[Senate Hearing 115-317]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 115-317

      COMBATTING THE OPIOID CRISIS: EXPLOITING VULNERABILITIES IN 
                           INTERNATIONAL MAIL

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

                                HEARING

                               BEFORE THE

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                                 OF THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS


                             SECOND SESSION

                               ----------                              

                            JANUARY 25, 2018

                               ----------                              

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming             MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota            KAMALA D. HARRIS, California
STEVE DAINES, Montana                DOUG JONES, Alabama

                  Christopher R. Hixon, Staff Director
               Margaret E. Daum, Minority Staff Director
                     Laura W. Kilbride, Chief Clerk
                    Bonni Dinerstein, Hearing Clerk


                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                       ROB PORTMAN, Ohio Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
STEVE DAINES, Montana                MAGGIE HASSAN, New Hampshire

            Andrew Dockham, Staff Director and Chief Counsel
                John Kilvington, Minority Staff Director
                      Kate Kielceski, Chief Clerk
                            
                            
                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Portman..............................................     1
    Senator Carper...............................................     5
    Senator Johnson..............................................     9
    Senator Lankford.............................................    22
    Senator Heitkamp.............................................    32
    Senator Klobuchar............................................    34
    Senator Daines...............................................    37
Prepared statements:
    Senator Portman..............................................    55
    Senator Carper...............................................    60

                               WITNESSES
                       Thursday, January 25, 2018

Joseph P. Murphy, Chief, Internationl Postal Affairs, Office of 
  Specialized and Technical Agencies, Bureau of International 
  Organizations, U.S. Department of State........................    11
Robert Cintron, Vice President, Network Operations Management, 
  United States Postal Service; accompanied by Guy Cottrell, 
  Chief Postal Inspector, United States Postal Service...........    13
Todd C. Owen, Executive Assistant Commissioner, Office of Field 
  Operations, U.S. Customs and Border Protection, U.S. Department 
  of Homeland Security...........................................    14
William Siemer, Acting Deputy Inspector General, Office of 
  Inspector General, United States Postal Service................    16
Daniel D. Baldwin, Section Chief, Office of Global Enforcement, 
  Drug Enforcement Administration, U.S. Department of Justice....    18
Gregory Nevano, Deputy Assistant Director, Illicit Trade, Travel, 
  and Finance Division, Homeland Security Investigations, U.S. 
  Immigration and Customs Enforcement, U.S. Department of 
  Homeland Security..............................................    20

                     Alphabetical List of Witnesses

Baldwin, Daniel D.:
    Testimony....................................................    18
    Prepared statement...........................................    90
Cintron, Robert:
    Testimony....................................................    13
    Prepared statement...........................................    69
Murphy, Joseph P.:
    Testimony....................................................    11
    Prepared statement...........................................    65
Nevano, Gregory:
    Testimony....................................................    20
    Prepared statement...........................................    96
Owen, Todd C.:
    Testimony....................................................    14
    Prepared statement...........................................    75
Siemer, William:
    Testimony....................................................    16
    Prepared statement...........................................    84

                                APPENDIX

Staff Report.....................................................   105
Exhibit A........................................................   205
Statement from the National Treasury Employees Union.............   215
Responses to post-hearing questions for the Record from:
    Mr. Murphy...................................................   219
    Mr. Cintron..................................................   223
    Mr. Owen.....................................................   230
    Mr. Siemer...................................................   267
    Mr. Baldwin..................................................   269

 
                     COMBATTING THE OPIOID CRISIS:
                     EXPLOITING VULNERABILITIES IN
                           INTERNATIONAL MAIL

                              ----------                              


                       THURSDAY, JANUARY 25, 2018

                                   U.S. Senate,    
              Permanent Subcommittee on Investigations,    
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:03 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Rob Portman, 
Chairman of the Subcommittee, presiding.
    Present: Senators Portman, Lankford, Daines, Johnson, 
Carper, Heitkamp, and Hassan.
    Also present: Senator Klobuchar.

            OPENING STATEMENT OF SENATOR PORTMAN\1\

    Senator Portman. This hearing will come to order.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Portman appears in the 
Appendix on page 55.
---------------------------------------------------------------------------
    Thank you all for being here. Today's hearing continues the 
Permanent Subcommittee on Investigations' work to combat the 
opioid epidemic that is gripping our communities around the 
country.
    Last Congress, the Subcommittee issued a bipartisan report 
on opioid-related fraud and abuse in the Medicare Part D 
program. This Congress, the Subcommittee held a hearing on the 
growing problem of individuals buying illicit opioids over the 
Internet and shipping them to the United States through the 
mail.
    The opioid crisis, sadly, continues to get worse, not 
better. Last month, the Centers for Disease Control (CDC) 
reported that more than 63,600 Americans died in 2016 from drug 
overdoses. Indications are that number increased in 2017.
    These overdose deaths are shocking. The number of deaths 
continue to grow. My own home State of Ohio, we were told 
recently, is now second in the country in terms of overdose 
deaths.
    It is heartbreaking, and increasingly, these overdoses are 
due to a synthetic heroin, illegal versions of fentanyl, a drug 
that is 50 to 100 times stronger than heroin. In fact, in Ohio, 
fentanyl and its variations were involved in 60 percent of the 
overdose deaths last year. It has become the number one killer 
in Ohio.
    The vast majority of illegal fentanyl is purchased online 
from labs in China and then shipped to the United States 
through the mail. We will hear from the Drug Enforcement Agency 
(DEA) today about that, but I think it is shocking to people 
when they find out that this is coming through our U.S. mail 
system.
    Last night, the Subcommittee released its bipartisan 
report. I hope you all have seen it, how criminals exploit 
vulnerabilities in international mail and use the U.S. Postal 
Service (USPS) to ship illicit opioids into our country.
    Without objection, I would move that the Subcommittee's 
report be entered into the record.\1\
---------------------------------------------------------------------------
    \1\ The Subcommittee report appears in the Appendix on page 105.
---------------------------------------------------------------------------
    After our initial 2017 hearing, we set out to find out how 
easy it is to purchase fentanyl online and how it was shipped 
to the United States. What we discovered, of course, was it was 
shockingly easy to do so. All you had to do was search 
``fentanyl for sale.'' That simple search returned hundreds of 
websites, many affiliated with Chinese labs, all openly 
advertising illegal drugs.
    The field was narrowed to just six websites, and we sent 
emails asking basic questions about how to purchase and ship 
fentanyl to the United States.
    These online sellers were quick to respond, unafraid of 
getting caught apparently, and ready to make a deal. You will 
see that in the report. They offered discounts for bulk 
purchases, even tried to up-sell us to carfentanil, a more 
powerful synthetic heroin that is so strong, it is used as an 
elephant tranquilizer.
    Ordering these drugs was as easy as buying any other 
product online. I must note our Subcommittee never completed a 
purchase of drugs online. It was just too dangerous to risk 
exposing someone to deadly fentanyl during delivery. But we did 
use the online seller's payment information to determine if 
others were buying, and of course, we found out they were. Just 
from these six websites alone, we identified more than 500 
payments to online sellers by more than 300 Americans, totaling 
$230,000, most of which occurred over the last two years. This 
is just a small sample, only six websites, and then, frankly, 
we used just one payment system to be able to identify some of 
these buyers.
    The 300 people, by the way, were located in 43 different 
States, with individuals from my home State of Ohio, 
Pennsylvania, and Florida sending the most money to online 
sellers.
    The map that we have back here behind us shows the 
concentration of where most of the purchases were made. That is 
also in the report.
    We also asked how the online sellers would ship the drugs 
to us. Every single one of them preferred to use the U.S. 
Postal Service. They did not want to use the private carriers 
like Dalsey, Hillblom and Lynn (DHL), Federal Express (FedEx), 
United Parcel Service (UPS). They wanted to use the Postal 
Service. They told us they used the Postal Service because the 
chances of the drugs getting seized were so insignificant that 
delivery was essentially guaranteed.
    We were also able to track hundreds of packages related to 
these online purchases. We identified seven people out of the 
300 who died from fentanyl-related overdoses after sending 
money to and receiving packages from these online sellers.
    One of these individuals who died was a 49-year-old Ohioan 
from the Cleveland area who sent about $2,500 to an online 
seller, received 15 packages through the Postal Service over a 
10-month period. His autopsy confirmed that he died from acute 
fentanyl intoxication just weeks after he received a package 
from this online seller.
    By analyzing more than 2 million lines of shipment data 
obtained in our investigation, we located three individuals in 
the United States who were likely distributing these drugs. We 
identified more than 120 instances of different people sending 
a payment to an online seller in China and then a day or two 
later receiving a package from one single Pennsylvania address.
    The person at this Pennsylvania address, by the way, was 
working with the online seller to domestically transship drug 
purchases.
    Shipping data reviewed during the course of the 
investigation also indicated other individuals who purchased 
items to make pills, including pill presses, chemical bonding 
agents, and empty pill casings. It is not surprising that 
people are ordering fentanyl online to sell. The profit margins 
are just staggering.
    Based on DEA estimates, the street value of the online 
transactions from just the six websites the Subcommittee 
investigated translates to about $760 million in fentanyl pills 
to sell on the streets of our communities.
    We are already working with law enforcement authorities to 
make sure these drug dealers can be brought to justice and will 
continue to do so after this hearing.
    But our findings today show the crucial role Advanced 
Electronic Data (AED) can play in protecting our country and 
fighting the opioid epidemic.
    We also need some legislative changes. Last year, the 
Postal Service only received advanced electronic data on about 
36 percent of the more than 498 million international packages 
coming into our country, so about 500 million packages a year 
and only about 36 percent of them have the advanced electronic 
data that allows law enforcement to identify these suspicious 
packages. This means that about 318 million international 
packages came here with no data; therefore, no ability for 
Customs and Border Protection (CBP) or other law enforcement we 
will hear from today to target these packages for screening.
    We did not know with regard to 318 million packages who 
sent it, where it was going, or what was in it, and this is a 
massive loophole that is undermining the safety and security of 
our country.
    In addition, the data we do get from foreign posts that we 
reviewed during our investigation appears to be of questionable 
quality, so it is only 36 percent, but even much of that data 
is not helpful. At times, the data was nothing more than 
illogical lines of letters and characters entered by someone 
who did not understand how to construct a standard American 
address.
    Even when CBP has the data and targets a package, the 
Postal Service fails to locate it about 20 percent of the time. 
Again, advanced electronic data, 36 percent, much of that data 
is not very helpful, and even when law enforcement says, ``Aha. 
We have a package here that looks like it is suspicious. We 
would like to look at it,'' 20 percent of the time, they cannot 
find the package. It gets through.
    What we are left with is a Federal Government whose 
policies and procedures are wholly inadequate to prevent the 
use of international mail to ship illegal synthetic opioids 
into the United States.
    In contrast, our Postal Service provides data on about 90 
percent of the packages that it ships to foreign posts. So 
about 90 percent of what we send out, we do provide that 
electronic data to foreign governments.
    After September 11, 2001 and the terrorist attacks on that 
day, collecting advanced electronic data was identified as a 
national priority for all the right reasons.
    In 2002, in fact, Congress required private carriers to 
collect this data, so UPS, FedEx, DHL, and others were required 
to collect it. It was left up to the discretion of the 
Postmaster General and the Treasury Department with regard to 
the Postal Service. They were encouraged to do it, encouraged 
to study it, but it was left up to their discretion.
    For more than a dozen years, nothing happened, essentially, 
leaving Customs and Border Protection to manually inspect 
targeted packages, which is the equivalent, of course, to 
finding a needle in a haystack, again, now 500 million 
packages. Then it was not that many, but hundreds of millions.
    To their credit, the Postal Service and CBP started a pilot 
program in late 2015 to target suspicious packages from China 
using advanced electronic data, but our investigation found a 
lack of planning, the different missions of the agencies, and 
personality conflicts hampered the success even of the pilot 
program that was started in 2015.
    That pilot program, by the way, started at John F. Kennedy 
(JFK) International Airport, and our investigators were able to 
see that in action.
    Despite these problems, the Postal Service's head of Global 
Trade Compliance wrote that the pilot program allowed them to 
``put a positive spin'' on stopping opioids.
    While both CBP and the Postal Service agreed the pilot 
should be rolled out to all international mail facilities, they 
only started that after this Subcommittee held its May 2017 
hearing. We are glad they did it. We are glad the hearing 
encouraged them to do it.
    We learned that this process was conveniently completed 
just days in advance of this hearing, earlier this week. Again, 
I think this hearing probably motivated some action, which is 
good, but this should have been a priority without having to 
hold this hearing. It should not take a congressional 
investigation into the Postal Service and what is happening 
with international mail to get our government to do its job.
    One part of the solution is more data, and that is why we 
have introduced the Synthetic Trafficking and Overdose 
Prevention Act (STOP Act), which would require advanced 
electronic data on international packages shipped through the 
Postal Service.
    We currently have 29 cosponsors on both sides of the aisle, 
and I know this report and hearing will put pressure on us here 
in the Senate to finally take some action.
    I really want to thank Senator Carper and his staff for 
working so closely with us on this investigation. There is a 
lot more to be done to turn the tide of the opioid epidemic, 
clearly, but stopping these deadly drugs from ever reaching our 
streets is certainly a good start.
    As the coauthor of the Comprehensive Addiction Recovery Act 
(CARA), I have focused most of my career, actually over the 
last 20-some years, on prevention, treatment, and longer-term 
recovery. That is all important, but keeping this poison from 
coming into our communities is something we can and should do.
    Just in the past week near Toledo Ohio, five individuals 
overdosed and three died, fentanyl-related overdoses. It is so 
bad that officials issued an opioid advisory warning to the 
public begging them to stay away from what was clearly a ``bad 
batch of opioids'' in northwest Ohio.
    How many more people have to die before this poison stops 
coming into our communities, before we take the steps, the 
simple steps, to at least understand where the suspicious 
packages are and how to get them offline and not delivered to a 
post office box here in America? How many people have to die 
before this happens?
    Yes, the Postal Service is in desperate need of 
comprehensive reform, and nobody has been more involved with 
that than Senator Carper, but it is shocking that we are still 
so unprepared to police the mail arriving into our country.
    Again, I want to thank Senator Carper and his staff for 
working so closely with us.
    The Chairman of the full Committee has now joined us, 
Senator Johnson. I am going to ask him if he has any brief 
opening remarks.
    And I will turn it over to the Ranking Member, Senator 
Carper.

