[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                        TENTH ANNIVERSARY OF THE

                 MARITIME TRANSPORTATION SECURITY ACT:

                             ARE WE SAFER?

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


                               (112-101)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON

                   TRANSPORTATION AND INFRASTRUCTURE

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 11, 2012

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


         Available online at: http://www.gpo.gov/fdsys/browse/
        committee.action?chamber=house&committee=transportation



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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey            Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
RANDY HULTGREN, Illinois             RUSS CARNAHAN, Missouri
LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
CHIP CRAVAACK, Minnesota             DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas              MAZIE K. HIRONO, Hawaii
LARRY BUCSHON, Indiana               JASON ALTMIRE, Pennsylvania
BILLY LONG, Missouri                 TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      HEATH SHULER, North Carolina
PATRICK MEEHAN, Pennsylvania         STEVE COHEN, Tennessee
RICHARD L. HANNA, New York           LAURA RICHARDSON, California
JEFFREY M. LANDRY, Louisiana         ALBIO SIRES, New Jersey
STEVE SOUTHERLAND II, Florida        DONNA F. EDWARDS, Maryland
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN, 
    Tennessee
VACANCY
                                ------                                7

        Subcommittee on Coast Guard and Maritime Transportation

                FRANK A. LoBIONDO, New Jersey, Chairman
DON YOUNG, Alaska                    RICK LARSEN, Washington
HOWARD COBLE, North Carolina         ELIJAH E. CUMMINGS, Maryland
ANDY HARRIS, Maryland                CORRINE BROWN, Florida
CHIP CRAVAACK, Minnesota             TIMOTHY H. BISHOP, New York
BLAKE FARENTHOLD, Texas              MAZIE K. HIRONO, Hawaii
JEFFREY M. LANDRY, Louisiana,        MICHAEL H. MICHAUD, Maine
  Vice Chair                         NICK J. RAHALL II, West Virginia
JOHN L. MICA, Florida (Ex Officio)     (Ex Officio)
VACANCY
                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY
                                Panel 1

Rear Admiral Joseph A. Servidio, Assistant Commandant for 
  Prevention Policy, United States Coast Guard...................     4
Stephen L. Caldwell, Director, Homeland Security and Justice, 
  Government Accountability Office...............................     4

                                Panel 2

Bethann Rooney, Manager of Port Security, Port Authority of New 
  York and New Jersey, testifying on behalf of the American 
  Association of Port Authorities................................    13
Christopher Koch, President and CEO, World Shipping Council......    13

           PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS

Hon. Rick Larsen, of Washington..................................    21

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Rear Admiral Joseph A. Servidio..................................    23
Stephen L. Caldwell..............................................    30
Bethann Rooney...................................................    84
Christopher Koch.................................................    92

                       SUBMISSION FOR THE RECORD

Rear Admiral Joseph A. Servidio, Assistant Commandant for 
  Prevention Policy, United States Coast Guard, response to 
  information request from Hon. Frank A. LoBiondo, a 
  Representative in Congress from the State of New Jersey, on the 
  availability of the Coast Guard's maritime security risk 
  assessment model...............................................     8

                         ADDITION TO THE RECORD

Passenger Vessel Association, written statement..................   100
[GRAPHIC] [TIFF OMITTED] 76850.001

[GRAPHIC] [TIFF OMITTED] 76850.002

[GRAPHIC] [TIFF OMITTED] 76850.003

[GRAPHIC] [TIFF OMITTED] 76850.004

[GRAPHIC] [TIFF OMITTED] 76850.005

[GRAPHIC] [TIFF OMITTED] 76850.006



                   TENTH ANNIVERSARY OF THE MARITIME


                      TRANSPORTATION SECURITY ACT:


                             ARE WE SAFER?

                              ----------                              


                      TUESDAY, SEPTEMBER 11, 2012

                  House of Representatives,
                    Subcommittee on Coast Guard and
                           Maritime Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.

