[Senate Hearing 107-309]
[From the U.S. Government Publishing Office]
S. Hrg. 107-309
WEAK LINKS: ASSESSING THE VULNERABILITY OF U.S. PORTS AND WHETHER THE
GOVERNMENT IS ADEQUATELY STRUCTURED TO SAFEGUARD THEM
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
DECEMBER 6, 2001
__________
Printed for the use of the Committee on Governmental Affairs
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WASHINGTON : 2002
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COMMITTEE ON GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia PETE V. DOMENICI, New Mexico
THOMAS R. CARPER, Delaware THAD COCHRAN, Mississippi
JEAN CARNAHAN, Missouri ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota JIM BUNNING, Kentucky
Joyce A. Rechtschaffen, Staff Director and Counsel
Dan Feldman, Counsel/Communications Adviser
Jason M. Yanussi, Professional Staff Member
Hannah S. Sistare, Minority Staff Director and Counsel
Jayson P. Roehl, Minority Professional Staff Member
Darla D. Cassell, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Lieberman............................................ 1
Senator Levin................................................ 3
Senator Collins.............................................. 15
Senator Cleland.............................................. 30
Senator Bennett.............................................. 33
Senator Thompson............................................. 36
WITNESSES
Thursday, December 6, 2001
Hon. Ernest F. Hollings, a U.S. Senator from the State of South
Carolina....................................................... 6
Stephen E. Flynn, Ph.D., Senior Fellow, Council on Foreign
Relations and Commander, U.S. Coast Guard...................... 10
F. Amanda DeBusk, Miller and Chevalier, former Assistant
Secretary of the Commerce Department and former Commissioner,
Interagency Commission on Crime and Security in U.S. Seaports.. 16
Rob Quartel, Chairman and Chief Executive Officer, FreightDesk
Technologies and former Member, U.S. Federal Maritime
Commission..................................................... 19
Rear Admiral Richard M. Larrabee, Ret., Director, Port Commerce
Department, The Port Authority of New York and New Jersey...... 23
Deputy Chief Charles C. Cook, Memphis Police Department.......... 40
Argent Acosta, Senior Customs Inspector, Port of New Orleans and
President, National Treasury Employees Union (NTEU) Chapter 168 43
Michael D. Laden, President, Target Customs Brokers, Inc......... 47
W. Gordon Fink, President, Emerging Technology Markets........... 49
Alphabetical List of Witnesses
Acosta, Argent:
Testimony.................................................... 43
Prepared statement........................................... 127
Cook, Deputy Chief Charles C.:
Testimony.................................................... 40
Prepared statement........................................... 120
DeBusk, F. Amanda:
Testimony.................................................... 16
Prepared statement........................................... 93
Fink, W. Gordon:
Testimony.................................................... 49
Prepared statement........................................... 138
Flynn, Stephen E., Ph.D.:
Testimony.................................................... 10
Prepared statement with an attachment and slide presentation. 57
Hollings, Hon. Ernest F.:
Testimony.................................................... 6
Laden, Michael D.:
Testimony.................................................... 47
Prepared statement........................................... 133
Larrabee, Rear Admiral Richard M., Ret.:
Testimony.................................................... 23
Prepared statement........................................... 114
Quartel, Rob:
Testimony.................................................... 19
Prepared statement with slide presentation................... 98
Appendix
Slide presentation by Stephen E. Flynn entitled ``Bolstering the
Maritime Weak Link''........................................... 80
Slide presentation by Rob Quartel................................ 107
Letter (with an attachment) to Senator Collins from Captain
Jeffrey W. Monroe, Director, City of Portland, Department of
Transportation, dated October 26, 2001......................... 142
U.S. Customs Service Optimal Staff Levels, Fiscal Years 2000-02,
February 25, 2000.............................................. 148
Classification of U.S. Customs Districts and Ports for U.S.
Foreign Trade Statistics....................................... 285
Responses to questions for the record from:
Mr. Flynn.................................................... 248
Ms. DeBusk................................................... 253
Mr. Quartel.................................................. 259
Rear Admiral Larrabee, Ret................................... 270
Mr. Acosta................................................... 275
Mr. Laden.................................................... 277
Mr. Fink..................................................... 282
WEAK LINKS: ASSESSING THE VULNERABILITY OF U.S. PORTS AND WHETHER THE
GOVERNMENT IS ADEQUATELY STRUCTURED TO SAFEGUARD THEM
----------
THURSDAY, DECEMBER 6, 2001
U.S. Senate,
Committee on Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 9:08 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Joseph I.
Lieberman, Chairman of the Committee, presiding.
Present: Senators Lieberman, Levin, Bennett, Cleland,
Torricelli, Collins, and Thompson.
OPENING STATEMENT OF CHAIRMAN LIEBERMAN
Chairman Lieberman. Good morning. Thanks to all of you for
being here, particularly to Senator Hollings and our other
witnesses. This is one of a continuing series of hearings that
this Governmental Affairs Committee has held since the
terrorist attacks of September 11 which have examined the
Federal Government's ability to prevent, prepare for, and
respond in the event of future terrorist attacks.
In some ways, we ask questions that some have been hesitant
to ask in the past, and I suppose some might wonder why we are
asking them now--because they may reveal vulnerabilities. And
yet, if we do not ask them, we will not close those
vulnerabilities and we will be susceptible to further attack. I
think all of us felt that, unfortunately, after September 11,
we have to start thinking more like the terrorists do, and we
are going to try to do it in a very thoughtful and
comprehensive way today and we have the witnesses here to make
that happen.
Not since December 7, 1941, which is 60 years ago tomorrow,
has the question of our domestic security so dominated national
debate. The Committee has taken a hard look at whether the
Federal Government is appropriately structured to meet those
challenges. Specifically, we have held hearings on our aviation
and postal systems, on cyberspace, and more broadly, on the
safety of our critical infrastructure and how we should
organize for homeland security.
Today, we direct our attention to the security of the
Nation's 400-plus ports through which 95 percent of all U.S.
trade flows. The picture, unfortunately, is not a reassuring
one. U.S. ports are our Nation's key transportation link for
global trade and yet there are no Federal standards for port
security and no single Federal agency overseeing the 11.6
million shipping containers, the 11.5 million trucks, 2.2
million rail cars, 211,000 vessels, and 489 million people that
passed through U.S. border inspections last year.
I just want to put an exclamation point there, that as I
have studied this more, I must say it surprised me. There are
no Federal standards for port security and no single Federal
agency overseeing port security. Port security is largely a
matter of State and local administration. The Coast Guard, the
Customs Service, the Immigration and Naturalization Service,
and other agencies all have a role to play, but the plain fact
is that the movement of goods into the United States, five
million tons a day, is now so efficient in the sense of goods
coming into the country and moving rapidly as a matter of
commerce to their destination that port security has been
sacrificed.
It is not possible to physically inspect more than a small
sample of containers as they arrive in the United States. Less
than 1 percent are actually examined, and that leaves our
ports, unfortunately, vulnerable to attack. And not just our
ports. Containers arriving from Europe, Asia, or Canada are
more likely to be inspected at their final destination rather
than at the arrival port.
I am sure that would surprise most Americans, but that is
the reality and it means that at any given time, authorities
have virtually no idea about the contents of thousands of
multi-ton containers traveling on trucks, trains, or barges on
roads, rails, and waterways throughout the country. The ease
with which a terrorist might smuggle chemical, biological, or
even at some point nuclear weapons into one of those containers
without being detected is terrifying.
Even the physical security of ports is minimal. Last year,
the Commission on Crime and Security in U.S. Seaports reported
that of 12 of the Nation's largest ports, 6 had perimeter
fencing that could be penetrated, 4 had no regular security
patrols, and 10 never performed routine criminal background
checks on employees. The Commission said the state of security,
``at U.S. seaports generally ranges from poor to fair.''
The FBI told the Commission that ports were highly
vulnerable to terrorist attack, although at that time, they
considered the threat to be marginal. The assessment, of
course, has changed since September 11 and 2,000 military
reservists have now been activated to shore up port security.
Part of the overall problem, as is so frequently the case,
is the lack of resources to properly enforce port security.
But, of course, we are going to be dealing with that on the
Senate Floor in the Department of Defense appropriations bill
and the homeland security funding that is part of that bill.
The Coast Guard, for example, has 95,000 miles of shoreline
to patrol but is at its lowest level of manpower since 1964.
International trade has doubled since the mid-1990's, but the
number of Customs inspectors has remained the same, just 8,000.
The Federal Government is also handicapped by a lack of
coordination and communication between agencies.
I have heard that a ship with a--this is a hypothetical,
but not too improbable--a shadowy record of ports of call, for
example, carrying a cargo that does not square with its home
port and manned by crew members on a watch list of people with
suspected terrorist ties might not necessarily raise any red
flags, and that is because the Coast Guard could know about the
ship, Customs could know about the cargo, and INS could know
about the crew members, but no one would necessarily have all
that information, so the pieces would not be pulled together to
form a picture that would set off alarms.
Even if resources and coordination were adequate, the
front-line agencies would still be handicapped by a lack of
access to national security intelligence from the FBI and the
CIA. That is a complaint that I have heard over and over again
from local officials following the September 11 attack.
The Committee is particularly pleased to welcome Senator
Fritz Hollings and to thank him for his leadership and
dedication--lonely, most of the time--to pursuit of better port
security in America and the critical role that he has played in
keeping this problem on our collective radar screens over the
years. I am very pleased that he is with us today to testify
about legislation that he and Senator Bob Graham have written
to respond to the vulnerability of our ports. Their
legislation, which I strongly endorse, addresses some key
findings and recommendations of the Commission on Seaport
Security. Our ports, goods, and citizens will be safer when it
passes.
I must say that the more that I study this issue, the more
I realize how pervasive the problem is and how much work we
have to do on it to make sure that we get our entire system of
importing and exporting to a point where it is not only
efficient, but it is also safe. The entire commercial structure
may need to be addressed systematically, and as some of the
witnesses we are going to hear this morning will suggest, the
best answer may lie in an entirely new approach that relies on
innovative technologies combined with security inspections
starting at ports of origin, rather than ports of destination.
I am going to be very interested to hear testimony on that.
We may need, as one of our witnesses would put it, to push
our borders back and create sanitized shipping zones for goods
bound for the U.S. from overseas ports. We certainly need to
put technologies to work so that containers can be
electronically sealed and alarmed after they are inspected,
then X-rayed for a baseline record of their contents. Global
positioning satellite systems could be attached to all
containers to monitor shipments, and a secure Internet tracking
system could help place a shipment anywhere along its path.
Fortunately, our ports are busy and they do not need a bail
out. They just need a sensible strategy to keep them safe and
sound as vital economic hubs, and I am hopeful that the
testimony we will hear today will help the Congress do just
that.
Senator Levin.
OPENING STATEMENT OF SENATOR LEVIN
Senator Levin. Mr. Chairman, thank you. Thank you for these
series of hearings that you are holding that are really a
comprehensive series, and I think perhaps the most
comprehensive look that is being given to our security issues
in a whole host of areas.
I also want to join you in welcoming Senator Hollings, an
old friend of both of ours, or a dear friend, I should say, of
both of ours. He has been, indeed, a leader in the subject that
you are looking at today.
We, who are on the Northern Border, are particularly very
keenly interested in this subject. We have twice the Border as
exists on the South Borderand yet we have a small, tiny
fraction of the security which exists there, and that is
inadequate, and you will be hearing more about that. The
Northern Border receives about two-thirds of the truck traffic,
about 85 percent of the trains, a large number of ships.
We have the longest coast, actually, of all the four
coasts. People sometimes forget that the St. Lawrence Seaway
and the Great Lakes is the longest coastline that we have in
this country. We have many ports of entry, lots of ships coming
in from overseas, and it is a major issue for us. The issues
that the Chairman has identified, are both the security issue
as well as trying to move trade, because when we have long
lines of trucks, for instance, coming into my home State and
leaving my home State, with trade, it means that our plants are
not able to run as efficiently when we have to wait 2 or 3
hours at a bridge or a tunnel. What you are looking at today is
mainly seaports, but I gather you are including all ports of
entry, and I think the third panel will be looking at those, as
well.
What you have identified, Mr. Chairman, one of the issues
that we are pushing very hard on is the reverse inspection
issue. It makes a lot more sense to be inspecting cargo before
it lands at our ports, before it goes through our tunnels,
before it goes across our bridges, because it could be too
late. If someone wanted to attack a port or a tunnel or a
bridge, they would do so before they entered our country, not
afterwards, and they would do it in the process of entering,
not after they have entered.
So the reverse inspections that we are pushing so hard for,
getting our Customs people to get involved in much more
actively, could be an important part of added security for our
ports of entry, including our bridges and tunnels. Some of the
technologies which the Chairman has identified are also very
important and we must put more resources into those
technologies to identify threats to our ports of entry.
And also, we need more resources. We have a huge shortage
of resources, particularly on the Northern Border, but I think
that is true on the South Border, and also on the East and West
Coasts. We have a large number now of temporary employees
following September 11. We have got to have permanent employees
instead of temporary employees. But we have both resource
problems, technology challenges, and just plain common sense
that push for those reverse inspections that could provide so
much greater security.
But while I must leave you, Mr. Chairman, I am very keenly
interested in this subject. I want to again thank you for these
hearings. I congratulate Senator Hollings for his usual
steadfastness in staying with an issue for so long, and I think
that, finally, tragically, probably, because it took September
11 to wake us up, but nonetheless, finally, I think we are
going to get to the point where Senator Hollings has been for
so long.
PREPARED STATEMENT OF SENATOR LEVIN
It took the tragedy of September 11 and the subsequent need for
heightened security along our borders to draw attention to what many of
us have known for years; there is an alarming lack of resources along
our Northern Border. While much has been done over the last decade to
improve security on our border with Mexico, the Northern Border has
largely been ignored. For example, only 1,773 Customs Service personnel
are present at our border with Canada, while 8,300 protect our Southern
Border. Similarly, while 8,000 Border Patrol agents monitor our 2,000
mile Southern Border, only 300 are stationed at our 4,000 mile Northern
Border. So, 96 percent of our Border Patrol agents are assigned to a
border that is only half as long as the one to which 4 percent of
agents are assigned.
Although hugely understaffed, we process a large percentage of the
country's commercial traffic. The Northern Border has six of the top
eight truck border crossings in the country, including the number one
truck border crossing, Detroit's Ambassador Bridge. Our Customs
officers on the Northern Border process 62 percent of all trucks, 85
percent of all trains, and 23 percent of all passengers and pedestrians
entering the country each year. However, our Customs inspectors
represent only a small fraction of the currently deployed inspectors in
the country, and their numbers have remained essentially static since
the 1980's.
The Detroit Region has half of all Northern Border crossing traffic
yet has only 10 percent of the INS inspectors assigned to the Northern
Border and 24 percent of the Customs inspectors assigned to the
Northern Border.
With this startling lack of resources, it's no surprise that the
new security measures at the border have a tremendous impact on our
region's economic well being. Auto plants wait days for critical parts.
Hospitals can't perform vital services when supplies and staff are
trapped in long lines at the bridge and tunnel. We need to find a
permanent solution to the staffing shortfall at our borders so that we
are able to perform essential security inspections without causing
unreasonable backups that hurt our economy. We are grateful for the
recent Federal commitment to increase the number of National Guard at
the Northern Border and are relying on them to help protect our border
and keep traffic and commerce flowing smoothly. However, we need to
move quickly to put permanent staff and technology in place.
Congress has taken some important steps to achieve this goal, but
we are not there yet. The FY 2002 Treasury Postal Appropriations bill
provides an additional $28 million for Customs to institute a Northern
Border initiative including hiring approximately 285 additional Customs
officers. The Commerce Justice State FY 2002 Appropriations bill
provides for $66.3 million for 570 new border patrol agents across the
nation and $25.4 million for 348 new land border ports-of-entry INS
inspectors across the nation. Particular attention will be paid to the
needs of the Northern Border. Congress also tripled staffing levels for
INS, Customs and Border Patrol staffing on the Northern Border in the
anti-terrorism bill. A portion of the $40 billion emergency
supplemental should also go to staffing up the security at our Northern
Border.
But improved border security involves more than just more money. It
requires changing policies and practices that don't make sense. On
November 13 I held a hearing of the Permanent Subcommittee on
Investigations to highlight an obvious gap in our border security. The
U.S. Border Patrol is the uniformed law enforcement arm of the
Immigration and Naturalization Service (INS) with the responsibility of
combating alien snuggling and illegal entries other than at ports of
entry. The Subcommittee looked at how people who attempt to enter the
country illegally at places other than the official ports of entry are
arrested and processed by the Border Patrol. When persons are arrested
by the Border Patrol, the large majority voluntarily returns to their
country of origin, usually Mexico or Canada. The others, perhaps as
many as one-third of those arrested on the Northern Border, are given a
notice to appear at a removal hearing. The Border Patrol decides
whether the person should be detained, released on bond or, as is often
the case, released on his or her own recognizance while awaiting a
hearing. This hearing can take several months to occur.
In FY 2001 at the Detroit Border Patrol Sector--which encompasses
all of Michigan--the Border Patrol arrested more than 2,100 people. A
significant percentage of these people were arrested while actually
attempting to enter the U.S. illegally. Most of these 2,100 were
voluntarily returned to their country of origin. However, more than
one-third were given a notice to appear at a removal hearing. Reports
from Border Patrol agents indicate that the vast majority of the latter
group were released on their own recognizance pending their hearing.
The INS wasn't able to tell us how many of the persons arrested in this
situation and released fail to show up for their scheduled hearing.
However, by looking at related statistics and ballpark estimates, we
estimated that the number is at least 40 percent and possibly as high
as 90 percent.
The conclusion is inescapable: The vast majority of people arrested
by the Border Patrol while attempting to enter the U.S. illegally who
don't voluntarily return to their own country are released on their own
recognizance. Most of those released don't show up for their removal
hearing and little or no effort is made to find them.
