[Senate Hearing 109-877]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-877
 
 THE FUTURE OF PORT SECURITY: THE GREENLANE MARITIME CARGO 

                         SECURITY ACT 
=======================================================================



                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION


                               __________

                             APRIL 5, 2006

                               __________

        Available via http://www.access.gpo.gov/congress/senate

                       Printed for the use of the





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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
            Kathleen L. Kraninger, Professional Staff Member
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
          Jason M. Yanussi, Minority Professional Staff Member
                  Trina Driessnack Tyrer, Chief Clerk



                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Collins..............................................     1
    Senator Lieberman............................................     3
    Senator Warner...............................................     5
    Senator Carper...............................................     6
    Senator Coleman..............................................     7
    Senator Lautenberg...........................................    31

                               WITNESSES
                        Wednesday, April 5, 2006

Hon. Patty Murray, a U.S. Senator from the State of Washington...     9
Hon. Daniel E. Lungren, a Representative in Congress from the 
  State of California............................................    12
Hon. Jane Harman, a Representative in Congress from the State of 
  California.....................................................    16
Hon. Michael P. Jackson, Deputy Secretary, U.S. Department of 
  Homeland Security..............................................    18
Captain Jeffrey W. Monroe, MM, Director, Ports and Transportation 
  Facilities, City of Portland, Maine............................    36
M.R. ``Mic'' Dinsmore, Chief Executive Officer, Port of Seattle, 
  Washington.....................................................    39
Andrew Howell, Vice President for Homeland Security Policy, U.S. 
  Chamber of Commerce............................................    41
James P. Hoffa, General President, International Brotherhood of 
  Teamsters......................................................    43

                     Alphabetical List of Witnesses

Dinsmore, M.R. ``Mic'':
    Testimony....................................................    39
    Prepared statement...........................................    79
Harman, Hon. Jane:
    Testimony....................................................    16
    Prepared statement...........................................    65
Hoffa, James P.:
    Testimony....................................................    43
    Prepared statement...........................................    94
Howell, Andrew:
    Testimony....................................................    41
    Prepared statement...........................................    85
Jackson, Hon. Michael P.:
    Testimony....................................................    18
    Prepared statement...........................................    69
Lungren, Hon. Daniel E.:
    Testimony....................................................    12
    Prepared statement...........................................    60
Monroe, Captain Jeffrey W., MM:
    Testimony....................................................    36
    Prepared statement...........................................    75
Murray, Hon. Patty:
    Testimony....................................................     9
    Prepared statement with attached photos......................    51

                                APPENDIX

Letter from John J. Castellani, President, dated April 5, 2006, 
  with a statement on behalf of Business Roundtable..............   103
Questions and responses for the Record from:
    Mr. Dinsmore.................................................   106
    Mr. Howell...................................................   108
    Mr. Hoffa....................................................   113
    Mr. Monroe...................................................   115


                      THE FUTURE OF PORT SECURITY:



                      THE GREENLANE MARITIME CARGO



                              SECURITY ACT

                              ----------                              


                        WEDNESDAY, APRIL 5, 2006

                                       U.S. Senate,
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:04 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan 
Collins, Chairman of the Committee, presiding.
    Present: Senators Collins, Coleman, Warner, Lieberman, 
Carper, and Lautenberg.

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Senator Collins. The Committee will come to order. Today 
the Committee considers the GreenLane Maritime Cargo Security 
Act, which Senator Patty Murray and I introduced last November 
with our colleagues Senator Lieberman and Senator Coleman. I am 
very pleased that we will shortly be joined by two of our House 
colleagues who have joined with us in this bipartisan, 
bicameral effort. Representative Dan Lungren and Congresswoman 
Jane Harman, who has arrived right on cue, are both outstanding 
leaders on this important issue. This hearing builds on the 
extensive efforts begun by this Committee 3 years ago to 
enhance the security of our Nation's maritime transportation 
system and the international supply chain.
    Seaports are more than just waterfront facilities. They are 
crucial links in a supply chain that includes all modes of 
transportation and that reaches across the country and around 
the world. They are also profoundly and unacceptably at risk. 
The urgency cannot be overstated. Approximately 95 percent of 
our Nation's overseas trade, worth nearly $1 trillion, enters 
or leaves through our seaports. Our ports receive some 8,500 
foreign vessels, which make more than 55,000 calls per year. 
These ships carry the bulk of approximately 800 million tons of 
goods that come into our country, including more than 175 
billion gallons of oil and other fuels.
    In fiscal year 2005, these vessels also brought more than 
11 million containers. I remember 3 years ago when we held the 
first hearing on this issue the number of containers was 
approaching 9 million, and now it is more than 11 million. The 
number of containers entering this country by sea continues to 
grow by more than 10 percent per year. While this figure 
represents robust trade, it also signals a considerable risk in 
our national security.
    Al Qaeda has the stated goal of causing maximum harm to the 
American people and maximum damage to the American economy. 
Clearly, our cargo ports provide a tempting target. One has 
only to visit a major port like Seattle, which I did in 
February at the invitation of Senator Murray, with its large 
urban population, two stadiums nearby, and ferries bringing 
thousands of passengers every day, to realize the enormous loss 
of life that could occur if a dirty bomb were detonated. I have 
also had the honor of visiting the Long Beach and Los Angeles 
ports at the invitation of our colleague Representative Harman, 
and, again, the magnitude of the potential damage is evident 
when one tours those enormous ports.
    We have already had a glimpse of the staggering economic 
damage that a terrorist attack on a cargo port could produce, 
damage that would extend far beyond the waterfront. The West 
Coast dock strike in the fall of 2002 cost our economy an 
estimated $1 billion a day for each of the 10 days that it 
lasted. It not only brought those ports to a halt, but harmed 
businesses throughout the country and along the entire length 
of the supply chain. That astonishing amount of harm was the 
result of an event that was both peaceful and anticipated. A 
terrorist attack, obviously, would be neither.
    We cannot eliminate the risk of a terrorist attack, but 
better supply chain security can build a stronger shield 
against terrorism without hampering trade. Indeed, greater 
security can promote trade and strengthen the global economy by 
building confidence and trust.
    That is why Senator Murray and I joined together last year 
to introduce comprehensive legislation. Our bill was developed 
in close consultation with key stakeholders, including port 
authorities, major retailers and importers, carriers, labor 
organizations, supply chain managers, security and 
transportation experts, and Federal and State agencies. Let me 
highlight just some of the important features of this bill.
    First, it directs the Department of Homeland Security to 
develop a strategic plan to strengthen security for all modes 
of transportation by which containers arrive in, depart from, 
or move through seaports. Despite the myriad of programs aimed 
at enhancing supply chain security, the Administration has not 
yet brought those programs together in a coherent and seamless 
strategy. The plan we require in the bill would clarify the 
roles, responsibilities, and authorities of government agencies 
at all levels and of the private sector stakeholders. It would 
establish mandatory baseline security standards and provide 
incentives for additional voluntary measures.
    Most important, the Secretary would be required to develop 
protocols for the resumption of trade in the wake of an attack. 
Just as the attacks of September 11 grounded all commercial 
flights, an attack on one port would likely result in the 
closure of all ports for a time. More than 4 years later, the 
Federal Government has yet to establish protocols for resuming 
port operations and for deciding which cargo would be released 
first after an attack.
    The impact on factories and retailers using just-in-time 
inventory, as many businesses do, would be devastating. Much of 
our agricultural sector would also be harmed as farmers would 
be unable to export their crops. These protocols are essential 
to enhancing our economic security.
    Second, the legislation would require the Department to 
make faster progress in strengthening port security and 
outlines priorities for action. I am deeply concerned by the 
slow pace of many of the security initiatives. For example, the 
Department has been working on a regulation setting a minimum 
standard for mechanical seals on containers for more than 2 
years. In addition, though the Department has recently 
announced a timeline toward implementation of the 
Transportation Worker Identification Credential, the TWIC card 
has also languished despite the obvious importance of a secure 
ID to facilitate access to our ports. Such delays are simply 
unacceptable in this era. This legislation would set and 
require clear timelines for action.
    The bill also provides guidance and deadlines for essential 
improvements in several well-conceived security programs, 
including the Automated Targeting System, the Radiation Portal 
Monitor Program, the Container Security Initiative, and the 
Customs-Trade Partnership Against Terrorism (C-TPAT). All of 
these programs are well conceived, but their implementation has 
been spotty and flawed in some cases.
    Third, this legislation would provide for the creation of 
the GreenLane, a third tier of C-TPAT, which would offer 
additional benefits to participants that voluntarily meet the 
highest level of security standards. This part of our bill, 
which was conceived by Senator Murray, is going to be part of 
her testimony, so I will not go into detail. Finally, this 
comprehension legislation would authorize a competitive Port 
Security Grant Program, with $400 million of stable, consistent 
funding each year.
    America's cargo ports, large and small, are on the front 
lines of the war against terrorism. Strong accountability 
provisions are included in this bill to prevent wasteful 
spending, but we need to give the ports consistent, multiyear 
funding. These port security dollars would originate from 
duties collected by Customs and Border Protection. This is a 
major commitment of resources. Overall, the bill would 
authorize $835 million a year, but it is fully proportional to 
what is at stake.
    The controversy over the Dubai Ports issue has focused 
much-needed attention on the overall issue of port security. It 
is my hope that we can pass significant port security 
legislation this year. I am very proud to have worked with our 
colleagues on this issue, and I look forward to hearing their 
views. Senator Lieberman.

             OPENING STATEMENT OF SENATOR LIEBERMAN

    Senator Lieberman. Thank you very much, Madam Chairman. 
Thanks for holding this hearing on a gap in our homeland 
security that just should not be as wide as it is, 4\1/2\ years 
after September 11, 2001.
    As you have said, on a daily basis, 800 million tons of 
goods cross our borders whether by ship, train, or truck. 
Ninety-five percent of it arrives in the 21,000 containers that 
enter U.S. ports each day. This is a number that probably 
startles most people because most people live away from all of 
the activity at our ports in this country and do not see how 
much is coming in. But these ports really are our lifeline to 
the global economy.
    The Administration has told us in testimony before this 
Committee recently that somewhere between 5 and 6 percent of 
those 21,000 containers that come in every day are physically 
inspected. That's up from 2 or 3 percent a few years ago, and 
of course I am grateful for that progress, but it obviously is 
not enough. The fact is that, at any given moment, our 
government still has too little knowledge of the contents of 
thousands of multi-ton containers that are loaded from the 
ports onto trucks, trains, and other barges for shipment into 
and across the heart of this Nation every day. The nightmare 
scenario that we all have within us and together want to stop, 
of course, is the smuggling of a nuclear bomb or a dirty bomb 
within a shipping container. We know that criminals have for a 
long time used cargo containers to smuggle drugs, firearms, and 
even people into this country. We know containers have been a 
means for transporting terrorists and their weapons, as well. 
And we know that a terrorist attack at any one of our major 
ports could cause billions of dollars of damage to the economy 
just in the short-term. Given the irreparable damage that would 
result from the smuggling of a weapon of mass destruction 
across our borders in a shipping container, we have to act 
urgently to protect ourselves before it is too late, and that 
means directing people, technology, and resources toward the 
goal of greater port and cargo security.
    That is exactly what the legislation before the Committee 
today does. I am privileged to have joined you, Senator 
Collins, Senator Murray, and Senator Coleman, on this. We are 
of like mind and singular purpose. We understand that we need a 
comprehensive, coordinated, and multilayered strategy to 
protect not just cargo and containers, but ships, piers, ports, 
and maritime workers, as well. We need to do this to protect 
our national and economic security before terrorists strike. 
That is the purpose of the GreenLane Maritime Cargo Security 
Act, which we introduced, again, last month.
    The Chairman has outlined the bill and many important 
things it does. I just want to focus on one part that I believe 
is very important, and that is the Port Security Grant Program. 
Unfortunately, the Administration has tried to eliminate a 
dedicated Port Security Grant Program from the budget for the 
last 3 years in a row, despite evidence that it is crucial to 
our ability to improve the physical security of our ports.
    Congress has, fortunately, and across party lines, rejected 
the Administration's proposal as many times as it has been 
proposed.
    The legislation before us today, our legislation, would 
ensure that every port is eligible to apply for a port security 
grant. We require them to persuade the Department that they are 
at risk, but once they do, they are eligible for the grant.
    The bill also would reauthorize Operation Safe Commerce to 
test innovative technologies in real-world cargo environments, 
another program, which unfortunately, the Administration has 
seemed determined to eliminate.
    Madam Chairman, the legislation that we have introduced 
together and that has been introduced on the House side by 
Congresswoman Harman and Congressman Lungren and others would 
greatly increase the security of American ports and, therefore, 
greatly raise our defenses against terrorists who would use our 
ports to attack us.
    Here again, we have a choice. The warnings are clear. We 
can await disaster, or we can act proactively to prevent it. 
Ultimately, there is no choice. Our legislation acts wisely to 
establish the structure proactively and preventively and to 
provide the resources necessary to protect the American people.
    I join you, Madam Chairman, in welcoming Senator Murray, 
Congresswoman Harman, Congressman Lungren, and I look forward 
to their testimony and that of the other witnesses that we 
have. Thank you.
    Chairman Collins. Thank you. Senator Warner.

              OPENING STATEMENT OF SENATOR WARNER

    Senator Warner. Thank you very much, Madam Chairman. In 
deference to our distinguished colleagues about to testify, I 
will ask to put my statement in the record with one or two 
observations quickly.
    Quite interesting, the Nation's 361 ports form the heart of 
the U.S. maritime transportation system and function as the 
Nation's lifeline. I did not realize it. They handle 95 percent 
of all overseas-U.S. trade, extraordinary. And they serve as 
the conduit for 90 percent of the war material destined for 
major theater operations. So you can realize the full 
importance of what we are about to do, as this Committee moves 
ahead with potential legislation. I would like to say that I am 
privileged to represent a State that has the second largest 
port on the East Coast, and our port was recently recognized by 
the London-based Containerisation International as the top port 
authority in the world for 2004 and 2005.
    I yield the floor.
    [The prepared statement of Senator Warner follows:]
                  PREPARED STATEMENT OF SENATOR WARNER
    Thank you, Madam Chairman, for holding today's hearing. It is a 
topic with which I share your interest both from a security and 
economic perspective.
    I am privileged to represent a State that has the second largest 
container port on the east coast and is the fastest growing in the 
country. In fact, with the expansion of our existing port and opening 
of the Nation's first privately owned and operated terminal next year, 
the combined ports in the Hampton Roads area of Virginia will double in 
size. We are proud of the fact that Virginia Port Authority was 
recently chosen by Containerisation International, a London-based 
publication, as the top port authority in the world for 2004 and 2005.
    As I stated before, the issue of enhanced port security is 
something I have focused on for the past several years:

      The 2002 Defense Appropriations Bill (P.L. 107-117) 
created four new Coast Guard marine safety and security team teams--two 
teams ``to exclusively serve those port areas presenting the greatest 
security challenges, especially those ports with a substantial 
concentration of critical Department of Defense facilities. . . .'' and 
two with area-wide responsibilities (one for the Atlantic Ocean, one 
for the Pacific).

      I have also worked with my colleague from New York, 
Senator Schumer, introducing our own bill in the 107th Congress. The 
``Port Terrorism Prevention Act'' required strict cargo reporting 
standards, provided funds for mobile X-ray machines, and authorized 
grants for research and development. The passage of the Port Security 
Bill in November 2002 included several of our provisions, including $15 
million per year in research and development grants.

    Since that time the maritime industry, our Port Authorities, and 
the Department of Homeland Security have all worked together to improve 
security at our Nation's seaports. I am proud of the progress made to 
date and look forward to the opportunity to continue on that path.
    The Nation's 361 major ports form the heart of the U.S. Maritime 
Transportation System (MIS), and function as the Nation's lifeline. 
They handle 95 percent of all U.S. overseas trade, and they serve as 
the conduit for 90 percent of war material destined for major theater 
operations. While only 2-5 percent of the 6 million cargo containers 
that pass through these ports each year are physically inspected, it is 
important to note the progress made in establishing a strong worldwide 
network under the Department of Homeland Security's Container Security 
Initiative (CSI) and Customs-Trade Partnership Against Terrorism (C-
TPAT) programs that coordinate pre-screening in ports and businesses 
around the world.
    Once again, thank you Madam Chairman for holding this hearing. I 
look forward to the testimony of our witnesses and to working with the 
Committee and the rest of the Senate to advance the security of our 
Nation.

