[Senate Hearing 109-197]
[From the U.S. Government Printing Office]



                                                        S. Hrg. 109-197
 
                   NOMINATION OF HON. PHILIP J. PERRY

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                 ON THE

   NOMINATION OF HON. PHILIP J. PERRY TO BE GENERAL COUNSEL OF U.S. 
                    DEPARTMENT OF HOMELAND SECURITY


                               __________

                              MAY 19, 2005

                               __________

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs


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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

           Michael D. Bopp, Staff Director and Chief Counsel
            Jennifer A. Hemingway, Professional Staff Member
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
         Adam R. Sedgewick, Minority Professional Staff Member
                      Trina D. Tyrer, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Collins..............................................     1
    Senator Warner...............................................    12

                                WITNESS
                         Thursday, May 19, 2005

Hon. Philip J. Perry to be General Counsel, U.S. Department of 
  Homeland Security:
    Testimony....................................................     3
    Prepared statement...........................................    15
    Biographical and financial information.......................    17
    Responses to pre-hearing questions...........................    23
    Responses to post-hearing questions..........................    67


                   NOMINATION OF HON. PHILIP J. PERRY

                              ----------                              


                         THURSDAY, MAY 19, 2005

                                       U.S. Senate,
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:35 a.m. in room 
SD-562, Dirksen Senate Office Building, Hon. Susan M. Collins, 
Chairman of the Committee, presiding.
    Present: Senators Collins and Warner.

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Chairman Collins. The Committee will come to order. Good 
morning.
    Mr. Perry. Good morning.
    Chairman Collins. This morning, the Committee will consider 
the nomination of Philip J. Perry to be General Counsel of the 
Department of Homeland Security. This is a vitally important 
position, and Mr. Perry brings impressive credentials to this 
post.
    If confirmed, Mr. Perry will serve as the chief legal 
advisor to the Secretary of the Department of Homeland 
Security. As General Counsel, he and his staff will help to 
ensure that the Department's activities fully comply with all 
legal requirements and that the Department's efforts to secure 
America's safety also protect the civil liberties of the 
American people.
    As the chief legal officer of the Department, the General 
Counsel oversees the legal work in virtually all DHS 
Directorates and component agencies, such as the Secret 
Service, the Coast Guard, Border and Transportation Security, 
Emergency Preparedness and Response, and the Bureau of 
Citizenship and Immigration Services. This is truly a 
formidable charge and a great deal of responsibility.
    Mr. Perry has already demonstrated his commitment to public 
service, having served our Nation for nearly 3 years as General 
Counsel of the Office of Management and Budget.
    In that role, Mr. Perry oversaw White House clearance of 
Federal regulations, addressed significant matters on the 
Justice Department's civil litigation docket, formulated 
Executive Orders, developed and implemented White House policy 
initiatives, and advised the President and the Director of OMB 
on regulatory and budget matters.
    A key part of his job was to mediate interagency disputes. 
I believe that experience will serve him well in his new 
position because, as we all know, the agencies that comprise 
the Department of Homeland Security often have disputes with 
one another.
    Prior to serving at the White House, Mr. Perry was Acting 
Associate Attorney General at the Department of Justice, the 
Department's third-ranking official.
    While at Justice, Mr. Perry oversaw the Department's five 
civil litigation divisions, and had a supervisory role in 
important environmental, civil rights, and antitrust cases.
    In the aftermath of September 11, 2001, Mr. Perry advised 
the Attorney General on legal issues arising from the attacks 
and the war on terrorism, including the 9/11 Victims 
Compensation Fund.
    And, of course, we are very proud of the fact that Mr. 
Perry served this Committee in 1997 during our special 
investigation of campaign finance abuses during the 1996 
presidential election. That was when I first had the 
opportunity to meet Mr. Perry for the first time.
    So, Mr. Perry, we welcome you back to your old Committee 
and we look forward to working with you. As you know, this 
Committee's jurisdiction has been broadened since you worked 
here. It now has responsibility for the Department of Homeland 
Security, so we anticipate working very closely with you.
    I know that Senator Warner is eager to introduce you. I am 
going to proceed and then when the Senator comes, we will break 
and have him introduce you and then resume the questioning.
    Mr. Perry has filed responses to biographical and financial 
questionnaires, answered pre-hearing questions submitted by the 
Committee, and has had his financial statements reviewed by the 
Office of Government Ethics.
    Without objection, this information will be made part of 
the hearing record with the exception of the financial data 
which are on file and available for public inspection in the 
Committee offices.\1\
---------------------------------------------------------------------------
    \1\ The biographical and financial information appears in the 
Appendix on page 17.
---------------------------------------------------------------------------
    I know, Mr. Perry, that you are blessed to have your family 
with you today and what a wonderful family it is indeed.
    At this point, before I proceed to swear you in, I would 
like to give you the opportunity to introduce your family to 
the Committee.
    Mr. Perry. Thank you very much. I appreciate that.
    My wife, Liz, is directly behind me and then our 5-year-old 
Grace beside her, our 7-year-old Elizabeth, and our nearly 11-
year-old Kate is here. We also have a boy at home. He is 10 
months. He is not quite ready for prime time.
    Chairman Collins. Well, girls, we welcome you to this 
hearing today. I know you must be so proud of your dad. He has 
been nominated by the President for a very important position. 
So I am really happy that you have the opportunity to see him 
today. It is really nice to have you here. We also welcome your 
mom.
    When your brother is a little bit older, you can tell him 
how exciting it was to watch your father go through his 
confirmation hearing. Will you remember this day so that you 
can describe it to your brother?
    Mr. Perry. Thank you.
    Chairman Collins. Mr. Perry, all of the nominees that come 
before this Committee are required to give their testimony 
under oath, so we would ask that you please stand and raise 
your right hand.
    Do you swear that the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Perry. I do.
    Chairman Collins. I would now ask you to proceed with any 
remarks that you might have.