As I said at my Subcommittee's hearing, this is a dysfunctional and
absurd system that makes a mockery of our immigration laws. When we
release persons into the county who are without an address, without
ties, without any record of who they are, we're abdicating our
responsibility to the larger community. This is a practice that has to
stop. On November 13, I asked the INS and Border Patrol to report to me
on the steps they plan to take to close these enforcement loopholes. If
the response is unsatisfactory, I plan to introduce legislation to
accomplish it.
There is much that needs to be done. Customs and INS officials
shouldn't have to rely on temporary fixes--we need permanent workers
and we need them now. We also need to find a way to compensate our
local law enforcement volunteers and secure funds for technology. We
should also consider performing reverse Customs inspections of vehicles
entering tunnels and crossing bridges on the Northern Border. With the
increased security risks to our nation's infrastructure in the post-
September 11 climate, it seems obvious that inspecting vehicles for
bombs or explosives AFTER they enter our tunnels or cross our bridges
is illogical. To rectify this security vulnerability, we must work with
our neighbors to establish a reverse inspection program to inspect
vehicles before they have the chance to endanger or destroy important
transportation infrastructure.
And finally, we need to make common sense changes to our law
enforcement and immigration policies to ensure the safety of our people
and the integrity of our laws. We are an open and generous country and
we welcome persons from around the world who want to contribute their
hard work to help build a better America. But we also have a duty to
protect ourselves and our country from people who would do us harm.
Chairman Lieberman. Thanks, Senator Levin. Thanks for your
involvement in this. Because I know of the great interest in
Michigan about this, I look forward to the questions you have
raised, and to working with you on some responses.
Senator Hollings, thanks so much for being here.
TESTIMONY OF HON. ERNEST F. HOLLINGS, A U.S. SENATOR FROM THE
STATE OF SOUTH CAROLINA
Senator Hollings. Thank you very, very much, Mr. Chairman
and Senator Levin. I am grateful to the Committee for the
chance to appear here.
Let me ask consent that my prepared statement be included
in the record.
Chairman Lieberman. Without objection.
Senator Hollings. I will get right into the advance check.
I, frankly, had not heard of that, the concept of pre-clearance
of cargo in foreign ports. Let me say, Senator Bob Graham of
Florida and I, as you indicated, Senator Levin, we have been at
it 3 years. We started off really in looking into drugs and the
drugs coming in in containers. We were not thinking of
explosives and terrorism particularly at the time. President
Clinton, at our behest, put in a study commission. The study
commission, comprised of 17 Federal agencies, made its report.
We put in a bill in the last Congress with no further success.
We have one in in this Congress that has been reported out of
committee unanimously. And yes, we have been working to advance
that bill forward as well.
Along that line, the only reason for the hold-up on the
floor is OMB. Our Republican colleagues embarrassedly have to
stand up and object on account of costs. You can ship a
container anywhere into the United States for $5,000, and bring
in explosives or chemical weapons. We had one terrorist that
was picked up in Italy in a marine container, he had a phone, a
toilet, cooking and sleeping equipment, and plans and security
passes for some of the airports, false documentation to get
into any and every entry point into the United States and
everything like that. He was living in the container.
So either one can come in for $5,000, or you can get in the
contraband needed to destroy our Nation. We have spent billions
for the threats from outer space and a ballastic missile
defense system but we do not want to spend port security. We
know the cost of everything and the value of nothing.
This is an emergency situation. Let me, if the Committee
will please, read from an article in the London Times entitled,
``Secret Fleet Supplied Bombers,'' published over a month ago.
``Three years ago, nobody paid much attention to a crew
unloading a cargo from a rusting freighter tied up on the K-
side at Mubasa, Kenya. The freighter was part of bin Laden's
merchant fleet and the crew was delivering supplies by the team
of suicide bombers who weeks later would blow up the U.S.
embassies in Kenya and Tanzania. Bin Laden's covert shipping
interests were revealed at the trial of the bombers, but until
now, security services have been slow to track down how many
vessels he operates.''
Well, we have tracked it down now and he operates over 20
vessels, but he could easily hijack an oil tanker he does not
own. Some company like Chevron, Exxon, or responsible owner's
tanker could be hijacked and used as a weapon. You can operate
one with four suicidalists, or martyrs, and run it right into
the Golden Gate Bridge or the Brooklyn Bridge or any place in
the United States.
So we are into an emergency situation and we have to go to
the 50 largest ports, at least, and very quickly. There are
some 361 ports, and let me join in, in support of the very
comprehensive opening statement made by the distinguished
Chairman. He has covered the subject. We have 361 ports, we
have 50 major ports, and we have got to really move forward as
fast as we can to have a plan of security there. Currently we
don't have Federal security plans.
I think the big problem is that the whole thrust in port
operations, and I used to operate one when I was a Governor and
have been a big supporter of port facilities and economic
expansion and everything else of that kind, but they are many
splendored things. Some are owned privately. We are getting one
privately developed right now in the State of South Carolina.
Some are owned by the State itself. We have a State Ports
Authority, and some are owned by the State Ports Authority but
are leased out. For instance, the largest carrier in New York,
Maersk lines, leases major portions of the port. Also
associated in the operations of ports are the Customs Service,
the Immigration Service, the Drug Enforcement Administration,
the local police, the Coast Guard, and everything else.
To show you the lack of attention we did have, and it was
not Admiral Loy, the Commandant, but another admiral was before
our committee just 3 weeks ago and we asked who was in charge
of security at the port. He said he did not know. Under law,
the Captain of the Port, namely the Coast Guard official, is
really, under present law today, responsible for the security
of the port, but it is joined in by the local FBI, DEA, all
these other agencies that I mentioned.
And what we really need and the thrust of our bill is to
get them all together and submit as judiciously and as
expeditiously as possible a plan, to the Secretary of
Transportation, a plan for security. They are all required to
do that in the measure. There is some $1 billion overall
provided with respect to quadrupling Customs agents and so
forth at the port, buying the inspection equipment for the
screeners. To my knowledge, the best screening equipment is
down in Miami. That not only X-rays, but it scans the heat and
can pick up drugs and articles in there. They tell me down in
Georgia they are producing one that can even do better than
that.
It requires the ocean shipping manifests of cargo coming
in, but as I indicated, you can have a good check-off on an oil
tanker, but it can easily be hijacked and brought in, so there
is still that threat that has got to be taken care of, and we
need maritime protection and to establish greater controls of
foreign vessels.
I would be glad to try to respond to any questions. We have
to get this bill out, and Senator Bennett, I was just saying
our Republican colleagues embarrassingly have to object to it.
I know they are for port security, but OMB has got them putting
up a hold.
Incidentally, Senator Levin, it also includes the truck
traffic coming in and the rail security and other modes of
transport. We are trying our best to prepare the New York and
Baltimore tunnels and so forth. You are going to hear before we
leave about Amtrak and the tunnels over here in Baltimore,
particularly going into New York and Grand Central Station.
Those kinds of things have got to be cared for, or we will have
problems.
So we are trying our best to clear it, and pass the bill
through the Senate, and ours was passed out totally bipartisan,
unanimously from the committee, and I again, will be glad to
try to respond to any questions you have.
Chairman Lieberman. Thanks very much, Senator Hollings. So
the bill is on the calendar now?
Senator Hollings. Oh, yes. It has been on the floor twice
now and asked for its consideration, but there has been
objection and my best look-see at it has been at the behest of
the Office of Management and Budget on the matter of cost. Like
I said, you can get a container brought in that has 60,000
pounds and thousands and thousands of those containers come in
each day, largely unchecked.
Incidentally, you cannot find out the ownership of those
containers or the ship. I have been working on that as well.
Some are owned by the Chinese, and we have got one port out on
the West Coast operated by the Cosco, a Chinese government
controlled company. Others are operated out of Hong Kong. Some
are holding companies and everything else like that.
The biggest difficulty I am having at the moment on the
safety side of the equation at seaports is where the poor
truckers that come onto the port facilities there and they
spend 2 hours trying to get a safe container chassis, because
nobody maintains the chassis. If they get an unsafe one that
blows a tire, or has defective lights, the patrolman pulls them
over and they have lost their livelihood because they have
gotten a fine and penalties to their driver's license, and the
poor truck driver trying to work around the clock to feed his
family has lost out. So he has to come there 2 hours early on
the lot at the port itself trying to find something safe, and
we have been trying to get some kind of requirements and
everything at the port itself to check these things out. But,
ultimately, the maritime business operates under a cloak of
secrecy.
There are all kinds of problems, but the biggest is
security, and there is no idea of security. The whole idea is,
move it. If we can move it faster than New York can or some
other port can, brother, we are going to get the business.
Chairman Lieberman. So we have a very efficient but
insecure system now at ports?
Senator Hollings. Yes, sir.
Chairman Lieberman. Is there money for port security in the
$7.5 billion homeland security component of the DOD
appropriations?
Senator Hollings. The amount that is in that homeland
security is only $50 million, but that will give us a good
start to do the planning.
Chairman Lieberman. A beginning.
Senator Hollings. Yes, sir.
Chairman Lieberman. I wonder, before Senator Hollings
leaves, do any of my colleagues have a question?
Senator Levin. Thank you.
Chairman Lieberman. Senator Hollings, thanks very much. We
look forward to working with you.
Senator Hollings. I thank the Committee very, very much.
Chairman Lieberman. We will share the results of our
hearing today with you, and once again, we thank you for your
leadership.
Senator Hollings. Yes, sir.
Chairman Lieberman. Do either of my colleagues have an
opening statement, Senator Bennett or Senator Torricelli?
Senator Bennett. No thank you.
Chairman Lieberman. Let us go to the first panel, then, and
I am going to call Commander Stephen Flynn of the U.S. Coast
Guard, who is now a Senior Fellow of National Security Studies
at the Council on Foreign Relations, to go first.
In a very real sense, although I suppose we would have
eventually found our way to port security as a result of this
series of hearings, Steve Flynn's testimony before this
Committee on the subject of homeland security really educated
and alarmed us, and I think he has become something, at least
in my mind, of the Paul Revere of 21st Century port security.
So I do not want to work out whether the terrorists are coming,
but they will come unless we raise our guard at the ports.
So I am going to give you a little more time than the 5
minutes because I know you have a presentation. I think it may
frame a lot of the rest of the hearing. Go right ahead.
TESTIMONY OF STEPHEN E. FLYNN,\1\ PH.D., SENIOR FELLOW, COUNCIL
ON FOREIGN RELATIONS AND COMMANDER, U.S. COAST GUARD
Mr. Flynn. Thank you very much, Mr. Chairman. It is a real
honor to be back in front of you again today to talk about this
very, very serious issue, and I certainly commend you, sir, for
hosting these hearings, because at the end of the day, I think
we are talking about not just trying to protect the American
people from potentially another catastrophic terrorism event,
but we are also talking here, as well, about the sustainability
of global commerce, because how the terrorists do their work
may force us to respond in a way that could sacrifice the
movements of peoples and goods that are so essential for us to
continue to prosper.
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\1\ The prepared statement of Mr. Flynn with an attachment appears
in the Appendix on page 57.
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We saw that in the week immediately following September 11,
when the United States had to do what no Nation could do to it,
which was essentially to impose a blockade on its own economy.
What we did was not just ground our aircraft, but we closed
most of our major seaports and effectively sealed our borders
with Canada and Mexico, and we did that because we did not have
much confidence that we had the capacity to filter bad from
good in all those flows coming our way.
We started the engine back up again and we have done a good
scrubbing on the aviation side, but in my view, the aviation
sector is the virtual Fort Knox of security by comparison to
the other two sectors. The maritime and surface sector continue
to be extraordinarily vulnerable, and we really have not come
to grips with those issues.
I would like to talk a little bit about that, because I
think what we have to take is another lesson from the September
11 time frame, is what we saw here is not a singular event by a
single crazed individual or a network of individuals. I
believe, as I think some others in the national security field,
which I am a part, believe that what we witnessed on September
11 was really how warfare will be conducted in the 21st
Century. What this means is that at the end of the day,
regardless of what goes on in Afghanistan now, and it looks to
be a very successful campaign, is that, essentially, we are
only defeating the terrorists of the moment.
The United States may be an unrivaled power in terms of
global military and economic and cultural reach, but the fact
of the matter is, there are limits to that power. There will
always be corners of the world for terrorists to hide in or
failed states or failing states that have corners in their
rural countrysides or mega-cities.
So we have to begin with the assumption here that there
will be for the foreseeable future anti-American terrorists
with global reach; that, second, they will continue, because of
the age we are in, to have access to weapons, including
chemical and biological, that could lead to a catastrophic
terrorist attack here on U.S. soil; and we also have to
conclude that terrorists and our adversaries who cannot take us
on frontally in a conventional way because they will lose in
that enterprise, that are thinking about attacking America
asymmetrically, whatever their mode may be, will be inspired by
what happened by September 11, inspired because these folks
made it look easy, and equally inspired and more soberly,
perhaps, by the amount of particular economic disruption they
have caused as a result of that single attack.
We have to realize at the end of the day that terrorism is
not about just killing people or toppling buildings. There is
military utility to engaging in a terrorist act if you can
generate societal and economic disruption that weakens the
power of your adversary and forces it to change its behavior.
That is why, militarily, you would decide to engage in an
attack in the way that we saw on September 11, or what I worry
about, alternatively, potentially exploit or target our other
very open and vulnerable systems.
What we saw on September 11, I believe, is the exposure of
the soft underbelly of globalization. That is the very thing
that has made America so successful and prosperous, our global
reach and the networks that feed energy and labor and transport
goods and people. It is also a system that remains extremely
vulnerable.
The best way, I think, to illustrate that problem, and not
just in our ports but in the broader issue, and I think this is
the important point, I guess, I hope to leave, is that we
cannot think about our transportation sector in isolated nodes.
Unfortunately, our government is constructed that way. We look
at surface, aviation, rail, and we divide it up and we often
make these modes compete with one another for resources. The
fact is, it is a network that allows for global commerce to
move and global travel to move and it is almost interoperable
in today's world. We call that intermodal.
The best way to illustrate, though, our current security
measures, I would argue, is by taking a look at the container
problem that you have mentioned this morning, Mr. Chairman. Let
me try to illustrate it a little bit more.
Of course, we are talking about these 20-foot, 40-foot
boxes that are so ubiquitous I think so few of us pay any
attention to them. They are hurtling down the highways. They
are on rails. They are on ships. We drive by them. But we think
things so often that show up in Wal-Mart just magically appear
there from a back room. They, of course, come from all corners
of the world and they come to us via those containers. We are
talking about, in 1999, they represented about 80 percent of
all general cargo, but today, the numbers look to be well over
90 percent of general cargo that comes into the United States
transoceanic comes in a container.
[A slide presentation was shown.] \1\
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\1\ Copies of the slide presentation by Mr. Flynn entitled
``Bolstering the Maritime Weak Link,'' appears in the Appendix on page
80.
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Mr. Flynn. Now, a little over a year ago, I had written in
foreign affairs and I brought this up here as a way to
illustrate this, a scenario where I put this man's face up and
I said, if I had been a consultant to bin Laden, he had done
this little job on one of our embassies, but instead, what he
might alternatively want to do, as I suggested, is to buy a
company that had been moving ceramics in the New York area for
the last 30 years and then load that out of the port of Karachi
and the container would perhaps move on, like you see these
throughout the Asia area here, one of these container movement
operations, just from a barge that gets on one of these rusty
freighters.
And we bring it to a place like Hong Kong. This is just one
of five major terminals in the Port of Hong Kong. It is getting
almost cartoon-like as you see the numbers. We are talking
about 1.1 million container movements a month in the Port of
Hong Kong. They are going to be loaded on something like
perhaps the Virginia Maersk. This is a 6,600 TEU. If you can
imagine, that is right there 3,300 railroad cars, 3,300 18-
wheelers that are sitting not just on top there, but in the
hull of that ship. That could be loaded in under 30 hours in
Hong Kong.
And it would steam for Long Beach, perhaps, and then,
because it is going to Newark, it would probably travel in
bond. That means we would unload it right from the pier and it
would go onto a rail car, like this, and it would head into the
inland of the United States. Our Customs inspection system is
built to inspect--it is confusingly called the port of entry,
but it is basically the point where it enters the economy,
which in this case would be Newark. So it would be the Customs
inspector in Newark who would actually have responsibility to
examine the manifest and to ultimately look at the container
when it got to Newark.
Chairman Lieberman. And that would be the first American to
do so?
Mr. Flynn. That is right. It would go directly from the
ship. Customs could, if alerted, stop it, of course, in the
port of arrival, but the routine is to allow it to move
directly in and move it. And so it may travel through a place
like Chicago. I have--you do actually see passenger freight, on
that bridge there coming through is one. If I had a chemical
weapon with a GPS transponder on it, I could set off that
device. And what I would have done is, before anybody knows
what is in the container and where it is from, I would have
caused, obviously, a real catastrophic event near a major
population center where--and this is a major rail hub, of
course, near the airport, and that would be very disruptive.
Now, let us imagine we just had some of that, even on a
smaller scale, and it led America to ask the question, how do
we know what is in these boxes? And I think most people would
be rather mortified to realize that we do not really have real
command on that. There are upwards of 500,000 entities out
there that can load boxes around the world. There are 40,000
freight forwarders that load the box, seal it with a plastic
seal, typically with a number on it, and then it is off to the
races. It goes from any where in the way I just illustrated
onto a ship and is coming here. And then the verification is a
Customs function done again at the port of entry.
Now, we would then say, well, gee, if we do the inspection
at the port of entry, what happens if there was a bomb in there
that was triggered when you opened it up? If we take--and this,
by the way, is sort of a rail yard. It gives you just a sense
of what we are talking about trying to manage and sift through.
But let us take the Port of Newark, for instance, and
Admiral Larrabee will talk a little bit more directly about
this here. This is the biggest container port, of course, on
the East Coast, but this, I think, is a very important picture
for us to realize what we are talking about.
Let me step up perhaps and point out, these are the
container terminals here. This is an aerial view of Newark
International Airport. I call this an intermodal moment. In a
mile, you have container ships coming in off-loading. This is
actually one of the major rail hubs that spiders off to the
Northeast and the rest of the continent, along with the New
Jersey Turnpike, along with the Newark International Airport.
