[Senate Hearing 110-676]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-676
 
 ONE YEAR LATER: A PROGRESS REPORT ON THE SECURITY AND ACCOUNTABILITY 
                       FOR EVERY (SAFE) PORT ACT

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 16, 2007

                               __________

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

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


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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
              Jason M. Yanussi, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
   Robert L. Strayer, Minority Director for Homeland Security Affairs
                Stephen M. Midas, Minority USCG Detailee
                  Trina Driessnack Tyrer, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     4
    Senator Akaka................................................    12
    Senator Coleman..............................................    14
    Senator Carper...............................................    33

                               WITNESSES
                       Tuesday, October 16, 2007

Hon. Stewart A. Baker, Assistant Secretary for Policy, U.S. 
  Department of Homeland Security................................     6
Reginald I. Lloyd, U.S. Attorney, District of South Carolina, 
  U.S. Department of Justice.....................................    20
Stephen L. Caldwell, Director, Homeland Security and Justice 
  Issues, U.S. Government Accountability Office..................    22
Captain Jeffrey W. Monroe, Director, Department of Ports and 
  Transportation, City of Portland, Maine........................    25

                     Alphabetical List of Witnesses

Baker, Hon. Stewart A.:
    Testimony....................................................     6
    Prepared statement...........................................    37
Caldwell, Stephen L.:
    Testimony....................................................    22
    Prepared statement...........................................    53
Lloyd, Reginald I.:
    Testimony....................................................    20
    Prepared statement...........................................    46
Monroe, Captain Jeffrey W.:
    Testimony....................................................    25
    Prepared statement...........................................   102

                                APPENDIX

Posters submitted for the Record from Mr. Baker..................   106
Letter dated October 1, 2007, from Ryozo Kato, Ambassador of 
  Japan, submitted for the Record from Senator Lieberman.........   111
Responses to Questions for the Record from:
    Mr. Lloyd....................................................   113
    Mr. Caldwell.................................................   114
    Captain Monroe...............................................   115
    Mr. Baker....................................................   116


 ONE YEAR LATER: A PROGRESS REPORT ON THE SECURITY AND ACCOUNTABILITY 
                       FOR EVERY (SAFE) PORT ACT

                              ----------                              


                       TUESDAY, OCTOBER 16, 2007

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:02 a.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Akaka, Carper, Collins, and 
Coleman.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning, and thanks to everyone 
for coming to our hearing. We are here in our Committee's 
traditional role of oversight of government to evaluate the 
state of the Nation's port security 1 year after Congress 
passed, and the President signed into law, the bipartisan SAFE 
Port Act. We are here both in terms of our traditional Homeland 
Security and Governmental Affairs Committee's role of 
oversight, but also obviously as part of our responsibility to 
protect the security of the American people here at home.
    In that regard, it is very satisfying to be able to say--
and I believe our witnesses will corroborate--that 
implementation of the SAFE Port Act over the past 12 months has 
brought not just focus and energy to the mission of building a 
robust security regime domestically and abroad, but also a 
demonstrable improvement in port security. That is very 
important to our overall homeland security.
    In August, the Government Accountability Office (GAO) rated 
the progress with which the Department of Homeland Security was 
fulfilling its core missions. I suppose as the old joke goes, 
there was bad news and good news here. GAO did report that the 
Department had made ``substantial'' progress in just one of the 
14 categories they mentioned, though there was some progress in 
some of the others. But the good news this morning is that the 
one area in which GAO reported substantial progress was 
maritime security. And there can be no doubt--there certainly 
is not in my mind--that the SAFE Port Act contributed to that 
high ranking. The GAO evaluation was especially good news given 
the challenges of securing our ports and the critical 
importance of doing so.
    Since aviation security was dramatically improved after 
September 11, 2001, the experts have told us that terrorists 
may turn to the more vulnerable maritime sector to smuggle 
people into the United States or, obviously, to bring weapons 
into this country. Ninety-five percent of our international 
trade flows through the ports. In the post-September 11, 2001, 
era, we must provide sufficient security without interrupting 
what has been our normal emphasis with regard to the ports, 
which is the smooth flow of commerce. The GAO report, I think, 
relieves some of the concerns that we have had about this with 
regard to the ports. So it is good news.
    Now, does this mean we can step back and relax? Obviously 
not. Twenty-one thousand containers enter American ports every 
day. We are still physically inspecting just 5 or 6 percent of 
them, and there are other threats from the sea that we are only 
beginning to think about. For example, the Department of 
Homeland Security recently began a pilot project to detect 
radiation from small vessels entering our vast coastal waters 
outside of the major flow of commerce through established 
ports.
    From my perspective, I think we have to continue to pay 
particular attention to five key areas as we go forward from 
the higher plateau we have achieved for port security to 
improve our maritime security overall. And, briefly, those five 
are:
    First, the Secure Freight Initiative--the pilot program 
that was set up at three major foreign ports to test the 
feasibility of 100-percent scanning of cargo headed for the 
United States. Now, I want to clarify something because the 
terminology here can be confusing. I said earlier that only 5 
to 6 percent of the containers coming in are inspected. 
Scanning uses imaging technology to identify the contents of 
the container. So the goal of the Secure Freight Initiative was 
to test the feasibility of doing 100-percent imaging of all 
containers, 100 percent, to identify their contents.
    The program was established by legislation, I am proud to 
say, that emanated from this Committee on which Senator Collins 
played a leading role. It has been implemented over the past 
year, and I think we can begin to draw some conclusions about 
its effectiveness. So today we will want to ask: Are foreign 
ports capable of this kind of blanket scanning? How is the 
requirement affecting the flow of commerce and at what cost? 
What are its limitations? Who conducts the scanning? And what 
checks are in place to ensure it is, in fact, a secure 
operation?
    Just this August, Congress enacted the second phase of our 
post-Sepember 11, 2001, reforms, again, based on legislation 
that we reported out of this Committee. The bill includes a 
provision calling for 100-percent cargo scanning by 2012, that 
is, of all cargo. We need to know if we are on the right track 
to achieve that, and the pilot programs and evaluations 
required by the SAFE Port Act will certainly help steer the 
Department toward achieving that goal.
    Second, it is time to assess the effectiveness of the 
Container Security Initiative (CSI) and the Customs-Trade 
Partnership Against Terrorism (C-TPAT). These two programs were 
established by the Department of Homeland Security in 2002 to 
screen--that is, to examine the paperwork describing the 
cargo--high-risk containers at overseas ports and, in concert 
with the private sector, to track containers as they traverse 
the oceans toward our ports. Three years later, we need to 
determine whether these two programs have, in fact, helped to 
ensure the global supply chain is secure and create an 
expedited shipping process--or so-called GreenLane--into the 
United States.
    Third is the TWIC program, which stands for Transportation 
Worker Identification Credential--which is critically important 
to the security of our ports. The development of a Federal 
credential for all U.S. port workers, which would seem to be a 
natural, fundamental requirement for security, just as we have 
tried to impose in other areas of transportation, has been 
frustrated by technological and logistical problems. 
Approximately three-quarters of a million port workers need to 
be credentialed by a September 2008 implementation deadline. So 
we all want to know if this program, including an adequate 
appeals process, will be able to process all those individuals 
by then and still keep our ports running.
    Fourth, we need to ensure that we are on schedule to create 
interagency operations centers at our major ports as required 
by the SAFE Port Act. These centers are designed to improve the 
collection and sharing of maritime security information at 
local ports as well as to coordinate among Federal, State, and 
local partners. So far, actual centers have been set up in 
Charleston, South Carolina; San Diego, California; and Miami, 
Florida; and a virtual center exists at the port of New York. I 
will report that my staff has toured the operation center in 
Charleston and was impressed by the information sharing and 
coordination going on among the Department of Homeland Security 
personnel, Department of Justice personnel, and State and local 
officials. But I will have some questions about that program.
    Fifth, and finally, I want to draw attention to the work of 
the Domestic Nuclear Detection Office (DNDO), which was created 
by President Bush in 2005 and formally authorized by Congress 
under the SAFE Port Act. DNDO's purpose is a critical one, 
which is to develop, test, evaluate, and deploy a nuclear 
radiation detection architecture across this Nation, including 
at our major ports, in order to prevent the nightmare scenario 
of a smuggled nuclear or radiobiological device--a so-called 
dirty bomb. Secretary Chertoff has said that the prevention of 
a nuclear or dirty bomb detonation is, in his opinion, the 
Department of Homeland Security's number one priority, which 
means that successful deployment of the radiation detection 
monitors must be the single most important immediate task that 
the Department of Homeland Security has.
    We have been conducting, and will continue to conduct, 
careful oversight of this project because these radiation 
portal monitors absolutely must work. Success obviously will 
depend upon the effectiveness of the technology, but DNDO must 
also work closely with Customs and Border Patrol to ensure that 
there is a seamless hand-off from one agency to the other.
    Bottom line, both the GAO report on maritime security, 
which had a lot of good news about progress made, and even 
these five areas in which I and other Members of the Committee 
will have questions nonetheless showed that there has been an 
enormous amount of activity that has gone on since September 
11, 2001, to secure our ports and the rest of our homeland from 
a potential terrorist attack. And it is why we say with some 
confidence that America is a lot more secure today than it was 
on September 11, 2001, although we all agree that we are not as 
secure as we want to be. The fact that there has not been, 
thank God, another terrorist attack on the United States is, of 
course, in part good fortune, but it is also because we have 
raised our guard, both through the Department and through the 
reform of our national intelligence agencies.
    So it is in that combined sense of gratitude and shared 
understanding that we have a lot of work to do that I welcome 
the witnesses today, particularly Assistant Secretary Stewart 
Baker, who has worked very closely with this Committee and who 
has been a key figure in determining the direction of a number 
of the port security programs that we will discuss today.
    I cannot resist saying, Secretary Baker, that I look 
forward to the day, hopefully not too far away, when I can 
greet you as the Under Secretary for Policy, not just the 
Assistant Secretary. As you know, we remain supportive of the 
efforts of the Department to elevate your position to that 
level of Under Secretary, and I will continue to do all I can 
to assist in that endeavor. Thank you.
    Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman, and thank you for 
holding this important hearing today.
    Just a year ago, the SAFE Port Act was signed into law. As 
the Chairman indicated, I was the co-author of this 
legislation, along with the Chairman, Senator Murray, and 
Senator Coleman, who did extensive work on this issue as well 
in his capacity as Chairman of the Permanent Subcommittee on 
Investigations.
    This law was a necessary response to our heightened 
security concerns. As the Chairman indicated, about 95 percent 
of our foreign trade enters the United States through our 
seaports, including more than 11 million containers a year. 
Ports are tempting targets for those trying to move explosives, 
biological and chemical toxins, radiological and nuclear 
weapons, or even terrorists themselves into our country. In 
fact, each of these containers has the potential to be the 
Trojan Horse of the 21st Century. An attack on one of our ports 
could cause tremendous loss of life and damage to critical 
infrastructure. It also could have a devastating effect on our 
entire economy--disrupting commodity shipments, material for 
manufacturers, and products headed to market. The SAFE Port Act 
addresses these vulnerabilities.
    Soon after the Act's signing, the Department of Homeland 
Security began implementing its port security enhancements. The 
Act strengthened two important programs: The Customs-Trade 
Partnership Against Terrorism (C-TPAT) program and the 
Container Security Initiative (CSI).
    C-TPAT requires importers to adopt security enhancements in 
exchange for fewer inspections and, when warranted, prioritized 
inspections. A recent survey of C-TPAT members demonstrated 
that after joining the program, they doubled their average 
expenditures on supply-chain security. This is clear evidence 
that this program is working.
    CSI places U.S. Customs inspectors in foreign ports to 
target high-risk cargo and to ensure that it is inspected 
before heading to the United States. In the last year, DHS has 
continued to expand that program strategically and now has 
inspectors in 58 foreign ports that account for 85 percent of 
cargo shipped to the United States.
    Here on American soil, DHS also has installed more than 
1,000 radiation portal monitors at critical seaports and land 
ports of entry to detect radiation before containers are 
allowed to enter the domestic supply chain. As required by the 
Act, by the end of this year, DHS will scan at least 98 percent 
of cargo for radiation at our major seaports.
    DHS has also established the Secure Freight Initiative to 
develop and test integrated scanning systems that combine 
radiation-detection equipment and non-intrusive X-ray machines 
in seven foreign ports. Three of these ports--in Honduras, 
Pakistan, and England--will scan 100 percent of their U.S.-
bound cargo, which will allow us to evaluate the technological 
and other challenges. This will fulfill the law's requirement 
for pilot projects in three foreign ports.
    Beyond that statutory requirement, limited operational 
testing will take place in four other foreign ports. This 
testing will provide us with important information to help 
address the technical and logistical challenges associated with 
larger and more complex ports. Until this technology is proven 
through these pilot projects, I continue to believe that 
requiring the scanning of all cargo bound for the United States 
at every foreign port is misguided. It is contrary to the whole 
risk-based, layered system of security that was established by 
the SAFE Port Act, which required a focus on high-risk cargo 
and implemented a requirement for 100-percent scanning of all 
cargo designated as high risk.
    The SAFE Port Act also authorized $400 million in port 
security grants for 5 years, totaling $2 billion. As we will 
hear this morning from Captain Jeff Monroe, the Director of 
Ports and Transportation in Portland, Maine, this funding has 
already produced significant improvements to the security of 
our ports. It is important that Congress took this multi-year 
approach because it will allow our ports to pursue multi-year 
security projects.
    I am also pleased that DHS met the July deadline for 
issuing a Strategy for Enhancing International Supply Chain 
Security. This strategy document addresses all aspects of 
container security, from the packing at a foreign plant, to the 
arrival at a U.S. port, to the entrance into the national 
transportation system, to its destination at a retail business 
or manufacturing plant.
    I am, however, concerned and share the concerns of the 
Chairman that there is a key aspect missing from this strategy, 
and that is that it does not detail how the private sector will 
be involved in responding to and recovering from a port 
security incident. Since port terminals and the relevant 
recovery equipment are almost entirely in the hands of the 
private sector, I believe this is a significant omission.
    Another area where I am concerned that DHS has not made the 
progress we would like is in the area of the TWIC card, as the 
Chairman has indicated. It is obviously critical that we know 
who is gaining access to secure areas of our ports, and many 
deadlines have been missed with regard to the TWIC program. Ten 
ports were supposed to be online by July of this year. That 
deadline obviously has not been met. And the first enrollment 
center for TWIC cards has only been open today, in Wilmington, 
Delaware. Although DHS has announced that 12 enrollment centers 
will be operational this year, the Department will almost 
certainly miss the January 2008 deadline for TWIC 
implementation at another 40 ports.
    This also raises very practical questions for those serving 
in the merchant marine, for those working at our ports, as far 
as how they are going to be able to comply with the mandates in 
the law requiring their enrollment if DHS does not yet have the 
infrastructure up and running.
    Nevertheless, I certainly agree with the GAO, with the 
Chairman, and with other experts that the Department has made 
significant progress in improving security at our Nation's 
seaports and at foreign ports as well.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Collins. Thanks for 
that very thoughtful statement.
    I want to thank our colleagues Senator Akaka and Senator 
Coleman for being here. We will now go to Mr. Baker.
    Mr. Baker, thanks for being here. You have had quite a 
distinguished career in public service, most recently in this 
position since October 7, 2005. We appreciate that you are here 
today, and we look forward to your testimony.

