[Senate Hearing 111-1032]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 111-1032
 
        NOMINATION OF MAJOR GENERAL ROBERT A. HARDING, USA, RET.

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

                                HEARING

                               before the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 24, 2010

                               __________

       NOMINATION OF MAJOR GENERAL ROBERT A. HARDING, USA, RET.,
             TO BE ASSISTANT SECRETARY, U.S. DEPARTMENT OF
                           HOMELAND SECURITY

                               __________

        Available via the World Wide Web: http://www.fdsys.gov/

       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              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
JON TESTER, Montana                  LINDSEY GRAHAM, South Carolina
ROLAND W. BURRIS, Illinois
EDWARD E. KAUFMAN, Delaware

                  Michael L. Alexander, Staff Director
              Jason M. Yanussi, Professional Staff Member
               Kristine V. Lam, Professional Staff Member
             Elyse F. Greenwald, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
   Robert L. Strayer, Minority Director for Homeland Security Affairs
                   Jennifer L. Tarr, Minority Counsel
                  Luke P. Bellocchi, 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 Collins..............................................     2
    Senator Burris...............................................    12
Prepared statements:
    Senator Lieberman............................................    21
    Senator Collins..............................................    23

                                WITNESS
                       Wednesday, March 24, 2010

Major General Robert A. Harding, USA, Ret., to be Assistant 
  Secretary, U.S. Department of Homeland Security:
    Testimony....................................................     4
    Prepared statement...........................................    25
    Biographical and financial information.......................    27
    Letter from the Office of Government Ethics..................    37
    Responses to pre-hearing questions...........................    38


        NOMINATION OF MAJOR GENERAL ROBERT A. HARDING, USA, RET.

                              ----------                              


                       WEDNESDAY, MARCH 24, 2010

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

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning and welcome to this 
hearing on the nomination of Major General Robert A. Harding to 
be the Assistant Secretary of Homeland Security in charge of 
the Transportation Security Administration (TSA). Of all the 
changes in American life since September 11, 2001, TSA is 
probably the most visible and, over the course of time, also 
one of the most effective.
    The TSA Administrator oversees an agency that has grown 
literally from nothing to be very large, all around the 
country. You would oversee, if confirmed, General Harding, an 
agency of 50,000 employees, approximately, with an $8 billion 
annual budget and, of course, a very important mission, which 
is to protect the safety of passengers and cargo traveling by 
air, rail, or road.
    We were reminded again just how crucial the purpose of the 
agency is and why getting a first rate administrator on the job 
soon is critical by the attempted Christmas Day bombing on 
Northwest Flight 253 as it was approaching Detroit.
    General Harding, I really appreciate your 33 years of 
service to our country in the U.S. Army. And I am particularly 
pleased that you have agreed to accept this call to serve your 
Nation, again, in such an important position at such an 
important time.
    As the Director of Operations at the Defense Intelligence 
Agency (DIA), which is one of the positions you held toward the 
end of your career in the Army, you oversaw the intelligence 
collection programs used by military commanders and the 
civilian leadership to guide their decisions, very important, 
and involving the expenditure of billions of dollars of tax 
payer money.
    While at DIA, General Harding also managed about 5,000 
employees, including more than 200 attaches stationed abroad, 
which probably will be valuable experience you can bring to 
TSA, if confirmed, because it works so much more closely now 
with the international aviation community.
    General Harding also commanded a U.S.-based 
counterintelligence group that was responsible for 
infrastructure protection at every Army camp, post, and station 
in the United States. As part of his duties in that post, 
General Harding worked with the Federal Bureau of Investigation 
(FBI) and with local law enforcement on-base security experts.
    After leaving the Army, the nominee worked in the private 
sector on intelligence issues, at one point forming his own 
company, Harding Security Associates, which, in addition to 
other work, as is known, did business with the Federal 
Government.
    Questions have been raised as part of the nomination and 
confirmation process about a particular contract Harding 
Security Associates had to provide interrogators for the 
Defense Intelligence Agency.
    I am sure the Committee will explore these issues in more 
