[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
        DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2009

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION
                                ________

                    SUBCOMMITTEE ON HOMELAND SECURITY
                DAVID E. PRICE, North Carolina, Chairman

 JOSE E. SERRANO, New York          HAROLD ROGERS, Kentucky
 CAROLYN C. KILPATRICK, Michigan    JOHN R. CARTER, Texas
 CIRO RODRIGUEZ, Texas              ROBERT B. ADERHOLT, Alabama
 NITA M. LOWEY, New York            KAY GRANGER, Texas
 CHET EDWARDS, Texas                JOHN E. PETERSON, Pennsylvania
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas    
 SAM FARR, California               
 CHAKA FATTAH, Pennsylvania         

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
      Beverly Pheto, Stephanie Gupta, Jeff Ashford, Shalanda Young,
                       Jim Holm, and Adam Wilson,
                            Staff Assistants

                                ________

                                 PART 2
                     DEPARTMENT OF HOMELAND SECURITY
                                                                   Page
 Management Challenges............................................    1
 Land Border Enforcement..........................................   93
 Candidate Protection: Balancing the U.S. Secret Service Workload.  197
 Improving the Efficiency of the Aviation Security System.........  319
 Investing in Science and Technology..............................  557
 Questions for the Record from the Federal Law Enforcement 
Training Center...................................................  693
 Outside Witness Testimony........................................  715

                                   S

                                ________

         Printed for the use of the Committee on Appropriations
    PART 2--DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2009
                                                                      ?

                     U.S. GOVERNMENT PRINTING OFFICE

  42-401

                            WASHINGTON : 2008

        DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2009

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION
                                ________
                    SUBCOMMITTEE ON HOMELAND SECURITY
                DAVID E. PRICE, North Carolina, Chairman
 JOSE E. SERRANO, New York          HAROLD ROGERS, Kentucky
 CAROLYN C. KILPATRICK, Michigan    JOHN R. CARTER, Texas
 CIRO RODRIGUEZ, Texas              ROBERT B. ADERHOLT, Alabama
 NITA M. LOWEY, New York            KAY GRANGER, Texas
 CHET EDWARDS, Texas                JOHN E. PETERSON, Pennsylvania
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas    
 SAM FARR, California               
 CHAKA FATTAH, Pennsylvania         

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
      Beverly Pheto, Stephanie Gupta, Jeff Ashford, Shalanda Young,
                       Jim Holm, and Adam Wilson,
                            Staff Assistants

                                ________
                                 PART 2

                     DEPARTMENT OF HOMELAND SECURITY
                                                                   Page
 Management Challenges............................................    1
 Land Border Enforcement..........................................   93
 Candidate Protection: Balancing the U.S. Secret Service Workload.  197
 Improving the Efficiency of the Aviation Security System.........  319
 Investing in Science and Technology..............................  557
 Questions for the Record from the Federal Law Enforcement 
Training Center...................................................  693
 Outside Witness Testimony........................................  715

                                   S

                                ________

         Printed for the use of the Committee on Appropriations

                                ________

                                                                      ?

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 JOHN P. MURTHA, Pennsylvania       JERRY LEWIS, California
 NORMAN D. DICKS, Washington        C. W. BILL YOUNG, Florida
 ALAN B. MOLLOHAN, West Virginia    RALPH REGULA, Ohio
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JAMES T. WALSH, New York
 JOSE E. SERRANO, New York          DAVID L. HOBSON, Ohio
 ROSA L. DeLAURO, Connecticut       JOE KNOLLENBERG, Michigan
 JAMES P. MORAN, Virginia           JACK KINGSTON, Georgia
 JOHN W. OLVER, Massachusetts       RODNEY P. FRELINGHUYSEN, New Jersey
 ED PASTOR, Arizona                 TODD TIAHRT, Kansas
 DAVID E. PRICE, North Carolina     ZACH WAMP, Tennessee
 CHET EDWARDS, Texas                TOM LATHAM, Iowa
 ROBERT E. ``BUD'' CRAMER, Jr.,     ROBERT B. ADERHOLT, Alabama
Alabama                             JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       JOHN E. PETERSON, Pennsylvania
 LUCILLE ROYBAL-ALLARD, California  VIRGIL H. GOODE, Jr., Virginia
 SAM FARR, California               RAY LaHOOD, Illinois
 JESSE L. JACKSON, Jr., Illinois    DAVE WELDON, Florida
 CAROLYN C. KILPATRICK, Michigan    MICHAEL K. SIMPSON, Idaho
 ALLEN BOYD, Florida                JOHN ABNEY CULBERSON, Texas
 CHAKA FATTAH, Pennsylvania         MARK STEVEN KIRK, Illinois
 STEVEN R. ROTHMAN, New Jersey      ANDER CRENSHAW, Florida
 SANFORD D. BISHOP, Jr., Georgia    DENNIS R. REHBERG, Montana
 MARION BERRY, Arkansas             JOHN R. CARTER, Texas
 BARBARA LEE, California            RODNEY ALEXANDER, Louisiana
 TOM UDALL, New Mexico              KEN CALVERT, California
 ADAM SCHIFF, California            JO BONNER, Alabama                  
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              

                  Rob Nabors, Clerk and Staff Director

                                  (ii)


        DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR 2009

                              ----------                              

                                      Wednesday, February 13, 2008.

            MANAGEMENT CHALLENGES--INSPECTOR GENERAL AND GAO

                               WITNESSES

DAVID M. WALKER, COMPTROLLER GENERAL OF THE UNITED STATES
RICHARD L. SKINNER, INSPECTOR GENERAL, U.S. DEPARTMENT OF HOMELAND 
    SECURITY

                  Opening Statement of Chairman Price

    Mr. Price. The subcommittee will come to order. Good 
morning, everyone. I would like to welcome you to our first 
hearing of calendar year 2008 as we look toward the fiscal year 
2009 budget.
    Over the coming months we plan to have 16 hearings focusing 
on every aspect of the Department of Homeland Security, 
culminating with an appearance by Secretary Chertoff in April.
    The Department of Homeland Security will be five years old 
in three weeks. Even though we all knew that this 
reorganization forming the Department would be the most 
ambitious governmental reorganization of our lifetimes, I am 
not sure anyone fully anticipated the difficulties the 
Department has faced, especially the numerous changes in 
Departmental leadership.
    We have had two Secretaries, three Deputy Secretaries, 
numerous changes in agency heads and on and on. This Department 
needed stability and leadership, and it has not had the kind of 
stability that would have ensured superior performance.
    Too often we hear about a breakdown in the Department that 
appears to stem from flawed judgment. We have heard about a 
staged FEMA press conference and an ICE Halloween party that 
was at best distasteful. We also heard about TSA leaders 
informing screeners about when they were going to be tested, 
messing up in essence the premise of the test.
    I could go on, but I do not really need to. There has been 
some questionable judgment on the part of leadership in the 
Department, and that has affected performance, it has affected 
morale, and it needs to be corrected. Employee morale at DHS is 
the lowest in the federal government.
    The Department has poor procurement practices and poor 
financial management, as many of the Inspector General and GAO 
reports issued in the past year have demonstrated. We know the 
Department has weak computer security controls.
    We know from reports that today's witnesses have issued 
that there are numerous security problems on our northern 
border. Again, the list is long, and the witnesses this morning 
have contributed greatly to our understanding of the challenges 
that the Department faces.
    Last year GAO issued its high risk list, which included the 
Homeland Security Department. Just last month the Inspector 
General issued a report on what he sees as major management 
challenges facing the Department. These include catastrophic 
disaster response, acquisition, grants and financial 
management, infrastructure protection, border security, 
transportation security, information technology management and 
trade operations.
    Now, our subcommittee is not seeking daily headlines. We 
want to acknowledge and encourage areas of progress where they 
have occurred, and we will have some of that this morning as 
well from our witnesses.
    We also want to point out and correct, or at least get on 
the path to correction, deficiencies. We want to see problems 
fixed, and we want to see the Department operating in the best 
manner to secure our homeland. We are getting somewhat 
impatient. I hope our two witnesses today can help us direct 
our impatience into constructive efforts to change things for 
the better.
    I have asked our two witnesses to offer what they view as 
the top eight management and performance improvements that the 
Department can make between now and September or within seven 
months, the kind of short-term improvements we might look for 
that would give an indication of broader improvements to come. 
I hope you will talk about those in your opening statements, 
and of course we will explore them in the questions.
    Comptroller General David Walker and DHS Inspector General 
Richard Skinner are in the business of uncovering federal 
agency problems and recommending solutions, so it is fitting 
that we begin this year's hearing season with them.
    Before I ask them to briefly summarize their written 
statements I want to ask our distinguished Ranking Member, Hal 
Rogers, for any statement he would like to make.

               Opening Statement of Ranking Member Rogers

    Mr. Rogers. Thank you, Mr. Chairman. We want to welcome our 
guests from the Department and the GAO.
    Since its creation almost five years ago, DHS has labored 
through the largest reorganization of the federal government in 
more than a half century. This task, creating the third largest 
Cabinet agency with the mission of protecting our country and 
responding to threats and catastrophes, while also facilitating 
legitimate immigration travel and trade, has certainly 
presented challenges to both the Administration and to the 
Congress.
    So as I look down the list of major management challenges 
facing the Department of Homeland Security identified by the 
Inspector General just over a month ago, a list that includes 
acquisition management, branch management, financial 
management, border security, transportation security and so on, 
I have to remind myself that the Department is in fact only 
five years old.
    But I am the last person to make excuses for DHS. After 
all, I have repeatedly stressed that failure is not an option 
when we are talking about homeland security. The Department's 
weaknesses and missteps are well documented, and I for one am 
not tolerant of mismanagement, waste, fraud, or abuse.
    Since this committee was formed, we have stressed results, 
and that mantra has continued under Chairman Price's 
leadership. Challenges are to be expected. No one ever claimed 
that securing the homeland would be easy, and indeed when 22 
agencies were cobbled together five years ago and when this 
subcommittee was established challenges were all that existed.
    But now programs like TWIC and Secure Flight, programs that 
were honestly going nowhere just a few years ago, are finally 
gaining some traction. Over 67 TWIC enrollment centers are now 
open, and Secure Flight is finally on track to assume all 
watchlist matching from air carriers in early fiscal year 2010.
    And there are other notable signs of progress at DHS such 
as ending the practice of catch and release on the border, 
integrating the IDENT and IAFIS databases and establishing a 10 
print ID standard at our ports of entry.
    So I believe we have met our challenges head on. Through 
aggressive oversight, constant vigilance, a steady flow of 
robust funding from this subcommittee and the Congress, we have 
given DHS both the impetus and resources to continually improve 
its progress towards securing the homeland.
    While DHS has not always performed as well as expected, I 
am proud to see that through the storm of challenges we are 
seeing some measures of success, so it is for this reason, 
among many others, that I firmly believe we are unquestionably 
safer today than we were before 9-11.
    Now as we transition into the final year of this 
Administration a new set of challenges await: Following through 
on the promise to rebuild FEMA's operational capability so that 
it is capable of responding to the most devastating of 
disasters, implementing the Secure Border Initiative by 
combining the necessary personnel and infrastructure with the 
most advanced technology to control our borders and stem the 
flow of illegal immigration, overcoming the hurdles of major 
acquisitions over the Department and ensuring the Department's 
continuity during the Administration's turnover.
    The challenges confronting this subcommittee are continuing 
as we debate how much is the right amount to spend on homeland 
security. I have always said that we should spend as much as 
needed on security, but not a penny more.
    These challenges are not easy, but nothing worthwhile ever 
is. Our witnesses have the duty to objectively analyze and 
report on the Department's ability to overcome its challenges 
and perform its vital mission. I look forward to hearing their 
views and conversations.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Walker, we will begin with you. We will ask each of you 
to provide us a five minute summary of your testimony. We have 
had advance copies of the written testimony, and then that will 
leave plenty of time for our discussion.
    Mr. Walker.

Statement of David M. Walker, Comptroller General of the United States, 
                 U.S. Government Accountability Office

    Mr. Walker. Thank you, Mr. Chairman, and Ranking Member 
Rogers. It is good to be back before this subcommittee to 
discuss the Department of Homeland Security's efforts to 
implement its management and mission functions.
    As all of you know, in 2003 the GAO designated the 
implementation and transformation of the Department of Homeland 
Security as high risk because it represented an enormous 
undertaking that would require time to achieve in an effective 
and efficient manner.
    To put things in context, Mr. Rogers, the Defense 
Department was created in 1947, and it has more high risk areas 
than any other department in government, and I am confident DHS 
can do better and faster than DOD has done in that regard.
    Given our nation's current fiscal condition, it is 
critically important that federal departments, including DHS, 
operate as efficiently as possible in carrying out their 
missions. Next year we are expected to have a $410 billion and 
we spend all the social security surplus, which is about 
another $175 billion.
    In August 2007, we reported on the progress that DHS has 
made since its inception in implementing its management and 
mission functions. We also identified a number of specific 
actions that they needed to take. Let me provide the 
highlights, if I can.
    I do think it is important to note where progress has been 
made rather than just focus on what remains to be done. DHS has 
made progress in implementing its management and mission 
functions.
    For example, in the management areas DHS has made progress 
in implementing a strategic sourcing program, in preparing 
corrective action plans for its internal control weaknesses and 
issuing plans for its human capital system, in establishing and 
institutionalizing information technology management controls 
and in developing an asset management plan for its real 
property.
    On the mission side, DHS has made progress in refining the 
screening of foreign visitors to the United States and 
providing training for border personnel, strengthening 
passenger, baggage and air cargo screening at airports, 
establishing security standards and conducting assessments and 
inspections of surface transportation modes, developing 
programs for collecting information on incoming ships; 
enhancing emergency preparedness and response capabilities such 
as issuing a new national response framework just last month, 
and identifying and assessing critical infrastructure threats 
and vulnerabilities and, last but not least; improving its 
coordination with federal, state, local and private sector 
entities on homeland security technologies.
    While progress has been made, challenges remain. Some of 
the key challenges are as follows: Providing appropriate 
oversight of contractors, improving financial management 
controls and correcting internal control weaknesses, 
implementing a performance-based human capital management 
system, refining and implementing controls for information 
technology management;
    Improving the regulation of commercial trade while ensuring 
protection against the entry of illegal goods and dangerous 
visitors at U.S. ports of entry, improving enforcement of 
immigration laws, fully integrating risk-based decision making 
in the transportation security programs and further improving 
coordination with states and first responders as they train and 
practice under the national response framework.
    There are a number of cross-cutting issues affecting the 
Department of Homeland Security that I would touch on briefly 
that I think this subcommittee would be interested in. Moving 
forward, it will be particularly important for DHS to develop 
comprehensive plans for managing the upcoming Presidential 
transition, to ensure continuity in operations and to minimize 
vulnerabilities as required by existing legislation.
    I might note I was personally briefed on what DHS has done 
with regard to their human capital transformation framework, 
and I was very impressed with it. I know that the Department is 
taking this transition plan seriously. They have a statutory 
requirement to complete it by December of this year, but I know 
they are making progress. It is not just a matter of having a 
plan. It is a matter of having effective implementation of that 
plan.
    Although the Secretary of Homeland Security has identified 
risk-based decision making as a cornerstone of Departmental 
policy, we have reported that DHS needs to strengthen its 
efforts to actually apply risk-based principles in support of 
its investment decisions.
    I might note, Mr. Chairman, that the Congress does too. The 
Congress needs to provide reasonable flexibility for the 
Department to be able to allocate its resources based on threat 
and risk.
    We designated information sharing for Homeland Security as 
high risk in part because the nation lacked an implemented set 
of governmentwide policies and processes for sharing terrorism 
related information. It has now been issued, but there is more 
that needs to be done to effectively implement it.
    DHS has faced some challenges in developing effective 
partnerships with federal, state, local, private and not-for-
profit sector entities, as well as international stakeholders, 
and there needs to be additional clarification of various roles 
and responsibilities for these players.
    Last, but certainly not least, accountability and 
transparency are critical to the Department effectively 
integrating its management functions and implementing its 
mission responsibilities.
    We have in the past encountered delays at DHS in obtaining 
access to needed information. Over the past year we have 
discussed ways to try to resolve these access issues with DHS, 
and our access has improved in recent months. However, we 
continue to believe that DHS needs to make systemic and 
systematic changes to its policies and procedures for providing 
GAO with access to information and to individuals in a more 
timely manner.
    As you know, Mr. Chairman, legislation enacted in December 
of 2007 reinforces this position by restricting a portion of 
funds appropriated to DHS's Office of the Secretary and 
Executive Management until DHS certifies and reports that it 
has revised its Departmental guidance for working with GAO and 
the DHS Inspector General.
    We are currently working with DHS in this regard, and we 
look forward to collaborating with the Department on the 
proposed revisions.
    Thank you very much, Mr. Chairman. I would be happy to 
answer your questions after Mr. Skinner has a chance to 
testify.
    [The information follows:]

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    Mr. Price. Thank you.
    Mr. Skinner.
    Mr. Skinner. Thank you, Mr. Chairman and members of the 
subcommittee. Thank you for the opportunity to participate in 
this very important hearing.
    Last year at this time I testified before this subcommittee 
about four critical management challenges facing the Department 
of Homeland Security; that is, financial management, 
information technology management, acquisition management and 
grants management.
    Today I would like to update the subcommittee on the 
progress that the Department has made to address those 
challenges. Also, time permitting, I would like to briefly 
touch upon a few program challenges that I believe need special 
attention during the upcoming year as the Department prepares 
to transition into a new Administration.
    First with regard to the four management challenges, I 
think it is important to understand that when the Department 
was stood up in March 2003 it not only inherited preexisting 
problems and material weaknesses from its legacy agencies; it 
also did not receive the funds or people needed to address 
those problems and weaknesses or otherwise adequately support 
the vast number of Departmental programs and operations.
    Yet I must say in spite of these what seemed at that time 
as insurmountable obstacles, the Department's progress to date 
has been somewhat impressive. I do not mean to imply the 
challenges do not remain. They do. The Department still has a 
long, long way to go before it can say that it is operating in 
an efficient, effective and economical manner.
    In the area of financial management, for example, although 
the Department was again unable to obtain an opinion on its 
financial statements in 2007, every component in the Department 
except FEMA and the Coast Guard showed measurable progress in 
its ability to produce accurate, reliable financial statements.
    Many of the material weaknesses associated with FEMA can be 
traced to the events surrounding Hurricane Katrina and the 
realignment of grant programs as a result of the mandates of 
the post-Katrina Emergency Management Reform Act of 2006.
    The Department's CFO and the FEMA CFO both have identified 
the underlying cause for FEMA's material weaknesses and have 
developed management action plans--very aggressive, robust 
plans--with milestones to remediate them as early as this year.
    The Coast Guard, on the other hand, has been and continues 
to be an area of particular concern. The Coast Guard has shown 
no discernable progress in its ability to produce reliable 
financial statements or correct its material weaknesses since 
the inception of the Department in 2003.
    To remediate its material weaknesses, the Coast Guard must 
first develop a corrective action plan that contains detailed 
milestones showing how it will get from its current state to 
its desired state. To date, the Coast Guard has not provided 
such details.
    Lacking a fully developed plan, the Coast Guard is unlikely 
to remediate any of its material weaknesses this year. 
Consequently, because the majority of the Department's material 
weaknesses are directly attributable to the conditions existing 
at the Coast Guard, we will be unable to offer an opinion again 
on the Department's financial statements in 2008.
    With regards to information technology management, 
integrating the systems, networks and capabilities of the 
legacy agencies to form a single infrastructure for effective 
communications and information exchange remains one of the 
Department's biggest challenges.
    During the past year, the Department has implemented a 
performance plan to measure each component's progress towards 
full compliance with its Information Security Program. Despite 
this oversight, however, components have been slow in executing 
fully the Department's policies, procedures and practices.
    At the component level, we have identified outdated or 
stovepipe systems, at times supporting inefficient business 
processes; plans to modernize IT systems were unfocused, often 
with inadequate requirements; identification, analysis and 
testing to support acquisition and deployment of the systems 
and other technologies needed to improve operations.
    With regards to acquisition management, the urgency and 
complexity of the Department's missions continues to demand 
rapid pursuit of major investments. In 2007, the Department 
spent nearly 39 percent or around $14 billion on contracts.
    During this past year, we published the first of what will 
be a series of scorecards identifying the progress made in five 
acquisition activities in the Department: Organizational 
alignment and leadership, policies and processes, financial 
accountability, acquisition work force, and knowledge 
management and information systems. While the scorecards showed 
some progress in selective areas, we determined that 
deficiencies persist and improvements were needed in all five 
elements measured.
    In the area of grants management, the Department has taken 
giant steps to improve its business and administrative 
processes for its grant programs. During the past year, the 
Department has successfully migrated its multitude of grant 
programs under one agency, FEMA, and implemented a risk-based 
grant allocation process for such programs as the Homeland 
Security Grant Program, Transit Security Grant Program, Port 
Security Grant Program and Buffer Zone Protection Program.
    Nevertheless, there is much work that needs to be done. Our 
reports over the past year have pointed out that the Department 
needs to do a better job of monitoring grantee expenditures and 
grantee adherence to the terms and conditions of the awards. 
Given the billions of dollars appropriated annually for grant 
programs, it is imperative that the internal controls are in 
place and adhered to and successful outcomes are achieved.
    Finally, I would like to talk briefly about just a few 
other critical program challenges that we believe will require 
special attention during the upcoming year as the Department 
prepares to transition to a new Administration. This list most 
certainly is not all-inclusive.
    These are the Secure Border Initiative, FEMA's Disaster 
Preparedness Initiatives, the Coast Guard's Deep Water Program, 
TSA's Cargo Screening Program, and CIS' backlog of immigrant 
applications. These initiatives are in a critical stage of 
their development and therefore require unwavering management 
attention.
    The Department is making a good faith effort to formulate 
and execute meaningful performance plans to address the 
management challenges associated with these initiatives. 
However, the ability of the Department to sustain these efforts 
is fragile at this point in time because of the early stage 
they are in and the disruptions that may accompany the 
transition to a new Administration in less than a year.
    It is imperative that the Department formulates 
comprehensive performance plans with unambiguous milestones and 
metrics to gauge or measure progress, ensure transparency and 
accountability, and help guide program execution.
    Mr. Chairman, that concludes my remarks. I will be pleased 
to answer any questions you or the subcommittee members may 
have.
    [The information follows:]

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    Mr. Price. Thank you.
    We do have a vote on the floor, and perhaps I am told a 
series of votes, so we are going to have to ask for your 
indulgence and come back and forth as required on the House 
floor.

                          COOPERATION FROM DHS

    There is one focused area that is of concern that perhaps 
we can ask you to respond to before we break to go to the 
floor, and that has to do with the matter Mr. Walker has 
already brought up briefly; that is, the question of your own 
access to the information that you need to do your jobs at DHS.
    As you probably remember, at last year's hearing about this 
time this was a major theme, the poor cooperation you were 
getting from DHS. Mr. Walker said, and I am quoting, ``DHS has 
been one of our persistent access challenges.'' You suggested 
that we think about conditioning appropriations on DHS taking 
certain actions regarding GAO and GAO access.
    The Inspector General talked about problems he was having 
with the Coast Guard in particular.
    Well, we did hear those reports, and the omnibus bill, as 
Mr. Walker noted, does include bill language withholding $15 
million from the Office of the Secretary and Executive 
Management until the Secretary revises Departmental guidance 
with respect to relations with both the GAO and the IG, 
including expediting timeframes for documents requested and for 
interviews.
    So I would like to ask you to update us on the status of 
this effort. Mr. Walker, you began to talk about this. Maybe 
you could elaborate. What is the status of the revised 
Departmental guidance? Have you seen it? Have relations with 
the Department improved since last year in ways that you can 
measure and indicate? Thirdly, are there any new problem areas?
    Mr. Walker. Mr. Chairman, we have not seen the draft 
revised guidance yet. We know the Department is working on it.
    Our relations have improved since last year. The number of 
delays and the extent of the delays have decreased, but we 
still have an issue. A lot of the issue has to do with the fact 
that one has to take a more risk-based approach in determining 
how many people need to be involved before GAO gains access to 
certain information and individuals.
    As I have said in the past, the Department historically has 
had too many people involved, too many players, too many layers 
and that by itself leads to delays and too many times in which 
the lawyers had to be involved.
    I am confident we can work something out, but unless and 
until I end up seeing a document and we start interacting on it 
it would be premature to say much more.
    Mr. Price. Mr. Skinner.
    Mr. Skinner. I must say since last year at this time when I 
testified the cooperation that I am receiving from the 
Department has improved very noticeably. As a matter of fact, 
with one exception, in one component, it has been outstanding.
    We are still experiencing some cooperation issues with 
FEMA, particularly since Hurricane Katrina struck. I am working 
very closely and am engaged in conversations with the FEMA 
Director and Deputy Director and DHS counsel to work out 
problems that we are currently experiencing and to establish 
some protocols to ensure that we can move forward. All in all, 
on a Departmental level it has really improved and it has been 
outstanding.
    With regards to the Secretary's letter to the Department, 
that has been shared with us in draft. We are working with the 
Department, and hopefully by working with them we can get a 
letter out to the employees throughout the Department sometime 
in the very near future.
    Mr. Price. On the FEMA matter, I wonder if you could 
elaborate a bit.
    I understand this, among other things perhaps, involves 
restricted IG access to financial management reports. These 
were reports that I think were routinely given to the IG until 
a short time ago. Could you elaborate what the remaining 
difficulty there is?
    Mr. Skinner. That is something that I, as a matter of fact, 
just as late as yesterday, was talking about with the Deputy 
Director.
    It is a series of reports, very important reports. They tie 
together program performance and financial performance of 
FEMA's disaster programs. It is a tool that was developed I 
think, in the late 1990s. The OIG always had access to the 
reports up until approximately a year or two ago.
    We have been asking for access for the past year, and that 
is one of the things that has delayed a lot of our work and has 
caused a lot of consternation not only on my staff, but also on 
FEMA's staff because now they have to produce these reports for 
us, when in the past we were able to get direct access.
    It is my understanding that beginning this week we will get 
access to those reports again, based on the conversations that 
I had yesterday with the FEMA Deputy Director. We will continue 
our dialogue on other issues that we think we need access to as 
well.
    Mr. Price. All right. We are going to have to go to the 
floor. We hope it will not be for too long. We will be in 
recess until we return.
    [Recess.]
    Mr. Price. The subcommittee will resume.
    To both of you, thank you for your answer on the question 
of access to the information that you need. Obviously we will 
be watching this along with you. We will appreciate being 
updated if anything materially changes about the kind of report 
you have given today.
    We especially want to follow this FEMA matter and make sure 
that that gets resolved. Of course, we will have a decision to 
make about when the compliance has been sufficient to warrant 
the release of appropriated funds.
    Mr. Rogers.
    Mr. Rogers. Thank you.

                          MANAGEMENT PERSONNEL

    Mr. Skinner, in your report you talk about the shortage of 
personnel in management, and in the 2009 budget request they 
are asking for almost $50 million to support 77 additional FTEs 
to enhance an array of Departmental functions, including 
policy, planning, communications, financial management, project 
management and compliance with privacy and civil rights laws.
    In addition, there are notable requests for additional 
staff for grants management and evaluation, 10 FTEs, and 
expansion of counterintelligence efforts, six FTEs. Those are 
directly related to many of the items that you identified as 
management challenges in your January 2008 report.
    Their ability to hire and retain qualified staff in 
critical positions has been a persistent issue with us over the 
years. How do you judge their budget requests in these areas 
relative to what you think ought to be done?
    Mr. Skinner. I am pleased that the Department has 
recognized that they need to invest in its management support 
functions, particularly in the areas that I just addressed, 
because we were shortchanged when we stood up in 2003, and each 
year--the first two or three years, I believe--we were spinning 
our wheels.
    In these past two to three years, in 2007, 2008 and now in 
its budget request for 2009, the department has recognized the 
importance of investing in these activities.
    What would be the magic number in terms of what ought to be 
done? We do not have that, but they most certainly could use 
additional resources in all these management support areas, 
particularly in grants management, in IT management and 
acquisition management. In grants management, for example, the 
department is in a good position right now, using a risk-based 
approach, to allocate its funds. It is organized under a single 
umbrella--operating right now under two systems that will be 
integrated in 2008 under one system--so we are good in 
advertising, receiving and reviewing applications, and awarding 
grant funds.
    Where we are very weak, and where we could use additional 
resources, and 20 or 30 people will not do it, is in the area 
of oversight, after funds are awarded, from both a financial 
performance perspective.
    Mr. Rogers. Do you think----
    Mr. Skinner. But I believe this is a good sign we are 
headed in the right direction.
    Mr. Rogers. But you are unwilling to say that it is enough?
    Mr. Skinner. In grants management? Quite frankly, I do not 
believe----
    Mr. Rogers. No. I mean overall.
    Mr. Skinner. Overall?
    Mr. Rogers. Yes.
    Mr. Skinner. I think we could in fact use additional 
resources, particularly in the area of acquisition management. 
That is something that we are very, very weak in.
    The problems that we are encountering in that arena is 
problems that the government as a whole is encountering. We are 
competing with other departments. There is just not enough 
qualified people out there right now.
    Mr. Rogers. Well, DHS has always had hiring problems and 
problems in retaining quality staff in what we call core 
competency positions--financial management, project management 
and the like. How come?
    Mr. Skinner. In acquisition management, again I believe 
there is a history here. We could take you back to the 1990s 
when we downsized in government as a whole. The people that we 
targeted were the people in the area of acquisition management, 
financial management, IT management. These are the areas that 
were downsized.
    Now we are realizing that we have a greater dependence on 
contractors to get our work done, just not in DHS, but across 
the government. We now have a responsibility to provide and 
produce reliable, accurate financial information not only to 
the Secretary, but the Congress and to the public.
    It is a core competency. It just was not there inside the 
Beltway. That is now being rebuilt, and that will take time. I 
do not believe the Department of Homeland Security is any worse 
off than any of the other departments in this arena, in this 
area.
    Mr. Rogers. Mr. Walker.
    Mr. Walker. In some of the areas that you talked about, Mr. 
Rogers--you talked about information technology, financial 
management, some of these areas--there is a supply and demand 
imbalance, in general, with regard to being able to attract and 
retain an adequate number of people in government in those 
areas.
    However, I do think that the Department of Homeland 
Security has some other elements that complicate their 
situation. First, they have a lot of leadership positions that 
are open. They have a lot of turnover. In addition, their 
employee morale has not been very good and so these factors 
tend to complicate an already difficult supply and demand 
situation for these type of skills.
    When you have other places you can go, you may rather go to 
a place that you are going to have more continuity of 
leadership and a better morale situation, so that is why it is 
important that they start dealing with some of these underlying 
challenges.
    Mr. Rogers. Do you have an opinion about the personnel 
requests in the 2009 budget?
    Mr. Walker. Mr. Rogers, I have not studied it, nor have we, 
but the numbers that you gave me that you mentioned before 
were, as I recall, $50 million for how many positions?
    Mr. Rogers. Well, 77.
    Mr. Walker. That is almost $600,000 per position, so 
something is wrong. I know you cannot make that much in 
government firsthand.
    Mr. Rogers. Well, the $50 million is not just for the 
personnel. It is for a number of other things.
    Mr. Walker. Right. It sounds----
    Mr. Rogers. But it includes 77 additional FTEs.
    Mr. Walker. Yes. I do not know what all it includes, Mr. 
Rogers. There is little doubt in my mind that they need to 
enhance capacity in certain critical areas like financial 
management, acquisitions.
    Whether or not that proposed plan and the amounts are 
reasonable, we have not looked at it so I really could not 
opine on it.

                                  FEMA

    Mr. Rogers. Well, the first concern identified by the IG in 
the January 2008 report on management challenges was 
catastrophic disaster response and recovery, i.e., FEMA.
    The 2009 request includes $213.5 million for an additional 
357 FTEs for FEMA specifically to modernize IT systems, improve 
critical infrastructure within FEMA, enhance field personnel 
for disaster operations and logistics management. In short, it 
is part of the FEMA Vision Initiative and part of the efforts 
to rebuild and reshape the agency since Katrina.
    How do you see those increases, Mr. IG?
    Mr. Skinner. I believe that again these are needed 
resources. I believe that FEMA has done an excellent job in 
identifying where those needs are and how funds need to be 
allocated, as well as resources.
    I would like to point out, however, when we are talking 
about catastrophic disasters that FEMA and the federal 
government was never, ever prepared to deal with a catastrophic 
disaster. These are new initiatives.
    I believe Katrina taught us a lesson that we need to start 
investing in our infrastructure to ensure that we do not repeat 
our performance after a catastrophic disaster such as Katrina.
    You mentioned 300 plus. Let us not forget the 500 plus that 
we hired during 2008 as well, particularly in the areas of 
acquisition management and other areas of preparedness, so this 
is in addition to.
    You cannot do it all within a 10 month or 12 month period. 
It has to be done incrementally. It has to be done in a very 
disciplined way, and I think that is the approach FEMA is 
taking.
    Mr. Rogers. Mr. Walker.
    Mr. Walker. Mr. Rogers, the only thing that I would suggest 
that this subcommittee may want to take a look at is what is 
their plan for the number of permanent staff who will be 
focused on this versus their contingency plan because by 
definition you do not want to staff up for more than you can 
use on a recurring basis.
    You want to have enough staff to be able to get your job 
done in normal circumstances, and then you want to be able to 
have a contingency plan such that you can mobilize and activate 
other staff to bring to bear for a major disaster, which will 
occur from time to time, but that is not the norm. You do not 
want to build that into your base.
    I do not know how they have gone about doing that, but that 
is an area that I would encourage you to take a look at.
    Mr. Rogers. Thank you.

                    INFORMATION SHARING CAPABILITIES

    Ms. Roybal-Allard [presiding]. Mr. Walker, in January 2007 
GAO stated that, and this is a quote, ``The federal government 
still lacks an implemented set of policies and processes for 
sharing terrorism information.'' Then it goes on calling poor 
information sharing, and again a quote, ``a major vulnerability 
exposed by the 9-11 attacks.''
    Several of my local first responder agencies support this 
finding and have expressed concern that the Department limits 
the ability of a state to fully utilize the Fusion Centers as a 
means to improve information sharing. They specifically cite a 
bulletin, IB-235, which limits the time an Information Sharing 
Analyst can serve in the center as a cause of the understaffing 
of Fusion Centers.
    Has the Department implemented a set of policies and 
processes to improve its information sharing capabilities, and 
do you agree that the Department policies have led to an 
understaffing at Fusion Centers?
    Mr. Walker. I cannot speak directly to the Fusion Centers 
because I have not been given information relating thereto. 
Unless my staff passes me something, I will have to provide 
something for the record on that.
    I do know that progress has been made with regard to 
information sharing, but, as you know, that is not just an 
issue with DHS. That is a governmentwide high risk area of 
which DHS is one of a number of players who are on the field 
with regard to that.
    Additional progress has to be made. I will be happy to look 
into that specific issue and provide something for the record.
    I think it is also not just an issue of trying to make sure 
we have the right type of information that relates to 
actionable intelligence in order to try to prevent a problem. 
We also need to be concerned with privacy.
    One of the things that we have recommended as well is that 
each of the major components need to have privacy officers, in 
our view, to help achieve that balance.

    INVOLVING STATE AND LOCAL GOVERNMENTS IN DETERMINING INVESTMENT 
                               PRIORITIES

    Ms. Roybal-Allard. Mr. Skinner, in many cases state and 
local governments really are in the best position to identify 
threats and vulnerabilities in their transit systems. 
Therefore, there is concern that the Transportation Security 
Agency, in cooperation with FEMA, are not sufficiently 
involving state and local governments in determining investment 
priorities.
    What has been done to address that concern, if anything, 
and do you believe that the current level of cooperation 
between state and local officials is sufficient to identify top 
investment priorities?
    Mr. Skinner. First let me say I do not believe that, right 
now, the type of cooperation and collaboration and partnerships 
that the department has with state and local governments is in 
fact sufficient. I do not think it is. We have a long way to go 
to improve our relationships with state and local governments.
    I believe that we are headed in the right direction, or I 
believe FEMA is headed in the right direction. The recent 
national framework for disasters, the response framework, is a 
step forward or a step in the right direction. It recognizes 
the role state and local governments have to play in a federal 
response and recovery or disaster response and recovery 
operation.
    We have a long way to go. I believe FEMA recognizes that it 
has a long way to go, and I think there are initiatives 
underway now to do a better job of engaging state and local 
governments. Time will tell how successful we are.
    Ms. Roybal-Allard. Okay. I know that you wanted to add 
something, but I only have about three minutes to get to a 
vote. If you could just add that to the record or perhaps 
respond when the Chairman returns?
    Mr. Walker. I would be happy to.
    Ms. Roybal-Allard. I apologize. I have three hearings going 
on at the same time, so I will not be back to hear an answer.
    Mr. Walker. I will say it later in the hearing. Thank you.
    [Recess.]
    Mr. Price [presiding]. The subcommittee will resume. I hope 
you gentlemen are impressed with our efficiency around here. We 
are making the best of a problematic situation, you might say.
    Mr. Walker. It is a tag team, Mr. Chairman.
    Mr. Price. A tag team. That is right.
    I understand there is an answer pending for Ms. Roybal-
Allard, so please go ahead and do that, and then I will have 
some questions of my own.

                             FUSION CENTERS

    Mr. Walker. Mr. Chairman, Ms. Roybal-Allard asked about 
Fusion Centers, and I noted that we have recommended that the 
government needs to clarify its role in connection with Fusion 
Centers.
    You know, one of the most fundamental things is how do you 
define what a Fusion Center is because to the extent that that 
is not well defined and if the government plans to have more 
involvement then it is critical that that be done sooner rather 
than later.
    Furthermore, especially if the Department plans to provide 
some resources to support these Fusion Centers, whether they be 
intelligence analysts, financial resources or whatever else, 
one has to guard against the tendency that when state and local 
governments find out that the federal government may have some 
money to spend that all of a sudden things become whatever the 
federal government is willing to fund, like Fusion Centers.
    So we need to clarify what they are, what one is trying to 
accomplish, whether and to what extent the federal government 
is going to play a role and provide resources and provide 
safeguards to make sure that they result in a desired outcome 
rather than just traditional flows of funds.
    Mr. Skinner's, I think, operation may actually be doing 
work on that issue.
    Mr. Skinner. That is correct. We are in the middle of doing 
a review of Fusion Centers around the country as we speak, and 
hopefully later this year we will be able to provide a report 
on exactly what is a Fusion Center and what is the federal 
government's role in participating in these state and local 
initiatives.

                          FINANCIAL MANAGEMENT

    Mr. Price. Thank you. Mr. Skinner, let me continue with you 
on the question of financial management, which you touched on, 
but I want to ask you to elaborate.
    As you recall, you told the subcommittee that if the 
Department stayed focused and hired the right people and 
implemented corrective action plans for its financial 
management systems then maybe in 2009 they could achieve an 
unqualified financial audit.
    You briefly updated us in your statement about the uneven 
progress across the agency in reaching this state. I gather 
that your answer is this is not possible by 2009 mainly because 
of the Coast Guard problems that you cited, but I would ask if 
I could ask you to elaborate on that in light of the broader 
conditions you laid down and the broader assertion that you 
made this morning.
    Your testimony states that FEMA's financial management has 
deteriorated in the past year as well, so I wonder if you could 
elaborate on what the major problems are that you see and what 
can be done to fix them and how do we get to the status that we 
would like to see in terms of an audit?
    Mr. Skinner. Yes. Right now with the conditions that we 
have at the Coast Guard and the lack of progress we are having 
at the Coast Guard, at the earliest, the Coast Guard does not 
believe that they will be in a position to offer reliable 
financial statements until the year 2011.
    They are an integral part of the Departmental's overall 
financial statements, the preparation, and our audit of the 
financial statements. Without the Coast Guard, we are not going 
to be able to give an unqualified or a qualified opinion to the 
Department until, at the earliest, 2011.
    With regards to FEMA, there has been some backsliding, and 
I attribute it to two things. One is Hurricane Katrina and, 
secondly, the reorganization or the realignment of the grant 
programs under FEMA.
    FEMA recognizes its problems. The Department, the Office of 
the CFO, has also recognized the problem and is helping FEMA 
work through them. FEMA has developed corrective action plans, 
and if they stay focused this year, we are comfortable that 
FEMA will be able to produce auditable financial statements 
next year. The plan is at this point in time to correct these 
problems this year.
    One of the things, if you look at DHS as a whole, if you 
take the military out, i.e., the Coast Guard, the civilian side 
of the house has made tremendous progress. FEMA has backslided, 
but we think we can get them back on track.
    You have CBP preparing full statements that are 
unqualified. You have FLETC preparing full statements that are 
unqualified. You have ICE, who in 2003 was in the worst 
condition of everyone, including the Coast Guard, and they have 
now brought themselves up to where we believe we can give them 
a qualified opinion this year on their balance sheet.
    You have TSA, who has experienced some problems, and most 
recently their problems are associated with the Coast Guard 
because they have transitioned onto the Coast Guard platform. 
As a result, the Coast Guard has written certain what they call 
scripts, and they did not leave an adequate audit trail.
    Once we identify those scripts and determine the impact 
they will have on the financial statements, we think we will 
have a qualified opinion or an unqualified opinion in a year or 
so on full statements for TSA.
    Everything on the civilian side of the house is starting to 
look up. The Office of the CFO, under the leadership of David 
Norquist, has done what I think is just a yeoman's job of 
pulling things together.
    Our frustration is over at the Coast Guard. No progress in 
three years. The current outline--I cannot even call it a plan, 
but their current outline--suggests that they will not be able 
to address or correct their problems until the year 2011. That 
will have a major impact on the Department as a whole.
    Mr. Price. What can you give as an explanation for this or 
advice about how this process can be moved along?
    You know, there have been multiple challenges at the Coast 
Guard. Some of them, such as contract management, they have 
made very obvious efforts to correct. It is distressing to hear 
that you use the words no progress on an area of financial 
management.
    2011 is a long time. That is a long timeline to get these 
matters corrected. What would you suggest to the committee in 
terms of our approach?
    Mr. Skinner. I believe before the Coast Guard can do 
anything, they have to develop a detailed performance plan with 
milestones to clearly show where they are today, where do they 
expect to be in six months, where will they be in nine months, 
where will they be a year from now. That does not exist, so we 
cannot really hold them accountable as to what progress they 
are making.
    We need to understand that these are longstanding problems. 
We have gone back as early as 1994 and pulled an OIG report 
when they were with the Department of Transportation, and 
identified these exact same problems. These are not new 
problems.
    It is the first time the spotlight has been shined on their 
financial management capabilities. They were always able to 
operate under the radar screen with regard to their financial 
capabilities. Now that they are with the Department they have 
become an integral part of its financial statements.
    One of our frustrations is just the turnover that they 
continue to have in the Coast Guard because the financial 
management function is actually led by military types, not 
civilians. Every three years there is a turnover.
    I have been here now going on five years, and I have gone 
through three CFOs. I am about to be introduced to the third 
CFO at the Coast Guard. There is a tendency to come on board, 
look at the situation, blame your predecessor, develop some 
PowerPoint slides of what you are going to do, and, then, Step 
3: is prepare for your next assignment.
    These people are military people. There is no continuity 
there. Their goal is to move on to what they can do best, and 
that is in the operational side of the house, not the financial 
management side.
    Mr. Price. That does raise the question. On what are you 
basing the 2011 prediction? I mean, what reason is there to 
think that things will get better? Of course, the other 
question is what would be a reasonable timeline for expecting 
some of these improvements to be implemented?
    Mr. Skinner. Therein lies our frustration. In 2005 we 
thought 2009 was a reasonable period of time to pull all this 
together, but there has been no progress. Each year it is just 
pushed out another year. Last year it was pushed out to 2010, 
and this year it is now pushed out to 2011.
    Some of the things that we believe that can be done to help 
them move along is to approach it in an incremental fashion; 
that is, to pick out two to three material weaknesses and 
develop workarounds and fix those problems while we are fixing 
the bigger system problem. We can do workarounds in several 
areas, such as fund balances with Treasury.
    Something that simple you would think would be something 
you would be able to do in one year, as opposed to trying to do 
it all at once, then turn on the light and pray that it works.
    Mr. Price. Mr. Walker.

                   CIVILIAN CFO FOR U.S. COAST GUARD

    Mr. Walker. Mr. Chairman, one of the things the Coast Guard 
may need to consider is whether or not they should have a 
civilian CFO. I mean, it is one thing if you have military 
billets by definition and you are going to have two to three 
year rotations built in.
    Merely because it is a civilian CFO who may have the 
requisite qualifications does not guarantee that they are going 
to stay long-term, but at least they are not preprogrammed to 
leave.
    Mr. Rogers. Mr. Chairman.
    Mr. Price. Yes?
    Mr. Rogers. This is no new problem. I remember raising it 
when Secretary Ridge was involved at the Department. It is not 
a new problem.
    Mr. Price. That is correct.
    Mr. Rogers. It should have been corrected many years ago, 
and I think the only answer really is a civilian tenured CFO.
    Mr. Price. Well, particularly if the use of Coast Guard 
personnel does lock the Coast Guard into this kind of 
inevitable rotation if that cannot somehow be qualified or an 
exception made.

             ABILITY TO IDENTIFY AND DEPORT CRIMINAL ALIENS

    Let me ask you both about an ICE matter, that is the 
deportation of criminal and other high risk aliens. I 
appreciate you both chiming in on this. Mr. Skinner, I am 
referencing, though, your identification in 2006 of significant 
gaps in ICE's ability to identify and deport criminal aliens.
    You recommended that the Department ``develop a detailed 
plan to provide ICE with the capacity to detain, process and 
remove illegal aliens that pose a national security or public 
safety risk to the U.S.''
    In spite of that recommendation, between 2005 and 2007 
deportations of noncriminal aliens increased 59 percent, while 
deportation of criminal aliens increased only seven percent, 
and this despite the fact that criminal aliens are generally 
already in custody at a prison or jail.
    As you know, this committee took this on in our 2008 
appropriations bill. We provided $200 million and a mandate for 
ICE to create a plan specifically focusing on comprehensive 
identification and removal of aliens convicted of dangerous 
crimes, held in prison and judged deportable. Whatever else the 
agency is doing in the realm of deportation, this surely should 
be at the top of the list.
    I wonder how you would design such a strategy? What should 
we look for when reviewing the plans that ICE delivers? We 
frankly do not fully understand why ICE has not been able to do 
more to identify and remove criminal aliens, even though it has 
dramatically expanded its deportation of noncriminals.
    It would seem that whatever differences we have on 
immigration in this country, and of course we have many, this 
is not something that we ought to be having a lot of arguments 
about. This is something that presumably would receive almost 
unanimous agreement.
    It is not totally understandable why more has not been 
done. We hope that what we have done will move the process 
along. Anyway, we would appreciate your views at this point 
about what DHS could be doing, should be doing to identify 
criminal aliens, put them on the top of the list for 
deportation, that relative to other immigration enforcement 
issues.
    Mr. Skinner. I can assure you, you are not going to get an 
agreement from ICE that this is something that should be done. 
I believe that they will agree that this is something that 
needs to be done.
    Currently, and we have not looked at this, so I want to be 
careful that I do not send the wrong signal, but I am aware 
that ICE is developing a strategy, and it involves outreach, 
identifying the detention facilities at state levels, at the 
local levels, and develop MOUs with these facilities so that we 
can do a better job of identifying who these folks are so that, 
when they are subject to release, we can be there waiting for 
them and escort them to the nearest airport so that they can be 
deported.
    There is a long way to go with this program, and a lot of 
it deals with outreach, and every state and every local is 
going to be different, every agreement is going to be 
different, and to get cooperation and participation at the 
state and local level is probably one of the biggest hurdles 
that ICE is going to be faced with. But I do not think it is 
something that they object to; it is just a matter of 
resources, and it is a matter of focusing on this particular 
issue.
    Mr. Price. Focusing and having a workable plan. It is not a 
simple matter, I suppose, to establish a liaison with prisons 
at various levels across the country. Nonetheless, it is a 
challenge, a logistical challenge, presumably, one they have 
not recognized and met in the past. We hope it now happens. I 
understand, too, that the agency is not, in principle, opposed 
to this kind of priority, but they certainly have not acted on 
it very effectively either.
    Mr. Walker.
    Mr. Walker. Obviously, this is a very important topic. 
There are three basic elements that they have to achieve. One 
is they have to identify the relevant players, and that has got 
to be done in conjunction with state and local law enforcement 
authorities.
    Secondly, after they identify the players, they have to be 
able to be notified by the state and local authorities when the 
terms or the sentences are up for the applicable individuals.
    Thirdly, they have to further coordinate with state and 
local authorities to make sure that somebody escorts them 
across the border or out of the country at the appropriate 
point in time.
    Now, there are a lot of incarceration facilities in this 
country at the state and local level, and so part of the 
question is, what can be done to coordinate, either at the 
state level, or what can be done to coordinate through various 
associations or other entities that might exist so they can 
help with this effort, and you have a real partnership approach 
because, otherwise, I think you are likely to have a real 
resource problem within the Department?
    If they are trying to deal directly with each individual 
facility, that is going to be virtually impossible. So the 
question is, what are they trying to do, in partnership, to 
make sure that they are not having to deal with each individual 
facility, that it is being coordinated either at the state 
level or otherwise, to try minimize the related burden.
    Mr. Price. Thank you. Mr. Rogers.