TESTIMONY OF HON. STEWART A. BAKER,\1\ ASSISTANT SECRETARY FOR 
          POLICY, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Baker. Thank you, Chairman Lieberman and Ranking Member 
Collins, Senator Akaka, and Senator Coleman. It really is a 
pleasure to be here on the anniversary of the SAFE Port Act, 
particularly because this is an Act that is so typical of this 
Committee's work--bipartisan, overwhelmingly approved, a doable 
set of challenging but achievable goals set, and something that 
we have been implementing with enthusiasm since the SAFE Port 
Act passed.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Baker appears in the Appendix on 
page 37.
---------------------------------------------------------------------------
    Overall, I would say, as the Chairman said, we have done 
relatively well in implementing the Act, though there are 
plenty of challenges ahead. By our count, there were over 100 
mandates in the SAFE Port Act. Almost 50 of them are now 
completed, again, by our count. And of the remainder, the 
overwhelming majority are on track, on schedule, and we expect 
to be able to complete them.
    The kinds of things that we have managed to do, you touched 
on some of them. The Secure Freight Initiative pilots are up 
and running, and we are gathering information today about how 
to actually implement a 100-percent scanning and a 100-percent 
radiation monitoring check on all of the freight bound for the 
United States. That is going to teach us a great deal about the 
much bigger challenge that we have ahead as we expand that to 
other ports.
    Our foreign port assessments, security assessments, are now 
being performed on a 2-year schedule. We have caught up and 
expect to be able to do all of our foreign port assessments on 
the schedule that the statute mandates. Ninety-eight percent of 
the containers that now come into our ports will be put through 
radiation portal monitors. And as Senator Collins said, we have 
put out a national strategy for the supply chain security, and 
I will be glad to talk shortly about the resumption of trade 
protocols.
    All that said, there are some challenges that we face and 
deadlines that we have not met, and I would not want to open 
this testimony without acknowledging those difficulties. Before 
I talk about the specifics, I would like to put one image in 
your head. Imagine the entire Mall from here to the Lincoln 
Memorial covered in containers two or three stories deep. Every 
day in this country, we have to fill them all two or three 
times over and then empty it again and fill it up the next day 
and empty it again. That is the number of containers that come 
into the country each day. We have to make sure that those 
containers continue to flow to meet the essential demands of 
our commerce. That is the first thing that we have to deal 
with.
    The other two issues that I think have influenced our 
ability to get done everything that we wanted to get done is 
the fact that, as I think I said in the testimony, there are a 
couple of things you cannot rush. Technology, especially if you 
are trying cutting-edge technology, needs to be implemented 
step by step, and you have to recognize that from time to time 
you have to take a step back or two in order to meet the 
requirements of the technology and to make sure that it 
actually functions as is necessary, particularly in contexts 
where people's livelihoods, their ability to meet contracts, 
depend on the smooth flow of traffic.
    And the other thing that cannot be rushed is diplomacy. Not 
every country puts the same priority we do on checking cargo. 
Not every participant in the trade has the same enthusiasm for 
additional security measures that we have. And we need to be 
able to persuade shippers and importers and foreign governments 
that it is in their interest to cooperate with our security 
measures. We have made great progress in doing that, but at 
every step of the way, we have to make that case, and sometimes 
it takes longer to make that case than we would like.
    Briefly, I will talk about some of the areas where I think 
we still have work to do. As you said, the Transportation 
Worker Identification Credential is a very complex undertaking 
that is behind schedule by some months. It is probably the most 
sophisticated biometric credential that anyone has tried to 
introduce in the entire industry. These cards have to be 
capable of being read not just at one port but at many ports. 
Unpredictably, people may move from one port to another. They 
all have to be able to get into the port quickly and smoothly.
    We pioneered some standards in constructing the TWIC 
system, and in a few cases, we pioneered what turned out to be 
the Beta videotape system, which slowed us down a little, but 
we are now implementing under a standard that is supported by 
the National Institute of Standards and Technology and which we 
think will be a very effective mechanism for identifying people 
as they enter on our ports. And as both Senators I think 
indicated, we have begun enrolling people at the first port of 
Wilmington today, and we will be moving on to begin enrollment 
at Corpus Christi and then Baton Rouge, Honolulu, Oakland, 
Tacoma, Beaumont, and port after port.
    We do believe that we can get everyone enrolled by 
September, and while that will be a challenge, so far things 
have gone smoothly, and we believe that the system we have in 
place will produce enrollments and the issuance of cards in 
that period of time.
    We still have work to do to get the readers up and running. 
We have begun pilots to make sure that those readers are 
actually functioning in some very demanding environments--New 
York, Long Beach, Los Angeles. And, again, we are proceeding 
step by step. In a few cases, we have had to take a step or two 
back in order to make further progress. But I see no show 
stoppers in our rollout of TWIC. We may have to slow down if we 
encounter problems. I am always aware that for three-quarters 
of a million people or more, the most important thing in their 
life after their families is getting up and going to work at a 
port. And we cannot get in the way of their ability to earn a 
livelihood unless they actually pose a security risk. So we are 
bearing that in mind. It is a constant concern.
    Two other challenges, and, again, you have touched on both 
of them. Our pilot programs to test 100-percent scanning are up 
and running. We are learning a lot, and the lessons for that 
are going to be enormously valuable as we try to meet the 
statutory requirement of achieving 100-percent scanning.
    I, too, am daunted by the prospect of 100-percent scanning 
in every port. We will pursue that aggressively. It is a 
statutory mandate, and we believe that we can make a big dent 
in that and perhaps achieve it if everything goes right. But 
there are many unknowns there, and our pilots are showing us 
how complex the challenge is, even as they show us some 
successes.
    And, finally, the container security device issue is 
something that we are looking at quite closely. We have been 
slow to release a requirement for the adoption of container 
security devices, either as a requirement generally or as a 
requirement for membership in the top tier of C-TPAT. They are 
a very interesting technology. They tell us something 
important. They tell us whether the doors have been opened in 
the traditional way. They do not tell us whether a container's 
security has been breached because there are many ways to 
breach the security of the container. But they do tell us when 
the doors have been opened, and they have value in particular 
in areas where we know the container was secure at Point A, and 
it has now been moved to Point B, and we want to know whether 
the doors have been opened. If there was no reason for those 
doors to be opened, then the container security device can tell 
us something very valuable.
    We are still trying to determine what part of the trade, 
what part of the supply chain it makes most sense to use that 
particular technology in. And we are working on standards and 
also coming up with scenarios and places where we can test 
those container security devices. And I expect to have that 
done in the next few months so that we can actually begin some 
testing in the real world of these container security devices.
    I want to thank the Committee. All of these challenges are 
going to be difficult ones, but this is a Committee that has 
been supportive and understanding as well as demanding as we 
have tried to meet those requirements. And I look forward to 
talking to you as we continue to do that.
    Chairman Lieberman. Thanks very much, Secretary Baker. We 
will do 7-minute rounds of questioning.
    Let me begin with a baseline question to you and ask for a 
relatively brief response because you could go on all morning.
    We are asking you to do a lot to secure our ports. We are 
asking private sector participants to spend a lot of money, as 
has been said this morning, to better secure our ports. Is it 
worth it? In other words, have we made a correct judgment or is 
this, as every now and then I hear somebody suggest, an 
overreaction to September 11, 2001?
    Mr. Baker. I think it has been worth it so far. We faced 
the prospect on September 12, 2001, that someone who had a 
nuclear weapon or a serious weapon of any sort could simply use 
our supply chain to deliver it within a block of where they 
wanted it to go off and do so from virtually any country in the 
world.
    Chairman Lieberman. Right.
    Mr. Baker. It is very difficult for that to happen. No 
terrorist organization can have confidence that they can use 
our supply chain against us now. And that is a very important 
step forward.
    Chairman Lieberman. I appreciate the answer. Of course, I 
agree with it. And also, as I mentioned in my opening 
statement, I appreciate that the Department is now beginning to 
not only think about but deploy detection devices aimed at 
stopping both terrorists and weapons from coming into areas of 
our coastal waters that are not really ports. We are blessed 
with a large country with enormous coastal areas, and so there 
is a natural way--this is the old question that the 9/11 
Commission talked about--a failure of imagination before 
September 11, 2001, to imagine that people could do this.
    So as we close and secure our ports, there is a temptation 
for a terrorist to try to bring devices in elsewhere. And I 
appreciate very much that the Department has moved to that area 
as well.
    I want to go to the SAFE Port Act, which, as you have 
indicated, required the Department to implement a pilot program 
to scan all cargo containers within a year. Just this past 
Friday, DHS announced that the Secure Freight Initiative pilot 
begun last December is now fully operational, scanning 100 
percent of the containers at the three main ports selected as 
required by law. They are Southampton Container Terminal in the 
United Kingdom, Port Qasim in Pakistan, and Port Cortes in 
Honduras. I know that you are working on an additional pilot 
program at four additional ports, though in a more limited 
capacity.
    The initial report to Congress evaluating lessons derived 
from the pilot program is not due for another 6 months, but I 
want to ask you this morning if you or the Department has 
already been able to learn some things from the pilot since the 
scanning at the three ports has been going on for several weeks 
now. So that is my question. What, if anything, can you say are 
the lessons learned thus far from the pilot?
    Mr. Baker. I would be glad to address that. If you would 
give me a little bit of time, I can actually do a show-and-
tell, because I think one of the most useful things that we 
have encountered is that we have actually begun to bring back 
integrated data that pulls together the information that we are 
getting from the trade about the container and the scan and the 
radiation portal monitor so that we can display them in one 
place for analysts to say, looking at this entire package, am I 
concerned enough to stop them and ask for further security 
measures. I put up on the easel----
    Chairman Lieberman. This was not pre-rehearsed.
    Mr. Baker. No, it was not.
    Chairman Lieberman. OK.
    Mr. Baker. But when I saw what we were getting, I said that 
the Senators would want to see this.
    Chairman Lieberman. Are these at terminals at the ports or 
back here in Washington?
    Mr. Baker. Both.
    Chairman Lieberman. Both? Great.
    Mr. Baker. So this is actually what is seen by an analyst 
here in our National Targeting Center in Virginia for a 
shipment from Qasim to the United States.\1\ And I cannot 
resist using my laser, but this is the X-ray, the scan of the 
contents of the container.
---------------------------------------------------------------------------
    \1\ The poster referenced by Mr. Baker appears in the Appendix on 
page 106.
---------------------------------------------------------------------------
    Over here you can see the description--you cannot read it, 
I do not think, but----
    Chairman Lieberman. We have copies up here.
    Mr. Baker. OK. So you see that there is a description of 
the container, it is sheets, and----
    Chairman Lieberman. Pillowcases.
    Mr. Baker. Yes. So if we saw one big, large, dark object in 