So we inspect the container in Newark and it turns out to be a
bomb. Where is the plume going to go? I think we could imagine
where it could go.
Out of that would be, I think most folks would suggest, let
us not open the box and inspect it in Newark anymore. We do not
want any uninspected boxes coming in. So, therefore, I guess we
do not have any boxes coming into Newark. Forty-million people
within 200 miles would have a very disrupted market as a
result.
So I lay that out as a sense of what we are talking about
is not just simply that we have a vulnerability and that
somebody could bring something in and cause disruption, but
really, this is again about the sustainability of global
commerce. How we respond and are set up to respond to this
threat could, in fact, itself have real ripple effects.
Out of those scenarios, I think there are three key things
that we have to have in regard to the hearing today. First is
that seaports cannot be separated from the international
transport system to which they belong. Ports are really just,
in essence, nodes in a network where cargo is loaded or
unloaded from one mode, a ship, into other modes--trucks,
trains, and on occasion, planes. Therefore, seaport security
must always be pursued against the context of transportation
security, and this has been very difficult because we have been
taking this rather balloon effect approach to it.
Second, the port security initiatives must be harmonized
within a regional and international context. One of the major
ports for the Northeast is Montreal and Halifax. They bring in
about a million containers between the two of them, half of
which come into the United States. If you only regulated ports
inside the United States, you may push some of these problems
offshore into Canada, Bahamas, Vancouver, or even into Mexican
ports that could come online here. So we have to be talking
about this network not just within the U.S. domestic context,
but also overseas.
Finally, since U.S. ports themselves are perhaps America's
most critical infrastructure, they should not be viewed as the
primary line of defense in an effort to protect the U.S.
homeland. They are essentially the last line of defense.
Now, the fact that seaport security must be considered
within the broader transportation logistic context that
includes ports outside U.S. jurisdictions has obvious
implications for how the U.S. Government is organized to
safeguard them. First, I would argue we have three major
structural impediments.
One is that the agencies with responsibilities for a
specific transportation mode rarely communicate with their
counterparts in the other modes. In fact, there is a pervasive
culture of competition among the modes, often reinforced by the
Congressional advocates, I think most rather dramatically
illustrated just this last couple of weeks, when the House has
decided to bankroll additional airport security by taking $60
million out of the supplemental monies promised the U.S. Coast
Guard to pay for port security. It's a little bit, from my
view, here of the classic horse leaving the barn and closing
the gate afterwards on that one.
The security challenge associated with seaports is not just
one posed by conveyances, ships, but the operators, passengers,
and cargoes on those ships. So we have a complicated problem of
we have to get a handle on people, we have got to get a handle
on conveyances, and we have got to get a handle on goods. But
people is an issue of consular affairs. That is State and INS.
Goods are U.S. Customs, USDA, and FDA. Ships and the non-land
side of the ports are Coast Guard, but the land side is a
smorgasbord, depending on what port you are here, of local,
State, and private entities. And then there are the trucks.
About 10,000 trucks come into the Port of Newark each day,
entirely unregulated activity.
And then, finally, since the jurisdiction of most of these
agencies runs out at the water's edge, they tend to approach
the regulatory enforcement issue with some strictly domestic
contest or framework, rather, than an international one, and
the international security community pays no attention to this
problem.
So that is the state of affairs we are in, in a very quick
framework, as I think many of the witnesses can fill in the
blanks. But I think the key here, I hope that this illustration
provided highlights the importance of not thinking that we can
achieve homeland security in this regard at home. We have to be
looking at this as a network and for what it is, which is one
that moves overseas.
Our ultimate objective should be, go to the point of
origin, and how we get to this is, I think, first, with some
standards about how one gets to load a container, who gets to
load it, and the process that is done. It has to be done in a
sanitized way. Standards have to be identified in that and
pushed through, whether it is the International Maritime
Organization or the World Customs Organization, to say, if you
stuff a box and you want to be off to the races to come to a
port in the United States or in any of the other large ports in
the world, you have to meet some basic requirements, and if you
cannot do it there and we cannot feel comfortable with that,
you have to restuff the box at a place that we feel comfortable
that we know what is there and that there is a trusted partner
who is doing that loading.
Second, when it is loaded, we want you to track it. We want
you to know where it is. This is sort of what I call in-transit
visibility and accountability, using technologies like GPS and
electronic transponders and so forth. As soon as it leaves the
factory, it goes from there to the terminal and we can account
for it every step of the way.
There are two purposes for in-transit accountability and
visibility. One is ideally to deter it. There is not much time
for a bad person to bring something in. But most importantly,
as well, is that when you have intelligence that there may be a
compromise, which is perhaps the only way we are going to find,
in many instances, a problem, it becomes actionable
intelligence, that you can pinpoint immediately where the
problem is and go in and, working with the carrier, you will be
able to identify and figure out where the best way to manage
that compromise might be.
Then the terminal operator itself would have to have
accountability of the box. That happens as a matter of routine
in most places. And then the ship mills where it is, and then
the same on the receiving end when it is loaded off, and in the
case of in bond shipment, again at trails along the way.
Then we have this complete control, sanitized control, and
if that is done with the technologies and the cooperation--and
the final piece is sharing data about who and what you are up
front to allow agencies to assess that against any watch list
they may have--if you do those three things, security up front,
in-transit visibility and accountability, and the sharing of
data, you get the easy trade lane. We are going to move you
quickly, which makes sense from a security standpoint, because
goods that rest often are most vulnerable to crime. So you
actually have a security incentive, not only a market one, to
accelerate if you can be confident up front.
That is why I am confident this is going to be workable if
we think in these terms, because we can really--it has always
been a false proposition in my view, openness versus control.
Without control, the whole system is in jeopardy. That is what
we saw on September 11. With smart controls, there actually is
a national security rationale to fix things that have been
broken for a long time, agencies that have paperwork
requirements that make no sense or that are duplicative and
redundant, bottlenecks in infrastructure that should not be
there. We need to fix that from a security standpoint, and
that, I think, parades an opening for this to be dealt with,
not just here at home, but also overseas.
Thank you very much, Mr. Chairman.
Chairman Lieberman. Dr. Flynn, thank you for an excellent
opening statement. The country is fortunate that you have had
the practical and academic experience you have had and you have
brought them together at a time when, post-September 11, we
need that very much, so I look forward to questioning you.
I am pleased to say Senator Collins is sitting today as the
Ranking Republican Member of the Committee, and I think it is
appropriate that I ask her now if she would like to make an
opening statement before we go on to the other witnesses.
OPENING STATEMENT OF SENATOR COLLINS
Senator Collins. Thank you very much, Mr. Chairman. I
apologize for being a few minutes late for the hearing.
I want to thank you for convening this important hearing.
Coming from the State of Maine, as I do, the vulnerability of
our ports is of particular interest and importance. Our
seaports are as important in the war against terrorism as the
safety of the food we eat and the security of the planes we fly
in. With more than 95 percent of our imports flowing through
our ports and with millions of passengers and maritime
containers passing through them with only limited inspections,
we must have a far better security system in place than we do
now.
Correspondence that I recently received from Captain
Jeffrey Monroe, the Director of Ports and Transportation for
Portland, Maine, makes the need for better port security very
clear. Captain Monroe, in commenting on the security of our
ports, put it bluntly. ``Our local, State, and Federal agencies
were, in many cases, ill prepared for September 11 and the
coordination of information and effort was almost
nonexistent,'' he wrote. Captain Monroe's letter includes a
series of specific recommendations and I would ask that this
correspondence be made part of the record.\1\
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\1\ The letter from Captain Monroe with an attachment submitted by
Senator Collins appears in the Appendix on page 142.
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Chairman Lieberman. Without objection.
Senator Collins. Since September 11, the Coast Guard has
expanded its patrols in Portland's harbor and has increased its
surveillance of ships entering the port. But given the volume
and the lack of personnel, this is a daunting and exhausting
task. We must improve coordination between Federal, State, and
local agencies, as well as the private sector. We must have
highly trained and a sufficient number of employees. We must
have a clear chain of accountability to achieve port security.
It is evident that we have a great deal to do and I am very
pleased that the Chairman has assembled such a distinguished
list of witnesses to assist us in this goal today. Thank you,
Mr. Chairman.
Chairman Lieberman. Thanks, Senator Collins. I really look
forward to working with you on this. I think this is an area
where the Committee together can make an important contribution
and I thank you for that excellent opening statement.
The next witness is Amanda DeBusk, now with Miller and
Chevalier, former Assistant Secretary of Commerce, former
Commissioner, Interagency Commission on Crime and Security in
U.S. Seaports. Thanks so much for being here.
TESTIMONY OF F. AMANDA DeBUSK,\1\ MILLER AND CHEVALIER, FORMER
ASSISTANT SECRETARY OF THE COMMERCE DEPARTMENT AND FORMER
COMMISSIONER, INTERAGENCY COMMISSION ON CRIME AND SECURITY IN
U.S. SEAPORTS
Ms. DeBusk. Thank you very much. I am honored to be here
today. I am speaking to you as a former Commissioner on the
Interagency Commission on Crime and Security in U.S. Seaports.
President Clinton established the Commission by executive order
on April 27, 1999. Senator Bob Graham was particularly
instrumental in the Commission's establishment. I served on the
Commission as the Commerce Department representative in my
capacity as Assistant Secretary for Export Enforcement. The
Commission issued a report in August 2000 with 20 findings and
recommendations. I would like to highlight those that are most
important for this Committee post-September 11.
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\1\ The prepared statement of Ms. DeBusk appears in the Appendix on
page 93.
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Let me provide some background. One of the underlying
concerns was how wide open our seaports are compared to our
airports. In most cases, there is free access to the seaports.
The Commission found that significant criminal activity was
taking place at most of the 12 seaports that we surveyed. At
many seaports, it is legal to carry firearms, so criminals with
arms may have access to terminals where passengers embark for
cruises.
Concerning cargo, because of misreporting and lack of
reporting, no one knows in a timely fashion, if ever, what is
in those containers at our seaports. One of the cases my former
office investigated involved a riot control vehicle that was
exported to China as a fire truck. The vehicle, it was a huge
thing. It resembled a tank. It had a turret on top for spraying
pepper gas all around. It was all boxed up in a container and
at the time of export, no one knew what was inside the
container and so it was exported as a fire truck.
The Commission approached the crime and security problem
with the possibility of terrorist activity associated with the
new millennium. Thankfully, nothing happened.
At that time, the FBI considered the threat of terrorism
directed at any U.S. seaport to be low. However, even though
the threat was low, the FBI considered that our vulnerability
to attack was high. The Commission found that the state of
security at seaports generally ranged from poor to fair, with a
few exceptions where security was good.
We looked at fundamental activities for combatting
terrorism, protective measures, crisis management, and
consequence management. These activities require comprehensive
interagency coordination. They involve law enforcement,
intelligence agencies, emergency response agencies, and if
needed, the military. Outside the Federal context, coordination
is needed with the State and local authorities and the private
sector.
Today, I would like to highlight recommendations in four
areas relevant to this Committee: Enhanced interagency
coordination, physical security at the ports, better and more
timely information about cargo transiting the ports, and
increased use of technology.
First, we need better interagency coordination. There are
361 seaports. Most ports are chartered by States or local
government. Some terminals are operated by public port
authorities. Others are private. There is no central Federal
authority. There are at least 15 Federal agencies with
jurisdiction at the seaports. In addition, there are State and
local agencies and the private sector. Every single group is
important for combatting terrorism and has something to
contribute, but coordinating these groups is a monumental
undertaking. Perhaps a Department of National Homeland Security
could play a leadership role in this coordination.
The Commission found that there needed to be a
comprehensive and definitive statement of Federal
responsibility. The Federal Government needs to conduct threat
assessments to determine where the threat is greatest and where
we urgently need preventive measures. The Federal Government
should strengthen coordination to more effectively address
terrorism. It should work with all stakeholders. Key
information available to the Federal Government should be
disseminated to others, as needed.
Let me provide an example of where better coordination
would be useful. The FBI has excellent regional
counterterrorism task forces that consist of Federal, State,
and local agencies. However, at the time of our study, these
groups did not focus on the seaports. They should do so.
S. 1214, an amendment to the Merchant Marine Act, has some
good proposals on establishing local port security committees.
Second, the Commission found that we need better physical
security at the seaports for both vehicles and people. At many
ports, access is virtually uncontrolled. At one of the ports I
visited, we saw a line of vehicles that was parked right beside
the vessel. We were told that these were the dock workers'
vehicles that were parked there for convenience. At the time,
and as Senator Hollings alluded to, we were trying to figure
out if this is someplace where drugs could be hidden for things
coming off of vehicles, or coming out of containers and being
stashed into the vehicles. But now what we have to do is think
about the possibility that these vehicles lined up right beside
the vessels might contain a car bomb or even a ``dirty nuclear
weapon'' that could be hidden inside them.
Many ports do not have ID cards for personnel. I observed
all sorts of people that were milling around at dockside. There
was no way we could tell who should be there and who should
not. The Commission found that at one point, pedestrians could
freely walk through the purported access control points without
even being questioned. We did not even want to contemplate a
group of terrorists taking over a cruise ship, but it is a
possibility.
Training of security personnel is also a problem. Many
seaports use private security personnel who lack crime
prevention and enforcement training.
The Commission recommended developing regulations to create
a secure area where passengers board and disembark vessels. We
also recommended proceeding with an INS project to manage risk
with respect to both passengers and crew. We recommended
creating shared dockside inspection facilities so that all
relevant agencies have ready access to conduct inspections. The
Commission called for the establishment of minimum guidelines
for physical security, such as fences, lights, gates,
restrictions on vehicle access, restrictions on carrying
firearms, the establishment of a credentialing process so you
would know who is supposed to be there, considering criminal
background checks for those with access to sensitive areas of
the port, and development of a private security officer
certification program. S. 1214 moves in the direction of these
recommendations, but it does so through voluntary security
guidance. The Committee should consider making some of those
requirements mandatory.
Third, we need better information about cargo transiting
the ports. On the import side, information is often vague and
import entries may be filed 5 days after arrival. On the export
side, information tends to be very general, with descriptions
like ``general merchandise'' that really do not tell you
anything, and is required 10 days after export. One of the
concerns with providing earlier and more detailed information
is that it would allow specific cargo to be targeted for theft
by those with access to the information, and this concern needs
to be addressed.
Fourth, we need better technology at the seaports. Better
technology is needed for a whole variety of applications, which
include X-raying containers, using computer systems to target
cargo associated with high-terrorist risk, collecting data on
crimes at seaports, and providing real-time information for
tracking high-risk cargo and personnel.
In sum, the Commission said, ``A terrorist act involving
chemical, biological, radiological, or nuclear weapons at one
of these seaports could result in extensive loss of lives,
property, and business, affect the operations of harbors and
the transportation infrastructure, including bridges,
railroads, and highways, and cause extensive environmental
damage.'' We need to take action now to reduce the risk of
future catastrophes.
Thank you for inviting me here today to testify on this
important subject.
Chairman Lieberman. Thank you, Ms. DeBusk, for excellent
testimony, which, unfortunately, continues to paint a harrowing
picture as I listen to it.
Rob Quartel is our next witness. He is the CEO and Chairman
of FreightDesk Technologies and a former member of the U.S.
Federal Maritime Commission. Thanks for being here.
TESTIMONY OF ROB QUARTEL,\1\ CHAIRMAN AND CHIEF EXECUTIVE
OFFICER, FREIGHTDESK TECHNOLOGIES AND FORMER MEMBER, U.S.
FEDERAL MARITIME COMMISSION
Mr. Quartel. Thank you, Senator. The last time I think I
saw you up close was about 6 or 8 months ago at Sutton Place
Gourmet, and I cannot remember what you were buying----
[Laughter.]
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\1\ The prepared statement of Mr. Quartel with attachments appears
in the Appendix on page 98.
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But I would observe that probably half of what you and I
bought came in on a container. The meat probably came from
Australia. The flowers and other vegetables probably came from
Latin America, and so on and so forth, so this is a problem
that is right here, wherever you are, every day. You are
standing there in the middle of the system. It is probably a
good thing you cannot remember what I was buying.
Chairman Lieberman. I certainly cannot remember what I was
buying.
Mr. Quartel. I know that what I was buying was something
fattening.
Chairman Lieberman. Senator Collins and I were saying, I
wish I could say it was all American, but I am sure it was not.
[Laughter.]
Mr. Quartel. But that is the beauty of the system----
Chairman Lieberman. Yes.
Mr. Quartel [continuing]. The fact that we are able to
access all these markets worldwide, whether they are food,
whether they are the subcomponents of manufacturing. That is
really what makes us efficient as a country and contributes to
the national economy.
I would like to thank you for the invitation. I have got a
quick slide show, and because of the time, what I am going to
do is kind of truncate some of this and really kind of talk to
the slides.
But I think based on Commander Flynn's and Ms. DeBusk's
statements, this is really a scary issue and I would like to
make one point of policy that I think the Committee ought to
adopt, which is very straightforward. Every container destined
to either land in or go through the United States, and the last
point is really important, in my mind should be treated as a
potential weapon of mass destruction, every ship that carries
it as a delivery device, and every port as a potential target,
and that suggests several things.
First, it suggests you cannot let a terrorist container get
into the port. The port is the target. You saw the map where
you had everything within a mile there in the Port of Newark,
which, by the way, is what makes that a very efficient port,
because you can switch from mode to mode to mode, whatever
happens to be the most efficient way to do it.
It also suggests you cannot let it on a ship, and so one of
the concepts I would like to talk to today is the notion of
pushing the border back electronically. Ms. DeBusk talked about
the fact that we collect a lot of data. Every part of the
process is documented. This slide I am going to talk to in a
minute shows the complexity of it, but you need to bear in mind
that everything in the process is documented.
From the time it is purchased, a buyer or seller
transaction creates a purchase order that says what it is, how
many you want, the weights, eventually all the rest of that, to
the trucker who picks it up, to the train who moves it, to the
ship that carries it, to the train that delivers it, or truck
in the United States, all of that is documented in a series of
documents. What does not happen, as Ms. DeBusk said, is that it
does not all get there to Customs or anyone else early. It gets
there strung out across the process.