               DHS TRANSITION TO THE NEXT ADMINISTRATION

    Mr. Rogers. Let me talk with you about transition for the 
next administration. Many experts are worried about the 
Department's ability to maintain operations during the upcoming 
transition to the new administration, especially in view of the 
fact that we have had difficulties in the past in hiring and 
retaining qualified people for these top positions.
    In 2007, early 2007, in response to a Presidential 
Executive Order, DHS initiated a transition plan, the bulk of 
which was to insert career professionals underneath each and 
every political appointee, who would maintain continuity of 
operations during a turnover. Have either of you evaluated that 
plan and determined how good it is?
    Mr. Skinner. Sir, I have not evaluated it, but the then-
Deputy Secretary, Michael Jackson, did share that with me 
before his departure. One of his last assignments, so to speak, 
before he left, was to ensure that we had a documented 
succession plan, wherein all departing politicals would be 
identified, and who would be next in line. In every component 
within the Department, a career person who would have to take 
charge has been identified?
    I know that transition planning is something that the 
Secretary takes very seriously. He has developed a framework. I 
think Mr. Walker may be able talk to the contents of that 
framework as to where we are proceeding, to ensure that there 
is a smooth transition.
    Transition planning is important for the government, 
period, but I think it is particularly important for DHS. We 
are a very fragile organization. We are new, and it is very 
important that we identify those programs that we need to keep 
on track, so to speak.
    Mr. Rogers. Well, it is a matter of national security.
    Mr. Skinner. Exactly.
    Mr. Rogers. During a transition period, under normal 
circumstances in some of the Department, there is a period of 
several weeks, perhaps months, where that Department is 
practically incapable of making a decision because of holes in 
the leadership. We cannot afford that in Homeland Security.
    The Secretary tasked the Homeland Security Advisory Council 
to establish a task force to recommend best practices for a 
transition, and, in January, that task force issued a lot of 
recommendations stating obvious things DHS ought to be doing. 
The question is, are they doing them? I wonder what you think 
of the advisory committee's report and whether their 
recommendations are being followed, both of you.
    Mr. Walker. Well, first, let me note that this will be the 
first Presidential transition that DHS will go through. They 
are involved in safety and security issues, which is most 
fundamental with regard to the federal government's role, and, 
therefore, there is an increased sense of urgency that they get 
it right.
    To me, the real key is, are they focused primarily on what 
are the major mission and management initiatives? Do they have 
that laid out? Do they have responsibility and accountability 
identified? Do they know who is going to be responsible and 
accountable who is a senior career executive, and what type of 
bench strength do they have to back up that senior career 
executive, given the fact that they can leave, too?
    Mr. Rogers. Those are the questions I had of you.
    Mr. Walker. And the answer is, I have seen a framework that 
the Department of Homeland Security has put together in a good-
faith attempt to try to achieve what I am talking about, and I 
was impressed with their initial framework, but it was an early 
draft.
    I have not seen the final document, but when you get right 
down to it, you need to know what your policies and procedures 
are, but the most important thing is, whose belly button do you 
push? Who is responsible and accountable, and do they know it, 
and are they prepared to execute, and what type of bench 
strength do they have to back them up, in the event that 
something happens to them?
    Mr. Rogers. Well, the task force, in their January report, 
issued multiple recommendations, including ensuring for a 
standardized approach to threat determination and awareness 
during transition, providing presidential nominees with best 
practices and lessons learned from other leadership 
transitions, and working with the Senate to establish an 
expedited process for handling new appointments under the new 
administration.
    Those are fairly obvious things. What do you think?
    Mr. Walker. Let me, if I can, touch on the last one, and I 
realize that this body is not involved in the confirmation 
process, but I am sure that you have friends on the other end 
of the Hill.
    I think one of the things that we really have to be 
concerned about is how long is it going to take to be able to 
fill these critical positions that are presidential appointees 
with Senate confirmation in order to minimize the amount of 
time that you have acting players discharging responsibilities.
    There are a lot of great career civil servants, some 
outstanding and dedicated professionals, but, by definition, 
when you are acting, and you are not confirmed, then you are 
going to do what you have to do, but you are not going to 
really do much more than that. That is just the way that it 
works. That is called ``human nature.''
    I think that one of the things that the Congress needs to 
think about is to recognize that we have three kinds of 
presidential appointees that historically have required Senate 
confirmation, and they need to be treated differently.
    You have ones that involve policy and, therefore, ought to 
serve at the pleasure of the President, be subject to Senate 
confirmation, with no statutory qualification requirements.
    Secondly, you have ones that are operators that are in key, 
management and functional areas like financial management, 
information technology, et cetera, or operators from the 
standpoint of a major agency, if you will, component, and for 
those types of people, you want statutory qualification 
requirements. You want to make sure you are getting people who 
really can discharge the responsibilities with Senate 
confirmation, and, in some circumstances, you may want a term 
appointment for those jobs.
    And then, last, you have adjudicatory positions, positions 
like the inspector general, the controller general, and judges, 
where you not only want statutory qualification requirements 
and a term appointment, or either a life appointment in the 
case of a judge, but you want strict, independence standards.
    I have a real concern, Mr. Rogers and Chairman Price, as to 
what is going to end up happening when we do have the known 
transition to the next administration, whichever administration 
that might be, and what is going to be done to try to move 
things along expeditiously, on a risk basis, with regard to 
some of the critical positions here.
    Mr. Rogers. What do you think of the HSAC's report?
    Mr. Walker. Mr. Rogers, I have not read that report, but I 
would be happy to do it. It just came out, as I recall. Didn't 
it just come out in January? I would be happy to do it, and I 
would be happy to provide something for the record on it.
    Mr. Rogers. Well, we are coming up on the transition pretty 
quick here.
    Mr. Walker. We are, and I will tell you this, if it makes 
you feel any better. We have been having informal meetings at 
GAO over the last three months with selected senior officials 
in the administration, including OMB, including Defense, 
including DHS, including the FBI, et cetera, to try to help 
coordinate efforts and facilitate communication between the key 
players in this area because it is critically important.
    Mr. Rogers. Well, I mean, the report is fairly substantial, 
and I would hope that we could get your evaluation of it.
    Mr. Walker. We will take a look at it. It is not as thick 
as most GAO reports.
    Mr. Rogers. I am not going to say this.
    Mr. Walker. I probably should not have said that. We have 
one-page summaries of ours, the highlights page.
    Mr. Rogers. I know my time has expired, but, Mr. IG, have 
you looked at it?
    Mr. Skinner. No, sir, I have not. It is something that I 
will be looking at this afternoon, however. But, no, I have not 
studied that particular report.
    I think it is important to note that, as we transition 
here, and we put the right career people in place, that we 
cannot just put them in there so that they can just hold the 
fort down until an appointee is confirmed. We have a lot of 
ongoing initiatives here that can falter or can fall apart. 
They are in a very fragile state of their development, and they 
are just beginning to have traction: the SBI Initiative, the 
Deepwater Initiative, and others that I mentioned in my opening 
remarks.
    It is important that we develop performance plans that can 
guide the career people to ensure that we do not falter and 
backslide during the transition period, and that is very 
important as well. It is a concern of ours that a lot of these 
things could falter.
    Mr. Rogers. Well, given the Department's history of not 
having people in a lot of these leadership positions, even 
without a transition involved, when you have got a transition, 
we need a patch between the old administration and the new so 
that we do not have vacancies in critical positions because we 
would be very vulnerable.
    Mr. Walker. Yes.
    Mr. Price. Thank you. Mr. Fattah.

                        HUMAN CAPITAL MANAGEMENT

    Mr. Fattah. Thank you, Mr. Chairman. There was $10 million 
appropriated for this human capital management system upgrade, 
and then there was a request for another $15 million. This 
ongoing problem around personnel in the Department--again, as 
Ranking Member Rogers said, not even dealing with a 
transition--it has been a challenge, with over a third of the 
top positions not filled.
    Are these positions not needed? Are we not paying enough to 
hire competent people? If you could cut to the chase and tell 
us how we can cooperate in solving this problem, and I will 
start with Mr. Skinner.
    Mr. Skinner. This is the first time I have heard that one-
third of our top positions have not been filled.
    Mr. Fattah. It was a newspaper report.
    Mr. Skinner. I believe we, at least as of September 30th of 
last year, had come very close to filling almost all of our 
positions, or close to 80 or 90 percent of our positions.
    Working in the Department of Homeland Security is not an 
easy job. You are under the spotlight every day. Your mission 
is critical. It is a very stressful environment in which you 
work. I think that is part of the contributing factor to why we 
see the turnover that we do see.
    Secondly, Homeland Security has become an industry in the 
private sector. A lot of these people who gained experience 
working within Homeland Security or within the federal 
government find better and greater opportunities outside 
government, at least from a financial----
    Mr. Fattah. Does that argue for more compensation?
    Mr. Skinner. We cannot compete, and we lose people, quite 
frequently, just for that very reason.
    I think what Mr. Walker hit on earlier is the environment 
and the underlying morale issues that we have within the 
Department, and we expect to have. You do not expect to stand 
up an agency with 22 different agencies and startups and expect 
morale to be high. It is something that we need to continue to 
focus on. I know that Secretary Chertoff--it is something that 
he is very concerned about, and it is something he is keeping a 
very close eye on and trying to engage employees and stimulate 
them so that we can address this morale issue.
    Mr. Fattah. Mr. Comptroller.
    Mr. Walker. Mr. Fattah, it is exacerbated by the fact that 
we have less than one year left in this administration, and the 
fact is, is that it is unlikely that you are going to see the 
Senate confirming players this late in an administration.
    It is also unlikely that you are going to see people come 
from outside of government to come into government this late in 
an administration, and, therefore, as historically has been the 
case, to the extent that you have open positions, you have to 
pretty much look from within in order to get those individuals 
to be able to take the jobs; all the more reason why it is 
critically important that their transition plan focus on senior 
career civil servants because we know they will still be here, 
unless they decide to retire, or unless they decide to take a 
private sector opportunity. That is why the plan has to be 
focused on senior career civil servants.

                    TSA PASSENGER SURCHARGE PROPOSAL

    Mr. Fattah. On a different subject, there is this TSA 
surcharge that is in the budget proposal, a new TSA passenger 
surcharge proposal, and the passenger security fee of 50 cents 
per emplanement. Is that in the administration's proposal for 
this year's budget?
    Mr. Skinner. Yes. I believe that was also proposed in prior 
budgets but was never implemented.
    Mr. Fattah. It did not survive.
    Mr. Skinner. That is correct.
    Mr. Fattah. Okay. Do you have any idea how much that would 
generate and where those revenues would go?
    Mr. Skinner. No, I do not, but the revenues would be 
reinvested back into TSA's programs to better secure airports 
and the passenger screening, cargo screening.
    Mr. Fattah. The budget detail suggests that it would 
generate about $400 million or so, which would be used for such 
a purpose. There is no surcharge now. Right? Is this a new 
surcharge or an add-on?
    Mr. Skinner. As far as I know, this is new.
    Mr. Fattah. Thank you, Mr. Chairman.

                               OIG BUDGET

    Mr. Price. Thank you. Mr. Skinner, let me ask you about 
your own budget for this next year. The president's budget 
request has your budget going down from fiscal 2009, from $108 
million to $101 million. What are the implications of that 
decrease? What activities would be affected? Is it something 
that should attract our concern?
    Mr. Skinner. Mr. Chairman, first, let me go on record that 
I fully support the President's budget. With regard to our 
budget, yes, our gross figure has been reduced from 
approximately $108 to $109 million to approximately $101 
million.
    Yes, that is going to have a profound effect on our ability 
to carry out a lot of the things that we just got started, 
particularly with regard to our oversight of FEMA operations 
and Gulf Coast operations. We have set up offices in Baton 
Rouge and Algiers, Louisiana; and Biloxi, Mississippi, to 
provide continuing oversight of the rebuilding of the Gulf 
Coast. This is going to have a profound impact on our ability 
to maintain those operations.
    Mr. Rogers. Well, over the years, the work on Katrina and 
its aftermath will surely tail off, but the capacity to deal 
with future disasters and to have the kind of capability that 
you have built up there seems to me to be something that we 
should not cut lightly. Is that mainly where the savings would 
come from, in the FEMA-related areas?
    Mr. Skinner. Yes. That is correct because the buildup that 
we had in 2008 and 2007 since Katrina, the increases in our 
budget were invested in providing oversight in disaster 
response, recovery, mitigation, and preparedness activities, 
not only in Katrina, but on a national scale.
    With the $7 million cut, the operation, and these will be 
policy calls--we have to do some assessments as to what we want 
to cut back on, but it will either have a direct impact on our 
ability to provide oversight for the Gulf Coast operations or 
our ability to provide oversight of FEMA operations and other 
disaster-response, preparedness, recovery, and mitigation 
operations.
    I would like to point out that the operations that we have 
down in Katrina are just beginning. People realize that it is 
going to start phasing out. Well, we just went through the 
response phase. Now we are in the reconstruction and rebuilding 
phase, and there is where the big dollars are going to be 
spent--rebuilding the bridges, rebuilding the infrastructure--
and there is where we are at right now.
    We are somewhat beyond the response issues. We still have 
the housing issues to deal with, and we are working with HUD on 
that, but, right now, we are going to start focusing our 
attention on the reconstruction, and that is going to take 
years.
    Mr. Price. That is very important for us to understand.
    Mr. Skinner. It is not going to go away tomorrow.
    Mr. Price. No, of course, not. It has budget implications, 
and then we have had all too many instances, in recent years, 
of fraud, waste, abuse being associated with recovery efforts. 
It seems to me, it is unlikely that we are going to need to do 
less scrutiny of this, rather than more, with regard to other 
disasters.
    I must say, what you said does not make me any happier or 
give me much greater understanding about this cut in your 
budget and how you would deal with it.
    Mr. Skinner. Also, as background, for 2007 and 2008, the 
increases that we received were not actually increases in our 
budget; they were transfers from the Disaster Relief Account, 
and that is what has been eliminated. Those were the funds we 
were using to provide oversight of FEMA operations in the Gulf 
Coast.
    Mr. Walker. Mr. Chairman, I think one of the things that I 
am sure that Rick is looking at, and, I would imagine, the 
subcommittee would, is when you are looking at what types of 
activities have to be done in the Gulf Coast, to the extent 
that you are talking about construction, then who is going to 
be the point on doing that oversight? Is that going to be the 
Department of Homeland Security, or is that going to be the 
Department of Transportation? Is that going to be HUD, et 
cetera?
    I think that is an issue that you have to look at. You need 
to make sure that there is enough money to do the right type of 
oversight, but the lead responsibility for who might be doing 
what might change at different phases of the effort.
    Mr. Price. The transfer of personnel; how many people were 
involved in that?
    Mr. Skinner. From our Office of Audits and Investigation, 
we transferred approximately 75 people, and that had a 
devastating effect on our operations, nondisaster operations. 
We have been in the process of rebuilding those offices over 
the last three years or two and a half years.
    Mr. Price. So this is how you set up the so-called 
``Emergency Management Oversight'' operation, the EMO 
operation.
    Mr. Skinner. Yes. Time is of the essence, as, Mr. Rogers, 
you well know because I testified immediately following those 
disasters. We did not have the time to go out and just start 
recruiting because that could take months to get people on 
board. So what I had to do is tap into our existing audit and 
investigative resources and transfer them to Katrina oversight.
    Mr. Price. All right. Can you just make very clear to us 
what the implications of this budget number are for that EMO 
operation, first of all; and, secondly, for the kind of 
capacity you are needing to build to compensate for the 
transfer of these personnel from your central operation? I do 
not fully understand the implication, in other words, of the 
budget numbers on what you are going to have going on the 
ground.
    Mr. Skinner. If we operate with this budget, at $100 
million, without transfers from the Disaster Relief Account, we 
are going to have to curtail--what I am doing right now is 
rebuilding our Office of Audits to bring it back to where it 
was pre-Katrina days.
    I either have to curtail that, which I would not like to 
do, or my other option is that I am going to have to curtail 
what we are doing down in the Gulf Coast, or I am going to have 
to curtail what we are doing in other areas of FEMA: providing 
oversight of other disasters, the floods that we had in 
California, or the tornadoes. We come in and stand up just days 
after these disasters to provide oversight to ensure that the 
offices are being set up properly, and everyone understands 
what their roles are, particularly at the state and local 
level.
    This is something I have to think through with my senior 
advisers--exactly where are these resources going to come from.
    Mr. Price. It is something we have to think through, too, 
obviously.
    Mr. Skinner. Regardless, it is going to have an impact on 
us right now, and since the cut--I do not want to say ``cut''--
the transfer, it has generally come out of the Disaster Relief 
Account. We do not have that, so that is the first place I am 
going to look at--what impact it is going to have on our 
disaster oversight?

                      NEAR TERM PERFORMANCE SOARS

    Mr. Price. For my last question, I want to ask you both 
briefly just to recap a bit on the near-term performance goals, 
organizational goals, you think this committee should be 
working with the Department to establish. You mentioned a 
number of such items in your statements.
    We had asked you, if possible, to each bring in four, in 
terms of prioritization. But I wonder if you could just 
telegraph for us, and then we can pick up from your statement 
and elaborate for the record the detailed content, but just so 
we have a fix on the kind of near-term goals you believe we 
should be looking at.
    Mr. Skinner. This was a tough assignment, because there are 
so many, to limit it to only four. It created a lot of debate 
in our office.
    Let me start with FEMA preparedness. I think it is 
absolutely essential that we keep a very close eye on the 
direction that FEMA is headed. I think they are headed in the 
right direction. There are a lot of dedicated people over there 
who are working hard to rebuild that organization. We cannot 
afford to have another Katrina, nor can we afford to be ill-
prepared for any other type of attack that we may experience in 
the upcoming years. That is one: FEMA preparedness.
    Two: I think it is also very important that we take a very 
close look at SBI, the Secure Border Initiative, and I am just 
not talking about the IT parts of the Secure Border Initiative.
    The Secure Border Initiative really involves several 
components within the Department: ICE, for their detention 
capability; CIS, as far as their ability to address the backlog 
of applications; and, particularly, CBP, which was to deal with 
infrastructure issues, IT issues, and new hiring issues--over 
2,000 people, I think, CBP asking for this year.
    The question is, if we bring in 2,000 people, we have to 
make sure that they are trained, that they are equipped, that 
they have a place to report to. Right now, we have facilities 
out there that cannot handle that many people, nor do we have 
supervisors who can handle that many people.
    So there are a lot of things that have to fit in place. The 
Secure Border Initiative is something that I think we need to 
keep a very, very close eye on, and so is the Deepwater program 
at the Coast Guard. They are at a very fragile state right now. 
This thing got started before DHS ws created.
    As a matter of fact, it got started back in the nineties, 
but the contractors were, more or less, directing the program. 
We found out that that got us in trouble. There were a lot of 
inefficiencies and a lot of waste, and, as a result, the Coast 
Guard has recognized that they need to take control of this 
initiative from the contractors. It is a 25-year initiative and 
a $25 billion initiative.
    They are in a transition right now in taking control of it. 
I think it is important that we pay close attention to how that 
transition goes, with some very clearly articulated performance 
plans with milestones so that we can gauge their progress and 
help them to make sure that these people are executing this 
program as intended, as the commandant intended it to operate.
    The fourth area, I would say, is the CIS backlog. We have 
got ourselves in a real jam here. There are two things at play 
here.
    One, CIS is living in the sixties and seventies, as far as 
their processes and systems are concerned. They really need to 
invest in their IT capabilities so that we can go paperless. We 
are still processing everything by paper, and it is very, very 
inefficient. They have developed a transition team, they have 
reorganized, and they are now focusing on their IT capabilities 
and how they can improve themselves in the out years, but that 
is just starting to get traction. That can falter, if we do not 
keep a close eye on that.
    Also, we still have this tremendous backlog that we created 
as a result of the increases in the rates for applications. I 
do not understand why we did not prepare ourselves. We should 
have anticipated that there would have been a big increase in 
applications, but we did not. The CIS did not. Now, as a 
result, they are living with a tremendous backlog. We need to 
be able to keep a close eye on this to ensure that this issue 
is addressed, that we can get that backlog down to a manageable 
level again. That is why, if you do not keep an eye on it, and 
if you do not stay focused, it could be five or six years 
before it's brought under control.
    Mr. Price. That, most certainly, is a near-term issue. What 
are the benchmarks there? What needs to happen before this 
administration concludes?
    Mr. Skinner. They need to bring in more resources, which I 
think they are attempting to do. We need to find programs that 
will entice people out of retirement without offsets. This 
would entice retired adjudicators and inspectors and reviewers 
to come back in to provide assistance. We need to develop 
training programs and have outreach so that we can get people 
coming out of college to assist. There are a variety of things 
they can do here to tap into this backlog.
    While they are doing that, at the same time, they need to 
be investing resources on developing their IT capabilities, or 
else we are going to repeat this two years down the road. If we 
had a good IT capability to intake, review, process and 
adjudicate, we may not even have a backlog, but we do not. We 
are very paper-oriented right now.
    Mr. Price. Thank you. Mr. Walker.
    Mr. Walker. Quickly, Mr. Chairman, four. First and 
foremost, a Presidential transition plan that focuses on 
critical players for all key projects and initiatives.
    Secondly, a high-risk and major-management-challenges 
action plan that also has appropriate responsibility and 
accountability mechanisms.
    Number three: FEMA's efforts in connection with major 
disasters; we have talked about a number of things that need to 
be done there.
    And, number four: Focus on key acquisition and contracting 
initiatives, for example, Deepwater, SBI, to be focused on 
those because they are large, they are important, and they are 
susceptible to increased risk because of transition 
difficulties.
    Mr. Price. All right. We look forward to working with you 
to flesh each of those out. Mr. Rogers.

                           GRANTS MANAGEMENT

    Mr. Rogers. I know you want to wrap this up because we are 
into the noon hour here. I will be brief.
    Grants management; we have talked about it somewhat here 
today. Let me delve into that a bit.
    It has been a longstanding concern about managing these 
first-responder grant programs because there is such a huge 
amount of money involved, and they are huge programs. But the 
Department is currently unable to answer the basic fundamental 
question of what have we bought for the $23.7 billion in grant 
funding that has been appropriated since 2002?
    It could be answered with a simple, itemized list of 
purchases, but a more complete and thoughtful answer ought to 
be in terms of a return on investment. What are we expecting of 
these people, and what are we giving them money for, and are 
those the right things to give them money for, and what sort of 
metrics, performance metrics, do we need to put in place that 
are not there now to measure whether or not we are doing what 
needs to be done?
    I do not feel good about the grant programs, how they are 
being managed, and whether or not we are sending money to the 
right places for the right things. Any thoughts?
    Mr. Skinner. Mr. Rogers, I could not agree with you more. 
If you recall, at my hearing last year, these are the issues 
that I raised with regard to grants management, and it is why I 
think it is one of the major management challenges facing the 
Department.
    We are spending billions of dollars, billions of dollars, 
but we are not doing it, in my opinion, in a very strategic 
manner. Many of our grant programs are stovepiped. We are not 
taking a more global, national perspective as to what we want 
to accomplish with these billions of dollars, and we do not 
have the metrics to demonstrate that we are, in fact, 
accomplishing what these grants were set up to do.
    We do a very good job of advertising our grants, as I said 
earlier, reviewing them, awarding the grants, and getting the 
funds, or making the funds available, to the states. We do not 
do a very good job--we do a very poor job--of actually 
providing oversight on how those funds are being spent, whether 
they are being spent for their intended purposes, or whether 
they are being spent wisely. We simply do not have the 
resources in place right now to do that.
    I understand that they have asked for additional resources; 
at least, I understand, 20 to 30 additional employees for 2008, 
and they are asking for 20 to 30 again in 2009. In my opinion, 
that is not sufficient to provide oversight, on a national 
scale, of all of the 30 to 40 different nondisaster grant 
programs that we have responsibility for.
    Mr. Walker. Mr. Rogers, one of the concerns that I have is 
that DHS not fall into the same pattern that the Department of 
Defense has fallen into over the past several decades, and that 
is, since the Department of Defense and the Department of 
Homeland Security are both in the business of safety and 
security, and they are the most fundamental things for a 
national government to do, you can have a mentality where it is 
get the money, spend the money, get the money, spend the money, 
and there can also be a circumstance in which the Congress 
feels compelled to provide more funds to show that it cares 
because these are very serious missions and very important 
missions to this nation.
    I think I come back to two words. Risk and resources. 
Everything we are spending money on ought to be based on a 
considered risk-based assessment because this nation has finite 
resources. We are mortgaging the future of our kids and grand 
kids at embarrassing rates, and we are not getting good value 
for money.
    So everything needs to be focused on risk, number one, and 
to really press them hard on how these monies are being 
allocated to mitigate the most risk with the available 
resources, recognizing that there are limits; and, secondly, 
performance metrics that ultimately lead to outcomes. What type 
of outcome are we trying to achieve? And you need to have 
performance metrics that will give you interim indicators, all 
geared towards trying to achieve a desired outcome.
    So risk and outcomes, and focus like a laser on those two 
things, I would respectfully submit.

                            FIRST RESPONDERS

    Mr. Rogers. I have the feeling, a rather strong feeling, 
that the Congress has failed to define what it is we want first 
responders to do in the context of national security.
    First responders, obviously, are local city and state 
organizations to protect the health and safety of their 
individual constituents. Fire departments are there to protect 
local people from the natural hazards of fire, police against 
local crime, and so on. EMTs have their chores.
    Very little of what they do, or what we are asking them to 
do, relates to national security, homeland security on the 
national level. Are we training them for the purposes that we 
are using them for? Are we paying them adequately to do that, 
and are we measuring whether or not they are trained and 
whether or not they are succeeding in doing what they are 
supposed to do?
    All of these cities and counties and states are hungry for 
money. Their budgets are worse than ours. The only difference 
is we can print, make money, and they cannot. So they are broke 
as well, and they are hammering us, politically in Congress, 
send more money, send more money to the first responders, and 
we respond to that. But I do not think that we have defined and 
told the first responders, ``Here is what we want you to do, 
and here is the money to do that and we are going to expect to 
see a measurable result in so many months or years or 
whatever.''
    We have not done that. I think that is our fault. But the 
Department has not given us very good indications of how to do 
that, and we have been wrestling with this now for, at least, 
five years, and I really have not seen any progress. In fact, I 
have seen it recede back. I think it is a shame, number one; 
and, number two, it is very dangerous.
    Mr. Skinner. Mr. Rogers, you are absolutely correct. Part 
of the problem that we are experiencing within the Department 
of Homeland Security is the mere fact that we are receiving 
large sums of money that we are asked to administer without 
doing our own adequate, internal planning and without the 
resources to administer those monies.
    So we are reacting. Every year, we are reacting to try to 
get the monies out to the state and locals that is appropriated 
this year. We have not stepped back and asked the very basic 
question: What outcome do we want? What is the purpose of these 
grant programs? Are we safer today? Are we better prepared 
today? How do we measure our progress?
    As Mr. Walker says, we cannot satisfy everyone, so what we 
have to do is prioritize based on risk. Many of the grant 
programs right now are risk based, as I mentioned earlier, Port 
Security, for example, Buffer Zone, but, nonetheless, those are 
stovepipe grants. We have never stepped back and looked at the 
big picture. We are focusing on establishing priorities for 
each individual stovepipe grant without stepping back and 
looking at what the priorities, on a national scale, are.
    Mr. Rogers. Who needs to do the stepping back and looking? 
Is it Congress, or is it the Department?
    Mr. Skinner. I believe the Department has that 
responsibility to do that. Right now, they need to catch their 
breaths and step back and say, ``If we are going to go forward 
with large, multibillion annual grant programs, then we need to 
instill in ourselves certain disciplines and processes so that 
we can make informed decisions and also demonstrate our 
successes here.'' We cannot do that now.
    Mr. Rogers. Do we need a law change?
    Mr. Skinner. I would not say so much that we need a law 
change. Grants management is not new. There are a lot of best 
practices out there. There is a lot of literature, both on the 
academic side and also on the operational side, as to how you 
can manage grant programs.
    Mr. Walker. Mr. Rogers, if I can jump in here, I would 
agree with virtually everything you said earlier, but I also 
think you have to put this in context. We are talking here 
about grant management within the Department of Homeland 
Security, and, clearly, it needs to be more risk focused, it 
needs to be more comprehensive and integrated with regard to 
the definition of ``risk,'' and it needs to be more outcome 
based.
    The level of detail that has to be not gotten into is 
something that, by definition, Congress should not do. That 
would be the point of micromanagement. But let me tell you what 
Congress should do that it has not done, and it is not just 
with regard to Homeland Security; it is virtually everything 
the federal government does.
    This government spends three trillion dollars a year. It 
forgoes revenues of $800 to $900 billion a year because of tax 
deductions, exemptions, credits, exclusions, and, for the most 
part, Congress never defines, when it passes a law or 
reauthorizes a program or enacts a tax preference, it never 
defines what outcome it is trying to achieve.
    What are we trying to achieve, and how are we, therefore, 
going to be able to hold those responsible for implementing 
those policies and programs accountable for whether or not, in 
fact, they are doing that?
    I will tell you, this government wastes tens of billions of 
dollars a year, at least, if not hundreds, because people are 
focused on getting the money, spending the money, doing the 
compliance rather than focusing on what are we trying to 
achieve? And we desperately need some key national, outcome-
based indicators that would drive decision-making not only in 
the Congress but also in the executive branch, and I would be 
more than happy, at some point in time, if you want to talk 
further about that, to do that.
    Mr. Rogers. Thanks.
    Mr. Price. Thank you. I do think this discussion is needed 
and would be useful. The administration's budget simply removes 
the funding for a lot of this grant activity, as opposed to 
trying to focus it in a more discriminating way, and, from the 
congressional side, I think your point is well taken.
    We often get a papering over of the kinds of goals that we 
are pursuing, partly because ever since this Department was 
established, we have been in the business of compensating for 
failures elsewhere in the budget to give the kind of support 
for first responders that they have called for and that we had 
in the nineties.
    That is not to say Homeland Security should become the 
repository for all of those requests and the kinds of goals 
that they are based on, but the political reality is that that 
has happened, to some degree, until the Justice Department 
programs, let us say, are put in a more robust, healthy state, 
then we are probably going to continue to have to deal with 
this politically.
    Your comments are certainly well taken as to the need for, 
on both sides of Pennsylvania Avenue, for a more articulate set 
of goals and measurable outcomes so that we have some way of 
assessing what we are doing.
    Thank you all very much. We appreciate your testimony. We 
will study it, and we look forward to consulting with you in 
the months ahead. Thank you.
    The subcommittee is adjourned.

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                                       Thursday, February 14, 2008.

                        LAND BORDER ENFORCEMENT

                               WITNESSES

ARVIN WEST, SHERIFF OF HUDSPETH COUNTY, TEXAS
CHAD FOSTER, MAYOR OF EAGLE PASS, TEXAS
JIM ED MILLER, MILLER BROS. FARMS, FORT HANCOCK, TEXAS
RICHARD S. WALDEN, PRESIDENT, FARMER'S INVESTMENT CO.
NAN STOCKHOLM WALDEN, VICE PRESIDENT AND COUNSEL, FARMER'S INVESTMENT 
    CO.
    Mr. Price. The subcommittee will come to order. Good 
afternoon, everyone. Today we review the Department of Homeland 
Security border enforcement programs, including its plans for 
fencing on the southwest border.
    I want to welcome five witnesses this afternoon, two of 
them public officials, Mayor Chad Foster of Eagle Pass, Texas, 
who is also chairman of the Texas Border Coalition; Sheriff 
Arvin West of Hudspeth County, Texas, who represents the Texas 
Border Sheriffs Coalition.
    In addition, we are fortunate to have the perspective of 
private citizens who are landowners and business people: Mr. 
Jim Ed Miller of Fort Hancock, Texas, and Richard and Nan 
Walden of Sahuarita, Arizona. How is that? We welcome you and 
look forward to your testimony.
    Last week in a speech entitled Why Washington Does Not 
Work, Secretary Chertoff said that implementing border security 
presented a structural problem, what he called a structural 
problem, one where those with an intense personal stake in a 
policy decision may have or try to have more influence than the 
great majority of citizens whose interest is more general. That 
is the way he framed this issue.
    For example, he argued that the cost of not building a 
border fence should be taken into account, including the impact 
of drug dealing in Chicago or the consequences of letting 
criminals or potential terrorists enter our country. These 
impacts, he argued, should be weighed against local opposition 
to a fence. In his words, a fence would be for the greater 
good.
    I would ask the witnesses who testify today to reflect on 
that; on whether DHS policies to secure the land borders of the 
U.S. seem to them to be consistent with the greater good of the 
United States. Do you see any conflict between achieving such 
goals and at the same time taking into account local conditions 
and needs? After all, many of you have lived on the border and 
in close proximity to Mexico for your entire lives.
    I hope and expect that you will have some ideas about how 
to address our broader goals, as well as about the fence's 
local impact.
    While the Secretary alludes to the costs of consultation, I 
believe he ignores the fact that consultation often can lead to 
an outcome that may be superior to what any single party could 
achieve independently. It also might satisfy some of those 
broader concerns, the concerns of a greater number of 
stakeholders.
    In other words, we are looking here for the proverbial win/
win solution. You cannot always find those solutions, but I 
think it is highly desirable in this case to explore all the 
possibilities.
    Last year the subcommittee traveled to the southwest border 
twice to learn firsthand the challenges involved in trying to 
secure almost 2,000 miles of diverse border land. We met Border 
Patrol agents and CBP officers on the ground. We saw mountains 
and deserts and the beautiful Rio Grande. We visited the area 
where the FBI Net Technology Project was being undertaken, and 
we observed operations of CBP air and marine.
    Of particular value were our meetings with local officials, 
and some of you were in on those meetings. We met with law 
enforcement personnel, with local elected leaders and citizens, 
and we heard concerns expressed about the prospects for 
extensive fencing through areas of great cultural, economic and 
environmental sensitivity.
    As a result, we incorporated language in the fiscal 2008 
appropriations bill to require the Department of Homeland 
Security to thoroughly justify its future projects and to 
participate in meaningful consultation with the communities 
involved.
    I hope we can discuss how well that legislation is being 
implemented today, what kind of implementation you would look 
for in the future, including provisions that require 
transparency, consultation and good stewardship in the use of 
public funding for such major and complex projects.
    So we look forward to your testimony this afternoon and to 
hearing your insights on how we can better manage the security 
of the border to the benefit of us all.
    Let me now ask our distinguished Ranking Member, Mr. 
Rogers, for his comments.
    Mr. Rogers. Thank you, Mr. Chairman, and we say welcome to 
our distinguished guests who have come so far to be with us 
today to share your views.
    I do not think I have to tell anybody here how important it 
is for Members of Congress to listen to those on the front 
lines, so to speak, the issues that we are responsible for 
addressing on behalf of the American people.
    I have often said that the desk, and in this case the dais, 
is a dangerous place from which to view the world, and that is 
certainly the case when we are talking about the issues of 
border security and illegal immigration issues that are as 
complex and important as they come.
    I am sincerely grateful to have before us today individuals 
who deal with the impacts of illegal immigration and cross 
border smuggling every day. I believe you will bring us all a 
unique perspective from which we all can learn.
    As this subcommittee has labored over the last five years 
to vastly increase the resources devoted to border security and 
immigration enforcement, we have always been mindful of the 
impacts upon state and local communities. We have not only 
expected DHS to reach out to localities that are affected by 
their operations; we have expected DHS to do so with vigor.
    While DHS certainly has a duty to secure the borders and 
ports of entry and to enforce the immigration laws, the 
Department also has a duty to be considerate of citizens' 
rights, especially law abiding citizens, while carrying out the 
mission of securing the borders.
    So I think we have to approach this issue in terms of 
balance. It is without question that we are going to have to 
secure our borders and end illegal immigration. Sovereign 
control of borders and a viable immigration system are 
fundamental to our homeland security, and these are goals that 
are not negotiable. However, many local governments and private 
landowners have interests that are impacted by the Department's 
efforts, and they have every right to be heard and to be 
granted reasonable considerations.
    I know the issues of border security and illegal 
immigration are difficult. I have been dealing with these 
issues my entire 27 years here in the Congress and have often 
cringed over the futility of our feeble efforts, but now in 
looking at recent results I am somewhat optimistic that the 
tide may be turning and that we are finally achieving the 
control of our borders that has been so elusive, yet also 
unquestionably vital to the safety and security of the nation.
    So we thank you again for coming here to testify today and 
share with us your wisdom. We appreciate your willingness to 
contribute to solving the problems and look forward to hearing 
your testimony.
    Thank you.
    Mr. Price. Thank you, Mr. Rogers.
    I am going to suggest that we start with Mayor Foster and 
then turn to Sheriff West, then to Mr. Miller and then to Mr. 
and Mrs. Walden. We would like to ask each of you to keep your 
oral remarks to five minutes.
    We have your full statements. We will gladly put those 
statements in the hearing record, but I think it will help move 
us along if you can summarize your statements and then leave 
time for our questions.
    Mayor, why don't you begin?

                              BORDER FENCE

    Mr. Foster. Thank you. Chairman Price, subcommittee 
Members, I am speaking today for 2.1 million Americans in 14 
border counties of the 1,250 mile Texas-Mexico border.
    Historically our communities have endured the neglect of 
federal and state governments. In recent years, the tide has 
begun to turn as the border has emerged as one of the most 
vibrant and dynamic regions in Texas. Ours is a region of 
contrast exhibiting differences of language, culture, tradition 
and economy. The interconnectedness of our communities on both 
sides of the international boundary gives our region a distinct 
sense of place.
    The Texas Border Coalition thanks you for your leadership. 
We ask your continued assistance in giving our communities a 
voice in government decisions and ask for your help in 
providing us the tools to advance our region.
    Your 2008 bill set the performance bar high for the 
Department of Homeland Security and Customs and Border 
Protection. Our region needs your help making the execution 
clear the bar. Their performance in the six weeks since 
enactment has not been encouraging.
    Even before the President signed your bill, we sought to 
begin consultation with the CBP as required by law and were 
rebuffed. We were told that CBP had held 18 town hall meetings. 
That, on investigation, turned out to be meals in restaurants 
and phone calls. I trust that most of you have held town hall 
meetings in your districts, and none of you would consider a 
private phone call between two parties to meet that definition.
    In the single instance where CBP consulted with local 
government, a resolution has been agreed to. Last week Hidalgo 
County agreed to partner with DHS to rebuild levees along the 
Rio Grande to create a more effective barrier to illegal entry. 
It does not include a fence that people seeking illegal entry 
can climb over, cut through or tunnel under. It is a smart 
solution.
    We have proposed similar solutions with the Laredo Vega and 
Brownsville Weir projects, only to be rejected without 
discussion or investigation. We want to work with DHS to 
fashion smart solutions. We need your muscle to bring them to 
the table and work with us.
    As the Border Patrol gains greater control of the border 
between the ports--and in Texas we are achieving control 
without a fence--the ports of entry come under great stress. It 
is a top TBC priority that Congress give the ports of entry the 
personnel and technology needed to harden their vulnerability.
    We will work with your financial services colleagues on 
needed infrastructure improvements. According to the Government 
Accountability Office, we need 4,000 new officers to secure the 
ports of entry. The President's budget proposes 500. We 
understand the need to ramp up, but at this pace we will remain 
in danger beyond 2017. We need to double the President's number 
to 1,000 this year and double it again next year to 2,000 new 
Customs agents.
    The President's budget proposes to implement the Western 
Hemisphere Travel Initiative on October 1, 2008. Whether it is 
implemented in 2008 or 2009 as provided by your bill, our ports 
of entry must be equipped to deal with the new rule.
    The budget does not include needed investments in 
technology, training, public education or testing that are 
essential to success. In the face of these shortcomings, the 
budget proposes to cut salaries and expenses, budget authority 
for the ports of entry by $344 million. I understand that the 
appropriations justification for ports of entry reduces their 
request by another $300 million.
    The President's plan raises questions whether the DHS 
commitment to secure the border is no more than a hollow 
premise that depends on ineffective fences. The consequence of 
the Administration's policy would be a less safe border, a less 
safe America, fewer hands on deck without the equipment they 
need and longer lines at the border.
    The 9/11 terrorists entered the United States through ports 
of entry. Most undocumented aliens enter the United States 
through ports of entry. Most illegal drugs entering the United 
States come through ports of entry. We need to invest in our 
ports of entry to protect Americans from terrorism, illegal 
drugs and unlawful entry. Without these investments our economy 
will continue to falter as commerce is frustrated by growing 
border crossing wait times at the expense of American jobs and 
economic growth.
    The Texas Border Coalition believes we can do better. We 
urge your subcommittee to improve the Administration plan and 
harden the security on the nation's borders.
    Thank you, gentlemen.
    [The information follows:]

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    Mr. Price. Thank you, Mayor.
    Sheriff West.
    Mr. West. Yes. Thank you all for inviting me up here. I 
have this speech wrote up here, but I am going to tell you how 
it is, gentlemen.
    First of all, let me start by thanking you gentlemen for 
the money that the Texas Border Sheriffs Coalition has received 
from you gentlemen. It has been a shot in the arm, so to speak. 
Congressman Culberson and Congressman Rodriguez have been real 
instrumental in seeing the aspects that we deal with down 
there.
    You made a comment earlier that you were seeing the tide 
change. Yes, sir. Absolutely. You are seeing the tide change, 
and you are seeing those changes as a direct result of a 
conglomerate of everybody working together and being able to do 
this with such funds that we have received from you gentlemen, 
as well as funds that we have received from the State of Texas.
    I am pleased to report to you that by last consensus the 
crime rate is down 63 percent in the State of Texas on the 
border, which is a significant difference as to what it was say 
two years ago, a year and a half ago. We are making good 
strides. We are developing a wonderful partnership with DHS, 
Border Patrol, CBP, however you want to call it. We are moving 
forward.
    As we push these issues back, and I want to say by issues, 
as we press towards the border there is going to be more to 
come. They are obviously laying in hiding now. They are going 
to wait for the opportunity. They are going to wait until we 
give out. They are going to wait until we quit pushing. It is 
our strong determination that we keep pushing, that we keep it 
secure and secure it more and more every day.
    Once again, I would like to say that I think we are making 
good strides. I think there is a lot of work still left to be 
done. I cannot honestly sit here and tell you that we are ever 
going to get to Point B, but we are a long ways from Point A I 
guess you might say.
    I would just thank you, gentlemen, for everything you all 
have done for us.
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    Mr. Price. Thank you, Sheriff.
    Mr. Miller.

                              BORDER FENCE

    Mr. Miller. Thank you, Chairman Price and Members of the 
committee, for this opportunity to come and visit with you.
    My name is Jim Ed Miller. I am a farmer in Fort Hancock, 
Texas, which is in Hudspeth County, Texas, of which I am a 
county commissioner also. I am here today to voice my support 
for a secure border.
    There are two concerns that I want to bring up about 
installing the border fence along the Rio Grande in El Paso and 
Hudspeth County. Number one, you cannot in my opinion secure a 
border along the Rio Grande without controlling the vegetation 
along the Rio Grande.
    Number two, the installation of the border fence must not 
damage the flood control capability of the river and/or 
interfere with canals and other infrastructures that irrigation 
districts have in their facilities that run parallel to the 
river.
    With your permission, I have some photographs. I think you 
have them in your package. They may not be in color. There are 
some color ones here. It is pictures of the Rio Grande. Picture 
No. 1 is a picture of the Rio Grande very close to Fort 
Hancock, Texas, where I farm. This part of the river has not 
been cleaned for many years, and most of the vegetation that 
you see along the banks of the river here is salt cedar.
    Now, these salt cedar provide a tremendous staging area for 
all sorts of illegal activity along the river. Number one, it 
endangers us for flood control. Number two, that endangers the 
Border Patrol when they are down there on that river trying to 
patrol it.
    Picture No. 2 is a section of the river just upstream from 
Picture No. 1, and it has been cleaned. The salt cedar has been 
removed. The floodways have been mowed. This is the levee here.
    Picture No. 3 just kind of gives you a brief overview of 
where we are talking about putting this fence and the 
infrastructure that the irrigation districts, both El Paso and 
Hudspeth, have that parallel the river.
    We all agree that we need a win/win situation, Mr. 
Chairman. If we can get the river cleaned, the border 
protection agencies, be it Border Patrol or whomever, have a 
much better chance of securing our border, and the local people 
have a much greater flood control structure here in times of 
flooding.
    My second concern is the damage that may be caused to the 
infrastructure of our region by placing a fence down there. 
Again, the irrigation districts parallel the Rio Grande, and if 
the fence is put up this impedes the ability of the local 
districts to get in and maintain their infrastructure.
    Picture No. 4 deals with that. This is a stretch of river 
in El Paso County. The water you see is the main canal. The 
dirt there to the right of the picture is the river levee. To 
the right of that is Mexico.
    All the water that comes to the irrigation districts, 
farmers in El Paso and Hudspeth County, has to come through 
this common ditch, and also a tremendous amount of water that 
is being delivered to the City of El Paso all has to come 
through this canal. If you put a fence in, where you put it 
could really deter in the ability of the district to maintain 
this main artery for water delivery.
    All of these structures that are on the irrigation side of 
this equation are being supported by the local taxpayers. There 
is a point to where the local people cannot afford to maintain 
these kind of things.
    Coming full circle, if we will clean the vegetation in the 
river we go back to the win/win deal of the Border Patrol can 
patrol the border and flood control is afforded, the flood 
control which could damage local people and/or damage the fence 
if it were put in there somewhere.
    I want to support and applaud Secretary Chertoff's recent 
effort for the work in Hidalgo County and our concerns with the 
border fence. We hope that we can work also with Customs and 
Border Patrol to come up with some sort of solution to minimize 
and mitigate the damage that would be done by putting a fence 
down there.
    With that, I thank you very much for this opportunity to 
visit with you.
    [The information follows:]

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    Mr. Price. Thank you very much, Mr. Miller.
    Now we turn to the Waldens. Welcome.