 TESTIMONY OF PHILIP J. PERRY,\1\ TO BE GENERAL COUNSEL, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Perry. Well, thank you very much, Chairman Collins. I 
am honored to appear before you today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Perry appears in the Appendix on 
page 15.
      Pre-hearing questionnare of Mr. Perry appears in the Appendix on 
page 23.
      Post-hearing questions for Mr. Perry appears in the Appendix on 
page 67.
---------------------------------------------------------------------------
    I also want to thank Secretary Chertoff and the Members of 
the Committee, and in advance thank Senator Warner who I know 
will be here in a little while.
    I have known the Secretary for nearly 10 years. We are 
partners in the same law firm and we were both working in the 
Department of Justice on September 11. It would be my 
privilege, if confirmed, to work with him and the many 
thousands of other dedicated men and women in the Department to 
preserve an America that is safe, secure, and free.
    I agree with both the President and the Secretary that 
winning the war on terror is the great calling of our 
generation. I know that an effective Department of Homeland 
Security is critical to that effort.
    I had an opportunity first as Acting Associate Attorney 
General and later as General Counsel of OMB to address homeland 
security issues in the aftermath of September 11. I would be 
honored to rejoin the effort now to protect our Nation.
    I also recognize the Department's obligation to preserve 
our freedom, to defend American liberty with courage and 
determination. If confirmed, I would commit myself to 
preserving our civil liberties while pursuing security and to 
helping the Department address important issues of privacy.
    Although the General Counsel is the Department's chief 
legal officer, I believe that the role of General Counsel 
extends beyond merely interpreting and applying the law. The 
General Counsel must also create an effective and efficient 
mechanism for promulgating Department regulations, addressing 
bureaucratic hurdles, and speeding implementation of the 
Department's programs.
    The Office of General Counsel has the ability and the 
obligation to pull separate Department components together to 
address shared problems and to forge Department-wide solutions 
that draw on the authorities and capabilities of each 
component. The office should be a tool for unifying the 
Department and for accomplishing its broad mission.
    I am also committed to developing a close and cooperative 
working relationship with this Committee and with the Congress. 
As you mentioned, I had the privilege of serving as counsel to 
this Committee in 1997, and I think the perspective I gained 
from that service should help me create a constructive and 
cooperative department approach to congressional oversight and 
to the types of issues that sometimes divide us.
    Finally, I would like to thank Joe Whitley who has served 
since 2003 as the first General Counsel of the Department of 
Homeland Security. When he took the job, he found a newly 
minted Department with more than 1,400 lawyers spread out among 
22 separate organizations. He has done admirable work in 
pulling those disparate pieces together and creating a cohesive 
legal organization.
    If confirmed, I hope to build on the foundation he 
established. Although I cannot promise perfection, I promise to 
work tirelessly to help fulfill the Department's mission and to 
serve the Secretary, the President, and the American people.
    I would be very pleased to answer any questions you have.
    Chairman Collins. Thank you very much for your statement.
    You mentioned in your testimony the importance of working 
closely with this Committee. And as I indicated to you, this 
Committee does have new jurisdiction over the Department of 
Homeland Security beyond what we had initially.
    We have, however, had an uneven relationship with the 
Department with regard to the provision of information in 
response to the Committee's request.
    Under what circumstances do you believe the Department of 
Homeland Security may withhold information from Congress when 
it is exercising its oversight functions?
    Mr. Perry. Well, thank you for that question, Chairman 
Collins, because it is an issue I want to address. I have given 
it some considerable degree of thought.
    And aside from the executive privilege issues and similar 
issues, I think we ought to be able to cooperate and have a 
constructive relationship.
    And as I mentioned a moment ago, the fact that I have 
