[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
                                ________


Printed for the use of the Committee on Appropriations 


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                    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 3

                     DEPARTMENT OF HOMELAND SECURITY
                                                                   Page
 Addressing the Challenges of Protecting the Nation's Physical and 
Cyber Infrastructure..............................................    1
 Border Security Programs and Operations--Challenges and 
Priorities........................................................   88
 Cargo Container and Supply Chain Security........................  372
 Coast Guard 2009 Budget on Maritime Safety, Security, and 
Environmental Protection..........................................  582

                                ________



                     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., Alabama     ROBERT B. ADERHOLT, Alabama        
 PATRICK J. KENNEDY, Rhode Island           JO ANN EMERSON, Missouri       
 MAURICE D. HINCHEY, New York               KAY GRANGER, Texas      
 LUCILLE ROYBAL-ALLARD, California          JOHN E. PETERSON, Pennsylvania           
 SAM FARR, California                       VIRGIL H. GOODE, Jr., Virginia             
 JESSE L. JACKSON, Jr., Illinois            RAY LaHOOD, Illinois                   
 CAROLYN C. KILPATRICK, Michigan            DAVE WELDON, Florida      
 ALLEN BOYD, Florida                        MICHAEL K. SIMPSON, Idaho
 CHAKA FATTAH, Pennsylvania                 JOHN ABNEY CULBERSON, Texas        
 STEVEN R. ROTHMAN, New Jersey              MARK STEVEN KIRK, Illinois       
 SANFORD D. BISHOP, Jr., Georgia            ANDER CRENSHAW, Florida            
 MARION BERRY, Arkansas                     DENNIS R. REHBERG, Montana 
 BARBARA LEE, California                    JOHN R. CARTER, Texas       
 TOM UDALL, New Mexico                      RODNEY ALEXANDER, Louisiana        
 ADAM SCHIFF, California                    KEN CALVERT, California    
 MICHAEL HONDA, California                  JO BONNER, Alabama       
 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

                                  ----------

                                            Tuesday, April 1, 2008.

ADDRESSING THE CHALLENGES OF PROTECTING THE NATION'S PHYSICAL AND CYBER 

                             INFRASTRUCTURE

                               WITNESSES

ROBERT JAMISON, UNDER SECRETARY FOR THE NATIONAL PROTECTION AND 
    PROGRAMS DIRECTORATE
ROBERT STEPHAN, ASSISTANT SECRETARY FOR INFRASTRUCTURE PROTECTION
GREGORY GARCIA, ASSISTANT SECRETARY FOR CYBERSECURITY AND 
    COMMUNICATIONS
    Mr. Price. The subcommittee will come to order. We want to 
welcome to this afternoon's hearing three witnesses, Robert 
Jamison, the Under Secretary for the National Protection and 
Programs Directorate at the Department of Homeland Security, 
Robert Stephan, the Assistant Secretary for Infrastructure 
Protection, and Gregory Garcia, the Assistant Secretary for 
Cybersecurity and Communications. Gentlemen, we welcome all of 
you and we appreciate your being here.

                  Opening Statement of Chairman Price

    Today, we are going to be discussing the Department's 
approach to protecting our nation's critical infrastructure, 
physical assets, such as ports, chemical plants, and nuclear 
facilities, as well as the servers and computer networks that 
make up the cyber infrastructure upon which our society 
increasingly relies. Given the vast diversity of our nation's 
key assets, more than 80 percent of which are privately owned, 
the National Protection and Programs Directorate, or NPPD, uses 
a broad range of programs, relationships, and authorities to 
protect against attacks on our nation's infrastructure and to 
reduce the impact of any catastrophes that may occur. While the 
NPPD's budget also includes the US-VISIT program, we have 
already had a US-VISIT hearing a couple of weeks ago, so in 
this hearing today, we are going to focus on the infrastructure 
protection and cybersecurity and emergency communications 
responsibilities that round out NPPD's portfolio.
    Excluding funding for the US-VISIT program, which is part 
of NPPD but has no direct impact on the security of the 
nation's infrastructure, the 2009 budget for the agency is 
$895.8 million. That is an increase of $193.7 million over the 
2008 enacted level. Since this increase includes a $34.5 
million transfer of the LORAN radio navigation system from the 
Coast Guard budget to NPPD, the net budgetary growth at NPPD is 
roughly $160 million over 2008, still a sizable increase, 
something like 23 percent. Nearly all of this proposed increase 
goes to two programs in the Cybersecurity and Communications 
Division. The budget proposes that the National Security and 
Emergency Preparedness Telecommunications program grow by more 
than $100 million or 74 percent over the 2008 enacted level. 
The funding for the administration's Cybersecurity initiative 
increases by more than $83 million in the 2009 budget or 39 
percent over the 2008 enacted level, to nearly $300 million for 
the year. This is on top of a 2008 appropriation that was 
already 128 percent more than had been provided in 2007, 
meaning that cybersecurity funds in 2009 will be more than 
triple the level just two years before.
    These increases for cybersecurity and communications are 
all the more notable, because the budget proposes that overall 
spending at the department grow less than one percent in 2009. 
We need a thorough understanding of why these programs, in 
particular, merit the large increases that have been proposed 
and we look forward to discussing that with you today.
    The budget for infrastructure protection does not fare 
nearly as well as cybersecurity and communications, increasing 
by only $204,000 or less than one-tenth of one percent, to a 
total funding level of $272.8 million. We want to ask today is 
such austerity merited for infrastructure protection. This 
division has important responsibilities for securing the 
nation's chemical facilities, managing relationships with 
participants in the national infrastructure protection plan, 
and modeling the consequences of disasters, both natural and 
manmade, so that emergency managers can better develop response 
plans and policies. As part of the 2008 Appropriations Act, 
infrastructure protection also received significant new 
authority to regulate the chemical ammonium nitrate. I would 
like to know whether this budget is adequate for managing the 
current infrastructure protection workload while also 
implementing these new regulatory responsibilities.
    We are also interested in work being done at NPPD's 
consolidated risk management analysis office, which has 
responsibility for coordinating DHS-wide risk policy and 
developing a consistent risk analysis framework for the entire 
department. We have heard from many outside witnesses about the 
importance of risk analysis, both to inform resource allocation 
and to measure programmatic results. We are eager to hear about 
the progress this office is making and the plans for it in 
2009.
    Under Secretary Jamison, I would also like to discuss your 
goals for NPPD over the coming year. As we all know, NPPD is 
the latest product of several programmatic reorganizations 
carried out since the creation of DHS. Whoever takes charge in 
2009 needs to be able to rely on NPPD to help protect the 
country's vast infrastructure and we need to make sure that on 
January 29, 2009, the next president will have a highly 
functional organization, helping protect our country.
    We have your written statement, Mr. Under Secretary, so I 
will ask you to summarize your testimony in five minutes or so, 
so that we have adequate time for members' questions. Before 
that, let me turn to ranking member Harold Rogers for his 
remarks.

               Opening Statement of Ranking Member Rogers

    Mr. Rogers. Thank you, Mr. Chairman. Welcome, gentlemen. 
Today, we are here to discuss what many view as one of the most 
fundamental missions of DHS, to protect our nation's critical 
infrastructure, key resources, vital systems from attack or 
sabotage. From powerplants, to communications systems, to 
chemical facilities, to cyber networks, it is the National 
Protection and Programs Directorate, NPPD, that is charged with 
both the protection and risk mitigation of critical 
infrastructure that keeps commerce moving, powers our homes, 
fuels American innovation. And in spite of this critical 
mission, it is the components that make up NPPD that have 
undergone what are perhaps some of the most turbulent 
reorganizations and changes since DHS was stood up some five 
plus years ago.
    So, as NPPD enters only its second year of stability within 
its own organization, we have a new leader at its helm, Under 
Secretary Jamison. While I have heard you hit the ground 
running in just your first few months on the job, I am 
especially interested to hear about your instilling the core 
processes and staffing that will enable the agency to meet its 
vast and challenging mission, as well as withstand the coming 
turnover in administrations.
    A familiar face is here with us, Assistant Secretary 
Stephan. Between your time at the Executive Office of the 
President and DHS, you have been at this chore of 
infrastructure protection for over five years now. And while I 
am sure you have endured your share of frustrations, I am 
equally confident that you can share with the subcommittee the 
tremendous progress made in addressing the risks posed to our 
nation's critical infrastructure sectors.
    DHS was not necessarily envisioned to be a regulatory body, 
but that responsibility has largely evolved under your watch, 
as you strive to implement the newly crafted chemical facility 
regulations.
    And finally to Assistant Secretary Garcia, you bear the 
responsibility for securing what is perhaps the most dynamic 
and most challenging infrastructure, cyber and communications 
networks. There has been a lot of recent activity in terms of 
the constantly shifting and intensifying threats confronting 
our cyber systems, threats which are emanating from both state 
and non-state actors. I can only hope that we are moving 
swiftly enough to keep up with them.
    Just over a week ago, the administration announced the 
establishment of a new interagency group to oversee cyber 
attack defense. Secretary Chertoff also has recently appointed 
the first director of the National Cybersecurity Center, a new 
DHS lead initiative tasked with a vital mission, but one with a 
yet to be defined plan for its implementation. I am hopeful we 
can ascertain some unclassified details about that initiative, 
as I see it directly related to NPPD's cybersecurity mission 
and obviously critical to our homeland security.
    Under Secretary Jamison, as you may have heard me say 
before, I subscribe to the old adage, plan your work, work your 
plan. Today, we are hopeful we can hear your plan for taking 
NPPD from what was a conceptual merger of vital tasks to a 
robust functional organization that can step up and adapt to 
the constantly changing threats facing our nation's critical 
infrastructure and key resources. Further, given that the vast 
amount of critical infrastructure in the country is owned by 
the private sector, we would like to hear how you are 
leveraging support within that community, to ensure our safety 
and our way of life.
    We all know the stakes. You know our expectations. Major 
funding demands major planning and it is up to you to show us 
how the 2009 budget request will move you forward on a plan 
that achieves real results. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Jamison, please proceed.

   Statement of Mr. Robert Jamison, Under Secretary for the National 
  Protection and Programs Directorate, Department of Homeland Security

    Mr. Jamison. Good afternoon, Chairman Price, ranking member 
Rogers and members of the subcommittee. Thank you for the 
opportunity to appear before you today to discuss the work of 
NPPD, the progress we have made over the past year, and how the 
President's budget request for fiscal year 2009 will position 
us to fulfill a key role for the Department in its mission to 
protect the nation. Both the Chairman and the ranking member 
have expressed a desire to hear my goals for the organization. 
Since I arrived at NPPD, we have focused on three priorities: 
hiring and retaining talent for critical positions, 
strengthening the Directorate's business processes, and 
advancing our key programmatic areas. At the top of our 
programmatic list are the implementation of the chemical 
security regulations, bolstering the nation's cybersecurity, 
and developing a comprehensive biometric air exit solution. We 
are making substantial progress in these areas, and you will 
see that these focused areas are reflected in the fiscal year 
2009 budget request at $1.286 billion.
    Attaining our staffing levels and ensuring that staff are 
appropriately matched to the challenges and responsibilities 
facing them is a top priority. We have standardized our hiring 
process and expanded our options for getting talent on board. 
Through process engineering and focused management, we have 
reduced our time to move from the hire phase of the hiring 
process to extending a tentative offer by 45 percent, from 116 
days to 63 days. We have also expanded the use of our other 
important programs, such as the Presidential Management 
Fellows, the DHS Policy Fellows, and Cyber Scholars, to bring 
quality individuals into all levels of the NPPD organization.
    We continue to review and evaluate our federal-to-
contractor staff ratio in key functions to ensure we have the 
stability and are prepared for a transition. We are several 
steps along the path to convert 107 contract positions to 
government employees and have identified approximately 120 
additional positions for conversion.
    As we grow our programs and ramp up our staffing levels to 
accomplish our mission, NPPD must bolster its infrastructure, 
putting in place reliable internal structures and robust 
business processes. To address this need, the directorate 
administration budget request is $43 million and 78 positions, 
for an increase over fiscal year 2008 of $5.2 million and 24 
positions.
    Advancing our programmatic mission in fiscal year 2009 
includes two top priorities. The first, further implementation 
of CFATS, or the Chemical Facility Antiterrorism Standards, has 
included in the past year the release of the CFATS interim 
final rule, which imposes for the first time comprehensive 
federal security regulations for high-risk facilities. In 
fiscal year 2009, the President's budget will expand an 
inspection cadre to drive compliance efforts, secure operation 
and maintenance of the Chemical Security Assessment Tool 
system, and establish a permanent adjudications capability. The 
increase is $13 million over fiscal year 2008 appropriated 
funding of $50 million, for a total of $63 million.
    Cyber threats are real and growing and cybersecurity is one 
of the Secretary's top priorities. NPPD improved cybersecurity 
situational awareness in the past year by deploying an 
additional 39 EINSTEIN sensors at federal agencies, but we must 
do more. The Directorate is also leading parts of an 
interagency effort to secure the .gov network by consolidating 
access points, expanding intrusion detection capabilities, and 
improving our response capabilities. The fiscal year 2009 
request for NCSD, which handles these programs, is $293.5 
million, an increase of $83.1 million.
    The Office of Intergovernmental Programs spearheads the 
Department's outreach and coordination of the Secretary's goals 
with our security partners across the nation. The Office of 
Risk Management Analysis plays a leading role in establishing 
the department's integrated risk framework, which underpins a 
full spectrum of homeland security activities. These mission 
areas are reflected as a priority in the budget request with $2 
million for IGP and $9.5 million for RMA.
    In conclusion, as we continue the critical work in NPPD, we 
know that we will be successful only by focusing on building an 
outcome-based performance culture. I am proud of the steps that 
we have taken along this path and I am confident that the 
President's budget well positions NPPD for the future. I 
appreciate the opportunity today to discuss our accomplishments 
and our plans for fiscal year 2009. NPPD has a broad and 
diverse programmatic portfolio and I have only highlighted a 
piece of that portfolio for you in this statement. However, I 
am pleased to be joined by Assistant Secretary Stephan and 
Assistant Secretary Garcia and will be happy to answer more of 
your programmatic questions. Thank you.

    [The information follows:]

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               ADMINISTRATION'S CYBERSECURITY INITIATIVE

    Mr. Price. Thank you for that statement and we are glad to 
have all of you here. Let us proceed with questions. I will 
turn first to the area of cybersecurity. Last April and May, 
the country of Estonia was overwhelmed by a massive attack, a 
so-called distributed denial of service attack that essentially 
shut down that country's electronic networks. This past summer, 
the Pentagon announced that it had to disable 1,500 e-mail 
accounts because its networks had been compromised by hackers 
who some media reports connected to the Chinese government. In 
November, we received a last minute budget amendment requesting 
$115 million for DHS to help protect the government's computer 
networks from cyber attacks and infiltration by foreign agents. 
The 2009 budget increases this funding by an additional $83 
million. I am glad to see that the department and the 
administration are taking this cyber threat seriously, because 
action had languished on this issue after Richard Clarke left 
the White House. But now we must be on the case. Not only must 
we make government networks, both classified and unclassified, 
more secure, but we have got to ensure the security of networks 
used by government contractors, who hold critical information.
    DHS is the coordinator of this cybersecurity effort, but 
there are some confusions, perhaps some questions that I hope 
you can address. Let me just briefly indicate three.
    Mr. Garcia, I understand your title is Assistant Secretary 
for Cybersecurity and Communications. But I also understand 
that DHS has recently announced the creation of a new position, 
the Director of the National Cybersecurity Center, who will be 
responsible for ``coordinating cybersecurity efforts and 
improving situational awareness and information sharing across 
the federal government.'' I am not sure how your job 
description differs from that, but it does raise the issue, who 
is in charge of this initiative?
    Second question--and these are broad questions, so perhaps 
you can parcel out the answers. Given the nearly unprecedented 
growth of the cybersecurity budget, which has tripled in two 
years, what priorities and accomplishments have you planned for 
yourself this year and in 2009 to allocate these funds wisely?
    And third, the question of privacy. The resources we are 
putting into cybersecurity will be used to expand the federal 
government's ability to monitor traffic that travels in and out 
of its computer networks. Government networks will be 
reconfigured to funnel traffic through a fewer number of 
connections to the Internet. So, as you are well aware, privacy 
advocates have raised concerns that this kind of monitoring 
system could be abused. It could be misused to capture the 
contents of this network traffic, enabling DHS analysts to 
review the contents of e-mail messages or personal files. So, 
let me just ask you outright, will DHS personnel be reviewing 
the content of messages or other information collected by the 
network monitoring system or under what possible circumstances 
would they do so and what kind of protections and limitations 
can we count on?
    Mr. Under Secretary, maybe you can begin, but those are my 
three questions about this initiative.
    Mr. Jamison. Thank you, Mr. Chairman. I will take a shot at 
all three of those and I will ask Greg to fill in where 
appropriate, to give more detail. But first of all, I will try 
to walk the balance. As you know, many parts of this initiative 
are classified. We would be very happy to give you a full 
classified briefing or have a classified session. But, I will 
try to walk you through the parts that are unclassified and 
talk to the issue.

                   THE NATIONAL CYBERSECURITY CENTER

    First of all, you mention the confusion or perceived 
confusion over the Director of the National Cybersecurity 
Center and Greg Garcia's position. Let me take a little step 
back and tell you one of the underpinnings of what we are 
trying to accomplish. One of the underpinnings is the .gov 
network, and Greg has the responsibility for defense of the 
.gov network, as well as the lead role in the protection of 
critical infrastructure and how we deal with the private 
sector, in his role at DHS.
    One of the things that we are trying to do with the 
cybersecurity initiative is position the network to be in a 
more defensible position. So, right now, we have thousands of 
Internet access points. We are trying to consolidate those 
Internet access points down and we are trying to move from a 
system where we analyze for flow analysis a very small 
percentage of the .gov traffic to where we actually look for 
intrusions in real time, intrusions with malicious signatures. 
And the biggest piece of that effort is to give us 
comprehensive situational awareness of what is going on in the 
.gov domain. I would be happy to talk you through more of the 
details on that, but therein lies the issue of why this is an 
interagency effort.
    There are many agencies across the federal government that 
have cybersecurity responsibilities. It is a cross-cutting 
issue. So, DOD has responsibility for defense of the DOD 
network. NSA has responsibilities. FBI and other law 
enforcement agencies have responsibilities. The role of the 
Center is to coordinate all of that information to give us more 
comprehensive situational awareness and to make sure that we 
are leveraging resources across the government more 
effectively. Greg's role, as I mentioned earlier, is for the 
defense of that network, the .gov network and for protection of 
critical infrastructure in the cyber domain. So, that 
delineates a little bit of it.

              INCREASED FUNDING FOR CYBERSECURITY EFFORTS

    You mentioned what are we going to do with the money and we 
have tripled our budget moving from 2007, to 2008, to 2009. 
That is very well the case. Right now, we, as I mentioned, have 
EINSTEIN capability that is doing flow analysis on a very, very 
small percentage of .gov traffic. We are going to move to real-
time intrusion over the next two years with the goal of 100 
percent of that .gov traffic which, in essence, is providing 
commercial intrusion detection capability, the capability that 
most of the agencies currently have. What we are doing is 
making sure that it is comprehensive at every Internet access 
point, making sure it is consistent, and making sure it is 
informed with the latest threat information that we have from 
the federal government, and that is the important part.
    Much of the money that we have got is to deploy those 
sensors, to procure the facilities, to house the staff that is 
going to be required to do the analysis on the information, to 
build our response capabilities, to build our analytical teams 
that will have to analyze and respond to the intrusion 
activity, and to build the support networks to help the other 
federal government agencies respond to the threat.

                         PRIVACY CONSIDERATIONS

    And, finally, and most importantly, privacy. Privacy is the 
top priority as we embark on this mission. And I will say that 
currently, we have a privacy impact assessment for our current 
EINSTEIN capability. As we move to the next generation of 
intrusion detection, we are going to do a full privacy 
assessment that involves our privacy personnel, as well as our 
civil rights personnel, from the outset of this program.
    But, what we are talking about looking forward and to your 
question about what will our additional capabilities be, we 
plan over the next year to deploy commercialized intrusion 
detection capabilities that can detect malicious code and that 
is what we are looking for, those signatures of malicious 
activity, and that is the only thing--the ones and zeros--that 
that equipment will be looking for. If we do have a detection 
of that type, the equipment will send an alert to both the 
agency that is affected and US-CERT. But privacy is the top 
concern. The privacy impact assessment and planning the process 
is going to be something that we make sure we do before 
implementing any of these programs.
    Mr. Price. Mr. Garcia, do you have anything you would like 
to add on any of these points?
    Mr. Garcia. Yes, just a couple of amplifications on the 
issue of the Center. Under Secretary Jamison said it right, 
that the Office of Cybersecurity and Communications has a 
broader national role, to include cybersecurity but also 
communications, our communications infrastructure and our 
emergency communications and interoperable communications. And 
among those three major mission areas is a common thread, and 
that thread is really a technological convergence that is 
taking place.
    When we talk about security, we are also talking about 
availability. And when we talk about availability, we are also 
talking about security. So the mission is much larger than the 
National Cybersecurity Center, which, as the Under Secretary 
said, is a coordinating role, not an operational role. The 
operational role exists within my organization, that is the 
U.S. Computer Emergency Readiness Team, the US-CERT, nor does 
the Center have directive authority. It is one that coordinates 
and brings all of the stakeholders together in the federal 
government to ensure, as the Under Secretary said, that we have 
that situational awareness.
    And the final point that I would make is where we are today 
in this cyber initiative is partly a result of the success we 
have in the situational awareness development over the past 
several years using the EINSTEIN technology that the Under 
Secretary referred to, which is a way to monitor flow of data, 
network flow. What we have seen over the past two or three 
years in our ability to share that information across the 
federal government and the private sector is indeed an 
evolution of the threats facing our cyber and communications 
infrastructure, more sophistication and more targeted. So, it 
was because of our ability to see and to expand our deployment 
of that EINSTEIN capability that we began to see how impressive 
this threat has been and formidable and, hence, our desire now 
to accelerate our situational awareness and protection efforts 
and to automate it. And that is where we are today.

                        PRIVACY IMPACT ANALYSIS

    Mr. Price. Thank you. Mr. Under Secretary, I understand you 
say that the privacy impact analysis is a work ongoing and that 
presumably these privacy protections and concerns are being 
built into the system as you go. The actual release of this 
will come about when?
    Mr. Jamison. I do not know the exact release date. It is in 
the final stages of development. It has a process, as you know, 
that we have to go through to get it out. It will release well 
before we deploy the first of the next generation EINSTEIN 
sensors. We anticipate in the coming weeks, though.
    Mr. Price. Coming weeks, sometime this spring?
    Mr. Jamison. Yes, sir.
    Mr. Price. All right. Thank you. Mr. Rogers.

         DHS ROLE RELATIVE TO THE NATIONAL CYBERSECURITY CENTER

    Mr. Rogers. Assistant Secretary Garcia, why do we need this 
new office the President has announced? Are you not capable of 
doing what that office would do?
    Mr. Jamison. Let me take the first stab and then I will let 
the Assistant Secretary jump in. One of the biggest issues is 
making sure that we leverage all the capabilities that we have 
in the federal government and make sure we leverage situational 
awareness. So, it is very important that one of the first 
products that we wanted to deliver to our customers at the 
federal agencies is better situational awareness and it is 
going to be greater enhanced with us having situational 
awareness across the whole .gov network. But, we also need to 
know the attack vectors that are in the military networks, the 
attack vectors that other partners might see overseas. So, that 
is really the big intention, is to consolidate that information 
and to give it to the people that have responsibilities for the 
defense of those individual networks, like in our case, the 
.gov networks and critical infrastructure, so we can help 
better defend with our systems.
    Mr. Rogers. So, this new office the President is proposing 
is a government-wide office?
    Mr. Jamison. Correct. It will have coordination 
responsibilities across the domain of cybersecurity for all the 
federal agencies that have a role.
    Mr. Rogers. And Secretary Garcia is just within DHS?
    Mr. Jamison. Correct.
    Mr. Rogers. So, the new office the President is talking 
about, then, would be the one that would coordinate what you 
are doing with what DOD is doing and everybody else, is that 
right?
    Mr. Jamison. Correct, correct. And we are starting to tread 
into some of the classified portions. We are getting close to 
the line. So, I would be happy to give a full briefing in a 
classified session that breaks out which of the areas that we 
think are going to be included in that Center.
    Mr. Rogers. You know, this hearing probably ought to be a 
closed hearing, so we could get into some of the weeds that we 
are talking about here. But, that will be another day, I guess.
    Your role, particularly that in cybersecurity, and this 
role of DHS frankly tests the ability of legislators to 
properly oversee perhaps the most complicated, most obscure 
piece of homeland security, that is the cyberspace especially, 
but also the other pieces of physical infrastructure that the 
department has to oversee. So, we need as much elucidation on 
these things as you can give us in the language that we speak, 
which is somewhat of a different language than yours. But, I 
wanted to talk to you briefly about, Mr. Secretary, the 
staffing at your agency.

                            STAFFING OF NPPD

    When you took over in November 2007, you realized you had a 
little over a year to turn what was a fledgling organization 
into a cohesive and functional departmental component. And one 
of your top priorities has been to improve the staffing. But, 
at this date in time, you are only 71 percent staffed in NPPD 
and only 55 percent staffed in management and administration. 
Where are we and how come?
    Mr. Jamison. We do have a lot of work to do, I will be the 
first to admit that. I do think we have made a lot of progress, 
though. As I mentioned earlier, we have broken down a process 
analysis on the whole process. I think you look at the numbers, 
we have currently 330 vacancies. But out of those 330 
vacancies, well over 200, almost approaching 250, of those 
vacancies were new additions in the fiscal year 2008 budget. 
So, as we were trying to build our infrastructure and set us up 
for existing operations, as you well point out, we are growing 
rapidly, as well.
    In addition to focusing on every aspect in the metrics 
evaluation of exactly how long it takes to process every piece 
of the pipeline, we have also tried to ramp up our efforts to 
recruit from other types of programs. Out of those 330 
vacancies, 200 of those vacancies--or 207, I believe, I will 
get you the exact number for the record, are in the late stages 
of selection. So, we have made substantial progress. We have a 
long way to go. It is something that we focus on daily. My 
deputy or I spend 15 minutes to 30 minutes on this issue every 
day to make sure we are following the process. And I firmly 
believe, as you point out, that if we do not get the people on 
board to execute the missions, not only will we not accomplish 
what we are trying to do from a mission standpoint, but we are 
in jeopardy for a transition. So, we make it a top priority. 
That is also why we have taken on the conversion issue and have 
107 positions that are close to be converting from contractor 
positions to federal government, to give us the stability to 
position ourselves for the future.
    [The information follows:]

    Question. What is the exact number of vacancies that are in the 
late stages of selection?
    Answer. On April 1, when the Under Secretary testified, NPPD had 
330 vacancies. Of these vacancies, announcements have closed on 214.

                             CYBER THREATS

    Mr. Rogers. What can you tell us about the cyber threats 
that is unclassified?
    Mr. Garcia. Mr. Congressman, as I mentioned earlier, the 
cyber threats are evolving in many different ways. We are 
seeing an increasing level of sophistication whether from 
hackers or hacktivists, those hackers with the political 
motivations, organized crime, or nation states. We are seeing 
it in a variety of forms that are targeting websites and 
individuals. I think one of the most prevalent forms of attack 
we see are phishing attempts, which are e-mails that go to your 
in-box, coaxing you to open it or open an attachment or to go 
to a website, which may be infected, that would then download 
malicious code onto your computer, which in an enterprise could 
be spread throughout the enterprise network. We are seeing 
these evolve constantly, which is why we are looking to a 
dramatically increased amount of resources to be able to see 
into the networks and see what kinds of malicious code are 
repeating themselves and patterns and how they are attacking, 
where they are coming from and where they are going to.
    Mr. Rogers. Now, what about incoming attacks seeking 
information from us?
    Mr. Garcia. That is part of the mix. There are a number of 
different intentions that cyber attacks can have. One is to 
steal information, whether it is information from the 
government, whether it is intellectual property from a major 
company. There is intention to flood--we have mentioned the 
denial of service attack on Estonia. There are intentions to 
flood websites with requests, which cause a website to go down. 
That is a denial of service attack. There are other types of 
attacks that would create bogus websites of well-known name 
websites. There are ways to disrupt communications, disrupt 
information flow, many different forms of attack.
    Mr. Rogers. Where are these attacks coming from?
    Mr. Garcia. They are coming from all over the world. The 
Internet knows no borders nor do cyber attacks.
    Mr. Rogers. Does it come from individuals or states?
    Mr. Garcia. It is coming from all different types of actors 
and some of them are very hard to track down. There is a common 
threat called a bot-net, which is essentially a network of 
hijacked computers, worldwide computers that can be hijacked 
from anywhere around the world. So, tracing back to where the 
original attacker is sitting is a very difficult thing to do.
    Mr. Rogers. But, you are determined that some of them are 
coming from state facilities?
    Mr. Garcia. In this room, I can only go so far as to say 
where we are--where we think some of these are coming from. But 
to say that an attack is coming from a computer in a particular 
state or a particular country is not necessarily saying that 
that attack--that the attacker is actually in that state or 
country.
    Mr. Jamison. Mr. Congressman, we welcome the opportunity to 
come up and give you a detailed briefing in a classified 
setting. It can get to a lot of the issues that you are 
raising. We have got a lot of information to share with you 
there.
    Mr. Rogers. Good. Okay, thank you.
    Mr. Price. Let me just say that the next briefing from the 
DHS intelligence chief and executive session is--we have asked 
him to focus on this matter and that will occur very shortly. 
Mr. Rodriguez?

                        CYBER SECURITY EXERCISES

    Mr. Rodriguez. Thank you very much. Let me ask you, since 
the formation of the department, how many exercises on 
cybersecurity have we conducted?
    Mr. Garcia. We have conducted two. We just completed----
    Mr. Rodriguez. Two?
    Mr. Garcia. Two.
    Mr. Rodriguez. Since the formation of the department?
    Mr. Garcia. Yes, for specifically cyber. Now, we have had 
other table top exercises and Top Officials Exercises.
    Mr. Rodriguez. Those two that you conducted, how many--
basically with the agency, itself? Or nationwide? Or what----
    Mr. Garcia. Yes. Cyber Storm II just occurred last month. 
We are very proud of that. That was an international exercise. 
It involved, I believe, five countries, nine states, 40 
companies, I think 12 federal agencies. So, it was a 
multifaceted, multi-player cyber exercise that lasted for a 
week, testing our ability to share information and to 
coordinate response against a number of scenarios, fictional 
scenarios attacking different aspects of our infrastructure, 
whether it is federal government sites or whether it is certain 
critical infrastructures like the chemical sector, 
transportation, financial services, et cetera.
    Mr. Rodriguez. Any of them dealt with states or local, in 
terms of trying to get our--we always talk about the first 
responders being the local people responding to a problem. And 
this could also be very similar where the ones who are going to 
get hit is locally. The attempt on the--the attack on 9/11 was 
also to hit the private sector. How much are we reaching out, 
in terms of both those state types of approaches and local?
    Mr. Garcia. We are absolutely reaching out. In fact, the 
State of Texas was one of the players out of the nine states, 
who participated. We have among our priorities building up the 
relationships with the states and their capabilities at cyber 
protection. We work with an organization called the Multi-State 
ISAC, which is an information sharing and analysis center. So, 
they played in this exercise, as well.
    Mr. Rodriguez. As you move to form this cyber security 
center, who is going to be in control of that?
    Mr. Garcia. We will continue to be in control of the cyber 
security center.
    Mr. Rodriguez. So, you are going to allow the Department of 
Defense to come in, NSA, and all the others to participate?
    Mr. Garcia. That is correct.
    Mr. Rodriguez. And the Department of Homeland Security is 
going to be in control of that?
    Mr. Garcia. That is correct. And, in fact, we are beginning 
the process of planning Cyber Storm III, which we would expect 
to be sometime in 2010.
    Mr. Rodriguez. Okay.
    Mr. Garcia. So, we have--go ahead.
    Mr. Jamison. Those agencies did participate in Cyber Storm 
II, as well, and DHS was the lead coordination agency in Cyber 
Storm II. So, that does not change with the evolution of the--
--

          STATE AND LOCAL INCLUSION IN CYBERSECURITY EXERCISES

    Mr. Rodriguez. And I would just ask you to go and look back 
on also strengthening our local states and communities. I had 
been on the task force on the threat before 9/11, when I served 
eight years on the Armed Services Committee. We did dark 
screen, one of the first exercises from a local perspective and 
got the local communities engaged and how critical that is and 
also in terms of getting the private sector engaged, especially 
since the private sector a lot of times do not want to talk 
about how many times they have been hit, because of their 
concerns about resources and that kind of thing. And somehow, 
we have got to make the leap.
    The only thing I would follow up with what our minority 
leader talked about, in terms of creating another center, where 
you create another bureaucratic system where you are less 
likely to get access to information for operating and 
responding. And so how you structure that, I would ask you to 
take some time looking at that, as you form a center for 
coordinating those efforts. Because, I know DOD has some and 
other centers have them and that has only gotten worse through 
time, in terms of--worse, I mean in terms of the number of 
hits. Back when I was there in 1997, it was less than a 
thousand hits a day and now, I mean, that supposedly has jumped 
into the millions of hits, just on the Pentagon. And so--and 
the Department of Defense. And so, that is one of the areas, I 
think, that we--we have always felt that that was one of the 
highest areas that we would get hit first before anything else. 
So, how we are in touch with local communities and states is 
essential. And so, I wanted to stress the importance of kind of 
doing those exercises, kind of look at that and help educate.

                        QUALIFIED STAFF FOR NPPD

    Now, from the perspective in terms of the staffing that is 
needed, and I do not know where we are right now. I know we 
found that we did not have--realized we did not have the 
qualified staff. Are we doing anything in there to make sure we 
have pretty good staffing, as it deals with cybersecurity?
    Mr. Garcia. Absolutely, sir. We have, in fact, highly 
qualified staff across the National Cybersecurity Division and 
the U.S. Computer Emergency Readiness Team, US-CERT. These are 
highly dedicated people, who are working long hours and 
sacrificing family life for this mission. So, I am quite proud 
of their accomplishments, particularly with the Cyber Storm II 
process, which literally was round the clock. It was 24/7, 
because it was international and involved our partners 
overseas. So, they dedicated an extraordinary amount of time, 
18 months to prepare and plan for Cyber Storm II, 18 months for 
just one week of activity. So, I think as the Under Secretary 
said, our highest priority now is to bring in top people to 
fill the vacancies that we have, so that we have a very strong 
team in place for transition into the next administration.
    Mr. Rodriguez. Thank you.
    Mr. Price. Thank you. Mr. Fattah.

                 INTERNET CABLE CUTS AND SURVIVABILITY

    Mr. Fattah. Thank you, Mr. Chairman. I want to focus on the 
physical infrastructure. There have been reports that some of 
the Internet infrastructure on locations have been attacked and 
had been made non-usable for some reason in a number of 
countries. Is that accurate?
    Mr. Jamison. There have been some well-documented cases and 
the source of some legitimate cable cuts from maritime traffic 
that have caused severe interruptions in India and some other 
parts of the world.
    Mr. Fattah. Se we are convinced that this is just normal 
maritime traffic?
    Mr. Jamison. Yes, at this point we are. But I would refer 
you to the Department of Defense and others that are analyzing, 
continuing to analyze those situations.
    Mr. Fattah. And to what degree is this a concern at least 
in terms of the work that is being done in your shop?
    Mr. Jamison. Well, I think it prioritizes one of the 
elements that is in our budget request. And I will have Mr. 
Garcia go into more detail. But a substantial part of his 
budget is next generation networks, which is basically coming 
up with a prioritization system so that we can route priority 
traffic or be able to get traffic through. So very much in the 
same way that we initially started I think in 1991 with the 
public switch telephone system and developed a GETS card so you 
could get priority telephone service.
    And we moved after 9/11 establishing a wireless priority 
service since we had disruptions for wireless communications. 
Now with that convergence of data packets traveling through 
internet protocol this allows us to route traffic. So when you 
have an interruption, disruption or other issues, that allows 
you to route that priority traffic around those interruptions.
    I will let Greg go into more details on that.
    Mr. Garcia. Yes. Sir, what we are getting to here is trying 
to keep up with technological evolution. As our communications 
infrastructure evolves from the so-called plain old telephone 
system to one that is becoming, within the next ten years, 
totally broadband--totally over the internet--using, as the 
Under Secretary said, packet switch technology, we are going to 
need to evolve the way we prioritize that service. Our 
prioritization is there to ensure that the President, that the 
nation, that the government can communicate in times of 
national crisis which could include a major disruption of our 
communications infrastructure.
    Mr. Fattah. That is my concern. I mean a lot of your 
earlier testimony seemed to be focused on people attacking the 
system or hacking into the system or some limited decree of 
denial of usability. And my concern is that if a cut of a cable 
knocks the entire system out, even if it is accidental, then, 
you know, what are we doing to position ourselves better?
    Now, so you are working on this next generation. Where are 
we, without going into classified information, but are we 
comfortably along or are we a lot further away from where we 
need to be?
    Mr. Garcia. It is important to recognize that most of the 
communications infrastructure is owned and operated by the 
private sector, hence I mean we have a very close relationship 
with the carriers to ensure redundancy and resiliency, and in 
the event that we suffer a major disruption that could bring 
down a certain amount of communications capability, that we 
have a means of prioritizing that traffic for first responders, 
for senior federal decision makers, and for state executives as 
well. So that is in part what this next generation network 
budget request is for--to enable us to ensure that as our 
communications capability, whether it is the internet or 
whether it is voice, whether it is data, that all of that, we 
will have a way to prioritize and make sure that the people who 
need to talk can talk.

                CYBER SECURITY AND COMMUNICATIONS STAFF

    Mr. Fattah. You had said to my colleague's question that 
you had a very--he asked you about qualified staff and you in 
part said that you had a very dedicated staff. How many people 
in your staff have a terminal degree in computer and 
information science or similar terminal?
    Mr. Garcia. The National Communications System, which is 
under my organization, includes a technology division which 
deals with this next generation network and other 
communications issues. And they are, all the people working on 
this, on these issues, are engineers, so they are absolutely 
qualified for this. And they have been, some of them have been 
doing it for many years.
    Mr. Fattah. But some are computer engineers, electrical 
engineers, I mean chemical engineers?
    Mr. Garcia. I can certainly give you that breakdown.
    Mr. Fattah. Yes, I would be very interested in the answer 
on that terminal degree computer and information science.
    [The information follows:]

          Additional Information on the Cyber Scholars Program

    The Department of Homeland Security (DHS) National Cyber Security 
Division (NCSD) co-sponsors the Federal Cyber Service: Scholarship for 
Service (SFS) program with the National Science Foundation (NSF). The 
SFS program, established by NSF in 2001 and co-sponsored by DHS/NCSD 
since 2004, provides scholarships for a maximum of two years to 
outstanding cyber security undergraduate, graduate, and doctoral 
students in exchange for an equal amount of time spent in Federal 
Government service after graduation. Full-time employment in a cyber 
security job with an agency occurs at the appropriate pay grade upon 
graduation; generally GS-7 for undergraduates, GS-9 for Master's 
Degrees, and GS-11 for Doctorates. Students also complete a 10-week 
Federal internship while still in school, usually after their first 
year in the program.
    SFS program goals are: 1) to increase the national capacity for 
educating information technology (IT) specialists in information 
assurance (IA) disciplines; and 2) to produce new entrants to the 
Federal IA workforce. Approximately 350 students from 30 universities 
participated in the program this year, bringing the total to 880 
students. Currently, the placement rate is over 90 percent.
    NSF administers the SFS program and distributes scholarship money 
through grants to chosen National Centers of Academic Excellence in 
Information Assurance Education (CAEIAEs) or equivalent schools. The 
universities then select the scholarship students. As strategic 
partners, NSF and DHS/NCSD co-chair the Interagency Coordinating 
Council, a committee that helps shape the policies and direction of the 
SFS program. The Office of Personnel Management (OPM) helps to 
facilitate and track the placement of SFS students and maintains the 
program website (www.sfs.opm.gov).
    NSF and DHS/NCSD co-sponsor an annual job fair and symposium to 
provide SFS students networking opportunities with agency hiring 
officials and IT security program managers, as well as exposure to IT 
security topics of specific interest to the Federal Government. Over 49 
agency components participated in the 2008 job fair. NCSD has worked to 
raise awareness of the SFS program across the Federal Government and 
specifically within DHS. As a result, SFS students have been placed in 
internships and full-time jobs at Customs and Border Protection, the 
United States Secret Service, Office of the Inspector General, Federal 
Emergency Management Agency, and Federal Law Enforcement Training 
Center.

                 EDUCATIONAL BACKGROUND OF NCS PERSONNEL
------------------------------------------------------------------------
 
------------------------------------------------------------------------
   Educational background of National Communications System personnel
------------------------------------------------------------------------
NCS Personnel...................  71 FTEs...........
Bachelor Degree or Higher.......  54 Total..........
Technical Degrees...............  40 (of the 54       NSC technical
                                   Total).             degrees include:
                                                       Electrical
                                                       Engineer,
                                                       Computer
                                                       Scientist, System
                                                       Engineer, and
                                                       Management of
                                                       Information
                                                       Systems.
Open Positions Requiring          10 of the 25
 Technical Degrees.                Vacancies.
------------------------------------------------------------------------

    Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Aderholt.
    Mr. Aderholt. Thank you, Mr. Chairman.

             INTERGOVERNMENTAL RELATIONS AND COMMUNICATIONS

    Thank you for being here today before the subcommittee. Mr. 
Jamison, let me address this question to you regarding, I know 
that your office is responsible for intergovernmental 
coordination, and I guess the question would be in just, you 
know, general terms when you talk about uniformity among all 
the 50 states when you are talking about equipment, training, 
procedures for preventing and responding to terrorist attacks, 
what do you, would you give the level of uniformity from all 
the 50 states as where are we and where do we need to be and 
where are we looking to go with this?
    Mr. Jamison. I think there are a couple of different 
elements if you look at that capability. One of the areas that 
we need to improve is our ability to communicate from the top 
down, from the government to the states and locals. And that is 
why you see the request to build up the National Command and 
Control Capability that is in the budget. I believe it is a $63 
million request as I recall.
    Much of that is trying to get secure and non-secure voice, 
video and data capability so they can communicate. Another 
level of preparedness is a lot of the work that Bob Stephan 
does with the states and locals from a preparedness standpoint. 
I would ask him to comment a little bit on his evaluation of 
his work in that area as well as Greg Garcia's in the Office of 
Emergency Communications on interoperability--the ability for 
the first responders to communicate together.
    Mr. Aderholt. Sure. Thank you, Mr. Secretary.
    Mr. Stephan. I have a program called Protective Security 
Advisors. We now have 78 folks across the country whose job it 
is to maintain liaison with state, local, and federal officials 
in their geographic areas of operations as well as private 
sector folks, the owners and operators of our nation's critical 
infrastructures inside their geographic footprint.
    We have been spending a lot of time and money and informing 
even greater sums of grant dollars to make sure that we have 
security plans that not only link individual facilities to 
those state and local law enforcement jurisdictions and 
emergency management jurisdictions, but also now working from a 
system perspective to integrate not just individual aspects but 
systems of individual nodes, key choke points. One example that 
I have to offer is we are working an A to Z comprehensive look 
at the California water system from north to south, the main 
flow of the water that feeds the major population centers of 
central and southern California. Doing that as a team with 
literally dozens and dozens of state first responders, 
emergency managers, water folks, EPA officials, again at the 
federal, state, and local level, tying all of these people 
together in an interlocking series of plans, identifying their 
vulnerabilities, and helping push various, disparate packages 
of authorities' capabilities and resources together to get the 
job done.
    So that is the kind of thing that we have been doing. And I 
have been seeing a greater desire on the part of our state and 
local counterparts to kind of figure this out, not from a 
unidimensional perspective, but from a multidimensional 
perspective and not have seven fire trucks in each jurisdiction 
when maybe you need the fire trucks and maybe you need the 
S.W.A.T. team, maybe you need recovery from an EPA perspective; 
how do all those disparate sets of capabilities, equipment, and 
training need to be put together to service one plan? So that 
is kind of where we have been going with all of this in my 
world over the past five years or so.
    Mr. Aderholt. Okay. Mr. Garcia.
    Mr. Garcia. Yes, sir. Regarding the Office of Emergency 
Communications, this was set up one year ago today, as a matter 
of fact. And I am proud to recognize its one year anniversary. 
The mission of the OEC is to ensure that first responders have 
operable and interoperable emergency communications. It came 
out of the Katrina lessons learned report that recognized that 
across jurisdictions, even within a region, within a state 
sometimes there is an inability for first responders to 
communicate across those jurisdictions at a particular incident 
or event.
    OEC is responsible for developing a national strategy, 
national guideline, using the grant process to incentivize 
states and regions to develop statewide interoperability plans 
that will then align upward to a National Emergency 
Communications Plan which we will be sending to the Congress in 
the next few months which lays out the national strategy for 
how we can bring more interoperability across the nation. So in 
the near future we will be informing all of the states who have 
developed their statewide plans as to how they can begin to 
draw down the grant money to enable them to do that.
    It is quite an accomplishment when you think that one year 
ago there were only about eight states who actually had 
developed statewide interoperability plans. And through the 
development of OEC, through the standup of OEC and this 
development of this whole process we will have 56 states and 
territories this summer being qualified to receive grant money 
because of the work they have done to develop statewide plans.
    Mr. Aderholt. Okay, thank you.
    Mr. Price. Thank you. Ms. Lowey.

                      INTEROPERABLE COMMUNICATIONS

    Ms. Lowey. Thank you very much, Mr. Chairman. And thank 
you, Mr. Garcia, for your segue into my question.
    This is an issue that some of us have been working on for a 
very, very long time. And as you know, H.R. 1 was signed into 
law last year authorizing the $2 billion Interoperable 
Communication Grant Program. And the Office of Interoperability 
and Compatibility was created. And this subcommittee's spending 
plan, and I thank the Chairman, included my language to 
implement the national plan. So what I would be interested in, 
and you said it is coming, could you be more precise about when 
the Department of Homeland Security will complete the National 
Emergency Communication Plan?
    Mr. Garcia. Yes, ma'am. The NECP we expect to have up to 
the Congress, we are working to have it by July.
    Ms. Lowey. Well, I found that intriguing because in the 
prepared testimony Mr. Jamison mentions that the fiscal year 
2009 funds will be used for the Interoperable Emergency 
Communications Grant Program. This is particularly interesting 
to me because the department did not request funding for the 
grant program.
    Mr. Garcia. We have 2008 appropriations of $50 million for 
the Interoperable Communications Grant Program. We expect to 
have that funding distributed to the states by the end of 
fiscal year 2008.
    Ms. Lowey. However, in H.R. 1, which was signed into law, 
we were talking about a $2 billion grant program. So you are 
working with the states but you think $50 million is 
sufficient?
    Mr. Garcia. That is for 2008. And we would be looking to 
additional funding in the out-years for that. And we also have 
the Public Safety Interoperable Communications Program which is 
part of what I mentioned earlier where we will have, due to the 
sale of the spectrum, close to a billion dollars of funding to 
distribute to the states once they have all been approved, once 
all of their statewide plans and their investment 
justifications have been approved. So that is a one-time shot 
of money that will be available to the states before the end of 
this fiscal year.
    Mr. Jamison. Congresswoman, can I add as well part of 
Greg's role and the staff of the OEC is to make sure that they 
help drive the standards and the capabilities that need to be 
driven at the state level or the local level to get 
interoperability. So there are other grant funds out of those 
two programs that are getting spent on interoperable 
communications and he has got to make sure that those funds as 
well are aligned to make sure that we are raising the baseline. 
So some of that work is hitting other grant programs as well.
    Mr. Garcia. And, in fact, as you mentioned FEMA is 
responsible for distributing that grant funding. OEC does not 
distribute the funding itself, we provide, as the Under 
Secretary said, the standards and guidance.
    Ms. Lowey. Well, it is true, it is true, we agree that FEMA 
not NPPD administers the state and local grant programs. And so 
I imagine there is coordination between the two in emergency 
communication needs to first responder grants, so it made me 
wonder why the Administration did not continue to fund the 
Interoperable Grant Program that Chairman Price was so wise to 
include in the fiscal year 2008 bill.
    So I am just wondering, both Mr. Jamison or Mr. Garcia, why 
the evidence is there that first responders can now seamlessly 
communicate to justify eliminating the Interoperability Grant 
Program in the Administration's request? You said there was $50 
million in there. But certainly it is not sufficient. And you 
think the money with the sale of the spectrum is going to be 
adequate? It took us a long time for those of us who have been 
working on this issue, and remember Louisiana, and remember the 
Paul Revere strategies and people communicating with bottles, 
many of us care passionately about this program and we want to 
be sure that not only are we going to have the program but 
there is going to be adequate money to fund the grants to all 
the states.
    Mr. Garcia. Yes, ma'am. Well, I cannot speak to the funding 
request from FEMA for the grant monies but I can tell you that 
this is an ongoing, long-term process, as you well know. And I 
think we have made tremendous progress just, as I mentioned, 
going from eight states with statewide plans to 56 states by 
the end of this summer and the ability of those statewide plans 
to align with the national strategy. So we are going to 
continue driving toward that goal of interoperability and we 
will be measuring how the states, year after year, are 
implementing their statewide plans as they align to the 
national strategy. But as for the funding, I would defer to 
FEMA on that one.
    Ms. Lowey. Well, let me just say, Mr. Chairman, I 
personally thank you as someone who has been working on this 
issue for a long time for your leadership. And I just hope that 
after all the work that is being done and all the work that the 
states are doing to put together the plans that we are going to 
have adequate money, and just hope that there is not an 
emergency when this is needed before we have the money and the 
training and the program up and running.
    Thank you, Mr. Chairman.

                     INTEROPERABILITY GRANT PROGRAM

    Mr. Price. Thank you. And I am interested to hear the talk 
of this $50 million which, as you know, was an initiative of 
this committee to put that $50 million in the 2008 bill. No one 
pretended that this was anywhere near adequate to approach the 
need but we did put it there as an indication of future intent 
and as a hint, which unfortunately was not taken by the 
Administration, that we would be looking for more funding in 
the 2009 request. So this is very much an item that we are 
going to need to address.
    Ms. Lowey. In fact, for clarification I was not quite sure 
what your response was but as long as the Chairman continued 
the discussion you are saying it is not your responsibility, 
you do not take responsibility for the Administration not 
putting it in the request?
    Mr. Garcia. FEMA distributes the funding. I would assume 
that they would do the funding request.
    Mr. Jamison. We would be happy to come back up with FEMA to 
do a grant funding proposal. But I also think it is very 
important as he completes the baseline assessment and also 
coordinates the work on the statewide assessments, one of the 
big focuses for him is to identify those gaps across the nation 
and come up with a much more comprehensive plan. At that point, 
we will be able to work closely with FEMA to determine where 
the funding issues might lie as well as how we might leverage 
some existing grant programs. So we are due to come back to you 
as we get more information into that planning process.
    Mr. Price. All right, thank you. Ms. Roybal-Allard.