                              BORDER FENCE

    Ms. Nan Walden. Thank you, Mr. Chairman. Dick and I and our 
neighbors are grateful for the opportunity to share some of our 
experiences today, and we thank you for your good work on these 
issues.
    You all have to have the wisdom of Solomon and the patience 
of Job to sit here and usually listen to us citizens blame you 
for everything the federal government does wrong, but today 
Dick and I are going to try to minimize the generalities and to 
give you some specific solutions from our point of view on 
strengthening security and improving government/community 
relations along our southern border.
    We believe achieving a successful and strong border and 
immigration policy is both a matter of national security and 
economic security, and it is also a humanitarian issue. We are 
concerned that many citizens who do not live, work or travel 
across our southern borders do not appreciate the gravity of 
the situation. The drug-associated violence, the human 
smuggling, environmental impacts, as well as the impacts on 
commerce, all must be considered as you craft our federal 
policies.
    While we appreciate the challenges they face and the 
service they render, we and our neighbors have some serious 
concerns about the culture of the parts of the Department of 
Homeland Security, DHS, with which we interact most, the Border 
Patrol, and we will give you some specific examples of that 
later.
    We hope that you will read our testimony in its entirety, 
and we have included some articles as well for the record. Our 
overall message today is that if we address these issues 
piecemeal we are doomed to failure.
    Allow us to give you some firsthand examples as citizens 
who live and work within 30 to 40 miles of the Arizona-Mexico 
border.
    Mr. Richard Walden. Our family and our company, Farmer's 
Investment Company, has been farming and ranching in this area 
for more than 60 years, and before that we were five 
generations in agriculture in California. My ancestors came 
from England in the 1600s.
    One rode a horse from New York to San Francisco in 1842. 
Two years later he sent for his wife and two children, who 
sailed around the Horn, an 11 month trip. Since it is 
Valentine's Day I thought I would add they had five children 
after that, so I guess absence makes the heart grow fonder.
    We come from military families and law enforcement 
backgrounds. Our company has 7,500 acres mostly planted to 
pecans in the Santa Cruz Valley south of Tucson and 2,000 acres 
in eastern Arizona, a warehouse facility in Las Cruces and a 
1,000 acre pecan farm in Albany, Georgia.
    With 250 employees and a peak of 300 during the harvest, 
many of our permanent employees are second and third 
generation, largely Hispanic. Spanish is their language of 
work. We provide generous health benefits and 401[k] plans.
    In addition, Nan and I personally own a ranch, which is the 
picture on the right, in Amado, Arizona, which is where you 
turn to go to Arivaca when you want to see the site there. We 
raise Arabian horses and commercial cattle. The FICO lands are 
about 40 miles north of the border, and our ranch is 30 miles 
from the border.
    We deeply appreciate the history and the beauty of where we 
live. We appreciate the service of the men and women in law 
enforcement, including Immigration and Customs Enforcement, 
Border Patrol, the National Guard, who has until recently been 
on the border, and local police and sheriffs who help protect 
us.
    We sincerely value our cultural heritage, social and 
commercial ties with Mexico. We believe most of our Arizona 
neighbors and Americans share these goals. Number one, secure 
our borders from criminals and terrorists, protect our families 
and neighborhoods, protect our commerce, protect the 
environment which inspires us, which sustains many of our 
enterprises, be they farming, ranching, tourism and 
hospitality.
    Ms. Nan Walden. We have no illusions about the conditions 
in northern Mexico which are spilling over into our country: 
The increasing violence among the drug cartels and gangs, the 
kidnappings and homicides against judges, journalists, police 
chiefs and other leaders.
    There are new alliances now between the coyotes, who used 
to only smuggle people, and the drug smugglers. Now in addition 
or in lieu of charging illegals money, and we understand the 
going rate is $3,000 to $5,000 per person, the coyotes use 
illegals to carry drugs or carry smaller or poorer grade 
materials to enable other diversions in shipments to go around. 
Beatings of the people who pay the coyotes to be transported 
are common. We had some very sad examples right in our 
backyard.
    Recently a Mexican business colleague of ours was 
kidnapped. We were called for ransom by the desperate family. 
We had to involve the FBI. In these situations, the FBI does 
not call the local police, of course, because they cannot trust 
them. They deal with the army or professional negocios out of 
Mexico City who now make a living from arranging with the 
kidnappers. Fortunately, this man's family was able to get his 
release in about 10 days.
    We have listed for you here some of our daily experiences. 
We have had neighbors who have had people turn up wounded and 
bleeding on their porch. Hearing automatic weapons fire is not 
uncommon in their neighborhood, which is an exclusive estate 
area within two miles of the I-19 freeway.
    Some nights on our ranch we come home to Border Patrol in 
the driveway, which is fine with us. On other occasions we have 
come home to a number of Minutemen camped out in and around our 
driveway with coolers and weapons sitting on their tailgates.
    We woke up in the middle of the night worried one night 
about our hired hand, who is legal, but who does not speak much 
English. I was concerned that if he went to change the 
irrigation sets he might be mistaken for an illegal and shot 
at.
    We would like to add we understand the frustration of folks 
living along the border who join the Minutemen because they do 
not believe that the federal government is doing enough to 
protect them. On our ranch, our young 25-year-old woman manager 
wears a Glock in her holster every day. We carry firearms 
whenever we ride out, and in our car and home we have a trained 
German Shepherd with us all the time.
    Mr. Price. Ms. Walden, if I could ask you all to wrap up 
fairly quickly here?
    Ms. Nan Walden. Let me just say that we have recommended in 
the last part of our statement about eight different things 
that we could take, actions the federal government could take 
that would improve in very specific forms securing our border.
    One of the largest things I think that we think would be 
maintaining the National Guard presence there. The Border 
Patrol tells us that they are very helpful, that they take some 
of the stresses off of the Border Patrol.
    We also think standardizing the communications among the 
federal, state and local agencies with the radio frequencies is 
very important. That was a major recommendation of the 9-11 
Commission, and it has not been done.
    There are serious concerns about the fence, and we have 
submitted some letters from our neighbors for the record about 
that.
    Then we also feel it is very important that the Border 
Patrol take the citizen participation seriously. You called for 
consultation. Many of us worked on a citizen work group for 
Congressmen Giffords and Grijalva, and the day before we were 
to announce the results of our work group we woke up to this 
headline in our local paper, which says Official Rules Out 
Debate on Border Facility.
    You know, it is up to them to decide what the best policy 
is, but for the citizens to work six months and come up with a 
report and then the Border Patrol to hold a press conference 
the day before and say that our opinion did not matter is very 
disturbing to us as Americans.
    Mr. Price. We will insert at this point in the record that 
press account if you leave it with us.
    Ms. Nan Walden. Thank you very much.
    [The information follows:]

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                       CONSULTATION AND OUTREACH

    Mr. Price. All right. We will have a chance to revisit some 
of this in the question period, so thank you. Thanks to all of 
you. We are going to get as far as we can. We do have some 
votes on the House Floor. We will break and come back as 
quickly as we can, but hopefully we can get through a number of 
questions.
    I want to take on directly the matter of consultation that 
I think all of you one way or another have referred to.
    Section 564 of the fiscal 2008 omnibus appropriations bill 
requires the Secretary of Homeland Security to consult with key 
stakeholders before constructing fencing along the southwest 
border.
    Specifically the law states that the Secretary ``shall 
consult with the Secretary of the Interior, the Secretary of 
Agriculture, states, local governments, Indian tribes and 
property owners in the United States to minimize the impact on 
the environment, culture, commerce and quality of life for the 
communities and residents located near sites at which such 
fencing is to be constructed.''
    The Secretary plans to construct 370 miles of pedestrian 
fence and 300 miles of vehicle barriers this year. The 
Department asserts that it has undertaken ``extensive 
outreach'' to date. I want to ask the witnesses two questions, 
especially the mayor and the sheriff and the others if you want 
to chime in.
    First, has DHS outreach been ``extensive''? Secondly, and 
here, Mayor Foster, I am referring specifically to your 
testimony. You state that in the single instance where CBP 
consulted with local government that a resolution has been 
agreed to in fact. That is the example of Hidalgo County. Are 
any of you aware of any other DHS changes in the plan based on 
this outreach that they describe?
    Mayor, I think I will start with you. In December your 
coalition sought a moratorium on current fence construction, 
and this is a coalition, as I understand it, of the towns and 
cities along the borders. How many of them? How many?
    Mr. Foster. Well, it is all the elected officials and 
economic development entities from El Paso to Brownsville along 
the Texas border.
    Mr. Price. All the way, the entire Texas border?
    Mr. Foster. Yes, sir.
    Mr. Price. So that is quite a coalition. You sought a 
moratorium on current fence construction until a comprehensive 
cooperative review had been made. However, DHS has declined to 
suspend its current schedule.
    We are interested in your views on what consultation should 
look like and to what extent it has measured up thus far.
    Mr. Foster. Thank you for the opportunity. In anticipation 
of the amendment passing, the Texas Border Coalition wrote the 
Secretary a letter. I believe the first letter was dated the 
18th of December of last year.
    Understanding that he is under timelines, we were targeting 
January 21 as an opportunity for the Texas Border Coalition to 
meet with the Secretary. We received no response.
    Again we wrote the Secretary another letter I believe dated 
the 9th of January of this year, and the only response we have 
received thus far is the City of Eagle Pass got sued for a lack 
of right of entry. We will address that.
    The City of Eagle Pass passed a resolution in 2005 against 
fences or walls in the city limits. Working with Border Patrol, 
Border Patrol made a presentation to the council, and then they 
advised me in December of 2006 that Washington allowed them to 
delete a fence facet to a project that would in essence cede 
our municipal golf course and a city park that abut the Rio 
Grande between and north of our international bridges to 
Mexico.
    We have been working since we adopted Border Patrol's plan 
on January 9, 2007. Our attorneys have been in constant contact 
with the Corps' attorneys and working in good faith, and then 
here we come around the horn and they sue the City of Eagle 
Pass.
    Prior to that we got a letter from the Corps of Engineers 
asking for the right of entry. I addressed that with our city 
attorney, and he said we are in constant communication so we 
felt it was a little bit underhanded for them to sue a 
municipality who was communicating on a regular basis with 
attorneys representing DHS.
    Again, we were outreaching. We were writing letters on 
behalf of the Texas Border Coalition understanding that the 
Secretary is under some time constraints, trying again to 
facilitate a meeting to look at these different projects.
    As hard as it is to believe, the country boys can come up 
with a decent idea every now and then. The example of that is 
this levee project that the Secretary looked at last Friday and 
apparently it works again for Homeland Security and secures the 
residents of Hidalgo County against flood damage.
    We have a Brownsville Weir project. Laredo has another 
project, but we have yet been able to get DHS to sit down with 
us and look at these country ideas and see if they do not 
because security is again the priority of the Texas Border 
Coalition.
    Mr. Price. Not knowing a whole lot in depth about these 
individual situations, but my understanding is in the Hidalgo 
County situation there was financing involved with the county 
or the local officials----
    Mr. Foster. Yes, sir.
    Mr. Price [continuing]. Putting up a good deal of money to 
facilitate this resolution, you might say.
    Mr. Foster. In excess of $100 million.
    Mr. Price. Excuse me?
    Mr. Foster. In excess of $100 million. A bond had been 
passed by the residents of Hidalgo County.
    Mr. Price. Well, is that the missing ingredient in these 
other cases?
    Mr. Foster. No, sir. The missing ingredient has been 
Homeland Security to sit down and look at these projects. The 
missing ingredient has historically been Homeland Security.
    Mr. Culberson. Consultation.
    Mr. Foster. Yes, sir. Exactly. We felt again in 
anticipation of the amendment we began understanding the 
Secretary has timelines that he has to meet. We started trying 
to facilitate a meeting with him beginning the 18th of December 
of last year trying to get that consultation to look at the 
projects.
    Again, as the Commissioner mentioned, the Texas Border 
Coalition. Security is a priority, but we feel that the first 
step is eradicating the Carrizo cane and the salt cedar that is 
a hiding ground for any illicit activity that comes into our 
border. By the same token, if you eradicate those two plants we 
are losing enough water through transpiration to those two 
plants to supply the City of Brownsville with water for four 
years.
    Technology is another issue. We feel that we can achieve a 
secure border through the implementation of modern technology. 
The sensors that we see now on the banks of the Rio Grande are 
three generations old. The Border Patrol is doing a wonderful 
job in the Del Rio sector with Eagle Pass. I believe that 
sector goes from Eagle Pass to Sanderson. Apprehensions are 
down 70 percent.
    At the same time period, in the San Diego sector where you 
have physical barriers apprehensions are up seven percent, so 
we are doing a good job, but Texas is unique in that we know 
where our border is. We have the scenic and historic Rio Grande 
River.
    The Treaty of Guadalupe Hidalgo in 1948 established the 
border of Texas as midstream of that natural resource, and any 
time we move off that midpoint we are in effect ceding land 
back to Mexico.
    Mr. Price. Sheriff, the Department maintains that it has 
been consulting with law enforcement, including sheriffs, and 
chiefs of police. I wonder if you and your colleagues would 
agree with that?
    Mr. West. On behalf of the Texas Border Sheriffs Coalition, 
we took the position that we had no position on the fence, but 
as far as a consultation, and I think collectively we all 
agreed to take this position for the simple fact that we had 
little to somewhat consultation.
    I have had one meeting with them personally and then I have 
received packages in the mail, nice drawn out pictures and 
things of that nature, but we have not had that big of a role 
in regards to the fence.
    Mr. Price. Are you saying that you have not sought that 
much of a role? I mean, surely the nature of the border 
infrastructure that we end up constructing has something to do 
with law enforcement.
    Mr. West. Absolutely it does. From our perspective, we 
spend most of our time chasing the bad guys once they have 
already come in. I mean, they have already come around.
    We have encountered in Hudspeth County in Fort Hancock 
several times where we have gotten close up to the river there 
and then been held back under fire fight because they are 
shooting at us from across the other side with the brush on the 
other side, so it is a problem on both sides.
    As far as the approach, the last approach they had with me 
personally was it was going to be a hit and miss area of the 
fence. Keep in mind the county is kind of divided by two 
different terrains. We have lower valley farm areas on the west 
side and then we have natural barriers on the eastern part of 
the side. The border area is approximately 97 miles, so the 
last 50 miles of it is going to be natural terrain that is 
going to be a barrier there.
    But for the consultations, in answer to your question, yes, 
we have talked about it, but once it was we are going to come 
talk to you about it but it is going to be hit and miss, then 
there is really no sense in talking about it if that is how you 
are going to do it.
    Mr. Price. Mr. Miller? Mr. and Mrs. Walden? From the 
landowners' perspective, what would you say of the consultation 
process so far? Has it been clear what you need to do to 
express your views? Has the process been fair? How extensive 
has it been?
    Mr. Miller. I do not feel it has been fair. I think because 
I was a commissioner I was invited to be on a conference call 
about a year ago with some of the high ranking Border Patrol, 
Homeland Security.
    They were talking about what a great thing this Boeing 
contract with these high tech towers they were going to put up. 
They used the term tag and track. It is going to enable the 
Border Patrol to tag and track much more effectively.
    I, being the smart aleck, said I am not really in favor of 
tag and track. Why do you not just keep them out in the first 
place. Not long after that I was approached by some Border 
Patrolmen and asked if they could get all the legal papers 
signed to ingress and egress through our farmland to do some 
surveying for the fence.
    I said well, just what if I do not want a fence? They said 
that is not for you to decide because you are getting one 
anyway.
    Mr. Price. Ms. Walden or Mr. Walden?
    Ms. Nan Walden. I would just have to echo that the Malpai 
group that submitted the letter for the record, which is a big 
group of ranchers around the Douglas area that have cooperated 
on a number of issues, they have had worries about their 
cattle.
    They have said these vehicle barriers that are going in 
there, if they could just save the wire fences so that the 
cattle could be restrained because they will go through the 
vehicle barriers. They are just tearing out the fencing.
    How much does that cost, Dick, to put in for a private----
    Mr. Richard Walden. $10,000 a mile, we think.
    Ms. Nan Walden. $8,000 to $10,000 a mile for a good wire 
fence for your cattle.
    Mr. Richard Walden. Yes, sir.
    Ms. Nan Walden. Right. And so, you know, if they could just 
either leave the cattle fencing in and then put the other fence 
where it has to go or add some kind of a layer to the vehicle 
barriers, but they are not considering those practical 
solutions.
    Mr. Richard Walden. They are not having a two-way 
conversation.
    Ms. Nan Walden. It is strictly top down. We are the 
experts, and you can put up or shut up.
    Mr. Price. Thanks to all of you.
    Mr. Foster. Oh, we will keep talking if you want us to.
    Mr. Price. I know you will.
    Mr. Foster. We are full of conversation.
    Mr. Price. We will give you another chance. We are going to 
go vote, and we will be back. I think it is a series of votes. 
We will be back as quickly as we can.
    Mr. Foster. All right.
    Mr. Price. I apologize.
    [Recess.]
    Mr. Price. There is action on the House Floor that is not 
under our control.
    Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    First let me express our appreciation to these witnesses 
who traveled a great distance and expense to be with us to 
share their points of view. We appreciate it. It is very 
informative. Like one of you said to me privately a moment ago, 
the border is unique. The Texas border is unique, I guess, as 
well as the others. We appreciate your information.
    This is essentially about whether or not the Department is 
conversing properly with officials and citizenry on the border 
on what we do about controlling access to the country, and I do 
not guess there could be enough consultation, but there should 
be at least a minimum consultation. That is a debatable point.
    Someone showed me this picture of what apparently was 
assigned for the Del Rio and Eagle Pass part of the border. Is 
that familiar?
    Mr. Foster. Yes, sir.
    Mr. Rogers. Was this done with consultation with you or 
what?
    Mr. Foster. Yes, sir. If I may, that is a decorative pin.
    Border Patrol approached the City of Eagle Pass--as a date 
I am going to say June of 2006--with the project cleaning out 
1.25 miles of cane along the banks of the river, and again 
reinforcing we have our municipal golf course goes up to the 
riverbank and contiguous to the golf course to the north is a 
city park. They were going to clean out the cane and then build 
a road where they were going to overlay on top of a cart path 
that paralleled the river.
    There is a creek going into the river just south of our 
northernmost bridge. They were going to bridge that creek and 
continue that patrol road along the banks of the river into our 
city park, which is a wonderful idea.
    Then about a quarter mile off the river they were going to 
put in 15 light towers that would illuminate our municipal golf 
course at night and our city park at night, and that is very 
aesthetically appealing. It is a park improvement project. Then 
they were going to put this decorative fence was one facet of 
that project.
    In the June 2006 meeting we had a resolution against any 
fences or walls. Well, they came back and approached me in 
December of 2006 and made me aware that Washington had allowed 
them to delete the fence facet of that project.
    Well, I could not get them on a council meeting fast 
enough. We had them on our agenda on January 9, 2007, and they 
made their presentation with the deletion of the fence facet. I 
perceived it as a park improvement project, but in fact it 
passed our council on a 3-2 vote.
    After that council meeting I asked the two dissenting 
council members what their issues were with this project 
because I looked at it as a park improvement project. The two 
dissenting council members just said flat out we do not trust 
them. We do not trust them.
    From that point forward our city attorneys continued to 
work with the attorneys for the Corps of Engineers. They wanted 
fee title to the property. We agreed to grant them a----
    Mr. Rogers. Well, I guess----
    Mr. Foster. Yes, sir?
    Mr. Rogers. I guess what I am trying to find out is it 
sounds like you have had a lot of consultations.
    Mr. Foster. Yes, sir, and then we get sued January 14. It 
is my understanding that decorative fence that was deleted on 
January 9, 2007, is back on in this suit from the drawings we 
have been able to see, but we have yet to be able to sit down 
with anybody and get a definitive.
    This lawsuit is for access into 233 acres, inclusive of 
Fort Duncan Park. Our golf course and our city park are only 90 
acres. We are not sure what we are doing now. We had had 
consultation and reached agreement and were in communication, 
but now due to this lawsuit that was filed January 14 the 
wheels are off the cart again.
    Mr. Rogers. That is the condemnation suit----
    Mr. Foster. Yes, sir.
    Mr. Rogers [continuing]. By the Corps?
    Mr. Foster. Yes, sir. It appears to us in talking without 
city attorneys, it appears that the left hand did not know what 
the right hand was doing because we had been in constant 
communication with the Corps' attorneys.
    Mr. Rogers. Well, let me ask you a general question. Answer 
whomever. How much of the riverbank is grown up in shrubs and 
trees and bushes?
    Male Voice. All of it.

                        PHYSICAL FENCE OBSTACLES

    Mr. Foster. This Carrizo cane will get up to 30 feet, the 
salt cedar. I mean----
    Mr. Rogers. No. What percent of the bank is covered?
    Mr. Miller. Percent of the bank or percent of the river?
    Mr. Rogers. The river.
    Mr. Miller. The river? I can only speak for El Paso to 
Presidio. I mean, below what we call Little Box Canyon about 
60, 70 miles down from El Paso past that there is no channel. 
It is just nothing but salt cedar.
    The water that gets there does not even arrive in Presidio 
because it just gets sucked up by all the salt cedar. It either 
percolates or evaporates. I cannot speak all the way down.
    Mr. Rogers. Well, if the banks were cleared, as one of your 
photographs indicated----
    Mr. Miller. Yes, sir.
    Mr. Rogers [continuing]. What would that do insofar as 
protecting us from interlopers?
    Mr. Miller. From what?
    Mr. Rogers. From people trying to get across.
    Mr. Miller. The Border Patrol can see what is coming. It 
has been my experience, and I am not picking on the Border 
Patrol, okay, but where the river is cleaned you find Border 
Patrol on the border.
    Mr. Rogers. Yes. Well, are they proposing to clear that 
stuff out?
    Mr. Miller. Not that I know of.
    Mr. West. Can I add something to that? If you look at the 
picture with the brush there on both sides of the banks of the 
river----
    Mr. Rogers. Yes?
    Mr. West [continuing]. Several times, like I said earlier, 
we have had encounters there where we are shot upon. As a 
matter of fact, on Mr. Miller's farms we were taking in fire 
when we chased a vehicle down in there with 1,800 pounds.
    That creates a problem for law enforcement not only in El 
Paso and Hudspeth Counties, but all the way down to Brownsville 
because you are going in from daylight into the dark. These 
guys can hide in these bushes. They can hide in this brush and 
pretty much do what they want to. We have no idea of how many 
we are up against when we go down in there.
    Mr. Foster. If I may, sir, I think that might be the first 
step that we would want to take is let us peel all this cover 
off to see what we have to work with because once you get rid 
of this cane and salt cedar, that facilitates line of sight for 
a Border Patrol agent to the banks of the river.
    We were taking one group in, one news group in to look at 
it, and they made the comment there could be a 500 pound 
elephant on fire in here and you would never see him because 
you get into that cane. It gets up to 30 feet high. It will be 
in excess of a quarter of a mile from the edge of the river.
    Once any illegal entry gets into that cane or salt cedar, 
he is very challenging to detect. Again, as the sheriff 
mentioned, you do not know how many, nor does the Border 
Patrol.
    Again, I would say that would be the first step is let us 
eradicate that stuff and get a real idea what the banks of the 
river look like.
    Mr. West. That would be very instrumental in officer safety 
to get that cleaned up.

                         ACCESS TO PRIVATE LAND

    Mr. Rogers. A lot of landowners I am told are refusing to 
allow access to their land just to see what needs to be done.
    Mr. Foster. If I may, sir?
    Mr. Rogers. Yes.
    Mr. Foster. Again, apparently what we looked at with the 
Border Patrol was a park improvement project, and apparently a 
DHS fence project is a separate project.
    When Border Patrol said Washington allowed them to delete 
the fence facet, and since they put that fence back on we have 
not had any consultation, but we feel again if you put these 15 
light towers that are going to illuminate areas between our two 
ports of entry and north in the city park and eradicate this 
cane so that you can see what is coming, it would be very 
challenging to----
    Mr. Rogers. My question is, and perhaps the Waldens may 
answer this or Mr. Miller.
    Some property owners apparently have refused to let the 
Department or officials of the Corps on their property to see 
what needs to be done, and that is the reason apparently for a 
lot of these right of entry condemnations along the border. Are 
you familiar with----
    Ms. Nan Walden. I am a little bit familiar with this 
because I think there has been a breakdown in trust.
    From the people I have talked to in Douglas, the Malpai 
ranching group, and I think you were alluding to it too, Mr. 
Mayor, is the Border Patrol or DHS says one thing and does 
another, and that is where then the local landowners get their 
backs up and do not want access because they work and work and 
work like we did in this working group, and then we read in the 
headlines that our considerations, our opinions do not matter.
    We are constantly told we are the experts. We are the 
experts. Well, we are also the experts when we are having 
violence on our homelands and when our businesses are 
threatened and when we are afraid to send the school kids home 
from school by themselves, so I do not think that that is a 
constructive attitude.
    In one case in the Buenos Aires National Wildlife Refuge 
near us, I know that the superintendent asked that some 
accommodation be made on a 60-foot area of fence that had 
endangered species there. You know, if they could just put up a 
camera there instead of fence for the pineapple cactus. I 
understand that is going to a lawsuit now.
    You know, that could have been a win/win if they could have 
come up with another idea, be it a camera or some other 
arrangement there or a different type of a fence, but there 
seems to be no willingness to compromise or to listen to 
alternatives at all.
    Then that is when people get suspicious of why should I 
cooperate because I am going to get sued anyway, or my rights 
will be trampled.
    Mr. Miller. And may I confess I was asked by the Border 
Patrol if they could have permission to come in to do surveying 
projects. I said tell me what kind of vehicles or what is this 
going to entail? Are you coming in in a four-wheeler, or are 
you coming in in an Abrams tank? You know, I do not know.
    I said no. I said no, I am not just going to give you carte 
blanche permission to come in here with anything you want. They 
came in in a van with a Corps of Engineers and said can we go 
look? I said I will go with you.
    There are some communication things here too. I would have 
to confess that I denied them permission when they asked for 
written permission, but I did not keep them out, you know. When 
they came in with a van instead of a tank, sure, we can go do 
that.
    Mr. Foster. If I may, the City of Eagle Pass was sued for 
not signing off on a right of entry. We have never denied any 
federal entity the right to enter. We turned that over to our 
city attorneys, and they said we are communicating with them.
    I mean, in the December 7 letter we get from the Corps we 
are already in communication so we are thinking we are working 
the same project when in actuality DHS has another project that 
we are not aware of.
    We have never denied any federal entity access to any 
property in the City of Eagle Pass, yet we are being sued for 
right of entry.
    Ms. Nan Walden. A lot of us big landowners work with 
federal agencies all the time, be it the Corps, you know, the 
Bureau, flood plain issues, so we are used to doing that and we 
are cooperative. It benefits all of us. This is a sign that the 
communications have broken down.
    Male Voice. Yes, sir.
    Mr. Rogers. Mr. Chairman.
    Mr. Price. Thank you very much. Once again, we do have 
votes on the Floor. I know some of you have planes to catch.
    Let me just raise a couple of additional topics and ask you 
if you have remarks you would like to furnish for the record, 
we would be happy to hear from you on this. If we had more time 
we could explore this more fully.
    I was talking earlier about the requirements that were 
placed in our appropriations bill in terms of community 
consultation. Another requirement that is in that bill is that 
the Secretary of DHS provide our committee as part of his 
expenditure plan an analysis for each segment of the border, a 
segment not to exceed 15 miles in length, and in that analysis 
to compare alternative means of achieving operational control 
of the border.
    We have in mind costs and effectiveness and any other 
factors that would impinge on this and also, of course, we want 
to know about any unintended effects on communities.
    Our idea in requiring this segment-by-segment analysis is 
to do justice to the diversity----
    Mr. Foster. Yes, sir.
    Mr. Price. To the diversity of the border that we are 
talking about and probably the diversity of the kind of 
infrastructure that is going to be required. You are all aware 
of the one-size-fits-all mentality.
    Mr. Foster. Yes, sir.
    Mr. Price. As I am understanding every one of you today, 
you are at odds with that. You want to see solutions chosen 
that are appropriate to the terrain, to the communities, to 
whatever kind of diversity we are talking about across the 
border.
    So that is the point of the segment-by-segment analysis, 
and if you have further thoughts on that about the kind of 
diversity we are talking about here and how that applies to 
your community or your situation, we would like to know that.

                             PORTS OF ENTRY

    And then especially the Texas Border Coalition and the 
Sheriffs Coalition. We need to be aware of the interaction of 
what we are talking about here in terms of infrastructure with 
the strain on our ports of entry.
    I know in your statements you had some things to say about 
that. There is going to be increased pressure on the ports of 
entry. There are already plenty of pressures on those ports of 
entry. They are overwhelmed, some of them, with passenger and 
vehicle traffic, and that is going to potentially increase 
rather than decrease as we achieve this operational control.
    We included $225 million in last year's appropriation or 
this year's appropriation for GSA for port of entry 
modernization and expansion, but CBP says they need $4 
billion--$4 billion--to improve the 163 land border crossings, 
and so we have some shortcomings and some strains there.
    How much time do we have? Not very many minutes. Maybe let 
us take 30 seconds from each of you--the mayor, the sheriff--if 
you have a quick comment on this, but I will ask you to 
elaborate for the record.
    Mayor.
    Mr. Foster. Your comments on the amendment are just right 
on target. On that CBP number, I believe that is the Government 
Accountability Office that came up with the need to spend $4.8 
billion and hire an additional 4,000 agents on the force.
    Mr. Price. And the congestion at these ports of entry, 
obviously that affects conditions in your community and other 
border communities.
    Mr. Foster. It affects conditions. The border is a conduit 
for goods coming, but for the flow between Mexico and the U.S. 
The goods that go to the ports are not produced on the border. 
We are just the conduit. It impacts the interior states more so 
than it does the border, but we see the first read on that.
    It is the Government Accountability Office that came up 
with that $4.8 billion and additional 4,000 agents to 
facilitate the legitimate flow of trade and tourism.
    Mr. Price. Sheriff, if I could get your attention just a 
moment? What would you say about the way that conditions at 
ports of entry affect the crime level or other security 
problems that you face?
    Mr. West. Well, you know, it is going back to a broad 
scheme. You cannot go in there. You have to take, I guess like 
you say, the cookie cutter approach and approach each area 
differently and with the local input go and decide what needs 
to be done in that local area.
    One of the major effects it causes by going in there at a 
mass amount is the backflow of traffic. When you get that big 
backflow of traffic, then CBP agents tend to just wave them on 
through. When that happens, then you have the illicit 
activities that come through with that, so each area needs to 
be defined on what best fits each area.
    Mr. Price. You have helped us today by giving us testimony. 
Even though we had a foreshortened hearing, we have benefitted 
from it. We will stay in touch with each of you. We invite you 
to submit further material.
    You get the idea here of the kind of questions we are 
asking and the kind of information we need to have as we work 
with the Department to have a rational approach to border 
infrastructure, but one that is also sensitive to the variety 
of community situations and needs that we have talked about 
here today.
    We thank all of you. As for the second hearing, which we 
had scheduled right after this, I think in all likelihood that 
hearing will be postponed.
    If there is a sudden reversal of the situation on the Floor 
in terms of the string of votes we are facing, then we will 
serve notice in the next 30 minutes, but otherwise we will 
postpone hearing from Commissioner Basham and the other 
witnesses in the second hearing.
    We will adjourn this hearing with our thanks to all of you.

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                                           Thursday, April 3, 2008.

                          U.S. SECRET SERVICE

                                WITNESS

MARK SULLIVAN, DIRECTOR
    Mr. Price. The subcommittee will come to order.
    Good morning, everyone.
    And good morning, Director Sullivan. We thank you for 
appearing before the subcommittee today to discuss the 2009 
budget for the Secret Service and the demanding work that you 
already have under way to protect the presidential candidates 
during the 2008 campaign.
    We will be asking this morning how this protective mission, 
which makes major demands on Secret Service resources across 
multiple years, will affect your other functions, your 
investigations into financial and electronic crimes in 
particular. And we do this in the awareness that the 
administration has proposed new funds for other agencies to 
enhance cyber security, and we want to know where that leaves 
the Secret Service electronic crimes investigatory role.
    The Secret Service's protective mission makes up nearly 
two-thirds of the agency's budget, or nearly $850 million in 
the 2009 request. Concurrent with protecting our Nation's 
leadership, the Secret Service must also be a vigilant guardian 
of our citizens' constitutionally-guaranteed freedoms of 
speech, assembly and petition of the Government.
    The Secret Service also protects visiting foreign heads of 
state and coordinates a variety of Federal agencies and assets 
to protect large international events, such as the annual 
General Assembly of the United Nations and the upcoming visit 
of Pope Benedict XVI to our country. The partnerships upon 
which the Secret Service relies to man these large-scale events 
will be all the more important for this summer's candidate-
nominating conventions, both of which have been designated as 
National Special Security events by the Secretary.
    The Secret Service is more than just its protective 
operations, however. Its agents are conducting daily 
investigations into financial crimes, identity theft and money 
laundering through 116 domestic and 21 international field 
offices. The Secret Service has requested $318 million for its 
field operations, the work of which is critically important to 
the security of the Nation's currency and its financial 
infrastructure.
    The 2009 budget submission introduces a different metric 
for reporting the amount of counterfeit currency in 
circulation, which, in turn, serves as a measure for the 
performance of Secret Service investigations. Unfortunately, 
the submission does not apply this new metric to prior years, 
so there is no way to compare the 2007 investigatory results 
with what had been a negative historical trend of more and more 
counterfeit currency and circulation under the old reporting 
method. We want to know the reason for adopting this new 
metric, and would also ask that you complete a historical re-
estimate of your investigatory data, so that we won't have to 
wait several years to find out if counterfeit problems are 
continuing to grow.
    The Secret Service also has unique investigatory missions 
related to financial crimes committed online or through other 
electronic means. The agency has a network of 24 electronic 
crimes task forces, or ECTFs, situated across the country. 
These are dedicated to the prevention, investigation and 
prosecution of financial crimes committed electronically or by 
exploiting technology.
    In an era of rapidly growing cyber threats, I am surprised 
that the ECTF budget, like the overall investigatory budget at 
the Secret Service, includes no funding increase for 2009 
except for inflation and pay annualizations. This raises a 
larger issue: the role the Secret Service will play alongside 
other agencies in the administration's interagency cyber 
security initiative.
    With the 2008 campaign well under way, the Secret Service 
has already accelerated its protective activity, given that 
Senator Obama was assigned a protective detail earlier than any 
other candidate in history, and given that the protective 
detail for Senator Clinton, based on her status as a former 
first lady, has been enhanced because of her candidacy.
    With the extraordinary political activity accompanying the 
race to date, we will be interested to find out how you will 
manage the additional workload of protecting the party 
conventions, securing the transition to a new administration, 
and ensuring the security of the Capitol during the 
inauguration in 2009.
    We are also interested in other White House-related 
projects undertaken by the Secret Service in recent years, such 
as the screening of mail sent to the White House for pathogens 
and other threats. The explanatory statement that accompanied 
the 2008 appropriations act required the Secret Service to 
provide the subcommittee with information about mail screening. 
But, to date, we have not received the information we 
requested. We asked for a justification of why the Secret 
Service, rather than the White House Office of Administration, 
should be responsible for processing the President's mail. I 
know you have been working on getting us this information, but 
we need to have it soon so that we can use it to inform our 
2009 appropriations work.
    So, Mr. Director, we look forward to hearing your 
perspectives on these and other issues. We will, of course, put 
your written testimony in the record. We will ask you to 
summarize your remarks in 5 minutes so that we have plenty of 
time for exchange.
    Before we begin, let me turn to Mr. Rogers for his opening 
remarks.
    Mr. Rogers. Thank you, Mr. Chairman.
    And welcome, Director Sullivan and your staff.
    You come before us today at an interesting time in the 
Secret Service's history, a time when your agency is being 
tested in both of its missions: protection and investigations.
    Every 4 years, the Secret Service endures the challenges of 
a presidential campaign, and today the men and women of our 
Nation's oldest Federal law enforcement agency are right in the 
thick of a protracted presidential contest, one that is proving 
to be as dynamic as it is challenging. In fact, just this past 
week, the Secret Service surpassed 400 protective days at over 
1,000 events in support of the campaign--quite a pace, by 
anyone's estimation.
    This campaign comes at a time of continuously evolving 
threats to not only your agency's current protectees, but also 
to our Nation's financial infrastructure. Our monetary systems 
are now intertwined with cyberspace, and this is an arena 
rampant with derelict and criminal behavior--activity that your 
agency must investigate and do all it can to eradicate.
    I am interested to hear how your agency, with its 
impressive cyber crime forensics and intrusion-detection 
capabilities, is assisting other Government agencies and the 
private sector to determine and undermine cyber threats. And, 
in particular, I would like to know how Secret Service does or 
does not fit inside DHS's latest cybersecurity efforts that we 
have recently learned about.
    So, once again, the Secret Service finds itself needing to 
adapt its resources to meet the demands of its dual mission. 
Once again, the Secret Service is striving to find that elusive 
balance between protection and investigation. But what is 
different today is the persistent work this subcommittee has 
done over the last few years to install the needed resources, 
staff and planning requirements to help the Secret Service 
weather this storm.
    Considering the difficulties you all encounter in budgeting 
for events that are as demanding and unpredictable as a 
presidential campaign, I trust you are gathering firsthand data 
of actual expenses and impacts upon investigations from what is 
only the second presidential race since 9/11. It is this 
empirical data that I hope we can learn more about today, as we 
discuss your request for fiscal year 2009 and what will move 
your agency forward.
    Director Sullivan, we are well aware of the challenges 
facing the Secret Service, and I believe you are well aware of 
our subcommittee's expectations. You have our trust and our 
support. And we look forward to your testimony today. Welcome.
    Mr. Price. Thank you.
    Please proceed, Director.
    Mr. Sullivan. Good morning, Chairman Price, Congressman 
Rogers, distinguished members of the committee. Thank you very 
much for your support, and thank you very much for your 
comments.
    It is my pleasure to appear before you to discuss our 
fiscal year 2009 budget request for the U.S. Secret Service. 
Mr. Chairman, I will offer brief remarks and ask that my full 
statement be made part of the record.
    The President's fiscal year 2009 budget request recognizes 
the Secret Service's important contributions to homeland 
security. This budget provides the U.S. Secret Service with the 
resources needed to perform our dual mission of conducting 
criminal investigations to safeguard our Nation's leaders, as 
well as safeguarding our Nation's financial infrastructure.
    In addition to investigating the production of counterfeit 
currency, identity theft, financial fraud and electronic and 
cyber crimes, our personnel serving in domestic and 
international field offices develop and implement complex 
security plans for the high volume and multidistrict visits of 
people we are charged to protect.
    For the 2008 presidential campaign, we have initiated 
candidate protection at the earliest point in campaign 
history--nearly 18 months before the general election. As of 
March 31, 2008, we have implemented security plans at nearly 
1,000 events and venues visited by our presidential candidates 
under our protection.
    The protection workload remains very busy in other areas as 
well. In April alone, our personnel have prepared for scheduled 
protective travel to 20 countries on five different continents. 
Especially noteworthy this month is the visit of Pope Benedict 
XVI to Washington, D.C., and New York City. We will be the lead 
Federal law enforcement agency responsible for the security at 
Nationals Park as well as Yankee Stadium, as well as other 
venues during the Pope's visit.
    Overall, the month of April, Secret Service protection 
operations will generate 5,300 additional personnel assignments 
above and beyond the number of assignments needed to sustain 
daily protective requirements.
    As these protection efforts advance, we continue to conduct 
aggressive financial and electronic crimes investigations. In 
fact, we are presently conducting several undercover cyber 
crime investigations, targeting suspects operating in foreign 
countries. These suspects are engaged in a range of illegal 
activities, from the large-scale production and sale of 
fraudulent credit cards to the trafficking of personnel 
identification and account information obtained through data 
breaches resulting from computer hacking and network intrusion.
    I am often asked how we are able to do so well in meeting 
our dual mission of protection and investigation. The answer is 
the strength of the people and our diverse and talented 
workforce. The men and women of the U.S. Secret Service are 
dedicated and mission-focused, adaptable to change, 
collaborative with their law enforcement partners, and 
resourceful in executing comprehensive security plans and 
conducting criminal investigations.
    While technology has forever changed the way we carry out 
our dual mission, our core values remain the same as they have 
for the last 143 years. These same values will guide our 
organization as we prepare for tomorrow's challenges.
    Mr. Chairman, this concludes my opening remarks. Thank you 
again for the opportunity to appear here today before you. And 
I am happy to answer any questions you may have.
    [The information follows:]

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                       2008 PRESIDENTIAL CAMPAIGN

    Mr. Price. Thank you, Director.
    I will lead off with a question, not surprisingly about the 
campaign, the presidential campaign, and your work there.
    We know from the $85.3 million appropriated in 2008 for 
candidate protection that this is going to be the costliest 
campaign in the Secret Service's history. Your budget for 2009 
shows the budget going down to $41 million, but you still have 
substantial obligations the last month of the campaign: 
protection of the President-Elect and Vice President-Elect and 
the inauguration, and then the cost of the post-presidential 
security detail for President Bush, which will start after the 
inauguration.
    I wonder what you can tell us about the campaign challenges 
to date. How does it compare to the 2004 race, for example? Are 
there special challenges associated with St. Paul and Denver? 
We certainly know there were with Boston and New York City in 
2004. How do the challenges compare as regards to the 
convention cities?
    And, of course, your parent department is now 4 years 
older. It was a new department in 2004. What difference has the 
maturing of DHS made in terms of the support you can expect 
from your sister agencies?
    Mr. Sullivan. Thank you, Chairman.
    When I was here last year, one of the things we talked 
about was the unpredictability of the campaign. And I remember 
we were trying to determine how many campaign days we thought 
that there would be, and we were talking about when we thought 
there would be the high point of the campaign and the multiple 
candidates that we assumed we would be protecting.
    Little did I know then that we would be initiating 
protection in May of 2007 on Senator Barack Obama. You know, 
just to give a comparison, in the campaign going back to 2004, 
we initiated protection of Senator Kerry, I believe it was, in 
February of 2004. So initiating protection last May a full 18 
months before the election did present a challenge. Not only 
that, coupled with the fact that an existing protectee that we 
are already protecting, Senator Clinton, was a candidate as 
well, in effect we had two candidates going, again, a full year 
and a half prior to the election.
    I would have to say that I believe we picked up that 
protection without missing a beat. You know, we began planning 
for this campaign back on January 21, 2005, and we were up and 
running, and I feel that we really did a nice job with that.
    However, it did come with challenges. As you mentioned 
earlier, we have provided protection at over a thousand venues, 
as of this date. We have gone through over 400 campaign days. 
And the tempo that we are seeing in this campaign is unlike 
anything we have ever seen before. The crowds of people we are 
seeing are larger--a lot of the crowds we are seeing now, quite 
frankly, are the type of crowds you see in October of the 
election year, a month before the election, when those crowds 
are really getting big. We have been seeing those throughout. 
As a matter of fact, going back to January, we have put 550,000 
people through magnetometers or metal detectors that we have 
screened. So there are some big crowds out there. But our 
workforce has been up to it.
    As far as St. Paul and Denver, as you know, the convention 
in St. Paul is August 25th through 28th of this year, and that 
is followed up a week later, September 1st through September 
4th, in Denver.
    Both campaigns, I believe, are going very, very well. 
Convention planning is going very, very well. These have both 
been designated as national special security events. We have 
assigned senior leaders of our organization to coordinate each 
campaign.
    Each campaign coordination is performed using an executive 
steering committee. Each campaign has an executive steering 
committee. On that executive steering committee are the three 
main members from the Federal Government to coordinate these 
events; we have FEMA, the FBI and the Secret Service with 
senior leadership representation on there. In addition to that 
leadership, we also have the leadership of State and local law 
enforcement for each jurisdiction we are involved with. So 
there is a senior leadership presence on both of those 
executive steering committees.
    In addition to the executive steering committees, each 
convention has 17 working groups or subcommittees that have 
their own particular area of expertise that they are working 
on, as far as the planning goes. Examples would be air 
security, credentialing, crisis management, consequence 
management, intelligence-type issues, counterterrorism, 
chemical and biological issues. All of those areas are being 
addressed by these particular working groups.
    So I feel very, very comfortable that we are well on our 
way to putting together a good security plan for both of these 
conventions. I have met with both the chief of police for 
Denver as well as for St. Paul, and we have a very, very good 
working relationship with them. But as with everything we do, 
it all comes down to partnership, and I feel very confident 
about the partnership that everybody has with each other for 
these two events.
    We have also been planning for the--there are going to be 
four debates coming up in September and October. There will be 
three presidential debates, as well as one vice presidential 
debate. These are very unique, in that this is the one time 
during the campaign that we have both of the candidates at one 
venue together.
    So this also does take an extraordinarily large amount of 
coordination and planning and cooperation and partnership. And, 
again, I feel that is going very, very well. We have met, going 
back over a year ago, with the head of the Commission on 
Presidential Debates. We went with them to look at the venues. 
We have had many meetings with them. We hosted a meeting back 
at our headquarters building last week that was attended by all 
of our law enforcement partners as well as members of the 
Commission on the Presidential Debates. And, again, I feel very 
comfortable. Although these are not designated as national 
special security events, they still are big events, but I feel 
that the appropriate attention has been given to each of those 
events.
    And in parallel to all of this, we continue to plan for the 
presidential inauguration, which will be a national special 
security event. And we are doing that with all of our partners, 
as well State, local, our Federal partners up here at the 
Capitol. And, again, I feel very comfortable with the progress 
we are making with that.
    So you are correct that it has been a very, very busy year 
with the campaign, but I feel very comfortable with where we 
are.
    On top of all of that, we continue to see a very high 
volume of foreign travel by our permanent protectees. Again, as 
I had mentioned last year, 3 years ago when you added up all of 
the foreign stops we had by all of our protectees, it came to 
about maybe 140, 150 foreign stops in a year. This year, as 
well as last year, we hit about 350 foreign venues, and we are 
on track to do that same thing this year. The President has, I 
believe, foreign stops in 30 countries for this year. The Vice 
President just came back from an 8-day trip to the Middle East, 
to include Iraq and Afghanistan. The President, today, is on a 
foreign trip. So that volume of travel continues to stay the 
same or go up, as well.

                      DHS SUPPORT AND COOPERATION

    As far as DHS and 4 years later, what I am seeing is a high 
level of support and cooperation. Again, when we looked at this 
campaign, we realized it was going to be very labor-intensive 
on our organization. I spoke to both Immigration and Customs 
Enforcement as well as with TSA regarding support from their 
organizations to help us through the campaign. So far we have 
not had to rely on the support of ICE. However, we have used 
screeners from TSA to help with all of the screening that we 
have done during the campaign. They work side by side with our 
uniform division officers.
    So far in this campaign, we have used, at all of our 
venues, about a thousand TSA screeners. This has not only been 
a very good partnership from an operational point of view, but 
also from a business perspective it has really been very 
advantageous, in that we have not had to travel people, lodge 
people, pay per diem for people, but we are using those TSA 
screeners at those local locations where they are able to come 
in and work for that 4 or 5 hours for that particular visit and 
perform their duty and then they are finished up. And, quite 
frankly, it has really, I think, created an era of 
collaboration between our uniform division officers and TSA as 
well, and it has been, I think, a very good learning experience 
for both.
    Mr. Price. Thank you, sir.
    Mr. Rogers.

                        COSTS OF PROTECTIVE DAYS

    Mr. Rogers. Briefly on the presidential campaign, you have 
what you call a protective day, right?
    Mr. Sullivan. Yes, sir.
    Mr. Rogers. And that means that is what it takes to protect 
one protectee for 1 day?
    Mr. Sullivan. Yes, sir.
    Mr. Rogers. Do you have an estimate of that cost per day?
    Mr. Sullivan. Yes, sir. Last year, when I appeared before 
you, we estimated that it would be about $44,000 per day. So 
far for this year, when we look at the numbers, we believe we 
are somewhere between $37,000 and $38,000 per day. However, 
again, as that tempo--and I do believe that the tempo will pick 
up, I assume that we are going to be pretty much on target. 
Right now we are at about $37,000, $38,000 a day, sir.
    Mr. Rogers. That is per protectee?
    Mr. Sullivan. Yes, sir.

