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30–651 PDF 2006

FISCAL YEAR 2007 COAST GUARD

AUTHORIZING LEGISLATION

(109–81)

HEARING

BEFORE THE

SUBCOMMITTEE ON

COAST GUARD AND MARITIME TRANSPORTATION

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JUNE 20, 2006

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

JEAN SCHMIDT, Ohio

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

(II)
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

FRANK A. LOBIONDO, New Jersey, Chairman

HOWARD COBLE, North Carolina

WAYNE T. GILCHREST, Maryland

PETER HOEKSTRA, Michigan

ROB SIMMONS, Connecticut

MARIO DIAZ-BALART, Florida

DAVID G. REICHERT, Washington,ViceChair

CONNIE MACK, Florida

LUIS G. FORTUN ̃ O, Puerto Rico

CHARLES W. BOUSTANY, JR., Louisiana

DON YOUNG, Alaska

(Ex Officio)

BOB FILNER, California, Ranking Democrat

CORRINE BROWN, Florida

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

MICHAEL M. HONDA, California

ANTHONY D. WEINER, New York

BRIAN HIGGINS, New York

BRIAN BAIRD, Washington

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Baumgartner, Rear Admiral William D., Judge Advocate General, U.S. Coast

Guard .................................................................................................................... 8

Nordquist, Professor Myron H., Center for Oceans Law and Policy, University

of Virginia School of Law .................................................................................... 26

Stevenson, Douglas B., Director, Center for Seafarers’ Rights of Seamen’s

Church Institute of New York and New Jersey ................................................ 26

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Filner, Hon. Bob, of California ............................................................................... 47

LoBiondo, Hon. Frank A., of New Jersey .............................................................. 49

Oberstar, Hon. James L., of Minnesota ................................................................. 62

Young, Hon. Don, of Alaska .................................................................................... 77

PREPARED STATEMENTS SUBMITTED BY THE WITNESSES

Baumgartner, Rear Admiral William D ................................................................ 42

Nordquist, Professor Myron H ................................................................................ 50

Stevenson, Douglas B .............................................................................................. 65

SUBMISSIONS FOR THE RECORD

Baumgartner, Rear Admiral William D., Judge Advocate General, U.S. Coast

Guard:

Response to a question from Rep. Oberstar concerning authorized strength

and current levels ............................................................................................. 13

Response to a question fron Rep. Oberstar concerning types of data gathered by UAVs .................................................................................................... 15

Response to a question from Rep. Coble concerning overall enlisted and

officer strength .................................................................................................. 18

ADDITION TO THE RECORD

Reserve Officers Association of the United States, statement ............................. 78

(1)

FISCAL YEAR 2007 COAST GUARD

AUTHORIZING LEGISLATION

Tuesday, June 20, 2006

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COAST

GUARD AND MARITIME TRANSPORTATION, COMMITTEE

ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, D.C.

The subcommittee met, pursuant to call, at 2:35 p.m., in Room

2167, Rayburn House Office Building, Hon. Frank A. LoBiondo

[Chairman of the subcommittee] Presiding.

Mr. LOBIONDO. The Subcommittee on Coast Guard and Maritime

Transportation will come to order. Today the subcommittee is

meeting to review the discussion draft of the Coast Guard Authorization Act of 2006, but we are very pleased that the Chairman of

the full committee, Chairman Young, is here; and I am going to

defer an opening statement to allow Chairman Young to have this

time.

Mr. Chairman.

Mr. YOUNG. I thank you and I do apologize to my good Coast

Guard people who are sitting at the table, but I have an opening

statement and I will have to leave.

I want to thank you, Mr. Chairman for having this important

hearing of the Reauthorization Act of 2006. And for those in the

room, we will finish 2005 sometime, hopefully, this week or next

week. This is a constant battle but we will get it done. But I think

it is vitally important we go forward with 2006. This bill does provide a funding level that will give the Coast Guard the resources

it needs to carry out what we have charged them with, not only in

its traditional missions but its new homeland security missions.

As we saw last summer, the Coast Guard provides vital services.

We all know that. I am extremely pleased with what they have

been able to do in Alaska, and I am very pleased to say that we

will continue that effort.

The second panel—and this is one thing I am very interested in

discussing, whether to set limits on the currently open-ended penalty for incorrect payment of seamen’s wages.

I would like to say one thing that the witnesses will be testifying,

and I know what they will be testifying to because actually I read

part of it. This wage statute was first passed in 1790. It was last

admitted in 1915. In 1790 it was only 12 years after Captain Cook

explored much of my home State for the first time. In 1790 the voyages could last for years; and once a vessel was gone from port,

remedies against the owner were impossible to enforce. Therefore,
2

a severe and immediate and flexible penalty was more than warranted.

In 1915, only 3 years after the Titanic sank in the frigid North

Atlantic, sending 1,523 passengers and crew to their deaths, given

the communications technology available in the second half of the

18th century, it was years after Captain Cook’s voyages ended that

the world learned of his discoveries. Only after the publications of

his journals did they find out.

For those in the room who are under 30, it may be a shock today

that Captain Cook neither blogged nor glogged nor Podcast from

his flagship, the Endeavor. Likewise, had communication technologies available today been available in 1912, rescue vessels

would have likely arrived to save virtually those all that perished

on the Titanic.

So my question to the witnesses would be: In light of the communication revolution that has occurred in the total global climate—

I say ′′total′′ because even India has better communication than we

do in many areas, as well as Indonesia and, as well as of course,

China—the ability to track vessels and their corporate owners and

the ease of travel around the world, I think it is possible to update

a law that was first passed before Nelson defeated Napoleon at

Trafalgar to reflect the technology available to today’s seaman.

So for the second panel I hope that you address that issue because, Mr. Chairman, it is crucially important that although some

will say this is to protect the seamen—and I understand that, I

want to protect the seamen because I am a licensed mariner and

I will continue to do that—but there is a possibility that this law

should be revived and studied and, to the extent revived, to allow

I believe a proper solution to a very serious problem.

I have done a little research and I think we have one case where

there was a technical error of payment to a seamen of $20, but it

compounded over approximately 10 years and for some reason it

was not disclosed, and it ended up being a $400,000 or better penalty against the owners, which they never realized was $20. And

for you trial lawyers in the room, shame on you. This was not the

intent of the law. It was to protect the vessels, owners, and the seamen, not to be used as a tool by a group of trial lawyers to make

money. And that is how it is being used today.

Mr. Chairman, I am advising you that it is my intent that I am

trying to make sure that this is adjusted and made more reliable

in today’s modern communications so that we will have a ′′yes′′ in

an attempt to protect the seamen, but not be taken advantage of

or advantage of the owner of vessel.

Mr. Chairman, I yield back the balance of my time.

Mr. LOBIONDO. Thank you, Chairman Young.

I ask unanimous consent that Mrs. Kelly be allowed to sit as

part of this committee for this hearing today. So ordered.

Again, the subcommittee is here to review a discussion draft of

the Coast Guard Authorization Act of 2006.

This hearing will give all the members of the subcommittee an

opportunity to consider the authorized funding levels and the legislative language that is included in this draft bill. The draft bill

would authorize nearly $8.3 billion in funding for the Coast
3

Guard’s fiscal year 2007. This authorization includes funding to

support each of the Coast Guard’s important missions.

For purposes of the discussion, the draft bill would authorize $1.1 billion for the Coast Guard’s integrated deepwater program.

Deepwater will result in the complete recapitalization of the Coast

Guard’s vessels, aircraft, and associated communications and control systems. Because the Coast Guard has been tasked with increased responsibilities following September 11, the service’s legacy

fleet of vessels and aircraft are deteriorating at an alarming rate.

As I have in previous years, I intend to support an increase in the

authorized funding level for the deepwater program as this bill

moves forward. Additional funding is necessary to accelerate the

production of new deepwater assets and to sustain the service’s existing legacy assets.

I cannot overestimate my concern with the pace of the deepwater

program. Each day the men and women of the Coast Guard are

faced with the possibility of a major asset failure that puts the

safety of the personnel and the success of their missions in jeopardy. I am particularly concerned about the service’s 110-foot patrol boat class which continues to suffer from hull breaches and unexpected maintenance needs. First, the Coast Guard planned to

convert the remaining 100-foot patrol boats by lengthening the

hulls and improving the electronic and communication systems

that have become outdated. Following construction, however, the

Coast Guard realized that the 123-foot converted boats were

plagued with design programs and, as a result, the conversion program has been terminated.

To address the increasing gap in patrol boat readiness, the Coast

Guard then proposed to accelerate construction of the Fast Response Cutter. Just a few months ago, however, the Coast Guard

postponed construction and acquisition of the Fast Response Cutter

due to concerns about the vessel’s proposed design.

I am deeply concerned by these problems and, as a result, I

would urge the Coast Guard to move quickly to identify an available design to replace the 110-foot patrol boat class. We must complete this program with all deliberate speed. I urge my colleagues

to support funding levels that will not only allow the Coast Guard

to acquire the assets they need, but would allow the program to be

accelerated and brought on line over the next 15 years rather than

the 25 years of the revised plan.

In addition to the authorization of the fiscal year 2007 funding,

the draft bill proposes to make several amendments to current law.

For example, the bill contains a proposal that would amend the

Maritime Drug Law Enforcement Act to establish a civil penalty

for individuals who possess personal use quantities of narcotics on

a vessel or at a maritime facility. Drug use on vessels can have a

deadly consequence, and this provision will give the Coast Guard

another tool to help keep our waterways safe.

This hearing on the draft bill is the first step in the process to

develop a bill that takes a balanced approach to providing the resources and authorities necessary to support each of the Coast

Guard’s many and varied missions.

I want to take this time to again commend the men and women

of the Coast Guard for their hard work and self-sacrifice. I want
4

to thank the witnesses for being here this afternoon. We look forward to their testimony.

Now I turn to Mr. Filner.

Mr. FILNER. Thank you, Mr. Chairman, and thank you for this

hearing today. I know you are trying to mark up the legislation

this week, and the full committee soon after that. So we have a lot

of things to work out.

The seamen’s wage penalty statute—because, as the Chairman

stated, it was enacted in the very first Congress in 1790. I asked

the staff if the Chairman was here for that.

Mr. LOBIONDO. I think Mr. Oberstar was.

Mr. FILNER. LoBiondo, you are getting better over the years.

Mr. LOBIONDO. Work with me.

Mr. FILNER. It is my understanding that in 2003, Royal Caribbean Cruises—oh, right on schedule.

Mr. LOBIONDO. We were just praising you, Mr. Oberstar.

Mr. OBERSTAR. I thought so.

Mr. FILNER. Your ears were burning. We wanted to get some personal testimony on the first Congress as it passed the seamen’s

wage penalty statute, so I know you will do that for us.

Mr. OBERSTAR. I was probably there.

Mr. FILNER. It is my understanding that in 2003 Royal Caribbean Cruises reached a settlement agreement for unpaid overtime

wage claims for over $18 million, and a few years later Norweigian

Cruise Lines reached a settlement agreement for similar unpaid

wage claims for approximately $25 million. Now it seems that the

cruise lines are seeking to have the Wage Penalty Act changed to

decrease the chances of them ever being penalized if they fail to

pay the wages due without sufficient cause.

So I am looking forward to today’s hearing. It is unfortunate that

the cruise line industry is not participating in these hearings so

that the subcommittee can get the information it needs before deciding on whether or not to change this statute.

Thank you, Mr. Chairman for scheduling this hearing. I look forward to working with you.

Mr. LOBIONDO. Thank you.

Mr. Simmons.