[A slide presentation was shown.] \1\
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\1\ Copies of the slide presentation appears in the Appendix on
page 107.
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Mr. Quartel. This first slide really is intended to talk to
the issue of complexity. The international trade process is
hugely complex. It is not like domestic trade, which goes from
point to point. You have in every single trade 20 to 25
involved parties, whether they are the buyer, the seller, the
transportation modes, all the rest of those. You have as many
as 30 to 40 documents. You have a couple of hundred data
elements. The messages all arrive in a variety of different
kinds of platforms, some electronic, some fax, some by E-mail.
But it is a tremendously complex process.
Admiral Loy has pioneered a concept called Maritime Domain
Awareness, and I think that is very relevant to this port issue
here.
By the way, I also would ascribe to what Commander Flynn
said earlier. I view the port as really too late. In my mind,
the port is the least of the problems. Yes, you have to protect
the port. Yes, you have to protect the physical integrity of
it. Yes, you have to have all the security measures. The real
problem is at the beginning of the cargo. That is where you
have to interdict it.
I would take Admiral Loy's thought and actually press it a
little further. I really suggest that there are five domains in
international trade. The first is the origin of the cargo. In
manufacturing today, you might have a company that does virtual
manufacturing in Asia, where they will have 20 different
factories that are all subcomponents of the process. It starts
in one. It moves by truck to another. It moves by truck to
another, by train to another, and another to another to
another, literally that many, and then is assembled in one
place and forwarded to the United States. So that is part of
the process that includes inland transportation, all of the
parties engaged in manufacturing.
The second, at the port of loading. And on this chart, by
the way, one of the things I have done is just very quickly,
and it is not necessarily 100 percent accurate, I did it on a
plane in the middle of the night the other night, is to talk to
some of the agencies on the issue of where some of their
authorities might lie in the process, U.S. Government agencies,
and also, as has been said earlier, these authorities tend to
be sort of stovepiped. They are aimed at a specific part of the
process. That is really all they can do under the law.
The second part of it is in transit. There are a number of
protective things you need to do there.
One of the things from end to end, of course, is
visibility. Companies are going to that, to tracking the cargo,
though tracking is not nearly so pervasive as we seem to think
it is, based on when we go to the web, we seem to know where
everything is. One of the reasons is that much of what we think
of as being tracked is in FedEx packages, typically air
freight, which is different than ocean and land, which are in
containers.
The fourth is the port of discharge, which is really, I
think, the point of the hearing today.
And then finally, multiple destinations.
If you want to figure out what is happening to a cargo, you
really need to know what it is, where it came from, where it is
going to, who has touched it, what did they do with it, what
did it cost, who paid for it, and that is all the kind of data
that is collected in a system.
The information process itself provides an attraction
because, if you work at it, you can hide the transaction. This
really kind of talks to the issue of how cargo moves. Forty or
more days before it gets here and just in time, you may have a
buyer-seller transaction. They generate a letter of instruction
and a commercial invoice.
On this slide, the red documents are reported to Customs.
It goes to a warehouse. It finally gets to a ship and the ship
creates a master bill of lading. A single container might
contain as many as 10 or 20 different cargoes. It may be 10
containers which are the same shipments, they are all the same
thing to the same manufacturer. Containers are not just packed
by one person. They may be packed by multiple people. You have
people at each end who consolidate what is in a container. You
have people at the other end who deconsolidate it and send it
off in a bunch of different directions.
Carriers generate documents. Throughout the process today,
you typically have an intermediary, a freight forwarder or a
customs broker or a third-party logistics provider. That, by
the way, is one place that I think in the future we need to
focus some of our thinking about how you manage the process for
the government, because they are the ones who typically handle
the paperwork as well as the financial documentation. You have
additional carrier reporting at the end. And then, finally, you
have another set of documents generated.
What I would like to suggest to you is today, we tend to
think of the border at the bottom there as being the physical
border where the ship comes in. The concept I would ask the
Committee to consider is to push that border to the top of the
page between the warehouse and the port of embarkation and to
do that electronically.
The next two slides--this is a sample of the kinds of data
that comes out of the documents that are generated in a typical
commercial transaction. By the way, when a ship lands in the
United States, it drops off 40,000 documents.
Chairman Lieberman. Forty thousand?
Mr. Quartel. Documents for 6,000 containers. So that is my
10 to 20 to 30 documents per container.
Chairman Lieberman. And who gets those documents?
Mr. Quartel. Customs gets some of them. The shippers get
some of them. Letters of instruction and financial letters go
off to the people who handle that. So there is a lot of data.
That is one of my key points to you. This is not a new process.
Part of what we have to do and the opportunity here is to
manage the data process, and we can talk to that.
If you go across this, you can get everything I am talking
about. You can find out--and this is the other part of it, is
another 60 different elements. You could find out who paid for
it, what it is, what it weighed, where it was coming from, how
it went, by truck on the way, on the way back, the ship. If you
go to the ship, you can actually tell what was going with it
side by side.
Now, the process I would like to suggest to you--I am going
to go actually one slide further and then come back. The
process I would like to throw at you for your consideration is
a kind of profiling process. You create a commercial database
from the kind of data which is currently provided by the
commercial sector, some of which goes to the government and
some of which does not, and some of which should not go to the
government because it is essentially competitive data. But you
can create a commercial database.
We already have a database and bases of government data.
The Coast Guard, for example, has what is called a fusion
center, where they fuse conceptually data from a variety of
different kinds of law enforcement sources. Right now, that
data is not always compared against each other and it is
certainly not compared when a cargo originates.
What I would suggest to you is that you create a new
process, perhaps driven by Customs, in which you collect the
commercial data, you collect the law enforcement data, and you
run it through a decision algorithm which basically says, well,
what is wrong with this? Is it--and I can show you back here
two slides--is the cargo something that is said to be coming
from a place where it is not manufactured? Is it steel coming
from Romania, where they do not have a steel factory? Is it
coming from Afghanistan but going to the heart of New York? Is
it something going by a nuclear power plant?
If you go through the documents, and this is just kind of
an example of it, you can actually see where you can find these
anomalies, and while I am not an expert in the mathematical
profiling aspect, I do know a lot about the data management
process. But there are people who are expert in profiling and
we are dealing with some of those and I have been working with
the National Defense University, which looked through some of
this, who create the kinds of algorithms which can help you
decide, and we use some of this today with drug enforcement,
but not to this extent.
Chairman Lieberman. Mr. Quartel, excuse me, but you have
gone beyond the 5 minutes now----
Mr. Quartel. I am sorry. I am going to finish right now.
Chairman Lieberman [continuing]. So if you can begin to
think about wrapping up.
Mr. Quartel. I am done, virtually.
Chairman Lieberman. That was good timing.
Mr. Quartel. Thank you.
Chairman Lieberman. Thanks very much for very thoughtful
and helpful testimony, which we will look forward to
questioning you on.
Our final witness on this panel is Richard Larrabee, who is
a retired Rear Admiral of the U.S. Coast Guard and now Director
of the Port Commerce Department of the Port Authority of New
York and New Jersey, so a person with great experience and
right in the middle of the topic that we are discussing today.
Thanks so much for being here.
TESTIMONY OF REAR ADMIRAL RICHARD M. LARRABEE,\1\ RET.,
DIRECTOR, PORT COMMERCE DEPARTMENT, THE PORT AUTHORITY OF NEW
YORK AND NEW JERSEY
Rear Admiral Larrabee. Mr. Chairman, thank you. Members of
the Committee, good morning. Thank you for the opportunity to
testify this morning.
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\1\ The prepared statement of Rear Admiral Larrabee appears in the
Appendix on page 114.
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I have provided written testimony and would ask that that
would be placed in the record.
Chairman Lieberman. It will.
Rear Admiral Larrabee. What I would like to do is just take
a couple of minutes in the interest of time to touch on some of
the things that the prior testimony has talked about, but do it
from a ports perspective.
Mr. Chairman, as you said before, the ports of this country
are a vital intermodal link in our transportation system and a
large part of our economy. The Port of New York handled about
three million containers last year, about 560,000 automobiles,
and over 30 billion gallons of petroleum products, the largest
petroleum port in the United States. That system, as the
Chairman suggested, is based on speed, reliability, and cost,
and we are living in a ``just in time'' society where the
movement of those goods are critical.
On the morning of September 11, the Port of New York and
New Jersey was closed. It was closed by the Coast Guard captain
of the port. Other law enforcement agencies were involved in
that decision, but it was done in a very orderly way. There was
a tendency in the port from one perspective to keep the port
closed because of the fear of the threat of terrorism. On the
other hand, the pressures that Commander Flynn talked about of
keeping commerce moving were obviously part of that discussion.
Because petroleum resources were going low, because of a
shortage of other supplies that would normally come through the
port, we felt a great deal of pressure to open the port up as
quickly as possible, and on the morning of Thursday the 13th,
we reopened the port with a large number of security measures
in place--all ships boarded by the Coast Guard at sea, all
manifests, both cargo and crew manifests, checked, tug escorts
into the port, and an extensive cargo inspection program by
both Customs and Coast Guard and other law enforcement
agencies, a heightened level of activity in terms of spot
checks and patrols in the port.
That level of activity, along with an extensive effort by
the Coast Guard to protect vital assets of the Port of New York
and New Jersey, certainly was an extraordinary effort on the
part of all of those Federal agencies, but it simply was not
sustainable, and today in the Port of New York, we are seeing
far fewer resources doing those kinds of things when today the
level of our security might have to be higher than it was
perhaps the day after September 11.
I want to talk just briefly about this notion of who is in
charge, because we certainly heard Senator Hollings talk about
that. I think we have other models that we can look at. In my
own experience, I can tell you that in the wake of Exxon
Valdez, the U.S. Senate and the administration at the time
certainly supported efforts to improve that system. The end
result was OPA 1990, and since that time 10 years ago, we have
seen a dramatic decrease in not only the number of spills and
the size of spills, but an increase in our ability to respond.
One of the key issues in that legislation was answering the
question: Who is in charge?
As it was suggested this morning, I believe the Coast Guard
Captain of the Port currently has the jurisdiction to do a
number of things that we have heard about. Perhaps his position
needs to be strengthened, but I believe the Coast Guard is in
the right position to manage both the prevention and the
response to an incident like the one we are talking about this
morning.
We have heard an awful lot about this notion that perhaps
the greatest threat in one of our ports is not a large tanker
hitting one of our bridges but the entry of a weapon of mass
destruction using our very efficient container movement system,
and there is no question about that.
I believe that last week, Admiral Loy, the Commandant of
the Coast Guard, addressed the Assembly of the International
Maritime Organization and proposed that a working group be
established to look at port security and terrorism,
specifically at the issues of cargo visibility and
accountability. We certainly support the Coast Guard's proposal
and believe that the IMO is one of those appropriate forums to
address the issues of international concern, and I think there
certainly are parallels in this area, too.
The shipment of hazardous materials these days is a process
that has seen dramatic improvements over the last 20 to 30
years. Today, the kinds of accountability and responsibility of
moving those kinds of materials certainly gives us
opportunities to look at parallels when it comes to moving
other cargoes.
We have heard a little bit this morning about this notion
that communications is the foundation of coordination, and
certainly there is a real need to share intelligence and threat
assessments among the Federal, State, and local agencies, and I
would have to say to you this morning that as Director of the
Port of New York and New Jersey, I am not in a very good
position today to tell you whether our measures that are
underway right now are adequate for the threat that is out
there. We simply are still not sharing the kind of threat
assessments that I think need to be in place.
Chairman Lieberman. That is a very important statement.
Forgive me for interrupting, but I hope we all listened to it.
That is an unacceptable situation. You just feel you are not
getting the intelligence information you need?
Rear Admiral Larrabee. As Senator Hollings said, this is a
system that really is being managed day to day by the private
industry, and it is not only the Port Authority, but more
importantly, terminal operators and shipping lines which need
to be brought into this circle and be made more aware of what
the threats are and what they can be doing in a practical way.
I think there is a need for standards, and Senator Hollings
talked about that this morning. My Port Authority Board is
asking me what I should be doing and my answer to them is--I am
waiting for Federal legislation. We desperately need to pass
the Hollings bill in the very near future and I would ask you
to support Senator Hollings' efforts.
Just to conclude my statement, this is a system that, as
you have heard this morning, is the responsibility of an awful
lot of people, whether it is the paperwork or the number of
agencies involved or the number of hands that move this
particular cargo. It simply is a system that requires the
diligence and responsibility of an awful lot of people. We
believe that there are ways to make the system more secure. We
believe that we have to do that.
We are very appreciative of the kind of support that we
have gotten from agencies like the Coast Guard, the FBI, and
Customs, and we are very hopeful that you are going to be able
to give them the kind of resources that they are going to need
to do their job.
Finally, I want to thank Senator Torricelli and others for
supporting us in the local New York area. Supplemental
legislation has been passed, and I know, for one, we are going
to be getting some extra resources in the port in order to
improve our security level. Thank you.
Chairman Lieberman. Thanks, Rear Admiral, for very helpful
testimony from a particularly important perspective.
Let me focus in on this question of coordination. It is a
fascinating and, in many ways, troubling picture, even from an
organizational point of view. And again, as I said in my
opening statement, when I got more into this, I was surprised
to be reminded that there is no Federal coordinating role here,
that the ports are State and locally overseen, that there is a
lot of private interests involved. Ports in Connecticut, for
instance, most of them are owned privately, the harbor
facilities.
Give me a sense of what happens at a typical port, either
privately owned, and/or locally regulated. Are there Federal
agencies present at the major ports? Are they coordinating now?
Maybe, Rear Admiral Larrabee, you could give me a picture of
what is happening at a typical port of entry.
Rear Admiral Larrabee. Well, I do not think there is any
question that there is a great deal more coordination today
than there was on September 10.
Chairman Lieberman. Yes.
Rear Admiral Larrabee. The boardings that I talked about
that the Coast Guard is conducting, vessels are being boarded
on a priority basis based on an analysis of that vessel and
what sort of threat it might pose to the port 96 hours before
the vessel arrives, and my understanding is that both Customs
and the Coast Guard and INS are looking at cargo manifests and
crew manifests, ports of destination, and making decisions
about whether or not to board and what to look for. So that is
there.
Chairman Lieberman. Is that the universe we are talking
about, Customs, Coast Guard, and INS, of Federal presence at
the ports?
Rear Admiral Larrabee. I think, for the most part, that
covers all of the issues that we have talked about this
morning.
Chairman Lieberman. Let me then ask what can be done to
either facilitate better communications between the front-line
agencies in securing our ports, and more broadly, whether you
think there is a need for active Congressional involvement here
through legislation to create some kind of new overarching
Federal organization to be concerned about the ports and to
guarantee coordination. Ms. DeBusk.
Ms. DeBusk. Yes. First to answer your question, I do think
there is a very strong need to have an umbrella to coordinate
all this, perhaps through homeland defense.
Let me just sort of give you a little vignette of what
happens there. You have 15 Federal agencies with some sort of
authority at the port, and----
Chairman Lieberman. Fifteen, well beyond the three I
mentioned.
Ms. DeBusk. Absolutely.
Chairman Lieberman. Just name a few more.
Ms. DeBusk. You have the Commerce Department and you have
the Agriculture Department, you have the Food and Drug
Administration, you have all these, and let me just take a few
of the older ones that you do not necessarily think about, like
EPA, for instance.
Let us just take the Agriculture Department. They would
perhaps know how to be on the lookout for contaminated food
coming in. Let us just think about a terrorist who decides to
sprinkle a little cyanide in all the Cheerios, right. They
would know how to be on the lookout for that, but that is not
the expertise of the Coast Guard.
In my former office, Export Enforcement, we knew how to
target, to look for things that might be used for weapons of
mass destruction or chemical or biological agents. But again,
that is not the job of the Coast Guard. The Customs folks, they
know how to look very well for the drugs that are coming in or
going out. That is one of their specialties, and obviously the
drug trade supports terrorism.
But again, no one is bringing all these pieces of the
puzzle together and I think there is a strong need for perhaps
the Office of Homeland Defense or some other body to be able to
do that.
Chairman Lieberman. Dr. Flynn, I know that you and Mr.
Quartel are asking us to consider pushing the border back, a
very interesting idea which I know the Committee will want to
get to in a few moments. But what about the border where it is,
even if you push it back? What do you suggest from your
experience and work as to what we should do, if anything, to
facilitate better communications and coordination among the 15
Federal agencies and the State and locals and privates involved
to guarantee a more secure and efficient situation?
Mr. Flynn. Let me say, Senator, that while I am talking
about pushing the border back, that we think about this problem
as one that starts much farther away than our border. I am not
calling for the end of the border.
Chairman Lieberman. Right.
Mr. Flynn. That is, it is really a series of concentric
circles that to the best of our ability, we put the most
intensity at the origin point and then the number of
inspections narrows down as we have to get to our own entry
because of the volume and velocity issue that we face here.
What is clear is that we need a general pool of data, and
there was an effort that Customs was involved with in the
former administration to create what was called the
International Trade Data System that would bring all the kinds
of things that Mr. Quartel outlined there all in one pool and
allow the agencies to shop within that data.
Most of what we find is things also, as Mr. Quartel talked
about here, is this anomaly detection, the things that do not
make sense, a high-value good going on a slow boat to China
originating from a place, as he said, that does not make steel.
And so what you need there is this data up front and you need
it in a pool, and ideally you also would be housing people
together.
We have models for this in the drug world. We have the
EPICs, the El Paso Intelligence Center. We have similar efforts
in Jonestown and so forth here. But what we have learned here
is that just to try to take that small segment of high-risk
drugs, we really have to now think about all general cargo as
at risk, as it always has been, and it is not just for
narcotics, of course. Now it is human trafficking, but
especially this concern with weapons of mass destruction. So
there are various useful models of how we bring data and infuse
it that is brought out of the drug world. We just need to
expand, in part, upon that.