the scan, we would say, ``Well, that does not look like a sheet 
or a pillowcase to me.'' And then below you can see the results 
of the radiation scan, which does not get above a level that 
would lead to an alarm. And all of this is available, plus 
additional information on the additional tabs that you can see 
along the top here that the analysts can call on to further 
investigate if there is something that leads them to want to 
know, Well, what could that object be that I am seeing on the 
scan?
    So it is a very effective IT integration program that is 
already in operation, and I am actually quite pleased. IT 
integration always sounds like a great idea, and it often is 
much harder to do than you expect. And the fact that we have 
been able to do it as quickly as this I think makes us feel 
more comfortable about our ability to do this more generally as 
we move to broader scanning. There are other successes. I think 
traffic is moving fairly well, but I would suggest that we wait 
until we have had a longer period of evaluation to say that we 
think we can move the traffic smoothly.
    Chairman Lieberman. Thus far, any unexpected advantages or 
unanticipated negative consequences or challenges?
    Mr. Baker. One of the interesting questions is how do 
people who are actually shipping goods feel about this, and I 
think very early reads suggest a wide variety of reactions. In 
Pakistan, there are apparently shippers who prefer now to ship 
from Qasim, where we have this facility, as a way of reducing 
the likelihood that they will be stopped in the United States. 
But in Cortes, we have heard reports that some people are 
moving their shipment to other ports because there is a charge 
that goes with this and they want to avoid the charge. So I 
think that suggests that this is going to be a very complex set 
of effects when we begin rolling this out more broadly.
    Chairman Lieberman. Thanks. My time is up. Senator Collins.
    Senator Collins. Thank you.
    Secretary Baker, I want to follow up on the issues with the 
TWIC card. In his testimony later this morning, Captain Monroe, 
the Director of Ports for Portland, Maine, will make the point 
that the aviation system was able to clear and credential 
hundreds of thousands of workers in a relatively short time. 
And that was a point that was made to me by a group of airport 
directors from around the country.
    Now it appears that we are going to two separate systems 
for aviation versus our ports, and 6 years after the attacks on 
our country, in contrast to the aviation system, we still do 
not have the TWIC card in place.
    Why not look at piggybacking onto the system that has been 
used successfully by our airports? And why not have one system 
so that individuals do not have to get multiple credentials?
    Mr. Baker. I think those are fair observations, and we have 
looked at the possibility and I think will look if we run into 
trouble again at the possibility of changing our approach now.
    Our general belief in this circumstance has been that, 
first, the amount of cross traffic between the airports and 
ports has been relatively limited. The port problem turns out 
to be much more complicated in many respects than the airport 
problem because in most cases airport workers work at one 
airport, whereas with ports you have truck drivers, in 
particular, and sometimes longshoremen who will move from port 
to port, who will do work at different ports, and who need to 
be credentialed to what amount to very decentralized systems. 
One port does not have to have an infrastructure connection to 
another port. But we need to be able to credential people in 
ways that allow them to be admitted to one port relatively 
easily if they happen to move from another.
    That has accounted for some of the differences in approach 
and, I have to say, some of the complexity of the credentialing 
task--that plus the fact that we are doing a fairly elaborate 
set of biometrics in an environment that is less controlled and 
more hostile. There is more humidity and more salt in the air 
at our ports, and we are trying to get more people through with 
many fewer of our white-collar workers than in an airport 
context.
    I think those account for the differences. That is not to 
say that in the long run we would not want to bring the 
programs closer together, or if we have bad luck with the 
program, which we currently believe is on track, we would go 
back and look at it. But at this point, we have a rollout 
strategy. We have a set of technology standards. People are 
enrolling and building the cards. I think it would set us back 
if we tried to switch gears again.
    Senator Collins. I am very concerned not only about the 
homeland security aspects of dangerous materials coming into 
this country, but also about the impact on consumers. All of us 
are very aware of the recalls of dangerous toys from China and 
other products that have made the news recently. And it seems 
to me that the Department of Homeland Security has an important 
role to play in protecting consumers from dangerous products as 
well as protecting all citizens from possible terrorist 
attacks.
    For more than a year, the Department has stated its 
intention to issue a rule that would require importers to 
provide additional information before products are loaded onto 
vessels overseas. And DHS already uses some of that information 
as part of its automated targeting system. But one of the 
pieces of information that would be required under the proposed 
rule is the manufacturer's name and address, and I am concerned 
about the vulnerability posed by the delay in requiring that 
information, not only because of its impact for helping you to 
target high-risk cargo, but also because it would allow Customs 
and Border Protection to target untested manufacturers who may 
be shipping potentially dangerous consumer products, including 
children's toys. It would allow CBP to do additional safety 
screening if it knew that it was dealing with either unknown 
manufacturers that are not trusted yet or those with a history 
of violations.
    Could you tell the Committee when you expect that this 
rule, which is referred to as the ``Advanced Trade Data Element 
Rule,'' which will require more information about the 
manufacturer, will be published?
    Mr. Baker. Thank you, Senator. Let me start by saying I 
completely agree with you about the importance of this rule. It 
is a valuable part of our effort to push our borders out and to 
try to catch suspect cargo before it gets close to our ports. 
And having this kind of information, some of which we get now 
but which we are not guaranteed to get, in a way we can count 
on is an enormously valuable part of our strategy.
    At the same time, it is a new regulatory burden on 
importers and shippers, and it requires them to make changes in 
their information technology systems and to get the information 
to us. And so as I said at the start, it is important for us to 
do our diplomacy and to make sure that we have persuaded people 
that this is a reasonable requirement. We have been working 
with the trade for some time, and I think that generally the 
trade has acknowledged that of all of the security measures 
that we are working on now, this is probably the least 
expensive and the most valuable to us. We currently expect to 
get that rule to the Office of Management and Budget within 2 
weeks. That is our target. It is one of our top 10 priority 
regulations to get done in the next year because of its value 
for a screening program that will allow us to do 100-percent 
screening in an effective way.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks, Senator Collins. Senator Akaka.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I want to 
commend you and the Ranking Member for working to improve our 
port security in our country and in other countries as well. I 
cannot emphasize enough that Hawaii's port system is critical 
to the economic life and health of my State, as you know. We 
depend entirely on the ocean shipping industry to import 
essential commodities. Any interruption in commerce, of course, 
would certainly hurt Hawaii. So I welcome this opportunity to 
hear your testimony and to ask you questions about our port 
security act.
    Mr. Baker, we have heard today about the progress made by 
DHS in implementation of provisions of the SAFE Port Act. Last 
week, the Commerce Committee heard similar things. However, I 
am concerned that a number of important policy issues have not 
been adequately discussed or decided yet. These policy issues 
have held up progress in many fronts, and I am glad you 
mentioned the workforce.
    With regard to TWIC, it is my understanding that the 
manufacturers of card readers do not have access to actual TWIC 
cards. They will only be available to maritime industry 
employees. If they do not have access to those cards, they 
clearly cannot test the readers.
    Mr. Baker, will DHS make TWIC cards available to the card 
reader manufacturers so that they can properly implement their 
testing?
    Mr. Baker. I am not familiar with that concern, but I 
frankly share your puzzlement. We are in the process of 
enrolling people today. We will then begin issuing cards very 
shortly thereafter so that there will be cards available to 
workers within a month. And there should not be any reason why 
we cannot test the readers with real cards.
    So I am not familiar with any reports that would suggest 
that the reader manufacturers are not able to test the cards 
now because the cards are going to be in production 
momentarily.
    Senator Akaka. I see. And the importance of that, of 
course, is the Transportation Worker Identification 
Credentials.
    Mr. Baker. Absolutely.
    Senator Akaka. An important issue is whether or not the 
Coast Guard also, Mr. Baker, will require a 100-percent 
biometric identification rate. Many in the industry have 
emphasized the need to use biometric identification all the 
time because if someone loses his or her TWIC card, anyone can 
pick it up and use it since there will no longer be guards 
physically present to verify the picture or the card. Right 
now, the Coast Guard policy is to use biometric identification 
only at high-risk ports or when there is an elevated MARSEC 
level. In addition, these systems are also costly to the ports. 
If they are not used 100 percent of the time, it would be 
difficult for the ports to justify spending the money to build 
the infrastructure when they could be using it for something 
else.
    So can you tell me the rationale for not using biometric 
identification 100 percent of the time?
    Mr. Baker. We certainly have designed the cards so that 
biometrics are the standard, and it is possible to use the 
cards with a biometric at all times. And it would be my 
expectation that would be the norm. I am always wary of saying 
anything will be 100 percent because you have to account for 
unusual circumstances, and, again, we do not want to be in a 
position of saying no one works today because the biometric 
system is down, particularly if you have got back-ups that 
include such things as PIN numbers that would allow people to 
verify that they actually have unique knowledge that cannot be 
obtained by someone just picking up a card on the ground.
    So I am cautious about saying it should be 100 percent, but 
it is our expectation that the norm will be biometrics.
    Senator Akaka. An outstanding policy that DHS has not yet 
made is related to the use of positive access control. The use 
of positive access control could have implications for the 
cruise industry as well, a big part of Hawaii's tourism sector. 
Cruise terminal porters must move passengers' bags in and out 
of secured areas quickly. The need to scan them into and out of 
secured areas could impact how quickly and how efficiently they 
can do their jobs. In fact, the aviation industry, also a very 
high-risk transportation sector, does not require positive 
access control. Instead, they use a visual challenge program 
instead.
    With this in mind, Mr. Baker, when do you expect DHS to 
make a decision regarding the use of positive access control at 
the ports?
    Mr. Baker. Well, I think this ties back to my earlier 
suggestion that it is always dangerous to say this will be 100 
percent. There may well be circumstances where you need to be 
able to make an accommodation so that people can move quickly 
back and forth across the line and not have to stop and do the 
biometrics at every stage. We would not say we have rejected 
that out of hand. There may be circumstances where that will be 
necessary to do. But I do not want to prejudge that. That is 
the sort of thing that ought to be decided with the captain of 
the port as part of a security plan for the entire port.
    Senator Akaka. You mentioned that on scanning containers 
you have already come to 98 percent. What is the 2 percent?
    Mr. Baker. The 2 percent, generally, is ports that are so 
small that containers rarely come through and it does not make 
sense to have a portal sitting there like the Maytag repairman 
waiting for somebody to go through.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Akaka. And, of course, 
that 98 percent is for radiation.
    Mr. Baker. It is.
    Chairman Lieberman. Right. Senator Coleman.