    The subcommittee met, pursuant to call, at 9:30 a.m., in 
Room 2212, Rayburn House Office Building, Hon. Frank LoBiondo 
(Chairman of the subcommittee) presiding.
    Mr. LoBiondo. The subcommittee will come to order.
    Today marks the 11th anniversary of that horrible day that 
changed America and changed the world, the terrorist attacks of 
September 11th. I would like to take a moment to remember those 
who perished on that day and those whose lives were changed 
forever because of it.
    I also want to express our gratitude to the brave men and 
women working so hard both at home and overseas to improve our 
ability to prevent anything like that from ever happening 
again.
    We are also approaching the 10th anniversary of the 
enactment of the Maritime Transportation Security Act. It was a 
landmark piece of legislation that established a framework to 
improve the security of the Nation's ports, waterways, and 
vessels from potential terrorist attacks.
    The importance of keeping our ports and waterways secure 
cannot be overstated. Approximately 90 percent of all global 
trade and 25 percent of our gross domestic product move via the 
sea. A terrorist attack at any of our ports could severely 
disrupt the supply chain, which would be catastrophic to our 
fragile economy.
    However, as we recognize in the MTSA, improving security at 
our ports and aboard our vessels means understanding how the 
industry operates. When MTSA imposed new security mandates on 
the maritime industry, it was done in a manner which did not 
undermine the free flow of commerce or the economic viability 
of the maritime sector.
    I would like to praise the Coast Guard for following that 
critical balancing act in their efforts in implementing MTSA. 
Throughout the process, the Service has been fair, transparent, 
and relatively flexible with the large number of stakeholders 
in our maritime transportation system. Thanks to the leadership 
of the Coast Guard and the commitment from industry and their 
employees, I believe our ports and waterways are much safer 
than they were 11 years ago.
    However, although MTSA has been largely a success story, 
there are a couple of areas where concern remains. As has been 
documented in numerous hearings at both the subcommittee and 
full committee level, regulations governing the deployment of 
the Transportation Worker Identification Credential, TWIC, 
readers have still not been set. The Service is now telling us 
that it expects to publish proposed regulations sometime this 
fall, well over 3 years later than the original deadline for 
issuing a final rule.
    As we continue to wait out these delays, the TWICs are no 
more than a flash pass. Without the readers in place, we are 
forcing maritime employees to pay for something that does not 
serve its intended purpose and we are undermining security at 
our Nation's ports. The administration needs to move forward on 
these regulations as soon as possible.
    As we highlighted at our hearing in July, concerns persist 
with regard to implementation of requirements to improve 
maritime domain awareness. Specifically, the Service's 
inability to sufficiently tie its different MDA systems into 
one common operating picture as well as its somewhat 
duplicative approaches to tracking the same vessels have been a 
source of frustration. Additionally, we remain concerned that 
the efforts to share MDA information among stakeholders may 
suffer as the initiative to build physical Interagency 
Operations Centers at our ports wanes.
    Finally, and more broadly, I remain worried about the Coast 
Guard's ability to continue to carry out their core maritime 
security responsibilities with an ever-increasing workload and 
a shrinking budget. The administration has proposed slashing 
the Service's budget by $350 million and cutting the number of 
servicemembers by over 1,000, yet we have never asked the 
Service to do more than they are doing now.
    Cutting funding while adding new responsibility is a 
formula for failure; and, unfortunately, we saw this formula 
playing out in the 1990s when the Coast Guard had been 
continually asked to do more, was given less, and then we were 
surprised when they couldn't meet all the mandates that were 
imposed by Congress. This is a very, very serious situation, 
and I don't believe that we in Congress can ever allow that to 
take place again. So we must be seriously on guard now.
    Admiral, I hope you can speak to some of my concerns this 
morning, and I look forward to hearing from the GAO and the 
private-sector witnesses on some of these matters as well. I 
want to thank the witnesses for appearing today, and I look 
forward to their testimony.
    Now I would like to yield to Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman, and thank you for 
convening this morning's hearing to assess the effectiveness of 
the Maritime Transportation Security Act, or MTSA, after 10 
years of implementation. It is entirely appropriate that we 
evaluate MTSA today as we observe the 11th anniversary of the 
September 11, 2001, attacks. There can be no more sobering 
reminder that our work to protect our shores from terrorist 
threats and organizations requires our constant attention, 
creativity, and dedication.
    I also want to acknowledge the contributions made by the 
U.S. Coast Guard on that day to secure New York harbor and to 
oversee the successful evacuation of over 300,000 people from 
Lower Manhattan after the collapse of the World Trade Center.
    I want to thank you, Admiral. If you could pass that on to 
the entire Coast Guard family as well. On that day, the true 
definition of the Coast Guard motto, Semper Paratus, was made 
evident to all.
    Mr. Chairman, border and transportation security is a 
pivotal function of the Federal Government in protecting the 
American people from terrorists and their instruments of 
destruction. The maritime domain is particularly daunting in 
scale, totaling over 95,000 miles of shoreline, 300,000 square 
miles of waterways, and 10,000 miles of navigable waterways. 
There are over 360 ports, approximately 3,100 critical 
facilities, and more than 14,000 vessels in the domestic fleet 
alone. Each one of these can present a potential target for 
terrorist activities, so the complexity of securing these 
assets is a huge responsibility.
    Aside from infrastructure, over 60 million Americans are 
employed within 100 miles of our coasts and coastline and 
contribute over $4 billion annually to the national economy.
    The response of Congress to the attacks of September 11, 
2001, was followed by specific targeted measures to protect the 
country, such as the creation of the Transportation Security 
Administration. It also included the passage of MTSA, which 
addressed the maritime domain with new requirements for 
passenger, crew, and cargo screening; the successful Customs-
Trade Partnership Against Terrorism, or C-TPAT; and the 
MegaPorts Initiative that has systematically enhanced detection 
capabilities for special, nuclear, and other radioactive 
materials in containerized cargo.
    Additionally, the greater use of technology to identify and 
track vessel movements, implementation of comprehensive 
biometric security measures, and the initiation of 
vulnerability assessments and creation of site-specific 
security plans were all new innovations.
    The question asked today, though, is are we safer? That 
question is as valid now as it was in the days and weeks 
following the attacks of September 11th. This basic question 
raises some fundamental questions for which I will be 
interested to hear responses from our witnesses today.
    Specifically, how do we know that we are in fact safer? By 
what metrics are we making such determinations? What are the 
economic effects on foreign and domestic maritime commerce and 
the cost to the U.S. taxpayer measured against security? I 
would also be interested in learning whether our witnesses 
believe that adequate resources are being provided to support 
these responsibilities.
    As I mentioned during our hearing on maritime domain 
awareness in July, when resources were freely available to 
address the deficiencies in homeland security after September 
11, 2001, it was fairly easy to get those dollars. But now we 
operate in an entirely different budget environment. Present 
fiscal constraints leave us little choice but to examine 
carefully the assets and resources we devote to maritime 
security, especially to the Coast Guard, whose budget is 
already stretched thin over several different competing 
missions.
    I have said before, and I will keep saying it: We cannot 
expect the Coast Guard to do more with less. The sad reality is 
the Coast Guard will be doing less with less given the current 
budget's trajectory. That is why we must spend effectively and 
wisely on those activities which provide the greatest risk 
reduction at the lowest cost.
    Obviously, challenges remain. TWIC readers and cargo 
scanning requirements immediately come to mind. Yet, as our 
present maritime security strategies continue to evolve, we 
must not allow frustration over some aspects to deter other 
efforts. We must press on to develop a maritime security 
strategy that is comprehensive in scope, flexible in 
implementation, and adaptable to the changing tactics of those 
extremists who would seek to do us harm. For if there is one 
truth we have learned over the past 10 years, it is that 
terrorists and terrorist organizations will not tire in their 
efforts to probe, adapt, and exploit our vulnerabilities; and, 
like the Coast Guard, we must remain Semper Paratus.
    Thank you, Mr. Chairman.
    Mr. LoBiondo. Thank you, Mr. Larsen.
    Our first panel today we have Rear Admiral Joseph Servidio, 
Assistant Commandant for Prevention Policy, and Mr. Stephen 
Caldwell, director of the GAO's Homeland Security and Justice 
team.
    Admiral, welcome. You are on.

    TESTIMONY OF REAR ADMIRAL JOSEPH A. SERVIDIO, ASSISTANT 
 COMMANDANT FOR PREVENTION POLICY, UNITED STATES COAST GUARD; 
   AND STEPHEN L. CALDWELL, DIRECTOR, HOMELAND SECURITY AND 
           JUSTICE, GOVERNMENT ACCOUNTABILITY OFFICE