But we rushed with some legislation here right after
September 11 to put more primary inspectors. You look at
everything, you see nothing in this business, and we all know
this from those people with the glazed eyes who look at the X-
ray machines as the luggage goes by. That is not the way to do
it. You have to be smarter.
And so the challenge here is analysts, well-trained people
who know their segments and markets--and this issue of
information sharing is huge. I am almost confident, for
instance, that Rear Admiral Larrabee has not been given a
clearance and it would probably take him about a year or two,
perhaps, to get a security clearance. He was a former flag
officer in the U.S. Coast Guard that has been doing this for
years and we cannot find a way to clear him into a system to
share intelligence that would be useful for him as a decision
maker and a manager at work here. These stovepipes are huge and
have to be addressed.
Chairman Lieberman. Well said. My time is up. Do you have a
clearance?
Rear Admiral Larrabee. No, sir. I had a clearance, but I
have not gotten it back yet.
Chairman Lieberman. Yes. Senator Collins.
Senator Collins. Thank you, Mr. Chairman.
Commander Flynn, I understand from my staff that through
discussions that they have had with Rear Admiral Naccara that
you have been involved in developing a Northern New England
Border security project. Could you tell me about that project
and whether you think it would help solve some of the
coordination and communication problems that we have heard
about today?
Mr. Flynn. Sure. This is actually spawned out of the State
of New Hampshire, and Governor Jeanne Shaheen actually took a
real leadership role and interest on this.
This is obviously a real concern by most of the Northern
States, and Senator Levin was here as well, about the hardened
border and what that would mean. In the New England context and
Northern New England context, this is about the Port of
Montreal and Halifax, as well. About half the containers coming
to Halifax and Montreal come into the United States. So getting
a handle on the cross-border trade is central without a kind of
hardened, sealed border approach.
The notion here is that I was very excited to hear in terms
of this interest in New England, and I think it is something
that we need as a model overall. We have to do some
experimentation, and I think the way this is done is some
delegation by the headquarters here to regional commanders,
such as Rear Admiral Naccara and the Regional Director of
Customs and let them work with the governors and private
sector, trusted partners, and with their counterparts across
the border in the provinces and the ports in Halifax and begin
to do this process of vetting legitimate players and finding
ways to expedite their movements, applying some of these
technologies.
Ideally, we will find some companies up there who will want
to play. There will be some resources found to test some
technologies and you bring together INS, Coast Guard, and the
other players, FDA and so forth, to try to get a handle on
this.
So what there seems to be, I know she has contacted
Governor King in Maine and Governor Dean in Vermont and there
is interest, I think, in Massachusetts, and I have been up in
Ottawa last week, in fact, testified before their House of
Commons on this issue. There is real interest on the other side
of the border to try to come to arrangements where--this, I
think, is so important. What we are trying to do here is not
just find the needle in the haystack bad thing. What we are
trying to do, as well, is to take the legitimate trade and
travel and validate it as such we can set that haystack aside.
That way, even if we had something as horrific as happened on
September 11, we do not have to stop that flow. We know what it
is. We do not have to stop those people, stop that train.
And so part of our efforts should be not entirely driven
towards finding that one needle, but it should be focused on
how to take the vast majority of legitimate goods, validate as
such, so even if a terrorist attacked, we do not have to
disrupt that. Thank you very much.
Senator Collins. I think it is interesting that at every
single hearing we have had, no matter what the areas we are
looking at, we find that agencies are not talking to one
another or not sharing information or there is a lack of
coordination. That is the common theme, whether we are talking
about immigration policies or airports or our seaports. It does
seem to be something that ought to be able to be solved.
Ms. DeBusk, I want to ask you about a comment you made
about having voluntary standards for port security. You
expressed some concern that voluntary standards might not be
enough. What particular standards do you think need to be made
mandatory rather than leaving it up to the individual ports?
Ms. DeBusk. Firearms would be an excellent example. I do
not know why you would want anyone with firearms to just be
strolling around at the port, so I do not know why you could
not just say, no, you cannot have firearms at the port, as
opposed to see if ports want to have--you put out a guideline
that says it is better if you do not have firearms at the port.
That would, to me, be a perfect example.
Senator Collins. Mr. Quartel, I am very intrigued by the
notion that both you and Mr. Flynn brought up of pushing the
borders back. If we can inspect at the point of origin, it
seems to me that really is the way we have to go, because if we
do not inspect until the container gets to the United States,
and we know we do not inspect most of them in any event, it is
too late in many cases.
Assuming we could get agreements from countries and
companies to have a system that pushes the borders back, do we
have the technology that would allow us, once a container is
inspected, to electronically seal it and alarm it and have a
monitoring system? I am just unfamiliar with the technology in
this area. Does that exist now?
Mr. Quartel. Some of that technology exists, and I think
one of the later panels is going to be talking to the specific
physical aspect of technology. If I might, I think what I would
like to conceptualize for you, though, is a non-physical means
of inspecting, which is really, I think, what we are suggesting
to you here.
In the hierarchy of things you want to do, you want to
first screen a cargo electronically. You know the data. You can
funnel out 80 percent of it just by knowing with some
certainity that they are good people, they are good companies,
they have security in place, you know they maintain it. Then
you go to a scan. There are passive scans. There is an issue
there of the cost, which you will probably hear about later,
and we cannot mandate that a foreign port use it. Then you go
to search, and then you go to actually seizing it. So it is
screen, scan, search, stop, basically.
There are technologies for the physical control of the
process. They are a lot more expensive than most people can
actually afford to introduce across a system of 40-some million
containers worldwide.
Senator Collins. Thank you, Mr. Chairman.
Chairman Lieberman. Thank you, Senator Collins.
Senator Cleland, good morning.
OPENING STATEMENT OF SENATOR CLELAND
Senator Cleland. Thank you very much, Mr. Chairman, and
thank you for having the hearing today. Thank you, panelists,
for coming.
I would just like to follow up on Senator Collins'
observation. I am on the Commerce Committee as well as this
Committee. Whether we are talking about aviation security, bus
security, port security, rail security, homeland security, it
does seem to us that, and to me as I connect the dots, that we
are talking about three basic bugaboos: Coordination,
cooperation, and communication between and with Federal
agencies. Now, that is no rocket science there, but it is
coordination, cooperation, and communication.
I have been briefed on the Dark Winter exercise, the attack
or presumed attack by smallpox on the country, and Senator Nunn
played the role of the President with the Johns Hopkins mock
attack on smallpox back in June. That exercise was called Dark
Winter, and Senator Nunn, who was in this body for 24 years,
former chairman of the Armed Services Committee, said, as
President, as he got into the mock exercise, he found himself
becoming more and more impatient with bureaucracy. What he was
running across was the lack of coordination, cooperation, and
communication.
[The prepared statement of Senator Cleland follows:]
PREPARED STATEMENT OF SENATOR CLELAND
Mr. Chairman, as a Senator from a State with several ports, I
appreciate your holding this hearing today.
I am also a member of the Senate Commerce Committee, which has
oversight of our Nation's seaports. I welcome our chairman, Senator
Hollings, here today to tell us what the Commerce Committee has done to
help secure the Nation's ports. I supported these efforts, and voted
for S. 1214, the Port and Maritime Security Act of 2001. Given the 2000
Report of the Interagency Commission on Crime and Security in U.S.
Seaports which found that security at U.S. seaports ``generally ranges
from poor to fair, and, in a few cases, good,'' there was not time to
waste after this country realized its vulnerabilities on September 11.
S. 1214 contains several provisions that I believe would help
strengthen port security. The bill calls for a vulnerability assessment
at our ports, and the review of this assessment should involve all
relevant authorities for each port, which usually includes local,
State, and Federal officials. At the Nation's 50 most economically and
strategically important ports, the vulnerability assessment would be
updated on a regular basis. The Department of Transportation would
develop procedures for screening passengers, cargo and crew members at
maritime facilities, and those employed at security sensitive jobs at
ports would have to undergo criminal background checks. Attempts would
also be made to work with foreign ports to assess security
vulnerabilities abroad, which is an important part of this equation.
Also, S. 1214 authorizes loan guarantees and grants to help fund
security improvements and upgrades. This bill provides for funding of
research initiatives to develop technology for detection of chemical
and biological agents, which is vitally important as we continue to
hear of the potential that terrorists may have access to ``dirty'' bomb
materials. Unfortunately, there have been some Senate colleagues who
have blocked consideration of this legislation despite the efforts of
Senator Hollings and others to bring this bill to the floor. I am
hopeful that we will be able to address this bill soon.
Since September 11 was not an attack on our ports, it is difficult
to raise this issue with the public in order to have the public demand
action. But, the facts point to the need for better port security: 95
percent of foreign goods enters or leaves by ship, only 1-2 percent of
cargo containers are inspected, and the U.S. has 95,000 miles of
shoreline. In Georgia, over 12 and a half tons of cargo on over 2,500
vessels entered our State ports during fiscal year 2001. I must be able
to reassure my constituents and all Americans that the vast amount of
material entering the U.S. via ship is safe. How do I do this under the
current regime? I hope to get some answers today from our panelists.
Senator Cleland. Now, how do we improve that? I just want
to ask some basic questions based on the fact that I have a
State which has two major ports, Brunswick, Georgia, and
Savannah, Georgia. As a matter of fact, Brunswick is very close
to the Trident nuclear submarine base at King's Bay, which
stores nuclear weapons. That has been a real eye-opener to see
how the lack of security at Brunswick, the Port of Brunswick,
impacts, say, a nuclear sub base just to the South and how the
nuclear sub base has had to take extraordinary measures just to
protect its nuclear weapons.
I will say first, Mr. Commander, since the President says
we are at war and the Coast Guard is supposed to be under the
Navy, coordinated by the Navy in wartime, are we remiss by not
having the Coast Guard under the Navy so at least at a nuclear
submarine base like King's Bay, you have the coordination built
in because the Navy is in command of the Coast Guard and the
Coast Guard could help out with the protection of nuclear
weapons? I just throw that out to you.
Mr. Flynn. Sure, Senator. The cooperation between the Coast
Guard and Navy has always been ongoing. Of course, even the
Vietnam War, the Coast Guard was actively involved in the
Vietnam War. We did a lot of river patrols and so forth, but we
never felt officially under the Department of Navy in that
instance.
Today, in fact, you have the CND offered to Admiral Loy
naval assets to assist the Coast Guard in this new war, that
is, helping in the patrolling, giving some Naval patrol craft
to help the Coast Guard do its mission. You already have a
Maritime Defense Zone Commander who is a Coast Guard Commander
who is dual-hat and works with the Atlantic Fleet Commander.
So I am not worried about the ability for the Coast Guard
to work with the Navy in an integrated way. I am more worried
and concerned about the rest of that tapestry.
What we know about these terrorists is that they are
blending into the real estate. They are blending into the day-
to-day movements and trying to look as legitimate as possible,
whether it is as a fisherman or a charter boat or whatever
might be on the water, or that their commerce blends into
legitimate commerce, and we are trying to get a handle on the
people, the conveyances, and the cargo and have a sense of
being able to fuse the details of that in advance.
The Coast Guard will have some knowledge about the
conveyance, in this case a ship. That actually works. Our
intelligence people sit with the Office of Naval Intelligence
and the Navy works closely with that, as well, in tracking
those.
Customs will know about the cargo and INS will know about
the people, and obviously Consular Affairs, who give the visas,
will know about the people. The FBI and CIA will have the
backlist.
The challenge here, just to illustrate quickly, though,
is--I heard this from a Customs agent who was involved with
designing a scenario, he said, last April that followed this
weapon of mass destruction, the container, and it was built out
of--the FBI had given Customs some information about a
household goods from Asia which actually had a dirty bomb in it
and it was going to be arriving in New York on the Fourth of
July. This had to go up to headquarters to get scrubbed before
they used it. It got kicked back initially. They said it was
unrealistic because the FBI would never give the information
about the household goods being contaminated to the Customs
organization.
Senator Cleland. May I just interrupt? Mr. Chairman, we
have run across this with the CDC----
Chairman Lieberman. That is right.
Senator Cleland [continuing]. A couple of times--and we
just had the Postmaster General here--we have demonstrated in
hearings that the FBI, once it gets hold of the anthrax
letters, whether it is Senator Daschle's letter or Senator
Leahy, does not send it to the CDC. It sends it to Fort
Detrick, Maryland, who does it, and Fort Detrick, Maryland,
looks upon that as the FBI as a customer, so they are not going
to tell anybody, and the FBI does not tell anybody. Therefore,
the CDC winds up in the dark and ultimately gives bad advice to
the Postmaster General about a Postal Service entity one step
removed from Daschle's office while two people are dying at
Brentwood.
The point is that it is not healthy for the right hand to
not know what the left hand is doing. Again, coordination,
cooperation, communication. So I just want to get your take on
whether the Coast Guard, since the President said we are at war
and the Coast Guard in wartime is under the Navy, ought to be
under the Navy, but that is not your concern. Your concern is
working with the other entities, right?
So let me move on to Ms. DeBusk. You mentioned the
possibility of the fact that there is no central authority,
controlling authority, in terms of port security in America.
You mentioned the creation maybe of a Department of Homeland
Security. As a matter of fact, that is exactly what the Hart-
Rudman Commission recommended over a year ago, that an entity,
an agency with budgetary authority and troops, people, infantry
to command, be instilled in our Federal Government to
coordinate this kind of thing.
Instead, we have an Office of Homeland Security with 18
people. Tom Ridge is a good guy, a fellow Vietnam veteran, but
I doubt that 18 people are going to go up against 60 different
agencies. So we still are left with the challenge of
coordination, cooperation, and communication.
Any thoughts about what this Committee ought to do in
furthering our strong interest in strengthening an Office of
Homeland Security or creating a Department of Homeland
Security?
Ms. DeBusk. Yes, and I think you have already answered the
question and that is resources. The only way you really get
good coordination is through resources to back it up in
addition to jawboning and saying, let us all talk together.
The resources would come in for basic things like computer
systems that talk to each other. There is a lot of good will in
the agencies. They like to cooperate. For instance, my former
office got along excellently with the Customs Service, but we
did not have the same database for going back and forth on the
computer system with the information.
And so I think in terms of getting coordination and the
concept of pushing back the border, it only works if there are
resources that would be committed to doing things like letting
the agencies talk to each other over the computer system.
Senator Cleland. Thank you very much. My time is up.
Just to highlight, I mentioned this in the Commerce
Committee, I will mention it here, that Georgia Tech in Atlanta
has developed a little chip, a little glass sensor to pick up
biological and chemical agents, which might be helpful in this
war against terrorism and detecting early on what is in some of
these containers.
Thank you very much, Mr. Chairman.
Chairman Lieberman. Thank you, Senator Cleland. That is
very interesting. You know, you are right. Something is going
on here, and probably my colleagues on the Committee have had
the same experience I have, which is that a lot of complaints
from local officials about difficulty in working with the
Federal intelligence agencies and the FBI. I wonder if the
Committee might not have a role to play in calling in the
agencies, either in a public or private session, and talk about
this problem. The examples that you just gave, Dr. Flynn, and I
think it was Rear Admiral Larrabee gave another example earlier
on, they are just not acceptable, because you are now--ports
are now the front lines, so we have got to arm you with the
information to protect us.
Senator Bennett.
OPENING STATEMENT OF SENATOR BENNETT
Senator Bennett. Thank you very much, Mr. Chairman, and for
your pursuing this continued issue. In the spirit of full
disclosure, I am going to be very shameless in pushing my bill.
Chairman Lieberman. It would not be the first time that has
happened around Congress. [Laughter.]
I was not speaking of you, but it has been done in Congress
before.
Senator Bennett. Right. In July, the Defense Threat
Reduction Agency, DTRA, gave me a top secret briefing on air
vulnerability analysis of the Port of Baltimore, and, of
course, the members of the panel might not know, but my hobby
horse, my focus here is on critical infrastructure protection
generally, but the computer portion of it more specifically.
Some people say to me, well, why are you focused on
computers because homeland defense, homeland security involves
so much more than computers. I will give you an example that I
use in speeches. With the ability that currently exists for
hackers and others who want to get into computers, this is not
a theoretical. This has happened. Someone got into the computer
system at a dam and was in a position to control whether or not
the floodgates would be opened or closed. Downstream from the
dam was a military installation which would have been flooded
and destroyed had the hacker or activist or whoever it was
decided to open the floodgates.
So when you think of homeland security and you want to
protect the military installation, or fill in the blank, put in
whatever you want, downstream, you want to protect the facility
downstream, it was the vulnerability of the computer that made
that possible.
And as I sit here and listen to all of you describe your
frustrations and your problems, I realize that we cannot
stovepipe port security away from the issue of computer
security. You talk about anomalies, Commander Flynn and Mr.
Quartel, you wanted to look for an anomaly in the situation,
suppose I was the individual loading that dirty bomb in a place
where it would not show up, should not show up, and that would
be an anomaly that would immediately appear on a computer
screen somewhere. And prior to learning that, I break into the
computer system and change the data so that the data that comes
says this is not an anomaly. This really is woolen goods or
cotton goods or something coming from an agricultural country,
and yes, it has an unstable political background, but these are
T-shirts that we do not need to worry about because I have
changed the computers to have the information that comes to you
say it is T-shirts.
And when we talk about the theme that Senator Cleland
talked about and Senator Collins talked about of not talking to
each other and not getting the proper analysis, we come back to
the fact that I have heard several of you say a very large
portion of the ports are under private control, and unless we
pass a law that requires private people to give us all of the
information as to what is happening in terms of the threat on
their computers, which law does not exist now, again,
shamelessly, we need to pass my bill which says they can
voluntarily share that information with a common analysis
center in the government without worrying about a FOIA request
being filed by Osama bin Laden saying, I want to know what the
private sector is telling the government about my attempt to
break into their computers.
So, as I say, shamelessly, I am laying this out. Now, I
would like your responses to that and your comments about that
and see if I have misread some of your testimony about
vulnerabilities here.
