry that amount of through-put to get 98 percent, and 
then take the last 2 percent may be a disproportionate 
investment. So how would we work those 2 percent? We would 
probably use hand-held devices, temporary mobile devices that 
would come and do a lockdown on a port and do maybe 100 percent 
in a given day, and then go to another small port where there 
may not even be a ship arriving every day, but on a periodic 
basis, so that we can work that last 2 percent.
    I would say this is a reasonable tool so that we spend 
money based upon real return on investment. It is risk-based 
investment. Overseas inspections now, the ICIS program that 
Congresswoman Harman raised, is an inspection as a container 
enters into a port overseas before it comes our way, using the 
same types of tools. Could we get to 100 percent? Probably not 
without very, very severe imposition on both the industry and 
costs to the U.S. government.
    But if we didn't inspect one of those in that way, and we 
have taken so much hay off the haystack, we could when it hits 
our ports have a much more intense look at the ones that didn't 
get that type of in-bound inspection. None of them get it 
today. So we could in layers and over time bring much more 
discipline to that. I don't think that we have to say we will 
promise to be at 100 percent. What we have to promise is tough-
nosed, hard risk-based analysis about how to spend the precious 
resources of the taxpayers here.
    Mr. Lungren. One of the points I would like to make is, I 
have looked in vain to find any magic bullet. No matter what 
system you have, there are going to be shortcomings on those 
systems. It seems to me that we have to keep the emphasis on a 
multi-layered approach to security that includes the best 
technology applied, the application of intelligence, first of 
all the gathering of intelligence, but the analysis of that 
intelligence. We also need to have these algorithms and random 
inspections so that in fact we have a multiple attack on those 
who would attack us.
    Because I just hope that when we talk about 100 percent of 
this or 100 percent of that, in reality there is never going to 
be 100 percent. We need to get the best technology we have and 
apply it as best we can, but always understand that we are 
going to have to have multiple layers so that we keep the other 
guys guessing. But also, we know that there are going to be 
shortcomings of any particular aspect of the system. It just 
makes sense for us to understand that.
    The other thing I was intrigued about when we went to Long 
Beach-L.A. Ports, and went to the Maersk port, pier 400, where 
we saw what I was told is the largest ship that they have. It 
contains 8,000 containers. They are able to unload or load I 
think in a day-and-a-half. Someone mentioned that if you just 
added 2 minutes additional inspection of some sort, it might 
raise the time to 10 days.
    So what I am suggesting is we need to be smart as to how we 
do these sorts of things. We need to understand the kinds of 
inspections we have, not that we shouldn't have inspections, 
but we have to keep in mind we are dealing with this commercial 
enterprise and how we do it is also important. We have to be 
smart about this thing.
    Mr. Jackson. I couldn't be in more agreement, sir. You have 
nailed it, I believe. It is a series of layered measures. It is 
not letting perfect be the enemy of good enough. It is 
continuous innovation, continuous commitment to reform. It is 
growing and growing, and it is the combination of all those 
layers working together that gives us greater security.
    Mr. Lungren. I know my time is up. The only thing I am 
going to say, it is going to take money, though. I understand 
you put money on it, and I understand you have had grants. I 
don't think it is sufficient to have it just part of the $600 
million you are talking about. That is why we are trying to 
dedicate a big chunk in this bill.
    Chairman King. The gentleman from Oregon?
    Mr. DeFazio. Thank you, Mr. Chairman.
    Mr. Jackson, always good to see you.
    At home, our goal is to have 100 percent inspection of all 
containers as they depart a U.S. port headed into our country. 
Why is that? We think there might be a threat contained in 
those containers of some sort? Yes, would that be it? I mean, 
why else would we want to do that before they went inland? You 
must think there is a potential threat.
    Mr. Jackson. The threat is about risk and consequences and 
the intent to use these, the capability of using these as 
tools. So the consequences of a nuclear device being enclosed 
in a container is so high that it merits an unusual financial 
and physical work effort.
    Mr. DeFazio. Okay. Now, that is once it has arrived in a 
U.S. port before it goes to a different large urban area in the 
United States. So are our ports then sacrifice zones? Why 
wouldn't we set this goal on the other side of the ocean? That 
is what concerns me. Mr. Lungren resisted this as an amendment 
last week. It sounds to me like you are saying technology 
exists. It is working real well in Hong Kong. They did it 
voluntarily. They are talking about expanding it. It could 
work. We could get to maybe 98 percent overseas. But in your 
testimony, it is our goal is to increase materially the number 
of containers inspected.
    Now, we want to do 100 percent once they get in the U.S. 
before they go inland, so we think there is a risk of a nuclear 
bomb being inside, but we don't want to do 100 percent before 
they get to the port. Now, if I represent one of those ports, I 
would be real concerned about that. I might begin to change my 
position on whether or not we want to move this overseas if the 
technology has now been proven and say we want to set a 
timeline within which we want to have as near as practicable 
100 percent. As you explained, we may not get to 100 percent. 
Wouldn't that be a reasonable goal?
    Mr. Jackson. Let me answer it this way for you, sir, rather 
than a yes or nor answer.
    Mr. DeFazio. Be quick, because 5 minutes isn't very long. I 
have other questions.
    Mr. Jackson. Okay. The technology is not totally proven. We 
need to innovate more there. We need to do more testing. The 
technology that is taking these samples is basically going onto 
a disk and being stored.
    Mr. DeFazio. Right. I know we are not reviewing it. I 
understand that. We have to hire someone to actually review it.
    Mr. Jackson. We would have to do that and we would have to 
get it over here. The next generation of technology has to be 
brought to bear.
    Mr. DeFazio. Sure, a lot of fiber-optic capacity under the?
    Mr. Jackson. We can do this, sir. I am with you that this 
is not a technology barrier that can't be overcome.
    Mr. DeFazio. Right.
    Mr. Jackson. Why did I say ``materially'' rather than ``100 
percent''? I think it is early enough to where we are entitled 
to be optimistic, but we should not be starry-eyed about 
understanding this with a layer of precision we haven't brought 
to the table yet. We would come back and tell you what 
percentage targets we would go for. We need more time to test 
whether this works and to make sure that before investing a 
large amount of money that it works.
    Mr. DeFazio. But of course in Hong Kong, there was no U.S. 
investment and I understand they are willing to expand it to 
the entire port at no cost to the United States of America.
    Mr. Jackson. Well, it would have a cost to the United 
States of America to be able to staff and use their bulk 
    Mr. DeFazio. Right, but I mean, that is pretty minimal, and 
we have had amendments to have more staff to review these 
    Mr. Jackson. I am in agreement that it is a very generous 
commitment and we will try to explore this.
    Mr. DeFazio. Okay. And then you said in this other 
testimony, which got a little confusing with the ranking 
member, but let me see. You said 100 percent were screened 
overseas, but in the GAO report they say here in the CSI ports 
alone, which are voluntary, cooperating, good people, that is 
34 ports, we were able to target approximately 65 percent of 
the shipments to determine whether they were high risk.
    So I am confused as to, and then when you go to the non-
cooperating, non-CSI ports, it is a much lower percentage. So 
they say the total of containers coming in which we are able to 
actually target overseas is 43 percent, but you said they are 
all screened. So I guess that means we have a manifest on every 
one, but we haven't necessarily applied these additional 
measures that we are trying to do in the CSI ports, which we 
can do 65 percent of the time. Is that right, approximately?
    Mr. Jackson. What we have done is screen 100 percent of all 
in-bound containers for risk.
    Mr. DeFazio. ``Screened'' meaning we looked at a manifest.
    Mr. Jackson. We looked at it for risk and we have done the 
algorithms and the history check, and we have done that work. 
In the CSI ports, we are able to inspect with their cooperation 
a variety of cargo.
    Mr. DeFazio. I am running out of time, but let me get to 
how you lower your score. My understanding is an overseas 
shipper submits paperwork, more than 10,000 submit it, and then 
sooner or later someone comes by to see that they actually have 
the security measures in place. We are told that they get their 
score lowered just by submitting the paperwork. In the Senate, 
they said 1,545 of 10,000 have been verified. No, the Senate 
said 27 percent. The GAO says 1,545 of 10,000.
    So we have 8,500 shippers out there who have submitted 
paperwork and they get their score lowered. Now, don't you 
think that is pretty extraordinary? Wouldn't you say that 
really would merit putting a few more people on the job to 
actually at least go out once and see that al Zarquawi isn't 
there supervising the loading of these containers, at least 1 
day when we come to inspect?
    Mr. Jackson. Let me tell you how it works, and the answer 
is we do need to do more validations is the punchline here. We 
have about 5,800 businesses, which account for 45 percent of 
all imports. I think that was the 45 percent number that you 
were talking about. Of those, 27 percent have been through a 
completed validation.
    Mr. DeFazio. What was that? I am sorry.
    Mr. Jackson. About 27 percent of the 5,800 businesses have 
gone through a completed validation, and 65 percent will be 
completed by the end of 2006, with the assets that we have in 
the pipeline. So we are trying to accelerate those validations. 
That is why I think the idea presented by the committee of 
third party validations is also a valuable one, so that we do 
it once, we do it again, we go back, we have some baseline that 
we keep checking.
    This didn't exist at all. I have to give a lot of credit to 
Rob Bonner. We have come this far. We have to go farther.
    Mr. DeFazio. Thank you.
    Thank you, Mr. Chairman.
    Chairman King. The gentleman from New Mexico, Mr. Pearce?
    Mr. Pearce. Thank you.
    Thank you, Mr. Secretary, for your presentation.
    The cargo screening, does it work if the radiation sources 
are lead-shielded?
    Mr. Jackson. There is a certain amount that I would rather 
talk about in a non-public hearing that can get into classified 
information. But at a high altitude with open-source data, lead 
shielding presents one type of problem, or shielding presents 
one type of problem, and we use multiple tools to find those 
problems or those efforts.
    Mr. Pearce. You mentioned on a combination of page one and 
page two about a lot of your work is going into the global 
nonproliferation, making weapons components more difficult to 
acquire. Exactly what are you doing there and how much more 
difficult is it?
    Mr. Jackson. Well, it is a challenge to try to work on 
nonproliferation issues. It is not principally a Department of 
Homeland Security task. It is a State Department and Defense 
Department and Energy Department, other efforts. In ports, to 
give you one example, the Department of Energy has the so-
called Megaports program where they deploy radiation detection 
equipment at foreign ports and then help train foreign 
governments to look for radiation. This is not all about 
screening things headed just to the U.S., but it is about 
trying to make sure that all countries are putting a priority 
on this.
    There are multiple components to the nonproliferation that 
we have, which is deconstructing nuclear weapons, making sure 
that we tag inventory and monitor the repositories that contain 
nuclear materials, the various security elements associated 
with protecting and managing the production, the storage and 
the movement of nuclear materials.
    I would be happy to provide considerable more detail is 
that would be helpful to you from an interagency perspective.
    Mr. Pearce. You refer to the ATS as being an 
extraordinarily powerful tool. It computes the algorithms and 
things that I don't know much about. It seems like that one of 
the threats of terrorism is that people tend to go underground 
and they operate for years in cells, and then they simply come 
out when needed. How does your algorithm process, anticipate 
those risks from sources who have not previously been 
identified and who haven't yet been activated?
    Mr. Jackson. It is an excellent question. It is an enduring 
security focus. There are multiple ways to tackle that problem. 
First, in the risk-scoring, there is an element of randomness 
in all security programs so that you can't get a free pass 
every day, every way just because we think that on the whole 
you are lower profile.
    Second, this is all about the layered security work that we 
do, some amount of random inspecting virtually all containers 
as they leave, for radiation, for example, is a trust-but-
verify tool; working with our counterparts from foreign 
governments to do physical inspections overseas. For example, 
we had a problem with some individuals smuggled in an empty 
container. We then worked with the firm that was affected and 
the country that was the origin of this shipment, and have put 
in place a multiplicity of tools to look at the empty container 
    So it is a constant press to innovate and to look and to 
take multiple different tools, some physical, some cyber 
analytic tools, but to focus on these issues so we do not have 
a predictable way to circumvent this scrutiny.
    Mr. Pearce. On the budgeting, the numbers of the bill, 
section 14, joint operations centers is $100 million. I am not 
really seeing a very thorough explanation of exactly what that 
means and implies. I see a grant process that is R&D related, 
but can you explain that just a little bit?
    Mr. Jackson. That was not per se an administration figure 
or number. We in principle believe that the idea of connecting 
virtually and physically the various components that are doing 
assessments is important. We have not proposed that type of 
investment and would need to do some further analysis about 
what we would recommend by way of missing appropriations or 
additional appropriations in that area.
    We have centers, for example the Coast Guard does. It is 
profiling its review of in-bound vessels and mariners at a 
facility in Maryland. CBP's excellent facility to do the 
container profiling piece of this is done in Virginia. Those 
two connect very, very seamlessly in the passage of information 
back and forth at various points along the supply chain, and 
our work with them.
    So we have to continue to work and improve those 
capabilities, but we don't necessarily have to co-locate 
physically to make that happen effectively.
    Mr. Pearce. Thank you, Mr. Chairman.
    Chairman King. The gentlelady from the Virgin Islands?
    Mrs. Christensen. Thank you, Mr. Chairman.
    I want to welcome the secretary and also commend our 
colleagues for the SAFE Ports Act. I am glad to be a cosponsor 
of it.
    Of course, now that it comes to me, many of the questions 
that I wanted to ask have been answered already, but I wanted 
to just underscore that like my colleagues, my constituents are 
very concerned with the short staffing and the lack of adequate 
staffing in Coast Guard and Customs and Border Protection, and 
of course the lack of a border patrol, which would help us to 
help our nation prevent attacks before they get to our shore. 
We cannot do that right now.
    We want to work with you. I have the support of my chair 
and ranking member on this to rectify that deficiency in my 
area of the world. We also still have those concerns with the 
advance passenger information system program. We are working 
with your department and would like your support in working to 
alleviate some of the triplicate requirements that our charter 
boats have.
    Last week, I guess it was, Secretary Jackson, the port 
security expert and former Coast Guard Commander Stephen Flynn 
testified that the Maritime Transportation Security Act 
regulations are a sketch, rather than a security blueprint, and 
that it sets forth general requirements that are not well 
defined. He stated, for example, that the requirements require 
safety security plans, but do not define what ``security'' is; 
that they require a qualified individual to implement the 
security actions, but do not define what ``qualified'' is.
    I know that all ports are not the same and that the regs 
therefore were issued to be very broad, but after the events of 
the past month or so, has the department looked into the 
possibility of tweaking the regulations to give ports guidance 
of what is required of them? In our case, we have some very 
small ports that are within the Virgin Islands that perhaps 
also need some tweaking for their unique situations.
    Mr. Jackson. First of all, let me say that we would be 
happy to entertain a discussion about any particular points of 
rub in the security plan as related to the Virgin Islands, and 
I would be delighted to have the Coast Guard work with you on 
that and CBP on that issue.
    As a general rule, Congress has given us a broad 
architecture and framework. We bring that down to a more 
specific level with our regulations. You are exactly right that 
we cannot anticipate every single plan in those regulations. 
The cornerstone of this tremendous MTSA authority, the maritime 
security bill's authority, is to give the captain of the port 
the capacity to make these adjustments and to focus within the 
port community, public sector, private sector, the federal 
agencies, to make a workable plan, and then to push it and to 
understand it and to test it, and to gauge its success.
    This is, again, a work in progress. I think we have made 
tremendous progress in this area. Is it perfect? Nothing is 
going to be perfect and we are committed to continuous 
innovation here. But I think that we have with the regulation, 
and then the concomitant authority exercised through the 
captain of the port, a very strong capability to get very 
granular and to get very specific and to be very precise in how 
we improve security.
    Mrs. Christensen. Thank you. I really don't see the need to 
ask a question about this. I would just want to sort of 
underscore what was said before about the dissatisfaction I 
have with the APS system as well, and my concern that it really 
is not what we need in terms of cargo security, and say that I 
hope as we and the department look at the ICIS that the 
secretary looked at last week, I guess it was, in Hong Kong, 
that you will help us to help you to make sure that we can move 
as quickly as possible to get to that 100 percent inspection 
that will make all of us a lot more comfortable.
    Relying on reports and written statements as to what is in 
a cargo and despite the fact that it is all coordinated and you 
try to come up with as specific as possible and as targeted as 
possible ways to look at what the manifest says and the 
container, there is a lot of discomfort with that still. There 
have been times when the department has not really relied on 
the committee to be the kind of support that we are here to be 
for the department. We want to make sure that the funding is 
available and whatever authorities are necessary are there to 
ensure that we can move to 100 percent of cargo inspections as 
soon as possible.
    Mr. Jackson. We welcome very much that spirit of 
cooperation. Mr. Chairman, I would just make the invitation 
that for any members that would like to come out to our 
targeting center and see a demonstration of this layered 
security profiling work that is done for containers, we would 
be more than happy to make a time for members and staff to see 
this in more detail. It is a substantial tool. We need a 
layered system of multiple tools to answer the mail.
    Chairman King. I will be taking you up on the offer.
    Mr. Jackson. Yes, sir. I would like to go with you when you 
want to go. It is quite a tour and something that really is 
provoking of deep reflection on how best to move this.
    Chairman King. The gentleman from the state of Washington, 
the chairman of the Emergency Preparedness Subcommittee, Mr. 
    Mr. Reichert. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. First, I want to say thank you 
personally. You have been very responsive to my requests. In 
fact, you have initiated two or three phone calls to me 
personally as the new chairman of the Emergency Preparedness 
Subcommittee. I appreciate your open communications style and 
your willingness to work with me and members of our 
    Mr. Jackson. Thank you.
    Mr. Reichert. I want to touch on, I know there is a layered 
approach in many different ways as you look at port security. 
In the organizational structure, too, I know that section 14 of 
this bill seeks to create a maritime security command center. 
As the sheriff in Seattle for a number of years, we 
participated in the joint analytical centers and the JTTFs. I 
am just curious as to how the maritime security command 
centers, JTTFs, and joint analytical centers, how that layered 
approach, how they interact with each other and work with each 
    Mr. Jackson. In various different ways. The JTTF model has 
been in a specific tailored way replicated, for example, in San 
Diego, where they physically have created a fusion center where 
federal, state and local officials are co-located and work very 
closely with each other on the maritime domain awareness issues 
and on the law enforcement issues associated with port 
    That is not the only model that works well. We can create a 
common operating platform, a COP, that can be shared virtually, 
and we do rely on the JTTFs in our port areas to work with the 
law enforcement community especially closely to work on port 
security issues. So it is information exchange. It is sharing 
it across the wide body of people that need to know it. It is 
making sure everybody is in the family and talking together. It 
is using that captain of the port to be the central point of 
    Mr. Reichert. That was my next question. The captain of the 
port, which is a member of the Coast Guard, how will they now 
interact with the director of cargo security?
    Mr. Jackson. The captain of the port works very closely 
with the cargo security officials in each of the terminals and 
the terminal operating companies, with the port director, and 
with the ocean carriers moving cargo through the port, with the 
rail and truck community that is moving in and out, and with 
the broader set of actors that are moving commerce. There is a 
port security committee that is formed in each of our ports 
that manages these issues, that exchanges routine information, 
and that provides a single point of focus for getting a game 
plan together for the port.
    Mr. Reichert. Who is a member of the joint analytical 
centers? The captain of the port?
    Mr. Jackson. The captain of the port and it depends, the 
law enforcement community has access to analytical data, and 
then as appropriate, the industry as well, and it is oftentimes 
very appropriate for them to be cleared in, let in, and to have 
    Mr. Reichert. One of the things that I am hearing concerns 
about from employees at our ports in Seattle and Tacoma, 
Washington is they are very concerned about the training that 
may or may not exist in some ports across this nation. Do you 
feel there is enough attention that is placed on the training 
and exercises? Who has the ultimate authority over the planning 
of the training and the exercises? Is it the captain of the 
port? Is it the cargo security director? Who really is in 
    Mr. Jackson. It is somewhat diffuse, and that is probably 
not a perfect circumstance. We have federal exercises. We have 
federal grants for exercising and training. We have law 
enforcement-related grants for some of this work. We have state 
grants for others. Sometimes, the military when, as in your 
area of the world, has significant assets, they bring training 
and exercise work to the table. So there is honestly a variety 
of different points for managing that.
    We are trying to consolidate that within our new 
preparedness directorate at DHS so that we can have one broad 
picture of who is doing what, and try to make sure that we are 
being as helpful as possible in stimulating the right work.
    Mr. Reichert. What role do the owners of the port terminals 
play in port security?
    Mr. Jackson. They play a very important role. The 
terminating operating companies typically, as is the profile in 
your area, a municipal authority or a state authority would own 
the port itself and the terminal operator has a long-term 
leasehold. The operators of those ports, which sometimes are 
ocean carriers and sometimes are firms that are created just 
for this purpose of operating a terminal, are indispensably 
connected to the security plans. The have requirements under 
the law and they are part of the port planning.
    Mr. Reichert. So the Japanese owners, the crane owners of 
these companies?
    Mr. Jackson. They are at the table. They have requirements. 
We measure, manage and hold them to account.
    Mr. Reichert. Thank you, Mr. Chairman.,
    Chairman King. The gentleman from Massachusetts, Mr. 
    Mr. Markey. Thank you, Mr. Chairman.
    Mr. Jackson, in the subcommittee last week by a party-line 
vote on my amendment, which required 100 percent of all boats 
containing cargo coming to the United States, would be screened 
before they reached the United States. That vote failed by an 
eight-to-six margin, with all six Democrats voting to screen 
all cargo before it gets to our country, and the majority of 
the Republicans voting not to.
    Now, your testimony here today indicates that that is the 
position of the Bush administration, that the Bush 
administration opposes the screening of 100 percent of cargo, 
the screening of 100 percent of cargo which comes into the 
United States. Is that correct, Mr. Jackson?
    Mr. Jackson. No, sir, that is not correct.
    Mr. Markey. Does the administration favor the screening of 
100 percent?
    Mr. Jackson. Yes, we do, but I think in fairness I need to 
make a distinction here, which I think Mr. Defazio?
    Mr. Markey. Do you favor the physical inspection of all 
cargo coming into the United States?
    Mr. Jackson. Not at this juncture. We don't have the 
equipment and the capacity to manage that. I think that would 
throw out of whack the balance between mobility and security.
    Mr. Markey. Okay. So the administration opposes the 
physical inspection of all cargo before it hits our shores. Is 
that correct?
    Mr. Jackson. We do not have the current tools and 
capabilities to achieve that objective.
    Mr. Markey. Are you saying the technology does not exist, 
because in the Port of Hong Kong they have the technology which 
makes it possible for them to physically inspect all cargo?
    Mr. Jackson. You are speaking, sir, of the ICIS program, 
and I am very encouraged. As I have testified earlier in this 
hearing about the ICIS program, but the ICIS program has 
multiple technological steps and refinements that need to be 
pursued in order to make it an operational tool.
    Mr. Markey. So according to the industry witnesses, it 
would cost only about $100 to inspect physically each container 
before it comes to our country. When you compare that to the 
$66,000 average value of goods in each container which comes 
into our country, we are talking about a cost increase of .02 
percent. Is that really too much to ask, Mr. Jackson, in order 
to ensure that a nuclear weapon has not been smuggled into our 
country on one of these ships?
    Mr. Jackson. As I have testified here earlier today, sir, I 
am very encouraged that we can get a very, very high amount of 
screening and also, well, 100 percent screening, and also a 
very high amount of inspection through these types of tools and 
through this type of innovation. I believe that we are not 
there today with the tool kit, but we should and are moving 
very aggressively to try to explore how to make this happen. It 
is not something that we are sitting on our haunches about. We 
are actively working it.
    Mr. Markey. You are actively working on it, but you are 
rejecting both the Republicans in the Congress and in the Bush 
administration is rejecting 100 percent inspection of cargo.
    Mr. Jackson. No, sir. We are talking about what is 
practical in the world that we live in today.
    Mr. Markey. Well, I appreciate that, but you could argue 
that it is not practical to screen every one of our bags that 
goes on airplanes, and some people argue that. But I don't 
think any American wants to go on a plane that doesn't have 100 
percent of all the bags that are going on planes to be 
screened, do you think?
    Mr. Jackson. I think they do, and that is why we screen 100 
percent of bags.
    Mr. Markey. Exactly right. I think Americans also want 100 
percent of all the cargo which comes into our country to be 
inspected as well, in view of the fact that these nuclear 
materials, as you know, are all over the former Soviet Union, 
can be purchased potentially and put on one of these boats and 
brought to our port, and we know that al-Qa'ida has designed 
this nuclear event in our country as their highest goal. So why 
wouldn't we make that our highest goal, to block them from 
being able to accomplish that goal?
    Mr. Jackson. That is what my testimony says at the very 
outset, which is that weapons of mass destruction is the 
administration's highest priority, and then we have to take it, 
sir, in a deliberate way to unpack the component tools that we 
can use to be able to find any potential weapons of mass 
destruction that are secreted in a container. There are 
multiple layers, some of them occur overseas, some of them 
domestically. I have said, and the administration is strongly 
supporting in the U.S. to have 98 percent of all out-bound 
containers leaving a U.S. port into a community screened with 
sophisticated nuclear detection tools by the end of next year. 
We have made tremendous progress so far.
    The ICIS program, which I believe you are discussing, 
presents I think a terrific opportunity for us to leverage a 
commitment by the industry to bring nuclear detection 
capabilities overseas to ports that would allow us to inspect 
with these tools in-bound containers into the United States.
    Mr. Markey. What you are saying, Mr. Jackson, is that the 
Bush administration does not want to impose a burden on the 
cargo industry; that the Bush administration doesn't to impose 
a burden on the shipping industry. This whole attitude that the 
Bush administration has of ``in industry we trust,'' for 
chemical, for nuclear security in our country, just pervades 
these wide-open loopholes that have been allowed to be 
    By not making a goal to have the incoming cargo have the 
same level of scrutiny which you are saying that outgoing cargo 
is going to have in the U.S., gives al-Qa'ida an opportunity to 
plot to bring the nuclear weapon in on a ship into an American 
city to create this nuclear event. It is too dangerous, Mr. 
Jackson. It is too risky, knowing that they have put it at the 
top of their terrorist target list.
    Chairman King. The time of the gentleman has expired.
    If the secretary wants to respond, he can.
    Mr. Jackson. I will just respond briefly that we are 
focused on this threat vector in the most intense way. What we 
are using is a multiplicity of tools starting with our 
screening of 100 percent of all containers that are coming this 
way. We are taking physical inspection tools abroad and 
domestically, some when they get off the ship immediately; some 
when a ship is boarded at sea before it comes into a port.
    When we find a container that we believe is a risk, we 
inspect 100 percent of those containers. So it is not one 
silver bullet that solves the problem. It is multiple tools. It 
is not one thing that can be done today, but it is a commitment 
to grow and innovate and strengthen the security of the system.
    Chairman King. The gentleman from Alabama, Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    Thank you, Mr. Jackson, for being here.
    I want to talk about port security personnel.
    Mr. Jackson. Yes, sir.
    Mr. Rogers. Specifically, last week in subcommittee there 
was a proposal to raise the number of port security personnel 
by 450 per year. My question to you, first, is, what is the 
level of port security personnel that we have now? What is the 
desired level, in your opinion, in the next year and then over 
the next 5-year period?
    Mr. Jackson. Mr. Rogers, if I could get back to you with 
the exact figures, I would be grateful. We need to break them 
down into four groups: the Coast Guard people domestically; 
Coast Guard people doing port security analysis overseas. Those 
are two. And then we need CBP people here domestically, and CBP 
people overseas.
    There is an overlay for this which is part of the security 
plan, of the captain of the port imposed security plan that the 
local community provides, the local law enforcement, and then 
also that the operators, either the terminal operators, the 
ocean carriers or others, are required to bring to the table.
    It is that combination of all those assets to get to the 
personnel question. Let me try to be just candid. I think that 
we are using significant assets here. It is true that you can 
always pour more people at these problems. I think the 
prioritization issue, and I talked about the new commandant-to-
be of the Coast Guard just as recently as this morning, it is 
to focus on those types of attacks that we think are the 
highest vulnerability.
    We can't afford simply to fund every good idea. This idea 