detail during the hearing, and I know, General Harding, you are 
prepared to respond to questions and speak at length about 
exactly what happened in that matter.
    If confirmed, you will take charge of an agency that has 
really made enormous strides in the last 7 years to strengthen 
the security of the aviation sector. But as I said, the 
Christmas Day attack reminds us that this is a tough assignment 
and that our homeland defenses still can be breached. I have a 
series of questions that, at this point, I will put in the 
record at the completion of my opening statement, but I will 
get to them with you when we get to that point in the hearing.
    For now, I thank you for your willingness to serve, for 
your cooperation with the Committee in our pre-hearing 
inquiries, and I look forward to your testimony.
    Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you Mr. Chairman, I am pleased to 
join the Chairman in welcoming General Robert Harding as the 
nominee to be Assistant Secretary for the Transportation 
Security Administration.
    The attempted bombing on Christmas Day reminds us that 
terrorists remain committed to attacking our Nation. Whether on 
an airline or in other modes of transportation, TSA performs a 
critical role in protecting us from those attacks.
    While progress clearly has been made in improving our 
security, the fact that Umar Farouk Abdulmutallab was able to 
board a flight with a bomb demonstrates flaws in our Nation's 
system of layered security. TSA must do more to ensure that 
U.S.-bound passengers who are potential threats receive more 
effective screening before they board planes. Terrorists will 
continue to devise new strategies to penetrate our defenses. 
Armed with that knowledge, the TSA cannot be caught flat-footed 
by focusing only on the techniques that terrorists employed in 
the last attack. Our defenses must be forward-looking and 
nimble, and TSA must foster a culture of continuous improvement 
to anticipate new challenges.
    TSA plans to install more than 1,000 Advanced Imaging 
Technology (AIT) machines in our Nation's airports by the end 
of fiscal year 2011. This effort, along with the use of more 
canine teams and the deployment of additional behavioral 
detection officers, represent steps that will increase aviation 
security in the wake of the Christmas Day bombing attempt.
    I am concerned, however, by a recent statement from the 
Government Accountability Office (GAO) that ``TSA does not yet 
have a written policy requiring operational testing prior to 
deployment.''
    Those of us who travel a lot are very aware of TSA's 
previous roll-out of expensive screening technologies, such as 
the ``puffer'' machines, which took place prior to the 
completion of operational testing, resulting in stalled 
deployments and wasted taxpayer dollars. Given that experience, 
it is encouraging that TSA has completed operational testing on 
the imaging machines currently being deployed to U.S. airports.
    But I would like General Harding's assurance that, if 
confirmed, he would ensure that successful operational testing 
is completed on all new screening technologies prior to 
installation. In the military, we call this fly before you buy, 
and I am sure General Harding is very familiar with that 
concept.
    Aviation, however, is not the only sector of transportation 
that merits TSA's vigilant efforts. The agency's mission 
extends to other modes of transportation as well, including our 
system of mass transit. We cannot focus all our resources on 
terrorist threats to aviation alone, as the threat does not 
stop there.
    General Harding, as the Chairman has pointed out, has more 
than 30 years of experience in support of our Nation's military 
and intelligence efforts. He finished his military career as 
second in command at the Defense Intelligence Agency. As a 
result, he knows first-hand the importance of using 
intelligence to guide operations, which will be a critical 
skill should he take the helm at TSA.
    The nominee appears to have many strengths for this 
position. One area of concern, however, is the finding by the 
Defense Contract Audit Agency (DCAA) that General Harding's 
former company overbilled the government by more than $860,000 
on a contract in 2004. I will be asking a series of questions 
on that issue unless the Chairman has covered my concerns.
    I also want to give General Harding the opportunity this 
morning to clarify the role that interrogators from his former 
company played and whether or not there were any allegations of 
wrongdoing related to the work of these interrogators.
    I look forward to discussing these and other important 
matters with General Harding today.
    Chairman Lieberman. Thanks, Senator Collins. General 
Harding has filed responses to a biographical and financial 
questionnaire, 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 General 
Harding, I ask you please to stand and raise your right hand.
    Do you swear that the testimony that you are about to give 
to this Committee will be the truth, the whole truth, and 
nothing but the truth, so help you, God?
    General Harding. I do.
    Chairman Lieberman. Thank you and please be seated.
    General, we welcome your opening statement now and, as you 
choose, the introduction of any family and friends who are with 
you today.