    Admiral Servidio. Good morning, Chairman LoBiondo, Ranking 
Member Larsen, and distinguished members of the subcommittee. 
It is a pleasure to be here today to discuss the Coast Guard's 
role in securing our maritime infrastructure since the events 
of 9/11 and the subsequent passage of the Maritime 
Transportation Security Act.
    The Coast Guard has made tremendous progress in securing 
America's waterways and supporting an efficient and resilient 
commercial environment. The men and women of the Coast Guard 
and the Department of Homeland Security and its components are 
committed to improving maritime security through continued 
cooperation and collaboration with State, Federal, local, 
international, and industry partners.
    To help prevent terrorist attacks, we developed and 
continue to improve on an effective domestic and international 
maritime security regime. Our layered security strategy 
includes initiatives related to MTSA regulatory enforcement, 
identity and security processes, the international ship and 
port facilities security code, deployable specialized forces, 
and global supply chain security.
    Before 9/11 we had no formal structured maritime security 
regimes for ports, port facilities, or ships, with the 
exception of cruise ships in the United States. With Congress' 
support and through our expansive partnerships, we now have 
strong and comprehensive domestic and international security 
regimes in place. By successfully executing the requirements of 
MTSA and the ISPS Code, we have reduced vulnerabilities within 
the global maritime transportation system.
    Specifically, the Coast Guard has reviewed and approved 
over 11,000 domestic vessel security plans and 3,100 domestic 
facility security plans, overseen the development of 43 port-
specific area maritime security plans and committees, completed 
port security assessments for all U.S. ports using the maritime 
security risk analysis model while collaborating with local 
officials and stakeholders, visited almost 160 foreign 
countries to assess the effectiveness of their port security 
measures and ISPS Code implementation, and overseen the 
continued development of the National Maritime Security Plan 
which supports the National Strategy for Maritime Security.
    Implementation of MTSA requirements such as mandatory 
access control measures, designated restricted areas, and 
screening protocols for persons and vehicles entering 
facilities have hardened physical security in our ports. Our 
continued work with TSA to implement the biometrically enabled 
Transportation Worker Identification Credential is an important 
part of this effort, and we are biometrically verifying almost 
100 TWICs daily at facilities and on vessels. We work closely 
with Customs and Border Protection to identify and evaluate 
cargo risks before arrival and, when necessary, control vessels 
and cargo that may pose a threat.
    Finally, response and recovery protocols established and 
exercised with Federal, State, local, and industry partners 
build a resilient maritime community, one able to recover more 
quickly from any disruption.
    In closing, I was the captain of the port in San Juan, 
Puerto Rico, on September 11, 2001, and my brother Larry was 
working at the Number Three World Financial Center, a building 
seriously damaged in the terrorist attacks. I did not know he 
survived the attack and lost many friends until late that 
night. I was transferred from San Juan to Coast Guard 
headquarters, and I served on the team responsible for 
implementing MTSA and the ISPS Code. I am deeply committed to 
protecting our Nation and our people, and I know firsthand how 
far we have come since MTSA was passed.
    I look forward to continuing to work with Congress in 
enhancing maritime security and providing oversight. I thank 
you for the opportunity to testify today, and I am happy to 
answer any questions you may have.
    Mr. LoBiondo. Thank you, Admiral.
    Mr. Caldwell.
    Mr. Caldwell. Chairman LoBiondo, Ranking Member Larsen, and 
Mr. Cummings, good to see you today and thank you for inviting 
GAO to testify on MTSA as we approach the 10th anniversary of 
this landmark legislation.
    My written statement summarizes almost 10 years of GAO work 
evaluating programs to provide for maritime security, and in 
our statement we include a detailed appendix on some of the 
individual programs with information on what the programs were 
designed to do, what GAO found and recommended, and what those 
programs cost where we were able to find cost information.
    As noted by Admiral Servidio, Federal agencies, 
particularly DHS and its components, have made substantial 
progress in implementing maritime security programs such as 
MTSA.
    Agencies have developed or facilitated the development of 
security plans at the national, port, facility, and vessel 
level.
    Agencies have screened inbound foreign-flagged vessels as 
well as foreign seafarers to ensure compliance with security 
regulations.
    Agencies have enhanced their awareness of the maritime 
domain through extensive risk assessments with MSRAM, through 
vessel tracking, and for information sharing through both 
formal and informal means.
    Agencies developed partnerships to get advanced information 
on incoming cargo to identify the highest risk cargo and to 
ensure that, as appropriate, it was screened or scanned at 
domestic or overseas ports.
    DHS encountered many challenges along the way in 
implementing these programs. Many of these challenges have 
hindered or delayed MTSA. There has already been some 
discussion of that. At the high level, some programs had a lack 
of planning, weak program management, and lax implementation. 
Some programs also experienced a lack of or difficulties in 
coordinating with a multitude of maritime stakeholders.
    As Mr. Larsen discussed, there were also limits on the 
level of resources available to start, operate, and sustain 
many of these programs; and today's more austere budget 
requirements has exacerbated many of these resource challenges.
    Finally, there have been and still are difficulties 
measuring the results of the security programs.
    Because of these problems, there is still some unfinished 
business in implementing MTSA. Chairman LoBiondo has already 
talked about TWIC. I will talk about three other examples.
    Soon after 9/11, Interagency Operations Centers showed 
great promise in Charleston, Norfolk, and San Diego. Congress 
mandated that DHS replicate such centers at all high-risk 
ports. But the efforts have been plagued by limited and 
irregular funding, delays in developing detailed requirements, 
a lack of input from some of the key stakeholders, and weak 
management of the acquisition. It remains an open question 
whether the still-planned IOCs will be more than just single-
agency command centers or the ``Interagency'' Operations 
Centers that Congress had intended.
    The Port Security Grant Program was another program enacted 
soon after 9/11 with good intentions to provide funding for 
security improvements. While these monies have been 
distributed, the program has suffered from a number of 
problems. Program management has moved among several different 
agencies over the years which has reduced long-term 
accountability; the procedure for awarding and distributing 
funds was complex and slow, leading to a large accumulation of 
unspent funds; and, finally, despite assurances since our 2005 
recommendation that the program would develop performance 
measures, there has been little progress determining what the 
$2 billion program has actually bought.
    Several different container security and scanning 
technologies were pursued with high hopes that they would allow 
us to sufficiently scan every container bound for the United 
States. But some premature efforts to move from research and 
development directly into full deployment of new technologies 
as well as several unsuccessful pilots at foreign ports have 
shown we clearly have to reevaluate what we can actually do 
within the existing technical, logistical, economic, and 
diplomatic realities of the container-based international 
supply chain.
    I would like to end on a positive note and acknowledge 
there has been substantial progress in that, collectively, 
these programs have improved the security of our ports. GAO 
will continue to evaluate a number of maritime security 
programs for this committee and others in Congress with the 
common goal of ensuring that ports remain safe and efficient 
engines for economic prosperity.
    I would be happy to respond to any questions now.
    Mr. LoBiondo. Thank you, Mr. Caldwell.
    Admiral, the President's fiscal year 2013 budget would cut 
funding for the Coast Guard by nearly $350 million and over 
1,000 service men and women. Talk to us about what you see 
these proposed cuts meaning, their impact. What does it mean to 
the Service's ability to conduct port security? How does it 
impact traditional missions? I am very concerned about this. I 
would like to hear your take on it.
    Admiral Servidio. Chairman, with increasing 
responsibilities and a declining budget, we will be challenged 
to continue all that we are doing. As Ranking Member Larsen 
said, we are going to have to look at risk-based decisions. We 
are going to have to look at how we best address those risks 
and focus our resources on those activities we are performing 
that have the greatest impact.
    We do continue to use various metrics and tools, such as 
MSRAM, to look at the risks that we have and to drive those 
risks down; and once we have seen that, we can devote resources 
to other areas. But, as you highlighted, sir, it will be a 
challenge to continue to do more if the budget is less.
    Mr. LoBiondo. The Coast Guard's authorization act of 2010 
required the Coast Guard to make their maritime security risk 
assessment model available in an unclassified version to 
facility and vessel owners to assist in the development of 
their risk assessments. The deadline on the Service to do this 
was 180 days. Why has the Coast Guard not met this legal 
requirement?
    Admiral Servidio. Mr. Chairman, I was unaware of that, but 
I can speak firsthand when I was captain of the port in St. 
Petersburg, Florida, all of the maritime industry--the 
stakeholders, the members of the Area Maritime Security 
Committee, and likewise the members of the Harbor Safety 
Committee--knew what was the factors in MSRAM. They were active 
parts in our development of the MSRAM each and every year and 
the revalidation of where we saw the risks are and what our 
action plans were to reduce those risks.
    Likewise, we shared the MSRAM data with the Urban Area 
Security Initiative, the Florida Regional Domestic Security 
Task Force, and other law enforcement agencies so that together 
in the port complex we could see what the greatest risks are 
and how we could utilize all of our different funding sources 
and our resources and our authorities to drive down those 
risks.
    Mr. LoBiondo. I am not sure that that is an answer to the 
question. Maybe you need to try to get back to us.
    Admiral Servidio. I will get back to you, sir, on the 
specifics of that.
    [The information follows:]