served both with this Committee in its prior life in 1997 and 
served as an Executive Branch General Counsel, I think, gives 
me the perspective on how to accomplish an effective 
relationship between the Committee and the Department, how to 
work together to accomplish the ends that you are seeking to 
accomplish and at the same time address the Executive Branch 
concerns.
    I have worked with your staff before and I think that we 
ought to be able to work many issues out that have previously 
been problems. And I hope to have an opportunity to do that.
    Chairman Collins. It does give me a great deal of comfort 
that you have experienced the difficulties in getting 
information from the Executive Branch as a Member of this 
Committee's staff. And I know that my Chief Counsel and Staff 
Director, Michael Bopp, speaks very highly of you and has 
assured me that you will bring a different perspective.
    Our Committee has been investigating the naturalization of 
suspected terrorists for about a year now. Yet, despite the 
importance of that subject, we have had an exceedingly 
difficult time in being allowed to interview DHS employees who 
worked on one of the particular cases that we are examining as 
a case study.
    Do you believe that a Federal agency may refuse a 
congressional request to interview a Department employee solely 
on the grounds that the employee is, ``a line employee?''
    Mr. Perry. Well, I am not familiar obviously since I have 
not been serving as the General Counsel of DHS with the 
policies DHS employs in that regard.
    I can say that when I served at the Department of Justice, 
I had some basic familiarity with those policies and know that 
they principally relate to making sure that you do not have 
political influence, whether from the White House or from other 
Executive Branch agencies or even from Congress, in an ongoing 
criminal proceeding, whether it is a criminal investigation or 
prosecutorial proceeding.
    I do not know exactly how that policy would translate to 
the Department yet because I have not gone and done a review of 
each of the Department's functions, CBP and ICE and so forth. 
And I think I would need to do a review like that to articulate 
a really clear answer to your question.
    I think, though, calling back to my comments a moment ago, 
I think we can find ways to work through these issues. And 
given the fact that, as you mentioned, Mr. Bopp and I have some 
experience working together in the past, I believe that we can 
find some ways to address these things that are satisfactory 
both to the Committee and serve our needs in the Department.
    Chairman Collins. You know, in many cases, it is a matter 
of just good will and negotiation. A lot of times, the issues 
can be worked out. The information requests can be more 
focused. Individuals can be provided who can give us the 
information we need.
    My point to you is that this has been a lingering concern 
in this Committee, and I hope that you will take a close look 
at it.
    Mr. Perry. I certainly will.
    Chairman Collins. We had another example just yesterday. 
The Committee held a hearing on FEMA's role in responding to 
hurricane damage in Florida last year, at which the DHS Office 
of Inspector General released a report on this issue.
    I mention this to you because at the request of the General 
Counsel of DHS, the Inspector General redacted information 
concerning some important issues. The General Counsel cited 
executive privilege in requesting the redaction of the 
material.
    I know you were not involved at all in this decision, and I 
am not asking your opinion on that or to comment on it 
specifically. Instead, I want to ask you about the larger issue 
which is of great concern to me, that the Department of 
Homeland Security would deny Congress and the public access to 
information ostensively on the basis of executive privilege 
when we have no reason to believe that the standards required 
to invoke privilege, namely invocation by the President 
directly, have been met.
    Therefore, I would like to get a sense from you under what 
circumstances you think that executive privilege should be 
invoked to deny Congress access to the information it seeks.
    Mr. Perry. Well, I think you are right that the executive 
privilege is the President's to invoke and it should not be 
used in a liberal fashion. It should be used in a very careful 
way. And I am obviously not familiar with the individual 
circumstances you are addressing here in the predicate to your 
question.
    I would be very careful about making those types of claims. 
