[Senate Hearing 110-947]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-947
 
                  NOMINATION OF HON. PAUL A. SCHNEIDER

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


                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                 ON THE

NOMINATION OF HON. PAUL A. SCHNEIDER TO BE DEPUTY SECRETARY, DEPARTMENT 
                          OF HOMELAND SECURITY

                               __________

                              MAY 14, 2008

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

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



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20402-0001



        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
                    Beth M. Grossman, Senior Counsel
                     Christian J. Beckner, Counsel
               Kristine V. Lam, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                   Jennifer L. Tarr, Minority Counsel
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Akaka................................................     7
    Senator Tester...............................................     8
    Senator McCaskill............................................    11

                                WITNESS
                        Wednesday, May 14, 2008

Hon. Paul A. Schneider to be Deputy Secretary, U.S. Department of 
  Homeland Security:
    Testimony....................................................     3
    Prepared statement...........................................    27
    Biographical and professional information....................    29
    Letter from U.S. Office of Government Ethics.................    37
    Responses to pre-hearing questions...........................    38
    Responses to post-hearing questions..........................    81

                                APPENDIX

ICE, Public Information, New York Times Death in Detention 
  Article, May 6, 2008...........................................    97
ICE, Public Information, Washington Post Detainee Health Care 
  Series--Day 1, May 11, 2008....................................   100


                  NOMINATION OF HON. PAUL A. SCHNEIDER

                              ----------                              


                        WEDNESDAY, MAY 14, 2008

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

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning. The hearing will come to 
order.
    We are here today to consider the nomination of Paul 
Schneider to be Deputy Secretary of the Department of Homeland 
Security. For the past year and a half, Mr. Schneider has been 
serving as Under Secretary for Management at the Department, 
and in October he took on the additional responsibilities of 
being Acting Deputy Secretary.
    Mr. Schneider has obviously been working under a heavy 
load. In fact, he has stated that his portfolio covers 
everything from overseeing preparations to respond to a nuclear 
terrorist attack to ensuring that the Department employees have 
adequate office space, and that is exactly right. I must say 
that personally I have been impressed by his ability to handle 
such a diverse range of responsibilities and to handle them 
very effectively. I think he has brought a level of stability 
and experience to the administration of the Department that it 
needs, of course.
    But the journey, if I may paraphrase from a business 
executive, for the Department of Homeland Security to better 
management has no final destination point. The Department must 
perpetually be better and better because our enemies, plotting 
and searching for new ways to attack us here at home, will 
never, in our generation at least, end.
    When we created the Department of Homeland Security 5 years 
ago, the intention was to unify the Federal Government's 
previously balkanized and too often neglected counterterrorism, 
border security, and emergency preparedness and response 
efforts into one cohesive and effective Department to meet the 
threat that became all too real on September 11, 2001. We also 
wanted to build critical new functions into the Department such 
as a unique homeland security intelligence department and a 
directorate to focus on critical homeland security research and 
development, to do for homeland security what agencies like the 
Defense Advanced Research Projects Agency (DARPA) have done 
within the Department of Defense for our national security.
    The country is clearly safer as a result of the creation 
and work of the Department of Homeland Security, but as we all 
know, there has been no shortage of problems within this new 
Department of more than 200,000 employees as it has sought to 
fulfill its critical and challenging missions.
    Mr. Schneider, you have tackled many of the big issues in 
your tenure. For the most part, as far as I can tell, when you 
have tackled them, you have wrestled them to the ground, and 
the Department and the country are better off for it. I 
appreciate your willingness to take on these new assignments, 
and I appreciate the efforts of the more than 200,000 
Department of Homeland Security employees who work with you 
every day--and with Secretary Chertoff, of course--to keep our 
Nation secure here at home.
    I am going to put the rest of my opening statement into the 
record, and I will take up the various matters that I mention 
in it in the question period.
    [The prepared statement of Chairman Lieberman follows:]
            OPENING PREPARED STATEMENT OF SENATOR LIEBERMAN
    Good morning and welcome. We are here today for the nomination 
hearing of Paul Schneider to be Deputy Secretary of the Department of 
Homeland Security. For the past year and a half, Mr. Schneider has been 
serving as Under Secretary for Management at the Department and in 
October he took on additional responsibilities when he was named Acting 
Deputy Secretary.
    Mr. Schneider has obviously been working under a heavy load. In 
fact, he has stated that his portfolio covers everything from 
overseeing preparations to respond to a nuclear terrorist attack to 
ensuring that DHS employees have adequate office space. I have been 
impressed by his ability to command such a diverse range of 
responsibilities and I believe he has brought a level of stability and 
expertise to the Department that it sorely needs.
    But the work of the Department of Homeland Security is never done, 
and we must keep pressing forward to improve upon its capabilities, 
particularly in the areas of acquisition and cyber security, while also 
ensuring that the Department is prepared for the upcoming transition to 
a new administration.
    When we created DHS 5 years ago, the intention was to unify the 
Federal Government's previously balkanized and too often neglected 
counterterrorism, border security, and emergency preparedness and 
response resources under one banner for a more cohesive and effective 
result. We also wanted to build critical new functions such as homeland 
security intelligence and a directorate to focus on critical homeland 
security research and development.
    I think the country is clearly safer as a result, but there has 
been no shortage of problems at the Department as it seeks to fulfill 
its difficult and challenging missions.
    Mr. Schneider, you have tackled many of the big issues in your 
tenure. I appreciate your willingness to do so and I appreciate the 
efforts of over 200,000 DHS employees working to keep the Nation 
secure.
    I am eager to hear about your efforts to help forge a new FEMA 
within DHS. In the past 2 weeks, we have seen the unfathomable 
destruction caused by a cyclone in Myanmar and an earthquake in China. 
We know from Hurricane Katrina what can happen when catastrophe hits. 
And this year our Committee has held a series of hearings on the 
threats and challenges that would ensure from a terrorist attack on our 
country with nuclear weapons. One of DHS's most critical 
responsibilities is to make sure our country is prepared, and I know 
you are heavily involved in that work.
    One of the biggest issues facing the Department--acquisition--is a 
subject you are quite familiar with, based on your previous assignments 
as the top acquisition officer for the Navy and the National Security 
Agency. Some of the Department's largest and most troubled acquisition 
programs--Deepwater, SBInet, radiation detection portal monitors--have 
benefited from your leadership.
    But the Department's heavy reliance on contractors to perform basic 
services raises serious questions about whether DHS is building 
sufficient internal capacity and institutional knowledge. DHS still has 
insufficient capacity to develop requirements and evaluate the 
technical feasibility of contractors' proposals. I know that you have 
taken great strides to build up the acquisition workforce in the past 
year and a half. But much remains to be done, and I look forward to 
hearing your plans for improvement in this area.
    The Department's new initiative to strengthen the security of 
Federal information technology systems--the Comprehensive National 
Cybersecurity Initiative--is another project critical to the security 
of the American people. Given the Administration's request to triple 
DHS's cyber security budget over the past year, I hope you will 
encourage increased openness and information sharing with Congress, the 
private sector, and the American public on this project to ensure that 
it is a success.
    In 7 short months, we will experience a change of leadership here 
in Washington. The time during which a new Administration sets up shop 
is often one of uncertainty or disengagement as employees wait for new 
bosses and new directions. This is also a time, we know from 
experience, which terrorists seek to exploit.
    The Department has been working hard on transition planning, for 
which the Nation should be grateful. I am eager to hear about your 
plans in greater detail, and this Committee will work with the 
Department closely on this issue in the coming months.
    These are just a few of the many challenges ahead for you and the 
Department, but it is essential that they be met and conquered if the 
Department is to succeed in its ultimate mission of protecting the 
Nation from terrorism and natural disasters. We will work cooperatively 
with you to support the Department in these endeavors, in particular on 
an issue that I know you are passionate about, the need for a permanent 
headquarters for DHS.
    If confirmed, you will play a large part in setting the Department 
on course to overcome these challenges. Thank you for your service.