you are raising is an important idea. It is an idea that I am 
not dismissing by any stretch. I think that it is possible that 
we can use more people to accelerate our review work, and then 
we are going to have to just balance the dollars and say, where 
should we spend, what do you think, what does the Congress 
believe is the right balance on these tools in the tool kit to 
    Mr. Rogers. Don't get me wrong. It wasn't my proposal to 
raise it by 450. It was raised. The reason I suggest that 
proposal, my question was, how will we train those Border 
Patrol agents and absorb them? I looked to the Border Patrol 
training problem we have now. As you know, nearly 18 months 
ago, 10,000 Border Patrol agents were authorized, and to date, 
almost 18 months into that period, we have a little over 500 
that have been trained and put in the field, solely because we 
don't have the capacity to train more than we are training with 
our current infrastructure, and absorb them.
    In fact, CBP officials have told us that even if they had 
2,000 per year trained, they physically could not absorb that 
many Border Patrol agents in the field. So my question is, if 
we were to need, in your opinion, after you review the process, 
and I would appreciate you letting me know your opinion after 
you have looked at your facts, how many new port security 
personnel you need. Where would they be trained? And what 
numbers per year? How much would it cost us to train them? What 
kind of training do they need? Do you know off-hand where those 
port security personnel would be trained?
    Mr. Jackson. It depends on which ones we are talking about. 
The Coast Guard at their facilities train their people to do 
this MTSA Act inspection and auditing work, and CBP has 
different facilities for theirs. So they are done in different 
places. I am very well aware of the gating limit on Border 
Patrol training at about the level of 1,500 per year, which is 
what we will put into the field this year with the Border 
    Mr. Rogers. I am thinking specifically about our seaports.
    Mr. Jackson. Yes, sir.
    Mr. Rogers. Where are those personnel trained?
    Mr. Jackson. I would have to ask. I will have to get back 
to you on that, sir.
    Mr. Rogers. If you would, and what the cost would be, and 
what you think with our current infrastructure the number per 
year that we could train would be. I would appreciate that.
    Mr. Jackson. Yes, sir.
    Mr. Rogers. Thank you.
    Thank you, Mr. Chairman.
    Chairman King. The gentleman from New Jersey, the ever-
dynamic Mr. Pascrell.
    Mr. Pascrell. Thank you, Mr. Chairman.
    Before I ask my questions, I would like to ask the under 
secretary, the committee has been asking for an organizational 
chart of DHS for months now, and can you assure me that we are 
going to get it by the end of the week?
    Mr. Jackson. I will give it to you tonight, sir. It is one 
that I can show you.
    Mr. Pascrell. Thank you for a quick answer.
    Let's start off with an easy one. In the aftermath of the 
Dubai Ports dispute, I am somewhat weary of the 
administration's hiring of Hutchison Whampoa, a Hong Kong-based 
company with close ties to China, to help detect nuclear 
materials inside cargo passing through the Bahamas to the 
United States and elsewhere.
    Now, in fact Clark Kent Ervin, who is going to be 
testifying in a little while, he was the first Homeland 
Security inspector general, and has stated that the $6 million 
contract given could compromise U.S. homeland security. Now, I 
understand that the Department of Energy is going to finalize 
this contract.
    I would like to know the following: What level the DHS has 
been involved with in this process?; secondly, to what extent 
can you assure the committee that all security concerns have 
been addressed, and in particular whether or not we have or 
will have in the future CSI inspectors on the ground at this 
particular fort? Mr. Under Secretary?
    Mr. Jackson. Yes, sir. Let me explain what this contract 
is. It is an Energy Department Megaports contract to put 
radiation detection material in the Bahamas port. The machines 
are in this particular configuration in this port, not fixed 
portals that you drive things through, but rather they are 
incorporated into the so-called ``straddle'' carriers, the 
machines, the trucks that move containers from one point to 
another inside of a port.
    That equipment is an agreement to manage that equipment, to 
run that program, is a government-to-government commitment, not 
a commitment with the terminal operating company, the 
    Mr. Pascrell. A government-to-government?
    Mr. Jackson. Yes, sir.
    Mr. Pascrell. Which two governments?
    Mr. Jackson. The Bahamian government. So the machines are 
on equipment that is run literally by a terminal operating 
company, but when the machine is turned on, it cannot be turned 
off without the monitoring service, which is the government 
function there, knowing about it. The signal about radiation 
detection goes to the government agency.
    The operating company does not manage the resolution of 
these alarms. It is not responsible for the resolution of the 
alarms. It is not responsible for the protocols of detection. 
It is not responsible for the program. It is simply part of 
this process that is used to be able physically to get a 
container to a point where it can be inspected with this 
    Mr. Pascrell. Will we have our own inspectors in that 
    Mr. Jackson. We are working closely to a CSI designation 
for this port. I am told that CBP is confident that we will be 
there shortly.
    Mr. Pascrell. I think that would be critical and answer a 
lot of our questions that we have concerning this particular 
deal. We have a lot of questions in many of our minds.
    I want to get into the budget right now, okay, if you will. 
For fiscal year 2007, the Department of Homeland Security 
requested $600 million for the targeted infrastructure 
protection program, a unified, non-mode-specific security grant 
program. However, over the past 4 fiscal years, the 
Appropriations Committees have provided mode-specific funds for 
transportation security grants, breaking out port, transit, 
rail, intercity bus security grants as separate budget line 
    What was the reasoning behind having ports and transit and 
rail buses and highway watch programs compete against each 
other for security funding? Or in your words, why are we 
bundling this when each of these areas are categorical and have 
their own unique entities?
    Mr. Jackson. The principle is to allow the local 
authorities and the owners of this infrastructure to be able to 
present the highest risk threats and to allow us to fund the 
highest risk treats. If I could just go back to last summer 
when the London transit attacks occurred, many of us in this 
room were focused quite intently on how to strengthen the 
transit security needs that we had.
    If we could give some flexibility to do transit or port, we 
could I think give ourselves a greater degree of focus on the 
highest risks. It is not a simple equation to figure out which 
is the greater of the competing demands to improve security. We 
are saying with this program we are making our state partners a 
much more active partnership than us making these priorities.
    Mr. Pascrell. Mr. Chairman, in conclusion, I just want to 
enter for the record, I think that this is the wrong way to 
fund these programs. They are competing against each other, and 
we will never get to the point of reflecting the emphasis and 
priorities of this committee.
    Thank you.
    Chairman King. The gentleman's remarks are so noted. I 
would point out that in the legislation which is going through 
the committee, we are segregating out money for port security.
    With that, the gentleman from North Carolina, Mr. 
    Mr. Etheridge. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for your testimony and your time 
here today. Let me quickly get to some questions on container 
security. I understand that you have 42 offices open now 
worldwide on the container security initiative. My 
understanding is you plan to expand to 50 by the end of this 
fiscal year. However, a recent GAO report states that the 
program is experiencing staffing shortages in the offices you 
have, of the 42 you have now in existence.
    We have also heard reports that some foreign port operators 
have been subject to only cursory inspection before being named 
CSI sites, despite Customs Border Protection and the Coast 
Guard and the State Department receiving outside information 
that corruption and fraud at these sites exists.
    My question is, how do you decide where to locate a CSI 
office? How do you assess the port security capabilities and 
their vulnerabilities? And thirdly, do you require the port 
management authority to address security concerns before 
opening an office?
    Mr. Jackson. Yes, sir, let me try to answer some of those 
questions as best I can.
    How do we assess? We use multiple different tools. One idea 
that is a driver of CSI is that we are trying to move to 
capture the largest amount possible of in-bound containers into 
the U.S. So at one level, it is the Willy Sutton model. We go 
where the money is. Here, we go where the containers are. We 
are looking for the big load-out ports that are moving the vast 
bulk of traffic in here.
    Right now, we are counting through CSI of about 75 percent 
of the in-bound traffic. By the end of the year, if we get to 
our 50 goal, we will be covering about 80 percent of the in-
bound traffic. So the first screen on that is where are the 
containers coming from.
    A second screen is that we look at multiple security tools. 
You are absolutely asking good questions, fair questions. The 
Coast Guard has an overseas program of port inspections. We use 
those tools. The Customs Service also does their own 
assessments. We have detailed conversations with the government 
where we propose to start this. We also assess the private 
sector as part of that work.
    So it is a series of different screens and tests to try to 
figure how best to target the CSI ports.
    Mr. Etheridge. How do you verify the progress? You do it 
initially, but how do you verify the progress as you move 
along? Do you have a place for quality control?
    Mr. Jackson. It is a good question. I know I don't have all 
the answers to it, and I would be happy to get some more 
granular information.
    Mr. Etheridge. Would you?
    Mr. Jackson. Yes, sir.
    Mr. Etheridge. Because I think that is critical in this 
    Mr. Jackson. Yes, sir. I agree.
    Mr. Etheridge. It is one thing to open an office, but if 
you aren't going to verify it and monitor the progress--One 
final point I would add in this area before moving to another 
one is that we hear a lot about technology. I am a great fan of 
    Mr. Jackson. Yes, sir.
    Mr. Etheridge. But it seems to me, having personnel on the 
ground gives you intelligence that you will never get from 
    Mr. Jackson. Agreed.
    Mr. Etheridge. If the personnel aren't there and we have 
opened an office, I think we open ourselves up to feeling good 
about having success in inspections, when really and truly we 
may be lulling ourselves to sleep for a problem.
    Mr. Jackson. If a CSI port is not staffed with CBP 
personnel, then we are not operating as a CSI port. We may have 
vacancies or shortfalls in moving people overseas. It is quite 
expensive and a time-consuming process to get people 
transferred to an overseas assignment and there. So there is 
some natural amount of turnover, but a corps of people running 
the program is indispensable and sir, I agree totally that that 
human-to-human contact where you can see it with your eyes and 
work with the people on the ground from our counterparts in CBP 
overseas is an indispensable part of the layered system of 
    Mr. Etheridge. All right, since you raised that issue, let 
me go a step farther then. How do you intend to handle the 
existing shortages? What plan do you have in place to deal with 
those, plus for those you plan to open an new office, because 
you have to have people to fill the vacancies when they come up 
and to make sure you have them. That is critical, it seems to 
    Mr. Jackson. Yes, sir. It is a staffing plan. In response 
to your question, I would be happy to get some vacancy analysis 
done and show you where we are with this. It is a commitment of 
the CBP leadership and DHS to make sure that we are adequately 
staffing the CBP program overseas for CSI.
    Mr. Etheridge. Would you? I think this committee would like 
to have that information.
    Mr. Jackson. I would be happy to give it to the committee.
    Mr. Etheridge. I think that is a critical issue.
    One final question, we are now dealing with legislation, 
and if Congress should provide the additional funding for DHS 
beyond the budget request, with all the stuff we have heard on 
port security need, if we should do that, how could you best 
utilize these funds to improve port security, in your own 
    Mr. Jackson. There are a couple of high priorities that I 
identified in my testimony that I would use money for first. 
The secure freight initiative, which gets us a greater capacity 
to get the next generation of targeting capacity merits money. 
We are reprogramming if necessary and reassigning money as 
possible to try to launch that in an effective way this year. 
If we need more money, we will ask for that because that is an 
indispensably high priority.
    The second area that I would mention is the area culled out 
of my testimony about next generation detection tools. If we 
can leverage the work that the ICIS experiment shows us, that 
might require us to assess our future budgets. It is not a plan 
that is fully baked now, but if we could get to something there 
that required additional expenditure or the reallocation of 
assets within DHS, that would be a priority for me.
    Third, I would say the TWIC program is a very, very 
important priority for making sure that we have fully funded. 
We have a path ahead identified inside the department about 
what we need for the rest of this fiscal year. We may need to 
come back and assess whether we should reprogram, reallocate or 
reassign money in some way or another to make sure that when we 
implement it fully in the coming year, we are adequately funded 
for that.
    Mr. Etheridge. Thank you, Mr. Chairman. Thank your 
indulgence. If I could make just one point on this. I would 
hope that as you share with us information between technology 
and personnel, as you are looking at these things, I would like 
very much to see, and I hope you will share with the committee, 
the issue of personnel on the ground for intelligence. I think 
this is an issue that we have a gray area that we need to have 
covered, and I would like to see that, if you will please.
    Mr. Jackson. Yes, sir.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Chairman King. I thank the gentleman.
    The gentleman from Rhode Island, who has been particularly 
active on the issue of radiation portal monitors, Mr. Langevin.
    Mr. Langevin. Thank you, Mr. Chairman.
    Mr. Secretary, I want to thank you for your testimony 
today. I enjoyed reading the testimony and I will have 
additional questions for the record. But just briefly, I would 
like to begin with, you referenced DHS's plan to expand the 
number of the radiation portal monitors and next generation 
advanced spectroscopic portals. A GAO study last month 
indicated that DHS is 5 years behind schedule to deploy more 
than 3,000 RPMs by 2009, and the program is underfunded by more 
than $300 million.
    My question to you first is, will you come to the Congress 
to ask for immediate funding so that the program can be 
completed as soon as possible?
    And next, a Senate report showed that less than 40 percent 
of cargo entering the country is screened for radiation. We 
have had an active discussion her already about screening 
cargo, but can you tell me what factors limit the rapid 
deployment of RPMs so that DHS can meet its goal of 100 percent 
inspection of cargo at our ports?
    If you can take the budget one, though, on the deployment 
of RPMs and the fact that DHS is behind schedule, I would like 
you to address that one first.
    Mr. Jackson. I would say that we are actually not behind 
schedule and that we have made very, very substantial progress 
since Secretary Chertoff has come into office. It was one of 
his very high initial priorities to explore this area. We have, 
with the Congress's help, funded the domestic nuclear detection 
office, the DNDO. The DNDO is aggressively working with CBP on 
the deployment of radiation portal monitors and the next 
generation of these RPMs.
    We have a very accelerated, aggressive, and I am telling 
you very promising procurement underway for this next 
generation of tools. We have been testing them in conjunction 
with the national labs where we have actual lab tests that are 
showing great promise. So we have a plan. The plan started 
predominantly with our land border crossings for this 
deployment, where we saw the immediate need to be so high. We 
are moving very rapidly into the maritime world.
    Right now, we see containers subject to RPMs, radiation 
portal monitors, at slightly over 50 percent right now. So we 
have seen, even when I first testified in the middle of the 
Dubai Ports World, this was lower by five or six points. So we 
are now in the very active phase of bringing every month 
substantial capacity online. I think that we will get to the 
goal that I mentioned of the 98 percent deployment of all 
containers screened by the end of fiscal year 2007.
    We have asked for a very large amount of money for DNDO, 
and the Congress so far has been very supportive. If we feel 
like we need more, we will come and ask you. So that is the 
budget part of that equation.
    Mr. Langevin. If I could ask, in terms of follow up right 
there, if you had the additional money now, though, isn't it 
true that you could accelerate the deployment of those border 
monitors at border crossings in our ports right now?
    Mr. Jackson. I would have to go back and look at the 
question of whether we can push the supply chain faster than we 
are. We are buying very aggressively. One part of what we have 
looked at is there are certain components of these machines 
that we would like to see available in a more rapid turnaround. 
We have looked internally about how to provide incentives to 
industry to make sure that those components are available so 
that we could accelerate into the next generation as soon as 
the technology is refined.
    So I don't now for sure whether we are buying up everything 
on the assembly line, and if the assembly line is working at 
maximum capacity. I know that we are buying a very considerable 
amount and that we have invested people and the dollars to do 
it as fast as possible.
    Mr. Langevin. Mr. Secretary, would you get back to us with 
the answer to that question? Because it is my understanding 
that it is within our capability, it is within DHS's 
capability, that if you had the funds, that you could deploy 
the radiation portal monitors at all of our borders, ports of 
entry, ports within 1 year. Actually, I had, with the help of 
this committee, passed an amendment that would have required 
the deployment of these radiation portal monitors within 1 
    It really is my understanding that it is a budget function, 
and it is a very small amount, approximately about $130 million 
over what the president has requested for radiation portal 
monitors. It would get the job done. I think it is both 
shortsighted and it is irresponsible for us not to appropriate 
and authorize that additional funding if it is that small 
amount of money.
    In comparison to what we are spending in Iraq on a daily 
basis, another $130 million is a small amount, in comparison to 
what it would do and what it would give us in terms of 
protection based on the threat.
    Mr. Jackson. I would be happy to give you some production 
capability figures. I will tell you that in response to a 
discussion of the amendment that you raise, I was briefed by my 
staff that we thought that there were production limits that 
would prevent us from meeting that even if money was not the 
issue. But I would be happy to provide a little bit of 
additional detail to unpack that assessment from our team for 
you, and let you know more detail about why they have that 
    Mr. Langevin. I would appreciate that.
    Mr. Jackson. Yes, sir.
    Mr. Langevin. With the chairman's indulgence, if you could 
just brief answer the last question, that was what are the 
limits on the rapid deployment of RPMs so that DHS could meet 
its goal. Are there technical things that you can point to?
    Mr. Jackson. I think the issues are money, as you have 
identified, and the technical production capabilities. There is 
also a third element that we are very mindful of, that we see 
just around the corner in the near term, some potential 
dramatic breakthroughs in the technology. So we are trying to 
make a balance here to say, how would you weigh the full-bore, 
spend all the dough, get it out as fast as possible, with a 
piece of technology which is now going to be replaced by a much 
more highly functioning piece of equipment? So we are trying to 
cover as much of the mass as we can, have layers of security in 
the interim while we move to a new technology.
    If this were pie-in-the-sky or we thought that it may or 
may not happen, that balancing act might have a different 
equation. But because we are so convinced that this next 
generation of radiation monitors, which will allow us to 
understand the particular types of radiation signal that we are 
getting, is around the corner and is possible, we are trying to 
balance those type of capital investments so that we have a 
long-term tool that will be satisfactory for the country.
    Mr. Langevin. Thank you. I know my time has expired, so I 
just wanted to end by saying that let's keep in mind, though, 
let's not let the perfect be the enemy of the good; that there 
will always be the next best technology out there; and from 
what I understand what we have right now on the market is good 
enough to do the detection that we need to do. There will 
always be better equipment, but let's not let the perfect be 
the enemy of the good.
    Mr. Jackson. I understand. That is a valid principle.
    Mr. Langevin. Mr. Chairman, thank you for your indulgence. 
I appreciate that.
    Chairman King. The gentlelady from Texas?
    Ms. Jackson-Lee. Thank you, Mr. Chairman. Let me personally 
thank you as well for your courtesies of last week. I 
appreciate it very much.
    Mr. Jackson, welcome. Let me thank you for your service. I 
have been known on this committee to be pointed with respect to 
my belief in some of the responses given by the Department of 
Homeland Security. I want to personally thank you for your 
leadership on another matter dealing with the aftermath of 
Hurricane Katrina, and specifically dealing with what I call 
the impact states.
    As you well know, we are still feeling it. You may hear 
from the city of Houston again for a number of issues, 
including housing, and maybe your collaborative efforts with 
the Department of Justice on security, I know that they are the 
ones that are handling that funding, but I do want to thank you 
on that.
    Mr. Jackson. Yes, ma'am. Thank you.
    Ms. Jackson-Lee. You are quite welcome.
    Do you have any assessment of the status of the Port of New 
Orleans at this time?
    Mr. Jackson. I don't have a particular security assessment. 
I do know that we have brought back the port to operational 
capabilities of a core nature. There are still some 
considerable damage and limits on the capacities in the port.
    Ms. Jackson-Lee. I would be interested if I could get a 
report on the functionality of the port at this time, separate 
and apart from security, but adding to that what is its 
security status.
    Mr. Jackson. Yes, ma'am. I would be happy to get it to you.
    Ms. Jackson-Lee. I say that because my questions will be 
intertwined with the vulnerability of ports both in terms of 
manmade disasters, terrorist acts, but also what we saw, the 
catastrophic event of Hurricane Katrina, and to a lesser extent 
Hurricane Rita.
    As you know, those of us on the Gulf, most of us have very 
large ports in our area, and in particular the Port of Houston 
is one of the largest in the nation. So I would be interested 
in what the vulnerabilities would be on that.
    I do want to acknowledge that for those of us who served on 
the Select Committee on Homeland Security, we have been working 
on this issue of port security for a very long time. I take 
note of the legislation by Loretta Sanchez and as well we 
offered a Democratic substitute, H.R. 1817. So we have been 
conversant with this, and then as a resident of Houston, we 
literally live by the port and understand some of its both 
deficiencies and its assets. When I say ``deficiencies,'' not 
of the Port of Houston, but just by having a port.
    I am reminded of after 9/11, if you will, the etching up of 
the Coast Guard, the U.S. Coast Guard that many have tended to 
take for granted, but have done an excellent job filling in for 
enhanced port security.
    So having said that, I want to point out what seems to be 
driving us at this point, which is the Dubai Ports. I call it 
debacle and crisis without a negative alluding to Dubai in any 
way. But the incident was negative in terms of what it 
generated. The concern there was, of course, about who was in 
charge of security. There was seemingly some attempt to deflect 
that, oh no, Dubai Ports would not handle security. It is 
internally handled by the Coast Guard.
    I think that is inaccurate because as a terminal operator, 
the terminal operator is by structure, as I understand it 
responsible for security. In this instance, Dubai Ports World 
would have been responsible for security of their terminals, 
and then the Coast Guard would be the entity that checked for 
compliance with security plans.
    From your knowledge, is that in fact true? And do you know 
how often the Coast Guard visits the terminal facilities to 
check compliance with security requirements? And does the Coast 
Guard engage in unannounced visits? I think that was a fine 
line on which we were raising our voices, that the intricate 
secrets of security at one port would certainly be similar to 
those in other ports, and you would be exposing the nation's 
ports to the possible review by individuals who would not have 
our best intentions.
    If you would answer that, and let me just share another 
point with you that I would be interested in having you answer, 
is the House homeland security presidential directive which 
requires the development of a maritime infrastructure recovery 
plan to resume trade in the event of a terrorist act at a port. 
I would almost hope that they would amend that and include a 
natural disaster.
    This plan has been delayed to incorporate lessons learned 
from Katrina, which is what I have just asked for. But as the 
plans have been delayed, my concern would be what 
vulnerabilities do we have as it relates to terrorist acts? 
When will the plan be completed? I would like to see a dual 
track. I would like to see us move forward on the existing 
response to terrorist acts, and work on the natural disaster, 
because we can be attacked at any moment. If the terrorist 
attack occurred at a port tomorrow, what would be the response?
    I understand the Coast Guard would set maritime security 
conditions, but what would that mean for CBP? And couldn't the 
security actions required after an attack result in a shutdown 
even if a shutdown order is not given? I would appreciate your 
insight on those questions.
    Chairman King. Mr. Secretary, answer the questions here.
    Mr. Jackson. Okay. Yes, sir. Who is responsible for 
security? It is a shared responsibility under a government 
mandated regime that was established through MTSA and other 
authorities under law. The Coast Guard has this broad MTSA 
authority. Part of that requires terminal operating companies 
to have a certain security regime in place. So they have, as 
you asked me, affirmative obligations there.
    The underlying regime in the security regime is that of the 
Coast Guard as established through law through MTSA. Similarly, 
the Customs and Border Protection has a security role in 
screening and inspecting cargo in a port facility. The port 
terminal operator does not know what container is going to be 
pulled, inspected or de-vanned. So this is a layer of 
protection about which specific containers we are worried 
about, and which specific actions will be mandated.
    They sometimes have a role in helping us move a container 
from one place to the next, they oftentimes have that role, but 
it is at the direction of CBP that tells them and doesn't 
explain why that we want to look at a particular container. So 
the Coast Guard and CBP have therefore routine presence in the 
    The Coast Guard's principal presence in the port is 
revolving around the captain of the port, a Coast Guard 
officer. In Houston, it is a senior Coast Guard officer that 
pulls together the port security plan for the entire port and 
other port operational integration that is needed for the port. 
So the question about sharing the full security secrets of the 
U.S. government with a terminal operator is really not I think 
a particularly strong concern because most of the most precious 
and I would say confidential parts of this which relate to 
targeting are, again, not the terminal operators 
    In the work that the Coast Guard does as a vessel 
approaches the terminal, in the work that we do to screen the 
vessel itself and the mariners on it, again a public function, 
not a private function. So it is a combination of 
responsibilities, all of which integrate into a layered system 
of security, but which is I think appropriately protected in 
terms of the confidentiality of the material.
    On the second general question about maritime 
infrastructure recovery plan, that was part of the maritime 
domain awareness planning work that is required. We have a 
broad strategic plan that addresses this issue that has been 
published. We have a specific annex on this issue. This bill 
calls for further work on this question of recovery.
    I think you are right to ask for us to focus carefully on 
recovery, not only from terrorist attacks, but natural 
disasters. When Hurricane Pam looked like it was headed up the 
Houston ship channel, I know that we spoke and we were all very 
concerned about the impact upon the economy in this vital 
national asset. So our contingency planning and re-starts 
should cover both of those threats.
    Ms. Jackson-Lee. Did you answer me to say there was a plan 
    Chairman King. The gentlelady's time has expired and we do 
have a second panel and we have run significantly over.
    I want to thank the secretary for his testimony. We are 
awaiting the second panel. I would like to take the 
prerogative, though, of asking you a question which is going to 
be raised by each of the members of the second panel, I 
believe. I would just like to, if you could give us your 
statement on it so at least will have it in some context.
    This is on CBP, with the ATS and the 24-hour notice. That, 
as I understand it, only requires manifest data. I think each 
of the witnesses are going to say that much more comprehensive 
cargo entry data would be required for that really to be 
effective. How would you address that so we will have this in 
context when each of the subsequent witnesses testify?
    Mr. Jackson. Mr. Chairman, I would agree that a richer set 
of data should be gathered to give us the next generation tools 
that we want in the targeting world, and that is core to the 
whole idea of secure freight, that we can gather, fuse and use 
the information about the pre-history of a given container that 
is more than just the weigh-bills information.
    So I am in strong agreement with that, and that is a 
commitment of this department to get a richer data pool from 
which to do our screening.
    Ms. Jackson-Lee. Mr. Chairman, would you yield please? I 
want to make sure that Mr. Jackson is able to answer that 
question that I originally posed. I just wanted a simple yes or 
no as to whether the plan is completed. If he could give that? 
The plan that had to do with the Hurricane Katrina impact is 
the original plan.
    Mr. Jackson. I understand that we have an annex on recovery 
that is completed. I will validate that and be happy to share 
    Ms. Jackson-Lee. Would you please? I would greatly 
appreciate it.
    Thank you, Mr. Chairman.
    Chairman King. Thank you.
    I want to thank Secretary Jackson for his testimony. As 
always, we thank you for your cooperation. We look forward to 
working with you. I will take you up on the offer to--
    Mr. Jackson. I look forward to it. It will be a good day.
    Chairman King. Great. Thank you very much. The secretary is 
excused, and again I thank you very much for your testimony.
    Mr. Jackson. Yes, sir.
    Chairman King. Now, we will call the second panel. Let me 
thank each of the witnesses on the second panel for agreeing to 
testify today. I realize you had significantly short notice. I 
also know that each of you are very busy, so I want to thank 
you for taking the time to be here today, and also to thank you 
for the contributions that you have made to this whole issue of 
port security.
    I will just briefly identify the witnesses. This is in no 
way giving them the accolades they deserve, but in the 
interests of time we will go through it quickly.
    Mr. Christopher Koch, who is the president and CEO of the 
World Shipping Council; Mr. Jonathan Gold, who is vice 
president of Global Supply Chain Policy with the Retail 
Industry Leaders Association; Mr. Clark Kent Ervin, who is now 
a private citizen, but was the inspector general of the 
Department of Homeland Security; and Bethann Rooney, who is the 
manager of port security for the Port Authority of New York and 
New Jersey, and is involved not just in maritime security, but 
in air security as well.
    In fact, it seems whenever I show up somewhere in New York 
to speak, she is there to make sure that the port authority 
doesn't get shortchanged. So even though you are hounding me 
and following me and harassing me, you are doing your job very 
well and I want to thank you for that.
    I now recognize Mr. Koch.