        This requirement has been met by the Coast Guard. In 
        November 2011, the U.S. Coast Guard released a 
        nonclassified version of the Maritime Security Risk 
        Analysis Model (MSRAM) titled the Industry Risk 
        Analysis Model (IRAM). IRAM is a terrorism risk 
        analysis tool that employs a similar scenario-based 
        construct as MSRAM and calculates a relative risk index 
        number for scenarios based on threat, consequence, and 
        vulnerability factors. The data for each factor is 
        entered by the owner-operator of the regulated facility 
        or vessel and then IRAM calculates the risk index 
        number, which can be sorted to identify high-risk 
        scenarios. IRAM allows owner-operators to perform a 
        terrorism-focused, security risk analysis of their 
        facilities/vessels, provides a risk-based planning 
        capability for updating operations plans, and provides 
        a means to communicate risk information between owner-
        operators and first responders. To date, six owner-
        operators have requested and been provided the IRAM 
        tool.

    Mr. LoBiondo. Moving to TWIC, can you tell us when the 
final rules on the use of TWIC biometric readers and the 
implementation of Section 809 of the Coast Guard Authorization 
Act of 2010 will be published?
    Admiral Servidio. Sir, it has the Department's highest 
priority, and it is presently in internal clearance.
    Mr. LoBiondo. Well, Admiral, I guess I am expecting you 
sort of had to say that, but it is almost laughable. It has had 
the Department's highest priority for years; and if that is the 
highest priority and how they are dealing with it, I do know 
the frustration that we share here of how poorly this has been 
managed. We just can't get answers out of them, and I guess I 
was hoping beyond hope there would be a little bit more 
specifics about this.
    It is beyond frustrating. We have got a law that is in 
place. It has been ignored. It has been passed over. Congress--
it is almost as if we are not asking questions, and the 
Department just doesn't seem to care about this.
    And I don't put all this blame on the Coast Guard. You are 
forced to react to what the boss says. But I don't know whether 
maybe we should go on a tantrum and a tirade and Rick Larsen 
and I figure out how to pound our shoe on the table together or 
something.
    Mr. Larsen. You don't want shoes off.
    Mr. LoBiondo. We don't want shoes off. OK. We will figure 
out something else. Because I think I speak for everybody on 
the committee, this is a high level of frustration here.
    Admiral Servidio. Mr. Chairman, sir, with regards to 809, 
we did put a policy in place in December of 2011; and over 500 
merchant mariners have been able to receive merchant mariner 
credentials without having a TWIC. That is about 250 or more 
received it just the last month. So we are doing what we can 
from a policy standpoint, sir.
    Mr. LoBiondo. OK. Mr. Caldwell, since enactment of MTSA, 
has the Department of Homeland Security, the Coast Guard or 
Customs developed any metrics or performance measures to 
determine the effectiveness of their efforts to secure the 
Nation's ports and waterways?
    Mr. Caldwell. There have been a couple of performance 
measures put in place. MSRAM is probably the most positive one 
at an individual facility level. MSRAM has been mentioned by 
Admiral Servidio. And we have done a recent report on MSRAM. It 
was very positive, and MSRAM is probably one of the better risk 
management tools in the Department.
    Measuring the larger issue of security at the port level, 
this has been a tougher issue. The Coast Guard developed a 
metric to look at the percentage of risk that its activities 
have reduced in the maritime domain and in ports. Last year 
when we looked at MSRAM we also looked at this metric. We 
thought methodologically the measure was adequate, but it 
overstates the accuracy since it is really based on judgment of 
a lot of Coast Guard experts. So to say they have reduced 
exactly 85 percent or 30 percent of the risk was perhaps 
overstating the case. Coast Guard has agreed to keep using that 
measure but to use it at a reduced level. But that metric has 
probably one of the more serious attempts to look at it 
portwide.
    As far as CPB, most of the metrics have been at the 
individual program level, and those metrics have generally 
measured their activities as opposed to measuring the results 
in terms of reductions in actual risk. As you know, it is hard 
to measure security, particularly deterrence, which is probably 
one of the positive accomplishments of a lot of these programs 
that we have now.
    Mr. LoBiondo. The SAFE Port Act of 2006 set a deadline of 
not later than April 2009, for the issuance of final 
regulations governing the deployment of technology at ports and 
aboard vessels to read TWICs. Now, more than 2 years later, 
there are still no TWIC readers. Until the readers are in 
place, can you give us any level of assurance that TWICs are 
providing adequate access, control, or improved security at our 
ports?
    Mr. Caldwell. TWIC acts as a fast pass right now. We did 
some work last year which showed that it is relatively easy for 
our investigators to use fraudulent TWICs or to obtain them 
fraudulently and then use them to get into secure facilities. 
We have work right now that is looking at the pilots in detail 
which will shed light soon on where DHS is in terms of actually 
using TWICs as biometric identification, as was originally 
intended.
    Mr. LoBiondo. Thank you.
    Mr. Larsen.
    Mr. Larsen. Admiral, thanks again for coming and helping us 
out this morning.
    With regards to container screening in the SAFE Port Act, 
we required 100 percent screening of containers entering the 
U.S. earlier this year, but Secretary Napolitano deferred 
meeting this requirement until 2014.
    In your opinion--if the Coast Guard has an opinion on this 
issue--can this be done in an economical and cost-effective 
manner and is the problem less with technology and more with 
increased cost to shippers and delays and disruptions to the 
flow of commerce? What are the hurdles to achieving 100 percent 
screening?
    Admiral Servidio. Ranking Member, I don't think I am in a 
position to best answer that question. I can say that we work 
with Customs and Border Protection to screen every person, 
every vessel, and all of the cargo that comes into the U.S. We 
do that electronically. We do that looking at the history, 
using a number of different tools. That is what we are doing at 
present. But I am really not in a position to comment on 
physically inspecting all of the containers, sir.
    Mr. Larsen. With regards to performance measures--I am not 
going to ask you to talk percentages or so on--but it strikes 
me everything we have asked the Coast Guard and many other 
agencies to do--and this is going back to 2002, which is a long 
time for me to think back--still, how much of that in any way, 
shape, or form were we doing before we passed MTSA, to give an 
idea of the advances that we have made?
    Admiral Servidio. Sir, I had no tool that could calculate 
what the risks were in the various--I had 21 commercial ports 
when I was down in San Juan, including the largest oil terminal 
and the largest cruise ship port in the U.S., and we really had 
no measures of seeing what those vulnerabilities were and we 
had no systematic way of reviewing them or addressing what 
those risks were.
    I think MSRAM is an important tool in looking at a metric 
on how we are reducing risk. We see that at the port level each 
year when we revalidate it. We can determine how the risks have 
been reduced.
    Likewise, we have seen detention rates for security 
violations each year going down, the number of vessels we are 
detaining for security requirements are also going down, and 
the number of facilities we need to take control actions on are 
likewise going down each year.
    Mr. Larsen. And going down because of----
    Admiral Servidio. Because of MTSA, because of the training 
that we have done, because of the exercises we have done, 
because of the socialization, the fact that security is now 
part of what is expected in the maritime environment and it is 
part of our day-to-day operations, sir.
    Mr. Larsen. And we didn't see that nearly as much pre-2001?
    Admiral Servidio. No, sir.
    Firsthand, other than cruise ships, we had very little 