Mr. SIMMONS. Thank you, Mr. Chairman. I have reviewed the

document that we are discussing here today. I am particularly interested in the provision on the possible movement of the Coast

Guard Band and the 180-day notice which I think is very appropriate. I know that members of the band live very happily in my

district, and the idea that we move the band to some other location

would be a matter of concern to them. So I think it is important

that we provide those individuals with that protection. I am also very interested in section 401 which authorizes $3 million to improve the boarding team communications. That has been

an issue that has been under review by the Coast Guard R&D Center. They have some very interesting new protections, new technology which helps protect our ′′coasties′′ as they board vessels.

And I think that is a very positive development.

Mr. Chairman, I do intend tomorrow to offer an amendment on

the issue that has occupied the attention of the Coast Guard Academy, the issue of sexual harassment and violence. What I intend
5

to do is offer an amendment that would require the Coast Guard

Academy to adhere to the same requirements that apply to other

service academies.

I would be interested if our witness has any comments on that,

but I feel it is appropriate that the service academies have a uniform approach to this important issue, which is why I would be interested in conforming the Coast Guard Academy to the other service academies on this subject. That being said, Mr. Chairman, I

yield back the balance of my time.

Mr. LOBIONDO. Thank you Mr. Simmons.

Mr. Oberstar, thank you for joining us.

Mr. OBERSTAR. Well, it is always a pleasure to be with you, Mr.

Chairman. And I appreciate the cooperation of the full committee

chairman, Mr. Young, and you in scheduling this hearing after the

issue—one of the key issues, but the fundamental issue of this

markup hearing today and the markup to follow is that of seamen’s

wages. And at the time, I said we had not had hearings on the

matter, we ought to explore the issue in full open committee hearing. We will have that opportunity today; although I note—with

Mr. Filner—with regret that the cruise lines are not here since

they are the principal focus of concern.

There are a number of issues that I will want to explore with

witnesses. First is a proposal to change the penalty as it applies

to foreign flag cruise ships operating out of U.S. Ports, requiring

the seafarer to prove that the employer did not have sufficient

cause to pay him. I think that could be a very serious, even insurmountable obstacle.

To notify an employer of errors in the paycheck within 180

days—180 days might seem to be a reasonable amount of time, but

when you have language barriers, when you have displacement circumstances, and the person does not have all the facts at hand, it

becomes very difficult to obtain the information with which the seafarer must make his case.

Allowing—sort of allowing in quotes, the seamen to pay for his

own health insurance. Courts have held that the vessel owner is

liable to pay for maintenance and cure in the quaint ancient term

of art.

Authorizing pay to be electronically deposited. That is something

we can discuss on how that will be accomplished and what way will

it be done. I think that is a matter that probably can be worked

out. But of concern to me is that the proposal to let the vessel

owner have 4 days after the seamen is discharged to pay what he

has earned, even though the person may well be in some godforsaken country far from our shores and far from that vessel by

the time those 4 days are up.

How do you obtain justice? It virtually eliminates the possibility

of class action suit in this discussion draft, and it allows shipowners who intentionally defraud a seaman of his wages to avoid

paying them, even if the seaman does not catch up with that fraud

within 30 days after discharge.

Now it can be argued, as some have, that this set of laws under

which ships operate today was written in an earlier era. Well, it

was written 220 years ago. But many of the circumstances have

not changed greatly from the time of sailing vessels and wooden
6

hulls. So I just want to see what justification there is for these

changes, and, more importantly, what the consequences are for the

person, for the individual. Even though circumstances have

changed greatly, ships are fast, iron hulls, steel hulls and electronics and all the rest, you still have operators who are not playing it straight. And in the end, I know from my recollection of miners working in the underground iron ore mines, they were exploited

until we had a union. And only with the union were we able to get

justice.

And before we change a law that has operated for a very long

time in the favor of the worker who makes the vessel possible, we

have to be very, very sure that we are doing the right thing for the

one who puts himself at risk.

Thank you, Mr. Chairman.

Mr. LOBIONDO. Thank you, Mr. Oberstar.

Mr. Diaz-Balart, do you have any opening statement?

Mr. DIAZ-BALART. No, thank you.

Mr. LOBIONDO. Mr. Fortun ̃ o.

Mr. FORTUN ̃ O. No.

Mr. LOBIONDO. Mr. Baird.

Mr. BAIRD. I just have a very brief opening statement, but really

on more of a personal matter. Two weeks ago one of my staff members lost her son in a boating accident off the coast of California,

and I just want to thank the Coast Guard for their prompt response, professionalism. They cared for the family, and you folks

did everything you could to save this young man, and I am extremely grateful and I want to express that on behalf of my staff

and their family. Thank you.

Mr. LOBIONDO. Mrs. Kelly.

Mrs. KELLY. Thank you. We forget that so much of the mission

of the Coast Guard is helping people in distress and for that all of

us need to be grateful and thankful.

Chairman LoBiondo, last month before the hearing before the

subcommittee, Rear Admiral Joseph Nimick, a colleague of today’s

distinguished witness, Admiral Baumgartner, acknowledged that

the vessels currently supplied by the Coast Guard to protect the

nuclear facility along the Hudson River in my district are inadequate to intercept and destroy waterborne threats. This appears

to be true for all U.S. Nuclear facilities that lie along navigable waters, not just the one that lies 25 miles north of New York City.

I introduced legislation to fix this glaring gap in our Nation’s security chain just last week. My bill, which is H.R. 5614, would

make the Coast Guard the lead Federal agency for naval defense

of U.S. Nuclear facilities on navigable waterways. As I have said

in previous hearings before this subcommittee, a tugboat with no

fixed armament and weekly flyover do not adequately address the

threat to a nuclear facility in the middle of the Nation’s top terror

target.

While in New York, we maintain an added layer of protection

from the New York State Naval Militia. These are brave volunteers

who are underequipped and lack the proper authority to interdict

in the face of danger. My bill would require the Coast Guard to

provide weaponry on board of such security vessels capable of
7

intercepting and destroying potential threats. The tugboat class

vessels currently provided lack capable hardware.

Finally, my bill would allow the Coast Guard Commandant to

work with the Energy Department to determine what facilities are

at greatest risk, what those risks are, and how they can best be

addressed.

Chairman LoBiondo, Admiral Baumgartner, I recognize these are

new tasks and they would require increased investment on the part

of Congress in the Coast Guard and in the Coast Guard capabilities. But I have long been a supporter of the deepwater program.

I remain committed to obtaining the resources necessary for the

Coast Guard to carry out these functions, and I and my constituents feel these are vital to the national security. I hope that as the

reauthorization moves forward, I will be able to work with you,

Chairman LoBiondo and Chairman Young, and others in incorporating this legislation into the reauthorization of this act.

I strongly support the Coast Guard. I am most appreciative of everything the Coast Guard does to keep us all safe in navigable waters, and I thank you, Rear Admiral Baumgartner, for coming and

talking to us today.

Mr. Chairman, I yield back the balance of my time.

Mr. LOBIONDO. Thank you.

Ms. Brown, do you have an opening statement?

Ms. BROWN. Thank you. I wanted to thank the Chairman and

the Ranking Member for holding today’s hearing on the Coast

Guard. The Coast Guard has been protecting our shores for more

than 200 years and they have done an outstanding job.

The Coast Guard was the first agency—and I often point that

out—to react to the terrorist attack of September 11, and was the

only agency in the Bush administration to actually do their jobs

during Hurricane Katrina. But we know that they also get caught

up in red tape in the Department of Homeland Security, and we

need to keep the Department’s feet to the fire so they do not stand

in the way of the Coast Guard’s mission.

This year’s reauthorization includes several provisions that are

extremely important to the cruise industry, which has a $13 billion

impact on my home State of Florida. These important changes in

the wage, penalties, and cash payment provisions bring those maritime laws into the modern era and recognize the major changes

that have taken place in employee rights and modern thinking. The

wage penalty change provides an element of fairness for both the

cruise industry and their workers by ensuring that seamen get

their full pay, while protecting their employees from unfair penalties.

The direct deposit provision provides additional banking options,

saving seamen money that should be going to their families. Each

payday, these employees are forced to pay Western Union hundreds

of their hard-earned dollars just so they can send their paychecks

back home. It also adds a new level of security by removing the

temptation of a safe full of money from each cruise ship, which I

believe may have been the rationale for the last November pirate

attack off the coast of the Somalia. I appreciate the committee including these provisions and I hope they remain throughout the

bill.
8

Mr. Chairman, I yield back the balance of my time and I ask my

full statement be entered into the record.

Mr. LOBIONDO. Without objection.

We are now very pleased to welcome Rear Admiral William D.

Baumgartner, Judge Advocate General for the United States Coast

Guard. Admiral, please proceed.

TESTIMONY OF REAR ADMIRAL WILLIAM D. BAUMGARTNER,

JUDGE ADVOCATE GENERAL, UNITED STATES COAST GUARD

Admiral BAUMGARTNER. Chairman LoBiondo, Representative Filner, and members of the subcommittee, good afternoon and thank

you for the opportunity to testify on the administration proposal of

the Coast Guard Maritime Transportation Act of 2006. Mr. Chairman, for the purposes of this hearing I ask that my written statement be entered into the committee record and that I be allowed

to summarize my remarks here.

Mr. LOBIONDO. Without objection.

Admiral BAUMGARTNER. Before turning to the proposal, I wish to

express the Coast Guard’s gratitude for the congressional response

to our request for emergency powers in the wake of Hurricanes

Katrina and Rita. We truly appreciate the speed with which Congress acted. As you know, H.R. 889 would make permanent some

of those emergency powers, and grant or enhance other Coast

Guard authorities. The Commandant appreciates the subcommittee’s work on H.R. 889 and looks forward to implementing those

provisions once they become law. We are also grateful for the kind

comments that I received this afternoon from you.

Now, with regards to the Coast Guard and Maritime Transportation Act of 2006, we would authorize the funds and end strengths

requested in the President’s fiscal year 2007 budget and provide

important new authorities as well as expand and clarify existing

authorities.

Four provisions warrant particular attention: section 205, merchant mariner credentials; section 202, technical amendments to

tonnage measurement law; section 403, Maritime Alien Smuggling

Law Enforcement Act, or MASLEA; and section 401, Maritime

Drug Law Enforcement Act amendment on simple possession.

The Coast Guard first proposed amendments to the merchant

mariner credential statutes in 2005. In response to the subcommittee’s direction, the Coast Guard has conducted an extensive public

outreach effort, and section 205 is the culmination of that outreach.

These amendments now include a safe harbor provision for innocent errors and protections from civil liability for persons helping

others apply for a credential. They also provide a much clearer

statutory language and take into account the findings or recommendations of the 9/11 Commission.

Finally, they allow for immediate temporary suspension of a merchant mariner credential when a mariner is involved in an accident

involving death or serious injury and when there is probable cause

to believe that that mariner was at fault.

Next, I will turn to our proposed amendments for tonnage measurement. Existing tonnage law is difficult to apply to some categories of U.S. Flag vessels and can create loopholes for certain foreign flag vessels. Section 202, another provision developed in con-
9

sultation with industry and labor, would remove conflicting language that suggests both a U.S. Flag vessel is ineligible for regulatory measurement and only existing vessels are eligible for tonnage grandfathering international agreements and laws of the

United States.

As well, section 202 would extend mandatory convention measurement to some undocumented vessels. It would also allow undocumented vessels to be assigned regulatory tonnage. Some of

these amendments are found in section 309 of the committee’s discussion draft.