    Chairman Collins. Thank you. I appreciate your reminding us 
of the military implications of our ports too. That is an 
important point.
    Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Madam Chairman. It is always 
good to see our colleague Senator Murray, and I have not seen 
Dan Lungren for a while. Your career has taken an interesting 
set of turns, so welcome, Daniel, nice to see you. And 
Congresswoman Harman, great to be with you last week and again 
to be with you today, and thank you for your leadership in the 
House of Representatives on some real important issues. A brief 
statement I want to make, and then to have a chance to hear 
your testimonies.
    In the wake of September 11, we all recall Congress passing 
legislation to transform aviation security and to allocate the 
billions of dollars to make our airports safer, and I am 
reminded, as I travel around the country and around the world, 
I think we have made some real progress. We all know that we 
have some way to go.
    Around the same time, we recall that we passed the Maritime 
Transportation Security Act. It is a bill that requires Federal 
agencies, ports, and vessel owners to take a number of steps to 
upgrade security, and 4 years later, I am sorry to say, we have 
not really followed through.
    While it is not physically possible to open up every piece 
of cargo brought onshore on our ports, we are still inspecting, 
as we know, only a very small portion of that. In addition, 
initiatives to inspect high-risk cargo overseas before it comes 
to us in the United States and reward shippers that secure 
their supply chains have proven ineffective to date, largely 
due to inadequate staffing and an inability to conduct 
necessary inspections.
    In my State we do not have a port like you do in 
Washington. I was out visiting part of your port operation not 
long ago, however. We are small potatoes in comparison. We are 
a big banana port but small potatoes compared to what you have 
in Washington. In Delaware, the Port of Wilmington has been the 
site of a test conducted by the Department of Homeland Security 
of an identification system for screening port workers and 
blocking individuals with criminal or terrorist backgrounds 
from accessing sensitive areas around our port. The test under 
way at the port and at three other locations has been, we 
believe, quite successful. However, Homeland Security, for 
reasons that are not all together clear to me, is ending this 
test, even though a national screening and identification 
system is still more than a year away.
    I just do not think this makes a lot of sense, Madam 
Chairman, and I look forward to hearing from Deputy Secretary 
Michael Jackson, who is out here somewhere in this audience, 
about what the Department of Homeland Security plans to do to 
get this program adopted and implemented nationally and whether 
it makes sense to discontinue a program that is working at our 
port and a number of other ports. We are already using it 
successfully in the interim.
    Thanks, Madam Chairman.
    Again, to our witnesses, welcome, it is great to see you 
all.
    Chairman Collins. Thank you. Senator Coleman.

              OPENING STATEMENT OF SENATOR COLEMAN

    Senator Coleman. Thank you, Madam Chairman. We may be a big 
potato port since we grow them in Western Minnesota, and we 
have a small banana port over on Lake----
    Senator Carper. Keep away from our bananas.
    Senator Coleman. First, Madam Chairman and the Ranking 
Member, thanks for your leadership on this critical issue. And 
I applaud Senator Murray for her leadership, and I see my 
friends from the House who have done an outstanding job.
    This is important. I will reflect on Senator Warner's words 
and request that my full statement is entered into the record. 
I have just a couple observations.
    Chairman Collins. Without objection.
    [The prepared statement of Senator Coleman follows:]
                 PREPARED STATEMENT OF SENATOR COLEMAN
    Thank you, Chairman Collins and Ranking Member Lieberman for 
holding this important hearing and championing the legislative solution 
to the challenge of port security. I also applaud and thank Senator 
Murray for her leadership on this important issue. As you know, I held 
two hearings last week in my Subcommittee examining these issues. Our 
oversight investigation culminated with an extensive staff report that 
makes several recommendations that I believe are reflected in the 
GreenLane Maritime Cargo Security Act. And I am happy to be an original 
co-sponsor of this important legislation.
    Many experts in the industry believe it is just a matter of time 
before terrorists compromise the security of supply chain, most likely 
with a dirty bomb. This legislation will help prevent that from 
happening by adding standards to supply chain security as well as 
insisting that the Department of Homeland Security expedite the 
deployment of Radiation Portal Monitors to our Nation's seaports. It is 
4\1/2\ years after September 11, and we have a massive blindspot at our 
seaports. More than half of the containers that enter through this 
Nation's seaports are not screened for radiation.
    When enacted, this legislation will significantly enhance our 
supply chain security and codify many existing programs. I also intend 
to amend this legislation and order the Secretary of DHS to report back 
to us within 90 days with a plan on how to improve our screening 
processes. As I have previously mentioned, the Hong Kong system is a 
promising concept that demonstrates the potential to enhance our supply 
chain security by screening more containers with both an X-ray and a 
radiation scan. We--as elected officials--have a difficult time 
explaining to our constituents that the Department of Homeland Security 
believes screening 5.4 percent of containers is adequate when 
technology may exist to screen close to 100 percent.
    Improving supply chain security demands a public-private 
partnership. Not only is the task too great for government, but we do 
not possess the in-depth knowledge of the global supply chain.
    However, we do know that the supply chain is riddled with 
vulnerabilities. That is what we in the government must fix. Industry 
and government need to work collaboratively and move forward on 
programs and technologies to secure trade. Instead of security being a 
cost of doing business, it must become a way of doing business.
    The bottom line is this: We are safer now than we were yesterday, 
but we are not safe enough. Enacting the GreenLane Maritime Cargo 
Security Act will make us safer and solve many of the challenges that 
confront our supply chain security programs.

    Senator Coleman. It has been 4\1/2\ years since September 
11, and we still have massive blind spots in our container 
security. We simply have to do better. There is no question 
about that.
    I am proud to be an original co-sponsor of this 
legislation. It is important, and it will improve our supply-
chain security.
    One of the things that we discussed at our hearing was we 
looked at a system in Hong Kong. I am not here to say that this 
system works, but rather demonstrates the potential to screen 
100 percent of the containers as they come through the port. 
One of the difficulties that I have is explaining to my 
constituents how we are safe when we screen about 5.4 percent 
of the containers coming in. I believe it is important to 
screen more, and I intend to push the Department very hard to 
come back within 90 days and tell us how we are going to screen 
at least 100 percent of the high-risk containers, those in 
which we have some reason to believe, based on a process that 
we use, there is some risk. And I think it is also important 
that we have that screening done before it reaches our shores, 
that we have kind of a multi-layered system here. But the best 
place to do that screening first is before it ever gets on a 
cargo ship coming here. Then, when it gets here, we have to put 
in place many of the mechanisms that are already in place and 
are strengthened by this legislation.
    Two other quick observations. One, I was pleased to hear, 
and we will hear from Secretary Jackson, that the TWIC program, 
the worker ID, is finally moving forward. It was indicated to 
us that by last Friday there would be notice published about 
this process. So I do hope the efforts of this Committee and 
others to accelerate the process by which we improve the level 
of securities is having a difference, and I look forward to 
seeing those results.
    Then the last observation is this, and that is that this is 
something that government cannot do alone. We really do need to 
work with the private sector. I heard that. I saw that. They 
have an interest. Security, instead of being a cost of 
business, it needs to be a way of doing business. We have to 
work in partnership and, perhaps, work in partnership with some 
foreign companies since they control about 80 percent of the 
terminals.
    So the bottom line is this: We are safer today than we were 
yesterday, but we are not safe enough. Enacting the GreenLane 
Maritime Cargo Security Act will make us safer and solve many 
of the challenges that confront our supply chain security 
programs today.
    So thank you again for your leadership, Madam Chairman.
    Chairman Collins. I want to commend the Senator from 
Minnesota for his leadership on this. You have held many 
hearings in the Permanent Subcommittee on Investigations to 
look at the effectiveness of our port security programs, and 
that has been extremely helpful in educating this Committee as 
we go forward.
    I am very pleased now to welcome our first panel of 
distinguished witnesses, each of whom has been a true leader on 
port security. We will start with Senator Murray.

TESTIMONY OF THE HON. PATTY MURRAY,\1\ A U.S. SENATOR FROM THE 
                      STATE OF WASHINGTON

    Senator Murray. Thank you very much, Chairman Collins and 
Ranking Member Lieberman, for calling this hearing and for your 
leadership on cargo security.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Murray with attached photos 
appears on page 51.
---------------------------------------------------------------------------
    I am here today because our country is vulnerable to a 
terrorist attack, and time is not on our side. By using cargo 
containers, terrorists can deliver a deadly one-two punch to 
our country. The first punch would create an untold number of 
American casualties. The second punch would bring our economy 
to a halt.
    Cargo containers carry the building blocks of our economy, 
but they can also carry the deadly tools of a terrorist attack. 
Today we are not doing enough to keep America safe. Sitting 
here in this Senate room, it can feel like the dangers at our 
ports are a million miles away. In recent years, some in our 
government have said they could never have imagined the 
devastation caused by recent disasters.
    So let me make this crystal clear. On March 21, just 2 
weeks ago, a container ship called the Hyundai Fortune was 
traveling off the coast of Yemen when an explosion occurred in 
the rear of the ship. Here is a photo of what happened next.\2\ 
About 90 containers were blown off the side of the ship, 
creating a debris field of five miles long. There were few 
fatalities, and the crew was rescued. They are still 
investigating the cause, but it does not at this time appear to 
be terrorist related. Here is another picture. Now I want you 
to imagine this same burning ship just a few feet from our 
shores in New York Harbor, or Puget Sound, or off the coast of 
Los Angeles, or Charleston, Miami, Portland, Hampton Roads, 
Delaware Bay, or the Gulf of Mexico.
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    \2\ The photos mentioned by Senator Murray appear in the Appendix 
on page 56.
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    Now imagine that we are not just dealing with a 
conventional explosion, we are dealing with a dirty bomb that 
has exploded on American shores. Let me walk you through what 
would happen next. First, of course, there would be an 
immediate loss of life. Many of our ports are located near 
major cities. If this was a nuclear device that exploded at a 
major port, up to 1 million people could be killed. If this was 
a chemical weapon exploding in Seattle, the chemical plume 
would contaminate our rail system, Interstate 5, and SeaTac 
Airport, not to mention the entire downtown business and 
residential district. At the port, there would be tremendous 
confusion. People would try to contain the fire, but it is 
unclear who, if anyone, would be in charge. Then, when word 
spread that it is a dirty bomb, panic would likely set in. 
There would be chaos as first responders tried to react and 
residents tried to flee.
    Next, our government would shut down every port in America 
to make sure there were not other bombs in other containers in 
other cities. That shutdown would be the equivalent of driving 
our economy into a brick wall. It could even spark a global 
recession. Day by day, we would feel the painful economic 
impact of such an attack. American factories would not be able 
to get the supplies they needed. They would shut their doors, 
lay off workers. Stores around the country would not be able to 
get the products they needed to stock their shelves.
    Now, in 2002, as the Chairman said, we saw what a closure 
of a few ports on the West Coast would do. It cost our economy 
$1 billion a day. Imagine if we shut down all our ports. One 
study concluded that if U.S. ports were shut down for just 12 
days, it would cost our economy $58 billion. Next, we would 
realize we have no plan today for resuming trade after an 
attack. No protocol for what would be searched, what would be 
allowed in, and even who would be in charge. There would be a 
mad scramble to create a new system in a crisis atmosphere. 
Eventually, we would begin the slow process of manually 
inspecting all the cargo that is waiting to enter the United 
States. One report found that it could take as long as 4 months 
to get them all inspected and moving again. Finally, we would 
have to set up a new regime for port security, and you can bet 
that any new rushed plan would not balance strong security with 
efficient trade.
    The scenario that I just outlined could happen tomorrow, 
and frankly, we are not prepared. Nearly 5 years after 
September 11, we still have not closed a major loophole that 
threatens our lives and our economy. Time is not on our side. 
We must act.
    Madam Chairman, I approach this as someone who understands 
the importance of both improving security and maintaining the 
flow of commerce. My home State of Washington is the most 
trade-dependent State in the Nation. We know what is at stake 
if there were any incident at any of our ports. That is why I 
wrote and funded Operation Safe Commerce to help us find where 
we are vulnerable and to evaluate the best security practices. 
It is why I have worked to boost funding for the Coast Guard 
and have fought to keep the Port Security Grant Program from 
being eliminated year after year. Right after September 11, I 
started talking with security and trade experts to find out 
what we need to be doing to both improve security and keep 
commerce flowing.
    Ten months ago, I sought out Chairman Collins, and she has 
been a partner in this effort. I approached her because I knew 
she cared about the issue, I knew she had done a lot of work on 
it already, and I knew she was someone who could get things 
done. Since that day, we have worked hand-in-hand to develop 
this bill and move it forward, and I am very grateful as well 
to Senators Lieberman and Coleman for their tremendous work as 
well.
    The GreenLane Act recognizes two facts: we must protect our 
country, and we must keep trade flowing. We know we are 
vulnerable. Terrorists have many opportunities to introduce 
deadly cargo into a container. It could be tampered with any 
time from when it leaves a foreign factory overseas to when it 
arrives at a consolidation warehouse and moves to a foreign 
port. It could be tampered with while it is en route to the 
United States. And there are several dangers. I outlined what 
would happen if terrorists exploded a container, but they could 
just as easily use cargo containers to transport weapons or 
personnel into the United States to launch an attack anywhere 
on American soil.
    Madam Chairman, while I have been sitting here I have just 
received notice that there were 21 Chinese nationals just found 
this morning in a cargo container in the Port of Seattle, and I 
want to commend our Customs agents for being very efficient in 
finding them, but it shows us once again how vulnerable we are.
    The programs that we have in place today are totally 
inadequate. Last May, thanks to the insistence of Senators 
Collins and Coleman, the Government Accountability Office found 
that C-TPAT was not checking to see if companies were doing 
what they promised in their security plans, and even when U.S. 
Customs inspectors do find something suspicious at a foreign 
port, they cannot force a container to be inspected. So we have 
a clear and deadly threat, and we know that current programs 
are inadequate. So what are we going to do about it? We could 
manually inspect every container, but, frankly, that would 
cripple our economy.
    The real challenge here is to make trade more secure 
without slowing it to a crawl, and that is why Senators 
Collins, Coleman, Lieberman, and I have been working with all 
of our stakeholders and experts to strike the right balance, 
and the result is the GreenLane Maritime Cargo Security Act. It 
provides a comprehensive blueprint for how we can improve 
security while keeping our trade efficient. At its heart, this 
challenge is about keeping the good things about trade, speed 
and efficiency, without being vulnerable to the bad things 
about trade, the potential for terrorists to use our engines of 
commerce.
    Our bill does five things. First, it creates tough new 
standards for all cargo. Today we do not even have any 
standards for cargo security.
    Second, it creates the GreenLane option, which provides an 
even higher level of security. Companies have the option to 
follow the higher standards of the GreenLane, and their cargo 
will be tracked and monitored from the moment it leaves a 
factory floor overseas until it reaches the United States. We 
will know everywhere that cargo has been. We will know every 
person who has touched it, and we will know if it has been 
tampered with. The GreenLane will push out our borders by 
conducting inspections overseas before cargo is ever loaded on 
a ship bound for the United States, and we will provide 
incentives for the companies to use the highest standards of 
the GreenLane.
    Third, our bill sets up a plan to resume trade quickly and 
safely to minimize the impact on our economy.
    Fourth, our bill will secure our ports here at home by 
funding port security grants at $400 million.
    Finally, our bill will hold DHS accountable for improving 
cargo security. DHS is long overdue in establishing cargo 
security standards and transportation worker credentials. We 
need to hold DHS accountable, and our bill provides the 
infrastructure to ensure accountability and coordination.
    I want to thank all of our cosponsors and partners, 
especially Chairman Collins for her tremendous leadership, and 
I want to thank Senator Coleman for his leadership and work as 
Chairman of the Permanent Subcommittee on Investigations. 
Senator Coleman has helped expose our vulnerabilities and has 
worked to help develop solutions. I also want to thank the 
Ranking Member, Senator Lieberman, for his leadership and his 
support, and I want to commend our cosponsors, Senators 
Feinstein, Snowe, DeWine, and Warner. We are also seeing 
tremendous progress on the House side with SAFE Port Act, and I 
want to thank Representatives Dan Lungren and Jane Harman for 
their leadership.
    You are going to hear today also from Mic Dinsmore. He is 
the CEO of the Port of Seattle. He has been a real leader on 
cargo and port security issues, and I have been proud to work 
with him.
    Madam Chairman, today we have a choice in how we deal with 
cargo security challenges facing us, but if we wait for a 
disaster, our choices are going to be much starker. Let's make 
the changes now, on our terms, before there is a deadly 
incident. Let's not wait until a terror incident strikes again 
to protect our people and our economy.
    Two months ago, the American people woke up and spoke out 
when they heard that a foreign-government-owned company could 
be running our ports. That sparked a critical debate. Now we 
need to set up a security regime that will actually make us 
safer. Until we do so, none of us should sleep well at night. A 
terrible image like this one, a burning container ship, with a 
dirty bomb, in one of America's harbors could be on our TV 
screens tomorrow, so this Committee and this Congress must act 
today.
    Thank you, Chairman Collins.
    Chairman Collins. Thank you so much for your very eloquent 
testimony and your hard work on this issue.
    Representative Lungren, welcome.