             OPENING STATEMENT OF SENATOR CARPER\1\

    Senator Carper. Thank you. I thank you, Mr. Chairman. I 
want to thank you for your ongoing leadership on a really tough 
issue and an important challenge facing our Nation, delighted 
to be joined by our full Committee Chairman today too.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Carper appears in the 
Appendix on page 60.
---------------------------------------------------------------------------
    I want to thank our staffs, Democratic and Republican 
staffs. There has been a fair amount of discussion of late 
about how we do not work together on this issue. We work 
together. We are one, and there is no space between us on this 
issue, and frankly, on a lot of others.
    I want to thank our witnesses for joining us today, for the 
work that you do, and for the work that is done by the people 
who are your colleagues.
    This is an oversight hearing, but this is also a result of 
an investigation. A big part of our job on the full Committee 
is to do oversight, and broadly over the Federal Government, 
this is oversight and investigation on something that we all 
care deeply about.
    No State has been immune to the damage that these drugs 
have caused, including my home State of Delaware. I went to 
Ohio State, Navy ROTC midshipman, I used to think Delaware was 
a little town just north of Columbus, but it turned out to be a 
whole State. I have been fortunate to be able to represent them 
for a while.
    But whether it is Delaware, Ohio or the State of Delaware, 
this is an enormous challenge that we face, and it is an all-
hands-on-deck moment, and it requires an all-the-above 
strategy. It is not enough just to deal with the symptoms of 
the problems, and we will be talking a lot about that today--
but also the root cause of these problems. We have to do both.
    According to the Division of Forensic Science in my State, 
more and more Delawareans are dying from opioids every year. In 
2014, we lost 222 people. In 2015, we lost 228 people. In 2016, 
we lost 308 people. They are not just numbers. They are mothers 
and fathers. They are brothers and sisters. They are sons and 
daughters, aunts and uncles, grandparents, all the above.
    Just last month, it was reported that emergency responders 
in our largest county--we only have three, but our largest 
county where my wife and I live, raised our family, in New 
Castle County, were dispatched to a reported drug overdose 
every 80 minutes. By early November of last year, paramedics 
there had administered Naloxone, a drug that can block or 
reverse the effects of an opioid overdose. They had 
administered to nearly 600 patients.
    All told, opioids are now the leading cause of drug 
overdose deaths, killing more than 42,000 people nationwide in 
2016.
    Last year, our Subcommittee set out to learn what the 
Federal Government is doing to stop these drugs from entering 
our country.
    In May, we heard testimony from officials from the Postal 
Service, from Customs and Border Protection, from the State 
Department in addition to several experts and first responders 
on the ground in Ohio, Delaware, and elsewhere who grapple 
every day with the impact opioids are having on our 
communities. They told us how opioids are getting into our 
communities through the mail and how they are working together 
to stop that.
    Unfortunately, I left that hearing very concerned that the 
Federal response was proving to be insufficient. Our 
investigation shows that progress has been made, but also that 
we have much more to do. In fact, our findings are, in a word, 
alarming.
    We found that fentanyl and other even stronger synthetic 
opioids are openly available for sale, as the Chairman has 
said, on the Internet, accessible to anyone who knows how to 
shop online. And once purchased, these drugs arrive primarily 
from China through the international mail system. While sellers 
often prefer the Postal Service, they offer shipment via 
private carriers like DHL, like FedEx, and UPS.
    Through our work, we obtained key payments and shipping 
data that enabled staff to link online sellers to fentanyl-
related deaths and drug-related arrests all over the country. 
We even found what appears to be a major opioid distributor in 
Pennsylvania, where Delawareans reportedly get most of their 
drugs.
    It is CBP's mission in partnership with the Postal Service 
and private shippers to keep these drugs from entering our 
country. That mission has, unfortunately, become increasingly 
more difficult as the number of inbound international packages 
has skyrocketed.
    I would like to say--I think the Chairman mentioned 
``needle in a haystack.'' When you are looking for a needle in 
a haystack, there is a couple of things we can do about it, and 
one is make the needles bigger or make the haystacks smaller. 
And we need to do both of those.
    But for the Postal Service alone, volume has nearly 
doubled, growing from about 150 million pieces in fiscal 2013 
to nearly 500 million pieces in calendar year 2017.
    Until recently, CBP was forced to sift through this massive 
number of packages from the Postal Service manually. Today, 
automation and the use of advanced electronic data has improved 
the targeting of packages that may contain illicit items, but 
the process is far from efficient and effective.
    Our investigation revealed that a 2015 joint Postal 
Service-CBP pilot project at JFK Airport suffered due to the 
agencies' differing missions, a lack of coordination, and 
several interagency conflicts. As a result, the pilot's full 
expansion to our four other international mail processing 
centers was delayed until just this week.
    In addition, despite the massive amounts of drugs coming 
into our country through the mail, the Postal Service and CBP 
only target a small number of packages each day. Meanwhile, as 
our report points out, our efforts to get CBP the data that it 
needs to better target suspicious mail items and intercept 
opioids and other contraband has also not kept pace with the 
volume of drugs that cross our borders.
    Unlike private carriers who control which packages enter 
their networks and have more freedom to turn away problem 
customers, the Postal Service is required to deliver all the 
mail it receives from foreign posts. This is due to our 
country's membership in the Universal Postal Union (UPU), an 
international body that sets global mailing standards and 
ensures that Americans can send mail to friends, to family, and 
to business partners overseas.
    The State Department represents the United States at the 
UPU proceedings, and while the Postal Service has made some 
progress in obtaining better information on packages through 
bilateral agreements with foreign posts, the State Department 
has watched for more than a decade now as some of our foreign 
partners have successfully fought efforts requiring more 
information on international packages.
    Given the stakes, it is urgent that the Postal Service and 
CBP work together to continue ramping up their targeting and 
inspection efforts, and that the Postal Service and the State 
Department speed up international efforts to get CBP the data 
that it needs.
    At the same time, those of us in Congress need to ensure 
that the Postal Service has the resources that it needs to be a 
stronger partner in these efforts.
    As my colleagues are aware, protecting and improving the 
mail system in this country has been one of my biggest 
priorities on this Committee. The Postal Service is vital to 
our economy, and as our work illustrates, it plays an important 
role in our fight against the opioid epidemic as well, yet it 
faces insolvency if the Congress does not pass comprehensive 
postal reform this year. The enactment of this legislation will 
free up billions of dollars that the Postal Service can use to 
not only invest for the future, provide better service, but 
also to shore up mail security.
    All of that said, if we only focus on chasing drug 
shipments after they have entered our mail system, we will only 
address the symptoms of this problem. We also need to focus on 
what I described earlier as the root causes. To truly do that, 
we must address our country's considerable demand for drugs.
    As we know, health care plays a vital role in combatting 
the addiction that drives drug demand, and Medicaid is the 
country's single largest payer for substance abuse disorder 
services. Many States with the highest opioid overdose death 
rates have used Medicaid to expand treatment access. Mine is 
one; Ohio is another.
    We need to focus even more on making sure that our health 
care system has the resources that it needs to provide quality 
treatment to those suffering from this epidemic.
    And as we consider root causes, it is also clear that we 
need to engage with China, the biggest source of illicit 
opioids entering our country, in order to successfully disrupt 
the supply of fentanyl and similar drugs.
    We did something like this during the Obama Administration 
through a high-level dialogue on cybersecurity and hacking, and 
given the success that bilateral partnership had, this 
administration should commit at higher levels to a similar 
effort to tackle this urgent public health crisis.
    With that in mind, I am reaching out to Terry Branstad as 
our Ambassador to China, former Governor from Iowa--we served 
together as Governors--to gauge the level of engagement of our 
embassy and our team in China toward working with the Chinese 
to say, ``Hey, this is a problem. It is not just a problem for 
us, but someday, it is going to be a problem for you. And you 
need to get your act together in order to help us but 
ultimately to help you guys.''
    This reminds me, Mr. Chairman, of the importance of 
leadership in addressing complex challenges, like the ones we 
are discussing today.
    There is no silver bullet that can solve this problem, and 
none of the agencies represented before us can do it alone. We 
need leadership from the top.
    Last March, the President established the commission 
charged with studying the opioid epidemic and determining how 
to fight it, and then in October, he officially declared the 
crisis a public health emergency.
    Despite these high-profile moves, news reports suggest that 
only a few of the commission's 56 recommendations have 
reportedly been implemented. We can do better than that.
    Further, the Office of National Drug Control Policy 
(ONDCP), the entity charged with coordinating the Federal 
Government's counter-drug response still does not have a 
permanent director. I will stay that again: still does not have 
a permanent director.
    Recent media reports indicate that the President's upcoming 
budget will again propose a 95 percent cut in the budget of the 
Office of National Drug Control Policy.
    On a day when we are going to be critical of some front-
line agencies for what appears to be a lack of focus and a 
sense of urgency about a real crisis, I think it is only fair 
to call on the President for what appears to be a failure to 
make that crisis the priority that it should be.
    Let me just close with something we have in Delaware we 
call the three C's: communicate, compromise, collaborate. And 
we have added a fourth C, civility. That is something in short 
supply around here but not on this Committee.
    We need to embrace something like the three C's as we fight 
this epidemic, and one of those is to communicate, and we are 
doing that here today. Another is to collaborate with a little 
bit of civility, and if we do that, we will make some progress, 
and we certainly need to make that progress.
    Again, I will close by saying this is an all-hands-on-deck 
moment. This is an all-of-the-above strategy that is needed, 
and as well as we do our jobs, we always know we can do better. 
Our goal is perfection. We can do better here, and we need to 
in the spirit of cooperation.
    Thank you, Mr. Chairman. Thank you for your leadership.
    Senator Portman. Thank you, Senator, Carper.
    You mentioned the Christie commission, the Presidential 
commission on opioids, and the recommendations, one of the 
recommendations was enactment of the STOP Act that we talked 
about earlier to require this electronic data in advance.
    I have told my colleagues if you have a brief opening 
statement, I am happy to have you be heard now. Thank you for 
being here.
    Mr. Chairman, do you have a statement?

             OPENING STATEMENT OF CHAIRMAN JOHNSON

    Chairman Johnson. Thank you for your leadership on this.
    I think you are aware that my own nephew died of an 
overdose in January 2016. It has probably gotten to the point 
where there are very few Americans that have not been touched 
in a very personal way, pretty close connection with someone 
who has died of some kind of overdose.
    It is a very complex problem. I want to thank you and your 
staff, who have done an excellent job preparing this hearing 
and the briefing.
    I want to thank the witnesses for your service to this 
country.
    It is complex. I think one of the things we do need to do, 
in addition to what you are proposing here, is greater 
information. I have a bill stopping overdoses of fentanyl 
analogs. That is one of the real problems of scheduling these 
minute differences in terms of analog drugs and immediately 
scheduling those.
    There are so many things we need to address here, but it 
starts with identifying a problem, properly defining it, and 
highlighting it in hearings like this.
    So, again, I just want to thank everybody involved in this. 
It is not easy, but these are tragedies, and we all have talked 
to far too many parents, grandparents, brothers and sisters who 
have lost their beautiful sons and daughters, grandsons, 
granddaughters, brothers, and sisters. We have to do everything 
we can.
    Thank you for your leadership.
    Senator Portman. Thank you for your passion and leadership.
    To the panel, thank you very much for being here. We will 
now turn to you. We have some real expertise here and some 
great public servants to talk through this issue and figure out 
how we begin to stop some of this poison coming into our 
communities.
    The first witness is Joseph Murphy. He is the U.S. 
Government lead for International Postal policy issues, heads 
the U.S. delegations to the meetings of the Universal Postal 
Unions, Postal Operations Council (POC) that we have spoken 
about previously. Mr. Murphy previously served for three years 
as the U.S. Permanent Representative in the United Nations 
office in Nairobi.
    Second, Robert Cintron is with us. He was named Vice 
President, Network Operations, in April 2016. In this position, 
he oversees the Postal Service's distribution network, 
including overall network design, policies, and programs for 
processing sites, logistics that are required to move the mail, 
and maintenance policies and programs to support that network. 
Mr. Cintron began his postal career 33 years ago as a clerk in 
Rochester, New York.
    Third, we have Todd Owen, who is the Assistant 
Commissioner, Office of Field Operations (OFO), Customs and 
Border Protection. He was named to that position in 2015. He 
oversees more than 29,000 employees, including more than 24,000 
CBP officers and CBP agriculture specialists. He manages 
operations of CBP's ports of entry (POE) and numerous programs 
that support national security. Mr. Owen began his career with 
the U.S. Customs Service in 1990 as an import specialist in 
Cleveland, Ohio, a great start.
    William Siemer is with us. He currently serves as the 
Acting Deputy Inspector General (IG) for the Postal Service's 
Office of Inspector General (OIG). He joined the Inspector 
General's office in 2003. He previously served in both the 
United States Secret Service and in the Air Force Office of 
Special Investigations as a special agent.
    Daniel Baldwin currently serves as a section chief within 
the Drug Enforcement Administration's Office of Global 
Enforcement. In this role, he supports DEA's global drug 
enforcement efforts in Africa and Asia. Prior to this 
assignment, Mr. Baldwin served as DEA's country attache in 
Beijing, China, so he has good experience in China. In 1991, he 
received his bachelor of science degree in criminal justice 
from the University of Denver.
    Finally, Gregory Nevano is with us. Gregory serves as the 
Deputy Assistant Director for the Illicit Trade, Travel, and 
Finance Division within Homeland Security Investigations (HSI). 
Mr. Nevano has oversight of all financial, narcotics, 
documents, and benefit fraud, criminal gang exploitation, as 
well as several targeting infusion centers. Prior to this 
assignment, Mr. Nevano served as Chief of Staff to the Deputy 
Director of U.S. Immigration and Customs Enforcement (ICE), and 
has served in various key management positions within the 
agency.
    Gentlemen, under the rules of this Committee, we swear in 
all of our witnesses. At this time, I would ask you to please 
stand and raise your right hand.
    Do you swear the testimony you give before this Committee 
will be the truth, the whole truth, and nothing but the truth, 
so help you, God?
    Mr. Murphy. I do.
    Mr. Cintron. I do.
    Mr. Owen. I do.
    Mr. Siemer. I do.
    Mr. Baldwin. I do.
    Mr. Nevano. I do.
    Senator Portman. Let the record reflect that all witnesses 
answered in the affirmative.
    All of your written testimonies, gentlemen, will be placed 
in the record in its entirety, so I would ask you to limit your 
prepared remarks here this morning, your oral testimony, to 5 
minutes.
    And, Mr. Murphy, we will start with you.

 TESTIMONY OF JOSEPH P. MURPHY,\1\ CHIEF, INTERNATIONAL POSTAL 
 AFFAIRS, OFFICE OF SPECIALIZED AND TECHNICAL AGENCIES, BUREAU 
    OF INTERNATIONAL ORGANIZATIONS, U.S. DEPARTMENT OF STATE

    Mr. Murphy. Thank you, Sir. Chairman Portman, Ranking 
Member Carper, Members of the Subcommittee, thank you for the 
invitation to appear before you today to discuss our efforts to 
increase the availability of advanced electronic data for 
international mail items.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Murphy appears in the Appendix on 
page 65.
---------------------------------------------------------------------------
    The Universal Postal Union, is the principal international 
venue where the Department of State discharges its 
responsibilities related to international postal policy. My 
remarks will center on efforts under way within that body to 
expand the exchange of advanced electronic data.
    These efforts have a long history, a key moment of which 
was the decision of the UPU's 2012 Congress to amend the UPU 
convention to require countries and their designated postal 
operators to adopt and implement security strategies that 
include the principle of complying with requirements for 
providing electronic advance data.
    Developing the implementation measures for this amendment 
has been a top priority for U.S. delegations at UPU meetings 
ever since. Our efforts, which include many hours of work by 
colleagues at USPS and the Department of Homeland Security, are 
now bearing fruit, and there has been recent rapid progress on 
this front.
    In February 2016, the UPU's Postal Operations Council 
adopted regulations for the 2012 convention amendment and also 
a roadmap for the implementation of those regulations. The 
United States co-chairs with India the Postal Operations 
Council committee that oversees much of the work required to 
reach the roadmap's milestones. These milestones include final 
adoption of the technical messaging standard for item-level 
data, and the POC met this goal when it approved an item 
attribute message standard at its most recent meeting last 
October. In combination, these two developments--the regulation 
and the standard--enabled UPU member countries to impose 
requirements for AED. UPU members must do so, however, in a 
manner that is consistent with the real-world capability of the 
global postal network.
    Accordingly, the focus is now on building capacity. At the 
global level, this entails building out other elements of the 
UPU's messaging and data flows. This work is progressing well 
but will only have utility if postal operators develop the 
capability to collect the data and to use the tools available 
to them.
    The needed investment in skills and technology is 
happening, and it is being greatly accelerated by a sea change 
in attitudes among the UPU membership, which has come to 
understand that AED and other related data management and 
communications tools are essential to the future of the postal 
sector.
    Consequently, members have endorsed several initiatives 
aimed at positioning postal operators in developing countries 
to exchange AED.
    For example, over half of the UPU's development and 
cooperation budget for the 2017-2020 period is devoted to a 
project that aims to make postal services in developing 
countries operationally ready for e-commerce.
    This project has as one of its key performance indicators 
the goal of supporting 80 postal operators to be exchanging AED 
for some portion of their flow by the end of 2020.
    In addition, the UPU is also implementing a second project 
focused narrowly on security, with an emphasis on capturing and 
transmitting AED. Participants in this project, all developing 
countries, are self-funding with money that was held in trust 
for them by the UPU.
    The Integrated Product Plan (IPP), which the most recent 
UPU Congress adopted in October 2016, with strong U.S. support, 
will also help accelerate AED exchange. The IPP's goal is to 
modernize the UPU's product offerings to better----
    Senator Carper. Can I ask a favor?
    Mr. Murphy. Yes.
    Senator Carper. I am not very good on acronyms. UPS, I am 
pretty good on that. The Federal Bureau of Investigation (FBI), 
I am pretty good on that. Do not use so many acronyms. Actually 
say the words.
    Mr. Murphy. Yes, sir. All right.
    Senator Carper. That would be an admonition for everybody 
else as well, OK?
    Mr. Murphy. The Integrated Product Plan----
    Senator Portman. Within your 5 minutes.
    Mr. Murphy. What?
    Senator Portman. Within your 5 minutes. [Laughter.]
    Universal Postal Union.
    Mr. Murphy. The Integrated Product--can I use UPU?
    Senator Portman. All right.
    Mr. Murphy. OK.
    The Integrated Product Plan's goal is to modernize the 
UPU's product offerings to better meet the changing needs of 
customers and supply chain partners, including customs 
authorities. Phase 1, which commenced on January 1 of this 
year, facilitates the exchange of AED since one of its 
provisions is a requirement for mail items containing goods to 
have a UPU standard bar code label.
    Important work is being done, but there is more to do, as 
Senator Carper mentioned in his opening statement. Although the 
UPU has the stated goal of having all postal services with the 
ability to exchange item-level data by the end of 2020, there 
is a difference between the technical ability to exchange data 
and the realized ability to collect and enter it.
    There are many challenges, but we are optimistic and 
encouraged to see that there is real rapid progress at the 
country and the global levels. Although the work of enabling 
all countries to comprehensively exchange the full range of AED 
is a long-term undertaking, we are confident that by 2020, the 
United States will be receiving AED for most of the mail 
entering the country.
    Thank you, Mr. Chairman. I look forward to answering your 
questions and those of other Members of the Subcommittee.
    Senator Portman. Thank you, Mr. Murphy. Mr. Cintron.