                         WATER SYSTEM SECURITY

    Ms. Roybal-Allard. Mr. Stephan, as you know, last week the 
city of Alamosa, Colorado, experienced a salmonella poisoning 
outbreak due to a contaminated water supply. It is my 
understanding that there are about 12 people that have been 
hospitalized to date. And city authorities are not sure how 
that contamination happened, whether it was an intentional 
poisoning.
    I am wondering, even though it is still early in the 
process, if we have learned anything from this incident about 
the preparedness of our cities and towns with regard to being 
able to prevent attacks or address possible attacks on our 
water systems? Are there any weaknesses, anything that has been 
highlighted as a result of this?
    Mr. Stephan. You are correct that the results of that 
investigation are still ongoing. There is a law enforcement 
slice that I understand has ruled out a terrorism nexus at this 
point. But there is also an important public health and safety 
slice and coordinating effort between the Environmental 
Protection Agency and Health and Human Services. There are 
federal components to it, there are state and local components 
to it and, of course, there is a public piece to it.
    I think that the incident itself has highlighted the need 
to approach our infrastructures, their protection, their 
resiliency, from a true partnership perspective and that there 
is not a single silver bullet that in fact is the answer to all 
of our solutions or answer to all of our problems. Many 
solutions have to come together integrating a very diverse set 
of capabilities with authorities and resources together at 
various levels to get to the problem.
    I think this is a situation which initiates at a local 
level and it goes all the way up through a process that gets 
you national level analysis, first and foremost to determine 
the terrorism nexus, integrates into the national public health 
and safety community from a people perspective and an 
environmental perspective and then back down that same system 
of systems to get to the answer at the end of the day. So I 
think it highlights the need for the information sharing 
components of infrastructure protection that we have set up, 
the partnership that we have built around these critical 
infrastructures.
    And when lessons learned do get established from this 
particular incident, as they have for many similar incidents in 
the past, we do have a pretty robust information sharing and 
lessons learned piece that goes out to owners and operators of 
not just that system but systems like it all over the United 
States.
    Ms. Roybal-Allard. So at the end of this process there will 
be a report and recommendations that will be shared with the 
local folks as to what they need to do in order to be able to 
be prepared for this kind of an attack on our water systems?
    Mr. Stephan. Yes, ma'am. We have compiled many similar 
documents from past incidents of contamination of water 
supplies within the water sector. We will take a look at this 
from the national perspective and see if there are any pieces 
that we need to add to the documentation we have on file. So we 
will do that. The Department of Homeland Security will 
coordinate with other affected departments and agencies, 
principally HHS and EPA to do that kind of thing--a coordinated 
product.
    There will also be local bulletins, information, warning 
products, so on and so forth, that will also stem from this 
type of incident. And again our job is to look at them, fuse 
them all together, see if there are important new facts here 
that have not yet come to light in a previous incident, package 
them and disseminate them.
    Ms. Roybal-Allard. But do the current plans address how 
communities will respond to help vulnerable populations? For 
example, it is my understanding in the case of Colorado that 
they were going to have to flush it with chlorine and it would 
take 14 days for the water to be usable again. So people were 
going to have to rely on purchasing bottled water. Is there a 
plan in place to address vulnerable people such as the elderly, 
those that cannot afford to go run out and buy bottled water, 
disabled folks? Does that already exist?
    Mr. Stephan. Ma'am, I will have to get back to you with a 
deeper explanation. My job is principally on physical security 
and protection of that kind of asset or systems comprised of 
key nodes such as this one. But in terms of the public 
preparedness piece now we go to the Environmental Protection 
Agency and Health and Human Services at the national level as 
well as at the state and local level. So I would have to get 
back to you with a more comprehensive answer on this one.
    Ms. Roybal-Allard. So everything is sort of 
compartmentalized in other words? You folks only look at so 
much and then do not go beyond that in terms of making 
recommendations?
    Mr. Stephan. No, my--I want to say that everything I do has 
to bring together lots of different actors from the public 
health and preparedness world, from the physical protection 
world, from the cyber world. What I do not want to do here is 
speak in depth about a medical public health issue where 
probably EPA and Health and Human Services would do the 
question more justice than I could. But I want to not leave 
here with the impression that there is some kind of gap between 
the ways we look at it. There is an intersection or a 
coordination process, collaborative process between the various 
federal agencies that need to look at this from different 
perspectives as well as their state and local counterparts. And 
then between the federal, state and local agencies involved the 
coordinated message gets sent back out to the public at the 
community level.
    Ms. Roybal-Allard. How long does that take?
    Mr. Stephan. Ma'am, it depends what jurisdiction we are 
talking about, what the issue was, how quickly the scientists 
can come to some kind of agreement, resolution. So again 
depending on the exact scenario we are talking about--it could 
take hours, up to weeks, to months depending on the exact 
threat vector or hazard.
    Ms. Roybal-Allard. Okay.
    Mr. Price. Thank you. Mr. Farr.

                        EMERGENCY COMMUNICATIONS

    Mr. Farr. Thank you, Mr. Chairman.
    After 9/11, members of Congress just kind of ran out of 
this building evacuating. We went all over the Hill. We had no 
way of communicating because our cell phones did not work here 
in Washington. And right after that we finally got together, 
word of mouth and through the Capitol Police, that we should 
all meet on the Capitol steps. And from then on the question 
was, how do we stay in contact?
    So they gave us our Blackberries. And the Blackberries have 
a cell phone in them so we can text message. Are these going to 
work when there is next time another incident? Is all the 
cybersecurity we have implemented? Are we sure as members of 
Congress when we pick up our cell phones that they will work 
and we can talk and follow the instructions that they send out 
every time there is an incident around the Capitol?
    Mr. Garcia. Yes, sir. One of the bedrock programs of the 
National Communications Service is to ensure that our federal 
leaders and first responders and state leaders do have the 
ability to communicate.
    Mr. Farr. Well, that is not the question.
    Mr. Garcia. And so we prioritize----
    Mr. Farr. Not the leadership having special phones and all 
that stuff, it is the tools that each member of Congress has, 
will we be able to communicate?
    Mr. Garcia. Sorry, I did not hear the question.
    Mr. Farr. Will we, will members of this committee have the 
ability to communicate? We are not the Speaker and we are not 
the President of the Senate, we are not officers of the house.
    Mr. Garcia. You should all have your GETS card, the 
Government Emergency Telecommunications Service card, and you 
should also have wireless priority service that enables your 
calls to be prioritized over the congestion of all other calls.
    Mr. Farr. So using these Blackberries, because that is what 
we carry, and we have that little card giving us all these 
emergency numbers, this, the question is will this work? Does 
not matter if you have the right number if the instrument you 
are calling on does not work.
    Mr. Garcia. Assuming that you have, that we have gotten you 
to subscribe to the Wireless Priority Service, yes, it will.
    Mr. Farr. So?
    Mr. Garcia. It is a very special code that you type into 
your Blackberry that will provide you priority wireless 
service.
    Mr. Farr. Every member of Congress has a different 
provider, service provider. I happen to have AT&T. What and----
    Mr. Garcia. It will work.
    Mr. Farr [continuing]. There are others, Verizon and 
others.
    Mr. Garcia. It is interoperable.
    Mr. Farr. Are those all going to operate?
    Mr. Garcia. That is correct. That is the bedrock of the 
National Communications System's Telecommunications Priority 
Service, is to enable priority services across networks, across 
platforms for those who need to have that ability to 
communicate.
    Mr. Jamison. It is also the issue, the challenge that we 
face with next generation networks, because we have a variety 
of carriers as well in that network, and that is why we need a 
next generation network.
    Mr. Farr. Is YouTube and my Facebook going to work?
    Mr. Garcia. That is an issue that, in terms of how you 
prioritize internet traffic, is one of those both technological 
and policy challenges that we need to engage over the next 
several years as it pertains to national security.
    Mr. Farr. The reason I ask is I had a workshop with the 
Naval Post Graduate School Center for Post Conflict--no, for 
Homeland Security who are all these incredibly smart first 
responders like yourselves, I mean from different backgrounds 
and meeting with our local law enforcement. And they told us 
that the most helpful information law enforcement could get was 
off Facebook, particularly in the Virginia incident when the 
shooting went on campus because the authorities had no idea 
what the facts were but the students on the ground in the 
classrooms and on the campus had about a thousand different 
inputs, pointing out that even false information will get 
readily collected with enough comments, enough sort of overlap. 
And it was fascinating because the whole discussion then became 
how do you communicate in an emergency situation when the first 
responders' communication may not have all the facts? And do 
you not need the support of civilians on the ground and just 
people who are using YouTube and Facebook to put information 
out there.

                       US-VISIT AIR EXIT PROGRAM

    So that is why I asked that. And what I really wanted to 
get at though was US-VISIT exit program we go from generic to 
specifics, I mean we give a visa, we know when people come into 
this country and the whole thing but we never know when they 
leave. And I just want to know if we are up in service, I mean 
if a foreign student staying in my house studying in a local 
high school or local community college which has a student visa 
to get in when they go back home do you know where they are? Do 
you know when they leave now?
    Mr. Jamison. Let me take that one. And I will caveat it by 
saying we did not bring Bob Mockny, the Director of US-VISIT, 
to this hearing because of the earlier hearing. But we are 
currently working to get the air EXIT program established very 
quickly. We are in the late stages and hope to have the rule 
published----
    Mr. Farr. Is it all visas or just tourist visas?
    Mr. Jamison. It is all visas. All visa waiver programs and 
all visas will be a part of that program.
    Mr. Farr. Well, visa waivers you do not have a visa.
    Mr. Jamison. Correct. You are correct. Sorry for the 
miscommunication there. Yes, it will be all people that enter 
this country that have their fingerprints collected on entry, 
all those required will have to have their fingerprints 
collected on exit.
    Mr. Farr. When will that be operational? And how do you do 
it? I mean is it an airline, you get on an airline, what if you 
come in by airline and take a car to Mexico to Tijuana and take 
a plane out of the Tijuana airport? So you have come in with an 
airline and you leave it by just essentially driving or walking 
across the border, is that all coordinated?
    Mr. Jamison. No. That is in the budget request. We have 
what we call a comprehensive land border exit proposal to start 
running pilots in fiscal year 2009 to deal with the land border 
issue, which is a much more complex situation of how we get 
that process moving. We hope to have the air exit rule--final 
rule--by the end of the year and implemented and up and running 
next year.
    Mr. Farr. Is anything working or is it all pilot stage?
    Mr. Jamison. I think we have a lot of success stories in 
US-VISIT. The 10-print capture that we just rolled out, so now 
every visa that is issued internationally in every embassy we 
are getting a 10-print fingerprint collection on as well as 10-
print fingerprint collection in several airports in addition to 
all airports being covered by the 2-print fingerprints coming 
into the country, which gives us a much greater capability to 
match against databases of terrorists in Iraq and Afghanistan, 
and being able to pull prints off of those areas. So we have 
made dramatic progress. We have to get moving on air EXIT, but 
we are about to get that rule released, and we will continue 
down the path.

                     CHEMICAL SECURITY REGULATIONS

    Mr. Price. Thank you. We are told that votes are 
approaching here in not too many minutes.
    I am going to ask you a question that I would like you to 
do the best you can with in a 3- or 4-minute time frame. But 
understand that you can supplement the answer for the record 
because our time is limited and some of these things you might 
need to do some checking on anyway. It has to do with the 
chemical facility regulations.

                     CHEMICAL FACILITY REGULATIONS

    As you know, the 2007 Appropriations Act established new 
chemical facility security regulatory authority at DHS, 
provided $10 million to start the program. In 2008 the 
committee provided $50 million for chemical security. And the 
2009 budget continues this growth, requesting $63 million for 
the program. So along with this funding growth you now have 
specific authority to, you have of course additional regulatory 
authority and now to that has been added the regulation of 
ammonium nitrate, the common fertilizer component that can be 
used to manufacture explosives.
    So, with final publication of the types and quantities of 
chemicals subject to regulation DHS now has the task of 
establishing and maintaining an active field staff to review 
chemical facilities and to evaluate the strength of their 
security plan. Can you give us an indication of where you are 
in this program, what the status is, what is your schedule for 
actual site visits at the nation's chemical facilities? How 
much of the chemical industry in the nation will you be able to 
review with the $63 million budget requested for 2009? And then 
finally, with regard to this new ammonium nitrate authority 
will you be able to integrate that into your regulatory regime 
this year? And what would you aim to do in this area next year?
    Mr. Jamison. I am going to yield my four minutes quickly to 
Bob Stephan since he can go into quick detail.
    Mr. Stephan. So developing and implementing the Chemical 
Facility Antiterrorism Standards is kind of like building an 
airplane while it is in flight. You are bringing the crew on 
board while it is in flight, and while it is in flight someone 
is shooting at you. Sometimes it is al-Qaeda, sometimes it is 
everybody else. So that is kind of a very dynamic risk 
environment that is not stagnant.
    The first year, 2007, and a little bit into 2008, here we 
spent developing, integrating, coordinating the interim final 
regulation, pushing it out the door, and pushing an outreach 
education awareness across the sectors of concern--not just the 
chemical sectors, not understood by everybody, but also parts 
of the energy sector, parts of the agricultural and food 
sectors, Health and Human Services, as well as educational 
facilities that have chemical labs. So this is much broader 
than chemical security from a conventional standpoint.
    Where we are now in terms of the implementing piece? This 
is the year of program build, bringing on the IT systems that 
will ultimately serve us in terms of case management and across 
a population of somewhere between 6,000 to 8,000 facilities 
that will end up as a high-risk facility inside the CFATS 
framework, and bringing on board the inspectors, loose, on-the-
ground officials that have a big role to play in terms of the 
plan development, the plan validation, the plan approval, and 
then the plan inspections in subsequent months and years.
    In terms of the implementing piece, we concluded the first 
phase of implementation of the regulation itself--the 
consequence assessment or the Top Screen Phase--in January. The 
22nd of January of this year we received about 30,000 Top 
Screens, which are very comprehensive consequence assessments 
based upon an analysis of about 322 chemicals of interest. So 
about 30,000 facilities have gone through that process in phase 
one.
    We have an unknown number of outliers that we will begin to 
get to over the next couple months, working through the EPA, 
USDA, Health and Human Services, and the state Homeland 
Security Advisors to help us figure out where those outliers 
might be, those who have not yet completed the Top Screen 
assessment based upon their requirement to do so because they 
hold a certain type of chemical at a certain quantity.
    As of last week, actually last Friday, I received a 
briefing from my staff that represents the initial cut at 
tiering those 30,000 or so facilities into four risk tiers, one 
being the highest risk, four being the lowest risk. I am going 
to present them to Mr. Jamison this week, the results of what I 
call informally racking and stacking. Our initial assumptions 
are pretty good. We are going to have somewhere between 6,000 
or 8,000 facilities inside those initial four tiers. Again, 
that number may grow depending on the outliers that we find.
    The next phase in the process, once the Secretary has given 
his approval on the individual cut lines or demarcation points 
between the tiers, is to undergo a 90-day security 
vulnerability assessment process, which is totally automated 
with the 6,000 to 8,000 facilities that ended up as regulated 
facilities. We will then follow that with a 120-day security 
plan development process, which pretty much takes us into the 
late fall, the early winter.
    While all of this is going on, on a faster track with 
available data several months ago, I have been following a herd 
of about 50 individual chemical facilities that, based upon 
known EPA offsite hazardous release data, we have pretty much 
determined that there will be X number of these 50 facilities 
that are going to actually end up as tier one under CFATS. And 
I just released a letter last week directing those 22 
facilities now to begin the site vulnerability assessment 
process in advance of the rest of what I call the herd. So we 
have kind of a two-pronged approach--those facilities that are 
known based upon existing data also helping us pilot that whole 
site vulnerability assessment plan in the security plan 
development process, pushing this forward.
    I hope to then make 2009, which is the third year of the 
CFATS authority, a year of heavy boots-on-the-ground inspection 
across all tiers, but again focusing on those facilities that 
represent the greatest risk first in that process. So I think 
this program is very well stood up now. It is under way. I have 
to bring the people on board. I have to bring all the complex 
IT suite of technologies together. Coming together nicely. And 
we appreciate the Committee's continued support of this effort 
because this requires sustained resources over a long period of 
time, sir, in order for it to work.
    Mr. Price. Let me just ask you to furnish for the record, 
give us whatever precision you can about the $63 million that 
you talked about in the budget and what that will enable you to 
accomplish, how that matches up with the timetable and the 
tasks you just outlined. And then an explicit account, if you 
will, of how the ammonium nitrate regulation fits into this.
    [The information follows:]

    Question. What will IP do with the requested $63M and how the 
ammonium nitrate regulation fits in to this?
    Answer. The $63 million was requested for implementation of the 
Chemical Facility Anti-Terrorism Standards (CFATS), to resource 
activities, equipment, or personnel essential to the accomplishment of 
full implementation of CFATS. Please see the attached slide entitled 
FY09 Expenditure Plan for ISCD-CFATS Implementation for a detailed 
breakout of how IP plans to allocate the funds.
    Regarding the new requirement in Section 563 of the 2008 
Consolidated Appropriations Act, DHS is eager to work with the Congress 
to identify sufficient resources to develop the ammonium nitrate 
security regulations. As an initial step, and as directed in the 
Appropriations Act, DHS is finalizing a report that discusses the 
Ammonium Nitrate (AN) supply chain and security issues surrounding AN 
in commerce, how CFATS cover certain types of AN facilities, the 
requirements of Section 563, options for fulfilling those requirements, 
and the associated cost estimates related to each option.

    Mr. Price.We will return to this if we can. But now I want 
to turn to Mr. Rogers and ask you to furnish that for the 
record.
    Mr. Stephan. We would be happy to do that.
    Mr. Price. All right.

                      PROTECTIVE SECURITY ADVISORS

    Mr. Rogers. One of the difficulties we have had at the 
department over these years has been coordinating what we do 
with what states do. And delegating, if you will, a lot of the 
chores to the state local level. And with that in mind, some 
time ago we created what is called the Protective Security 
Advisors, PSA, people who are from each state that assist state 
and local governments in securing critical infrastructure and 
key resource locations. We do not have those people in all 
states now. But in your budget request you are asking $26.6 
million, which is a $1.7 million increase over 2008, for ten 
additional PSAs. Will that give a person in every state?
    Mr. Jamison. Well, and that is an important consideration 
for us to get full state coverage. It is also an important 
consideration for us to make sure that we have the penetration 
rates where we have a high amount of critical infrastructure. I 
will let Bob go into more detail on how he could pull in those 
individuals.
    Mr. Stephan. We have 78 now. This would bring us up to 88, 
which allows us to have a representative in every state. I 
think it is absolutely critical. In fact, I think this is 
probably one of my most successful programs, because these guys 
are my eyes and ears. I am not a preexisting DHS component, for 
example like Customs and Border Protection, Secret Service, 
FEMA. I do not have a field footprint without this cadre. By 
having these folks, as a minimum one in every state, I have 
somebody that is focused on the infrastructure pieces of the 
puzzle inside that jurisdiction on a steady-state basis helping 
to bring plans, training, exercise together with DHS components 
and others.
    When an incident happens, these people know the owners and 
operators of the infrastructures, the FEMA regional director, 
local police chief, fire chief, the mayor, so on and so forth. 
They bring that incredible Rolodex and set of relationships to 
the fight. They are my people that populate the now new 
National Response Plan--keynote the National Response Framework 
rather--out in the field at the local level where the incident 
happens.
    So those are critical guys in terms of steady-state 
planning facilitation, of relationship building, gathering a 
common operating picture that all feeds into incident 
management when we need to do that. They have been integral to 
the post-Katrina last two hurricane seasons, the California 
wildfires, and lots of things that happened across the country 
on a day-to-day basis that may not make it to the national 
level.
    Mr. Rogers. I would think, too, one of the chief benefits 
here would be some degree of uniformity across the country. I 
know some time some years ago we asked for a list from each 
state of what they consider or somebody considered critical 
infrastructure. And it ranged in one state from I think a 
popcorn stand to a nuclear power plant in another state. And 
those local officials considered both items of infrastructure. 
I would hope now with people in all states that we would have a 
uniformity so that we could have some definition of what is 
critical infrastructure that is the same in Maine and Texas, it 
has not been in the past, so that the criteria can be the same. 
Do you see that coming?
    Mr. Stephan. Sir, I do not think I will get to the point 
ever where the states are all uniform. But in terms of 
understanding the federal lexicon, what is the criteria sector 
by sector to be considered critical for energy facilities, 
chemical plants, dams, communications systems, so on and so 
forth, having my folks there going through the criteria sector 
by sector with the Homeland Security Advisor and the state 
administrative official for the grant program--that is 
invaluable in helping them translate what the Federal 
Government actually meant to say into the realities the 
environments and risk environments, the operating environments 
at the state level. Having somebody focused on this, the 
Homeland Security Advisors can turn to what are known 
quantities, not mysterious voices on the end of the phone in 
Washington, D.C., but known personal relationships, a lot of 
trust and confidence built there.
    Mr. Rogers. Well, I thank you and congratulate you for 
that. And that is something I think we could not spend money 
more wisely than to do that. Thank you.
    Mr. Price. Mr. Rodriguez.

                       CYBER SECURITY CONTRACTING

    Mr. Rodriguez. Let me once again indicate in terms of what 
the Ranking Member has talked about in terms of the 
communication with the state and local. And I want to 
congratulate you on the exercise, or the international exercise 
that has been conducted, but to also keep in mind not only the 
macro but also the micro and not to lose track of that in terms 
of this because if we get an attack it might be of a local 
community where it occurs where we also need to be able to pick 
up on that.
    Let me, the concern that I have, and I do not know to what 
degree we might be doing this but I know that it is happening 
when we have those contracts, and you know I am really 
concerned with contracts, you know, on the war in Iraq in terms 
of almost running the war, contracts that are going out in 
terms of responding to a national disaster, and as we move as 
an agency in terms of contracts that go out and where we might 
lose the intent of what the Congress or what the Administration 
wanted to do because of the contracts, you know, and how we 
come to grips with that. And so when we did that international 
exercise, you know, was that done through contracts?
    Mr. Garcia. The Cyber Storm exercise was managed from 
within DHS and by government employees. But we did certainly 
use contract support for a lot of the logistics and some of the 
planning. But the most important thing to recognize is that the 
exercise itself was exercised by the stakeholders, by real 
representatives from the chemical sector, transportation, from 
the states, from federal agencies, from private companies.
    Mr. Rodriguez. Yes, that is important, especially at this 
stage in terms of learning from those experiences and learning 
from those exercises that we have that capability of being able 
to pick up on that.
    The other concern that I would have would be in terms of as 
the intent of something that, you know, an earmark, the intent 
of what it is supposed to be as a contractor picks it up to 
make sure the integrity is still there. Okay?
    Mr. Garcia. Absolutely, sir.

                    QUALIFIED AND SKILLED WORKFORCE

    Mr. Rodriguez. Okay. That to me is also important and 
essential. And I am still not convinced that we are, you know, 
we have because I know the number of people that we were 
bringing in in computer literacy and in the Ph.D. level from 
abroad prior to 9/11 and the fact that we are not doing that as 
much that we really need to beef up on producing those Ph.D.'s 
and those highly qualified people in computer, you know, for 
cyber security purposes. And I do not know if we are doing 
enough in that area or not.
    Mr. Garcia. Sir, I am actually proud of what we have been 
able to do so far in that area. DHS, in partnership with the 
National Security Agency, sponsors a program called Centers for 
Academic Excellence in Information Assurance, which essentially 
means there are currently 86 colleges and universities across 
the country that have been certified as centers of academic 
excellence for both the curriculum in cyber security, computer 
security, computer sciences, software assurance. They have 
developed strong curricula, A, and B, they--as colleges and 
universities, as enterprises--are actually practicing what they 
are teaching. They are taking the steps to secure their own 
networks. Because as we know, the academic environment is one 
that is rife with all kinds of very smart students trying all 
varieties of things.
    The other issue that we are working on is something called 
the Scholarship for Service Program, one that again we are very 
proud of. This program provides one to two years of DHS funding 
for students in the computer security field in colleges and 
universities in return for the same amount of service in the 
Federal Government. So if they get one year of funding for 
their college education they serve one year in a federal agency 
working in cyber security. Through our US-CERT just this year 
we have hired 14 at our latest Scholarship for Service Fair. 
Earlier this year we had a very large job fair, and the US-CERT 
hired 14 students who will be graduating in May and June coming 
on-board the US-CERT.

                      RESPONDING TO CYBER ATTACKS

    Mr. Rodriguez. As we find the attacks that are occurring 
right now how do we communicate at the present time with the 
Department of Defense or SEI or anyone else?
    Mr. Garcia. We have a number of mechanisms for that. At the 
operational level there is an interagency group called the 
National Cyber Response Coordination Group, which is co-chaired 
by DHS, the Department of Justice and Department of Defense. 
This is an interagency group that shares information about 
ongoing threats and vulnerabilities. The NCRCG played and 
participated in the Cyber Storm exercise as an interagency 
group.
    We have numerous other partnerships across the Federal 
Government, formal and informal, for information sharing. We 
are particularly close with the Defense Department's Joint Task 
Force for Global Network Operations. We have developed a 
concept of operations for how we exchange information, what we 
do with that information between the DOD side and between the 
national critical infrastructure side. So we have a number of 
those in place.
    If we look at the National Cybersecurity Center--and there 
has been some discussion of that--if you think that every 
organization is focused on their mission, DHS is focused on 
their mission, DOD is focused on its mission, FBI, etc., and 
they do reach out, we all do reach out and we coordinate, but 
what the National Cybersecurity Center will do, we will 
systematize that coordination, as the Under Secretary said. It 
will make it more comprehensive, more systematized because, 
prior to that, there has not been a single entity that has as 
its sole job the coordination of all of those federal entities 
involved in cyber security.
    Mr. Rodriguez. Thank you.
    Mr. Price. Thank you. Mr. Aderholt.

                     INFRASTRUCTURE VULNERABILITIES

    Mr. Aderholt. Speaking in general terms and just I will 
open this up to any on the panel here, as far as vulnerability 
and risk we experience here in this nation, what are some of 
the areas that we, I think that you believe we need to pay 
close security to? And I know you want to speak in general 
terms on this. But, you know, concerning terrorist attacks and 
such which areas do you see as the most vulnerable and the 
areas that we are at most risk at?
    Mr. Jamison. I am going to defer to Bob Stephan, who has 
the responsibility to coordinate across that infrastructure and 
to do some assessments. I appreciate the caveat for the 
statement. It is going to be very hard for us to go into any 
level of detail here.
    Mr. Stephan. Sir, to answer that question in a lot of 
detail actually you have now in the committee safe a national-
level critical infrastructure key risk, key resource assessment 
report. It is an annual report now that is a requirement under 
HSPD-7 as well as recent statutory requirements.
    Inside that document we have a homeland risk assessment 
that catalogs the 18 critical infrastructure sectors that we 
now have according to risk and highlights those that represent 
the highest of the high-risk categories. We spent a lot of time 
talking about the various types, also attack vectors that are 
more prevalent or more deadly across those particular sectors. 
So there is a report that you now have access to and will have 
an update on an annual basis where we will bring in the 
intelligence community, the law enforcement community, and the 
sectors at the federal level, the state and local level, and 
the private sector level to figure this out, conduct this 
analysis. Then from the analysis identify what is more 
important than the thing next to it and what are the strategies 
that we should be using to kind of cut down the 
vulnerabilities, boost protection, boost cyber security, boost 
resiliency within that protective sector or to try to eliminate 
the particular attack vectors to the sectors of concern.
    So I would be glad to also come over and offer a 
personalized briefing of that to any member of the committee to 
walk you through that national level risk report.
    Mr. Aderholt. When was the last time that report was 
updated?
    Mr. Stephan. Sir, it was turned in to you, the first week 
in November of 2007. It will be updated again this year. The 
Sector Annual Reports that feed the national report are due to 
me on 1 July. I have about three months to turn them around. I 
push them through the Secretary of Homeland Security to the 
President's Homeland Security Advisor and Special Assistant for 
Counterterrorism 1 September of each year. And then they go to 
the Hill here the first week of November. It is an annual cycle 
now where those things are refreshed.
    And, of course, anything that emerges in the interim, a new 
piece that we had not yet considered, a new tactic that we 
can----
    Mr. Aderholt. Will be supplemental to that?
    Mr. Stephan. Yes, sir. We will have an addendum and push it 
in there as well.
    Mr. Aderholt. Okay. Thank you very much.
    Mr. Price. Mr. Farr.

                         US-VISIT EXIT PROGRAM

    Mr. Farr. Just two questions. I know time is limited.
    Mr. Jamison, how much money have we spent to ratchet up for 
the VISIT Exit program?
    Mr. Jamison. I will have to get you the exact numbers for 
the record.
    [The information follows:]

    Question. What are the exact amounts spent on the VISIT Exit 
program?
    Answer. To date, US-VISIT has spent a total of approximately $156.7 
million on the planning, design, execution, deployment, evaluation and 
disposal of the air and sea biometric exit pilots as well as the land 
border RFID entry-exit proof of concept.
    US-VISIT spent $64.2 million on the land border RFID entry-exit 
proof of concept and $92.5 million on the air/sea biometric exit 
pilots.

    Mr. Farr. Ballfield what do you think it is?
    Mr. Jamison. We, I know in 2009----
    Mr. Farr. No, just what is the total all these years?
    Mr. Jamison. I do not have that number. I will have to get 
that number for you.
    Mr. Farr. Do we have any work, do you have any exit program 
working now at any airport or any exit place?
    Mr. Jamison. No. We had an EXIT pilot a few years ago that 
wrapped up. There is no current exit program.
    Mr. Farr. Thank you.
    I want to ask Mr. Stevens--which, which? I cannot see your 
name tag.
    Mr. Stephan. Stephan, sir.
    Mr. Farr. Oh, Stephan. Excuse me, I am sorry. Because you 
have done a lot of work for the Naval Post Graduate School out 
in Monterrey, have you not?
    Mr. Stephan. Yes, sir. I have been invited out there as a 
guest lecturer and a panel participant and a friend of the 
family out there.
    Mr. Farr. Well, I just wondered whether you would come, 
because this whole thing on cybersecurity also has the ability 
of how do you when an area is devastated how do you set up a 
command post? And I know there are some companies that out of 
the work that the Naval Post Graduate School did with the 
tsunami in developing mobile command systems that could be 
backpack operated, seven days. Commanders can be essentially in 
the woods and be in command. And I know they have done some 
work in Harold Rogers' district with the University of Arkansas 
I believe. I just wondered if you have seen any of that?
    Because one of the questions I have is that they have not 
yet put it into an operational situation with the kind of 
operators of local first responders. And I think that was what 
they were looking for is to try to put this ability of 
technology and people in an operational sense. And I wondered 
whether you have seen any of that or done any of it or you are 
working on that?
    Mr. Stephan. Sir, I have not seen anything to do with that 
particular initiative. They have pushed us other things, for 
example, integrating regional resiliency into the National 
Infrastructure Protection Plan framework and some ideas on how 
we make sure that we are better engaging state and local 
government partners in the infrastructure protection mission 
area. We have numerous efforts under way on those fronts. But I 
am not familiar with this specific initiative.
    Mr. Farr. There is a company named Comms First that brought 
it to my attention of what they have been able to develop. Has 
anybody done any, worked in that field? Do you know what I am 
talking about? Essentially they have created the ability to do 
mobile with all the kinds of battery operations and satellite 
communication where you can take equipment depending on how 
much, up to a whole truckload, and create a command center in 
anywhere, just a remote area. You have no connection to any 
hub, any electrical grid or anything. They generate their own 
power, they use battery power.
    Mr. Garcia. Right. And there are a number of vendors, 
commercial offerings that have that capability that we deploy 
along with FEMA at the site of any incident where 
communications, the communications infrastructure, is brought 
down because of flooding or some form of destruction. Then we 
need to bring in mobile communications capabilities.
    Mr. Farr. Well, I think they are beyond that. And that is 
what they are looking for is some ability to do some field 
testing in an operational sense. And I would like to work with 
you on that.
    Mr. Garcia. Yes, sir. I will come back and talk about that.
    Mr. Farr. I know that Mr. Rogers has some interest in it 
too.

                       CHEMICAL FACILITY SECURITY

    Mr. Price. Thank you, Mr. Farr.
    Well, the promised votes have arrived. And so we will 
prepare to adjourn.
    I want to ask you, Mr. Under Secretary, just to put a 
little finer point on the questions I asked you to bring back 
answers to on the chemical security matter. We did understand 
you to say that something like 6,000 to 8,000 plants would be 
likely to fall under regulations given the process that you 
have undertaken. Mr. Stephan, you gave that number I believe. 
Our understanding is that the budget request of $63 million for 
2009 was premised on a somewhat smaller number, around 500 to 
5,500. That is the sort of detail we are looking for if you can 
follow up on that.
    Mr. Stephan. The original premise was 5,000.
    Mr. Price. Yes. So what is the effect then of a somewhat 
larger number of that likely coming through this screening 
process.

                            AMMONIUM NITRATE

    And then we are well aware that this ammonium nitrate 
regulation represents an additional challenge to you. I would 
like to know how many of these facilities you would figure 
would be targeted in any case without the special 
responsibilities. But we do want to know how you are adjusting 
to that, how that figures within the budget you have requested.
    And also where they were talking here about compatible 
regulatory regimes, there are some specific requirements that 
are part of that provision.
    So that is the sort of thing we would appreciate in a more 
detailed reply.
    Mr. Price. So with that I am going to thank all of you for 
being here today and for some very useful testimony. And we 
will look forward to working with you as our bill is written. 
And the hearing is adjourned.
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                                         Thursday, March 6, 2008.  

   BORDER SECURITY PROGRAMS AND OPERATIONS--CHALLENGES AND PRIORITIES

                               WITNESSES

W. RALPH BASHAM, COMMISSIONER, U.S. CUSTOMS AND BORDER PROTECTION, 
    DEPARTMENT OF HOMELAND SECURITY
ROBERT A. MOCNY, DIRECTOR, US-VISIT PROGRAM, NATIONAL PROTECTION AND 
    PROGRAMS DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY
RICHARD M. STANA, DIRECTOR, HOMELAND SECURITY AND JUSTICE ISSUES, 
    GOVERNMENT ACCOUNTABILITY OFFICE

                     Mr. Price's Opening Statement

    Mr. Price. The subcommittee will come to order. Good 
morning, everyone. This morning, we are going to resume a 
discussion, which we began back on February 14th, when activity 
on the House floor required a postponement of our second 
hearing panel. We have that second hearing panel here today and 
augmented to cover a wider range of topics, as we will see.
    Today, we want to welcome Ralph Basham, the Commissioner of 
U.S. Customs and Border Protection, to testify on efforts to 
gain control of our borders, including airport ports of entry. 
Seated with him, a U.S. Border Chief, David Aguilar--oh, he is 
not here. All right, I am sorry. I need to read the--the Deputy 
Chief, Ron Colburn is here. Mr. Colburn, welcome. We appreciate 
your presence. We, also, have the Assistant Commissioner for 
Air and Marine, Michael Kostelnik. We have Robert Jacksta, 
Deputy Assistant Commissioner for field operations, Greg 
Giddens, the Executive Director of the Secure Border 
Initiative, Robert Mocny, Director of the US-Visitor and 
Immigrant Status Indicator Technology, who will testify about 
efforts to improve US-VISIT biometric and exit functions, and 
Richard Stana, Director for Homeland Security and Justice 
Issues with the Government Accountability Office, who will 
describe challenges in carrying out DHS's border security 
mission. So, welcome to all of you. We appreciate you being 
here.
    I am sure we agree that we need to move quickly to gain 
operational control of all of our borders, north and south, air 
and sea, but we must not allow haste to force us into repeating 
the mistakes of the past. Whether we are talking about the 
technology challenges facing the Project 28 effort in Arizona 
or decisions about where to place border fencing, it is 
important not to just do it, but to do it right. That is why 
this committee put language in the fiscal 2008 appropriations 
bill to require that border security, fencing, infrastructure, 
and technology funding be allocated to the highest priority 
needs and be used as efficiently as possible.
    For fencing, the law requires DHS to back its decisions 
with detailed evaluations of border security solutions for each 
segment of 15 miles or less and to compare fencing with 
alternative ways of achieving operational control. The law also 
requires that DHS consult with federal agencies, local 
officials, law enforcement, and landowners to gain a complete 
picture of the true costs and benefits from proposed border 
infrastructure projects. Based on testimony we heard a few 
weeks ago from border sheriffs and mayors and landowners, it 
appears that work remains to be done to satisfy the 
consultation requirements that Congress set for the agency. I 
have seen the list of outreach events that CBP has provided to 
our staff. I will have questions though or do have questions 
about whether the kind of consultation that that list 
represents permits the full sharing of information that we must 
have and is conducive to reaching consensual outcomes where 
such outcomes are possible.
    This committee has acted to plug gaps in border inspection 
and enforcement efforts. At the border last year, we heard 
about CBP's problems in recruiting and retaining CBP officers 
and we decided to do something about it. So, we included the 
language in our House bill to convert CBP officers to law 
enforcement officer status and we enhanced that provision in 
the Omnibus Appropriations Act. As CBP's own spokesman said, 
and I quote, ``the 2008 Omnibus Act appropriately recognized 
CBP officers for what they do, protecting America's people and 
enforcing its laws.'' Yet, the President's budget proposes to 
reverse this gain by repealing and defunding the conversions. 
We are going to want to talk about that this morning.
    The 2008 Appropriations Act also increased airport staffing 
for model ports of entry and condition western hemisphere 
travel initiative funding on performance of pilot efforts to 
ensure the most effective implementation of a new document 
policy. And since we need to know who enters and remains and 
departs from our country, the 2008 Appropriations Act funded 
US-VISIT biometric capacity upgrades and a kick start for a 
practical exit solution contingent on getting a sensible plan. 
Commissioner Basham and Director Mocny, I look forward to 
learning how you are implementing the requirements contained in 
the fiscal 2008 Appropriations Act.
    Now let me quickly make some observations about the 2009 
request. CBP's discretionary request is less than one percent 
over 2008 funding. Within that is $775 million to fund border 
security fencing, infrastructure, and technology, $450 million 
below fiscal 2008. This would bring total funding to $3.5 
billion.
    The Border Patrol would grow under this request to exceed 
20,000 agents, more than double the fiscal 2001 onboard number. 
However, the number of Border Patrol agents on the northern 
border actually fell in 2006 and has not kept up with 
requirements to the law. Funding for air and marine programs 
would fall seven percent, to $528 million under the proposed 
budget, although air and marine fleet is being modernized and 
its mission has grown, as the need to protect our northern 
border has been recognized.
    Secretary Chertoff, in a New York Daily News interview last 
month, said he frets over Europe and Canada more than Mexico. 
He is quoted as saying that more than a dozen people linked to 
Al Qaeda, Hezbollah, and other extremist groups have tried to 
enter the U.S. through ports of entry on the northern border, 
while there have been almost no such attempts at U.S.-Mexico 
checkpoints. So, we need to question why the department's 
northern border efforts and the budget before us do not reflect 
fully the Secretary's understanding.
    In addition, we should not forget that most cargo, persons, 
and contraband and enter and leave this country through its 
ports of entry, not in between them. In addition to the 
proposed repeal of the CBP's law enforcement officer 
conversion, funding to support overall CBP efforts at ports of 
entry is flat in the 2009 request.
    The US-VISIT request includes $55.5 million, 300 percent 
over fiscal 2008, to complete a biometric exit solution at air 
and seaports of entry. Seven years after the events of 9/11 and 
after appropriating 2.2 billion dollars, we expect to see exit 
solutions that will work.
    To summarize, Mr. Commissioner, Director Mocny, we want to 
know how you will achieve all of the objectives that Congress 
has set before you, how will you secure our land borders, 
consult effectively with those who live on our border, and, in 
particular, how will you do that with an essentially flat 
budget. So, we look forward to our discussion this morning and 
a lively discussion of the efforts to secure our borders.
    Let me turn now to our distinguished ranking member. We are 
also glad to have the ranking member for the full committee 
here. We would be happy to welcome his comments, as well. Mr. 
Rogers.

                     Mr. Rogers' Opening Statement

    Mr. Rogers. Thank you, Mr. Chairman. Commissioner Basham, 
Deputy Chief, others from CBP, Director Mocny, we are going to 
secure our borders and end illegal immigration. Those are goals 
that are not negotiable, goals that I know you are striving to 
achieve. And that is the first thing I want to make abundantly 
clear today, we are going to close the border. We have given 
you money. We have given you direction. We have heard 
complaints. We have listened to all sides. It is time to move.
    Over the last week, a lot has been said about SBI NET and 
Project 28, words like failure, delay, cost overruns. Those 
have been the norm in describing these latest challenges. This 
hearing is obviously timely and gives each one of you an 
opportunity to present your case to the American public and to 
Congress.
    While we have always understood P-28 to be a prototype from 
which the larger SBI NET solution would be devised, I find much 
of what I have been hearing and reading lately to be troubling, 
to say the very least. So, today I am interested in getting the 
full unvarnished story. We are going to insist that we be frank 
and full in this discussion, lay it on the table. Too much is 
at stake. Too much progress has been made to allow technical 
glitches to derail our goals of controlling the border and 
developing a viable immigration system. Getting clears answers 
now will help restore confidence that our government is up to 
this vital mission.
    Since November of 2005 and the launch of the Secure Border 
Initiative, this subcommittee has been your partner and your 
ally in what has been an unprecedented influx of resources 
toward the security of our borders. And thanks to billions of 
dollars in appropriations, considerable legislative oversight, 
and other noteworthy efforts, substantial progress has indeed 
been made. And I think we need to dwell upon that. Last year, 
CBP bought 141 southwest border miles under effective control, 
bringing the total number of southwest border miles under 
effective control to 498. That includes the deployment of over 
154 miles of primary fence and over 109 miles of vehicle fence, 
well on the way to the goal of completing some 670 miles of 
fencing along the southwest border by the end of this calendar 
year.
    Along the northern border, CBP has enhanced physical 
infrastructure by establishing four air wings and is planning 
for a fifth. Significant workforce enhancements have been made, 
including deploying nearly 2,500 additional CBP officers and 
agriculture specialists to our ports of entry and bringing the 
Border Patrol up to almost 15,000 agents. By the end of 2008, 
another 3,300 Border Patrol agents will be deployed, well on 
the way of doubling the size of the pre-9/11 Border Patrol by 
the end of this administration.
    Apprehensions are way down, a solid indicator that our 
efforts thus far are working as intended. In 2007, Border 
Patrol reduced illegal alien apprehensions by 20 percent below 
2006 levels, with especially notable apprehension reductions in 
the Yuma, Arizona sector by 68 percent, Del Rio, Texas by 46 
percent. And finally, the significance of maintaining catch and 
return cannot be overstated. This accomplishment, alone, speaks 
volumes about how far we have come. But, the strategy of 
enhanced personnel and physical infrastructure have always been 
predicated upon also implementing the modern technology that 
effectively links it all together, thereby making the system 
far greater than the sum of its parts.
    You may recall that in our first hearing on SBI just over 
two years ago, I asked whether SBI was for real or if it was 
just another acronym for failure, after we had endeared several 
serious missteps with ill-fated technology investments by the 
Border Patrol in the past. So, what I want to know today is 
simple. Now that you accepted P-28, what are you prepared to do 
now? What are we buying with SBI NET? When will we secure the 
border? How much is it going to cost? Difficult, but not 
complex questions to answer, answers this subcommittee expects 
and demands today, as we have in the past, but now we are 
getting ready to get with it.
    Gentlemen, we have appropriated over $2.7 billion toward 
border security fencing, infrastructure, technology, since 
2006, and you are requesting another $775 million for this 
effort in fiscal 2009. We need to know how this moves this ball 
toward securing the border and when we can expect it. Now, I 
realize the enormity of this challenge, but to Commissioner 
Basham and those of you from CBP, I say the time is now. There 
are no more excuses. You got the money, you got the personnel, 
you got the equipment, you got the gear, and you got the 
support of this subcommittee. So, it is no more excuses. We all 
know the stakes. You know our expectations. It is time to 
succeed where others have failed and provide the border 
security that this great nation both needs and deserves.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you, Mr. Rogers. Mr. Lewis.

                      Mr. Lewis' Opening Statement

    Mr. Lewis. Thank you, very much, Chairman Price. I 
appreciate both you and my colleague Hal Rogers allowing me to 
come and spend a little bit of time here. Frankly, there is 
plenty to do around here in the full committee. We have 22 
hearings of subcommittees yesterday and today. But, in the 
meantime, of late, most of us on this panel have spent some 
energy communicating with our own constituencies, various 
mechanisms, whereby you can hear from the folks. I must tell 
you that there is not an issue across the country that impacts 
my constituency more than this issue.
    Commissioner Basham, I am not one of those members of 
Congress, who automatically believes that we are going to solve 
all of these kinds of problems by simply building a wall all 
the way around the country. Having said that, my constituency 
does not agree with that. They would essentially build a very 
high wall that would allow nobody to penetrate. Between now and 
then, however, I think you should know that they are not really 
aware of the amount of money that Congress has spent and 
provided for the work of your leadership relative to 
controlling the border. Some 34 billion dollars over the last 
four years is a lot of money when you consider who makes the 
responsibilities around here. The reality that my constituents 
think we should be taking other steps has caused me to be a 
supporter of funding a border fence.
    But having said that, I believe there is much more to it 
than simply a wall. The most frustrating comment I would have 
to express today is that the virtual fence, that is the 
application of very fine and high in number personnel, along 
with other technology, it would appear still has many a hole 
and we have a lot of work to do together to make certain that 
we respond to the public's demand and, at the same time, 
recognize that all of America has a future in the world by 
working together.
    Let me round out my comments saying, as we control the 
border and secure, especially the southern border, that is the 
short-term consideration, in my view. The longer term is to 
recognize that starting in Argentina, going up through Chile 
and Ecuador, in Mexico, Canada, United States, as a unit, we 
have a major task to compete in the world, as the years go 
forward. Europe is going to come together. China and India are 
coming along in a much broader sense. Unless we can respond to 
the people's demand that we stop illegal immigration now and, 
at the same time, look at that longer-term reality, that we are 
going to miss really a very important American opportunity.
    I wanted to come and share with you that mixed view of this 
member of the appropriations committee and, Mr. Chairman, I 
appreciate your letting me express that.
    Mr. Price. Thank you, very much, Mr. Lewis. We are very 
glad to have you here. Mr. Basham, we would like to ask you now 
to begin. We will have oral statements this morning for Mr. 
Basham, Mr. Mocny, and Mr. Stana. We will ask each of you to 
summarize your remarks in five or six minutes with an oral 
statement and then we will put the full text of the statement 
in the record. But, this will let us proceed to a discussion. 
So, Mr. Basham, we will begin with you. We welcome you to the 
committee.

Statement of Mr. W. Ralph Basham, Commissioner, U.S. Customs and Border 
                               Protection

    Mr. Basham. Thank you, Mr. Chairman, and thank you ranking 
member Rogers. I do appreciate the opportunity to discuss with 
you today the present 2009 budget request for U.S. Customs and 
Border Protection and talk about the tremendous work the men 
and women of CBP are performing to secure our country's borders 
and at the same time, keep them open to legitimate trade and 
travel. I want to begin by thanking you for the strong support 
that this committee has given to our agency, support which has 
contributed greatly to our success over this past year.
    I know that support is recognized in the field. The front 
line CBP officers I speak to are grateful for the attention you 
have paid in the last year to issue like retirement coverage 
and port of entry facilities. The President's 2009 budget 
request will allow CBP to continue to deploy the mix of 
additional personnel, infrastructure, and technology that is 
needed, as we continue to make progress in securing our 
borders.
    CBP continues to increase our manpower at the borders. We 
currently have over 18,000 CBP officers stationed at our air, 
land, and seaports, to process over 1.1 million people and over 
70,000 cargo containers each day. We have over 15,500 Border 
Patrol agents between our ports of entry to watch over the 
thousands of miles of U.S. borders. Our air and marine 
officers, agricultural specialists, and other professionals 
also perform invaluable parts of our mission. The President's 
budget will bring our Border Patrol agents strength up to more 
than 20,000 by the end of next year, which, as Congressman 
Rogers mentioned, will double the Border Patrol force since 
2001. The budget also requests 212 additional CBP officers at 
our official ports of entry.
    As our ranks grow, one of my top priorities is to maintain 
the highest integrity among our workforce. And I thank the 
committee for voting to fund the hiring of the internal officer 
agents last year and this year I would appreciate your 
continued support for the President's budget request of 25 
additional agents. And while the greatest number of new Border 
Patrol hires will be stationed on the southern border, we have 
not turned our back on the northern border. By September, we 
expect to have 1,500 Border Patrol agents and more than 2,000 
by the end of 2010 on the northern border. For comparison, this 
represents a 500 percent increase over the pre-9/11 level of 
340 agents.
    We are also expanding our air and marine operations there. 
By this summer, we will have the fifth of our five air wings 
operational in the States of Washington, New York, Montana, 
North Dakota, and Michigan. We, also, plan to deploy our 
predator, UAS Operations, and an additional SBI NET technology 
demonstration on the northern border this year.
    We need to modernize and, in some cases, expand our 
facilities to accommodate our new agents, officers, pilots, and 
new technologies. Upgraded infrastructure is critical not only 
to security, but to facilitate the flow of legitimate trade and 
travel through our ports. Where operationally needed, we also 
must continue deploying tactical infrastructure in the form of 
fences, barriers, roads, and lighting, that act as force 
multipliers.
    Our agents and officers are the nation's most important 
asset in securing the borders, but they cannot do it alone. CBP 
has been deploying and continue to deploy technology tools for 
our front-line personnel. Alot has been written about P-28 and 
our plans to deploy further technology recently, much of it 
inaccurate. It is important to clarify today that P-28 and the 
integrated SBI system is only a piece of our efforts to deploy 
technology tools. As you know, those tools include mobile 
surveillance systems, unmanned aerial systems, automated 
targeting systems, high-powered x-rays, radiation detection 
equipment, and much more. P-28 was Boeing's initial fixed-price 
prototype demonstration and was designed to be something we 
could test, evaluate, and learn from. We identified technical 
deficiencies and Boeing fixed the majority of those 
deficiencies at its own cost. P-28 has accomplished our 
objectives and on February 21, 2008, we took final acceptance. 
Today, P-28 is a system that provides operational technology in 
an area that did not have those resources and has increased our 
effectiveness in the area, as a result.
    Unfortunately, this initial proof of concept and the 
overall SBI NET system approach came to be confused with one 
another. We have the confidence that a version of this type of 
integrated solution can be used in other selected border 
locations and we are moving forward to deliver that capacity.
    The efforts of CBP and your continued support are making an 
impact. Apprehensions by Border Patrol in the southwest border 
continue to trend downward at the 20 percent range. Our success 
is putting pressure on smugglers of illegal aliens and drugs. 
They, in turn, are becoming frustrated and, unfortunately, more 
violent. Since 2001, the number of assaults on Border Patrol 
agents has tripled. Traffickers are changing their routes and 
methods of smuggling. Off the coast of Guatemala our CBP air P-
3s discovered a submersible ship loaded with five tons of 
cocaine, the latest example. The bad guys will adapt and we 
must also adapt.
    Mr. Chairman, what I mention is a small part of a much 
greater effort. Every day, the men and women of CBP carry out a 
difficult and often dangerous mission. And as you have said, 
Mr. Chairman, I do apologize that I have to leave at 11:45 to 
attend a session with the President and the Secretary on the 
anniversary of DHS's creation. But, again, I do want to thank 
you for all of the support you have provided and now I will be 
happy to answer any questions you may have. Thank you, Mr. 
Chairman.
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    Mr. Price. Thank you, Commissioner. We will now turn to Mr. 
Mocny.

Statement of Mr. Robert A. Mocny, Director, US-VISIT Program, National 
                  Protection and Programs Directorate

    Mr. Mocny. Chairman Price, ranking member Rogers and to the 
members of this committee, I am honored to join Commissioner 
Basham and my colleagues from DHS to discuss some of the 
department's priorities for enhancing border security. I am 
also pleased to be joined here again with Mr. Richard Stana 
from the GAO.
    In today's world, border security no longer refers to the 
thousands of miles between us and our neighbors. We live in a 
global era of travel and trade that requires advanced methods 
to protect against the increasing sophistication of criminals, 
terrorists, and other dangerous people, who are determined to 
circumvent our security measures. US-VISIT addresses this 
challenge by ensuring that front-line decision makers, CBP 
officers, and consular officers have comprehensive, reliable 
information about the people they encounter when and where they 
need them.
    Today, because of your support, we have capabilities that 
simply did not exist five years ago. Five years ago, our 
immigration and border management system had disparate 
information systems that lacked coordination. Today, US-VISIT 
is helping unify these systems, providing a single source for 
biometric-based information on criminals, immigration 
violators, and known or suspected terrorists. Every day, 30,000 
authorized federal, state, and local government agency users 
can query US-VISIT's data, in order to help identify, mitigate, 
and eliminate security risks. Five years ago, we relied on 
travel documents that could be easily forged to mask an 
international traveler's identities. Today, using biometrics 
virtually eliminates passport and visa fraud. We, also, helped 
to develop what is now known as the e-passport, which 
dramatically improves the security of a travel document. Five 
years ago, ICE lacked timely and accurate information about 
visa overstays. Today, US-VISIT provides more than 250 credible 
leads each week to ICE, enabling them to better enforce our 
immigration laws. And five years ago, we were alone in using 
biometric for information and border patrol. Today, Japan, the 
U.K., the European Union, Canada, and other countries are 
either using the US-VISIT model or have plans to do so in the 
near future.
    Every day, US-VISIT is making our border security efforts 
more collaborative, more streamlined, and more effective. In 
fiscal year 2009, we are building on these capabilities to 
ensure our nation remains safe from dangerous people. Our first 
priority will be to complete the deployment of the 10 
fingerprint collection capabilities at all U.S. ports of entry 
by December of 2008, because it enhances our ability to keep 
dangerous people out of the country. This upgrade will give us 
the ability to check visitor's fingerprints against additional 
full and partial fingerprints that have been collected at crime 
scenes and locations where terrorists are known to operate. At 
the same time, this upgrade will provide faster and more 
accurate results, making the process more efficient for 
legitimate travelers. All 220 State Department visa issuing 
posts and 10 U.S. airports already have this capability. We are 
on schedule to complete deployment nationwide by the end of 
this year.
    In 2009, US-VISIT will continue its efforts to make US-
VISIT's IDENT, a fingerprint database, interoperable with the 
FBI's IAFIS fingerprint database. The successful work already 
completed is showing dramatic results. Continuous effort is a 
priority in order to provide decision makers with more 
comprehensive information about the people they encounter. And 
in fiscal year 2009, US-VISIT will begin deploying biometric 
exit procedures. We understand that this is one of the 
committee's primary concerns for US-VISIT and we are 
aggressively approaching this initiative.
    DHS intends to propose a rule that outlines our plans for 
these procedures at airports and seaports. We anticipate that 
the procedures will require the active participation of the 
airlines and the cruise lines. Deploying biometric exit 
procedure to land border ports of entry poses a greater 
challenge. US-VISIT is currently analyzing these challenges and 
will submit a written recommendation to DHS by the end of 2008, 
outlining a path forward to complete this priority. Once a land 
border solution is agreed upon, we expect to deploy in phases 
that address the different modes of transportation, starting 
with pedestrian, and later moving to vehicles, as technology 
improves.
    The backbone of all of these initiatives is our ability to 
manage and process data effectively, with 10 fingerprint 
collection, IDENT-IAFIS interoperability and biometric exit 
procedures all coming on line in fiscal year 2009. The volume 
of data we are processing is dramatically increasing. At the 
same time, there is a growing user demand on the IDENT 
database. By increasing our investment in operations and 
maintenance, we will maintain our ability to provide accurate, 
comprehensive, and timely data to front-line decision makers.
    Mr. Chairman, it is clear to me that Commissioner Basham 
and I are here together, because you see the work that we do as 
inextricably linked. I would agree. But, I would also say that 
US-VISIT program is linked to others in DHS and to other 
federal and state and local law enforcement entities. As an 
identity management service provider government-wide, US-VISIT 
has become a point of integration, eliminating inefficiencies 
created by the stove pipes that were once a U.S. Government 
fixture. US-VISIT is a cross government, cross department tool 
that is most effective when it collaborates with its federal 
partners. We are committed to this approach and see such inter-
governmental collaboration at the heart of our future 
successes, as we take on the increased demand for our services 
and meet our remaining challenges to close the door on visa 
overstays with the deployment of biometric exit procedures. The 
challenges we face are great, but our determination and our 
measured, deliberate approach assures success.
    I thank you for your continued support. I look forward to 
addressing the committee's questions.
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    Mr. Price. Thank you, Mr. Mocny. Mr. Stana.