    Chairman Lieberman. I want to note for the record that Paul 
Schneider has filed responses to a biographical and financial 
questionnaire. He has answered pre-hearing questions submitted 
by the Committee and had his financial statements reviewed by 
the Office of Government Ethics. Without objection, this 
information will be made part of the hearing record, with the 
exception of the financial data, which are on file and 
available for public inspection in the Committee offices.
    Our Committee rules require that all witnesses at 
nomination hearings give their testimony under oath, so, Mr. 
Schneider, I would ask you at this time to stand and please 
raise your right hand. Do you swear that the testimony you are 
about to give to the Committee will be the truth, the whole 
truth, and nothing but the truth, so help you, God?
    Mr. Schneider. I do.
    Chairman Lieberman. Thank you. Please be seated.
    Mr. Schneider, I understand you have a few family members 
with you here today. On behalf of the Committee, I would like 
to welcome them, and I invite you, as you proceed with your 
opening statement, to introduce them to us.

TESTIMONY OF PAUL A. SCHNEIDER \1\ TO BE DEPUTY SECRETARY, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Schneider. Thank you very much, Mr. Chairman. First, I 
am really pleased that my wife, Leslie, is here today; my 
sister, Barbara, and my brother-in-law, Gary.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Schneider appears in the Appendix 
on page 27.
---------------------------------------------------------------------------
    Chairman Lieberman. Great.
    Mr. Schneider. There are many people from the Department 
that are here, three in particular I would like to recognize. 
They are Lieutenant Commander Laura Collins, and she is the one 
in the Coast Guard uniform.
    Chairman Lieberman. I figured it out.
    Mr. Schneider. Yes. And I have Brian White, who is the 
counselor to the Deputy Secretary. And last but not least is 
Barbara Lucas. Barbara is the Special Assistant to the Deputy 
Secretary. These three people are, frankly, the main battery of 
the organization that supports the Deputy Secretary and 
responsible for, simply put, just making the place run and 
making whoever happens to be the Deputy Secretary successful.
    Chairman Lieberman. Thank you and we thank them.
    Mr. Schneider. It is an honor to appear before you today as 
you consider the President's nomination of me to be the Deputy 
Secretary at the U.S. Department of Homeland Security. I am 
deeply honored and humbled that President Bush has nominated me 
to serve this great country and its people, and I thank 
Secretary Chertoff for his support throughout this process. If 
confirmed, I look forward to the opportunity and privilege to 
continue to serve under his direction in this position of 
greater responsibility.
    There are many dedicated men and women who are working to 
secure our homeland and defend our freedoms, and it is an honor 
to be able to work with them.
    The specific priorities that I established when I became 
the Acting Deputy Secretary in October 2007 are the ones that, 
if confirmed, I will continue to work on. They include:
    First, preparing for the transition of this Administration, 
which, as you know, is the first time that this Department, a 
relatively new Department, will actually undergo a transition 
of Administrations;
    Second, executing department-wide operations, planning, and 
coordination. It is how we do work, how we operate as a 
Department on the border, in the ports, and every place else, 
both nationally and internationally;
    Third, executing our major programs;
    And, fourth, being able to respond to a national incident, 
whether manmade or natural disaster.
    I hope that my continued willingness to serve the public 
trust, integrity, competence, and the ability to accomplish 
significant and challenging objectives demonstrate the skill 
set and experience needed to meet the significant 
responsibilities required for this position. If confirmed, I 
commit to working with you and your staff, other governmental 
departments and agencies, businesses both large and small, and 
our international partners to make a contribution to securing 
our homeland for today and tomorrow.
    Thank you very much for the opportunity to appear here 
today. I would be happy to answer any questions you may have.
    Chairman Lieberman. Thank you very much, Mr. Schneider. I 
welcome our colleagues, Senator Akaka and Senator Tester.
    I am going to start the questioning with the standard 
questions we ask of all nominees. First, is there anything you 
are aware of in your background that might present a conflict 
of interest with the duties of the office to which you have 
been nominated?
    Mr. Schneider. No.
    Chairman Lieberman. Do you know of anything, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Mr. Schneider. No.
    Chairman Lieberman. Do you agree without reservation to 
respond to any reasonable summons to appear and testify before 
any duly constituted committee of Congress if you are 
confirmed?
    Mr. Schneider. No.
    Chairman Lieberman. Thank you for those strong and 
definitive answers. We will now start with a round of questions 
limited to 6 minutes each per Senator.
    In early 2005, based on reports that I had read, including 
one done by the U.S. Commission on International Religious 
Freedom, I began asking DHS nominees and senior-level officials 
to explain how the Department intended to address the abuses 
and mistreatment of asylum seekers described in that report. I 
must say that I never received satisfactory answers, and in the 
ensuing years, the Department has first opposed and then 
suggested possible compromises to legislation that I introduced 
to try to implement modest reforms here.
    I must tell you, this has been frustrating for me. Recently 
I--and I presume you--have seen and been upset to read even 
more details about the inferior medical care provided to these 
detainees, as documented in articles in the Washington Post and 
other media outlets. And I want to stress that these detainees 
are not being held on criminal charges. These are people whose 
status is not yet determined, and, as a result, processes are 
going forward and they are being held pending that, not on 
criminal charges, though. As some of the reports indicate, they 
often seem to be treated worse than criminals. This is not the 
way America is supposed to behave. I know we can and must do 
better.
    The documents uncovered by the Washington Post are 
especially revealing because they demonstrate the concerns and 
protests of medical professionals who are used to practicing 
medicine in a correctional setting. In one memo, a deputy 
warden at a county jail wrote to a U.S. Immigration and Customs 
Enforcement (ICE) office complaining that the agency had ``set 
up an elaborate system that is primarily interested in delaying 
and/or denying medical care to detainees.'' One Department 
document actually details the cost savings achieved by denying 
medical care for a variety of serious conditions.
    So, generally, I do not know to what extent you have been 
involved in this, but obviously as Under Secretary for 
Management, and now Acting Deputy Secretary, everything comes 
under you. Why is it that after years of complaints and reports 
of improper care, the Department appears not to have taken 
decisive action to improve the medical treatment of these 
detainees?
    Mr. Schneider. Senator, let me start by saying I think it 
is important to put in perspective that it was only, I believe, 
in October 2007 that the medical aspects of the detention 
centers were formally transferred to the Department of Homeland 
Security. Previously, we did not have direct responsibility for 
that.
    What we did upon the transfer of that responsibility was to 
initiate a series of studies by independent groups, 
professionals that were recognized to be able to examine 
detention facilities, to do reviews of the types of health care 
that were being provided, and come up with a series of 
recommendations. They have been compiled. Upon reading the 
first story in the four-part series, we convened a group of 
people to examine all the different studies that have been done 
since we assumed responsibility in October 2007.
    We have asked our Chief Medical Officer, Dr. Runge, to 
review these analyses and come up with whatever group of 
resources he thinks is necessary. His job in our Department is, 
clearly, to oversee the medical care, whether it is in 
detention centers, whether it is the medics that we have in the 
U.S. Customs and Border Protection (CBP) on the border, whether 
it is the Secret Service, etc.
    So I think the fact is that when we assumed responsibility 
in October 2007, we commissioned various efforts to take a look 
by experts at what needs to be done because we were aware at 
the time of some of these stated concerns. And we have Dr. 
Runge taking a look at that.
    I would tell you that I find myself actually over the past 
couple of days reading each story and then talking to 
Immigration and Customs Enforcement to separate fact from 
fiction. And I will just tell you that, in response to these 
stories, we have initiated on the ICE website what we call a 
``Myth Versus Fact Sheet.'' And I would recommend--I would 
respectfully request that the accuracies of some of these 
stories that have appeared be held in abeyance until basically 
we can get our side of the story out.
    I can tell you that they are riddled with inaccuracies and 
misrepresentation of facts, and I think as I said, we have 
already put out--I believe it is two Myth Versus Fact 
Sheets.\1\ Obviously, the article that is in today's paper 
regarding the sedation of detainees we haven't had a chance to 
respond to.
---------------------------------------------------------------------------
    \1\ ICE Public Information releases appear in the Appendix on pages 
97-108 exclusively.
---------------------------------------------------------------------------
    But we take this very seriously. Some of the actions that 
we have taken, for example, in January 2008, we very explicitly 
issued direction that no detainee is to be sedated unless there 
is a court order issued. And that was approximately 2-plus 