TESTIMONY OF MAJOR GENERAL ROBERT A. HARDING, USA, RET.,\1\ TO 
  BE ASSISTANT SECRETARY, U.S. DEPARTMENT OF HOMELAND SECURITY

    General Harding. Good morning, Chairman Lieberman, Ranking 
Member Collins, and distinguished Members of the Committee. It 
is a privilege to appear before you today as the President's 
nominee for Assistant Secretary of the Transportation Security 
Administration. I am deeply honored by the President's call to 
service and by the support I have received from Secretary 
Napolitano.
---------------------------------------------------------------------------
    \1\ The prepared statement of General Harding appears in the 
Appendix on page 25.
---------------------------------------------------------------------------
    With your kind indulgence, I would like to recognize my 
wife, Connie, who is behind me, and my three daughters; 
Michelle, Anita, and Alex, who could not be here. It is their 
love and support that has sustained me through the years.
    I also want to express my deep appreciation to those I met 
in the course of my 33-year career in the U.S. Army who helped 
shape my ideals, character, and vision. Who I am today is very 
much a product of my time in the U.S. Army. Last, but not 
least, I want the men and women of TSA to know that I am eager 
to join their ranks and to lead them in safeguarding our 
Nation's transportation system.
    The December 25, 2009, attack on Northwest Flight 253 
reminded us of the ever-evolving threat our Nation confronts as 
terrorists seek new and inventive ways to defeat the security 
measures the global community put into place since September 
11, 2001.
    Since its creation following the tragic 9/11 terrorist 
attack, TSA has played a vital role in securing aviation and 
other modes of transportation. If confirmed, I look forward to 
working in close collaboration with our partners in the 
intelligence and international communities; Federal, State, and 
local governments; private industry; and, most importantly, the 
traveling public to continue to meet the challenge of keeping 
our Nation's complex transportation system secure.
    I believe I am uniquely qualified to lead TSA in advancing 
its mission. I have spent over 30 years in the Intelligence 
Community. I have served as the U.S. Army's Deputy G2 for 
Intelligence at the time of my military retirement in 2001 and 
as the Director for Operations at the Defense Intelligence 
Agency.
    At the Defense Intelligence Agency, as the Department of 
Defense's Senior Human Intelligence Officer, I managed 
intelligence collection program requirements and supervised the 
Department of Defense's Defense Attaches in over 200 embassies 
and offices around the world. I also commanded a Human 
Intelligence and Counterintelligence Battalion in Korea and the 
Army's premier Counterintelligence Group, the 902nd, at Fort 
Meade.
    Since my retirement from the U.S. Army, I have served as 
Chief Executive Officer of Harding Security Associates, the 
company I founded with my wife in 2003 and sold in July 2009. I 
built the company into a workforce of highly trained 
professionals providing strategic security solutions to the 
U.S. Government and the intelligence and defense communities.
    I have no current financial or ownership interests in the 
company and I have entered into an ethics agreement with the 
Department's designated agency ethics official, which has been 
provided to this Committee, to ensure no conflicts of interest 
arise.
    I know the importance and value of coordinated efforts 
between Federal agencies. As the Director of Intelligence for 
the Army's U.S. Southern Command, I coordinated efforts between 
the Defense Intelligence Agency, Drug Enforcement 
Administration, FBI, Central Intelligence Agency (CIA), and 
Customs on sensitive interagency counter-drug operations.
    My knowledge of counterterrorism challenges, sensitive 
intelligence programs, and technological advances against the 
threat have equipped me to meet the current and future 
challenges of TSA.
    If confirmed, I will ensure that TSA continues to work 
closely with and receives necessary intelligence from the 
Intelligence Community and that this information is applied 
across all transportation modes. I believe that the TSA should 
work closely with our partners in the Intelligence Community to 
improve the kinds of information needed from the watchlist 
system; and if confirmed, I will continue the effort begun from 
the President's review to work with our interagency partners to 
examine and, where necessary, modify the criteria and process 
used to build the Terrorist Screening Database and nominate 
names for the No-Fly and Selectee Lists.
    Given the global dimensions of aviation security, I will 
support Secretary Napolitano's historic effort to bolster 
international aviation security by working with our partners 
around the world to enhance information collection and sharing, 
increase cooperation of technological development, and 
modernize global aviation security standards.
    Additionally, I will encourage the use of enhanced 
screening technologies, both at domestic airports and by our 
international partners, while remaining respectful of privacy 
and civil rights and liberties. Our objective in using these 
technologies is clear: To strengthen our abilities to find 
dangerous materials and to stop dangerous people.
    From my military experience, I know the importance of a 
well trained workforce. You have my commitment to enhance 
training opportunities and invest in developing TSA's 
employees. If confirmed, I look forward to a close working 
relationship with Congress and this Committee. I welcome your 
oversight, your suggestions, and appreciate your dedication to 
ensuring our Nation's security.
    In closing, I again thank President Obama and Secretary 
Napolitano for their confidence and faith in my ability to lead 
TSA. Mr. Chairman, Ranking Member Collins, I thank you for the 
opportunity to appear before you today, and I look forward to 
answering your questions and, if confirmed, undertaking the 
challenges that lie ahead.
    Chairman Lieberman. Thank you very much, General. I am 
going to start my questioning with the three standard questions 
we ask 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?
    General Harding. No.
    Chairman Lieberman. Second, do you know of anything 
personal or otherwise that would in anyway prevent you from 
fully and honorably discharging the responsibilities of the 
office to which you have been nominated?
    General Harding. No, Mr. Chairman.
    Chairman Lieberman. And finally, 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?
    General Harding. Yes, Mr. Chairman.
    Chairman Lieberman. Thank you very much. We will start with 
a first round of questions limited to 7 minutes each.
    Let me give you a sort of a broad opening question, a 
little bit like what I said when I had the honor to greet you 
in my office. I hope if you are confirmed that you will, in 
really what I take to be the classic mode of operating of our 
military, take a fresh top to bottom look at the way TSA is 
fulfilling its mission.
    As I said in my opening statement, I think by and large it 
has really done a good job. Obviously, if you just judge the 
results by terrorist attacks or attempts--there are obviously 
successful attacks--they have done very well. But every time I 
go through the security system and watch with everyone else as 
we take our shoes off, as we do the various other things we do 
to get through, and as I watch the TSA officers doing the same 
repetitive work over and over again, I ask myself, is this the 
best way to do it? Well, so far it has worked. But I wanted to 
just put that before you and ask you if you have any thoughts 
about that.
    I think any system, particularly one with this much 
responsibility, can benefit from a fresh look, and I guess I am 
asking you if you are prepared to do that.