Mr. Quartel. I actually have not read your bill, but I like
what you are saying. In the specific example--by the way, I
have also a port story. I was at the Port of Los Angeles
Tuesday afternoon and they had a similar story to this one
about information sharing. There are reasons for not
information sharing, which we know, firewalling various kinds
of data. But there are also ways to share data by tapping
databases electronically without violating all of these other
provisions, which I think is what you are talking about.
No terrorist is going to tell you he has got 20 tons of
nitrate kinds of fertilizers and a $80 GPS and a $3 blasting
cap that he is going to load through there. There is a
hierarchy of responses. Data by itself will not tell you
anything.
Customs today has a program they call BASC, for example,
which they use in the drug process, where they work with
trusted parties, people who have procedures in place where they
seal and load and they know the people there, they have
security as to who the people are, so they can actually
certificate across the process and that helps them speed it.
So while you use data to look for anomalies and suspect
situations, you also do what Steve Flynn was saying, which is
you also can channel big chunks of that out. If it is a Cisco,
for example, they may have a procedure in place that you cannot
load a nuclear weapon or a dirty bomb in any of their systems.
So maybe those cargoes go through faster.
There may be small players in the business who can also get
through that process. In fact, most of our cargoes that come
from Asia have a lot of small players, so we actually have to
deal with the real world as it really is.
If I have one message to the Committee beyond that I have
already said, it is that what we should do is tap into the way
business works, and one of the things as government we do not
do very well, particularly in transportation, is ever ask the
shipper, meaning the guy who owns the cargo, what they think.
We go to the carriers, we go to the labor unions, we go to
this, we go to that, but we do not go to the shipper, and these
are the guys who have the holistic view of the process.
We have talked about tracking. Most shippers do not care
where a cargo is every minute. It is not useful data. What is
useful is to know it arrived at the port or it is going to be 3
days late at the port or it missed the train, because then they
use it for planning.
So if we talk about tracking, for example, it should align
with what a customer wants to do with it. It should align with
his commercial interests. And if we do not align the interests,
you are going to find things like port shopping.
Senator Hollings said, well, let us concentrate on the top
25 ports. You should, but on September 11, the guys came
through a minor airport, an out-of-the-way crossing at the
border, and then fed into a major funnel and you will have
exactly the same kind of thing in shipping unless you align
your interests with the way the commercial sector operates and
data is a key part of it.
Ms. DeBusk. Let me just add something on that from one of
the concerns of the private sector, because the security of the
data is incredibly important for getting the cooperation of the
private sector.
Senator Bennett. That is right.
Ms. DeBusk. One of the big concerns is the very mundane
concern of theft. If you know exactly what is coming in,
exactly where it is, you can find it exactly with this high-
tech device. It turns out that it is great new color TVs,
which, unfortunately, can disappear before reaching its final
destination. So a major private sector concern in trying to do
the public-private sector cooperation on data would have to be
addressed through the security of the data.
Senator Bennett. That is exactly the point of my bill. It
says you can share this information and it will stay secure
within the government.
Ms. DeBusk. And also secure within the government, and then
you have to think about a limited number of people within the
government that would have access encrypted passwords, the
whole thing.
Senator Bennett. Sure.
Mr. Flynn. And absolutely, Senator, I would support this,
as well. You find most sophisticated ports are actually run
virtually by computer, the gantry cranes and everything else.
You take down the computer system, you shut down that port, as
well. So the cyber attack could do it as much as a physical
bomb kind of thing with huge disruption effects, so there is
that area.
The other is, ultimately, of course, we must be talking
about sharing data overseas. We are dealing with
multinationals, not just private sector domestic, but
multinationals, and we are also, as with Canada, in an effort
to enhance our data shopping there, if there is not comfort
about the security of the data, that is going to make that much
more problematic.
I think taking that wartime analogy, though, that we are
in, as the President said, about trying to apply it in this
area, I think it would behoove us to think about--I get from a
number of private sector people up in New York who have really
been, obviously, mobilized by the tragic events of September 11
and are waiting for the call, basically. These are the people
who understand how to do data management, understand how to do
data mining. We have huge companies out there who solved how to
bring legacy systems together and make mainframes go and they
are just sitting idle.
I think some calling in of a red team, almost, to solve
this information issue from private sector folks, anoint them,
give them 9 months' charter, give them all the resources they
need to fix this problem. Everything we are talking about in
the government is 5- or 7-year, multi-year programs in one
sector that we are not going to finance anyways until whenever.
That is unacceptable. I do not think we are going to fix it
through our traditional public sector needs. If it is a
wartime, let us treat it as such and fix this by getting the
smart people into this.
Senator Bennett. That is a good summary, because in World
War II, a lot of information from the private sector was
considered secret, classified, shared with the government with
the understanding that it would not be available, and in the
war we are talking about here, with 90 percent of the critical
infrastructure in private hands, that means an intelligence
officer trying to see what is happening on the battlefield has
90 percent of the battlefield blacked out to him if the private
sector does not share the data. But as you indicate, Ms.
DeBusk, the private sector will not share the data if they
think it is going to be made public.
Thank you, Mr. Chairman.
Chairman Lieberman. Thanks, Senator Bennett. Your
questioning may have been shameless, but it was quite
productive, I thought, and very interesting.
Senator Thompson.
OPENING STATEMENT OF SENATOR THOMPSON
Senator Thompson. Thank you, Mr. Chairman. Sorry for being
late. I was a witness this morning, an uncustomary role though
it may be, at a U.S.-China Commission hearing. I wanted to get
over here as quickly as I could.
Chairman Lieberman. We are glad you are here.
Senator Thompson. It occurs to me in listening to this that
one of the things that is happening here is going to cause us
to really look at the issue of federalism in a different way.
One of the things this Committee deals with, of course, the
relationship between the various levels of government.
I listened to you and once again we see various Federal
agencies are involved to one extent or another, but so is
State, so is local. And, law enforcement is on one side, while
prevention is on the other. The real question, I think, that we
are grappling with is who ought to be doing what? What should
we be doing and who should be doing it? If you think about it,
that is really the main question of the government and it is
not an easy one.
I think that what we are seeing now after September 11 is
that we are going to be doing some reassessing and we are
probably going to be bringing the Federal Government into some
areas, at least on the prevention side, that maybe they have
not been before. We need your help on that.
Hopefully, we will learn to stop doing some things at the
Federal level that we should not be doing and let those
responsibilities go to the State and local governments. We
should consider a realignment, a reprioritization, as it were,
to look at federalism anew and start concentrating and spending
more of our resources on the things that the Federal Government
can do and must do best. We should look for standardization. I
think in areas of national security, we have to really look at
that.
The other thing that is kind of related that concerns me is
what is the economic impact of all of this going to be and what
are we going to be willing to tolerate. We can devise all these
systems, but as we have seen at the bridge in Detroit, a little
bit of slowdown, a little bit of disruption and things start
backing up. What is that going to do, what is our toleration
level going to be, and to what extent are we going to have to
start looking at things differently?
We have been called upon to sacrifice in this country, but
so far, about the only sacrifice we have been called upon to do
is shop at the mall, and buy more. What if we have to get used
to doing more, not just at our airports, but here?
My testimony today before the China Commission had to do
with the extent to which we should be allowing foreign
companies that are engaged in proliferation activities, that
our government determines that are engaged in proliferation
activities, to raise billions of dollars in our capital
markets, no questions asked, without disclosing to the
investors that they are engaged in proliferation activities.
It seems like a no-brainer to me, but that is what is
happening, billions and billions of dollars by companies,
including Chinese companies that our country knows are engaged
in proliferation activities, making the world more dangerous,
which we say we need a national missile defense system to
protect us against. But they can come and raise billions of
dollars and hand it over to the military, as far as we know.
As I am speaking, half of Wall Street is downstairs
explaining why I am wrong because the measures I recommended
will not do any good, because they will have an economic
impact, it is going to cost us business. How much are we going
to be willing to do? Has anybody made an assessment of the
economic impact of the preventive measures that are being put
on the table?
Rear Admiral Larrabee. In the Port of New York and New
Jersey, we have estimated that it will cost us about $150
million in the next couple of years to implement just some of
the things that the Hollings bill has suggested. As we begin to
talk about other ways to prevent terrorism, I think that the
cost goes up.
You are absolutely right. My job every day is to find a way
to balance a system that works very well because of its speed
and its economy with the need to slow it down and be more
deliberate in terms of making sure that we know what comes
across the border, and that is a very, very difficult
challenge, because the system that we operate today is what
drives the engine of our economy, and the minute that that
system slows down and we cannot bring oil in on the basis that
we bring it in now, the system comes to a grinding halt.
Mr. Quartel. If I can add to that, too----
Senator Thompson. Liquid nitro gas, which is very much a
concern.
Mr. Quartel. Maybe I can take it from the micro to the
macro. Every trip I now take on an airplane, and I used to
travel a lot, adds 4 hours. That is half a day. So I travel 80
percent less. So I am certainly not helping the aviation
system, nor, frankly, are a lot of the rules, the way they are
being implemented across the system.
In logistics, the cost of transporting and moving goods and
logistics and storing and maintaining them as inventories in
the United States 20 years ago was 25 percent of GDP. Today, it
is 15 percent. We have saved $1 trillion annually in terms of
the kinds of things we have built into the system by moving
cargo swiftly, reducing inventories, reducing the cost----
Senator Thompson. Just in time?
Mr. Quartel. Just in time. Although even ``just in time''
is only in a small percentage of the economy, these things
affect everybody, from the biggest to the smallest.
Senator Thompson. Some people are saying we are going from
``just in time'' to ``just in case'' now.
Mr. Quartel. Well, there is some issue there, but let me
give you a number there. If you only increase inventories by 5
percent, you add $75 billion in costs to the American economy.
That is 75,000 jobs you have just lost.
Mr. Flynn. I might add here, though, I think the key,
again, about this prescription, if we are willing to take this
in a comprehensive networked approach, Rear Admiral Naccara,
the First District Commander up in Boston, has a very creative
and ultimately successful model for how to deal with the
liquified natural gas. What he is doing is he is sending
inspectors to Trinidad where it is loaded. They are inspecting
the facility, which actually is a pretty good, secure facility,
to board the vessel when it leaves the harbor, inspect it
before it goes to make sure there are no bad people on it, sail
the harbor and get off at the pilot buoy. If it was hijacked in
between, there would obviously be some communication of that.
The advantage is when it gets to Boston, we are actually
able to speed it in. I mean, you are going to still do some
controls, but you do not want it harboring out there for a few
days having a big advertisement, LNG is waiting here as a
target. You actually want to get it in relatively quickly. So
they will be met with an escort, but it will be moving very
quickly. The company loves it because it now has expedited
treatment in. We are more secure.
The same modeling applies, I think, even as we think about
cargo. If we are talking about building this in as a standard
up front, the market will adapt, I think, to it.
I would propose that, for instance, that perhaps Governor
Ridge--well, the President would issue a homeland security
Presidential directive to the Secretary of Transportation to
meet with his counterparts in the six or seven major megaports
to essentially say, we are not going to allow mystery boxes
anymore into our ports because they are a critical
infrastructure and here are the standards. And as soon as that
is harmonized, the cost issue starts to get adjusted, just as
it has with oil tankers.
When we had this real problem many years ago, there were a
lot of unsafe tankers, people were saying we could not impose
standards. The oil would not come in anymore. Well, we have
rationalized and adjusted.
The real cost, though, for me, the one that most keeps me
awake almost every night, knowing what I know about the system,
is the cost of turning the spigot off. Ninety-five percent of
general cargo coming into the United States comes in a
container. This makes the anthrax in the mail service pale by
comparison. We went to E-mail and faxes and UPS and FedEx. When
you compromise this system and you turn off the switch, there
is no alternative. Cargo stops coming in. That is the cost
matrix I think we need to balance against, the dollars that we
are talking about here and putting in a smart approach.
Senator Thompson. Ms. DeBusk.
Ms. DeBusk. Yes. One of the important things that is in the
Hollings legislation, and that was recommended by the Seaports
Commission, has to do with threat assessment. Because it is
simply not possible to do everything that we can or should do
at every single one of the 361 ports. So an important way to
weed out spending priorities would be to conduct threat
assessments and figure out where the greatest vulnerabilities
are and tackle those first.
Rear Admiral Larrabee. And then with better information,
you can adjust your reaction with the idea that you cannot do
everything, and----
Senator Thompson. It seems to me like a threat assessment,
certainly, everything has got to be prioritized and all that,
but it looks to me like once we do that, it has got to be the
most closely held information in all of our government.
Ms. DeBusk. I agree.
Senator Thompson. If the bad guys have that information,
then it is all for naught.
Ms. DeBusk. I agree completely, and even some of the
information that was put out by the Seaports Commission is no
longer available.
Mr. Flynn. On the reverse, I just might say, Senator, is
the schemes that we talked about, the criminals are there. They
know--we are not talking about a hypothetical--about containers
being used. They have been used for the last 15 years to
smuggle narcotics into this country, as a matter of routine,
almost. So bad guys know the vulnerabilities of this system.
Mr. Quartel. And I would suggest to that, every one of us
can tell you how to get it in, and if we can, someone else can,
as well.
Senator Thompson. Knowing what we are watching and what we
are not watching is what I am talking about.
Mr. Flynn. Oh, yes, sir.
Senator Thompson. Thank you, Mr. Chairman.
Chairman Lieberman. Thanks, Senator Thompson.
Thanks to the four of you. We have got to move on to the
next panel, and we really did not go into some of the very big
ideas that you gave us for reform, such as pushing the border
back and how that would work, how we station our personnel
there or do we, and does that require international treaties
and agreements. And then, although we will get into both of
these matters in the next panel, too, I hope, the use of
technologies that are available now to create new ways to track
containers without slowing them up so that there is no adverse
economic effect.
Perhaps either with the Committee or our staffs, we could
ask you to give us some more time to better develop those
ideas, because it may be that this Committee can take a
leadership role, hopefully after Senator Hollings' bill is
passed, which I hope will happen soon, to implement some of
those ideas.
But in the meantime, I thank you very much. It has been
excellent testimony.
Chairman Lieberman. We will call our third panel, Argent
Acosta, Customs Inspector, Port of New Orleans, and President
of the NTEU Chapter 168; Deputy Chief Charles Cook of the
Memphis Police Department; W. Gordon Fink, President of
Emerging Technology Markets; and Michael Laden, President of
Target Customs Brokers, Inc.
Thank you all for being here. Chief Cook, we are going to
call on you first. You come from a great city.
Mr. Cook. Thank you, sir.
Chairman Lieberman. You even have some great Senators
representing your State here in Washington.
TESTIMONY OF DEPUTY CHIEF CHARLES C. COOK,\1\ MEMPHIS POLICE
DEPARTMENT
Mr. Cook. Thank you very much, Mr. Lieberman. I would like
to say good morning to the Members of the U.S. Senate,
witnesses, and others present. I want to give special thanks to
Senator Fred Thompson and, in particular, his staff, Hannah
Sistare, Jason Roehl, and Morgan Munchik, for inviting me to
speak here today on behalf of the people of Memphis.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Cook appears in the Appendix on
page 120.
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I am here today to talk about the City of Memphis, how we
have responded to the events of September 11, and the needs of
Memphis in the area of homeland security. I am sure our
situation is much like those of other cities our size.
Prior to September 11, the Memphis Police Department, the
local FBI, the Memphis and Shelby County Emergency Management
Agency, the Memphis and Shelby County Fire Departments, the
City of Bartlett, the City of Germantown Police and Fire
Departments began training with incident command tabletop
exercises. Our focus was on natural disasters, the threat of
terrorist attacks, school shootings, and plane crashes.
This multi-agency training developed a team concept in
responding to large-scale, long-duration events. Our
departments began seeking further training for various
contingencies. In all the exercises, role players simulated
their responses, and as a result of the critiques and follow-
ups, they determined that additional training, equipment, and
manpower resources were needed.
Because of extreme delays on the Memphis to Arkansas
bridges across the Mississippi River at I-55 and I-40 caused by
relatively simple accidents, a multi-agency bridge mitigation
team was formed in the year 2000. Members of this group came
from the police departments of Memphis and West Memphis,
Arkansas; the sheriff departments from Shelby County,
Tennessee, and Crittenden County, Arkansas; the Tennessee
Highway Patrol and the Arkansas State Police; the Railroad
Police; the Tennessee and Mississippi Departments of
Transportation. Various casualties, including marine accidents,
terrorist attacks, and any subject threatening bridge security
became topics of discussion. Decisions regarding multi-agency
jurisdiction and removing hazards from the roadway were made
and the agencies took joint responsibility for patrolling the
bridges and they continue to do so.
Most police, fire, and emergency management agencies during
the first few hours of September 11 reacted by encircling the
government buildings in the downtown area. We deployed our
resources to include other targets of opportunity, including
bridges, water supplies, power utilities, and similar
government-related services. We received numerous phone calls
from businesses, manufacturers and trucking firms, refineries
and other facilities. Each caller was interested in information
on what to expect in the way of local terrorist attacks.
Their questions were addressed through the media in a press
conference with public officials, including the Memphis Mayor,
the Shelby County Mayor, the Police Director, the Shelby County
Sheriff's Chief Deputy, the Fire Director, and other emergency
services personnel. These officials made an evaluation of the
immediate threat to the city based on information from the FBI
and national and local television news. This resulted in an
agreement that our response could be reduced at that time.
Jointly, in an organized setting, this team of city officials
released information to the public. It was timely, informative,
and reassuring.
We have continued to maintain high levels of alertness,
giving special attention to large sporting events, concerts,
and the Beale Street entertainment district. We have
experienced a blow to our budget as a result of September 11
and our anthrax responses. Sustained actions resulting from
hoaxes, threats, and actual attacks are devastating to local
budgets, as you know, draining dollars by eating overtime.
There is little that can be held in the hand following
unbudgeted responses.
Since the events and continuous warning of future threats,
many cities are looking at budget shortfalls. We have still
maintained high levels of awareness and are establishing
communications between our precincts, manufacturers, and
redistribution.
Following the New York attack, we have experienced the
uncertainty and fear of bio-terror. There have been several
warnings of additional attacks. As we further assess our
ability to deal with attacks of this type, it is necessary to
evaluate what is needed in order to defend ourselves against
attack, to respond to and reduce the damage and loss of life,
and to fully recover.