  TESTIMONY OF HON. DANIEL E. LUNGREN,\1\ A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Lungren. Thank you very much. Thank you, Chairman 
Collins and Ranking Member Lieberman, for inviting me to 
testify today. Although I now represent a district that is 
centered in Sacramento County and goes up into the mountains of 
the Sierras, in my previous term of service I represented a 
district 400 miles away on the coast in Long Beach. I had both 
Long Beach and Los Angeles Harbors in my district. When I was 
in college, I actually worked in the Port of Los Angeles at one 
of the shipbuilding facilities, so I have seen many changes.
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    \1\ The prepared statement of Mr. Lungren appears on page 60.
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    After 16 years away from Congress, it is refreshing to 
return to an environment in which important issues such as port 
security can be approached in a bipartisan and bicameral 
fashion. The cooperative manner in which the House and the 
Senate are moving companion legislation on this issue is a 
testament not only to your leadership here in the Senate, and 
that of Chairman King in the House, but also evidence of the 
urgent need, the urgent nature of our task.
    On October 18, 2001, Italian port authorities noticed 
unusual movement coming from a container waiting for the next 
leg of its transshipment to Canada. Inside the container, a man 
was attempting to widen ventilation holes for what had become 
his temporary residence. The container boasted superior 
amenities to those found in many homes around the globe. It had 
a bed, a heater, toilet facilities, water, laptop computer, and 
a satellite phone; all accompanied the man for his trip. Also 
inside the container were airport security passes, an airline 
mechanic's certificate valid for New York's JFK Airport, Newark 
Airport, LA International Airport, and O'Hare Airport in 
Chicago. After the man was temporarily apprehended, he 
disappeared. His intent and his whereabouts are unknown to this 
day.
    This event, occurring only one month after the tragic 
events of September 11, is in part the product of an 
increasingly liberal global trade system. Those of us who 
remember the great film ``On the Waterfront'' know that only 50 
years ago things were quite different. Before the advent of 
cargo containers, cargo had to be individually loaded, 
offloaded, transported to a warehouse, inspected by Customs 
officers, and then reloaded on to their respective vessels. 
Although this system ensured transparency, it was, obviously, a 
barrier to trade. Cargo containers are able to accommodate the 
transport of huge volumes of goods without manual intervention 
by dock workers, making global trade more efficient and more 
profitable, and that is the world that we live in today.
    Today we must ensure that the efficiency of our intermodal 
transportation system does not, however, compromise American 
security. The various aspects that make it so unique, the 
various aspects that make it possible for a different world to 
exist today, compared to 50 years ago, where we do not have 
things warehoused, where our warehouses are really moving on 
ships and trucks around this world, and we depend on that. We 
depend on these things to come to us just in time. That is, as 
I say, the world we live in. At the same time it creates the 
vulnerability. The very efficiency, the very timeliness of this 
kind of trade provides opportunities for those who would do us 
harm.
    I believe that the GreenLane Maritime Cargo Security Act, 
which we are here today to discuss, does help create an 
environment in which we can maintain that efficiency without 
compromising American security, and it does it primarily by 
enhancing supply-chain visibility and accountability. By 
involving everyone in the supply chain, including importers, 
freight forwarders, shippers, terminal operators, longshoremen, 
truck drivers, and port employees, this Act ensures 
accountability from the factory floor overseas to seaports here 
in the United States.
    Let us pause here and take a moment to recognize the nature 
of this endeavor by Senators Collins and Murray. I think it is 
important to note that neither this effort in the Senate nor 
the companion effort in the House with the SAFE Ports Act is an 
afterthought to the recent Dubai Ports World controversy. 
Senators Collins, Murray, Lieberman, Coleman, and others began 
work on this bill months before the now-defunct acquisition of 
U.S. port operations by the United Arab Emirates-owned company 
made headlines around the country. That is important because 
this is not a reaction to headlines. It is not a reaction to 
the emotion of the moment. It is, in fact, a well-considered 
response to a continuing problem that affects all of us. The 
facts that were illustrated in the remarks by the senior 
Senator from Virginia are extremely important. We take for 
granted this trade. We take for granted that it is going to be 
there. We do not realize, as was pointed out by Senator Murray, 
the tremendous impact an attack on a single major port would 
have on all of us. It would not just close down that one port. 
When we had September 11, we did not just close down the 
airport from which the airplanes originated--we closed down our 
entire system. Does anyone think we would not do the same thing 
with respect to ports, at least for a short period of time?
    When I recently was at the Los Angeles Port and met with 
some of the port operators there, they talked about the 11-day 
slowdown we had because of a little labor dispute in LA-Long 
Beach Harbors. They told us it took 100 days for them to 
recover from that 11 days. One hundred days, and this is one of 
the most efficient operators in the entire world. They did not 
want to have delay. They worked as hard as they could to get 
back to everyday operations, but an 11-day slowdown caused a 
100-day shortfall in terms of getting back to day-to-day 
operations.
    Nonetheless, the hullabaloo around the Dubai Ports World 
deal injected a sense of urgency to the need for important port 
security reform, and for that at least we can be thankful.
    The GreenLane Act authorizes important programs such as the 
Container Security Initiative (CSI), the Customs-Trade 
Partnership Against Terrorism (C-TPAT) program, creates a third 
tier of C-TPAT known as GreenLane, directs the Secretary of 
Homeland Security to create baseline container security 
standards and procedures, and importantly, creates a dedicated 
port security grant program.
    The C-TPAT program, which is authorized for the first time 
in this Act, incentivizes the private sector to share 
responsibility in the protection of our homeland from terrorist 
attack with government. Entities participating in the 
international supply chain, from importers to land carriers, 
are encouraged to enter into a partnership with the Department 
of Homeland Security. By allowing companies to volunteer to 
submit additional information regarding their business 
operating procedures, manifest data, and container contents, 
they will become eligible for expedited processing once their 
shipment reaches the United States.
    This program, I believe, lies at the heart of future 
homeland security business approaches. It serves a dual purpose 
of protecting Americans from those that would do us harm, while 
also creating more efficient and profitable business operations 
for companies that choose to participate.
    One company, for instance, toy manufacturer Hasbro, has 
seen a five-to-one return rate since becoming a C-TPAT member 
in 2002. What do I mean by that? The company spent 
approximately $200,000 in up-front costs becoming compliant 
with C-TPAT and about $112,500 each year thereafter maintaining 
compliance. After becoming a member, its inspection rates 
dropped significantly. Given that it imported 8,000 containers 
into the United States in 2003 and that port authorities charge 
$1,000 per inspection, they are saving about a half a million 
dollars a year in inspection costs alone. There is a carrot and 
a stick involved in this program that is in this bill.
    The GreenLane Act allows the Department of Homeland 
Security to focus a greater percentage of its resources on 
those threats that pose the greatest risk. It makes little 
sense to spend 99 percent of our resources hardening 99 percent 
of what will never become a target. Risk-based analysis is 
appropriate.
    That is why I am here today to commend your efforts. Your 
legislation is reflective of a common-sense approach to port 
security. As you know, Congresswoman Jane Harman, ranking 
member of the House Intelligence Committee, and I have 
developed House companion legislation. Our bill, called the 
SAFE Port Act, Security and Accountability for Every Port Act, 
is somewhat different from the Senate legislation before us, 
but is based upon the common principle of pushing our shores 
out as far as possible through layered defenses. The SAFE Port 
Act is a comprehensive proposal to strengthen the maritime 
transportation system through the multi-layered security 
strategy that everyone agrees with, which builds on existing 
initiatives to secure the supply chain from the point of origin 
to delivery in the United States.
    It focuses on improved security, both at home and abroad, 
by expanding capabilities, maximizing available resources, and 
pushing our borders forward. I would just mention three key 
areas.
    First, enhancing security at our U.S. ports by establishing 
a risk-based port security grant program with dedicated funding 
from Customs duties. I think a dedicated revenue stream is 
extremely important. It also requires implementation of the 
TWIC program. We are happy to hear, as others are, that it 
looks like we are finally going to get a TWIC program. 
Nonetheless, we should keep it in our legislation to make sure 
that we do get it.
    Second, preventing threats from reaching the United States 
by authorizing and improving two Customs and Border Protection 
cornerstone security programs, CSI, the Container Security 
Initiative, and C-TPAT, similar to the Senate bill.
    And third, tracking and protecting containers en route to 
the United States by improving our ability to detect high-risk 
containers through strengthening the existing Automated 
Targeting System by requiring entry data, establishing 
container security standards, supporting additional cargo 
security research and development, and reviving Operation Safe 
Commerce.
    We held legislative hearings on our bill on March 16, 
followed by a markup in subcommittee on March 30. We added two 
key provisions to the base bill. First, we established the 
Directorate for Policy, Planning, and International Affairs in 
the Department. Within this directorate, we created a position 
of Director of Cargo Security.
    I worked with Congressman John Linder of the Subcommittee 
on Prevention of Nuclear and Biological Attack to establish the 
Domestic Nuclear Detection Office, which will work to establish 
relationships across departments and levels of government in 
order to develop a global nuclear detection architecture.
    The full House committee met yesterday to hold a 
legislative hearing on this piece of legislation, and a full 
committee markup is scheduled before the end of April. We have 
a commitment from our leadership to have this on the floor in 
May. We are working expeditiously because we want to make sure 
that we keep up with you, and hopefully, we will meet you in 
conference.
    Thank you very much.
    Chairman Collins. Thank you very much, and let me commend 
you for the rapid action in the House of Representatives. You 
really have leap-frogged us by getting it out of subcommittee 
already. I do hope that we will schedule a markup within the 
next few weeks on this bill, and I look forward to meeting you 
in conference. Thank you for your good work.
    Representative Harman, it is a great pleasure to welcome 
you to the Committee today. We have worked together on so many 
different homeland security bills, and it is great to have you 
here.

TESTIMONY OF HON. JANE HARMAN,\1\ A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Ms. Harman. Thank you very much. I am last, but I hope I am 
not least. I am very excited about the progress we are making 
on this legislation.
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    \1\ The prepared statement of Ms. Harman appears on page 65.
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    Chairman Collins, my Senate Security Sister, has been to 
the Los Angeles-Long Beach port complex twice in the last year 
at my invitation to assess best practices and observe how 
various agencies and levels of government cooperate and 
coordinate. She even buckled up in a Coast Guard helicopter in 
Maine-like weather to see the huge complex from the air. Now, 
if I could only get her to go for a run on the beach, as 
Secretary Chertoff has.
    It was during our work on the Intelligence Reform Bill in 
2004 that Senator Collins, Senator Lieberman, and I really 
bonded. Our collaboration yielded great results then, and I am 
confident that it will again.
    If there is a silver lining to the recent Dubai Ports World 
debacle, it is that it roused Congress from a deep security 
slumber, at least as far as port security was concerned. 
Congress and the American people are now focused on the huge 
vulnerability of our seaports.
    I applaud your leadership and initiative on this issue. You 
and your partners, Senator Murray and Senator Coleman, have a 
terrific bill in the GreenLane Maritime Cargo Security Act. My 
California colleague, Dan Lungren, and I used many of the same 
ideas in crafting our SAFE Port Act. It differs in some 
respects, of course. In those ways it is better. [Laughter.]
    But it is similar, and in that regard, I want to also 
commend contributions from a number of House members, including 
Bennie Thompson, the ranking member of the full House 
committee, Loretta Sanchez, ranking member on Representative 
Lungren's subcommittee, and former Representative Doug Ose, 
whose idea it was to use dedicated Customs revenues to fund 
long-term multi-year port security improvements.
    I will not share my worst nightmare with you. It is just as 
bad as Senator Murray's. I am not going to embellish it with 
some of her information. But I also will not share with you how 
many times focused dock operators have found human beings in 
containers at the Port of Los Angeles. That is truly scary. 
Let's understand that instead of Chinese stowaways, we really 
could have terrorists in those containers, and they could be 
fully armed. A lot of the things they might be armed with would 
escape our detection techniques, and they could attack us, both 
in those ports, or if they continued to be in those containers, 
in the interior of the United States.
    Let's remember that 50 percent of our cargo, our container 
cargo, goes through the LA-Long Beach complex, and some of it 
directly goes on rail into the center of our country, and it 
may even end up in Maine or Connecticut. So this is a very bad 
nightmare.
    Why did these incidents happen despite steps taken by the 
Homeland Security Department to improve supply chain security?
    Well, first, as others have said, we still do not really 
know what is in the box, evidence, human beings might be in a 
box labeled ``clothing.''
    Second, the system used to determine whether or not a 
container poses a threat remains flawed. There have been good 
efforts at DHS. I applaud them, and I am sure you are going to 
hear about them from Secretary Jackson in a moment, but 
nonetheless, the system is not even close to what it needs to 
be.
    Third, many ports, as we know, do not have the technology 
in place to screen containers for contraband or weapons of mass 
destruction.
    Fourth, CBP and the Coast Guard do not have adequate 
personnel to examine containers and conduct inspections 
throughout the worldwide supply chain or at U.S. ports.
    The legislation we are discussing in both chambers is 
strategic, comprehensive, and badly needed. I am very proud to 
be part of this bipartisan, bicameral effort. Port security, as 
you have heard, must be layered and strategically structured to 
enhance safety without disrupting the flow of trade. These are 
two competing goods, and we will either have both or we will 
have neither, unless we get it right.
    The terrorists, as we know, attack us asymmetrically, and 
they will look for holes in our security network and look to 
strike where we are weakest. It is impossible to hand search 
every container entering the country. As Congressman Lungren 
has just said, that was the old port security. The new port 
security has to have better strategies and the use of 
technology.
    Our bill would do that. It would push out our borders and 
help prevent bad actors and hazardous materials from reaching 
American soil at all. I think we failed if those materials get 
in. Let's understand that the residents around the Port of Los 
Angeles, who live in my congressional district, are at risk if 
we find a container there that includes some sort of 
radiological bomb.
    Central to success on port security and the war on 
terrorism in general is better intelligence and better 
technology. These two coordinates apply as much to immigration 
and border points-of-entry as they do to port security. Let me 
make that point again because I do worry that when we pass this 
excellent legislation--and we will--we may push the terrorists 
to find other ways to get bad people and bad material into 
America. So it is important that we think strategically about 
the whole issue of entry into America.
    We have to make our ports safe, but we also have to make 
our other borders safe, and in that connection, I would just 
observe that building bigger walls is not an adequate answer. 
Finding ways to get better intelligence on who is trying to 
come here,or what they are trying to bring here and stopping 
those people and those things is a much better strategy for 
true border security.
    Good maritime security measures have been introduced in the 
past, I know, many of them in the House, and they have 
languished. But now, finally, Congress seems appropriately 
focused, and as you heard from Congressman Lungren, in the 
House we have already had subcommittee markup, and we are 
poised for full committee markup in a few weeks. To my Senate 
friends, you should know that this is nothing short of a 
legislative miracle.
    Time is of the essence. I am glad you are going to try to 
catch up with us. [Laughter.]
    Good luck. The terrorists are not waiting on the 
legislative schedule, and nor should we.
    Thank you very much for inviting me to testify.
    Chairman Collins. Thank you so much for your testimony and 
your extraordinary leadership.
    I want to thank this entire panel for being here today. 
This is evidence that when confronted with a serious threat to 
our homeland security, we can work together across the aisle, 
and even more remarkably, across the Hill--with the House and 
the Senate working together. I am very pleased that we have 
such a strong team leading the way, and I am convinced that we 
will see success this year. Thank you very much for being here.
    I am now going to ask our second panel to come forward. Our 
second panel is really just one witness. It is Deputy Secretary 
Michael Jackson. He was confirmed by this Committee last year 
to serve at the Department of Homeland Security, and we look 
forward to hearing his comments today.
    Senator Murray, I understand that you are going to stay for 
part of the hearing. If you would like to join us up here, we 
would be happy to have you do so. We would even let you sit on 
the Republican side if you wanted to. [Laughter.]
    I guess that would be too traumatic. [Laughter.]
    Secretary Jackson, welcome, and you may proceed with your 
testimony.