    TESTIMONY OF ROBERT CINTRON,\1\ VICE PRESIDENT, NETWORK 
 OPERATIONS, UNITED STATES POSTAL SERVICE; ACCOMPANIED BY GUY 
 COTTRELL, CHIEF POSTAL INSPECTOR, UNITED STATES POSTAL SERVICE

    Mr. Cintron. OK. Good morning, Chairman Portman, Ranking 
Member Carper, and Members of the Subcommittee. Thank you, 
Chairman Portman, for calling this hearing.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Cintron appears in the Appendix 
on page 69.
---------------------------------------------------------------------------
    My name is Robert Cintron. I am the Vice President, Network 
Operations, for the United States Postal Service. I oversee the 
Postal Service's national distribution network, including its 
operations at the International Service Centers (ISCs).
    Last May, I testified before this Subcommittee on our 
effort to combat opioids in the mail, highlighting the 
collection and receipt of advanced electronic data. Together 
with our Federal agency partners, we are committed to 
aggressively an increasing AED for packages coming into the 
United States in order to improve the targeting of illicit 
drugs and other contraband.
    In the past 3 years, the Postal Service has gone from 
receiving almost no AED on inbound shipments to receiving more 
than 40 percent, as of December 2017. We are now testing data 
that will allow us to target more package volume from China. 
This data will result in a significant increase in the amount 
of AED the Postal Service receives by the end of 2018.
    Since January 2017, the number of countries sending AED to 
the Postal Service has grown from 8 to 23, and includes China 
and other countries of interest. We have prioritized obtaining 
AED from the largest volume foreign postal operators (FPOs), 
which collectively account for over 90 percent of all inbound 
volume.
    We now require AED on packages where rates are established 
under bilaterally negotiated arrangements. We currently have 
bilateral agreements in place with postal operators in 
Australia, Canada, China, Hong Kong, and Korea.
    Additionally, other foreign posts have entered into 
voluntary data sharing agreements (DSAs) to facilitate the 
exchange of AED, bringing the total to 56 countries. While the 
Postal Service and CBP have distinct responsibilities at ISCs, 
these responsibilities complement our shared goal of fighting 
the importation of synthetic opioids.
    In September, the Postal Service and CBP completed a 
memorandum of understanding (MOU) to solidify our interagency 
partnership. Additionally, the program initiated at the New 
York ISC to use inbound AED to facilitate more advance 
targeting by CBP has been expanded to all ISCs.
    Over the last 6 months, the Postal Service has provided 
hundreds of thousands of records per day to CBP and expanded 
the number of countries and types of packages available for 
targeting.
    We have also implemented an automated process to identify 
targeted pieces requested by CBP. Additionally, we provided 
further training to ISC employees to reinforce proper 
processes, for handling and presenting mail in accordance with 
CBP requirements. As the Postal Service continues to advance 
mail-sorting technology, these successes will grow.
    To further improve the Federal Government's coordination of 
oversight over inbound international items, the Postal Service, 
CBP, and the FDA formalized an interagency work group. The 
group is working on efforts to build capacity to provide AED, 
develop detection technology, continue information sharing, 
provide technical assistance for legislation, and improve 
physical and information technology (IT) infrastructure.
    We also continue to work in close collaboration with our 
law enforcement branch, the Inspection Service, which has seen 
significant improvements in its ability to seize fentanyl and 
synthetic opioids.
    From fiscal year (FY) 2016 through fiscal year 2017, the 
Inspection Service achieved a 375 percent increase in 
international parcel seizures and an 880 percent increase in 
domestic parcel seizures related to opioids.
    In conclusion, we share your concerns about illegal drugs 
and contraband entering the country through the mail and 
commercial carriers. The Postal Service is committed to taking 
all practical measures to ensure our Nation's mail security and 
provide the American public the best, most efficient service 
possible.
    Again, thank you for this opportunity to testify, and I 
look forward to your questions.
    Senator Portman. Thank you, Mr. Cintron. Mr. Owen.

TESTIMONY OF TODD C. OWEN,\1\ EXECUTIVE ASSISTANT COMMISSIONER, 
OFFICE OF FIELD OPERATIONS, U.S. CUSTOMS AND BORDER PROTECTION, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Owen. Chairman Portman, Ranking Member Carper, 
distinguished Members of the Subcommittee, thank you for the 
opportunity to appear today to discuss the role of U.S. Customs 
and Border Protection in combatting the flow of dangerous 
illicit drugs into our country.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Owen appears in the Appendix on 
page 75.
---------------------------------------------------------------------------
    As the unified border security agency of the United States, 
CBP plays a critical role in our Nation's efforts to keep 
dangerous drugs from entering our communities. CBP interdicts 
drugs and other dangerous items at our ports of entry, 
including multiple mail and express courier facilities, by 
leveraging advanced electronic data, automated targeting 
systems and intelligent-driven strategies, and by using various 
types of detection technology, all as part of our multilayered 
risk-based approach to enhance the security of our borders.
    Since I last appeared before this full Committee in April 
2016, CBP, working collaboratively with the Postal Service and 
our law enforcement partners, has made strong progress in 
enhancing our enforcement capabilities and our effectiveness in 
the international mail and express courier environments, but 
more must be done.
    Recent bilateral agreements regarding advanced electronic 
data between the U.S. Postal Service and foreign postal 
operators have increased CBP's ability to target high-risk 
shipments.
    In April 2006, CBP was receiving advanced electronic data 
on a limited basis from only eight countries. Today, we are 
receiving advanced electronic data from 23 countries, with 
another six countries in testing. Currently, CBP receives AED 
on over 40 percent of all international mail shipments with 
goods, and work continues internationally to increase the 
volume and the accuracy of the AED provided to the Postal 
Service.
    As the Chairman acknowledged, the CBP has initiated pilot 
programs in the five mail gateways. Through these pilots, CBP 
has enhanced our automated targeting capabilities and has 
worked with the postal service to develop protocols to ensure 
that every shipment selected by CBP for examination is, in 
fact, presented for inspection.
    Last summer, CBP and the Postal Service signed a memorandum 
of understanding aimed at increasing the level of advanced 
electronic data while aligning inspection processes.
    In the past year, CBP has increased our staffing at the six 
main international mail facilities by 20 percent, and all CBP 
narcotic detection canines assigned to the mail facilities, 
express courier operations, and international airports have now 
been trained to detect fentanyl, adding another detection 
capability at our ports of entry.
    Once detected, these substances must be positively 
identified. In the past 18 months, CBP has deployed 
identification testing equipment so that officers can quickly 
determine what the unknown substances are. The average fentanyl 
seizure in the international mail enforcement is only 700 grams 
and arrives as an unknown powder. CBP officers must have the 
technology enabling them to quickly and safety identify these 
unknown substances.
    CBP has increased the availability of such testing 
equipment and is appreciative to Congress for the recently 
passed INTERDICT Act, which will allow us to add testing 
equipment and further strengthen our enforcement efforts.
    In the mail and express courier environments, the fentanyl 
detected primarily arrives from China and is over 90 percent 
pure. CBP has deployed the necessary personal protective 
equipment to safely inspect and process these narcotics.
    We have also deployed Naloxone or Narcan to our ports of 
entry so if our officers or our canines are accidentally 
exposed to these deadly substances, we can quickly administer 
these treatments to save their lives.
    And last, substantive and timely information sharing is 
critical to the targeting and interdicting shipments containing 
illicit drugs. CBP's National Targeting Center (NTC) 
collaborates with critical partners on a daily basis, including 
HSI, the DEA, FBI, members of the intelligence community (IC), 
and the U.S. Postal Inspection Service (USPIS). These 
investigative relationships are critical in delivering 
consequences to those trying to smuggle narcotics across our 
border.
    In closing, we are seeing an increase in interdiction as a 
result of the efforts that I have outlined. In fiscal year 
2015, CBP seized 50 pounds of fentanyl in the international 
mail and express courier environments. In 2016, 81 pounds of 
fentanyl were seized, and in fiscal year 2017, 335 pounds were 
seized. Already this fiscal year at our largest international 
mail facility at JFK Airport, CBP officers have made more 
fentanyl seizures in the first 3\1/2\ months than they have in 
all of last year.
    Despite the success, much more still must be done. We must 
continue to increase the level and accuracy of the advanced 
electronic data being provided. We must further refine our 
targeting capabilities while working with the Postal Service to 
ensure that every parcel selected for examination is presented 
to CBP.
    We must find a technological solution which can quickly 
examine parcels for the presence of contraband without having 
to open the packages, and we must work with our law enforcement 
partners to identify and dismantle those criminal networks 
bringing these illicit narcotics into our communities and 
ensure criminal prosecution.
    Chairman Portman, Ranking Member Carper, distinguished 
Members of the Subcommittee, thank you for the opportunity to 
testify today. I look forward to your questions.
    Senator Portman. Thank you, Mr. Owen. Mr. Siemer.

    TESTIMONY OF WILLIAM SIEMER,\1\ ACTING DEPUTY INSPECTOR 
  GENERAL, OFFICE OF INSPECTOR GENERAL, UNITED STATES POSTAL 
                            SERVICE

    Mr. Siemer. Good morning, Chairman Portman, Ranking Member 
Carper, Chairman Johnson, and Members of the Subcommittee. 
Thank you for inviting me to discuss our work on international 
mail security and keeping illicit drugs out of the mail.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Siemer appears in the Appendix on 
page 84.
---------------------------------------------------------------------------
    As background, our organization has conducted substantial 
audit work on inbound international mail operations and 
security. We have issued eight reports since September 2015 and 
made 21 recommendations to the Postal Service covering areas 
such as enhancing systems and processes, providing better 
employee training and oversight, and improving coordination 
with CBP, other agencies, and foreign posts.
    The Postal Service agreed with 18 of the recommendations 
and has already addressed 12 of them.
    We also have two ongoing projects focused on advanced 
electronic data and opioid safety preparedness at the Postal 
Service.
    In addition to this audit work, we are building our data 
analytics capacity to find and prevent drug trafficking through 
the mail. For years, law enforcement has used data to find 
criminals and expose their networks. Early efforts focused on 
financial crime due to its complexity and large datasets 
available. And just as criminals misused financial institutions 
to commit fraud, today's drug traffickers are misusing the U.S. 
mail to anonymously exchange money and deliver illegal drugs.
    The Postal Service faces a number of challenges that 
private companies do not when dealing with illicit narcotics in 
the mail. For instance, the Postal Service is obligated to 
deliver international parcels, even though it did not 
originally receive them from the customers. The Postal Service 
receives limited electronic data about many of these parcels, 
and the information it does receive is often incomplete or 
inaccurate.
    In addition, the sheer volume of inbound parcels the Postal 
Service handles far exceeds what other shippers manage.
    And finally, unlike private shippers, the law requires the 
Postal Service to obtain a warrant to inspect the contents of 
suspect parcels. The sanctity and privacy of the mail and its 
contents is a strong principle valued by the American public, 
but this principle is being exploited by the criminals.
    As e-commerce continues to expand dramatically, rapid 
growth of both domestic and international mail parcels is also 
occurring. The Postal Service must rely heavily on automation 
and electronic data to deliver more than 5 billion parcels a 
year to 157 million delivery points. That is more than 14 
million parcels a day, and it is easy for illegal drug parcels 
to hide in all of that traffic.
    However, the data that the Postal Service uses to manage 
its network can also be used to sniff out suspicious parcels, 
and that is exactly what we have begun doing.
    This past September, our Acting Inspector General testified 
before the House about some of our work in this area. She 
described a case involving an international parcel containing 
fentanyl seized by CBP in New York. The investigation 
ultimately uncovered a postal employee who was facilitating the 
delivery of illicit narcotics in Florida. Our analytics work on 
the seized fentanyl parcel identified nearly 2,800 additional 
suspicious parcels that were also sent through the mail.
    Since that time, we have assisted other Federal 
investigations involving reshipping schemes and illicit 
international narcotics parcels. We identified a number of 
additional reshippers who were previously unknown to law 
enforcement and who were responsible for thousands of 
suspicious shipments.
    While supporting individual cases is useful, we are also 
dedicating resources to build tools to address narcotics issues 
more broadly. We recently completed the development of a tool 
to identify postal employees who may be stealing drug parcels 
from the mail or facilitating the delivery of drug parcels to 
criminal groups.
    Unlike legitimate customers who will tell us when their 
parcels do not arrive, we have yet to receive our first 
complaint from a drug dealer that their parcel was missing.
    Historically, we have had to rely on tips or cooperating 
defendants to provide us with information about postal 
employees who were assisting drug traffickers. Now we are 
analyzing Postal Service data and looking for various 
indicators to help us focus on carriers or routes where 
suspicious parcels are disappearing. Our initial use of this 
analytics tool has been very encouraging, and it may 
revolutionize the way we tackle these kinds of crimes.
    We are also currently building a tool to identify inbound 
international parcels that are suspicious but have not yet 
arrived in the United States. Our hope is that we can share the 
insights gained from this tool with CBP to better assist 
efforts to identify shipments for inspection and reduce the 
number of narcotics parcels that enter the mail stream. We have 
shared some initial parcel information to test the accuracy of 
our model, and the results appear very promising.
    Combatting the shipment of illegal drugs is not a problem 
any one agency can solve by itself. Cross-agency collaboration 
and data sharing is critical. Ultimately, we need to identify 
and intercept these parcels before they are delivered, rather 
than continuing to focus on investigating after the fact.
    One part of the solution is using data effectively to 
uncover problems, but that is only half the battle. Resources 
to address the problems are also needed. For example, our tool 
to identify collusive employees identified hundreds of 
suspicious postal routes. Our agency is not staffed to address 
all of these investigations immediately, and the challenge is 
only going to get worse as our budget gets smaller.
    This challenge is not unique to our organization, but it 
highlights the need to strategically invest in the tools and 
people to combat this problem, since data alone is not enough. 
Yet, if we are successful, data analytics holds great promise 
to help government and law enforcement focus on the areas of 
greatest impact.
    Thank you for the opportunity to discuss our work, and I am 
happy to answer any questions.
    Senator Portman. Mr. Baldwin.

  TESTIMONY OF DANIEL D. BALDWIN,\1\ SECTION CHIEF, OFFICE OF 
   GLOBAL ENFORCEMENT, DRUG ENFORCEMENT ADMINISTRATION, U.S. 
                     DEPARTMENT OF JUSTICE

    Mr. Baldwin. Good morning, Chairman Johnson, Chairman 
Portman, Ranking Member Carper, and other Members of the 
Subcommittee. My name is Dan Baldwin. I am a special agent with 
the Drug Enforcement Administration, currently assigned to DEA 
headquarters where I provide operational support to offices in 
Asia and Africa. Prior to this, I was the country attache for 
the DEA office in Beijing, China.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Baldwin appears in the Appendix 
on page 90.
---------------------------------------------------------------------------
    It is an honor to be here today to speak with you about 
international cooperation and DEA's enforcement efforts to 
combat the opioid crisis.
    In addition to my written remarks, there are two things I 
would like to touch on this morning, the enormity of the 
problem and what we are doing to address the threat; first, the 
problem. Over the last several years, DEA has encountered a 
dangerous new trend--the convergence of the opioid epidemic and 
the synthetic drug threat from China.
    In 2016 alone, 42,000 Americans lost their lives due to an 
opioid overdose. We all likely know someone who has been 
affected. This is a national threat and public health emergency 
fueled by fentanyl, which is cheap to make, hard to detect, and 
dangerously potent. A kilogram of fentanyl can be purchased for 
less than $5,000, and the potential profits from the sale of 
that kilo can exceed $1.5 million.
    It is often smuggled across the U.S.-Mexican border or sent 
directly to the United States via postal or express mail from 
China. It is found in heroin, counterfeit prescription drugs, 
and other illicit substances.
    Two milligrams of this substance is potentially deadly. 
Oftentimes users do not even know they are taking this lethal 
drug.
    This leads me to my second point--countering the threat. 
DEA's mission is to disrupt and dismantle the highest-priority 
drug-trafficking threats to the United States. For decades, we 
have maintained a worldwide presence to take the fight to the 
source, and in this case, China is the primary source of both 
fentanyl and the precursors used to make it.
    Over the past decade, our relationship with China has 
progressed. As recently as three years ago, many of the 
synthetic drugs we were encountering in the United States were 
not controlled in China, and they had no legal authority to 
assist us in our investigations. However, through continued 
engagement by DEA and the Department of Justice (DOJ), 
highlighting this deficiency, additional legislation was passed 
in 2015, which improved their ability to more effectively 
control newly identified harmful substances.
    China has now controlled 10 fentanyl class substances and 
116 other new psychoactive substances. The U.S. seizure data 
shows us that Chinese control has an immediate effect on the 
availability of these drugs in the United States.
    We are also encouraged by recent discussions with Chinese 
drug control officials and the prospect of scheduling fentanyl 
as a class. This would eliminate the need to control fentanyl-
related substances one by one.
    U.S.-China collaboration on investigations has also seen 
some improvement. Of note, in 2017, the Department of Justice 
indicted two Chinese nationals responsible for manufacturing 
and distributing illicit fentanyl in the United States. These 
individuals have been designated as consolidated priority 
organization targets, which are deemed the most significant 
drug traffickers by the Department of Justice.
    In the United States, the DEA and the U.S. interagency 
utilized coordination and deconfliction center, such as DEA 
Special Operations Division (SOD) and CBP's National Targeting 
Center, to enhance investigations and the sharing of 
information. One outcome of this enhanced collaboration was the 
recent takedown of AlphaBay in 2017, one of the largest known 
dark-net markets facilitating the purchase of illicit fentanyl.
    Going forward, the DEA anticipates the opening of the 
office in Guangzhou, China later this year. This office will 
facilitate greater collaboration with law enforcement 
counterparts along China's Southern Border, where fentanyl and 
other illicit drugs leave China en route to the United States.
    DEA has seen some progress working with our Chinese 
counterparts, and we are hopeful that this relationship will 
continue to improve and develop.
    Here in the United States, the DEA and the law enforcement 
partners represented here at the table will continue our 
collaboration. We are passionate about our cause and driven by 
those families and individuals that have been directly impacted 
by this crisis.
    Thank you for the opportunity to testify before your 
Committee on this important issue, and I look forward to your 
questions.
    Senator Portman. Thank you, Mr. Baldwin. Mr. Nevano.