months after we assumed responsibility for this.
    Chairman Lieberman. OK. I will certainly look at the myth 
and reality document, but I take it that you are not saying 
that there is no problem here. In other words----
    Mr. Schneider. The fact that people have stated concerns is 
something we have to take very seriously, and that is why, 
frankly, when we assumed the responsibility for the Division of 
Immigration Health Services (DIHS), various efforts were 
commissioned by the then-Assistant Secretary of ICE 
specifically to go look into the quality of medical care being 
provided to detainees. I can tell you just the sheer volume of 
one study in particular--I believe it is called the Nakamoto 
Study--it is literally that thick. And I browsed through it 
because I was interested. It goes into every aspect of medical 
care, from how are supplies issued to how people are examined, 
when do people get referred, with a series of assessments and 
recommendations.
    So the fact is that we took this stated concern very 
seriously when we assumed direct responsibility for the medical 
care.
    Chairman Lieberman. OK. My time is up so I do not want to 
delay turning over to Senator Akaka. I appreciate what you just 
said. My own review of the documents said there is a problem 
here and that DIHS is underfunded and understaffed and it is 
hard for it to meet the normal humanitarian standards that we 
would want to meet.
    I also would say if you get a chance to go back and look at 
the U.S. Commission on International Religious Freedom report, 
back in 2005, it goes to much more than the health care. And 
the point is that a lot of these people are asylum seekers. 
They are people coming here alleging that if they return to 
their homelands, either for reasons of politics or religious 
affiliation, they will be subject to very bad treatment. They 
are ``the huddled masses yearning to be free,'' as it says on 
the base of the Statue of Liberty.
    Obviously not all of them are legitimately entitled to come 
into the United States, but history shows that a lot of them 
are. And I think while we are making that decision, we really 
have a moral obligation to treat them better, generally 
speaking, than we have been treating them.
    I thank you. I am now going to turn it over to Senator 
Akaka.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman.
    Mr. Schneider, let me say thank you very much for meeting 
with me prior to this nomination hearing. And I also want to 
welcome you and your lovely wife, Leslie, and any of your 
family and friends who are here at this hearing.
    Let me start by saying that I am pleased that you are 
willing to continue serving at DHS through the Presidential 
transition. As the transition draws closer, continuity of 
leadership becomes increasingly important, and I was glad to 
hear your thoughts about that. Your management and operational 
experience will be valuable to keeping the Department steady 
and focused on its mission to transition.
    As you know, Mr. Schneider, and many of my colleagues know, 
we continue to have serious concerns about DHS's management and 
operations. One area of concern is DHS's human capital 
management. Senator Voinovich and I introduced legislation last 
month to give DHS the flexibility to hire a career employee to 
be the Department's Chief Human Capital Officer (CHCO). This 
would remove a unique requirement that the CHCO be 
presidentially appointed and make the appointing authority 
consistent across the government.
    DHS's last confirmed Human Capital Officer served for just 
about a year, and DHS has had a series of Acting Directors in 
recent months since her resignation.
    Would providing the Department the flexibility to fill this 
position with a career civil servant improve continuity in 
DHS's human capital management?
    Mr. Schneider. Thank you for the question, Senator. I first 
of all want to say I appreciate the effort on your part and 
Senator Voinovich's part to introduce that legislation. That is 
absolutely essential. Being the Chief Human Capital Officer at 
the Department of Homeland Security is probably one of the 
toughest human resources or human capital positions in the 
Federal Government. The fact that by law it is a political 
appointee means that, for the most part, that person will leave 
on January 20.
    You have no idea how difficult it was for us to recruit the 
gentleman that the President just announced to be the Chief 
Human Capital Officer for what turns out to be the remaining 7 
months of the Administration. And the fact of the matter is one 
of the biggest challenges we have in this Department is human 
capital. Unlike, fortunately, many departments, we are on a 
hiring upswing. Whether it is Border Patrol agents, whether it 
is trying to increase our intelligence capability in what still 
is a very new Department, whether it is to hire contracting 
officers, the challenges that we have in hiring, in 
professional development, are probably unique in the Federal 
Government.
    Having a career civil servant in that job, especially, 
frankly, at this point in time, where somebody could carry over 
to the next Administration, would be absolutely essential, I 
think, to improve the management operations of the Department, 
especially in this very critical area.
    Senator Akaka. Thank you. Mr. Schneider, in the last 3 
months, two U.S.-flagged cruise ships left Hawaii for the last 
time, causing a dramatic economic loss to the State of Hawaii. 
There is only one remaining U.S.-flagged cruise ship operating 
in Hawaii. Now, these ships were forced out of trade by the 
rapid growth in foreign-flagged ships that operate with lower 
costs by avoiding U.S. tax, labor, and employment laws. The 
Passenger Vessels Services Act (PVSA), restricts foreign-
flagged ships' operations at U.S. ports, but it has not been 
enforced adequately. Customs and Border Protection issued an 
interpretive rule on the PVSA in November 2007, but the rule 
has not been finalized.
    Mr. Schneider, time is running out, and unless CBP acts 
soon, there may not be a U.S.-flagged cruise industry left, and 
the coastal States of this country will certainly be impacted. 
Can you assure me that DHS is going to promptly implement a 
rule that addresses the situation in Hawaii and other parts of 
the country? When will CBP's final rule be implemented?
    Mr. Schneider. Senator, I just became aware of this 
situation very recently. I understand what the impact is 
relative to cruise ships, where they stop, what the rules are, 
how dramatically it affects tourism in especially those States 
that are affected by it. I have discussed this with CBP. I 
would commit to you that I will do whatever I have to do to get 
a speedy resolution of this.
    Senator Akaka. All right. Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you very much, Senator Akaka. 
Senator Tester.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. Yes, thank you, Mr. Chairman. I also want 
to thank Mr. Schneider for being here, and thank you for your 
visit to my office, too, earlier. I want you to know up front I 
intend to vote for your confirmation, unless, of course, 
something awkward comes in. We will just put it that way.
    I want to also reiterate our conversation where, if you get 
a chance--Montana has got about 500 miles of border with 
Canada--if you are willing to come up, we would be more than 
happy to show you around. I think it would do us both good. So 
that invitation still stands.
    On the Southern border, you have established the Shadow 
Wolves. On the Blackfoot Reservation, I think that you had 
tried to do something similar to that, use native resources to 
help fill in gaps. Can you tell me if that is progressing or if 
it is yet to progress, or where are we at?
    Mr. Schneider. I, frankly, do not have details on the 
Shadow Wolves--I know who they are. I know what they do. But I, 
frankly, today cannot give you an assessment of that. What I 
will do is go look into that and get back to you.
    Senator Tester. That would be great. It might be an 
opportunity.
    We had talked before, there is some stuff going on on the 
Southern border with a 28-mile stretch of cameras and sensors 
that did not work. They may be available with new testing in 
about 2010, a year and a half from now. What kind of impact 
does that have on the Northern border?
    Mr. Schneider. Well, first I would respectfully disagree--
--
    Senator Tester. That would be fine. You can.
    Mr. Schneider. Yes. I disagree a little bit with the 
characterization of what worked and what did not work. Given 
the fact that it was a demonstration of critical technologies, 
we got out of that demonstration what we needed to get out, to 
figure out what we have to do to modify the ultimate 
configuration so that we have an enterprise architecture that 
works.
    That said, the Northern border, as we have discussed, is a 
significantly different geography, and fences will not work, 
for the most part. What we are doing in the Detroit area is a 
demonstration for the Northern border. This is where we are 
going to have a heavy interface with air assets and marine 
assets. The air asset piece is really kind of critical because 
what our initial feeling is relative to the architecture for 
the Northern border is it is going to rely very heavily on air 
assets, both manned and unmanned.
    Senator Tester. So you are talking about drones and 
airplanes.
    Mr. Schneider. Yes.
    Senator Tester. So the sensors and the cameras are pretty 
much off the table?
    Mr. Schneider. No. What we need to do is, first, 
characterize the border. And so in my discussions with CBP, 
what we plan to do is to characterize the border. That is by 
running manned/unmanned. Let's see what our intelligence shows. 
Let's see what we can identify as the critical crossing points 
and then see what the best solution is.
    Senator Tester. So that technology would be available with 
the right solution?
    Mr. Schneider. Yes, sir.
    Senator Tester. And it meets the needs, it is bulletproof--
or nearly bulletproof?
    Mr. Schneider. I am not going to say anything is 
bulletproof, and the reason being is I have had to testify 
before----
    Senator Tester. OK.
    Mr. Schneider [continuing]. Several committees here about--
--