              OPENING STATEMENT OF SENATOR COLEMAN

    Senator Coleman. Thank you, Mr. Chairman, and I would also 
like to associate myself with the preliminary comments of the 
Ranking Member, particularly in regard to the pilot programs 
and the prospect of 100-percent screening. We all want to get 
there. We want to get a system that works. I think as you said, 
you cannot rush implementation and new technology. We need to 
rush, but it does need to work. I am very interested in looking 
at the results from the pilot projects, but I just want to put 
myself on record as being in accord with the Ranking Member.
    On the pilot programs, have we been experiencing any 
bottlenecks, any slow-ups in any of what we have seen to date?
    Mr. Baker. In general, we have not had too many slow-ups. 
We have had weather-related surprises. It gets very hot in 
Pakistan, well over 110 degrees, and that has caused some 
surprises with the gear. We have had cloudbursts in Honduras 
that have caused difficulties with the scanning machines. So we 
have certainly had surprises. But on the whole, the layouts, 
while they have been different in every port, have allowed us 
to move people pretty well.
    Senator Coleman. Do you anticipate if we move to higher-
volume ports that we would have the same kind of results on the 
issues here?
    Mr. Baker. No. As people in the Coast Guard keep reminding 
me, if you have seen one port, you have seen one port. 
[Laughter.]
    The layouts are completely different at every one of these 
ports, and how they have squeezed in all of the equipment 
varies from place to place. And in some cases, it is an 
elaborate ballet that you have to perform to get your goods 
through the lanes.
    As soon as you go from one lane to multiple lanes--and some 
of the ports have 40 or more lanes--it becomes much more 
complex to do the scanning and the portal monitor checks. And 
even more difficult is transshipment because in some cases you 
have cranes just picking the container up and moving it 
directly from one ship to another. It is not clear where you 
are going to do your scanning and your screening on those 
containers.
    So I think we are going to encounter a lot of complexity as 
we move to bigger ports, and we are trying one lane in a few of 
these big, complex ports, but trying to move to a full coverage 
for a port like Hong Kong is going to be very difficult.
    Senator Coleman. I believe the original ISIS program in 
Hong Kong had a very small number of lanes.
    Mr. Baker. Yes, that is correct. And, again, in Hong Kong, 
to show you the sorts of surprises you can encounter, we 
discovered the cement that they were using to pave the port 
gave off enough natural radiation that it was setting off the 
alarm regularly. So there are 100 problems that we will have to 
solve port by port.
    Senator Coleman. I would like at some point to discuss this 
further, but are there technological bases that you need, 
infrastructure bases? I want to get an overall sense as you go 
beyond the pilot project and kind of analyze that and 
understand what we have to deal with.
    Talking about technology changes. I saw this technology a 
number of years ago, and it moves quickly. How adaptable are 
the pilots that we have and as we look to the future to ship 
with new technology? Or are we wedded to a particular 
technology? Are we open to technological shifts? And how easily 
can they be accommodated?
    Mr. Baker. I think we have tried to build that in. And, of 
course, you never know for sure, but we have tried to build in 
the possibility of changes in the technology. For example, the 
radiation portal monitors that we have used abroad have been 
relatively undiscriminating in the kinds of radiation that they 
detect. And there is a second generation that is much better at 
identifying the kinds of radiation we are most worried about. 
We can install that in general in places that currently use the 
old technology, or we can add it as an add-on for particular 
checks.
    The scanning equipment, I would say the most promising new 
technologies there are in software that can identify anomalies, 
and then, again, I think we can use the existing infrastructure 
and then just make the software better.
    Senator Coleman. I want to get to a micro focus on the TWIC 
issue, but just one other question. Does the scanning help us 
to identify whether there are shielded materials? The concern I 
have with some of the radiological materials, if they are 
shielded, even the best equipment we have does not have the 
capacity to detect that, at least as I understand it.
    Mr. Baker. The equipment that would say is there radiation 
coming from this container, no, it can be shielded so that you 
cannot do that. But then that picture that we are looking at 
here, there would be a big black spot. And so the combination--
--
    Senator Coleman. The combined systems give us an edge that 
we have not had before. The TWIC program, I was talking to a 
fishing guide in northern Minnesota; they need TWIC cards. Here 
we are talking about implementing a system, and this is a guy 
that is taking vacationers to fish for walleye up in Warroad, 
Minnesota. I also talk to barge operators talking about the 
size of their operations and some of the issues that they 
have--student workers who work for 2 or 3 months, and it takes 
2 or 3 months to get a card. Clearly, we are looking at the 
major ports.
    Can you talk a little bit about how we do not get bogged 
down in dealing with small-boat operators, the tugboat 
industry, and student workers? Is somebody working on that 
stuff?
    Mr. Baker. Yes. Obviously, our biggest job is to get the 
people who regularly work there through the process, and that 
is a big job and takes time. Once we are there, we are only 
talking about the new hires that have to go through the 
process, and there is nothing about the process that inherently 
takes months. We are giving people months now because it is a 
big new job for everybody to line up and enroll. We can do this 
much more quickly for new hires once we are through with the 
great bulk of the work.
    There is a hard line that you have to draw. People who only 
occasionally come on to a port can be escorted by someone with 
a TWIC card, and I do not think that will change. Is there 
going to be a class of people who say, ``I want to be able to 
go regularly on the port, but I do not want to have to''----
    Senator Coleman. If I may interrupt, the problem is we have 
an image of a port, the port of L.A., or the port of New York. 
If you are a guide in Minnesota, technically we have 
international borders there, but there really is not a port. 
You are taking a fishing boat out of a dock and taking somebody 
fishing, and you have to have a TWIC card.
    Mr. Baker. That is a fair question, and let me look at 
that. I am not familiar with how far down we go in our 
definition of ``port.'' I cannot believe we cover canoes, but--
--
    Senator Coleman. You just may, is the concern. I can tell 
you that for these folks, they are going to travel a couple of 
hours to Duluth to the main area to go pick up a card to be 
able to take somebody fishing on a lake between Minnesota and 
Canada. Big Government sometimes forgets about the impact on 
that little guy, and we talk to those little guys.
    Mr. Baker. I appreciate your bringing that to my attention. 
Let me take a look at that.
    Senator Coleman. Thank you, Mr. Secretary.
    Chairman Lieberman. Thanks, Secretary Baker. I have a lot 
more questions I would like to ask. I think I would like to ask 
one more and submit the rest to you in writing.
    I wanted to ask you to talk a little bit more about the 
Domestic Nuclear Detection Office, to which, as I said earlier, 
Secretary Chertoff gives great priority, and I agree with him, 
and just to point out this is a detection program of nuclear 
devices coming into America by terrorists, potentially, that 
goes beyond the ports, but the ports are involved.
    First, I know you are testing the technology. How soon do 
you think you will be able to report to Congress on how that is 
going? Second, this has to involve integration of different 
organizations, some that protect land entrance, some Federal 
agencies that take care of the ports, and then obviously if we 
are looking at major cities, for instance, we will be dealing 
with State and local law enforcers. So if you could give a 
short answer to both parts of that question.
    Mr. Baker. OK. First, I would like to say the same thing 
that the Secretary has said. This is one of our worst 
nightmares. DNDO has been enormously effective in identifying 
that as the problem and asking how are our solutions. And as 
you said, we have a number of solutions in place for containers 
and commercial shipping, and that ought to then be the 
benchmark in which we say do we have the same level of 
protection for small boats, for general aviation, for all the 
other ways in which terrorists might bring nuclear weapons into 
the country. And DNDO, with its focus, has been single-minded 
in asking questions that do not fall into one organizational 
responsibility to say, OK, well, let us think like a terrorist: 
What is our response? How do we prevent people from bringing it 
in this way or that way? So they have been enormously helpful 
in broadening out the focus of our components.
    They have been doing testing, as you know, already, and we 
are about to begin actual testing in place. So I do not know 
what our current schedule is for getting you a report on the 
actual implementation testing. But I will get you an answer to 
that in writing.
    Chairman Lieberman. Fine.
    Mr. Baker. Organizationally, as I say, I think their focus 
has been research, procurement, and making sure people are 
thinking about the threat in a coherent way. And in all those 
respects, they have done an excellent job.
    Chairman Lieberman. And you believe that they are 
integrating the different agencies that have overlapping 
responsibility?
    Mr. Baker. Yes. For example, in some of our general 
aviation work and in our small boats initiatives, in both cases 
they were able to bring together TSA, CBP, and Coast Guard 
initiatives to say how do we build the best possible defenses 
against a nuclear weapon, and no one agency could have done 
that.
    Chairman Lieberman. Fine. When you get back to us with the 
information about the test data, obviously part of it is when 
the GAO can begin to review it on our behalf. Thanks very much.

 ANSWER FROM MR. BAKER TO THE FOLLOWING QUESTION FROM SENATOR LIEBERMAN
    Question: Regarding DNDO testing of nuclear detection capability, 
what is the schedule for getting Congress a report on how the testing 
is progressing?

    Answer: On May 25, 2007, DNDO briefed your office on the classified 
results of the ASP Phase 1 testing. The Phase 3 Test Report, which will 
also be classified, is currently in final review within the Department, 
and the Blind Test Report is presently being prepared. DNDO would be 
happy to provide you with a status briefing on how the testing is 
progressing.