  TESTIMONY OF GREGORY NEVANO,\1\ DEPUTY ASSISTANT DIRECTOR, 
ILLICIT TRADE, TRAVEL, AND FINANCE DIVISION, HOMELAND SECURITY 
INVESTIGATIONS, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Nevano. Good morning, Chairman Portman, Chairman 
Johnson, Ranking Member Carper, and distinguished Members. 
Thank you for the opportunity to appear before you today to 
discuss the opioid crisis in the United States and the efforts 
of U.S. Immigration and Customs Enforcement Homeland Security 
investigations to disrupt, dismantle, and bring to justice the 
criminal elements responsible for manufacturing, smuggling, and 
the distribution of dangerous opioids.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Nevano appears in the Appendix on 
page 96.
---------------------------------------------------------------------------
    As the largest investigative agency within the U.S. 
Department of Homeland Security, ICE Homeland Security 
Investigations investigates and enforces more than 400 Federal 
criminal statutes. ICE special agents use their authority to 
investigate all types of cross-border activity and work in 
close collaboration with U.S. Customs and Border Protection, 
the Drug Enforcement Administration, and the United States 
Postal Inspection Service in a unified effort with both 
domestic and international law enforcement partners to target 
transnational criminal organizations (TCOs) that are supplying 
dangerous opioids to the United States.
    Today, I would like to highlight our efforts to combat 
international shipments of opioids, specifically fentanyl, 
coming into the United States through international mail 
facilities.
    Based on investigative efforts, United States law 
enforcement has identified China as a primary source of the 
U.S. illicit opioid threat, illicit fentanyl. Fentanyl analogs 
and their immediate precursors are most often produced in 
China. From China, these substances are shipped primarily 
through mail carriers directly to the United States or 
alternatively shipped directly to TCOs in Mexico.
    Once in the Western Hemisphere, fentanyl or its analogs are 
prepared and mixed into the U.S. heroin supply domestically or 
pressed into pill form and then moved to the illicit U.S. 
market where demand for prescription opioids and heroin remains 
at epidemic proportions.
    Mexican transnational criminal organizations also receive 
shipments of fentanyl and its precursors directly from China to 
supply the illicit U.S. market. These sophisticated 
transnational criminal organizations utilize existing smuggling 
routes and the U.S.-based infrastructure to get fentanyl to the 
end users. Though fentanyl seizures made at land border ports 
of entry are higher in number and more voluminous, fentanyl 
seizures from mail facilities are higher in purity levels and 
are often unadulterated. The majority of fentanyl in the 
international mail environment is shipped in purity 
concentrations of over 90 percent, whereas the majority of 
fentanyl in the land border environment is seized in purity 
concentrations of less than 10 percent.
    Purchasers can access open source and dark-net marketplaces 
to easily purchase illicit opioids like fentanyl online and 
have it shipped directly to their homes in the United States, 
no differently than any other e-commerce commodity.
    Trans-national criminal organizations recognize the 
vulnerability of the mail system and exploit the great volumes 
of mail transiting into the United States as a means to further 
their criminal activity. Recognizing the need to proactively 
target online fentanyl trafficking, the ICE Cyber Crime Center 
is identifying ongoing investigations facilitating the 
coordination of online undercover investigations.
    ICE is fully engaged with the DEA Special Operations 
Division, the CBP National Targeting Center, to identify 
shipment routes, to target parcels that may contain illicit 
opioids, precursors, and manufacturing materials, and to fully 
exploit financial and investigative intelligence.
    Our Border Enforcement Security Taskforces (BEST), are 
ICE's primary platform to investigate opioid smuggling. ICE 
currently operates BEST in 57 locations throughout the United 
States.
    In response to the opioid crisis, ICE, with significant 
participation from our colleagues at Customs and Border 
Protection, established a BEST in Memphis, Tennessee, which is 
embedded at an international mail and express consignment 
facility. The Memphis BEST targets opioid shipments on a daily 
basis and engages in control deliveries of seized illicit 
parcels as an effective means to identify end users and 
ultimately disrupt and dismantle regional smugglers. ICE will 
continue to expand the BEST platform to enhance our nationwide 
effort to interdict illicit opioids transiting through the mail 
system.
    ICE has made significant strides in fiscal year 2017 in 
combatting the fentanyl epidemic in the United States, as 
evidenced by a 400 percent increase in fentanyl-related 
seizures. However, even with these advances, there is no single 
solution or government entity that can stop the flow of 
dangerous and illicit opioids like fentanyl into the United 
States or keep them from harming the American public.
    Tackling this complex threat involves a united, 
comprehensive, and aggressive approach across law enforcement 
interagency lines in collaboration with experts in the medical, 
science, and public health communities. ICE will continue to 
work with our Federal, State, and local partners to improve the 
efficiency of information sharing and operational coordination 
to address the challenges and threats posed by illicit 
narcotics smuggling in the international mail environment.
    In closing, I would like to thank you for the opportunity 
to appear before you today, and I look forward to answering 
your questions. Thank you.
    Senator Portman. Thank you, Mr. Nevano, and thank you to 
all the witnesses.
    We are going to have lots of questions for you. We have a 
number of Senators who are here who are not going to be able to 
stay for the entire time. I will be here for the entire time, 
so I am going to be very brief and then turn it over to them 
and have an opportunity to ask more of my questions later.
    But let me just say, to summarize what you are saying, Mr. 
Nevano talked about the need for this to be an aggressive 
approach, and I must say I have not seen the urgency over the 
past many years. We have talked about the State Department for 
10 years now, we have been talking about this with our 
international partners, and we have evidence that we were able 
to uncover in our investigation that it is still not going at 
the rate we would like. We can talk about that later. I will 
read you some of the emails talking about how we slowed to a 
crawl in our efforts, as an example.
    We know that there are over 300 million packages coming 
here without any data, and Mr. Owen has just told us he needs 
that data to be able to identify those packages. That was his 
number one thing he is looking to do to be able to stop it.
    My questions will be along those lines, just to give you 
the opportunity to think about it, and with that, I will turn 
it over to the Ranking Member, and we will give everybody an 
opportunity to ask questions. We will have as many rounds as we 
need to be able to get all the information out today.
    Thank you.
    Senator Carper. Thanks. Thanks, Mr. Chairman.
    Let me ask. Anybody here that has some urgency to be in two 
places at once, you would like to go ahead? No?
    Senator Lankford. I will at 11:15.
    Senator Carper. Go ahead.
    Senator Lankford. It is all right with the Chair? Thank 
you.
    Senator Portman. Senator Lankford, who was here first.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Gentlemen, I appreciate it very much, 
being here and for your testimony. Let me run through a couple 
different questions to be able to get some clarity on this.
    Mr. Murphy, you had mentioned by the end of 2020, the 
advanced electronic data, we should be capable of gathering 
that, but then you hesitated and said just because we are 
capable does not mean we are actually doing it, so help me 
understand the next level of that. When are we--not just 
capable by the end of 2020, when are we actually gathering that 
data?
    Mr. Murphy. Thank you, Senator. That is correct. What is 
happening in the UPU context is the tools are being put into 
place, and capacity is being built so that countries have the 
ability, if they have the data, to send and receive it.
    But the bottleneck is at the country level, is in 
collecting the data and entering it, and----
    Senator Lankford. What is the timeframe for that?
    Mr. Murphy. Well, that is yet to be determined.
    Senator Lankford. Is that 2025? Is that 2030? Help me 
understand that.
    Mr. Murphy. Well, countries are going to begin deploying 
requirements for AED, as they are now entitled to do. Those 
requirements need to be calibrated to the capabilities of the 
sending countries, but it is going to be a driver of further 
deployment. So there is not at this point a firm deadline by 
which every country must be able to send AED for all----
    Senator Lankford. The deadline is the capability by 2020 
but no deadline for when they actually have to do it?
    Mr. Murphy. There is no deadline established at this time, 
Senator.
    Senator Lankford. How do we get that?
    Mr. Murphy. I think we need to be guided by our own 
information needs as we assess what it is we want to ask for 
and then tailor our requests around the capabilities of 
partners to ensure that we get Customs and Border Protection 
the information they are looking for in a timely way.
    Senator Lankford. Thank you.
    Mr. Baldwin and Mr. Nevano, this is a question for either 
of you. I am trying to work through the process of not just 
picking up not only the seller, which is exceptionally 
important to this, but also the buyer that this is headed 
toward. How do you start to be able to break out and say this 
is a very small amount of fentanyl, looks like a user, versus 
this is a larger amount and we need to track not only who the 
seller is but also who the buyer is because this could also be 
a street distributor as well? How do you balance that out, and 
how do you mean to work through the process of not only the 
interdiction but then the enforcement aspect?
    Mr. Baldwin. Senator, thank you for your question.
    In regards to identifying the different players in this 
process, we have our offices overseas that are working directly 
within the supply chain as far as the supply from China. We 
work here in the United States, and we have our agents 
identifying leads, either from CBP or Postal or from our own 
investigations. We then are providing those back to China. So 
we are identifying the entire chain.
    Of course, the goal is to identify the largest-level 
suppliers, the suppliers from China, so that if we have an 
individual who is sending multiple thousands of packages, that 
makes the work down at the end of the table much easier by 
eliminating the one shipment.
    Senator Lankford. It would seem like you would have--if 
they have ordering it online, you have got an Internet Protocol 
(IP) address. You probably have a city location or a region 
that this package is actually coming from when it was dropped 
off. There seems like there would be multiple markers--the 
financial transaction that occurs when the exchange happens. It 
seems like you would be able to narrow the focus somewhat of 
where it is coming from, but certainly you have the address of 
the person that is purchasing it here because that is where it 
is being delivered to.
    Mr. Nevano. Senator, you hit on how I was going to respond.
    Relationships with financial institutions is key in being 
able to track the financial transactions, both on the receiving 
and the sending end. We have established relationships with 
financial institutions that allow us to track the flow of the 
funds going from the purchaser to the person on the other end 
who is actually selling the illicit opioids, so that is key in 
our investigations.
    Senator Lankford. Do we have any incentives for other 
nations to be able to cooperate with us when we are trying to 
interdict this? I mean, it is millions and millions of dollars, 
obviously, that are in the transaction at times, and certainly 
for the larger dealers. Is there any incentive for those other 
nations to cooperate with us to be able to share that 
information?
    Mr. Nevano. I would defer partly to that to DEA, but from 
the HSI perspective, Senator, we have tried to establish 
relationships in foreign countries with intelligence sharing 
and working with our law enforcement partners to establish 
mutual relationships to show the benefit of how establishing 
these relationships can interdict a package before it comes 
into the United States, and that is ultimately what our goal 
is. If we can push the borders further out to not have the 
package come into the United States, that would be our goal.
    Mr. Baldwin. And just to follow up, Senator, to add some 
more to that answer, at least China has an interest in working 
with us to try to address some of the stuff coming out of 
China. There is a potential that these drugs certainly could be 
used by their own people.
    Senator Lankford. Right.
    Mr. Baldwin. They are not necessarily seeing that right 
now, but they certainly are recognizing the potential of that.
    We have certain mechanisms within DEA and with the 
Department of Justice where we are engaging them on a regular 
basis to assist us in getting them to help us with this 
problem. Those are things we work on, on a daily basis and 
annually. We have meetings to try to push our asks to the 
Chinese in order to get them to come to the table to do more in 
regards to addressing this, these substances coming out of 
China.
    Senator Lankford. Can I switch countries for your real 
quick? Mexico, you have mentioned a couple of times as well 
that the precursors are actually coming to Mexico, but we also 
have Mexican production facilities now to where they are 
shortcutting China, instead of having it delivered from China, 
getting it straight to Mexico. What is the cooperation like 
with Mexico right now for that as well?
    Mr. Baldwin. Senator, in regards to DEA's cooperation with 
Mexico, it is good.
    Within Mexico, we have seen this substance move into Mexico 
where it is being produced, but as it was said in the opening 
statements, the percentage and the purity of the substance 
coming over the border, on the Southern Border, is a lot less 
than it is coming through the mail service.
    We are also looking to try to bring both Mexico and China 
together to collaborate on this issue, to be able to deal with 
those substances, as you said, the precursors that are going to 
Mexico that are then coming into the United States. That is one 
of the things we are working on, but we do have a decent 
relationship with our folks in Mexico as well to be able to 
deal with this problem.
    Obviously, we want to make sure that they are working with 
China to make sure that they address the threat that they have 
in their country as well.
    Senator Lankford. Thank you.
    Can I make one quick comment as well, Mr. Chairman, to be 
able to say this, not only thank you for allowing me to be able 
to go quickly on this to be able to get to the next meeting, 
but I also want to be able to highlight the Inspector General 
for the Postal Service, not only for the work that they have 
done and the reports that they have done. But many people may 
not know, Senator Heitkamp and I have worked on this for quite 
a while.
    The Postal Service Inspector General has worked with all 
Inspectors General to be able to pull together a website called 
Oversight.gov that is getting all the IG reports out for every 
single group, and though they are not named on that, their team 
was a major player on getting those reports out. And that is 
exceptionally helpful to all of us.
    So, just publicly, we come at you with questions a lot, but 
let me also say thank you for that. Now, that is not related to 
this hearing, but it is valuable to all of us, so thank you.
    Senator Portman. Thank you.
    Senator Carper. Senator Lankford, you remind me of a point. 
I made it earlier. Senator Heitkamp and I had a side-bar 
conversation just a moment ago about this.
    The Postal Service is not running out of money. They are 
out of money. They are heading for essentially what we call 
bankruptcy, and we have an obligation in this Committee and 
this Congress to enable them to be successful and not only 
provide legitimate service that is needed, but to better ensure 
that the delivery of fentanyl and these kind of narcotic drugs 
is diminished and hopefully eliminated. So it is just a timely 
reminder on another front.
    What I would like to do, I want to ask each of you, one by 
one. I will start with you, Mr. Murphy. One thing that we can 
do to help you and your folks do a better job, one thing we can 
do?
    Mr. Murphy. Senator, at the----
    Senator Carper. It might be something we are doing, maybe 
something we need to do better. My dad used to say to my sister 
and I when we had chores to do, growing up in West Virginia, he 
would say, ``A job worth doing is worth doing well,'' and out 
of that, I took the idea that everything I do, I can do better. 
What can we do to enable you and your folks to do a better job?
    Mr. Murphy. Senator, the attention that the issue has 
gotten domestically is something that is noticed 
internationally, and the higher profile of this issue is useful 
bureaucratically, certainly. And so I personally in my work 
appreciate the attention that the issue has received, so thank 
you.
    Senator Carper. Mr. Cintron.
    Mr. Cintron. Senator Carper, what we would be looking for 
is comprehensive postal reform. If we could get help there, 
that would be tremendous.
    Senator Carper. All right. Thank you.
    Mr. Owen. And, sir, again, with the exponential growth in 
e-commerce through the mail facilities, express courier 
facilities, additional staffing in these regards would help us, 
as well as the continued support of the analytical work that we 
are doing at the national targeting center, as well as our 
laboratory and scientific services folks.
    Senator Carper. All right. Thank you. Mr. Siemer.
    Mr. Siemer. Postal Governors. I think we have talked about 
how this is a strategic problem and it is something that 
requires a sense of urgency. I think having Governors on board 
for the Postal Service would bring both of those in addition to 
all of the leadership they are already receiving in the Postal 
Service.
    Senator Carper. A timely point that you raise, there are no 
current Governors on the Postal Board of Governors, other than 
the Postmaster General and the Deputy Postmaster General.
    It is the second largest corporation. Imagine the second 
largest corporation in this country operating without a board 
of directors. That is essentially where we are, and it is just 
unconscionable.
    We have three nominees from the administration. We need 
another one. I am going to be meeting today with someone 
originally nominated by President Obama, who I think would be a 
very good candidate. If he is nominated, that will give us two 
Democrats and two Republicans, and at least he would have a 
quorum to go forward with. That is a wonderful point and a 
timely point. Thank you.
    All right. Mr. Baldwin.
    Mr. Baldwin. Yes, Senator. DEA is always appreciative of 
any additional tools and authorities that are granted to us to 
address the opioid epidemic.
    Senator Carper. Can you be more specific?
    Mr. Baldwin. Specifically, well, our priorities are 
outlined in our 2018 budget proposal, the administration's 
budget proposal. So, as those are prioritized by people that 
are much smarter than me at DEA headquarters, that is what I 
would ask. We would prioritize those particular budget 
proposals.
    But in regards to the specific threat, we have a number of 
things in regards to scheduling, scheduling actions, schedule 
controls, those types of things that we would look at to be 
able to better address this threat as we see it.
    Senator Carper. All right. Thanks.
    Mr. Baldwin. Thank you.
    Senator Carper. Mr. Nevano?
    Mr. Nevano. Senator, I want to thank you for the resources 
that Congress gives us both in budget as well as personnel, but 
with more, we can do more. So my answer would be resources. The 
more resources, the more special agents we have, the more 
staffing we have would allow us to do our job more effectively.
    Senator Carper. Thank you.
    Several of you mentioned China. I think almost every one of 
you have mentioned China. About two or three years ago, the 
president of China was coming to the United States. He was 
going to meet with President Obama. I think they met in 
Washington State, and one of the things that was raised by 
President Obama, an issue we had raised with China a number of 
times before, and that was our unhappiness--actually anger with 
their allowing folks within China to launch these hacks and to 
come after our intellectual property rights (IPR) and money and 
a number of other things of value.
    Every time we raised this with China, they would say nobody 
was responsible for it or was actually doing this, it is not 
the military, it is not the Chinese military. it is not part of 
our government, it is just happening, and different people are 
doing this stuff.
    We did not believe them, and when President Obama met with 
President Xi about two or three years ago in Washington State, 
he raised this issue with President Xi. President Xi said, 
``No, it is not us. It is rogue elements within our country 
that are doing this.'' President Obama said, ``This is who is 
doing it. This is where they are located it. These are their 
people, and if you do not do something about it, you are going 
to find it much more difficult to sell your goods and products 
and services in this country.'' President Xi acknowledged that 
they could help, and they have. They have not stopped all the 
hacks from China, but it has slowed them down a whole lot.