Now I would like to discuss section 403 the Maritime Alien

Smuggling Law Enforcement Act, or MASLEA. During fiscal years

2004 and 2005, the Coast Guard interdicted over 840 maritime

smugglers facilitating or attempting to facilitate the illegal entry of

aliens into the United States. Yet, less than 3 percent of these

smugglers were prosecuted. This low statistic is largely the result

of current law, which was not designed for the unique aspects of

extraterritorial maritime law enforcement that makes meaningful

prosecutions difficult. With little deterrent effect, maritime smugglers consider such occasional prosecution as merely the cost of

doing business. Section 403 which is modeled after the highly successful Maritime Drug Law Enforcement act, would address these

shortcomings and enable us to improve security of our maritime

borders through the effective prosecution of maritime migrant

smugglers.

Section 401 would establish a civil penalty of an offense for simple possession of narcotics aboard vessels subject to the jurisdiction

of the United States. This provision will deliver meaningful yet

measured consequences for illegal and unsafe conduct. In no way

is this measure intended to condone possession or use of narcotics.

Rather, it will complement existing law and effectuate congressional intent with regard to the possession of controlled substances.

We were pleased that this proposal was included as section 306 of

the committee’s discussion draft.

Finally, the administration proposal includes provisions that

would improve the lives of Coast Guard members by protecting

leave that would otherwise be forfeited due to the operational demands of natural disasters, by making permanent Coast Guard

housing authorities, and by allowing for reimbursement of certain

medical-related expenses. Such provisions are extremely important

because they allow members to focus on mission execution, rather

than on quality-of-life distractions.

Mr. Chairman, Representative Filner, members of the subcommittee, thank you again for the opportunity to appear before

you today, and I will happy to answer any questions.

Mr. LOBIONDO. Thank you, Admiral.

Mr. Filner.

Mr. FILNER. Thank you, Mr. Chairman. Thank you, Admiral. I

just want to ask a few questions that were not covered in your oral

testimony. As I understand the maritime identification credentials

program that was in the Federal Register earlier this year, port

workers and sailors needing unescorted access to secure port areas

are required to undergo name-based background checks against a
10

terrorist watch list and an immigration status check to receive a

credential until this TWIC program will finally be implemented.

Now, where I live in San Diego, and other places, we are told

that truck drivers, who make up one of the largest segment of port

workers, are not being covered practically by this requirement. Is

that true, and what is the rationale for that? There was an ABC

news report recently that showed people in New York-New Jersey

Port had fraudulent licenses, many of them undocumented drivers.

So what are the facts of the matter from your perspective with this

situation?

Admiral BAUMGARTNER. Thank you for that question. I appreciate the opportunity to address that. The long-range solution is

the TWIC, the Transportation Workers Identification Card, and

that will apply broadly and that will be the standard for access.

The notice that we have put in the Federal Register about acceptable credentials for port access is an interim step, and, as such, it

is targeted at what we can do efficiently and effectively until TWIC

comes on line.

So we have examined first those that have the most contact with

port facilities, that have the most information, the most inside

knowledge of the comings and goings of those important port facilities. Those are the workers that are there most often and that have

the knowledge and access of that particular facility. They are also,

from a practical, pragmatic sense, those are the easiest workers to

be able to screen and to regulate access through this interim process.

So that is why we started with those particular workers. They

have the most ability to affect the security—

Mr. FILNER. I take that as a yes to my question. We are not looking at the truck drivers, then, by and large. I mean, you had a real

long answer there, but I think you said we are not looking at those

guys right now.

Admiral BAUMGARTNER. Today the truck driver that comes on occasionally to a facility would not have the additional screening

under the current situation.

Mr. FILNER. If you cannot do that, how are you going to do the

fingerprint-based background checks when TWIC is implemented?

That is, why is that going to be any easier than what you have

now? And meanwhile our ports are pretty unsecured, it seems to

me, if we are not checking these thousands and thousands of truck

drivers.

Admiral BAUMGARTNER. Well, when TWIC is in place, it will be

able to expand more easily in a measured way to additional categories of employees and people that need unescorted access to facilities.

Mr. FILNER. Well, whatever the interim period is—and we know,

by the way, in all of these situations—again, I represent a border

city so I know that all of the programs that were supposed to be

implemented in 2002, 2003, 2004, 2005 have never been implemented. So this interim may be a very long time, for all we know,

given the complexities of these security checks. So your answer

does not leave me too confident about what is going on at our ports

if people with phony driver’s licenses or undocumented persons can

get access to the ports. It really worries me.
11

I think you better figure out a way—this interim period may be

longer than you think, because the TWIC situation may be more

complex, and we have had in every similar situation—these Department of Homeland Security’s exit visas, their passports situation—everything has been delayed and delayed and delayed because of the difficulty of it being implemented. So I would look at

that again if I were you.

Just quickly, I understand that the administration has requested

legal authority to use funds from the oil spill liability trust fund

to pay for other things such as on-site scientific or technical support services. How is that going to help people who have been injured or suffered losses from an oil spill?

Admiral BAUMGARTNER. Yes, sir. Actually this will help people

that have been affected, because one of the provisions that you did

not mention there are on-site contracting services. So when you

have a major oil spill where there are a lot of third parties interested who have been affected and impacted—one of our major problems right now is that when the responsible party can no longer—

or refuses to take care of third-party claims, those innocent people

that have been damaged, we could have a flood of claims and our

permanent staffing is not able to keep up with the influx of claims

and it creates delays.

If we have this flexibility for those unusual and infrequent occasions when we have to set up such on-site claims adjudication facilities, we will be able to do that and we will be able to consider

those claims and pay them much, much quicker than without this

authority.

Mr. FILNER. Well, I hope that there is, as you say, because it

seems strange to make an argument that you will help people more

when you have decreased the funds available for them. And your

argument is based on the fact that there are certain ones that require this expert adjudication. Is that summing up your argument?

Admiral BAUMGARTNER. Not exactly, sir. What it is, it is a matter of capacity. If we maintained a permanent capacity that could

handle the third-party claims from a large spill where a responsible

party was not going to adjudicate the claims themselves, that

would be a tremendous resource drain that would not be available

for many many things.

What this provision does when we have those exceptional circumstances, we need immediate surge response to get these claims

reviewed and paid. We are able to get that kind of assistance, contract assistance in place and on site where the people are, and we

can do it quickly and we can do it promptly. It is much better for

us to be able to give the settlements to those people when they

need them rather than, because of bureaucratic delays and inadequate permanent staffing, to have to adjudicate them from afar

and have the large delay.

Mr. FILNER. Well, I hope you are right. I hope you will give us

a sense after a year just what the situation was there.

Admiral BAUMGARTNER. Yes, sir.

Mr. FILNER. Thank you.

Mr. LOBIONDO. Mr. Diaz-Balart, do you have any questions?

Mr. DIAZ-BALART. Thank you, Mr. Chairman. I would be remiss

if I didn’t bring up two issues. One is thanking the Coast Guard.
12

I represent southern Florida and I think it is probably where you

are busier, busiest in the country. And it is incredible to see what

the Coast Guard after 9/11, particularly on these new responsibilities that you are doing, and yet you are still doing the traditional

things you have always done. And Mr. Chairman, as you all know,

they do it with incredible dignity, with incredible respect, and,

frankly, just do a spectacular job. So I want to thank you for that.

Mr. Chairman, I also want to kind of add to what my dear friend

and colleague, Ms. Brown of Florida, said. I also want to thank you

for that provision—that wage penalty provision in the bill. I think

it is sensible. I think it brings about some common sense to an area

that has not been looked at, frankly, for probably over 100 years.

I want to thank Ms. Brown for bringing that issue up. It is common

sense. It affects not only a huge industry in the State of Florida,

but thousands and thousands of people who are employed by that.

So I just want to thank you, Mr. Chairman for including that as

well. Thank you.

Mr. LOBIONDO. Thank you. Mr. Oberstar.

Mr. OBERSTAR. Admiral, thank you very much for your presentation. I join my colleagues in expressing, as I have done on so

many occasions, my great admiration for our Coast Guard and the

extraordinary service you render for our country.

Admiral BAUMGARTNER. Thank you.

Mr. OBERSTAR. As a previous Commandant of the Coast Guard

many years ago said, it takes a very special person to wear this

color blue; and I agree.

Admiral BAUMGARTNER. Thank you, sir.

Mr. OBERSTAR. And the Coast Guard, I don’t know what the

weather channel would do without the Coast Guard, or perhaps

what the Coast Guard would do without the weather channel. You

really are the darling of the network. And they bring into homes

across America the extraordinary service of the Coast Guard under

extreme circumstances and the heroics that are carried out that

these videos literally make seem routine. And we know that they

are not.

In the immediate aftermath, 6 weeks or so after Hurricane

Katrina, members of our committee traveled through the Gulf

States and finished in Mobile with a look at the Coast Guard facilities and a chance to look at one of those helicopters up close that

I have been voting on for years and years. I see the remarkable

technology of how you winch these people up from the depths of the

roiling seas. I have just great admiration for your accomplishments.

The Active-Duty strength of the Coast Guard is listed at 45,500.

Is that being met?

Admiral BAUMGARTNER. No, sir. I believe we are underneath

that. That is our authorized limit.

Mr. OBERSTAR. How far underneath that?

Admiral BAUMGARTNER. Actually, sir, I don’t have the number

right in front of me, but we can get back to you with that.

Mr. OBERSTAR. It is not thousands, is it?

Admiral BAUMGARTNER. I think it is probably a few thousand

less than that.
13

Mr. OBERSTAR. My first term in Congress, the authorized

strength of the Coast Guard was 39,000. Since that time Congress

has assigned to the Coast Guard 27 new duties and responsibilities

that range from drug interdiction to illegal immigrant interdiction

and others that we all know and need not go through. You carried

out all these duties with this relatively modest increase in personnel. That is an exceptional productivity record. And we ought not

to tolerate a situation in which the Coast Guard continues to have

new responsibilities but does not have the personnel necessary to

carry them out. And I am curious as to whether the deficiency in

personnel is due to lack of appropriations or to other purposes.

Admiral BAUMGARTNER. Yes, sir, I appreciate the question. And

certainly one of the reasons that we have been able to continue to

be successful is our multimission character. So when you add those

27 new missions and you have got the capable platforms, trained

people, the right culture, that is how we are able to do that.

With regard to the exact delta between what we are authorized

and what we currently have on the books, sir, I do not have that

information and a good explanation, but I certainly would get back

to you with that.

Mr. OBERSTAR. When you do that, would you please also provide

the ratio of the enlisted to the officer personnel in the Coast

Guard?

Admiral BAUMGARTNER. Yes, sir. We can certainly do that.

Mr. OBERSTAR. I have a feeling that it was a smaller number of

officers and a higher number of enlisted personnel. I have to go

back to my files to check that back in 1975, 1976. But I suspect

there have been a number of structural changes over time that just

crept in.

[The information follows:]
14
15

Mr. OBERSTAR. There is other curious reference in the pending

bill, section 408, data: In each of fiscal years 2007, 2008, there is

authorized to be appropriated to the Administrator of the Economic

Development Administration $7 million to acquire through the use

of unmanned aerial vehicles, data to improve the management of

natural disasters and the safety of marina aviation, transportation.

Could you enlighten us to what that is about? I am curious about

this increase in authorization to EDA of $7 million. It does not

come out of the Coast Guard budget as I read it.

Admiral BAUMGARTNER. Well, sir, that is a provision that has

been added in the subcommittee’s discussion draft and it is one

that we in the administration are looking at right now. And we

really have not developed a position and I cannot really give you

a whole lot of information on that particular provision.

Mr. OBERSTAR. What kind of data would be gathered to improve

management of natural disasters through unmanned aerial vehicles? Would these be similar to the weather aircraft that now fly

into the eye of the storm, those that go above—as high as 70,000

feet?