    General Harding. Mr. Chairman, you and I discussed that, 
and I agree with you. It is a 9-year-old organization with a 
very important mission, doing great work, and I agree with you. 
It has worked so far. I think a fresh look is necessary; I 
absolutely agree with you for two reasons. Because I think any 
agency like this can benefit from a fresh look. But the other 
reason, as you and I discussed, is that ever-evolving threat--
--
    Chairman Lieberman. Right.
    General Harding. And to stay ahead of that ever-evolving 
threat a fresh look and then a continuous process to address 
that evolving threat is important.
    Chairman Lieberman. Let me ask you two related questions. 
Both come from the statement that we repeat often here from the 
9/11 Commission Report, which is that one of the reasons why 
the attack on us on September 11, 2001, was successful was a 
``failure of imagination,'' which is to say that we failed to 
imagine that people would possibly do what the terrorists did 
to us on September 11, 2001.
    So I wanted to ask you two things that I do not know that I 
have asked previous TSA administrators. The first is whether, 
to the best of your knowledge, there is an adequate connection 
between TSA and our intelligence community so that beyond 
imagination you have a baseline of what is happening, to put it 
as directly as I can, among the enemy forces.
    The second is whether on a systematic basis the TSA tries 
to imagine--even beyond intelligence where this is a sort of 
standard military Red Team, Blue Team idea--how the terrorists 
might come at us next time so that they are better able to 
defend against it.
    General Harding. Mr. Chairman, I will take the connection 
question first.
    Chairman Lieberman. Good.
    General Harding. I think it can be improved. TSA, as a 
component within the Department of Homeland Security (DHS), 
benefits from the Office of Intelligence and Analysis at DHS. 
That office is, in fact, a member of the larger body of the 
Intelligence Community, the 16 agencies, and I think benefits 
from that.
    But I believe the connection can be improved. If confirmed, 
that will be a very high priority of mine.
    Chairman Lieberman. So that makes sense. Of course, the 
Intelligence and Analysis Division at DHS is the main point of 
contact between the broader Intelligence Community and TSA.
    General Harding. Yes, Mr. Chairman. And TSA, as a very 
important proactive member of the Intelligence Community in the 
sense that we are part of DHS, I think, needs to continue to 
aggressively task that intelligence system----
    Chairman Lieberman. Right.
    General Harding [continuing]. For the kinds of actionable 
intelligence that would benefit TSA and the 10,000 folks that 
we are hoping to clear.
    Chairman Lieberman. Good.
    General Harding. To your point on imagination, I think that 
is very important, and you beat me to the term, Red Teaming. I 
think to the extent that I can carry that from the Intelligence 
Community into TSA, we can do some more Red Teaming internally. 
I know TSA has started some of that, but I would like to do 
more. I would like to bring to TSA, if confirmed, experts who 
think like bad guys and bring them inside the thought process 
of what we are doing presently within TSA and where we would 
like to go to try to get a cycle going of understanding and 
staying ahead of the threat.
    Chairman Lieberman. I appreciate that. I have a little more 
than a minute left, so I am going to leave the questions about 
Harding Security to Senator Collins, but I do want to focus on 
something that is a little more brief, which has been a 
longstanding concern of mine. This is about the extent to which 
TSA carries out rail and transit security.
    And particularly, to focus on security training for workers 
in rail and transit sectors, which is one of the activities 
that Congress mandated in the 9/11 Commission Act of 2007, 
there was a GAO report issued last July that concluded that 
several key requirements have not been implemented despite 
clear deadlines and requirements set by contracts. I know some 
rail and transit systems have developed their own training 
programs for frontline employees, but a lot have not. And I 
worry that TSA's delay in issuing final regulations for public 
transportation and railroad training programs has allowed some 
transportation agencies to ignore security vulnerabilities and 
avoid providing training to their employees in these transit 
lines, in which literally millions of Americans travel 
everyday.
    So I wanted to ask you, if confirmed, if you will make 
issuing final regulations for rail and transit training 
programs a priority and also if you would speak just generally 
about the priority you will give to security on non-aviation 
modes of transportation in the United States.
    General Harding. Mr. Chairman, I would make that a 
priority. The Administrator is responsible for all 
transportation modes. The resources and budget would suggest 
that more is in aviation, which some would suggest would have 
been appropriate based on both the original threat and the 
threat as it evolved.
    I think it is very important that the Transportation 
Security Administration look at all modes, be informed by 
intelligence across all modes, and I would make that a 
priority, Mr. Chairman.
    Chairman Lieberman. I appreciate that. And of course, we 
know from tragic experience in other countries--London, Spain, 
and India--that terrorists have attacked non-aviation modes of 
transportation with bad consequences.
    Thank you very much. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman. As the Chairman 
suggested, I would like to ask you some questions about the 
firm that you founded. I think it is Harding Security 
Associates (HSA).
    First, I want to clarify a very important issue about the 
interrogators that your company provided to the Defense 
Department. In response to the Committee's questions, you 
stated that HSA contractors were based at Camp Slayer in Iraq. 
We have learned, however, that the contractors also performed 
interrogations and debriefings at Camp Cropper.
    Now the reason that is significant is Camp Cropper, as 
opposed to Camp Slayer, has been cited as being the subject of 
numerous reports on detainee abuse and mistreatment, including 
reports from the International Red Cross. For example, the Red 
Cross documented severely harsh living conditions, mistreatment 
by guards, and apparently even the death of several detainees 
while they were at Camp Cropper.
    So, let me ask you a series of questions. First, were any 
of the contract interrogators that you provided ever accused of 
engaging in unlawful or inappropriate interrogations at Camp 
Cropper?
    General Harding. No, Senator they were never accused of 
anything like that.
    Senator Collins. Were your firm's interrogators' actions at 
all times consistent with the standards of the Geneva 
Convention?
    General Harding. Yes, Senator they were.
    Senator Collins. Were they trained to abide by those 
standards in conducting interrogations?
    General Harding. Yes they were, Senator.
    Senator Collins. Was DIA ever concerned about any of the 
debriefings that were conducted by your interrogators?
    General Harding. No, DIA was not.
    Senator Collins. Are you aware of any concerns expressed by 
the Red Cross or any human rights organizations about the 
interrogators that you provided?
    General Harding. Not concerning my interrogators, no 
Senator.
    Senator Collins. Thank you. I would now like to turn to the 
issue of the contract that was audited by DCAA.
    The Defense Contract Audit Agency audited the amounts that 
your company billed the Federal Government under the contract 
that we have discussed, and the DCAA contract audit found that 
approximately $860,000 were for questionable or duplicative 
billing.
    Could you explain the background of how these billing 
errors occurred?
    General Harding. Thank you, Senator, for that opportunity. 