    Senator Tester. You would be comfortable with it, though. 
Let's put it that way.
    Mr. Schneider. Well, I am comfortable that once we 
characterize the border, we understand what the threat is, we 
take a look at what the critical areas that need to be 
protected that we, with a combination of different types of 
assets, will figure out the best architecture.
    Senator Tester. Well, and the reason is because--I think I 
told you in the office, and I think I made the statement on 
this Committee. I live 80, 90 miles south of the Canadian 
border. We are talking about implementing things like REAL ID 
and listening in on people's phone conversations, and the list 
goes on and on and on. And I dare say I could jump on a Honda 
motorcycle and hop across that border if I pick my spot.
    And so it is important that we--and I do not mean that as a 
negative to what Customs and Border Patrol is doing. They are 
doing great work up there. But you have got 500 miles, and 
Montana is not the only State in the Union that shares a border 
with Canada.
    What is going on as far as agents go? We are 1,500 short. 
What do you plan on doing over the next 7 months--and that is 
not just Montana. That is across the Northern border; 1,500 
manpower short is what the studies have shown us. I hope that 
is information you have got, too, because if you do not, then 
we have got problems.
    Mr. Schneider. First of all, one of our many focuses in 
hiring is the CBP agents.
    Senator Tester. You have to, because----
    Mr. Schneider. I forget the exact number that we will hire 
by the end of the year. We are on track to meet that number, 
and that is a number that we look at. It is not just the hiring 
number, quite frankly, but basically it is the throughput of 
what we have to do then to send them to the Federal Law 
Enforcement Training Center.
    Senator Tester. No doubt about that.
    Mr. Schneider. We are currently on track to meet the stated 
hiring goals----
    Senator Tester. By when?
    Mr. Schneider. The end of this calendar year is--I forget 
the number. I thought it was 1,200 that we were----
    Senator Tester. Well, it is in the ballpark. If you get 
1,200 by the end of the year, that is a great success.
    Mr. Schneider. We are on track to meet those numbers.
    The other thing is, as I believe the Secretary has 
testified in front of this Committee, our plan----
    Senator Tester. How many of those are going to be in 
Montana? Could you get back to me on that?
    Mr. Schneider. Yes, sir.
    Senator Tester. All right. Thank you. We have other issues 
that I need to talk to you about, airplanes and that kind of 
stuff. But you have 7 months left--and I appreciate your 
service for the last 6, by the way, and before that. But you 
have 7 months left, and you could really make a difference, and 
there are things that need to be done that do not cost a lot of 
money in the overall spectrum of things. And I hope you grab 
the bull by the horns and you ask me to support you in it, 
because I will.
    Mr. Schneider. Yes, sir.
    Senator Tester. Thank you.
    Mr. Schneider. Well, just if I may follow up, you asked me 
when I met with you about that radar.
    Senator Tester. Yes.
    Mr. Schneider. And so I have actually been trying to 
understand a little bit more about it. So I have gone back, and 
I found out, in fact, that there has been--it was last summer--
a National Guard demonstration of the radar, and the results 
were inconclusive.
    Senator Tester. Inconclusive, by the way, means it did not 
work.
    Mr. Schneider. Well, I am trying to understand why it did 
not work, quite frankly. It is one of the things I intend to 
get into, and the reason being is based on your description of 
the geography----
    Senator Tester. It should have worked.
    Mr. Schneider. It should have worked.
    Senator Tester. Yes.
    Mr. Schneider. So that is why I need to get into that, and 
I will.
    Senator Tester. OK. Thank you very much. I appreciate it.
    Chairman Lieberman. Thanks very much, Senator Tester. 
Senator McCaskill, good morning.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Thank you. Thank you, Mr. Chairman.
    I would like to talk a little bit about ICE. I saw that you 
had another huge raid in Iowa a few days ago where 300 
different people were taken for immigration violations. I guess 
what I am most frustrated about is that there are ways to make 
a case. And the Federal Government, because they do not answer 
911 calls, they get to decide what kinds of cases they are 
going to focus on. And I am talking about all of Federal law 
enforcement.
    Now, in the area of immigration, there is a decision that 
is made somewhere: Are we going to focus on the employers or 
are we going to focus on the immigrants?
    What I am waiting for and what I am curious about, there 
was no need to go out there and round up these 300 people. You 
could have probably pulled a dozen of them out of the 
workplace, interviewed them, gotten the documentation, or lack 
thereof, and built a case against the employer. So the headline 
would not be ``300 illegal immigrants arrested at a processing 
plant in Iowa.'' The headline would be ``The plant manager is 
taken out of the place in handcuffs and charged with a 
felony.''
    And what I do not understand is what is it going to take to 
get the focus of ICE on the employers. There is no way the 
people running that plant were not fully aware that it was full 
of illegal immigrants with flawed documentation. And a rookie 
prosecutor right out of law school, if given the assignment, 
here are three or four investigators, see if you can figure out 
how to make a case against the knowing hiring of illegal 
immigrants en masse across this country, it would not take that 
much to do it.
    And I am not saying--I pounded the table about George's in 
Missouri, and finally, there was an indictment, some kind of 
criminal charge against someone in management at George's, the 
chicken processing plant in Missouri.
    But I keep seeing these headlines, and what it does is we 
round up these people, we put them in administrative hold, we 
have the kind of questions like the Chairman asked about how 
they are being treated. It costs a lot of money, and if we saw 
the people who were knowingly hiring illegal immigrants because 
of the cheap labor costs going to prison in this country, it 
would overnight have a miraculous impact on the problem of 
illegal immigration.
    Why are you as a leader at this Department not saying, 
``Hold off on the massive raids, and build a case against the 
boss?''
    Mr. Schneider. Senator, I think we are trying to do all 
this. As you know, we have this E-Verify system, which we are 
actively trying to get the employers--I think somewhere between 
250,000 and 300,000 employers have already signed up--to 
actually check their people to make sure--in fact, it is 
relatively easy to do--that the people that they hire are here 
legally.
    What we have not done a good job of advertising, quite 
frankly, is our outreach program to the various industry 
sectors to get at the people and the employers. We spent a 
tremendous amount of effort, and whether it is the livestock, 
whether it is toys, whether it is in agriculture, we have an 
extensive outreach program that is key to getting at the 
employers.
    So it is really to get them to verify their people. It is 
outreach to basically say, look, you have a problem, we need to 
work with you; you need to police your own. In an ideal 
situation, our effort ought to ultimately be just one of 
checking compliance.
    That said--and I am obviously not a law enforcement expert, 
but I know within our organizations on the law enforcement 
side, they go and painstakingly put together what they consider 
to be a valid case. And that case concludes at a certain point 
in time. If they believe that they have sufficient 
justification to go take an action like they have, they go do 
it.
    So I think in an ideal situation, I would like to see every 
employer in the United States sign up to E-Verify.
    Senator McCaskill. You will get them to sign up a lot 
quicker if you take some of them to jail.
    Mr. Schneider. I am with you on that.
    Senator McCaskill. Well, it does not appear that you are, 
honestly. And I do not mean to be hard to get along with here, 
but these are people who are knowingly making these decisions, 
and these cases could be made, and they simply are not being 
made a priority. And I will guarantee you could take 15 or 20 
of those illegal immigrants, and you could pull them aside 
quietly and say, ``You know what? We are not going to deport 
you, but you have got to help us build a case. What were you 
told about the need for documentation at this plant? Who told 
you this? Did they tell you you could bring in the same Social 
Security that somebody else brought in and it would not be a 
problem?'' And you just start following the evidence. It is 
called ``turning witnesses against the bad guys,'' and it is 
how law enforcement operates in this country. It is how we get 
the big whales instead of the little fishes.
    And all we are doing in immigration right now is getting 
the little fishes, and nobody has their scope on the big 
whales. And until we land a couple of those big whales, we are 
going to continue to spend more money than we need to spend, 
and we are going to continue to be more inefficient than we 
need to be in clamping down on illegal immigration. The walls 
are not going to do it. The border fences are not going to do 
it. As long as those people think they can come and feed their 
families in this country and can get a job, they are going to 
come. They are going to come because they care more about 
feeding their families than they do about whether or not they 
are going to be shipped back in 6 months.
    On the other hand, if they come over and cannot get a job, 
they are going to not come over. And it is the only way--and I 
do not understand why there is not a sense of urgency.
    Mr. Chairman, I know that we may have another round. I have 
some specific concerns about answers about the ICE pictures 
that were in the responses that were given to the Committee, 
and I will be glad to wait until both of you question again to 
go into that. Thank you very much.
