[Senate Hearing 109-310]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-310
 
                 NOMINATION OF EDMUND S. ``KIP'' HAWLEY

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                 ON THE

  NOMINATION OF EDMUND S. ``KIP'' HAWLEY TO BE ASSISTANT SECRETARY OF 
   HOMELAND SECURITY FOR THE TRANSPORTATION SECURITY ADMINISTRATION, 
                    DEPARTMENT OF HOMELAND SECURITY


                               __________

                             JULY 18, 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 statement:
                                                                   Page
    Senator Collins..............................................     1
Prepared statement:
    Senator Akaka................................................     9

                                WITNESS
                         Monday, July 18, 2005

Edmund S. ``Kip'' Hawley, to be Assistant Secretary of Homeland 
  Security for the Transportation Security Administration, 
  Department of Homeland Security:
    Testimony....................................................     2
    Prepared statement...........................................    10
    Biographical and financial information.......................    12
    Responses to pre-hearing questions...........................    18
    Responses to additional pre-hearing questions from Senator 
      Lieberman..................................................    67
    Responses to post-hearing questions..........................    71


                 NOMINATION OF EDMUND S. ``KIP'' HAWLEY

                              ----------                              


                         MONDAY, JULY 18, 2005

                                       U.S. Senate,
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:50 p.m., in 
room 562, Dirksen Senate Office Building, Hon. Susan M. 
Collins, Chairman of the Committee, presiding.
    Present: Senator Collins.

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Chairman Collins. The Committee will come to order.
    The Committee will now consider the nomination of Edmund S. 
``Kip'' Hawley to be the Assistant Secretary of Homeland 
Security for the Transportation Security Administration. This 
is a vitally important position, made all the more important by 
the changes he would have to oversee, if confirmed, in 
connection with Secretary Chertoff's Second Stage Review of the 
Department.
    TSA was established by the Aviation and Transportation 
Security Act of 2001. TSA was handed a great challenge under 
extraordinary circumstances.
    Despite progress, however, troubling vulnerabilities 
persist in our aviation and other transportation systems. The 
integrity of airport workers with access to sensitive areas is 
still not assured, and general aviation, which comprises 
approximately 77 percent of all flights into the United States, 
remains largely unprotected.
    In addition, efforts to secure our other modes of 
transportation appear to be lagging. Our Nation's seaports may 
well present our single greatest terrorist vulnerability, and, 
as the attacks last year in Madrid and just 2 weeks ago in 
London demonstrated, railroads and other commuter 
transportation systems are prominent targets. Looming over the 
many specific deficiencies is the lack of a comprehensive 
national transportation security strategy.
    On top of these remaining challenges come the 
recommendations of the Department's Second Stage Review. The 
overall thrust of the recommendations to create a more unified 
and streamlined Department with improved information sharing 
and coordinated strategic planning is commendable. TSA will be 
an integral part of this restructuring.
    In addition to resuming operational responsibility for the 
Federal Air Marshals' Service, TSA would be given the 
responsibility to harden our transportation infrastructure in a 
more aggressive manner.
    Mr. Hawley has a strong background to carry out these vital 
responsibilities. In October 2001, he was appointed by 
Transportation Secretary Mineta to be senior advisor for the 
project team that established TSA. He currently serves on the 
Federal Aviation Administration's Air Traffic Services 
Committee, and has served on the National Commission on 
Intermodal Transportation and the Commercial Space 
Transportation Advisory Committee.
    In the private sector, Mr. Hawley has worked as a supply-
chain technology consultant, as the CEO at a global trade 
management company, and as Vice President for Transportation 
Services at Union Pacific Railroad--clearly an impressive 
background.
    I welcome the nominee to the Committee, and I look forward 
to his testimony.
    I would like to first swear in the witness, as our 
Committee rules require. Please raise your right hand.
    [Witness sworn.]
    Chairman Collins. Mr. Hawley, I believe that you have 
family members present with you today, and I would ask that you 
introduce them to the Committee.
    Mr. Hawley. Thank you, Chairman Collins. My wife, Janet. My 
son, Chris. Our older son, Nick, is working in Charlotte, and 
my sister, Victoria, and her son, Henry, are representing the 
rest of my family watching on the Internet.
    Chairman Collins. We are very pleased to welcome you all to 
the Committee hearing today.
    Mr. Hawley has filed responses to a biographical and 
financial questionnaire, answered pre-hearing questions 
submitted by the Committee, and 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's offices.
    Mr. Hawley, I would ask that you proceed with your 
statement at this time.