I do not think they should be made often. I think they should 
be made with great care. And as I mentioned a moment ago, 
absent that type of legitimate claim, I think we ought to be 
able to find solutions to many of those types of issues where 
you need documents or testimony or other types of assistance, 
and we have other collateral concerns that we can resolve with 
you.
    Chairman Collins. Speaking of the Inspectors General, that 
is also part of this Committee's jurisdiction, to perform 
oversight on the Inspectors General themselves and the act. We 
work very closely with the Inspectors General of various 
departments. Not every Department and not every General 
Counsel's office welcomes the role of the Inspector General.
    Could you tell us if you are confirmed what you will do as 
DHS's General Counsel to make sure that the Inspector General 
receives the support from the component agencies so that he or 
she can perform the vital functions that Congress expects?
    Mr. Perry. Sure. I have sat down with the Inspector General 
nominee who was actually also the acting Inspector General at 
that time, Mr. Skinner, and had a very nice chat. And I would 
anticipate if confirmed having an open relationship with him 
such that we share information and that I support his efforts.
    To be more specific, it is my view that the Inspector 
General's authority is a very important piece of our tool box 
for managing problems in the Department and it allows you to 
see into different areas of the Department, whether the 
management structure, the Secretary, Deputy Secretary, and some 
of the under secretaries, would not normally have a view.
    So if you fail as leadership in the Department to have a 
close working relationship, a cooperative relationship with the 
Inspector General, you are going to lose one of the tools that 
is necessary for managing the Department.
    So to answer your question specifically, I would have an 
open channel of communication and hopefully a close working 
relationship with the Inspector General.
    Chairman Collins. I am pleased to hear that.
    Mr. Perry, earlier this year, the Committee began oversight 
hearings on the Department. Our goal ultimately is to do a 
reauthorization bill. I have had conversations with Secretary 
Chertoff, and am awaiting the results of his review. I know 
that he has already identified some issues that will require 
changes in the underlying law.
    We heard from experts from the Heritage Foundation, the 
RAND Corporation, the Council on Foreign Relations, and The 
Brookings Institution with differing views on the Department 
and its performance today.
    I think that even the Department's strongest critics would 
concede that the Department has accomplished a great deal since 
it was first operational 2 years ago. I think also, on the 
other hand, that the Department's staunchest defenders would 
concede that there have been some problems.
    How do you plan as General Counsel to address the 
challenges facing the Department? What are some of your 
priorities as you take on this role?
    Mr. Perry. Well, I would certainly follow the Secretary's 
lead on many things. But personally I have three priorities 
that I have identified to date.
    We need to speed up our regulatory review process. We need 
to get regulations out in a prompt way. We need to get the 
process moving that relies on those regulations. And so as an 
initial matter, there are a number of steps I think we could 
take to make that process work better.
    Also it has certainly been in the press recently that we 
need, as a Department, to do a better job of responding to 
Congress generally and specifically to congressional oversight. 
There are reports that we need to be more prompt in delivering. 
We need to respond better to requests for information. We need 
to have more cooperative relationships. So that is item two.
    Item three would be to improve the role of the General 
Counsel's Office in unifying the Department across different 
authorities and different components. Just in terms of serving 
as a consultant to the Department so far, I have already seen a 
couple occasions where an authority in one component could be 
of great use to another component, but the components are not 
speaking and have not begun to understand what could be done 
with their sister components.
    I think the General Counsel's Office is one place where you 
could actually bring those types of unifying activities to bear 
and actually make some progress.
    So those are the three initial thoughts I would have. And 