    Senator Lieberman. Senator Collins.
    Senator Collins. Thank you. Secretary Baker, one of the 
most important provisions of the SAFE Port Act required the 
Department to develop protocols and a plan for restarting our 
ports in the event of an incident. We know from the West Coast 
dock strike of a few years back, which was an event that was 
both peaceful and anticipated, that the closure of ports can 
have enormous economic consequences. And if there were an 
attack on one of our ports, most likely for a time all ports 
would be shut down. And that is why we felt so strongly that we 
needed to have the Department engage in this plan, and the 
Department has done so.
    But as I referred to in my opening statement, the private 
sector entities have come to us to express concerns that there 
is not sufficient detail in the plan about the role that would 
be played by port authorities, by first responders, by those in 
the private sector, which, after all, own most of the emergency 
equipment as well as control our ports.
    What is the Department doing, having made a good first step 
in this area, to fill in the gaps and come up with a strategy 
that will ensure that we have a safe, logical, planned 
procedure for reopening our parts in the event of an attack?
    Mr. Baker. That is an excellent question, and we are quite 
aware of the concern on the part of the trade about this. A 
couple of basic principles I think have governed what we have 
done so far, and we are at work on some more detailed documents 
that will give some further guidance.
    First, we do not want to do what the private trade should 
do. We are not going to be telling people, well go to this 
port, go to that port. In most circumstances, they have 
dispatchers who are much more capable of making those judgments 
than the government.
    The second principle I would say is that we have to be 
flexible about our plan, and here I think there is some 
inevitable frustration on the part of the trade. They would 
like nothing better than a guarantee that says within 3 days, 
if you are not the port that is attacked and you meet certain 
criteria, we will let you in without any change in procedures. 
The difficulty with that is that we do not know what kind of 
attack we are going to be recovering from, and if it is a 
simple explosion in a container, that is a different sort of 
attack than a nuclear weapon found in a container, or a 
biological weapon. So we cannot know for sure how we will 
reconstitute trade until we know what we are reconstituting 
from. So we cannot give them guarantees.
    We do think that--and this is what we are working on now--a 
critical element is for everyone in the trade to know what the 
communication chain is going to look like, that we will be 
reaching out and getting information from them about what 
they're experiencing as they try to make deliveries, and to 
give them all the guidance that we can to make sure that 
everyone gets news as quickly as possible about what we can 
say. If we can say certain ports are open and we are accepting 
cargo in those ports, then everyone should get that information 
quickly. If we are restricting certain kinds of cargo or cargo 
from certain destinations, then we need to get that information 
out.
    So what we will be building as a resumption of trade 
protocol will focus on the communications lines and some basic 
principles of the sort that I have been talking about. I hope 
that will make the trade more comfortable, but I think there is 
probably an inevitable divergence because the trade would like 
guarantees that we cannot responsibly give to them.
    Senator Collins. Thank you.
    Chairman Lieberman. Thank you, Senator Collins. Senator 
Coleman.
    Senator Coleman. Thank you, Mr. Chairman.
    A lot of stuff comes into this country in a non-
containerized form: Automobiles, petroleum products, and dry 
bulk goods. Is CBP considering a CSI-like program for non-
containerized forms of maritime cargo?
    Mr. Baker. We have a variety of programs for those 
products. It is harder to have a single program because it 
varies so much. If it is scrap steel, it has one profile, and 
if it is petroleum, it is a completely different profile. And 
so we have had to work individually with shippers of particular 
products to determine that the supply chain is such that we are 
comfortable with it.
    It is a little less likely that someone would sneak a 
weapon into some of these shipments, but you cannot rule it out 
for certain kinds of shipments where the handling is gentle 
enough that a weapon could reasonably be expected to get 
through. But with those sorts of products, we have to very 
substantially vary our security measures according to the 
nature of the cargo.
    Senator Coleman. I appreciate it. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Coleman.
    Secretary Baker, thanks for your testimony. Very 
thoughtful. I always have the feeling when I hear you again 
this morning that you are on top of things, and just hearing 
the way in which we are talking about some of these scenarios, 
including the discussion of potential nuclear attack on the 
United States via weapons smuggled in by terrorists, it is 
unsettling, of course, in one sense. It also, I think, 
reassures us that people in important positions like your own 
are not going to be guilty of another failure of imagination. 
That is, to imagine the extremes that our enemies might go to 
inflict damage on us personally and our country.
    So I thank you for that. This is, as I say, good news. We 
appreciate what you have done so far. We are going to keep the 
pressure on. Most of all, we all have a common interest in 
seeing this work, and it is in that spirit that this Committee 
looks forward to continuing to work with you and everybody at 
the Department of Homeland Security. Thank you very much.
    Mr. Baker. Thank you.
    Chairman Lieberman. The second panel, please. As you are 
coming up, I will introduce the panel members. We have two 
representatives from other offices of the Federal Government 
and a representative of local government.
    Reginald Lloyd is the U.S. Attorney for the District of 
South Carolina, whose office has been charged with coordinating 
the efforts at Project SeaHawk at the Port of Charleston, South 
Carolina.
    Stephen Caldwell is the Director of Homeland Security and 
Justice Issues at the Government Accountability Office, and he 
has been responsible for conducting reviews of virtually every 
port security program the Department of Homeland Security has 
implemented. His work has been very important to this 
Committee.
    Captain Jeffrey Monroe is the Director of the Department of 
Ports and Transportation of the city of Portland, Maine. He has 
had a long and distinguished academic and professional career 
in the maritime and transportation sectors.
    We are grateful that you are all here. We look forward to 
your testimony now. I want to tell you, Mr. Lloyd, that I am 
sure I speak for Senator Collins and Senator Coleman, we know 
you have a big job being U.S. Attorney in South Carolina where 
Lindsey Graham resides, but we feel that you can take care of 
that and handle that effectively.
    To become more serious, he is our good friend and has a 
good sense of humor and shares our interest in homeland 
security.
    We welcome your testimony at this time. Mr. Lloyd.

 TESTIMONY OF REGINALD I. LLOYD,\1\ U.S. ATTORNEY, DISTRICT OF 
           SOUTH CAROLINA, U.S. DEPARTMENT OF JUSTICE

    Mr. Lloyd. Thank you. Mr. Chairman, Ranking Member Collins, 
Senator Coleman, Members of the Committee, it is an honor to 
appear before you today to talk about a port security 
initiative in Charleston, South Carolina, called ``SeaHawk.''
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Lloyd appears in the Appendix on 
page 46.
---------------------------------------------------------------------------
    When I first became U.S. Attorney in South Carolina and 
learned about SeaHawk, the first question that I kept asking 
was: What value does SeaHawk bring to the port that did not 
exist before? What I learned is that while each Federal agency 
responsible for maritime security has a core mission at the 
port, there is no national standard to coordinate resources, 
operations, or intelligence with Federal agencies or with our 
State and local jurisdictions. This leads to potential gaps 
that may be exploitable by criminals or extremists. SeaHawk 
seeks to seal the seams between Federal, State, and local port 
security activities. It does not replace the good work of the 
Federal agencies at the port. Rather, it enhances their 
missions by integrating them through co-location, unity of 
command, innovative development of technology, and information 
sharing.
    I am proud to tell you, Members of the Committee, that 
since its establishment, Project SeaHawk has achieved many of 
its goals and objectives. We have established a full-time, 
multi-agency, co-located task force of Federal, State, and 
local law enforcement using a Unified Command structure for 
decisionmaking that helps to promote cooperation and enhance 
information sharing and investigative resources.
    We have developed an intelligence section to provide 
support to law enforcement operations and investigations. We 
have created an Operations Center that provides situational 
awareness and resource coordination. We have developed and 
integrated and linked radiological detection and monitoring 
architecture. And we operate a proactive security mission to 
identify and deter criminal or extremist-related illicit 
activities.
    None of these accomplishments would have happened without 
the strong partnerships established among the agencies that 
secure our maritime borders. Full-time commitments to SeaHawk 
have been made from the U.S. Coast Guard, Customs and Border 
Protection, Immigration and Customs Enforcement, Defense 
Criminal Investigative Service, the South Carolina Law 
Enforcement Division, and every State and local municipality 
around the port.
    SeaHawk's mission is enhanced by its co-location and strong 
relationship with the FBI's Joint Terrorism Task Force, as well 
as its integration with our South Carolina Fusion Center. We 
operate through a Unified Command structure where each agency 
brings unique resources that support SeaHawk's operations. We 
also created a SeaHawk Executive Steering Committee to focus on 
long-term strategic goals that includes myself, the captain of 
the port, the port's director, the chief of our State Law 
Enforcement Division, the FBI SAC, the resident ASAC for ICE, 
the Transportation Security Administration's Federal Security 
Director, and all of the sheriffs and chiefs of police who have 
personnel dedicated to SeaHawk.
    One of the challenges was to create a screening process 
that would help the Unified Command to make decisions and 
allocate resources. This has been addressed through the 
development of a data capture process in which maritime 
information is collected and filtered through a data logic 
model comprised of a variety of indicators of suspect activity. 
Federal agents are augmented with task force officers from all 
of the surrounding local municipalities and jurisdictions. The 
real value of SeaHawk is the ability to pool limited resources 
and then apply them against a risk-based ranking of all 
identified security issues.
    The SeaHawk intelligence team screens all vessels and crew 
bound to the Port of Charleston and provides the results to the 
Unified Command on a daily basis so they can plan their 
actions. The intelligence team also provides information and 
analysis on the global war on terrorism and its specific 
implications to South Carolina.
    SeaHawk has an Operations Center that serves as a central 
hub for the South Carolina ports. Ships are followed with radar 
and video as they enter and leave the harbor area. This allows 
SeaHawk to keep apprised of ongoing events that may affect the 
security of the port.
    SeaHawk has used its resources to improve capabilities 
across four broad areas, including voice and data 
communications, law enforcement investigative and intelligence 
tools, information technology, and sensor programs. One 
cutting-edge program is a mobile radiological detection program 
that deploys a sensitive radiological sensor in a vehicle and a 
boat.
    Project SeaHawk, Mr. Chairman and Ranking Member Collins, 
is truly a successful example of Federal, State, and local 
agencies working together very effectively to secure the ports 
of South Carolina and to serve as a national model of 
innovation to enhance our Nation's port security.
    I want to thank you very much for inviting me here today to 
participate in this discussion with you, and I am very happy to 
answer any questions you may have.
    Chairman Lieberman. Thanks very much, Mr. Lloyd, for that 
excellent testimony. I appreciate the question with which you 
started, which was is this going to add anything to the status 
quo, and I am encouraged by your answer, which is that it has.
    Mr. Caldwell, thanks for being here. I just want to repeat 
that you have been really invaluable to this Committee in our 
oversight responsibilities, and I thank you for everything you 
have done and welcome you this morning.