    We had a similar experience with Iran. Iran for years and 
years was trying to shut down our banks. Get on their websites; 
shut them down. And literally, a week after we entered into the 
comprehensive agreement with Iran on not developing a nuclear 
weapon, guess what stopped? The attacks on our banks.
    When we think about root causes, it is not just working on 
the insatiable appetite we have for illegal drugs, like these 
opioids, but others as well.
    Let us focus on China. I said earlier I am going to reach 
out to Terry Branstad, now Ambassador to China, next week. I am 
hoping some of my colleagues can join us--to ask what they are 
doing at our embassy, what are you doing and what do we need to 
do to help address the root cause from your end, from where you 
are located.
    Mr. Baldwin, why is it important that we engage with China? 
Please give us an update on cooperative efforts with your 
counterparts in China to help identify the sources of fentanyl 
and other synthetic opioids.
    Mr. Baldwin. Senator, thank you for the question.
    Put quite simply, the reason we have to engage with China 
is because as anybody who has changed oil in their car, we know 
the big side of the funnel and the small side of the funnel. 
China is the small side of the funnel, meaning that is the 
place where things are originating. We need to get the packages 
before they get to the United States and branch out to a 
thousand different locations within the United States.
    We can try to track every package. We can try to address 
every threat, every trafficker within the United States, but if 
we can get to the small end of the funnel, attack some of those 
distributors within China that are sending tens of thousands of 
packages to the United States, we would have a greater impact. 
The importance of working with China is just that. We have the 
ability to do that with them, along with them, and that is fed 
by information from CBP, Postal, our partners at HSI. We 
identify packages here. We identify the shipping origin and 
take the head off the snakes.
    Senator Carper. All right. Thanks for that response, and 
when we have a second round, I am going to come back and 
revisit this with others of you on the panel. Thanks so much.
    Thanks, Mr. Chairman.
    Senator Portman. Chairman Johnson.
    Chairman Johnson. Thank you, Mr. Chairman.
    This is really for Mr. Baldwin or Mr. Nevano. I read an 
article. I do not think it has been covered in the hearing. It 
said that about $800 worth of precursor ingredients for 
fentanyl produces about $800,000 worth of street-value drug. Is 
that even close to true?
    Mr. Nevano. Senator, I would say that that is an accurate 
assessment. We know that the profit margin in fentanyl is much 
higher than, let us say, heroin, so your statement is accurate.
    Chairman Johnson. So, obviously, where there is a demand, 
it is going to be supplied with that kind of profit potential.
    I want to talk a little bit about the difference between--
and I am not going to hold you to these figures at all, but can 
you give us some sort of sense? What percent of the fentanyl is 
coming in through Mexico, having been transshipped, and how 
much is coming in through directly through our postal system?
    I will talk about the purity differences later, but just 
give us a sense.
    Mr. Nevano. I am not sure if my colleague at CBP might be 
able to answer that better, Senator.
    Chairman Johnson. Again, whoever can best answer these 
questions, hop right in.
    Mr. Owen. Just based on our interdictions, just based on 
the seizures, we are seeing more larger seizures, of course, 
through the Southwest Border. Again, the purity, 90 percent 
pure, very small. The average shipment through the mail is only 
700 grams.
    When we just look at our data for 2017, 854 pounds of 
fentanyl was seized in the land border; 335 pounds were seized 
in the express and mail environment. So much higher quantities 
but much lower purity.
    Chairman Johnson. Why the difference in the purity? Are 
they cutting it in Mexico to actually be used immediately, or 
is it just the practicality of you want to ship smaller 
quantities?
    Mr. Owen. The seizures that we see, the fentanyl is mixed 
in with other narcotics, other hard narcotics, whereas in the 
mail environment, express environment, it is all just a single 
shipment of the fentanyl, that pure by itself.
    Chairman Johnson. So the stuff coming directly through the 
postal system, is that getting sent to other labs to be 
processed, cut further, so that you take that 100 percent 
purity fentanyl?
    Generally, when somebody is abusing fentanyl, what percent 
purity is in that tablet?
    Mr. Baldwin. Senator, I think you have hit on something 
that is crucially important. I think we have two really threat 
areas. We have the Southern Border threat, where precursors for 
making fentanyl are found in Mexico, and they are producing 
fentanyl there. It then is adulterated into other illegal drugs 
that are being pushed across the border.
    We then have the mail stream, as you said, that has a 
higher purity. Those then are being used at times within the 
United States in what we call ``pill mill operations,'' where 
that fentanyl is pushed into a pill. It is a counterfeit pill. 
I mentioned counterfeit pills in my opening remarks. They look 
much like those same similar pills that drove the opioid crisis 
to begin with. The dosage amount in those pills is 1 milligram. 
So 1 milligram of fentanyl, if it is about 98 percent pure--1 
milligram is one-thousandths of a gram. There is a thousand 
grams in a kilo. That means there is a million milligrams in a 
kilo. So that is how many pills could be made. That is in the 
pill mill operation process.
    Chairman Johnson. In the brief material, it almost sounded 
like there are just users directly buying that. Is that also 
the case, or is it almost 100 percent of the case where these 
things are really being shipped to some kind of pill mill?
    Mr. Nevano. Senator, it is like any other e-commerce 
commodity right now. End users can actually sit in their living 
room and order these illicit opioids online for their----
    Chairman Johnson. With 90 percent purity?
    Mr. Nevano. Yes.
    Chairman Johnson. Will they be getting 90 percent purity?
    Mr. Nevano. That is accurate, Senator.
    Chairman Johnson. Is that why they are dying so quick?
    Mr. Nevano. That would be accurate, Senator.
    Chairman Johnson. Picking up on what Senator Carper was 
talking about, specifically what would you like to see China 
do? I mean specifically. Are they not investigating this? Are 
they turning a blind eye? I mean, specifically what would you 
like them to do?
    Mr. Baldwin. Well, thank you for the question. Working in 
China, of course, has its challenges. There are things that 
China has done. Back in 2015, as I mentioned, they changed 
their law to where they were able to adapt to a threat in a 
third country.
    In the United States, if we have an abuse of a certain 
substance that is not controlled in China, their law is now 
adapted to where we can take that abuse data and provide it to 
China where they then can change their law.
    DEA has a mechanism that is set up within our chemical 
evaluation section within DEA headquarters where we are 
evaluating different substances, the harm and the effect that 
it is having on the American people, and we are providing that 
information directly back to China for their action.
    So when you ask what I want China to do, I would like them 
to continue down that road. They have taken it seriously--they 
have controlled a number of different fentanyls. We have 
prioritized fentanyl information, provided it to the Chinese, 
and they have actually controlled our top four asks. We want 
that dialogue to continue. We are hopeful it does. We want it 
to get better and better. We want our experts to meet on a 
regular basis and exchange this important information.
    Again, this is something that we can do to directly address 
those threats that are here in the United States with China.
    Chairman Johnson. So it was not a glaring omission. It is 
just a matter they are doing good things; they just need to do 
more of it. Is that----
    Mr. Baldwin. Absolutely. I think that is one aspect of what 
they can do. It is one piece of the puzzle. Again, there is 
multiple problems here. There is multiple facets to this 
problem.
    Chairman Johnson. One of the problems really is that the 
analogs and our inability in our law, probably China's law as 
well, is keeping up with the minute change in the chemistry of 
these things.
    That is why we introduced the Stopping Overdoses of 
Fentanyl Analogues (SOFA) Act. I know DEA has also tried to do 
that through its regulatory powers, but they are a little 
concerned they may be butting up against their own legal 
requirements. Can you talk about the need to actually codify 
that?
    Mr. Baldwin. Senator, thank you for that question.
    I am not familiar with all the details within the SOFA Act. 
I am aware of it.
    If we have another tool that is provided to DEA for us to 
deal with this problem and that is the act that gives us that 
too, we are happy----
    Chairman Johnson. You are constrained right now in terms of 
rapidly scheduling one of these analogs, correct?
    Mr. Baldwin. We have existing authorities to move forward 
and schedule substances. That is not something I am intimately 
familiar with. I am within the operations division. We have 
people like I said, the planning and evaluation folks, the 
people that are in the chemical section, that do this on a 
daily basis.
    However, if we have tools that are offered to us in 
whatever bill, we are happy to work with you to try to assist 
you in moving that bill forward.
    Chairman Johnson. Just real quick, because I was very 
pleased to hear that you have actually trained dogs in 
fentanyl, I thought if you did that, they would die. So that is 
very good news.
    How many more canine units do you need? I would ask you 
just in general. I think we are all very supportive of it on 
this Committee, but for this particular task, how many canine 
units could you use?
    Mr. Owen. We can always increase the resources at these 
facilities. I think it is important when Congress has supported 
us before with canines that it also needs to come with the 
handler.
    Chairman Johnson. Right.
    Mr. Owen. A lot of times, the canine comes by itself.
    Chairman Johnson. I was going to say a unit.
    Mr. Owen. A unit. Any support we can get on that would be 
helpful.
    We currently have just under 500 dogs working at our ports 
of entry. So any enhancement to that would increase our 
detection capabilities.
    Chairman Johnson. But again, they are detecting all kinds 
of things. Are they primarily drugs, and is it a specific dog 
for a specific drug?
    Mr. Owen. Our dogs are generally two caliber, two types of 
dogs. We have the narcotics detector dogs that will interdict 
six types of narcotics, and then we have dogs that detect 
currency and firearms for our outbound threat. The dogs are 
split between those two.
    Chairman Johnson. So you have been able to add fentanyl to 
that six?
    Mr. Owen. We have added--yes.
    Chairman Johnson. OK.
    Mr. Owen. Fentanyl is----
    Chairman Johnson. That is impressive. Again, thanks for 
your service.
    Mr. Owen. Thank you.
    Senator Portman. Thank you.
    Let me just quickly follow-up on China, DEA and Justice 
recently indicted two Chinese nationals, as was widely 
publicized, and they indicted them because they were using the 
mail to ship large amounts of fentanyl to the United States. 
The question is, What can China do?
    It is fine to schedule these precursors, the things that go 
into making fentanyl. It is fine to schedule the analogs. This 
is a good idea, but it is about actually taking action and 
prosecutions.
    So let me ask you, Mr. Baldwin, about those two individuals 
who were indicted. The Justice Department and DEA were 
involved. Have they been prosecuted?
    Mr. Baldwin. Thank you for the question.
    The current status, I am not absolutely certain where they 
are within the system within China.
    I do know this. I do know that the traffickers and the 
shippers of these substances from China are very creative. So 
if they have the ability--and you probably learned this with 
your own inside investigation--that if something is controlled 
in China, they usually divert to another substance that is not 
controlled and----
    Senator Portman. Let me just back up for a second. I 
understand the challenges----
    Mr. Baldwin. Yes.
    Senator Portman [continuing]. And we have talked a lot 
about that. There is also a transshipment challenge and so on, 
but I asked you a specific question: Have those individuals 
been arrested? Have they been prosecuted?
    Mr. Baldwin. I am----
    Senator Portman. The answer is no, unless you are going to 
correct me.
    Mr. Baldwin. No, they are currently not in custody.
    Senator Portman. OK. Well, that is the answer. The answer 
is no.
    Mr. Baldwin. Yes.
    Senator Portman. So to the Chairman's good question about 
what could the Chinese do, how about prosecuting these two 
individuals who you all have indicted? I mean, two individuals 
out of the thousands of labs in China that are sending this 
poison into our communities, that would be a good step.
    Senator Carper. If I could just have a moment. To follow 
up, the Chinese have to feel like they have a dog in this 
fight, and there are some in China who frankly would like to 
see us further weakened as a Nation. And our continued use, 
abuse, overuse of these harmful narcotics weakens us. There is 
enormous amounts of money to be made, and we are talking about 
money that is going to flow from this country to their country.
    Somehow they have to be made to believe or understand that 
they have a dog in this fight. Partially, it is to say the 
customers for these drugs may be your people, not just ours.
    But also, when the President of the United States meets 
with the leader of China, it is important that this be at or 
near the top of the issues that are raised.
    Senator Portman. Senator Heitkamp.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thank you, Mr. Chairman.
    I think this is the third or fourth time we have been in 
this room talking about this, and I have to tell you this 
investigation reminds us that we are not doing everything and 
with a sense of urgency that we need to do. I recognize you are 
all working really hard on this, that you all want to see 
success, but we have to be more urgent about this.
    We can build a $20-billion wall, but if we do not solve 
this problem, we will not have solved the problem of 
interdicting drugs. If we simply focus on China, we will not 
solve the problem of interdicting these drugs. If we simply 
focus on Mexico--fentanyl in my State that killed kids, that 
led to a huge investigation. One of the first came from China 
to Canada to Portland, Oregon, to North Dakota.
    Last time we were here, we talked about treaties. We talked 
about the need to work government to government with 
authorities like Mr. Owen's to try and see are the treaties 
stopping us from doing what we need to do. Are we on the right 
path?
    I want to expand this discussion because it is not just 
about drug interdiction, and, Mr. Owen, you have made such a 
great point about e-commerce. As e-commerce grows, this problem 
will get worse and worse, and it will not just be about illegal 
drugs. It is going to be about counterfeit goods. It is going 
to be about avoiding goods that may, in fact, injure from a 
consumer protection standpoint, whether it is lead paint and 
toys. Whatever it is, we need to have our laws enforced that 
protect the public safety.
    We are failing, and we are failing because we have 
understaffed and under-resourced the post office. I think it is 
pretty clear. We are failing because we have not worked in a 
government-to-government way to really close the loopholes, and 
this is not just about drugs. It is about all of e-commerce.
    As the States--and I think that the court probably will 
give the States the ability to collect sales tax. The States 
are going to have some skin in the game because it may drive 
some offshoring of e-commerce to avoid sales tax 
responsibilities in States, and so those of us who live on the 
border understand the complexities of working to make sure that 
we are not shutting down commerce, but that we are in fact 
protecting public health and safety.
    Now, Mr. Baldwin, one of the questions that I have, you 
have described the funnel, right? We want to get to that point, 
a lot of talk about China. How easy is it if we got 100 percent 
complete cooperation from China, we got extradition or we got 
prosecutions, whatever it might be, for that to be offshore and 
move someplace else? Given the high profit margin that Mr. 
Nevano described and Chairman Johnson described, how difficult 
is it? My point in asking that is if we simply say we are going 
to focus all of our attention on that one point of development 
before it expands up to the points of entry into this country, 
how difficult is it to move that around the world? Mr. Baldwin.
    Mr. Baldwin. Senator, thank you for your question, and the 
answer to that is it is very easy to do. There are multiple 
countries, I think, that stand and they are ready to try to 
take up where China would leave off.
    Senator Heitkamp. Why not? I mean, if we are looking at 
that kind of profit margin.
    I think it is really important that we not spend all of our 
time here simply focused on China. We have to understand that 
because of what Chairman Johnson and at the time Chairman 
Carper continue to talk about the insatiable appetite for these 
kinds of drugs, we have to understand that while we are trying 
to deal with demand, we cannot let supply come in in the amount 
that it is because it has driven the street price down, and it 
has created an opportunity for transition from prescription 
drugs to illegal street drugs.
    I am glad you brought it up. We have seized these fake oxys 
that are fentanyl, and the people who are doing it do not have 
PhDs in chemistry, and they are putting amounts in there that 
is lethal, never mind the destruction that it does to the 
social safety net of this country. It is killing people.
    My request would be what are the strategies not just 
dealing with China, but what are the strategies to deal with 
these precursor problems, to deal with all of this, and how, 
Mr. Owen, do we need to do a better job to give you the tools 
to interdict at the points of entry?
    I just want to make one point about how pervasive this can 
be. When I was Attorney General, I ran the drug task forces. We 
knew we had a huge meth problem, a lot of attention paid to 
labs--90 to 95 percent of all the meth that was consumed in 
North Dakota came in through Mexico. It was not homegrown.
    We got a tip that there was a package with meth. We lined 
it up, brought in the dogs. We had probably 10 packages. They 
hit on three. That is what we know. We know that we are just 
getting inundated, and so what can we do, working within our 
international cooperation, renegotiate the postal agreements 
that we have to avoid--that limit you from doing what you need 
to do, Mr. Owen, in terms of interdiction?
    Mr. Owen. Well, again, having the advanced data so we can 
target not only from China, but as you mentioned, as the 
threats shift, as they try to transship.
    And you are absolutely right. In the e-commerce, CBP is 
looking at this space as an all-threats environment. We do have 
the narcotics interdictions, but we have trade compliance 
issue. We have public health and safety.
    The e-commerce growth, 1.4 million parcels a day cross our 
borders right now, and it is only going to continue to 
increase.
    Senator Heitkamp. The reason why I ask this is because the 
last time we were here, we heard over and over again from the 
Postal Service that their treaties or their relationships, 
international contracts--I think they are probably treaties. 
The treaties that they have with Canada, with other 
international groups, limit their ability to do interdiction. 
Is that still true?
    [No response.]
    Because we have been at this a long time, we were told we 
cannot use dogs by DEA last time because the fentanyl kills 
them. Now we are hearing you are using dogs.
    We were told last time that the postal agreements 
internationally limit our ability to do work. Now no one can 
answer that question. We have to get an urgency to this, and we 
have to deal with it not just about illegal drugs, but 
everything else that we expect to protect our borders.
    And so I want to thank you all. This is not the end of 
this. I want to thank the Chairman for the excellent work that 
was done here. I think that we did not reveal anything in this 
report that we did not know, and I want to point out that the 
two Chinese individuals who were indicted were indicted in 
North Dakota.
    Senator Portman. We will hear later, more from Mr. Murphy, 
about the issue of the international treaties, as you rightly 
called them, and what the Universal Postal Union challenges 
are.
    But you are right. I do not think we have had the urgency, 
and we have spent 10 years going back and forth on this, and 
what we have to show for it is a bar code. That is fine. It is 
a sticker, but there is no information on the bar code for most 
countries, for most packages. We do have to accelerate this.
    As was said, this is an urgent problem, and we need to be 
more aggressive.
    Senator Heitkamp. Mr. Chairman, the point that I want to 
make about e-commerce is that this is not just limited, and if 
we just simply focus on drug interdiction and on China, which 
is our immediate problem, we will miss the opportunity to fix 
the broader problem or at least provide a broader sweep in 
terms of what we need on all of e-commerce, whether it is 
counterfeit goods, whether it is things that violate public 
health and safety, whether it is, in fact, things that are 
happening to do tax evasion.
    Senator Portman. Senator Klobuchar.