Admiral BAUMGARTNER. Sir, I do not think that is what they are

talking about. We have some other programs that are looking at

the use of unmanned aerial vehicles in different scenarios and so

forth, and frankly I do not really know how this particular provision ties into those other existing programs.

Mr. OBERSTAR. I would appreciate any information you can provide us between now and markup on this rather curious provision.

Admiral BAUMGARTNER. Yes, sir. We will do that and we will get

back to you on that.

Mr. OBERSTAR. Thank you very much.

[The information follows:]
16
17

Mr. LOBIONDO. Mr. Coble.

Mr. COBLE. Thank you, Mr. Chairman. I apologize for my belated

arrival. I had an earlier meeting and I have a subsequent meeting

soon, so I will not be able to stay long.

Admiral, good to have you with us. I want to reiterate what my

friend from Minnesota said when he extended his generous comments to the U.S. Coast Guard. It does indeed take, Mr. Oberstar,

a special breed of cat to wear that Coast Guard blue.

Admiral, the draft bill retains the same level of Active-Duty personnel as was authorized in the fiscal year 2006 bill. How does the

Coast Guard plan to be able to meet its increasing mission goals—

and, by the way, these increased mission goals imposed upon the

Coast Guard appear to be endless, but you all somehow manage to

keep responding without increasing your number of personnel. Do

you have a magic wand with which you operate there? I know Admiral Allen handles the apparatus, but I would be curious to know

about this.

Admiral BAUMGARTNER. Yes, sir; if he has a magic wand, I

haven’t seen it yet.

Mr. COBLE. I think someone has a magic wand down there.

Admiral BAUMGARTNER. I think if there is a metaphorical magic

wand, as I said, I think that the key is our multimission character.

When you have personnel with the authorities that have the training and the right culture, that goes a long way towards it.

In terms of how we are looking to fulfill our commitments in the

future, I think that certainly Admiral Allen has put it well when

he testified here last week and in his change of command statement: We are looking at getting the right people, the right platforms. Deepwater is a large portion of that. Getting the right platforms in place with the right technology, the right sensors, the

right systems integration so that we can work more effectively as

a total system; then we do not need as many people and we can

leverage technology there.

That is certainly one of the reasons we can take on a lot more

than we did when Mr. Oberstar first started his committee with

not that many more people, is that the platforms that we have are

much more efficient in terms of manpower than they ever were.

You simply look at our new cutters, new ice breakers that are serving with less than half of the crew and much more capable vessels.

Certainly in other areas, maritime domain awareness, where we

are trying to leverage technology and intelligence to provide a common operating picture that gets us more knowledge about the environment we are operating in, rather than more people and more

brute strength. So in many ways, as as I said, we are trying to

work smarter.

We are also working much better with our interagency colleagues

in terms of within DHS, with DOJ, with DOD and the rest of the

Federal agencies. We can certainly leverage our people, our authorities, and our capabilities much better than we used to be able

to do.

Mr. COBLE. I thank you, Admiral. What is the overall enlisted

and officer strength now?

Admiral BAUMGARTNER. Unfortunately, sir, I do not have that

exact number in front of me but we can provide it to you.
18

Mr. COBLE. Mr. Chairman, I would like to have that information

imminently, if we could.

Admiral BAUMGARTNER. Yes, sir. It is around 40- to 41,000, I believe, but I do not have the exact number.

Mr. COBLE. Total.

Admiral BAUMGARTNER. I believe it is around there, but we will

get that number to you.

[The information follows:]
19
20

Mr. COBLE. Thank you, Admiral. Thank you, Mr. Chairman.

Mr. LOBIONDO. Mr. Taylor.

Mr. TAYLOR. Thank you, Mr. Chairman.

Admiral, from a quick look, this bill appears to have been written

by a lobbyist here in D.C. Rather than the Coast Guard.

Let’s start with 307. I worked very hard to put that language in

the bill that would trace back who actually owns the vessel, so that

folks, like neighbors in particular, would not portend to be an

American-owned vessel when they are actually owned by a French

firm. That French firm actually brags about operations in the Gulf

of Mexico in their business brochure, so there should not be any

doubt that the French guys don’t know that they own this company, and there should not be any doubt to you that they own this

company, and that is in violation of the Jones Act. So I would very

much object to that and I would be curious where that language

came from.

But let me just walk down. 309. Why would our Coast Guard

want to accept the measurements of any other State? As we know,

there are some countries around the world where you can get a

master’s license just by showing up and paying a fee. My hunch is

you could probably get a tonnage the same way. So why would we

sign off on those inaccuracies? I am curious to hear your explanation on 310. I am willing to hear you out on that one.

On 403 for years, if I am not mistaken, there has been a car

dealership out of the State of Florida that kind of wants the best

of both worlds. If their vessel were to catch on fire or if it were to

sink, they want the right to call the United States Coast Guard.

And yet, after being told on this issue for something in the neighborhood of 15 years that the Jones Act is reserved for Americanbuilt vessels, if I am not mistaken, the same folks keep insisting

on buying a number now of foreign yachts, which is contrary to the

Jones Act. It is not like these guys do not know the rules. This has

been an issue since the Democrats controlled the House, and that

was a very long time ago. So I would like you to explain that one.

Tell me about 404. Jones Act waivers are not an end-all. It is

sort of like those of us who used to be a city councilman. It is sort

of like granting a variance. Every time you give one waiver, there

are ten more guys who want a waiver. So once you do that, why

have a Jones Act at all? I think the Jones Act exists for a very good

purpose. It is there to protect our citizens, and so I have a little

trouble with 404 and 405 granting those waivers.

That ought to get you started. And while you are talking, I will

be reading the rest of this. But this surely does not look like something that was put together for the benefit of the American citizen.

On a very quick glance, it looks like something that made K Street

a lot of money, and I will let you tell me that I am wrong.

Admiral BAUMGARTNER. Yes, sir. Actually, most of those provisions in the discussion draft is not a bill that is put forth by the

administration. We did come forth with a proposal that many of

the provisions are contained in the discussion draft. The particular

provisions that, I think most of the ones that you mentioned there,

were not ones in the administration proposal and the discussion

draft from the committee the administration is looking at and developing positions on the different provisions; but I don’t have posi-
21

tions to discuss the specifics of most of the things you asked. One

thing I can discuss—

Mr. TAYLOR. Excuse me, sir. Let’s go back to 307. This committee

made a mistake, and I cannot even remember how I voted, so I will

presume I have voted for it. This committee made a mistake when

we allowed foreign financing of American flag vessels. And the reason for that is for those of you who do not have a documented vessel, you look on the back of that documentation paper, and if you

have a lien against that vessel it is written on the back. That is

who really owns it. And so for the while that the Hancock Bank

had my note, they were the real owners of the boat, not me. So

thank goodness since then that note has been paid off, so it is really my vessel. But in the foreign financing, we actually had an offshore supply boat company that built some boats here, and that is

great. But on the back of that paper, on the documentation they

listed a French firm as that owning the boats. So here they were,

getting the best of the both worlds. They were operating in the

Gulf of Mexico. If they caught on fire or started to sink, they call

on the Coast Guard 24 hours a day, 7 days a week, 365 days a

year. But by a very clever financing scheme, the American firm

would see to it that they never made any money; that all the profits were passed on to the folks who held the paper over in France.

So they did not pay American taxes because they did not make

money. They paid the company over in France a pretty good chunk

of money. They made money, but because the French company was

making money in the Gulf of Mexico and since most countries do

not tax overseas income, no one paid taxes. So the benefit of the

United States Coast Guard was made available to this firm for

free.

That is wrong. It is in complete contradiction to the Jones Act.

We want to know the folks that operate in our waters are American owned, American built, American crew. So we are closing that

door.

And again, my question to you is, you felt like—and when I say

′′you,′′ I mean the Coast Guard—that you were under resourced to

enforce that in the past; that you did not have clear and compelling

language to enforce that. Is that still the case? Do you feel like you

are under resourced to enforce that so that we know that these vessels are American owned, and do you have the resources both legally and financially to make that happen?

Admiral BAUMGARTNER. Congressman, I think the most important thing along those lines was the change in the substantive

lease financing law. And if we had, in terms of the leased financing

vessels, we have mortgage financing and leased financing, the

changes that were made there that clarified what the rules were

so that we could easily and fairly enforce them. That was, as you

know, that was the important item there. With the mortgage-financed vessels, substantive rules are sometimes the most important ones because there are ways for clever people to get around

them. Reporting requirements and giving us a better ability to inquire and ask reports of vessel owners is helpful—I am sorry, of

mortgage companies—and so forth to find out what is really going

on and what the business relationships are.
22

But it has been a difficult thing for us to try to investigate a

large number of transactions, and many times what our process is,

is we look at the documents and if we do not see problems with

them, then that is the best way. The document process proceeds

from there.

There are exceptions, and certainly there are the ones that you

mentioned there with those particular vessels. So the ability to ask

for more information and get more information and find out what

the details are is certainly helpful. There is also the problem of

when they come forward and they have information or provide information that appears to meet the requirement of the regs and the

statutes. We may end up in a situation where people think they

know what is going on behind the scenes, but there isn’t any real

way to prove that.

In terms of one of the other things you mentioned, tonnage is one

of the provisions that I can speak to because that is part of our proposal here. And we had significant tonnage amendments that we

would like to go through. And you mentioned our acceptance of foreign tonnage measurements and so forth. That is part of the backbone of current commerce right now, maritime commerce, is the regime of international conventions and standards, and the classification societies that act as independent inspectors and guarantors of

those different things.

So if a vessel has been measured under the rules of a foreign

country, they will also have been inspected by classification societies. And so, therefore, the results of those measurements, we will

recognize those. I do not see any significant problems there. And

those are part of our reciprocal obligations under the international

conventions.

Mr. TAYLOR. For clarification, your language requires that it be

backed up by one of the measuring society’s—let me give you a for

instance that jumps out at me. You take a less-than-well-organized

Third-World country. You take a very large vessel. You pay off the

right guy. It is now a 50-ton vessel. Anybody with a couple weekends on a boat who goes and attends their course can get a 50-ton

vessel. It doesn’t take a whole lot. So you could have a 400- or 500-

foot ship that some nation says is a 50-ton vessel, you hire some

guy who doesn’t have the experience to be operating a 400-foot ship

but, under these changes, when I first look at them, you actually

created a safety problem.

Now, again, tell me that that won’t happen.

Admiral BAUMGARTNER. Well, Congressman, I can’t guarantee

that that won’t happen, but I think that the likelihood that something of that egregious happening is not significant and that the

registries that issue the certificates and so forth have a lot at stake

in maintaining their credibility.

We do have a port—

Mr. TAYLOR. Going back to my question, are you tying it to those

registries? A brief summary doesn’t say that.

Admiral BAUMGARTNER. The law doesn’t tie—the statute

wouldn’t specifically require a classification society to have been involved, but that is the normal process. What we do do is, in our

port state control boardings, is we track the compliance of vessels

by nationality, by registry. So if a particular nation has sub-
23

standard vessels and does not have good inspection processes, they

do have things like, as you were suggesting here, that appear to

be blatantly inaccurate items, we would challenge those. It would

then be noted in the port state control process, and the vessels of

that nation would be targeted for increased numbers of boardings.

Now the businesses that register their vessels under that particular nation’s registry don’t like that, and they put pressure on

that nation or that country to increase the overall quality of their

vessels so they aren’t targeted, and that actually works pretty well.

We just received word from a major flag state in the last week that

they decertified some of their vessels because they weren’t up to

snuff, and they did not want to see their scores in our Port Security

Control boarding regime, our matrix, to lift them up into another

category that would subject other vessels of their nationality to a

higher frequency of inspections and a higher intrusiveness of inspections when they called on U.S. Ports.