    TESTIMONY OF STEPHEN L. CALDWELL,\1\ DIRECTOR, HOMELAND 
  SECURITY AND JUSTICE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY 
                             OFFICE

    Mr. Caldwell. Thank you very much, Chairman Lieberman and 
Senator Collins, and thank you for inviting me to speak on this 
important topic of the SAFE Port Act. Given the breadth of the 
Act and the already lengthy written statement that I submitted, 
as well as some of the comments by other witnesses, I will 
focus my comments on container security because that has come 
up again and again in the hearing.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Caldwell appears in the Appendix 
on page 53.
---------------------------------------------------------------------------
    To some extent, the supply chain programs that we have are 
at a crossroads, and I will get to that at the end. As you 
know, we currently have a layered strategy of various different 
programs to provide supply chain security. These are run by CBP 
as well as other agencies, both within DHS and other 
departments such as DOE. These include things we have already 
talked about: The 24-hour rule, ATS, inspections at domestic 
ports, radiation screening at domestic ports, CSI, Megaports, 
and C-TPAT. And as we have noted in our reports, a lot of 
progress has been made. We were very happy that a lot of the 
recommendations that we had made to DHS and its components had 
been incorporated into the SAFE Port Act, and DHS has made 
progress in implementing many of these. Some examples include 
improved strategic planning and better utilization of human 
capital.
    Despite the progress made, we still are reviewing two of 
the programs right now for this Committee, both CSI and C-TPAT, 
and we will be providing you more details on that early next 
year with our full reports. But some of our preliminary 
findings are in the written statement that I provided.
    One area where CBP is still challenged is the area of 
actually measuring outcomes as opposed to activities. This is a 
problem that is endemic to any agency involved in homeland 
security. But that is an area where we are still hoping they 
can make some more progress.
    Perhaps one of the most important areas of progress in 
supply chain security are the partnerships that CBP has formed. 
Assistant Secretary Baker also emphasized this point in his 
statement--at least his written statement--and the partnerships 
are with many groups, but there are at least three groups that 
I want to emphasize.
    First, the partnerships are with foreign nations. These are 
the nations that have agreed to be our partners in CSI or are 
negotiating with us on ``mutual recognition,'' which I will get 
to later.
    Second, there have been partnerships with the private 
sector. Companies have decided to join C-TPAT, provide 
information on their security, obviously provide resources, as 
was mentioned, to provide for their security. And CBP is also 
consulting with COAC, ISO, and other private groups.
    The third partnership I would like to mention is with 
international and regional organizations. There has been an 
international framework developed with U.S. participation and 
leadership called the ``Safe Framework'' by the World Customs 
Organization. In addition, there are a couple of joint 
cooperation forums now with both the European Union and with 
APEC.
    As one indication of the progress of these partnerships, 
other nations and international organizations have adopted 
programs that are very similar to CSI and C-TPAT. These 
partnerships are critical because, as we know, the Federal 
Government cannot do it all by itself. To push out our security 
envelope and to deal with things that are nongovernmental, we 
need to reach out to others and develop good relationships with 
these partners. But there are some signs that some of these 
critical partnerships are starting to fray. As I said, these 
critical relationships are partnerships, so other nations have 
volunteered to join CSI. The United States worked through 
international organizations. Companies decided to volunteer to 
join the C-TPAT program or, in some cases, to go beyond that 
and to meet ISO standards. In summary, our partners decided to 
be our partners. It was a mutually beneficial relationship.
    Now, CBP, somewhat on its own initiative and somewhat 
mandated by legislation, is adding or proposing new layers to 
this layered strategy. These include container security 
devices, ``Ten Plus Two'' data requirements, the Global 
Information Exchange, the Secure Freight Initiative, and 100-
percent scanning. In some cases these are voluntary, and in 
some cases they are not. But some of our partners are starting 
to ask: Does the United States have a layered strategy or a 
strategy of layers, with new layers being added continually and 
unilaterally? In the meantime, foreign nations and private 
company partners are asking what is in it for them. Where is 
the promised green lane that is talked about in concept but is 
not really implemented in a way that can be determined?
    Foreign governments are certainly willing to help us in 
terms of scanning things overseas as part of CSI, but they do 
want some assurances that these containers will not be scanned 
one or more times when they get to the United States. And 
private companies have increased their resources to improve 
security, but again, they are hoping to get some benefit in 
terms of expedited scrutiny of their shipments.
    One of the biggest concerns of these partners at large is 
the 100-percent scanning of all U.S.-bound containers. This 
Committee, as well as DHS, has received letters from these 
partners expressing some of their concerns about this new 
requirement. While we have not done a detailed review of SFI--
it only went operational 3 days ago, according to the Assistant 
Secretary's statement--we have visited two of the pilot ports 
as they were getting ready for SFI. The topics of 100-percent 
scanning and SFI came up frequently in the discussions that we 
had with foreign governments.
    Based on these discussions, we have identified six 
challenges involved in the 100-percent scanning requirement. 
Assistant Secretary Baker already previewed some of these 
challenges in his statement where he noted that neither 
technology nor diplomacy reacts well to being rushed.
    The first challenge is that the 100-percent scanning 
approach is counter to the risk management approach that GAO 
has pushed, Congress has pushed, the 9/11 Commission has 
pushed, and CBP has really incorporated into almost all of the 
other programs that it has and the United States has agreed to 
in the World Customs Organization SAFE Framework. This is our 
largest concern because the 100-percent scanning in some ways 
could reduce our security rather than enhance it.
    The reason a risk management approach is important is that 
it forces you to prioritize your limited resources. If you are 
focusing attention on all of the containers, you are not 
focusing your attention on any one container.
    Here are the remainders of some of the challenges we have 
identified, and I will just summarize these briefly because we 
have more details in our report. The second challenge is that 
the United States could probably not reciprocate if other 
countries adopted the same requirement.
    Third, the logistical feasibility is unknown and may vary 
by port.
    Fourth, the maturity of the technology is still not proven.
    Fifth, the resource requirements and who would pay them is 
not determined at this point.
    And finally, sixth, the use and ownership of the scanned 
data is not fully determined.
    So as I said at the beginning, these programs are at a 
crossroad. We have come a long way to build these programs, and 
our various partners have come a long way with us. What began 
as U.S. unilateral programs after September 11, 2001, have not 
only been accepted but have been internationalized. A risk 
management approach has been adopted by foreign governments, 
international organizations, and private companies as a logical 
way to increase security but keep the flow of commerce moving.
    We were in a position of moving to leverage our own limited 
resources by developing mutual recognition with some of our 
partners, and that process goes on. Under mutual recognition, 
two nations would understand, verify, and trust each other's 
customs security regime so that a C-TPAT member in one country 
would be trusted in the equivalent program of the other country 
by their customs officials. And when mutual recognition is 
developed among a number of nations, each nation's resources 
are, in effect, being leveraged to help the others, increasing 
the worldwide level of security.
    With some of the latest proposals, though, the partnerships 
that we have relied on may be at risk. I am not saying they are 
severely at risk, but they are starting to fray. Regarding 
other nations, they may be reluctant to join CSI or stay in CSI 
if there is already a unilateral requirement on them that they 
scan 100 percent of all U.S.-bound cargo. In accordance with 
the agreements that we have already signed with them, they may 
ask for reciprocity, which CBP would be hard pressed to 
provide; the United States would have to scan 100 percent of 
our containers before they are outbound for the other 
countries.
    Regarding the private sector, companies may be reluctant to 
join or continue in C-TPAT if 100 percent of their containers 
are going to be scanned anyway.
    In closing, I hope I have provided some useful perspectives 
on supply chain security for you. I am also ready to answer 
questions on the whole area of the SAFE Port Act. Thank you.
    Chairman Lieberman. Thanks, Mr. Caldwell. You have supplied 
useful answers to us, and we will have questions. Thanks.
    Captain Monroe, welcome back. Good to see you.