             DETERMINING WHEN CANDIDATES RECEIVE PROTECTION

    Mr. Rogers. How many protectees do you have now?
    Mr. Sullivan. Candidate protectees?
    Mr. Rogers. Yes.
    Mr. Sullivan. Two, Senator Obama and Senator Clinton.
    Mr. Rogers. But not Senator McCain?
    Mr. Sullivan. No, sir.
    Mr. Rogers. Why is that?
    Mr. Sullivan. Sir, he has not requested protection.
    Mr. Rogers. How do you go about mechanically deciding who 
gets protected and who doesn't?
    Mr. Sullivan. The decision to provide protection is made by 
Secretary Chertoff. He is aided in that decision by a five-
member advisory committee. The advisory committee is made up of 
the Speaker of the House, the Minority Leader of the House, the 
Leader of the Senate, as well as the Minority Leader of the 
Senate. In addition to those four people, there is a fifth at-
large person who is on the committee. This year, that fifth at-
large person is the Sergeant at Arms for the House. Last time 
around, it was the Sergeant at Arms for the Senate.
    There are guidelines that each candidate has to comply with 
in order to be eligible for that protection. They have to have, 
you know, raised so much money. They have to be at a certain 
point in the polls. They have to belong to a major political--
recognized political party.
    Having said all that, if they do fit all of those 
guidelines and if they do request protection, that request will 
go to the Secretary. The Secretary, based on the advice he 
receives from the committee, will make a determination whether 
or not protection is warranted or not.

                     2008 CAMPAIGN PROTECTIVE DAYS

    Mr. Rogers. Now, last year, you, I think accurately, 
predicted that there would be an increase in the number of 
protective days because of what looked like a big campaign, a 
lot of candidates and so on. And you estimated a need, at that 
time, of 739 protective days--protection days, I guess you call 
them--as opposed to the 454 days for the 2004 presidential 
campaign. A substantial increase, almost double.
    Mr. Sullivan. Yes, sir.
    Mr. Rogers. Has that panned out to be true?
    Mr. Sullivan. It has, sir. Going back to--not including the 
days going from May until October, but going from October to 
now, we are right at about 440 days, I believe, of protection. 
So, although we thought these days would come in a different 
fashion, the way it has played out, we are pretty much on track 
for what we predicted. When you look at how many days we have 
left going through October of 2008, I believe our prediction 
will be pretty much on target.
    Mr. Rogers. Well, I think you said you have provided 
protection at over a thousand events so far in the campaign, 
correct?
    Mr. Sullivan. Yes, sir.

                     SECRET SERVICE INVESTIGATIONS

    Mr. Rogers. Let me switch briefly and quickly to the other 
half of what you do, and that is investigate criminal activity 
in the financial world.
    I am concerned, as we discussed last year, that with this 
heavy work that you are doing in protecting people, especially 
in the presidential campaign, that we will not get the equal 
treatment that should be given to investigating crimes, 
financial crimes.
    Can you help me alleviate that worry?
    Mr. Sullivan. Yes, sir. That was a--as with you--and, 
again, I do appreciate your support on that Congressman 
Rogers--that was a concern we had, as well. And we believe we 
had a very aggressive and a very strong momentum going on into 
the campaign, and we didn't want to lose that. And I would say 
I don't believe we have lost that momentum.
    You know, as you know, I believe you were referring to our 
return on investigation, where we take a look at qualitatively 
and quantitatively, you know, how are we performing. And last 
year, for the first time, we did take a look at that. We came 
up with the result of 50 percent protection and 50 percent 
investigation. And we never want to go below that minimum.
    But I can tell you, during this campaign, we continue to 
work some very, very high-quality investigations. I was just 
briefed on a cyber investigation that we are doing right now. 
It is an undercover cyber investigation, where we have 
identified and arrested an individual who was responsible for 
hacking into computer systems and getting over $1.5 million--
1.5 million accounts from various individuals.
    I continue to see this type of investigation where our 
agents are not only identifying individuals who are responsible 
for millions of dollars of fraud, but they are also conducting 
investigations in a timely manner where they are preventing 
additional millions of dollars' worth of fraud.
    So I do believe that we are able to maintain that 
investigative initiative that is so important to our mission.
    Mr. Rogers. Well, I certainly hope and trust that you will 
keep your eye on that ball continuously. Because the Secret 
Service is the Nation's premiere investigators of financial 
crimes. And in this day now of cyber security and the worry 
about being hit and attacked in cyberspace, especially with our 
financial system now reliant upon that type of communications, 
as well as everything else, is terribly important.
    So can you assure us that nothing is being sacrificed in 
the investigations arena in order to finance this heavy load of 
protection that you are having during the presidential 
campaign?
    Mr. Sullivan. Congressman, there is no denying that we are 
taking assets away from investigations to, you know, do our 
protection. However, I do believe we have a pretty good 
strategy that we can continue to maintain that momentum.
    You know, one of the things, I believe, that has become a 
great asset for us are our electronic crime task forces that we 
have throughout the country. We have 24 of these task forces 
out there. And I think that combined strength of other State, 
local and Federal law enforcement to run these task forces, as 
well as the academia partners we have, as well as our financial 
and banking partners that are involved with these task forces, 
just will not allow that drop to take place.
    I really do feel that the strength of our investigative, in 
particular our cyber investigations right now, the strength of 
that, are these electronic crime task forces out there. And it 
is my desire, my hope that we can open more of these electronic 
crime task forces out there, because I think that it is a great 
force multiplier. I think it is a great example of partnership. 
And I think that the proven success that we have been able to 
show just makes them an advantage that we need to continue to 
maintain.
    Mr. Rogers. Well, at the direction of this subcommittee 
last year, we were encouraging you, and you have instituted, 
improved planning and performance metrics for mitigating and 
tracking the impacts upon investigations. And you made it a 
priority to ensure long-term investigative efforts are not 
derailed during the campaign. That was at our discussion last 
year.
    Mr. Sullivan. Yes, sir.
    Mr. Rogers. And the committee helped you and you followed 
through on setting up those metrics to let everyone know 
physically whether or not investigations were being impacted by 
protection.
    Are those metrics available? And are they demonstrative of 
the fact that we are not hurting investigations?
    Mr. Sullivan. Sir, there are responsible, as far as I know, 
for 2007. I looked at those for 2007. We have not completed 
those yet for 2008. But when I do look at them for 2007, we are 
in the ``outstanding'' category for every one of those four 
metrics that we use, as far as the impact on the community, as 
far as the number of prosecutions that we have, as far as the 
assessment by the U.S. Attorney's Office, as far as the 
assessment by the financial institutions. All of those metrics 
have been well met. And we are continuing to keep an eye on 
those.
    And if you haven't seen those metrics, I would be more than 
happy to provide those to you, sir.
    Mr. Rogers. Well, perhaps you can, maybe not necessarily 
for the record, but for the committee's review.
    Mr. Sullivan. Yes, sir. I really do appreciate your support 
on that initiative. It is important to us.
    Mr. Price. Thank you.

                   SENATOR MCCAIN'S PROTECTION STATUS

    Mr. Rodriguez.
    Mr. Rodriguez. Thank you very much.
    I am actually surprised to hear that Senator McCain is--not 
that he hasn't asked, but that we are not protecting. Is there 
certain levels or faces of protection--any of that, in effect?
    Mr. Sullivan. There are not, sir.
    Mr. Rodriguez. We don't have an automatic preliminary level 
because of the fact that he is the candidate of the Republican 
Party, as a presidential candidate, that we protect him at a 
certain level even though it is not being asked for?
    Mr. Sullivan. Sir, statutorily he is not required to take 
protection.
    Now, we have been in contact with his staff, and there have 
been conversations with his staff to make sure that they are 
aware of what the guidelines are.
    So there have been those conversations. But as far as an 
actual request, there has not been one yet.
    Mr. Rodriguez. So we don't go in advance and secure some of 
the sites where he might be at or anything like that? You don't 
have to respond. I mean, if you can't respond, let me know. But 
I would presume that we would have some kind of initial phases 
that might not have anything to do but securing the place where 
they might participating in, or those kind of things that might 
not interfere with him but yet making sure that, you know, 
there is some protection going on.
    Mr. Sullivan. Congressman, we have no involvement, at this 
point.

                           CONVENTION VENUES

    Mr. Rodriguez. Okay. Let me ask you, based on the resources 
that you have now, do we do any preliminary phases, for 
example, for the presidential conventions on both parties to 
securing and checking those facilities way in advance and 
making sure that we are on top of the program way before and we 
are not jeopardizing any of that?
    Mr. Sullivan. That is a good question, Congressman. 
Positively, we do. We have looked at every venue. Our people 
are looking at every venue, every site that is going to be 
involved in this particular convention. As I mentioned before, 
there are these 17 subcommittees, and each one of them look at 
these venues from their perspective. But this will be a very 
detailed and very in-depth plan.
    Mr. Rodriguez. And we shouldn't be worried about any of 
that being as a result of not having the resources that you 
need in order to make that happen--occurring?
    Mr. Sullivan. I do appreciate your concern at this point. I 
have not been told that there is any issue as far as us needing 
any resources. But believe me, sir, if there are any needs like 
that, I will make sure that I make the committee aware of that.

                             USSS DIVERSITY

    Mr. Rodriguez. Let me ask you, in terms of just the 
diversity of the Secret Service, can you make any comments as 
it deals with your diversity, as it deals with minorities and 
women? Do you know what those numbers are or the figures are?
    Mr. Sullivan. Sir, I do not have the numbers off the top of 
my head. But I----
    Mr. Rodriguez. Could you give me that, you know, later on? 
And also in terms of the multilingual or linguistic 
capabilities of the department?
    Mr. Sullivan. Sir, I would be more than happy to come up 
and give you a full briefing on that. But I will say that the 
outreach, the recruitment and the retention of a diverse 
workforce is extremely important to me and is a priority, and 
it is a priority with our organization. But I look forward to 
coming up and providing that information to you.
    Mr. Price. We would actually appreciate that information 
for the record, as well.
    Mr. Sullivan. Yes, sir.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T2401A.158
    
    Mr. Rodriguez. And I think probably the fact that we have 
the first woman ever as a presidential candidate and the first 
African American ever as a possible presidential candidate also 
and I think that--I don't know if that has helped in improving 
on that, if any.
    Let me also ask you on cybersecurity issues, are you 
basically engaged just domestically or internationally? Or 
where is the distinction there that is made?
    Mr. Sullivan. Both domestic and internationally. You know, 
cyber crime is a borderless crime, and we see hundreds of 
thousands of account numbers that are here in the U.S. one 
minute and they are transferred electronically to a foreign 
country the next minute.
    We have 21 field offices around the world, and they are all 
being very, very proactive with their foreign counterparts. And 
I think we have some great examples of that partnership.

                             CYBER SECURITY

    Mr. Rodriguez. And where is the distinction that is made--
Mr. Chairman, if I can ask--where is the distinction that is 
made between your role, the FBI, Homeland Security and CIA and 
all of the others, as it deals with cyber?
    Mr. Sullivan. You know, as this whole cyber issue has 
exploded, there are many, many people that have jurisdiction 
and authority to combat it, to investigate it and to be 
involved in it. And we have our role, which is as it relates to 
cyber crime and financial crimes, and that is pretty much a 
niche that we have been able to develop for ourselves.
    We work with all of our partners, whether it be the FBI, 
whether it be State and local law enforcement, or whether it be 
the Department of Homeland Security. I think the important 
thing is that we are all talking to each other and we are all 
coordinating it with each other.
    The one thing I found is that there is plenty of work out 
there for everybody, but the main thing is that we are 
coordinating it together. And as I said before, I believe that 
that coordination, from my point of view, is going very, very 
well.
    Mr. Rodriguez. Thank you very much. And thank you for the 
work that you do in protecting our people.
    Mr. Rogers. Thank you, Mr. Rodriguez. We will have some 
further questions about the very important issued you raised 
about coordination in the area of cyber crime.
    Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman.
    Director Sullivan, welcome.
    Mr. Sullivan. Good morning, Congressman.
    Mr. Carter. I am glad to have you here, and I appreciate 
the great work you do. It must be nice to be the director of an 
agency that most people perceive as being very effective and 
doing their job well.
    Mr. Sullivan. Thank you, sir.
    Mr. Carter. I think that is something you should be proud 
of.
    Mr. Sullivan. Thank you.

                    SECRET SERVICE RETIREMENT ISSUES

    Mr. Carter. And that brings up an issue that I learned 
about just yesterday, that I want to make sure that we figure 
out how to fix this, and maybe you have some ideas.
    I understand there is somewhat of a human capital at the 
Secret Service because there are about 175 senior agents and 
officers who were hired between 1984 and 1986 that face the 
fact that they might have to retire early or leave the Secret 
Service due to some kind of glitch in a retirement transfer 
between, as I understand it, having at one time been considered 
part of the Federal Government, then switched over to the D.C. 
police--I think these are your uniformed people--and then back 
to Secret Service, and they have some kind of retirement 
glitch.
    Are you aware of that? And, if so, what steps can we help 
you to resolve that problem so we won't have to see qualified, 
experienced agents have to retire because of a glitch in the 
retirement system? Are you aware of what that problem is?
    Mr. Sullivan. I will try to answer that as best I can. And 
I might not be entirely correct here, but I can get you a full 
briefing on that later. But I will attempt to try to give you 
an answer on that, Mr. Congressman.
    You know, as you know, back in 1984, beginning in 1984, a 
new retirement system was implemented for Federal employees, 
and we went from the civil service retirement system to FERS. 
For a period of time, when they weren't really sure how that 
plan, as I understand it, was going to be implemented, there 
was a bit of a limbo, I guess, as far as, you know, how that 
plan was going to work.
    We have a group of uniform division officers and special 
agents and other employees who came on, as well, that were non-
law enforcement people--and this goes through the whole 
Government. This is not just an issue with our organization, 
but an issue that was Governmentwide.
    I believe it wasn't until maybe mid-1986, I believe, that 
they realized that it was a--that a solution was found where 
FERS would start. But for that 2.5-year period, again, as I 
say, people were up in the air exactly what plan they were 
going to be in.
    Not to complicate things any more than that, Secret Service 
was in a--anybody hired by our organization prior to 1983 was 
in another separate 20-year retirement system, and that system 
also went away after 1984. It is the contention, I believe, of 
these agents and officers that you are referring to that, 
because there was no plan, they feel that they should be 
allowed to get back into this 20-year retirement plan.
    And let me just say, as the Director--and I am extremely 
proud to be the Director of this organization, as you pointed 
out, Congressman--and let me just say, as the Director, that I 
do want the best and what is fair for all of our employees.
    When this matter was brought to the former Director, asking 
him for relief, it was the opinion of our general counsel that 
this was not an issue for the Director to make a determination 
on. As a matter of fact, a determination had already been made, 
I believe by OPM and OMB, that all of these people, 
Governmentwide, not just in our organization, but anyone who 
came on subsequent to 1984 would be under this FERS retirement 
plan.
    The recommendation was made that if they were looking for 
some type of a relief or decision, that they would have to do 
that by legislation, which, in fact, is what I believe they are 
doing right now.
    As far as these agents or officers being forced to leave 
because of that retirement system, that, as far as I know, is 
not the case. I mean, like any other employee, they are 
entitled to--you know, I believe the retirement is 25 years at 
any age or 20 years at 50, and that would apply to these 
particular individuals et al., as well.
    I believe what they may be referring to is, from a 
retention point of view, they believe if they were allowed to 
be in the plan going back prior to 1984, that that would be a 
retention vehicle and that that would encourage them to stay 
longer because of that retirement plan.
    Mr. Carter. And I am just speculating, okay. I don't know 
the facts, and that is why I appreciate that. Are you seeing 
any early retirement or leaving of the service of people who 
fall in that category?
    Mr. Sullivan. I have not. For special agent, our attrition 
rate, Congressman, is about 4.5 percent, I believe, at this 
point. Uniform division is upwards of about 9.5 percent.
    But as far as based upon that issue, I--and, again, I would 
have to check; I am just talking off the top of my head here--
but I am not aware of one. But, again, I would be happy to look 
into that.
    I hope I did give you an accurate picture of what is going 
on, but I am sure somebody here will correct me. And I will get 
the right information to you.
    Mr. Price. Again, if there is further information that you 
wish to furnish, we will be happy to put it in the hearing 
record.
    Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman. Please excuse my 
tardiness. Trying to cover more than one meeting at 10 o'clock.
    Thank you, sir, for coming.
    Mr. Sullivan. Nice to see you.
    Ms. Kilpatrick. I will read the testimony. I went over it a 
bit last night, just to see how the agency is doing. As 
Director, how long have you been there, sir, as Director?
    Mr. Sullivan. Two years now.
    Ms. Kilpatrick. And everything you thought it would be?
    Mr. Sullivan. And more.
    Ms. Kilpatrick. And more is a good answer, good answer.
    Mr. Sullivan. It is going great. Thank you.
    Ms. Kilpatrick. Thank you.

                   SECRET SERVICE PROTECTIVE MISSION

    I want to talk a little bit about the protection, and I 
know you protect current Presidents, past Presidents and their 
families, minor children, I understand. That seems to be within 
your budget restraints, and I don't see a big budget ask for 
that, so I am assuming that you are handling that fine?
    Mr. Sullivan. Yes, ma'am.
    Ms. Kilpatrick. And this campaign season that we are now 
in, $110 million in this budget year to handle that, does it 
meet all of your requirements for this campaign year? It is 
bigger than it has ever been and different, for sure. Is it 
meeting the demands of the agency?
    Mr. Sullivan. Congresswoman, it is. So far we are doing 
pretty well, and I believe we are right on track for the 
estimate that we had provided last year.
    Ms. Kilpatrick. Okay. And as you cover the campaigning 
season, I think it says something in the law about major 
candidates. Do you also look at or have information on--and you 
don't have to share it in open committee; I am asking more just 
to know.
    When candidates, as we as Members of Congress get from time 
to time, threatening or other kinds of e-mails and mail, do you 
have that kind of problem with the current campaign season that 
we are in, with the people who are running?
    Mr. Sullivan. With the number of threats going up?
    Ms. Kilpatrick. Yes.
    Mr. Sullivan. During a campaign, with all of our 
protectives, we pay an awful lot of attention to the threats 
out there. You know, I get briefed daily on the threats that we 
are seeing. During a campaign, we do, as the campaign continues 
to go on. The more information we begin to see, some of it is 
threatening and some of it isn't threatening.
    Ms. Kilpatrick. And some of it is nice, I hope, as well, 
right?
    Mr. Sullivan. Some of it is nice. But if there is any type 
of threat, the one thing--we are very, very aggressive on that, 
and we will go out and do a complete and comprehensive 
investigation on that particular threat.
    Ms. Kilpatrick. And you feel your agency has the resources 
to handle this campaign season, unlike any other, in a manner 
that is required of your agency?
    Mr. Sullivan. Congresswoman, I do. And, again, the 
cooperation we are getting from all of our State, local and 
Federal partners out there has been terrific. I feel very 
comfortable with between internally what we have and what we 
are doing, and with our external partners as well. I feel we 
are getting everything we need.
    With all the travel we have done, it really has been a big 
demand on State and local law enforcement. And they have just 
been terrific in giving us that needed support. And we couldn't 
do our job without them.
    Ms. Kilpatrick. I think the partnership is very important.
    Mr. Sullivan. It is.
    Mr. Kilpatrick. It has to be effective and very well done.
    Mr. Sullivan. Yes, ma'am.

                              CONVENTIONS

    Ms. Kilpatrick. And then finally for me, as we move to 
conventions, both conventions, one in August and one in 
September, does the same line handle that expense for you, or 
is there another something in that budget where that is 
identified?
    Mr. Sullivan. That was all put into the budget for both of 
those conventions.
    Ms. Kilpatrick. As we plan for those, and you are fine in 
that regard?
    Mr. Sullivan. Yes, ma'am.
    Ms. Kilpatrick. Thank you very much.
    And thank you, Mr. Chairman.
    Mr. Price. Thank you.

           VICE PRESIDENTIAL PROTECTION AFTER LEAVING OFFICE

    Mr. Director, while we are on this protection budget, I 
want to ask you about a rather puzzling provision in your 2009 
request that perhaps you can clarify.
    The budget proposes a provision allowing the Secret Service 
to protect the Vice President for up to 6 months after he 
leaves office. Now, in the past, this protection has been 
afforded to former Vice Presidents, but it has been done either 
by Executive Order or by a joint resolution of the Congress.
    So why is this provision included in the Homeland Security 
budget since the Appropriations Committee really has no 
standing to change the Secret Service's statutory authorities? 
Why doesn't your budget include funding to pay for this 
proposal?
    Does the President intend to designate protection to Mr. 
Cheney after he leaves office? Have you or your legislative 
affairs staff spoken about this proposal with the Judiciary 
Committee, which would have jurisdiction over this kind of 
legislative change?
    Mr. Sullivan. Yes, sir. I would agree with you. As you 
know, Chairman, over the last 40 years, the departing Vice 
President has been afforded protection by our agency. Going 
back to the last two Vice Presidents, we have provided 
protection going into July of that year that they departed, a 
total of about 180 days.
    As I have said before, we do not make the determination 
who--and as I mentioned to the Congressman earlier, we do not 
make a determination who does get protection. We do provide it. 
However, we believe that it is a pretty safe bet, with the 
threat environment that we face today, that Vice President 
Cheney will be afforded Secret Service protection upon his 
departure in January of 2009.
    Mr. Price. Excuse me, but if it is a safe bet, why is there 
no specific budget provision? Is your assumption that you just 
absorb the cost out of other funds available?
    Mr. Sullivan. We do plan on eating that out of our other 
funds available. We figure it is going to be about $4 million 
to--that is what we paid last time, about $4 million. We felt, 
by having this included in the appropriations budget, this 
would be a transparent way of bringing this issue out.
    We have also, as you asked about, sir, we have talked to 
Judiciary. We have made them aware of this particular 
provision. And we are currently working with them, as well, on 
the issue.
    Mr. Price. All right. And there are traditionally two paths 
by which this has been done; one of which is the Congressional 
joint resolution, and the other of which is the presidential 
designation. You have no information that that will or will not 
be forthcoming from the President?
    Mr. Sullivan. I do not. No, sir.

                    CENTER FOR INFORMATION SECURITY

    Mr. Price. Let me turn to a matter that is reminiscent of 
our hearing last year. I am sure you remember our conversation 
last year about the new training facility, the Secret Service 
and the National Protection and Programs Directorate jointly 
established in Alabama without prior Congressional notification 
or approval. I said at the time, and I think Mr. Rogers did as 
well, that it is inappropriate for the executive branch to make 
new decisions about spending money without Congressional 
involvement. So I have to ask you, and I have told you and your 
staff that this question would be forthcoming--I have to ask 
you why our committee staff only recently found out that last 
August, well after the 2008 budget hearing, the Secret Service 
established yet another center, this one a research center at 
the University of Tulsa for specialized analysis of cellular 
telephone technology, without first seeking Congressional 
approval? Funding for this research center was awarded without 
any announced competition and without public notice.
    And I want to be scrupulously fair about this. I understand 
that there are some differences. This isn't identical to the 
Alabama issue since the program is being funded through the 
Asset Forfeiture Fund, and the Treasury Department did send a 
letter last year to the Financial Services Appropriations 
Subcommittee about it. However, I do believe the fundamental 
situation is the same. This is a new program in your agency 
whose purpose and need were not reviewed by this subcommittee 
or by any other committee up here. The budget has never been 
presented to us until last month. So, there is the potential 
for this program to need appropriated funding in the future, 
particularly if the Asset Forfeiture Fund produces less revenue 
than expected.
    So I just have to ask what processes you can and will put 
in place to make sure this doesn't happen yet again. This 
subcommittee needs your assurance that we are not going to be 
uncovering another situation like this in the future, that we 
are simply going to have the kind of notification that we need 
and the ability to review with you the kind of budgetary needs, 
the process for competing these proposals, you know, all the 
kind of process safeguards that we count on in these cases.
    What can you say about this, and what assurances can you 
give?
    Mr. Sullivan. Thank you, sir.
    Sir, I was under the impression that there was a 
distinction and that this was done in a transparent fashion. 
The center you are talking about is the Center for Information 
Security, which is at the University of Tulsa, and they are 
known for their technical specialized expertise as it pertains 
to the use of cellular telephones. And as you know, sir, 
cellular telephones are used for the same purpose as computers 
are as far as being able to conduct different types of 
financial and electronic crime, and it is our opinion that this 
Center for Information Security is the leading program 
providing academic research, and that is what this relationship 
is all about. It is about research. And that is where this 
asset forfeiture money went was towards this research.
    Again, there is a rigorous approval process for us to use 
these asset forfeiture funds. It requires that we write a 
detailed explanation to asset forfeiture with an explanation 
and a justification for why we are looking to use those funds. 
That written request will then go to Treasury Department, where 
they will review it for either approval or disapproval. In this 
particular case it was approved, and as I understand it, 
Treasury then submitted that to their congressional oversight 
for their approval.
    From our point of view, we are under the belief that we did 
comply throughout the entire process with Treasury and with 
Congress as far as getting the proper approval for this, as 
well as in other years with asset forfeiture funding, and last 
year I believe we got about $24 million in asset forfeiture 
funding. We provide this committee with a breakdown of all of 
our asset forfeiture funding.
    So again, sir, I do believe that, from our point of view, 
we did try to be very transparent here and make all the people 
aware that we were told we needed to make aware of this. If 
there is more that we need to do to work on this process, I 
want to work on it with the committee to make sure that we can 
make that happen.
    Mr. Price. I think we are going to have to do that, 
frankly. This may have been transparent in some quarters. It 
wasn't transparent here. It wasn't transparent with us. And 
this is, after all, a Homeland Security agency.
    As I said, we understand there are some differences with 
the Alabama case in terms of where this money comes from. And 
the issue, by the way, is not the virtues of the University of 
Tulsa program. We understand that this is probably a fine 
program, but that would be all the more reason why it could 
withstand a competitive process.
    So there are multiple questions, I would say, here of good 
process involved. One is how you award these kinds of 
contracts, and the one that concerns us at this moment is the 
kind of awareness this committee has of your activities. And as 
I said, this has future, if not present, implications possibly 
for our appropriations bill and so forth. So we are going to 
need to address this, I think, in a more systematic way than we 
did last year. I don't think an informal understanding is going 
to work. We are going to have some agreed-upon ground rules for 
dealing with these situations.
    Mr. Rogers. Will the Chairman yield?
    Mr. Price. I certainly will.
    Mr. Rogers. I want to echo the Chairman. We went through 
this last year, and we had a blowup. It was not pleasant. It 
left a bad taste certainly in our mouths about the Alabama 
matter. And I thought from that point on you would be extremely 
cautious about doing this type of thing essentially again and 
without some consultation with those of us who have to figure 
out where the money comes from. And I know these are asset 
forfeiture funds, but I thought the uprising that occurred last 
year with the Alabama matter would have sensitized you more 
than apparently it has.
    Mr. Price. I thank the gentleman and invite him to 
continue. It is his turn to ask questions.
    Mr. Sullivan. Sir, just to that point I will say that we do 
look forward to working with the committee on that to make sure 
that if it is not transparent enough now, I do want to make 
sure that it is transparent. And I do appreciate your support, 
and I want to make sure that we do get this information to you 
in the right way.
    Mr. Price. We appreciate that. I assure you it is not 
transparent now. And we do need to work on this.
    Mr. Rogers.

                     NATIONAL CYBER SECURITY CENTER

    Mr. Rogers. Let me get back to cyber security. The 
President just announced a new special cyber security czar, I 
guess you would call it, a national cyber security center. Tell 
us what you know about that and how you will be working with 
them, that new office, as well as the regular Department of 
Homeland Security cyber security agency.
    Mr. Sullivan. Yes, sir. As I understand it, the Department 
has brought in an individual who is going to be the Director of 
the National Cyber Security Center. As I have been briefed, I 
have not met with that individual yet, and we do have a meeting 
coming up here, I believe. He is currently putting together his 
concept of operations. And that is pretty much all I know about 
that position right now.
    As far as our relationship with the Department as it 
pertains to cyber, I have a very good relationship with Under 
Secretary Robert Jamison, who runs the NPPD, as you know, and 
he deals with the cyber issues within the Department.
    I believe that the Department does recognize the talent and 
the attributes that our program brings to the table, and we are 
working with them to provide them with people to go over and 
work within their initiatives. As a matter of fact, we have 
several of our senior managers who are going over to work for 
Mr. Jamison right now to help him with these particular issues. 
We have a strength as it pertains to network intrusion and 
forensic research, and those particular things are going to be 
utilized by the Department.
    Mr. Rogers. Well, the DHS already has a National Cyber 
Security Division within their National Protection and Programs 
Directorate that you have referred to Jamison being the 
Director of that.
    Mr. Sullivan. Yes, sir.
    Mr. Rogers. Do you understand what this new office of the 
President has created, the National Cyber Security Center, how 
that differs from what we already have within the Department?
    Mr. Sullivan. I think this new center, sir, is a more 
holistic approach as far as the coordination goes 
governmentwide. We have again so many people with jurisdiction 
and authority when it comes to cyber. We have DOJ, DHS, the 
DNI, DOD all working cyber. I believe this particular person is 
going to be responsible to make sure that all of those efforts 
are coordinated in a very unified way.
    The Department is more involved with the internal issues 
going on within the Department as well as taking a look, I 
believe, as it pertains to the dot-gov challenges that we 
currently have, and I believe that is what is being worked on 
by the National Cyber Security Division as opposed to the 
National Cyber Security Center.
    Mr. Rogers. Well, you know, I hope we don't get lost in the 
acronyms and agencies here, because it is a clear mission that 
needs to be prosecuted. The Secret Service is the lead Federal 
investigative agency for financial crime, including financial 
institution fraud and false ID documents. And given the fact 
that most modern financial systems these days, the banking 
world, are now entirely electronic in nature, and you have been 
and are the chief lead investigative agent of the government 
for these types of crimes, it seems to me that Secret Service 
should be right in the center of things in this respect. Do you 
think you are?

                             CYBER SECURITY

    Mr. Sullivan. Sir, I believe we are. And I think that is 
recognized, and although, you know, it is a classified 
document, but in HSPD 23 I believe that we are recognized as 
far as our efforts and as far as our ability as it pertains to 
cyber. I believe within the Department it is recognized what we 
bring to the table as far as cyber is concerned.
    I really do think the big effort here, and I know there are 
a lot of acronyms out there, but I do believe it all is 
directed towards making sure there is one coordinated effort as 
it pertains to cyber, whether it has to do with financial 
crimes or attacks on our infrastructure, network intrusion into 
government systems. I believe that this new center they are 
putting together, I believe that that is the goal here.
    Mr. Rogers. Is the financial cyber system vulnerable?
    Mr. Sullivan. I think right now every system is vulnerable. 
Again, when I look at these people that are conducting these 
attacks, we have some people here that are just very talented. 
They are very aggressive, and they are very technology savvy. 
We just had a particular investigation where we arrested an 
individual who was involved in cyber crime, and he had an 
encryption system on his computer which was as complicated as 
we had ever seen before.
    So I believe that we are up against some pretty smart 
albeit criminal thinkers out there, and I think that is why 
these partnerships are so important with academia and the 
business community in that we are looking at these trends, we 
are identifying these trends, we are identifying the method of 
attack, and we are doing everything that we can do to notify 
people and make sure that they are able to protect themselves 
from that attack.
    Mr. Rogers. What can you tell us in this open atmosphere, 
open session, what can you tell us about the number of cyber 
attacks and where they come from and who they are?
    Mr. Sullivan. Sir, I think that is something I prefer to do 
in a closed session.
    Mr. Rogers. What about the number?
    Mr. Sullivan. Sir, I do not have--it is hundreds of 
thousands, but I don't have the exact number.
    Mr. Rogers. Hundreds of thousands per year?
    Mr. Sullivan. I would say--probably say in the millions per 
year.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Price. If I could just echo that request, I think 
whatever you can furnish in a nonclassified fashion that would 
be a useful number for the record just to give some specificity 
to the answer you just gave Mr. Rogers.
    Mr. Sullivan. Mr. Chairman, I would have to go back and get 
the numbers.
    Mr. Price. You can furnish that for the record.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2401A.159
    
    Mr. Price. Let me just underscore the line of questioning 
that Mr. Rogers was undertaking. I fully appreciate the 
priority that the administration is attempting to give this 
area, but I do think there is a fair amount of confusion about 
the division of labor, and that confusion is really reflected 
rather than resolved in the budget request we have.
    The ICE budget includes funds for new cyber investigations. 
There is no increase in your budget for the Electronic Crimes 
Task Forces apart from inflation.
    And then there is the question of the lines of authority. 
The FBI's cyber investigations Web site describes its role as, 
quote, ``to lead the national effort to investigate and 
prosecute cyber crime.'' So, I think the questions are very 
well taken, and I think any--we are going to be needing 
clarification on this as we write the budget, to say the least.
    Mr. Sullivan. Yes, sir. And I would just emphasize that our 
role as it pertains to cyber is the investigation of cyber 
financial crimes. That is our role that we perform.
    Mr. Price. Thank you.
    Mr. Rodriguez.
    Mr. Rodriguez. Thank you, Mr. Chairman.
    I want to continue to follow up on that same issue. It 
might work out okay now as you establish it, but, Mr. Chairman 
and Minority Leader, I think as another administration comes 
into play, you basically well might just have another 
bureaucracy there that might not be talking to DOD, that might 
not be talking to the FBI and NSA and all the others, and we 
have created another situation where I know nothing was more 
frustrating for me right prior to 9/11 than to find out that 
back home there was mainly a little fighting competition 
between some of the agencies down there. If it was not the FBI 
and the Border Patrol and the other drug agency fighting each 
other, then we might have a situation created here where they 
are not going to be talking to each other unless maybe 
legislatively, you know, we require some of them to dialogue 
with each other, because from one administration to another 
they just might not do that.
    Mr. Rogers. Will the gentleman yield?
    Mr. Rodriguez. Yes, sir.
    Mr. Rogers. We are all a little concerned about the same 
thing here, I think, and that is if you have two masters, you 
really have no master. If two people are in charge, no one is 
in charge. And that is what I think our concern is. You know, 
Secret Service historically has been our financial 
investigative experts, and now in the cyberspace days they 
still are. But they are not the experts in DOD or military 
cyberspace intrusions, nor are they in other crimes that may 
occur in cyberspace. So obviously there is a larger picture 
here, and the new office, as I gather, will be sort of the 
coordinating cyberspace intrusion office for the whole 
government, and Secret Service will still be within DHS the 
financial crimes cyberspace investigators. Have I said that 
more or less accurately?
    Mr. Sullivan. I agree with you, Congressman. I do think 
there has been a recognition that there are a lot of people, a 
lot of organizations out there, a lot of departments out there, 
a lot of agencies out there that do have authority and 
jurisdiction as pertains to cyber. And I think this is an 
effort to make sure all of those efforts are coordinated, and 
that everyone is talking to each other. But again, from my 
point of view, I think that there is some very, very good 
partnership and cooperation going on right now.
    Mr. Rogers. Thank you.
    Mr. Rodriguez. Thank you.
    I have the same concerns as to when does it become one that 
deals with money or one that deals with drugs or one that deals 
with national security issue, you know, and that dialogue is 
occurring between the agencies. And I would just be concerned 
in terms of, you know, it might be okay now, but as other 
administrations come in, you know, what does that do to that 
situation in terms of that require dialogue, unless you mandate 
it, you not have the initial dialogue that is needed and that 
is required.
    I know that from my perspective I have spent 8 years on the 
Armed Services Committee, and there was very little dialogue in 
terms of us receiving anything. I shouldn't say anything; most 
of the time there were not. I read it in the newspaper before I 
got it in terms of secret meetings. And so I would presume that 
the concerns that I would have would be between the dialogue 
between the two people, whether it be just on a superficial 
level or to the direct cases that are out there. And I know DOD 
has been involved with this issue since the 1950s in terms of 
defending our country, and so I think it is something we need 
to continue to get on. Thank you.
    Mr. Sullivan. Again, from a law enforcement perspective, I 
think when you look at cyber, cyber is just a different type of 
tool than was used 50 years ago to rob a bank. Fifty years ago 
when you rob a bank, you would use a gun. Twenty years ago when 
you robbed a bank, you used a pen. And today when you rob a 
bank, you use a keyboard. And I think that is what you are 
seeing with a lot of different violations that all of us are 
out there, whether it is ICE or the FBI, a lot of the 
violations we have now that were done are traditional crimes, 
but they are being done now in a more nontraditional way using 
cyber. And from what I see from the law enforcement perspective 
is that we are just reacting to that evolving methodology of 
performing that crime.
    Mr. Rodriguez. If I may, and the same thing applies for 
defense or----
    Mr. Sullivan. Yes, sir.
    Mr. Rodriguez [continuing]. Or on the offensive the first 
thing we do, if we are going to do anything, is through 
cyberspace, and the first thing we will receive or hopefully 
catch on if something is going to occur in our country is 
through cyberspace.
    Mr. Sullivan. Yes, sir.
    Mr. Price. Thank you.
    Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman, and this is a good 
line of questioning, and I also have a lot of concerns in this 
area.

             INVESTIGATIVE AND PROTECTIVE WORK LOAD BALANCE

    Back to a question a long time ago that I don't think I got 
an answer. Do you have an idea what the percentage is between 
the protection division and the investigation division of 
number of percentage? Eighty-twenty? Sixty-forty?
    Mr. Sullivan. It is about 50-50 right now.
    Mr. Carter. Fifty-fifty, that is good.

            IDENTITY THEFT AND VULNERABILITIES OF TECHNOLOGY

    I think that everybody is aware that the number one fastest 
rising crime in America today is identify theft, and that has 
been for several years now. Today I went to an antiterrorism 
joint bipartisan meeting this morning, and we were told that 
the rise of the cell phone, the rise of the Internet is the 
fastest single thing going wrong in every center of terrorist 
activity in the world; that in just Iraq alone they went from 
zero cell phones to basically 100 percent cell phones for every 
person between the age of 15 and 40, which is pretty amazing. 
And in Iran the cell phone spread was 800 percent in the last 2 
years. And all these young people are very talented on these 
phones. They are much more talented than we are.
    The question that the man asked was, have you read the 
instruction manual on your BlackBerry? How many of you have 
read the whole thing? Nobody raised their hand. He said, well, 
then, you wouldn't know that with bluetooth capability there is 
a lot of things more that you can do with it than just walk 
around with the little funny thing on your ear. And these kids 
know that is available. And the Internet cafe is the most 
popular place in the world outside the United States.
    So the cyber attack is massive. It is potential. And I 
agree with my colleagues. It looks to me, at least from the 
financial aspect, that is where a great deal of this is going 
to come from, especially at the small petty crime that 
ultimately becomes a great major crime factor. We need to know 
if you need extra resources because someone--the whole concept 
of government is somebody has to be in charge, and that is what 
we have been trying to cut through. That is what Homeland 
Security, as I got into it, as I understood it, was all about. 
Somebody has to be in charge.
    I personally would like to say if there are more resources 
you need to be the agency in charge, then I would like to know 
them before we are catching up. I would like to be ahead of the 
game rather than catching up, because I personally think this 
is a very dangerous area for every American citizen. So, do you 
need anything else? And if so, put it in there.
    Mr. Sullivan. Thank you very much.
    You know, sir, as far as our cyber initiative goes right 
now, we are depending on asset forfeiture funding for our cyber 
initiative, and we are--you know, our ability to either grow 
our cyber program, grow our, you know, Electronic Crime Task 
Forces out there is all dependent on what we get from asset 
forfeiture. So your support truly is appreciated, and I do 
thank you for that.
    And you know, as far as being in charge, as I mentioned 
before, I just really do think there are so many of us out 
there working cyber, and I think the important thing is that we 
just all coordinate our efforts with each other, and I do 
believe that that is underway right now, and I do believe that 
is occurring.
    Mr. Carter. Thank you.
    Mr. Price. Thank you.
    Mr. Sullivan, I am going to have some additional questions, 
but I think I will reserve them for the record.
    Mr. Price. I want to yield to Mr. Rogers, though, because 
he does have a final question.

                     COMMUNICATION INTEROPERABILITY

    Mr. Rogers. I will be brief, but I am somewhat concerned. 
My understanding is that your Secret Service radios are 
currently incompatible with the radio system utilized by the 
White House Communications Agency and State Department's 
Diplomatic Security Service. Is that correct?
    Mr. Sullivan. Sir, our radios, we still are able to 
communicate with our White House communication counterparts; 
however, over the last several years, the White House 
Communication Agency has been able to put in, I would 
guesstimate, about $250 million into their communication 
infrastructure. We have not been able to do that. They have 
been able to do go from a digital to a Web-based radio system 
where we are still on digital. I do believe that as they 
continue to receive additional funding at that level, and we do 
not get funding at that level, I do believe that there is a 
gap--there is a gap, and that gap is going to continue to 
become wider.
    Mr. Rogers. So it is interoperability we are talking about, 
right?
    Mr. Sullivan. Yes, sir.
    Mr. Rogers. And at the moment, as I understand it, you are 
on digital; the White House and the diplomatic service are on 
Web-based, right?
    Mr. Sullivan. Right now, sir, we are making it work. But 
again, my fear is that they can--as they continue to progress 
and we stay flat, we will not--that ability for us to be able 
to communicate with them is going to become more and more 
challenging. It is challenging now, but it will become even 
more challenging.
    Mr. Rogers. Is there a request in the budget for--any 
requests in the budget for this?
    Mr. Sullivan. Not in this budget, no, sir.
    Mr. Rogers. So you don't think it is that important?
    Mr. Sullivan. Sir, I understand that there are priorities, 
and this was a topic that we had talked about. However, this 
particular initiative was not able to get into this particular 
budget.
    Mr. Rogers. What would it cost?
    Mr. Sullivan. Right now we have a 5-year program. I believe 
the first year of this program is about $54 million we would 
need for that first year. I would have to get you the rest of 
the figures for that, sir, but I believe we are talking 
somewhere in the neighborhood of $200 million. But again, I can 
get you the exact figures on that, but I do believe the first 
year it is $54 million.
    Mr. Rogers. But you are saying you are making it work. How 
are you making it work?
    Mr. Sullivan. Sir, working with our IT people, working with 
our operational people, we are getting some help from WHCA as 
well, we are able to continue to communicate at this point. 
However, I do believe with the continued advancement of WHCA, 
we are not going to be able to patch it together the way we are 
right now.
    Mr. Price. Thank you.
    I say to the Ranking Member I think we have heard a unique 
formulation that a proposal was not able to get into the 
budget. What do you suppose that means? I think we get the 
picture.
    Mr. Rogers. As they say, a vision without funding is a 
hallucination. So I think we have just heard about a 
hallucination.
    Mr. Price. I think on the contrary you have identified a 
very real need, and it clearly has budget implications, and we 
need to look at it, and we will count on your cooperation in 
doing so.

                            Closing Remarks

    Mr. Sullivan. Thank you, Mr. Chairman.
    Mr. Price. And let me again thank you for your testimony 
and for your good work in what I know in a very demanding year. 
We have many occasions out in our districts and at foreign 
points. For example, when this subcommittee went to the Middle 
East in January, we received a debriefing the day after the 
President was in Jerusalem and Ramallah about the extraordinary 
effort--I don't know if it is matched in Secret Service 
history--the extraordinary effort to afford protection in those 
sensitive places on that sensitive mission. As I understand it, 
the City of Jerusalem was basically brought to a halt for one 
day and the City of Ramallah for another.
    Mr. Sullivan. It was a very challenging trip.
    Mr. Price. We understand that, and we also understand the 
intricate cooperation that is required in this case with our 
friends and allies as well as the partners you have in our 
government. So your mission and its importance are impressed on 
us in many ways. So we appreciate your testimony here today. We 
understand that we have some work to do on the budget, and we 
look forward to working with you.
    Thank you, and with that the subcommittee is adjourned.

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                                       Thursday, February 28, 2008.

        IMPROVING THE EFFICIENCY OF THE AVIATION SECURITY SYSTEM

                               WITNESSES

KIP HAWLEY, ASSISTANT SECRETARY, TRANSPORTATION SECURITY ADMINISTRATION
CATHLEEN A. BERRICK, DIRECTOR FOR HOMELAND SECURITY AND JUSTICE ISSUES, 
    GOVERNMENT ACCOUNTABILITY OFFICE
JAMES E. BENNETT, PRESIDENT AND CEO, METROPOLITAN WASHINGTON AIRPORTS 
    AUTHORITY
PEGGY E. STERLING, VICE PRESIDENT FOR SAFETY AND SECURITY, AMERICAN 
    AIRLINES

                  Opening Statement of Chairman Price

    Mr. Price. The Subcommittee will come to order. Good 
morning everyone. We welcome you to this hearing on improving 
the efficiency of the aviation security system.
    I first want to welcome our witnesses this morning, 
Assistant Secretary Kip Hawley, the Administrator of the 
Transportation Security Administration; Ms. Cathleen Berrick, 
the Director for Homeland Security and Justice Issues of the 
Government Accountability Office; Mr. James Bennett, President 
and CEO of the Metropolitan Washington Airports Authority, and 
Ms. Peggy Sterling, Vice President for Safety and Security for 
American Airlines. Welcome to all of you. We appreciate your 
appearance here today and we look forward to what you have to 
say. I will be asking you to each summarize your statement in 
five or six minutes and then leave plenty of time for 
questions. Of course, we will insert all the statements in the 
record.
    Today, we are going to be reviewing TSA's efforts to 
improve the efficiency of the aviation security system in the 
context of the agency's 2009 budget request. We do this at a 
time when the wait time data is mixed. At the nation's top 40 
airports, the wait times average only five minutes. But, we 
know that average figure conceals considerable disparities, 
even at a single airport. We have got to find ways to move 
airline travelers, their luggage, and air cargo expeditiously, 
while at the same time strengthening security. That is 
basically the focus of this hearing today and we will return 
more specifically to that wait time issue, some of the 
differences there and how we can reduce them.
    For fiscal year 2009, TSA is requesting a discretionary 
appropriation of just over $4 billion. That is an increase of 
less than one percent above the current fiscal year, far less 
than is needed even to address the effects of inflation. This 
request is made despite the public's growing demand on our 
aviation system and the fact that the aviation industry and our 
airports remain a valued target for terrorist attacks against 
our economy and our homeland.
    Based on the challenges we face, one would expect 
significant increases across several TSA accounts. But those 
increases, by and large, are not to be found in this budget. 
Secure Flight is an exception, vetting operations, but, 
generally, there are very few increases proposed that one would 
think are commensurate with the task at hand.
    At the same time, the budget request cuts key programs that 
help our aviation system operate more efficiently. For example, 
the request almost halves funding for checkpoint equipment and 
explosive detection systems. At the same time, airlines and 
airports are facing rapid growth in travelers and much of the 
checked baggage screening equipment is reaching the end of its 
useful life. To make up for some of these substantial 
reductions, the budget assumes a new aviation surcharge 
totaling $426 million that must be adopted by the authorizing 
committees. This surcharge, which has been rejected by Congress 
in the past, is something we appropriators have little or no 
control over. So, it is hard to discern how TSA can claim that 
we are going to be reliably improving the country's security 
when the budget proposes to cut the most critical programs 
designed for its protection or, at best, to make those programs 
contingent on some rather uncertain increases in surcharges.
    These budget reductions are being proposed as more and more 
demands are being placed on the aviation system. Since 2005, 
passenger levels have consistently exceeded those experienced 
before 9/11, overcoming the precipitous decline in airline 
travelers after that event. The Bureau of Transportation 
Statistics estimates that 2007 traffic will be 3.6 percent 
above 2006. That is 744 million passengers. FAA is optimistic 
about the future, estimating that U.S. commercial aviation is 
on track to carry one billion passengers by the year 2015. So, 
with these are record traffic levels and with the threats to 
our homeland that can accompany this, a flat budget, I believe, 
will not suffice.
    We have not yet mastered the efficient screening of all 
airline passengers. Repeatedly, TSA has told this Subcommittee 
that Secure Flight is the solution to this problem, because it 
will allow the agency to focus more effectively on the few 
worrisome individuals that need additional scrutiny with fewer 
disruptions for travelers, who pose no threat. There is already 
a voluntary passenger screening system, Registered Traveler, 
that provides expedited screening for passengers, who volunteer 
to undergo a security threat assessment to confirm that they do 
not pose a threat to transportation or to national security. 
But, this program currently offers very limited benefits and it 
is not clear what the future of the registered traveler program 
is. At best, people get to move to the front of the security 
line. They are still subject, however, to the normal security 
checks. So, we need to explore this morning how either Secure 
Flight or Registered Traveler can help the agency better target 
passenger screening at the checkpoints. For the moment, that 
remains somewhat unclear.
    Finally, with the adoption of the 9/11 Act, TSA was given 
additional security requirements, including the better vetting 
of transportation employees and stricter mandates on air cargo 
screening. On air cargo specifically, the 9/11 Act requires 
that by February of next year, 50 percent of all air cargo 
being carried on passenger aircraft must be screened with 100 
percent screening requirement beginning in August of 2010. Yet, 
the 2009 budget request does not appear to include new funding 
to meet this mandate. So, that is another question we will 
raise this morning, how the requirements of the 9/11 Act can be 
met within this budget.
    We appreciate all of you being here this morning. We look 
forward to your testimony. I want to begin with Mr. Hawley and 
then we will just proceed right down the line. But, first, I 
want to recognize our distinguished ranking member, Mr. Rogers, 
for any comments he might want to make.