I am confident that that won’t be a problem on a systematic

basis and that we have enough disincentives built into the system

to keep everyone honest.

Mr. TAYLOR. For the record, I would like someone from your office to come tell me about Section 405.

Admiral BAUMGARTNER. Yes, sir.

Mr. TAYLOR. Mr. Chairman, you have been very generous.

Mr. LOBIONDO. Admiral, Section 206 would establish a civil penalty offense for simple possession of narcotics on a vessel or in a

facility. What facilities would be included in this definition?

Admiral BAUMGARTNER. Thank you, Mr. Chairman.

Facilities there would be broader than simply facilities that are

specifically regulated under the Maritime Transportation Security

Act regulations. So we would mean here the facility could include

a marina. So that if we were followed or we were boarding vessels

in a marina and had some particular purpose to be at that marina

and there happened to be a personal use situation at the marina,

we would be able to take action.

If it was a more limited definition of facility and only applied to

facilities that were regulated under Section 105, that type of marina wouldn’t be covered. The only kind of facilities we would be

looking at then would be ones that had four and five vessels or

large passenger vessels.

So this is a much broader meaning. So it would encompass the

smaller facilities like marinas and so forth where we may still encounter personal use issues and scenarios.

Mr. LOBIONDO. Since there is already a criminal statute in the

law, what is the need for this proposal?

Admiral BAUMGARTNER. Well, this proposal gives us a very good

tool to cover a gap in the current practical enforcement scheme;

and there are a couple of different places where that comes in to

play.

One is there are certain areas where State law and local laws

don’t apply. That might be from 3 to 12 miles in our territorial seas

and on a high-seas vessel subject to U.S. Jurisdiction. In those

cases, if we were going to take criminal enforcement action for personal use quantities, we would have to prosecute them in U.S. Federal court.
24

Resource and other efficiency constraints there have caused the

Department of Justice as well as State and local law enforcement

and prosecutors to develop different thresholds over what type of

a case merits the commitment of resources for a criminal prosecution. So sometimes we find ourselves in a situation where it isn’t

best or efficient for the prosecutor in that area to go forth with a

criminal prosecution for a simple possession case, and what that

does is that leaves our young Coast Guardsmen and women in a

situation where they find people in possession of unlawful drugs on

a vessel. They will confiscate the drugs, of course, but then, without the civil penalty provision, there may be no consequence.

So the people that they have found in possession or perhaps even

using the substances, there isn’t a practical consequence. It technically is a violation of the criminal law, but it is not a practical

item that—it may not be a practical case for a prosecutor to take.

This civil penalty provision is a streamlined, efficient way of attaching consequences to possession in those particular circumstances.

Mr. LOBIONDO. Switching to deepwater, what annual level of

funding would be required to complete deepwater within 15 years?

Admiral BAUMGARTNER. Well, sir, it would certainly take more

than what we have right now in the current budgets. That is a

question that is under study, and I think you know H.R. 889 would

require a report on that. I think that, in anticipation of that, we

do have people who are looking and providing those numbers, but

I don’t have numbers that I can provide for you here today for you,

sir.

Mr. LOBIONDO. Thank you, Admiral.

We will now move to the second panel. Oh—Ms. Brown.

Ms. BROWN. I guess my first one, when you get the information

ready for Mr. Oberstar on the composition and the numbers, would

you also give that to me? And I am interested in minorities and

women and females.

My other question, as you develop credentialing programs for, I

guess, the longshoremen and for the truckers, I am very interested

in—you know, Florida has some program that they don’t have to

go to each port to get a different credential and pay a different fee,

some kind of uniform program. But I am also interested in, as you

come up with some of the—I want to say very sensitive, some have

checkered pasts, but they served their time. They paid their dues.

I don’t want to see people squeezed out of jobs because of some program that we come up with that is not related to September the

11th.

So can you tell me a little about how you plan on formulating

the program? I understand you have something in the Federal Register.

Admiral BAUMGARTNER. Yes, ma’am. There are a couple of things

there.

First, what I would do is turn to the transportation worker identification card, the long-term vehicle for that; and we are working

with the Transportation Security Administration on the particulars

of that particular program. There is a notice of proposed rulemaking that was issued last month, and we have had four hearings

held so far with over a thousand attendees. So there has been a
25

significant amount of public interest and comment. That particular

card would be a national card so that it wouldn’t require—it

wouldn’t be port specific, and it would allow you to go where you

need to go.

It also—in the notice of proposed rulemaking, it does set forth

what the different criteria are for, I guess, security issues or where

you might be denied a card. And it is focused on security issues.

It is not focused on merely the fact that someone got in trouble and

had a criminal record. So it is very clear in there that it is looking

at things that would cause a security concern.

And that sort of leads me to an important aspect of this whole

program, is that the trick and the interim procedure that we did

put forth in the Federal Register last month, those are both compliments to the facility’s security plans which are in place right

now under the Maritime Transportation Security Act regulations.

Those particular plans require the facility operators to outline how

they are going to control access to their facilities.

And I may have given a misleading impression that right now

that a trucker could go on any of those facilities because they aren’t

covered by a process. That is not accurate. What our interim process does, it says, in addition to what the facility does to screen escorts—or they may have surveillance or other ways they keep track

of truckers or other employees on that facility. In addition to that,

we are saying that they must, at a minimum, fulfill this other interim credential core requirement; and that requires us to screen

those permanent workers and people who have frequent access to

that facility. That is above and beyond the requirements that are

laid on that facility and that are reflected in that security plan,

and those are plans that are all reviewed and approved by the

Coast Guard. So there are significant access controls.

Ms. BROWN. Couple of other questions.

Coming from Florida—and, of course, various places around the

country have these gambling ships that—that they are not—they

don’t actually move into the waters. They are just stationary. And

a lot of the States want you all to inspect these ships or facilities.

What is the Coast Guard’s position regarding inspecting vessels

that are permanently attached to the shores and would the Coast

Guard continue to inspect vessels that are not permanently attached to the shores?

Admiral BAUMGARTNER. Well, that is a good question; and there

are many parts of that. We did put out a proposed policy to address

different vessels. At that point in time, we called them permanently moored vessels. That is not a technically legal correct term

anymore. That policy received a lot of comment and, right now, it

is being reviewed as to what exactly we are going to do with those

particular vessels.

Another thing we are reviewing right now is the impact of some

court decisions that define what the term ′′vessel′′ means, particularly for vessels that are permanently attached to the shoreline or

to the seabed; and we are looking at all of those things right now

to see what the best course is for the future.

Some of that is not necessarily all in our hands because of the

interpretations the Supreme Court has made, and there are other

courts that are looking at this as well. So we are reviewing all of
26

these particular items to figure out what is the best policy as we

go forward. But we do realize if we don’t inspect vessels as—inspect these structures or crafts as vessels, then the State or local

jurisdictions will then look to inspect them under their particular

laws and codes.

Ms. BROWN. Thank you, Mr. Chairman. I yield back my time.

Mr. LOBIONDO. Thank you, Admiral.

Mr. LOBIONDO. We will move now to the second panel.

All right. Thank you, gentlemen.

We have Professor Myron H. Nordquist with the Center for

Oceans Law and Policy of the University of Virginia School of Law;

and Mr. Douglas B. Stevenson, Director for the Center of Seafarers

Rights of the Seamen’s Church Institute of New York City and

New Jersey.

TESTIMONY OF PROFESSOR MYRON H. NORDQUIST, CENTER

FOR OCEANS LAW AND POLICY, UNIVERSITY OF VIRGINIA

SCHOOL OF LAW; AND DOUGLAS B. STEVENSON, DIRECTOR,

CENTER FOR SEAFARERS’ RIGHTS OF SEAMEN’S CHURCH

INSTITUTE OF NEW YORK AND NEW JERSEY

Mr. LOBIONDO. Professor Nordquist, would you please proceed?

Mr. NORDQUIST. Thank you, Mr. Chairman—

Mr. LOBIONDO. Could you please turn on your mike?

Mr. NORDQUIST. Thank you, Mr. Chairman and other members.

My name is Myron Nordquist, and I am the Associate Director

at the Center for Oceans Law and Policy at the University of Virginia School of Law.

Two weeks ago, I was called by the International Counsel of

Cruise Lines and asked for independent views on proposed amendments to the wage penalty provisions in existing law. I make no

pretense at being an expert on labor law. Rather, my experience is

in broader international maritime law and in analyzing legal provisions. In any event, I was subsequently invited by this Subcommittee to testify today.

My overall reaction then and now is that the existing law pertaining to penalty wage provisions, while historically understandable, is out of date. I respectfully submit that the proposed amendments provided by the subcommittee genuinely promote a better

and more equitable maritime policy for passenger vessel seamen,

many of whom on cruise ships today are more akin to hotel or restaurant employees. I also believe that it is more equitable for masters, owners, operators, and employers.

Moreover, as elaborated in my written testimony, my view is that

the proposed amendments reflect sound public policy that ought to

be incorporated into updated chapters of Title 46 of the U.S. Code.

The penalty wage provision in the proposed amendments, in my

view, incorporate evenhanded due process procedures for all concerned. If these due process procedures are added, Congress will

advance a major step in the direction of circumscribing and promoting a fair, early settlement of seamen wage disputes. Due process

to me means fundamental fairness in how the law is applied to everyone.
27

In response to several of the members’ inquiries, I would like to

stress that the proposals do not change the wage penalty law itself.

They only relate to the timing before it kicks in.

The proposed amendments contain a more rational procedure

whereby a seaman is to provide written notice of his wage claim,

and the master, owner, operator or employer then has an opportunity to remedy the dispute. The amount in question must be paid

either immediately then to the seaman or deposited in a fiduciary

account while the dispute is resolved. The penalty is assessed if the

payer does not follow the clearly outlined procedures.

It is not accurate to argue that the existing wage penalty is only

imposed for willful misconduct, as no finding was made, for example, in the leading Supreme Court case of Griffin vs. Oceanic Contractors, Inc. There, the U.S. Supreme court affirmed a judgment

of over $300,000 for a $400 wage dispute. The decision held that

the district courts lacked discretion to vary the period of the penalty, and Congress was challenged to rectify the obvious deficiency

in the judgment.

Further, the allegation that the owners are attempting to avoid

customary maintenance and cure obligations via the proposed

amendment is just plain wrong.

I urge the subcommittee to lay this ′′red herring′′ to rest by inserting appropriate language wherever it is needed to provide the

clarification.

What puzzles me is why there is such passionate resistance to

due process procedures that are commonplace throughout all of

American law. The proposed amendments will facilitate the prompt

payment of seamen wages. The proposed amendments do at long

last treat seamen as responsible adults.

The repeated use of the adjective ′′unscrupulous′′ for passenger

vessel operators, which is contained six times in six paragraphs on

page 5 of Mr. Stevenson’s written testimony, is really

unconstructive for a resolution.

Seamen also have their share of moral shortcomings. Emotional

calls for collective punishment for all shipowners to reach a few

bad actors is plainly unfair and, in my view, a violation of due

process of law.

My last point is that a statute of limitations ought to be measured from an objective date, such as when the alleged dispute

arises, not from some subjective time based on a seaman or anybody else’s knowledge.

The purpose of the statute of limitations in all cases is to bring

an end to stale claims and promote timely administration of justice.

The current wage penalty provisions stand legal rationale on its

head by actually providing incentives to delay the settling of seamen disputes.

In conclusion, my view is that the proposed amendments are long

overdue and, in modern society, not all seamen are hapless fools

and not all passenger vessel owners are unscrupulous. The due

process requirements of notice and opportunity to remedy disputes

and the proposed amendments strike me as being fair and evenhanded to all concerned. I believe they are good public policy and

ought to be enacted.