    Chairman Lieberman. Thanks, Senator McCaskill. We will do a 
second round. I will begin it now.
    Mr. Schneider, I want to talk to you about national 
preparedness. As you may know, this Committee has been holding 
a series of hearings on the difficult but, nonetheless, 
realistic threat of nuclear terrorism within our country. We 
have established, based on the testimony of senior American 
Government intelligence officials, that there is a credible 
threat that al-Qaeda or other Islamist terrorists will attempt 
to detonate a nuclear device within an American city.
    We have heard testimony from the Commission on the National 
Guard and Reserves that there are ``appalling gaps in our 
preparedness'' for such a catastrophic event, and that the 
Department of Homeland Security in particular, according to the 
Commission report, has not demonstrated the necessary urgency 
to plan and prepare for a nuclear scenario.
    Tomorrow, the Committee will be holding a hearing in which 
we will take testimony from experts in medical care, that is, 
medical surge capacity in the case of such a catastrophe, mass 
care and communications.
    What we are trying to accomplish in doing all this is to 
make this difficult scenario, difficult to even focus on, more 
realistic, because we believe it is realistic as a threat, and 
then to see that we are making real progress in preparation as 
a government and a society, obviously, first of all to prevent 
it, but, second, to be prepared to respond to it.
    So I wanted to ask you generally, in your view, what is the 
state of preparedness to respond--leave aside the prevention 
for a moment--to such a catastrophic terrorist attack using 
nuclear weapons and focus, if you will, on some of those 
questions we will consider tomorrow, such as the capacity of 
our public health system to surge and also communications 
capabilities.
    Mr. Schneider. Senator, first, let me say that is a 
scenario that we worry about. I believe we have 15 national 
scenarios that we worry about and we plan for.
    In the case of the detonation of a nuclear device in the 
continental United States, what we do is--we summarized in a 
letter to you, I think it was on March 26 or April 26 of this 
year, basically a compilation of all the interdepartment 
responsibilities and plans, and that covers intelligence, 
detection, incidents, and incident response and recovery.
    I would say that, in general, what we do is we work across 
all of the departments. This is not unlike what we are doing, 
frankly, as we speak, in terms of preparedness for this current 
hurricane season. And so while the scenario is different, I can 
just tell you, since we spent a fair amount of time the other 
day in hurricane preparedness, it works like this:
    It is all the departments, and that includes Lieutenant 
General Blum from the National Guard; that includes General 
Renuart from NORTHCOM; that includes HUD, HHS, ourselves, DOD. 
We take a look at every aspect in terms of capacity. We look at 
it in terms of housing. We look at it in terms of sheer 
logistics. We understand State by State.
    For example, we know precisely in hurricane season State by 
State how many National Guard people are basically available 
within each State. We know in terms of the major commodities, 
whether it be water, food, blankets, tents, power generators, 
etc., we know what the Federal Government has and we know State 
by State. And so we are planning for it.
    I think with the issuance of the National Response 
Framework in early January, it sets the basic framework for how 
we do this interdepartment coordination as well as the 
framework for how we deal with State and local officials.
    Chairman Lieberman. Do you have similar plans and have you 
had similar meetings with regard to a weapons of mass 
destruction attack?
    Mr. Schneider. No, I am not aware that we have. I would say 
that once we issued the National Response Framework, we have 
work underway on each of the 15 scenarios. Ultimately, we will 
get down--and this ends up being the hierarchy of plans. You 
have strategic plans, tactical plans, and then detailed 
operational plans.
    I mean, it is to the point where, for example--and I get 
back to the hurricane season only because it is something we 
live every day. But we know, for example, State by State on the 
Gulf Coast how many people each of the other States could 
house, for example, if we have to evacuate them. We know what 
resources are required to evacuate them. We know how to get to 
those people. We know how to get them out, and we know how to 
get them back. Ultimately, that level of specificity would be 
part of each one of these scenarios at the detailed deck-plate 
operational level.
    Chairman Lieberman. The great challenge of this Department 
is that this is a big, open country, and that is part of what 
makes America, America. It makes us also vulnerable. The range 
of attacks that one could imagine in this current threat 
climate is very wide, so there is a lot of pressure on you. I 
remember the day that somebody on the Committee asked Secretary 
Chertoff the classic question, the familiar question: What 
keeps you up at night? And he said the fear of a terrorist 
detonation of a nuclear weapon in an American city.
    So I urge you in this position to drive planning and 
preparation for a response to a nuclear terrorist attack which 
will not be totally dissimilar to what you need to respond to a 
natural disaster, but I think you would agree would involve 
elements that go beyond that.
    Mr. Schneider. Mr. Chairman, if I may, I am a nuclear 
engineer by profession.
    Chairman Lieberman. Right.
    Mr. Schneider. I understand the severity and the magnitude 
if, God forbid, something like this should happen. And when I 
had my staff interview with your respective staffs, one of the 
folks asked me, well, what is your biggest worry? And that is 
my biggest worry, exactly just like the Secretary. I am very 
acutely aware of what one of those devices could do, and, 
frankly, it is very scary.
    And so I will commit to you that I will personally go take 
a look at where we are on the detailed planning for that 
particular scenario and see what I can do to expedite it.
    Chairman Lieberman. And then I want you to promise to come 
back and tell us what more you need to be truly prepared for 
it.
    Mr. Schneider. Yes, sir.
    Chairman Lieberman. Thank you. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Mr. Schneider, as Senator Tester suggests, the Department's 
SBInet Project 28 (P-28) has been criticized for many problems. 
DHS did not adequately spell out the contract requirements. The 
timeline was unrealistic, and DHS did not manage and oversee 
Boeing's contract performance adequately.
    Because DHS tried to do too much too quickly without proper 
oversight, problems with the software were not understood until 
very late in the process, and the entire project did not 
function as expected.
    According to a recent Washington Technology article, DHS 
has stated that it expects to begin operating the first two 
permanent segments of SBInet radar towers in Arizona as early 
as December. These sections will span 83 miles of the border.
    Is this timeline realistic? Should we be worried that DHS 
is still trying to push this project forward too quickly 
without enough oversight?
    Mr. Schneider. Senator, first, thank you for the question. 
That article points out what is basically a problem I have to 
wrestle with every day, which is what is in the press and what 
do I have to do to fix it if it is not correct. So, 
unfortunately, they ignored the complete statement, the 
information that Customs and Border Protection provided.
    Quickly, on the SBInet, what we are doing is we are 
basically developing--and, actually, we are in the middle of 
integration testing in Huntsville right now--the software build 
for the next generation of SBInet.
    We also learned from the testing what problems with 
hardware--whether they be unmanned ground sensors, whether they 
be cameras, whether they be radars--need to be fixed. Once we 
do the software testing at Huntsville, then we are going to 
integrate it with the land-based hardware, satisfy ourselves 
that it is going to work, and then, and only then, go back to 
Tucson and basically reconfigure the site in Tucson, which we 
are now calling Tucson-1, to reflect the upgraded hardware, the 
upgraded software, that has been land-based tested.
    I might point out that because of the press of schedule 
early on, that land-based testing was not done. It was not 
done, and many of the problems that we found out on the 
mountains, we could have found out in the lab. But we did it 
under the press of schedule. But only when we are satisfied 
that the software testing, the land-based hardware integration 
software testing, is satisfactory will we go back there.
    That is the section in Arizona that is referred to in the 
Washington Technology article. We have said that all along. 
When our folks have briefed the Committees, the staffs, we 
explained we are going to do this land-based testing and go 
back to Tucson. And we have identified a second site, which I 
think it is--we call it Ajo-1. But it is only after we complete 
this land-based testing and satisfy ourselves that the system 
is satisfactory.
    So this is the plan. When we basically said in December, 
time out, we have got to get this right, stop the deployments, 
let's go back, fix all the problems. We delayed acceptance of 
what we call P-28 until the most egregious deficiencies were 
corrected. Then we ran operational testing with Border Patrol 
agents. We identified more deficiencies that needed to be 
fixed. The Secretary and I personally went through every one--I 
think it was 52, 53 deficiencies--to satisfy ourselves that the 
ones that were not fixed--it boiled down to four--were because 
it was not worth the money or because we knew we were going to 
have a software fix in the new software build. We satisfied 
that. Then we took basically control of final acceptance. We 
did this, limiting, frankly, our expenditures to only $20 
million.
    So now I think we have restructured the program properly. 
We are restructuring the contract. As you said, frankly, when 
this program was started, I do not believe we had the numbers 