     Statement of Mr. Richard M. Stana, Director, U.S. Government 
                         Accountability Office

    Mr. Stana. Chairman Price, Mr. Rogers, members of the 
subcommittee, in the year since 2001 terrorist attacks, the 
need to secure the U.S. borders has taken on added importance 
and has received increasing attention from the Congress and the 
public. As the lead federal agency in charge of securing our 
nation's borders, CBP employs about 18,000 CBP officers for 
inspecting travelers at 326 air, land, and seaports of entry 
and over 15,000 Border Patrol agents posted at our northern and 
southwest land borders, as well as our coastal areas. In 
addition, CBP helps to screen international travelers before 
they arrive in the United States and works to mitigate risks 
associated with the Visa Waiver program. The administration has 
requested $9.5 billion for CBP for fiscal year 2009.
    My prepared statement is based on recent GAO reports and 
testimonies that address border security, operations, and 
programs. At this time, I would like to highlight just a few 
main points. First, with respect to port of entry inspections, 
CBP has taken various actions to improve the inspection of 
travelers, but challenges remain. For example, CBP management 
has emphasized to CBP officers and supervisors the importance 
of carrying out effective inspections of travelers and their 
travel documents, but weaknesses and traveler and travel 
inspection procedures, the lack of physical infrastructure, and 
staff shortages have hampered CBP's ability to properly inspect 
travelers.
    With regard to the Western Hemisphere Travel initiative, as 
of December 2007, actions taken to meet program requirements 
include finalizing and implementing document requirements at 
airports of entry and selecting technology to be used with a 
new passport card at the 37 highest volume land ports of entry. 
CBP is moving forward to employ RFID document readers and 
training its officers on how to use them. Finally, DHS is 
implementing US-VISIT, a program designed to collect, maintain, 
and share data on selected foreign nationals entering and 
exiting the United States at air, sea, and land ports of entry. 
DHS has invested about $1.5 billion on US-VISIT since 2003. DHS 
now has the capacity to collect biometrics, such as 
fingerprints, from foreign nationals arriving at more than 300 
ports of entry. However, this delivery represents only one-half 
of the program. Although DHS has allocated about $250 million 
since 2003 to exit-related efforts, it still lacks the ability 
to verify when travelers leave the United States. No detailed 
exit program plans are currently available and prospects for 
successfully delivering the exit half of US-VISIT remain 
unclear.
    Second, DHS also faces challenges in securing the border 
between land ports of entry. In November 2005, DHS announced 
the launch of its Secure Border initiative, a multi-year, 
multi-billion program aimed at securing U.S. borders and 
reducing illegal immigration. One component of this program, 
Project 28, was to secure 28 miles along the Arizona border 
using, among other means, improved cameras and radars. DHS has 
formally accepted Project 28 from its contractor, Boeing, at a 
cost of about $20.6 million. SBI officials told us that Project 
28 has not fully met their expectations, but they plan to apply 
the lessons learned to future projects.
    Another component of the program, 370 miles of pedestrian 
fence and 300 miles of vehicle fence, will be challenging to 
complete by its December 2008 deadline because of various 
factors, including difficulties in acquiring land rights to 
border lands. DHS is unable to estimate the total cost of this 
component, because various factors are not yet known, such as 
the type of terrain where the fencing is to be constructed.
    Finally, CBP has experienced unprecedented growth in a 
number of its Border Patrol agents. Between the end of fiscal 
year 2006 and December 2008, the total number of new Border 
Patrol agents is expected to increase by about 6,000, from 
12,349 to 18,319. CBP officials believe that the Border Patrol 
training academy can handle the influx of new agents, but 
express concerns to us about their ability to provide 
sufficient training and supervision to new agents once they are 
posted to Border Patrol field offices.
    Finally, with respect to screening international travelers 
before they arrive in the United States, DHS and other agencies 
have done a credible job by, among other things, enhancing visa 
security, improving applicant screening, and providing counter 
terrorism training to overseas consular offices. Nevertheless, 
DHS could better address the requirements of recent legislation 
related to the Visa Waiver program. Specifically, it has yet to 
announce when or how it will rollout the legislatively required 
Electronic Travel Authorization system requiring foreign 
nationals from visa waiver countries to provide information 
before boarding U.S. bound flights. Also, DHS's proposed 
methodology for calculating overstay rates for the air exit 
system is flawed. To its credit, CBP has reported successes in 
its pilot program that stations CBP officers overseas. This is 
called the Immigration Advisory program and the CBP is taking 
steps to expand this program.
    In closing, CBP has made progress in taking actions to 
secure our nation's borders. It has enhanced its ability to 
screen travelers at and between ports of entry, as well as 
before they arrive in the United States. Nevertheless, 
vulnerabilities still exist and additional actions are required 
to address them. How long it will take and how much it will 
cost are two questions that plague two of DHS's major border 
security initiatives. For US-VISIT, how DHS will implement the 
exit portion of the program is uncertain, particularly for land 
ports of entry where there is no near term solution. And 
completing the SBI initiative within time and cost estimates 
will be challenging, including the building of nearly 700 miles 
of fencing. These issues underscore Congress's need to stay 
closely attuned to DHS's progress in these programs, to help 
ensure performance, schedule, and cost estimates are achieved 
and the nation's border security needs are met and fully 
addressed.
    I will be happy to answer any questions that members of the 
subcommittee may have.
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                          SBI--BORDER FENCING

    Mr. Price. Thank you, Mr. Stana, and thanks to all of you. 
Mr. Basham, let me begin with a question about border 
infrastructure and, in particular, the fence construction that 
you referenced and the kinds of requirements in executing that 
construction that are contained in our 2008 appropriations 
bill. Section 564 of that bill requires the Secretary of 
Homeland Security to consult with key stakeholders in carrying 
out the requirement to construct reenforced fencing along the 
southwest border. Specifically, by law, 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.''
    As you know, we had a number of those stakeholders before 
us a few days ago and the reports there were not encouraging, 
in terms of the amount of consultation that had taken place or 
that was perceived to have taken place, the amount and quality 
of consultation that was perceived to have taken place with 
respect to this project. And, of course, there were reports 
about CBP suing landowners to gain access to property for 
survey and assessment purposes and so forth, which does not 
suggest--at a minimum, it does not suggest a very consensual 
outcome to all of this. I know you have had a lot of meetings. 
I know you have had 100 meetings, 100 plus meetings with 
officials and with the general public over the past year. But, 
those meetings, I am afraid, by the mayors, especially, across 
the Texas border, those meetings are characterized rather 
negatively, that they consist of making a presentation, but not 
a whole lot of genuine consultation or follow-up. So, they are 
saying DHS maybe can check the consultation box, but that there 
is not really a dialogue going on.
    I wonder how you would respond to these concerns and also 
want to ask you, from your perspective, where are we in this 
process? What degree and what kind of consultation is yet 
required?
    Mr. Basham. Mr. Chairman, we are very familiar that there 
is a tremendous amount of frustration with respect to this 
issue. And, as you know, we based our assessments on the need 
for infrastructure along the southwest border based upon the 
Border Patrol's views with respect to what we would have to do 
to secure that border. And as you mentioned, we recognized that 
it needed to be a collaborative effort, that we needed to reach 
out to the stakeholders, and we have done a number of outreach 
sessions. I think we have had over 18 town hall meetings across 
the southwest border. We have had hundreds of contacts by the 
Border Patrol with landowners to discuss issues. What we 
recognize is that we are not going to get everyone completely 
in agreement that there needs to be fencing placed on their 
property. But, there have been discussions--and Greg Giddens 
can give you a couple of examples of just how extensive these 
discussions have been and the collaboration that we have tried 
to attain in trying to get access to this property.
    But at the end of the day, Mr. Chairman, we are bound to 
meet the requirements of the Congress and the Congress has said 
we will build 370 miles of pedestrian fence and 300 miles of 
vehicle barriers along the southwest border by the end of the 
year. And you can only go so far in discussions until you have 
to make a decision and we are at a point where we have to make 
those decisions. As you mentioned we have sent out letters to 
landowners advising them that there could be legal action taken 
for us to get access to do surveys, and environmental 
assessments on those pieces of property. And that is where we 
are today. If we are going to meet the mandate, if we are going 
to build the fence that has been required of us, we have to 
start and we have to start now.
    And I would like to give Greg, if you do not mind, Mr. 
Chairman, a chance just to maybe elaborate on the kinds of 
discussions we have had along the southwest border.
    Mr. Price. I would like to turn to Mr. Giddens, but I would 
like to first interject a couple of elements that might be 
helpful in clarifying this. First of all, the number 370 keeps 
getting repeated, but, as you know, what the law states is 370 
miles or an amount determined by the Secretary.
    Mr. Basham. Right.
    Mr. Price. Presumably, after full consideration of what it 
takes to achieve ``operational control'' and after these 
various processes are undertaken. So, the very rigidity of that 
notion of 370 miles, no more, no less, I think raises certain 
questions about how flexible this--and how accommodating this 
process is.

                          SBI--HIDALGO COUNTY

    Secondly, there was one bright spot in this testimony from 
our Texas friends and that had to do with Hidalgo County where 
there seems to have been an agreement to share the cost of a 
levy that would double as a border barrier. Now, all parties 
seem to be reasonably happy with that, seems to be what I was 
referring earlier, as a consensual outcome. I do not imagine 
that was an easy outcome to reach. I imagine it was actually 
fairly painstaking and no doubt pretty challenging to think 
about doing that with numerous communities. Yet, I do believe 
that is what we envision going on or at least something more 
than just a public meeting that lets everybody say there has 
been a public meeting. So with that elaboration, Mr. Giddens, 
you can----
    Mr. Basham. I would like to thank the committee for that 
flexibility and, as you recall, in the initial discussions 
regarding where that fence should be, we turned to the Border 
Patrol and asked the Border Patrol what is it going to take to 
get control of this section of the border. And the Border 
Patrol feels that that 370 miles is the accurate number of 
miles that need fencing. But the flexibility, we will continue 
to try to exercise that in the best manner possible. But, I 
will just give Greg a minute just to go over some of the 
collaborative efforts. And you mentioned Hidalgo, which is a--
--
    Mr. Giddens. Mr. Chairman, I appreciate the opportunity. 
Frankly, to talk about some of the things that when I read 
about our program and what we are doing in this area in the 
press, I do not even know what program they are talking about. 
We have had over 400 landowners that we were required to get 
right-of-entry access to. Of those 450 landowners, all but 77 
voluntarily agreed to allow us to come on to their land. And 
when I read about instances where we have not consulted and 
people were surprised and we go back and have documented 
contacts with people to say that we would like to come in and 
chat with you about the fence and get your thoughts on 
aesthetics and placement and we get the response, we are not 
going to put it on the agenda, sir, I do not know, at some 
point, what else we can do when we are reaching out to consult 
and people do not want to meet with us. And when we send 
letters out to gain right-of-entry that say, you have received 
this letter, because we have not been able to get your approval 
and if you think you received it in error or if you are ready 
to talk about this or sign a right-of-entry, please call us and 
we give a point of contact and we do not hear anything back 
from them, sir, I am just--I really do not understand a lot of 
what I read about what we are doing.
    We have had some very positive experiences on the southwest 
border. Hidalgo County, sir, the one you mentioned, is probably 
the most, I think, one that is wide ranging. It involves about 
22 miles. But, we are carefully looking at the appropriated 
dollars and we appreciate the support of this subcommittee to 
make sure that what we do with that dollar is targeted to 
border security and it is not building a levee and we are able 
to work an agreement and, sir, our staff and Hidalgo County 
worked very hard, as you indicated, to try to make this happen, 
so that we could combine these projects and protect the 
integrity of the appropriations for border security and not 
merge that with levee repair, but combine two government public 
works projects in a way that is beneficial for the local 
community and it is beneficial for Customs and border 
protection.
    I would like to point out that we do need a legislative 
remedy that would allow us to enter this cooperative agreement 
with Hidalgo County. Without that legislative relief, we do not 
have the authority to proceed.

                            SBI--BROWNSVILLE

    Sir, in the Brownsville area, in discussions with the 
University of Texas at Brownsville, we modified and changed the 
footprint of where our fence would go based on local input. We 
also made similar modifications in San Diego, in Del Rio. We 
made modifications in the Rio Grande Valley sector, based on 
discussions with the Department of Interior, to better protect 
the birdwatching sanctuary and other environmentally sensitive 
areas. So, we are going out and making real changes based on 
input. And the inputs that we get at these public meetings 
where we go down factors of air quality, noise, land use, 
geology, and water resources, vegetation, wild life, and 
aquatic resources, special studies, status species, cultural, 
resources, aesthetics and visual, socioeconomic resources, 
environmental justice, utilities infrastructure, hazardous 
materials and waste, we are not just going out there to collect 
something and just file that away. So, we have the obligation 
and responsibility to the NEPA process to adjudicate each one 
of those comments. We go through each one of those, look at 
what the comment is, and then we have to give a disposition of 
that and have a record of that to the NEPA process. So, we are 
not doing anything to check the box. We are doing this because 
it is the right thing to do. It is required to do by NEPA. It 
was clearly reinforced by the subcommittee. And there is no box 
checking going on with our consultation.
    Mr. Price. Well, we will, I am sure, return to this. I want 
to make clear that nobody here have a veto. We all understand 
that. Sometimes, consensual outcomes are not possible. But, the 
kind of process that appears to have been undertaken at Hidalgo 
County and what I understand Brownsville, for example, to be 
asking for, those represent a positive indication of what might 
be possible. I would think that we want to the maximum extent 
possible to not be hearing the kinds of things we heard from 
not just scattered people, who were discontent, but from the 
representatives of all the leaders of those border towns.
    Just finally, Mr. Basham, is there a rough way of 
estimating how much is yet to be done? I mean, to what extent 
is your agency's attitude that you have already done this or to 
what extent do you see a good bit of work yet to be done? If 
you could somehow give us a general idea of that.
    Mr. Basham. We feel we are at a point, Mr. Chairman, that 
the outreach that we have done and the discussions that we have 
had now brings us to a point where we have to now go in and 
exercise whatever legal authorities remain to get access to 
these properties to do the kinds of surveys, to do the 
environmental assessments, and we have to start to construct 
these fences, and that is where we--I guess my answer is we are 
at a point where we will still be open to discussion, but we 
recognize we have to now make very hard decisions and that is 
where we are.
    Mr. Price. Well, getting a temporary order to give you 
access to the land to conduct a survey is different than 
beginning construction.

                        SBI--LOCAL CONSULTATION

    Mr. Basham. That is exactly right. And the reason that we 
are asking for access is to do those engineering and 
environmental assessments to make a determination as to whether 
or not we are going to build a fence. It does not mean because 
we have gotten access that we are going to build a fence. There 
is a strong likelihood, based upon operational needs, that that 
is where we want to build the fence. So, as Greg said, we have 
had exhaustive conversations. And I will give you an example, 
Mr. Chairman. I was in Laredo this past weekend and they were 
complaining about the fence. And I tried to explain to them, we 
are not building a fence in Laredo. We have the Rio Grande 
River. But, that is sort of issues we are dealing with down on 
the border. And so, we are doing everything we can to make this 
collaborative process, Mr. Chairman, but it is a difficult--it 
is difficult for us to continue to do that and meet the 
requirements.
    Mr. Price. Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman. Well, I do not want to 
diminish the complexity and difficulty of constructing a 
virtual or real fence along the border, nor do I diminish the 
concern of citizens along the border in seeing something built 
in their backyard so to speak. However, there is a national 
mandate to build a fence to protect the border. There is always 
going to be people, who will complain. You cannot positively 
satisfy 100 percent. Frankly, I think you have come a long, 
long way. There is only 77 landowners, who have not said no to 
access or have not responded and I am told that that only 
represents about 22 miles of the border. Is that right, Mr. 
Giddens?
    Mr. Giddens. Yes, sir.
    Mr. Rogers. And given the enormous amount of consultation 
and asking for advice and listening to local concerns and 
responding to individual landowners, hundreds of sessions, I do 
not think anyone can say that you have not been open to 
consultation. But this is a national mandate. We want the fence 
built. Congress has said it for years. You got the money. And I 
do not want us to stagger at the gate here. And to be frank 
with you, a lot of these people, who say do not build the 
fence, tomorrow are going to say or yesterday said, why does 
the government not stop these people from coming in here, same 
people that now will not let you on their property to assess 
the kind of fence that needs to be built. So, a lot of us are a 
bit impatient, I am sure you are, too. I do not represent the 
border area. So, I do not have a constituent involved here. 
But, I do have, as all of us do on this subcommittee, the 
responsibility to find the monies to help you do the national 
mandate that has been laid down before us.
    So, the consultations have been enormous, public meetings, 
town hall meetings, open houses, private meetings with state 
and local officials, city counsels, local utility 
representative, tribal reps, universities, local law 
enforcement, environmental leaders, city managers, county 
commissioners, delegates, judges, you have talked to them all 
endlessly. And you have come down to where there is only 77 
landowners, who now say, no way or at least not at this point. 
Well, when we came up with the street lights, oil-fired street 
lamps, a great invention, people complained that it would 
pollute the air. So, every time you try to do something, there 
is going to people that will fight you all the way. That is 
just the way things are. And I do not want us on this 
subcommittee to get the idea that there is anything more than 
minor opposition from selected individuals. We heard a few of 
them here the other day, but, my gosh, there are thousands of 
others, who are saying let us do it and there is millions of 
the rest of us saying why are you not proceeding faster. Well, 
I apologize for vetting my frustrations with you, who I am sure 
are just as frustrated as me.

                               SBI--P-28

    Well, let me get back to the P-28 task order. By all 
accounts that I have heard, P-28 represented a big time 
failure. You can correct me. I want you to correct me, if I am 
wrong. Go ahead.
    Mr. Basham. I would correct that view. In the beginning, I 
believe there were some problems, and those problems were 
recognized with P-28 and with the effort that Boeing was 
putting forth.
    That is why we advised Secretary Chertoff and Deputy 
Secretary Michael Jackson at the time in June 2007 that P-28 
was not operational; it had not delivered what we had expected. 
And the decision was made not to accept from Boeing that 
product.
    To their credit, the CEO of Boeing stepped up and said: You 
are right. It is not working. It is not what we said we would 
deliver. We are going to fix it; we are going to fix it on our 
time; and we are going to fix it on our dollar.
    I would venture to say that Boeing has doubled the amount 
of money invested in P-28 to correct the problems.
    Mr. Rogers. Was that a design and engineering problem at 
the outset, or was it a problem in construction or what?
    Mr. Basham. Well P-28, as you recall, was intended as a 
proof-of-concept approach to see what Boeing would take off-
the-shelf software, integrate that, and provide us with 
something that we could look at; something that we could test 
to make the determination whether this was feasible.
    They did not deliver that machine. In December, we took 
conditional acceptance of P-28, so we could have the Border 
Patrol agents get their hands on this product, and work the 
system to see whether or not it was going to provide any 
operational value to the Border Patrol.
    They worked with this until February. In February, the 
Secretary himself, who went down to Tucson and saw this 
product, walked away satisfied that Boeing had met the 
obligations that the Task Order had presented.
    In fact, in my opinion, Boeing delivered a better product 
than what had been originally requested. We are going to take 
that, what we have learned, we may be switching out hardware; 
we may be switching out software; we may be making some 
changes. But the concept works.
    Now, we will move forward and apply that concept, taking 
parts of that and apply it to other parts of the border. Greg 
can elaborate further on that, if you wish. But I believe that 
the press--and I can tell you, I believe it was stated that it 
was said that the Border Patrol was not satisfied with the 
product.
    We knew that this was not going to be the new product. This 
was an opportunity for us to see what was within the realm of 
possibility by integrating these pieces. We will continue to 
refine and improve the hardware and the software, working with 
the Border Patrol, working with Boeing to make this a very 
effective and efficient product.
    Mr. Rogers. Well, you finally accepted P-28 on February 
22nd----
    Mr. Basham. Right.
    Mr. Rogers [continuing]. Eight months late.
    Mr. Basham. Right.
    Mr. Rogers. And now you are up against the deadline that 
has been set for the 370 miles of pedestrian fencing, and 300 
miles of vehicle fencing, and all of the rest by the end of the 
2008 calendar. Can you make it?
    Mr. Basham. We are on course, yes.
    Mr. Rogers. Even though P-28 was eight months late?
    Mr. Basham. P-28 was, in fact, eight months late; however, 
we have made other decisions, other than the fact that P-28 was 
late, in terms of our approach to securing that portion of the 
southwestern----
    Mr. Rogers. I did not understand that, what did you say?
    Mr. Basham. Yes, P-28 was late on delivery, and you were 
talking about the time line, so when we would have P-28 
completed----
    Mr. Rogers. Yes.
    Mr. Basham. But it has made us go back and take another 
look at how we are going to apply what we have learned out of 
P-28.
    Mr. Rogers. Tell us about that. How are you going to apply 
what you have learned from P-28, and what kind of delay are we 
involved in here?
    Mr. Giddens. Yes, sir, as you indicated, P-28 was always 
the prototype. It was to get a technology demonstrator out 
there.
    So even when I go back to 2006 when we started down this 
path, we could have taken a classical approach to generate 
details, specific requirements, get those out, and then do a 
detailed source selection, so we would be in front of this 
hearing now talking about awarding a contract this summer to 
get started. That is not the role and approach that we took. We 
took the approach to get a technology demonstrator out; and, in 
parallel, we are developing our detail requirements.
    Now, we sit before this sub-committee with a technology 
demonstrator fielded and we are on target this summer to 
develop and deploy our first operational spiral of capability, 
get a deployment decision in the September time frame, and then 
be in a production mode whether we will have our first spiral 
operational capability. And then, depending on available 
funding, we can spread that out to the southwest border.
    I think that is in a much better position than you are 
talking about just awarding a contract to get started this 
summer.
    The decisions we made in terms of schedule, one of the 
issues that GAO raised with this approach was that it had a lot 
of concurrency in it. We have looked for ways to try to drive 
some of that concurrency out; and one of the decisions the 
Commissioner was indicating was we decided this summer: instead 
of deploying broadly to the Arizona border to deploy in two 
sites this summer, basically we bring out those two sites, and 
nail down that configuration, and then by early fall be ready 
to start broadly deploying it along the Arizona border based on 
the priorities from the Border Patrol.
    Mr. Rogers. What did you learn from P-28, and how will you 
apply that to the rest?
    Mr. Giddens. One of the first things we learned on P-28 was 
the need to do robust integration testing.
    Mr. Rogers. All right.
    Mr. Giddens. The way we are looking to apply that is: We 
are establishing both the software development and integration 
facility and a hardware facility. So that in P-28, within the 
eight months and the $20 million, Boeing did not have the time 
or the dollars in that contract to establish that type of 
integration facility.
    So we are going to develop the software, and we will fully 
integrate and test, within all its modules. At the same time, 
we are testing the real hardware in an integration lab. Then we 
will bring both of those together, so that we bring it out in 
that laboratory environment, and minimize the impact, and 
minimize the bugs and glitches that we will find when we field 
it. Now that is a very different approach than what we took 
with Project 28.
    Mr. Rogers. When will we let this out for contract?
    Mr. Giddens. Sir, the activity to develop that software is 
already on contract, and it is on schedule for us to be able to 
start deploying that this summer.
    The hardware is already in the integration lab, so it is 
already in that testing. And then we will have, I think it is 
within the next 45 to 60 days, we will have the contract. That 
should start the deployment process so that we can field that 
this summer, actually in the field and in two sites in Arizona.
    Mr. Rogers. So the contract to deploy will be this summer.
    Mr. Giddens. Yes, sir.
    Mr. Rogers. Is Boeing a part of any of this so far, beyond 
P-28?
    Mr. Giddens. Yes, sir. They are developing the follow-on 
common operating picture, which was to plan, even back in 
December 2006 when we had submitted to the sub-committee, that 
has always been our plan that we had work to do beyond P-28.
    And Boeing is also establishing, under the contract, this 
integration lab to bring all this together in a real structured 
integration and test environment to wring it out before we put 
it out to the field this summer.
    Mr. Rogers. Bottom line, last question: Can you meet the 
deadline we have set for you on building the fence and virtual 
fence before the end of the year?
    Mr. Giddens. By the end of the year, we are on track for 
the 370 miles of pedestrian fence and 300 miles of the vehicle 
fence.
    On the technology side, we will be in a position where we 
have deployed it to two sites by the summer. And our ability 
beyond that starts to be based on appropriations. But we will 
be in a production mode that we will have the configuration of 
operational capability ready to move forward.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Price. Mr. Rodriguez.
    Mr. Rodriguez. Thank you very much, Mr. Chairman, and 
Commissioner and the rest of the Board, let me first of all 
thank you. I know we have had some great success on the border, 
but we also understand that part of the success is also the 
fact that we had a good number of our Border Patrol expansions. 
But we are having some difficulties. And later on, I want you 
to react to the housing that is needed in some of those areas 
for our Border Patrol.
    I am really concerned about our national parks. I have La 
Amistad and the Big Ben, and I have visited Organ Pipe. I do 
not want anything to happen in those areas such as has happened 
in Organ Pipe. So I want as much as I can in those areas in 
terms of security.
    I want to congratulate those efforts that have been done 
regarding stopping a lot of that immigration. And I know that 
part of that responsibility also falls with the legislature, 
that we have failed to pass immigration legislation that will 
allow us to handle this more appropriately than we have.
    We know that a large number of the people who come through, 
come through legally, with vistas. And the ones we have had 
problems with, we just have those 22,000 Saudis that the 
administration has allowed to bring in, and there are some real 
concerns there.
    As it relates to the fence, Commissioner, in all due 
respect, the meetings that I have had have been where I had 
been told where the fence is going to go. I would just ask you 
if there is an opportunity for us, myself, you, or whoever you 
designate to meet with my communities, and that is all I ask: 
If there is an opportunity to dialogue, we need to secure the 
border enough.
    I feel very strongly about that, but we also know and I 
will quote your Chief of Border Patrol that says: That the 
fence is only as good as the amount of time that the Border 
Patrol is given based on that individual jump in the fence. It 
is takes three minutes to jump the fence, that is the amount of 
time that they are given in order to make that happen.
    The other things for the rest, I think we also need to 
abide by our own laws as it deals with private ownership of 
property, and consider that. When all is due and done, I 
understand that security takes priority. Where you are going to 
have to build it, you are going to have to build it. But I 
would ask that you dialogue with us.
    I have some real concerns with recent negotiations and what 
has transpired about where the fence is and where it is not, if 
it is based on those that have political pull and those that 
have resources roles versus poor communities, and there has 
been literature on that.
    So I am hoping that the Border Patrol, or whoever makes 
those decisions, that it is based on security, not on the fact 
that we have some political pull in some of the areas and none 
in the others.
    So I would like, if possible, to have that opportunity to 
be able to just sit down. I have the communities in Eagle Pass 
that were sued. My understanding is that they were reaching out 
and everything, and it sounds great to talk about the reaching 
out, but it is another thing when you hand out lawsuits 
throughout without notices to those individuals, and being able 
to dialogue with them.

                                  SBI

    So I would hope that we have an opportunity to dialogue 
about that because I personally, in my meetings--the last one 
that we had here with the Border Patrol, we were told basically 
where the fence was going to go. It was not an opportunity to 
dialogue back and forth.
    That did not occur with me. I mean you told me where you 
were going to put it. So what I am asking is if there is an 
opportunity to dialogue and if we have to put down, fine.
    As I went through the Border area, I saw where there was a 
need for car barriers in Arizona and some other areas. Texas 
has a natural border there. It is very different. If you have 
not been there, it is difficult to comprehend how to deal with 
that.
    I know when you looked in terms of the Eagle Pass, where 
they were looking at a golf course, and you got that fence 
going right through the middle of the proposed golf course in 
that area. And I know you had those fences going right through 
the junior college in Cameron County, I think, where that was 
going through. I am real pleased that there were some 
agreements that were made there.
    With that said, I would just ask: If there would be an 
opportunity for us to sit down with, especially the Eagle Pass 
Presidio sector, which is a modified sector. I think the Del 
Rio, unless I hear otherwise, because I will be there tomorrow 
and the next day. But the two sectors are the Eagle Pass sector 
and the Presidio sector, and seeing in terms of the rationale 
there.
    In addition, there were some concerns on the outskirts of 
the county right after El Paso with some fencing that might 
cause some problems with flooding and some problems with the 
levies.
    The other biggest issue on private property is: Border 
Patrol people, in terms of when they go through there and the 
damage to the private property there, and those complaints, 
which are minimal in comparison to what you guys have been 
doing.
    With all that said and done, let me also qualify it. The 
only complaints that I have been getting I have 785 miles. I 
have more border than other member of Congress. It is just 
isolated areas. Other than that, you are doing a great job, and 
the numbers are being reduced.
    With that, I would ask the Commissioner, I would like to be 
able to sit down with you, or any of your designees in my 
communities, as it is possible, to dialogue about the security 
on the border.
    Mr. Basham. Mr. Rodriguez, again, the answer to your last 
question is: Yes, we would be more than happy to continue the 
conversation with you on those areas that you have concerns 
with, and share with you the outreach that we have done, the 
process that we have followed.
    All of those things that you cited early on are issues that 
we take very seriously: the impact on environment, the impact 
on the towns and cities. We will work with that, and we will 
work with our partner, the Department of the Interior, working 
on these land-management issues.
    We feel that we have been very open to discussion, and we 
recognize that we are not going to come to agreement on every 
single one of these issues.
    Mr. Rodriguez. I understand that, I understand that. I just 
ask to sit down at least with the communities that I mentioned 
because we feel that we have not had that.
    Mr. Price. The time is almost expired, thank you.
    Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman. I know we have limited 
time. I have got a million questions, but I will just cut down 
to one that I am really curious about. I think the Commissioner 
just said: We are not building a fence in Laredo.
    I have sat in on the side of the Rio Grande with the Border 
Patrol. I am almost right in downtown Laredo, just slightly 
outside of town. He had, during the summer, anywhere from 200 
down to about 20 people come across his two-mile sector every 
night.
    When it got cold, it dropped down to two or three, whoever 
wants to swim a cold river. He showed me how they did it; he 
showed me films of--this end of his sector across, and when he 
responds there, a hundred come across that piece.
    This was just two years ago, okay. This border patrolman 
told me that he had between that road and the river, it is 
basically cane and mesquite. He told me that if they crawled 
through the cane and mesquite, get to the road, sprint that 
three-lane road, they are free and clear.
    Because once they have reached that road and got across it, 
they look like everybody else and they cannot do anything about 
them. So they always wait until they have dried off before they 
make that sprint
    And he told me that that fence would help tremendously to 
slow them down so that he could get to them, tremendously. Then 
you tell me that you are not going to build a fence in Laredo, 
is that right?
    Mr. Basham. Again, based upon the assessment of the sector 
chief there in Laredo, Chief Corell, you had the river, you had 
the carrizo cane. The thinking is that we really do not need a 
fence there. What we need to do is to get rid of the carrizo 
cane, and come up with a way of getting rid of that cane and 
put eyes on that part of the border, using technology so that--
--
    Mr. Carter. So you are going to get the environmentalists 
come in and let you take out native cane along the area----
    Mr. Basham. Actually, that is not what----
    Mr. Carter. That is what they told me they could not get 
done.
    Mr. Basham. No, it is not native. The carrizo cane is not 
native cane. But, right now, we are trying to determine how we 
are going to get rid of the carrizo cane.
    Mr. Carter. I would agree with that.
    Mr. Basham. And by then applying the cameras and the 
sensors, and the appropriate level of Border Patrol staffing to 
be able to see it, and interdict it before they get to that 
three-lane highway on a sprint. A fence is not necessary there.
    There is another occasion where the Border Patrol has made 
a determination that the best effective operational approach 
there is to get rid of the carrizo cane and put in technology, 
get the level of Border Patrol agents necessary to interdict 
and react to those incursions. We do not need a fence. We are 
not going to build a fence where we do not need it.
    Mr. Price. Let me interrupt the gentlemen. We need to get 
to the floor. There will be two votes in rapid succession and 
we will come back. Thank you.
    [Whereupon, a short recess was taken.]
    Mr. Price. Thank you for your patience. We will reconvene 
the hearing now, and turn to Ms. Roybal-Allard.
    Ms. Roybal-Allard. Thank you, Mr. Price. First of all, let 
me thank you for your attention to a trade issue that I had in 
the Los Angeles area. I have some very positive news on that 
front, and I appreciate the work that you and your people did 
on that issue. Thank you.
    Mr. Price. Thank you.

                           MICHAEL TONY DEATH

    Ms. Roybal-Allard. As you know, on February 8th, at 
Honolulu International Airport, a two-week-old U.S. citizen 
named Michael Tony died after he, his mother and a nurse were 
prevented from leaving a locked CBP holding area, despite the 
fact that the child needed medical attention. He was flying in 
to get medical attention because of a hole in his heart.
    I understand there may be a lawsuit, so you may be limited 
in how you are able to respond. But, to the best of your 
ability, can you tell us what kind of training CBP officials 
receive in order to adequately respond to these kinds of 
emergencies, and also what procedures, if any, have been 
changed to make sure that a tragedy like this does not happen 
again?
    Mr. Basham. Let me just respond by saying that we recognize 
it was a very tragic incident.
    But if you look at the time lines that have been published, 
the flight arrived at 5:35, they reached primary at I believe 
5:55; and, into secondary, about 6 p.m. At 6:07, there was a 
response to that child by medical personnel and there was 
medical attention that was given to the child.
    I might also add that at no time, that our information 
provided, had they requested oxygen, either during the flight 
or after the flight, there was no request for any assistance 
once they arrived at the port of entry.
    And I want to tell you our personnel reacted immediately 
and efficiently to that child, and to that situation. To me, it 
is a tragic situation, but for these officers now to be accused 
of not reacting is just a very sad thing in my mind.
    I will let Bob Jacksta, who is the deputy assistant 
commissioner for operations, add to my thoughts.
    Mr. Jacksta. I would just add that it is under 
investigation and we take this very seriously. We have looked 
at our operations; and we have looked at our protocols to make 
sure that not only in Honolulu but all of our airports and 
ports of entry we have personnel ready to respond to any type 
of medical emergency.
    The protocol is that where something happens like that, we 
would immediately call for medical emergency personnel to come 
to the port of entry to assist and help in any way possible, 
and our officers are trained with just basic type of emergency 
capabilities.
    But, as the Commissioner mentioned in this case here, our 
time line is clearly different from the time lines that have 
been out there. The flight did arrive at 5:30. By 6:00 in the 
morning, we were taking action, notifying the 911 at the 
airport, as well as the other security personnel, and they 
responded.
    I think it is important to note that we did take this 
seriously and we responded quickly to the actual event.
    Ms. Roybal-Allard. The concern that I have, and I do not 
want to get into all the details, but I guess one of the things 
that I reacted to was that both the nurse and the baby were 
American citizens.
    As I understand it, the nurse asked: Let me take the baby 
to the hospital while you attend to whatever the issue was with 
the mother. That was denied, and they had been there for about 
a half hour when this incident happened.
    I would just recommend that you look at that a little bit 
closer to see if maybe some adjustments could be made so that 
would not happen again.
    Mr. Jacksta. Once again, we are looking at it very 
carefully. We do have specific emergency procedures to follow 
to insure that we can respond quickly.
    We did work with the air carrier before the actual traveler 
arrived in the United States to make sure that we could get 
them through the process as quickly as possible, and we worked 
with the carrier at the time the individuals arrived before the 
baby became ill.
    I think that we do have a lot of protocols out there and we 
will continue to look at them and evaluate them.
    Ms. Roybal-Allard. Thank you.

                        UNACCOMPANIED JUVENILES

    According to reports in the media and by non-governmental 
organizations, unaccompanied alien children apprehended along 
the southern border continued to languish in Border Patrol 
stations, sometimes up to weeks, and often without receiving a 
proper diet.
    The law requires that these children be transferred within 
three to five days to the Office of Refugee Resettlement. 
According to a Congressional Research Service report published 
last month, roughly 70 percent of the delay in transferring 
these children to the Office of Refugee Resettlement is caused 
by a lack of space at ORR facilities. However, 30 percent is 
due to delays by the CBP in making these transfers.
    When bed space is available at the ORR centers, what are 
the reasons for the delayed transfers, and what are the 
specific standards that CBP is using to protect the health and 
well-being of these children when they are being held in the 
CBP facilities and how are these standards enforced?
    I just want to emphasize that this is an issue that is 
brought to our attention every single year. And every year I 
keep hoping that this is being dealt with because we are 
dealing with children here. So I would like to know what has 
happened since last year when we mentioned this very same 
issue?
    Mr. Basham. Well, as you know, we work in collaboration, on 
the detention removal services, within ICE on these issues. The 
committee has been very helpful in providing additional funding 
for bed space, but we recognize that it is a serious issue when 
it comes to how we are dealing with children.
    I would like for Deputy Chief Colburn to tell you how the 
Border Patrol handles it, and then Bob can tell you how it is 
so handled at our ports of entry.
    Mr. Colburn. Thank you, sir, and thank you for the 
opportunity.
    The mission of the United States Border Patrol is to 
capture those who are entering, or attempting to enter 
illegally, between the ports of entry, and process for the 
administrative or criminal proceedings that are pertinent to 
the individual cases.
    In those with unaccompanied juveniles, or juvenile-
accompanied families, we try to be as expeditious as possible 
in the hand-off to the responsible parties. We work very 
closely with the non-governmental organizations, as well as the 
governmental oversight organizations, in ensuring that they get 
the proper care in the short time that they are in the custody 
of the United States Border Patrol.
    As you are all aware, the mission to hand-off detention and 
removal of persons, including the hand-off of unaccompanied 
juveniles, is the responsibility of ICE's detention and 
removals office,
    What we have done in the past year is to meet with these 
organizations frequently, and to assign, at every sector, a 
representative to deal with any and all questions that do come 
up regarding that. And we of course invite visits to the 
sectors that happen on a semi-annual basis, pretty much all of 
the nine southwest border sectors from Texas to California.
    I think that the number of complaints that you are hearing 
from the non-governmental organizations have diminished 
distinctly in the past several months. A lot of it probably is 
due to education, the ability to have a dialogue with these 
organizations to hear their concerns. But also, to work closely 
with detention removal operations to properly house 
unaccompanied juveniles.
    Ms. Roybal-Allard. As a matter of fact, if I could just 
make this one point. The concern is the conditions that we are 
hearing about. These children are not given a proper diet. They 
are given dirty blankets. They are not allowed to shower. These 
are things that can be easily addressed, and I am hoping that 
there will be immediate change to this, so that these children 
are being treated humanely.
    Mr. Colburn. We absolutely agree with you. We work very 
closely also with the government of Mexico on this.
    As you know, Border Patrol facilities are not long-term 
holding, or over-night holding facilities, so we do not, in 
most places, have showers. We do provide nutrition. We work 
closely with the government of Mexico as to what they consider 
is acceptable nutrition as well. So it is actually a binational 
effort. But again, you are talking about a long-term issue 
which is detention/removal operations and those that handle 
juveniles.
    Ms. Roybal-Allard. I think a lot of work needs to be done 
there to protect these children.
    Mr. Colburn. And we are very happy to work very closely 
with all interested parties.
    Ms. Roybal-Allard. Thank you.
    Mr. Price. Thank you. Mr. Farr.

            CANADIAN BORDER VS. MEXICAN BORDER INTERDICTION

    Mr. Farr. I was very interested in the comment last year 
where we were talking about the role of this committee and risk 
management, and essentially the contrasts between the two 
borders: the Canadian border and the Mexican border.
    I would just like to read the number of apprehensions you 
have made for people who are terrorists, or have terrorist 
material, on the Canadian border versus the Mexican border?
    Mr. Basham. I believe you are referring to--there were 
several incidents where there has been interdictions of 
individuals that we felt had a connection to terrorism.
    If you recall in Toronto, and in New York State, and then 
we had a millennium bomber back in I believe it was 2000. Those 
incidents, if that is what you are referring to, we recognize 
that the threat is not just along the southwest border. The 
threat exists at all of our borders.
    That is why we are continuing to increase the number of 
agents, we are increasing the technology that is being used on 
the northern border. General Kostelnik can give you more 
information----
    Mr. Farr. What were the numbers?
    Mr. Basham [continuing]. On the creation of additional air 
wings up there. So we are addressing the concerns. We have 
tripled the number of Border Patrol agents and increased the 
staffing at our ports of entry.
    One of the reasons that WHTI is--we are working on the 
Western Hemisphere Travel Initiative is to reduce that number 
and types of documents that can be used to enter this country. 
There were 8,000 different types of documents, oral 
declarations of U.S./Canadian citizens just declaring that I am 
Ralph Basham, I am a U.S. citizen, come on in.
    We ended that on January 31st of this year, recognizing 
that we can no longer allow that kind of a process to proceed. 
The Congress has mandated that we not implement WHTI until June 
2009, and we have heard those directions.
    But ending oral declarations and requiring documentation 
for citizenship are things that we feel--and increasing the 
number of queries we're making on the northern border to check 
to see whether someone is a criminal, rapist and murderer, so 
make a lot of efforts.
    Mr. Farr. How many interdictions and nexus to terrorism 
were there on the Canadian border?
    Mr. Basham. I am sorry, would you repeat that?
    Mr. Farr. What is your number of interdictions and nexus to 
terrorism?
    Mr. Basham. How many? Okay, Bob would you take that.
    Mr. Jacksta. Sir, I can give you an exact number right now, 
but I think it is important to note that there are----
    Mr. Farr. Well, you gave it to us last year.
    Mr. Jacksta. I do not have it with me right now, the total 
number of----
    Mr. Farr. Well, just a ballpark number?
    Mr. Jacksta. I would be careful with putting a ballpark 
number out there, sir. I can get it to you. I do not have----
    [The information follows:]

    When travelers at the Port of Entry (POE) are identified during 
primary inspection as a possible match to the Terrorist Screening 
Database (TSDB), they are automatically referred for secondary 
inspection. The TSDB is incorporated into the standard TECS primary 
query. During secondary inspection, the Customs and Border Protection 
(CBP) officers at the POE will review the TSDB match in TECS and 
contact the CBP National Targeting Center (NTC) to resolve potential or 
exact matches.
    When a Border Patrol agent suspects that an individual trying to 
enter the country has a possible terrorist connection, the agent 
contacts the Border Patrol station to conduct additional name checks in 
TECS and begins the same resolution process that is conducted by 
officers at the POE, including contacting the CBP NTC for potential and 
exact matches.
    In both instances, the NTC supports the field officer by 
coordinating with the Terrorist Screening Center (TSC) and by reviewing 
the classified information contained in the Terrorist Identity Datamart 
Environment (TIDE). The TIDE database is maintained by the National 
Counterterrorism Center (NCTC) in conjunction with the Terrorist 
Screening Center (TSC).
    Confirmed positive matches are included in the CBP BorderStat--TIDE 
report. This report is generated by the CBP Office of Intelligence and 
Operations Coordination (OIOC) and is designed to provide CBP personnel 
a monthly, quarterly and yearly snapshot highlighting terrorist-related 
encounters of individuals identified in the Terrorist Identity Datamart 
Environment (TIDE) database. The statistics used in this report 
represent CBP's tabulation of positive TIDE encounters as reported by 
the NTC and Border Patrol.
    Although data regarding positive TIDE matches (PTMs) that were 
refused entry at the land borders were not formally collected until 
calendar year 2008, a rough calculation of the FY 2007 data for PTMs 
refused entry concludes that 65 instances occurred on northern land 
border and no instances occurred on the southern land border. There 
were an additional 213 instances of people refused entry based on 
suspected terrorist connections, but these occurred at airports and 
seaports--primarily airports.
    WARNING: The information contained herein is marked FOR OFFICIAL 
USE ONLY (FOUO) and remains under the control of the Department of 
Homeland Security (DHS), through U.S. Customs and Border Protection 
(CBP). It is being disseminated for authorized law enforcement purposes 
only. Requests for use or further dissemination of any material 
contained herein should be made to: William Houston, Director, Office 
of Policy and Planning, 202-344-2279.

    Mr. Farr. Five, six?
    Mr. Jacksta. There is more than that. I would say that on a 
regular basis, we stop individuals----
    Mr. Farr. This is nexus to terrorism?
    Mr. Jacksta [continuing]. Who have some kind of 
relationship to terrorism that we have to----
    Mr. Farr. On the Canadian border?
    Mr. Jacksta. Yes, sir.
    Mr. Farr. Now how about on the Mexican border because last 
year you did not have any?
    Mr. Jacksta. I cannot give you the number on that, sir. I 
do not have the exact number.
    Mr. Basham. We will have to get back to you with the 
number, Mr. Farr.
    Mr. Farr. The reason I am interested in these numbers is 
because I think it has to do with the this whole testimony. It 
is always based on the Mexican border.
    So it seems to me what we are doing is we are arming the 
Mexican border. We have got every asset that technology can buy 
on that border. Yet, the people who are crossing are the most 
vulnerable, according to arrest histories is the Canadian 
border.
    So we really have two policies. One policy is to keep 
undocumented people out of the United States on the Mexican 
border; and our other concern is that if terrorists are going 
to come, they are probably going to come from the Canadian 
border because that is where the history shows it is easier to 
get in.
    These things are controversial, and the controversy is 
along the southwest border. It is a long border; it is about 
2,900 miles of the whole border, creating these country 
concerns with our neighbor. Yet we are not doing the same thing 
on the Canadian border. If we were, we would have probably them 
screaming equally as loud.
    Yet, from a risk-management standpoint, it sounds like the 
Canadian border is the higher risk than the Mexican border.
    Mr. Jacksta. I would just add, sir, I think as the 
Commissioner mentioned, there are a couple of things that we 
are doing to try to address that.
    The first one that we tried to address on January 31st was 
preventing people coming across the border with just an oral 
declaration, both Canadians and U.S. citizens. That is a big 
step in identifying who is coming across and requiring them to 
identify who they are and their citizenship.
    The other things that we are doing is that we are putting 
equipment up there. We are putting technology for our officers 
to use the radiation portable monitors, both for vehicles and 
trucks. We are putting out big ticket items regarding the 
ability to take back as pictures of cargo coming across and the 
vehicles.
    Mr. Farr. How about the portable radar systems that we 
found were very effective on the southern border? Are any of 
those on the Canadian border?
    Mr. Basham. General Kostelnik can give you some information 
on the air wings we are going to be deploying----
    Mr. Farr. That is what you are flying. These were 
stationary, remember the ones we visited?
    Mr. Basham. Yes, the ground-based radar that we saw out in 
Nohair Hill and at----
    Mr. Farr. Yes. Yes, the one that I felt, as well as the men 
and women on the ground, that that was the most effective tool 
you had.
    Mr. Basham. Well, we actually, Greg, what, 40 additional--
--
    Mr. Jacksta. Thirty-six.
    Mr. Basham. I am sorry, 36. We just purchased 36 additional 
ground-based radar systems. Some are the ones you saw that are 
mobile.
    Mr. Farr. How many of those go to the Canadian border?
    Mr. Basham. I do not think we have any right now, do we? 
Right now, there are only four deployed in the field, the 
others are manufactured by the vendor and they are deployed to 
the Tucson sector and the Yuma Sector, which account for over 
half of all illicit trafficking between ports of entry.
    Mr. Jacksta was referring to ports of entry. Between ports 
of entry, we had 858,000 arrests, and 1.1 million pounds of 
narcotics seized on the southwest border; and only 600 people 
were arrested crossing illegally from Canada into the United 
States last year by border police.
    We have tripled our staff over the last years on the 
Canadian border, and we are bringing a robust technology to the 
Canadian border. We will have 2,200 agents up there by 2010. So 
we are increasing staffing, technology, and, to some degree, 
even infrastructure probably, as required on the Canadian 
border.
    The ground surveillance radars, they are fantastic. My son 
is a border Patrol agent and he called me the other day to say: 
I arrested 52 people. We chased. They split into a group of 25. 
I got reinforcements and we were able to capture them.
    He said: Dad, that ground surveillance radar is fantastic. 
It makes a difference. So we are believers in it, and that is 
why we are acquiring and building more, augmenting what we are 
doing with SBI and SBInet.
    We are very worried, and very concerned, for different 
reasons on the northern border, as we are on the southwest 
border. But both are equally a threat to the security of the 
United States of America.
    The nearly one million entries in the U.S., and nearly two 
million pounds of narcotics interdicted by the Border Patrol 
last year, speaks to part of that threat. Terrorism comes in 
many different ways, not just a foreign-born person.
    But along that line, on the Canadian border last year, we 
arrested 122 people, most of whom did not enter from Canada. 
They happened to be transiting near where we were working up 
there, or were institutionalized up there, when we captured 
them, from foreign countries of a special interest, and we know 
which countries those are.
    On the southwest border, we arrested 297, so significantly 
more than----
    Mr. Farr. What was the first number?
    Mr. Basham. It is 297.
    Mr. Farr. On the southwest border?
    Mr. Basham. Yes, sir.
    Mr. Farr. And how many on the northern border?
    Mr. Basham. It is 122, and it does concern us.
    As we all know, about the discussions about interests and 
groups in vulnerabilities, and we are staffing up both the 
southwest border, the coastal marine, and the Canadian border. 
Thank you.
    Mr. Price. Thank you.

                               LEO STATUS

    Mr. Jacksta, as you well know, our committee included 
language in this year's bill to convert CBP officers to law-
enforcement officer status.
    The budget proposal coming from the administration proposes 
to repeal that provision, repeal the provision that would 
provide law-enforcement officer retirement, and other benefits 
to CBP officers, and would rescind the $50 million provided in 
the 2008 Appropriations Bill to begin this process on July 1 of 
this year.
    Mr. Jacksta. Commissioner, I know that CBP has issued 
public statements supporting the law as enacted, and I am 
confident that you plan to continue the preparations to 
implement the law.
    Mr. Price. Let me ask you about the underlying rationale 
for what we did, though, and the kind of conditions that you 
are facing.
    In your opinion, does recruitment and retention of CBP 
officers remain an ongoing concern, and will these provisions 
be helpful?
    Mr. Basham. First off, Mr. Chairman, I cannot think of one 
thing in my 37 years in law enforcement that has been more 
positive for the people, the men and women out there at our 
ports of entry, than what you have done by recognizing them as 
law enforcement officers.
    Recruitment and retention remains a problem with officers 
transferring to the FBI, or to ICE, or the Secret Service, so I 
feel it would be helpful. However, in answer to your question, 
we recognize, and are moving forward, to implement the law as 
the Congress has mandated.
    And we will, on July 1st, be prepared to convert the 18,000 
CBP officers into that system. Funding, clearly, is an issue 
that we are concerned about for 2009, as you recognized. But I 
believe when I have been out there in the field, the one thing 
that I can tell you that has been extremely positive is what 
you have done for these agents and officers is recognize them.
    Mr. Price. Thank you.
    Mr. Jacksta, would you like to elaborate about the kind of 
steps you are taking, and whether you think those steps are 
sufficient to implement this law in the third quarter of this 
year?
    Mr. Jacksta. Is that the WHTI requirement, sir, or the law 
enforcement----
    Mr. Price. No, I am talking about the Law Enforcement Act 
requirements.
    Mr. Jacksta. Well, from a CBP officer's perspective, as the 
Commissioner mentioned, this is something that is very 
valuable.
    We believe very strongly that our officers, over the years, 
have been performing more enforcement work, and this is the 
recognition that they finally deserve for the efforts that they 
have been putting out there.
    We will work within CBP to make sure that we can move 
forward and we are moving forward on July 1st to give the 
officers the option of joining this retirement system.
    Mr. Price. Well, from my own perspective, and I think that 
of many members, I think repeal is highly unlikely.
    We realize there is a challenge with respect to 2009 
funding, and we intend to apply ourselves to that challenge as 
we write the bill.
    Mr. Jacksta. I also think it is important that it is going 
to help us with recruiting.
    As you know, it is very difficult to recruit people to join 
various law enforcement agencies. We think this is going to be 
an excellent opportunity for people to see their capabilities 
and the ability to be recognized, that is law enforcement.