security. I know in Florida at the time, in 2000, they were 
talking about actions to be taken to reduce theft, pilferage, 
other types of things at the maritime--in the maritime 
environment and facilities. And as a result of MTSA, those 
discussions are no longer going on.
    Mr. Larsen. With regards to ISPS screening, you noted the 
Coast Guard has visited almost 160 foreign countries to assess 
the effectiveness of port security measures and implementation 
of ISPS Code requirements. Can you shed some light on that 
process a little further for us?
    Admiral Servidio. Yes, Ranking Member. At present, it is 
approximately every 2 years we look to visit foreign countries 
to ascertain their implementation of the ISPS Code, what they 
are physically doing, and it is also to establish a 
relationship.
    For example, just yesterday, we had representatives from 
Djibouti, Kenya, and Somalia that were part of a reciprocal 
visit. We visited their countries, except for Somalia. At the 
present time, due to security reasons, we aren't sending anyone 
to their country. But we visited their countries, and they come 
here, and we go over our program. We highlight what we are 
doing, how we are doing it. And it is this exchange of both 
information, of training, that we feel has substantially 
increased the security level.
    What we do is we ensure that the countries are fully 
implementing the ISPS Code. If they are not, it goes through an 
interagency process, sir; and if it is determined that the 
country has not effectively implemented it, there are 
conditions of entry that are required for vessels that have 
called on that country in the last five port calls. We could 
potentially delay the vessel's arrival, verify security 
precautions, screen them, or do a number of other control 
actions before that vessel actually enters the U.S.
    Mr. Larsen. And you are meeting with port representatives? 
Because some of these countries either have much weaker Coast 
Guards or no Coast Guard.
    Admiral Servidio. Yes, sir. Yesterday was the commandant of 
the Djibouti Coast Guard. It was their port facility leader for 
Kenya. It was their minister responsible for port security. And 
for Somalia it was one of their port managers that was visiting 
with us.
    Mr. Larsen. Thank you.
    Mr. Caldwell, with regards to MSRAM, considering the Coast 
Guard depends upon MSRAM, we have heard what an important tool 
it is in its risk-based security framework, if Coast Guard 
officials are saying now--and they are saying--that personnel 
cuts are limiting the use of MSRAM data, what are the 
implications if the Coast Guard's budget were to continue to be 
cut? It is one thing to have a great tool to use. It is another 
thing not to be able to use it.
    Mr. Caldwell. Well, in a recent report on MSRAM we did have 
some concerns about whether Coast Guard field staff who worked 
on MSRAM at the sectors had the time to use the tool accurately 
and to update the data in it. One of the strengths of MSRAM 
that we found at the Coast Guard is that on an annual basis 
they are revalidating the data. So it wasn't just a one-time 
entry process.
    Mr. Larsen. And the Admiral mentioned that.
    Mr. Caldwell. In terms of the training.
    The biggest concern we have with MSRAM is not as much in 
the analysis. It is to what extent is it actually useful for 
making decisions at an operational level. For example, MSRAM 
can tell you the risk at a facility and what you might do to 
reduce vulnerabilities at a facility. What is harder is for 
that captain of the port to then make decisions of how to use 
that risk information from MSRAM. Because, of course, the 
captain of the port has 10 other statutory missions to engage. 
So while MSRAM might indicate it is a good idea to escort this 
cruise ship or this tanker that is coming into port, the 
captain of the port, he or she may have a search and rescue 
case going on or some military out-load to escort or other 
things, other priorities. But there will obviously be a little 
less fidelity in the model if we reduce the resources dedicated 
to keep it current.
    Mr. Larsen. Well, if you are following the Coast Guard on 
Twitter like I do, you will note that they are pretty busy all 
over the country every day doing a lot of things that probably 
don't have anything to do with MSRAM, including up in the 
Northwest. So we have to do a better job ourselves up there.
    Mr. Caldwell, you have written--I noted in your written 
statement about the WatchKeeper Program. This new information 
management and sharing system has been dogged since its 
inception due to the lack of good engagement between the 
Federal, State, and local agencies and port partners with the 
Coast Guard in developing the requirements. Furthermore, you 
assert the situation has had a negative impact on the formation 
of these IOCs.
    At this point, is it possible for the Coast Guard to 
reconfigure WatchKeeper or better engage partner agencies and 
stakeholders to provide the type of information that was first 
envisioned under MTSA when it was passed from an outside GAO 
point of view?
    Mr. Caldwell. If you think of these centers and what they 
were intended to be originally, I don't think they are going to 
be ``centers'' at all. They are not going to be a physical 
place where people actually gather. Given the costs associated 
with building those physical centers, the next best thing is to 
move to a virtual model where you could share information via 
WatchKeeper.
    The beauty of the physical centers is that every agency 
could bring in their own IT tools and have it there, and it 
might not be all systems on one screen, but they all have their 
equipment there and can share information by looking at things 
and look at their own systems.
    With WatchKeeper, there is some way to salvage it, but it 
will require a lot of attention, and the Coast Guard has not 
requested funds beyond 2013 to continue implementing that. It 
would take a pretty strong outreach effort. We found that 82 
percent of the stakeholders that were given access to 
WatchKeeper had never even logged on. So the Coast Guard has a 
long way to go to fix that.
    It is the outreach piece they are going to have to work on. 
Even the Federal agencies are not participating.
    Mr. Larsen. Admiral, do you have comments both on 
WatchKeeper and on the brick and mortar IOC versus the virtual 
IOC issue?
    Admiral Servidio. Ranking Member, I recognize there are 
going to be some challenges in getting ports to fully utilize 
WatchKeeper, because over the last 10 years there has been 
other systems that have been developed for some of that 
internal communications.
    Going back to when I was in St. Petersburg, we had a joint 
teleconference every morning with Customs and Border 
Protection, with the local sheriffs, with the Tampa Police 
Department, where we would go over who is going to be 
patrolling in what areas, what the risks were, what high-risk 
activities were taking place, who would be providing patrols 
and escorts and other types of things.
    Translating some of that into WatchKeeper now that that 
system has been rolled out, it is going to take some change in 
people's attitudes. And in most of our ports likewise there 
have been other systems that we have used. But I think as 
WatchKeeper goes to 20 different ports by the end of this 
fiscal year we will see that it is going to be a tool that will 
be used more in the ports. But, right now, I think there are 
other tools and communication structures that some people are 
using. So we are going to have to build to it, sir.
    Mr. Larsen. All right. Thank you.
    Thank you, Mr. Chairman.
    Mr. LoBiondo. All right. I would like to thank you, 
Admiral. Thank you, Mr. Caldwell. We will take a brief break 
while we reconfigure for the second panel.
    OK. We will reconvene. The second panel this morning is Ms. 
Bethann Rooney, manager of port security of the Port Authority 
of New York and New Jersey, who is testifying on behalf of the 
American Association of Port Authorities.
    We also have Mr. Chris Koch, who is president and CEO of 
the World Shipping Council.
    Both Mr. Koch and Ms. Rooney were tremendously--very, very, 
very helpful to this subcommittee as we went about our business 
and the process of drafting MTSA 10 years ago and trying to get 
it right and understand how it works in the real world. So I 
want to thank you for your help then and thank you for being 
here today.
    Ms. Rooney, you are recognized.