             OPENING STATEMENT OF SENATOR KLOBUCHAR

    Senator Klobuchar. Thank you very much, and thank you, Mr. 
Chairman and Senator Carper, for inviting me to join today. I 
think this report is incredibly important and shed some light 
on just what is going on here.
    I personally think, well, maybe some of this information 
has been out here. It is pretty stunning.
    And I also want to thank the Chairman. He and I are leading 
the bill to do something about this, the STOP Act, which would 
require shipments from foreign countries through our postal 
system to provide advanced electronic data before these 
shipments enter the United States.
    I got interested in this because, like so many other 
Senators, I saw what was happening in Minnesota--637 deaths 
from opioids and other drug overdoses in 2016. That is more 
than the number of car crashes and homicides combined in my 
State. Almost 100 of these deaths, 96 of them involve 
synthetics, a nearly 80 percent increase from the previous 
year, and 85 involved fentanyl.
    And one of them was Prince. But it is not just celebrities 
that die from fentanyl. It is a lot of little kids in our State 
as well--high school kids, college kids, and we have to do 
something about this.
    So I guess I will start with you, Mr. Owen. As you know, 
this bill would show us where the package is coming from, who 
it is going to, where it is going, and what is in it. How would 
this sort of information help Customs and Border Protection 
detect and interdict shipments of illicit drugs like fentanyl?
    Mr. Owen. Yes, absolutely. When we look at the way the 
process works, it is that it is critical that we receive the 
advanced data on all cargo shipments, including what we are 
seeing in the mail, prior to the arrival of those shipments, so 
that we can use our analytical tools, our past seizure records, 
the connections that we make through our national targeting 
center, to make those connections, and then advise the Postal 
Service so that they can present the parcel before.
    I could give a real-life example from just last week at JFK 
as to the way this works. We had a shipment coming in from 
China. It was an ePacket, one of their express packets. The 
advanced information was provided through the Postal Service to 
us prior to arrival. We were able to target that shipment prior 
to arrival and placed it on hold. The Postal Service presented 
it. When we inspected it, we had 28 grams of an unknown white 
powder. Using the technology equipment that we now have 
deployed at the ports of entry, we were able to identify it as 
fentanyl. From there, we were able to work with our criminal 
investigative partners at ICE and DEA as well as the New York 
Police Department (NYPD), made a controlled delivery on that, 
and what we did was we were able to take down three additional 
individuals, make an arrest at that facility. The pill presses, 
all of the equipment to further manufacture and distribute was 
there, as well as two M4's, so two high-powered weapons that 
were part of that.
    That is just one example, again, only 28 grams of fentanyl, 
but it all started with the advanced information provided prior 
to arrival of the cargo, allowed us to target based on some 
rules that we have in our systems, some connections to previous 
seizures, and allow us to deliver consequences with the 
criminal investigators to take people into custody. I think 
that is a great example just from last week initiated at JFK as 
to how this process should work.
    Senator Klobuchar. Exactly. So tell me the challenges, 
though, and why it is not working everywhere.
    Mr. Owen. Well, the challenges, again, is the advanced 
information is what we need, and we need to have that advanced 
information prior to arrival. It needs to be accurate, and it 
needs to be timely. That is an area as you have heard this 
morning we are working on very closely. We have made strong 
progress, but there is still a lot of work to go in this 
regard.
    Senator Klobuchar. Can you tell us about the trends that 
you have seen, the trends in terms of the amount of synthetic 
opioids, including fentanyl, that bad actors from overseas are 
shipping in?
    Mr. Owen. Absolutely. This problem, as you know, came 
really to light a few years back. We continue to see increased 
interdictions both in the mail and the express environment.
    Last year, of the 335 pounds that we did seize, 92 pounds 
were in the mail enforcement and 240 pounds were in the express 
environment. So it is a threat through both pathways, also 
through the Mexican border, again, less purity on the Mexican 
border, mixed in with other seizures of other hard narcotics.
    But the trends continue to go up. As all of the changes 
that we are putting in place are making us more effective, we 
will seize more in 2018 than we did in 2017, but really with 
that volume that we are seeing at the borders, interdiction can 
only be one small part of the solution because the volume is 
just too overwhelming to think we will stop this problem simply 
at the border.
    Senator Klobuchar. And you and Mr. Cintron talked about the 
fact that 23 countries are now sharing this advanced electronic 
data with the United States. You said that we are now working 
to increase the number. How do you do that? What are your hopes 
of doing that?
    Mr. Cintron. Yes. One of the ways we do it is through 
collaboration. That has kind of been our focus.
    Right now, when you think of where we have been with AED, 
as we spoke before, from zero to 40 percent, we moved from 8 to 
23 countries. We have signed 56 data sharing agreements. So our 
focus has really been in focus on the top countries. You have 
heard us talk about that, as it represents 90 percent of the 
volume coming in.
    We have a big push this year in terms of AED. China is an 
example. Untracked volumes will yield a significant amount this 
year of that AED volume. Our target by the end of the year is 
to hit about 70 percent AED just by focusing on that data 
partner right now.
    So we are already seeing data coming over, but the focus 
really is the collaboration, collaboration also by the law 
enforcement agencies that help out and for us to focus on those 
countries.
    Senator Klobuchar. I just think when we see these numbers 
coming in--and I am from the State that is known for doing a 
lot of treatment, and we think it is really important. That is 
part of the reason Senator Portman and I and two other Senators 
led the CARA Act, which helped to set a blueprint for our 
country. It is why I believe we need to get more funding in the 
budget upcoming for opioids, and it is also one of the reasons 
that I think we need to do a better job of policing what the 
drug companies have been doing in terms of getting people 
hooked on this.
    But this issue is something that is just getting worse and 
worse with fentanyl. It is up to 100 times more potent, as you 
know, than morphine. We are seeing an increase in carfentanil, 
100 times more powerful. A dose the size of two grains of salt 
can be fatal. So I would just ask you to--especially the Postal 
Service as we go forward, we are trying to gather support for 
our bill because if we can stop some of this--I know it is not 
the only solution. You have to look at many prongs, as Senator 
Heitkamp pointed out, but this has to be part of this.
    And the one other thing I would add is something that 
Senator Graham and I are leading. It is in my bill, the SALT 
Act, to make it easier to prosecute the sale and distribution 
of synthetics because, as you know, these analogs, all our law 
enforcement people know what goes on. They basically take a 
chemical makeup, change it a bit, and then it is not on our 
list.
    And so Senator Graham and I have a bill, which we have a 
number of supporters on, going through Judiciary to make it 
easier to go after those analogs and be as sophisticated as the 
people that are trying to get people hooked on drugs that 
ultimately kill them.
    So I just want to thank the Chairman for his great 
leadership on this, for this report, and I hope it moves all of 
us to more action.
    Thank you.
    Senator Portman. Thank you, Senator Klobuchar, and thanks 
for your leadership on the STOP Act and more broadly on what we 
talked about earlier, which is the need for more prevention, 
certainly more treatment, and then longer-term recovery. That 
is all part of it, but if we can keep this poison from coming 
into our country in the first place, we need to do it. And we 
know we can, and what this report showed clearly is that we are 
not doing what we even can do within our current budget 
constraints.
    I appreciate the fact that in response to Senator Carper's 
question, the answer almost universally was more funding. We 
will talk a little about this in a moment when I ask a question 
of you all.
    I want to let Senator Daines go, but I do not disagree with 
that. More funding is important, and we did just pass 
legislation to provide more funding to CBP to be able to have 
monitoring equipment to detect fentanyl.
    But we have other problems here, gentlemen. We are not 
coordinating well. We are not doing what we should be doing.
    Last year, we were able to get advanced electronic data on 
36 percent of mail. That was the number from last year. It was 
the same as the previous year, and even during the year, you 
have a chart in your report you can see. It was flat.
    We are not doing what Commissioner Owen has just told us he 
needs, which is finding these packages, to be able to pull them 
offline, test them, get rid of this poison so it does not come 
into our communities, and then go after the individuals who are 
sending them. Senator Daines.