                        SHIPPING COUNCIL

    Mr. Koch. Thank you, Mr. Chairman, and for the opportunity 
to be here today.
    Our view of this is basically the strategy that DHS has 
established as a fundamentally sound strategy. For 
containerized cargo, they have a 24-hour rule strategy which 
means do your risk assessment before the container is loaded on 
the ship. We think that is the right strategy. The carriers 
which I represent provide the government with the data they 
have on those shipments 24 hours before loading. This is so-
called the screening process.
    The strategy then is to inspect 100 percent of the boxes 
that you have security questions about, and hopefully then get 
to the point of running through radiation scanners 100 percent 
of all containers coming into the United States.
    And finally, the piece of build international agreements to 
extend this off our shores as best we can.
    So if the strategy is sound, that doesn't mean there aren't 
opportunities for considerable improvements to how we implement 
those strategies. We thank the committee for trying to find 
those ways and work with the industry to get there.
    A number of comments on H.R. 4954, which we have provided 
in more detail in our written comments, but a couple of points 
I would like to highlight. First is that we encourage the 
committee as they draft this bill to recognize that Congress 
already has passed a coherent framework for a lot of these 
issues. MTSA, the Marine Transportation Security Act, and the 
Trade Act, both passed in 2002, provide a fundamental strategy. 
We hope that in doing the amendments to the law that you will 
pass, that the layering of these new pieces come on top of it 
in a way that is not inconsistent.
    Let me give an example. One of the priorities that we agree 
with this committee on is improving the trade data used for the 
targeting system. We think there is a consensus that needs to 
be done. The bill needs to be very clear, however, that it is 
consistent with existing law that says that data should be 
acquired before vessel loading, so that the targeting center in 
Northern Virginia can do the screening on that before it is put 
on the vessel. It doesn't do any good to get the data after it 
is already on the vessel. So there are some language changes we 
have identified in the bill already that we find very important 
and hope they are dealt with.
    Secondly, we think getting the TWIC out is absolutely 
essential. It is already mandated by law. We recognize that, 
and it probably should not need another directive from Congress 
to mandate what has already been mandated, but if so, we are 
supportive of that. The bill before you right now does have a 
provision in it calling for an interim security screening of 
some sort of port workers. We are not entirely sure how that 
would work and we would like to discuss that with the committee 
after the hearing.
    Finally, in terms of C-TPAT, the program is in place, as 
you know, by Customs. Some of the terms of the bill that try to 
mandate the provisions in C-TPAT we just urge the committee to 
consider carefully. Two in particular is whether or not you 
really want to hold importers accountable all the way back to 
the point of origin of where the goods are first manufactured 
and put in the smallest possible container. That is a kind of 
obligation that we think many importers would find very 
difficult to implement.
    The second thing we would like to have you take a look at 
is the bill calls for container security devices to be put on 
boxes. For reasons we have outlined in some detail in our 
testimony, we have questions about whether or not that would be 
a realistic obligation for importers to be able to abide by.
    The final two points I would like to make is we are, like 
Department of Homeland Security Deputy Secretary Jackson said, 
very interested and enthusiastic about the ICIS project. We 
think it has great potential, but there are a number of issues 
that would need to be worked out for it to become an 
operational reality.
    So a final comment in relationship to the objective of 
that, which is to enhance the inspection of containers, we 
would note a number of concerns where the bill, H.R. 4899, the 
Sail Only If Scanned bill. We do not think that is a realistic 
bill for reasons we have identified in our testimony. There are 
a lot of problems with it. We posed some questions to the 
committee of clarifications we think would be very important if 
that issue is going to become seriously discussed.
    Thank you, Mr. Chairman.
    [The statement of Mr. Koch follows:]

                 Prepared Statement of Christopher Koch

    Mr. Chairman and members of the Committee, thank you for the 
opportunity to testify before you today. My name is Christopher Koch. I 
am President and CEO of the World Shipping Council, a non-profit trade 
association representing international ocean carriers, established to 
address public policy issues of interest and importance to the 
international liner shipping industry. The Council's members include 
the full spectrum of ocean common carriers, from large global operators 
to trade-specific niche carriers, offering container, roll-on roll-off, 
car carrier and other international transportation services. They carry 
roughly 93% of the United States' imports and exports transported by 
the international liner shipping industry, or more than $500 billion 
worth of American foreign commerce per year.\1\
    \1\ A list of the Council's members can be found on the Council's 
website at www.worldshipping.org.
    I also serve as Chairman of the Department of Homeland Security's 
National Maritime Security Advisory Committee, as a member of the 
Departments of Homeland Security's and Treasury's Advisory Committee on 
Commercial Operations of Customs and Border Protection (COAC), and on 
the Department of Transportation's Marine Transportation System 
National Advisory Council. It is a pleasure to be here today.
    In 2005, American businesses imported roughly 11 million loaded 
cargo containers into the United States. The liner shipping industry 
transports on average about $1.5 billion worth of containerized goods 
through U.S. ports each day. In 2006, at projected trade growth rates, 
the industry will handle roughly 12 million U.S. import container 
loads. And these trade growth trends are expected to continue. The 
demands on all parties in the transportation sector to handle these 
large cargo volumes efficiently is both a major challenge and very 
important to the American economy. At the same time that the industry 
is addressing the issues involved in efficiently moving over 11 million 
U.S. import containers this year, we also must continue to enhance 
maritime security, and do so in a way that does not unreasonably hamper 
    The Department of Homeland Security (DHS) has stated that there are 
no known credible threats that indicate terrorists are planning to 
infiltrate or attack the United States via maritime shipping 
containers. At the same time, America's supply chains extend to tens of 
thousands of different points around the world, and the potential 
vulnerability of containerized transportation requires the development 
and implementation of prudent security measures. Like many parts of our 
society, we thus confront an unknown threat, but a known vulnerability.
    The DHS maritime security strategy involves many different, but 
complementary, pieces. It includes the establishment of vessel security 
plans for all arriving vessels pursuant to the International Ship & 
Port Facility Security Code (ISPS Code) and the Maritime Transportation 
Security Act (MTSA). It includes the establishment of U.S. port 
facility security plans and area maritime security plans pursuant to 
the ISPS Code and MTSA, and the establishment by the Coast Guard of the 
International Port Security Program (IPSP) pursuant to which the Coast 
Guard visits foreign ports and terminals to share and align security 
practices and assess compliance with the ISPS Code. It includes the 
Maritime Domain Awareness program, under which DHS acquires enhanced 
information about vessel movements and deploys various technologies for 
better maritime surveillance. The challenge of effectively patrolling 
all the coasts and waters of the United States is obviously a large 
one. The MTSA directives and DHS efforts also include enhanced security 
for personnel working in the maritime area. And last, but certainly not 
least, these directives and efforts include an array of initiatives to 
enhance cargo security, including: (a) cargo security risk assessment 
screening, (b) the Container Security Initiative, (c) the Customs' 
Trade Partnership Against Terrorism (C-TPAT) Program, and (d) container 
inspection technology deployment.

    I. Introductory Comments on the Current Maritime Security Strategy
    The government's multi-layer security strategy is fundamentally 
sound, and seeks to address cargo and maritime security on an 
international basis as early as is practicable. It does not wait to 
address security questions for the first time when a ship and its cargo 
arrive at a U.S. port. Implementation of the strategy, however, can be 
further developed and strengthened.
    It is very important to recognize that Congress has already enacted 
a broad, coherent statutory framework and set of authorities to address 
the maritime and cargo security challenge. The Maritime Transportation 
Security Act and the Trade Act, both enacted into law in 2002, address 
many of the issues under current discussion and in H.R. 4954 in a 
satisfactory manner. As a result, we recommend that new statutory 
provisions should be enacted when needed to fill specific gaps or to 
direct specific, needed actions. Care should be exercised not to add 
unnecessary layers of general statutory provisions on top of existing 
statutory authorities.
    The maritime security challenge is to build on the fundamentally 
sound strategic framework that DHS has developed and to continue to 
make improvements on what has been started. Specifically, we believe 
that priority DHS consideration should be given to:
    1. Improving the cargo shipment data collected and analyzed by 
Customs and Border Protection's (CBP) National Targeting Center before 
vessel loading. If cargo risk assessment is to be a cornerstone of DHS 
policy--which we believe is a correct approach, and cargo security 
screening is to be performed before the cargo is loaded onto a ship 
destined for the U.S.--which we also believe is a correct approach, it 
should be using more complete cargo shipment data to perform the risk 
assessment than only the ocean carriers' bills of lading;
    2. Continue expanding international cooperation through the 
Container Security Initiative network;
    3. Continuing to improve and strengthen the C-TPAT program;
    4. Promulgating regulations to implement the MTSA mandate of 
maritime Transportation Worker Identification Cards for U.S. port 
workers; and
    5. Undertaking a priority examination of the merits and feasibility 
of the Integrated Container Inspection System (ICIS) pilot project, the 
issues that would be involved in the widespread application of ICIS-
type container inspection and radiation screening equipment, and the 
interface and use of such equipment and its results by Customs 

    II. Foreign Investment in the Maritime Industry and Infrastructure
    Because the recent controversy in Congress over Dubai Ports World's 
acquisition of P&O Ports raised the issue of foreign investment in the 
maritime and port business, some comments on that issue are in order, 
particularly because there are bills introduced in the House to prevent 
foreign investment in the nation's maritime infrastructure.
    Stevedoring and marine terminal operations are a service industry 
that is open to foreign investment. Billions of dollars of foreign 
investment has been made in the U.S. over recent years in this sector, 
and that investment has contributed substantially to a transportation 
infrastructure that is critical to moving America's commerce 
efficiently and reliably. The investment has come from Japanese, South 
Korean, Danish, British, Chinese, French, Taiwanese, and Singaporean 
businesses, just as American companies have been allowed to invest in 
marine terminal and stevedoring businesses in foreign countries.
    The substantial majority of American containerized commerce is 
handled in U.S. ports by marine terminal operators that are 
subsidiaries or affiliates of foreign enterprises, usually the 
container shipping lines themselves. This is an international, highly 
competitive industry, providing hundreds of thousands of American jobs. 
The United States depends on it, and it in turn has served the needs of 
American commerce well, adding capacity and service as the needs of 
American exporters and importers have grown.
    An important element of the U.S. government's position in 
international trade negotiations for many years, under both Democrat 
and Republican administrations, has been the importance of securing the 
ability of international investment to flow into various international 
service industries. It is a principle of substantial importance to many 
sectors of the American economy. There are many billions of dollars of 
American service industry investments around the world, including 
banking, insurance, food service, accounting, construction, energy, 
engineering, etc.
    U.S. marine terminal facilities, whether operated by U.S. or non-
U.S. owned companies, must and do comply with all the government's 
applicable security requirements. There is no evidence that terminal 
facilities' operations conducted by foreign controlled companies are 
any less secure, or in any way less compliant with security 
regulations, or in any way less cooperative with U.S. government 
security authorities than U.S. controlled companies. In fact, these 
companies work closely and cooperatively with the Coast Guard, CBP, the 
U.S. military, and other U.S. law enforcement agencies.
    This is an international industry and has been for many years. Less 
than 3% of American international maritime commerce is transported on 
U.S.-flag ships, and foreign owned carriers are responsible for the 
capital investment in most of those ships. American owned liner 
shipping companies transport roughly 5% of the trade, and their vessels 
are largely foreign flag.
    The leading American liner shipping companies, such as Sea-Land, 
APL, and Lykes, were sold by their U.S. owners years ago to foreign 
companies, and neither the Executive Branch nor an informed Congress 
did anything to protest or stop this change. Foreign ownership of 
shipping companies and U.S. marine terminal operating companies has 
been part of our nation's economic make-up for years. We live in a 
global economy and society where it is simply a fact that most of this 
important component of the nation's ``critical infrastructure'' \2\ is 
owned and operated by foreign companies. One might wish American 
companies were dominant industry actors, but they aren't. Further, U.S. 
financial markets have demonstrated little enthusiasm for international 
liner shipping due to its high capital investment requirements, 
cyclicality, and intense competition, as well as the fact that other 
nations' tax laws are more favorable to shipping.
    \2\ The liner shipping industry and marine terminal operators 
logically fall within the most commonly used definitions of ``critical 
infrastructure''. See, e.g., the National Infrastructure Protection 
Plan definition: ``Systems and assets, whether physical or virtual, so 
vital to the United States that the incapacity or destruction of such 
assets, systems, networks or functions would have a debilitating impact 
on security, national economic security, national public health or 
safety, or any combination of those matters.'' The liner shipping 
industry transports roughly 11 million containers of imported goods per 
year to American importers and consumers, 7 million containers of 
exported goods from American businesses, and important government and 
military cargoes. The value of this goods movement is over $1.5 billion 
per day, and these supply chains connect the American economy to the 
rest of the world. The industry that is responsible for this 
transportation service is critical infrastructure.
    The U.S. has been well served by the investment capital these 
foreign companies have made and continue to make in serving U.S. 
commerce.\3\ The United States' economy and U.S. importers and 
exporters would be significantly harmed by policies that discourage or 
prevent this foreign investment. This is particularly true now with 
trade volumes pressing U.S. transportation infrastructure's capacity, 
and with ports, state governments, and the federal government all 
searching for additional investment capital to meet the nation's 
maritime transportation infrastructure needs and to keep American 
commerce competitive in the global market.
    \3\ The hundreds of millions of dollars presently being invested in 
Portsmouth, Virginia by Maersk, in Mobile, Alabama by Maersk and CMA-
CGM, and in Jacksonville, Florida by MOL are just three examples of 
this ongoing commitment to the construction of improved U.S. 
transportation infrastructure.
    This nation is not at risk from foreign capital being invested in 
it, but it would be at risk if it were to discourage continued foreign 
investment in the maritime industry serving its needs.
    There is another aspect to the recent Congressional interest in 
foreign ownership of marine terminal operators that has been myopic. In 
addition to the Dubai Ports World-P&O Ports transaction being 
mischaracterized as a purchase of U.S. ports--which it was not, and in 
addition to the fact that no facts were provided that showed DPW to be 
a security risk as a terminal operator--and in fact Dubai was shown to 
be an important ally and supporter of U.S. efforts in the Middle East 
and one which is trusted by the U.S. military to service its vessels 
and cargo. The entire controversy ignored the fact that, even with the 
six U.S. marine terminals being spun off from this purchase, DPW will 
be the third largest marine terminal operator in the world, and will be 
loading cargo onto vessels destined for the United States from its 
facilities in Australia, Europe, Asia and the Caribbean every day.
    Wouldn't it make sense for the U.S. security strategy to try to 
include companies like DPW as partners of the government's efforts to 
secure international commerce? DPW is a knowledgeable and professional 
actor, both globally and in a particularly relevant part of the world. 
Instead, the Congress just told the third largest terminal operator in 
the world that it did not trust them, when the facts presented did not 
justify such a judgment of the company. The unfortunate treatment of 
this transaction should be kept confined to the narrowest possible 
    The international shipping industry and America's foreign commerce 
are global enterprises. Devising and implementing effective maritime 
security enhancements requires the participation and effort of many 
governments and many foreign owned and operated business enterprises. 
The U.S. government does not have the capability or the jurisdiction to 
do this by itself. It needs the cooperation and assistance of foreign 
governments and foreign owned businesses. The Coast Guard and Customs 
and Border Protection fully recognize this and are working to build and 
enhance global security strategies. Protectionism and unfounded 
criticism of foreign owned enterprises will impair those efforts and 
will impair security enhancement efforts.