  TESTIMONY OF BETHANN ROONEY, MANAGER OF PORT SECURITY, PORT 
 AUTHORITY OF NEW YORK AND NEW JERSEY, TESTIFYING ON BEHALF OF 
 THE AMERICAN ASSOCIATION OF PORT AUTHORITIES; AND CHRISTOPHER 
        KOCH, PRESIDENT AND CEO, WORLD SHIPPING COUNCIL

    Ms. Rooney. Good morning Chairman LoBiondo, Ranking Member 
Larsen, subcommittee members. Thank you for inviting us here 
today to discuss MTSA over the past decade.
    Prior to 9/11, security was not a top concern for most U.S. 
ports. Eleven years ago today, that all changed. Congress and 
the administration took quick and decisive action to focus on 
the risk to our seaports. Enhancing maritime security and 
protecting our ports from acts of terrorism and other crime 
remains a top priority for the American Association of Port 
Authorities and our members. Protecting America's ports is 
critical to our Nation's economic growth and vitality and is an 
integral part of homeland security and national defense.
    The challenge for the past 10 years, however, has been to 
integrate security into the efficient and economic flow of 
commerce. We commend the Coast Guard for its excellent job in 
developing the regulations and working in partnership with 
industry to secure our ports.
    Maritime security is a continuous activity that requires 
the attention of many individuals. The cost of meeting and 
maintaining the requirements of the security regulations is 
significant. Implementing MTSA is not a one-time expense. 
Rather, it requires recurring costs to operate, maintain, and 
staff the equipment and systems that were put in place. My 
agency alone has spent $166 million on port security in the 
past 11 years.
    As was mentioned, the foundation of a good security program 
is a risk assessment tool. MSRAM should be used by all Federal 
agencies to assess the risks in the maritime environment, and, 
as has also been mentioned, we would like to see MSRAM made 
available to regulated entities to assess the risk of their own 
facilities.
    Key to enhancing and maintaining security in ports is the 
Port Security Grant Program. Our economy, safety, and national 
defense depend largely on how well we can protect our seaports, 
and cuts in Federal funding present significant challenges to 
the security of our ports. We urge Congress to provide full 
funding for the Port Security Grant Program.
    DHS is proposing to merge all grant programs into a single 
program that would be managed by the States. We encourage your 
committee's continued support to voice opposition to this new 
structure.
    The Port Security Grant Program is one of just a few 
security grants that requires a cost-share. At a minimum, we 
urge Congress to direct the Department to eliminate the cost-
share for public agencies and our tenants. We also ask for this 
committee's assistance to ensure that the performance period 
for port security grants is no less than 3 years.
    While the MTSA authorized grant funding to be used for 
equipment that detects weapons of mass destruction and 
conventional explosives, grant funding cannot be used to fund 
Federal functions such as cargo inspection to ensure that the 
goods entering the United States are in fact free of restricted 
and prohibited items.
    Today, DNDO and CPB are fiscally constrained and are asking 
port operators to pay for Radiation Portal Monitors. As imports 
increase and container terminals reconfigure and expand, we 
need to ensure that we can continue to scan all of the cargo 
that is entering the United States. We would like to work with 
Congress and DHS to develop a plan to upgrade the obsolete 
equipment in our ports. Ports should not be responsible for 
paying for DHS owned, operated, and maintained equipment. If we 
are, we should be able to use grant funding to help offset 
those costs.
    There has been a lot of discussion this morning about TWIC 
already, and we have worked closely with TSA and Coast Guard 
for many years on this important program. We strongly support 
TWIC and look forward to the day when it will be fully 
implemented.
    The majority of TWICs will expire in the next 6 to 9 
months. We are pleased that TSA has taken steps to address the 
issue of offering a reduced cost 3-year renewal option. 
However, our members are concerned that the lack of an updated 
threat assessment could compromise the security of our 
facilities.
    We are also concerned that the renewal or extension process 
be convenient and efficient. TSA and their new contractor 
should again work closely with the maritime community on such 
issues as enrollment center locations, bulk payment, and the 
availability of onsite enrollment and activation. When the 
reader rule is finally published, it is imperative that 
sufficient time be given to ports to implement the requirements 
and that adequate port security grant funding be available.
    TWIC projects should be a top priority of the grant program 
once the reader rule is released. We encourage the Coast Guard 
to continue their proposed rulemaking process and for TSA to 
complete the reader testing and publish a qualified technology 
list.
    Finally, as this committee considers future enhancements to 
the MTSA, we respectfully request you also consider a number of 
additional areas of concern that were outlined in my written 
statement.
    Thank you for inviting us to testify on the 10th 
anniversary of the Maritime Transportation Security Act. We are 
indeed safer than we were 10 years ago, and the AAPA and its 
members remain committed to doing its part to protect America.
    I would be happy to answer any questions you may have.
    Mr. LoBiondo. Thank you.
    Mr. Koch.
    Mr. Koch. Thank you, Mr. Chairman and Congressman Larsen, 
for having this hearing. It is always appropriate to review 
where we are and where we are going.
    My testimony, like other testimony here today, tries to set 
forth and discuss the multilayer risk assessment strategy that 
the DHS has developed cooperatively between CBP and the U.S. 
Coast Guard.
    There is obviously a sophisticated system in place for 
vessel tracking using LRIT and other technology, obviously a 
regime in place to look at people and the security of the 
people, both on the ships that are coming in and out of U.S. 
ports as well as those working in the ports. There is a good 
strategy for vessel security plans, for port security plans, 
and, importantly, which we know has been an issue to this 
committee and Congress in general, for the cargo security as 
well, particularly containerized cargo. And I think DHS 
deserves credit for having constructed a system that is clearly 
the most sophisticated system of any trading nation in the 
world in terms of what data it acquires before vessel loading 
from the people who should have the best information available 
to them, so that Customs can undertake its cargo screening 
before vessel loading.