                                  P-28

    Mr. Price. Thank you. I now want to return to the P-28 
matter that Mr. Rogers explored in some detail.
    And I do want to make sure, though, that we know what the 
take-away is from today's session, as they say, about what you 
are gaining from that effort, from that experience, and what 
your plans are going forward.
    Then, I want to give Mr. Stana, who has worked on this 
considerably, a chance to comment on both looking back and 
looking forward on this episode.
    My basic question is: How do you rate the benefit that the 
Border Patrol has derived from P-28, and what more are you 
looking for?
    Mr. Basham. Well, first off, I would say that I feel that 
the P-28 is in fact adding operational value to the Border 
Patrol. And at the break, I was speaking with Deputy Chief 
Colburn about what they are saying in the Tucson sector at P-28 
and the value that it has added in terms of apprehensions, and 
the Chief has got some numbers here which I think are very 
impressive numbers that are coming out of P-28.
    Mr. Colburn. Thank you, Mr. Chairman.
    Mr. Price. Yes, sir.
    Mr. Colburn. The beauty of what we are being allowed to do 
to call us as the American people the customers with SBI, 
SBInet, in both tax flow infrastructure and the Smart Borders 
technology is that we get to set the requirement. We go to the 
field to our tactical commanders and those on the ground that 
are setting the requirement and telling us what they believe 
they need and what our vision is to SBI, to Greg and to Boeing 
and to those who are involved in the acquisitions of the 
technology or the assistance of design for a fence.
    With that said, with P-28, what we described to them in 
general terms was we need the capability to detect an entry or 
an incursion into this country, an attempt to come in. Besides 
detecting it, then we need to identify and classify is it a 
threat, is it something that we need to respond to. Then we 
need the capability to respond and then finally resolve, 
interdict the rest.
    With that said, just in the last four days, in the P-28 
area that we assigned value to that equipment, Smart Borders 
technology, we had 223 detections the last four days. Of those, 
we arrested 103 people and turned back 55. That is about an 88 
percent to 90 percent effectiveness to call it that of those 
that we were able to detect, identify and classify as a threat, 
meaning foreign-born nationals or mules as we call backpackers 
of drugs, types of threats and risks coming into the United 
States, and actually be able to respond to it and make the 
apprehension or turn them back and get a count of that.
    So we are pretty pleased with that. So far we have 2,495 
arrests that the agents in the field assigned have used the 
technology that is now in place in that area just in the past 
couple of months. Some of those arrests were during the test 
and evaluation portion where agents were given for a short time 
the ability to get hands-on and eyes-on and use the equipment, 
about 1,418 of those arrests. But so far we assigned 2,495 
arrests to the equipment. We are pleased. We still have a lot 
more to do, but we are pleased so far with what we are gaining 
on the border in Arizona with that.
    Mr. Price. All right. Mr. Stana, you can answer in more 
detail for the record obviously, but I wonder if you briefly 
could indicate what your reasons are or what reasons you would 
give for P-28 not meeting its stated goals. Are we talking here 
about errors in contract or task order design? Are we talking 
about some kind of failure to capture in advance all the 
requirements by stakeholders? Are we talking about some 
combination of factors? And then what your expectations would 
be going forward as we have discussed them here today.
    Mr. Stana. Sure. I think I would like to answer it this 
way. There is an expectation gap as we have seen at the GAO 
between what the task order expected on a performance standard 
and what the performance-based contract lists as the 
deliverable.
    In the performance-based contract, there are very carefully 
prescribed--I mean, I am sorry, in the task order, there are 
very carefully prescribed metrics like being able to identify 
95 percent plus or minus 5 percent of all border crossers, and 
be able to classify them. There are others and I can go through 
them, but they are in the documents, and maybe I do not need to 
do that here.
    On the other hand, when the Department says that they met 
contract requirements, when Boeing met contract requirements, 
that may be true, but the contract requirements are much 
broader and more output-oriented like deliver this many towers, 
this many cameras, this many radars. So they could be right 
that they met contract terms, but is it working consistently 
and to the expectation of the performance standard? Not always.
    We had my staff in Arizona just a week before the 
Department accepted. We asked one of the agents who was showing 
us around in a vehicle with P-28 equipment to stop next to the 
tower and turn it on and let us see what it shows. And this was 
an experienced agent who had used it. It took him 10 minutes to 
get a picture, 10 minutes to get a picture. We also found out 
that once the radar acquires a target, the camera is supposed 
to train in on that target, but that is done automatically 
about half the time. The other half of the time, a person with 
a joystick has to manually work the camera to find what the 
radar is finding.
    We heard of hotspots where you can pull a signal down and 
areas where you cannot pull a signal down. So I think it is 
important as we move on and put Project 28 behind us so to 
speak not to lose those lessons. On one level CBP says it was a 
success, and I have no doubt that there could be camera 
acquisitions that are extremely important to the Border Patrol. 
There could be radar acquisitions that are extremely important 
to the Border Patrol. We have had cameras on the southwest 
border for years doing the very kinds of things that we see in 
some hearing rooms where they train on a certain number of 
crossers coming across the border.
    Going on from here, though, I think there are basically 
three lessons, and I think the SBI people are learning these 
lessons, one is that the Border Patrol has to be involved much 
earlier than they were in defining the requirements of the 
system, and there are some open questions still. Should the 
Border Patrol take control of cameras and radars in the 
vehicle? Is that necessary? It is costly. Is that necessary, or 
should they go on the dispatch model that has worked I think in 
these instances CBP is talking about?
    The second thing is--I think Boeing is addressing this--is 
that the equipment and the software need to be tested before 
you field it, before you deploy it. You are going to save 
yourself lots of problems by doing so. That was the eight-month 
delay here. And by the way, I ought to mention we never said 
that the eight-month delay resulted in the three-year delay. 
That is a strawman argument. We never made it.
    And finally, the third thing is is that I think maybe our 
overall expectations have to be tamped down a bit or at least 
made a little more realistic. This is a tough thing to create a 
virtual fence, and to think that you could take off-the-shelf 
hardware and easily integrate it with software and within a 
matter of months come up with a working camera and radar system 
that is going to integrate the signals from sensors and UAVs 
may be one of the lessons we learned. And I think what was 
learned in the deep dive in September is it is going to take a 
little more time than we had hoped to make this all a reality, 
that it works consistently to our satisfaction and expectation.
    Mr. Price. Thank you, sir. Mr. Rogers.
    Mr. Rogers. Let me ask you, Commissioner Basham, about 
DHS's original SBI goal for securing the entire southwest 
border by 2011 and how or if that has changed given P-28's 
delays.

                                SBI GOAL

    Mr. Basham. Going back to the original conversations I know 
that you had with Secretary Chertoff on this particular 
subject, I think there were certain, Mr. Rogers, I think there 
were certain assumptions that were made. And as the Secretary I 
believe discussed at that time, operational control of the 
southwest border depend on several factors, getting a 
comprehensive immigration reform bill through, getting 
additional interior enforcement and increasing the numbers of 
agents that would be working these worksite issues, funding 
that would be necessary to build the fencing and to continue to 
build the virtual fence on the border.
    It would be very disingenuous for me to now sit here and 
give you a date or a time that we are going to be able to 
accomplish that. There are many factors that have to be taken 
into consideration. How are we going to progress on technology? 
Where is the spiral technology going to take us and how quickly 
can we get there? Deploying the number of Border Patrol agents 
needed. Again, the fencing and the vehicular barriers that need 
to go into place.
    So we are going to be pushing to meet those goals. We are 
going to be pushing as best we can to deliver what you have 
required of us. But I cannot with any assurance tell you right 
now that we are going to meet that, and I would not want to 
come back up here and face you again and have to explain why we 
did not meet a date that I am not sure we are going to be able 
to meet.
    And, Greg, you are certainly welcome to jump in here on 
this issue in terms of the----
    Mr. Giddens. Well, sir, as I mentioned earlier, what we are 
working the program to be in a position to do is to field our 
first operational spiral this summer, have a deployment 
decision for a broad deployment after that and then really 
looking at what the available funding would be moving beyond 
that.
    Mr. Rogers. All right. Let me switch----
    Mr. Basham. I would like to just follow up, Mr. Rogers. 
That is not to infer, however, that we are not making 
significant progress in terms of getting the border secure. As 
we have said, we are hiring additional agents. We are deploying 
the infrastructure. We have made progress. The apprehensions 
that are going down between our ports of entry. So we are 
making significant progress in getting control of the border, 
but like I say, to put a date specific where we put our stamp 
on a piece of paper and say it is done, I am just not in a 
position at this point to be able to say that.

                          AIRCRAFT ALLOCATION

    Mr. Rogers. Let me switch gears now onto something 
completely different, and I want to ask General Kostelnik about 
this. In the Caribbean area in the deployment of maritime 
patrol aircraft from Puerto Rico, they told me that three, I 
think three of the planes that were based there have been 
transferred elsewhere, leaving them only with the Dash 8. I 
think I am correct on this.
    Mr. Kostelnik. Well, as part of our normal processes, we 
are always reallocating aircraft within the service and the 
various operating locations based on aircraft ages, mission 
needs and so forth. There are originally in CBP Air Marine six 
C-12 maritime aircraft. These are the three aircraft that you 
are referring to. And originally before the Dash 8 
acquisitions, we had those aircraft, three deployed in Puerto 
Rico and three deployed in Miami doing maritime work, which is 
a very important AOR.
    In our planning, it was always the plan to replace those 
aircraft with the much more capable and dependable Dash 8. That 
is a brand-new Bombardier aircraft. I know that we are in the 
process of fielding, and it was always the intention to replace 
two of the C-12s with that Dash 8. The third aircraft was 
reallocated as part of the northern border branch standups in 
Washington, and that airplane, that third airplane, is being 
now replaced by a loaner aircraft, a chit aircraft in fact from 
Jacksonville.
    The fourth Dash 8, actually we just accepted the green 
aircraft this month. That is being modified for the maritime 
patrol environment, and that aircraft will return to Puerto 
Rico. So, at the end state, you are going to have two brand-new 
modern, more capable Dash 8s replacing the original three C-12s 
that were originally planned to be retired. So there is no net 
plan to reduce our fixed wing capability in Puerto Rico, and 
what you are seeing is a temporary reduction in the number, but 
actually the airborne flight hours that we can dedicate to the 
mission is actually enhanced with the Dash 8 that is present.
    Mr. Rogers. Well, the Dash 8 is a great plane. We took a 
tour on it patrolling Mona Pass. But the mission in Puerto Rico 
being a U.S. territory and being a magnet for drugs and 
smuggled personnel particularly from the Dominican Republic 
across that 60-mile-wide sea headquartered around Mona Island 
is a critical area, and the Coast Guard says that when they do 
not have your plane up there, they do not have any eyes and 
cannot deploy their marine assets. So it is a critical place 
and a critical piece of machinery that we need there, and I am 
hopeful that it can be resolved.
    Mr. Kostelnik. We are working this very hard. In fact, I 
think you may realize thanks to the appropriations we had last 
year we actually this year procured an additional three Dash 8s 
that will be deployed into this scenario, so ultimately we are 
going to have a substantial augmentation to the maritime fleet 
in that area.
    Plus we are in the process of working towards advanced 
technological solutions to augment the manned solutions. I 
think you are probably aware that we are developing a maritime 
variant of our predator capability in concert with the U.S. 
Coast Guard, and in fact this month in the Gulf of Mexico, we 
will be deploying the United States Air Force CREDA Aircraft, 
their developmental predator with an Israeli seaview radar that 
we are working to come up with the joint requirements between 
us and the Coast Guard.
    So we realize the importance of that scenario and are not 
only acquiring new aircraft manned to deal with that scenario, 
we are also adding unmanned aircraft and our potential needs to 
meet those needs downstream.
    Mr. Rogers. Yes. Well, yes. The UAVs, but then you have got 
all that commercial traffic in the Caribbean and the Miami area 
that I wonder about the unmanned aircraft. I am wondering 
whether the FAA is going to be cooperative in all this.
    Mr. Kostelnik. Well, it is a complex arena as you know. 
There is a lot of concerns and issue with that, but if you look 
at the aircraft that we are flying, it is one of the most 
sophisticated around and one of the most experienced. It has 
been in service with the United States Air Force for more than 
a decade, used very effectively overseas. This aircraft is very 
capable.
    With all the command and control facilities we expect and 
the way that air and marine operates through our Air-Marine 
Operations Center out of Riverside, we are completely 
integrated with the FAA. When the aircraft flies, it does fly 
on an IFR flight plan, has IFF to identify itself from other 
aircraft. And we believe that this aircraft and our mission and 
where we fly and when we fly and how we fly it, we think we can 
safely fly this in these areas.
    I mean, we will work very closely with the FAA. In fact, 
this maritime demo that is going on this month in Florida, one 
of the desired outcomes is to see some of the interface issues 
that we might have working through the Air Force ranges in the 
Gulf of Mexico and then in the airspace in the Key West AOR to 
determine what the requirements might be. So we are very aware 
of those things, working very closely with the FAA to resolve 
those issues downstream.

                          BIOMETRICS/10 PRINT

    Mr. Rogers. I want to ask any of you that would like to 
respond, but down in Puerto Rico, we observed the Coast Guard 
when they intercept smugglers or particularly people trying to 
escape to the U.S. territory on board the Cutter. Now they are 
able with a mobile unit to take the 10-fingerprint test and 
that instant check it against the database to determine whether 
or not the person that they have apprehended is a repeat 
offender or wanted for arrest or whatever or a terrorist.
    Mr. Basham. Right.
    Mr. Rogers. And that is apparently having really good 
effects. Am I correct in that?
    Mr. Basham. You are absolutely correct. And I can let Bob 
certainly address that.
    Mr. Mocny. Absolutely it has. Well, just in the short time 
that we have put this together, the year before, the Coast 
Guard had one prosecution in that year prior. So far since we 
have had the program in place, we have 118 individuals now 
prosecuted, many of whom have been brought back to the U.S. and 
prosecuted for crimes they have committed here in the U.S. So 
it is a resounding success working with the Coast Guard in 
deploying the biometric devices.
    We just began an expansion of that now to the Florida 
straits, so in addition to the Mona Pass, we will now be 
deploying these devices also to the areas in the Florida 
straits. So the Coast Guard obviously has seen this as a very 
positive development for their officers. We will continue to 
deploy this as needs be and again to satisfy their operational 
needs.
    Mr. Rogers. I have just got to tell you I have been on this 
stuff for 26 years or whatever now on the old Commerce, 
Justice, State subcommittee that funded the State Department 
and the old INS, and to see that operational, and we actually 
ran it while we were on the Cutter out at sea, to see that work 
and to see instantaneously a flashback from databases 
confirming or not confirming the identity of somebody on board 
a Cutter in the middle of the sea was absolutely thrilling. I 
have to tell you that. We need to use more of that kind of 
technology to do the job we are doing.
    Mr. Basham. We are going to be going to Puerto Rico next 
week and looking at exactly what you saw down there and so 
would be happy when we come back to sit down with you and talk 
to you about some of the thoughts that we gained from that 
trip. And General Kostelnik is going to be going down with me 
as well, so when we get back, we will try to reach out.
    Mr. Rogers. I was very impressed with all of what you are 
doing there in that vicinity because it to me was a microcosm 
of the Department of Homeland Security, coordination between 
Coast Guard, ICE, Border Patrol, CPB, Air, US-VISIT, everybody, 
and that is a model that I would like to see us repeat in other 
places. So I would like to hear.
    Mr. Basham. And I think you have been to Rejada South if I 
am not mistaken in Key West, which is also a piece of all of 
that, being able to look in and interdict what is coming at us.

                             POE OWNERSHIP

    Mr. Rogers. Yes. Now to finally wind up in a wholly 
different topic, we talked before on the points of entry. 
Originally, of course, they are owned by GSA and maintained by 
GSA in an era and it was done that way in an era when we had 
Agriculture and Commerce and FBI and everybody else on the 
borders out those points of entry. But now that Homeland 
Security is the sole occupant of the points of entry, I think 
DHS needs to own and operate those points of entry, because we 
can modify them and change them as we get the money to 
accommodate the new needs of US-VISIT and all of the agencies 
within DHS. We have had some discussions about that. Are we 
going anywhere with that?
    Mr. Basham. Well, Mr. Rogers, we have had numerous 
conversations with GSA on this point, and we are concerned at 
the funding level for our ports of entry. I think in 2009, I 
think there is 78 million----
    Mr. Jacksta. Seventy-four.
    Mr. Basham. Seventy-four million dollars that has been 
budgeted for our ports of entry. Our estimation of what it is 
going to cost us to expand and improve the ports of entry is 
something in the neighborhood of $5 billion. What I would like 
to see, what I would like to propose and have discussion on, do 
we now need to create for our ports of entry an SBInet 
approach, an SBI approach where we are looking at the 
infrastructure, we are looking at the staffing, looking at the 
technology that is going to be needed to meet the demands that 
we know we are going to face in the years to come, putting 
together what we would propose is $500 million for a 10-year 
period to address this problem.
    We do not necessarily feel that we have to have the money 
as long as we would have an assurance that if that money were 
appropriated to GSA that that money be walled off for 
infrastructure for our ports of entry. But we are going to face 
a very, very serious challenge in the years to come if we do 
not do something about the port infrastructure.
    Mr. Rogers. Mr. Stana, do you have a comment on that?
    Mr. Stana. Well, in addition to GSA owning about 96 ports, 
you have private ownership of about 24 ports, which makes this 
even more difficult to accomplish. But I think your central 
point is correct. You do not take a 1960 Chevy and put GPS on 
it and a satellite radio and power windows and brakes and call 
it a new car. Perhaps we need to take a more comprehensive look 
at what a 21st century port should look like, particularly when 
we are getting more and more concerned about easing the passage 
of legitimate travelers and cargo through the ports.
    Mr. Rogers. Well, I just do not see the cooperation between 
GSA and DHS at the points of entry in modernizing them to 
accommodate the new needs that we have with US-VISIT and all 
your other operations. And the longer we do not have that 
conversation, the more costly it is going to become, and two, 
more importantly, we are going to miss some important things 
that we need to do.
    Mr. Stana. Well, you are right, because GSA has a different 
priority system, and ports might not have as high a priority as 
they would have in DHS.
    Mr. Rogers. Right. Exactly. Will you pursue that, 
Commissioner?
    Mr. Basham. I certainly will, and I will get back to you 
and let you know what conversations we have.
    [The information follows:]

    CBP operates and is the primary tenant at each of the ports of 
entry while the U.S. General Services Administration (GSA) is the 
primary owner or lessor from various public/private entities. 
therefore, it is essential that both organizations work in concert to 
ensure that the site and port infrastructure effectively supports 
operations. To properly accommodate this reality, CBP continues to 
partner with GSA to address the balance of facility requirements in the 
land port inspection facilities. Specifically, this partnership is 
premised on three key objectives: Increasing the funding available to 
develop and sustain land port infrastructure, reducing the cost and 
time that GSA requires to deliver land port enhancements, and improving 
the performance of the resulting facilities. Over the coming fiscal 
years, both CBP and GSA plan to continue building upon this partnership 
to implement this new model across the inventory.

    Mr. Rogers. Thank you.
    Mr. Price. Thank you. Mr. Rodriguez.
    Mr. Rodriguez. Thank you very much. And, Commissioner, 
thank you for agreeing to dialogue with me on those issues, and 
I look forward to working with you. And I agree, Mr. Giddens. 
There are some that are not going to yield, but we have got to 
do what is right in securing our borders and making sure that 
that occurs.

                             NATIONAL PARKS

    I want to follow up on our national parks. On both borders, 
we have a large number of national parks, and I want to make 
sure, maybe get some feedback from you as to it, because we 
have a million people, for example, at La Amistad. It could 
easily double to two million. It is beautiful. We get 350,000 
at Big Ben, and right now they are pretty secure. In all 
honesty, as far as I know, there are no problems, but I do not 
want it to get out of hand such as we have had in others. And 
we want to make sure our Americans can go out there and take 
advantage of those beautiful parks. And I know that there is a 
good number on the Canadian border. And I wanted to get some 
feedback from you, either from yourself or the Border Patrol, 
on those issues.
    Mr. Basham. Yes. We have had, as you well know, many 
discussions with the Department of the Interior, Bureau of Land 
Management, on these issues. And you mentioned Organ Pipe, and 
we recognize that we have a challenge there. But in terms of 
what has happened in the discussions, I will let the Deputy 
Chief give you some idea of what we have been doing in those.
    Mr. Colburn. Thank you. We do have a very good and close 
working relationship with the five major bureaus in the 
Department of the Interior. That helps a lot since many of the 
publicly stewarded lands fall within the auspices of DOI. 
Department of Agriculture, Forest Service Lands, for instance, 
also has a big piece along the border.
    Where I hail from, Yuma Sector, and I did have the honor of 
hosting many of you on visits to the sector while I was still 
chief there before coming up here as deputy, 96 percent of all 
of the lands abutted to the border between the U.S. and Mexico 
there are publicly stewarded lands either with U.S. Fish and 
Wildlife Service, Bureau of Reclamation, Bureau of Land 
Management, Department of Defense and Travel Nations. So it is 
a quite a mix.
    That is in contrast to Texas where most of the lands along 
the border are privately owned, as you know, but you do have 
some parts as you mentioned. The Organ Pipe Cactus National 
Monument even on an environmental website was listed as the 
most dangerous park in America I recall. Having worked there 
myself, the illegal alien and narcotics trafficking, smuggling 
that was going on in that park five to seven years ago was 
dangerous enough that Kris Eggle, a park ranger working closely 
with two Border Patrol agents on an interdiction, encountered a 
narcotics trafficker, a hitman with an AK-47, and unfortunately 
Kris lost his life in the line of duty working closely with the 
U.S. Border Patrol.
    So it is a shared mission, shared interest when it comes to 
securing America's borders. Their concerns with Department of 
the Interior of course is protecting the American public who 
want to enjoy and use those American public lands. Ours is in 
securing good order.
    Mr. Rodriguez. What do we need to do I guess? And maybe 
this was I guess to my Chairman in terms of how we make sure 
that they get resources or you get resources to make sure that 
that comes. And that also brings me to the other issue.

                            CAVE ERADICATION

    As we look at the border and as we look at the other 
committees that allow, for example, now Mexico to get 1.4 
billion or whatever is recommendations from, when we do 
something such as getting rid of the cane on this side, it also 
would make sense to get rid of the cane on the other side, 
especially in Texas with the river. And it just gives you a few 
more minutes or even more time there, and so I wanted to see if 
you would comment on some of those.
    Mr. Colburn. I think that first part talking about working 
with our partner agencies on the U.S. side, we honestly could 
not do it alone without the help of the Department of Interior. 
For instance, we are actually clearing invasive brush along the 
Colorado River that forms the border where you saw it when you 
visited Yuma Sector. We are actually doing that. We could not 
have done that without the assistance of Department of 
Interior, so that is working very well in partnership.
    With the government of Mexico, with the Border Safety 
Initiative, the accords that we have with them and the funding 
that probably will happen that you mentioned, we think that the 
ability to do that in a binational effort probably exists 
greater now than ever before certainly in my nearly 30 years 
doing this have I seen the relationship with Mexico in not on 
our watch securing the America borders. They share that 
interest. They do not want an act to happen in this Western 
hemisphere just as we do not either, and that is very 
encouraging with our partners to the south.
    Mr. Rodriguez. And I guess, Commissioner, that would be an 
area that as we look in doing certain things on this side where 
the Mexican side could be helpful to both sides.
    Mr. Basham. Well, and I think you are familiar with some of 
the programs that we are initiating down there on the border, 
Streamline where we are prosecuting illegals, Oasis where the 
Mexican government has agreed where we will not prosecute some 
of these apprehensions, the Mexican government takes them back 
and prosecutes them on the Mexican side, and we have been very, 
very engaged with the law enforcement elements in Mexico on our 
border violence protocols. So there is a lot of very good work 
aside from the stewardship of the public lands, a lot of good 
work, a lot of effort just from an enforcement to stop the 
flow, which is really the problem.
    Mr. Rodriguez. Okay.
    Mr. Basham. That is the problem.
    Mr. Rodriguez. And thank you, Commissioner. And once again, 
thank you for agreeing to dialogue with me on the border issues 
regarding the fence. Thank you.
    Mr. Price. Thank you. Mr. Farr.

                            US-VISIT PROGRAM

    Mr. Farr. Thank you, Mr. Chairman. I have got a lot of 
questions racing through my mind. I am sure I am not going to 
have time to get them all out, so I am just wondering if you 
could get me some information. I would be curious as we compare 
these borders if you could give the committee the manpower that 
we have on the Canadian border and the value of equipment and 
assets, total air, all the other radar, so on, all the other 
assets of equipment along the Canadian border versus along the 
Mexican border.
    I want to go specifically to one thing that I am really 
concerned--the US-VISIT program. And I understand that under 
that the goal is to collect, store and share digital finger 
scans and digital photographs essentially for everybody coming 
in and out of the United States?
    Mr. Mocny. That is correct. Foreign nationals coming into 
the United States.
    Mr. Farr. But the goal is to sort of know where the bad 
guys are, but it is going to happen for every tourist coming 
in? So they suspect that everybody who tours the United States 
is a potential threat?
    Mr. Mocny. Well, the goal really is to identify people who 
they really are, and we want to make sure that the people who 
are showing up at the ports of entry are in fact the rightful 
holders of that visa. So the process starts with the State 
Department when they take the initial fingerprints of the 
individual.
    Mr. Farr. So every consulate, American consulate abroad who 
issues those visas will have the equipment for digital 
photography and digital fingerprinting?
    Mr. Mocny. They do now.
    Mr. Farr. They do now?
    Mr. Mocny. Uh-huh.
    Mr. Farr. And so how do you collect that on the port of 
entry?
    Mr. Mocny. Well, it is the same way they collect it at the 
consulates overseas.
    Mr. Farr. I mean, how do you verify it at the port of 
entry?
    Mr. Mocny. What happens simply is when the person gets a 
visa, they are taking 10 finger scans now. We are transitioning 
from a two-finger scan process to a 10-finger scan process, and 
so those 10 finger scans and the photograph are taken at the 
consulate and embassies overseas. That is married then to the 
visa that they are given.
    When that individual shows up at a port of entry, then a 
verification of those prints, and sometimes it is just the slap 
of one hand now at those locations where we have the temperant 
device, or it may be still--again, we are in a transition 
phase--it may be the two-finger scans.
    Mr. Farr. So every single passenger (presuming they are all 
carrying visas) will have to do that?
    Mr. Mocny. Any foreign national carrying a visa or coming 
under the visa waiver program. And there are slight exceptions 
such as diplomats do not go through the process.
    Mr. Farr. And then I am just curious from a tourism 
standpoint, how long does it take to process an A-380 with 500 
passengers coming out?
    Mr. Mocny. Well, no longer than it did last year or, excuse 
me, no longer than it took before we had the biometrics. We 
have been able to incorporate into the inspection process the 
process of taking the finger scans and the photographs so that 
you have basically no wait time increase based on the 
biometrics. You have an increase in security but without any 
impact on the facilitation.
    Mr. Farr. And what about those places where we only have a 
few consulates, like Brazil? It would be like being a resident 
of Los Angeles and having to go to Chicago to get your visa.
    Mr. Mocny. Yes. I know the State Department is looking at 
ways we can facilitate that. They are looking at pilots where 
they can perhaps use video conferencing to take the biometrics 
such as that, but they are conscious of that issue and I think 
they are trying to find steps to make sure that when we still 
need the person to come into a consulate in person or at least 
be interviewed by the consulate in person that we have to get 
their biometrics, so they are trying to find new technology 
that might allow for that to happen in more remote locations.

                                  EXIT

    Mr. Farr. And how much additional workload do you think you 
are going to have now that you are going to be detect 
overstays?
    Mr. Mocny. Well, there is an impact to ICE, no doubt about 
it. When we send the 250 cases to ICE every week, they have to 
prioritize those cases and they have to go over the most 
egregious of those who are overstaying. The fact of the matter 
is people do come here and will violate their visa, but we are 
now in a better position to identify who those are and ICE now 
has with increased resources been able to go out and make 
arrests and remove people who are overstaying their visas.
    Mr. Farr. I would be interested in that array of who those 
people are. I mean, how many are students?
    Mr. Mocny. I am sure we can get that to you, sir.
    Mr. Farr. Okay. When do you think all this is going to be 
in place so it will be seamless?
    Mr. Mocny. Well, we certainly have the----
    Mr. Farr. Your testimony is that it is all sort of a work 
in progress.
    Mr. Mocny. Certainly. Well, we have the entry in place, and 
we are now again transitioning from a two-finger scan process 
to a 10-finger scan process. Our next challenge is to complete 
the exit, and so our plans are through 2009 to implement 
portions of the exits for air and sea but also to begin looking 
at how we might tackle that at the land border ports of entry.
    Mr. Farr. And how many ports of entry will you have them 
operational in?
    Mr. Mocny. Well, we do have biographic exit right now, so 
every port of entry, every air and sea port of entry where 
people depart from the airlines, and this is something that CBP 
monitors quite vigorously, people have to, the airlines have to 
provide electronic manifests of those individuals departing the 
U.S. So we have a biographic record of their exit. What we are 
working on now is a biometric record of that exit, and that is 
working with the airlines and the cruise lines.
    Mr. Farr. And can you make that? Because you indicate in 
your testimony there you are getting an $85 million decrease in 
your budget.
    Mr. Mocny. The portion of the budget required for the exit 
is well-funded. The reduction there has to do with having 
completed the interoperability issues with the FBI and the 
completion of deployment of temperant devices. So we asked for 
the money that we required to move to temperant and to 
interoperability with the FBI. That will be concluded in large 
part by 2008, and so we will be able to move now to the exit 
portion.
    Mr. Farr. Thank you. My last question is to the GAO about 
whether they think that the exit program will be completed by 
2009.
    Mr. Stana. We have not seen the plan yet, so we do not have 
a basis to judge. Air exit pilots have not been very 
successful, but we do not know if they are going to go to a 
different mode of exit collecting data. They tried to use the 
voluntary kiosks, and I think there was only about a 24 percent 
success rate, and the goal was 70 percent.
    Land is a tough nut to crack, frankly, because right now 
the technology would permit a mirror image of entry to exit, 
which would cause all kinds of construction and technology 
upgrades and things like that. And frankly, from what we 
understand, it could take another five to 10 years before the 
technology is mature enough that you could have an exit 
capability that would capture the kinds of information to 
verify someone's exiting without inconveniencing or slowing 
down people trying to exit the country.
    But as for the 2009 air plans, we would have to look at 
their plan before passing judgement. The tendency of the 
airlines has been to push their operations out. You can get 
your boarding pass online in your home. You do not have to 
contact the airlines anymore. And so if we are counting on the 
airlines to do something at the airports, that may be a 
challenge. They may balk at that. So we will just have to see 
what the plan is.
    Mr. Farr. Well, we are also moving for perimeter security 
where you can have your baggage checked in before you even get 
to the airport.
    Mr. Stana. Yes. It is going to be a challenge, particularly 
at land ports.
    Mr. Farr. Well, I am concerned. Jon Porter and I are chairs 
of the Tourism Caucus, and there is a lot of pushback in the 
tourism community about the inconvenience that this going to 
cause. You know, members of Congress do not see it because we 
always get VIP status, particularly when we are going to 
another country. And we do not have to stand in those lines and 
go through all that stuff.
    Mr. Stana. On the other hand, I would say that this is a 
system that is required by law, and estimates have it that 
about a third of the illegal alien population in the United 
States came through ports of entry on a visa and overstayed. 
So, if we are talking about a comprehensive method to address 
this issue, then some sort of an entry-exit system would seem 
to be a part of that.
    Mr. Mocny. If I could, we have been endorsed by the 
Discover America Partnership, a group I am sure you are well 
aware of. We work very closely with the travel and tourism 
industry, understanding that we have an economic security issue 
to worry about as well. So that is why we kind of do things in 
increments. We test to make sure we get it right. We have the 
10 locations right now where we have the temperant devices. We 
are not going to move beyond the 10 until we get that procedure 
right so that there is not a major impact on operations for 
CBP. We are confident that we can do that, and then we will do 
a full deployment.
    So between Discover America Partnership, TIA, Roger Dow, 
who we meet with on a regular basis, I think we are very well 
versed on what US-VISIT has done, and I think if you ask the 
travel and tourism industry, I think they will speak highly of 
what we have done to make sure that we are not kind of 
sacrificing our economic security on the altar of security.
    Mr. Farr. Well, they are highly concerned. Airlines do not 
want that role, they are concerned that they will take on extra 
burden without being paid for it.
    Mr. Price. Thank you. I appreciate the gentleman's line of 
questioning, and we will be asking Mr. Mocny and the GAO to 
elaborate some of these answers and to answer some additional 
queries about the process going forward for US-VISIT.
    I want to just clear up something, Mr. Mocny, one of your 
answers to Mr. Farr. I understood you to be saying that you 
will complete the air-sea exit solution deployment in fiscal 
2009 or that you anticipate being able to do that. Is that 
correct?
    Mr. Mocny. On the air-sea side, we are fairly confident 
that in working with the airlines and the cruise lines that we 
will have a solution, and our original goal was the December 
2008 timeframe. We of course are having some administrative 
issues in getting an NPRM out, a notice of proposed rulemaking, 
so we will continue to work with OMB and with the airlines and 
cruise lines to make sure we have a solution that meets both of 
our operational needs, understanding that the airlines are kind 
of modifying their operations as well.
    Mr. Price. Fairly confident, those are your words?
    Mr. Mocny. Fairly confident. I cannot sit here and commit 
to an absolute date. We had planned to have some movement on 
this in the December/January timeframe, and frankly, we are a 
bit behind on that. But I think once we have a rule out and 
once we get the airlines to comment on what role we want them 
to play in this that we will be able to move forward with this.
    Mr. Price. We all understand how difficult that land exit 
solution is. I will remind you that in last year's 
appropriations bill as written by this committee, we asked for 
total candor on this. And we are not looking for deadlines that 
keep getting pushed out. We know it is a terribly difficult 
problem with a lot of potential complications, and we are not 
just looking for good news. We want an honest assessment of 
what is possible here, and as I read you today, you have been 
very cautious in what you have promised.
    You are saying that you are going to have a land exit 
solution report by January of 2009, after which you will begin 
a planning process and incremental deployment. So that counts I 
think as caution. Would you venture to say, though, what kind 
of land border exit process you would expect to have in place 
let us say by the end of fiscal 2010?
    Mr. Mocny. Again, I think it is perhaps important to talk 
to kind of relate it to what we have been talking about so far 
with Project 28. We want to make sure that we get it right 
first. We have to make sure that we are getting the 
requirements down and that we are not just moving forward just 
to move forward. We want to make sure that we understand the 
environment that we are in at the land border, and there are 
some things that we can do.
    And so I am sure the report will talk about perhaps the 
pieces of land border exit that we can bite off and chew rather 
easily, and that would be perhaps the pedestrian where you have 
the ability to have a controlled process by which people are 
leaving the U.S., walking through a turnstile, we are able to 
capture a biometric whether it be a fingerprint, face, iris, 
some type of biometric.
    So there are some things I believe that we can do. I think 
it is fair to say that I cannot commit to a land border exit 
for vehicles traveling at 45 miles an hour driving into Canada 
or Mexico and also then taking a biometric during that process. 
And so that is where we need technology to catch up to us.
    What we plan to do in 2009 with the money that you will be 
hopefully providing to us is the planning exercises, engaging 
industry, making sure that we tell them what our requirements 
are much like we did with the temperant devices. And those did 
not exist a couple of years ago. We now have a device that we 
asked industry to engage us with, and they have kind of met our 
requirements. I am confident that the industry can come up with 
a solution. It may not be right away. It may take five years, 
as Mr. Stana talks about, but I believe there is a solution out 
there eventually.
    What I would like to be able to do, though, is walk before 
we run and make sure that we cannot overcommit and put out in 
the areas where we can do it, whether it be a pedestrian, where 
buses arrive, where ferries arrives. We can begin that 
incremental process of improving the land border exit process 
and then work towards a solution, which of course the vast 
majority of which are vehicles crossing through.
    Mr. Price. Thank you. Mr. Basham, we are aware of your time 
constraints, but please.

                           FINISHING COMMENTS

    Mr. Basham. I just wanted to add some points to Mr. 
Rogers's question earlier about the infrastructure at the 
ports. This is critical as we move forward with the technology 
that we make sure we are building the kind of infrastructure 
that is going to give us that capability. It has to be a 
coordinated integrated effort and that this is a serious 
problem that we have to face.
    Mr. Price. We do appreciate your time constraints. As we 
move on to these next steps of SBInet and the common operating 
picture, which of course includes a substantial appropriations 
request, $325 million for SBInet technology, nearly a 50 
percent increase while we are dropping the fencing and 
technical infrastructure funding, as we move into this, 
Commissioner, I know you are trying very hard to learn the 
lessons of P-28. I assume that it is your intention to be 
certain that Border Patrol agents and the Border Patrol 
organization are involved at the outset and throughout the 
process to ensure that your requirements are fully met in 
developing the common operating picture and the ultimate SBInet 
solution.
    Mr. Basham. Mr. Stana pointed out earlier that there were 
lessons learned, and we are learning as we go. And we do 
completely understand that the Border Patrol has to be engaged 
from the very beginning in providing those requirements that 
then is delivered to the program office so that we are building 
toward--my fear, and I think you and I have talked about this 
before in the past, I do not want to build something that a 
Border Patrol agent puts in the glovebox. We have wasted a lot 
of time. So it has to be something that adds value. SBInet is a 
tool of the Border Patrol. The Border Patrol is not a tool of 
SBInet. That is where we are going to.
    Mr. Price. All right. Thank you. We will have some 
additional questions for Mr. Giddens and others about this 
program going forward, but we do need to wrap up today.
    Mr. Rogers, do you have any parting questions?
    Mr. Rogers. No questions. I will be really brief. I got to 
thinking after I made a comment earlier this morning about the 
Cutter and the Mona Pass, the fingerprint IDENT check against 
the records, and I said there was a 10-point check. It is a 
two-point check. But that gets us about 90, 95 percent there, 
does not it?
    Mr. Mocny. We are still catching people with that.
    Mr. Rogers. Yes. Well, thank you for your testimony and 
more importantly, thank you for your work. It is a tough, tough 
job we have given to you, the country has given to you in these 
chores that you have been assigned to, and do not mistake our 
questioning for being nonsupportive. We are very supportive of 
what you are doing. We want to try to help you achieve the 
goals that the country wants for you and us, and we wish you 
good luck.
    Mr. Price. Let me thank you as well and express the hope 
that you have found this exchange useful this morning, 
indicative of concerns of a wide range of committee members and 
of the kind of discussions we are going to want to have going 
forward about the budget, but we are appreciative of all you do 
and very appreciative of your taking the time to come together 
here this morning. It has been a very helpful session for us, 
and we are grateful.
    Mr. Basham. Thank you, Mr. Chairman.
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                                          Wednesday, April 2, 2008.

               CARGO CONTAINER AND SUPPLY CHAIN SECURITY

                               WITNESSES

STEPHEN FLYNN, FELLOW, COUNCIL ON FOREIGN RELATIONS
CHRIS KOCH, PRESIDENT & CEO, WORLD SHIPPING COUNCIL

                  Opening Statement of Chairman Price

    Mr. Price. The subcommittee will come to order. This 
morning we will hear from two panels on the challenges and 
priorities facing our Nation to secure containers, cargo, and 
the supply chain from radiological and nuclear attacks.
    Our first panel will consist of Stephen Flynn, Senior 
Fellow for National Security Studies with the Council on 
Foreign Relations, and Christopher Koch, President and CEO of 
the World Shipping Council. These gentlemen will provide 
perspectives on these issues from outside the Department of 
Homeland Security.
    When the first panel concludes we will hear from Jayson 
Ahern, Deputy Commissioner of the U.S. Customs and Border 
Protection, and Vayl Oxford, Director of the Domestic Nuclear 
Detection Office, who will address this issue from inside the 
Department of Homeland Security. And, of course, they will help 
us focus on the fiscal year 2009 budget request.
    The vulnerability of the U.S. economy, and, in fact, the 
international economy to a weapon of mass effect keeps many 
public officials awake at night. One such nightmare scenario 
involves nuclear material from the former Soviet Union that 
arrives at our shores aboard a ship via a cargo container. We 
very much hope that our Homeland Security appropriations 
investments will keep this threat a hypothetical.
    DHS has requested $955 million for its cargo and container 
security efforts in fiscal 2009, about $100 million above the 
fiscal 2008 funding level. Within this total, $564 million is 
for DNDO to research, develop, and acquire systems that will 
better detect the presence of radioactive and nuclear devices 
entering our country. $16 million is for S&T to research and 
develop next-generation cargo security devices. And $376 
million is for CBP to process a daily average of 70,200 sea, 
rail, and truck containers and 304,000 private vehicles, not to 
mention small boats and private aircraft.
    Today we want to discuss reducing risk, whether based upon 
improved knowledge about containers and vehicles or on more 
effective screening. We also expect to hear how ongoing 
research efforts are bearing fruit. During this hearing we will 
delve into the following topics. By 2012, under the 9/11 Act, 
all cargo bound for the U.S. must be scanned before being 
loaded on ships. We want to discuss DHS's Secure Freight 
Initiative and other ways to meet this requirement.
    In January, our subcommittee visited two of the 58 
Container Security Initiative ports, the CSI ports. We saw 
significant challenges, particularly in achieving the staffing 
levels and continuity CBP needs to effectively manage its 
collaborations with foreign governments and customs agencies. 
Is there a better way for the U.S. Government to run this 
program?
    Thirdly, DHS budget materials project that the rate of 
scanning of sea containers, those that enter through U.S. 
Seaports of entry, would rise 50 percent, from 4 percent in 
2007 to 6 percent in 2009, but the rate for scanning containers 
arriving in the U.S. By truck and rail would fall by 15 
percent. How do we explain any reduction in scanning?
    Fourthly, decisions to invest in next-generation radiation 
detection technology requires tradeoffs between the need to 
ensure technology is accurate and cost-effective and the need 
to rapidly field the technology to reduce a critical 
vulnerability. We will want to discuss those investment 
decisions and their status.
    New filing, new data filing requirements are being 
promulgated to improve the quality of information DHS uses to 
screen and target development of the Global Trade Exchange 
promises to provide much more information about the supply 
chain, but it raises questions about how such information will 
be gathered, managed, and protected.
    We would like to hear from the witnesses about the shared 
and conflicting interests of government and the private sector 
in reducing risk in the supply chain. How should the 
obligations and costs of changing business processes and 
guarding sensitive information provided to government or third 
parties be shared?
    Sixth, efforts to develop advanced container or conveyance 
devices have been underway for almost 5 years. What should our 
goals be? Partnerships with importers, exporters, shippers, and 
carriers help reduce risk because they give us more information 
about who is moving goods and containers, but such programs are 
only as valuable as our confidence in our partners, which 
requires regular monitoring, something government often does 
not do well.
    So this is an ambitious range of topics, and we look 
forward to a full discussion with our panels today.
    We are going to ask everyone to limit their oral remarks to 
5 minutes, understanding that the entire written statement will 
be placed in the record. As I said earlier, we will begin with 
our first panel of outside experts and then turn to Mr. Ahern 
and Mr. Oxford.
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    Mr. Price. Before the first panel begins, though, I want to 
turn to Mr. Rogers for any comments he wishes to make.
    Mr. Rogers. Thank you, Mr. Chairman. We welcome our guests 
from the Department and from the real world with us today. As 
the Department passes its fifth anniversary, the Department 
continues to seek the appropriate balance between the demands 
of commerce with that of needed security. While finding that 
balance with the more than 22 million cargo containers that 
enter the U.S. each year has proven to be as elusive as it is 
challenging, it is undeniable that real progress has been made.
    In 2007, CBP with the help of DNDO, expanded the Container 
Security Initiative to 58 international seaports, covering 86 
percent of in-bound containerized cargo to the U.S.; validated 
over 3,000 supply chains, representing a 27 percent increase 
over 2006, and, of this total, over 600 are revalidations, 
marking the first year CBP's C-TPAT program began a systematic 
process of revalidation; deployed 142 new radiation portal 
monitors in support of scanning 100 percent of containerized 
cargo crossing the southern land border, 98 percent of all 
seaport containerized cargo, and 91 percent of containerized 
cargo crossing the northern land border; conducted more than 
17,000 trade enforcement seizures valued at $359 million; 
deployed the next generation of advanced targeting and manifest 
processing systems--including the electronic truck manifest, e-
Manifest--to 99 percent of land border ports, processing nearly 
30,000 trucks a day; and launched the Secure Freight 
Initiative, SFI, pilot program in accordance with the SAFE Port 
Act.
    Although it certainly remains to be seen how well these 
programs, some of which are less than a year old, will 
ultimately pan out, progress has indeed been made.
    Now, I know we have all been critical of the Department in 
the past, but let me point out that it is not the critic who 
counts. The credit goes to those actually in the arena--and I 
am borrowing heavily from another writer when I say that--and 
those doing their very best to keep us all safe. After all, 
with the exception of Deputy Commissioner Ahern and Director 
Oxford, we have all been mere spectators on the sidelines over 
the last 5 years, and it is a much different role to be 
critical than to actually do the work. Since the Department was 
established, we have learned a great deal about allocating 
scarce resources to address the greatest threats and mitigate 
our greatest risks.
    Today, I hope we can hear about how DHS is applying those 
lessons, as I firmly believe the scope and complexity of the 
cargo shipping industry lends itself not to the Draconian 
treatment of every aspect of the supply chain, but rather to a 
robust, adaptable, layered approach to security that 
facilitates that delicate balance between legitimate trade and 
security that is so vital to the interests of the U.S.
    Which brings us to today and the question of where do we go 
from here? In many ways the requirements of the SAFE Port Act 
and the wide-ranging mandates of the 9/11 Act have charted a 
course for the future of cargo container security. But new and 
emerging developments and items such as a resilient, effective 
container security device for each container, improved 
targeting systems, and advanced radiation detection systems may 
alter that course in yet another direction, one I hope to learn 
more about today.
    Gentlemen, since the days of Alexander Hamilton and the 
founding of our Customs Service, the mission of 
countersmuggling has essentially remained unchanged. What has 
changed, unfortunately, is the known radical intent to do harm 
and the fact that the contraband now ranges beyond counterfeit 
goods to illicit drugs, captive humans, perhaps even nuclear 
material, threats that are as devastating as they come.
    These are some of the issues I hope to discuss with you 
today. The chore of finding the proverbial needle in the 
haystack of millions of cargo containers is one I certainly do 
not envy, but it is in fact DHS's responsibility. No one wants 
to see the Department succeed more than the members of this 
subcommittee.
    Thank you, Mr. Chairman. I look forward to today's 
discussion.
    Mr. Price. Thank you.
    Mr. Flynn, we will be happy to hear from you.

  Opening Statement of Mr. Stephen Flynn, Fellow, Council on Foreign 
                               Relations

    Mr. Flynn. Thank you very much, Chairman Price. And thank 
you, Ranking Member Rogers and Congressman Edwards. It is an 
honor to be here today to talk about some of the challenges 
that we are confronted with about an issue that I would argue 
has enormous stakes for this Nation and for the broader global 
community. They have large national security concerns, but also 
enormous economic concerns in terms of the future of the 
prosperity of this Nation. And it is an incredibly complex 
problem that requires a lot of effort.
    And many of the people here today, and particularly from 
the government witnesses, have been in the nitty-gritty of it, 
but it is a challenge that transcends what DHS can do in lots 
of ways; and one, as I will try to talk through, where we still 
have a ways to go.
    I lay out in my prepared testimony four areas of concern 
with the current regime, and I offer some ideas about where we 
need to go from here. The basic four first start with the 
underlying data that is used for targeting to establish risk 
versus not risk is, in my view, too unreliable to support the 
kind of effort that is underway right now. CBP is addressing 
this in an important way by advancing the 10 plus 2 Initiative, 
and I applaud very much Chris Koch and the World Shipping 
Council working with CBP to advance that, but there has been 
tremendous resistance within the commercial community for 
providing that data.
    The bottom line is that we do not have accurate enough, 
reliable enough data to underpin the targeting process. And 
that is a very important issue that continues to need work. And 
I applaud the efforts CBP has been making to try to address 
that.
    The second area of concern I raise deals with the Container 
Security Initiative. And, Mr. Chairman, you were off looking at 
a couple CSI ports. The central problem is that the amount of 
U.S.-bound cargo that can be examined not just as a result of 
current staffing levels--but the challenge basically is the 
staffing levels of the host country--remains a tiny fraction of 
percentage of U.S.-bound cargo. And there are serious issues 
with trying to get above that tiny percentage. We have a 
fraction of percent of U.S. Cargo now currently being examined 
under the CSI protocol at the port of loading. And to get to a 
higher percentage, to look at all anomalous U.S. Cargo would 
probably not be sustainable. And we are talking in the realm of 
5 percent being a bridge too far at the port of loading right 
now; not, obviously, 100 percent. That means, obviously, a bulk 
of what is deemed to be anomalous is examined here in the U.S. 
and the U.S. Port.
    That presents a serious problem if we find something both 
in that if it is triggered in the port, obviously it puts the 
port in jeopardy. Maybe the heartland may be protected by this, 
but certainly the front line is sacrificed in that process. But 
also it can obviously profoundly disrupt the port by trying to 
manage the incident in the port. So that is something that I 
think needs to be looked at closely.
    The third area that I raise here is the radiation portal 
technology itself, our last line of defense that we rely on 
here in the ports. And while this has been rolled out quite 
quickly, again the problem is almost it is too late when we 
find it here. But there are serious limits to relying primarily 
on radiation detection equipment to detect nuclear material. To 
find a nuclear weapon, it basically cannot do it because of the 
material the nuclear weapon is surrounded with. And it would 
have serious challenges finding a dirty bomb, even if that is 
well shielded with lead, which obviously is a readily available 
material. It still takes good engineering, but you can defeat 
the radiation portal technology. So we have some issues there.
    The final issue, and it is one I would like to focus on 
here in my oral remarks, is that today still the United States 
Government does not have a plan, should we have a major 
security incident involving the Intermodal Transportation 
System which results in a substantial slowdown or shutdown of 
the system, for how to turn it back on again. And for me, this 
is what is the ``elephant in the room'' problem that has been 
largely overlooked by an effort to find contraband, even in the 
form of a nuclear weapon, is that the Intermodal Transportation 
System is perhaps one of the most critical infrastructures that 
this Nation has, and it is one which the rest of the globe is 
tied to. And if our response to an incident is to profoundly 
disrupt that, the implications are not just economic; it is 
that many of the things that are truly life and death for us 
are in the system in a just-in-time mode.
    Let me highlight just one of them. Ninety percent of 
medical gloves are made in Malaysia. Hospitals used to have 2 
weeks of supply of these kinds of goods. Now we are down to 2 
to 3 days, and that is as an effort to trim back the economy. 
One could imagine a scenario where, if something happens in 
Southeast Asia, it would slow things down. You could literally 
run out in a matter of weeks of gloves, which would impact 
every health care provider in the country. That obviously has 
kind of significant implications. The supply chain are life 
lines, literally in this case, but also for many other 
commodities, and the conveyor belt is the Intermodal 
Transportation System. To slow it down or shut it down is a 
serious problem.
    I laid out a scenario just about 2 years ago before the 
Senate Permanent Committee on Investigations that highlighted 
the fact that probably the most vulnerable part of the supply 
chain is between the truck that picks it up from a factory 
overseas and takes it to its first point of loading. We are 
obviously in a part of the world in many places, or with 
potential drivers who are not people we can subject to vetting, 
and it is a highly transient workforce. They have physical 
custody of that container, and getting into it potentially and 
doing something like putting, as in the scenario I lay out, a 
dirty bomb into the container is not a heavy lift. We know this 
from basically doing this with contraband.
    The scenario basically traces a box that arrives, it starts 
with a C-TPAT company in Surabaya, walks us through a port in 
Hong Kong, arrives in Canada, comes across by rail into the 
United States, and has the bomb go off in a distribution center 
outside of Chicago as a result of a triggering device on the 
handle itself that sets it off.
    The thrust, though, of this was to point out what would 
happen to the system in terms of our response. Even if the U.S. 
Government did not say we are going to shut all ports down to 
sort things out afterwards, the U.S. Government itself may not 
have control over this. One is labor might be unwilling to work 
in the port until they can get verification there are not other 
bombs like this in the system.
    A mayor of Los Angeles, potentially, could say I am going 
to put the LAPD at the end of the bridge on Terminal Island and 
I am not going to let any boxes come in until people tell me 
things are okay. The mechanics of what happens are really 
tremendous. Sixty percent of the world's maritime containers 
are at sea right now on the clients that Chris Koch represents. 
Sixty percent of them. Roughly 10 to 12 days across the Pacific 
Ocean, 8 to 10 days coming from the Mediterranean and Europe. 
When we close our ports down, that starts to queue up. 
Overseas, the ports cannot continue, the terminals cannot 
continue to take in boxes, because they are already pretty much 
at capacity, so they close their gates to all incoming trucks 
and trains. The trucks and trains outside these terminals all 
over the world start to queue up. They can not recirculate to 
go back up to the system. Within about 2 weeks, the whole 
shipping schedule for the intermodal maritime system 
essentially crashes, and the whole ability to reroute and so 
forth becomes difficult to manage. We are faced with this 
dilemma then. We are concerned that potentially there are other 
bombs in the box. Perhaps the terrorist itself generates that 
as a threat. We are in a catch-22, though. You cannot actually 
examine containers buried in the deep of a modern container 
ship unless you offload them, but nobody wants them offloaded 
until they have been checked. So we are essentially looking at 
a scenario here of not just finding a nuclear weapon or nuclear 
materials or a dirty bomb which could raise, obviously, a major 
disaster, local disaster, but one where the system itself 
essentially is brought to its knees with all the resultant 
implications.
    Now, I lay the scenario out in one part to say the stakes 
are enormous with this issue and deserve the kind of attention 
this committee is providing it. I lay out these stakes as well 
to highlight that we have really got to move beyond just the 
prevention efforts we have and think through as well how we 
manage the consequence. And there the U.S. Government has not 
done nearly enough. It has not done anything at all.
    Let me conclude by just putting the resource issue in 
perspective. After all, this is the Appropriations Committee. I 
highlight the fact that earlier last month I had the chance to 
testify before the House Oversight Committee for National 
Security and Foreign Affairs on a hearing on ballistic missile 
defense. The hearing was looking at the administration has 
asked $12.3 billion this year for continued research for 
ballistic missile defense on top of the $120 billion we have 
spent since 1986, when the vision of Star Wars was first laid 
out by President Reagan. That number, 12.3 billion, represents 
twice the total amount that the operational budget of the Coast 
Guard, Customs and DNDO have to do all border interdiction 
operations for the U.S. Government.
    The request, as you indicated in your opening statement, 
for 900 million obviously is a fraction of the percent that we 
are investing in basic research. Every security expert I know, 
inside and outside the government, who looks at this problem 
says the higher probability threat, certainly with the current 
adversary, for a nuclear weapon finding its way into the United 
States--which we hope remains a low probability scenario--but 
the highest probability way in which that will happen will be 
on a nonmissile means via a smuggled conveyance. Fundamentally, 
the disconnect here is that we view Homeland Security entirely 
separate from our Defense programs, and we are not assessing 
risk or priority resources in a way that adjudicates that 
effectively. This issue deserves a lot more attention than it 
has been receiving, even though I commend very much, of course, 
the work of this committee and the work that is being done by 
the selfless hard workers at CBP, DNDO, and elsewhere at DHS. 
Thank you very much, Mr. Chairman.
    Mr. Price. Thank you for that very impressive statement.
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    Mr. Price. Mr. Koch.