    III. Comments on H.R. 4954, the SAFE Port Act
    We commend the Committee for its continued interest in maritime and 
cargo security, and for its interest in trying to fashion something 
that may be of constructive value out of the recent, unproductive 
controversy over the Dubai World Ports issue. We can provide the 
Committee staff with detailed section-by-section comments at a later 
time, and hope the following more general comments on the legislation 
will be helpful.

    Section 4. Strategic Plan: It is appropriate for Congress to 
instruct DHS to develop a strategic plan for the security of the 
maritime transportation system, but it has already done so in MTSA (46 
U.S.C. 70103). DHS has produced and continues to produce strategic 
plans for maritime security and infrastructure protection. Last fall, 
DHS issued its National Strategy for Maritime Security, and in addition 
is producing eight supporting strategic plans, including: the National 
Plan to Achieve Domain Awareness, the Global Maritime Intelligence 
Integration Plan, the Interim Maritime Operational Threat Response 
Plan, the International Outreach and Coordination Strategy, the 
Maritime Infrastructure Recovery Plan, the Maritime Transportation 
System Security Plan, the Maritime Commerce Security Plan, and the 
Domestic Outreach Plan. The Coast Guard also recently completed the 
Maritime Subsector plan component of the National Infrastructure 
Protection Plan.
    There are plenty of strategic plans. We do not see a need for 
Section 4. Maritime security enhancements are more likely to come from 
implementing new security measures than instructing the bureaucracy to 
produce more strategic planning documents.

    Section 5. Protocols for the Resumption of Trade: The Council 
supports this section's instruction that DHS develop protocols for the 
resumption of trade in the event of a transportation security incident, 
but notes that, based on our discussions with CBP and the Coast Guard 
on this issue, the issues involved are often highly dependent on the 
facts of the situation. One very important issue that should be made 
explicit, however, is that, once the federal government has issued its 
security approval for foreign or interstate commerce to move, state and 
local governments are preempted from second-guessing or trying to 
overrule or interfere with those federal decisions.

    Section 6. Improvements to Automated Targeting System: This is 
perhaps the most important issue addressed by the bill. The existing 
and statutorily mandated strategy of the U.S. government is to conduct 
a security screening of all containerized cargo shipments before they 
are loaded on a U.S. bound vessel in a foreign port. The correct time 
and place for the cargo security screening is before the containers are 
loaded on a ship.
    In order to be able to perform this advance security screening, CBP 
implemented the ``24 Hour Rule'' in early 2003. Under this rule, 
carriers are required to provide CBP with their cargo manifest 
information regarding all containerized cargo shipments at least 24 
hours before those containers are loaded onto the vessel in a foreign 
port. CBP, at its National Targeting Center in Northern Virginia, then 
screens every shipment using its Automated Targeting System (ATS), 
which also uses various sources of intelligence information, to 
determine which containers should not be loaded aboard the vessel at 
the foreign port, which containers need to be inspected at either the 
foreign port or the U.S. discharge port, and which containers are 
considered low-risk and able to be transported expeditiously and 
without further review. Every container shipment loaded on a vessel 
bound for the U.S. is screened through this system before vessel 
loading at the foreign port. Customs may issue the carrier a ``Do Not 
Load'' message on any container that is so screened if it has security 
concerns that need to be addressed.
    The DHS strategy is thus based on its performance of a security 
screening of relevant cargo shipment data for 100% of all containerized 
cargo shipments before vessel loading, and subsequent inspections of 
100% of those containers that raise security issues after initial 
screening. Today, we understand that CBP inspects roughly 5.5-6% of all 
inbound containers (roughly 600,000 containers per year), using either 
X-ray or gamma ray technology (or both) or by physical devanning of the 
    We all have a strong interest in the government performing as 
effective a security screening as possible before vessel loading. 
Experience also shows that substantial disruptions to commerce can be 
avoided if security questions relating to a cargo shipment have been 
addressed prior to a vessel being loaded. Not only is credible advance 
cargo security screening necessary to the effort to try to prevent a 
cargo security incident, but it is necessary for any reasonable 
contingency planning or incident recovery strategy. Today, while the 
ATS uses various sources of data, the only data that the commercial 
sector is required to provide to CBP for each shipment for the before-
vessel-loading security screening is the ocean carrier's bill of 
lading/manifest data filed under the 24 Hour Rule. This was a good 
start, but carriers's manifest data has limitations.
    Cargo manifest data should be supplemented in order to provide 
better security risk assessment capabilities. Currently, there is no 
data that is required to be filed into ATS by the U.S. importer or the 
foreign exporter that can be used in the pre-vessel loading security 
screening process. This occurs, even though these parties possess 
shipment data that government officials believe would have security 
risk assessment relevance that is not available in the carriers' 
manifest filings, and notwithstanding the fact that the law requires 
the cargo security screening and evaluation system to be conducted 
``prior to loading in a foreign port''. Today, cargo entry data is 
required to be filed with CBP by the importer, but is not required to 
be filed until after the cargo shipment is in the United States, often 
at its inland destination--too late to be used for security screening 
    In September 2004, the COAC Maritime Transportation Security Act 
Advisory Subcommittee submitted to DHS a recommendation that importers 
should provide CBP with the following data elements before vessel 

        1. Better cargo description (carriers' manifest data is not 
        always specific or precise)
        2. Party that is selling the goods to the importer
        3. Party that is purchasing the goods
        4. Point of origin of the goods
        5. Country from which the goods are exported
        6. Ultimate consignee
        7. Exporter representative
        8. Name of broker (would seem relevant for security check.), 
        9. Origin of container shipment--the name and address of the 
        business where the container was stuffed, which is often not 
        available from an ocean carrier's bill of lading.
    An ocean carrier's bill of lading by itself is not sufficient for 
cargo security screening. Risk assessment is being conducted on the 
basis of commercial documents that may not inform DHS of where the 
goods are actually coming from, who is buying the goods, who is selling 
the goods, or the name and address of the party that stuffed the 
container. It would seem logical that the earlier filing of these 
shipment data elements would improve CBP's cargo security screening 
    The government needs to decide what additional advance cargo 
shipment information it needs to better perform pre-vessel loading 
cargo screening. It may include the data elements recommended above, or 
it may include additional desired data elements beyond that list. While 
this is not a simple task, it is important that progress be made on 
deciding what additional data should be obtained for this purpose, and 
it is important that the cargo interests, and not just carriers, be 
required to provide the relevant data in time to do the advance 
security screening before vessel loading in the foreign port.
    The need to enhance the data used in the ATS has been recognized by 
DHS, by the Government Accountability Office, by CBP, by importers, and 
by carriers. It is important to note that MTSA has already established 
that the maritime cargo security screening system is governed by the 
``24 Hour Rule'' strategy of ``establishing standards and procedures 
for screening and evaluating cargo prior to loading in a foreign port 
for shipment to the United States.'' (46 U.S.C. 70116(b)(1)). Further, 
Section 343 of the Trade Act of 2002 already specifically authorizes 
and instructs DHS to establish mandatory advanced electronic 
information for cargo security screening, including the quite correct 
directive that ``the requirement to provide particular information 
shall be imposed on the party most likely to have direct knowledge of 
that information''.
    What is needed is for DHS to develop and propose new regulations 
identifying and requiring the next generation of data for the ATS. 
While a new statute should not be necessary to achieve this, we support 
Section 6's effort to require such action, but only if its language is 
clarified that the additional cargo data is to be obtained prior to 
vessel loading, not ``prior to importation''. It is essential that this 
bill be consistent with the established before vessel loading security 
screening strategy of MTSA, as well as Section 343 of the Trade Act.

    Section 7. Uniform Data for Government-Wide Usage We support this 
provision, and note that Congress has appropriated hundreds of millions 
of dollars on the Automated Commercial Environment (ACE) system, which 
will hopefully meet this section's goals.
    Section 8. Verification for Individuals With Access to Secure Areas 
of Seaports We fully support the Committee's efforts to expedite 
implementation of the MTSA requirements to establish a Transport Worker 
Identification Card (TWIC) program, although another statutory 
directive to DHS to implement the existing MTSA directive seems 
unnecessary. As to Section 8's ``interim'' initiative to have DHS 
compare transport workers with unescorted access to secure seaport 
facilities against terrorist watch lists, we are fully supportive in 
concept, but unclear how this process would actually work. We would 
welcome the opportunity to work with the Committee staff to better 
understand this.

    Section 10. Container Security Standards and Verification 
Procedures Section 10 would require DHS to establish seal verification 
requirements within 180 days of enactment. This is an issue that is 
already addressed by MTSA (46 U.S.C. 70116). DHS and industry 
representatives have been working on it for some time. The challenges 
are several. First, it has become clear that without electronic seals 
and a global RFID e-seal reading infrastructure at ports around the 
world, such a requirement is not practical. Carriers themselves cannot 
verify seals before vessel loading; they will depend on foreign 
terminal operators at ports around the world to undertake such a task. 
It is for that reason that the Council and its member lines have been 
working hard to develop an international e-seal standard at the 
International Standards Organization. For many reasons, such a standard 
remains elusive. It is clear that implementation of such technology 
will take significantly more time. Second, an e-seal system and 
infrastructure would be very expensive, and security experts 
increasingly question whether such seals provide sufficient security 
benefits to justify the costs, particularly if more advanced, effective 
technology can be developed. Third, seal verification anomalies would 
be frequent, and both CBP and the industry have concerns that 
addressing the many thousands of expected anomalies, which are likely 
to have little national security implications, could be a difficult 
burden on the agency and commerce. Rather than adding another statutory 
layer on top of MTSA, we recommend the Committee obtain a full briefing 
on these issues from CBP and the industry. The information and issues 
involved are also relevant to Section 15 of the bill and its call for 
further research, development, testing and evaluation of technologies.

    Section 11. Radiation Detection and Radiation Safety The Council 
supports this section, and would also observe that the DHS strategy on 
this issue should consider, not only the deployment of such radiation 
detection equipment at U.S. ports of entry, but how the ``ICIS 
concept'', with its possible deployment of such equipment overseas by 
marine terminal operating companies, may fit into the government's 
strategy. This topic is discussed in greater detail in the next section 
of our testimony.

    Section 13. C-TPAT Like Section 12's treatment of CSI , it is 
appropriate to create a statutory foundation for this CBP program. We 
have several comments on this section. First, the Committee should 
carefully consider how far back in a supply chain it intends to hold a 
C-TPAT importer accountable. The bill's definition of ``point of 
origin'', going back to the point where goods are assembled into the 
``smallest exterior packaging unit'', may be feasible for some 
importers that order directly from a foreign manufacturer, but would 
probably be impossible for importers of many commodities and traded 
goods, and could be impossible for large importers that use many 
    Second, we note that in proscribing the Tier Three program for C-
TPAT importers, the bill would encourage ``container security devices'' 
(CSDs). We believe CSDs are not yet appropriate for inclusion in the 
program for the following reasons: (1) Neither the bill, DHS or the 
trade have developed clear definitions of what the requirements for 
such devices should be. Depending on who you talk to, it might include 
seals, electronic seals, the CSDs that were recently tested by CBP in 
its pilot tests, or ``Advanced CSDs'' being tested by Science and 
Technology within DHS. Do they have to have sensors that detect 
intrusion into the container via one door, via either door, through the 
walls? Do they have to detect conditions other than intrusion? (2) The 
possible technologies vary from using RFID (although there is not 
agreement on what radio frequency should be used for RFID) to wireless/
satellite devices. (3) To be effective and deployed on a commercial 
basis, RFID CSDs would require a global reading infrastructure to be 
built at ports around the world. That infrastructure does not presently 
exist. (4) There is no agreement on who would operate and control the 
CSD reading infrastructure or the information generated if RFID 
technology is used. (5) There is no agreement on how a marine terminal 
would know that a container arriving into it was supposed to have a CSD 
on it to be read. (6) There is no protocol in place for how to address 
anomaly readings or alerts that would be generated from CSDs. (7) There 
is no international standard for CSDs, and an internationally usable 
and accepted standard would be essential. The Council has been working 
diligently for several years at the International Standards 
Organization on the effort to establish a standard for electronic 
seals, and we have not yet succeeded. The process for establishing such 
a standard for CSDs has not even begun. (8) Many CSDs being discussed 
have the ability for persons to change or write new information into 
them after the container is closed. The security questions arising from 
the ability to write new information into such devices have not been 
resolved. (9) Acceptable error rates have not been satisfactorily 
    CSDs have a potentially important role for future container 
security enhancement, but they are not yet ready for inclusion as an 
element of the Tier Three importer concept.

    IV. Comments on H.R. 4899, the ``Sail Only if Scanned Act of 2006''
    While this hearing is on H.R.4954, H.R. 4899 was offered as an 
amendment to this bill in Subcommittee and defeated. Because it appears 
possible that H.R. 4899 will be offered again as an amendment to H.R. 
4954, and because it was defeated by only an 8-6 vote, some comments on 
this bill are offered for the Committee's consideration.
    We respectfully submit that H.R. 4899 is poorly drafted and raises 
many unanswered questions. Even more importantly, if it were actually 
enacted into law and implemented, it would have a devastating impact on 
American commerce and the American economy. Some comments and questions 
on this bill follow.
    First, the stated intent of this bill is to require every container 
of cargo to be scanned before being loaded onto a vessel bound for the 
U.S., and further that, if the container has not been scanned in the 
foreign port of loading in accordance with the terms of bill, it cannot 
be loaded aboard a vessel bound for the U.S. (ergo, the ``Sail Only if 
Scanned Act'') This would be impossible to implement, at least in the 
time frame and under the terms of this bill, because the equipment, 
systems, operating protocols, and necessary international agreements 
are not in place. If H.R. 4899 were enacted into law and enforced, it 
would bring America's containerized foreign trade to a halt.
    Second, the bill requires that each container be ``scanned'' with 
equipment that meets certain standards, but it does not make it clear 
what ``scan'' means. Does it mean radiation scanning, or does it also 
mean gamma ray or X-ray non-intrusive inspection image scanning (NII)? 
Obviously, it is important to be clear about what is being required. 
These are two different technologies and processes.
    Third, the bill requires that each container be scanned and that a 
copy of the scan be provided to the Secretary, but it does not say who 
is to do the scanning. We believe the bill's authors should clarify 
whether the bill is proposing that the scan be done by the marine 
terminal operator that is loading the vessel, or whether the scanning 
must be performed by foreign governmental authorities at the particular 
port of loading. As the bill provides no funding for the implementation 
of this overseas container scanning requirement, we presume that the 
authors intend the cost of equipment acquisition and system operation 
will be borne by whomever they identify as the parties who are expected 
to perform the scanning task. Clarity on this point is very important.
    Fourth, the bill states containers must be scanned before they are 
loaded onto vessels bound for the U.S., and a copies of the scans must 
be sent to DHS, but it fails to say when the scans must be sent to DHS, 
how they would be sent, or what DHS is expected to do with them when it 
receives them and within what time frame. A scan that is not analyzed 
or acted on is without value.
    Fifth, the bill would require DHS to establish scanning equipment 
technology standards, and then require that every major foreign 
government or marine terminal operator in the world adopt that 
standard, buy, install and operate that equipment, and apply it to all 
of their exports to the U.S. within 12 months.
    Sixth, we don't yet have a technology standard for RFID electronic 
seals, yet the bill proposes changing the emerging e-seal technology 
from RFID to satellite technology.
    Seventh, if the bill became law, it would almost certainly invite 
other countries to establish reciprocal requirements for U.S. exports, 
so that U.S. goods could not be exported, unless the U.S. government or 
U.S terminal operators had scanned the container before vessel loading 
in a U.S. port, used technology that met a foreign government's 
standards, and sent the scan to the foreign government. The bill's 
proponents may wish to consider how would they would feel if the 
Chinese or Japanese or British governments said there can be no U.S. 
exports to their country unless the U.S. installs and operates 
container inspection equipment, which meets Chinese or Japanese or 
British government technology standards, and sends the scan images to 
their government.
    Finally, we have tried to consider the cost of this requirement, 
but it is difficult to assess the cost of complying when it is not 
clear if the ``scan'' is intended to require radiation scanning or both 
radiation scanning and NII imaging analysis, and when the necessary 
equipment and systems simply are not in place to perform the task. 
Someday in the future, if the ``ICIS concept'' is validated and 
implemented, there may be systems in place to provide advance, pre-
vessel loading screening for a large percentage of American 
containerized commerce, but it would be very difficult to ever reach 
100%. At present the systems simply are not in place to do this. To 
estimate costs, one might consider that the average cost of an NII 
container inspection in a U.S. port seems to range from $100 to $125 
per container, with a 1-3 day delay in releasing the cargo. The more 
containers inspected, the higher the congestion, terminal, personnel, 
and operating costs. A linear projection of $125 per container to 11 
million import containers would exceed $1.3 billion, but that 
projection would not even begin to consider the ``chaos'' costs that 
would ensue in port facilities trying to perform such a task, nor would 
it consider the costs of the likely application of this requirement to 
U.S. export containers, nor would it consider the enormous costs of the 
delayed delivery or non-delivery of commerce. Suffice it to say that 
compliance and consequential costs of the bill would be staggering.
    Container inspection technologies, including non-intrusive 
inspection (NII) equipment and radiation screening equipment, clearly 
have an essential and growing role in increasing both the efficiency of 
inspecting containerized cargo shipments and the number of containers 
that can be inspected. Container inspection technology, particularly 
NII equipment, is of substantial interest because, unlike so many other 
technologies, it helps address the container security question of 
paramount importance, namely: ``What's in the box?''
    The Committee's limitation on the length of testimony does not 
allow a fuller description of these issues in this forum, but the 
Committee is invited to review the Council's March 30th testimony 
before the Permanent Subcommittee on Investigations of the Senate 
Committee on Homeland Security and Governmental Affairs for a fuller 
discussion of these important issues, including a discussion of the 
Hong Kong pilot project called the Integrated Container Inspection 
System or ``ICIS concept''.\4\ 
    \4\ That testimony is available on the WSC website at 
    We thank the Committee for the opportunity to present these views.

    Chairman King. Mr. Koch, thank you for the conciseness of 
your testimony.
    I will just remind the other witnesses that the full 
statements will be inserted and made part of the record.
    The chair now recognizes Mr. Jonathan Gold. Mr. Gold?


    Mr. Gold. Thank you, Mr. Chairman, for the opportunity to 
testify today on this important issue. We, as members, share 
this committee's goal of making the movement of cargo to the 
supply chain as safe and as secure as possible. As some of the 
largest users of the system, we have an enormous stake in 
supply chain security and are committed to helping the 
government further enhance security throughout the system.
    While a great deal has been accomplished to improve supply 
chain security since the tragic events of September 11, the 
government and private sector stakeholders must continue to 
work together to improve security.
    We strongly believe that the U.S. can achieve the dual 
objectives of enhanced security and facilitation of legitimate 
global commerce. We urge Congress to avoid measures that have a 
very limited effect on enhancing security while actually 
impeding the flow of legitimate commerce in creating a false 
sense of security.
    Supply chain security is a global issue that cannot be 
addressed unilaterally. The most effective supply chain 
security measures are those that push our borders out, 
assessing vulnerabilities and identifying threats to cargo 
shipments before they reach U.S. ports. Effective supply chain 
security requires a multilayered, unified approach that must be 
international in scope.
    Let me move on to some comments on the bill itself. RILA 
strongly supports the development of a strategic plan for 
supply chain security. We believe that the initial version as 
planned already exists under the National Strategy of Maritime 
Security. Further efforts should improve this plan; in 
particular, the Maritime Incident Response Plan.
    RILA commends the committee for supporting confident 
planning and restoration of trade in the event of a maritime 
security incident.
    The United States is in dire need of a well-coordinated 
response plan to ensure that commerce continues to move 
throughout the supply chain should an incident occur.
    In addition, Congress and the administration need to ensure 
that the various agencies involved in Homeland Security do not 
duplicate ongoing efforts.
    While security concerns may require that certain details 
need to be kept within the government's sphere, RILA believes 
that a central communication point or channel must be 
established so that communications can be streamlined.
    One need to only look at the experience of Hurricane 
Katrina to understand the need to have a well-coordinated 
    CBP receives detailed information about every container 
coming into the U.S. prior to that container being loaded at a 
foreign port to differentiate the true needle in the hay stack 
to the overwhelming percentage of cargo containers that present 
no security risk. Setting arbitrary and mandatory percentages 
of cargo that must be physically inspected would do nothing to 
enhance security and would actually undermine it.
    Better identification of high-risk cargo represents the 
best use of government resources that should be the goal of 
this and any legislation addressing cargo security.
    RILA is committed to improving container screening by 
identifying additional cargo data that can help with the 
identification of high-risk cargo.
    In keeping with increasing security at U.S. ports, RILA 
also endorses the prompt implementation of the Transportation 
Workers Identification Credential.
    Security must be built into the global supply chain from 
origin to delivery, leveraging the best of current and emerging 
technologies. Put simply, there is no technological silver 
bullet for supply chain security. We must be wary of adopting 
technological solutions that merely create a false sense of 
security. Too much is at stake to put our trust behind cosmetic 
feel-good security measures.
    It is important that promising technologies be developed by 
dedicating adequate funds for research and development. 
Congress should outline policies and goals and allow industry 
to work with DHS to find the smartest and most effective way to 
meet those goals rather than being forced in deploying unproven 
    RILA supports efforts to ensure that we have a zero-
tolerance policy for nuclear and radiological materials 
entering our country.
    While it is preferable to have the screening done overseas, 
we will need to have a robust detection regime at our domestic 
ports as well.
    In addition to the deployment of the radiation portal 
monitors at U.S. ports, RILA also encourages DHS and CBP to 
consider other models to help conduct container screening 
overseas. One such model which has received a great deal of 
attention is the ICIS system, which is currently being tested 
at two terminals in Hong Kong.
    While we, along with CBP, believe that this model fits with 
the multilayered approach, a number of issues must be resolved 
before such a system is implemented on a global scale.
    The key to C-TPAT's success is--acknowledgement that there 
is no one-size-fits-all approach to supply chain security. What 
works for one industry, such as retail, may not be well-suited 
for another industry such as chemical.
    RILA opposes any proposal that will limit the ability of 
government and industry to respond to and adapt quickly to 
innovations and other changes related to the security dynamics 
of their specific link in the supply chain.
    We are also concerned that the public-private partnership 
concept at the heart of C-TPAT's effectiveness would by 
compromised by the introduction of required third-party 
    C-TPAT works because it provides incentives to participants 
to engage in active compliance with government security 
    While the focus on today's hearing is on the SAFE Port Act, 
I would be remiss in not commenting about the Sail Only if 
Screened Act of 2006, which was offered as an amendment during 
last week's markup.
    RILA supports 100 percent screening of high-risk 
containers, but a policy requirement of 100 percent scanning of 
all U.S.-bound containers is neither effective as a deterrent 
nor feasible operationally.
    Rather than enhancing security sending an arbitrary number 
of scanning or inspections of the containers will create much 
of the same harm to the nations and world economy that a 
terrorist incident would cause.
    While the bill calls for scanning of all containers for 
radiation and density, again, as Chris has pointed out, these 
terms are very vague. There are also many questions about who 
will be conducting the scanning, when the scanning would occur, 
to whom the scanned images will be sent, and what would be done 
with the images once they are received.
    The bill also includes requirements for a container seal 
that can detect and track whether a container has been tampered 
with after loading. We fully believe the technology to 
accomplish this goal is still being tested and should not be 
mandated at this point in time.
    I thank the committee for the opportunity to testify today 
and welcome any questions.
    [The statement of Mr. Gold follows:]