              OPENING STATEMENT OF SENATOR DAINES

    Senator Daines. Mr. Chairman, thank you, and thank you for 
your leadership, for you and what your staff has done to 
produce this report.
    We are seeing this in Montana. Looking at the map up here, 
if you look at Montana, there is not a lot of color on it, but 
I will tell you, it is costing our State dearly.
    In fact, in 2015, 35 Montanans died. This opioid epidemic 
nationally continues to drain fiscal resources that could 
otherwise be spent on other services.
    In fact, I was struck by the Council of Economic Advisors 
issued a report last November, estimated economic losses are 
over half a trillion dollars in 2015 alone.
    So to what the chairman just mentioned, we need to better 
our efforts on intercepting these shipments so that the United 
States Postal Service and the CBP can prevent the distribution 
of opioids in the first place.
    Mr. Baldwin, in my days with Procter & Gamble (P&G), I 
spent over 5\1/2\ years actually working in China. I was one of 
the early pioneers who was sent over by P&G to develop and grow 
our business, to make great American brands and produce and 
ship those to the Chinese consumer.
    I understand a substantial amount of USPS shipments 
containing opioids originates from China. So it is not 
surprising you are here as a leading expert on China at the 
DEA.
    Could you share with the Committee China's relationship 
with the DEA?
    Mr. Baldwin. Certainly, Senator. Thank you for your 
question.
    DEA has had a presence in China beginning in Hong Kong back 
in the 1970s. We sent liaison officers up to Beijing on a 
regular basis to engage with the Chinese. That relationship, as 
you know, having spent time in China--a long-term relationship 
in China is much better than a short-term relationship in the 
sense that you build rapport and understanding. You have the 
ability to ask more. You have the ability to get more done.
    DEA's presence in China is important, obviously, in regards 
to this threat. We have a direct liaison with the Narcotics 
Control Bureau, which is under the Ministry of Public Security, 
which is in China. They are a single-mission entity, much like 
DEA. So when we come into a room, there are a lot of political 
issues out there potentially that could cause some problems for 
us.
    We see eye to eye in the sense that, hey, we both have a 
common mission. At least we can start there, right?
    Now we have a country attache stationed, of course, full-
time in Beijing. We have a number of different employees, and 
we are expanding our presence. If you spent time when you were 
in China down in Guangzhou, we are opening another office down 
in Guangzhou in order to expand into the province where we then 
would be able to have direct engagement with the provincial law 
enforcement authorities, who then are the ones who are actually 
doing the work. Our goal is to build on that rapport. We know 
our partners from HSI have presence there as well.
    We are looking to expand our connectivity with China. We 
are hopeful that that office in Guangzhou will be valuable for 
us getting additional information regarding the----
    Senator Daines. We actually lived in Guangzhou.
    Mr. Baldwin. Oh, you did?
    Senator Daines. Had two children born in Hong Kong, in 
fact. You talked about playing for the long view, it is 
interesting to go back in the history, the mid-1800s, the opium 
wars.
    Mr. Baldwin. Yes.
    Senator Daines. This is a problem that goes back a long 
ways and something that is not new.
    I have to commend the Chairman. I led a CODEL to China 
about a year ago, and Chairman Portman came with us to China. 
He was such a strong advocate in directly questioning the 
premier, the chairman there, about how do we reduce the source 
of fentanyl, carfentanil, occurring right there in China, being 
shipped directly in the United States. I am grateful for your 
leadership there, Senator Portman.
    If you look at that map, just the devastation this is 
creating in Ohio and other places around this country, so I 
appreciate your work around the world as we are trying to get 
to the root cause in stopping the scourge on our Nation.
    Mr. Cintron, just last week in my home State, Montana, the 
Flathead Beacon reported that there was a couple employed there 
by the USPS in Polson, Montana, that was caught distributing 
methamphetamine through postal shipments, again, employees of 
the USPS.
    Now, a city like Polson, Montana, it is beautiful. It sits 
right in the south tip of Flathead Lake. It is in close 
proximity to Glacier National Park. Their population is less 
than 5,000 people. It is concerning that a half a pound of meth 
could be shipped directly into this small community.
    I will tell you I am grateful for our law enforcement 
officials. Their vigilance uncovered this operation, and we 
need to do more to stop the spread of this meth epidemic that 
is occurring in Montana.
    The question is, What detection and preventive measures is 
the USPS taking to combat the domestic shipment of meth in 
rural America?
    Mr. Cintron. I am going to ask the Inspector to step up and 
answer that question.
    Mr. Cottrell. Yes, Senator. Thank you. Guy Cottrell. I was 
sworn in at the beginning of the hearing. I am our Chief Postal 
Inspector.
    As we have heard before, the challenges for domestic are 
just as challenging as it is for international, except the mail 
volume is even higher in the domestic arena. So we use our 
intelligence. We use our past seizure data. We use our 
intelligence from working with our law enforcement partners, 
both Federal, State, and local, as well as Postal Service 
business data and package history.
    And, of course, for employee cases, we work with our Office 
of Inspector General to partner closely, and Mr. Siemer spoke 
about some of their efforts as well.
    Senator Daines. So while we still have you there----
    Mr. Cottrell. Sure.
    Senator Daines [continuing]. I still do not understand how 
a couple that is employed by the USPS in Polson could be caught 
in part because it is a real small community. It is more 
difficult to hide. It is a close-knit community, and clearly we 
need to step up enforcement.
    What can we do in Congress? This might be a two-part 
question too as well. What can we do here that helps you in 
those efforts?
    Mr. Cottrell. From my vantage point, the Postal Service has 
given the Inspection Service additional resources to combat 
narcotics in the mail. We have assembled a team of experts to 
both work on the international angle as well as the domestic 
angle, so I will speak from the Inspection Service side. 
Certainly, Mr. Siemer can cover the IG side.
    But from our vantage point, again, as we have said before, 
comprehensive postal reform to allow us to continue doing what 
we do with the Postal Service and postal operations.
    But you are absolutely right. In the small communities, 
sometimes it is just criminal intelligence. Sometimes we get a 
tip from someone that will tell us about something, something 
like that, but comprehensive reform from my end.
    Mr. Siemer. I will just speak for the Inspector General's 
office. We receive our funding through the Postal Service, but 
we are treated through the appropriations process. So the 
Postal Service just cannot give us additional resources. It is 
up to Congress and the appropriations committees to give us 
additional funding and resources for these kinds of 
initiatives.
    Because we are appropriated, we are facing the same kind of 
reduction in government that all the administrations are 
facing. We are already facing a smaller budget environment, 
anyway, as this crisis is emerging. So additional resources for 
us would be very appreciated.
    Senator Daines. All right.
    Mr. Chairman, I am out of time. Thank you.
    Senator Portman. Thank you, Senator Daines. Thanks for your 
leadership on this issue, and Senator Daines did mention our 
travels to China last year and the opportunity to speak with 
Chinese leadership about this issue. And he is correct. We 
raised it. We raised it in strong terms.
    One of the points that I made, as Senator Daines will 
recall, to Senator Carper's point earlier, is the fact that in 
China--and, Mr. Baldwin, I think you would confirm this--they 
have a growing problem of opioid addiction. That is not 
surprising, given the fact that they are producing more and 
more of these opioids to send to this lucrative market here in 
the United States. There is leakage, and they do have an 
interest in this, I would hope, for a lot of reasons, including 
the number of overdose deaths here in this country and lives 
being taken off track but also because of their own internal 
issues.
    With regard to the testimony earlier, Mr. Owen, you said 
that it is really important to have this advanced electronic 
data, and as I said earlier, the fact that most of you have 
responded to the question and we just need more money, I would 
just make an obvious point. I do not disagree. More resources 
are important. That is why we just passed legislation to give 
you more resources on the monitoring equipment. But it is a lot 
more cost effective for you and your people to have advanced 
electronic data, isn't it?
    Mr. Owen. Yes, it is. The manual process that is the 
alternative will just not meet the challenges that we face, 
having to take bags of mail and run it through the x-rays, run 
it through the dogs, or use the intuition of the officer. The 
volume is just too overwhelming. We have to employ a risk 
management approach that relies heavily on the data, the 
analytics that we do, the targeting work that we do. The data 
is the key.
    Senator Portman. Let me just take this to the next level 
because there was a lot of information in this report that was 
not previously known. Some of this new information was that you 
had to say we need to target certain countries because of this 
manual inspection, and my understanding from our report and our 
investigation is that you actually were not able to include 
China among those target countries. Why? Because there were too 
many packages from China. That is not responding to the threat, 
which we know is from China, but it is responding to the 
reality that we do not have this advanced electronic data to be 
able to target packages.
    You could not even look at any packages from China. Now you 
have some advanced electronic data from China. The 36 percent 
figure we talked about earlier, which leads to over 300 million 
packages unmonitored includes packages from China. We think 
about 50 percent of the packages from China are now including 
this advanced electronic data because of the ePacket agreement 
you have with China, and that is good. But we are still letting 
so much of this through.
    The other point that you make in your testimony is that 
even if you have advanced electronic data and you know this 
package is suspicious, 20 percent of the time, the post office 
cannot find the package to present to you to be able to check 
it. Is that accurate?
    Mr. Owen. Yes. When we started the program, the 
presentation rate was much less. The Postal Service has now put 
some new mechanisms in place, some software technologies and 
things of that nature. The increase and the presentation rate 
has gone up significantly, but 80 percent is not where we 
ultimately need to be.
    Senator Portman. So 20 percent of these packages that are 
identified as suspicious are still getting through. I know you 
need more resources, that is fine, but this is a management 
challenge. To let these packages go requires better 
coordination with all of you, particularly with CBP and the 
Postal Service, and it requires, as you said earlier, accurate, 
timely information and then the presentation of those packages.
    Let me go back to the origins of our problem, which is the 
lack of information coming from these countries.
    Mr. Murphy, you talked earlier about where you are in terms 
of working with the other countries around the world. You 
talked about the rapid progress that has been made recently. As 
I have said, we have some email traffic indicating otherwise, 
but let me, if I could, go to another piece of information we 
were able to uncover in our investigation.
    If you look at Exhibit A in front of you,\1\ Exhibit A is 
an email from May 2017. This is a memo to Deputy Assistant 
Secretary of State Nerissa Cook from Gregory Thome, and if you 
turn to page 821 of this memo, you will see an unredacted 
section on the issue before us, the UPU issue, Universal Postal 
Union issue.
---------------------------------------------------------------------------
    \1\ The Exhibit A document appears in the Appendix on page 205.
---------------------------------------------------------------------------
    In that section, it states that advanced electronic data is 
a topic ``of high interest on Capitol Hill''--``ostensibly 
because of the presumed contribution AED would make to 
preventing synthetic opioids from arriving in the United States 
through international mail.''
    The memo then goes on to state, ``Despite its uncertain 
benefits for this purpose''--its uncertain benefits for this 
purpose, that is opioids--``accelerating the exchange of AED is 
one of our highest priorities at the UPU this congressional 
cycle because of its clear benefits for aviation security, 
Intellectual Property Rights (IPR) enforcement, and expeditious 
mail handling.''
    I guess the first question is, Were you part of this memo? 
Did you help to draft or contribute to this internal memo to 
Deputy Assistant Secretary Cook?
    Mr. Murphy. Yes, Senator. I drafted the language in 
question.
    Senator Portman. OK. So is this what we believe? Again, 
resources are important, but if we have a government that 
thinks that this advanced electronic data could target 
counterfeit goods, a fake purse is more important than stopping 
a poison coming into our communities, I think we have a problem 
of priorities.
    I guess I would ask you. Is using advanced electronic data 
to target counterfeit goods and intellectual property rights 
violations a function of the State Department?
    Mr. Murphy. Senator, the State Department does not use this 
data for any purpose.
    Senator Portman. OK. So, no, that is not your job.
    What agency is responsible for using AED to target IPR 
violations?
    Mr. Murphy. It would be CBP.
    Senator Portman. So how did you determine that there was a 
clear benefit for using AED to target intellectual property but 
not opioids?
    Mr. Murphy. Senator, first of all, let me clarify. As you 
pointed out, this is an internal memo from one office in a 
bureau of the State Department to the leadership of that 
bureau, so it does not reflect the views of the Department, per 
se. It is part of an internal discussion.
    But the use of advanced electronic data for aviation 
security, which I think you would agree is a concern on par 
with our other high-priority concerns, as well as for IPR 
enforcement and for expeditious mail handling, these are the 
uses for this data that are very well established that are 
familiar to people in the UPU environment that have been talked 
about for many years.
    The use of this data for specifically targeting synthetic 
opioids is no older than the crisis itself, and so it was less 
familiar and----
    Senator Portman. Let me just interrupt----
    Mr. Murphy [continuing]. It reflects perhaps the novelty of 
it as much as anything else.
    Senator Portman. Let me just interrupt you for a second. 
This memo was written last year, May 2017. Are you saying the 
State Department did not know that we had an issue with opioids 
in May 2017?
    Look, I am not trying to put you on the spot personally, 
but I think it reflects an attitude, and I think it reflects a 
lack of, as was said earlier by Mr. Nevano, the need for us to 
be aggressive. Instead, it is an attitude of trying to work 
with these countries for 10 years. We have been doing it, with 
very little success. We do have the bar code now, which is 
great. We just need the information on the bar code, right?
    I hope it does not reflect a State Department attitude. I 
hope that after you heard from these individuals today and 
perhaps from some of the stories here that you have a different 
view of this now, that you understand that advanced electronic 
data is really important.
    Again, it is not the silver bullet. There is no one silver 
bullet. We have to stop the demand in this country. We have to 
deal with the fact that our addiction rate is so high that we 
need more treatment and recovery.
    We have a lot of other things to do, but if we have an 
attitude in the government that this does not matter, we are 
going to continue to have this poison coming in through our 
mail system. And Commissioner Owen cannot do his job. He cannot 
find the stuff.
    I hope that one of the outcomes of this report that Senator 
Carper and I worked on and of the hearing today is to 
prioritize this issue, and instead of saying it is not as 
important as intellectual property, fake purses from China, to 
say it is more important--it is about people dying--and 
prioritize it.
    I thank you again for your service, and I just hope that 
you will go back to the UPU and to your partners around the 
world and talk about this as an urgent matter.
    Let me ask a couple of other questions, if I could. One of 
the issues that I think has not been properly explained today 
is the fact that there are a lot more overseas packages coming 
into America, and it might be helpful, Mr. Cintron, if you 
would just give us those numbers. We have them in the report. 
They may not be accurate, so I want to hear from you. When I 
talked about the fact that there are about 500 million packages 
coming into the United States today, that has doubled just in 
the last few years.
    Now that makes your job harder, but again, all the more 
important that we have this data to know what is coming in. Can 
you talk a little about that?
    Mr. Cintron. Yes. Certainly, I can.
    We can probably provide you the specifics on the numbers, 
and certainly you are pretty close to that range. We have seen 
over a significant amount certainly increase over the last few 
years.
    A couple things that we are doing: In the last year, we 
have deployed a significant amount of processing equipment 
around the country, just based on these inbound cities. In the 
ISC cities--like up in the Pacific area of California, New 
York, Chicago--we have deployed equipment to be able to handle 
the influx of volume itself coming in, and so that is one 
piece.
    The other part is in working to get more AED, as I have 
said, we have increased those numbers. We are going to see a 
significant amount of AED we believe this year with our efforts 
around the untracked volume coming out of China, which we 
believe will put us at about 70 percent AED capture by the end 
of the year, a significant improvement for this year.
    What we have done subsequently on the equipment, not only 
do we have the five ISCs running, but what we have done is we 
have expanded that to 13 facilities attached to those ISCs, 
where we now have the ability to trap and capture.
    To the question of the 20 percent that is missing, our 
efforts right now are that expansion of equipment, capture 
before we get it downstream, and then further to that in the 
next several months, we are going to have the capability to 
deliver unit level to trap that piece. We certainly always have 
the Inspection Service, which at any time while they are 
embedded with these other agencies, themselves can intercept 
the package anywhere in the domestic mail stream.
    There is a lot of effort to get more AED this year, and the 
second part, really go after making sure that the 100 pieces we 
are asking for is the 100 pieces they are going to get, and we 
are laser focused to make sure that every piece that we can 
capture, before it gets out of the network itself, that we 
capture.
    Senator Portman. Well, if I look at what happened in 2017, 
it was flat. You talk about 40 percent, I talk about 36 
percent, because in December, it was 40 percent. But in 
November, it was less than 36 percent. W went up, down, and 
back up a little bit at the end. That is not a good trend, and 
70 percent would be ambitious, and we are all for that. We want 
100 percent, but we are going to have to change some of our 
methods and some of our management and some of our priorities 
in order to get there.
    We talked about the JFK program earlier. This is a program 
where, particularly with regard to China, you had an agreement 
on these ePackets. I think it is 4.4 pounds or less, packages. 
Here is a quote from one of the Customs and Border Protection 
officers on the ground working at JFK in an email, ``There has 
been no meaningful improvement as the China ePacket pilot 
approaches its second year.'' Now, that is one individual.
    Commissioner Owen, you may agree or disagree with that. I 
would like to hear from you on it, but I just do not think the 
evidence supports what you are saying in terms of this priority 
and of the significant ramping up, certainly not in the last 
year and certainly not with this kind of data. Do you have any 
thoughts on that, Commissioner Owen? Do you agree with that CBP 
officer?
    Mr. Owen. Well, I would just say that I think we learned an 
awful lot from the JFK pilot as it was begun. It started with a 
very small amount of advanced electronic data coming both from 
China and from France.
    We had to train our officers on how to effectively target. 
We had to work with the Postal Service to make sure that the 
packages that we asked to be presented to were in fact 
presented. I think we learned a lot from that pilot.
    I think it was a slow road, which led to a delay in the 
expansion to the other international mail facilities, but I 
think we are on the right track now. I think there is a sense 
of the urgency behind this, and we will continue to move 
forward.
    Senator Portman. Mr. Cintron, are you planning to expand 
the targeting beyond the Chinese ePackets?
    Mr. Owen. Yes. Actually, that will be us, and we do plan to 
go beyond the packets.
    At JFK right now, we are targeting off eight different 
countries. When you look at the volume in the particular mail 
facilities as to what is coming from what part of the world, we 
basically perform a risk assessment and ask to see the 
packages, target specifically for one country that may be of 
greater concern than another at that specific international 
mail facility.
    Senator Portman. Let me just ask a general question and 
then turn it over to Senator Carper.
    There has been a lot of discussion today about the need to 
focus on China, and of course, I agree with that. All the 
evidence is, from DEA and elsewhere, that that is the source of 
most of this synthetic opioid coming into our country, and most 
of it comes through the mail.
    But we also know that, as Mr. Baldwin said earlier, this is 
a very lucrative trade, and there will be transshipments 
through other countries and other means to try to avoid 
whatever we come up with.
    Mr. Nevano, is it true that if we just focus on one 
country--and this kind of goes again to the State Department's 
approach to dealing with these countries around the world--that 
we are likely to see transshipments to other countries? 
Therefore, having a universal application of this, in other 
words, telling all countries, ``You want to do business with 
us, you have to provide this data,'' is going to be required?
    Mr. Nevano. Senator, thank you for your question, and I 
would agree with that.
    As we as law enforcement improve on our techniques and our 
abilities to seize and interdict packages, the nefarious actors 
who are involved in this process are only going to change their 
modus operandi. They are going to change the way they do 
business, as evidenced by packages being transshipped from 
China, let us say, to Hong Kong or other intermediary countries 
to try to avoid and evade law enforcement efforts.
    Senator Portman. Thank you.
    I will turn to Senator Carper, and then I have a couple 
more questions. Senator Carper.
    Senator Carper. Thank you.
    I do not know if anybody has ever heard of the name Willie 
Sutton before. Every now and then, we talk about Willie Sutton. 
He is a famous bank robber, long since died. But many decades 
ago, he was finally arrested and put in jail. They asked him at 