               Opening Statement of Ranking Member Rogers

    Mr. Rogers. Thank you, Mr. Chairman. Welcome to this 
distinguished panel. I am especially pleased today to receive 
additional testimony from Jim Bennett and Ms. Peggy Sterling. 
Their industry expertise will provide a valuable prospective as 
we evaluate and discuss our aviation security challenges here 
today.
    The significance of a trusted partnership between DHS and 
the aviation industry cannot be overstated. While we can never 
eliminate the threat, we can certainly work together in a 
productive manner to improve our security strategies. And I 
believe that is the only way to achieve our common goal of 
facilitating legitimate travel and trade, while also stopping 
those who wish to do us harm.
    Even today, front line TSA employees remain the most 
enduring visible reminder of the events of 9/11. And while 
challenges certainly remain, I do believe TSA should be 
recognized for its efforts thus far in securing commercial 
aviation through the hard work of its people and advances in 
technology. However, since TSA was formed, and I was chairman 
of the Transportation Appropriation Subcommittee, I have 
consistently and strenuously cautioned TSA on overly relying 
upon people and not leveraging technology to carry out its 
mission. So, I must say I am concerned when I see a budget 
request supporting a total TSA workforce of almost 58,000 
employees, the largest of any component within the Department 
of Homeland Security, alongside a decrease in EDS procurement 
to nearly half of last year's level.
    Administrator Hawley, the way I see it, your total for 
transportation security officers, which encompasses all aspects 
of checkpoint security, exceeds the 45,000 FTE cap we 
previously maintained. However you want to slice up the 
workforce, whatever job titles you create, whatever categories 
you devise, nothing changes the fact that TSA is now the 
largest component in DHS, not by a little, but by a lot, 
trumping the U.S. Coast Guard by over 9,000 employees. While I 
certainly know it takes people to make it all work, I just see 
a troubling trend of more people, less technology, and a false 
inflation of fees. That is the wrong direction.
    Now, I realize TSA is attempting to offset this reduction 
with an increase in mandatory fees. Well, let me just say 
again, we have been down that road before. There you go again. 
And until the authorizers weigh in and actually approve the 
proposed passenger surcharge, I say such a proposal resides 
only in fantasy land. So, I like to call it as I see it and 
what I see troubles me: a staff century budget, a declining 
investment in EDS procurement, and a funding proposal that is 
unlikely to see the light of day.
    Now, despite this fee proposal and the imbalance of 
resources, there are some encouraging developments and signs of 
progress to note. TSA is pursuing new innovative checkpoint 
screening programs, such as Black Diamond, airport employee and 
vehicle screening pilots, cast prosthesis and bottled liquid 
screening systems, and TSA is also deploying new technologies 
for passenger and baggage screening, such as whole body 
imagers, new reduced size EDS systems, millimeter wave portable 
technology, and advanced technology x-rays. Further, as I noted 
earlier this month, programs such as TWIC and Secure Flight, 
programs that were honestly going nowhere just a few years ago, 
are actually gaining traction and showing some initial results.
    So, I see some real signs of progress at TSA against the 
backdrop of looming issues and challenges, including the 9/11 
Act requirement for TSA to have a system in place to screen 100 
percent of cargo transported on passenger aircraft by 2010, no 
small chore by anyone's estimation. So, what I would like to 
hear today is how TSA is meeting these challenges and how the 
fiscal year 2009 budget can actually move TSA forward.
    Mr. Hawley, as we have discussed numerous times, I know the 
mission of TSA is challenging and I have always wondered about 
the sanity of someone leaving Pebble Beach, California to come 
here and do this kind of work. But, I know you and I know you 
are perfectly sane. So, I am looking for other disabilities. 
But, no one wants to see you succeed more than this member and 
the other members of this Subcommittee. So, thank you for your 
testimony and we look forward to corresponding with you.
    Mr. Price. Thank you, Mr. Rogers. Mr. Hawley, please 
proceed.

    Statement of Mr. Kip Hawley, Assistant Secretary, Department of 
       Homeland Security, Transportation Security Administration

    Mr. Hawley. Thank you, very much, Mr. Chairman and ranking 
member Rogers, members of the Subcommittee. It is a pleasure to 
share the panel this morning with Cathy Berrick from GAO and my 
colleagues, airport executive Jim Bennett and Peggy Sterling 
from American Airlines. I would also like to recognize that we 
have TSA's Deputy Administrator with us this morning behind me, 
Gail Rossides, who is a career executive, who will be with TSA 
through the transition next year.

                        A DAY IN THE LIFE AT TSA

    As we discuss the President's fiscal year 2009 budget 
proposal here this morning, I would like to point out a few of 
the things that are going on right now as we speak. We have 
thousands of Federal Air Marshals around the world performing 
their missions based on the latest intelligence. We have 
Behavior Detection Officers and Travel Document Checkers 
providing additional layers of security at checkpoints all over 
the United States. Every day, we have our behavior detection 
folks and Travel Document Checkers zeroing in on people, who by 
their behavior or false documents, indicate that they are 
higher threats. Just yesterday, in Miami, Boston, Newark, and 
Long Beach, we have examples where our BDOs, we call them 
Behavior Detection Officers, and our Travel Document Checkers 
intercepted people, who were suspicious and/or had false 
documents, including one arrest.
    VIPR teams, our mobile strike teams, of Federal Air 
Marshals, Behavior Detection Officers, inspectors, and canine 
teams are operational this morning, starting at four a.m. in 
Detroit, in Miami, where they are joined by ICE and CBP agents 
in Louisville, Kentucky, New York, Denver, Los Angeles, and the 
metro Washington area working with Metro and the Ronald Reagan 
Washington National Airport Authority. These teams are 
supported by our law enforcement partners in all of those 
locations. Our mobile Employee Screening teams are out right 
now screening airport employees and performing vehicle checks 
across the country. Yesterday, an individual tried to get a 
SIDA badge with a false ID in Reno, Nevada and he was arrested. 
Sophisticated explosives detection training and tests of our 
Transportation Security Officers are in progress right now 
across the country.

                IMPROVEMENTS IN TRANSPORTATION SECURITY

    TSA is a very different agency than it was three years ago. 
All of these capabilities have been started or significantly 
enhanced by this subcommittee's support over the past three 
years. I appreciate that support and the partnership with this 
subcommittee. I think you teed up the issues very well, in 
terms of where we are on our technology investment versus our 
people investment and I look forward to discussing them with 
you.
    But, there is no doubt that the transportation system is 
safer today and better prepared for tomorrow, because of our 
work together. TSA's management team of career professionals in 
Headquarters and the field have performed magnificently during 
that time. Let me give you some metrics.
    In fiscal year 2005, we had, as Mr. Rogers mentioned, a 
45,000 TSA full-time equivalent number for screening. In 
contrast, in fiscal year 2008, we have approximately 39,000 FTE 
performing those same basic functions. Despite an eight percent 
growth in passenger traffic, wait times have remained 
reasonable and stable. Over the peak holiday period between 
Thanksgiving and New Year, 98 percent of travelers had wait 
times of less than 20 minutes. As the Chairman mentioned in his 
opening remarks, the reports on average wait times, we look at 
the average peak wait times and the average peak wait times are 
up in the 15-minute range. So, the average peak wait times at 
the airports are at 15 minutes and that is way below 30 
minutes.
    At the same time, we have added additional layers of 
security. We have added approximately 5,500 FTE now to perform 
travel document checking, employee screening, Bomb Appraisal 
Officers, and our behavior detection capability. And, as you 
have directed, TSA is providing better and smarter security for 
more travelers with the same 45,000 FTE provided in fiscal year 
2005. And the difference in numbers that Mr. Rogers mentioned 
has to do with the supervisors. We did not change the 
definition. The supervisors are what make the number in fiscal 
year 2009 look about 45,000.
    We could not add these security layers without attracting 
or retaining high performing TSOs and the credit for this 
improved security goes to them. Thousands have stepped up to 
take on new responsibilities and the challenges of these very 
difficult and demanding jobs. In 2008, we will see the first 
major upgrade in checkpoint technology in many years. New 
Advanced Technology x-ray will be deployed at hundreds of lanes 
starting this spring.
    We have begun innovations in the checkpoint process, as 
well. Passengers have already seen examples in Salt Lake City, 
Denver, and Burbank. We are looking to provide a better 
environment for us to do our security job and also improve the 
experience for the passengers.
    All of these initiatives work together as connected pieces 
in a multilayered total security system. In 2005, we had a 
handful of Behavior Detection Officers, no Travel Document 
Checkers, no AT x-ray, and no employee screening done by TSA in 
the back of the airport. By the end of 2008, the vast majority 
of passengers will be covered by behavior detection, 100 
percent of passengers will be covered by the Travel Document 
Checkers, and over half of the flying public by AT x-ray. And 
now, every airport conducts random screening every day of its 
employees.
    So, our threat environment remains high and TSA's challenge 
has never been greater. In executing TSA's mission, I am very 
grateful for the high level of personal engagement and 
thoughtful support of the Chairman, Ranking member, and members 
of this subcommittee. I can assure you and the American public 
that the men and women of TSA will honor your support again 
this coming year with tireless, intense commitment and focus on 
meeting the challenges ahead. Thank you, very much.
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    Mr. Price. Thank you, Mr. Hawley. Ms. Berrick, we will hear 
from you.

 Statement of Ms. Cathleen A. Berrick, Director for Homeland Security 
          and Justice Issues, Government Accountability Office

    Ms. Berrick. Thank you, Chairman Price, Mr. Rogers, and 
members of the subcommittee for inviting me today to discuss 
GAO's work assessing TSA's efforts in guiding investments in 
aviation security. My testimony focuses on TSA's efforts in the 
following three areas, which represents about $4.5 billion of 
the President's budget request for TSA: Screening operations, 
including transportation security officer allocations and 
checkpoint technologies, air cargo, and passenger watch list 
matching.
    Overall, we found that TSA has more systematically planned 
for and guided investments in these areas to strengthen 
security and has taken, or plans to take, action to address 
many of the issues GAO previously identified. However, we found 
that TSA can further strengthen its efforts to help ensure that 
these programs achieve their desired outcomes and that 
resources are appropriately targeted.
    For example, we concluded that TSA generally used sound 
methods to determine TSA allocations among airports through the 
use of their staffing allocation model. Although we found that 
the model did not always reflect actual operating conditions, 
such as the need for TSOs to take training, TSA has since 
addressed this issue and, as we recommended, developed a 
process to periodically reevaluate model assumptions to account 
for changing conditions. TSA also implemented or expanded 
several workforce initiatives involving TSOs to further 
strengthen security, including travel document checker, 
behavior detection officer, and bomb appraisal officer 
initiatives, among several others.
    With respect to checkpoint screening procedures, we 
reported that TSA can improve its process for evaluating the 
effectiveness and impact of significant procedural changes 
before implementing them nationwide. For example, we found that 
TSA did not always conduct the analysis necessary to determine 
whether key procedural changes would have their desired impact. 
We recommended and TSA agreed that the agency develop sound 
evaluation methods to test significant procedural changes 
before they are implemented.
    Regarding checkpoint technologies, we reported that DHS and 
TSA are pursuing a number of technologies to enhance the 
detection of explosives and other threats, but that the 
deployment of technologies on a wide scale basis has been 
limited due to performance, maintenance, privacy, and planning 
issues. As Mr. Hawley mentioned, TSA is making progress in this 
area, including procuring additional technologies to be fielded 
this year and pursuing the research and development of other 
projects. We are currently assessing TSA's checkpoint 
technology program and will report on our results within two 
months.
    We also found that TSA lacked a strategy for securing cargo 
transported into the United States from foreign locations and 
can strengthen their inspections of air carriers and freight 
forwarders, to ensure that they are adhering to security 
requirements related to air cargo. We also reported that DHS 
and TSA are pilot testing a number of technologies that can be 
used to screen cargo, but their efforts are in the early 
stages. TSA has taken action to address some of these and other 
issues, including initiating a pilot to begin addressing the 
legislative mandate to screen 100 percent of air cargo on 
passenger aircraft, but more work remains.
    TSA has significantly strengthened its development of 
Secure Flight, a government run program to match passenger 
information against terrorist watch lists. Improvements made 
include instilling more discipline and rigor into the systems 
development and strengthening privacy protections. However, we 
found that TSA did not develop cost and schedule estimates for 
the program in accordance with best practices; did not 
demonstrate that they were fully identifying, tracking, and 
reporting program risks; and did not fully address information 
security requirements and vulnerabilities.
    Taken together, these issues place the program at risk of 
experiencing cost overruns, missed deadlines, and performance 
shortfalls. We are making a number of recommendations to 
strengthen TSA's development of Secure Flight in our testimony 
today and will continue to evaluate the program as a part of 
ongoing work mandated by Congress.
    In closing, TSA has made considerable progress over the 
past year in systematically planning for and guiding 
investments to strengthen security, and is continually taking 
action to strengthen security in the areas I mentioned today. 
However, there are opportunities for TSA to further strengthen 
its efforts to help ensure that investments are appropriately 
targeted.
    This concludes my opening statement and I will be happy to 
respond to questions at the appropriate time.
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    Mr. Price. Thank you, very much. Mr. Bennett.

  Statement of Mr. James E. Bennett, President and CEO, Metropolitan 
                     Washington Airports Authority

    Mr. Bennett. Thank you, Mr. Chairman, Mr. Rogers, and 
members of the subcommittee. I appreciate the opportunity to 
offer the views of the airport community here today.
    Today's hearing is timely, given the situation thats exist 
at airports, as TSA struggles to make its current labor-
intensive passenger and baggage screening model work in the 
face of growing passenger levels. The strains are clearly 
showing.
    With an additional 300 million travelers expected to take 
to the skies in the near future, putting a band-aid on today's 
screening system simply cannot work in the long term. The 
problems today are not only an inconvenience for the traveling 
public, but they also represent a serious security threat. Long 
lines in airport terminals and at the screening checkpoint do 
not equal better aviation security.
    In the view of airport professionals, rapidly deploying 
enhanced technology for baggage and passenger screening and 
resisting the urge to expand the mission of the federal 
government into inherently local security responsibilities at 
airports are key in the ongoing efforts to enhance efficiency 
and accuracy in aviation security. In the checked baggage 
arena, the benefits of moving explosive detection equipment 
from crowded airport lobbies into the integrated in-line 
systems are evident.
    This subcommittee has long supported funding for in-line 
projects and airport professionals are grateful for your 
leadership. Unfortunately, we are literally billions of dollars 
in necessary investments away from having optimal systems in 
place at all airports where they make sense. The longer we 
wait, the more expensive these projects get. Cost estimates at 
Washington-Dulles airport alone run at nearly $237 million, 
some $115 million more than just a few years ago, thanks to 
increased construction material costs and other factors. We 
need more funding for in-line projects. Additionally, we need 
Congress to insist that a portion of those funds be distributed 
via the multi-year letter-of-intent mechanisms included as part 
of the 9/11 Act signed into law last year.
    Multi-year LOIs enable TSA to spur airports to leverage 
their resources to begin in-line projects with a promise of 
federal reimbursement. In-line systems in major airports, 
including Denver, Atlanta, and Seattle, were all built under 
LOIs signed in 2002 and 2003. At many larger facilities, like 
Washington-Dulles, the LOI approach is one of the few viable 
options that exist for moving forward for in-line systems. 
Yearly grants from TSA simply don't offer enough funding 
certainty. I urge you to insist that the TSA issue LOIs to 
airports, as required by the 9/11 Act. This issue is too 
important to allow OMB to thwart the will of Congress.
    Moving to passenger screening, there are two programs that 
merit particular attention and support. The first is the 
Registered Traveler program, which holds great promise in 
allowing TSA to more effectively focus scarce resources on 
those who pose the greatest threat to the aviation system. We 
appreciate the support TSA has offered in moving this program 
forward to this point. However, more can be done to improve the 
RT's program effectiveness as a security tool.
    In addition, the checkpoint of the future concept also 
merits support with one cautionary warning. Airports must be 
involved in the rollout of new technology as soon as possible 
in the process. As past experiences with initial deployment of 
checked baggage screening systems proved, a lack of 
consultation with airport operators will increase long-term 
costs and potentially hamper the efficient deployment of 
critical technology. TSA must be prepared to quickly pay for 
any terminal modifications that may be necessary to support 
this program.
    Finally, I want to emphasize the importance of keeping TSA 
focused on its primary mission of passenger and baggage 
screening. Unfortunately, some have suggested expanding the 
reach of TSA to include responsibilities that have been 
performed by airports, as local public entities, for more than 
30 years, including perimeter security, incident response, 
credentialing, and access control to secured areas. Expanding 
TSA's already daunting mission into inherently local security 
responsibilities will diminish security and divert scarce 
federal resources. Airport personnel involved in these 
functions are highly-trained public safety professionals with 
first responder responsibilities. The best approach moving 
forward from a security perspective is to maintain local 
control backed by federal standards, federal oversight, and 
federal resources.
    Before closing, I would like to briefly mention the issue 
of airport employee screening, given the interest of the 
subcommittee on that topic. Several years ago, I was part of a 
small group of airport professionals that traveled to the U.K. 
with DHS and TSA officials to look at the European model of 
screening employees. After a considerable study and debate, a 
decision was made by DHS and TSA to reject plans to implement a 
European-type system of physically screening U.S. airport 
workers, because of the unique nature of the U.S. aviation 
system and the astronomical cost of building the infrastructure 
necessary to meet that requirement.
    Airport professionals agree with the decision and believe 
that 100 percent physical screening of airport workers would 
result in the diversion of billions of dollars of scare 
resources with little, if any, security benefit. In our view, 
the best approach to addressing the insider threat, while 
improving the aviation security environment, is through the 
deployment of sustainable approaches, including enhanced 
background checks for workers, increased random physical 
inspections, and additional technology in the field. Airport 
professionals are committed to the continued improvement of 
security at their facilities. We pledge our continued support 
to TSA and this subcommittee in achieving our shared goals of a 
more secure and efficient aviation system.
    Thank you, Mr. Chairman. I look forward to answering any 
questions.
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    Mr. Price. Thank you. Ms. Sterling.

   Statement of Ms. Peggy E. Sterling, Vice President for Safety and 
                      Security, American Airlines

    Ms. Sterling. Good morning, Chairman Price, Ranking Member 
Rogers, and members of the Subcommittee. Thank you for the 
opportunity to testify on efforts to improve the accuracy and 
efficiency of aviation security. As the Vice President of 
Safety and Security for the nation's largest airline, let me 
assure you that we, at American Airlines, have the safety and 
security of our passengers as our top priority. We fly more 
than 250,000 passengers on over 4,000 daily flights. We could 
not meet this challenge as successfully without the leadership 
of Assistant Secretary Kip Hawley. While we may not always 
agree on the best way to tackle a particular challenge or 
should pay for a given government mandate, his unwavering 
dedication should be applauded.
    My testimony today focuses on where we believe the accuracy 
and efficiency of the air security system can be improved. I do 
not speak for the entire industry, but rather offer one 
carrier's perspective. Overall, when the industry has been 
allowed to provide input into pending security changes and has 
been afforded an adequate and reasonable implementation period, 
TSA has achieved better results.
    Let me begin with the topic of watch list and Secure 
Flight. Almost seven years after the attacks on 9/11, compiling 
a comprehensive accurate and manageable watch list, as well as 
an automated real-time passenger vetting system, has continued 
to challenge DHS. Under significant congressional pressure, DHS 
has recently taken a more systematic and coordinated approach 
to the creation and management of a single terrorist watch list 
and a name check system across the department. In particular, 
we applaud DHS for combining CBP's APIS Quick Query system with 
TSA's Secure Flight initiative to the maximum extent possible. 
While we support both initiatives, the cost to the airlines in 
reprogramming our reservation systems is significant. 
Reprogramming to conform CBP's requirements will require 
increased staff and cost American Airlines over $1.7 million. 
As DHS moves to implement Secure Flight, we urge that it 
consider the magnitude of programming involved and not publish 
an unrealistic implementing deadline.
    Our customers' perception of TSA are formed by their 
experience at the checkpoint. How TSA performs is dependent 
upon its staffing levels at a particular airport and on the 
deployment and adequate maintenance of technology. We fully 
realize that TSA does not have endless resources. TSA has made 
progress in developing a staffing allocation model. It is 
important for TSA to prioritize efforts at those airports where 
staffing is inadequate to meet passenger demand. In contrast to 
other hubs, Miami has consistently experienced customer wait 
times, missed flights, and passenger dissatisfaction. We have 
been in discussions with TSA on ways to best meet the hiring 
challenges it faces in Miami.
    More broadly, deploying new technology will continue to 
increase TSA's efficiencies. At those airports that now have 
in-line EDS, we have experienced substantial gains in baggage 
throughput and a reduction in staffing demands on TSA. This 
Subcommittee has been a long advocate for the rapid 
installation of in-line EDS through multi-year LOIs. On behalf 
of American Airlines, we thank you. Miami has applied for a 
multi-year LOI to fund an in-line system. We strongly support 
this application.
    In light of the overall staffing challenges TSA continues 
to face, we, also, believe that 100 percent physical screening 
of airport employees is both unrealistic and counterproductive. 
Simply put, funneling employees through passenger checkpoint 
lines only serve to put more hay in the proverbial haystack. 
Instead, TSA should develop and fund a mandatory federal 
airport ID badge. The current piecemeal approach to security 
badges is simply not acceptable. Under a uniform system, TSA 
could develop credentialing, background check standards, and a 
continuous monitoring process that would, for example, allow 
free movement of flight crews from airport to airport.
    Turning to air cargo, in order to ensure that 100 percent 
screening regime actually adds to the level of security 
intended, with minimal disruption and operational impact, we 
believe the following three key points need to be considered 
and addressed.
    Number one, TSA must continue to work in consultation with 
all stakeholders to develop effective and realistic operating 
procedures.
    Number two, TSA's proposed certified cargo screening 
program must be implemented in a fashion that spreads the 100 
percent screening requirement across the supply chain. Without 
this, 100 percent cargo screening will fall solely on the 
carriers, which will require and create major disruptions in 
service, impede the flow of cargo at acceptance, and 
significantly increase carrier's costs.
    Number three, TSA must continue to support and develop 
technology that is effective for cargo screening. Absent new 
technology, TSA must develop protocols that will allow the use 
of existing technology for more effective screening of bulk and 
palletized cargo.
    The last topic I would raise is one that is not currently 
under TSA's responsibility, but we believe should be. We 
support the long-standing congressional mandate regarding U.S. 
VISIT Exit. Congress has repeatedly expressed that this system 
be a governmental responsibility. However, DHS informed the 
airlines without prior consultation that we would be required 
to collect biometric information for U.S. VISIT Exit. This is 
contrary to the legislative history of this program, is highly 
inefficient, and is not the best security and privacy approach.
    In conclusion, I would simply highlight the fact that the 
airline industry continues to grapple with the devastating 
financial impact of $100 plus a barrel of oil. American lost 
$69 million last quarter. As you might imagine, we are 
extremely sensitive to anything that increases the hassle 
factor on our customers or imposes costly unfunded government 
mandates. Since we and our customers are the ones that pay the 
price for any inaccuracies and inefficiencies in the security 
system regime, we are extremely motivated to work with TSA to 
ensure that the system is as accurate, efficient, and effective 
as possible.
    Mr. Chairman, that concludes my statement and I would be 
happy to answer any questions that you or the members of the 
Subcommittee may have. Thank you.
    [The information follows:]

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    Mr. Price. Thanks, Ms. Sterling. Thanks to all of you for 
some very useful testimony. We will put your full statements in 
the hearing record. Now we will proceed with questions.

               AIRPORT PASSENGER WAIT TIMES FOR SCREENING

    I want to turn to the question of screeners and wait times, 
perhaps not surprisingly. I would say that is a subject right 
up there with campaign finance reform that every Member of 
Congress features himself or herself an expert in, simply 
because we encounter screening each week, as we come and go. My 
weekly encounter is not only with your airline, Ms. Sterling, 
or U.S. Airways, but also with the TSA screeners at Raleigh-
Durham and at Washington National. And I must say that based on 
that experience, and everybody has their own anecdotal 
experience, based on my experience, I have seen great 
improvements in recent years in terms of the efficiencies of 
those operations, and apparent employee morale. Mr. Hawley, I 
know you work on that very hard and this Member's experience 
tends to confirm that you are making some good progress. 
However, the progress on wait times is uneven. And Mr. Rogers 
consistently stresses the personnel levels that we are dealing 
with in this agency. But, it is also true that many airports 
are looking for more screeners and for more ability to cover 
peak times. Traffic levels have risen. More people are 
traveling than ever before. The levels are above the pre-9/11 
figures in many instances.
    Most airports do not have lengthy average security lines. I 
think the average is now around five percent. But some do still 
have long times and the travelers are often affected by this 
and are often unhappy about it.
    I want to include for the record, at this point, a table 
representing the longest average peak wait times in February of 
this year, ranging from Miami International at 23.6 minutes, 
through Las Vegas at almost 20 minutes, Atlanta Hartsfield at 
19.1 minutes and so forth. So, there are still some real 
problems here.
    [The information follows:]

Miami International Airport.............................   23.63 minutes
Las Vegas McCarran Airport..............................   19.76 minutes
Atlanta Hartsfield International Airport................   19.10 minutes
Charlotte/Douglas International Airport.................   18.85 minutes
San Juan Luis Munoz Marin International Airport.........   18.43 minutes
Newark International Airport............................   18.22 minutes
Seattle-Tacoma International Airport....................   17.75 minutes
John Wayne Airport......................................   17.39 minutes
San Diego International Airport.........................   17.16 minutes
Tampa International Airport.............................   17.02 minutes
Philadelphia International Airport......................   17.01 minutes

    I know, Mr. Bennett, that the D.C. airports have had 
problems with long screening lines and you have been very vocal 
about your need for additional screeners. You are no longer on 
the top 10 list, in terms of wait times. I do not know if you 
ever were. The longest wait times at National and at Dulles are 
in a more reasonable range now. You do have peak screening wait 
times of more than 10 minutes, though, at both facilities.
    In the past year, TSA has added additional screeners to 
check documents and to look for suspicious behavior, in 
addition to the way they were previously deployed. Do you see 
any effect on wait times of these additional security 
resources? I would appreciate your assessment in general of the 
wisdom and effectiveness of those additions, but, in 
particular, I am also asking you about any discerned impact on 
wait times.
    Mr. Bennett. Mr. Chairman, thank you for that question. We 
have not observed any addition to or degradation of service 
associated with the document checkers. I actually think that is 
a good program and it appears to be working very well. But, we 
do, as you noted, still experience some delay issues with 
screening lines, not at Reagan National, but at Dulles. It is a 
very complicated environment and it does not happen every day. 
But, for instance, in the month of January this year, we had 58 
percent of the days where Dulles exceeded the average daily 
wait times that TSA posts. And the peak afternoon wait time at 
Dulles, the longest wait time, 52 minutes was our longest peak 
wait time during the month of January. February is a little 
better, as they continue to try to address that challenge. Only 
35 percent of our days in February have we exceeded the peak 
wait times, and the peak wait time that we have had so far at 
Dulles in February has only been 35 minutes, which is an 
improvement. But, as we move into the peak travel season, 
January, February, some of our lower travel months, as we move 
into the peak season, actually starting next month as spring 
break commences, and then we move into the summer travel times, 
we are somewhat concerned that those wait times will continue 
to grow.
    Mr. Price. Well, where do you look for solutions? Is it 
simply a matter of more personnel?
    Mr. Bennett. There are two complicating--there are two 
issues at Dulles. One is the physical environment at Dulles. As 
the chairman, I am sure, is aware, we are in a massive 
reconstruction of Dulles and one of the features of that 
construction will be two very large new security mezzanines 
that will give TSA an opportunity to install their check point 
of the future. We have been working very closely with them to 
get sign off on the design of those checkpoints of the future 
and those will preview at Dulles in 2009.
    But, the other is staffing issues and trying to make sure 
that all of the lanes that we do have available are open in 
anticipation of the peaks. Once you get behind, if you cannot 
get the lanes open in time, once you get behind, you never 
recover and that is unfortunately what happens from time to 
time.
    Mr. Price. Ms. Sterling, I know your airline serves Miami--
--
    Ms. Sterling. Yes.
    Mr. Price [continuing]. With a number of flights each day 
and you singled out Miami for what you refer to as the longer 
customer wait lines, the missed flights, and the passenger 
dissatisfaction. You note that the wait times are the worst 
nationwide, well above the five-minute average. I wonder if you 
could just take Miami as an example or if you want to choose 
another example, that is fine. But, what, from your viewpoint, 
needs to be done to improve the situation? Again, is it 
personnel? Is it other factors that you believe need to be 
addressed?
    Ms. Sterling. Let me just say that I work very closely with 
the TSA. I would like to recognize the fact that through their 
manning allocation model and through some of the new 
initiatives that they are putting in place, I think that there 
is progress being made. They are looking at full-time employees 
with split shifts. They are looking at additional part-time 
hiring. And as they proceed down that road, I think it is going 
to help the airline industry to be able to cover the peak hour 
demand at the checkpoints. Additionally, I think there are some 
efficiencies to be gained, in terms of how the checkpoints are 
actually managed and the process itself. I know that the TSA 
optimization team has spent many hours in Miami with our team 
sorting through how we could collectively improve that process.
    So, I think that with all of the efforts that are joining 
together in a place like Miami, where we have facility 
challenges, we have limited throughput capability, but we, 
also, work together to make sure that we are addressing the 
staffing issues that we have there. Hiring in the Miami area is 
a challenge for a lot of corporations. I think that being 
focused on gaining part-timers, will result in a change in the 
wait time in Miami. Initially they were at two percent. They 
are now at 20 percent and they are moving towards 30 percent 
part-time employees.
    So, from my recommendation, and I was just in Miami two or 
three weeks ago working with the TSA on improvements and 
redesign of what they have there, we are working with the 
optimization team to make that happen. Part-time employees are 
an essential piece of peak hour coverage and staffing.
    Mr. Price. Mr. Hawley, the Miami case does raise the 
question of the way wait times figure in your determination of 
where to assign screeners, because, as you know, Miami actually 
has had a significant reduction in screeners in the last couple 
of years. According to our figures, Miami had 1,698 screeners 
in 2005, has only 1,167 now. Any obvious explanation to that, 
particularly as it relates to what we have been discussing?
    Mr. Hawley. Sure. First off, security is our top priority 
and our job is to stop attacks that would be in progress, 
disrupt those that might be being planned, and that is the 
focus that we have our security officers on. I think it is 
important when we are looking at the wait time discussion to 
understand what the mission is here and that is our mission. 
And I have said to our TSOs, it is our job at the senior 
management level to get the right staffing and get the process 
right. It is your job just to focus on your security 
assignment. And so, it is very important that we keep that 
message clear.
    The second is, in terms of expectations, we are talking 
here about average peak wait times, peak wait times in the 20-
minute range. And if you could turn the clock back a couple of 
years and think that we would be sitting here in a hearing room 
discussing how hard--you know, what a bad situation it is to 
have a peak wait time in 20 minutes, I would say that is very 
good performance. And then you have to ask yourself, what would 
it take and what would it cost if you wanted to move those 
peaks down significantly below that. So, I would argue that, 
and I think the point that you made, Mr. Chairman, is dead on, 
that as a system, we have the process management down pretty 
well and that, in fact, and Jim Bennett is exactly correct, if 
we get behind in an individual circumstance, we will get those 
peaks. So, that is what we have to work on, is staying on top 
of the unexpected thing where we are caught without the 
checkpoint open early. So, I think that is a valid criticism. 
But, the overall level of wait times in the U.S. are, I would 
say, exemplary.
    Mr. Price. Yes. Let me clarify, if I did not before. The 
figures I was citing for Miami and these other airports is the 
longest average peak wait time. Nonetheless, it is, of course, 
not as good as it should be and it does raise the question 
about the relationship of this data to your allocation 
decisions.
    Mr. Hawley. Well, we have gone to, as Peggy Sterling 
mentioned, we have changed our workforce from only 10 percent 
part-time to about a quarter or above part-time and split 
shift, which allows us to have the folks there for the peaks 
and not have to pay for billing the church for Easter Sunday. 
So, those are a particular mechanism that we have done. And I 
would also like to add in that the additional security of the 
Behavior Detection Officer and the Travel Document Checker, 
those are additional levels of security, very significant 
additional security measures that are in place today that were 
not in place three years ago and we have done that without 
interrupting the wait times. So, I think that is something from 
the management side of which we are very proud.
    Mr. Price. Well, you make an important point about the 
additional deployment of part-time people. The figures I cited 
for Miami are FTE figures.
    Mr. Hawley. Yes.
    Mr. Price. If you could furnish for the record, it would be 
significant to know how many bodies we are talking about here 
and how many are full and part-time. The FTE figures could mask 
some significant changes.
    Mr. Hawley. Yes. And I think on Miami, that is when you 
look at what issues are in Miami. And I agree, that is one of 
the airports that is most difficult, because of a lot of 
reasons that Peggy Sterling mentioned, and we do lag the 
national average in terms of our part-time and split shift in 
Miami. And it is due to the workforce environment there and 
that is one of the solutions to the problem. Also, we are 
working very closely with the airport to streamline the process 
and to do some of the innovation I mentioned in these other 
airports, bring that to Miami and see if we can improve things 
that way.
    Mr. Price. Let me elaborate the request and ask that you 
could take these top dozen airports with the longest average 
peak wait time and give us that kind of deployment figure in 
terms of the trend in full-time and part-time employees and not 
just the FTE total from 2005 to 2008. I think that would be 
illuminating now.
    Mr. Hawley. Yes. I think that is a great question and we 
will do it.
    [The information follows:]

----------------------------------------------------------------------------------------------------------------
                                                                            FTE              2008 Headcount
                              Airport                               --------------------------------------------
                                                                       2005     2008      FT       PT     Total
----------------------------------------------------------------------------------------------------------------
Miami International Airport........................................     1698     1171      952      355     1307
Las Vegas McCarran Airport.........................................     1079     1019      941      132     1073
Atlanta Hartsfield International Airport...........................      161      890      711      281      992
Charlotte/Douglas International Airport............................      266      360      297       98      395
San Juan Luis Munoz Marin International Airport....................      415      428      349      137      486
Newark International Airport.......................................     1281     1113      888      347     1235
Seattle-Tacoma International Airport...............................     1000      787      636      242      878
John Wayne Airportt................................................      267      281      227       83      310
San Diego International Airport....................................      562      561      444      173      617
Tampa International Airport........................................      585      539      462      122      584
Philadelphia International Airport.................................      777      889      719      276      995
                                                                    --------------------------------------------
    Total..........................................................     8991     8038     6626     2246     8872
----------------------------------------------------------------------------------------------------------------
From FY 2005 to FY 2008, the number of TSA FTEs declined frm 45,000 to 43,000. Since small airports must operate
  with a fixed number of FTE comprising the minimum number of TSOs necessary to operate a checkpoint and screen
  baggage, that decline was largely absorbed by increases in efficiency at the largest airports in the country.
  All of these airports, with the exception of Charlotte/Douglas have installed optimal baggage screening
  systems and realized those efficiencies.

    Mr. Price. Okay, thank you, sir. Mr. Rogers?
    Mr. Rogers. Mr. Hawley, you have done a remarkable job 
during your tenure at TSA. The chairman alluded to it and I do, 
too. It is been a remarkable management job of which you are an 
expert. But, I want to congratulate you on the good work that 
you have done and are doing and the way that you are handling 
it. Having said that----
    Mr. Hawley. First of all, thank you.

                  EFFICIENCY AT SCREENING CHECKPOINTS

    Mr. Rogers. I have a couple of questions, mainly about the 
workforce, because as I alluded in my opening statement, in my 
estimation, in my calculation, TSA has now exceeded the former 
45,000 FTE cap that no longer exists, but, nevertheless, it 
exists in my mind. It is a virtual cap. You exceed that by 438 
FTEs in fiscal year 2008, 643 in 2009. Now, I know, and you 
conversed with me about this, that you do not think you have 
exceeded that number, strictly using people on the front line. 
But, if you put back in the managers, which, in my mind, they 
are a part of TSA, and the other categories that you have not 
called something else, nothing can take away from the fact that 
your total FTE does exceed the cap. And I will give you time in 
a moment to respond to that.
    But let me tie it then with the reason I think that is 
important, the cap, a cap, and the purpose of the cap at the 
outset was to put some sort of pressure on TSA and DHS to bring 
on line and bring into place machinery, which is more capable, 
in many instances, of screening people than the human touch, 
not to mention the cost. So, that was the purpose of the cap in 
the first place, was to try to drive down the cost and buildup 
the effectiveness of what we were doing checking people through 
airports. And so, that gets me to the decrease in EDS 
procurement and installation that is in your budget proposal of 
decrease, a 48 percent from last year in the amount of money 
that you are requesting out of the appropriated funds, to go 
toward buying machinery for airports. So, we are digressing, 
receding from doing the right thing, in my judgment, in getting 
machinery into the airports, whether it be in-line or whatever.
    Now, I know you say, well, no, that is not exactly true, 
because you are not counting, you say, the $426 million that 
would go toward that purpose, that would come from the 
mandatory passenger security fees that you are proposing. 
However, as we all, I think, have indicated, the likelihood of 
that taking place is very, very low and I do not want to see us 
gambling on that taking place with something as important as 
getting machinery in airports to check baggage and check 
people, and your budget from appropriated funds falls way short 
of that. So, let me give you now time to respond to these 
questions.
    Mr. Hawley. Yes, thank you. And I will break them up into 
the passenger checkpoint screening and the checked baggage 
screening. And I do understand your point about, hey, I thought 
we were going to be buying a lot of technology and that would 
allow us to make it less dependent on large numbers of people.
    The issue with the passenger checkpoint is that the threat 
from the person, somebody carrying something with them, is 
going to be solved by technology when we have something that 
will screen the individual in a privacy friendly way and fast 
enough to be able to keep up with the throughput. And we are 
now just entering that period where we are going to be 
operationally deploying the millimeter wave portal that we have 
been testing. And, still, that is not going to be an efficiency 
accelerator. It still takes a long--well, a relatively long 
time, 20 seconds, say, to process a person going through that. 
So, the technology curve is still too far away to get the 
effective screening we need and accelerate to be able to reduce 
the number of people at checkpoints.
    We are investing in the AT x-ray. One of the features of 
the AT, in addition to being extraordinarily better than what 
we have today, is that it will allow TSOs to make a very quick 
resolution and, in fact, have fewer bag checks. When we get to 
the point of the computers being able to do it automatically, 
that would be the next step.
    On the baggage screening, I agree with you. That is the 
opportunity we have to deploy technology and reduce our 
headcount requirement.
    The difference we have on the funding is with--the reason 
that we went with a fee in this budget or the surcharge is that 
if you look--the problem, I think, we agree is money. We need 
to get a lot of money, as fast as we can get it, and apply it 
to this problem. And, in our judgment, pumping in $400 million 
in cash, above the $400 million available appropriated funds 
every year for the next four years was a shot of cash that 
would buy down that risk and, in fact, complete the baggage 
rollout that we put in our strategic plan. So, from our 
perspective, the budget that we sent forward, in addition to 
the $400 million of available funds with another $400 million 
of these fee funds in cash would allow the airports to move 
immediately to do the deployment.
    Then the issue of whether it is going to pass or not, I do 
understand that difference. But I think we agree that this is 
the opportunity to achieve headcount efficiencies through 
technology.
    Mr. Rogers. Well, I hear you and understand you and 
appreciate what you are saying, and I appreciate all along your 
determination to get more money into procurement of machinery 
in the airports, which everyone admits is woefully inadequate, 
dangerous even.

               FUNDING FOR IMPROVED SCREENING TECHNOLOGY

    I guess what we are saying up here is the likelihood of 
that surcharge is probably really low. My concern is: What if 
it does not happen? How will we make that up?
    Mr. Hawley. We are going to work as hard as we can to get 
that surcharge in place.
    We are very mindful of the provisions in the 9/11 Act that 
discuss multiyear LOIs, and that is certainly something in the 
business model which we will explore, as required.
    Our judgment is that we want to first get after the cash 
right away. That would be the best solution. If we have to go 
to other solutions, we will work that, too.
    Mr. Rogers. Well, as to the LOIs, I have been an advocate 
of those from day one, for years. After a while, OMB allowed us 
to allow us to have a few, I have forgot the number. 
Essentially, which is to allow airports to use monies that they 
expect to receive from the government for renovations for 
safety.
    To receive that money up front, allow them to construct the 
improvements and then pay back the bond, if you will, over a 
period of years. Then OMB clamped down and says no, no more, 
about a couple or three years ago.
    But it is the only way in my judgment to allow the huge 
expenditures needed in these airports to go online behind the 
wall, admittedly the most efficient, safest way to check bags. 
I do not know how you get the kinds of billions of dollars that 
we are talking about without some sort of bonding practice 
which this really is. I hope that OMB would see fit to allow 
that to happen.
    If your proposed passenger security fee does not 
materialize, which I think is the extreme likelihood, then we 
are left with nothing except the possibility of LOIs. Is that 
right?
    Mr. Hawley. That is correct.
    Mr. Rogers. That is the end of the line. If you cannot get 
the fee, and OMB says no more LOIs, what are you going to do 
about expanding and fixing airports?
    Mr. Hawley. Well, the legislation in the last year has put 
aside the 20-year targeting of the $250 million a year, so we 
do know that we have an assured base level of support for this 
going forward. And, that is, I think, a very good thing.
    Working with OMB, we have had a very good productive 
business relationship on this particular topic. And the fact 
that we are able, in our budget, to put $826 million cash on 
the table for EDS right now, I think is something you would not 
have expected out of OMB perhaps. But, that we are working with 
them to get the best business solution.
    We are mindful of what is moral, we are mindful of the 
subcommittee's position and direction; and we are pursuing what 
we consider to be the best way to solve the problem, which is: 
provide the most money as fast as we can.
    Mr. Rogers. Well, I know your priority is the fee, and we 
understand that. But I am sitting here saying you are bucking 
up the tree where the squirrel has already gone, and we are 
going to have to find another way.
    Mr. Rogers. Well, the 911 Act requires an allocation of no 
less than $200 million annually for letters of intent. And fund 
the cost shares of up to 90 percent, so it is in the law. I 
would hope that we could get it done.

    DEVELOPMENT OF OPTIONAL IN-LINE SCREENING TECHNOLOGY AT AIRPORTS

    Finally, and quickly, how many of the top 30 airports have 
optimal in-line systems in place now?
    Mr. Hawley. I would say 19 off the top of my head, but I 
will----
    Mr. Rogers. Nineteen.
    Mr. Hawley. Out of the top 30?
    Mr. Rogers. Yes.
    Mr. Hawley. Yes, out of the top 30.
    Mr. Rogers. And passenger levels?
    Mr. Hawley. Yes.
    Mr. Rogers. And beyond the top 30, how many airports that 
are appropriately suited for in-line systems are still waiting 
for federal investments in those projects?
    Mr. Hawley. We have that all in our strategic plan, so I do 
not have that off the top of my head. But I think we are well 
over 40 total in the in-line system.
    Mr. Rogers. That what--40 what?
    Mr. Hawley. Forty airports, 40 major airports with in-line.
    Mr. Rogers. That have in-line now?
    Mr. Hawley. I believe so.
    Mr. Rogers. Yes. Well, the bottom line is: most all the 
larger airports do not have in-line? I am not talking about the 
top 30, top 50. I am talking about the top 200?
    Mr. Hawley. Yes, right, that is correct.
    Mr. Rogers. That are appropriately suited for in-line?
    Mr. Hawley. Exactly.
    Mr. Rogers. So there is a backlog. How much money would it 
take, roughly, to fix those airports, let us say in the top 
200?
    Mr. Hawley. That is about a $1.7 billion, and that is what 
we have in the--I will get to the squirrel. But the $436 
million times 4 is about what we would figure would cover that 
top 200 airports with the optimal systems.
    Mr. Rogers. Well, thank you.
    Mr. Price. I thank you.
    Mr. Farr.
    Mr. Farr. Thank you, Mr. Chairman. Thank you, Mr. Hawley, 
for doing your job. I am very proud to represent you. Perhaps 
Ms. Sterling could help us out by just getting a direct flight 
from Washington to Monterey.
    Mr. Price. Yes.
    Mr. Farr. And we would not have to have the nine-hour-a-
week travel time.