In reviewing the needs of the city, I must mention the Port
of Memphis, an integral part of the Memphis economy. Memphis is
known as America's distribution center. I think this notoriety
comes from its association with Federal Express, the United
Parcel Service, and other air carriers. However, the marine
port facilities of the Memphis metropolitan area is one of only
three cities served by five class one railroad carriers serving
48 contiguous States, two barge fleeting services, and a
multitude of barge and truck transport services. International
shipments come through the Port of New Orleans and are filtered
to the other States through Memphis, the world's largest cargo
airport hub.
The Port of Memphis is the fourth busiest inland port in
the country. The port facility has immediate access to
Interstate 40 and Interstate 55 and is located less than 15
minutes from the Memphis International Airport. The Port of
Memphis also provides a unique industrial area for the
convergence of transportation services located near the Memphis
downtown district.
This transportation hub has been of interest to organized
crime due to the large quantity of manufactured goods. The
Memphis Police, the Shelby County Sheriff's Office, the local
FBI, the U.S. Customs Service, and the National Insurance Crime
Bureau was organized through a memorandum of understanding,
updated yearly, into the Tennessee, Arkansas, Mississippi Auto
Cargo Theft Task Force. This is a multi-agency investigative
law enforcement unit targeting organized vehicle theft,
including heavy equipment and farm and construction machinery,
and associated criminal activity and thefts from interstate
cargo shipments. They are involved in activities in and around
both marine ports and the airport.
These are the reasons Memphis is considered to be a
potential terrorist threat.
The following are suggested measures which should be
considered in the interest of preventing terrorist attacks,
attacks which would severely interrupt interstate commerce for
years if successful, seriously crippling the Nation.
Use a multi-agency approach to the investigation of
suspected terrorists and develop the availability of an
electronic clearing house for all information gathered
nationally and internationally on suspected terrorists.
Assign fully-armed U.S. Coast Guard personnel to 24-hour
operations, providing visible patrols on the Mississippi River,
Wolf River, McKellar Lake, Tennessee Chute, and the new Frank
Pidgeon Industrial Park.
Support a national or international truck driver licensing
program for drivers entering and exiting the U.S. from Canada
and Mexico and for crossing major infrastructures, bridges, and
tunnels. Also, support technology capable of identifying
drivers and driver history by fingerprint, photos, and newer
iris scan technology for officers to use in the field.
Support smart card technology for trucks and loads, capable
of immediately identifying driver, cargo, origination point,
destinations, and route plans. This would also do well for
marine vessels.
Organize a U.S. Coast Guard inspection boarding team to
meet and board vessels above and below the Mississippi River
bridges to identify operators and crew and to monitor
approaches to sensitive infrastructure, such as bridges,
industrial complexes, and production facilities with river
access.
Assign U.S. Army or Army Reserve troops to provide 24-hour
security and surveillance to the more critical targets, where
attacks would cause severe repercussions for America.
Provide security gates and barricades limiting access to
Presidents Island, refineries, and chemical plants from
vehicles without proper identification and authorization.
Establish privately-owned police agencies, like the
Railroad Police and Federal Express Security Police, for the
protection of businesses which produce or manage critical
materials.
Also, establish a Homeland Security Block Grant to meet
such needs as police and fire overtime, training, communication
and rescue equipment, and for security measures to protect
airports, waterways, utilities, public transit, and other
public infrastructures.
Thank you once again for inviting me here to testify today.
I will be happy to work with the Committee in the future in any
way and I will be glad to answer any questions you may have.
Chairman Lieberman. Thanks, Chief Cook. That was excellent
testimony and I appreciate the specificity of the
recommendations. We are going to hold a hearing in the
Committee, I believe at the end of next week, particularly
having local officials come in from around the country to talk
about some ideas, and the idea of federalism Senator Thompson
talked about earlier. But your proposals here really set the
table for that and I appreciate it.
Mr. Cook. Thank you, sir.
Chairman Lieberman. Mr. Acosta, thanks for being here. You
bring firsthand experience as a longtime Customs inspector and
we appreciate your willingness to be here and look forward to
your testimony.
TESTIMONY OF ARGENT ACOSTA,\1\ SENIOR CUSTOMS INSPECTOR, PORT
OF NEW ORLEANS AND PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION
(NTEU) CHAPTER 168
Mr. Acosta. Thank you. Chairman Lieberman, Members of the
Committee, thank you for inviting me here today to talk about
port security. My name is Argent Acosta and I am a Senior
Customs Inspector at the Port of New Orleans. I am also the
President of Chapter 168 of the National Treasury Employees
Union. My chapter actually encompasses five States, Louisiana,
Mississippi, Tennessee, Arkansas, and Alabama. There are 19
ports in that region of Customs and the majority of those are
seaports.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Acosta appears in the Appendix on
page 127.
---------------------------------------------------------------------------
I have been a Customs inspector for 30 years, the Chapter
President for 26 years. My job is to ensure that illegal
contraband, from knock-off designer jeans to cocaine to bombs,
does not enter the country, and that legal goods that enter the
country are assessed the correct duties.
At seaports like the Port of New Orleans, the mainstay of
the job is boarding incoming vessels, primarily cargo ships, to
inspect for illegal goods. It can be a very dangerous and not
very glamorous job, but there is a great deal of commitment by
the front-line inspectors to do the best job possible,
especially since the events of September 11.
I would like to share with the Committee a recent example
of that commitment. Inspector Thomas Murray, a 31-year veteran
of the Customs Service, died tragically during an inspection of
the hold of a vessel at the Port of Gramercy, Louisiana, on
October 30 of this year. He was killed by toxic fumes, as was a
member of the vessel's crew and the ship's captain, who
followed him into the hold. A second Customs inspector was
overcome by the fumes, but is recovering.
Inspector Murray was aware that the vessel he was searching
previously brought illegal drugs into the United States, so he
was determined to be as thorough as possible. He did not know
what dangers he would encounter when he went below the deck,
but he went anyway. Tragically, his commitment to doing his
job, despite potential danger, cost him his life. His fellow
inspectors, especially those of us from Louisiana, will mourn
his loss for a long time to come, but we will also remember his
bravery and commitment every time we are faced with boarding a
suspect vessel or searching a hold that we believe to be
dangerous.
Mr. Chairman, you asked in your letter of invitation that I
address several questions regarding port security in my
testimony. The first was, what is the current adequacy of port
security? I am afraid that I must answer that question by
saying I believe port security is currently not adequate and
poses serious potential threats to those not only in the
immediate area of the port, but to those who may come in
contact with uninspected material that arrives through our
ports and moves throughout the country in other modes of
transportation.
The Customs Service is currently only capable of inspecting
about 2 percent of the 600,000 cargo containers that enter our
seaports every day. From my own experience in New Orleans,
despite the huge increases in trade since I started with
Customs in 1970, the number of Customs inspectors at the Port
of New Orleans has dropped from approximately 103 in 1970 to 29
this year. In addition, since September 11, Customs inspectors
from around the country have been temporarily reassigned,
primarily to Northern Border ports to cover the gaping holes in
security there.
Since I had previously volunteered for emergency response
team duty, not realizing, of course, that September 11 was on
the horizon, I was among the first to do a temporary tour of
duty in Michigan, at Port Huron, one of the busiest truck
crossings in the country. On September 14, I was given 4 hours
to go home, pack, board a Customs flight at the Gulf Port
Airport and go to Michigan, at which time I found out I would
be in Port Huron.
There was an incredible amount of pressure on inspectors at
Port Huron since many ``just in time'' auto parts headed from
Canada to the big three auto makers go through the port. I know
my biggest personal concern was not to be the one who let a
terrorist into the country, and some supervisors seemed to
support that view, the view that extreme caution was necessary.
However, others seemed to be sending the signal that we needed
to move things through more quickly because of the need for the
auto parts, so it is a very difficult balance and I can
appreciate the problem that they are faced with.
I will begin another temporary assignment at Port Huron in
January. These temporary assignments, while currently necessary
due to the extreme shortage of personnel, leave home ports,
like my Port of New Orleans, able to inspect even fewer vessels
than usual. Also, the more an inspector knows about a
particular characteristic of his port, what the main goods that
go through the port are, what are the main carriers, the
destinations, etc., the more effective he or she can be.
Obviously, 30-day temporary assignments at different ports does
not lend itself to building this kind of experience.
The use of the National Guard at some ports may be
temporarily necessary due to the unprecedented threats we are
facing, but in many cases, due to their lack of training and
experience in the area of cargo and vessel inspection, the
National Guard provides the appearance of security rather than
any real increase in security. In any case, having military
personnel perform these duties is obviously not a long-term
solution.
In addition to the severe limitations on the ability to do
actual inspections, the technology that is supposed to help us
do our jobs by providing us with advance information on
oncoming vessels is outmoded, subject to brownouts, and often
incompatible with the technology of those we need to
communicate with. In addition, the advance information about
what cargo may be aboard a vessel often is not sent early
enough to do any good, and even more often is not accurate.
Customs has determined through its own system that the accuracy
rate of vessel cargo information is only 56 percent accurate,
and let me give you a real current story to point out this
aspect.
In April of this year, a vessel arrived from the Port of
Savannah. It was a foreign flag vessel with containers on board
for discharge throughout the United States. Our enforcement
team targeted the vessel for boarding. We targeted the vessel
to look at the cargo that was available. It had empty
containers and full containers. By doing that, we set certain
containers aside that we wanted to pull off and take a look at
and we wanted to verify all the rest of the containers,
including the fact that the empty containers were empty, and
you will see why we do this.
We looked at the vessel and encountered one of the empty
containers and upon opening it found out that it had cargo in
it. We sealed the container and sent it to our cargo
examination station. It sat for a day or two. When the two
inspectors who worked the station went to open it up, their
radiation detectors went off. They went off big time. One of
the inspectors was our actual HAZMAT coordinator and trainer,
so she backed everybody off, moved everybody away. We called in
the experts. The container was very hot. It had drill testing,
well testing equipment on it, but it was a serious threat to
everybody around it. Fortunately, after testing and after a
period of time, it appears as though the inspectors did not
suffer any long-lasting effects. We hope they did not.
But were it not for us targeting the vessel and looking at
the containers, this empty container would have moved
throughout the country to wherever it was going to go, and
whoever else who might have walked up to it who did not have
equipment to note that there was something wrong with it might
easily have been harmed or killed.
There are also problems with regard to the physical
security of the port. Access to cargo and cruise vessels in
many ports is not limited to those with prior approval to be in
the area. Virtually anyone can gain access to the areas where
vessels unload passengers and cargo. While there are secure
areas in the Port of New Orleans, access to those areas is
overseen by contract security personnel, who, like airport
baggage screeners, receive low wages and little training.
In fact, in the immediate aftermath of September 11, while
Customs was and still is on its highest state of alert, I noted
as I passed a secure area, the checkpoint going into the port
area of the port, that there was no one in the security
checkpoint. I sat for a few minutes thinking that maybe
somebody had stepped into the bathroom, and it was the case.
They had stepped away from the access. So access to the secure
area was totally insecure.
The second question you asked me to address is what
problems confront the Customs Service and other Federal
agencies charged with securing our ports. I believe that the
biggest problem is a lack of personnel. As I mentioned earlier,
trade has grown exponentially. The number of airports,
seaports, and border crossings have increased and have seen
huge increases in passenger traffic. Funding and personnel
levels have not kept up. I believe that funding is also an
issue with regard to the use of low-wage contract personnel to
provide security services to the port.
Another problem facing Customs in securing our ports is
that I believe the balance between rigorous enforcement and
facilitation of the trade can tip too much towards trade
facilitation. In the aftermath of the September 11 attacks,
there has been a renewed focus on our enforcement role and it
has revealed great vulnerabilities. Yet we need to move trade
and people throughout ports quickly, but we also need to make
sure that we are doing it in a way that protects our security.
In order to do both, we need more personnel.
Other problems mentioned earlier include lack of adequate
technology and timely and accurate manifest information. It
also includes the sharing of information.
The final issue you asked me to address was whether I had
any recommendations to address the problems discussed above.
The most important recommendation I would make is that Customs
needs to be provided with adequate funding. In February 2000,
the Customs Service commissioned a study, referred to as the
Resource Allocation Model, that set optimum staffing levels for
Customs at ports throughout the country. That report, which I
would like to submit for the record, showed a need for 14,000
additional Customs positions. That was before September 11. I
would hope that Congress would act to provide those additional
positions.
I believe that there is also a need to look at recruitment
and retention issues for Customs inspectors. The compensation
and benefits are less generous than many State and local law
enforcement officers and there is a serious concern that
experienced Customs inspectors will leave to go to other
professions, including the air marshals, due to the more
generous compensation package, particularly in the area of
retirement. Customs inspectors should receive the 20-year
retirement benefit available to other Federal law enforcement
officers if Customs is to remain competitive.
Customs also needs upgraded technology. Congress has
provided initial funding for the Automated Commercial
Environment, or ACE, system, which will make remote inspection
of cargo more accurate. I must point out, however, that this
kind of technology can never take the place of physical
inspection.
There is also a need to address the physical security
issues at our ports by setting up secure areas for incoming
cargo and personnel and by ensuring that port security
personnel are well trained.
I would add just one more thing. Customs recently has
entered into a program which has taken away the option of
boarding vessels midstream for Customs. This really has serious
consequences, because, in effect, it leaves Customs inspectors
such as myself and my counterparts blind as to what is in a
vessel sitting in the river.
Many vessels arrive in the Port of New Orleans. They go to
anchor. They actually load or discharge their cargo all while
at anchor, so we will never have an opportunity to board the
vessel to fully look at the manifest, and we use--in the case
of the radioactive container, there are many needs that we have
to look at. We have to match all of these up just to try to
come up with a picture that is reasonably accurate, and this is
about accuracy.
I have heard other panel members discuss the fact that
Customs' area of expertise is the cargo. I believe that is
true. I believe it is supposed to be. But I want to impress
upon you that, by our own study, 56 percent accurate is not a
very good rate.
So we have to use whatever means that are available to us.
That includes the vessel, the chief officer of the vessel, the
information that the steamship line provides us, stevedore
information. We get it from anyplace that we can, and then what
we have to do is basically put all that information together
and extrapolate what we think is the best possible picture of
what is on the vessel.
Thank you. I would be happy to answer any questions.
Chairman Lieberman. Thanks very much to you, Mr. Acosta. We
have got a lot of work to do.
Mr. Acosta. Yes, sir.
Chairman Lieberman. Mr. Laden, you bring a unique
perspective and a very important one here as President of
Target Customs Brokers, and that is the private sector, the
customers. Thank you for being here.
TESTIMONY OF MICHAEL D. LADEN,\1\ PRESIDENT, TARGET CUSTOMS
BROKERS, INC.
Mr. Laden. Thank you, Mr. Chairman. Mr. Chairman, Members
of the Committee, good morning. My name is Michael Laden and I
am the President of Target Customs Brokers, Inc., a wholly
owned subsidiary of Target Corporation. I am also the current
Chairman of the American Association of Exporters and
Importers, and I am an appointee to the Treasury Advisory
Committee on the Commercial Operations of the U.S. Customs
Service, otherwise known as COAC. I would like to thank you for
allowing me the opportunity to express my views under
consideration today.
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\1\ The prepared statement of Mr. Laden appears in the Appendix on
page 133.
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Without trying to become too prophetic or philosophical in
my comments, the atrocities committed against us all on
September 11 have forever distorted the way in which we as a
people will live. It is reshaping and transforming the way we
think about everything, security first, everything else second.
``Just in time'' for some companies has morphed into ``just in
case,'' adjusting lead times and building safety stocks to
offset potential security delays.
Our industry, perhaps more than any other in America, will
be deeply impacted just by the very nature of the business
itself. As you have heard, the fabric of our industry is an
intricate weave of very complex components and stakeholders. A
single import shipment and the documents accompanying it pass
through many hands and many different checkpoints as it travels
to our country. Every one of those handoffs creates new
vulnerabilities.
Now, before I continue with my comments, please allow me to
make one very important distinction. I am not holding myself
out as a security expert. I do rely on others, including the
U.S. Customs Service, for advice and assistance. What I can
offer this Committee today, however, is more than 25 years of
practical operations experience in international logistics and
on Customs matters.
Target's bottom line is this: We want no more nor any less
than exactly what we have ordered when it comes to an
international consignment. Simply put, we want no contraband of
any kind--drugs, laundered money, weapons of mass destruction,
bio- or chemical-hazards contaminating our shipments, and we
certainly do not want to fathom the possibility of fouling our
domestic supply chain. You do not need a very vivid imagination
to know that the consequences of that would be catastrophic.
In part, some of the answers to our security concerns lie
in newer developing technologies, but we must also rely on good
old-fashioned common sense and American ingenuity. All
stakeholders in the supply chain must closely examine their
processes end to end.
I am pleased to report to you and the Committee Members
today that the trade community and the U.S. Customs Service,
under the direction of the Treasury Department, are working
cooperatively together to improve many of the security features
already in place. At the U.S. Customs Trade Symposium held last
week in Washington, Customs Commissioner Bonner called upon the
trade community to advance the partnership currently embracing
Customs and the trade to a new plateau. Speaking on behalf of
Target, COAC, and AAEI, we stand prepared to work side-by-side
with Customs and other areas of the Federal Government in
establishing practical, effective, and cost-efficient methods
to ensure the safekeeping of our supply chain.
In my written statement submitted to the Committee, I
discussed the industry partnership programs currently in place
at U.S. Customs and some of the programs that Target employs to
assure compliance and security. For example, Target's approved
for purchase and vendor compliance programs are well positioned
to complement our active participation in the Business Anti-
Smuggling Coalition, otherwise known as BASC. BASC is a
voluntary industry-led, Customs-supported program that was
established in 1995. It was a natural evolution of the Carrier
Initiative Programs launched by Customs in the late 1980's and
early 1990's.