   TESTIMONY OF EDMUND S. ``KIP'' HAWLEY,\1\ TO BE ASSISTANT 
        SECRETARY, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Hawley. Thank you, Chairman Collins and distinguished 
Members of the Committee.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hawley appears in the Appendix on 
page 10.
---------------------------------------------------------------------------
    I'm very honored to be here today and thank the Committee 
for your prompt consideration of my nomination. I am also very 
grateful to President Bush for nominating me to this position.
    In the interest of time, I have submitted testimony, and 
I'd like to highlight a few areas where Secretary Chertoff's 
Second Stage Review that was announced last week would apply to 
TSA.
    And first off, it's in the area of direction. I think the 
Secretary has made very clear direction for the Department that 
applies to TSA in terms of making its operations an investment 
related to risk and use that in a disciplined way to help set 
our priorities.
    It also allows the many great people at TSA a chance to 
think anew about the mission of the agency and how we 
accomplish it, and I look forward to working with the many 
people at TSA who have these ideas and are very interested to 
get those out front. And I am very mindful of the fact that TSA 
has outstanding people from the current leadership, as well as 
all the way up and down the chain.
    And I just highlight one area where that's an example, and 
that is I've had the opportunity to talk to employees at all 
levels, and screeners have told me that the injury situation 
that exists at TSA is not only bad from an injury perspective, 
but applies to the security product as well, and that it takes 
people away from active duty and puts pressure on other 
employers, which does make it more difficult for the others to 
do their work.
    So this screener was indicating that by driving down the 
injuries that happen to TSA that can elevate the level of 
security. So it's that kind of thinking that I'd like to think 
at all levels can bring themselves to the front and that based 
on Secretary Chertoff's Second Stage Review, that gives us a 
new framework and architecture to do that.
    And in conclusion, I'd say that I know a lot of words have 
been used, and I'm going to be using only words today, and that 
Secretary Chertoff and the Committee and the Congress are 
looking for results, and, if confirmed, that would be my 
priority.
    And so I thank you, Madam Chairman.
    Chairman Collins. Thank you very much for your statement.
    I want to start my questioning with the standard questions 
that we ask of all nominees.
    First, is there anything you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Mr. Hawley. No.
    Chairman Collins. Second, do you know of anything personal 
or otherwise that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office?
    Mr. Hawley. No.
    Chairman Collins. Third, do you agree without reservation 
to respond to any reasonable summons to appear and testify 
before any duly constituted committee of Congress if you are 
confirmed?
    Mr. Hawley. Yes.
    Chairman Collins. Thank you.
    Mr. Hawley, I want to bring up first an issue that has been 
the subject of a great deal of press lately and has generated a 
great deal of concern in my mind as well as in general on 
Capitol Hill, and it has to do with the contract that TSA 
awarded to NCS Pearson to help set up the Federal Screening 
Workforce.
    Now, first, let me say that I recognize that the deployment 
of the TSA workforce at airports was a considerable 
accomplishment. Congress set a very aggressive deadline. TSA 
met that challenge, and, starting from nothing, and was able to 
recruit 129,000 individuals and deploy a screening workforce at 
429 airports across the country in 40 weeks.
    I am concerned that in the race to the finish line, corners 
clearly were cut. TSA hired the Defense Contract Audit Agency 
(DCAA) to audit the contract with NCS Pearson. At the time of 
the award of the contract, its estimated value was $103.4 
million. At the final settlement, the contractor received $741 
million, an absolutely astronomical increase.
    I don't want to jump to conclusions about that overall 
figure, but DCAA clearly could not verify the reasonableness of 
the costs, nor the payments to the contractor from TSA, and 
reported many cases of what appeared to be highly questionable 
expenditures.
    I am concerned that in our rush to address security needs 
that the appropriate checks and balances are not always in 
place to ensure that the taxpayers' investment is protected. So 
I have two questions for you as a starting point.
    First, since you were at the Department part of the time, 
did you play any role in the NCS Pearson contract and screener 
hiring?
    Mr. Hawley. Sure. The short answer is no. We looked at the 
requirements put in place for the Department of Transportation 
by ATSA, and it was clearly evident that in order to reach the 
goals by the timelines that a lot of people had to be hired in 
a lot of places very quickly. My role at the beginning was 
trying to figure out the sequencing of the various tasks and 
how to line them up so that they would all come together at the 
right time and meet the deadlines with the proper operational 
integrity if you will.
    For the hiring of the screeners, our first priority was to 
get the management team in place so that the Federal security 
directors, i.e., the lead TSA person at the airports were 
really the first hiring priority. But right behind that, when 
those people were in place, the idea was to get started right 
away with the hiring process for the vast majority of the 