     TSA'S ABILITY TO ADJUST STAFFING TO ACCOMMODATE WEATHER DELAYS

    I have several questions. But I would like to follow-up on 
the Chairman and Peggy Sterling's comment that TSA's opinion is 
formed by passengers at the checkpoint. And that checkpoint is 
not only outgoing, but it is incoming if you are coming in from 
an international travel.
    So my questions are related to that. One is this, and I 
have talked to you about this beforehand when we had been 
talking about wait times. Let me just tell you what the 
passengers formed their opinion on January 18th. It was a 
Friday. It had snowed the night before and it was at Dulles.
    The west coast flights leave early in the morning, all 
around 7:30. But I see that every week and I have never seen 
the kind of lines and backup.
    In talking with the United personnel, they indicated that 
because of the cancellations the night before, they had all 
their staff come in early and process passengers. Because 
before you even get to the TSA check line, you have already had 
to get your boarding pass, so there has been time spent on 
that.
    What really triggered my complaint to you was when I got 
through the line, because I was a frequent flyer, I can get 
through the faster line. But when I entered the plane with my 
boarding pass, I asked: How many passengers that are not, and I 
was there at just the 15-minute closing period, she said 80 
passengers have not yet checked in.
    And a TSA staff person responded right away, and I really 
appreciate that, but here is what he said, and remember you had 
a snowstorm the night before. Additionally, we had gone back 
and crunched the numbers, and you had a lot of sick calls in, 
and you had one of the gates were closed because of a leak.
    We had gone back and done the crunch numbers. The airlines 
predicated 6,200 passengers for this morning's bank. In fact we 
screened 7,039 passengers due to re-bookings, cancellations, et 
cetera. This is a 25 percent spike increase over the 
projections.
    Moreover, we noted a difference in the type of traveler. 
Both yesterday and today, due to a three-day weekend, off-peak 
fares, et cetera, many families are traveling with small 
children, strollers, carseats, and various carry-ons, winter 
coats, scarves, hats, gloves, boots, all of which have to be 
removed and screened.
    In addition, they have liquids, gels, baby bottles, et 
cetera. All this tends to slow down the through point. My point 
there is that you are blaming the passenger. And those 
passengers are not thinking about that their an over-burden. 
They want the government to be responsive.
    The one thing interesting about your Agency is that there 
are only like two things that people think about with the 
federal government: One is when they have got to pay their 
taxes; and the other is when they have to get on an airline.
    So their opinion of the government is softened by--and I 
think you do an excellent job, and have certainly gotten a lot 
better. What my questions go to: I would love to see the point 
where TSA works itself out of a job. What we have done is we 
have secured cockpits, we have gone into all of these other 
types of things, things that you cannot carry on.
    In the process, we have also created a two-tier system. If 
you fly private air, or you fly, as Congress members do, on 
CODEL, they do not check whether your liquids are in a bag, and 
you know they are not limited to size, and they do put the bags 
through a screen, but nobody complains about anything in there, 
or that you cannot take water through, whatever that is.
    So you have this one system that is sort of a private that 
is sort of the private system, the VIP system, and then you 
have the commercial system. The burden is in the commercial 
system, so that day what you pointed out, and your records 
show, that at 6:30, there was a 44-minute wait flight.
    At 7:30, there was a 40 minute. At 7:30, it had gone down 
to 32 minutes; by 8:00, it was 30 minutes. At 8:30, it was four 
minutes. Well, you had opened up other screening ins. I think 
the point I am trying to make is that everyone knew that this 
was going to be a horrible day.
    The intel on that should have said: Okay, we have got to be 
prepared. This is an exception and we have got to bring in 
extra personnel, and we have got to do it a lot faster. Because 
the airlines pay the price in this thing. These 80 passengers 
that did not check in, and whether they all got on the flight, 
I do not know. They were delayed because a lot it was also--
they had to de-ice. I missed my connection when I got to San 
Francisco.
    My question is, and sort of the broader train, but more 
specifically because I know you have been involved, and I 
appreciate that, in the Naval Post-Graduate Center for Homeland 
Security. What I recommend is that you continue that kind of 
training and maybe the whole DHS Department do it, that we also 
take a network approach.
    We asked about that last year that perhaps this in-line 
process would do it. John Porter and I are chairs of the 
Congressional Tourism Caucus. We are interested in the 
international business arrivals, and whether you will engage in 
being a part of the team in the model ports of entry, which 
would reduce a lot of--we have these model ports, but I 
understand TSA is not being involved in that.
    You ought to be a key player in that. And Customs and 
border patrol and other airport authorities are involved in it. 
That is my line of questioning. I know time is limited because 
we have been called for a vote.
    Mr. Price. We do have limited time. Mr. Hawley, if you 
could respond as efficiently as possible. We want to get in 
some questions here before we have to leave.
    Mr. Hawley. Yes, sir.
    Mr. Price. We will return after the votes. But I know that 
Ms. Granger, in particular, needs to get her question in.
    Mr. Hawley. The short answer on the Dulles story, the ball 
game is one that at 4:00 in the morning, and if we get the 
lanes open with enough folks early, we manage it. If we do not, 
it backs up and does not get done.
    It appears, without personally looking at it, that you just 
described a failure of having the right amount of people, the 
lanes open; and that does occasionally happen, but you are 
right, the staff worked very close with the airlines when there 
is a snowstorm or any of that stuff to know how many people are 
rolling over to the next day.
    So, system wide, we are supposed to be able to handle 
those. I do not know specifically what went wrong there.
    On the NPS, yes, we are continuing to engage within the 
network thinking that they do theirs, which is extremely 
valuable. As to the model ports, I thought we were involved, 
but I will look into it to make sure that we are, in fact, 
involved.
    Mr. Farr. The naval postgraduate school is a question of 
getting all the rest of DHS. You know the value of that. 
Perhaps you can talk to your colleagues in the other 
departments.
    Mr. Hawley. Yes, sir.
    Mr. Price. Thank you.
    Ms. Granger.
    Ms. Granger. Thank you so much. I appreciate it, Mr. 
Chairman and I appreciate all of you being here. I would like 
especially to say hello to Peggy Sterling. She is a constituent 
of mine. She has been overseeing Americans' excellent safety 
and security operations for many years. She does not look like 
it, but she has been in the aviation industry for 30 years. 
America is a huge corporate citizen in our district from Ft. 
Worth, so I appreciate that.

                          AIR CARGO SCREENING

    I am going to go from white lines with passengers to cargo. 
Secretary Hawley, I just have a couple of questions. It has to 
do with the Certified Cargo Screening Program. It should play a 
key role in cargo screening. I know that the 911 Commission 
created the 100 percent Cargo Screening Law, and I supported 
that.
    Currently, though, TSA's approved screening technology for 
the industry for screening large pieces of cargo is limited. I 
am concerned about the availability of that technology to the 
carriers for screening. So my question is: Since the program is 
voluntary, what are TSA's plans for supporting the passenger 
airlines as they screen those very large shipments without 
adversely impacting the supply chain?
    Mr. Hawley. We are doing the fast answer. The point you 
raise on the large screening equipment is a very good one. Our 
answer to it is: Do not screen everything at the airport when 
the pallets are all built up. Try to do the screening earlier 
in the process, and exactly as Peggy Sterling said, have other 
participants in the supply chain do the screening when the 
packages are smaller, and then secure the passageway to the 
airport.
    That is how we plan to do it, and we do plan to meet the 
deadline in about a year from now in February 2009 for 50 
percent.
    Ms. Granger. Okay, as a follow-up, and I understand your 
plan, but what if that does not happen and the airline gets 
these large shipments and they show up and they have not been 
screened? What is TSA, what is their help then at the airline 
dock?
    Mr. Hawley. I think we agree with the airline industry that 
trying to do the screening at the airport will not work for 50 
percent or 100 percent of packages. The only way to get there 
from here is to get further back into the supply chain. Having 
said that, they are working on the science and tech side to get 
the machines to be able to do the pallets as well. Our plan 
just does not depend on that technology being deployed in the 
next year.
    Ms. Granger. But you think you can meet the deadline?
    Mr. Hawley. Yes, ma'am.
    Ms. Granger. Thank you, Mr. Chairman.
    Mr. Price. Thank you, Ms. Granger. You are raising a very 
important set of questions. We will resume in this vein after 
the break.
    Mr. Carter, we will work you in here.

                      REGISTERED TRAVELER PROGRAM

    Mr. Carter. Thank you, Mr. Chairman. Real quickly, I have 
signed up for that registered travel thing and that has been 
the biggest waste of time I have ever been involved in.
    I have got my retina scan and my thumb done and all that 
stuff. It took three hours in Houston to do it, and I found out 
that it gets me past that first lady, who does not even work 
for TSA, at least in the airports that I fly out of. She is a 
contractor. But I assume, through all the other hassle, is 
there going to be anything that moves that faster than just 
getting past the first lady?
    Mr. Hawley. There is no full background check with 
Registered Traveler today. As we have seen in terrorist 
arrests, including six or eight plots disrupted this year, all 
having people who have clean records in them, you cannot rely 
on the absence of a criminal record, or being on the watch 
list, to let somebody onto a plane without checking very fully.
    So we have made it a private sector program. We said, on 
January 20, 2006: If you do a private background check, like 
you do in the securities industry, the financial services 
industry, if you do that, we will give you better security and 
we will make it faster for you security-wise.
    If you put approved technology in, we will let you keep 
your shoes, coats, laptops. None of that has happened. It is a 
cut to the front of the line program, and we are so focused on 
our security program. We are not devoting government resources 
to go figure out a way for the Registered Traveler Program to 
get off the ground.
    So the Registered Travelers need to step it up and invest, 
if they are going to get additional security benefits. 
Otherwise, it will participate with the whole rest of the 
checkpoint process to try to make everybody's trip fast.
    Mr. Price. Thank you. We have got other things we have got 
to do right now. We will recess and go to the floor and be back 
as soon as we can possibly make it. Thank you.
    [Whereupon, a short recess was taken.]
    [Hearing room sound turned off; inaudible portion.]
    Mr. Price. Mr. Hawley, how will you ensure that, once 
physical screening has been completed and the pallet has been 
sealed, it is not tampered with later on in the process. Is 
there anything in particular that you want to say about that?

   IMPLEMENTATION OF PROCESS TO MEET 100 PERCENT AIR CARGO SCREENING 
                                MANDATE

    Also, the air-cargo screening mandate calls for air cargo 
to receive ``a level of security commensurate with the level of 
security for the screening of passenger-checked baggage.''
    Is that a standard that you can meet? I am thinking 
particularly here of one of your proposals to screen air cargo 
with advanced checkpoint technology systems that do not 
specifically look for explosives. Is that a degradation of 
security compared to the checked baggage?
    So those two questions, if you will.
    Mr. Hawley. On the second question, we are working right 
now on the standards of what constitutes commensurate with 
checked-baggage screening under the law as to exactly what the 
requirements are for the machinery that can accomplish that.
    So, I would expect in the spring that we will have that 
released, and then that will show the glide path for the rest 
of the year of what we have to buy, and what others have to 
buy, to enable that screening to occur off the airport.
    And there was a question on: How do you secure the supply 
chain from where the screening occurs to the aircraft? That is 
the linchpin of the program.
    The guidance that we will put out on that, will indicate 
that the screening would have to be in certain controlled 
areas, and then on trucks with drivers who are vetted to seal, 
the tamper-evidence seal technology that would enable you to 
quickly tell if something had been tampered with after the 
screening, is all part of it.
    So, I think as you may have mentioned in the opening, that 
we are doing right now, in San Francisco, Philadelphia and 
Chicago, pilot programs to work out all of those details.
    Mr. Price. I would like to give the rest of you an 
opportunity to comment on this subject, not just the questions 
I have just raised, but also on the broader plan that Mr. 
Hawley has outlined and the way the 9/11 Act mandate is going 
to be met.
    Maybe we start with you Ms. Berrick.
    Ms. Berrick. Sure, thank you.
    I have just one comment on the Certified Screening Program 
that Mr. Hawley is talking about to push the screening down 
further in the supply chain, I wanted to mention that a similar 
program is already in place in the United Kingdom. In fact, it 
is working pretty well for them.
    And I think TSA has coordinated with the UK in learning 
from their experiences in working this out. Some of the work 
that we have done on air-cargo security, where GAO has looked 
at this, is that there are some practices in foreign countries 
that could potentially be applied in the United States, and 
this was one of them.
    Another point on air cargo that we found is that there has 
been a lot of focus on cargo transported domestically within 
the United States, but less of a focus on cargo coming into the 
United States from foreign countries.
    For example, we had recommended to TSA that they develop a 
strategy on how they were going to ensure security for cargo 
coming into the United States. Because even though they have 
measures in place to ensure the security of that cargo, it is 
not as stringent as for measures in place of domestic cargo, so 
we think more can be done in that area.
    Then, a third area related to air cargo has been talked 
about this morning as technology. We think that DHS S&T, 
primarily working with TSA, is still in the early stages of 
this. And there is lots of technology that they are pursuing 
that is in the pipeline right now.
    There is not a lot of time frames for when they expect to 
complete pilot testing and moving the technologies forward. So 
I think it would be good to see more planning in terms of those 
technologies, and time frames as to when they hope, S&T 
primarily, can move those through the chain.
    Mr. Price. Thank you, Ms. Berrick.
    Mr. Bennett.
    Mr. Bennett. Mr. Chairman, the concept of moving much of 
the screening downstream is very welcome in the airport 
community for air-cargo purposes.
    The air cargo at most of the major airports is really not 
designed to accommodate a very large screening system, or 
screening systems in the air-cargo facilities, and would 
probably face increasing challenges as we would try to 
accommodate those very similar to end-line baggage screening 
challenges at the airports as we develop facilities; and change 
the way that freight flows on the airport from the trucks when 
it arrives to the point that it gets on the airplane.
    So the concept of having that cargo, as it arrives at the 
airport, already screened and gone through those formalities is 
a very welcomed approach to that issue.
    Mr. Price. Ms. Sterling.
    Ms. Sterling. I agree with everything that has been said. I 
would just add that until the technology arrives, as I said in 
my testimony, TSA must develop clear- and concise screening 
protocols that will allow the use of existing technology to 
screen the large volumes of cargo.
    In addition, I think there is an opportunity between TSA 
and foreign country security programs to eliminate redundancies 
and requirements to re-screen cargo that has been screened or 
flown.

       ALTERNATIVE SCREENING FOR LARGE PALLET AIR CARGO SHIPMENTS

    Mr. Price. What would you say about these large pallet-
sized shipments? There is no TSA-approved screening technology 
currently available, for those. In your view, what alternative 
methods of screening might be most effectively implemented for 
palletized shipments?
    Ms. Sterling. Again, American has stated in the testimony 
that we advocate that the best way is through the supply chain, 
up-line. We know that there is a large amount of volume in 
cargo, and we know that the shipments are large. Clearly, 
moving it upstream to the supply chain is the way to go.
    Mr. Price. All right. Let me, just briefly, revisit the 
topic Mr. Carter brought up: the Registered Traveler Program.
    I think, Mr. Hawley, for better or for worse, you expressed 
your view of that program's progress thus far, indicating, as I 
understood you to say, that you did not think it had lived up 
to its security billing, in terms of making possible an 
abbreviation of the screening process. Also, saying, as far as 
TSA is concerned, that you are content to leave the development 
of this program with the private sector and with the airports.
    Mr. Bennett, it is your testimony that perhaps most 
directly addressed this. I wonder what you would have to say 
about the current state of registered travelers, as you see it; 
and what you think TSA's role should be in moving this program 
forward?
    Mr. Bennett. Mr. Chairman, Mr. Carter's comments were 
correct. The Registered Traveler Program is, as it exists 
today, really nothing more than getting you, hopefully, to the 
head of a line, and getting you through security a little 
earlier. So if you are experiencing the 45-minute peak-time 
waits that Mr. Farr referenced from a January day out at 
Dulles, if he had been a participant in the Registered 
Traveler, ideally, he would have been able to avoid that 
lengthy delay.
    But, from the airport perspective, we think that Registered 
Traveler, if done correctly, offers a tremendous benefit to 
improving the security environment, and actually taking the 
opportunity to reduce the size of the haystack.
    From an airport perspective, we would welcome being able to 
work with the Registered Travelers vendors, as well as the TSA, 
and establish what additional requirements might be necessary 
so that we could improve the benefits of the program and make 
it a more effective tool in improving the security environment 
for aviation.
    Mr. Price. Well, the development of these programs seems to 
be somewhat stalled. So beyond that general expression of a 
willingness to cooperate, what kind of steps would you hope to 
see in the near term?
    Mr. Bennett. We would be supportive of expanding the 
background investigations to expand it to have criminal-
history-record checks, and to bring commercial financial data 
bases.
    Many of us, as employers, today, when we hire employees, we 
do all of those investigations on employees before we put them 
on the payroll. It is very easily done; and it can be done, I 
think, with not too intrusively, and protect the privacy of 
those people who are applying to be participants in the 
Registered Traveler Program.
    If we are able to come to a way to stand that type of 
program in investigations up, and if it meet with TSA's 
approvals, then, hopefully, we would be able to have security 
lanes dedicated at our airports for the registered travelers.
    Mr. Price. With what kind of screening procedures, 
presumably abbreviated-screening procedures?
    Mr. Bennett. That would be up to TSA to be able to 
determine what their level of comfort would be for an 
abbreviated or modified-screening protocols.
    We are not of the opinion that the people should be allowed 
to not have screening. We think screening is very important. 
But we do think that if we have an in-depth knowledge of who 
these individuals are, that there could be a modified-screening 
protocol that would meet TSA's requirements.
    Mr. Price. It sounds, though, like you are placing more 
stock in the background check than you are in improved 
technology, for example, to permit shoes not to be removed or 
something of that sort.
    Mr. Bennett. Well, the technology would be a very important 
piece of that puzzle. But, right now, I am not sure that there 
is a technology available that is ready to roll out not the 
screening environment that would, for instance, allow the shoes 
not to be taken off.
    But I do think that there may be other benefits that could 
be just procedural benefits within TSA's protocols that would 
benefit the through put for registered traveler lines.
    Mr. Price. Mr. Hawley, is there anything that you would 
like to add?
    Mr. Hawley. I think that Mr. Bennett captured it very well. 
The crux of the matter is: once you make the policy decision 
that this is going to be a private-sector-led program, then it 
is the private sector who comes up with the risk capital, and 
puts up the effort to go figure out all the requirements of 
essentially a financial-services background check.
    I suggested that on January 20, 2006. And we also proposed 
that there would be dedicated lanes for the Registered 
Traveler, and the Registered Traveler community shot that down 
and said: No, we do not want to add that to the fee that would 
allow that to happen to be in there.
    So, essentially, we are waiting on those vendors to come 
forward with something that will allow us to change the 
security. It is a private-sector market. And, if there is not 
the market to do that, then it will stay where it is.
    But we have to keep our eye on the ball with security. As 
soon as we find a technology that we could deploy that will 
allow folks to keep their shoes on, we will be certainly 
discussing, with the Subcommittee, the opportunity we might use 
to buy that for all passengers.
    Mr. Price. As you know, the Committee in the 2008 bill, did 
address the issue of double identification. There may be other 
aspects that we will want to work on in the near term, but for 
now, I think we will leave it at that.
    And I will turn to Mr. Rogers for any questions he has on 
this concluding round.
    Mr. Rogers. Thank you, Mr. Chairman.

         CHALLENGES TO MEETING THE AIR CARGO SCREENING MANDATE

    Let me get back to air-cargo screening. The question is 
directed to anyone who would like to respond. About 23 billion 
pounds of cargo is shipped annually in the U.S., and about a 
quarter of it is shipped via passenger aircraft. That is an 
astounding amount of poundage. I suspect a big chunk of the 
revenue of an airline.
    What percent of your revenues do you think come from your 
cargo on passenger planes?
    Ms. Sterling. I do not have that statistic with me, but I 
can certainly furnish it to you.
    Mr. Rogers. Give me a guess.
    Ms. Sterling. I would imagine that it is probably about 5 
percent.
    Mr. Rogers. Yes. So this is a very important piece of----
    Ms. Sterling. Yes, it is.
    Mr. Rogers [continuing]. Whether or not you are going to 
operate?
    Ms. Sterling. Yes.
    Mr. Rogers. The 9/11 Act mandates that we screen 100 
percent of air cargo carried on passenger aircraft by August 
2010. I opposed that because it was impractical. We just could 
not get there at that time, but I found myself in the minority 
and it passed. It is the law now.
    Then, we have been told, Mr. Secretary, that development of 
full-screening technologies to meet that directive may be five 
to seven years away from now. Is that correct?
    Mr. Hawley. It could be, if it is done at the airport for 
the large-size pallets.
    Mr. Rogers. I am sorry?
    Mr. Hawley. For the large-size pallets, the technology does 
not exist today. It could well take five to seven years for 
that to be deployed.
    Mr. Rogers. In order for you to say you are screening 100 
percent?
    Mr. Hawley. At the airport, which is why our solution is to 
not do it at the airport because the technology does not exist 
for that.

                       CERTIFIED SHIPPER PROGRAM

    Mr. Rogers. So you are relying upon the Certified Shipper 
Program?
    Mr. Hawley. Yes, sir.
    Mr. Rogers. And you are saying that the certified Shipper 
Program meets the requirement of 100 percent screening, or it 
can be called screening?
    Mr. Hawley. It will meet the requirements of the law, and 
what we are developing now is exactly what the requirements are 
to meet the law.
    Mr. Rogers. Well, that is open for debate, whether or not 
the Certified Shipper Program can be called, as the law calls 
for screening of cargo for passenger aircraft.
    I want to believe, and I would like to believe that what 
you are saying is correct. I am sure it is. If you can give us 
chapter and verse of whether or not a Certified Shipper Program 
satisfies the requirement of the law we passed requiring 100 
percent screening of cargo on passenger aircraft, then I will 
feel better.
    But I remain unconvinced at this point, and I am not 
looking for it today. If you have some time one of these days, 
perhaps you could get us something on that.
    A Certified Shipper Program, though, depends on so many 
intangibles out there, going all the way back to the 
manufacturing of the product, and the integrity of the 
protection of that product all the through its many hands into 
the belly of the craft. It is a lot like when I used to be a 
prosecutor you had to establish the chain of evidence, having 
everyone who touched it along the way come and testify: I had 
it from January 1 to January 5th. It was in my hands all the 
time. It was never touched by anyone else, that type of a 
process.
    I do not know whether Certified Shipper meets those 
requirements even yet or not or whether or not a Certified 
Shipper Program satisfies the law requiring 100 percent 
screening. What do you think?
    Mr. Hawley. The proof of the pudding is when we produce the 
standards that dictate exactly this is how we do it, with what 
technology, and we have not provided that data for you, so you 
do not have the basis to judge. But, the burden is on us to 
demonstrate, and I said we would do it this spring, that we 
would say here are the technologies that could do it.
    Now, just some attributes of the industry that I think that 
make it easier to do is that 66 percent of all that tonnage you 
are talking about is concentrated in 18 airports and that 
drives the size down. And, then the other piece of it is that 
by having certified places to do the screening, it changes from 
10,000 known shippers that we have to have our inspectors go 
to, where we will have 400 inspectors and they will be able to 
concentrate on far fewer locations to do the inspections. And, 
we also have 170 canine teams for air cargo. So, we have quite 
a few resources lined up to do it, and the model, the air cargo 
model is very concentrated.
    We, today, at all of the small airports run 100 percent of 
the air cargo through exactly the same technologies we do for 
checked bags. So we have a head start, probably more so than 
most people think, but the whole ballgame is going to come down 
to exactly what those standards of what is the approved 
technology that can constitute screening under the 9/11 Act.
    [The information follows:]

    The air cargo screening provision, 49 U.S.C. Sec. 4490(g), added by 
section 1602 of the Implementing Recommendations of the 9/11 Commission 
Act of 2007, P.L. 110-53, 121 Stat. 266 (August 3, 2007), explicitly 
permits the Administrator of the Transportation Security Administration 
to fulfill the mandate of screening cargo carried aboard passenger 
aircraft using a certified cargo screening program under which the 
screening is performed by shippers. The provision states, in part: 
``Such additional cargo screening methods may include a program to 
certify the security methods used by shippers . . .'' Under 
Sec. 44901(g), cargo must be screened by either physical examination or 
non-intrusive methods to assess whether it poses a threat to 
transportation security; the methods of screening may include any of 
the methods explicitly named in the statute or another method approved 
by the Administrator. A method approved by the Administrator may 
include a program to certify the security methods used by shippers. 
Furthermore, the method of screening may not consist solely of 
performing a review of information about the contents of cargo or 
certifying the identify of a shipper of the cargo, but allows use of 
this method in conjunction with other methods. Overall, the level of 
security must be commensurate with that provided for checked passenger 
baggage.
    The certified cargo screening program (CCSP) that TSA is developing 
to meet the 100% screening requirement of the 9/11 Act will provide a 
level of security commensurate with the level of security for the 
screening of checked passenger baggage. Employees and authorized 
representatives with unescorted access to cargo in a certified cargo 
screening facility (CCSF) must each successfully undergo a Security 
Threat Assessment. The CCSF at an airport must also undergo an audit of 
the security measures of the facility by a TSA-approved auditor and 
must be approved by TSA. The CCSF at an airport must:
    --screen cargo intended for transport on a commercial passenger 
aircraft using only TSA-approved methods.
    --implement stringent physical access control measures to ensure 
that there is no unauthorized access to the cargo once screened.
    --adhere to strict chain of custody measures, including tamper 
evident technology, to ensure the security of the cargo throughout the 
supply chain prior to tendering it for transport on commercial 
passenger aircraft.
    The multilayered approach of the CCSP upon full implementation will 
meet all of the requirements of 49 U.S.C. 44901(g).

           RESPONSIBILITY TO FUND AIR CARGO SCREENING PROGRAM

    Mr. Rogers. Now are you anticipating the airlines would pay 
the equivalent of a passenger fee for this service?
    Mr. Hawley. No. What we are anticipating, the airlines will 
certainly be a participant as they are today in the screening, 
but we do not think it is the right answer to have them bear 
the entire burden for a variety of reasons, including the 
operational ones of it would not work piling everything up at 
the airport. And, I think the other point on my understanding 
of the air cargo industry is that it is a significant part of 
the profitability picture for airlines and, therefore, it is 
very important networkwide to have a profitable airline system 
and that a vibrant air cargo industry plays into that.
    Mr. Rogers. Well, I agree with that. I mean, it is self-
evident that they must have this, but the government is going 
to a huge expense to ensure the safety of that cargo that is 
passive and is the reason for the airlines' way to make profit. 
Should they not bear some more of the expense of what we are 
doing?
    Mr. Hawley. I think the supply chain should in fact bear--
it should be shared among the airlines and the other 
participants in the supply chain. And at the end of the day, it 
is the person who makes the product who is going to pay the 
bill in that if it is a computer manufacturer, they are going 
to pay what it costs to get their computer to their customer, 
and they will have the incentive to, therefore, set up 
screening at the manufacturing location and then it is far 
easier at that point to secure the chain of custody, as you 
described, than perhaps hitting it at other points in the 
supply chain.
    So, we think the market incentives will drive some of the 
manufacturers to do it at the point of manufacture. The large 
freight consolidators, I expect, will have a significant 
portion of this, and we are expecting them to participate in 
the cost of this ongoing that would not be subsidized entirely 
by the government.

                    CERTIFIED SHIPPER PROGRAM STATUS

    Mr. Rogers. Where are you today on this certified shipper 
program?
    Mr. Hawley. We have three efforts underway. San Francisco, 
we have been in San Francisco for about a month, and in 
Philadelphia and Chicago, I think we started this week. So, we 
will be adding additional pilots, I believe six more, in March 
and then further as we go.
    Mr. Rogers. And when do you anticipate putting out 
certified shipper standards?
    Mr. Hawley. This spring.
    Mr. Rogers. And will there be a notice of rulemaking with 
the opportunity to comment and so on?
    Mr. Hawley. We are working through those, what the legal 
vehicle is to get that done. Our hope is that we will get the 
standards out and then we will get some participants to step up 
and accept those and implement them right away. But, certainly 
it will follow up with a requirement of some sort.
    Mr. Rogers. Well, we will be watching that with interest as 
we go along here. You say spring, meaning what?
    Mr. Hawley. By June 20. [Laughter.]
    Mr. Rogers. June 20?
    Mr. Hawley. Yes, sir.
    Mr. Rogers. All right. Let me set my clock. [Laughter.]
    Mr. Hawley. It is the longest day of the year.

               AIRPORT EMPLOYEE SCREENING PROGRAM PILOTS

    Mr. Rogers. Lastly, Mr. Chairman, let me quickly ask about 
the airport employee screening pilot. Now where do we have a 
pilot or pilots going on security screening of airport 
employees?
    Mr. Hawley. We have announced that we will be doing seven 
pilot programs. Again, we do not have the exact date, but our 
expectation is that they are 90-day pilots that will be 
concluded by, I would say, the fall, such that we would have 
results to be able to report to Congress in this calendar year. 
And, three of the pilots will be full employee screening, 
physical screening of employees coming to work. Four will be of 
alternative methods of providing security. And then, we will 
have a third party evaluate the results and then report to 
Congress.
    Mr. Rogers. Well, according to a 2007 report, nearly 
700,000 airport employees across the country, including 
cleaners, maintenance workers, catering, and ramp workers and 
others, hold what is called secure identification display area 
badges, SIDA, which allow them access in the proximity of 
passenger aircraft on the ground. Often and I am sure perhaps 
all the time these are the lowest-paid workers at the airport. 
They are not routinely screened, unlike the flight crews that 
have to pass through a regular security screening.
    It just seems to me that despite the efforts of the 
airports, and we praise them for that, that it is still not up 
to where we would like to see it. Do you agree with that?
    Mr. Hawley. Yes. I believe more can be done, which is why 
we have our program. We have put up to our folks and then the 
Congress and this committee has supported dedicating up to, I 
think, it is 1,200 employees full-time in Fiscal Year 2008 and 
1,600 total in 2009, and that is to get at it regardless of 
what the pilots show, that we are already doing that today.
    Mr. Rogers. So, at the pilots, at least at three airports 
you are going to have 100 percent employee screening.
    Mr. Hawley. Correct.
    Mr. Rogers. And the other four will be random screening?
    Mr. Hawley. Yes, random, neighborhood watch, things like 
that.
    Mr. Rogers. And then three of the seven will include 
vehicular screening.
    Mr. Hawley. I believe they all will involve vehicular 
screening. The three would be the 100 percent. The others would 
be something else.
    Mr. Rogers. What kind of screening will that entail?
    Mr. Hawley. There would be a couple of options. One would 
be the visual inspection. Another one would be canines. And, we 
have portable explosive detectors that could be used in those 
as well.
    Mr. Rogers. You are talking about the vehicular?
    Mr. Hawley. Yes, sir.
    Mr. Rogers. And what about the employees?
    Mr. Hawley. Well, you could use the same technology on the 
passenger, but you would add a handheld magnetometer.
    Mr. Rogers. Yes. So we will get the report when?
    Mr. Hawley. By the end of the calendar year, 2008.
    Mr. Rogers. Yes. Well, in closing, let me congratulate you, 
Mr. Hawley, for a terrific job. It is a tough, tough job you 
have, one of the toughest in the government I think, and you 
have brought an expertise to that job that you have that was 
right for the job. We appreciate your service and dedication to 
the country.
    Mr. Hawley. Thank you.
    Mr. Rogers. And the same to all of you.
    Mr. Price. Ms. Lowey I know needs to leave, so I want to 
give her a chance.
    Mr. Rogers. She wanted to respond.
    Ms. Berrick. Yes. I am sorry. Excuse me, Mr. Chairman. I 
just wanted to mention the two questions you had related to air 
cargo and the certified shipper program and employee access 
screening. GAO has ongoing work looking at both of those areas 
and are going to be reporting out later this year, and we would 
be happy to come and talk to you about our results and brief 
you on those.
    Mr. Rogers. We would love to hear it.
    Mr. Price. Good. Thank you. Ms. Lowey.
    Ms. Lowey. I want to first thank the Chairman for holding 
this hearing and apologize, but as we all know, there are 
probably a dozen Appropriations hearings going on. Otherwise, I 
would have loved to be here. And I would like to follow up for 
a moment with Mr. Rogers's compliments, because Assistant 
Secretary Hawley is really a pleasure to work with, and your 
answers are always direct. You do not talk around the issue. 
And although we may have some slight disagreements, it is not 
without a great deal of respect that I ask you all these 
questions, so I thank you very much.

              100 PERCENT SCREENING FOR AIRPORT EMPLOYEES

    I want to follow up on Mr. Rogers's line of questioning for 
a moment because, Mr. Sterling and Mr. Bennett, both of you say 
in your testimony categorically that 100 percent screening of 
airport employees is not reasonable. Yet we know it works at 
some of the busiest airports in the world, Heathrow, Charles de 
Gaulle. Piloting these measures as I have been advocating and 
this committee recently required can only provided us with more 
knowledge of our aviation security measures.
    Frankly, I find it hard to believe, and when I read your 
statements, I find it hard that you said it is not reasonable 
because it has never been tried on a wide-scale level in the 
United States. And at the airports that perform some level of 
employee screening, Miami and Orlando, it appears effective. If 
it is not, I would love to hear about it. There are other 
problems with Miami. I was there not too long ago and waited 
about an hour and a half on a line, but that is another story. 
It had nothing to do with the workers.
    So Secretary Hawley, while we may disagree on the merits of 
100 percent employee screening, I am very pleased that TSA has 
moved quickly to comply with the intent of Congress, and I 
really do look forward to the results of these pilot programs.
    And by the way, I would just say after I ask another 
question, Ms. Sterling and Mr. Bennett, if you want to 
backtrack on that comment in your report and not say it is not 
reasonable, you certainly would have an opportunity to respond.
    I am puzzled as to why you, Secretary Hawley, and some of 
the witnesses who are here today have expressed reluctance to 
implement the 100 percent screening pilot program in the past. 
I would be very interested to know how many airports have 
expressed an interest in participating in the pilot program.
    Mr. Hawley. We have volunteers. The seven that we have are 
volunteers. I have to say they were motivated, I think, perhaps 
thinking that there would be federal funds to cover some of the 
costs of the pilots, which there are. They will have some 
expense of their own.
    Ms. Lowey. Any way you can motivate them is just fine, 
right?
    Mr. Hawley. Well, we need to get the data. And, I think to 
your point, and I appreciate your kind words and, I think we do 
in fact disagree on this topic, but I think this----
    Ms. Lowey. You are coming along, though. [Laughter.]
    Mr. Hawley. Well, on the pilots, I think it will go a long 
way to giving us data on which we can say here is what we found 
out, and we will certainly go where the data takes us.

              IDENTIFICATION BADGES FOR AIRPORT EMPLOYEES

    Ms. Lowey. Now, Ms. Sterling, your testimony advocates for 
more tamper-proof ID badges at our airports but still does not 
seem to get the fundamental issue of protecting aircraft from 
employees who wish to cause destruction. So, under the proposal 
you mentioned, what assurances are there that an employee 
properly vetted and badged is not carrying a gun or IED into 
the secure sterile area?
    Ms. Sterling. I think my focus in my testimony was more on 
the badging process. And in my testimony, I stated that the 
current piecemeal approach to security badge that exists 
because airports want to retain control over their existing 
local system is simply not acceptable. And what I mean by that, 
if you can imagine where you have crew members traveling the 
United States, they require access to the secure side, and 
having to have 15 or 20 different ID badges to be able to do 
that would be quite cumbersome for them to do so. So what we 
are advocating is that there be a system approach to ID badging 
and credentialing, which we believe makes a lot of sense.
    At no time in my testimony would I ever take away from 
added security measures that we have in place today, that TSA 
has in place today by randomly checking people who are on the 
AOA. I support that, and we agree with that 100 percent.
    Ms. Lowey. But where we disagree is you are talking random 
checking, and they do not randomly check members of Congress. 
It is 100 percent. So we just think it should be 100 percent, 
but I gather we disagree on that one.
    Secretary Hawley, in light of the various criminal 
incidents involving airport and airline workers last year, the 
COMAIR incident in Orlando, the Russell Defreitas arrest 
connected to JFK, the SIDA badge bust at O'Hare, is TSA taking 
any additional steps to better account for personnel within 
secure and sterile areas and limit workers to only the areas of 
an airport they are permitted to be in?
    Mr. Hawley. Yes. In addition to what we call ADASP, which 
is the random, unpredictable screening that we do every day at 
every airport and now have dedicated 1,200 folks to do, we have 
done additional work with our colleagues at ICE in establishing 
the reliability of the underlying documents establishing the 
identity of the person who then goes over to the airport 
badging office.
    So, in other words, Peggy Sterling has been talking about 
the badging process. That is a critical part. There is an 
additional critical part prior to that, which is to establish 
the validity of the person. Let us say they come to a cleaning 
company and apply to the cleaning company and say who they are. 
We need to check that those are the correct documents and that 
those are valid.
    So we have done over the last several months, three times 
in fact, a surge on SIDA badge instection, whether people are 
displaying them properly. We followed it up with 10 airports 
where we have gone in and gone back to the cleaning company 
level, and we have found some areas that need to be improved, 
and that is something that we are working with. Not only the 
airports, we are on the same side with airports. It is just 
they want to know too they are the right people, but, how do we 
ensure that we have the correct chain of custody, as Mr. Rogers 
was saying, of the individual's validity from the point of 
application to the company all the way through to the SIDA 
badge.
    Ms. Lowey. Thank you very much. And I know my time is up. I 
thank the Chairman, and I will submit the rest of the questions 
for the record.
    Mr. Price. Thank you. Before turning to Mr. Farr, I do want 
to briefly turn to Mr. Bennett, since your testimony has been 
referenced several times, to see if you want to briefly 
elaborate.

                FREQUENCY OF AIRPORT EMPLOYEE SCREENING

    Mr. Bennett. I would enjoy elaborating. Thank you for the 
opportunity. What the airport community proposes in lieu of 100 
percent screening we feel is actually more effective and 
improves the security environment more than 100 percent 
screening of employees. One hundred percent screening of 
airport employees does little towards understanding whether any 
of those individuals has an intent to do harm to the aviation 
system.
    And the program that we have proposed of more robust 
background investigations, the randomness of the program that 
is in place today of screening individuals, putting the 
biometric identification mediums on those individuals and 
limiting the number of those individuals that have that 
unrestricted access to certain areas of the airport, we believe 
that a combination of those measures is actually more effective 
than 100 percent screening because we need to remember that 
airports are very complex environments, and even though you may 
be screening 100 percent of those employees before they go to 
their work station, as a routine of their daily job, they are 
working with equipment and tools and chemicals and devices that 
are just as destructive as any gun or bomb may be. And 
screening those employees as they go to work does not keep them 
from having access to that equipment as part of their daily 
job. And our proposal is we are trying to establish whether any 
of those employees would have the intent to do harm with those 
devices.
    Mr. Price. All right. Thank you.
    Ms. Lowey. Mr. Chairman, I just want to thank you for 
pursuing that question, and I thank you for your thoughtful 
response, although I respectfully disagree, respecting your 
experience in this area, because not everybody who may do harm 
has the intent to do harm or the background which reflects any 
indication that they could do harm, and it seems to me that we 
should keep our minds open, and I look forward to the pilot 
program because we have seen these incidents in Orlando and 
elsewhere where there were those who did harm or could have 
done harm when they may not have had a biography, a resume that 
reflected the fact that they may do harm. So thank you very 
much.
    Mr. Price. Thank you. The discussion will continue. Mr. 
Farr.

             INTELLIGENCE ANALYSIS AND INFORMATION SHARING

    Mr. Farr. Thank you, Mr. Chairman. Just to follow up on 
that concept, in the IED area in Iraq I know and Afghanistan, 
we have spent billions of dollars trying to detect these 
things, and now we are spending some good money on trying to 
deal with the psychology of why do people want to do this in 
the first place, go to the individual intent. I think that is 
smart intelligence, and I know we have to do that.
    And what, Mr. Hawley, I want to ask you about is I know TSA 
has major challenges in building the intelligence capabilities 
that are necessary for our transportation system, and I know 
that those challenges are strengthening your own in-house 
capabilities personnel with analytic expertise, but it is also 
the ability to coordinate the data systems that are collected 
by all these government agencies and allow you to have those 
data systems interoperable.
    So I wonder what programs do you have underway to help 
build your intelligence analysts and also to make the 
information system interoperable? And in your opinion, what are 
the most important TSA intelligence areas that the next 
Administration needs to focus on, and where are we going?
    Mr. Hawley. I think those are really critical questions 
because the way to stop attacks is to get them before they are 
launched, and the Department of Homeland Security has a Chief 
Intelligence Officer, Charlie Allen, who at the Department 
level has created a university, if you will, for taking new 
people into the intelligence business and training them up as 
analysts and then having them be provided to the DHS entities, 
and I think that is an excellent long-term program and will 
have long-term benefits.
    We have the benefit of a very professional intelligence 
staff at TSA. Mr. Allen helped us recruit those individuals. 
And we are daily participants with the counterterrorism 
community that is called together by the National 
Counterterrorism Center. NCTC, every day, has a briefing, an 
interactive briefing. I personally participate every day, 
including today. And, that is, I think, the best way for us to 
keep both the intelligence that is going on and the tactical 
response and understand what the FBI is doing, what TSA is 
doing, other DHS components. We do that on a daily basis. I 
think that is the best thing.
    On the interoperability of systems, the Terrorist Screening 
Center holds the watch list, and that is I think the most 
important part of the information interoperability of getting 
those watch lists right both in terms of the right people and 
the protection of that data so that we are not inconveniencing 
individuals who are not meant to be on those watch lists. So, 
that is a focus of ours with the Terrorist Screening Center, 
and we are very close with them in terms of going through every 
individual file to make sure that there is not a mistake and 
that the most information we have on that individual is there 
and accurate so it sorts away from people who should not be 
involved.
    The longer-term issue is cyber, and I think it was very 
instructive. Secretary Chertoff in the end of 2007 looking 
ahead to 2008 listed it as one of his top four worries. I think 
as we go as a country, that is going to be a very central 
issue. Information protection and integrity is going to be a 
national priority. I think it will be right at the top going 
forward.
    And, I would add, you mentioned earlier the Naval 
Postgraduate School, and they have a Center of Excellence in 
this area, and we have participated with them, and they are, in 
fact, now talking to the Department about using the resources 
that they have and the learning that they have developed in 
this to quickly make that available to the DHS effort.

                    MODEL PORTS OF ENTRY AT AIRPORTS

    Mr. Farr. Thank you. I also had a question that this 
committee appropriated $40 million to expand the model ports of 
entry program to the top 20 international in-bound airports, 
and I wondered whether you could access some of that funding to 
improve the TSA screening process in those designated model 
ports of entry.
    Mr. Hawley. I do not know the answer to that, but I will 
follow up to make sure that we are engaged with the model ports 
of entry. And whether or not we have access to the dollars 
associated there, we will participate and be a good partner 
with that.
    [The information follows:]

    The $40 million appropriated for the Model Port of Entry program 
was provided to U.S. Customs and Border Protection. Nevertheless, with 
the Committee's support, TSA has an aggressive program in fiscal year 
(FY) 2008, and continued in FY 2009, to deploy new technologies, 
practices, and procedures to the security checkpoint that will enhance 
overall security while information all passengers and improving the 
traveler experience.

    Mr. Farr. The one thing that I ran against, Nita just 
talked about, Ms. Lowey, about Miami Airport. When I recently 
went through there, Dade County, which owns the airport, has 
employed 12 professional greeters because that airport has so 
many VIPs from diplomats, members of parliaments and so on from 
around the world coming through there as a port of entry, and I 
know they work closely with TSA. But it really does expedite.
    And one of the things we have heard on our side from 
visitors from other countries, our colleagues who are in Zuma 
and Russia was the one that really he came and he said he had 
been here 12 times, this was in this building, and he indicated 
he was never coming back because of the way he was treated at 
his port of entry. That was not Miami. I mean, we have never 
put into the values of this whole situation of what about those 
local assets, local ability to have people employed at the 
ground level to sort of do that kind of stuff. It is a value to 
that airport, but other airports of entry do not have those 
kinds of offices.
    I do not know what I am saying other than the local 
government seems to be able to do in some cases, put on that 
extra value, that other airports perhaps ought to be doing.

              WORKING WITH PARTNERS TO IMPROVE AIR TRAVEL

    The last question if I can get into it is USA Today 
reported yesterday on the findings of the six-month 
investigation into the effectiveness of TSA's security 
procedures. They reported that the hype and the hassles are not 
balanced by effective procedures at TSA. The report's findings 
along with continued flight delays, of outdated traffic control 
systems and record levels of lost passenger luggage have made 
us all keenly aware the domestic air travel system is getting 
worse, not better.
    And I wondered if you would agree that TSA should 
participate in a comprehensive plan to tackle this problem 
along with relevant public and private sector stakeholders such 
as at the table? I mean, none of these problems is all within 
one jurisdiction. It is sort of this question of 
interoperability that seems to be the appropriate word these 
days of getting everybody regardless of how they get there to 
the table to work on making these systems work systematically. 
I was shocked to hear that you have got to have all these 
different IDs depending on the airport you are in. It just does 
not make sense. So are you all working towards that?
    Mr. Hawley. Certainly at DHS, we are very definitely. I 
mentioned at the very beginning when I said we are doing VIP 
programs, we do those in conjunction with CBP and ICE. When we 
talk about the credentialing, those we also do with CBP and ICE 
in terms of assuring the accuracy. And, I think your point 
about the system nature of it, having all parties working 
together is exactly right on, and it is something that it is a 
shared responsibility, and the degree to which we work well 
together it does better.
    So, I am not familiar with the report you cite, but the 
issues are familiar. I know at DHS, a large part of what Paul 
Schneider, who is our Acting Deputy Secretary, does. And, 
yesterday is an example, we meet every week as component heads 
with the Deputy Secretary to go over operational integration 
opportunities. So, it is something that has the personal 
attention of every component head at DHS.

                        CHECKPOINT OF THE FUTURE

    Mr. Farr. Do you think we can ever get to the point where 
we eliminate the lines, that we do not have to have the 
individual screening because we will have all of the process in 
place so that you do not have to open every bag and take off 
your shoes? You mentioned that in your testimony. I wondered 
how long it would take us to get there.
    Mr. Hawley. Yes. And I think it is a future Administrator 
who will get to tell you how to do it. [Laughter.]
    Mr. Farr. But it is doable?
    Mr. Hawley. Sure. Conceptually. I do not have the 
equipment, and I am not sure it exists on Earth quite yet, but 
a millimeter wave has a way of--you can put them in sensors 
that will be more standoff--and I think when they are accurate 
as a standoff, then you can have more of a walkthrough-type 
screening process and more distributed identity verification. 
It clearly is possible. It just has not been put together, 
either the technology or operationally, but it is absolutely 
possible.
    Mr. Price. With that, we will bring the hearing to a close. 
I want to thank all of you for being here, for your patience 
with our delay and with the unique information each of you 
brought to the table. We are very grateful, and we will be in 
touch as we put our bill together. Thank you.

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                                         Wednesday, March 12, 2008.

                  INVESTING IN SCIENCE AND TECHNOLOGY

                               WITNESSES

RICH DAVIS, RTI INTERNATIONAL
MARC SAGEMAN, RTI INTERNATIONAL
SCOTT ATRAN, RTI INTERNATIONAL
CHRISTOPHER DARBY, CEO, IN-Q-TEL
JAY COHEN, UNDERSECRETARY FOR SCIENCE AND TECHNOLOGY

                  Opening Statement of Chairman Price

    Mr. Price. The Subcommittee will come to order and our 
hearing will begin. We offer our apologies for the confusing 
start to this hearing. I must say it is not totally 
unprecedented, but we are a little late in starting and we 
appreciate your patience. We hope we will not have too many 
distractions in the way of floor votes, but we are not certain.
    This morning, we are going to hear from two panels on 
identifying and investing in research and technologies that can 
be adapted to make our homeland more secure. Our first panel 
will consist of Mr. Rich David, Marc Sageman, and Scott Atran 
from RTI International and Mr. Christopher Darby, President and 
CEO from In-Q-Tel. The first three panelists from RTI will 
brief the Subcommittee on their research into the process of 
radicalization, as it relates to terrorism and political 
violence.
    I want to be very clear that our discussion here today is 
not referring to anyone who simply holds political views that 
might be labeled by someone as radical. That is not what we are 
talking about. In this context, radicalization refers to the 
process by which an individual becomes open to the prospect of 
committing violent political acts, terrorist acts. We need a 
much better understanding of the process of radicalization, if 
we want to keep homegrown terrorism from escalating in the 
United States. No one should forget that long before the 9/11 
attacks, a homegrown terrorist successfully carried out an 
attack on the federal building in Oklahoma City. This 
discussion will focus on specific cases on how this kind of 
research should be informing U.S. policy.
    Thereafter, Mr. Darby will discuss how In-Q-tel acts as an 
innovation forum to foster the development of the introduction 
of next generation technologies needed by the Federal 
Government, similar to what the innovation office in the 
Science and Technology Directorate is trying to do for DHS.
    Let me point out that the work of the witnesses before us 
this morning is not at this moment being funded by the Science 
and Technology Directorate. We believe it is the kind of work 
that DHS should be aware of and that is why we have asked them 
to testify today. S&T should be spreading a wide net and 
identifying both research topics and technology solutions that 
can help better secure our homeland.
    When the first panel concludes, we will hear from 
Undersecretary Jay Cohen from the Science and Technology 
Directorate about his plans for research and technology 
investments for the Department of Homeland Security in fiscal 
year 2009.
    In total, the President's budget requests $869 million for 
the Science and Technology Directorate, including $132 million 
for management and administration and $737 million for 
research, development, acquisition, and operations. This is a 
five percent increase over 2008. I am pleased to see that the 
budget carries forward many key initiatives that have been 
important in this Subcommittee over the past three years, 
including funding for the University Centers of Excellence 
program, the design and construction of key laboratories, and 
enhancements to cargo and conveyance security.
    I am also pleased to note that the budget doubles the 
amount of funding requested for detecting, deterring, and 
responding to improvised explosive devices or IEDs. IEDs have 
been a concern since the Oklahoma City bombing, well before 
September 11, 2001, and their threat has increased over time 
after each unfortunate incident in Europe and Asia and the 
Middle East. This is the kind of effort we really should have 
started years ago and I hope we will be able to expedite the 
development of countermeasure technologies that are truly 
effective.
    S&T's budget request is $1.7 million less in 2009 than it 
was in 2008 for research on emerging cyber security threats and 
ways to thwart them. A cut in this area seems counterintuitive 
given the increasing number of media reports indicating that 
China and other countries have targeted the U.S. Government and 
privately-owned cyber infrastructure. Given the large and 
growing dependence of our economy on the Internet, we cannot 
afford to see a U.S. version of what happened in April of 2007, 
when Estonia was essentially shut down after its computer 
infrastructure was overwhelmed by cyber attacks. Technology and 
research will play a critical role in seeing that we thwart 
this threat.
    Gentlemen, we look forward to hearing your testimony. 
Please summarize your oral statement in about five minutes. 
Your entire written statements will be placed in the record. We 
will begin with the first panel and then turn to Undersecretary 
Cohen. Before we begin, though, let me turn to the 
distinguished ranking member, Mr. Rogers, for his comments.