  TESTIMONY OF HON. MICHAEL P. JACKSON,\1\ DEPUTY SECRETARY, 
         UNITED STATES DEPARTMENT OF HOMELAND SECURITY

    Mr. Jackson. Thank you, Chairman Collins, and thank you, 
Ranking Member Lieberman. I am grateful to be included in this 
testimony, and I am very grateful for the work that you are 
doing in this Committee.
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    \1\ The prepared statement of Mr. Jackson appears on page 69.
---------------------------------------------------------------------------
    You have talked about the intersection of interest and of 
will and of commitment to make a bill that the House and the 
Senate share. I just want to tell you today, and to reiterate 
throughout my appearance here, that the Administration shares 
your commitment to improved maritime security, to make a 
difference with this legislation. We have been working closely 
with your staff for months on it, and we are committed to 
continue to help you craft as strong a bill as possible for 
passage and to improve our transportation security in the 
maritime world.
    I will not reiterate the importance of making increased 
security here. I would like to say that we are very grateful in 
particular for this legislation, as well as the legislation in 
the House, because it has helped us focus the interest and the 
commitment of our Department and of the Congress on a common 
set of goals and objectives, and for that, I think we have made 
good progress.
    We have made, however, and I want to say for the record, 
transformational improvements since September 11. I agree with 
Senator Coleman, we have done a lot, we have not done enough, 
there is more to do. I will just say it simply and stop. There 
is more to do. We are prepared to roll up our sleeves with you 
and get this done.
    I would like to talk particularly today then about the path 
ahead and to start with a discussion of some of the principles, 
which the Administration and the Congress, I believe, share in 
common as we approach this, so that we can find a template, an 
approach, a basic set of principles in agreement, and then 
flesh out those principles to make programs that are stronger 
and to accomplish the objectives that you have laid out for us 
today.
    First, I want to talk about risk. The first principle--and 
it is one that has been stated here in this Committee today--is 
that we have to talk about risk and some sense of starting 
where the highest risks are. As an Administration, our programs 
have been designed to start with the question of the nuclear 
and weapons of mass destruction risk. That is the starting 
point.
    Second, a layered system of security, a strong layered set 
of interlocking tools. I think this is the most important part 
in a way for us to understand, to get our brains around, how to 
pull these pieces together in the legislation and in our 
programs. No one single thing will be sufficient in and of 
itself to give us the security that we need in this maritime 
domain. We have a system of interlocking tools, and single-
point failure is reduced if we have multiple layers of security 
working in concert with each other. The security is seldom 
adequately delivered via a single silver bullet.
    Next. It begs the obvious, but this is a global supply 
chain. It serves multiple different economies and governments, 
and it is a series of interdependent private sector driven 
businesses, so a second doctrinal component of our cargo 
strategy has been, where possible, to push security out, to 
push the borders out. So I think that is something that is very 
much embedded in this legislation. We are fundamentally in 
alignment with you there.
    Close partnerships with the private sector are a third 
component, indispensable to make this work.
    A fourth component, we have to strengthen government-to-
government partnerships. When we talk about the Container 
Security Initiative, as an example of our government-to-
government partnerships, we have to understand that we cannot 
control everything they do. We have to work cooperatively with 
them, and it is the same thing with the private sector when we 
work on a program like C-TPAT, which is voluntary. We have made 
tremendous strides with the private sector. I believe they have 
a strong commitment to improve security, so we have to leverage 
both the public, foreign, and the private relationships as 
well.
    Let me try to just divide where the working product has to 
hit. There are four basic areas that we have to work on in this 
enterprise: First, vessel security; second, personnel security; 
third, we have port facility security; and fourth, we have 
cargo security. So these four areas, cargo, people, facilities, 
and the vessels themselves, we have to work on those four sets 
of issues domestically and abroad, so you basically have a grid 
with 8 cells in it, and we have to fill in programs, processes, 
and tools to help us at home and abroad to strengthen this.
    I would say again, this legislation, I believe, generally 
tries to look across that range and find appropriate tools to 
create this system of systems.
    So let me just say a couple of words about where the 
Administration thinks we can get the highest return in the 
short term and where we would like to focus. Again, I think 
these are things that the Committee has found also to be high-
priority items.
    The first of these is in an area that we have aggregated 
under the rubric ``secure freight.'' It has two essential 
parts, first, better targeting, and second, enhanced inspection 
tools.
    On better targeting, we believe, as an important tool, that 
the Department's Automated Targeting Systems run at the Customs 
and Border Protection is an indispensable tool. We have made 
tremendous and strong growth in using this tool to screen all 
inbound cargo. We use this tool to screen and then do a 
profiling of risk for 100 percent of all inbound containers 
into this country. We assign scores for containers of high 
risk, and we then inspect 100 percent of all the high-risk 
containers. The next generation tool that we would use here 
would give us, and the ATS system, a more rich and deeper 
profile of the prehistory of a container move. Where has the 
cargo been? Who has touched it? What information do we have 
about it from order to order fulfillment, to the intermodal 
supply chains that touches that container as it moves across 
the globe. Today there are resident, and multiple different and 
non-connected businesses, information about this prehistory.
    I believe it is possible, working in the right way, to 
aggregate that data, fuse it, share it globally, not only for 
containers that are bound for the United States, but to create 
a true global switch so that we can try to begin to get our 
arms around a close-loop system in which governments who have 
containers inbound have the opportunity to evaluate a richer 
and deeper prehistory of this to score that risk as they deem 
fit and to take measures as appropriate to inspect it. This is 
a natural extension of what we have done. It is a big idea 
here, but it is not an idea that cannot be delivered in, I 
think, a reasonable timeframe.
    I would say, particularly to Senator Murray, that it builds 
very much on the initiative that you helped launch after 
September 11 to begin to probe supply chain weaknesses and to 
work with that data to help us build the next generation of 
tools, so for that I am very grateful.
    I will tell you that before I took this job at the 
Department, I was invited by the Department to come talk about 
cargo security, and this was the area in a speech, which I was 
grateful to be asked to give to the people who are now my DHS 
colleagues, that I identified as the primary point and the 
focal point for us for next-generation tools.
    Next, as part of secure freight, we need enhanced 
inspection tools. At home, again, inspection tools at home, 
inspection tools abroad. At home, our target is to have 100 
percent inspection of all containers that are transported by 
truck or rail from a U.S. port into the interior of our 
country. Abroad, our goal is to increase materially the number 
of containers inspected by radiation detection tools and by 
non-intrusive detection tools such as large X-ray devices. The 
Domestic Nuclear Detection Office, which we have created at the 
Department and which this bill authorizes formally, has a vital 
role in making that process work.
    I would tell you that Secretary Chertoff was in Asia last 
week on a trip and was able to look at the Integrated Container 
Inspection System pilot in Hong Kong. He comes back with 
enthusiasm about the opportunities for this. I would just say 
after extensive discussion with the industry about the so-
called ICIS pilot, we believe that its underlying technology 
and business concerns are very valuable and possible as a way 
to take, again, a next-generation and substantial leap so that 
we can use those tools, multiplexing the images into the United 
States and look at that inspection data, along with our 
targeting data, and have a much richer and deeper profile of 
what's headed our way.
    And, Senator Coleman, your Subcommittee has done very good 
work. I was grateful for the chance to talk about this 
particular topic with you last week.
    Finally, on the high-priority list, in addition to secure 
freight, is TWIC. Let me just say we have last week published a 
request for qualifications. There are three moving parts to go 
from where we are today, which is, we have completed a pilot 
phase of this work. We are now moving straight into deployment 
nationwide with the TWIC program. It has three moving parts. 
One, it requires regulations from the Transportation Security 
Administration (TSA). Two, it requires cognate rules by the 
Coast Guard. And three, it will require some procurement work 
so that we can bring in the tools for card production and 
distribution, for intake management, and for the back-room 
processing tools that we are going to need to make this a 
nationwide program.
    I think we have a good architecture. We have a path ahead. 
It's going to be a balance, but it is a very aggressive 
commitment. Secretary Chertoff has made it very clear to his 
team, do it, get it done, get it in the street, get it going. 
And I promise you, that is where we are headed. We are moving 
all three of those components at warp speed through the 
process, through the regulatory process and through the 
procurement process, and I am going to be very pleased to come 
back to this Committee and show you the results of that in the 
weeks ahead.
    Finally, I'll just say a quick word about the GreenLane 
Maritime Cargo Security Act. We believe that this proposed 
legislation reflects a great deal of solid agreement, as I've 
already tried to indicate, and we are committed to trying to 
work with you to close any gaps we have, to refine any places 
where we find disagreement, and to work with you as you move 
this through your Committee and to the floor.
    We have already talked about a core component part of your 
legislation, which is next-generation Automated Targeting 
Systems. We believe that the vision that I have just briefly 
outlined is in alignment with you and will help do just that.
    On the movement of radiological material, which is a key 
part of this legislation, we are in alignment in the core with 
you. We believe that the deployment strategy, both at home for 
getting to 98 percent inspection with some random inspection of 
the remainder on a short path by the end of next year, will get 
us where we need to be. We can accelerate this a bit. We are 
trying very much to push that as much as we possibly can to get 
that penetration there and at our land borders.
    We think the GreenLane concept in principle is very 
important. I would just say a few words about it. I think that 
it is important to retain some flexibility for a voluntary 
program to define the terms and conditions of this GreenLane 
third-tier type approach. We believe that giving carrots and 
sticks, as has been spoken about already today, is important. 
The industry has to find sufficient motive to participate with 
us, and having the benefits of voluntarily submitting to a more 
rigorous security profile. We will need the chance to be 
nimble, and we will need the chance to be responsive to 
particular attacks or incidents in a post-response manner. If 
it is an explosion offshore, the response would be different 
than if it is an attack at the fences, at the gates of a 
terminal facility.
    So we need to have the flexibility, as you think through 
the GreenLane privileges, to be able to work at that in an 
effective way.
    We are grateful for your formalization of the Under 
Secretary for Policy. We are also very much in agreement on the 
need to create in the Department in our policy shop a cargo 
security position, a Director of Cargo Security. I will tell 
you that shortly after I came on board, I started trying to 
recruit a couple of stars from the industry. We are committed 
to doing this, and we are grateful for the legislation that 
makes it formal.
    On the port security grants, we have a difference of 
opinion on the structure of port security grants. We are, as an 
Administration, committed to a $600 million transportation 
infrastructure program, and the targeted infrastructure program 
that we have proposed.
    Let me just explain briefly why we think that flexible 
program is a better alternative to simply earmarking in the 
modes of transportation for transit grants, port security 
grants.
    Last summer, after the attack in London, we were together 
worrying over how best to focus our funds and our resources, 
our limited resources, in the best possible way, and after the 
Dubai Ports World discussions that we have had here in public, 
we are now showing a lot of attention on the maritime world, 
rightfully so, appropriately so, absolutely necessarily so. But 
what we think is the principle of being able to allow State and 
local leaders and terminal owners in multiple different types 
of facilities to have some flexibility to be able to align 
those resources with the highest risk is a valuable tool. We 
have talked about the importance of having risk-based 
investment. This gives our colleagues at the State and local 
level the flexibility to say, ``I'm concerned more about ports 
this year. We're going to put some more focus on that.'' They 
can also use UASI, State grants, and local grant money in this 
area. They have not historically used as much as we think they 
might and could and should, perhaps, in some cases.
    But we are looking overall for a principle of targeting on 
highest risk and giving flexibility to be nimble as the threat 
evolves over time. When we lock these massive programs years in 
advance and then drive to an agenda, it sometimes reduces the 
flexibility that we have to be nimble and responsive to the 
threats that we face in the world ahead.
    So I would stop there simply and say thank you very much 
for the opportunity to continue our work with this Committee, 
and I am happy to answer questions that the Committee might 
have on our programs and your program.
    Chairman Collins. Thank you very much for your testimony. I 
am going to interpret your testimony as an endorsement of the 
GreenLane bill with a few qualifications, and I think my 
colleagues here would all agree with that interpretation. If 
you would like to disabuse me of that, I will give you an 
opportunity to do so.
    Mr. Jackson. Madam Chairman, I want to be as close to this 
Committee and our work together as we possibly can, and what I 
would tell you is we are very close around very many 
particulars and very much of the philosophic approach that this 
bill brings to the table. We have some changes, some edits, 
some suggestions, some differences. I will try to be clear 
about that here today and also to have our staff line-by-line, 
word-by-word, go over your latest draft to make sure that you 
have the benefit of our counsel as best as we can give it to 
you.
    Chairman Collins. Thank you.
    Mr. Jackson. But substantial alignment, and I think that is 
a very good thing.
    Chairman Collins. I think it is as well. I want to pick up 
on an area of disagreement, and that has to do with having a 
line item for port security grants. The Administration has long 
recognized the importance of enhancing our port security, and 
yet, the Administration's budget continues to lump port 
security grants into an overall infrastructure grant program. 
That is an approach that Congress has rejected in years past, 
and I am quite confident will do so again this year.
    It seems inconsistent to me for the Administration to say: 
Yes, port security is a priority. It is a major vulnerability. 
We need to do more. We have developed all these programs such 
as CSI, C-TPAT, but, no, there should not be targeted funding 
for port security grants.
    We have made the $400 million that we proposed a 
competitive program to address some issues that the 
Administration has. We know that the American Association of 
Port Authorities says that is needed each year to just meet the 
goals of the Maritime Transportation Security Act. If you lump 
port security in with other infrastructure needs, you risk not 
allocating any funding to port security grants or insufficient 
funding. I do not understand why the Administration is so 
resistant to a targeted program, given the overwhelming 
evidence and advice that we receive from terrorism experts. We 
do need to put more resources into this area.
    Mr. Jackson. Let me try to summarize it this way. We share 
the conviction that infrastructure investment in ports is a 
vital priority for the country, and in fact, what we have 
done--and where I think the difference is--is how best to make 
those investments. The principle that we are trying to press 
very hard is the principle of flexibility and nimbleness. We 
authorized these programs in a siloed fashion years in advance 
and spend a year trying to get the money out the door, the 
applications reviewed in a systematic way. And what we are 
saying is we think that by giving States and locals more 
flexibility about how they take core infrastructure programs 
and their grant money associated with it that we can be more 
responsive to the threat itself, that we will have a more 
threat nimble system of grants.
    In fact, the Administration has proposed more money, almost 
double the amount of money for the individual programs this 
year. We did the same thing last year. We proposed, aggregate 
them, give us some flexibility, and we are supporting more 
money. That will allow for the particular needs to be served, 
we think, and it will give us a stronger tool that is 
responsive to the terrorist threat. The terrorist threat is 
driven by our intelligence assessments, as Representative 
Harman spoke. We have to have tools in our tool kit that do not 
take 2 years to change course when we see that threat change, 
and that is the core reason for our program.
    I will tell you, if the Congress should decide--we did 
propose it last year, the Congress decided not to support it. 
If the Congress decides not to support it, we will make a 
targeted marine port security program that is as strong and as 
good as we can make it, and we will do so with the funds we 
have available.
    Chairman Collins. As you mentioned, Congress did reject 
that approach last year and instead provided $175 million for 
port security grants for this fiscal year. We are deep into 
this fiscal year, and yet the Administration still has not 