  Statement of Mr. Chris Koch, President & CEO, World Shipping Council

    Mr. Koch. Thank you, Mr. Chairman. I would like to start 
today by recognizing what I think is good work by Customs and 
Border Protection, DNDO, and the Coast Guard in trying to deal 
with this challenge. It is a challenge. It is complicated. And 
I think we ought to start with the proposition that they are 
thinking very hard about how to do this. They have got a 
strategy for how to do this. They have got programs that are 
multilayered in place for how to do this. And they are working 
to enhance those programs as we sit here today.
    What is that strategy? The strategy starts with the idea of 
trying to perform risk assessment on this cargo before vessel 
loading in foreign ports, which they are doing today under the 
24 Hour Rule, factoring in intelligence data, et cetera, into 
their system. That is a good strategy. That strategy, however, 
can be improved. The data that they are presently using, as 
Steve pointed out, has limitations to it. They are trying to 
address those limitations with a rulemaking. The comment period 
has closed. And as Steve has indicated, there is considerable 
resistance within the trade community to proceed down this 
road.
    What Customs is trying to get is 10 additional data 
elements about the nature of this cargo: who is causing it to 
come to the U.S., who is buying it, who is selling it, where 
the container was stuffed, et cetera. All logical things to try 
to get. And they are trying to get two additional data streams, 
operating information from carriers' operating systems, which 
would also help them.
    We happen to think that that is a good strategy, it is a 
good proposal. We recognize it is a challenge. As I point out 
in my prepared testimony, the title of your hearing today is 
Challenges and Opportunities. Ten plus two is a challenge, but 
it is also the greatest single opportunity that we presently 
have in front of us to improve the cargo risk assessment 
capabilities of CBP. So we hope the agency will proceed with it 
and come up with an implementation plan that can address as 
many of the issues as possible before it begins.
    In addition to that, the strategy the government has is, as 
Steve pointed out, they are running radiation screenings on 
every container coming into a U.S. Port, they are doing 
inspections, either physical or the nonintrusive X-ray 
examinations of any box they really have a serious question 
about before it is released. And at the same time, they are 
trying, through the various pilots and through the CSI program, 
to expand those capabilities at overseas ports where there 
clearly are challenges.
    My testimony starts by talking about the CSI program. And 
the purpose for that is to make sure we do not lose sight of 
the fact that cooperation in foreign ports requires cooperation 
of foreign governments. It is their sovereignty, it is their 
ports, and whatever we do here has to work out on a cooperative 
basis, recognizing and respecting the sovereignty of the other 
countries.
    The other thing important to recognize is other countries 
can require the same thing of us that we expect of others. So 
if we impose requirements that are completely unreasonable, 
other countries can reciprocate against U.S. export commerce, 
which is something we should always keep in mind. What is good 
for them ought to be good for us as well.
    As the enterprise continues to evolve, as the 10 plus 2 
Initiative is pursued, we also, as you stated, Mr. Chairman, 
have to deal with what does the 9/11 Recommendations Act 100 
percent container inspection requirement mean? How is this 
actually going to be implemented?
    I set forth in some detail in my testimony questions that 
have to be addressed if we are going to move forward on that 
particular idea.
    The statute itself, if I might say, does not address many 
of the key strategy questions that would have to be addressed 
if this is going to be something that we roll forward with. And 
my recommendation is as we do this, we certainly learn from the 
pilots that CBP is presently conducting under the Secure 
Freight Initiative and that we have a reasoned discourse as to 
exactly what is the strategy we are trying to pursue here.
    I think much effort is wasted on different scenarios, on 
different analyses, on different program proposals, before we 
have agreed on what the strategy is. This is expensive. This 
can affect commerce in a dramatic way. This can be something 
that is imposed back on the U.S. from a reciprocity basis. What 
is it exactly we need to have done?
    For example, if in fact radiation scanning technology is 
not effective, as some people say, does it make sense to 
mandate 100 percent of it in foreign ports? On the NII 
equipment that is presently being used, what exactly is its 
capabilities? We can take scannings of every box out there, but 
it is not automated equipment. It requires a trained expert to 
look at that NII image. So if that is going to be done on 100 
percent of all containers, you will back up every port around 
the world, because it cannot be done with the resources that 
are reasonably available to be done.
    So what is the strategy we want to take with respect to 
this equipment? At the present time I would submit that CBP has 
a rational explanation of what we do. We use it on those boxes 
as best we can when we have a question about those boxes. And 
what we want to do is get better data so we do a better job of 
identifying which boxes we ought to be looking at. But we 
cannot do it for 100 percent of all containers and expect the 
cargo flows of American commerce to continue to flow smoothly.
    So in summary, Mr. Chairman, I think we all recognize that 
this is a challenge. We all recognize that we have about 50,000 
containers a day come into U.S. Ports. The cargo in those boxes 
is well over a billion dollars every day. As Steve pointed out, 
supply chains are now narrow and just in time for very many 
legitimate economic reasons. And we have to recognize that the 
efficient flow of commerce and security have to be dealt with 
together.
    So, Mr. Chairman, anything we can do to assist the efforts 
of CBP, the Coast Guard and DNDO, we are certainly willing to 
do it. And we look forward to working with this committee as 
you try to figure out what the best answer to some of these 
questions is.
    Mr. Price. Thank you very much.
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                                 C-TPAT

    Mr. Price. Let's turn to questions which the committee will 
have for both of you.
    And let me begin, Dr. Flynn, with you. You have stated that 
foreign enemies and terrorists are more likely to use a 
container and exploit weaknesses in our security systems 
because that may be the easiest way to deliver a disruptive 
weapon. And you this morning again repeated that that might 
well be a more likely scenario than a missile attack. You have 
offered scenarios where C-TPAT participation and radiation 
detection technology might not only fail to prevent a weapon 
from entering, but actually may facilitate its delivery by 
creating a false sense of confidence and security.
    So I want to ask you to elaborate on that. What would you 
identify as the most critical gaps to fill in cargo security, 
to guard against a false sense of confidence, but to give us 
the protection we need? What are the priorities?
    Mr. Flynn. Sure. Let me begin with the threat. And I think, 
specifically, I would say giving the risk of a weapon, nuclear 
weapon, coming to us via the tip of an intercontinental missile 
versus the alternative, a nonmissile conveyance, is more 
probable. Where you can break down this threat in part is: 
Would a nuclear weapon itself potentially be smuggled into the 
United States if you could get a whole one in a container? 
There is a legitimate debate that somebody who intended to 
bring a nuclear weapon with a specific target might use other 
smuggling means than a container, and perhaps probably would 
because they want to hang onto it. There is another issue about 
nuclear material, highly enriched uranium, which you could then 
here develop a bomb. And again, that could be smuggled in in a 
variety of means besides just a container.
    But the threat I am particularly worried about is the dirty 
bomb threat in a container, which is using commercial-grade 
radioactive material inside of conventional explosives. I worry 
about that scenario primarily because the dirty bomb is a 
weapon of mass disruption, not destruction. It is a 
conventional explosive that kills everybody within the range 
and it creates a real mess, but it is not a mushroom-cloud kind 
of dilemma.
    If I were a terrorist intent on economic disruption, and we 
have adversaries who recognize out of 9/11 that that is in fact 
a strategic objective, is to cause mass economic disruption, I 
would specifically target the supply chain with a dirty bomb to 
set it off, to force a reaction to that. And I would target 
specifically something that is viewed today as low-risk cargo, 
because that will contaminate the risk management system.
    In the scenario that I laid out in my testimony, it comes 
from a C-TPAT company, it goes through an IPSS, International 
Port Ship Security-compliant terminal--which they all are 
because everybody self-anointed themselves as compliant--on an 
IPSS-compliant ship through multiple CSI ports, arrives in the 
United States and goes off. I cannot imagine the President 
being able to say, Keep commerce flowing when the entire risk 
management regime has been compromised by what is a single 
event. Particularly with what the reaction tends to be when you 
are faced with that uncertainty is people to take raw 
information and suddenly throw it upstairs to decision makers, 
so nobody is caught potentially having what may have been--even 
though it is not well vetted--information about what the threat 
is.
    So you end up with very chaotic information at the top 
level of the government with floods. And again as I laid out, 
uniquely in managing this problem versus our airspace, you have 
mayors that are involved in these decisions, you have labor 
involved in these decisions, you have port authorities involved 
in these decisions. It is going to be very difficult nationally 
to manage this without having worked their way through.
    So the threat that I think that is out there is something 
that terrorists certainly have the means to do. And why they 
would put it in a container would be to target the Intermodal 
Transportation System itself as a critical infrastructure 
versus to get it Tom Clancy style--to the Super Bowl Game or to 
a convention--to blow it up. So that is something I think the 
committee needs to be mindful of as it thinks through working 
this.
    The false sense of confidence basically comes around that 
the risk management protocols that we use were well developed 
and well refined and appropriate for contraband dealing with 
criminal conspiracies such as moving of drugs. Because 
organized crime is about repeat performance. Nobody actually 
raids the cookie jar once. They want to keep doing it over and 
over again. And so organized crime thinks about finding soft 
spots in the system that it has some confidence over time they 
will succeed in getting in. And most security controls are in 
place to set trip wires and react afterwards to investigate the 
problem and then create a culture of compliance within a 
company. That presents a significant deterrent for criminal 
behavior for smuggling and contraband.
    But in the terrorist scenario that I laid out, we are 
talking about somebody trying to do something once. And 
therefore something we view as low risk today could be viewed 
as high risk for this worst-case scenario, because I am going 
to take a lot of time to essentially figure out the system and 
find its vulnerability. And as I suggest, and I think many of 
us who know the supply chain know, the weakest point is between 
the factory and the port of loading overseas. And imagining 
that risk is a significant challenge.
    So what we are, I think in part, we are trying to do is 
both ideally find this weapon, but we are also trying to make 
sure that we have systems in place that, should something get 
through, we can parse the risk and manage the crisis in a way 
that does not lead to the mass shutdown of the system.
    And I would be happy to go into some details about how that 
could be accomplished as well.

                             RISK ANALYSIS

    Mr. Price. Can you just briefly indicate, given the way you 
have defined the most likely threat, the most likely risk, what 
would you do differently in terms of the kind of priorities you 
would set, particularly the direction of limited dollars?
    Mr. Flynn. As the first priority I would accelerate the 
efforts that CBP is trying to advance on 10 plus 2, the current 
risk analysis based on cargo manifest information provided by 
the ocean carrier, which is essentially what its customers told 
it was shipping. In my testimony I have photographs of a ship, 
container ship the HYUNDAI FORTUNE, which was one of the most 
interesting non-news events of 2 years ago. It was the biggest 
container ship fire that has ever happened, 60 miles off the 
coast of Yemen, and it basically blew out the side of the ship 
and took out the back one-third of a 5,500 TEU ship. That is 
basically one of our larger size container ships.
    This happened as the result of an investigation postulates 
that it was likely hazardous materials that were not advertised 
to the carrier as such. Basically, this happens not 
infrequently, because 10 percent of cargo that comes on 
container ships contains some form of hazardous materials that 
requires special handling. To avoid those fees, people do not 
necessarily 'fess up what they are shipping. So it is a 
dramatic example of what is out there, is that the carrier does 
not really know what is in the boxes. The terminal operator 
receives them, does not know what is in the boxes. It takes the 
word of the consolidator or of the original exporter to tell 
him this is what is in the box. That is what is provided to 
Customs, and Customs basically begins its risk analysis from 
there.
    Now, when it is suspicious about a piece of cargo, it has 
very robust systems to find more about it. But what will 
trigger off the suspicion is that information on the cargo 
manifest. And it basically is about as effective of a system--
about as viable as that customs declaration form that you fill 
out when you get into Dulles. If you think everybody who gets 
off there fills out precisely what they brought back overseas 
and its value and the contents, that is essentially the system 
we largely have with cargo manifests, particularly for large 
parts of the world. So that is clearly a priority is getting 
better data that CBP can target around.
    But the other push that I have is we need, I think 
somewhere in the system, a physical validation not so much to 
find the actual needle in the haystack, but that the bulk of 
containers do not pose such a risk. The radiation portal 
technology's limit is that by using shielding like lead, you 
can defeat it; but, if combined with imaging, you are sensing a 
dense object, most containers, over 90 percent of them at 40-
foot size, do not carry dense objects in them. So one tool that 
is out there is you put these in place, potentially in overseas 
ports, to screen automatically containers coming through.
    You have that data available and you use it in two ways. 
One is when Customs wants to do an inspection, it pulls the 
bits instead of ordering the box out of the yard and being 
moved somewhere else. It has some preliminary information, 
which should improve its targeting. The second piece is if you 
have an incident, you have the means to be able to vet the 
system and be able to continue to facilitate the vast majority 
of cargo and start to isolate the portions of the supply chain 
that you may have worries about. So the absence of the ability 
to physically validate that containers do not carry--and it is 
really, very specifically, a dirty bomb, a nuclear weapon--that 
is the only thing that will lead to the kind of nightmare 
scenario I laid out, I think is something we have to advance.
    I do not believe we are going to be anytime soon at a point 
where we will have 100 percent. Just about everything with 
security you don't get there. But I know it is going to be 
higher than a fraction of the percent we have right now to get 
that level of confidence and to manage the incident. And I 
think we need to get the industry and the government to roll up 
its sleeves and figure out how we tackle this very complex 
problem.
    But I want to reinforce one final thing; that is, there is 
no silver-bullet single approach. The data is very important. 
We can get conveyance devices. That is great. We want the 
cooperation. But a problem of this magnitude for our economy 
and our national security warrants a real roll up the sleeves 
and say this is something we have to work through, work through 
its complexities, work through the difficult economics, and 
find win-wins when we can.

                               TARGETING

    Mr. Price. Mr. Koch, you have in your testimony today once 
again stressed the importance of improved targeting, improved 
information that would enable us to target intelligently, as 
opposed to a macro goal of 100 percent screening.
    I wonder if you could in brief here respond to what Mr. 
Flynn said. Or what would be your answer to the question that I 
asked of how this lines up with the kind of priorities you 
articulated?
    Mr. Koch. I would be happy to try, Mr. Chairman. Steve is a 
very articulate and thoughtful guy, and a good critic of the 
problems we face. The difficulty I think we have is that no 
matter what we come up with, it does not take much to come up 
with plausible scenarios that make sure that whatever you 
construct can be circumvented. Even what Steve is articulating, 
I can come up in 10 minutes with a plausible scenario that says 
everything that would be created could be gotten around.
    Before going on, I would say it is not clear to me the 
extent to which terrorist organizations would use containers. I 
think we all see the vulnerability. I do not know that we 
really understand the likelihood of that threat. Would they use 
a container as an operational way to deliver something bad to 
this country? It requires them to completely lose operational 
control of that asset, because they would no longer have 
operational control, which is certainly outside the way 
terrorist organizations have operated up to this point. They 
know every box is going to be screened. They know there is a 
good chance that it could get scanned. They know it could be 
stopped. And although we are wonderful operators, they also 
know we can roll cargo, we can miss ships, we can do a lot of 
things where that box is not 100 percent certain of being 
delivered on time, as promised.
    So under those scenarios, there are a lot of questions that 
frankly you simply have to make judgments about how big a risk 
is this. And even when you recognize it is a risk with high 
potential consequences, what are the resources you devote to 
it? I do not know that there is a black-and-white answer to 
that. I would say better risk data is clearly a priority.
    And I would say that the improvement and constant 
improvement of the technology being deployed is something that 
you will certainly be exploring with Mr. Oxford and Mr. Ahern 
in terms of the competence of this equipment that is being 
used. But even that equipment is not perfect, as Steve himself 
has identified, through shielding, et cetera. To say that you 
could find a cannister of nuclear material in a 40-foot 
container of machine parts by looking at an X-ray image I think 
is fanciful. It is not going to happen. At least it is not 
going to happen very often.
    So I think it is a multilayered strategy. It is trying to 
do programs like C-TPAT that give you increased reliance on 
certain supply chains. It is doing the better screening data. 
It is doing these various things, taking all the experiences 
that the agency has developed over time and continuously 
improves on and applying best judgment to it. We cannot find a 
guaranteed solution and allow this commerce to continue to 
flow.
    And the idea that we can have terminal operators in foreign 
countries install equipment and give us an NII image and a 
radiation image of this still begs the questions of how good is 
that technology, and what are we going to do with it when we 
get all that data? Because those terminal operators, I 
guarantee you, are not going to do the risk analysis of that 
data. They are not going to take on that liability, nor do they 
have the competence to do it.
    So we can fill CBP with images of 13 million containers 24 
hours before they are put on a ship, or whenever they come into 
a marine terminal abroad, but that does not answer the strategy 
question of what is CBP expected to do with all of that. And I 
think that is a dialogue that does not have a clear answer, but 
one that certainly the Congress, the trade, and the agency 
needs to sit down and hammer through.
    Mr. Price. Thank you very much. Mr. Rogers.

                         SCREENING TECHNOLOGIES

    Mr. Rogers. You know, I have not heard yet this morning, to 
my utter surprise, anyone mention the container security 
devices that we have been talking about now for 5 years, a 
gizmo that is readily available, to be placed inside the 
container, that would alert the outside world to whether or not 
the container's security had been breached anywhere along the 
way from the factory stuffing place to that truck driver that 
takes it to the ship. And I agree with you, that is the most 
vulnerable place we have. But a gizmo that I have seen, that 
could be manufactured I think at a fairly modest cost, that 
would tell us whether or not the container has been breached 
anywhere along the way, on the truck to the port, on the ship 
overseas, all the way through the U.S. Port and to the 
destination of the box wherever that may be.
    That device would also be very helpful when the truck 
wrecks in the U.S., and some white fluid is flowing from the 
box, and the local police and fire departments approach what 
may be a bad situation. They do not know whether the white 
fluid leaking from the box is sulfuric acid or milk. And with 
today's technology, the device inside the box could immediately 
tell you or anyone else what it is that is in the box. And so I 
am surprised we have not heard that. What do you think? Dr. 
Flynn.
    Mr. Flynn. Congressman Rogers, I was involved in the 
initial program called Operation Safe Commerce that began this 
process of exploring this use of container security devices and 
tracking devices, and have been monitoring those closely over 
the years. There is little question in terms of our aspiration 
to get to a point where we have supply chain visibility and 
greater confidence of its security that such a device operating 
in the system would be quite helpful in bolstering our 
confidence. The operational issues of it operating in faraway 
places and issues like false alarms when it triggers off and 
who is going to respond to it, these are issues that I know the 
government has been wrestling with and has not come up with 
very good answers. And then potentially abilities to jam it and 
those kinds of issues.
    So it is very much something that I see as promising, and 
is something that would be a part of the comprehensive layered 
approach. But the challenge has often been issues like the 
power to sustain it and who replaces the batteries or where 
that is done or where the maintenance happens and so forth.
    Mr. Rogers. Look, we have been to the moon and back safely. 
There is technology that is out there that would save us 
zillions of dollars if we could get a gizmo inside the box that 
is reliable. The chance of error or false alarms I think is 
minimal. And if we could develop such a device, think of the 
work and money and trouble and delays that could be saved here. 
All of the programs the Department has put forward, this 
multilayered approach to security of boxes is the best we can 
do for the moment. But the gizmo would solve all of those 
problems. Do you not agree?
    Mr. Flynn. I guess, being in the security world for a long 
time, I see it as a very important tool. And it could be 
ultimately evolved potentially, with the technologies and if 
these operational issues work out, to being the dominant tool 
that gives us that confidence. But I would not rely on any 
single tool, given the complexity of the supply chain. So many 
of the programs that are underway I would say we continue to 
need because the stakes warrant it, and because you need to 
continue to create a dynamic, challenging environment for the 
adversary to deal with.
    So, again, it is not to be dismissive of it in any way. It 
is a very----
    Mr. Rogers. What do you think, Mr. Koch?
    Mr. Koch. Congressman Rogers, I think the gizmo is an 
attractive idea. I think there are various generations of 
gizmos. The current technology, when you talk about a 
conveyance security device, is generally thought of as the kind 
of thing that GE or Lockheed Savi are building, which basically 
tells you whether the right door has been opened. It does not 
tell you the kind of information you have described about what 
is in the box or detect even entry through other sides of the 
box. It is a right-door entry thing.
    The issues in advancing that technology are what are the 
technology specifications? Is it RFID technology? Is it GPS 
technology? What are the standards that would be applied to it?
    You talked about the error rate. CBP is conducting pilots 
now on these CSDs, which I think everybody is looking forward 
to. The error rate that CBP will tolerate from these 
manufacturers for their pilot devices is 4 percent. A 4 percent 
error rate would bring commerce to a halt.
    The other thing that has to be considered when you look at 
this is, in a lot of countries, for example, the local Customs 
people will open the door on every container before it leaves 
that country. That means every CSD is going to alarm. So then 
the question is, well, what is the trade, and what does Customs 
do with all these boxes that have alarms coming in because the 
door was opened somewhere along the way?
    So there is a lot of real-world application questions that 
have to be addressed as we go through this. It is certainly a 
technology that can be explored. I think CBP is certainly 
identifying situations where, in the focus, they are looking at 
it might have real application. For example, I saw this down in 
Nogales recently, where they are going to try to put this on 
boxes coming from C-TPAT maquiladoras on the other side of the 
border, bring them across the border. CBP then will have the 
reading infrastructure to look at these devices. One of the big 
challenges for CSDs, if you apply it in a global environment, 
is where is this reading infrastructure put? It has to be put 
at hundreds of thousands of different points. And then how do 
you connect that infrastructure into CBP? It is not an 
insignificant challenge.
    Mr. Rogers. Wal-Mart has no problem with that.
    Mr. Koch. But Wal-Mart is putting it on a package level 
where they read the device at all times.
    Mr. Rogers. UPS has no problem with knowing where a box is 
any given second in its trip.
    Mr. Koch. That is correct. But these are devices that are 
supposed to tell you has a security event gone off that 
requires that box to in essence stop where it is. And UPS has 
uniform technology applied across its system. The Lockheed 
device is not consistent with the GE device. There is no 
standard for this. And we have dueling, warring vendors as to 
who should produce what kind of product.
    Mr. Rogers. Well, the ultimate arbiter of all of that, 
obviously, has to be Uncle Sam.
    Mr. Koch. That is correct.
    Mr. Rogers. And with the ability of the Federal Government 
to put conditions or restrictions on what can and cannot be 
brought into the country, it seems to me that we have a path to 
getting a uniform gizmo, and by limiting what can and cannot 
come into the country, require other countries to conform to 
those standards. I mean, this is elementary school stuff we are 
talking about here.
    Mr. Koch. If it is GPS technology and can be read remotely, 
then it is one thing. If it is RFID technology and has to have 
an RFID set of readers at various places around the world so 
that it can be read before it is put on a ship, it is a much 
more complicated enterprise to do that. Because then you are 
actually requiring ports, facilities, wherever this would be 
applied all over the world, to install a reading 
infrastructure, and then having to decide who is responsible 
for reading that infrastructure.
    CBP and the Science and Technology Directorate within DHS, 
when they have looked at this, have tried to figure out what 
does that reading infrastructure look like? What is its 
interconnect with CBP? And then what are the operating 
protocols that go along with it? The vision is certainly an 
attractive one. I think we all would be well served by waiting 
to see what the lessons are out of the various pilot projects 
that CBP is about ready to undertake on all this, so we can all 
move forward with a better set of understanding of the issue.
    Mr. Rogers. We will be asking the government people about 
what their thoughts are about this as well. But as one fellow 
jokingly said one time, we are making policy you are talking 
about details. And it seems to me the policy of the country 
ought to be that we are going to require every box coming into 
the country to have a gizmo that will tell us whether or not 
the crate has been tampered with in progress, what is contained 
in the vessel, and its origin and destination among other 
things. And those gizmos can be read remotely and can be read 
without intrusion with something as simple as a BlackBerry 
gizmo. We are not talking rocket science here.
    And I am amazed that the industry as well as the government 
has not seized on this and pursued it. I know GE was making a 
device 2 years ago, and others have done the same. And I saw 
one from a small inventor in North Carolina 4 years ago. And 
nothing has happened. And I am going to stay with this. And I 
am going to belabor everybody that comes before this 
subcommittee to find out why in the dickens haven't you done 
this. It would save everybody tons of money, thousands of 
people overseas at ports, and speed the flow of commerce in and 
out of the U.S.
    Mr. Chairman, thank you.
    Mr. Price. Thank you. Mr. Edwards.
    Mr. Edwards. Mr. Chairman, let me first thank you for 
holding this hearing. There are dozens of hearings on the House 
and Senate side today. I cannot think of any one that would be 
more important to our country's future than this one. And I 
want to commend Mr. Rogers for his line of questioning.
    You know, I know, Mr. Koch, there are important questions 
that have to be raised about these so-called gizmos. I wonder, 
can't help but think back several years ago when Peter DeFazio, 
our colleague in Congress, was telling the airline industry 
they needed to fortify the doors on their airplanes. And they 
were coming up with lots of technical reasons why they could 
not do it. And I wonder now how many lives we would have saved 
and billions of dollars, even the airlines would have saved, 
had we just said we are going to do this and get it done. I 
hope Mr. Rogers and Chairman Price do find a way to get that 
done.
    Dr. Flynn, let me thank you for pointing out the 
inconsistency of not putting our Federal resources where the 
most probable threat would come in terms of delivery of a 
nuclear weapon to our country. I think, overwhelmingly, experts 
in the field have indicated it is less likely to be an ICBM 
than a nuclear device put in a ship container, delivered in a 
suitcase bomb somehow.
    I am not against national missile defense, but it just does 
not seem right that we are putting so many more resources there 
in what is a less likely delivery system for a nuclear weapon, 
knowing that anybody who sends an ICBM in this country knows 
there is a return address stamped on that delivery vehicle the 
second it leaves the ground.

                   PERCENTAGE OF CONTAINERS SCREENED

    Let me ask you, I just want to be factually correct, Dr. 
Flynn, in terms of the percentage of containers that are X-
rayed before they come into a U.S. Port, what is that number 
today?
    Mr. Flynn. That number, it depends on the port. The ones 
where most is happening are the three main ports where the 
Secure Freight Initiative is underway and the other three ports 
that are unfolding. That means we are providing the equipment 
overseas in those ports for the host country to be able to do 
more of these screenings. And in Singapore and Hong Kong it is 
right now a fraction of a percent of U.S.-bound cargo, as in 
the low .2 percent.
    Mr. Edwards. Right.
    Mr. Flynn. And it may be higher now, but the practical 
limits of why you cannot get above that are, again, the actual 
inspection is carried out by the host country. So you are 
asking the host country's Customs services to look at the 
cargo. The mechanics of it are once the CSI team, with support 
from the National Targeting Center, identifies the container as 
potentially high risk and warrants an inspection before 
loaded--it is usually inside the yard--almost always is, 
because it is a 24-hour advance of loading on the ship. So then 
the box has got to be located in the terminal, pulled out of 
the stack, driven usually to a facility that the host country 
has outside the terminal to have it examined. There is some 
risk it will miss the voyage if you do not do it. It also 
disrupts the yard to have that happen on a frequent basis.
    But the most important challenge is you are asking the host 
country to do it. Virtually all of the ones, of course, we ask 
the host country to look at turn out to be benign. So you start 
wearing out your welcome mat when you start saying you want to 
do more of this, and none of them actually have any real 
threat, and it is coming out of the labor of the host country.
    Mr. Edwards. Let me ask about that. I wonder what the 
country's reaction would be today if we said we are only going 
to check 2 percent of the passengers getting on commercial 
airplanes. We are requiring 100 percent inspection of every 
passenger, including Members of Congress who get on an airplane 
today, and that is in an attempt to save hundreds of lives, or 
perhaps thousands of lives. We are talking about a potential 
threat that could put at risk millions of lives, or hundreds of 
thousands of lives at the least.
    And I realize the technology is complicated. But tell me, 
and I guess I probably have just a minute or two left, tell me 
the constraints on the technology. Maybe the next panel will 
get into this in more detail. But theoretically what you would 
want is every ship container checked where you just move the 
containers as they come through into a foreign port, you want 
them driven through some sort of X-ray machine or reviewing 
system. Is that technology possible?
    Mr. Flynn. There are really two issues. One is the 
technology. And it also gets with the container security device 
or the tracking device. It is the operations itself and how 
that technology works with the maritime intermodal 
transportation operations. On the technology itself, what you 
can identify is whether or not you have active radiation. And 
the way you can actually defeat that, though, is to shield it. 
And then you can identify whether you have very dense material 
in most containers.
    Mr. Edwards. Let me interrupt you there. What percent of 
ship containers of the 22 million that come into the U.S. each 
year from foreign ports, what percent have dense materials that 
could be shielding highly enriched uranium?
    Mr. Flynn. We do not know because we have never, of course, 
taken a full sample. But what was done in Hong Kong, in a pilot 
to look at just the process of gathering this information, the 
numbers came in that it was less--it was more than 90 percent 
did not have dense material in the containers; 40-foot 
containers tend to carry lighter material; 20-foot have more. 
So you have a higher percentage of 20-foot boxes, because they 
are used to carry heavier things.
    I would say the technology is not available today to find 
highly enriched uranium in the size of that tier. If you are 
talking, though, the scenario that would take down the system 
and injure infrastructure, which would be a dirty bomb, that is 
of a size and it is of a density to shield it that could be 
detected by that technology if it was routinely put in place, 
with very small exceptions; that is, one that Chris laid out, 
that was really buried in a number of machine parts and so 
forth. So if you had that indicator, you are worried about it 
and you pulled it out, you would have to use other tools to get 
it.
    Mr. Edwards. Okay.
    Mr. Flynn. For that scenario, there is the technology. But 
now applying is, at the overseas port, you can do it this, as 
was demonstrated, in a trucking gate by having the trucks go 
through this technology with the driver getting out at 
appropriate speed.
    But when you talk about transshipment in a port like 
Singapore, where the box is coming from essentially one pier 
side, quay side to another, then you have to have the 
technology inside the port itself. And in Singapore, which is 
our largest port in the world, 95 percent or more, I think 
maybe close to 98 percent, is actually being transshipped 
through there. It is not originating from Singapore.
    So that is where the operational issues get challenging.
    Mr. Edwards. I understand.
    Mr. Flynn. But can you actually find a way that you could 
capture railcars and trucks and get an image of what is inside 
to identify whether you have dense material or not, of the size 
or proportion of a nuclear weapon or a dirty bomb, the 
technology could be out there.
    Again, like every tool, I would not rely solely on that 
one. I would want these other ones, as well. But that is where 
I think we are at.
    Mr. Edwards. Okay. Thank you.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Peterson.
    Mr. Peterson. I thank the panel. A very interesting 
discussion.
    In what part of the world is our risk the greatest?

                       INTERNATIONAL COOPERATION

    Mr. Flynn. There are really, I think, two ways to talk 
about the risk. One is, where is the messiest neighborhoods 
where somebody could potentially get access to a container, 
defeat the existing controls, which aren't obviously very 
strong for a container, and where we have a higher presence of 
people who would have intent of doing that? Clearly, when we 
talk about areas like Indonesia, that would be an area of 
concern. We obviously would have points of origin in the Middle 
East area that would be of concern, Pakistan and so forth.
    The other, though, piece of this is--and this is, again, 
sort of a key part of the threat--is, if I am actually 
interested in targeting the infrastructure itself and 
disrupting, I am going to go to the places where I could cause 
the most harm. So I would go after places like a megaport, 
because even though there may be a lower probability, there 
would be a higher consequence. And so we look at the more 
homegrown threat.
    And the scenarios that I am laying out here really are--we 
don't have active intelligence that says we have existing 
adversaries who are thinking about mass economic disruption 
using the supply chain as their modis operandi. What we see is, 
by viral development, from particularly in Iraq, is terrorists 
increasing are gravitating to targeting infrastructure as a way 
to confront the U.S. instead of going directly at the military.
    And so I would just forecast out, given the dependency on 
the system and given its inherent vulnerability, at some point 
an adversary will likely try to spook us by exploiting it in 
the ways that I have laid out here. And that is why we should 
be working on this problem.
    And it is not to throw the baby out with the bath water. We 
have a lot of good tools. But I think it is important to 
realize we are closer to the starting line than the finishing 
line, given the stakes associated with this issue that we have 
been talking about here today.
    Mr. Koch. Congressman, while I would certainly agree that 
geographies like Indonesia and Pakistan are areas of high 
interest, I would simply defer to your next panel, the people 
who are actually getting the intelligence briefings, to tell 
you where the higher risk is. I wouldn't be able to answer that 
information with enough information to be a credible 
respondent.
    Mr. Peterson. Aren't we dependent on fending countries' 
cooperation to make this work? I mean, we are the market of the 
world. I mean, this is where everybody wants to ship goods. And 
if you are going to ship me goods, I think you have a 
responsibility. And the day you let a dirty bomb get in a 
container coming to me, you are out of business. I mean, you 
are just done.
    I guess, this being just our duty, I--this is their duty. 
Those who are reaping the billions and billions and trillions 
of benefit from our economy, they should be a partner in making 
sure what they are shipping us. And when they can't do that, we 
don't do business there.
    And some of the ones you mentioned aren't big players. We 
could live without them. I mean, they wouldn't totally ruin our 
economy and our trade.
    Mr. Flynn. Congressman----
    Mr. Peterson. Is that a wrong approach?
    Mr. Flynn. There is no question that America has that 
leverage. The fact that we have been able to accomplish where 
we are today with getting both the commercial side, the 
private-sector industry participation, as well as the countries 
who have signed up for a container security initiative is not 
out of a sudden surge of patriotism to protect American lives. 
It is because of a recognition of the broad economics of this. 
That is a leverage point.
    But what is key is there is a bit of schizophrenia here, I 
would argue, on the Hill. On the one hand, we don't trust 
foreigners to do security for us. And on the other hand, this 
can only be done overseas. So we are going to be reliant on, 
essentially, these folks and the tools they have.
    So it is in our national security interest to improve the 
ability to do this at port of loading or further up the supply 
chain. I think we want carrots, as well as the stick we have 
with our economy, to help build that capacity.
    I have not found, as I have been around the world talking, 
particularly to major ports environments and government people, 
as well as industry, that folks say, ``I don't want to do 
this.'' They all see the threat. It is more the issue about the 
coherence of the plan and its sustainability, because anything, 
given the size of the system, that we are going to do is going 
to take some time to roll it out.
    And it has to be harmonized. You know, transportation lives 
and dies by standards. And there is no better illustration of 
that than the container itself, which Malcolm McLean, just over 
50 years ago, came up with as a brilliant idea, and it took 30 
years actually to start to do it. So when we start to think 
about how we do this--and it was a basic chicken-and-egg 
problem. Ships weren't going to be designed to carry boxes if 
there weren't any terminals to take them off. Nobody was 
building terminals to take boxes off because there weren't my 
ships. And the trucks were all different sizes, and the 
railcars were all different sizes.
    So, while the notion was very simple--move everything in a 
box instead of pull things out of cargo--the development of 
this on a global scale was huge. Therefore, now trying to put, 
as we must, the security protocols in the system, it has to be 
done mindful of the need for that cooperation.
    Again, the leverage is there, so we get the attention-
getter. But we really need, I think, to figure out the 
practical methods and the accounts of operations to make this 
thing work. And I think the allies and the folks will be there. 
But it will take their cooperation at the end of the day. And 
we want it to be forward-leaning, because if it is basically 
just going through motions, somebody can compromise that 
system.
    Mr. Koch. Congressman, I think I agree with Steve; there 
are an awful lot of people around the world who are trying to 
work very closely with the U.S. Government on dealing with 
this, and there is a lot of cooperation going on.
    I would also echo his comment that I think our government 
tends to confuse other governments on this issue at times too, 
because our strategy doesn't remain consistent. It moves 
around. And we are not very clear sometimes about exactly what 
it is our strategy is; 100 percent container inspection being a 
perfect example.
    And, finally, I would note that, in terms of setting up an 
internationally consistent way to do this to share the 
obligation on a reciprocal basis, we have to decide whether or 
not we are willing to do on our outbound cargo what we demand 
others to do on the inbound cargo.
    And I would point out we do radiation screening of zero 
exports. We do NII examinations of virtually zero exports. And 
we don't even have rules in place to implement a law passed 5 
years ago for advanced shipment documentation for exports.
    So we are very much inconsistent in how we approach our own 
commerce, wanting to apply rules to inbound commerce that we 
don't remotely apply to our own outbound commerce. So the rest 
of the world, as we go down this road, would justifiably say, 
``Well, wait just a minute. If you are going to do this to us, 
why are you so special?'' And that is an element that we have 
to factor into what the systems are that we are going to apply 
to this.
    Mr. Peterson. But I think our record is pretty good. We 
have a little credibility.
    Just one quick question----
    Mr. Koch. I agree with that, but our trading partners----
    Mr. Price. The time of the gentleman has expired. We will 
come back. We are going to have votes in just a moment.
    Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman. And forgive my 
tardiness. Trying to cover too many meetings at one time.
    I want to pick up on what Mr. Peterson was asking. I was 
going to go another way. I live in an international community. 
Across our river, Detroit River, is Canada. Good partners. We 
are not near as busy as Singapore or Hong Kong, but 
international nonetheless. I always say that our northern 
borders in America are not nearly as protected as our southern 
borders, for a number of reasons, some good, some bad. The kind 
of world we live in, we need more.
    But I want to go back to your last statement, Mr. Koch, in 
terms of inbound and outgoing. Yes, we need to do on our own 
going out. First priority, in my opinion, is the inbound, what 
comes in, in that much of the shipments that come in are 
private. And I see, regarding my notes here, that you represent 
and are president of the World Shipping Council.
    Was your last statement an indictment on us, or is the 
Council doing more to protect us on the inbound?
    Mr. Koch. Oh, it is not an indictment at all. It is just an 
observation that the rest of the world, in looking at how we 
put this together, often comments on the fact that what the 
U.S. wants to do focuses only on inbound, whereas there is a 
legitimate expectation on their part that we would also 
understand that it ought to be considered for outbound cargo as 
well.
    Ms. Kilpatrick. And I think we want both. As a matter of 
fact, I know we want both. In the world that we live in--and 
the Homeland Security Department is only 4 or 5 years old, so 
we anticipate--and Defense, by the way, is 20, and we are still 
massaging it. So we have a long way to go to get it just like 
we want it and need to be. But there are things that have to be 
looked at, properly prioritizing, in light of the dollars that 
are associated with each of those exercises.

                         WORLD SHIPPING COUNCIL

    What is the World Shipping Council currently doing? And I 
am assuming that you represent several businesses who own these 
companies who do the shipping. What are some of the things that 
your Council works to improve, in terms of incoming cargo?
    Mr. Koch. The Council's members are the container ship 
operators, themselves, that carry the cargo. They carry 
probably roughly 93 percent of the containers coming in and out 
of the U.S.
    So what we are doing is working with CBP and with the U.S. 
Coast Guard on the whole range of multilayered programs that 
they have to try to deal with this, whether it is C-TPAT, where 
all the ocean carrier members are participating in that, 24-
hour-rule manifest where we file with Customs 24 hours before 
vessel-loading all the information we have about shipments, 
working with Customs on developing the improvement of that 
risk-assessment program, such as the 10 Plus 2 program, working 
with them on the pilot programs that they want to undertake, 
whether it be container inspection through Security Freight 
Initiative or whether they can use our assistance in dealing 
with the CSD pilots that they will be developing as they move 
forward.
    If they have something that they would like us to do, we 
want to work with them. Because when the U.S. Government 
becomes comfortable with the confidence that they may have in 
this trade, that is absolutely something we want.
    Ms. Kilpatrick. And that is an appropriate answer to say, 
but they want something--and we all want 100 percent checked 
and inspected and secure and safe--how close do we get to that 
100 percent in the capacity of the Council?
    You work with them, but I am assuming it is a two-way 
street in terms of information exchange and building the 
partnership in the secure nature that we want the freight to 
have. How close are we to that?
    Mr. Koch. To 100 percent safe?
    Ms. Kilpatrick. Yes. From what you do and what you 
represent in their 90-plus percent of the cargo that comes into 
our country.
    Mr. Koch. I think the vast majority of the cargo that comes 
into the country is legal, it is safe. I wouldn't have a 
number. Mr. Ahern may know.
    What is interdicted may be interdicted for a lot of reasons 
that don't have anything to do with safety. It may be a 
violation of textile quotas or a whole bunch of enterprises 
like that. But the vast majority of the commerce moving in and 
out of the U.S. is lawful and safe.
    Ms. Kilpatrick. Is it inspected? What percent?
    Mr. Koch. I would refer to CBP to give you precise numbers, 
but my understanding is, on inbound boxes, it is probably 
somewhere in the neighborhood of 5 percent.
    Ms. Kilpatrick. Last question. How does that compare to the 
rest of the world, in the busiest ports and otherwise?
    Mr. Koch. I don't have an answer for that.
    Ms. Kilpatrick. Somebody may.
    Mr. Koch. Yes. I don't know.
    Ms. Kilpatrick. Okay. And what is the main mission of the 
World Shipping Council?
    Mr. Koch. We are a nonprofit trade association. We 
represent those containership operators and liner shipping 
companies. So we try to interface with the European commission, 
with U.S. Government, with various international organizations 
on any public policy issue that affects the membership.
    Ms. Kilpatrick. So if there were a tragedy, God forbid, and 
we had to look at one of the shippers who actually handles the 
cargo, would your Council also be liable?
    Mr. Koch. They would not be liable, but they would 
certainly do everything they could to help pass communications 
back and forth between the industry and the Government.
    One of the issues that Steve raised earlier on was the need 
for contingency planning, what happens when we have an 
incident. The Commandant of the Coast Guard and the 
Commissioner of Customs recently signed a joint protocol as to 
how they would, in fact, communicate and coordinate efforts for 
the U.S. Government. They have reached out to the Council and 
asked us to put together operating people within our member 
companies who could interface with that joint effort that CBP 
and Coast Guard has. And we are in the process of trying to 
assemble that interactive communication mechanism to be of 
assistance.
    Ms. Kilpatrick. Thank you.
    Thanks, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman.
    I do apologize for being late this morning. And I may have 
missed what I want to ask a question about. But we are here to 
come up with solutions to problems and do that by gathering 
evidence. And I agree with pretty much everything you have 
said, although I went with Mr. Rogers to look at container 
safety in several ports in the world, and I felt a little 
nervous about it, to be honest with you.

                             NUCLEAR WASTE

    And I also agree that if I wanted to blow something up in 
somebody's country and I got my hands on a nuclear weapon, I 
wouldn't put it in a container and turn it loose and hope it 
gets there. It costs too much money, and it is too hard to get 
your hands on. So I agree with what you said. I think there 
would be some other alternative way if I had possession of a 
nuclear weapon.
    But as far as nuclear waste is concerned, I think the 
question that my colleague Mr. Peterson asked was where is the 
most applicable that you could purchase an outlawed nuclear 
weapon of some sort. I would also like to know, is the same 
areas that you are out there the best place to buy nuclear 
waste over, say--you know, you hear these rumors that you can 
collect the disposable stuff from the hospital and this nuclear 
waste and package it up and make it blow up.
    Is there more availability of the type of nuclear waste 
that would make a dirty bomb overseas at certain areas, the 
areas that you just told us, or not? That is one question I 
have.
    Then secondly, I haven't heard your solution--now, maybe I 
missed it--but your solution to this problem. Everybody pretty 
well said Mr. Rogers's solution, the technology wouldn't work. 
I just want to know why it is 5 years going, we have been 
lucky, if you really look at it, and we just don't see to be 
inspecting a whole lot of cargo.
    So what is your solution to the problem?
    Mr. Flynn. I think Mr. Oxford may be able to help, as well, 
on the issue of the specifics about where nuclear material may 
be gathered. You know, it is very important, I think, to make 
the difference between a nuclear weapon and a dirty bomb.
    Mr. Carter. I am.
    Mr. Flynn. I do put, though, a dirty bomb in a container as 
a higher-probability scenario because of the effect on the 
system, again, if I am going to target the infrastructure. So I 
think that is why I think that is one we have to be mindful of, 
versus the nuclear weapons scenario.
    We are talking about commercial-grade radioactive materials 
that is found in medical equipment, that is found in oil 
exploratory equipment, that is found in a variety of items that 
are used in the developing world as well as the developed 
world. And we are not talking huge numbers to be able to create 
a radiological dispersal device. There is obviously more of 
that overseas. There is the orphaned materials here in the U.S. 
itself. Keeping track of this, since there is so much of it 
around, is hard.
    Now, the life and death impact of that is very small, but 
it is a real, obviously, again, method of disruption because of 
the fear that it generates and the clean-up challenges that it 
generates.
    So we have a problem globally on this. And not 
surprisingly, more of this material is in developed countries, 
but there is a growing amount in developing countries because 
of its use and application--and the ability to dispose of it. 
When equipment is no longer valuable and useful, people tend to 
throw it away, so there are ways to get it.
    So the ability to construct a conventional explosive and 
find nuclear-grade material to mix in it here is not a 
particularly high bar and one that we need to be worried about. 
And we know that al Qaeda have intent, a stated intent, about 
that kind of development.
    In terms of the kind of solution, I want to emphasize this 
again, a complex problem of huge global scale of enormous 
stake. And so, not surprisingly, there is no one solution, 
because the system itself is so dynamic. But one that I am 
currently working with the port of Los Angeles on an initiative 
where they are reaching out to the largest container terminal 
operator in the world, Hutchison Port Holdings, and trying to 
begin a process where the terminal operator itself will buy the 
equipment for a radiation screen and a gamma screen and house a 
secondary screen capability inside the terminal, where LA is 
looking at paying the terminal operator to do the screening.
    And they are trying to create an incentive structure where 
basically that could be done by a third party with the 
supervision of U.S. authorities, where that information could 
be made available at no cost to the Government, but also where 
setting high standards, which we hope the Department of Energy 
would help to make sure they are set and the quality control is 
there, that you build the analytical capability as a third-
party operation, not just as a sole Government operation, to 
deal with those resource issues.
    No third party can accept the liability of doing this on 
its own. So the Government has a critical role to play, and 
that is why you want to share it back and forth. But LA is 
looking at that and made that initiative as a business 
continuity risk they see associated with a dirty bomb or a 
nuclear weapon--low probability but high consequence.
    The chief operating officer of that port, John Holmes, 
recently had a chance to bring Secretary Leavitt around the 
port when the food supply issue was getting high profile. And 
Secretary Leavitt pointed out that--wanted to see the radiation 
portals, and said, ``Isn't this great we got you these 
portals?'' And Captain Holmes' response was, ``Well, Mr. 
Secretary, it may be great for the heartland, but it is not 
good for the port of Los Angeles. If we find a bomb here and it 
goes off, I've lost billions of dollars of infrastructure. If 
we find it here and it hasn't gone off, I have a labor force 
that walks out and my operations are shutdown. If we find it is 
coming here, you disrupt my operations. I want to find it 
before it starts. So as a business continuity risk, I have an 
interest in trying to find a way to do more screenings being 
done now.''
    And they are also, frankly, trying to drive this because 
they know Congress has said it is by law, right now, that we 
have to get 100 percent screening by 2012. Deadlines are always 
fudgeable, I suppose, but that is the law right now. And the 
reality is we are doing about .13 percent in Hong Kong. So it 
is probably somewhere in the middle of that that we are going 
to be working. And they are worried waiting for a Y2K moment, 
New Year's Eve 2011, when DHS says, ``Here is how you are going 
to do it,'' and it can't be done, and the system then binds up.
    So there is incentive here for the people in the industry 
to develop tools, working closely with the U.S. Government. Not 
surprisingly, it is very complicated. I would suggest, though, 
that same capability could then be tied into container devices 
that come in as well, as those get developed, as we work out 
all the kinks there and get the operations. But one can imagine 
ways in which the market can figure out to do this. And the end 
game would be that the terminal operators themselves would 
charge a surcharge fee for every container coming in to them to 
pay for the overhead to keep this an ongoing concern.
    That is a long ways from where we are now----
    Mr. Carter. You bet it is.
    Mr. Flynn [continuing]. And it will be quite a rush to get 
there, but there are tools that can be done.
    The scale of the problem warrants, I think, the level of 
creativity investment along that score. We clearly are not 
there as a country. We set a very high bar, but we are not 
putting in a lot of resources.
    And the gentlemen behind me are the folks that run the 
real--again, when we look at the actual dollars they are 
receiving, the personnel they have to do something of this 
scale, we are not treating this like putting a man on the moon. 
We are basically saying, ``Do this on top of everything else 
you are doing.'' And the stakes would sincerely warrant, it 
seems to me, a much larger effort by the Government than the 
one we have asked these agencies to do.
    Mr. Carter. Thank you very much.
    I assume you agree with what he says?
    Mr. Flynn. Parts of it.
    Mr. Koch. I would say, to your first question of where 
materials could be gotten for dirty bombs, Mr. Oxford could 
probably answer that better than I. But certainly there is 
enough domestic material available for that. You don't have to 
go foreign for that kind of enterprise.
    As to the issue that Steve talked about, about this idea 
that Hong Kong and LA are coming up with it, it deserves to be 
fleshed out clearly, and then a discussion has to occur. Is the 
operation acquisition of that equipment something that the 
Congress believes is a private company enterprise? And that may 
be blunt. Is Dubai Ports World somebody that this Congress 
trusts to do this? This Congress made a pretty clear statement 
about its view of foreign terminal operators and their security 
value during the last Congress. And so, what is being proposed 
here is this would be transferred over to those enterprises to 
do this.
    It is a key strategy question. As I said earlier, the issue 
in a lot of this is not the details of a proposal; it is, what 
is the strategy here we are trying to implement? Who are you 
going to trust? Is this a sovereign function, or is this a 
private function?
    Secondly, once you have decided that issue, even if you 
assume it, there is a whole host of issues that would have to 
be addressed. It is easy in Hong Kong; there is not much 
transshipped cargo in Hong Kong. How one would conduct 
radiation and NII scanning of all boxes in a place like 
Singapore boggles the mind.
    And thirdly, you have to bring CBP to the table--which is, 
these terminal operators can certainly build a business plan 
where they can make a lot of money by checking X number of 
bucks for every box that goes through a scan, but they are not 
going to touch the analytical work. So what is it--the 
interface with the U.S. Government, what is going to be done 
with this information?
    Those are all the key strategy questions that don't get 
answered by simply people throwing out ideas of, ``I will build 
this, I will charge you X amount of money for running a 
container through it, but you figure out what you are going to 
do with it.'' We have to figure out what we are going to do 
with it before we decide it makes sense to do this in a bigger 
picture.
    Mr. Carter. Thank you.
    Mr. Price. Thank you very much.
    Ms. Roybal-Allard.
    Ms. Roybal-Allard. No questions.
    Mr. Price. Mr. Culberson.
    Mr. Culberson. Mr. Chairman, having just gotten here--I 
have been on the floor in debate--I want to listen to the 
testimony and read the testimony. I will pass for now. Thank 
you very much.
    Mr. Price. All right. Well, thank you.
    I want to thank both of you gentlemen. You gave us a lot to 
think about. You gave us excellent statements. Your answers 
were responsive. We are very grateful for your being here.
    As we bring up our next panel, I want to give you advance 
notice. I am sure we will all have some questions for the 
record, but I want to ask you in particular to give us as 
concise answers as you can manage about the next question I 
would have asked. And it was raised very sharply, I think, by 
the proposal Mr. Rogers asked you to comment on and also by the 
responses to Mr. Peterson and Mr. Carter. And that does have to 
do with the private-sector role here, something very central to 
Mr. Koch's concern but of concern to us all.
    And I am talking here partly about cost-sharing, burden-
sharing, the kind of costs that are going to be borne in 
establishing the kind of system we need, also to be shared 
among shippers, carriers, consumers. But I am also talking 
about the kind of processes, adaptations that are going to be 
required on the part of the private sector, their role in 
pulling this off.
    And that is central to this area, in particular, of 
Homeland Security. And so we will be looking for your wisdom on 
that as we approach this, not just from a budgetary standpoint 
but think about what these processes are going to look like and 
how they are going to be made to work.
    So thank you, both of you. We are grateful for your help 
this morning.
                              ----------                              

                                        Wednesday, April 2, 2008.  