               Opening Statement of Ranking Member Rogers

    Mr. Rogers. I thank you, Mr. Chairman. Welcome to our 
witnesses. I have been advocating for many years that we simply 
need to do more to embrace the talent and depth of knowledge 
that exists in the commercial sector. So, I appreciate the 
participation from those of you from outside of the department 
and outside the government.
    We have testifying today a purely unique mix of industry 
experts from RTI International and In-Q-tel. I hope their 
testimony will be stimulating and challenging to our own 
preconceptions as to what techniques and approaches may be 
available to help minimize the threat against our critical 
infrastructure and key resources. After all, it should never be 
lost on anyone that our national security interests start here 
inside our own borders.
    Our adversaries are incessantly adapting and inhibited by 
radical ideology. Last week's Time Square bombing, though we 
are still unsure of its source and intent, even the London 
bombings 2\1/2\ years ago exemplify the simplicity of threats 
we face. They are also indicative of the complexities that 
confront our ability to prevent them. It is often repeated that 
``the terrorists need to be right just one time, but we must be 
right 100 percent of the time.'' So, it is imperative, 
absolutely imperative that we stay out in front.
    Today's panel exemplifies the out-of-the-box style of 
thinking that I believe is absolutely necessary to predict a 
terror and mitigate that attack on our homeland. RTI 
International has conducted over 10,000 R&D projects in its 50-
year history and is currently engaged in over 1,000 projects 
for government and private sector customers, much of which 
involves the abstract world of basic and applied research, 
where there may be no tangible or functional result, rather 
just more of an accurate--a key in understanding.
    In-Q-tel began in 1999 as a venture catalyst firm, as 
opposed to venture capitalist charted and funded by the U.S. 
Government. This organization was charged with the mission of 
canvassing industry for investment opportunities in 
technologies for solutions to specific security-related problem 
sets. It is my understand that due to their very unique ability 
to reach deep into industry, much of what In-Q-tel has provided 
the federal government has been instrumental to our national 
security. I believe these companies represent the realm of what 
is possible for the Department of Homeland Security or at the 
very least something to learn from, in terms of how to push the 
envelope towards our common goal of improved security.
    We would like to also welcome Secretary Cohen back to the 
committee. Mr. Secretary, as you would expect, we continue to 
demand the highest return from our investment in science and 
technology. Last year, you testified that 2008 would be a 
transition year and we agreed. Accordingly, in the 2008 
Appropriations Act, we did not fence funding, as we had done 
previously. We were supportive of the plan you put before us, 
so you were given a degree of flexibility to do one thing, 
produce demonstrable results. On paper, the directorate appears 
to have laid the critical foundation for its customer-driven 
output-oriented approach. On paper, it appears to have been a 
judicious reorganization. But, we are just halfway through this 
year and, in my opinion, it is still too early to proclaim 
success.
    In 2009, S&T will manage $737 million within its investment 
portfolio, including well over 100 individual R&D programs 
throughout its six divisions, transition to its customers, 
roughly 35 of those, and initiate another 30 or so new starts. 
This is a solid improvement from where we were just a few short 
years ago. But the proof is not in the numbers, but rather in 
the technical solutions you deliver to those on the front line. 
It appears S&T is on a positive course, but that does not mean 
we should relax in our zeal to do more. In light of the 
prepared testimony submitted by the first panel, we will be 
listening closely to hear how willing and able S&T is to 
embrace industry as an enabler for improving their security.
    Lastly, it needs to be said that we are nearing the end of 
an administration. This Committee needs to ensure that the 
structural integrity of S&T is not disrupted by a turnover in 
executive leadership during the transition. It has taken us 
some time to get to this point and we need to establish 
continuity. Prudent investments in basic and applied research 
opportunities and a predefined road map toward the development 
of enterprising technologies will continue to be the foundation 
under which S&T executes its piece of the department's mission 
to protect this great nation. Thank you, Mr. Chairman.
    Mr. Price. Thank you, Mr. Rogers. We will now proceed first 
with the RTI witnesses. I understand the plan is for Mr. Davis 
to give a 2- to 3-minute overview and then Mr. Sageman and Mr. 
Atran to contribute around five minutes each. I know that is 
constricting. On the other hand, it will let us get on to the 
discussion and, at the same time, we will, of course, be happy 
to have your full statements printed in the record. We will 
then turn to our In-Q-tel witness, Mr. Darby, for five or six 
minutes and we will then turn to the panel for questions.
    I, of course, want to say that I am proud to have the 
Research Triangle Institute headquartered in the research 
triangle area of North Carolina. It is an organization, though, 
as Mr. Rogers has said, with worldwide reach. That was most 
recently demonstrated to me when our House Democracy Assistance 
Commission was in Indonesia and there was an RTI team working 
very effectively with the Indonesian parliament to strengthen 
their capacity, as well as other agencies of the Indonesian 
Government.
    Today, though, we are seeing another aspect of RTI's reach 
and RTI's operation. We are happy to have you gentlemen here to 
enlighten us on this line of research, which I know you think 
is promising and which I believe we should hear about. So----
    Mr. Rogers. Mr. Chairman, would you briefly yield?
    Mr. Price. I would be happy to.
    Mr. Rogers. When the Research Triangle concept was first 
broached by the then North Carolina governor, I was working in 
a small radio station in western North Carolina and everyone 
thought that this was an idiotic idea. And I know you have been 
working ever since to disprove that theory.
    Mr. Price. I tell you, if we have not disproved this to 
you, Mr. Rogers, I do not know what kind of evidence it would 
take. People do forget that though, that there was a long 
period where this looked like a really risky venture. And IBM 
became the anchor tenant and the rest is history. But, it did 
prove to be a concept, whose idea had come. It has made a 
tremendous difference in our part of the South.
    Mr. Rogers. If you can learn to play basketball, we would 
be in business.
    Mr. Price. Yes. I do not think I need to comment on that. 
Mr. Davis, will you please start. Thank you.

               Statement of Rich Davis, RTI International

    Mr. Davis. Yes. Chairman Price, ranking member Rogers, 
other members, thank you for the opportunity for us to be here 
today and to testify. The opportunity to challenge the 
Subcommittee is exactly what we are here for. Government-
sponsored research, if I just go right into it, government-
sponsored research exists for one primary reason and that is 
that it gives us the information, in order to be able to 
understand how to intervene properly. And in terms of 
radicalization and terrorism, the challenge that the country 
faces is that we have a lack of capacity in the country today 
to really understand what radicalization is happening and how 
it is happening around the world.
    And the reason we have this deficit is twofold. First, our 
intelligence community does not have the apparatus to go into 
our local communities or into local communities around the 
world, like the Mezuak neighborhood of Tetuan within Hebron in 
the West Bank. These type of areas are not conducive to the 
type of work that the intelligence community does.
    Second, there is a deficit, as a result of the fact that 
the government-funded research today does not have as much of a 
component of field-based science work as it needs to have. So, 
the field-based work--and within the written testimony, you can 
see that I have actually defined what that means--but the 
science-based field research is actually necessary, in order to 
be able to understand the process of radicalization and 
ultimately to give us the information necessary on how to 
intervene. And the reason why RTI International and its sister 
organization, which it has established, helped establish to be 
able to do this field-based science work, called ARTES, 
research and risk modeling, the reason it has prepared this 
sort of capability to do this is because it believes it is in 
the national interest to be able to have the science-based 
field work coming to the forefront and helping increase the 
knowledge base that our science is able to produce.
    To give you a better understanding of what we mean by this 
science-based field work, we have Dr. Sageman and Dr. Atran, 
who are here to give you a little bit of insight as to what 
information we are finding from the field. But before I turn it 
over to them, I did want to address kind of the structural 
element to the way that I see government operating at this 
moment within the Department of Homeland Security and how it 
relates to overall the science and technology context of the 
U.S. Government.
    Under the leadership of Undersecretary Cohen, the Office of 
Science and Technology Policy is actually--they have a 
Committee on homeland and national security and this Committee 
has actually developed a Subcommittee on human factors whereby 
they are bringing the research and program directors of the 
human factors from across the departments and agencies 
underneath one umbrella at the Office of Science and Technology 
Policy out of the White House, to be able to look and study 
these issues further. We believe, after having briefed all 
across the departments and agencies, we believe that such a 
kind of coordinating function is actually important for the 
country.
    As Marc and Scott detail the case studies that they have, 
you are going to find these case studies come from northern 
Africa, they come from the Middle East, they come from Europe, 
and there is even some information on northern Virginia. I will 
turn it over to Mr. Sageman.

              Statement of Marc Sageman, RTI International

    Mr. Sageman. Thank you. Thank you, Mr. Chairman, Mr. 
Ranking Member. I want to just give you a broad outline of what 
is emerging from the field and I will let Scott give you 
specific cases. Basically, from the field what we is very 
different from what we see here in the United States, simply 
because I think that we are dealing with very different 
information. Most people here have secondary information of 
account, based their information on the Internet. We have a lot 
of bragging and pretending. We actually go to the field to 
actually gather that information. And what is happening in the 
field, the broad outline on this process of radicalization that 
everybody is interested in is that it is really young people 
and it is driven by a desire for adventure, dreams of glory, a 
sense of belonging, or a greater sense of significance and we 
basically see four factors driving this process. And they are 
not particular orders. They are not chronological. They are not 
in a linear fashion, in the sense you have 24 pathways, if you 
think about it.
    One is a sense of moral outrage and it could be a sense of 
moral outrage in seeing a large global violation, for instance, 
Muslims dying in Iraq. But, you also have a local component, 
for instance, police harassment. And the global and the local 
here seems to reenforce each other.
    But that is not enough. That has to be framed in a certain 
way and that is the second prong. The frame is a simple sound 
bite, a war on Islam. Because what we found is that right now, 
the terrorists around the world are not intellectual, not 
Islamic scholars. It is really paper thin and you have a fairly 
large portion, a quarter have absolutely no ideology.
    So, this notion, this frame is embedded in large ideas. And 
this is where the United States differ from Europe, because we 
have a notion that we are a melting pot and also this American 
dream and this undermines the notion that we are at war against 
our own communities. Of course, this does not play well abroad, 
but, here, it is almost protective within the United States. 
Europe does not have this protective element and so the threat 
is much worse over there.
    The third prong, the reason that this sound bite, this 
frame sticks to people is that it resonates with a personal 
experience. And here, we have a large local variation. And, 
again, if we look at the European versus the American context, 
we see very much that we are dealing with two very different 
population. In a sense, we have the elite of the Muslim world 
here, upper middle class with a fairly higher average income 
per family than the average American. In Europe, of course, it 
is quite the opposite, where you have the children of unskilled 
labor. And so, they are facing very, very different labor 
markets. They are facing discrimination and exclusion from the 
economy. And so what you have is very different numbers. If you 
look at the number of Muslims arrested for violent terrorist 
activities, it is about 2,400 in Europe since 9/11 up to last 
September and it is about 60 in the United States. You see it 
is a huge, huge disparity.
    But so far, you have a lot of angry young people. What 
transformed them into terrorists is that they mobilize by 
networks, by groups. So, first, a formation of those networks, 
networks of trust, are really on the basis of friendship, about 
70 percent, and kinship. And by the way, this is almost 
identical to what we found in Saudi Arabia, as well. So, the 
process seems to be the same. So, we have a spontaneous self-
organized networks of trust from the bottom up. It is really a 
consequence in the sense of regular group dynamics, where you 
have mutual escalation of grievances to the point that people 
do this for each other.
    And what I wanted to conclude with is that right now, our 
research in Europe shows that the threat has changed 
dramatically. In a sense, I have written about this in my 
formal book. And what I found then was that the terrorists were 
fairly well educated. They were married. They came from the 
upper middle class. But the people that we find now in Europe 
are the opposite. They are not well educated. They are much 
younger. They are about 20. We are facing a third wave, as I 
call it, and the third wave is really a natural evolution of 
the threat over time. What we are gearing up, I think, in terms 
of the government, in terms of ideas and so on, is really 
geared toward the first two waves. Those have almost gone. We 
are not dealing with the third wave. There, the strategy would 
be quite different.
    And with that, I will turn it over to Scott to illustrate 
what I just said. Thanks.

              Statement of Scott Atran, RTI International

    Mr. Atran. I am an academic also at John Jay College and 
University of Michigan and I try to get out of teaching by 
going to the field. And I have worked with Marc and others and 
I have interviewed people from Indonesian Islands, like Borneo 
and Sulawesi, all the way to suburbs of Paris and London and 
North Africa, working with Jihads, talking to the leaders of 
the Hamas and the foot soldiers and the families of suicide 
bombers. And what we find is that ideals and ideology are 
fairly superficial. It is not about the Koran. It is not about 
any theological understanding of anything at all. It is about 
young people trying to be heros, trying to find excitement for 
their lives, and trying to find meaning. And we find, like 
young people everywhere, the most dynamic aspect of what makes 
people become terrorists is whether their friends do it. And it 
is almost a random process, like traffic. You never know which 
car is going to be stuck in the traffic jam. You know there are 
sort of general conditions. And trying to figure out which 
particular people are going to be terrorists, I do not think is 
probably the right way to go. We have to understand the 
context, in terms of which these people become terrorists, the 
local conditions, and why they are moving down this path of 
violence, and most important what we can do to front end 
prevention, so that these people will take different paths in 
the future, because that is where things are important. Once we 
are into law enforcement and military measures, in a sense, it 
is already too late. You have already lost the battle for the 
future.
    So, let me just give you an example, a couple of examples 
of what is going on around the world, what we are finding in 
terms of this sort of third wave. The first one is a very 
interesting one, is that we find that five of the seven 
plotters, who helped plan the train bombings in Madrid in March 
11, 2004, the anniversary was yesterday, four years ago, came 
from a small area in a neighborhood called the Jemaa Mezuak in 
Tetuan, Morocco. It is a sort of tumble-down neighborhood, not 
particularly religious. If you walk down the neighborhood, you 
find it is not a particular morose place. It is a pretty happy 
place, actually. And these guys were immigrants to Madrid and 
they got involved in petty criminal activity and drugs. And one 
of the reasons that we are finding this new wave of Jihad 
linked to criminality is because, in effect, the policies of 
the United States stop funding of Jihad have been too 
successful. So, now, they are looking for money wherever they 
can find it and these things, like criminal networks, are there 
to provide money. And we find that the criminals, themselves, 
want to find meaning in life, especially petty criminals. They 
want something more than just to be criminals. And so, we find 
that five of the seven guys, who blew themselves up, did not 
even know about Jihad or the plot even six months before. And, 
yet, they are the guys, who died and blew themselves up.
    And when we went to the neighborhood, when we walked around 
the neighborhood, we found lo and behold just across the street 
were another five guys, who had gone to Iraq to blow themselves 
up. They had debated among themselves. They were confused by 
what happened in Madrid. Some of them were related by marriage, 
cousins and friendship, the other guys. All of these guys, the 
ones who went to Iraq to blow themselves up, the ones who blew 
themselves up in Madrid, they are all from the same elementary 
school, Abdelkarim Khattahi elementary school. All but one went 
to the same high school. They were friends. And the whole 
neighborhood believes what they do. The whole neighborhood 
believes that they, too, should go to Iraq. It is the most 
heroic thing in the world. It is what I hear from people in 
Sulawesi who have never been out of their villages. Imagine a 
young kid to fight the greatest army in the world in what they 
consider to be a noble cause.
    It is the same sort of thing in places like Hebron, for 
different reasons. It is not against the United States, but the 
dynamics of it are almost exactly the same. We went to 
interview the families of the suicide bombers of Dimona, 
February, our last month, and what we find is here is a soccer 
team with 12 guys on this one soccer team, the Masjad al-Jihad, 
in one neighborhood, the Wad Abu Katila in Hebron, who blew 
themselves up over a six-month period in 2003. These guys, also 
on the soccer team, were too young. They were arrested by the 
Israeli authorities. They were too young. They dreamt about 
their buddies. The mother of the guys, who just blew themselves 
up a month ago, told us, you know, my son, he loved those boys. 
He was a good boy. He loved those boys. He loved soccer and he 
loved those boys. And, in a sense, he was waiting to emulate 
his friends. The Hamas had a truce from December 2004, no 
suicide bombings, but that truce was broken down after the 
killing of Mahmoud Zahar's son and the breaking down of the 
wall. And so, these kids had a chance and it was easy to task. 
Almost anybody could come along and say, hey, we have something 
to do.
    If you look at something like the Harold Square bombing, to 
bomb Harold Square, or the paint ball bombing, the paint ball 
in Virginia that you had, you find the same sort of thing. You 
do not find particularly criminal minds or pathological minds 
or motivating individual causes, you find a group dynamic. And 
one of the things we are learning from the field is that 
notions of selves, of recruiters, of leadership really do not 
make much sense. It is more bureaucratic mirroring of what is 
going out in the world than what is going out in the world.
    One last comment, so we were in Saudi Arabia last week and 
the Saudis were very open about what they said to us. Well, you 
know, we find that 64.4 percent of the prisoners we have into 
Jihad are recruited through their friends and 24 percent are 
recruited through their family. You know, we are saying, is 90 
percent recruited through family and friends? No, it is not 
recruited through family and friends. You follow the path of 
your family and friends. And this is something, I think, that 
we are not really dealing with, with these sort of talked down 
measures that, again, are being applied too late.
    Mr. Price. Thank you. We will return to this extremely 
interesting and important topic in the question period. I now 
want to turn to Mr. Darby to invite him to give us an oral 
summation of his testimony.

             Statement of Christopher Darby, CEO, In-Q-Tel

    Mr. Darby. Chairman Price, ranking member Rogers, members 
of the subcommittee, my name is Christopher Darby and I am the 
President and CEO of In-Q-tel. First of all, I applaud your 
efforts today. I think that the United States' private industry 
is a source for innovative solutions and technologies that can 
be brought to bear on the challenges that face homeland 
security and the broader safety of our Nation.
    In-Q-tel was formed in 1999 largely as a response to a 
shift in innovation in corporate America. In the last 1980s and 
through the 1990s, corporate America began to cut their funding 
of core research and development projects. And led by people 
like John Chambers from Cisco, corporate America began to let a 
Darwinian process happen within the venture community. So, you 
had small companies being funded by venture capitalists in 
places like Silicon Valley, Boston, and, yes, RTI. I am proud 
to say I managed one of those companies in RTI. What corporate 
America did is they allowed these companies to grow and then 
when they saw the leader, they acquired it. And so, they 
changed their mode of acquiring innovation. As opposed to 
growing it at home, they went out and they bought these start-
ups and that was the way they jumped started their innovative 
technologies.
    The CIA and the larger intelligence community are the 
customers of In-Q-tel. In-Q-tel is an independent not-for-
profit company. CIA and the intelligence community recognized 
that they were not getting always the upstream technology. They 
were not seeing what was coming from the venture community 
early enough. And so, In-Q-tel was formed to allow them to tap 
into that market.
    When you think about In-Q-tel, we are a strategic investor. 
We invest for one reason only and that is to accelerate 
innovation within our community. And so, we look at speed and 
we look at cost as the two drivers for what we do. The way we 
do this, we start by understanding the customer requirements. 
And so, we have 60 percent of our organization with top secret 
security clearances and we spend a huge amount of time in the 
field, whether it is Beijing, Kabul, Baghdad, we spend time in 
the field with our customers, understanding the problems that 
they face today.
    We, then, provide a translation facility, because we then 
go to the venture capital communities and the people doing the 
investing, we say, look, we are looking for technologies in 
these areas, sensors, biochem nano types of technologies, 
software and analytics to parse the huge amounts of data that 
we are gathering around the world today. And then once we have 
understood their requirements and once we have made these 
connections with these emerging companies, whether they be in 
the Valley, New York, Texas, it really does not matter with us, 
we engage the company in what we call the work program. And so 
when we look at an investment, we are looking for largely non-
equity investments. And this is important. What we do is we 
allow that company to maintain their development path, but to 
tweak the development so that the product is applicable to our 
community, because our community has some very unique 
requirements. And this is good for the company, in other words, 
they get an injection of capital for their research and 
development. It is also good for our community, because when we 
do this, we leverage for every dollar that we spend, nine 
dollars of venture capital. So, simplistically speaking, you 
can think of this as costing one-tenth of what it would have, 
if you had just gone and tried to buy it off the shelf.
    We believe we add values to these companies and so we will 
take, for example, warrant coverage on that investment that we 
make and we think that is only good for the American taxpayer. 
So, that if one of these companies becomes a huge success, we 
can take the profit generated from that and turn it right back 
into investments for the community.
    The investment piece is only half of it, because once that 
work program starts, we have to be totally focused on 
transferring that technology into the government and that is no 
small task. The government apparatus is very well equipped for 
dealing with large project-based programs. There are a number 
of vendors that are well understood and relied upon. Dealing 
with small companies, who may not have a lawyer on staff, is 
something that we have to help with. We have to act as that 
bridge between that small company and the government customer.
    We spend a lot of time monitoring the success of the 
adoption and the pilot within the customer set, because that is 
how we are measured. Is the technology being piloted and is it 
being adopted? And to date, In-Q-tel has made approximately 110 
investments, of which 70 of those companies have deployed 
technologies within our customer set. That is an incredibly 
good hit rate, when you compare it to venture capital, where 
only one in 10 companies is successful. So, we are doing a lot 
better than that and let me give you and end with a couple of 
good examples.
    Some of you are familiar with Google Earth. Google Earth is 
an In-Q-tel product and company. So, when In-Q-tel found Google 
Earth, they were focused on the real estate market. And In-Q-
tel went in early, pre-revenue for Keyhole, and invested in 
Keyhole, allowed it to grow its technology base, and then 
ultimately that company was acquired by Google.
    Other examples, Polycromix is a hand-held spectrometer, so 
it is used to identify chemical components in sand. When we 
found Polycromix, it was actually being used to separate carpet 
types for recycling. They were using this handheld device and 
they would point it to the carpet, it would tell what the 
compounds of the carpet were and they could decide what bin to 
put it in for recycling purposes, which is a noble and worthy 
exercise in and of itself, but we felt that it could be re-
purposed. And so, you can create libraries associated with this 
and what used to take us two weeks, where someone would go 
gather a sample in the fields, send it back to the United 
States, the sample would be prepped and analyzed, and we would 
get a result two weeks later, we can now take this handheld 
spectrometer, point it at the sand, click the button, and it 
will tell you what is in the sand, based on the libraries that 
have been developed.
    And so, these are two examples of things that I think In-Q-
tel has done that have been very, very successful in the 
market. I can go on with other examples, but, ultimately, that 
is how we are measured is through what technologies are we 
deploying.

            IMPACT OF THIRD WAVE ON THREAT OF RADICALIZATION

    Mr. Price. Thank you, sir. Thanks to all of you. This is 
very interesting and very stimulating testimony. Unfortunately, 
we have votes on the House floor, which will break us up here 
in just a moment. But, let me began with our RTI team, to ask 
you to elaborate a bit on some of the things you said. Dr. 
Sageman, Dr. Atran, as I understand, you are both suggesting 
that we are now at a third wave of radicalization and that the 
critical variable often with these young radicals is a kind of 
group dynamic that pulls them in, because of what their friends 
are doing, not so much because of any inherent qualities that 
they have in terms of religion or ideology or psychological 
factors. Dr. Atran, you said at the very end of your statement 
that this understanding of this third wave raised serious 
issues about what you called our top-down approach with dealing 
with the threat of radicalization. I think we would all like to 
have you elaborate that, because, after all, the bottom line 
here is what do these findings imply, in terms of our policy 
and our counter-terrorism strategies.
    Mr. Atran. Well, I will let Marc handle most of this. The 
idea is that radicalization is a path people take to violence. 
And this path, itself, is determined by the environment, by the 
context, by group dynamics and that the only way we are going 
to ever understand what is going on is to embed ourselves in 
local context and communities and find out what alternate 
paths, what alternate dreams are for these young people, 
because dreams ultimately move people in life. They are 
movements. It even moves civilizations and cultures, 
ultimately, even more than material incentives, although those, 
too, are important. We have got to find alternate dreams for 
these people. I must mention that the FBI is also very much 
interested in this type of approach and more and more are 
trying to figure out how within the local communities and 
context, they can start moving people towards ultimate 
alternate paths than the path of violence.

                  EXAMPLE OF THIRD WAVE RADICALIZATION

    Mr. Sageman. Yes. Let me give you one example. Mohammed 
Atta went looking for Al Qaeda. Al Qaeda did not go looking for 
Mohammad Atta. If you want to stop this, you have to stop it 
from the Mohammad Attas looking for something. It is a bottom-
up process, in that sense. So the question is why do some 
people, young people, at a particular time, particular place, 
why they are attracted to these ideas and that really is the 
other way around.
    And to just give you an illustration, we defeated the 
Communist, but we did not defeat the Communist by making 
comments on Marx, saying that the Communist ideology is wrong. 
The movement degraded by itself for its own reason and not so 
much because of a top-down ideological approach.
    Mr. Price. I must say, though, when you talk about these 
remote villages that become the hotbed of this kind of 
radicalization, you think, how many such villages there are. Of 
course, most of them do not become radicalized but there 
appears to be an almost random quality of when something truly 
takes hold. The idea of how we anticipate that and reach it and 
affect it is daunting.
    Mr. Sageman. Mr. Chairman, let me just correct you. Again, 
you look at it from a top-down, so when does this viral anti-
Jihad take hold. It is not that way. It is young people 
searching for ideas that would inspire them. And it could be 
anything that could lead to violence.
    Mr. Price. Yes, but small groups of friends in many, many 
communities find all sorts of ways to bond together and to find 
a purpose. And when there is a particularly toxic turn that 
that takes, it seems to me that anticipating where and when 
that is, is a huge challenge. Why do not we recess for just a 
moment. I apologize. We will resume as quickly as we can get 
back.
    [Whereupon, a short recess was taken.]

     POLICY IMPLICATIONS OF PROVIDING ALTERNATIVES TO YOUNG PEOPLE

    Mr. Price. Mr. Sageman, Mr. Atran, if you could just wrap-
up what you were saying very rapidly when we adjourned, I would 
appreciate it. But, the question, I remind you, had to do with 
the policy implications under what have to be regarded as very 
difficult circumstances, to offer alternatives to these young 
people, who are taking this path. What are the implications, 
just in a nutshell for national policy? We want to continue 
this discussion, believe me, and we know that we can only touch 
the--skim the surface this morning.
    Mr. Sageman. Well, I think that we are dealing with a youth 
culture, al-jihad and so on, and that is probably where we need 
to address our policy recommendation, namely just as Scott 
said, at the front end of the pathway. By the time we get at 
the end, such as rehabilitation centers, social work, we are a 
little bit later and it is much easier to deviate people from 
traveling that path early on than later on.

                       UNDERSTANDING COMMUNITIES

    Mr. Atran. Let me just say that one thing we should do is, 
as I said, get involved in understanding the communities. That 
does not mean get involved in every community. That means 
getting a good enough scientific sample, so we know what is 
liable to happen in different communities. Knowing what 
happened in Mezuak, for example, and knowing, for example, 
there are 50 guys from Dimona, Libya, on their way to Iraq, 
leads us to believe probably the same processes are involved. 
We do not have to do it all over in Dimona. Knowing what 
happened to the guys, who wanted to do the Herold Square 
bombing, and knowing how the paint ball group gets involved in 
Virginia, we have a pretty idea about what kind of thing is 
going on. But, we need enough control studies, enough 
scientific studies where we know of the millions and millions 
of people, who support this idea, who are attracted to this, 
why only a very few make the move? And just looking at the 
guys, who did it, is not going to give you the answer, okay. 
You have to know why the other guys do not do it and no one is 
really doing that.
    Mr. Price. Well, I can imagine that there are serious 
implications here for intelligence policy, for foreign 
assistance policy, and certainly for our cooperative efforts 
with our friendly allies, with countries with whom we have a 
joint interest in preventing this sort of activity. Mr. Davis?

           APPLICATION OF FIELD-BASED WORK TO NATIONAL POLICY

    Mr. Davis. Yes. Chairman Price, by way of background, I 
came to work with Scott and Marc as a policymaker first. I was 
at the White House serving on the Homeland Security Council 
with the responsibility, the portfolio of radicalization. So, I 
have made it my business over the past couple of years to 
understand how to apply the field-based work to national policy 
and understand how to build national capacity for this. So, to 
address your question quite succinctly, you touched on the fact 
that foreign assistance is the single tool that the United 
States has to actually address challenges that we have in 
radicalization around the world. We certainly want to address 
radicalization before either the military or law enforcement or 
bullets are necessary. So, the single tool that we have right 
now is actually this foreign assistance capability.
    Now, the best way to target foreign assistance capability 
is to understand what is happening in the local communities 
with the young men, who have actually radicalized. And so what 
we are arguing here today is ultimately what needs to happen is 
there needs to be a requirement by the Committee, by the 
Department of Homeland Security, and by the other departments 
and agencies to require that more of the funding that goes to 
terrorism research actually be required to go into the field 
and to actually study this and then studying the implications 
of what sort of foreign assistance programs and interventions 
can actually work in those communities with those particular 
kids.

             ADAPTATION AND APPLICATION OF NEW TECHNOLOGIES

    Mr. Price. Thank you. Mr. Darby, let me briefly turn to 
you. Mr. Rogers and I were talking on the floor about how 
interesting your testimony is and also how interesting the 
experience of your organization is, in terms of providing a way 
for new technologies to be vetted and considered from the 
institutions and businesses out there that have something to 
contribute or think they do and also strengthening the agencies 
you are working with in figuring out a way to consider the 
many, many ideas that come over. Even if one idea out of 10 is 
a good one, nonetheless, it is very important to have a way of 
supporting that idea and its development.
    Based on your experience, what would you say--this is 
something, I am sure, Undersecretary Cohen will address, 
because he has wrestled with it at Homeland Security--what 
would you say about how the Science and Technology Directorate 
at Homeland Security should accelerate the development of new 
technologies and the adaptation of existing technologies? Based 
on your experience, what kind of advice would you give about 
how to evaluate these ideas and quickly procure what needs 
procuring to address pressing needs?
    Mr. Darby. Well, Mr. Chairman, one of the things that we do 
is try and understand the customer requirements first and 
foremost. And having not spent time yet with Undersecretary 
Cohen, it would presumptuous of me to specifically talk to the 
homeland situation. I will say that as In-Q-tel relates to the 
S&T directorate within CIA, I think they use us for two 
different things. First and foremost is that acceleration and 
economical solution to technology problems, because small 
companies want to sell their product. They want to solve the 
problem today. They do not want to solve it three years from 
now or five years from now. There is an economic imperative 
with small companies, generate revenue and make sure your 
product meets the needs of your customer. That is just basic 
business in the United States. And so, they are not looking for 
long-term rigmarole associated with trying to introduce their 
technologies. These companies want to get in and solve the 
problem fast. And the S&T recognizes that and uses In-Q-tel to 
foster those relationships and make sure that it gets in fast.
    We cannot solve huge programmatic things with these small 
technologies. So, this is not a replacement for the systems 
integrators and the larger providers of project-oriented 
things. But, I will say that within these large projects, you 
have an option sometimes. You can either buy an off-the-shelf 
piece of technology from one of these small companies or you 
can develop it over three years. And as a taxpayer, I think it 
is more economical often to just buy the off-the-shelf piece of 
technology and integrate it quickly. And so, I think that that 
makes good sense.
    I think the other thing that we do is we bring situational 
awareness to the table. So, through the history, we have only 
made 110 or so investments. However, we have seen 6,000 
companies and we document that and we talk about what the 
relative pros and cons are to those technologies. And so, there 
is a fairly detailed database of what is out there and we allow 
our customers to survey that database very quickly and 
determine whether what they are doing is state-of-the-art 
today.
    I think American creativity is underrated and I think the 
creativity is happening in the garages. It is happening in that 
three-person and four-person enterprise right now, where these 
people are working 24 hours a day to get the best product out 
there. And we have to tap into that.
    Mr. Price. Thank you. Mr. Rogers.
    Mr. Rogers. Well, you could not be plucking my strings more 
than what you are. This is something I have been preaching at 
with the department now for five or six years, ever since we 
started on this Subcommittee. Time and again, people would come 
to my office, still are, and they will say, I have this gizmo 
that you can put in a container crate and it will tell you 
whether or not it has been broken into. And, in fact, there was 
a small individual inventor from North Carolina. Well, I 
thought we had created S&T at the Department of Homeland 
Security to do just that, what you are doing. Sadly, I was 
mistaken. I have sent people like this inventor with this gizmo 
to S&T. I said to him that S&T will evaluate and tell you 
whether or not they already have one or whether this was good, 
bad, or indifferent. And if it is good, they will proceed with 
it and so on. When I sent him down there, I never heard from 
the poor guy again. He fell into that deep, dark black hole 
that, at that time, was S&T. We are going to find out whether 
or not that has changed here in a few minutes with the 
Undersecretary.
    But what you are doing, as I understand it, is precisely 
what needs to be done and that is provide a way for the 
government to find entrepreneurs out there with an idea that 
could be applied in a broad sense by the government in need of 
a solution. And you make money on it, or the non-profit does, 
perhaps, but the government gets what it needs.
    There was a reason why during World War II, we went from 
nowhere; no army, no planes, no bullets, no jeeps, nothing. 
Four years later, just four years later, we became the world's 
superpower, destroying two major allegiances of enemies on both 
sides of the world. It was an incredible undertaking. We had no 
airplanes and, yet, four years later, we had built almost 
300,000 planes. We had no armor and, yet, a few years later, we 
had 86,000 tanks, 65,000 landing craft, three-and-a-half 
million jeeps and personnel carriers, 53 million deadweight 
tons of cargo vessels, 12 million rifles, carbines, machine 
guns, 47 million tons of artillery shells, and on and on and 
on. It was an incredible performance. And I think the reason we 
were able to do that was the government said to industry that 
we have some important gaps to fill. We have to have an 
airplane that will deliver x number of pounds, tons of bombs, 
so many miles, and so many minutes, can you do it? And people 
like you said that we will find you somebody, sir, and you did. 
And off we went.
    I do not know why we cannot do that now, but we are not. 
There are gizmos and inventors out there by the acres-full, 
with ideas that solve the problems that we have. How do we 
protect our aircraft landing and taking off from the 440 
commercial airports in this country, how do we protect them 
from stinger missiles? Well, we are trying, but, I wish we had 
turned to people like you sooner. How do we protect container 
boxes from all points of the world, going to all points in the 
U.S., through a lot of good choke points? How do we know when 
one of those have been broken into, whether or not it had 
something bad in it at the outset? And how do we tell that 
fireman, who finds the wrecked train, leaking white fluid from 
one of these containers, whether or not that is milk or 
hydrochloric acid?
    The private sector can solve that. But, we have not yet. I 
do not think we have adequately turned to people like this, to 
integrate between the government and the private sector to find 
the gizmos and the answers to the solutions that you are 
looking for. I wish we had the Undersecretary at the table with 
us now for this conversation. What do you think about this?
    Mr. Darby. Well, I think you are right obviously, but I do 
empathize with the position that the Undersecretary is in 
however. Without an intermediary like In-Q-Tel, the S&T 
Directorate within our customer set would be overwhelmed 
because there is always an inventor out there who has a 
solution to a problem. Is not that true, Mr. Undersecretary?
    And to be able to vet that inventor, to be able to vet that 
technology before it takes up time within the agencies that we 
serve, I think is an incredibly valuable thing because, as I 
have said, we have looked at over 6,000 different companies; we 
made 110 investments in companies, so we do an awful lot of 
technology vetting, and we are not big.
    Mr. Rogers. Let me ask you how this operates. You work with 
the CIA?
    Mr. Darby. Yes, sir.
    Mr. Rogers. Do they tell you: Look, we need an x, y or z 
answer to the problem, and here is the problem? And then they 
say to you: Can you help us find somebody to help solve it?
    Mr. Darby. It is above and beyond that, sir.
    Mr. Rogers. Tell me how that operates.
    Mr. Darby. I think it probably started that way with 
requirements, documents saying we need a technology that will 
do x. We do not have it today.
    Today, we are far more sophisticated inasmuch as we will 
start with the dialogue around the problem set at a high level, 
but we, then, spend time in the field asking them questions. I 
think this is a very important role that we play because, 
within our organization, most of us recently come out of 
private industry, so we have built companies and we have built 
technologies right up until coming to In-Q-Tel.
    And this is a handicap sometimes: We are not government, 
but we understand what is going on in private industry. 
Therefore, when we interrogate CIA about a problem set, we are 
asking different questions. We are looking at the problems with 
a different lens than perhaps they are. So I think there is 
this interrogative period of time to help qualify.
    There had been occasions when they thought they wanted x. 
Yet, by the time we go through this process, they actually want 
y because we bring to bear an alternative technology that they 
maybe did not know about.
    Mr. Rogers. But, basically, do they tell you: We have got a 
problem in this field. what do you think we do about that?
    Mr. Darby. Absolutely.
    Mr. Rogers. Then, you go out and check in the field and see 
what is available; and you may uncover something that maybe a 
bit different but it is a better idea than they had, right?
    Mr. Darby. Yes, sir.
    Mr. Rogers. Is that the type of thing you do?
    Mr. Darby. Yes. Let me give you an example. One of the 
things that we have been monitoring and actually starting to 
invest in is this notion of virtual worlds.
    Some of you may be familiar with these things. The Internet 
has virtual worlds, and communities from around the world are 
going on-line and representing themselves on these virtual 
worlds, having dialogues, and creating relationships, and so 
on.
    When you are my age, it is kind of foreign to you. But 
certainly the younger members, and the Jihadists in different 
neighborhoods, are participating in these on-line environments. 
So, what are the technologies that can be brought to bear in 
these environments?
    How do you begin to assess behaviors in these environments? 
Are these operational environments for different people?
    We know that money is moving in these environments. So I 
think it is probably fair to say that In-Q-Tel was one of the 
catalysts for examining these new and emerging environments 
within our community.
    Mr. Rogers. Would you have your company, or a company like 
yours, working with S&T and the department in a similar vein?
    Mr. Darby. Absolutely. I think it starts with understanding 
the problem set. And In-Q-Tel, specifically, has probably a 
number of different overlapping technology practices, so we 
have a Bio-chem, Nano practice; we have a Coms and 
Infrastructure practice, Software and Analytic practice, 
Embedded Systems and Power; and we have a Digital Security 
Technology practice.
    So, those five practices, probably overlap at a certain 
level with some of the problem sets that are facing Homeland 
today. For us to re-purpose a lot of the investments and create 
economies of scale, potentially would make sense. But whether 
it is our organization or another one that is set up, I think a 
couple of key things.
    First of all, we are not venture capital. So the 
individuals do not profit from the companies going public. 
Right now, we are metrixed on base and bonus, and bonus 
associated with technologies being deployed. That is a very 
strategic investor model, much like Intel Capital, it is the 
Intel Corporation. I think that model works.
    Secondly, we are technologists at heart. We have some 
people that are in the investment community, and have been 
there for a long time, but most of the employees at In-Q-Tel 
are technologists, Ph.D.s that come out of private industry, 
have built companies and been successful, and have those 
relationships back into the entrepreneur's community and into 
the investment community.
    Mr. Rogers. So can we say that you are the guy in the James 
Bond movies who invented all the gizmos, Q?
    Mr. Darby. That is the Q in In-Q-Tel, yes.
    Mr. Rogers. Ah, so, you are Mr. Q?
    Mr. Darby. I am today, yes.
    Mr. Price. All right, thank you.
    Mr. Farr.
    Mr. Farr. Thank you very much, Mr. Chairman. I have been 
very stimulated by these papers and by this discussion.
    I would urge you to see if we can sometime just do a 
retreat, a weekend of these round-table discussions because I 
do not think the nature of these short hearings is going to 
allow us to grasp what we want to.
    It is very interesting that of the witnesses, that three of 
them are talking about high-touch and one of them is talking 
about high-tech. My background from the Peace Corps was really 
living in barrios and trying to understand from the bottom up 
and find that that is very relative to being a successful 
politician because, essentially, we all represent these 
barrios.
    My wife always said that I am still a Peace Corps 
Volunteer. I just changed my barrio, being in Congress. But it 
is about, and what I really appreciate this papers, because let 
me just tell you that I represent the Naval Post-Graduate 
School. Last year, Congressman Murtha was there with members of 
the Defense Appropriations Committee, and we had some soldiers 
who had just gotten back from Iraq. They were the IED experts, 
detecting them, and also trying to find them.
    One of the things they complained about was that we have 
thrown too much technology at them. There is so much technology 
that it was jamming the airwaves in Baghdad, and not being able 
to do just do communications.
    Jack Murtha said: We have just appropriated $2 billion to 
discover how we can jam these things. I think he said that one 
of the soldiers said: Have you ever put any money into the 
sociology of why people do this in the first place?
    So the people who are on the ground, whose lives were at 
stake and who had watched people, were now asking that 
question, which I think these panelists are asking you is: What 
is the motivation in the first place?
    The issue in this Subcommittee, it is the ounce of 
protection or the pound of cure. And Homeland Security is a big 
agency, and it has just been spending with a pound of cure. We 
have not spent money on figuring out what is the root causes in 
the culture of poverty.
    Your story about these kids who are all soccer players, I 
think in your paper, thought that maybe had one of them gotten 
a scholarship because they were good enough to play at the 
college level, they might have had a whole different motivation 
for all the gang, the whole team. We thought maybe we could all 
go on and be great soccer players.
    So, again, my question is--and last week the House passed, 
and the Senate has a comparable bill, a really nifty bill that 
I have been working on for a long time. It is creating a crisis 
core in the State Department USAID.
    Well, hundreds of people in the State Department who are 
experts in a specific field, and who can be called on within 
24-hours notice to go into a failed state, and backed up by 
thousands of people in the federal government, and backed up by 
even more thousands of people at the local level, who would be 
fire chiefs, police chiefs and so on, and judges, and 
hopefully, they would be recruited on the basis that they have 
some knowledge about countries and languages and cultures.
    When Mr. Price took us on a CODEL, in meeting with the 
heads of state in all these countries, I think you will agree 
that there was not a discussion about how much money you can 
get for us. All the discussions were: What kind of talent can 
you send us to help us upgrade our infrastructure?
    So I think Homeland Security is the guns and butter. We are 
spending so much money on guns and so little on butter. We need 
to begin doing what I think the three witnesses here talk 
about, and that is building this, and I would like to hear more 
about, is the science-based political violence field research 
teams that would be actually--understanding these pockets of 
poverty.
    We need to understand them in this country, too, because I 
think that is where people are going to come out of doing 
violent acts in this country.
    If, indeed, we have the sophistication to go out there and 
look at these start-up companies that are smart and doing the 
right things, then you can buy a little bit of attention. Tweak 
them, why cannot we tweak a barrio, or a neighborhood, so that 
we can do that ounce of prevention?
    I would like some of your feelings about what is it going 
to take to really build this? The military, frankly, is asking 
these questions. They are not asking us--you know, we want to 
give them the right equipment. But the question is not make me 
a better gun. It is figure out what motivates people to do 
these things to do harm to others in the first place?
    That is coming out of the military community, and I think 
it is very, very interesting to hear that. I would hope that we 
might spend some resources trying to figure that out. How much 
is it going to take?
    Mr. Davis. Thank you, Congressman Farr.
    In terms of building capacity, to be able to kind of 
redirect where radicalization is going in the field, the first 
place to start is overseas.
    As I addressed earlier, the Foreign Assistance Program that 
the country has targets these eighteen-month programs in 
health, social-service type programs in different communities, 
but they are not long-standing programs in different 
communities. And they are also, many times, based upon 
assumptions about what might work in particular communities.
    What is really interesting now about not having the data 
from the field, base-science research, is that we can actually 
test these theories of intervention of what could actually 
change these communities. We can test them. We can find out 
whether the opportunity for those young men in Hebron by 
getting one soccer scholarship could actually change the 
trajectory of a community. We can test that.
    That, perhaps, is the next step for what we need to do: be 
able to take the good quality science that exists, although 
there is not much of it, but what does exist in the field, and 
actually begin to test our intervention strategies to see 
whether or not they are working, and find out, community-by-
community, where we need to, what sort of intervention 
strategies can work.
    Let me leave you with one kind of picture that I became 
very familiar with in understanding the way the National 
Security Council works, the Homeland Security Council works, 
and the Domestic Policy Council works. When you ask the 
question how do we change the hearts and minds of these would-
be radical actors, who is sitting at the table?
    You have got the Defense Department, you have got the FBI, 
you have got Justice, you have got Homeland Security. You have 
got all these experts in security, but you have very few health 
people, very few educators who are actually sitting there, and 
that is partially why the capacity does not exist.
    Mr. Farr. What is it going to take to build that capacity, 
what kind of investment?
    Mr. Davis. To start with, you should strengthen the 
institutions that area actually doing the field-base science, 
so that you have some sort of qualitative work that you can 
base your information on.
    Why RTI is so interesting in this capacity is because RTI 
not only does it serve on the front line in Iraq, in its local 
governance program through a developmentally related program, 
but it right now is working on trying to lessen the number of 
radicals that are coming from Iraq.
    Then you take that on the flip side you look at it and: 
Okay, now we have political violence, kind of individual and 
group-related research. You need to strengthen that first. 
Then, ultimately, you need to add the type of research, and 
require more of research happening from the field in terms of 
political violence, and had a requirement on that political-
violence research that you actually test intervention 
strategies otherwise what good is it?
    Mr. Price. Dr. Altran, why do not you chime in and then we 
will have to move on.
    Mr. Altran. One of the problems, especially in academia, is 
that it is much more convenient. It costs a lot less and takes 
a lot less time to just take data in and speculate and write 
theories about it.
    It is very costly in terms of time and commitment for 
people to actually go out in the field, in terms of the actual 
dangers they may face, and in terms of the commitment to their 
lives and their homes. There has got to be some incentive for 
people to do that. There is no such incentive in the United 
States right now. In fact, there are disincentives.
    Mr. Farr. How much cultural and language capability do you 
have to have to do that?
    Mr. Altran. You are going to have to have certainly a 
minimum of cultural language.
    Mr. Farr. Can we hire host countries nationals to do it?
    Mr. Altran. Of course, and you have to. That is what we do. 
People who come out with us in the field that we can vet and 
find out who--but they have to be trained.
    Because if you just get people who have no training in 
science, and do not know what a base rate is, know no 
hypothesis, the information they give is mostly a waste of 
time.
    Mr. Price. I hate to cut this off because it is extremely 
interesting, and I hear what the members are saying about the 
need to continue this kind of discussion, maybe in a less 
chaotic atmosphere than the one created by multiple votes on 
the House floor. We do want to hear from Undersecretary Cohen, 
and we need to bring him forward.
    So let me thank all of you for a very interesting and 
useful morning, and we hope to remain in touch with all of you. 
Thank you for the good work you are doing.
    Mr. Undersecretary, I appreciate your presence with us this 
morning for this earlier discussion, and we are very, very glad 
to have you with us now.
    I think Mr. Rogers and I will dispense with any further 
statements, and ask you to give us your oral summation, and 
then we will proceed to a discussion.