    We continue to believe that before vessel loading screening 
is the proper strategy. Obviously, that requires getting the 
best data possible, and we think improvements have been made in 
that, and we think CBP is on the right track.
    I guess what this basically says is that we believe that 
the strategy that has been put together makes sense. It is a 
sound strategy. The question really now should focus on the 
implementation of that strategy. Are we doing what we need to 
do to make that strategy actually effective?
    Perhaps the most prominent question in that regard is the 
one that the subcommittee has already identified here today, 
and that is the TWIC, in terms of the personnel security. That 
obviously needs work, and I think everybody is looking forward 
to seeing DHS deliver on the high priority it said it has on 
this and to having the proposed rule out before the end of this 
year.
    One of the issues in terms of getting better information to 
the Government is how the Government uses that information. 
Obviously, you would probably be interested in having a sit-
down with CBP to talk about how the National Targeting Center 
deals with all of the cargo information it gets. Our 
understanding is it has improved their screening capability 
quite a bit.
    Obviously, the high-volume shippers of repetitive products 
are really not the kind of risk that is probably prominent in 
their minds. Whether it is Ford auto parts or Heineken beer 
coming in, those repetitive high-volume shippers are probably 
pretty low risk. It is the cargo from people you see less 
often, the shippers who don't have a good track record or who 
may appear in consolidated boxes coming through, that requires 
the kind of attention, requires the scanning of those boxes if 
CBP is not satisfied that it has enough information.
    Our understanding is that the risk assessment system is 
working pretty well. Our understanding is that Customs is 
getting the information it wants. But that would be something 
you may want to be looking at as well.
    One of the issues we have identified, which we also 
identified in the last hearing at which we were asked to 
testify, is getting CBP even better information about container 
cargo weights. We have a proposal at the IMO for that. We thank 
both you for having supported that proposal. It will be debated 
later this month at the IMO. The U.S. Government has agreed to 
cosponsor that proposal.
    We think it makes good sense, certainly from a safety 
perspective, but we also believe that there is security value 
on this, and we understand that CBP has informed Coast Guard of 
their support for container weight verification for security 
risk screening purposes.
    So all of those things being said, we believe the 
partnership between the industry and CBP and the Coast Guard is 
working quite well. There is good, open, honest dialogue. If 
there is a risk, it is communicated and people can act on it 
when they are reviewing vessel security plans or port security 
plans, and we continue to believe that the focus should be on 
the implementation of the strategy which we believe is a sound 
strategy.
    Thank you, Mr. Chairman. I will be happy to take any 
questions.
    Mr. LoBiondo. Thank you, Mr. Koch.
    Well, based on what you just said about working together 
and sharing ideas, do you feel the Government has reached out 
to the industry to understand how it works in the real world so 
that they can get a better perspective on what can be done for 
maritime security? You are pleased with that communications and 
reach-out?
    Mr. Koch. Yes, we are. I think when MTSA was just being 
rolled out there were bumps in the road which you might expect 
when a regime like that is coming together and being 
implemented. But the experience our members have had has been 
both the Coast Guard and CBP are quite professional; and when 
they have issues, the relationships are good.
    Liner shipping might be a little bit different than other 
sectors because the vessels--the container ships and liner 
shipping vessels are coming into ports every week--are 
regularly scheduled services. It is the same crews. It is the 
same captains. They are there time and time again. Schedule 
reliability is key, so the operators will bend over backwards 
to make sure the Government has got whatever it needs so they 
can stay on schedule; and if there is a question, the operators 
bend over backwards to try to make sure that the Coast Guard or 
CBP has what they need. We think that goes on in other sectors 
as well, but at least our experience has been the cooperation 
has been excellent.
    Mr. LoBiondo. On the TWICs, only U.S. mariners carry them. 
What in your view could be done to improve the security of the 
Merchant Marine credentials carried by foreign mariners?
    Mr. Koch. Well, it is a difficult diplomatic question. The 
U.S. Government has taken a position which is far more strict 
than many trading nations, which is that crewmen coming in on a 
foreign-flagged ship, if they are going to get off the ship in 
the U.S., have to have a visa. The ILO Maritime Labor 
Convention, which is about to enter into force internationally, 
takes a different view, which is that seafarers ought to be 
able to get off the ship without a visa. The U.S. Government, 
Australia, several other governments have said, no, the 
security of the United States requires that you go through the 
visa process and you have an interview and that that process be 
pursued.
    So we believe the visa process satisfies the objectives of 
the Department of State and DHS in terms of ensuring that the 
crew on the ships coming to the U.S. have passed a sufficient 
security check that they are trustworthy.
    I would point out that is different than many nations who 
have less security screening requirements on crewmen than the 
U.S. does.
    Mr. LoBiondo. Thank you.
    Ms. Rooney, your port hosted a pilot program for the TWIC 
reader. Can you give us kind of a thumbnail sketch or a brief 
discussion on the pitfalls that the port encountered on that?
    Ms. Rooney. Yes, sir. There were a number of issues that we 
encountered with the pilot program, some of which were able to 
be worked out during the course of the pilot program and others 
that were still unresolved. But, in essence, they were 
technology issues. They were issues that allowed the reader to 
make a positive confirmation of the biometric that was stored 
in the card within a timely manner.
    Many of the issues that were overcome had to do with user 
training and user knowledge and experience. So the first couple 
of times that a mariner or a truck driver or a longshoreman was 
presented with a TWIC reader, they fumbled over the process; 
and, over time, those were resolved. We are confident that 
those issues can be addressed and successfully overcome and we 