provided guidance, and as a result, not a dime of that grant 
money has been awarded. Why has that been held up? Does that 
reflect opposition to the concept? What is the problem?
    Mr. Jackson. No. It does not reflect opposition to the 
concept, and I believe that the release of the grant guidance 
is imminent. I get my first briefing on the details of it this 
week, and the next step out the door is a very short step out 
the door when the Secretary and I have had a chance to review 
it. We are trying to make sure that it is philosophically 
aligned with the risk-based concerns that you have articulated 
and that are animating the core programs of the Department. It 
will be very soon.
    Chairman Collins. I am pleased to hear that, and I hope you 
will keep us informed----
    Mr. Jackson. Yes, ma'am.
    Chairman Collins [continuing]. Because I do think that is 
an inordinate delay.
    When I was in Seattle, I saw the radiation portal monitors 
that were used to detect radiation, and they worked pretty 
well. There were some false positives, but they did not delay 
the trucks that were rolling through them, and I thought it was 
an effective system. Our legislation would require that there 
be screening for radiation of all containers entering our 
seaports within a year of enactment. But I have to tell you, as 
I was looking at the system, I was struck by the fact that it 
is really too late by the time radiation is detected in 
Seattle. If in fact one of those containers includes a nuclear 
weapon or the makings of a dirty bomb, by the time it is 
detected in Seattle, the risk, the explosion may already have 
occurred. What are we doing to push out our borders to install 
these radiation portal monitors overseas so that before the 
containers come to our shores, they have already been screened 
for radiation?
    Mr. Jackson. That is an excellent question. Let me try to 
do a couple of layers of that. First, the first important layer 
of defense is the screening process, the container profiling 
that we do in our Virginia targeting center at CBP. That is a 
two-part process. It involves all of the electronic data we 
have about the given container. It involves a massive history 
file that allows us to detect patterns, look at trends, find 
areas to probe to understand rules that will allow us to use 
algorithms. There are many of these rules that drive a score 
for us to profile the container. That is Level 1. If you have 
not had an opportunity to see this, I volunteered to Chairman 
King yesterday to take him out and show him because it is an 
impressive set of tools, but we can also show you what the next 
generation looks like. That is Level 1.
    Level 2, the ICIS program that I mentioned is an example of 
the industry, I think, that has very responsibly volunteered to 
tax themselves, to assess a fee on themselves to put the 
radiation portal monitors in the inbound part of this equation 
overseas. We are talking with that industry. As I said, my boss 
just got back last week from an actual look-see at it and 
discussion, and we have some significant hope that we can work 
with the industry in a way that might see this work across the 
globe in many ports.
    Will it be 100 percent overnight? No, it can never be 
turned on like a switch, but we see this as a very promising 
tool. I do not think the tool that is currently working in Hong 
Kong is the panacea. The technology is not as complete as it 
can be. That is what DNDO's research is producing for us, a 
next generation spectroscopic tool that allows us to target 
which particular type of radiation is there so that we can, 
with a more fine comb, understand whether we have a problem or 
not. But we have current generation, next generation, with 
afterburners blowing to move into the ports and to our land 
ports. We have the concept of multiplexing those images, in 
other words, taking those images and sending them to the United 
States so we can align our targeting work with the ATS, with 
the visual image, the inspection that is overseas, and together 
making a much stronger connection there. So that is a business 
concept that secure freight proposes for this next generation 
of pushing the border out.
    It is, I think, a powerful idea, especially if we can take 
the enthusiasm of terminal operators and port owners and ocean 
carriers around the globe, shippers, to help us assess the fees 
that they would make to do this. We, obviously, would have to 
have an investment and make a system that would work in a more 
global way.
    Chairman Collins. Thank you. Senator Lieberman.
    Senator Lieberman. Thanks, Madam Chairman. I mean I know 
there is general rumoring around here that you and I spend too 
much time together, having worked together, as was shown in 
your first two questions, and I thank you for them.
    They are the first two I was going to ask. I am not going 
to repeat them, but I agree totally with the Chairman on the 
port security grant program. This is a real priority. You 
understand that and have stated it very clearly today, this 
bipartisan feeling of Congress.
    You know, people ask me at home, ``What's the thing you 
think we haven't done enough of yet to protect our security?'' 
And I always start with port security. If we just lump the 
money together, there is a danger that we all worry about, that 
there is not going to be the money there for meeting this 
priority. So I was glad to hear you say at the end that if this 
is our will in Congress, you will do your best to carry it out.
    The second line of questioning, we both shared the same 
reaction. I was waiting to hear you say the Administration 
endorses the GreenLane proposal. I did not quite hear that. I 
heard about substantial alignment, which is good because we do 
not have to go to one of the auto places to get aligned.
    But now, let me ask you this: Where are we out of 
alignment, just either generally or specifically? What are the 
areas where the Administration is not happy with the bill, 
where we have to work together?
    Mr. Jackson. Well, I will take on the GreenLane itself, 
that particular part of it. I think that we need a little 
flexibility to discern what the incentives should be and how 
they align with the C-TPAT program. That is something, I 
believe, that is a bridge that we can cross with some good and 
short-term work here to design a way to give us the flexibility 
to figure out in a post-incident fashion what would constitute 
the privileges that we would want to award to a carrier to 
bring containers in on a more expedited basis. That is an 
example of something that I think deserves a little bit of 
further work.
    On the funding issue about the dedicated funding, I have 
some work to do with my OMB brethren to opine about that in a 
formal and final fashion, and I tell you that I will make the 
commitment to work with my colleagues in the Administration on 
that issue. But I think the principle of spending money on 
reducing port risk and port vulnerability is one that you would 
see DHS in agreement with you on.
    So there are examples of that. There is another example 
about some of the legislation in the House and the Senate, I 
think, points to performance indicators. I am a vigorous 
advocate that we measure and report to you what our goals and 
objectives are and how we run our programs and we do so 
routinely and make it quite transparent, our performance. When 
we fail, we fail. When we succeed, we succeed.
    But, for example, putting a deadline of one year on getting 
radiation portal monitors installed is unrealistic based upon 
the production capabilities and also trying to balance the idea 
that we are moving to a new generation. I really urge you, if 
you have not had the opportunity, to be briefed in more detail 
about this next-generation leap that DNDO is doing. And with 
the support of Congress, with a half a billion investment in 
this office, to move to a much more strong tool.
    And so this is the constant tradeoff about risk and speed 
of technology and innovation. We are trying to balance the 
current generation of tools and the next-generation deployment 
and to bring these two into harmony in a way that gets us a 
stronger set of tools out there for the work we have to do. It 
is a refinement. We can get to, for example, 98 percent 
coverage on exit from our ports in the United States into the 
country of trucks carrying these containers out by December of 
next year. That is the plan. And we would say to get that last 
2 percent is a massive investment which should not probably be 
spent. We can tackle that 2 percent with portable radiation 
detecting programs that come into a small port that has very 
low volumes on a given day and, with a random basis, make such 
a presence in that port that we would have a deterrent effect.
    So there are details like this, Senator, that I think we 
should work through with you.
    Senator Lieberman. I appreciate the answer. Those are 
differences, but they are bridgeable. Those are not chasms that 
cannot be bridged, and I think the sooner we do that, the 
better everybody will be.
    I want to pick up on, in the time I have remaining, your 
last point. Under the DHS Secure Freight Initiative, you have 
stated the Department goal, which is to inspect 100 percent of 
all containers coming into a U.S. port for radiation and 
overseas to materially increase the number of containers 
inspected by radiation detection tools and non-intrusive 
inspections, including large-scale X-ray devices. And today, 
you again stated the goal of 98 percent inspection.
    But as we have been educated on the Committee and as the 
Permanent Subcommittee on Investigations (PSI) last week heard 
from Steve Flynn again, a very strong argument was made that 
unless we have both the portal monitors and the non-intrusive 
X-ray equipment, we are not really inspecting. Am I right that 
the 98 percent goal you talked about is for portal monitor 
inspecting?
    Mr. Jackson. Yes, sir.
    Senator Lieberman. So as I understand it--you correct me if 
I am wrong--the portal monitors inspect a container, and they 
can detect radiation. But they cannot detect the nightmare 
package of a dirty bomb or a nuclear weapon that is shielded 
because the shielding is there to stop the radiation from 
coming out. And that is why the non-intrusive X-ray equipment 
is necessary because it can see the shielding, and once it 
does, presumably, the container gets pulled off and gets 
physically inspected in some way.
    So my concern is that the budget that DHS has given us for 
the coming fiscal year includes $178 million for additional 
radiation portal monitors, which does move along at a good 
pace, and I appreciate that, but just $33 million for 
additional non-intrusive inspection equipment. So I wanted to 
ask you, do you agree that we need both types of technologies 
to ensure that neither nuclear or dirty bombs are able to be 
smuggled into the country, and if so, why are we not 
appropriating up to that level to achieve that level of 
protection as soon as possible?
    Mr. Jackson. Both tools are valuable tools. They are not 
the only tools that help us address the risk that you are 
presenting.
    The first point, again, is the layered security idea. 
Better targeting and a better profiling of the container is the 
starting point for making this assessment.
    Senator Lieberman. And that is the kind of computer work--
--
    Mr. Jackson. That is the ATS--exactly, yes, sir.
    Senator Lieberman. And that is great.
    Mr. Jackson. So that is part one.
    Senator Lieberman. The beginning.
    Mr. Jackson. Part two is then we would inspect all of those 
containers with both tools for the high-risk ones that we have 
identified as high risk. We would randomly inspect other 
containers both for radiation and using the large-scale X-ray 
machines so that we have some check and randomness about the 
process of looking with both tools. And then the idea of the 
radiation portal monitors on exit is, again, aiming to the goal 
of 100 percent of those containers leaving having this 
additional check. In other words, it was not--we cannot inspect 
literally through these two tools everything coming off of a 
ship without fundamentally changing the business design of port 
operations, as I think Senator Murray mentioned. But as we get 
these tools and test them in configurations where we can make 
them intersect in ways that balance security and mobility, we 
are eager to deploy them in that fashion. That is why the idea 
of the ICIS program overseas inbound of trying to find a way to 
align in the inbound lane the two things would be another layer 
of security.
    Senator Lieberman. Let me interrupt, with thanks, because 
my time is up. But as I understand the Administration request, 
it will bring us to a point where, by the end of 2007, every 
port in the United States will have a portal monitor.
    Mr. Jackson. It will be by that point 98 percent of all the 
containers leaving a port would be done.
    Senator Lieberman. OK. Pretty good.
    Mr. Jackson. And then, sir, in those ports that do not have 
the lane equipment, there will be handheld devices; there will 
be random inspections using portable tools. So there will be a 
concept of operations that we can move through in those ports 
as well.
    Senator Lieberman. But the $33 million requested for non-
intrusive inspection equipment, which can detect the shielding 
on a potential radiation-containing container, will only cover 
five prototype systems. So that is leaving--in other words, on 
this schedule, when do we get to a point where we have enough 
equipment to see the shielding that may be covering a dirty 
bomb or a nuclear weapon?
    Mr. Jackson. Well, again, we are doing that for every one 
of the high-threat containers that we identify. I would like to 
be able to get you a schedule, if permitted.
    Senator Lieberman. I would appreciate that.
    Mr. Jackson. That will give you a deployment schedule for 
future years, commitment of large gamma ray, X-ray type 
machines.
    Senator Lieberman. Bottom line, I think we are not spending 
enough fast enough in this area, although you are making 
progress, and I thank you for it. Thanks.
    Chairman Collins. Thank you. Senator Coleman.
    Senator Coleman. Thank you, Madam Chairman.
    Secretary Jackson, the core foundation for our inspection 
program really starts with container profiling. We put a lot of 
stake in the targeting system, the computer program.
    Just a couple questions. On the panel at my hearing last 
week, we had somebody from the World Shipping Council. They 
raised a concern about data, about entry data, and apparently 
before you can pick up a cargo container, once it is in the 
country, there are certain entry data that you need. They are 
concerned--and apparently they indicated that they have raised 
this with DHS--that this is the kind of data that needs to be 
looked at before the container comes into this country. And 
there was still concern that it was not. So, yes, you get it, 
but the comment by the Chairman was basically saying that it is 
already in, the container is already here. Obviously, we are 
safe when we push it back.
    So my first question really has to do with the data that we 
have and your sense of confidence that it is sufficient to make 
the critical and profound judgment about whether there is any 
risk in this container.
    Mr. Jackson. I am going to say exactly what you said in 
your opening remarks. We have made tremendous progress here. 
There is a lot more to do so. So there are two parts of the 
data filing equation. One is the 24-hour notice, 24 hours 
before lading, before we put a container on a ship, they have 
to give us a core number of variables--I believe it is 22, but 
I may be wrong by a small amount--variables that come in that 
help us score risk. That again is pinged against a large 
database and a big history that helps us understand where these 
variables tease out risk. So the combination of those two 
things help us profile.
    In addition, before arrival into the port but after the 
ship has left overseas, we get further data relating to the 
customs transaction. That data is gone back again and fused 
with the Coast Guard data, which was receiving information 
before arrival, both about the ship and the mariners on the 
ship.
    So we take the ship, the mariners, and the cargo, and we 
profile, screen, and assess when it is farther out, before it 
has left, and also shortly before arrival.
    Your core question goes to, I think, the importance of 
Secure Freight. We need more data elements to get a richer stew 
of data about the pre-history of that container. There is such 
data in the supply chain out there. We are just not getting it, 
and we are not fusing it as part of this risk analysis. By 
getting additional data, we can move from this level to this 
level, and we should do exactly that.
    Senator Coleman. And my concern is that the whole system 
really, which is a targeted system, essentially rests on that. 
So the concern that I have raised before is the validation of 
ATS. Do we know that it is working? We look at high-risk cargo, 
but a lot of cargo that goes by is not high-risk. Are we 
confident that we are getting the high-risk stuff, that we are 
not missing something?
    And so I continue to have this concern about the amount of 
data, the type of data, when we get the data, since so much 
rests on the fundamental early determination: Are we looking at 
something with risk?
    Mr. Jackson. Yes, I think we are doing a very good job. I 
do not think we are doing a perfect job. I will tell you, we 
will never do a perfect job. There is no risk assessment engine 
tool or model known to man that is perfect. We are all about 
reducing risk, and you understand that very well. I think we 
can do more here, and I think we have to take a fundamental 
business model leap. Scraping the waybill electronically and 
assessing what is there is not where we need to be. So what we 
are going to have to do is something that is more complex, more 
time-consuming, but I think more effective, which is to take 
the various different supply chain partners, the people who 
order goods to be imported, the people who fulfill those 
orders, the subcontractors that are associated with the 
fulfillment, the drayage firms that move it out of a point of 
manufacture and into a port; if it is an intermodal move, the 
rail touch, the customs brokers, the 3PL people who manage all 
this. All of these entities have data. We have to find a way, 
without causing the economy to grind to a halt, to be able to 
fuse that data in some intermediary organization between the 
supply chain actors and the governments. And if we can fuse it 
appropriately and then spread it to the government, we will tap 
into our A system. We will get a more rich analytical tool to 
evaluate that data. We will also, if we create this right as an 
intermediary between us and the private sector with some 
investment from the government sector to help make it work, 
prove its concept, audit and monitor its activity, we can then 
create an international tool.
    Right now we have been, in the first generation after 
September 11, talking almost exclusively about what the United 
States can do to protect ourselves. We need to take this to a 
more global basis so we can help our colleagues around the 
globe understand they need to be doing risk profiling and that 
they will contribute to the store of data that is being used to 
manage this.
    So I think there is a new business model. I am very excited 