As Customs' air and sea interdiction efforts successfully
closed off the smuggling corridors, the drug cartels
increasingly looked for new and more innovative methods of
moving their illicit products to market. As a result, they
began targeting ordinary, law-abiding, legitimate commercial
cargo and the BASC program was the end result of the trade
community coming together and telling the world that we do not
want contraband in our shipments.
All of these programs are vigorously enforced and engaged
at Target and we will be coordinating our deterrence and
detection efforts throughout the company. As we speak, these
programs are being strengthened and retrofitted to discourage
supply chain incursions.
And so now that we may begin a lively and active dialogue
on these vital matters, I relinquish the rest of my time to the
Committee for questions. Mr. Chairman, thank you for allowing
me to appear before you today.
Chairman Lieberman. Thanks very much, Mr. Laden, a very
interesting piece of the picture. That is what one of the
witnesses on the first panel said. Sometimes when folks go, and
unfortunately, he mentioned another store chain in Wal-Mart,
but when they go into Target, they just think about the
inventory coming out of the back room, but obviously a lot of
it comes from all around the world and it puts you--I am
fascinated that this company, Target Customs Brokers, exists,
but I obviously understand why. So thanks for your testimony.
Mr. Laden. Sure.
Chairman Lieberman. Gordon Fink is President of Emerging
Technology Markets and is well positioned to testify about the
range of technologies that can be used either by the government
or the private sector to improve security at our ports. Thanks
so much for being here.
TESTIMONY OF W. GORDON FINK,\1\ PRESIDENT, EMERGING TECHNOLOGY
MARKETS
Mr. Fink. Thank you very much, Mr. Lieberman. I appreciate
the opportunity to summarize my statement, which I ask be
included in the record.
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\1\ The prepared statement of Mr. Fink appears in the Appendix on
page 138.
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Chairman Lieberman. We will do it, without objection.
Mr. Fink. Other Members of the Committee, and I applaud
your holistic approach to looking at government programs. I am
going to give you some personal examples from my career in the
government where I can cite technology that can help out.
Technology is being used, and I will mention and highlight
just a few areas. One, to improve the asset utilization of the
industry, the truck tractors, the trailers, and the use of the
chassis. I am going to give you some examples of that; to meet
the demands of the shippers and the constant need to know where
their shipment is so that they know when they can advertise--
when they can start moving product into their stores.
But significantly, just recently announced by the FBI is
the increase in cargo theft. This was announced by the FBI at
an American Trucking Association meeting a couple months ago.
It is the fastest growing crime in the United States, and they
mentioned it is at $12 billion a year. A lot of that cargo
theft crime goes unreported. One of the reasons is that the
penalties are lax, there is a high priority or a high payment
for some of the cargo value. Pentium chips are more than worth
their weight in equivalent cocaine and they are not marked so
it is easy to resell them. And low risk as far as the law
enforcement--the risk of being caught and the penalties are not
very good.
This also raises the thrust of stealing one of the trucks
or one of the cargo containers even after it has arrived in the
United States and use it as a delivery mechanism, as a weapon
of terror. I have some ideas I will share with you about the
technology that can address that.
The technology is used extensively by the truck tractors
now. The long-haul trucking firms, such as Schneider, J.B.
Hunt, etc., know where their tractors are, the status of the
engine, the behavior of their drivers. They can remotely shut
it down. But more recently, they have chosen to put in the same
technology in their trailers, because that asset can be
decoupled from the tractor. They need to know its status, its
location, when the doors are open, when the doors are closed,
and it is part of asset management as well as knowing where
their cargo is.
The chassis--some on the Committee may not know what I mean
by chassis, is a frame with pins on the end of it that the
container sits down on and it is the device that moves a lot of
these containers out of the ports, either to railheads or to
their destination. There are about 750,000 of those chassis in
use right now.
While Senator Collins has left--one of the things that I
would like to address is the fact that electronic seals for
containers is now being tested. There is a pilot program in the
Northwest part of the United States where cargo entering
Seattle has an electronic seal affixed to it. It is for Customs
in-bond shipments that go across the border at Blaine and into
Canada. The technology is starting to emerge and most of the
technology is now available. I am happy to see that it is
available from several different vendors so that you can start
to get some competition and help make the business case in the
decision to adopt the technology.
I have chosen to spend a lot of my time working with the
Maritime Administration in a program they call the Cargo
Handling Cooperative Program, which is described in my
statement. It is a program to look for technology and make it
available to the members of the industry--the carriers, the
shippers, so that they can help understand what the technology
is, make sure that they know what its maturity is, and then
also help them make the business case for it.
Some of the technology that is very relevant is non-
intrusive inspection, the so-called gamma ray inspection, which
was started at the land border crossings between Mexico and the
United States by U.S. Customs Service to inspect the trucks and
some containers--mostly trucks and vehicles with a high degree
of success. It does fit very well--with reference to some of
the comments by previous panel members--to be deployed overseas
at the point of embarkation.
So in addition to getting a manifest of that particular
container, you can get the electronic image of it. It can be
rescanned when it comes into the United States. The scanners
scan so when it is in motion, not at 60 miles an hour, but
roughly up to 10 miles an hour, and it is also used on railroad
trains the same way. They can rescan it to see if there has
been any change. The scanning device can see if there is
anything that is inconsistent with the manifest. These
technologies are mature and ready for application.
I would just like to conclude by making a couple of
comments. My bio mentions that I helped set up, and run the El
Paso Intelligence Center for DEA. The reason it was in El Paso
was to put outside of the Washington area so that we could get
Customs, Coast Guard, and INS agents, along with DEA agents, to
work in harmony against the drug interdiction problem. It did
work and it was very highly successful, including sharing that
information with State and local authorities.
There is a model that works in trying to get the different
organizations to work and provide strategic intelligence--what
may be coming in in what form, as well as tactical
intelligence. Approximately 50 percent of the phone calls that
were made by people in the field got some form of intelligence
back. There was a high hit rate in the databases.
I appeared before many committees of the Congress that did
not want me to merge those databases together as is now being
done in the counterterrorism area. When I was with the CIA, I
helped set up the Counterterrorism Center with technology
support. But at the time, there was a fear of merging those
databases. So we had the individual agents go into their
databases, pull out what they had, and made an assessment. So
we had kind of a round robin assessment and provided the
information back in the field.
I also did have the pleasure, of working for Bob Ehinger,
who headed the International Trade Data System activity under
the Department of Treasury. One of the significant outcomes of
that activity is to combine all of the information requirements
of the 100-plus Federal agencies that were mentioned before
into one common database so that those people that import goods
into the United States only have one form to fill out. It makes
the scanning, the review of that data, it was mentioned
earlier, much easier to do.
So I have come here as a technologist talking about the
maturity of technology, but I must also say that the response
has got to be balanced by some of the other techniques, such as
looking at the documentation--where that container has been,
where the vessel has been, the crew on the vessel--as a part of
the whole operation.
That concludes my summary.
Chairman Lieberman. Thanks, Mr. Fink. That is very
interesting.
Maybe I will take off from your testimony and ask the other
witnesses the extent to which we are seeing some of the
technologies that Mr. Fink describes embraced or utilized by
the private and the public sectors, the idea of--mostly in the
trucking business, but the idea that you can not only follow
where the truck is, but almost what the truck driver is doing
and then what is being opened and closed and when, and also
this very interesting X-ray technology, which I gather lets you
look inside a container----
Mr. Fink. Yes, sir.
Chairman Lieberman [continuing]. To see what is there
without having to open it. What is the rate of acceptance of
these? Maybe I will just go down, to the extent that you know,
starting with you, Mr. Laden, in the private sector?
Mr. Laden. The rate of acceptance is good. Some of the
technology, though, is cost prohibitive still, as Mr. Fink
suggested. There is an increase in availability of this kind of
technology, but today, on seaborne--most of Target's business
is marine.
Chairman Lieberman. Right.
Mr. Laden. On Target's business, we are not using
transponders or GPS technology yet. We are using reusable
seals. But we have found there is other technology or design
flaws. The drug and contraband smugglers will just literally
take the doors of the container off, defeating any seal that
you have on, and replace the doors. We need as an industry to
look at better design and what can be done.
Chairman Lieberman. Mr. Acosta, are you seeing much of this
new high-tech stuff coming into your work as a Customs
inspector?
Mr. Acosta. Yes. We utilize a gamma ray machine. Our
problem is, I think we have the second prototype of the gamma
ray machine, so we did real good in getting in there early to
get a machine, but----
Chairman Lieberman. Yes.
Mr. Acosta [continuing]. So we have some down time with it.
They are looking at it right now and hopefully we can upgrade
that. We could probably use more than one, and because we have
so many ports that are involved in our area, we take it on the
road on occasion. So we have an opportunity to travel, for
example, to the Gulf ports in Mississippi.
Chairman Lieberman. And the containers go through it
relatively quickly?
Mr. Acosta. Yes. It is funny because it is hard to--
people's paradigms. So you have a truck driver and you explain
that you can drive through this at about five miles an hour. It
is OK. And they will drive up to a certain point and they will
stop, because their idea is, well, if they are taking a picture
of the container, it is going to be blurry. It is difficult to
change that paradigm, but yes, you can.
Chairman Lieberman. Of course, that is a great advance,
because then you do not have to open it up. And the
reliability, you have found, is pretty good?
Mr. Acosta. It is reasonably good. Our picture is very
small for what we have, so it is a little more difficult. What
is good for us, for example, as in the story that I told you
before, we can set this up and we can run empty containers
through so we do not have to pop a seal and open the door,
because it will tell us for sure that a container is empty. It
will tell us if there is something in the container.
Mr. Fink. I might mention, Mr. Chairman, the Port of Miami
has found a lot of stolen vehicles leaving their port in what
were thought to be empty containers, through X-raying empties
that are departing the United States.
Chairman Lieberman. Yes. That is important.
Mr. Acosta. We do the same thing. We have an inbound and an
outbound team, and, of course, they are looking for armaments,
they are looking for stolen vehicles, they are looking for
currency. So we can use that gamma ray technology both on
inbound cargo and outbound cargo.
One thing I would say about containers, though, is we talk
about containers and containers can simply be thought of as a
box. It is no more or no less than a box that you can put
things in, just like any other box. But we are talking a lot
about what you might find that is put into the box, maybe
something in the cargo that is put into the box or something
that is thrown in along with the cargo. But along those lines,
we have to remember that the box itself accounts for about half
of the seizures that we make. So within the walls, in the
floor, in the roofing, in the tubing that the container is
constructed in, many times, that is where we find contraband
hidden, and a lot can be done--there is a lot that can be
hidden in the box itself without talking about the space where
you store cargo.
Chairman Lieberman. Thanks. Chief Cook, have you seen any
of this high-tech stuff coming into use in the Port of Memphis?
Mr. Cook. Our Auto Theft Cargo Task Force has and is more
and more familiar with this type of equipment every day. But
usually when we come into contact with these boxes, they are
already empty. We have found contraband in quite a number of
them while doing other investigations, but yes, we are becoming
more familiar with it every day.
Chairman Lieberman. Thanks to all of you very much. I am
going to call on Senator Thompson because I notice we have a
vote that has just started, so I want to give my two colleagues
time to ask some questions.
Senator Thompson. Thank you, Mr. Chairman.
I want to follow up on the technology question. I guess
most people would wonder, if we have developed this technology
to this advanced stage, why are we not inspecting more? What
are the limits of technology? I mean, just for the layperson to
understand, can scanning technology with a high degree of
accuracy make a determination with regard to potential weapons
of mass destruction or other things of that nature, and to what
extent is it a technological limitation and to what extent is
it a cost limitation?
Mr. Fink. I think it is----
Senator Thompson. Why are we not scanning more stuff and
why do we not feel more secure if we have this capability?
Mr. Fink. One of the things is the initial cost. These
systems range up to $1 million apiece, and as you get more of
them in operation, that cost will go down. Then there is the
person who is looking at the image. We can do a lot to make
that process move into pattern recognition into the computer to
assist an operator.
But there still are all deterrents, and while the payoff is
high, it is not going to be 100 percent, and one of the things
that we saw, of course, in the drug business and we now see in
the theft business are organized criminal elements involvement.
So they are very much aware and drilling out parts of the
container and inserting some of their cargo in it, but you can
still see some of those.
I am encouraged because the technology is proven, and I
think with quantity purchases it will be deployed. As you move
inspection overseas, it raises another issue. Now you are
asking the port of embarkation of that container to perform the
imaging. But it is a global problem. Terrorism is a global
problem. Maybe that will be part of what will help induce some
of them to do it.
One other thing I would just add. I do not know if Rear
Admiral Larrabee is here, but in some of the U.S. ports, they
have volunteered to put some of this scanning equipment in just
to keep the flow of containers going. When Customs decides to
pull something, it disrupts that flow. So they have said to me,
I would invest in the gamma-ray equipment in a joint project
with Customs in order to keep the cargo flowing. Some of the
terminals do not have a lot of land to store the cargo on when
Customs decides they want to conduct inspection, they disrupt
the flow. So there are a number of business factors.
Senator Thompson. Mr. Acosta, what would be your response
to my question on why we are not inspecting more than 2 percent
in some categories?
Mr. Acosta. Somewhat the same. The systems are very costly,
and so Customs has X amount of systems. We, of course, would--
ideally, if I could set it up in New Orleans, I would like to
see a system up-river and one down-river--there are two
separate areas that are sort of divided areas--and then another
system that we could lend to some of the smaller ports, but we
have one system.
The second thing is that it requires personnel to run the
system. So when you set up a gamma ray machine, you have to
establish the perimeter. There is an element in there that can
be hazardous to individuals, so we have to be able to make sure
that we have the truck run through and to set up the flow of
trucks. We have to have people inside working the machine,
setting the machine up. We also have to have people available
who, if necessary, will open and look in the containers
immediately. Some containers we will target for further
examination. Others, we are so interested in the image that we
are seeing, we need to get into it right away.
So that is upwards of 10 people, and I do not know if you
remember, but when I told you that the personnel put in New
Orleans today is 29 inspectors, that is a third of your
workforce. It is very difficult. It is cost for the equipment
and it is personnel. If you could give us more equipment and
the personnel to operate it, we would do all of those things.
Senator Thompson. Why did you stop instream, or were you
told to stop instream?
Mr. Acosta. They said it was a safety issue. I think that
is bogus. I really think it is bogus.
The second thing, and I did not mention it because I was
conscious of the fact that I had a small period of time to
deliver the statement, the second thing is that we have been
questioned recently on the number of enforcement boardings that
we have determined. I guess that is a budget issue and that is
a problem because we do target vessels and we are conscious
of--and I worked on the task force that gave us a boarding
policy 2 years ago and we are not living up to that boarding
policy. As a matter of fact, it just changed.
So it bothers me that if we are true to what the policy
said and we are doing vessel targeting based on all the
information we had, and understand that sometimes it is
difficult to get that information, that now, we have somebody
that comes back and questions, well, you have too many
enforcement boardings, and I do not understand that.
Senator Thompson. Thank you for that. That is important.
I do want to thank Chief Cook for being here. He is
responsible for the investigation of all the crimes at the
international port in Memphis. You have one of the better
interagency coordination groups, I think, going. You pointed
out the unique circumstances there that you have to deal with.
It is not only the fourth largest inland port in the country,
but the second largest inland port on the shallow draft portion
of the Mississippi River and serves as a transportation hub and
warehouse and distribution center, and perhaps no other port in
the country shares the same characteristics as Memphis.
I am wondering about a law or an approach by the Federal
Government that is a one-size-fits-all. It seems to me that
Memphis has some unique characteristics--inland port, heavier
concentration of activity, and so forth. Do you see your
situation as maybe needing some kind of different attention,
than some other places?
Mr. Cook. I think it is not recognized as the port that it
is. Memphis has never, until the last few years, really
recognized its own potential as a distribution center, but it
is growing leaps and bounds by day. In fact, I mentioned the
Frank Pidgeon Industrial Park, which is a new industrial park
that is being developed on the Southwest corner, just South of
what is now called President's Island, and it is going to be at
least half as large as the industrial complex on President's
Island.
So much of the industry that I said is in Memphis, and
those that come into Memphis, a large portion comes into
Memphis, but it is distributed within 600 miles of Memphis. And
because of the bridges, we estimated that about $2 billion
worth of commerce crosses those bridges each day. We do not
think that it gets enough attention as far as the types of
visibility patrols.
Now, we are doing things as far as our agencies that I
mentioned, Tennessee and Arkansas agencies who both join in
taking care of riding on the bridges and removing vehicles and
so forth on the bridges. But as far as the actual, what I think
should be 24-hour marine surveillance of the bridges from
below, and also attention to the barges that are so large and
so potentially dangerous as far as striking the bridges and
just completely removing them from the river itself.
I think that is a major concern, because one barge can
actually take out both bridges, and especially from a vessel
that is coming down-river. If that were to happen, it would
really destroy commerce in the surrounding area. In fact, I
believe it would actually kill it for at least 2 or 3 years it
would take to rebuild the bridges.
Senator Thompson. I think you are right. A lot of people do
not understand the amount of traffic and the amount of activity
going on there and that makes it a port that deserves much more
attention. We appreciate what you are doing there.
Mr. Cook. Thank you very much, sir.
Senator Thompson. We also appreciate you taking a real
leadership role in terms of the Southeast in your interagency
work.
Thank you, Mr. Chairman.
Chairman Lieberman. Thank you, Senator Thompson.
I thank the members of this panel as well as those on the
first panel. I think the Committee has learned a lot as a
result of the testimony today. I would like to think about, at
the next hearing on this subject, calling the heads of the
Federal Government agencies involved and ask some of the same
questions of them that you have raised here.
There is never enough time at these hearings, but there are
a lot of questions unanswered, so I am going to leave the
hearing record open for 2 weeks, and if it is all right--and
even if it is not all right--we are going to submit some
questions to you in writing to follow up and look forward to
your answers.
In the meantime, I thank you very much for your time and
the great contribution you have made. I hope we can serve as
advocates for what all of you want, which is a system that is
both economically productive and efficient but is also secure,
most important of all.
The hearing is adjourned.
[Whereupon, at 11:58 a.m., the Committee was adjourned.]
A P P E N D I X
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