people.
    So I worked with what we then called go teams to look at 
those issues and to schedule them, but at the point at which 
they were turned into actual go on the street contract bids 
that went over to the acquisitions area, and I never saw it 
again.
    So I'm familiar with the idea that we needed to hire a lot 
of people very quickly and that a contract was going out that 
subsequently was NCS Pearson. But I was not involved in the 
actual contract in any way.
    However, I'll wait for your second question. Yes, ma'am.
    Chairman Collins. I think you have anticipated it, which is 
what will you do to ensure better contract management by TSA?
    Mr. Hawley. Yes, I think that a lot of the leadership of 
TSA since that time have got a great head start on it, and, as 
Rick Skinner mentioned in the previous hearing, TSA has brought 
up now over 70 acquisition officers and has really got a 
disciplined program for program managers, certified program 
managers, investment review boards, and executive leadership 
review. And from last week's Second Stage Review announcements 
from Secretary Chertoff, it was crystal clear certainly to me 
and I think anybody watching the very high priority he puts on 
acquisition excellence and stewardship of public trust.
    So certainly from the leadership team at DHS, this is a 
critical priority, and it certainly, if confirmed, would be one 
for me as well.
    Chairman Collins. Thank you. In your written responses to 
the Committee's questions, you noted the need to allocate 
resources to the greatest areas of risk within TSA's budget, 
and that is an issue and a theme the Secretary has also 
emphasized.
    Do you believe that we have over-invested in aviation 
security at the expense of other modes of transportation?
    Mr. Hawley. We certainly have invested a great deal in 
aviation. I think that the experience following the London 
attacks shows the excellent work that has been done around the 
country, not dictated by the Federal Government, but undertaken 
by private sector, State and local communities, specifically 
transit agencies, in working originally with Department of 
Transportation and the Federal Transit Administration to do 
risk assessments and start doing contingency planning that over 
the last 3 years, again working with DHS and TSA, that these 
communities across the country did, in fact, have those plans 
in place, and were, in fact, ready for a pretty quick run up 
when word came of the London bombings.
    And the Secretary talked a lot in the Second Stage Review 
about working in partnership, and I think the London experience 
indicates that the Secretary did not slap a Federal requirement 
immediately. I think his assessment was that the local 
communities immediately jumped to a heightened level that was, 
in fact, effective.
    And I note that his--when he raised the alert level from 
yellow to orange was specific to the transit sector. And one of 
the byproducts from that, which maybe hasn't been noticed a 
lot, but I think is highly significant, is that by not making 
everybody rise to the orange level, that then meant in local 
communities and with the Federal and State agencies there were 
resources that became available to offer to transit. So the 
transit not only itself went up to its orange level, but other 
areas had resources that they were then able to supplement 
transit as needed.
    And I'm told that some of the feedback from that experience 
that that was a very positive thing.
    Chairman Collins. That is a good segue into my next 
question for you, which concerns the Secretary's controversial 
comments last week about the value and responsibility of 
aviation security versus mass transit. As you weigh all of the 
responsibilities under you, how are you going to allocate 
resources? What do you see as our greatest risks?
    Mr. Hawley. Well, I look at the job of TSA reflecting what 
the Secretary said last week that there are really three 
things. One is to make sure that the transportation systems in 
the United States are not used to make a catastrophic or an 
attack with catastrophic consequences against the United 
States, and the second would be to make sure that no matter 
what happens in terms of terrorist attack, the transportation 
network of the United States continues to function and to do 
the above two without disrupting unduly the American way of 
life in terms of privacy and efficiency and the economy.
    That would be kind of the guiding light and that the 
Secretary announced also with the threat matrix approach at the 
Department that they're working on, and, if confirmed, I will 
work with the TSA on the ones that are within the 
transportation sector.
    Chairman Collins. How high a priority is it for you to get 
the TWIC card, the Transportation Workers Identification 
Credential, in place? I have to tell you in the hopes of 
biasing your answer that I have been very frustrated about the 
repeated delays in implementing a project that makes all the 
sense of the world and that is not blocked by technology. I 
mean there are some issues where we haven't proceeded because 
the technology hasn't caught up with the concept.
    In this case, the technology is there, but the will to get 
it done seems to have been absent from the Department.
    Mr. Hawley. Very high priority that whole area, and I think 
the Secretary illuminated in the 2SR his thinking in terms of 
using technology across the whole Department to arrive at a 
solution in one area that would apply to others and I think the 
U.S.-VISIT experience of technology and the fact that U.S.-
VISIT is within the Department and has some capability with 
fingerprints. But when you look at secure flight and the 