if confirmed, certainly I would study the office and the 
Department more generally and follow the Secretary's lead.
    Chairman Collins. One of the issues that this Committee is 
focused on is the vulnerability of our Nation's chemical 
facilities. One of our witnesses who formerly worked at the 
White House said that this should be the No. 1 priority of the 
Department, and that there has not been enough done to protect 
chemical facilities.
    Several witnesses testified at the first hearing that we 
had on chemical security that strong Federal legislation was 
needed to ensure security at chemical facilities nationwide. 
The industry has a lot of voluntary codes and it has made some 
great progress in some cases, but those codes are voluntary.
    I want to ask you in your role as General Counsel whether 
you believe that DHS has sufficient statutory authority now to 
regulate the security of chemical facilities.
    Mr. Perry. I don't have a firm conclusion on that yet, but 
I can tell you what I would look at in order to reach a 
conclusion.
    First, of course, there is the U.S. Coast Guard's authority 
under their MTSA which applies to certain plants located near 
waterways.
    Second, there is the Department of Transportation and TSA's 
authority to regulate the transportation by rail or truck or by 
other means which could apply in some circumstances in a way 
that relates to chemical facilities.
    And, third, there is, of course, EPA authority which has 
been in the press off and on to address accidental releases. 
And that might have some role to play in the broader picture, 
too.
    But the fourth thing I think I would need to do is 
understand what progress we have made to date, meaning the 
Department and particularly the infrastructure protection 
people within the Department, to understand where industry has 
gone with the Department's direction and to make sure that if 
you were to proceed with a legislative package or even a 
regulatory package, you would be building on the progress that 
they have already made.
    So those are the steps I would take. And I would have to 
run through those steps and complete that examination before 
reaching a conclusion.
    Chairman Collins. This is an issue of great interest to 
this Committee, so we look forward to working with you on that. 
There are issues involving whether EPA has sufficient 
authority.
    I personally believe that when we are talking about 
security that it is not a function that EPA should be involved 
in but rather is a more appropriate role for the Department of 
Homeland Security that does not ignore the important 
environmental safety role that the EPA places with regard to 
chemical security.
    But we are talking about making these facilities safer from 
a terrorism attack perspective. So we look forward to working 
with you on that.
    Mr. Perry. I would be pleased to.
    Chairman Collins. I now would like to turn to the issue of 
intelligence. As you know, Senator Lieberman and I authored an 
intelligence reform bill that makes the most sweeping reforms 
in our intelligence structures in more than 50 years. The 
President signed that into law last December.
    The legislation designates a National Counter-Terrorism 
Center as the primary organization in the Executive Branch for 
analyzing and integrating all intelligence concerning counter-
terrorism. As we all know, the 9/11 Commission identified 
several serious communication gaps. The concept behind the 
center is to bring together the expertise of 15 agencies to 
work together to make sure that information is pooled and 
expertise is shared.
    How will you ensure that the Department provides the 
necessary intelligence and otherwise works to ensure that the 
National Counter-Terrorism Center fulfills its mandate under 
the Intelligence Reform Act?
    Mr. Perry. It is a fascinating topic. And I know the 
Secretary has been very clear with the Department so far that 
he is going to require strict adherence with his policy of 
cooperation with the DNI. He has been crystal clear on that. 
And part of my role would be to assist him in that effort.
    I will note also that DHS is an interesting entity because 
it is a source, many of the components are sources of 
intelligence that are important, that as a member of the 
intelligence community, we have to make sure we can share with 
the intelligence community. And, of course, those include the 
Coast Guard and CBP, ICE, TSA, Secret Service, and CIS.
    So there is a critical role to play for the Department in 
any intelligence effort. But I think it is critical to make 