I would like to give some context and then go to your specific 
question.
    In December 2004, the Defense Intelligence Agency issued an 
urgent requirement for 40 interrogators/debriefers to be 
deployed to Iraq. DIA's urgent requirement was driven by an 
insufficient number of trained and qualified in-house 
government interrogators. The contract was for 1 year with an 
option to renew up to 4 years. The contract was valued at $49.2 
million if fully exercised. HSA won the contract in January 
2004 and within 60 days had started placing intelligence 
debriefers on the ground at Camp Slayer, Iraq.
    However, because of DIA's reduced interest to only a few 
high-value detainees, they decided to terminate the contract 
for the convenience of the government. This was within 4 months 
of HSA starting work.
    HSA, as a matter of course, billed the government for 
termination costs. Because the termination costs were more than 
$100,000, the Department of Defense also, as a matter of 
course, initiated an audit. The audit concluded that DIA paid 
too much and that HSA owed the government money. After HSA 
appealed the decision, the government and HSA reached a 
negotiated settlement in July 2008, by which HSA repaid DIA 
approximately $1.8 million.
    The Department of Defense IG had opened and closed an 
investigation concerning this settlement without any finding of 
wrongdoing by HSA. Additionally, DIA monitored contract 
performance and provided Congress with assurances that there 
were no indications of any alleged abuses by HSA interrogators 
and upon contract termination praised HSA's work.
    With your indulgence, Senator Collins, I would like to give 
some lessons learned.
    Senator Collins. Well, before you do that, I need to 
establish some facts. It is my understanding that HSA was paid 
approximately $6 million for the work in total. Is that 
accurate?
    General Harding. That is approximately correct.
    Senator Collins. It is important that we understand that to 
place it in context.
    General Harding. Absolutely.
    Senator Collins. Because, although the contract 
potentially, if the options had been exercised, would have been 
worth over $50 million----
    General Harding. Correct.
    Senator Collins [continuing]. In fact, it was terminated 
for the convenience of the government in the first year, and 
HSA was paid a little over $6 million.
    Now, it is my understanding that of that amount, DCAA 
questioned the $1.6 million that you billed to terminate the 
contract, plus questioned an overpayment of $860,000. In other 
words, it appears to me that of the $6 million that HSA was 
paid, $2.4 million was questioned. That is a pretty high 
percentage. The White House, in talking to me about this issue, 
compared it to $53 million, but that is not what was at stake 
here at all, and I thought the White House's comparison was 
pretty misleading.
    Now, after the $1.8 million settlement, HSA actually ended 
up netting about $4 million.
    General Harding. The revenue was approximately $4 million.
    Senator Collins. So I just want to put that out to make 
sure you agree with those general numbers.
    General Harding. I think that is perfect context, Senator, 
and it describes to the best of my knowledge the accounting.
    Senator Collins. So since $2.4 million is a large 
percentage of $6 million, more than a third obviously, I need 
to better understand how it happened that there was a dispute 
over so much of the payment.
    General Harding. I can capture that with an example of one 
of the largest chunks, I believe about $800,000.
    Because DIA needed interrogators and needed interrogators 
in an urgent manner, and because I was a Human Intelligence 
Officer, I went out and found the best interrogators I could 
find. I found the best interrogators I could find across the 
world. They used to work for me, many of them. I hired the best 
Warrant Officer-Interrogator, I think, not just in the U.S. 
Army, but in the Department of Defense. I brought him in as my 
Program Manager.
    We set up to provide the Defense Intelligence Agency with 
what they needed in a very expedited manner, and I think we did 
that by putting people on the ground within 60 days.
    I had brought interrogators that I had worked with, and 
that my Chief Warrant Officer had worked with, into our 
headquarters and rapidly trained them. Even though they were 
already certified in Geneva Conventions and interrogations, I 
put them through additional training in both Geneva Conventions 
as well as cultural training. We deployed them 24 hours a day, 
7 days a week, just to make sure that they got through all of 
the training that they needed to include pre-deployment 
training, to get downrange, to get to Iraq, and we did that in 
an urgent manner.
    I was focused on that as the CEO of the company when within 
3 months of executing this contract DIA decided to change the 
scope of the contract and as you pointed out correctly, 
Senator, terminated for the convenience of the government. I 
then faced 40 individuals, because 22 were deployed but there 
were 18 just about to deploy, who were now without work within 
3 months of leaving the ``the Farm.'' I use the Farm because I 
remember one of my interrogators I talked off of the Farm to 
come back and go downrange and do what they did so well when 
they were in uniform.
    I personally discussed with the 40, either on the phone or 
in a collective meeting, that I would take care of them and 
that I would negotiate and work with the government to provide 
severance payments. The total severance payments came to about 
$800,000, which I paid and they dispersed.
    When I went to claim it from DIA, the DCAA recognized that 
I did not have a policy on that--that I had not negotiated with 
the government for severance, and I had not provided the 
government my plan for severance for these individuals that I 
had taken away from wherever they were in the world and sent 
them back home. Therefore, it was not allowed, that $800,000. 
That is just one example.
    What you will see in the report from DIA is that because it 
was a fixed price contract, certain things were allowed under 
the contract, but even DIA admitted that when they did the 
audit, they did it as a time and materials contract. So DIA 
even admits to some degree there was mistakes on both sides.
    I accept, Senator Collins, the mistakes that I made. As a 
matter of fact, as a small business owner, I am convinced that 
I made a mistake.
    This was our largest and, in my opinion, our most important 
contract, and in an effort to stay engaged with my client, in 
an effort to stay engaged with my employees and take care of 
them, and in an effort to take care of my stakeholders, which 
is the Iraq Support Group, I lost sight of the fact that I also 
had to be cognizant of what was going on in my backroom, in the 
accounting shop, in the contract shop.
    And so, what did I do? I hired the best chief financial 
officer. I increased accountability within my organization, 
starting with me. I purchased state-of-the-art accounting 
systems and upgraded twice within 3 years. I emphasized the 
importance of internal controls, again, starting with me and 
everybody else in my company.
    The result was that HSA grew from approximately 60 people, 
when I had this DIA contract, to more than 400 by the time I 
sold my company, in no small measure from the lessons learned 
very early on in my first year of business from this DCAA 
audit. The most important result--it never happened again.
    If confirmed, I believe that this private sector management 
lesson learned would benefit me in my new post. I take the need 
to protect taxpayer dollars seriously and would look forward to 
working with this Committee to collectively ensure that we 
continue to maintain that standard within TSA.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks very much, Senator Collins. 
Senator Burris, good morning.