that it has an opportunity to be transformationally helpful in 
improving our capability.
    Senator Coleman. My time is running short. I am not going 
to get to the follow-up, but just----
    Mr. Jackson. I know your question. I would be happy to 
answer it.
    Senator Coleman. First, I hope it is our goal that we are 
inspecting, that we are having some kind of review of all high-
risk cargo before it gets to our ports. That needs to be the 
goal. And, second, we need the cooperation of foreign 
governments, and we have to push them to do this or else tell 
them we are not bringing the stuff into our country. There are 
still too many high-risk containers out there that we have 
identified as high-risk and that we have asked to be inspected. 
We do not have that cooperation today, and I think we have to 
demand it. And if we are not getting it, just say it is not 
going to come here until that takes place.
    Mr. Jackson. Madam Chairman, can I give just a little bit 
of a gloss on Senator Coleman's concern? I was not adequately 
capable of answering your question when I spoke to you last 
week. I will try another shot at it, and then I would be happy 
to go further at another time.
    The data that Senator Coleman has pointed to shows a 
question about what amount of cargo that we flag for a foreign 
country is actually being inspected in a CSI port. And here 
there is a distinction which my CBP colleagues have helped to 
educate me about.
    There is a referral and a request. When we work in the 
targeting center, we first begin to aggregate data, and we 
begin to look at a container that may be in a CSI port and has 
not yet been loaded and sent. And we frequently have a 
referral, as it is called in CBP, in which we probe our 
colleagues in the Customs Service of another country and say, 
for example, there was an inadequate amount of data about the 
shipper itself. We have not seen him shipping things into the 
United States. We do not have that component of the risk--which 
is just one component of the risk work--fleshed out in any 
meaningful way. So it may turn out that the customs people in 
another country say, ``We have a lot of data about that, and 
here is that data.'' Our CSI colleagues find it, and that 
lowers our concern about that particular container.
    When we complete that assessment, we identify containers 
and have what is called a request to look at that container. 
The requests are averaging in the area of about 89 percent 
fulfillment prior to a container coming our way. So when we 
perfect an investigation from referral to request--and I 
believe that this data that you had showed referral data rather 
than request data--we are getting a much higher compliance 
level. Is it 100 percent? No. Should we look for 100 percent? I 
believe we should aim as a goal for that. But you see here we 
are doing very much more, and when it gets to the United 
States, 100 percent of all these containers that have not been 
reconciled abroad are immediately put into the system for 
reconciliation.
    Senator Coleman. Thank you, Madam Chairman.
    Chairman Collins. Senator Lautenberg.
    Senator Lautenberg. Thank you, Madam Chairman. I apologize 
for coming in so late. We had another committee hearing, and it 
took more time than we expected, so I missed an opportunity to 
hear the Secretary's statement and some of the questions. I 
hope none of this is redundant.
    I am going to use part of my time to make this statement. 
The proposed Dubai Ports World deal stirred up a lot of 
controversy, particularly because the Administration handled it 
so poorly. It should have been investigated more closely before 
it was rubber-stamped. The Dubai Ports World fiasco woke up the 
American people to the fact that a good job has not been done 
protecting our ports since September 11.
    I was Commissioner of the Port Authority of New York and 
New Jersey, and I have been sounding an alarm on port security 
for many years. Now, I understand our colleague and friend, 
Senator Murray, knows how vulnerable our ports are, and I 
commend her for addressing the issue. Unfortunately, I do 
believe there are some major problems with the bill before us 
today.
    Instead of meeting the 9/11 Commission demand that security 
grants be based on risk, it would return us to the days of the 
less responsive distribution of funds. Now, I worked hard to 
change the system for port security so grants would go to 
threatened areas where the impact would be the greatest. And I 
cannot support any measure that takes a step backward in this 
regard.
    The measure also would continue to outsource many important 
links in the security of our ports by relying on voluntary 
actions by private companies. Additionally, I am disappointed 
that the bill once again extends the deadline for DHS to 
develop critical standards for container security.
    So when something is this important, you have got to meet a 
deadline, and the job should already have been completed. By 
failing to meet its deadlines, DHS gives the impression that 
port security is not quite the high priority that many of us 
see it, and I certainly hope that is not the case.
    Mr. Jackson, what is the Department's view about port 
security grant programs being entirely risk-based in their 
distribution?
    Mr. Jackson. Senator, we believe that risk-based is the 
core of what we should be thinking about when we make these 
port security grants. As in the entire world of security, we 
can never address fully every single thing that might be a good 
idea. We have to triage in some significant way how to invest 
those monies.
    We have had an exchange about the idea of how to structure 
grants to try to drive it to a more risk-based model by giving 
States some flexibility, and that is the Administration's 
position. We will, however, in whatever form of grant program 
we have, as we did last year, put risk at the core of the 
equation.
    We had a program last year of port security grants, which I 
think did just that and made a very strong focus and 
improvement on analytical, measurable results that were derived 
from the people in our ports.
    Senator Lautenberg. I am not sure where you are going, Mr. 
Jackson. Does the Department view risk as the critical factor 
in distributing port security grants? Now, I heard the 
Secretary, Mr. Chertoff, say that he believed that is the way 
it ought to be done. He said it publicly several times.
    Mr. Jackson. Yes, sir, and that is how we did it last year.
    Senator Lautenberg. OK. And with the pending bill, do you 
see that same requirement to be in there?
    Mr. Jackson. I think the bill reflects an intent--which I 
cannot validate, and I would defer to the authors of the bill--
that would spread more money across a larger spectrum of ports 
and that is not in full alignment with where the Administration 
was, for example, in last year's port security grant program.
    Senator Lautenberg. In the bill it says the Secretary, 
acting through the Office for Domestic Preparedness, shall 
establish a grant program to ``fairly and equitably'' allocate 
Federal financial assistance. So that ducks the question, very 
frankly. It certainly does not emphasize it. And that is 
something--I lost in this Committee 15 to 1, so you can see 
where----
    Chairman Collins. If the Senator would yield on this point, 
and I will yield him additional time, the bill that Senator 
Murray and I have drafted establishes a competitive grant 
program. It is not an automatic entitlement for each port, so 
it is consistent with the 9/11 Commission and with what you 
said, so I think you have misread the bill.
    Senator Lautenberg. With all due respect, Madam Chairman, 
when I read this language--and I do not know what the criteria 
is for competitive opportunity. Does that mean competition will 
include the risk factors exclusively, or will it allow for 
other things as well?
    Chairman Collins. All entities that are subject to area 
maritime security plans under the Coast Guard are eligible to 
apply. But it is the Department's decision on who gets funded, 
and that is a risk-based decision. It is a competitive process 
that looks at the quality of the grant applications.
    Senator Lautenberg. Well, I regret to continue this 
discussion because I do not see it firmly coming down on risk-
based. And when I have 2 miles within my State declared to be 
the riskiest 2-mile target for terrorists in this country, 
abutting the port, less than 2 miles from the airport, Newark 
Airport, a giant airport, and we devote any of these funds to 
anything other than risk I think is less than a good 
perspective on how to protect ourselves. So we have this 
difference.
    I understand, Mr. Secretary, that you have been more and 
more involved in the Hong Kong pilot project, and hopefully, 
the target is to be able to scan all the containers that come 
in. Why haven't we at this point worked to develop more of a 
likelihood that we will have 100 percent screening as a result? 
Have these tests proved to be effective? Now, I know that you 
were discussing it, and I am sorry if it is redundant.
    Mr. Jackson. No, sir, Senator. I am happy to address this. 
I believe that the pilot in Hong Kong is a very promising 
business model and technology. It is not perfect right now. For 
example, the data in the pilot phase is simply retained and 
stored. We would need the data to be able to be networked and 
used on a real-time basis. There is not a technology impediment 
to that. We can make that happen, I think. And we need to 
strengthen the technology tools themselves and the business of 
how those are operated. We need a business operations plan that 
tells us how to inspect containers in a more aggressive fashion 
if they have been flagged for radiation. Again, I believe that 
can be worked through operationally to do it.
    So the sum is I consider this a very promising tool. The 
most important part that I omitted from that list was that the 
industry has in Hong Kong decided to assess a fee upon 
themselves to pay for this, and we again find that a very 
public-spirited and valuable way of helping us to accelerate 
this type of scrutiny overseas. And so we are in close 
conversations with the industry about that.
    My boss just got back last night from his trip overseas to 
look at this. We have talked about it this morning already and 
will be working it hard.
    Senator Lautenberg. Has DHS spent some significant funding 
on maritime container security, would you say?
    Mr. Jackson. Yes, sir, I think we are spending quite a lot 
of money. This year it is roughly $2.5 billion in the 
Department for maritime security all up. If you take the period 
of time from fiscal year 2004 to fiscal year 2007, if the 
President's fiscal year 2007 bill were to be implemented, we 
would all up have spent $9.6 billion in that period fiscal year 
2004 to fiscal year 2007. That is the whole layer of security 
using all the tools that we are applying at DHS.
    Senator Lautenberg. Thank you, Madam Chairman.
    Chairman Collins. Senator Murray.
    Senator Murray. Madam Chairman, thank you so much for 
allowing me to join your Committee and for holding this hearing 
and for the excellent questions so far.
    I did want to just join with the Chairman's and Ranking 
Member's comments regarding the port security grants because, 
as an appropriator, I think we are very frustrated that when we 
do not delineate where this money is going to go, it gets lost, 
and we have seen that with the lack of funding for fire grants, 
for law enforcement training grants, for emergency management 
performance grants that all get lost if we do not specifically 
say that. In fact, Operation Safe Commerce, which we are using 
much of what we learned from that experience to write the 
legislation that is before us, when we funded that I actually 
had to hold up a nominee from the Department in order to get 
that funded, even though we had said the funds were going 
there.
    So I think many of us feel very frustrated that ports and 
cargo security has been sort of the forgotten stepchild of an 
agency that does have a tremendous amount on its plate, but 
which many of us see the port and cargo security as an item 
that we cannot any longer continue to ignore. And that is why I 
think we feel strongly that funding those and delineating that 
is extremely important as part of this bill.
    And, in fact, Operation Safe Commerce, I believe the report 
has been sitting on your desk for some time, and I would like 
to know when we are going to see that because that is essential 
for us to be able to have the knowledge to move forward.
    Mr. Jackson. I am not aware of the timing of the release of 
the report. I was told that we are close to a conclusion of the 
sum-up of the status of what we have learned so far in 
Operation Safe Commerce. I would be happy to let you know 
directly what the timetable of that is.
    Senator Murray. If you could give us that quickly, I think 
that is really essential for us to have that knowledge and move 
forward.
    Mr. Jackson. There has been, as you know, as a sponsor of 
this program, a fair bit publicly released. The last phase of 
it, I believe, is what has not yet been formally presented 
publicly.
    Senator Murray. We are waiting for that.
    Mr. Jackson. Good.
    Senator Murray. In your response to one of the questions 
from Senator Lieberman on what you may disagree with, you 
talked about the incentives for GreenLane post-incident. I 
would just ask you: If an incident occurred today in the Port 
of Seattle, for example, as I talked about earlier, how would 
you resume--I assume everything would be shut down. What would 
you do? How would you resume any kind of activity today?
    Mr. Jackson. Well, I am not going to dodge your question, 
but I will caveat it at one point by saying that a recovery 
plan discussed in full complexity ought to be something that we 
do in a classified environment so that we can preserve some of 
the core assumptions about what happens and not unduly expose 
our operational plan to those who might choose to do harm to 
the country.
    I would say in the structure of this is part of the 
maritime domain awareness work that we have done. We have 
drafted a plan on response and recovery. We did this in close 
coordination with a wide array of external parties that 
actually operate these businesses--our port security people, 
captains of the port, port operators, terminal operators, and 
others in the ocean carrier business and the shipping industry.
    So there is a concept of operations which has been drafted 
for this, and I would say that one of the keys is to decide 
what the particular incident was and what is a measured 
response to that type of incident. So let's say we have a Cole-
type of attack, which I believe is, in the hierarchy of 
maritime threats, not an inconsequential concern. We would have 
a different type of response to that, which would not, in my 
view, shut down commerce automatically in order to be able to 
respond to that type of incident.
    If we had another type of attack, a nuclear explosion in a 
container, that would be a higher level--and that is the 
scenario that you discussed this morning already earlier. That 
would be a higher level of response. Again, I am not certain 
that we would automatically shut down the entire global system. 
That is a step that I think we should take with some 
substantial consideration before we leapt to that conclusion 
that an attack is an automatic response there. But that would 
certainly be at the high end or the far end of the equation of 
risk and would require our most aggressive set of tools, 
lockdown and other tools to be evaluated for that response.
    Senator Murray. I think one of the holes that I know 
Senator Collins and I have talked about is the resumption of 
trade.
    Mr. Jackson. Yes.
    Senator Murray. Senator Coleman has mentioned it as well, 
and I think it is very clear that we need a very strong regime 
in place that we are all confident, whether it is an incident 
small or large, that we know who is in charge, who is going to 
be called on, and how that is going to be resumed. So that is 
why it is part of it.
    Mr. Jackson. In our substantial alignment comment, let me 
just say I think we are aligned on your concerns in the bill on 
that score, producing a plan and having the right type of 
opportunity to share both the public and a classified version 
with our authorizers and appropriators and other important 
committees on the Hill.
    Senator Murray. All right. In my few seconds left, you also 
responded about delineating timelines because technology might 
change as well, and I think all of us totally understand that 
there is a lot of great technology out there. But as someone 
who grew up without a color television because my Dad was 
always waiting for the better one to come along, I just think 
it is really important that at some point we make a decision 
and we move forward. And if new technology comes along, great, 
but do not let that be the enemy of the good. So I think that 
is important.
    I thank you, Madam Chairman.
    Chairman Collins. Thank you for your comments.
    I, too, grew up without color television, but it is because 
my father was colorblind and it did not matter to him. 
[Laughter.]
    Mr. Secretary, thank you so much for being here today. We 
do look forward to working very closely with you and turning 
substantial alignment into wholehearted support. So that is our 
goal, and I do hope that you will devote significant time to 
working with us because we do want to move this bill rapidly.
    Mr. Jackson. Good. You have my personal commitment to work 
closely with you.
    Chairman Collins. Thank you very much.
    I am now pleased to call forward our final panel of 
witnesses. These witnesses bring great expertise in maritime 
security and the security of the international supply chain.
    Captain Jeffrey Monroe is the Director of the Department of 
Ports and Transportation for the City of Portland, Maine. He is 
a valuable advisor to me on all issues involving our ports, and 
we consulted closely with him in drafting this legislation. In 
addition to his responsibilities at home in Maine, Captain 
Monroe also serves as the Chairman of the National Maritime 
Security Advisory Committee.
    M.R. ``Mic'' Dinsmore is the Chief Executive Officer of the 
Port of Seattle. I had the opportunity of meeting Mr. Dinsmore 
when I toured the port. He oversees the fastest-growing 
container port in the United States--that was an important fact 
that I learned during my trip--and he deserves much credit for 
its growth. I know that Senator Murray and her staff have 
worked very closely with him.
    Andrew Howell is the U.S. Chamber of Commerce Vice 
President responsible for the Homeland Security Policy 
Division. Mr. Howell has been the Chamber's principal spokesman 
and strategist on issues including transportation security, 
critical infrastructure protection, and cyber security, and we 
are pleased to welcome you here today.
    And, finally, last, but certainly not least, James Hoffa is 
the General President of the International Brotherhood of 
Teamsters. He has led this organization since 1998, and he 
represents a very important perspective on the issue of port 
security from the perspective of truck drivers and others in 
the transportation industry. And we look forward to hearing his 
testimony, particularly on the long delayed TWIC program.
    I thank you all for being here today, and I am going to 
exercise the home State prerogative and start with Captain 
Monroe.