Mr. LOBIONDO. Thank you, Professor.
28

Mr. Stevenson.

Mr. STEVENSON. Thank you, Mr. Chairman and subcommittee

members.

I am very pleased to be here today at the subcommittee’s invitation to testify on the United States Penalty Wage Act.

Just to begin with, I might want to respond to one of the questions about my use of ′′unscrupulous′′ passenger vessel operator. I

use that because the Act could allow unscrupulous ship operators

to do certain things and would allow the responsible scrupulous

passenger vessel operators to differentiate themselves from the unscrupulous ones.

But, Mr. Chairman, there is no law that better expresses what

America stands for and that confirms American values than the

United States Penalty Wage Act. This law was enacted by the first

Congress of the United States, the same Congress that started the

U.S. Coast Guard, the predecessor agency U.S. Coast Guard; and,

like the Coast Guard, this law has served the United States well.

It has served seafarers well; and the statute simply requires, very

simply, that shipowners should pay seafarers on time and accurately.

The Act is purposely simple: to encourage quick payment of

wages without the need for lengthy procedures or judicial interpretation. The Act attempts to deter unscrupulous shipowners from arbitrarily and unscrupulously withholding seafarers’ wages by imposing a 2-day penalty for each day that wage payments are delayed.

It is clear from court decisions that responsible shipowners have

nothing to fear from the Penalty Wage Act because the Act makes

clear and the court decisions make clear that penalty wages do not

apply every time a seafarer’s wages are not paid on time. Only

when the failure is without sufficient cause is a seafarer entitled

to penalty wages.

Without sufficient cause means that conduct which is in some

sense arbitrary and willful. As one court has said, penalty wages

are appropriate only when the employer has acted in a dishonest

or very highhanded way.

Mr. Chairman, the special projections accorded to merchant

mariners by the Penalty Wage Act are as relevant and necessary

today as they were in 1790, 1872 and 1898 and 1915. I know from

my own institution, which was heavily involved in the amendments

in 1915, that these protections are as necessary today as they were

then.

The issue is not technology of the vessels. The issue is rather the

disproportional bargaining position, disproportional bargaining

power of a shipowner compared with a seafarer and the intimidation that seafarers have suffered, and that has not changed since

1915 or 1790.

This situation was brought upon by some cruise vessels who

were sued in court on the Penalty Wage Act claims for Royal Caribbean, Norweigian Cruise Lines and Carnival Cruise Lines. In each

of the cases you should understand seafarers are foreign seafarers

working on foreign flag vessels working 70 over to a hundred hours

a week, and many times it was alleged that they were not paid

their overtime salaries. We should understand that, what salaries
29

that they were paid, the tip employees were paid approximately

$50 a month; and they are relying on tips between $1,000 and

$3,000 a month for the remuneration.

But rather than instituting an industry-wide standard to ensure

that seafarers are properly paid, the cruise industry has responded

by asking Congress essentially to amend the Penalty Wage Act

that would essentially repeal the effect of the Penalty Wage Act on

seafarers on cruise vessels.

My comments on the particular provisions are contained in my

paper, but I would suggest that we could look at this request from

this perspective: This cruise industry which chooses to avoid obligations under U.S. Law by operating their vessels under foreign flags

and employing foreign workers under Third-World wages is asking

Congress to protect them from an arbitrary and unscrupulous failure to pay their foreign seafarers on foreign flag vessels the ThirdWorld wages they work so hard to earn.

I would suggest—if I could have 30 more seconds, Mr. Chairman.

I would suggest that, rather than throwing out over 200 years of

vitally important legislation and jurisprudence protecting all seafarers in the United States ports, I would respectfully ask that

Congress reject the industry proposal; and the industry should be

asked to initiate a proactive program, as they have done so well in

the environmental field, to change the culture of the cruise industry by putting into place appropriate record keeping procedures

that will accurately record the hours of work of their crew members

and by establishing a zero tolerance policy against intimidating

crew members who seek only to enjoy their legal entitlements.

The cruise industry did a very good job when they were hit with

a lot of pollution cases in the late 1990s. But instead of going to

Congress and asking Congress to repeal the environmental laws,

they instituted changes within the industry that are designed to

prevent point source pollution from cruise vessels. The same sort

of procedure, the same sort of initiative could be started by the industry with regard to seafarers’ rights that could be a model for the

industry.

I thank you, Mr. Chairman, for the extra minutes.

Mr. LOBIONDO. Thank you.

Mr. Filner.

Mr. FILNER. Thank you, Mr. Chairman.

Mr. Nordquist, you started off by saying you weren’t an expert

in this law. Your testimony certainly confirms that. Do you know

why the people who know this better, like the cruise line operators

and their lobbyists and their attorneys, are not here instead of you?

Mr. NORDQUIST. Actually, they are here. If you have questions,

I am certain you are the master of your own forum; and they could

answer them.

Mr. FILNER. Could we invite those half-dozen to join us? I mean,

you are getting notes from the guy behind you, who I think is with

the International Council of Cruise Lines, so why doesn’t he come

up?

Mr. NORDQUIST. Mr. Chairman, I am not in charge of anything.

Mr. FILNER. You are just here because somebody told you to be

here, huh?
30

Mr. NORDQUIST. No, I am here because I read the proposed

amendments and was invited to testify.

Mr. FILNER. Are you getting paid for being here?

Mr. NORDQUIST. I am certainly getting paid.

Mr. FILNER. By who?

Mr. NORDQUIST. By the cruise industry.

Mr. FILNER. Interesting. Thank you.

Mr. NORDQUIST. I think everybody who appears here is paid by

someone. I got into this because I was asked to provide independent views. I guess they thought what I said made sense.

Mr. FILNER. Well, it didn’t make any sense to me. You said everything all out of date.

Mr. NORDQUIST. I didn’t say that. Those are not my words. The

law—

Mr. FILNER. You said the law is out of date.

Mr. NORDQUIST. Of course—

Mr. FILNER. So is protection for overtime out of date? Protection

for when a person gets paid out of date? Are those things out of

date, in your view?

Mr. NORDQUIST. The proposed amendments are intended actually

to update all those kinds of records.

Mr. FILNER. Have you met or interviewed any of the seamen who

have brought the class action lawsuits against the Norweigian

cruise lines so you knew what they were saying? Even though they

worked over a hundred hours a week and weren’t paid overtime,

have you talked to any of those guys?

Mr. NORDQUIST. I am familiar with the kind of allegations that

go into litigation.

Mr. FILNER. Do you think that is fair?

Mr. NORDQUIST. Excuse me?

Mr. FILNER. Do you think working over a hundred hours and not

getting overtime is fair?

Mr. NORDQUIST. The ones that I have talked to, frankly, are

working mostly for tips; and when you tell them that they have to

go back and stop working, it means access to a larger source of income is cut off from them. I think there is a distortion in the mind

of people that don’t understand that most of the money that many

get comes from tips.

Mr. FILNER. So you don’t agree with the settlement that the

cruise lines had to pay?

Mr. NORDQUIST. I don’t know enough about the facts to give a

judgment. That wasn’t really what I was offering testimony on.

I think we ought to give due process to everybody, and I think

that the Constitution is more fundamental than some law passed

with a few sentences in the First Congress. That is my position. I

guess the cruise industry liked that.

Mr. FILNER. I guess.

Thank you for your definition of compassionate conservatism.

You said in your statement that the amendments don’t change

the law, they just refer to the timing of when things come in. Let

me read you a couple of changes that occurred.

Mr. NORDQUIST. I didn’t say that.

Mr. FILNER. Yes, you did.

Mr. NORDQUIST. I said it didn’t change the penalties.
31

Mr. FILNER. Let me read to you a couple of things and ask if you

want to stay with that.

The proposed amendment changes the penalty computation from

2-days’ wages for each days payment delay to not more than 2

days’ wages. Isn’t that a change in the penalty?

Mr. NORDQUIST. And that is an error. It is an error in the document that I reviewed, and I had to give counsel an explanation

prior to this hearing that that is an error.

Mr. FILNER. So what should it say?

Mr. NORDQUIST. It should say the penalty is the same whether

it is in Chapter 103 or chapter 105.

Mr. FILNER. So we have something that was written by the

cruise ship industry in error.

Mr. NORDQUIST. I am not really able to say where the error occurred, but certainly what I can say is that the penalty is intended

to remain.

Mr. FILNER. That is not what the language says right now.

It also changes, as I understand it, where the burden of proof is.

For example, that the proposed amendment requires a seaman to

prove that his employer did not have sufficient cause not to pay

him. You are shifting the burden of proof there.

Mr. NORDQUIST. I didn’t say that. I don’t know where this is coming from.

Mr. FILNER. That is what the amendment says.

Mr. NORDQUIST. I certainly didn’t read it that way.

Mr. FILNER. You wouldn’t read it as shifting the burden of proof?

Mr. NORDQUIST. That is correct. I would not.

I would say that it imposes an obligation, as it exists almost everywhere else in the law of the land, that a seaman is to give notice that he wants to be paid what he thinks he is due. How can

you pay a debt you don’t know about? That is common sense.

Mr. FILNER. How does an individual person—who may have language problems, may have other issues, including intimidation and

afraid of not being rehired, that he’s supposed to know why or

prove that—he has to prove that there was cause? Maybe there

was a computer error. How does he know one way or the other?

But he has to have cause to bring the complaint.

Mr. NORDQUIST. You are mixing up, sir, cause and notice. Notice

is when the man gets his pay stub. He looks at it and says, wait

a minute; I am owed more money than this. Then he should have

a duty to go to whoever it is that issues a paycheck and say, I am

short. I don’t think it is a very onus provision to give notice. Now

that doesn’t mean he has to prove it. It simply means he has to

give notice.

Mr. FILNER. We will have to read that part of it a little more directly, because I think you are putting the burden of proof in this

amendment back on the individual, as opposed to the people who

ought to have the burden on them.

I will have a second round, Mr. Chairman, if you don’t mind.

Mr. LOBIONDO. Ms. Brown.

Ms. BROWN. Thank you. I have always supported workers’ rights,

and I am a strong supporter of workers’ rights, but for 2 years I

have looked at some of these provisions, and I really think they

need to be updated.
32

Some of the things that greatly concern me is, for example, a

worker has to go to Western Union—you know, that mentality—

that Western Union mentality. They have to spend a large portion

of their money wiring the money back home because, in law, that

you have to pay that person in cash, that is ludicrous.

So that is one provision I know that needs to be updated, that

the cruise ships have to have cash on hand and they have to pay

them in cash. Now do you agree that that is one provision that

needs to be corrected?

Mr. STEVENSON. Yes, ma’am. Thank you for that question, because—I mean, I have direct deposit for my salary.

Ms. BROWN. I have direct deposit, too; and when we came up for

the provision for Social Security, it was a difficult task getting my

seniors to understand that that is a good thing. Now it is, and I

don’t have to worry about people attacking them when they go to

the bank to cash their checks.

Mr. STEVENSON. But, you know, I have been working defending

seafarers for the Seaman’s Church Institute for 16 years. We have

a free legal aid program for seafarers worldwide. I have never in

my experience had a seafarer come to me and say, I want direct

deposit. I want allotments made back home. I want to be able to

send home money through electronic means.

A few years ago, the ITF tried to initiate a program where seafarers would—they have an agreement with all of the shipping

companies to set up a worldwide direct deposit program with ATM

cards and ATM machines at seafarers’ centers all over the world.

Seafarers would have nothing to do with it. They didn’t want it at

all. They want to be paid cash. They want to be paid cash.