sure that we obey the Secretary's dictate and cooperate with 
the DNI.
    Chairman Collins. There has also been a lack of clarity 
about the role of the Information Analysis Office within the 
Department and how it relates as far as information sharing 
with the FBI, with State, local, and tribal governments.
    How do you articulate the roles, missions, and authorities 
of the Information Analysis Office regarding other intelligence 
offices within DHS and across the Executive Branch?
    Mr. Perry. Well, there are two pieces, I think, to my 
answer. First, it is clear in the Homeland Security Act that 
the Secretary, and, therefore I, have the opportunity and the 
power to gather information from other entities within the 
government.
    Now, focusing specifically within the Department, I think I 
ought to have a coordinating role among all the entities we 
mentioned a moment ago, Coast Guard, CBP, ICE, TSA, Secret 
Service, and CIS, to produce a product for the intelligence 
community generally, and for the DNI, that is helpful.
    Chairman Collins. As we seek to expand information and 
intelligence gathering across the Federal Government, we must 
do so in a way that is ever mindful of civil liberties and 
privacy.
    I was very pleased to see the answer to your written 
questions in which you indicated that vigilance in protecting 
Americans' fundamental liberties and privacy is a critical 
piece of the Department's mission.
    In that regard, I want to bring to your attention that the 
intelligence bill set up a new Civil Liberties and Privacy 
Board, and we are having some difficulty in seeing that board 
get underway, get funded appropriately. The President has yet 
to appoint the chairman or vice chairman of that board.
    How do you see the Department interacting with the new 
Civil Liberties and Privacy Board?
    Mr. Perry. Well, I am certainly not privy to how the White 
House is addressing that now, and I know that they are working 
on it. I am just not sure where it is in the process.
    I have had some, I think, very productive conversations 
with Nuala O'Connor Kelly who is the privacy officer within the 
Department. And I think based on my understanding of how she 
has operated in her role, that may be a model for how the 
privacy operations generally across the government may work.
    I would like to seek her counsel on how to deal with the 
board. I think she has got terrific expertise and knowledge in 
the privacy area. And so the first stop I would make if 
confirmed to address issues that come before the board is to 
talk to her.
    Chairman Collins. I hope you will work closely because, for 
example, as the Department develops its passenger screening 
programs more, if you have the input from a civil liberties 
privacy perspective, I think it will save a lot of problems 
down the line.
    I would now like to turn to two issues that are of 
particular importance to the State of Maine.
    Last month the Department of Homeland Security announced 
plans to implement the Western Hemisphere Travel Initiative 
that requires DHS in consultation with the State Department to 
implement a plan requiring U.S. citizens and aliens to present 
a passport or document sufficient to denote citizenship and 
identity for travel into the United States from western 
hemisphere countries.
    In developing this plan, it is absolutely critical that the 
Department strike the right balance. I am from northern Maine 
originally, so I know firsthand what this entails. Every single 
day in border communities in Maine, people cross over to Canada 
to shop, to work, and to visit families.
    We even have situations in some parts of Maine where the 
Americans' houses are on obviously our side of the border, but 
all the services from hospitals to churches to grocery stores 
are on the Canadian side of the border.
    I have a Canadian sister-in-law whose family still lives in 
Canada, and she takes her four children frequently to visit her 
mother.
    Since September 11, those ordinary daily back and forth 
exchanges have become far more complicated for people living in 
border communities. There is a lot of concern that the 
Department is going to require passports for people who travel 
every day back and forth.
    We have Canadian nurses, for example, who work on the 
American side in a Maine hospital who every single workday are 
crossing the border.
    To address those concerns, I was very careful to include in 
the Intelligence Reform and Terrorism Prevention Act provisions 
directing the Department to take into account the interests and 