   Statement of Jay Cohen, Undersecretary for Science and Technology

    Mr. Cohen. Well, Mr. Chairman, I will follow your lead and 
Chairman Price and Congressman Rogers, Congressman Farr, it is 
a great personal honor for me to appear before you.
    Chairman, I think you have indicated that my written 
testimony would be made part of the record, so I will not 
repeat that. I would like to start out, Chairman, by 
congratulating you on your selection by the National Emergency 
Management Association recognizing you for a congressional 
recognition award. I understand that that would be presented 
later today. I only regret that I cannot be there.
    Mr. Price. Well, thank you. You are very kind to note that, 
and I am very grateful for the recognition.
    Mr. Cohen. Well, you are all deserving of awards, and I am 
sure in time that those will follow.
    And thank you for including me in that very enlightening 
testimony and interaction from both RTI and In-Q-Tel. You might 
remember that we established the Human Factors Division as part 
of the reorganization which the Congress so graciously approved 
in a very rapid way when I was in Naval Research many of the 
same questions came up. And I was blessed to have an 
anthropologist, Dr. Montgomery McFate, who is still with the 
Department of Defense, and is helping us go in exactly the 
direction that Congressman Farr has addressed, understanding 
the barrio as you said; and now I am blessed to have Dr. Sharla 
Rauisch, who is a social psychologist with a Justice 
background, bringing those very same things to bear.
    What I would like to just address is where we are and where 
we are headed. Congressman Rogers, I think very wisely, 
addressed the fact that we are in a transition year, and we 
take that very seriously because science and technology, as I 
have come to learn over the last eight years, is bipartisan, 
non-partisan. It is a strength of America, and it enables not 
only our economy but our very way of life that we enjoy.
    So a year-and-a-half ago, I briefed you all on what I 
believe needed to be done. In a Science and Technology 
Directorate, those were the four ``gets.'' We had to get the 
people right; we had to get the books right; we had to get the 
organization right. When you do that, you get the content 
right. I believe we are substantially there.
    And then I addressed what I believe were the threats that 
faced the nation. Those were the four Bs: bombs, borders, bugs 
and business.
    Just to remind you because bombs, borders and bugs are 
self-evident. But business is that cyber-backbone that 
underlies everything we do, and the concerns there have already 
been addressed.
    So, where are we in this transition year?

                              THE FOUR P'S

    Well, the good news, Chairman, and members and Staff, is 
that we are now up to the four ``Ps.'' There are only 23 more 
initiatives I can have and then I run out of alphabets. But 
what are the four ``Ps''? The people.
    When I came on board, we were fewer than 60 percent 
government manned, and we were bleeding. Today, we are 95 
percent government manned thanks to your support; and about a 
dozen individuals, government service, who had left the 
directorate before I got there are now back on board. We have 
no shortage of volunteers. We even have people who want to work 
pro bono because they believe in the mission and they get it.
    The second P is: process. We have put in place the 
processes that we deal with your Staff and with you, on the 
day-in, day-out basis. Those are the same processes that I, 
after a long period of time, six years in Naval Research, was 
able to put in place.
    And now that I am two years removed from there, an electro-
magnetic rail gun, and free-electron lasers, and super-
conducting motors, and mack-7 missiles, and so many other 
things are now being delivered to the fleet and the force, and 
the MRAP to protect our Marines and soldiers.
    When you go to a five-year budget, when you have an open 
and accountable organization, when you put those processes that 
are customer driven in place, no person is indispensable. The 
good lives on afterwards, and that is the process and the 
organization that I put in place that I believe, with our five-
year budget, if you consider every year, will serve us well.
    And then, finally, partnerships. We are partnered with all 
of the other S&T components, not only in government but your 
vision in HR-1 last summer, where you took the small initiative 
I had with international partnerships because the world is 
flat.

                       EUROPEAN UNION PARTNERING

    You know, Congressman Farr, the European Union has come to 
me twice in the last year and laid 1.4 billion Euros on the 
table that they want to partner with us for what they call 
security, we call homeland security.
    And we have interoperable technologies, and we have 
understandings of other cultures, then our ability to work 
together and make these partnerships is critically important. 
So we have partnerships with industry. Congressman Rogers, I 
think will be pleased that we have taken the PsiTech and the 
Tech Clearing House, which I think was brilliant on your part.
    It is not an In-Q-Tel model. And I think Mr. Darby was 
eloquent actually in describing that. But we have now focused 
it, as you envisioned, on the first responders. We have tech 
solutions, where first responders come in directly on the web 
and also now, we have expanded that to firstresponder.gov 
because so many more first responders wanted to be able to 
field it.
    I think we have fielded the anti-tamper device. I just 
cannot tell you if it's from that North Carolina young man, but 
I will work to find out.
    So with people, process and partnerships, at the end of the 
day, and you have addressed this, it is about product. And 
product is coming out the door. Some of it is demonstration, 
some of it is developing, others long-term.
    But this is the long war. This is a war of ideas and 
ideals. It will go on. It requires psychology. It requires the 
carrot and the stick. But we believe that with the four ``Ps,'' 
we are well situated for that.
    So I thank you, I thank your staff, and I thank both bodies 
for the support that we have received. I look forward to your 
oversight; I look forward to your questions. With that, I will 
conclude.
    [The information follows:]

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    Mr. Price. Thank you very much, Mr. Undersecretary. We 
appreciate that testimony, and your good work. We will proceed 
to try to link I think, initially, the first panel to your 
observations.
    The first panel, as you heard, talked about radicalization, 
and the different waves of radicalization that we are 
confronting in the offensive against terrorism. I think we all 
agree that the phenomenon needs to be well understood to keep 
the threat from growing, and to enable sensible interventions.

                    FIELD RESEARCH ON RADICALIZATION

    Worldwide we hear, though, that there is less than $12 
million being spent on open-source field research on 
radicalization. I do not know what your estimate would be. I 
wonder what percentage of your budget is spent in areas roughly 
comparable to what we have heard about this morning.
    Where should this research be going on? I guess we want an 
assessment of the importance of this from the standpoint of 
your mission. But, we, of course, have talked often before 
about the way different research portfolios across the federal 
government feed into the Homeland Security mission. We have 
ordered up a more thorough analysis as a matter of fact, so we 
all understand what the bigger picture looks like.
    But, if you are not undertaking this kind of research, is 
anybody undertaking it; and what do you think would be the best 
way of getting this research up to a level where it needs to 
be, and where we can make maximum use of it for our homeland 
security purposes?

                       HUMAN-FACTORS INITIATIVES

    Mr. Cohen. As to my specific investment, I will take that 
for the record, and get you my best estimate from my budget.
    [The information follows:]

     DHS SCIENCE & TECHNOLOGY DIRECTORATE RADICALIZATION R&D FUNDING
------------------------------------------------------------------------
                   Program Containing       FY07       FY08       FY09
      PPA          Radicalization R&D     Enacted    Enacted    Request
------------------------------------------------------------------------
Explosives       Counter-IED--Deter              -        1.0        3.1
Human Factors    Motivation and Intent         4.6        4.3        4.4
                  & IHSS
University       START (forward funded           -        3.6        3.6
 Programs         in FY07)
                                        --------------------------------
    Total        ......................        4.6        8.9       11.1
------------------------------------------------------------------------

    But I have no shortage of ideas; I have no shortage of 
requirements. I should say good ideas, requirements, etc., and 
because of the enabling legislation, you very wisely told me 
not to reinvent the National Institutes of Health, the National 
Science Foundation, DOD, or DOE Labs.
    I think that was brilliant, as a taxpayer. On the other 
hand, you have given me full leverage to go in and find out 
what they are doing. I cannot tell other departments what to 
do, but I can leverage what they are doing, and then take my 
precious dollars and add on to it.
    So, as I have testified previously, when I first came on, I 
thought about what is unique in Homeland Security S&T, meaning 
if I did not do it, would it not get done?
    And I settled on two items and they are both in the human-
factors area, and they are both complementary towards RTI. One 
was hostile intent, and the other was psychology of terrorism.
    Almost everything else I deal with, whether it is a weapon, 
a communication, a platform, it is being done somewhere else in 
government. I can leverage them. I have to modify for the 
techniques and procedures for first responders. We are here to 
protect and serve, as opposed to soldiers and Marines who have 
a different mission.
    But, in this area, I would tell you that the Department of 
Defense as I have observed, and you know this as well as I do, 
that over the last two years, DOD really has got it and they 
are trying to work their way up the kill chain.
    The Brits get it. When you get the bomber, when you get 
into the cell, you do not have to worry about the bomb. But you 
cannot always do that, that is why we have infrastructure 
protection. But I think the success that we are seeing today in 
Afghanistan and Iraq, in part, is because we are getting to the 
left of the boom.
    We are investing as a nation, primarily the Department of 
Defense. I do not know what the State Department's investment 
is here. I do not know what National Science Foundation's 
investments are, but I will get together with Arden Bement on 
this, and we talk all the time, to get to the left of the boom. 
There was a series of articles that appeared in October in The 
Washington Post that talked about this. So we are seeing the 
impact of that. This should not be a surprise. This is just 
good law enforcement. This is how we do business.
    So I was very pleased that Congress gave me the resources 
that I could more fully engage with RTI in the FY 2008 
appropriation. You see already the results. Charlotte Roche and 
her team and the rest of my team have been down to RTI. We look 
forward to their proposals, but it has to be done in the field.
    It is complicated. It was discussed here. And I would tell 
you that we are under-invested in it across the government.

                     BASIC RESEARCH TIED TO POLICY

    Mr. Price. We, of course, are always looking for the payoff 
in terms of policy interventions and what they should look 
like. I think you would agree that it is sometimes premature, 
though, to insist on that as the first thing that we learn. 
There is a certain amount of good social science using basic 
social-science methodology that needs to go on before we can 
draw sound conclusions.
    So it is not a matter of being too intolerant of what might 
appear to be academic-type studies, assuming we know where they 
are headed. I am sure that is a debate you engage in all the 
time, whether basic research that you are funding is 
sufficiently tied to policy, sufficiently relevant?
    Mr. Cohen. Well, Chairman, as you know, when I racked and 
stacked my investment portfolio when I first came on board, it 
looked to me like just about 12 percent of my investment was 
going to what you and I would call basic research, whether that 
was universities or laboratories, unfettered.
    You do not know what you do not know. You have got to go up 
a lot of alleys to figure out which ones are blind, about an 
eight year or longer timeframe. But this is the strength of 
America; this is where Bayh-Dole has affected our economy. 
America and very few other countries do the basic discovery and 
invention that changes the world.
    We, then, in America tend to give away. We allow those 
patents to be bought, and then we buy the valuated product 
back, generally from overseas. I wish that were not so. But you 
see in my budget that I have committed to you last year that I 
would grow the basic research in universities and laboratories 
to 20 percent of my budget. And that is the budget that the 
President has come forward with and I am very appreciative of 
that support.
    In the Navy, I was at 40 percent, but Naval Research had a 
much different history. The Army and Air Force have about 20 
percent in their basic research, and I think that is a 
reasonable number.
    Mr. Price. Thank you. I also have some questions about Mr. 
Darby's testimony, but I suspect Mr. Rogers is still on a tear 
on that subject. So why do I not turn to him. We do want to 
move along here. Thank you.

               RELATIONSHIPS SIMILAR TO CIA AND IN-Q-TEL

    Mr. Rogers. Thank you, Mr. Chairman, and you did read my 
mind.
    Do you have anything similar to the arrangement apparently 
that the CIA has with people like In-Q-Tel?
    Mr. Cohen. The short answer, sir, is: Yes. When I was in 
Naval Research, the Congress, this was in the Defense 
committees, asked me: Did I want legislation to create a Navy 
In-Q-Tel?
    They had done something similar with the Army and a $30 
million venture-capital fund for the Army.
    I told them that I thought I had all the authorities I 
needed in that position, and I would get back to them in a 
year. So I started on the In-Q-Tel model, a spin-in, spin-out 
model.
    A spin-in is where I go to the venture capitalists. I 
provide for them the needs that we are unable to fulfill by 
traditional means and they, either themselves or through their 
network, as Mr. Darby very accurately described, were able to 
give us neat and timely, and cutting-edge solutions.
    The spin-out was that Congress had invested over decades 
literally billions of dollars of intellectual property. I was 
sitting on it at the Naval Research Lab. Yet we were not 
getting utilization out of it.
    And I saw what IBM had done ten years ago where those 
patents, they were not able to use in their core business, they 
created a profit center for intellectual property, which now is 
multi-billion dollars a year. So we went ahead and did that. It 
was not as successful as I wanted.

                    VENTURE CAPITALIST ENTREPRENEUR

    What I have done now in Homeland Security S&T is: We have 
brought on board within the last six months, which your 
enabling legislation has allowed me to do this, Dr. Tom 
Cellucci. Dr. Cellucci is a very, very successful venture 
capitalist entrepreneur, etc. He took an incredible pay cut, as 
so many of the people who have come on board have had to do, 
and today he is engaged with hundreds of small businesses, 
effectively doing what In-Q-Tel is doing.
    I am not limited by good ideas; I am not limited by 
entrepreneurs. I am only limited by resources and the 
authorities I have for acquisition.
    Mr. Rogers. What is the result, the bottom line?

                                RESULTS

    Mr. Cohen. The bottom line is we are getting cutting-edge 
devices that I now have been able to field, such as retinal 
scan to determine if you or I have been exposed to a nerve 
agent based on what happens to the retina. That is just one 
simple example.
    But what Dr. Cellucci is doing with my six divisions, is he 
is doing the bottom up. He knows what my customer requirements 
are from the 22 components, TSA, Coast Guard, et cetera. He 
knows our programs of record. What he is doing, he has worked 
with my division directors to say you need to go to talk to 
Johnny. You need to go to talk to Janie.
    This is exciting stuff. Cellucci, he is at a leadership 
level, and I give him that authority to go ahead and do that.
    Then I engage and find out why my division directors may or 
may not be as innovation tolerant as I would like them to be.
    Mr. Rogers. Well, we still have a lot of unsolved problems 
in Homeland Security.
    Mr. Cohen. Sure.
    Mr. Rogers. I have got to believe that there is a solution, 
on the shelf even, right around the corner, that we have not 
found yet.
    I do not know whether the operation you are talking about 
is aggressive enough in laying out the problem that you want 
solved, and inviting the private-sector world to bring their 
genius to bear on it, as we have done so successfully in other 
periods in our history.
    Are you comfortable with where you are?
    Mr. Cohen. I am not comfortable with where I am.
    Mr. Rogers. I am not either.

                                CELL ALL

    Mr. Cohen. I think you have got it right--I have reached in 
my pockets, and I want to take out just a little example. Last 
year we testified to a program which you supported called Cell 
All. This is to put a lab on a chip in a cell phone. Now it 
might be Anthrax; it might be cobalt 60. You can turn it on or 
off. We will address those privacy issues.
    We got over 80 respondents, 80 proposals to solve this 
problem in SBIR, Small Business Innovative Research. We are 
seeing the ma and pa solutions, and we are fast-tracking that.

                              THE DAZZLER

    I think you are aware that this year, in Time Magazine, 
instead of having the taser which, unfortunately, has killed 
some people, we now have the dazzler. It has been called the 
puke ray. This is the light----
    Mr. Rogers. The what?
    Mr. Cohen. The puke ray, I apologize. It makes you seasick. 
But it is a nonlethal weapon. I think in the packet we have 
given you, you have a picture of it. But it was one of the top 
100 innovations noted in Time Magazine. It has been covered on 
CBS Morning News, et cetera.
    What it does is if it is pointed at your face, it affects 
your brain so that you become nauseous to the point that you 
cannot do damage. You then get a migraine and several hours 
later you feel fine, but the threat has passed. That came out 
of SBIR. Those are tools you have given me.

                         CENTERS OF EXCELLENCE

    Mr. Rogers. Let me ask you about the Centers of Excellence. 
In the area of radicalization behavioral research, are you 
satisfied with the Center of Excellence in that regard?
    Mr. Cohen. I must tell you that that is one of my better 
performing Centers of Excellence from what I would call the 
traditional Centers of Excellence that were stood up initially, 
and there are really two. One is START and the other is CREATE. 
Those are the two names that they use. One is much more the 
radicalization, very much like what RTI is doing. And the other 
one is operations analysis/operations research.
    And so we are working with them. We are resourcing them. 
This is an area where the Congress provided additional monies 
from our Human factors, but it remains a work in progress. And 
I look forward to working with RTI and incorporating them in 
that bigger program.
    Mr. Rogers. Well, are you satisfied with the COE 
productivity so far in this area?
    Mr. Cohen. We can do better with the COEs. And when I came 
onboard a year and a half ago, they were at risk for the very 
reasons that you have just addressed, but you showed confidence 
in the proposal that we made to realign them to my divisions. 
And as you are aware today, we just went out with five new 
COEs. Four were competitive. One came out of HR-1. And we are 
moving forward with a six-year assignment for COE, renewable 
for six years on a competitive basis.
    But now I have underlying COEs to support each of my six 
divisions where we do not have solutions in transition near 
term, and we do not see solutions that are high-risk in 
innovation where my division directors are making the 
investment of about $148 million a year in their divisions, in 
universities and laboratories to make the discoveries that will 
change the world and make the nation safer.
    So I think we are aligned for success. We are at a stable 
point. We have got full engagement by the Congress and the 
COEs, and now we need to keep it stable because in the basic 
research, it takes time, it takes focus to get the product out 
the door.
    Mr. Rogers. Thank you, Mr. Chairman. I will wait for the 
next round.
    Mr. Price. Mr. Farr.
    Mr. Farr. Thank you, Mr. Chairman. The coordination between 
R&D and the first responders is obviously a two-way 
communication.
    Mr. Cohen. Sure.

                 FUNDING FOR NAVAL POST GRADUATE SCHOOL

    Mr. Farr. Science and technology experts need to know the 
needs of field personnel. And I think the field personnel also 
need to know what are those tools and technology, and that is 
what your job is, to bring them all together. My understanding 
is that you have a three-year $1 million a year MOU with the 
Naval Postgraduate School in Monterey in addition to the $2 
million Homeland Security Consortium that was funded in the 
fiscal year 2008 bill. In your testimony, you state that S&T 
directorate is requesting $5.5 million less for its university 
programs, reflecting no funding request for the Naval 
Postgraduate School. What does that mean?
    Mr. Cohen. Well, I think what we have here, Congressman, 
first of all, I want to compliment the Naval Postgraduate 
School, and I know your longstanding support both when I was in 
Navy and here after the tragic events of 9/11, it was the Naval 
Postgraduate School that immediately, immediately responded. In 
fact, they offered me their Predators, which they were using 
for their students, which we refitted to send over to 
Afghanistan and Iraq. As it turned out, they were not needed. 
They stood up a Homeland Security education and research 
program when there was no Department of Homeland Security. This 
was the kind of vision and forethought the Naval Postgraduate 
School had.
    And today and over the last many years, representatives 
from all agencies of government have gone there and they are up 
through a Master's degree. My team was out there last week 
working on the details now of a postgraduate, excuse me, a 
Ph.D. degree in Homeland Security, and so I was very pleased 
when we went ahead and established our Memorandum of 
Understanding with the Naval Postgraduate School.
    Now everything I do, no surprise to you, is pending 
funding, and we committed to $3 million over three years. I am 
a man of my word. We committed and have transferred the first 
$1 million, but regrettably, because the omnibus appropriations 
came so late in the calendar year, the President's fiscal year 
2009 budget was already locked down, and so the omnibus 
appropriations and the President's fiscal year 2009 budget were 
like ships passing in the night. Normally, when I get the 
appropriations, whether it is a law or it is an omnibus 
appropriation, we are able to make adjustments to the 
President's budget. I was not able to do that, and so we are 
going to have to do that either during this Congressional year 
on the Hill or I will have to do it in execution.
    But I have been and I remain committed to our initiatives 
with the Naval Postgraduate School and am very pleased to have 
them on the DHS Homeland Security team and in fact want to 
leverage them with some of my other Centers of Excellence 
because of their excellence in educational programs.
    Mr. Farr. Well, thank you. I am learning every time I visit 
that school about the innovations coming out of it.
    Mr. Cohen. Sure.
    Mr. Farr. And what I think is exciting for the federal 
government is to have that kind of an intellectual think-tank 
where you have people from the ground right out of theatre 
dealing with the academics to match up what needs tweaking, 
what needs fixing.
    Mr. Cohen. Sure, sure.
    Mr. Farr. And then immediately putting it in the 
curriculum. So I hope someday that we can all go out there and 
see all this stuff. Thank you, Mr. Chairman. Thank you for your 
testimony today.
    Mr. Cohen. Thank you, Congressman, for all you do.
    Mr. Price. Thank you. Mr. Undersecretary, let me turn to 
one area that decidedly is not to the left of the boom, as you 
phrased it.
    Mr. Cohen. Sure.
    Mr. Price. Unfortunately, it has to do with IEDs, 
improvised explosive devices.
    Mr. Cohen. Sure.

                         IED DETECTION PRODUCTS

    Mr. Price. Primary devices used by terrorists seeking 
uncomplicated, inexpensive means of inflicting mass casualties 
and creating a psychological perception that almost anyone can 
be harmed at any time. IEDs were a known threat before 9/11.
    Mr. Cohen. Sure.
    Mr. Price. Certainly we have seen their impact in Oklahoma 
City, Israel, Spain, London, Bali, Mumbai, Iraq and 
Afghanistan. Some of these events occurred years ago, others 
more recently. Just last week, as you know, a military 
recruiting station in Times Square was the target of an IED.
    Mr. Cohen. Sure.
    Mr. Price. Now last year Congress provided $15 million 
above the fiscal 2008 budget request for S&T to ``work on 
producing detection products that deter, reduce or eliminate 
explosive attacks and their consequences, including car 
bombs.''
    Mr. Cohen. Yes, sir.
    Mr. Price. The fiscal 2009 budget request more than doubles 
funding to $34 million for this effort. Just looking backward 
briefly, I would appreciate your assessment of why we are only 
now beginning an aggressive program on IEDs. It has been six 
and a half years since September 11 after all and five years 
since the Department was formed. But I want mainly to look 
forward, and I want to ask you to elaborate on the budget 
documents that you provided to the committee. You note that DHS 
plans to ``identify near term technological improvements in 
less than five years.''
    Mr. Cohen. Yes, sir.
    Mr. Price. Now that seems like a long time to wait, and I 
wonder what we can reasonable expect to experience in the near 
term, to achieve in the near term.
    Both TSA and the Secret Service have been working on 
detecting IEDs for a significant period of time. DOD has a very 
aggressive program that has developed a lot of military 
solutions for use in Iraq and Afghanistan. So I wonder how your 
program differs from those of these other agencies I have 
mentioned. In other words, I am asking you to give us an update 
and to touch on these questions if you will.
    Mr. Cohen. Yes, sir. It would be my pleasure, sir, and 
thank you for the question.
    Mr. Price. Excuse us one moment.
    Mr. Cohen. Please. Yes, sir.
    [Pause.]
    Mr. Price. Please proceed, Mr. Undersecretary.
    Mr. Cohen. Yes, sir. And I will speak quickly. Like you, 
Chairman, I drive by looking through the windshield, not the 
rearview mirror, and I appreciate very much in a very difficult 
budget year that the Appropriations and the Congress would 
provide the $15 million to quick start what we are trying to 
do, and I am very pleased that the President and the 
Administration then followed that, as you indicated, with an 
additional $34, $35 million to get this going.
    If I can capture this fairly succinctly, billions of 
dollars have been spent properly I believe by the Congress in 
the supplemental appropriations for JIEDO, which is Joint IED 
Defeat Office, was established in the Department of Defense. 
This is in response to the combatant commanders who saw the 
carnage that car bombs, IEDs, suicide bombers were causing in 
theatre and are very well known.
    The tactics, techniques and procedures for soldiers and 
Marines are to kill, capture and destroy generally over there. 
My workforce, my customers are first responders. They protect 
and serve. They are here in the homeland. We can take an 
electronic jamming airplane and fly it over a foreign city, and 
we can, as you heard from Congressman Farr's testimony, 
electronically jam the fuses, et cetera. But if I did that over 
Washington, I would bring to a halt all of the electronic 
commerce that drives our society. That is independent of the 
Constitution. That is independent of the Federal Communications 
Commission. So tactics, techniques and procedures for the 
military and first responders are fundamentally different, and 
they should be different.

                    IED DETECTION PRODUCTS CONTINUED

    The focus that I am placing is in the basic research where 
today we do not have the technology to detect at range--you can 
define it as 50 yards, 100 yards--that someone has an explosive 
device on them or that a vehicle traveling at 55 miles an hour 
has an explosive device, I do not care if it is nitrate, 
plastic, an explosive device. There is a one-second warning 
before they get to your checkpoint.
    T.S.A. has properly focused on explosive detection systems, 
scanning devices, portals that the person goes through, but as 
you indicated, suicide bombers, IEDs are the weapon of choice, 
have been for a long time by terrorists to try and destabilize 
an election, society, events, how we live our lives. So it is a 
different scenario, and I must in the basic research, and this 
is an area that JIEDO and no other component of DOD that I am 
aware of has in fact solved the problem.
    Believe it or not, Princeton has come to me with a photon 
packet proposal. I am not a physicist. You know, it is way out 
there. I do not know if it will work, but no one else has come 
to me with a viable solution of a handheld or portable device 
that a first responder can have in Times Square, and I was in 
Times Square last Friday and saw the destruction that that 
small bomb caused--fortunately no one was injured or killed--
and so it is only S&T with the help of the Congress that can 
make the sustained investment at a critical mass in the basic 
research that will give us this solution.
    And when we do that, sir, we will deny the terrorists the 
ability to get to their target. We will prevent them from 
getting to nirvana. Their picture will not go on the Martyrs 
Hall of Fame, and their family will not get a multithousand 
dollar stipend because their child became a suicide bomber. 
That is the focus of what I am doing. The Department has stood 
up the Office of Bombing Prevention. Charlie Payne is my 
customer in the near term for the bomb disposal squads.
    I am going to take about one-third of the monies you gave 
me, I am going to use those in the near term to leverage JIEDO 
and other solutions to get near-term maybe suboptimum tools to 
the first responders, 571 bomb squads around the country, 
700,000 police, but the other two-thirds, we will work with 
your staff, we will work with the National Science Foundation, 
OSTP, Dr. Marberger, OSD, et cetera, and we will invest in the 
universities, the laboratories, the partners to find a 
phenomenology to turn the calculus around to do what I said, 
detect at range so we can prevent the bombers from getting to 
their target.
    Mr. Price. And it is that second component that leads you 
to a five-year projection, or what is the five-year projection 
built on, based on?
    Mr. Cohen. I know from my experience, I have been an S&T 
executive now for eight years in two different components, that 
this is tough. This is tough, especially when I do not have 
someone at my door other than the Princeton proposal, which is 
nascent, with a clear path ahead. If I have a technology that 
is even maturing, by applying resources, I can accelerate it, 
but I am pre, I am in the basic research. I need a 
phenomenology that will allow me to do this. And so five to 
eight years is the timeframe, and I believe that this is an 
area that will grow to between $50 and $100 million in basic 
research each year if we are to get there.
    And I believe, and I think others in government would tell 
you, we are five years behind. This was called by Secretary 
Gordon England the Manhattan Project. He tried to start this 
four years ago in DOD, had some success. But if we do not start 
now, we will be just one more year behind and one more year 
behind, because, sir, this problem is going to be with us as 
long as we are alive, and I am planning on living to be 100.

                             CYBER SECURITY

    Mr. Price. Let me turn to cyber security quickly. I 
referred in my opening statement to media reports about the 
efforts of China, other countries, to target U.S. government 
privately owned cyber infrastructure. On November 6, 2007, DHS 
submitted a budget amendment for $115 million for DHS's 
National Security Cyber Division to enhance federal cyber 
security efforts government-wide. We fully funded that request 
in our 2008 bill and provided S&T almost $20 million for cyber 
security activities. That was an increase of $5 million over 
the budget request.
    Mr. Cohen. Sure.
    Mr. Price. Now the 2009 budget request only requests $18.1 
million for cyber security. That is a decrease of $1.7 million 
from that appropriated level. So I naturally want to know why 
that is so. We did provide $120 million above the original 
budget request in 2008 to address these cyber threats, these 
infiltrations from other countries, these various concerns.
    Mr. Cohen. Sure.
    Mr. Price. S&T received a small plus-up in funding for 
research and next-generation technologies. So why is the 
funding for this effort proposed to go down? Cannot the case be 
made for more involvement by S&T in researching tools and 
techniques that could protect the federal government from 
whenever the next wave of cyber attacks comes?
    Mr. Cohen. Yes, sir. I will answer those in reverse order. 
Absolutely there is a critical role for S&T, and this is where 
the solutions will come from. This is an area that is cutting-
edge warfare. It is measure, countermeasure, counter-
countermeasure. We face this. You buy McAfee or Symantec. We 
decide how much is enough for us to protect our home computers.
    As I told Congressman Farr, that because the omnibus 
appropriation came at the end of the calendar year and the 
President's budget was already locked down that there are some 
discrepancies. The fiscal year 2008 President's budget as you 
are aware in this area for me was $14.9 million, almost $15 
million. The President's budget comes forward with an $18.2 
million request. That is an increase of more than 20 percent. 
Regrettably, the ships passing in the night, you wisely 
invested even more, nearly $20 million, and so my $18 million 
is less than your $20 million, and I understand that.
    Having said that, and cyber is absolutely one of my top 
priorities, this is a very simplistic diagram of likelihood of 
occurrence versus consequence of occurrence and why you can see 
nuclear is off the chart to the right in consequence. Today you 
have to either buy or steal a bomb. I would tell you the odds 
of that happening today are low. I cannot speak for tomorrow. 
But cyber you see is happening right now. Someone may be trying 
to steal our identity. And as you indicated with Estonia, and 
there is not a day that goes by that we are not made aware of 
other attacks either by foreign nations or individuals or 
terrorist organizations.

                   NATIONAL CYBER SECURITY INITIATIVE

    So it is critically important. I am very pleased that the 
Administration has gone forward with Homeland Security 
Presidential Director 23. This is a very highly classified 
executive order. I think your staff is aware of it. I have had 
a chance to participate in its development, have read it when 
it came out. This is an area that cuts across the government, 
involves all of .gov; .mil will be associated, but they have 
their own processes. And I believe that that initiative, the 
National Cyber Security Initiative, will develop into probably 
more than $1 billion a year initiative. I will leave that to 
the Administration to work with the Congress.
    But unlike IEDs where Homeland Security Presidential 
Decision 19 said that DHS and Department of Justice were 
responsible for IEDs in the homeland and that DHS S&T would 
take the lead on that, which is why I have stepped up to the 
plate and we briefed everybody on that, in cyber, in the 
National Cyber Initiative, the responsibility there falls with 
OSTP, and I will fall in like all other government agencies and 
provide that portion of solutions that are appropriate for DHS. 
So two different models, and I am sorry that our ships passed 
in the night, but cyber, we got it, and it is a biggie, and it 
is going to grow.
    Mr. Price. Mr. Rogers.

                         TRANSITION DIRECTORATE

    Mr. Rogers. I want to get back to Dr. Cellucci's operation 
at S&T.
    Mr. Cohen. Yes, sir.
    Mr. Rogers. How does that office operate?
    Mr. Cohen. Well, it is pretty lean like almost all of my 
offices. As you know, I maintain my overhead at 9 percent, 
which is what I committed.
    Mr. Rogers. Yes. How many people does he have there?
    Mr. Cohen. He has a small cadre. I think at this point, it 
is about three people who are helping him. I put him in my 
Transition Division. As you know, the Transition directorate is 
zero to three years.
    Mr. Rogers. Well, you know, I am not sure that is the way 
we need to go. The In-Q-Tel model----
    Mr. Cohen. Yes, sir.
    Mr. Rogers [continuing]. As I understand it leverages 
existing commercial investment as it looks around industry for 
technologies, which translates to minimal government 
investment. In other words, it is not a government operation 
and it does not invest government funds. It goes out and seeks 
out the private sector gizmos and ideas and investment, which 
does not cost the government very much.
    Mr. Cohen. Yes, sir.

                     USE OF COMPANIES LIKE IN-Q-TEL

    Mr. Rogers. And number two, you only have two or three 
people within S&T working on this, as compared to a company 
like In-Q-Tel, and maybe there are others.
    Mr. Cohen. Yes, sir.
    Mr. Rogers. But I guarantee you they are out there, those 
companies who can scour the world with thousands of people at 
little or no cost to you and us, the taxpayers. And more 
importantly, you get all the brilliant ideas that the genius of 
the private sector generates when there is a profit motive 
involved. Is that right or wrong?
    Mr. Cohen. Yes, sir. Well, it is mostly right, sir. The 
facts of life are the solutions come from the private sector.
    Mr. Rogers. Yes.
    Mr. Cohen. And I am involved with thousands of people in 
the private sector.
    Mr. Rogers. Give me one person.
    Mr. Cohen. I am. But you know Mr. Darby? He has a small 
group. As he shared with you, he is a component of the CIA S&T 
Directorate. The Congress I believe has gone forward with 
IARPA, with the Director of National Intelligence, trying to 
have an advanced research project as you did for me with 
Homeland Security Advanced Research Projects now for 
intelligence. So he is one piece of the puzzle.
    In my innovation portfolio, which is 10 percent of my 
budget and I have 20 people in there, solutions come from 
industry, and that is cutting-edge stuff. The facts of life are 
he is in In-Q-Tel, and it is an exciting model, a nonprofit. If 
you are going to deal with venture capitalists, you must bring 
scratch to the table. Now he indicated he brings 10 percent 
scratch. What I bring to the table is the imprimata of the DHS 
logo, and I can tell you that industry gets it. They understand 
this is a growth area. I have Safety Act protection, which you 
have very wisely given me.
    Mr. Rogers. Well, yes. Let us stay on track here and try to 
keep it brief because we are running out of time.
    Mr. Cohen. Yes, sir.

                           THINK-TANK MODELS

    Mr. Rogers. There are two conflicting models here, I think. 
One is a government-operated think-tank, if you will, that 
tries to involve the private sector in solutions that we need.
    Mr. Cohen. Yes, sir.
    Mr. Rogers. And the other model is what I am going to refer 
to as the World War II model where the government says, here 
are the questions we want answered.
    Mr. Cohen. Sure.
    Mr. Rogers. Here are the solutions we need. Can you in the 
private sector help us out? And you had this link between the 
government and the private sector through some nonprofit.
    Mr. Cohen. Yes, sir.
    Mr. Rogers. Those are two different models, and it seems to 
me that as brilliant as you are and as brilliant as Cellucci is 
and as brilliant as the government workers are----
    Mr. Cohen. Sure.
    Mr. Rogers [continuing]. They are no match for the genius 
that exists in the private sector where profit is involved.
    Mr. Cohen. We agree. That is the genius of America.
    Mr. Rogers. Yes. So I wonder if we are taking advantage of 
that enough.
    Mr. Cohen. I will end by saying we have put out, as you 
well know, all of our requirements. This is where in fact 
people have said to me, how dare you put out our shortcomings 
of TSA, of Coast Guard, et cetera? Because I asked for their 
capability gaps. Then we offer them technology solutions from 
industry, from international, U.S. laboratories, universities, 
et cetera, and then they choose and then I resource it. But 
tech solutions, PSITEC, firstresponder.gov, SBIR, Congressman, 
if offline I cannot convince you that we are doing the 
equivalent of In-Q-Tel, then I will help you as you desire 
write whatever legislation you want to give us those added 
enhancements to further, further leverage the model, the 
mobilization board model that you talked about, which was so 
successful in the past.
    Mr. Rogers. Well, I look forward to being convinced. I am 
not yet convinced.
    Mr. Cohen. Yes, sir. I understand.
    Mr. Rogers. I need to be convinced.
    Mr. Cohen. Yes, sir. But I know you have an open mind.
    Mr. Rogers. I have an open mind. But we have also got an 
open sore of money problems.
    Mr. Cohen. Yes, sir.
    Mr. Rogers. And we need the most efficient use of our 
taxpayer dollars to get the biggest bang for our buck, to coin 
a phrase.
    Mr. Cohen. Congressman, I think I have a reputation of 
doing innovation through ``OPM.'' OPM is other people's money. 
And I will go anywhere to make the nation safer.
    Mr. Rogers. All right. Thank you.
    Mr. Price. Thank you, Mr. Undersecretary. We appreciate 
your being here today and appreciate your patience as we went 
through the paces on the House floor, which have now resumed. 
So we must adjourn, but your testimony was very useful. We 
appreciate your service. We look forward to collaborating with 
you as we put the appropriations bill together for next year.
    Mr. Cohen. Sure. And, Chairman, thank you and your hard-
working staff. We appreciate the support very much, and we will 
spend it wisely.
    Mr. Price. The subcommittee is adjourned.

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                           W I T N E S S E S

                              ----------                              --
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                                                                   Page
Atran, Scott.....................................................   557
Bennett, J.E.....................................................   319
Berrick, C.A.....................................................   319
Cohen, Jay.......................................................   557
Connors, Bill....................................................   746
Darby, Christopher...............................................   557
Davis, Rich......................................................   557
Foster, Chad.....................................................    93
Hawley, Kip......................................................   319
Kelley, C.M......................................................   754
Larson, Larry....................................................   735
Millar, W.W......................................................   730
Miller, J.E......................................................    93
Sageman, Marc....................................................   557
Skinner, R.L.....................................................     1
Sterling, P.E....................................................   319
Sullivan, Mark...................................................   197
Walden, N.S......................................................    93
Walden, R.S......................................................    93
Walker, D.M......................................................     1
West, Arvin......................................................    93


                               I N D E X

                              ----------                              --
--------

            Management Challenges--Inspector General and GAO

Opening Statement of Chairman Price..............................     1
Opening Statement of Ranking Member Rogers.......................     1
Statement of David M. Walker, Comptroller General of the United 
  States, U.S. Government Accountability Office..................     3
Statement of Richard L. Skinner, Inspector General, U.S. 
  Department of Homeland Security................................    34
Cooperation from DHS.............................................    60
Management Personnel.............................................    61
FEMA.............................................................    63
Information Sharing Capabilities.................................    64
Involving State and Local Governments in Determining Investment 
  Priorities.....................................................    65
Fusion Centers...................................................    66
Financial Management.............................................    66
Civilian CFO for U.S. Coast Guard................................    69
Ability to Identify and Deport Criminal Aliens...................    69
DHS Transition to the Next Administration........................    71
Human Capital Management.........................................    74
TSA Passenger Surcharge Proposal.................................    75
OIG Budget.......................................................    75
Near Term Performance Soars......................................    77
First Responders.................................................    81
Questions for the Record Submitted by Chairman Price.............    84
Questions for the Record Submitted by the Honorable Sam Farr.....    90
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................    91

                        Land Border Enforcement

Opening Statement of Chairman Price..............................    93
Opening Statement of Ranking Member Rogers.......................    94
Border Fence.....................................................    95
Consultation and Outreach........................................   177
Physical Fence Obstacles.........................................   182
Access to Private Land...........................................   183
Ports of Entry...................................................   185
Insert from the Honorable John Culberson.........................   187

                          U.S. Secret Service

Opening Statement of Chairman Price..............................   197
Opening Statement of Ranking Member Rogers.......................   198
Statement of Mark Sullivan, Director, U.S. Secret Service........   199
2008 Presidential Campaign.......................................   214
DHS Support and Cooperation......................................   216
Costs of Protective Days.........................................   216
Determining When Candidates Receive Protection...................   217
2008 Campaign Protective Days....................................   217
Secret Service Investigations....................................   218
Senator McCain's Protection Status...............................   219
Convention Venues................................................   220
USSS Diversity...................................................   220
Cyber Security...................................................   223
Secret Service Retirement Issues.................................   224
Secret Service Protective Mission................................   225
Conventions......................................................   226
Vice Presidential Protection After Leaving Office................   227
Center for Information Security..................................   228
National Cyber Security Center...................................   230
Cyber Security...................................................   231
Investigative and Protective Workload Balance....................   235
Identity Theft and Vulnerabilities of Technology.................   236
Communication Interoperability...................................   237
Closing Remarks..................................................   238
Questions for the Record Submitted by Chairman Price.............   239
    Management...................................................   239
    U.S. Secret Service Investigations...........................   261
    Staffing and Training........................................   292
    Airspace Security Branch.....................................   298
    White House Mail.............................................   299
    E Street Closure.............................................   301
    White House Locks............................................   301
    Protection for Embassies, Consulates, and Visiting Heads of 
      State......................................................   301
    Asset Forfeiture Fund........................................   304
    U.S. Secret Service Discrimination Lawsuit...................   307
    U.S. Secret Service in Inaugural Parade Route Permitting.....   308
Questions for the Record Submitted by Ranking Member Rogers......   309
    Communications...............................................   309
Questions for the Record Submitted by the Honorable Nita Lowey...   311
Questions for the Record Submitted by the Honorable Robert 
  Aderholt.......................................................   313
Questions for the Record Submitted by the Honorable Chet Edwards.   314
Questions for the Record Submitted by the Honorable John 
  Culberson......................................................   316

        Improving the Efficiency of the Aviation Security System

Opening Statement of Chairman Price..............................   319
Opening Statement of Ranking Member Rogers.......................   321
Statement of Mr. Kip Hawley, Assistant Secretary, Department of 
  Homeland Security, Transportation Security Administration......   322
A Day in the Life at TSA.........................................   322
Improvements in Transportation Security..........................   323
Statement of Ms. Cathleen A. Berrick, Director for Homeland 
  Security and Justice Issues, U.S. Government Accountability 
  Office.........................................................   333
Statement of Mr. James E. Bennett, President and CEO, 
  Metropolitan Washington Airports Authority.....................   385
Statement of Ms. Peggy E. Sterling, Vice President for Safety and 
  Security, American Airlines....................................   398
Airport Passenger Wait Times for Screening.......................   410
Efficiency at Screening Checkpoints..............................   414
Funding for Improved Screening Technology........................   415
Development of Optional In-Line Screening Technology at Airports.   417
TSA's Ability to Adjust Staffing to Accommodate Weather Delays...   417
Air Cargo Screening..............................................   420
Registered Traveler Program......................................   421
Implementation of Process to Meet 100 Percent Air Cargo Screening 
  Mandate........................................................   421
Alternatives Screening for Large Palate Air Cargo Shipments......   423
Challenges to Meeting the Air Cargo Screening Mandate............   425
Certified Shipper Program........................................   426
Responsibility to Fund Air Cargo Screening Program...............   427
Certified Shipper Program Status.................................   428
Airport Employee Screening Program Pilots........................   429
100 Percent for Airport Employees................................   430
Identification Badges for Airport Employees......................   431
Frequency of Airport Employee Screening..........................   432
Intelligence Analysis and Information Sharing....................   433
Model Ports of Entry at Airports.................................   434
Working with Partners to Improve Air Travel......................   435
Checkpoint of the Future.........................................   435
Questions for the Record from Chairman Price.....................   437
    Fiscal Year 2009 Budget Request..............................   437
    Surcharge....................................................   440
    Transportation Security Officers (TSO) Workforce.............   441
    Checkpoint Technologies......................................   444
    Explosive Detection Systems (EDS)............................   447
    EDS and Checkpoint Expenditure Plans.........................   449
    Explosive Detection Systems Maintenance......................   449
    Air Cargo Security...........................................   450
    Blast Resistant Containers...................................   453
    Airport Employee Screening...................................   456
    Aviation Regulation and Other Enforcement....................   457
    Federal Flight Deck Officer and Flight Crew Training.........   458
    Other Vetting Programs.......................................   458
    Secure Flight................................................   459
    Air Crew Screening...........................................   462
    School Bus Security Assessments..............................   462
    Transportation Security Support..............................   464
    Attrition of Senior Level Employees at TSA...................   466
    Hiring.......................................................   467
    Working Capital Fund.........................................   468
    Reception and Representation.................................   468
    Contracts....................................................   468
    Bonuses......................................................   531
    Travel.......................................................   539
    Unobligated Balances.........................................   541
Questions for the Record from Ranking Member Rogers..............   542
    Personnel....................................................   542
    EDS Procurement/Checkpoint Recapitalization..................   542
    Certified Shipper Standards..................................   542
    Passenger Wait Times.........................................   542
    Screening Partnership Program................................   543
Questions for the Record Submitted by the Honorable Nita Lowey...   547
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................   549
    Comprehensive Airport Security...............................   549
    Air Cargo Security Plan for Inbound Cargo....................   550
    Replacement of Carry-On Baggage Screening Equipment..........   550
    Air Cargo Security Exemptions................................   551
Questions for the Record Submitted by the Honorable Sam Farr.....   552
    Intelligence Issues..........................................   552
    Transportation Networks......................................   553
    Model Ports of Entry.........................................   553
    TSA Checkpoints..............................................   554

                  Investing in Science and Technology

Opening Statement of Chairman Price..............................   557
Opening Statement of Ranking Member Rogers.......................   558
Statement of Rich Davis, RTI International.......................   560
Statement of Marc Sageman, RTI International.....................   561
Statement of Scott Atran, RTI International......................   563
Statement of Christopher Darby, CEO, In-Q-Tel....................   565
Impact of Third Wave on Threat of Radicalization.................   567
Example of Third Wave Radicalization.............................   567
Policy Implications of Providing Alternatives to Young People....   568
Understanding Communities........................................   568
Application of Field-Based Work to National Policy...............   569
Adaptation and Application of New Technologies...................   569
Statement of Jay Cohen, Undersecretary for Science and Technology   577
The Four P's.....................................................   577
European Union Partnering........................................   578
Field Research on Radicalization.................................   598
Human-Factors Initiatives........................................   598
Basic Research Tied to Policy....................................   599
Relationships Similar to CIA and In-Q-Tel........................   600
Venture Capitalist Entrepreneur..................................   601
Results..........................................................   601
Cell All.........................................................   601
The Dazzler......................................................   602
Centers of Excellence............................................   602
Funding for Naval Post Graduate School...........................   603
IED Detection Products...........................................   604
Cyber Security...................................................   606
National Cyber Security Initiative...............................   607
Transition Directorate...........................................   608
Use of Companies Like In-Q-Tel...................................   608
Think-Tank Models................................................   609
Questions for the Record from Chairman Price.....................   611
    BioWatch.....................................................   611
    Regional Bio Containment Laboratories (RBL)..................   612
    Chemical Programs............................................   613
    Counter MANPADS..............................................   614
    Explosives...................................................   618
    Manhattan II.................................................   620
    Air Cargo....................................................   621
    FFRDC........................................................   623
    National Bio Agro-Defense Facility...........................   624
    Authorities Necessary to Build and Operate NBAF in the 
      Continental United States..................................   626
    Sale of Plum Island..........................................   627
    Pacific Northwest National Laboratory........................   628
    Transportation Security Laboratory...........................   628
    Unobligated Balances.........................................   631
    FY 2007......................................................   633
    Infrastructure and Geophysical...............................   634
    Reception and Representation.................................   637
    Staffing.....................................................   637
    Contracting..................................................   653
    Broad Agency Announcements...................................   678
    University Centers of Excellence.............................   679
    Fellowships..................................................   681
    Test and Evaluations.........................................   682
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................   684
    Centers of Excellence........................................   684
    Dissemination of ST Directorate Research Results.............   685
    Audible Tsunami Warning Systems..............................   686
Questions for the Record Submitted by the Honorable Sam Farr.....   687
Questions for the Record Submitted by the Honorable Kay Granger..   692

Questions for the Record Submitted by Chairman Price to the Federal Law 
                      Enforcement Training Center

Questions for the Record from Chairman Price.....................   693
    Workload.....................................................   693
    Technology Initiatives.......................................   695
    Construction.................................................   696
    Management...................................................   696
    Contracts....................................................   702

                       Outside Witness Testimony

Outside Witness Testimony........................................   715
    American Association of Exporters and Importers..............   716
    American Public Transportation Association...................   730
    Association of State Floodplain Managers.....................   735
    National Association of Manufacturers........................   738
    National Business Travel Association.........................   746
    National Congress of American Indians........................   747
    National Treasury Employees Union............................   754