Because seafarers are coming from a lot of developing countries—the Philippines, in particular—are very, very accustomed to

abuses in allotments, that things are taken out. That is why they

prefer—and I agree with you. They don’t like going to Western

Union. That is why they come to the Seafarer Union in the New

York area, and others who have passenger ship terminal industries

provide a service of wiring money home at a cheap rate.

Ms. BROWN. Could you all take a check? Could you take a check?

Mr. STEVENSON. We would take a check, of course, but they don’t

want to be paid that. I can’t—

Ms. BROWN. I think—

Mr. STEVENSON. The other problem with this, though, in the language of the proposed bill is that it would open the door for taking

out payments for, say, personal medical insurance for seafarers.

This is not a red herring that was suggested because we have had

complaints particularly from what are called entertainers and hotel

staff workers that the cruise industry is trying to exclude from the

definition of seafarers, that they are as much a seafarer on a cruise

vessel, on the mission of a cruise ship, as a tanker man is on a

tanker.

But we have had complaints that they have been required as a

condition of employment through their recruiting agency to show

that they have personal medical insurance. It is not against the

law for someone to have their own medical insurance, but if you

can set up a system where money is being taken out of your pay

for medical insurance and you are told you must voluntarily agree
33

to this as a condition of employment, then the shipowner has reduced expenses for medical care and it is something that we are

very concerned about.

Ms. BROWN. The other provision that I want—I have brief time

and we can discuss this as this moves forward, but I have a concern about—the only issue that I am concerned about is that I

think that the workers should notify the employer if they have a

problem. If I have a problem with my check, I am going to let you

know the day that I have a problem, the moment that I have a

problem. There will be no confusion if there—if my check isn’t

right, I am going to let you know.

Mr. STEVENSON. I think that is something that land-based workers have a very good understanding about. The difference, however,

is when you are dealing with a disproportionate strength in bargaining power between a seafarer, let us say coming from the Philippines, working as—and most of them do, 28 percent of the world

seafarers are from the Philippines. They know for every job that is

offered there is 200 people behind them. They know if they are labeled a troublemaker they lose their job and they are not rehired.

Ms. BROWN. I don’t think it is being a troublemaker if it is a

problem with your money.

Mr. STEVENSON. I don’t either. But, unfortunately, what they experience is we have had many, many, many, many cases of seafarers who have been dismissed from their employment who have

been retaliated against simply—and blacklisted from future employment by the system of recruiting agencies in the Philippines

simply for requesting what they are legally entitled to have.

Ms. BROWN. And I think we should work with this, but I think

there should be some way to modernize this, that it should be fair

on each side.

Mr. STEVENSON. And I think so, too, Congresswoman.

I think what I suggested is that the first step ought to be that

the industry itself, which is in the best position to know whether

or not a person is properly paid, should set up a system so they

know exactly how much that seafarer is being paid. They keep

track of the hours. They can keep track of every drink that a passenger drinks. They can keep track.

Ms. BROWN. You don’t think they are doing that?

Mr. STEVENSON. No.

Ms. BROWN. Do you think they pay people—that they don’t know

how much they are paying them?

Mr. STEVENSON. If you look at the allegations in the class-action

suits, there are many allegations—and I think affidavits could be

provided—where the shipping company could not verify the hours

worked.

Ms. BROWN. I don’t know how that could possibly happen, but,

as we move forward, the industry, as it moves forward, maybe

there are some recommendations that you could make that would

be helpful to them. But I think you should look at some of their

proposals; and I really have a concern about, you know, the Western Union provisions.

Mr. STEVENSON. I am very happy to work with you, with the industry, with anybody, if it is going to help seafarers.
34

Ms. BROWN. Thank you, Mr. Chairman; and thank you, Mr.

Ranking Member.

Mr. LOBIONDO. Mr. Taylor.

Mr. TAYLOR. Thank you, Mr. Chairman.

Mr. Chairman, more of an observation, I welcome the thoughts

of both of these gentlemen. In the wake of Hurricane Katrina, our

Nation at considerable taxpayer expense hired several cruise ships,

one of which went to Pascagoula, Mississippi, went to Mobile, at

least one went to New Orleans. And since all of us, hopefully, are

here to look out for our constituents, one of the things I find troubling, I hope we can address in this, is, you know, a foreign ship

is, in effect, an island. It is a little bit of sovereignty of whose flag

it flies and lives under those rules.

That may be fine for a ship that is transiting our waters or may

be here for a day or 2, but when some of these ships sit at our

docks for 4 or 5, 6, 7, 8 months and continue to pay people something less than the minimum wage, continue to be exempt from the

workman’s comp laws, and they are right across the street from hotels that have to live by all the rules or, in the case of New Orleans, they were immediately adjacent to an American flag vessel

that was paying its folks American wages, living by the American

rules, seafarers’ rules, workman’s comp, Mr. Chairman, it is not

fair. And if we are going to address unfairness in this bill, it is

something that we should look at and particularly since we were

the charter.

We hired those guys. We hired those guys in my home county.

As recently as February, we had something like 18 percent employment. In an adjacent county, we had 16 percent employment. Many

of those people had come from the casinos in Biloxi. They would

have loved to have done something similar to that on a ship that

we are chartering. Unfortunately, we have got that ship from a

Third-World country who are living by the very rules that are unfair.

Again, it is—I think if it is transiting our water, but when it is

camped out in our water 4, 5, 6, 7 months at a time on the American taxpayers’ time, that is not right. I would hope that this bill

would be the vehicle to address that.

I mean, we, as a Nation, have made several mistakes along the

line. We had just finished two cruise ships that were under construction in Pascagoula early on in the Bush Administration. In the

wake of 9/11, a guy named Zell chose not to finish it. So we sold

them for about a penny on the dollar. They are being built in Germany, which is not a low-wage country. They are going to be completed. But if we would have completed them, they would have

been in our inventory, and we would not have to have hired those

foreign ships who were adding ships to our inventory.

That was mistake number one. That is water under the bridge.

Katrina wasn’t the last disaster to hit America. There will be

other disasters. Some of them will probably be manmade. One of

the ways we are going to respond to that is with temporary housing being brought in; and since many of our major cities are on the

water, it is a pretty good bet that the temporary housing will come

in the way of ships.
35

In fairness to the American mariner on that tugboat across the

dock or that off-shore supply vessel across the dock or that crew

boat across the dock, in fairness to those guys who are living by

all the rules, some rules have to be established in this committee

that, if we are going to hire somebody, they are going to have to

live by the same rules. If they are going to be tied up to the American dock for 3, 6, 7, 8 months, they are going to have to live by

our rules.

Again, if this bill is in the process of being put together, I would

ask for that consideration; and I would also welcome the comments

of you two gentlemen as to that. Because I just don’t see, if you

people pride yourself on the law, how on earth can we have a set

of laws for this ship but not that one and they are right across the

dock from each other.

Mr. STEVENSON. Well, I can take you one step further. You can

have on the same ship people from different nationalities working

side by side and one nationality on a foreign flag vessel getting totally different conditions than another. So there are many disparities of the law; and that is why I think it is so very important that

we think very, very carefully about throwing out the projections

that we have without fully understanding the ramifications of

them.

I would really wish that we could have an industry-wide model

program first before we step into those waters of changing hundreds if not thousands of years of maritime practice and law protecting seafarers.

Mr. NORDQUIST. I wanted to say my colleague knows the Maritime Labor Convention much better than I do, having participated

extensively in it; and all I want to comment on is that the proposed

amendments, in my judgment, are comparable to what is state

practice around the world. That isn’t to say that it is fair. The living conditions and many other things are different in different

countries, and we still have an awful lot of respect for the flag. It

comes in handy when it is one of our warships that is under our

flag. So that the flag system is very complex, and I have no comment I can actually offer on what you raised except, the way you

expressed it, it certainly sounded to me like there was something

that was wrong about it. But I can’t say anything about the specifics because, sir, I don’t know.

Mr. TAYLOR. Mr. Chairman, if I may close, you know, there has

been a heck of a lot of debate in this Congress, particularly this

summer, about illegal immigrants taking the jobs of Americans. In

this instance, these are jobs that the American taxpayers paid for.

It is part of the Hurricane Katrina recovery. It will be a part of

the next hurricane recovery. And, again, in fairness, I would ask

that we have a full and open debate on that.

If a ship is going to be tied up in our dock for months at a time

at taxpayer expense, the very least we, as the stewards of those tax

dollars, ought to demand is they live by our rules, every one of our

rules, just like the American flag vessel across the dock from them.

With that, thank you, Mr. Chairman.

Mr. LOBIONDO. Mr. Oberstar.

Mr. OBERSTAR. I think the gentleman from Mississippi has

raised some very cogent and pertinent questions and the gentlelady
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from Florida has done as well. I was listening with one ear as I

was talking to the FAA about other matters in the company room.

I didn’t—

Mr. FILNER. I raised them, too.

Mr. OBERSTAR. I didn’t hear yours. There was a break in the conversation. I wasn’t able to hear what you were saying, but I am

sure they were very, very relevant. No question at all.

Luis Bonanos is a 61-year old pastry chef from Colombia. He understands, writes a little bit of English, can read only a little bit

of English. His shift was 1:00 a.m. to 10:00 a.m. And then 1:00

p.m. to 3:00 p.m. And then 4:30 p.m. to 8:00 p.m. On Sunday

through Friday and so on, for a total of 14 and a half hours Sunday

through Friday and then 15 hours on Saturday. That is 99 and a

half hours a week. His requirement was to put in 70 hours a week.

We have a deposition from him to this effect. But Norweigian

Cruise Lines never paid him overtime, even though the Norweigian

Seamen’s Union contract provided that he would be paid overtime

for over 70 hours.

Now I have never worked on board a cruise line, but I have

taken three cruises. Well, they really weren’t cruises. As a student,

I traveled from New York to New Java aboard the Queen Mary en

route to a graduate program and came back aboard the SS United

States; and when I left Haiti, I took Grace Lines from Haiti to—

after working there 3 and a half years—to New York. So it wasn’t

really a cruise, but it was a port. One of these things we call cruise

vessels today. There were a lot of people that were taking it for a

cruise.

I worked in the inermis. I worked in a concrete block factory. I

earned my way through college. I ducked out a few times, but I

never put in 70 hours in a week. The human body has limits. Our

turnover of time hasn’t changed in 50,000 years. To ask a person

to work 99 hours is bad enough—I mean, on top of not to pay.

So when it came to make the deposition in U.S. District Court

he said, quote, from the deposition, I did not complain about not

being paid overtime because I could not afford to lose my job. I had

a family to support, and they depended on the money I earned.

Workers on the ship are very much afraid of losing their jobs. The

union cannot prevent people from being fired for trivial things.

There is no guarantee you will be rehired at the end of your contract.

For these reasons, people on the ship do not complain about conditions or the lack of payment of overtime because they are afraid

they will be called a troublemaker by the supervisors and soon be

fired. They are not like airline mechanics, AFP mechanics certified

by the FAA; and if the mechanic says I will not sign off this slip,

that plane doesn’t move.

So what do you think about that? Is that, Professor Nordquist,

what you said is an industry-wide practice?

Mr. NORDQUIST. I did not say anything like that.

Mr. OBERSTAR. You were referring to questions asked by the gentleman from Mississippi and saying, well, these are sort of industry

nation, not worldwide practices.

Mr. NORDQUIST. The Maritime Labor Convention does have a 70-

hour provision, but, frankly, I am sure that Mr. Stevenson has
37

something to offer here. But, frankly, I think I can almost rest my

case on what you have said about why I support putting due process into this 1790 law. It is in our 4th and 14th amendments to

the Constitution.