                  Prepared Statement of Jonathan Gold

    Good morning. Chairman King, Ranking member Thompson and other 
distinguished members of the committee. My name is Jonathan Gold and on 
behalf of the Retail Industry Leaders Association (RILA), I thank you 
for the opportunity to testify at this important hearing regarding the 
Security and Accountability For Every (SAFE) Port Act.
    By way of background, the Retail Industry Leaders Association 
(RILA) is a trade association of the largest and fastest growing 
companies in the retail industry. Its member companies include more 
than 400 retailers, product manufacturers, and service suppliers, which 
together account for more than $1.4 trillion in annual sales. RILA 
members operate more than 100,000 stores, manufacturing facilities and 
distribution centers, have facilities in all 50 states, and provide 
millions of jobs domestically and worldwide.
    I also serve as a member of the Department of Homeland Security's 
Advisory Committee on the Commercial Operations of Customs and Border 
Protection (COAC). Prior to serving on the COAC I participated in 
several of the subcommittees as a technical advisor, including the 
subcommittee working on implementation of the 24-Hour rule, 
implementation of the Maritime Transportation Security Act and the 
Customs-Trade Partnership Against Terrorism (C-TPAT) subcommittee, 
which helped to update the importer criteria last year.
    RILA members share this Committee's, and indeed all Americans, 
common goal of making the global supply chain and the movement of cargo 
through the global supply chain as safe and secure as possible. As the 
largest users in the global maritime supply chain, we have an enormous 
stake in cargo security and are committed to helping the government 
further enhance security throughout the system. While a great deal has 
been accomplished to improve supply chain security since the tragic 
events of September 11, 2001, the government and private sector 
stakeholders must continue to work together to improve security. RILA 
commends the members of this Committee for striving to identify and 
address the vulnerabilities in our maritime supply chain system.
    We strongly believe that security legislation, regulations, and 
public-private partnerships can achieve the dual objectives of 
enhancing security while continuing to facilitate legitimate global 
commerce. We urge Congress to avoid measures that have a very limited 
effect on enhancing security while actually impeding the flow of 
legitimate commerce and creating a false sense of security. A primary 
goal of those who would disrupt the supply chain is to damage the U.S. 
economy by any means possible. If commerce is disrupted in a way that 
damages the ability of Americans to hold well-paying jobs, provide for 
their families, and generate economic growth that helps the entire 
world, either through an attack or ill-conceived regulation of our 
international trading system, then the terrorists will have achieved 
one of their key goals.
    Supply chain security is a global issue that cannot be addressed 
unilaterally. The most effective supply chain security measures are 
those that push our borders out, assessing vulnerabilities and 
identifying threats to cargo shipments before they reach U.S. ports. 
Effective cargo security requires a multi-layered, unified approach 
that must be international in scope. While recent policy debates have 
focused on who owns assets in the supply chain system, nobody should 
dispute that it is better to detect or disarm weapons or contraband 
thousands of miles from our shores than after their arrival in the U.S.
    RILA and its members have played a critical leadership role in 
shaping supply chain security efforts. From requiring new security 
language in contracts with their business partners to testing new 
technologies and ways to identify container tampering, private sector 
stakeholders have been the innovators in securing their supply chains 
to protect their employees, customers and businesses. In considering 
the SAFE Ports Act, we urge Congress to continue to allow the private 
sector, working closely with the Department of Homeland Security and 
other government and non-government interests, to test and deploy the 
systems and technologies that prove most effective. No one has a 
greater interest in security than the private sector companies who 
depend on a secure and efficient supply chain for the safety of their 
employees and customers and efficient operations of their businesses.
    As members of the Committee are aware, a number of regulations and 
initiatives have already been undertaken to protect the U.S. from a 
terrorist attack affecting the supply chain. RILA members have 
supported a number of these initiatives, such as the Customs-Trade 
Partnership Against Terrorism (C-TPAT), the Container Security 
Initiative (CSI), the 24-Hour Rule, the Bioterrorism Act, the Maritime 
Transportation Security Act (MTSA) and the International Ship and Port 
Facility Security Code (ISPS). Targeting different aspects of supply 
chain security, these regulations and initiatives together represent a 
strong foundation upon which the SAFE Ports Act and other initiatives 
must build to enhance our nation's maritime supply chain security.
    On March 9, RILA wrote a letter to every member of Congress 
suggesting some key areas where both Congress and the Department should 
focus on to improve cargo security. These include:
         Improve the Automated Targeting System to ensure 
        Customs and Border Protection (CBP) has the right information 
        to determine whether or not a container poses a risk.
         Ensure CBP has sufficient resources to conduct C-TPAT 
         Work with CBP to improve CSI to conduct more cargo 
        screening abroad, with a special emphasis on the quality of 
        screening for nuclear and radiological material.
         Ensure that all aspects of MTSA are implemented, 
        including the Transportation Worker Identification Credential 
         Further develop business continuation and restoration 
        of trade plans.
    In most respects, the SAFE Ports Act is well aligned with these 
recommendations. For purposes if this written testimony, I would like 
to discuss some of the key sections of the bill and share RILA's 

Section 4--Strategic Plan
    RILA strongly supports the development of a strategic plan for 
cargo security. We believe that an initial version of this plan already 
exists under the National Strategy on Maritime Security. Further 
efforts should seek to improve this plan and its eight supporting 
plans, in particular the Maritime Incident Response Plan.

Section 5 Protocols for the Resumption of Trade
    RILA members commend the Committee for including consideration of 
mechanisms to provide for continuity planning and restoration of trade 
in the event of a maritime security incident. The United States is in 
dire need of a well-coordinated response plan among all levels of 
government to ensure that commerce continues to move throughout the 
supply chain should an incident occur. In addition, Congress and the 
Administration need to ensure that the various agencies involved in 
homeland security do not duplicate ongoing efforts. In short, the 
government, the business community and key stakeholders throughout the 
international trading system must be on the same page and know there is 
a plan in place to respond to an incident of national significance 
occurring as a result of terrorism or national disaster.
    For example, if an incident were to occur in the Port of Los 
Angeles, that port, as well as the Port of Long Beach, might have to be 
shut down during the incident investigation and response. What would 
happen to other ports on the West Coast? Would Seattle/Tacoma remain 
open? Would incoming cargo be able to be diverted to other ports? While 
individual ports have worked on contingency plans for their own 
facilities, have there been discussions among ports geographically 
located near each other as to how they would work together? Will all 
maritime vessels be required to stop where they are or will vessels at 
non-incident ports be allowed to continue to move?
    It is not clear to the business community at this time as to who 
will be making these critical decisions. The trade community needs this 
vital information to plan appropriately. While security concerns may 
require that certain details need to be kept within the government 
sphere, RILA believes that a central communication point or channel 
must be established so that communications can be streamlined. DHS has 
begun to work on this issue with the release of the Maritime Incident 
Response Plan, but more work needs to be done. One needs only to look 
at the experience of Hurricane Katrina to understand the need to have a 
well-coordinated response that ensures commerce will continue to flow 
through our nations' ports in the wake of an incident.
    Likewise, each country has an interest in ensuring that the global 
supply chain is kept safe. A major terrorist incident in the U.S. will 
not impact just one port or one city or even one country. The impact 
will be felt around the globe. Careful planning and cooperation among 
governments is important, and government's active collaboration with 
the private sector is extremely critical. Supply chain security is 
simply too complicated for the public sector to act effectively without 
partnering with private industry.

Section 6--Enhanced High-Risk Targeting Capabilities
    CBP receives detailed information about every single container 
coming into the U.S. prior to that container being loaded at a foreign 
port, and has developed elaborate mechanisms to utilize intelligence 
and other risk factors to differentiate the true ``needle in the 
haystack'' from the overwhelming percentage of cargo containers that 
present no security risk. Again, setting arbitrary and mandatory 
percentages of cargo that must be physically inspected will do nothing 
to enhance security and would be contrary to the mission of the 
effective risk management system DHS already has in place.
    Better identification of high-risk cargo represents the best use of 
government resources and should be the goal of this and any legislation 
addressing cargo container security. RILA is committed to improving 
cargo container screening by identifying additional cargo data that can 
help with the identification of high-risk cargo. DHS should work with 
cargo owners and others who own supply chain information to determine 
what data elements are needed for security risk assessment, who has the 
information, when the information can be submitted, how it will be used 
and, most importantly, how it will be protected.

    Section 8--Verification of Individuals with Access to Secure Areas 
of Seaports
    In keeping with increasing security at U.S. ports, RILA also 
endorses prompt implementation of the Transportation Workers 
Identification Credential (TWIC), a standardized ID containing 
biometric information that vets the identity and background of the 
cardholder. All individuals with access to cargo and secure areas of 
our nation's ports would carry the TWIC, and its potential for use 
extends to workers throughout our nation's critical infrastructure 
systems. We believe that verification of individuals with access to 
secure areas of critical infrastructure and identification of 
individuals with prior criminal records or indications of connections 
with terrorist elements are crucial steps toward strengthening 

Section 10--Container Security Standards and Verification
    Security must be built into the global supply chain from origin to 
delivery, leveraging the best of current and emerging technologies. Yet 
the recent GAO report also underscores the need to keep in mind that 
technology is only one part of the overall solution. Put simply, there 
is no technological ``silver bullet'' for supply chain security. We 
must be wary of adopting technological solutions that merely create a 
false sense of security. Too much is at stake to put our trust behind 
cosmetic, ``feel good'' security measures.
    RILA encourages appropriate testing of all proposed technology 
solutions to determine which have the greatest reliability before being 
adopted by the government and industry. It is important that promising 
technologies be developed by dedicating adequate funds for research and 
development. At the same time, rushing unproven and/or faulty 
technology into supply chain security without thorough implementation 
testing solely for the sake of doing something about security will 
undermine progress made to date, contribute to a false sense of 
security and in the end, prove both costly and ineffective. The fact 
that a certain physical device or screening process may work well in a 
lab or at a particular port does not mean that it can or should be 
expanded to other real-world applications. Congress should outline 
policies and goals and let DHS find the smartest and most effective way 
to meet those goals rather than being forced into deploying unproven 
``gadgets.'' Before any technology can be mandated, DHS must ensure the 
technology's functionality and application as well as work with the 
trade community to determine the most effective methods to deploy them 
in order to achieve maximum results.

Section 11--Nuclear and Radiological Detection Systems
    As DHS works to improve its supply chain security capabilities, 
RILA supports efforts to ensure that we have a ``zero tolerance'' 
policy for nuclear and radiological material entering our country. 
While it is preferable to have that screening done overseas as occurs 
at CSI ports covering the great majority of cargo bound for the U.S., 
so long as we allow smaller ports to ship to the U.S., we will need a 
robust detection regime at our domestic ports as well. Thus it should 
be the highest priority for CBP and DHS to ensure that those ports 
participating in the Container Security Initiative have the most 
effective technology available to detect radiation and that domestic 
ports achieve universal nuclear and radiological detection capability. 
Recent Government Accountability Office reports have identified 
weaknesses in both aspects of the nuclear and radiological detection 
regime, and RILA supports the work of the Domestic Nuclear Detection 
Office to build this most critical layer of our defenses.
    In addition to the deployment of the Radiation Portal Monitors at 
U.S. ports, RILA also encourages DHS and CBP to consider other models 
to help conduct container screening overseas. One such model, which has 
received a great deal of attention, is the Integrated Container 
Inspection System (ICIS), which is currently being tested at two 
terminals in Hong Kong. While we, along with CBP, believe that this 
model fits with the multi-layered approach, there are still many 
questions and operational issues that need to be discussed and resolved 
before such a system is implemented on a global scale. We strongly urge 
DHS and CBP to continue to work with the private sector on ICIS and 
other models to successfully address the operational issues.

Section 13--Customs-Trade Partnership Against Terrorism
    One cornerstone of the public-private, collaborative approach to 
supply chain security supported by RILA is the C-TPAT program, which 
reflects CBP's recognition that it can best provide security through 
close cooperation with the very businesses whose ability to recognize 
potential vulnerabilities in the supply chain is matched only by their 
desire to ensure that the system as a whole--and each component part--
is as robust and secure as possible. The key to C-TPAT's success is the 
program's acknowledgement that there is no ``one size fits all'' 
approach to supply chain security, for individual C-TPAT member's 
supply chain functions, needs and vulnerabilities are not the same. 
What works for one industry, such as retail, may not be well suited for 
another industry, such as chemical.
    While there has been some consideration given to placing C-TPAT 
under a strict regulatory regime, RILA members strongly believe that 
regulating this program will limit the very flexibility that is one of 
the program's greatest assets, and in turn harm the ability of 
government and industry to respond and adapt quickly to innovations and 
other changes related to the security dynamics of their specific link 
in the supply chain. Requiring changes to C-TPAT to go through a full 
regulatory rule-making process would be much slower and less nimble for 
CBP to turn current intelligence or perceived weaknesses into new 
security requirements.
    In addition, the public-private partnership concept at the heart of 
C-TPAT's effectiveness would be compromised by the introduction of 
required ``third party validators'' acting as middlemen between 
government and the business community, adding a potentially cumbersome 
extra layer of communication to a direct, two-party dialogue. With a 
third party attempting to interpret and relay information from business 
to government, the potential for diminishing and delaying the quality 
of information exchanged is clear.
    C-TPAT works because it provides incentives to participants to 
engage in active compliance with government security objectives by, for 
example, providing ATS scoring benefits to companies that meet the 
basic requirements of the program. RILA believes that continuing 
effective operation of the program depends on its ability to offer such 
baseline incentives for participation.
    In addition, while we agree with the tiered approach as outlined by 
the bill and which CBP is currently using, we have concerns with 
Congress specifying what criteria companies must meet to achieve Tier 
Three status, especially the inclusion of language on container 
security devices. We do not believe Congress should mandate such 
devices as they are still being tested and are not yet at 100% overall 
reliability and still have many operations questions that need to be 

``Sail Only if Scanned Act of 2006'' Comments
    While the focus of this hearing is on the SAFE Ports Act, I would 
be remiss in not making some comments about the ``Sail Only if Scanned 
Act of 2006,'' which was offered as an amendment during last week's 
    RILA supports 100% screening of high risk containers, but a policy 
requiring 100% scanning of all U.S. bound containers is neither 
effective as a deterrent nor feasible operationally as a security 
enhancement measure. Rather than enhancing security, setting an 
arbitrary number of scanning or inspections of containers would result 
in commerce grinding to a halt, in effect creating much of the same 
harm to the nations and the world's economy that a terrorist incident 
would cause.
    The legislation as drafted is very vague and confusing. While the 
bill calls for ``scanning'' of all containers for radiation and 
density, this term is not specifically defined. Is this a scan for 
radiological material? Is it a scan using a non-intrusive X-ray? These 
are two very different technologies that have different requirements 
and have different impacts on the movement of legitimate cargo.
    There are also many questions about who would be conducting the 
scanning when the scanning would occur, to whom the scanned images 
would be sent and what would be done with the images. There is also a 
question whether the U.S. can mandate such a requirement on foreign 
terminal operators and foreign governments, which is why CBP has 
negotiated cooperative agreements, such as the Container Security 
Initiative, with foreign countries to allow screening on their soil. In 
addition, if we ask our foreign trading partners to put such a 
requirement in place, we must be prepared to do the same here in the 
U.S. as calls for reciprocity will surely be made.
    In addition, the bill includes requirements for a container seal 
that can detect and track whether a container has been tampered with 
after loading. As discussed above, technology to accomplish this goal 
is still being tested in the harsh real-world environment in which 
international cargo must exist.

    I would like to thank the House Committee on Homeland Security for 
the opportunity to testify today. RILA applauds the initiative of the 
Committee to further enhance supply chain security and congratulates 
Chairman King, Chairman Lungren, Ranking Members Thompson and Sanchez 
and Congresswoman Harman and their staffs for focusing attention on 
these key issues. RILA strongly believes that government, industry and 
other stakeholders need to maintain an ongoing, robust dialogue on how 
best to strengthen port and supply chain security, rather than allowing 
the debate to intensify and recede as dictated by external factors.
    RILA and its members stand ready to continue to work with both 
Congress and the Administration on improving the security of U.S. ports 
and the global supply chain. I look forward to taking your questions.

    Chairman King. Thank you, Mr. Gold.
    Mr. Ervin?


    Mr. Ervin. Thank you very much, Mr. Chairman. If time 
permits, I will talk about the other parts of my prepared 
remarks where I talk about the vulnerabilities and C-TPAT, the 
fact that we have too little radiation detection equipment, and 
the vulnerabilities in the equipment that we have, and then my 
comments about the bill itself. But I would like to confine 
myself largely to comments about the distinction between 
inspection and screening, because I think it is tremendously 
    There are two key statements here. One is that 100 percent 
of cargo is screened, and the other is that 100 percent of all 
high-risk cargo is inspected. Seems to me that the first 
statement is not only wrong, it is also misleading. And the 
second statement is wrong. Let me explain.
    I wonder why the term ``screening'' is used at all, because 
as a number of members suggested, the average person infers, 
when he or she hears the term ``screen,'' that that means 
inspected. We know that that is not the case, but the average 
American does not. Not only is it misleading, it is also 
erroneous as was pointed out by one of the members, a recent 
GAO report. It was just last year. I think it was in the fall 
of last year. The meeting was only a few months ago.
    Our own congressional investigators said that 35 percent of 
cargo is not screened, not targeted, not profiled, whatever 
word you want to use, not assessed to determine whether it is 
high risk or low risk. So that means that the universe, the 
cargo that is being evaluated by CBP, is only two-thirds of the 
cargo that comes into our country. One-third of cargo that 
comes into our country we know nothing about. For all we know, 
some of that cargo could well be high risk, and the 
probabilities are that some of it is.
    With regard to the two-thirds that is assessed, a GAO 
report from just last week on top of--I am sorry, it was a 
report of the Senate Governmental Homeland Security Committee--
in addition to GAO reports and inspector general reports, which 
I presided over when I was the inspector general, have all 
pointed out flaws in the system upon which the targeting 
process is based, the ATS system. Because it is flawed, we 
don't know for sure whether we are making adequate assessments 
of whether a cargo container is high risk or low risk.
    With regard to that that we do determine for whatever 
reason is high risk, the report of the Senate committee just 
last week pointed out, as we have discussed here, that 17.5 
percent of the time, almost a fifth of the time, foreign 
inspectors in this CSI program refused to inspect cargo that we 
deemed to be high risk.
    Now, Secretary Jackson said, well, there is a difference 
between referrals and requests, and indeed there is. But the 
Senate report did not say, we have asked those countries to 
make a determination. They made that determination. That 
determination satisfied us.
    Instead, what the report says is, we requested that an 
inspection be done, and the inspection was not done. Indeed, in 
France, about 60 percent of the time, according to this report, 
when we asked that an inspection be done, the inspection was 
not done.
    My question is: Why do we have a program like this where 
foreign countries are asked to inspect things and they are not, 
in fact, inspected? The whole theory behind it is that the 
borders should be pushed out, as indeed they should be, because 
it might well be too late when a cargo container comes into the 
United States.
    Furthermore, we are told that we should worry about that 
because in those instances where foreign countries refuse to 
inspect cargo that we deem to be high risk and that we say 
should be inspected, it is inspected here. A GAO report from 
last year said that at least 7 percent of the time that high-
risk cargo is not inspected here in the United States as well.
    So these are hugely important issues. What needs to happen 
is the Hong Kong system that we have been talking about here 
today needs to be implemented in the United States. I have not 
heard a single detail about exactly what practical limitations 
there are that prevent the implementation of that system here 
in the United States.
    As was pointed out, exactly the same argument was made 
before 9/11 about the impracticalities and about the impacts 
economically of 100 percent of inspection of passenger baggage, 
and yet, of course, we do that today.
    And furthermore, the secretary has said that the goal is to 
have 100 percent of inspections of cargo once it arrives in the 
United States and before it is dispersed to the rest of the 
country. It is unclear to me why there is a disconnect between 
the goal there and the goal with regard to cargo that comes 
into the country. Failing that, though, we at least need to 
have a better ATS targeting system so, in fact, we do target or 
screen 100 percent of cargo and so that, in fact, the 100 
percent of cargo that we deem to be high risk based upon a 
better ATS system is, in fact, inspected. Neither of those 
things happens now today. At a minimum, they should, in my 
    Thank you very much.
    [The statement of Mr. Ervin follows:]