               CARGO CONTAINER AND SUPPLY CHAIN SECURITY


                               WITNESSES

JAYSON P. AHERN, DEPUTY COMMISSIONER, U.S. CUSTOMS AND BORDER 
    PROTECTION, DEPARTMENT OF HOMELAND SECURITY
VAYL S. OXFORD, DIRECTOR, DOMESTIC NUCLEAR DETECTION OFFICE, DEPARTMENT 
    OF HOMELAND SECURITY
    Mr. Price. And let me call our Homeland Security Department 
witnesses to the table. We will hear from Jayson Ahern first 
and then Vayl Oxford, the director of the DNDO.
    Thank you, gentlemen, for being here.
    Mr. Ahern, please proceed.

Statement of Mr. Jayson P. Ahern, Deputy Commissioner, U.S. Customs and 
                             Border Patrol

    Mr. Ahern. Good morning, Chairman Price, Ranking Member 
Rogers, distinguished members of this committee. Thank you very 
much for the opportunity to discuss United States Customs and 
Border Protection's cargo security efforts and our other border 
security efforts as well.
    First, I want to thank this committee for its strong 
support of CBP over time. You certainly have enabled us to make 
significant progress toward protecting our Nation, and we look 
forward to working with you to continue to build upon the 
success.
    Mr. Chairman, you and your colleagues have seen CBP's 
operations in a number of domestic locations. You have also 
traveled to Amman, to Egypt and elsewhere to see our Container 
Security Initiative and our secure initiative operations. We 
appreciate your efforts to witness firsthand also the 
multilayered cargo enforcement strategy and the incredible 
volume and the complexities that we deal with on a daily basis.
    Our layered approach is one we apply to all modes of 
transportation: Air, land, as well as sea. It includes advanced 
information, sophisticated technology, and partnerships with 
the trade community as well as other countries, our critical 
partners.
    We continually point out that the layers of the strategies 
are interdependent. Different layers focus on securing various 
parts of the supply chain, and this ensures that cargo is 
regularly assessed and that security is not relying on one 
single point that could be compromised.
    I am concerned, however, that while we continue to increase 
resources for initiatives like Secure Freight Initiative, we 
could be neglecting other areas of concern that potentially 
pose greater risk and vulnerability to this country.
    DHS has dedicated significant resources and efforts to our 
cargo and port security programs. And over the last several 
years, we have continued to develop a robust risk-management 
approach. Our focus on risk management in security has to be 
driven by informed judgment about the totality of all the 
risks. Although there has been much discussion about maritime 
container security in recent years, we have also been, and must 
remain, focused on other threats to our borders and to other 
components within the supply chain.
    We must remain vigilant, for example, in securing all 
conveyances, in screening passengers at our land border ports, 
seaports, railways and small vessel terminals. In fact, 
although when we frequently talk about the 11.5 million 
containers arriving in this country in the maritime 
environment, we often don't talk about the fact there is an 
equivalent amount that cross the borders by truck, from Canada 
and Mexico, on an annual basis. General aviation and small 
vessel traffic require more attention.
    People looking to gain entry to this country to do us harm 
remain the most significant threat facing this country today. 
In order to manage risk, we must strike a better balance and 
direct our resources, as precious as they are, to those areas 
that present the greatest risk to this country.
    And as we, the Department and this Congress, look to apply 
limited resources to multiple areas of threatened 
vulnerability, we should not overemphasize maritime containers 
to the potential detriment to other threat areas that need 
those resources.
    Since today's hearing is focused on maritime container 
security challenges, I will speak to the many layers that have 
been put in place, all post-9/11.
    Our layered strategy is well-known, well-critiqued, and 
occasionally elements are critiqued in a critical way. In my 
view, when aggregated together, they provide a valid risk-
reduction program that balances the security of the supply 
chain without negatively harming and impacting the flow of 
global trade in creating economic harm.
    We have constantly improved the effectiveness of every 
layer of our strategy, and we are not yet done. In my limited 
time, I would like to highlight some of the latest improvements 
of the various layers.
    Under the Safe Port Act, Congress mandated that we improve 
the collection of information in advance for cargo shipments. 
We are meeting that goal through the implementation of the 10 
Plus 2 security filing. We published the Federal Register 
notice on January 2nd and closed for comments on March 18th. We 
received over 200 comments that we are analyzing at this point 
in time. We are going to issue the final rule later this 
summer.
    C-TPAT--we have continued to increase the rigor of our 
Customs-Trade Partnership Against Terrorism with our partners 
in the trade community. We have clearly defined minimum 
security requirements for all categories of participants. And 
we continue to strengthen the partnership with the member 
companies and leveraging the corporate influence throughout the 
entire international supply chain. And C-TPAT will also 
continue to ensure compliance with the Safe Port Act, as well.
    The Container Security Initiative--we have continued to 
develop that program and work in partnership with the 
Department of Energy and the Megaport program. And CBP does 
partner with other countries, our critical foreign partners, in 
developing these programs to prevent terrorist weapons from 
entering the United States. CSI is operational today in 58 
ports, covering 86 percent of the maritime container cargo that 
are destined for the United States.
    The Secure Freight Initiative is the integrated scanning 
initiative system of RPMs, large-scale X-ray systems, and 
scanning containers as they move through three ports of Port 
Qasim of Pakistan, Port of Cortez in Honduras, as well as 
Southampton. They have been operational since October of last 
year. We have submitted a preliminary report on what we have 
learned from these pilots, and we will be sending another 
report to Congress later this month.
    I also, at this point in time, want to apologize to this 
committee. We are overdue in that report, and unfortunately we 
didn't send this to the committee until late last evening--
hardly enough time for you to review it, to provide enough time 
to review and analyze that. And I would be happy to come back 
to answer any questions in more detail after you have had 
adequate time to review that.
    But there are many challenges that we face, and we will be 
looking at some of these throughout the course of this hearing. 
Significant costs associated with the 100 percent scanning of 
the 11.5 million containers. And while looking at additional 
data certainly may improve risk management to some degree, the 
commitment of resources may also be directed toward other 
venues that provide a more significant threat and warrant 
closer scrutiny and could be a better use of the dollars that 
we have.
    I also think it is important to mention that no one should 
be misled that 100 percent scanning equals 100 percent 
security. Technology certainly is a key element of the 
strategy, and we have deployed large-scale X-rays and a variety 
of other radiation-detection devices at our Nation's seaports, 
airports, and land border ports of entry. Currently, our RPMs, 
they are scanning 98 percent of the containers at our seaports 
here in the United States before they enter into the commerce 
of the United States.
    We also are working with our partner agency, DNDO, on 
looking at the next generation of advanced spectroscopic portal 
monitors.
    And we certainly are looking at the conveyance security 
device, Ranking Member Rogers, and we have closed on that 
process as far as with the procurement process that went out 
there. We had 10 companies that applied. Three were responsive 
to the technical requirements. We will be going through 
significant testing over the next few months. And then we will 
actually be going out and testing in certain pilot modes, as we 
go forward. So we will be happy to take more questions on that 
when we get into the environment of asking a question.
    But I think it is important, as I talk about technology, in 
my 32 years I have not seen one single solution, whether it be 
technological or concept of operation or personnel or training, 
that is the silver bullet to meeting the various types of 
intricate challenges we face in border security.
    And I certainly have had a chance here to outline some of 
the initiatives and some of the steps we have for enhancing 
cargo security. And I will tell you we continue to improve, and 
it is my personal pledge to this committee that we continue to 
do so.
    I believe we need to be alert and address ourselves, 
focusing on the risk to our border in its entirety. To that 
end, we must effectively have a responsible, layered security 
in our sectors that I mentioned previously to keep bad people 
and bad things from entering into this country.
    This effort needs to receive the same level of support and 
interest as Secure Freight and 100 percent scanning has. With 
your continued support, I am confident that we can meet the 
challenge of the ongoing terrorist threat and balance a 
fiscally prudent response as we look forward to maintaining 
both the security this country requires of us and also not 
negatively impacting the legitimate flow of commerce and trade 
into this country.
    I look forward to having a dialogue with you today.
    [The information follows:]
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    Mr. Price. Thank you, Mr. Ahern.
    Let me announce to the committee that we will ask Mr. 
Oxford to complete his oral statement, but then we will need to 
go to the floor to vote. We will reconvene immediately after 
the third vote for questions.
    But, Mr. Oxford, we invite you to proceed.

 Statement of Mr. Vayl S. Oxford, Director, Domestic Nuclear Detection 
                                 Office

    Mr. Oxford. Good morning, Chairman Price and distinguished 
members of the subcommittee. I would like to thank you for the 
opportunity to discuss challenges in container security and to 
provide highlights of DNDO's 2009 budget request.
    Additionally, I would like to thank the committee for its 
past support of DNDO as we address the threat of nuclear and 
radiological terrorism. I am also pleased to be here today with 
my colleague, Deputy Commissioner Ahern.
    The threat of nuclear and radiological attack remains real, 
but it has evolved over the last 2 decades. The nuclear 
confrontation between the U.S. and the Soviet Union is gone, 
but new threats have emerged: North Korea has developed and 
tested nuclear weapons. Iran continues to enrich uranium that 
could result in the capability to produce nuclear material 
needed for a nuclear weapon. The A.Q. Khan network has been 
disrupted, but its overall impact is still uncertain, and the 
situation across Pakistan in general is very troubling. 
Terrorists continue to seek to acquire nuclear weapons and the 
material required for both dirty bombs and nuclear weapons to 
advance their idealogical agenda.
    The U.S. strategy to combat this threat is based on three 
major challenges: reducing the U.S. and former Soviet 
stockpiles of nuclear weapons, as well as securing the 
materials associated with them; addressing the proliferation 
risk associated with the growing demand for peaceful nuclear 
energy that could be used as a step to producing the material 
needed for a nuclear weapon; and addressing the threat posed by 
nuclear materials and weapons in the hands of terrorists.
    To deal with the terrorist threat, the strategy calls for 
several factors: expanded intelligence efforts to assess 
terrorists' capabilities and intentions; focused interdiction 
to deny terrorists access to nuclear materials and the 
expertise they seek; expanded efforts to prevent nuclear 
material or weapons from being imported and used against the 
U.S.; and, finally, strengthen nuclear forensics capabilities 
to support attribution and deterrence.
    DNDO was established, in large part, to address major 
elements of the last two components of this strategy and to 
work with the intelligence and interdiction communities to 
deter, prevent and disrupt terrorist efforts to attack the U.S. 
with a nuclear or radiological weapon.
    Recognizing the capabilities and motivations for such 
attacks on the homeland exist and could grow, DNDO is working 
with its partners within DHS and the interagency to develop a 
multilayered defense where success will be based on several 
factors: first of all, identifying key vulnerabilities and the 
technical and operational solutions needed to reduce such 
vulnerabilities; developing the means to engage the threat 
along multiple pathways; developing systems with high-
confidence detection and identification capabilities; and 
ensuring that interdiction protocols are in place once a threat 
is identified.
    Let me now discuss DNDO's evolving vision and highlight of 
our budget priorities.
    Since its inception in 2005, DNDO has had a principal focus 
on addressing challenges associated with container security, 
and, as Commissioner Ahern has stated, tremendous progress has 
been made. We are now scanning 98 percent of the containerized 
cargo entering the U.S. through our major seaports, while also 
scanning 100 percent of containerized cargo coming across our 
southern border and 91 percent along the northern border.
    Meanwhile, we have plans in place with CBP to reach 100 
percent cargo scanning along the northern border by the end of 
2009, while also addressing smaller seaports, airports and 
personal vehicle traffic.
    This is real and measurable progress; however, we recognize 
the limitations in our current detection capabilities and are 
addressing them through our development and acquisition 
programs.
    The Advanced Spectroscopic Portal program shows real 
promise in improving the capability to detect and identify 
threat versus non-threat materials, while also reducing the 
number of secondary referrals that CBP must adjudicate. I am 
confident that we have a sound approach for taking an informed 
certification and production decision to the Secretary later 
this year.
    With respect to the 2009 DNDO budget request, it reflects a 
balanced approach to address the vulnerabilities across ports-
of-entry and non-ports-of-entry threat pathways.
    Specifically, for ports-of-entry, the request includes: 
$157.7 million to acquire 365 and deploy 174 portal systems to 
address existing gaps in coverage along the northern border, 
airports of entry, and smaller seaports; $13 million to acquire 
and deliver handheld detection devices to recapitalize CBP and 
U.S. Coast Guard capabilities and to support pilot initiatives; 
$26 million for the Joint Integrated Non-Intrusive Inspection 
program to develop and evaluate a system to automatically 
detect special nuclear material and the materials capable of 
shielding, while also inspecting containers for traditional 
contraband such as explosives and drugs; $21 million to explore 
options to address scanning associated with intermodal and 
international rail; and $10 million to address solutions to 
augment existing systems to scan international general aviation 
aircraft landing at our ports of entry.
    Regarding threats related to non-ports-of-entry pathways, 
the 2009 budget request includes: development of detection 
systems for commercial aviation baggage and passengers; 
continuing the maritime pilots in Puget Sound and San Diego; 
initiating deployment of handheld detection systems to the 
Border Patrol and completing field evaluations to determine 
other capabilities they might need; completing the technology 
demonstration of the Intelligent Personal Radiation Locator, 
which is a BlackBerry-sized device, to do radiation detection; 
completing the Securing the Cities Initiative in the New York 
City region; and training over 3,600 law enforcement agents in 
the proper use of radiation-detection equipment.
    In conclusion, the DNDO mission reaches far beyond 
container security, and it has been the cornerstone of our 
efforts to protect the Nation from nuclear terrorism. Each 
layer of our strategy closes potential gaps and pathways for a 
terrorist attack, complicating the terrorist strategy and 
increasing the odds of failure. As each layer of the strategy 
is strengthened, so too, is Homeland Security.
    Mr. Chairman, Ranking Member Rogers, and members of the 
subcommittee, this completes my statement, and I will be glad 
to answer any questions.
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    Mr. Price. Thank you very much. And we will look forward to 
resuming as soon as these votes are concluded.
    [Recess.]
    Mr. Price. Gentlemen, let us resume.

                       SECURE FREIGHT INITIATIVE

    I will begin with a question having to do with the Security 
Freight Initiative.
    SFI is designed to meet Safe Port Act mandates to scan 
containers in overseas ports, as well as to pilot test methods 
to meet the 9/11 Act mandate for 100 percent overseas scanning. 
As you said in your testimony, the Phase 1 SFI ports are at 
Southampton, England; Qasim, Pakistan; and Cortez, Honduras. 
There is limited implementation at Salalah, Oman, and 
individual terminals at the ports of Singapore, Hong Kong, and 
Busan, Korea. In January, our committee toured the port of 
Salalah, which is becoming an SFI port this year.
    Commissioner Ahern, the CBP Web site says Phase 1 SFI ports 
will scan 100 percent of U.S.-bound cargo. As I heard you 
today, you were a bit more nuanced, saying CBP is attempting to 
achieve this goal.
    Candidly, what is your experience, to date? Are you 
achieving this 100 percent anywhere? Is it going to be feasible 
in the near term to achieve it?
    And beyond that, how would you assess and how do you assess 
and verify the scanning at the three initial ports, in 
particular Qasim, which uses so-called remote screening and 
relies on foreign nationals at the port?
    Mr. Ahern. Thank you. If I did cause any with the nuance, 
it was making the reference and distinction between the three 
ports that we currently have implemented under the Safe Port 
Act, which are 100 percent, versus moving forward with the 
current mandate of 100 percent by 2012. And some of the issues 
that face us to move forward with 100 percent globally are 
certainly challenges, and I really hope to have an opportunity 
to speak in some detail about that as well.
    But for a place like Qasim, Pakistan--and I should mention 
also, even before the Safe Port Act and also the 9/11 Act were 
thought of, Customs and Border Protection recognized the risk 
in a place like Pakistan and the Port of Qasim and recognized, 
under our Container Security Initiative model, that we did not 
have the opportunity to put our personnel on the ground there 
because of the security issues of being outside of the Embassy 
or the consular compound. And we still realized we needed to 
figure out a way to be able to do scanning of the containers 
that come out of that particular area of the world. It is only 
about 3,000 containers a year that come from Qasim to the 
United States.
    And we were actually in the process, before the Safe Port 
Act, again, to conceive the program of having a joint 
partnership with the Government of Pakistan, having actually 
MC-hired personnel that are foreign service nationals to 
actually be able to be there within a secure compound that we 
would go over and we would certify, and then have the ability 
to monitor in a variety of different ways. And I will go 
through those.
    Certainly, with the capability to have 100 percent manifest 
information, that gives us control on what the inventory is 
being put on a ship bound for the United States. We then had 
the ability to have every one of the containers as we continue 
to move forward with the implementation of having radiation 
portal monitors put on the ground, as well as the X-ray 
capabilities, and then also having the remote imaging of those 
real-time provided to us in the United States. We have a one-
by-one inventory of what actually is coming out of that 
universe. Special circumstance, because it is only 3,000 
containers a year, versus a Hong Kong, which is 1.2 million 
containers per year. Just unrealistically feasible when you 
compare Hong Kong, but very feasible when you look at a place 
like Qasim, Pakistan.
    Mr. Price. So how would you assess where you are versus 
where you want to be and need to be, with respect to the kind 
of pilot role of these three ports?
    Mr. Ahern. The three pilot ports, I would submit--and, 
again, I regret that the report did not get here in advance of 
this hearing. And I will offer again, if you would like any 
further detailed briefing outside of the hearing, we will be 
happy to that.

                    SECURE FREIGHT INITIATIVE--CONT

    Mr. Price. We realize the report just arrived, and we will 
be perusing it. If you could just give us a quick update based 
on that.
    Mr. Ahern. My take is, at this point, we will have the 180-
day test--actually it would be concluding on April 13th, and we 
will be doing the full report. But a couple of the points that 
we have seen thus far. Even though Southampton, very small 
universe--again, it is about 30,000 containers; Honduras is 
about 60,000; it has been stated that Pakistan, Port Qasim, is 
about 3,000--very manageable workloads coming out of those 
environments. And that is something that, again, we had good 
host-country partnerships, which is a key thing when we 
consider any kind of overseas initiative. You have to have the 
partnership of the foreign government and their authorities.
    When I look at where we are, at this point, some of the 
things, beyond just the costs involved with something like that 
that are not inconsequential--and just for these two ports, I 
believe our investment for CBP and also for the Department of 
Energy is about $30 million each just for these three very 
small, modified implementations.
    But challenges we have identified thus far, as we go 
forward, is certainly looking at sustaining this scanning 
equipment, not just as far as recurring operation and 
maintenance costs that will be recurring over time, but we also 
realize, as far as with our own examples here in the United 
States, sometimes this breaks down. And what do you do in that 
particular environment, when you are facing up to a 24-hour 
departure requirement? Those things are issues.
    Some of the extreme weather conditions we see in a place 
like Pakistan--power outages, things of that nature.
    Varying costs of transferring data back to the United 
States. You had the opportunity to go to Oman, and I believe 
they probably told you that it is going to be into the millions 
of dollars a year just to pay the data transmission from the 
overseas location back to our national targeting center here in 
the United States for, again, a relatively small population of 
containers. So that is going to be a real issue.
    Two weeks ago, I was in Southampton and looked at that 
footprint. It is a very small footprint. It is a very 
manageable footprint, but to have the portal monitors, to have 
the X-ray capabilities and be able to have an inspection site, 
as well as a secondary location, you don't have that luxury 
elsewhere.
    So, even though these were small locations that were 
manageable for meeting the requirements of the Safe Port Act, 
when you then go ahead and put them out exponentially what it 
would be in a large, meaningful port, those are significant 
issues.
    On the point of Southampton also, transshipment containers 
we are not going to have the opportunity to get, because the 
way it is currently set up and given the current operational 
throughput capacity of a foreign terminal operation, it is 
basically gate traffic that you have the opportunity to get. So 
transshipment is a huge problem, as we go forward.
    Mr. Price. Let me ask you to focus just for a moment on the 
personnel aspect of this. You referred to this briefly.
    We did have, I think, very enlightening, not necessarily 
totally encouraging visits to Alexandria, Egypt, and Salalah, 
Oman. And the question of personnel does arise there, both the 
quantity and the training and qualifications of the personnel. 
We realize Alexandria is clearly the more difficult case, in 
terms of technical and organizational and cultural challenges. 
But it was pretty clear that problems there had been 
exacerbated by having four different program managers in just 
about 4 months.
    So staffing these posts, I think all of us came back with 
more of a sense of just how challenging that was, both staffing 
it from our side and staffing it from the foreign national 
side. There are some skill sets here that are not normally in 
ample supply. And it is not a function, it is not a role that 
CBP is used to playing, this degree of international presence.

                    SECURE FREIGHT INITIATIVE--CONT

    Having people on the ground who can be, day to day, with 
foreign institutions, with our partners, developing working 
relationships, that is a big challenge. CBP, we were told, 
needed to transfer one of their rare Arab speakers from Salalah 
to Alexandria. That just illustrated how thinly staffed CBP was 
in that regard.
    So I wonder how you are dealing with this staffing 
challenge. The budget request for 2009 provides for only 189 
positions for CSI/SFI. That is no change from the 2008 level. 
So I am amazed that it is a flat funding request, given the 
needs that we saw. But I am well aware the problem is not just 
one of the number of positions, but also the kind of 
qualifications that you are seeking.
    And this isn't something that is going to work just from 
the top down, just from having an agreement among top officials 
from our two countries. This is something that is going to 
require day-to-day engagement and monitoring.
    I am just interested in how you view that staffing 
challenge, what kind of sources are you drawing on to get the 
people you need, and, of course, how are you going to do what 
needs to be done with flat funding.
    Mr. Ahern. Again, I think you address one of the many 
complexities with the overseas initiative, whether it be when 
we first started the CSI program, over 6 years ago now, to the 
58 ports that we have or as we have looked to expand it for the 
Secure Freight Initiative, just three locations and with the 
modified implementations moving forward with the remaining 
three of four ports.
    It does go ahead and require a different type of 
individual. Certainly, we recruit from our core frontline 
officer crew, and then certainly they are very proficient at 
using the technology, because it is basically the same 
technology that we use at our ports of entry, but when you put 
them in an overseas environment, certainly that requires a 
different type of individual. Not every one of our 18,000 
frontline personnel have a desire to work foreign. Do they have 
the language skills?
    You can work around the language skills by hiring an 
interpreter to be there to interact in this. It is unlike an 
environment where you need to be able to take sworn statements 
or have exact interviews translated immediately, but to be able 
to engage you certainly have to have the language capability. 
That is in short supply in some of these countries. We try to 
match that, but oftentimes that is not able to be met.
    The other challenge is beyond just our own staffing 
requirements; it is having the commitment of staffing from the 
host-country counterparts as well. As we have learned from the 
CSI program and the implementation, getting that commitment, 
that was one of the most critical pieces as we moved forward, 
not only just signing the declaration of principles but through 
the implementation of the agreement, making sure that they had 
the will and the capacity, the wherewithal and the resources to 
execute that agreement.
    As we move forward with 100 percent scanning, as we expand 
the SFI program, that is going to be a huge undertaking, not 
only for us but also for our host-country partners that we 
cannot execute the program without.

                        BUDGET REQUEST ADEQUACY

    Mr. Price. And what would you say about the adequacy of 
your budget request?
    Mr. Ahern. I would say that, you know, we would always be 
looking for ways to be able to increase our staffing to fulfill 
our mission on all fronts.
    Mr. Price. Well, beyond that kind of generic response 
though, I mean, are there--it appeared to me, anyway--I will 
just speak for myself--it appeared to me that both the quantity 
and the qualifications of this overseas staff was a challenge 
in these few ports where we have this underway.
    Mr. Ahern. Well, you know, the staffing issues we hoped to 
learn as we were going forward. I can't tell you at this point 
in time that we hit the mark with the 2009 request. As we 
learn, going forward, what is really going to be the future 
with the implementation of the 9/11 Act, I think we will be 
able to give you a better reality of what it is going to take, 
staffing-wise.
    I will tell you, from just experience of what we have seen, 
we are going to need significant amount more resources than we 
requested in 2009 as we look to the 2010 to 2014 cycle. If we 
have to fully implement this by the 2012 mandated in the 9/11 
Act, it is going to take a substantial amount of resources, 
more than I believe that we would even be able to bring forward 
in a request to you. Particularly when you take a look at 
beyond just as far as the overseas capabilities.
    Absent a software recognition package, an anomaly 
recognition software package, we are looking at the X-ray 
images. If 100 percent means 100 percent, that means that every 
single one of those images needs to be reviewed, examined and 
determination made prior to lading. And that means there needs 
to be a trained operator looking at every one of those images 
or to be able to have a credible software package that does 
anomaly recognition to be able to point to what is the anomaly 
within that container configuration. And I would submit to you 
we will probably need a football field or several football 
fields of analysts looking at those images to be able to manage 
the universe of 12 million containers coming to these United 
States from foreign on an annual basis, sir.
    Mr. Price. Mr. Rogers.

                            THREATS TO CARGO

    Mr. Rogers. What can you tell us in this setting of any 
threats, intelligence threats to cargo or otherwise?
    Mr. Ahern. In this environment, I would submit that, even 
though the maritime global supply chain certainly is of high 
consequence should there be a threat, I can tell you in this 
open setting that I am not aware nor have I actually been made 
aware--and I sit through daily classified briefings at the 
beginning of each day--of any threat to containerized traffic 
for the introduction for a significant nuclear weapon or weapon 
of mass effect destined for this country.
    Mr. Rogers. And, Director Oxford, can you respond, as well?
    Mr. Oxford. Let me start by saying that our chief 
intelligence officer and his counterpart from the Department of 
Energy are testifying in front of the Senate today on nuclear 
threat. I would certainly offer the opportunity for them to 
come in and brief this committee on both an open and a closed 
session. That is what they are doing with the Senate today.
    Let me give you some personal observations. First of all, 
we clearly know the intention is there. And without going into 
a lot of detail, we see their sophistication increasing on 
almost a daily basis.
    There have been over 800 attempts at nuclear smuggling in 
the last several years. What we see is a sense of them getting 
smarter on how to bargain in that trade space. They have been 
scammed multiple times, so we see them in the marketplace 
trying to buy handheld radiation detectors so that when they 
are in the market for buying material they know it is actually 
radioactive material.
    We see them now increasing their attempts to recruit 
smarter people. We see them going after post-Docs coming out of 
colleges around the world to get to smarter people to help 
build their programs.
    Again, their attempts to get material is continuing to 
grow. And as I stated in my opening statement, we worry about 
the growing interest across the world, not just in Iran, on the 
global nuclear energy, the peaceful use of nuclear energy that 
could be used as a stepping stone to enriched uranium that 
becomes, again, problematic from a weapons point of view.
    So I think we see a growing threat in terms of their 
sophistication. They have the intention.
    I would like to suggest, based on some of the previous 
discussions in the first panel, that I also think they are 
risk-averse. I do not think they are going to put a weapon in a 
pathway where they think there are multiple opportunities for 
it to be inspected or intercepted. And that is why we advocate 
the layered defense, as I mentioned before, where we have other 
ways of getting a weapon into this country much quicker without 
it going through multiple layers of potential inspection.

                           THREAT ENVIRONMENT

    Mr. Rogers. Well, this hearing is about cargo containers 
principally. However, the work that both of you are doing has 
application far broader than just that. And you have to spread 
your security across a lot of vectors, maritime security, 
maritime cargo, general aviation, land ports of entry, small 
craft. You name it. What can you say about that, Mr. Ahern?
    Mr. Ahern. As far as the threat or the particular----
    Mr. Rogers. The threat and what you are doing about it.
    Mr. Ahern. I think as far as what we are doing is we are 
trying to apply some of the same layers. When you look in the 
truck environment, we are getting advance information, but it 
is not 24 hours in advance, it is, depending upon the mode, 
whether it be a trusted shipper or not, it is 30 minutes or 60 
minutes and still running it through the same targeting system. 
On the borders with Canada we have 91 percent of the truck 
traffic coming across that go through radiation portal 
monitors. We are at 100 percent on the southern border. We do 
have C-TPAT manufacturers that are part of the shippers that 
come forward. But still with even the layers, there are 
opportunities. And again, I believe what Mr. Oxford said is 
appropriate. Is somebody going to go ahead and try to come 
through a gauntlet of systems, each one with their flaws? When 
you aggregate them together, it comes with a very solid risk 
reduction protocol. Where are there opportunities in other 
areas where there are not the layers of defense? Some of the 
issues that we are talking about that need attention are small 
maritime environments, something that can be controlled from 
point to point by someone that may have intent of doing harm on 
this country. Or a small aircraft or somebody that can go ahead 
and control general aviation. Or even as we look towards 
securing our physical borders between the ports of entry, some 
of the northern border environments we know we need to do work 
after we complete some of the southern border efforts under the 
Secure Border Initiative.

                         SMALL CRAFT CHALLENGES

    Mr. Rogers. You know, all of this, as we have easily said, 
is highly complex. And I think the best briefing we have had, 
Mr. Chairman, certainly me, on container security and the 
complexities of the problem, particularly from the shippers' 
point of view and the industry's point of view we had in Oman, 
who explained how the cargo containers are stacked on the ship 
and how it is difficult in a trans shipment point to get at the 
particular one. It is a complex problem. However, there are 
lots of similar dangers that are more simply undertaken. I 
remember reading a couple years ago, or whatever, a cheap 
novel--I forgot the name of it--about terrorists shipping a 
small atomic weapon on a small boat up the Potomac, or up the 
Chesapeake Bay to the Lincoln Memorial and detonating it, 
having shipped it overseas into a small port I think in South 
Carolina and then transporting it by truck up to the Chesapeake 
and then onto a small boat and up the Chesapeake to this city. 
What are we doing about that type of thing? Is that farfetched?
    Mr. Ahern. I am not necessarily inclined to say whether it 
is farfetched or not. I would not qualify it that way. I think 
certainly it points to one of the vulnerabilities we spoke 
about here. And that is the small vessel traffic, something 
that can be controlled by an operator from point A to point B 
to the point of detonation. Those are issues that we need to be 
addressing. It is something the Secretary certainly challenged 
us both to do is look at the maritime environment beyond just 
the container traffic. I think that is some of the emphasis 
that needs to be, to focus our attention on versus continuing 
to focus on the maritime container traffic.
    Mr. Rogers. I thought I just did that. I thought I just 
focused attention on small craft. What are you doing about it?
    Mr. Ahern. Again, we are undertaking some initiatives where 
we are looking at having better control over the operators of 
the vessels, certainly some partnership with the Coast Guard, 
whether it is 300 gross tons and below, being able to have them 
tag so we understand where they are. We need to bring that down 
to the small boat operators. When you take a look at not only 
just as far as the Chesapeake Bay environment, go to a South 
Florida, go to a Great Lakes, those are issues that we are 
going to be looking to see what we can do with working with 
Coast Guard and CBP and the department. We actually held a 
small boat summit to take a look at what might be some things 
we can undertake to go ahead and actually engage with the small 
boat operators so we can identify where they are. We need to be 
able to have an effective sorting mechanism of who is a 
compliant boater versus a noncompliant boater to be able to 
target who might be the individuals posing harm.
    Mr. Rogers. Where are we on all these things? I mean, we 
have had----
    Mr. Ahern. Not as far as we need to be.

                     SMALL CRAFT CHALLENGES--CONT.

    Mr. Oxford. Mr. Rogers, if I could help address that. We 
have launched within DHS under the Secretary's direction a west 
coast pilot program. And it is dealing specifically with the 
small maritime craft. We chose two ports, the Puget Sound area 
and San Diego, because of their strategic nature. Seattle will 
be directly involved, for example, in the Vancouver 2010 
Olympics. There will be a lot of traffic that goes through that 
area. It is the third largest strategic port. The Navy has 
strategic submarines in that area. It is the largest ferry 
system in the U.S. And it is the number one port of call for 
CBP's oceangoing pleasure craft that come in. CBP keeps records 
of this every year. So Puget Sound is number one; San Diego, 
again with a large Naval presence as well as the proximity to 
the Mexican border, made them opportune locations to go look 
at, put a layered strategy around major seaports in this 
country to deal with the small maritime issue. And Puget Sound, 
for example, which is the most mature, we have been able to 
find seven screening zones that allow us to put stand off 
around the populated areas of Seattle and Tacoma that will then 
be handed to the operators to come up with concepts of 
operations on how they would detect and interdict materials 
coming into Seattle and Tacoma. So we are starting with those 
two ports. We are also doing this in the City of New York with 
our Securing the Cities Initiative. There is a maritime element 
to that. So we will learn from these, and then we will be able 
to expand that architecture across some of the major ports 
around the country.
    Mr. Rogers. Well, there are literally hundreds of thousands 
of craft that we are talking about coming and going from our 
shores as we speak. So it is an enormous undertaking. But it is 
also an enormous vulnerability that I think we have been slow 
in addressing. And while we have been focused on airline 
security, we are fighting the last war. And while we are 
focused on container freight security, both of which are 
obviously vulnerabilities, there are many, many, many other 
vulnerabilities that we are not doing much on that we will be 
sorry about, I am afraid, one of these days. Let me close my 
section here, getting back to the container security devices, 
the gizmos, containers, where are we?

                       CONTAINER SECURITY DEVICES

    Mr. Ahern. Where we are at this point, first off, we have 
not been neglecting this issue over the last 4 or 5 years. We 
have just not found a device that performs. We recently put a 
request for information out that was responded to by 10 
contractors. We went through the technical evaluations and made 
a determination that three actually had technical capabilities 
and devices worthwhile of testing. We will be doing that 
testing over the next 3 months in a laboratory environment to 
make sure as far as everything that was submitted through their 
technical submission actually would go through performance 
standards before we would then deploy in four or five very 
specific risk environments. We would be looking at those on 
container traffic that would come from a high-risk location, 
like a Pakistan, to the United States where it would make sense 
after we have looked at securing the containers through the 
regime of x ray and RPMs and that high-threat environment, see 
how the seal performs in a maritime environment. As we take a 
look then with a Mexico, where we do see a lot of containers, 
truck containers that leave some of the twin plant operations 
and maquiladoras where things are manufactured, absolutely 
stated correctly in the previous panel that one of the biggest 
vulnerabilities is diversion before it actually hits our 
borders. We do see drugs introduced into the trucks coming 
across the borders. So we are going to look to go ahead and 
secure that with a device and see how it performs. As well as 
in-bound movements that come from one part of the country to 
the other parts. So for something that lands in Long Beach and 
then goes across the United States for consumption in 
Philadelphia. We are going to take a look to see how it moves 
in those environments. So it will be those test environments we 
are going to look at. And we are going to take a look at the 
performance rate. And one of the things that we need to make 
sure is these devices do perform. And we need to be concerned 
about all the things we have remained concerned about for 4 
years. And that is, how well do they perform under operational 
real-life circumstances? A lot of vendors do come in and show 
the devices certainly to us on a regular occurring basis. And 
when we actually take them out and see how rugged they are in a 
performing operational environment, we find there are many 
flaws.
    Mr. Rogers. You have had plenty of time. I mean it has been 
5 years since 9/11. Longer than World War II. When we started 
World War II, we had no tanks, no planes, no guns, no nothing. 
We were drilling our privates with pieces of wood. Within 4 
years, the war only lasted 4 years, within 4 years, we had 
built 6,500 Naval vessels; 297,000 airplanes; 86,000 tanks; 
64,000 landing craft; 3 and a half million Jeeps; 53 million 
net weight tons of cargo vessels; 12 million rifles, blah, 
blah, blah; 47 million tons of artillery shells; and on and on 
and on. Why can we not build in 5 years a little gizmo that 
tells you whether or not a container box has been tampered 
with? That is not rocket science.
    Mr. Ahern. No, you are absolutely right; it is not rocket 
science. And some of the bolt seals that are currently on about 
90 percent of the containers will show as far as whether a 
container has actually been tampered with. One of the points 
that is also very critical is making sure that we put a 
container security device or a conveyance security device on 
something we have confidence of what went into that box. 
Otherwise we would be potentially securing something that----
    Mr. Rogers. When will we get a device?
    Mr. Ahern. We will be looking to do field testing in about 
4 months after we have done the technical evaluation and the 
performance testing in the laboratory environment.
    Mr. Rogers. Well, I will be seeing you.
    Mr. Ahern. Look forward to it, sir.
    Mr. Price. Ms. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.

                     SECURING THE CITIES INITIATIVE

    And following up on Mr. Oxford's comments about the 
Securing the Cities Initiative, and I apologize, we all have 
hearings, but this is a particularly important one. I would 
have liked to hear from you earlier. Out of all the risks we 
face, the detonation of a nuclear weapon in Manhattan might be 
the most catastrophic scenario. One program dedicated to 
preventing this is the Securing the Cities Initiative. And this 
is an excellent partnership between DHS and the Tri-State 
region to detect and interdict illicit radiological and nuclear 
materials before they reach New York City. New York Police 
Department Deputy Commissioner Falkenrath has even called it 
the most important DHS program to the region. In fiscal year 
2008, STC was funded at $40 million. The President's fiscal 
year 2009 request proposes $30 million for the program. This is 
one area where I strongly believe we must provide additional 
funds. I have been told that in addition to more detection 
devices, a $40 million funding level, $10 million above the 
President's request, could be used to help conduct a full 
exercise spanning detection, interdiction, and rendering safe, 
as well as to further networking capability to centrally link 
assets in the field.
    Director Oxford, what is the justification for the $30 
million request when the end user, public safety agencies in 
New York, strongly support $40 million?
    Mr. Oxford. Well, thank you. And Police Commissioner 
Falkenrath and I--or Deputy Commissioner--have known each other 
for a long time, so we have a mutual working relationship, and 
clearly any city would like as much as they could get. We think 
this has been a prudent request to build upon what we started 
with. The idea of a full-scale exercise that Mr. Falkenrath has 
proposed is rather new on the stage at this point in time. It 
will take a lot of coordination beyond DHS as well as the New 
York Police Department; it will take the FBI and the Department 
of Energy resources. We are not sure that is actually going to 
be able to be conducted within the time period we are talking 
about because of that coordination; especially the render safe 
activities that you mentioned typically will take the Bureau 
and DOE years to plan. So, again, I am not as comfortable that 
that actually can be done within the time period available. So 
we think the rest of the equipment that is being provided 
through the 2008 and 2009 program to equip that region is a 
necessary first start. We also believe that in working with 
this committee and others that the Securing the Cities model 
needs to be evaluated for its long-term effectiveness. There 
are billions of dollars available through the grant process, as 
you know, that should be part of the building block upon which 
this program could then build long term. We have committed to 
this committee to do an evaluation of the business model for 
Securing the Cities to see whether it is a program we want to 
extend into the future and how much then it would cost to do 
additional cities beyond just New York City. So there is an 
evaluation that will take place over the next 8 or 9 months. 
And we will have a better sense of what the long-term prospects 
are and what the future requests should be.
    Mrs. Lowey. I wonder if you could disclose what DNDO 
originally requested for STC when you submitted your budget 
proposal to OMB.
    Mr. Oxford. I submit a budget request to the Secretary, who 
then makes a determination. But it was the original $40 
million.
    Mrs. Lowey. Well, I thank you very much. And it seems to me 
from the conversations that I have had, this is an absolutely 
critical program. And given the threats that are apparent, it 
is hard for me to believe, I did not even know that number was 
800. You said 800 threats were actually identified?

                       SECURING THE CITIES--CON'T

    Mr. Oxford. We have had 800 cases of nuclear smuggling 
attempts worldwide. Again, in many cases, they were scam, where 
people were just trying to sell material, giving the illusion 
that it was radioactive. But what we see is a growing commodity 
in nuclear and radiological kinds of materials. I will tell you 
that we had a lot of discussion on the first panel on dirty 
bomb threats. My personal opinion is that is not something that 
we would introduce through our container security. There are 
too many domestic sources of that. I worry more about securing 
our radiological materials and sources within the U.S. as a 
necessary first step to reduce the dirty bomb threat rather 
than importing it, where our detectors are pretty effective 
against radiological materials compared to some of the other 
special nuclear materials.
    Mrs. Lowey. It is certainly good to hear some good news, 
Mr. Rogers, about some detectors that are really working. Thank 
you very much. And I look forward to following the progress in 
this area.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you, Ms. Lowey.

                            Closing Remarks

    We are going to have to bring this hearing to a close, I 
think with some frustration, because we were interrupted, and 
our time is limited. As I did with the last panel, I want to 
mention that I will be submitting a number of questions for the 
record.
    But one in particular, Mr. Oxford, which I had hoped to 
take up with you, has to do with the advanced spectroscopic 
portal monitors, the ASP monitors. There has been a review of 
the program conducted by the Homeland Security Institute. It 
says that you need to devise a better process to test and 
evaluate how effective these machines are. We will want an 
update on what you are doing to respond to that. And in terms 
of the budget for next year, we note that secretarial 
certification of ASPs is now--their effectiveness is now 
tentatively scheduled for late in this fiscal year. We want to 
know how much of your $158 million system acquisition request 
is tied to this, how much of it will depend on that 
certification. But rather than ask you for oral responses in 
this setting, we will look forward to your response for the 
record. With regard to the workforce issues that we were 
talking about earlier, Mr. Ahern, we were concentrating on the 
challenge of these foreign operations. I just want to ask you 
quickly about your workforce situation more generally. We know 
that you have some serious needs. In fact, your 2009 request is 
going to add 234 CBP officers at land points of entry and 238 
CBP officers to operate the radiation portal monitors. We will 
be looking as a committee at that request and at the kind of 
needs as we assess them. In the meantime, there is one thing I 
want to ask you about. The law enforcement officer status for 
your CBP officers is kicking in on July 1. As you know, the 
budget request looks to repeal that or to rescind it. And I 
will speak for myself again, I am certainly not inclined to do 
that and in fact inclined to carry it forward. But all I want 
to ask you really is to say whether you think in terms of your 
personnel needs and your ability to attract and retain key 
personnel whether you think this LEO measure is going to be 
helpful to you.
    Mr. Ahern. Absolutely. In my 32 years, this is one of the 
most critical things facing our workforce that needs to be 
followed through on, and we look forward to implementing it on 
July the 6th.
    Mr. Price. Well, I could not ask for a more powerful answer 
or shorter one for that matter. So I appreciate your response.
    Mr. Rogers, do you have anything further?
    Mr. Rogers. No, Mr. Chairman, except to say thank you to 
these two gentlemen. They have got one of the toughest chores I 
think in the whole department, whole country. And with the most 
consequence to the country. So we want to thank you for your 
service, your dedication and your determination to make things 
not happen.
    Mr. Price. I certainly share in those sentiments. We 
appreciate your being here today, and we look forward to 
working with you as we put our bill together for next year. The 
subcommittee is adjourned.
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                                          Wednesday, March 5, 2008.

   COAST GUARD 2009 BUDGET IMPACT ON MARITIME SAFETY, SECURITY, AND 
                        ENVIRONMENTAL PROTECTION

                               WITNESSES

ADMIRAL THAD W. ALLEN, COMMANDANT, DEPARTMENT OF HOMELAND SECURITY, 
    U.S. COAST GUARD
JOHN P. HUTTON, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT, 
    GOVERNMENT ACCOUNTABILITY OFFICE
STEPHEN L. CALDWELL, DIRECTOR, HOMELAND SECURITY AND JUSTICE, 
    GOVERNMENT ACCOUNTABILITY OFFICE
    Mr. Price. The subcommittee will come to order. Good 
morning, everyone. We are happy this morning to welcome the 
Commandant of the Coast Guard, Admiral Thad Allen, to testify 
on the Coast Guard's 2009 budget request and its impact on the 
Coast Guard's maritime, safety, security, and environmental 
protection missions. We are also happy to have John Hutton, the 
Director of Acquisition and Sourcing Management of the 
Government Accountability Office, and with him Stephen 
Caldwell, the Director of Homeland Security and Justice Issues 
at GAO. We welcome all of you and we appreciate your 
willingness to testify and help us as we look toward putting 
together our fiscal year 2009 bill.
    Admiral, I want to start out by thanking you for your 
service to this country and the efforts you make everyday to 
support the men and women in the Coast Guard. Your leadership 
has made great positive difference to this organization. I 
think this subcommittee is well aware of that. We are also 
aware, as you are, of the main challenges the Coast Guard 
continues to face. We want to explore today your game plan for 
taking on those challenges.

                    Chairman Price Opening Statement

    In the 2008 Appropriations Act, this committee was able to 
increase funding for the Coast Guard by 65 million dollars 
above the President's request, mainly for critical port 
security, environmental protection, and maritime safety 
activities. I am pleased to see that the 2009 budget request 
before us would continue to fund those critical activities. But 
lack of funding has not been the main problem facing the Coast 
Guard and more funding alone will not necessarily lead to good 
outcomes.
    The true and critical challenges confronting the Coast 
Guard are deeper and harder to fix and I should add that many 
of them are not unique to the Coast Guard. They include 
financial management inertia, contract management challenges, 
the overall age and disrepair of the Coast Guard fleet of 
cutters, a shortage in Coast Guard pilots, and the culture of 
the Coast Guard Academy that has placed a stigma on reporting 
sexual harassment. Your efforts at reorganization have been 
aimed at many of these challenges. It is also necessary beyond 
reorganization to find, place, and support good managers in key 
leadership positions and to hold them accountable for achieving 
specific goals within specific time frames.
    This subcommittee sees the repercussions for many of these 
problems in budget requests that grow beyond original 
projections and delays sometimes in producing required 
documents and plans. For example, the 2008 appropriations law 
required the Coast Guard to submit with the 2009 budget a 
Deepwater expenditure and implementation plan that includes a 
status report on the cost and performance of legacy assets. We 
did not receive either of these plans with the budget on 
February 2nd and then I am told will not receive them until the 
middle of this month. Reports like these should be part of the 
Coast Guard's standard operating procedures. They should be 
management tools, not just something that needs to be created 
for the appropriations committee. And as my colleague Mr. Roger 
said last year, the subcommittee will hold the Coast Guard 
accountable for planning its work and working its plan. That 
continues to capture in a nutshell what this subcommittee 
requires from the Coast Guard.
    We, also, continue to worry, as I am sure you do, about the 
experience level of Coast Guard staff. I know your own report 
on the oil spill in San Francisco concluded that more 
experienced Coast Guard pollution investigators were not 
reachable and that this resulted in ``questionable decisions.'' 
I know that your reorganization of the acquisition director 
last year was designed to bring more acquisition experience to 
bear on the problems faced in the Deepwater procurement. I, 
also, know that you have talked about the need for a larger 
Coast Guard, although your 2009 budget does not apparently call 
for that. I want to probe this morning about why it does not 
and about what this subcommittee should be doing to assess that 
need.
    I want to give full credit, Admiral, for the fine work that 
you and the Coast Guard have done in all of your locations 
throughout our country. Last year, we met with Coast Guard 
cutter personnel and learned of the work they performed to 
patch up cutters and make them operable. We met with the Coast 
Guard Maritime, Safety, and Security team and heard about their 
training. And I saw the good work that is going on in the 
rescue swimmer training facility in northeastern North Carolina 
under difficult conditions, work that will be significantly 
easier when a new training facility is completed. I know your 
budget anticipates getting that facility refurbished to where 
it needs to be.
    But the Coast Guard men and women, who work so hard for our 
country everyday, need to know that there is a way forward that 
will be successful. They need to know that those of us in 
positions to change things are doing all we can to ensure they 
are trained properly. They need to know that new equipment that 
works will be delivered to them when they need it. And they 
need to know that good managers and good employees can succeed. 
I know that is your goal. It is our goal, too.
    I hope that we will have time to get in to most, if not 
all, of these topics at this hearing today. Other questions, of 
course, will be submitted to the record. All of these matters 
deserve our time and attention. Before I ask you to be our lead 
witness, Admiral, followed by Mr. Hutton, I would like to ask 
Mr. Rogers for any statement he cares to make.

                Ranking Member Rogers Opening Statement

    Mr. Rogers. Thank you, Mr. Chairman, and welcome to Admiral 
Allen and other guests. Admiral, in your appearance before this 
subcommittee a little over a year ago, I pointed out the widely 
held view that you are among America's best leaders. I still 
believe that today.
    The challenges surrounding acquisition management continue 
to this day and I know you are not only diligently working on 
fixing the problems at hand, but also leading the way forward 
so that Deepwater is back on track and stays there. Ultimately, 
however, your leadership will be judged not so much by us, but 
the cadets and recruits, who are depending on you for a modern, 
well-equipped Coast Guard. So when I heard you say in a recent 
speech that the service is at an ``inflection point,'' in its 
history, I could not have agreed more. What we need to know 
today is how your overhauled acquisition process will result in 
equipment working as advertised.
    Fortunately, with the new acquisition organization you have 
established, the questions are now more to the point. How is 
the Coast Guard applying the 2008 appropriations and oversight 
requirements and how does the 2009 budget request move the 
Coast Guard forward past what you call that ``inflection 
point'' and on a sustained path of continued measurable 
progress? These are two essential questions.
    The Coast Guard is the premier response agency in our 
government and an unquestionably vital contributor to our 
national security. From the Persian Gulf, to the Bearing 
Strait, to the Gulf of Mexico, and the Caribbean, the Coast 
Guard continues to take on all threats and all hazards. In 
fact, in 2007, the Coast Guard delivered unprecedented service 
to the American public. A couple of facts: you responded to 
over 27,000 search and rescue cases, saved over 5,000 lives, 
and in so doing surpassed the one million lives saved since the 
service's inception in 1790. You have seized more than 367,000 
pounds of illegal drugs, including a 33,000 pound cocaine 
seizure from a Panamanian vessel, the largest cocaine seizure 
in the Coast Guard's history. You have supported the global war 
on terror through operation in Iraqi Freedom, an operation 
enduring freedom with over 800 active and reserve personnel 
deployed around the world. And you have interdicted over 6,000 
migrants attempting to gain illegal entry into the U.S.
    These statistics, while impressive, highlight something we 
have known for years. The Coast Guard is a proud agency. It 
lives up to its motto of being always ready. But with the 
combination of a rapidly aging fleet and a dynamic set of 
mission requirements, the clock is ticking in the Coast Guard's 
ability to deliver these kinds of results in the future.
    The Coast Guard faces two challenges. First, the total size 
of the Coast Guard's workforce has changed little in the last 
50 years and, second, the Coast Guard must modernize its 
internal budget processes, as it strives to tie funding to 
results or dollars meet your goals. On the acquisitions front, 
billions of dollars on the line and as we all learned last 
year, you did not have your house in order last year. So, on 
top of the problems and delays of Deepwater, there is an 
overstretched workforce. This is a workforce addressing 
environmental issues, navigation, homeland security, 
immigration, and drug interdiction, missions where having the 
right equipment are absolutely essential.
    You know the stakes. You know our expectations. As you 
reach the midpoint of your tour, Commandant, we would like to 
hear your thoughts on how the Coast Guard will go beyond that 
inflection point you spoke of and meet our nation's homeland 
security and other needs now and in the years ahead.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you, very much. Admiral, please proceed. 
We would appreciate your giving us a five- or six-minute 
summary of your statement and we will gladly submit the balance 
for the record. That way, we will have maximum time for our 
exchanges with the committee members.