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

    Captain Monroe. Good to see you. Thank you very much for 
inviting me this morning, and it is a pleasure to be here, as 
always. I always like to start off by talking about our little 
port of Portland, which happens to be not only the largest port 
in New England and the largest port in the State of Maine, but 
also the largest foreign inbound tonnage transit port in the 
United States, and I know the Senator loves all the adjectives 
I add to that.
---------------------------------------------------------------------------
    \1\ The prepared statement of Captain Monroe appears in the 
Appendix on page 102.
---------------------------------------------------------------------------
    One of the things that is unique about Portland is we are a 
very diverse port. It was one of the reasons that the U.S. 
Coast Guard, in doing their first assessments of ports, looked 
at Portland, Maine, because of the diverse economic mix and the 
many operations that went on there. And we are happy to see 
that the SAFE Port Act, when it was put together, contained 
many of the critical provisions that looked at supply chain 
security. And I use supply chain security as a very definitive 
term because one of the things that we need to understand is 
that container security and port security are not necessarily 
synonymous.
    We deal particularly in Portland with millions of tons of 
oil, dry bulk cargo, petrochemicals, other ports near us deal 
with automobiles, we all deal with hazmat and certainly project 
cargoes, and we have to understand in this mix that if we are 
talking about port security, it is all elements of different 
types of cargoes, all different types of operations, all 
different types of vessels.
    The SAFE Port Act was a very big step. Overall, progress is 
good but certainly not as fast as it needs to be. And Senator 
Collins mentioned the TWIC card before, and this has been sort 
of a source of concern for us up in Portland, as well as in the 
industry.
    These are my credentials. Kind of interesting. We carry 
quite a few of them. This is my airport credential. The one 
thing that is interesting about our organization is we operate 
the airport, the seaport, and coordinate all the surface 
transportation system. I required a very definitive background 
check to get this. This is my merchant mariner's document. I 
also required a very definitive background check to get this. 
This merchant mariner's document was not acceptable as a 
document to get this airport credential. This is my port 
document. We have no standards for that as yet. And while I 
recognize what DHS has said in many cases about aviation and 
the maritime world being very different from each other, no 
question about that. But the quintessential common area here is 
the background check, and most of us in the port industry 
recognize at this time, no matter what standard TWIC winds up 
coming out with, we are going to wind up issuing our own cards 
anyway because the reality is that is the best way to maintain 
tight control in our various ports. So one card fits all might 
be great for at least getting the issuance, but may not be best 
for all of the access.
    I am happy to report I have been through four separate 
background checks to get my credentials. They have not found 
anything yet, which I am very happy to see.
    Programs like C-TPAT are a good standard. We are working 
toward that, and that is expanding. That needs to continue. So 
does CSI, our radiation scanning program, and the high-risk 
scans. And I agree with Senator Collins that certainly scanning 
every container is counterproductive and does not work that 
well. But the focus of this is to push out the borders, and 
that is really what we need to do.
    All of these things have to occur in foreign ports. And we 
are worried that cargo and port security sometimes lags within 
the Department of Homeland Security, may be low profile, and I 
fear sometimes that it is low priority.
    I think the Office of Cargo Security, as defined within the 
SAFE Port Act, was a good concept. Last year, Senator Collins 
proposed legislation that called for a much higher level of 
policy decisionmaking area that looked at all of the aspects of 
cargo, and I think that is really where we need to go. That 
needs to occur as effectively as possible.
    Cargo is a critical element, it is a critical threat, and 
if we look at all aspects of cargo, not just container, we 
begin to realize that the priority of this has to move up much 
higher within DHS. And once that occurs, I think that is going 
to speed up progress on many of the things that we are doing.
    There are some bright spots. I do not like to be all doom 
and gloom. Many of the public officials and port professionals 
certainly in our area are working together very well. Public 
officials and our port and terminal operators understand the 
complexities of working together. The Incident Command System, 
I think that has worked out well.
    We are very happy to see that our municipality, not waiting 
for the national standard of operations center, developed 
through Homeland Security money our own operations center led 
by our dynamic fire chief, who approached the entire thing from 
a holistic view, not only the transportation system but the 
entire community, and developed an emergency operations center, 
which we have used on multiple occasions to look at all of the 
systems that are going on, all of the activities, all of the 
threats. And we have had some practical applications, 
unfortunately, such as last year's Patriots' Day storm, which 
allowed us to respond quickly to a lot of damage and loss of 
power and threats to citizens from just natural disaster.
    We have used the port security grant money very 
effectively. We are certainly not spendthrifts, but it has 
helped us put up fencing to access control, develop 
informational platforms which have allowed us to communicate 
with each other and to share data and information. Ultimately, 
someday we think that we will be able to flip a switch and you 
will be able to see everything that is going on in Portland, 
Maine, right here in Washington, DC.
    But this money has allowed us to ramp up quickly, and it is 
as important to have this money available to smaller ports as 
it is the major mega ports, which certainly need the money, but 
also have the resources in many cases to do this.
    When we approach port security, when we approach 
transportation security, it has to be done in a systematic 
approach, not in a modal approach. And the unfortunate thing is 
that we have lived too long with the modal approach in 
transportation, which I think sometimes is working its way into 
homeland security, where we think of aviation or ports or even 
the surface transportation system as different from each other. 
Wings, wheels, or propellers, the system needs to work 
together. And one size in many cases can fit all, even with the 
differences in these various systems. High-level coordination 
is certainly critical, and that will be key if we ever have an 
incident.
    The restoration of the marine transportation system is only 
one element of the restoration of the entire transportation 
system, and that even though industry seems concerned 
sometimes, I think the reality is not looking for definitive 
answers, but just looking for definitive standards so that 
someone in DHS understands what every facility is capable of 
and is able to immediately restore the system, redirect cargo.
    If we had an emergency, for example, up in Maine in the 
middle of February, by heavens, we would be trying to think of 
ways to get oil up there to meet the needs of our homes and our 
factories and our communities. And the bottom line is unless 
somebody has a holistic picture of that and clearly and 
definitively directs it, it is not going to work effectively. 
It cannot be just a series of communications. It has to be some 
very definitive direction.
    We saw that on September 11, 2001, with the confusion that 
was going on, and that needs to be looked at and corrected. 
This restoration trade is a very significant issue. We noticed 
that right before Hurricane Katrina. The maritime industry was 
able to direct its cargo. It anticipated the problems. But that 
is something that needs to occur on a national level.
    The one thing we need to keep in mind is that cargo does 
not vote, so it is the responsibility of our agencies, the 
responsibility of our elected officials to look at this very 
critical supply chain and all of the elements attached to it 
and make sure that not only is it safe and secure, but that it 
can be restored quickly.
    For right now, we are not quite getting the job done. We 
are certainly much better than we were. There is no question we 
have made an enormous amount of progress through the sheer will 
of a lot of good people working on the ground in the trenches 
like myself, and certainly the direction of the Department of 
Homeland Security has worked well. But all of this needs to 
come together much closer. There needs to be much more 
definitive leadership out of the Department of Homeland 
Security. We need to worry less about our various Federal 
agency directives and think about it in a more holistic 
standard. And we also need to look at our entire transportation 
system in a holistic, systematic fashion as opposed to just 
looking at the various elements of different parts of security 
where we think are threats.
    Thank you very much, and thank you for the time to speak 
with you today, and I will be happy to answer any questions.
    Chairman Lieberman. Thanks very much, Captain. You are a 
good witness. It is good to hear your report from the ground. I 
was a little disappointed to hear that the cargo will not be 
voting in the Maine election---- [Laughter.]
    Next year because I know, based on all that Senator Collins 
has done to make the cargo safe, that they would be voting for 
her.
    Senator Carper. We are familiar in Delaware with the term 
``cargo preference.'' It would probably have application in 
Maine as well.
    Chairman Lieberman. Exactly. OK. Senator Carper, welcome. 
On this very day, the TWIC program has begun to enroll port 
workers in Wilmington, Delaware, so we appreciate that you are 
here today.
    Let me begin, Mr. Caldwell, with you, and as I said 
earlier, you have tremendous expertise in this area. Step back, 
if you would, and give us your overall rating of the 
Department's progress in maritime security in the year since 
the passage of the SAFE Port Act. If you were giving them a 
grade, what would it be?
    Mr. Caldwell. I think ``incomplete'' is the term I used in 
the last hearing we had.
    Chairman Lieberman. That is true.
    Mr. Caldwell. So I need to stay consistent here. But I 
would like to point out something fairly important. We did a 
very large effort for the Committee here on a progress report 
of DHS, and the cut-off on that was October 2006. We actually 
did not use the SAFE Port Act in setting the expectations that 
we then used to rate the Department on. And so the assessment I 
have now is updated from that earlier progress report 
assessment.
    As my written statement demonstrates, there is continued 
substantial progress in many of the requirements of the SAFE 
Port Act. I would have to agree with Assistant Secretary Baker 
that the components look like they have made it already or they 
are in line to make it.
    There are four areas that we pointed out in that earlier 
report, and these are the four areas where we still think there 
are some challenges. I can just go over those again real 
quickly.
    Chairman Lieberman. Why don't you highlight them? That is 
the ``incomplete'' part of it.
    Mr. Caldwell. Yes. There is developing port-specific plans 
for recovery. I would agree with----
    Chairman Lieberman. Recovery meaning what here?
    Mr. Caldwell. Recovery after an incident. We need to think 
of incidents as being beyond the initial security response to 
include recovery from environmental incidents or natural 
disasters and things like that.
    Chairman Lieberman. Sure.
    Mr. Caldwell. When you ask what the Department is doing, 
the components are going to use their International Supply 
Chain Security Plan. They also have something called the 
Maritime Infrastructure Recovery Plan, which is also a national 
plan. Now they have to bring that level of planning down to the 
individual port levels. That is where they are incomplete. They 
need to rewrite all the area maritime security plans to add in 
that recovery portion.
    The other incomplete area is implementing national access 
control. TWIC is underway. They are certainly making progress 
compared to where they were a couple of years ago. The next 
incomplete area is long-range tracking systems to improve 
maritime domain awareness. We are currently doing some work to 
look at both the classified as well as the unclassified 
tracking systems, and so we may find out they made more 
progress there than we had initially reported.
    Chairman Lieberman. OK.
    Mr. Caldwell. And then, finally, in terms of developing 
programs to screen cargo for radiation, that is another program 
where we thought they needed to make more progress than 
indicated. We have reported in several recent reports about the 
testing that was done in terms of the new technology for 
radiation scanning.
    Chairman Lieberman. Thanks. We will obviously count on you 
to keep an eye on those four areas particularly, and we will 
continue to work with you and your colleagues at GAO.
    Mr. Caldwell. Yes, sir.
    Chairman Lieberman. Mr. Lloyd, I appreciate the good report 
on Project SeaHawk. I love the combination of the Federal, 
State, and local officials for a common purpose, including the 
Joint Terrorism Task Force. This is exactly the kind of work 
that was not really occurring prior to September 11, 2001.
    I wonder if you think that State and local law enforcement 
agencies will continue to participate in programs like Project 
SeaHawk if they are unable to receive Federal assistance, which 
was one of the things that is being contemplated.
    Mr. Lloyd. Thank you, Senator, and I would likewise agree 
that the Department has for a long time held the view that our 
partnerships with State and local particularly law enforcement 
agencies are key to us getting our mission done.
    The issue of what happens after the pilot project with 
SeaHawk ends as far as it relates to our State and local 
partners down there is our biggest question. Those issues I 
think will be worked out in a little more detail and with some 
more concrete specificity once DHS is finished going through 
its process of identifying exactly how the project will be 
transitioned, i.e., which component, if any, of DHS will take 
over SeaHawk, or will the Department itself sort of step into 
the role that DOJ is currently undertaking.
    Obviously, our State and local partners feel a lot of 
pressure from other priorities that they face, and what we hear 
on our end is that the issue of funding for them or 
reimbursement for them is key, as well as how soon they are 
going to know about the transition that is going to occur.
    What we have done is with rebudgeting, we have been able to 
extend the project life to the end of fiscal year 2009. That 
has allowed them some more time at the local and State level to 
be able to hopefully identify funds or grants that may allow 
them to continue their participation.
    Chairman Lieberman. Excellent. Thanks.
    Just a quick question, Captain Monroe. As you know, we 
established a Port Security Grant Program, which Senator 
Collins and I and all the Members of the Committee worked on. 
And these grants have been used to make much needed 
improvements in the physical safety of our ports and waterways. 
The SAFE Port Act authorized $400 million annually for the 
program.
    The Department of Homeland Security recently announced that 
it intends to make implementing the requirements of the TWIC 
program a primary purpose of the overall Port Security Grant 
Program, and obviously, we all understand the importance of 
TWIC with the comments that you have added. Are you concerned 
that this may make it more difficult for you and other local 
port administrators to get funding for other critical port 
security improvements, like surveillance equipment or equipment 
to detect underwater explosive devices?
    Captain Monroe. Well, over the course of time, many of us 
have already ramped up to that location. We have already looked 
at the aspect of surveillance, so we are sort of in the second 
tier of this.
    Chairman Lieberman. Yes.
    Captain Monroe. The bottom line is that we do not have a 
standard really that works for TWIC. Things like document 
readers and biometric readers and all the other technology that 
they are talking about, in some cases they do not even exist. 
So nobody has really any idea what the cost is going to be or 
the long-term implications or, in many cases, even the use for 
this thing.
    I think the bottom line is that as every year goes on, you 
begin to see where the holes potentially are.
    Chairman Lieberman. Right.
    Captain Monroe. And, of course, we have all of the rules 
and regulations that call for multiple assessments. So we find 
ourselves in the position of always continually trying to apply 
for money that we need. We do not try to do excess. We just try 