his trial. They said, ``Mr. Sutton, why do you rob banks?'' and 
he responded famously, ``That is where the money is.''
    Why do we focus on China? Well, that is because that is 
where a lot of this stuff is coming from. Why do we focus on 
the Postal Service? That is how a lot of it is getting into 
this country.
    I am reminded of a game that is played at the boardwalk in 
Rehoboth Beach, Delaware. We have a great place called Funland 
for our kids. It is a little amusement park and famous for 
years, and one of the favorite games is Whack-a-Mole. This is 
not a game. That is. This is not a game. But it is also a 
different version of Whack-a-Mole because as soon as we 
convince the Chinese to help us shut it down there, it will go 
someplace else. There is a lot of money to be made.
    One of the points that I have made--and I think we keep 
making--is this is a multilayered problem. We need a 
multilayered approach. I think we are doing that. This is an 
all-hands-on-deck moment, and I think we are starting to sense 
that urgency.
    There is plenty for us to do, and one of the things we 
talked about here is the U.S. Postal Service could use some 
Governors. They have none. The Postal Service could use some 
certain predictability and the ability to generate the revenues 
they need, and we need to do a better job on that. So there is 
work for all of us to do here.
    I want to ask a couple of questions, maybe of Mr. Owen and 
Mr. Cintron, if I could. First, for Mr. Owen, the staffing 
level, let me just ask at the international service centers. 
Would you talk to us about the staffing levels? How have they 
changed over the last five years at each of the international 
service centers?
    Mr. Owen. Well, in the last year, we have increased the CBP 
officers by 20 percent in direct response to this threat. Prior 
to that, I would say the staffing levels were pretty much 
stagnant for the past four or five years, but again, in the 
last year, we have added 20 percent additional staff.
    Senator Carper. There was much made of our need to tighten 
our borders for a variety of reasons--human trafficking, drugs, 
and other illicit activities.
    We focused a lot on border patrol agents. I think we have 
20,000 or more positions that are allocated. I am not sure that 
we are actually able to hire that many people. We have a number 
of vacancies, as I recall. Hundreds of positions are still 
vacant. Correct me if I am wrong.
    But I have heard for a number of years that Customs and 
Border Protection could use some additional people at the 
border crossing. We focus on the borders between border 
crossings, but we also need to focus on the proper staffing at 
the border crossings themselves, where all of this traffic, all 
of this commercial activity is coming through, and a lot of it 
is illegal, illicit.
    Would you just comment on that, Mr. Owen, please?
    Mr. Owen. Yes. Absolutely, sir.
    We have within CBP and the Office of Field Operations what 
is known as a workload staffing model, and what that model does 
is it measures the amount of work and the time it takes an 
officer to perform every task that we are required to do, so 
how long does it take to do a seven-point vehicle inspection, 
how long does it take to board a vessel and do immigration 
clearances, how long does it take to process a passenger at the 
airports. Then we look at how often we do those activities 
across the country throughout the year.
    The workload staffing model that has been submitted to 
Congress shows that we are understaffed in the officer ranks by 
2,518, so that is 2,518----
    Senator Carper. Say that one more time.
    Mr. Owen. Yes. 2,518 additional officers is what our 
workload staffing model that is provided to Congress shows is 
what we need to perform the duties at the ports of entry. Also, 
631 additional agriculture specialists are needed to address 
the needs at the ports of entry.
    Senator Carper. All right. Mr. Chairman, we need to take 
that to heart, right from the horse's mouth.
    Mr. Cintron, I spoke in my opening statement about postal 
reform and the need to get the Postal Service the resources 
they need to make the kind of investments they need to be 
successful as a business and provide the service that we need.
    Can you tell us what you think the Postal Service needs 
both over the coming weeks and months and in the coming years 
to be able to properly handle international package volume and 
to facilitate CBP's screening efforts?
    Mr. Cintron. Yes. I think the obvious, comprehensive postal 
reform goes a long way helping us financially, right? We are 
not necessarily waiting as it relates to the international 
volumes, as I talked about a minute ago. We are expanding the 
network itself to be able to handle any type of volume coming 
into the country.
    So from our perspective, we are doing those things. We are 
not waiting. Certainly, the comprehensive postal reform goes a 
long way in keeping us on that financial footing and allowing 
us to invest in it.
    As you said, very important to think about the data, the 
technology, what everybody on this panel is talking about, and 
where really investment should be made to make sure that we can 
zero in on what we are looking for.
    Senator Carper. All right. Thanks.
    Mr. Cintron. But reform will help us get there.
    Senator Carper. Thanks.
    Ms. Siemer, any comments you have on this front, please?
    Mr. Siemer. I think the only comment I would make is that 
as they collect this advanced electronic data, we need to keep 
in mind the quality of the data.
    The data itself is only useful for analytics if it is 
structured for analytics, and when we started looking at it 
last summer, it really looks to us like someone is manually 
inputting this overseas. Someone is actually typing in the 
addresses.
    And to give you an example, just with our building's 
address, 1735 North Lynn Street, there are probably 20 
different ways a human can type that. They can abbreviate 
``Street.'' They can abbreviate ``North.'' They can put periods 
in there. They can add extra spaces. When you have humans 
entering the data and then that gets fed into the Postal 
Service and then that gets fed into targeting, it is almost 
impossible to start matching addresses and packages going to 
those addresses. It really takes a tremendous amount of cleanup 
effort to make it suitable for those kind of efforts.
    I think if there is any way that we could require the 
countries to structure that data a little bit better or collect 
it automatically in some respect would help tremendously, but 
in the meantime, some effort needs to be made to clean that up 
by somebody.
    We are doing it for our analytics, but I think there are 
probably other approaches to doing that so that we can all 
share the same dataset to do our analytics.
    Senator Carper. All right. Thank you.
    I have another one for Mr. Cintron and Mr. Owen. The 
international mail facility at JFK receives, as we have heard, 
the bulk of our country's inbound mail from other places. The 
Postal Service and CBP had this pilot program, JFK using 
advanced electronic data to target suspicious packages at JFK. 
It is designed to help us to manage the high package volumes 
while still hopefully preventing illegal items from entering 
our country.
    I have a question for Mr. Cintron, if I could. I trust the 
Postal Service appreciates its role in helping CBP to combat 
the flow of dangerous drugs in our communities. I believe you 
do. How does the Postal Service plan to address our findings 
and recommendations specific to your agency? I will say that 
again: How does the Postal Service plan to address our findings 
and recommendations, which were released, specific to your 
agency?
    Mr. Cintron. Well, we are certainly going to take all of 
the findings that are in the report and go back and address 
them.
    Certainly, key for us, as I brought up earlier, two things. 
One, working collaboratively to keep getting the percentages. 
While we had a bump for a couple of months, there were some 
technical issues. When we looked at the growth of AED, it is 
significant growth. We expect with our collaboration, it is 
going to be significantly higher this year.
    The other part is the holds, one key thing that we found in 
terms of finding that 20 percent, which is significantly 
important to us as well.
    So all the findings that we will get there, going to get 
priority to make sure that we are addressing every one of those 
issues and abate them as quickly as we can.
    Senator Carper. All right. Thanks.
    Mr. Owen, I am convinced that you recognize the vital role 
that your agency plays in addressing this, but really the same 
question that I just asked for Mr. Cintron. Please discuss how 
CBP plans to address our findings and recommendations as they 
pertain to your agency.
    Mr. Owen. Yes. Similar to the Postal Service, the key is 
the advanced information, so we will continue to work with them 
on not only ensuring that the level is going up, but to Mr. 
Siemer's point, the accuracy and the timeliness of that data, 
so we can be more effective with the targeting, and then as 
well, designing the protocols to make sure that every package 
we ask for inspection is presented to us for inspection.
    Senator Carper. All right. A question for both you--and 
this is my last question--for both of you, Mr. Cintron and Mr. 
Owen. Have your agencies agreed to performance measurement 
system at least for trafficking the number of packages the 
Postal Service presents to CBP for inspection? And if yes, 
explain what you have agreed to, and if not, maybe you could 
explain why not.
    Do you want to go first, Mr. Owen?
    Mr. Owen. Yes. We are still in those discussions. Really 
the issue is the actionable holds versus the holds. When we 
place a shipment on hold, of course, we expect to see it. The 
challenge becomes as if the data was not provided prior to 
arrival or if the date targeting was not done until after the 
cargo arrived. Then we have a challenge for the Postal Service 
to retrieve that.
    So the ultimate end state and where we are going and where 
this is working is that, again, the data is presented prior to 
arrival. We target prior to arrival, and then the Postal 
Service will capture that. There is no disagreement in that. It 
is that gray space that what happens when the data came in late 
or the targeting was late, how do we account for that, so that 
is just the one area.
    But again, the ultimate objective here is to have that data 
pre-arrival, the targeting done pre-arrival, and then there is 
no disagreement that in those cases, those shipments would be 
presented to CBP.
    Senator Carper. All right. Thanks.
    Briefly, Mr. Cintron.
    Mr. Cintron. Really, the only piece to add onto that are 
the other developments that we are doing to go beyond the ISC. 
If the timing is off and we have the ability to capture before 
we get it all the way to delivery, that is really where the 
focus is going to be. We are definitely in agreement and 
getting to those metrics that we can agree on.
    Senator Carper. Good.
    I am going to close and just say, Mr. Chairman, thank you 
for your continued leadership on this front. It is vitally 
important, for the hats that you have worn in this fight.
    I want to thank your staffs on the kind of collaboration 
that they have demonstrated, I hope with our leadership, to 
help address this challenge and to bring a sense of urgency to 
it.
    The Chairman said earlier--he said there is no silver 
bullet, and that is obviously true. I like to say--and it is 
not just on this front, but with a lot of challenges, no silver 
bullet. A lot of silver BBs, and some of them are bigger than 
others. Today, we have identified some of those, and some of 
them are bigger than others.
    In Delaware, we are big on the letter ``C.'' I do not know 
why, but we are big on the letter ``C.'' But we call it the 
Delaware way, to communicate, compromise, collaborate, and the 
letter ``C'' actually can be really helpful here for all of us, 
you as well as us. And that is to communicate better, and I 
hope this hearing is helpful in that, to better coordinate and 
find other ways to collaborate. If we do those three things, we 
will be better off.
    This hearing started 2\1/2\ hours ago. I am told that five 
people die every hour. Five people die every hour from this 
opioid epidemic, which means 12 or 13, people have died since 
we just started this hearing. They are somebody's mom or dad, 
somebody's brother or sister, somebody's son or daughter, niece 
or nephew. They are real people, and just keep them in mind. 
Keep their faces in mind and their stories in mind as we put 
the pedal to the metal and move forward.
    Thank you very much.
    Thanks, Mr. Chairman.
    Senator Portman. Thank you, Senator Carper, thank you for 
not just cooperation on the report but your input on the 
report. You and your staff made this report not just bipartisan 
but nonpartisan, and we were able to dig much deeper, so thank 
you.
    Among the exhibits we talked about today was Exhibit 1. 
This was a State Department memo, so I would like to enter this 
into the record, without objection.\1\
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    \1\ The memo appears in the Appendix on page 205.
---------------------------------------------------------------------------
    We were talking a moment ago about the 20 percent, and that 
is a concern in terms of Customs and Border Protection having 
to finally find the data to be able to find the package and 
then having the package already delivered or otherwise 
unavailable.
    What is your experience with the FedExes, UPSs, and DHLs of 
the world, the so-called express consignment operators? Our 
report indicates that you do not have that slippage or that 
leakage in that case. Is that accurate?
    Mr. Owen. Yes, that is correct. The presentation rate from 
the express couriers is about 100 percent. I mean, they are 
very effective.
    What I think is important to note and to remember is that 
they have been at this since 2002 with the passage of the trade 
act of 2002 that required the express courier operators to 
provide that advance data.
    I can tell you from my personal experience in those early 
years as they were ramping up to meet this new requirement, 
they struggled with a lot of the same issues, with having 
everybody providing the data, the data being accurate, being 
timely, and finding the parcels that customs was looking for to 
hold.
    When I look at the success the express couriers have had 
over the last 10, 12, or 15 years, I see that as a model that 
we can employ and we are employing in dealing with the Postal 
Service.
    They have come a long way. They are very effective at 
identifying or helping us to track down those shipments. I feel 
we will be just as confident in the near future with the Postal 
Service as well.
    Senator Portman. I appreciate your confidence, and I hope 
that this hearing helps to focus on that issue because 
ultimately we want to make sure that data is usable, as Mr. 
Siemer has said. He has had to clean up a lot of data--to use 
his data analytics to be able to make this work, and I am sure 
you all have done the same thing. CBP has also had to clean up 
some data, as I understand it, so getting better data and then 
ensuring that once you have the data, it is actually used. That 
model that you have with these private couriers obviously is 
something we ought to be looking at, if it is working from a 
management point of view, more effectively to present those 
packages.
    The final thing I want to say is about a trip to Hong Kong 
that our staff made because Hong Kong is one of those 
transshipment points, and they were meeting with the Hong Kong 
customs officials. They talked about a few things I thought 
were interesting.
    One is that there had been a bust working with DEA and 
with, as I understand it, Department of Homeland Security as 
well, and that was a very successful bust in the sense that 
they were able to break up some kind of network going between 
China and Hong Kong, transshipping to the United States.
    But there has only been one, and also their attitude, I 
would tell you--and, Mr. Murphy, you will appreciate this. 
Their attitude was that, ``Do not worry. It is under control.'' 
That was the quote of the customs official, the most senior 
customs official that our staff was able to interview. Clearly 
not under control, but again, this goes to the attitude of some 
of our foreign partners.
    Finally, the fact that this advanced electronic data, as 
important as it is to Commissioner Owen, to finding this 
poison, getting it off track, it is also really important to 
your prosecutions.
    Mr. Nevano, maybe you can speak to that for a second. The 
Homeland Security Inspections, your special agents at 
facilities like the international service centers we have 
talked about here could be a lot more effective in their 
investigations and in dismantling some of these transnational 
criminal networks if they had the advanced electronic data. 
Maybe you could just speak to that for a second.
    After Customs and Border Protection makes an opioid seizure 
at one of these international centers, how does the advanced 
data assist you and assist HSI in subsequent criminal 
investigations?
    Mr. Nevano. Thank you for your question, Senator.
    The quicker we get the information, the higher probability 
that we have in conducting a successful prosecution. It also 
allows us, as Mr. Owen, I believe, stated earlier--to do like a 
link analysis or post-seizure analysis where you might be able 
to tie the links of a previous seizure, historical information 
that may tie a criminal network or transnational criminal 
organization.
    For example, we may have an organization or a previous 
seizure that was in California and this seizure in JFK and New 
York, but based on the historical data, we may be able to tie 
the organization together to develop a larger organization and 
take down a larger organization.
    It also helps us from an officer safety standpoint, 
Senator. Before our agents go into a home, it is helpful to 
know the person that may be inside that residence or business, 
what type of criminal history do they have, do they have 
weapons, how can we best prepare our special agents for their 
security and safety before they actually enact a law 
enforcement operation. That would be a significant concern that 
we would have, and I think that advanced data helps us in that 
aspect, Senator.
    Senator Portman. I think that is also important for us to 
note today that this is not simply about identifying a package 
and taking it offline. It is about the follow-through and the 
prosecution. It is critical information to have.
    Thank you all for being here. We have many more questions, 
and I am sure we are going to be following up with some. 
Senator Carper.
    Senator Carper. Could I have just another----
    Senator Portman. Maybe right now.
    Senator Carper. Not a question. Just a comment.
    A thought has come to mind, Mr. Chairman, and for our 
witnesses: My last year as Governor of Delaware, I was chairman 
and vice chairman of the National Governors Association (NGA), 
today one of our dear friends, George Voinovich--but there had 
been a lawsuit between all 50 States and the tobacco industry. 
The lawsuit was an effort by the States collectively to get 
money from the tobacco industry to help cover health care costs 
States were incurring because of people's addiction to tobacco, 
nicotine.
    The lawsuit was successful, and not only have the States 
received for, I think, 20 years now, a flow of revenues for 
mostly health-related issues, but also a foundation was created 
called the American Legacy Foundation. The American Legacy 
Foundation was created. I was to be the founding vice chairman, 
and what we did is we went to work with young people all over 
the country to figure out if there is a way we could mount a 
multimedia campaign, not just Internet, not just films, not 
just television, not just print media, but a multimedia 
campaign to reduce the incidence of tobacco use by young 
people. If they are using it, get them to stop. If they had not 
started, to make sure that they did not start. It was hugely 
successful.
    And the key was hard hitting, direct messaging, right to 
the target audience, and we saw a dramatic drop in youth 
smoking, tobacco use, and it has actually persisted. It has 
actually persisted over the years.
    I always like to say find out what works, do more of that. 
If we are looking at a multilayered strategy, maybe part of 
that is just to do a better job messaging to the target 
audience, what is at risk here for them, for their lives and 
for their families, and we have something that actually works 
in doing just that.
    Thank you.
    Senator Portman. So true. Thank you all again for being 
here, and again, we have some follow up questions we will be 
providing. We appreciate your responsiveness, not just today, 
but in the course of our investigation.
    We shared our report with all of you in advance, and we 
appreciate the fact that you made some edits that you thought 
were appropriate, including to be sure we were not providing 
information that was inappropriate, that in any way, even if it 
was not classified, sensitive information.
    But I just want you to know this has been a collaborative 
effort not just with Senator Carper and myself but with our 
partners in the Federal Government who have the job every day 
to try to protect us from this opioid epidemic. We need to 
continue to work together and work together in smarter ways.
    We are better than this. We can do a better job, and when 
you think about what is happening around our country today with 
40,000 Americans dying of overdoses--and that is the tip of the 
ice berg, frankly, as tragic as that is, that so many other 
lives are ruined, taken off track, and tremendous cost to our 
community and our families being broken apart. We have to do 
everything we can.
    Senator Carper talked earlier about all hands on deck. This 
is that time. This is that moment. We have to change the way we 
are operating to provide this information to be able to stop 
these packages. We have to be able to prosecute those who are 
perpetrating these acts on our citizens. We have to do much 
more in terms of the prevention side, as Senator Carper said, 
and getting people the treatment they need to stop this 
addiction. All of that is important, but here is one thing we 
know we can do, and that is to tighten up our own Postal 
Service to be able to stop some of this poison from coming in, 
as was said earlier, and have an immediate impact on the price 
on the street, because one of the reasons fentanyl is pushing 
out heroin in Ohio, I will tell you, is the cost. It is not 
just that it is more powerful, but it is less costly.
    I am proud of the staff who worked on this report. I want 
to particularly thank HSI Special Agent Mancuso for his work on 
this.
    I will tell you, Mr. Nevano, we are going to miss him when 
he goes back to HSI. His contributions were invaluable.
    I just want to thank all the staff who were involved, and, 
Senator Carper, I would like you to comment on your team who 
are involved, and I am going to comment on ours briefly.
    Senator Carper. Thanks. Thanks so much.
    Our team led by John Kilvington, our staff director for our 
Subcommittee on the Democratic side--Portia, sitting right 
behind me, and, of course, we are grateful to you. Felicia 
Hawkins, Roberto Berrios, and thank you all, not just for the 
work that you have done but the collaboration and a sense of 
spirit and a team that we have seen demonstrated with our 
colleagues on the majority side. Thank you.
    Senator Portman. And our team, I want to thank Andy 
Polesovsky for his work, Will Dargusch, Lenny Mancuso--I talked 
about earlier--and Patrick Warren.
    Andy, you did not put your name down there.
    I thank them for all their hard work on this report.
    The hearing record will remain open for 15 days for any 
additional comments or questions of any of the Subcommittee 
Members, and again, thank you for your testimony today and for 
your service on behalf of our country.
    This hearing is adjourned.
    [Whereupon, at 12:35 p.m., the Subcommittee was adjourned.]

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