                 Prepared Statement of Clark Kent Ervin

    Thank you, Chairman King, and Ranking Member Thompson, for inviting 
me to testify this afternoon on a bill, H.R. 4954 (the ``Safe Port 
Act''), designed to enhance maritime and cargo security. This could not 
be a more timely and important topic. If there is any good news to 
emerge from the recently scuttled proposed sale of terminal operations 
at six American seaports to a Dubai-owned company other than the fact 
that the deal was scuttled, it is that it has highlighted just how 
vulnerable our ports already are to terrorist penetration.
    Thanks to the debate over the Dubai deal, more Americans have come 
to learn that only about 6% of the 27,000 or so containers that enter 
our seaports each day are inspected to determine whether they contain 
weapons of mass destruction or other deadly cargo, including terrorists 
themselves. The Department of Homeland Security has consistently 
claimed that we should not be troubled by this low percentage because 
the Customs and Border Protection's ``targeting'' efforts are so 
precise that we can be assured that the 94% of cargo that is not 
inspected is low-risk. However, studies by the DHS Office of Inspector 
General, the Government Accountability Office, and, just last week by 
the Senate Homeland Security and Governmental Affairs' Permanent 
Subcommittee on Investigations have all found the ``ATS'' (for, 
``Automated Targeting System'') used by Customs to distinguish between 
high and low-risk shipments to be flawed.
    The other program that Customs cites to comfort those who rightly 
believe that a 6% inspection rate is far too low is the ``Container 
Security Initiative,'' or ``CSI.'' The theory behind CSI is 
unassailable--if a container with a weapon of mass destruction inside 
is not inspected until it arrives at an American seaport, it might be 
too late. So, through CSI, Customs ``pushes the border out,'' by 
obtaining the agreement of foreign ports to inspect containers bound 
for the U.S. before the ships that carry them set sail.
    The problem, though, is that foreign inspectors often refuse to 
inspect containers that we Americans deem to be high-risk. Less than a 
fifth of the containers that we believe should be inspected abroad--
17.5% to be precise--are in fact inspected by foreign ports. Ports in 
France, for example, refuse to inspect about 60% of cargo we deem to be 
high-risk. Furthermore, because, as noted above, the ATS targeting 
systems is flawed, chances are we should be requesting more inspections 
than the 13% worldwide that we are requesting.
    Another program that Customs disingenuously touts as a cargo 
security measure is the CTPAT or Customs Trade Partnership Against 
Terrorist program. Companies in the global maritime supply chain can 
reduce the chances of their cargo's being inspected by simply 
submitting paperwork to Customs claiming that they have rigorous 
security measures in place, provided they have no history of shipping 
deadly cargo. The problem is that the benefit of a decreased chance of 
inspection is extended before Customs investigators get around to 
verifying that the security measures the companies claim to have in 
place are in fact in place. According to the same Senate subcommittee 
referenced above, less than a third (27%) of the companies in the 
program are validated beforehand.
    Finally, when cargo containers are inspected, there is no assurance 
that any weapons of mass destruction within them will be found because 
there is too little radiation detection equipment deployed here at home 
and abroad at CSI ports, and the equipment that there is does not work 
all that well.
    According to a New York Times account of the work of the referenced 
Senate subcommittee, only about 700 of the planned for 3,000 radiation 
portal monitors have been installed here in this country. At the 
average deployment rate last year of 22 per month, full deployment will 
not occur until 2009 at the earliest. Furthermore, radiation portal 
monitors are imperfect at best. They can detect radiation and pinpoint 
its location within a container, but they cannot distinguish between 
deadly radiation and the innocuous kind that naturally occurs in, say, 
kitty litter, bananas, and ceramics.
    In short, then, our maritime sector is dangerously insecure. All 
experts agree that the likeliest way for terrorists to smuggle a weapon 
of mass destruction into the country would be in a cargo container 
bound for a U.S. port. Needless to say, a terror attack using a weapon 
of mass destruction could exceed the impact of 9/11 by several factors 
of magnitude. So, there is not a moment to waste in enhancing cargo and 
maritime security.
    As for HR 4954, overall, I believe that it is a step in the right 
direction. But, in my judgment, certain provisions should be 
strengthened. For example, with regard to ATS, the Secretary of 
Homeland Security should be required to reduce the time period allowed 
by law for revisions to the cargo manifest, not just invited to 
consider doing so. The fact that the manifest can now be revised for up 
to 60 days after the ship arrives in the United States makes a mockery 
of the manifest as a targeting tool. Further, the manifest can now be 
written in such a vague fashion that it can likewise be rendered 
meaningless. Greater specificity must be required.
    As for the deployment of radiation detection equipment, I believe 
that more than a plan from the Secretary should be required at this 
point, nearly five years after 9/11 and more than three years since the 
creation of the department. The money to do so must be appropriated, of 
course, but I would require the Secretary to deploy an adequate supply 
of radiation detection equipment to every American seaport and every 
foreign port from which cargo bound for the United States sets sail 
within a time certain, but no later than one year from enactment. We 
showed, in the aftermath of 9/11 that we can move at warp speed when we 
have the requisite sense of urgency; though, thankfully five years have 
passed since the last attack, there should be no less of a sense of 
urgency today.
    And, it's not just a matter of deploying equipment. The equipment 
needs to work. The department's Domestic Nuclear Detection Office 
should move with dispatch to develop radiation detection technologies 
that can detect radiation, pinpoint the location of it, distinguish 
between harmless and harmful kinds of radiation, and be in compliance 
with the demands of the American National Standards Institute (which 
none of the radiation detection equipment presently used is).
    As for CSI, countries should be discontinued from the program if 
they consistently refuse to inspect containers that we deem to be high-
risk. As for CTPAT, it should become a ``trust but verify'' program. As 
presently constituted, the bill keeps it at a ``verify but trust'' 
program, by allowing companies to operate under the program for up to 
one year without validation. Only those companies whose security 
programs have been validated as rigorous should be given the benefit of 
a reduced chance of inspection, and the security assessment should be 
updated annually. This will require significantly more resources, 
needless to say, but homeland security cannot be done on the cheap.
    Thank you, again, for inviting me, and I look forward to your 

    Chairman King. Thank you Mr. Ervin.
    Ms. Rooney?


    Ms. Rooney. Chairman King, thank you very much for the 
opportunity to testify this afternoon on the importance of port 
and cargo security. In the interest of making some 
recommendations on how to improve the bill, which we fully 
support, I would like to focus on six key areas: cargo 
security, credentialing, the importance of data, response and 
recovery, research and development, and finally, funding.
    As has been said many times today, our goal should be to 
increase our level of confidence that we know exactly what is 
in each and every container before it has loaded on a ship to 
the United States.
    In the Port of New York and New Jersey alone, we receive 
7,600 containers a day. It is not possible to physically 
inspect each one of those containers here on U.S. shores, but 
rather, we need to continue to push the borders out.
    We strongly support your proposal to establish minimum and 
mandatory cargo security standards. Voluntary cargo security 
measures such as those established under C-TPAT are helpful but 
not sufficient by themselves in order to protect our homeland. 
Rather, all containers destined to the United States should be 
subject to a new and higher security standard. Then and only 
then should importers that choose to go above and beyond the 
minimum standards reap tiered benefits such as those currently 
available through C-TPAT.
    Radiation detection, which has also been talked about quite 
a bit this afternoon, is another line of defense. But doing 
that after the cargo has arrived on our shores should be our 
last line of defense, not our first line of defense.
    We therefore support the development of a strategy for the 
deployment of radiation detection equipment at all U.S. ports 
of entry as well as in foreign ports.
    But there is more to it than just picking the right sensors 
and establishing inspection protocol. Sensor alarming, 
networking, communications and response protocols should all be 
included in the mandated DMDO strategy.
    Additionally, we must not stop at radiation detection but 
also address nonintrusive inspection technology and practices 
for the interdiction of other WMDs such as chemical and 
biological agents.
    With regards to credentialing, we share the concerns of the 
World Shipping Council and RILA with regards to the Section 8 
that calls for a check of all workers against the terrorist 
watch list.
    Our concern is that imposing a new mandate on the 
Department of Homeland Security would shift their focus from 
implementing the TWIC program to another initiative, and since 
we seemed to have gained momentum in the last couple of weeks 
with TWIC, let's encourage them to keep going on that.
    Accurate and reliable data--accurate, reliable, and timely 
shipment data is critical, not only for prevention activities 
such as targeting and inspection, but also for law enforcement 
and emergency response. Once the cargo leaves the U.S. port 
terminal--be it by road, rail or inland barge--the state and 
local law enforcement and emergency response agencies currently 
have zero visibility into the contents of those millions of 
containers that criss-cross our country every year.
    Whether for commercial vehicle inspections on our highways 
and critical bridges or tunnels, or during a road or rail 
accident, this same information can prove beneficial to police 
and emergency response personnel in order to mitigate the 
damage and protect life and property.
    We, therefore, support the idea or encourage the committee 
to consider expanding the secure freight initiative, as the 
secretary has talked about earlier.
    We support the development of joint operation centers in 
key U.S. ports and facilities in order to facilitate 
operational control and information sharing. However, we would 
also recommend two changes here as well.
    First, since the Maritime Ministry does not operate in a 
vacuum but rather is largely dependent on surface 
transportation and requires the involvement of multiple levels 
of government and public safety agencies, we believe that these 
operations center should not be limited to maritime and cargo 
security alone but be brought in to embrace more integrated, 
multi-disciplined regional approach spanning the broader range 
of homeland security functions.
    Secondly, personnel resources are already stretched too 
thin. With technology, people no longer need to be sitting in 
the same room in order to achieve a common objective. We, 
therefore, we request the committee to consider virtual 
connectivity as envisioned in the port authority's on regional 
information joint awareness network as an alternate to a 
physical command center.
    We also need a coherent federal vision on a national 
Homeland Security architecture. Absent such a vision and a set 
of guiding standards, we run the significant risk of local, 
state and federal operations centers that need to work together 
in an emergency not being compatible with one another in 
technology, operational methods or both.
    The SAFE Port Act creates a prioritization for 
reestablishing the flow of commerce in the aftermath of an 
incident. That is just not practical. In addition to the 
practical limitations, we discourage legislating a 
prioritization since, in a large port, a port's ability to 
reestablish the flow of commerce will be incident dependent and 
will be dictated by ongoing response or clean-up activities, 
current threat information, and the availability of critical 
transportation infrastructure and resources such as pilot's 
tugs, rail cars, barges, labor and so forth.
    Local port officials must have maximum flexibility to 
respond to their specific circumstances according to the 
dictates of the immediate situation. In New York and New 
Jersey, we have developed the port recovery plan, which makes 
life safety and public healthy, such as home heating oil in the 
winter, a priority.
    Thereafter, vessels will move on a first-in first-out 
basis, depending on the availability of infrastructure and 
    We have also established a recovery advisory board to 
counsel the captain of port and unified command on a priorities 
requirement and limitations for an effective and efficient 
    With regards to research and development, it is absolutely 
critical that we coordinate all cargo security projects in a 
single office, and we support the creation of a director-of-
cargo-security policy within the policy directorate.
    We would, however, also encourage the development of a 
joint program office and a cargo security working group that 
would include private-sector participation.
    Finally, with regards to port security funding, so far, 
grants have predominantly been allocated to individual projects 
within offense line of marine terminal or of a particular 
vessel. We would encourage that future grants be focused on 
comprehensive port needs as opposed to individual facility 
security needs.
    Our testimony provides further detail on each of these 
initiatives, and we would be happy to answer questions from the 
    [The statement of Ms. Rooney follows:]

                  Prepared Statement of Bethann Rooney

    Chairman King, members of the Committee, thank you for the 
opportunity to testify on ways to improve maritime and port security 
and the proposed SAFE Port Act. I am Bethann Rooney and I am the 
Manager of Port Security at The Port Authority of New York & New 
    The tragic events of September 11th have focused our collective 
attention on the need to protect our borders at major international 
gateways like the Port of New York and New Jersey and small ports 
alike. The Maritime Transportation Security Act of 2002 is landmark 
legislation that has positively impacted our homeland security. 
However, as we all know, more remains to be done. We commend 
Representatives Lungren and Harman and this Committee for introducing 
the SAFE Port Act and a layered approach to enhancing maritime 
security, particularly with regard to supply chains.
    This afternoon I would like to briefly discuss seven key points: 
(1) the vital nature of our ports; (2) cargo security; (3) 
credentialing; (4) the importance of data; (5) response and recovery; 
(6) research and development; and finally, (7) funding.

    Ninety-five percent of the international goods that come into the 
country come in through our nation's 361 ports; twelve percent of that 
volume is handled in the Port of New York and New Jersey alone, the 
third largest port in the country. The Port generates 232,900 jobs and 
$12.6 billion in wages throughout the region. Additionally, the Port 
contributes $2.1 billion to state and local tax revenues and $24.4 
billion to the US Gross National Product. Cargo that is handled in the 
Port is valued at over $132 billion and serves 80 million people, or 
thirty five percent of the entire US population. In 2005, the port 
handled over 5,300 ship calls, 4.792 million twenty-foot equivalent 
units (TEU's), or 2.8 million containers, which is approximately 7,600 
containers each day, 722,411 autos and 85 million tons of general 
cargo. Today, international trade accounts for 30 percent of the US 
economy. Considering all this, it is easy to see how a terrorist 
incident in our nation's ports would have a devastating effect on our 
country and its economy.


Standards and Procedures
    America's consumer-driven market depends upon a very efficient 
logistics chain, of which the nation's ports are just a single link. US 
ports provide the platform to transfer imported goods from ships to our 
national transportation system--primarily trucks and trains--that 
ultimately deliver those products to local retail outlets or raw goods 
to manufacturing plants. Historically, that goods movement system has 
had one overall objective: to move cargo as quickly, reliably and 
cheaply as possible from point to point. Today, a new imperative--
national security--is injecting itself into that system. As such, we 
know that ports themselves are not the lone point of vulnerability. 
Rather, the potential for terrorist activity stretches from the cargo's 
overseas point of origin or place of manufacture to where the cargo is 
stuffed into a container to any point along the cargo's route to its 
ultimate destination.
    Our goal should be to increase our level of confidence that we know 
exactly what is in each container before it is loaded on a ship 
destined for a US port. It is not possible to physically examine the 
contents of each of the 7,600 containers that arrive each day in the 
Port of New York and New Jersey alone without seriously impacting the 
efficiency of the logistics chain. Proposals for 100% physical 
inspection of every container entering the country are well 
intentioned--and wholly impractical. Such a requirement would not 
simply slow commerce down; it would bring it to a halt. The key is to 
find a way of separating high-risk cargoes from the vast majority of 
legitimate containers and then dealing with the exceptions. This 
approach requires a systematic understanding of the logistics chain 
that now moves that container from any place in the world to the 
distribution system in our country.
    A typical container movement includes 14 different nodes, involves 
30 organizations, and generates as many as 30-40 different documents 
with over 200 data elements. This is a complex process in which the 
physical movement of a container is only one major dimension of the 
system. There are three other important components that must also be 
understood: the flow of money, the flow of information and data for 
that shipment, and, finally, the transfer of accountability, all of 
which must occur seamlessly in order for the cargo to be delivered to 
its final destination.
    Today, there are no mandatory security standards when loading a 
container at the manufacturer or when it is consolidated in a 
warehouse, often well inland of a seaport. There are no security 
standards for the seals that are put on containers. Cargo is 
transferred from one mode of conveyance to another and there are 
neither standards for how that is done nor accountability for the 
integrity of the container as it changes hands.
    We believe that efforts must be taken to verify the contents of 
containers before they are even loaded on a ship destined for a US 
port. The process must include certification that the container is free 
of false compartments, was packed in a secure environment and sealed so 
that its contents cannot be tampered with, that there be an ability to 
verify along the route that neither the container nor cargo has been 
tampered with, that it is transported under the control of responsible 
parties, and that the integrity of the information and information 
systems associated with the movement of the cargo has not been 
    We strongly support your proposal to establish minimum and 
mandatory cargo security standards. Voluntary cargo security measures 
such as those established under the Customs-Trade Partnership Against 
Terrorism (C-TPAT) program are helpful but are not sufficient by 
themselves in order to protect our homeland. Rather, all containers 
destined to the United States should be subject to a new and higher 
security standard. Then and only then, should importers that choose to 
go above and beyond the minimum standards reap tiered benefits such as 
those currently available through C-TPAT participation. The incentives 
to go above and beyond the minimum standards would be commensurate with 
the level of investment in and effectiveness of security measures and 
should also generate a number of security and commercial benefits 
including a reduction in cargo loss, fewer Customs exams, an adjustment 
to insurance premiums and bonding requirements and greater cargo 
visibility to support just-in-time inventory pressures.

Weapons of Mass Destruction--Radiation Detection
    Radiation detection is yet another line of defense but radiation 
detection in the United States after cargo has arrived on our shores, 
should be our last line of defense, not our first. We support the 
development of a strategy for the deployment of radiation detection 
equipment at all US ports of entry. However, in addition to deploying 
radiation detection equipment at US ports, similar capabilities must be 
available at Container Security Initiative (CSI) and other foreign 
ports as well.
    The Port Authority has been working with the Department of Homeland 
Security (DHS) since 2003 on a Counter Measures Test Bed (CMTB) program 
to test and evaluate the performance of commercially available and 
advanced radiation detection equipment in real world situations. Our 
efforts have focused on the development of better standard operating 
procedures and an assessment of the impact on the flow of commerce. We 
have learned through the CMTB that it is not just about sensors and 
inspection procedures but also sensor alarming, networking, 
communications and response protocols all of which should also be 
included in the mandated Domestic Nuclear Detection Office (DNDO) 
strategy. Additionally, this legislation should not be limited to 
radiation inspection/detection but must also address non-intrusive 
inspection and sensor / trace detection practices, procedures and 
technology for the interdiction of other Weapons of Mass Destruction, 
especially chemical and biological agents in a shipping container. 
Testing a container and its cargo for chemical or biological 
contamination presents different technological challenges than for a 
passenger passing through an airport security checkpoint. We must 
urgently pursue a solution that is easy to administer by our supply 
chain workforce, is fast, accurate and reliable, and is affordable.

    In 2002, Congress mandated that all transportation system workers 
who are permitted ``unescorted access'' to restricted areas carry a 
Transportation Worker Identification Credential, or TWIC. TWIC is a 
tamper resistant identification card with biometric capabilities that 
can be issued only after a successful criminal history background 
check. TWIC provides the operators of critical infrastructure with the 
ability to positively identify an individual seeking to gain access to 
a secure area. We fully support the need for positive access control at 
port facilities and the creation of a national identification program.
    We have concerns about Section 8 of the SAFE Port Act which 
requires States to submit biographical information on all people 
requiring access to secure areas for comparison to the terrorist watch 
list. This new requirement could divert the Department's much needed 
attention from the creation of TWIC and, as currently drafted, it fails 
to provide port authorities and terminal operators with a methodology 
(i.e. a database and identification cards) to verify that an individual 
has indeed been checked against the watch list. The provisions of 
Section 8, could, if not altered to address the flow of container 
traffic, create major delays at our ports and terminals, thus affecting 
productivity and the economy. We urge the Committee to continue to work 
with the Department of Homeland Security to quickly implement the TWIC 
program nationwide and are encouraged by recent development including 
the release of a Request for Proposals (RFP) and indication that the 
Notice of Proposed Rulemaking (NPRM) can be expected in a matter of 
weeks. Let's keep this new momentum going and not start on something 


Improvements to the Automated Targeting System
    As mentioned earlier, there are close to 200 data elements 
associated with a shipment from origin to destination. This data is 
critical not only for prevention activities such as targeting and 
inspection, but also for law enforcement and emergency response. We 
need to provide Customs and Border Protection (CBP) more complete and 
accurate data earlier in the chain of custody for targeting and 
inspection purposes. We also must be able to provide this data, or a 
subset thereof to other federal state and local law enforcement and 
emergency response agencies.
    The primary information that CBP uses in its Automated Targeting 
System (ATS) is the carrier's bill of lading or manifest which is 
provided to CBP 24 hours before a ship is loaded in a foreign port. The 
carrier's manifest data has limitations and should be supplemented with 
additional commercial data from the US importer or foreign exporter 
before the vessel is loaded in order to strengthen the risk assessment 
process. Today, the more comprehensive cargo entry data is not required 
to be filed until after that cargo has already arrived in the US, often 
at its final destination well inland of our ports--too late to be used 
for screening and inspection purposes.
    The Port Authority was a member of a Customs Commercial Operators 
Advisory Committee (COAC) sub committee last year which recommended 
that importers provide CBP with advance entry data before vessel 
loading. While we understand that DHS and CBP are still considering 
this important change, it has gotten little traction. We support your 
provision to improve the Automated Targeting System and believe that 
this can be accepted by the industry in relatively short order since 
COAC, an industry wide advisory group, has already evaluated it and 
provided specific recommendations. CBP must be provided with both the 
financial and personnel resources for this to be effective; therefore, 
the Committee should authorize sufficient funding for this critical 

Uniform Data for Government-Wide Usage
    In addition to making import and export data available to other 
federal agencies, we encourage the Committee to also include state and 
local law enforcement and emergency response agencies as well. While 
this data is useful to federal agencies for screening and inspection 
purposes, once the cargo leaves the US port terminal, be it by road, 
rail or inland barge, the state and local law enforcement and emergency 
response agencies currently have zero visibility into the contents of 
those millions of containers. Whether for commercial vehicle 
inspections on our highways and critical bridge and tunnel crossings 
such as the Port Authority's own George Washington Bridge and Lincoln 
Tunnel or during a road or rail accident, this same information can 
prove beneficial to police and emergency response personnel in order to 
mitigate damage and protect life and property.

    While much of the focus since 9/11 has rightfully been on 
preventing another terrorist attack; we must develop comprehensive 
programs to address response and recovery as well.

Joint Operations Centers
    One of the principal outcomes of the work of the 9/11 Commission 
was the determination that information sharing and collaboration at all 
levels of government were less than adequate. As such, we support the 
development of joint operations centers in key US ports to facilitate 
operational coordination, information sharing, incident management and 
effective response. However, we do not support the implementation of 
regional or port-wide Joint Operations Centers exclusively for maritime 
and cargo security as currently outlined in the SAFE Port Act. The 
maritime industry does not operate in a vacuum but rather is largely 
dependent on surface transportation (road and rail) and requires the 
involvement of multiple levels of government and public safety 
agencies. Each of these agencies have information networks and 
operations centers of their own that must be staffed and supported 
which are expensive to maintain in both personnel and infrastructure. A 
new port Joint Operations Center would require personnel from agencies 
already stretched to the limit. Theerefore, any new Joint Operations 
Center created through this legislation should not be limited to 
maritime and cargo security alone but be a single focal point and 
provide for the integration of all Homeland Security related functions 
among local, state and Federal agencies in a given region. It must also 
not just be a single center but a coordinating node in a regional and 
national information sharing and collaboration network linked to other 
operations centers.
    Over the last several years, hundreds of millions of dollars in 
Federal Homeland Security funding has been spent to develop and 
implement disparate information sharing networks and joint operations 
centers at the local, state and federal levels without the benefit of a 
coherent federal vision on a national homeland security architecture. 
Absent such a vision and a set of guiding standards, we run the 
significant risk of local, state and federal operations centers that 
need to work together in an emergency not being compatible with one 
another in technology, operational methods or both.
    There are three promising efforts now underway that we recommend 
the committee consider in its deliberations over the Joint Operations 
Center provision of the SAFE Port Act. The first is the National 
Command Capability Working Group, a Joint DHS/DoD program to set 
direction for a national information sharing and collaboration network. 
The second is a program called Joint CONUS Communications Support 
Enterprise (or JCCSE), a joint project of US Northern Command and the 
National Guard Bureau. The third effort is the Regional Information 
Joint Awareness Network or RIJAN. RIJAN is a DHS funded, DoD managed 
and Port Authority led multi-agency project to build an information 
sharing and collaboration network among key operations centers in the 
New York and New Jersey port region. Regional partners include the 
States of New York and New Jersey and the City of New York. DHS 
sponsorship is via the Domestic Nuclear Detection Office (DNDO). Our 
DoD program manager and developer is the US Army's Communication 
Electronics Development and Engineering Command from Fort Monmouth New 
    The Joint Operations Center provision is a very important part of 
the SAFE Port legislation. However we encourage the sponsors and this 
committee to seriously consider modifying this provision to broaden its 
scope and embrace a more integrated, multidiscipline, regional approach 
spanning a broader range of Homeland Security functions and interests 
within port regions. Doing so will help simplify overall Homeland 
Security networking and information sharing by avoiding duplication, it 
will be more efficient in terms of staff and infrastructure, and it 
will go a long way to enabling a DHS vision for a unified approach a 
national information sharing and collaboration architecture. Prior to 
nationwide implementation, we strongly recommend that the SAFE Port Act 
support the funding and development of at least two comprehensive port 
region Joint Operations Center demonstration projects. The Port 
Authority, with a prototype regional communications network already 
established stands ready to partner in such a Joint Operations Center 
test bed program.