              OPENING STATEMENT OF SENATOR BURRIS

    Senator Burris. Thank you, Mr. Chairman. General Harding, 
that was very interesting. I appreciate your forthrightness in 
your testimony with reference to your business. I am a former 
banker, and I financed startup companies. And if a startup 
company receives a contract and they have to gear up for these 
emergency situations, there is a great deal of outlay and 
confusion and rushing because you want to make an impression on 
the contract.
    Being a former banker, I never lent money to companies that 
are doing that. I very well understand exactly what your 
company was going through, especially with a contract the size 
of $48 million because you are now trying to gear up, you are 
trying to hire, you are trying to work under these time 
constraints that have been put on you. So even though there 
were mistakes made, I am glad to see that you have come forward 
and understand it was a learning experience.
    And I tell you, your comment about the fact that you have 
not done that again proves it. So, I appreciate your 
forthrightness and candidness.
    General Harding. Thank you.
    Senator Burris. General Harding, I travel quite a bit 
through these airports and deal with the TSA, if not daily, 
almost weekly. General Harding, it is a major process, and the 
rules, regulations, and procedures that have to take place for 
the security of our travel are a little mind-boggling when you 
figure what that screener has to deal with.
    General Harding, if you are confirmed, do you see any 
options for improvement in the processing and the 
responsibility facing screeners and TSA employees?
    I chat with them all of the time. I try to encourage them 
because a lot of people are upset when they have to go through 
the screening and when they have to go back because their watch 
or their keys or their loose change was setting off the alarm. 
Do you have any ideas for helping these screeners and employees 
who I am sure are trying to do their best?
    General Harding. That is a great question, Senator, and a 
great comment. As I began my process here, as the Chairman 
knows, I think I had the great opportunity and honor to speak 
to no less than 25 Senators, personally.
    Clearly, the majority had very positive anecdotes about the 
Transportation Security Officers (TSOs) and their experiences 
because you travel quite often. And I took that to heart, and 
so, Senator, my first response to you is that the TSOs need to 
know and need to hear from somebody like me, whether confirmed 
or not, that the Senators I have spoken to speak very highly of 
them, feel very confident in their abilities, and want somebody 
to help their morale, and that is to your point.
    Senator, I have worked with large organizations, and I have 
worked with organizations from battalion size to the Director 
of Operations of DIA, and morale is something that we have 
always learned that we need to keep an eye on. And if 
confirmed, Senator, I guarantee you that the experiences that 
the Senators had, that I have heard some great things about 
those TSOs, will be shared with the TSOs. I think they will, if 
confirmed, be a well-trained force. They will be well led and 
well-motivated.
    Senator Burris. General Harding, tell me, how will your 
military experience in the Intelligence Community translate 
into operating the TSA?
    General Harding. Senator, it is not as exotic as it may 
sound. It was hard work, and I know you appreciate that. I 
believe that TSA across all modes of transportation, as I said 
earlier, can benefit by intelligence and being part of the 
process. I know that process very well because I have lived it, 
to your point. I know how to task the intelligence system; I 
know how robust it is. I know it has great leaders with 
innovative and creative ideas, and I need to tap into that, and 
I am hoping my experience will benefit TSA, if confirmed.
    Senator Burris. General Harding, there was a leak of the 
TSA manual. How do you plan to control that and what would you 
do to prevent something like that from happening under your 
watch?
    General Harding. That release was a mistake. I know TSA 
went to great pains to review their process, and they have made 
corrections. I would systematically review processes like that 
and hold people accountable, Senator, for the kinds of the 
things that are readily available to the public.
    We are using, I believe, a good system that protects 
information within TSA right now, and I would reinforce that 
system.
    Senator Burris. General Harding, if you are confirmed, what 
would be your three top priorities for TSA?
    General Harding. Identifying and neutralizing the threat, I 
believe, has to be the top priority. I think to your earlier 
point, taking care of the workforce. And then finally, an 
outreach to stakeholders, and those stakeholders would include 
folks in the technology industry, the research and development 
industry, our international partners as well as the airline and 
transportation industry, as well as privacy rights groups. I 
think reaching out to stakeholders would be very important.
    And getting back to the workforce, I would like to close my 
answer here with the comment that a well-trained, well-
equipped, well-motivated, and well led workforce needs to be 
increasingly sophisticated, and I think I need to work on that. 
I appreciate what TSA is currently doing with their workforce 
in developing them, but I would reinforce that, if confirmed.
    Senator Burris. Mr. Chairman, may I just make one comment? 
Before I have to go preside, I would like to have permission to 
make one comment.
    Chairman Lieberman. Sure.
    Senator Burris. I just want this story to be on the public 
record. I told you in our meeting the other day about the 
experience I had with TSA in Chicago. I want you all to know 
that I showed up at the airport without my ID, but they know 
who I am at the Chicago Airport. There is no question. I did 
not even show it at the ticket counter because I was running 
late, and they gave me my boarding pass, and I reached the TSA 
checkpoint there, and I did not even have my wallet with me. So 
the gentleman called the supervisor, and the supervisor called 
another supervisor.
    They knew who I was, but they went through every step in 
that manual to verify my identity before I got on that plane. 
General Harding, those employees have to be commended. We have 
to make sure that they understand that by carrying out their 
duties in that fashion--even though they could have said, 
``Senator, go ahead. You are a Senator.'' They did not. And I 
am glad that they did not because we do not want that one 
person who would try to use that to get by and then may cause 
damage to some of our travelers.
    So please pass that on when you are confirmed. Thank you, 
General Harding.
    General Harding. Thank you
    Senator Burris. Thank you, Mr. Chairman. I appreciate the 
opportunity.
    Chairman Lieberman. Well, thank you, Senator Burris, for 
telling that story, and I must say thank you for being the kind 
of person who would not pull rank at that moment. [Laughter.]
    Senator Burris. Two supervisors came, and they verified my 
address. I had no identification; I had nothing.
    Chairman Lieberman. It was a good story. Thanks for telling 
it.
    General Harding. Thank you, Senator.
    Chairman Lieberman. General Harding, we will do one more 
round.
    In the aftermath, and you referred to this briefly in your 
opening statement, of the Detroit bombing attempt, our 
Committee has been reviewing the processes the Federal 
Government and TSA employ in developing and utilizing the 
numerous terrorist watchlists--not only TSA, but obviously, the 
Terrorist Screening Center.