There ought to be due process for a fellow like that, but I don’t

think he is the only person that deserves due process. I think everybody deserves due process. And I am not sure that on a case

like that that I would have any quarrel with the facts as you presented. It is just that I would like to see him—get paid what he

is due right away, rather than waiting 10 years and going through

some big class-action lawsuit clogging up the courts.

Mr. OBERSTAR. Your testimony, which I read over last night, says

much has changed in the last 90 years. Vessels and cruise are

much larger. Treatment of seamen, many of whom are women, is

more humane. I don’t find 99 and a half hours to be more humane.

Mr. NORDQUIST. In the case you gave, was it a woman?

Mr. OBERSTAR. No.

Mr. NORDQUIST. The Maritime Labor Code is attempting to improve on this situation. In any work setting, there are going to be

problems like this person encountered; and I am not at all sympathetic to any employer that treats his people that way. Doug Stevenson has been a much more articulate advocate than I have been

on that point. But my argument for you is that there should be a

due process procedure so that they don’t have to go into court, that

if they have a complaint about their pay stub, they go in and have

proper records. And if they are not getting their overtime and they

are entitled to their overtime and they have really signed a contract, I am in favor of, obviously, of their getting paid promptly.

Mr. OBERSTAR. And—I want to get Mr. Stevenson. And you

would be right if everything were on the level. But if they are—

the workers on board these ships are in the nature of indentured

servants. They don’t have much recourse. Then it is a different picture.

Mr. Stevenson.

Mr. STEVENSON. Well, that is exactly why we are here, sir. These

incredible hours of work that seafarers are induced to work for

tips—and, actually, they would get no additional tips whether they

worked 70 or 110 hours a week. They get the same tips, but it is

a way to inhumanely work people beyond human limits.

And I might add that probably the person you are talking about

not only was working these kind of hours every week but 4 weeks

out of the month and for a contract from 6 to 10 months out of the

year with no right to be rehired. Once these seafarers finish their

contracts, they go to their recruiting agency, and they try to get another contract. Because they are hired through recruiting agencies,

for the most part, in their home country; and they know from the

ship and they know from the recruiting agency that if they try to

enforce their rights they will be labeled a troublemaker and they

will be sent home probably never to work again on another ship.

And these are highly valued jobs.

An ordinary seafarer, ordinary seaman coming from the Philippines working on a cruise vessel is making more than the doctor

in his hometown, making more than his high school principal. So
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they are not going to jeopardize that. That is why they put up with

these kinds of hours.

And putting a notice requirement—let us say, for example, the

180-day notice requirement. Seafarer starts his 10-month contract.

Notices his first paycheck is wrong. He complains. He is on the

next plane home.

And, by the way, the shipping company doesn’t have to pay him

for 4 days. By that time, our immigration laws, which say, well, he

is out of a job. He is no longer a crew member. He is out of the

country within 24 hours.

Mr. OBERSTAR. So how do you get protection for this person? If

that happened in an iron ore mining processing plant in my district, they would shut that plant down today. The union would shut

it down, and no one would walk off the property, and they would

fix the problem right then. What protection does this person have

on a ship?

Mr. STEVENSON. Fortunately, this person still has a penalty wage

statute that exists today. That person, if we change it in the notice

requirements, it would encourage litigation. The provision that

says that the penalty is up to 2 days wages would make—guarantee that the shipping company would never pay because it would

want to litigate what is an appropriate penalty. And, furthermore,

the process where the shipping company would have a certain period of time to correct their own—put the money into escrow, he

has two choices when notified. He can either pay the seafarer or

he can put the money into escrow and then go to court for determination.

Well, what does that result in? If the shipowner puts the money

in escrow, goes to court, the seafarer is home. He can’t come back

to litigate; and if he could come back, he couldn’t afford the cost

of defending the suit. So the shipping company would have a default judgment, be able to keep the penalty and the wages. It would

not help the seafarer.

What these notice requirements do is not provide due process for

the seafarer but rather makes a simple, straightforward process

into a highly complicated procedure that would make it guaranteed

that the seafarer would never be able to take advantage of it. It

would be as, Professor Nordquist’s written statement said, the

equivalent of our U.S. Tax Code in complexity.

Now we don’t want to change a simple procedure that is understandable by anybody, that doesn’t require judicial determination

and can be understood whether you speak English or not, to be

changed to this complex issue that even I have trouble understanding, and I am a lawyer.

Mr. OBERSTAR. Well, I understand that the Royal Caribbean and

Norweigian Cruise Lines have respectively reached settlement

agreements in class action cases for $18.4 million and $25 million

respectively. How would this due process language work in such—

if you could bring a class action suit?

Mr. NORDQUIST. Mr. Oberstar, you wouldn’t have that extraordinarily complex litigation when you are talking about 5,000,

10,000 litigants if there would have been a fair process in place to

begin with. That is, if a wage earner is due money and he notifies

his payer, the payer is only given 60 days and he has got to pay
39

that money or put it in escrow, and there are lots of ways that pay

disputes are settled short of going into that kind of litigation.

Mr. OBERSTAR. Does that individual have a shop steward on the

ship to defend him and back him up with the captain?

Mr. NORDQUIST. I am not sure there is uniform practices about

that.

Mr. OBERSTAR. I know in the days before the Steelworkers Union

in the ore mines in northern Minnesota, if you complained about

something, if the mining boss didn’t like it, he sent you home; and

that was it. And they had spies in the—we called them stool pigeons—in the barber shops and in the pool halls and in the libraries to see what books the men took out because they might be taking out something subversive about how to organize a union; and

if they had just a little snitch, bang, you are out.

Then we got the Steelworkers Union; and my father, frankly,

was the first one to join—card number one, 1937.

Then they had someone to stand up for them.

If you are on board a ship and do not have an union and you

don’t have an organization and have someone to back you, and you

are from land’s end someplace and you do not speak English very

well, and you do not read it very well, and they want to hang you,

they can do it.

Mr. NORDQUIST. Under the Maritime Labor Convention, if a seaman is in a U.S. Port, even if he/she is a foreign seaman, there is

a requirement to comply with its judicial settlement terms. They

can be enforced by the Coast Guard.

There are a lot of things that we need to do to improve from

what you outlined, and I respect very much the distance we have

come. There is a lot of room for commonality here. I am not sure

there is that much disagreement.

Mr. OBERSTAR. Thank you. Luis Bonanos, by the way, was fired

for having a not quite clean enough pot in his locker.

Mr. Stevenson.

Mr. STEVENSON. Thank you, sir. Just from the practice in the

cruise industry, not every cruise line has collective bargaining

agreements. Some do and some don’t.

And some international unions in foreign countries are not the

same type of unions that you would understand in the iron fields

in Minnesota. Some unions are nothing more than hiring halls for

replacement agencies for seafarers.

Now I go back: What is due process? What does a seafarer do in

this situation?

That is what the value of the Penalty Wage Act has been over

the years, since 1790, where seafarers have known, when they

come to the United States, there is some hope of justice. They may

not be able to afford counsel to litigate a case because when you

look at the cost of litigation in the United States, that is another

issue that we want to look at. But they knew that there was a penalty wage statute that said any seafarer on a ship that takes on

or discharges cargo in the United States, the courts of the United

States are open and there will be a 2-day penalty for every day of

delay to encourage ship owners to make sure they are paying their

seafarers on time.
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Another way of looking at this is, perhaps these class action suits

have demonstrated that the cruise lines involved were not deterred

by that 2-day penalty for every day of delay. And maybe another

solution would be to raise the penalty to 3 or 4 days’ penalty. That

is another way we can look at it.

But the cards are all in the ship owners’ hands. They are the

ones who can determine how much the seafarer is getting paid.

They are the ones who can make sure the seafarers are getting

paid; and they, as an industry, can set an industry-wide standard

of conduct to make sure that seafarers’ rights are protected in that

industry, to dispel all of these bad past practices we are talking

about.

Mr. OBERSTAR. That is exactly what concerns me is, the deck is

stacked against the worker. The ship owner has great power. In

this draft discussion, draft bill there is a proposal for a statute of

limitation on wage claims. They would propose 3 years from the

date of commencement of the voyage.

Now, Professor Nordquist, you are from a very distinguished institution, Mr. Jefferson’s university, on which there was a great

program the other night on the History Channel. It was wonderful.

I will be diverting if I go into discussion of it. You should get it

and see it, the brilliance of Jefferson.

But I do not think he would have agreed that the statute of limitation should run from the commencement of the voyage, but rather from the date that the claim arose. Is that not the way you usually do?

Mr. NORDQUIST. To be very direct, the principle of the statute of

limitations is what is important, and it ought to be a clear event

to trigger it. In the Fair Labor Standards Act they have a 3-year

statute of limitations for where there is willful misconduct.

Mr. OBERSTAR. When does it start running?

Mr. NORDQUIST. From the time the dispute arises.

Mr. OBERSTAR. But not from the commencement of the voyage?

Mr. NORDQUIST. No. They tailored this to their circumstances.

The important point is that there is no change to the penalty in

the law under the proposed amendments. There is a proposed 3-

year statute of limitations. If 3-1/4 years is better, you know, I cannot offer any judgment on it.

I do think that there is a very sound reason that virtually every

other aspect of American law has a statute of limitations. The reason is that after a certain period of time, you simply cannot get justice.

Mr. OBERSTAR. I agree, but, Mr. Stevenson, should that time

start running from the date you get on board the ship or should

it start running from the time of the infraction?

Mr. STEVENSON. Well, if there is a statute of limitation, obviously

the time of commencement of any statute of limitations should be

the time the injured party has knowledge of the injury or should

have had knowledge of the injury.

I mean, this case that is proposed by the cruise industry is that

the statute of limitations would begin from the time the seafarer

started working on the ship, before—there could be months or a

year before anything happened.
41

Mr. OBERSTAR. It just does not make any sense at all. That is

abusive.

Mr. STEVENSON. But it has not been a problem actually in the

past, without having a statute of limitation. The law of laches, the

equitable principle of laches, has worked quite effectively in the

very few cases that ever come to court underthe Penalty Wage Act.

So I am not certain that is a necessity for the change.

I think all of the changes taken together show there is a lot more

study that needs to be done in every single one of these provisions

before it is enacted.

Mr. OBERSTAR. Now, the draft legislation also would—it seems to

me, would stop class action cases by requiring an employee to provide 180 days’ notice. Is that your reading?

Mr. NORDQUIST. That would be the longer of the two periods, yes.

Mr. OBERSTAR. Well, there are many other questions about this

draft legislation, and I just I think it is really oppressive on the

worker. And if we were to be enamored of the wages and hour law

in the U.S. That is time-and-a-half for overtime over 40 hours.

Steelworkers even negotiated time-and-a-half for over 8 hours; that

was a major breakthrough. It took us 200 years in the Industrial

Revolution to get to a 10-hour workday. That was 1910. And then

it took another 25 years to get to an 8-hour workday. And now, in

the cruise lines, it has gone to 70 hours and to 100 hours.

Body circadian rhythms haven’t changed in 50,000 years, and I

do not know how people do that. I do not know how they perform

underthose circumstances. But when they sign on, they ought at

least to have justice on their side. And I do not think this language

in here provides a path to justice.

Thank you, Mr. Chairman.

Mr. LOBIONDO. We are supposed to have votes in about 15 minutes. It is my intention to wind this up at this time. I have tried

to be very generous with the allotment of time to ask questions.

If anybody has additional questions, we will be happy to accommodate, but we are going to wrap this up before the votes I can

promise you.

Okay, seeing no more questions, the meeting is adjourned.

[Whereupon, at 4:46 p.m., the subcommittee was adjourned.]
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