Recovery and Economic Impact
    A large-scale terrorist attack at a Port such as ours would not 
only cause local death and destruction, but could paralyze maritime 
commerce and economies nationally and globally. In advance of such an 
event, we must have plans in place to ensure an efficient and effective 
response in order to avoid critical delays in recovery and business 
resumptions. Agencies in the Port of New York and New Jersey know 
better than anywhere else in the country how to respond to suspected 
terrorist activities and catastrophic events. What is not entirely 
clear is how private sector resources could be leveraged to strengthen 
the response, what the economic impact of a protracted port closure 
would be, and how the private sector would be kept informed to 
facilitate critical business decisions as an event unfolds. We must 
collaborate today on developing plans and procedures to ensure a timely 
and effective recovery from an incident at our Ports and to keep the 
private sector informed, many of whom are not physically located in the 
region, as an incident develops and response and recovery takes place.
    Through the Area Maritime Security Committee, the Port of New York 
and New Jersey has developed a draft port recovery plan. We have also 
established a Recovery Advisory Board to counsel the Captain of the 
Port and Unified Command on the priorities, requirements and 
limitations for an effective and efficient recovery. A crucial element 
however, before we can finalize our port recovery plan is the release 
of the Maritime Infrastructure Recovery Plan or MIRP by the Department 
of Homeland Security, one of eight supporting plans of the National 
Strategy for Maritime Security.
    The SAFE Port Act creates a prioritization for reestablishing the 
flow of commerce in the aftermath of an incident. We discourage 
legislating a prioritization since in large part, a ports ability to 
re-establish the flow of commerce will be incident dependent and be 
dictated by on-going response or clean up activities, current threat 
information and the availability of transportation infrastructure and 
resources (pilots, tugs, rail cars, barges, labor, cranes, tankage, 
container storage, etc.). Local port officials must have maximum 
flexibility to respond to their specific circumstances according to the 
dictates of the immediate situation. The recovery plan for New York and 
New Jersey makes life safety and public health, such as home heating 
oil in the winter, a priority; thereafter, vessels will move on a first 
in first out basis depending on the availability of infrastructure and 
    It is not practical to give priority to vessels that have a 
security plan approved by the Coast Guard, are entering the US directly 
from a CSI port, are operated by validated C-TPAT participants, or are 
carrying Green Lane designated cargo. While a vessel may have sailed 
directly from a CSI port, it likely would have called at three or more 
ports on that voyage, some or all of which may not be CSI ports and 
therefore the cargo may not have been physically verified before 
loading. Also, a ship could have upwards of one thousand containers on 
board that are expected to be offloaded in a particular port, only a 
fraction of which might be Green Lane designated cargo. Once loaded on 
a ship, there is no way to segregate or prioritize Green Lane from non 
Green Lane cargo.

    It is absolutely critical to coordinate all cargo security research 
and development efforts through a single office and we support the 
creation of a Director of Cargo Security Policy. [KRT1]Today, cargo 
security projects are being managed by various agencies within DHS as 
well as DOT, DOD and DOE. There are also a number of private sector 
cargo security initiatives that should be monitored by the same central 
office. From our vantage point, there is little coordination and 
collaboration among all these initiatives. As a result, we may be 
expending scarce research resources in duplicative efforts or pursuing 
technologies or devices in one program that have already been shown to 
be ineffectual in others. We risk reinventing the wheel in developing 
solutions already encountered and solved in other efforts. Erecting 
administrative barriers between these programs impedes the free 
exchange of information that could otherwise promote efficiency and 
effectiveness in improving security.
    A positive example can be found in Operation Safe Commerce, a 
government-industry initiative to study maritime supply chain security. 
Along with our sister ports in Seattle-Tacoma and Los Angeles-Long 
Beach, we have participated from the beginning in evaluating various 
approaches to improving supply chain security into our ports. The 
sharing of information and experiences between the ports has been a key 
element in achieving maximum return on our investment in time, money, 
and results. It has ensured we do not duplicate efforts being evaluated 
in the other ports. At the same time, we recognize there are challenges 
common to all of us regardless of the solutions being studied. The 
experience of others has enabled us to quickly resolve certain issues 
while offering our own experience in other areas to our sister ports 
for their benefit. Further promoting the concept that the experiences 
of a few can benefit the many is the presence of an Executive Steering 
Committee to monitor the progress of the study participant and involve 
those government departments and agencies with a stake in this 
important effort. Outside Operation Safe Commerce, however, we have 
virtually no insight to other initiatives with similar objectives such 
as the Smart Box and Advanced Container Security Device programs.
    There is an old saying that ignorance is bliss. In the current 
context, however, ignorance is an obstacle. Improving our national 
security is not a competition between government contestants seeking to 
conceal information in order to gain an advantage over other 
contestants. Rather, those of us involved in these efforts should be 
players on the same team working for the common good. In addition to 
the creation of a Director of Cargo Security Policy, we would encourage 
the development of a Joint Program Office and a cargo security working 
group that includes private sector participation.


Port Security Grant Program
    Clearly there is an on going debate over whether port security is a 
federal government or private sector responsibility. While that debate 
continues, the Port Authority and private terminal operators throughout 
the country have willingly taken significant steps to protect our 
seaports from the new terrorism threat, because the consequences of not 
doing so are grave. Since September 11th, ports such as ours have 
instituted heightened security measures and spent significant amounts 
of money to increase security, both with capital improvements and 
additional security and law enforcement personnel. However, for every 
dollar that is spent on security, there are ten fewer dollars that can 
be spent on the capital infrastructure that is required to accommodate 
the increasing volume of cargo that our ports are expected to handle.
    In an attempt to provide you with a sense of the scope of the 
challenge we face, I offer two possible indicators of local port needs.
    Since June 2002, when the first round of Port Security Grants was 
made available, terminals in the Port of New York and New Jersey have 
applied for over $200 million in Federal assistance. Of the $707 
million that has been appropriated for port security grants across the 
country, a total of $53.7 million, which is just 7.5 percent of the 
total, has been awarded to entities in our Port. The Port Authority 
itself has submitted requests totaling $42 million, but has been 
awarded only $10.5 million, including $2.3 million for technology 
demonstration projects which the Port Authority sponsored on behalf of 
the federal government, or just 25% of the identified need.
    In the Coast Guard rulemaking, it was estimated that the cost for 
port facilities throughout the country to implement the Maritime 
Transportation Security Act (MTSA) over the next decade would be $5.4 
billion. Given the required cost share for federal grants of twenty--
five percent, by the Coast Guard's own estimate, it would require $400 
million a year in federal assistance in order for ports and terminals 
to adhere to the MTSA. Despite this, only $175 million was allocated 
nationwide for port security in FY 2006. That is significantly more 
than was requested in the President's budget, but still far short of 
the need that America's ports have identified.
    While these grants help defray the cost of some physical security 
measures, such as access control, intrusion detection, fencing, 
lighting, identification systems, CCTV and gates, there has also been a 
significant increase in the operational costs associated with maritime 
security as well. It is estimated that the annual operations and 
maintenance costs associated with the new security systems is on the 
order of magnitude of fifteen to twenty percent of the purchase price. 
Additionally, ports and terminals have spent significant sums of money 
on personnel related costs, including the hiring of new security 
officers, overtime, upgrading security forces to use more professional 
services, and for providing extra training. The Port Authority's port 
security operating costs have doubled since 9/11. This does not include 
the extra police that are required at all Port Authority facilities 
every time the threat level increases, which amounts to approximately 
$500,000 per week.
    The vast majority of the $707 M in port security grants has been 
allocated to critical security projects for individual terminals and 
vessels. Since all US port terminals and vessels are now compliant with 
the Maritime Transportation Security Act, we must shift our attention 
from ``my'' security needs to ``our'' security needs. We therefore 
support the provision to make grants available to address 
vulnerabilities identified in the Area Maritime Security Plans (AMSP). 
Further clarification however is needed to define who and what kinds of 
entities can apply for grants on behalf of the port area or region as 
well as well as understanding the parameters around our federal 
partners such as the Coast Guard receiving benefits from projects 
funded through these grants.

    Addressing the issue of port and maritime security is an enormous 
challenge given the complexity of the international transportation 
network. Devising a system that enhances our national security while 
allowing the continued free flow of legitimate cargo through our ports 
will not be solved with a single answer, a single piece of legislation, 
or by a single nation. It will require a comprehensive approach with 
coordination across state lines and among agencies at all levels of 
government as well as the cooperation of the private and public sectors 
and the international community. Importantly, it will require 
additional resources for the agencies charged with this awesome 
responsibility and for the public and private ports and terminals where 
the nation's international commerce takes place.
    I hope my comments today have provided with you some helpful 
insight into this complex matter. We at the Port Authority of New York 
& New Jersey are prepared to offer any additional assistance that you 
may require. Thank you.