    One of the things that has perplexed me is that, as you 
know, there are over 400,000 individuals who have been 
identified as known or suspected terrorists. And a lot of it is 
suspected, I understand that. And they are on the consolidated 
Terrorist Screening Database, the so-called TSDB.
    But only a small subset of those people, about 12,000, 
currently meet the standards for the so-called Selectee List 
and face enhanced physical screening measures at our airports. 
There is the ultimate list, the No-Fly List, which is a list of 
the really bad folks that get pulled off and do not get on the 
plane.
    So it just seems to me and I would bet it would seem to 
most travelers that if we have this 400,000 TSDB list, even 
though it is not conclusive that these are terrorists, it is at 
least worth running the name of every passenger going on a 
plane through the computers to see whether there is a match and 
at least to pull them aside for a secondary screening. I know 
there is a review of this going on, and I want to ask you for 
some initial thoughts on that and, if I can put it this way, on 
what criteria you think TSA should apply as it does this review 
of the use of the Terrorist Watchlist.
    General Harding. Senator, I think it is an excellent 
question. As you pointed out, the President directed a review, 
I believe, that is being headed up by John Brennan, and I think 
they should be coming to some recommendations here pretty soon. 
I would look forward, if confirmed, to being informed by that 
exhaustive review that John Brennan owes the President.
    To your point, the 400,000 or so individuals on the 
Terrorist Screening Database, and looking at those individuals 
against how we receive within TSA the No-Fly List and the 
Selectee List, and also the Secure Flight process that we are 
working--I think this is something that I would like to look at 
if confirmed. I would like, one, to be informed by the process 
that John Brennan is leading, and then, two, to use the 
applications, conclusions, and recommendations to look at your 
discussion point on how do we best use the Terrorist Screening 
Database.
    Yes, there are fragments within that TSDB. It is not a 
bunch of information. It may just be one name. But how can we 
better use that to your point, Mr. Chairman, to protect the 
traveling public? I would look into that.
    Chairman Lieberman. I appreciate that answer. Let me move 
to another subject, which is providing collective bargaining 
rights to the Transportation Security Officers. I know that 
this was discussed, I gather from newspaper accounts, at your 
hearing yesterday at the Commerce Committee and that you did 
not, if I understood the articles, state a particular position.
    I support collective bargaining rights for TSOs, although I 
understand any contract that was negotiated would have to put 
their security responsibilities first. As you know, we have 
done that quite successfully in a whole variety of law 
enforcement and intelligence and security rated organizations. 
In other words, they have been given collective bargaining 
rights, but it has not affected their ability to carry out 
their functions.
    President Obama has previously stated his support in 
general for the collective bargaining rights for these TSOs. 
The President has nominated you, but the article in the paper 
made it sound like you were neutral. I wanted to ask, since the 
President has taken this position, what you understand to be 
the position of the Administration as well as your own position 
on collective bargaining rights for the Transportation Security 
Officers.
    General Harding. Mr. Chairman, my understanding of the 
position of the Administration is exactly the same as yours. I 
also understand----
    Chairman Lieberman. Meaning that they are in favor of 
collective bargaining?
    General Harding. Yes, Mr. Chairman.
    Chairman Lieberman. Thank you.
    General Harding. My understanding also of the 
Administration is, and especially listening to my colleagues, 
that this Administration is informed by recommendations from, 
and in the case of my colleagues, flag officers. Whether it be 
on the closing of Guantanamo or ``Don't Ask, Don't Tell,'' and 
I think the focus, which I would believe you would agree is 
very important, would be on the implementation if that is the 
decision.
    If confirmed, I think it is very important that the 
implementation of such a policy, if that is the direction both 
the Administration and the Secretary choose to go, should be 
part and parcel of working the decision. It may sound like I am 
being neutral, I think it should come across as being 
thoughtful, and I think I owe both to the Secretary and to the 
President the implications on if that policy was implemented.
    And if confirmed, I guarantee you, Mr. Chairman, my 
recommendations would be very unbiased, they would be very 
factual, and I think that is what I would owe the Secretary and 
the President.
    Chairman Lieberman. I appreciate the analogy to the ``Don't 
Ask, Don't Tell'' repeal because it is in our minds.
    In other words, and it is comparable, the President has 
stated a position there as here. Secretary Gates is doing a 
review; Admiral Mullen is doing a review, which in my opinion 
is geared to how best to implement the decision of the 
Commander-in-Chief. Am I right that is essentially what you are 
saying you are going to do here?
    General Harding. Yes, Mr. Chairman, and make a 
recommendation then to the Secretary and the President.
    Chairman Lieberman. Very good. My time is up. I would just 
add this, and I think I may have mentioned this to you in my 
office.
    As you said, we travel a lot and we see a lot of TSOs, and 
on two occasions now I have had TSOs sort of, in a friendly 
way, follow me out and ask me for a moment and say they were 
concerned that promotions within TSA were being done on what 
they described as a political basis. They did not mean 
Democrat/Republican. I think they meant in the classic 
organizational sense of internal politics.
    Now look, for all I know these two people had sought 
promotions and felt that they were unjustifiably denied. You 
come from organizations that are highly organized in your 
background. But I know certainly based on your HSA story you 
understand the importance of having the best people brought to 
the top. So, I know it is a big organization now, about 50,000 
employees, but I think part of what will be important in not 
only improving effectiveness but morale is to make sure you do 
a double check to make sure that the people being promoted are 
really the best that can be promoted.
    General Harding. Mr. Chairman, I totally understand your 
message, and I agree with it.
    Chairman Lieberman. Thank you. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman. General, I want 
to follow up on an issue that I raised in my opening statement 
about the importance of operational testing. We have seen the 
waste of taxpayer dollars by TSA because of new technology 
which worked great in the lab, but failed to work in a real 
life environment in the airport. I would think that one way to 
ensure that we always have operational testing is for TSA to 
have a written policy requiring operational testing.
    Could you give me your thoughts on that issue, please?
    General Harding. Senator, I agree with you. I agree with, I 
believe it was, a GAO report. I believe that with the 
operational testing of equipment, especially when you are 
talking the amount, the size, the footprint, and most 
importantly the cost of this equipment, we are dealing with 
stakeholders who have to implement and put into practice the 
policies attendant to that equipment. The equipment needs to be 
tested. We need to provide stakeholders a chance to comment, 