concerns of people living in border communities and also to 
expedite the travel of frequent travelers.
    The Secretary has been given clear authority to develop 
procedures for alternatives to passports. Yet, the initial 
indications that we are getting from the Department suggest 
that very few documents would be deemed acceptable in lieu of a 
passport.
    As you work toward implementation of this, I am going to 
ask you to keep in mind the practical realities and that we do 
not want to impede the legitimate flow of legitimate people and 
commerce by imposing a system that is going to be burdensome 
and costly.
    Would you comment on that?
    Mr. Perry. Sure. I have not been involved in this to date, 
but I understand your point that we need to be sensitive to the 
needs of the cross-border communities. And that is indeed what 
I think the Department will have to do through its notice and 
comment process, through its consultations, and through all the 
other activities that it undertakes to evaluate what ought to 
be the alternative forms of identification to a passport that 
can be used.
    I would commit to spending any time necessary to look at 
this issue if I am confirmed.
    Chairman Collins. Thank you. I do want to work closely to 
come up with a practical solution, and I may drag you to 
northern Maine and show you the realities if we cannot come up 
with a good system. It is a lovely place to visit I hasten to 
say.
    Mr. Perry. I would be pleased to do that.
    Chairman Collins. The second issue that is of great concern 
to my State involves the manufactured housing industry. The 
North American Free Trade Agreement, NAFTA, permits Canadian 
transportation operators to enter the United States as B-1 
visitors in order to transport and deliver what is known as 
international cargo such as manufactured or modular homes.
    These workers are also permitted under Department policy to 
take part in activities that are necessary incidents in the 
term of this delivery. However, they are not supposed to be 
performing building and construction work while they are in the 
United States.
    Now, what I am being told by the Maine manufacturing home 
industry is that some Canadian workers are routinely given the 
permit to enter as B-1 visitors, but then they are engaging in 
activities that really cross the line and are not really a 
function of delivery. They, in fact, qualify as construction.
    That violates our immigration laws. It is unfair to workers 
in Maine. And it places them in direct competition with 
American workers.
    My office has met with CBP officials many times about it. 
We have brought together industry representatives, and as a 
result, the agency has agreed to review its policy.
    But this is an issue that I would again ask you to monitor 
and to seek to clarify the scope of permissible activity for 
Canadian workers who are coming in for this purpose.
    Mr. Perry. I will.
    Chairman Collins. Thank you. Mr. Perry, I appreciate very 
much your being here today.
    There will be some additional questions for the record from 
other Members of the Committee. And without objection, the 
record will be kept open until 5 p.m. today for the submission 
of any additional materials.
    Let me conclude this hearing by thanking you for your 
willingness to once again step forward and serve your country. 
I have a great deal of admiration for people who make 
sacrifices and give up lucrative private sector work in order 
to serve their country.
    As you said at the very beginning of your statement, there 
is no greater challenge that our country faces than the war on 
terrorism and strengthening the security of our homeland.
    So I very much appreciate your willingness to once again 
step forward and serve, and I personally look forward to 
working very closely with you.
    Mr. Perry. Well, thank you very much. I am honored to be 
nominated by the President. I am honored to appear before you. 
I would be honored to work with you.
    Chairman Collins. And, fortunately, Senator Warner has just 
arrived right at the moment.
    So, Senator Warner, we are very pleased to have you here. I 
told Mr. Perry that your endorsement carries great weight with 
this Chairman and with this Committee and we very much 
appreciate it.
    Senator Warner. Well, maybe we better stop while we are 
ahead. [Laughter.]
    But this is a pleasure for me. Sorry to be a little late, 
but I think you changed your time and one thing and another.
    Chairman Collins. I do not believe so, but we are happy to 
have you here.