registered traveler, and the TWIC card, and HAZMAT driver's 
licenses, all of those things have a component of using 
technology information to assure identity and assess risk. And 
that if the Department is able to build a foundation that 
respects privacy and is recognized broadly by the public that 
what DHS is doing in this area is respectful of privacy, that 
then the solutions that maybe are in one area you could use the 
system gains there to solve the other problems. And that I 
think, if confirmed, from my perspective at TSA, being able to 
sort the passengers, if you will, with some estimate of risk, 
to put more focus on the greater risk passengers and less on 
those that do not pose a risk that helps across the board. It 
helps with budget. It helps with security, and certainly the 
TWIC card is an essential element of that issue.
    Chairman Collins. In March of this year, the GAO reported 
that, ``TSA has recognized that Secure Flight has the inherent 
potential to adversely affect the privacy rights of the 
traveling public because of the use of passenger data and has 
begun to take steps to minimize potential impacts on passengers 
and to protect passenger rights during the testing phase. 
However, TSA has not yet clearly defined the privacy impacts of 
Secure Flight in an operational environment or all of the 
actions TSA plans to take to mitigate potential impacts.''
    Given that TSA's Secure Flight program intends to match 
personal identification information collected by air carriers 
against government watch lists, what steps do you plan to 
ensure that privacy concerns are addressed?
    Mr. Hawley. I think that's the first gate that you have to 
pass through really before any others is to make sure that the 
privacy aspects of dealing with data about passengers and 
citizens at large that the privacy protections are in place 
because I think it's obviously demonstrated that if there is a 
problem in that area, it will come out at some point, whether 
at the beginning or right when you're trying to implement a 
program. So you have to have it properly built--the foundation 
built on privacy before working out the rest of the problem.
    So I think my approach to it is don't talk to me about how 
we're going to do it until we know that we have the rules set 
and a good comfort level that the privacy, legitimate privacy 
rights are protected.
    Chairman Collins. Finally, my office has received 
complaints from travelers who have faced very severe penalties, 
financial penalties, for inadvertently carrying prohibited 
items to a screening checkpoint. Now, we all understand the 
importance of the screening process. But in some cases, my 
constituents have been faced with fines totaling thousands of 
dollars for carrying something that they clearly shouldn't 
have. It may have been a toy. It may have been some other 
prohibited item, but it was caught. It was clear that they 
didn't intend to do so.
    That concerns me because we really need to have the 
public's support for the screening process for it to be 
effective. The public has been willing to put up with 
considerable inconvenience and long lines, but if there are 
very heavy fines imposed for behavior that is not intentional 
and that caused no harm other than an extensive period of 
questioning, I wonder if we are striking the right balance. Do 
you have any response to that?
    Mr. Hawley. Yes, I think the commonsense security is really 
the way to look at it, and that, if confirmed, it would be a 
very high and immediate priority to look at the security 
regimes as respect what happens at the checkpoints and give 
that a whole fresh look.
    Clearly, the object of the drill is to find terrorists or 
threats to aviation and to do so without unduly hassling the 
rest of the American public. So I understand and respect the 
point that you have made and will go forward, if confirmed, 
with that in mind.
    Chairman Collins. Thank you. I look forward to talking with 
you after you are confirmed, which I am confident you will be, 
about some of the other issues. I really commend Secretary 
Chertoff for suspending the 30-minute rule of in and out of 
Washington. That has made him a very popular individual with 
frequent travelers. But there are many other concerns that have 
come up repeatedly about the screening process, and I know the 
men and women who are on the front lines as screeners are doing 
their best, and they are doing a great job. But they are 
following rules that at times don't make a lot of sense.
    We also need to do a lot more work on the watch list to 
make sure that it is a consolidated, reliable list with as high 
quality information as possible. All of us have had 
constituents who happen to have similar names or identical 
names to people on the list who have found it extremely 
difficult to fly. We have a lot of work to be done yet.
    Mr. Hawley. Yes, ma'am.
    Chairman Collins. Mr. Hawley, I very much appreciate your 
appearing before the Committee today and your willingness to 
leave the private sector to come back into the public sector 
this time as a presidential appointee. And we appreciate the 
sacrifice of your family as well.
    Without objection, the record will be kept open until 10 
a.m. tomorrow morning for the submission of any additional 
written questions, statements, or materials for the record.
    Again, thank you very much for being here today. I am very 
pleased to lend my support to your nomination, and I hope we 
can get you approved and in place as soon as possible.
    Mr. Hawley. Thank you, Chairman Collins.
    Chairman Collins. This hearing is now adjourned.
    [Whereupon, at 3:16 p.m., the Committee was adjourned.]