even on the testing, and I believe the process should look more 
like what I think you and I discussed, which is more like what 
we see in the Department of Defense.
    And I think I can bring that to the table, Senator. And I 
absolutely agree with your point, and if confirmed, I would 
reinforce, as you pointed out, the process that TSA currently 
put in place with the AITs, but I think we can reinforce that 
with all of the technologies going forward.
    Senator Collins. Thank you. I want to bring up the privacy 
concerns that have been raised with regard to whole body 
imaging technology. We recently had the Acting TSA 
Administrator testify before us, and she said that TSA has done 
a great deal to implement measures from a privacy standpoint to 
protect the traveling public.
    Have you had the opportunity to look at this issue?
    General Harding. I did, Senator, and I will share with you 
that in my visit to Reagan Airport that was upmost in my mind. 
I had read the reports, like many. I had seen Acting 
Administrator Gale Rossides' testimony.
    I visited Reagan National Airport. I saw the Millimeter 
Wave Machine, the one that goes around. I went to the booth, 
which was a distance away from the actual AIT machine, and 
inside the booth, before I got in, my phone was taken away. I 
got in the booth. I did talk to the TSO. I looked at the 
screen. I asked questions about what it was, how he is able to 
store or not store. It turns out he could not store the image.
    I did get to see a live scan where a woman on the line did 
walk through and had something in her left pocket that was 
identified on the screen. The TSO identified that to the person 
on the line. The woman went back through; it was removed.
    Two things on privacy. I can assure you there was no way 
for that TSO to store that information. I had no way to record 
the information because my phone was taken away from me as 
reported. And more importantly, I could not even leave the 
booth, Senator, until that woman had cleared the area.
    The policies and procedures that TSA put in place are being 
followed. I think they are very thoughtful, and I think they 
are made with privacy in mind, and I felt very comfortable that 
day with that experience, Senator.
    Senator Collins. That is very helpful. I want to follow up 
on, for my final questions, two issues that the Chairman 
raised. Both the Chairman and I have spent a great deal of time 
looking at why Abdulmutallab was not stopped in light of the 
fact that there were credible intelligence reports about him 
from his own father. And that information, had it been linked 
to information from Yemen, would have been sufficient to put 
him on the Terrorist Watch List or perhaps even the No-Fly 
List, which is the highest list.
    Do you think that TSA needs to make better use of 
intelligence data, even if it is fragmentary, to screen airline 
passenger data overseas and require perhaps additional 
screening or questioning of passengers?
    General Harding. I do, Senator.
    Senator Collins. One of the reasons that I think your 
background is so ideal for this job is you do bring an 
intelligence background, and I think that is going to be very 
helpful, should you be confirmed, not only to TSA, but 
throughout DHS.
    DHS is always reminding us that they are a consumer not a 
producer of intelligence. Having someone who has been on the 
producer end, the collection end, I think will be very helpful 
to the Department.
    General Harding. Thank you, Senator.
    Senator Collins. Finally, let me end my questioning by 
going to the collective bargaining issue that you discussed 
with the Chairman.
    As you know from our discussion, I believe that we should 
be focused on ensuring that individuals at TSA have the right 
to appeal to the Merit Systems Protection Board, or to some 
other unbiased body, adverse personnel actions. I think that is 
really the issue here rather than full collective bargaining 
rights.
    In order to perform its critical mission, the TSA has to be 
able to shift resources, including people, on very short 
notice. We saw that in the summer of 2006 in response to the 
liquids bombing plot from Great Britain where TSA was able to 
change the nature of its employees' work and even the location 
of that work in response to that emergency. I think we have to 
be extremely careful as we proceed in this area that we do not 
take away the absolutely critical authority that the head of 
TSA must have to respond to threats, to respond to an 
emergency, and to respond even to a severe snowstorm such as 
happened in December 2006 when severe blizzards hit the Denver 
area and TSA officers were not able to get to the airport. They 
had to be ferried in from Las Vegas to cover shifts.
    If we lose that flexibility because those changes in 
location or duties or the nature of the work have to be 
bargained, that is going to undermine our security, and I am 
asking today for your commitment to ensuring that TSA continues 
to have those vital flexibilities that allow a quick reaction 
to ever-changing circumstances, to new threats, to everything 
from a terrorist plot to a blizzard.
    And that is my question for you today.
    General Harding. Senator, you have my commitment that, if 
confirmed as the Administrator, I would never negotiate away 
the authorities for the flexibility and the urgency that you 
described.
    Senator Collins. Thank you, General. Thank you, Mr. 
Chairman.
    Chairman Lieberman. Thanks, Senator Collins. Thanks to you, 
General Harding.
    Maybe I will just mention one other thing that I want to 
put on your screen. The Implementing Recommendations of the 9/
11 Commission Act of 2007 included a requirement that TSA 
regulate the transportation of the most dangerous rail cargos, 
including toxic inhalation hazard gas, explosives, and 
radioactive cargo, in the language of the statute, using ``the 
safest and most secure routes.'' Unfortunately, from what I 
have heard, that provision seems to have been implemented in a 
way that, at least in some cases, has had the opposite effect 
with, for instance, materials that come under that statutory 
description going through High Threat Urban Areas. So I wanted 
to ask you to take a tough look at that issue to make sure that 
we are protecting the public in densely populated areas.
    General Harding. I am familiar with that. I can tell you, 
Mr. Chairman, I will look forward to working with you and your 
Committee on that.
    Chairman Lieberman. Good. Thank you. I want to note the 
presence and welcome an unexpected guest, Congresswoman Sheila 
Jackson Lee, who I would guess is here both personally and in 
her capacity as Chair of the Transportation Security 
Subcommittee of the House Homeland Security Committee. This is 
one of those happy examples of bipartisan and bicameral 
cooperation. It is an honor to have you here.
    General Harding, thanks for your answers to our questions. 
We are going to keep the record open for 5 days for additional 
questions or statements. It is probably going to be hard with 
everything going on for the Commerce Committee and this 
Committee to complete work on your confirmation before the 
recess. But our staffs are going to work on it over the recess, 
and it will certainly be my hope to have a business meeting 
right after we get back so we can, assuming there are no 
problems, and I hope and trust there will not be, get you on 
the job as quickly as possible.
    General Harding. Thank you so much, Mr. Chairman.
    Chairman Lieberman. Thank you very much. The hearing is 
adjourned.
    [Whereupon, at 11:10 a.m., the Committee was adjourned.]


                            A P P E N D I X

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