              OPENING STATEMENT OF SENATOR WARNER

    Senator Warner. Again, Madam Chairman, this wonderful 
nominee has already served as General Counsel to the Office of 
Management and Budget and in numerous positions at the 
Department of Justice, including Principal Associate Attorney 
General.
    Professional experience also includes service in the 
Executive Office of the President, as an attorney in private 
practice, and even time as counsel to this Committee. So he is 
a member of the Senate family and that is very important.
    All of these roles have prepared him very well for the 
significant new challenge ahead providing an understanding of 
both the Executive Branch and the Legislative Branch.
    The post-September 11 world has changed the way the Federal 
Government works. Mr. Perry's role both at the Department of 
Justice and OMB were both during the new period of homeland 
security we know so well.
    I recently spent some time with Phil and we spoke about the 
difficulty of continuing to advance the missions of the DHS at 
a time when there will be some growing pains, particularly 
under the new management.
    So I applaud his willingness and applaud the President for 
the nomination. I applaud his family most of all because we 
know the heavy burdens of office that he will have in this new 
position.
    So I strongly urge that this Committee endorse him by 
unanimous consent, and send his name to the floor, and let him 
get to work.
                  PREPARED STATEMENT OF SENATOR WARNER
    Thank you, Madam Chairman. One of our greatest responsibilities as 
Members of the U.S. Senate is to provide advice and consent regarding 
the President's nominees for Executive Branch positions. Already this 
year this Committee has seen two wonderful nominees to lead the 
Department of Homeland Security. Today, I have the pleasure to 
introduce the third.
    The role of any agency's Counsel is to provide legal advice and 
counsel to the Secretary in order to further the mission of that 
Department. The nominee must be one with a strong legal background, the 
ability to manage staff and myriad priorities, and ultimately hold the 
agency accountable for responsible government. The challenge at the 
Department of Homeland Security is heightened by the fact that this 
Secretariat is still in its formative stages and the Congress continues 
to mold the laws governing our Nation in the post-September 11 world.
    Today, I have the pleasure to introduce Philip Perry as the 
President's nominee to be the General Counsel of the Department of 
Homeland Security. Today he has with him his family who I would like to 
recognize at this time.
    Wife: Elizabeth Cheney Perry, children: Katherine, 10; Elizabeth, 
7; Grace, 5; and Philip, 9 months.
    He has already served as General Counsel of the Office of 
Management and Budget and in numerous positions at the Department of 
Justice, including Principal Associate Attorney General. His 
professional experience also includes service in the Executive Office 
of the President, as an attorney in private practice, and even time as 
Counsel to this Committee. All of these roles have prepared him well 
for the significant new challenge ahead providing an understanding of 
both the Executive Branch and the Legislative Branch.
    The post-September 11 world has changed the way the Federal 
Government works. Mr. Perry's roles at both the Department of Justice 
and OMB were both during the new paradigm of Homeland Security we now 
know so well. I recently spent some time with Phil and we spoke about 
the difficulty of continuing to advance the mission of DHS in a time 
where there will be some growing pains--New management, a new Congress, 
and the new laws and regulations that go along with those changes. He 
is ready, willing, and able to get to work. I applaud his willingness 
to serve this President, the Secretary of Homeland Security, and the 
American people and urge the Committee to quickly report his nomination 
to the full Senate so that we are able to get him to work.

    Chairman Collins. Thank you. And we very much appreciate 
your taking the time to be here today.
    Senator Warner. Certainly.
    Chairman Collins. I want to thank our witness for appearing 
before us, and I want to thank his family for being here.
    And this hearing is now adjourned.
    Mr. Perry. Thank you.
    [Whereupon, at 10:13 a.m., the Committee was adjourned.]


                            A P P E N D I X

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