nor the skill set of people to adequately manage this 
particular contract. We have changed that around. The mix is 
substantially different with a large number of Feds that are 
technically competent to go direct this effort.
    So this is the plan that we have said all along that we are 
going to do as a part of restructuring the program. The 
unfortunate thing is it came out in the press--and I have to 
tell you, the first thing I did when I read that thing one 
night, I said, ``What is this?'' Because it did not sound 
anything like our plan. Then what I found out was what 
Washington Technology abbreviated, condensed, frankly, with 
serious omissions, was our plan.
    Senator Akaka. Thank you. Mr. Schneider, Director McConnell 
recently testified that the National Counterterrorism Center 
has trouble obtaining detailees from DHS's Office of 
Intelligence and Analysis. I understand that the amenities in 
the Office of the Director of National Intelligence (ODNI) are 
much more attractive, and DHS worries about losing needed staff 
to the ODNI if its intelligence officers see where the grass is 
greener, so to speak.
    Are there issues in addition to DHS's need for better 
facilities? For example, have you done surveys of morale in the 
DHS intelligence components to see if your staff is satisfied 
or frustrated with their work?
    Mr. Schneider. Well, yes, and thank you for that question. 
I had to testify in front of the House Homeland Security 
Committee, and they asked me a question in general somewhat 
related to this, and I basically said our place is a dump. And 
it is very hard, especially in the intelligence area, to 
recruit. So let me answer this in a couple of parts.
    Our facilities are absolutely terrible. We are bursting at 
the seams. It is a 62-year-old facility. We are digging up the 
roads every day. I really appreciate, Mr. Chairman, as a result 
of my conversation with you about a month ago, your letter to 
the appropriators. That actually resulted in the appropriators 
going out and visiting St. Elizabeth's, I think it was last 
week. And I want to thank you on behalf of the 3,000 people 
that work up at the National Advisory Committee (NAC). The 
facilities are terrible. It really does affect morale.
    Now, specifically with regard to intelligence, hiring 
people in intelligence is very difficult, and the reason being 
is we have a very difficult time competing with the other 
intelligence agencies, be it NGA, DIA, NSA, or CIA, and the 
reason being is this: Our facilities are not conducive to good 
work and good morale. Just go to the CIA, go into the 
cafeteria, take a look at the beautiful campus-type facility. 
And if you were an intelligence analyst, would you rather work 
at the CIA or would you rather work at DHS? And so we have a 
hard time competing with other intelligence agencies.
    It is even worse when you take a look at the private 
sector, and the reason being is there is a substantial cost 
differential between what we can pay somebody, a journeyman 
intelligence person, versus the private sector. Based on my 
experience in NSA, my estimate of the delta in cost is roughly 
30 percent, and I do not care whether it is a GS-12 earning 
$66,000 a year, the private sector on a contracting officer 
will pay him $95,000. I used to lose a lot of contracting 
officers because they are 27 years old and they want to make 
$95,000 instead of $66,000. And the delta only goes up with 
more experience.
    So the problem is this: I have a hard time competing within 
government, and so then I get these bright young folks from the 
private sector, and we get them in, and then they look at us, 
they look at CIA, NSA, beautiful--at NSA they are building a 
lot of new buildings at Fort Meade as a result of Base 
Realignment and Closure (BRAC). Who is going to get the talent? 
We have a hard time getting the talent.
    That said, what we have been doing is growing our own. We 
go out to the colleges and universities. And I would say the 
Under Secretary for Intelligence and Analysis, Charlie Allen, 
is very personally involved in this, actively going out there. 
And the only thing we have going for us, frankly, in the 
competition is the mission. This is a mission that people 
understand in this country--keeping our country safe and 
secure. And so people relate to the mission, and that is what 
attracts them. So we have had success in getting at the entry 
level--but it takes, I think, 5 to 6 years to be able to fully 
develop a journeyman intelligence analyst.
    Let me answer the last part of your question. I have been 
to the National Counterterrorism Center. We work very closely 
with the Director, Mike Leiter. I have been there. I have 
talked to our people that are on the floor, and I think the 
NCTC does a wonderful job. I will work with Charlie Allen to 
see if we can make sure that we provide as many people as we 
possibly can to meet his need because the work that they do is 
very valuable, and we and everybody else in leadership and, 
frankly, in this country benefit from it.
    Senator Akaka. Mr. Chairman, I just want to thank Mr. 
Schneider for his response. It is great to hear that response, 
and it can come only from someone who is a career person and 
who has been servicing our Federal Government for 40 years. 
Thank you very much.
    Chairman Lieberman. Thanks, Senator Akaka. I agree. I was 
thinking that the transcript of your answer to the last 
question will not reveal the passion with which you answered 
it, and I appreciate the passion. We almost had the money for 
the St. Elizabeth's site, for a new headquarters in the 
supplemental appropriations, but the so-called domestic 
spending, for reasons that you understand, got cut down. I 
think people are aware of this. This is a very urgent need. 
There is a chance it will be included in a second economic 
stimulus. I do not know what the prospects of that are for 
passage. If not, we are going to make a real effort to get it 
into the fiscal year 2009 appropriations or an omnibus 
appropriation, if that is what it is. Because, as you can see 
by the range of questions we are asking, or anybody here can 
see--you live with it--we are asking a lot of this Department 
and the people who work in it. And to put you in really 
substandard facilities is just wrong. So we have got to change 
that quickly, and I will do the best I can to make sure that 
happens.
    Mr. Schneider. I really appreciate it. If I could just add 
one thing about this, this move to St. Elizabeth's, it is not 
just about a physical real estate move.
    Chairman Lieberman. Right.
    Mr. Schneider. What we did--and I think it was a smart 
thing to do--is we as part of this move figured out and totally 
restructured how our operation is going to work. It is a 
business process restructuring. So it is not just the physical 
collocation of roughly 14,000 people. It is what ought to be in 
the front room? What ought to be down in the back room? This 
enables us to fix a lot of problems that we have been 
criticized about relative to IT infrastructure and operations 
coordination.
    The other thing it enables us to do, quite frankly, is we 
are scattered all over the DC area, and so the problem we have 
is we are paying a fortune in these leases. And so what we did, 
as part of sequencing our move in three distinct steps, was to 
sequence them so we could benefit, if you will, and not have to 
renew a lot of these leases that, frankly, would be at somewhat 
unfavorable prices.
    So it is not just a space thing. This is the business 
process that we think the Department needs for the future, and 
we want to get out of being captive to these leases, which, 
frankly, are going to cost us in the long run probably more 
money than we have currently budgeted because of the fact we 
planned on St. Elizabeth's.
    Chairman Lieberman. Well said. Thank you. Senator 
McCaskill.
    Senator McCaskill. Thank you, Mr. Chairman. And I 
appreciate the testimony you just gave about the lease issue. 
It is a huge issue across government, how the lease-purchasing 
is going on and getting around the capital needs budget. It is 
a huge problem in the Department of Defense. There are more 
temporary buildings in the Department of Defense that have 
sprung up over the last several years, and it is not a good 
cost-benefit analysis for taxpayers.
    I want to revisit an uncomfortable situation, and that is 
the photograph of the ICE employee taken at the Halloween 
party. And here is my problem with what has come to light.
    You said in your questioning to the Committee that you were 
informed of the Committee's request for copies of the 
photograph the week of November 12, 2007. So at the very 
highest levels of the Department, there was an awareness that 
there was a congressional request for a photograph. You also 
were aware that they were trying to restore the photograph 
based on the report that you received at or about that same 
time.
    So we know the middle of November that Congress wants the 
photograph, and we know that it is trying to be restored. And, 
frankly, restoring a digital photograph is not something that 
takes weeks.
    Now, the problem is that the only time this photograph was 
produced was when we got it from CNN after a Freedom of 
Information Act (FOIA) request delivered in February. And the 
problem with that is that Julie Myers' position was being held. 
She was not going to be confirmed, and it was not until after 
the hold was released that we saw the picture.
    Now, that is a set of facts that are troubling to me. I 
would hate to think--and I am not making the accusation--that 
is what occurred. But this is the kind of thing that gets your 
nose a-twitching in terms of trying to figure out what happened 
because it smells. It looks like the photograph had been 
restored and that the Department was aware that we wanted a 
copy of it, but yet waited until after her confirmation had 
gone through.
    I want to give you a chance to respond to that.
    Mr. Schneider. Well, once the request was made, as I 
indicated in my question where I was informed of the 
Committee's request for the copies of the photograph 
approximately the week of the 12th--that is the best of my 
recollection. The fact of the matter is--and I was aware based 
on the Office for Civil Rights and Civil Liberties (CRCL) 