to do what we think is essential. And we have gone a long way 
with many of the things that we have done, but we are a smaller 
port. The challenge is in some of the bigger ports that are 
much more diverse. And I think ultimately, if you talk to some 
of my colleagues, they will tell you that in many cases port 
security grant money needs to be expanded because there are 
certainly many more challenges.
    The other side of that is that many of the bigger ports 
also have the resources to be able to meet these needs, where 
in our particular case, the citizens of the city of Portland 
would have had to have borne the cost of these mandated 
fundings.
    Chairman Lieberman. Understood. Thanks. My time is up.
    Senator Collins. Thank you, Mr. Chairman.
    Captain Monroe, to follow up on the funding issue that the 
Chairman just raised, he and I have had to fight so hard to 
secure funding for port security grants. The Administration, as 
you know, year after year has proposed folding port security 
grants into a general homeland security grant program, whereas 
we have advocated for dedicated funding.
    Could you speak to the importance of being able to rely on 
dedicated funding for port security grants and also on the 
importance of having multi-year funding? It seems to me from 
seeing the projects that you have underway in Portland that 
many of them are multi-year projects that are going to require 
additional investments. But if you could comment on those two 
issues.
    Captain Monroe. Well, homogeneous funding programs are very 
difficult because one of the things that happens is you begin 
to lose the expertise necessary to properly evaluate what is 
necessary. I would find it particularly difficult if I had to 
go up against aviation funding because the needs are very 
different. There is no question about that. We have been able 
to use our multi-level funding and our multi-year funding to 
really step out not only with our new facilities and put in 
surveillance and all of the access control and all the other 
things that we have needed, but we are one of the first ports 
now to start looking at TSA-style screening for cruise line 
passengers and the international ferry. So that multi-year 
funding is very critical because one of the things that it is 
changing over the course of time are the regulations and the 
assessments. And as new intelligence becomes available, we 
begin to look at new threats.
    So I think the reality is that this is very specific. Right 
now we have a great evaluation program on the maritime side, on 
the aviation side. There is not a very good system in place for 
the surface transportation, and they are really groping around 
trying to figure out what they need to do. But the reality is, 
I think, if you try to put it all into one place, like the 
Administration says, you are going to lose an enormous amount 
of good evaluation capability, and then it is just going to 
become a matter of competition, and needs may not be met in 
that circumstance.
    Senator Collins. Thank you. I certainly agree with that 
assessment.
    Mr. Caldwell, you stated in your testimony that 100-percent 
scanning could actually reduce security rather than enhance it. 
And since I agree with that assessment, I was very happy to 
hear you say that for the record.
    Is it fair to say that requiring 100-percent scanning, 
regardless of the impact on trade, regardless of cost, 
regardless of the risk of the cargo at hand, is inconsistent 
with basic risk management principles?
    Mr. Caldwell. I would agree with that. If I could just give 
an example?
    Senator Collins. Yes. Thank you.
    Mr. Caldwell. Could we get the chart back up that Assistant 
Secretary Baker used in his presentation? \1\ You have three 
things shown on this chart that are valuable: You have the NII, 
which is the imagery screen; you have the radiation screen as 
well; and then you have the ATS score. These are three very 
important things. But from Mr. Baker's description, it sounded 
like you need to have a person at the National Targeting Center 
look at all three factors. How many thousands of people are we 
going to need, either overseas or here, to look at that? I just 
do not know what kind of resource level would be needed to make 
these 100-percent scanning images useful. If you are just 
taking the scans and storing them, you are not improving 
security.
---------------------------------------------------------------------------
    \1\ The chart submitted by Mr. Baker appears in the Appendix on 
page 106.
---------------------------------------------------------------------------
    Senator Collins. And isn't that what is happening in Hong 
Kong? We hear a lot about the Hong Kong project, but, in fact, 
unless there has been a change recently, it is my understanding 
that while images are being captured, no one is looking at the 
images. And if no one is reviewing the results of the scan, you 
are no further ahead, and, in fact, it may produce a false 
sense of security to have the scan done. But if no one is 
analyzing the results, there really is no progress.
    Mr. Caldwell. I was in Hong Kong in 2004, and I got the 
demonstration of their system. I cannot say I audited it, so I 
do not know how well it works. It was pretty impressive how 
they are trying to combine these different technologies. But, 
again, what I do not know is what was being done with those 
images.
    One of the most promising areas--and, again, Assistant 
Secretary Baker brought this up--is potential improvements in 
software. What if you could have a software program that would 
tell us that, based on the manifest and this type of item, the 
item should have this kind of radiation signature, and it 
should have this kind of density. And then the software would 
combine all those things through an algorithm to indicate that 
an item seems within the normal deviations and that we should 
not worry about it. At that point, it is not too different than 
the ATS system currently being used.
    Senator Collins. Right. That is essentially a targeted 
system.
    Mr. Caldwell. Correct, it identifies the containers that 
need extra scrutiny.
    Senator Collins. Exactly.
    Mr. Caldwell. And that may be where they are going in the 
long run, but I am not sure. As I said, SFI has been fully 
operational only for 3 days now, so we need to be careful 
making premature judgments. When we were in Honduras, or when 
we were in Busan 6 to 12 months ago, they were just laying the 
plans to install SFI. Many of these questions had not been 
worked out in terms of who is going to own the images, who is 
going to review them, how do you store them, and who is paying 
for it.
    Senator Collins. Thank you.
    Mr. Lloyd, it is my understanding that there is talk of 
transitioning the project that you have described from the 
Department of Justice to the Department of Homeland Security. 
And, indeed, I think that it was housed in the Department of 
Justice to start with because it was an earmarked project. And 
it is a good example of an earmark that has produced very 
valuable information and a pilot that we may want to replicate 
elsewhere. But do you have concerns about the transition from 
DOJ to DHS?
    Mr. Lloyd. Thank you, Senator. It was actually started, 
obviously, as a special pilot project before the creation of 
DHS, and what we have seen is that it has been a wonderful 
program and it has done, I think, the type of things that 
needed to be done in terms of bringing varying agencies 
together into a unified command at a port.
    Our concern would be that you would in a transition, 
obviously, lose some of the effectiveness of that unified 
command, that you would lose the presence of the State and 
local partners, who we think are very valuable. But ultimately 
I think that is something that DHS would have to evaluate as to 
which components program-wise of SeaHawk they would want to 
keep, replicate around the country, or move to a different 
model. But what we have found right now is that all of our 
participating components find all of those programs that we are 
currently operating there to be very useful in terms of 
augmenting their missions.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks, Senator Collins.
    I was interested in the discussion with Senator Collins and 
Mr. Caldwell, and those are important questions about the 
personnel required for the 100-percent scanning. I visited the 
port in Hong Kong during August, and I suppose the most 
significant thing is that the system, the integrated system, 
both radiation monitoring and imaging works, and it works in a 
way that does not, to my eye, and I guess to those looking at 
it, unnecessarily burden the flow of commerce. What is required 
to then use the information that technology provides us with? 
And I am informed that they are beginning both in Hong Kong and 
in Singapore, in addition to the three other ports we mentioned 
more fully, to try to make judgments about that.
    I suppose the thing to say--it may be obvious but worth 
saying--is that modern technology gives us a capacity to even 
contemplate 100-percent scanning without unnecessarily 
interfering with the flow of commerce, which would have been 
unimaginable not so long ago. So we will work on that.
    Senator Carper, the bell goes off, but that means we have 
enough time for a good solid round of questions.
    Senator Carper. Great.
    Chairman Lieberman. By the bell, I mean not to call us into 
the center of the ring, but to take us over to the Senate 
because there is a rollcall vote just starting.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Mr. Chairman.
    Gentlemen, thank you for joining us today and for your 
testimony and for your responses to our questions. As the 
Chairman alluded to earlier in our hearing, and I suspect you 
all discussed it on the previous panel, the TWIC program is 
actually getting implemented, up and running in the port of 
Wilmington today, which is about 5 or 6 miles from where I 
live. I have been out to the port a lot. When I was governor, 
we were very much involved. The State of Delaware took over the 
port from the city of Wilmington and spent a lot of time, 
energy, and money to try to bring them into the 21st Century. 
So it is something that we care about and have thought a lot 
about and know a lot of the folks who work out there.
    A lot of the people who work out there, not all but a lot 
of them, are folks who have had scrapes with the law in their 
past, and my suspicion is if you go around to major ports 
around the country, you would find some of the folks who are 
doing a lot of the work at ports--a lot of it is back-breaking 
work, a lot of physical labor--are people who have had in some 
cases brushes with the law, in some cases rather serious ones.
    As we bring TWIC up and running, there are some folks at 
our port who are concerned that they may lose their jobs, 
pretty good-paying jobs, considering in some cases the degree 
of education they have and their criminal record. Captain 
Monroe, are you concerned about the impact that the TWIC card 
could have on port operations?
    Captain Monroe. Well, I am not, really, and the reason 
being is that we had the same issues when we implemented the 
background screening for aviation. There are a lot of folks who 
felt that because of whatever the issue, something might knock 
them out.
    I think the reality is that all of these background checks 
are directed toward people who may be a potential threat, and I 
think that certainly does not encompass the vast majority of 
folks.
    Now, if you do have a violent offender, somebody who has 
been arrested for something fairly significant----
    Senator Carper. Like terroristic threatening?
    Captain Monroe. Yes, terroristic threatening or even 
murder, or anything like that, certainly I think I, as a port 
director, would have a lot of questions about having them 
working on my port to begin with. But I think what we realized 
is that no matter what the fear was, when we implemented the 
aviation program, most of the people did not have issues, even 
those people who did have some sort of issues or background 
problems or even misdemeanors or some arrests. It didn't 
necessarily knock them out.
    So I think that is a fear in many cases that is overblown 
by folks because of the uncertainty of the program.
    Senator Carper. How do we strike the right balance to make 
sure that folks who do not pose a threat, given at least their 
behavior in the past, but who have made mistakes, how do we 
find the right balance so that the folks who pose the threat 
maybe are not invited back for a continued engagement and those 
who do not, have the opportunity to continue to prove 
themselves?
    Captain Monroe. Well, I think the simple way to do that, 
Senator, is basically take people on a case-by-case basis. You 
are only going to find a small percentage of these folks, I 
think, that are going to be identified, and then take the time 
to review those individual backgrounds, assist them in trying 
to find out what the circumstance was, do an investigation, and 
get it over with. And the reality is those standards have 
already been suggested as part of the Coast Guard program, and 
I think they are pretty good standards.
    Senator Carper. OK. Any other comments from anyone, please, 
on this?
    Mr. Caldwell. There are two things. First, it is a 
statutory criteria as to what crimes disqualify them. Second, 
there is an appeals process. But what I am not sure about is 
whether the appeals process will allow them to take somebody 
who committed one of those crimes 20 years ago and allow him to 
still have the TWIC card.
    Senator Carper. I believe there is a process--we call it a 
``waiver process''--where people can seek a waiver, and I think 
in some cases, a person could seek and receive a waiver even if 
the offense was one of these that are stipulated in the 
guidelines.
    Mr. Lloyd, do you want to add anything? If not, I have 
another TWIC-related question.
    Mr. Lloyd. Senator, I would just say briefly that one of 
the things that we do at Project SeaHawk is almost on a 
continuous basis with all of the task force agencies that we 
have there is go through and check and make sure that those 
individuals who are working at the port and on the docks in 
particular do meet those statutory requirements. Occasionally, 
you do find individuals with ties to ongoing criminal activity, 
and that is what we see as much of a threat to port security as 
the terrorists. If our port is vulnerable to that kind of 
ongoing criminal activity, then we feel like it is vulnerable 
to potential terrorist intrusion at that point.
    Senator Carper. Alright. Good. One other question. Again, 
it is TWIC-related. But maybe, Mr. Caldwell, you would be best 
at this. When we first conceived of this idea and said we want 
to put together a program and increase our port security, do 
you recall when we said we wanted to get it underway? Was there 
an early target date?
    Mr. Caldwell. It was included in the Maritime 
Transportation Security Act, and I believe that was passed in 
November 2002. But I do not know if it had an implementation 
milestone associated with it.
    Senator Carper. Anybody recall? Captain Monroe.
    Captain Monroe. Yes. When Congress first talked about the 
TWIC program, they were looking at that point as a broad-based 
transportation worker program across all aspects. And this came 
through right after September 11, 2001, because it was one of 
the first things that people recognized needed to be addressed. 
And what happened is, come 2002, 2003, it began to go off in 
different directions.
    Senator Carper. Alright. Given the long run-up to actually 
being able to launch the program today in one port, and some 
other ports are in line next, when do you think we can 
reasonably expect to have the program pretty well up and 
running, not just in a handful of ports but throughout the 
country?
    Captain Monroe. Well, right now the Coast Guard has a 
program that they are rolling out, so we are looking at some 
very definitive deadlines. So within the next year to 18 
months, the TWIC program, as currently envisioned, should be 
fairly well in place in most places. And I have to credit the 
port of Wilmington because they did a lot of good work as part 
of the pilot program. We had a chance to meet with them and 
talk with them, and I think they did a great job looking at a 
lot of uncertainties and sort of reining it in for us a little 
bit. But I think within 18 months we will see a pretty 
substantive accomplishment there.
    Senator Carper. Well, good. I was at the port not long ago, 
and they said, ``Who is Jeff Monroe?'' [Laughter.]
    I said, ``I think he is from Portland, Oregon.'' No, I did 
not say that. I am sure he is from Maine. Thank you all very 
much.
    Chairman Lieberman. Thanks, Senator Carper.
    Attorney Lloyd, Mr. Caldwell, Captain Monroe, thanks very 
much for being here, for what you are doing every day to 
improve our homeland security, and for the testimony that you 
have given today. We appreciate it very much.
    The record of the hearing will be held open for the 
customary 15 days for Members to submit additional questions to 
you or for you to add to your testimony. But please know that 
you have our thanks.
    The hearing is adjourned.
    [Whereupon, at 12:09 p.m., the Committee was adjourned.]


                            A P P E N D I X

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