                    Admiral Allen Opening Statement

    Admiral Allen. Thank you, Mr. Chairman, I will do just 
that. First of all, let me thank you and Mr. Rogers for your 
opening statements and let me tell you both, first of all, I 
accept your thanks on behalf of the men and women of the Coast 
Guard that do a great job everyday out there. But, I, also, 
will tell you that I agree with your challenges. I think we are 
in alignment on the challenges that confront the Coast Guard 
these days and I look forward to the conversation today. I 
think it is the next step around an inflection point. I would 
be glad to talk about that, sir.
    One year ago, I sat here and opened with a brief on the 
direction I wanted to take the Coast Guard. You articulated 
that yourself, sir. I followed the more detailed description of 
the Deepwater program. And despite the challenges that 
Deepwater has and will have in the future, I am proud to say 
that we have taken action to get the program back on track. We 
are moving ahead smartly. I gave a speech the other day, I said 
that we are not out of the woods, but we are certainly chopping 
down trees. And I am pleased with where we are at today.

                    PERFORMANCE OF DEEPWATER ASSETS

    Deepwater assets are taken to the sea and the sky for 
development and evaluation and they are performing admirably at 
every turn. The flagship national security cutter Bertolf began 
sea trials in December and is on track for summer delivery. 
Just two weeks ago, one of our new HC144AOC aircraft diverted 
from training unexpectedly to complete the aircraft's first 
search and rescue case. Its on scene capabilities exceeded 
expectations, particularly with command and control. I am 
talking about the case where the two F15s collided south of 
Tyndall Air Force Base in the Gulf of Mexico. We were able to 
vector a ship and to rescue one of the downed pilots using the 
AIS system that is on the ship and at any particular time 
between seven and ten aircraft were being coordinated through 
the on scene aircraft command and control capabilities. And 
although we still face challenges with Deepwater, we are 
solving problems and remain committed to transparency and we 
are steaming ahead. As I said before, sir, and as you have 
said, I am responsible and I am on task.

                      CHALLENGES FACING USCG TODAY

    I would like to shift gears and provide some context for 
our fiscal year 2009 request. If you can indulge me as I share 
some personal thoughts on the prescient challenges facing the 
service today. As I said last month in my second state of the 
Coast Guard speech, the spectrum of threats, hazards, 
challenges we face continues to grow on all fronts and 
increases our demand for services. Trust for our maritime 
safety, security, and prosperity at home and on the high seas 
are real and dynamic. Of the demands we face for rapidly 
growing global marine transportation system, spanning coastal 
development, changing conditions in the Arctic strain our 
current capacity and challenge conventional notions of mission 
responsibilities. We are also facing specters of transnational 
terrorism, increased sophistication, and human smuggling and 
drug trafficking, and expeditionary demands to support the 
global war on terror in a time of persistent conflict. 
Internally, we face present challenges that transcend all 
missions and threaten our ability to meet our national 
responsibilities.
    Our first and foremost challenge is that we have a bona 
fide capacity shortage. We have authorities, the capabilities, 
and competencies for all missions. But, there is a limit to 
what any organization can accomplish when overall in-strength 
has not materially changed in 50 years, despite steadily 
increasing statutory responsibilities and external demands. The 
President's fiscal year 2009 request for the Coast Guard helps 
build new capacity in critical areas. Most notably, it adds 276 
new marine inspectors and over 100 new multi-mission watch 
standards for our busiest sector command centers. Make no 
mistake, however, these are down payments in critical areas 
that demand a broader discussion of capacity.
    Secondly, we are hamstrung by the burdens associated with 
operating and maintaining an aging and rapidly deteriorating 
inventory of cutters, aircraft, and shore facilities. We 
operate the 37th oldest of 39 similar naval fleets around the 
world. Our oldest cutter, the ACUSHNET, earned battle starts in 
World War II and is beginning her 64th year of commissioned 
service to the nation. Several weeks ago, one of her two 
propellers broke off during routine operations in the North 
Pacific and she is now out of service, standing by for major 
repairs.
    The average age of our 378-foot high endurance cutters, the 
flagships of our fleet, stands nearly 40 years and their age is 
showing. Earlier this year, the high endurance cutter RUSH had 
to abort its search and rescue mission south of the Aleutian 
Islands, due to a split seam in the forward hull that caused 
her to take on water. Moreover, the medium endurance cutter, 
ALEX HALEY had a failure on board, its drinking water system, 
creating a hazardous condition for the health and the safety of 
the crew. Engine fuel literally mixed with the cutter's 
drinking water drove the problem between the tanks. Initially, 
the high-endurance cutter Dallas aborted a drug interdiction 
mission last month due to a failure of a flight deck lighting 
system, just as she was preparing to launch our first Deepwater 
armed H65 helicopter in pursuit of a suspected drug smuggler. 
In the words of a command officer, ``it appears the inopportune 
failure of another piece of obsolete equipment lost the day.''
    Be assured, our failing assets increased operating costs, 
reduced readiness, and adversely impact our workforce and 
capabilities. We face similar challenges sustaining our aging 
shore infrastructure, inland buoy tender fleet, and polarized 
breakers, all of which are old and growing ever more obsolete.
    Additionally, our maintenance costs are rapidly escalating. 
During the past year, we spent over $76 million on 
unanticipated repairs to cutters and aircraft. Today, we carry 
an estimated maintenance backlog of nearly $750 million. We are 
replacing aging assets and repairing shore infrastructures 
fast, as resources will permit. That is not fast enough.

                  CHALLENGES FACING USCG TODAY--CONT'D

    In the near term, maintenance costs will continue to rise 
and we will struggle to maintain readiness. Our 
recapitalization needs have multi-mission impacts. They are 
urgent and they are real. I need every dollar in the fiscal 
year 2009 request.
    Finally, our cutter armed forces are challenged or 
compounded by an environment of fiscal constraint and 
unprecedented scrutiny of a preparation of financial statements 
that has threatened policy development and mission execution. 
Our budget request maximizes efficiencies and reflects the 
realities of very difficult top-line choices. It balances many 
important priorities, including continual recapitalization 
efforts, annualization of the fiscal year 2008 emergency 
funding, and starting new initiatives to make the homeland 
safer and more secure. We are identifying 68 million dollars in 
management efficiencies to help fund these priorities and I 
will be glad to discuss that line.
    I remain committed to modernizing our organizational 
structure to focus on mission execution, improving command and 
control, life cycle support, fiscal accountability, and base 
management. However, management efficiencies, while workable in 
near term, are inconsistent, the long-term need is to grow 
capacity and accelerate recapitalization. Meeting the 
requirements for a clean audit opinion is a difficult and time-
consuming process, especially for a multi-mission, capital-
asset intensive armed force. Over the past three years, we have 
reallocated millions of dollars in base funding to remediate 
internal controls and we have a solid way forward here. 
Inspector General Skinner's assertion about our lack of 
progress are unfortunate and are inaccurate. This aside, we are 
the only armed force facing comprehensive financial statement 
audits. DOD's requirement has been waived. This reality should 
be recognized and included in any discussion or testimony 
pertaining to Coast Guard compliance with the CFO Act. Let me 
be clear, it will take more resources to make additional 
progress. I am faced with the continuing question as to whether 
to allocate scarce resources to better mission capabilities or 
accounting capabilities.
    In closing, I was surprised last week to learn of a 
dramatic trend in the forfeiture of leave among my active duty 
Coast Guard workforce. As background, any leave balances beyond 
60 days are generally forfeited at the beginning of each fiscal 
year. In fiscal year 2003, the Coast Guard workforce lost some 
10,000 days total leave due to the standard policy. The trend 
has increased in each subsequent year, culminating with more 
than 70,000 lost days in fiscal year 2007. This profound 
increase troubles me. I believe growth and demands for our 
services and the maintenance needs for our aging vessels, 
aircraft, and shore infrastructure are taking a toll on the 
workforce. Lost leave and other challenges I discussed this 
morning form the basis of what I call a cause for action or a 
response to the inflection point, as Mr. Rogers indicated. That 
is a call to create a Coast Guard that is appropriately sized, 
structured, and adaptable to meet modern 21st century Coast 
Guard mission demands.
    The President's fiscal year 2009 request seeks important 
new resources to begin this journey and I urge your full 
support. Our people are courageous, dedicated, and resilient. 
They defend our nation and our values everyday. They are 
confronting historical national challenges protecting against a 
radical enemy and ensuring a safe and efficient commerce with 
an increasingly sophisticated air time transportation system. 
Their opportunity is now and they are facing the greatest 
challenges of any Coast Guard generation in history. The 
workforce today is also the most dedicated and talented in our 
history. I am entering the second half of my tenure as 
Commandant and I owe them my personal commitment to train, 
equip, and organize the service for success.
    The Coast Guardian ethos and ideology are the soul of our 
success on the front lines of harrowing rescues, marine safety, 
law enforcement, and other operations. I ask for your support 
to ensure my men and women have the resources they need to do 
their jobs. I would be happy to answer any questions.
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    Mr. Price. Thank you, Admiral. Mr. Hutton, we will ask you 
to proceed in the same fashion and then we will turn to 
questions.

                             GAO STATEMENT

    Mr. Hutton. Thank you, sir. Mr. Chairman, members of the 
subcommittee, thank you for inviting GAO to discuss our ongoing 
work on the Coast Guard's Deepwater program, as well as its 
numerous homeland security missions. And accompanying me today 
is Stephen Caldwell, the Director on GAO's Homeland Security 
and Justice team and he is responsible for GAO's work on 
Deepwater operational issues, as well as the Coast Guard's 
broader missions, and I am from the side of the house that 
deals more with the acquisition issue. Our testimony today is 
based in part on our ongoing work for this committee. First, I 
will discuss Coast Guard initiatives aimed at improving its 
acquisition process, oversight structure, program management 
information, and acquisition workforce and second, I will 
highlight Coast Guard challenges in carrying out its various 
missions.
    As you know, GAO has been reviewing the planning and 
execution of the Deepwater program since the late 1990s and 
over the years, we have informed Congress and others of the 
problems and uncertainties related to this large acquisition. 
Since we testified last year, the Coast Guard has been 
undergoing a fundamental shift in the way it approaches its 
management of the program and has taken several steps and I 
would like to highlight some of those right now.
    The Coast Guard is consolidating its acquisition 
responsibilities into a single directorate with the goal of 
leveraging available knowledge and resources across all the 
programs. The Coast Guard is moving away from the systems 
integrator contract and the systems to systems model to a more 
traditional acquisition strategy, where it will manage the 
acquisition of assets separately. The Coast Guard recently 
demonstrated this new approach by holding its own competition 
for a fast response cutter in lieu of obtaining the asset 
through the systems integrator. Coinciding with this shift, the 
Coast Guard has decided to follow processes outlined in its 
major system acquisition manual, which include acquisition 
milestones, documentation requirements, and cost estimates for 
individual assets. The Coast Guard has taken an increased 
management role in Deepwater, including restructuring their 
integrated product teams to be led by Coast Guard personnel, 
not the contractor, establishing the Coast Guard as a technical 
authority for engineering to among other things review, 
approve, and monitor technical standards, and increasing 
Deepwater project manager's responsibility and accountability 
or acquisition outcomes of individual assets.
    Other planned improvements relate to the use and quality of 
program information. For example, the Coast Guard has developed 
a tool to analyze each asset based on 19 elements, including 
compliance with the acquisition process, progress, and earned 
value management data to assess the risk of assets failing to 
meet their goals. And this information is intended to enable 
senior Coast Guard management officials' review of the project 
status and risks.
    The Coast Guard, also, has initiatives underway aimed at 
developing a workforce with the requisite acquisition and 
program management skills. Back in 2001, we noted that the 
Coast Guard adopted a systems of systems approach with a 
contractor as a systems integrator, because it did not believe 
it had the technical expertise or the resources to be the 
systems integrator. While the Coast Guard has made some 
progress in filling some key positions in its acquisition 
directorate, it still has some vacancies in a range of 
positions, such as contracting, systems engineering, and 
program management.
    Although many of the Coast Guard's initiatives are positive 
and may assist the program in meeting its goals, they are in 
the preliminary stages, some further along than others, with 
many processes and procedures yet to be implemented. 
Maintaining the momentum, discipline, and follow through will 
be important in improving the Deepwater program and we will 
continue to evaluate the Coast Guard's progress in these areas 
as part of our ongoing work with this committee.
    Next, I will highlight Coast Guard challenges in carrying 
out its various missions. The Coast Guard expects the Deepwater 
assets to help with a wide range of missions. After September 
11, Coast Guard cutters, aircraft, boats, and personnel 
normally used for non-homeland security missions, such as 
environmental protection, were shifted toward protecting the 
nation's vast and sprawling network of ports and waterways. For 
several years, we have noted Coast Guard difficulties in fully 
funding and executing both the homeland and non-homeland 
security missions. Although past work has found that the Coast 
Guard is restoring activity levels for many of its non-homeland 
security missions, it continues to face challenges in balancing 
the resources between the two missions.
    Our recent and completed work has shown that Coast Guard 
requirements continue to increase in such homeland security 
areas as providing vessel escorts and conducting other security 
activities at some ports. In several cases, the Coast Guard has 
not been able to keep up with these security demands. Some of 
the Coast Guard's non-homeland security missions are facing the 
same challenges with regard to increased mission requirements. 
For example, the Coast Guard has additional requirements to 
revise area maritime security plans to cover natural disasters, 
to revise the oil spill regulations to better protect the oil 
spill liability trust fund from risks related to certain under-
insured vessels, to conduct patrols and enforce regulations in 
new protected areas, and to increase polar operations 
commensurate with increased resource exploitation vessel 
traffic in the Arctic.
    Mr. Chairman, this concludes our statement. We plan to 
issue reports later this month on the Coast Guard's homeland 
security missions and we plan to provide a more complete 
analysis of the Deepwater issues raised in the statement and 
report later this year for the committee. And we will be happy 
to answer any questions.
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                          FINANCIAL MANAGEMENT

    Mr. Price. Thank you, Mr. Hutton. We thank you and Mr. 
Caldwell for your good work and we are pleased to have you at 
hand today, along with the Admiral. Admiral, let me take on 
this issue of financial management, which is referenced 
prominently in your testimony. As you know, the Department's 
Inspector General has told us that the Coast Guard, and I am 
quoting here, ``has shown no discernible progress in its 
ability to produce reliable financial statements or correct the 
material weaknesses since the inception of the department in 
2003.'' The IG, also, said, ``the Coast Guard has no corrective 
action plan with milestones and that absent such a plan, the 
organization is unlikely to remediate any of its material 
weaknesses this year.'' In fact, the IG said that the Coast 
Guard will not be in a position to offer reliable financial 
statements until 2011 at the earliest.
    Now, and what I must say is a rare defensive note for you. 
You say in your statement and you repeated it orally here today 
that you disagree vehemently with the IG. In fact, I think you 
said that his comments were unfortunate and inaccurate. So, I 
want to explore that and I want to ask the question in a 
somewhat complicated way, because I want to bring up some 
themes that might be relevant to the answer and to the 
organization's plan going forward. Let me quote from you first. 
You say, ``the Coast Guard is making significant strides 
identifying and tackling the root causes of its financial 
management weaknesses.'' We did go back to the IG on this and 
he stands by his characterization of no significant progress. 
We have also gone to the department, the Chief Financial 
Officer, who essentially agrees with the IG. But, I do not want 
to debate the details of this.
    What I do believe is called for, particularly since you 
have made the claims that you have made, is that you provide a 
commitment to this committee and to the IG within, let us say, 
a month's time to have a corrective action plan with milestones 
in place that we all can hang our hat on and we can know that 
this is, in fact, the plan that the agency, the organization 
will follow going forward. With this plan, I would suggest a 
commitment to correcting problems this year and having a 
process to spot and correct problems going forward. If that 
commitment really is not feasible, then I think the question 
does arise, should the Coast Guard move immediately from its 
current financial system to the department's new system? That 
is the question that is going to arise.
    In a hearing a few weeks ago, GAO suggested that the Coast 
Guard financial management leadership needs more stability. So, 
that issue also arises here, I think. In fact, only three 
senior financial executives are civilian, I believe. The rest 
are military. They rotate every two years. Is that part of the 
problem? Should you offer the financial management leadership 
to include more civilians or create a financial management 
track for military leaders? Should the Coast Guard CFO be a 
civilian? Is the Coast Guard disabled in this function by the 
way the military works and the rotation system?
    So, those are questions, I think, that naturally arise, but 
I think what we are mainly looking for is some assurance that 
this in, in fact, whatever the debate may be about the current 
state of affairs, some assurance going forward that these 
challenges are going to be met and they are going to be met 
with a plan that has a time frame and milestones that can offer 
some assurance all around that these problems are being 
addressed.
    Admiral Allen. Sir, that was a whole hearing's worth of 
questions there. Let me hit a couple of the high points and I 
would be glad to give you a report within 30 days, sir. No 
problem with that.
    The structural issues with Coast Guard financial systems 
are longstanding and actually relate to the structure of the 
service and how we evolved over time. In 1915, we put the 
revenue cutter service, slice saving service together. This 
included isolated stations on the Outer Banks, cutters that 
were deployed to Alaska, all of which had to have the ability 
to acquire and execute funds at the lowest level. We have a 
structure we brought forward into the 21st century that is 
based on decentralized execution of funds. Because of that and 
some other structural issues, this is a much harder issue to 
deal with than it would be for some agencies and it has to do 
with where procurement levels lie and where reconciliations are 
done and where people actually make transactions that have to 
be audible with data to support that.
    When I became Commandant almost two years ago, I issued 10 
action orders. One of those was to get involved in financial 
transformation and we are doing that. We have put hundreds of 
people on this and we have spent millions of dollars on this. 
You do not do that in the area that I live in with boats sort 
of falling apart and having to make those tough decisions to 
allocate those costs unless you are serious about it and I am 
serious about it. I have been involved with the financial 
issues associated with the Coast Guard since I was Chief of 
Staff and some of these actually started in DOT when they were 
doing a transformation and we were doing a transformation at 
the same time that we moved into the Department of Homeland 
Security. It is a very large complex problem and it is hard to 
deconstruct.
    A couple of other issues we are dealing with, a large 
portion of the Coast Guard's finances have to do with pay and 
compensation for personnel. We are linked to the miliary pay 
system right now, which is going to be overhauled and changed 
in 2010. So, there are portions of the Coast Guard's structure 
of accounting that are not going to be able to be reformed and 
aligned until certain dates. And what I need to do is give you 
a detailed report where there are structural impediments for us 
moving together. What we really need is a unified general 
ledger, we need to reconcile our funds balance with Treasury, 
and we need to have entity level controls to start to meet the 
goals that are laid out by the auditors that have been passed 
to us.
    There is also a tension on a yearly basis of how much 
effort we put into the yearly audit that is ongoing and how 
much effort we put into the mitigation and the changing of the 
structural things, whether it is IT or actually writing code 
for entity level controls for people that are making 
transactions. So, we have to split our resources between 
answering the questions for the current year audit, which we 
are passing every year, and there is a questionable return on 
investment for the personnel and money we are applying to that 
and whether or not you should be fixing long-term problems. 
But, I would be happy to give you an in-depth answer for the 
record to lay out all the pieces to this, sir.

                       FINANCIAL MANAGEMENT STAFF

    Mr. Price. What about the question of the rotation of these 
officers and the possible debilitating that has on your ability 
to have a system in place that is--where the institutional 
memory is there and where the kind of stability you need is 
there?
    Admiral Allen. First of all, I would tell you, back in the 
late 1980s, early 1990s, we pretty much did away with financial 
management as a career path for senior Coast Guard officers. We 
converted head contracting, head financial positions to 
civilians, captains to 15s and so forth. Over the years, that 
element of our workforce, much like the procurement and 
acquisition and management side, has probably been shrunk and 
deskilled and that needs to be rebuilt. That is part of the 
plan we need to do. I do not believe the rotation of military 
personnel is having the impact that it is perceived to be, both 
in the department and the IG, because many of these people come 
back for second and third tours. I, myself, have probably 12 to 
14 years in budget and financial management and our turnover is 
no greater, in fact, it is sometimes more stable than the 
people we deal with, and there have been three CFOs at the 
Department of Homeland Security since we have been in it.

                       FINANCIAL MANAGEMENT PLAN

    Mr. Price. Well, let me clarify. I do not want to get hung 
up on semantics here, but we are aware that you have applied 
yourself to this and we are aware that you have some basis for 
differing with the IG and the CFO's characterization. I think 
what we are looking for is not necessarily a report that 
basically answers those charges or justifies past actions. I 
think we are looking for a plan. I think we are looking for the 
kind of reassurance that we need that these matters are being 
addressed, that there is a plan going forward to deal with 
this, and that there are timetables and benchmarks that will 
let us assess progress. So, I do not want to be misunderstood 
on that.
    Admiral Allen. Sir, we have plans and we have extensive 
breakdown of tasks and we can provide that to you. I think the 
question is whether or not we have got the right rock for them 
and I would be happy to show you what we have, sir.
    Mr. Price. And you are saying you can provide that kind of 
plan, that kind of distillation of your planning, your plan 
going forward within a month?
    Admiral Allen. Yes, sir. We have worked to an extent that 
already exists out there where we have broken this down into 
pieces that have to be attacked and we have that laid out. I 
think the question from the IG and the department is whether or 
not that will deliver the requirements that they perceive that 
are needed. We will be happy to give you the plan and if the 
plan is not satisfactory, we will update the plan. But, we 
are--I am on task to fix it, sir.
    [Clerk's note.--No plan was submitted by the Coast Guard in 
the requested timeframe.]
    Mr. Price. All right. Thank you. Mr. Rogers.
    Mr. Rogers. Well, briefly on that same point, I am told 
that there is about 300 personnel devoted to financial 
management and that about a third of those are military 
personnel subject to transfer. Is that accurate?
    Admiral Allen. If it is not, I will correct it for the 
record, sir. But, we have--it is a mixed workforce, yes, sir.
    Mr. Rogers. But the point I was going to make and I think 
the Chairman also was making, part of what he was saying, is 
that those personnel rotate in and out and you say many of them 
re-up, so to speak. But, nevertheless, a third of that 
workforce devoted to this, many of those do not rotate, do not 
stay on; correct?
    Admiral Allen. Well, you are not assured that you have a 
second tour, yes, that is correct, sir.

                         OPERATION AT SAN JUAN

    Mr. Rogers. Well, from the bookkeeping end of the picture, 
I want to go to operational pretty quickly. In Puerto Rico a 
couple of weeks ago, I was very impressed with Captain Tanstall 
and the operation at San Juan, especially in how they were able 
to coordinate with what the Coast Guard does with Customs and 
Border Patrol, ice agents, DEA, and all the other agencies in 
or out of homeland security. In fact, I think the San Juan 
operation is really a model of how the department needs to--the 
agencies within the department need to cooperate across the 
world. But one of the problems--well, and there is a bunch, one 
of the problems is they are short there in the Carribean. Our 
patrol craft, both water and air and land, what do you think, 
what is going to happen? Are we short there in these respects 
and what do we do about it?
    Admiral Allen. Well, yes, sir. I think we have laid out a 
patrol boat gap and also a maritime aircraft gap that is 
related to the new requirements. That is what we are trying to 
build the Deepwater structure to. So, there are gaps that are 
out there. And some are more acute, because in regional areas, 
you will have surges or particular threats will arise and will 
require you to redeploy forces and we may not be as agile or 
flexible as we need to be. We are achieving great efficiencies, 
as you know, working with our partners down there. But, what we 
really need to do is build out our patrol boat capability, 
because that is the major platform of effectiveness in the 
Straits of Florida and around Puerto Rico. You are down in the 
deeper Carribean, it is larger ships. But, this focuses right 
on the FRCB procurement. We need to move forward as fast as we 
can on that, sir.
    Mr. Rogers. Well, at Mona pass----
    Admiral Allen. Yes, sir.

                     DRUG SMUGGLING TO PUERTO RICO

    Mr. Rogers [continuing]. Mona pass, where smugglers have 
both drugs and people bring their product over to U.S. 
territory, Puerto Rico, from the Dominican Republic, 
increasingly apparently the drug smuggling out of Columbia 
through Venezuela by air, then to Dominican Republic, and then 
by boat or whatever over to the U.S. territory in Puerto Rico 
is a major source of drugs in the country; correct?
    Admiral Allen. Yes, sir.
    Mr. Rogers. Not to mention the smuggled human beings that 
attempt to gain U.S. territory status, either from Cuba or 
elsewhere, use that same passageway and, yet, we have only got 
one plane, which we took a tour on to watch how they patrol the 
Mona Island and Mona pass, severely undermanned, in my opinion.
    Admiral Allen. Yes, sir. Well, we have our helicopters down 
there. I am assuming you are referring to the Customs and 
Border Protection Fixed Wing aircraft that is there?
    Mr. Rogers. Right.

                        DEPLOYMENT OF MPA FLEET

    Admiral Allen. Yes, sir. Based on your conversation with me 
the other day, I actually had a conversation with Ralph Basham 
and relayed your concerns to him, sir. We are looking at a 
combined force to lay down what we need to do. We have the 
potential, as we build out the Deepwater MPA fleet with the new 
HC144A, is to deploy them from Miami down there to assist, as 
well, and those are the things we will consider in the future, 
sir.
    Mr. Rogers. Also, the patrol craft, the water craft.
    Admiral Allen. Yes, sir.
    Mr. Rogers. Dedicated personnel, outdated equipment, and 
you go down in the living quarters of that patrol craft and 
over the years, they have added this radio and that piece of 
equipment and this radar and this, that, and so forth, some as 
recently as a few months ago, effective equipment, but you can 
hardly climb through the boat for the wiring. I mean, you are 
making due with what you have waiting on the new cutters to 
come on board. How can you sustain an effective water patrol 
with outdated cutters and cruisers until we get the new ones?

                            110-FOOT CUTTERS

    Admiral Allen. Well, in particular, the 110-foot cutters 
are going through a mission efficiency program at the Coast 
Guard yard. We are upgrading, doing haul repairs and structural 
repairs and upgrading the ships, that will allow us to extend 
the service life a short while longer while we are waiting for 
the FRC contract. We are conducting three of those cutters a 
year into the yard and we are slowly going through the entire 
fleet of about 20. The ones at the end, which are out in the 
Pacific, we will not upgrade. By the time we have the FRCBs on 
line, they will just be replaced. But, there is a plan to do 
repairs as a bridging strategy while we are waiting for the new 
cutters, sir.
    Mr. Rogers. So, we do not have a cutter gap?
    Admiral Allen. Well, we have a cutter gap, yes, sir, 
because we do not have enough platforms out there. And quite 
frankly, the need to take these out of service and upgrade them 
is actually contributing in the short term to the gap, sir.
    Mr. Rogers. What year do you think we will get past the 
gap?
    Admiral Allen. Well, the current buildup rates will 
probably be around, I would say, 2023, somewhere around there, 
sir. I can answer for the record, we have a chart that shows 
the gaps.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 43032B.207
    
    Mr. Rogers. I think I have that chart.
    Admiral Allen. Yes, sir.

                              UAV PATROLS

    Mr. Rogers. Patrol aircraft, first, I was an advocate for 
unmanned aerial vehicles for the chores that we need to do in 
patrolling like the Mona Straits. But, I have come to change my 
thinking along those lines. I think the eyeballs of an observer 
out there are much more capable of seeing what needs to be seen 
than the focus of a small camera on an underbelly of an 
unmanned aircraft. What is your thinking?
    Admiral Allen. I think you need both, sir, although we are 
reassessing our approach to unmanned aerial vehicles, as we 
speak today here. We looked at vertically launched technology 
for a national security cutter. We have stopped that, because 
our concerns that we were too far ahead on the development and 
technology stage there. I will tell you this, that we have set 
up a joint program office with Customs and Border Protection to 
take a look at a departmental approach to unmanned aerial 
systems. We are on the verge of conducting our first predator 
maritime demonstration project with Customs and Border 
Protection. Wherever we go ahead with unmanned aerial vehicles, 
when it is part of depart or not part of depart, it needs to be 
as part of a joint program within the department that we work 
jointly with Customs, sir.
    Mr. Rogers. And then you have the problem with the FAA, 
because most of these would be flying in areas that is heavy 
with commercial traffic, air traffic.
    Admiral Allen. Yes, sir. Ralph Basham and I met with Buzz 
Mosley, the Chief of Staff of the Air Force, a couple of months 
ago and we are looking to partner with the Air Force, because 
they have infrastructure already in place where they deal with 
the FAA. And as you know, they do extensive control on unmanned 
aerial vehicles and we are looking to partner with them going 
ahead. And, in fact, Secretary Chertoff had sent a letter to 
Secretary Gates, in that regard, as well, sir.
    Mr. Rogers. Well, in many cases, at least, you are relying 
upon CBP for surveillance. In fact, in Puerto Rico, you have no 
dedicated marine patrol aircraft.
    Admiral Allen. That is correct, sir.

                    RELIANCE ON CBP FOR SURVEILLANCE

    Mr. Rogers. And you are relying heavily upon the CBP for 
surveillance. And Captain Tanstall told me when CBP is not 
flying, I cannot see anything. I do not think you want to be 
blind, do you?
    Admiral Allen. Well, he is not completely blind, sir. He 
has helicopters. But, you are right, he has no fixed planes, 
sir. Yes, sir.
    Mr. Rogers. All right.
    Mr. Price. Thank you. Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman. And let me 
apologize for being late, Admiral. We had the Secretary of the 
Treasury, Mr. Paulsen, across the hall in financial services 
and I am trying to get back and put my turn in. But, I want to 
commend you for the work that you have done since we have 
merged the agencies with transportation to homeland security 
and all that has been involved in that. I did do some research 
and want to commend you on celebrating one million lives saved 
that you did last year since 1790, when the agency was 
established. Three-hundred-and-fifty thousand pounds of cocaine 
was seized last year. Thank you moving that off the streets.
    I personally believe that your budget is tight, that you 
are doing with an aged fleet, overworked--you said you lost 
70,000 hours. Does that mean that your workforce is working 
overtime?

                        DAYS OF LEAVE FORFEITED

    Admiral Allen. Days of leave forfeited.
    Ms. Kilpatrick. They forfeit it, because they can only 
carry over 60.
    Admiral Allen. That is correct, ma'am.
    Ms. Kilpatrick. So, as I said, you are working more than 
that and that is unfortunate.
    Admiral Allen. It is very unfortunate.
    Ms. Kilpatrick. We expect you to do a great job, which you 
are doing without the resources that you need, in terms of 
staff, as well as equipment. And I just reserve the right to 
put some of my questions in writing, so that I can move across 
the hall.

                GREAT LAKES MARINE SAFETY SECURITY TEAM

    But the marine safety, which is what your mission is, the 
Great Lakes, we do not have a marine safety security team 
stationed in my district or around the Great Lakes. How do you 
account--is it the shortage of funds or is it something else 
that we need to--I cannot imagine. Most of the work when we 
talk about borders, southern border, and my chairman has been 
really good on that and taken us out there to see that. 
Absolutely, I was amazed when I saw it. The northern borders, I 
am concerned, does not have the protection, the resources, that 
it needs to do a good job, not just with Coast Guard, CPB, and 
the rest of it, the coordinated team. How do you account for 
not having a marine team in the Great Lakes?
    Admiral Allen. Yes, ma'am, I think you are referring to our 
marine safety and security teams. We have 13 of those in the 
Coast Guard. A lot of it has to do with the operating 
environment up there and how we attack the mission. There are a 
lot of ways to do that. We have a very close cooperative 
relationship with the Canadians up there. In fact, in the last 
summer, we had issued something called the Ship Rider program, 
where we have joint patrols with Coast Guard and the Royal 
Canadian Mounted Police. What you are dealing with is not an 
international body of water. You are either in U.S. waters or 
Canadian waters up there. So, our operational model is 
different. That does not mean that marine safety and security 
team could not add value there.
    But, I would tell you, we are somewhat constrained on what 
we do up there operationally. A team like that requires a high 
level of training on the water and right now, we are operating 
under a prohibition of using live fire on the water, exercising 
of our mounted weapons, because of environmental concerns up 
there. So, there are some very unusual constraints up there 
about that and I would be glad to give you a more extensive 
answer for the record, if that is okay.
    [The information follows:]

    The Coast Guard has 12 Maritime Safety and Security Teams (MSSTs) 
located throughout the United States and one Maritime Security Response 
Team (MSRT) located in Chesapeake, Virginia. MSSTs were created to 
close security vulnerabilities in our nation's militarily and 
economically strategic seaports. MSSTs provide complementary, non-
redundant domestic Coast Guard capabilities modeled after the 
expeditionary Port Security Unit (PSU) and Law Enforcement Detachment 
(LEDET) programs. Each MSST possesses specialized skills, capabilities 
and expertise to perform a broad range of port security, harbor defense 
and Antiterrorism/Force Protection (AT/FP) missions. MSSTs are a quick 
response force capable of rapid, nationwide deployment via air, ground 
or sea transportation in response to changing threat conditions and 
evolving Maritime Homeland Security (MHS) mission requirements.
    The Great Lakes region poses many challenges to MSST operations. 
The use of advanced boat tactics and techniques by MSSTs requires year-
round training to maintain the high level of operational readiness 
required by these units. The icing of the Great Lakes during the winter 
months would severely limit proficiency and effectiveness. Moreover, 
from an environmental perspective the region is not suited for live 
fire training, which is critically important to MSSTs.
    MSSTs also have maritime law enforcement requirements for advanced 
interdiction competencies including the ability to board vessels using 
a helicopter delivery method called vertical insertion, or fast roping. 
The vertical insertion capability requires extensive, year-round 
training and flight availability, which would be limited on the Great 
Lakes, particularly during winter months.
    Even though these factors indicate permanently stationing an MSST 
on the Great Lakes is not operationally feasible, MSSTs have and will 
continue to be deployed to the area when the need arises. For example, 
MSSTs have been deployed to the Great Lakes to provide security for the 
Super Bowl, the Major League All-Star Game, and the Detroit Auto Show, 
and will continue to be deployed on a needed basis in the future.

    Ms. Kilpatrick. I would like to visit that with you. We 
have good relationships with the Canadians. I am on the 
Canadian-U.S. inter-parliamentarian group and we talk a lot 
about it and I am thankful that they work with you and our U.S. 
borders to try to work that area of the country. But, yes, I 
would like to work with you further on it.
    Admiral Allen. Thank you, ma'am.
    Ms. Kilpatrick. Thank you, very much, Mr. Chairman.
    Mr. Price. Thank you, Ms. Kilpatrick. Mr. Carter.

                             GROW THE FORCE

    Mr. Carter. Thank you, Mr. Chairman. Let me see if I got 
this picture right, Admiral, and correct me if I am wrong. From 
what I am hearing, we have a fleet of which an awful lot of 
ships are obsolete or they are being patched all the time and 
worked on and added to and new technology added, which crowds 
our Coast Guardsmen and so forth. Then something we started out 
talking about is this force has not grown in 50 years. Is that 
both the civilian and the military side of the force or just 
the military side of the force had not grown? And then, is 
there a plan--I assume that we cannot grow the force, if we do 
not have the adequate ships to put them in, but we are actually 
with our Deepwater project working on these ships. Now, are we 
simultaneously looking for ways to grow the force? Because it 
seems to me, we need to be growing the force of the Coast 
Guard. We need to be adding people to the Coast Guard, because 
of your responsibility to guard this nation. Is there an 
ongoing plan, as the ships come on line, to add Coast Guardsmen 
or are we going to stay at this 50-year old level?
    Admiral Allen. The staffing of the Deepwater cutters is 
covered by staffing plans, as we move forward. I will tell you, 
there are so many people you can put on a ship and I think we 
will staff the assets that we bring on line. When I talk about 
the size of the Coast Guard, it is really related missions that 
we execute through people. This year, we have asked for a 
significant increase in inspectors. In the future, we have new 
towing regulations that are coming into effect, that will 
require us to use more people. We have a vast expansion of 
permit applications for liquified natural gas facilities that 
are going to require more people. We have an expansion of the 
cruise ship trade. We have more foreign vessels culling in this 
country. All of those require services the Coast Guard provides 
in are capacity driven. So, when I talk about the size of the 
Coast Guard, you can almost take your mission area and see what 
is happening to it in the new flection point. Changes in 
technology and the marine transportation system, the opening of 
the Arctic, all of those require--we have the skills and 
competency to do that and we have the mission and authorities. 
It is a capacity issue on how many people you have, sir.
    Mr. Carter. Well, my concern was, as we modernize the Coast 
Guard, and that is basically what we are doing, bringing the 
Coast Guard into the 21st century, and we have problems with 
it, but we are trying to fix those problems and I commend you 
for trying to fix some tough problems, challenges everywhere. I 
want to make sure that we, also, have the adequate number of 
people----
    Admiral Allen. Yes, sir.
    Mr. Carter [continuing]. To get the job done. I thank you 
for your answer. I have to go to another meeting, but I thank 
you for your service and thank all of you for being here. Thank 
you, Mr. Chairman.
    Mr. Price. Thank you. Ms. Lowey.
    Ms. Lowey. Thank you, Mr. Chairman, and thank you, very 
much. It is good to see you and the whole team here today. I 
appreciate it.

                      PROTECTION OF LNG FACILITIES

    A recent GAO report found that the Coast Guard is stretched 
too thin to adequately protect tankers carrying liquefied 
petroleum or crude oil from a possible terrorist attack. This 
particularly concerns me, as there are plans, as you know, to 
open the proposed Broadwater LNG facility in Long Island Sound. 
Admiral, if Broadwater were built, does the Coast Guard have 
the assets needed to secure current and foreseeable 
responsibilities in New York's waters and what additional 
resources would you need to protect the proposed Broadwater or 
the other 20 or so proposed LNG facilities?
    Admiral Allen. The answer is no, we do not have the 
resources. If I could make a comment to follow up. I have had 
several conversations with our authorizing subcommittee 
chairman, Chairman Cummings, on this particular issue, as there 
is an LNG permit being looked for Sparrows Point right now. I 
said this and I am not trying to be facetious here, if the 
requirement that the Coast Guard provide the security resources 
was a condition of operating LNG facilities, I would recommend 
we not approve another permit. What we need to have is a 
national discussion and a national dialogue about how we are 
going to handle dangerous cargos and it moves well beyond LNG. 
There are other liquid hazardous gases, liquid propane gas. We 
move tons of ammonium nitrate on barges in this country. What I 
would like to see is a national discussion about security of 
dangerous cargos in the entire context of what moves in the 
marine transportation system.
    In sectioning out LNG for this discussion, and especially 
looking at potential Coast Guard resources being applied to it, 
you are, in effect, providing a subsidy to that sector against 
their cost of doing business. I think we need to have a very 
reasoned discussion of where we want to go nationally on 
hazardous cargoes.
    Ms. Lowey. Have you taken a position on that?
    Admiral Allen. Well----
    Ms. Lowey. Have you made your voice heard on this issue?
    Admiral Allen. I have said what I just said to you to 
Chairman Cummings on several occasions. I have had the same 
discussion with Senator Mikulski.
    Ms. Lowey. You are not saying what kind of capacity you 
need. You are just saying that there should be a national 
discussion.
    Admiral Allen. Yes. I think sectioning out LNG is going to 
kind of tilt the whole thing. There are many other things out 
there that presents hazards in the maritime environment and I 
think if we look at LNG to the exclusion of everything else, we 
are not balancing the portfolio of risk.
    Ms. Lowey. I think that is particularly interesting and 
important, Mr. Chairman, and I hope to speak with you and 
Chairman Cummings about this to see that we can take your 
advice and have an in-depth discussion about this. I thank you, 
very much.
    Admiral Allen. There are local security forces. There are 
state and local officers. There are contracted security forces. 
The Coast Guard has forces to do this, but if you are looking 
at over 40 LNG permits, which is what we are looking at right 
now, and if you look at what it takes to escort an LNG tanker 
into the facility in Boston right now, which has a number of 
service vessels, aircraft, and it is a combination state, 
local, and Coast Guard to do that, that can be done. Is that 
the best use of our resources? Is that the best way to provide 
security for that industry? And I think that is the discussion 
that needs to be had.
    Ms. Lowey. Do you think it is?
    Admiral Allen. Well, it almost gets to----
    Ms. Lowey. I do not want to put you on the spot.
    Admiral Allen. Well, no, it almost gets to a politically 
economic discussion of how you are going to internalize the 
price of security and the cost of goods and I do not think we 
have that discussion about security in this country to the 
extent we need to. You know, we have even internalized the cost 
of environmental protection. When you buy tires or get your air 
conditioning serviced, you pay for the environmental impact of 
that. I think since the events of 9/11, there has not been an 
adequate national discussion of how you internalize the price 
of security.
    Ms. Lowey. Well, there are two issues though or there are 
more than two. But one is, what is the price of security and 
then who is the best suited to provide that security.
    Admiral Allen. Yes, ma'am, that is the discussion that 
needs to be had.
    Ms. Lowey. So, at this point, you are not saying whether 
the Coast Guard is the most suited to provide this security or 
whether you believe it should be undertaken by----
    Admiral Allen. We have the competency to do it. We do not 
have the capacity to do it. And taking that capacity off of our 
base right now, from a risk management standpoint, is not 
something I would support as a Commandant.
    Ms. Lowey. Thank you, very much.
    Admiral Allen. Yes, ma'am. Thank you for the question.
    Ms. Lowey. Do I have time to ask a second question? I 
probably could have asked it.
    Mr. Price. I am sorry, the gentlelady's time has expired.
    Ms. Lowey. Okay.
    Mr. Price. We will get you on the next round.
    Ms. Lowey. Thank you, sir. And, unfortunately, we all have 
to go in different directions. But, I thank you, very much, and 
thank you, Mr. Chairman. And I certainly hope to pursue this 
important issue.
    Admiral Allen. Yes, ma'am.
    Ms. Lowey. I will submit the other question for the record.
    Mr. Price. Good, thank you.
    Ms. Lowey. Thank you.
    Mr. Price. Mr. Peterson.

                       PROTECTION OF LNG TANKERS

    Mr. Peterson. I was not going to talk about this one quick 
question, tankers of LNG, are they protected coming into our 
port? Now is that a role the federal government is playing?
    Admiral Allen. Yes, sir, in combination with state and 
local. One of the issues is it depends on the port. Jim Loy, 
one of my predecessors, said, ``If you have seen one port, you 
have seen one port.''
    We have some very isolated LNG facilities that are not near 
population centers, where there is very little or sometimes 
security, because none is needed.
    There is one on the Key 9 Peninsula in Alaska, for example. 
But we have others, as in Boston, where you have to go right 
through the Boston Harbor to get to it. So you have a fashion a 
security framework that meets that waterway, and we do those 
assessments as part of the permitting process.
    Mr. Peterson. So I guess with the cost of this, with 
potential terrorist attacks, that is another argument for 
producing our own natural gas, which we have lots of, on the 
OCS. If my colleagues would listen, we would be producing our 
own natural gas, and we would not be buying it from foreign 
unstable nations like we do our oil.
    Admiral Allen. Sir, that is above my pay grade.
    Mr. Peterson. I know that. I just made a statement 
[Laughter.]

                       ARCTIC ENCROACHMENT ISSUES

    Admiral Allen, I want to take a minute to expand upon the 
developing issue of the Arctic, as it relates to the Outer 
Continental Shelf.
    It is my understanding that there may be some developing 
encroachment issues with the areas of the Arctic with Russia. 
Can you address that issue, and what the Coast Guard's mission 
is in regards to protecting our rights on our OCS?
    Admiral Allen. Yes, sir; I was at a speaking engagement a 
while back, and I made this statement. I will re-state it just 
for the committee's benefit.
    I am agnostic on the science associated with climate change 
or anything else. All I know is, there is water where there did 
not use to be, and I am responsible for it.
    So we look at what is going on in the Arctic right now and 
the recession of ice in the summer. If you look at what 
happened with the cruise ship that hit the iceberg and sunk 
down off South America, the implications for a search and 
rescue, environmental response, infrastructure protection, and 
law enforcement, and just general presence and sovereignty 
issues, are huge issues going forward for us.
    I have the step. We are going to be deploying some assets 
up there this next summer to test their capabilities at high 
latitudes.
    So regardless of where we go economically, environmentally, 
or whatever, Coast Guard has missions in water where we did not 
have them before, and we have to be prepared to respond to them 
up there, sir.

                        GOVERNANCE OF THE ARCTIC

    Mr. Peterson. Where did Russia plant their flag? Whose soil 
was that on?
    Admiral Allen. Well, according to open source reporting, I 
think they dropped it at the North Pole, sir.
    Mr. Peterson. Whose land is that?
    Admiral Allen. It is nobody's right now, sir.
    Mr. Peterson. Is it more than 200 miles from shore?
    Admiral Allen. It is much more, sir; yes, sir.
    Mr. Peterson. Okay, I guess to get my jogger in there.
    Admiral Allen. If I could just give a little background, 
there is a treaty that covers the governance of the Antarctica. 
There is no equivalent for the Arctic. The only operative 
international mechanism that applies up there is the Law of the 
Sea Convention, which we have not ratified, sir.

                           DRUG INTERDICTION

    Mr. Peterson. Okay, could you talk about your year with 
capturing drugs?
    Admiral Allen. Yes, sir; we had a very successful year this 
last fiscal year; 160 tons of drugs, mostly attributed to 
better intelligence, better sensors, and better technology. 
Some of the new things that are coming with Deepwater are 
starting to help us.
    Airborne use of force is very significant and impactful, 
although we are finding that they continue to adapt to our new 
methods. As we become more successful, we have seen things like 
liquid cocaine, dissolved in fuel tanks; and most recently, 
self-proposed semi-submersible vehicles. They look like mini-
submarines, but they operate just barely above the water line.
    Just last weekend, we had a seizure of one off the 
Galapagos. Well, it was not a seizure. Because as we were ready 
to come on board, it was scuttled and sunk.
    Mr. Peterson. Where is the greatest amount of drugs coming 
from, towards us?
    Admiral Allen. It is from Columbia to Mexico, in the 
Eastern Pacific Corridor; the West Coast, sir.
    Mr. Peterson. Do you have adequate resources for that 
mission?
    Admiral Allen. It is a needle in a haystack operation. The 
area between Columbia and Mexico, off the coast of Central 
America that we patrol every day is the size of the lower 48 
United States.
    We have good intelligence, but it gets back to maritime 
patrol aircraft being able to locate these vessels, and then 
put a cutter on scene and a boarding team on the vessel itself. 
It is a challenge, sir.
    Mr. Peterson. But our intelligence does tell us when ships 
are leaving.
    Admiral Allen. Yes, the intelligence has never been better.
    Mr. Peterson. But what can we do to help you stop the drug 
trade?
    Admiral Allen. Well, again, it is building out the 
Deepwater fleet; especially the national security cutters and 
the offshore patrol cutters that are the ones that operate in 
that environment, the maritime patrol aircraft.
    Ultimately we are going to have to come to grips with what 
our solution needs to be on high altitude, unmanned aerial 
vehicles, which have some potential, especially in a place in 
the Eastern Pacific. That actually, as I mentioned earlier, has 
prompted me to have some discussions with General Mosley, Chief 
of Staff of the Air Force, about what we might be able to do 
together.

               SIZE OF USCG AND MARITIME DOMAIN AWARENESS

    Mr. Peterson. When you look at the issue of energy and the 
role you play in bringing energy into this country, protecting 
our resources offshore; when you look at the drug issue, and 
you look at the whole terrorism issue, and your new role to 
protect us offshore, do we need more of you?
    Admiral Allen. Well, as I said earlier, yes, you do, sir. 
But we also need something called Maritime Domain Awareness. We 
need a system that allows for a combination of sensors; 
locating devices on vessels, which are going to be required 
here shortly under international law. That all needs to be put 
together, so we can sense what is out there, to check threats 
and deal with this as far offshore as we can, sir.
    So the size of the Coast Guard certainly is one issue. But 
the issue of Maritime Domain Awareness and building out that 
national/international system is also going to be key.

               BUILDING OUT NATIONAL/INTERNATIONAL SYSTEM

    Mr. Peterson. Is that money you have asked for?
    Admiral Allen. We are building out the process. Part of the 
national automated identification system is in the budget. That 
is one of the first steps involved in vessel tracking. That 
will be supplemented in the next two years by long-range 
tracking that is now required by international Maritime domain.
    Mr. Peterson. What other agencies play a role in that?
    Admiral Allen. That is virtually every Federal agency that 
operates in or on the water; the intelligence community, all of 
our partners.
    Mr. Peterson. It is vital to our security.
    Admiral Allen. Absolutely, sir.

                            DOLLAR OPERATION

    Mr. Peterson. Thank you.
    Mr. Price. Thank you very much. I would remind the 
gentleman from Pennsylvania the history of his questions about 
polar operations. This committee does have a history of 
involvement in those issues under Mr. Rogers' leadership.
    For example, we commissioned a National Academy of Sciences 
study a few years ago that has to do with the Coast Guard's 
ability to meet its obligations in the polar areas; and in last 
year's bill, the Commandant is directed to submit a 
comprehensive polar operations report in this current year that 
will fully assess the current projected mission requirements, 
evaluation of capabilities, and how they measure up with those 
requirements. So you raised good questions. We are, I think, on 
our way to getting some more systematic answers.

                           SIZE OF USCG FORCE

    Admiral, a number of members have raised the issue of the 
size of the Coast Guard. You, in your statement, indicated that 
there would be some personnel increases. There are some 
personnel increases built into your 2009 budget. But I think 
you describe that as a mere down payment. So I want to explore 
that a little further with you, and also bring Mr. Caldwell 
into the discussion. Because I know GAO has analyzed pockets of 
Coast Guard personnel needs.
    As I understand it, Admiral, we are talking about 
approximately 350 new personnel in the budget submission you 
have made: 276 marine inspectors, 29 in the counter-
intelligence area, 46 in providing intelligence on cutters. It 
is a down payment, you say.
    I wonder if we should not be taking a more systematic look 
at this? Is this something that competent outside analysts 
should be helping us with? Is the Coast Guard itself going to 
be coming up with this more comprehensive review?
    You have thrown out some tantalizing suggestions, yourself; 
but without, I believe, clearly drawing the budget 
implications. So I would like to invite you to elaborate.
    Admiral Allen. Yes, sir; first of all, it is a small amount 
of personnel that are being requested in the 2009 budget. I am 
really trying to frame this discussion going forward, sir.
    I have challenged my people at Coast Guard Headquarters to 
start breaking down our programs, and give me some gap 
analysis. So that is, we know we have shortages now, and where 
we will need them in the future.
    I alluded to some of those earlier: Increases in the 
liquified natural gas traffic. We have new towing regulations 
that are coming on; changes in the Maritime environment. They 
are going to require us to more, what I would call, not asset-
based work. It is personnel-based work.
    Our sector command centers are much more complicated than 
they used to be. They require more people there to be looking 
at the eyes and ears around the port, to ensure that we are 
detecting those threats and responding to them.
    The way we used to operate in Coast Guard groups before 
sectors, you had somebody listening for a distress call and 
then somebody to launch a boat if somebody was in trouble. Now 
we have active surveillance looking for anomalies and targets 
of interest to intercept and board, before we actually have a 
problem in and around the port. That is a vastly different 
operational model; one that is more resource-intensive than the 
one we have had historically.
    So this can be broken down into segments, sir, and that is 
what I have got my people working on right now. I want to be 
able to articulate, going forward, because this is going to be 
competitive in the budget process. This is not a request for 
appropriations outside channels. I know where my lanes are at.
    But the discussion needs to start; and whatever we come 
forward with, we need to be able to defend, both inside the 
Administration and before the Congress, and that is my intent, 
sir.
    Mr. Price. To what extent do those analyses, discussions 
that you are referring to figure into your 2009 request in the 
early stages of negotiations within the Administration?
    Admiral Allen. Actually, I think my discussion recently was 
an absolute result of not only the 2009 process, but the 2008 
appropriations process and how they mix together, sir. I came 
to a realization a few weeks ago, and this prompted some of my 
public discussion.
    We got kind of caught in the middle, where we had agreed to 
a top line on the 2009 budget, which everybody does in 
Government. That is the way it works. Then we had a 2008 
Appropriations Bill passed that required annualizations.
    Nobody is doing that with untoward intent. But we kind of 
got caught between two fiscal years, and the ability to analyze 
2008, and then deal with the top line in 2009 severely 
constrained us. I think we have to have a discussion going 
forward of how we are going to do this in the budget process to 
bring the people into the Coast Guard that we need to bring in, 
sir.
    Mr. Price. Well, as you and I, I think, both said in our 
statements, you did largely analyze the 2008 increases. They 
are reflected in the 2009 request. Those did include some 
personnel increases. Is that not right?
    Admiral Allen. Yes, sir; our 2009 request includes $49 
million that was brought forward to analyze. The remainder 
amount of that was brought within the Coast Guard's top line. 
In other words, we had to analyze that ourselves, sir. It did 
not come forward.
    The $70 million that was in the budget, about $40 million 
of that came forward, sir. We would be glad to provide you a 
detailed answer and a breakdown for the record.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 43032B.208
    
    Mr. Price. Yes, in fact, just looking here at the figures 
we have, the 2007 to 2008 personnel increases exceed by a 
considerable number the requests you are making for 2009, as I 
understand it. Well, we need to know whom those people are and 
where they came from. I do know that in our 2008 bill, we 
included substantial personnel increases.
    Admiral Allen. They are annualized, sir.
    Mr. Price. They are annualized.
    Admiral Allen. Yes; it is different sources, but they are 
annualized.
    Mr. Price. All right, Mr. Caldwell, what would you have to 
say about this? I know you have looked at, at least on a spot 
check sort of basis, the pockets of needs.