report that they were trying to restore the photographs.
    From that standpoint, first, when I read the report that 
was given to me, I made a note, ``Fine, they are trying to 
restore the photographs,'' and that was it, frankly. The 
Committee's request for photographs, fine, I was aware of that. 
But I did not take any deliberate action personally to see that 
the Committee received those photographs, just like I do not 
take, usually, any specific action in response to what might be 
tens or twenties of hundreds of requests----
    Senator McCaskill. Sure.
    Mr. Schneider [continuing]. For information over a period 
of time. I just do not do that.
    Senator McCaskill. You should be aware that--and I 
understand that, and I am not holding you personally 
responsible. There is a little of ``the buck stops here'' that 
I could draw up.
    Mr. Schneider. Right.
    Senator McCaskill. But you should be aware that the 
response from the people directly involved was that they were 
not aware we wanted a copy of the photograph. So if you were 
aware it----
    Mr. Schneider. I was aware.
    Senator McCaskill. Yes, and so it is a little troubling 
that they are now trying to maintain that we did not request it 
in writing or there was not--there is some sense that we are 
getting from the people directly involved at ICE that we did 
not go far enough to request this photograph, that it took a 
FOIA request from CNN for this photograph to surface. And, 
clearly, that is not the way it should work.
    Let me also just briefly, before we finish today, I am a 
little worried about the relationship of the Inspector General 
at the Department of Homeland Security. I recently learned that 
a subpoena had to be issued by the IG in the Department of 
Homeland Security to acquire contract data from FEMA. Now, it 
is troubling to me that we would have to have a subpoena by the 
IG to get contract data, and I wanted to get your response to 
that troubling reality.
    Mr. Schneider. Well, that is troubling, and it is 
unacceptable. If that is one that occurred months ago, I do 
not--because I am aware of an instance that occurred months 
ago, and, frankly, when I heard about it, I was outraged for a 
couple reasons.
    I have a tremendous amount of respect for the IG. I do not 
understand if he is not getting information--and he and I have 
had this conversation, frankly, as a warm-up to a hearing in 
front of this Committee, I think it was last October or 
November with the GAO. We established what I considered to be 
protocols, which is basically that if the GAO or the IG cannot 
get information from one of our component organizations, I told 
them, ``Pick up the phone and call the head of that 
organization. And if you do not get an answer from them, then 
pick up the phone and call me.'' And the Secretary has 
basically said the same thing: ``If you do not get an answer 
from me, then pick up the phone and call him.''
    What I was troubled by and outraged by, to the best of my 
knowledge if this is the instance, the situation where that was 
not raised to the head of the agency. That is unacceptable. The 
IG is an integral part of our Department. There should be no 
assuming proper markings and all that--there should be 
absolutely no reason that I can think of why that should not 
have been provided. And I was very upset, frankly, when I heard 
about that instance. I picked up the phone and I called the 
head of FEMA, and I said, ``What gives?'' He said, ``I know 
nothing about it.''
    So I have to agree with you, that is unacceptable, and I am 
hopeful that does not happen. As a general rule, I, as the 
Under Secretary, used to meet monthly with the IG, and the 
reason is the Under Secretary for Management is responsible 
within the Department for coordination with the GAO and the IG. 
And one of the things I say is: Who is not cooperating with 
you? Because I want to know. And so that specific was not 
brought up at that particular point in time.
    Senator McCaskill. Well, thank you for being concerned 
about it, and I do know that you and all the other people that 
work there are not working there for the big money you are 
making. You have a sense of public service, and you want to try 
to do the right thing, and I hope you appreciate that in our 
role it is our job to try to bring down the thumb of 
accountability every place we can. And I do thank you for your 
service to your country, and I wish you well over the next few 
months.
    Mr. Schneider. Thank you very much.
    Senator McCaskill. Thank you.
    Chairman Lieberman. Thanks, Senator McCaskill. Senator 
Akaka, I think you have a few more questions.
    Senator Akaka. Yes, Mr. Chairman, and I thank you.
    Chairman Lieberman. Not at all.
    Senator Akaka. Mr. Schneider, the Federal Protective 
Service (FPS) is facing significant budget difficulties since 
it was transferred from the General Services Administration to 
DHS. Previously, GSA made up the deficit with money from the 
Federal Buildings Fund. FPS now is entirely fee-funded.
    In the past, the Department has stated that it does not 
need an appropriation to cover some of the FPS's general 
expenses. What is your view on this matter? And should Congress 
appropriate money for some of FPS's general expenses?
    Mr. Schneider. Senator, let me tell you what I know.
    First, you are absolutely correct. The FPS was transferred 
to the Department without the full cost of operation. They 
covered with other funds an annual operating loss that was, 
frankly, a substantial amount of money. So right from the get-
go, we were behind the power curve, and we were expected to eat 
that out of DHS resources, which, frankly, was not a good deal 
for us.
    So what we have done is a series of rate increases. We 
have, we believe, in terms of what our fees are to the 
customer, to pass it on to the customer, and some of these 
customers, to be honest with you, are not happy about the fact 
that we are increasing their rates. But the fact is they got a 
free ride, frankly, because GSA picked up the operating loss.
    So we have adjusted our rates based on square footage to 
where we believe that we are fully solvent, and we can, 
frankly, hire up to the mandated level--I think it is 1,200--by 
the end of this year. We are on track to do that. We believe we 
have a sound financial basis to go do that.
    Now, when I have asked this question because in some of my 
visits around the country, I get rave reviews about the 
performance of the FPS. And some of the folks that are their 
customers have personally gone out of their way to come up to 
me to talk about the great job that they do, and they wish they 
could give them--get more services for them, and they are 
willing to provide money.
    So that led me to--and I have not completed this yet, but 
there is like three different funding streams that fund the 
FPS. One of them is almost like a base support; then there is 
another that is a reimbursable; and then there is a third 
strain that I cannot remember what we call it.
    What I have not got the answer to is this: Whether or not 
we have within our authority to take on all the customers that 
would like to fund FPS, or whether or not I need legislation to 
fix that. Right now, from what I have read and studied, it does 
not appear that we need legislation. It appears it is within 
our authority. But one of the things I would like to do, only 
after I do that review, and if, in fact, I do conclude that we 
need some more flexibility from a funding standpoint, I would 
like to come back and talk to you about how we do that. And the 
reason is because they provide a very valuable service. From 
everything I can tell, their service is highly valued by their 
customers. And if more people want more service than are 
willing to pay, then I want them to be in a position to be able 
to accept that money.
    Senator Akaka. I know you have been quite passionate about 
personnel. Over the next 5 years, the Office of Personnel 
Management estimates that approximately one-third of the 
Federal workforce will retire. Last week, we held a 
Subcommittee hearing to discuss the barriers to entry for the 
next generation of Federal employees. Agency leadership and 
reforming the recruitment and hiring process were among the 
central recommendations.
    What plans do you have to improve the recruitment and 
hiring process to ensure that DHS is removing barriers to 
attracting the best and the brightest to DHS?
    Mr. Schneider. Thank you. I think the exodus that people 
are talking about is somewhat precipitated by baby boomers and 
shortly thereafter. The situation, quite frankly, is 
exacerbated by the fact that in many departments, from the late 
1980s to the mid-1990s, there was a hiring freeze, basically, 
and the way the hiring freeze worked is you basically cut off 
the spigot and basically achieved your reductions that were 
mandated by attrition, which is the worst way to do this.
    And so the fact of the matter is it just compounds the 
situation where you have this exodus of people based on age and 
what people typically do when they retire, as well as this void 
in the pipeline.
    So we have recognized that along with the other departments 
in government, and so what we have been doing is we have a 
massive hiring campaign. We are out, frankly, with job fairs, 
with ads. We have had one-day job fairs in the Reagan Building. 
We had 1,200 people show up. We go out to the Midwest, we go 
out to the Southwest, we go up to the North to try and attract 
people.
    Our Department is working together not just one agency 
going out trying to recruit, but basically it is a department-
wide recruitment effort. We have many entry-level programs 
where--we have intern programs, for example, that we have 
started, primarily to build up our acquisition workforce and 
other specialty areas. In the case of our policy people, we 
have scholar programs that we have initiated with Harvard to 
get some of the bright minds that are out there interested.
    I continue to be encouraged by a lot of very bright people 
who want to come work in our Department, either from a law 
enforcement standpoint or from a policy standpoint, and the 
reason being is from a policy standpoint, where people realize 
that many of the issues that this country is going to wrestle 