TESTIMONY OF CAPTAIN JEFFREY W. MONROE,\1\ DIRECTOR, PORTS AND 
       TRANSPORTATION FACILITIES, CITY OF PORTLAND, MAINE

    Captain Monroe. Good morning, Chairman Collins and Members 
of the Senate Committee on Homeland Security. It is a real 
honor to be here, and my personal thank you to Senator Collins 
for all the good work that you have done in supporting us in 
the public sector in regard to homeland security.
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    \1\ The prepared statement of Captain Monroe appears on page 75.
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    Since my graduation from Maine Maritime Academy 30 years 
ago, I have been involved in the supply chain, in the 
international supply chain and domestic supply chain of this 
Nation. Today, I am the Director of Ports and Transportation 
for the City of Portland. We operate the Portland International 
Jetport, also coordinate all the surface transportation system 
around Portland, and obviously look after the Port of Portland, 
Maine, and their municipal marine facilities.
    The Port of Portland is the largest foreign inbound tonnage 
transit port in the United States and ranks 25th among the top 
100 ports in this country. I currently serve as Chairman of the 
U.S. Coast Guard Navigation Safety Advisory Committee, a member 
of the National Maritime Security Advisory Committee, and I am 
President of the North Atlantic Ports Association.
    I appreciate the opportunity to come and talk about the 
GreenLane Security Act. This bill is coming at a very critical 
moment in port security and transportation logistics planning. 
It is time to take a really serious look at international 
cargo.
    The GreenLane Maritime Security Act and its companion 
legislation, the SAFE Port Act, we believe will greatly improve 
international trade and certainly will enhance homeland 
security. We do support the concept of joint operation centers 
that are contained in the bill; however, as often as possible, 
we think it is very critical that we do not need to duplicate 
facilities. We know that there are many facilities already in 
place. We have one in Portland, Maine, already that works very 
well. And rather than creating a large set of duplications 
where you have miscommunications and different organizations 
working in different areas, we think they should all be 
combined, and if they exist, to be enhanced. One size can fit 
all no matter who it belongs to. Also, sharing allows us to do 
something that is very definitive in emergency management, and 
that is using resources for critical back-up locations.
    We support the expansion of the Port Security Grant Program 
and commend Senators Collins and Murray on the $400 million 
level that is proposed in here. We would like to see funding 
for some regular operations and training included, as well as 
an expansion of authorized uses for those who need it. Not 
every port is as wealthy as many of the major port authorities, 
and many times municipal ports like ours or state-owned ports 
have minimal resources, and it is a real struggle.
    In a regional center, such as Portland, we would be unable 
to comply with the Maritime Transportation Security Act without 
grant support. We have been very fortunate that we have 
received about $3.5 million, which otherwise would have had to 
have been borne by the taxpayers of the city of Portland, 
Maine, and that in competition with our schools and social 
services.
    I absolutely agree that these funds need to be designated. 
There is no question that putting them all in the same pot will 
create a real problem, and we have seen that time and time 
again, and certainly in the realm of transportation where 
commingled monies never get to where they are supposed to be.
    Our port security grants have provided us with surveillance 
and screening equipment, interoperable communications, back-up 
power, and systems integration capabilities that allow us to 
share resources and provide for layered facilities right at our 
own docks and within our city. It involves all the 
stakeholders, all the Federal, State, and local agencies. None 
of this could have been funded locally.
    We also believe that an Office of Cargo Security Policy 
will be of great value. It lays the groundwork for the merging 
of the many separate cargo security responsibilities that have 
evolved since September 11.
    We also believe that the best chance of finding problem 
cargo is when it is loaded and not when it is on the dock. We 
support the third tier of the Customs-Trade Partnership Against 
Terrorism that offers additional benefits to validated 
participants. And we also support the Container Security 
Initiative.
    But we believe that we are not concentrating all of our 
efforts in the right place. Weapons of mass destruction do not 
necessarily come in containers. Sometimes they come in other 
locations. For example, we very rarely look at the millions of 
automobiles that are imported into the United States. We 
believe that these units can be brought into the United States 
in component form, and a lot of new research is necessary, and 
I am glad that the bill focuses on that.
    We also believe that the almost 4-year delay in 
implementing the TWIC is absolutely unnecessary and puts this 
Nation's security at risk. To continue to operate without this 
TWIC standard is an area of America's greatest vulnerability 
and can no longer be tolerated. I cannot personally understand 
why we could do this in aviation in a short amount of time and 
haven't been able to do it in other areas of transportation.
    We also believe that dynamic leadership by the Coast Guard 
is required in each Area Maritime Security Committee that 
brings stakeholders together in frequent and robust discussion 
and exercises. That leadership in most cases is there. But we 
noticed that a lot of the Federal agencies get a chance to 
interact with each other but do not often get a chance to 
interact with State, county, or city municipal officials, and 
those folks have to be included in all of these mixes.
    We continue to see the development of advisory committees 
on any number of transportation and security issues, and these 
are essential. The reality here, though, is that most of the 
committees meet too seldom to be effective and are often 
ignored by the agencies they advise.
    Homeland Security is not about collecting all agencies 
under one roof. It is about creating a system. And I often tell 
people about my own experience being in aviation, being a 
merchant mariner, having to go through four separate security 
checks under Department of Homeland Security. I was very happy 
that every time they found me clean, but the reality is it 
should have never been necessary.
    Ports are just one link in our transportation network. No 
part of the system can be neglected or overemphasized, 
particularly in restoring that system, if we do have an 
incident. We talk about ports. We need to think in the concept 
of total systematic restoration. Moving cargo or people by air, 
water, rail, or road must be looked at collectively. Every part 
of our total border system, including all of our land, air, and 
sea ports of entry, must be monitored and managed completely 
cohesively through a comprehensive partnership. That 
partnership has to involve everyone who is in any way involved 
in transportation security or law enforcement. The standard for 
that partnership has to begin here in Washington, DC. Agencies 
in Washington, DC, must work together, and that is very 
important because that sets the standard and the tone for how 
they will work locally.
    I am often asked if we are better off than we were on 
September 11. Yes, we are much better off and much better 
prepared than we were. And, no, because most of what we have 
created to address our security needs has become overly 
bureaucratic and sometimes non-responsive.
    If we really want to make homeland security effective, it 
is time to trim our agencies to their fighting weights and set 
them up with clear, very definitive goals and absolute 
deadlines that help them to meet their responsibilities 
quickly. For guys like me who are on the dock, or on the bus or 
the train platform, or at the airport, we need a level of 
efficiency that I had hoped would come a lot further than it 
has today. Nearly all of the legislation you have proposed here 
today and that has been mentioned in the past is good 
legislation. But that legislation without dynamic 
implementation is ineffective. If the lessons of the last 5 
years have taught us anything at all, it is that we can be far 
more effective and efficient in the protection of our Nation 
than we already are. And I hope that all of this gets us to the 
point where we can finally solve these problems and get to 
where we need to be.
    Thank you for your time today.
    Chairman Collins. Thank you. Mr. Dinsmore.

TESTIMONY OF M.R. ``MIC'' DINSMORE,\1\ CHIEF EXECUTIVE OFFICER, 
              PORT OF SEATTLE, SEATTLE, WASHINGTON

    Mr. Dinsmore. Thank you, Madam Chairman, and let me start 
by saying to you and Senator Murray, Wow, tremendous leadership 
in bringing this GreenLane legislation forward today. I have 
sat here for 2 hours listening to many presentations, many 
questions, and let me start by saying I am in awe. I have been 
here many times for almost 40 years, long before my hair got 
this color, and I cannot remember a time being more encouraged, 
more proud of what you are doing in the U.S. Senate.
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    \1\ The prepared statement of Mr. Dinsmore appears on page 79.
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    Now, I have had the good fortune--a little bit of 
background--of leading the Port of Seattle for almost 15 years, 
and that is my daytime job. I also have other roles. I am in my 
fifth year as Chairman of the Federal Reserve Board of the 
Pacific Northwest. I am in my second year as Chairman of this 
Nation's Center for Asian Pacific Economic Cooperation (APEC), 
and I share that with you only to say I get it. I have more 
than a neophyte understanding of the economic alignment of what 
you are talking about today, and it has been said so many ways 
and so many times, our economic vitality of this Nation is at 
risk unless we move forward with the creative leadership that I 
have witnessed here today with you and your Committee and many 
others.
    So, almost 5 years ago, I think about what we did within 2 
weeks, we, the Port of Seattle, with the open, active 
endorsement of the five elected officials I work for, we were 
back visiting with Senator Murray and said the following--we 
have an airport and a seaport, a very unique institution. We 
are public, yes, but at the end of the day we look more like a 
Boeing and Weyerhaeuser than City Hall. We want to make a 
difference. We have worked so closely with Senator Murray and 
her leadership for almost 5 years. Are we better today than we 
were 5 years ago, Jeffrey? Absolutely yes. Senator Coleman, we 
are a long way from where we need to be, and thanks for your 
comment.
    We have been an active participant, hopefully an energetic, 
supportive one of Senator Murray and this Nation, trying to 
make our movement of people and commerce more safe and secure, 
our Nation more safe and secure. We have been actively involved 
in endorsing the tremendous amount of programs. Secretary 
Jackson talked about CSI, C-TPAT, Operation Safe Commerce, so 
we know it well. But here we are, the fact remains, almost 5 
years later and finally, Madam Chairman, doing the right thing.
    Now, I don't mean to pretend for a minute that this piece 
of legislation is going to solve this tremendous challenge, but 
it absolutely is the right thing to do. It is a means to an 
end, helping this Nation be more safe and secure.
    When I listened to the presenters before me, almost every 
issue has been covered, but a couple I want to recall again. 
Please continue your leadership, bring this issue to the U.S. 
Senate for a positive vote so we can move forward because we 
have to move forward. When I think about what we have not done 
yet, we do not yet have an integrated system that ties together 
with technology what needs to be done. And, yes, fortunately, 
we are looking at, at the national level, local level, in 
excess of 4.5 or 5 percent of containers. That is not the only 
solution. We cannot slow down the movement of commerce, nor 
should we. And I encourage you to move forward with your piece 
of legislation that enhances the movement of cargo. But we need 
the technology, and technology is clearly part of the solution.
    Four and a half years ago, Senator Murray, we talked about 
what do we need to do. Then and now there are three absolute 
underpinnings of this legislation that I am so pleased with 
your actions. One, it is about making this Nation more safe and 
secure in the movement of commerce. Two, it is about 
expediting, moving more effectively and efficiently the 
movement of commerce. And, lastly, it is about doing something 
that is indeed a public-private partnership, and it is 
affordable. Everything I have heard you say today, Madam 
Chairman, is directly supportive of those three comments. So I 
applaud what you are doing again.
    But I ask you to consider a couple more things as you move 
this forward, both of which have been talked about.
    Five years later, we still do not have protocols to get 
this Nation up and running when and if there is an incident. 
And I am both surprised, pleased, and delighted we have not had 
an incident, but I think the clock is clearly ticking.
    So I listened to Secretary Jackson, and I am a fan of what 
he is doing in Homeland Security. But when and if there is an 
incident, we are not going to be shut down for a day. We do not 
have protocols, and it is not going to be just, well, let's 
start again as we did our Nation's airports in 4 days. We are 
going to be down a while. And if, in fact, we do not have 
protocols, we are not going to get up and running in a manner 
that we would all support. So we are talking weeks, perhaps 
longer. So please push that forward. Let the industry be part 
of the solution as you have in the past.
    When I hear us talk about funding--and I applaud your 
efforts. Is it $400 million, $500 million, $600 million? Please 
make sure that whatever the number is it is adequate to 
implement in a way in which we can all be proud of this piece 
of legislation. And I must tell you, I am somewhat taken with 
here we are today with tremendous support of the Federal 
Government and leaders in front of me. We are spending order of 
magnitude at the Federal level $8, $9, $10 billion a year in 
our Nation's airports. So when I hear us talk about $400 or 
$500 or $600 million, I suggest where we are vulnerable today 
is not at our Nation's airports. It is clearly at our Nation's 
seaports.
    So let me end where I began. Your leadership has been 
extraordinary. I applaud you, and please keep doing the heavy 
lifting that we so desperately need. Thank you.
    Chairman Collins. Thank you. Mr. Howell.

  TESTIMONY OF ANDREW HOWELL,\1\ VICE PRESIDENT FOR HOMELAND 
           SECURITY POLICY, U.S. CHAMBER OF COMMERCE

    Mr. Howell. I would like to thank Chairman Collins and 
Senator Lieberman for the opportunity to testify here today. 
Before I continue, I would ask that my full statement be 
submitted for the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Howell appears on page 85.
---------------------------------------------------------------------------
    Chairman Collins. Without objection.
    Mr. Howell. By way of background, the U.S. Chamber of 
Commerce is the world's largest business federation, 
representing more than 3 million companies around the world. 
Our membership encompasses direct corporate members of all 
types and sizes, trade and professional associations, State and 
local Chambers of Commerce, and 104 American Chambers of 
Commerce abroad in 91 countries.
    The Chamber appreciates the Committee's continued efforts 
to bring attention to the important issue of supply chain 
security. Clearly, the Chamber believes that ensuring the 
security of our citizens should be America's first priority. 
And in the maritime security arena, while we have certainly 
made progress, there is obviously more work to be done.
    We commend Chairman Collins and Senator Murray for 
introducing the GreenLane Maritime Cargo Security Act. Although 
we have some very real concerns with aspects of the bill, the 
legislation by and large represents a reasoned approach to the 
issue. We especially appreciate the attempt to provide 
incentives for businesses to adopt even more robust security 
practices.
    This approach is consistent with the multi-layered, risk-
based approach that the Department of Homeland Security uses to 
address supply chain and maritime security. The legislation 
builds on the strength of successful programs established by 
Customs and Border Protection, including the Customs-Trade 
Partnership Against Terrorism, commonly referred to as C-TPAT.
    Moreover, the United States has worked cooperatively with 
other countries through the Container Security Initiative and 
the World Customs Organization's Security Framework.
    Through such partnerships and on their own, U.S. companies 
have spent a great deal of time, effort, and money on improving 
supply chain security. Congress should recognize that companies 
have taken and continue to take voluntary measures to address 
key security concerns at their own expense.
    Although the programs mentioned above do have room for 
improvement, we believe that they have individually helped 
improve supply chain security. And when taken in aggregate, 
they form effective layers of improved supply chain security.
    One of the reasons our members tell us these programs have 
been so successful is that they are not one-size-fits-all 
solutions. Unlike regulatory regimes, these voluntary programs 
recognize differences among and between industries and modes of 
transportation and affirm that what works in one sector or 
company may not work in others. Flexibility is key to their 
success.
    This bill would eliminate this flexibility, which leads me 
to our chief concern: The proposal to regulate the now 
voluntary C-TPAT program. We strongly oppose the idea of 
regulating a program that has been successful precisely because 
of its voluntary nature. Provisions that would require the 
Secretary to promulgate regulations that describe minimum 
requirements, program tiers, and program benefits of C-TPAT and 
GreenLane, respectively, run counter to how our member 
companies have built their security programs. This would 
actually damage the cooperative nature of the program and limit 
the ability of both government and those who move goods 
globally to evolve in an ever-changing security, economic, and 
technology environment.
    Our second concern with the legislation relates to the 
confidentiality of information collected from businesses. While 
provisions in this bill would authorize the government to 
collect information about business operations and security 
procedures, there are insufficient safeguards against the 
unwarranted distribution of the information or data.
    Third, we believe this legislation would impose 
significantly new compliance burdens on small and medium-sized 
firms. As written, the legislation does not adequately address 
the regulatory compliance costs that would be imposed upon such 
firms.
    Finally, we question the wisdom of permitting new third-
party validations of supply chain security practices of C-TPAT 
participants. The use of third-party validators raises issues 
of cost, confidentiality, and practicality. Instead, we believe 
Congress should give CBP the necessary resources to conduct the 
needed validations.
    In addition to needing additional validations, realizing 
the benefits of the GreenLane concept requires new technology. 
As some of you may recall, last year former Customs and Border 
Protection Commissioner Robert Bonner laid out his vision of 
some basic requirements for C-TPAT in order to achieve true 
GreenLane status. In his words, ``No inspection upon arrival--
immediate release.'' Most critical among these requirements was 
the use of some form of smart box technology to detect and 
record whether tampering has occurred with a container seal 
after being affixed at the point of origin.
    This technology, referenced in Section 10 of the 
legislation as ``Container Security Devices,'' is a critical 
element in making the GreenLane concept a reality.
    Over the past year, DHS has conducted tests on technologies 
designed to track, monitor, and secure containers against 
compromise. The Department has been very clear that before 
incorporating these devices into any government-sponsored 
programs, they must meet a strict 1-percent or lower false 
positive threshold. We agree wholeheartedly with this 
requirement.
    At the same time, we hope that policymakers avoid mandating 
any one technology solution, allowing the private sector to 
choose particular solutions that best fit the needs of their 
business operations. Technology neutrality is central to 
fostering competition, innovation, and effective solutions.
    Also, DHS must conduct a cost/benefit analysis to ensure 
that buyers will see an acceptable return on investment.
    Finally, policy and operational requirements for container 
security devices must be established in order to gain the 
confidence of the trade community. To the extent that this 
legislation focuses DHS to finally make decisions in this 
critical area, we applaud the Committee's efforts.
    In conclusion, the U.S. Chamber of Commerce and our member 
companies fully support the goal of continually improving the 
security of maritime supply chains. In fact, American companies 
spend billions of dollars toward this end every year. To the 
extent that this legislation reinvigorates the policy debate 
and helps DHS make long overdue decisions, we thank and 
congratulate you. However, we remain concerned with a number of 
provisions in this legislation, especially the regulation of C-
TPAT. We hope that any bill that emerges from this Committee 
would address the points that we have raised here today.
    Thank you for the opportunity to share our views. We stand 
ready to assist you as you move forward, and we would be 
pleased to answer any questions you might have.
    Chairman Collins. Thank you. Mr. Hoffa.