                     GAO REVIEW OF STAFF SHORTAGES

    Mr. Caldwell. Yes, we have looked at several areas recently 
involving the security missions, as well as some of the other 
management areas. We have looked at acquisition management, 
domestic facility inspections, the overseas facilities 
inspections, as well as protection of LNG and other energy 
tankers, which Representative Lowey had mentioned.
    In every one of those areas, we found that there were not 
enough staff to do the work. We started asking the Coast Guard 
to do analyses of what staff they needed. In our LNG work, the 
Coast Guard, I think rightly in this case, came back and said, 
LNG is not the only concern. They stated they have got a lot of 
other hazardous commodities, and thus a lot of other security 
concerns. They were probably deferring to the larger analysis 
that Admiral Allen is talking about here.
    For those areas we have not looked at, which are mentioned 
in the budget request, I cannot comment. But for the security 
areas that we have looked at, there were definitely shortages 
of personnel.
    I wonder if I could make another comment related to the 
questions about rotation that came up?
    Mr. Price. Certainly.
    Mr. Caldwell. Just as members of the committee and the 
staff, I also get out to quite a few Coast Guard locations in 
the course of my work. I have seen the rotation policy, both 
the bad and good up close, and I would like to talk about that 
briefly.
    The bad part of the rotation policy I see is when I meet an 
inspector who is relatively new to the Coast Guard. They are 
inspecting facilities to see if they are in compliance with 
MTSA security plans. This is the first time they have had that 
job. When we talk to them, we also find out they are about to 
rotate off to another type of unrelated position.
    They are rotating in and out of those positions as fairly 
junior people. They are in training programs to try to bring 
them up to speed but they are not experts and not experienced.
    Related to this, we will hear complaints when we talk to 
other stakeholders in the ports, that the stakeholders have the 
continuity that the Coast Guard does not. It has different 
people coming in. One facility security officer told us that in 
the year and-a-half that he had been there, there had been 
three different Coast Guard inspectors coming to look at this 
facility. Each of them, in his words, was ``wet behind the 
ears.''
    The good side of the Coast Guard's rotation policy, just to 
be balanced, must also be mentioned. I meet Coast Guard people 
with 10 to 12 years of experience. It is very broad experience. 
They have been in four different positions. So by the time 
Coast Guard personnel gets up to a mid-level officer, they have 
done environmental work. They have done safety work. They have 
done security work. They have done regulatory work.
    So that is the balance that the Coast Guard is trying to 
reach. As a military service, they are trying to achieve that 
with their rotation policy.
    I want to also bring into this discussion the topic of the 
civilian work force. Whether it is financial or otherwise, I 
think there is a lot of positives that can come out of 
increasing the civilian workforce for these inspection 
positions.
    If you have civilians, they are there for a number of 
years. They are going to know which facilities are a little 
shakey that you need to check up on. A civilian might better 
know which facilities have very good security, because they 
have been to them multiple times and they have developed an in-
depth knowledge of a particular port.
    So I was actually happy to see that many of the marine 
inspection positions are going to be civilians. Maybe there 
could be more than are currently planned. That may be one way 
to improve the Coast Guard's rotation policy, by increasing the 
number of civilians.
    Mr. Price. Thank you, and I would think that financial 
management is one of those areas where the virtues of rotation 
are less evident. The balance probably tilts very much the 
other way.
    Let me just quickly turn to another topic. Our time is 
limited here. But I want to raise the issue of these security 
operations. Here, too, we are referring to GAO findings in the 
past; to the effect that the Coast Guard had not made its own 
security requirements such as vessel escorts, boarding, 
critical infrastructure patrols.
    So in the 2008 Appropriations Bill, the committee added 
$29.4 million dollars, for an additional 238 boat crew members, 
boarding team members and marine inspectors. That is where some 
of those personnel increases come from, and there were 26 
defender class small boats to enhance the Coast Guard's ability 
to enforce security zones and protect critical infrastructure, 
and provide escorts and boarding of high interest vessels.
    So let me ask both the Commandant and Mr. Caldwell, with 
this additional funding made available and the $24.6 million 
requested by the Coast Guard this year to analyze that funding, 
will the Coast Guard now be able to fulfill its security 
requirements? Is additional funding in 2009 necessary? In other 
words, are the 26 additional small boats and the 238 boat crew 
members that this committee added in 2008 enough, assuming that 
is annualized; or should additional boats and crews be funded 
in 2009, Admiral?
    Admiral Allen. Put in the context of the growing workload, 
to be present from liquified natural gas and so forth, I would 
have to tell you no.
    Having said that, some of the requirements were not met and 
that those resources were put in again, for our own internal 
standards for what we would do at different maritime security 
levels in a port. We established those after 9/11.
    Some of them are pretty significant in the ports. I have 
asked my people to go out and re-baseline that, to make sure 
that we are adequately managing the risks. So we are not just 
throwing resources across the board at all the ports, and so 
the resources that we get are being put to the highest use.
    What I would like to do is give you a gap analysis and 
answer for the record, if I could, on that. Because my guess 
is, that is a great down payment; but we probably need more.

                            SMALL BOAT STUDY

    Mr. Price. How does your budget request compare to the need 
determined in your own small boat study last year?
    Admiral Allen. Our internal boat study?
    Mr. Price. Yes.
    Admiral Allen. I would have to answer for the record on 
that one, sir.
    [The information follows:]

    Consistent with the planning process reflected in the FYHSP, we are 
in the continuous process of identifying gaps in our boat forces 
community beyond what is presented in the President's request. In 2007, 
Pacific and Atlantic Areas deployed the Boat Analysis Tool (BAT). The 
BAT uses standard methodology to quantify total mission required boat 
hours throughout the Coast Guard.
    The Office of Boat Forces compared the mission required 724,707 
boat hours in the BAT to currently deployed capabilities (i.e., boats 
and boat crew personnel). This yielded a mission required boat hour gap 
of approximately 400,000 hours (or 57 percent) which is considered when 
assessing Coast Guard performance against stated Ports, Waterway, and 
Coastal Security (PWCS) mission objectives. At present, the Coast Guard 
is meeting PWCS performance objectives. We use a layered approach and 
system of assets and activities (i.e., involving aircraft, boats, 
facility inspections, etc.) to fulfill PWCS objectives. The results of 
the BAT are being vetted through the program and validated against both 
risk based operational needs and Coast Guard mission hour requirements.
    In 2008 we received $29.4 million to acquire additional small boats 
and personnel to support increased PWCS capabilities. These assets will 
be used to support the increased requirement for the security of 
certain dangerous cargo and other port security requirements. The 2008 
appropriation also provided $45 million to procure 14 more RB-Ms, our 
41 ft UTB replacement boat. All of these assets will help improve our 
progress in mitigating the gap between currently deployed capabilities 
and increased mission hour requirements. The FY 2009 Budget Request 
will continue to close the gaps.

    Mr. Price. All right, fine; Mr. Caldwell.
    Mr. Caldwell. We did our work by visiting several different 
sectors, and we found that was where these personnel shortages 
were. We also did a broader analysis of all the sectors and 
found the shortages were widespread. But I cannot say we did 
our study with enough granularity to come up with detailed 
estimates of needs.
    The Coast Guard, at that point, was still doing the small 
boat study. We just have not done enough study on this 
question. Therefore I do not know if 26 small boats is the 
right number or not.
    Mr. Price. All right, well you, too, maybe can answer for 
the record, and then help us analyze this, going forward; Mr. 
Rogers.

                        FY 2009 OPERATIONAL COST

    Mr. Rogers. Admiral, when you factor in emergency 
appropriations and the money transferred from the Navy for your 
Operation Iraqi Freedom expenses, your 2009 request is about 
3.5 percent above the 2008 inactive level, which is about 
inflation.
    But upon closer examination, I am not sure that your 2009 
request for operational expenses is an accurate measurement of 
the true operational costs. What do you say about that?
    Admiral Allen. It probably is not an accurate presentation 
of the costs required to conduct the Coast Guard operations. I 
had mentioned earlier, we have unscheduled maintenance and 
things that require us to manage within our base, if you will, 
against the challenges that are at hand.
    So I would tell you that the operating base and the cost 
associated with that are something that we have to manage in 
any particular year.
    The aging assets are things that start to go above 
historical trending lines. You either have to give more money 
to support those assets or the unscheduled maintenance, or you 
have to absorb that within the cost of operating the Coast 
Guard. That is where we are at right now, and that is why I say 
we are at an inflection point, sir.
    Mr. Rogers. Well, you are not going to be able to operate 
at the same level.
    Admiral Allen. No, sir; well, I mean, we should be counted 
on to find efficiencies where we can, and we are doing that. 
But at some point, once you get to a certain line and inflation 
goes faster and have the costs go up, you are going to absorb 
it, sir.
    Mr. Rogers. Well, I mean, you have got these older cutters 
that are requiring more maintenance every day, as you have 
said, and as we have seen.
    Admiral Allen. Yes, sir.
    Mr. Rogers. There are other hidden costs that will eat up 
that 3\1/2\ percent increase over last year, not counting 
inflation. You are going to be well below the capability that 
you now have, next year, with this small of an increase, as I 
see it. Am I off base?
    Admiral Allen. Well, you do not know until you get into 
that year and see what is coming. But sir, the possibility 
certainly exists; yes, sir.
    Mr. Rogers. Well, what are you going to do about that?
    Admiral Allen. Sir, it is my job to manage the Coast Guard. 
We had extraordinary fuel increases throughout the year. We 
have ships that break down, and you manage it against the line 
you have got. That is the reason they hire us to do these jobs. 
It is not easy, and with a constrained budget, it presents more 
challenges.
    I took the rather extraordinary step this year in working 
the 2009 budget with the Administration to ask for more 
maintenance money for our Legacy cutters. That is something 
that has not enjoyed, you know, particular support in the past. 
But it has now, because it is reality and we have to do it.
    If that means that we have to reduce our funding some place 
else in the Coast Guard to support those Legacy cutters, I am 
willing to do that, sir.

                          AC&I BUDGET REQUEST

    Mr. Rogers. Now your 2009 request for acquisition, 
construction, and improvements does not seem to align with the 
previous year's capital investment plans that we require you to 
file with us. They do not appear to be in sync. Can you help us 
understand that?
    Admiral Allen. Yes, sir, I think we are going through a 
maturation process in the department regarding the future year 
of Homeland Security plan, of which the capital investment plan 
is a sub-set of.
    This is a standard way of budgeting across the river, in 
the Pentagon, the future year defense plan, the FYDP. Since the 
department was established, the intention was to create that 
future Homeland Security Plan.
    I think, because of the urgencies of each particular year, 
it is negotiated on a yearly basis; that sometimes we lack 
stability then in long-term funding projections on which to 
base our acquisition projects and so forth. It is a problem 
with the maturation of the budget process in the department, 
sir.
    Mr. Rogers. So which one are we to believe?
    Admiral Allen. The one that comes with our Congressional 
justification, sir, that year.

                     POLAR OPERATIONS IN ANTARCTICA

    Mr. Rogers. Now very briefly, back to the polar operations, 
I am still confused. The icebreakers are Coast Guard ships, are 
they not?
    Admiral Allen. Yes, they are, sir.
    Mr. Rogers. They are owned by the Coast Guard.
    Admiral Allen. Yes, sir.
    Mr. Rogers. Do you operate them?
    Admiral Allen. When we are provided money by the National 
Science Foundation, sir.
    Mr. Rogers. Do they provide money?
    Admiral Allen. This year they elected not to use our polar 
ice breakers to do the break-out at McMurdo Sound in 
Antarctica. They contracted with the Swedish ice breaker, the 
Oden, to do that, sir.
    Mr. Rogers. What was the reason for that?
    Admiral Allen. Probably it was a better deal, and they are 
constrained like everybody else is, sir.
    Mr. Rogers. A better deal meaning cheaper?
    Admiral Allen. Less cost, yes, sir.
    Mr. Rogers. So do they pay you for your equipment?
    Admiral Allen. We have enough money to have the people on 
board on the cutters stationed in Seattle, ready to go. One is 
in commission special status right now, because we have not had 
enough money to keep it up.
    The actual operations of those vessels in any particular 
year is dependent on funding from the National Science 
Foundation, due to the appropriation structure that was created 
a few years ago that gives them the base money to operate the 
cutters. But we have the people and the ship, sir.
    Mr. Rogers. I remember being down there in New Zealand a 
couple of years ago. We got the briefing from the NAS, and I 
left more confused than when I went in, because you are saying 
a hell of a lot.
    Admiral Allen. I am with you, sir.
    Mr. Rogers. You are confused?
    Admiral Allen. About the current funding situation, yes.
    Mr. Rogers. What should we do about it?
    Admiral Allen. I would rather have not enough money to 
operate the ice breakers, and have it in the Coast Guard, sir.
    Mr. Rogers. Yes, I think I hear you, okay.
    Admiral Allen. Now there is the issue of having enough 
money to operate the ice breakers. But the first thing we need 
to do is, if I am responsible for operating them, then I think 
the money should be in my budget.
    Mr. Rogers. Well, apparently, they are thinking that there 
will not be any ice to break, because of warming. Is that the 
answer?
    Admiral Allen. Not necessarily, sir--ice that breaks off 
and starts shifting around, and then collides and goes over 
itself, actually can create a more hazardous environment 
regarding ice and the requirement for ice breakers in a fast 
sea ice, sir.
    Mr. Rogers. Now those ice breakers are not new ships, are 
they?
    Admiral Allen. No, sir, they are about 30 years old.
    Mr. Rogers. Do you pay the maintenance on them?
    Admiral Allen. The National Science Foundation pays for the 
maintenance, sir.
    Mr. Rogers. Is that adequate?
    Admiral Allen. No, sir.
    Mr. Rogers. How much are we talking about?
    Admiral Allen. I would be happy to provide you a detailed 
answer for the record, sir.
    [The information follows:]

    Current funding is adequate to maintain the Coast Guard's 
icebreaking fleet at the requisite operational capability determined 
each year by NSF and USCG through the annual planning process specified 
in our MOA. Based on the Fiscal Year 2008 Coast Guard--National Science 
Foundation (NSF) program plan, the NSF will reimburse the Coast Guard 
up to $26.88 million in maintenance costs for our three icebreakers. 
Assuming no change to NSF operational plans, this funding level should 
allow for maintenance of the POLAR SEA and the HEALY at full 
operational capability, while leaving the POLAR STAR in caretaker 
status, pierside in Seattle.

------------------------------------------------------------------------
                                                POLAR    POLAR
         FY08 (in millions)            HEALY     SEA      STAR    Total
------------------------------------------------------------------------
Maintenance.........................    12.36    14.48     0.04    26.88
Operations..........................     6.00     4.60     0.33    10.93
Personnel...........................     6.15     9.12     2.59    17.86
                                     -----------------------------------
    Total...........................    24.51    28.21     2.96    55.68
------------------------------------------------------------------------

    If a change in U.S. icebreaking needs required the return of POLAR 
STAR to operational status in fiscal year 2009, maintenance costs are 
estimated at $56.6M for full reactivation, which would provide a 
service life of 7-10 years. The $56.6M includes an estimated $8.2M for 
a one-year work-up period to allow for a single Operation Deep Freeze 
deployment. Following Operation Deep Freeze, a two-year ($48.4M) 
maintenance period would be required to complete drydock, recurring/
corrective maintenance, and system upgrades on par with the POLAR SEA.

    Mr. Rogers. Please do that.
    Admiral Allen. Yes, sir.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Price. Ms. Roybal-Allard.

                              TWIC PROGRAM

    Ms. Roybal-Allard. I apologize for being late, Mr. 
Chairman. We have other hearings going on at this time, as 
well.
    Mr. Caldwell and Mr. Hutton, as you know, the TWIC Program 
was created to make the nation's ports more secure by requiring 
that background checks be performed on those wishing to gain 
unescorted access to port facilities.
    It is my understanding that at some ports, there have been 
problems in enrolling individuals in the TWIC program. At the 
ports of Los Angeles and Long Beach, for example, due to poorly 
sited enrollment offices and under-investment by the private 
program administrator, only 7,800 out of the roughly 50,000 to 
60,000 eligible truck drivers have enrolled in the program.
    Many of the nation's ports plan to begin mandatory use of 
TWIC by this Fall. Can you tell us what percentage of our 
nation's ports will meet that target date, and why are the 
Coast Guard and the TSA having so much trouble enrolling 
individuals in the TWIC program?
    Mr. Caldwell. In terms of the early TWIC enrollments, those 
seem to have gone fairly smoothly, like at Wilmington. I think 
that those ports were front loaded, in terms of additional 
resources to make sure that those first enrollments went well.
    In terms of the situation at an individual port, the 
captain of the port--the Coast Guard official in charge of that 
individual port--will make the decisions of when to put the 
TWIC enforcement requirement in place.
    So the decision will be made individually at each port. I 
would assume that decision would be made when the captain of 
the port felt the enrollment had reached where it needed to be.
    One thing that neither TSA or the Coast Guard does control 
is whether people that will be required to have these TWIC 
cards actually make the decision to enroll or not. There are 
certain criteria such as criminal records, where enrollees know 
they will not get the card. I do not know if that is becoming 
an issue in particular ports or not.
    Admiral Allen. Ma'am, we are in a two step process. The 
first process is to enroll people that need access and have 
them have TWIC cards. The second part will be a Coast Guard 
rulemaking that will establish a card reader program, where we 
will go to actually automating the access by flashing the card 
when they go by.
    The roll-out of those ports will be subject to when the 
captain in the port feels that is necessary. But there is a 
deadline for TWIC enrollment, and it is this September.
    We have checked all the Coast Guard captains in the ports 
around the country, including L.A. Long Beach. Enrollment is 
behind where it needs to be for us to finish this on time.
    The process is complicated. As you know, there is an 
enrollment process. Biometrics are taken. Background checks are 
run, and then that information is transmitted to a card 
production facility, biometrics, and then it is returned to the 
individual. That whole process has been rolled out, and is 
being worked right now.
    I have made a commitment with Kip Hawley, the Administrator 
of TSA, to go over our progress in the next 30 to 40 days with 
Acting Assistant Secretary Snyder. If we need to make a 
recommendation regarding whether or not that date should hold 
firm, we will do it at that time.
    But I am committed, within the Maritime community, to 
taking a look at that, and openly talking about that; and if 
there is a need to adjust the date, to tell them as soon as we 
can.
    Ms. Roybal-Allard. Well, is there a problem though? I mean, 
just using the figure in L.A. with the truckers, of only 7,800 
out of 50,000 to 60,000 eligible having enrolled, is there a 
problem that has been identified, that you are trying to 
address, in order to make that September deadline?
    Admiral Allen. The enrollment is being done by Lockheed 
Martin, which is the contractor for TSA. It is a TSA-contracted 
function. They have a set amount of enrollment centers and work 
stations where they do that. So the capacity is fixed by the 
contract.
    I think what we need to reconcile, going forward, is 
whether or not that capacity is sufficient to allow the 
through-put and time to meet the deadline. I think that is the 
issue we need to deal with, within the next 30 days, ma'am.
    Ms. Roybal-Allard. All right, thank you.
    Mr. Price. Mr. Peterson.

                           POLAR ICE BREAKERS

    Mr. Peterson. Let us go back to the discussion you were 
having with Mr. Rogers, the ice breakers. I was reading here, 
it says, while other Arctic powers are racing to carve up the 
region, the United States has remained largely on the 
sidelines. The United States today funds a Navy as large as the 
next 17 in the world combined. Yet, it has just one sea-worthy, 
ocean-going ice breaker, a vessel that was built more than a 
decade ago, that is not optimally configured for Arctic 
missions.
    Russia, by comparison, has a fleet of 18. China operates 
ice breakers, despite the lack of Arctic waters. Through its 
own neglect, the world's super power, a country that borders 
the Bering Strait and possesses over 1,000 miles of Arctic 
coastline, has been left out in the cold.
    Is that a fair assessment of where we are at in the Arctic?
    Admiral Allen. The National Academy of Sciences study that 
was done several years ago affirmed the need for three polar 
ice breakers. Actually, it was two ice breakers and one ice 
strength and research ship, which is the Healy. That is the 
standing requirement of record.
    What I have been trying to do within the Administration, 
and it is reflected in the 2009 budget request, there is money 
to start a requirements analysis, where we are going with our 
Polar capabilities.
    We have to lay out, I think, what it is that we need. But 
first, I think we need a discussion on policy, because there 
are some policy issues that should drive the requirements.
    In other words, what is the U.S.'s position in the Arctic? 
What kind of presence do we want up there? What are the 
sovereignty issues; and how does that translate into a 
requirement for presence, that would translate into ice 
breaking requirements and almost a re-validation?
    The standing requirement now is that there are three to be 
operated. One is a commission special status now, due to lack 
of funds for maintenance to conduct it. One is tied up and not 
being used by the National Science Foundation for breakout, 
McMurdo. The third, the Healy, is being actively used and will 
be deployed this summer to do scientific research in support of 
a potential U.S. claim beyond their Continental Shelf.
    Mr. Peterson. But that is the only one we have.
    Admiral Allen. There are two operational now, yes, sir--two 
of the three, yes, sir.
    Mr. Peterson. Okay.
    Admiral Allen. There is the heavy ice breaker and one ice 
strength and research.

                    INCREASE OF NAVIGABLE WATERWAYS

    Mr. Peterson. But if we end up with more water there that 
is navigable, it talks here about it becoming a northern pass, 
where huge shipping costs could be saved by cutting 65,000 
knots at sea. It could reduce current traffic.
    That is 11,200 miles to 6,500, a savings of 40 percent; and 
also, from Seattle to Rotterdam, by 2,000 nautical miles, 
making it 25 percent shorter than current routes, by having 
navigable waters up there. Is that something we should be 
pursuing with energy costs of moving goods and services and 
time?
    Admiral Allen. Well, I think the markets will drive that. 
What we have to be prepared for is to support the marine 
transportation system that evolves to meet those markets. 
Things we are looking at are the implications of the Bering 
Strait becoming a neutral point; and the requirement for vessel 
traffic separation schemes and a way to manage that water way, 
if traffic increases up there.
    Oil and gas leases that are being expanded off the north 
slope are another issue that we need to look at; and generally, 
the wide range of Coast Guard missions that would now have to 
be accomplished in high latitudes. We do not have any permanent 
operating bases up there.

                       ARCTIC OIL AND GAS RESERVE

    Mr. Peterson. This article also talks about that this is 
the largest oil and gas reserve left in the world that is up 
there, and the whole world is going to fight for it. If we are 
not a player and it is our territory, it seems to me like we 
are sort of sitting on our hands when we ought to be 
functioning.
    Admiral Allen. Well, there are two issues, sir. One of them 
is presence and how we are going to protect our sovereignty 
within our exclusive economic zone; and if we decide to sort of 
claim beyond the 200 mile limit, how we will do that, as well.
    The second thing is the entire governing structure for the 
Arctic Basin right now. It is, in effect, the Law of the Sea 
Treaty. As I said before, when the claims are made before that 
international Seabeck Commission, we want to have a seat at 
that table, because we will not have ratified the treaty.
    Mr. Peterson. That is the Senate's rule, right?
    Admiral Allen. Yes, sir.

                     SHIPS CARRYING HAZARDOUS CARGO

    Mr. Peterson. One final question, you spoke earlier about 
LNG ships and your protection of those. What other dangerous 
ships are moving in and out of our coastline that you have to 
monitor and that you have to provide protection to?
    Admiral Allen. Well, all shipping creates some measure of 
risk, because you are moving through an environment and there 
are issues related to that.
    As I said earlier, beyond LNG, we need to look at all 
liquid hazardous gases, propane being one of them. But there 
are all kinds of hazardous cargoes that are being moved by both 
bulk and liquid tankers.
    I just had a hearing yesterday. Our non-tank vessels are 
getting so large right now that the amount of fuel they carry 
is as large as what a tanker used to carry. The largest ship 
that is called in the United States, carrying just fuel oil not 
cargo, was carrying seven million gallons of fuel oil.
    So we are in the process now of creating regulations and 
rules for how we would respond to spills from non-tank vessels; 
and there is actually an international requirement to have 
those fuel tanks double-hulled in the future. So there are a 
variety of risks, sir.
    Mr. Price. The gentleman's time has expired. If you could 
submit your remaining questions for the record.
    Mr. Peterson. Thank you.
    Mr. Price. Mr. Culberson.

                              ICE BREAKERS

    Mr. Culberson. Thank you, Mr. Chairman
    Admiral Allen, thank you for your service. We really admire 
the Coast Guard immensely, and we would do anything we can to 
certainly help.
    On the requests that you have made, I have also been 
concerned, as you know from previous hearings about the 
problems with the ice breakers, and would certainly encourage 
the subcommittee, Mr. Chairman, and members, to do what we can 
to help the Coast Guard pay for these vessels.
    It is not a good solution, in my opinion and I agree with 
you, to leave these in the hands of the National Science 
Foundation. Chairman Price and I both serve on the Commerce, 
Justice, Science Subcommittee. We are both, as I know other 
members of the subcommittee are, but I know Chairman Price in 
particular is as passionate as I am about investing in the 
sciences.
    The National Science Foundation is getting a good shot in 
the arm this year. But that is just frankly to meet the needs 
that they have got for the number of grant requests. They have 
never been and should not be in the business of operating a 
fleet of ice breakers.
    So I certainly look forward to working with you, Mr. 
Chairman and Mr. Peterson and members of this subcommittee, to 
help make sure the Coast Guard takes full responsibility for 
the ice breakers, that we give you the money you need to 
operate and maintain them, and frankly, help replace some of 
the problems you have got with the age of your fleet.
    I admire what you do immensely. This is not a question, but 
I just want to tell you how much I appreciate your work. I look 
forward to working with you, Mr. Chairman and this 
subcommittee, in helping address the Coast Guard's needs; thank 
you.

                          GAO RECOMMENDATIONS

    Mr. Price. Thank you, and in response to both of the last 
questions, Admiral, I believe the study that we have required 
as part of the 2008 Appropriations Bill, in many respects, 
matches what you described as the 2009 prospective study with 
regard to these Arctic operations.
    So we look forward to receiving a fuller and more 
comprehensive assessment of where we are and where we need to 
be with regard to the Polar operations, including the funding 
issues to which Mr. Culberson refers.
    We have some votes coming on the floor rather soon, and so 
I am afraid our time is going to be limited. For that reason, 
Mr. Hutton, I am going to forego an oral question I was going 
to ask you.
    But I would ask you to submit for the record an elaboration 
of the statements in your testimony regarding the 10 
recommendations that GAO made in 2004 to the Coast Guard on the 
management of the Deepwater Program.
    You say that over time, the Coast Guard has addressed many 
of these, but that three significant areas remain: The 
integrated product teams, the maintenance and logistics 
responsibilities for deep water assets, and cost control under 
the ICGS contract--that those matters remain open. So I think 
we do need an elaboration of that statement.
    Mr. Hutton. I would be happy to do that.

              FRCB INDEPENDENT VERIFICATION AND VALIDATION

    Mr. Price. So we will look for that.
    Admiral, let me get to a couple of Deepwater details. Last 
year, you said you were going to ensure that independent 
verification and validation by a third party would be conducted 
of the design of a new asset.
    The Coast Guard has now reviewed proposals it received for 
the patrol boat that will replace the current 110-foot patrol 
boat, called the fast response cutter-B. The rough timeline 
that we have received for awarding this contract is pretty 
aggressive. It is within six months of when you received the 
proposals.
    So it does raise the question about what kind of 
independent verification and validation you will receive before 
you award the FRCB contract in June. Will the verification and 
validation cover all the changes made to the design of the so-
called parent craft?
    Admiral Allen. Yes, sir; we have an evaluation team that is 
looking at this. In fact, we extended the time for the 
proposals a little bit longer, because we had a significant 
response and significant questions. We actually allowed for 
more proposal time than we originally had imagined.
    The evaluation of these proposals is done by a team of 
Coast Guard experts representing our technical authorities. As 
you know, the ship will be classed by ABS, which is an 
independent third party.
    So as we move forward to that, there will be a balance 
between Coast Guard people being involved and the subject 
matter experts as we need from the outside, sir.
    Mr. Price. So the short answer is that this pledge of 
independent verification of these new assets will apply to this 
project, despite the short time line?
    Admiral Allen. Yes, sir; what I would be glad to do is give 
you an answer for the record of exactly who was involved in the 
evaluations. We would be glad to give that to you, sir.
    [The information follows:]

    The Coast Guard is employing the services of an independent entity 
that is recognized for its expertise in ship classification to assess 
the ability of the offered designs to comply with the requirements in 
the American Bureau of Shipbuilding (ABS) Guide for Building and 
Classing High Speed Naval Craft (HSNC Guide). The review is being 
conducted by structural, electrical, mechanical and control system 
engineers with significant experience in performance of design analysis 
and reviews. Due to the need to protect the integrity of the ongoing 
source selection process, it is not appropriate to enter into the 
public record the specific name of any organization participating in 
the evaluations of proposals.

    Mr. Price. And by independent, you mean outside the Coast 
Guard.
    Admiral Allen. We are going to classify this vessel 
according to ABS standards. That is the independent. We made 
that promise going in, sir. That is the American Bureau of 
Shipping.
    Mr. Price. Is that the same thing as promising 
verification, validation by a third party on the design of a 
new asset? I am just trying to square up what you are saying. 
Is this implementation an operationalization of the process you 
earlier said you would be following?
    Admiral Allen. Yes, sir; the process that I said we would 
follow, there are two things. One of them is, independent 
validation of the requirements for the vessel.
    Mr. Price. Yes.
    Admiral Allen. That is being done through the alternatives 
analysis. Then the goal always was to having ABS on board, so 
we did not have Coast Guard people being involved in the 
proposal development and award, and the construction of this 
vessel; ABS being the independent third party, sir.
    Mr. Price. All right, we may have some further questions 
about this.
    Admiral Allen. Yes, sir.
    Mr. Price. But we do need to make sure what we are looking 
at here, and the independent verification and validation of the 
design, exactly what that means and how that is going to be 
implemented.
    Admiral Allen. Yes, sir.

                         MARINE PATROL AIRCRAFT

    Mr. Price. Let me turn to the marine patrol aircraft. The 
committee, in the 2008 appropriations, directed the Coast Guard 
to study and report back on interim stop-gap measures that 
might be used to address the Maritime patrol hour gap.
    The Coast Guard is substantially below the 44,000 air 
patrol hours it said it needed some years ago. It is probably 
today operating at about half the 61,600 air patrol hours it 
determined it needed in 2004. This is because of the old age 
and the bad state of the current Falcon jets.
    Other than speeding up the production of the CASAs, which 
are the Falcons' replacement, which is difficult to do while 
the CASA is still in the developmental testing phase, what kind 
of alternatives have you explored?
    Admiral Allen. Well, really all we looked at was whether or 
not we could extend the life of the Falcons. But quite frankly, 
that is cost prohibitive, sir; and the time it would take to 
bring at least aircraft or some other platform in is, I think, 
both time and cost prohibitive, as well. I think the course we 
are on is the correct course.
    I would just tell you this, because this just breaking news 
from the last couple of days. We have finished exercising all 
the communications transmissions modes from the HC-144 Alpha, 
and would anticipate taking receipt of that in the next two 
weeks. At that point, we will be through developmental testing 
evaluation, as we told you we were going to complete, sir.
    Mr. Price. Well, we provided $170 million for the Maritime 
Patrol aircraft in the 2008 bill.
    Admiral Allen. Yes, sir.
    Mr. Price. We did make $70 million of this unavailable 
until you certified that the mission system pallet 
developmental service and evaluation was complete. That pallet 
is critical for ensuring that the aircraft can effectively 
communicate mission data and can connect to classified 
information networks. What about that certification?
    Admiral Allen. Yes, sir; we expect to have that done in the 
next two weeks, sir.
    Mr. Price. All right.
    Admiral Allen. We are hoping to accept on this aircraft in 
the next month, sir.
    Mr. Price. All right, you had first said 2008. Now you are 
saying mid-March is the date you anticipate this will done.
    Admiral Allen. Yes, sir.
    Mr. Price. All right, have you certified the MPA through 
development testing? What are the issues with doing that, and 
when do you expect that certification?
    Admiral Allen. Well, developmental test and evaluation is 
complete, with the exception that we need the transmittal. It 
is called the common operating picture, from the plane to the 
ground.
    What we were looking at, in the last couple of weeks, is 
unclassified and classified communications data exchange, which 
we have done. We anticipate finishing up the final pieces of 
that in the next week or so. Subject to a successful evaluation 
of that, we will accept the first aircraft, sir.
    We will be done, at that point, with developmental tests 
and evaluation, and we will move into operational tests and 
evaluation, where we will then take the airplane and put it 
into mission scenarios and see how it performs against the 
mission, sir.

                         OFFSHORE PATROL CUTTER

    Mr. Price. All right, finally, the alternative analysis 
that the committee required of the Coast Guard that was just 
received last week recommends that the Coast Guard examine 
whether the offshore patrol cutter, a new cutter not yet in 
design, could meet the national security cutter mission and 
potentially obviate the need to produce two national security 
cutters. The offshore patrol cutter is supposed to replace the 
existing 210 foot and 270 foot cutters.
    Are you looking, or will you potentially look, at using 
this offshore patrol cutter as a replacement of the two NCSs. 
Mr. Hutton, I would appreciate your view on that, too, if you 
would chime in; Admiral?
    Admiral Allen. Well, since it was raised by an independent 
third party, we need to look at it and evaluate it. We need to 
look at the mission profile. If you look at operations in the 
Pacific and the Bering Sea, potentially north of the Bering 
Sea, off of Columbia, for drug interdiction, we have a cutter 
deploying to the West Coast of Africa this summer.
    We need to look at the mission demand for the endurance 
that the NSC will bring, which is greater than the OPC, and 
make a decision on the tradeoff and requirements, sir.
    Mr. Price. Mr. Hutton, I do want to hear from you. But 
also, Ms. Roybal-Allard, do you have another question?

                    INCREASE OF FUNDS FOR DEEPWATER

    Ms. Roybal-Allard. I just wanted to add that given the 
budget request includes an increase, a 20 percent increase in 
funding for the Deepwater Project, and given the fact that not 
all the reforms have been completed and there are some 
problems, if you could include in your report as to whether the 
timing is right to give a 20 percent increase at this point, 
will it help address some of the problems, or will it 
complicate it, because of their inability, at this point, to 
fully manage the program.
    Mr. Price. Admiral, you may want to respond to that 
briefly, and then respond for the record.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 43032B.209
    
    [GRAPHIC] [TIFF OMITTED] 43032B.210
    
    Admiral Allen. Well, it is always a tradeoff, ma'am. We 
need these new cutters desperately. We need to re-organize our 
acquisition program. We need to adhere. We have been 
assiduously dealing with GAO on this thing.
    There are three items left to do, to be able to get our 
house in order. But quite frankly, they are in progress. It is 
not that there are still gaps. There are things that we are 
working on that we just have not finished or demonstrated that 
we have completely done them.
    So the answer is, we are always going to be in a risk 
position where we are not going to be able to wait on some of 
these decisions, because we need these cutters and aircraft out 
there as fast as we can. But we have to demonstrate competency 
and stewardship and capacity to be able to do this, and that is 
the reason we welcomed GAO's partnership as we move forward 
there.
    Mr. Price. Mr. Hutton, let us return, for just the time we 
have remaining here, to the offshore patrol cutter. What would 
you say about that proposition?
    Mr. Hutton. The one thing I can add is that with respect to 
the OPC, the Coast Guard has basically taken a pause. They are 
looking at their requirements right now.
    As they look at those requirements and they assess the 
results of the alternatives analysis, they are also looking at 
upgrading some of their modeling to look at the mixing of the 
assets and what is the most optimum, I think that there is some 
time right now where they can look at those things and then 
make a determination, when it is appropriate, what steps make 
the most sense for the Coast Guard.
    Admiral Allen. Mr. Chairman, could I add a comment?
    Mr. Price. Certainly.
    Admiral Allen. This is not part of your questions. But I 
think in truth in advertising, there are other discussions 
going on in government about ship building right now.
    I meet regularly with the Chief of Naval Operations. They 
are building, as you know, a littoral combat ship at this time. 
We are also looking at whether or not there are synergies and 
advantages to be gained, either by current designs the Navy may 
be looking at or even systems or sub-systems that we can share 
on these ships moving forward as well, sir.

               OFFSHORE PATROL CUTTER PROCUREMENT PROCESS

    Mr. Price. I do have a remaining question, which I am going 
to ask you to answer for the record, having to do with the kind 
of procurement processes that should apply to this offshore 
patrol cutter. It is not yet in design.
    I want to ask whether the committee should require the 
Coast Guard to conduct the procurement like the current fast 
respond cutter-B procurement. That is through an open 
competition. I would appreciate your views on that.
    Admiral Allen. It will be openly competed, sir.
    Mr. Price. You can assure us of that?
    Admiral Allen. Yes, sir; absolutely.
    Mr. Price. All right, well, that might make that response a 
very short one. If you have anything to add, Mr. Hutton, we 
would appreciate.
    I am going to have to call this to a halt. Oh, Mr. Farr has 
just arrived. We are at the 10 minute point. Mr. Farr, if you 
have a question to chime in, we maybe have a moment for that.
    Mr. Farr. Well, I am sure I have a question, but I cannot 
find it. [Laughter.]

                             TEAM MONTERAY

    I just want to thank you very much for your help last year 
when we were engaging in port security and Customs Border 
Patrol. I have learned a lot about the Coast Guard and the 
Pacific Coast.
    Certainly, I have put together something that might be of 
interest to you. I have a thing called Team Monteray, which is 
all the military entities that are in Monteray County. There 
are about seven of them. They have each known what others do.
    Since we got the Center for Homeland Security there and the 
Center for Post-Conflict Reconstruction; the Naval Post-
Graduate School and the Language Schools; and Perserak, which 
is the manpower development; and Fleet Numerical, which you 
work with, which gives operational weather data all over the 
world, they have all come together and realized that this 
jointness really can get a better bang for the buck for each 
one of them, and I am pleased that the Coast Guard is a member 
of that. We look forward to working with you.
    Admiral Allen. Sir, we thank you for your support. I have 
just two quick items. I did go out and address the Naval Post-
Graduate School, Homeland Security Masters Program recently.
    Mr. Farr. What did you think of it?
    Admiral Allen. It is a terrific program; absolutely 
terrific, sir.
    Mr. Price. That is the right answer, I assure you. 
[Laughter.]
    Admiral Allen. It is the truth. Also, we have come to an 
accommodation with NOAA on the former Coast Guard facility 
there. You and I had discussed that at one point, sir. I think 
we are on level ground there, moving forward, sir.
    Mr. Farr. Yes, really, I think that is just good jointness 
that makes sense.
    Admiral Allen. Yes, sir.
    Mr. Farr. All right, thank you; Mr. Chairman, I am sorry to 
come in at the very end.
    Mr. Price. That is all right. We have had a moveable feast 
this morning, with many subcommittees having hearings.
    Let me thank all of our witnesses. We appreciate the work 
you do, and we appreciate your help this morning. The 
subcommittee hearing is adjourned.
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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Ahern, J. P......................................................   441
Allen, Admiral T. W..............................................   581
Basham, W. R.....................................................    87
Caldwell, S. L...................................................   581
Flynn, Stephen...................................................   371
Garcia, Gregory..................................................     1
Hutton, J. P.....................................................   581
Jamison, Robert..................................................     1
Koch, Chris......................................................   371
Mocny, R. A......................................................    87
Oxford, V. S.....................................................   441
Stana, R. M......................................................    87
Stephan, Robert..................................................     1


                               I N D E X

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

ADDRESSING THE CHALLENGES OF PROTECTING THE NATION'S PHYSICAL AND CYBER 
                             INFRASTRUCTURE

Opening Statement of Chairman Price..............................     1
Opening Statement of Ranking Member Rogers.......................     3
Statement of Mr. Robert Jamison, Under Secretary for the National 
  Protection and Programs Directorate, Department of Homeland 
  Security.......................................................     4
Administration's Cybersecurity Initiative........................    19
The National Cybersecurity Center................................    20
Increased Funding for Cybersecurity Efforts......................    20
Privacy Considerations...........................................    21
Privacy Impact Analysis..........................................    22
DHS Role Relative to the National Cybersecurity Center...........    22
Staffing of NPPD.................................................    23
Cyber Threats....................................................    24
Cybersecurity Exercises..........................................    25
State and Local Inclusion in Cybersecurity Exercises.............    26
Qualified Staff for NPPD.........................................    26
Internet Cable Cuts and Survivability............................    27
Cybersecurity and Communications Staff...........................    28
Additional Information on the Cyber Scholars Program.............    28
Intergovernmental Relations and Communications...................    29
Interoperable Communications.....................................    31
Interoperability Grant Program...................................    32
Water Systems Security...........................................    33
Emergency Communications.........................................    35
US-VISIT Air Exit Program........................................    36
Chemical Security Regulations....................................    37
Chemical Facility Regulations....................................    37
Protective Security Advisors.....................................    40
Cyber Security Contracting.......................................    41
Qualified and Skilled Workforce..................................    42
Responding to Cyber Attacks......................................    42
Infrastructure Vulnerabilities...................................    43
US-VISIT Exit Program............................................    44
Chemical Facility Security.......................................    45
Ammonium Nitrate.................................................    46
Questions for the Record Submitted by Chairman Price.............    47
    Management...................................................    47
    Contracts....................................................    60
    NPPD Facilities and Leases...................................    64
    Risk Management and Analyses.................................    64
    Infrastructure Information...................................    66
    National Infrastructure Protection Plan Management...........    66
     Chemical Security...........................................    69
    Cyber Security...............................................    70
    National Security/Emergency Preparedness Telecommunications..    74
    National Command and Control Capability......................    75
    Office of Emergency Communications...........................    76
    e-LORAN......................................................    79
Questions for the Record Submitted by the Honorable Nita Lowey...    80
    Office of Cybersecurity and Communications...................    80
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................    82
    Cyber Security and Privacy...................................    82
    Cyber Security and Effective Metrics.........................    82
Questions for the Record Submitted by Ranking Member Rogers......    83
    Staffing.....................................................    83
    Critical Subterranean Infrastructure.........................    83
Questions for the Record Submitted by the Honorable John Carter..    86
     NCCC........................................................    86
    Cellular Technology..........................................    86

   BORDER SECURITY PROGRAMS AND OPERATIONS--CHALLENGES AND PRIORITIES

Opening Statement of Chairman Price..............................    87
Opening Statement of Ranking Member Rogers.......................    89
Opening Statement of Ranking Member Lewis........................    91
Statement of Mr. W. Ralph Basham, Commissioner, U.S. Customs and 
  Border Protection..............................................    92
Statement of Mr. Robert A. Mocny, Director, US-VISIT Program, 
  National Protection and Programs Directorate...................   103
Statement of Mr. Richard M. Stana, Director, U.S. Government 
  Accountability Office..........................................   111
SBI--Border Fencing..............................................   138
SBI--Hidalgo County..............................................   139
SBI--Brownsville.................................................   140
SBI--Local Consultation..........................................   141
SBI--P-28........................................................   142
SBI..............................................................   146
Michael Toni Death...............................................   148
Unaccompanied Juveniles..........................................   150
Canadian Border vs. Mexican Border Interdiction..................   151
LEO Status.......................................................   155
P-28.............................................................   156
SBI Goals........................................................   159
Aircraft Allocation..............................................   159
Biometrics/10 Print..............................................   161
Poe Ownership....................................................   162
National Parks...................................................   163
Cave Eradication.................................................   164
US-VISIT Program.................................................   165
Finishing Comments...............................................   170
Questions for the Record Submitted by Chairman Price.............   172
    Management...................................................   172
    Contracts....................................................   190
    Data Mining/Data Sharing.....................................   230
    Secure Border Initiative.....................................   247
    Ports of Entry--Infrastructure and Staffing..................   254
    Staffing and Related Matters.................................   255
    Border Search Authority--Screening Travelers' Electronic Data   290
    Training Needs...............................................   291
    Visa Waiver Program (VWP), IAP and Knowing Your Traveler.....   291
    Advanced Targeting System--Passengers........................   296
    Tunnels......................................................   297
    Border Safety Initiative.....................................   298
    Apprehension/Seizure Data....................................   299
    Admissibility Review Office (ARO)............................   308
    Private Aircraft and Small Boat Initiatives..................   309
    Model Port of Entry Program..................................   310
    Western Hemisphere Travel Initiative (WHTI)..................   310
    Automation Modernization.....................................   314
    Construction.................................................   315
    International Advisory Program (IAP) and Carrier Liaison 
      Program (CLP)..............................................   315
    CBP Air and Marine...........................................   318
    Merida Initiative............................................   330
    Questions for US-VISIT.......................................   331
Questions for the Record Submitted by the Honorable Chet Edwards.   335
    Information from General Aviation Pilots.....................   335
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................   336
    CBP Training for Medical Emergencies.........................   336
    Providing for Children in CBP Custody........................   340
    Attrition at CBP.............................................   345
    Smuggling of Weapons from the U.S. to Mexico.................   346
Questions for the Record Submitted by Ranking Member Rogers......   348
    Outreach to Affected State and Local Communities.............   348
    Air & Marine Operations......................................   352
    SBInet.......................................................   354
    Border Patrol Agents.........................................   358
    US-VISIT, CBP, and POEs......................................   360
    US-VISIT's Support and Operations............................   360
Questions for the Record Submitted by the Honorable Kay Granger..   362
    Time Goal for Southwest Border Security......................   362
    US-VISIT's Recently-Announced Intention for Exit Program.....   364
    Texas Border Security--Unmanned Aerial Vehicles..............   365
Questions for the Record Submitted by the Honorable John Peterson   368
    First Sale Rule..............................................   368

               CARGO CONTAINER AND SUPPLY CHAIN SECURITY

Opening Statement of Chairman Price..............................   371
Opening Statement of Ranking Member Rogers.......................   373
Statement of Mr. Stephen Flynn, Fellow, Council on Foreign 
  Relations......................................................   378
Statement of Mr. Chris Koch, President & CEO, World Shipping 
  Council........................................................   394
C-TPAT...........................................................   423
Risk Analysis....................................................   424
Targeting........................................................   426
Screening Technologies...........................................   427
Percent of Containers Screened...................................   430
International Cooperation........................................   432
World Shipping Council...........................................   435
Nuclear Waste....................................................   437
Statement of Mr. Jayson P. Ahern, Deputy Commissioner, U.S. 
  Customs and Border Patrol......................................   441
Statement of Mr. Vayl S. Oxford, Director, Domestic Nuclear 
  Detection Office...............................................   457
Secure Freight Initiative........................................   473
Budget Request Adequacy..........................................   476
Threats to Cargo.................................................   477
Threat Environment...............................................   478
Small Craft Challenges...........................................   478
Container Security Devices.......................................   480
Securing the Cities Initiative...................................   481
Closing Remarks..................................................   483
Questions for the Record Submitted by Chairman Price.............   485
    Statistics and Data..........................................   485
    Container Security Initiative (CSI)..........................   487
    9/11 Act Mandate.............................................   489
    Performance..................................................   490
    Recovery.....................................................   494
    Container/Container Security Devices (CSDs)..................   496
    Crane-Mounted Radiation Detection Technology.................   497
    Global Trade Data Exchange (GTX).............................   497
    Analysis of Shielding........................................   497
    Non-Intrusive Inspection (NII) Technology....................   498
    Automated Targeting System...................................   507
    Customs Trade Partnership Against Terrorism (C-TPAT).........   508
    National Targeting Center....................................   509
    NEXUS/SENTRI/FAST............................................   510
    In-Bond Containers...........................................   511
    Textile Transshipment Program................................   513
    Steel Tariff Enforcement.....................................   515
    Advanced Spectroscopic Portal (ASP) Monitors.................   516
    9/11 Act Mandate.............................................   519
    Analysis of Shielding........................................   520
    Management and Administration................................   521
    Research, Development and Operations.........................   534
    Systems Acquisition..........................................   552
    Securing the Cities..........................................   556
    Cost Sharing and Burden Sharing..............................   561
    International Standards......................................   564
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................   566
    Procurement of ASPs..........................................   566
    DNDO Testing Facility........................................   567
    Accelerating the Development of ASP Technology...............   567
    Container Security Initiative Operations Abroad..............   568
    West Coast Maritime Radiation Detection Project..............   569
Questions for the Record Submitted by Ranking Member Rogers......   570
    Container/Conveyance Security Device (CSD)...................   570
    International Cooperation....................................   572
    CSDs.........................................................   574
Questions for the Record Submitted by the Honorable Robert 
  Aderholt.......................................................   576
Questions for the Record Submitted by the Honorable John 
  Culberson......................................................   579
    Global Trade Exchange........................................   579

   COAST GUARD 2009 BUDGET IMPACT ON MARITIME SAFETY, SECURITY, AND 
                        ENVIRONMENTAL PROTECTION

Opening Statement of Chairman Price..............................   581
Opening Statement of Ranking Member Rogers.......................   583
Statement of Admiral Thad W. Allen, Commandant, Coast Guard......   584
    Performance of Deepwater Assets..............................   584
    Challenges Facing USCG Today.................................   585
Statement of Mr. John P. Hutton, Director, U.S. Government 
  Accountability Office..........................................   606
Financial Management.............................................   632
Financial Management Staff.......................................   634
Financial Management Plan........................................   634
Operation at San Juan............................................   635
Drug Smuggling to Puerto Rico....................................   635
Deployment of MPA Fleet..........................................   636
110-Foot Cutters.................................................   636
U.A.V. Patrols...................................................   638
Reliance on CBP for Surveillance.................................   638
Days of Leave Forfeited..........................................   639
Great Lakes Marine Safety Security Team..........................   639
Grow the Force...................................................   640
Protection of LNG Facilities.....................................   641
Protection of LNG Tankers........................................   643
Arctic Encroachment Issues.......................................   644
Governance of the Arctic.........................................   644
Drug Interdiction................................................   644
Size of USCG and Maritime Domain Awareness.......................   645
Building Out National/International System.......................   645
Dollar Operation.................................................   646
Size of USCG Force...............................................   646
GAO Review of Staff Shortages....................................   650
Small Boat Study.................................................   652
FY2009 Operational Cost..........................................   653
AC&I Budget Request..............................................   654
Polar Operations in Antarctica...................................   654
TWIC Program.....................................................   656
Polar Ice Breakers...............................................   657
Increase of Navigable Waterways..................................   658
Arctic Oil Gas Reserve...........................................   658
Ships Carrying Hazardous Cargo...................................   659
Ice Breakers.....................................................   659
GAO Recommendations..............................................   660
FRCB Independent Verification and Validation.....................   660
Marine Patrol Aircraft...........................................   661
Offshore Patrol Cutter...........................................   663
Increase of Funds for Deepwater..................................   663
Offshore Patrol Cutter Procurement Process.......................   666
Team Monteray....................................................   667
Questions for the Record Submitted by Chairman Price.............   671
    A-76.........................................................   671
    Coast Guard Academy..........................................   672
    Maritime Security............................................   673
    Environmental Operations.....................................   675
    Aquatic Invasive Species.....................................   677
    Intelligence Operations......................................   678
    Estimated Deepwater Carryover Funds..........................   678
    Status of Deepwater Oversight Initiatives....................   680
    Fast Response Cutter/Replacement Patrol Boat.................   682
    Maritime Patrol Aircraft.....................................   683
    C-130J Cost Overruns.........................................   685
    National Security Cutter.....................................   686
    Unmanned Aerial Vehicle Possibilities........................   688
    Offshore Patrol Cutter (OPC).................................   689
    Transfer of LORAN-C to NPPD..................................   689
    C4ISR........................................................   690
    Management...................................................   691
    Travel.......................................................   713
    Contracts....................................................   725
    Shore Maintenance Backlog....................................   746
    Cutter Maintenance Backlog...................................   746
    Aircraft Maintenance Backlog.................................   747
    Aids to Navigation...........................................   747
    Rescue 21....................................................   748
    Automatic Identification System (AIS)........................   749
    Operation Iraqi Freedom......................................   750
    Airspace Security Over the National Capital Region...........   751
    Research, Development, Test and Evaluation...................   751
    Military/Civilian Mix........................................   752
    Coast Guard Reserves.........................................   752
    Unobligated Balances.........................................   753
    Alteration of Bridges Program................................   762
    Other........................................................   763
Questions for the Record Submitted by the Honorable Nita Lowey...   766
    Sexual Assault and Harassment................................   766
    Port Security Grants.........................................   766
    Existing Icebreakers.........................................   767
    Leasing of Foreign Icebreakers...............................   767
Questions for the Record Submitted by the Honorable Lucille 
  Roybal-Allard..................................................   768
    Angel's Gate Lighthouse......................................   768
Questions for the Record Submitted by the Honorable Sam Farr.....   769
    NPS Intelligence Course......................................   769
    NPS and the USCG.............................................   769
Questions for the Record Submitted by Ranking Member Rogers......   771
    Operations--Personnel........................................   771
    Deepwater--Cutters...........................................   772
    Deepwater--Legacy Cutters....................................   772
    Deepwater--MPA...............................................   774
    HC-144A......................................................   775
Questions for the Record Submitted by the Honorable Robert 
  Aderholt.......................................................   776
    Narcotics Smuggling..........................................   776
    Coast Guard in Mobile, AL....................................   776
    UAVs.........................................................   777