can move from this flash pass to the biometric credential that 
was originally intended.
    Mr. LoBiondo. Thank you.
    Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman.
    Ms. Rooney, with regards to both port security grant 
funding and the cost-share requirement, I have a couple 
questions.
    First off, just some context. The Congress passed and the 
President signed recently a transportation bill where we went 
from 110 separate surface transportation accounts to 
approximately 30 or 40. We had to gore some oxes to make that 
happen, but we thought, over time, even going back to the 
Democratic majority, to the Republican majority, that we needed 
to consolidate some of these accounts to give some more 
flexibility to recipients of the Federal dollars so they could 
choose more what they wanted to do, as opposed to saying this 
dollar can only do this and that dollar can only do that.
    So that is the context of the question with regards to port 
security grant funding. I would just like to hear the point you 
want to make about why port security grant funding needs to 
stay separate, as opposed to being consolidated with other 
accounts other than it just should because it is.
    Ms. Rooney. I think the point that it needs to be separate 
is, by and large, because the maritime industry is largely 
owned and operated by the private sector. And the private 
sector is responsible for the security of the ports first and 
foremost in connection with their Federal, State, and local 
partners.
    So when those private-sector entities--and, for example, in 
my port there are 185 facilities that are regulated by the 
Coast Guard. Approximately 170 of them are owned by private-
sector operators. When those private-sector companies come 
forward in an environment where they are competing with the New 
York City Police Department, with the New York City Fire 
Department, with the Port Authority and others for dollars, 
they will be challenged to truly secure their facilities when 
other high-risk assets and activities are taking place in an 
area such as New York and New Jersey.
    Mr. Larsen. OK. All right.
    And then with regards to the cost-share requirement, again, 
we have cost-share on surface transportation as well. Can you 
discuss a little bit more about the challenge of the cost-share 
in your situation?
    Ms. Rooney. Again, while many of the--while much of the 
responsibility at the facility level for security is with the 
private owners and operators, the public agencies provide 
layers of security over and above that. And when you look at 
the history of where the port security grant dollars have gone 
to in the last 4 or 5 years, much of that is going to public-
sector agencies, all of whom are constrained with their own 
budgets today. So it becomes very difficult for public-sector 
agencies to provide the cost-share that is necessary. And, as a 
result, what we have seen historically for many years now is 
public-sector agencies pulling out of those grants and those 
risks no longer being mitigated because they cannot afford the 
cost-share.
    Mr. Larsen. OK. Thank you.
    Sounds like everything is great in the World Shipping 
Council, Mr. Koch.
    Mr. Koch. If the companies could just learn how to be 
profitable, it would be even better.
    Mr. Larsen. With regards to MTSA, your attitude in the last 
hearing was the same as this one. It is like if it is a 
problem, we are going to fix it, we are going to work this 
thing out, we are going to find a way to move cargo, because 
that is the job of the industry. And that is great. But can you 
talk a little bit about screening protocols under MTSA that 
shippers and carriers have to abide by to import cargoes in the 
U.S.?
    This gets back to the 100 percent scanning of containers 
entering the U.S. Is the scanning--do you see that scanning as 
unnecessary, given cargo screening protocols, the 10 + 2 cargo 
screening protocols? Is 100 percent screening necessary? Should 
it be all risk-based? Where do you think we ought to be moving?
    Mr. Koch. Well, I think the 10 + 2 initiative did give CBP, 
obviously, a lot more information to do effective screening. 
And there is a semantic issue here. I think CBP would say they 
are screening 100 percent of all cargo before vessel loading.
    Mr. Larsen. Right.
    Mr. Koch. Screening meaning analyzing the information and 
making a judgment about risk.
    It is the 100 percent scanning of a box, usually meant to 
be both radiation scanning and a kind of visual scan via x ray, 
gamma ray, or analogous technology. And frankly, the problem 
with such visual scanning of all containerized cargo is it is 
just not practical.
    Whether it is needed or not I think is also a debate. 
Without meaning to be glib about it, I really don't think you 
need to scan every box of Heineken beer coming into the U.S., 
as an example, or Toyota auto parts coming into the U.S. I 
mean, I think the risk would not justify the expense of doing 
that.
    The other problem, obviously, with the 100 percent proposal 
is it is an extraterritorial assertion of jurisdiction, and you 
are asking foreign governments to do something and incur the 
costs to do all of it. And there is resistance to that. They 
point out, with some degree of fairness, the U.S. doesn't 
undertake any such scanning for any of its exports, so why is 
it fair to require them to do that for their exports? And so 
there is a reciprocity issue there.
    And then there is also the technology issue. The technology 
has not yet developed to a point where you could process that 
many containers through the system and continue to have the 
efficient flow of commerce.
    The risk-based strategy is a strategy that from a practical 
perspective is your only choice. And so the question really I 
think is not to question the risk-based strategy so much as is 
to ensure that the agency, CBP, in charge of this, is getting 
the data that really makes sense. Is there data that they 
should be getting that they are not getting? And are they 
enforcing the existing obligations on people to give them the 
data?
    In other words, you have an obligation for ocean carriers 
to file their manifests, their stowage plans, and all their 
container status messages. You have obligations on NVOs to file 
all of their manifests before vessel loading. And you have 
obligations on importers to file the 10 data elements 
identified in the 10 + 2 reg. Are they doing that?
    Our understanding is they are. But I mean it would be worth 
checking into to make sure that they are getting the data that 
the strategy calls for.
    Mr. Larsen. Thank you, Mr. Chairman.
    Mr. LoBiondo. Ms. Rooney, Mr. Koch, I would like to thank 
you for being here this morning; and the subcommittee is 
adjourned.
    [Whereupon, at 10:31 a.m., the subcommittee was adjourned.]
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