                            A P P E N D I X

                              ----------                              


                  PREPARED STATEMENT OF SENATOR AKAKA

    Thank you, Chairman Collins. Mr. Hawley, I too welcome you and your 
family to the Committee. Your family should be proud that you are 
willing to serve your country to protect American lives, and I thank 
them in advance for their sacrifice.
    Mr. Hawley, you led the Department of Transportation team that 
established TSA in 2001 and 2002, and I know you will bring this 
experience into play as head of the agency.
    I enjoyed meeting with you last week and as I mentioned, I have 
four specific concerns to raise with you today. The first is ensuring 
the privacy and civil liberties of travelers. TSA has been criticized 
by privacy advocates and the Government Accountability Office over a 
lack of transparency regarding the use of private contractors and 
commercial data in Secure Flight.
    The second issue is employee rights. Currently, TSA screeners do 
not have the same labor and whistleblower rights as other employees at 
DHS. I support granting full whistleblower rights to TSA employees, and 
I hope you will agree with me.
    My third concern is TSA's contracting practices. I recognize that 
many of the reports of contractor waste date back to 2002 and 2003 when 
the agency was being stood up. However, I am deeply troubled that TSA 
may be allowing contractors to have too much control over contracts on 
which they are bidding, thus creating a conflict of interest. You have 
stated that TSA is seeking to increase staffing levels for contract 
oversight, and I urge you to fill these positions with Federal 
employees and not allow contractors to over see other contractors.
    Lastly, I would like to point out that my home State of Hawaii is 
2,500 miles from the U.S. mainland. Hawaii is uniquely dependent on the 
air and sea for travel and commerce. Our airports have continually been 
short passenger and baggage screeners and are still awaiting the 
funding to install in-line Electronic Detection System (EDS) equipment. 
Currently, the EDS machines sit in already crowded lobbies creating 
congestion and necessitating the employment of more screeners to 
operate the system.
    I ask that you address these issues. Moreover, I ask you to 
remember that accountability and transparency are essential keys to 
successful administration. I look forward to working with you.
    Thank you, Madam Chairman.

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