with over the next couple of years are going to be major policy 
issues regarding security of the homeland--this trade-off 
between what you have to do to protect and defend versus 
privacy. And so we are attracting some of the best minds from 
some of these really top-notch schools that want to work in 
these areas.
    So I am encouraged, but that does not totally alleviate my 
concern with the sheer numbers. The sheer numbers are dramatic. 
When we are trying to ramp up--and we are trying to convert 
from a contractor workforce to a Federal workforce--and we are 
probably in the most unusual situation compared to the rest of 
the Federal Government, which is why my charge to the new Chief 
Human Capital Officer and, frankly, to Elaine Duke, who you 
have met, who is the Deputy Under Secretary for Management, is 
we have to fix the staffing. We have to get these people on 
board. And it is not just our internal processes, what we do, 
but how well do we work with OPM and the others. How well can 
we get people cleared?
    I think we have done remarkably well in cutting the time 
frame it takes to get somebody cleared, even at the top secret 
SBI/SCI level. It is a problem I spent a lot of time on, and we 
have--I can tell you, one of the things we have done is 
basically almost like a stop-gap measure, plugging holes in the 
dike, is we have taken a large percentage of our folks that 
work in the Chief Human Capital Office and said it does not 
matter what you were doing yesterday, today you are working on 
staffing, because we have got to get these people on board.
    Senator Akaka. Well, I want to thank you very much, Mr. 
Schneider, for your responses, and I know that with your 
experience and your background, you understand how important 
personnel and personnel hiring is to our Federal Government.
    I just want to add that I hope in your considerations of 
hiring, the diversity of the Federal workforce would be one of 
your priority concerns.
    Mr. Schneider. Yes, it is. And, in fact, let me just say 
that we are obviously very concerned about diversity. It is an 
established fact our numbers are not as good as they ought to 
be, especially in the senior leadership positions. It is 
something that we actively work at.
    I think what we do not get a lot of visibility on is a lot 
of the development programs where, in fact, if you take a look 
at the people that are selected to these programs, we have a 
very high percentage of minorities and women that have been 
selected for these programs. And so I am encouraged by the fact 
that, as we look to the future, the programs that we have put 
in place to develop these future leaders that will be in a 
position so that they compete successfully for the senior 
executive level jobs in the Department, we will have a solid 
population from which to choose from.
    Senator Akaka. Thank you very much, Mr. Schneider.
    Mr. Chairman, I would urge this Committee to move quickly 
on the confirmation of our nominee. Thank you.
    Chairman Lieberman. Thanks, Senator Akaka. Thanks for your 
contribution to the hearing this morning. I have one more 
question to ask Mr. Schneider, but it certainly is my intention 
to move quickly and see if we can possibly confirm the 
nomination, both through the Committee and the Senate, before 
the Memorial Day break next Friday.
    One of the big concerns that we all had when we created 
this Department--and it is an ongoing concern; I know you share 
it--is the enormous administrative challenge of integrating 
more than 20 pre-existing Federal agencies and more than 
200,000 people.
    I was very interested to learn from my staff that in your 
interview with the Committee staff, you explained that one 
strategy you have for dealing with this challenge was a plan to 
expand the role of the Operations Directorate, and that in 
particular you were thinking of setting up a joint staff from 
the component agencies through the Operations Directorate, as I 
understand it, to do operations, coordination, and planning--
somewhat like the model of the joint staff at the Department of 
Defense.
    I wanted to ask you if you could briefly explain what you 
have in mind here, because I find it very interesting.
    Mr. Schneider. Yes, sir. One of the things that--when I 
became the Acting Deputy Secretary, I found myself involved 
with things that previously I was not involved in. I worried 
about--I call it ``the business of the business'' aspect from 
the management standpoint of what the Department did. I was 
really not that heavily involved in what I would call the law 
enforcement operations.
    By and large, we are a law enforcement operation. Not 
unlike the Secretary of Defense and the Department of Defense, 
the chain of command for, I call it, ``fighting in the war,'' 
is from the Secretary directly to the combatant commanders. And 
so that is very similar, frankly, for how we operate. We have, 
obviously, a headquarters staff, and they work on policies and 
procedures and business. But the fact of the matter is our law 
enforcement operation, the chain of command is directly from 
the Secretary to the heads of TSA, Coast Guard, all the above.
    Chairman Lieberman. Right.
    Mr. Schneider. The issue came up, frankly, when in a 
situation that required us to assemble our forces and figure 
out a coordinated approach to a specific problem, I found 
myself, frankly, sitting at the head of the table as the Acting 
Deputy Secretary shortly into this, trying to understand how do 
we put together a coordinated operational law enforcement plan 
for the specific scenario at hand. And what I immediately 
realized was we did not really fully have the equivalent of a 
joint staff. We needed, not somebody that had direct line of 
control of authority over the combatant commanders, but, 
rather, somebody who would work with all the combatant 
commanders, figure out what the threat was, work with the 
intelligence community, etc., work with the operational type 
people, and put together a comprehensive plan, or at least a 
set of alternatives that could be considered by the Secretary.
    So I talked to the Secretary about it, with others, and 
what we concluded was we needed that type of capability. Now, 
the Secretary in some of his testimony or in some of his 
speeches has been talking about a J-3/J-5 type operation, and 
for those that are familiar with Pentagon lingo, J-3/J-5 is 
operations and planning.
    And so what we have done is we had a team that was put 
together that was headed by a Coast Guard two-star admiral, 
that was made up of all the operational deputies from across 
the component agencies, to figure out what should we do, how do 
we do business, can we do it better, what ought to be the 
structure. They worked this by themselves, frankly, and briefed 
me and the heads of the operating components on a monthly 
basis.
    About a month ago, they came in with their final 
recommendation. We sat down and went through it. We briefed the 
Secretary, and he agreed with it, and it was something that 
they came up with on their own. These are the operational 
deputies saying we think we can do a better job of how we do 
our planning and how we coordinate our operations.
    This is really at the deck-plate level. And so we are in 
the process right now of making that happen. And our plan, 
frankly, is to do it a couple of ways. Our plan is to rely, 
frankly, on the operational expertise that is inherent in each 
of the operating components to staff this operation at 
headquarters with detailees. This brings some of the best and 
brightest operational people that have already developed, 
frankly, a good operational working relationship. It exposes 
them to other areas of the Department, and one of the 
Secretary's initiatives is that we expand the experience base 
for all of our employees, much like what the Director of 
National Intelligence is doing and much like what the Deputy 
Secretary of Defense is doing. And so this will get them 
exposure and in the long run helps solidify the Secretary's 
goal of one DHS.
    So we are in the process of doing that. We are in the 
process of getting detailees, and, frankly, we hope to have 
this up and running next month.
    Chairman Lieberman. I appreciate that. That is very 
refreshing and I think will definitely help in the goal of 
integration.
    I would ask you in regard to that, and more broadly in 
terms of what you are doing, to keep in mind that the Committee 
is working now on a Department of Homeland Security 
authorization bill. The House, as you know, passed one earlier. 
We are not quite sure whether we are ready to go to an annual 
authorization as the Armed Services Committee does for the 
Department of Defense. Maybe we are. Maybe in these early years 
that is important. Maybe we will aim for having one every 
Congress.
    But, in any case, we are working on that now, and if there 
is any legislative language that you would like to kind of 
institutionalize that or other changes you have made or think 
should be made, I urge you to let the Committee staff know as 
soon as possible.
    That is it for me. My staff tells me that in those first 
three questions that I asked, the routine questions, that 
either because of the way I asked the third or perhaps you did 
not hear, that you gave--I do not want to quote you too much, 
Paul, but you said ``No,'' and the answer, I think, is 
different. So let me ask that third question again to remove 
any doubt. Do you agree without reservation to respond to any 
reasonable summons to appear and testify before any duly 
constituted committee of Congress if you are confirmed?
    Mr. Schneider. Yes.
    Chairman Lieberman. Thank you.
    We are going to keep the record open just for a day until 
the close of business tomorrow for any additional comments that 
you want to add and any additional questions that Committee 
Members may have of you. We are going to do it just for a day 
because, as I indicated earlier, my hope is to get you 
confirmed before the Memorial Day break.
    I thank you very much for your testimony today and, in 
general, of course, for your long record of distinguished 
public service.
    The hearing is adjourned.
    [Whereupon, at 11:23 a.m., the Committee was adjourned.]


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