    Chairman King. Thank you very much to each of you for your 
testimony. I have a series of questions.
    I have some of Mr. Ervin. I will start with you.
    In your prepared testimony, you talk about the radiation 
portal monitors, and it appears there might be an inconsistency 
in your testimony, but I will let you clarify it. Well, you say 
that they are imperfect at best, then you urge rapid 
deployments of these radiation portal monitors. I guess my 
question would be: If the technology is not as good as you feel 
it should be, why should we rush to deploy them?
    Mr. Ervin. I think what I said, Mr. Chairman, or at least 
what I meant to say is that on the one hand, we are not getting 
these radiation portal monitors into our ports as quickly as we 
should. We are way behind schedule, as GAO has acknowledged, 
but even if we were to do that, the technology is limited at 
best. As I say, radiation portal monitors are good in that they 
can identify radiation, and, unlike these personal radiation 
detectors which can merely detect radiation, RPMs can actually 
pinpoint the location of the radiation inside the container. 
They can isolate, but they cannot distinguish between the 
deadly kind of radiation and the harmless kind. Only radiation 
isotope identifier devices can do that.
    And I have heard no talk about the deployment of those on a 
wide-scale basis in the department. And that said, even that 
last device, RIIDs, all four of these systems--a personal 
radiation devices, the RPMs, the RIIDS, and there is one other 
device as well that is very much like the first one--none of 
these meets the standards of the American National Standards 
    There was a memo that went out last year from the 
applicable office in the Department of Homeland Security that 
said that. So we need this next generation of equipment. We 
need it desperately. And it seems to me that if a sufficient 
amount of money were designated for this purpose, then we could 
redouble our efforts to develop it and to deploy it just as 
quickly as possible.
    Chairman King. There were several points where your 
testimony diverged from Mr. Jackson, certainly on the 17.5 
percent. Let me just ask you, let's assume that everything you 
are saying is true. Is it possible--and what Mr. Jackson is 
saying is true. Are we talking about a difference in 
philosophy? Are we talking about a lack of ability?
    And I don't mean this in an argumentative way. Why do you 
think there is this difference of opinion between you and Mr. 
Jackson? Is it a philosophical difference? Is it something that 
can be addressed? Is it just they are not getting the job done?
    Mr. Ervin. Well, I think it is frankly, that they are not 
getting the job done. I don't think it is the philosophical 
difference. And by the way, sir, these are not my statements. 
Everything that I have said is based on, either, as I say, on 
inspector general report, a report of the GAO, or a report--
    Chairman King. I am assuming, for the purpose of the 
hearing, everything you are saying is true. I am just asking 
why you believe that is true then.
    Mr. Ervin. Well, I don't know other than that my sense is 
the department wants to suggest, frankly, that we are better 
off than we are. I mean, to continue to say that we are 
screening 100 percent of the cargo suggests, as I say, to the 
average person that we are inspecting 100 percent of the cargo. 
In fact, we are not. And we are not even doing what we claim to 
do. Screening simply means, as I say, assessed. We are not 
doing a hundred percent of that. Thirty-five percent of the 
time, we have no assessment whatsoever of this cargo.
    So I think the very beginning thing that the department 
needs to do is to acknowledge what is true and what is not. We 
need to acknowledge that we don't know anything about a third 
of the cargo that comes into the country. We need to 
acknowledge that with regard to the two-thirds that we are 
assessing, 20 percent of it is not being inspected abroad at 
these CSI ports even though we are requesting the foreign 
governments to do that. And it seems to me that we should get 
rid of the CSI program if there is this kind of noncompliance 
    Certainly, in a country like France, which is supposed to 
be an ally of the United States, if 60 percent of the time our 
intelligence analysts tell us that there is something dangerous 
in the cargo, and France, notwithstanding that, refuses to 
inspect it, at a minimum, it seems to me, France should be 
dropped from the CSI program.
    And furthermore, as I say, the good news is supposed to be 
that in those instances where foreign countries don't inspect 
cargo, it is supposed to be inspected here when it gets here, 
never mind that the whole point of CSI is to do it beforehand, 
because it might be too late when it gets to this country. At 
least 7 percent of the time it is not inspected here in the 
United States as well.
    With regard to C-TPAT, which we haven't even talked about 
yet, it seems to me that that program likewise should be done 
away with. If we are giving these benefits before we are 
validating that the companies are actually--that they actually 
have in place the security programs they claim to have in 
place, it is a huge potential for Trojan wars.
    Chairman King. If Mr. Pascrell will indulge me, I would 
like to ask each of the other three panelists if they would 
comment on those observations. And I am not doing this simply 
to provoke a debate. I would be interested in your comments on 
this. I really would be interested in your comments on it.
    Mr. Koch. Mr. Chairman, I don't know where Mr. Ervin's 35 
percent comes from. I am sure there is a basis for it. Our 
carriers carry containers into the U.S., file with the U.S. 
government 24 hours before vessel loading all the data they 
have on every container that is shipped to the U.S. So as far 
as I know, in terms of containerized shipments moving in on 
vessels, it is 100 percent of screening.
    It is important to distinguish between screening and 
inspection, and we do suffer from terminology problems even in 
this hearing today at times on this particular issue. We do 
fully agree that better data would be appropriate to acquire so 
that screening process is a better process. And as we have 
stated in our testimony and over the last several years and 
continue to advocate that.
    As to the question about cooperation in foreign ports, I 
would simply observe there is an easy solution if we are not 
getting cooperation from a foreign customs authority. And that 
is, U.S.Customs can just tell the carrier not to load the box. 
There is no ocean carrier that would not be very happy to abide 
by a request from Customs not to load a container on one of its 
ships coming to the U.S. if the U.S. government thinks that 
there is a security risk significant enough to warrant a do-
not-load vessel. So there is a self-help mechanism that CBP has 
here, and anytime it would like to use it, and our carrier 
members would absolutely implement that, until whatever the 
issue it was that generated that request could be resolved in 
conjunction with the foreign government.
    Ms. Rooney. Mr. Chairman, I think--I am also not familiar 
with that 35 percent number that Mr. Ervin refers to, but I 
would suspect that also it is the non-containerized cargo which 
points to an issue in and of itself. Our programs post-9/11 
have been container centric. They have been focused on the 
containerized trade and there has been little in terms of focus 
on roll-on roll-off cargo and other bulk-type commodities.
    So whatever that 35 percent number comes from, if that is, 
indeed, non-containerized cargo, then we need to move from 
containerized programs and start beginning to focus on non-
containerized cargos as well, because they pose a risk.
    Chairman King. Mr. Gold?
    Mr. Gold. I don't think I have much more to add. I think 
both Chris and Beth both addressed the question very 
appropriately. I think, you know, we need to continue to work 
on improving the CSI program, make sure that container 
screenings and inspections are done when they are requested by 
Customs and Border Protection, and again, focus on making sure 
that we do have the right information to do the targeting in 
advance of the containers being loaded.
    Chairman King. Mr. Ervin, you can comment, and Mr. 
    Mr. Ervin. Thank you very much, sir. This is containerized 
cargo we are talking about. It is non-containerized cargo. And 
I am surprised at my colleagues on the panel have not heard of 
this report upon which my statement is based. It is a GAO 
report from just last year. So I would urge them to read it, 
because it says what I claim it says.
    Chairman King. The gentleman from New Jersey, Mr. Pascrell.
    Mr. Pascrell. I was just handed, Mr. Chairman, the report 
that I think Mr. Ervin is referring to, which came out last 
year in April of 2005, which is you are using your statistics 
from the GAO report. I will enter it into the record.
    Mr. Ervin. Thank you, sir.
    Mr. Pascrell. I would say that we have a little problem 
here. I think we need to pass this legislation right away, but 
if there is a conscious effort to confuse the Congress and 
establish a false sense of security, it wouldn't take too much 
to confuse us, but if that is--Congress must use its oversight 
power, it would seem to me.
    Now I would like your opinion, Mr. Ervin, of what Mr. Gold 
said in his testimony. Mr. Gold said that the Retail Industry 
Leaders Association supports 100 percent screening of high-risk 
containers, of high-risk containers. But a policy requiring 100 
percent scanning of all U.S.-bound containers is neither 
effective as a deterrent nor feasible operationally as a 
security enhancement measure. Would you give me your opinion of 
    Mr. Ervin. Absolutely, sir. First of all, if that is in 
fact what Mr. Gold said, to claim that it is sufficient to have 
100 percent screening of only high-risk cargo, is less than the 
department now touts. Department claims that there is 100 
percent screening of all cargo.
    Mr. Pascrell. Which is not true.
    Mr. Ervin. Which is not true, but at least they claim that 
there is 100 percent screening of all cargo. Mr. Gold is saying 
he supports or the organization supports a 100 percent 
screening of only high-risk cargo that they lower the threshold 
when they are already low, an erroneous threshold, that the 
department has set for itself. That is the first point.
    Secondly, with regard to 100 percent screening is neither 
effective nor a deterrent, well, I don't know how I can respond 
to that, because if there really is 100 percent inspection of 
cargo, it seems to me, that is the only way to inspect it--to 
either physically open it up or to do it in a nonintrusive way, 
that is the only way to determine what the contents are.
    Mr. Pascrell. Well, we--
    Mr. Ervin. So it would be awfully effective if we were to 
do this.
    Mr. Pascrell. If we inspected every container, we would 
send commerce out into the oceans. You understand that. But 
let's not kid ourselves into thinking that we are doing what we 
are saying what we are doing, and I think the GAO report in 
April of last year was very clear about that.
    You know what this reminds me? There is an argument going 
on in the Congress, if I may, Mr. Chairman. There is an 
argument going on in the Congress now about screening or 
examining the eyes of poor children in this country, going 
through examination. And some folks are satisfied with 
screening. We know that so many young kids fall through the 
cracks when that happens. Unless you give a person an 
examination, an eye examination, you are never going to be able 
to detect nor prescribe a remedy. This reminds me so much of 
that. I know it is apples and oranges, but just--it came to my 
    This is serious. Not only is this a surrender to the 
language, there is something more important here than just 
screening and scanning and inspecting and examining. We know 
that game. There is something more hideous here to me, because 
not only do you establish your false sense of security, we are 
not doing what we are saying we are doing.
    Mr. Ervin. That is the point I am making. And just to 
finish, the whole business about it not being feasible 
operationally, we have pointed out that it is happening in Hong 
Kong, which is the busiest port in the world. It, according to 
the experts, can be done in a very, very cost-effective 
fashion. And further, the department says it has a fiscal--
doing 100 percent inspections within 2 or 3 years here in the 
United States with regard to cargo that comes into the United 
States before it goes out elsewhere in the country. At a 
minimum, it seems to me, the department should set the same 
goal and same timetable with regard to cargo that comes into 
the United States.
    Mr. Pascrell. Mr. Chairman, I think your legislation is 
very important, but something, if I may, if you will allow me 
license. More important than legislation, believe it or not, 
there is something more important than legislation, and that is 
that I think that there has been a universal attempt to 
precipitate a conclusion in us in the Congress on the committee 
that things are much more advanced than they really are.
    I didn't get, did you, from the Homeland Security either 
today or in the past, a sense of urgency about this. And I 
believe, Mr. Chairman, we have talked about this in the past, 
the shipment of nuclear weapons, nuclear materials--you have 
spoken to that too--the shipment of nuclear materials is a 
very, very dangerous business. We can't afford to be half right 
nor accept empty conclusions from a department that at times 
vacillates between dysfunction and God knows what. We should 
all be on the same page.
    This is not a party fight here at all. This is, ``we want 
to do the best that we can.'' And I am telling you, I am 
examining all of you, and I know you are all trying to do the 
best in your own areas regardless of where you are. And I am 
familiar with the Port of Authority in New Jersey and the great 
job that you folks do. But I think we need to pay very much 
    You work for Aspen now, right?
    Mr. Ervin. Yes.
    Mr. Pascrell. What title did you have in Homeland Security? 
Inspector general?
    Mr. Ervin. I was the--
    Mr. Pascrell. What did you have to do in that--what does 
that mean, that title? That is another nice title but what does 
it mean?
    Mr. Ervin. The inspector general is in charge of conducting 
inspections, audits and criminal investigations to make sure 
the departments are running as effectively, officially and 
economically as possible.
    Mr. Pascrell. Were you in the department when this was 
provided by the GAO which I enter into the record again, Mr. 
    Mr. Ervin. No, sir, I was not. I left in December of 2004, 
but I am intimately familiar with that report, and I commend it 
to everyone.
    Mr. Pascrell. Okay, we are going to get this around to make 
sure every member has it, because I think it is important, not 
because of what you say or what I say, but these folks, I 
think, provide an objective review.
    Thank you, Mr. Chairman.
    Chairman King. The gentlemen from California?
    Mr. Lungren. Thank you, Mr. Chairman. I just might say our 
friend from New Jersey is too humble, because I doubt that even 
the administration could try and get anything past you.
    Mr. Koch, it appeared to me that you wanted to say 
something just a moment ago, and even though it is out of my 
time, I would love to hear what you have to say.
    Mr. Koch. I would like to clarify a comment that was just 
made about the Hong Kong ICIS project, which is nobody should 
be under the impression that it is inspecting anything. It is 
not an operational system. It was a pilot program that is 
showing technology exists to do a radiation scan and a gamma 
ray scan on a box. Nobody is doing anything with those images. 
What it is showing is that a technology does exist that can 
have application in the future and can be a very valuable tool, 
and it is a very attractive idea, but to say that Hong Kong is 
inspecting a hundred percent of boxes is simply an incorrect 
    And there are a lot of difficult issues that have to be 
addressed when you try to roll this out into an operating 
strategy. The first is: What does a scan mean? Are we talking 
just radiation? Are we talking gamma ray of boxes? They are two 
different technologies.
    And, for example, in the Sail Only If Scanned bill, that 
bill doesn't define what it is that it is talking about. Is it 
talking about radiation scanning, or is it talking about doing 
gamma ray images, or is it talking about doing both?
    The second issue: Who is to do the scanning? We just had a 
debate in the Congress that basically said, Dubai World Ports 
is no longer a trustworthy entity. Is Hutchison Whampoa and 
Dubai Ports going to be asked to do this scanning, or are we 
asking foreign governments to do this scanning abroad? That is 
a very important question. It would have to be addressed if the 
Sail Only If Scanned bill is to be something that is passed.
    And then the real hard issues come. When you have this 
image that the technology will produce or images?okay, the 
questions are: What do you do with this? How is it transmitted 
to the U.S. government, and what do they do with it? When you 
go through an airport and they scan your luggage, it is a 
couple cubic feet of space.
    When you scan a 40-foot container that has 2,700 cubic feet 
of space in it, it takes a trained eye 4 to 6 minutes to look 
at one of those scans with the shipping documents to make an 
assessment of what it is they are looking at. If the 
understanding is that a hundred percent of the boxes are going 
to take this technology, process it, have Customs analyze every 
one of those issues before vessel loading, we are going to 
stack up foreign ports quite a ways, which is why we come back 
to risk assessment.
    We continue to believe that risk assessment is an important 
piece of this, and the tools available to CBP have to improve 
so we have more confidence that we are inspecting the boxes 
that are appropriate to inspect, but we don't think every load 
of Heineken coming into the U.S. needs to go through an 
    Mr. Lungren. It used to go through inspection when it 
wasn't in containers.
    Mr. Koch. Used to get--
    Mr. Lungren. If you recall what?I grew up in a port city, 
and I used to hear the expression, ``10 percent is ours.'' I 
think you know what I am talking about.
    Mr. Ervin, I am intrigued by your comments but somewhat 
confused by your comments. Our bill is an attempt to try and 
build on the foundation we believe has been established by the 
administration to do it the better, more intensely and to bring 
it up to more maturity more quickly. But I am trying to find 
out if you believe that there is anything that has improved the 
security in our ports over the last number of years.
    Mr. Ervin. Well, Congressman, certain things have been 
done, certain. I mean, there are more personal radiation 
detection devices than there were before 9/11. There are more 
radiation portal monitors than there were before 9/11.
    Mr. Lungren. But you have told us that they are imperfect 
at best. They cannot distinguish between deadly radiation, 
innocuous kind that naturally occurs in kitty litter, bananas, 
and ceramics.
    Mr. Ervin. And that is right.
    Mr. Lungren. Well, but my question is, if that is the case, 
what good does it do for us to have more of them out there so 
that we have more false positives?
    Mr. Ervin. Well, sir, it is improvement in the sense that 
we have more stuff than we had in the past, but we don't have 
nearly what we need to have in order to be as safe as we should 
be. So I mean to say it would be inaccurate to say we have done 
nothing since 9/11. If the question is: Have we done nothing 
since 9/11, the answer to that is no. But that is not the 
issue. The issue is: Are we as safe as we can be, and are we 
safe as we claim to be?
    Mr. Lungren. But I am still trying to get this from your 
testimony. You have criticized the effort, because we are too 
slow in putting radiation portal monitors in and yet you have 
said that they don't do much good. That would be like saying 
that we should have more X-rays out there and have more chest 
X-rays, everyone, though they are so vague they are going to 
have a lot of false positives. I just?
    Mr. Ervin. May I just answer--
    Mr. Lungren. Wait a second. Mr. Jackson's approach was that 
because we have--we are on the eve of having better technology, 
he has to balance, in terms of a world in which we don't have 
unlimited funds, between how you go forward with putting those 
portals that we do have now in place versus expanding to have 
them there much faster even though it might be a better 
judgment to have those funds go to the new technology that is 
in the offing if, in fact, it is in the offing.
    Mr. Ervin. Well, sir--
    Mr. Lungren. Is that a responsible position or is it 
totally irresponsible?
    Mr. Ervin. Well, I don't see where the inconsistency is in 
the testimony, frankly, Congressman. What I say on the one hand 
is, we claim to have radiation portal monitors in place and we 
do, but we are not deploying them as fast as we claim to deploy 
them. At the rate that we are going, it will take 3 more years 
to deploy them with the goal that we have. But even if we were 
to that that, I say furthermore, radiation portal monitors are 
imperfect at best.
    That is not inconsistent. It is just to say, we are not 
doing as fast enough what we claim to be. One of the best 
solutions we have right now and it as a solution is not very 
good. That is not inconsistent, it seems to me.
    Mr. Lungren. Can I ask you about the C-TPAT?
    Mr. Ervin. Please.
    Mr. Lungren. You call the Customs Service disingenuous and 
touting it as a cargo security measure. Is that because the 
concept is flawed, or is it because one part of it allows for 
some point scoring to take place if people just sign up and 
send in their plans before they get the verification of that?
    Mr. Ervin. That is the concept, sir. The concept is that a 
company simply signs paperwork claiming that they have rigorous 
security measures in place. And simply because the paperwork is 
submitted, the benefit of reduced inspection is provided before 
any independent validation is done to ensure that the company 
does, in fact, have a program in place. That is disingenuous to 
    Mr. Lungren. So your criticism is of the first part of 
program, not where they go to validation, because according to 
their figures as of the end of last year, they had completed 25 
percent validations and they had 41 percent of the C-TPAT 
participants validations in progress--
    Mr. Ervin. I think the figures--
    Mr. Lungren. --go up to 66 percent.
    Mr. Ervin. Yes. I think the figures, sir, is 27 percent. 
They have validated only 27 percent of the companies in the 
program. It is a simple point and the point is this. In the age 
of terror, should it be sufficient for a company simply to be 
able to say that, ``We have a rigorous security measure in 
place,'' for that company to obtain the benefit of a reduced 
likelihood of inspection? And my answer to that is no. And it 
seems to me there could be no argument about that.
    Mr. Lungren. You would support third-party verification?
    Mr. Ervin. Absolutely.
    Mr. Lungren. Good.
    Mr. Ervin. And furthermore, I would not have the program at 
all if the validation can take place before the benefit is 
provided. I would have validation beforehand. Rather than a 
trust-by-verify program, it is a verify-by-trust program. And 
in the age of terror, we cannot afford that, it seems to me.
    Mr. Lungren. Thank you.
    Chairman King. Gentleman from North Carolina?
    Mr. Etheridge. Thank you, Mr. Chairman.
    Let me thank each of you for being here today. I appreciate 
your comments, and I am going to try to ask concise questions 
and hope you can do the same with answers since the time is 
    And Mr. Koch and Mr. Gold, these questions are for you 
first, please.
    Thus far, most of our conversation has been focused on the 
megaports that we did in western commerce. Would you say that 
this detention has served to improve security conditions at 
these ports?
    Mr. Koch. At the large ports, sir.
    Mr. Etheridge. Yes.
    Mr. Gold. I would agree.
    Mr. Etheridge. You agree? What about smaller ports such as 
those in central South America as well as Africa?
    Mr. Koch. I believe the poorer countries are slower in 
getting up to speed. Certainly, some of the Caribbean ports are 
poor ports. And I know there is a concerted effort to try to do 
capacity building in those places. The Coast Guard's 
international port security program is visiting ports in the 
Caribbean and in Africa to try to assess how they are doing. 
And I think they are trying but they are slower.
    Mr. Gold. I would agree. We were doing business with some 
of those ports. We are also looking at how do we help push 
those ports along working with the carriers and with the 
governments, especially the foreign governments, making sure 
that they do bring their security policies up to par with what 
has been put in place under the ISPS code.
    Mr. Etheridge. Given that answer, in your estimation, which 
areas are the most concern due to local corruption and lack of 
government support?
    Mr. Koch. I don't have a specific answer for that, 
Congressman. I mean, there is--in some parts of the world 
corruption is endemic, including the customs authorities, but I 
don't have a specific answer as to which countries that would 
    Mr. Etheridge. But you deal with it, do you not? Doesn't 
your association deal with it?
    Mr. Koch. Well, yes, there are interactions with those that 
our members have, yes.
    Mr. Etheridge. Mr. Gold?
    Mr. Gold. I don't know that I can answer that specifically. 
Didn't have direct contacts with them so I couldn't answer 
    Mr. Etheridge. It seems to me that if we are talking about 
port security, we are talking about port security. And those 
growing areas where a lot of commerce is coming through and it 
has been redirected, it would seem to me for security issues 
for the United States--because that is what we are talking 
about--seems like that is an area of tremendous vulnerability. 
Would you not agree?
    Mr. Koch. It is certainly a potential vulnerability there, 
and it ought to be something that the government is including 
in their targeting system so that when goods are originating 
from a higher risk part of the world, they get a higher score 
from the Automated Targeting System.
    Mr. Etheridge. Ms. Rooney, let me ask you one very quick--
we talked about the scanners and all the other stuff. And it is 
my understanding your port is now in the process of using some 
of these for detection coming in. Could you briefly give us 
some thoughts on that?
    Ms. Rooney. Yes, sir. We have actually two different sets 
of radiation detection being used in the Port of New York and 
New Jersey now. First, we have the customs deployed radiation 
portal monitors that are now at all of our truck exit gates so 
all of cargo in New York, New Jersey is being scanned for 
radiation accept for that. That is going out by rail.
    Mr. Etheridge. Coming in or going out?
    Ms. Rooney. Coming into the commerce of the United States. 
So all of our import cargo that is going out through our 
terminals into the U.S. We are not scanning our export cargo at 
all at this point. So that accounts for about 88 percent of all 
the cargo in the Port of New York. And New Jersey is scanned 
for radiation.
    The second project that we have going on is through the 
Department of Homeland Security Science and Technology 
directorate with a countermeasure test bed. And reference was 
made earlier to radiation detection equipment that is capable 
of doing the spectrographic analysis initially as opposed to 
waiting for a handheld isotope identifier.
    We are testing that second and third generation equipment 
at our New York container terminals in Howland Hook.
    Mr. Etheridge. Thank you.
    Mr. Ervin, given the questions I have just raised to Mr. 
Gold regarding foreign ports, given your experience in last 
duty assignment, which foreign ports do you think DHS should 
focus on in terms of security?
    Mr. Ervin. Well, I basically agree with what Mr. Koch said, 
that one of the factors, one of the key factors that should be 
considered in assigning risk levels to cargo coming in is the 
history that we have with the country as to whether that 
country has ties to terrorism, whether corruption tends to be a 
factor in those countries.
    Of course, any cargo that originates, frankly, from ports 
in the Middle East or South Asia, because that tends to be the 
center of radical Islam, which is our principal foe nowadays, 
should be cargo about which we are especially vigilant at a 
    As you are suggesting, cargo that emanates from countries 
that have nothing to do with radical terrorism but that 
nevertheless originate from countries that historically have 
had an undue, or if not undue then a rather high incidence of 
corruption likewise should be scrutinized.
    And to be fair, I think that those are among the criteria 
in ATS today.
    Mr. Etheridge. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Chairman King. I have one question, if anybody else has 
some additional questions. In the bill, we talk about funding 
being--an increase in funding coming from dedicated customs 
fees. I have no particular position one way or the other as to 
where the money should come from, but assuming there was a 
problem in the Congress with the customs, how would you feel if 
a dollar amount was put per container? What would the reaction 
be in the industry? What impact would it have?
    I have heard the number of $20 per container. I have no 
idea whether it is 15, 20, 25, 40. Just take a number. If it is 
$20 per container were assessed, what impact would that have on 
    Mr. Koch. Thank you, Chairman King. I think before we talk 
about what user fees should be put into place, the trade issury 
puts billions of dollars into the maritime industry, whether it 
is customs duties or other user fees that are being used. I 
think before we can discuss a $20 user fee or any type of user 
fee, we need to look at the system that is in place and what 
exactly is this going to cost. We can't just generally say, 
well, a $20 user fee out there and that will cover it, because 
we don't know what the exact costs are going to be.
    I have been to Hong Kong. I have seen the ICIS system. In 
talking to people who were running the ICIS system, they said 
$6 to scan those containers.
    We have heard Commander Flynn say 20 and as high as 50. I 
think before we can talk about any kind of user fee, we really 
need to evaluate the system that is in place and determine what 
the actual cost is and whether or not we are already putting 
money into those systems.
    Mr. Chairman, I think there is not a lot of trust in trust 
funds, and for example, on dredging where there is already a 
fee being collected going into a dedicated trust fund, that 
money isn't all used on dredging. It is used for other federal 
purposes. So there is some concern that we not get caught up in 
    If the ICIS project is implemented, those charges will be 
implemented by the foreign terminal operating company to 
recover the cost of their capital investment in that equipment. 
So that would be a private sector fee that would be assessed on 
the cargo to collect that. It wouldn't have to come through a 
    But the final way to answer our question, I think, is that 
the industry, when the issue is raised about an additional 
container fee is always curious about, ``for what?'' And part 
of the problem here has been to really nail down clearly what 
is it the money would be spent on.
    So, for example, where there is some even disagreement 
within the industry on an expanded port security grant program. 
There are many people who really wonder, ``Okay, what is that 
money being used for?'' Terminal operators, carriers, shippers 
are all incurring a lot of costs today to comply with the new 
security reg, so if more money is needed, clarity really should 
be provided. What is that money going to go for, and is it 
really something that the federal government should be paying 
for by virtue of a few recovery mechanisms?
    Chairman King. Mr. Ervin, Ms. Rooney?
    Mr. Ervin. Mr. Chairman, I would be inclined to defer to 
the industry colleagues as to what the impact would be on the 
industry. That said, whatever the figure is, and my sense is, 
based on everything I have read and heard, that the $20 figure 
is likeliest to be the one that would be sufficient here.
    And by the way, the ``it'' that we are talking about is a 
fee to finance the cost of screening 100 percent of cargo of 
radiation. I don't think there is any question about what the 
fee would be used for. I think there is no question?
    Chairman King. Screening or inspecting?
    Mr. Ervin. That kind of points out the issue, doesn't it? I 
mean inspecting. I mean inspecting. But I think the point is 
well taken that trust funds in the past have been misused. I 
would ensure in this instance if we were to go to such a system 
that the funds would be dedicated to this purpose. So that is 
what I would say about that.
    Chairman King. Beth?
    Ms. Rooney. I echo Mr. Koch's comments that we would really 
need to know what that fee would be going for and what 
additional benefits or services are we going to get for it. But 
more important than that, the Maritime Ministry already pays 
billions and billions of dollars' worth of fees to the federal 
government some of which go into trust funds and comes back to 
the Maritime Ministry, most of which does not come back to the 
Maritime Ministry. So I think we should look at first the fees 
of the Maritime Ministry is already paying to the federal 
government and allocating some of those to port security before 
we start collecting new fees, sir.
    Chairman King. Mr. Pascrell?
    Mr. Pascrell. Mr. Chairman, your question, I think, your 
questioning focuses the committee's attention on what is the 
federal government's responsibility. We had a debate about this 
when we talked about the airline industry, if you remember. And 
I know they are different industries. The Maritime Ministry is 
very different. But just exactly what is the government's role 
and responsibility--
    Chairman King. Would the gentlemen yield for just a moment?
    Mr. Pascrell. Yes.
    Chairman King. I am going to have to leave. I have a 
meeting with some--
    Mr. Pascrell. I will be done in--
    Chairman King. No, no. Actually, Chairman Lungren is going 
to take over.
    I just want to thank the witnesses for their testimony. 
There is a meeting that I have to go to. Thank you very much. 
Your testimony has been especially illuminating, and I 
particularly have gotten a lot out of the back and forth. I 
think it has educated all of us.
    And usually, it is just Mr. Pascrell who engages in these 
types of debates. To have a panel doing it even adds to 
the?thank you all very much.
    Mr. Pascrell. We would have had a humdinger if we had five 
panelists, combine the panels, Mr. Chairman. You get dialogue, 
you know. It is not bad in a democracy if we try it out once in 
a while.
    Getting back to my point, this is a supply chain, and in 
that supply chain, there are a lot of second parties. Becomes 
very complex here. You are talking about exporters, freight 
forwarders, whatever they are called, customs brokers, inland 
transportation providers, port operators, and ocean carriers. 
It is a pretty complex situation. We are not just talking 
about--I am interested in--
    Mr. Gold, let me ask you this question, just a curious 
question, you know. Once in awhile I get to thinking. What is 
coming out of China? I am interested, because I have a sense of 
urgency. You should tell me today maybe I shouldn't think of 
things this way, but we all take it seriously what we are doing 
if we don't take ourselves seriously, but we know what our 
responsibilities are. What is coming out of China? All of these 
containers that go all over to the second shift and then third 
shift and they are moved from this vessel to another vessel. Do 
the Chinese inspect everything that comes out of the 
manufacturing, the industry which provides much of the retail 
on our shelves in the United States of America? Do they check 
each of those boxes before they get into a container?
    Mr. Gold. Congressman, I do know that as the boxes travel 
through China, the different Customs administrative authorities 
within China do look at the containers as they are moving 
through the country. I couldn't tell you what the actual amount 
is or what they do with it, but I think we want to focus on 
everywhere in looking at the supply chain security from the 
factory all the way through to the store floor.
    Mr. Pascrell. The only reason why I ask that is so much 
comes out of China that winds up on our ports, and, you know, I 
would hate to think that when we are looking at the GAO report 
and when we are trying to zero in on what are the percentages 
within reason, we know what error is, that a greater proportion 
of that which is not inspected are scanned or screened may come 
from China. I would be concerned about that, wouldn't you, Mr. 
    Mr. Gold. Yes, but I think, you know, we?first of all, I 
want to comment on a comment you made earlier with regards to 
our statement. We fully support the department's policy right 
now 100 percent screening of all the manifests information that 
they receive and following up on that of 100 percent screening 
of the high-risk containers that are determined by the 
Automated Targeting System.
    And again, we do need to bolster that system, looking at 
additional information. And again, that gets back to the 
original part of this looking at the supply chain as a whole, 
whether it is China, Africa or elsewhere. We need to focus on 
everything that we do abroad.
    Mr. Pascrell. So what you are saying is simply we should 
increase or improve the state of the art in screening knowing 
quite well that we can't inspect?
    Mr. Gold. Yes. I think we need to focus both on the 
automated targeting system.
    Mr. Pascrell. You think that is satisfactory? You think 
that is acceptable to the American people? Is it acceptable to 
    Mr. Gold. I think we need to do as much as we can with the 
resources we have available right now.
    Mr. Pascrell. The resources that we have available. We are 
obviously not even spending enough money in terms of 
inspectors, et cetera, et cetera. I mean, we are not putting 
into this. We are not making this a priority. And again, I 
don't sense urgency. Maybe you do. Do you sense urgency on our 
    Mr. Gold. I think there is an urgency on our part as the 
industry. We are trying to do as much as we possibly can. We 
don't want anything more or less in the container than what we 
have ordered from the factory. That is why our members are 
doing as much as they can with their vendors abroad and all 
their business partners.
    Mr. Pascrell. And you think we are doing enough, the 
federal government?
    Mr. Gold. As we have outlined in our testimony, we think 
more needs to be done, whether it is the Automated Targeting 
System, whether it is with C-TPAT, whether it is with business 
continuity planning. We definitely think more needs to be done.
    Mr. Pascrell. If I might just include this. When you are 
talking about--Mr. Gold, when you are talking about more has to 
be done, that is a very nice statement, very lovely statement. 
I use it, you use it. When you are talking about more has to be 
done to prevent nuclear weapons from coming into this country, 
it puts them in a different perspective, doesn't it?
    Mr. Gold. I would agree. That is why again, we need to 
focus on improving the systems we have in place and continue to 
focus on technologies in the future.
    Mr. Pascrell. And we had a report which is a year old. And 
if we go through this report and look through the 
recommendations, brief recommendations, what do you think we 
conclude in the year that we had this report as to where we 
stand right now?
    Mr. Gold. I know that both Assistant Commissioner Ahern and 
Deputy Secretary Jackson have addressed what has been done in 
the year since our report has been concluded. I think Assistant 
Commissioner Ahern addressed last week with clarifying from the 
numbers, and Assistant Secretary Jackson addressed it this 
    Mr. Pascrell. Then I conclude from what you say I shouldn't 
feel so much a sense of urgency.
    Thank you, Mr. Chairman.
    Mr. Lungren. [Presiding.] I thank the gentlemen.
    I am just going to ask a couple of questions. One is, I am 
no advocate for France, but France was suggested as being an 
ally, and in court, we would say that may?we may be assuming 
facts not in evidence.
    But the suggestion with France or some other countries have 
not cooperated with us on the CSI program, France being France, 
what if they turned around and said, ``We will cooperate with 
you as long as you do the same thing in your ports''? What 
would the impact be on us if we were required to do the same 
thing in our ports that we are asking them to do? Ask each of 
you to give a shot on that.
    Mr. Koch. Congressman, I think that is an excellent 
question, and sometimes we lose sight of the fact that 
reciprocity is something we need to think about. As Bethann 
testified to, for example, on radiation scanning, we do 
radiation scanning on what is coming into the country. We don't 
do anything on what is going out of the country. If we had to 
do the same thing going out of the country, we wouldn't be 
prepared to do it anymore than most of the rest of the world is 
prepared to immediately do it.
    So if you impose conditions on trade that are going to be 
so onerous that our trading partners can't comply, they will, 
in fact, reciprocate and put mirror-image-type restrictions up. 
We need to take steps that improve security that makes sense. 
We need to be working with our trading partners. But we have to 
be able to do what we expect others to do as well. And in many 
cases, we aren't there.
    So, for example, on the question of the Chinese inspecting 
the products they are sending out of their country to the U.S., 
our government doesn't inspect the 7 million containers of 
cargo we export out either. So there is this question here. 
Trade is a very voluminous thing right now in this nation. We 
are going to be importing roughly 12 million containers of 
cargo this year. We are going to be exporting probably about 8 
million containers of loaded cargo this year. That is over a 
billion and a half dollars' worth of goods each day going 
through out ports. So we have a constant balance of trying to 
make sure that we don't cripple trade at the same time we come 
up with more intelligence security regimes.
    Mr. Lungren. Anybody else? Mr. Ervin?
    Mr. Ervin. I would like to. Sir, certainly, other 
countries, it seems to me, have the right to demand that we do 
the very same thing that we are demanding of them. If France 
were to turn around and insist that they have the right to make 
sure that any cargo from the United States bound for France 
likewise be inspected and wanted to have the right to install 
French inspectors here to make sure that that gets done, I 
would be entirely for it. It seems to me that is the logical 
implication of what we are asking other countries to do.
    If we don't do that, what we are essentially saying then is 
that CSI is humerical. It is essentially saying that, ``Well, 
you, foreign country, have to really participate in this 
program only if you choose to. And if you choose not to 
participate in the program, you will continue in it in a 
nominal way.'' It has absolutely no integrity whatsoever.
    Mr. Lungren. What did we have before CSI?
    Mr. Ervin. We had nothing, but what I am saying is, with 
CSI, we are not having anything. If countries don't have to 
inspect cargo that we tell them should it be inspected because 
we believe it to be high risk?
    Mr. Lungren. I just asked the panel this question in order 
as you are sitting there. Are we appreciably more secure with 
respect to our ports? And I am talking about what comes in to 
our ports. We could also talk about the port security itself, 
access to it. I am just talking about what comes in to the 
ports given the fact that the whole impetus of this bill is, we 
are not where we need to be, and we need to do a lot more.
    But have we had any appreciable gains in port security from 
the standpoint of cargo coming into the United States since 9/
    Ms. Rooney?
    Ms. Rooney. In my opinion, we are appreciably better than 
we were and more secure than we were on 9/11. At the risk of 
giving Congressman Pascrell some ammunition, there is more that 
needs to be done, sir. But it is all about creating a system of 
systems and a series of layered approaches. It has been said 
before that there is no single silver bullet. Not one of these 
programs is answer in and of itself. We can strength the 
existing programs that we have and develop additional programs, 
many of which are if your bill.
    I personally think that if your bill goes forward with some 
of the changes that we have recommended in our testimony, we 
will be considerably more secure than we are today.
    Mr. Lungren. Mr. Koch?
    Mr. Koch. I would agree. We have made significant progress 
and there is still more to do.
    Mr. Lungren. Mr. Gold?
    Mr. Gold. I completely agree with both Chris and Bethann's 
    Mr. Lungren. Mr. Ervin?
    Mr. Ervin. We have made some progress, Mr. Lungren, but we 
haven't nearly the progress that we should, and I guess the 
main point of my testimony is we haven't made the progress that 
we claim to have made. The programs upon which port maritime 
security are based actually do less than they claim to do for 
the safety and security of the American people.
    Mr. Lungren. Do you think this bill wouldn't make a 
    Mr. Ervin. Yes, sir.
    Mr. Lungren. No, but I mean a significant difference.
    Mr. Ervin. I think it would make a difference, and I 
suggested some further improvements in the bill. So I am a 
supporter of this bill.
    Mr. Lungren. I thank all of our witnesses for your valuable 
testimony--you help us a great deal--and the members for their 
    The members of the committee may have some additional 
questions for you, and I will ask that you respond in writing 
if we get those to you. The hearing record will be held open 
for 10 days.
    We again thank the members of the committee and our 
    And, without objection, the committee stands adjourned.
    [Whereupon, at 5:20 p.m., the committee was adjourned.]