      TESTIMONY OF JAMES P. HOFFA,\1\ GENERAL PRESIDENT, 
             INTERNATIONAL BROTHERHOOD OF TEAMSTERS

    Mr. Hoffa. Thank you. Madam Chairwoman, Members of the 
Committee, thank you for having me here today. My name is James 
P. Hoffa. I represent 1.4 million members who are very 
concerned about the issues of cargo and port security. I 
commend you and Senator Murray for your efforts to introduce 
the GreenLane Maritime Cargo Security Act and for holding these 
hearings because I think they are very important at this time.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hoffa appears on page 94.
---------------------------------------------------------------------------
    My written statement includes specific comments about 
sections of the bill. It is extremely important that these 
issues receive the public airing that they really deserve.
    Let me start by saying what the Teamsters believe. We 
believe that American ports should be run by Americans. We 
believe that port security should be managed by Americans. We 
believe, as it stands now, that American ports are extremely 
vulnerable. And we believe that something should and can be 
done. The GreenLane Maritime Cargo Security Act will address 
many of the current vulnerabilities.
    These additional security protocols will improve cargo and 
port security in the future, but steps must be taken now to 
improve port security. Our union has been sounding the alarm on 
these issues for decades. Because of the Dubai debacle, our 
Nation is now focused on port security. And I am here to say 
let's not lose that focus.
    I would like to talk about something I know something 
about: The labor force that works in our ports.
    When a container comes off a ship, a longshoreman moves the 
container within the port to the container yard. From there, a 
port driver, a truck driver, picks up the container and leaves 
the port for final delivery. Longshoremen are regular employees 
that report every day to a hiring hall. They are the same 
people every day. But it is not clear who manages the port 
truck drivers. There are over 100,000 port truck drivers that 
outnumber all the other people that work at the ports, but 
there is no employer, no chain of control, and no 
accountability. And the faces of these drivers change daily. 
That would be unacceptable at any airport. We are really 
playing Russian roulette with our Nation's security.
    There has been an intense congressional and media focus on 
funding infrastructure and improvements to protect our maritime 
ports, and that is as it should be. But no matter how high we 
build fences or how many Coast Guard cutters patrol the 
harbors, our ports remain vulnerable when the gates are left 
wide open. And that is the situation at most of our U.S. ports 
today.
    Former Coast Guard officer Stephen Flynn, in his recent 
report to the Council on Foreign Relations, said that our 
Nation's ports are the weak link of port security. They are our 
Achilles heel.
    A recent unpublished report by the Department of Homeland 
Security found that over half of the 9,000 truck drivers at the 
Port of New York and New Jersey have criminal records, 
including smuggling, and over 500 were driving without valid 
commercial licenses. And it gets worse.
    In an effort to ratchet down the rates that truck drivers 
are paid, the industry uses container-hauling companies who 
contract with drivers who are exploited by making only $5 to $7 
an hour; driving unsafe, polluting vehicles; hauling 
dangerously overweight containers; operating without driver's 
licenses; many of them have no insurance, no hazmat 
certificates, and who are regularly forced to violate wage and 
hour laws.
    This is the dirty little secret of the maritime import/
export business. You may not have known this, and the public 
and press may not have known this. But the port authorities and 
the terminal operators all know it.
    They know that the annual turnover rates for these truck 
drivers is close to 140 percent, compared to 2 or 3 percent 
with unionized truck drivers. The steamship lines have posted 
incredible profits, increasing 100 to 200 to 400 percent, while 
most of the drivers struggle just to survive.
    And the industry also knew that something was critically 
wrong in Los Angeles and Long Beach when dozens of trucks were 
abandoned, effectively shutting down the terminals, when the 
INS showed up at the gates.
    The industry also knew that something was terribly wrong at 
the Port of Miami when drivers boycotted the ports in the year 
2000 and 2004 to protest trucking companies engaged in 
insurance fraud.
    And the industry knows that the reason one-third of the 
drivers in the Port of Savannah get daily passes is the fact 
that they cannot pass the background checks that you need to 
get a permanent pass.
    There can really be no port security when the industry 
promotes a system where motor carriers operate with pirate 
companies, when they employ drivers who cannot find work in the 
regular trucking industry, all in the name of providing low-
cost trucking services.
    The industry uses the excuse that these drivers are not 
their employees. They claim the drivers are contractors or 
independent contractors for container-hauling companies and 
subcontractors with foreign-owned steamship lines. Like our 
airports, every one of these ports is controlled by a public 
authority. They must take responsibility. They must operate as 
stewards for the public good and place national security first.
    Reasonable people can debate the issue of independent 
contractors, but we also know one other thing: That we really 
have to have security at our ports. The current system is a 
security nightmare. It allows port drivers to be treated like 
sharecroppers on wheels. Most importantly, the independent 
contractor system means that no one in the industry takes 
responsibility for these drivers and the cargo that they 
deliver.
    Contrast this with the movement of cargo within the port 
itself. The U.S. Customs ruled a long time ago. In 1993, they 
said we are not going to use independent contractors because it 
is too dangerous to have them move cargo within the U.S. 
Customs facilities. Customs rejected the use of independent 
contractors because of the lack of control, and it meant that 
no one was responsible in the supply chain. And that is exactly 
my point. Someone must be responsible for these drivers.
    So why are these issues of concern for national security? 
Because these drivers are ruled by fear. Drivers operating 
illegally in our ports or operating at or near bankruptcy are 
vulnerable to blackmail and bribery. They are susceptible, 
knowingly or not, to people who would harm our country. They 
are in a position to smuggle contraband or, God forbid, weapons 
of mass destruction. As many port drivers operate under the 
radar, they are in no position to report to the police a 
violation if they did see one. This is the nightmare scenario 
that none of us really want to see.
    You know, there is a movie out that I have seen, and I hope 
you all see it. It is called ``The Sum of All Fears,'' where a 
nuclear device is smuggled into the port of Baltimore. And I 
think it is instructive today with the environment we live in. 
What is fiction today could be fact tomorrow. Could anyone have 
imagined September 11, four airplanes hijacked simultaneously? 
You would have said it couldn't happen, but it did.
    Most experts agree that a terrorist attack at a major U.S. 
port would cripple the entire Western economy, and, 
unfortunately, many experts also say that it is not a matter of 
if, it is a matter of when the next terrorist attack happens.
    So since September 11, the shipping industry has avoided 
dealing with these security issues. They think that close 
scrutiny of the ports will increase the shortage of drivers. I 
am here to say that there is something more important than the 
companies' bottom line. You get what you pay for. Our Nation's 
security should not be dependent on the highest bidder or the 
lowest payer, especially if the highest bidder is the one who 
wants to cut corners when it comes to safety and security.
    Congress must authorize the ports to set guidelines that 
will eliminate the pirate motor carriers who operate in an 
underground economy. As General President of the Teamsters, I 
know our country can do better than allow critical 
infrastructure to be at the mercy of companies who supply 
unqualified and uninsured drivers, companies who pay no FICA, 
no unemployment taxes, no workmen's compensation. These 
companies are undercutting the possibility of legitimate 
carriers competing for this important business. As soon as 
legitimate carriers enter the process, thousands of drivers who 
can pass security tests will line up for good jobs and deliver 
good services in a secure environment. Legitimate 
transportation companies have these obligations to their 
workers.
    The system we have now is bad for our ports and bad for 
America. If Congress forces the industry to clean up its act, 
you will have a workforce that can pass security checks, a 
workforce that will be trained, efficient, and productive, a 
workforce that will be the eyes and ears of our ports and 
report any violations to the authorities.
    The solution to improving port security is to stabilize the 
workforce, the 100,000 port drivers. Give them employee status. 
Give them decent pay. Make them legitimate. Give them a stake 
in the American dream.
    On behalf of the Teamsters, I appreciate the opportunity to 
testify today. I think it is very important what you are doing, 
and sitting here today listening to all the comments has been 
very instructive, and I think we all share the common goals of 
a safe America. Thank you.
    Chairman Collins. Thank you.
    I am going to call on Senator Coleman for his questions. I 
am going to have to leave shortly to go to the floor to offer 
an amendment to the immigration bill. But I will be submitting 
questions for the record to each of you, and I want to thank 
each of you for your helpful testimony.
    Senator Coleman.
    Senator Coleman. Thank you, Madam Chairman.
    First, Mr. Hoffa, in your written testimony you talked 
about--you didn't talk about it in the oral testimony, but I 
want to thank you for raising the issue of checking empties. It 
is something we do not talk about, and I am sure the folks 
operating ports understand this. So much of our focus has been 
what is coming in, but then containers come back, and I would 
be interested in the percentage, somewhere along the way there 
is a very significant number of percentages going back as 
empties. Does anybody have any information on what that number 
is?
    Mr. Dinsmore. Out of the Northwest, I would say order of 
magnitude 30 to 40 percent. And let me assure you, Senator, we 
are checking every one.
    Captain Monroe. The same thing on the Northeast. It is 
about 40 percent, and you can be sure that every one of those 
empties are checked.
    Senator Coleman. One of the concerns that we had in the 
Subcommittee is the ability to smuggle materials to create a 
dirty bomb into this country, and the concern is if you want to 
shut down a port, it may be easier on the way back. So I just 
think it is something that we have to take a closer look at. I 
have not looked at that as extensively, but, clearly, when you 
have 30 or 40 percent going back as empties, we have to be 
focused on every step along the way.
    Mr. Howell, just one comment about C-TPAT. I do not read 
this bill as regulating C-TPAT, as simply ensuring that there 
is some legislative specificity to say we are going to do C-
TPAT. It is still a voluntary program. Where I may disagree--
and I am not sure we are disagreeing. Perhaps that is my 
question. C-TPAT, in effect, gives you a free ride, pretty 
close to a free ride. You are part of C-TPAT, the chance of 
your cargo being inspected significantly drops. And so we have 
an interest in there being specific standards. It is voluntary, 
but if you participate, you are going to get certain benefits. 
Is there any question that we need to ensure that those who are 
involved, voluntarily work in C-TPAT, live up to the highest 
level of security? And today the problem is we just are not 
checking that. We have not been verifying it. Do you disagree 
with the need to verify the process, procedures that folks are 
using for C-TPAT?
    Mr. Howell. Senator, I would argue those are two separate 
issues, the first issue being baseline criteria for C-TPAT and 
for the different tiers of C-TPAT. CBP has, in fact, published 
that and made it available on their website, and those baseline 
criteria are the criteria that C-TPAT participants must hit.
    On the validations piece, separate issue, but we do believe 
emphatically that CBP should be conducting validations of C-
TPAT participants, and maybe an appropriate next step is to 
more robustly fund CBP to perform more of those validations. 
And if the risk management model supports doing more of that, 
we are all for it because we believe this voluntary program is, 
again, one layer in a multi-layered security strategy, but an 
important one to make sure that it is, in fact, validated going 
forward against those baseline criteria as set by CBP.
    We do not view there being a compelling need to go through 
the Notice of Proposed Rulemaking process to lay out those 
criteria.
    Senator Coleman. So I am still trying to understand what 
would you find as overly burdensome or regulatory in what is in 
this bill? I am just not seeing that this bill is doing that 
kind of regulating. It is simply saying, we want to make sure 
that C-TPAT is there regardless of whether there are changes in 
Administration or changes with the head of DHS. We want to make 
sure this program is part of that layered security system that 
we have.
    Mr. Howell. We see it being, again, a voluntary program 
where the criteria are published on the CBP website now, and 
going through the Administrative Procedures Act in order to 
regulate those benefits in our view eliminates flexibility and 
does not allow us to, on a dime, shift and change security 
strategies as may be appropriate as threats and technology 
evolve. We view the flexibility of the criteria as set on the 
website and as continually evolving over time as being the 
appropriate step to take.
    Senator Coleman. I would submit the legislation does not 
create the problems that you are reflecting. I think we agree 
with where we want to go on this. We just want to make sure 
that there is a C-TPAT that is there, regardless of who is in 
charge, and that, in fact, there are the highest levels, that 
we are going to push the Department to make sure that this is 
validated, that it works.
    Let me just switch gears and perhaps across the board. One 
of the benefits in the Hong Kong ICIS program is that you have 
a system that demonstrates the potential to screen 100 percent 
of the containers that come through. They are all checked with 
radiation portal monitors as well. There are questions about 
how that is used and not used. But one of the key factors here 
is that the private sector--this was done without Homeland 
Security grants. The private sector did that.
    Do you think that there is the appetite in this country for 
the private sector to be a full paying partner in the creation 
of programs like ICIS in any of our ports?
    Mr. Dinsmore. Senator, I would suggest to you that what you 
saw and I have seen many times in Hong Kong is a partial 
solution, including perhaps ICIS. But to your question, is 
there an interest in the generic maritime industry to know 
there has to be a financial partnership? Yes. To what degree 
and how do we make sure that it is really about value-added? 
Quite candidly--and we have said it. We have listened to it 
many times. Putting the emphasis back on the offshore port both 
with the X-ray and with the radiation portal because, quite 
candidly, the incident you know about last night in Seattle, 
where 21 people came into our harbor, a tragedy and an irony, 
Customs Border Patrol had flagged that container, which is the 
good news. The bad news, they are here. So it could have very 
easily been a very different set of circumstances.
    Captain Monroe. I have to agree with Mr. Dinsmore. I think 
the reality here is that there is a blatant economic self-
interest on the part of the carriers to make sure that their 
cargo gets from Point A to Point B with no issues. And, while 
the industry is always looking for ways to cut its costs, I 
think they recognize that this is a critical part of their 
business and that they need to look at this. And I think they 
would be willing to participate in it.
    Mr. Howell. And if I could just add, companies have every 
incentive in the world to protect their people, their property, 
and their assets. And finding the best ways to do that is what 
we really need to engage in a public-private partnership to 
make sure we do going forward.
    Mr. Hoffa. I disagree. I think that what we have is a 
record here of people trying to cut costs, and when it comes to 
the most important part, these 100,000 truck drivers that are 
on the docks, what have we seen? We have seen people shirk 
their responsibility, want to pay them the lowest wages, get 
people that are unqualified, and basically to save money to 
make--to fatten their bottom line. So I do not think that this 
is working. That is why we have to have legislation or help 
that basically says we have to make these concessions where 
they have to hire people who are responsible. Take this TWIC 
program, move that out where more and more people have to have 
their backgrounds checked, that is going to get you a higher 
quality of people. And I do not think the voluntary system is 
working because we have a record of years and years and years 
of cost-cutting and these sharecroppers on wheels. It is not 
working for the truck drivers.
    Senator Coleman. Thank you, Madam Chairman.
    Chairman Collins. Thank you very much, and thank you for 
all the work you have done on this really important issue.
    I want to thank all of our witnesses today. I think this 
has been an extremely valuable hearing that establishes a very 
good record for us to proceed forward in marking up the 
legislation, and I appreciate your sharing your expertise with 
us.
    The hearing record will remain open for 15 days for the 
submission of additional statements, materials, and questions. 
Again, my thanks to all of you.
    This hearing is now adjourned.
    [Whereupon, at 12:44 p.m., the Committee was adjourned.]
                            A P P E N D I X

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